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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of UFO Moviez India Ltd.

Mar 31, 2025

a) The right to use assets pertains to office premises and warehouses taken on lease by the company and plant and machinery pertains to V-sat taken on lease.

b) The Company is principally engaged in the business of exhibition of digital cinema. The carrying amount of goodwill as at March 31,2025 is '' 2,907.22 lacs (March 31, 2024 : '' 2,310.89 lacs)

The Company performed its annual impairment test for the year ended March 31, 2025, considering its performance and the overall performance of the media industry. Impairment analysis has been performed by considering projections for a period of 5 years, as the Company believes this is to be the most appropriate timescale over which to review and consider annual performances before applying a fixed terminal value multiple to the final year cash flows. The estimated value-in-use computed by management is based on the future cash flows using a 2% annual growth rate for periods subsequent to the forecast period of 5 years and discount rate of 10.5%. An analysis of the sensitivity of the computation to a change in key parameters (revenue forecasts, operating margin, and discount rates), based on reasonable assumptions, did not identify any probable scenario in which the recoverable amount of the Goodwill would decrease below its carrying amount.

(b) Terms/rights attached to equity shares Voting rights

The Company has only one class of equity shares having face value of '' 10 per share. Each holder of equity shares having a face value of ''10 per equity share is entitled to one vote per equity share.

Rights as to Dividend

The equity shareholders have right to receive dividend when declared by the Board of Directors subject to approval in the ensuing Annual General Meeting, except in case of interim dividend. The Company declares and pays dividend in Indian Rupees.

Rights pertaining to repayment of capital

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) Securities premium reserve : Securities premium reserve is credited when shares are issued at premium. It can be used to issue bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs, etc.

b) Capital Reserves : Reserve created under the scheme of arrangement (Business combination). The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

c) Employee share option reserve : The share option outstanding account is used to record value of equity-settled share based payment transactions with employees. The amount recorded in this account are transferred to securities premium upon exercise of stock options by employees. In case of forfeiture, corresponding balance is transferred to general reserve.

d) Retained earnings : Retained earning are the profit that the Company has earned till date, less any dividends or other distribution paid to the shareholders.

e) General reserve : The general reserve is a free reserve which is used from time to time to transfer profits from / to retained earnings for appropriation purposes. It represents reserve created on account of transfer of cost relating to employee stock options expired at the end of vesting period.

f) Amalgamation Deficit Reserve : The Scheme of Arrangement for the amalgamation of Company''s wholly owned subsidiaries including its step down subsidiaries all assets and liabilities, including reserves of the Amalgamating Companies have been recorded at their respective book values as appearing in their respective books on the date immediately preceding the Appointed Date. The difference in books of accounts of the Transferee Company on account of: Net assets taken over; Reserves acquired and cancellation of investments in Transferor Companies and any consideration paid is recorded in Amalgamation Reserve account of the Transferee Company.

g) Dividend : Dividend paid and declared by the Company during the year is '' Nil (March 31,2024 : Nil)

Term loan 1 having interest of bank 1 year MCLR plus 70 basis points i.e. 10.19% (March 31,2024 : 9.96%) p.a. is repayable in 48 monthly installments starting from July 31, 2020.

Term loan 2 having interest of bank 3 month MCLR plus 160 basis points i.e. 11.55% (March 31, 2024 : 11.10%) p.a. is repayable in 10 quarterly installments starting from March 31, 2022

Term loan 3 having interest of bank 3 month MCLR plus 160 basis points i.e. 11.65% (March 31, 2024 : 11.03%) p.a. is repayable in 18 quarterly installments starting from May 22, 2023

Term loan 4 having interest of bank 6 Month MCLR plus 65 basis points i.e. 10.25% (March 31,2024 : 9.83%) p.a. is repayable in 48 monthly installments starting from June 01,2023.

Term loan 5 having interest of bank 1 year MCLR plus 50 basis points i.e. 9.80% (March 31, 2024 : 9.70%) p.a. is repayable in 54 monthly installments starting from June 01,2024

Term loan 6 having interest of bank 3 month MCLR plus spread of 10 basis points i.e. 10.09% (March 31, 2024 : NA) p.a. is repayable in 54 monthly installments starting from January 26, 2025

Vehicle Loan 1 having Interest rate 8.45% (March 31, 2024: 8.45%) p.a. is repayable in 48 monthly installments starting from December 10, 2022

Vehicle Loan 2 having Interest rate 9.30% (March 31, 2024: NA) p.a. is repayable in 59 monthly installments starting from February 14, 2025

Vehicle Loan 3 having Interest rate 8.53% (March 31, 2024: NA) p.a. is repayable in 60 monthly installments starting from March 19, 2025

b) Defined benefit plan-Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Provision in respect of leave encashment benefits has been made based on actuarial valuation carried out by an independent actuary at the Balance sheet date using Projected Unit Credit method. During the year '' 73.87 lacs (March 31, 2024: '' 84.19 lacs) is recognised as an expense in the Statement of profit and loss.

31. Employee stock option plans

During the year ended March 31, 2025, the Company''s equity-settled ESOP Scheme viz., ESOP Scheme 2014 was in existence.

(a) Employee Stock Option Scheme 2014 (ESOP 2014) :

Till year ended March 31, 2025, the Compensation Committee of the Board of Directors of the Company has granted 1,196,000 Options to the eligible employees of the Company and subsidiary companies under its Employee Stock Option Scheme 2014 (ESOP 2014).

Further, the Compensation Committee of the Board of Directors of the Company at its meeting held on June 20, 2022, granted 75,000 Options to the eligible employees of the Company under its Employee Stock Option Scheme 2014 (ESOP 2014).

Out of the total options granted, 830,474 options have been exercised by the eligible employees and 88,625 options have lapsed due to the resignation of eligible employees.

The Carrying amount of Employee stock option reserve as at March 31,2025 is '' 31.21 lacs (March 31,2024: '' 122.74 lacs). The Company measures the cost of ESOP using the fair value method. The option has been granted on an exercise price of ''50. As a result, an expense of ''1.56 lacs (March 31,2024 : ''10.56 lacs) is recorded in Statement of Profit and Loss in current year.

32. Leases

Company as lessee

The Company''s significant leasing arrangement comprises of land and buildings taken on lease for office and warehouse facilities. These leases are cancellable lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee.

a) The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and ordinary course of business. The assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Outstanding balances at the year-end are unsecured and settlement occurs in cash.

b) The Independent and Non-executive Director are also entitled to payment of remuneration in accordance with the limits prescribed under Section 197 read with Section II of Part II of Schedule V of the Act.

a) The Company is contesting the demand/matter relating to pending litigations listed above and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for the tax and other demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

b) Cochin Case : The Company has received an Order dated January 30, 2017 from Asst. Commissioner, Commercial Tax Special Circle Ernakulum for the period 2012 to 2013 demanding tax on the difference in closing stock and difference in material movement value as per VAT return and VAT Audit report. The dispute is that Sales Tax Department has passed an order without considering the fact that company has already applied for revision of return and it is pending for approval from commercial tax department. The Sales Tax Department has issued the notification allowing the revision of return of earlier period. The company has revised its return and case is pending for hearing for Final Closure.

36. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED'') which came in to force from October 2, 2006, certain disclosures are required to be made relating to dues to Micro and Small enterprises. On the basis of information and records available with the Management, the following disclosures are made for the amounts due to Micro and Small enterprises:

The Company''s financial liabilities comprise mainly of borrowings, trade payables , other payables and Corporate guarantees. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

The Company is exposed to market risk , credit risk and liquidity risk. The Company''s Senior Management oversees the management of these risks. The Company''s senior management determines the financial risks and the appropriate financial risk governance framework through relevant policies and procedures for the Company. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

1. 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 two types of risks: interest rate risk and currency risk. Financial instruments affected by market risk include borrowings, investments and deposits, loans and derivative financial instruments.

a) 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 the risk of changes in market interest rates relates primarily to the long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a portfolio of fixed and variable rate loans and borrowings wherever feasible.

The following table demonstrates the sensitivity to a reasonably possible change in floating rate of interest on borrowings . With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

3) Currency risk

Currency risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates. The majority of the Company''s revenue and expense are in Indian Rupees, with the remainder denominated in US Dollars. Management considers currency risk to be low and does not hedge its own currency risks.

2. Credit risk :

The risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limit and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approval for credit. The Company majorly operates locally and hence Company''s exposure on credit risk from receivable''s in different geographies is not significant.

Financial instruments that are subject to concentration of credit risk principally consist of trade receivables, unbilled revenue, investments, cash and cash equivalents, bank deposits and other financial assets .

Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company by continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks with high credit ratings assigned by international credit rating agencies.

Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of the customers to which the Company grants credit terms in the normal course of business. The Company uses the expected credit loss model to assess any required allowances; and uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. This matrix takes into account credit reports and other related credit information to the extent available. None of the other financial assets of the Company result in material concentration of credit risk. No single customer contributes to > 10% of sales.

The Company has also considered the effect of changes, if any, in both counterparty credit risk and own credit risk while assessing risk pertaining to financial assets. The Company continues to believe that there is no impact on such assets.

3. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitment associated with financial instruments that are settled by delivering cash or another financial assets. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by having adequate amount of credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost effective manner.

The table below analyses financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets includes amounts related to our contractual right to consideration for completed performance objectives not yet invoiced and deferred contract acquisition costs, which are amortized along with the associated revenue. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long term debts including current maturities divided by equity attributable to owners of Company .

41. Events subsequent to Balance Sheet date

There are no events subsequent to Balance Sheet date which require adjustment to or disclosure in the Standalone Financial Statements.

42. Corporate social responsibility

As per section 135 of the Companies Act, 2013 and rules therein, the Company is required to spend at least 2% of average net profit of past three years towards Corporate Social Responsibility (CSR). Details of corporate social responsibilities expenditures are as follows:

The areas of CSR activities are on providing healthcare, education and rehabilitation for underprivileged girls and children from the rural village.

A CSR committee has been formed by the Company as per the Act. The funds were primarily utilized on these activities which are specified in Schedule VII of the Companies Act, 2013:

a) On March 18, 2025, the National Company Law Tribunal (NCLT) has approved scheme of arrangement for the amalgamation of Company''s two Wholly Owned Subsidiaries viz. Scrabble Digital Limited (âSDLâ) and UFO Software Technologies Private Limited (âUSTPL), (together referred to as the âTransferor companiesâ) with UFO Moviez India Limited (âthe Transferee Companyâ or âUFOâ) (âthe Schemeâ). under Sections 230 to 232 read with Section 66 and Section 52 and other applicable provisions of the Companies Act, 2013 from appointed date April 01, 2024.

b) Consequent to fulfilment of all the conditions relating to the Scheme including filing of certified copy of the Order with the Registrar of Companies, the Scheme is effective on 31st March 2025 with effect from the appointed date of April 1, 2024 for the amalgamation of SDL and USTPL with the Company.

c) Being amalgamation of entities under common control, the amalgamation has been accounted using pooling of interest method as prescribed under Appendix C of Indian Accounting Standard (âInd ASâ) 103 - âBusiness Combinationâ notified under Section 133 of the Act read with relevant rules issued thereunder and/ or such other applicable accounting standard prescribed under the Act. The previous period / year figures in the standalone results have been restated to give the effect of amalgamation in accordance with the scheme. However, this has no impact in the consolidated results.

d) In accordance with the Scheme :

(i) All assets and liabilities, including reserves of the Transferor Companies, have been recorded at their respective book values on the date immediately preceding the Appointed Date.

