Home  »  Company  »  Inox Leisure  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Inox Leisure Ltd.

Mar 31, 2022

5(d). Impairment of right-of-use assets and property, plant and equipment

The Company has reviewed the carrying amounts of right of use assets and property, plant and equipment to determine whether the recoverable amount of a cash generating unit (CGU) is estimated to be less than its carrying amount by performing value in use calculation based on cash flow projections of the relevant CGU. For this purpose, each multiplex of the Company is treated as a separate CGU.

The Company, as at the date of approval of these financial statements, has used internal and external sources on the expected future performance of the Company. The Company has applied the principles of prudence in the judgements, estimates and assumptions (in respect of discount, growth rates and other assumptions) including sensitivity analysis and based on current indicators of the future economic conditions, there is no impairment in current year and preceding year.

Impainment Testing:

Goodwill is in respect of one of the multiplexes of the Company acquired through business combination. This multiplex is considered as cash generating unit (CGU). The Company has performed an annual impairment test to ascertain the recoverable amount of CGU based on a value in use calculation. The Company has used a period greater than five years since the Company has a long term lease arrangement in respect of this multiplex.

The Company, as at the date of approval of these financial statements, has used internal and external sources on the expected future performance of the Company. The Company has applied the principles of prudence in the judgements, estimates and assumptions (in respect of discount, growth rates and other assumptions) including sensitivity analysis.

Key assumptions on which the management has based its cash flow projections:

a) Budgeted footfalls are expected to grow by 5%

b) Budgeted Average Ticket Price (ATP) is expected to grow by 8%

c) Budgeted Refuel Per Person (RPP) is expected to grow by 10%

The Company has considered the impact of COVID-19 pandemic on revenue during the initial period of forecast and then applied the above growth rates for the balance period.

The discount rate used is 9.50% which is based on Weighted Average Cost of Capital (WACC) for the Company.

The calculations performed indicate that there is no impairment of CGU.

The Company held 99.29% equity shares in the subsidiary, Shouri Properties Private Limited (SPPL). During the year, the Company has acquired the balance 0.71% of shares in SPPL and consequently SPPL has become a wholly owned subsidiary of the Company with effect from 20 January 2022.

The Company has carried out a review of the recoverable amount of the investment in the subsidiary and on the basis of the review, no further impairment provision is required.

Scheme of Amalgamation (Merger by Absorption)

Shouri Properties Private Limited (SPPL) is a wholly-owned subsidiary of the Company. SPPL holds a license to operate a multiplex cinema theatre. It has taken one multiplex cinema theatre on lease and subleased the same to the Company. At the meeting of the Board of Directors of the Company held on 21 January 2022, the Board has approved the draft Scheme of Amalgamation (Merger by Absorption) (""the Scheme"") under Sections 230 to 232 of the Companies Act, 2013 (""the Act"") and relevant applicable sections of the act for amalgamation of SPPL with the Company subject to approval of the Scheme by the Shareholders and Creditors of the respective Companies (if required), Hon''ble National Company Law Tribunal, Bench at Mumbai (NCLT Mumbai) and subject to approval of any other statutory authorities as may be required. Once sanctioned, the Scheme will be effective from the Appointed date i.e., 1 February 2022. The first hearing at NCLT Mumbai was held on 12 April 2022 and the directions of NCLT Mumbai are awaited. The effect to the said Scheme will be given after obtaining the necessary approvals.

11.3 The Company has recognised deferred tax asset on tax losses comprising of unabsorbed depreciation and business losses as per the Income-tax Act, 1961. These tax losses pertain to financial year 2020-21 and 2021-22, which is consequent to the COVID-19 pandemic and the resultant lockdown. The business losses can be carried forward for a period of 8 years and the unabsorbed depreciation can be carried forward indefinitely as per the Income-tax Act, 1961. As stated in Note 1, the Board of Directors at its meeting held on 27 March 2022, approved a draft Scheme of Amalgamation (“Scheme") of INOX Leisure Limited (Transferor Company) with PVR Limited (Transferee Company). As defined in the Scheme, the appointed date means the effective date, or such other date as may be mutually agreed between the parties i.e., the appointed date of the Scheme will be determined in future. On the basis of the projections and estimates of the profitability of the Company and the legal position available, the Company expects the said business loss and unabsorbed depreciation to be utilized and consequently the Company has concluded that the said deferred tax asset is recoverable.

(ii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of Rs 10 per share. Each shareholder is eligible for one vote per share held and entitled to receive dividend as declared from time to time. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the Company, in proportion of their shareholding. As per the resolution passed by the shareholders of the Company in the Annual General Meeting held on 23 August 2013, GFL Limited (the holding company) is entitled to appoint majority of directors on the Board of the Company if GFL Limited holds not less than 40% of the paid-up equity capital of the Company.

Pursuant to the Composite Scheme of amalgamation of Company''s subsidiary Fame India Limited (“Fame") and subsidiaries of Fame with the Company, which was operative from 1 April 2012, the Company had allotted fully paid-up 3,45,62,206 equity shares of Rs. 10 each to the shareholders of the transferor companies on 10 July 2013, including fully paid-up 2,44,31,570 equity shares of Rs. 10 each to INOX Benefit Trust (“Trust") towards shares held by Company in Fame. These shares were held by the Trust exclusively for the benefit of the Company. The Company''s interest in the Trust, in accordance with its substance and economic reality, was akin to ''treasury shares''.

As at 31 March 2020, the Trust held 43,50,092 equity shares of the Company. During the preceding year, these shares were sold and the gain of Rs. 6,799.04 lakhs arising from sale of such treasury shares, net of expenses of Rs. 69.72 lakhs, was recognized in other equity as ‘Treasury shares reserve'', being a transaction relating to the capital of the Company.

(ii) Securities provided for secured loans

HDFC Bank Ltd

Term loan from HDFC Bank is secured by first exclusive charge on all movable fixed assets of some multiplexes financed by the said term loan and extended charge on immovable property situated at Mumbai.

The Hongkong and Shanghai Banking Corporation Limited

Term loans from The Hongkong and Shanghai Banking Corporation Limited were secured by first exclusive charge on all movable fixed assets of multiplexes financed by the said term loans. Term loans have been repaid during the year.

(iii) There is no default on repayment of principal or payment of interest on borrowings.

(iv) See Note 48(h) for additional disclosures/regulatory information in respect of borrowings from banks, as required by Schedule III to the Companies Act, 2013.

The Company has applied the practical expedient to all COVID-19 related rent concessions that meet the conditions in paragraph 46B of the Ind AS 116: Leases, as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2021 and the Companies (Indian Accounting Standards) Amendment Rules 2020 and elected not to assess whether such rent concession is a lease modification. The Company has recognised rent concessions aggregating to Rs. 14,497.99 lakhs (preceding year Rs. 22,201.40 lakhs) (after adjusting rent expenses of Rs. 1,863.84 lakhs (preceding year Rs. 758.84 lakhs)). In accordance with principles of fair presentation, the amount of rent concessions recognized has been disclosed as a separate line item in the statement of Profit and Loss.

(i) Provision for service tax is in respect of service tax payable on renting of immovable property, for the period from 1 June 2007 to 30 September 2011, which was defined as a taxable service by the Finance Act, 2010, with retrospective effect from 1 June 2007. The matter is pending before the Hon''ble Supreme Court of India.

(ii) Provision for other indirect taxes is in respect of demands/notices received under indirect tax laws and the same are contested by the Company at appropriate levels.

(ii) Securities provided for secured loans:

Overdraft facility was secured by first charge on entire current assets of the Company (except those charged against term loans).

(iii) Unsecured overdraft facility carries interest rate ranging from 7.45 % to 9.00%.

(iv) There is no default on repayment of principal or payment of interest on borrowings.

(v) See Note 48(h) for additional disclosures/regulatory information in respect of borrowings from banks, as required by Schedule III to the Companies Act, 2013.

7) Reason for shortfall in preceding year:

During the preceding year, the Company could not spent the entire amount required to be spent as per Section 135(5) of the Act as it was in process of identifying the suitable projects for CSR. The unspent CSR amount was subsequently transferred to the PM Cares Fund i.e. a fund mentioned under Schedule VII of the Act within the timelines specified.

8) The nature of CSR activities undertaken by the Company as below:

Eradication of hunger and malnutrition, promoting education and employment enhancing vocation skills, training to promote rural, nationally recognised, Paralympic and Olympic sports.

35.3 In respect of taxation matters

The Company''s contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted by Hon''ble Supreme Court in respect of the exemption availed in the state of Maharashtra, West Bengal & Gujarat on the basis of Schemes pertaining to these three States. In respect of all other states, the same has been accepted by various appellate authorities. Provision for income tax, till the year ended 31 March 2015, was made on this basis, to the extent the entertainment tax exemption is held as capital receipt for such multiplexes.

36. Segment Information

Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and segment performance focuses on single business segment viz. theatrical exhibition. All activities of the Company are in India and hence there are no geographical segments.

A. Defined contribution plans

The Company contributes to the Government managed provident and pension fund for all qualifying employees.

During the year contribution to provident and pension fund of Rs. 552.66 Lakhs (preceding year Rs. 481.34 Lakhs) is recognized as an expense and included in ‘Contribution to Provident & Other Funds'' in the Statement of Profit and Loss and Rs. 19.21 lakhs (preceding year Rs. 9.80 lakhs) is included in pre-operative expenses.

B. Defined benefit plan:

The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the Payment of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefit. The level of benefits provided depends on the employee''s length of service and salary at retirement age. The Company''s defined benefit plan is unfunded.

There are no other post retirement benefits provided by the Company.

The most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31 March 2022 by M/s KP Actuaries and Consultants LLP. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.

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

This plan typically exposes the Company to actuarial risks such as interest rate risk and salary risk.

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, any variation in the expected rate of the salary increase of the plan participants will change the plan liability.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the defined obligation as at 31 March 2022 is 7 years (preceding year 6.47 years)

C. Other long term employment benefits:

Leave benefits

The Liability towards Leave benefits (Annual Privilege leave) for the year ended 31 March 2022 based on actuarial valuation carried out by using Projected unit credit method resulted in decrease in liability by Rs. 13.65 lakhs (preceding year Rs 67.37 lakhs) which is included in the employee benefits in the Statement of Profit and Loss.

39. Financial Instruments (i) Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to the stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt and total equity of the Company. The Company is not subject to any externally imposed capital requirements. The Company''s Board of Directors (BOD) reviews the capital structure of the entity. As part of this review, BOD considers the cost of capital and risk associated with each class of capital.

The Company''s principal financial liabilities comprise of borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations including acquiring of PPE and ROU. The Company''s principal financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances derived directly from its operations. The Company also holds FVTPL investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Senior management provides assurance to the Board of directors that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Company does not enters into any derivative instruments for trading or speculative purposes. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: foreign currency risk, interest rate risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables and loans.

(i) Foreign Currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company''s import of materials and PPE are not significant to cause major exposure to foreign currency variations. Exchange rate exposures are managed within approved policy parameters utilising forward foreign currency contracts, as and when necessary.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk mainly on account of its borrowing from banks, which have both fixed and floating interest rates. Bank overdrafts are subject to variable rate of interest. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

(iii) Other price risks

The Entity is exposed to equity price risks arising from equity investments. Equity investment in subsidiary is held for strategic rather than trading purposes. The entity does not actively trade in this investments. The Company''s investment in mutual funds are in debt funds. Hence the Company''s exposure to equity price risk is minimal.

(b) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining security, where appropriate, as a means of mitigating the risk of financial loss from defaults.

For trade receivables, the average credit period generally ranges from 60 to 90 days. Before accepting any new customer, Company uses information available in public domain and industry sources to assess the potential customer''s credit quality and defines credit limits for respective customer. Credit Limits attributed to customers are reviewed periodically.

Customers who represents more than 5% of the total balance of trade receivable as at 31 March 2022 is Rs. 1,164.74 lakhs (as at 31 March 2021 Rs. 149.37 lakhs) are due from 4 customers (preceding year 2 customers).

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the receivables and the rates as given in the provision matrix.

In respect of counter-guarantees given by the Company:

As at 31 March 2022, an amount of Rs. Nil (preceding year Rs. 342.97 lakhs) has been recognised in the balance sheet as contingent liabilities. It was towards counter-guarantee given for bank guarantee taken by a subsidiary company, which is the Company''s maximum exposure in this regard.

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company''s short, medium and longterm funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities and continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

Financial instrument measured at Amortised Cost

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different than the values that will be eventually received or paid.

40: Share-based payments

Details of the employee share option plan of the Company:

The Company has a share option scheme applicable to the employees and Directors of the Company, its subsidiary companies or its holding company and any successor company thereof, as determined by the Compensation, Nomination and Remuneration Committee on its own discretion. The Scheme is administered through INOX Leisure Limited - Employees Welfare Trust.

In the year ended 31 March 2006, the Company had issued 500,000 equity shares of Rs. 10 each at a premium of Rs. 5 per share to INOX Leisure Limited - Employees'' Welfare Trust ("ESOP Trust") to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs. 75.00 Lakh to the ESOP Trust for subscription of these shares at the beginning of the plan.

Each share option converts into one equity share of the Company on exercise. The options are granted at an exercise price of Rs. 15 per option. The option carry neither rights to dividends nor voting rights. The options granted are required to be exercised within a period of one year from the date of vesting of the respective options.

On 01 June 2021, stock options of 1,47,500 shares has been granted to employees and on 23 June 2017, stock options of 1,67,500 shares had been granted to employees. The vesting period for these equity settled options is between one to four years from the date of the respective grants. The options are exercisable within one year from the date of vesting.

The compensation costs of stock options granted to employees are accounted using the fair value method.

a. Sales of movie tickets and service transactions are made at the arms length price.

b. The amounts outstanding are unsecured and will be settled in cash. No expense has been recognised in the current or preceding year for bad or doubtful receivables in respect of the amounts owed by related parties.

c. The Company had been provided with Inter corporate deposit at rate comparable to the average commercial rate of interest. This loan was unsecured. The same has been repaid during the year.

The remuneration of directors and key executives is determined by the Remuneration Committee having regard to the performance of individuals and market trends. As the liabilities for the defined benefit plans and other long term benefits are provided on actuarial basis for the Company as a whole, the amount pertaining to KMP are not included above.

The amount of remuneration reported above includes:

A. Contribution to Provident Fund (defined contribution plan) is Rs. 7.66 Lakhs (preceding year Rs. 4.66 lakhs)

B. Share options exercised under ESOP of Rs. 14.81 Lakhs (preceding year Rs 10.77 Lakhs)

Additional disclosures required under section 186(4) of the Companies Act, 2013

The Company has given a counter guarantee of Rs. Nil (preceding year Rs. 342.97 lakhs) in respect of bank guarantee taken by its subsidiary, Shouri Properties Private Limited. This bank guarantee was towards entertainment tax exemption availed by the subsidiary. The Company has a leasing arrangement with this subsidiary to operate a multiplex from the said location.

42 Leases42.1 As a Lessee

The Company is operating most of its multiplexes under operating lease. These arrangements generally are for an initial period of 9-29 years with a minimum lock-in period of 5-15 years, after which the lessor does not have a right to terminate the arrangement. The agreements provide for escalation after pre-determined periods. Some of the agreements are fully or partially on revenue share basis. The Company does not have an option to purchase the leased premises at the expiry of lease period.

As explained in Note 21: Lease Liabilities, the Company has recognised rent concessions aggregating to Rs. 16,361.83 lakhs (preceding year Rs. 22,960.24 lakhs) and after adjusting the rent expenses of Rs. 1,863.84 lakhs (preceding year Rs. 758.84 lakhs) as above, the net amount of Rs. 14,497.99 lakhs (preceding year Rs. 22,201.40 lakhs) has been disclosed as a separate line item in the statement of Profit and Loss.

44. Contingent liabilities

(H in Lakhs)

Particulars

As at 31 March 2022

As at 31 March 2021

a. Claims against the Company not acknowledged as debt :

116.36

116.36

In the arbitration proceedings in respect of termination notice of MOU for a proposed multiplex, the arbitrator has awarded the matter against the Company and directed the Company to pay Rs. 116.36 Lakh towards rent for the lock in period. Further, the arbitrator has also directed the Company to pay the amount of difference between the rent payable by the Company as per the MOU and the amount of actual rent received by the other party from their new tenant. The differential amount is presently not determinable. The Company has challenged the arbitration award before the Hon''ble High Court of judicature at Delhi and the same is pending.

b. Entertainment Tax matters:

2,923.65

4,674.01

This includes

i Demands in respect of some multiplexes pertaining to exemption period and the same is contested by way of appeal before appropriate authorities.

2,821.33

4,571.69

ii Other demands are mainly in respect of levy of entertainment tax on

102.32

102.32

service charges and convenience fee collected.

The Company has paid Rs. 7.70 lakhs (preceding year Rs 578.43 lakhs) to the respective authorities under protest (which is included in ‘Other non current assets'')

c. Service Tax matters

6,313.22

20,540.19

This includes

i In respect of levy of service tax on film distributor''s'' share paid by the

Company. During the year, the matter is decided in favour of the Company by CESTAT and Hon''ble Supreme Court.

14,226.97

ii In respect of levy of service tax on sale of food and beverages in multiplex

6,313.22

6,313.22

premises and the matter is being contested by way of appeal before the appropriate authorities.

The Company has paid Rs. 397.55 lakhs (preceding year Rs. 976.55 lakhs) to the respective authorities under protest (which is included in ‘Other non current assets'')

d. Stamp duty matter

Authority has raised the demand for non-payment of stamp duty on Leave & License Agreement in respect of one of the multiplexes, holding the same as lease transaction. Stay has been granted and the matter is pending before Board of Revenue.

263.81

263.81

(H in Lakhs)

Particulars

As at 31 March 2022

As at 31 March 2021

e.

Custom duty matter in respect of import of projector

4.36

4.36

In addition to above, the Company had also received a show cause cum demand notice from customs on import of cinematographic films, the amount of duty is yet to be quantified.

f.

TDS matters, disputed in appeal by the Company:

43.64

21.79

The Company has paid Rs. 4.30 lakhs (preceding year Rs. Nil) to the respective authorities under protest (which is included in ‘Other non current assets'')

g.

The Company may be required to charge additional cost towards electricity from 1 June 2007 to 31 March 2010 pursuant to the increase in the tariff in case the appeal made with Maharashtra Electricity Regulatory Commission ‘MERC'' by the Company through the Multiplex Association of India is rejected and the case filed in the Supreme Court by one of the electricity supplier against the order of the Appellate Tribunal for Electricity, dated 19 January 2009, for change in category, is passed in favour of the electricity supplier. The Company has paid the whole amount to the respective authorities under protest (which is included in ‘Other non current financial assets'')

389.83

389.83

h.

Counter-guarantee given for bank guarantee taken by a subsidiary company

-

342.98

In respect of above matters, no additional provision is considered necessary as the Company expects favourable outcome. Further, it is not possible for the Company to estimate the timing and amount of the further cash outflow, if any, in respect of these matters.

45. The Code on Social Security 2020 has been notified in the Official Gazette on 29 September 2020, which could impact the contributions by the Company towards certain employment benefits. However, the date from which the Code will come into effect has not been notified. The Company will assess and give appropriate impact in the financial statements in the period in which the Code comes into effect.

46. Exceptional Items

(H in Lakhs)

Particulars

Year ended 31 March 2022

Year ended 31 March 2021

Entertainment tax subsidy recoverable in respect of one of the multiplexes, written off

-

600.00

Less: Corresponding balance in the deferred revenue account

-

(191.89)

Total

-

408.11

47. Qualified Institutions Placement (QIP)

(i) During the year ended 31 March 2022, the Company has completed the Qualified Institutions Placement (''QJP'') under Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended (the "SEBI ICDR Regulations"), pursuant to which 96,77,419 equity shares having a face value of Rs. 10 each were issued and allotted, at an issue price of Rs. 310 per equity share (including a securities premium of Rs. 300 per equity share), aggregating to Rs. 30,000 lakhs.

The proceeds of Qualified Institutions Placement amounts to Rs. 28,645.56 lakhs (net of issue related expenses which has been adjusted against securities premium). As per the placement document, QJP proceeds can be utilised for (i) to meet capital expenditure requirements for ongoing and future projects; (ii) to sustain growth in the business; (iii) for business expansion and to improve the financial leveraging strength of the Company; (iv) towards working capital requirements; (v) towards debt repayments including repayment of any existing or future debt incurred for any purpose including for paying

off any liability; (vi) for investments including amongst others, in subsidiary companies; (vii) to meet the current operational expenses; and (viii) for general corporate purposes including but not limited to pursuing new business opportunities, acquisitions, alliances etc. As at 31 March 2022, Rs. 10,000 lakhs of QJP proceeds are unutilised and have been temporarily invested in liquid schemes of mutual funds and fixed deposits with scheduled commercial banks.

