Eros International plc
Annual Report 2021

Plain-text annual report

Contents Corporate Overview Board of Directors Management Reports Management Discussion and Analysis Director’s Report Corporate Governance Report Financial Statements Standalone Financial Statements Consolidated Financial Statements Notice Notice to the AGM 02 04 07 25 37 89 139 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 Ms. Bindu Saxena Non-Executive Independent Director DIN: 00167802 1 Mr. Sunil Srivastav Non-Executive Independent Director DIN: 00237561 Mr. Farokh P. Gandhi Executive Director & Group Chief Financial Officer (India) DIN: 03112612 2 3 Mr. Pradeep Dwivedi Executive Director & Chief Executive Officer (India) DIN: 07780146 Mr. Manmohan Kumar Sardana Non-Executive Independent Director DIN: 09294639 4 Vice President - Company Secretary & Compliance Officer Mr. Vijay Thaker Statutory Auditors Chaturvedi and Shah LLP Chartered Accountants (Firm Registration No. 101720W/W100355) Corporate Identification Number (CIN) L99999MH1994PLC080502 Bankers IDBI Bank Limited (Lead Bank) Bank of Baroda Punjab National Bank Indian Overseas Bank Union Bank of India State Bank of India 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.eiml.site Registered Office 201, Kailash Plaza Opp Laxmi Industrial Estate, Off Andheri Link Road Andheri West, Mumbai 400053 Maharashtra (India) Registrar & 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 Website: www.linkintime.co.in 1 Mr. Sunil Srivastav ceased to be Director of the Company w.e.f. 14 August 2021. 2 Mr. Farokh P. Gandhi was appointed as Director of the Company w.e.f. 9 November 2020 and ceased to be a Director and Group Chief Financial Officer (India) of the Company w.e.f. 14 August 2021. 3 Mr. Pradeep Dwivedi Company's Chief Executive Officer was appointed as Executive Director of the Company w.e.f. 14 August 2021. 4 Mr. Manmohan Kumar Sardana was appointed as Non-Executive Independent Director of the Company w.e.f. 31 August 2021. 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 46 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 27 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 15 December 2020 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 Ms. Bindu Saxena 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 37 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. 2 ANNUAL REPORT 2020-21 Ms. Bindu Saxena, is a practicing Advocate and is a partner of the law firm Swarup & Company, New Delhi, India and has over 34 years of experience as corporate attorney with clients in India and overseas including large multinational corporations. Her experience as corporate attorney includes experience of commercial transactions and projects in India and overseas. Her experience includes Indian and transborder transactions, acquisitions, transactions, joint ventures, private equity investments and participation in both new and existing companies and ventures in diverse sectors and industry. She has been advising clients (both Indian and foreign and in private sector and public sector) in diverse corporate and commercial matters and foreign collaboration, foreign investment, funding, acquisitions, mergers, amalgamations and takeovers and in all aspects of structuring, negotiating and drafting of diverse business and project related for diverse sectors including infrastructure, fertilizer, mining, refineries, steel, chemicals, engineering goods etc. She also handles court matters including litigation pertaining to corporate matters, contractual disputes, enforcement of foreign awards, domestic and international commercial arbitration and matters before various tribunals etc. transactions and projects including CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | Mr. Sunil Srivastav Non-Executive, Independent* Mr. Farokh P. Gandhi Chief Financial Officer and Executive Director* 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. Mr. Farokh Gandhi is an experienced Chartered Accountant and Corporate Finance Strategist who has been associated with Eros Group for over 18 years, out of his 28 years of experience in the finance sector. During his association, he has been key in executing the various IPOs and listing of the Group in India as well as overseas as well as setting of financial systems and processes to support the Company’s growth. Pradeep Mr. Dwivedi Chief Executive Officer and Executive Director** Mr. Manmohan Kumar Sardana Non-Executive, Independent** Mr. Pradeep Dwivedi is a senior media industry professional and Group CEO of the Company since January 2020. He is an accomplished industry leader with an experience of over two decades in Advertising & Media Business, Telecom & Technology Enterprises, Banking & Financial services Institutions and Automotive sector, with established credentials in digital infotainment business as well as Print Publication, News Television channels and Experiential Events. He has a demonstrated in Revenue growth, Sales & Marketing, Value creation, Joint ventures & Partnerships, Investments, product & service delivery, risk operations & general management. In the past, he has been Group CEO of Sakal Media Group, Chief Corporate Sales & Marketing Officer of Dainik Bhaskar Group, and worked with organisations such as Tata Teleservices, American Express, GE Capital, Standard Chartered Bank & Eicher Motors India. He is an active participant in many media industry associations as Director of IAA (India Chapter) and a managing committee member of The Advertising Club of India. track record Mr. Manmohan Kumar Sardana was serving as teaching assistant in the Physics Department of the Panjab University from 1965 to 1967, thereafter he joined the Indian Administrative Service (IAS) in 1968 and was allocated to the West Bengal Cadre. After serving in different capacities in the State of West Bengal and in various Ministries of the Government of India, Mr. Sardana retired from the service finally in 2004 as Secretary Ministry of Corporate Affairs. He joined as Member, MRTP Commission soon after his retirement i.e., in 2004 and finally completed his tenure in the MRTP as its acting Chairman in 2009. He remained Ex-officio Member of SEBI, during his tenure as Secretary, Ministry of Corporate Affairs. From 2010 till 31 March 2021, Mr. Sardana has been a Visiting Fellow at the Institute for Studies in Industrial Development (ISID) advising on public policy issues. *Ceased to be Non-Executive Independent Director w.e.f. 14 August 2021. ** Appointed as Executive Director w.e.f. 14 August 2021. * Ceased to be Executive Director and Chief Financial Officer w.e.f. 14 August 2021. ** Appointed as Non-Executive Independent Director w.e.f. 31 August 2021. EROS INTERNATIONAL MEDIA LIMITED 3 MANAGEMENT DISCUSSION AND ANALYSIS Macroeconomic Environment across the World and in India While virtually no large economy has escaped unscathed from the COVID-19 pandemic that started in Q4 FY20, India has been one of the badly affected countries, both economically and from the healthcare perspective. At the start of the pandemic, with images and news of healthcare systems even in G-10 economies like Italy and United States getting overwhelmed, everyone understood that the pandemic presented an unprecedented challenge to India's public health systems. And lockdowns were thought to be an effective way to control the spread of the virus, thus preventing the healthcare systems from collapsing under the immense pressure of a large volume of infections. However, the lockdowns and other lockdown-like restrictions have sharply impacted both the formal and the informal economy, presenting a new set of challenges to India's food system and its industrial backbone. The Indian economy underwent a GDP contraction of 7.3% in FY21. And while the digital economy has been able to cushion some of the impacts, the impact on the "offline" economy has been even sharper. The resulting socio-economic disruption has pushed millions into poverty in the country. The lockdowns and differing state-wise regulations also disrupted the various supply chains, in turn, worsening the impact on businesses and industries all across the country, especially in the first half of the financial year. The challenge was unlike any previous economic shocks and with social distancing and work safety ruling the roost, reinventing the work process and responding to the risk with pliable solutions became imperative. Moreover, helping to create a secure environment for all became the focus across the world. The derailment of the economy across the world became evident and the immediate and long-term effect of the disruption brought about by the pandemic proved to be damaging. In its recent projection of the world economy, IMF has put the expected growth at 6% in 2021, moderating to 4.4% in 2022. This is a huge turnaround from an estimated contraction of 3.3% in the world GDP in 2020, where it declared 2020 as a "gap year" for the world economy. It is now more than a year into the pandemic and the global prospects still remain uncertain. Though the expanding vaccine coverage across the world is lifting sentiments, the new virus variants and mutations are a major cause for concern. Moreover, the pandemic has exposed the fragility of the healthcare systems across many countries on the planet. The pandemic has also created disruptions in various industries, and some are just taking shape, and reverberating across the world economy in the process. Besides, they are also diverging economic recoveries across sectors and economies. Now, the hope lies not only in the successful rollout of vaccination programmes across the world to end the rampage of the virus and its various variants but also on the application of economic policies that would cushion some of the devastating impacts of the COVID-19 pandemic not just on people but also on businesses. Impact on Indian Economy India's GDP grew 1.6% in the fourth quarter (January-March) of FY21 prior to the second wave of the COVID-19 pandemic. This comes on top of 0.5% growth in the previous October-December quarter (Q3 4 ANNUAL REPORT 2020-21 FY21). The economy had grown 3% in the January-March quarter of FY20. Reportedly, the GDP contracted 7.3% in FY21. However, the marginal improvement from the earlier estimate of 8% contraction in the second advance estimates released in February has been majorly due to a sharp rise in government expenditure. The uptick in the fourth quarter was mainly driven by the manufacturing sector despite services remaining relatively sluggish, as stated in the provisional estimates of annual national income and quarterly estimates released by the National Statistical Office ("NSO"). However, the subsequent unlock at the end of 2020 stimulated the business activities. According to the data, the gross value added in Q4 FY21 was 3.7%, much higher than 1% in Q3. Though, the provisional estimate of FY21 GDP numbers is slightly better than predicted, but may not change the larger picture. The growth may remain subdued in the first quarter of FY22 as the severe and unprecedented second wave of COVID-19 hit India, and this is expected to significantly impact expected growth during the rest of FY22 as well. The recovery may be directly proportional to the opening of the localised lockdowns, the success of vaccine rollout and the role it will play in combatting the third wave. However, the economic outlook remains highly uncertain. At present, post the second wave, the World Bank expects India's GDP to grow by 7.5% in FY22. However, an expected third wave and the above factors may impact even this projection. Industry Review According to a report jointly released by FICCI and EY in March '21 ("Playing by new rules, India's Media & Entertainment sector reboots in 2020"), the Indian Media and Entertainment ("M&E") sector fell 24% in the calendar year 2020 to ` 1.38 trillion (US$ 18.9 billion). The report estimated, basis the improvement seen in the last quarter of 2020, that the sector would grow 25% in the calendar year 2021, to ` 1.73 trillion (US$ 23.7 billion), and would continue on the growth trajectory to the calendar year 2023, growing 17% CAGR (from 2020) to ` 2.23 trillion. However, given that these expectations were prior to India's second COVID-19 wave in April-May '2021, these expectations may be severely impacted. In 2020 whilst television proved to be resilient and continued to be the largest segment, Digital Media overtook the print segment as the second-largest segment, the only segment that saw growth during this period. However, most of this growth came from record growth in subscription revenue, while revenue from advertising for digital media continued to be stable over 2019. The online gaming segment was another segment that grew over the year, with the Digital Media and Online Gaming segments cumulatively adding ` 25 billion of revenues to the M&E space during the year. All the other segments, including Television, Print, Radio and Filmed Entertainment, saw a de-growth, cumulatively reducing the M&E segment's revenues by ` 465 billion. While the M&E sector has usually outperformed India's GDP growth, in 2020 the sector experienced degrowth of ~3x the de-growth experienced by the Indian economy. This was primarily due to the discretionary nature of the spending and the activity, which caused people to spend less in a time of incomes getting impacted, and lack of clarity on how long the pandemic conditions would last. In addition, within the M&E space, events / experiences that required being in close quarters with others were even more sharply impacted, with even people having the capability and willingness to spend on discretionary MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | items, not willing to venture out for such experiences/events, given the overhang of the pandemic. Digital Media The year 2020 saw digital media grow by 6.5% to reach ` 235 billion and is projected to grow at 22% CAGR to reach ` 425 billion by 2023. In 2020, owing to the pandemic due to the subsequent lockdowns, the revenues from digital subscriptions grew 49% to reach ` 43.5 billion. The lockdowns significantly impacted the creation of fresh content on television, especially in the first three quarters of 2020. Since television depends on a steady supply of fresh content and online sports content went behind a paywall, a large number of people bought new digital subscriptions and paid video subscriptions on digital platforms. It crossed 50 million for the first time in the history of the Indian M&E industry. This caused a lot of advertisers to increase their allocation of advertisement spends towards digital sales channels, and digital advertising stayed stable. SME advertising also remained a bright area where SME advertisers spent more on digital advertising and also tried more online e-commerce platforms. By 2025, it has been projected that digital advertising may outstrip advertisement spending in all other channels. This may result in the challenge of measurement of metrics to measure digital ad engagement, along with leading to change in metrics being currently tracked as well. For example, Daily Active Users (DAU) may become the metric to look at instead of Monthly Active Users (MAU), audience engagement instead of solely audience numbers, and some metrics to measure customer loyalty, retention as well as time spent watching content. Even the demand for fresh and original content may double by 2023 from 2019 levels to over 3,000 hours per year. The share of regional language consumption on OTT platforms may also cross 50% of total time spent by 2025. Newspaper digital products may also increasingly go behind paywalls and the subscription revenue generation is expected to be ` 4 billion by 2023. Company Review With the COVID-19 pandemic proving to be a "Black Swan" event unlike ever before, and also lasting much longer than anyone expected, various businesses within the M&E segment have been hit harder and their cashflows severely impacted. Similar to various other players in the industry, as Eros International Media Ltd. (EIML) depends significantly on theatrical revenues, the continued closure of cinema halls and malls to restrict social gatherings, has frozen major cash inflows, and had a major detrimental effect on the Company's business. While EIML did release its film "Haathi Mere Saathi" theatrically in Tamil and Telugu in March '21 as well as a few titles like "Haseen Dilruba" and "7 Kadam" on OTT platforms opportunistically in 2021, the Company was forced to defer the release of a large number of films indefinitely due to COVID-19. Though several states and countries did allow limited opening up of theatres with restricted occupancies (in most cases below 50% capacity), such relief would have impacted the returns from the theatrical window of any film which choose to release during this period, thus affecting the economic viability of the film. In fact, this is why not just EIML, but most other production houses have chosen to indefinitely defer the release of their films until the situation improves, and no major theatrical release has happened in the Hindi film industry, since March 2020. For the release of new films, Company would wait until the situation improves in order to optimise the revenues from the theatrical window of the said films. We believe that this will help in optimising cash inflows to your Company and would better serve all stakeholders. In addition to theatrical release, there are also restrictions on production activities, which are not conducive to the creation of new content, and even limit the ability to shoot certain scenes. Hence, even some films under production have stopped or have scaled-down production activities and are awaiting normalcy without any COVID-19 restrictions in order to restart. Your company is hopeful about sailing through the current situation successfully and coming out on the other end. In order to do this, it is working on looking for innovative ways of earning revenue and strengthening its value proposition, thus re-inventing itself, and further fortifying its position. The impressive library and its monetization through various channels, including Satellite TV, Overseas, In-flight and other channels, provide EIML with multiple sources of revenue. Moreover, EIML also produces and acquires content for Eros Now, which is EIML's parent Eros International PLC's OTT streaming service. The Company has also started formulating innovative ways of updating its existing content libraries. Given a rise in demand for content and increasing viewership on OTT platforms, coupled with the limited production of new content, existing library content is likely to become more valuable. Moreover, once normalcy resumes, owing to pent-up demand, the M&E sector may be one of the first sectors of the economy to see a revival, and Eros International is well-prepared with its large existing content library, to take advantage of any digital opportunities that exist, in the meantime. Furthermore, when the theatres open and production & shooting schedules resume and achieve normalcy, the company will release and complete its upcoming film projects/web series. Financial Review In FY 21, the Company's total consolidated income stood at ` 38,852 lakhs as against ` 93,386 lakhs in FY 20. The Company registered an EBITDA loss of ` 17,325 lakhs during the year as compared to a loss of ` 161,546 lakhs in the previous year. The consolidated loss for the year stood at ` 18,110 lakhs as compared to ` 140,121 lakhs in FY 20. Risk Management The Risk Management framework includes Risk Management Policy and identification of risks at Company Level, Strategic Level and Operational level. The risk mitigation procedures associated with the business and prioritization of risks include scanning the business environment and having periodic risk review. The risks associated with the Company's businesses are broadly classified in following categories: • Environmental Risk: Due to the adverse impact of COVID-19, the Company may suffer losses. • Economic Risk: Due to adverse political situations or downturn which may negatively impact the Company's organizational objectives. • Regulatory Risk: Due to government regulations or any other statutory violations and amendments, which may lead to litigations and loss of reputation. • Operational Risk: Ability to attract and retain clients. Internal Control Systems The Company has adequate internal controls required in the nature of its business and operations. The company can safeguard its assets and financial transactions with adequate checks and balances, while adhering to accounting policies. Systems are reviewed and improved EROS INTERNATIONAL MEDIA LIMITED 5 MANAGEMENT DISCUSSION AND ANALYSIS regularly. With the Company's budgetary control system, it monitors revenue and expenditure with actual vs. approved budget. The Company has its own corporate internal audit function which monitors and assesses the adequacy and effectiveness of the Internal Controls and Systems. Deviations from standard operating procedures are periodically reviewed and compliance is ensured. The pandemic has made the Company re-strategize operational and legal aspects of the business, such as project timelines, production costs and schedules. The Company has a large content library, of its own as well as on its group OTT platform Eros Now, and with the rise in new content consumption patterns, its existing content is becoming more valuable. Human Resource The Company believes that it has an excellent talent pool. This talent pool is the key to excellence. The Company has a diverse employee base with technical knowledge and functional expertise. This helps to deliver the stipulated target. Performance is valued as an essential tool to accomplish vision, mission and objectives. The Company's 'Human Capital' headcount stands at 191 as on 31 March 2021. Outlook The disruption brought in by COVID-19 has forced people to stay indoors and has led to restrictions on social gatherings and greatly reduced people to people contact. The new normal has led to the increase in demand for content as people are spending most of their time indoors. Even the pattern of content consumption and consumer behaviour has changed. As the cinema halls and malls remain shut, the audience has converged on the OTT platforms (digital platforms) and these platforms continue to gain popularity at the expense of other sources of entertainment, including television channels. We expect the resumption of normalcy to be marked by the recovery of the sector and provide all the players in the M&E space, across mediums and segments, a much-needed boost and the Company is well prepared with its existing huge content library to exploit any and all digital opportunities that come its way in the meantime. Cautionary Statements 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, employee relations and others. 6 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | DIRECTORS’ REPORT To The Members Eros International Media Limited Your Board of Directors are pleased to present 27 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 2021. th 1. FINANCIAL RESULTS The Financial Performance of your Company for the year ended 31 March 2021 is summarized below: ` in lakhs Standalone Year Ended Consolidated Year Ended Particulars Sales and other Income Profit / (Loss) before exceptional items & tax Exceptional (loss)/ gain Profit / (Loss) Before Tax Less: Tax Expenses / (Credit) Net Profit / (Loss) from the year from continuing operation Profit / (Loss) for the year attributable to: Equity shareholders of the Company Non-controlling interests Other comprehensive income (net of taxes) Total comprehensive income/ (loss) for the year Attributable to: Equity shareholders of the Company Non-controlling interests EPS (Diluted) in ` 2. FINANCIAL PERFORMANCE On a consolidated basis, the Company has recorded lower revenues of ` 38,873 lakhs as compared to previous year of ` 93,386 lakhs on account of COVID-19. The loss before tax amounted to ` 17,301 lakhs as against previous year loss of ` 1,61,546 lakhs. The loss after tax attributable to equity shareholders was ` 18,086 lakhs as compared to previous year loss of ` 1,40,521 lakhs. Diluted EPS increased to ` (18.90) as compared to previous year ` (147.06). The reported loss in current financial year was on account of COVID-19 outbreak and resulting measures taken by government of India to contain the virus and the said lockdown has significantly affected our business during financial year 2020-21. On standalone basis, the Company has recorded lower revenues of ` 31,264 lakhs as compared to previous year of ` 72,447 lakhs due to COVID-19. The loss before tax amounted to ` 15,847 lakhs as against previous year loss of ` 9,934 lakhs. The loss after tax stood at ` 16,983 lakhs as compared to previous year loss of ` 1,16,073 lakhs. Diluted EPS increased to ` (17.74) as compared to previous year ` (121.48). The reported loss in current financial year was on account of COVID-19 outbreak and resulting measures taken by government of India to contain the virus and the said lockdown has significantly affected our business during financial year 2020-21. 3. OPERATIONAL PERFORMANCE We continue as a global company in the Indian film entertainment industry that co-produces, acquires and distributes Indian language films in multiple formats worldwide. We have a multi- platform business model and derive revenues from multiple distribution channels. 2020-21 31,264 (15,847) Nil (15,847) 1,136 (16,983) - - (14) (16,997) - - (17.74) 2019-20 72,447 (9,934) (127,850) (137,784) (21,711) (116,073) - - 95 (115,978) - - (121.48) 2020-21 38,873 (15,000) (2,301) (17,301) 785 (18,086) (18,026) (60) (2,825) (20,911) (20,851) (60) (18.90) 2019-20 93,386 (6,194) (155,352) (161,546) (21,425) (140,121) (140,521) 400 7,811 (132,310) (132,710) 400 (147.06) Our content strategy leverages on multi-verse unique IP development, high concept, new talent films, franchises and multilanguage co-productions. The Indian audience's propensity to consume content in local language has been increasing, and in recent times regional films are breaking language barriers as they cross over with dubbed versions to other markets especially the Hindi market. The regional industry also has strong releases in the next year and the market is only expected to expand further. Our Company's key asset is extensive film library. 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. On 30 July 2020, our ultimate parent company, Eros International Plc changed its name to Eros STX Global Corporation pursuant to the merger with STX Entertainment, merging two marquee international media and entertainment groups. The combination of one of the largest Indian OTT players and premier studio with one of Hollywood’s independent media fastest-growing companies has created an entertainment powerhouse with a presence in over 150 countries. ErosSTX delivers star-driven premium feature film and episodic content across a multitude of platforms at the intersection of the world's most dynamic and fastest-growing global markets, including US, India, Middle East, Asia and China. The company also owns the rapidly growing OTT platform Eros Now which has rights to over 12,000 films across Hindi and regional languages. Eros STX Global Corporation, (“ErosSTX”) (NYSE: ESGC) is poised as a global entertainment company that acquires, co-produces and distributes films, digital content & music across multiple formats such as theatrical, television and OTT digital media streaming to consumers around the world. EROS INTERNATIONAL MEDIA LIMITED 7 DIRECTORS’ REPORT Impact of COVID-19 on the business of the company: As you are aware, due to the outbreak of novel coronavirus (COVID-19) in China and then eventually spreading rapidly to various countries across the Globe, including India, the said Coronavirus has been declared as pandemic by WHO and hence the entire global market scenario has been changed with respect to investments in various businesses. It has hit very badly, and various businesses are adversely affected leaving a greater effect on cashflows. These are significant unanticipated events impacting the entire global economy across industries, and our industry in particular, as it depends on theatrical revenues in a significant way. The closure of theatres in India and worldwide for an indefinite period has created an unprecedented uncertainty, and though we remain sanguine about the future, it is increasingly becoming difficult to predict cash flows in near term. The Company was unable to release its films in theaters due to total lockdown or operation of theaters with limited capacity. The film 'Haathi Mere Saathi' was released in theaters on 26 March, 2021. However due to second wave of COVID-19 the said release was also impacted. Considering the present circumstances of COVID-19 pandemic, we are left with no option but to defer the release of our film indefinitely till the situation is improved, so that revenues of our said film can be optimized and improve our cashflows to better serve our commitments to our stakeholders. Your good selves must also be aware that, recently various Cinema Halls, Educational Institutions, Malls or any mass gatherings are being shut down for few days in India and in many countries worldwide and the same will have an adverse impact on all the businesses. The Company on 22 June 2021 had implemented One Time Restructuring (OTR) with consortium bankers as per the circular on 'Resolution Framework for COVID-19 Stress' issued by Reserve Bank of India dated 6 August 2020. Post COVID-19 Scenario: The onslaught of the COVID-19 pandemic has changed the social lives of people across regions and economic sections. The lockdowns and restriction on movement of people has not only led to an increased demand for content but has also changed content consumption patterns. While traditional and outdoor mediums of distribution of content, such as cinema theatres, continue to be unavailable; the home consumption mediums, such as television channels and OTT platforms (digital platforms) have gained even more popularity and viewership. Going forward, we along with our industry have started re-thinking various operational and legal aspects of the business, such as legal timelines, production costs and schedules, project commitments etc., in order to adjust to the 'new normal' being presented to the world. Our group OTT platform Eros Now, where a large chunk of the content library comprises of our own contents and acquired contents, we have also started thinking of innovative ways of updating our existing content libraries. Given a rise in demand for content and increasing viewership, and the halts in production of new content, existing content is likely to become more valuable. Given the above, while the media and entertainment sector is currently grappling with various challenging issues, however, as people strive to return to normalcy, eventually our sector may be amongst the first few to recover and continue to provide to everyone across all mediums and segments, the much-needed entertainment and, we are ready for the same with our huge existing content library to grab the digital opportunities. 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.eiml.site. 5. RESERVES The Company has not transferred any amount to the general reserve during the current financial year. 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 46,568 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 1,89,227 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 ` 95,86,48,180 as on 31 March 2021 as against ` 95,62,90,230 in the previous year. The disclosures as required under Regulation 14 of SEBI (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.eiml.site. A certificate from the statutory auditors certifying that both the schemes viz. EROS ESOP 2009 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 available for inspection by the members. 7. SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES As on 31 March 2021, 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 attached to this Report as Annexure B. None of the subsidiary companies except Copsale Limited (a British Virgin Island Company) is 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.eiml.site. 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.eiml.site. 4. DIVIDEND In view of losses, your Directors do not recommend any dividend to its members for the financial year 2020-21. 8. BOARD OF DIRECTORS AND 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 8 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | Lulla, Executive Director (DIN: 02303295) retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. Mr. Pradeep Dwivedi was appointed as Executive Additional Director on the Board of the Company with effect from 14 August 2021 to hold office up to the date of the ensuing Annual General Meeting of the Company. The proposed resolution for appointment of Mr. Pradeep Dwivedi as Executive Director forms part of the Notice convening Annual General Meeting. Your Board recommends his appointment. Mr. Sunil Srivastav, Independent Director has tendered his resignation due to pre-occupation and other commitments from the Board and its Committees with effect from 14 August 2021. The Board places its gratitude for his valuable contributions during his tenure as Independent Director of the Company. During the year, Mr. Farokh P. Gandhi was appointed as Executive Director on the Board of the Company in addition to the Chief Financial Officer of the Company with effect from 9 November 2020 and had resigned from the Board of Directors and also from the post of Chief Financial Officer of the Company with effect from 14 August 2021. The Board places its gratitude for his valuable contributions during his tenure as Director & Chief Financial Officer of the Company. 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 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 appointed/ re- appointed 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. Pradeep Dwivedi, Director & Chief Executive Officer and Mr. Vijay Thaker, 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. 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 and SEBI Listing Regulations and they have registered their names in Independent Directors' Databank. Further, all the 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. Board 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. Constitution of various Committees The Board of Directors of the Company has constituted following Committees: a. Audit Committee b. c. d. Nomination and Remuneration Committee Stakeholders Relationship Committee 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.eiml.site 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 Evaluation of the Non-Executive Directors and Executive 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 Chairman. 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 is for 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.eiml.site. Independent Directors 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). 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 rd Chaturvedi & Shah LLP, (Firm Registration No. 101720W/ W100355) were appointed as Statutory Auditors of the Company at the 23 Annual General Meeting of the Company held on 28 September 2017 for the term of Five (5) years i.e. from the conclusion of 23 Annual General Meeting until the conclusion of th28 Annual General Meeting, to be held in the calendar year 2022. They have confirmed that they are not disqualified from continuing as Auditors of the Company. rd EROS INTERNATIONAL MEDIA LIMITED 9 DIRECTORS’ REPORT Auditors' Report There are no qualifications, adverse remarks reservations or disclaimer made by Chaturvedi & Shah LLP, Statutory Auditors, in their audit report for the financial year ended 31 March 2021 except for one qualification with regards to Internal Financial Control for content advances. 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 Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed S.G & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2020-21. The Secretarial Audit Report for the financial year ended 31 March 2021 in the prescribed Form MR - 3 is attached to this Report as Annexure D, which is self-explanatory. 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 attached to this Report as Annexure E. 12. LOANS, GUARANTEES OR INVESTMENTS 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.eiml.site. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. 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 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 2020-2021 in terms of Section 188(1) of the Act and applicable Rules made thereunder, in the prescribed Form AOC-2 is attached to this Report as Annexure F. 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 10 ANNUAL REPORT 2020-21 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.eiml.site 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. 16. ANNUAL RETURN The Annual Return of the Company as on 31 March 2021 is available on the Company's website and can be accessed at www.eiml.site. 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. 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. in the preparation of the annual accounts for the financial year ended 31 March 2021, 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 2021 and of the loss of the Company for the year ended on that date; proper and sufficient care has been taken for the in maintenance of adequate accounting records accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 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. However, due to COVID-19 advances are given to various production houses for development CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | and acquisition of movie content. On completion, advances are converted into film rights which are exploited. Entire film industry has been badly affected by COVID-19. Given the uncertain situation arising due to COVID-19, which are not within the control of the Company, production activities of movies for which advances are given have been temporary suspended. Management is evaluation alternatives for further development or refund of advances for each project ongoing basis. The control in this respect could be further strengthen and documented, once uncertainties arising due to COVID-19 is settled; and f. 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 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. 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. Particulars Year ended Year ended 28. OTHER DISCLOSURES 31 March 2021 31 March 2020 Expenditure in foreign currency Earnings in foreign currency 100 15,160 216 55,673 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 Internal Auditors and significant audit observations and follow-up actions are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Company's internal control requirement and monitors the implementation of audit recommendations. 22. CORPORATE GOVERNANCE Your Company has been practicing the principles of good Corporate Governance over the years and it is a continuous and ongoing process. A detailed Report on Corporate Governance practices followed by your Company, in terms of the SEBI Listing Regulations together with a Certificate from the Secretarial Auditor confirming compliance with the conditions of Corporate Governance are provided separately in 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 RESPONSIBILTY 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 G forming part of this Report and is also available on the website of the Company at www.eiml.site. • • • 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) 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. ACKNOWLEDGEMENTS 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 Sunil Srivastav Non-Executive Independent Director DIN: 00237561 Place: Mumbai Date: 14 August 2021 EROS INTERNATIONAL MEDIA LIMITED 11 DIRECTORS’ REPORT l a t o T ) J ( ) I ( ) H ( ) G ( ) F ( ) E ( ) D ( ) C ( ) B ( ) A ( k c o t S e e y o p m E s o r E l 7 1 0 2 e m e h c S n o i t p O k c o t S e e y o p m E s o r E l 9 0 0 2 e m e h c S n o i t p O I 1 2 - 0 2 0 2 R A E Y L A C N A N I F E H T R O F 4 1 0 2 , S N O I T A L U G E R ) S T I F E N E B E E Y O L P M E D E S A B E R A H S ( I B E S E H T F O 4 1 N O I T A L U G E R O T T N A U S R U P E R U S O L C S D I A e r u x e n n A 7 1 0 2 r e b m e t p e S 7 2 i d a p d e u s s i e h t f o % 5 l a t i p a c e r a h s p u e t a D t n a r g n o s a l a t i p a c e r a h s p u d a p d e u s s i i e h t f o % 5 d e v o r p p a s n o i t p o f o r e b m u n l a t o T e t a D t n a r g n o s a e m e h c S e h t r e d n u 9 0 0 2 r e b m e c e D 4 l a v o r p p A s r e d o h e r a h S l f o e t a D 8 1 - b e F - 8 7 1 - v o N - 4 1 7 1 - b e F - 0 1 6 1 - b e F - 9 5 1 - b e F - 2 1 4 1 - v o N - 2 1 3 1 - t c O - 4 1 2 1 - l u J - 1 0 1 - g u A - 2 1 9 0 - c e D - 7 1 s e t a d t n a r G 12 ANNUAL REPORT 2020-21 , 1 1 5 8 8 4 5 , 4 2 8 1 4 , 0 9 1 2 2 8 , 7 2 2 2 8 2 , 9 0 0 , 6 6 9 0 0 0 , 9 3 1 1 6 9 , 2 5 5 0 0 0 , 0 0 3 0 6 1 , 1 7 5 8 2 6 , 3 8 , 2 1 5 9 2 7 1 , e m e h c S n o i t p O k c o t S e e y o p m E s o r E l ) a ( r a e y e h t g n i r u d d e t n a r G s n o i t p O 9 0 0 2 r a e y e h t g n i r u d d e t n a r G s n o i t p O , ) B n m u o C l r e f e r ( 1 1 0 2 - 0 1 0 2 r a e y e h t g n i r u d d e t n a r G s n o i t p O r a e y e h t g n i r u d d e t n a r G s n o i t p O , ) C n m u o C l r e f e r ( 3 1 0 2 - 2 1 0 2 , ) A n m u o C o l t r e f e r ( 0 1 0 2 - 9 0 0 2 , 9 3 6 8 9 3 4 , , 8 4 8 6 5 5 3 , , 8 4 8 6 5 5 3 , 4 2 8 1 4 , 4 2 8 1 4 , 4 2 8 1 4 , . ) 0 6 0 0 2 ` ( 3 8 7 4 8 6 , 0 0 7 9 4 4 , 0 0 7 9 4 4 , 5 1 1 7 4 2 , 0 0 4 7 6 1 , 0 0 4 7 6 1 , 3 9 6 , 5 4 9 3 0 3 , 2 0 8 3 0 3 , 2 0 8 0 0 0 , 3 9 0 0 0 , 3 9 0 0 0 , 3 9 4 8 3 , 9 0 5 2 0 7 , 6 8 4 2 0 7 , 6 8 4 0 0 0 , 0 6 0 0 0 , 0 6 0 0 0 , 0 8 1 0 6 1 , 1 7 5 0 0 0 , 0 6 3 0 0 0 , 0 6 3 8 2 1 , 9 7 8 2 1 , 6 7 8 2 1 , 6 7 , 2 5 5 6 4 0 1 , , 1 9 7 9 1 0 1 , , 1 9 7 9 1 0 1 , t l u s e r a s a i g n s i r a s e r a h s f o r e b m u n l a t o T i d e s c r e x e s n o i t p O d e t s e v s n o i t p O . ) 5 4 0 9 1 ` ( e u a V l ) - / 8 8 1 ` ( ) - / 0 9 1 ` ( ) - / 6 7 3 ` ( ) - / 4 8 2 ` ( l e u a V r i a F o t r i a F o t % 5 9 l e u a V r i a F o t l e u a V r i a F o t l e u a V r i a F o t l e u a V r i a F o t l e u a V r i a F ) - / 5 7 1 ` ( e u a v l r i a F o t e u a v l r i a F ) - / 5 7 1 ` ( ) - / 5 7 1 ` ( f o t n u o c s D i t n u o c s D i f o t n u o c s D i f o t n u o c s D i f o t n u o c s D i f o t n u o c s D i o t t n u o c s D i f o t n u o c s D i m o r f i g n g n a r m o r f i g n g n a r % 5 9 x o r p p a x o r p p a f o % 5 9 x o r p p a % 5 9 x o r p p a % 8 9 x o r p p a % 4 9 x o r p p a l e u a V r i a F o t % 5 1 . 