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Notes to Accounts of Adlabs Entertainment Ltd.

Mar 31, 2017

NOTE 1: CAPITAL COMMITMENT

Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs, 714.84 Lakhs as on 31st March, 2017.

The timing differences result in a net deferred asset, relating mainly to unabsorbed depreciation and carried forward losses under the Income Tax Act, 1961.

The management of the company expects following business changes

- A substantial decrease in interest rates from consortium lenders from the present 12.5% to 11.00%, will result in lower interest payout. The majority of lenders have already approved of this ROI reduction.

- 171 hotels rooms (balance 60% of Total rooms) shall be operational in FY 18 and will result in higher revenues in the coming years and ahead.

- The aggressive cost reduction efforts by the Company have resulted in lower fixed costs compared to previous year.

- The Company has chalked out a comprehensive plan to ramp up footfalls for FY 18 onwards, which is expected to result in a revenue growth.

Note

1. Figures in the Bracket represent Previous Year (P.Y.)

2. The Company has subscribed Equity Share in the Previous Year of Walkwater Properties Pvt. Ltd. Rs, NIL (P.Y. Rs, 10,575.66 Lakhs).

3. The Company has paid the Consultancy fees to Ms. Aarti Shetty Rs, 60.32 Lakhs (P.Y.? 68.40 Lakhs), and Mrs. Pooja Deora Rs, 60.33 Lakhs (P.Y. Rs, 68.40 Lakhs).

4. The Company has paid the Remuneration to Mr. Kapil Bagla Rs, 134.32 Lakhs (P.Y. Rs, 134.30 Lakhs), Mr Harjeet Chhabra Rs, 52.99 Lakhs (P.Y. Rs, 106.10 Lakhs), Mr Ashutosh Kale Rs, 36.53 Lakhs, Mr Rakesh Khurmi Rs, 35.74 Lakhs (P.Y. Rs, 75.60 Lakhs), Mr. Dhimant Bakshi Rs, 33.15 Lakhs and Mr. Mayuresh Kore Rs, 26.12 Lakhs.

5. The Company has paid Rent for use of office premises located at 9th floor, Lotus Business Park, New Link Road, Andheri-West, Mumbai-400053. to Mr. Manmohan Shetty amounted to Rs, 116.29 Lakhs (P.Y. Rs, 60.08 Lakhs) and rent paid towards use of furniture and fixtures to M/s Walkwater Properties Pvt. Ltd. amounted to Rs, 21.80 Lakhs (P.Y. Rs, 20.60 Lakhs).

6. The Company has paid royalty of Rs, 1.15 Lakhs (P.Y. Rs, 1.14 Lakhs) to Mr. Manmohan Shetty.

7. The Company has paid Interest of Rs, 878.68 Lakhs on Loan taken from Mr. Manmohan Shetty .

NOTE 2: FAIR VALUE MEASUREMENT

Financial Instrument by category and hierarchy

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

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The fair values for loans, security deposits and investment in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carriying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

NOTE 3 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Management Board.

Market Risk is the risk of loss of future earning, fair values or future cash flow that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rate, equity prices and other market changes that effect market risk sensitive instruments. Market Risk is attributable to all market risk sensitive financial instruments including investment and deposits , foreign currency receivables, payables and loans and borrowings.

The Company manage market risk through its treasury department, which evaluate and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies, and ensuring compliance with market risk limits and policies.

Interest Rate Risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Foreign Currency Risk

The Company is not exposed to significant foreign currency risk as at the respective reporting dates.

Liquidity Risk

Liquidity Risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity through rolling forecasts on the basis of expected cash flows.

Credit Risk

Credit risk arises from the possibility that counter party may not be able to settle their obligation as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking in to account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limit are set accordingly.

The company considers the possibility of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition.

NOTE 4: CAPITAL RISK MANAGEMENT

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to our shareholders.

The capital structure of the Company is based on management''s judgment of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

NOTE 5: FIRST TIME ADOPTION OF IND AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from 1st April, 2016, with a transition date of 1st April, 2015. Ind AS 101-First-time Adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended 31st March, 2017 for the company, be applied retrospectively and consistently for all financial years presented. Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognized directly in equity (retained earnings or another appropriate category of equity).

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions availed

(a) Deemed Cost

The Company has opted paragraph D7 AA and accordingly considered the carrying value of property, plant and equipments and Intangible assets as deemed cost as at the transition date.

(b) Investments in subsidiaries

The Company has opted para D14 and D15 and accordingly considered the Previous GAAP carrying amount of Investments as deemed cost as at the transition date.

(c) The Company has opted for exemption given under para D13AA of Appendix D to Ind AS 101 - First time adoption of Indian Accounting Standards. In accordance with this exemption opted, the Group has continued the policy of adding to/ deleting from the cost of Property, Plant and Equipment, all foreign exchange fluctuations arising on translating of Long Term Foreign Currency Monetary Item utilized for acquiring the said Property, Plant and Equipment.