(ii) During the previous year ended 31 March 2021, the Company had completed the Qualified Institutions Placement (''QJP'') under Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, pursuant to which 98,03,921 equity shares having a face value of Rs. 10 each were issued and allotted, at an issue price of Rs. 255 per equity share (including a securities premium of Rs. 245 per equity share), aggregating to Rs. 25,000 lakhs.

The proceeds of Qualified Institutions Placement amounts to Rs. 24,655.56 lakhs (net of issue related expenses which has been adjusted against securities premium). As per the placement document, QIP proceeds can be utilised for (i) to meet capital expenditure requirements for ongoing and future projects, (ii) to sustain growth in the business, (iii) for business expansion and to improve the financial leveraging strength of the Company, (iv) towards working capital requirements, (v) towards debt repayments including repayment of any existing or future debt incurred for any purpose including for paying off any liability, (vi) for investments including amongst others, in subsidiary companies, and (vii) for general corporate purposes including but not limited to pursuing new business opportunities, acquisitions, alliances etc. As at 31 March 2022, entire QIP proceeds have been utilised.

48. Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013a) Details of benami property held

No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made thereunder.

b) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

c) Compliance with approved Scheme(s) of Arrangements

There is no Scheme of Arrangements that has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

d) Loans and advances granted to related party

The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties.

e) Undisclosed income

There is no income surrendered or disclosed as income during the current or preceding year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), that has not been recorded in the books of account.

f) Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

g) Utilisation of Borrowed funds and share premium

The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities ("Funding Party"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

h) In case of borrowings from banks

i) Utilisation of borrowed funds

At the balance sheet date, the Company has used the borrowings from banks for the specific purpose for which it was taken.

ii) Security of current assets against borrowings

The Company does not have any borrowings from banks on the basis of security of current assets.

iii) Wilful defaulter

The Company is not declared wilful defaulter by any bank or financial institution or other lender.

iv) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction of charges that are yet to be registered with Registrar of Companies beyond the statutory period.


Mar 31, 2018

1. Company information

Inox Leisure Limited (“the Company”) is a public limited company incorporated in India. The Company is engaged in operating & managing multiplexes and cinema theatres in India. The Company’s holding company is Gujarat Fluorochemicals Limited and its ultimate holding company is Inox Leasing and Finance Limited. The shares of the Company are listed on the Bombay Stock Exchange and the National Stock Exchange of India.

The Company’s registered office is located at ABS Towers, Old Padra Road, Vadodara - 390 007, and the particulars of its other offices and multiplexes/cinema theatres are disclosed in the annual report.

2. Statement of compliance and basis of preparation and presentation

2.1 Statement of Compliance

These financial statements are the separate financial statements of the Company (also called standalone Ind AS financial statements) and comply in all material aspects with the Indian Accounting Standards (“Ind AS”) notified under section 133 of the Companies Act, 2013 (“the Act”) and other relevant provisions of the Act.

2.2 Basis of Measurement

These financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

These financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the significant accounting policies.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

2.3 Basis of Preparation and Presentation

Effective 1 April 2016, the Company has adopted all the Ind AS Standards and the adoption was carried out in accordance with Ind AS 101 ‘First time adoption of Indian Accounting Standards’, with 1 April 2015 as the transition date. The transition was carried out from the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended), which was the Previous GAAP

Accounting policies have been consistently applied except where a newly issued accounting standards initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements have been prepared on accrual and going concern basis.

Any asset or liability is classified as current if it satisfies any of the following conditions:

- the asset/liability is expected to be realized/settled in the Company’s normal operating cycle;

- the asset is intended for sale or consumption;

- the asset/liability is held primarily for the purpose of trading;

- the asset/liability is expected to be realized/settled within twelve months after the reporting period

- the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;

- in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All other assets and liabilities are classified as non-current.

For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of products and services and the time between the acquisition of assets or inventories for processing and their realisation in cash and cash equivalents.

These financial statements were authorized for issue by the Company’s Board of Directors on 7 May, 2018.

b) The Company held 50% equity shares in the joint venture, Swanston Multiplex Cinemas Private Limited (“SMCPL”). During the year, the Company has acquired the balance 50% of shares in SMCPL and consequently SMCPL has become a wholly owned subsidiary of the Company with effect from 5th March 2018.

3 Critical accounting judgements and use of estimates

In application of Company’s accounting policies, which are described in note 3, the directors of the Company are required to make judgements, estimations and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision or future periods if the revision affects both current and future periods.

3.1 Following are the critical judgements that have the most significant effects on the amounts recognized in these financial statement:

a) In respect of Government Grants

Some of the multiplexes operated by the Company are entitled to exemption from payment of entertainment tax in terms of the schemes notified by the respective State Governments, whose primary condition is that the Company should establish and operate multiplexes in specified areas. Therefore, in terms of Ind AS 20 Accounting for Government Grants, these grants are classified as grants related to assets of such multiplexes. Accordingly, the Company presents the same in the balance sheet by setting up the grant as deferred income and is recognised in profit or loss as other operating revenue on a systematic basis over the useful lives of the related assets.

b) In respect of assets taken on operating lease

The Company has taken most of the properties on operating lease from where the multiplexes and cinema theatres are being operated. The lease terms provide for periodic increase in the amount of lease payments. Considering the terms of the agreements and the rate of increase in lease payments, it is assessed that the payment to lessors are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. Accordingly, the Company recognizes the lease payments as expenses as per the respective terms of the leases in such cases.

c) Leasehold land

In respect of leasehold lands, considering the terms and conditions of the leases, particularly the transfer of the significant risks and rewards, it is concluded that they are in the nature of operating leases.

d) Impairment of property, plant and equipment

For the purpose of impairment testing of property, plant and equipment, each multiplex / cinema theatre is identified as a Cash-Generating Unit (CGU) being the smallest identifiable Company of assets that generates cash inflows that are largely independent of the cash inflows from other assets or Company of assets.

Further, it is not possible to measure fair value less cost of disposal of a CGU (viz. a multiplex or a cinema theatre) because there is no basis for making a reliable estimate of the price at which an orderly transaction to sell the asset would take place between the market participant at the measurement date in case of such operating CGUs. Hence the asset’s value in use is used as recoverable amount of such CGUs in determining the extent of impairment loss, if any.

3.2 Following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

a) Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the Cash-Generating Units (CGU) to which goodwill has been allocated. The value in use calculation requires the directors of the Company to estimate the future cashflows expected to arise from the CGU and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.

The carrying amount of goodwill as at 31 March 2018 was Rs.1,750 lakhs (as at 31 March 2017: Rs.1,750 lakhs) Details of impairment calculations are set out in Note 6.

b) Useful lives of Property, Plant & Equipment (PPE) and intangible assets (other than goodwill)

The Company has adopted useful lives of PPE and intangible assets (other than goodwill) as described in Note 3.12 and 3.13 above. The Company reviews the estimated useful lives of PPE and intangible assets (other than goodwill) at the end of each reporting period.

c) Fair value measurements and valuation processes

Some of the Company’s assets and liabilities are measured at fair value for financial reporting purposes.

In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company generally engages third party qualified valuers to perform the valuation. The Chief Executive Officer and Chief Financial Officer of the Company work closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. The Chief Financial Officer reports the findings to the board of directors of the Company.

Information about the valuation techniques and inputs used in determining the fair values of various assets and liabilities are disclosed in Note 40.

d) Other assumptions and estimation uncertainties, included in respective notes are as under

- Estimation of current tax expense and payable, recognition of deferred tax assets and possibility of utilizing available tax credits - see Note 36 and 12.

- Measurement of defined benefit obligations and other long-term employee benefits - see Note 39

- Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources - see Note 24 and 45

- Impairment of financial assets - see Note 40

(i) Details of freehold land and buildings that are mortgaged to secure borrowings of the Company (see Note 22) are as under. The Company is not allowed to mortgage these assets as security for other borrowings.

(ii) Details of leasehold improvements, plant and equipment, office equipment and furniture and fixtures that are hypothecated to secure loans from banks (see Note 22) are as under. The Company is not allowed to pledge these assets as security for other borrowings.

(iii) Details of plant and equipment, office equipment and furniture and fixtures that are hypothecated to secure bank guarantee facility from bank are as under. The Company is not allowed to pledge these assets as security for other borrowings.

(iv) During the year, the Company has carried out review for impairment testing and the review led to the recognition of impairment loss of Rs.308.95 lakhs (as at 31 March 2017: Rs.88.46 lakhs) due to lower than expected performances in respect of four multiplex theatres (as at 31 March 2017: two multiplex theatres). This impairment loss is recognised in the Statement of Profit and Loss. The recoverable amount of the relevant assets has been determined on the basis of their value in use which amounts to Rs.520.38 lakhs at 31 March 2018 (as at 31 March 2017: Rs.218.00 lakhs). It is not possible to measure fair value, less cost of disposal, of a multiplex theatre and hence the value in use is used as recoverable amount. The discount rate used in measuring the value in use was 12% per annum.

Capital work in progress includes amount of Rs.649.60 lakhs (as at 31 March 2017: Rs.3,362.53 lakhs) in respect of multiplex premises under construction which have been hypothecated to secure loans from banks (see Note 22). The Company is not allowed to hypothecate these assets as security for other borrowings or to sell them to another entity.

4A. Allocation of goodwill to cash generating units:

Goodwill is in respect of one of the multiplexes of the company acquired through business combination. This multiplex is considered as cash generating unit.

Before recognition of impairment losses, the carrying amount of goodwill is as follows:

The recoverable amount of this cash generating unit is determined based on a value in use calculation which uses discounted cashflow projections covering a ten year period and a discount rate of 12% p.a. (as at 31 March 2017: 12% p.a.)

Key Assumptions used in value in use calculations for this cash generating unit are as follows:

Budgeted Footfalls :

Budgeted footfalls are expected to grow by 3%. The values assigned to the assumption are based on the increased focus on these operations and newer cinema technology such as IMAX being introduced in this location.

Budgeted Average Ticket Price (ATP):

Budgeted ATP is expected to grow by 7% per year. The values assigned to the assumption are based on the rebranding of these operations and newer cinema technology such as IMAX being introduced in this location.

Budgeted Spend per head (SPH)

Budgeted SPH is expected to grow by 10%. The values assigned to the assumption are based on the rebranding of these operations.

(i) In case of Shouri Properties Private Limited, during the previous year, the Company had carried out a review of the recoverable amount of the investment in this subsidiary. The review let to recognition of an impairment loss of Rs.40.88 lakhs which was recognised in the Statement of Profit or Loss. The impairment loss was recognised on the basis of the value in use determined at Rs.99.12 lakhs as at 31 March 2017. On the basis of review carried out during the current year, no further impairment provision is required.

(ii) The Company held 50% equity shares in the joint venture, Swanston Multiplex Cinemas Private Limited (“SMCPL”). During the year, the Company has acquired the balance 50% of shares in SMCPL and consequently SMCPL has become a wholly owned subsidiary of the Company with effect from 5th March 2018.

(ii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each shareholder is eligible for one vote per share held and entitled to receive dividend as declared from time to time. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, in proportion of their shareholding.

The shareholders of the Company have passed a resolution at the Annual General Meeting held on 23 August 2013 amending the Articles of Association of the Company entitling Gujarat Fluorochemicals Limited (GFL) to appoint majority of directors on the Board of the Company if GFL holds not less than 40% of the paid-up equity capital of the Company. Accordingly, GFL is having control over the Company and hence the Company is a subsidiary of GFL.

(v) Shares reserved for issue under option

For details of equity shares reserved for issue under the employees stock option (ESOP) plan of the Company, see Note 41.

(vi) Shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

During the year ended 31 March 2014, 3,45,62,206 equity shares of Rs.10 each, fully paid-up, were issued to the shareholders of erstwhile Fame India Limited pursuant to the Scheme of Amalgamation. This includes equity shares alloted to INOX Benefit Trust (see Note 21).

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

The above reserve relates to share option granted by the Company to its employees/employees of the holding company under the employee share option plan. Further information about share based payment to employees is set out in Note 41. Movement during the year is on account of share options granted.

The amount that can be distributed by the Company as dividends to its equity shareholders is determined after considering the requirements of the Companies Act, 2013 and subject to levy of dividend distribution tax, if any. Thus, the amounts reported above may not be distributable in entirety.

5. Treasury shares

Pursuant to the Composite Scheme of Amalgamation of Company’s subsidiary Fame India Limited (“Fame”) and subsidiaries of Fame with the Company, which was operative from 1 April 2012, the Company had allotted fully paid-up 3,45,62,206 equity shares of Rs.10 each to the shareholders of the transferor companies on 10 July 2013, including fully paid-up 2,44,31,570 equity shares of Rs.10 each to INOX Benefit Trust (“Trust”) towards shares held by Company in Fame. These shares are held by the Trust exclusively for the benefit of the Company.

Particulars of shares of the Company held by the Trust, at cost, are as under:

The Company ‘s interest in the Trust, being akin to Treasury Shares, in accordance with their substance and economic reality, is deducted from Total Equity. Any profit or loss arising from sale of Treasury Shares by the Trust will be recorded separately as ‘Reserve on sale of Treasury Shares’ in other equity, being transactions relating to the capital of the Company.

The above treasury shares are excluded while computing the Earnings Per Share.

(ii) Securities provided for secured loans

Axis Bank Ltd

Term loan from Axis Bank are secured by mortgage of immovable property situated at Vadodara and Anand and first exclusive charge on all movable fixed assets and current assets of some multiplexes financed by the said term loans and escrow of entire cash flows relating to such multiplexes.

HDFC Bank Ltd

Term loan from HDFC Bank is secured by mortgage of immovable property situated at Mumbai and first exclusive charge on all movable fixed assets of some multiplexes financed by the said term loan.

The Hongkong and Shanghai Banking Corporation Limited

Term loans from The Hongkong and Shanghai Banking Corporation Limited are secured by paripasu charge on mortgage of immovable property situated at Vadodara and first exclusive charge on all movable fixed assets and current assets of some multiplexes financed by the said term loans.

(iii) The inter-corporate deposits are repayable in 6 to 8 years from the date of respective deposits and carry interest @ 10%. The earliest repayment is due on June 2020.

(iv) There is no default on repayment of principal or payment of interest on borrowings.

(i) Provision for service tax is in respect of service tax payable on renting of immovable property, for the period from 1 June 2007 to 30 September 2011, which was defined as a taxable service by the Finance Act, 2010, with retrospective effect from 1 June 2007. The matter is pending before the Hon’ble Supreme Court of India.

(ii) Provision for municipal tax is in respect of disputed amount pertaining to one of the Company’s multiplexes.

(iii) Provision for other indirect taxes is in respect of matters contested by the Company at appropriate levels against the demands raised by the respective tax authorities.

ii) Corporate Social Responsibility (CSR)

(a) The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) is Rs.102.84 lakhs (previous year Rs.106.96 lakhs).

(b) Amount spent during the year on:

iii) Donation to political party

During the previous year Company had given donation of Rs.10 Lakhs to Bhartiya Janata Party and the same was included in Miscellaneous expenses.

iv) Bad debts & remissions are net of provision for doubtful trade receivable adjusted of Rs.38.69 lakhs (previous year ‘ Nil) and reduction in provision for expected credit loss of Rs.46.18 lakhs (previous year ‘ Nil)

The tax rate used for the 2017-2018 and 2016-2017 reconciliations above is the corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under the Indian tax law.

The increase in corporate tax rate applicable to the Company from 34.608% to 34.944% (on account of increase in cess) was substantially enacted before 31 March 2018 and will be effective from 1 April 2018. As a result, the deferred tax balances have been remeasured and the effect of the same is reflected in the above reconciliation.

6.1. In respect of taxation matters

The Company’s contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted by Hon’ble Supreme Court in respect of the exemption availed in the state of Maharashtra & West Bengal on the basis of Schemes pertaining to these two States. In respect of some other states, the same has been accepted by various appellate authorities and Hon’ble High Court of Judicature at Gujarat. Provision for income tax, till the year ended 31 March 2015, was made on this basis, to the extent the entertainment tax exemption is held as capital receipt for such multiplexes.

In view of the assessment and appellate orders received during the year accepting certain claims of the Company, mainly regarding depreciation on goodwill arising on amalgamation of a subsidiary company and no disallowance required under section 14A of the Income tax Act, the tax liability (including deferred tax) for earlier years, is recomputed and consequential reduction in taxation for earlier years is recognised in the Statement of Profit and Loss as under:

7. Segment Information

Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and segment performance focuses on single business segment viz. theatrical exhibition. All activities of the Company are in India and hence there are no geographical segments.

Note: The shares of the Company held by Inox Benefit Trust (see Note 21) are excluded while computing the weighted average number of shares.

8 Employee benefits

A. Defined contribution plans

The Company contributes to the Government managed provident and pension fund for all qualifying employees During the year contribution to provident and pension Fund of Rs.496.18 Lakh (previous year Rs.475.31 Lakhs) is recognized as an expense and included in ‘Contribution to Provident & Other Funds’ in the Statement of Profit and Loss and Rs.29.70 Lakhs (previous year Rs.26.21 Lakhs) is included in preoperative expenses.

B. Defined benefit plan:

The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the Payment of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefit. The level of benefits provided depends on the employee’s length of service and salary at retirement age. The Company’s defined benefit plan is unfunded.

There are no other post retirement benefits provided by the Company.

The most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31 March 2018 by Mr. G.N. Agarwal, Fellow of the Institute of the Actuaries of India. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.

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

This plan typically exposes the Company to actuarial risks such as interest rate risk and salary risk.

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, any variation in the expected rate of the salary increase of the plan participants will change the plan liability.

Sensitivity Analysis

Significant actuarial assumptions for the determination of defined obligation are discount rate, expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occuring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the defined obligation as at 31 March 2018 is 7.82 years (previous year 7.87 years)

C. Other long term employment benefits:

Leave benefits

The Liability towards Leave benefits (Annual and sick leave) for the year ended 31 March 2018 based on actuarial valuation carried out by using Projected accrued benefit method resulted in increase in liability by Rs.1.76 lakhs( previous year Rs.102.80 lakhs) which is included in the employee benefits in the Statement of Profit and Loss.

The principal assumptions used for the purposes of the actuarial valuations of leave benefits are as follows:

9. Financial Instruments

(i) Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to the stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt and total equity of the Company. The Company is not subject to any externally imposed capital requirements. The Company’s Board of Directors (BOD) reviews the capital structure of the entity. As part of this review, BOD considers the cost of capital and risk associated with each class of capital.

The carrying amount reflected above represents the Company’s maximum exposure to credit risk for such financial assets.

(iii) Financial risk management

The Company’s principal financial liabilities comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations including acquiring of PPE. The Company’s principal financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances derived directly from its operations. The Company also holds FVTPL investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Senior management provides assurance to the Board of directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Company does not enters into any derivative instruments for trading or speculative purposes. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: foreign currency risk, interest rate risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables and loans.

(i) Foreign Currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company’s import of materials and PPE are not significant to cause major exposure to foreign currency variations. Exchange rate exposures are managed within approved policy parameters utilising forward foreign currency contracts, as and when necessary.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the year, which are not hedged are as follows:

The Company is only exposed to changes in USD. The below table demonstrates the sensitivity to a 10% increase or decrease in the USD against INR, on profit or loss and total equity , with all other variable held constant.

(ii) Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk mainly on account of its borrowing from banks and inter corporate deposits, which have both fixed and floating interest rates. Bank overdrafts are subject to variable rate of interest. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the year was outstanding for the whole year.

(iii) Other price risks

The Entity is exposed to equity price risks arising from equity investments. Equity investments in Subsidiaries and Joint Venture are held for strategic rather than trading purposes. The entity does not actively trade in these investments. The Company’s investment in mutual funds are in debt funds. Hence the Company’s exposure to equity price risk is minimal.

(b) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.

The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining security, where appropriate, as a means of mitigating the risk of financial loss from defaults.

For trade receivables, the average credit period generally ranges from 60 to 90 days. Before accepting any new customer, Company uses information available in public domain and industry sources to assess the potential customer’s credit quality and defines credit limits for respective customer. Credit Limits attributed to customers are reviewed periodically.

Customers who represents more than 5% of the total balance of Trade Receivable as at 31 March 2018 is Rs.1,766.96 lakhs (as at 31 March 2017 of Rs.2,712.91 lakhs) are due from 4 major customers who are reputed parties and having long term contract.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the receivables and the rates as given in the provision matrix.