(ii) Net assets taken over (including Goodwill in the consolidated financial statements of UFO pertaining to SDL & USTPL) and Reserves acquired are cancelled against Investments in transferor companies as recorded in the books of UFO.

e) Being amalgamation of entities under common control, as per the requirement of Appendix C of Ind AS 103, previous year figures have been restated to give effect to the amalgamation from the first day of the preceding period, i.e. from April 01, 2023

f) Further, as provided in the scheme, securities premium account in the books of UFO has been utilised to adjust the following balances in the books of UFO as on the appointed date:

(i) Debit balance in profit and loss account - ''12,409.68 lacs

(ii) Debit balance in amalgamation deficit reserve account (including any debit balance arising out of the scheme) '' 6,746.49 lacs

a) During the previous year ended March 31,2024, the National Company Law Tribunal (NCLT) had approved the Scheme of Arrangement for the amalgamation of Company''s wholly owned subsidiaries including its step down subsidiaries namely, Scrabble Entertainment Limited (âSELâ) and Plexigo Entertainment Private Limited (âPEPLâ) and Zinglin Media Private Limited (âZMPLâ) and Scrabble Entertainment (Mauritius) Limited (âSEMLâ) (together referred to as the âmerging companiesâ) with the Company (âthe Schemeâ).

b) Consequent to fulfilment of all the conditions relating to the Scheme including filing of certified copy of the Order with the Registrar of Companies, the Scheme was effective from February 21, 2024 with effect from the appointed date of April 1,2023 for the amalgamation of SEL, PEPL, ZMPL and SEML with the Company.

c) The amalgamation has been accounted using pooling of interest method as prescribed under Indian Accounting Standard (âInd ASâ) 103 - âBusiness Combinationâ notified under Section 133 of the Act read with relevant rules issued thereunder and/ or such other applicable accounting standard prescribed under the Act.

d) In accordance with the Scheme :

(i) All assets and liabilities, including reserves of the Amalgamating Companies have been recorded at their respective book values as appearing in their respective books on the date immediately preceding the Appointed Date.

(ii) The difference in books of accounts of the Transferee Company on account of:

(a) Net assets taken over;

(b) Reserves acquired and cancellation of investments in Transferor Companies is recorded in Amalgamation Deficit Reserve account of the Transferee Company amounting to '' 6,746.48 lacs

45. Acquisition of business

The Company has acquired digital cinema deployment business under Business Transfer Agreement dated December 16, 2024 from United Mediaworks Private Limited for a consideration of '' 1,300 lacs, in order to gain benefits of business synergies and expansion of current market presence of the Company. Out of the total consideration, ''1,000 lacs is paid by the company on the transaction date while balance consideration of '' 300 lacs is payable over a period of 24 months which is discounted by the Company as per Ind AS 109.

E. Disclosure related to combined entity''s revenue as if the acquisition had been done at beginning of the year:

It is impracticable for the Company to disclose Revenue and Profit information of the said business as the given acquisition of the business is a slump sale transaction where specific assets and liabilities were identified and transferred and no information of revenue from operations and profits of the said business of United Mediaworks Private Limited is available with the Company.

46. Investments during the yearInvestment by the CompanyInvestment in Nova Cinemaz Private Limited.

During the year ended March 31,2025, the Company has made an investment of '' 398 lacs in Nova Cinemaz Private Limited, subscribing to 39,800 Non-Cumulative Optionally Convertible Redeemable Preference Shares (''NCOCRPS'') of face value of '' 1000/- each at par, this allotment has been approved by the Board of Directors of Nova Cinemaz Private Limited

48. Additional Regulatory Information

(i) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(ii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iii) The Company do not have any transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(v) The Company do not have any Benami property, where any proceeding has been initiated or pending against the

Company for holding any Benami property.

(vi) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(viii) The Company does not have any such transaction which is not recorded 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 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(ix) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company

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

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:

(a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party

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

49. Code on Social Security, 2020

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules to determine the financial impact are published.

Mar 31, 2024

(o) Provisions and Contingent liabilities

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, 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. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.

Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer. A present obligation that arises from past events, where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed 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.

Claims against the Company, where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent Asset

Contingent asset is not recognised in consolidated financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date

(p) Employee share based payment

The employees of the company and its subsidiary receive remuneration in the form of share-based payments in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the awards given to employees is recognised as ''employee benefit expenses'' with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer using Black Scholes Model. At the end of each reporting period, apart from the non-market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest. When the options are exercised, the Company issues fresh equity shares.

(q) Borrowing cost

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(r) Segment reporting

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in these standalone financial statements.

(s) Measurement of earnings before interest, tax, depreciation and amortization (EBITDA)

As per Guidance Note on Division II- Ind AS Schedule III to the Companies Act, 2013, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the Statement of profit and loss. The Company measures EBITDA on the basis of profit from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs, finance income and tax expense.

Over the last two years, the Company has seen business returning back to normal post the Covid period and has started utilizing the deferred tax asset from the last quarter of the financial year ended March 31, 2023. Therefore, management continues to consider it probable that future taxable profits would be available against which the tax losses can be recovered and the related deferred tax asset can be realised.

The Company invoices its customer based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Invoices are generally payable when raised. Contract assets includes amounts related to our contractual right to consideration for completed performance objectives not yet invoiced and deferred contract acquisition costs, which are amortized along with the associated revenue. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

b) Capital Reserves : Reserve created under the scheme of arrangement (Business Combination). The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

c) Employee share option outstanding : The share option outstanding account is used to record value of equity-settled share based payment transactions with employees. The amount recorded in this account are transferred to securities premium upon exercise of stock options by employees. In case of forfeiture, corresponding balance is transferred to general reserve.

d) Retained earnings : Retained earning are the profit that the Company has earned till date, less any dividends or other distribution paid to the shareholders.

f) Amalgamation Deficit Reserve : The Scheme of Arrangement for the amalgamation of Company''s wholly owned subsidiaries including its step down subsidiaries all assets and liabilities, including reserves of the Amalgamating Companies have been recorded at their respective book values as appearing in their respective books on the date immediately preceding the Appointed Date. The difference in books of accounts of the Transferee Company on account of: Net assets taken over; Reserves acquired and cancellation of investments in Transferor Companies is recorded in Amalgamation Reserve account of the Transferee Company.

Term loan 1 having interest of bank 1 year MCLR plus 70 basis points i.e. 9.96% (March 31, 2023 : 8.69%) p.a. is repayable in 48 monthly installments starting from July 31, 2020.

Term loan 2 having interest of bank 3 month MCLR plus 160 basis points i.e. 11.10% (March 31, 2023 : 9.94%) p.a. is repayable in 10 quarterly installments starting from March 31, 2022

Term loan 3 having interest of bank 3 month MCLR plus 160 basis points i.e. 11.03% (31 March, 2023 : 10.06%) p.a. is repayable in 18 quarterly installments starting from May 22, 2023

Term loan 4 having interest of bank 6 Month MCLR plus 65 basis i.e. 9.83% (31 March 2023 : 8.64%) p.a. is repayable in 48 monthly installments starting from Jun 01, 2023.

Term loan 5 having interest of bank 1 year MCLR plus 50 basis points i.e. 9.70% (March 31, 2023 : Nil) p.a. is repayable in 54 monthly installments starting from June 1, 2024

31. Employee stock option plans

During the year ended March 31, 2024, the Company''s equity-settled ESOP Scheme viz., ESOP Scheme 2014 was in existence.

(a) Employee Stock Option Scheme 2014 (ESOP 2014) :

Till year ended March 31, 2024, the Compensation Committee of the Board of Directors of the Company has granted 1,196,000 Options to the eligible employees of the Company and subsidiary companies under its Employee Stock Option Scheme 2014 (ESOP 2014).

Out of the total options granted, 830,474 options have been exercised by the eligible employees and 88,625 options have lapsed due to the resignation of eligible employees.

Notes:

a) The Company is contesting the demand/matter relating to pending litigations listed above and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

38. Financial risk management / objectives and policies

1. Market risk

a) Interest rate risk :

2. Credit risk :

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum credit risk exposure to credit risk was '' 13,541.17 lacs and '' 11,085.61 lacs as at March 31 2024 and March 31, 2023 respectively as per the table below.

3. Liquidity risk

a) On January 17, 2024, the National Company Law Tribunal (NCLT) has approved the Scheme of Arrangement for the amalgamation of Company''s wholly owned subsidiaries including its step down subsidiaries namely, Scrabble Entertainment Limited (âSELâ) and Plexigo Entertainment Private Limited (âPEPLâ) and Zinglin Media Private Limited (âZMPLâ) and Scrabble Entertainment (Mauritius) Limited (âSEMLâ) (together referred to as the âmerging companiesâ) with the Company (âthe Schemeâ).

b) Consequent to fulfilment of all the conditions relating to the Scheme including filing of certified copy of the Order with the Registrar of Companies, the Scheme is effective on February 21,2024 with effect from the appointed date of April 1, 2023 for the amalgamation of SEL, PEPL, ZMPL and SEML with the Company.

d) In accordance with the Scheme :

(ii) The difference in books of accounts of the Transferee Company on account of:

(a) Net assets taken over;

(b) Reserves acquired and cancellation of investments in Transferor Companies is recorded in Amalgamation Reserve account of the Transferee Company.

(ii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iii) The Company do not have any transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(v) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(vi) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(vii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(viii) The Company do not have any such transaction which is not recorded 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 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(ix) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities

(Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company

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

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:

(a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party

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

48. Code on Social Security, 2020

The accompanying notes 1 to 48 are an integral part of the Standalone Financial Statements.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors

Chartered Accountants of UFO Moviez India Limited

Firm''s Registration No: 101248W/W-100022 CIN : L22120MH2004PLC285453

Rajesh Mehra Sanjay Gaikwad Rajesh Mishra

Partner Managing Director Executive Director and Group CEO

Membership No: 103145 DIN No.: 01001173 DIN No.: 00103157

Ashish Malushte Kavita Thadeshwar

Place : Mumbai Chief Financial Officer Company Secretary

Date : May 23, 2024 Membership No.: A18651

Mar 31, 2023

(p) Provisions and Contingent liabilities

Claims against the Company, where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent Asset

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date

(q) Employee share based payment

(r) Borrowing cost

(s) Segment reporting

(t) Measurement of EBITDA

b) Capital reserves : Reserve created under the scheme of arrangement (Business Combination). The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

c) Employee share option outstanding: The share option outstanding account is used to record value of equity-settled share based payment transactions with employees. The amount recorded in this account are transferred to securities premium upon exercise of stock options by employees. In case of forfeiture, corresponding balance is transferred to general reserve.

d) Retained earnings : Retained earning are the profit that the Company has earned till date, less any dividends or other distribution paid to the shareholders.

e) General reserve: The general reserve is a free reserve which is used from time to time to transfer profits from / to retained earnings for appropriation purposes. It represents reserve created on account of transfer of cost relating to employee stock options expired at the end of vesting period.

31. Employee stock option plans

During the year ended March 31, 2023, the Company''s equity-settled ESOP Scheme viz., ESOP Scheme 2014 was in existence.

(a) Employee Stock Option Scheme 2014 (ESOP 2014) :

Till the previous year ended March 31, 2022, the Compensation Committee of the Board of Directors of the Company has granted 11,21,000 Options to the eligible employees of the Company and subsidiary companies under its Employee Stock Option Scheme 2014 (ESOP 2014).

Out of the total options granted, 4,25,496 options have been exercised by the eligible employees and 54,125 options have lapsed due to the resignation of eligible employees.

38. Financial risk management / objectives and policies

1. Market risk

a) Interest rate risk :

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables and unbilled revenue, which are typically unsecured and are derived from revenue from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of the customers to which the Company grants credit terms in the normal course of business. The Company uses the expected credit loss model to assess any required allowances; and uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. This matrix takes into account credit reports and other related credit information to the extent available. None of the other financial assets of the Company result in material concentration of credit risk.

3. Liquidity risk

44. Investments during the year Investment by the Company

Investment in Plexigo Entertainment Private Limited (Plexigo)

During the year ended March 31,2022, the Company had further invested an amount of '' 25 lacs by subscribing to 25,00 NonCumulative Optionally Convertible Redeemable Preference Shares (NCOCRPS) of Plexigo Entertainment Private Limited (Plexigo). As on March 31, 2023, the Company has invested an aggregate amount of '' 276 lacs in Plexigo.

Investment in Zinglin Media Private Limited (Zinglin) :

During the previous year ended March 31,2022, the Company had further invested an amount of '' 159.91 lacs by subscribing to 15,991 NCOCRPS of Zinglin Media Private Limited (Zinglin). As on March 31, 2023, the Company has invested an aggregate amount of '' 410.91 lacs in Zinglin.

Investment in Nova Cinemaz Private Limited.

During the previous year ended March 31,2022, the Company has made an investment of '' 125 lacs in Nova Cinemaz Private Limited, subscribing to 1,250,000 equity shares of '' 10 each, allotment of which has been approved by the Board of Directors of Nova Cinemaz Private Limited at its meeting held on March 28, 2022. During the year ended March 31,2023, the Company has made an investment of '' 300 lacs in Nova Cinemaz Private Limited, subscribing to 3,000,000 equity shares of '' 10 each, its wholly owned subsidiary, for its NOVA EUC business.

