EROS INTERNATIONAL MEDIA LIMITEDANNUAL REPORT 2018-19 Contents
Corporate Overview
Board of Directors
Management Reports
Management Discussion and Analysis
Directors’ Report
Corporate Governance Report
Financial Statements
Standalone Financial Statements
Consolidated Financial Statements
Notice to the AGM
02
04
07
37
49
98
144
FORWARD-LOOKING STATEMENTS
Certain statements in this report concerning the future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could
cause actual results to differ materially from those in such forward-looking statements. In some cases, these forward-looking statements can be identified by the use of
forward-looking terminology, including the terms “believes”, “estimates”, “forecasts”, “plans”, “prepares”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will” or
“should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions.
These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include, but are not limited
to, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition,
liquidity, prospects, growth, strategies, business development, the markets in which the Company operates, expected changes in the Company’s margins, certain cost or
expense items as a percentage of the Company’s revenues, the Company’s relationships with theater operators and industry participants, the Company’s ability to source
film content, the completion or release of the Company’s films and the popularity thereof, the Company’s ability to maintain and acquire rights to film content, the Company’s
dependence on the Indian box office success of its films, the Company’s ability to recoup box office revenues, the Company’s ability to compete in the Indian film industry,
the Company’s ability to protect its intellectual property rights and its ability to respond to technological changes, the Company’s contingent liabilities, general economic and
political conditions in India, including fiscal policy and regulatory changes in the Indian film industry. By their nature, forward-looking statements involve known and unknown
risk and uncertainty because they relate to future events and circumstances. The forward-looking statements speak only as of the date they are made and are not guaran-
tees of future performance and the actual results of the Company’s operations, financial condition and liquidity, and the development of the markets and the industry in which
the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in these materials. The forward-looking
statements in this report are made only as of the date hereof and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a
result of current or future events or otherwise, except as required by law or applicable rules.
Founder of Eros Group
Late Shri Arjan Gobindram Lulla
(1934-2018)
We are deeply saddened that Shri Arjan Lulla passed away last year. Eros
lost an incredible visionary and the world lost a wonderful human being.
We have all been fortunate to have his guidance and work with him as our
inspiring mentor. He leaves behind a company that he built with passion,
and his spirit will forever be the foundation of Eros.
We honor his legacy by dedicating ourselves to continuing the work he
loved so much and bringing his dreams to reality.
Board of Directors
Mr. Dhirendra
Swarup
Non-Executive
Chairman,
Independent
Mr. Sunil Arjan Lulla
Executive Vice
Chairman &
Managing Director
A government-certified accountant and a member of the
Institute of public Auditors of India, Mr. Swarup holds a post-
graduate degree in humanities. A career bureaucrat, he retired
as Secretary of Ministry of Finance, Government of India in 2005.
He possesses a vast experience of 45 years in the finance sector
and has also worked in the uK, Turkey and Georgia. He was
the Chairman of Financial Sector Redress Agency and is also
on the Board of several listed companies besides acting as a
member and the Chairman of several committees. In the past,
he has held many key positions and responsibilities like being a
member of the Board of the SeBI, a member of the permanent
High-level Committee on Financial Markets, Chairman of the
pension Funds Regulatory Authority, Chief of the Budget
Bureau of the Government of India, a member secretary of
the Financial Sector Reforms Commission, Chairman of public
Debt Management Authority Task Force, Vice-Chairman of the
International Network on Financial education of oeCD.
Mr. lulla holds a commerce degree from the university of
Mumbai. possessing an expansive 26 year long experience in
the Media & entertainment industry, he has been associated
with eros since its inception. He led the Company’s growth
within India for many years before being appointed executive
Vice Chairman & Managing Director of eros
India on
28 September 2009. Mr. lulla was reappointed to the same
position on 3 September 2015 for another period of five years.
During his stint, he has contributed tremendously in developing
and expanding the Company’s business in India. under his able
leadership, the Company continued to achieve milestones. He
has been instrumental in developing the Company’s distribution
business along with its home entertainment and music segments.
Mr. Kishore Arjan
Lulla
Executive Director
Mr. Rakesh Sood
Non-Executive,
Independent
The executive Chairman and Group Chief executive officer of
our parent Company, eros International plc., Mr. lulla holds a
bachelor’s degree in Arts from Mumbai university. possessing a
rich experience of over 36 years in the filmed entertainment and
media industry, he is a member of the British Academy of Film
and Television Arts and Young presidents’ organization besides
serving on the board of the School of Film at the university
of California, los Angeles. Mr. Kishore Arjan lulla has been
instrumental in expanding the Company’s presence in the united
Kingdom, the u.S., Dubai, Australia, Fiji and other international
markets. He is responsible for taking the Indian film industry to the
global arena. A recipient of the ‘Asian Business Awards’ 2007,
the ‘Indian Film Academy Awards’ 2007, and ‘entrepreneur of
the Year’ 2010, ‘Global Citizenship Award’ 2014, ‘entertainment
Visionary Award’ 2015, he has also featured on the ‘Best under
a Billion’ 2014 list of Forbes Asia and got invited to attend the
“billionaires’ summer camp” in the Sun Valley.
Mr. Sood holds a master’s degree in physics from St. Stephen’s
College, Delhi university and a post-graduate in economics and
Defence Studies. He joined the Indian Foreign Service (IFS) in
1976 after briefly working at DCM and SBI. In his 37 years long
diplomatic career, Mr. Sood served India’s diplomatic missions
in Brussels, Dakar, Geneva and Islamabad in varied capacities
and as the Deputy Chief of Mission in Washington. Having set
up the Disarmament and International Security Affairs Division
at Delhi and heading it for eight years, he was responsible for
multilateral disarmament negotiations relating to chemical and
biological weapons, nuclear tests, etc., and establishing bilateral
dialogues with the uSA, pakistan, France and the ASeAN
Regional Forum. He has also served as an Ambassador on the
Conference of Disarmament in Geneva, Afghanistan, Nepal and
France, and been appointed as a Special envoy of the prime
Minister (SepM) for disarmament and non-proliferation issues.
As a commentator, panelist and speaker on the foreign policy
and international security issues, he keeps on addressing various
forums, newspapers and television channels in India and abroad.
2 ANNuAl RepoRT 2018-19
Mr. S.
Lakshminarayanan
Non-Executive,
Independent
Ms. Jyoti
Deshpande
Non-Executive,
Non-Independent
Ms. Jyoti Deshpande 48 years, has over 26 years of experience
in media and entertainment across advertising, media consulting,
television and film. From April 2018, Ms. Deshpande joined
Reliance Industries limited as president of the Chairman’s office
to set up and head the Media and entertainment business.
In her new role at RIl, Ms. Deshpande leads the company’s
initiatives in Media and entertainment to organically build and
grow businesses around the content ecosystem such as
Broadcasting, Films, Sports, Music, Digital, Gaming, Animation
etc., as well as integrate RIl’s existing media investments such
as Viacom, Balaji Telefilms, Saavn and IndiaCast with a view to
build, scale and consolidate the fragmented $20 billion Indian
M&e sector.
Ms. Deshpande was recently featured in Forbes emergent 25
business women in Asia list in May 2018. Ms. Deshpande also
features in the prestigious Fortune India magazine’s 50 Most
powerful Women in Business which celebrates the journeys and
triumphs of women who not only impact their organizations but
are also thought leaders in their industry.
Mr. lakshminarayanan joined the Indian Audit and Accounts
service in 1965. After holding various positions in the Audit and
Accounts Department, he retired as the Deputy Comptroller
and Auditor General in 2002. During the period, he served
in the Ministry of personnel and pensions as Additional
Secretary and earlier in the Railways and Ministry of Defense,
Government of India. Several successful stints have helped
Mr. lakshminarayanan gain experience in cadre management,
staff welfare, purchases and contracts, financial advice and
accounting. With a commendable knowledge on the relevant
rules and regulations, he has led offices comprising as many
as 1,500 employees. He has also provided direction, guidance
and created administrative framework for the companies.
Mr. lakshminarayanan also has an international exposure.
Mr. Sunil
Srivastav
Non-Executive,
Independent
Mr. Srivastav retired as the Dy. Managing Director, Corporate
Accounts Group, from the State Bank of India (SBI). He was
responsible for a large corporate credit exposure, including
project and infrastructure financing for the bank. In an illustrious
career spanning over three decades with the SBI, he rose from
the ranks holding several leadership positions, including DMD –
CSNB, CGM – Kolkata and GM – Delhi, accomplishing several
achievements like initiating the Bank’s foray into digital delivery
of financial products and services, entry into the new lines of
businesses, including identification and negotiation with global
JV partners, managing and growing operations of a network of
1,450 offices in Bengal, Sikkim and Andaman & Nicobar, and
growing the bank’s business in the mountainous terrain in the
State of uttarakhand.
EROS IntERnAtIOnAL MEDIA LIMItED 3
Corporate overview | ManageMent report | financial ManageMent
MANAGEMENT DISCUSSION AND ANALYSIS
Macroeconomic Environment in India
Theatrical
7.2
in July 2019,
the Indian economy is recovering
in 2019 as disruptions related to
demonetization and implementation
of Goods and Services tax
(GSt) are easing up. As per the
World economic outlook update
published
India’s
economy is set to grow at 7.0
percent in 2019, further picking up to
7.2 percent in 2020. the downward
revision of 0.3 percentage point for
both years from the earlier released
estimates reflects a weaker than
for domestic
expected outlook
demand. However, as per the union
Budget 2019, the Government has
set up an ambitious target to reach
uS $ 5 trillion in the next five years
from the uS $ 2.7 trillion recorded in 2019.
2017
GDP Growth CAGR
(2017-2020E)
7.2
7.0
6.8
2018
2019E
2020E
Calendar years, e stands for estimates
Source: World economic outlook
update, July 2019
Indian Media and Entertainment Industry
With a population of over 1.3 billion, India has as many as 23
languages spoken across the country. Indians have a huge appetite for
entertainment and the demand for content in multiple languages is only
growing. In CY2018, the Indian M&e sector reached ` 1.67 trillion, a
growth of 13.4% over CY2017. With its current trajectory, the industry is
expected to grow to ` 2.35 trillion by 2021. the favorable media metrics
and the industry growth is being driven, in part, by increasing digitization,
higher penetration in rural markets, rapidly growing young population,
increasing online and mobile connectivity, and increasing growth of the
Indian middle and affluent classes. According to CIA’s World Factbook,
India has one of the youngest populations in the world with a median age
of 28 years and 59% of the population between 15-54 years is the key
driver of the consumption growth. the country is also at an inflexion point
in wireless broadband connectivity and infrastructure that, combined
with its GDp growth and young demographics, creates the right tailwinds
for the Indian Media and entertainment Industry.
Indian Media and Entertainment Industry Revenue Outlook
1 2 %
C A G R :
1,887
338
223
194
317
815
1,675
284
169
175
306
740
2018
Filmed Entertainment
2019E
Digital Media
2,349
466
354
236
338
955
2021E
Others
1,476
238
119
156
303
660
2017
Television
Print
(a) other includes Radio, Music, out of Home, Animation/VFX, Gaming
and Digital Advertising
(b) All figures in ` billion, calender years
Source: FICCI-eY M&e Report 2019
4
AnnuAl RepoRt 2018-19
the Indian film segment grew by 12.2% in 2018 to reach ` 174.5 billion.
the Indian film entertainment industry is the largest in the world in
terms of the total number of films released theatrically. the FICCI-eY
M&e Report 2019 estimates that 1,776 films were released in 2018 as
compared to 1,807 films in 2017. Despite a decline in the number of
films, the year 2018 turned out to be a successful year for the Hindi
theatricals segment in terms of the box office with films entering the
` 1 billion club almost every month. Going forward, the filmed
entertainment is projected to grow to ` 236 billion by 2021.
Hindi films contributed approximately 42.1% of net Box office
collections, despite comprising only 13.4% of the films released. Films
in other languages comprised 81% of the films released and contributed
approximately 46.9% of the Box office collections. Hollywood and
foreign films contributed the balance. Strong focus from top studios
towards regional cinema continues to be driving the growing popularity of
regional films. Another major trend that the regional cinema has benefited
from has been through the increased consumption of dubbed films by
the audiences.
Rapid urbanization has resulted in increased demand for modern
cinema screens featuring quality infrastructure, latest audio-visual
systems, food and beverage offerings etc. While the multiplexes are
at the forefront of providing such facilities to the patrons, many single
screen cinemas are also converting themselves into multiplexes or are
revamping themselves. on an overall basis, multiplexes screen count
stood at 2,950 screens, which was about 30% of the overall screen
count, but contributed approximately 60% of the box office revenues.
there continues to be a major opportunity to build more screens,
given the low penetration of the screens in India, especially in tier-III,
tier-IV and rural markets.
Screens per million of population
125
60
40
8
10
16
India
Brazil
China
South Korea
UK
US
Source: FICCI-eY M&e Report 2019
Another trend that has augmented the convenience factor for cinema
visits is the increasing adoption of online ticketing from platforms such
as BookMyShow, paytm etc. and also cinemas’ own platforms. In
recent years, well over 50% of ticket sales for multiplexes are being
booked online.
overseas theatricals have emerged as the fast growing revenue
stream for film studios. In 2018, overseas theatricals market grew to
` 30 billion from ` 25 billion in 2017. 120-125 movies, across the Hindi
and regional domains, were released in the overseas theatrical markets
in 2018. Apart from the big banner releases, several small and medium-
sized films made their mark in overseas markets. the main overseas
markets for Indian films, where often the release date is the same as in
India, are uSA, uK, Middle east, Canada, Australia. Apart from these
traditional markets, the following of Indian films continues to grow with
cross over audiences across many countries in Asia pacific and Western
europe. China is being cemented as a big overseas market for Indian
content. While only 2 films and 1 film was released in China in 2016 and
2017 respectively, 2018 saw 10 films from India being screened in China,
accounting for highest collection in this overseas region.
MANAGEMENT DISCUSSION & ANALYSIS
OTT platforms
Television
While the theatrical and television segments are steadily increasing and
reporting healthy growth, the exponential growth of digital media and the
advent of the ott platforms in the Media and entertainment industry is
a game changer for India.
Internet subscribers grew 28% from 446 million in 2017 to 570 million in
2018. Hence given that there are 4 billion internet users in the world, one
amongst eight internet users is an Indian.
Since 2016, tV viewership in India has shot up by 12%, according to the
Broadcast Audience Research Council (BARC)’s Broadcast India survey.
According to FICCI-eY M&e Report 2019, the survey report indicates a
7.5% increase in the number of tV-owning households across India to
197 million in 2018 and the number of viewers also rose by 7.2% to 836
million. the tV penetration amongst Indian households increased 66%
in 2018 from 64% in 2016 and 88% of the tV households were digitized.
Internet penetration was also driven by rural subscriber growth
Mode of Signal
CY2017
CY2018
total internet subscribers
narrow band subscribers
Broadband subscribers
urban internet subscribers
Rural internet subscribers
Dec 2017
Dec 2018
446
83
363
314
132
570
58
512
373
197
At over 500 million broadband subscribers, India has the second largest
broadband subscriber base in the world after China. this number is
expected to grow to 700 million by 2021, effectively meaning that the
broadband access will be available to all internet subscribers. Wireless
broadband comprises 96% of the total broadband subscribers, clearly
indicating that smartphone is a preferred device for internet access for
most Indians.
54% of the total mobile connections were 3G and 4G and data
consumption across 3G and 4G networks comprised 12% and 87%
of the total data consumption. the average Indian data user doubled
consumption from 4GB to 8GB per month between 2017 to 2018 and
expected to reach 10GB in 2019. this is an indication that as network
rollout progresses further, the data consumption and thereby the ott
viewership is set to grow exponentially.
According to FICCI-eY M&e Report 2019, India has the world’s second
highest number of internet users after China, with around 570 million
internet subscribers, growing at a rate of 13% annually. the impressive
scale of the market and a liberal foreign investment environment
will continue to be attractive to global streaming platforms looking to
capitalize on the country’s fast growing digital consumption.
Digital media is playing an increasingly important role in the Indian
media industry. With the rapid convergence of media and technology,
entertainment companies are digitizing their content and leveraging digital
platforms such as mobile and broadband to monetize their content.
Further, with increasing digital infrastructure, Indians are now increasingly
getting accustomed to consuming content online. As a result, digital
content creation is growing across languages and genres. In 2018, the
demand for original digital content increased to around 1,200 hours, also
pushing up prices as a result.
the telecom companies have been integral to the digital market with over
200 million people accessing digital content through telco data bundles
and upto 60% of video viewership volumes generated by telecom
companies. According to uC news Feed platform in India, entertainment
was the largest category of mobile content consumption for Indian users,
followed Sports and lifestyle segments.
It is expected that by 2021, 30-35 million paying subscribers and a
further 350+ million subscribers will access bundled ott services
from telecom companies. Rollout of fiber to home and 5G services
will also significantly improve connectivity from 2020 onwards. this will
be beneficial for video consumption, particularly for long form content
such as films and digital series.
Cable
DtH
Hits
Free tV
Total
98.5
52
1.5
31
183
103
56
2
36
197
television segment in 2018 grew by 12% to reach ` 740 billion. Growth
was led by a 14% increase in advertising revenues and 11% increase in
subscription revenues. this segment is expected to reach ` 955 billion
by 2021, with advertising growing at 10% and subscription at 8%.
Viewership Growth Regional Languages
25%
15% 15% 15% 14% 14%
10%
9%
Marathi English
Hindi
Gujarati
Tamil
Kannada Bengali Telugu
Source: FICCI-eY M&e Report 2019
In terms of content consumption trends, 24% of the total content
consumed was on films. the broadcast rights for films grew from
` 19 billion in 2017 to ` 21.2 billion in 2018. Films continue to generate
healthy sales on satellite rights as they continue to drive advertising and
well as subscription revenues effectively.
Music
Music is an integral part of Indian film promotion and generates additional
revenue streams for film companies. the Indian music segment grew
10% to reach ` 14.2 billion in 2018. It is expected to grow 10.8%
annually till 2021, on the back of increased digital revenues, performance
rights and synchronization rights. In India, songs related to films have the
highest share accounts for over 80% of the music segment’s revenues.
the three most popular genres amongst internet users in India are new
Bollywood music, older Bollywood music and Indian classical music.
Company Overview
eros International Media limited (eros International) is a leading global
Company in the Indian filmed and digital entertainment Industry which
co-produces, acquires and distributes Indian language films in multiple
formats worldwide. the success is built on the relationships we have
cultivated over the past 40 years with leading talent, production
companies, exhibitors and other key participants in our industry.
leveraging these relationships, we have aggregated rights to over 2,000
films in our library, including recent and classic titles that span different
genres, budgets and languages. We have co-produced/acquired a
portfolio of over 130+ new films over the last three completed fiscal
years. Film distribution across theatrical, overseas and television and
EROS INTERNATIONAL MEDIA LIMITED 5
Corporate overview | ManageMent report | finanCial management
MANAGEMENT DISCUSSION & ANALYSIS
others channels along with library monetization provide us with diversified
revenue streams. In addition, eros International produces and acquires
content for eros now, parent eros International plc’s, ott entertainment
service. launched in 2012, eros now has digital rights to over 12,000
films, out of which approximately 5,000 films are owned in perpetuity,
across Hindi and regional languages from eros' internal library, as well
as third-party aggregated content. As of 31 March 2019, eros now has
garnered ~ 155 million registered users across WAp, App and Web and
18.8 million paying subscribers.
Strategic Overview
our strategy is driven by the scale and variety of our content and
the global exploitation of that content through diversified channels.
Specifically, we intend to pursue the following strategies:
Scaling up productions, co-productions and acquisitions to
augment our film library and original digital content
Expand our regional content offerings
Human resources
Within our strategic roadmap, we have 5 distinct themes that guide our
actions. Position Human Resources to support senior leadership in
executing on the priorities for the organization. Enhancing HR systems
& process solutions to serve our employees better, while ensuring
accountability through policy and reporting. Maximizing efficiencies
and effectiveness in business through process standardization. our
quest to becoming Employers of choice with our ability to retain,
motivate, develop and continue to attract the best talent market has to
offer through a stringent promotion, Internal recruitment and job rotation
process. our reward and recognition program forms a core part of
the exercise. In order to maintain market leader’s position of being an
attractive employer, the Company has developed global guidelines on
diversity, equal rights and against discrimination. Employee relations &
listening post through an open door policy giving every employee the
right and opportunity to discuss any work-related issues directly with the
management. In order for us to do so, we have aligned the workplace
layout and seating to foster the said culture.
Effectively monetize our strong film library across various platforms
Cautionary Statements
Create compelling content for our Eros Now, our parent Eros
International plc’s ott entertainment service
Further extend the distribution of our content to new audiences
and platforms
Capitalize on the highly attractive market opportunity driven by
secular tailwinds
Statements in the Management Discussion and Analysis describing
the Company’s objectives, projections, estimates and expectations
may be ‘forward-looking statements’ within the meaning of applicable
securities, laws and regulations. Actual results could differ materially
from those expressed or implied. Important factors that could influence
the Company’s operations include economic developments in India
or globally, demand and supply conditions in the industry, changes in
Government regulations, tax laws, litigations and employee relations
and others.
•
•
•
•
•
•
6
AnnuAl RepoRt 2018-19
dIRECtORS’ REPORt
To,
The Members
Eros International Media Limited
Your Board of Directors are pleased to present 25th Annual Report of Eros International Media Limited (hereinafter referred to as “the Company”)
covering the business, operations and Audited Financial Statements of the Company for the financial year ended 31 March 2019.
1.
FInanCIal RESUltS
The Financial Performance of your Company for the year ended 31 March 2019 is summarized below:
` in lakhs
Standalone Year Ended
Consolidated Year Ended
Particulars
2018-19
2017-18
Sales and other Income
Profit before tax
Less: Tax Expenses
net Profit for the year from continuing operations
Profit for the year attributable to:
Equity shareholders of the Company
Non-controlling Interests
Other Comprehensive Income/(loss) (net of taxes)
total Comprehensive Income for the Year
attributable to:
Equity Shareholders of the Company
Non-controlling Interests
EPS (diluted) in `
86,980
13,677
4,941
8,736
-
-
40
8,776
-
-
9.10
72,857
14,043
6,342
7,701
-
-
56
7,757
-
-
8.03
2018-19
1,13,969
31,763
5,115
26,648
26,908
(260)
5,134
31,782
32,042
(260)
28.02
2017-18
1,01,001
28,735
5,613
23,122
22,934
188
51
23,173
23,207
(34)
23.92
2.
FInanCIal PERFORManCE
On a consolidated basis, the Company has recorded the revenues
of ` 1,13,969 lakhs which is an increase of 12.84% as compared
to previous year of ` 101,001 lakhs. The profit before tax increased
by 10.54% to ` 31,763 lakhs as compared to previous year of
` 28,735 lakhs. The profit after tax attributable to equity shareholders
was ` 26,908 lakhs, which was an increase of 17.33% as compared
to previous year of ` 22,934 lakhs. Diluted EPS increased by 17.14%
to ` 28.02 as compared to previous year of ` 23.92.
On standalone basis, the Company has recorded revenues of
` 86,980 lakhs which was an increase of 19.38% as compared to
previous year of ` 72,857 lakhs. The profit before tax decreased
by 2.61% to ` 13,677 lakhs as compared to previous year of
` 14,043 lakhs. The profit after tax at ` 8,736 lakhs an increase of
13.44 % as compared to previous year of ` 7,701 lakhs. Diluted
EPS increased by 13.33% to ` 9.10 as compared to previous year
of ` 8.03.
3. OPERatIOnal PERFORManCE
During the Financial Year 2018-19, your Company released a total
of 72 Films, of which 7 medium budget and 65 low budget Films as
compared to 24 Films released in corresponding period last year, of
which 1 were high budget, 4 medium budget and 19 low budget
Films. Amongst the 72 Films released during the financial year
2018-19, 15 Hindi films, 7 Tamil/Telugu film and 50 regional films.
Major releases for FY 2018-19 included: Bhavesh Joshi Super
Hero (Hindi), Saakshyam (Telugu), Happy Phirr Bhag Jayegi (Hindi),
Manmarziyan (Hindi), Patakhaa (Hindi), Amar Akbar Anthony
(Telugu), Savyasachi (Telugu), Boyz 2 (Marathi), Tumbbad (Hindi),
Mumbai Pune Mumbai 3 (Marathi) and others.
Your Company’s key asset is a film library of over 2,000 films. In
an effort to reach a wide range of audiences, we maintain rights
to a diverse portfolio of films spanning various genres, generations
and languages. These include rights to films in Hindi and several
regional languages, Tamil, Telugu, Kannada, Marathi, Bengali,
Malayalam and Punjabi.
4. dIVIdEnd
With a view to conserve resources and to strengthen the financial
position of the Company, your Directors did not recommend any
dividend to its members for the financial year 2018-19.
The Dividend Distribution policy adopted by the Company in
terms of SEBI (Listing Obligations & Disclosures Requirements)
Regulations, 2015 (“SEBI listing Regulations”). This Policy is
uploaded on the website of the Company at www.erosplc.com
5. RESERVES
No percentage of profits was transferred to General Reserve as
dividend was not recommended for the financial year 2018-19.
6.
EMPlOYEES’ StOCK OPtIOn SCHEME & CHanGES In
SHaRE CaPItal
During the year under review, the Nomination and Remuneration
Committee of the Board had issued and allotted 3,09,642 Equity
Shares of the Company to its employees against exercise of
equal number of stock options pursuant to Eros Employee Stock
Option Scheme 2009 (“EROS ESOP 2009”) and 2,26,621 Equity
Shares of the Company to its employees against exercise of equal
number of stock options pursuant to Eros Employee Stock Option
Scheme 2017 (“EROS ESOP 2017”). This resulted in increase in
the Company’s Paid up Share Capital to ` 95,50,81,400 as on
31 March 2019 as against ` 94,97,18,770 in the previous year.
The disclosures as required under Regulation 14 of Securities
Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 read with SEBI Circular No. CIR/CFD/POLICY
CELL/2/2015 dated 16 June 2015, is attached to this report
as annexure a hereto and is also available on website of the
Company at www.erosplc.com. A certificate from the statutory
auditors certifying that both the schemes viz. EROS ESOP 2009
EROS IntERnatIOnal MEdIa lIMItEd 7
Corporate overview | ManageMent report | finanCial management
and EROS ESOP 2017 has been implemented in accordance
with SEBI (Share Based Employee Benefits) Regulations, 2014
and in accordance with the resolution(s) passed by the members
would be placed at the Annual General Meeting of the Company
for inspection by the members.
7.
SUBSIdIaRIES, JOInt VEntURE and aSSOCIatE COMPanIES
As on 31 March 2019, the Company has 11 subsidiaries. There
has been no material change in the nature of the business of
the Company and its subsidiaries. Pursuant to the provisions
of Section 129(3) of the Act read with Rule 5 of the Companies
(Accounts) Rules, 2014, a statement containing salient features of
the financial statements of the Company’s subsidiaries and joint
venture, its performance and financial position is provided in the
prescribed Form AOC-1 is attached to this Report as annexure B.
None of the subsidiary companies except Copsale Limited (a
British Virgin Island Company) are material subsidiary in terms of
Regulation 16(c) of the SEBI Listing Regulations (as amended) and
in accordance with Company’s policy on “Determination of material
subsidiaries”, which is uploaded on the website of the Company at
www.erosplc.com.
In accordance with Section 136 of the Act, the financial statements
of the subsidiary companies are available for inspection by
the members at the Corporate Office of the Company during
business hours on all days except Saturdays, Sundays and public
holidays between 11:00 A.M. to 1:00 P.M. up to the date of the
Annual General Meeting of the Company. Any member desirous
of obtaining a copy of the said financial statements may write to
the Company Secretary at the Corporate Office of the Company.
The financial statements including the consolidated financial
statements, financial statements of subsidiaries and all other
documents required to be attached to this report have been
uploaded on the website of the Company at www.erosplc.com.
8. BOaRd OF dIRECtORS & KEY ManaGERIal PERSOnnEl
In accordance with the provisions of Section 152(6) of the Act
and in terms of the Articles of Association of the Company,
Mr. Kishore Lulla, Executive Director (DIN: 02303295) retires by
rotation at the ensuring Annual General Meeting and being eligible,
has offered himself for re-appointment.
The first term of office of Mr. Dhirendra Swarup as an Independent
Director expires at the ensuing Annual General Meeting of
the Company.
The Board of Directors, on recommendation of Nomination and
Remuneration Committee has recommended re-appointment of
Mr. Dhirendra Swarup as an Independent Director of the Company
for a second term of Five (5) consecutive years on the expiry of his
current term of office.
As per the provisions of the Act, Independent Directors have been
appointed for a period of five years and shall not be liable to retire by
rotation. All other Directors, except the Managing Director, are liable
to retire by rotation at the Annual General Meeting of the Company.
The brief details of the Directors proposed to be reappointed as
required under Secretarial Standard 2 issued by the Institute of
Company Secretaries of India and Regulation 36 of the SEBI Listing
Regulations is provided in the Notice convening Annual General
Meeting of the Company.
All the Directors of the Company have confirmed that they are not
disqualified to act as Director in terms of Section 164 of the Act.
As on the date of this Report, Mr. Sunil Arjan Lulla, Managing
Director, Mr. Farokh P. Gandhi, Group Chief Financial Officer (India)
and Mr. Abhishekh Kanoi, VP-Company Secretary & Compliance
Officer are the Key Managerial Personnel of your Company
in accordance with the provisions of Section 2(51) read with
Section 203 of the Act.
8
ANNuAL REPORT 2018-19
declaration of Independence by Independent directors
& adherence to the Company’s Code of Conduct for
Independent directors
All the Independent Directors of the Company have submitted their
disclosure to the effect that they fulfill all the requirements/criteria
of independence as per Section 149(6) of the Act. Further, all the
Independent Directors have affirmed that they have adhered and
complied with the Company’s Code of Conduct for Independent
Directors which is framed in accordance with Schedule IV of
the Act.
Meetings conducted during the Year
The Board met four (4) times during the financial year under
review, the details of which are given in the Corporate
Governance Report that forms part of this Report. The
intervening gap between any two meetings of the Board was
not more than one hundred and twenty (120) days as stipulated
under the Act and SEBI Listing Regulations.
Constitution of various Committees
The Board of Directors of the Company has constituted
following Committees:
a.
Audit Committee
b. Nomination and Remuneration Committee
c.
Stakeholders Relationship Committee
d. Corporate Social Responsibility Committee
e. Management Committee
Details of each of the Committees stating their respective
composition, terms of reference and others are uploaded on
our website at www.erosplc.com and are stated in brief in the
Corporate Governance Report attached to and forming part of
this Report.
Annual Evaluation of Board, its Committees and Individual
Directors
The Company has devised a Policy for performance evaluation of
the Board, its Committees and other individual Directors (including
Independent Directors) which includes criteria for Performance
the Non-Executive Directors and Executive
Evaluation of
Directors. The evaluation process inter alia considers attendance
of Directors at Board and Committee Meetings, acquaintance
with business, communicating inter se Board Members, effective
participation, domain knowledge, compliance with code of
conduct, vision and strategy, benchmarks established by
global peers, etc., which is in compliance with applicable laws,
regulations and guidelines.
The Board carried out annual evaluation of the performance of the
Board, its Committees and Individual Directors and Chairperson.
The Chairman of the respective Board Committees shared the
report on evaluation with the respective Committee Members.
The performance of each Committee was evaluated by the
Board, based on report on evaluation received from respective
Board Committees. The reports on performance evaluation of the
Individual Directors were reviewed by the Chairman of the Board.
Familiarization Programme for Independent directors
Familiarization Programme for Independent Directors is mentioned
at length in Corporate Governance Report attached to this Report
and the details of the same have also been disclosed on the
website of the Company at www.erosplc.com.
Policy on appointment and remuneration and other details
of directors
The remuneration paid to the Directors is in line with the
Nomination and Remuneration Policy formulated in accordance
with Section 178 of the Act and Regulation 19 of the SEBI
Listing Regulations (including any statutory modification(s) or
re-enactment(s) thereof for the time being in force).
Directors’ report
The Company’s policy on directors’ appointment and remuneration
and other matters as provided in Section 178(3) of the Act has
been disclosed in the Corporate Governance Report, which forms
part of this Report.
A detailed statement of disclosure required to be made in
accordance with the Nomination and Remuneration Policy of the
Company, disclosures as per the Act and applicable Rules thereto
is attached to this Report as annexure C hereto and forms part of
this Report.
9. aUdItORS & aUdItORS’ REPORt
Chaturvedi & Shah LLP (erstwhile known as Chaturvedi & Shah),
(Firm Registration No. 101720W/W100355) were appointed as
Statutory Auditors of the Company at the 23rd Annual General
Meeting of the Company held on 28 September 2017 for the
term of Five (5) years i.e. from the conclusion of 23rd Annual
General Meeting until the conclusion of 28th Annual General
Meeting, to be held in the year 2022. They have confirmed
that they are not disqualified from continuing as Auditors of
the Company.
Auditors’ Report
There are no qualifications, adverse remarks reservations or
disclaimer made by Chaturvedi & Shah LLP, Statutory Auditors,
in their report for the financial year ended 31 March 2019. The
notes to the Accounts referred to in the Auditor’s Report are
self-explanatory and therefore do not call for any further explanation
and comments.
Pursuant to provisions of Section 143(12) of the Act, the Statutory
Auditors have not reported any incidence of fraud to the Audit
Committee during the year under review.
10. SECREtaRIal aUdItORS’ and ItS REPORt
to
the Companies
the provisions of Section 204 of
the Act
Pursuant
and
(Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Board has appointed
Makarand M. Joshi & Co., a firm of Company Secretaries in
Practice to undertake the Secretarial Audit of the Company
for the financial year 2018-19. The Secretarial Audit Report
for the financial year ended 31 March 2019 in the prescribed
Form MR-3 is attached to this Report as annexure d,
which is self-explanatory. The Secretarial Audit Report does
not contain any qualification, reservation, adverse remark
or disclaimer.
11. PaRtICUlaRS OF EMPlOYEES
The requisite disclosures in terms of the provisions of Section 197
of the Act read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 along with
statement showing names and other particulars of employees
drawing remuneration in excess of the limits prescribed under the
said Rules is annexure to this Report as annexure E.
All contracts/arrangements/transactions entered by
the
Company during the financial year with related parties were on
an arm’s length basis, in the ordinary course of business and in
compliance with the applicable provisions of the Act and SEBI
Listing Regulations. Prior omnibus approval had been obtained
for the transaction which are of a foreseeable and repetitive in
nature and such transactions are reported on a quarterly basis
for review by the Audit Committee as well as the Board.
Pursuant to Section 134 of the Act read with Rule 8(2) of the
Companies (Accounts) Rules, 2014, the particulars of contracts /
arrangements / transactions entered into with related parties during
the financial year 2018-19 in terms of Section 188(1) of the Act and
applicable Rules made thereunder, is attached to this Report as
annexure F in the prescribed Form AOC-2.
All other contracts / arrangements / transactions with related
parties, are in the usual course of business and at arm’s
length basis and stated in Notes to Accounts to the Financial
Statements of the Company forming part of this Annual Report.
14. WHIStlE BlOWER / VIGIl MECHanISM
Your Company promotes ethical behavior in all its business
activities and your Company has adopted a Policy on Vigil
Mechanism and Whistle Blower in terms of Section 177(9)
and Section 177(10) of the Act and Regulation 22 of the SEBI
Listing Regulations for receiving and redressing complaints from
employees, directors and other stakeholders to report concerns
about unethical behaviour, actual or suspected fraud.
The Policy is appropriately communicated within the Company
across all levels and has been displayed on the Company’s
intranet for its employees and website at www.erosplc.com
for stakeholders.
Protected disclosures are made by a whistle blower in writing to
the Ombudsman on Email-ID at whistleblower@erosintl.com and
under the said mechanism, no person has been denied direct
access to the Chairperson of the Audit Committee. The Audit
Committee and Stakeholders Relationship Committee periodically
reviews the functioning of this Mechanism.
15. PREVEntIOn, PROHIBItIOn and REdRESSal OF SEXUal
HaRaSSMEnt at WORKPlaCE
The Company has formulated a Policy on Prevention of Sexual
Harassment at Workplace
in accordance with the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act 2013 and the Rules thereunder. All employees
(permanent, contractual, temporary, trainees) are covered under
the Policy. Further, the Company has constituted an Internal
Complaints Committee, where employees can register their
complaints against sexual harassment.
During the year under review, the Company has not received any
complaints on sexual harassment.
12. lOanS, GUaRantEES OR InVEStMEntS
16. EXtRaCt OF tHE annUal REtURn
Particulars of loans given, investments made or guarantees given
or security provided by the Company as required under Section
186(4) of the Act and the SEBI Listing Regulations are contained
in Notes to the Standalone Financial Statements of the Company
forming part of this Annual Report.
13. RElatEd PaRtY tRanSaCtIOnS
In line with the requirements of the Act and SEBI Listing
Regulations, your Company has formulated policy on Related
Party Transactions duly approved by the Board, which is also
available on the Company’s website at www.erosplc.com. The
Policy intends to ensure that proper reporting, approval and
disclosure processes are in place for all transactions between
the Company and Related Parties.
The extract of Annual Return in the prescribed Form MGT-9 as
required under Section 92(3) of the Act read with Companies
(Management & Administration) Rules, 2014 is placed on the
website of the Company at www.erosplc.com and is set out in
annexure G to this Report.
17.
InSURanCE
All the insurable interests of your Company including properties,
equipment, stocks etc. are adequately insured.
18. dEPOSItS
Your Company has not accepted any deposit from public under
Chapter V of the Act.
EROS IntERnatIOnal MEdIa lIMItEd 9
Corporate overview | ManageMent report | finanCial management
Audit Committee reviews the adequacy and effectiveness of
the Company’s internal control requirement and monitors the
implementation of audit recommendations.
22. CORPORatE GOVERnanCE
the provisions of
In accordance with
the SEBI Listing
Regulations, a detailed report on Corporate Governance along
with Compliance Certificate issued by the Secretarial Auditor
of the Company is attached and forms an integral part of this
Annual Report.
23. ManaGEMEnt dISCUSSIOn and analYSIS REPORt
In terms of Regulation 34 and Schedule V of the SEBI Listing
Regulations, Management Discussion and Analysis Report is
presented in separate sections forming part of this Annual Report.
24. CORPORatE SOCIal RESPOnSIBIlItY
The disclosures on Corporate Social Responsibility activities,
as required under Rule 9 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, are reported in annexure H
forming part of this Report and is also available on the website of
the Company at www.erosplc.com.
25. RISK ManaGEMEnt
The Audit Committee of the Board has been vested with powers
and functions relating to Risk Management, which inter alia
includes (a) review of risk management policies and business
processes to ensure that the business processes adopted and
transactions entered into by the Company are designed to identify
and mitigate potential risk; (b) laying down procedures relating to
Risk assessment and minimization.
The objective of the risk management framework is to enable and
support achievement of business objectives through risk intelligent
assessment while also placing significant focus on constantly
identifying and mitigating risks within the business. Further details
on the Company’s risk management framework is provided in the
Management Discussion and Analysis report.
26. MatERIal CHanGES and COMMItMEntS aFFECtInG
tHE FInanCIal POSItIOn OF tHE COMPanY
There have been no material changes and commitments, affecting
the financial position of the Company which have occurred
between the end of the financial year of the Company to which the
financial statements relate and till the date of this Report except for
downgrade of credit rating by CARE Rating Limited in June 2019
from CARE BBB- to CARE D for Long term facilities and CARE
A3 to CARE D for Short Term Facility on account of delay in debt
servicing for more than 30 days.
27. dEtaIlS OF SIGnIFICant/MatERIal ORdERS PaSSEd BY
tHE REGUlatORS/COURtS
There have been no significant and material orders passed by the
Regulators or Courts or Tribunals impacting the going concern
status and Company’s operations in future.
28. OtHER dISClOSURES
•
During the year under review, the Company has not accepted
any deposit within the meaning of Sections 73 and 74 of
the Act read with the Companies (Acceptance of Deposits)
19. dIRECtORS’ RESPOnSIBIlItY StatEMEnt
To the best of their knowledge and belief and according to the
information and explanations obtained, in terms of Section 134 of
the Act, your Directors confirms that:
a.
b.
c.
d.
e.
f.
in the preparation of the annual accounts for the financial year
ended 31 March 2019, the applicable Accounting Standards
read with the requirements set out under Schedule III to the
Act, have been followed and there are no material departures
from the same;
such accounting policies have been selected and applied
consistently and judgments and estimates made that are
reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at 31 March 2019 and
of the profit of the Company for the year ended on that date;
proper and sufficient care has been
the
maintenance of adequate accounting records in accordance
with the provisions of the Act, for safeguarding the assets
of the Company and for preventing and detecting fraud and
other irregularities;
taken
for
the annual accounts have been prepared on a ‘going
concern’ basis;
internal financial controls were followed by the Company
and such internal financial controls are adequate and are
operating effectively; and
proper systems have been devised to ensure compliance
with the provisions of all applicable laws and such systems
are adequate and operating effectively.
20. COnSERVatIOn OF EnERGY, tECHnOlOGY aBSORPtIOn,
FOREIGn EXCHanGE
Your Company is into the business of production, acquisitions,
marketing and distributions of cinematograph films. Since
this business does not involve any manufacturing activity, the
Information required to be provided under Section 134(3)(m)
of the Act read with the Companies (Accounts) Rules, 2014,
are not applicable to the Company. However, the Company
has been continuously and extensively using technology in its
business operations.
The particulars of foreign currency earnings and outgo are as under:
` in lakhs
Particulars
Year ended
31 March 2019
Year ended
31 March 2018
Expenditure in foreign currency
Earnings in foreign currency
CIF Value of Imports
520
16,526
NIL
372
11,014
NIL
21.
IntERnal FInanCIal COntROlS
Your Company maintains adequate and effective internal
control systems which commensurate with the nature, size
and complexity of its business and ensure orderly and efficient
conduct of the business. The internal control systems of the
Company are routinely tested and verified by Independent
Internal Auditors and significant audit observations and
follow-up actions are reported to the Audit Committee. The
10
ANNuAL REPORT 2018-19
Directors’ report
Rules, 2014 (including any statutory modification(s) or
re-enactment(s) thereof for the time being in force);
•
•
Your Company has complied with the provisions of all
applicable Secretarial Standards issued by the Institute
of Company Secretaries of India on Meeting of Board of
Directors [SS-1] and General Meetings [SS-2];
The Company has not issued equity shares with differential
rights as to dividend, voting or otherwise.
29. aCKnOWlEdGMEntS
The Board of Directors take this opportunity to express their
sincere appreciation for support and co-operation from the Banks,
Financial Institutions, Members, Vendors, Customers and all other
business associates.
Your Directors sincerely appreciate
the high degree of
professionalism, commitment and dedication displayed by the
employees at all levels. Your Directors also wish to place on record
their gratitude to all the stakeholders for their continued support
and confidence.
For and on behalf of the Board of directors
Sunil arjan lulla
Executive Vice Chairman & Managing director
DIN: 00243191
Subramaniam lakshminarayanan
non-Executive Independent director
DIN: 07972480
Sunil Srivastav
non-Executive Independent director
DIN: 00237561
Place: Mumbai
Date: 23 May 2019
EROS IntERnatIOnal MEdIa lIMItEd 11
Corporate overview | ManageMent report | finanCial management
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ANNuAL REPORT 2018-19
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EROS IntERnatIOnal MEdIa lIMItEd 15
Corporate overview | ManageMent report | finanCial management
Information required under Section 197 of the Companies Act, 2013, read with The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014
a. Ratio of remuneration of each directors/KMP to the median remuneration of the employees of the Company for the financial
annexure C
year 2018-19 is as follows:
Name of Director/KMP
Mr. Dhirendra Swarup
Mr. Rakesh Sood
Mr. Sunil Arjan Lulla
Mr. Kishore Arjan Lulla
Mr. S. Lakshminarayanan
Mr. Sunil Srivastav
Mr. Farokh Gandhi
Mr. Abhishekh Kanoi
Total remuneration
(Amount in `)
Ratio of remuneration of director to
the Median remuneration
5,655,000
3,207,500
48,008,808
14,070,372
3,007,500
2,453,120
7,918,560
3,367,956
13.07
7.42
110.99
32.53
6.95
5.67
18.31
7.79
notes:
1. The above information is on standalone basis.
2. The aforesaid details are calculated on the basis of remuneration for the financial year 2018-19.
3. The remuneration to Directors includes sitting fees paid to them for the financial year 2018-19.
B. Percentage increase in reumeration of each director, Chief Financial Officer and Company Secretary in the financial year 2018-19
are as follows:
name of director
designation
Remuneration (in `)
Increase in %
Mr. Dhirendra Swarup
Non Executive Independent Director
Mr. Rakesh Sood
Non Executive Independent Director
Mr. Sunil Arjan Lulla
Executive Vice Chairman & Managing
Director
2018-19
5,655,000
3,207,500
2017-18
5,556,209
3,577,113
48,008,808
43,757,064
1.78
(10.33)
9.72
Mr. Kishore Arjan Lulla
Executive Director
14,070,372
12,755,244
10.31
Mrs. Jyoti Deshpande
Non Executive Non Independent
Director
Mr. S. Lakshminarayanan
Non Executive Independent Director
Mr. Sunil Srivastav
Non Executive Independent Director
Mr. Farokh P Gandhi
Chief Financial Officer
Mr. Abhishekh Kanoi
Vice President - Company Secretary &
Compliance Officer
Note:
-
71,445,672
Refer Note 1
3,007,500
2,453,120
7,918,560
3,367,956
1,173,664
Refer Note 2
-
Refer Note 3
482,258
Refer Note 4
1,388,093
Refer Note 4
1. The designation of Mrs. Jyoti Deshpande has been changed from Executive Director to Non-Executive Non-Independent Director of the
Company w.e.f. 1 April 2018 and no remuneration was paid to Mrs. Jyoti Deshpande for financial year 2018-19.
2. Mr. S. Lakshminarayanan was appointed as an Non Executive Additional Independent Director on 14 November 2017.
3. Mr. Sunil Srivastav was appointed as an Non Executive Additional Independent Director on 23 May 2018.
4. Mr. Farokh P. Gandhi was appointed as Chief Financial Officer and Mr. Abhishekh Kanoi was appointed as VP-Company Secretary &
Compliance Officer w.e.f. 9 March 2018 and 15 December 2017 respectively
C. Percentage increase in the median remuneration of employees in the financial year 2018-19:
Particulars
Median Remuneration of all employees per annum
2018-19
amt in `
432,535
2017-18
amt in `
575,016
% Change
(24.78)
16
ANNuAL REPORT 2018-19
Directors’ report
d. number of permanent employees on the rolls of the Company as on 31 March 2019 :
As on 31 March 2019, the Company has 307 permanent employees on its payroll, as compared to 285 employees as at
31 March 2018.
E. Comparison of average percentile increase in salary of employees other than the key managerial personnel and the percentage
increase in the key managerial remuneration:
Particulars
Average salary of all employees (other than Key Managerial
Personnel)
2018-19
amt in `
2017-18
amt in `
% Change
34,188,873
33,260,958
2.79
F.
The key parameters for any variable component of Remuneration availed by the Directors are considered by the Board of Directors based on
the recommendation of the Nomination and Remuneration Committee as per the Remuneration Policy of the Company.
G. affirmation:
Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company hereby affirms
that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.
EROS IntERnatIOnal MEdIa lIMItEd 17
Corporate overview | ManageMent report | finanCial management
annexure d
FORM nO. MR-3
SECREtaRIal aUdIt REPORt
For the Financial Year Ended 31 March 2019
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Eros International Media limited
901/902, Supreme Chambers,
Off Veera Desai Road, Andheri West,
Mumbai - 400053
Maharashtra (India).
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Eros
International Media limited (hereinafter called the “Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis
for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also
the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report
that in our opinion, the Company has, during the audit period covering the financial year ended on 31 March 2019 (hereinafter called the ‘audit Period’)
complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to
the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended
on 31 March 2019 according to the provisions of:
(i)
The Companies Act, 2013 (the Act) and the Rules made thereunder;
(ii)
The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made there under;
(iii)
The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, and Overseas
Direct Investment (External Commercial Borrowing not applicable during the audit period);
(v)
The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI act’) :-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 notified on 11 September 2018 (not applicable to the
Company during the audit period);
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (not applicable to the Company
during the audit period);
(f)
The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the
Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (not applicable to the Company during the
audit period);
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 and The Securities and Exchange Board of India
(Buyback of Securities) Regulations, 2018 notified on 11 September 2018 (not applicable during the audit period).
We have also examined compliance with the applicable clauses of the following:
(i)
(ii)
Secretarial Standards issued by The Institute of Company Secretaries of India.
The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review, the Company has complied with the provisions of the SEBI Act, Rules, Regulations, Guidelines, Standards etc.
We further report that, having regard to the Compliance system prevailing in the Company and on examination of the relevant documents and records
in pursuance thereof on test check basis, the Company has complied with following specific laws to the extent applicable
1.
The Cinematograph Act, 1952
2.
The West Bengal (Compulsory Censorship of Film Publicity Materials) Act, 1974.
18
ANNuAL REPORT 2018-19
Directors’ report We further report that
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent
Directors. The composition of the Board of Directors during the period under review was in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days
in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for
meaningful participation at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out either unanimously as recorded in the minutes of the meetings of the
Board of Directors or Committee of the Board, as the case may be.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to
monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Company has issued and allotted 5,36,263 Equity shares having face value of
` 10/- each aggregating to ` 53,62,630/- under (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999
and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
For Makarand M. Joshi & Co.
Company Secretaries
Makarand Joshi
Partner
FCS No. 5533
CP No. 9662
Place: Mumbai
Date: 23 May 2019
*This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this Report.
annexure a
To,
The Members,
Eros International Media limited
901/902, Supreme Chambers,
Off Veera Desai Road, Andheri West,
Mumbai - 400053
Maharashtra (India).
Our report of even date is to be read along with this Letter.
1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these
secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents
of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that
the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Where ever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of
events etc.
5.
6.
The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our
examination was limited to the verification of procedures on test basis.
The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the
management has conducted the affairs of the Company.
For Makarand M. Joshi & Co.
Company Secretaries
Makarand Joshi
Partner
FCS No. 5533
CP No. 9662
Place: Mumbai
Date: 23 May 2019
EROS IntERnatIOnal MEdIa lIMItEd 19
Corporate overview | ManageMent report | finanCial management
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20
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Directors’ report
annexure F
Form no. aOC-2
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of
Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto
1. details of contracts or arrangements or transactions not at arm’s length basis :
(a)
(b)
Name(s) of the related party and nature of relationship
Nature of contracts/arrangements/transactions
(c)
Duration of the contracts/arrangements/transactions
(d)
(e)
(f)
(g)
(h)
Salient terms of the contracts or arrangements or transactions including the value, if any
Justification for entering into such contracts or arrangements or transactions
Date(s) of approval by the Board
Amount paid as advances, if any
Date on which the special resolution was passed in general meeting as required under first proviso to Section 188
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2. details of material contracts or arrangement or transactions at arm’s length basis exceeding 10% of annual Consolidated turnover.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
name(s) of the related party
Nature of relationship
Nature of contracts/arrangements/transactions
Duration of the contracts /arrangements/transactions
Salient terms of the contracts or arrangements or transactions including the
value, if any:
Date(s) of approval by the Board, if any:
Amount ` lakhs
Eros World Wide FZ llC
Eros digital FZ llC
Holding Company
Fellow Subsidiary
Sale of film right, DVD/
VCD, Reimbursement of
expense
Revenue Attributable
and Reimbursement
of expense
Not Applicable
Not Applicable
23 May 18
18,236
Not Applicable
Not Applicable
23 May 18
19,138
EROS IntERnatIOnal MEdIa lIMItEd 21
Corporate overview | ManageMent report | finanCial management
annexure G
Form no. MGt-9
EXtRaCt OF annUal REtURn
as on the financial year ended on 31 March 2019
[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies
(Management and Administration) Rules, 2014]
I. REGIStRatIOn and OtHER dEtaIlS:
i.
ii.
iii.
iv.
v.
CIN No.
Registration Date
L99999MH1994PLC080502
19 August 1994
Name of the Company
Eros International Media Limited
Category/Sub-Category of the Company
Public Company Limited by Shares
Address of the Registered office and contact
Details
201, Kailash Plaza, Opp. Laxmi Industrial Estate, Off. Andheri Link Road, Andheri West,
Mumbai - 400053, Maharashtra (India).
Tel No: +91 22 6602 1500 | Fax: +91 22 6602 1540
Email : compliance.officer@erosintl.com
vi. Whether listed company Yes/ No
Yes
vii. Name, Address and Contact details of Registrar
Link Intime India Private Limited
and Transfer Agent, if any
CIN: u67190MH1999PTC118368
C 101, 247 Park, LBS Marg, Vikhroli West, Mumbai 400 083, Maharashtra (India).
Tel: +91 22 4918 6270 | Fax: +91 22 4918 6060;
E-mail: rnt.helpdesk@linkintime.co.in & mumbai@linkintime.co.in
Website: www.linkintime.co.in
II. PRInCIPal BUSInESS aCtIVItIES OF tHE COMPanY:
All the business activities contributing 10 % or more of the total turnover of the Company are as under:-
Sr.
no.
name and description of main
products/services
1
Media and Entertainment Industry
nIC Code of the Product/ service
% to total turnover of the
company
59131
100
* As per National Industrial Classification, 2008 issued by Central Statistical Organisation, Ministry of Statistics and Programme Implementation.
III. PaRtICUlaRS OF HOldInG, SUBSIdIaRY and aSSOCIatE COMPanIES:
Sr.
no.