As at 31 March 2018, an amount of Rs.1,643.18 lakhs has been recognised in the balance sheet as contingent liabilities. It is towards counter-guarantee given for bank guarantee taken by a subsidiary company, which is the Company’s maximum exposure in this regard.

(c) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities and continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Companies remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The above liabilities will be met by the Company from internal accruals, realization of current and noncurrent financial assets (other than strategic investments). Further, the Company also has unutilised financing facilities.

In the period, there were no transfers between Level 1, 2 and 3.

Financial instrument measured at Amortised Cost

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different than the values that will be eventually received or paid.

10. Share-based payments

Details of the employee share option plan of the Company-

The Company has a share option scheme applicable to the employees and Directors of the Company, its subsidiary companies or its holding company and any successor company thereof, as determined by the Compensation, Nomination and Remuneration Committee on its own discretion. The scheme is administered through Inox Leisure Limited - Employees Welfare Trust.

In the year ended 31 March 2006, the Company had issued 5,00,000 equity shares of Rs.10 each at a premium of Rs.5 per share to Inox Leisure Limited - Employees’ Welfare Trust (“ESOP Trust”) to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs.75.00 Lakhs to the ESOP Trust for subscription of these shares at the beginning of the plan.

Each share option converts into one equity share of the Company on exercise. The options are granted at an exercise price of Rs.15 per option. The option carry neither rights to dividends nor voting rights. The options granted are required to be exercised within a period of one year from the date of vesting of the respective options.

On 23 June 2017, stock options of 1,67,500 shares have been granted to employees and during the previous year, on 5 January 2017, stock options of 20,000 shares have been granted to an employee of holding company. The vesting period for these equity settled options is between one to four years from the date of the respective grants. The options are exercisable within one year from the date of vesting.

The compensation costs of stock options granted to employees are accounted using the fair value method Fair value of share options granted in the year

The weighted average fair value of the share options granted during the financial year is Rs.269.10 (previous year Rs.217.56) in respect of growth options vesting in one to four years. The fair value has been calculated using the Black Scholes Options Pricing Model. The Black-Scholes model requires the consideration of certain variables such as volatility, risk free rate, expected dividend yield, expected option life, market price and exercise price for the calculation of fair value of the option. These variables significantly influence the fair value and any change in these variables could significantly affect the fair value of the option. The significant assumptions made in this regard are as under:

* During the year employee of holding company has exercised 5000 stock options, allotment of the same is pending as on 31 March 2018.

Method used for accounting of share based payment plan:

The Company has used fair value method to account for the compensation cost of stock options granted to its employees and the employee of holding company. The compensation cost of Rs.179.48 Lakhs (previous year Rs.5.27 Lakhs) is recognised in the Statement of Profit and Loss.

11. Related Party Transactions

(i) Where Control Exists

a. Gujarat Fluorochemicals Limited - holding company

b. Inox Leasing & Finance Limited - ultimate holding company

c. Shouri Properties Private Limited - subsidiary company

d. Swanston Multiplex Cinemas Private Limited - subsidiary company w.e.f. 5th March 2018 (a joint venture up to 4th March 2018)

e. INOX Leisure Limited - Employees’ Welfare Trust - controlled trust

f. INOX Benefit Trust - controlled trust

(ii) Other related parties with whom there are transactions:

Key Management Personnel (KMP)

a. Mr. Pavan Kumar Jain - Director

b. Mr. Vivek Kumar Jain - Director

c. Mr. Siddharth Jain - Director

d. Mr. Deepak Asher - Director

e. Mr. Amit Jatia - Director

f. Ms. Girija Balakrishnan - Director

g. Mr. Haigreve Khaitan - Director

h. Mr. Kishore Biyani - Director

i. Mr. Alok Tandon - Chief Executive Officer

Enterprises over which a KMP, or his relative, has significant influence

a. INOX India Private Limited

b. INOX FMCG Private Limited

Details of transactions between the Company and related parties are disclosed below.

During the year, Company entered into the following trading transactions with related parties:

a. Sales of movie tickets, F&B and Advertising services and purchases are made at the arms length price.

b. The amounts outstanding are unsecured and will be settled in cash. No expense has been recognised in the current or previous year for bad or doubtful receivables in respect of the amounts owed by related parties.

c. The Company has been provided Inter corporate deposits at rates comparable to the average commercial rate of interest. These loans are unsecured.

The remuneration of directors and key executives is determined by the Remuneration Committee having regard to the performance of individuals and market trends. As the liabilities for the defined benefit plans and other long term benefits are provided on actuarial basis for the Company as a whole, the amount pertaining to KMP are not included above. Contribution to Provident Fund (defined contribution plan) is Rs.5.56 lakhs (previous year Rs.5.28 lakhs) included in the amount of remuneration reported above.

12. Operating lease arrangements The Company as a lessee

a) Leasing arrangements

The Company is operating some of the multiplexes under operating lease/ business conducting arrangement. These arrangements are for an initial period of 3-25 years with a minimum lock-in period of 3-13 years and the agreements provide for escalation after pre-determined periods. The Company does not have an option to purchase the leased premises at the expiry of the lease periods.

b) Interest in land taken on lease and classified as operating lease:

The leasehold land are taken for the period of 20 to 57 years. The entire lease premium is already paid and future rentals are nominal. Amortisation of such lease payments is included in ‘Rent and Common Facility Charges’ in Statement of Profit and Loss and the balance remaining amount to be amortised is included in Balance Sheet as Prepayments Leasehold land .

c) Other leasing arrangements

In respect of operating leases for office premises/godowns: The arrangements range between 11 months to 36 months and are cancellable. Lease payments of Rs.23.31 Lakh (previous year Rs.101.58 Lakh) are included in ‘Rent and Common Facility Charges’ in Note 35 to the Statement of Profit and Loss.

In respect of above matters, no additional provision is considered necessary as the Company expects favourable outcome. Further, it is not possible for the Company to estimate the timing and amount of the further cash outflow, if any, in respect of these matters.

13. In respect of Entertainment-tax exemption claimed and its treatment in these accounts

The Entertainment tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final orders yet to be received from respective authorities. Accordingly, the company has recognized Rs.160.55 Lakhs during the year ended 31 March 2018 (previous year Rs.880.00 lakh) being Entertainment Tax exemption in respect of such Multiplexes. Cumulative amount as on 31 March 2018 is Rs.4,075.77 lakhs (previous year Rs.5,206.27 lakhs).

14. Disclosure required under section 186(4) of the Companies Act, 2013

The Company has given a counter guarantee of Rs.1,643.18 Lakh (previous year Rs.1,643.18 Lakh) in respect of bank guarantee taken by its subsidiary, Shouri Properties Private Limited. This bank guarantee is towards entertainment tax exemption availed by the subsidiary. The Company has a leasing arrangement with this subsidiary to operate a multiplex from the said location.


Mar 31, 2017

1. Critical accounting judgments and use of estimates

In application of Company''s accounting policies, which are described in Note 3, the directors of the Company are required to make judgments, estimations and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of revision or future periods if the revision affects both current and future periods.

5.1 Following are the critical judgments that have the most significant effects on the amounts recognized in these financial statement:

a) In respect of Government Grants

Some of the multiplexes operated by the Company are entitled to exemption from payment of entertainment tax in terms of the schemes notified by the respective State Governments, whose primary condition is that the Company should establish and operate multiplexes in specified areas. Therefore, in terms of Ind AS 20 Accounting for Government Grants, these grants are classified as grants related to assets of such multiplexes. Accordingly, the Company presents the same in the balance sheet by setting up the grant as deferred income and is recognized in profit or loss as other operating revenue on a systematic basis over the useful lives of the related assets.

b) In respect of assets taken on operating lease

The Company has taken most of the properties on operating lease from where the multiplexes and cinema theatres are being operated. The lease terms provide for periodic increase in the amount of lease payments. Considering the terms of the agreements and the rate of increase in lease payments, it is assessed that the payment to lessors are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases. Accordingly, the Company recognizes the lease payments as expenses as per the respective terms of the leases in such cases.

c) Leasehold land

In respect of leasehold lands, considering the terms and conditions of the leases, particularly the transfer of the significant risks and rewards, it is concluded that they are in the nature of operating leases.

d) Impairment of property, plant and equipment:

For the purpose of impairment testing of property, plant and equipment, each multiplex / cinema theatre is identified as a Cash-Generating Unit (CGU) being the smallest identifiable Company of assets that generates cash inflows that are largely independent of the cash inflows from other assets or Company of assets.

Further, it is not possible to measure fair value less cost of disposal of a CGU (viz. a multiplex or a cinema theatre) because there is no basis for making a reliable estimate of the price at which an orderly transaction to sell the asset would take place between the market participant at the measurement date in case of such operating CGUs. Hence the asset''s value in use is used as recoverable amount of such CGUs in determining the extent of impairment loss, if any.

5.2 Following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

a) Impairment of goodwill:

Determining whether goodwill is impaired requires an estimation of the value in use of the Cash-Generating Units (CGU) to which goodwill has been allocated. The value in use calculation requires the directors of the Company to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise.

The carrying amount of goodwill as at 31 March 2017 was Rs, 1,750 lakhs (as at 31 March 2016: Rs, 1,750 lakhs and as at 1 April 2015: Rs, Nil) Details of impairment calculations are set out in Note 7.

b) Useful lives of Property, Plant & Equipment (PPE):

The Company has adopted useful lives of PPE as described in Note 3.13 above. The Company reviews the estimated useful lives of PPE at the end of each reporting period.

c) Fair value measurements and valuation processes

Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes.

In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company generally engages third party qualified valuers to perform the valuation. The Chief Executive Officer and Chief Financial Officer of the Company work closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. The Chief Financial Officer reports the findings to the board of directors of the Company.

Information about the valuation techniques and inputs used in determining the fair values of various assets and liabilities are disclosed in Note 42.

d) Other assumptions and estimation uncertainties, included in respective notes are as under:

- Recognition of deferred tax assets, availability of future taxable profits against which

tax losses carried forward can be used, possibility of utilizing available tax credits - refer Note 13

- Measurement of defined benefit obligations and other long-term employee benefits: key actuarial assumptions - refer Note 41

- Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources - refer Note 25 and Note 47

- Impairment of financial assets - refer Note 42

(ii) Leasehold improvements, plant and equipment, Office equipment and Furniture and fixtures with carrying amount of Rs, 28,815.51 Lakhs (as at 31 March 2016: Rs, 20,020.83 Lakhs and as at 1 April 2015: Rs 12,952.52 Lakhs)) have been hypothecated to secure loans from banks (refer note 23 and 27). Details of the same are as under. The Company is not allowed to pledge these assets as security for other borrowings.

(iii) Plant and equipment, Office equipment and Furniture and fixtures with carrying amount of Rs, 7,973.98 lakhs (as at 31 March 2016: Rs, Nil and as at 1 April 2015: Rs Nil) have been hypothecated to secure bank guarantee facility from bank. Details of the same are as under. The Company is not allowed to pledge these assets as security for other borrowings.

(iv) During the year, the Company has carried out review for impairment testing and the review led to the recognition of impairment loss of Rs, 88.46 lakhs due to lower than expected performances in respect of two multiplex theatres. This impairment loss is recognized in the Statement of Profit and Loss. The recoverable amount of the relevant assets has been determined on the basis of their value in use which amounts to Rs, 218 lakhs at 31 March 2017. It is not possible to measure fair value, less cost of disposal, of a multiplex theatre and hence the value in use is used as recoverable amount. The discount rate used in measuring the value in use was 12% per annum. No impairment loss was recognized in 2015-16 as there was no indication of impairment.

Capital work in progress includes amount of Rs, 3,362.53 lakhs (as at 31 March 2016: Rs, 970.77 lakhs and as at 1 April 2015: Rs, 691.08 lakhs) in respect of multiplex premises under construction which have been hypothecated to secure loans from banks (refer note 23 and 27). The Company is not allowed to hypothecate these assets as security for other borrowings.

(i) During the year, the Company carried out a review of the recoverable amount of the Investment in Subsidiary. The review led to recognition of an impairment loss of Rs, 40.88 lakhs which has been recognized in the statement of Profit or Loss. The Company also estimated the fair value less costs of disposal of the assets which is based on the recent market prices of the assets with similar age and obsolescence. The fair value less costs of disposal is less than the value in use and hence the recoverable amount of the relevant assets has been determined on the basis of their value in use, which amount to Rs, 99.00 lakhs at 31 March 2017. The discount rate used in measuring the value in use was 12% per annum. No impairment assessment was performed in F.Y 2015-16 as there was no indication of impairment.

(i) Investment in National Savings Certificate(NSC) carries interest in the range of 8.16% to 8.78% p.a as per the issue series invested. Interest is compounded on yearly basis and payable on maturity. These NSC''s are pledged with Government authorities and held in the name of directors/ex-director/employees.

(ii) The surplus funds of the Company are invested in liquid mutual funds, return on the same are based on performance of the fund.

The shareholders of the Company have passed a resolution at the Annual General Meeting held on 23 August 2013 amending the Articles of Association of the Company entitling Gujarat Fluorochemicals Limited (GFL) to appoint majority of directors on the Board of the Company if GFL holds not less than 40% of the paid-up equity capital of the Company. Accordingly, GFL is having control over the Company and hence the Company is a subsidiary of GFL.

(v) Shares reserved for issue under option

For details of equity shares reserved for issue under the employees stock option (ESOP) plan of the Company, refer note 43.

(vi) Shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

During the year ended 31 March 2014, 34,562,206 equity shares of ''10 each, fully paid-up, were issued to the shareholders of erstwhile Fame India Limited pursuant to the Scheme of Amalgamation. This includes equity shares alloted to INOX Benefit Trust (refer Note 22).

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

The above reserve relates to share option granted by the Company to its employees/employees of the holding company under the employee share option plan. Further information about share based payment to employees is set out in Note 43. Movement during the year is on account of share options granted during the year.

The amount that can be distributed by the Company as dividends to its equity shareholders is determined after considering the requirements of the Companies Act, 2013 and subject to levy of dividend distribution tax, if any. Thus, the amounts reported above are not distributable in entirety.

2. Treasury shares

Pursuant to the Composite Scheme of Amalgamation of Company''s subsidiary Fame India Limited ("Fame") and subsidiaries of Fame with the Company, which was operative from 1 April 2012, the Company had allotted fully paid-up 34,562,206 equity shares of '' 10 each to the shareholders of the transferor companies on 10 July 2013, including fully paid-up 24,431,570 equity shares of '' 10 each to INOX Benefit Trust ("Trust") towards shares held by Company in Fame. These shares are held by the Trust exclusively for the benefit of the Company.

The Company ''s interest in the Trust, being akin to Treasury Shares, in accordance with their substance and economic reality, is deducted from Total Equity. Any profit or loss arising from sale of Treasury Shares by the Trust will be recorded separately as ''Reserve on sale of Treasury Shares'' in other equity, being transactions relating to the capital of the Company.

The above treasury shares are excluded while computing the Earnings Per Share.

The weighted average effective interest rate on these loans is 8.93% per annum (as at 31 March 2016: 9.50% per annum). Securities and terms of repayment are as under:

(ii) Securities provided for secured loans Axis Bank Ltd

Term loans from Axis Bank are secured by mortgage of immovable property situated at Vadodara and Anand and first exclusive charge on all movable fixed assets of the new multiplexes/property financed by the said term loans and escrow of entire cash flows relating to such multiplexes.

HDFC Bank Ltd

Term loan from HDFC Bank is secured by mortgage of mortgage of immovable property situated at Mumbai and first exclusive charge on all movable fixed assets of the new multiplexes/property financed by the said term loan.

The Hongkong and Shanghai Banking Corporation Limited

Term loans from The Hongkong and Shanghai Banking Corporation Limited are secured by paripasu charge on mortage of immovable property situated at Vadodra and first exclusive charge on all movable fixed assets and current assets of the new multiplexes/property financed by the said term loans.

(iii) The inter-corporate deposits are repayable in 6 to 8 years from the date of respective deposits and carry interest @10%. The earliest repayment is due on June 2020.

(iv) There is no default on repayment of principal or payment of interest on borrowings.

Note: The shares of the Company held by Inox Benefit Trust (refer note 22) are excluded while computing the weighted average number of shares.

3. Employee benefits

A. Defined contribution plans

The Company contributes to the government managed provident and pension fund for all qualifying employees. During the year contribution to Provident and pension Fund of Rs, 475.31 Lakhs (previous year Rs, 409.28 Lakh) is recognized as an expense and included in ''Contribution to Provident & Other Funds'' in the Statement of Profit and Loss and Rs, 26.21 Lakh (previous year Rs, 19.67 Lakhs) is included in preoperative expenses.

B. Defined benefit plan

The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the Payment of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefit. The level of benefits provided depends on the employee''s length of service and salary at retirement age. The Company''s defined benefit plan is unfunded. There are no other post retirement benefits provided by the Company.

The most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31 March 2017 by Mr. G. N. Agarwal, Fellow of the Institute of the Actuaries of India. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.

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

These plans typically expose the Company to actuarial risks such as interest rate risk and salary risk.

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, any variation in the expected rate of salary increase of the plan participants will change the plan liability.

Sensitivity Analysis

Significant actuarial assumptions for the determination of defined obligation are discount rate, expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated Furthermore, in presenting the above sensitivity analysis,

the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the defined obligation as at 31 March 2017 is 7.87 years.

C. Other long term employment benefits:

Leave benefits

The Liability towards Leave benefits( Annual and sick leave)for the year ended 31 March 2017 based on actuarial valuation carried out by using Projected accrued benefit method resulted in increase in liability by Rs,102.80 lakhs( Previous year Rs, 46.67 lakhs) which is included in the employee benefits in the Statement of Profit and Loss.

4. Financial Instruments

(i) Capital management

The company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to the stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt and total equity of the Company. The company is not subject to any externally imposed capital requirements. The Company''s Board of Directors (BOD) reviews the capital structure of the entity on annual basis. As part of this review, BOD considers the cost of capital and risk associated with each class of capital.

The carrying amount reflected above represents the Company''s maximum exposure to credit risk for such financial assets.

(iii) Financial risk management objectives

The Company''s principal financial liabilities comprise of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations including acquiring of PPE. The Company''s principal financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances derived directly from its operations. The Company also holds FVTPL investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Senior management provides assurance to the Board of directors that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Company dose not enters into any derivative instruments for trading or speculative purposes. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks: foreign currency risk, interest rate risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables and loans.

(i) Foreign Currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company''s import of materials and PPE and export of goods are not significant to cause major exposure to foreign currency variations. Exchange rate exposures are managed within approved policy parameters utilizing forward foreign currency contracts, as and when necessary.

The Company is only exposed to changes in USD. The below table demonstrates the sensitivity to a 10% increase or decrease in the USD against INR, on profit or loss and total equity, with all other variable held constant.

The sensitivity analysis is prepared to the net unhedged exposure of the Company.

(ii) Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk mainly on account of its borrowing from banks and inter corporate deposits, which have both fixed and floating interest rates. Bank overdrafts are subject to variable rate of interest. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the year was outstanding for the whole year.

(iii) Other price risks

The Group is exposed to equity price risks arising from equity investments. Equity investments in Subsidiaries and Joint Venture are held for strategic rather than trading purposes. The entity does not actively trade in these investments. The Company''s investment in mutual funds are in debt funds. Hence the Company''s exposure to equity price risk is minimal.

(b) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining security, where appropriate, as a means of mitigating the risk of financial loss from defaults. For trade receivables, the average credit period generally ranges from 60 to 90 days. Before accepting any new customer, Group uses information available in public domain and industry sources to assess the potential customer''s credit quality and defines credit limits for respective customer. Credit Limits attributed to customers are reviewed periodically. Customers who represents more than 5% of the total balance of Trade Receivable as at 31 March 2017 is Rs, 2,712.91 lakhs (as at 31 March 2016 of Rs, 1,964.91 lakhs and as at 1 April 2015 of Rs, 1,183.22 lakhs) are due from 4 major customers who are reputed parties and having long term contracts. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the receivables and the rates as given in the provision matrix. The provision matrix at the end of the year is as follows.

The Companies maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on. As at 31 March 2017, an amount of Rs,1643.18 lakhs has been recognized in the balance sheet as contingent liabilities. It is towards Counter-guarantee given for bank guarantee taken by a subsidiary company.

(c) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company''s short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Note below sets out details of additional undrawn facilities that the Company has at its disposal to further reduce liquidity risk.

The following tables detail the Companies remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The above liabilities will be met by the Company from internal accruals, realization of current and non-current financial assets (other than strategic investments). Further, the Company also has unutilized financing facilities

In the period, there were no transfers between Level 1,2 and 3.

Financial instrument measured at Amortized Cost

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statement are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different than the values that be eventually received or paid.