Investment in the Company - Preferential allotment

During the previous year ended March 31, 2022, the Company made an allotment of 9,399,933 (Ninety Three Lakhs Ninety Nine Thousand Nine Hundred and Thirty Three) equity shares of the Company of face value of '' 10 each fully paid-up by way of preferential allotment for cash consideration to Nepean Focused Investment Fund, a scheme of investment of Nepean Investment Trust II, a category II Alternative Investment Fund registered with the Securities and Exchange Board of India (âAllotteeâ) at a price of '' 103.01 per equity share, aggregating to '' 9,682.87 lacs.

As on March 31,2023, the proceeds from such allotment were utilised for the stated purposes in the issue document and there were no deviations.

(v) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(vi) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(vii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(ix) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company

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

(a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party

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

47. Business Outlook Post Covid-19

Post lifting of Covid related occupancy restrictions late last year and the reopening of cinemas, filmgoers have started revisiting Cinemas, thus giving boost to the sentiments of the exhibition industry. The theatrical exhibition industry has witnessed recovery and an improved performance during the year. The Company has continued with its strategy of keeping a check on controllable costs and having adequate liquidity. As per the management, the Company is expected to generate sufficient funds from its operating activities and will have sufficient financing arrangements to fulfil its working capital requirements and necessary capital expenditure. Management believes that the long-term drivers of the business are intact and does not anticipate any risks to the business or its ability to meet its financial obligations in the foreseeable future.

48. Code on Social Security, 2020

The accompanying notes 1 to 48 are an integral part of the Standalone Financial Statements.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors

Chartered Accountants of UFO Moviez India Limited

Firm''s Registration No: 101248W/W-100022 CIN : L22120MH2004PLC285453

Rajesh Mehra Sanjay Gaikwad Rajesh Mishra

Partner Managing Director Executive Director and Group CEO

Membership No: 103145 DIN No.: 01001173 DIN No.: 00103157

Ashish Malushte Kavita Thadeshwar

Place : Mumbai Chief Financial Officer Company Secretary

Date : May 25, 2023 Membership No.: A18651

Mar 31, 2019

1. Employee stock option plans

During the year ended 31 March 2019, the Company''s equity settled ESOP Schemes viz., ESOP Scheme 2014 was in existence.

(a) Employee Stock Option Scheme 2014 (ESOP 2014) :

The Compensation Committee recommended the new ESOP Scheme 2014 and the Board approved the new ESOP Scheme 2014 at its meeting held on 11 November 2014 and Shareholders approved this ESOP Scheme 2014 at its meeting held on 20 November 2014.

As per the ESOP Scheme 2014, 25% of the options shall vest equally at the end of each year from the date of grant.

The exercise period of these options is as follows :

i) For the employees while in employment of the Company : Within a period of two years from the date of vesting of the respective Employee Stock Options.

ii) For the retired employees, termination due to permanent disability, death: Within six months from the date of retirement, termination due to physical disability or death, respectively.

*On 3 April 2018, the Board of Directors of the Company and on 15 May 2018 the Shareholders of the Company have approved the amendment in the employee stock option scheme 2014, whereby exercise price of existing granted options (419,002 vested options and 209,501 unvested options) got revised from Rs, 600/- per option to Rs, 400/- per option and its exercise period got extended upto 11 December 2020.

*On 3 April 2018, the Board of Directors approved the grant of 208,578 options under employee stock option Scheme 2014 at an exercise price of Rs, 400/- per option to the employee of the Company and its Subsidiaries.

2. Related party disclosure

1. Names of related parties where control exists irrespective of whether transactions have occurred or not.

Subsidiaries Scrabble Entertainment Limited

Valuable Digital Screens Private Limited United Film Organisers Nepal Private Limited, Nepal PJSA Technosoft Private Limited UFO Lanka Private Limited, Sri Lanka*

UFO Software Technologies Private Limited

United Film Organisers(Mauritius) Private Limited, Mauritius (upto 08 June 2018)

Step-down subsidiaries Scrabble Entertainment DMCC, Dubai

Scrabble Entertainment (Lebanon) Sarl, Lebanon Scrabble Digital Inc.,USA.

Scrabble Entertainment Mauritius Limited, Mauritius Scrabble Entertainment Israel Ltd, Israel*

Scrabble Digital Limited (w.e.f. 15 December 2018)

* Under voluntary liquidation

Names of other related parties with whom transactions have taken place during the year.

Key management personnel Mr. Sanjay Gaikwad - Managing Director

Mr. Kapil Agarwal - Joint Managing Director

Mr. Ashish Malushte - Chief Financial Officer

Mr. Rajesh Mishra - CEO- Indian Operations

Mr. Sameer Chavan - Company Secretary

Mr. Sanjeev Aga - Independent and Non executive director

Mr. S. Madhavan - Independent and Non executive director

Ms. Lynn de Souza - Independent and Non executive director

Mr. Ameya Hete - Non executive director

Relatives of Key management personnel Mr. Narendra Hete

Enterprises owned or significantly influenced by key management personnel or their relatives

Media Infotek Park Shree Enterprises Valuable Media Limited Valuable Technologies Limited Valuable Edutainment Private Limited Valuable Infotainment Private Limited Qwik Entertainment India Limited Impact Media Exchange Limited Nifty Portfolio Services Private Limited Advent Fiscal Private Limited

S.Madhavan (HUF)

Associate of Subsidiary Scrabble Digital Limited (upto 14 December 2018)

Mukta VN Films Limited

Scrabble Digital DMCC, Dubai

Scrabble Ventures LLC, USA

Scrabble Ventures, S.de R.L. de C.V., Mexico

*Key managerial personnel and relatives of promoters who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognized as per Ind AS -19 Employee Benefits in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above as they are determined on an actuarial basis for the Company as a whole.

Notes:

a) As at 31 March 2018, the Company has provided corporate guarantee to bank for overdraft facility of Rs, 300 lacs taken by Mukta VN Films Limited, associate of subsidiary assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable. The corporate guarantee has been reduced to Rs, 200 lacs as at 31 March 2019.

b) The Company has provided corporate guarantee to bank for term loan and cash credit facility of Rs, 2,384 lacs taken by Valuable Digital Screens Private Limited (subsidiary) assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable. The outstanding term loan of the subsidiary Company as on 31 March 2019 is Rs, 466.72 lacs (31 March 2018 : Rs, 730.13 lacs)

c) The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and ordinary course of business. The assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Outstanding balances at the year-end are unsecured and settlement occurs in cash.

Notes:

a) As at 31 March 2018, the Company has provided bank guarantee of Rs, 100 lacs to Chief Secretary, Revenue Department, Government of Maharashtra on behalf of Impact Exchange Media Private Limited, for declaring it as approved satellite based computer ticketing system provider in Maharashtra in connection with the business of operating satellite based ticketing system managed by the Company.

b) The Company is contesting the demand/matter relating to pending litigations listed above and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

c) i) West Bengal Case : The Company has received an Order dated 4 July 2011 from the Senior Jt. Commissioner, Sales Tax Behala Circle (West Bengal) for the year 2007-2008 demanding sales tax payment of Rs, 41.90 lacs. The Company has filed an appeal on 26 August 2011 at Honorable Appellate Tribunal of Sales tax Kolkata. The Company has received favorable order from Assessing officer in same issues for subsequent years.

ii) Cochin Case : The Company has received an Order dated 30 January 2017 from Asst. Commissioner, Commercial Tax Special Circle Ernakulum for the period 2012 to 2013 demanding tax on the difference in closing stock & difference in material movement value as per VAT return & VAT Audit report. The dispute is that Sales Tax Department has passed an order without considering the fact that Company has already applied for the application for revision of return and it is pending for approval from commercial tax department. The Sales Tax Department has issued the notification allowing the revision of return of earlier period. The Company is in process of revising the VAT Returns. Post revision of return the outstanding liability will be nullified.

Further, CESTAT remanded the matter relating to demand of Rs, 1,526 lacs, excluding interest and penalty on account of service tax on equipment rental income of the Company for the period October 2011 to March 2014 for reconsideration to the adjudicating authority viz, the Commissioner of Service Tax Mumbai. The department has appealed with honorable High Court against the Order on 22 March 2018.

The Company received show cause cum demand notice dated 16 April 2018 for April 2014 to June 2017 in respect of

i. disallowance of cenvat credit claimed on capital goods - Rs, 391.46 lacs

ii. double taxation issue i.e. service tax on rental from leasing of Digital Cinema Equipment - Rs, 3,245.86 lacs

Since the demand is in relation to similar matter as stated above for the period, the same has been set aside by the department and the case will be heard post finalization of earlier matter at High Court.

The Company believes its position will likely to be upheld in the appellate process and liability will not arise to the Company on this matter.

The above does not include all other obligations resulting from customer claims, legal pronouncements having financial impact in respect of which the Company generally performs the assessment based on the external legal opinion and the amount of which cannot be reliably estimated.

3. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED'') which came in to force from 02 October 2006, certain disclosures are required to be made relating to dues to Micro and Small enterprises. On the basis of information and records available with the Management, the following disclosures are made for the amounts due to micro and small enterprises:

4. Business combinations and acquisition of non controlling interest

a) On 1 November 2017, the Board of Directors of the Company had approved the composite scheme of arrangement and amalgamation amongst the Company and Qube Cinema Technologies Private Limited (âQCTPLâ); Qube Digital Cinema Private Limited (âQDCPLâ); Moviebuff Private Limited (âMPLâ) and PJSA Technosoft Private Limited (âPJSAâ) and their respective shareholders and creditors (âthe Qube Schemeâ) under Sections 230 to 232 and other relevant provisions of the Act.

The Company had filed the Qube Scheme with the National Company Law Tribunal (NCLT), Mumbai Bench on 13 March 2018. Further, the shareholders of the Company had approved the Qube Scheme at the NCLT Mumbai convened meeting held on 21 May 2018. NCLT at a hearing held on 21 January 2019, has dismissed the petition filed jointly by the Company and PJSA before the NCLT for the approval of the Qube Scheme. The Company and PJSA have filed an appeal on 25 February 2019 before the National Company Law Appellate Tribunal challenging the aforementioned order of the NCLT

b) During the year ended 31 March 2018, the Company acquired additional 15.82% stake in Scrabble Entertainment Limited (SEL) from the minority shareholders for Rs, 1453.41 lacs. Post this investment, the Company holds 100 % of equity share capital of SEL.

c) During the year ended 31 March 2019, the Company acquired additional 20% stake 2,895 equity shares in Valuable Digital Screens Private Limited (VDSPL) from the minority shareholders for Rs, 60.00 lacs. Post this investment, the Company holds 100 % of equity share capital of VDSPL.

d) Common control transactions

a) On 22 June 2018, the National Company Law Tribunal (NCLT) has approved the Scheme of arrangement for the amalgamation of Company''s wholly owned subsidiaries including its step down subsidiaries namely, V N Films Private Limited (âVNFPLâ), Edridge Limited (âELâ), UFO International Limited (âUILâ) and Southern Digital Screenz India Private Limited (âSDSâ) (together referred to as the âmerging companiesâ) with the Company (âthe Schemeâ)

b) UFO is principally engaged in the delivery of content via satellite directly to theatres. The Company is largest digital cinema distribution network and in-cinema advertising platform. VNFPL, EL, UIL and SDS are in the business of providing digital cinema services.

c) Consequent to fulfillment of all the conditions relating to the Scheme including filing of certified copy of the Order with the Registrar of Companies, the Scheme is effective on 29 June 2018 with effect from the appointed date of 01 April 2016 for the amalgamation of VNFPL, EL and UIL with the Company and the appointed date of 01 July 2016 for SDS.

d) The amalgamation has been accounted using pooling of interest method as prescribed under Indian Accounting Standard (âInd ASâ) 103- âBusiness Combinationâ notified under Section 133 of the Act read with relevant rules issued there under and/ or such other applicable accounting standard prescribed under the Act. The previous year figures have been restated to give the effect of amalgamation in accordance with the scheme.

e) In accordance with the Scheme :

(ii) The difference in books of accounts of the Transferee Company on account of:

(a) Net assets taken over;

(b) Reserves acquired and cancellation of investments in Transferor Companies is recorded in Amalgamation Reserve account of the Transferee Company.