1
2
3
4
5
naME and addRESS OF tHE COMPanY
CIn/Gln/llPIn
Eros International Plc, Isle of Man
Address: First Names House, Victoria Road,
Douglas, Isle of Man IM2 4DF British Isles
007466V
Holding/
Subsidiary/
associate
ultimate
Holding
% of shares
held*
applicable
Section
100.00
2(46)
Eros Worldwide FZ LLC
Address: 3902 Tower A, Business Central
Towers, Dubai Internet City, Sheikh Zayed Road,
PO 502501, Dubai, united Arab Emirates
Eros International Films Private Limited
Address: 201, Kailash Plaza, 2nd Floor, Plot
No. A-12, Off New Link Road, Andheri West,
Mumbai- 400 053, Maharashtra (India)
Copsale Limited (Isle of Man)
Address: Offices of Ansbacher (BVI) Limited,
P.O Box 659, Road Town, Tortola,
British Virgin Islands
Big Screen Entertainment Private Limited
Address: B-301-302, Brook Hill Tower,
3rd Cross Lane, Lokhandwala Complex,
Andheri West, Mumbai - 400 053,
Maharashtra (India)
30295
Holding
39.66
2(46)
u92113MH1994PTC080423
Subsidiary
100.00
2(87)
269307
Subsidiary
100.00
2(87)
u92110MH2005PTC156504
Subsidiary
64.00
2(87)
22
ANNuAL REPORT 2018-19
Directors’ report
Sr.
no.
6
7
8
9
10
11
12
13
naME and addRESS OF tHE COMPanY
CIn/Gln/llPIn
Holding/
Subsidiary/
associate
% of shares
held*
applicable
Section
EyeQube Studios Private Limited Address: 201,
Kailash Plaza, 2nd Floor,
Plot No. 12, Off New Link Road, Andheri West,
Mumbai- 400 053, Maharashtra (India)
EM Publishing Private Limited
Address: 201, Kailash Plaza, 2nd Floor,
Plot No. 12, Off New Link Road, Andheri West,
Mumbai- 400 053, Maharashtra (India)
Eros Animation Private Limited
Address: 201, Kailash Plaza, 2nd Floor,
Plot No. 12, Off New Link Road, Andheri West,
Mumbai- 400 053, Maharashtra (India)
Digicine Pte. Limited
Address: 9 Raffles Place, #27-00, Repubic
Plaza, Singapore - 048619
Colour Yellow Productions Private Limited
Address: G-001, Plot No B-53, Indus House,
V P Road, Off. New Link Road, Near Monginis
Cake Factory, Andheri (West) Mumbai – 400053,
Maharashtra (India)
universal Power Systems Private Limited
Address: Gee Gee Plaza, Flat No. 20,
3rd Floor, No.1, Wheatcrofts Road,
Nungambakkam-600034, Tamil Nadu (India)
Eros International Distribution LLP
Address: 201, Kailash Plaza, Plot No. A-12,
Opp Laxmi Industrial Estate, Andheri West,
Mumbai – 400 053, Maharashtra (India)
Reliance Eros Productions LLP
Address: 9th Floor, Maker Chamber IV,
222 Nariman Point, Mumbai- 400021,
Maharashtra (India)
u92120MH2007PTC175027
Subsidiary
100.00
2(87)
u92140MH2008PTC178628
Subsidiary
100.00
2(87)
u92100MH2008PTC186402
Subsidiary
100.00
2(87)
201207959W
Subsidiary
100.00
2(87)
u92412MH2013PTC248167
Subsidiary
50.00
2(87)
u33111TN1984PTC010826
Subsidiary
100.00
2(87)
AAF-3133
Subsidiary
99.80
2(87)
AAM-7521
Subsidiary
50.00
2(87)
*Representing aggregate % of shares held by the Company and / or its subsidiaries.
IV. SHaRE HOldInG PattERn (Equity Share Capital Breakup as percentage of total Equity)
(i) Category-wise Share Holding as on 31 March 2019
Sr.
no.
Category of
Shareholders
no. of Shares held at the beginning of the year
i.e. 1 april 2018
no. of Shares held at the end of the year
i.e. 31 March 2019
% Change
during the
year
demat
Physical
total % of total
Shares
demat
Physical
total % of total
Shares
(a) PROMOtER and PROMOtER GROUP
(1)
(a)
IndIan
Individual /HuF
(b) Central Government/
State Government(s)
7,000
0
0
0
7,000
0
0.01
0.00
7,000
0
0
0
7,000
0
(c) Bodies Corporate
21,700,000
0 21,700,000
22.85 21,700,000
0 21,700,000
(d) Financial Institutions /
Banks
(e) Others
0
0
0
0
0
0
0.00
0.00
0
0
0
0
0
0
Sub-total a (1)
21,707,000
0 21,707,000
22.86 21,707,000
0 21,707,000
0.01
0.00
22.72
0.00
0.00
22.73
0.00
0.00
(0.13)
0.00
0.00
(0.13)
EROS IntERnatIOnal MEdIa lIMItEd 23
Corporate overview | ManageMent report | finanCial management
Sr.
no.
Category of
Shareholders
no. of Shares held at the beginning of the year
i.e. 1 april 2018
no. of Shares held at the end of the year
i.e. 31 March 2019
% Change
during the
year
demat
Physical
total % of total
Shares
demat
Physical
total % of total
Shares
(2) FOREIGn
(a)
Individuals (NRIs/Foreign
Individuals)
0
0
0
0.00
0
0
0
0.00
0.00
(b) Bodies Corporate
35,409,440
0 35,409,440
37.28 37,877,302
0 37,877,302
(c)
Institutions
(d) Qualified Foreign
Investor
(e) Others
0
0
0
0
0
0
0
0
0
0.00
0.00
0.00
0
0
0
0
0
0
0
0
0
Sub-total a (2)
total a=a(1)+a(2)
35,409,440
57,116,440
0 35,409,440
37.28 37,877,302
0 57,116,440
60.14 59,584,302
0 37,877,302
0 59,584,302
39.66
0.00
0.00
0.00
39.66
62.39
2.38
0.00
0.00
0.00
2.38
2.25
(B) PUBlIC SHaREHOldInG
(1)
InStItUtIOnS
(a) Mutual Funds /uTI
0
(b) Financial Institutions /
455,464
Banks
(c) Central Government /
State Government(s)
(d) Venture Capital Funds
(e)
(f)
Insurance Companies
Foreign Portfolio
Investors
(g) Foreign Venture Capital
Investors
(h) Qualified Foreign
Investor
(i) Others (NBFC)
0
0
0
0
0
0
455,464
0
0
0
0.00
0.48
0.00
0.00
0.00
0
1,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4,732,345
0 4,732,345
4.98
5,859,792
0 5,859,792
0
0
0
0
0
0
0
0
0
0.00
0.00
0.00
0
0
0
0
0
0
0
0
0
0
1,000
0.00
0.00
0.00
(0.48)
0.00
0.00
0.00
0.00
6.14
0.00
0.00
1.16
0.00
0.00
0.00
0.00
0.00
6.14
0.00
0.68
Sub-total B (1)
5,187,809
0 5,187,809
5.46
5,860,792
0 5,860,792
(2) nOn-InStItUtIOnS
(a) Bodies Corporate
10,965,437
0 10,965,437
11.55
6,545,923
0 6,545,923
6.85
(4.70)
(b)
Individuals
(i)
(ii)
Individuals holding
nominal share capital
upto ` 1 lakh
Individuals holding
nominal share capital in
excess of ` 1 lakh
93,79,551
103 9,379,654
9.89 11,766,925
123 11,767,048
12.32
2.43
7,582,384
0 7,582,384
7.98
7,774,017
0 7,774,017
8.14
0.16
(c) NBFCs registered
0
0
0
0.00
148,185
0
148,185
0.16
0.16
with RBI
(d) Others
Clearing Members
2,245,595
0 2,245,595
2.36
2,019,350
Foreign Nationals
26
0
26
0.00
119
Hindu undivided Family
1,735,489
0 1,735,489
1.83
1,067,463
Non Resident Indians
NRI Non-Repatriation
Trusts
288,959
469,749
335
0
0
0
288959
469,749
335
0.3
0.49
0.00
560,107
180,499
335
0 2,019,350
0
119
0 1,067,463
0
0
0
560,107
180,499
335
Sub-total B(2)
32,667,525
103 32,667,628
34.4 30,062,923
123 30,063,046
total B=B(1) + B(2)
37,855,334
103 37,855,437
39.86 35,923,715
123 35,923,838
2.11
0.00
1.12
0.59
0.19
0.00
31.48
37.61
total (a+B)
94,971,774
103 94,971,877
100.00 95,508,017
123 95,508,140
100.00
(c) Shares held by
0
0
0
0.00
0
0
0
0.00
(0.25)
0.00
(0.71)
0.29
(0.30)
-
(2.92)
(2.25)
-
0.00
custodians for GDRs
and ADRs
GRand tOtal
(a+B+C)
24
ANNuAL REPORT 2018-19
94,971,774
103 94,971,877
100.00 95,508,017
123 95,508,140
100.00
0.00
Directors’ report
(ii) Shareholding of Promoters:
Shareholder’s name
Sr.
no.
Shareholding at the beginning of
the year
Shareholding at the end of the year
no. of
Shares
% of total
Shares
of the
company
% of Shares
Pledged/
encumbered
to total
shares
no. of
Shares
% of total
Shares
of the
Company
% of Shares
Pledged/
encumbered
to total
shares
% change
in share
holding
during the
year
1 Arjan Gobindram Lulla *
2 Krishika Sunil Lulla
3 Meena Arjan Lulla
4 Sunil Arjan Lulla
1,400
1,400
2,800
1,400
5 Eros Worldwide FZ LLC
35,409,440
6 Eros Digital Private Limited
21,700,000
total
57,116,440
0.00
0.00
0.00
0.00
37.28
22.85
60.13
0.00
0.00
0.00
0.00
1,400
1,400
2,800
1,400
21.26
37,877,302
0.00
21,700,000
21.26
59,584,302
0.00
0.00
0.00
0.00
39.66
22.72
62.38
0.00
0.00
0.00
0.00
29.78
0.00
29.78
0.00
0.00
0.00
0.00
2.38
(0.13)
2.25
Note: Eros Worldwide FZ LLC pledged 28,446,169 equity shares as on 31 March 2019. Out of total shares pledged, 18,813,303 equity shares
are transferred by way of pledge to pool account of the Lender, who hold the shares on behalf of Eros Worldwide FZ LLC.
* Mr. Arjan Gobindram Lulla ceased to be a promoter due to his sudden demise on 17 December 2018. Currently his shares are been held by his
legal heirs.
(iii) Change in Promoters’ Shareholding:
name of Promoter
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
no. of
Shares
% of total
Shares of the
Company
no. of
Shares
% of total
Shares of the
Company
1 arjan Gobindram lulla*
At the beginning of the year
Date wise Increase / Decrease in Promoters Share holding
during the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc)
At the End of the year
2 Krishika Sunil lulla
At the beginning of the year
Date wise Increase / Decrease in Promoters Share holding
during the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
At the End of the year
3 Meena arjan lulla
At the beginning of the year
Date wise Increase / Decrease in Promoters Share holding
during the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc)
At the End of the year
4 Sunil arjan lulla
At the beginning of the year
Date wise Increase / Decrease in Promoters Share holding
during the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc)
At the End of the year
1,400
-
0
1,400
-
0
2,800
-
0
1,400
-
0
0.00
-
1,400
-
0.00
- No Change
0.00
1,400
0.00
-
1,400
-
0.00
1,400
0.00
-
2,800
-
0.00
2,800
0.00
-
1,400
-
0.00
0.00
- No Change
0.00
0.00
- No Change
0.00
0.00
- No Change
0.00
1,400
0.00
EROS IntERnatIOnal MEdIa lIMItEd 25
Corporate overview | ManageMent report | finanCial management
name of Promoter
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
5 Eros Worldwide FZ llC
At the beginning of the year
Date wise Increase / Decrease in Promoters Share holding
during the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
no. of
Shares
% of total
Shares of the
Company
no. of
Shares
% of total
Shares of the
Company
35,409,440
37.28
35,409,440
37.28
30.10.2018
123,994
0.13
35,533,434
37.41
Purchase
31.10.2018
153,318
0.16
35,686,752
37.37
Purchase
01.11.2018
100,000
0.10
35,786,752
37.47
Purchase
02.11.2018
150,000
0.16
35,936,752
37.63
Purchase
05.11.2018
06.11.2018
07.11.2018
09.11.2018
12.11.2018
13.11.2018
16.11.2018
19.11.2018
20.11.2018
21.11.2018
29.11.2018
30.11.2019
03.12.2018
40,000
82,723
65,000
73,105
25,000
25,000
75,000
25,000
50,000
75,000
35,000
15,000
15,000
0.04
35,976,752
37.67
Purchase
0.09
36,059,475
37.76
Purchase
0.07
36,124,475
37.82
Purchase
0.08
36,197,580
37.90
Purchase
0.03
36,222,580
37.93
Purchase
0.03
36,247,580
37.95
Purchase
0.08
36,322,580
38.03
Purchase
0.03
36,347,580
38.06
Purchase
0.05
36,397,580
38.11
Purchase
0.08
36,472,580
38.19
Purchase
0.04
36,507,580
38.22
Purchase
0.02
36,522,580
38.24
Purchase
0.02
36,537,580
38.26
Purchase
07.12.2018
100,000
0.10
36,637,580
38.36
Purchase
10.12.2018
11.12.2018
12.12.2018
14.12.2018
26.12.2018
17.01.2019
21.01.2019
22.01.2019
23.01.2019
25.01.2019
28.01.2019
29.01.2019
30.01.2019
50,000
25,000
25,000
12,000
25,000
50,000
50,000
75,000
15,000
75,000
60,000
60,000
25000
0.05
36,687,580
38.41
Purchase
0.03
36,712,580
38.44
Purchase
0.03
36,737,580
38.47
Purchase
0.01
36,749,580
38.48
Purchase
0.03
36,774,580
38.50
Purchase
0.05
36,824,580
38.56
Purchase
0.05
36,874,580
38.61
Purchase
0.08
36,949,580
38.69
Purchase
0.02
36,964,580
38.70
Purchase
0.08
37,039,580
38.78
Purchase
0.06
37,099,580
38.84
Purchase
0.06
37,159,580
38.91
Purchase
0.03
37,184,580
38.93
Purchase
11.02.2019
100,000
0.10
37,284,580
39.04
Purchase
12.02.2019
180,000
0.19
37,464,580
39.23
Purchase
14.02.2019
50,000
0.05
37,514,580
39.28
Purchase
15.02.2019
150,000
0.16
37,664,580
39.44
Purchase
18.02.2019
12,722
0.01
37,677302
39.45
Purchase
06.03.2019
100,000
0.10
37,777,302
39.55
Purchase
22.03.2019
100,000
0.10
37,877,302
39.66
Purchase
At the End of the year
0
0.00
37,877,302
39.66
26
ANNuAL REPORT 2018-19
Directors’ report name of Promoter
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
6 Eros digital Private limited
At the beginning of the year
no. of
Shares
% of total
Shares of the
Company
no. of
Shares
% of total
Shares of the
Company
21,700,000
22.72
21,700,000
22.72
Date wise Increase / Decrease in Promoters Share holding
during the year specifying the reasons for increase/
decrease (e.g. allotment/transfer/bonus/sweat equity etc):
At the End of the year
-
0
-
-
- No Change
0.00
21,700,000
22.72
*Mr. Arjan Gobindram Lulla ceased to be a promoter due to his sudden demise on 17 December 2018. Currently his shares are been held by his
legal heirs.
(iv) Shareholding Pattern of top ten Shareholders (other than directors, Promoters and Holders of GdRs and adRs):
Shareholder’s name
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
no. of
shares
% of total
shares
of the
Company
no. of
shares
% of total
shares
of the
Company
1
Government Pension Fund Global
At the beginning of the year
1,113,149
1.17
1,113,149
1.17
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc)
26.10.2018
25.01.2019
01.02.2019
16,851
55,668
22,679
15.02.2019
1,61,653
22.02.2019
01.03.2019
15.03.2019
29.03.2019
At the End of the year (or on the date of separation, if
separated during the year)
2
Puran associates Private limited
63,619
17,381
42,438
26,562
0
0.02
0.06
0.02
0.17
0.07
0.02
0.04
0.03
0.00
1,130,000
1,185,668
1,208,347
1,370,000
1,433,619
1,451,000
1,493,438
1,520,000
1,520,000
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
1.18
1.24
1.27
1.43
1.50
1.52
1.56
1.59
1.59
At the beginning of the year
1,080,000
1.13
1,080,000
1.13
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
At the End of the year (or on the date of separation, if
separated during the year)
-
0
-
-
-
No Change
0.00
1,080,000
1.13
EROS IntERnatIOnal MEdIa lIMItEd 27
Corporate overview | ManageMent report | finanCial management
Shareholder’s name
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
3
Polus Global Fund
At the beginning of the year
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
no. of
shares
% of total
shares
of the
Company
no. of
shares
% of total
shares
of the
Company
0
0.00
0
0.00
20.04.2018
27.04.2018
18.05.2018
10,000
15,000
(1,056)
25.05.2018
(13,944)
22.06.2018
30.06.2018
10.08.2018
21.09.2018
29.09.2018
(462)
(9,538)
25,000
(5,000)
65,000
05.10.2018
163,292
12.10.2018
522,032
19.10.2018
158,848
At the End of the year (or on the date of separation, if
separated during the year)
0
4
Shilpa Stock Broker Private limited
0.01
0.02
(0.00)
(0.01)
(0.00)
(0.01)
0.03
(0.01)
0.07
0.17
0.55
0.17
0.00
10,000
25,000
23,944
10,000
9,538
0
25,000
20,000
85,000
248,292
770,324
929,172
929,172
0.01
0.03
0.03
0.01
0.01
0.00
0.03
0.02
0.09
0.26
0.81
0.97
0.97
At the beginning of the year
1,220,885
1.28
1,220,885
1.28
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
06.04.2018
(34,310)
13.04.2018
(1,26,705)
20.04.2018
27.04.2018
04.05.2018
11.05.2018
18.05.2018
25.05.2018
90,615
6,715
19,593
4,054
83,000
(2,425)
01.06.2018
(142,209)
08.06.2018
(66,931)
15.06.2018
22.06.2018
30.06.2018
06.07.2018
13.07.2018
20.07.2018
27.07.2018
03.08.2018
10.08.2018
17.08.2018
24.08.2018
(3,270)
(2,720)
(56,180)
(51,503)
(31,036)
(78,448)
52,830
27,502
8,014
(53,980)
(37,106)
(0.04)
(0.13)
0.09
0.01
0.02
0.00
0.09
(0.00)
(0.15)
(0.07)
(0.00)
(0.00)
(0.06)
(0.05)
(0.03)
(0.08)
0.06
0.03
0.01
(0.06)
(0.04)
1,186,575
1,059,870
1,150,485
1,157,200
1,176,793
1,180,847
1,263,847
1,261,422
1,119,213
1,052,282
1,049,012
1,046,292
990,112
938,609
907,573
829,125
881,955
909,457
917,471
863,491
826,385
1.24
1.11
1.20
1.21
1.23
1.24
1.32
1.32
1.17
1.10
1.10
1.10
1.04
0.98
0.95
0.87
0.92
0.95
0.96
0.90
0.87
Purchase
Purchase
Sale
Sale
Sale
Sale
Purchase
Sale
Purchase
Purchase
Purchase
Purchase
Sale
Sale
Purchase
Purchase
Purchase
Purchase
Purchase
Sale
Sale
Sale
Sale
Sale
Sale
Sale
Sale
Sale
Purchase
Purchase
Purchase
Sale
Sale
28
ANNuAL REPORT 2018-19
Directors’ report Shareholder’s name
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
% of total
shares
of the
Company
no. of
shares
% of total
shares
of the
Company
no. of
shares
(6,410)
35,476
909
31.08.2018
07.09.2018
14.09.2018
21.09.2018
169,746
29.09.2018
05.10.2018
8,261
73,356
12.10.2018
(152,014)
19.10.2018
(84,745)
26.10.2018
118,423
02.11.2018
(57,151)
09.11.2018
16.11.2018
23.11.2018
(386)
(2,685)
(9,797)
30.11.2018
(42,840)
07.12.2018
(120,469)
14.12.2018
21.12.2018
28.12.2018
31.12.2018
(21,799)
(35,713)
41,884
800
(0.01)
819,975
0.04
0.00
0.18
0.01
0.08
(0.16)
(0.09)
0.12
(0.06)
(0.00)
(0.00)
(0.01)
(0.04)
(0.13)
(0.02)
(0.04)
0.04
0.00
855,451
856,360
1,026,106
1,034,367
1,107,723
955,709
870,964
989,387
932,236
931,850
929,165
919,368
876,528
756,059
734,260
698,547
740,431
741,231
Sale
Purchase
Purchase
Purchase
Purchase
Purchase
Sale
Sale
Purchase
Sale
Sale
Sale
Sale
Sale
Sale
Sale
Sale
Purchase
Purchase
Sale
Purchase
Purchase
Sale
Purchase
Purchase
Purchase
Sale
Sale
Sale
Purchase
Sale
Sale
0.86
0.90
0.90
1.07
1.08
1.16
1.00
0.91
1.04
0.98
0.98
0.97
0.96
0.92
0.79
0.77
0.73
0.78
0.78
0.75
0.75
0.82
0.82
0.91
1.03
1.34
1.32
1.00
0.95
1.00
0.82
0.82
0.82
04.01.2019
(29,335)
(0.03)
711,896
11.01.2019
18.01.2019
25.01.2019
01.02.2019
7,909
63,159
(882)
82,350
08.02.2019
115,303
15.02.2019
300,168
22.02.2019
(18,591)
01.03.2019
(306,146)
15.03.2019
(45,945)
22.03.2019
44,146
29.03.2019
(170,878)
30.03.2019
(1,734)
At the End of the year (or on the date of separation, if
separated during the year)
0
5
VIC Enterprises Private limited
0.01
0.07
719,805
782,964
(0.00)
782,082
0.09
0.12
0.31
(0.02)
(0.32)
(0.05)
0.05
(0.18)
(0.00)
0.00
864,432
979,735
1,279,903
1,261,312
955,166
909,221
953,367
782,489
780,755
780,755
At the beginning of the year
780,000
0.82
780,000
0.82
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc)
At the End of the year (or on the date of separation, if
separated during the year)
-
0
-
-
-
No Change
0.00
780,000
0.82
EROS IntERnatIOnal MEdIa lIMItEd 29
Corporate overview | ManageMent report | finanCial management
Shareholder’s name
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
6
Rajesh M Sanghavi (HUF)
At the beginning of the year
719,548
0.75
719,548
0.75
no. of
shares
% of total
shares
of the
Company
no. of
shares
% of total
shares
of the
Company
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc)
27.07.2018
(468,388)
03.08.2018
(9,673)
10.08.2018
(107,620)
14.09.2018
(44,880)
21.09.2018
29.09.2018
(6,668)
50,120
05.10.2018
(132,439)
At the End of the year (or on the date of separation, if
separated during the year)
0
7
Chetan Jayantilal Shah
(0.49)
(0.01)
(0.11)
(0.05)
(0.01)
0.05
(0.14)
0.00
251,160
241,487
133,867
88,987
82,319
132,439
0
0
No Change
Sale
Sale
Sale
Sale
Sale
Purchase
Purchase
0.26
0.25
0.14
0.09
0.09
0.14
0.00
0.00
At the beginning of the year
350,000
0.37
350,000
0.37
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
09.11.2018
50,000
01.03.2019
100,000
At the End of the year (or on the date of separation, if
separated during the year)
0
8
danske Invest Sicav - SIF - Emerging and Frontier Markets SMId II
0.05
0.10
0.00
400,000
500,000
500,000
Purchase
Purchase
0.42
0.52
0.52
At the beginning of the year
361,997
0.38
361,997
0.38
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
20.04.2018
02.11.2018
20,000
20,000
At the End of the year (or on the date of separation, if
separated during the year)
9
Missouri local Government Employees Retirement System
At the beginning of the year
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
0
0
29.09.2018
55,409
05.10.2018
324,857
12.10.2018
73,803
15.02.2019
(71,174)
At the End of the year (or on the date of separation, if
separated during the year)
0
0.02
0.02
0.00
381,997
401,997
401,997
Purchase
Purchase
0.40
0.42
0.42
0.00
0
0.00
0.06
0.34
0.08
(0.07)
0.00
55,409
380,266
454,069
382,895
382,895
Purchase
Purchase
Purchase
Sale
0.06
0.40
0.48
0.40
0.40
30
ANNuAL REPORT 2018-19
Directors’ report Shareholder’s name
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
10
dimensional Emerging Markets Value Fund
At the beginning of the year
393,491
0.41
393,491
0.41
no. of
shares
% of total
shares
of the
Company
no. of
shares
% of total
shares
of the
Company
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
11.05.2018
(20,125)
18.05.2018
(7,185)
At the End of the year (or on the date of separation, if
separated during the year)
0
(v)
Shareholding of directors and Key Managerial Personnel:
(0.02)
(0.01)
0.00
373,366
366,181
366,181
Sale
Sale
0.39
0.38
0.38
For each of the directors and KMP
Sr.
no.
Shareholding at the
beginning of the year
Cumulative Shareholding
during the year
Reason
no. of
Shares
% of total
Shares of the
Company
no. of
Shares
% of total
Shares of the
Company
0.00
-
1,400
-
0.00
- No Change
1
Sunil arjan lulla
At the beginning of the year
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
At the End of the year
2
Jyoti deshpande
1,400
-
0
At the beginning of the year
360,000
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
At the End of the year
3
Farokh P. Gandhi
At the beginning of the year
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
At the End of the year
4 abhishekh Kanoi
-
0
43
-
0
0.00
1,400
0.38
-
360,000
-
0.00
360,000
0.00
-
0.00
43
-
43
At the beginning of the year
6,528
0.00
6,528
Date wise Increase / Decrease in Share holding during
the year specifying the reasons for increase / decrease
(e.g. allotment / transfer / bonus/ sweat equity etc):
At the End of the year
25.09.2018
23.11.2018
(6,528)
4,676
01.03.2019
(4,676)
0
0.00
0.00
0.00
0.00
0
4,676
0
0
Note: None of the Directors and Key Managerial Personnel hold any shares in the Company except mentioned above.
0.00
0.38
- No Change
0.38
0.00
- No Change
0.00
0.00
0.00
0.00
0.00
0.00
Sale
ESOP
Allotment
Sale
EROS IntERnatIOnal MEdIa lIMItEd 31
Corporate overview | ManageMent report | finanCial management
V.
IndEBtEdnESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(` in lakhs)
Secured loans
excluding deposits
Unsecured
loans
deposits
total Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
total (i+ii+iii)
Change in Indebtedness during the financial year
* Addition
* Reduction
net Change
Indebtedness at the end of the financial year
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
total (i+ii+iii)
60,700
16,047
-
278
-
16
60,978
16,063
36,812
(43,031)
(6,219)
6,331
(10,290)
(3,959)
54,463
12,077
161
135
-
27
54,759
12,104
VI. REMUnERatIOn OF dIRECtORS and KEY ManaGERIal PERSOnnEl
a. Remuneration to Managing director, Whole-time directors and/or Manager:
-
-
-
-
-
-
-
-
-
-
-
76,747
294
77,041
43,143
(53,321)
(10,178)
66,540
161
162
66,863
Particulars of Remuneration
Sr.
no.
1
Gross salary
Sunil arjan lulla
(Managing director)
Kishore arjan lulla
(Executive director)
(Amount in `)
total
(a) Salary as per provisions contained in section 17(1) of the Income-
46,769,208
14,030,772
60,799,980
tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
1,239,600
39,600
1,279,200
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961
2
3
4
Stock Option
Sweat Equity
Commission
- as % of profit
- others, specify
5
Others
total (a)
Ceiling as per the act
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
48,008,808
14,070,372
62,079,180
146,278,031
32
ANNuAL REPORT 2018-19
Directors’ report Particulars of Remuneration
name of directors
amount in (`)
B. Remuneration to other directors:
Sr.
no.
1.
Independent directors
Fees for attending Board/Committee Meetings
Commission payable for FY 2018-19
Others [Reimbursement of maintenance of Chairman’s office and expenses
incurred towards performance of duties as Chairman]
total (1)
2.
Other non-Executive non Independent directors
Fees for attending Board/Committee Meetings
Commission
Others, please specify
total (2)
total (B) = (1+2)
total Managerial Remuneration (a+B)
Overall Ceiling as per the act
Dhirendra Swarup
Rakesh Sood
S. Lakshminarayanan
Sunil Srivastav
Dhirendra Swarup
Rakesh Sood
S. Lakshminarayanan
Sunil Srivastav
Dhirendra Swarup
680,000
720,000
520,000
320,000
4,975,000
2,487,500
2,487,500
2,133,120
520,131
14,843,251
0
0
0
0
14,843,251
76,922,431
Sitting Fees paid is within the limits specified
under the Companies Act, 2013
C. Remuneration to Key Managerial Personnel other than Managing director, Whole-time directors and/or Manager:
Particulars of Remuneration
Key Managerial Personnel
Sr.
no.
(Amount in `)
total
1
Gross Salary
(a) Salary as per provisions contained in section 17(1) of
7,918,560
2,989,200
10,907,760
Farokh P. Gandhi
Chief Financial Officer
abhishekh Kanoi
VP-Company Secretary &
Compliance Officer
the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under section 17(3)
2
3
4
5
Income-tax Act, 1961
Stock Option
Sweat Equity
Commission
- as % of profit
- others, specify
Others
total
Ceiling as per the Act
Nil
Nil
Nil
Nil
Nil
Nil
Nil
7,918,560
378,756
Nil
Nil
Nil
Nil
Nil
Nil
3,367,956
378,756
Nil
Nil
Nil
Nil
Nil
Nil
11,286,516
Not Applicable
EROS IntERnatIOnal MEdIa lIMItEd 33
Corporate overview | ManageMent report | finanCial management
VII. PEnaltIES / PUnISHMEnt/ COMPOUndInG OF OFFEnCES:
type
Section of the
Companies act
Brief description
details of Penalty/
Punishment/
Compounding fees
imposed
authority [Rd/nClt/
COURt]
appeal made,
if any (give details)
a. COMPanY
Penalty
Punishment
Compounding
B. dIRECtORS
Penalty
Punishment
Compounding
C. OtHER OFFICERS In dEFaUlt
Penalty
Punishment
Compounding
NIL
NIL
NIL
34
ANNuAL REPORT 2018-19
Directors’ report annexure H
Corporate Social Responsibility
1. Brief outline of the Company’s
CSR policy
The Company’s CSR vision is to make concerted efforts towards promotion of education amongst
the underprivileged and women empowerment.
2. Overview of projects or programs
undertaken/ proposed to be
undertaken
3. Reference to the web-link to the CSR
policy and projects or programs
Besides this, the Company may also undertake other CSR activities listed in Schedule VII of the
Companies Act, 2013.
In accordance with the Company’s CSR Policy and its vision, the Company is proposed to
participate in CSR activities with “Arpan” the registered NGO which is engaged in Personal Safety
Education programme for dealing with child sexual abuse. It also focuses on creating awareness
and skill enhancement of adults like parents, teachers and institutional care takers who are primary
stakeholders and care givers in child’s life.
The details of CSR Policy are available on the website of the Company viz. www.erosplc.com.
4. Composition of the CSR Committee Members of the Committee:
• Mr. Dhirendra Swarup [Non-Executive Independent Director] (Chairman)
• Mr. Rakesh Sood [Non-Executive Independent Director]
• Mrs. Jyoti Deshpande [Non-Executive Non-Independent Director] (upto 28 June 2019)
• Mr. Kishore Lulla [Executive Director]
• Mr. Sunil Lulla [Executive Director]
5. average net Profit of the Company
Net Profit before Tax (NPBT)
for last three Financial Years
6. Prescribed CSR Expenditure (two
percent of the amount as in Item no.
5 above)
7. details of CSR spent during the
financial year
Particulars
2017-18
2016-17
2015-16
Average NPBT
2% of Average NPBT
` 4.22 Crores
` in Crores
197.43
236.94
199.24
211.20
4.22
a. total amount spent in FY 2017-18
` 22,70,000 (Rupees Twenty-Two lakhs Seventy Thousand Only)
b. amount unspent, if any
unspent CSR amount is ` 3,99,30,000 /- (Rupees Three Crores Ninety Nine lakhs Thirty Thousand
Only) in FY 2018-19.
c. Manner in which the amount spent during the financial year is detailed below:
1
Sr.
no.
2
CSR Project
or activity
identified
3
Sector in which
the project is
covered
4
Projects or
programs
(1) local area or
other
(2) Specify the
state and district
where projects
or programs was
undertaken
1
Personal Safety
Education
Programme in
Schools
Education
(Covered under
clause no. (ii) of
Schedule VII of
the Companies
Act, 2013)
Mumbai, Thane in
Maharashtra
` 15,00,000
5
amount outlay
(budget) project
or programs
wise
6
amount spent on
the projects or
programs
Sub-heads;
7
Cumulative
expenditure
upto the
reporting
period
(1) direct
expenditure
on projects or
programs
(2) Overheads
Direct expenditure
on program. Minimal
overheads (>10% of
overall budget)
` 15,00,000
8
amount spent
direct or
through
implementing
agency
Implementing
agency - ARPAN
NGO Registered
under Section
8 of the Indian
Companies Act.
EROS IntERnatIOnal MEdIa lIMItEd 35
Corporate overview | ManageMent report | finanCial management
1
Sr.
no.
2
CSR Project
or activity
identified
3
Sector in which
the project is
covered
4
Projects or
programs
(1) local area or
other
(2) Specify the
state and district
where projects
or programs was
undertaken
Baranagar in Kolkata,
West Bengal
` 2,70,000
5
amount outlay
(budget) project
or programs
wise
6
amount spent on
the projects or
programs
Sub-heads;
7
Cumulative
expenditure
upto the
reporting
period
(1) direct
expenditure
on projects or
programs
(2) Overheads
Direct expenditure
on program. Minimal
overheads (>10% of
overall budget)
` 2,70,000
Kerala
` 5,00,000
Direct expenditure on
program
` 5,00,000
2
3
“Gadadhar Sishu
Vikas Kendra”
for the education
expense of 20
poor children.
Education
(Covered under
clause no. (ii) of
Schedule VII of
the Companies
Act, 2013)
Towards grating
relief to families
and individuals
distressed by
unprecedented
flood havoc
Contribution
to the prime
minister's
national relief
fund (Covered
under clause no.
(viii) of Schedule
VII of the
Companies Act,
2013)
8
amount spent
direct or
through
implementing
agency
Directly –
Ramakrishna
Math, NGO
Registered
under Section
8 of the Indian
Companies Act.
Directly - Chief
Minister’s
Distress Relief
Fund Kerala.
Reason for not spending the amount of 2% of the average net profits of the last three financial years: The Company was required to
spend a sum of ` 4.22 Crores in the financial year 2018-19, being 2% of the average net profits of last 3 (three) years. However, the Company
during the financial year 2018-19 has spent ` 22.70 lakhs towards its CSR Expenses by way of contribution to NGO “Arpan”, Chief Minister’s
Distress Relief Fund, Kerala and charitable institution, Ramkrishna Math, Baranagar (West Bengal).
The Company is in the process of identifying appropriate institutions and will make up for the short spend in the current year.
8.
Statement by CSR Committee is stated below:
The Corporate Social Responsibility Committee hereby confirm that the implementation and monitoring of CSR Policy is in compliance with
CSR objectives and Policy of the Company.
Sunil arjan lulla
Executive Vice Chairman & Managing director
DIN: 00243191
Rakesh Sood
Chairman of CSR Committee
DIN: 07170411
Place: Mumbai
Date: 23 May 2019
36
ANNuAL REPORT 2018-19
Directors’ report
CORPORatE GOVERnanCE REPORt
tHE COMPanY’S PHIlOSOPHY On CORPORatE GOVERnanCE
The Company considers fair and transparent corporate governance
as one of its core management tenets. Corporate Governance may
be defined as a set of systems, policies, processes and principles
which ensures that a company is governed in the best interest of all
the stakeholders. It is the system by which companies are directed,
administered, controlled and managed. Good governance is about
promoting corporate fairness, transparency and accountability.
We strongly believe in the practice of conducting our business activities
in a fair, direct and completely transparent manner that will not only
benefit the Company but more importantly will ensure the highest level
of accountability and trust for all our stakeholders such as shareholders,
our employees and our partners. The timely disclosures, transparent
accounting policies and a strong and independent Board go a long way
in maintaining good corporate governance, preserving shareholders’
trust and maximizing long-term corporate value.
We, at Eros International, continuously strive at improving and adhering
to the good governance practice. The Company has adopted best
practices mandated in SEBI (Listing Obligations and Disclosure
Requirements) Regulation, 2015, as amended (hereinafter referred to as
the “SEBI listing Regulations”).
A report on compliance with the principles of Corporate Governance
as prescribed by SEBI in Chapter IV read with Schedule V of the SEBI
Listing Regulations is given below:
BOaRd OF dIRECtORS
a. Composition and Category of directors:
The Board of Directors along with its Committees provide
leadership and guidance to the Company’s management as also
direct, supervise and control the performance of the Company.
The Company has a balanced Board with combination of
Executive and Non-Executive Directors to ensure independent
functioning. As at 31 March 2019, the Board of Directors of the
Company consists of Seven (7) Directors, out of which Five (5) are
Non-Executive Directors including a Non Independent Woman
Director and Two (2) are Executive Directors, comprising of experts
from various fields/professions. The Chairman of the Board,
Mr. Dhirendra Swarup, is a Non-Executive and Independent
Director and is not related to promoters of the Company or any
person occupying the position one level below the Board. The
present composition of the Board of Directors of the Company
is in accordance with the SEBI Listing Regulations and the
Companies Act, 2013 (the “Act”) read with applicable Rules
made thereunder.
name of the director
directors
Identification
no. (dIn)
Category
designation
Mr. Dhirendra Swarup
02878434
Non-Executive & Independent Director
Chairman
Mr. Rakesh Sood
Mr. Sunil Arjan Lulla
Mr. Kishore Arjan Lulla
Mrs. Jyoti Deshpande1
07170411
Non-Executive & Independent Director
Director
00243191
Promoter & Executive Director
Executive Vice Chairman & Managing Director
02303295
Promoter & Executive Director
Director
02303283
Non-Executive & Non- Independent Director Director
Mr. Subramaniam Lakshminarayanan
07972480
Non-Executive & Independent Director
Mr. Sunil Srivastav
00237561
Non-Executive & Independent Director
Director
Director
There are no Institutional Nominee Directors on the Board. The
Company has in place the Succession Policy for appointments at
the Board and to Senior Management level.
Independent directors
The Independent Directors of the Company are Non-Executive
Directors as defined under Section 149(6) of the Act read with
Regulation 16(1)(b) of the SEBI Listing Regulations. Independent
Directors of the Company provide appropriate annual certifications
to the Board confirming satisfaction of the conditions of their
being independent as laid down in Section 149(6) of the Act
and Regulation 16(1)(b) of the SEBI Listing Regulations. They
possess rich and varied experience with skills in critical areas like
governance, finance, entrepreneurship, general management etc
As required by Regulation 46 of the SEBI Listing Regulations, the
terms and conditions of appointment of Independent Directors
are listed down in the draft letter of appointment, available on
the Company’s website at www.erosplc.com. Each Independent
director has been issued formal letter of appointment.
Independent directors Meeting
During the year under review, a separate meeting of the Independent
Directors was held on 27 September 2018, without the attendance
of Non-Independent Directors and Management Personnel.
Various matters were discussed by the Independent Directors at
the said meeting, including, inter alia, matters as prescribed in the
Schedule IV of the Act and SEBI Listing Regulations, viz. review of
the performance of Non-Independent Directors and the Board as
1 Mrs. Jyoti Deshpande ceased to be a Director of the Company with effect from 28 June 2019.
whole, review of the performance of the Chairman, assessed the
quality, quantity and timeliness of flow of information between the
Company’s management and the Board, that is necessary for the
Board to effectively and reasonably perform their duties. All the
Independent Directors attended the said Meeting.
Re-appointment of directors
Mr. Kishore Arjan Lulla, being eligible for re-appointment, has
offered himself for re-appointment, as his office being longest is
liable to retire by rotation at the 25th Annual General Meeting of
the Company, as per Section 152(6) of the Act and applicable
Rules thereto.
Mr. Dhirendra Swarup was appointed as a Non-Executive
Independent Director for a first term of 5 (five) years which expires at
the ensuing Annual General Meeting of the Company. Accordingly,
the Board of Directors, on recommendation of Nomination and
Remuneration Committee has recommended re-appointment of
Mr. Dhirendra Swarup as a Non- Executive Independent Director of
the Company for a second term of 5 (five) consecutive years from
the conclusion of this Annual General Meeting to the conclusion
of the Annual General Meeting of the Company to be held in the
Calendar Year 2024.
As required under SEBI Listing Regulation, brief resume of
Mr. Kishore Arjan Lulla, seeking re-appointment as Executive
Director and Mr. Dhirendra Swarup, seeking re-appointment
as Non-Executive Independent Director at the ensuing Annual
General Meeting are stated at length in the Notice convening 25th
Annual General Meeting.
EROS IntERnatIOnal MEdIa lIMItEd 37
Corporate overview | ManageMent report | finanCial management
b. attendance of directors and number of other directorship:
Details of Membership and Attendance of each Director at the Meeting of Board of Directors held during the financial year under review
and the last Annual General Meeting and the number of other Directorships and Chairmanship/Membership of Board Committees as on
31 March 2019 are as follows:
name of director
directors
Identification
no. (dIn)
Mr. Dhirendra Swarup
Mr. Rakesh Sood
Mr. Sunil Arjan Lulla
Mr. Kishore Arjan Lulla
Mrs. Jyoti Deshpande2
Mr. Subramaniam Lakshminarayanan
Mr. Sunil Srivastav3
02878434
07170411
00243191
02303295
02303283
07972480
00237561
attendance
Board
Meeting
4
4
4
1
3
4
3
last
annual
General
Meeting
Yes
Yes
Yes
No
No
Yes
No
Position on the Board of other companies as on
31 March 2019
Committee
Membership**
Committee
Chairmanship**
directorship*
3
2
7
0
3
0
2
3
2
1
0
0
0
0
2
1
0
0
0
0
0
note:
* Only Public limited companies, (both listed and unlisted) are included in other directorships. Directorships in all other companies including private
limited companies (which are not the subsidiary of Public Company), foreign companies and companies under Section 8 of the Act are excluded.
** Chairmanship/Membership of the Audit Committee and the Stakeholders’ Relationship Committee are considered for the purpose of committee
positions in all public companies, whether listed or not as per SEBI Listing Regulations and it also includes the committees in which a Director holds
position as a Chairman.
c. number of directorship(s)/ Chairmanship(s)/ Membership(s):
None of the Director of the Company holds directorships in
more than Ten (10) public companies. Further, none of them is a
member of more than Ten (10) committees or chairman of more
than Five (5) committees across all the public companies in which
he/she is a director.
Further, none of the Independent Director of the Company is
acting as an Independent Director in more than Seven (7) listed
companies or acting as whole-time director in more than Three (3)
listed companies.
Necessary disclosures regarding directorships and committee
positions in other public companies as on 31 March 2019 have
been made by all the Directors of the Company.
d. number of Board Meetings:
The Board met Four (4) times during the financial year ended
31 March 2019, i.e. on 23 May 2018; 13 August 2018;
26 October 2018 and 7 February 2019. The maximum time
gap between Two (2) meetings of the Board did not exceed
One Hundred and Twenty (120) days as stipulated under the
Regulation 17(2) of the SEBI Listing Regulations. The necessary
quorum was present for all the meetings.
The Board meets at regular intervals to discuss and decide
on business policy of the Company and strategy apart from
other Board business. The Board/Committee Meetings are
pre-scheduled and tentative dates of the Board and Committee
Meetings are informed well in advance to facilitate Directors to
plan their schedule. The agenda is circulated well in advance
to the Board Members, along with comprehensive background
information on the agenda items to enable the Board to take
an informed decision. The agenda and related information are
circulated to the Board/Committee by uploading the same on
e-meeting application, which is accessible to all the Members of
the Board and its Committee on their respective i-pads. Notice,
Agendas and Minutes of the meeting are all circulated through
electronic means. Detailed presentations and notes are laid
before each meeting, by the management and senior executives
of the Company, to apprise the Board on overall performance
on quarterly basis. Additional items of the agenda are permitted
with the permission of the Chairman and with the consent of
all the Directors present at the meeting. Senior Executives/
Management of the Company are invited to attend the Meetings
of the Board and Committees, to make presentations and
provide clarifications as and when required.
In accordance with the Act read with the Companies (Meetings
of Board and its Powers) Rules, 2014 and in accordance with
Secretarial Standard 1 issued by the Institute of Company
Secretaries of India, the Company provides an option to
its Directors to participate at each of the Board Meetings/
Committee Meetings through video conference except in
respect of those agenda items wherein transactions are not
permitted to be carried out by way of video conference. As per
Secretarial Standards, draft minutes and signed minutes of the
Meeting are circulated within the prescribed time.
The Board of Directors has complete access to the information
within the Company.
e. details of Other directorships:
Details of the directorships of the Company’s Directors in other
listed companies as on 31 March 2019 were as under:
name of directors
Mr. Dhirendra Swarup
Mr. Sunil Srivastav
name of the listed Company
Category of directorship
Berger Paints India Limited (subsequently resigned)
Non-Executive - Independent Director
Star Paper Mills Limited
Paisalo Digital Limited
Non-Executive - Independent Director
Non-Executive - Independent Director
Mrs. Jyoti Deshpande
Network18 Media & Investments Limited
Non-Executive - Non-Independent Director
TV18 Broadcast Limited
Balaji Telefilms Limited
Non-Executive - Non-Independent Director
Non-Executive - Non-Independent Director
None of the Directors except above are directors in listed entities.
2 Mrs. Jyoti Deshpande ceased to be a Director of the Company with effect from 28 June 2019.
3 Mr. Sunil Srivastav was appointed as a Non-Executive Additional Independent Director on the Board w.e.f. 23 May 2018.
38
ANNuAL REPORT 2018-19
CORPORATE GOVERNANCE REPORT
f.
disclosure of Relationship between directors:
Mr. Kishore Arjan Lulla, Executive Director and Mr. Sunil Arjan Lulla,
Executive Vice Chairman & Managing Director of the Company, are
brothers.
Other than the aforesaid, there are no inter-se relationships
amongst the Directors.
g. number of Shares held by non-Executive directors:
As on 31 March 2019, Except Mrs. Jyoti Deshpande holding
3,60,000 equity shares in the Company none of the Non-Executive
Directors holds any equity shares in the Company.
Sr.
no.
1
2
3
4
5
Essential Skills and description
in
formulating Corporate
Leadership experience of running large
enterprise
Experience
Strategies
Financial Expertise
Governance, Compliance and Regulatory
Knowledge and expertise of Trade and
Economic Policies
Whether available
with the Board
(Yes/no)
Yes
Yes
Yes
Yes
Yes
h.
Familiarisation Programme for Independent directors:
COMMIttEES OF tHE BOaRd
Independent Directors
is
for
Familiarisation Programme
designed with an aim to make the Independent Directors aware
about their roles, responsibilities and liabilities as per the Act,
SEBI Listing Regulations and other applicable laws and to get
better understanding about the Company, nature of industry
in which it operates and environment in which it functions,
business model, long term/short term/strategic plans etc.
As a part of familiarisation programme, the Company makes
presentations to the Board Members, inter alia, covering
business environment, business strategies, operations review,
quarterly and annual results, review of Internal Audit Report
and action taken, statutory compliance, risk management,
operations of subsidiaries, etc.
The relevant policies of the Company including the Code of
Conduct for Board Members and Senior Management Personnel
and the Code of Conduct to regulate, monitor and report trading
by Insiders etc. are circulated to the Directors and uploaded on
e-meeting application on i-pads for easy access.
The familiarisation programme and necessary disclosures to be
made in accordance with SEBI Listing Regulations are made on
the website of the Company at www.erosplc.com.
i.
Skills/Expertise/Competence Identified by the Board of
directors:
The Board comprises of the qualified members who bring in the
required skills, competence and expertise to enable then through
effectively contribute in deliberations at Board and Committee
Meetings. The below matrix summarises a mix of skills, expertise
and competences expected to be possessed by our individual
Directors which are key to corporate governance and board
effectiveness.
The Board of Directors, at its various meetings, has constituted /
re-constituted various committees to discuss upon the delegated work
as per their respective charters. The Board supervises the execution
of its responsibilities by the Committees and is responsible for their
action. Minutes of all the Committee Meetings are placed before the
Board for noting.
Following Committee(s) are constituted for better and focused attention
on various affairs of the Company:
•
•
•
•
•
Audit Committee
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Management Committee
aUdIt COMMIttEE
An Audit Committee, duly constituted by the Board of Directors has
a well-defined composition of members, terms of reference, powers,
role and responsibilities in accordance with Section 177 of the Act and
applicable Rules thereto and in accordance with Regulation 18 of SEBI
Listing Regulations.
As on 31 March 2019, the Audit Committee comprised of Five (5)
Members of whom Four (4) are Non-Executive Independent Directors,
all of whom are financially literate and possesses accounting and related
financial management expertise. The Chairman of the Audit Committee
is a Non- Executive Independent Director and he had attended last year’s
Annual General Meeting.
The detailed terms of reference of Audit Committee along with working
procedure, charter and constitution are uploaded on website of the
Company at www.erosplc.com.
Meeting details:
During the year under review, Audit Committee met Four (4) times in a year viz. on 23 May 2018; 13 August 2018; 26 October 2018 and
7 February 2019. The maximum time gap between Two (2) Committee Meetings did not exceed One Hundred and Twenty (120) days as stipulated
under the Regulation 18(2) of SEBI Listing Regulations. The necessary quorum was present for all the Meetings.
Composition of the Audit Committee and the attendance of each Member at the said Committee Meetings are set out in following table:
name of Committee Member
directors Identification
no. (dIn)
designation in
the Committee
Category
number of
Meetings attended
Mr. Subramaniam Lakshminarayanan4
Mr. Dhirendra Swarup5
Mr. Rakesh Sood
Mr. Sunil Arjan Lulla
07972480
02878434
07170411
00243191
Chairman
Non-Executive Independent Director
Member
Non-Executive Independent Director
Member
Non-Executive Independent Director
Member
Executive Vice Chairman &
Managing Director
Mr. Sunil Srivastav6
00237561
Member
Non-Executive Independent Director
4
4
4
4
2
The Company Secretary and Compliance Officer acts as the Secretary to the Committee. The Chief Financial Officer of the Company is the permanent
invitee to the Committee meetings. The Audit Committee also invites senior executives/management including the representatives of the statutory
auditors and internal auditors at its meetings.
4 Mr. Subramaniam Lakshminarayanan was appointed as a Chairman of the Audit Committee w.e.f. 26 October 2018.
5 Mr. Dhirendra Swarup ceased to be a Chairman of the Audit Committee w.e.f. 26 October 2018.
6
Mr. Sunil Srivastav was appointed as a Member of Audit Committee w.e.f. 26 October 2018 and two meetings were held since his appointment.
EROS IntERnatIOnal MEdIa lIMItEd 39
Corporate overview | ManageMent report | finanCial management
nOMInatIOn and REMUnERatIOn COMMIttEE
The Nomination and Remuneration Committee is constituted in
accordance with Section 178 of the Act and applicable Rules thereto
and in accordance with Regulation 19 of SEBI Listing Regulations. As on
31 March 2019, the Nomination and Remuneration Committee
comprised of Three (3) Members, all of whom are Non-Executive
Independent Directors. The Chairman of
the Nomination and
Remuneration Committee is a Non- Executive Independent Director and
he was present at last year’s Annual General Meeting to address the
queries of the shareholders.
The detailed terms of reference of Nomination and Remuneration
Committee along with working procedure, charter and constitution are
uploaded on website of the Company at www.erosplc.com.
Meeting details:
During the year under review, Nomination and Remuneration Committee
met Four (4) times in a year viz. on 23 May 2018; 13 August 2018;
26 October 2018 and 7 February 2019. The necessary quorum was
present at all the meetings.
Composition of the Nomination and Remuneration Committee and the
attendance of each member at the said Committee Meetings are set out
in following table:
name of Committee Member
directors
Identification no.
(dIn)
designation
in the
Committee
Category
Mr. Rakesh Sood
Mr. Dhirendra Swarup
Mr. Subramaniam Lakshminarayanan
07170411
02878434
07972480
Chairman
Non-Executive Independent Director
Member
Non-Executive Independent Director
Member
Non-Executive Independent Director
number of
Meetings
attended
4
4
4
was also evaluated on the key aspects of his role and responsibilities.
The performance evaluation of an Independent Directors was based
on the criteria viz. attendance at Board and Committee Meetings,
skill, experience, ability to challenge views of others in a constructive
manner, knowledge acquired with regard to the Company’s business,
understanding of industry and global trends etc.
REMUnERatIOn OF dIRECtORS
non – Executive directors Compensation and disclosures:
The Non-Executive Independent Directors are paid compensation in the
following manner:
• Sitting Fees of ` 40,000/- for attending each Board and Committee
Meeting.
• Commission, as decided by the Board, not exceeding 1% of the Net
Profit of the Company is paid in accordance with the Act.
• None of the Non-Executive Independent Directors have any pecuniary
relationship with the Company.
• None of the Non-Executive Independent Directors holds any equity
shares of the Company.
• None of the Non-Executive
Independent Directors hold any
convertible instruments in the Company.
• Payment of reimbursement of expenses incurred by Non-Executive
Independent Directors for participation in the Board and other
meetings of the Company.
Maintenance of Chairman’s Office
The Company maintains the office of Chairman, being Non-Executive,
and reimburses all the expenses incurred by him towards performance of
his duties, up to the limit as decided by the Board of Directors.