5. Share-based payments

Details of the employee share option plan of the Company.

The Company has a share option scheme applicable to the employees and Directors of the Company, its subsidiary companies or its holding company and any successor company thereof, as determined by the Compensation, Nomination and Remuneration Committee on its own discretion. The scheme is administered through Inox Leisure Limited - Employees Welfare Trust.

In the year ended 31 March 2006, the Company had issued 500,000 equity shares of '' 10 each at a premium of ''5 per share to Inox Leisure Limited - Employees'' Welfare Trust ("ESOP Trust") to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs, 75.00 Lakh to the ESOP Trust for subscription of these shares at the beginning of the plan.

Each share option converts into one equity share of the Company on exercise. The options are granted at an exercise price of Rs, 15 per option. The option carry neither rights to dividends nor voting rights. The options granted are required to be exercised within a period of one year from the date of vesting of the respective options.

On 5 January 2017, stock options of 20,000 shares have been granted to an employee of holding company and the vesting period for these equity settled options is between one to four years from the date of the grant. The options are exercisable within one year from the date of vesting. No options were granted during the year ended 31 March 2016.

The compensation costs of stock options granted to employees are accounted using the fair value method.

Fair value of share options granted in the year

Method used for accounting of share based payment plan:

The Company has used fair value method to account for the compensation cost of stock options granted to the employee of holding company and the compensation cost of Rs, 5.27 Lakhs (previous year Rs, Nil) is recognized in the Statement of Profit and Loss.

6. Related Party Disclosure

(i) Where Control Exists

a. Gujarat Fluorochemicals Limited - holding company

b. Inox Leasing & Finance Limited - ultimate holding company

c. Shouri Properties Private Limited - subsidiary company w.e.f. 24 November 2014

d. Inox Leasure Limited - Employees'' Welfare Trust - Controlled Trust

e. Inox Benefit Trust - Controlled Trust

(ii) Other related parties with whom there are transactions:

Fellow subsidiaries

a. Inox Wind Limited - subsidiary of Gujarat Fluorochemicals Limited Joint Venture

a. Swanston Multiplex Cinemas Private Limited

Key Management Personnel (KMP)

a. Mr. Pavan Kumar Jain - Director

b. Mr. Vivek Kumar Jain - Director

c. Mr. Siddharth Jain - Director

d. Mr. Deepak Asher - Director

e. Mr. Amit Jatia - Director

f. Ms. Girija Balkrishnan - Director

g. Mr. Haigreve Khaitan - Director

h. Mr. Kishore Biyani - Director

i. Mr. Alok Tandon - Chief Executive Officer

Enterprises over which a KMP, or his relative, has significant influence

a. Inox India Private Limited (earlier Inox India Limited)

b. Inox FMCG Private Limited

The remuneration of directors and key executives is determined by the Remuneration Committee having regard to the performance of individuals and market trends. As the liabilities for the defined benefit plans and other long term benefits are provided on actuarial basis for the Company as a whole, the amount pertaining to KMP are not included above. Contribution to Provident Fund (defined contribution plan) is included in the amount of remuneration reported above.

7. Business combinations

During the year ended 31 March 2016, the Company had purchased the rights, title and interest in the assets of a running multiplex with 9 screens. The total purchase consideration paid in cash and cash equivalents was Rs, 2,650.00 lakhs.

8. Operating lease arrangements The Company as a lessee

a) Leasing arrangements

The Company is operating some of the multiplexes under operating lease/ business conducting arrangement. These arrangements are for an initial period of 9-25 years with a minimum lock-in period of 3-10 years and the agreements provide for escalation after pre-determined periods. The Company does not have an option to purchase the leased premises at the expiry of the lease periods.

In respect of above matters, no additional provision is considered necessary as the Company expects favourable outcome. Further, it is not possible for the Company to estimate the timing and amounts of the further cash outflow, if any, in respect of these matters.

9. In respect of Entertainment-tax exemption claimed and its treatment in these accounts:

The Entertainment tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final orders yet to be received from respective authorities. Accordingly, the company has recognized Rs, 880.00 lakh during the year ended 31 March, 2017 (previous year Rs, 1,184.00 lakh) being Entertainment Tax exemption in respect of such Multiplexes. Cumulative amount as on 31 March 2017 is Rs, 5,206.27 lakhs (previous year Rs, 5,281.89 lakhs).

10. Prior period item

Reversal of sales and service income of Rs, 142.71 Lakhs, which was earlier included in ''Miscellaneous Expenses'' during the year ended 31 March 2016, is now adjusted in the opening retained earnings as at 1 April 2015 with corresponding effect in the carrying amount of trade receivables.

The effect of above on the basic and diluted EPS is Rs, 0.16 per share of Rs, 10 each.

Note:-

Payments from 9 November 2016 to 30 December 2016 includes Rs, 1080.09 lakhs disbursed under SBI Cash @ POS scheme to ease out the cash shortage during demonetization period for debit card holders.

11. Disclosure required under section 186(4) of the Companies Act, 2013

The Company has given a counter guarantee of Rs, 1,643.18 Lakhs (previous year Rs, 1,088.59 Lakhs) in respect of bank guarantee taken by its subsidiary, Shouri Properties Private Limited. This bank guarantee is towards entertainment tax exemption availed by the subsidiary. The Company has a leasing arrangement with this subsidiary and operates a multiplex from the said location.

During the year ended 31 March 2016, the Company had given an inter-corporate deposit of Rs, 100.00 Lakhs to Deepa Bagla Financial Consultants Pvt. Ltd. for general business purpose and carried interest at 11% p.a.

2. Footnotes for IGAAP to Ind AS reconciliation

a) Reclassification of leasehold land:

Under previous GAAP, all leasehold lands were classified as property, plant and equipment. Under Ind AS, leasehold land is to be recognized as an operating or a finance lease as per the definition and classification criteria under Ind AS 17. Accordingly deemed cost of the leasehold lands are reclassified from property plant and equipment and disclosed as leases prepayments under non-financial assets.

Consequent to this change, amount of Rs. 300.22 lakhs is transferred from property, plant and equipment to "pre-payments - leasehold lands" as at 31 March 2016 (Rs. 308.75 lakhs as at 1 April 2015)

The above changes do not affect total equity as at date of transition to Ind AS and as at 31 March 2016 and the profit before tax and profit for the year ended 31 March 2016.

b) Goodwill:

Under previous GAAP, goodwill acquired in a business combination was required to be amortised. Under Ind AS, goodwill is requires to be tested for impairment.

Consequent to this change, amortisation provided as per previous GAAP on the goodwill acquired during the year ended 31 March 2016, amounting to Rs.127.53 lakhs has been reversed.

The profit before tax for the year ended 31 March 2016 is increased by Rs. 127.53 lakhs on account of reversal of goodwill amortisation.

c) Non-Current Investments:

In the financial statements prepared under previous GAAP, non-current investments of the Company were measured at cost less provision for diminution (other than temporary). Under Ind AS, the Company has recognized such investments as follows:

- Government securities - at amortised cost

- Equity shares of subsidiary and joint venture company - at cost

Ind AS requires the above investments (except investments in equity shares of subsidiary and joint venture company) to be recognized at fair value or amortised cost, as applicable.

On the date of transition, there is no change in the carrying value of investments.

The above changes do not affect profit for the year ended 31 March 2016 and total equity as at date of transition to Ind AS and as at 31 March 2016.

d) Discounting of security deposits for leases:

Under the previous GAAP, interest free lease security deposits paid (that are refundable on completion of the lease term) were recorded at their transaction value. Under Ind AS, these security deposits are required to be recognized at amortised cost. Accordingly, the Company has discounted these security deposits under Ind AS. Difference between the discounted value and the transaction value of the security deposit has been recognized as ''Deferred lease rent expense''. The discounted value of the security deposits is increased over the period of lease term by recognizing the notional interest income under ''other income''. Further, the deferred lease rent expense is recognized in the Statement of Profit and Loss under ''other expense'' over the respective lease terms on a straight-line basis.

Consequent to this change, the amount of security deposits paid is decreased by Rs. 5,534.44 lakhs as at 31 March 2016 (Rs. 5,019.54 lakhs as at 1 April 2015). The amount of deferred lease rent recognized is Rs. 4,857.45 lakhs as at 31 March 2016 (Rs. 4,443.14 lakhs as at 1 April 2015). The net impact of Rs. 576.40 lakhs on the transition date is adjusted in opening retained earnings

The profit for the year ended 31 March 2016 decreased by Rs. 100.59 lakhs due to the amortization of deferred lease rent expense of Rs. 423.37 lakhs which is partially off-set by recognition of notional interest income on security deposits of Rs. 322.79 lakhs.

e) Current Investments:

In the financial statements prepared under previous GAAP, current investments of the Company were measured at lower of cost or fair value. Under Ind AS, these investments have been classified as FVTPL on the date of transition. The fair value changes are recognized in the Statement of Profit and Loss.

On the date of transition to Ind AS, the difference between the fair value of current investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in a increase in the carrying amount of these investments by Rs. 2.24 lakhs which has been recognized in retained earnings. As at 31 March 2016, the difference between the fair value of current Investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in increase in the carrying amount of these investments by Rs. 8.07 lakhs.

During the year ended 31 March 2016, net gain amounting to Rs. 5.77 lakhs on such fair valuation is recognized in the Statement of Profit and Loss as other income.

f) Expected credit losses:

Under previous GAAP, the Company used to create provision for impairment of receivables only in respect of specific amount for doubtful receivables. Under Ind AS, additional impairment allowance has been determined based on Expected Credit Loss model (ECL).

Consequent to this change, on the date of transition to Ind AS, allowance for ECL of Rs. 168.91 lakhs is recognized with corresponding reduction in the retained earnings. The amount of allowance for ECL recognized as at 31 March 2016 is Rs. 190.30 lakhs.

The profit before tax for the year ended 31 March 2016 is decreased by Rs. 21.39 lakhs on account of allowance for ECL.

g) Government Grants:

Some of the multiplexes operated by the Company are entitled to exemption from payment of entertainment tax in terms of the schemes notified by the respective State Governments, whose primary condition is that the Company should establish and operate multiplexes in specified areas .Under Ind AS, such government grants are initially recognized as deferred income in the balance sheet and is subsequently recognized in profit or loss as other operating revenue on a systematic and rational basis over the useful lives of the related assets.

Consequent to this change, on the date of transition to Ind AS, an amount of Rs. 9962.58 lakhs is recognized as deferred revenue in the balance sheet and is adjusted in the opening retained earnings.

The corresponding amount as at 31 March 2016 is Rs. 9,771.05 lakhs.

The profit for the year ended 31 March 2016 increased by Rs. 191.53 lakhs due to the transfer of deferred revenue to other operating revenue of Rs. 1,596.10 lakhs which is partially off-set by transfer of Rs. 1,404.57 lakhs to deferred revenue on account of entertainment tax exemption availed during the year.

h) Other adjustments:

- Prior period items

Reversal of sales and service income of Rs. 142.71 Lakhs, which was earlier included in ''Miscellaneous Expenses'' during the year ended 31 March 2016, is now adjusted in the opening retained earnings as at 1 April 2015 with corresponding effect in the carrying amount of trade receivables.

- Inventory valuation

Due to change in policy for valuation of inventories from FIFO basis to weighted average cost basis w.e.f. 1 April 2015, the value of inventory on the date of transition is decreased by Rs. 5.57 lakhs with corresponding adjustment in opening retained earnings. As at 31 March 2016, the value of inventories is increased by 2.40 lakhs and the profit before tax for the year ended 31 March 2016 increased by Rs. 7.97 lakhs.

i) Deferred tax:

In the financial statements prepared under previous GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/liability on timing differences between taxable profit and accounting profit. Under Ind AS, deferred tax is accounted as per the Balance Sheet approach which requires creation of deferred tax asset/liability on temporary differences between the carrying amount of an asset/liability in the Balance Sheet and its corresponding tax base.

The application of Ind AS has resulted in recognition of deferred tax on new temporary differences which were not required to be recognized under previous GAAP. In addition, the transitional adjustments as described in the preceding paragraphs have also led to temporary differences and creation of deferred tax thereon.

This has resulted in creation of net deferred tax assets of Rs. 3654.79 lakhs as at date of transition to Ind AS with a corresponding increase in retained earnings and reduction in the amount of deferred tax liabilities in the Balance Sheet.

For the year ended 31 March 2016, it has resulted in decrease in deferred tax expense by Rs. 27.37 lakhs in the Statement of Profit and Loss and recognition of deferred tax benefit of Rs. 8.67 lakhs in OCI.

j) Remeasurement of defined benefit plan

In the financial statements prepared under previous GAAP, remeasurement of defined benefit plans and assets (gratuity), arising due to change in actuarial assumptions was recognized as employee benefits expense in the Statement of Profit and Loss. Under Ind AS, such remeasurement benefits relating to defined benefit plans and assets is recognized in OCI as per the requirements of Ind AS 19- Employee benefits. Consequently, the related tax effect of the same has also been recognized in OCI.

For the year ended 31 March 2016, remeasurement of gratuity liability resulted in a net expense of Rs. 25.06 lakhs which has now been removed from employee benefits expense in the Statement of Profit and Loss and recognized separately in OCI.

The above changes do not affect total equity as at date of transition to Ind AS and as at 31 March 2016.

k) Other Comprehensive income:

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other Comprehensive income. This change does not affect total equity as at date of transition to Ind AS and as at 31 March 2016.


Mar 31, 2016

b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of ''10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, in proportion to their shareholding.

b) Term loans from HDFC Bank amounting to Rs.4,000.00 Lakh (previous year Rs.Nil) carry interest @ bank base rate which presently is 9.30% and is secured by mortgage of immovable property situated at Mumbai and first exclusive charge on all movable fixed assets of the new multiplexes/property financed by the said term loan. The loan is repayable in 16 equal quarterly installments beginning from 30th June, 2017.

a) Bank overdraft is secured against first charge on the entire current assets of the Company, both present and future; and extension of first charge by way of mortgage of property at Vadodara and Anand, Gujarat.

b) The Company had raised short term funds by issue of Commercial Papers (CP). Discount on CP varied between 7.55% to 8.05% and maximum balance outstanding during the year was Rs.3,000 Lakh (previous year Rs.32,000 Lakh).

1. ACQUISITION OF SATYAM CINEPLEXES LIMITED AND ITS AMALGAMATION WITH COMPANY

a. During the previous year, the Company had acquired 100% of the equity shares in Satyam Cineplexes Limited (“SCL”) and consequently SCL had become a wholly owned subsidiary of the Company with effect from 8th August, 2014. During the current year, pursuant to the Scheme of Amalgamation (“the Scheme”) under Section 391 to 394 of the Companies Act 1956, sanctioned by the Hon''ble High Court of Delhi vide order dated 10th February 2016, SCL has been amalgamated with the Company with effect from 8th August, 2014 (“the Appointed Date”). The Scheme has become effective on 23rd March 2016 viz. the date on which the certified copy of the order of the Delhi High Court sanctioning the Scheme is filed with the Registrar of Companies, Gujarat and Registrar of Companies, Delhi. The Scheme has accordingly been given effect to in the accounts. Accordingly, all the movable and immovable properties including plant and machinery, equipments, furniture, fixtures, vehicles, stocks and inventory, leasehold assets and other properties, etc. and all the debts, liabilities, duties and obligations including contingent liabilities of SCL are vested in the Company retrospectively with effect from 8th August, 2014. Since SCL was a wholly owned subsidiary of the Company, no shares were issued on its amalgamation with the Company.

b. Nature of business of the amalgamating company: SCL was engaged in the business of operating multiplex cinema theatres in India.

c. The amalgamation is accounted for under the “Pooling of Interest” method as prescribed in Accounting Standard (AS) 14 ‘Accounting for Amalgamation'', as notified under Section 133 of the Companies Act, 2013. Accordingly, the assets, liabilities and reserves of SCL as at 8th August, 2014 have been recorded at their existing carrying amounts and in the same form as at the date of amalgamation. The amount of share capital of SCL and investment held by the Company in SCL is adjusted against each other and as per the Scheme, the difference has been adjusted against the Amalgamation Reserve, Reserve on sale of Treasury Shares and General Reserve.

2. TREASURY SHARES

Pursuant to the Composite Scheme of Amalgamation of Company’s subsidiary Fame India Limited (“Fame”) and subsidiaries of Fame with the Company, which was operative from Ist April 2012, the Company had allotted 3,45,62,206 equity shares to the shareholders of the transferor companies on 10th July 20I3, including 2,44,3I,570 equity shares to INOX Benefit Trust (“Trust”) towards shares held by Company in Fame. These shares (“Treasury Shares”) are held by the Trust exclusively for the benefit of the Company.

In terms of Accounting Standard (AS 3I) ‘Financial Instruments’ (which is not yet mandatory), internationally generally accepted accounting practices and for more appropriate presentation of the financial statements, the Company’s interest in the Trust (at cost), being akin to Treasury Shares, in accordance with their substance and economic reality, is deducted from Shareholders’ Fund. Any profit or loss arising from sale of Treasury Shares by the Trust is being recorded separately as ‘Reserve on sale of Treasury Shares’ under Reserves and Surplus, being transactions relating to the capital of the Company. Accordingly, during the previous year the profit of Rs.I5,33I.27 Lakh on sale of I,55,8I,478 Treasury Shares was directly recognized in ‘Reserve on sale of Treasury Shares’ under Reserves and Surplus.

The balance equity shares 43,50,092 of the Company, held by the Trust, being Treasury Shares, are excluded while computing the Earnings Per Share.

3. ACQUISITION OF SHOURI PROPERTIES PRIVATE LIMITED

During the previous year, the Company has acquired 93.75% of the equity shares in Shouri Properties Private Limited (“SPPL”) and consequently SPPL has become a subsidiary of the Company with effect from 24 November 2014. SPPL holds a license to operate a multiplex cinema which is operated by the Company. During the current year, the Company has further subscribed to 12,50,000 equity shares of SPPL. On allotment of these shares, the Company now holds 99.29% Equity Shares of SPPL.

4. CHANGE IN THE ESTIMATE OF USEFUL LIFE OF FIXED ASSETS DURING THE YEAR ENDED 31st MARCH 2015:

During the previous year, the Company had adopted the useful lives of various fixed assets as specified in Schedule II of the Companies Act, 2013, with effect from April 1, 2014, as against the useful lives adopted earlier as per Schedule XIV to the Companies Act, 1956. The carrying amount of fixed assets, where the remaining useful life as at 1st April 2014 as per Schedule

II was Nil, aggregating to Rs.512.56 Lakh (net of deferred tax credit of Rs.264.00 Lakh), was recognized in the opening balance of retained earnings in the previous year.

5. EMPLOYEES’ STOCK OPTION PLAN

In the year ended 31st March 2006, the Company had issued 500,000 equity shares of Rs.10 each at a premium of Rs.5 per share to INOX Leisure Limited - Employees'' Welfare Trust (“ESOP Trust”) to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs.75.00 Lakh to the ESOP Trust for subscription of these shares at the beginning of the plan.

As per the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, shares allotted to the ESOP Trust but not transferred to employees is required to be reduced from Share Capital and Reserves. Out of the 500,000 equity shares allotted to the Trust, 204,999 shares have been transferred to employees. Accordingly, for the balance number of shares, the Company has reduced the Share Capital by the amount of face value of equity shares and Share Premium Account by the amount of share premium on such shares. The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share.

There are no outstanding stock options as at 31st March 2016.

The compensation costs of stock options granted to employees under the Employees'' Stock Option Plan were accounted by the Company using the intrinsic value method. In accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, the accounting value of options was amortized over the vesting period. Consequently, ‘Employee benefits expense'' in Note no. 27 includes Rs.Nil (previous year Rs.1.36 Lakh) being the amortization of employee compensation. Had the Company adopted fair value method in respect of options granted, the employee compensation cost in the previous year would have been higher by Rs.0.97 Lakh, profit before tax lower by Rs.0.97 Lakh and the basic and diluted earnings per share would have been lower by less than Re. 0.01.