7 5 % 0 5 o t % 0 2 o t % 0 5 o t l i N a t A a t A a t A a t A a t A a t A l i N t A a t A t n u o c s D a t i A t n u o c s D a t i A l e u a V r i a F o t t n u o c s D i e m e h c S n o i t p O k c o t S e e y o p m E s o r E l r a e y e h t g n i r u d d e t n a r G s n o i t p O , ) J & I n m u o c l r e f e r ( 8 1 0 2 - 7 1 0 2 7 1 0 2 r a e y e h t g n i r u d d e t n a r G s n o i t p O r a e y e h t g n i r u d d e t n a r G s n o i t p O , ) E n m u o c l r e f e r ( 5 1 0 2 - 4 1 0 2 , ) F n m u o c l r e f e r ( 5 1 0 2 - 4 1 0 2 r a e y e h t g n i r u d d e t n a r G s n o i t p O , ) G n m u o c l r e f e r ( 6 1 0 2 - 5 1 0 2 r a e y e h t g n i r u d d e t n a r G s n o i t p O , ) H n m u o c l r e f e r ( 7 1 0 2 - 6 1 0 2 l a u m r o F g n c i r P i ) b ( ) c ( ) d ( ) e ( , 0 4 7 1 3 7 1 , - 7 9 7 7 0 3 , 6 4 7 8 0 1 , 7 5 5 , 4 5 1 0 0 0 , 6 4 9 5 2 , 6 6 0 0 0 , 0 2 1 0 6 1 , 1 1 2 0 0 5 , 7 1 2 7 9 0 7 , s n o i t p o f i o e s c r e x e f o ) 1 2 0 2 h c r a M 1 3 t a s a ( d e s p a l s n o i t p O ) f ( , ) D n m u o c l r e f e r ( 4 1 0 2 - 3 1 0 2 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | l a t o T ) J ( ) I ( ) H ( ) G ( ) F ( ) E ( ) D ( ) C ( ) B ( ) A ( k c o t S e e y o p m E s o r E l 7 1 0 2 e m e h c S n o i t p O k c o t S e e y o p m E s o r E l 9 0 0 2 e m e h c S n o i t p O 7 1 0 2 r e b m e t p e S 7 2 i d a p d e u s s i e h t f o % 5 l a t i p a c e r a h s p u e t a D t n a r g n o s a l a t i p a c e r a h s p u d a p d e u s s i i e h t f o % 5 d e v o r p p a s n o i t p o f o r e b m u n l a t o T e t a D t n a r g n o s a e m e h c S e h t r e d n u 9 0 0 2 r e b m e c e D 4 l a v o r p p A s r e d o h e r a h S l f o e t a D 8 1 - b e F - 8 7 1 - v o N - 4 1 7 1 - b e F - 0 1 6 1 - b e F - 9 5 1 - b e F - 2 1 4 1 - v o N - 2 1 3 1 - t c O - 4 1 2 1 - l u J - 1 0 1 - g u A - 2 1 9 0 - c e D - 7 1 s e t a d t n a r G l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A P O S E f o e u a v l P O S E f o e u a v l t o N t o N t o N t o N t o N t o N t o N t o N t e k r a M r i a F t e k r a M r i a F s n o i t p o s m r e t f o n o i t a i r a V ) g ( e m e h c s 9 0 0 2 e m e h c s 9 0 0 2 m o r f d e s v e r i s i m o r f d e s v e r i s i 5 7 1 ` o t 0 0 2 ` 5 7 1 ` o t 0 0 2 ` , 2 0 9 7 6 5 2 0 2 , 0 4 2 8 1 4 , , 7 6 0 3 1 5 4 , , 0 0 0 4 7 6 1 , 0 9 0 , 3 1 0 , 8 0 0 0 , 0 3 9 0 2 0 , 7 6 8 , 4 0 0 0 , 0 0 0 , 9 0 0 0 , 0 0 0 , 7 2 0 0 6 , 9 0 6 , 6 0 1 0 2 l a t s o P e d w i 1 2 t d t o l l a B r e b m e c e D l a t s o P e d w i 0 1 0 2 t d t o l l a B r e b m e c e D 1 2 , 5 8 8 2 4 5 9 3 1 , s n o i t p o f o i e s c r e x e y b d e z i l a e r y e n o M ) h ( ) 1 2 0 2 h c r a M 1 3 o p u ( t , 3 2 9 9 9 1 , - 3 9 6 4 6 , 1 8 0 6 , 9 4 1 , 9 - - 0 0 0 , 0 2 1 - - - 1 3 t a s a ( e c r o f n i s n o i t p o f o r e b m u n l a t o T ) I ( t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D t o N w o e b l d e l i a t e D w o e b l d e l i a t e D d e t n a r g s n o i t p o f o s l i a t e d e s w i e e y o p m E l ) j ( ) 1 2 0 2 h c r a M % 5 n a h t e r o m m o h w o t s e e y o p m E l r a e y e h t g n i r u d d e t n a r g s n o i t p o t n e m e g a n a M i r o n e S o t % 1 n a h t e r o m s n o i t p o m o h w o t s e e y o p m E l 1 2 3 l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A l e b a c i l p p A r a e y e h t g n i r u d d e t n a r g l a t i p a c d e u s s i f o . n o i t u l i d o n s i e r e h T I . L N ` e i y b r e w o l , e r a h s r e p 0 1 ) 8 4 . 1 2 1 ( ` e b l l i w S P E d e t u l i d e h T n o s e r a h s f o e u s s i o t , t n a u s r u p S P E d e t u l i D ) k ( s n o i t p o f i o e s c r e x e d o h t e m e u a v l i c s n i r t n i n o d e s a b s i n o l i t a u c a C l e e y o p m e l f o n o l i t a u c a c l f o d o h t e M ) l ( . 5 4 0 9 1 . 0 6 0 0 2 . 0 0 8 8 1 5 9 . 9 8 1 0 2 . 6 7 3 5 3 . 2 8 2 - 0 0 . 0 0 1 8 1 . 8 8 9 0 8 2 . ) ` n i ( e r a h s l r e p e u a V c s n i r t s n i I t s o c n o i t a s n e p m o c . e u a v l r i a f i i g n s u d e z n g n o c e r n e e b s a h t s o C d n a e v o b a e h t n e e w t e b e c n e r e f f i D l l a h s t a h t t s o c n o i t a s n e p m o c e e y o p m e l e h t d e s u d a h t i f i i d e z n g o c e r n e e b e v a h s n o i t p o e h t f o e u a v l r i a f 1 2 3 0 0 0 1 . 0 0 0 1 . 0 0 0 1 . 0 0 . 0 1 0 0 . 0 1 0 0 . 0 1 0 0 . 0 5 1 0 0 . 5 7 4 1 . 1 9 . 2 4 8 1 1 ) ` n i ( e c i r p e s c r e x e i e g a r e v a d e t h g e W i ) m ( l . e b a c i l p p A t o N n o d n a s t i f o r P n o e c n e r e f f i d s h t i f o t c a p m I 4 y n a p m o C e h t f o S P E 1 EROS INTERNATIONAL MEDIA LIMITED 13 DIRECTORS’ REPORT l a t o T ) J ( ) I ( ) H ( ) G ( ) F ( ) E ( ) D ( ) C ( ) B ( ) A ( k c o t S e e y o p m E s o r E l 7 1 0 2 e m e h c S n o i t p O k c o t S e e y o p m E s o r E l 9 0 0 2 e m e h c S n o i t p O 7 1 0 2 r e b m e t p e S 7 2 i d a p d e u s s i e h t f o % 5 l a t i p a c e r a h s p u e t a D t n a r g n o s a l a t i p a c e r a h s p u d a p d e u s s i i e h t f o % 5 d e v o r p p a s n o i t p o f o r e b m u n l a t o T e t a D t n a r g n o s a e m e h c S e h t r e d n u 9 0 0 2 r e b m e c e D 4 l a v o r p p A s r e d o h e r a h S l f o e t a D 8 1 - b e F - 8 7 1 - v o N - 4 1 7 1 - b e F - 0 1 6 1 - b e F - 9 5 1 - b e F - 2 1 4 1 - v o N - 2 1 3 1 - t c O - 4 1 2 1 - l u J - 1 0 1 - g u A - 2 1 9 0 - c e D - 7 1 s e t a d t n a r G 8 2 . 3 8 1 8 2 . 3 9 1 7 3 . 9 7 1 9 1 . 9 8 1 9 6 . 9 7 3 7 0 . 4 8 2 9 4 . 5 5 9 1 . 2 2 1 5 2 . 5 9 4 6 . 4 1 1 s n o i t p o f o e u a v l r i a f e g a r e v a d e t h g e W i 2 14 ANNUAL REPORT 2020-21 0 3 2 3 1 , , 3 5 0 2 3 1 , I L N I L N 0 3 2 4 2 , 4 0 1 7 3 , I L N I L N e c r o f n i s n o i t p O d e s p a L s n o i t p O i d e s c r e c x E n o i t p O d e t n a r G s n o i t p O r a e y e h t g n i r u d ) % 5 n a h t e r o m g n d u c n i ( l i n i e u a v l t e k r a m r i a F ( t n a r g f o e t a d o t r o i r p ) ` n i ( ) g n i t s i l f o e c n e s b a l e n n o s r e P t n e m e g a n a M i r o n e S o t d e t n a r g s n o i t p O j a u h A r a m u K j a u h A u d n a N % 5 1 . 3 5 % 3 5 . 6 5 % 6 6 . 8 4 % 6 4 . 6 4 % 1 1 . 0 4 % 4 8 . 7 3 % 5 3 % 8 3 . 7 % 0 9 . 6 % 1 5 . 6 % 9 5 . 7 % 4 7 . 7 % 0 5 . 8 % 7 5 . 8 % 6 3 . 8 % 0 5 . 6 % 0 3 . 6 s r a e y 5 . 4 s r a e y 5 . 4 s r a e y 5 . 3 s r a e y 5 . 5 - 5 . 3 s r a e y 5 . 4 - 0 . 3 s r a e y 5 . 6 - 5 . 3 s r a e y 5 . 4 s r a e y 5 . 5 s r a e y 5 2 . 5 s r a e y 5 2 . 5 d e t h g e w i i g n d u c n l i s n o i t p o f o e u a v l r i a f e g a r e v a e t a r t s e r e t n i e e r f k s R i e f i l d e t c e p x E e t a m i t s e o t d e s u s n o i t p m u s s a t n a c i f i i g S ) ` n i ( l l y g o o d o h t e m s e o h c S k c a B n o d e s a b l l i N 5 . 0 9 1 l i N l i N l i N 5 7 . 0 0 2 5 8 . 9 9 1 5 9 . 9 9 1 l i N 3 . 6 8 3 l i N l i N 5 4 . 1 9 2 5 7 . 4 4 1 5 6 . 8 6 1 % 4 4 l i N % 0 6 l i N 5 7 1 % 5 7 l i N 5 7 1 r o t i t e p m o c n i d e s a b ( y t i l i t a o v l d e t c e p x E ) y t i l a t a o v l i s e n a p m o c e t a d a n o e r a h s f o e c i r p t e k r a m i g n s o C l i i s d n e d v d d e t c e p x E ) n ( 1 2 3 4 5 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | s h k a l n i ` f o % d e s o p o r P t fi o r P i n o s i v o r P t fi o r P r e v o n r u T - t s e v n I l a t o T l a t o T r e h t O - e r a h S d n e d i v i D r e t f a r o f e r o f e b s t n e m s t e s s A s e i t i l i b a L i s e i t i l i b a L i & s e v r e s e R l s u p r u S e r a h S l a t i p a C y c n e r r u c g n i t r o p e R g n i t r o p e R i e c n s e t a D s a e t a r e g n a h c x E d n a e h t r o f d o i r e p s a w y r a d s b u S i i i i y r a d s b u S f o e m a N r S o N s e r u t n e v i i t n o j / s e n a p m o c e t a c o s s a / s e i r a d s b u s i i i ) 4 1 0 2 l , s e u R ) s t n u o c c A ( i s e n a p m o C l f o 5 e u R h t i w d a e r 3 1 0 2 i , t c A s e n a p m o C f o 9 2 1 n o i t c e S f o ) 3 ( n o i t c e s - b u s o t o s i v o r p t s r fi o t t n a u s r u P ( B e r u x e n n A I - C O A m r o F f o t n e m e t a t s l i a c n a n fi e h t f o s e r u t a e f t n e i l i a s g n n a t n o c i t n e m e t a t S i s e i r a d s b u S i : ” A “ t r a P i g n d o h l n o i t a x a T n o i t a x a T n o i t a x a T e h t f o e t a d t s a l e h t n o i y r a d s b u s i d e r i u q c a r a e y l i i a c n a n F t n a v e e r l f i , d e n r e c n o c i n g e r o f f o e s a c e h t n i m o r f t n e r e f f i d i s e i r a d s b u S i i l g n d o h e h t % 0 0 . 0 0 1 l i N 1 8 . 7 9 8 8 . 9 0 2 9 6 . 7 0 3 0 5 . 0 8 4 , 1 7 0 . 0 7 1 . 2 5 9 , 9 7 1 . 2 5 9 , 9 7 6 . 2 3 0 , 8 ) 0 5 . 0 8 ( 0 0 . 0 0 0 , 2 0 0 . 1 R N I 1 2 0 2 h c r a M 1 3 7 9 9 1 h c r a M 1 3 s m F l i l a n o i t a n r e t n I s o r E d e t i m L i e t a v i r P R N I o t f o e t a R e g n a h c x E y c n e r r u C ’ s y n a p m o C g n i t r o p e r d o i r e p % 0 0 . 0 0 1 % 0 0 . 4 6 l i N l i N 3 5 . 7 9 5 ) 0 1 . 8 3 ( 9 4 . 7 3 ) 0 6 . 0 ( - - 3 5 . 7 9 5 4 5 . 4 5 6 , 5 % 0 0 . 0 0 1 l i N 9 8 . 0 1 ) 0 7 . 1 ( 0 2 . 9 4 4 . 1 1 % 0 0 . 0 0 1 l i N 5 6 . 3 8 3 . 0 3 0 . 4 0 3 . 6 % 0 0 . 0 0 1 % 0 0 . 0 5 l i N l i N % 0 0 . 0 0 1 l i N ) 8 5 . 0 ( ) 0 5 . 9 5 0 , 1 ( - - ) 8 5 . 0 ( ) 0 5 . 5 7 0 , 1 ( - - ) 5 9 . 3 9 ( 6 3 . 2 1 ) 7 0 . 3 0 1 ( 4 7 . 9 1 0 , 1 - - - - - - - - 4 6 . 9 5 1 4 6 . 9 5 1 9 3 . 3 0 0 , 9 8 9 3 . 3 0 0 , 9 8 5 6 . 2 3 5 3 4 . 0 2 1 1 2 . 8 3 9 7 . 5 2 4 , 8 8 5 9 . 4 4 0 0 . 1 5 1 . 8 5 5 1 . 8 5 2 0 . 1 3 1 . 6 5 9 6 . 1 9 6 . 1 0 8 . 6 1 ) 1 1 . 6 1 ( 0 2 . 0 0 2 . 0 9 7 . 2 ) 9 5 . 3 ( 8 2 . 6 7 0 , 2 8 2 . 6 7 0 , 2 9 2 . 8 9 8 , 2 ) 6 0 . 2 2 8 ( 5 6 . 4 1 3 , 3 2 5 6 . 4 1 3 , 3 2 2 2 . 5 3 7 , 0 2 3 4 . 8 7 5 , 2 0 0 . 1 0 0 . 1 0 0 . 1 4 0 . 0 0 0 . 1 7 1 . 3 7 0 0 . 1 0 0 . 1 0 0 . 1 0 0 . 1 7 1 . 3 7 0 0 . 1 D S U R N I R N I R N I R N I D S U R N I 1 2 0 2 h c r a M 1 3 9 9 9 1 y r a u r b e F 1 1 1 2 0 2 h c r a M 1 3 7 0 0 2 y r a u n a J 7 1 1 2 0 2 h c r a M 1 3 7 0 0 2 r e b o t c O 1 3 1 2 0 2 h c r a M 1 3 9 0 0 2 h c r a M 5 2 1 2 0 2 h c r a M 1 3 9 0 0 2 y r a u n a J 2 0 e t a v i r P i t n e m n a t r e t n E n e e r c s g B i d e t i m L i i s o d u t S e b u q e y E d e t i m L i e t a v i r P g n h s i i l b u P M E d e t i m L i e t a v i r P n o i i t a m n A s o r E d e t i m L i e t a v i r P d e t i m L i l e a s p o C 1 2 0 2 h c r a M 1 3 2 1 0 2 h c r a M 0 3 d t L e t P e n c g D i i i 1 2 0 2 h c r a M 1 3 4 1 0 2 y a M 3 2 e t a v i r P s n o i t c u d o r P w o l l e Y r u o o C l d e t i m L i % 0 0 . 0 0 1 l i N ) 9 9 . 6 6 5 ( ) 4 3 . 0 1 5 ( ) 3 3 . 7 7 0 , 1 ( 8 8 . 7 3 8 9 9 . 0 4 6 , 4 9 9 . 0 4 6 , 4 6 4 . 5 6 2 , 5 ) 7 4 . 5 2 6 ( 0 0 . 1 0 0 . 1 R N I 1 2 0 2 h c r a M 1 3 5 1 0 2 t s u g u A 1 0 e t a v i r P w o N s o r E 9 1 2 3 4 5 6 7 8 . s n o i t a r e p o e h t d e c n e m m o c t e y t o n s a h 5 1 0 2 r e b m e c e D 1 1 n o d e t a r o p r o c n i y n a p m o C e h t f i i o y r a d s b u s P, L L n o i t u b i r t c s D i l a n o i t a n r e t n I s o r E ) 1 : e t o N s a n w o n k y l r e m r o f ( r e w o P l a s r e v n U i e t a v i r P s m e t s y S ) d e t i m L i d e t i m L i . 0 2 0 2 t s u g u A 1 n o P L L d a s i f o e m a n e h t f f o g n k i r t s i r o f n o i t a c i l p p a n a d e l i f s a h y n a p m o C e h t f i i o y r a d s b u s P, L L s n o i t c u d o r P s o r E e c n a i l e R ) 2 s e r u t n e V t n o J d n a i i s e t a c o s s A : ” B “ t r a P l e b a c i l p p A t o N EROS INTERNATIONAL MEDIA LIMITED 15 DIRECTORS’ REPORT 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 2020-21 is as follows: Name of Director/KMP Mr. Sunil Arjan Lulla Mr. Dhirendra Swarup Mr. Rakesh Sood Mr. Sunil Srivastav Ms. Bindu Saxena Mr. Pradeep Dwivedi Mr. Farokh Gandhi Mr. Vijay Thaker Total remuneration (Amount in ` ) Ratio of remuneration of director to the Median remuneration 5,20,85,724 7,20,000 3,20,000 6,00,000 4,40,000 2,15,00,000 79,18,560 36,00,000 98.68 1.36 0.61 1.14 0.83 40.73 15.00 6.82 Notes : 1. The above information is on standalone basis 2. The aforesaid details are calculated on the basis of remuneration for the financial year 2020-21. 3. The remuneration to Directors includes sitting fees paid to them for the financial year 2020-2021 B. Percentage increase/(decrease) in remuneration of each Director, Chief Financial Officer and Company Secretary in the financial year 2020-21 are as follows: Name of Director Designation Mr. Dhirendra Swarup Non Executive Independent Director Remuneration (in `) 2020-21 2019-20 7,20,000 7,20,000 Mr. Sunil Arjan Lulla Executive Vice Chairman & Managing Director 5,20,85,724 5,26,85,724 Mr. Sunil Srivastav Non Executive Independent Director 6,00,000 3,60,000 Increase/ (Decrease) in % - (1.14) 66.67 Ms. Bindu Saxena Non Executive Independent Director 4,00,000 80,000 Refer Note No. 2 Mr. S. Lakshminarayanan Non Executive Independent Director - 4,00,000 Refer Note No. 3 Mr. Rakesh Sood Non Executive Independent Director 3,20,000 7,20,000 Refer Note No. 4 Mr. Pradeep Dwivedi Chief Executive Officer Mr. Farokh P Gandhi Chief Financial Officer 2,15,00,000 37,18,068 Refer Note No. 5 79,18,560 79,18,560 - Mr. Vijay Thaker VP - Company Secretary & Compliance Officer 36,00,000 21,60,542 Refer Note No. 6 Note: 1 2 3 4 5 6 No Commission was paid to Non-Executive Independent Directors for the financial year 2020-21 due to loss. Ms. Bindu Saxena was appointed as Non-Executive Additional Independent Director w.e.f 26 September 2019. Mr. S. Lakshminarayanan ceased to be Non-Executive Independent Director of the Company w.e.f 20 June 2020. Mr. Rakesh Sood ceased to be Non-Executive Independent Director of the Company w.e.f 6 October 2020. Mr. Pradeep Dwivedi was appointed as Chief Executive Officer (India) w.e.f 10 February 2020. Mr. Vijay Thaker was appointed as VP - Company Secretary & Compliance Officer w.e.f. 13 August 2019. C. Percentage decrease in the median remuneration of employees in the financial year 2020-21: Particulars Median Remuneration of all employees per annum 2020-21 Amt in ` 527,850 2019-20 Amt in ` 661,896 % Change (25.39) D. Number of permanent employees on the rolls of the Company as on 31 March 2021 : As on 31 March 2021, the Company has 191 permanent employees on its payroll, as compared to 277 employees as at 31 March 2020. 16 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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) 2020-21 Amt in ` 1,292,123 2019-20 Amt in ` 1,445,060 % Change (10.58) 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 DIRECTORS’ REPORT Annexure D FORM NO. MR-3 SECRETARIAL AUDIT REPORT [Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014] Secretarial Audit Report For the Financial Year ended 31 March, 2021 st To The Members Eros International Media Limited I 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 me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my 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, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on 31 March, 2021 has 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: st I 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, 2021 according to the provisions of: st (1) The Companies Act, 2013 (the Act) and the rules made thereunder; (2) The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; (3) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (4) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings (External Commercial Borrowing not applicable during the audit period); (5) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'): a. b. c. d. e. f. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; 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 (Not Applicable to Company during the Audit period); The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; 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; The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. I have examined all the other applicable laws to the Company on the basis of the representations made by the Management. I have also examined compliance with the applicable clauses of the following: a) b) 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 Act, Rules, Regulations, Guidelines, Standards, etc. I 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 changes in the composition of the Board of Directors that took place during the period under review were carried out 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 18 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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 the decisions were carried out unanimously by the members of the Board and Committees and the same were duly recorded in the minutes of the meeting of the Board of Directors and Committees of the Company. I further report that there are adequate systems and processes in the company to commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. I further report that there were no instances of: i. ii. Public / Rights / Preferential issue of shares / debentures / sweat equity. Buy-Back of securities. iii. Merger / amalgamation / reconstruction etc. iv. Foreign technical collaborations For SG and Associates Practicing Company Secretaries Suhas Ganpule Proprietor Membership No: 12122 C. P No: 5722 UDIN: A012122C000440761 Date: 10.06.2021 Place: Mumbai Annexure 'A' To The Members Eros International Media Limited Mumbai 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 record. The verification was done on test basis to ensure that the correct facts are reflected in secretarial records. We believe that the practices and processes, 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 management representation about the compliance of laws, rules, regulations, norms and standards and happening of events. 5. 6. 7. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, norms and standards is the responsibility of management. Our examination was limited to the verification of procedure 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. In consideration of the restrictions for physical visit to client office due to spread of Covid-19 pandemic, we have relied on electronic data for verification of certain records as the physical verification was not possible. Date: 10.06.2021 Place: Mumbai For SG and Associates Practicing Company Secretaries Suhas Ganpule Proprietor Membership No: 12122 C. P No: 5722 UDIN: A012122C000440761 EROS INTERNATIONAL MEDIA LIMITED 19 DIRECTORS’ REPORT E e r u x e n n A 1 2 0 2 h c r a M 1 3 d e d n e r a e y l i a c n a n fi e h t r o f 4 1 0 2 l , s e u R ) n o i t a r e n u m e R d n a t n e m t n o p p A ( i i s e n a p m o C l f o 5 e u R r e p s a s e e y o p m E l l f o s r a u c i t r a P f o n o i t a e R l h t i w e e y o p m e l e h t f o s r o t c e r i D y n a p m o C f o % y t i u q E s e r a h S s e r a h S t n e m y o p m e l e e y o p m E l t n e m e c n e m m o c y t i u q E f o . o N t s a L f o e g A f o e t a D e c n e i r e p x E h c u s y b d e h l e e y o p m e l t n e m y o p m e f o l y n a p m o C e h t h t i w n o i t a c fi i l a u Q ) ` n i ( n o i t a r e n u m e R n o i t a n g s e D i e e y o p m E l f o e m a N r. S . o N 20 ANNUAL REPORT 2020-21 n a j r A e r o h s K i a l l u L - - - f o r e h t o r B % 0 0 . 0 0 0 4 , 1 . r M % 8 0 . 0 0 0 0 , 9 7 a l l u L n a j r A l i n u S . r M f o e f i W % 0 0 . 0 0 0 4 , 1 - - - - - % 0 0 . 0 3 4 % 0 0 . 0 % 0 0 . 0 % 0 0 . 0 % 0 0 . 0 0 0 0 0 l i y m a F & d n u F i t n e d v o r P o t n o i t u b i r t n o C y r o t u t a t S , i g n n o i j e r o f e b y n a p m o C e h t - - d e t i m L i s e r u t c P i - - p u o r G % 5 0 . 0 7 8 7 , 1 5 n o i t o M i j l a a B s r a e Y 7 5 9 0 - n a J - 7 2 + s r y 7 3 % 0 0 . 0 0 i a d e M l a k a S s r a e Y 0 5 0 2 - n a J - 7 2 s r y 7 2 A B M , . c S B . 0 0 0 , 0 0 , 5 1 , 2 e v i t u c e x E i f e h C k r o w t e N y n o S s r a e Y 3 4 0 2 - n a J - 5 1 s r a e Y 8 1 s r a e Y 2 5 8 1 - r a M - 9 s r y 8 2 s r a e Y 9 4 5 1 - n a J - 1 s r y 9 f l o r o e h c a B 0 0 2 , 5 6 0 , 8 r e c u d o r P e v i t a e r C a l l u L a k h s i r i K . s M f l o r o e h c a B e c r e m m o C 0 4 8 , 9 3 7 , 8 i a d n I - i t n e d s e r P l a c i r t a e h T i e c V r o n e S i i a d n I - r e c i f f O j a u h A u d n a N . r M p e e d a r P . r M i d e v w D i s t r A d e r e t r a h C t n a t n u o c c A f o r e t s a M ) M L L ( w a L 0 6 5 , 8 1 9 , 7 l i a c n a n F i i f e h C r e c i f f O h k o r a F . r M i h d n a G 4 0 0 , 6 4 , 4 6 - l a g e L d a e H l a t i i g D s o r E p u r a w h s B i . r M i t r a b a r k a h C s r a e Y 2 4 9 9 - r p A - 2 2 + s r y 1 2 C J Y S e c r e m m o C 0 8 2 , 6 6 , 1 9 , 3 g n i t a r e p O i f e h C j a u h A r a m u K . r M r e c i f f O s r a e Y 7 5 4 9 - g u A - 9 1 + s r y 8 2 f l o r o e h c a B e c r e m m o C 4 2 7 , 5 8 , 0 2 , 5 i e c V e v i t u c e x E & n a m r i a h C i g n g a n a M r o t c e r i D n a j r A l i n u S . r M 1 a l l u L r a t S y e n s D i s r a e Y 4 4 0 2 - e n u J - 1 1 s r a e Y 0 2 m o c B Y. S . 0 0 0 , 0 3 , 6 3 , 1 g n i t a r e p O i f e h C x i l f t e N s r a e Y 0 5 0 2 - g u A - 4 s r a e Y 1 2 f l o r o e h c a B e c r e m m o C 7 8 5 , 5 9 , 6 5 i s o d u t S s o r E - r e c i f f o - s n o i t c u d o r P i s o d u t S s o r E f o d a e H a h k h S i . s M 4 r u p a K h s e g o Y . r M 4 a i t a v e T i i n o s s m m o C , 1 6 9 1 , t c A x a T e m o c n I e h t r e d n u s e u r e h t l l r e p s a d e u a v s e t i s u q r e p i f l o e u a v y r a t e n o m , s e c n a w o l l A y r a a S l f o s e s i r p m o c n o i t a r e n u m e r s s o r G n e r d l i h c t n e d n e p e d d n a e s u o p s r i e h t h t i w g n o a l , y n a p m o C r u o y f o s e r a h s e h t f o % 2 n a h t e r o m d o h e v o b a d e n o l i t n e m s e e y o p m e e h t l f o e n o N . h t n o m r e p e r o m r o - / 0 0 0 0 5 , , 8 ` o t g n i t a g e r g g a n o i t a r e n u m e R f o t i p e c e r n i d n a r a e y a f o t r a p r o f d e y o p m E l i e d s r e h t i e n o e c i t i o n y b d e t a n m r e t e b n a c e c v r e s r i e h t i d n a y n a p m o C e h t f o l l o r y a p n o e r a s e e y o p m e e v o b a e h t l l l A d n u F y t i u t a r G o t s n o i t u b i r t n o c s e d u c x e t u b l , d n u F n o i t a u n n a r e p u S d n a d n u F n o s n e P i 1 2 3 4 i c s u M M X 9 s r a e Y 0 5 0 2 - v o N - 9 s r a e Y 3 2 f l o r o e h c a B e c r e m m o C 9 9 9 , 6 3 , 3 3 d a e H s s e n s u B i i c s u M 4 i n a a w m e H a t t i j a R . s M 0 1 : s e t o N 2 3 4 5 6 7 8 9 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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, Interest Income Revenue Attributable and Reimbursement of expense Not Applicable Not Applicable 23 May 2019 12,134 Not Applicable Not Applicable 23 May 2019 2,652 EROS INTERNATIONAL MEDIA LIMITED 21 DIRECTORS’ REPORT Corporate Social Responsibility Report 1. A brief outline of the Company's CSR policy; including overview of projects or programs proposed to be undertaken and a reference to the weblink to the CSR Policy and projects or programs. Annexure G The Company's CSR vision is to make concerted efforts towards promotion of education amongst the underprivileged and women empowerment. 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 various registered NGO which are engaged in promoting education, promoting and preventive health care, setting up old age homes, sanitation etc. The details of CSR Policy to be uploaded on the website at www.eiml.site. 2. The Composition of the CSR Committee Sr. No. Name of Director Designation/ Nature of Directorship Number of Meetings of CSR Committee held during the year Number of meetings of CSR Committee attended during the year 1 2 3 Mr. Dhirendra Swarup Chairman - Non-Executive Independent Director Mr. Kishore Lulla Mr. Sunil Lulla Executive Director Executive Director 1 1 1 1 0 1 3. 4. 5. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the report). www.eiml.site Not Applicable Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any Sr. No. Financial Year 1 2020-21 Total Amount available for set-off from preceding financial years Amount required to be setoff for the financial year, if any NA 0.00 0.00 6. Average net profit of the company as per section 135(5) (for Immediately preceding three financial years) ` (14,866.75) Lakhs 7. a) Two percent of average net profit of the company as per section 135(5) ` (297.34) Lakhs b) Surplus arising out of the CSR projects or programmes or activiti-es of the previous financial years. c) d) Amount required to be set off for the financial year, if any Total CSR obligation for the financial year (7a+7b-7c). Nil Nil Nil 8. (a) CSR amount spent or unspent for the financial year: Total amount spent for the Financial Year (In `) Total Amount transferred to Unspent CSR Account as per section 135(6) Amount transferred to any fund specified under Schedule VII as per second proviso to section 135(5). Amount Date of transfer Name of the Fund NA Amount Date of transfer ` 17.55 Lakhs 22 ANNUAL REPORT 2020-21 8. Sl. No 8. Sl. No 1 2 3 4 5 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | (b) Details of CSR amount spent against ongoing projects for the financial year: ` in lakhs Name of the Project Item from the list of activities in Schedule VII to the Act Local area (Yes /No) Location of the project Project duration Amount allocated for the project (in `) Amount spent in the current financial Year (in `) State District NA Amount transferred to Unspent CSR Account for the project as per Section 135(6) (in `) Mode of Impleme- ntation- Direct (Yes /No) Mode of Implementation - Through Implementing Agency Name CSR Registration (c) Details of CSR amount spent against other than ongoing projects for the financial year ` in lakhs Name of the Project Item from the list of activities in Schedule VII to the Act Location District (State) Amount spent for the project (in `) Mode of Implementation- Direct (Yes /No) Mode of Implemen- tation - Through Implementing Agency Name CSR Registration Rahkumari Ratnavati Girls School, Education (Covered under clause West Bengal Jaisalmer for the "Gyaan Project" no. (ii) of Schedule VII of the Companies Act, 2013) 1,25,000 Yes Contribution for "Maa Baap Nu Mandir" Setting up old age home Bhayander, (Covered under clause no. (iii) of Maharashtra Schedule VII of the Companies Act, 2013) 3,00,000 Yes Diksha (Developing Initiatives for Knowledge, Social and Humanitarian Activities) Education (Covered under clause no. (ii) of Schedule VII of the Companies Act, 2013) Palam Vihar, Gurgaon 3,00,000 Yes Viva College of Diploma Engineering & Technology at Bolinj Prevention of child sexual abuse 6 Mukul Madhav Foundation, Pune Education (Covered under clause no. (ii) of Schedule VII of the Companies Act, 2013) Promoting gender equality (Covered under clause no. (iii) of Schedule VII of the Companies Act, 2013) Eradicating hunger & poverty (Covered under clause no. (i) of Schedule VII of the Companies Act, 2013) Bolinj, Virar (West) Goregaon, Mumbai 30,000 Yes 5,00,000 Yes Pune, Maharashtra 5,00,000 Yes Total 17,55,000 (d) Amount spent in Administrative Overheads - Nil (e) Amount spent on Impact Assessment, if applicable - Not Applicable (f) Total amount spent for the Financial Year (8b+8c+8d+8e) - ` 17.55 Lakhs (g) Excess amount for set off, if any - ` 17.55 Lakhs Sr. No. Particular (i) (ii) (iii) (iv) (v) Two percent of average net profit/loss of the company as per Section 135(5) Total amount spent for the Financial Year Excess amount spent for the financial year [(ii)-(i)] Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any Amount available for set off in succeeding financial years [(iii)-(iv)] NA NA NA NA NA NA Amount (` In Lakhs) (297.34) 17.55 17.55 NA 17.55 EROS INTERNATIONAL MEDIA LIMITED 23 DIRECTORS’ REPORT 9. Sl. No 9. Sl. No (a) Details of Unspent CSR amount for the preceding three financial years: Preceding Financial Year Amount transferred to Unspent CSR Account under section 135 (6) (in `) Amount spent in the reporting Financial Year (in `) Amount transferred to any fund specified under Schedule VII as per section 135(6), if any Amount remaining to be spent in succeeding financial years. (in `) Not applicable (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): Project Id. Name of the Project Financial Year in which the project was commenced Project duration Total amount allocated for the project (in `) Amount spent on the project in the reporting Financial Year (in `) Cumulative amount spent at the end of reporting Financial Year (in `) Status of the project Completed / Ongoing Not applicable 10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year - Not applicable (asset-wise details) a) b) c) d) Date of acquisition of the capital asset(s): N.A. Amount of CSR spent for creation or acquisition of capital assets: N.A. Details of the entity or public authority or beneficiary under whose name such capital assets is registered, their address etc.: N.A. Provide details of the capital assets(s) created or acquired (including complete address and location of the capital assets): N.A. 11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5) - Not applicable For and on behalf of the Board Sunil Arjan Lulla Executive Vice Chairman & Managing Director DIN: 00243191 Dhirendra Swarup Chairman of CSR Committee DIN: 02878434 Place: Mumbai Date: 14 August 2021 24 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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 share- holders, 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 2021, the Board of Directors of the Company consists of Six (6) Directors, out of which Three (3) are Non-Executive Independent Directors including an Independent Woman Director and Three (3) are Executive Directors, comprising of experts from various fields/professions. The Chairman of the Board, Mr. Dhirendra Swarup, is a Non-Executive & 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. Sunil Arjan Lulla 00243191 Promoter & Executive Director Executive Vice Chairman & Managing Director Mr. Kishore Arjan Lulla 02303295 Promoter & Executive Director Ms. Bindu Saxena 1 Mr. Sunil Srivastav 00167802 Non-Executive & Independent Director 00237561 Non-Executive & Independent Director 2 Mr. Farokh P. Gandhi 03112612 Executive Director Director 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.eiml.site. 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 25 February 2021, 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 whole, timely payment of statutory dues such as taxes, debt payments and business commitments, review of the performance of the Chairman, assessing 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. Appointment/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 th liable to retire by rotation at the 27 Annual General Meeting of the Company, as per Section 152(6) of the Act and applicable Rules thereto. Mr. Pradeep Dwivedi Chief Executive Officer was appointed as Executive Additional Director on the Board of the Company with effect from 14 August 2021 to hold office up to the date of the ensuing Annual General Meeting of the Company. The said proposal has been recommended for approval of the shareholders. Your directors recommend his appointment for your approval. 1 Mr. Sunil Srivastav ceased to be a Non-Executive Independent Director of the Company 2 Mr. Farokh P. Gandhi ceased to be Executive Director & Chief Financial Officer of the Company with effect from 14 August 2021. 14 August 2021. with effect from EROS INTERNATIONAL MEDIA LIMITED 25 CORPORATE GOVERNANCE REPORT 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 2021 are as follows: Name of the Director Directors Identification No. (DIN) Attendance Board Meeting Last Annual General Meeting Mr. Dhirendra Swarup Mr. Sunil Arjan Lulla Mr. Kishore Arjan Lulla Ms. Bindu Saxena Mr. Sunil Srivastav 4 Mr. Farokh P. Gandhi 5 Mr. Rakesh Sood 3 02878434 00243191 02303295 00167802 00237561 03112612 07170411 4 4 1 4 4 2 2 Yes Yes No Yes Yes Yes NA Position on the Board of other companies as on 31 March 2021 Committee Membership ** Committee Chairmanship** Directorship* 1 7 0 2 6 0 -- 1 1 0 1 2 0 -- 0 0 0 0 1 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. 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. Further, the Managing Director and the Executive Director do not serve as Independent Directors in any listed company. Necessary disclosures regarding directorships and committee positions in other public companies as on 31 March 2021 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 2021, i.e. on 30 July 2020; 11 September 2020; 09 November 2020; and 11 February 2021. The maximum time gap between Two (2) meetings of the Board did not exceed One Hundred and Twenty (120) days or any extended date as may be permitted by SEBI due to COVID-19. 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 2021 were as under: Name of the Directors Name of the Listed Company Category of Directorship Mr. Sunil Srivastav Ms. Bindu Saxena Star Paper Mills Limited Paisalo Digital Limited Solar Industries India Limited SIS Limited Inox Wind Limited Indag Rubber Limited Non-Executive - Independent Director Non-Executive - Independent Director Non-Executive - Independent Director Non-Executive - Independent Director Non-Executive - Independent Director Non-Executive - Independent Director None of the Directors except above are directors in listed entities. Mr. Sunil Srivastav ceased to be Non-Executive Independent Director of the Company w.e.f. 14 August 2021. 3 4 Mr. Farokh P. Gandhi ceased to be Executive Director & Chief Financial Officer of the Company with effect from 14 August 2021. 5 Mr. Rakesh Sood ceased to be Non-Executive Independent Director of the Company w.e.f 6 October 2020. 26 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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 2021, None of the Non-Executive Directors holds any equity shares in the Company. h. Familiarisation Programme for Independent Directors: 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.eiml.site. 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 them to effectively contribute in deliberations at Board and Committee Meetings. The following is the list of core skills / competencies identified by the Board of Directors as required in the context of the Company's business and that the said skills are available within the Board Members. Business Leadership Financial Expertise Risk Management Corporate Governance Leadership experience including in areas of business development, strategic planning, succession planning, and long-term growth and guiding the Company and its senior management towards its vision and values. Knowledge and skills in accounting, finance, treasury management, tax and financial large corporations with management of understanding of capital allocation, funding and financial reporting processes Ability to understand and asses the key risks to the organization, legal compliances and ensure that appropriate policies and proced- ures are in place to effectively manage risk Experience in implementing good corporate governance practices, reviewing compliance and governance practices for a sustainable growth of the company and protecting stakeholders interest. In the table below, the specific areas of focus or expertise of individual board members have been highlighted. Name of the Directors Areas of Skills/ Expertise Business Leadership Financial Expertise Risk Management Corporate Governance Mr. Dhirendra Swarup Mr. Sunil Arjan Lulla Mr. Kishore Arjan Lulla Ms. Bindu Saxena Mr. Sunil Srivastav Mr. Farokh Gandhi 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 Note - Each Director may possess varied combinations of skills/ expertise within the described set of parameters and it is not necessary that all Directors possess all skills/ expertise listed therein. COMMITTEES OF THE BOARD 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 2021, 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.eiml.site. Meeting Details: During the year under review, Audit Committee met Four (4) times in a year viz. on 29 July 2020; 11 September 2020; 09 November 2020 and 11 February 2021. The maximum time gap between Two (2) meetings of the Committee did not exceed One Hundred and Twenty (120) days or any extended date as may be permitted by SEBI due to COVID-19. The necessary quorum was present for all the Meetings. EROS INTERNATIONAL MEDIA LIMITED 27 CORPORATE GOVERNANCE REPORT 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. Dhirendra Swarup Mr. Sunil Arjan Lulla Mr. Sunil Srivastav Ms. Bindu Saxena* Mr. Rakesh Sood# 02878434 00243191 00237561 00167802 07170411 Chairman Non-Executive Independent Director Member Member Member Member Executive Vice Chairman & Managing Director Non-Executive Independent Director Non-Executive Independent Director Non-Executive Independent Director 4 4 4 3 1 * Ms. Bindu Saxena was appointed as the Member of the Committee w.e.f. 30 July 2020. # Mr. Rakesh Sood ceased to be Member of the Committee w.e.f. 6 October, 2020. 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 including the representatives of the statutory auditors and internal auditors at its meetings. invites senior executives/management 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.eiml.site. NOMINATION AND REMUNERATION COMMITTEE Meeting Details: 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 2021, 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 During the year under review, Nomination and Remuneration Committee met Four (4) times in a year viz. on 30 July 2020; 11 September 2020; 09 November 2020 and 11 February 2021. 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 Category Number of Meetings attended Ms. Bindu Saxena* Mr. Rakesh Sood* Mr. Dhirendra Swarup Mr. Sunil Srivastav 00167802 07170411 02878434 00237561 Chairperson Non-Executive Independent Director Chairman Non-Executive Independent Director Member Member Non-Executive Independent Director Non-Executive Independent Director 3 2 4 2 * Mr. Rakesh Sood ceased to be Member & Chairman of the Committee w.e.f. 6 October, 2020 and Ms. Bindu Saxena was appointed in his place as the Chairperson of the Committee w.e.f. 9 November 2020. 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, its Committees and Directors: 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 directors and Chairperson) in an independent and fair manner was carried out in accordance with the Company's Board Evaluation Policy for the financial year ended 31 March 2021. 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, for performance evaluation of Committees of the Board included aspects functioning etc. The criteria information and 28 ANNUAL REPORT 2020-21 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 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 and in case of loss remuneration payable in accordance with the provisions of Schedule V of the Act. None of the Non-Executive Independent Directors have any pecuniary relationship with the Company. CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | • • • 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 Independent Director, 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 2020-2021 are as follows: (Amount in `) Name of Directors Salary Sr. No. Benefits/ Perquisites Remuneration (payable for 2020-21) Sitting Fees (paid) Holding of Equity shares/ stock options of the Company as on 31 March 2021 1 Mr. Dhirendra Swarup 2 Mr. Rakesh Sood - - - - 3 Mr. Sunil Arjan Lulla 5,14,46,124 6,39,600 4 Mr. Kishore Arjan Lulla 5 Ms. Bindu Saxena 6 Mr. Sunil Srivastav - - - 7 Mr. Farokh P. Gandhi 79,18,560 - - - - 24,00,000 - - - 12,00,000 12,00,000 - 7,20,000 3,20,000 - - 4,40,000 6,00,000 - Nil Nil 1,400 Equity Shares Nil Nil Nil 43 Equity Shares Note: Remuneration payable to Non-Executive Directors for FY 2020-21 as per Schedule V of the Act shall be subject to the approval of Shareholders by Ordinary Resolution. STAKEHOLDERS RELATIONSHIP COMMITTEE is constituted The Stakeholders Relationship Committee 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 2021, 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.eiml.site. Meeting Details: During the year under review, Stakeholders Relationship Committee met Four (4) times in a year viz. on 30 July 2020; 11 September 2020; 09 November 2020 and 11 February 2021. 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 Srivastav Mr. Dhirendra Swarup Mr. Rakesh Sood* Mr. Sunil Arjan Lulla 00237561 02878434 07170411 00243191 Chairman Non-Executive Independent Director Member Member Member Non-Executive Independent Director Non-Executive Independent Director Executive Vice Chairman & Managing Director 4 4 2 4 * Mr Rakesh Sood ceased to be member of the committee w .e.f. 6 October 2021 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 2020-2021: Description of Investors Grievances received during the year No. of Grievances Total Grievances Pending at the Beginning of Period as on 1 April 2020 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 2021 0 0 0 0 1 1 0 All the Complaints received were promptly resolved and there was no outstanding complaint as on 31 March 2021. EROS INTERNATIONAL MEDIA LIMITED 29 CORPORATE GOVERNANCE REPORT Share Transfer System: CORPORATE SOCIAL RESPONSIBILITY COMMITTEE SEBI has mandated that, effective 1 April 2019, no share can be transferred in physical mode. Hence, the Company has stopped accepting any fresh lodgement of transfer of shares in physical form. The Company had sent communication to the shareholders encouraging them to dematerialise their holding in the Company. Shareholders holding shares in physical form are advised to avail the facility of dematerialisation. Trading in equity shares of the Company is permitted only in dematerialised form. During the year, the Company had obtained, on half-yearly basis, a certificate, from a Company Secretary in Practice, certifying that all certificates have been issued within thirty days of the date of lodgement of the transfer (for cases lodged prior to 1 April 2019), sub- division, consolidation and renewal as required under Regulation 40(9) of the Listing Regulations and filed a copy of the said certificate with the Stock Exchanges. The Corporate Social Responsibility (CSR) Committee is constituted in accordance with Section 135 of the Act and applicable Rules thereto. As on 31 March 2021, the CSR Committee comprised of Four (4) 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 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.eiml.site. Meeting Details: During the year under review, Corporate Social Responsibility Committee met One (1) time in a year viz. on 30 July 2020. 