Details of remuneration paid to all the Directors for the financial year
2018-19 are as follows:
The Company Secretary and Compliance Officer acts as the Secretary
to the Committee. The Chief Financial Officer of the Company is the
permanent invitee to the Committee Meetings.
Evaluation of performance of the Board,
and directors:
its Committees
The Company has formulated a Policy on Board Evaluation
in accordance with the applicable provisions of SEBI Listing
Regulations and the Act. An annual performance evaluation
of the Board its Committees and individual directors (including
independent
independent directors and Chairperson)
and
the
fair manner was carried out
Company’s Board Evaluation Policy
the financial year
ended 31 March 2019.
in accordance with
in an
for
The performance of the Board and individual directors was evaluated
by the Board seeking inputs from all the Directors. The performance of
the Committees was evaluated by the Board seeking inputs from the
Committee Members. The Nomination and Remuneration Committee
reviewed the performance of the individual directors. This was followed
by a Board Meeting that discussed the performance of the Board, its
Committees and individual directors. A separate meeting of Independent
Directors was also held to review the performance of Non-Independent
Directors, performance of the Board as a whole and performance of the
Chairman of the Company.
The criteria for performance evaluation of the Board included aspects
like Board composition and structure, effectiveness of Board processes,
information and functioning etc. The criteria for performance evaluation
of Committees of the Board included aspects like composition of
committees, effectiveness of Committee Meetings etc. The criteria for
performance evaluation of the individual directors included aspects on
contribution to the Board and Committee Meetings like preparedness
on the issues to be discussed, meaningful and constructive contribution
and inputs in meetings etc. In addition, performance of the Chairman
40
ANNuAL REPORT 2018-19
CORPORATE GOVERNANCE REPORT name of director
Salary
Sr.
no.
Benefits /
Perquisites
Bonus
1 Mr. Dhirendra Swarup
2 Mr. Rakesh Sood
3 Mr. Subramaniam
Lakshminarayanan
-
-
-
-
-
-
4 Mr. Sunil Arjan Lulla
4,67,69,208
12,39,600
5 Mr. Kishore Arjan Lulla
1,40,30,772
39,600
6 Mrs. Jyoti Deshpande
7 Mr. Sunil Srivastav
-
-
-
-
-
-
-
-
-
-
Sitting
Fees
(paid)
(1)
Commission
paid for FY
2017-18
Commission
(payable for
2018-19)
total
(1+2)
(2)
6,80,000
48,76,209
49,75,000
55,56,209
7,20,000
27,77,113
24,87,500
34,97,113
5,20,000
9,33,664
24,87,500
14,53,664
(Amount in `)
Holding of Equity
Shares / stock
options of the
Company as on
31 March 2019
Nil
Nil
Nil
-
-
-
3,20,000
-
-
-
-
-
-
-
1,400
Equity Shares
Nil
-
3,60,000
Equity Shares
21,33,120
3,20,000
Nil
Note: On demise of Mr. Naresh Chandra he ceased to be a director of the Company w.e.f. 9 July 2017. The Commission paid to Late Mr. Naresh Chandra for FY 2017-18
is ` 13,63,014/-
StaKEHOldERS RElatIOnSHIP COMMIttEE
The Stakeholders Relationship Committee is constituted in accordance
with Section 178 of the Act and applicable Rules thereto and in
accordance with Regulation 20 of SEBI Listing Regulations. As on
31 March 2019, the Stakeholders Relationship Committee comprised
of Four (4) Members, majority of whom are Non-Executive Independent
Directors. The Chairman of the Stakeholders Relationship Committee is
a Non- Executive Independent Director and he was present at last year’s
Annual General Meeting to address the queries of the shareholders.
The detailed terms of reference of Stakeholders Relationship Committee
along with working procedure, charter and constitution are uploaded on
website of the Company at www.erosplc.com.
Meeting details:
During the year under review, Stakeholders Relationship Committee
met Four (4) times in a year viz. on 23 May 2018; 13 August 2018;
26 October 2018 and 7 February 2019. The necessary quorum was
present at all the Meetings.
Composition of the Stakeholders Relationship Committee and the
attendance of each member at the said Committee Meetings are set out
in the following table:
name of Committee
Member
directors Identification
no. (dIn)
designation in
the Committee
Category
number of Meetings
attended
Mr. Sunil Srivastav7
Mr. Dhirendra Swarup
Mr. Rakesh Sood
Mr. Sunil Arjan Lulla
00237561
02878434
07170411
00243191
Chairman
Non-Executive Independent Director
Member
Non-Executive Independent Director
Member
Non-Executive Independent Director
Member
Executive Vice Chairman & Managing Director
2
4
4
4
The Company Secretary and Compliance Officer of the Company acts
as the Secretary to the Committee. The Chief Financial Officer of the
Company is the permanent invitee to the Committee Meetings.
The functions and powers of the Stakeholders Relationship Committee
includes resolving of investor’s complaints pertaining to share transfers,
non-receipt of annual reports, dividend payments, issue of duplicate
share certificates, transmission of shares and other shareholder related
queries, complaints, maintaining investor relations etc.
The main objective of Stakeholders Relationship Committee is to ensure
effective implementation and monitoring of framework devised to avoid
insider trading and abusive self-dealing, ensure effective implementation
of whistle blower mechanism offered to all the stakeholders to report
any concerns about illegal or unethical practices, consider and resolve
the grievances of security holders of the Company, approval of transfer,
transmission of shares, and other securities of the Company, issue of
duplicate certificates on split, carrying out any other function contained
in the SEBI Listing Regulations, as and when amended from time to time.
Status of Investor Grievances during the year 2018-19:
description of Investors Grievances received
during the year
no. of
Grievances
Total Grievances Pending at the Beginning of Period
as on 1 April 2018
Letters directly received from Investors
N.S.E.
B.S.E.
SEBI (Securities Exchange Board of India) (SCORES)
Total Grievances attended
Total Grievances pending as on 31 March 2019
0
0
1
0
0
1
0
All the Complaints received were promptly resolved and there was no
outstanding complaint as on 31 March 2019.
7 Mr. Sunil Srivastav became Member and Chairman of the Stakeholder Relationship Committee w.e.f. 26 October 2018 and two meetings were held since his appointment.
EROS IntERnatIOnal MEdIa lIMItEd 41
Corporate overview | ManageMent report | finanCial management
Share transfer System:
Share transfers in physical form are registered and returned within the
stipulated time if documents are complete in all respects. The Company
obtains from Company Secretary in Practice half yearly certificate to the
effect that all certificates have been issued within thirty days of the date
of lodgement of the transfer, sub-division, consolidation and renewal
as required under Regulation 40(9) of the SEBI Listing Regulations and
files a copy of the said certificate with Stock Exchanges. There are no
share transfer pending as on 31 March 2019.
CORPORatE SOCIal RESPOnSIBIlItY COMMIttEE
The Corporate Social Responsibility (CSR) Committee is constituted in
accordance with Section 135 of the Act and applicable Rules thereto. As
on 31 March 2019, the CSR Committee comprised of Five (5) Members.
The Chairman of the CSR Committee is an Independent Director and he
was present at last year’s Annual General Meeting to address the queries
of the shareholders, if any.
The objective of the CSR Committee is to implement the CSR activities
as per the CSR policy of the Company as stated at length in Directors
Report and to assess the various initiatives forming part of the Business
Responsibility performance of the Company.
The detailed terms of reference of CSR Committee along with working
procedure, charter and constitution are uploaded on website of the
Company at www.erosplc.com.
Meeting details:
During the year under review, Corporate Social Responsibility
Committee met One (1) time in a year viz. on 23 May 2018. The
necessary quorum was present at all the Meetings.
Composition of the CSR Committee and the attendance of each
member at the said Committee Meetings are set out in following table:
name of Committee
Member
directors Identification
no. (dIn)
designation in
the Committee
Category
number of Meetings
attended
Mr. Dhirendra Swarup8
Mr. Rakesh Sood9
Mr. Kishore Arjan Lulla
Mr. Sunil Arjan Lulla
Mrs. Jyoti Deshpande
02878434
07170411
02303295
00243191
02303283
Chairman
Non-Executive Independent Director
Member
Non-Executive Independent Director
Member
Executive Director
Member
Executive Vice Chairman & Managing Director
Member
Non-Executive Non-Independent Director
NA
1
Nil
1
Nil
The Company Secretary and Compliance Officer acts as the Secretary
to the Committee. The Chief Financial Officer of the Company is the
permanent invitee to the Committee Meetings.
ManaGEMEnt COMMIttEE
The Board of Directors of the Company have constituted the
Management Committee to look after day to day affairs and functioning
of the Company. The Board have delegated certain powers to this
Committee. As at 31 March 2019, the Management Committee
comprised of directors and senior executives of the Company viz.
Mr. Sunil Arjan Lulla Mr. Kishore Arjan Lulla and Mr. Farokh P. Gandhi.
The Committee met Nineteen (19) times during the financial year for
operational matters.
InVEStORS InFORMatIOn
General Body Meeting
details of location, date and time of last three annual General Meetings and special resolution passed thereat:
Financial Year
date and time
Venue
Special Resolution Passed
2015-16
2016-17
29 September 2016 at
2.30 P.M.
28 September 2017 at
2.30 P.M.
The Club, 197, D. N. Nagar,
Andheri West, Mumbai - 400 053
The Club, 197, D. N. Nagar,
Andheri West, Mumbai - 400 053
2017-18
27 September 2018 at
2:00 P.M.
The Club, 197, D. N. Nagar,
Andheri West, Mumbai - 400 053
No Special Resolution was passed
• Payment of
remuneration
to Mr. Kishore Arjan Lulla
(DIN 02303295) on his reappointment as Executive Director.
• Approval of Eros International Media Limited – Employee Stock
Options Scheme 2017 and grant of stock options to the Employees
to the Company under the said scheme.
• Grant of stock options to the eligible employees of the Company’s
subsidiaries and Holding Company under the Eros International
Media Limited – Employee Stock Options Scheme 2017.
Appointment of Mr. Subramaniam Lakshminarayanan (DIN:
07972480) as an Independent Director of the Company.
No Extra Ordinary General Meeting of the Shareholders of the Company was held during the financial year 2018-2019.
RESOlUtIOnS PaSSEd BY WaY OF COndUCtInG tHE POStal
BallOt:
During the year under review, no ordinary/special resolutions were
passed through Postal Ballot pursuant to the provisions of Section 110
of the Companies Act, 2013 read with the Rule 22 of the Companies
(Management and Administration) Rules, 2014.
No ordinary/special resolution is proposed to be conducted through
postal ballot as on the date of this report.
MEanS OF COMMUnICatIOn
The Company has always promptly reported to both the stock exchanges
where the securities of the Company are listed, all the material information
including declaration of quarterly, half yearly and annual financial results
in the prescribed formats and through press releases.
Financial results are published in “Financial Express” and “Navshakti” as
per the requirements of the SEBI Listing Regulations. The said results are
also made available on Company’s website at www.erosplc.com.
8 Mr. Dhirendra Swarup became Member and Chairman of the Corporate Social Responsibility Committee w.e.f. 26 October 2018 and no meetings were held since
his appointment.
9 Mr. Rakesh Sood ceased to be a Chairman of the Corporate Social Responsibility Committee w.e.f. 26 October 2018
42
ANNuAL REPORT 2018-19
CORPORATE GOVERNANCE REPORT Presentation to Institutional Investors / analysts
The Corporate Presentations made to investors / analysts is displayed on the website of the Company.
GEnERal SHaREHOldERS InFORMatIOn:
day
date
time
Venue
annual General Meeting
Wednesday
25 September 2019
2:00 P.M.
"The Classic Club”, New Link Road, Behind Infinity Mall, Andheri West,
Mumbai – 400 053.
Financial Calendar (tentative)
Audited Annual Results of previous year ended 31 March 2019
1st quarter results for quarter ending June 2019
2nd quarter results for quarter ending September 2019
3rd quarter results for quarter ending December 2019
Last quarter results for quarter ending March 2020
Financial year
Book Closure dates
listing of equity shares at Stock Exchanges
Stock Codes
ISIn number
Corporate Identification number (CIn)
23 May 2019
On or before 14 August 2019
On or before 14 November 2019
On or before 14 February 2020
On or before 30 May 2020
1 april to 31 March
From Wednesday, 18 September 2019 to
Wednesday, 25 September 2019
BSE limited
Pheeroze Jeejeebhoy Towers,
Dalal Street, Fort,
Mumbai-400 001.
Tel No:- +91-22-22721233/1234
Fax No:- +91-22-22721919
national Stock Exchange of India limited
Exchange Plaza, 5th Floor,
Plot No- C Block, G Block,
Bandra Kurla Complex,
Mumbai-400 051.
Tel No:- +91-22-26598100-8114
Fax No:- +91-22-26598120
BSE - 533261
nSE – EROSMEDIA
INE416L01017
l99999MH1994PlC080502
The Annual Listing Fees for the financial year 2019-20 to BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) has been paid by the
Company within prescribed time.
The Annual Custodian Fees for the financial year 2019-20 to National Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL) has been paid by the Company within prescribed time.
MaRKEt PRICE data
The equity shares of the Company are listed on the BSE Limited and the National Stock Exchange of India Limited. The monthly high and low share
prices on both the exchanges for a period starting from April 2018 to March 2019 are as below:
Month
BSE limited (BSE)
national Stock Exchange of India limited (nSE)
High Price (`)
low Price (`)
Volume
High Price (`)
low Price (`)
Volume
April 2018
May 2018
June 2018
July 2018
August 2018
September 2018
October 2018
November 2018
December 2018
January 2019
February 2019
March 2019
186.70
177.25
151.25
125.35
136.75
116.90
86.50
106.85
98.75
87.85
81.45
89.95
163.35
118.50
115.45
104.00
105.70
72.00
61.65
75.25
80.80
75.10
68.20
75.45
27,27,286
45,77,723
29,47,469
34,24,460
28,59,615
45,70,307
29,83,921
19,27,031
14,03,925
15,98,761
10,98,649
17,29,434
186.75
177.80
151.45
125.40
136.95
117.00
86.80
107.00
96.85
88.25
81.50
89.90
163.50
115.30
115.00
103.60
105.05
72.20
59.95
75.10
80.45
75.00
68.90
75.25
79,00,837
2,28,59,877
1,12,88,158
1,12,74,963
1,35,11,386
1,26,95,608
1,85,70,407
1,02,37,757
58,50,476
68,27,311
99,21,277
1,27,83,904
EROS IntERnatIOnal MEdIa lIMItEd 43
Corporate overview | ManageMent report | finanCial management
PERFORManCE In COMPaRISOn tO BROad BaSEd IndICES
PlEdGE OF SHaRES
39,000
38,000
37,000
36,000
35,000
34,000
33,000
32,000
A pr-18
M ay-18
Jun-18
Jul-18
A u g-18
S e p-18
O ct-18
N ov-18
D ec-18
Jan-19
Fe b-19
M ar-19
BSE Sensex
Eros Share Price
12,000
11,500
11,000
10500
10000
9500
A pr-18
M ay-18
Jun-18
Jul-18
A u g-18
S e p-18
O ct-18
N ov-18
D ec-18
Jan-19
Fe b-19
M ar-19
Nifty Sensex
Eros Share Price
REGIStRaR and SHaRE tRanSFER aGEntS
address for Investor Correspondence
200
180
160
140
120
100
80
60
40
20
0
200
180
160
140
120
100
80
60
40
20
0
any
assistance
For
shares,
re-materialization of shares, share transfers, transmissions, change of
address, non-receipt of dividend or any other query relating to shares,
please write to:
regarding dematerialization of
lInK IntIME IndIa PRIVatE lIMItEd
Unit – Eros International Media Limited
C 101, 247 Park,
LBS Marg, Vikhroli West,
Mumbai 400 083, Maharashtra (India).
Tel: +91 (22) 49186270
Fax: +91 (22) 49186060
Email: rnt.helpdesk@linkintime.co.in and mumbai@linkintime.co.in
Web: www.linkintime.co.in
dIStRIBUtIOn OF SHaREHOldInG aS On 31 March 2019
Shares Holding of Shares
no. of Shareholders % to total
45,736
89.11
2,599
1,371
463
225
191
331
412
5.06
2.67
0.90
0.44
0.37
0.65
0.80
51,328
100.00
1-5000
5001-10000
10001-20000
20001-30000
30001-40000
40001-50000
50001-100000
100001 and above
total
44
ANNuAL REPORT 2018-19
2,84,46,169 Equity Shares have been pledged by Eros Worldwide
FZ LLC, Holding Company as on 31 March 2019.
dEMatERIalISatIOn OF SHaRES and lIQUIdItY aS On
31 March 2019
The securities of the Company are compulsory traded in dematerialised
form and are available for trading on both the depositories in India viz.
National Securities Depository Limited (NSDL) and Central Depository
Services (India) Limited (CDSL). Equity Shares of the Company
representing 99.99% of the Company’s Equity Share Capital are in
dematerialised form as on 31 March 2019 and the entire promoters
holding have been held in the dematerialised as on 31 March 2019.
Break up of Shares in physical and demat form as on 31 March 2019
is as follows:
number of
Shares
% of total
number of Shares
Physical Segment
demat Segment
• NSDL
• CDSL
total
123
7,32,91,774
2,22,16,243
9,55,08,140
0.00
76.74
23.26
100.00
The Company’s Equity Shares are regularly traded on the BSE Limited
and the National Stock Exchange of India Limited, in dematerialised form.
under the Depository system, the International Security Identification
Number (ISIN) allotted to the Company’s shares is INE416L01017.
OUtStandInG adRS/GdRS and OtHER InStRUMEntS
During the year under review, the Company did not issue any ADRs/GDRs/
other instruments, which are convertible into equity shares of the Company.
The Company has outstanding stock options in force which carries
entitlement of equity shares of the Company, as and when exercised.
PaYMEnt OF UnPaId dIVIdEnd(S) OF PREVIOUS YEaR(S)
The Company had declared interim dividend in the financial year
2012-13. Each year your Company sends reminders to those
shareholders who have not encashed their dividend. This year the
Company has sent reminder on 7 May 2019.
The unclaimed / unpaid interim dividend declared in the financial year
2012-13 will be transferred to the Investor Education and Protection
Fund in April 2020 and details of the same will be uploaded on the
website of the Company and will be filed with Ministry of Corporate
Affairs. The Company has already sent individual reminders to the
concerned shareholders with a request to claim the unpaid/ unclaimed
dividends and to avoid transfer of unpaid/ unclaimed dividend to IEPF.
Likewise, all the shares wherein the interim dividend for the financial year
2012-13 has remained unpaid/unclaimed for seven consecutive years
will be transferred by the Company to IEPF in April 2020, if not claimed
by the concerned shareholders in time.
Those Shareholders who have so far not encashed their interim dividend
warrants for the financial 2012-13 are requested to approach the
Company’s Registrar and Share Transfer Agent [RTA] for claiming the
same at the earliest.
Further, pursuant to the provisions of Investor Education and Protection
Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the
Company has uploaded the details of unpaid and unclaimed amounts
lying with the Company as on 27 September 2018 (date of last Annual
General Meeting) on the Company’s website at www.erosplc.com and
on the website of the Ministry of Corporate Affairs.
CORPORATE GOVERNANCE REPORT
The Company also sends request letter to all the shareholders, who have
opted for physical mode of communication, to register their email IDs for
receiving all communication from the Company through electronic mode
on annual basis.
Director on the Board of Copsale Limited, a material subsidiary company.
The Board of Directors of the Companies have also formulated a policy
for determining ‘material’ subsidiaries and the same has been uploaded
on the website of the Company at www.erosplc.com.
address for General Correspondence
Company Secretary &
Compliance Officer
Eros International Media Limited
Registered Office:
201, Kailash Plaza,
Opp Laxmi industrial Estate,
Off. Andheri Link Road,
Andheri West,
Mumbai – 400 053,
Maharashtra (India).
CREdIt RatInG
Corporate Office:
901/902, Supreme Chambers,
Off. Veera Desai Road, Andheri West,
Mumbai- 400 053,
Maharashtra (India).
Tel: + (91 22) 6602 1500
Fax: + (91 22) 6602 1540
Email: compliance.officer@erosintl.com
Web: www.erosplc.com
During the year under review, following ratings were reviewed by
CARE Ratings Limited, a Credit Rating Agency on the Long-Term and
Short-Term bank facility(ies) of the Company.
Facilities Rated
Long-Term Bank Facilities
Ratings as on
1 april 2018
CARE BBB+
Short-Term Bank Facilities
CARE A3+
Rating as on
31 March 2019
CARE BBB-;
Stable
CARE A3
Subsequent to 23 May 2019, in June 2019, the Company’s credit rating
has been revised from CARE BBB- to CARE D for Long term facilities
and CARE A3 to CARE D for Short Term Facility on account of delay
in debt servicing for more than 30 days This facts are disclosed as per
Board meeting dated 12 August 2019.
OtHER dISClOSURES:
disclosure on Material Related Party transactions
During the year, there were no transactions of materially significant nature
with the Promoters or Directors or the Management or the subsidiaries or
relatives etc. that had potential conflict with the interests of the Company
at large. A statement of summary of related party transactions is duly
disclosed in the Notes to Accounts.
details of non-Compliance
No penalties have been imposed on the Company by the Stock
Exchanges, SEBI or any other statutory authorities on any matter related
to capital markets during the last three years.
Whistle Blower Policy
The Whistle Blower Mechanism (Vigil Mechanism) in the Company
enables all the directors, employees and its stakeholders, to report
concerns about unethical behaviour, report for leakage of unpublished
price sensitive information, actual or suspected fraud or violation of
the Company’s code of conduct or ethics policy. This mechanism
has provided adequate safeguards against victimisation of directors/
employees of the Company who avail the mechanism and also provide
for direct access to the Chairman of the Audit Committee. No personnel
are denied access to this mechanism.
The Vigil Mechanism and Whistle Blower Policy has been posted on the
website of the Company at www.erosplc.com.
SUBSIdIaRIES
As on 31 March 2019, the Company has Eleven (11) direct
subsidiaries. Out of Eleven (11) direct subsidiaries, Nine (9) are Indian
and other Two (2) are foreign subsidiaries.
None of the subsidiary companies except Copsale Limited (a British
Virgin Island Company) are material non-listed subsidiary in terms of
Regulation 16(c) of the SEBI Listing Regulation. Mr. Dhirendra Swarup,
the Company’s Independent Director has been appointed as Independent
The Financial Statements including investments made by the unlisted
subsidiaries and all significant transactions and arrangements entered
into by the unlisted subsidiaries forming part of the financials are being
reviewed by the Audit Committee of your Company on a quarterly basis.
RElatEd PaRtY tRanSaCtIOn
A policy on materiality of Related Parties and dealings with Related Party
Transactions has been formulated by the Board of Directors and has also
been uploaded on the website of the Company at www.erosplc.com.
The objective of the Policy is to ensure due and timely identification,
approval, disclosure reporting and transparency of transactions between
Company and any of its Related Parties in compliance with the applicable
laws and regulations, as may be amended from time to time.
Insider trading Regulations
The Company has instituted a comprehensive code of conduct for its
Directors, Key Managerial Personnel, Senior Management Personnel,
Designated Persons and third parties such as auditors, consultants,
etc. who are expected to have access to unpublished price sensitive
information relating to the Company in compliance with Securities and
Exchange Board of India (Prohibition of Insider Trading) Regulations,
2015, as amended from time to time.
The objective of the Code is to prevent purchase and/or sale of securities
of the Company by an insider on the basis of unpublished price sensitive
information. under this Code, Directors, Key Managerial Personnel and
Senior Management Personnel, Designated Persons, their immediate
relatives and such others connected person, are completely prohibited
from dealing in the Company’s shares during the closure of Trading
Window. Further, the Code specifies the procedures to be followed and
disclosures to be made by Directors, Key Managerial Personnel, Senior
Management Personnel and such other Designated Persons, while
dealing with the securities of the Company and enlists the consequences
of any violations.
The Annual disclosures as required from Directors, Key Managerial
Personnel, Senior Management Personnel and other Designated
Employees for adherence to this Code during the financial year 2018-19
have been received by the Company and certificate to that effect from
the Executive Vice Chairman & Managing Director is annexed hereto and
forms part of this Report.
The Company Secretary has been appointed as the Compliance Officer
for monitoring adherence to the Code.
The Code is uploaded on the Company’s website at www.erosplc.com.
Secretarial audit
Makarand M. Joshi & Co., firm of Company Secretaries, carried out
various compliance and secretarial audits during the year:
•
•
•
Quarterly Secretarial Audit
Annual Secretarial Audit as required under Section 204 of the
Act & applicable Rules thereto.
Secretarial Compliance Report to Stock Exchanges pursuant to
SEBI’s Circular CIR/CFD/CMD1/27/2019 dated 8 February 2019
Report issued by Makarand M. Joshi & Co. in Form No. MR-3 is
attached and forms part of Directors Report.
GREEn InItIatIVE
As a responsible corporate citizen,
the Company welcomes
and supports the ‘Green Initiative’ undertaken by the Ministry of
Corporate Affairs, Government of India, enabling electronic delivery
of documents including the Annual Report, quarterly and half-yearly
results, amongst others, to Shareholders at their e-mail address
previously registered with the DPs and RTAs.
EROS IntERnatIOnal MEdIa lIMItEd 45
Corporate overview | ManageMent report | finanCial management
Shareholders who have not registered their e-mail addresses so far are
requested to do the same. Those holding shares in demat form can
register their e-mail address with their concerned DPs. Shareholders
who hold shares in physical form are requested to register their e-mail
addresses with the RTA, by sending a letter, duly signed by the first/
sole holder quoting details of Folio Number.
CEO / CFO CERtIFICatIOn
The Executive Vice Chairman & Managing Director and the Chief Financial
Officer of the Company give annual certification on financial reporting and
internal controls to the Board in terms of Regulation 17(8) of the SEBI
Listing Regulations. The Executive Vice Chairman & Managing Director
and the Chief Financial Officer also give quarterly certification on financial
results while placing the financial results before the Board in terms of
Regulation 33(2) of the SEBI Listing Regulations. The annual certificate
given by the Executive Vice Chairman & Managing Director and the Chief
Financial Officer is published in this Report.
The Company has complied with all the mandatory requirements of
Corporate Governance Report as stated under SEBI Listing Regulations.
COMPlIanCE OF dISCREtIOnaRY REQUIREMEntS
The Company has adopted the following discretionary requirements
stated under Part E of Schedule II of Regulation 27(1) of SEBI
Listing Regulations:-
a.
the Board
The Chairman i.e Mr. Dhirendra Swarup is a Non-Executive
Independent Director and the Company maintains the Chairman’s
office at its expense and reimburses all expenses incurred in
performance of duties by the Chairman.
B. Separate posts of chairperson and chief executive officer
The Company has appointed two separate persons for the
post of Chairperson of the Company and Managing Director.
Mr. Dhirendra Swarup act as the Chairperson of the Board whereas
Mr. Sunil Arjan Lulla is the Executive Vice Chairman & Managing
Director of the Company.
C. Reporting of Internal auditor
The internal control systems of the Company are routinely tested
and verified by Independent Internal Auditors and significant
audit observations and follow-up actions are reported to the
Audit Committee.
COMPlIanCE WItH CORPORatE GOVERnanCE MandatORY
REQUIREMEntS
The Company has complied with the all the required requirements
specified under Regulation 17 to Regulation 27 and Clauses (b) to (i) of
sub-regulation (2) of Regulation 46 of SEBI Listing Regulations and the
disclosure of the compliance status forms part of this Report.
OtHER dISClOSURES
•
•
•
No treatment different from the Indian Accounting Standards
(Ind AS), prescribed by the Institute of Chartered Accountants of
India, has been followed in the preparation of financial statements.
The Company has in place the mechanism to inform Board
members about the risk assessment and minimisation procedures
and periodical reviews to ensure that risk is controlled by the
Executive Management.
During the year, the Company did not make any public issue,
right issue, preferential issue, etc. and hence it did not receive any
proceeds from any such issues. The proceeds received from public
issue made in 2010, were appropriately utilized.
•
•
•
•
•
•
•
During the
instances of
last three years, there were no
non-compliance by the Company and no penalty or strictures were
imposed on the Company by the Stock Exchanges or SEBI or any
statutory authority, on any matter related to the capital markets.
The Company is fully compliant with the applicable mandatory
requirements under SEBI Listing Regulations,
to
Corporate Governance.
relating
The Company has laid down the Whistle Blower Mechanism for
employees and its stakeholders of the Company to report to the
management about any instances of unethical behaviour, actual or
suspected fraud, illegal or unethical practices in the Company.
During the year under review, there was no audit qualification in
the Company’s Financial Statements. Your Company continues
to adopt best practices to ensure a regime of unqualified
Financial Statements.
Certificate from a Company Secretary in Practice on confirming
directors are not debarred or disqualified by SEBI/MCA or any
statutory authority is published as an annexure to this Report.
The total fees for all services paid by the Company and its
subsidiaries, on a consolidated basis, to the statutory auditor is
` 122 lakhs.
During the year, there were no complaints filed, disposed or
pending relating to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
Code of Conduct
The Board has laid down a Code of Business Conduct and Ethics for
all the Directors, Key Managerial Personnel and Senior Managerial
Personnel of the Company in accordance with the requirement under
Regulation 17(5) of SEBI Listing Regulations. The Code has also been
posted on the website of the Company at www.erosplc.com. All the
Board Members, Key Managerial Personnel and Senior Management
Personnel have affirmed their compliance with the said Code for the
Financial Year ending 31 March 2019.
A declaration to this effect signed by the Executive Vice Chairman &
Managing Director of the Company is provided below in this Report.
In accordance with Schedule IV of the Act, a separate Code of Conduct
for the Independent Directors has been adopted by the Company. The
said Code states, inter alia, the duties, roles and responsibilities of
Independent Directors and it has also been posted on the website of the
Company at www.erosplc.com.
All Independent Directors have confirmed to the Company that they have
adhered to and complied with the said Code for the Financial Year end
31 March 2019.
dEClaRatIOn aFFIRMInG COMPlIanCE OF COdE OF COndUCt
To the best of my knowledge and belief, I hereby affirm that all the Board
Members and Senior Management Personnel of the Company have fully
complied with the provisions of the code of conduct as laid down by the
Company for Directors and Senior Management Personnel during the
financial year ended on 31 March 2019.
For and on behalf of the Board
Eros International Media limited
Sunil arjan lulla
Executive Vice Chairman & Managing director
DIN: 00243191
Date: 23 May 2019
Place: Mumbai
46
ANNuAL REPORT 2018-19
CORPORATE GOVERNANCE REPORT
CEO/CFO CERTIFICATE
to,
the Board of directors
Eros International Media limited
We hereby certify that in the preparation of the accounts for the year ended 31 March 2019:
(a) We have reviewed Financial Statements and the Cash Flow Statement for the year and that to the best of our knowledge and belief:
(i)
(ii)
these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
these statements together present a true and fair view of the Company’s affairs and are in compliance with existing Indian Accounting
Standards (Ind AS), applicable laws and regulations.
(b)
To the best of our knowledge and belief, there are no transactions entered into by the Company during the year, which are fraudulent, illegal or
in violation of the Company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness
of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit
Committee, and further state that there were no deficiencies in the design or operation of such internal controls.
(d) We have indicated to the Auditors and the Audit Committee:
(i)
(ii)
(iii)
That there are no significant changes in internal controls over financial reporting during the year.
That there are no Significant changes in accounting policies during the year.
There have been no instances of significant fraud of which we have become aware and the involvement therein, if any of the management
or an employee having a significant role in the Company’s internal control system over financial reporting.
Sunil arjan lulla
Executive Vice Chairman & Managing director
Farokh P. Gandhi
Chief Financial Officer
Date: 23 May 2019
Place: Mumbai
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Corporate overview | ManageMent report | finanCial management
CERTIFICATE OF COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER SCHEDULE V OF THE SEBI (LISTING
OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
To,
The Members of
Eros International Media limited
We have examined the compliance of conditions of corporate governance by Eros International Media limited ("the Company"), for the year ended
on 31 March 2019, as stipulated in Regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 of the said Company with stock exchange(s).
The compliance of conditions of corporate governance is responsibility of the management. Our examination was limited to procedures and
implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor
an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the
management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Regulation 17 to 27 and clauses
(b) to (i) of sub-regulation (2) of regulation 46 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which
the management has conducted the affairs of the Company.
Date : 23 May 2019
Place : Mumbai
EQUItY SHaRES In tHE SUSPEnSE aCCOUnt
For Makarand M. Joshi & Co.
Practicing Company Secretaries
Makarand Joshi
Partner
Membership No.: FCS No.: 5533
Certificate of Practice No.: 3662
In terms of Schedule V(F) of SEBI Listing Regulations, the Company reports the following details in respect of equity shares lying in the suspense
accounts which were issued in demat form:
Sr. no.
Particulars
1
2
3
4
Aggregate number of shareholders and the outstanding shares in the suspense
account lying at the beginning of the year (1 April 2018);
Number of shareholders who approached issuer for transfer of shares from
suspense account during the year;
Number of shareholders to whom shares were transferred from suspense
account during the year;
Aggregate number of shareholders and the outstanding shares in the suspense
account lying at the end of the year (31 March 2019).
no. of Shareholders
no. of Shares
4 Shareholders
169 Equity Shares
Nil
Nil
Nil
Nil
4 Shareholders
169 Equity Shares
The voting rights on the shares in the suspense accounts as on 31 March 2019 shall remain frozen till the rightful owners of such shares claim the shares.
48
ANNuAL REPORT 2018-19
CORPORATE GOVERNANCE REPORT
IndEPEndEnt aUdItOR’S REPORt
IndEPEndEnt aUdItOR’S REPORt
To the Members of
Eros International Media limited
Report on the Standalone financial statements
Opinion
We have audited the accompanying standalone financial statements of
Eros International Media limited (“the Company”), which comprise
the Balance Sheet as at 31 March 2019, the Statement of Profit and
Loss, including Other Comprehensive Income, the Cash Flow Statement
and the Statement of Changes in Equity for the year then ended, and
a summary of significant accounting policies and other explanatory
information (hereinafter referred to as “Financial Statement”).
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act, 2013
(“the Act”) in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards (“Ind AS”) specified
under Section 133 of the Act and other accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 March 2019, its profit including other comprehensive income, its
cash flows and the statement of changes in equity for the year ended
on that date.
Basis for Opinion
in
further described
those Standards are
We conducted our audit in accordance with the Standards on Auditing
(“SAs”) specified under Section 143(10) of the Act. Our responsibilities
under
the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Company in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants of India
(ICAI) together with the ethical requirements that are relevant to our audit
of the standalone financial statements under the provisions of the Act
and the Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI‘s
Code of Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion on the
standalone financial statements.
Key audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial
statements of the current period. These matters were addressed in the
context of our audit of the standalone financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters described
below to be key audit matters to be communicated in our report
Key audit Matters
Revenue Recognition
Response to Key audit Matters
(Refer note 1 and para ‘a’ of the significant accounting policies)
theatrical
recognize
The Company
income,
license Fees and distribution revenue, net of sales
related taxes, when control of the underlying
products have been transferred along with
satisfaction of performance obligation.
Recognition of revenue is driven by specific
terms of related contracts. The Company has
applied Ind AS 115 from 1 April 2018 and has
evaluated all its contracts with respect to the new
accounting guidance.
The various streams of revenue, together with the
level of judgement involved make its accounting
treatment a significant matter for our audit.
Our audit procedures to assess the appropriateness of revenue recognised included
the following:
• Obtaining an understanding of an assessing the design, implementation and operating
effectiveness of the Company’s key internal controls over the revenue recognition process.
• Examination of contracts entered into close to year end to ensure revenue recognition is
made in correct period.
• Testing a sample of contracts from various revenue streams by agreeing information back
to contracts and proof of delivery or transmission as appropriate and ensure revenue
recognition is in accordance with principles of Ind AS 115.
• Assessing the adequacy of Company’s disclosure in accordance with requirements of
Ind AS 115.
Our testing as described above showed that revenue has been recorded in accordance with the
terms of underlying contracts and accounting policy in this area. The disclosures made relating
to revenues are in agreement with Ind AS 115.
EROS IntERnatIOnal MEdIa lIMItEd 49
Corporate overview | ManageMent report | financial management
Key audit Matters
Content advances
Company enters into agreements with production
houses to develop future film content. Advances
are given as per terms of agreements. Such
content advances are monitored by management
of the Company for recoverability and appropriate
write offs are taken when film production does
not seem viable and refund of advance is not
probable basis management evaluation.
The Content advances are transferred to film
and rights at the point at which the content
is first exploited. Provision is made as per
provision policy in respect of content advances
against which content has not been delivered
by vendor within agreed timelines or where
projects are at standstill/put on hold
for
substantial period of time.
Because of the significance of content advances
to the balance sheet and of the significant
degree of management judgment involved in
evaluating the adequacy of the allowance for
content advances, we identified this area as key
audit matter.
Response to Key audit Matters
Our audit procedures with respect to content advance, delivery of the content and it’s
impairment includes:
• Obtaining an understanding of and assessing the design, implementation and operating
effectiveness of the Company’s key controls over the processes of authorisation of content
advances and tracking of receipt of related content as per agreement.
• Examination of contracts on sample basis entered by the Company and agreeing with the
schedule of content advance.
• Reviewing ageing of advances to determine the adequacy of the provision made as per
provisioning policy.
• Testing of the amounts transferred to film and rights account on sample basis on delivery of
content by vendor.
• Circulating and obtaining independent confirmations from parties on the outstanding
balances on sample basis. Testing the reconciliation, if any between the balances confirmed
by party and balance in the books.
• Conducting discussion with the management and reviewing, on sample basis, the project
status prepared by management for determining the adequacy of impairment provisions
where balances are still pending to be adjusted against the content to be delivered by
the party.
The results of our testing of confirmations floated and other test as described above,
were satisfactory and concluded that provision made for impairment of content advance
was appropriate.
amortisation of Film and Content Rights
(Refer note 1 and para ‘d’ of the significant accounting policies)
Our audit procedures to test amortisation/impairment of film content included the following:
• Assessing the design, implementation and operating effectiveness of the Company’s
key internal controls over the processes of maintenance and updation of master
files containing data on the film rights carrying value and the related amortisation
computations thereof.
• Testing, on sample basis, the mathematical accuracy of the acquisition cost of film and
content rights, associated amortisation charge and additions and disposals to third party
supporting documents.
• Discussing the expectations of the selected films and shows with key personnel, including
those outside of finance, to ensure its consistency of expected performance with key
assumptions.
• Determining the overall assumptions used by management for amortisation policy is
appropriate based on the expected utilisation of benefits of the underlying content.
• Assessing management’s historical forecasting accuracy by comparing past assumptions
to actual outcomes.
• The carrying value of the content and film cost were tested for impairment based on the
valuation model. We tested the historical data used for valuation, challenged the terminal
growth and discount rates used and considered the reasonableness of the sensitivity
assessment applied.
The results of the test described as above, were satisfactory and amortisation charged for
content and film right was found satisfactory.
The cost incurred on acquisition of film and
content rights are amortised over the period.
Company carries out stepped up amortisation
of film content, with higher amortisation in year
of film release and lower amortisation in later
periods as per the policy disclosed in significant
accounting policy.
Such amortisation policy has been derived
basis management’s expectation of overall
performance of films based on historical trends.
The Company maintains detailed content wise
information relating to historical trends and future
benefits from content through theatrical sales,
sale of satellite or television and other forms of
monetisation of the content.
impairment of
Determination of amortisation policy and
assessing
asset
involves significant judgement and estimates
since it is dependent on various internal and
external factors.
content
Because of the significance of the amortisation of
content and film rights to balance sheet together
with the level of judgement involved make its
accounting treatment a significant matter for
our audit.
50
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS Key audit Matters
trade Receivables
Response to Key audit Matters
(Refer note 1 and para ‘i’ of the significant accounting policies)
its
trade
recoverability of
The Company is required to regularly assess
the
receivables.
Management assesses the level of allowance for
expected credit loss required at each reporting
date after taking into account the ageing analysis
of trade receivables and other historical and
current factors specific to individual accounts.
The recoverability of trade receivables was
significant to our audit because of the significance
of trade receivables to balance sheet and
involvement of significant degree of management
judgement involved in evaluating the adequacy of
the allowance for expected credit loss.
Our audit procedures to assess the recoverability of trade receivables included the following:
• Tested the accuracy of aging of trade receivables at year end on a sample basis.
• Assessed the recoverability of the unsettled receivables on a sample basis through
our evaluation of management’s assessment with reference to the credit profile of the
customers, historical payment pattern of customers, publicly available information and
latest correspondence with customers and to consider if any additional provision should
be made.
• Tested subsequent settlement of trade receivables after the balance sheet date on a sample
basis, if any.
• Circulating and obtaining independent customers confirmation on the outstanding balances
on sample basis. Testing the reconciliation, if any between the balances confirmed by
customer and balance in the books on sample basis.
•
In assessing the appropriateness of the overall provision for impairment we considered the
management’s application of policy for recognizing provisions which included assessing
whether the calculation was in accordance with Ind AS 109 and comparing the Company’s
provisioning rates against historical collection data.
The results of the test described as above, were satisfactory and provision made for expected
credit loss/doubtful debt was found satisfactory.
Other Information
The Company’s Board of Directors is responsible for the other information.
The other information comprises the information included in the Annual
Report, but does not include the standalone financial statements and our
auditor’s report thereon.
Our opinion on the standalone financial statements does not cover
the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information;
we are required to report that fact. We have nothing to report in
this regard.
Management Responsibility
Statements
for
the Standalone Financial
The Company’s Board of Directors is responsible for the matters stated
in Section 134(5) of the Act, with respect to the preparation of these
Standalone Financial Statements that give a true and fair view of the
financial position, financial performance including other comprehensive
income, cash flows and the statement of changes in equity of the
Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards (“Ind AS”)
specified under Section 133 of the Act, read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provision of the Act for safeguarding the
assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of the appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the
preparation and fair presentation of the standalone financial statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, management is
responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company’s
financial reporting process.
auditor’s Responsibility
Our objectives are to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional scepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances. under Section 143(3)(i) of the Act, we are also
responsible for expressing our opinion on whether the Company
has adequate internal financial controls system in place and the
operating effectiveness of such controls.
EROS IntERnatIOnal MEdIa lIMItEd 51
Corporate overview | ManageMent report | financial management
c)
d)
The Balance Sheet, Statement of Profit and Loss including
Other Comprehensive Income, the Cash Flow Statement and
the Statement of Changes in Equity dealt with by this report
are in agreement with the books of account;
In our opinion, the aforesaid standalone financial statements
comply with the Ind AS specified under Section 133 of the
Act read with Companies (Indian Accounting Standards)
Rules, 2015 as amended;
e) On the basis of written representations received from the
directors as on 31 March 2019 taken on record by the
Board of Directors, none of the directors is disqualified as on
31 March 2019, from being appointed as a director in terms
of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate Report
in “annexure B”. Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the
Company’s internal financial controls over financial reporting;
g) With respect to the other matters to be included in the Auditor’s
Report in accordance with the requirements of section 197(16)
of the Act, as amended, in our opinion and to the best of our
information and according to the explanations given to us,
the remuneration paid by the Company to its directors during
the year is in accordance with the provisions of section 197 of
the Act;
h) With respect to the other matters to be included in the
Auditor’s Report in accordance with Rules 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended, in
our opinion and to the best of our information and according
to the explanations given to us:
i.
ii.
iii.
The Company has disclosed the impact of pending
litigations on its financial position in its standalone
financial statements - Refer note 40 to the standalone
financial statements;
The Company has made provision, as required under
the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts
including derivative contracts; and
There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Company.
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no. 101720W/W100355
amit Chaturvedi
Partner
Membership no. 103141
Place : Mumbai
Dated : 23 May 2019
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going
concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the standalone financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the
standalone financial statements,
the disclosures,
and whether the standalone financial statements represent the
underlying transactions and events in a manner that achieves
fair presentation.
including
Materiality is the magnitude of misstatements in the standalone financial
statements that, individually or in aggregate, makes it probable that
the economic decisions of a reasonably knowledgeable user of the
standalone financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope
of our audit work and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the standalone
financial statements.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the
audit of the standalone financial statements of the current period and
are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
Report on Other legal and Regulatory Requirements
1.
As required by the Companies (Auditor’s Report) Order, 2016
(“the Order”), issued by the Central Government of India in terms
of sub-section (11) of Section 143 of the Act, we give in the
“Annexure A” a statement on the matters specified in paragraphs
3 and 4 of the Order.
2.
As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
b)
In our opinion, proper books of account as required by law
have been kept by the Company so far as appears from our
examination of those books;
52
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS annExURE “a” tO thE IndEPEndEnt aUdItOR’S REPORt On thE StandalOnE
FInanCIal StatEMEntS OF EROS IntERnatIOnal MEdIa lIMItEd
(Referred to in Paragraph 1 under the heading of “Report on other
legal and regulatory requirements” of our report of even date)
i)
In respect of its Fixed assets :
a.
b.
c.
records
The Company
showing
quantitative
details and situation of Fixed Assets on the basis of
available information.
has maintained
particulars
including
proper
full
As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner,
which in our opinion is reasonable, having regard to the
size of the Company and nature of its assets. no material
discrepancies were noticed on such physical verification.
According to the information and explanations given to us,
the title deeds of all the immovable properties are held in the
name of the Company.
ii)
In respect of its inventories:
Accordingly to the information and explanations given to us,
physical verification of inventories comprising of VCD/DVD/Audio
CD and cost of films acquired have been conducted at reasonable
intervals by the management, which in our opinion is reasonable,
having regard to the size of the Company and nature of its
inventories. no material discrepancies noticed on such verification
of inventories as compared to the book records.
iii)
In respect of loans, secured or unsecured granted by the Company
to companies, firms, limited liability partnerships or other parties
covered in the register maintained under Section 189 of the Act:
a.
b.
In our opinion the terms and conditions of the grant
of such loans are prima facie, not prejudicial to the
company’s interest.
The schedule of repayment of principal and interest has been
stipulated wherein the principal and interest amounts are
repayable on demand. Since the repayment of such loans
has not been demanded, in our opinion, the repayment of the
principal and interest amount is regular.
iv)
v)
vi)
c.
There is no overdue amount in respect of loans granted to
such companies and firms.
In respect of loans, investments, guarantees and security, the
Company has complied with the provisions of Section 185 and
186 of the Act.
According to the information and explanations given to us, the
Company has not accepted any deposits within the meaning of
provisions of Sections 73 to 76 or any other relevant provisions of
the Act and the rules framed thereunder. Therefore, the provisions
of Clause (v) of paragraph 3 of the Order are not applicable to
the Company.
To the best of our knowledge and explanations given to us,
the Central Government has not prescribed the maintenance
of cost records under sub section (1) of Section 148 of the
Act in respect of the activities undertaken by the Company.
Accordingly, the provision of clause 3(vi) of the order
is
not applicable.
vii)
In respect of Statutory dues :
a.
According to the records of the Company, undisputed
statutory dues including goods and service tax, employee’s
state insurance, provident fund, income-tax, duty of
customs, value added tax, cess and any other statutory
dues as applicable to it have not been regularly deposited
to the appropriate authorities and there have been
significant delays in a large number of cases. According to
the information and explanations given to us, following are
the undisputed amounts payable in respect of the aforesaid
dues were outstanding as at 31 March 2019 for a period of
more than six months from the date of becoming payable:-
Sr.
no.
1
2
3
4
5
6
7
name of the statute
nature of the dues
Income Tax Act, 1961
Self-Assessment Tax
amount
` in lakhs
2,903
Period to which the
amount relates
Assessment year 2017-18
due date
30-11-2017
Income Tax Act, 1961
Income Tax Act, 1961
Income Tax Act, 1961
Income Tax Act, 1961
Goods and Services Tax Act
Goods and Services Tax Act
Interest on Income Tax
Self-Assessment Tax
Interest on Income Tax
Advance Income Tax
Goods and Services Tax
Interest on Goods and
Services Tax
820
526
33
3,492
444
69
49
Assessment year 2017-18
Assessment year 2018-19
Assessment year 2018-19
Assessment year 2019-20
For the month of July 2018.
For the year 2017-18
For the month of July 2018.
30-11-2017
30-11-2018
30-11-2018
15-09-2018
20-08-2018
Various dates
20-08-2018
date of
Payment
Paid
` 735 lakhs till
date
unpaid
unpaid
unpaid
unpaid
unpaid
unpaid
unpaid
EROS IntERnatIOnal MEdIa lIMItEd 53
Corporate overview | ManageMent report | financial management
b. On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon
enquires in this regard, the following are the disputed amounts payable in respect of goods and service tax, income tax, sales tax, service tax,
duty and cess as applicable to it, which have not been deposited on account of disputed matters pending before the appropriate authorities:-
name of the statute
Sr.
no
nature of
the dues
amount
` in lakhs
amount Paid
under protest
(amount
` in lakhs)
Period to which the
amount relates
Forum where dispute
is pending
1
2
3
4
Finance Act, 1994
Service Tax,
Penalties
and Interest
Income Tax Act, 1961
Income Tax
Maharashtra Value
Added Tax, 2002
Central Sales Tax Act,
1956
Sales Tax
Sales Tax
34,506
1,000.00
Various Years From
2009-10 to 2016-2017
Assistant commissioner
of sales tax (Appeals)
68
37
450
2,132
235
-
-
-
Various Assessment
Years From 2003-04 to
2016-17
Commissioner of
Income Tax (Appeal)
Assessment Year
2004-05
Assessment Year
2016-17
29
165
Various Years From
2005-06 to 2013-14
Various Years From
2005-06 to 2013-14
High Court
Commissioner of
Income Tax (Appeal)
Joint Commissioner of
sales tax (Appeals)
Joint Commissioner of
sales tax (Appeals)
viii.
In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of dues to financial
institutions, banks and government during the year. The lender wise details of the default as on 31 March 2019 is tabulated as under:-
name of Bank/ Financial Instituition
nature of default
amount of default
(in lakhs)
Period of default
Present status
Bank of Baroda
Union Bank of India
dena Bank
IdBI Bank ltd.
Punjab national Bank
Principal
Interest
Principal
Interest
Principal
Interest
Interest
Principal
Interest
175.00
21.00
33.00
8.00
42.00
50.00
59.00
33.00
23.00
53 Days
39 days
53 Days
53 Days
26 Days
26 days
27 days
53 Days
53 Days
Paid
16.06 lakhs Paid
not Paid
not Paid
Paid
Paid
Paid
not Paid
1.06 lakhs Paid
ix)
The Company has not raised money by way of initial public offer or further public offer (including debt instruments). In our opinion, the
x)
xi)
xii)
term loans were applied for the purpose for which the loans
were obtained.
Based on the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
information and explanations given to us, no fraud by the Company
or on the Company by its officers or employees has been noticed or
reported during the year.
In our opinion and according to the information and explanations
given to us, managerial remuneration has been paid or provided
in accordance with the requisite approvals mandated by the
provisions of Section 197 read with Schedule V to the Act.
In our opinion Company is not a nidhi Company. Therefore, the
provisions of clause (xii) of paragraph 3 of the Order are not
applicable to the Company.
xiii)
In respect of transactions with related parties:
In our opinion and according to the information and explanations
given to us, all transactions with related parties are in compliance
with Sections 177 and 188 of the Act and their details have been
disclosed in the financial statements etc., as required by the
applicable Ind AS.
xiv)
In our opinion and according to the information and explanations
given to us, the Company has not made any preferential allotment
or private placement of shares or of fully or partly convertible
debentures during the year and hence clause (xiv) of paragraph 3
54
AnnuAL REPORT 2018-19
of the Order is not applicable to the Company.
xv)
In our opinion and according to the information and explanations
given to us, the Company has not entered into any non-cash
transaction with the directors or persons connected with him and
covered under Section 192 of the Act. Hence, clause (xv) of the
paragraph 3 of the Order is not applicable to the Company.
xvi) Based on information and explanation given to us, the Company
is not required to be registered under Section 45-IA of the
Reserve Bank of India Act, 1934.
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no. 101720W/W100355
amit Chaturvedi
Partner
Membership no. 103141
Place : Mumbai
Dated : 23 May 2019
STANDALONE FiNANciAL STATEMENTS
annExURE “B” tO thE IndEPEndEnt aUdItOR’S REPORt On thE StandalOnE
FInanCIal StatEMEntS OF EROS IntERnatIOnal MEdIa lIMItEd
(Referred to in paragraph 2 (f) under ‘Report on Other legal and
Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting
under Clause (i) of sub-section 3 of Section 143 of the Companies
act, 2013 (“the act”)
We have audited the Internal Financial Control over financial reporting
of Eros International Media limited
(“the Company”) as of
31 March 2019 in conjunction with our audit of the standalone financial
statements of the Company for the year then ended.
Management Responsibility for the Internal Financial Controls
The Company’s management is responsible for establishing and
maintaining internal financial controls based on the internal control over
financial reporting criteria established by the Company considering the
essential components of internal control stated in the Guidance note
issued by ICAI. These responsibilities include the design, implementation
and maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to company’s policies, the safeguarding
of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Act.
auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal
financial controls over financial reporting based on our audit. We
conducted our audit in accordance with the Guidance note issued by
ICAI and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under Section 143(10) of the Act, to the extent applicable
to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and both issued by the ICAI. Those Standards
and the Guidance note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was
established and maintained and if such controls operated effectively in
all material respects.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial
reporting and their operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing the risk that
a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk.
The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Company’s
internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of standalone financial statements
for external purposes in accordance with generally accepted accounting
principles. A company's internal financial control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (2) provide
reasonable assurance that transactions are recorded as necessary to
permit preparation of standalone financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorisations of management and directors of the Company; and (3)
provide reasonable assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the Company's assets
that could have a material effect on the standalone financial statements.