(iii) The debit balance in profit and loss account of Transferor Companies and the Amalgamation Reserve account has been adjusted against Securities Premium of the Transferee Company.

* The Company considers that the carrying amounts of these financial instruments recognized in the financial statements approximates its fair values.

There have been no transfers between Level 1 and Level 2 during the year ended 31 March 2019 and 31 March 2018.

5. Financial risk management / Objectives and policies

The Company''s financial liabilities comprise mainly of borrowings, trade payables, other payables and corporate guarantees. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s Senior Management oversees the management of these risks. The Company''s Senior Management determines the financial risks and the appropriate financial risk governance framework through relevant policies and procedures for the Company. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:

1. Market risk

a) Interest rate risk :

The Company manages its interest rate risk by having a portfolio of fixed and variable rate loans and borrowings wherever feasible.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

b) Currency risk :

The Company regularly evaluates exchange rates exposure arising from foreign currency transactions for taking appropriate actions.

6. Credit Risk :

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limit and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approval for credit. The Company majorly operates locally and hence Company''s exposure on credit risk from receivable''s in different geographies is not significant.

Financial instruments that are subject to concentration of credit risk principally consist of trade receivables, unbilled revenue, investments, derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets .

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum credit risk exposure to credit risk was '' 28,362.82 lacs and '' 26,415.01 lacs as at 31 March 2019 and 31 March 2018 respectively as per the table below.

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks with high credit ratings assigned by international credit rating agencies.

7. Liquidity risk

The Company receives payments from customers based upon contractual billing schedules.

Accounts receivable are recorded when the right to consideration becomes unconditional.

Contract assets includes amounts related to Company''s contractual right to consideration for completed performance objectives not yet invoiced and deferred contract acquisition costs, which are amortized along with the associated revenue.

Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract.

Practical expedients used

In accordance with the practical expedient in Para 63 of Ind AS 115, the Company has not adjusted the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

8. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium, money received against share warrants and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long term debts including current maturities divided by equity attributable to owners of Company.

Free campaigns screened as per the communication received from films division of Ministry of Information and Broadcasting and Information and Public Relation Department, Kerala has been considered as Company''s contribution towards CSR.

9. Details of loans given, investment made and guarantee given covered u/s 186(4) of the Companies Act, 2013.

Investment made are given under the respective head (refer note 4)

Corporate guarantees given by the Company in respect of guarantee (refer note 32)

*The loan given to the above mentioned subsidiaries is repayable on demand for purpose of working capital requirement and capital expenditure for the busi

Mar 31, 2018

1. Employee stock option plans

1. During the year ended 31 March 2018, the Company''s three equity settled ESOP Schemes viz., ESOP Scheme 2006, ESOP Scheme 2010 and ESOP Scheme 2014 were in existence.

(a) Employee Stock Option Scheme 2006 (âESOP Scheme 2006'')

All Options granted under ESOP Scheme 2006 are vested. The Exercise Period of the Options granted under ESOP Scheme 2006 is as follows :

i) For the employees while in employment of the Company : Within one year from the date on which the shares of the Company''s get listed on a recognized stock exchange.

ii) For the retired employees, termination due to permanent disability, death: Within six months from the date of listing of Company''s shares with a recognised stock exchange.

b) Employee Stock Option Scheme 2010 (âESOP Scheme 2010'')

Out of the options granted, in respect of 82,157 options 25% vest equally over a period of 4 years from the date of grant and in respect of 92,000 options entire options vest at the end of one year from the date of grant.

The member at its Extra Ordinary General Meeting held on October 24, 2014 approved the modification in vesting period of 82,157 options from being vested equally over a period of 4 years from the date of grant to one year from the date of grant.

The member at its Extra Ordinary General Meeting held on October 24, 2014 approved the change in exercise period of all vested options under this scheme from two year to one year from the date on which the shares of the Company get listed on a Recognized Stock Exchange in case of the employees in employment of the Company. For the retired employees, termination due to permanent disability, death, all vested options may be exercised within six months from the date of listing of Company''s shares with a recognised stock exchange.

(c) Employee Stock Option Scheme 2014 (ESOP 2014) :

The Compensation Committee recommended the new ESOP Scheme 2014 and the Board approved the new ESOP Scheme2014 at its meeting held on 11 November 2014 and Shareholders approved this ESOP Scheme 2014 at its meeting held on 20 November 2014.

As per the ESOP Scheme 2014, 25% of the options shall vest equally at the end of each year from the date of grant.

The exercise period of these options is as follows :

i) For the employees while in employment of the Company : Within a period of two years from the date of Vesting of the respective Employee Stock Options.

ii) For the retired employees, termination due to permanent disability, death: Within six months from the date of retirement, termination due to physical disability and death respectively.

2. On 3 April 2018, the Board of Directors of the Company and on 15 May 2018 the Shareholders of the Company have approved the amendment in the employee stock option scheme 2014, whereby exercise price of existing granted options (419,002 vested options and 209,501 unvested options) got revised from '' 600/- per option to '' 400/- per option and its exercise period got extended up to 11 December 2020.

3. On April 3, 2018, the Board of Directors approved the grant of 208,578 options under employee stock option scheme 2014 at an exercise price of '' 400/- per option to the employees of the Company and its subsidiaries.

4. Leases

Operating lease : Company as lessee

The Company''s significant leasing arrangements are in respect of operating leases taken for Office Premises, Stores & Digital equipment''s. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the office lease generally is for 11 to 36 months. The initial tenure of the Digital equipments on lease generally is for 36 to 72 months.

Operating lease commitments - Company as lessor

The Company has leased out Digital Cinema Equipment to theaters, franchisees and subsidiary companies on operating lease arrangement. The lease term is generally for 5 to 10 years. The Company as well as the theaters and franchisees have an option of terminating this lease arrangement any time during the tenure of the lease as per the provisions of the lease agreement.

5. Segment reporting

The Company is engaged primarily in the business of Digital Cinema Services and sale of digital cinema ancillary to sale of services. The Company''s performance for operations as defined in IND AS 108 are evaluated as a whole by chief operating decision maker of the Company based on which these are considered as single operating segment. The chief operating decision maker monitors the operating results of the entity''s business for the purpose of making decisions about resource allocations and performance assessment. The Company''s operations are based in same geographical segment, India.

6. Related party disclosures

Names of related parties where control exists irrespective of whether transactions have occurred or not Subsidiaries Edridge Limited, Cyprus (refer note 36 (a))

V N Films Private Limited (refer note 36 (a))

Scrabble Entertainment Limited Valuable Digital Screens Private Limited

Southern Digital Screenz India Private Limited (refer note 36 (a))

United Film Organisers Nepal Private Limited, Nepal PJSA Technosoft Private Limited (w.e.f. November 11, 2017)

Step-down Subsidiaries UFO International Limited, Cyprus (refer note 36 (a))

Scrabble Entertainment DMCC, Dubai UFO Lanka Private Limited, Sri Lanka Scrabble Entertainment (Lebanon) Sarl, Lebanon UFO Software Technologies Private Limited Scrabble Digital Inc.,USA.

Scrabble Entertainment Mauritius Limited, Mauritius Scrabble Entertainment Israel Ltd, Israel*

United Film Organisers(Mauritius) Private Limited, Mauritius

* Under voluntary liquidation Names of other related parties with whom transactions have taken place during the year Key management personnel Mr. Sanjay Gaikwad - Managing Director

Mr. Kapil Agarwal - Joint Managing Director Mr. Ashish Malushte - Chief Financial Officer Mr. Rajesh Mishra - Chief Executive Officer Mr. Sameer Chavan - Company Secretary Mr. Sanjeev Aga - Independent and Non executive director Mr. S. Madhavan - Independent and Non executive director Ms. Lynn de Souza - Independent and Non executive director Mr. Ameya Hete - Non Executive director Relatives of Key management personnel Mr. Narendra Hete

Enterprises owned or significantly influenced by key management personnel or their relatives

S.Madhavan (HUF)

Associate of Subsidiary Scrabble Digital Limited

Mukta VN Films Limited (From April 1, 2016)

Scrabble Digital DMCC, Dubai

Scrabble Ventures LLC

Scrabble Ventures, S.de R.L. de C.V., Mexico

*Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS -19 Employee Benefits in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above.as they are determined on an actuarial basis for the Company as a whole.

Notes:

a) As at 31 March 2018, the Company has provided bank guarantee of Rs, 100 lacs (31 March 2017 : Rs, 100 lacs,1 April 2016 : Rs, 100 lacs) to Chief Secretary, Revenue Department, Government of Maharashtra on behalf of Impact Media Exchange Limited, for declaring it as approved satellite based computer ticketing system provider in Maharashtra in connection with the business of operating satellite based ticketing system managed by the Company.

b) As at 31 March 2018, the Company has provided Corporate guarantee to bank for Overdraft facility of Rs, 300 lacs (31 March 2017 : Rs, 300 lacs,1 April 2016 : Rs, 700 lacs) taken by Mukta VN Films Limited, associate of subsidiary.

c) The Company has provided Corporate guarantee to bank for Term Loan and Cash Credit facility of Rs, 2,384 lacs taken by Valuable Digital Screens Private Limited (subsidiary) assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable. The outstanding term loan of the subsidiary Company as on 31 March 2018 is Rs, 730.13 lacs (31 March 2017 : 1,096.79 lacs, 1 April 2016 : 1,508.22 lacs)

a) As at March 31, 2018, the Company holds 11,580 equity shares representing 80% of equity share capital of Valuable Digital Screens Private Limited (VDSPL) for a consideration of Rs, 440.06 lacs. The Company also incurred Rs, 59.26 lacs towards acquisition cost of this Investment. The Company will acquire the remaining 20% equity of VDSPL from Valuable Technologies Limited in the financial year 2018-19 for a further consideration to be calculated in accordance with the terms of the investment agreement.

Notes:

c) During the year ended 31 March 2017, the Company has received an order from the Commissioner of Service Tax Mumbai (''the Order'') which includes demand for following matters aggregating to Rs, 4,665.43 lacs excluding interest and penalty, which was subject matter of show cause notice from service tax authorities.

On 24 August 2017, the Company received an order from Customs Excise and Service Tax Appellate Tribunal (''CESTAT'') dated 18 August 2017 (''the Order''), where in the demand raised by the Commissioner of Service Tax Mumbai of Rs, 2,201 lacs, excluding interest and penalty on account of disallowance of CENVAT Credit claimed on Capital Goods (Digital Cinema Equipments) by the Company for the period April 2008 to March 2014 and demand of Rs, 937 lacs, excluding interest and penalty on account of service tax on equipment rental income of the Company for the period April 2008 to September 2011 has been dropped. Further, CESTAT remanded the matter relating to demand of Rs,1,526 lacs, excluding interest and penalty on account of service tax on equipment rental income of the Company for the period October 2011 to March 2014 for reconsideration to the Adjudicating authority viz, the Commissioner of Service Tax Mumbai. The department has appealed with honorable High court against the Order on 22 March 2018.

7. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on information available with the management, there is no amount due to micro, small scale and medium enterprises as per the Micro, Small and Medium Enterprises Development Act, 2006.

8. (a) On 26 July 2016, the Board of Directors of the Company approved the Composite Scheme of Arrangement for the

amalgamation of its wholly owned subsidiaries including step down subsidiaries namely Southern Digital Screenz India Private Limited (SDS), V N Films Private Limited (VNFPL), Edridge Limited (EL) and UFO International Limited (UIL) with the Company, subject to all the necessary statutory / regulatory approvals (''the Scheme''). The appointed date for the amalgamation for VNFPL, EL and UIL is 1 April 2016 and for SDS, the appointed date is 1 July 2016. The Company had filed the Scheme with the Bombay High Court on 4 October 2016. Pursuant to notification of section 232 of the Companies Act on 9 December 2016, the Company filed the Scheme with National Company Law Tribunal (NCLT) on 19 January 2017. The shareholders of the Company approved the Scheme at the court convened meeting held on 16 January 2017.

The Scheme is conditional upon and subject to the following:

a. Filing of the certified copy of the order of Bombay High Court (and now NCLT) sanctioning the Scheme with the Registrar of Companies, Maharashtra.

b. Compliance by EL and UIL, the Cypriot transferor companies of all necessary and applicable provisions of the laws of Cyprus.