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 Category Number of Meetings attended Mr. Dhirendra Swarup Mr. Kishore Arjan Lulla Mr. Sunil Arjan Lulla Mr. Rakesh Sood 02878434 02303295 00243191 07170411 Chairman Non-Executive Independent Director Member Member Member Executive Director Executive Vice Chairman & Managing Director Non-Executive Independent Director 1 0 1 1 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 2021, 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 Sixteen (16) 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 2017-18 2018-19 2019-20 27 September 2018 at 2:00 P.M. The Club, 197, D. N. Nagar, Andheri West, Mumbai - 400 053 Appointment of Mr. Subramaniam Lakshminarayanan (DIN: 07972480) as an Independent Director of the Company. 25 September 2019 at 2:00 P.M. 15 December 2020 at 3:00 P.M. The Classic Club", New Link Road, Behind Infinity Mall, Andheri West, Mumbai - 400 053 Re-appointment of Mr. Dhirendra Swarup (DIN: 02878434) as an Independent Non-Executive Director to hold office for second term of five consecutive years. Through Video Conferencing/ Other Audio-Visual Means ("VC/OAVM") Facility 1) Approval for waiver of excess remuneration for financial year 2019-20 to Mr. Sunil Lulla, an Executive Vice Chairman & Managing Director of the Company 2) Re-appointment of Mr. Sunil Lulla (DIN: 00243191) as an Executive Vice Chairman & Managing Director of the Company and payment of remuneration. No Extra Ordinary General Meeting of the Shareholders of the Company was held during the financial year 2020-2021. 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 "The Free Press Journal" and "Navshakti" as per the requirements of the SEBI Listing Regulations. The said results are also made available on Company's website at www.eiml.site. 30 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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 Tuesday 28 September 2021 3:00 P.M. Through Video Conferencing ("VC")/Other Audio-Visual Means ("OAVM") Financial Calendar (Tentative) Audited Annual Results of previous year ended 31 March 2021 28 June 2021 st1 quarter results for quarter ending June 2021 14 August 2021 nd2 quarter results for quarter ending September 2021* On or before 14 November 2021 rd3 quarter results for quarter ending December 2021* On or before 14 February 2022 Last quarter results for quarter ending March 2022* On or before 30 May 2023 Financial year Book Closure Dates Listing of equity shares at Stock Exchanges 1 April to 31 March From Tuesday, 21 September 2021 to Tuesday, 28 September 2021 (both days inclusive) 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 Stock Codes ISIN Number BSE - 533261 NSE - EROSMEDIA INE416L01017 Corporate Identification Number (CIN) L99999MH1994PLC080502 *or any extended date as may be permitted by SEBI due to COVID-19. The Annual Listing Fees for the financial year 2021-2022 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 2021-2022 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 2020 to March 2021 are as below: Month April 2020 May 2020 June 2020 July 2020 August 2020 September 2020 October 2020 November 2020 December 2020 January 2021 February 2021 March 2021 High Price (`) BSE Limited (BSE) Low Price (`) 22.86 17.50 20.20 20.90 30.40 23.90 22.35 21.55 25.80 24.55 29.30 33.90 7.97 13.00 15.75 16.60 17.30 19.45 18.35 17.55 20.95 22.00 21.70 24.30 Volume 23,55,317 12,47,857 15,45,846 27,46,129 37,64,972 4,86,482 3,92,425 5,57,070 13,91,088 6,38,524 10,20,793 17,12,296 [Source: This information is compiled from the data available from the website of BSE and NSE] National Stock Exchange of India Limited (NSE) Low Price (`) High Price (`) Volume 22.70 17.45 20.00 20.90 30.25 23.70 22.30 21.60 25.90 24.65 29.00 34.15 8.00 13.10 15.50 16.75 17.60 19.45 18.20 17.75 20.95 22.00 22.05 24.10 1,58,76,213 80,38,277 1,61,38,815 1,76,94,458 3,00,96,042 22,25,046 26,02,995 26,12,596 85,94,274 47,62,023 81,20,416 1,07,64,402 EROS INTERNATIONAL MEDIA LIMITED 31 CORPORATE GOVERNANCE REPORT PERFORMANCE IN COMPARISON TO BROAD BASED INDICES Shareholding pattern as on 31 March 2021 30.00 Particulars No. of Shares % of Shareholding 60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 0.00 16000 14000 12000 10000 8000 6000 4000 2000 0 Apr-20 M ay-20 Jun-20 Jul-20 Aug-20 Sep-20 O ct-20 N ov-20 Dec-20 Jan-21 Feb-21 M ar-21 BSE Sensex Eros Share Price 25.00 20.00 15.00 10.00 5.00 0.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Apr-20 M ay-20 Jun-20 Jul-20 Aug-20 Sep-20 O ct-20 N ov-20 D ec-20 Jan-21 Feb-21 M ar-21 Nifty Eros Share Price REGISTRAR AND SHARE TRANSFER AGENTS Address for Investor Correspondence For any assistance regarding dematerialization of 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: 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 Web: www.linkintime.co.in DISTRIBUTION OF SHAREHOLDING AS ON 31 MARCH 2021 Promoter & Promoter Group FIIs / Foreign Portfolio Investors 5,95,84,302 1,08,33,663 62.15 11.30 N.R.I.s / Non-Domestic Companies / Foreign National 19,27,074 2.01 Banks, Financial Institutions, NBFC Registered with RBI Private Corporate Bodies Individuals / Others IEPF 11,498 3,20,868 2,31,76,054 11,359 0.01 0.34 24.18 0.01 Total Paid Up Capital 9,58,64,818 100.00 PLEDGE OF SHARES 3,67,21,169 Equity Shares have been pledged by Eros Worldwide FZ LLC, Holding Company as on 31 March 2021. DEMATERIALISATION OF SHARES AND LIQUIDITY AS ON 31 MARCH 2021 in The securities of the Company are compulsory traded 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 2021 and the entire promoters holding have been held in the dematerialised as on 31 March 2021. Break up of shares in physical and demat form as on 31 March 2021 is as follows: Physical Segment Demat Segment • NSDL • CDSL Total Number of Shares % of Total number of Shares 123 0.00 7,10,42,868 2,48,21,827 9,58,64,818 74.11 25.89 100.00 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. Shares Holding of Shares No. of Shareholders % to Total OUTSTANDING ADRS/GDRS AND OTHER INSTRUMENTS 46747 3789 2126 749 364 309 519 569 84.730 6.867 3.853 1.357 0.659 0.560 0.940 1.031 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. COMMODITY PRICE RISK OR FOREIGN EXCHANGE RISK AND HEDGING ACTIVITIES The Company does not deal in Commodity and Foreign Exchange and hence the disclosure is not applicable. 55172 100.000 1-5000 5001-10000 10001-20000 20001-30000 30001-40000 40001-50000 50001-100000 100001 and above Total 32 ANNUAL REPORT 2020-21 CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | 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). 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.eiml.site CREDIT RATING During the year under review, following ratings were reviewed by Acuité Ratings & Research Limited, a Credit Rating Agency on the Long-Term and Short-Term bank facility(ies) of the Company. Facilities Rated Ratings as on 1 April 2020 Rating as on 31 March 2021 Long-Term Bank Facilities CARE D Short-Term Bank Facilities CARE D ACUITE B ACUITE B 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 / Vigil Mechanism 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.eiml.site. SUBSIDIARIES As on 31 March 2021, 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. Ms. Bindu Saxena, the Company's Independent Director has been appointed as Independent Director on the Board of Copsale Limited, a material subsidiary company. The Board of Directors of the Company have also formulated a policy for determining 'material' subsidiaries and the same has been uploaded on the website of the Company at www.eiml.site. 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.eiml.site. 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 2020- 2021 have been received by the Company. 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.eiml.site. SECRETARIAL AUDIT S.G & Associates, 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 S.G & Associates 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. 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 EROS INTERNATIONAL MEDIA LIMITED 33 CORPORATE GOVERNANCE REPORT addresses with the RTA, by sending a letter, duly signed by the first/sole holder quoting details of Folio Number. CEO / CFO CERTIFICATION Mr. Pradeep Dwivedi, Chief Executive Officer and Mr. Farokh P. Gandhi, Director & Chief Financial Officer of the Company has provided certification on financial reporting and internal controls to the Board as required under Regulation 17(8) of the SEBI Listing Regulations, copy of which is attached to this Report. The Chief Executive Officer 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 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 separate persons for the post of Chairperson of the Company and Chief Executive Officer. Mr. Dhirendra Swarup act as the Chairperson of the Board whereas Mr. Pradeep Dwivedi is the Chief Executive Officer of the Company. C. Reporting of Internal Auditor The internal control systems of the Company are routinely tested and verified by Internal Audit Department 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 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 last three years, there were no instances of 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. 34 ANNUAL REPORT 2020-21 The Company is fully compliant with the applicable mandatory requirements under SEBI Listing Regulations, relating to Corporate Governance. 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 one audit qualification in the Company's Financial Statements with regards to Internal Financial Control. 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 ` 146 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.eiml.site. 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 2021. 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.eiml.site. All Independent Directors have confirmed to the Company that they have adhered to and complied with the said Code for the financial year ended 31 March 2021. 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 2021. For and on behalf of the Board Eros International Media Limited Sunil Arjan Lulla Executive Vice Chairman & Managing Director DIN: 00243191 Date: 14 August 2021 Place: Mumbai CORPORATE OVERVIEW | MANAGEMENT REPORT FINANCIAL MANAGEMENT | CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS (Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) To, The Members Eros International Media Limited 201, Kailash Plaza Opp Laxmi Industrial Estate Off Andheri Link Road, Andheri (W) Mumbai-400053, Maharashtra We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of M/s Eros International Media Limited having CIN: L99999MH1994PLC080502 and having registered office at 201, Kailash Plaza, Opp Laxmi Industrial Estate, Off. Andheri Link Road, Andheri (W) Mumbai-400053, Maharashtra (hereinafter referred to as 'the Company'), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company and its officers, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31 March, 2021 have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority. st Sr. No. Name of Director 1. 2. 3. 4. 5. 6. Bindu Saxena Sunil Srivastav Sunil Arjan Lulla Kishore Arjan Lulla Dhirendra Swarup Farokh Phiroz Gandhi DIN 00167802 00237561 00243191 02303295 02878434 03112612 Date of appointment in Company 26/09/2019 23/05/2018 19/08/1994 28/09/2009 10/02/2010 09/11/2020 Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate 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. Place: New Delhi Date: 28.06.2021 For MNK and Associates LLP Company Secretaries FRN: L2018DE004900 Mohd Nazim Khan Designated Partner FCS: 6529, CP: 8245 UDIN No.: F006529C000524354 EROS INTERNATIONAL MEDIA LIMITED 35 CORPORATE GOVERNANCE REPORT 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 2021, as stipulated in Regulation 17 to 27, clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C,D and E of Schedule V 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,clauses(b) to (i) of sub-regulation (2) of regulation 46 Para C, D and E of Schedule V and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This report is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. This report is addressed to and provided to the members of the Company solely for the purpose of enabling it to comply with its obligations under the Listing Regulations with reference to compliance with the relevant regulations of Corporate Governance and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. We have no responsibility to update this report for events and circumstances occurring after the date of this report. For SG & Associates Practicing Company Secretaries Suhas S. Ganpule Proprietor ACS No: 12122 CP No.5722 UDIN: A012122C000785268 Date: 14.08.2021 Place: Mumbai 36 ANNUAL REPORT 2020-21 Standalone Financial Statements STANDALONE FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT To the Members of Material Uncertainty related to Going Concern 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 March 31, 2021, the Statement of Profit and Loss, including Other Comprehensive Income, Statement of changes in Equity and the Cash Flow Statement for the year then ended, and notes to the financial statements including a summary of significant accounting policies and other explanatory information. 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 March 31, 2021, its loss including other comprehensive income, the changes in equity and its cash flows for the year ended on that date. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in 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. As stated in Note No.52 of the standalone financial statements, the economic uncertainty created by the novel coronavirus has resulted in significant business disruptions for film distributer and broadcasting companies. These conditions, along with other matter as set forth in the aforesaid note, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this above matter. Emphasis of Matter We draw attention to Note No. 51(a) of the standalone financial statements, which describes the Company's management evaluation of Covid 19 impact on the future business operations and future cash flows of the Company and it's consequential effects on the carrying value of assets as on March 31, 2021. In view of uncertain economic conditions, the Company's management's evaluation of impact on subsequent periods is highly dependent upon conditions as they evolve. Our opinion is not modified in respect of this matter. 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. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors' responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements:- 38 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Key Audit Matters Response to Key Audit Matters Revenue Recognition (Refer note 1 and para 'a' of the significant accounting policies) The Company 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 various streams of revenue, together with the level of judgement involved make its accounting treatment for revenue a significant matter for our audit. Content Advances (Refer note 4) Our audit procedures to assess the appropriateness of revenue recognised included and were not limited to 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 significant 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. 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. Our audit procedures with respect to content advance, delivery of the content and it's impairment included and were not limited to following: • • 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. 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. • • • Examination of the approvals of write off where amounts are not recoverable. 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. 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. • 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. Amortization of Film and Content Rights (Refer note 1 and para 'c' of the significant accounting policies) The cost incurred on acquisition of film and content rights are amortized over the period. Company carries out stepped up amortization of film content, with higher amortization in year of film release and lower amortization in later periods as per the policy disclosed in significant accounting policy. Such amortization policy has been derived basis management's expectation of overall performance of films based on historical trends. The Company information maintains detailed content wise 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. Determination of amortization policy and assessing impairment of content asset involves significant judgement and estimates since it is dependent on various internal and external factors. Because of the significance of the amortization of content and film rights to balance sheet together with the level of judgement involved make its acc- ounting treatment a significant matter for our audit. Our audit procedures to test amortization/ impairment of film content included and were not limited to 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 amortization computations thereof. Testing, on sample basis, the mathematical accuracy of the acquisition cost of film and content rights, associated amortization 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 amortization 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. EROS INTERNATIONAL MEDIA LIMITED 39 STANDALONE FINANCIAL STATEMENTS Key Audit Matters Response to Key Audit Matters Trade Receivables (Refer note 1 and para 'f' of the significant accounting policies) The Company 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. 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. Related party Transactions (Refer Note 44) The Company has undertaken transactions with its related parties in the ordinary course of business at arm's length. These include transactions in the loans, sales etc. as nature of disclosed in note 44 to the standalone Ind AS financial statements. investments, Considering the significance of transactions with related parties and regulatory compliances thereon, related party transactions and its disclosure as set out in respective notes to the financial statements has been identified as key audit matter. Our audit procedures to assess the recoverability of trade receivables included and were not limited to 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 related to the recoverability of outstanding amount 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. Examination of the approvals of write off where amounts are not recoverable. 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 expected credit loss 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. Our procedures/ testing included the following: • • • • • Obtained and read the Company's policies, processes and procedures in respect of identifying related parties, obtaining approval, recording and disclosure of related party transactions. Read minutes of shareholder meetings, board meetings and minutes of meetings of those charged with governance in connection with Company's assessment of related party transactions being in the ordinary course of business at arm's length; Tested, related party transactions with the underlying contracts, confirmation letters and other supporting documents; Agreed the related party information disclosed in the financial statements with the underlying supporting documents, on a sample basis. Also reviewed the assessment of the recoverability from the related parties based on group's cash flow plan prepared by the Management. Information Other than the Financial Statements and Auditor's Report thereon 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 for the Standalone Financial Statements The Company's Board of Directors is responsible for the matters stated financial performance 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, including other comprehensive income, changes in equity and cash flows 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 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. to the preparation and In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going 40 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT 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. • • • 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, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 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) c) d) e) f) 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; The Balance Sheet, Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement 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; The matter described under Material Uncertainty Related to Going Concern paragraph above and under Qualified opinion paragraph in Annexure B to this report in our opinion, may have an adverse effect on the functioning of the Company. On the basis of written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021, from being appointed as a director in terms of Section 164(2) of the Act; g) 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 EROS INTERNATIONAL MEDIA LIMITED 41 STANDALONE FINANCIAL STATEMENTS qualified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting; h) 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 Executive Vice Chairman and Managing Director for the year ended March 31, 2021 is in excess by ` 400 Lakhs vis-à-vis the limits specified in Section 197 of Act read with Schedule V thereto as the Company does not have profits. The Company has represented to us that it is in the process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary. i) 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 Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 41 to the standalone financial statements; ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses, and iii. 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 UDIN:- 21103141AAAAOK7616 Place- Mumbai Date: 28 June, 2021 th 42 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF EROS INTERNATIONAL MEDIA LIMITED a. b. Sr. No. (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. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information. 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: The physical verification of inventory has been conducted at reasonable intervals by the Management during the year. (Films and Web Series where Company owns the rights are verified with reference to the title documents/ agreements). No differences were noticed on physical verification of inventory as compared to 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: 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. 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. iv) v) vi) 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, sales-tax, service 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 March 31, 2021 for a period of more than six months from the date of becoming payable:- Name of the statute Nature of the dues Amount ` in lakhs Period to which the amount relates Due Date Date of Payment 1 Income Tax Act, 1961 Income tax 115 Assessment year 2016-17 31-03-2016 Interest on Income Tax 762 Assessment year 2016-17 31-03-2016 Income tax 18 Assessment year 2017-18 31-03-2017 Interest on Income Tax 1,647 Assessment year 2017-18 31-03-2017 Income tax 26 Assessment year 2018-19 31-03-2018 Interest on Income Tax 221 Assessment year 2018-19 31-03-2018 Income tax 3,446 Assessment year 2019-20 31-03-2019 Interest on Income Tax 3,314 Assessment year 2019-20 31-03-2019 2 Goods and Services Tax Act, 2017 Interest on GST Interest on GST 54 204 For FY 2019-20 Various dates For FY 2018-19 Various dates 3 Income Tax Act, 1961 Tax Deducted at Source Interest on TDS 647 120 For FY 2020-21 Various dates For FY 2020-21 Various dates Interest on GST 69 For FY 2017-18 Various dates Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid Unpaid 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:- EROS INTERNATIONAL MEDIA LIMITED 43 STANDALONE FINANCIAL STATEMENTS 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 Finance Act, 1994 Service Tax, Penalties and Interest Reversal of CENVAT Credit Non/Short Levy on Imports 2 Income Tax Act, 1961 Income Tax 31,350 1,000 13,331 395 69 5 60 3 37 - - - - - - - From FY 2009-10 to FY 2013-2014 From FY 204-15 to June 2017 From FY 2013-14 to June 2017 From F.Y.2013-14 to F.Y.2015-16 Customs Excise and Service Tax Appellate Tribunal Office of Commissioner of CGST/ Central Excise Office of Commissioner of CGST/ Central Excise Office of Commissioner of CGST/ Central Excise AY 2014-15 Jurisdictional AO Various AY From 2012-13 to AY 2016-17 CIT (A) AY 2003-04 and AY 2004-05 AY 2004-05 Commissioner of Income Tax(Appeals) Bombay High Court 3 Maharashtra Value Added Tax, 2002/ Central Sales Tax Sales Tax 1,476 80 Various Years From FY 2005-06 to FY 2016-17 Joint Commissioner of sales tax (Appeals) viii) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of loans or borrowings to banks and financial institutions as under: Name of Bank/ Financial Institution Indian Overseas Bank Punjab National Bank Union Bank of India IDBI Bank Bank of Baroda State Bank of India Total ` Amount in lakhs Principal* Interest* 4,029 3,985 3,314 1,333 753 429 13,843* 54 142 4 73 127 75 476* *These all dues are related to post December 24, 2020 to March 31, 2021 One time restructuring under the Resolution Framework for COVID- 19 related stress was invoked on December 24, 2020 by company and consortium bankers. The plan was approved for implementation by company's bankers on June 22, 2021, due to which the debt liabilities that were due after cut-off date of January 1, 2021 till approval date, including the above referred dues are restructured for payment. (Also refer note 51(b) of the standalone financial statement). Company did not have any borrowing from government any outstanding debentures during the year. The Company has not raised money by way of initial public offer or further public offer (including debt instruments). In our opinion, the 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 to the best of our information and according to explanation given to us, the remuneration paid by the Company to its Executive Vice Chairman and Managing Director for the year ended March 31, 2021 is in excess by ` 400 Lakhs vis-à-vis the limits specified in Section 197 of Act read with Schedule V thereto as the ix) x) xi) 44 ANNUAL REPORT 2020-21 Company does not have profits. The Company has represented to us that it is in the process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary. xii) 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. 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 of the Order is not applicable to the Company. 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. xiv) xv) 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 UDIN:- 21103141AAAAOK7616 Place- Mumbai Date: 28 June, 2021 th  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT ANNEXURE "B" TO INDEPENDENT AUDITORS' 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 March 31, 2021 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 on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("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 qualified 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. Qualified Opinion According to the information and explanations given to us and based on our audit, we have identified material weakness as at March 31, 2021 with regards advances given for content development which has remained under production for a substantial period of time. The controls over assessing the further development or alternative arrangements needs to be strengthen failing which the advances may be potentially not recovered and written off in future. A 'material weakness' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. In our opinion, except for the possible effects of the material weakness described above on the achievement of the objective of the control criteria, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these Standalone Financial Statements and such internal financial controls over financial reporting with reference to these Standalone Financial Statements were operating effectively as at March 31, 2021, 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. We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2021 standalone financial statements of the Company, and the material weakness does not / do not affect our opinion on the standalone financial statements of the Company. For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No. 101720W/W100355 Amit Chaturvedi Partner Membership No. 103141 UDIN:- 21103141AAAAOK7616 Place- Mumbai Date: 28 June, 2021 th EROS INTERNATIONAL MEDIA LIMITED 45 STANDALONE FINANCIAL STATEMENTS Balance Sheet as at 31 March 2021 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 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 Other current liabilities Current tax liabilities Total current liabilities Total liabilities Total equity and liabilities Amount ` in lakhs Notes Year ended 31 March 2021 Year ended 31 March 2020 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 4,961 35,437 29,145 48 324 4,502 545 98 280 6,634 81,974 850 46,081 874 2,754 838 90 110 51,597 1,33,571 9,586 11,518 21,104 4 - 17,999 1,674 265 - 2,521 22,463 49,696 1,400 - 12,673 10,345 239 8,112 7,539 90,004 1,12,467 1,33,571 3,305 41,525 36,258 27 5,874 4,502 545 41 279 3,838 96,194 4 52,590 102 3,609 720 69 142 57,236 1,53,430 9,563 28,417 37,980 63 - 118 47 318 - 4,424 4,970 49,423 1,400 - 28,394 10,932 301 13,054 6,976 1,10,480 1,15,450 1,53,430 Notes 1 to 54 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 Lulla Executive Vice Chairman & Managing Director (DIN: 00243191) Sunil Srivastav Non Executive Independent Director (DIN: 00237561) Pradeep Dwivedi Chief Executive Officer Place: Mumbai Date : 28 June 2021 46 ANNUAL REPORT 2020-21 Farokh P. Gandhi Chief Financial Officer (India) Place: Mumbai Date : 28 June 2021 Vijay Thaker Vice President - Company Secretary and Compliance Officer  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Statement of Profit and Loss for the year ended 31 March 2021 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 costs (net) Depreciation and amortisation expense Other expenses Total expenses Profit/(Loss) before exceptional items and tax Exceptional Items Profit/(Loss) before tax Tax expense Deferred tax Short/(excess) provision of earlier years Profit/(Loss) after tax for the year Other comprehensive income (i) Items that will not be reclassified to profit or loss Remeasurement gain/(loss) 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 2021 Year ended 31 March 2020 31 32 33 34 35 36 37 38 39 40 24,450 6,814 31,264 22,386 (846) 3,138 10,943 610 10,880 47,111 (15,847) - (15,847) - 1,136 1,136 (16,983) 66,900 5,547 72,447 23,556 297 2,974 7,075 818 47,661 82,381 (9,934) 1,27,850 (1,37,784) (18,790) (2,921) (21,711) (1,16,073) (14) - 127 (32) (16,997) (1,15,978) (17.74) (17.74) (121.48) (121.48) Notes 1 to 54 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 Amit Chaturvedi Partner Membership No: 103141 Place: Mumbai Date : 28 June 2021 For and on behalf of Board of Directors Sunil Lulla Executive Vice Chairman & Managing Director (DIN: 00243191) Sunil Srivastav Non Executive Independent Director (DIN: 00237561) Pradeep Dwivedi Chief Executive Officer Farokh P. Gandhi Chief Financial Officer (India) Place: Mumbai Date : 28 June 2021 Vijay Thaker Vice President - Company Secretary and Compliance Officer EROS INTERNATIONAL MEDIA LIMITED 47 STANDALONE FINANCIAL STATEMENTS Statement of Changes in Equity As at 31 March 2021 A. Equity share capital Balance as at 1 April 2019 Add: Issued on exercise of employee share options Balance as at 31 March 2020 Add: Issued on exercise of employee share options Balance as at 31 March 2021 B. Other equity Particulars Balance as at 1 April 2019 Profit for the year Acturial gain / (loss) on employee benefit plans through OCI Total Comprehensive income/ (loss) for the year Share Premium Account 41,547 - - - Transfer from/to share option outstanding account 230 Employee stock option compensation expense Employee stock option compensation expense to employee's of subsidiary and Fellow subsidiary - - Number 9,55,08,140 1,20,883 9,56,29,023 2,35,795 9,58,64,818 Amount ` in lakhs 9,551 12 9,563 24 9,586 Amount ` in lakhs General Reserves Share Options Outstanding Retained Earnings 526 1,344 1,00,792 Other comprehensive income / (loss) 86 Total other equity 1,44,294 - (1,16,073) - - - (1,16,073) 94 94 - (1,16,073) 94 (1,15,979) - - - - - - (230) 85 16 - - - Balance as at 31 March 2020 Profit/(loss) for the year Acturial gain / (loss) on employee benefit plans through OCI Total Comprehensive income/ (loss) for the year Transfer from/to share option outstanding account Employee stock option compensation expense 41,777 526 1,215 (15,281) - - - 451 - - - - - - - (16,983) - - - (16,983) (451) 98 - - - - - - 85 16 180 28,417 - (16,983) (14) (14) (14) (16,997) - - - 98 Balance as at 31 March 2021 42,228 526 862 (32,264) 166 11,518 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 : 28 June 2021 For and on behalf of Board of Directors Sunil Lulla Executive Vice Chairman & Managing Director (DIN: 00243191) Sunil Srivastav Non Executive Independent Director (DIN: 00237561) Pradeep Dwivedi Chief Executive Officer Farokh P. Gandhi Chief Financial Officer (India) Place: Mumbai Date : 28 June 2021 Vijay Thaker Vice President - Company Secretary and Compliance Officer 48 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Cash Flow Statement for the year ended 31 March 2021 Particulars Cash flow from operating activities Profit/(loss) before tax Non-cash adjustments to reconcile Profit before tax to net cash flows Depreciation and amortization Bad debts and trade receivables written off Sundry balances written back Content advances written off Provision/(Reversal of provision) for doubtful advances Reversal of Provision of Impairment of Content advance Impairment of content advance provision (exceptional item) Impairment of film rights (exceptional item) Impairment of other advances provision (exceptional item) Impairment of content advance written off (exceptional item) Unwinding of interest on expected credit loss Finance costs Interest income Gratuity (Gain) on sale of tangible assets (net) Impairment loss on Investment Expense on employee stock option scheme Unrealised foreign exchange gain Operating profit before working capital changes Movements in working capital: (Decrease) in current liabilities Increase/(Decrease) in other financial liabilities Increase/(Decrease) in trade payables (Decrease) in employee benefit obligations Decrease in inventories (Increase)/Decrease in trade receivables (Increase)/Decrease in other current assets (Increase) /Decrease in other non- current assets (Increase)/Decrease in short-term loans and advances (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 Purchase of intangible film rights and related content Deposits with banks (net) Proceeds from sale of fixed assets Interest income Net cash used in investing activities (B) Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 (15,847) (1,37,784) 13,873 1,069 (1,648) 5,596 531 (3,284) - - - - (21) 11,150 (578) 56 (1) - 98 (652) 10,342 (6,844) 138 15,985 (184) 0 6,907 (184) (2,796) (118) 1 23,247 (2,301) 20,946 (146) (10,829) 798 6 186 (9,985) 17,579 44,966 (882) - (1,687) - 1,06,812 17,251 762 3,025 - 7,366 (290) 112 (0) 332 85 1,176 58,823 (15,438) (109) (397) (103) 0 (28,431) 101 416 1,126 (364) 15,624 (2,951) 12,673 (40) (3,635) 2,843 1 449 (382) EROS INTERNATIONAL MEDIA LIMITED 49 STANDALONE FINANCIAL STATEMENTS Cash Flow Statement for the year ended 31 March 2021 Particulars Cash flows from financing activities Proceeds from issue of equity shares (net) Repayment of long-term borrowings Change in short-term borrowings Finance charges (net) Net cash flow (used ) in financing activities (C) Net Increase/(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 ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 24 (2,274) (2,189) (5,750) (10,189) 772 102 874 12 (5,201) (1,741) (5,527) (12,457) (166) 268 102 *amount represents less than ` one lakh Change in liability arising from financing activities :- Particulars As on 1 April 2019 Cash Flows Adjustments As on 31 March 2020 Cash Flows Adjustments As on 31 March 2021 Non current borrowings Current borrowing Amount ` in lakhs Acceptances Total 13,878 (5,201) (0) 8,677 (2,274) - 6,402 46,796 2,655 (28) 49,423 (2,189) 2,462 49,696 5,796 (4,396) - 1,400 - - 1,400 66,470 (6,942) (28) 59,500 (4,463) 2,462 57,498 Notes 1 to 54 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 Lulla Executive Vice Chairman & Managing Director (DIN: 00243191) Sunil Srivastav Non Executive Independent Director (DIN: 00237561) Pradeep Dwivedi Chief Executive Officer Place: Mumbai Date : 28 June 2021 Farokh P. Gandhi Chief Financial Officer (India) Place: Mumbai Date : 28 June 2021 Vijay Thaker Vice President - Company Secretary and Compliance Officer 50 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT 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 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). formats globally, These separate financial statements were authorised for issue in accordance with a resolution passed in the Board of Directors meeting held on 28 June 2021. 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, Employee Stock Option Plan ('ESOP') Compensation and forward contracts are 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. a. Significant accounting policies Revenue recognition Revenue from contracts are recognized only when the contract has been approved by the parties to the contract and creates enforceable rights and obligations. 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. Revenue do not include the taxes collected from the customer on behalf of taxing authorities. 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. In case of variable consideration, the Company estimates, at the contract inception, 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 associated with the variable consideration 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 deferred revenue under other current liabilities in the statement of financial position (see Note 29). 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 balance sheet , 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 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 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 -. In arrangements for television syndication, license fees received in advance which do not meet the revenue recognition criteria, including commencement of the availability for broadcast under the terms of the related licensing agreement, are included in contract liability until the criteria for recognition is met. Revenues from television licensing arrangements are recognized when the feature film or television program is delivered and the period for the exploitation of rights has begun. 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 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. EROS INTERNATIONAL MEDIA LIMITED 51 STANDALONE FINANCIAL STATEMENTS 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 4. 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 loss within cost of sales. The statement of profit and 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. Other intangible assets, which comprise internally generated and the Entity's digital, home acquired software used within 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 52 ANNUAL REPORT 2020-21 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 the carrying amount may not be recoverable. indicate that 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 costs 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. f. Impairment of financial assets In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT impairment loss on risk exposure arising from financial assets like debt instruments measured at amortized 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. liabilities are not recognized Contingent financial statements but are disclosed by way of notes to accounts unless the possibility of an outflow of economic resources is considered remote. in the 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 EROS INTERNATIONAL MEDIA LIMITED 53 STANDALONE FINANCIAL STATEMENTS 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. 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 Company adopted Ind AS 116 'Leases' on April 1, 2019, utilizing the modified retrospective approach, and therefore, results for reporting periods beginning after April 1, 2019 are presented under the new lease standard, while prior periods have not been adjusted. The Company as a lessee: The Company assesses, whether the contract is, or contains, a lease at the inception of the contract or upon the modification of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company at the commencement of the lease contract recognizes a Right-of-Use (RoU) asset at cost and corresponding lease liability, except for leases with a term of twelve months or less (short-term leases) and leases for which the underlying asset is of low value (low-value leases). For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The cost of the right-of-use assets comprises the amount of the initial measurement of the lease liability, adjusted for any lease payments made at or prior to the commencement date of the lease, any initial direct costs incurred by the Company, any lease incentives received and expected costs for obligations to dismantle and remove right-of-use assets when they are no longer used. Subsequently, the right-of-use assets is measured at cost less any accumulated amortization and accumulated impairment losses, if any. The right-of-use assets are amortized on a straight- line basis from the commencement date of the lease over the shorter of the end of the lease term or useful life of the right-of-use asset. Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount may not be recoverable using cash flow projections for the useful life. For lease liabilities at commencement date, the Company measures the lease liability at the present value of the future lease payments as from the commencement date of the lease to end of the lease term. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the Company's incremental borrowing rate for the asset subject to the lease in the respective markets. Subsequently, the Company measures the lease liability by adjusting carrying amount to reflect interest on the lease liability and lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a change to the lease terms or expected payments under the lease, or a modification that is not accounted for as a separate lease The portion of the lease payments attributable to the repayment of lease liabilities is recognized in cash flows used in financing 54 ANNUAL REPORT 2020-21 activities. Also, the portion attributable to the payment of interest is included in cash flows from financing activities. Further, Short- term lease payments, payments for leases for which the underlying asset is of low-value and variable lease payments not included in the measurement of the lease liability is also included in cash flows from operating activities. The Company as a lessor: In arrangements where the Company is the lessor, it determines at lease inception whether the lease is a finance lease or an operating lease. Leases that transfer substantially all of the risk and rewards incidental to ownership of the underlying asset to the counterparty (the lessee) are accounted for as finance leases. Leases that do not transfer substantially all of the risks and rewards of ownership are accounted for as operating leases. Lease payments received under operating leases are recognized as income in the statement of profit and loss on a straight-line basis over the lease term or another systematic basis. The Company applies another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished. 