Inherent limitations of Internal Financial Controls over Financial
Reporting
Because of the inherent limitations of internal financial controls over
financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error
or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to
future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate
internal financial controls system over financial reporting and such internal
financial controls over financial reporting were operating effectively
as at 31 March 2019, based on the internal control over financial
reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance note on Audit of
Internal Financial Controls Over Financial Reporting issued by the ICAI.
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no. 101720W/W100355
amit Chaturvedi
Partner
Membership no. 103141
Place : Mumbai
Dated : 23 May 2019
EROS IntERnatIOnal MEdIa lIMItEd 55
Corporate overview | ManageMent report | financial management
Balance Sheet
as at 31 March 2019
Particulars
assets
non-current assets
Property, plant and equipment
Intangible assets
a) Content advances
b) Film rights
c) Other intangible assets
d) Intangible assets under development
Financial assets
a) Investments
b) Loans and advances
c) Restricted bank deposits
d) Other financial assets
Other non-current assets
total non-current assets
Current assets
Inventories
Financial assets
a) Trade receivables
b) Cash and cash equivalents
c) Restricted bank deposits
d) Loans and advances
e) Other financial assets
Other current assets
total current assets
total assets
Equity and liabilities
Equity
Equity share capital
Other equity
total equity
liabilities
non-current liabilities
Financial liabilities
a) Borrowings
b) Trade payables
i) Total outstanding dues of micro and small enterprises
ii) Total outstanding dues of creditors other than micro and small enterprises
c) Other financial liabilities
Employee benefit obligations
Deferred tax liabilities
Other non-current liabilities
total non-current liabilities
Current liabilities
Financial liabilities
a) Borrowings
b) Acceptances
c) Trade payables
i) Total outstanding dues of micro and small enterprises
ii) Total outstanding dues of creditors other than micro and
small enterprises
d) Other financial liabilities
Employee benefit obligations
Current tax liabilities
Other current liabilities
total current liabilities
total liabilities
total equity and liabilities
notes 1 to 50 form an integral part of these standalone financial statements.
As per our report of even date
notes
as at
31 March 2019
as at
31 March 2018
Amount ` in lakhs
3
4
4
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
3,499
1,44,435
66,974
20
3,712
4,819
1,671
511
643
4,254
2,30,538
301
66,595
268
5,982
1,481
228
243
75,098
3,05,636
9,551
144,294
1,53,845
8,698
-
108
25
378
18,758
10,050
38,017
46,796
5,796
-
19,429
7,293
359
11,235
22,866
1,13,774
1,51,791
3,05,636
3,746
1,37,408
77,315
26
1,397
5,503
1,721
716
672
2,951
2,31,455
187
44,024
385
3,776
3,205
294
55
51,926
2,83,381
9,497
134,702
1,44,199
14,941
-
102
-
425
25,221
1,512
42,201
48,621
5,796
-
17,023
8,521
212
3,506
13,302
96,981
1,39,182
2,83,381
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of directors
amit Chaturvedi
Partner
Membership no: 103141
Sunil arjan lulla
Executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non Executive Independent
Director
(DIn: 00237561)
Subramaniam lakshminarayanan
non Executive Independent
Director
(DIn: 07972480)
Place: Mumbai
Date : 23 May 2019
56
AnnuAL REPORT 2018-19
Farokh P. Gandhi
Chief Financial Officer
Place: Mumbai
Date : 23 May 2019
abhishekh Kanoi
Vice President - Company Secretary
and Compliance Officer
STANDALONE FiNANciAL STATEMENTS
Statement of Profit and loss
for the year ended 31 March 2019
Particulars
Revenue
Revenue from operations (net)
Other income
total revenue
Expenses
Film right costs including amortization costs
Changes in inventories of film rights
Employee benefits expense
Finance cost (net)
Depreciation and amortization expense
Other expenses
total expenses
Profit before tax
tax expense
Current tax
Deferred tax
Short/(excess) provision of earlier years
Profit after tax for the year
Other comprehensive income
(i) Items that will not be reclassified to profit or loss
Remeasurement gain on defined benefit plan
Income tax effect (net)
total comprehensive income for the year
Earnings per share
Basic (in `) (nominal value `10)
Diluted (in `) (nominal value `10)
Amount ` in lakhs
notes
Year ended
31 March 2019
Year ended
31 March 2018
31
32
33
34
35
36
37
38
39
83,564
3,416
86,980
39,278
(114)
4,141
7,903
539
21,556
73,303
13,677
12,535
(6,996)
(598)
4,941
8,736
61
(21)
8,776
9.18
9.10
70,766
2,091
72,857
33,201
(142)
4,625
7,488
615
13,027
58,814
14,043
9,393
(3,233)
182
6,342
7,701
86
(30)
7,757
8.15
8.03
notes 1 to 50 form an integral part of these standalone financial statements
As per our report of even date
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of directors
amit Chaturvedi
Partner
Membership no: 103141
Sunil arjan lulla
Executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non Executive Independent
Director
(DIn: 00237561)
Subramaniam lakshminarayanan
non Executive Independent
Director
(DIn: 07972480)
Place: Mumbai
Date : 23 May 2019
Farokh P. Gandhi
Chief Financial Officer
Place: Mumbai
Date : 23 May 2019
abhishekh Kanoi
Vice President - Company Secretary
and Compliance Officer
EROS IntERnatIOnal MEdIa lIMItEd 57
Corporate overview | ManageMent report | financial management
Statement of Changes in Equity
as at 31 March 2019
a. Equity share capital
Balance as at 1 april 2017
Add: Issued on exercise of employee share options
Balance as at 31 March 2018
Add: Issued on exercise of employee share options
Balance as at 31 March 2019
B. Other equity
Particulars
Balance as at 1 april 2017
Profit for the year
Acturial gain / (loss) on employee benefit plans
through OCI
total Comprehensive income/ (loss) for the year
Additions for employee stock options exercised
during the year
Transfer from/to share option outstanding account
Employee stock option compensation expense
Employee stock option compensation expense to
employee's of subsidiary and Fellow subsidiary
Balance as at 31 March 2018
Profit for the year
Acturial gain / (loss) on employee benefit plans
through OCI
total Comprehensive income/ (loss) for the year
Additions for employee stock options exercised
during the year
Transfer from/to share option outstanding account
Employee stock option compensation expense
Employee stock option compensation expense to
employee's of subsidiary and Fellow subsidiary
Balance as at 31 March 2019
C. nature and purpose of reserves
number
93,858,717
1,113,160
94,971,877
536,263
95,508,140
amounts ` in lakhs
9,385
112
9,497
54
9,551
Amount ` in lakhs
Share
Premium
account
38,141
-
-
-
247
2,110
-
-
40,498
-
-
-
-
1,049
-
-
General
Reserves
Share Options
Outstanding
Retained
Earnings
526
-
-
-
-
-
-
-
526
-
-
-
-
-
-
-
2,645
-
-
84,354
7,701
-
-
-
7,701
-
(2,110)
834
208
1,577
-
-
-
-
-
92,055
8,736
-
-
-
8,736
-
(1,049 )
761
55
-
-
-
Other
comprehensive
income / (loss)
(10)
-
56
total other
equity
1,25,656
7,701
56
56
-
-
-
-
46
-
40
40
-
-
-
-
7,757
247
-
834
208
1,34,702
8,736
40
8,776
-
-
761
55
41,547
526
1,344
100,791
86
144,294
1. Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium.
2. General Reserve: General Reserve was created by transferring a portion of the net profit of the Company as per the requirements of the
Companies Act, 2013.
3. Share Options Outstanding: Share Options Outstanding relates to the stock options granted by the Company to employees under a
Employee Stock Option Plan.
4. Retained Earnings: Remaining portion of profits earned by the Company till date after appropriations.
As per our report of even date
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of directors
amit Chaturvedi
Partner
Membership no: 103141
Sunil arjan lulla
Executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non Executive Independent
Director
(DIn: 00237561)
Subramaniam lakshminarayanan
non Executive Independent
Director
(DIn: 07972480)
Place: Mumbai
Date : 23 May 2019
58
AnnuAL REPORT 2018-19
Farokh P. Gandhi
Chief Financial Officer
Place: Mumbai
Date : 23 May 2019
abhishekh Kanoi
Vice President - Company Secretary
and Compliance Officer
STANDALONE FiNANciAL STATEMENTS Cash Flow Statement
For the year ended 31 March 2019
Particulars
Cash flow from operating activities
Profit before tax
non-cash adjustments to reconcile Profit before tax to net cash flows
Depreciation and amortization
Trade receivables written off
Sundry balances written back
Content advances written off
Provision for doubtful advances
Advances and deposits written off
Loss on disposal of fixed assets (net)
Provision for doubtful trade receivables
unwinding of interest on expected credit loss
Finance costs
Interest income
Gratuity
(Gain) on sale of tangible assets (net)
Impairment loss on investment in subsidiary
Expense on employee stock option scheme
unrealised foreign exchange gain
Operating profit before working capital changes
Movements in working capital:
Increase/(Decrease) in current liabilities
Increase/(Decrease) in other financial liabilities
Increase in trade payables
Increase in employee benefit obligations
Decrease in inventories
(Increase)/Decrease in trade receivables
Decrease in other current assets
(Increase) /Decrease in other non- current assets
(Increase)/Decrease in short-term loans and advances
Decrease in other financial assets
Cash generated from operations
Taxes paid (net)
net cash generated from operating activities (a)
Cash flow from investing activities
Purchase of tangible assets
Purchase of intangible film rights and related content
Deposits with banks (net)
Advance given
Proceeds from sale of fixed assets
Interest income
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
13,677
14,043
25,012
1,917
(45)
2,226
1,687
298
7,943
-
8,237
(334)
117
(1)
722
761
(814)
61,403
18,228
946
(619)
44
9
22,979
3,539
(79)
228
-
0
0
-
(409)
7,752
(264)
1
1,480
834
(309)
49,795
(1,361)
(485)
2,257
88
29
(32,413)
(20,444)
(188)
(1,303)
1,475
(28)
47,554
(4,750)
42,804
(117)
(24,213)
(2,001)
-
1
401
51
1,640
(934)
51
30,687
(4,807)
25,880
(443)
(25,892)
(21)
-
4
154
net cash used in investing activities (B)
(25,929)
(26,198)
EROS IntERnatIOnal MEdIa lIMItEd 59
Corporate overview | ManageMent report | financial management
Cash Flow Statement
For the year ended 31 March 2019
Particulars
Cash flows from financing activities
Proceeds from issue of equity shares (net)
Repayment of long-term borrowings
Proceeds from long-term borrowings
Change in short-term borrowings
Finance charges (net)
net cash flow from/(used ) in financing activities (C)
net decrease in cash and cash equivalents (a + B + C)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year (refer note 12)
*amount represents less than ` one lakh
Change in liability arising from financing activities :-
As on 1 April 2018
Cash Flows
Adjustments
as on 31 March 2019
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
54
(8,561)
-
(1,249)
(7,235)
(16,991)
(116)
384
268
358
(7,159)
7,272
7,252
(7,152)
571
253
131
384
non current
borrowings
Current
borrowing
22,135
(8,561)
304
13,878
48,621
(1,249)
(576)
46,796
Amount ` in lakhs
acceptances
total
5,796
-
-
5,796
76,552
(9,810)
(272)
66,470
notes 1 to 50 form an integral part of these standalone financial statements
As per our report of even date
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of directors
amit Chaturvedi
Partner
Membership no: 103141
Sunil arjan lulla
Executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non Executive Independent
Director
(DIn: 00237561)
Subramaniam lakshminarayanan
non Executive Independent
Director
(DIn: 07972480)
Place: Mumbai
Date : 23 May 2019
Farokh P. Gandhi
Chief Financial Officer
Place: Mumbai
Date : 23 May 2019
abhishekh Kanoi
Vice President - Company Secretary
and Compliance Officer
60
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS Summary of Significant accounting Policies
Corporate Information
Eros International Media Limited (the ‘Company’) was incorporated
in India, under the Companies Act, 1956. The Company is a global
player within the Indian media and entertainment industry and is
primarily engaged in the business of film production, exploitation and
distribution. It operates on a vertically integrated studio model controlling
content as well as distribution and exploitation across multiple formats
globally, including cinema, digital, home entertainment and television
syndication. Its shares are listed on leading stock exchanges in India
(BSE Scrip Code: 533261; nSE Scrip Code: EROSMEDIA).
These separate financial statements were authorised for issue in
accordance with a resolution passed in the Board of Directors meeting
held on 23 May 2019.
Statement of compliance
These financial statements have been prepared in accordance with the
Indian Accounting Standards (referred to as “Ind AS”) as prescribed
under section 133 of the Companies Act, 2013 read with Companies
(Indian Accounting Standards) Rules as amended from time to time.
Basis of preparation
The financial statements have been prepared on accrual basis of accounting
using historical cost basis, except certain investment and Employee Stock
Option Plan (‘ESOP’) Compensation measured at fair value.
All assets and liabilities have been classified as current or non-current as
per the Company’s normal operating cycle and other criteria set out in
the Schedule III to the Act. The Company considers 12 months to be its
normal operating cycle.
All values are rounded to the nearest rupees in lakhs, except where
otherwise indicated. Amount in zero (0) represents amount below rupees
fifty thousand
1.
Significant accounting Policies
a. Revenue Recognition
Effective 1 April 2018, the Company has applied Ind AS 115
which establishes a comprehensive framework for determining
whether, how much and when revenue is to be recognised.
Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11
Construction Contracts. The Company has adopted Ind AS 115
using the modified retrospective effect method. The effect of initially
applying this standard is recognised at the date of initial application
(i.e. 1 April 2018). The standard is applied retrospectively only to
contracts that are not completed as at the date of initial application
and the comparative information in the statement of profit and
loss is not restated – i.e. the comparative information continues
to be reported under Ind AS 18 and Ind AS 11. Refer note 1(a) –
Significant accounting policies – Revenue recognition in the Annual
report of the Company for the year ended 31 March 2018, for
revenue recognition policy as per Ind AS 18 and Ind AS 11. The
impact of adoption of the standard on the financial statements of
the Company is insignificant.
To determine whether to recognise revenue, the Company follows
a 5-step process:
i.
ii.
Identifying the contract with a customer
Identifying the performance obligations
iii. Determining the transaction price
iv.
v.
Allocating
obligations
the
transaction price
to
the performance
Recognising revenue when/as performance obligation(s) are
satisfied
Revenue is recognized upon transfer of control of promised
products or services to customers in an amount that reflects
the consideration which the Company expects to receive in
exchange for those products or services. To ensure collectability
of such consideration and financial stability of the counterparty,
the Company performs certain standard Know Your Client (KYC)
procedures based on their locations and evaluates trend of
past collection.
Revenue is measured based on the transaction price, which is
the consideration, adjusted for any discounts and incentives, if
any, as specified in the contract with the customer. Revenue also
excludes taxes collected from customers. In case of revenues
which are subject to change, the Company estimates the amount
to be received using the “most likely amount” approach, or the
“expected value” approach, as appropriate. This amount is then
included in the Company’s estimate of the transaction price only
if it is highly probable that a significant reversal of revenue will not
occur once any uncertainty surrounding the bonus is resolved.
In making this assessment the Company considers its historical
performance on similar contracts.
The Company recognises contract liabilities for consideration
received in respect of unsatisfied performance obligations and
reports these amounts as other liabilities in the statement of
financial position (see note 30). Similarly, if the Company satisfies
a performance obligation before it receives the consideration, the
Company recognises either a contract asset or a receivable in its
statement of financial position, depending on whether something
other than the passage of time is required before the consideration
is due.
Consideration is generally due upon satisfaction of performance
obligations and a receivable is recognised when it becomes
unconditional. Generally, the credit period varies between 0-180
days from the shipment or delivery of goods or services as the case
may be.
The transaction price, being the amount to which the Company
expects to be entitled and has rights to under the contract is
allocated to the identified performance obligations. The transaction
price will also include an estimate of any variable consideration
where the Company’s performance may result in additional
revenues based on the achievement of agreed targets.
The Company does not expect to have any contracts where the
period between the transfer of the promised goods or services to
the customer and payment by the customer exceeds one year.
As a consequence, the Company does not adjust any of the
transaction prices for the time value of money.
The Company disaggregates revenue
customers by geography and nature of services.
from contracts with
The following additional criteria apply in respect of various revenue
streams within filmed entertainment:
Theatrical — Contracted minimum guarantees are recognized on
the theatrical release date. The Company’s share of box office
receipts in excess of the minimum guarantee is recognized at the
point they are notified to the Company.
Television — License fees received in advance which do not meet
all the above criteria are included in deferred income until the above
criteria is met.
Other — DVD, CD and video distribution revenue is recognized on
the date the product is delivered or if licensed in line with the above
criteria. Provision is made for physical returns where applicable.
Digital and ancillary media revenues are recognized at the earlier
of when the content is accessed or declared. Visual effects,
EROS IntERnatIOnal MEdIa lIMItEd 61
Corporate overview | ManageMent report | financial management
production and other fees for services rendered by the Company
and overhead recharges are recognized in the period in which they
are earned and in certain cases, the stage of production is used to
determine the proportion recognized in the period.
Other income
Dividend income is recognised when the Company’s right to receive
the payment is established, which is generally when shareholders
approve the dividend.
Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the effective interest
rate applicable.
b. Property, plant and equipment and depreciation
Property, Plant and Equipment is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any.
The cost of Property, Plant and Equipment comprises of its
purchase price or construction cost, any costs directly attributable
to bringing the asset into the location and condition necessary for it
to be capable of operating in the manner intended by management,
the initial estimate of any decommissioning obligation, if any, and
borrowing costs for assets that necessarily take a substantial
period of time to get ready for their intended use. Subsequent
costs are included in the asset's carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably.
Capital Work-in-progress (CWIP) includes expenditure that is
directly attributable to the acquisition/construction of assets, which
are yet to be commissioned.
Depreciation is provided under written down value method at
the rates and in the manner prescribed under Schedule II to the
Companies Act, 2013.The residual values, useful lives and methods
of depreciation of property, plant and equipment are reviewed at
each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from de-recognition of a property, plant
and equipment are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are
recognized in the Statement of Profit and Loss when the asset is
de-recognized.
c.
Intangible assets
Intangible assets acquired by the Company are stated at cost
less accumulated amortization less impairment loss, if any, (film
production cost and content advances are transferred to film and
content rights at the point at which content is first exploited).
Investments in films and associated rights, including acquired
rights and distribution advances in respect of completed films,
are stated at cost less amortization less provision for impairment.
Costs include production costs, overhead and capitalized interest
costs net of any amounts received from third party investors. A
charge is made to write down the cost of completed rights over
the estimated useful lives, writing off more in year one which
recognizes initial income flows and then the balance over a period
of up to nine years, except where the asset is not yet available for
exploitation. The average life of the assets is the lesser of 10 years
or the remaining life of the content rights. The amortization charge
is recognized in the statement of profit and loss within cost of
sales. The determination of useful life is based upon Management’s
judgment and includes assumptions on the timing and future
estimated revenues to be generated by these assets, which are
summarized in note 2.
Intangible assets comprising film scripts and related costs are
stated at cost less amortization less provision for impairment. The
script costs are amortized over a period of 3 years on a straight-
line basis and the amortization charge is recognized in the income
statement within cost of sales. The determination of useful life is
based upon Management’s estimate of the period over which the
Company explores the possibility of making films using the script.
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AnnuAL REPORT 2018-19
Other intangible assets, which comprise internally generated
and acquired software used within the Entity’s digital, home
entertainment and internal accounting activities, are stated at cost
less amortization less provision for impairment. A charge is made
to write down the cost of software over the estimated useful lives
except where the software is not yet available for use. The average
life of the software is the lesser of 3 years or the remaining life of the
software. The amortization charge is recognized in the statement
of profit and loss.
d.
Impairment of non-financial assets
At each reporting date, for the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units). As a
result, some assets are tested individually for impairment and some
are tested at the cash generating unit level. All individual assets or
cash generating units are tested for impairment whenever events
or changes in circumstances both internal and external indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised wherever the carrying amount
of an asset exceeds its recoverable amount which represents the
greater of the net selling price of assets and their ‘value in use’.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and
the risks specific to the asset. In determining fair value less costs
of disposal, recent market transactions are taken into account. If
no such transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or
other available fair value indicators.
Film and content rights are stated at the lower of unamortized
cost and estimated recoverable amounts. In accordance with Ind
AS 36 Impairment of Assets, film content costs are assessed for
indication of impairment on a library basis as the nature of the
Company’s business, the contracts it has in place and the markets
it operates in do not yet make an ongoing individual film evaluation
feasible with reasonable certainty. Impairment losses on content
advances are recognized when film production does not seem
viable and refund of the advance is not probable. Irrespective of
existence of indicators of impairment, Company makes provision
on Content Advances in accordance with the provisioning policy,
such that, unadjusted advances are provided over a period of
3 to 5 years.
All assets are subsequently reassessed for indications that an
impairment loss previously recognized may no longer exist.
e. Borrowing costs
The Company is capitalising borrowing costs that are directly
attributable to the acquisition or construction of qualifying assets.
Qualifying assets are assets that necessarily take a substantial
period of time to get ready for their intended use or sale.
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortized
cost with any difference between the proceeds (net of transaction
costs) and the redemption value recognised in the income
statement within Finance costs over the period of the borrowings
using the effective interest method. Finance costs in respect of film
productions and other assets which take a substantial period of
time to get ready for use or for exploitation are capitalized as part of
the assets. All other borrowing costs are recognized as expense in
the period in which they are incurred and charged to the Statement
of Profit and Loss.
Borrowings are classified as current liabilities unless the Company
has an unconditional right to defer settlement of the liability for at
least 12 months after the balance sheet date.
STANDALONE FiNANciAL STATEMENTS
f.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected
credit loss (ECL) model for measurement and recognition of
impairment loss on risk exposure arising from financial assets
like debt instruments measured at amortised cost e.g., trade
receivables and deposits.
The Company follows ‘simplified approach’ for recognition of
impairment loss allowance on Trade receivables or contract
revenue receivables. The application of simplified approach does
not require the Company to track changes in credit risk. Rather, it
recognises impairment loss allowance based on lifetime ECLs at
each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and
risk exposure, the Company determines that whether there has
been a significant increase in the credit risk since initial recognition.
If credit risk has not increased significantly, 12-month ECL is used
to provide for impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent period, credit
quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance based on
12-month ECL.
Lifetime ECL are the expected credit losses resulting from all
possible default events over the expected life of a financial
instrument. The 12-month ECL is a portion of the lifetime ECL
which results from default events that are possible within 12
months after the reporting date.
ECL is the difference between all contractual cash flows that are
due to the Company in accordance with the contract and all the
cash flows that the entity expects to receive (i.e., all cash shortfalls),
discounted at the original EIR. When estimating the cash flows, an
entity is required to consider all contractual terms of the financial
instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However,
in rare cases when the expected life of the financial instrument
cannot be estimated reliably, then the entity is required to use the
remaining contractual term of the financial instrument.
ECL impairment loss allowance (or reversal) recognized during the
period is recognized as income/ expense in the statement of profit
and loss (P&L). This amount is reflected under the head ‘Other
income or other expenses’ in the P&L.
For assessing increase in credit risk and impairment loss, the
Company combines financial instruments on the basis of shared
credit risk characteristics with the objective of facilitating an
analysis that is designed to enable significant increases in credit
risk to be identified on a timely basis.
g.
Inventories
Inventories primarily comprise of music CDs and DVDs are valued
at the lower of cost and net realizable value. Cost in respect of
goods for resale is defined as all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories
to their present location and condition. Cost in respect of raw
materials is purchase price.
Purchase price is assigned using a weighted average basis.
net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and
the estimated costs necessary to make the sale.
h. Provisions, Contingent liabilities and Contingent assets
Provisions are recognized when the Company has a present legal
or constructive obligation as a result of a past event, it is more likely
than not that an outflow of resources will be required to settle the
obligations and can be reliably measured. Provisions are measured
at Management’s best estimate of the expenditure required to
settle the obligations at the balance sheet date. If the effect of the
time value of money is material, provisions are discounted using
a current pre-tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the increase
in the provision due to the passage of time is recognised as a
finance cost.
Contingent liabilities are not recognized in the financial statements
but are disclosed by way of notes to accounts unless the possibility
of an outflow of economic resources is considered remote.
Contingent assets are not recognized in financial statements.
However, the same is disclosed, where an inflow of economic
benefit is virtual.
i.
Employee Benefits
Short term employee benefits obligations
Short-term employee benefits are recognized as an expense in the
Statement of Profit and Loss for the year in which related services
are rendered.
Post-employment benefits and other long term employee
benefits
defined contribution plan
Provident fund & national Pension scheme: The Company’s
contributions paid or payable during the year to the provident fund,
employee’s state insurance corporation and national pension
scheme are recognized in the Statement of Profit and Loss. This
fund is administered by the respective Government authorities,
and the Company has no further obligation beyond making its
contribution, which is expensed in the year to which it pertains.
defined benefit plan
Gratuity: The Company’s liability towards gratuity is determined
using the projected unit credit method which considers each period
of service as giving rise to an additional unit of benefit entitlement
and measures each unit separately to build up the final obligation.
The cost for past services is recognized on a straight-line basis over
the average period until the amended benefits become vested.
Re-measurement gains and losses are recognized immediately in
the Other Comprehensive Income as income or expense and are
not reclassified to profit or loss in subsequent periods. Obligation
is measured at the present value of estimated future cash flows
using a discounted rate that is determined by reference to market
yields at the Balance Sheet date on Government bonds where the
currency and terms of the Government bonds are consistent with
the currency and estimated terms of the defined benefit obligation.
Compensated absences: Accumulated compensated absences
are expected to be availed or encashed within 12 months from the
end of the year and are treated as short-term employee benefits.
The obligation towards the same is measured at the expected cost
of accumulating compensated absences as the additional amount
expected to be paid as a result of the unused entitlement as at the
year end.
Employee stock option plan
In accordance with Ind AS 102 Share Based Payments, the fair
value of shares or options granted is recognized as personnel
costs with a corresponding increase in equity. The fair value is
measured at the grant date and spread over the period during
which the recipient becomes unconditionally entitled to payment
unless forfeited or surrendered.
The fair value of share options granted is measured using the Black
Scholes model, each taking into account the terms and conditions
upon which the grants are made. At each Balance Sheet date, the
Company revises its estimate of the number of equity instruments
expected to vest as a result of non-market based vesting
conditions. The amount recognized as an expense is adjusted to
reflect the revised estimate of the number of equity instruments
that are expected to become exercisable, with a corresponding
adjustment to equity. The Company's share option plan does not
feature any cash settlement option.
EROS IntERnatIOnal MEdIa lIMItEd 63
Corporate overview | ManageMent report | financial management
upon exercise of share options, the proceeds received net of any
directly attributable transaction costs up to the nominal value of the
shares are allocated to equity share capital with any excess being
recorded as securities premium.
j.
leases
The determination of whether an arrangement is (or contains)
a lease is based on the substance of the arrangement at the
inception of the lease. The arrangement is, or contains, a lease if
fulfilment of the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the
asset or assets, even if that right is not explicitly specified in
an arrangement.
A lease is classified at the inception date as a finance lease or
an operating lease. Leases in which significantly all the risks and
rewards incidental to ownership are transferred to the lessee are
classified as Finance leases. All other leases are Operating Leases.
as a lessee
Finance lease
Leases are classified as finance leases (including those for land), if
substantially all the risks and rewards incidental to ownership of the
leased asset is transferred to the lessee.
At the commencement of the lease term, the Company recognises
finance leases as assets and liabilities in its balance sheet at
amounts equal to the fair value of the leased property or, if lower, the
present value of the minimum lease payments, each determined at
the inception of the lease. The corresponding rental obligations,
net of finance charges, are included in borrowings or other financial
liabilities as appropriate. Any indirect costs of the Company are
added to the amount recognized as an asset.
Minimum lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
cost is charged to the profit or loss over the lease period so as
to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.
Operating lease
Leases (including those for land) which are not classified as finance
leases are considered as operating lease. Lease payments under
an operating lease are recognized as an expense on a straight-line
basis over the lease term unless either:
A.
B.
Another systematic basis is more representative of the time
pattern of the user’s benefit even if the payments to the
lessors are not on that basis; or
The payments to the lessor are structured to increase in line
with expected general inflation to compensate for the lessor’s
expected inflationary cost increases. If payments to the
lessor vary because of factors other than general inflation,
then this condition is not met.
as a lessor
Finance lease
All assets given on finance lease are shown as receivables
at an amount equal to net investment in the lease. Principal
component of the lease receipts are adjusted against outstanding
receivables and interest income is accounted by applying the
interest rate implicit in the lease to the net investment.
Operating lease
Lease income from operating lease (excluding amount for
services such as insurance and maintenance) is recognised in
the statement of profit or loss on a straight-line basis over the
lease term, unless either:
A.
B.
Another systematic basis is more representative of the
time pattern of the user’s benefit even if the payments to
the Company are not on that basis; or
The payments to the Company are structured to increase
in line with expected general inflation to compensate for
the Company’s expected inflationary cost increases. If
payments to the Company vary because of factors other
than general inflation, then this condition is not met.
k.
Foreign Currency transactions
Transactions in foreign currencies are translated at the rates of
exchange prevailing on the dates of the transactions. Monetary
assets and liabilities in foreign currencies are translated at the
prevailing rates of exchange at the balance sheet date. non-
monetary items that are measured at historical cost in a foreign
currency are translated at the exchange rate at the date of the
transaction. non-monetary items that are measured at fair value in
a foreign currency are translated using the exchange rates at the
date when the fair value was determined.
Any exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from
those at which they were initially recorded are recognized in the
statement of profit and loss in the period in which they arise. non-
monetary items carried at fair value that are denominated in foreign
currencies are translated at rates prevailing at the date when the
fair value was determined. non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
The Company’s functional currency and the presentation currency
is same i.e. Indian Rupee (`).
l.
Financial instrument
non-derivative financial instruments
Financial assets and financial liabilities are recognized when
the Company becomes party to the contractual provisions of
the instrument.
Financial assets and liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition
or issue of financial assets or liabilities (other than financial assets
and liabilities at fair value through profit and loss) are added to
or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit and loss are recognized
immediately in profit or loss. Financial assets and financial liabilities
are offset against each other and the net amount reported in the
balance sheet if, and only if, there is a currently enforceable legal
right to offset the recognized amounts and there is an intention
to settle on a net basis, or to realize the assets and settle the
liabilities simultaneously.
A financial instrument is measured at fair value through profit or
loss if:
•
•
it has been acquired principally for the purpose of selling/
repurchasing it in the near term
on initial recognition it is part of a portfolio of identified
financial instruments that the Company manages together
and has a recent pattern of short term profit taking or
•
it is a derivative that is not designated in a hedging relationship.
The fair value of financial instruments denominated in a foreign
currency is determined in that foreign currency and translated
at the spot rate at the end of the reporting period. The foreign
exchange component forms part of its fair value gain or loss.
Therefore for financial instruments that are classified as fair value
through Statement of Profit and Loss, the exchange component is
recognized in Statement of Profit and Loss.
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AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
Financial assets
Financial assets are divided into the following categories:
•
•
•
financial assets carried at amortised cost
financial assets at fair value through Other Comprehensive
Income
financial assets at fair value through Statement of Profit and
Loss;
Financial assets are assigned to the different categories by
Management on initial recognition, depending on the nature
and purpose of the financial assets. The designation of financial
assets is re-evaluated at every reporting date at which a choice of
classification or accounting treatment is available. Financial Assets
like Investments in Subsidiaries are measured at Cost as allowed
by Ind-AS 27 – Separate Financial Statements and hence are not
fair valued.
Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is
held within a business model whose objective is to hold the asset
in order to collect contractual cash flows and the contractual terms
of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal
amount outstanding. These are non-derivative financial assets
that are not quoted in an active market. Loans and receivables
(including trade and other receivables, bank and cash balances) are
measured subsequent to initial recognition at amortized cost using
the effective interest method, less provision for impairment. Any
change in their value through impairment or reversal of impairment
is recognized in the Statement of Profit and Loss.
In accordance with Ind AS 109: Financial Instruments, the Company
recognizes impairment loss allowance on trade receivables and
content advances based on historically observed default rates.
Impairment loss allowance recognized during the year is charged
to Statement of Profit and Loss.
Financial assets at fair value through Other Comprehensive
Income
Financial assets at fair value through Other Comprehensive
Income are non-derivative financial assets held within a
business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories
are subsequently fair valued through profit or loss. It includes non-
derivative financial assets that are either designated as such or do
not qualify for inclusion in any of the other categories of financial
assets. Gains and losses arising from investments classified under
this category is recognized in the statement of profit and loss when
they are sold or when the investment is impaired.
In the case of impairment, any loss previously recognized in other
comprehensive income is transferred to the statement of profit and
loss. Impairment losses recognized in the statement of profit and
loss on equity instruments are not reversed through the statement
of profit and loss. Impairment losses recognized previously on debt
securities are reversed through the statement of profit and loss
when the increase can be related objectively to an event occurring
after the impairment loss was recognized in the statement of profit
and loss.
When the Company considers that fair value of financial assets
can be reliably measured, the fair values of financial instruments
that are not traded in an active market are determined by using
valuation techniques. The Company applies its judgment to select
a variety of methods and make assumptions that are mainly based
on market conditions existing at each balance sheet date. Equity
instruments measured at fair value through profit or loss that do
not have a quoted price in an active market and whose fair value
cannot be reliably measured are measured at cost less impairment
at the end of each reporting period.
An assessment for impairment is undertaken at least at each
balance sheet date.
A financial asset is derecognized only where the contractual rights
to the cash flows from the asset expire or the financial asset is
transferred and that transfer qualifies for derecognition. A financial
asset is transferred if the contractual rights to receive the cash
flows of the asset have been transferred or the Company retains
the contractual rights to receive the cash flows of the asset but
assumes a contractual obligation to pay the cash flows to one or
more recipients. A financial asset that is transferred qualifies for
derecognition if the Company transfers substantially all the risks
and rewards of ownership of the asset, or if the Company neither
retains nor transfers substantially all the risks and rewards of
ownership but does transfer control of that asset.
Financial liabilities
Financial liabilities are classified as either ‘financial liabilities at fair
value through profit or loss’ or ‘other financial liabilities’. Financial
liabilities are subsequently measured at amortized cost using the
effective interest method or at fair value through profit or loss.
Financial liabilities are classified as at fair value through profit or loss
when the financial liability is held for trading such as a derivative,
except for a designated and effective hedging instrument, or if upon
initial recognition it is thus designated to eliminate or significantly
reduce measurement or recognition inconsistency or it forms part
of a contract containing one or more embedded derivatives and
the contract is designated as fair value through profit or loss.
Financial liabilities at fair value through profit or loss are stated at
fair value. Any gains or losses arising of held for trading financial
liabilities are recognized in profit or loss. Such gains or losses
incorporate any interest paid and are included in the “other gains
and losses” line item.
Other financial liabilities (including borrowing and trade and other
payables) are subsequently measured at amortized cost using the
effective interest method.
The effective interest method is a method of calculating the
amortized cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
(including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial
liability, or (where appropriate) a shorter period, to the net carrying
amount on initial recognition.
A financial liability is derecognized only when the obligation is
extinguished, that is, when the obligation is discharged or cancelled
or expires. Changes in liabilities fair value that are reported in profit
or loss are included in the statement of profit and loss within
finance costs or finance income.
Financial assets and financial liabilities are offset and the net
amount is reported in the balance sheet when, and only when,
there is a legally enforceable right to offset the recognized amount
and there is intention either to settle on net basis or to realize the
assets and to settle the liabilities simultaneously.
m. taxes
Taxation on profit and loss comprises current tax and deferred tax.
Tax is recognized in the statement of profit and loss except to the
extent that it relates to items recognized directly in equity or other
comprehensive income in which case tax impact is also recognized
in equity or other comprehensive income.
EROS IntERnatIOnal MEdIa lIMItEd 65
Corporate overview | ManageMent report | financial management
Current tax is provided at amounts expected to be paid (or
recovered) using the tax rates and laws that have been enacted
or substantively enacted at the balance sheet date along with any
adjustment relating to tax payable in previous years.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred income tax is provided at amounts expected to be
paid (or recovered) using the tax rates and laws that have been
enacted or substantively enacted at the balance sheet date and
are expected to apply when the related deferred income tax asset
is realized or the deferred income tax liability is settled.
Deferred tax is not recognized for all taxable temporary differences
between the carrying amount and tax bases of investments
in subsidiaries, branches and associates and interest in joint
arrangements where it is probable that the differences will not
reverse in the foreseeable future.
Deferred tax assets and deferred tax liabilities are offset when
there is a legally enforceable right to set off assets against liabilities
representing current tax and where the deferred tax assets and the
deferred tax liabilities relate to taxes on income levied by the same
governing taxation laws.
Minimum alternate tax (MAT) paid in a year is charged to the
Statement of Profit and Loss as current tax. MAT credit entitlement
is recognised as a deferred tax asset only when and to the extent
there is convincing evidence that the Company will pay normal
income tax during the specified period, which is the period for
which MAT credit is allowed to be carried forward. Such asset is
reviewed at each Balance Sheet date and the carrying amount
of the MAT credit asset is written down to the extent there is no
longer a convincing evidence to the effect that the Company will
pay normal income tax during the specified period.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to utilize all
or part of the deferred tax asset. unrecognized deferred tax assets
are re-assessed at each reporting date and are recognized to the
extent that it has become probable that future taxable profits will
available to utilize the deferred tax asset.
n.
Earnings per share
Basic EPS is computed by dividing net profit after taxes for the year
by weighted average number of equity shares outstanding during
the financial year, adjusted for bonus share elements in equity
shares issued during the year and excluding treasury shares, if any.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs
associated with dilutive potential equity shares and the weighted
average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential
equity shares.
o. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short term highly liquid investments which
are readily convertible into known amounts of cash and are subject
to insignificant risk of changes in value. Bank overdrafts are shown
within borrowings in current liabilities on the balance sheet.
Deposits held with banks as security for overdraft facilities are
included in restricted deposits held with bank.
p.
Segment reporting
Ind-AS 108 Operating Segments (“Ind-AS 108”) requires operating
segments to be identified on the same basis as is used internally for
the review of performance and allocation of resources by the Chief
Operating Decision Maker. The revenues of films are earned over
66
AnnuAL REPORT 2018-19
various formats; all such formats are functional activities of filmed
entertainment and these activities take place on an integrated
basis. The management team reviews the financial information on
an integrated basis for the Company as a whole, with respective
heads of business for each region and in accordance with Ind-AS
108, the Company provides a geographical split as it considers
that all activities fall within one segment of business which is filmed
entertainment. The management team also monitors performance
separately for individual films or for at least 12 months after the
theatrical release.
The Company has identified three geographic markets: India, uAE
and Rest of the world.
q.
Statement of cash flows
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-
cash nature, any deferrals or accruals of past or future operating
cash receipts or payments and item of income or expenses
associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the Company
are segregated.
r.
dividends
The Company recognises a liability for dividends to equity
holders of the Company when the dividend is authorized and
the dividend is no longer at the discretion of the Company. As
per the corporate laws in India, a dividend is authorised when
it is approved by the shareholders. A corresponding amount is
recognised directly in equity.
s.
Event occurring after the reporting date
Adjusting events (that provides evidence of condition that existed
at the balance sheet date) occurring after the balance sheet date
are recognized in the financial statements. Material non-adjusting
events (that are inductive of conditions that arose subsequent to
the balance sheet date) occurring after the balance sheet date that
represents material change and commitment affecting the financial
position are disclosed in the Directors’ Report.
t.
Standards Issued but not yet Effective
Ministry of Corporate Affairs (“MCA”) through Companies (Indian
Accounting Standards) Amendment Rules, 2019 and Companies
(Indian Accounting Standards) Second Amendment Rules, has
notified the following new and amendments to Ind AS which the
Company has not applied as they are effective from 1 April 2019:
Ind aS 116 – leases
Ind AS 116 will replace the existing leasing standard i.e.
Ind AS 17 and related interpretations. Ind AS 116 introduces a
single lessee accounting model and requires lessee to recognize
assets and liabilities for all leases with non-cancellable period of
more than twelve months except for low value assets. Ind AS 116
substantially carries forward the lessor accounting requirements in
Ind AS 17. The Company does not expect any significant impact of
the amendment on its financial statements.
Ind aS 12 – Income taxes (amendments relating to income
tax consequences of dividend and uncertainty over income
tax treatments)
The amendment relating to income tax consequences of dividend
clarify that an entity shall recognise the income tax consequences
of dividends in profit or loss, other comprehensive income or
equity according to where the entity originally recognised those
past transactions or events. The Company does not expect any
impact from this pronouncement. It is relevant to note that the
amendment does not amend situations where the entity pays a
tax on dividend which is effectively a portion of dividends paid to
taxation authorities on behalf of shareholders. Such amount paid
or payable to taxation authorities continues to be charged to equity
as part of dividend, in accordance with Ind AS 12.
STANDALONE FiNANciAL STATEMENTS
The amendment to Appendix C of Ind AS 12 specifies that the
amendment is to be applied to the determination of taxable profit
(tax loss), tax bases, unused tax losses, unused tax credits and
tax rates, when there is uncertainty over income tax treatments
under Ind AS 12. It outlines the following: (1) the entity has to use
judgement, to determine whether each tax treatment should be
considered separately or whether some can be considered together.
The decision should be based on the approach which provides
better predictions of the resolution of the uncertainty (2) the entity
is to assume that the taxation authority will have full knowledge
of all relevant information while examining any amount (3) entity
has to consider the probability of the relevant taxation authority
accepting the tax treatment and the determination of taxable profit
(tax loss), tax bases, unused tax losses, unused tax credits and
tax rates would depend upon the probability. The Company does
not expect any significant impact of the amendment on its financial
statements.
Ind aS 109 – Prepayment Features with negative Compensation
The amendments relate to the existing requirements in Ind AS
109 regarding termination rights in order to allow measurement
at amortised cost (or, depending on the business model, at fair
value through other comprehensive income) even in the case of
negative compensation payments. The Company does not expect
this amendment to have any impact on its financial statements.
Ind aS 19 – Plan amendment, Curtailment or Settlement
The amendments clarify that if a plan amendment, curtailment or
settlement occurs, it is mandatory that the current service cost
and the net interest for the period after the re-measurement are
determined using the assumptions used for the re-measurement.
In addition, amendments have been included to clarify the
effect of a plan amendment, curtailment or settlement on the
requirements regarding the asset ceiling. The Company does
not expect this amendment to have any significant impact on its
financial statements.
Ind aS 23 – Borrowing Costs
The amendments clarify that if any specific borrowing remains
outstanding after the related asset is ready for its intended use
or sale, that borrowing becomes part of the funds that an entity
borrows generally when calculating the capitalisation rate on
general borrowings. The Company does not expect any impact
from this amendment.
Company based its assumptions and estimates on parameters
available when the financial statements were prepared and reviewed
at each balance sheet date. uncertainty about these assumptions
and estimates could result in outcomes that may require a material
adjustment to the reported amounts and disclosures.
a.
Intangible assets
The Company is required to identify and assess the useful life
of intangible assets and determine their income generating life.
Judgment is required in determining this and then providing an
amortization rate to match this life as well as considering the
recoverability or conversion of advances made in respect of
securing film content or the services of talent associated with film
production.
Accounting for the film content requires Management’s judgment
as it relates to total revenues to be received and costs to be incurred
throughout the life of each film or its license period, whichever is the
shorter. These judgments are used to determine the amortization
of capitalized film content costs. The Company uses a stepped
method of amortization on first release film content writing off
more in year one which recognizes initial income flows and then
the balance over a period of up to nine years. In the case of film
content that is acquired by the Company after its initial exploitation,
commonly referred to as Library, amortization is spread evenly over
the lesser of 10 years or the license period. Management’s policy
is based upon factors such as historical performance of similar
films, the star power of the lead actors and actresses and others.
Management regularly reviews, and revises when necessary, its
estimates, which may result in a change in the rate of amortization
and/or a write down of the asset to the recoverable amount.
Intangible assets are tested for impairment in accordance with
the accounting policy. These calculations require judgments and
estimates to be made, and in the event of an unforeseen event
these judgments and assumptions would need to be revised and
the value of the intangible assets could be affected. There may be
instances where the useful life of an asset is shortened to reflect the
uncertainty of its estimated income generating life.
b.
Employee benefit plans
The cost of the employment benefit plans and their present value
are determined using actuarial valuations which involves making
various assumptions that may differ from actual developments in
the future. For further details refer to note 41.
Ind aS 28 – long-term Interests in associates and Joint Ventures
c.
Fair value measurement of ESOP liability
The amendments clarify that an entity applies Ind AS 109 Financial
Instruments, to long-term interests in an associate or joint venture
that form part of the net investment in the associate or joint venture
but to which the equity method is not applied. The Company
does not currently have any long-term interests in associates and
joint ventures.
Ind aS 103 – Business Combinations and Ind aS 111 – Joint
arrangements
The amendments to Ind AS 103 relating to re-measurement clarify
that when an entity obtains control of a business that is a joint
operation, it re-measures previously held interests in that business.
The amendments to Ind AS 111 clarify that when an entity obtains
joint control of a business that is a joint operation, the entity does not
remeasure previously held interests in that business. The Company
will apply the pronouncement if and when it obtains control /joint
control of a business that is a joint operation.
2.
Significant
assumptions
accounting
judgements
estimates
and
The preparation of the financial statements requires management
to make judgements, estimates and assumptions, as described
below, that affect the reported amounts and the disclosures. The
The fair value of ESOP Liability is determined using valuation
methods which involves making various assumptions that may
differ from actual developments in the future. For further details
refer note 41.
d.
trade receivable
Judgements are required in assessing the recoverability of overdue
trade receivables and determining whether a provision against
those receivables is required. Factors considered include the
amount and timing of anticipated future payments and any possible
actions that can be taken to mitigate the risk of non-payment.
e. depreciation
Property, plant and equipment are depreciated over the estimated
useful lives of the assets, after taking into account their estimated
residual value. Management reviews the estimated useful lives and
residual values of the assets annually in order to determine the amount
of depreciation to be recorded during any reporting period. The useful
lives and residual values are based on the Company’s historical
experience with similar assets and take into account anticipated
technological changes. The depreciation for future periods is adjusted
if there are significant changes from previous estimates.
EROS IntERnatIOnal MEdIa lIMItEd 67
Corporate overview | ManageMent report | financial management
f.
Impairment of non-financial assets
In assessing impairment, management estimates the recoverable
amount of each asset or cash-generating unit based on expected
future cash flows and uses an interest rate to discount them.
future
Estimation uncertainty relates to assumptions about
operating results and the determination of a suitable discount rate.
g. Provisions
Provisions and liabilities are recognized in the period when it
becomes probable that there will be a future outflow of funds
resulting from past operations or events and the amount of cash
outflow can be reliably estimated. The timing of recognition and
quantification of the liability require the application of judgment
to existing facts and circumstances, which can be subject to
change. Since the cash outflows can take place many years in
the future, the carrying amounts of provisions and liabilities are
reviewed regularly and adjusted to take account of changing facts
and circumstances.
h.
Fair value measurement
Management uses valuation techniques to determine the fair value of
financial instruments (where active market quotes are not available)
and non-financial assets. This involves developing estimates and
assumptions consistent with how market participants would price
the instrument. Management bases its assumptions on observable
data as far as possible, but this is not always available. In that
case management uses the best information available. Estimated
fair values may vary from the actual prices that would be achieved
in an arm’s length transaction at the reporting date.
68
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
3
Property, plant and equipment
details of the Company’s property, plant and equipment and their carrying amounts are as follows:
Amount ` in lakhs
Gross carrying
amount
Buildings
leasehold
improvements
Furniture
and
fixtures
Motor
vehicles
Office
equipment
data
processing
equipment
Studio
equipment
leasehold
assets
3,317
258
274
296
163
377
287
-
-
-
114
-
-
-
0
-
272
(88)
-
7
0
-
5
(8)
-
-
-
-
3,317
372
274
480
170
374
287
-
-
-
-
-
total
Capital
work in
progress
13
4,985
114
512
(7)
(103)
(114)
(114)
6
5,280
-
-
-
71
-
-
1
-
-
-
-
-
26
-
-
19
(3)
-
-
-
-
169
71
357
-
-
-
(71)
(3)
(71)
3,317
443
275
480
196
390
287
169
6
5,563
314
33
116
102
54
249
151
146
-
460
139
-
599
174
(0)
207
116
-
323
49
(0)
165
71
(83)
90
33
122
-
-
198
212
2,857
165
109
390
2,718
120
77
268
50
0
104
37
-
141
66
55
76
(8)
317
28
(3)
342
57
48
40
-
191
28
-
219
96
68
-
-
-
-
30
-
30
-
1,019
-
-
-
-
-
-
606
(91)
1,534
533
(3)
2,064
-
6
3,746
139
6
3,499
Balance as at
1 april 2017
Additions
Adjustments/ disposals
Capitalized during
the year
Balance as at
31 March 2018
Additions
Adjustments/ disposals
Capitalized during
the year
Balance as at
31 March 2019
accumulated
depreciation
Balance as at
1 april 2017
Depreciation charge
Adjustments/ disposals
Balance as at
31 March 2018
Depreciation charge
Adjustments/ disposals
Balance as at
31 March 2019
net carrying amount
Balance as at
31 March 2018
Balance as at
31 March 2019
1. The Company's immovable property situated in Mumbai, India is pledged against the borrowings as explained in note 19 and 25
2. The Company has used Indian GAAP carrying value of its Property, plant and equipment on date of transition as deemed cost, accordingly , the
net carrying amount as per Indian GAAP as on 1 April 2015 has been considered as gross carrying amount under Ind AS 101. Details of accumulated
depreciation as on 1 April 2015 are as under:-
Amount ` in lakhs
accumulated
depreciation as on
1 april 2015
791
-
426
191
95
435
1,220
-
3,158
EROS IntERnatIOnal MEdIa lIMItEd 69
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
4
Intangible assets
details of the Company’s Intangible assets and their carrying amounts are as follows:
Amount ` in lakhs
Film rights
Other intangible
assets
Gross carrying amount
Balance as at 1 april 2017
Additions
Transfer to film and content rights
Amount written off
Provision for doubtful advances
Balance as at 31 March 2018
Additions
Transfer to film and content rights
Amount written off
Provision for doubtful advances
Balance as at 31 March 2019
accumulated amortization
Balance as at 1 april 2017
Amortization charge
Balance as at 31 March 2018
Amortization charge
Balance as at 31 March 2019
net carrying amount
Balance as at 31 March 2018
Balance as at 31 March 2019
Content
advances
1,19,967
39,442
(21,773)
(228)
-
1,37,408
39,878
(28,938)
(2,226)
(1,687)
1,77,894
10,936
-
-
-
1,88,830
14,132
-
-
-
1,44,435
2,02,962
89,151
22,364
1,11,515
24,473
1,35,988
77,315
66,974
1,37,408
1,44,435
total
1,77,966
10,936
-
-
-
1,88,902
14,132
-
-
-
2,03,034
89,189
22,372
1,11,561
24,479
1,36,040
77,341
66,994
72
-
-
-
-
72
-
-
-
-
72
38
8
46
6
52
26
20
1.
The Company has used Indian GAAP carrying value of its intangible assets on date of transition as deemed cost, accordingly, the net
carrying amount as per Indian GAAP as on 1 April 2015 has been considered as gross carrying amount under Ind AS 101. Details of
accumulated amortization as on 1 April 2015 are as under:-
accumulated amortization as on 1 april 2015
223,210
119
223,329
5
Investments
a non current investments
unquoted equity shares
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
i) Investment in equity shares of subsidiaries accounted at cost
Eros International Films Private limited
19,930,300 (31 March 2018 : 19,930,300) equity shares of ` 10 each, fully paid-up
1,993
1,993
Eros animation Private limited
9,300 (31 March 2018 : 9,300) equity shares of ` 10 each, fully paid-up
Copsale limited
105,000 (31 March 2018 : 105,000) equity shares of uSD 1 each, fully paid-up
Big Screen Entertainment Private limited
6,400 (31 March 2018 : 6,400) equity shares of ` 10 each, fully paid-up
EyeQube Studios Private limited
9,999 (31 March 2018 : 9,999) equity shares of ` 10 each, fully paid-up
EM Publishing Private limited
9,900 (31 March 2018 : 9,900) equity shares of ` 10 each, fully paid-up
70
AnnuAL REPORT 2018-19
1
45
1
1
1
1
45
1
1
1
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
digicine PtE limited
100 (31 March 2018 : 100) equity shares of uSD 1 each, fully paid-up
Colour Yellow Productions Private limited
5,000 (31 March 2018 : 5,000) equity shares of ` 10 each, fully paid-up
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
0
1
0
1
ii) Investment in equity shares of subsidiaries measured at fair value through profit
and loss
Universal Power Systems Private limited#
5,530
5,492
1,000 (31 March 2018 : 1,000) equity shares of ` 100 each, fully paid-up
Less: Provision for impairment in the value of investment
total
*amount represents less than ` one lakh
Aggregate value of unquoted investments
Aggregate value of impairment in the value of investment
# Increase in value of investment is due to ESOP benefits provided to subsidiary
6
loans and advances
unsecured considered good,unless otherwise stated
Amounts due from related parties (refer note 43)
Other loans and advances
Considered good
total
7
Restricted bank deposits
Bank deposits with maturity of more than twelve months*
total
* Given as securities to bank for margin
8
Other financial assets
unsecured and considered good
Security deposits to
- Related parties (refer note 43)
- Others
total
(2,754)
4,819
7,573
2,754
(2,032)
5,503
7,535
2,032
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
39
39
1,632
1,671
1,682
1,721
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
511
511
716
716
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
582
61
643
617
55
672
EROS IntERnatIOnal MEdIa lIMItEd 71
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
9
Other non- current assets
(a) Advance payment of income taxes (net of provision)
(b) Balances due with statutory authorities
total
10
Inventories
VCD/ DVD/ Audio CDs
Film rights
total
11 trade receivables
Secured, considered good
unsecured, considered good
Dues from related parties (refer note 43)
unbilled Income
Less : Expected credit loss
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
177
4,077
4,254
177
2,774
2,951
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
-
301
301
9
178
187
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
1,327
55,703
16,604
1,322
74,956
(8,361)
66,595
1,327
34,035
8,791
290
44,443
(419)
44,024
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.