The Company has, till date, received the approval from Cyprus Court for the merger of the Cypriot transferor companies. The Company had final hearing with NCLT Mumbai on 17 May 2018 where the Scheme was approved. However final order from the NCLT is still awaited hence effect of the Scheme is not given in these financial results.

9. (b) On 1 November 2017, the Board of Directors of the Company approved the composite scheme of arrangement and amalgamation âthe Qube Schemeâ between UFO and Qube Cinema Technologies Private Limited (âQCTPLâ); Qube Digital Cinema Private Limited (âQDCPLâ); Moviebuff Private Limited (âMPLâ) and PJSA and their respective shareholders and creditors under sections 230 to 232 and other relevant provisions of the Companies Act, 2013 (the âActâ) (collectively the Qube Scheme) which inter alia provides for:

(i) Demerger of the entire business of the QCTPL except businesses that are not synergic or have limited growth potential

(âDemerged Businessâ) into QDCPL on a going concern basis and the issuance of equity shares by QDCPL to the shareholders of QCTPL (âDemergerâ);

(ii) Amalgamation of MPL into QDCPL and the issuance of equity shares by QDCPL to the shareholders of MPL and consequent dissolution of MPL without winding up (âMPL Mergerâ);

(iii) Upon giving effect to Demerger and MPL Merger and upon issuance of shares of QDCPL to shareholders of QCTPL and MPL, the Company and India Advantage Fund S4 I, a fund managed by ICICI Venture Funds Management Company Limited (âInvestorâ) to purchase an aggregate of 53.20% of the share capital of QDCPL from certain non-promoter shareholders of QCTPL, who no longer wish to participate in the Demerged Business of QCTPL (âSellersâ) in the following proportion, at a price of Rs, 302.647 per share (âTransfer of Sale sharesâ):

(a) The Company proposes to purchase 38,75,531 equity shares in QCTPL from the Sellers for an aggregate consideration of Rs, 117.29 Crores and

(b) The Investor proposed to purchase 71,03,984 equity shares in QCTPL from the Sellers for an aggregate consideration of Rs, 214.99 Crores.

(iv) Post completion of Transfer of Sale Shares, amalgamation of QDCPL into the Company and the issuance of equity shares by the Company to the shareholders of QDCPL in the ratio of 13 shares of UFO for every 17 shares held in QDCPL and consequent dissolution of QDCPL without winding up (âQDCPL Mergerâ); and

(v) Slump Sale of the business relating to certain new software, technologies and processes of QCTPL which are currently in the process of commercialization from the Company (post transfer to the Company pursuant to the QDCPL Merger) (âTransferred Undertakingâ) into PJSA Technosoft Pvt. Limited (âPJSAâ), a wholly owned subsidiary of the Company. The Company had filed the Qube Scheme with the NCLT, Mumbai Bench on March 13, 2018. Further, the shareholders of the Company have approved the Qube Scheme at the NCLT Mumbai convened meeting held on 21 May 2018. The above Scheme is subject to approval from the shareholders of the Transferor Companies and other applicable regulatory authorities.â

10. Investment during the year

During the year ended 31 March 2018, the Company acquired additional 15.82% stake 66,609 equity shares in Scrabble Entertainment Limited (SEL) from the minority shareholders for Rs,1,453.41 lacs. Post this investment, the Company holds 100% of equity share capital of SEL.

11. Financial Instruments -Accounting Classifications and Fair Value Measurement

The fair value of the Financial Assets and liabilities are included at the amount, at which the instrument could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale.

The following table provides the fair value management hierarchy of the Company''s Financial assets and liabilities.

*Preference share investments in subsidiaries are convertible into equity shares at fair value on date of conversion, accordingly, fair value is same as cost.

The management assessed that cash and bank balances, trade receivables, loans (current and non-current) trade payables, borrowings (cash credits, term loans and working capital loans) and other financial assets and liabilities (current and non current) approximate their carrying amounts largely due to the short term maturities of these financial instruments.

There have been no transfers between Level 1 and Level 2 during the year ended 31 March 2018 and 31 March 2017.

12. Financial Risk Management - Objectives and policies

The Company''s financial liabilities comprise mainly of borrowings, trade payables, other payables and Corporate guarantees contract as well. The Company''s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s Senior Management oversees the management of these risks. The Company''s senior management determines the financial risks and the appropriate financial risk governance framework through relevant policies and procedures for the Company. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

13. 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 two types of risks: interest rate risk and currency risk Financial instruments affected by market risk include loans and borrowings, investments and deposits.

b) Currency Risk:

Currency risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates. The Majority of the Company''s revenue and expense are in Indian Rupees, with the remainder denominated in US Dollars. Management Considers currency risk to be low and does not hedge its own currency risks.

The Company regularly evaluates exchange rates exposure arising from foreign currency transactions. The Company follows the established risk management policies and Standard operating procedures.

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities:

14. Credit Risk:

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Credit Risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. Management believes the credit risk on cash and cash equivalents is low because the Counterparties are bank with high credit ratings. Trade receivables are amount billed to customers for the sale of goods and services, and represent the maximum exposure to credit risk of those financial assets , exclusive of the allowance for doubtful debts. Normal credit terms are in line with Industry practice.

The Company does not require collateral or other security from customers; however credit evaluations are performed prior to the initial granting of credit when warranted and periodically thereafter. Based on policy, the Company records a reserve for estimated uncollectible amounts, which management believes reduce credit risk. Management assesses the adequacy of reserve quarterly, taking into account historical experience, current collection trend, the age of the receivables and, when warranted and available, the financial condition of specific counterparties.

The Company uses the expected credit loss model as per Ind AS 109 - Financial Instruments to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix considers available external and internal credit risk factors and the Company''s historical experience in respect of customers.

15. Liquidity risk:

16. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium money received against warrants and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long term debts including current maturities divided by total equity.

41. First Time Adoption of Ind AS

These financial statements are the Company''s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note (2.1) have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (transition date). In preparing its opening Ind AS balance sheet, the Company has adjusted the amount reported previously in financial statements prepared in accordance with IGAAP.

Exemptions availed

Ind AS 101, First-time adoption of Indian Accounting Standards, allows first-time adopters, exemptions from the retrospective application of certain requirements Under Ind AS. The Company has availed the following exemptions as per Ind AS 101:

1. The Company has elected to continue the carrying value of all its items of property, plant and equipment and intangible assets recognised in the financial statements prepared under Previous GAAP and use the same as deemed cost in the opening Ind AS Balance Sheet.

2. The Company has not applied to IND AS 102 to equity instruments in share based payment transactions, that vested before the date of transition to Ind AS, i.e. 1 April 2016.

Exceptions Applied

Ind AS 101 specifies mandatory exceptions from retrospective application of certain requirements under Ind AS for the first time adopters. Following exceptions are applicable to the Group.

1. Use of estimates : The estimates at 1 April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences, if any accounting policies) apart from the following items where application of Indian GAAP did not require estimation. a) Impairment of financial assets based on expected credit loss model.

The estimates used by the Company to present these amount in accordance with Ind AS reflect conditions at the transition date and as of 31 March 2017.

Note to the Reconciliation of Equity as at 31 March 2017 and 1 April 2016 and Total Comprehensive Income for the year ended 31 March 2017.

1. Dividend (including dividend distribution tax):

Under the previous GAAP till year ended March 31,2016, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting.

2. Revenue and related costs :

Virtual Print fees: Under the previous GAAP Fixed one time virtual print fees received from distributors of the films is recognised immediately on delivery of content. Under Ind AS, Fixed one time VPF from distributors such revenue and related cost is are recognised over estimated useful life of movie (2 weeks ) in the ratio of expected playout of content (70:30).

3. Financial instruments:

(a) Security Deposits:

Under the previous GAAP, interest free lease security deposits given and taken are recorded at their transaction value. Under Ind AS, the Group has fair valued all financial assets and financial liabilities are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS 109 using effective interest rate method and accordingly, adjustments mainly consists of amortisation of deferred lease income / expense on security deposits given and accepted.

(b) Investment in Mutual fund:

Under the Previous GAAP, investment in mutual funds were classified as current investments and were carried at lower of cost and fair value. Under Ind AS, Under Ind-AS, financial assets and financial liabilities designated at fair value through profit and loss (FVTPL) are fair valued at each reporting date with changes in fair value recognized in the statement of profit and loss.

(c) Financial guarantee:

Under previous GAAP, financial guarantees given/taken are disclosed as contingent liability in the notes to financial statements. Under Ind AS, the same are recognised at fair value.

4. Re-measurement of Employee Benefits:

Under Ind AS, the actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, such remeasurements were forming part of the consolidated statement of profit or loss for the year.

5. Cash Flow Statement:

The Transition from Indian GAAP to Ind As has not had a material impact on the Statement of Cash flows.

6. Deferred tax

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses to be recognised on timing differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. Further, the Company has also considered deferred tax impact on account of differences between Ind-AS and Previous GAAP.

7. Reclassification

Pursuant to the disclosure requirements as per Ind-AS, the Group has re-classified certain assets and liabilities as at March 31, 2017 and April 1, 2016. Significant reclassifications includes, reclassification between Deferred tax assets and Income tax assets, Non-current investment and, Security deposits and prepayments, other current liabilities and financial liabilities.

16. Loans and advances in the nature of loans given to subsidiaries in which directors are interested

Included in loans and advance are certain intercorporate deposits the particulars of which are disclosed below as required by Sec 186(4) of Companies Act 2013.

17. Recent Accounting pronouncements

Standards issued but not yet effective

Ind AS 115 was issued on 28 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018. The amendment is applicable to the Company from 1 April, 2018. The Company is evaluating the requirements of this standard and the effect on the financial statement is being evaluated.

Proposed dividend :

Proposed dividends on equity shares, which are subject to approval at the annual general meeting are not recognised as a liability (including Dividend Distribution Tax thereon) in the year in which it is proposed.

Mar 31, 2017

1. Gratuity and other post-employment benefit plans

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.

2. Employee stock option plans

During the year ended March 31, 2017, the Companyâs three equity settled ESOP Schemes viz., ESOP Scheme 2006, ESOP Scheme 2010 and ESOP Scheme 2014 were in existence.

Employee Stock Option Scheme 2006 (âESOP Scheme 2006â)

All Options granted under ESOP Scheme 2006 are vested. The Exercise Period of the Options granted under ESOP Scheme 2006 are for the employees while in employment of the Company is within one year from the date on which the shares of the Company get listed on a recognized stock exchange and for the retired employees, termination due to permanent disability, death is within six months from the date of listing of Companyâs shares with a recognized stock exchange.

Employee Stock Option Scheme 2010 (âESOP Scheme 2010â)

The Board at its Extra Ordinary General Meeting held on October 24, 2014 approved the modification in vesting period of 82,157 options from being vested equally over a period of 4 years from the date of grant to one year from the date of grant.

The Board at its Extra Ordinary General Meeting held on October 24, 2014 approved the change in exercise period of all vested options under this scheme from two year to one year from the date on which the shares of the Company get listed on a Recognized Stock Exchange in case of the employees in employment of the Company. For the retired employees, termination due to permanent disability, death, all vested options may be exercised within six months from the date of listing of Companyâs shares with a recognized stock exchange.

Employee Stock Option Scheme 2014 (âESOP Scheme 2014â):

The Compensation Committee recommended the new ESOP Scheme 2014 and the Board approved the new ESOP Scheme 2014 at its meeting held on November 11, 2014 and Shareholders approved this ESOP Scheme 2014 at its meeting held on November 20, 2014.

As per the ESOP Scheme 2014, 25% of the options shall vest equally at the end of each year from the date of grant.

The exercise period of these options is as follows:

i) For the employees while in employment of the Company: Within a period of two years from the date of Vesting of the respective Employee Stock Options.

ii) For the retired employees, termination due to permanent disability, death: Within six months from the date of retirement, termination due to physical disability and death respectively.

There is no effect of the employee share-based payment plans on the statement of profit and loss and on its financial position.

3. Investments during the previous year

(a) Southern Digital Screenz India Private Limited (SDS)

During the year ended March 31, 2017, the Company acquired additional 15.82% stake 680,117 equity shares in Southern Digital Screenz India Private Limited (SDS) from the minority shareholders for '' 140,000,000/-. Post this investment, the Company holds 100% of equity share capital of SDS.