B. Applicable Mandatory Exceptions

(a) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 1 April, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

Impairment of financial assets based on expected credit loss model.

(b) Classification and measurement of financial assets

As required under Ind AS 101 the company has assessed the classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

I. Reconciliation of Balance sheet as at 1st April, 2015 (Transition Date).

II. A. Reconciliation of Balance sheet as at 31st March, 2016.

B. Reconciliation of Total Comprehensive Income for the year ended 31st March, 2016.

III. Reconciliation of Equity as at 1st April, 2015 and as at 31st March, 2016.

Explanation for reconciliation of Standalone Statement of Profit and Loss & Statement of Equity as previously reported under IGAAP to Ind-AS

6 The Loan taken from Promoter was interest free for the 1st quarter of FY 2015-16 and thereafter interest was charged by the promoter. The loan is measured at amortized cost using Effective Interest Rate (EIR) method as per Ind As 109 - Financial Instruments. Therefore, interest cost as per EIR method for the interest free period i.e. Apr 2015 to Jun 2015 amounting to '' 135.00 Lakhs has been charged to the statement of profit and loss and corresponding credit is given to other equity by considering it as capital contribution by the promoter.

7 In accordance with Ind As 109 - Financial Instruments, the loan processing fees of Rs, 101.92 Lakhs which is already charged to the statement of profit and loss under IGAAP is reversed and netted of with the respective loans under Ind -As as per the amortized cost method.

8 In accordance with Ind As 109 - Financial Instruments, all term loans (net of loan processing fees) are carried at amortized cost and the interest cost is charged to the statement of profit and loss as per Effective interest rate (EIR) method.

9 As per Ind-AS 19 Employee Benefits, the changes on account of re-measurements of employee''s defined benefit plans is charged to other comprehensive income and is reversed from the statement of profit and loss as recognized earlier under IGAAP.

10 Investment in Mutual Fund units is measured at Fair value through Profit & loss (FVTPL) under Ind-As and revaluation adjustments are charged to the statement of profit and loss prepared under IGAAP.

11 The Company has given interest free security deposits for properties taken on lease from third parties. These security deposits are measured at amortized cost under Ind-As 109 - Financial Instruments. The interest income on security deposit is recognized in the statement of profit and loss as per the EIR method and the pre-paid rent expense is recognized in the statement of profit and loss under straight line method.

12 In accordance with Ind-As 109 - Financial Instruments, the company has provided provision for doubtful debts using expected credit loss method.

13 As per Ind-AS 38 - Intangible Assets, the expenses incurred, before the intangible asset first meets the recognition criteria in paragraphs 21, 22 and 57 of Ind AS 38, cannot be capitalized to intangible assets. Further, the expenses on research shall be recognized as an expense when it is incurred and cannot be shown under the head Intangibles under development. Therefore, the expenditure recognized as Intangible Asset under IGAAP is reversed since it does not meet the criterion specified under Ind AS 38.

14 Under Indian GAAP, discount was recognized as part of other expenses which has been adjusted against the revenue under Ind AS during the year ended 31st March, 2016.

15 The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2016 as compared with the previous GAAP.

NOTE 16: OPERATING SEGMENTS

DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (Ind AS) 108 OPERATING SEGMENTS Operating Segments:

Ticket : Theme Park, Water Park and Snow Park Tickets

Food and Beverage : Park Restaurant and Hotel Restaurant

Merchandise : Park Merchandise and Hotel Merchandise

Rooms : Hotel Accommodation

Other Operations : Parking, Lockers, Sponsorship, SPA, Revenue Sharing agreements & Lease Rentals

Identifications of Segments :

The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.

Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as unallowable expenditure and income.

NOTE 17:

The Current assets, Loans & Advances (including capital advances) have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the balance sheet. Current assets, Loans & Advances (including capital advances) are subject to Confirmation and Reconciliation. Other known liabilities are adequate and not in excess of what are required.

NOTE 18 :

The Term Loan facility availed by the Company is secured by pari passu first charge on movable and immovable fixed assets of the Company & Subsidiary including mortgage of 298 acres of land to consortium lead by Union Bank of India in favour of IDBI Trusteeship Services Ltd.

The said loan is also secured by first pari passu charge on Current assets of the Company.

The corporate loan facility availed by the Company during the year is secured by first change on 25 acres of land and second charge on Fixed Assets.

Term Loan availed from Banks will be repaid over period of 5 to 10 years in unequal monthly installments starting from April 2017.

Term Loan availed from Financial Institutions will be repaid over period of 10 years in unequal monthly installments starting from April 2015.

Interest rate on term loan taken from Banks and Financial institutions varies from base rate plus 2.60 to 3.10.