6. IN RESPECT OF TAXATION MATTERS

a) The Company''s contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted by various appellate authorities and Hon''ble High Court of Judicature at Gujarat. Provision for income tax, till the year ended 31st March 2015, was made on this basis, to the extent the entertainment tax exemption is held as capital receipt for such multiplexes. The matter is presently pending before the Hon''ble Supreme Court.

b) In view of the assessment and appellate orders received by the Company, the tax liability for earlier years and the written down value of fixed assets as per the Income-tax Act, 1961 is recomputed and consequential reduction in taxation of earlier years is recognized in the Statement of Profit and Loss as under:

7. CONTINGENT LIABILITIES:

a. Claims against the Company not acknowledged as debt - Rs.7,358.26 Lakh (previous year Rs.7,235.70 Lakh), comprising of:

i. The Company had issued termination notice for one of its proposed multiplexes seeking refund of security deposit and reimbursement of the cost of fit-outs incurred by the Company, aggregating to Rs.932.44 Lakh. The party has made a counter claim of Rs.6,943.44 Lakh (previous year Rs.6,943.44 Lakh) towards rent for lock in period and other costs which is included in the amount above. At present the matter is pending before the Arbitrator and hence the amount of Rs.932.44 Lakh is carried forward as amount recoverable towards claim in ‘Other non-current assets''.

ii. In the arbitration proceedings in respect of termination notice of MOU for another proposed multiplex, the arbitrator has awarded the matter against the Company and directed the Company to pay Rs 116.36 Lakh towards rent for the lock in period, which is included in the amount above. Further, the arbitrator has also directed the Company to pay the amount of difference between the rent payable by the Company as per the MOU and the amount of actual rent received by the other party from their new tenant. The differential amount is presently not determinable. The Company has challenged the arbitration award before the Hon''ble High Court of judicature at Delhi and the same is pending.

iii. Other claims are by owners of the multiplex premises which are under negotiations with the respective parties.

b. Property Tax matters - Rs.605.08 Lakh (previous year Rs.569.72 Lakh)

The Company has disputed the quantum of property tax levied in case of one multiplex and the matter is pending before Court of Small Causes and Hon''ble High Court of judicature at Bombay. Estimated provision for the same is made by the Company - see Note no. 51.

c. Entertainment Tax matters - Rs.2,937.69 Lakh (previous year Rs.2,259.12 Lakh). This includes:

i. Demand of Rs.2,199.71 Lakh (previous year Rs.1,752.24 Lakh) in respect of some multiplexes pertaining to exemption period and the Company is contesting the matter by way of appeal before appropriate authorities.

ii. Demand of Rs.602.37 Lakh (previous year Rs.477.34 Lakh) in respect of one multiplex where the eligibility for exemption from payment of entertainment tax is rejected and the Company is contesting the matter by way of appeal before appropriate authorities.

iii. Other demands are mainly in respect of levy of entertainment tax on service charges and convenience fee collected.

d. Service Tax matters - Rs.I7,388.08 Lakh (previous year Rs.4,826.40 Lakh). This includes:

i. Amount of Rs.I5,027.63 Lakh (previous year Rs.3,234.28 Lakh) is in respect of levy of service tax on film distributors’ share paid by the Company and the matter is being contested by way of appeal/representation before the appropriate authorities.

ii. Amount of Rs.2,360.45 Lakh (previous year Rs.I,502.00 Lakh) for which the Company has received a show cause notice regarding levy of service tax on sale of food and beverages in multiplex premises the Company has filed replies to these show cause notices.

e. Stamp duty matter - Rs.263.8I Lakh (previous year Rs.263.8I Lakh)

Authority has raised the demand for non-payment of stamp duty on Leave & License Agreement in respect of one of the multiplexes, holding the same as lease transaction. Stay has been granted and the matter is pending before Board of Revenue.

f. Custom duty matter - Rs.4.36 Lakh (previous year Rs.4.36 Lakh)

The Company has received a notice in respect of custom duty payable on import of cinematographic films. The amount of duty is not quantified by the authorities and the company has filed an appeal before the Appellate Tribunal and the same is pending hearing.

g. VAT matters - Rs.26I.87 Lakh (previous year Rs.237.06 Lakh). This includes:

Demand of Rs.237.06 Lakh (previous year Rs.237.06 Lakh) pursuant to reassessment order for the year 2008-09. The Company has filed an appeal and stay is granted on payment of Rs.2 Lakh.

h. Income-tax matters - Rs.235.64 Lakh (previous year Rs.I9.48 Lakh). This includes:

Assessment dues for assessment year 20I3-I4 of Rs.2I6.I6 Lakh (previous year Rs.Nil) and penalty levied for assessment year 20I0-II of Rs.I9.48 Lakh (previous year Rs.I9.48 Lakh), which is being contested by the Company before appellate authorities.

i. The Company may be required to charge additional cost of Rs.389.83 Lakh (previous year Rs.389.83 Lakh) towards electricity from 1st June 2007 to 3Ist March 2010 pursuant to the increase in the tariff in case the appeal made with Maharashtra Electricity Regulatory Commission ‘MERC’ by the Company through the Multiplex Association of India is rejected and the case filed in the Supreme Court by one of the electricity supplier against the order of the Appellate Tribunal for Electricity, dated I9th January 2009, for change in category, in favour of the appeal made by the Multiplex Association of India is passed in favor of the electricity supplier. The Company has paid the whole amount to the respective authorities under protest (which is included in ‘Long term loans and advances’)

j. Counter-guarantee given for bank guarantee taken by a subsidiary company for Rs.I,088.59 Lakh (previous year Rs.75I.90 Lakh)

In respect of above matters, no provision is considered necessary as the Company expects favourable outcome. Further, it is not possible for the Company to estimate the timing of further cash outflows, if any, in respect of these matters.

8. IN RESPECT OF ENTERTAINMENT-TAX EXEMPTION CLAIMED BY THE COMPANY AND ITS TREATMENT IN THESE ACCOUNTS:

a. The Entertainment Tax exemption in respect of some of the multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orders yet to be received from respective authorities. Accordingly, the Company has not charged Rs.I,I84.00 Lakh to the Statement of Profit and Loss for the year ended 31st March, 2016 (previous year Rs.923.57 Lakh) being the Entertainment Tax in respect of such Multiplexes and cumulative amount as on 3Ist March, 2016 is Rs.5,28I.89 Lakh (previous year Rs.4,575.I9 Lakh).

b. In respect of two multiplexes being operated by the Company in Uttar Pradesh: In view of the revised eligibility norms notified during the previous year, these multiplexes became eligible for exemption from payment of entertainment tax, w.e.f. the date of commencement of commercial operations. Accordingly, the amount of Rs.616.74 Lakh, being entertainment tax paid in respect of these two multiplexes in earlier years, was credited to the Statement of Profit and Loss in the previous year.

9. The arbitration award in the matter of disputed recoveries pertaining to one of the multiplexes of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest of Rs.4.56 Lakh (previous year Rs.18.24 Lakh). Total amount of interest receivable upto 31st March, 2016 is Rs.170.91 Lakh (previous year Rs.166.30 Lakh). The said award has been challenged before the District Court and the matter is pending.

10. COMMITMENTS:

a. Capital commitments:

Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances -Rs.4,399.78 Lakh (previous year Rs.1,772.30 Lakh).

b. Other commitments:

The exemption from payment of Entertainment Tax in respect of multiplexes of the Company, which are eligible for such exemption, is subject to fulfillment of the terms and conditions of the respective State Government policies issued in this regard. The amount of Entertainment Tax exemption availed so far by the Company, which is liable to be paid if the relevant multiplex ceases operations prior to completing the minimum period of operations in terms of the respective policies of the States - Rs.14,293.47 Lakh (previous year Rs.14,786.01 Lakh). Out of this, an amount of Rs.1,112.67 Lakh (previous year Rs.1,012.64 Lakh) is included in para 37(c) above, being entertainment tax disputes pertaining to exemption period.

11. The Company has, in May 2015, detected a fraud perpetrated by one of its employees in respect of travel bills from travel agencies, who were otherwise booking air tickets for bona-fide travel undertaken by employees and other persons for and on behalf of the Company. A confession statement has been given by the said employee. The Company has filed a First Information Report (FIR) with the Police Station and terminated the services of the employee immediately. At present the matter is under further investigation by the Police. The estimate of amount involved, as assessed by the Company, is Rs.418.30 Lakh which has already been charged to the statement of profit and loss in respective years.

b. In respect of operating leases for office premises/godowns: The arrangements range between 11 months to 36 months and are usually renewable by mutual consent on mutually agreeable terms. Lease payments of Rs.94.97 Lakh (previous year Rs.11.27 Lakh) are included in ‘Property Rent and Conducting Fees'' in Note no. 29 to the Statement of Profit and Loss.

12. Interest in Joint Venture

The Company''s interests in Swanston Multiplex Cinemas Private Limited (‘SMCPL), is accounted for in accordance with the principles and procedures set out in Accounting Standard (AS 27) ‘Financial Reporting of Interests in Joint Ventures'' specified in the Companies (Accounting Standards) Rules, 2006.

The interest in the joint venture is reported as non-current investment (refer note no. 15) and stated at cost, less provision for diminution, other than temporary, in the value of investment. The Company has 50% ownership interest in SMCPL. The Company''s share of each of the assets, liabilities, income and expenses, etc. (each without elimination of the effect of transactions between the Company and the joint venture) related to its interests in the joint venture, based on audited financial statements is:

Company’s share of contingent liabilities in SMCPL is Rs.5.60 Lakh (previous year Rs.5.60 Lakh). The Company''s transactions with SMCPL, being related party transactions, are included in Note no. 49.

13. Segment Information

The Company operates in a single business segment viz. theatrical exhibition. All activities of the Company are in India (domestic market) and hence there are no reportable geographical segments.

14. Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs.409.28 Lakh (previous year Rs.331.47 Lakh) is recognized as an expense and included in ‘Contribution to provident and other fundsRs.in the Statement of Profit and Loss and Rs.19.58 Lakh (previous year Rs.17.35 Lakh) is included in pre-operative expenses.

15. Related Party Disclosure:

(i) Where Control Exists

a. Gujarat Fluor chemicals Limited - holding company

b. INOX Leasing & Finance Limited - ultimate holding company

c. Satyam Cineplexes Limited - subsidiary company w.e.f 8th August 20I4 and subsequently amalgamated w.e.f. 8th August 20I4 - see note no. 30

d. Shouri Properties Private Limited - subsidiary company w.e.f. 24th November 2014

(ii) Other related parties with whom there are transactions:

Fellow Subsidiary

a. INOX Wind Limited - subsidiary of Gujarat Fluor chemicals Limited Joint Venture

a. Swanston Multiplex Cinemas Private Limited Key Management Personnel (KMP)

a. Mr. Pavan Kumar Jain - Director

b. Mr. Alok Tandon - Chief Executive Officer Relatives of KMP

a. Mr. Vivek Kumar Jain - brother of Mr. Pavan Kumar Jain

b. Mr. Siddharth Jain - son of Mr. Pavan Kumar Jain

Enterprises over which a KMP or his relative, has significant influence a. INOX India Private Limited (earlier INOX India Limited)

Note: The loan was given to Satyam Cineplexes Limited (“SCL”) after it became a subsidiary on 8th August 2014. Subsequently SCL is amalgamated with the Company w.e.f. 8th August 2014 (see note no. 30)

(b) Disclosure required under section 186(4) of the Companies Act, 2013

During the previous year, the Company had given a loan of Rs.4,580.11 Lakh to Satyam Cineplexes Limited, after it became a subsidiary on 8th August 2014. Subsequently SCL is amalgamated with the Company w.e.f. 8th August 2014 (see note no. 30). The unsecured loan carried interest @ 11.50%, was repayable on demand and was given for general business purposes.

The Company has given a counter guarantee of Rs.1,088.59 Lakh (previous year Rs.751.90 Lakh) in respect of bank guarantee taken by its subsidiary, Shouri Properties Private Limited. This bank guarantee is towards entertainment tax exemption availed by the subsidiary. The Company has a leasing arrangement with this subsidiary and operates a multiplex from the said location.

During the year, the Company had given an inter-corporate deposit of Rs.100.00 Lakh to Deepa Bagla Financial Consultants Pvt. Ltd for general business purpose and carried interest at 11% p.a.

16. Corporate Social Responsibility (CSR)

(a) The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) is Rs.68.03 Lakh (previous year Rs.62.44 Lakh).

(b) Amount spent during the year on:

The above information has been disclosed in respect of parties which have been identified on the basis of the information available with the Company.

17. Prior period items included in ‘Miscellaneous expenses'': Reversal of sale of services - Rs.142.71 Lakh (previous year Rs.Nil)

18. Calculation of Earnings per share :

Note: The shares of the Company held by INOX Benefit Trust (see note no. 31), being Treasury Shares, are excluded while computing the weighted average number of shares.


Mar 31, 2015

1. CORPORATE INFORMATION

Inox Leisure Limited (the "Company") is engaged in the business of operating & managing multiplexes and cinema theatres in India. The Company is a public company and its shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India. The Company is a subsidiary of Gujarat Fluoro chemicals Limited.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, under the historical cost convention and on accrual basis. These financial statements comply in all material respects with the applicable accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

Figures for the previous year have been re-grouped / reclassified wherever necessary to confirm with the classification of the current year.

3. TREASURY SHARES

(a) Pursuant to the Composite Scheme of Amalgamation ("Scheme") of Company's subsidiary Fame India Limited ("Fame") and subsidiaries of Fame with the Company, which was operative from 1st April 2012, the Company had allotted 3,45,62,206 equity shares to the shareholders of the transferor companies on 10th July 2013, including 2,44,31,570 equity shares to Inox Benefit Trust ("Trust") towards shares held by Company in Fame. These shares ("Treasury Shares") are held by the Trust exclusively for the benefit of the Company.

In terms of Accounting Standard (AS31) 'Financial Instruments' (which is not yet mandatory), internationally generally accepted accounting practices and for more appropriate presentation of the financial statements, the Company's interest in the Trust (at cost), being akin to Treasury Shares, in accordance with their substance and economic reality, is deducted from Shareholders' Fund. Any profit or loss arising from sale of Treasury Shares by the Trust is being recorded separately as 'Reserve on sale of Treasury Shares' under Reserves and Surplus, being transactions relating to the capital of the Company. Accordingly, the profit of Rs. 14872.92 Lakh (previous year loss of Rs. 458.34 Lakh) on sale of 1,55,81,478 (previous year 45,00,000) Treasury Shares is directly recognised in 'Reserve on sale of Treasury Shares' under Reserves and Surplus.

(b) On allotment of above 3,45,62,206 equity shares of the Company, Gujarat Fluorochemicals Limited ("GFL") ceased to be the holding company on 10th July 2013. Subsequently, the shareholders of the Company have passed a resolution at the Annual General Meeting held on 23rd August 2013 amending the Articles of Association of the Company entitling GFL to appoint majority of directors on the Board of the Company if GFL holds not less than 40% of the paid-up equity capital of the Company. Accordingly, the Company has again become a subsidiary of GFL with effect from this date.

4. ACQUISITIONS DURING THE YEAR

(a) Acquisition of Satyam Cineplexes Limited and it amalgamation with Company

During the year, the Company has acquired 100% of the equity shares in Satyam Cineplexes Limited ("SCL") and consequently SCL has become a wholly owned subsidiary of the Company with effect from 8th August 2014. SCL is engaged in the business of operating & managing multiplexes in India.

At the Meeting of Board of Directors of the Company held on 25th September 2014, the Board has approved the Scheme of Amalgamation (Scheme) under Section 391 to 394 of the Companies Act, 1956 and relevant Sections of the Companies Act 2013, to the extent applicable, for amalgamation of SCL with the Company, subject to the approval of the Scheme by Stock Exchanges, Shareholders and Creditors of the respective Companies, Hon'ble High Courts of Judicature at Delhi and Gujarat, and subject to approval of any other statutory authorities as may be required. Once sanctioned, the Scheme will be effective from the appointed date i.e. 8th August 2014. Presently, the petition for approval of the Scheme is pending before the Hon'ble High Court of Judicature at Delhi. The effect to the said Scheme will be given after obtaining the necessary approvals.

(b) Acquisition of Shouri Properties Private Limited

During the year, the Company has acquired 93.75% of the equity shares in Shouri Properties Private Limited ("SPPL") and consequently SPPL has become a subsidiary of the Company with effect from 24th November 2014. SPPL holds a license to operate a multiplex cinema theatre which is operated by Inox Leisure Limited.

5. EXCEPTIONAL ITEMS:

a) The Company's joint venture Swanston Multiplex Cinemas Private Limited (SMCPL), which was running Fame Big Cinemas Multiplex at Citi Mall, Oshiwara Link Road, Andheri (West), Mumbai, has stopped operations w.e.f. 13th July 2012 as the lease agreement of the property was terminated. Estimated provision of Rs. 39.00 Lakh (in addition to provision of Rs. 250.00 Lakh made in earlier year) for diminution in the value of investment in the joint venture was made during the year ended 31st March, 2014 and was shown as an exceptional item. The investment in SMCPL included share application money of Rs. 15.00 Lakh which was refunded by SMCPL during the current year. Consequently, there is a reduction in the carrying amount of investment in SMCPL and amount of Rs. 9.48 Lakh, being the amount of surplus provision for diminution in the value of investment, is reversed and the same is included in the exceptional items.

b) During the year, the Company has given following donations aggregating to Rs. 60.00 Lakh and the same has been shown as an exceptional item:

i. Rs. 50.00 Lakh to an electoral trust

ii. Rs. 7.00 Lakh to Maharashtra Navnirman Kamgar Sena, which in the opinion of management is affiliated with Maharashtra Navnirman Sena, a political party.

iii. Rs. 3.00 Lakh to Maharashtra Samarth Kamgar Sanghatana, which in the opinion of management is afflicted with Nationalistic Congress Party, a political party.

6. CHANGE IN THE ESTIMATE OF USEFUL LIFE OF FIXED ASSETS

a) Company has adopted the useful lives of various fixed assets as specified in Schedule II of the Companies Act, 2013, with effect from April 1, 2014, as against the useful lives adopted earlier as per Schedule XIV to the Companies Act, 1956. The carrying amount of fixed assets, where the remaining useful life as at 1st April 2014 as per Schedule II is Nil, aggregating to Rs. 512.56 Lakh (net of deferred tax credit of Rs. 264.00 Lakh), is recognized in the opening balance of retained earnings. Further, the carrying amount of fixed assets as at 1st April 2014 is being depreciated over the revised remaining useful life of the assets. Consequently, depreciation charge for the year is higher by Rs. 1707.01 Lakh.

b) In accordance with Accounting Standard (AS) 22: Taxes on Income, the deferred tax liability on account of timing difference in depreciation, to the extent reversing during the tax holiday period, is not recognized. Consequent to the above change in the estimated useful life of fixed assets, such timing difference reversing during the tax holiday period is recomputed and there is increase in the deferred tax liability of Rs. 22.76 Lakh and the same is included in the amount of deferred tax credit in the Statement of Profit and Loss.

7. EMPLOYEES' STOCK OPTION PLAN

During the year ended 31st March 2006, the Company had issued 500,000 equity shares of Rs. 10 each at a premium of Rs. 5 per share to Inox Leisure Limited – Employees' Welfare Trust ("ESOP Trust") to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs. 75 Lakh to the ESOP Trust for subscription of these shares at the beginning of the plan.

As per the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, shares allotted to the ESOP Trust but not transferred to employees is required to be reduced from Share Capital and Reserves. Out of the 500,000 equity shares allotted to the ESOP Trust, 204,999 shares have been transferred to employees up to 31st March 2015. Accordingly, for the balance number of shares, the Company has reduced the Share Capital by the amount of face value of equity shares and Share Premium Account by the amount of share premium on such shares. The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share.

The vesting period for options granted under 1st & 2nd lot was between one to four years from the date of the grant. Option granted under 3rd lot is as per the terms of the Scheme of Amalgamation (referred to in Note no. 30). As per the Scheme, the stock options granted by erstwhile Fame India Limited ("Fame") to its employees automatically stood cancelled. The Company has issued stock options to the eligible employees of Fame under the existing ESOP Scheme of the Company. These stock options were granted in the ratio of 5 options (each option being equal to one share) of Company for every 8 options (each option being equal to one share) held under ESOP of Fame. All options were exercisable within one year from the date of vesting. The compensation costs of stock options granted to employees were accounted by the Company using the intrinsic value method.

In respect of the options granted under the Employees' Stock Option Plan, in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, the accounting value of options is amortized over the vesting period. Consequently, 'Employee benefits expense' in note no 27 includes Rs. 1.36 Lakh (previous year Rs. 14.33 Lakh) being the amortization of employee compensation.

Had the Company adopted fair value method in respect of options granted, the employee compensation cost would have been higher by Rs. 0.97 Lakh, profit before tax lower by Rs. 0.97 Lakh and the basic and diluted earnings per share would have been lower less than Re. 0.01 each.

8. IN RESPECT OF TAXATION MATTERS

a) The Company's contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted by various appellate authorities and also in the proceedings before the appellate authorities and Hon'ble High Court of Judicature at Gujarat. The matter is presently pending before the Hon'ble Supreme Court. Provision for current tax is made on this basis to the extent the entertainment tax exemption is held as capital receipt for such multiplexes.

b) Particulars of prior period taxation charged in the Statement of Profit and Loss

In view of the appellate orders in respect of Company's own cases and other judicial pronouncements received during the year, the tax liability for earlier years is recomputed and consequential reduction in tax liability and increase in MAT credit entitlement, aggregating to Rs. 852.51 Lakh is recognized in the statement of Profit and Loss for the year ended 31st March 2015.