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. Financial Assets Financial assets are divided into the following categories:  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT • • • financial assets carried at amortized cost financial assets at fair value through other comprehensive income financial assets at fair value through 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 amortized cost The Financial asset is measures at amortized cost if both the following conditions are met: 1. 2. The asset is held within a business model whose objective is to hold the assets for collecting contractual cash flows; and 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 After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (the "EIR") method. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income/other income in the Statement of Profit & 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 All financial liabilities are recognised initially at its fair value, adjusted by directly attributable transaction costs. Financial liabilities 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. Financial liabilities at amortized cost After initial recognition, 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. EROS INTERNATIONAL MEDIA LIMITED 55 STANDALONE FINANCIAL STATEMENTS 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. 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. Equity Instrument n. Earnings per share All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at fair value through profit and loss with all changes recognized in the Statement of Profit and Loss .For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income, the subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. If the Company decides to classify an equity instrument as at fair value through other comprehensive income, then all fair value changes on the instrument, excluding dividends and impairment loss, are recognized in other comprehensive income. There is no recycling of the amounts from the other comprehensive income to the Statement of Profit and Loss, even on sale of the investment. However, the Company may transfer the cumulative gain or loss within categories of equity. 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. 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 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 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 Company as a whole., 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 56 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT 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 by way of notes in financial statements. t. Standards Issued but not yet Effective At the date of approval of these financial statements, the Company has not applied the amendments to IndAS made by Ministry of Corporate Affairs vide Notification dated 18 June 2021 that have been issued but are not yet effective. th Major amendments applicable to company notified in the notification are provided below: (i) (ii) (iii) (iv) (v) (vi) (vii) Ind AS 116 - Leases – The amendment extends the benefits of the COVID 19 related rent concession that were introduced in the previous year (which allowed lessees to recognize COVID 19 related rent concessions as income rather than as lease modification) from 30 June 2021 to th30 June, 2022. th Ind AS 109 - Financial Instruments – The amendment provides a practical expedient for assessment of contractual cash flow test, which is one of the criteria for being eligible to measure a financial asset at amortized cost, for the changes in the financial assets that may arise as a result of Interest Rate Benchmark Reform. An additional temporary exception from applying hedge accounting is also added for Interest Rate Benchmark Reform. Ind AS 101 - Presentation of Financial Statements – The amendment substitutes the in paragraph B1 as ‘Classification and measurement of financial instruments’. The term ‘financial asset’ has been replaced with ‘financial instruments’. item (d) mentioned Ind AS 102 - Share-Based Payment – The amendments to this standard are made in reference to the Conceptual Framework of Financial Reporting under Ind AS in terms of defining the term ‘Equity Instrument’ which shall be applicable for the annual reporting periods beginning on or after 1 April 2021. st Ind AS 103 - Business Combinations – The amendment substitutes the definition of ‘assets’ and ‘liabilities’ in accordance with the definition given in the framework for the Preparation and Presentation of Financial Statements in accordance with Ind AS for qualifying the recognition criteria as per acquisition method. Ind AS 105 - Non-current assets held for sale and discontinued operations – The amendment substitutes the definition of – “fair value less costs to sell” with “fair value less costs of disposal”. Ind AS 107 - Financial Instruments: Recognition, Presentation and Disclosure – The amendment clarifies the certain additional disclosures to be made on account of Interest Rate Benchmark Reform like the nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate benchmark reform; the entity‘s progress in completing the transition to alternative benchmark rates, and how the entity is managing the transition. (viii) (ix) Ind AS 111 - Joint Arrangements – In order to maintain consistency with the amendments made in Ind AS 103, respective changes have been made in Ind AS 111. Ind AS 115 - Revenue from Contracts with Customers – Certain amendments have been made in order to maintain consistency with number of paragraphs of IFRS 15. (x) (xi) (xii) (xiii) Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors – In order to maintain consistency with the amendments made in Ind AS 114 and to substitute the word ‘Framework’ with the ‘Conceptual Framework of Financial Reporting in Ind AS’, respective changes have been made in the standard. Ind AS 16 - Property, Plant and Equipment – The amendment has been made by substituting the words “Recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use” with “Recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use”. Ind AS 34 - Interim Financial Reporting – The amendments to this standard are made in reference to the conceptual framework of Financial Reporting in Ind AS. Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets – The amendment substitutes the definition of the term ‘Liability’ as provided in the Conceptual Framework for Financial Reporting under Indian Accounting Standards. (xiv) Ind AS 38 - Intangible Assets – The amendment substitutes the definition of the term ‘Asset’ as provided in the Conceptual Framework for Financial Reporting under Indian Accounting Standards. The Company is evaluating the impact of these amendments. 2. Significant accounting judgements estimates and assumptions financial statements requires The preparation of the management to make judgements, estimates and assumptions, as described below, that affect the reported amounts and the disclosures. The 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. Estimation of uncertainties relating to global health pandemic from COVID-19: The World Health Organization announced a global health emergency because of a new strain of coronavirus ("COVID-19") and classified its outbreak as a pandemic on March 11, 2020. On March 24, 2020, the Government announced lockdown across the country to contain the spread of the virus. Further, lockdown like conditions have been imposed by government to curtail the second wave in April 5, 2021. This pandemic and response thereon have impacted most of the industries. The film industry has been impacted due to closures of theatres and restrictions on film shoots. The impact on company's future operations would, to a large extent, depend on how the pandemic further develops and it's resultant impact on the operations of the Company. The Management has evaluated the impact on its financial statements and have made appropriate adjustments, wherever required. The extent of the impact on Company's operations remains uncertain and may differ from that estimated as at the date of approval of these standalone financial statements and will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration of COVID-19 and among other things, the impact of governmental actions imposed in response to the pandemic. The Company is monitoring the rapidly evolving situation and its potential impacts on the Company's financial position, results of operations, liquidity, and cash flows. EROS INTERNATIONAL MEDIA LIMITED 57 STANDALONE FINANCIAL STATEMENTS b. 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. c. 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 42. d. Fair value measurement of ESOP Liability 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 42. e. 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. f. 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. g. 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. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate. h. 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. i. 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. 58 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT 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 Right of Use Capital work in progress Total Balance as at 1 April 2019 Additions Adjustments/ disposals Capitalized during the year Balance as at 31 March 2020 Additions Adjustments/ disposals Balance as at 31 March 2021 Accumulated depreciation Balance as at 1 April 2019 Depreciation charge Adjustments/ disposals Balance as at 31 March 2020 Depreciation charge Adjustments/ disposals Balance as at 31 March 2021 Net carrying amount Balance as at 31 March 2020 Balance as at 31 March 2021 3,317 443 275 480 196 390 287 169 - 6 5,563 - - - - - - 0 (1) - - 2 (1) 2 (0) - - - - - - - 47 986 - 1,037 - - - (2) - - - - 3,317 443 274 480 197 392 287 216 986 6 6,599 - - - - - (25) - - - (66) 150 (88) - (28) - 2,474 - 2,624 (1) (36) - (243) 3,317 443 249 480 131 454 259 215 3,424 6 8,980 599 323 198 212 141 342 219 30 - - 2,064 132 - 731 126 - 89 22 78 - (1) - 25 (1) 18 (0) 19 - 70 357 - 810 - 421 - 419 412 219 290 165 360 238 100 778 - 3,294 - 15 51 13 32 13 72 277 - 599 - (25) - (66) (84) (28) (1) 329 - 126 857 412 209 341 112 308 224 171 1,384 - 4,019 2,586 2,460 31 31 55 40 191 140 32 19 32 146 48 35 116 208 6 3,305 44 2,040 6 4,961 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:- Accumulated depreciation as on 1 April 2015 791 - 426 191 95 435 1,220 - - - 3,158 EROS INTERNATIONAL MEDIA LIMITED 59 STANDALONE FINANCIAL STATEMENTS 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 Gross carrying amount Balance as at 1 April 2019 Additions Transfer to film and content rights Impairment of content advance Impairment of content advance written off Reversal of provision for doubtful advances Balance as at 31 March 2020 Additions Transfer to film and content rights Amount written off Provision for doubtful advances Impairment of content advance written off Advance written off against impairment Reversal Impairment of content advance Balance as at 31 March 2021 Accumulated amortization Balance as at 1 April 2019 Amortization charge Impairment of film rights Balance as at 31 March 2020 Amortization charge Balance as at 31 March 2021 Net carrying amount Balance as at 31 March 2020 Balance as at 31 March 2021 Content advances 1,44,435 15,331 (10,091) (1,06,812) (3,025) 1,687 41,525 12,028 (15,273) (5,596) (531) 6,074 (6,074) 3,284 35,437 41,525 35,437 Film rights Other intangible assets 2,02,962 3,296 - - 2,06,258 6,151 - - - - - 72 15 - - 87 32 - - - - - Total 2,03,034 3,311 - - 2,06,345 6,183 - - - - - 2,12,409 119 2,12,528 1,35,988 16,761 17,251 1,70,000 13,264 1,83,264 36,258 29,145 52 8 - 60 11 71 27 48 1,36,040 16,769 17,251 1,70,060 13,275 1,83,335 36,285 29,193 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 depreciation as on 1 April 2015 are as under:- Accumulated depreciation as on 1 April 2015 2,23,210 119 2,23,329 2. The closing balance of content advances are net of provision for impairment ` 97,454 lakhs (31 March 2020:- ` 106,812 lakhs) 5 Investments Particulars A Non current investments Unquoted equity shares Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 i) Investment in equity shares of subsidiaries measured at cost Eros International Films Private Limited 19,930,300 (31 March 2020: 19,930,300) equity shares of ` 10 each, fully paid-up 1,993 1,993 Eros Animation Private Limited 9,300 (31 March 2020: 9,300) equity shares of ` 10 each, fully paid-up Copsale Limited 105,000 (31 March 2020: 105,000) equity shares of USD 1 each, fully paid-up Big Screen Entertainment Private Limited 6,400 (31 March 2020: 6,400) equity shares of ` 10 each, fully paid-up EyeQube Studios Private Limited 9,999 (31 March 2020: 9,999) equity shares of ` 10 each, fully paid-up 60 ANNUAL REPORT 2020-21 1 45 1 1 1 45 1 1  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 5 Investments (Cont) Particulars EM Publishing Private Limited 9,900 (31 March 2020: 9,900) equity shares of ` 10 each, fully paid-up Digicine PTE Limited* 100 (31 March 2020: 100) equity shares of USD 1 each, fully paid-up Colour Yellow Productions Private Limited 5,000 (31 March 2020: 5,000) equity shares of ` 10 each, fully paid-up Investment in Reliance Eros Production LLP ii) Investment in equity shares of subsidiaries measured at fair value through profit and loss ErosNow Private limited (Formerly know as Universal Power Systems Private Limited) 1,000 (31 March 2020: 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 6 Loans Particulars Unsecured considered good,unless otherwise stated Other loans and advances Considered good Total 7 Restricted bank deposits Particulars Bank deposits with maturity of more than twelve months* Total * Given as securities to bank for margin 8 Other financial assets Particulars Unsecured and considered good Security deposits to - Related parties (refer note 44) - Others Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 1 0 1 - 5,546 (3,086) 4,502 7,588 3,086 1 0 1 0 5,546 (3,086) 4,502 7,588 3,086 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 545 545 545 545 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 98 98 41 41 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 268 12 280 268 11 279 EROS INTERNATIONAL MEDIA LIMITED 61 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 9 Other non-current assets Particulars (a) Advance payment of income taxes (net of provision) (b) Balances due with Statutory Authorities Total 10 Inventories Particulars VCD/ DVD/ Audio CDs* Film rights Total *amount represents less than ` one lakh 11 Trade receivables Particulars Secured, considered good Unsecured, considered good Dues from related parties (refer note 44) Unbilled Income Less : Expected credit loss* Total *Movement of Expected credit loss Opening balance Addition/(Reversal) of expected credit loss Less : transfer to bad debts Closing balance Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 177 6,457 6,634 177 3,661 3,838 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 0 850 850 0 4 4 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 - 976 41,664 3,922 46,562 (481) 46,081 1,153 (21) (651) 481 1,327 2,497 49,012 907 53,743 (1,153) 52,590 8,361 44,790 (51,998) 1,153 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 Particulars a. Cash on hand b. Balances with Bank In current account Total 13 Restricted bank deposits Particulars Unclaimed dividend account Margin money accounts with:* maturity less than 12 months maturity more than 12 months Less: disclosed under non current financial assets - Restricted deposits (refer note 7) Total * Given as securities to bank for margin 62 ANNUAL REPORT 2020-21 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 72 802 874 72 30 102 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 - 1 2,754 98 2,852 (98) 2,754 3,608 41 3,650 (41) 3,609  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 14 Loans and advances Particulars Unsecured and considered good Amounts due from related parties (refer note 44) Loans and advances to employees Other loans Security deposits Total 15 Other financial assets Particulars Accrued interest on fixed deposits Total 16 Other current assets Particulars Prepaid expenses Deferred expenses Total 17 Equity share capital Particulars 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 2021 As at 31 March 2020 55 197 581 5 838 61 88 565 6 720 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 90 90 69 69 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 110 - 110 62 80 142 Amount ` in lakhs ` , except share data As at 31 March 2021 As at 31 March 2020 Number Amount Number Amount 125,000,000 125,000,000 12,500 12,500 125,000,000 125,000,000 95,864,818 95,864,818 9,586 9,586 95,629,023 95,629,023 12,500 12,500 9,563 9,563 a) Reconciliation of paid-up share capital (Equity Shares) Amount ` in lakhs ` , except share data Particulars Balance at the beginning of the year Add: Issued on exercise of employee share options Balance at the end of the year As at 31 March 2021 As at 31 March 2020 Number 95,629,023 2,35,795 95,864,818 Amount 9,563 24 9,586 Number 95,508,140 1,20,883 95,629,023 Amount 9,551 12 9,563 During the year, the Company has issued total 235,795 equity shares (31 March 2020: 120,883) 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 Particulars Equity shares of ` 10 each Eros Worldwide FZ LLC - Holding company Eros Digital Private Limited - Fellow subsidiary Amount ` in lakhs , except share data As at 31 March 2021 As at 31 March 2020 Number Amount Number Amount 37,877,302 21,700,000 3,788 2,170 37,877,302 21,700,000 3,788 2,170 EROS INTERNATIONAL MEDIA LIMITED 63 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 17 Equity share capital (Cont...) c) Details of Shareholders holding more than 5% of the shares in the Company Particulars As at 31 March 2021 Number % holding in the class ` Amount ` in lakhs , except share data As at 31 March 2020 Number % holding in the class Equity shares of ` 10 each Eros Worldwide FZ LLC - Holding company Eros Digital Private Limited - Fellow subsidiary 37,877,302 21,700,000 39.51% 22.64% 37,877,302 21,700,000 39.61% 22.69% 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 2,276,267equity shares ( 31 March 2020: 2,220,779) 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 2020:900,970) to the shareholders of ErosNow Pvt Ltd (ENPL) (formerly known as Universal Power Systems Pvt Ltd ) at a premium of ` 586 per share in exchange for the entire shareholding of ENPL. 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 Particulars Securities premium Balance at the beginning of 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 Balance at the end of the year Retained earnings Balance at the beginning of the year Add: Net profit/(loss) after tax for 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 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 41,777 451 42,228 1,215 (451) 98 - - 862 526 526 (15,281) (16,983) (32,264) 180 (14) 166 41,547 230 41,777 1,344 (230) 85 0 16 1,215 526 526 1,00,792 (1,16,073) (15,281) 86 94 180 Total 1 2 3 4 Securities Premium: The amount received in excess of face value of the equity shares is recognised in Securities Premium. 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. Share Options Outstanding: Share Options Outstanding relates to the stock options granted by the company to employees under a Employee Stock Option Plan. Retained Earnings: Remaining portion of profits earned by the Company till date after appropriations. 11,518 28,417 64 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 19 Long-term borrowings Particulars Secured Term loan from banks* Car loans ** Others*** Unsecured Term loan from others# Less: Cumulative effect of unamortized cost Less: Current maturities disclosed under other current financial liabilities (refer note 27) Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 3,576 5 69 2,765 6,415 (13) (6,398) 4 5,541 86 141 2,940 8,708 (31) (8,614) 63 * Term loans from banks carry an interest rate between 11.95% - 15.75% are secured by pari passu first charge on the 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 STX Global Corporation (formerly known as 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 between 15.5% - 17% 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 Particulars Secured Term loan from banks Car loan Others Unsecured Term loan from others Total Default in repayment as on 31 March 2021 Term loan from banks Total Less than 1 year 1-3 years 3-5 years 3,563 5 65 2,765 6,398 - - 4 - 4 - - - - - Principal due 951 951 The above defaults stands rectified on approval of restrucuturing of loan facilities by bankers on 22 June, 2021. The revised terms of the borrowings, applicable from the cut off date of 1 January, 2021 are given in Note 51(b). st nd 20 Trade payable - non current Particulars Payable to related parties (refer note 44) Total 21 Other financial liabilities Particulars Security deposits Lease liabilities Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 17,999 17,999 118 118 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 25 1,649 1,674 25 22 47 EROS INTERNATIONAL MEDIA LIMITED 65 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 22 Employee benefit obligations - non current Particulars Provision for gratuity (refer note 42) Total 23 Deferred tax (assets)/liabilities (net) Particulars Deferred tax liability on Depreciation on tangible assets Amortization of intangible assets Total Deferred tax asset on Provision for expenses allowed on payment basis Others Impairment Business loss Total Deferred tax (Assets)/liabilities (net) Restricted to and consequent impact Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 265 265 318 318 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 91 8,754 8,845 1,111 - 40,349 1,722 43,182 (34,337) 48 9,080 9,128 821 30 31,417 48 32,316 (23,188) - - Significant management judgement is considered in determining provision for income tax, deferred tax assets and liabilities and recoverability of deferred tax asset. Net deferred tax assets have been restricted to NIL on conservative basis. Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet.The business loss for AY 2021-22 amounting to ` 4,929 Lakhs (including unabsorbed depriciation / amortization ` 2,639 lakhs), deferred tax relating that to `1,722 Lakhs can carried forward till AY 2029-2030. Reconciliation of statutory rate of tax and effective rate of tax Particulars 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 unrecognised deferred tax assets Effect of Items deductible for tax purpose Others At India’s statutory income tax rate of 34.94% (31 March 2020: 25.17%) 24 Other non-current liabilities Particulars Deferred revenue Total 66 ANNUAL REPORT 2020-21 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 (15,847) 1,136 (7.17%) 15.49% 19.86% 7.17% 0.00% 0.00% (0.41%) 34.94% (1,37,784) (21,711) 15.76% 0.32% (3.81%) (2.12%) 16.89% (1.85%) (0.02%) 25.17% Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 2,521 2,521 4,424 4,424  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 25 Short-term borrowings Particulars Repayable on demand Secured From banks Unsecured From others* From related parties (refer note 44) Total Secured short term borrowings include : Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 39,995 39,942 1,237 8,464 49,696 1,537 7,944 49,423 Cash credit/FITL/WCDL carry an interest rate between 10.5 % - 16.5 % , 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 9% - 10.5% for INR bills and 6M MCLR+Spread or 6M LIBOR+Spread 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 8% - 10% for INR and 6M MCLR+Spread or 6M LIBOR+ Spread 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 STX Global Corporation (formerly known as 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 15% - 16.5% , secured by security provided by holding company. Default in repayment as on 31 March 2021 Packing Credit/Export Bill FITL Total Principal due 9,279 2,213 11,492 The above defaults stands rectified on approval of restrucuturing of loan facilities by bankers on 22 June, 2021. The revised terms of the borrowings, applicable from the cut off date of 1 January, 2021 are given in Note 51(b). st nd 26 Acceptances Particulars Payable under the film financing arrangements Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 1,400 1,400 1,400 1,400 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. The facility was overdue as at year end by 76 days. However, the default stands rectified on approval of restructuring of facility into Working Capital facility by bankers on 22 June, 2021. nd 27 Other financial liabilities Particulars 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 44) Lease liabilities Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 6,398 - 1,468 - 583 527 881 488 8,614 452 23 1 483 671 473 215 10,345 10,932 EROS INTERNATIONAL MEDIA LIMITED 67 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 28 Employee benefit obligations - current Particulars Gratuity Compensated absences Total 29 Other current liabilities Particulars Advance from customers- related parties (refer note 44) Advances from customers- others Deferred revenue Duties and taxes payable Total 30 Current tax liabilities Particulars Provision for corporate taxes (net) Total 31 Revenue from operations (net) Particulars Revenue from distribution and exhibition of film and other rights Revenue from services Total 32 Other income Particulars Sundry balances written back Interest income on advances Interest income on Income tax refund Reversal of expected credit loss Reversal of provision for doubtful advances(refer note 4 ) Other non-operating income Gain on foreign currency transactions and translation (net) Gain on sale of tangible assets (net) Reversal of Provision of Impairment of Content advance Income from export incentives Total 33 Film right cost including amortization costs Particulars Amortization of film rights (refer note 4) Film rights cost Total 68 ANNUAL REPORT 2020-21 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 110 129 239 73 228 301 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 311 2,124 2,356 3,321 8,112 311 1,171 5,176 6,396 13,054 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 7,539 7,539 6,976 6,976 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 24,446 4 24,450 66,896 4 66,900 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 1,648 372 - 21 - 547 - 1 3,284 941 6,814 882 102 28 - 1,687 1,301 1,020 0 - 527 5,547 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 13,264 9,122 22,386 16,761 6,795 23,556  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 34 Changes in inventories of film rights Particulars Opening stock - Finished goods Closing stock - Finished goods Total 35 Employee benefits expense Particulars Salaries and bonus Contribution to provident and other funds (refer note 42) Gratuity expense (refer note 42) Employee stock option compensation (refer note 42) Staff welfare expenses Total 36 Finance cost Particulars 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 NIL % (31 March 2020 : 13.03 %) 37 Depreciation and amortization expense Particulars Depreciation on tangible assets (refer note 3) Amortisation on intangible assets (refer note 4) Total 38 Other expenses Particulars Print and digital distribution cost Selling and distribution expenses Processing and other direct cost & Home entertainment products related cost Shipping, packing and forwarding expenses Power and fuel Rent Repairs and maintenance Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 4 4 850 850 (846) 301 301 4 4 297 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 2,831 142 56 98 11 2,557 136 112 85 84 3,138 2,974 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 8,604 235 2,311 11,150 - (207) 10,943 7,643 485 2,619 10,747 (3,382) (290) 7,075 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 599 11 610 810 8 818 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 35 742 291 16 19 40 117 198 503 105 25 49 31 134 EROS INTERNATIONAL MEDIA LIMITED 69 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 38 Other expenses (Cont...) Particulars Insurance Rates and taxes Legal and professional Payments to auditors (refer note 48) Provision for doubtful advances (refer note 4 ) Communication expenses Travelling and conveyance Commission Payable to Independent Directors Content advances written off (refer note 4) Bad debts and trade receivables written off Provision for impairment in the value of investment Loss on foreign currency transactions and translation (net) CSR expenditure (refer note 50) Miscellaneous expenses Total 39 Exceptional Items* Particulars Impairment of content advance provision Impairment of film rights Impairment of other advances provision Impairment of content advance written off Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 24 23 945 106 531 51 77 48 5,596 1,069 - 933 8 209 10,880 19 34 577 107 - 64 111 - - 44,966 332 - 3 403 47,661 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 - - - - - 1,06,812 17,251 762 3,025 1,27,850 *Exceptional item comprises of the following: In 2019-20 , the COVID-19 outbreak and resulting measures taken by the Government of India to contain the virus have already significantly affected the business in the first quarter of fiscal 2020. Further, in 19-20, the Company has witnessed a significant decline in market capitalization as compared with the previous year. Because of unexpected decline in the market capitalization and disruptions in the business caused by the outbreak of COVID-19, the Company has performed the annual impairment assessment following the requirements of Ind AS 36 ‘Impairment of Assets’. Value in use was determined based on future cash flows after considering current economic conditions and trends, estimated future operating results, growth rates (which is lower than those considered in previous years) and anticipated future economic conditions. The approach and key (unobservable) assumptions used to determine the cash generating unit’s value comprises of growth rate beyond explicit period (4%) and post-tax discount rate of 16.5%. Based on the assessment, the management has recorded the impairment charge of ` 127,850 lakhs and disclosed the same under the exceptional item. The impairment loss has been allocated between component of CGU i.e. content advance ` 109,837 lacs and film right ` 17,251 lakhs . Company has also impaired certain advances of ` 762 lakhs. As on 31 March 2021, the company has carried out impairment assessment. The approach and key (unobservable) assumptions used to determine the cash generating unit’s value comprises of growth rate beyond explicit period (4%) and post-tax discount rate of 16.5%. No, impairment has been recorded in current year. 40 Earnings per share Particulars a) Computation of net profit for the year Amount ` in lakhs , except share data Year ended 31 March 2021 Year ended 31 March 2020 Net profit/(loss) after tax attributable to equity shareholders (` in lakhs) (16,983) (1,16,073) 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 9,57,12,501 9,55,51,002 9,57,12,501 9,55,51,002 Weighted average number of equity shares used in the calculation of basic earning per share 9,57,12,501 9,55,51,002 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 1,31,418 1,24,695 9,58,43,919 9,56,75,697 70 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 40 Earnings per share (Cont...) Particulars d) Nominal value of shares (in ` ) e) Computation Basic (in ` ) Diluted (in ` ) 41 Contingent liabilities and commitments (to the extent not provided for) Particulars (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 Year ended 31 March 2021 Year ended 31 March 2020 10 10 (17.74) (17.74) (121.48) (121.48) Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 1,476 44,945 105 25 46,551 1,315 34,305 105 25 35,750 Notes: 1 th During the year ended 31 March 2021, the Company received a show cause notice from the Commissioner of Service Tax to show cause why an amount aggregating to ` 5,317 lakhs for the period 1 April 2015 to 30 June 2017 should not be levied on and paid by the Company for service tax arising on temporary/perpetual transfer of copyright services and other matters. Company is in process of filing of reply for the same 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, the provision of ` 88.52 Lakhs only has been recorded and no additional liability has been recorded in the financial statements. Company has received show cause notice for reversal of CENVAT credit for the period 2013-14 to 2015-16 ` 187 lakhs. no additional liability has been accounted in financial statements for this show cause notice. Further Company also received show cause notice for Non levy of Service tax on Import of Services for the period 2013-14 to 2015-16 for ` 70 Lakhs. the Company has recorded liability ` 51.51 lakhs on account of this show cause notices. 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 / perpetual transfer of copyright services and other matters. The provision of ` 60.77 lakhs has been recorded and no additional liability has been recorded in the financial statements. 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 information available, that any existing legal proceedings or claims, including those made under IBC 2016, are likely to have a material and adverse effect on its financial position, results of operations or cash flows. The Company does not expect any reimbursements in respect of the above contingent liabilities. 2 3 4 5 6 7 8 Particulars b) Commitments Estimated amount of contracts remaining to be executed on content commitments Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 1,52,456 1,52,456 1,99,007 176,640 176,640 212,390 EROS INTERNATIONAL MEDIA LIMITED 71 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 42 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: Particulars I Change in projected benefit obligation Liability at the beginning of the year Interest cost Current service cost Liabilty transferred Benefits paid Actuarial loss/(gain) on obligations Liability at the end of the year Current portion Non-current portion II Recognised in Balance Sheet Liability at the end of the year Amount recognised in Balance Sheet III Expense recognised in Statement of Profit and loss Current service cost Interest cost Past service cost Expense recognised in Statement of Profit and loss IV. Expense recognised in Other Comprehensive Income Arising from changes in experience Arising from changes in financial assumptions Arising from changes in demographic assumptions Expense/(income) recognised in Other comprehensive income *Actuarial (gain)/loss of ` 14 lakhs (31 March 2020: ` (127) lakhs) is included in other comprehensive income. IV Assumptions used Discount rate Long-term rate of compensation increase Attrition Rate Expected average remaining working life in years Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 391 22 34 (69) (17) 14 375 110 265 375 375 34 22 - 56 12 2 (0) 14 5.58% 4.76% 17% 4.00 489 36 76 - (83) (127) 391 73 318 391 391 76 36 - 112 (71) (38) (18) (127) 5.76% 4.76% 19% 6.00 72 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 42 Employment benefits (Cont...) V A quantitative sensitivity analysis for significant assumption as shown below: Amount ` in lakhs Particulars 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 VI Maturity profile of defined benefit obligation Year Year 1 Year 2 Year 3 Year 4 Year 5 Sum of Years 6-10 Sum of Years 11 and above As at 31 March 2021 As at 31 March 2020 375 (12) 13 11 (10) 0 (0) 391 (12) 13 12 (11) (0) 0 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 112 62 40 45 30 108 69 74 98 55 40 41 112 68 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 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 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 ` (23) lakhs (31 March 2020 : ` 66 lakhs) towards accrual for compensated absences during the year. c) Provident fund The Company contributed ` 138 lakhs (31 March 2020 : ` 131 lakhs) to the provident fund plan, ` 3 lakh (31 March 2020 : ` 4 lakhs) to the Employee state insurance plan and ` 1 lakhs (31 March 2020 : ` 1 lakhs) to the National Pension Scheme during the year. EROS INTERNATIONAL MEDIA LIMITED 73 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 42 Employment benefits (Cont...) 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 17 December 2009 and Annual General Meeting held on 29 September 2017 respectively. The details of activities under the ESOP 2009 and ESOS 2020 scheme are summarized below: The expense recognized for employee services received during the year is shown in the following table: Particulars Expense arising from equity-settled share-based payment transactions There were no cancellations or modifications to the awards in 31 March 2021 or 31 March 2020. Movements during the year Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 98 85 The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year: Particulars As at 31 March 2021 As at 31 March 2020 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 Number 4,79,614 - (43,896) (2,35,795) 1,99,923 1,99,923 WAEP* Number WAEP* 45 - 10 10 94 94 7,57,885 - (1,56,775) (1,21,496) 4,79,614 3,25,740 32 - 10 10 45 59 ` 10-150 2.96 Years ` 10-150 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 Table 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. 