Interest rate on Loan taken in form of Buyers Credit varies from 0.48 to 3.00.

NOTE 19:

The Company equity shares are in dematerialized form with the Central Depository Services (India) Limited (CDSL) and with National Securities Depository Limited (NSDL) having ISIN No. INE172N01012.

For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

NOTE 20:

The Company has executed an agreement to sale on 7th November, 2014 to sell 32.58 acres of land for a total consideration of '' 2,737.10 Lakhs to its 100% subsidiary Walkwater Properties Pvt. Ltd., subject to receipt of approval from the Directorate of Industries / Government of Maharashtra ("DIC") and a no objection (NOCs) from the lenders.

NOTE 21:

The company has suspended operation of Bandit of Robinhood ride on account of malfunctioning and it has filed with the vendor for damages including compensation for loss of business. The company has separately disclosed it as retired asset under fixed asset schedule and is carried at lower of Net Book Value or Net Realizable value.

NOTE 51:

Thrill Park Limited ( the Holding Company ) has filed a suit bearing no. 270/2013 against Dr. Bhakti Kumar Dave and 77 other defendants (land owners) in the Court of Civil Judge, Senior Division, Panvel for specific performance of contract. Thrill Park Limited had entered into a letter of commitment and memorandum of understanding (as amended from time to time) with Dr. Bhakti Kumar Dave whereby Dr. Bhakti Kumar Dave agreed to buy certain parcels of land on behalf of Thrill Park Limited from the other defendants. However, Dr. Bhakti Kumar Dave did not fulfil his obligations under the letter of commitment and the memorandum of understanding. Therefore, Thrill Park Limited filed this suit for specific performance. Summons have been issued to all defendants, the notice of lis pendency has been duly registered, and the case is pending before the court.


Mar 31, 2016

1) Related party disclosures (as identified by the management).

a) Related Party Relationship

i) Holding Company

- Thrill Park Ltd.

ii) Subsidiary Company

- Walkwater Properties Private Limited

iii) Key Managerial Personnel

- Manmohan Shetty

- Kapil Bagla

- Harjeet Chhabra

- Vincent Pijnenburg ( up to 15th November 2015 )

- Rakesh Khurmi

iv) Relatives

- Pooja Deora

- Aarti Shetty

v Entities controlled by Relatives of Director

- Walkwater Properties Private Limited (up to 10th September 2014 )(WPPL)

b) Transaction with Related Parties (Excluding Reimbursements).

2) The Current assets, Loans & Advances (including capital advances) have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the balance sheet. Current assets, Loans & Advances (including capital advances) are subject to Confirmation and Reconciliation. Other known liabilities are adequate and not in excess of what are required.

3) The Term Loan facility availed by the Company is secured by pari passu first charge on movable and immovable fixed assets of the Company including mortgage of 298 acres of land to consortium lead by Union Bank of India in favour of IDBI Trusteeship Services Ltd. However, during the year the Company has transferred 137.33 acres of mortgaged land to wholly owned subsidiary with mortgage to continue in favour of lenders.

The said loan is also secured by first pari passu charge on Current assets of the Company.

Term Loan availed from Banks will be repaid over period of 7 to 10 years in unequal monthly installments starting from April 2017 to July 2018.

Term Loan availed from Financial Institutions will be repaid over period of 10 years in unequal monthly installments starting from April 2015.

Interest rate on term loan taken from Banks and Financial institutions varies from base rate plus 2.60 to 3.10.

Interest rate on Loan taken in form of Buyers Credit varies from 0.48 to 3.00.

4) The Company equity shares are in dematerialized form with the Central Depository Services (India) Limited (CDSL) and with National Securities Depository Limited (NSDL) having ISIN No. INE172N01012.

5) The previous year figures have been reworked, regrouped, rearranged and re-classified, wherever necessary. Amount and other disclosure for the preceding year are included as an integral part of the current year financial statement and are to be read in relation to the amounts and other disclosures relating to that year.

6) During the year the Company has transferred the 137.33 acres of land to its 100% subsidiary Company on 10th March, 2016 for which the deed of conveyance is executed on 29th September, 2014 for a total consideration of Rs. 1,057.57 million.

7) The Company has executed an agreement to sale on 7th November, 2014 to sell 32.58 acres of land for a total consideration of Rs. 273.71 million to its 100% subsidiary Walkwater Properties Pvt. Ltd., subject to receipt of approval from the Directorate of Industries / Government of Maharashtra ("DIC") and a no objection (NOCs) from the lenders.

8) The company has suspended operation of Bandit of Robinhood ride on account of malfunctioning and it has filed with the vendor for damages including compensation for loss of business. The company has separately disclosed it as retired asset under fixed asset schedule and is carried at lower of Net Book Value or Net Realizable value.