9. CONTINGENT LIABILITIES:

a. Claims against the Company not acknowledged as debt – Rs. 7235.70 Lakh (previous year Rs. 7262.90 Lakh), comprising of:

i. The Company has issued termination notice for one of its proposed multiplexes seeking refund of security deposit of Rs. 60.07 Lakh and reimbursement of the cost of fit-outs of Rs. 823.27 Lakh incurred by the Company and carried forward as capital work-in-progress. The party has made a counter claim of Rs. 6943.44 Lakh towards rent for lock in period and other costs which is included in the amount above. At present the matter is pending before the Arbitrator.

ii. In the arbitration proceedings in respect of termination notice of MOU for another proposed multiplex, the arbitrator has awarded the matter against the Company and directed the Company to pay Rs. 116.36 Lakh towards rent for the lock in period, which is included in the amount above. Further, the arbitrator has also directed the Company to pay the amount of difference between the rent payable by the Company as per the MOU and the amount of actual rent received by the other party from their new tenant. The differential amount is presently not determinable. The Company has challenged the arbitration award before the Hon'ble High Court of judicature at Delhi and the same is pending.

iii. Other claims by owners of the multiplex premises which are under negotiations with the respective parties.

b. Property Tax demands – Rs. 569.72 Lakh (previous year Rs. 757.34 Lakh)

The Company has disputed the quantum of property tax levied in case of one multiplex and the matter is pending before Court of Small Causes and Hon'ble High Court of judicature at Bombay. The Company has received revised demands during the year which also is contested by the Company. Estimated provision for the same is made by the Company – see note no. 51. The amount of demand not provided for is Rs. 569.72 Lakh (previous year Rs. 741.16 Lakh)

c. Entertainment Tax demands – Rs. 2259.12 Lakh (previous year Rs. 1977.52 Lakh). This includes:

i. Demand of Rs. 1752.24 Lakh (previous year Rs. 1583.83) in respect of some multiplexes pertaining to exemption period and the Company is contesting the matter by way of appeal before appropriate authorities.

ii. Demand of Rs. 477.34 (previous year Rs. 391.47) in respect of one multiplex where the eligibility for exemption from payment of entertainment tax is rejected and the Company is contesting the matter by way of appeal before appropriate authorities.

d. Service Tax matters – Rs. 4826.40 Lakh (previous year Rs. 97.31 Lakh). This includes:

i. Amount of Rs. 3234.28 Lakh (previous year Rs. Nil) for which the Company has received notices from Commissioner ate of Service tax regarding levy of service tax on film distributor's' share paid by the Company. The Company is in the process of fling replies to these show cause notices.

ii. Amount of Rs. 1502.00 Lakh (previous year Rs. Nil) for which the Company has received a show cause notice regarding levy of service tax on sale of food and beverages in multiplex premises. The Company is in the process of fling replies to these show cause notices.

iii. Amount of Rs. 90.13 Lakh (previous year Rs. 90.13 Lakh) in respect of service tax on payment of architect fee to foreign architects by the Company and receipt of pouring and signing fee. Out of a total demand of 104.33 Lakh, the Company has already paid a sum of 14.20 Lakh and stayed the recovery of the balance demand. The Company has filed an appeal before Customs Excise and Service Tax Appellate Tribunal ("CESTAT") and the matter is pending.

e. Stamp duty demand – Rs. 263.81 Lakh (previous year Rs. 263.81 Lakh)

Authority has raised the demand for non-payment of stamp duty in respect of Leave & License Agreement in respect of one multiplex holding the same as lease transaction. Stay has been granted and the matter is pending before the Board of Revenue.

f. Custom duty demands – Rs. 4.36 Lakh (previous year Rs. 4.36 Lakh)

In addition to above, the Company has received a notice in respect of custom duty payable on import of cinematographic films. The amount of duty is not quantified by the authorities and the company has filed an appeal before the Appellate Tribunal under and the same is pending hearing.

g. VAT demand – Rs. 237.06 Lakh (previous year Rs. 135.66 Lakh). This includes,

Demand of Rs. 237.06 Lakh (previous year Rs. Nil) pursuant to reassessment order for the year 2008-09. The Company is in the process of filing0 an appeal against the said reassessment order.

h. Income-tax matters – Rs. 19.48 Lakh (previous year Rs. 11.32 Lakh).

This includes demand of Rs. 19.48 Lakh (previous year Rs. Nil) towards penalty levied for assessment year 2010-11 which is being contested by the Company before appellate authority.

i. The Company may be required to charge additional cost of Rs. 389.83 Lakh (previous year Rs. 389.83 Lakh) towards electricity from 1st June 2007 to 31st March 2010 pursuant to the increase in the tariff in case the appeal made with Maharashtra Electricity Regulatory Commission 'MERC' by the Company through the Multiplex Association of India is rejected and the case fled in the Supreme Court by one of the electricity supplier against the order of the Appellate Tribunal for Electricity, dated 19 January 2009, for change in category, in favor of the appeal made by the Multiplex Association of India is passed in favor of the electricity supplier. The Company has paid the whole amount to the respective authorities under protest (which is included in 'long term loans and advances')

j. Counter-guarantee given to bank for guarantee taken by a subsidiary company - Rs. 751.90 Lakh (previous year Rs. Nil)

In respect of above matters, no provision is considered necessary as the Company expects favourable outcome. Further, it is not possible for the Company to estimate the timing of further cash outflows, if any, in respect of these matters.

10. In respect of Entertainment-tax exemption claimed by the Company and its treatment in these accounts:

a. The Entertainment Tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orders yet to be received from respective authorities. Accordingly the amount of Rs. 923.57 Lakh (previous year Rs. 520.25 Lakh) being Entertainment Tax in respect of such Multiplexes has not been charged to the statement of profit and loss. Cumulative amount as on 31st March 2015 is Rs. 4575.19 Lakh (previous year Rs. 3909.42 Lakh).

b. In respect of the Multiplex Cinema Theatre at Vadodara, the issues in respect of the eligibility for exemption from payment of entertainment tax and the method of computing the exemption availed, have been decided in favour of the Company by the Hon'ble High Court of judicature at Gujarat vide its order dated 26th June, 2009. The matter regarding method of computation of eligibility amount is challenged by the Government Department before the Hon'ble Supreme Court. Pending receipt of final eligibility certificate the figures indicated in the (a) above include the figures pertaining to the said Multiplex.

c. In respect of two multiplexes being operated by the Company in Uttar Pradesh: In view of the revised eligibility norms notified during the year, these multiplexes have now become eligible for exemption from payment of entertainment tax, w.e.f. the date of commencement of commercial operations. Accordingly, the amount of Rs. 616.74 Lakh, being entertainment tax paid in respect of these two multiplexes in earlier years, is credited to the statement of Profit and Loss.

11. The arbitration award in the matter of disputed recoveries pertaining to one of the multiplex of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest of Rs. 18.24 Lakh (previous year Rs. 18.24 Lakh). Total amount of interest receivable upto 31st March, 2015 is Rs.166.30 Lakh (previous year Rs. 148.06 Lakh). The said award has been challenged before the District Court and the matter is pending.

12. COMMITMENTS:

a. Capital commitments:

Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances - Rs. 1772.30 Lakh (previous year Rs. 963.34 Lakh)

b. Other commitments:

The exemption from payment of Entertainment Tax in respect of multiplexes of the Company, which are eligible for such exemption, is subject to fulfilment of the terms and conditions of the respective State Government policies issued in this regard. The amount of Entertainment Tax exemption availed so far by the Company, which is liable to be paid if the relevant multiplex ceases operations prior to completing the minimum period of operations in terms of the respective policies of the States – Rs. 14786.01 Lakh (previous year Rs. 17197.99 Lakh).

13. The Company has, in May 2015, detected a fraud perpetrated by one of its employees, in respect of travel bills from travel agencies who were otherwise booking air tickets for bona-fade travel undertaken by employees and other persons for and on behalf of the Company. Following a confession statement given by the employee concerned, the Company has fled a First Information Report (FIR) with the Police Station on 5th May 2015 and terminated the services of the employee with immediate effect. At present the matter is under further investigation by the Company as well as Police. Pending completion of such investigation, it is not possible to assess the quantum of the fraud, the period thereof, as well as its impact, if any, on the accounts of the company. Necessary entries in the books of accounts in this regard will be made on completion of the investigation and after assessing the impact, if any, of the same on the accounts of the Company.

14. The Company's significant leasing arrangements are in respect of :- a. Operating leases for premises (offices and residential accommodations for employees) - Generally, these lease arrangements are non-cancellable, range between 11 months to 33 months and are usually renewable by mutual consent on mutually agreeable terms. Lease rentals of Rs. 11.27 Lakh (previous year Rs. 6.49 Lakh) are included in 'Property Rent and Conducting Fees' in note no. 29 to the Statement of Profit and Loss.

b. The Company is operating some of the multiplexes under Operating Lease / Business Conducting Arrangement. These arrangements are for a period of 9-25 years with a minimum lock-in period of 3-10 years and the agreement provides for escalation in rentals after pre-determined periods. Property Rent and Conducting Fees of Rs. 12379.39 Lakh (previous year Rs. 10761.54 Lakh) are included in 'Property Rent and Conducting Fees' in note no. 29 to the Statement of Profit and Loss.

15. Segment Information

The Company operates in a single business segment viz. theatrical exhibition. All activities of the Company are in India and hence there are no geographical segments.

16. Interest in joint ventures

The Company's interests in Swanston Multiplex Cinemas Private Limited ('SMCPL'), is accounted for in accordance with the principles and procedures set out in AS – 27, Financial Reporting of Interests in Joint Ventures specified in the Companies (Accounting Standards) Rules, 2006.

The interest in the joint venture is reported as non-current investment (refer note 15) and stated at cost, less provision for diminution, other than temporary, in the value of investment. The Company has 50% ownership interest in SMCPL. The Company's share of each of the assets, liabilities, income and expenses, etc. (each without elimination of the effect of transactions between the Company and the joint venture) related to its interests in the joint ventures, based on audited financial statements is as under:

Company's share of contingent liabilities in SMCPL – Rs. 5.60 Lakh (previous year Rs. 5.60 Lakh). There are no capital commitments by SMCPL.

The Company's transactions with SMCPL, being related party transactions, are included in note no. 49.

17. Related Party Disclosure:

(i) Where Control Exists

a. Gujarat Fluorochemicals Limited – Holding Company – also see note no. 30(b)

b. Inox Leasing & Finance Limited – Ultimate Holding Company

c. Satyam Cineplexes Limited – Subsidiary Company (w.e.f 8th August, 2014)

d. Shouri Properties Private Limited – Subsidiary Company (w.e.f 24th November,2014)

(ii) Other related parties with whom there are transactions: Fellow Subsidiaries a. Inox Wind Limited – subsidiary of Gujarat Fluorochemicals Limited

Joint Venture

a. Swanston Multiplex Cinemas Private Limited

Key Management Personnel (KMP)

a. Mr. Pavan Kumar Jain – Director

b. Mr. Alok Tandon - Manager

c. Mr. Rajeev Patni – Manager of Erstwhile Fame India Ltd upto 25th May, 2013

Relatives of KMP

a. Mr. Vivek Kumar Jain – brother of Mr. Pavan Kumar Jain

b. Mr. Siddharth Jain – son of Mr. Pavan Kumar Jain

Enterprises over which KMP, or his relative, has significant influence

a. Inox India Ltd

18. Legal and professional fees paid include Rs. 130.30 Lakh (previous year Rs. 63.59 Lakh) paid to firms/LLPs in which one of the directors is a partner and Rs. 30.00 Lakh (previous year Rs. Nil) paid to a director.

19. Corporate Social Responsibility (CSR)

(a) The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) is Rs. 62.44 Lakh.

(b) Amount spent during the year on:


Mar 31, 2014

1 Contingent Liabilities:

a. Claims against the Company not acknowledged as debt – Rs. 7063.95 lacs (previous year Rs. 7099.33 lacs)

b. Property Tax demands – Rs. 757.34 lacs (previous year Rs. 621.28 lacs)

c. Entertainment Tax demands – Rs. 1586.05 lacs (previous year Rs. 1043.05 lacs). This includes demand of Rs. 1583.83 lacs (previous year Rs. 1040.83 lacs) in respect of two multiplexes pertaining to exemption period and for which the Company is contesting the matter by way of appeal before appropriate authorities.

d. Service Tax demand – Rs. 97.31 lacs (previous year Rs. 97.31 lacs)

e. Stamp duty demand – Rs. 263.81 lacs (previous year Rs. 263.81 lacs)

f. Custom duty demands – Rs. 4.36 lacs (previous year Rs. 4.36 lacs)

The Company has also received a show cause cum demand notice dated 5th December 2005 for custom duty payable by them on import of cinematographic films under Rule 2(2), Rule 7(A) and Rule 9(2) of the Customs Valuation Rule 1988. Nothing has been deposited with the authorities as the amount is not quantified by the authorities. However, on 28th September 2006, the Company has filed an appeal against the Commissioner''s Order to the Appellate Tribunal under Section 129-A of The Customs Act, 1962 and the same is pending hearing.

g. VAT demand – Rs. 135.66 lacs (previous year Nil)

h. TDS matte under Income-tax Act – Rs. 11.32 lacs (previous year Rs. 11.32 lacs)

i. In respect of termination of proposed multiplexes:

The Company has issued termination notice for one of its proposed multiplexes seeking refund of security deposit of Rs. 60.07 lacs and reimbuement of the cost of fit-outs of Rs. 823.27 lacs incurred by the Company and carried forward as capital work-in-progress. The party has made a counter claim of Rs. 6943.44 lacs towards rent for lock in period and other costs which is included in (a) above. At present the matter is pending before the Arbitrator.

In the arbitration proceedings in respect of termination notice of MOU for another proposed multiplex, the arbitrator has awarded the matter against the Company and directed the Company to pay Rs. 116.36 Lacs towards rent for the lock in period. Further, the arbitrator has also directed the Company to pay the amount of difference between the rent payable by the Company as per the MOU and the amount of actual rent received by the other party from their new tenant. The differential amount is presently not determinable. The Company has challenged the arbitration award before the Hon''ble High Court of Delhi and the same is pending.

j. The Company may be required to charge additional cost of Rs. 389.83 lacs (previous year Rs. 389.83 lacs) towards electricity from 1st June, 2007 to 31st March, 2010 puuant to the increase in the tariff in case the appeal made with Maharashtra Electricity Regulatory Commission ''MERC'' by the Company through the Multiplex Association of India is rejected and the case filed in the Supreme Court by one of the electricity supplier against the order of the Appellate Tribunal for Electricity, dated 19th January 2009, for change in category, in favor of the appeal made by the Multiplex Association of India is passed in favor of the electricity supplier. The Company has paid the whole amount to the respective authorities under protest (which is included in ''long term loans and advances'')

2 In respect of Entertainment Tax liability of the Company and its treatment in these accounts: -

a. The Entertainment Tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orde yet to be received from respective authorities. Accordingly the amount of Rs. 520.25 lacs (previous year Rs. 382.07 lacs) being Entertainment Tax in respect of such Multiplexes has not been charged to the statement of profit and loss. Cumulative amount as on 31st March, 2014 is Rs. 3909.42 lacs (previous year Rs. 3389.17 lacs).

b. In respect of the Multiplex Cinema Theatre at Vadodara, the issues in respect of the eligibility for exemption from payment of entertainment tax and the method of computing the exemption availed, have been decided in favour of the Company by the Honourable High Court of judicature at Gujarat vide its order dated 26th June, 2009. The matter regarding method of computation of eligibility amount is challenged by the Government Department before the Honourable Supreme Court. Pending receipt of final eligibility certificate the figures indicated in the (a) above include the figures pertaining to the said Multiplex.

c. In respect of Multiplex Cinema Theatre at Raipur, the application for refund entertainment tax of Rs. 92.06 lacs for exemption period 2010-11 for has been rejected. Applications for such refunds for subsequent periods amounting to Rs. 299.41 lacs are also pending before appropriate authority. The matter has been challenged in the High Court of Chhatisgarh at Bilaspur. Pending the decision of the High Court, total amount of entertainment tax of Rs. 391.47 lacs (previous year Rs. 285.25 lacs) paid is carried forward as Entertainment Tax Refund Claimed under Schedule 16 – Long Term Loans and Advances and the figures indicated in the (a) above include the figures pertaining to the said Multiplex.

3 The arbitration award in the matter of disputed recoveries pertaining to one of the multiplex of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest of Rs. 18.24 lacs (previous year Rs. 18.24 lacs). Total amount of interest receivable upto 31st March, 2014 is Rs.148.06 lacs (previous year Rs. 129.82 lacs). The said award has been challenged before the District Court and the matter is pending.

4 Commitments:

a. Capital commitments:

Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances - Rs. 963.34 lacs (previous year Rs. 1822.77 lacs).

b. Other commitments:

The exemption from payment of Entertainment Tax in respect of multiplexes of the Company, which are eligible for such exemption, is subject to fulfillment of the terms and conditions of the respective State Government policies issued in this regard. The amount of Entertainment Tax exemption availed so far by the Company, which is liable to be paid if the relevant multiplex ceases operations prior to completing the minimum period of operations in terms of the respective policies of the States – Rs. 17197.99 lacs (previous year Rs. 15730.92 lacs).

5 The Company''s significant leasing arrangements are in respect of :- a. Operating leases for premises (offices and residential accommodations for employees) - Generally, these lease arrangements are non-cancelable, range between 11 months to 33 months and are usually renewable by mutual consent on mutually agreeable terms. Lease rentals of Rs. 6.49 lacs (previous year Rs. 3.26 lacs) are included in ''Property Rent and Conducting Fees'' in note no. 29 to the Statement of Profit and Loss.

b. The Company is operating some of the multiplexes under Operating Lease / Business Conducting Arrangement. These arrangements are for a period of 9-25 yea with a minimum lock-in period of 3-10 yea and the agreement provides for escalation in rentals after pre-determined periods. Property Rent and Conducting Fees of Rs. 10761.54 lacs (previous year Rs. 9263.36 lacs) are included in ''Property Rent and Conducting Fees'' in note no. 29 to the Statement of Profit and Loss.

The future minimum lease / conducting fees payments under these arrangements are as under:

6 Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs. 282.12 lacs (Previous year Rs. 247.79 lacs) is recognized as an expense and included in ''Contribution to Provident & Other Funds'' in the Statement of Profit and Loss and Rs. 16.06 lacs (previous year Rs. 16.52 lacs) is included in pre-operative expenses.

b) Defined Benefit Plans: The amounts recognized in respect of Gratuity and Leave Encashment – as per Actuarial valuation

The above defined benefit plans are unfunded. The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant facto such as supply and demand in the employment market.

7 Segment Information

The Company operates in a single business segment viz. theatrical exhibition. All activities of the Company are in India and hence there are no geographical segments.

8 Interest in joint ventures

The Company''s interests in Swanston Multiplex Cinemas Private Limited (''SMCPL''), acquired on amalgamation of etwhile Fame India Limited (refer to note no. 30), is accounted for in accordance with the principles and procedures set out in AS – 27, Financial Reporting of Interests in Joint Ventures specified in the Companies (Accounting Standards) Rules, 2006.

The interest in the joint venture is reported as non-current investment (refer note 15) and stated at cost, less provision for diminution, other than temporary, in the value of investment. The Company''s share of each of the assets, liabilities, income and expenses, etc. (each without elimination of the effect of transactions between the Company and the joint venture) related to its interests in the joint ventures, based on audited financial statements is:

Company''s share of contingent liabilities in SMCPL – Rs. 5.60 lacs (previous year Rs. 5.60 lacs) The Company''s transactions with SMCPL, being related party transactions, are included in note no. 47 47 Related Party Disclosure: (i) Where Control Exists

a. Gujarat Fluorochemicals Limited – Holding Company

b. Inox Leasing & Finance Limited – Ultimate Holding Company (ii) Other related parties with whom there are transactions:

Fellow Subsidiaries

a. Inox Motion Pictures Limited

b. Inox Wind Limited Key Management Peonnel (KMP)

a. Mr. Pavan Kumar Jain – Director

b. Mr. Alok Tandon - Manager

c. Mr. Rajeev Patni – Manager of Etwhile Fame India Ltd upto 25th May, 2013 Joint Venture

a. Swanston Multiplex Cinemas Private Limited Enterprises over which KMP, or his relative, has significant influence

a. Devansh Trading and Finance Private Limited

b. Sidhapavan Trading and Finance Private Limited

c. Inox India Ltd

Note: The shares of the Company held by Inox Benefit Trust (see note no. 30) are excluded while computing the weighted average number of shares.


