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
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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
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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:-
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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
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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
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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
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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:
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•
•
•
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
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| 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
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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
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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
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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
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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
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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
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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
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| 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
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