74 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 43 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. Particulars 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 2021 Year ended 31 March 2020 7,191 14,420 2,839 24,450 11,629 47,742 7,529 66,900 For the year ended 31 March 2021 and 31 March 2020 no external 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 Particulars Non-current assets India Total non-current assets Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 76,372 76,372 90,651 90,651 EROS INTERNATIONAL MEDIA LIMITED 75 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 44 Related party disclosures Related party where control exists: a) Parent entity Relationship Ultimate holding Company Holding Company b) Subsidiaries Relationship Name Name Eros STX Global Corporation (formerly known as Eros International PLC) Eros Worldwide FZ LLC 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 ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Related party having transactions : a) List of Key management personnel (KMP) Mr. Sunil Lulla – Executive Vice Chairman and Managing Director Mr. Kishore Lulla – Executive Director Mr. Farokh Gandhi - Executive Director & Chief Financial Officer (India) (Appointed as Director of the Company w.e.f. 9 November 2020) Mr. Pradeep Dwivedi - Chief Executive Officer (w.e.f. 10 February 2020) Mr. Abhishek Kanoi - Vice President Company Secretary and Compliance Officer (upto 12 August 2019) Mr. Vijay Jayantilal Thaker - Vice President Company Secretary and Compliance Officer (w.e.f. 13 August 2019) b) Relatives of KMP with whom transactions exist Mrs. Manjula K Lulla (wife of Mr. Kishore Lulla) Mrs. Krishika Lulla (wife of Mr. Sunil Lulla) Mrs. Meena Lulla (wife of Mr. Arjan Lulla) c) Entities over which KMP exercise significant Shivam Enterprises influence Eros International Distribution LLP Eros Television India Private Limited Eros International Distribution LLP d) Fellow subsidiary company Eros Digital Private Limited Eros International Limited, United Kingdom Eros Digital FZ LLC Eros International USA Inc, USA 76 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information s h k a l n i ` t n u o m A l a t o T i h c h w r e v o s e i t i t n E t n e m e g a n a M y e K i e s c r e x e l e n n o s r e P e c n e u l f n i t n a c i f i n g s i h t i w s n o i t c a s n a r t y e K f o s e v i t a e r l t n e m e g a n a M l e n n o s r e P i g n d u c n l i l e n n o s r e P y n a p m o c t n e m e g a n a M y e K i i y r a d s b u s w o l l e F 8 0 9 , 7 4 1 3 9 , 3 1 1 6 1 , 3 ) 1 7 2 , 8 ( 7 0 2 2 3 2 , 5 7 4 6 1 8 6 7 2 0 1 5 0 7 9 7 7 4 0 1 , 1 6 6 8 , 1 - - - 0 8 6 , 2 0 0 3 , 5 4 1 3 5 1 1 , 8 1 7 8 1 ) 7 6 3 ( 5 1 6 9 3 , 2 7 5 - 8 6 7 2 7 3 7 2 1 , 1 2 5 9 - - 0 4 - 3 2 1 - 0 6 2 , 3 6 7 7 , 3 - - - - - - - - - - - - - - - - - - - - 2 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8 6 7 8 6 7 9 7 7 2 5 9 - - - - - - - - 4 1 3 - - - - - - - - - r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e 0 2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 0 2 0 2 1 2 0 2 h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 - r a e Y d e d n e 0 2 0 2 h c r a M 1 3 1 2 0 2 9 6 2 , 2 ) 1 7 2 , 8 ( ) 7 6 3 ( - - 1 6 1 , 3 - - - - - - - - - - - - 7 5 2 6 7 8 8 , 4 6 8 2 , 2 - - - - - - - 5 2 3 4 - - - - - - - - - - - 2 1 7 3 1 7 4 - 6 1 2 0 1 8 4 6 - - - - 4 0 1 , 1 6 6 8 , 1 - 8 3 6 , 2 5 7 2 , 5 4 3 3 , 4 0 8 - 0 2 0 2 2 1 1 2 0 2 - 7 8 1 2 1 - 7 5 - - - - - - 0 5 6 0 , 1 4 - 3 2 1 - 0 6 2 , 3 6 7 7 , 3 0 2 0 2 8 2 8 , 7 4 1 2 0 2 0 5 6 , 1 1 - - 3 3 3 0 7 - - - - - - - - - - - - - - - 8 3 7 , 3 1 - - 8 9 5 1 - - - - 2 7 3 - - - - - - - - - - - r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e r a e Y d e d n e h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 h c r a M 1 3 i i y r a d s b u S y n a p m o C g n d o H l i s e i t r a p d e t a e r h t i l w r a e y e h t g n i r u d s n o i t c a s n a r T ) . . . t n o C ( i l s e r u s o c s d y t r a p d e t a e R l 4 4 ) i ( c s o r E o t l e b a t u b i r t t a e u n e v e R C L L Z F l a t i i g D s t h g i r m l i f f o e a S l s t h g i r m l i f f o e s a h c r u P f o t n e m e s r u b m i - e R l s r a u c i t r a P e s n e p x e e v i t a r t s n m d a i i i d a p s e g r a h C e g a s U s t e s s A n e v g i t n e m e s r u b m i - e R s e s n e p x e n o s s m m o C i i s e s n e p x e t n e R e m o c n i t s e r e t n I n i t n e m t s e v n I s e s n e p x e t s e r e t n I i d n a n o s s m m o c i , y r a a S l i n e v g s e c n a v d a d n a n a o L i n e v g s e c n a v d a t n e t n o C s P M K o t i * s e t i s u q r e p d e r r e f s n a r t n a o L t n e m h s a c n e e s a e L / y t i u t a r G d n a s n a o l f o y r e v o c e R i n e v g s e c n a v d a s t e s s a f o e a S l d e r r e f s n a r t s n a o l / s e c n a v d a f o t n e m y a p e R n e k a t s n a o l / s e c n a v d a e d a r T s t i s o p e d f o d n u f e R EROS INTERNATIONAL MEDIA LIMITED 77 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 44 Related party disclosures (Cont...) c) (ii) Transactions during the year with related parties Particulars Sale of film rights Eros Worldwide FZ LLC Eros International Ltd United Kingdom ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Revenue attributable to Eros Digital FZ LLC 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 Eros International Ltd United Kingdom Eros International Ltd USA INC Total Re-imbursement given Colour Yellow Productions Private Limited Eros Worldwide FZ LLC Total Assets Usage Charges paid EyeQube Studios Private Limited Total Commission expenses ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) EM Publishing Private Limited Total Investment in ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Rent expenses Mr. Sunil Lulla Mrs. Manjula K Lulla Mr. Kishore Lulla Total Interest income EyeQube Studios Private Limited Eros Worldwide FZ LLC ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Interest expenses Eros Digital Private Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) EyeQube Studios Private Limited Eros International Films Private Limited Total 78 ANNUAL REPORT 2020-21 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 11,650 2,269 12 13,931 (367) 49 138 187 98 2,286 12 - - 2,396 - 15 15 7 7 - 5 5 - - 384 36 348 768 - 372 - 372 62 173 4 888 1,127 47,828 - 80 47,908 (8,271) 68 3,092 3,160 333 4,678 12 142 67 5,232 137 70 207 7 7 2 2 4 16 16 384 36 348 768 1 - 101 102 57 9 3 636 705  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 44 Related party disclosures (Cont...) c) (ii) Transactions during the year with related parties (Cont...) Particulars Salary, commission and perquisites* to KMPs Mr. Sunil Lulla*** Mrs. Krishika Lulla Mr. Farokh Gandhi - Executive Director & Chief Financial Officer (India) Mr. Vijay Jayantilal Thaker (w.e.f. 12 August 2019) Mr. Abhishek Kanoi** (upto 12 August 2019) Mr. Pradeep Dwivedi - Chief Executive Officer (w.e.f. 10 February 2020) Total Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 521 86 84 36 - 225 952 527 86 84 23 18 41 779 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 ` NIL (31 March 2020 : ` 1 lakhs) charged to Statement of Profit and loss on account of stock compensation for awards granted. *** The remuneration accrued/paid by the company to its Vice Chairman and Managing Director for the year ended 31 March 2021 is in excess by ` 400 lakhs vis-a-vis the limits specified in section 197 of Companies Act, 2013 ('the act') read with schedule V thereto, as the Company does not have profits. The Company is in process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary. Untill then, the said excess amount is held in trust by the Vice Chairman and Managing Director. d) Transactions with related parties Particulars Content advances given Colour Yellow Productions Private Limited Total Loan and advances given EyeQube Studios Private Limited Eros Animation Private Limited EM Publishing Private Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Loan and advances Transferred ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Gratuity/Leave encashment transferred ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Sale of Assets ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Recovery of loans and advances given ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Eros Television India Private Limited EyeQube Studios Private Limited Shivam Enterprises Total Trade advances/ loans taken Eros Digital Private Limited Eros International Films Private Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Total Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 - - - - - - - 0 0 123 123 4 4 - - - - - - 510 2,750 3,260 1,104 1,104 9 0 3 1,854 1,866 - - - - - - 2,572 3 66 39 2,680 25 5,275 - 5,300 EROS INTERNATIONAL MEDIA LIMITED 79 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 44 Related party disclosures (Cont...) d) Transactions with related parties (Cont...) Particulars Repayment of advances/ loans Eros Worldwide FZ LLC Eros Digital Private Limited Big Screen Entertainment Private Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Eros International Films Private Limited Total Refund of deposits Mr. Sunil Lulla Mr. Kishore Lulla Total e) Balances with related parties Particulars Trade balances due from Eros Worldwide FZ LLC Eros International Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Eros Digital FZ LLC Total Trade balances due to Eros International Limited Big Screen Entertainment Private Limited Colour Yellow Productions Private Limited Eros International Films Private Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Eros Digital FZ LLC Total Advances due to Eros Worldwide FZ LLC Total Loans due to Eros Digital Private Limited Eros International Films Private Limited ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) EyeQube Studios Private Limited Total Content advances given to Colour Yellow Productions Private Limited Total 80 ANNUAL REPORT 2020-21 Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 - - - 2,425 1,351 3,776 - - - 13,738 43 1 - 4,333 18,115 254 60 314 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 35,124 2,195 18 4,327 41,664 282 96 3,227 54 123 18,518 22,300 311 311 619 6,800 996 49 8,464 4,782 4,782 37,884 - - 11,128 49,012 118 96 3,074 - - 18,682 21,970 311 311 562 6,832 512 38 7,944 4,782 4,782  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 44 Related party disclosures (Cont...) e) Balances with related parties (Cont...) Particulars Loans and advances due from EM Publishing Private Limited Digicine Pte Limited Eros Animation Private Limited Total Security Deposits/Amounts due from KMPs or their relatives Mr. Sunil Lulla Mrs. Manjula Lulla Mr. Kishore Lulla Total Amounts due to KMPs or their relatives Mr. Sunil Lulla Mr. Kishore Lulla Mrs. Manjula Lulla Mrs. Krishika Lulla Mrs. Meena Lulla Total Terms and conditions All outstanding balances are unsecured and repayable in cash. 45 Categories of financial assets and financial liabilities The carrying value of financial instruments by categories are as follows: Particulars Financial assets Measured at fair value through profit and loss Investments* Total Measured at amortised cost Loans Restricted deposits Other financial assets Trade receivables Cash and cash equivalents Total Measured at amortised cost Borrowings Acceptance Trade payables Other financial liabilities Total * Exclude financial instruments of investment in subsidiaries carried at cost. Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 15 38 2 55 13 75 180 268 488 241 124 21 7 881 20 39 2 61 13 75 180 268 225 143 103 2 - 473 Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 2,460 2,460 1,383 2,852 370 46,081 874 51,560 49,700 1,400 30,672 12,019 93,791 2,460 2,460 1,265 3,650 348 52,590 102 57,955 49,486 1,400 28,512 10,979 90,377 EROS INTERNATIONAL MEDIA LIMITED 81 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 46 Fair value measurement of financial instruments 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 As at 31 March 2021 Level 1 Level 2 Level 3 Amount ` in lakhs 2,460 2,460 - - - - 2,460 2,460 b. The following table shows the financial assets and liabilities measured at amortised cost on a recurring basis: Particulars Measured at amortised cost Financial assets 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 2021 Level 1 Level 2 Level 3 Amount ` in lakhs 1,383 2,852 280 90 46,081 874 51,560 4 49,696 1,400 30,672 12,019 93,791 280 - 280 - 4 - 4 - * Exclude financial instruments of investment in subsidiaries carried at cost. During the year ended 31 March 2021 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. 82 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 46 Fair value measurement of financial instruments (Cont...) 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 profit and loss Investments* Total As at 31 March 2020 Level 1 Level 2 Level 3 Amount ` in lakhs 2,460 2,460 - - - - 2,460 2,460 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 2020 Level 1 Level 2 Level 3 Amount ` in lakhs 1,265 3,650 279 69 52,590 102 57,955 63 49,423 1,400 28,512 10,979 90,377 279 - 279 - 63 - 63 - *Exclude financial instruments of investment in subsidiaries carried at cost. During the year ended 31 March 2020 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 amortized cost is not materially different from its carrying cost largely due to short term maturities of these financial assets and liabilities Following table shows the reconciliation from the opening balances to the closing balances of the level 3 values:- Particulars Balance as on 1 April 2019 Add: Employee stock option compensation expense to employee's of subsidiary Less: Fair value loss recognised through profit and loss Balance as on 31 March 2020 Add: Employee stock option compensation expense to employee's of subsidiary Less: Fair value loss recognised through profit and loss Balance as on 31 March 2021 Amount ` in lakhs 2,776 16 (332) 2,460 - - 2,460 EROS INTERNATIONAL MEDIA LIMITED 83 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 46 Fair value measurement of financial instruments (Cont...) Financial asset Fair value as at Investment in unquoted equity share 31 March 2021 31 March 2020 Equity share of :- ErosNow Private limited (Formerly known as Universal Power Systems Private Limited) ` 2,460 lakhs Equity share of :- ErosNow Private limited (Formerly known as Universal Power Systems Private Limited) ` 2,460 lakhs Fair value hierarchy Valuation techniques and key inputs Significant unobservable input Relationship of unobservable input to fair value Level 3 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. 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. A 1 % increase / decrease in the discount rate used would decrease/ increase the fair value of unquoted equity instruments by ` NIL / ` NIL (` 160 lakhs / ` 180 lakhs As at 31 March 2020). 47 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 45. 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. 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. Formal policies and guidelines have been set to achieve these objectives. The Company does not enter into speculative arrangements or trade in financial instruments and it is the Company’s policy not to enter into complex financial instruments unless there are specific identified risks for which such instruments help mitigate uncertainties. 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: Particulars Debt Less: Cash and cash equivalents Net debt Equity Net debt to equity Financial risk management objectives Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 57,511 (874) 56,637 21,104 59,531 (102) 59,429 37,980 268.37% 156.47% 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. 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 84 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 47 Financial instruments and Risk management (Cont...) 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 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 2021 91% (31 March 2020: 97 %) of trade account receivables were represented by the top 5 customer, out of which as at 31 March 2021 90 % (31 March 2020: 93 %) 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 2021, the Company did not hold any material collateral or other credit enhancements to cover its credit risks associated with its financial assets. 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 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(INR) equivalents, as at the year end: Particulars As at 31 March 2021 As at 31 March 2020 *amount represents less than one lakh Amount ` in lakhs Net balance receivables / (payables) INR 369,736 26,839 USD 5,046 355 SGD* EUR 8 1 1 - The above foreign currency arises when the Company holds monetary assets and liabilities denominated in a currency other than INR. A uniform decrease of 10% in exchange rates against all foreign currencies in position as of 31 March 2021 would have decreased in the Company’s net profit before tax by approximately ` 36,974 lakhs (31 March 2020: profit of ` 2,684 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. Particulars As at 31 March 2021 Borrowing principal payments Borrowing interest payments Acceptance Trade and other payables Total Less than 1 year 1-3 years 3-5 years Amount ` in lakhs More than 5 years 56,098 7,481 1,400 33,810 56,094 7,481 1,400 14,137 4 0 - 19,673 - - - - - - - - EROS INTERNATIONAL MEDIA LIMITED 85 STANDALONE FINANCIAL STATEMENTS Notes to the standalone financial statements and other explanatory information 47 Financial instruments and Risk management (Cont...) Particulars As at 31 March 2020 Borrowing principal payments Borrowing interest payments Acceptance Trade and other payables Total Less than 1 year 1-3 years 3-5 years Amount ` in lakhs More than 5 years 58,100 7,160 1,400 30,186 58,037 7,158 1,400 30,021 63 2 - 165 - - - - - - - - At 31 March 2021, the Company had facilities available of ` 49,034 Lakhs (31 March 2020: ` 51,556 Lakhs ) and had net undrawn amounts of ` 1,995 Lakhs (31 March 2020: ` 189 Lakhs ) available. The borrowing facility with bankers have been restructured on 22 June 2021. (Refer Note 51(b)) 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 points in interest rates against all borrowings in position as of 31 March 2021 would have decreased in the Company’s net profit before tax by approximately ` 485 Lakhs (31 March 2020:decrease net profit before tax of ` 204 Lakhs ). An equal and opposite impact would be experienced in the event of a decrease by a similar basis. 48 Auditors' remuneration Particulars As auditor Statutory audit Limited review Tax audit In other capacity Other services (certification fees) Total Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 80 15 7 102 4 4 106 80 15 7 102 5 5 107 49 50 51 (a) (b) 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. As per the provision 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 ` NIL (31 March 2020 : ` 485 lakh), of which ` 8 lakh (31 March 2020 : ` 3 lakhs) have been spent during the current year details as ` 8 lacs to Late Shree Himmatlal Harjivand ( 31 March 2020: ` 3 lakhs to Vardhaman Sanskar Dham) Post reporting date events The World Health Organization announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and classified its outbreak as a pandemic on March 11, 2020. On March 24, 2020, the Government announced lockdown across the country to contain the spread of the virus. Further, lockdown like conditions have been imposed by government to curtail the second wave in April 5, 2021. This pandemic and response thereon have impacted most of the industries. The film industry has been impacted due to closures of theatres and restrictions on film shoots. The impact on company's future operations would, to a large extent, depend on how the pandemic further develops and it’s resultant impact on the operations of the Company. The Management has evaluated the impact on its financial statements and have made appropriate adjustments, wherever required. The extent of the impact on Company’s operations remains uncertain and may differ from that estimated as at the date of approval of these standalone financial statements and will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration of COVID-19 and among other things, the impact of governmental actions imposed in response to the pandemic. The Company is monitoring the rapidly evolving situation and its potential impacts on the Company’s financial position, results of operations, liquidity, and cash flows. The company has obtained the lenders approval on 22 June, 2021 for restructuring of the borrowing facilities under the RBI's Resolution Framework for COVID-19-related Stress dated August 6, 2020 and Resolution Framework for COVID-19-related Stress – Financial Parameters dated September 7, 2020 with the cut-off date of 1 January, 2021. The defaults in the repayments of term loans instalments stands rectified on restructuring of the facilities. The impact of the restructuring has not been considered in these financial results, pending issue of revised sanction letters and other documents from all bankers. Pursuant to restructuring, the interest rate is revised to 9% p.a. link to one year MCLR. The revised repayment schedule will be as under: st nd 86 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the standalone financial statements and other explanatory information 51 Post reporting date events (Cont...) Particulars Term Loans Funded Interest Term Loans Working Capital Facilitates Amount ` in lakhs FY 22-2023 FY 21-2022 FY 2023-24 - 856 1,606 231 1,589 4,417 4,395 - 2,008 52 The company has incurred loss for the year amounting ` 16,997 lakhs in current year and ` 115,978 lakhs [after considering the impact of an impairment loss amounting ` 127,850 lakhs]. The company is dependent upon external borrowings for its working capital needs and investment in content and film rights. Given the economic uncertainty created by the novel coronavirus coupled with significant business disruptions for film distributer and broadcasting companies, there is likely be an increase in events and circumstances which may cast doubt on a Company’s ability to continues as a going concern. The merger of STX Filmworks Inc with subsidiary of ultimate holding company Eros International Plc will result into equity infusion of US$ 125 million in combined entity. These funds would improve liquidity within the group. The company has considered the impact of these uncertainties and factored them into their financial forecasts, including renewal of short-term borrowings. For this reason, Management continues to adopt the going concern basis in preparing the consolidated financial statements. 53 Leases Company as a lessee The company's leased assets primarily consist of offices. Lease of the office premises generally have lease term of 5 years. (a) The carrying amount of Right to use assets and the movements during the year are given in note 3. (b) The carrying amount of lease liabilities and the movements during the year:- Particulars Opening balance Addition Accretion of Interest Payment made Closing balance c) The amount relating to leases recognized in statement of profit and loss Depreciation of right of use of assets Interest expense on lease liability' Total (d) Undiscounted maturity analysis of lease liabilities as at end of the year Less than 1 year One to five year More than 5 year 54 Post reporting date events Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 237 2,474 - 574 2,137 277 89 366 4 2,133 - - 986 - 749 237 357 24 381 - - - No adjusting or significant non-adjusting events have occurred between 31 March 2021 and the date of authorisation of these standalone financial statements. 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 Lulla Executive Vice Chairman & Managing Director (DIN: 00243191) Sunil Srivastav Non Executive Independent Director (DIN: 00237561) Pradeep Dwivedi Chief Executive Officer Place: Mumbai Date : 28 June 2021 Farokh P. Gandhi Chief Financial Officer (India) Place: Mumbai Date : 28 June 2021 Vijay Thaker Vice President - Company Secretary and Compliance Officer EROS INTERNATIONAL MEDIA LIMITED 87 Inte ntio n ally ke pt bla n k Consolidated Financial Statements CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT To the Members of EROS INTERNATIONAL MEDIA LIMITED Report on the Consolidated Financial Statements 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 March 31, 2021, and the consolidated Statement of Profit and Loss, including consolidated Other Comprehensive Income, consolidated Statement of Changes in Equity and the consolidated Cash Flow Statement for the year then ended, and notes to the consolidated financial statements including 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 subsidiaries, 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 March 31, 2021, its loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing ("SAs") specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in 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. Material Uncertainty related to Going Concern As stated in Note No. 52 of the consolidated financial statements, the economic uncertainty created by the novel coronavirus has resulted in significant business disruptions for film distributer and broadcasting companies. These conditions, along with other matter as set forth in the aforesaid note, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this above matter. Emphasis of Matter We draw attention to Note No. 51 of the consolidated financial statements, which describes the Company's management evaluation of Covid 19 impact on the future business operations and future cash flows of the Company and it's consequential effects on the carrying value of assets as on March 31, 2021. In view of uncertain economic conditions, the Company's management's evaluation of impact on subsequent periods is highly dependent upon conditions as they evolve. Our opinion is not modified in respect of this matter. 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. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors' responsibilities for the audit of the Consolidated Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to our assessment of the risks of material misstatement of the Consolidated Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated financial statements:- to respond 90 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT Key Audit Matters Response to Key Audit Matters Revenue Recognition (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 various streams of revenue, together with the level of judgement involved make its accounting treatment for revenue a significant matter for our audit. Content Advances (Refer note 3) 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 the respective management of the companies included in 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. Our audit procedures to assess the appropriateness of revenue recognised included and were not limited to 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 significant 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 Groups's disclosure in accordance with requirements of Ind AS 115. Our audit procedures with respect to content advance, delivery of the content and it's impairment included and were not limited to following: • • • • • • 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. Examination of the approvals of write off where amounts are not recoverable. 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. Amortisation of Film and Content Rights (Refer note 1 and para 'c' 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. Determination of amortisation policy and assessing impairment of content asset involves significant judgement and estimates since it is dependent on various internal and external factors. Because of the significance of the amortisation of content and film rights to balance sheet together with the level of judgement involved make its acc- ounting treatment a significant matter for our audit. Our audit procedures to test amortisation/ impairment of film content included and were not limited to 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. EROS INTERNATIONAL MEDIA LIMITED 91 CONSOLIDATED FINANCIAL STATEMENTS Key Audit Matters Response to Key Audit Matters Trade Receivables (Refer note 1 and para 'f' 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. 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. Related party Transactions (Refer Note 44) The Company has undertaken transactions with its related parties in the ordinary course of business at arm's length. These include transactions in the loans, sales etc. as nature of disclosed in note 44 to the consolidated Ind AS financial statements. investments, Considering the significance of transactions with related parties and regulatory compliances its thereon, related party transactions and disclosure as set out in respective notes to the financial statements has been identified as key audit matter. Our audit procedures to assess the recoverability of trade receivables included and were not limited to 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 related to the recoverability of outstanding amount 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. Examination of the approvals of write off where amounts are not recoverable. 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 expected credit loss 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. Our procedures/ testing included the following: • • • • • Obtained and read the Company's policies, processes and procedures in respect of identifying related parties, obtaining approval, recording and disclosure of related party transactions. Read minutes of shareholder meetings, board meetings and minutes of meetings of those charged with governance in connection with Company's assessment of related party transactions being in the ordinary course of business at arm's length; Tested, related party transactions with the underlying contracts, confirmation letters and other supporting documents; Agreed the related party information disclosed in the financial statements with the underlying supporting documents, on a sample basis. Also reviewed the assessment of the recoverability from the related parties based on group's cash flow plan prepared by the Management. Information Other than the Financial Statements and Auditor's Report thereon 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 in equity and income, consolidated statement of changes consolidated cash flows 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 fair the accounting records, relevant 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 preparation of the consolidated financial statements by the directors of the holding Company, as aforesaid. to the preparation and 92 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT 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. Materiality is the magnitude of misstatements in the Consolidated Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Consolidated 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 Consolidated Financial Statements. 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 of the two subsidiaries, whose financials results/statements reflect total assets of ` 23,474 Lakhs as at March 31, 2021 and total revenue of ` 182 Lakhs and ` 1,020 Lakhs and total net profit of ` 278.69 Lakhs and net loss of ` 132 Lakhs, and total comprehensive income of ` 278.69 Lakhs and net loss of ` 132 Lakhs, each for the quarter ended March 31, 2021 and for the year ended on that date respectively, and net cash inflows of ` 881 Lakhs for the year ended March 31, 2021, as considered in the Statement. These financial statements and other financial information have been furnished to us by the Management and our report on the Statement, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the reports of the other auditor. 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; EROS INTERNATIONAL MEDIA LIMITED 93 CONSOLIDATED FINANCIAL STATEMENTS b) c) d) e) f) 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, the Consolidated Statement of Changes in Equity 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; The matter described under Material Uncertainty Related to Going Concern paragraph above and under Qualified opinion paragraph in Annexure A, in our opinion, may have an adverse effect on the functioning of the Company. On the basis of the written representations received from the directors of the Holding Company as on March 31, 2021 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiaries, none of the directors of the Group companies incorporated in India is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the Act; 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". Our report expresses an qualified opinion on the adequacy and operating effectiveness of the Group; 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 Holding Company to its Executive Vice Chairman and Managing Director for the year ended March 31, 2021 is in excess by Rs. 400 Lakhs vis-à-vis the limits specified in Section 197 of Companies Act, 2013 ('the Act') read with Schedule V thereto as the Holding Company does not have profits. The Holding Company has represented to us that it is in the process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary. 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 consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group - Refer Note 40 to the consolidated financial statements; The Group did not have any material foreseeable losses on long-term contracts including derivative contracts during the year ended March 31, 2021, and 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 UDIN:- 21103141AAAAOL8807 Place- Mumbai Date: 28 June, 2021 th 94 ANNUAL REPORT 2020-21  | CORPORATE OVERVIEW MANAGEMENT REPORT | FINANCIAL MANAGEMENT ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF EROS INTERNATIONAL MEDIA LIMITED (Referred to in paragraph (g) 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 incorporated in India as of March 31, 2021 in conjunction with our audit of the consolidated financial statements of the Company for the year then ended. Management Responsibility for the Internal Financial Controls 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 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"). 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. Auditor's Responsibility Our responsibility is to express an opinion on the Holding Company and its subsidiary companies incorporated in India, 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 consolidated 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 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 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. Qualified Opinion According to the information and explanations given to us and based on our audit, we have identified material weakness as at March 31, 2021 with regards advances given for content development which has remained under production for a substantial period of time. The controls over assessing the further development or alternative arrangements needs to be strengthen failing which the advances may be potentially not recovered and written off in future. A 'material weakness' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Group annual or interim financial statements will not be prevented or detected on a timely basis. In our opinion, except for the possible effects of the material weakness described above on the achievement of the objective of the control criteria, the Group has, in all material respects, adequate internal financial controls over financial reporting with reference to these Consolidated Financial Statements and such internal financial controls over financial reporting with reference to these Consolidated Financial Statements were operating effectively as at March 31, 2021, based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note issued by ICAI. We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2021 Consolidated financial statements, and the material weakness does not / do not affect our opinion on the Consolidated financial statements. Other Matters Our aforesaid reports under Section 143(3) (i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to its two subsidiary companies, which are companies incorporated in India, is based on the corresponding reports of the auditors of such companies incorporated in India. For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No. 101720W/W100355 Amit Chaturvedi Partner Membership No. 103141 UDIN:- 21103141AAAAOL8807 Place- Mumbai Date: 28 June, 2021 th EROS INTERNATIONAL MEDIA LIMITED 95 Consolidated Balance Sheet as at 31 March 2021 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 Financial assets a) Loans b) Restricted bank deposits c) Other financial assets Deferred tax assets Other non-current assets Total non-current assets Current assets Inventories Financial assets a) Trade and other receivables b) Cash & 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 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 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 Other current liabilities Current tax liabilities Total current liabilities Total liabilities Total equity and liabilities Significant Accounting Policies and Key Accounting Estimates and Judgements Notes to the Financial Statements Notes As at 31 March 2021 Amount ` in lakhs As at 31 March 2020 2 3 3 3 3 4 10 5 21 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 23 24 25 26 27 28 29 1 2-54 5,330 29,930 37,532 928 17,793 80,337 98 373 1,240 10,304 1,83,865 3,803 36,018 51,041 1,127 8,887 76,432 46 373 775 7,101 1,85,603 850 4 47,870 2,656 2,754 2,902 151 342 57,525 2,41,390 9,586 94,409 1,03,995 1,368 1,05,363 3 17,999 1,848 356 2,521 22,727 45,988 1,400 21,763 10,684 327 25,308 7,830 1,13,300 1,36,027 2,41,390 55,224 1,107 3,609 3,589 468 63 64,064 2,49,667 9,563 1,15,051 1,24,614 1,428 1,26,042 67 118 47 350 4,679 5,261 46,177 1,400 35,363 11,447 307 16,322 7,348 1,18,364 1,23,625 2,49,667 As per our report of even date For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No.: 101720W/W100355 Amit Chaturvedi Partner Membership No: 103141 For and on behalf of Board of Directors Sunil Lulla Executive Vice Chairman Non Executive Independent Chief Executive Officer and Managing Director (DIN: 00243191) Director (DIN: 00237561) Pradeep Dwivedi Sunil Srivastav Place: Mumbai Date : 28 June 2021 Place: Mumbai Date : 28 June 2021 96 ANNUAL REPORT 2020-21 Farokh P Gandhi Chief Financial Officer Vijay Thaker Vice President - Company Secretary and Compliance Officer CONSOLIDATED FINANCIAL STATEMENTS Consolidated statement of profit and loss for the year ended as at 31 March 2021 Notes Year Ended 31 March 2021 Amount ` in lakhs Year Ended 31 March 2020 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/ (loss) before tax and exceptional items Exceptional items Gain/ (loss) Profit/ (loss) before tax Tax expense Current tax Deferred tax Profit/ (loss) 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 Items that will be reclassified to profit or loss Exchange differences on translating foreign operations (i) Total Other Comprehensive Income for the year 30 31 32 33 34 35 36 37 38 21 21 26,197 12,676 38,873 26,749 (846) 4,992 10,587 1,031 11,360 53,873 81,360 12,026 93,386 38,439 297 3,787 7,056 1,247 48,754 99,580 (15,000) (6,194) (2,301) (1,55,352) (17,301) (1,61,546) 1,304 (519) 785 (2,897) (18,528) (21,425) (18,086) (1,40,121) (12) (1) (2,812) (2,825) 140 (35) 7,706 7,811 Total Comprehensive Income for the year (20,911) (1,32,310) Net Profit/ (loss) 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/ (loss) attibutable to : a) Owners of the Company b) Non Controlling Interest Earnings per share of face value of ` 10 each 1. Basic 2. Diluted Significant Accounting Policies and Key Accounting Estimates and Judgements Notes to the Financial Statements (18,026) (60) (1,40,521) 400 (2,825) - 7,811 - (20,851) (60) (1,32,710) 400 (18.90) (18.90) (147.06) (147.06) 39 39 1 2-54 As per our report of even date For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No.: 101720W/W100355 Amit Chaturvedi Partner Membership No: 103141 For and on behalf of Board of Directors Sunil Lulla Executive Vice Chairman Non Executive Independent Chief Executive Officer and Managing Director (DIN: 00243191) Director (DIN: 00237561) Pradeep Dwivedi Sunil Srivastav Place: Mumbai Date : 28 June 2021 Place: Mumbai Date : 28 June 2021 Farokh P Gandhi Chief Financial Officer Vijay Thaker Vice President - Company Secretary and Compliance Officer EROS INTERNATIONAL MEDIA LIMITED 97 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT Consolidated Cash Flow Statement for the year ended 31 March 2021 Cash flow from operating activities Loss before tax Non-cash adjustments to reconcile Profit before tax to net cash flows 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 Provision for Content advances written back Impact of expected credit loss Provision for doubtful advances Impairment of content advance (exceptional item) Impairment of film rights (exceptional item) Impairment of other advances (exceptional item) Impairement of Content advance write off (exceptional item) Impairment of Goodwill (exceptional item) Finance costs Finance income Expense on employee stock option scheme Unrealised foreign exchange gain Operating profit before working capital changes Movements in working capital: Increase in trade payables Increase / (Decrease) in other financial liabilities Increase / (Decrease) in Employee benefit obligations Increase / (Decrease) in Other liabilities (Increase) / Decrease in inventories (Increase) / Decrease in trade receivables (Increase) / Decrease in short-term loans (Increase)/Decrease in other current assets (Increase) / Decrease in long-term loans 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 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) / from investing activities (B) Cash flows from financing activities Proceeds from issue of equity shares Repayment of long-term borrowings Repayment from short-term borrowings-net Finance costs Net cash used in financing activities (C) Net Increaese / (decrease) in cash and cash equivalents (A + B + C) Cash and cash equivalents at the beginning of the year Effect of exchange rate on consolidation of foreign subsidiaries Cash and cash equivalents at the end of the year 98 ANNUAL REPORT 2020-21 Year ended 31 March 2021 Amount ` in lakhs Year ended 31 March 2020 (17,301) (1,61,546) 1,031 16,920 1,069 (1,786) 5,596 119 531 (3,284) (72) 83 - 2,301 - - - 10,794 (6,256) 98 649 10,492 4,142 2,473 26 6,869 (846) 8,952 687 (2,924) 1,894 317 32,082 (2,914) 29,168 (152) (17,674) 803 - 248 (16,775) 24 (2,319) (2,455) (6,203) (10,953) 1,440 1,107 109 2,656 1,247 24,152 46,494 (892) - 2 184 (1,687) (2,527) - 1,29,015 20,815 762 3,025 1,735 7,346 (4,387) 101 1,138 64,977 4,449 (13) (150) (12,562) 298 (23,021) (1,762) 184 (25,347) 1,697 8,750 (3,667) 5,083 (78) (7,637) 16,315 1 999 9,600 12 (5,258) (3,459) (6,705) (15,410) (727) 646 1,188 1,107 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Cash Flow Statement for the year ended 31 March 2021 Change in liability arising from financing activities:- As on 1 April 2020 Cash Flows Adjustments for processing fees, forex and FITL* As on 31 March 2021 As on 1 April 2019 Cash Flows Adjustments for processing fees As on 31 March 2020 * Morotorium interest converted in Funded Interest Term Loan Notes 1 to 54 form an integral part of these consolidated financial statements Year ended 31 March 2021 Amount ` in lakhs Year ended 31 March 2020 Acceptances Total 1,400 - - 1,400 5,796 (4,396) - 1,400 56,283 (4,774) 2,284 53,793 64,988 (8,717) 12 56,283 Non current borrowings 8,706 (2,319) 18 6,405 Current borrowing 46,177 (2,455) 2,266 45,988 13,924 (5,258) 40 8,706 45,268 937 (28) 46,177 As per our report of even date For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No.: 101720W/W100355 Amit Chaturvedi Partner Membership No: 103141 For and on behalf of Board of Directors Sunil Lulla Executive Vice Chairman Non Executive Independent Chief Executive Officer and Managing Director (DIN: 00243191) Director (DIN: 00237561) Pradeep Dwivedi Sunil Srivastav Place: Mumbai Date : 28 June 2021 Place: Mumbai Date : 28 June 2021 Farokh P Gandhi Chief Financial Officer Vijay Thaker Vice President - Company Secretary and Compliance Officer EROS INTERNATIONAL MEDIA LIMITED 99 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT Consolidated Statement of Changes in Equity for the year ended as at 31 March 2021 A. Equity share capital Balance as at 31 March 2019 Add: Issued on exercise of employee share options Balance as at 31 March 2020 Add: Issued on exercise of employee share options Balance as at 31 March 2021 Number Amount in ` Lakhs 9,55,08,140 1,20,883 9,56,29,023 2,35,795 9,58,64,818 9,551 12 9,563 23 9,586 B. Other Equity Particulars Balance as at 31 March 2019 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 2020 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 2021 Securities Premium Reserve General Reserves and Capital Reserve Share Options Outstanding Retained Earnings Foreign Currency Translation Reserve Other comprehensive income / (loss) for the year Amount in ` Lakhs Total Other Reserve Non- Controlling Interest Total Equity 41,547 564 1,344 1,94,341 9,748 116 2,47,660 1,028 2,48,688 - - - 230 - - - - - - - (1,40,521) - (1,40,521) 400 (1,40,121) - - 7,762 49 7,811 - 7,811 - (1,40,521) 7,762 49 (1,32,710) 400 (1,32,310) (230) 101 - - - - - - - 101 - - - 101 41,777 564 1,215 53,820 17,510 165 1,15,051 1,428 1,16,479 - - - 451 - - - - - - - - (18,026) - (18,026) (60) (18,086) - (2,756) 42 (2,714) - (2,714) - (18,026) (2,756) 42 (20,740) (60) (20,800) (451) 98 - - - - - - - 98 - - - 98 42,228 564 862 35,794 14,754 207 94,409 1,368 95,777 As per our report of even date For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No.: 101720W/W100355 Amit Chaturvedi Partner Membership No: 103141 For and on behalf of Board of Directors Sunil Lulla Executive Vice Chairman Non Executive Independent Chief Executive Officer and Managing Director (DIN: 00243191) Director (DIN: 00237561) Pradeep Dwivedi Sunil Srivastav Place: Mumbai Date : 28 June 2021 Place: Mumbai Date : 28 June 2021 Farokh P Gandhi Chief Financial Officer Vijay Thaker Vice President - Company Secretary and Compliance Officer 100 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTS Summary of significant accounting policies and explanatory notes to the consolidated financial statements 1. Corporate policies Information and Significant accounting 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). Forward Contacts measured at fair value. 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. EROS INTERNATIONAL MEDIA LIMITED 101 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT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 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. 31st March 2021. 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 Revenue from contracts are recognized only when the contract has been approved by the parties to the contract and creates enforceable rights and obligations. 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 102 ANNUAL REPORT 2020-21 exchange for those products or services. Revenue do not include the taxes collected from the customer on behalf of taxing authorities. 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. 