All accounts receivable are pledged against borrowing which are shown under note 19 and 25.
12 Cash and cash equivalents
a. Cash on hand
b. Cheques on hand
c. Balances with banks
In current account
total
13 Restricted bank deposits
unclaimed dividend account
Margin money accounts with:*
maturity less than 12 months
maturity more than twelve months
Less: disclosed under non current financial assets - Restricted deposits (refer note 7)
total
* Given as securities to bank for margin
72
AnnuAL REPORT 2018-19
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
47
-
221
268
7
5
373
385
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
1
1
5,981
511
6,493
(511)
5,982
3,775
716
4,492
(716)
3,776
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
14 loans and advances
unsecured and considered good
Amounts due from related parties (refer note 43)
Loans and advances to employees
Other loans
Security deposits
total
15 Other financial assets
Accrued interest on fixed deposits
Forward contract assets
total
16 Other current assets
Prepaid expenses
total
17 Equity share capital
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
124
76
1,272
9
1,481
2,662
146
392
5
3,205
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
228
-
228
110
184
294
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
243
243
55
55
` in lakhs, except share data
as at
31 March 2018
as at
31 March 2019
authorised share capital
Equity shares of ` 10 each
Issued, subscribed and fully paid- up
Equity shares of ` 10 each
total
a) Reconciliation of paid- up share capital (Equity Shares)
Balance at the beginning of the year
Add: Issued on exercise of employee share options
Balance at the end of the year
number
amount
number
amount
125,000,000
125,000,000
95,508,140
95,508,140
12,500
12,500
9,551
9,551
125,000,000
125,000,000
94,971,877
94,971,877
12,500
12,500
9,497
9,497
as at
31 March 2019
` in lakhs, except share data
as at
31 March 2018
number
94,971,877
536,263
95,508,140
amount
number
amount
9,497
54
9,551
93,858,717
1,113,160
94,971,877
9,385
112
9,497
During the year, the Company has issued total 5,36,263 equity shares (2018: 11,13,160 ) on exercise of options granted under the employees
stock option plan (ESOP) wherein part consideration was received in the form of employees services.
b)
Shares held by holding company, ultimate holding company, subsidiaries / associates of holding company or ultimate holding company
` in lakhs, except share data
Equity shares of ` 10 each
Eros Worldwide FZ LLC - Holding company
Eros Digital Private Limited - Fellow subsidiary
as at
31 March 2019
as at
31 March 2018
number
amount
number
amount
37,877,302
21,700,000
3,788
2,170
35,409,440
21,700,000
3,541
2,170
EROS IntERnatIOnal MEdIa lIMItEd 73
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
c) details of Shareholders holding more than 5% of the shares in the Company
` in lakhs, except share data
Equity shares of ` 10 each
Eros Worldwide FZ LLC - Holding company
Eros Digital Private Limited - Fellow subsidiary
as at
31 March 2019
as at
31 March 2018
number % holding in the
class
number % holding in the
class
37,877,302
21,700,000
39.66%
22.72%
35,409,440
21,700,000
37.28%
22.85%
d) details of employee stock options issued during the last 5 years
During the period of five years immediately preceding the reporting date, the Company has issued total 26,33,980 equity shares
(2018: 21,49,567) on exercise of options granted under the employees stock option plan (ESOP) wherein part consideration was received in the
form of employee services.
e) details of equity share issued for consideration other than cash during the last 5 years
During the period of five years immediately preceding the reporting date, the Company has issued total 900,970 equity shares
(31 March 2017: 900,970) to the shareholders of universal Power Systems Private Limited at a premium of ` 586 per share in exchange for the
entire shareholding of universal Power Systems Private Limited.
f)
Rights, preferences, restrictions of equity shares
The Company has only one class of equity shares having par value of ` 10 per share. Every holder is entitled to one vote per share. The dividend,
if any, proposed by the Board of Directors and approved by the Shareholders in the Annual General Meeting is paid in Indian rupees.
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.
18 Other equity
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
Securities premium
Balance at the beginning of the year
Add : Shares issued on employee stock options exercised during the year
Add : Transfer from share option outstanding account
Balance at the end of the year
Share options outstanding account
Balance at the beginning of the year
Less: Transfer to securities premium account
Add: Employee stock option compensation expense
Add: Employee stock option compensation expense to employee's of fellow subsidiary
Add: Employee stock option compensation expense to employee's of subsidiary
Balance at the end of the year
General reserve
Balance at the beginning of the year
Add: Additions during the year
Balance at the end of the year
Retained earnings
Balance at the beginning of the year
Add: net profit after tax for the year
Balance at the end of the year
Balance at the end of the year
Other comprehensive income
Balance at the beginning of the year
Acturial gain / (loss) on employee benefit plans through OCI
Balance at the end of the year
total
74
AnnuAL REPORT 2018-19
40,498
-
1,049
41,547
1,577
(1049)
761
18
37
1,344
526
-
526
92,055
8,736
100,791
46
40
86
38,141
247
2,110
40,498
2,645
(2,110)
834
28
180
1,577
526
-
526
84,354
7,701
92,055
(10)
56
46
144,294
134,702
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
1) Securities Premium Reserve: The amount received in excess of face value of the equity shares is recognized in Securities Premium Reserve.
2) General Reserve: General Reserve was created by transferring a portion of the net profit of the Company as per the requirements of the
Companies Act, 2013.
3)
Retained Earnings: Remaining portion of profits earned by the Company till date after appropriations.
19 long-term borrowings
Secured-at amortised cost
Term loan from banks*
Car loans **
Others***
Unsecured
Term loan from others#
Less: Cumulative effect of unamortised cost
Less: Current maturities disclosed under other current financial liabilities (refer note 27)
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
9,721
198
142
3,887
13,948
(71)
(5,179)
8,698
15,761
330
-
6,240
22,331
(196)
(7,194)
14,941
* Term loans from banks carry an interest rate between 12% - 14% are secured by pari passu first charge on the DVD/ satellite rights
acquired for the domestic market, actionable claims, revenue and receivables arising on sales of the rights and negatives of films. Term
loans are further secured by equitable mortgage of Company's immovable properties situated at Mumbai (India), amounts held as margin
money,corporate guarantee of Eros International PLC (the ultimate holding Company), residual value of equipments and vehicles and
existing rights of hindi films with nil book value.
** Car loans are secured by hypothecation of vehicles acquired there against, carrying rate of interest of 7.48%-9.50% which are repayable as per
maturity profile set out below.
*** Other loans are secured by hypothecation of assets acquired there against, carrying rate of interest of 10.50%-11.50% which are repayable
as per maturity profile set out below.
# Term loan from others carry an interest rate of 15% - 16% are secured against the pledge of Company's shares held by holding company, current
assets of a subsidiary company and corporate guarantee of holding company and subsidiary company.
Maturity profile of long term borrowing is set out below:-
Amount ` in lakhs
less than 1 year
1-3 years
3-5 years
Secured
Term loan from banks
Car loan
Others
Unsecured
Term loan from others
total
5,014
112
53
-
5,179
4,707
86
89
3,287
8,169
-
-
600
600
Default in repayment as on 31 March 2019
Period of delay
Principal due
Interest due
Term loan from others
Car loan
Others
total
26-53 days
-
-
-
283
-
-
283
161
-
-
161
EROS IntERnatIOnal MEdIa lIMItEd 75
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
20 trade payable - non current
Payable to related parties (refer note 43)
total
21 Other financial liabilities
Security deposits
total
22 Employee benefit obligations - non current
Provision for gratuity (refer note 41)
total
23 deferred tax liabilities (net)
deferred tax liability on
Depreciation on tangible assets
Amortization of intangible assets
total
deferred tax asset on
Provision for expenses allowed on payment basis
Provision for doubtful debts
Provision for doubtful advances
Others
MAT credit recoverable
total
deferred tax liabilities (net)
Reconciliation of statutory rate of tax and effective rate of tax
Profit before tax
Tax expense
tax rate as a % of profit before tax
adjustments
non-deductible expenses for tax purposes
Effect of change in deferred tax balances due to change in tax rates
Tax impact of earlier years
Effect of unrecognized deferred tax assets
Others
at India’s statutory income tax rate of 34.94% (Previous year: 34.61%)
24 Other non-current liabilities
Deferred revenue
total
76
AnnuAL REPORT 2018-19
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
108
108
102
102
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
25
25
-
-
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
378
378
425
425
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
77
23,224
23,301
981
2,922
589
51
-
4,543
18,758
107
26,795
26,902
971
146
-
53
511
1,681
25,221
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
13,677
4,941
36.13%
-3.35%
0%
4.37%
-1.84%
-0.37%
34.94%
14,043
6,342
45.16%
-2.19%
-1.76%
-2.88%
-3.65%
-0.07%
34.61%
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
10,050
10,050
1,512
1,512
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
25 Short-term borrowings
Repayable on demand
Secured
From banks
Unsecured
From others*
From related parties (refer note 43)
total
Secured short term borrowings include:
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
38,605
38,813
2,400
5,791
46,796
4,000
5,808
48,621
Cash credit carry an interest rate between 10% - 13% , secured by way of hypothecation of inventories and receivables relating to domestic rights
operations on pari passu basis.
Bills discounted carry an interest rate between 10% - 11% for ` bills and LIBOR +3.5% for uSD bills, secured by document of title to goods and
accepted hundis with first pari passu charge on current assets.
Packing credit carry an interest rate between 10% - 11% for ` and LIBOR +3.5% for uSD, secured by hypothecation of films and film rights with
first pari passu charge on current assets.
Short term borrowings are further secured by equitable mortgage of Company's immovable properties situated at Mumbai (India), amount held
in margin money, corporate guarantee of Eros International Plc (the ultimate holding company),residual value of equipments and existing rights
of hindi films with nil book value.
*Loan from others carry an interest rate between 14% - 15% , secured by security provided by holding company.
26 acceptances
Payable under the film financing arrangements
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
5,796
5,796
5,796
5,796
Acceptances comprise of credit availed from banks for payment to film producers for film co-production arrangement entered by the group. The
carrying value of acceptances are considered a reasonable approximation of fair value.
27 Other financial liabilities
Current maturities of long term borrowings (refer note 19)
Interest accrued but not due
Interest accrued and due
unclaimed dividend*
Employee dues
Other payables
Other payable to related party (refer note 43 )
Forward contract liabilities
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
5,179
135
161
1
609
526
252
430
7,194
294
-
1
364
394
274
-
7,293
8,521
* Does not include any amount due and outstanding to be credited to Investor Education and Protection Fund.
28 Employee benefit obligations - current
Gratuity
Compensated absences
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
111
248
359
53
159
212
EROS IntERnatIOnal MEdIa lIMItEd 77
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
29 Current tax liabilities
Provision for corporate taxes (net)
total
30 Other current liabilities
Advance from customers- related parties (refer note 43)
Advances from customers- others
Deferred revenue
Duties and taxes payable
total
31 Revenue from operations (net)
Revenue from distribution and exhibition of film and other rights
Revenue from services
total
32 Other income
Sundry balances written back
Interest income on advances
unwinding of interest on expected credit loss
Other non-operating income
Gain on sale of tangible assets (net)
Bad debts recovered
Income from export incentives
total
33 Film right cost including amortization costs
Amortization of film rights (refer note 4)
Film rights cost
total
34 Changes in inventories of film rights
Opening stock
- Finished goods
Closing stock
- Finished goods
total
78
AnnuAL REPORT 2018-19
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
11,235
11,235
3,506
3,506
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
14,049
906
781
7,130
22,866
3,457
1,145
2,449
6,251
13,302
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
83,560
4
83,564
70,678
88
70,766
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
45
42
-
1,710
1
-
1,618
3,416
69
499
409
1,104
-
10
-
2,091
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
24,473
14,805
39,278
22,364
10,837
33,201
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
187
187
301
301
(114)
45
45
187
187
(142)
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
35 Employee benefits expense
Salaries and bonus
Contribution to provident and other funds (refer note 41)
Gratuity expense (refer note 41)
Employee stock option compensation (refer note 41)
Staff welfare expenses
total
36 Finance cost
Interest expense
Other borrowing costs
Interest on late payment of taxes
Less: Interest capitalised to film rights
Less: Interest income
total
The capitalisation rate of interest was 12.12 % (previous year : 10.91 %)
37 depreciation and amortization expense
Depreciation on tangible assets (refer note 3)
Amortization on intangible assets (refer note 4)
total
38 Other expenses
Print and digital distribution cost
Selling and distribution expenses
Processing and other direct cost
Shipping, packing and forwarding expenses
Home entertainment products related cost
Power and fuel
Rent
Repairs and maintenance
Insurance
Rates and taxes
Legal and professional
Payments to auditors (refer note 47)
Provision for doubtful receivables
Provision for doubtful advances (refer note 4 )
Communication expenses
Travelling and conveyance
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
3,012
3,328
167
117
761
84
184
196
834
83
4,141
4,625
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
9,163
449
1,642
11,254
(3,017)
(334)
7,903
7,950
399
1,518
9,867
(2,115)
(264)
7,488
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
535
4
539
607
8
615
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
838
2,670
195
69
0
53
371
120
29
35
1,432
89
7,942
1,687
67
283
1,182
3,491
208
72
23
53
328
130
18
11
1,371
92
-
-
57
208
EROS IntERnatIOnal MEdIa lIMItEd 79
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
Content advances written off (refer note 4)
Advances and deposits written off
Loss on disposal of fixed assets (net)
Trade receivables written off
Provision for impairment in the value of investment
Loss on foreign currency transactions and translation (net)
CSR expenditure (refer note 49)
Miscellaneous expenses
total
39 Earnings per share
Year ended
31 March 2019
Year ended
31 March 2018
2,226
298
-
1,917
722
62
20
431
228
0
1
3,539
1,480
68
0
467
21,556
13,027
Year ended
31 March 2019
Year ended
31 March 2018
a) Computation of net profit for the year
net profit after tax attributable to equity shareholders (` in lakhs)
8,736
7,701
b) Computation of number of shares for Basic Earnings per share
Weighted average number of equity shares
total
c) Computation of number of shares for diluted Earnings per share
95,205,870
94,524,136
95,205,870
94,524,136
Weighted average number of equity shares used in the calculation of basic earning per share
95,205,870
94,524,136
Add:- Weighted average potential equity shares (dilutive impact of ESOPs)
Weighted average number of equity shares used in the calculation of diluted earning
per share
828,067
1,342,648
96,033,937
95,866,784
d) nominal value of shares (in `)
e) Computation
Basic (in `)
Diluted (in `)
10
9.18
9.10
10
8.15
8.03
40 Contingent liabilities and commitments (to the extent not provided for)
Amount ` in lakhs
a) Contingent liabilities
(i) Claims against the Company not acknowledged as debt
Sales tax claims disputed by the Company
Service tax claim disputed by the Company
Income tax liability that may arise in respect of matters in appeal
(ii) Guarantees
Guarantee given in favour of various government authorities
as at
31 March 2019
as at
31 March 2018
717
34,506
105
35
35,363
669
30,811
79
25
31,584
80
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
notes:
1) During the year ended 31 March 2015, the Company received a show cause notice from the Commissioner of Service Tax to show cause why
an amount aggregating to ` 15,675 lakhs for the period 1 April 2009 to 31 March 2014 should not be levied on and paid by the Company for
service tax arising on temporary transfer of copyright services and other matters.
In connection with the aforementioned matters, on 19 May 2015, the Company received an Order-in-original issued by the Principal Commissioner,
Service Tax, wherein the department confirmed the demand of ` 15,675 lakhs along with interest and penalty amounting to ` 15,675 lakhs
resulting into a total demand of ` 31,350 lakhs.
On 3 September 2015, the Company filed an appeal against the said order before the authorities. The Company has paid
` 1,000 lakhs under protest. Considering the facts and nature of levies and the ad-interim protection for the period 1 July 2010 to 30 June 2012
granted by the Honorable High Court of Mumbai, the Company expects that the final outcome of this matter will be favourable. Accordingly,
based on the assessment made after taking appropriate legal advise, no additional liability has been recorded in the financial statements.
2) Company has received notice for reversal of CEnVAT credit for the period 2013-14 to 2015-16 ` 187 lakhs and for the period January 2016
to March 2017 ` 204 lakhs. Further Company also received notice for non levy of Service tax on Import of Services for the period 2013-14 to
2015-16 for ` 70 lakhs.
3) On 8 October 2018, the Company received a show cause notice from the Commissioner of Service Tax to show cause why an amount
aggregating to ` 2,695 lakhs for the period 1 April 2014 to 31 March 2015 should not be levied on and paid by the Company for service tax with
equal penalty arising on temporary / perpatual transfer of copyright services and other matters.
4)
5)
6)
In addition, the Company is liable to pay service tax on use on temporary transfer of copyright in the period 1 July 2010 to 30 June 2012.
The Company filed a writ petition in Mumbai High Court challenging the constitutionality and the legality of this entry and received ad-interim
protection and accordingly, no amounts were provided for by the Company for the period 1 April 2011 to 30 June 2012.
It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above, pending resolution of the respective
proceedings.
From time to time, the ‘Company’ is involved in legal proceedings arising in the ordinary course of its business, typically intellectual property
litigation and infringement claims related to the Company's feature films and other commercial activities, which could cause the Company to incur
expenses or prevent the Company from releasing a film. While the resolution of these matters cannot be predicted with certainty, the Company
does not believe, based on current knowledge or informatiotn available, that any existing legal proceedings or claims are likely to have a material
and adverse effect on its financial position, results of operations or cash flows.
7)
The Company does not expect any reimbursements in respect of the above contingent liabilities.
b) Commitments
Estimated amount of contracts remaining to be executed on content commitments
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
167,082
167,082
202,445
171,911
171,911
203,495
EROS IntERnatIOnal MEdIa lIMItEd 81
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
41 Employment benefits
a) Gratuity (unfunded)
The following table set out the status of the gratuity plan as required under Indian Accounting Standard (Ind AS) - 19, Employee benefits, and
the reconciliation of opening and closing balances of the present value of the defined benefit obligation:
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
I Change in projected benefit obligation
Liability at the beginning of the year
Interest cost
Current service cost
Past service cost
Benefits paid
Actuarial loss/(gain) on obligations
Liability at the end of the year
Current portion
non-current portion
II Recognized in Balance Sheet
Liability at the end of the year
amount recognized in Balance Sheet
III Expense recognized in Statement of Profit and loss
Current service cost
Interest cost
Past service cost
Expense recognized in Statement of Profit and loss
IV Expense recognized in Other Comprehensive Income
Arising from changes in experience
Arising from changes in financial assumptions
Arising from changes in demographic assumptions
Expense/(income) recognized in Other comprehensive income
*Actuarial (gain)/loss of ` 61 lakhs (31 March 2018: ` 86 lakhs) is included in other
comprehensive income.
V assumptions used
Discount rate
Long-term rate of compensation increase
Attrition Rate
Expected average remaining working life in years
478
38
79
-
(45)
(61)
489
111
378
489
489
79
38
-
117
(27)
9
(43)
(61)
389
29
63
104
(21)
(86)
478
53
425
478
478
63
29
104
196
(66)
(20)
-
(86)
7.22%
9.71%
13.00%
6.00
7.85%
10.00%
2.00%
17.00
82
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
VI a quantitative sensitivity analysis for significant assumption as at 31 March 2019 is as shown below:
Impact on defined benefit obligation
Projected benefit obligation on current assumption
Discount rate
1.00 % increase
1.00 % decrease
Salary growth rate
1.00 % increase
1.00 % decrease
Employee turnover
1.00 % increase
1.00 % decrease
VII Maturity profile of defined benefit obligation
Year 1
Year 2
Year 3
Year 4
Year 5
Sum of Years 6-10
Sum of Years 11 and above
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
489
(23)
26
20
(19)
(4)
4
478
(54)
65
43
(42)
(6)
7
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
111
46
45
54
42
199
284
53
18
11
11
30
121
1,446
VIII
Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring
higher provision.
Ix Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an
increase in the salary of the members more than assumed level will increase the plan's liability.
x
asset liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Company has to manage pay-out based on
pay as you go basis from own funds
xI Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any
longevity risk.
b) Compensated absences
The Company incurred ` 112 lakhs (31 March 2018 : ` 29 lakhs) towards accrual for compensated absences during the year.
c) Provident fund
The Company contributed ` 156 lakhs (31 March 2018 : ` 168 lakhs) to the provident fund plan, ` 5 lakhs (31 March 2018 : ` 5 lakhs) to the Employee
state insurance plan and ` 6 lakhs (31 March 2018 : ` 11 lakhs) to the national Pension Scheme during the year.
d) Share-based payment transactions
The Company has instituted Employees’ Stock Option Plan “ESOP 2009” and "ESOS 2017" under which the stock options
have been granted to employees. The scheme was approved by the shareholders at the Extra Ordinary General Meeting held on
4 December 2009 and Annual General Meeting held on 29 September 2017 respectively. The details of activity under the ESOP 2009 scheme
are summarized below:
EROS IntERnatIOnal MEdIa lIMItEd 83
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
the expense recognized for employee services received during the year is shown in the following table:
Expense arising from equity-settled share-based payment transactions
There were no cancellations or modifications to the awards in 31 March 2019 or 31 March 2018.
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
761
834
Movements during the year
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:
Outstanding at 1 April
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding at 31 March
Exercisable at 31 March
Range of exercise price of outstanding options (`)
Weighted average remaining contractual life of option
* WAEP denotes weighted average exercise price of the option
as at 31 March 2019
as at 31 March 2018
number
WaEP*
number
WaEP*
1,624,034
-
(329,886)
(536,263)
757,885
289,002
29
-
52
10
32
68
2,108,063
863,320
(234,189)
(1,113,160)
1,624,034
911,854
36
10
10
32
29
71
` 10-150
2.96 Years
` 10-175
2.96 Years
Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:
date of grant
Particulars
17-dec-09 12-aug-10 1-Jul-12 14-Oct-13 12-nov-14 12-Feb-15 9-Feb-16 10-Feb-17 14-nov-17 10-Feb-18
Dividend yield (%)
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
Expected volatility
75.00% 60.00% 44.00%
35.00% 40.11% 37.84% 46.46% 48.66% 56.53% 53.15%
Risk free interest rate
6.30%
6.50%
8.36%
8.57%
8.50%
7.74%
7.49%
6.51%
6.90%
7.38%
Exercise price
75-175
75-135
Expected life of options
granted in years
5.25
5.25
75
5.50
150
10
10
10
4.50 A s p e r
Ta b l e
1 . 1
10
4.27
10
3.50
10
4.50
table 1.1
Expected life of options granted in years
Option Grant date
9-Feb-16
12-Feb-15
12-nov-14
Year I
Year II
Year III
Old Employees new Employees Old Employees new Employees Old Employees new Employees
3.50
4.50
5.50
4.50
5.50
6.50
3.00
3.50
4.00
3.00
4.00
4.50
3.50
4.50
5.50
4.50
5.50
6.50
The expected life of options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may
occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future
trends, which may differ from the actual.
84
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
42 Operating Segment
description of segment and principal activities
The Company acquires, co-produces and distributes Indian films in multiple formats worldwide. Film content is monitored and strategic decisions
around the business operations are made based on the film content, whether it is new release or library. Hence, Management identifies only
one operating segment in the business, film content. The Company distributes film content to the Indian population in India and worldwide and
to non-Indian consumers who view Indian films that are subtitled or dubbed in local languages. As a result of these distribution activities, the
management examines the performance of the business from a geographical market perspective.
Revenue by region of domicile of customer's location
India
united Arab Emirates*
Rest of the world
total revenue
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
65,822
17,313
429
83,564
60,084
10,382
300
70,766
For the year ended 31 March 2019 and 31 March 2018 no third party customers accounted for more than 10% of the entity's total revenues.
* Sales to united Arab Emirates includes sales to its related party Eros Worldwide FZ LLC.
non-current assets other than financial instruments, investments accounted for using equity method and income taxes
non-current assets
India
united Arab Emirates
Rest of the world
total non-current assets
43 Related party disclosures
a) Parent entity
Relationship
ultimate holding Company
Holding Company
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
220,360
-
2,357
222,717
220,107
-
2,558
222,665
name
Eros International PlC
Eros Worldwide FZ llC
EROS IntERnatIOnal MEdIa lIMItEd 85
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
b) Subsidiaries
Relationship
name
Subsidiary companies
Eros International Films Private Limited
Copsale Limited
Big Screen Entertainment Private Limited
EyeQube Studios Private Limited
EM Publishing Private Limited
Eros Animation Private Limited
Digicine PTE Limited
Colour Yellow Productions Private Limited
universal Power Systems Private Limited
Ayngaran International Limited (Isle of Man) (upto 30-09-2017) **
Ayngaran International uK Limited (upto 30-09-2017) **
Ayngaran International Mauritius Limited (upto 30-09-2017) **
Ayngaran International Media Private Limited (upto 30-09-2017) **
Ayngaran Anak Media Private Limited (upto 30-09-2017) **
**The Company has divested five subsidiaries w.e.f. 1 October, 2017.
List of Key management personnel (KMP)
Mr. Sunil Lulla – Executive Vice Chairman & Managing Director
Mr. Kishore Lulla – Executive Director
Ms. Jyoti Deshpande – Executive Director (upto 31 March 2018)
Mr. Dinesh Modi -Group Chief Financial Officer (India) (upto 8 March 2018)
Mr. Farokh Gandhi - Chief Financial Officer (India) (w.e.f. 9 March 2018)
Ms. Dimple Mehta - Vice President Company Secretary and Compliance Officer
(upto 14 December 2017)
Mr. Abhishekh Kanoi - Vice President Company Secretary and Compliance Officer
(w.e.f. 15 December 2017)
Relatives of KMP with whom transactions exist
Mrs. Manjula K Lulla (wife of Mr. Kishore Lulla)
Mrs. Krishika Lulla (wife of Mr. Sunil Lulla)
Entities over which KMP exercise significant
influence
Shivam Enterprises
Fellow subsidiary company
Eros Digital Private Limited
Eros Television India Private Limited
Eros International Limited, united Kingdom
Eros Digital FZ LLC
86
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
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EROS IntERnatIOnal MEdIa lIMItEd 87
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
c
(ii) transactions during the year with related parties
Sale of film rights
Eros Worldwide FZ LLC
universal Power Systems Private Limited
total
Revenue attributable to Eros Digital FZ LLC
Producer Share to Colour Yellow Productions Privated Limited
Sale of prints/VCd/dVd
Eros Worldwide FZ LLC
total
Purchase of film rights
Eros International Films Private Limited
Colour Yellow Productions Private Limited
total
Re-imbursement of administrative expense
Eros Worldwide FZ LLC
Eros Digital FZ LLC
Eros International Films Private Limited
Big Screen Entertainment Private Limited
Ayngaran International Media Private Limited
Ayngaran Anak Media Private Limited
total
*amount represents less than ` one lakh
Re-imbursement given
Eros International Films Private Limited
Colour Yellow Productions Private Limited
total
assets Usage Charges paid
EyeQube Studios Private Limited
total
Commission expenses
universal Power Systems Private Limited
EM Publishing Private Limited
total
Other Income
Big Screen Entertainment Private Limited
Colour Yellow Productions Private Limited
total
Investment in
universal Power Systems Private Limited
total
Rent expenses
Mr. Sunil Arjan Lulla
Mrs. Manjula K Lulla
Mr. Kishore Arjan Lulla
total
88
AnnuAL REPORT 2018-19
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
15,985
40
16,025
(9,207)
(31)
2
2
161
5,964
6,125
69
8,751
12
-
-
-
10,592
9
10,601
(9,769)
-
6
6
651
3,288
3,939
460
6,834
12
0
0
0
8,832
7,306
62
122
184
7
7
6
4
10
-
84
84
37
37
384
36
348
768
-
58
58
-
-
8
-
8
1
-
1
180
180
276
36
240
552
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
Interest income
EyeQube Studios Private Limited
Eros International Limited
universal Power Systems Private Limited
total
Interest expenses
Eros Digital Private Limited
Eros Television India Private Limited
Eros International Films Private Limited
total
Salary, commission and perquisites* to KMPs
Mr. Sunil Arjan Lulla
Mr. Kishore Arjan Lulla
Mrs. Jyoti Deshpande
Mrs. Krishika Lulla
Mr. Dinesh Modi** - Chief Financial Officer (India) (upto 8 March 2018)
Mr. Farokh P. Gandhi - Chief Financial Officer (w.e.f. 9 March 2018)
Mrs. Dimple Mehta**
Mr. Abhishekh Kanoi**
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
3
-
29
32
54
-
782
836
480
140
-
86
-
84
-
36
3
432
24
459
49
482
186
717
438
128
714
86
220
5
53
14
826
1,658
* Perquisites to KMP have been valued as per Income tax Act, 1961 and rules framed thereunder or at actuals as the case may be.
** Excludes ` 9 lakhs (31 March 2018 : ` 72 lakhs) charged to Statement of Profit and loss on account of stock Compensation for
awards granted.
d)
transactions with related parties
Content advances given
Eros International Limited
Colour Yellow Productions Private Limited
total
loan and advances given
Ayngaran International Media Private Limited
EyeQube Studios Private Limited
Eros Animation Private Limited
EM Publishing Private Limited
universal Power Systems Private Limited
Copsale Limited
Eros Television India Private Limited
total
Refund of content advances
Eros International Limited
total
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
-
6,478
6,478
-
10
1
4
800
-
-
815
-
-
7,414
6,201
13,615
8
3
0
0
2,856
1,516
65
4,448
12,603
12,603
EROS IntERnatIOnal MEdIa lIMItEd 89
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
Recovery of loans and advances given
universal Power System Private Limited
Ayngaran International Media Private Limited
Ayngaran Anak Media Private Limited
Eros Television India Private Limited
Copsale Limited
EyeQube Studios Private Limited
Eros International Limited
total
trade advances/ loans taken
Eros Worldwide FZ LLC
Eros Digital Private Limited
Eros Television India Private Limited
Eros International Films Private Limited
total
Repayment of advances/ loans
Eros Digital Private Limited
Big Screen Entertainment Private Limited
Eros Television India Private Limited
Eros International Films Private Limited
total
Refund of deposits
Mr. Sunil Arjan Lulla
total
e) Balances with related parties
trade balances due from
Eros Worldwide FZ LLC
Eros Digital FZ LLC
total
trade balances due to
Eros International Limited
Big Screen Entertainment Private Limited
Colour Yellow Productions Private Limited
universal Power System Private Limited
Eros Digital FZ LLC
total
advances due to
Eros Worldwide FZ LLC
universal Power Systems Private Limited
total
90
AnnuAL REPORT 2018-19
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
1,624
-
-
-
1,516
8
222
3,370
10,596
75
-
2,267
12,938
81
8
-
3,325
3,414
35
35
2,044
794
0
62
-
-
-
2,900
3,257
-
610
8,656
12,523
23
22
5,254
4,939
10,238
33
33
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
10,623
5,981
16,604
108
98
2,971
-
9,652
12,829
14,048
-
14,048
6,477
2,314
8,791
102
105
2,271
24
7,267
9,769
3,452
5
3,457
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
loans due to
Eros Digital Private Limited
Eros International Films Private Limited
total
Content advances given to
Colour Yellow Productions Private Limited
total
loans and advances due from
Shivam Enterprises
EM Publishing Private Limited
Digicine Pte Limited
EyeQube Studios Private Limited
universal Power System Private Limited
Eros Animation Private Limited
Mrs. Krishika Lulla
Eros Television India Private Limited
Copsale Limited
Eros International Limited
total
Security deposits/amounts due from KMPs or their relatives
Mr. Sunil Arjan Lulla
Mrs. Manjula K. Lulla
Mr. Kishore Arjan Lulla
total
amounts due to KMPs or their relatives
Mr. Sunil Arjan Lulla
Mr. Kishore Arjan Lulla
Mrs. Manjula K. Lulla
total
Terms and conditions
All outstanding balances are unsecured and repayable in cash.
44 Categories of financial assets and financial liabilities
The carrying value of financial instruments by categories are as follows:
Financial assets
Measured at fair value through Statement of Profit and loss
Investments*
total
Measured at amortised cost
Loans and advances
Restricted deposits
Other financial assets
Trade receivables
Cash and cash equivalents
total
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
528
5,263
5,791
7,177
7,177
39
20
36
28
35
2
0
3
-
0
163
267
75
240
582
39
149
64
252
480
5,328
5,808
6,722
6,722
39
20
34
30
836
1
-
3
1,516
222
2,701
302
75
240
617
117
115
42
274
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
2,776
2,776
3,152
6,493
871
66,595
268
77,379
3,460
3,460
4,926
4,492
966
44,024
385
54,793
EROS IntERnatIOnal MEdIa lIMItEd 91
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
Measured at fair value through Statement of Profit and loss
Financial liabilities
Measured at fair value through profit and loss
Forward contract liabilities
total
Measured at amortised cost
Borrowings
Acceptance
Trade payables
Other financial liabilities
total
* Exclude financial instruments of investment in subsidiaries carried at cost.
45 Fair value measurement of financial instruments
as at
31 March 2019
as at
31 March 2018
430
430
55,494
5,796
19,537
6,888
87,715
-
-
63,562
5,796
17,125
8,521
95,004
Financial assets and financial liabilities measured at fair value in the balance sheet are grouped into three Levels of a fair value hierarchy. The three
Levels are defined based in the observability of significant inputs to the measurement, as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e as price) or indirectly
(i.e. derived from price)
Level 3: unobservable inputs for the asset or liability
a.
the following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a
recurring basis:
Particulars
Financial assets
Measured at fair value through Statement of Profit
and Loss
Investments*
total
Financial liabilities
Measured at fair value through Statement of Profit and loss
Forward contract liabilities
total
as at
31 March 2019
level 1
level 2
level 3
Amount ` in lakhs
2,776
2,776
430
430
2,776
2,776
-
-
-
-
-
-
430
430
b.
the following table shows the financial assets and liabilities measured at amortised cost on a recurring basis:
as at
31 March 2019
level 1
level 2
level 3
Amount ` in lakhs
Particulars
Measured at amortised cost
Financial assets
Loans and advances
Restricted bank deposits
Other financial assets-non current
Other financial assets- Current
Trade receivables
Cash and cash equivalents
total
Financial liabilities
Measured at amortised cost
Borrowings-non current
Borrowings-Current
Acceptance
Trade payables
Other financial liabilities
total
* Exclude financial instruments of investment in subsidiaries carried at cost.
92
AnnuAL REPORT 2018-19
3,152
6,493
643
228
66,595
268
77,379
8,698
46,796
5,796
19,537
6,888
87,715
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
643
-
-
-
643
8,698
-
-
-
-
8,698
-
-
-
-
-
-
-
-
-
-
-
-
-
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
During the year ended 31 March 2018 there was no transfers between level 2 and level 3 fair value hierarchy.
Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities and short term
borrowings carried at amortised cost is not materially different from its carrying cost largely due to short term maturities of these financial assets
and liabilities
Fair value of the borrowing items fall within level 2 of the fair value hierarchy and is calculated on the basis of discounted future cash flows.
non-listed shares and other securities fall within level 3 of the fair value hierarchy. Valuation is based on the discounted future cash flow method.
Financial instruments with fixed and variable interest rate fall within level 2 of the fair value hierarchy and are evaluated by Company based on
parameters such as interest rate, credit rating or assessed credit worthiness.
a. the following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring
basis:
Particulars
Financial assets
Measured at fair value through Statement of Profit
and loss
Investments*
total
as at
31 March 2018
level 1
level 2
level 3
Amount ` in lakhs
3,460
3,460
-
-
-
-
3,460
3,460
b.
the following table shows the financial assets and liabilities measured at amortised cost on a recurring basis:
Particulars
Measured at amortised cost
Loans
Restricted bank deposits
Other financial assets-non current
Other financial assets- Current
Trade receivables
Cash and cash equivalents
total
Financial liabilities
Measured at amortised cost
Borrowings-non current
Borrowings- Current
Acceptance
Trade payables
Other financial liabilities
total
as at
31 March 2018
level 1
level 2
level 3
Amount ` in lakhs
4,926
4,492
672
294
44,024
385
54,793
14,941
48,621
5,796
17,125
8,521
95,004
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
672
-
-
-
672
14,941
-
-
-
-
14,941
-
-
-
-
-
-
-
-
-
-
-
-
-
* Exclude financial instruments of investment in subsidiaries carried at cost.
During the year ended 31 March 2019 and 31 March 2018 there was no transfers between level 2 and level 3 fair value hierarchy.
Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities and short term
borrowings carried at amortised cost is not materially different from its carrying cost largely due to short term maturities of these financial assets
and liabilities
Fair value of the borrowing items fall within level 2 of the fair value hierarchy and is calculated on the basis of discounted future cash flows.
non-listed shares and other securities fall within level 3 of the fair value hierarchy. Valuation is based on the discounted future cash flow
method.
Financial instruments with fixed and variable interest rate fall within level 2 of the fair value hierarchy and are evaluated by Company based on
parameters such as interest rate, credit rating or assessed credit worthiness.
EROS IntERnatIOnal MEdIa lIMItEd 93
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
Following table shows the reconciliation from the opening balances to the closing balances of the level 3 values:-
Particulars
Balance as on 1 april 2017
Add: Employee stock option compensation expense to employee’s of subsidiary
Less: Fair value loss recognized through Statement of Profit and Loss
Balance as on 31 March 2018
Add: Employee stock option compensation expense to employee’s of subsidiary
Less: Fair value loss recognized through Statement of Profit and Loss
Balance as on 31 March 2019
Amount ` in lakhs
4,760
180
(1,480)
3,460
38
(722)
2,776
Financial asset
Fair value as at
(` in lakhs)
Fair value
hierarchy
Investment in
unquoted
equity share
31 March 2019 31 March 2018
Equity share
of :- universal
Power Systems
Private Limited -
` 2,776
Equity share
of :- universal
Power Systems
Private Limited -
` 3,460
Level 3
Valuation
techniques and
key inputs
Significant
unobservable
input
Relationship of
unobservable
input to fair value
The significant
inputs were:-
a) the estimated
cash flow; and
b) the discount
rate to compute
the present
value of the
future expected
cash flow.
Income approach
- In this approach,
the discounted
cash flow method
was used to
capture the
present value
of the expected
future economic
benefit to be
derived from the
ownership of these
equity instruments.
A 0.5% increase
/ decrease in
the discount
rate used would
decrease/increase
the fair value of
unquoted equity
instruments by
` 89 lakhs /
` 66 lakhs
(` 180 lakhs /
` 200 lakhs As at
31 March 2018).
46 Financial instruments and Risk management
The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are
summarised in note 44 The main types of risks are market risk, credit risk and liquidity risk.
The Company’s risk management is coordinated in close cooperation with the board of directors and audit committee meetings.
The Company has established objectives concerning the holding and use of financial instruments. The underlying basis of these objectives is to
manage the financial risks faced by the Company.
Management of Capital Risk and Financial Risk
The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders
through the optimization of the debt and equity balance. The Company monitors capital using a gearing ratio, which is net debt divided by total
capital. For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the
equity shareholders of the Company. net debt is calculated as borrowing (refer note 19,25,26 and 27) less cash and cash equivalents.
The gearing ratio at the end of the reporting period was as follows:
Debt
Less: Cash and cash equivalents
net debt
Equity
net debt to equity
94
AnnuAL REPORT 2018-19
Amount ` in lakhs
as at
31 March 2019
as at
31 March 2018
66,540
(268)
66,272
153,845
43.08%
76,748
(385)
76,363
144,199
52.96%
STANDALONE FiNANciAL STATEMENTS
notes
to the standalone financial statements and other explanatory information
Financial risk management objectives
Based on the operations of the Company , Management considers that key financial risks that it faces are credit risk, currency risk, liquidity risk
and interest rate risk. The objectives under each of these risks are as follows:
• credit risk: minimize the risk of default and concentration.
• currency risk: reduce exposure to foreign exchange movements principally between INR and USD.
• liquidity risk: ensure adequate funding to support working capital and future capital expenditure requirements.
• interest rate risk: mitigate risk of significant change in market rates on the cash flow of issued variable rate debt.
Credit Risk
The Company’s credit risk is principally attributable to its trade receivables, loans and bank balances. As a number of the Company’s trading
activities require third parties to report revenues due to the Company this risk is not limited to the initial agreed sale or advance amounts. The
amounts shown within the Balance Sheet in respect of trade receivables and loans are net of allowances for doubtful debts based upon objective
evidence that the Company will not be able to collect all amounts due.
Ageing of Receivables
not due
Overdue less than 90 days
Overdue more than 90 days less than 180 days
Overdue more than 181days less than 270 days
Overdue more than 271days less than 360 days
Overdue more than 360days
Closing balance
Expected credit loss
Opening balance
Provision made during the year
Reversal of provision during the year
Closing balance
as at
31 March 2019
as at
31 March 2018
40,880
9,605
5,388
6,445
2,352
1,925
66,595
419
7,942
-
8,361
32,285
6,772
1,649
19
23
3,276
44,024
829
-
409
419
Trading credit risk is managed on a customer by customer basis by the use of credit checks on new clients and individual credit limits, where
appropriate, together with regular updates on any changes in the trading partner’s situation. In a number of cases trading partners will be required
to make advance payments or minimum guarantee payments before delivery of any goods. The Company reviews reports received from third
parties and in certain cases as a matter of course reserve the right within the contracts it enters into to request an independent third party audit
of the revenue reporting.
The credit risk on bank balances is limited because the counterparties are banks with high credit ratings as signed by international credit
rating agencies.
The Company from time to time will have significant concentration of credit risk in relation to individual theatrical releases, television syndication
deals or digital licenses. This risk is mitigated by contractual terms which seek to stagger receipts and/or the release or airing of content.
As at 31 March 2019 46% (31 March 2018: 51%) of trade account receivables were represented by the top 5 customer, out of which as at
31 March 2019 25% (31 March 2018: 15%) of trade account receivables were represented by the related parties. The maximum exposure to
credit risk is that shown within the statement of financial position.
As at 31 March 2019, the Company did not hold any material collateral or other credit enhancements to cover its credit risks associated with its
financial assets, except certain secured debtors as disclosed in note 11. ECL movement ageing not added.
Currency Risk
The Company is exposed to foreign exchange risk from foreign currency transactions. As a result it faces both translation and transaction
currency risks which are principally mitigated by matching foreign currency revenues and costs wherever possible.
The Company has identified that it will need to utilize hedge transactions to mitigate any risks in movements between the uS Dollar and the Indian
Rupee and has adopted an agreed set of principles that will be used when entering into any such transactions. no such transactions have been
entered into to date and the Company has managed foreign currency exposure to date by seeking to match foreign currency inflows and outflows
as much as possible such as packing credit repayment in uSD is matched with remittances from uAE in uSD. Details of the foreign currency
borrowings that the Company uses to mitigate risk are shown within Interest Risk disclosures.
EROS IntERnatIOnal MEdIa lIMItEd 95
Corporate overview | ManageMent report | financial management
notes
to the standalone financial statements and other explanatory information
The Company adopts a policy of borrowing where appropriate in the foreign currency as a hedge against translation risk. The table below
shows the Company’s net foreign currency monetary assets and liabilities position in the main foreign currencies, translated to Indian Rupees (`)
equivalents, as at the year end:
As at 31 March 2019
As at 31 March 2018
*amount represents less than one lakh
Amount in lakhs
net balance receivables / (payables)
InR
(1,858)
1,339
USd
(27)
25
SGd*
GBP
0
0
-
(3)
The above foreign currency arises when the Company holds monetary assets and liabilities denominated in a currency other than `.
A uniform decrease of 10% in exchange rates against all foreign currencies in position as of 31 March 2019 would have increased in the
Company’s net profit before tax by approximately ` 186 lakhs (2018: loss of ` 102 lakhs). An equal and opposite impact would be experienced
in the event of an increase by a similar percentage.
liquidity risk
The Company manages liquidity risk by maintaining adequate reserves and agreed committed banking facilities. Management of working
capital takes account of film release dates and payment terms agreed with customers.
A maturity analysis for financial liabilities is provided below. The amounts disclosed are based on contractual undiscounted cash flows. The table
includes both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest
rates as at 31 March in each year.
as at 31 March 2019
Borrowing principal payments
Borrowing interest payments
Acceptance
Trade and other payables
as at 31 March 2018
Borrowing principal payments
Borrowing interest payments
Acceptance
Trade and other payables
total
less than 1
year
1-3 years
3-5 years More than 5
years
Amount ` in lakhs
60,743
7,587
5,796
20,950
51,975
6,380
5,796
20,817
8,168
1,189
-
133
600
18
-
-
-
-
-
-
total
less than 1
year
1-3 years
3-5 years More than 5
years
Amount ` in lakhs
70,952
55,815
9,405
5,796
6,715
5,796
18,156
18,054
11,804
2,416
-
102
3,333
274
-
-
-
-
-
-
At 31 March 2019, the Company had facilities available of ` 60,950 lakhs (31 March 2018: ` 71,354 lakhs) and had net undrawn amounts of `
201 lakhs (31 March 2018: ` 414 lakhs) available.
Interest rate risk
The Company is exposed to interest rate risk as the Company has borrowed funds at floating interest rates. The risk is managed as the loans are
at floating interest rates which is aligned to the market.
A uniform increase of 100 basis in interest rates against all borrowings in position as of 31 March 2018 would have decreased in the Company’s
net profit before tax by approximately ` 386 (2018: net profit before tax of ` 317). An equal and opposite impact would be experienced in the
event of a decrease by a similar basis.
96
AnnuAL REPORT 2018-19
STANDALONE FiNANciAL STATEMENTS
47 auditors' remuneration
as auditor
Statutory audit
Limited review
Tax audit
In other capacity
Other services (certification fees)
total
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
65
15
7
87
2
2
89
60
25
7
92
0
0
92
48 Based on the information available with the Company, there are no dues payable as at the year end to micro, small and medium enterprises as
defined in The Micro, Small & Medium Enterprises Development Act, 2006. This information has been relied upon by the statutory auditors of
the Company.
49 As per the section 135 of the Act, a Corporate Social Responsibility (CSR) committee has been formed by the Company. CSR objects
chosen by the Company primarily consist of promoting education, promoting gender equality, empowering women, setting up homes and
hostels for women and orphans etc. As per the provisions of the Act, gross amount required to be spent by the Company is ` 425 lakh
(31 March 2018 : ` 448 lakh), of which ` 20 lakhs (31 March 2018 : ` nil) have been spent during the current year. Sum of ` 20 lakh paid
to ARPAn for Child Sexual Abuse Project.
50 Post reporting date events
no adjusting or significant non-adjusting events have occurred between 31 March 2019 and the date of authorisation of these standalone
financial statements.
As per our report of even date
For Chaturvedi & Shah llP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of directors
amit Chaturvedi
Partner
Membership no: 103141
Sunil arjan lulla
Executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non Executive Independent
Director
(DIn: 00237561)
Subramaniam lakshminarayanan
non Executive Independent
Director
(DIn: 07972480)
Place: Mumbai
Date : 23 May 2019
Farokh P. Gandhi
Chief Financial Officer
Place: Mumbai
Date : 23 May 2019
abhishekh Kanoi
Vice President - Company Secretary
and Compliance Officer
EROS IntERnatIOnal MEdIa lIMItEd 97
Corporate overview | ManageMent report | financial management
INDEPENDENT AUDITOR’S REPORT
to the Members of
Eros International Media Limited
Report on the Consolidated Financial Statements
Opinion
31 March 2019, its profit including other comprehensive income, its
cash flows and the statement of changes in equity for the year ended on
that date.
Basis for Opinion
We have audited the accompanying consolidated financial statements
of Eros International Media Limited (hereinafter referred to as the
“Holding Company”) and its subsidiaries (Holding Company and its
subsidiaries together referred to as “the Group”), which comprise
the consolidated Balance Sheet as at 31 March 2019, and the
consolidated Statement of profit and loss, including consolidated
other Comprehensive Income, the consolidated Cash Flow Statement
and the consolidated Statement of Changes in equity for the year then
ended, and a summary of significant accounting policies and other
explanatory information (hereinafter referred to as “the consolidated
financial statements”).
In our opinion and to the best of our information and according to the
explanations given to us and based on the consideration of reports of
other auditors on separate financial statements and on other financial
information of the subsidiary companies, the aforesaid consolidated
financial statements give the information required by the Companies
Act, 2013 (“the Act”) in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards (“Ind AS”)
specified under Section 133 of the Act and other accounting principles
generally accepted in India, of the state of affairs of the Company as at
in
further described
those Standards are
We conducted our audit in accordance with the Standards on Auditing
(“SAs”) specified under Section 143(10) of the Act. our responsibilities
under
the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Company in accordance with the
Code of ethics issued by the Institute of Chartered Accountants of India
(ICAI) together with the ethical requirements that are relevant to our audit
of the consolidated financial statements under the provisions of the Act
and the Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI‘s
Code of ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion on the
consolidated financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial
statements of the current period. these matters were addressed in the
context of our audit of the consolidated financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matters
Revenue Recognition
Response to Key Audit Matters
(Refer note 1 and para ‘a’ of the significant accounting policies)
the Group recognize theatrical income, license
Fees and distribution revenue, net of sales related
taxes, when control of the underlying products
have been transferred along with satisfaction of
performance obligation.
Recognition of revenue is driven by specific
terms of related contracts. the Group has
applied Ind AS 115 from 1 April 2018 and has
evaluated all its contracts with respect to the new
accounting guidance.
the various streams of revenue, together with the
level of judgement involved make its accounting
treatment a significant matter for our audit.
our audit procedures to assess the appropriateness of revenue recognised included the
following:
•
•
•
•
Obtaining an understanding of an assessing the design, implementation and operating
effectiveness of the Group’s key internal controls over the revenue recognition process.
Examination of contracts entered into close to year end to ensure revenue recognition is
made in correct period.
Testing a sample of contracts from various revenue streams by agreeing information back
to contracts and proof of delivery or transmission as appropriate and ensure revenue
recognition is in accordance with principles of Ind AS 115.
Assessing the adequacy of Group’s disclosure in accordance with requirements of
Ind AS 115.
our testing as described above showed that revenue has been recorded in accordance with
the terms of underlying contracts and accounting policy in this area. the disclosures made
relating to revenues are in agreement with Ind AS 115.
98
AnnuAl RepoRt 2018-19
Key Audit Matters
Content Advances
Group enters into agreements with production
houses to develop future film content. Advances
are given as per terms of agreements. Such
content advances are monitored by management
of the Group for recoverability and appropriate
write offs are taken when film production does not
seem viable and refund of advance is not probable
basis management evaluation.
the Content advances are transferred to film
and rights at the point at which the content is
first exploited. provision is made as per provision
policy in respect of content advances against
which content has not been delivered by vendor
within agreed timelines or where projects are at
standstill/put on hold for substantial period of time.
Because of the significance of content advances to
the balance sheet and of the significant degree of
management judgment involved in evaluating the
adequacy of the allowance for content advances,
we identified this area as key audit matter.
Response to Key Audit Matters
our audit procedures with respect to content advance, delivery of the content and it’s
impairment includes:
•
•
•
•
•
•
Obtaining an understanding of and assessing the design, implementation and operating
effectiveness of the Group’s key controls over the processes of authorisation of content
advances and tracking of receipt of related content as per agreement.
Examination of contracts on sample basis entered by the Group and agreeing with the
schedule of content advance.
Reviewing ageing of advances to determine the adequacy of the provision made as per
provisioning policy.
Testing of the amounts transferred to film and rights account on sample basis on delivery
of content by vendor.
Circulating and obtaining independent confirmations from parties on the outstanding
balances on sample basis. testing the reconciliation, if any between the balances
confirmed by party and balance in the books.
Conducting discussion with the management and reviewing, on sample basis, the project
status prepared by management for determining the adequacy of impairment provisions
where balances are still pending to be adjusted against the content to be delivered by the
party.
the results of our testing of confirmations floated and other test as described above,
were satisfactory and concluded that provision made for impairment of content advance
was appropriate.
Amortisation of Film and Content Rights
(Refer note 1 and para ‘d’ of the significant accounting policies)
the cost incurred on acquisition of film and
content rights are amortised over the period.
Group carries out stepped up amortisation of
film content, with higher amortisation in year
of film release and lower amortisation in later
periods as per the policy disclosed in significant
accounting policy.
Such amortisation policy has been derived
basis management’s expectation of overall
performance of films based on historical trends.
the Group maintains detailed content wise
information relating to historical trends and future
benefits from content through theatrical sales,
sale of satellite or television and other forms of
monetisation of the content.
impairment
Determination of amortisation policy and
assessing
asset
involves significant judgement and estimates
since it is dependent on various internal and
external factors.
content
of
Because of the significance of the amortisation of
content and film rights to balance sheet together
with the level of judgement involved make its
accounting treatment a significant matter for
our audit.
our audit procedures to test amortisation/ impairment of film content included the following:
•
•
•
•
•
•
Assessing the design, implementation and operating effectiveness of the Group’s
key internal controls over the processes of maintenance and updation of master files
containing data on the film rights carrying value and the related amortisation computations
thereof.
Testing, on sample basis, the mathematical accuracy of the acquisition cost of film and
content rights, associated amortisation charge and additions and disposals to third party
supporting documents.