4. Leases

Operating lease: Company as lessee

The Companyâs significant leasing arrangements are in respect of operating leases taken for Office Premises, Stores & Digital equipmentâs. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the office lease generally is for 11 to 36 months. The initial tenure of the Digital equipments on lease generally is for 36 to 72 months.

5. Segment reporting

The Company is engaged in the business of Digital Cinema Services and sale of digital cinema equipments ancillary to sale of services, which are subject to same risk and rewards and the financial statements reflect the result of this business segment, which is the primary segment in accordance with the requirement of Accounting Standard 17 on Segment Reporting. The Companyâs operations are based in same geographical segment, India.

6. Related party disclosure

Names of related parties where control exists irrespective of whether transactions have occurred or not Subsidiaries Edridge Limited, Cyprus (refer note 42)

V N Films Private Limited (refer note 42)

Scrabble Entertainment Limited

Valuable Digital Screens Private Limited

Southern Digital Screenz India Private Limited (refer note 42)

United Film Organisers Nepal Private Limited, Nepal

Step-down Subsidiaries UFO International Limited, Cyprus (refer note 42)

Scrabble Entertainment DMCC, UAE UFO Lanka Private Limited, Sri Lanka Scrabble Entertainment (Lebanon) Sarl, Lebanon UFO Software Technologies Private Limited Scrabble Digital Inc.,USA

Scrabble Entertainment Mauritius Limited, Mauritius Scrabble Entertainment Israel Limited, Israel*

United Film Organisers (UFO) (Mauritius) Private Limited, Mauritius

*Under voluntary liquidation

Names of other related parties with whom transactions have taken place during the year

Key management personnel Mr. Sanjay Gaikwad - Managing Director

Mr. Kapil Agarwal - Joint Managing Director Mr. Ashish Malushte - Chief Financial Officer Mr. Rajesh Mishra - Chief Executive Officer Mr. Sameer Chavan - Company Secretary

Relatives of Key management personnel Ms. Apeksha Agarwal

Enterprises owned or significantly influenced by key management personnel or their relatives

Associate of Subsidiary Scrabble Digital Limited

Mukta VN Films Limited (from April 1, 2016)

Joint venture of Subsidiary Mukta VN Films Limited (till March 31, 2016)

Notes:

a) As at March 31, 2017 the Company has provided Corporate guarantee to bank for Overdraft facility of Rs, 70,000,000/taken by Mukta VN Films Limited, associate of subsidiary (March 31, 2016: Mukta VN Films Limited, Joint venture). Subsequently to the year ended March 31, 2017 the corporate guarantee has been reduced to Rs, 30,000,000/-. The outstanding balance of this facility is Rs,61,454,301/- at March 31, 2017 (March 31, 2016: 70,000,000/-) assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable.

b) As at March 31, 2017 the Company has provided bank guarantee of Rs, 10,000,000/- to Chief Secretary, Revenue Department, Government of Maharashtra on behalf of Impact Exchange Media Private Limited, for declaring it as approved satellite based computer ticketing system provider in Maharashtra in connection with the business of operating satellite based ticketing system managed by the Company.

c) The Company has provided Corporate guarantee to bank for Term Loan and Cash Credit facility of Rs, 238,400,000/taken by subsidiary assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable. The outstanding term loan of the subsidiary Company as on March 31, 2017 is Rs, 109,678,911/-(March 31, 2016: 165,677,182/-)

d) The Company has issued a letter of comfort to a bank for term loan of Rs, 300,000,000/- (March 31, 2016: 300,000,000/-) and cash credit facility of Rs, 30,000,000/- (March 31, 2016: 30,000,000/-) taken by subsidiary company, assuring that it will take all necessary steps so that the repayment of the loan by the subsidiary is honored as and when due and payable. The outstanding term loan of subsidiary company as on March 31, 2017 is Rs, 29,499,961/-(March 31, 2016: 135,499,860/-)

e) During the year ended March 31, 2016, the Company has received an order from the Commissioner of Service Tax Mumbai (âthe Orderâ) which includes demand for following matters aggregating to Rs,466,543,240/-, excluding interest and penalty, which was subject matter of show cause notice from service tax authorities in the year ended March 31, 2016.

i) Rs, 246,432,207/-, excluding interest and penalty, for service tax on rentals from leasing of Digital Cinema Equipments for the period April 2008 to March 2014. Based on legal opinion obtained, the Company believes that the lease rental revenues are subject to state-wise Value Added Tax which the Company is paying since the beginning of operations. Accordingly, the Company believes that its position will likely be upheld in the appellate process and that it is unlikely that the liability will arise to the Company out of this matter.

ii) Rs, 220,111,033/-, excluding interest and penalty, on account of disallowance of CENVAT Credit on Capital Goods (Digital Cinema Equipments) claimed by the Company for the period April 2008 to March 2014 as the possession of the equipments is not with the Company. Based on legal opinion obtained, the Company is of the view that these equipments are used for providing taxable output services and hence should be entitled to avail CENVAT credit and is therefore contesting this demand. The Company believes that its position is likely to be upheld in the appellate process and accordingly no provision has been considered necessary in these financial Statements.

7. In June 2016, the Company had filed applications with the Central Government for the waiver of excess managerial remuneration of '' 1,583 lakhs determined to be in excess of the limits specified under section 197 read with schedule V of the Companies Act, 2013 for the year ended March 31, 2016, resulting due to the inclusion of perquisite value of employees stock options (ESOPs) as determined as per Income Tax Act, 1961 (difference between the exercise price of the employee stock options and the market price of the shares on the date of exercise of the options) in managerial remuneration. These ESOPs were exercised by the managing and joint managing director during the year ended March 31, 2016.

Based on legal opinion obtained by the management in May 2017, the Company believes that granting of ESOPs (and exercise thereof) did not involve a cash payment by the Company to the managing directors and no expense was required to be provided in the Companyâs profit and loss account in any financial year relating to the period of vesting. Since, IT value of perquisites is not paid or payable by the Company, it cannot be considered as managerial remuneration as per the provisions of section 197 read with schedule V of the Companies Act, 2013. Accordingly, the Company is in compliance with section 197 of the Companies Act, 2013 for the year ended March 31, 2016. Subsequent to year end, the Company withdrew the application filed with the Central Government. Accordingly, no adjustments have been made to the financial statements for the year ended March 31, 2017

8. On July 26, 2016, the Board of Directors of the Company approved the Composite Scheme of Arrangement for the amalgamation of its wholly owned subsidiaries including step down subsidiaries namely Southern Digital Screenz India Private Limited (SDS), V N Films Private Limited (VNFPL), Edridge Limited (EL) and UFO International Limited (UIL) with the Company, subject to all the necessary statutory / regulatory approvals (âthe Schemeâ). The appointed date for the amalgamation for VNFPL, EL and UIL is April 01, 2016 and for SDS, the appointed date is July 01, 2016. The Company had filed the Scheme with the Bombay High Court on October 4, 2016. Pursuant to notification of section 232 of the Companies Act on December 9, 2016, the Company filed the Scheme with National Company Law Tribunal (NCLT) on January 19, 2017 The shareholders of the Company approved the Scheme at the court convened meeting held on January 16, 2017

The Scheme is conditional upon and subject to the following:

a) Filing of the certified copy of the order of Bombay High Court (and now NCLT) sanctioning the Scheme with the Registrar of Companies, Maharashtra.

b) Compliance by EL and UIL, the Cypriot transferor companies of all necessary and applicable provisions of the laws of Cyprus.

The Company has, till date, received the approval from Cyprus Court for the merger of the Cypriot transferor companies. Pursuant to notification of section 234 of the Companies Act, 2013 on April 13, 2017 the NCLT has given direction to the Company to secure approval from Reserve Bank of India (RBI) for the merger of the Cypriot subsidiary and step-down subsidiary with itself. The Company is in the process of obtaining approval from RBI. The approvals from RBI and NCLT are pending as at date and hence, the Scheme is not effective as at March 31, 2017 and as at date. Pending final approval of NCLT on the Scheme of Amalgamation, no effect of the Scheme has been given in these financial results.

9. Loans and advances in the nature of loans given to subsidiaries in which directors are interested

Included in loans and advance are certain interoperate deposits the particulars of which are disclosed below as required by Sec 186(4) of Companies Act 2013

(b) On May 17 2017, the Board of Directors have approved the acquisition of 66,609 equity shares of Scrabble Entertainment Limited (SEL), a subsidiary of the Company, from the other equity shareholders of SEL for a total consideration of Rs,145,340,838/-. This acquisition is likely to be completed in the quarter ended June 30, 2017, consequent to which SEL will become a wholly owned subsidiary.

10. Previous year figures have been regrouped / reclassified, where necessary, to conform to current year classification.

Mar 31, 2016

1. Terms/rights attached to equity shares Voting rights:

Each holder of equity shares having a par value of Rs. 10 per equity share is entitled to one vote per equity share.

2.Rights to Dividend:

The equity shareholders have right to receive dividend when declared by the Board of Directors subject to approval in the ensuing Annual General Meeting. The Company declares and pays dividend in Indian Rupees.

During the year ended March 31, 2016, the amount of per share dividend recognized as distributions to equity shareholders is Rs. 8 (March 31, 2015: Nil) per share.

3.Rights pertaining to repayment of capital

4.Other Rights and restriction

The other rights and restriction applicable to certain shareholders specified below as at March 31, 2015, have been terminated on the commencement of trading of the Equity Shares of the Company on any recognized stock exchange pursuant to the IPO i.e. on May 14,25015.

5. Pre-emption rights:

In the event the Company proposes to issue any securities to any person, then P5 Asia Holding Investments (Mauritius) Ltd. (P5) and 3i Research (Mauritius) Limited (3i) (collectively called Investor Group and individually Investor) had a right to subscribe to the issue on a pro-rata basis, in proportion to their respective shareholding in the Company on the same terms, as the issue is proposed, such that their respective shareholding is maintained at least at the level prior to such issuance.

6. Right of First Offer, Right of Sale and tag along rights:

In the event Apollo Group (comprising of Apollo International Limited and an individual shareholder) and VTL Group (comprising of Valuable Technologies Limited, Valuable Media Limited and two individual shareholders) (collectively called Group A Shareholders) propose to transfer all or part of their securities to any person, shall first offer to the Investor Group, a pro rata right to purchase all their Shares. Investors Group had the right to exercise certain specified tag along rights in case the Group A shareholders proposes to transfer any securities to any person in certain cases as defined in Articles of Association (AOA).

In the event either of 3i or P5 propose to sell any or all of their securities held by them in the Company, it shall first offer the other Investor and the Group A Shareholders a right to purchase all their shares.

7. Exit rights and drag along rights:

The Investor Group had the right to sell their entire shareholding in the Company at any time after expiry of certain specified period subject to certain specified conditions as defined in the AOA of the Company. Such shareholders also had the right to exercise drag along rights as stipulated in the AOA of the Company.

8. Rights pertaining to repayment of capital:

In the event of certain specified liquidation events as defined in the AOA, the proceeds of such events will be distributed between shareholders in the manner specified in the AOA of the Company.

9. Other rights:

P5, 3i, Apollo Group and VTL Group have right to had their representatives on the Board of Directors of the Company.

Certain specified reserved matters such as change in the share capital of the Company, material related party transactions, raising of debt, declaration of dividends, change in senior management including key business matters requires the consent of the Investor Group Shareholders.

10. Restrictions:

The Securities held by Group A Shareholders are locked-in and they cannot transfer any securities held by them without Investorsâ consent, until the shareholding of each of the Investors in the Company falls below the Minimum Requisite Shareholding as defined in the AOA.

The Investor Group cannot transfer shares held by them in favour of any competitor as defined in the AOA of the Company or enter into an agreement for the transfer of shares to any competitor, subject to certain specified conditions.

As per records of the Company, including its register of shareholders/members, the above shareholding represents both legal and beneficial ownership of shares.

11. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

The Company has issued total 1,601,707 shares (31 March 2015: Nil) during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan (ESOP) wherein part consideration was received in form of employee services.

12. Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the company, please refer note 28.

13. Gratuity and other post-employment benefit plans

14. Employee stock option plans

During the year ended March 31, 2016, the Companyâs three ESOP Schemes viz., ESOP Scheme 2006, ESOP Scheme 2010 and ESOP Scheme 2014 were in existence.