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. . In case of variable consideration, , the Group estimates, at the contract inception, 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 associated with the variable consideration is resolved. In making this assessment the Group consider 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 deferred revenue under other current liabilities in the Balance Sheet (see Note 28). 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 balance sheet , 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 the 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 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 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 —. In arrangements for television syndication, license fees received in advance which do not meet the revenue recognition criteria, including commencement of the availability for broadcast under the terms of the related licensing agreement, are included in contract liability until the criteria for recognition is met. Revenues from television licensing arrangements are recognized when the feature film or television program is delivered and the period for the exploitation of rights has begun. CONSOLIDATED FINANCIAL STATEMENTS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. 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.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 Group 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 3. 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 statement of profit and loss within cost of sales. 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 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. 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. 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 EROS INTERNATIONAL MEDIA LIMITED 103 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT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. Irrespective of existence of indicators of impairment, group 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 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 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 Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. f. Impairment of financial assets In accordance with Ind AS 109, the Group apply 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 follow ‘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 104 ANNUAL REPORT 2020-21 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 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 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. 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 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. CONSOLIDATED FINANCIAL STATEMENTS Post-employment benefits and other long term employee benefits Defined contribution plan utilizing the modified retrospective approach, and therefore, results for reporting periods beginning after April 1, 2019 are presented under the new lease standard, while prior periods have not been adjusted. Provident fund & National Pension scheme: The Group’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 Group has no further obligation beyond making its contribution, which is expensed in the year to which it pertains. 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 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 compensated absences: Accumulated 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 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 share capital with any excess being recorded as securities premium. j. Leases The Group adopted Ind AS 116 ‘Leases’ on April 1, 2019, The Group as a lessee: The Group assesses, whether the contract is, or contains, a lease at the inception of the contract or upon the modification of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group at the commencement of the lease contract (RoU) asset at cost and recognizes a Right-of-Use corresponding lease liability, except for leases with a term of twelve months or less (short-term leases) and leases for which the underlying asset is of low value (low-value leases). For these short-term and low-value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The cost of the right-of-use assets comprises the amount of the initial measurement of the lease liability, adjusted for any lease payments made at or prior to the commencement date of the lease, any initial direct costs incurred by the Group, any lease incentives received and expected costs for obligations to dismantle and remove right-of-use assets when they are no longer used. Subsequently, the right-of-use assets is measured at cost less any accumulated depreciation and accumulated impairment losses, if any. The right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease over the shorter of the end of the lease term or useful life of the right-of-use asset. Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount may not be recoverable using cash flow projections for the useful life. For lease liabilities at commencement date, the Group measures the lease liability at the present value of the future lease payments as from the commencement date of the lease to end of the lease term. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the Group ‘s incremental borrowing rate for the asset subject to the lease in the respective markets. Subsequently, the Group measures the lease liability by adjusting carrying amount to reflect interest on the lease liability and lease payments made. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever there is a change to the lease terms or expected payments under the lease, or a modification that is not accounted for as a separate lease The portion of the lease payments attributable to the repayment of lease liabilities is recognized in cash flows used in financing activities. Also, the portion attributable to the payment of interest is included in cash flows from financing activities. Further, Short-term lease payments, payments for leases for which the underlying asset is of low-value and variable lease payments not included in the measurement of the lease liability is also included in cash flows from operating activities. EROS INTERNATIONAL MEDIA LIMITED 105 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTThe Group as a lessor: In arrangements where the Group is the lessor, it determines at lease inception whether the lease is a finance lease or an operating lease. Leases that transfer substantially all of the risk and rewards incidental to ownership of the underlying asset to the counterparty (the lessee) are accounted for as finance leases. Leases that do not transfer substantially all of the risks and rewards of ownership are accounted for as operating leases. Lease payments received under operating leases are recognized as income in the statement of profit and loss on a straight-line basis over the lease term or another systematic basis. The Group apply another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset is diminished. 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. 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 (INR) which is Group’s functional and presentation currency. l. Financial instrument Non-derivative financial instruments 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 profit 106 ANNUAL REPORT 2020-21 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. 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 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 The Financial asset is measures at amortised cost if both the following conditions are met: 1. The asset is held within a business model whose objective is to hold the assets for collecting contractual cash flows; and 2. 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 initial measurement, such After financial assets are subsequently measured at amortised cost using the effective interest rate (the “EIR”) method. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income/other income in the Statement of Profit & Loss. 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 rates. Impairment loss allowance recognized during the year is charged to Statement of Profit and Loss. 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 CONSOLIDATED FINANCIAL STATEMENTS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 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 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 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 All financial liabilities are recognised initially at its fair value, adjusted by directly attributable transaction costs. Financial liabilities 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. Financial liabilities at amortised cost After initial recognition, 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. Equity Instrument All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at fair value through profit and loss with all changes recognised in the Statement of Profit and Loss .For all other equity instruments, the Group may make an irrevocable election to present in other comprehensive income, the subsequent changes in the fair value. The Group make such election on an instrument-by-instrument basis. If the Group decide to classify an equity instrument as at fair value through other comprehensive income, then all fair value changes on the instrument, excluding dividends and impairment loss, are recognised in other comprehensive income. There is no recycling of the amounts from the other comprehensive income to the Statement of Profit and Loss, even on sale of the investment. However, the Group may transfer the cumulative gain or loss within categories of equity. 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. 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 EROS INTERNATIONAL MEDIA LIMITED 107 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT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 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 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. 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 (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 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 108 ANNUAL REPORT 2020-21 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., 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, 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 Group are segregated. In line with the amendments to Ind AS 7 Statement of Cash flows (effective from April 1, 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 recognise a liability for dividends to equity holders of the Group when the dividend is authorized and the dividend is no longer at the discretion of the Group. 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 At the date of approval of these financial statements, the Group have not applied the amendments to IndAS made by Ministry of Corporate Affairs vide Notification dated 18 June, 2021 that have been issued but are not yet effective. Major amendments applicable to company notified in the notification are provided below: i. Ind AS 116 - Leases – The amendment extends the benefits of the COVID 19 related rent concession that were introduced in the previous year (which allowed lessees to recognize COVID 19 related rent concessions as income rather than as lease modification) from 30 June, 2021 to 30 June, 2022. ii. Ind AS 109 - Financial Instruments – The amendment for assessment of provides a practical expedient CONSOLIDATED FINANCIAL STATEMENTS iii. iv. v. vi. vii. contractual cash flow test, which is one of the criteria for being eligible to measure a financial asset at amortized cost, for the changes in the financial assets that may arise as a result of Interest Rate Benchmark Reform. An additional temporary exception from applying hedge accounting is also added for Interest Rate Benchmark Reform. Ind AS 101 - Presentation of Financial Statements – The amendment substitutes the item (d) mentioned in paragraph B1 as ‘Classification and measurement of financial instruments. The term ‘financial asset’ has been replaced with ‘financial instruments. Ind AS 102 - Share-Based Payment – The amendments to this standard are made in reference to the Conceptual Framework of Financial Reporting under Ind AS in terms of defining the term ‘Equity Instrument’ which shall be applicable for the annual reporting periods beginning on or after 1 April, 2021. Ind AS 103 - Business Combinations – The amendment substitutes the definition of ‘assets’ and ‘liabilities’ in accordance with the definition given in the framework for the Preparation and Presentation of Financial Statements in accordance with Ind AS for qualifying the recognition criteria as per acquisition method. Ind AS 105 - Non-current assets held for sale and discontinued operations – The amendment substitutes the definition of – “fair value less costs to sell” with “fair value less costs of disposal”. Ind AS 107 - Financial Instruments: Recognition, Presentation and Disclosure – The amendment clarifies the certain additional disclosures to be made on account of Interest Rate Benchmark Reform like the nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate benchmark reform; the entity‘s progress in completing the transition to alternative benchmark rates, and how the entity is managing the transition. viii. Ind AS 111 - Joint Arrangements – In order to maintain consistency with the amendments made in Ind AS 103, respective changes have been made in Ind AS 111. ix. x. xi. Ind AS 115 - Revenue from Contracts with Customers – Certain amendments have been made in order to maintain consistency with number of paragraphs of IFRS 15. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors – In order to maintain consistency with the amendments made in Ind AS 114 and to substitute the word ‘Framework’ with the ‘Conceptual Framework of Financial Reporting in Ind AS’, respective changes have been made in the standard. Ind AS 16 - Property, Plant and Equipment –The amendment has been made by substituting the words “Recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use” with “Recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use”. xii. Ind AS 34 - Interim Financial Reporting –The amendments to this standard are made in reference to the conceptual framework of Financial Reporting in Ind AS. xiii. Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets – The amendment substitutes the definition of the term ‘Liability’ as provided in the Conceptual Framework for Financial Reporting under Indian Accounting Standards. xiv. Ind AS 38 - Intangible Assets – The amendment substitutes the definition of the term ‘Asset’ as provided in the Conceptual Framework for Financial Reporting under Indian Accounting Standards. The Group is evaluating the impact of these amendments. 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 Group 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. Estimation of uncertainties relating to global health pandemic from COVID-19: The World Health Organization announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and classified its outbreak as a pandemic on 11 March 2020. On 24 March 2020, the Indian government announced lockdown across the country to contain the spread of the virus. Further, lockdown like conditions have been imposed by government to curtail the second wave in 5 April 2021. This pandemic and response thereon have impacted most of the industries. The impact on future operations would, to a large extent, depend on how the pandemic further develops and it’s resultant impact on the operations of the Group. The Management has evaluated the impact on its financial statements and have made appropriate adjustments, wherever required. The extent of the impact on Group’s operations remains uncertain and may differ from that estimated as at the date of approval of these consolidated financial statements and will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration of COVID-19 and among other things, the impact of governmental actions imposed in response to the pandemic. The Group is monitoring the rapidly evolving situation and its potential impacts on the Group’s financial position, results of operations, liquidity, and cash flows. b. 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 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 Group use a stepped method of amortization on EROS INTERNATIONAL MEDIA LIMITED 109 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT 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, 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. c. 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. d. Fair value measurement of ESOP Liability 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 42. e. 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. f. 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 Group’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. g. Impairment of non-financial assets impairment, management estimates the In assessing 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. h. 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. i. 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. 110 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements and other explanatory information 2 Property, plant and equipment- Details of the Group’s property, plant and equipment and their carrying amounts are as follows: Gross carrying amount Buildings Leasehold Improvements Balance as at 31 March 2019 4,108 Additions Adjustments/ disposals Balance as at 31 March 2020 - - 4,108 869 71 - 940 Additions Adjustments/ disposals Balance as at 31 March 2021 Accumulated depreciation - - 4,108 Buildings - - 940 Leasehold Improvements Balance as at 31 March 2019 1,390 Depreciation charge Adjustments/ disposals Balance as at 31 March 2020 Depreciation charge Adjustments/ disposals Balance as at 31 March 2021 132 - 1,522 126 - 1,648 401 226 - 627 141 (1) 767 Furniture and fixtures 742 Motor Vehicles Office equipment 837 355 Data processing equipment 1,616 Studio equipment Amounts ` in lakhs Total Right of Use 1,621 - 10,148 0 (1) 741 - - 837 2 (1) 356 5 (0) 1,621 - - 1,621 1,331 - 1,331 1,409 (2) 11,555 - (25) 716 Furniture and fixtures 658 - - 837 Motor Vehicles 3 (67) 292 Office equipment 521 286 214 (106) 1,729 Data processing equipment 1,506 25 1 684 17 (25) 676 90 - 611 60 - 671 30 1 317 17 (66) 268 31 1 1,538 56 (104) 1,490 - (28) 1,593 Studio equipment 2,474 (38) 3,767 Right of Use 2,691 (264) 13,982 Total 1,555 - 6,317 21 - 1,576 15 (28) 1,563 463 421 884 367 325 1,576 1,018 424 7,759 799 101 8,659 Net carrying amount Capital-work-in progress 31 March 2020 Capital-work-in progress 31 March 2021 Balance as at 31 March 2020 Balance as at 31 March 2021 The Company's immovable property situated in Mumbai, India is pledged against the borrowings as explained in note 17 and 23 2,586 2,460 83 239 226 166 313 173 39 24 45 30 57 40 7 7 447 2,191 3,803 5,330 3 a) Intangible assets Details of the Group’s Intangible assets and their carrying amounts are as follows: Gross carrying amount Balance as at 31 March 2019 Additions Transfer to film and content rights Amounts written back Impairement of content advance Foreign currency translation difference Balance as at 31 March 2020 Additions Transfer to film and content rights Amount written off Provision for doubtful advances Impairment of content advance written off Advance written off against impairment Reversal Impairment of content advance Foreign currency translation difference Balance as at 31 March 2021 Content advances 1,58,315 12,305 (10,091) 1,687 (1,29,015) 2,817 36,018 12,028 (15,273) (5,596) (531) 6,074 (6,074) 3,284 - 29,930 Film Rights Amounts ` in lakhs Total Others 5,01,352 2,681 5,04,033 3,265 (3,563) - - 7,959 5,09,013 6,111 - - - - - - (2,930) 5,12,194 16 - - - 2,697 33 - - - - - - - 2,730 3,281 (3,563) - 7,959 5,11,710 6,144 - - - - - - (2,930) 5,14,924 EROS INTERNATIONAL MEDIA LIMITED 111 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the consolidated financial statements and other explanatory information Accumulated amortisation Balance as at 31 March 2019 Amortisation charge Adjustments/ Deletion Foreign currency translation difference Balance as at 31 March 2020 Amortisation charge Adjustments/ Deletion/ Impairement Foreign currency translation difference Balance as at 31 March 2021 Net carrying amount Balance as at 31 March 2020 Balance as at 31 March 2021 Film Rights Amounts ` in lakhs Total Others 4,10,118 1,341 4,11,459 24,152 17,261 6,441 4,57,972 16,920 2,301 (2,531) 4,74,662 229 - - 1,570 232 - - 1,802 24,381 17,261 6,441 4,59,542 17,152 2,301 (2,531) 4,76,464 36,018 29,930 51,041 37,532 1,127 928 52,168 38,460 Intangible assets under development Balance as at 31 March 2020 Balance as at 31 March 2021 3 b) Goodwill on consolidation 8,887 17,793 On 1 August 2015, Company acquired 100% of the shares and voting interests in ErosNow Private Limited (formerly known as Universal Power Systems Private Limited). Goodwill of ` 2,130 lakhs was recognised on acquisition. Impairement provision of ` 395 lakhs was made upto previous year. During the year 31 March 2020, Impairement loss of ` 1,735 lakhs has been recognised. 3 c) The closing balance of content advances are net of provision for impairment ` 119,657 lakhs (31 March 2020:- ` 129,015 lakhs) 4 Loans Amounts due from related parties (refer note 44) Unsecured, considered good Total 5 Other financial assets Security deposits Security deposits- related parties (refer note 44) Security deposits- others Total 6 Other non- current assets Advance payment of taxes (net of provision) Balances due with statutory authorities Deferred expeses Total 112 ANNUAL REPORT 2020-21 Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 79,792 545 80,337 268 105 373 2,160 8,144 - 10,304 75,887 545 76,432 268 105 373 1,668 5,218 215 7,101 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 7 Inventory Film Rights Total 8 Trade and other receivables Secured, considered good Unsecured, considered good Dues from related parties (refer note 44) Accrued Income Less : Expected credit loss * Total *Movement of Expected credit loss Opening Balance Addition during the year Reverse During the year OCI Movement Transfer to Bad debts* Foreign Currency Translation reserve Closing Balance Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 850 850 - 2,325 42,175 4,093 48,593 (723) 47,870 1,561 - (170) (56) (651) 39 723 4 4 1,327 5,343 49,012 1,103 56,785 (1,561) 55,224 11,007 44,974 (2,527) 56 (51,998) 49 1,561 All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair value. 9 Cash & cash equivalents Balances with banks -in current accounts 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. 11 Loans and advances Unsecured, considered good Loans and advances to employees Other loans Security deposits Total 2,574 82 2,656 - 2,656 - 2,754 98 2,852 (98) 2,754 204 2,665 33 2,902 1,021 86 1,107 - 1,107 1 3,608 46 3,655 (46) 3,609 100 3,458 31 3,589 EROS INTERNATIONAL MEDIA LIMITED 113 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 12 Other financial assets Interest accrued Amounts due from related parties (refer note 44) Others Total 13 Other current assets Prepaid-expenses Total Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 97 54 - 151 342 342 70 319 79 468 63 63 Amount ` in lakhs, except share data As at 31 March 2021 As at 31 March 2020 Number Amounts Number Amounts 14 Share capital Authorised share capital Equity shares of ` 10 each Issued, subscribed and fully paid up Equity shares of ` 10 each Total 12,50,00,000 12,50,00,000 9,58,64,818 9,58,64,818 12,500 12,500 12,50,00,000 12,50,00,000 9,586 9,586 9,56,29,023 9,56,29,023 a) Reconciliation of paid up share capital (Equity Shares) Balance at the beginning of the year Add: Shares issued during the year Balance at the end of the year 9,56,29,023 2,35,795 9,58,64,818 9,563 23 9,586 9,55,08,140 1,20,883 9,56,29,023 12,500 12,500 9,563 9,563 9,551 12 9,563 During the year, the Company has issued total 235,795 equity shares (31 March 2020 120,883) 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 Equity shares of ` 10 each Eros Worldwide FZ LLC - the Holding Company Eros Digital Private Limited - fellow subsidiary 3,78,77,302 2,17,00,000 3,788 2,170 3,78,77,302 2,17,00,000 3,788 2,170 As at 31 March 2021 As at 31 March 2020 Number Amounts Number Amounts c) Details of Shareholders holding more than 5% of the shares Equity shares of ` 10 each Eros Worldwide FZ LLC - the Holding Company Eros Digital Private Limited - fellow subsidiary 3,78,77,302 2,17,00,000 39.51% 22.64% 3,78,77,302 2,17,00,000 39.61% 22.69% As at 31 March 2021 As at 31 March 2020 Number % holding in the class Number % holding in the class 114 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 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 2,276,267 equity shares ( 31 March 2020: 2,222,005) 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 ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) at a premium of ` 586 per share in exchange for the entire shareholding of Erosnow 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. 15 Other Equity Securities premium reserve Balance at the beginning of 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 subsidiary Balance at the end of the year Capital reserves As per last year balance sheet General reserves As per last year balance sheet Surplus from Statement of Profit & Loss Balance at the beginning of the year Add : Profit/ (loss) 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 Balance at the ending of the year b) Remeasurement gain on defined benfit plan c) ECL Rate Difference Total As at 31 March 2021 Amount ` in Lakhs As at 31 March 2020 41,777 451 42,228 1,215 (451) 98 - 862 41,547 230 41,777 1,344 (230) 85 16 1,215 56 56 508 508 53,820 (18,026) 35,794 1,94,341 (1,40,521) 53,820 17,510 (2,756) 14,754 207 - 9,748 7,762 17,510 221 (56) 94,409 1,15,051 EROS INTERNATIONAL MEDIA LIMITED 115 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the consolidated financial statements and other explanatory information Nature and Purpose of Reserves:- Securities Premium Reserve: The amount received in excess of face value of the equity shares is recognised 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. General Reserve : The General Reserve is used from time to time to transfer profit from retained earning for appropriation purpose. 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 begning of the year Opening balance Profit/(loss) for the year 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 2021 As at 31 March 2020 1,428 (60) 1,368 1,028 400 1,428 Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 3,576 8 69 2,765 6,418 (13) (6,402) 3 5,541 96 160 2,940 8,737 (31) (8,639) 67 *Term loans from banks carry an interest rate between 12.5% - 15.5% are secured by pari passu first charge on the 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 Stx Global Corporation (formerly known as 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 between 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. 116 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information Maturity profile of long term borrowing is set out below:- Secured Term loan from banks Car loan Others Unsecured Term loan from others Total Default in repayment as on 31 March, 2021 Term loan from banks Total Amount ` in Lakhs As at 31 March 2021 Less than 1 year 1-3 years 1-3 years 3,563 - 69 2,765 6,397 - 3 - - 3 - - - - Principal due 951 951 The above defaults stands rectified on approval of restrucuturing of loan facilities by bankers on 22nd June, 2021. The revised terms of the borrowings, applicable from the cut off date of 1st January, 2021 are given in Note 52. 18 Trade payable - non current Payable to related parties (refer note 44) Total 19 Other Financial Liabilities Security desposits Lease Liability Total 20 Employee benefit obligations - non current Provision for gratuity (refer note 41) Leave encashment Total Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 17,999 17,999 118 118 Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 25 1,823 1,848 25 22 47 Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 356 - 356 344 6 350 EROS INTERNATIONAL MEDIA LIMITED 117 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 21 Deferred Taxes 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 Impairment Total Deferred Tax Assets Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 90 8,754 8,844 1,156 - - 2,908 9 40,349 44,422 48 9,080 9,128 962 - 10 639 63 31,417 33,091 Restricted to and consequent impact (34,338) (23,188) Total Deferred Tax Assets/ (Liabilities)- net 1,240 775 Significant management judgement is considered in determining provision for income tax, deferred tax assets and liabilities and recoverability of deferred tax asset. Net deferred tax assets have been restricted to NIL on conservative basis for Eros International Media Limited standalone financial. Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet. The business loss for AY 2021-22 amounting to ` 4,929 Lakhs (including unabsorbed depriciation/amortization `2,639 lakhs), deferred tax relating that to `1,722 Lakhs can carried forward till AY 2029-2030. Reconciliation of tax expense and the accounting profit multiplied by India's domestic tax rate: Particulars 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 Items deductible for tax purpose Effect of MAT Credit Others As at 31 March 2021 As at 31 March 2020 (17,301) (1,61,546) 785 (4.54)% 0.00% 7.04% 18.19% (0.49)% 14.91% 0.00% (0.01)% (0.32)% (21,425) 13.26% 0.00% (1.90)% (3.39)% 15.19% 0.29% (1.64)% 0.00% (0.03)% Average Income Tax Rate applicable to individual entities 34.78% 21.78% 22 Other non-current liabilities Deferred revenue Total 118 ANNUAL REPORT 2020-21 2,521 2,521 4,679 4,679 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information Particulars 23 Short term borrowings Secured Secured from banks Unsecured Unsecured from others From related parties (refer note 44) Total Secured short term borrowings include: Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 39,995 39,943 5,374 619 45,988 5,672 562 46,177 Cash credit/FITL/WCDL carry an interest rate between 10.5 % - 16.5 % , 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 9% - 10.5% for INR bills and 6M MCLR+Spread or 6M LIBOR+Spread 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 8% - 10% for INR and 6M MCLR+Spread or 6M LIBOR+ Spread 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 STX Global Corporation (formerly known as 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 15% - 16.5% , secured by security provided by holding company. Default in repayment as on 31 March, 2021 Packing Credit/Export Bill FITL Total Principal due 9,279 2,213 11,492 The above defaults stands rectified on approval of restrucuturing of loan facilities by bankers on 22 June, 2021. The revised terms of the borrowings, applicable from the cut off date of 1 January, 2021 are given in Note 52. Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 24 Acceptance Payable under the film financing arrangements Total 1,400 1,400 1,400 1,400 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. The facility was overdue as at year end by 76 days. However, the default stands recetified on approval of restructuring of facility into Working Capital facility by bankers on 22 June, 2021. EROS INTERNATIONAL MEDIA LIMITED 119 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 25 Trade payables - current financials liabilities Trade payable Payable to related parties (refer note 44) 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 Lease liabilities Other payable to related party (refer note 44) Total Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 15,500 6,263 12,508 22,855 21,763 35,363 6,402 283 1,468 619 - 543 488 881 8,639 926 23 483 1 687 215 473 10,684 11,447 * These figures do not includes any amount due and outstanding to be credited to Investor Education and Protection Fund. 27 Employee benefit obligations - current Provision for gratuity (refer note 41) Leave encashment Total 28 Other Current Liabilities Advance from customers- related parties (refer note 44) Advances from customers- Others Duties & Taxes Payable Deferred income Others Total 29 Current tax liabilites (net) 129 198 327 336 17,252 4,224 2,780 716 25,308 80 227 307 337 2,374 7,448 5,609 554 16,322 Provision for Corporate Taxes (net of advance tax) Total 7,830 7,830 7,348 7,348 120 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 30 Revenue from operations Sale/distribution/exhibition of films and other rights Other operating revenues Total 31 Other Income Gain on foreign exchange (net) Interest income : Bank deposits Others Income from Export Incentives Sundry balances written back and Bad debts recovered Provision written back for expected credit loss Provision for Content advances written back (refer note 3) Other non-operating income Total 32 Purchases / Operating Expenses Film rights cost Amortization of film rights (refer note 3) Total 33 Changes in Inventories Inventories at the end of the year Stock-in-trade Inventories at the beginning of the year Stock-in-trade Total 34 Employee benefits expense Salaries and wages Contributions to provident and other funds (refer note 41) Employee share based compensation (refer note 42) Gratuity expenses (refer note 41) Staff welfare expenses Total Amount ` in Lakhs Year Ended 31 March 2021 Year Ended 31 March 2020 25,584 613 26,197 81,356 4 81,360 - 694 58 5,991 941 1,786 72 3,284 544 338 4,809 527 892 1,477 1,687 1,602 12,676 12,026 9,829 16,920 26,749 14,287 24,152 38,439 850 850 4 4 (846) 4,586 216 98 76 16 4 4 301 301 297 3,314 151 101 123 98 4,992 3,787 EROS INTERNATIONAL MEDIA LIMITED 121 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 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 Nil (31 March 2020 : 13.03 %) 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 37 Other expenses Print & digital distribution cost Selling & distribution expenses Processing and other direct 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 (refer note 49) Trade receivables written off Content advance written off Advances & deposits written off Provision for doubtful receivables Provision for doubtful advances Corporate social responsibility expenses Loss on foreign exchange (net) Miscellaneous expenses Total 122 ANNUAL REPORT 2020-21 Amount ` in Lakhs Year Ended 31 March 2021 Year Ended 31 March 2020 8,067 256 2,471 7,642 405 2,681 10,794 10,728 - (207) 10,587 (3,382) (290) 7,056 799 232 1,031 35 761 293 16 24 66 127 25 47 53 83 1,088 146 1,069 5,596 119 531 83 8 873 317 1,018 229 1,247 198 399 107 25 55 37 140 21 55 68 116 645 147 46,494 - 2 184 - 20 - 41 11,360 48,754 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 38 Exceptional items Impairment of content advance provision Impairment of film rights Impairment of other advances Impairment of content advance write off Impairment of Goodwill Total *Exceptional item comprises of the following: Amount ` in Lakhs Year Ended 31 March 2021 Year Ended 31 March 2020 - 2,301 - - - 1,29,015 20,815 762 3,025 1,735 2,301 1,55,352 1. The COVID-19 outbreak and resulting measures taken by the Government of India to contain the virus have already significantly affected the business in the first quarter of fiscal 2020. Further, in 19-20, the Company has witnessed a significant decline in market capitalization as compared with the previous year. Because of unexpected decline in the market capitalization and disruptions in the business caused by the outbreak of COVID-19, the Company has performed the annual impairment assessment following the requirements of Ind AS 36 ‘Impairment of Assets’. As on 31 March 2021, the company has carried out impairment assessment. The approach and key (unobservable) assumptions used to determine the cash generating unit’s value comprises of growth rate beyond explicit period (4%) and post-tax discount rate of 16.5%. Based on the assessment, the management has recorded the impairment charge of ` 2,301 lacs ( 31 March 2020 155,352 lacs) and disclosed the same under the exceptional item. 39 Earnings per share a) Computation of net profit (loss) for the year Year Ended 31 March 2021 Year ended 31 March 2020 Profit/ (loss) after tax attributable to equity shareholders (` in lakhs) (18,086) (1,40,521) b) Computation of number of shares for Basic Earnings per share Weighted average number of equity shares Total 9,57,12,501 9,55,51,002 9,57,12,501 9,55,51,002 c) Computation of number of shares for Diluted Earnings per share Weighted average number of equity shares used in the calculation of basic earning per share 9,57,12,501 9,55,51,002 Add:- Weighted average potential equity shares (dilutive impact of ESOPs) - - Total d) Nominal value of shares e) Computation Basic (in `) Diluted (in `) 9,57,12,501 9,55,51,002 10 10 (18.90) (18.90) (147.06) (147.06) EROS INTERNATIONAL MEDIA LIMITED 123 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 40 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 Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 2,200 54,243 105 1,983 43,604 105 Guarantee given in favor of various government authorities 25 25 56,573 45,717 Notes: 1 During the year ended 31 March 2021, the Company received a show cause notice from the Commissioner of Service Tax to show cause why an amount aggregating to 5,317 lakhs for the period 1 April 2015 to 30 June 2017 should not be levied on and paid by the Company for service tax arising on temporary/perpatual transfer of copyright services and other matters. company is in process of filing of reply for the same. 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/perpatual 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, the provision of ` 88.52 lakhs only has been recorded and 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, the provision of ` 60.77 lakhs has been recorded and 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 panalty 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/ 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.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. 124 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 1.d Company Eros International Media LImited has received showcause notice for reversal of CENVAT credit for the period 2013-14 to 2015-16 ` 187 lakhs,no additional liability has been accouunted in financial statements for this showcause notice. Further Company also received showcause notice for Non levy of Service tax on Import of Services for the period 2013-14 to 2015-16 for ` 70 Lakhs, the Company has recorded liability ` 51.51 lakhs on account of this show cause notice. 2 3 4 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. 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 , including those made under Insolvency and Bankcrupcy Code, 2016 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 41 Employment benefits a) Gratuity Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 1,53,349 1,53,349 1,79,444 1,79,444 2,09,922 2,25,161 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: I Change in projected benefit obligation Liability at the beginning of the year Interest cost Current service cost Past service cost Liabilty transferred Benefits paid Actuarial loss on obligations Liability at the end of the year Current portion Non-current portion II Recognised in Balance Sheet Liability at the end of the year Amount recognised in Balance Sheet Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 424 24 52 - (8) (19) 12 485 129 356 485 485 547 39 84 - - (107) (139) 424 80 344 424 424 EROS INTERNATIONAL MEDIA LIMITED 125 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information III Expense recognised in Statement of Profit and loss Current service cost Interest cost Actuarial (Gains) / losses Arising from changes in experience Arising from changes in financial assumptions Arising from changes in demographic assumptions Expense/(income) recognised in Other comprehensive income IV Assumptions used Discount rate Long-term rate of compensation increase Attrition Rate Expected average remaining working life Amount ` in Lakhs As at 31 March 2021 As at 31 March 2020 52 24 76 26 (25) 11 12 84 39 123 (88) (36) (15) (139) 5.45%- 5.58% 6.43%- 6.76% 4.76%-10% 17%-23% 4 years 10.00% 13%-23% 6 years V A quantitative sensitivity analysis for significant assumption as at 31 March 2018 is as shown below: Impact on defined benefit obligation Projected benefit obligation on current assumption 485 424 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 * * Amount less than one lakh VI Maturity profile of defined benefit obligation Year Year 1 Year 2 Year 3 Year 4 Year 5 Sum of Years 6-10 126 ANNUAL REPORT 2020-21 (16) 18 15 (15) (1) 1 (13) 14 13 10 0 0 As at As at 31 March 2021 31 March 2020 126 71 54 60 75 249 95 103 60 44 45 198 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 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 ` 46 lakhs (31 March 2020 ` 74 lakhs) towards accrual for compensated absences during the year. c) Provident fund The Company contributed ` 212 lakhs (31 March 2020 ` 134 lakhs) to the provident fund plan, ` 3 lakhs (31 March 2020 ` 2 lakhs) to the Employee state insurance plan and ` 1 lakhs (31 March 2020 ` 4 lakhs) to the National Pension Scheme during the year. 42 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 activities under the ESOP 2009 and ESOS 2017 scheme are summarized below: The expense recognised 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 2021 or 31 March 2020. Amount ` in Lakhs Year Ended 31 March 2021 As at 31 March 2020 98 101 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 As at 31 March 2021 As at 31 March 2020 Number 4,79,614 - (43,896) (2,35,795) 1,99,923 3,25,740 Number 7,57,885 - (1,56,775) (1,21,496) 4,79,614 3,25,740 WAEP 45 - 10 10 94 94 ` 10-150 2.96 Years WAEP 32 - 10 10 45 59 ` 10-150 2.96 Years EROS INTERNATIONAL MEDIA LIMITED 127 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENT Notes to the consolidated financial statements and other explanatory information 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 01-Jul-12 14-Oct-13 12-Nov-14 12-Feb-15 09-Feb-16 10-Feb-17 14-Nov-17 10-Feb-18 Dividend yield (%) Expected volatility Risk free interest rate Exercise price Expected life of options granted in years Table 1.1 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 75.00% 60.00% 44.00% 35.00% 40.11% 37.84% 46.46% 48.66% 56.53% 53.15% 6.30% 75-175 5.25 6.50% 75-135 5.25 8.36% 8.57% 8.50% 7.74% 7.49% 6.51% 6.90% 7.38% 75 5.50 150 4.50 10 10 10 As per Table 1.1 10 4.27 10 3.50 10 4.50 Expected life of options granted in years Option Grant date Year I Year II Year III 09-Feb-16 12-Feb-15 12-Nov-14 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. 