Discussing the expectations of the selected films and shows with key personnel,
including those outside of finance, to ensure its consistency of expected performance
with key assumptions.
Determining the overall assumptions used by management for amortisation policy is
appropriate based on the expected utilisation of benefits of the underlying content.
Assessing management’s historical forecasting accuracy by comparing past assumptions
to actual outcomes.
The carrying value of the content and film cost were tested for impairment based on the
valuation model. We tested the historical data used for valuation, challenged the terminal
growth and discount rates used and considered the reasonableness of the sensitivity
assessment applied.
the results of the test described as above, were satisfactory and amortisation charged for
content and film right was found satisfactory.
EROS INTERNATIONAL MEDIA LIMITED 99
Corporate overview | ManageMent report | financial management
Key Audit Matters
Response to Key Audit Matters
Trade Receivables
(Refer note 1 and para ‘i’ of the significant accounting policies)
the Group is required to regularly assess the
recoverability of its trade receivables. Management
assesses the level of allowance for expected
credit loss required at each reporting date after
taking into account the ageing analysis of trade
receivables and other historical and current factors
specific to individual accounts.
trade
recoverability of
trade receivables
the
receivables was
significant to our audit because of the significance
of
to balance sheet and
involvement of significant degree of management
judgement involved in evaluating the adequacy of
the allowance for expected credit loss.
our audit procedures to assess the recoverability of trade receivables included the following:
•
•
•
•
•
Tested the accuracy of aging of trade receivables at year end on a sample basis.
Assessed the recoverability of the unsettled receivables on a sample basis through
our evaluation of management’s assessment with reference to the credit profile of the
customers, historical payment pattern of customers, publicly available information and
latest correspondence with customers and to consider if any additional provision should
be made.
Tested subsequent settlement of trade receivables after the balance sheet date on a
sample basis, if any.
Circulating and obtaining independent customers confirmation on the outstanding
balances on sample basis. testing the reconciliation, if any between the balances
confirmed by customer and balance in the books on sample basis.
In assessing the appropriateness of the overall provision for impairment we considered
the management’s application of policy for recognizing provisions which included
assessing whether the calculation was in accordance with InD AS 109 and comparing
the Group’s provisioning rates against historical collection data.
the results of the test described as above, were satisfactory and provision made for expected
credit loss/doubtful debt was found satisfactory.
Other Information
the Company’s Board of Directors is responsible for the other information.
the other information comprises the information included in the Annual
Report, but does not include the consolidated financial statements and
our auditor’s report thereon.
our opinion on the consolidated financial statements does not cover
the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information;
we are required to report that fact. We have nothing to report in
this regard.
Management Responsibility for the Consolidated Financial
Statements
the Holding Company’s Board of Directors is responsible for the matters
stated in Section 134(5) of the Act, with respect to the preparation of
these Consolidated Financial Statements that give a true and fair view of
the consolidated financial position, consolidated financial performance
including consolidated other comprehensive income, consolidated cash
flows and the consolidated statement of changes in equity of the Group
in accordance with the accounting principles generally accepted in India,
including the Indian Accounting Standards (“Ind AS”) specified under
Section 133 of the Act, read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended.
the respective Board of Directors of the companies included in the
Group are responsible for maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the
assets of the Group and for preventing and detecting frauds and other
irregularities; selection and application of the appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the
preparation and fair presentation of the consolidated financial statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error, which have been used for the purpose of
100 AnnuAl RepoRt 2018-19
preparation of the consolidated financial statements by the directors of
the holding Company, as aforesaid.
In preparing the consolidated financial statements, the respective Board
of Directors of the companies included in the Group are responsible
for assessing the ability of the Group to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
the respective Board of Directors of the companies included in the
Group are responsible for overseeing the financial reporting process of
the Group.
Auditor’s Responsibility
our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional scepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis
for our opinion. the risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances. under Section 143(3)(i) of the Act, we are also
responsible for expressing our opinion on whether the Company
has adequate internal financial controls system in place and the
operating effectiveness of such controls.
•
•
•
•
Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
Conclude on the appropriateness of management’s use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the ability
of the Group to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to
modify our opinion. our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves
fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the Group
to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance
of the audit of the financial statements of such entities included in
the consolidated financial statements of which are the independent
auditors. For the other entities included in the consolidated financial
statements, which have been audited by other auditors, such
other auditors remain responsible for the direction, supervision and
performance of the audits carried out by them. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance of the Holding
Company and such other entities included in the consolidated financial
statements of which we are the independent auditors regarding, among
other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit
of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
Other Matters
We did not audit the financial statements and other financial information
of four subsidiaries whose financial statements reflect total assets of
` 121,128 lakhs as at 31 March 2019, total revenues of ` 32,824 lakhs
and net cash outflows amounting to ` 1,127 lakhs for the year ended
31 March 2019. these financial statements and other financial information
have been audited by other auditors whose financial statements and
other financial information and auditor’s reports have been furnished to
us by the Management and our opinion on the consolidated financial
statements, in so far as it relates to the amounts and disclosures
included in respect of these subsidiaries, and our report in terms of sub-
sections (3) and (11) of Section 143 of the Act, in so far as it relates
to the aforesaid subsidiaries, is based solely on the reports of the
other auditors.
our opinion on the consolidated financial statements, and our report
on other legal and Regulatory Requirements below, is not modified in
respect of the above matters with respect to our reliance on the work
done and the reports of the other auditors.
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, we report, to the extent
applicable, that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary
for the purposes of our audit of the aforesaid consolidated
financial statements;
b)
c)
d)
In our opinion, proper books of account as required by law relating
to preparation of the aforesaid consolidated financial statements
have been kept so far as it appears from our examination of those
books and the reports of the other auditors;
the Consolidated Balance Sheet, the Consolidated Statement
of profit and loss, and the Consolidated Cash Flow Statement
dealt with by this Report are in agreement with the relevant books
of account maintained for the purpose of preparation of the
consolidated financial statements;
In our opinion, the aforesaid consolidated financial statements
comply with the Ind AS specified under Section 133 of the Act
read with Companies (Indian Accounting Standards) Rules, 2015
as amended;
e) on the basis of the written representations received from the
directors of the Holding Company as on 31 March 2019 taken
on record by the Board of Directors of the Holding Company and
the reports of the statutory auditors of its subsidiary companies
incorporated in India, none of the directors of the Group companies
incorporated in India is disqualified as on 31 March 2019 from
being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over
financial reporting of the Group and the operating effectiveness
of such controls, refer to our separate Report in “Annexure A”.
EROS INTERNATIONAL MEDIA LIMITED 101
Corporate overview | ManageMent report | financial management
our report expresses an unmodified opinion on the adequacy and
operating effectiveness of the Group internal financial controls over
financial reporting;
g) With respect to the other matters to be included in the Auditor’s
Report in accordance with the requirements of section 197(16)
of the Act, as amended, in our opinion and to the best of our
information and according to the explanations given to us, the
remuneration paid during the year by the Holding Company to its
directors and the reports of the statutory auditors of its subsidiary
companies incorporated in India, are in accordance with the
provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor’s
Report in accordance with Rules 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended , in our opinion and to the best
of our information and according to the explanations given to us:
i.
the consolidated financial statements disclose
the
impact of pending litigations on the consolidated financial
position of the Group - Refer note 39 to the consolidated
financial statements;
ii.
iii.
the Group has made provision, as required under the
applicable
for material
foreseeable losses, if any, on long-term contracts including
derivative contracts; and
law or accounting standards,
there has been no delay in transferring amounts, required
to be transferred, to the Investor education and protection
Fund by the Holding Company and its subsidiary companies
incorporated in India.
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no. 101720W/W100355
Amit Chaturvedi
partner
Membership no. 103141
place : Mumbai
Dated : 23 May 2019
102 AnnuAl RepoRt 2018-19
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDTAED
FINANCIAL STATEMENTS OF EROS INTERNATIONAL MEDIA LIMITED
(Referred to in paragraph 2 (f) under ‘Report on Other Legal and
Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting
under Clause (i) of sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
We have audited the Internal Financial Control over financial reporting
of Eros International Media Limited (hereinafter referred to as “the
Holding Company”) and its subsidiary companies which are companies
incorporated in India as of 31 March 2019 in conjunction with our audit
of the consolidated financial statements of the Company for the year
then ended.
Management’s Responsibility for Internal Financial Control
the respective Board of Directors of the Holding Company and
its subsidiary companies incorporated in India, are responsible for
establishing and maintaining internal financial controls based on
the internal control over financial reporting criteria established by
the Holding Company considering the essential components of
internal control stated in Guidance note issued by the ICAI. these
responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively
for ensuring the orderly and efficient conduct of its business, including
adherence to the respective company’s policies, the safeguarding
of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Act.
of financial reporting and the preparation of consolidated financial
statements for external purposes in accordance with generally accepted
accounting principles. A company's internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of consolidated financial statements
in accordance with generally accepted accounting principles, and
that receipts and expenditures of the Company are being made only
in accordance with authorisations of management and directors of the
Company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorised acquisition, use, or disposition of the
company's assets that could have a material effect on the consolidated
financial statements.
Inherent Limitations of Internal Financial Controls Over Financial
Reporting
Because of the inherent limitations of internal financial controls over
financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or
fraud may occur and not be detected. Also, projections of any evaluation
of the internal financial controls over financial reporting to future periods
are subject to the risk that the internal financial control over financial
reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures
may deteriorate.
Auditor’s Responsibility
Other Matters
our responsibility is to express an opinion on the Company's internal
financial controls over financial reporting based on our audit. We
conducted our audit in accordance with the Guidance note on Audit
of Internal Financial Controls over Financial Reporting (the “Guidance
note”) and the Standards on Auditing issued by ICAI and deemed to
be prescribed under Section 143(10) of the Act, to the extent applicable
to an audit of internal financial controls, both issued by the ICAI. those
Standards and the Guidance note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial controls over
financial reporting was established and maintained and if such controls
operated effectively in all material respects.
our audit involves performing procedures to obtain audit evidence
about the adequacy of the internal financial controls system over
financial reporting and their operating effectiveness. our audit of
internal financial controls over financial reporting included obtaining
an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control
based on the assessed risk. the procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit
evidence obtained by the other auditors in terms of their reports referred
to in the other Matters paragraph below, is sufficient and appropriate to
provide a basis for our audit opinion on the Company’s internal financial
controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability
our report under Section 143(3)(i) of the Act on the adequacy and
operating effectiveness of the internal financial controls over financial
reporting of the Holding Company, in so far as it relates to separate
financial statements of two subsidiary companies incorporated in India,
is based on the corresponding reports of the auditors of such subsidiary
companies incorporated in India.
Opinion
In our opinion, to the best of our information and according to the
explanations given to us and based on the consideration of reports of
other auditors, as referred to in other Matters paragraph, the Holding
Company and its subsidiary companies incorporated in India, have
maintained in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over
financial reporting were operating effectively as at 31 March 2019, based
on the internal control over financial reporting criteria established by
the Holding Company considering the essential components of internal
control stated in the Guidance note on Audit of Internal Financial Controls
over Financial Reporting (the “Guidance note”) issued by the Institute of
Chartered Accountants of India (“ICAI”).
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no. 101720W/W100355
Amit Chaturvedi
partner
Membership no. 103141
place : Mumbai
Dated : 23 May 2019
EROS INTERNATIONAL MEDIA LIMITED 103
Corporate overview | ManageMent report | financial management
Consolidated Balance Sheet
as at 31 March 2019
Particulars
Assets
Non-current assets
property, plant & equipment
Intangible assets
a) Content advances
b) Film rights
c) others intangible assets
d) Intangible assets under development
e) Goodwill
Financial assets
a) loans
b) Restricted bank deposits
c) other financial assets
other non-current assets
Total non-current assets
Current assets
Inventories
Financial assets
a) Investments
b) trade and other receivables
c) Cash & cash equivalents
d) Restricted bank deposits
e) loans and advances
f) other financial assets
other current assets
Total current assets
Total assets
Equity and Liabilities
Equity
equity share capital
other equity
equity attributable to owners
non-controlling Interests
Total equity
Liabilities
Non-current liabilities
Financial liabilities
a) Borrowings
b) trade payables
c) other financial liabilities
employee benefit obligations
Deferred tax liabilities
other non-current liabilities
Total non-current liabilities
Current liabilities
Financial liabilities
a) Borrowings
b) Acceptances
c) trade payables
d) other financial liabilities
employee benefit obligations
Current tax liabilities
other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Significant Accounting policies and Key Accounting estimates and Judgements
notes to the Financial Statements
As per our report of even date
Notes
As at
31 March 2019
Amount ` in lakhs
As at
31 March 2018
2
3
3
3
3
3
4
10
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
1
2-51
3,838
1,58,315
91,234
1,340
9,049
1,735
44,484
511
795
6,391
3,17,692
301
0
79,352
14,111
5,994
1,827
998
297
1,02,880
4,20,572
9,551
2,47,660
2,57,211
1,028
2,58,239
8,724
108
25
435
17,958
10,050
37,300
45,268
5,796
31,070
7,640
372
11,400
23,487
1,25,033
162,333
4,20,572
4,100
1,51,234
1,05,143
1,590
7,079
1,283
11,862
716
789
4,686
2,88,482
187
0
69,857
14,230
3,776
1,167
302
683
90,202
3,78,684
9,497
2,14,803
2,24,300
1,288
2,25,588
14,952
102
-
487
24,501
1,512
41,554
46,808
5,796
32,327
9,066
224
3,684
13,637
1,11,542
1,53,096
3,78,684
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of Directors
Amit Chaturvedi
partner
Membership no: 103141
Sunil Arjan Lulla
executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non executive Independent
Director
(DIn: 00237561)
Subramaniam Lakshminarayanan
non executive Independent
Director
(DIn: 07972480)
place: Mumbai
Date : 23 May 2019
104 AnnuAl RepoRt 2018-19
Farokh P. Gandhi
Chief Financial officer
place: Mumbai
Date : 23 May 2019
Abhishekh Kanoi
Vice president - Company Secretary
and Compliance officer
Consolidated Statement of Profit and Loss
for the year ended 31 March 2019
Particulars
Revenue
Revenue from operations
other income
Total revenue
Expenses
purchases/operating expenses
Changes in inventories
employee benefits expense
Finance costs
Depreciation and amortisation expense
other expenses
Total expenses
Profit before tax
Tax expense
Current tax
Deferred tax
Profit for the year
Other Comprehensive Income
(i) Items that will not be reclassified to profit or loss
Remeasurement gain on definted benfit plan
Income tax effect
(i) Items that will be reclassified to profit or loss
exchange differences on translating foreign operations
Total Other Comprehensive Income for the year
Total Comprehensive Income for the year
Net Profit attibutable to :
a) owners of the Company
b) non Controlling Interest
Other Comprehensive Income attibutable to :
a) owners of the Company
b) non Controlling Interest
Total Comprehensive Income attibutable to :
a) owners of the Company
b) non Controlling Interest
Earnings per share of face value of ` 10 each
1. Basic (in `)
2. Diluted (in `)
Significant Accounting policies and Key Accounting estimates and Judgements
notes to the Financial Statements
Notes
Year ended
31 March 2019
Year ended
31 March 2018
Amount ` in lakhs
30
31
32
33
34
35
36
37
21
21
38
38
1
2-51
1,03,130
10,839
1,13,969
96,016
4,985
1,01,001
47,319
(114)
5,079
7,748
909
21,265
82,206
31,763
11,905
(6,790)
5,115
26,648
61
(21)
5,094
5,134
31,782
26,908
(260)
5,134
-
32,042
(260)
28.26
28.02
39,927
(141)
5,894
8,053
1,028
17,505
72,266
28,735
9,717
(4,104)
5,613
23,122
111
(38)
(22)
51
23,173
22,934
188
273
(222)
23,207
(34)
24.26
23.92
As per our report of even date
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no.: 101720W/W100355
Amit Chaturvedi
partner
Membership no: 103141
place: Mumbai
Date : 23 May 2019
For and on behalf of Board of Directors
Sunil Arjan Lulla
executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non executive Independent
Director
(DIn: 00237561)
Subramaniam Lakshminarayanan
non executive Independent
Director
(DIn: 07972480)
Farokh P. Gandhi
Chief Financial officer
place: Mumbai
Date : 23 May 2019
Abhishekh Kanoi
Vice president - Company Secretary
and Compliance officer
EROS INTERNATIONAL MEDIA LIMITED 105
Corporate overview | ManageMent report | financial management
Consolidated Statement of Changes in Equity
As at 31 March 2019
A. Equity share capital
Balance as at 31 March 2017
Add: Issued on exercise of employee share options
Balance as at 31 March 2018
Add: Issued on exercise of employee share options
Balance as at 31 March 2019
Number
93,858,717
1,113,160
94,971,877
536,263
95,508,140
Amount ` in lakhs
9,385
112
9,497
54
9,551
B. Other equity
Particulars
Balance at
31 March 2017
profit for the year
other comprehensive
income / (loss) for the year
Divestment of subsidiary
Total Comprehensive
income/ (loss) for the year
transfer from/to share
option outstanding account
employee stock options
exercised during the year
employee stock option
compensation expense
Balance as at
31 March 2018
profit for the year
other comprehensive
income / (loss) for the year
Total Comprehensive
income/ (loss) for the year
transfer from/to share
option outstanding account
employee stock option
compensation expense
Balance as at
31 March 2019
Securities
Premium
Reserve
General
Reserves
and
Capital
Reserve
Share
Options
Outstanding
Retained
Earnings
Foreign
Currency
Translation
Reserve
Other
comprehensive
income / (loss)
for the year
Total
Other
Reserve
Amount ` in lakhs
Total
Non-
Equity
Controlling
Interest
38,141
564
2,645
1,44,499
5,668
4
1,91,521
(466)
1,91,055
-
-
-
-
2,110
247
-
-
-
-
-
-
-
-
-
-
-
-
(2,110)
-
1,042
22,934
-
-
-
200
-
22,934
188
23,122
73
273
(222)
51
(1,214)
-
(1,214)
1,788
574
22,934
(1,014)
73
21,993
1,754
23,747
-
-
-
-
-
-
-
-
-
-
247
-
-
-
247
1,042
-
1,042
40,498
564
1,577
1,67,433
4,654
77
214,803
1,288
216,091
-
-
-
1,049
-
-
-
-
-
-
-
-
26,908
-
-
26,908
(260)
26,648
-
5,094
39
5,133
-
5,133
-
26,908
5,094
39
32,041
(260)
31,781
(1,049)
816
-
-
-
-
-
-
-
816
-
-
-
816
41,547
564
1,344
1,94,341
9,748
116
2,47,660
1,028 2,48,688
As per our report of even date
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no.: 101720W/W100355
Amit Chaturvedi
partner
Membership no: 103141
place: Mumbai
106 AnnuAl RepoRt 2018-19
For and on behalf of Board of Directors
Sunil Arjan Lulla
executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non executive Independent
Director
(DIn: 00237561)
Subramaniam Lakshminarayanan
non executive Independent
Director
(DIn: 07972480)
Farokh P. Gandhi
Chief Financial officer
place: Mumbai
Abhishekh Kanoi
Vice president - Company Secretary
and Compliance officer
Consolidated Cash Flow Statement
For the year ended 31 March 2019
Particulars
Cash flow from operating activities
Profit before tax
non-cash adjustments to reconcile profit before tax to net cash flows
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
31,763
28,735
Depreciation and other Amortization
Amortization on film rights
trade receivables written off
Sundry balances written back
Content advances written off
Advances and deposits written off
provision for doubtful trade receivables
Impact of expected credit loss
Finance costs
Finance income
(Gain) on sale of tangible assets (net)
Impairement loss on Investment in techzone
expense on employee stock option scheme
unrealised foreign exchange gain
Operating profit before working capital changes
Movements in working capital:
Increase/(Decrease) in trade payables
Decrease in other financial liabilities
Increase in employee benefit obligations
Decrease in other liabilities
Decrease in inventories
(Increase)/Decrease in trade receivables
Decrease in short-term loans
(Increase)/Decrease in other current assets
Increase in long-term loans
(Increase) /Decrease in other financial assets
Cash generated from operations
taxes paid (net)
Net cash generated from operating activities (A)
Cash flow from investing activities
purchase of tangible assets and other intangible assets
purchase of intangible film rights and related content
proceeds from fixed deposits with banks
proceeds from sale of fixed assets
Interest received
Net cash used in investing activities (B)
909
29,643
1,917
(74)
2,226
2,006
8,023
(6,645)
8,082
(642)
2
(452)
799
(72)
77,485
(3,607)
(39)
161
14,314
9
(42,746)
1,472
199
(1,691)
(236)
45,321
(5,124)
40,197
(436)
(22,902)
(1,870)
1
941
1,028
28,838
5,541
(98)
228
44
1,652
(2,490)
8,317
(1,127)
(6)
777
1,013
329
72,781
2,340
(1,341)
88
(10,962)
29
(26,573)
(9,648)
(266)
3,024
(961)
28,511
(4,984)
23,527
(691)
(19,713)
68
22
923
(24,266)
(19,391)
EROS INTERNATIONAL MEDIA LIMITED 107
Corporate overview | ManageMent report | financial management
Consolidated Cash Flow Statement
For the year ended 31 March 2019
Particulars
Cash flows from financing activities
proceeds from issue of equity shares
Repayment of long-term borrowings
proceeds from long-term borrowings
proceeds/(repayment) from short-term borrowings
Finance costs
Net cash used in financing activities (C)
Net decrease in cash and cash equivalents (A + B + C)
Cash and cash equivalents at the beginning of the year
effect of exhange rate on consolidation of foreign subsidiaries
De-recognition on divestment of subsidiaries
Cash and cash equivalents at the end of the year
Change in liability arising from financing activities :-
As on 1 April 2017
Cash Flows
Adjustments
As on 31 March 2018
As on 1 April 2018
Cash Flows
Adjustments
As on 31 March 2019
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
71
(8,565)
304
(1,688)
(7,791)
(17,669)
(1,738)
1,486
898
-
646
358
(7,176)
7,272
3,911
(7,663)
(3,298)
838
652
3
(7)
1,486
Non current
borrowings
Current borrowing
Acceptances
Total
22,141
96
(68)
22,169
22,169
(8,261)
16
13,924
43,033
3,910
(135)
46,808
46,808
(1,688)
148
45,268
5,795
1
-
5,796
5,796
-
-
5,796
70,969
4,007
(203)
74,773
74,773
(9,949)
164
64,988
notes 1 to 51 form an integral part of these consolidated financial statements
As per our report of even date
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no.: 101720W/W100355
For and on behalf of Board of Directors
Amit Chaturvedi
partner
Membership no: 103141
Sunil Arjan Lulla
executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non executive Independent
Director
(DIn: 00237561)
Subramaniam Lakshminarayanan
non executive Independent
Director
(DIn: 07972480)
place: Mumbai
Date : 23 May 2019
Farokh P. Gandhi
Chief Financial officer
place: Mumbai
Date : 23 May 2019
Abhishekh Kanoi
Vice president - Company Secretary
and Compliance officer
108 AnnuAl RepoRt 2018-19
Summary of Significant Accounting Policies
1. Corporate Information and Significant accounting policies
Corporate Information
eros International Media limited (the ‘Company’ or ‘parent’)
was incorporated in India, under the Companies Act, 1956. the
Company and its subsidiaries including step down subsidiaries
(hereinafter collectively referred to as the “Group”) is a global
player within the Indian media and entertainment industry and is
primarily engaged in the business of film production, exploitation
and distribution. It operates on a vertically integrated studio
model controlling content as well as distribution and exploitation
across multiple formats globally, including cinema, digital, home
entertainment and television syndication. Its shares are listed
on leading stock exchanges in India (BSe Scrip Code: 533261;
nSe Scrip Code: eRoSMeDIA).
the Group is engaged in the business of sourcing Indian film
content either through acquisition, co-production or production
of such films, and subsequently exploiting and distributing such
films in India through music release, theatrical distribution, DVD
and VCD release, television licensing and new media distribution
avenues such as cable or DtH licensing; and trading and exporting
overseas rights to its parent eros Worldwide FZ llC.
Statement of compliance
these consolidated financial statements have been prepared in
accordance with the Indian Accounting Standards (referred to as
“Ind AS”) as prescribed under section 133 of the Companies Act,
2013 read with Companies (Indian Accounting Standards) Rules as
amended from time to time.
Basis of preparation
the consolidated financial statements have been prepared on
accrual basis of accounting using historical cost basis, except for
the following:
•
•
Employee Stock Option Compensation measured at fair
value (refer accounting policy on eSop).
Accounting of Business Combinations at fair value (refer
accounting policy on Business Combinations).
All assets and liabilities have been classified as current or non-
current as per the Group’s normal operating cycle and other
criteria set out in the Schedule III to the Act. the Group considers
12 months to be its normal operating cycle.
All values are rounded to the nearest rupees in lacs, except where
otherwise indicated. Amount in zero (0) represents amount below
one (1) lakh.
Principles of consolidation
the Group consolidates results of the Company and entities
controlled by the Company i.e. its subsidiary undertakings.
Control exists when the Company has existing rights that give the
Company the current ability to direct the activities which affect the
entity’s returns; the Company is exposed to or has rights to a return
which may vary depending on the entity’s performance; and the
Company has the ability to use its powers to affect its own returns
from its involvement with the entity.
Subsidiaries are consolidated by combining like items of assets,
liabilities, equity, income, expenses and cash flows of the parent
with those of its subsidiaries. the intra-company balances and
transactions including unrealized gain / loss from such transactions
are eliminated upon consolidation. these consolidated financial
statements are prepared by applying uniform accounting policies
in use. non-controlling interests (“nCI”) which represent part of the
net profit or loss and net assets of subsidiaries that are not, directly
or indirectly, owned or controlled by the Group, are excluded.
Changes in the Group’s equity interest in a subsidiary that do not
result in a loss of control are accounted for as equity transactions.
Business combinations are accounted for under the acquisition
method. the acquisition method involves the recognition at fair
value of all identifiable assets and liabilities, including contingent
liabilities of the subsidiaries, at the acquisition date, regardless of
whether or not they were recorded in the financial statements of
the subsidiary prior to acquisition. on initial recognition, the assets
and liabilities of the subsidiaries are included in the consolidated
balance sheet at their fair values, which are also used as the
bases for subsequent measurement in accordance with the Group
accounting policies. transaction costs that the Group incurs in
connection with a business combination such as finder’s fees, legal
fees, due diligence fees, and other professional and consulting
fees are expensed as incurred. Goodwill is stated after separating
out identifiable intangible assets. Goodwill represents the excess
of acquisition cost over the fair value of the Group’s share of
the identifiable net assets of the acquired subsidiary at the date
of acquisition.
Changes in controlling interest in a subsidiary that do not result in
gaining or losing control are not business combinations as defined
by Ind AS 103 ‘Business Combinations’. the Group adopts the
“equity transaction method” which regards the transaction as
a realignment of the interests of the different equity holders in
the Group. under the equity transaction method an increase or
decrease in the Group’s ownership interest is accounted for
as follows:
•
•
•
•
the non-controlling component of equity is adjusted to reflect
the non-controlling interest revised share of the net carrying
value of the subsidiaries net assets;
the difference between the consideration received or paid
and the adjustment to non-controlling interests is debited or
credited to equity;
no adjustment is made to the carrying amount of goodwill or
the subsidiaries’ net assets as reported in the consolidated
financial statements; and
no gain or loss is reported in the Consolidated Statement of
profit and loss.
Associates
Associates are all entities over which the Group has significant
influence but not control or joint control. Assessment of whether
the Group has significant influence or not is made based on Ind AS
28 – Associates and joint ventures, which requires duly considering
potential voting rights if any. Investments in associates are accounted
for using the equity method, after initially recognised at cost.
Joint arrangements
Investments in joint arrangements are classified as either joint
operations or joint ventures. the classification depends on the
contractual rights and obligations of each investor, rather than the
legal structure of the joint arrangement. the Group has investments
in joint ventures which are accounted using the equity method
based on requirements of Ind AS 111 – Joint arrangements, after
initially being recognised at cost in the consolidated balance sheet.
Equity method
under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Group’s
EROS INTERNATIONAL MEDIA LIMITED 109
Corporate overview | ManageMent report | financial management
share of the post-acquisition profits or losses of the investee in
profit and loss, and the Group’s share of other comprehensive
income of the investee in other comprehensive income.
Any excess/short of the amount of investments in associate or joint
venture over the Group’s portion of in net assets of associate or
joint venture, at the date of investments is considered as goodwill/
capital reserve.
Dividends received or receivable from associates and joint
ventures are recognised as a reduction in the carrying amount of
the investment. When the Group’s share of losses in an equity-
accounted investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, the Group
does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the other entity.
unrealised gains on transactions between the Group and its
associates and joint ventures are eliminated to the extent of
the Group’s interest in these entities. unrealised losses are
also eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
Accounting policies of joint ventures and associates are similar
to the Group’s accounting policies, therefore, no adjustment is
required for the purposes of preparation of these consolidated
financial statements. the financial statements of joint ventures and
associates are prepared up to the same reporting date as that
of the Group i.e. 31 March 2019. the carrying amount of equity
accounted investments are tested for impairment in accordance
with the policy described in accounting policies below.
Significant accounting policies
a. Revenue recognition
effective 1 April 2018, the Group has applied Ind AS
115 which establishes a comprehensive framework for
determining whether, how much and when revenue is to be
recognised. Ind AS 115 replaces Ind AS 18 Revenue and
Ind AS 11 Construction Contracts. the Group has adopted
Ind AS 115 using the modified retrospective effect method.
the effect of initially applying this standard is recognised
at the date of initial application (i.e. 1 April 2018). the
standard is applied retrospectively only to contracts that are
not completed as at the date of initial application and the
comparative information in the statement of profit and loss
is not restated – i.e. the comparative information continues
to be reported under Ind AS 18 and Ind AS 11. Refer note
1(a) – Significant accounting policies – Revenue recognition
in the Annual report of the Group for the year ended
31 March 2018, for revenue recognition policy as per Ind AS
18 and Ind AS 11. the impact of adoption of the standard on
the financial statements of the Group is insignificant.
to determine whether to recognise revenue, the Group
follows a 5-step process:
i.
ii.
Identifying the contract with a customer
Identifying the performance obligations
iii. Determining the transaction price
iv.
v.
Allocating the transaction price to the performance
obligations
revenue
Recognising
obligation(s) are satisfied
when/as
performance
Revenue is recognized upon transfer of control of promised
products or services to customers in an amount that reflects
the consideration which the Group expects to receive
in exchange for those products or services. to ensure
collectability of such consideration and financial stability of
the counterparty, the Group performs certain standard Know
Your Client (KYC) procedures based on their locations and
evaluates trend of past collection.
110 AnnuAl RepoRt 2018-19
Revenue is measured based on the transaction price, which is
the consideration, adjusted for any discounts and incentives,
if any, as specified in the contract with the customer.
Revenue also excludes taxes collected from customers. In
case of revenues which are subject to change, the Group
estimates the amount to be received using the “most likely
amount” approach, or the “expected value” approach, as
appropriate. this amount is then included in the Group’s
estimate of the transaction price only if it is highly probable
that a significant reversal of revenue will not occur once any
uncertainty surrounding the bonus is resolved. In making this
assessment the Group considers its historical performance
on similar contracts.
the Group recognises contract liabilities for consideration
received in respect of unsatisfied performance obligations
and reports these amounts as other liabilities in the
statement of financial position (see note 29). Similarly, if the
Group satisfies a performance obligation before it receives
the consideration, the Group recognises either a contract
asset or a receivable in its statement of financial position,
depending on whether something other than the passage of
time is required before the consideration is due.
Consideration
is generally due upon satisfaction of
performance obligations and a receivable is recognised when
it becomes unconditional. Generally, the credit period varies
between 0-180 days from the shipment or delivery of goods
or services as the case may be.
the transaction price, being the amount to which the Group
expects to be entitled and has rights to under the contract
is allocated to the identified performance obligations. the
transaction price will also include an estimate of any variable
consideration where the Group’s performance may result in
additional revenues based on the achievement of agreed
targets.
the Group does not expect to have any contracts where
the period between the transfer of the promised goods or
services to the customer and payment by the customer
exceeds one year. As a consequence, the Group does not
adjust any of the transaction prices for the time value of
money.
the Group disaggregates revenue from contracts with
customers by geography and nature of services.
the following additional criteria apply in respect of various
revenue streams within filmed entertainment:
theatrical — Contracted minimum guarantees are recognized
on the theatrical release date. the Group’s share of box office
receipts in excess of the minimum guarantee is recognized at
the point they are notified to the Group.
television — license fees received in advance which do not
meet all the above criteria are included in deferred income
until the above criteria is met.
other — DVD, CD and video distribution revenue is
recognized on the date the product is delivered or if licensed
in line with the above criteria. provision is made for physical
returns where applicable. Digital and ancillary media revenues
are recognized at the earlier of when the content is accessed
or declared. Visual effects, production and other fees for
services rendered by the Group and overhead recharges
are recognized in the period in which they are earned and in
certain cases, the stage of production is used to determine
the proportion recognized in the period.
Other income
Dividend income is recognised when the Group’s right to
receive the payment is established, which is generally when
shareholders approve the dividend.
Interest income is recognized on a time proportion basis
taking into account the amount outstanding and the effective
interest rate applicable.
the amortisation charge is recognized in the consolidated
Statement of profit and loss within depreciation and
amortisation expenses.
b. Property, plant and equipment and depreciation
property, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment
losses, if any.
the cost of property, plant and equipment comprises of
its purchase price or construction cost, any costs directly
attributable to bringing the asset into the location and
condition necessary for it to be capable of operating in the
manner intended by management, the initial estimate of any
decommissioning obligation, if any, and borrowing costs
for assets that necessarily take a substantial period of time
to get ready for their intended use. Subsequent costs are
included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably.
Capital Work-in-progress (CWIp) includes expenditure that is
directly attributable to the acquisition/construction of assets,
which are yet to be commissioned.
Depreciation is provided under written down value method at
the rates and in the manner prescribed under Schedule II to
the Companies Act, 2013.
c.
Intangible assets
Intangible assets acquired by the Group are stated at cost
less accumulated amortisation less impairment loss, if any,
(film production cost and content advances are transferred
to film and content rights at the point at which content is
first exploited).
Investments in films and associated rights, including acquired
rights and distribution advances in respect of completed
films, are stated at cost less amortisation less provision for
impairment. Costs include production costs, overhead and
capitalized interest costs net of any amounts received from
third party investors. A charge is made to write down the
cost of completed rights over the estimated useful lives,
writing off more in year one which recognizes initial income
flows and then the balance over a period of up to nine years,
except where the asset is not yet available for exploitation.
the average life of the assets is the lesser of 10 years or
the remaining life of the content rights. the amortisation
charge is recognized in the consolidated Statement of profit
and loss within film right costs including amortisation costs.
the determination of useful life is based upon Management’s
judgment and includes assumptions on the timing and future
estimated revenues to be generated by these assets.
Intangible assets comprising film scripts and related costs are
stated at cost less amortisation less provision for impairment.
the script costs are amortized over a period of 3 years on a
straight-line basis and the amortisation charge is recognized
in the consolidated Statement of profit and loss within film
right costs including amortisation costs. the determination
of useful life is based upon Management’s estimate of the
period over which the Group explores the possibility of
making films using the script.
other intangible assets, which comprise internally generated
and acquired software used within the entity’s digital, home
entertainment and internal accounting activities, are stated
at cost less amortisation less provision for impairment. A
charge is made to write down the cost of completed rights
over the estimated useful lives except where the asset is not
yet available for exploitation. the average life of the assets
is the lesser of 3 years or the remaining life of the asset.
Goodwill represents excess of the consideration transferred
in a business combination over the fair value of the Group’s
share of the identifiable net assets acquired. Goodwill is
carried at cost less accumulated impairment losses. Gain on
bargain purchase is recognized immediately after acquisition
in the consolidated Statement of profit and loss.
d.
Impairment of non-financial assets
At each reporting date, for the purposes of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash generating
units). As a result, some assets are tested individually for
impairment and some are tested at the cash generating unit
level. Goodwill is allocated to those cash generating units that
are expected to benefit from synergies of the related business
combination and represent the lowest level within the Group
at which management monitors the related cash flows.
Goodwill is tested for impairment at least annually. All other
individual assets or cash generating units are tested for
impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised wherever the carrying
amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price of assets and
their ‘value in use’. Impairment losses recognized for cash-
generating units, to which goodwill has been allocated, are
credited initially to the carrying amount of goodwill. Any
remaining impairment loss is charged pro rata to the other
assets in the cash generating unit.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are
taken into account. If no such transactions can be identified,
an appropriate valuation model is used. these calculations
are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available fair
value indicators.
Film and content rights are stated at the lower of unamortized
cost and estimated recoverable amounts. In accordance
with Ind AS 36 ‘Impairment of Assets’, film content costs are
assessed for indication of impairment on a library basis as the
nature of the Group’s business, the contracts it has in place
and the markets it operates in, do not yet make an ongoing
individual film evaluation feasible with reasonable certainty.
Impairment losses on content advances are recognized
when film production does not seem viable and refund of the
advance is not probable.
With the exception of goodwill, all assets are subsequently
reassessed for indications that an impairment loss previously
recognized may no longer exist.
e. Borrowing costs
the Group is capitalising borrowing costs that are directly
attributable to the acquisition or construction of qualifying
assets. Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use
or sale.
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently
stated at amortized cost with any difference between the
proceeds (net of transaction costs) and the redemption value
EROS INTERNATIONAL MEDIA LIMITED 111
Corporate overview | ManageMent report | financial management
recognised in the consolidated Statement of profit and loss
within Finance costs over the period of the borrowings using
the effective interest method. Finance costs in respect of
film productions and other assets which take a substantial
period of time to get ready for use or for exploitation are
capitalized as part of the assets. All other borrowing costs
are recognized as expense in the period in which they are
incurred and charged to the Consolidated Statement of profit
and loss.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the consolidated balance
sheet date.
f.
Impairment of financial assets
In accordance with Ind AS 109, the Group applies expected
credit loss (eCl) model for measurement and recognition of
impairment loss on risk exposure arising from financial assets
like debt instruments measured at amortised cost e.g., trade
receivables and deposits.
the Group follows ‘simplified approach’ for recognition
of impairment loss allowance on trade receivables or
contract revenue receivables. the application of simplified
approach does not require the Group to track changes in
credit risk. Rather, it recognises impairment loss allowance
based on lifetime eCls at each reporting date, right from its
initial recognition.
For recognition of impairment loss on other financial assets
and risk exposure, the Group determines that whether there
has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly,
12-month eCl is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime
eCl is used. If, in a subsequent period, credit quality of the
instrument improves such that there is no longer a significant
increase in credit risk since initial recognition, then the entity
reverts to recognising impairment loss allowance based on
12-month eCl.
lifetime eCl are the expected credit losses resulting from all
possible default events over the expected life of a financial
instrument. the 12-month eCl is a portion of the lifetime
eCl which results from default events that are possible within
12 months after the reporting date.
eCl is the difference between all contractual cash flows
that are due to the Group in accordance with the contract
and all the cash flows that the entity expects to receive (i.e.,
all cash shortfalls), discounted at the original eIR. When
estimating the cash flows, an entity is required to consider
all contractual terms of the financial instrument (including
prepayment, extension, call and similar options) over the
expected life of the financial instrument. However, in rare
cases when the expected life of the financial instrument
cannot be estimated reliably, then the entity is required to use
the remaining contractual term of the financial instrument.
eCl impairment loss allowance (or reversal) recognized
during the period is recognized as income/ expense in the
consolidated Statement of profit and loss. this amount is
reflected under the head ‘other income’ or ‘other expenses’
in the consolidated Statement of profit and loss.
For assessing increase in credit risk and impairment loss, the
Group combines financial instruments on the basis of shared
credit risk characteristics with the objective of facilitating an
analysis that is designed to enable significant increases in
credit risk to be identified on a timely basis.
g.
Inventories
Inventories primarily comprise of music CDs and DVDs,
and are valued at the lower of cost and net realizable value.
112 AnnuAl RepoRt 2018-19
Cost in respect of goods for resale is defined as all costs
of purchase, costs of conversion and other costs incurred
in bringing the inventories to their present location and
condition. Cost in respect of raw materials is purchase price.
purchase price is assigned using a weighted average
basis. net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make
the sale.
h. Provisions, Contingent Liabilities and Contingent Assets
provisions are recognized when the Group has a present
legal or constructive obligation as a result of a past event,
it is more likely than not that an outflow of resources will
be required to settle the obligations and can be reliably
measured. provisions are measured at management’s best
estimate of the expenditure required to settle the obligations
at the consolidated balance sheet date. If the effect of the
time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, when appropriate,
the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is
recognised as a finance cost.
Contingent liabilities are not recognized in the consolidated
financial statements but are disclosed by way of notes to
accounts unless the possibility of an outflow of economic
resources is considered remote.
Contingent assets are not recognized in financial statements.
However, the same is disclosed, where an inflow of economic
benefit is probable.
i.
Employee benefits
Short term employee benefits obligations
Short-term employee benefits are recognized as an expense
in the consolidated Statement of profit and loss for the year in
which related services are rendered.
Post-employment benefits and other
employee benefits
long
term
Defined contribution plan
provident fund and national pension scheme: the Group’s
contributions paid or payable during the year to the provident
fund, employee’s state insurance corporation and national
the consolidated
pension scheme are recognized
Statement of profit and loss. this fund is administered by
the respective Government authorities, and the Group has
no further obligation beyond making its contribution, which is
expensed in the year to which it pertains.
in
Defined benefit plan
Gratuity: the Group’s liability towards gratuity is determined
using the projected unit credit method which considers each
period of service as giving rise to an additional unit of benefit
entitlement and measures each unit separately to build up
the final obligation. the cost for past services is recognized
on a straight-line basis over the average period until the
amended benefits become vested. Re-measurement
gains and losses are recognized immediately in the other
Comprehensive Income as income or expense and are not
reclassified to the consolidated Statement of profit and loss
in subsequent periods. obligation is measured at the present
value of estimated future cash flows using a discounted
rate that is determined by reference to market yields at the
consolidated balance sheet date on government bonds
where the currency and terms of the government bonds
are consistent with the currency and estimated terms of the
defined benefit obligation.
Compensated absences: Accumulated compensated
absences are expected to be availed or encashed within
12 months from the end of the year and are treated as
short-term employee benefits. the obligation towards the
same is measured at the expected cost of accumulating
compensated absences as the additional amount expected
to be paid as a result of the unused entitlement as at the
year end.
Employee stock option plan
In accordance with Ind AS 102 ‘Share Based payments’,
the fair value of shares or options granted is recognized as
personnel costs with a corresponding increase in equity. the
fair value is measured at the grant date and spread over the
period during which the recipient becomes unconditionally
entitled to payment unless forfeited or surrendered.
the fair value of share options granted is measured using
the Black Scholes model, each taking into account the
terms and conditions upon which the grants are made. At
each consolidated balance sheet date, the Group revises its
estimate of the number of equity instruments expected to
vest as a result of non-market based vesting conditions. the
amount recognized as an expense is adjusted to reflect the
revised estimate of the number of equity instruments that
are expected to become exercisable, with a corresponding
adjustment to equity. the Group's share option plan does
not feature any cash settlement option.
upon exercise of share options, the proceeds received
net of any directly attributable transaction costs up to the
nominal value of the shares are allocated to equity with any
excess being recorded as securities premium.
j.
Leases
the determination of whether an arrangement is (or contains)
a lease is based on the substance of the arrangement at the
inception of the lease. the arrangement is, or contains, a
lease if fulfillment of the arrangement is dependent on the use
of a specific asset or assets and the arrangement conveys
a right to use the asset or assets, even if that right is not
explicitly specified in an arrangement.
A lease is classified at the inception date as a finance lease
or an operating lease. leases in which significantly all the
risks and rewards incidental to ownership are transferred to
the lessee are classified as finance leases. All other leases
are operating leases. payments under operating leases are
charged to the consolidated Statement of profit and loss on
a straight-line basis over the period of the lease.
As a lessee
Finance lease
leases are classified as finance leases (including those for
land), if substantially all the risks and rewards incidental to
ownership of the leased asset is transferred to the lessee.
At the commencement of the lease term, the Group
recognises finance leases as assets and liabilities in its
consolidated balance sheet at amounts equal to the fair value
of the leased property or, if lower, the present value of the
minimum lease payments, each determined at the inception
of the lease. the corresponding rental obligations, net of
finance charges, are included in borrowings or other financial
liabilities as appropriate. Any indirect costs of the Group are
added to the amount recognised as an asset.
Minimum lease payments are apportioned between the
finance charge and the reduction of the outstanding liability.
the finance cost is charged to the profit or loss over the lease
period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period.
Operating lease
leases (including those for land) which are not classified
as finance leases are considered as operating lease.
lease payments under an operating lease are recognized
as an expense on a straight-line basis over the lease term
unless either:
A.
B.
another systematic basis is more representative of the
time pattern of the user’s benefit even if the payments to
the lessors are not on that basis; or
the payments to the lessor are structured to increase
in line with expected general inflation to compensate
for the lessor’s expected inflationary cost increases. If
payments to the lessor vary because of factors other
than general inflation, then this condition is not met.
As a lessor
Finance lease
All assets given on finance lease are shown as receivables
at an amount equal to net investment in the lease. principal
component of the lease receipts are adjusted against
outstanding receivables and interest income is accounted
by applying the interest rate implicit in the lease to the
net investment.
Operating lease
lease income from operating lease (excluding amount for
services such as insurance and maintenance) is recognized
in the consolidated Statement of profit and loss on a
straight-line basis over the lease term, unless either:
A.
B.
Another systematic basis is more representative of the
time pattern of the user’s benefit even if the payments
to the Group are not on that basis; or
the payments to the Group are structured to increase
in line with expected general inflation to compensate
for the Group’s expected inflationary cost increases. If
payments to the Group vary because of factors other
than general inflation, then this condition is not met.
k.
Foreign currency transactions
transactions in foreign currencies are translated at the rates
of exchange prevailing on the dates of the transactions.
Monetary assets and liabilities in foreign currencies are
translated at the prevailing rates of exchange at the
consolidated balance sheet date. non-monetary items that
are measured at historical cost in a foreign currency are
translated at the exchange rate at the date of the transaction.
non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at
the date when the fair value was determined.
Any exchange differences arising on the settlement of
monetary items or on translating monetary items at rates
different from those at which they were initially recorded
are recognized in the consolidated Statement of profit
and loss in the period in which they arise. non-monetary
items carried at fair value that are denominated in foreign
currencies are translated at rates prevailing at the date
when the fair value was determined. non-monetary items
that are measured in terms of historical cost in a foreign
currency are not retranslated.
the assets and liabilities in the financial statements of foreign
subsidiaries are translated at the prevailing rate of exchange
at the consolidated balance sheet date. Income and
expenses are translated at the annual average exchange rate.
the exchange differences arising from the retranslation of the
foreign operations are recognized in other Comprehensive
Income and taken to the “currency translation reserve”
in equity.
on disposal of a foreign operation the cumulative translation
differences (including, if applicable, gains and losses on related
hedges) are transferred to the Consolidated Statement of
profit and loss as part of the gain or loss on disposal.
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Items included in the Consolidated financial statements
of each of the Group’s entities are measured using the
currency of the primary economic environment in which the
entity operates (‘the functional currency’). the Consolidated
financial statements are presented in Indian Rupee (`) which
is Company’s functional and presentation currency.
l.
Financial instrument
Non-derivative financial instruments
payments of principal and interest on the principal amount
outstanding. these are non-derivative financial assets that
are not quoted in an active market. loans and receivables
(including trade and other receivables, bank and cash
balances) are measured subsequent to initial recognition
at amortized cost using the effective interest method, less
provision for impairment. Any change in their value through
impairment or reversal of impairment is recognized in the
consolidated Statement of profit and loss.
Financial assets and financial liabilities are recognized when
the Group becomes party to the contractual provisions of
the instrument.
Financial assets and liabilities are initially measured at fair
value. transaction costs that are directly attributable to the
acquisition or issue of financial assets or liabilities (other
than financial assets and liabilities at fair value through
Statement of profit and loss) are added to or deducted from
the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. transaction costs directly
attributable to the acquisition of financial assets or financial
liabilities at fair value through Statement of profit and loss
are recognized immediately in the consolidated Statement of
profit and loss. Financial assets and financial liabilities are
offset against each other and the net amount reported in the
consolidated balance sheet if, and only if, there is a currently
enforceable legal right to offset the recognized amounts and
there is an intention to settle on a net basis, or to realize the
assets and settle the liabilities simultaneously.
A financial instrument is measured at fair value through profit
or loss if:
•
•
•
it has been acquired principally for the purpose of
selling/repurchasing it in the near term;
on initial recognition it is part of a portfolio of identified
financial instruments that the Group manages together
and has a recent pattern of short term profit taking; or
it
is a derivative
hedging relationship.
that
is not designated
in a
the fair value of financial instruments denominated in a
foreign currency is determined in that foreign currency and
translated at the spot rate at the end of the reporting period.
the foreign exchange component forms part of its fair value
gain or loss. therefore for financial instruments that are
classified as fair value through Statement of profit and loss,
the exchange component is recognized in Statement of profit
and loss.
Financial Assets
Financial assets are divided into the following categories:
•
•
•
financial assets carried at amortised cost
financial assets at
Comprehensive Income
fair value
through Other
financial assets at fair value through Statement Profit
and loss;
Financial assets are assigned to the different categories
by management on initial recognition, depending on the
nature and purpose of the financial assets. the designation
of financial assets is re-evaluated at every reporting date
at which a choice of classification or accounting treatment
is available.
Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised
cost if it is held within a business model whose objective
is to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
114 AnnuAl RepoRt 2018-19
In accordance with Ind AS 109 “Financial Instruments”,
the Group recognizes impairment loss allowance on trade
receivables and content advances based on historically
observed default
loss allowance
recognized during the year is charged to consolidated
Statement of profit and loss.
Impairment
rates.
Financial assets at
Comprehensive Income
fair value
through Other
Financial assets at fair value through other Comprehensive
Income are non-derivative financial assets held within a
business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above
categories are subsequently fair valued through profit or
loss. It includes non-derivative financial assets that are either
designated as such or do not qualify for inclusion in any of the
other categories of financial assets. Gains and losses arising
from investments classified under this category is recognized
in the consolidated Statement of profit and loss when they
are sold or when the investment is impaired.
In the case of impairment, any loss previously recognized
in other comprehensive income is transferred to the
consolidated Statement of profit and loss. Impairment
losses recognized in the consolidated Statement of profit
and loss on equity instruments are not reversed through
the consolidated Statement of profit and loss. Impairment
losses recognized previously on debt securities are reversed
through the consolidated Statement of profit and loss when
the increase can be related objectively to an event occurring
after the impairment loss was recognized in the consolidated
Statement of profit and loss.
When the Group considers that fair value of financial
assets can be reliably measured, the fair values of financial
instruments that are not traded in an active market are
determined by using valuation techniques. the Group
applies its judgment to select a variety of methods and make
assumptions that are mainly based on market conditions
existing at each consolidated balance sheet date. equity
instruments measured at fair value through profit or loss that
do not have a quoted price in an active market and whose
fair value cannot be reliably measured are measured at cost
less impairment at the end of each reporting period.
An assessment for impairment is undertaken at least at
each consolidated balance sheet date. A financial asset is
derecognized only where the contractual rights to the cash
flows from the asset expire or the financial asset is transferred
and that transfer qualifies for derecognition. A financial asset
is transferred if the contractual rights to receive the cash
flows of the asset have been transferred or the Group retains
the contractual rights to receive the cash flows of the asset
but assumes a contractual obligation to pay the cash flows
to one or more recipients. A financial asset that is transferred
qualifies for derecognition if the Group transfers substantially
all the risks and rewards of ownership of the asset, or if
the Group neither retains nor transfers substantially all the
risks and rewards of ownership but does transfer control of
that asset.
Financial liabilities
Financial liabilities are classified as either ‘financial liabilities at
fair value through profit or loss’ or ‘other financial liabilities’.
Financial liabilities are subsequently measured at amortised
cost using the effective interest method or at fair value
through profit or loss.
Financial liabilities are classified as at fair value through profit
or loss when the financial liability is held for trading such as
a derivative, except for a designated and effective hedging
instrument, or if upon initial recognition it is thus designated to
eliminate or significantly reduce measurement or recognition
inconsistency or it forms part of a contract containing one or
more embedded derivatives and the contract is designated
as fair value through profit or loss.
Financial liabilities at fair value through profit or loss are stated
at fair value. Any gains or losses arising of held for trading
financial liabilities are recognized in profit or loss. Such gains
or losses incorporate any interest paid and are included in the
“other gains and losses” line item.
other financial liabilities (including borrowing and trade and
other payables) are subsequently measured at amortized
cost using the effective interest method.
the effective interest method is a method of calculating the
amortized cost of a financial liability and of allocating interest
expense over the relevant period. the effective interest rate
is the rate that exactly discounts estimated future cash
payments (including all fees and points paid or received that
form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected
life of the financial liability, or (where appropriate) a shorter
period, to the net carrying amount on initial recognition.
A financial liability is derecognized only when the obligation
is extinguished, that is, when the obligation is discharged or
cancelled or expires. Changes in fair value of liabilities are
included in the consolidated Statement of profit and loss.
m. Taxes
taxation on profit and loss comprises current tax and
deferred tax. tax is recognized in the consolidated
Statement of profit and loss except to the extent that
it relates to items recognized directly in equity or other
comprehensive income in which case tax impact is also
recognized in equity or other comprehensive income.