Employee Stock Option Scheme 2006 (âESOP Scheme 2006â)

All Options granted under ESOP Scheme 2006 are vested. The Shareholders of the Company in their Annual General Meeting held on August 17, 2011 had revised the terms and conditions of the Exercise Period of the Options granted under ESOP Scheme 2006 to make it in consonance with ESOP Scheme 2010 as follows:

15. For the employees while in employment of the Company: Within one year from the date on which the shares of the Company get listed on a recognized stock exchange.

16. For the retired employees, termination due to permanent disability, death: Within six months from the date of listing of Companyâs shares with a recognized stock exchange.

Employee Stock Option Scheme 2010 (âESOP Scheme 2010â)

Based on the recommendations of the Compensation Committee the ESOP Scheme 2010 was approved by the Board at its meeting held on October 15, 2010 and was subsequently approved by the shareholders at the annual general meeting held on November 22, 2010.

Under ESOP Scheme 2010 a total number of 1,413,497 options were granted in the year ended March 31, 2011 at an exercise price of Rs. 161.87 per share. As per the ESOP Scheme 2010, 25% of the options shall vest at the end of each year from the date of grant.

During the year 2013-14, the Company granted a total number of 174,157 options at an exercise price of Rs. 178.18 per share to certain employees, directors and key managerial personnel of the Company and certain employees of subsidiaries. Out of the options granted, in respect of 82,157 options 25% vest equally over a period of 4 years from the date of grant and in respect of 92,000 options entire options vest at the end of one year from the date of grant.

Employee Stock Option Scheme 2014 (âESOP Scheme 2014â):

Under ESOP Scheme 2014, the aggregate number of options to be granted is 1,150,000 equity shares. During the year ended March 31, 2015, 932,500 options were granted at an exercise price of Rs. 600 per share. As per the ESOP Scheme 2014, 25% of the options shall vest equally at the end of each year from the date of grant.

The exercise period of these options is as follows :

17. For the employees while in employment of the Company: Within a period of two years from the date of Vesting of the respective Employee Stock Options.

18. For the retired employees, termination due to permanent disability, death: Within six months from the date of retirement, termination due to physical disability and death respectively.

19. Investments during the previous year Investments by the Company

20. Scrabble Entertainment Limited (SEL)

During the year ended March 31, 2015, the Company acquired additional 14.91% stake (114,568 equity shares) in Scrabble Entertainment Limited from the minority shareholders for Rs. 249,987,376. Out of the above the Company has paid Rs. 175,000,000 and balance of Rs. 74,987,376 is payable in four six monthly equal installment ending on December 31, 2016. Post this investment, the Company holds 91.33% of equity share capital of SEL.

21. Southern Digital Screenz India Private Limited (SDS)

During the year ended March 31, 2015, the Company acquired additional 9% stake 386,895 equity shares in Southern Digital Screenz India Private Limited (SDS) from the minority shareholders for Rs. 109,998,117. Post this investment, the Company holds 84.18% of equity share capital of SDS.

22. Valuable Digital Screens Private Limited (VDSPL)

During the year ended March 31, 2015, the Company acquired 7,105 equity shares representing 71.05% of equity share capital of VDSPL from Valuable Technologies Limited for a consideration of Rs. 27,000,421. The Company also incurred Rs. 5,926,990 towards acquisition cost of this Investment. Further the Company invested Rs. 17005,895 in 4475 equity shares (fresh issue) of VDSPL. Post this investment, the Company holds 80% equity share capital of VDSPL.

The Company will acquire the remaining 20% equity of VDSPL from VTL in the financial year 2017-18 for a further consideration to be calculated in accordance with the terms of the investment agreement.

23. Leases

Operating lease : Company as lessee

24.. Segment reporting

25. During the year ended March 31, 2015, the Company has provided Corporate guarantee to bank for Overdraft facility of Rs. 70,000,000 taken by joint venture of subsidiary assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable.

26. During the year ended March 31, 2015, the Company has provided bank guarantee of Rs. 10,000,000 to Chief Secretary, Revenue Department, Government of Maharashtra on behalf of Impact Exchange Media Private Limited, for declaring it as approved satellite based computer ticketing system provider in Maharashtra in connection with the business of operating satellite based ticketing system managed by the Company.

27. The Company has provided Corporate guarantee to bank for Term Loan and Cash Credit facility of Rs. 238,400,000 taken by subsidiary assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable.

28. The Company has issued a letter of comfort to a bank for term loan of Rs. 300,000,000 (March 31, 2015 : 300,000,000) and cash credit facility of Rs. 30,000,000 (March 31, 2015 : 30,000,000) taken by subsidiary company, assuring that it will take all necessary steps so that the repayment of the loan by the subsidiary is honored as and when due and payable. The outstanding term loan of subsidiary company as on March 31, 2016 is Rs. 135,499,860 (March 31, 2015 : 241,499,759).

29. During the year ended March 31 2016, the Company has received an order from the Commissioner of Service Tax Mumbai (âthe Orderâ) which includes demand for following matters aggregating to Rs. 4,665 lakhs, excluding interest and penalty, which was subject matter of show cause notice from service tax authorities in the year ended 31 March 2015.

30. Rs. 246,432,207 excluding interest and penalty, for service tax on rentals from leasing of Digital Cinema Equipments for the period April 2008 to March 2014. Based on legal opinion obtained, the Company believes that the lease rental revenues are subject to state-wise Value Added Tax which the Company is paying since the beginning of operations. Accordingly, the Company believes that its position will likely be upheld in the appellate process and that it is unlikely that the liability will arise to the Company out of this matter.

31. Rs. 220,111,033, excluding interest and penalty, on account of disallowance of CENVAT Credit on Capital Goods (Digital Cinema Equipments) claimed by the Company for the period April 2008 to March 2014 as the possession of the equipments is not with the Company. Based on legal opinion obtained, the Company is of the view that these equipments are used for providing taxable output services and hence should be entitled to avail CENVAT credit and is therefore contesting this demand. The Company believes that its position is likely to be upheld in the appellate process and accordingly no provision has been considered necessary in these financial Statements.

32. The Company is contesting the demand/matter relating to pending litigations listed above and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the companyâs financial position and results of operations.

33. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on information available with the management, there is no amount due to micro, small scale and medium enterprises as per the Micro, Small and Medium Enterprises Development Act, 2006.

34. The total managerial remuneration for the year in respect of managing director and joint managing director, (after including perquisite value of employees stock options of the Company exercised by them during the year as determined as per Income Tax Act, 1961) is in excess of the limits specified under Section 197 read with schedule V of the Act by Rs. 158,271,959.

The definition of managerial remuneration as per the provisions of erstwhile Companies Act,1956 which was prevailing during the time when the managing director and joint managing director were appointed or during the time when employee stock options were granted to them did not include the employee stock option perquisite value as part of managerial remuneration. Also the employees stock options were granted to these directors at the then fair market value and as such the Company was not required to account any expense during the period of the vesting on account of grant of these employee stock options.

However as per the provisions of Companies Act, 2013 which has been made effective from April 01, 2014 the definition of managerial remuneration is amended to include value of perquisites as per Income Tax Act, 1961 and as a result the perquisite value of employee stock options which is the difference between the exercise price of the employee stock options and the market price of the shares on the date of exercise of the options, though notional in nature is required to be considered in the definition of managerial remuneration.

Given that this amount has not been paid or incurred by the Company during the year or previous years and accordingly, it is not a perquisite paid in cash. Hence, subsequent to the year end, the Company is in the process of filing application to the Central Government for the waiver of this excess remuneration. Pending the approval from the Central Government no adjustments have been made to the financial statements.

35. Corporate social responsibility

36. Previous year figures have been regrouped / reclassified, where necessary, to conform to current year classification.

Mar 31, 2015

1. Corporate information

UFO Moviez India Limited (the Company) is a public company domiciled in India and incorporated on June 14, 2004 under the provisions of the Companies Act, 1956. The Company is into the business of providing digital cinema services.

On May 14, 2015, the Company completed the IPO through offer for sale of 9,600,000 equity shares of Rs. 10 each at a price of Rs. 625 per equity share of Qualified Institutional Bidders, Non Institutional Bidders and Retail Individual Bidders aggregating upto Rs. 6,000,000,000 and the equity shares of the Company were listed on the National Stock Exchange of India Limited and The BSE Limited.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Terms/rights attached to equity shares

Voting rights:

Each holder of equity shares having a par value of Rs. 10 per equity share is entitled to one vote per equity share.

Rights to Dividend:

The equity shareholders have right to receive dividend when declared by the Board of Directors, subject to approval in the General Meeting.

Subsequent to the year end, the following rights and restrictions as at March 31,2015 were automatically terminated on the commencement of trading of the Equity Shares of the Company on any recoginsed stock exchange pursuant to the IPO i.e. on May 14, 2015.

Pre-emption rights:

In the event the Company proposes to issue any securities to any person, then P5 Asia Holding Investments (Mauritius) Ltd. (P5) and 3i Research (Mauritius) Limited (3i) (collectively called Investor Group and individually Investor) have a right to subscribe to the issue on a pro-rata basis, in proportion to their respective shareholding in the Company on the same terms, as the issue is proposed, such that their respective shareholding is maintained at least at the level prior to such issuance.

Right of First Offer, Right of Sale and tag along rights:

In the event Apollo Group (comprising of Apollo International Limited and an individual shareholder) and VTL Group (comprising of Valuable Technologies Limited, Valuable Media Limited and two individual shareholders) (collectively called Group A Shareholders) propose to transfer all or part of their securities to any person, shall first offer to the Investor Group, a pro rata right to purchase all their Shares. Investors Group shall have the right to exercise certain specified tag along rights in case the Group A shareholders proposes to transfer any securities to any person in certain cases as defined in Articles of Association (AOA).

In the event either of 3i or P5 propose to sell any or all of their securities held by them in the Company, it shall first offer the other Investor and the Group A Shareholders a right to purchase all their shares.

The Investor Group has the right to sell their entire shareholding in the Company at any time after expiry of certain specified period subject to certain specified conditions as defined in the AOA of the Company. Such shareholders also have the right to exercise drag along rights as stipulated in the AOA of the Company.

Rights pertaining to repayment of capital:

In the event of certain specified liquidation events as defined in the AOA, the proceeds of such events will be distributed between shareholders in the manner specified in the AOA of the Company.

Other rights:

P5, 3i, Apollo Group and VTL Group have right to have their representatives on the Board of Directors of the Company.

Certain specified reserved matters such as change in the share capital of the Company, material related party transactions, raising of debt, declaration of dividends, change in senior management including key business matters requires the consent of the Investor Group Shareholders.

Restrictions:

The Securities held by Group A Shareholders are locked-in and they cannot transfer any securities held by them without Investors' consent, until the shareholding of each of the Investors in the Company falls below the Minimum Requisite Shareholding as defined in the AOA.

The Investor Group cannot transfer shares held by them in favour of any competitor as defined in the AOA of the Company or enter into an agreement for the transfer of shares to any competitor, subject to certain specified conditions.

4. Gratuity and other post-employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

5. Employee stock option plans

The Company has three ESOP Schemes viz.,ESOP Scheme 2006,ESOP Scheme 2010 and ESOP Scheme 2014.

Employee Stock Option Scheme 2006 ('ESOP Scheme 2006')

All Options granted under ESOP Scheme 2006 are vested. The Shareholders of the Company in their Annual General Meeting held on August 17, 2011 had revised the terms and conditions of the Exercise Period of the Options granted under ESOP Scheme 2006 to make it in consonance with ESOP Scheme 2010. The salient features with respect to the revised terms and conditions of the Exercise Period for ESOP Scheme 2006 are as follows:

i) For the employees while in employment of the Company : All options vested can be exercised within a period of one year from the date on which the shares of the Company get listed on a recognized stock exchange.

ii) For the retired employees, termination due to permanent disability, death: All vested options may be exercised immediately after but in no event later than six months from the date of listing with a recognised stock exchange.

6. Employee Stock Option Scheme 2010 (ÂESOP Scheme 2010Â)

Based on the recommendations of the Compensation Committee the ESOP Scheme 2010 was approved by the Board at its meeting held on October 15, 2010 and was subsequently approved by the shareholders at the annual general meeting held on November 22, 2010.