43 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. Amount ` in Lakhs Year ended 31 March 2021 Year ended 31 March 2020 7,881 15,351 2,965 26,197 21,363 52,108 7,889 81,360 85,011 - 10,851 95,862 92,325 18,444 3,008 1,13,777 Revenue by region of domicile of customer's location India United Arab Emirates Rest of the world Total revenue Non-current assets other than financial instruments, investments accounted for using equity method and deferred tax Non-current assets India United Arab Emirates Rest of the world Total non-current assets 128 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 44 Related party disclosures Parent entity Relationship Ultimate holding company Holding company Name Eros STX Global Corporation (formerly known as Eros International Plc.) Eros Worldwide FZ LLC List of Key management personnel (KMP) Mr. Sunil Lulla – Executive Vice Chairman and Managing Director Mr. Kishore Lulla – Executive Director Mr. Farokh Gandhi - Chief Financial Officer (India) Mr. Abhishekh Kanoi - Vice President Company Secretary and Compliance Officer (upto 12 August 2019) Mr. Vijay Thaker - Vice President Company Secretary and Compliance Officer (w.e.f. 13 August 2019) Mr. Pradeep Dwivedi - Chief Executive Officer (w.e.f. 10 February 2020) Relatives of KMP with whom transactions exist Entities over which KMP exercise significant influence Fellow subsidiary company c) Transactions with related parties Sale of film rights Eros Worldwide FZ LLC Eros International Limited Revenue attributable to Eros Digital FZ LLC Sale of prints/VCD/DVD Eros Worldwide FZ LLC Total Re-imbursement of administrative expense Eros Worldwide FZ LLC Eros Digital FZ LLC Eros International Limited Eros International Limited USA Inc Total Mrs. Manjula K Lulla (wife of Mr. Kishore Lulla) Mrs. Krishika Lulla (wife of Mr. Sunil Lulla) Mrs. Meena Lulla (mother of Mr. Kishore Lulla) Shivam Enterprises Eros Television India Private Limited M/s Eros International Distribution LLP Eros Digital Private Limited Eros International Limited, United Kingdom Eros Digital FZ LLC Eros Films Limited, Isle of Man Eros International Limited USA Inc Amount ` in Lakhs Year ended 31 March 2021 Year ended 31 March 2020 12,182 2,269 14,451 52,762 - 52,762 (2,098) (10,681) - - 99 2,684 - - 2,783 - - 2,412 5,678 142 67 8,299 EROS INTERNATIONAL MEDIA LIMITED 129 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information Re-imbursement of administrative expense given Eros Worldwide FZ LLC Total Rent expenses Mr. Sunil Lulla Mr. Kishore Lulla Mrs. Manjula K Lulla Total Interest income Eros Worldwide FZ LLC Eros Digital FZ LLC Total Interest expenses Eros Digital Private Limited Total Amount ` in Lakhs 15 15 384 348 36 768 5,979 - 5,979 62 62 70 70 384 348 36 768 3,718 - 3,718 57 57 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. 952 778 *Excludes ` Nil lakh (31 March 2020 : ` 1 lakhs) charged to Statement of Profit and loss on account of stock compensation for awards granted. ** The remuneration accrued/paid by the company to its Vice Chairman and Managing Director for the year ended 31 March 2021 is in excess by ` 400 lacs vis-a-vis the limits specified in section 197 of Companies Act, 2013 ('the act') read with schedule V thereto, as the Company does not have profits. The Company is in process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary. Untill then, the said excess amount is held in trust by the Vice Chairman and Managing Director. d) Transactions with related parties (Continued) Year ended 31 March 2021 Year ended 31 March 2020 Content advances given Eros International Limited Total Trade advances/ loans given Eros Worldwide FZ LLC Eros Films Limited Total Recovery of trade advances/ loans given Eros International Limited Eros Worldwide FZ LLC Eros Films Limited Shivam Enterprises Eros Television India Private Limited Total Trade advances/ loans taken Eros Worldwide FZ LLC Eros International Limited Eros Digital Private Limited Eros Digital FZ LLC Total 130 ANNUAL REPORT 2020-21 - - 69 - 69 - 115 - - - 115 - - - - - 100 100 28,615 7,858 36,473 100 6,920 7,858 57 4 14,939 - - 25 29 54 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information Repayment of advances/ loans Eros International Limited Eros Digital Private Limited Total Refund of deposits Mr. Sunil Lulla Mr. Kishore 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 Eros Digital FZ LLC Total Loans and advances due from Eros Worldwide FZ LLC Shivam Enterprises Eros Television India Private Limited Eros International Limited Total Security Deposits/Amounts due from KMPs or their relatives Mr. Sunil Lulla Mr. Kishore Lulla Mrs. Manjula Lulla Total Amounts due to KMPs or their relatives Mr. Sunil Lulla Mr. Kishore Lulla Mrs. Krishika Lulla Mrs. Manjula Lulla Mrs. Meena Lulla Total 2(a) Terms and conditions All outstanding balances are unsecured and repayable in cash. Amount ` in Lakhs - - - - - - 13,738 43 13,781 254 60 314 As At 31 March 2021 Amount ` in Lakhs As At 31 March 2020 35,653 4,327 2,195 42,175 2,851 282 21,129 24,262 311 619 11 14 955 79,792 - - 54 79,846 13 180 75 268 488 241 21 124 7 881 37,884 11,128 - 49,012 3,028 118 19,827 22,973 311 562 11 15 899 76,150 - - 56 76,206 13 180 75 268 225 143 2 103 - 473 EROS INTERNATIONAL MEDIA LIMITED 131 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 45 Categories of financial assets and financial liabilities The carrying value and fair value of financial instruments by categories are as follows: Particulars Financial assets Measured at amortised cost Loans Restricted bank deposits Other financial assets Trade receivables Cash and cash equivalents Financial liabilities Measured at amortised cost Borrowings Acceptance Trade payables Other financial liabilities Amount in ` Lakhs Carrying value /Fair value As at 31 March 2021 As at 31 March 2020 83,239 2,852 524 47,870 2,656 80,021 3,655 841 55,224 1,107 1,37,141 1,40,848 45,991 1,400 39,762 12,532 99,685 46,244 1,400 35,481 11,494 94,619 46 Fair value measurement of financial instruments 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 Carrying value /Fair value Amount in ` Lakhs As at 31 March 2021 As at Level 1 As at Level 2 As at Level 3 The following table shows the financial assets and liabilities measured at amortised cost on a recurring basis: Measured at amortised cost Financial assets Loans Restricted deposits Other financial assets Trade receivables Cash and cash equivalents 132 ANNUAL REPORT 2020-21 83,239 2,852 524 47,870 2,656 1,37,141 - - - - - - - - 373 - - 373 - - - - - - CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information Measured at amortised cost Financial liabilities Borrowings- Non-current Borrowings- Current Acceptance Trade payables Other financial liabilities Carrying value /Fair value Amount in ` Lakhs As at 31 March 2021 As at Level 1 As at Level 2 As at Level 3 3 45,988 1,400 39,762 12,532 99,685 - - - - - - 3 - - - - 3 - - - - - - During the year ended 31 March 2021 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 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. 46 Fair value measurement of financial instruments (Continued) Financial assets The following table shows the financial assets and liabilities measured at amortised cost on a recurring basis: Particulars 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 Carrying value /Fair value Amount in ` Lakhs As at 31 March 2020 As at Level 1 As at Level 2 As at Level 3 80,021 3,655 841 55,224 1,107 1,40,848 67 46,177 1,400 35,481 11,494 94,619 - - - - - - - - - - - - - - 373 - - 373 67 - - - - 67 - - - - - - - - - - - - During the year ended 31 March 2020 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. EROS INTERNATIONAL MEDIA LIMITED 133 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 47 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 committe 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. Formal policies and guidelines have been set to achieve these objectives. The Company does not enter into speculative arrangements or trade in financial instruments and it is the Company’s policy not to enter into complex financial instruments unless there are specific identified risks for which such instruments help mitigate uncertainties. 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 17,23,24 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 Financial risk management objectives Amount ` in lakhs As at 31 March 2021 As at 31 March 2020 53,793 (2,656) 51,137 1,05,363 48.53% 56,283 (1,107) 55,176 1,26,042 43.78% 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. 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 2021 90 % (31 March 2020: 93 %) of trade account receivables were represented by the top 5 customer, out of which as at 31 March 2021 87 % (31 March 2020: 88 %) 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 2021, the Company did not hold any material collateral or other credit enhancements to cover its credit risks associated with its financial assets. 134 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information Currency Risk The Company is exposed to foreign exchange risk from foreign currrency 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. As at the Balance Sheet date there were no outstanding forward foreign exchange contracts. 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 Ruppes(INR) equivalents, as at the year end: As at 31 March 2021 As at 31 March 2020 *amount represents less than one lakh Net balance receivables / (payables) INR In Lakhs 3,70,348 27,190 USD SGD* EUR 5,055 360 8 1 1 (0) The above foreign currency arises when the Company holds monetary assets and liabilities denominated in a currency other than INR. A uniform decrease of 10% in exchange rates against all foreign currencies in position as of 31 March 2021 would have increased in the Company’s net profit before tax by approximately ` 37,038 lakhs (31 March 2020: ` 2,719 lakhs). An equal and opposite impact would be experienced in the event of an increase by a similar percentage 47 Financial instruments and Risk management continued 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 2021 Borrowing principal payments Borrowing interest payments Acceptance Trade and other payables As at 31 March 2020 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 In Lakhs 52,406 6,127 1,400 41,610 Total In Lakhs 54,914 6,127 1,400 35,528 52,390 6,125 1,400 23,611 Less than 1 year 54,816 6,125 1,400 35,410 16 2 - 17,999 - - - - - - - - 1-3 years 3-5 years More than 5 years 98 2 - 118 - - - - - - - - At 31 March 2021, the Company had facilities available of ` 49,034 Lakhs (31 March 2020: ` 51,556 Lakhs ) and had net undrawn amounts of ` 1,995 Lakhs (31 March 2020: ` 189 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 2020 would have decreased in the Company’s net profit before tax by approximately ` 526 Lakhs (31 March 2020: net profit before tax of ` 247 Lakhs). An equal and opposite impact would be experienced in the event of a decrease by a similar basis. EROS INTERNATIONAL MEDIA LIMITED 135 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 48 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 Country of incorporation Proportion of ownership interest 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 ErosNow Private Limited (formerly known as Universal Power Systems Private Limited) Reliance Eros Production LLP Eros International Distribution LLP India India India India India British Virigin Island Singapore India India India India 100% 64% 100% 100% 100% 100% 100% 50% 100% 50% 100% 48 b. Additional information, as required under Schedule III to the Companies Act, 2013, of enterprises consolidated as Subsidiary/ Associates/Joint Ventures Name of Enterprises Parent Eros International Media Limited 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 ErosNow Private Limited (formly known as Universal Power Systems Private Limited) Eros International Distribution LLP Foreign Digicine PTE Limited Copsale Limited Net Assets, i.e., total assets minus total liabilities As % of consolidated net assets ` in lakhs Share in profit or loss Share in other comprehensive income Share in total comprehensive income As % of consolidated profit or loss ` in lakhs As % of consolidated other comprehensive income ` in lakhs As % of consolidated total comprehensive income ` in lakhs 1.8% 1,920 93.9% (16,984) 0% (14) 81.3% (16,998) 84.0% 88,470 -0.5% 98 0.0% 0.1% 0.0% 0.0% 39 57 (15) (3) 0.2% (38) -0.1% 0.0% 0.0% 11 4 (1) 2.4% 2,576 0.5% (91) - - - - - - - - - - - -0.5% 98 0.2% (38) -0.1% 0.0% 0.0% 11 4 (1) (3) 0.5% (97) -0.6% (624) 3.1% (566) 0% - - - - - 4 - -0.8% (825) 84.0% 88,470 5.9% (1,076) 597 -3.3% -1% -2% 16 56 2.7% (562) - - 5.1% (1,059) 653 -3.1% 0.3% (60) Non controlling interests 1.3% 1,368 0.3% (60) 136 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated financial statements and other explanatory information 49 Auditors' remuneration As auditor Statutory audit Limited review Tax audit In other capacity Other services (certification fees) Amount ` in lakhs Year ended 31 March 2021 Year ended 31 March 2020 117 18 10 145 1 1 117 18 10 145 2 2 Total 146 147 50 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. 51 Post reporting date events The World Health Organization announced a global health emergency because of a new strain of coronavirus (“COVID-19”) and classified its outbreak as a pandemic on 11 March 2020. On 24 March 2020, the Indian government announced lockdown across the country to contain the spread of the virus. Further, lockdown like conditions have been imposed by government to curtail the second wave in 5 April 2021. This pandemic and response thereon have impacted most of the industries. The impact on future operations would, to a large extent, depend on how the pandemic further develops and it’s resultant impact on the operations of the Group. The Management has evaluated the impact on its financial statements and have made appropriate adjustments, wherever required. The extent of the impact on Group’s operations remains uncertain and may differ from that estimated as at the date of approval of these consolidated financial statements and will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration of COVID-19 and among other things, the impact of governmental actions imposed in response to the pandemic. The Group is monitoring the rapidly evolving situation and its potential impacts on the Group’s financial position, results of operations, liquidity, and cash flows. 52 The Parent company has obtained the lenders approval on 22 June 2021 for resturcuting of the borrowing facilities under the RBI's Resolution Framework for COVID-19-related Stress dated 6 August 2020 and Resolution Framework for COVID-19-related Stress – Financial Parameters dated 7 September 2020 with the cut off date of 1 January 2021. The defaults in the repayments of term loans instalments stands rectified on restructuring of the facilities. The impact of the restructuring has not been considered in these financial results, pending issue of revised sanction letters and other documents from all bankers. Pursuant to restructuring, the interest rate is revised to 9% p.a. link to one year MCLR. The revised repayment schedule will be as under: Descriptions Term Loans Funded Interest Term Loans Working Capital Facilitates Amount ` in lakhs FY 21-2022 FY 22-2023 FY 2023-24 - 231.00 4,395.00 856.00 1,606.00 1,589.00 4,417.00 - 2,008.00 EROS INTERNATIONAL MEDIA LIMITED 137 CORPORATE OVERVIEW | MANAGEMENT REPORT | FINANCIAL MANAGEMENTNotes to the consolidated financial statements and other explanatory information 53 Leases Company as a leasee The company's leased assets primarily consist of offices. Lease of the office premises generally have lease term of 5 years. (a) The carrying amount of Right to use assets and the movements during the year are given in note 2. (b) The carrying amount of lease liabilities and the movements during the year:- Particulars Opening balance Addition Accretion of Interest Payment made Closing balance (c) The amount relating to leases recognized in statement of profit and loss Depreciation of right of use of assets Interest expense on lease liability' Total (d) Undiscounted maturity analysis of lease liabilities as at end of the year Less than 1 year One to five year More than 5 year 54 Authorisation of financial statements Amount in ` Lakhs As at 31 March 2021 As at 31 March 2020 - 1,331 - 761 2,092 463 27 490 2,092 2,474 - 592 5,158 367 90 457 7 5,151 - The financial statement for the year ended 31 March 2021 (including comparatives) were approved by the board of directors on 28 June 2021. As per our report of even date For Chaturvedi & Shah LLP Chartered Accountants Firm Registration No.: 101720W/W100355 Amit Chaturvedi Partner Membership No: 103141 For and on behalf of Board of Directors Sunil Srivastav Sunil Lulla Executive Vice Chairman Non Executive Independent Chief Executive Officer and Managing Director (DIN: 00243191) Director (DIN: 00237561) Pradeep Dwivedi Place: Mumbai Date : 28 June 2021 Place: Mumbai Date : 28 June 2021 Farokh P Gandhi Chief Financial Officer Vijay Thaker Vice President - Company Secretary and Compliance Officer 138 ANNUAL REPORT 2020-21 CONSOLIDATED FINANCIAL STATEMENTS AGM NOTICE NOTICE OF THE 27 ANNUAL GENERAL MEETING TH 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 -400053, Maharashtra (India). Phone: +91 22 66021500 | Fax: +91 22 66021540 | Email: compliance.officer@erosintl.com | Website: www.eiml.site CIN: L99999MH1994PLC080502 th NOTICE is hereby given that the 27 Annual General Meeting (AGM) of the Members of Eros International Media Limited will be held on Tuesday, the 28 day of September, 2021 through Video Conferencing/ Other Audio-Visual Means ("VC/OAVM") facility, at 3:00 P.M., to transact the following business: th ORDINARY BUSINESS: 1. To receive, consider and adopt: a. b. the Audited Financial Statements of the Company for the financial year ended 31 March 2021, 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 2021, 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. Approval for waiver of excess remuneration paid for the financial year 2020-2021 to Mr. Sunil Lulla, Executive Vice Chairman & Managing Director of the Company To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution : "RESOLVED THAT pursuant to the provisions of Sections 197 and 198 read with Schedule V of the Companies Act, 2013 ("the Act") and other applicable provisions, if any, of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), and pursuant to the recommendations of Nomination and Remuneration Committee and the Board of Directors of the Company and subject to such approval as may be required, the approval of the members of the Company be and is hereby accorded to ratify and confirm the waiver of recovery of the excess remuneration amounting to ` 400.16 Lakhs paid to Mr. Sunil Lulla (DIN: 00243191), Executive Vice Chairman & Managing Director for the financial year 2020- 2021, which is in excess of the limits prescribed under Schedule V of the Act in view of loss for the financial year 2020-2021 and within the th limits as approved by the Members of the Company at their 26 Annual General Meeting held on 15 December 2020. RESOLVED FURTHER THAT the Board and/or Company Secretary of the Company, be and are hereby authorised to do all such acts, deeds, matters and things as may be necessary, desirable or expedient to give effect to this resolution." 4. Payment of remuneration to Independent Director of the Company in accordance with the provisions of Schedule V of the Act 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 Sections 149, 197, Schedule V and other applicable provisions of the Companies Act, 2013 ('the Act') (including any statutory modification(s) or re- enactment(s) thereof for the time being in force) and Regulation 17(6) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations') as amended from time to time, read with the Articles of Association of the Company, consent of the Company be and is hereby accorded for payment of remuneration to the Non- Executive Directors, including Independent Directors, of the Company (i.e. Directors other than the Managing Director and/or Whole Time Directors) in case of no / inadequate profits, as calculated under Section 198 of the Act, for the three Financial Years 2020-21, 2021-22 and 2022-23, in accordance with the limits prescribed under Schedule V of the Act and the same be paid and distributed amongst such Directors in such a manner as the Board of Directors may from time to time determine." 5. Appointment of Mr. Pradeep Dwivedi (DIN: 07780146) as a Director of the Company To consider and modification(s), the Resolution: if thought fit, to pass, with or without following resolution as an Ordinary "RESOLVED THAT pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 ("the Act") read with the Companies (Appointment and Qualification of Director) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force) and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Pradeep Dwivedi (DIN: 07780146) who was appointed by the Board of Directors as an Additional Director of the Company with effect from 14 August 2021 in terms of Section 161(1) of the Act, and Article 153 of the Articles of Association of the Company and who holds office up to the date of this Annual General Meeting of the Company and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Act proposing his candidature for the office of Director in addition to the Chief Executive Officer of the Company, be and is hereby appointed as a Director of the Company, liable to retire by rotation. RESOLVED FURTHER THAT the Nomination and Remuneration Committee / Board of Director thereof be and is hereby authorized to do all such acts, deeds, matters and things as may be considered necessary, expedient or desirable to give effect to this Resolution." 6. Appointment of Mr. Manmohan Kumar Sardana (DIN: 09294639) 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: "RESOLVED THAT Mr. Manmohan Kumar Sardana (DIN: 09294639), who was appointed as an Additional Director of the Company with effect from 31 August 2021 by the Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, and who holds office upto the date of this Annual General Meeting of the Company under Section 161(1) of the Companies Act, 2013 ('Act') (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and Article 153 of the Articles of Association of the Company, being eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160(1) of the Act from a Member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company. RESOLVED FURTHER THAT pursuant to the provisions of Sections 149, 150, 152 and other applicable provisions, if any, of the Act read with Schedule IV to the Act and the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended from time to time, Regulation 17 and other applicable regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations') the appointment of Mr. Manmohan Kumar Sardana, meets the criteria for independence as provided in EROS INTERNATIONAL MEDIA LIMITED 139 AGM NOTICE Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and who has submitted a declaration to that effect, and who is eligible for appointment as an Independent Director of the Company, for a term of Five (5) consecutive years from the conclusion of this 27 Annual General Meeting till the conclusion of nd32 Annual General Meeting of the Company to be held in the Calendar Year 2026 and who would not be liable to retire by rotation, be and is hereby approved. th 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 for appointing / continuing the directorship of Mr. Manmohan Kumar Sardana who has exceeded the age of 75 years as an Independent Director. 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." 7. Conversion of Loan into Equity Shares To consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: "RESOLVED THAT pursuant to Section 62 (3) of the Companies Act, 2013 ("the Act") and any other applicable provisions of the Act and rules made thereunder and in accordance with the Memorandum of Association and Articles of Association of the Company, and subject to all such consent(s), permission(s), sanction(s) of the concerned authorities, as may be required, including any such condition(s) and modification(s) as may be prescribed or imposed, while granting such consent(s), permission (s), the consent of the members be and is hereby accorded to the Board of Directors of the Company for conversion of the outstanding amount of the Restructured Facilities along with interest and any other outstanding secured obligation, in relation to the Restructured Facilities (whether then due and payable or not) (the "Loan") as on that date of conversion in accordance with the terms of the Sanction Letter, at the valuation as per the applicable provisions of the Act, as amended from time to time and the Income-tax Act, 1961, as amended from time to time and in accordance with the following conditions: (i) (ii) (iii) the conversion right reserved as aforesaid shall be exercised by the Lenders only in case the default in repayment of loan/advances or in the payment off the interest thereon or any agreed installments of loan is not corrected within 30 days. on receipt of the Notice of Conversion, the Company shall, subject to the provisions of financing documents, issue and allot the requisite number of fully paid up equity shares to the Lenders or any other person identified by the Lenders as from the date of conversion and the Lenders shall accept the same in satisfaction of the part of the Loan so converted. the part of the Loan so converted shall cease to carry interest as from the date of conversion and the Restructured Facilities shall stand correspondingly reduced. Upon such conversion, the repayment installments of the Restructured Facilities payable after the date of conversion as per the financing documents shall stand reduced proportionately by the amount of the Loan so converted. The equity shares so allotted and issued to the Lenders or such other person identified by the Lenders shall carry, from the date of conversion, the right to receive proportionately the dividends declared in respect of the equity capital of the Company. Save as aforesaid, the said shares shall rank pari passu with the existing equity shares of the Company in all respects, provided, further that the Company shall increase, if required, the authorized share capital of the Company to satisfy the conversion for the time being available to the Lenders. 140 ANNUAL REPORT 2020-21 (iv) The conversion right reserved as aforesaid may be exercised by the Lenders on one or more occasions according to the provisions of the common loan agreement or any other financing documents executed in relation to the Restructured Facilities. RESOLVED FURTHER THAT the consent of members is hereby given for any amendment, change, modification to the Memorandum of Association and Articles of Association of the Company to give effect to the above resolution. RESOLVED FURTHER THAT the Board be and is hereby authorised to finalize the terms and conditions to convert the Loan into equity shares of the Company on the terms specified in the financing documents. RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution and matters flowing from, connected with and incidental to any of the matters mentioned in the aforesaid resolution, the Board of Directors be and is hereby authorized on behalf of the Company to take all actions and to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, desirable or expedient to create, offer, issue and allot the aforesaid fully paid up equity shares and to resolve and settle all questions and difficulties or doubts that may arise in this regard including in the proposed allotment, utilization of the proceeds and to do all acts, deeds and things in connection therewith as the Board may in its absolute discretion deem fit, without being required to seek any further consent or approval of the shareholders or otherwise to the end and intent that they shall be deemed to have given their approval thereto expressly by the authority of this resolution." RESOLVED FURTHER THAT the Board be and is hereby authorised to offer, issue and allot from time to time to the Lenders such number of equity shares for conversion of such portion of the Loans as may be desired by the Lenders on the terms and conditions under the common loan agreement and other financing documents. RESOLVED FURTHER THAT the Board of Directors are also authorized to increase the authorized share capital of the Company accordingly and will take necessary steps to complete the compliance in this regard. RESOLVED FURTHER THAT the Board be and is hereby authorised to accept such modifications and to accept such terms and conditions as may be imposed or required by the Lenders arising from or incidental to the aforesaid terms providing for such option and execute such deeds and things as may be necessary to give effect to this resolution. RESOLVED FURTHER THAT the Board be and is hereby also authorised to delegate all or any of the power herein conferred by this resolution on it, to any committee of Directors or person or persons, as it may in its absolute discretion deem fit on order to give effect to this resolution. RESOLVED FURTHER THAT the copies of the foregoing resolutions, certified to be true by any one of the directors of the Company, be furnished to the Lenders and their consultants or agents." By Order of the Board of Directors For Eros International Media Limited Vijay Thaker Vice President- Company Secretary & Compliance Officer Date: 14 August 2021 Place: Mumbai NOTES 1. 2. 3. 4. 5. 6. 7. 8. 9. In view of the outbreak of the COVID-19 pandemic, Ministry of Corporate Affairs ("MCA") has vide its Circular dated 5 May 2020 read with circulars dated 8 April 2020, 13 April 2020 and 13 January 2021 (collectively referred to as "MCA Circulars") permitted the holding of the ("AGM") through VC/OAVM, without the physical presence of the Members at a common venue. In compliance with the provisions of the Companies Act, 2013 ("Act"), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and MCA Circulars, the AGM of the Company is being held through VC/OAVM. 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 to 7 of this Notice is annexed as Annexure I. The relevant details as required under Regulation 26(4) and 36(3) of the SEBI Listing Regulations and Secretarial Standard-2 (SS-2), in respect of Director seeking appointment/re-appointment/fixation of remuneration at this AGM is annexed as Annexure II. A Member entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend and vote on his/ her behalf and the proxy need not be a Member of the Company. However, pursuant to MCA Circulars and SEBI Circular, the AGM will be held through VC/OAVM and the physical attendance of Members in any case has been dispensed with. Accordingly, the facility for appointment of proxies by the Members will not be available for the Meeting and hence the Proxy Form is not annexed to this Notice. Pursuant to Section 113 of the Act representatives of Corporate Members may be appointed for the purpose of voting through remote e-voting or for participation and voting in the Meeting to be conducted through VC/OAVM. Corporate Members intending to attend the Meeting through their authorised representatives are requested to send a Certified True Copy of the Board Resolution and Power of Attorney, (PDF/ JPG Format) if any, authorizing its representative to attend and vote on their behalf at the Meeting. The said Resolution/Authorisation shall be sent to the Company by e m a i l t h r o u g h i . e . compliance.officer@erosintl.com. i t s r e g i s t e r e d e m a i l a d d r e s s , In compliance with the aforesaid MCA Circulars and SEBI Circular, Notice of the Meeting along with the Annual Report for FY 2020-21 is being sent only through electronic mode to those Members whose email addresses are registered with the Company/ Depositories. Members may note that the Notice and Annual Report for FY 2020- 21 will also be available on website of the Company, i.e. www.eiml.site, website of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively, and on the website of the CDSL www.evotingindia.com. The business set out in the Notice will be transacted through electronic voting system and the Company is providing facility for voting by electronic means. Instructions and other information relating to e-voting are given in this Notice under Note No. 12. Members attending the Meeting through VC/OAVM shall be counted for the purpose of reckoning the quorum under Section 103 of the Act. Relevant documents referred to in the accompanying Notice and the Explanatory Statement, Registers and all other documents will be available for inspection in electronic mode during business hours on all days except Saturdays, Sundays and public holidays upto the date of the AGM. Members can inspect the same by sending an email to the Company at compliance.officer@erosintl.com. Notice is also given under Section 91 of the Act read with Regulation 42 of the SEBI Listing Regulations, that the Register of Members and the Share Transfer Book of the Company will remain closed from Tuesday, 21 September 2021 to Tuesday, 28 September 2021 (both days inclusive). AGM NOTICE 10. Members are requested to intimate changes, if any, pertaining to their name, postal address, telephone/ mobile numbers, Permanent Account Number (PAN), mandates, nominations, power of attorney, to their Depository Participants ("DPs") in case the shares are held by them in dematerialized form and to the Registrar and Share Transfer Agents of the Company i.e. Link Intime India Private Limited in case the shares are held by them in physical form. 11. Members seeking any information/desirous of asking any questions at the Meeting with regard to the accounts or any matter to be placed at the Meeting are requested to send email to the Company at compliance.officer@erosintl.com at least 10 days before the Meeting. The same will be replied by the Company suitably. 12. Information and other instructions relating to e-voting are as under i. ii. iii. iv. v. Pursuant to the provisions of Section 108 and other applicable provisions of the Act and Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended and Regulation 44 of the SEBI Listing Regulations, MCA Circulars and SEBI Circular the Company is pleased to provide its Members facility to exercise their right to vote on resolutions proposed to be passed in the Meeting by electronic means. The Company has engaged the services of Central Depository Services (India) Limited ("CDSL") to provide evoting facility to the Members. Voting rights shall be reckoned on the paid-up value of shares registered in the name of the Member/ beneficial owner (in case of electronic shareholding) as on the cut-off date, i.e., Tuesday, 21 September 2021. A person who is not a Member as on the cut-off date should treat this Notice for information purposes only. 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, i.e., Tuesday, 21 September 2021, only shall be entitled to avail the facility of e- voting. Members who are holding shares in physical form or who have not registered their email address with the Company/ Depository or any person who acquires shares of the Company and becomes a Member of the Company after the Notice has been sent electronically by the Company, and holds shares as on the cut-off date, i.e. Tuesday, 21 September 2021; such Member may obtain the User ID and password by sending a request at helpdesk.evoting@cdslindia.com or may temporarily get their email registered with the Company's Registrar and Share Transfer Agent, Link Intime India Private Limited. In case of any queries, members may contact Company's Registrar and Share 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. It is further clarified that for permanent registration of Email address, Members are required to register their Email address in respect of Electronic holdings with their concerned Depository Participant(s) and in respect of Physical Holdings with the Company's Registrar and Share Transfer Agent, Link Intime India Private Limited by sending an email at rnt.helpdesk@linkintime.co.in or at Co's email Id compliance.officer@erosintl.com by following due procedure. However, if a Member is already registered with CDSL for e- voting then existing User ID and password can be used for casting vote 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 EROS INTERNATIONAL MEDIA LIMITED 141 AGM NOTICE Type of shareholders Individual Shareholders holding securities in Demat mode with CDSL providing facility to the members of the Company to scrutinize the voting and remote e-voting process in a fair and transparent manner. vii. The Scrutinizer, after scrutinizing the votes, will, not later than forty eight hours from the conclusion of the Meeting; make a consolidated scrutinizer's report which shall be placed on the website of the Company, i.e. www.eiml.site and on the website of CDSL. The results shall simultaneously be communicated to the Stock Exchanges. viii. Subject to receipt of requisite number of votes, the resolutions shall be deemed to be passed on the date of the Meeting, i.e. Tuesday, 28 September 2021. ix. Information and other instructions relating to e-voting are as under a) The remote e-voting facility will be available during the following period: Commencement of e-voting: From 9:00 a.m. (IST) on Friday, 24 September 2021. End of e-voting: Up to 5:00 p.m. (IST) on Monday, 27 September 2021. The remote e- voting will not be allowed beyond the aforesaid date and time and the e-voting module shall be disabled by CDSL upon expiry of the aforesaid period. b) The Members who have cast their vote by remote e-voting prior to the Meeting may also attend/ participate in the Meeting through VC/OAVM but shall not be entitled to cast their vote again. c) Pursuant to SEBI Circular No. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated 09.12.2020, under Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, listed entities are required to provide remote e-voting facility to its shareholders, in respect of all shareholders' resolutions. However, it has been observed that the participation by the public non-institutional shareholders/retail shareholders is at a negligible level. Currently, there are multiple e-voting service providers (ESPs) providing e-voting facility to listed entities in India. This necessitates registration on various ESPs and maintenance of multiple user IDs and passwords by the shareholders. In order to increase the efficiency of the voting process, pursuant to a public consultation, it has been decided to enable e-voting to all the demat account holders, by way of a single login credential, through their demat accounts/ websites of Depositories/ Depository Participants. Demat account holders would be able to cast their vote without having to register again with the ESPs, thereby, not only facilitating seamless authentication but also enhancing ease and convenience of participating in e-voting process. d) In terms of SEBI circular no. SEBI/HO/CFD/CMD/CIR/ P/2020/242 dated 9 December 2020 on e-voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Deposit- ories and Depository Participants. Shareholders are advised to update their mobile number and email Id in their demat accounts in order to access e-voting facility. Pursuant to above said SEBI Circular, Login method for e- voting and Individual joining virtual meetings shareholders holding securities in Demat mode is given below: for 142 ANNUAL REPORT 2020-21 Login Method 1) Users of who have opted for CDSL's Easi / Easiest facility, can login through their existing user id and password. Option will be made available to reach e-Voting page without any further authentication. The URLs for users to login to Easi / Easiest are https://web.cdslindia.com/myeasi/home/login or www.cdslindia.com and click on Login icon and select New System Myeasi. 2) After successful login the Easi / Easiest user will be able to see the e-voting Menu. On clicking the e-voting menu, the user will be able to see the respective e-voting service provider i.e. CDSL/ NSDL/ KARVY/ LINK INTIME as per information provided by Issuer / Company. Additionally, we are providing links to e-voting Service Providers, so that the user can visit the e-voting service providers' site directly. 3) If the user is not registered for Easi/Easiest, option to register is available at https://web.cdslindia. com/myeasi./Registration/ EasiRegistration 4) Alternatively, the user can directly access e-voting page by providing Demat Account Number and PAN No. from a link in www.cdslindia.com home page or click on https://evoting.cdslindia.com/ Evoting/EvotingLogin. The system will authenti- cate the user by sending OTP on registered Mobile & Email as recorded in the Demat Account. After successful authentication, user will be provided links for the respective ESP where the e-voting is in progress during or before the AGM. 1) Individual Shareholders holding securities in demat mode with NSDL If you are already registered for NSDL IDeAS facility, please visit the e-Services website of NSDL. Open web browser by typing the following URL: https://eservices.nsdl.com either on a Personal Computer or on a mobile. Once the home page of e-Services is launched, click on the "Beneficial Owner" icon under "Login" which is available under 'IDeAS' section. A new screen will open. You will have to enter your User ID and Password. After successful authentication, you will be able to see e-voting services. Click on "Access to e-voting" under e-voting services and you will be able to see e-voting page. Click on company name or e-voting service provider name and you will be re-directed to e-voting service provider website for casting your vote during the remote e-voting period or joining virtual meeting & voting during the meeting. 2) If the user is not registered for IDeAS e-Services, o p t i o n t o r e g i s t e r i s a v a i l a b l e a t https://eservices.nsdl.com. Select "Register Online for IDeAS "Portal or click at https://eservices.nsdl. com/SecureWeb/IdeasDirectReg.jsp 3) Visit the e-voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the home page of e-voting system is launched, click on the icon "Login" which is available under 'Shareholder / Member' section. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/OTP and a Verification Code as shown Dividend Bank Details OR Date of Birth (DOB) Type of shareholders Login Method on the screen. After successful authentication, you will be redirected to NSDL Depository site wherein you can see e-voting page. Click on company name or e-voting service provider name and you will be redirected to e-voting service provider website for casting your vote during the remote e- voting period or joining virtual meeting & voting during the meeting. PAN Individual Shareholders (holding securities in demat mode) login through their Depository Participants You can also login using the login credentials of your demat account through your Depository Participant registered with NSDL/CDSL for e-voting facility. After successful login, you will be able to see e-voting option. Once you click on e-voting option, you will be redirected to NSDL/CDSL Depository site after successful authentication, wherein you can see e- voting feature. Click on company name or e-voting service provider name and you will be redirected to e- voting service provider's website for casting your vote during the remote e-voting period or joining virtual meeting & voting during the meeting. Important note : Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and Forget Password option available at abovementioned website. Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. CDSL and NSDL Login type Helpdesk details Individual Shareholders holding securities in Demat mode with CDSL Members facing any technical issue in login can contact CDSL helpdesk by sending a request at helpdesk.evoting@cdslindia.com or contact at 022- 23058738 and 22- 23058542-43. Individual Shareholders holding securities in Demat mode with NSDL Members facing any technical issue in login can contact NSDL helpdesk by sending a request at evoting@nsdl.co.in or call at toll free no.: 1800 1020 990 and 1800 22 44 30 e) Login method for e-voting and joining virtual meeting for individual shareholders & shareholders other than physical shareholders. 1) The shareholders should log on to the e-voting website www.evotingindia.com. 2) Click on "Shareholders" module. 3) Now Enter your User ID a. For CDSL: 16 digits beneficiary ID, AGM NOTICE 5) 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. 6) If you are a first time user follow the steps given below: For Shareholders holding shares in Demat Form other than individual 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) Shareholders who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number sent by Company/RTA or contact Company/RTA. 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 (v). f) After entering these details appropriately, click on "SUBMIT" tab. g) Members holding shares in physical form will then reach directly 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 to be also used by the demat holders for voting for 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. h) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice. i) Click on the EVSN of the "EROS INTERNATIONAL MEDIA LIMITED". j) On the voting page, you will see "RESOLUTION DESCRIPTION" and against 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. the same k) Click on the "RESOLUTIONS FILE LINK" if you wish to view b. For NSDL: 8 Character DP ID followed by 8 Digits the entire Resolution details. Client ID, c. Members holding shares in Physical Form should enter Folio Number registered with the Company OR for CDSL's Alternatively, if you are registered EASI/EASIEST e-services, you can log-in at https://www.cdslindia.com from Login - Myeasi using your login credentials. Once you successfully log-in to CDSL's EASI/EASIEST e-services, click on e-voting option and proceed directly to cast your vote electronically. 4) Next enter the Image Verification as displayed and Click on Login. l) 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. m) Once you "CONFIRM" your vote on the resolution, you will not be allowed to modify your vote. n) You can also take out print of the voting done by you by clicking on "Click here to print" option on the Voting page. o) If Demat account holder has forgotten the changed password then enter the User ID and the image EROS INTERNATIONAL MEDIA LIMITED 143 AGM NOTICE verification code and click on Forgot Password & enter the details as prompted by the system. p) If you have any queries or issues regarding attending AGM & e-voting from the e-voting System, 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 or contact Mr. Nitin Kunder (022- 23058738 ) or Mr. Mehboob Lakhani (022-23058543) or Mr. Rakesh Dalvi (022- 23058542). q) All grievances connected with the facility for voting by electronic means may be addressed to Mr. Rakesh Dalvi, Manager, (CDSL) Central Depository Services (India) Limited, A Wing, 25 Floor, Marathon Futurex, Mafatlal Mill Compounds, N M Joshi Marg, Lower Parel (E), Mumbai - 400013 or send an email to helpdesk.evoting@cdslindia.com or call on 022-23058542/43 th r) Note for Non - Individual Shareholders and Custodians • Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporate. • 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. • Alternatively Non Individual shareholders are required to send the relevant Board Resolution/ Authority letter etc. together with attested specimen signature of the duly authorized signatory who are authorized to vote, to the Scrutinizer and to the Company at the email address viz; compliance.officer@erosintl.com, if they have voted from individual tab & not uploaded same in the CDSL e-voting system for the scrutinizer to verify the same. PROCESS FOR THOSE SHAREHOLDERS WHOSE EMAIL ADDRES SES ARE NOT REGISTERED WITH THE DEPOSITORIES & COMPANY/RTA : a. b. c. For Physical shareholders- please provide necessary details like Folio No., Name of shareholder, scanned copy of the share certificate (front and back), PAN (self-attested scanned copy of PAN card), AADHAR (self-attested scanned copy of Aadhar Card) by email to Company/RTA email id. For Demat shareholders - Please update your email id & mobile no. with your respective Depository Participant (DP) For Individual Demat shareholders - Please update your email id & mobile no. with your respective Depository Participant (DP) which is mandatory while e-voting & joining virtual meetings through Depository. 13. In case of joint holders, 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 at the Meeting. 144 ANNUAL REPORT 2020-21 14. Share transfer documents and all correspondence relating thereto, should be addressed to the Link Intime India Private Limited, Unit - Eros International Media Limited, C-101, 247 Park, L.B.S Marg, Vikhroli (West), Mumbai 400 0839, Registrars and Transfer Agent of the Company. 15. To prevent fraudulent transactions, Members are advised to exercise due diligence and notify the Company of any change in address or demise of any Member as soon as possible. Members are also advised not to leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned DP and holdings should be verified 16. SEBI has mandated the submission of PAN by every participant of the securities market. Members holding shares in dematerialised form are, therefore, requested to submit their PAN to their DPs with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company/ Link Intime India Private Limited 17. As mandated by SEBI, effective 1 April 2019 except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in dematerialised mode with a depository. Accordingly, the Members of the Company were requested to open a demat account and submit physical securities to their DPs. 18. As per Regulation 40(7) of the Listing Regulations, read with Schedule VII to the said Regulations, for registration of transfer of shares, the transferee(s) as well as transferor(s) shall mandatorily furnish copies of their Income Tax PAN Card. Additionally, for securities market transactions and / or for off market / private transactions involving transfer of shares in physical mode for listed Companies, it shall be mandatory for the transferee(s) as well as transferor(s) to furnish copies of PAN Card to the Company/ Link Intime India Private Limited for registration of such transfer of shares. In case of transmission of shares held in physical mode, it is mandatory to furnish a copy of the PAN Card of the legal heir(s) / nominee(s). In exceptional cases, the transfer of physical shares is subject to the procedural formalities as prescribed under SEBI Circular No. SEBI/HO/MIRSD/DOS3/CIR/P/2018/139 dated 6 November 2018. 19. Pursuant to Section 72 of the Companies Act, 2013, Members are entitled to make a nomination in respect of shares held by them. Members desirous of making a nomination, pursuant to the Rule 19(1) of the Companies (Share Capital and Debentures) Rules, 2014 are requested to send their requests in Form No. SH- 13, to Link Intime India Private Limited. Further, Members desirous of cancelling/varying nomination pursuant to the Rule 19(9) of the Companies (Share Capital and Debentures) Rules, 2014, are requested to send their requests in Form No. SH-14, to Link Intime India Private Limited. These forms will be made available on request. 20. Since the Meeting will be held through VC/OAVM, the Route Map and Attendance Slip are not annexed to this Notice INSTRUCTIONS FOR SHAREHOLDERS ATTENDING THE MEETING THROUGH VC/OAVM ARE AS UNDER: 1. 2. Shareholder will be provided with a facility to attend the Meeting through VC/OAVM through the CDSL e-voting system. Share- holders may access the same at https://www.evotingindia.com under Shareholders/Members login by using the remote e-voting credentials. The link for VC/OAVM will be available in Shareholders/ Members login where the EVSN of the Company will be displayed. The Members can join the Meeting through VC/OAVM mode 15 minutes before and after the scheduled time of the commencement of the Meeting by following the procedure mentioned in the Notice. The facility of participation at the Meeting through VC/OAVM will be made available to at least 1000 members on first come first served large Shareholders basis. However the participation of (Shareholders holding 2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, Auditors etc. are not restricted on first come first served basis. Shareholders are encouraged to join the Meeting through Laptops / IPads for better experience Further Shareholders will be required to allow Camera and use Internet with a good speed to avoid any disturbance during the Meeting. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches. Members who would like to express their views or ask questions during the Meeting may register themselves as a speaker by their registered email address sending mentioning their name, DP ID and Client ID/folio number, PAN, mobile number at compliance.officer@erosintl.com. Those their request from 3. 4. 5. 6. AGM NOTICE Shareholders who have registered themselves as a speaker will only be allowed to express their views/ask questions during the Meeting. 7. 8. The Shareholders who have not registered themselves can put the question on the chatbox available on the screen at the time of the Meeting. Members who need technical assistance before or during the Meeting can send an email to helpdesk.evoting@cdslindia.com or call 1800225533. By Order of the Board of Directors For Eros International Media Limited Vijay Thaker Vice President- Company Secretary & Compliance Officer Date: 14 August 2021 Place: Mumbai EROS INTERNATIONAL MEDIA LIMITED 145 AGM NOTICE Item No. 3: EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 Annexure I to the Notice th The Company at its 26 Annual General Meeting re-appointed Mr. Sunil Lulla, as Executive Vice Chairman & Managing Director of the Company for a period of five years with effect from 28 September 2020 till 27 September 2025, by means of Special Resolution passed by the Members at 26 AGM of the Company held on 15 December 2020 on the terms and conditions including payment of remuneration as mentioned therein. th On account of COVID-19 outbreak, the Company was unable to release its films in theatres due to total lockdown or operations of theatres with limited capacity. Owing to the above, it has adversely impacted the revenue and profitability of the Company during financial year 2020-21 and it is possible that the Company may also have inadequate profits in coming years. As a result of the above, the remuneration paid to Mr. Sunil Lulla for the financial year 2020-21 exceeded the limits specified under Section 197 of the Companies Act, 2013 (the Act) read with Schedule V thereto. Pursuant to Section 197(10) of the Act, the members of the Company can waive the recovery of excess remuneration by passing a special resolution. The management of the Company believes that the remuneration as previously approved by the members of the Company and paid to Mr. Sunil Lulla is justified in terms of their key role within the Company. The Nomination and Remuneration Committee and the Board have at their respective meeting(s) held on 28 June 2021, subject to the approval of the members of the Company, accorded their approvals for waiver of the recovery of excess managerial remuneration paid by the Company to Mr. Sunil Lulla and, in the interest of the Company have also recommended the aforesaid resolution as set out in this Notice for approval of the Members. Accordingly, it is proposed that approval of the members of the Company by way of a special resolutions be obtained for the waiver of recovery of excess remuneration paid to Mr. Sunil Lulla. The Company has as on date not defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or other secured creditor, if any. None of the Directors and / or Key Managerial Personnel of the Company and their relatives except Mr. Sunil Lulla and Mr. Kishore Lulla and their relatives to the extent of their shareholding interest, if any are concerned or interested, financially or otherwise, in the resolution set out at item No. 3 of the accompanying Notice. Item No. 4: st The Members at the 21 Annual General Meeting held on 3 September 2015 had approved, under the provisions of Section 197 and other applicable provisions of the Act, payment of commission to the Non- Executive Directors, an amount not exceeding 1% of the net profits of the Company in terms of Section 197 of the Act, computed in accordance with the provisions of Section 198 of the Act or such other percentage as may be specified from time to time. However, taking into consideration the financial loss of the Company, no commission was paid to the Non- Executive Directors for FY 2019-20. The Company has incurred a loss as computed under Section 198 of the Act and therefore no commission would be payable to the Non-Executive Directors for FY 2020-21. With the recent amendments in Sections 149(9), 197(3) and Section II of Part II of Schedule V of the Act notified by MCA vide circulars dated 18 March, 2021, companies having no / inadequate profits can pay remuneration to its Non-Executive Directors (including Independent Directors) within the limits based on the 'effective capital' of a company in accordance with the provisions contained in the amended Schedule V to the Act. 146 ANNUAL REPORT 2020-21 With the enhanced Corporate Governance requirements under the Act and the SEBI Listing Regulations coupled with the size, complexity and global operations of Eros Group, the role and responsibilities of the Board, particularly Independent Directors has become more onerous, requiring greater time commitments, attention as also a higher level of oversight. In view of the above, to incentivize them for their time, contribution rich experience and critical guidance provided, including at the Board and Committee meetings and pursuant to the amended provisions of Sections 149(9), 197(3) and Section II of Part II of Schedule V of the Act and based on the recommendations of the NRC at its meeting held on 18 May 2021, the Board of Directors at its meeting held on 28 June 2021 have recommended and approved payment of remuneration to the Non-Executive Directors (including Independent Directors) of the Company within the limits prescribed under Section II of Part II of Schedule V of the Act for the Financial Years 2020-21, 2021-22 and 2022- 23 in case of inadequacy of profits/ losses for in any of the said financial year(s). STATEMENT CONTAINING ADDITIONAL INFORMATION AS REQUIRED UNDER SCHEDULE V TO THE ACT I. GENERAL INFORMATION: A) Nature of Industry The Indian Media and Entertainment ("M&E") sector fell 24% in the calendar year 2020 to ` 1.38 trillion (US$ 18.9 billion). The report estimated, basis the improvement seen in the last quarter of 2020, that the sector would grow 25% in the calendar year 2021, to ` 1.73 trillion (US$ 23.7 billion), and would continue on the growth trajectory to the calendar year 2023, growing 17% CAGR (from 2020) to ` 2.23 trillion. However, given that these expectations were prior to India's second COVID-19 wave in April-May '21, these expectations may be severely impacted. Television proved to be resilient and continued to be the largest segment, Digital Media overtook the print segment as the second-largest segment, the only segment that saw growth during this period. However, most of this growth came from record growth in subscription revenue, while revenue from advertising for digital media continued to be stable over 2019. Digital media grow by 6.5% to reach ` 235 billion and is projected to grow at 22% CAGR to reach ` 425 billion by 2023. In 2020, owing to the pandemic due to the subsequent lockdowns, the revenues from digital subscriptions grew 49% to reach ` 43.5 billion. The lockdowns significantly impacted the creation of fresh content on television, especially in the first three quarters of 2020. B) Date of commencement of commercial production: The Company was incorporated on 19 August 1994. Immediately after incorporation, the Company had engaged in the activities of production and distribution of films and other entertainment programs. C) In case of new companies, expected date of commence- ment of activities as per project approved by financial institutions appearing in the prospectus: Not Applicable D) Financial performance based on given indicators: (` in Lakhs) Particulars FY 2020-21 FY 2019-20 FY 2018-19 Revenue from Operations (Net) 24,450 66,900 Profit/(Loss) Before Tax Profit/(Loss) After Tax (15,847) (137,784) (16,983) (116,073) 83,564 13,677 8,736 E) Foreign investments or collaborators, if any: The Company has not entered into any material foreign collaboration and no direct capital investment has been made in the Company. Foreign investors, mainly comprising FIIs holders, are investors in the Company on account of past issuances of securities and secondary market purchases. II. Given below is the information about the appointees as required under Schedule V of the Act, the effective capital of the Company for various financial years as applicable to the Non-Executive Directors and the maximum amount of remuneration that may be payable to them: Name of Director Background Details, Job Profile, Suitability, Recognition and Rewards Date of appointment in the Company Mr. Dhirendra Swarup Mr. Sunil Srivastav Ms. Bindu Saxena The details for each of these Directors can be found on the website of the company at www.eiml.site. Please also refer to the Report on Corporate Governance, which forms part of this Annual Report. 10/02/2010 23/05/2018 26/09/2019 Past Remuneration (Amount in `) - FY 2019-20 FY 2018-19 FY 2017-18 *Maximum amount of remuneration for FY 2020-21 (Amount in `) Remuneration proposed (Amount in `) Comparative remuneration profile with respect to industry, size of the company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel or other director, if any 7,20,000 3,60,000 80,000 55,56,209 3,20,000 31,67,500 Nil Nil Nil 24,00,000 24,00,000 24,00,000 24,00,000 12,00,000 12,00,000 The remuneration has been considered by the NRC and the Board of Directors of the Company and is in line with the remuneration being drawn by similar industry in the media positions The Non-Executive Directors do not have any pecuniary relationship with the Company except to the extent of Sitting Fees, Commission or Remuneration, as applicable, and reimbursement of out of pocket expenses received by them for attending the meetings. * The limit on remuneration is based on Effective Capital which shall be calculated as of the last date of the financial year preceding the financial year in which the appointment of the Director is made as per Schedule V to the Act (Base amount of ` 24 Lakhs plus 0.1% of the Effective Capital in excess of ` 250 crores). III. Other Information A. Reasons of loss or inadequate profits: On account of COVID-19 outbreak and resulting measures taken by government of India to contain the virus and the said lockdown has significantly affected our business during financial year 2020-21. The Company was unable to release its films in theaters due to total lockdown or operation of theaters with limited capacity. The film 'Haathi Mere Saathi' was released in AGM NOTICE theaters on 26 March 2021. However due to second wave of COVID the said release was also impacted. Considering the present circumstances of COVID-19 pandemic, we are left with no option but to defer the release of our above said film indefinitely till the situation is improved, so that revenues of our said film can be optimized and improve our cashflows to better serve our commitments to our stakeholders. B. Steps taken or proposed to be taken for improvement: The Company holds in its library aggregated rights to more than 2,000 films, including both recent titles, as well as classic titles that span different genres, budgets and languages. In addition, the Company has also co-produced/acquired a portfolio of over 130+ new films over the years. This impressive library and its monetization through various channels, including Satellite TV, Overseas, In-flight and other channels, provide Company with multiple sources of revenue. The Company has also started formulating innovative ways of updating its existing content libraries. Given a rise in demand for content and increasing viewership on OTT platforms, coupled with the limited production of new content, existing library content is likely to become more valuable. C. Expected measurable terms: increase in productivity and profits in We believe all the initiatives listed above will bring and create further value for our shareholders. It will also enhance the revenue potential of the Group, resulting in better and improved profit for the companies of the Eros Group. Regulation 17(6) of the SEBI Listing Regulations authorises the Board of Directors to recommend all fees and compensation, if any, paid to Non- Executive Directors, including Independent Directors and the same would require approval of members in general meeting. This remuneration will be distributed amongst all or some of the Non- Executive Directors, taking into consideration parameters such as attendance at Board and Committee meetings, contribution at or other than at meetings, etc. in accordance with the directions given by the Board as prescribed under the Remuneration Policy of the Company. Kindly refer website of the company at www.eiml.site. The above resolution would be valid for a period of 3 years i.e. upto and including remuneration to be paid for the financial year 2022-23. It is clarified that in case of adequate profits, the Company would pay commission to its Non-Executive Directors upto an amount not exceeding 1% of the profits for that financial year as approved by the Members at the AGM held on 3 September 2015. The above remuneration shall be in addition to fees payable to the Director(s) for attending meetings of the Board/ Committees or for any other purpose whatsoever, as may be decided by the Board and reimbursement of expenses for participation in the Board and other meetings. The Company has not defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or other secured creditor. Your Director recommends the resolution set out at Item No. 4 of the Notice for approval by the members. Accordingly, members approval is sought by way of an Ordinary Resolution for payment of remuneration to the Non-Executive Directors as set out in the said resolution. None of the Directors and / or Key Managerial Personnel of the Company and their relatives except Mr. Dhirendra Swarup, Mr. Sunil Srivastav and Ms. Bindu Saxena are concerned or interested, financially or otherwise, in the resolution set out at Item No. 4 of the accompanying Notice. Item No. 5: The Board of Directors of the Company on recommendation of Nomination and Remuneration Committee, at its meeting held on 14 August 2021, appointed Mr. Pradeep Dwivedi who holds office as Chief EROS INTERNATIONAL MEDIA LIMITED 147 AGM NOTICE Executive Officer and Key Managerial Personnel as an Additional Director of the Company subject to approval of members of the Company. In terms of the provisions of Section 161(1) of the Act, he holds office upto the date of this Annual General Meeting and is eligible for appointment and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Act proposing candidature of Mr. Pradeep Dwivedi for the office of Director of the Company. Mr. Pradeep Dwivedi is not disqualified from being appointed as Director in terms of Section 164 of the Act and have given his consent to act as Director. Mr. Pradeep Dwivedi shall not be entitled to receive any sitting fees for attending any Meetings of the Board or any committee constituted by the Board except annual remuneration of ` 3,00,00,000/- payable as Chief Executive Officer of the Company and subject to increment from time to time as per Company's policy. Your Director recommends the resolution set out at Item No. 5 of the accompanying Notice for the approval of members. None of the Directors and / or Key Managerial Personnel of the Company and their relatives except Mr. Pradeep Dwivedi is concerned or interested, financially or otherwise, in the resolution set out at item No. 5 of the accompanying Notice. Item No. 6: Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company, had appointed Mr. Manmohan Kumar Sardana (DIN: 09294639) as an Additional Independent Director, not liable to retire by rotation w.e.f. 31 August 2021. Pursuant to the provisions of Section 161(1) of the Act and Article 153 of the Articles of Association of the Company, Mr. Sardana shall hold office up to the date of this AGM and is eligible to be appointed as a Director. The Company has, in terms of Section 160(1) of the Act, received in writing a notice from Member, proposing his candidature for the office of Director. The profile and specific areas of expertise of Mr Sardana are provided as Annexure to this Notice. Mr. Sardana has given his declaration to the Board that he meets the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations'), is not restrained from acting as a Director by virtue of any Order passed by SEBI or any such authority and is eligible to be appointed as a Director in terms of Section 164 of the Act. He has also given his consent to act as a Director. In the opinion of the Board, Mr. Sardana is a person of integrity, possesses the relevant expertise / experience and fulfills the conditions specified in the Act and the SEBI Listing Regulations for appointment as an Independent Director and he is independent of the management. As per the Regulation 17 (1A) of SEBI Listing Regulations, approval of the Members is required by way of special resolution for continuing the Directorship of any Non-Executive Director who have attained the age of 75 years. Given his experience, the Board considers it desirable and in the interest of the Company to have Mr. Sardana on the Board of the Company and accordingly the Board recommends the appointment of Mr. Sardana as an Independent Director as proposed in the resolution set out at Item No. 6 for approval by the Members. Electronic copy of the terms and condition of appointment of the Independent Directors is available for inspection. Please refer to Note 8 given in the Notice on inspection of documents. None of the Directors and / or Key Managerial Personnel of the Company and their relatives except Mr. Manmohan Kumar Sardana is concerned or interested, financially or otherwise, in the resolution set out at Item No. 6 of the accompanying Notice. Item No. 7: The Company has availed various credit facilities aggregating to a sum not exceeding ` 468.06 Crores (both fund based and non-fund based) (the "Facilities") from consortium banks (the "Lenders") for the purposes and upon the terms and conditions set out in the financing documents executed in this regard between the Company and the Lenders. The Media and Entertainment industry is one of the affected sectors due to the COVID-19 pandemic. With uncertainty looming over the resumption of shooting schedules and opening of theatres, industry players, like Eros, are finding it difficult to service debt obligations due to lower revenues. Considering the widespread impact of the pandemic on almost all sectors of the economy, the RBI has announced the Resolution Framework for COVID-19 related Stress to enable lenders to implement a resolution plan in respect of eligible corporate exposures without change in ownership, while classifying such exposures as standard, subject to specified conditions. Due to the prolonged COVID-19 stress and to mitigate the cash flow challenges, Company approached the Lenders to implement a resolution plan to restructure the existing secured financial debt from the consortium bankers of the Company, as permitted under the Resolution Framework for COVID 19 related Stress announced by the Reserve Bank of India vide circular No. RBl/2020-21/16 DOR. No. BP.BC/3/21.04.048/2020-21 dated 6 August, 2020 (the "Resolution Plan"). The said resolution plan was approved and implemented on 22 June 2021. As per the terms of the Resolution Plan, bankers can convert the outstanding debt into equity shares of the Company. Thus, approval of the members of the Company is being sought under Section 62(3) of the Companies Act, 2013 to authorise the Lenders to convert their outstanding lenders debt to equity shares in the Company. Further, it is clarified that the security to be created in favour of the lenders as part of Resolution Plan shall in no manner less than the security been offered to them in respect of the earlier borrowings made by the Company which are proposed to be restructured in terms of Resolution Plan as per Restructuring Circular. Your Director recommends the resolution set out at Item No. 7 of the accompanying Notice for conversion of loan into Equity Shares by way of a Ordinary resolution. None of the Directors and / or Key Managerial Personnel of the Company and their relatives are concerned or interested, financially or otherwise, in the resolution set out at Item No. 7 of the accompanying Notice. 148 ANNUAL REPORT 2020-21 i s c s y h P n i ) l o o h c S s n o H ( c S M A B M , . c S B . f o y t i s r e v n U i , e c r e m m o C f l o r o e h c a B i a b m u M i a b m u M f o y t i s r e v n U i , s t r A f l o r o e h c a B e h t f o s e i r t s n M i i s u o i r a v n i d n a l a g n e B t n i r P s a l l e w s a s s e n s u b i t n e m n a t i o f n i . i a d n I s o r E f o r o t c e r i i D g n g a n a M i s h r o f 7 0 0 2 s d r a w A y m e d a c A m F n a d n l i i I e h t d n a t s e W f o e t a t S e h t n i s e i t i c a p a c t n e r e f f i d l a t i i g d n i l s a i t n e d e r c d e h s i l b a t s e h t i w , r o t c e s & n a m r i a h C e c V i e v i t u c e x E i d e t n o p p a 7 0 0 2 s d r a w A s s e n s u B n a s A e h t i i t a d e r o n o h n e e b d e t a c o l l a s a w d n a 8 6 9 1 n i ) S A I ( i e c v r e S i & g n k n a B l , s e s i r p r e t n E y g o o n h c e T & m o c e e T l n i i g n v r e s r e t f A . e r d a C l a g n e B t s e W e h t o t e v i t o m o t u A d n a s n o i t u t i t s n I i s e c v r e s l i a c n a n F i ' h t w o r g s y n a p m o C e h t d e l e H . n o i t p e c n i m F l i f o l o o h c S e h t f o r e b m e m d r a o b a o s a s l i d n a i g n e b e r o f e b s r a e y y n a m r o f i a d n I i n h t i w s a h e H l . s e e g n A s o L , i a n r o f i l a C f o y t i s r e v n U e h t i t a r e t f a e r e h t , 7 6 9 1 o t 5 6 9 1 m o r f y t i s r e v n U i o w t r e v o f o e c n e i r e p x e n a h t i w r e d a e l y r t s u d n i e v i t a r t s n m d A i i i n a d n I e h t d e n o i j e h , s s e n s u B i i a d e M & i g n s i t r e v d A n i s e d a c e d e h s t i , y r t s u d n i i t n e m n a t r e t n E & i a d e M e h t d n a m F l i f o y m e d a c A h s i t i r B e h t f o r e b m e m a s i e H e c n s i s o r E h t i w d e t a c o s s a i n e e b s a h n o ' i i i t a z n a g r O s t n e d s e r P g n u o Y d n a s t r i A n o s v e e T i l e h t n i t n a t s s s a i i g n h c a e t s a i g n v r e s y n a p m o C e h t f o O E C p u o r G d n a l i a n o s s e f o r p i g n s s e s s o P . i f a b m u M o y t i s r e v n U e h t m o r f i 7 3 r e v o s a h e H . y t i s r e v n U i i a b m u M e h t m o r f s t r a j b a n a P e h t f o t n e m t r a p e D i s c s y h P d e h s i l p m o c c a n a s i e H . 0 2 0 2 y r a u n a J e c n s i n i e c n e i r e p x e g n o l s r a e y 8 2 e v s n a p x e n a i . y r t s u d n i m l i f i d n a a d e m e h t n i e c n e i r e p x e f o s r a e y s a w a n a d r a S r a m u K n a h o m n a M . r M y r t s u d n i i a d e m i r o n e s a s i i i d e v w D p e e d a r P . r M e e r g e d e c r e m m o c a s d o h a l l l u L l i n u S . r M n i e e r g e d ' l s r o e h c a b a i d e v e c e r a l l u L e r o h s K i . r M e l i f o r P AGM NOTICE c i l b u p n o i g n s v d a i ) I D S I ( t n e m p o e v e D l r o t c e r i D s a s n o i i t a c o s s a y r t s u d n i i a d e m y n a m . s e u s s i y c i l o p i g n g a n a m a d n a ) r e t p a h C i a d n I ( A A I f o f l i o b u C g n s i t r e v d A e h T f o r e b m e m e e t t i m m o c . i a d n I e h t t a w o l l i e F g n i t i s V a n e e b s a h a n a d r a S r e h c E i & k n a B d e r e t r a h C d r a d n a t S , l a t i p a C l a i r t s u d n I n i s e i d u t S r o f e t u t i t s n I n i i t n a p c i t r a p e v i t c a n a s i e H . i a d n I t s r o o M e t a r o p r o C f o i y r t s n M i n i y r a t e r c e S s a s a h c u s s n o i i t a s n a g r o h t i w d e k r o w d n a , p u o r G . r M , 1 2 0 2 h c r a M 1 3 l l i t 0 1 0 2 m o r f s r i a f f A E G , s s e r p x E n a c i r e m A i , s e c v r e s e e T l a t a T s a 4 0 0 2 n i y l l a n i f i e c v r e s e h t m o r f d e t a r t s n o m e d a s a h e H . s t n e v E l a i t n e i r e p x E . s r i a f f A e t a r o p r o C f o i y r t s n M i y r a t e r c e S P T R M , r e b m e M s a d e n i o j e H t n e m e r i t e r i s h r e t f a n o o s i i n o s s m m o C & & l s e a S , h t w o r g e u n e v e R n i d r o c e r k c a r t s e r u t n e v i t n o J , n o i t a e r c e u a V l , g n i t e k r a M i e c v r e s & t c u d o r p , s t n e m t s e v n I i , s p h s r e n t r a P i s h l d e t e p m o c y l l a n i f d n a 4 0 0 2 n i , . e . i l a r e n e g & s n o i t a r e p o k s i r , y r e v i l e d g n i t c a s t i s a P T R M e h t n i e r u n e t p u o r G n e e b s a h e h , t s a p e h t n I . t n e m e g a n a m - x E i d e n a m e r e H . 9 0 0 2 n i n a m r i a h C e t a r o p r o C i f e h C , p u o r G a d e M i l a k a S f o O E C i e r u n e t s h g n i r u d , I B E S f o r e b m e M o c i f f i o r a k s a h B i i k n a D f o r e c i f f O g n i t e k r a M & l s e a S d e r i t e r a n a d r a S . r M , i a d n I f o t n e m n r e v o G d n a l s e n n a h c i i n o s v e e T l s w e N , n o i t a c i l b u P d e t u b i r t n o c s a h e h , t n i t s i s h g n i r u D - d n a p x e d n a g n p o e v e d n i l i l y s u o d n e m e r t . i a d n I n i s s e n s u b i ' s y n a p m o C e h t g n i y n a p m o C e h t , i p h s r e d a e l l i e b a s h r e d n U s a h e H l i . s e n o t s e m e v e h c a o i t d e u n i t n o c e h t i g n p o e v e d l n i l a t n e m u r t s n i n e e b g n o a l s s e n s u b i n o i t u b i r t s d i ' s y n a p m o C i c s u m d n a i t n e m n a t r e t n e e m o h s t i h t i w . s t n e m g e s n I f o . l a b o g l a m e n c i i n a d n I i g n k a t n i n o i t u b i r t n o c r u e n e r p e r t n E " e h t d e d r a w a s a w a l l u L . r M , 0 1 0 2 y t i s r e v D i d n a i p h s r e d a e L 2 G G e h t t a " r a e Y e h t a l l u L . r M d e r u t a e f i a s A s e b r o F , 4 1 0 2 n i d n a s d r a w A o s a l s a w e H . ' n o i l l i B a r e d n u t s e B ' f o t s i l e h t n i d r a w A i p h s n e z i t i C l l a b o G 4 1 0 2 e h t h t i w d e r o n o h i g n d a e l a , e e t t i m m o C i h s w e J n a c i r e m A e h t y b a l l u L . r M . n o i i t a z n a g r o y c a c o v d a i h s w e J l a b o g l t a d r a w a y r a n o s V i i i t n e m n a t r e t n E e h t i d e v e c e r o s a l i y t e c o S a s A e h t i m o r f i r e n n D a a G l l a u n n A 5 1 0 2 e h t o t d e t i v n i s a w e h , 5 1 0 2 n I . i a n r o f i l a C n r e h t u o S n u S n i " p m a c r e m m u s ' s e r i a n o i l l i b " e h t d n e t t a t s o m ' s d l r o w e h t f o g n i r e h t a g l a u n n a n a , y e l l a V . s e v i t u c e x e s s e n s u b i d n a s r u e n e r p e r t n e l u f r e w o p r u o i g n d n a p x e n i l a t n e m u r t s n i n e e b s a h e H d e t i n U e h t , m o d g n K i d e t i n U e h t n i e c n e s e r p l a n o i t a n r e t n i r e h t o d n a a i l a r t s u A , i a b u D , s e t a t S y t e i r a V e h t n i d e r u t a e f s a w e h , 8 1 0 2 n I . s t e k r a m e h t i g n p a h s s r e d a e l s s e n s u b i l a i t n e u l f n i " f o t s i l 0 0 5 . " y r t s u d n i t n e m n a t r e t n e n o i i l l i r t 2 $ l a b o g l EROS INTERNATIONAL MEDIA LIMITED 149 a n a d r a S r a m u K n a h o m n a M . r M r o t c e r i D t n e d n e p e d n I 9 3 6 4 9 2 9 0 4 4 9 1 r e b m e t p e S 5 1 1 2 0 2 t s u g u A 1 3 s r a e Y 7 7 0 7 9 1 r e b m e c e D 0 1 1 2 0 2 t s u g u A 4 1 s r a e Y 0 5 4 6 9 1 e n u J 9 2 s r a e Y 7 5 r o t c e r i D 4 9 9 1 t s u g u A 9 1 i d e v i w D p e e d a r P . r M 6 4 1 0 8 7 7 0 a l l u L n a j r A l i n u S . r M 1 9 1 3 4 2 0 0 a l l u L n a j r A e r o h s K i . r M 5 9 2 3 0 3 2 0 e m a N N D I r o t c e r i D e v i t u c e x E i g n g a n a M & n a m i r i a h C e c V e v i t u c e x E r o t c e r i D e v i t u c e x E n o i t a n g s e D i 9 0 0 2 r e b m e t p e S 8 2 s r a e Y 0 6 1 6 9 1 r e b m e t p e S 4 h t r i B f o e t a D e h t n o t n e m t n o p p A i t s r i F f o e t a D s n o i t a c i f i l a u Q d r a o B e g A e c i t o N e h t o t I I e r u x e n n A e r u s o c s D l i d n a s n o i t a g i l b O g n i t s L ( i I B E S e h t f o 6 3 l n o i t a u g e R o t t n a u s r u p d e h s n r u f i r o t c e r i D f o n o i t a r e n u m e r f o n o i t a x i f i / t n e m t n o p p a - e r / t n e m t n o p p a i i g n k e e s s r o t c e r i D f o s l i a t e D . 2 - d r a d n a t S l a i r a t e r c e S e h t f o 5 . 2 . 1 e s u a C d n a l 5 1 0 2 l , s n o i t a u g e R ) s t n e m e r i u q e R AGM NOTICE 8 2 f o i n o s u c n o c l e h t o t 1 2 0 2 r e b m e t p e S . f . e . w s r a e y e v i f r o f m r e t t s r i F • e h t f o g n i t e e M l a r e n e G l a u n n A e h t l r a d n e a C e h t n i l d e h e b o t y n a p m o C . 6 2 0 2 r a e Y e h t f o 9 6 1 n o i t c e S r o 8 6 1 n o i t c e S f o s m r e t n i e d s i r e h t i e y b d e t a n m r e T i • . ) ' t c A e h t ' ( 3 1 0 2 , t c A s e n a p m o C i n o i t a t o r y b e r i t e r o l t e b a i l t o N • : n o i t a n m r e T i s e i t u d e h t f o o t V I n o i t i d d a n i t c A e h t f o 6 6 1 l e u d e h c S r e d n u d e t a d n a m n o i t c e S r e d n u i d e d v o r p s a e r e h d a o T • : s e i t u D : t c u d n o C f o e d o C . t c A t c u d n o C f o e d o C e h t y b i e d b A • . y n a p m o C e h t y b d e s v e d i 6 6 1 n o i i t c e S r e d n u d e d v o r p s a e r e h d a o T • n o i i t c e S r e d n u d e d v o r p s a e r e h d a o T • f o 6 6 1 n o i i t c e S r e d n u d e d v o r p s a e r e h d a o T • : s e i t u D : s e i t u D : s e i t u D : t c u d n o C f o e d o C . t c A e h t f o : t c u d n o C f o e d o C . t c A e h t f o 6 6 1 : t c u d n o C f o e d o C . t c A e h t e h t y b d e s v e d i t c u d n o C f o e d o C e h t y b e d b A i d e s v e d i t c u d n o C f o e d o C e h t y b e d b A i e h t y b d e s v e d i t c u d n o C f o e d o C e h t y b e d b A i • y n a p m o C y n a p m o C e h t y b y n a p m o C . n o i t a t o r y b e r i t e r o t l e b a L i • . n o i t a t o r y b e r i t e r o t l e b a i l t o N • . n o i t a t o r y b e r i t e r o t l e b a L i • : t n e m t n o p p A i : n o i t a t o r y b e r i t e R : n o i t a t o r y b e r i t e R : n o i t a t o r y b e r i t e R / t n e m t n o p p A i f o s n o i t i d n o c d n a s m r e T i t n e m t n o p p a - e R a n a d r a S r a m u K n a h o m n a M . r M i d e v i w D p e e d a r P . r M a l l u L n a j r A l i n u S . r M a l l u L n a j r A e r o h s K i . r M e m a N 150 ANNUAL REPORT 2020-21 A N n w o n k y l r e m r o f ( d e t i m L i e t a v i r P w o N s o r E • e t a v i r P s m e t s y S r e w o P l i a s r e v n U s a i g n s i t r e v d A l a n o i t a n r e t n I f o r e t p a h C a d n i I • n o i i t a c o s s A ) d e t i m L i d e t i i m L e t a v i r P s m F l i l a n o i t a n r e t n I s o r E e t a v i r P i t n e m n a t r e t n E n e e r c S i g B d e t i i m L e t a v i r P l a t i i g D s o r E d e t i m L i d e t i i m L e t a v i r P a d n i I l i i n o s v e e T s o r E e t a v i r P s n o i t c u d o r P w o l l e Y r u o o C l d e t i m L i d e t i i m L e t a v i r P n o i i t a m n A s o r E d e t i i m L e t a v i r P y g r e n E s o r E d e t i i m L e t a v i r P g n h s i i l b u P M E d e t i i i m L e t a v i r P s o d u t S e b u q e y E • • • • • • • • • w o n k y l r e m r o f [ n o i t a r o p r o C l l a b o G X T S S O R E • n i i l d e h s p h s r o t c e r i D ] ) n a M f o e s I ( l C L P l a n o i t a n r e t n I s o r E s a ) n a M f l o e s I ( d e t i m L i l a t i i g D s o r E c n I A S U l a n o i t a n r e t n I s o r E • • ) 1 2 0 2 , h c r a M 1 3 n o s a ( i s e n a p m o c r e h t o I L N I L N I L N A N ) r e c i f f O e v i t u c e x E i f e h C s a ( 0 0 0 , 0 0 , 0 0 , 3 ` I L N I L N A N y l r e m r o f ( s m e t s y S r e w o P l a s r e v n U i s a n w o n k d e t i m L i e t a v i r P w o N s o r E • ) d e t i i m L e t a v i r P . d t L . t v P s m l i F l a n o i t a n r e t n I s o r E r e b m e M - e e t t i m m o C t i d u A 4 2 7 , 5 8 , 6 2 , 5 ` 1 3 9 , 5 6 , 0 2 , 5 ` ) 4 ( r u o F ) 1 2 0 2 - 0 2 0 2 ( I L N n w a r d n o i t a r e n u m e r t s a L I L N i d a p e b o t n o i t a r e n u m e R I L N ) 1 ( e n O i f o s p h s n a m r i a h C i s e n a p m o c r e h t o f o s e e t t i m m o C i / s p h s r e b m e M d e d n e t t a s g n i t e e M 1 2 - 0 2 0 2 Y F g n i r u d d r a o B f o r e b m u N y e K / r o t c e r i D y n a o t d e t a l e r t o N l a i r e g a n a M y e K / r o t c e r i D y n a o t d e t a e r l t o N t o n d n a a l l u L e r o h s K i . r M f o r e h t o r B y n a o t d e t a e r l t o n d n a a l l u L l i n u S . r M f o r e h t o r B l e n n o s r e P l a i r e g a n a M l e n n o s r e P l a i r e g a n a M y e K / r o t c e r i D y n a o t d e t a e r l . l e n n o s r e P l a i r e g a n a M y e K / r o t c e r i D I L N I L N I L N I L N s e r a h s 0 0 4 , 1 . l e n n o s r e P I L N I L N l d e h s e r a h s f o r e b m u N y n a p m o C e h t n i I L N s n o i t p O k c o t S f o r e b m u N r e h t o h t i i w p h s n o i t a e R l l e n n o s r e P l a i r e g a n a M y e K , s r o t c e r i D 

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