Mar 31, 2013

1. CORPORATE INFORMATION

Inox Leisure Limited (the "Company") is engaged in the business of operating & managing multiplexes and cinema theatres in India. The Company is a public company and its shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India. The Company is a subsidiary of Gujarat Fluorochemicals Limited.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, under the historical cost convention and on accrual basis. These financial statements comply in all material respects with the applicable Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

Figures for the previous year have been re-grouped wherever necessary to confirm with the classification of the current year. In view of amalgamation during the year, figures of the previous year are not directly comparable with that of the current year.

3. Composite Scheme of Amalgamation of subsidiary of the Company - Fame India Limited, and subsidiaries of Fame India Limited - Fame Motion Pictures Limited, Big Pictures Hospitality Services Private Limited and Headstrong Films Private Limited with the Company

a. Pursuant to the Composite Scheme of Amalgamation ("the Scheme") under Section 391 to 394 read with Section 78, 100-104 of the Companies Act 1956, sanctioned by the Hon''ble High Courts of Judicature at Gujarat and Bombay vide their orders dated 12 March 2013 (read with order dated 20 March 2013) and 10 May, 2013 , respectively, Fame India Limited (FAME), Fame Motion Pictures Limited (FMPL), Big Pictures Hospitality Services Private Limited (BPHSPL) and Headstrong Films Private Limited (HFPL) (hereinafter collectively referred as "Transferor Companies") were merged with the Company. The Scheme has become effective on 25 May 2013 viz. the date on which the last of the certified copy of the order of the Bombay High Court and the High Court of Gujarat sanctioning the Scheme is filed with the Registrar of Companies, Maharashtra at Mumbai and Registrar of Companies, Gujarat at Ahmedabad. Accordingly, all the movable and immovable properties including plant and machinery, equipments, furniture, fixtures, vehicles, stocks and inventory, leasehold assets and other properties, etc. and all the debts, liabilities, duties and obligations including contingent liabilities of the Transferor Companies, as on the Appointed Date vested in the Company with effect from 1 April, 2012 (the appointed date). The Scheme has accordingly been given effect to in the accounts.

b. Nature of business of the amalgamating companies:

(i) FAME was engaged in the business of owning, operating and managing multiplexes and cinema theatres in India.

(ii) FMPL was engaged in the business of exploitation of movie rights (including distribution) and programming.

(iii) BPHSPL was engaged in the business of operating food courts and restaurants in India.

(iv) HFPL was engaged in the business of film production and distribution in India.

c. The amalgamation is accounted for under the "Pooling of Interest" method as prescribed in Accounting Standard (AS-14) notified under the Companies (Accounting Standards) Rules, 2006. Accordingly, the assets, liabilities and reserves of FAME, FMPL, BPHSPL and HFPL as at 1 April, 2012 have been taken over at their book value, except to ensure uniformity of accounting policies. The details of the same are given below:

d. As per the terms of the Scheme, the authorised share capital of each of the Transferor Companies has been merged with that of the Company.

e. In terms of the Scheme, the equity shares to be issued and allotted by the Company shall rank for dividend, voting rights and in all respects pari-passu with the existing equity shares of the Company.

f. As per the Scheme, in respect of the equity shares of FAME held by the Company, 2,44,31,570 equity shares of the Company will be issued to the Inox Benefit Trust, set up pursuant to the Scheme, for the benefit of the Company. The same are reflected as ''Interest in Inox Benefit Trust'' under Non-current Investments at cost of Rs. 18,348.45 lacs.

4. Exceptional items:

a. Swanston Multiplex Cinemas Private Limited, a joint venture of erstwhile Fame India Limited (amalgamated with the Company w.e.f. 1 April 2012) which was running FAME BIG CINEMAS Multiplex at Andheri (West), Mumbai, has stopped operations w.e.f. 13th July 2012 as the lease agreement of the property was terminated. Estimated provision of Rs. 250 lacs for diminution in the value of investment in the joint venture has been made during the current year and has been shown as an exceptional item.

b. During the previous year, the levy of service tax on renting of immovable property was upheld by several High Courts. The Company has preferred a Special Leave Petition before the Hon''ble Supreme Court which is pending and the Company has made the payments in this regard as directed by the Hon''ble Supreme Court. In these circumstances, the Company had provided for service tax on renting of immovable properties. The amount of such service tax of ^ 973.29 lacs being the charge for the period upto 31st March 2011 was shown as an exceptional item in the Statement of Profit and Loss for the year ended 31st March, 2012.

5. Rights Issue In case of erstwhile Fame India Ltd

Through the Letter of Offer dated 30 January 2012, Fame India Limited (one of the Transferor Company, since amalgamated w.e.f 1st April, 2012 with the Company) had made Rights Issue of 20,290,508 equity shares with a face value of Rs. 10/- each at a premium of Rs. 34/- per equity share. Allotment of 20,290,508 equity shares was made on 02 March 2012.

6. During the year ended 31st March 2006, the Company had issued 500,000 equity shares of Rs. 10 each at a premium of Rs.5 per share to Inox Leisure Limited - Employees'' Welfare Trust ("Trust") to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs.75 lacs to the Trust for subscription of these shares at the beginning of the plan.

As per the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, shares allotted to the Trust but not transferred to employees is required to be reduced from Share Capital and Reserves. Out of the 500,000 equity shares allotted to the Trust, 166,843 shares have been transferred to employees up to 31st March 2013. Accordingly, for the balance number of shares, the Company has reduced the Share Capital by the amount of face value of equity shares and Share Premium Account by the amount of share premium on such shares. The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share.

The vesting period for these equity settled options is between one to four years from the date of the grant. The options are exercisable within one year from the date of vesting. The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method.

In respect of the options granted under the Employees'' Stock Option Plan, in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, the accounting value of options is amortized over the vesting period. Consequently, ''Employee benefits expense'' in note no 27 includes ^ 1.06 lacs (previous year credit of Rs. 4.78 lacs) being the amortization of employee compensation.

Had the Company adopted fair value method in respect of options granted, the employee compensation cost would have been higher by Rs. 0.06 lacs, profit after tax lower by Rs. 0.06 lacs and the basic and diluted earnings per share would have been lower by less than Rs. 0.01 each.

As per the terms of the Scheme of Amalgamation (referred to in Note no. 30), the stock options granted by erstwhile Fame India Limited ("Fame") to its employees automatically stand cancelled. The Company will issue stock options to the eligible employees of Fame either under (i) existing or revised ESOP Scheme of the Company or (ii) a distinct and separate employee stock option plan of the Company formed and organized for granting stock options to employees of Fame. These stock options will be granted in the ratio of 5 options (each option being equal to one share) of Company for every 8 options (each option being equal to one share) held under ESOP of Fame.

7. In respect of taxation matters

a) In the appellate proceedings before the Commissioner of Income-tax (Appeals) and Income Tax Appellate Tribunal, Ahmedabad Bench, the Company''s contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted. Provision for current tax is made on this basis to the extent the entertainment tax exemption is held as capital receipt for such multiplexes.

b) Provision for current taxation is for Minimum Alternate Tax (MAT) payable on book profit. MAT paid by the Company is entitled to be carried forward and utilized in subsequent years. In the opinion of management, on the basis of projections, estimates of future taxable income and the period available for utilization of MAT credit, the Company would have normal tax liability within the specified period to avail such MAT credit. Consequently, the Company has recognized Rs. 310.00 lacs (Previous year Rs. 412.00 lacs) towards MAT credit entitlement and the cumulative amount as on 31st March, 2013 is Rs. 2,576.81 lacs (previous year Rs. 2,003.00 lacs).

8. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt - Rs. 7,818.95 lacs (Previous Year Rs. 130.85 lacs)

b. Municipal Tax demand - Rs. 621.28 lacs (Previous Year Rs. 548.33 lacs)

c. Entertainment Tax demand - Rs. 1,043.85 lacs (Previous Year Rs. 2.22 lacs). This includes Rs. 1,040.83 lacs in respect of Pune Multiplex demand notice received pertaining to exemption period and for which the Company is contesting the matter by way of appeal before appropriate authority.

d. Service Tax demand -Rs. 97.31 lacs (Previous YearRs. 97.31 lacs).

e. Stamp duty demand - Rs. 263.81 lacs (Previous Year Rs. 263.81 lacs)

f. Custom duty for import of capital goods - Rs. 4.36 lacs (Previous Year Nil)

g. The Company has received a show cause cum demand notice dated 5 December 2005 for custom duty payable by them on import of cinematographic films under Rule 2 (2), Rule 7 (A) and Rule 9 (2) of the Customs Valuation Rule 1988. Nothing has been deposited with the authorities as the amount is not quantified by the authorities. However, on 28 September 2006, the Company has filed an appeal against the Commissioner''s Order to the Appellate Tribunal under Section 129-A of The Customs Act, 1962 and the same is pending hearing.

h. TDS matters under Income-tax Act - Rs. 11.32 lacs (Previous Year Nil)

i. The Company has issued termination notice for one of its proposed multiplexes seeking refund of security deposit of Rs. 60.07 lacs and reimbursement of the cost of fit-outs of Rs. 902.83 lacs incurred by the Company and carried forward as capital work-in-progress. The party has made a counter claim of Rs. 6,943.44 lacs towards rent for lock in period and other costs which is included in (a) above.. At present the matter is pending before the Arbitrator.

j. The Company may be required to charge additional cost of Rs. 389.83 lacs (previous year Nil) towards electricity from 1 June 2007 to 31 March 2010 pursuant to the increase in the tariff in case the appeal made with Maharashtra Electricity Regulatory Commission ''MERC by the Company through the Multiplex Association of India is rejected and the case filed in the Supreme Court by one of the electricity supplier against the order of the Appellate Tribunal for Electricity, dated 19January 2009, for change in category, in favor of the appeal made by the Multiplex Association of India is passed in favor of the electricity supplier. The Company has paid the whole amount to the respective authorities under protest (which is included in ''long term loans and advances'')

9. In respect of Entertainment Tax liability of the Company and its treatment in these accounts: -

a. The Entertainment Tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orders yet to be received from respective authorities. Accordingly the amount of Rs. 382.07 lacs (Previous Year Rs. 413.37 lacs) being Entertainment Tax in respect of such Multiplexes has not been charged to the statement of profit and loss. Cumulative amount as on 31st March 2013 is Rs. 3,389.17 lacs (Previous Year Rs. 3,007.10 lacs).

b. In respect of the Multiplex Cinema Theatre at Vadodara, the issues in respect of the eligibility for exemption from payment of entertainment tax and the method of computing the exemption availed, have been decided in favour of the Company by the Honourable High Court of Gujarat vide its order dated 26th June, 2009. The matter regarding method of computation of eligibility amount is challenged by the Government Department before the Honourable Supreme Court. Pending receipt of final eligibility certificate the figures indicated in the (a) above include the figures pertaining to the said Multiplex.

10. The arbitration award in the matter of disputed recoveries pertaining to one of the multiplex of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest ofRs. 18.28 lacs. (Previous Year Rs. 18.23 lacs) Total amount of interest receivable upto 31st March, 2013 is Rs. 129.82 (Previous Year Rs. 111.54 lacs). The said award has been challenged before the District Court and the matter is pending.

11. Commitments:

a. Capital commitments:

Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances - Rs. 1,822.77 lacs (Previous Year Rs. 996.41 lacs).

b. Other commitments:

The exemption from payment of Entertainment Tax in respect of multiplexes of the Company, which are eligible for such exemption, is subject to fulfillment of the terms and conditions of the respective State Government policies issued in this regard. The amount of Entertainment Tax exemption availed so far by the Company, which is liable to be paid if the relevant multiplex ceases operations prior to completing the minimum period of operations in terms of the respective policies of the States - Rs. 15,730.92 lacs (previous year Rs. 6,852.52 lacs).

12. Amount of Rs. 79.67 lacs (Previous year Rs. 38.94 lacs) is paid towards Legal & Professional fees to firms in which one of the directors is a partner.

13. The Company''s significant leasing arrangements are in respect of :-

a. Operating leases for premises (offices and residential accommodations for employees) - Generally, these lease arrangements are non-cancelable, range between 11 months to 33 months and are usually renewable by mutual consent on mutually agreeable terms. Lease rentals of Rs. 3.26 lacs (Previous Year Rs. 3.05 lacs) are included in ''Property Rent and Conducting Fees'' in note no. 29 to the Statement of Profit and Loss.

b. The Company is operating some of the multiplexes under Operating Lease / Business Conducting Arrangement. These arrangements are for a period of 9-25 years with a minimum lock-in period of 3-10 years and the agreement provides for escalation in rentals after pre-determined periods. Property Rent and Conducting Fees ofRs. 9,263.36 lacs (Previous Year Rs. 5,074.22 lacs) are included in ''Property Rent and Conducting Fees'' in note no. 29 to the Statement of Profit and Loss.

14. Segment Information

Upto last year, the Company had classified operating & managing multiplexes and cinema theatres and distribution of movies and production of Movies as separate business segments. During the current year, the Company has not carried out any activity for distribution of movies and production of Movies. Accordingly The Company operates in a single business segment viz. theatrical exhibition. All activities of the Company are in India and hence there are no geographical segments.

15. Interest in joint ventures

The Company''s interests in Swanston Multiplex Cinemas Private Limited (''SMCPL''), acquired on amalgamation of erstwhile Fame India Limited (refer to note no. 30), is accounted for in accordance with the principles and procedures set out in AS - 27, Financial Reporting of Interests in Joint Ventures specified in the Companies (Accounting Standards) Rules, 2006.

The interest in the joint venture is reported as non-current investment (refer note 15) and stated at cost, less provision for diminution, other than temporary, in the value of investment. The Company''s share of each of the assets, liabilities, income and expenses, etc. (each without elimination of the effect of transactions between the Company and the joint venture) related to its interests in the joint ventures, based on audited financial statements is:

16. Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs. 247.79 lacs (Previous year Rs. 140.81 lacs) is recognized as an expense and included in ''Contribution to Provident & Other Funds'' in the Statement of Profit and Loss and Rs. 16.52 lacs (Previous Year Rs. 8.67 lacs) is included in pre-operative expenses.

b) Defined Benefit Plans: The amounts recognized in respect of Gratuity and Leave Encashment – as per Actuarial valuation

The above defined benefit plans are unfunded. The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

17. Related Party Disclosure: (i) Where Control Exists

a. Gujarat Fluorochemicals Limited - Holding Company

b. Inox Leasing & Finance Limited - Ultimate Holding Company

c. Fame India Limited - Subsidiary Company (amalgamated w.e.f. 1st April, 2012)

d. Fame Motion Pictures Limited - subsidiary of Fame India Ltd (amalgamated w.e.f 1st April, 2012).

e. Big Pictures Hospitality Services Private Limited - subsidiary of Fame India Ltd (amalgamated w.e.f 1st April, 2012)

f. Headstrong Films Private Limited - subsidiary of Fame India Ltd (amalgamated w.e.f. 1st April, 2012). (ii) Other related parties with whom there are transactions:

a. Fellow Subsidiary - Inox Motion Pictures Limited

b. Key Management Personnel - Mr. P K Jain - Director (There are no transactions with Mr. P K Jain. The transactions with enterprises in which he or his relative has significant influence are included in (iii) below)

c. Key Management Personnel - Mr. Alok Tandon - Manager

d. Key Management Personnel - Mr. Rajeev Patni - Manager of Fame India Ltd., amalgamated w.e.f. 1st April 2012.

e. Joint Venture - Swanston Multiplex Cinemas Private Limited (''SMCPL'')

(iii) Enterprises over which Key Management Personnel, or his relative, has significant influence

a. Devansh Trading and Finance Private Limited

b. Sidhapavan Trading and Finance Private Limited


Mar 31, 2012

1. CORPORATE INFORMATION

Inox Leisure Limited (the "Company") is engaged in the business of operating & managing multiplexes and cinema theatres in India. The Company is a public company and its shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India. The Company is a subsidiary of Gujarat Fluorochemicals Limited.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, under the historical cost convention and on accrual basis. These financial statements comply in all material respects with the applicable Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entittled to receive the remaining assets of the Company, in proportion to their shareholding, after distribution of all preferential amounts, if any.

b) Shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

1,895,548 fully paid-up equity shares were issued to shareholders of erstwhile Calcutta Cine Private Limited pursuant to a Scheme of Amalgamation during the year ended 31st March, 2008

c) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, please refer note no.32

Nature of Security and terms of repayment for secured borrowings

Term loan from Axis Bank amounting to Rs 660.81 lacs (previous year Rs 1101.33 lacs) carries interest @ bank base rate 2.75 % p.a. which is in the range of 11.75% to 12.75% and is secured by mortgage of immovable property situated at Vadodara and charge on all stocks, debts and movable properties situated at Burdhwan, Indore Central, Rajarhat (Kolkata), Jayanagar (Bangalore), Siliguri and Maleshwaram (Bangalore) multiplexes. The loan is repayable in 16 equal quarterly instalments beginning from 31st December, 2009.

Term loan from Citi Bank amounting to Rs1166.66 lacs (previous year Rs1833.33 lacs) carries interest @ 8.75% p.a. and is secured by mortgage of immovable property situated at Pune and charge on all movable assets situated at Pune, Thane and Rajapark (Jaipur) multiplexes and five future properties. The loan is repayable in 12 equal quarterly instalments beginning from 29th January, 2011.

Term loan from ING Vysya Bank amounting to Rs 1944.44 lacs (previous year Rs 3111.11 lacs) carries interest @ 9.5% p.a. and is secured by charge on immovable property situated at Nariman Point and exclusive charge on all the current and fixed assets situated at Vizag Beach Road, Vizag CMR Mall, Kanpur, Belgaum, J.PNagar (Bangalore) multiplexes and two future multiplexes. The loan is repayable in 36 equal monthly instalments beginning from 1st December, 2010.

Terms of repayment for unsecured borrowings

The inter-corporate deposits are repayable in 3-4 years from the date of the respective deposits beginning from 8th June 2013 and carry interest in the range of 8.75% to 11.50%.

Note: In respect of amounts mentioned under unclaimed dividends, the actual amount to be transferred to the Investor Education and Protection Fund shall be determined on the due date.

3. As per the amendment made by the Finance Act 2010, renting of immovable property is defined as a taxable service with retrospective effect from 1 June, 2007 and accordingly, in the annual accounts for the year ended 31st March 2010, the Company had provided for service tax in respect of rent on immovable properties for the year ended 31st March 2009 and 31st March 2010.

During the year ended 31st March 2011, this levy was challenged by the Company by filing Writ Petitions with various High Courts and some of the High Courts had granted a stay against the levy of service tax in respect of immovable properties of the Company situated within their jurisdictions. Based on legal advice obtained by the Company, no provision of service tax was made for the year ended 31st March 2011. Further, the amount provided in the accounts during the year ended 31st March 2010 towards such service tax was reversed and the same is shown as an exceptional item in the statement of profit and loss.

During the current year, the levy has been upheld by several High Courts. The Company has preferred a Special Leave Petition before the Hon'ble Supreme Court which is pending and the Company has made the payments in this regard as directed by the Hon'ble Supreme Court.

In the above circumstances, the Company has provided for service tax on renting of immovable properties. Accordingly an amount of Rs 525.07 lakhs being the charge for the current year is included in 'Service tax' and the amount of Rs 973.29 lakhs being the charge for the period upto 31st March 2011 is shown as an exceptional item in the Statement of Profit and Loss.

4. During the year ended 31st March 2010, the Company had acquired 1,50,57,751 equity shares in Fame (India) Limited ("Fame"), being the Promoters' shareholding, through a block deal carried out on the Bombay Stock Exchange. The Company had thereafter acquired another 25,07,537 equity shares in Fame, from the market, through two separate block deals carried out on the Bombay Stock Exchange. As a result of these acquisitions, the Company held 1,75,65,288 equity shares comprising of 50.48% stake in Fame. Pursuant thereto, as required under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, an Open Offer was made to the Shareholders of Fame for acquisition of 82,31,759 equity shares in Fame at a price of Rs 51 per share.

On completion of Open Offer Company's stake in Fame stood at 50.27% of the then existing issued and paid-up capital of Fame. Accordingly, as per the provisions of Companies Act, 1956, Fame had become a subsidiary of Inox Leisure Limited w.e.f. 6th January 2011.

During the current year the Company has subscribed and acquired 20,212,212 Equity shares of Fame pursuant to Rights issue of Fame. The Company has thereafter acquired 659,737 Equity shares of Fame from the open market. As a result of these acquisitions, the Company now holds 38,438,312 equity shares comprising of 69.54% stake in Fame as on 31 March 2012.