Mar 31, 2015

1. GENERAL NOTE ON BUSINESS:

The Company is engaged in the business of development and operations of theme based entertainment destinations in India, including theme parks, water parks and associated activities including retail merchandising and food and beverages. The flagship project of the company is located at Khalapur, on Mumbai Pune Expressway and is branded "Adlabs Imagica" for the theme park component and "Adlabs Aquamagica" for the water park component. The Company is developing a 287 room hotel at the same location by the name "Novotel Imagica" which is expected to commence operation in the financial year 2015-2016.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 344.62 Million as on March 31,2015.

3. RELATED PARTY DISCLOSURES (AS IDENTIFIED BY THE MANAGEMENT).

a) Related Party Relationship

i) Holding Company

Thrill Park Limited

ii) Subsidiary Company

- Walkwater Properties Private Limited (w.e.f. September 11,2014)(WPPL)

iii) Key Managerial Personnel

- Mr. Manmohan Shetty

- Mr. Kapil Bagla

- Mr. Harjeet Chhabra Mr. Vincent Pijnenburg Mr. Rakesh Khurmi

iv) Relatives

- Mrs. Pooja Deora

- Ms. Aarti Shetty

v) Entities controlled by Relatives of Director

- Walkwater Properties Private Limited (up to September 10, 2014)(WPPL)

4. a) Earnings in Foreign Currency: Rs. Nil

5. The Current assets, Loans & Advances (including capital advances) have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the balance sheet. Current assets, Loans & Advances (including capital advances) are subject to Confirmation and Reconciliation. Other known liabilities are adequate and not in excess of what are required.

7. The company has mortgaged 298 acres of land with IDBI Trusteeship Services Ltd. as security for the sanctioned term loan from financial consortium with Union Bank of India as the lead banker with pari passu charge.

Term loan by the Company will be repaid over period of 10 years in unequal monthly instalments starting from April 2015. The loan is secured by first pari passu charge on the fixed assets and current assets of the Company

Interest rate on term loan taken from Banks and Financial institutions varies from base rate plus 2.60 to 3.00.

Interest rate on Loan taken in form of Buyers Credit varies from 0.48 to 3.25.

8. The Company equity shares are in dematerialized form with the Central Depository Services (India) Limited (CDSL) and with National Securities Depository Limited (NSDL) having ISIN No. INE172N01012.

9. The previous year figures have been reworked, regrouped, rearranged and re-classified, wherever necessary. Amount and other disclosure for the preceding year are included as an integral part of the current year financial statement and are to be read in relation to the amounts and other disclosures relating to that year.

10. During the year the Company has acquired 100% Shareholding of Walkwater Properties Private Limited.

11. The Company has executed a deed of conveyance on 29th September, 2014 to sell 137.33 acres of land for a total consideration of Rs. 1,057.56 Million to its 100% subsidiary Walkwater Properties Pvt. Ltd. The said conveyance shall be effective and subject to various approvals and no-objection from the consortium of lenders, and fulfillment of other conditions as per conveyance deed.

12. The Company has executed an agreement to sale on 7th November, 2014 to sell 32.58 acres of land for a total consideration of Rs. 273.71 Million to its 100% subsidiary Walkwater Properties Pvt. Ltd., subject to receipt of approval from the Directorate of Industries / Government of Maharashtra ("DIC") and a no objection (NOCs) from the lenders.

13. Share Issue Expenses

Share issue expenses as at March 31, 2015 comprised of expenses incurred in connection with issue of equity shares and there listing on stock exchanges. The total expenses in connection with the IPO where share between the Company and the Holding Company M/s Thrill Park Limited in the proportion of the amount received from the IPO proceeds. The Company share of issue expenses were adjusted against securities premium account u/s 52(2)(c) of the Companies act 2013.

14. The company has made an Initial Public Offering (IPO) during the year of 20,326,227 equity shares of face value of Rs. 10 each. The issue comprised of a fresh issue of equity shares to public of 18,326,227 and an Offer for Sale of 2,000,000 equity shares by the holding company of Adlabs Entertainment Limited, which is M/S Thrill Park Limited. The equity shares were issued at a price of Rs. 180 per share (including premium of Rs. 170 thereon) subject to a discount of Rs. 12 per share to retail investor and at a price of Rs. 221 per share to anchor investors(including premium of Rs. 211 thereon).

15. The fresh equity shares were allotted by the Company on March 27, 2015 and the equity shares were listed on National Stock Exchange of India Limited and BSE Limited on April 6, 2015.

16. The company has mortgaged 25 acres of land for Short Term facilities taken with Union Bank of India at interest rate at Base Rate plus 4%. The facility will be repaid in six months.

17. The company has suspended operation of Bandit of Robinhood ride on account of malfunctioning and it has filed with the vendor for damages including compensation for loss of business. The company has separately disclosed it as retired asset under fixed asset schedule and is carried at lower of Net Book Value or Net Realisable value.

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