Current tax is provided at amounts expected to be paid
(or recovered) using the tax rates and laws that have been
enacted or substantively enacted at the consolidated
balance sheet date along with any adjustment relating to
tax payable in previous years.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. Deferred income tax
is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or
substantively enacted at the consolidated balance sheet
date and are expected to apply when the related deferred
income tax asset is realized or the deferred income tax
liability is settled in the appropriate territory.
Deferred tax assets and deferred tax liabilities are offset
when there is a legally enforceable right to set off assets
against liabilities representing current tax and where the
deferred tax assets and the deferred tax liabilities relate
to taxes on income levied by the same governing taxation
authority on either the same taxable entity or different
taxable entities which intend either to settle current tax
liabilities and assets on a net basis, or to realise the
assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Deferred tax in respect of undistributed earnings of
subsidiaries is recognized except where the Group is
able to control the timing of the reversal of the temporary
difference and the temporary difference will not reverse
in the foreseeable future. Deferred income tax assets are
recognized to the extent that it is probable that future
taxable profit will be available against which temporary
differences can be utilized.
Minimum alternate tax (MAt) paid in a year is charged to
the Consolidated Statement of profit and loss as current
tax. MAt credit entitlement is recognised as an asset
only when and to the extent there is convincing evidence
that the Group will pay normal income tax during the
specified period, which is the period for which MAt credit
is allowed to be carried forward. Such asset is reviewed
at each consolidated balance sheet date and the carrying
amount of the MAt credit asset is written down to the
extent there is no longer a convincing evidence to the
effect that the Group will pay normal income tax during the
specified period.
the carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to utilize all or part of the deferred tax asset.
unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has
become probable that future taxable profits will available
to utilize the deferred tax asset.
n.
Earnings per share (EPS)
Basic epS is computed by dividing net profit after taxes for the
year by weighted average number of equity shares outstanding
during the financial year, adjusted for bonus share elements in
equity shares issued during the year and excluding treasure
shares, if any.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account
the after income tax effect of interest and other financing
costs associated with dilutive potential equity shares and the
weighted average number of additional equity shares that
would have been outstanding assuming the conversion of all
dilutive potential equity shares.
o. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held
at call with banks, other short term highly liquid investments
which are readily convertible into known amounts of cash
and are subject to insignificant risk of changes in value. Bank
overdrafts are shown within borrowings in current liabilities
on the consolidated balance sheet. Deposits held with banks
as security for overdraft facilities are included in restricted
deposits held with bank.
p.
Segment reporting
Ind AS 108 “operating Segments” requires operating
segments to be identified on the same basis as is used
internally for the review of performance and allocation of
resources by the Chief operating Decision Maker. the
revenues of films are earned over various formats; all such
formats are functional activities of filmed entertainment
and these activities take place on an integrated basis. the
management team reviews the financial information on an
integrated basis for the Group as a whole with respective
heads of business for each region and in accordance with
Ind AS 108, the Group provides a geographical split as it
considers that all activities fall within one segment of business
EROS INTERNATIONAL MEDIA LIMITED 115
Corporate overview | ManageMent report | financial management
which is filmed entertainment. the management team also
monitors performance separately for individual films or for at
least 12 months after the theatrical release.
the Group has identified three geographic markets: India,
united Arab emirates and Rest of the world.
q.
Statement of cash flows
Cash flows are reported using the indirect method, whereby
profit before tax is adjusted for the effects of transactions of
a non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows.
the cash flows from operating, investing and financing
activities of the Group are segregated.
In line with the amendments to Ind AS 7 Statement of Cash
flows (effective from 1 April 2017), the Group has provided
disclosures that enable users of the consolidated financial
statements to evaluate changes in liabilities arising from
financing activities, including both changes arising from cash
flows and non-cash changes. the adoption of amendment
did not have any material impact on the consolidated financial
statements.
r.
Dividends
the Group recognises a liability for dividends to equity
holders of the Company when the dividend is authorized and
the dividend is no longer at the discretion of the Company. As
per the corporate laws in India, a dividend is authorised when
it is approved by the shareholders. A corresponding amount
is recognised directly in equity.
s.
Event occurring after the reporting date
Adjusting events (that provides evidence of condition that
existed at the consolidated balance sheet date) occurring
after the consolidated balance sheet date are recognized in
the consolidated financial statements. Material non adjusting
events (that are inductive of conditions that arose subsequent
to the consolidated balance sheet date) occurring after the
consolidated balance sheet date that represents material
change and commitment affecting the financial position are
disclosed in the Directors’ Report.
t.
Standards Issued but not yet Effective
Ministry of Corporate Affairs (“MCA”) through Companies
(Indian Accounting Standards) Amendment Rules, 2019
and Companies (Indian Accounting Standards) Second
Amendment Rules, has notified the following new and
amendments to Ind AS which the Group has not applied as
they are effective from 1 April 2019:
Ind AS 116 – Leases
Ind AS 116 will replace the existing leases standard, Ind
AS 17 leases. Ind AS 116 sets out the principles for the
recognition, measurement, presentation and disclosure of
leases for both lessees and lessors. It introduces a single,
on-balance sheet lessee accounting model for lessees. A
lessee recognises right-of-use asset representing its right
to use the underlying asset and a lease liability representing
its obligation to make lease payments. the standard also
contains enhanced disclosure requirements for lessees. Ind
AS 116 substantially carries forward the lessor accounting
requirements in Ind AS 17.
the Group will adopt Ind AS 116 effective annual reporting
period beginning 1 April 2019. the Group will apply the
standard to its leases, retrospectively, with the cumulative
effect of initially applying the standard, recognised on the date
of initial application (1 April 2019). Accordingly, the Group will
not restate comparative information, instead, the cumulative
effect of initially applying this Standard will be recognised as
116 AnnuAl RepoRt 2018-19
an adjustment to the opening balance of retained earnings
as on 1 April 2019. on that date, the Group will recognise a
lease liability measured at the present value of the remaining
lease payments. the right-of-use asset is recognised at its
carrying amount as if the Standard had been applied since
the commencement date, but discounted using the lessee’s
incremental borrowing rate as at 1 April 2019. In accordance
with the standard, the Group will elect not to apply the
requirements of Ind AS 116 to short-term leases and leases
for which the underlying asset is of low value.
on transition, the Group will be using the practical expedient
provided by the standard and therefore, will not reassess
whether a contract, is or contains a lease, at the date of initial
application.
the Group is in the process of finalising changes to systems
and processes to meet the accounting and the reporting
requirements of the standard in conjunction with review of
lease agreements.
the Group will recognise with effect from 1 April 2019 new
assets and liabilities for its operating leases of premises
and other assets. the nature of expenses related to those
leases will change from lease rent in previous periods to (a)
amortisation charge for the right-to-use asset, and (b) interest
accrued on lease liability.
previously, the Group recognised operating lease expense
on a straight-line basis over the term of the lease, and
recognised assets and liabilities only to the extent that there
was a timing difference between actual lease payments and
the expense recognised.
As a lessor, sublease shall be classified as an operating lease
if the head lease is classified as a short term lease. In all other
cases, the sublease shall be classified as a finance lease.
Ind AS 12 – Income taxes (amendments relating to
income tax consequences of dividend and uncertainty
over income tax treatments)
the amendment relating to income tax consequences of
dividend clarify that an entity shall recognise the income
tax consequences of dividends in profit or loss, other
comprehensive income or equity according to where the
entity originally recognised those past transactions or
events. the Group does not expect any impact from this
pronouncement. It is relevant to note that the amendment
does not amend situations where the entity pays a tax on
dividend which is effectively a portion of dividends paid to
taxation authorities on behalf of shareholders. Such amount
paid or payable to taxation authorities continues to be
charged to equity as part of dividend, in accordance with
Ind AS 12.
the amendment to Appendix C of Ind AS 12 specifies
that the amendment is to be applied to the determination
of taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits and tax rates, when there is uncertainty
over income tax treatments under Ind AS 12. It outlines the
following: (1) the entity has to use judgement, to determine
whether each tax treatment should be considered separately
or whether some can be considered together. the decision
should be based on the approach which provides better
predictions of the resolution of the uncertainty (2) the entity is
to assume that the taxation authority will have full knowledge
of all relevant information while examining any amount (3)
entity has to consider the probability of the relevant taxation
authority accepting the tax treatment and the determination
of taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits and tax rates would depend upon the
probability. the Group does not expect any significant impact
of the amendment on its financial statements.
Ind AS 109 – Prepayment Features with Negative
Compensation
the amendments relate to the existing requirements in
Ind AS 109 regarding termination rights in order to allow
measurement at amortised cost (or, depending on the
business model, at fair value through other comprehensive
income) even in the case of negative compensation
payments. the Group does not expect this amendment to
have any impact on its financial statements.
Ind AS 19 – Plan Amendment, Curtailment or Settlement
the amendments clarify
if a plan amendment,
that
curtailment or settlement occurs, it is mandatory that the
current service cost and the net interest for the period after
the re-measurement are determined using the assumptions
used for the re-measurement. In addition, amendments have
been included to clarify the effect of a plan amendment,
curtailment or settlement on the requirements regarding the
asset ceiling. the Group does not expect this amendment to
have any significant impact on its financial statements.
Ind AS 23 – Borrowing Costs
the amendments clarify that if any specific borrowing
remains outstanding after the related asset is ready for its
intended use or sale, that borrowing becomes part of the
funds that an entity borrows generally when calculating the
capitalisation rate on general borrowings. the Group does
not expect any impact from this amendment.
Ind AS 28 – Long-term Interests in Associates and
Joint Ventures
the amendments clarify that an entity applies Ind AS 109
Financial Instruments, to long-term interests in an associate
or joint venture that form part of the net investment in the
associate or joint venture but to which the equity method is
not applied. the Group does not currently have any long-
term interests in associates and joint ventures.
Ind AS 103 – Business Combinations and Ind AS 111 –
Joint Arrangements
the amendments to Ind AS 103 relating to re-measurement
clarify that when an entity obtains control of a business that
is a joint operation, it re-measures previously held interests
in that business. the amendments to Ind AS 111 clarify
that when an entity obtains joint control of a business that
is a joint operation, the entity does not remeasure previously
held interests in that business. the Group will apply the
pronouncement if and when it obtains control/joint control of
a business that is a joint operation.
Significant accounting
assumptions
judgements, estimates and
the preparation of the consolidated financial statements requires
management to make judgements, estimates and assumptions,
as described below, that affect the reported amounts and the
disclosures. the Group based its assumptions and estimates on
parameters available when the consolidated financial statements
were prepared and reviewed at each consolidated balance sheet
date. uncertainty about these assumptions and estimates could
result in outcomes that may require a material adjustment to the
reported amounts and disclosures.
a.
Intangible assets
the Group is required to identify and assess the useful life of
intangible assets and determine their income generating life.
Judgment is required in determining this and then providing
an amortisation rate to match this life as well as considering
the recoverability or conversion of advances made in respect
of securing film content or the services of talent associated
with film production.
Accounting for the film content requires management’s
judgment as it relates to total revenues to be received and
costs to be incurred throughout the life of each film or its
license period, whichever is the shorter. these judgments are
used to determine the amortisation of capitalized film content
costs. the Group uses a stepped method of amortisation on
first release film content writing off more in year one which
recognizes initial income flows and then the balance over a
period of up to nine years. In the case of film content that is
acquired by the Group after its initial exploitation, commonly
referred to as library, amortisation is spread evenly over the
lesser of 10 years or the license period. Management’s policy
is based upon factors such as historical performance of
similar films, the star power of the lead actors and actresses
and others. Management regularly reviews, and revises when
necessary, its estimates, which may result in a change in the
rate of amortisation and/or a write down of the asset to the
recoverable amount.
the Group tests annually whether intangible assets including
goodwill have suffered any impairment, in accordance with
the accounting policy. these calculations require judgments
and estimates to be made, and in the event of an unforeseen
event these judgments and assumptions would need to
be revised and the value of the intangible assets could be
affected. there may be instances where the useful life of an
asset is shortened to reflect the uncertainty of its estimated
income generating life.
b.
Employee benefit plans
the cost of the employment benefit plans and their present
value are determined using actuarial valuations which
involves making various assumptions that may differ from
actual developments in the future.
c.
Fair value measurement of Employee shares based
compensation plan
the fair value of eSop liability is determined using valuation
methods which involves making various assumptions that
may differ from actual developments in the future.
d.
Impairment of non-financial assets
impairment, management estimates
In assessing
the
recoverable amount of each asset or cash-generating unit
based on expected future cash flows and uses an interest
rate to discount them. estimation uncertainty relates
to assumptions about future operating results and the
determination of a suitable discount rate.
e.
Provisions
provisions and liabilities are recognized in the period when
it becomes probable that there will be a future outflow of
funds resulting from past operations or events and the
amount of cash outflow can be reliably estimated. the timing
of recognition and quantification of the liability require the
application of judgment to existing facts and circumstances,
which can be subject to change. Since the cash outflows can
take place many years in the future, the carrying amounts of
provisions and liabilities are reviewed regularly and adjusted
to take account of changing facts and circumstances.
f.
Fair value measurement
Management uses valuation techniques to determine the fair
value of financial instruments (where active market quotes
are not available) and non-financial assets. this involves
developing estimates and assumptions consistent with how
market participants would price the instrument. Management
bases its assumptions on observable data as far as possible
but this is not always available. In that case management uses
the best information available. estimated fair values may vary
from the actual prices that would be achieved in an arm’s length
transaction at the reporting date.
EROS INTERNATIONAL MEDIA LIMITED 117
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
2
Property, Plant and Equipment
Details of the Company’s property, plant and equipment and their carrying amounts are as follows:
Amount ` in lakhs
Gross carrying amount
Buildings
Leasehold
improvements
Furniture
and
fixtures
Motor
vehicles
Office
equipment
Data
processing
equipment
Studio
equipment
Total
Balance as at 31 March 2017
4,108
Additions
Adjustments/ disposals
Foreign currency translation difference
-
-
-
Balance as at 31 March 2018
4,108
Additions
Adjustments/ disposals
Foreign currency translation difference
-
-
-
258
253
-
-
511
358
-
-
794
857
387
1,635
1,631
9,670
13
272
(53)
(1)
(292)
-
26
(79)
(5)
81
(54)
(1)
-
645
(10)
(488)
-
(7)
753
837
329
1,661
1,621
9,820
2
(13)
-
-
-
-
34
(8)
-
26
(71)
-
-
-
-
420
(92)
-
Balance as at 31 March 2019
4,108
869
742
837
355
1,616
1,621
10,148
Accumulated depreciation
Balance as at 31 March 2017
Depreciation charge
Adjustments/ disposals
Foreign currency translation difference
Balance as at 31 March 2018
Depreciation charge
Adjustments/ disposals
Foreign currency translation difference
1,105
146
-
-
1,251
139
-
-
33
178
-
-
211
190
-
-
625
54
(50)
(1)
628
40
(10)
-
530
112
(261)
-
381
140
-
-
269
61
(79)
(5)
1,412
1,493
5,467
125
(52)
-
42
(9)
-
718
(451)
(6)
246
1,485
1,526
5,728
49
(9)
-
56
(35)
-
29
-
-
643
(54)
-
Balance as at 31 March 2019
1,390
401
658
521
286
1,506
1,555
6,317
Net carrying amount
Capital-work-in progress 31 March 2018
Capital-work-in progress 31 March 2019
8
7
Balance as at 31 March 2018
Balance as at 31 March 2019
2,857
2,718
300
468
125
84
456
316
83
69
176
110
95
66
4,100
3,838
the Company's immovable property situated in Mumbai, India is pledged against the borrowings as explained in note 17 and 23.
3.
a) Intangible assets
Details of the Group's Intangible assets and their carrying amounts are as follows:
Amount ` in lakhs
Gross carrying amount
Balance as at 31 March 2017
Additions
Adjustments/ Deletion
Amounts written off
Foreign currency translation difference
Balance as at 31 March 2018
Additions
Adjustments/ Deletion
Amounts written off
Foreign currency translation difference
Balance as at 31 March 2019
118 AnnuAl RepoRt 2018-19
Content
advances
141,611
34,863
(25,549)
228
81
151,234
39,878
(30,087)
(3,913)
1,203
158,315
Film rights
Other intangible
assets
512,490
20,550
(53,487)
-
2,206
481,759
14,105
-
-
5,488
501,352
2,665
-
-
-
-
2,665
16
-
-
-
2,681
Total
515,155
20,550
(53,487)
-
2,206
484,424
14,121
-
-
5,488
504,033
Notes
to the consolidated financial statements and other explanatory information
Accumulated amortization
Balance as at 31 March 2017
Amortisation charge
Adjustments/ Deletion
Foreign currency translation difference
Balance as at 31 March 2018
Amortisation charge
Adjustments/ Deletion
Foreign currency translation difference
Balance as at 31 March 2019
Net carrying amount
Balance as at 31 March 2018
Balance as at 31 March 2019
Intangible assets under development
Balance as at 31 March 2018
Balance as at 31 March 2019
3
b) Goodwill on consolidation
Content
advances
Film rights
Other intangible
assets
392,120
28,838
(50,409)
6,067
376,616
29,643
-
3,859
410,118
765
310
-
-
1,075
266
-
-
1,341
Film rights
Other intangible
assets
105,143
91,234
1,590
1,340
-
-
-
-
-
-
-
Content
advances
151,234
158,315
7,079
9,049
Total
392,885
29,148
(50,409)
6,067
377,691
29,909
-
3,859
411,459
Total
106,733
92,574
on 1 August 2015, Company acquired 100% of the shares and voting interests in universal power Systems private limited ("techzone").
Goodwill of ` 2,130 lakhs was recognised on acquisition. Impairement provision of ` 847 lakhs was made upto previous year. During the year,
Impairement loss of ` 452 lakhs has been reveresed.
the Group tests annually whether goodwill has suffered impairment, in accordance with its accounting policy. the recoverable amount of
cash-generating units has been determined based on value in use calculations. We use market related information and estimates (generally risk
adjusted discounted cash flows) to determine value in use. Cash flow projections take into account past experience and represent management’s
best estimate about future developments. Key assumptions on which management has based its determination of fair value less costs to sell and
value in use includes estimated growth rates, weighted average cost of capital and tax rates.
As at 31 March 2019, for assessing impairment of goodwill, value in use is determined using discounted cash flow method. the estimated cash
flows for a period of four years were developed using internal forecasts, extrapolated for the fifth year, and a pre-tax discount rate of 15.0% and
terminal growth rate of 5%. these estimates, includes the methodology used, can have a material impact on the respective values and ultimately
the amount of any goodwill.
4
Loans
Amounts due from related parties (refer note 43)
unsecured, considered good
Total
5
Other financial assets
Security deposits
Security deposits- related parties (refer note 43)
Security deposits- others
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
42,852
1,632
44,484
10,180
1,682
11,862
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
582
213
795
617
172
789
EROS INTERNATIONAL MEDIA LIMITED 119
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
6
Other non- current assets
Advance payment of taxes (net of provision)
Balances due with statutory authorities
Total
7
Inventory
VCD/ DVD/ Audio CDs
Film rights
Total
8
Trade and other receivables
Secured, considered good
unsecured, considered good
Dues from related parties (refer note 43)
unbilled Income
less : expected credit loss
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
1,008
5,383
6,391
819
3,867
4,686
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
-
301
301
9
178
187
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
1,327
69,856
17,690
1,486
90,359
(11,007)
79,352
1,327
64,008
9,136
574
75,045
(5,188)
69,857
All amounts are short-term. the net carrying value of trade receivables is considered a reasonable approximation of fair value.
9
Cash and cash equivalents
Balances with banks
-in current accounts
-Cheques, drafts on hand
Cash on hand
Other Bank Balances
-Deposits with maturity of more than 3 months but less than 12 months
Total
10 Restricted bank deposits
i. unclaimed dividend account
ii. Margin money deposit- less than 12 Months*
iii. Deposits with maturity more than 12 months*
less: Disclosed under non current financial assets - Restricted bank deposits
Total
* given as securities against fund based working capital limits.
120 AnnuAl RepoRt 2018-19
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
586
-
60
646
1,454
5
27
1,486
13,465
14,111
12,744
14,230
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
1
5,993
511
6,505
(511)
5,994
1
3,775
716
4,492
(716)
3,776
Notes
to the consolidated financial statements and other explanatory information
11 Loans
Amounts due from related parties (refer note 43)
loans and advances to employees
other loans
Security deposits
Total
12 Other financial assets
Interest accrued
Amounts due from related parties (refer note 43)
Forward contract assets
others
Total
13 Other current assets
prepaid-expenses
Amount due from related parties (refer note 43)
Total
14 Share capital
Authorised share capital
equity shares of ` 10 each
Issued, subscribed and fully paid up
equity shares of ` 10 each
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
4
84
1,698
41
1,827
335
159
637
36
1,167
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
390
561
-
47
998
114
-
188
-
302
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
246
51
297
56
627
683
` in lakhs, except share data
As at 31 March 2019
As at 31 March 2018
Number
Amounts
Number
Amounts
125,000,000
125,000,000
95,508,140
95,508,140
12,500
12,500
9,551
9,551
125,000,000
125,000,000
94,971,877
94,971,877
12,500
12,500
9,497
9,497
a) Reconciliation of paid up share capital (Equity Shares)
` in lakhs, except share data
Balance at the beginning of the year
Add: Shares issued during the year
Balance at the end of the year
As at 31 March 2019
As at 31 March 2018
Number
Amounts
Number
Amounts
94,971,877
536,263
95,508,140
9,497
54
9,551
93,858,717
1,113,160
94,971,877
9,385
112
9,497
During the year, the Company has issued total 536,263 equity shares (2018: 1,113,160 ) on exercise of options granted under the employees
stock option plan (eSop) wherein part consideration was received in the form of employees services.
EROS INTERNATIONAL MEDIA LIMITED 121
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
b)
Shares held by holding company, ultimate holding company, subsidiaries / associates of holding company or ultimate holding Company
As at 31 March 2019
As at 31 March 2018
Number
Amounts
Number
Amounts
` in lakhs, except share data
equity shares of ` 10 each
eros Worldwide FZ llC - the Holding Company
eros Digital private limited - fellow subsidiary
37,877,302
21,700,000
3,788
2,170
35,409,440
21,700,000
3,541
2,170
c) Details of Shareholders holding more than 5% of the shares
As at 31 March 2019
As at 31 March 2018
Number % Holding in the
class
Number % Holding in the
class
equity shares of ` 10 each
eros Worldwide FZ llC - the Holding Company
eros Digital private limited - fellow subsidiary
37,877,302
21,700,000
39.66%
22.72%
35,409,440
21,700,000
37.28%
22.85%
d) Details of employee stock options issued during the last 5 years
During the period of five years immediately preceding the reporting date, the Company has issued total 2,633,980 equity shares
(31 March 2018: 2,149,567) on exercise of options granted under the employees stock option plan (eSop) wherein part consideration was
received in the form of employee services.
e) Details of equity share issued for consideration other than cash during the last 5 years
During the period of five years immediately preceding the reporting date, the Company has issued total 900,970 equity shares
(31 March 2018: 900,970) to the shareholders of upSpl at a premium of ` 586 per share in exchange for the entire shareholding of upSpl.
f)
Rights, preferences, restrictions of Equity Shares
the Company has only one class of equity shares having par value of ` 10 per share. every holder is entitled to one vote per share. the dividend,
if any, proposed by the Board of Directors and approved by the Shareholders in the Annual General Meeting is paid in Indian rupees.
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.
15 Other equity
Securities premium reserve
Balance at the beginning of the year
Add : Additions for employee stock options exercised during the year
Add : transfer from share option outstanding account
Balance at the end of the year
Share options outstanding account
Balance at the beginning of the year
less: transfer to securities premium reserve
Add: employee stock option compensation expense
Add: employee stock option compensation expense to employee's of subsidiary
Balance at the end of the year
Capital reserves
As per last year balance sheet
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
40,498
-
1,049
41,547
1,577
(1,049)
779
37
1,344
38,141
247
2,110
40,498
2,645
(2,110)
862
180
1,577
56
56
122 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
General reserves
As per last year balance sheet
Surplus from Statemet of Profit & Loss
Balance at the beginning of the year
Add : profit for the year
Balance at the end of the year
Other comprehensive income
a) Foreign currency translation reserve
Balance at the beginning of the year
Movement during the year
Share of non Controlling shareholders
Divestment of subsidiary
Balance at the ending of the year
b) Remeasurement gain on defined benefit plan
Total
Nature and Purpose of Reserves:-
As at
31 March 2019
As at
31 March 2018
508
508
167,433
26,908
194,341
4,654
5,094
-
-
9,748
116
144,499
22,934
167,433
5,668
(22)
222
(1,214)
4,654
77
247,660
214,803
Securities Premium Reserve: the amount received in excess of face value of the equity shares is recognized in Securities premium Reserve.
General Reserve: General Reserve was created by transferring a portion of the net profit of the Company as per the requirements of the
Companies Act, 2013.
Capital Reserve: Capital Reserve is used from pre-acquisition profit of subsidiaries.
Foreign Currency Translation Reserve : exchange Fluctuation Reserve represents the unrealised gains and losses on account of translation
of foreign subsidiaries into the reporting currency.
16 Non- controlling interest
Balance at beginning of the year
opening balance
profit/(loss) for the year
Share in Foreign Currency translation reserve
Divestment of subsidiary
Balance at end of year
17 Borrowings
a) Term Loans
Secured
term loan from banks*
Car loans#
others
Unsecured
term loan from others**
less: Cumulative effect of unamortised cost
less: Current maturities disclosed under other current financial liabilities (refer note 26)
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
1,288
(260)
-
-
1,028
(466)
188
(222)
1,788
1,288
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
9,721
245
142
3,887
13,995
(71)
(5,200)
8,724
15,761
364
6,240
22,365
(196)
(7,217)
14,952
EROS INTERNATIONAL MEDIA LIMITED 123
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
* term loans from banks carry an interest rate between 12% - 14% are secured by pari passu first charge on the DVD/satellite rights acquired
for the domestic market, actionable claims, revenue and receivables arising on sales of the rights and negatives of films. term loans are further
secured by equitable mortgage of Company's immovable properties situated at mumbai (India), amounts held as margin money, corporate
guarantee of eros International plC (the ultimate holding company), residual value of equipments and vehicles and existing rights of hindi films
with nil book value.
# Car loans are secured by hypothecation of vehicles acquired there against, carrying rate of interest of 7.48% - 9.50% which are repayable as
per maturity profile set out below.
** term loan from others carry an interest rate between 15% to 16% are secured against the pledge of company's shares held by holding
company, current assets of a subsidiary company and corporate guarantee of holding company and subsidiary company.
Maturity profile of long term borrowing is set out below:-
As at 31 March 2019
Less than 1 year
1-3 years
3-5 years
5,014
118
68
-
5,200
4,707
95
106
3,287
8,195
-
-
-
600
600
As at 31 March 2018
Less than 1 year
1-3 years
3-5 years
6,322
155
740
7,217
8,386
209
3,220
11,815
1,053
-
2,280
3,333
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
108
108
102
102
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
25
25
-
-
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
426
9
435
476
11
487
Secured
term loan from banks
Car loan
others
Unsecured
term loan from others
Total
Secured
term loan from banks
Car loan
Unsecured
term loan from others
Total
18 Trade payable - non current
payable to related parties (refer note 43)
Total
19 Other financial liabilities
Security deposits
Total
20 Employee benefit obligations - non current
provision for gratuity (refer note 40)
leave encashment
Total
124 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
21 Deferred tax liabilities (net)
Deferred Tax Liability arising on account of
Depreciation on tangible assets
Amortisation of intangible assets
Total Deferred Tax Liability
Deferred Tax Asset arising on account of
Depreciation on tangible assets
Disallowances under Income tax Act, 1961
Gratuity and leave encashment
others
Minimum alternative tax credit recoverable
Total Deferred Tax Assets
Total Deferred Tax Liabilities (net)
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
77
23,084
23,161
52
985
19
4,085
62
5,203
17,958
107
26,742
26,849
54
971
15
797
511
2,348
24,501
Reconciliation of tax expense and the accounting profit multiplied by India's domestic tax rate:
Profit before tax
Income tax expense
tax rate as a % of profit before tax
effect of Income taxed at higher/ (lower) rates
effect of Income taxes relating to prior years
effect of change in deferred tax balances due to change in tax rates
effect of unrecognised deferred tax assets
effect of Items not deductible for tax purpose
effect of MAt Credit
others
As at
31 March 2019
As at
31 March 2018
31,763
5,115
16.10%
0.00%
1.67%
-0.32%
-0.44%
-1.47%
0.00%
-0.20%
28,735
5,613
19.53%
0.00%
-0.62%
-0.86%
-2.32%
-1.09%
0.00%
0.19%
Average Income Tax Rate applicable to individual entities
15.35%
14.83%
22 Other non-current liabilities
Deferred revenue
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
10,050
10,050
1,512
1,512
EROS INTERNATIONAL MEDIA LIMITED 125
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Notes
to the consolidated financial statements and other explanatory information
23 Short-term borrowings
Secured
Secured from banks
Unsecured
unsecured from other*
From related parties (refer note 43)
Total
Secured short term borrowings include:
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
38,605
38,813
6,135
528
45,268
7,515
480
46,808
Cash credit, secured by way of hypothecation of inventories and receivables relating to domestic rights operations on pari passu basis.
Bills discounted, secured by document of title to goods and accepted hundies with first pari passu charge on current assets.
Drawee bills discounted secured by assignment of film processing laboratory letter conveying rights on the negative of the particular film being
co-produced.
packing credit, secured by hypothecation of films and film rights with first pari passu charge on current assets.
*loan from others carry an interest rate between 14% - 15% , secured by security provided by holding company.
24 Acceptances
payable under the film financing arrangements
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
5,796
5,796
5,796
5,796
Acceptances comprise of credit availed from banks for payment to film producers for film co-production arrangement entered by the group. the
carrying value of acceptances are considered a reasonable approximation of fair value.
25 Trade payables - current financials liabilities
trade payable
payable to related parties (refer note 43)
Total
26 Other financial liabilities
Current maturities of long-term borrowings (refer note 17)
Interest accrued but not due on borrowings
Interest accrued and due on borrowings
employee dues
unclaimed dividend*
other expenses payable
Forward contract liabilities
other payable to related party (refer note 43)
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
11,017
20,053
31,070
11,780
20,547
32,327
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
5,200
7,217
147
161
657
1
792
430
252
299
-
373
1
902
-
274
7,640
9,066
* these figures do not includes any amount due and outstanding to be credited to Investor education and protection Fund.
126 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
27 Employee benefit obligations - current
Gratuity
Compensated Absences
Total
28 Current tax liabilites (net)
provision for Corporate taxes (net of advance tax)
Total
29 Other Current Liabilities
Advance from customers- related parties (refer note 43)
Advances from customers- others
Duties & taxes payable
Deferred income
others
Total
30 Revenue from operations
Sale/distribution/exhibition of films and other rights
other operating revenues
Total
31 Other income
Interest income :
Bank deposits
others
Income from export Incentives
Sundry balances written back and Bad debts recovered
provision written back for expected credit loss
Reversal of provision for diminishment in the value of investments
Gain on disposal of property, plant and eqipment (net)
other non-operating income
Total
32 Purchases / Operating Expenses
Film rights cost
Amortization of film rights (refer note 3)
Total
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
121
251
372
63
161
224
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
11,400
11,400
3,684
3,684
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
14,059
1,040
7,385
781
222
3,452
1,152
6,555
2,449
29
23,487
13,637
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
103,027
103
103,130
95,815
201
96,016
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
290
1,166
1,618
74
5,497
452
-
1,742
10,839
215
648
-
98
2,490
-
6
1,528
4,985
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
17,676
29,643
47,319
11,089
28,838
39,927
EROS INTERNATIONAL MEDIA LIMITED 127
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Notes
to the consolidated financial statements and other explanatory information
33 Changes in Inventories
Inventories at the end of the year of -
VCD/ DVD/ Audio CDs
Stock-in-trade
Inventories at the beginning of the year
VCD/ DVD/ Audio CDs
Film Rights
Total
34 Employee benefit expenses
Salaries and wages
Contributions to provident and other funds (refer note 40)
employee share based compensation (refer note 41)
Gratuity expenses (refer note 40)
Staff welfare expenses
Total
35 Finance costs
Interest expenses on loans taken from banks
other interest expenses
Interest on delayed payment of taxes
less: Interest expenses capitalised to film rights*
less : Interest received
Total
*the capitalisation rate of interest was 12.12 % (31 March 2018 : 10.91 %)
36 Depreciation and amortization expenses
Depreciation on property, plants and equipments (refer note 2)
Amortization on intangible assets other than film rights (refer note 3)
Total
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
-
301
301
9
178
187
(114)
9
178
187
38
8
46
(141)
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
3,841
183
799
131
125
5,079
4,333
217
1,013
221
110
5,894
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
8,964
451
1,684
11,099
(3,017)
(334)
7,748
8,359
502
1,571
10,432
(2,115)
(264)
8,053
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
643
266
909
718
310
1,028
128 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
37 Other expenses
print & digital distribution cost
Selling & distribution expenses
processing and other direct cost
Home entertainment products related cost
Shipping, packing & Forwarding expenses
power and fuel
Rent including lease rentals
Repairs and maintenance
Insurance
Rates and taxes
Communication expenses
travelling and conveyance
legal and professional expenses
payments to auditors
trade receivables written off
Content advance written off
Advances & deposits written off
provision for expected credit loss on receivables
provision for doubtful advances
loss on disposal of propery, plan and equipment (net)
provision for diminishment in the value of investments
Corporate social responsibility expenses
loss on foreign exchange (net)
Miscellaneous expenses
Total
38 Earnings per share
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
851
2,565
200
-
69
65
453
137
29
68
80
305
1,557
122
1,917
2,226
319
8,023
1,687
2
-
30
44
516
21,265
1,182
3,491
208
23
72
81
443
147
21
82
77
298
1,404
157
5,541
228
44
1,652
295
-
777
18
693
571
17,505
Year ended
31 March 2019
Year ended
31 March 2018
a) Computation of net profit for the year
profit after tax attributable to equity shareholders (` in lakhs)
26,908
22,934
b) Computation of number of shares for Basic Earnings per share
Weighted average number of equity shares
Total
c) Computation of number of shares for Diluted Earnings per share
95,205,870
94,524,136
95,205,870
94,524,136
Weighted average number of equity shares used in the calculation of basic earning per share
95,205,870
94,524,136
Add:- effect of eSops
Total
d) Nominal value of shares
e) Computation
Basic (in `)
Diluted (in `)
828,067
1,342,648
96,033,937
95,866,784
10
10
28.26
28.02
24.26
23.92
EROS INTERNATIONAL MEDIA LIMITED 129
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
39 Contingent liabilities and commitments (to the extent not provided for)
a) Contingent liabilities
(i) Claims against the Company not acknowledged as debt
Sales tax claims disputed by the Company
Service tax (refer note 1)
Income tax liability that may arise in respect of matters in appeal
(ii) Guarantees
Guarantee given in favor of various government authorities
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
2,088
43,828
105
35
46,056
3,195
39,757
79
25
43,056
Notes:
1.a During the year ended 31 March 2015, the Company received a show cause notice from the Commissioner of Service tax to show cause
why an amount aggregating to ` 15,675 lakhs for the period 1 April 2009 to 31 March 2014 should not be levied on and paid by the
Company for service tax arising on temporary/perpetual transfer of copyright services and other matters.
In connection with the aforementioned matters, on 19 May 2015, the Company received an order-in-original issued by the principal
Commissioner, Service tax, wherein the department confirmed the demand of ` 15,675 lakhs along with interest and penalty amounting to
` 15,675 lakhs resulting into a total demand of ` 31,350 lakhs.
on 3 September 2015, the Company filed an appeal against the said order before the authorities. the Company has paid ` 1,000 lakhs
under protest. Considering the facts and nature of levies and the ad-interim protection for the period 1 July 2010 to 30 June 2012 granted
by the Honorable High Court of Mumbai, the Company expects that the final outcome of this matter will be favourable. Accordingly, based
on the assessment made after taking appropriate legal advise, no additional liability has been recorded in the financial statements.
on 8 october 2018, the Company received a show cause notice from the Commissioner of Service tax to show cause why an amount
aggregating to ` 1347 lakhs and penalty of ` 1347 lakhs resulting to total demand of ` 2694 lakhs for the period 1 April 2014 to 31 March
2015 should not be levied on and paid by the Company for service tax arising on temporary/perpatual transfer of copyright services and
other matters. Considering the facts and nature of levies and the ad-interim protection for the period 1 July 2010 to 30 June 2012 granted
by the Honorable High Court of Mumbai, the Company expects that the final outcome of this matter will be favorable. Accordingly, based
on the assessment made after taking appropriate legal advise, no additional liability has been recorded in the financial statements.
1.b on 18 April 2016, a subsidiary of the Company- eros International Films private limited, received a show cause notice from the Commissioner
of Service tax to show cause why an amount aggregating to ` 597 lakhs and penalty of 60 lakhs for the period 1 April 2014 to 31 March
2015 should not be levied on and paid by the Company for service tax arising on temporary/ perpetual transfer of copyright services and
other matters. Considering the facts and nature of levies and the ad-interim protection for the period 1 July 2010 to 30 June 2012 granted
by the Honorable High Court of Mumbai, the Company expects that the final outcome of this matter will be favorable. Accordingly, based
on the assessment made after taking appropriate legal advise, no additional liability has been recorded in the financial statements.
on 23 April 2018, a subsidiary of the Company- eros International Films private limited, received a show cause notice from the
Commissioner of Service tax to show cause why an amount aggregating to ` 824 lakhs for the period 1 April 2015 to 31 March 2016
should not be levied on and paid by the Company for service tax arising on temporary/perpetual transfer of copyright services and other
matters. Considering the facts and nature of levies and the ad-interim protection for the period 1 July 2010 to 30 June 2012 granted by the
Honorable High Court of Mumbai, the Company expects that the final outcome of this matter will be favorable. Accordingly, based on the
assessment made after taking appropriate legal advise, no additional liability has been recorded in the financial statements.
1.c on 28 February 2013, a subsidiary of the Company- universal power System private limited (acquired on 1 August 2015), received a
service tax order with reference to the internal audit conducted by the service tax department. Based on the audit conducted, department
has demanded tax amounting to ` 114 lakhs against which the subsidiary has paid ` 20 lakhs. the subsidiary has not made any provision
in the books to give effect to this order and filed an appeal against the demand. the subsidiary expects that the final outcome will be
favorable. Accordingly, based on the assessment made after appropriate legal advice, ` 94 lakhs has been considered as contingent liability
and no liability has been recorded in the financial statements.
2
3
In addition, the Company is liable to pay service tax on use on temporary transfer of copyright in the period 1 July 2010 to 30 June 2012.
the Company filed a writ petition in Mumbai High Court challenging the constitutionality and the legality of this entry and received ad-interim
protection and accordingly, no amounts were provided for by the Company for the period 1 April 2011 to 30 June 2012.
It is not practicable for the Group to estimate the timing of cash outflows,if any, in respect of the above, pending resolution of the respective
proceedings.
130 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
4
From time to time, the Group is involved in legal proceedings arising in the ordinary course of its business, typically intellectual property
litigation and infringement claims related to the Company's feature films and other commercial activities, which could cause the Company
to incur expenses or prevent the Company from releasing a film. While the resolution of these matters cannot be predicted with certainty,
the Company does not believe, based on current knowledge or information available, that any existing legal proceedings or claims are likely
to have a material and adverse effect on its financial position, results of operations or cash flows.
5
the Company does not expect any reimbursements in respect of the above contingent liabilities.
(b) Commitments
estimated amount of contracts remaining to be executed on capital account
Total
40 Employment benefits
a) Gratuity
Amount ` in lakhs
As at
31 March 2018
As at
31 March 2017
168,465
168,465
213,192
176,842
176,842
219,898
the following table set out the status of the gratuity plan as required under Indian Accounting Standard (Ind AS) - 19, employee benefits, and the
reconciliation of opening and closing balances of the present value of the defined benefit obligation:
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
I Change in projected benefit obligation
liability at the beginning of the year
Interest cost
Current service cost
past service cost
Benefits paid
Actuarial loss on obligations
liability at the end of the year
Current portion
non-current portion
II Recognized in Balance Sheet
liability at the end of the year
Amount recognized in Balance Sheet
III Expense recognized in Statement of Profit and loss
Current service cost
Interest cost
past service cost
Actuarial (Gains) / losses
Arising from changes in experience
Arising from changes in financial assumptions
Arising from changes in demographic assumptions
expense/(income) recognized in other comprehensive income
IV Assumptions used
Discount rate
long-term rate of compensation increase
Attrition Rate
expected average remaining working life
539
42
89
0
(63)
(61)
547
121
426
547
547
89
42
0
131
(33)
10
(43)
(66)
474
35
80
106
(45)
(111)
539
63
476
539
539
80
35
106
221
(89)
(22)
-
(111)
6.76%- 7.22%
7.35%- 7.85
10.00%
13%-23%
6 years
10.00%
2% -20%
4-17 years
EROS INTERNATIONAL MEDIA LIMITED 131
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
V A quantitative sensitivity analysis for significant assumption as at 31 March 2019 is as shown below:
Amount ` in lakhs
Impact on defined benefit obligation
projected benefit obligation on current assumption
Discount rate
1.00 % increase
1.00 % decrease
Rate of increase in salary
1.00 % increase
1.00 % decrease
Rate of increase in employee turnover
1.00 % increase
1.00 % decrease
VI Maturity profile of defined benefit obligation
Year
Year 1
Year 2
Year 3
Year 4
Year 5
Sum of Years 6-10
As at
31 March 2019
As at
31 March 2018
547
(25)
28
22
(21)
(4)
4
539
(56)
68
45
(40)
(7)
8
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
121
55
54
62
49
504
62
27
19
19
37
146
VII
Interest rate risk : A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring
higher provision.
VIII Salary Risk : the present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an
increase in the salary of the members more than assumed level will increase the plan's liability.
IX Asset Liability Matching Risk : the plan faces the AlM risk as to the matching cash flow. Company has to manage pay-out based on
pay as you go basis from own funds.
X Mortality risk : Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any
longevity risk.
b) Compensated absences
the Company incurred ` 118 lakhs (31 March 2018 ` 36 lakhs) towards accrual for compensated absences during the year.
c) Provident fund
the Company contributed ` 172 lakhs (31 March 2018 ` 198 lakhs) to the provident fund plan, ` 6 lakhs (31 March 2018 ` 8 lakhs) to the
employee state insurance plan and ` 5 lakhs (31 March 2018 ` 11 lakhs) to the national pension Scheme during the year.
132 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
41 Share Based Compensation
the Company has instituted employees’ Stock option plan “eSop 2009” and "eSoS 2017" under which the stock options have been granted
to employees. the scheme was approved by the shareholders at the extra ordinary General Meeting held on 17 December 2009 and Annual
General Meeting held on 29 September 2017 respectively. the details of activity under the eSop 2009 scheme are summarized below:
The expense recognized for employee services received during the year is shown in the following table:
Amount ` in lakhs
expense arising from equity-settled share-based payment transactions
there were no cancellations or modifications to the awards in 31 March 2019 and 31 March 2018
Movements during the year
the following table illustrates the number and weighted average exercise prices (WAep) of, and
movements in, share options during the year:
Year ended
31 March 2019
Year ended
31 March 2018
799
1013
outstanding at 1 April
Granted during the year
Forfeited during the year
exercised during the year
outstanding at 31 March
exercisable at 31 March
As at 31 March 2019
As at 31 March 2018
Number
WAEP*
Number
WAEP*
1,624,034
-
(329,886)
(536,263)
757,885
289,002
29
-
52
10
32
68
2,108,063
863,320
(234,189)
(1,113,160)
1,624,034
501,122
36
10
10
32
29
71
Range of exercise price of outstanding options (`)
Weighted average remaining contractual life of option
` 10-150
2.96 Years
` 10-175
2.96 Years
Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:
Particulars
17-Dec-09 12-Aug-10 1-Jul-12 14-Oct-13 12-Nov-14 12-Feb-15 9-Feb-16 10-Feb-17 14-Nov-17 10-Feb-18
Dividend yield (%)
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
expected volatility
75.00% 60.00% 44.00% 35.00% 40.11% 37.84% 46.46% 48.66% 56.53% 53.15%
Risk free interest rate
6.30%
6.50%
8.36%
8.57%
8.50%
7.74%
7.49%
6.51%
6.90%
7.38%
Date of grant
exercise price
75-175
75-135
expected life of options
granted in years
Table 1.1
5.25
5.25
Expected life of options granted in years
75
5.50
150
4.50
10
10
10
As per table 1.1
10
4.27
10
3.50
10
4.50
Option Grant date
9-Feb-16
12-Feb-15
12-Nov-14
Year I
Year II
Year III
Old
Employees
New
Employees
Old
Employees
New
Employees
Old
Employees
New
Employees
3.50
4.50
5.50
4.50
5.50
6.50
3.00
3.50
4.00
3.00
4.00
4.50
3.50
4.50
5.50
4.50
5.50
6.50
the expected life of options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may
occur. the expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future
trends, which may differ from the actual.
EROS INTERNATIONAL MEDIA LIMITED 133
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
42 Segment Reporting
Description of segment and principal activities
the Company acquires, co-produces and distributes Indian films in multiple formats worldwide. Film content is monitored and strategic decisions
around the business operations are made based on the film content, whether it is new release or library. Hence, Management identifies only
one operating segment in the business, film content. the Company distributes film content to the Indian population in India and worldwide and
to non-Indian consumers who view Indian films that are subtitled or dubbed in local languages. As a result of these distribution activities, the
management examines the performance of the business from a geographical market perspective.
Revenue by region of domicile of customer's location
India
united Arab emirates
Rest of the world
Total revenue
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
67,164
27,817
8,149
103,130
61,824
16,382
17,809
96,016
Non-current assets other than financial instruments, investments accounted for using equity method and deferred tax
Amount ` in lakhs
Non-current assets
India
united Arab emirates
Rest of the world
Total non-current assets
43 Related party disclosures
Parent entity
Relationship
ultimate holding company
Holding company
As at
31 March 2019
As at
31 March 2018
225,740
19,375
25,694
270,809
226,721
28,991
18,492
274,204
Name
Eros International PLC
Eros Worldwide FZ LLC
List of Key management personnel (KMP)
Mr. Sunil lulla – executive Vice Chairman & Managing Director
Mr. Kishore lulla – executive Director
Ms. Jyoti Deshpande – executive Director (upto 31 March 2018)
Mr. Dinesh Modi -Group Chief Financial officer (India) (upto 8 March 2018)
Mr. Farokh Gandhi - Chief Financial officer (India) (w.e.f. 9 March 2018)
Ms. Dimple Mehta - Vice president Company Secretary and Compliance officer (upto 14 December 2017)
Mr. Abhishekh Kanoi - Vice president Company Secretary and Compliance officer (w.e.f. 15 December 2017)
Relatives of KMP with whom transactions exist
Mrs. Manjula K lulla (wife of Mr. Kishore Arjan lulla)
Mrs. Krishika lulla (wife of Mr. Sunil Arjan lulla)
Entities over which KMP exercise significant influence
Shivam enterprises
eros television India private limited
M/s eros International Distribution llp
Fellow subsidiary company
eros Digital private limited
eros International limited, united Kingdom
eros Digital FZ llC
eros Films limited, Isle of Man
134 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
c)
Transactions with related parties
Sale of film rights
eros Worldwide FZ llC
Revenue attributable to Eros Digital FZ LLC
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
17,897
17,897
(9,727)
10,592
10,592
(10,449)
2
2
337
9,349
9,686
Sale of prints/VCD/DVD
eros Worldwide FZ llC
Total
Re-imbursement of administrative expense
eros Worldwide FZ llC
eros Digital FZ llC
Total
Rent expenses
Mr. Sunil lulla
Mrs. Manjula K lulla
Mr. Kishore lulla
Total
Interest income
eros International limited
eros Digital FZ llC
Total
Interest expenses
eros Digital private limited
eros television India private limited
Total
Salary, commission and perquisites* to KMPs Total
* perquisites to KMp have been valued as per Income tax Act, 1961 and rules framed thereunder or at actuals as the case may be.
* excludes ` 9 lakhs (31 March 2018 : ` 72 lakhs) charged to Statement of profit and loss on account of stock compensation for awards granted.
54
-
54
826
384
348
36
768
-
8
8
6
6
609
7,222
7,831
276
240
36
552
645
-
645
49
482
531
1,657
d)
Transactions with related parties
Content advances given
eros International limited
Total
Refund of content advances
eros International limited
Total
Trade advances/ loans given
eros television India private limited
eros Worldwide FZ llC
eros Films limited
Total
Recovery of trade advances/ loans given
eros television India private limited
eros International limited
eros Worldwide FZ llC
eros Films limited
Total
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
-
-
-
-
-
35,307
13,937
49,244
-
281
3,912
13,937
18,130
11,180
11,180
18,709
18,709
65
10,123
-
10,188
62
-
-
-
62
EROS INTERNATIONAL MEDIA LIMITED 135
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
Trade advances/ loans taken
eros Worldwide FZ llC
eros International limited
eros Digital private limited
eros television India private limited
Total
Repayment of advances/ loans
eros Worldwide FZ llC
eros International limited
eros Digital private limited
eros television India private limited
Total
Refund of deposits
Mr. Sunil lulla
Total
Balances with related parties
Trade balances due from
eros Worldwide FZ llC
eros Digital FZ llC
eros International limited
Total
Trade balances due to
eros Worldwide FZ llC
eros International limited
eros Digital FZ llC
Total
Advances/Loan due to
eros Worldwide FZ llC
eros Digital private limited
eros International limited
Loans and advances due from
eros Worldwide FZ llC
Shivam enterprises
eros television India private limited
eros Digital FZ llC
eros International limited
Total
Security Deposits/Amounts due from KMPs or their relatives
Mr. Sunil lulla
Mr. Kishore lulla
Mrs. Manjula lulla
Mrs. Krishika lulla
Total
Amounts due to KMPs or their relatives
Mr. Sunil lulla
Mr. Kishore lulla
Mrs. Manjula lulla
Total
2 (a) Terms and conditions
All outstanding balances are unsecured and repayable in cash.
136 AnnuAl RepoRt 2018-19
Year ended
31 March 2019
Year ended
31 March 2018
10,596
1,112
75
-
11,783
-
1,102
81
-
1,183
35
35
3,257
354
-
610
4,221
18,416
354
23
5,254
24,047
33
33
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
11,701
5,989
-
17,690
9,340
108
10,713
20,161
14,049
528
10
14,587
42,983
57
4
373
51
43,468
267
240
75
0
582
39
149
64
252
6,595
2,453
88
9,136
13,303
102
7,244
20,649
3,452
480
-
3,932
10,123
57
3
-
332
10,515
302
240
75
-
617
117
115
42
274
Notes
to the consolidated financial statements and other explanatory information
44
Categories of financial assets and financial liabilities
the carrying value and fair value of financial instruments by categories are as follows:
Amount ` in lakhs
Particulars
Financial assets
Measured at fair value through profit and loss
Investments
Measured at amortised cost
loans
Restricted bank deposits
other financial assets
trade receivables
Cash and cash equivalents
Financial liabilities
Measured at fair value through profit and loss
Forward contract liabilities
Total
Measured at amortised cost
Borrowings
Acceptance
trade payables
other financial liabilities
45 Fair value measurement of financial instruments
Carrying value /Fair value
As at
31 March 2019
As at
31 March 2018
0
0
46,311
6,505
1,793
79,352
14,111
0
0
13,029
4,492
1,091
69,857
14,230
148,072
102,699
430
430
53,992
5,796
31,178
7,235
98,201
-
-
61,760
5,796
32,429
9,066
109,051
Financial assets and financial liabilities measured at fair value in the balance sheet are grouped into three levels of a fair value hierarchy. the three levels
are defined based in the observability of significant inputs to the measurement, as follows:
level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly
level 3: unobservable inputs for the asset or liability
the following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis:
Particulars
Financial assets
Measured at fair value through Statement of
Profit and Loss
Investments
Total
Particulars
Carrying value /Fair value
Level 1
Level 2
Level 3
Amount ` in lakhs
As at
31 March 2019
0
0
0
0
-
-
-
-
As at
31 March 2019
Carrying value /Fair value
Level 1
Level 2
Level 3
Measured at fair value through profit and loss
Forward contract liabilities
Total
430
430
-
-
430
430
-
-
EROS INTERNATIONAL MEDIA LIMITED 137
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
the following table shows the financial assets and liabilities measured at amortised cost on a recurring basis:
Amount ` in lakhs
Particulars
Carrying value /Fair value
As at
31 March 2018
Level 1
Level 2
Level 3
Measured at amortised cost
Financial assets
loans
Restricted deposits
other financial assets
trade receivables
Cash and cash equivalents
Measured at amortised cost
Financial liabilities
Borrowings- non-current
Borrowings- Current
Acceptance
trade payables
other financial liabilities
Total
46,311
6,505
1,793
79,352
14,111
148,072
8,724
45,268
5,796
31,178
7,235
98,201
-
-
-
-
-
-
-
-
-
-
-
-
-
-
795
-
-
795
8,724
-
-
-
-
8,724
-
-
-
-
-
-
-
-
-
-
-
-
-
During the year ended 31 March 2019 there was no transfer between level 2 and level 3 fair value hierarchy.
Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities and short term borrowings
carried at amortised cost is not materially different from its carrying cost largely due to short term maturities of these financial assets and liabilities.
Fair value of the borrowing items fall within level 2 of the fair value hierarchy and is calculated on the basis of discounted future cash flows.
non-listed shares and other securities fall within level 3 of the fair value hierarchy. Valuation is based on the net asset method.
Financial instruments with fixed and variable interest rate fall within level 2 of the fair value hierarchy and are evaluated by Company based on parameters
such as interest rate, credit rating or assessed credit worthiness.