Under ESOP Scheme 2010 a total number of 1,413,497 options were granted in the year ended March 31, 2011 at an exercise price of Rs. 161.87 per share. As per the ESOP Scheme 2010, 25% of the options shall vest at the end of each year from the date of grant.

During the year 2013-14, the Company granted a total number of 174,157 options at an exercise price of Rs. 178.18 per share to certain employees and key managerial personnel of the Company and certain employees of subsidiaries. Out of the options granted, in respect of 82,157 options 25% vest equally over a period of 4 years from the date of grant and in respect of 92,000 options entire options vest at the end of one year from the date of grant.

The Board at its Extra Ordinary General Meeting held on October 24, 2014 approved the modification in vesting period of 82,157 options from being vested equally over a period of 4 years from the date of grant to one year from the date of grant.

The Board at its Extra Ordinary General Meeting held on October 24, 2014 approved the change in exercise period of vested options from two year to one year from the date on which the shares of the Company get listed on a Recognized Stock Exchange.

Exercise period for options under ESOP 2010 is as follows:

i) For the employees while in employment of the Company : All options vested can be exercised within a period of one year from the date on which the shares of the Company get listed on a Recognized Stock Exchange.

ii) For the retired employees, termination due to permanent disability, death: All vested options may be exercised immediately after but in no event later than six months from the date of listing with a recognised stock exchange.

7. Employee Stock Option Scheme 2014 (ÂESOP Scheme 2014Â) :

The Compensation Committee recommended the new ESOP Scheme 2014 and the Board approved the new ESOP Scheme 2014 at its meeting held on November 11,2014 and Shareholders approved this ESOP Scheme 2014 at its meeting held on November 20, 2014.

Under ESOP Scheme 2014,the aggregate number of options to be granted is such number of stock options exercisable into 1,150,000 Equity Shares. Each option granted under the ESOP 2014 is convertible into one Equity Share. During the year ended March 31,2015, 932,500 options were granted at an exercise price of Rs. 600 per share. As per the ESOP Scheme 2014, 25% of the options shall vest at the end of each year from the date of grant.

The exercise period of these options is as follows :

i) For the employees while in employment of the Company : All options vested can be exercised within a period of two years from the date of Vesting of the respective Employee Stock Options.

ii) For the retired employees, termination due to permanent disability, death: All vested options may be exercised immediately after but in no event later than six months from the date of retirement, termination due to physical disability and death respectively.

8. Investments during the year Investments by the Company

(a) Scrabble Entertainment Limited (SEL):

During the year ended March 31, 2014, the Company exercised the option to redeem all 34,782 6% Optionally Convertible Redeemable Preference Shares (OCRPS) of Rs. 1,150 each of Rs. 39,999,300 invested in SEL.

During the year ended March 31, 2015, the Company acquired additional 14.91% stake (114,568 equity shares) in Scrabble Entertainment Limited from the minority shareholders for Rs. 249,987376. Out of the above the Company has paid Rs. 50,000,000 and balance of Rs. 199,987,376 is payable in four six monthly equal installments ending on December 31,2016. Post this investment, the Company holds 91.33% of equity share capital of SEL as at March 31,2015.

(b) Southern Digital Screenz India Private Limited (SDS)

During the year ended March 31,2015, the Company acquired additional 9% stake 386,895 equity shares in Southern Digital Screenz India Private Limited (SDS) from the minority shareholders for Rs. 109,998,117 Out of above the Company has paid Rs. 83,500,000 till March 31,2015 and balance of Rs. 26,498,117 has been paid by June 30, 2015. Post this investment, the Company holds 84.18% of equity share capital of SDS as at March 31,2015.

(c) Valuable Digital Screens Private Limited (VDSPL)

During the year ended March 31, 2015, the Company acquired 7105 equity shares representing 71.05% of equity share capital of VDSPL from Valuable Technologies Limited (VTL) for a consideration of Rs. 27,000,421. Further the Company has incurred Rs. 5,926,990 towards acquisition cost of this Investment. Subsequent to the acquisition the Company invested Rs. 17,005,895 in 4475 equity shares (fresh issue) of VDSPL. Post this investment, the Company now holds 80% equity share capital of VDSPL.

The Company will acquire the remaining 20% equity of VDSPL from VTL in the financial year 2017-18 for a further consideration to be calculated in accordance with the terms of the investment agreement.

(d) The advance of Rs. 20,000,000 paid in the previous year for acquiring stake in a company has been received back by the Company as the deal was terminated.

9. Leases

Operating lease : Company as lessee

The Company's significant leasing arrangements are in respect of operating leases taken for Office Premises, Stores & Digital Equipment's. These leases are cancellable operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the office lease generally is for 11 to 36 months. The initial tenure of the digital equipments on lease generally is for 36 to 72 months.

The Company has leased out Digital Cinema Equipment to theaters, franchisees and subsidiary companies on operating lease arrangement. The lease term is generally for 5 to 10 years. The Company as well as the theaters and franchisees have an option of terminating this lease arrangement any time during the tenure of the lease as per the provisions of the lease agreement.

10. Segment reporting

The Company is engaged in the business of Digital Cinema Services and sale of digital cinema equipments ancillary to sale of services, which are subject to same risk and rewards and the financial statements reflect the result of this business segment, which is the primary segment in accordance with the requirement of Accounting Standard 17 on Segment Reporting. The Company's operations are based in same geographical segment, India.

11. Related party disclosure

Names of related parties where control exists irrespective of whether transactions have occurred or not

Subsidiaries Edridge Limited, Cyprus V N Films Private Limited Scrabble Entertainment Limited Valuable Digital Screens Private Limited (from December 31,2014) Southern Digital Screenz India Private Limited United Film Organisers Nepal Private Limited, Nepal

Step-down Subsidiaries DCLP Limited, Cyprus (upto October 3,2013) UFO Europe Limited, Cyprus* UFO International Limited, Cyprus Scrabble Entertainment DMCC, Dubai (erstwhile known as Scrabble Entertainment JLT) UFO Lanka Private Limited, Sri Lanka Scrabble Entertainment (Lebanon) Sarl, Lebanon UFO Software Technologies Private Limited, India Scrabble Digital Inc. (from August 6, 2013) Scrabble Entertainment Mauritius Limited, Mauritius Scrabble Entertainment Israel Ltd, Israel* United Film Organisers (UFO) (Mauritius) Private Limited, Mauritius

*Under voluntary liquidation

Names of other related parties with whom transactions have taken place during the year

Key management personnel Mr. Sanjay Gaikwad - Managing Director Mr. Kapil Agarwal - Joint Managing Director

Relatives of Key Ms. Apeksha Agarwal management personnel

Enterprises owned or significantly influenced by key management personnel or their relatives

Media Infotek Park Shree Enterprises Valuable Media Limited Valuable Technologies Limited Qwik Entertainment India Limited Impact Media Exchange Limited Dusane Infotech (India) Private Limited

Associate of Subsidiary Scrabble Digital Limited

Joint venture of Mukta VN Films Limited (from June 10, 2013) Subsidiary

12. Capital and other commitments

a) The Company has issued a letter of comfort to a bank for term loan of Rs. 300,000,000 (March 31, 2014 : Nil) and cash credit facility of Rs 30,000,000 (March 31,2014 : Nil) taken by subsidiary company, assuring that it will take all necessary steps so that the repayment of the loan by the subsidiary is honored as and when due and payable.

b) As indicated in note 28 (c) to the financial statements, the Company will acquire the remaining 20% equity of VDSPL from VTL in the financial year 2017-18 for a further consideration to be calculated in accordance with the terms of the investment agreement.

13. Contingent liabilities (In Rs.) 31 March 2015 31 March 2014

Dividend on 4,885,925 - 6% Cumulative Convertible Preference Shares 31,002,198 31,002,198 of Rs. 100/- each.

Corporate Guarantee to a bank on behalf of Joint venture of 70,000,000 Nil Subsidiary (Refer Note a)

Corporate Guarantee to a bank on behalf of enterprises owned or 10,000,000 Nil

significantly influenced by Key management personnel or their relatives (Refer Note b)

Pending litigations / matters

(i) In respect of Income Tax matters

In respect demand order raised 22,710,000 Nil against the Company in income tax matter for the financial year 2006-07, 2007-08, 2008-09 and 2009-10

In respect of demand raised against 1,897,700 1,897,700 the company in Mumbai TDS matter for the financial year 2006-07 & 2007-08, company has filed an appeal to the Commissioner of Income Tax.

In respect of demand raised against 717,353 717,353 the Company of penalty u/s 271 (1) (C) for the financial year 2006-07, the company has filed an appeal to the Commissioner of Income Tax.

(ii) In respect of Indirect Tax matters

In respect of show cause notice raised against the Company in Mumbai 233,200,000 Nil Service Tax matter for the financial year 2008-09,2009-10,2011-12, 2012-13 and 2013-14 ( refer note c)

In respect of demand raised against Company in Bihar VAT matter due to 5,302,273 5,302,273 non-submission of "F" forms for the financial year 2007-08 and 2008-09.

In respect of demand raised against company in West Bengal VAT matter 4,195,703 4,195,703 for the financial year 2007-08.

In respect of demand raised against company in Andhra Pradesh VAT 630,162 630,162 matter due to non-submission of "F" forms for the financial year 2008-09 & 2009-10.

379,655,389 43,745,389

(iii) The Company had made downstream investments and being a foreign owned or controlled company, there have been delays in filings to be made with the regulators within the specified period as required by exchange control regulations. The ultimate outcome of these delays in filing cannot be estimated currently on the company's financial position and results of operations.

(iv) The Company is in discussions with another media company for resolving certain disputes with respect to patents allegedly held by that company. If such disputes are decided against the Company, there could be a payment of a fee for use of such patent, which cannot be quantified as of date. Based on legal opinion obtained by the Company, the Company believes that its position is likely to be upheld.

Notes:

a) The Company has provided Corporate guarantee to bank for Overdraft facility of Rs 70,000,000 (March 31,2014 : Nil) taken by joint venture of subsidiary assuring that it will take all necessary steps so that the repayment of the loan is honored as and when due and payable.

b) The Company has provided bank guarantee of Rs 10,000,000 (March 31, 2014 : Nil) to Chief Secretary, Revenue Department, Government of Maharashtra on behalf of Impact Exchange Media Private Limited, for managing and operating satellite based computer ticketing system provider in Maharashtra.

c) The Company has received show cause notices from service tax authorities challenging the qualification of Digital Cinema Equipments as 'capital goods' under the Cenvat Credit legislation, and accordingly denying the Cenvat Credit availed on procurement of such goods which have been leased out to various theatres / third parties. The Company has filed its responses to the authorities. In an event, any liability crystallising on the Company, the Company will consider capitalising the CENVAT credit. The above liability does not include interest, if any, payable under the provision for service tax from the date of receipt of order.

d) The Company is contesting the demand/matter relating to pending litigations listed above and the management, including its advisors, believe that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for the demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company's financial position and results of operations to the date of financial statements.

14. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on information available with the management, there is no amount due to micro, small scale and medium enterprises as per the Micro, Small and Medium Enterprises Development Act, 2006.

15. Corporate social responsibility

As per section 135 of the Companies Act, 2013 and rules therein, the Company is required to spend at least 2% of average net profit of past three years towards Corporate Social Responsibility (CSR). Details of corporate social responsibilities

16. Other receivables (share issue expenses)

Other receivables comprises share issue expenses incurred in connection with proposed Initial Public offer (IPO) only by way of offer for sale by existing shareholders of the Company. These receivables includes fees paid to bankers, stock exchanges, SEBI, lawyers, auditors, etc., in connection with the IPO of the Company. As per offer agreement between the Company and the selling shareholders, all expenses with respect to the IPO will be borne by the selling shareholders. Accordingly, the Company has classified the expenses incurred in connection with the IPO as receivable from selling shareholders under Other receivables, since these are not the expenses for the Company.

17. Loans and advances in the nature of loans given to subsidiaries in which directors are interested

VN Films Private Limited

Balance as at March 31,2015 Rs. 36,250,000 (March 31,2014 : Rs. 4,500,000)

Maximum amount outstanding during the year Rs. 79,000,000 (March 31,2014 : Rs. 4,500,000)

This loan is repayable on demand.

18. Previous year figures have been regrouped / reclassified, where necessary, to conform to current year classification..

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