Particulars
Financial assets
Measured at fair value through Statement of
Profit and Loss
Investments
Total
Carrying value /Fair value
Level 1
Level 2
Level 3
Amount ` in lakhs
As at
31 March 2018
0
0
0
0
-
-
-
-
138 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
the following table shows the financial assets and liabilities measured at amortised cost on a recurring basis:
Amount ` in lakhs
Particulars
Carrying value /Fair value
As at
31 March 2018
Level 1
Level 2
Level 3
Measured at amortised cost
Financial assets
loans
Restricted deposits
other financial assets
trade receivables
Cash and cash equivalents
Measured at amortised cost
Financial liabilities
Borrowings- non-current
Borrowings- Current
Acceptance
trade payables
other financial liabilities
Total
13,029
4,492
1,091
69,857
14,230
102,699
14,952
46,808
5,796
32,429
9,066
109,051
-
-
-
-
-
-
-
-
-
-
-
-
-
789
-
-
-
789
14,952
-
-
-
-
14,952
-
-
-
-
-
-
-
-
-
-
-
-
-
During the year ended 31 March 2018 there was no transfer between level 2 and level 3 fair value hierarchy.
Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities and short term borrowings
carried at amortised cost is not materially different from its carrying cost largely due to short term maturities of these financial assets and liabilities
46 Financial instruments and Risk management
the Company is exposed to various risks in relation to financial instruments. the Company’s financial assets and liabilities by category are
summarised in note. the main types of risks are market risk, credit risk and liquidity risk.
the Company’s risk management is coordinated in close cooperation with the board of directors and audit committee meetings.
the Company has established objectives concerning the holding and use of financial instruments. the underlying basis of these objectives is to
manage the financial risks faced by the Company.
Management of Capital Risk and Financial Risk
the Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to shareholders
through the optimization of the debt and equity balance. the Company monitors capital using a gearing ratio, which is net debt divided by total
capital. For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the
equity shareholders of the Company. net debt is calculated as borrowing (refer note 18,23 and 26) less cash and cash equivalents.
the gearing ratio at the end of the reporting period was as follows:
Debt
less: Cash and cash equivalents
Net debt
equity
Net debt to equity
Amount ` in lakhs
As at
31 March 2019
As at
31 March 2018
64,988
(14,111)
50,877
258,239
19.70%
74,773
(14,230)
60,543
225,588
26.84%
EROS INTERNATIONAL MEDIA LIMITED 139
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
Financial risk management objectives
Based on the operations of the Company , Management considers that key financial risks that it faces are credit risk, currency risk, liquidity risk
and interest rate risk. the objectives under each of these risks are as follows:
• credit risk: minimize the risk of default and concentration.
• currency risk: reduce exposure to foreign exchange movements principally between INR and USD.
• liquidity risk: ensure adequate funding to support working capital and future capital expenditure requirements.
• interest rate risk: mitigate risk of significant change in market rates on the cash flow of issued variable rate debt.
Credit Risk
the Company’s credit risk is principally attributable to its trade receivables, loans and bank balances. As a number of the Company’s trading
activities require third parties to report revenues due to the Company this risk is not limited to the initial agreed sale or advance amounts. the
amounts shown within the Balance Sheet in respect of trade receivables and loans are net of allowances for doubtful debts based upon objective
evidence that the Company will not be able to collect all amounts due.
Ageing of Receivables
not due
overdue less than 90 days
overdue more than 90 days less than 180 days
overdue more than 181 less than 270 days
overdue more than 271 less than360 days
overdue more than 360 days
Closing balance
Expected credit loss
opening balance
provision made during the year
Reversal of provision during the year
Foreign currency translation rev erserve
Closing balance
Amount in ` lakhs
As at
31 March 2019
As at
31 March 2018
50,758
10,939
5,403
6,455
2,346
3,451
39,336
14,023
9,414
780
1,778
4,526
79,352
69,857
Amount in ` lakhs
As at
31 March 2019
As at
31 March 2018
5,188
12,184
(6,631)
266
11,007
6,008
3,662
(4,499)
17
5,188
trading credit risk is managed on a customer by customer basis by the use of credit checks on new clients and individual credit limits, where
appropriate, together with regular updates on any changes in the trading partner’s situation. In a number of cases trading partners will be required
to make advance payments or minimum guarantee payments before delivery of any goods. the Company reviews reports received from third
parties and in certain cases as a matter of course reserve the right within the contracts it enters into to request an independent third party audit
of the revenue reporting.
the credit risk on bank balances is limited because the counterparties are banks with high credit ratings as signed by international credit
rating agencies.
the Company from time to time will have significant concentration of credit risk in relation to individual theatrical releases, television syndication
deals or digital licenses. this risk is mitigated by contractual terms which seek to stagger receipts and/or the release or airing of content.
31 March 2019 38% (31 March 2018: 37%) of trade account receivables were represented by the top 5 customer, out of which as at
31 March 2019 21% (31 March 2018: 9%) of trade account receivables were represented by the related parties. the maximum exposure to credit
risk is that shown within the statement of financial position.
140 AnnuAl RepoRt 2018-19
Notes
to the consolidated financial statements and other explanatory information
Currency Risk
the Company is exposed to foreign exchange risk from foreign currency transactions. As a result it faces both translation and transaction
currency risks which are principally mitigated by matching foreign currency revenues and costs wherever possible.
the Company has identified that it will need to utilize hedge transactions to mitigate any risks in movements between the uS Dollar and the Indian
Rupee and has adopted an agreed set of principles that will be used when entering into any such transactions. no such transactions have been
entered into to date and the Company has managed foreign currency exposure to date by seeking to match foreign currency inflows and outflows
as much as possible such as packing credit repayment in uSD is matched with remittances from uAe in uSD. Details of the foreign currency
borrowings that the Company uses to mitigate risk are shown within Interest Risk disclosures.
the Company adopts a policy of borrowing where appropriate in the local currency as a hedge against translation risk. the table below shows the
Company’s net foreign currency monetary assets and liabilities position in the main foreign currencies, translated to Indian Rupees (`) equivalents,
as at the year end:
As at 31 March 2019
As at 31 March 2018
*amount represents less than one lakh
Amount in lakhs
Net balance receivables / (payables)
INR
(179)
1,363
USD
SGD*
GBP
EUR
(3)
26
0
0
-
(3)
-
-
the above foreign currency arises when the Company holds monetary assets and liabilities denominated in a currency other than `.
A uniform decrease of 10% in exchange rates against all foreign currencies in position as of 31 March 2019 would have increased in the
Company’s net profit before tax by approximately ` 2 lakhs (2018: loss of ` 136 lakhs). An equal and opposite impact would be experienced in
the event of an increase by a similar percentage
Liquidity risk
the Company manages liquidity risk by maintaining adequate reserves and agreed committed banking facilities. Management of working capital
takes account of film release dates and payment terms agreed with customers.
A maturity analysis for financial liabilities is provided below. the amounts disclosed are based on contractual undiscounted cash flows. the table
includes both interest and principal cash flows. to the extent that interest flows are floating rate, the undiscounted amount is derived from interest
rates as at 31 March, in each year.
As at 31 March 2019
Borrowing principal payments
Borrowing interest payments
Acceptance
trade and other payables
As at 31 March 2018
Borrowing principal payments
Borrowing interest payments
Acceptance
trade and other payables
Total
Less than 1
year
1-3 years
3-5 years More than 5
years
Amount ` in lakhs
59,263
7,199
5,796
31,203
50,468
5,987
5,796
31,095
8,195
1,194
-
108
600
18
-
-
-
-
-
-
Total
Less than 1
year
1-3 years
3-5 years More than 5
years
Amount ` in lakhs
69,173
9,917
5,796
32,429
53,899
7,225
5,796
32,327
11,939
2,418
-
102
3,335
274
-
-
-
-
-
-
At 31 March 2019, the Company had facilities available of ` 64,731 lakhs (31 March 2018: ` 74,780 lakhs) and had net undrawn amounts of
` 201 lakhs ( 31 March 2018: ` 414 lakhs) available.
Interest rate risk
the Company is exposed to interest rate risk as the Company has borrowed funds at floating interest rates. the risk is managed as the loans are
at flowting interest rates which is aligned to the market.
A uniform increase of 100 basis in interest rates against all borrowings in position as of 31 March 2019 would have decreased in the Company’s
net profit before tax by approximately ` 453 lakhs (31 March 2018: net profit before tax of ` 317 lakhs). An equal and opposite impact would be
experienced in the event of a decrease by a similar basis.
EROS INTERNATIONAL MEDIA LIMITED 141
Corporate overview | ManageMent report | financial management
Notes
to the consolidated financial statements and other explanatory information
47 a. Enterprises Consolidated as Subsidiary in accordance with Indian Accounting Standard 110- Consolidated Financial Statements
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
Name of enterprises
eros International Films private limited
Big Screen entertainment private limited
eyeQube Studios private limited
eM publishing private limited
eros Animation private limited
Copsale limited
Digicine pte limited
Colour Yellow productions private limited
universal power Systems private limited
eros International Distribution llp
Reliance eros production llp
Country of
incorporation
Proportion of
ownership interest
India
India
India
India
India
British Virigin Island
Singapore
India
India
India
India
100%
64%
100%
100%
100%
100%
100%
50%
100%
100%
50%
47 b. Additional information, as required under Schedule III to the Companies Act, 2013, of enterprises consolidated as Subsidiary/
Associates/Joint Ventures
Name of Enterprises
Net Assets, i.e., total
assets minus total
liabilities
Share in profit or loss
Share in other
comprehensive income
Share in total
comprehensive income
` in lakhs
As % of
consolidated
net assets
As % of
consolidated
profit or loss
` in lakhs
` in lakhs
As % of
consolidated
other
comprehensive
income
As % of
consolidated
total
comprehensive
income
` in lakhs
Parent
eros International Media limited
59.6% 153,843
32.8%
8,734
1%
40
27.6%
8,774
Subsidiaries
Indian
eros International Films
private limited
Big Screen entertainment
private limited
eyeQube Studios private limited
eM publishing private limited
eros Animation private limited
Colour Yellow productions
private limited
universal power Systems
private limited
0.8%
2,049
1.3%
341
0.0%
78
0.0%
0.0%
0.0%
0.0%
0.7%
40
(18)
(2)
0.0%
0.0%
0.0%
1,870
-2.0%
(520)
0.1%
186
-0.9%
(229)
(1)
1
2
(1)
eros International Distribution llp
-
-
-
-
-
-
-
-
-
-
0%
-
-
-
-
-
-
-
4
-
Foreign
Digicine pte limited
Copsale limited
0.2%
594
4.9%
1,304
38.7% 100,031
62.8% 16,748
0%
99%
19
5,075
Non controlling interests
0.4%
1,028
-1.0%
(260)
142 AnnuAl RepoRt 2018-19
1.1%
341
0.0%
0.0%
0.0%
0.0%
(1)
1
2
(1)
-1.6%
(520)
-0.7%
(225)
-
-
4.2%
1,325
68.7% 21,822
-0.8%
(260)
Notes
to the consolidated financial statements and other explanatory information
48 Auditors' remuneration
As auditor
Statutory audit
limited review
tax audit
In other capacity
other services (certification fees)
Reimbursement of expenses
Total
Amount ` in lakhs
Year ended
31 March 2019
Year ended
31 March 2018
96
15
9
120
2
2
-
122
97
25
10
132
15
15
10
157
49 Based on the information available with the Company, there are no dues payable as at the year end to micro, small and medium enterprises as
defined in the Micro, Small & Medium enterprises Development Act, 2006. this information has been relied upon by the statutory auditors of
the Company.
50 Post reporting date events
no adjusting or significant non-adjusting events have occurred between 31 March 2019 and the date of authorisation of these consolidated
financial statements
51 Authorisation of financial statements
the financial statement for the year ended 31 March 2019 (including comparatives) were approved by the board of directors on 23 May 2019.
As per our report of even date
For Chaturvedi & Shah LLP
Chartered Accountants
Firm Registration no.: 101720W/W100355
Amit Chaturvedi
partner
Membership no: 103141
place: Mumbai
Date : 23 May 2019
For and on behalf of Board of Directors
Sunil Arjan Lulla
executive Vice Chairman &
Managing Director
(DIn: 00243191)
Sunil Srivastav
non executive Independent
Director
(DIn: 00237561)
Subramaniam Lakshminarayanan
non executive Independent
Director
(DIn: 07972480)
Farokh P. Gandhi
Chief Financial officer
place: Mumbai
Date : 23 May 2019
Abhishekh Kanoi
Vice president - Company Secretary
and Compliance officer
EROS INTERNATIONAL MEDIA LIMITED 143
Corporate overview | ManageMent report | financial management
NOTICE OF THE 25TH ANNUAL GENERAL MEETING
Regd. Office: 201, Kailash plaza, opp. laxmi Industrial estate, off. Andheri link Road, Andheri West, Mumbai 400 053, Maharashtra (India).
Corporate Office: 901/ 902, Supreme Chambers, off. Veera Desai Road, Andheri West, Mumbai 400 053, Maharashtra (India).
phone: +91 22 66021500 | Fax: +91 22 66021540 | email: compliance.officer@erosintl.com | Website: www.erosplc.com
CIN: l99999MH1994plC080502
4. Material Related Party Transactions with Colour Yellow
Productions Private Limited
to consider and if thought fit, to pass with or without modification(s),
the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 188
and any other applicable provisions of the Companies Act,
2013 and applicable Rules made thereto (including any statutory
modification(s) or re-enactment thereof for the time being in force)
and Regulation 23 of SeBI (listing obligations and Disclosure
Requirements) Regulations, 2015 as amended from time to time and
applicable provisions of the Foreign exchange Management Act;
1999 and rules, regulations and guidelines made there under, and
subject to such approvals, consents, sanctions and permissions
as may be necessary from appropriate authorities, consent of the
Members of the Company be and is hereby accorded to the Board
of Directors of the Company (hereinafter referred to as the “Board”,
which term shall include any Committee constituted by the Board
of Directors of the Company or any person(s) authorized by the
Board to exercise the powers conferred on the Board of Directors
of the Company by this Resolution) to enter into material contracts/
arrangements/ transactions in the normal course of business and at
arm’s length basis with Colour Yellow productions private limited,
a subsidiary company and a Related party under Section 2(76) of
the Companies Act, 2013 for production of cinematograph films
(in Hindi and other regional and foreign languages) and original
television and digital programmes for an estimated amount of
` 300 crores in each financial year on such terms and conditions
as may be determined by the Board of Directors from time to time.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and are hereby authorized to decide upon the
nature and the value of transactions to be entered into with
Colour Yellow productions private limited for production of
cinematograph films (in Hindi and other regional and foreign
languages) and original television and digital programmes within
the maximum aforesaid limits.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and are hereby authorized to alter/vary the terms and
conditions entered by the Company with Colour Yellow productions
private limited for such period as may be determined by the Board
from time to time.
RESOLVED FURTHER THAT the Board of Directors of the
Company be and are hereby authorized to sign and execute all
such deeds, applications, documents and writings that may be
required, on behalf of the Company and generally to do all such
acts, matters and things that may be necessary, proper, expedient
or incidental thereto for the purpose of giving effect to the
aforesaid resolutions.”
By order of the Board of Directors
For Eros International Media Limited
Abhishekh Kanoi
Vice president- Company Secretary
and Compliance officer
Membership no. – FCS-9530
place: Mumbai
Date : 23 May 2019
NOTICE is hereby given that the 25th Annual General Meeting (AGM)
of the Members of eros International Media limited will be held on
Wednesday, the 25th day of September, 2019 at “the Classic Club”,
new link Road, Behind Infinity Mall, Andheri West, Mumbai – 400 053,
Maharashtra (India) at 2:00 p.M., to transact the following business:
ORDINARY BUSINESS:
1.
To receive, consider and adopt:
a.
b.
the Audited Financial Statements of the Company for the
financial year ended 31 March 2019, together with the
Report of the Directors’ and Auditors thereon; and
the Audited Consolidated Financial Statements of the
Company for the financial year ended 31 March 2019,
together with the Report of the Auditors thereon.
2.
To appoint a Director in place of Mr. Kishore Arjan Lulla
(DIN: 02303295), who retires by rotation, and being eligible,
offers himself for re-appointment.
SPECIAL BUSINESS:
3. Re-appointment of Mr. Dhirendra Swarup (DIN: 02878434) as
an Independent Director of the Company.
to consider and if thought fit, to pass with or without modification(s),
the following resolution as a Special Resolution:
to
the
pursuant
provisions
02878434),
“RESOLVED THAT
of
Sections 149, 150 and 152 and other applicable provisions, if
any, of the Companies Act, 2013 (“the Act”) and the Companies
(Appointment and Qualification of Directors) Rules, 2014 (including
any statutory modification(s) or re-enactment thereof for the time
being in force) and the applicable provisions of the Securities
and exchange Board of India (listing obligations and Disclosure
Requirements) Regulations, 2015 (“SeBI listing Regulations”),
Mr. Dhirendra Swarup
Independent
(DIn:
Director of the Company whose period of office would expire on
25 September 2019, on completion of the first Five (5) consecutive
years of appointment within the meaning of Section 149(10)
of the Act, who has submitted a declaration that he meets the
criteria of independence as provided in Section 149(6) of the Act
and Regulation 16 of the SeBI listing Regulations, as amended
from time to time and who is eligible for re-appointment for a
second term, be and is hereby re-appointed as an Independent
Director of the Company to hold office for a second term of
Five (5) consecutive years from the conclusion of this Annual
General Meeting to the conclusion of the Annual General Meeting
of the Company to be held in the Calendar Year 2024 and whose
office shall not be liable to retire by rotation.
RESOLVED FURTHER THAT pursuant to Regulation 17(1A) of
SeBI listing Regulations and other applicable provisions, if any,
of the Act and the applicable Rules framed thereunder, consent
of Members be and is hereby accorded to Mr. Dhirendra Swarup
(DIn: 02878434) Director of the Company, to continue to hold office
of an Independent Director of the Company not with standing that
Mr. Dhirendra Swarup will be attaining the age of Seventy Five (75)
years on 5 December 2019.
RESOLVED FURTHER THAT any Director and/or the Company
Secretary of the Company be and is hereby authorised to do
all acts, deeds and things including filings with the appropriate
authorities and take steps as may be deemed necessary,
proper or expedient to give effect to this Resolution and matters
incidental thereto.”
144 AnnuAl RepoRt 2018-19
Notice
NOTES
1.
2.
the explanatory Statement pursuant to Section 102 of the
Companies Act, 2013 (“the Act”) in respect of the special
business set out at Item nos. 3 and 4 of this notice is annexed
as Annexure-I. the relevant details as required under
Regulation 36 of the Securities and exchange Board of India
(listing obligations and Disclosure Requirements) Regulations,
2015 (“SeBI listing Regulations”) and Secretarial Standard-2
(SS-2), of person seeking appointment/re-appointment/fixation
of remuneration of Director under Item nos. 2 and 3 of this
notice are annexed as Annexure II.
the requirement to place the matter relating to appointment
of Auditors for ratification by members at every AGM is done
away vide notification dated 7 May 2018 issued by the Ministry
of Corporate Affairs. Accordingly, no resolution is proposed for
ratification of appointment of Auditors, who were appointed
for the period of Five (5) years in the 23rd AGM held on
28 September 2017.
3. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE AGM
IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE
INSTEAD OF HIMSELF/HERSELF AND SUCH PROXY NEED
NOT BE A MEMBER OF THE COMPANY. A person shall not
act as proxy for more than Fifty (50) members and holding in
the aggregate not more than ten (10) percent of the total share
capital of the Company carrying voting rights. A person holding
more than ten (10) percent of the total share capital of the
Company carrying voting rights may appoint a single person as a
proxy and such person shall not act as proxy for any other person
or shareholder. proxies submitted on behalf of limited companies,
societies etc., must be supported by appropriate resolutions /
authority, as applicable.
4.
the instrument appointing the proxy (as per the format provided
with), in order to be effective, should be duly stamped, completed
and signed and deposited at the Corporate office of the Company
not less than Forty eight (48) hours before the commencement of
the Meeting.
5. MeMBeR/pRoXY SHoulD BRInG tHe AttenDAnCe SlIp
Sent HeReWItH, DulY FIlleD In, FoR AttenDInG tHe
MeetInG.
6. Corporate Members
intending
to send
their Authorized
Representatives to attend the Meeting pursuant to Section 113 of
the Act are requested to send a certified copy of the relevant Board
Resolution together with their respective specimen signatures
authorizing their representatives to attend and vote on their behalf
at the Meeting.
7.
the Register of Members and Share transfer Books of the
Company will remain closed from Wednesday, 18 September 2019
till Wednesday, 25 September 2019 (both days inclusive).
8. Members holding shares in electronic form are requested
to intimate immediately any change in their address or bank
mandates to their Depository participants with whom they are
maintaining their demat accounts. Members holding shares in
physical form are requested to advise any change of address
immediately to the Company/Registrar and transfer Agent, link
Intime India private limited.
9. Members must quote their Folio no./Demat Account no. and
contact details such as e-mail address, contact no. etc. in all their
correspondence with the Company/Registrar and transfer Agent.
10. the Securities and exchange Board of India (SeBI) has mandated the
submission of permanent Account number (pAn) by every participant
in securities market. Members holding shares in electronic form are,
therefore, requested to submit pAn to their Depository participants
with whom they are maintaining their demat accounts. Members
holding shares in physical form can submit their pAn details to the
Company/Registrar and transfer Agent.
11. Relevant documents referred to in this notice and the explanatory
Statement pursuant to Section 102 of the Act shall be open for
inspection at the Corporate office of the Company during business
hours on all days except Saturdays, Sundays and public Holidays
between 11:00 A.M. to 1:00 p.M. up to the date of the AGM. the
Register of Directors and Key Managerial personnel and their
shareholding maintained under Section 170 of the Act and the
Register of Contracts and Arrangements in which the Directors
are interested, maintained under Section 189 of the Act will be
available for inspection by the Members at the AGM.
12. every Member entitled to vote at the AGM of the Company can
inspect the proxies lodged at the Company at any time during
the business hours of the Company during the period beginning
twenty-Four (24) hours before the time fixed for the commencement
of the AGM. However, a prior notice of not less than three (3) days
in writing of the intentions to inspect the proxies lodged shall be
required to be provided to the Company.
13. the Company has designated an exclusive email
ID
compliance.officer@erosintl.com for redressal of shareholders
complaints/grievances. For any investor related queries, you are
requested to please write to us at the above email ID.
14. Members who are yet to encash their earlier dividend warrants for the
interim dividend in FY 2012-13 are requested to contact the office
of the Company Secretary & Compliance officer/link Intime India
private limited, Registrar and transfer Agent (RtA) of the Company
for revalidation of the dividend warrants/issue of fresh demand drafts.
the Company has uploaded the details of unpaid and unclaimed
amounts lying with the Company as on 27 September 2018 (date of
the last AGM) on the website of the Company at www.erosplc.com
and also on the website of the Ministry of Corporate Affairs.
15. Members are requested to bring their Attendance Slip alongwith
copy of the Annual Report to the AGM.
16. Members who wish to obtain any information on the Company
or view the financial statements for the financial year ended
31 March 2019 may visit
the Company’s website at
www.erosplc.com or send their queries to the Company Secretary
at the Corporate office of the Company atleast ten (10) days
before the AGM.
17.
In terms of the applicable provisions of the Act and Rules thereto,
the Company has obtained email addresses of its Members and
have given an advance opportunity to every Member to register
their email address and changes therein from time to time with
the Company for service of communications/documents (including
notice of General Meetings, Audited Financial Statements,
Directors’ Report, Auditors’ Report and all other documents)
through electronic mode.
18.
In case of joint holders attending the AGM, the Member whose
name appears as the first holder in the order of names as per the
Register of Members of the Company will be entitled to vote.
Although, the Company has given opportunity for registration of email
addresses and has already obtained email addresses from some of its
Members, the Company once again requests its Members, who have
so far not registered, to register their e-mail address(es) and changes
therein from time to time, through any of the following manner:
i.
Email Intimation: By sending an email mentioning the
name(s) and Folio number/Client ID and Dp ID to the
Registrar and transfer Agent at rnt.helpdesk@linkintime.co.in
or to the Company at compliance.officer@erosintl.com
ii. Written Communication:
By
sending written
communication addressed to the Company Secretary
and Compliance officer at the Corporate office of the
Company or to the Registrar and transfer Agent of the
Company at link Intime India private limited, unit – eros
International Media limited, C-101, 247 park, l.B.S Marg,
Vikhroli (West), Mumbai 400 083.
EROS INTERNATIONAL MEDIA LIMITED 145
Notice
19. Details as stipulated under SeBI listing Regulations and Secretarial
Standards on General Meeting (SS-2), in respect of the Directors
seeking appointment/re-appointment at the AGM, forms integral part
of the notice. the Director have furnished the requisite declarations for
his re-appointment.
20. electronic copy of the notice convening the 25th AGM of the
Company, the Annual Report alongwith the process of e-voting and
the Attendance Slip, proxy Form are being sent to all the Members
whose email Ids are registered with the Company/Depository
participants for communication purposes unless any member
has requested for a physical copy of the same. For Members who
have not registered their e-mail addresses, physical copies of the
notice convening the 25th AGM of the Company, the Annual Report
alongwith the process of e-voting and the Attendance Slip, proxy
Form are sent in the permitted mode.
21. Members may also note that the notice convening the
25th AGM and the Annual Report 2018-19 will also be available
on the Company’s website at www.erosplc.com and on the
website of Central Depository Services (India) limited (CDSl)
at www.evotingindia.com for download. even after registering
for e-communication, members are entitled to receive such
communication in physical form, upon making a request for the
same, free of cost. For any communication, the Members may
also send request to compliance.officer@erosintl.com.
22. the Certificate from Statutory Auditors of the Company certifying
that the Company’s employee Stock options Schemes are being
implemented in accordance with the SeBI (Share Based employee
Benefits) Regulations, 2014, as amended, will be available for
inspection at the AGM.
pAn
23. the route map showing directions to reach the venue of the
25th AGM is annexed hereto.
A person who is not a Member as on the cutoff date
should treat this notice for information purpose only.
the e-voting module shall be disabled by CDSl for
voting thereafter.
ii. the Members should log on to the e-voting website
www.evotingindia.com.
iii. Click on Shareholders / Members tab
iv. now enter your user ID
a. For CDSl: 16 digits beneficiary ID,
b. For nSDl: 8 Character Dp ID followed by 8 Digits Client ID,
c. Members holding shares in physical Form should enter
Folio number registered with the Company.
v. next enter the Image Verification as displayed and Click
on login.
vi. If you are holding shares in demat form and had logged on to
www.evotingindia.com and voted on an earlier voting of any
company, then your existing password is to be used.
vii. If you are a first time user follow the steps given below:
For Members holding shares in Demat Form and
Physical Form
enter your 10 digit alpha-numeric pAn issued by
Income tax Department (Applicable for both demat
shareholders as well as physical shareholders)
• Members who have not updated their pAn with the
Company/Depository participant are requested to
use the sequence number which is printed on postal
Ballot / Attendance Slip indicated in the pAn field.
24. Securities of
in
listed companies would be
dematerialised form only w.e.f. 1 April 2019. In view of the same,
Members holding shares in physical form are requested to convert
their holdings to dematerialized form to eliminate all risks associated
with physical shares and for ease of portfolio management.
Members can contact the Company’s RtA for assistance in
this regard.
transferred
25. Voting
I. In compliance with provisions of Section 108 of the Act, read with
Rule 20 of the Companies (Management and Administration)
Rules, 2014 as amended by the Companies (Management
and Administration) Amendment Rules, 2015 and Regulation
44 of the SeBI listing Regulations, the Company is pleased to
provide its Members the facility to cast their votes either for or
against each resolutions set forth in the notice of the AGM using
electronic voting system from a place other than the venue of
the AGM (‘remote e-voting’), provided by Central Depository
Services (India) limited (“CDSl”) and the business may be
transacted through such voting.
II. Any person, who acquires shares of the Company and
becomes a Member of the Company after dispatch of
the notice of AGM and holds shares as of the cut-off
date i.e. Wednesday, 18 September 2019, may obtain
the
ID and password by sending a request at
helpdesk.evoting@cdslindia.com. However, if a Member is
already registered with CDSl for e-voting, then he/she can use
existing user id and password/pIn for casting the vote.
login
the instructions for e-voting are as follows:
i. the voting period begins on Saturday, 21 September 2019
(9:00 A.M.) and ends on tuesday, 24 September 2019
the
(5:00 p.M.). During
Company, holding shares either in physical form or in
dematerialized form, as on, Wednesday, 18 September
2019 i.e. cut off date may cast their vote electronically.
this period Members of
146 AnnuAl RepoRt 2018-19
Dividend
Bank
Details
OR
Date of
Birth (DoB)
enter the Dividend Bank Details or Date of Birth (in dd/
mm/yyyy format) as recorded in your demat account or
in the Company records in order to login.
• If both the details are not recorded with the
depository or Company, please enter the Member id
/ folio number in the Dividend Bank details field as
mentioned in instruction (iv).
viii. After entering these details appropriately, click on
“SuBMIt” tab.
ix. Members holding shares in physical form will then directly
reach the Company selection screen. However, Members
holding shares in demat form will now reach ‘password
Creation’ menu wherein they are required to mandatorily
enter their login password in the new password field.
Kindly note that this password is also to be used by
the demat holders for voting on resolutions of any other
company on which they are eligible to vote, provided
that Company opts for e-voting through CDSl platform.
It is strongly recommended not to share your password
with any other person and take utmost care to keep your
password confidential.
x.
For Members holding shares in physical form, the details
can be used only for e-voting on the resolutions contained
in this notice.
xi. Click on the eVSn for "eros International Media limited"
on which you choose to vote.
xii. on the voting page, you will see “ReSolutIon
DeSCRIptIon” and against the same the option “YeS/
no” for voting. Select the option YeS or no as desired.
the option YeS implies that you assent to the Resolution
and option no implies that you dissent to the Resolution.
xiii. Click on the “ReSolutIonS FIle lInK” if you wish to
view the entire Resolution details.
Notice
xiv. After selecting the resolution you have decided to vote on,
click on “SuBMIt”. A confirmation box will be displayed.
If you wish to confirm your vote, click on “oK”, else to
change your vote, click on “CAnCel” and accordingly
modify your vote.
VII. At the AGM, at the end of the discussion on the resolutions
on which voting is to be held, the Chairman shall, with the
assistance of the Scrutinizer, order voting through ballot paper
for all those Members who are present but have not cast their
votes electronically using remote e-voting facility.
xv. once you “ConFIRM” your vote on the resolution, you
will not be allowed to modify your vote.
xvi. You can also take a print of the votes cast by clicking on
“Click here to print” option on the Voting page.
xvii. If a demat account holder has forgotten the login password
then enter the user ID and the image verification code and
click on Forgot password & enter the details as prompted
by the system.
xviii. Members can also cast their vote using CDSl’s mobile
app m-Voting available for android based mobiles. the
m-Voting app can be downloaded from Google play
Store. Apple and Windows phone. please follow the
instructions as prompted by the mobile app while voting
on your mobile.
xix. note for non – Individual Members and Custodians
• Non-Individual Members (i.e. other than Individuals,
HuF, nRI etc.) and Custodian are required to log on
themselves
to www.evotingindia.com and register
as Corporates.
• A scanned copy of the Registration Form bearing the
stamp and sign of the entity should be emailed to
helpdesk.evoting@cdslindia.com.
• After receiving the login details a Compliance User
should be created using the admin login and password.
the Compliance user would be able to link the
account(s) for which they wish to vote on.
• The list of accounts linked in the login should be mailed
to helpdesk.evoting@cdslindia.com and on approval of
the accounts they would be able to cast their vote.
• A scanned copy of the Board Resolution and Power of
Attorney (poA) which they have issued in favour of the
Custodian, if any, should be uploaded in pDF format in
the system for the scrutinizer to verify the same.
VIII. the Scrutinizer shall immediately after the conclusion of
voting at the AGM, count the votes cast at the AGM and
thereafter unblock the votes cast through remote e-voting
in the presence of atleast two (2) witnesses not in the
employment of the Company. the Scrutinizer shall submit
a consolidated Scrutinizers Report of the total votes cast in
favour of or against, if any, and the results of the voting shall
be declared not later than Forty eight (48) hours from the
conclusion of the AGM of the Company. the Chairman, or
any other person authorised by the Chairman, shall declare
the result of voting forthwith.
the website of
IX. the Results declared alongwith the report of the Scrutinizer
shall be placed on
the Company at
www.erosplc.com and on the website of CDSl immediately after
the declaration of result by the Chairman or any person authorized
by him in writing and the same shall be communicated to BSe
limited and national Stock exchange of India limited. the result
will also be displayed on the notice Board of the Company at its
Corporate office and Registered office.
Notes and instructions for voting through Ballot Paper
i.
ii.
iii.
Members desiring to cast their vote in Ballot paper are requested
to execute the Ballot paper as per the instructions stated therein
and send the same in the enclosed self-addressed postage
prepaid envelope.
the vote can be cast by recording the assent in the Column FoR
and dissent in the Column AGAInSt by placing a tick mark (√) in
the appropriate column.
the Member may not use all the votes nor needs to cast all the
votes in the same way. Members have their sole discretion as
to voting.
iv. Members can download
the Ballot paper
link
www.erosplc.com or seek a duplicate Ballot paper from link Intime
India private limited, the Registrar and transfer Agent from their
office at C-101, 247 park, l.B.S Marg, Vikhroli (West), Mumbai
- 400 083, fill in the details and send the same to the Scrutinizer.
from
the
xx.
In case you have any queries or issues regarding e-voting,
you may refer the Frequently Asked Questions (“FAQs”)
and e-voting manual available at www.evotingindia.com,
under help section or write an email to helpdesk.evoting@
cdslindia.com.
III. the facility for voting through ballot paper shall be made
available at the AGM and the Members attending the AGM who
have not cast their vote by remote e-voting shall be able to
exercise their right at the AGM through ballot paper.
IV. A Member may participate in the AGM even after exercising his
right to vote through remote e-voting but shall not be allowed to
vote again at the AGM.
V. A person, whose name is recorded in the Register of Members
or in the Register of Beneficial owners maintained by the
depositories as on the cut-off date shall only be entitled to
avail the facility of remote e-voting as well as voting at the AGM
through ballot paper.
VI. Mr. Suhas Ganpule, practicing Company Secretary,
(Membership no. 12122, Cp no: 5722) proprietor of S G. &
Associates has been appointed as the Scrutinizer for providing
facility to the Members of the Company to scrutinize the remote
e-voting process and voting through Ballot at the AGM in a fair
and transparent manner.
v.
vi.
Kindly note that the Members can opt only one mode of voting i.e.
either by Ballot paper or e-voting. If you are opting for e-voting,
then do not vote by Ballot paper and vice versa. However, in case
a Member has voted both in Ballot paper as well as e-voting, then
voting done through e-voting shall prevail and voting done through
Ballot paper will be treated as invalid.
You are requested to carefully read the instructions printed on
the Ballot paper and return the paper duly completed, in the
enclosed self-addressed postage prepaid envelope, so as to
reach the Scrutinizer at C-101, 247 park, l.B.S Marg, Vikhroli
(West), Mumbai – 400 083 on or before the close of working hours
(5.00 p.M.) on tuesday, 24 September 2019. no other request/
details furnished in the Self-Addressed envelope will be entertained.
vii. the Ballot papers received after close of working hours
(5.00 p.M.), tuesday, 24 September 2019 will be treated as if the
same has not been received from the Member.
By order of the Board of Directors
For Eros International Media Limited
place : Mumbai
Date : 23 May 2019
Abhishekh Kanoi
Vice president- Company Secretary
and Compliance officer
Membership no. – FCS-9530
EROS INTERNATIONAL MEDIA LIMITED 147
Notice
EXPLANATORY STATEMENT
(PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013)
As required by Section 102 of the Companies Act, 2013 (“the Act”), the following explanatory statement sets out all material facts relating to the
business mentioned under Item nos. 3 and 4 of the accompanying notice dated 23 May 2019:
Item No. 3:
Item No. 4:
Annexure-I to the Notice
Mr. Dhirendra Swarup
(DIn: 02878434) was appointed as an
Independent Director on the Board of the Company by the Members at
the 20th AGM of the Company held on 25 September 2014 for a period
of Five (5) consecutive years till the conclusion of the AGM to be held in
the calendar year 2019.
As per Section 149(10) of the Act, an Independent Director shall hold
office for a term of upto five consecutive years on the Board of a
Company but shall be eligible for re-appointment on passing a Special
Resolution by the Company for another term of upto five consecutive
years on the Board of a Company.
the Board, based on the performance evaluation of Independent Directors
and based on recommendation of nomination and Remuneration
Committee and in terms of the provisions of Sections 149, 150, 152
read with Schedule IV and any other applicable provisions of the Act
and SeBI (listing obligations and Disclosure Requirements) Regulations,
2015 (“SeBI listing Regulations”), Mr. Dhirendra Swarup, being eligible
for re-appointment as an Independent Director and offering himself for
re-appointment, is proposed to be re-appointed as an Independent
Director for second term of Five (5) consecutive years till the conclusion
of the AGM to be held in the calendar year 2024.
the Company has received declaration from Mr. Dhirendra Swarup stating
that he meets the criteria of Independence as prescribed under sub-section
(6) of Section 149 of the Act and Regulation16(1)(b) of the SeBI listing
Regulations. He has also given his consent to continue to act as Director of
the Company, if so appointed by the Members of the Company.
In the opinion of the Board, Mr. Dhirendra Swarup fulfils the conditions
specified under Section 149(6) of the Act, the Companies (Appointment
and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) of
the SeBI listing Regulations for his re-appointment as an Independent
Director of the Company and is independent of the management.
Copy of the draft letter for appointment of Mr. Dhirendra Swarup as an
Independent Director setting out terms and conditions would be available
for inspection without any fee by the Members at the Registered office
of the Company during normal business hours (11:00 A.M. to 1:00 p.M.)
on all days except Saturdays, Sundays and public Holidays up to the
date of the AGM.
the Board considers that his continued association would be of immense
benefit to the Company and it is desirable to continue to avail services of
Mr. Dhirendra Swarup as an Independent Director.
Accordingly, the Board recommends passing of the Special Resolution
in relation to re-appointment of Mr. Dhirendra Swarup as an Independent
Director for another term of Five (5) consecutive years till the conclusion
of the AGM to be held in the calendar year 2024, for the approval by the
Members of the Company since Mr. Dhirendra Swarup will be attaining
the age of Seventy Five (75) years this year pursuant to Regulation 17(1A)
of the SeBI listing Regulations.
except Mr. Dhirendra Swarup, being an appointee and his relatives, none
of the Directors and Key Managerial personnel of the Company and their
relatives are concerned or interested, financially or otherwise, in the
resolution set out at Item no. 3 of the accompanying notice of the AGM.
Mr. Dhirendra Swarup is not related to any Director of the Company.
pursuant to the provisions of Section 188 and any other applicable
provisions of the Act and applicable Rules made thereto, Regulation 23
of SeBI (listing obligations and Disclosure Requirements) Regulations,
2015 (“SeBI listing Regulations”), all material transactions with related
party requires approval of the Members of the Company through
ordinary Resolution and the related parties shall abstain from voting
on such resolutions. the Company’s transactions with its subsidiary
company viz. Colour Yellow productions private limited falls under the
term “Material transaction” i.e. any transaction entered either individually
or taken together with previous transactions during a financial year,
exceeds ten (10) percent of the annual consolidated turnover of the
Company. Colour Yellow productions private limited is also a related
party in terms of Section 2(76) of the Act. particulars of the Contracts/
arrangements/ transactions as envisaged under Companies (Meetings
of Board and its powers) Rules, 2014, as amended, are as under:
(a) Name of the Related Party: Colour Yellow productions private limited
(b) Nature of Relationship: Subsidiary Company
(c) Name of the Director or Key Managerial Personnel who is
related, if any: Mr. Sunil lulla is also a Director of Colour Yellow
productions private limited and he is brother of Mr. Kishore lulla.
(d) Nature, material terms, monetary value and particulars of
the contract or arrangement: For production of cinematograph
films (in Hindi and other regional and foreign languages) and
original television and digital programmes for an estimated amount
of ` 300 crores in each financial year on such terms and conditions
as determined by the Board of Directors of the Company and
Colour Yellow productions private limited from time to time. the
transactions with Colour Yellow productions private limited are
made in ordinary course of business and at arm’s length basis.
(e) Any other information relevant or important for the Members
to take a decision on the proposed resolution : the proposed
related party transaction are in accordance with the Related
party transactions policy of the Company and approved and
recommended by the Audit Committee and Board of Directors of
the Company.
As per Regulation 23 of the SeBI listing Regulations, all entities
falling under the definition of related parties shall abstain from voting
irrespective of whether the entity is a party to the particular transaction
or not, wherein approval of material related party transactions is
sought from the Members. Accordingly, the Key Managerial personnel
of the Company as stated hereinabove are concerned or interested in
the said resolution set out at Item no. 4 of the notice.
the Board recommends the ordinary Resolution as set out at Item
no. 4 of the notice for approval by the Members.
By order of the Board of Directors
For Eros International Media Limited
Abhishekh Kanoi
Vice president- Company Secretary
and Compliance officer
Membership no. – FCS-9530
Registrar and Transfer Agent:
link Intime India private limited
unit: eros International Media limited
C-101, 247 park, l.B.S Marg, Vikhroli (West),
Mumbai 400 083
tel: +91 22 49186270
Fax no.: +91 22 49186060
email: rnt.helpdesk@linkintime.co.in
place : Mumbai
Date : 23 May 2019
Registered Office:
201, Kailash plaza,
plot no. A-12,
opp. laxmi Industrial estate,
off. Andheri link Road, Andheri West,
Mumbai 400 053
148 AnnuAl RepoRt 2018-19
Corporate Office:
901/902, Supreme Chambers,
off. Veera Desai Road, Andheri West,
Mumbai 400 053, Maharashtra (India).
tel: +91 22 66021500
Fax no.: +91 22 66021540
email: compliance.officer@erosintl.com
Notice
Details of Directors seeking appointment/ re-appointment/ fixation of remuneration of Director furnished pursuant to Regulation 36 of
the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 1.2.5 of
the Secretarial Standard-2.
Annexure II to the Notice
Name
DIN
Designation
Date of Birth
Age
Mr. Kishore Arjan Lulla
Mr. Dhirendra Swarup
02303295
executive Director
4 September 1961
57 Years
02878434
Independent non-executive Director
5 December 1944
74 Years
10 February 2010
Date of First Appointment on the Board
28 September 2009
Qualifications
Bachelor of Arts, university of Mumbai
• Fellow Member of Institute of public Auditors
Profile
of India
• post Graduate Degree in Humanities
Mr. Dhirendra Swarup is a government-certified
accountant and a member of the Institute of
public Auditors of India, Mr. Swarup holds a
postgraduate degree in humanities. A career
bureaucrat, he retired as secretary of Ministry
of Finance, Government of India in 2005. He
possesses a vast experience of 45 years in
the finance sector and has also worked in uK,
turkey and Georgia. He served as the Chairman
of Financial Sector Redress Agency task Force
appointed by Government of India, he is also on
the Board of several listed companies besides
acting as a member and the Chairman of several
committees. In the past, he has held many key
positions and responsibilities like being a member
of the Board of the SeBI, a member of the
permanent High-level Committee on Financial
Markets, chairman of
the pension Funds
Regulatory Authority, Chief of the Budget Bureau
of the Government of India, a member secretary
of the Financial Sector Reforms Commission,
chairman of public Debt Management Authority
task Force, vice-Chairman of the International
network on Financial education of oeCD.
Mr. Kishore lulla received a bachelor’s degree
in arts from the Mumbai university. He has
over 36 years of experience in the media and
film industry. He is a member of the British
Academy of Film and television Arts and Young
presidents’ organization and is also a board
member of the School of Film at the university of
California, los Angeles. He has been honored at
the Asian Business Awards 2007 and the Indian
Film Academy Awards 2007 for his contribution
in taking Indian cinema global. In 2010, Mr. lulla
was awarded the “entrepreneur of the Year” at
the GG2 leadership and Diversity Awards and
in 2014, Forbes Asia featured Mr. lulla in the list
of ‘Best under a Billion’. He was also honored
with the 2014 Global Citizenship Award by the
American Jewish Committee, a leading global
Jewish advocacy organization. Mr. lulla also
received the entertainment Visionary award
at the 2015 Annual Gala Dinner from the Asia
Society Southern California. In 2015, he was
invited to attend the “billionaires’ summer
camp” in Sun Valley, an annual gathering of
the world’s most powerful entrepreneurs and
business executives. He has been instrumental
in expanding our presence
in the united
Kingdom, the united States, Dubai, Australia,
Fiji and other international markets. In 2018, he
was featured in the Variety 500 list of “influential
business leaders shaping the global $2 trillion
entertainment industry”.
Terms and conditions of
Re-appointment
Retire by rotation:
• Liable to retire by rotation.
Duties:
• To adhere as provided under Section 166 of
the Act.
Code of Conduct:
• Abide by the Code of Conduct devised by
the Company
Appointment:
• Second
term
for Five
(5) years w.e.f.
25 September 2019 to the conclusion of the
Annual General Meeting of the Company to be
held in the Calendar Year 2024.
• Not liable to retire by rotation
Termination:
• Terminated by either side in terms of Section
168 or Section 169 of the Companies Act,
2013 (‘the Act’).
Duties:
• To adhere as provided under Section 166 of
the Act in addition to duties mandated under
Schedule IV of the Act.
Code of Conduct:
• Abide by the Code of Conduct devised by
the Company.
EROS INTERNATIONAL MEDIA LIMITED 149
Notice
Name
Mr. Kishore Arjan Lulla
Mr. Dhirendra Swarup
Directorships held in other companies
(as on
31 March 2019)
• Eros International PLC (Isle of Man)
• Berger Paints India Limited (subsequently
• Eros International USA Inc
• Eros Digital Limited (Isle of Man)
resigned)
• Eros International Films Private Limited
• PTC Energy Limited
Last remuneration drawn
` 1,40,70,372/-
Remuneration to be paid
Memberships/Chairmanships of
Committees of other companies
nil
nil
Number of Board Meetings attended
during FY 2018-19
one (1)
nil
nil
Berger Paints India Limited
Audit Committee - Chairman
(subsequently resigned)
PTC Energy Limited
Audit Committee - Chairman
nomination and Remuneration Committee –
Chairman
Eros International Films Pvt. Ltd.
Audit Committee - Member
Four (4)
Relationship with other Directors, Key
Managerial Personnel
Brother of Mr. Sunil lulla and not related to any
Director/Key Managerial personnel.
not related to any Director/Key Managerial
personnel.
Number of shares held in the Company nil
Number of Stock Options
nil
nil
nil
ROUTE MAP FOR VENUE OF ANNUAL GENERAL MEETING OF EROS INTERNATIONAL MEDIA LIMITED
150 AnnuAl RepoRt 2018-19
Notice Eros International Media Limited
CIn: l99999MH1994plC080502
Registered Office Address: 201, Kailash plaza, , plot no. A-12 ,opp. laxmi Industrial estate,
off. Andheri link Road, Andheri West, Mumbai-400 053, Maharashtra (India)
Corporate Office: 901/ 902, Supreme Chambers, off Veera Desai Road, Andheri West, Mumbai 400 053
phone: +91 22 66021500 | Fax: +91 22 66021540
email: compliance.officer@erosintl.com | Website: www.erosplc.com
ATTENDANCE SLIP
(To be presented at the entrance of the meeting hall)
25th Annual General Meeting on Wednesday, 25 September 2019 at 2.00 p.M.
at '“the Classic Club”, new link Road, Behind Infinity Mall, Andheri West, Mumbai - 400 053.
Folio no. ................................................... Dp ID no.......................................................... Client ID no.......................................................................
name of the Member .................................................................................................................................. Signature................................................
name of the proxyholder................................................................................................................................ Signature................................................
1. only Member/proxyholder can attend the Meeting.
2. Member/proxyholder should bring his/her copy of the Annual Report for reference at the Meeting.
Proxy Form – Form MGT- 11
[pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies
(Management and Administration) Rules, 2014]
CIN
: l99999MH1994plC080502
Name of the Company
: eRoS InteRnAtIonAl MeDIA lIMIteD
Registered Office
: 201, Kailash plaza, plot no. A-12, opp. laxmi Industrial estate, off. Andheri link Road, Andheri West,
Mumbai - 400 053, Maharashtra (India)
name of the member (s)
Registered Address
e-mail ID
Folio no/ Client ID
Dp ID
:
:
:
:
:
I/We, being the Member(s) of .................... shares of eros International Media limited, hereby appoint:-
1. ...………...............………… of …............................................................………………… having email id ….............………………… or failing him
2. ...………...............………… of …............................................................………………… having email id ….............………………… or failing him
3. ...………...............………… of …............................................................………………… having email id ….............………………… or failing him
And whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 25th Annual General
Meeting of the Company, to be held on Wednesday, 25 September 2019 at 2:00 p.M. at “the Classic Club”, new link Road, Behind Infinity Mall,
Andheri West, Mumbai – 400 053, and at any adjournment thereof in respect of such resolutions as are indicated below:
**I wish my above proxy to vote in the manner as indicated in the box below:
Resolutions
Sr.
No.
1
2
3
4
ORDINARY BUSINESS
to receive, consider and adopt (a) audited financial statements of the Company for the year ended
31 March 2019 together with Directors Report and Auditors Report thereon & (b) audited
consolidated financial statements for the year ended 31 March 2019 together with the auditor’s
report thereon.
Appointment of Director in place of Mr. Kishore Arjan lulla (DIn: 02303295), who retires by rotation,
and being eligible, offers himself for re-appointment.
SPECIAL BUSINESS
Re-appointment of Mr. Dhirendra Swarup (DIn 02878434), as an Independent Director not liable to
retire by rotation, to hold office for second term of Five (5) consecutive years from the date of this
25th Annual General Meeting.
Approval of Material Related party transactions between the Company and Colour Yellow
productions private limited.
Optional
For
Against
notwithstanding the above, the proxies can vote on such other items which may be tabled at the Meeting by the Members present.
Affix
Revenue
Stamp
Signed this................................. day of .................... 2019
..................................................
Signature of Member
..................................................
Signature of First proxy Holder
..................................................
Signature of Second proxy Holder
..................................................
Signature of third proxy Holder
note:
1)
2)
3)
4)
5)
6)
this form of proxy in order to be effective should be duly completed and deposited at the Corporate office of the Company, not less than
Forty eight (48) hours before the commencement of the Meeting.
A proxy need not be a Member of the Company.
A person can act as a proxy on behalf of Members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital
of the Company carrying voting rights. A Member holding more than 10% of the total share capital of the Company carrying voting rights may
appoint a single person as proxy and such person shall not act as a proxy for any other person or Member.
**this is optional. please put a (√) in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column
blank against any or all the resolutions, your proxy will be entitled to vote in the manner as he/she thinks appropriate.
Appointing a proxy does not prevent a Member from attending the Meeting in person if he so wishes.
In the case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.
CORPORATE INFORMATION
Board of Directors
Mr. Dhirendra Swarup
Non-Executive Chairman & Independent Director
DIN: 02878434
Mr. Sunil Arjan Lulla
Executive Vice Chairman & Managing Director
DIN: 00243191
Mr. Kishore Arjan Lulla
Executive Director
DIN: 02303295
Mr. Rakesh Sood
Non-Executive Independent Director
DIN: 07170411
Mr. S. Lakshminarayanan
Non-Executive Independent Director
DIN: 07972480
Mr. Sunil Srivastav
Non-Executive Independent Director
DIN: 00237561
Mrs. Jyoti Deshpande (up to 28 June 2019)
Non-Executive Non-Independent Director
DIN: 02303283
Group Chief Financial Officer (India)
Mr. Farokh P. Gandhi
Vice President – Company Secretary & Compliance Officer
Mr. Vijay Thaker (w.e.f. 13 August 2019)
Mr. Abhishekh Kanoi (up to 12 August 2019)
Statutory Auditors
Chaturvedi and Shah LLP
(Erstwhile known as Chaturvedi & Shah)
Chartered Accountants
(Firm Registration No. 101720W/W100355)
Corporate Identification Number (CIN)
L99999MH1994PLC080502
Bankers
State Bank of India (Lead Bank)
IDBI Bank Limited
Indian Overseas Bank
Punjab National Bank
Oriental Bank of Commerce
Union Bank of India
Bank of Baroda
Dena Bank (Now Bank of Baroda)
Corporate Office
901/902, Supreme Chambers,
Off. Veera Desai Road,
Andheri West,
Mumbai - 400 053
Maharashtra (India)
Tel: +91 22 66021500; Fax: +91 22 66021540
Email: compliance.officer@erosintl.com
Website: www.erosplc.com
Registered Office
201, Kailash Plaza,
Opp Laxmi Industrial Estate,
Off Andheri Link Road,
Andheri West, Mumbai 400053
Maharashtra (India)
Registrar and Share Transfer Agent
Link Intime India Private Limited
Unit: Eros International Media Limited
C 101, 247 Park,
LBS Marg, Vikhroli West,
Mumbai 400 083
Maharashtra (India)
CIN: U67190MH1999PTC118368
Tel: +91 22 4918 6270; Fax: +91 22 4918 6060
E-mail: rnt.helpdesk@linkintime.co.in,
mumbai@linkintime.co.in
Website: www.linkintime.co.in
EROS INTERNATIONAL MEDIA LIMITED
CIN: L99999MH1994PLC080502
201, Kailash Plaza, Opp. Laxmi Industrial Estate,
Off. Andheri Link Road, Andheri West,
Mumbai 400 053, Maharashtra (India).
Tel: + (91 22) 66021500, Fax: + (91 22) 66021540
Email: compliance.officer@erosintl.com
Website: www.erosplc.com