5. During the year ended 31st March 2006, the Company had issued 500,000 equity shares of Rs 10 each at a premium of Rs 5 per share to Inox Leisure Limited - Employees' Welfare Trust ("Trust") to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs 75 lacs to the Trust for subscription of these shares at the beginning of the plan.

As per the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, shares allotted to the Trust but not transferred to employees is required to be reduced from Share Capital and Reserves. Out of the 500,000 equity shares allotted to the Trust, 161,843 shares have been transferred to employees up to 31st March 2012. Accordingly, for the balance number of shares, the Company has reduced the Share Capital by the amount of face value of equity shares and Share Premium Account by the amount of share premium on such shares. The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share.

The vesting period for these equity settled options is between one to four years from the date of the grant. The options are exercisable within one year from the date of vesting. The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method.

In respect of the options granted under the Employees' Stock Option Plan, in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, the accounting value of options is amortized over the vesting period. Consequently, 'Employee benefits expense' in note no 27 includes credit of Rs 4.78 lacs (previous year Rs 9.87 lacs) being the amortization of employee compensation.

Had the Company adopted fair value method in respect of options granted, the employee compensation cost would have been higher by Rs 0.12 lacs, profit after tax lower by Rs 0.12 lacs and the basic and diluted earnings per share would have been lower by less than Rs 0.01 each.

6. In respect of taxation matters

a) In the appellate proceedings before the Commissioner of Income-tax (Appeals) and Income Tax Appellate Tribunal, Ahmedabad Bench, the Company's contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted. Provision for current tax is made on the same basis for such multiplexes.

b) Provision for current taxation is for Minimum Alternate Tax (MAT) payable on book profit. MAT paid by the Company is entitled to be carried forward and utilized in subsequent years. In the opinion of management, on the basis of projections, estimates of future taxable income and the period available for utilization of MAT credit, the Company would have normal tax liability within the specified period to avail such MAT credit. Consequently, the Company has recognized Rs 412 lakhs (Previous year Rs 293 lakhs) towards MAT credit entitlement and the cumulative amount as on 31st March, 2012 is Rs 2003 lakhs.

7. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt - Rs 130.85 lacs (Previous Year Rs 79.45 lacs)

b. Municipal Tax demand - Rs 548.33 lacs (Previous Year Rs 475.39 lacs)

c. Entertainment Tax demand - Rs 2.22 lacs (Previous Year Rs 53.06 lacs)

d. Service Tax demand - Rs 97.31 lacs (Previous Year Rs 97.31 lacs).

e. ESIC demand - Rs Nil (Previous Year Rs 9.71 lacs)

f. Stamp duty demand - Rs 263.81 lacs (Previous Year Rs Nil)

g. Corporate guarantee given to bank towards credit facilities of upto Rs 3716 lacs to subsidiary company - amount of credit facilities outstanding - Rs 1372.99 lacs (Previous Year Rs Nil)

8. In respect of Entertainment Tax liability of the Company and its treatment in these accounts: -

a. The Entertainment Tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orders yet to be received from respective authorities. Accordingly the amount of Rs413.37 lacs (Previous Year Rs 304.91 lacs) being Entertainment Tax in respect of such Multiplexes has not been charged to profit & loss account. Cumulative amount as on 31st March 2012 - Rs 3007.10 lacs (as on 31st March 2011 - Rs 2593.73 lacs).

b. In respect of the Multiplex Cinema Theatre at Vadodara, the issues in respect of the eligibility for exemption from payment of entertainment tax and the method of computing the exemption availed, have been decided in favour of the Company by the Honourable High Court of Gujarat vide its order dated 26th June, 2009. The matter regarding method of computation of eligibility amount is challenged by the Government Department before the Honourable Supreme Court. Pending receipt of final eligibility certificate the figures indicated in the (a) above include the figures pertaining to the said Multiplex.

9. Commitments:

a) Capital commitments:

Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances - Rs 996.41 lacs (Previous Year Rs 174.50 lacs).

b) Other commitments:

The exemption from payment of Entertainment Tax in respect of Multiplexes of the Company, which are eligible for such exemption, is subject to fulfillment of the terms and conditions of the respective State Government policies issued in this regard. The amount of Entertainment Tax exemption availed so far by the Company, which is liable to be paid if the relevant multiplex ceases operations prior to completing the minimum period of operations in terms of the respective policies of the States - Rs 6852.52 lacs (previous year Rs 7404.63 lacs).

Amount of amortization of the accounting value of options granted to the Manager - Rs Nil lacs (previous year - Rs 1.87 lacs)

The Manager was re-appointed for the period from 1st October 2010 to 30th September 2011 at the Annual General Meeting of the Company held on 9th July, 2010 with remuneration not exceeding Rs 75 lacs per annum, in a manner as may be mutually decided between the Board and the Manager. At the time of re-appointment, this remuneration was within the limits of section 198 and 387 read with Schedule XIII to the Companies Act, 1956. However, in view of inadequacy of profits in the financial year ended 31st March, 2011, the remuneration paid to the Manager was in excess of the limits of section 198 and 387 read with Schedule XIII to the Companies Act, 1956 and required approval of the Central Government. The Company had filed application with the Central Government for waiver of remuneration of Rs 2.21 lacs paid in excess of the limits and the same was rejected by the Central Government. The Company has made a representation against the rejection and the same is pending.

The Manager was re-appointed for the period from 1st October 2011 to 31st March 2013 at the Annual General Meeting of the Company held on 15th July, 2011 with remuneration not exceeding Rs 90 lacs per annum, in a manner as may be mutually decided between the Board and the Manager. In view of inadequacy of profit for the financial year 2010-11, this appointment is subject to approval of Central Government. The Company has filed necessary application with Central Government and the same is pending.

10. Amount of Rs 38.94 lacs (Previous year Rs 94.58 lacs) is paid towards Legal & Professional fees to firms in which one of the directors is a partner.

11. The arbitration award in the matter of disputed recoveries pertaining to one of the multiplex of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest of Rs 18.23 lacs. (Previous Year Rs 18.23 lacs) Total amount of interest receivable upto 31st March, 2012 is Rs 111.54 lacs. During the previous year the said award has been challenged before the District Court and the matter is pending.

12. The Company's significant leasing arrangements are in respect of:-

a. Operating leases for premises (offices and residential accommodations for employees) - Generally, these lease arrangements are non-cancelable, range between 11 months to 33 months and are usually renewable by mutual consent on mutually agreeable terms. Lease rentals of Rs 3.05 lacs (Previous Year Rs 2.62 lacs) are included in 'Property Rent and Conducting Fees' in note no. 29 to the Statement of Profit and Loss.

b. The Company is operating some of the multiplexes under Operating Lease / Business Conducting Arrangement. These arrangements are for a period of 9-25 years with a minimum lock-in period of 3-10 years and the agreement provides for escalation in rentals after pre-determined periods. Property Rent and Conducting Fees of Rs 5074.22 lacs (Previous Year Rs 4335.15 lacs) are included in 'Property Rent and Conducting Fees' in note no. 29 to the Statement of Profit and Loss.

B. Information about Secondary (Geographical) Segment

All activities of the Company are located in India and hence the Company is operating in a single geographical segment.

C. Notes:

a. The Company operates in following business segments:

i. Theatrical Exhibition Business - Operating & managing multiplexes and cinema theatres.

ii. Others - Distribution of Movies and Production of Movies

b. The above segment information includes the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

c. Upto last year, the Company had classified generation of wind energy as a separate business segments. Since the wind energy is primarily used for captive consumption in theatrical business, the management has reviewed the classification during the year and the activity of generation of wind energy is included in the theatrical exhibition segment.

13. Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs 140.81 lacs (Previous year Rs 121.16 lacs) is recognized as an expense and included in 'Contribution to Provident & Other Funds' in the Statement of Profit and Loss and Rs 0.39 lacs (Previous Year Rs 1.32 lacs) is included in pre-operative expenses.

The above defined benefit plans are unfunded. The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

14. Related Party Disclosure:

(i) Where Control Exists

a. Gujarat Fluorochemicals Limited - Holding Company

b. Inox Leasing & Finance Limited - Ultimate Holding Company

c. Fame India Limited - Subsidiary Company (w.e.f 6th January, 2011)

d. Fame Motion Pictures Limited (formerly Shringar Films Limited) - subsidiary of Fame India Ltd.

e. Big Pictures Hospitality Services Private Limited - subsidiary of Fame India Ltd.

f. Headstrong Films Private Limited - subsidiary of Fame India Ltd.

(ii) Other related parties with whom there are transactions:

a. Inox Motion Pictures Limited - Fellow Subsidiary

b. Mr. Alok Tandon (Manager) - Key Management Personnel


Mar 31, 2011

1. During the year ended 31st March 2010, the Company had acquired 1,50,57,751 equity shares in Fame (India) Limited ("Fame"), being the Promoters' shareholding, through a block deal carried out on the Bombay Stock Exchange. The Company had thereafter acquired another 25,07,537 equity shares in Fame, from the market, through two separate block deals carried out on the Bombay Stock Exchange. As a result of these acquisitions, the Company held 1,75,65,288 equity shares comprising of 50.48% stake in Fame. Pursuant thereto, as required under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, an Open Offer was made to the Shareholders of Fame for acquisition of 82,31,759 equity shares in Fame at a price of Rs 51 per share. In this regard, the Company had placed Rs. 42 crores, being 100% of the funds required under the Open Offer, in escrow with HDFC Bank, and the 1,50,57,751 equity shares acquired from the Promoters of Fame were placed in escrow with Standard Chartered Bank, till the conclusion of the Open Offer formalities.

During the current year, the open offer was made from 16th December 2010 to 4th January 2011 and after completion thereof, on 6th January 2011 the amount of Rs. 42 crores and the equity shares placed in escrow were released. The Company's stake in Fame now stands at 50.27% of the existing issued and paid-up capital of Fame. Accordingly, as per the provisions of Companies Act, 1956, Fame has become a subsidiary of Inox Leisure Limited w.e.f. 6th January 2011.

2 During the year ended 31st March 2006, the Company had issued 500,000 equity shares of Rs. 10 each at a premium of Rs. 5 per share to Inox Leisure Limited – Employees' Welfare Trust ("Trust") to be transferred to the employees of the Company under the scheme of ESOP framed by the Company in this regard. The Company has provided finance of Rs. 75 lacs to the Trust for subscription of these shares at the beginning of the plan.

As per the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, shares allotted to the Trust but not transferred to employees is required to be reduced from Share Capital and Reserves. Out of the 500,000 equity shares allotted to the Trust, 146,263 shares have been transferred to employees up to 31st March 2011. Accordingly, for the balance number of shares, the Company has reduced the Share Capital by the amount of face value of equity shares and Share Premium Account by the amount of share premium on such shares. The Company has also given effect to the above in the calculation of its Basic and Diluted earnings per share.

Following stock options have been granted to the employees:

On 29th January 2007 (First Grant) 244,120 shares

On 27th October 2009 (Second Grant) 33,332 shares

The vesting period for these equity settled options is between one to four years from the date of the grant. The options are exercisable within one year from the date of vesting. The compensation costs of stock options granted to employees are accounted by the Company using the intrinsic value method.

All stock options are exercisable at the exercise price of Rs. 15 per option and the weighted average remaining contractual life is as under:

Options granted on 29th January 2007 0.83 years

Options granted on 27th October 2009 2.08 years

In respect of the options granted under the Employees' Stock Option Plan, in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India, the accounting value of options is amortized over the vesting period. Consequently, ‘Salaries, Wages, Allowances and Benefits' in Schedule 17 includes Rs. 9.87 lacs (previous year Rs. 16.22 lacs) being the amortization of employee compensation.

Had the Company adopted fair value method in respect of options granted, the employee compensation cost would have been higher by Rs. 0.58 lacs, profit after tax lower by Rs. 0.58 lacs and the basic and diluted earnings per share would have been lower by less than Rs. 0.01 each.

3. In respect of Service-tax Matters

As per the amendment made by the Finance Act 2010, renting of immovable property was defined as a taxable service with retrospective effect from 1 June, 2007. Accordingly, in the annual accounts for the year ended 31st March 2010, the Company had provided service tax for Rs. 561.34 lakhs in respect of rentals paid for the year ended 31st March, 2009 and 31st March, 2010.

During the current year, the Company has challenged this levy by filing Writ Petition with various High Courts. While Honourable High Court of Mumbai, Delhi and Karnataka have granted stay for the levy of service tax in respect of immovable properties of the Company situated within their respective jurisdictions, matter is pending for hearing at Honourable Andhra Pradesh High Court.

Based on legal advice obtained by the Company, the levy of service tax on renting of immovable property cannot be said to be final, and accordingly no provision of service tax of Rs 423.63 lakhs on lease rentals is made for the year ended 31st March, 2011. Further, the amount of Rs 561.34 lakhs provided in the accounts during the year ended 31st March 2010, towards service tax on lease rentals for the year ended 31st March 2009 and 31st March 2010, has been reversed and netted in Schedule 17: Operating and Other Expenses.

4. In respect of taxation matters

(a) In the appellate proceedings before the Commissioner of Income-tax (Appeals) the Company's contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted. Accordingly, treating the amount of entertainment tax exemption amounts as a capital receipt in respect of multiplexes in those States covered by the orders of the Commissioner of Income-tax (Appeals), during the year ended 31st March 2010 the Company had recomputed its current tax liability and deferred tax liability, and credited an amount of Rs. 192.63 lakhs in the Profit and Loss Account under ‘Taxation in respect of Earlier Years'.

Provision for current tax is also made on the same basis and consequently the provision for current taxation is for Minimum Alternate Tax payable on book profit.

(b) The Minimum Alternate Tax (MAT) paid by the Company is entitled to be carried forward and utilized in subsequent years. In the opinion of management, on the basis of projections, estimates of future taxable income and the extension of period for utilization of MAT credit as per the amendment made by the Finance Act (No. 2), 2009, the Company would have normal tax liability within the specified period to avail such MAT credit. Consequently, during the year ended 31st March 2010, the Company had recognized the MAT credit entitlement of Rs. 978.00 lakhs in respect of earlier years.

5. In the opinion of Board of Directors, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business and the provisions of depreciation and of all known liabilities are adequate and not in excess of the amount reasonably necessary.

6. Term loan from Axis Bank is secured by mortgage of immovable property situated at Vadodara and charge on all stocks, debts and movable properties situated at Burdhwan, Indore Central, Rajarhat (Kolkata), Jayanagar (Bangalore), Siliguri and Maleshwaram (Bangalore) multiplexes.

Term loan from Citi Bank is secured by mortgage of immovable property situated at Pune and charge on all movable assets situated at Pune, Thane and Rajapark (Jaipur) multiplexes and five future multiplexes.

Term loan from ING Vysya Bank is secured by charge on immovable property situated at Nariman Point and exclusive charge on all the current and fixed assets situated at Vizag Beach Road, Vizag CMR Mall, Kanpur, Belgaum, J.P.Nagar (Bangalore) multiplexes and two future multiplexes.

Term loan from Canara Bank was secured by mortgage of immovable property situated at Nariman Point and hypothecation of movable properties and current assets at Nariman Point.

7. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt – Rs. 79.45 lacs (Previous Year Rs. 58.95 lacs) b Bank Guarantees in respect of:

i. Entertainment tax exemption availed – Rs. 498.20 lacs (previous year Rs. 384.47 lacs)

ii Other matters – Rs. 6.07 lacs (previous year Rs. 7.07 lacs)

c Municipal Tax demand – Rs. 475.39 lacs (Previous Year Rs. 402.45 lacs)

d Entertainment Tax demand – Rs. 53.06 lacs (Previous Year Rs. 53.06 lacs)

e Service Tax demand – Rs. 97.31 lacs (Previous Year Rs. 55.74 lacs)

f ESIC demand – Rs. 9.71 lacs (Previous Year Rs. Nil)

g In respect of service tax on lease rentals – refer to note no. 4 above

9. In respect of Entertainment Tax liability of the Company and its treatment in these accounts: -

a. The exemption from payment of Entertainment Tax in respect of Multiplexes of the Company, which are eligible for such exemption, is subject to fulfillment of the terms and conditions of the respective Government policies issued in this regard. The amount of Entertainment Tax exemption availed so far by the Company, which is liable to be paid if the relevant multiplex ceases operations prior to completing the minimum period of operations in terms of the respective policies of the States – Rs. 7404.63 lacs (previous year Rs. 6744.70 lacs).

b The Entertainment Tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orders yet to be received from respective authorities. Accordingly the amount of Rs 440.46 lacs (Previous Year Rs. 277.14 lacs) being Entertainment Tax in respect of such Multiplexes has not been charged to profit & loss account. Cumulative amount as on 31st March 2011 - Rs. 2812.86 lacs (as on 31st March 2010 - Rs. 2372.40 lacs).

c In respect of the Multiplex Cinema Theatre at Vadodara, the issues in respect of the eligibility for exemption from payment of entertainment tax and the method of computing the exemption availed, have been decided in favour of the Company by the Honourable High Court of Gujarat vide its order dated 26th June, 2009. The matter regarding method of computation of eligibility amount is challenged by the Government Department before the Honourable Supreme Court. Pending receipt of final eligibility certificate the figures indicated in the (b) above include the figures pertaining to the said Multiplex.

8. Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances - Rs. 174.50 lacs (Previous Year Rs. 1109.42 lacs)

9. In view of the diverse nature of food and beverages sold by the Company, in the opinion of the management, it is not practical to give quantitative details thereof. Consequently, quantitative information regarding purchases, turnover, opening / closing stocks in respect of the same are not given. All items of food and beverages are indigenously procured.

10. Amount of Rs. 94.58 lacs (Previous year Rs. 266.96 lacs) is paid towards Legal & Professional fees to four firms in which one of the directors is a partner.

11. Tax deducted at source from Interest received is Rs. 32.45 lacs (Previous Year Rs. 4.81 lacs).

12. The arbitration award in the matter of disputed recoveries pertaining to one of the multiplex of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest of Rs. 18.23 lakhs. (Previous Year Rs. 75.07 lacs, including for earlier years) Total amount of interest receivable upto 31st March, 2011 is Rs.93.30 lakhs. During the current year the said award has been challenged before the District Court and the matter is pending.

13. The Company's significant leasing arrangements are in respect of :- a. Operating leases for premises (offices and residential accommodations for employees) - Generally, these lease arrangements are non-cancelable, range between 11 months to 33 months and are usually renewable by mutual consent on mutually agreeable terms. Lease rentals of Rs. 2.62 lacs (Previous Year Rs. 3.01 lacs) are included in ‘Property Rent and Conducting Fees' in Schedule 17 to the Profit and Loss Account.

b. The Company is operating some of the multiplexes under Operating Lease / Business Conducting Arrangement. These arrangements are for a period of 9-25 years with a minimum lock-in period of 3-10 years and the agreement provides for escalation in rentals after pre-determined periods. Property Rent and Conducting Fees of Rs. 4335.15 lacs (Previous Year Rs. 3006.30 lacs) are included in ‘Property Rent and Conducting Fees' in Schedule 17 to the Profit and Loss Account.

22. The operating licenses in respect of some of the multiplexes are not in the name of the Company.

B. Information about Secondary (Geographical) Segment

All the multiplexes of the Company are located in India and all the movies are produced/distributed in India. The power is also generated and sold / captively consumed in India. Hence the Company is operating in a single geographical segment.

C. Notes:

a. The Company operates in following business segments:

i Theatrical Exhibition Business – Operating & Managing Multiplex Entertainment Centres and cinema theatres ii Film Distribution Business – Distribution of Movies iii Film Production Business – Production of Movies iv Power Business – Generation of Wind Power

b. Inter-segment revenue of Distribution Business comprises of film distributors' share in respect of movies distributed by the Company and exhibited in its multiplexes. Inter-segment revenue of Power Business comprises of power generated and consumed in Multiplex Business. Inter-segment revenues are priced at market price.

c. The above segment information includes the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

14. Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs. 121.16 lacs (Previous year Rs. 94.05 lacs) is recognized as an expense and included in ‘Contribution to Provident & Other Funds' in the Profit and Loss Account and Rs. 1.32 lacs (Previous Year Rs. 2.35 lacs) is included in pre-operative expenses.

b) Defined Benefit Plans: The amounts recognized in respect of Gratuity and Leave Encashment – as per Actuarial valuation

The above defined benefit plans are unfunded. The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

15. Related Party Disclosure:

(i) Where Control Exists

a. Gujarat Fluorochemicals Limited – Holding Company

b. Inox Leasing & Finance Limited – Ultimate Holding Company

c. Fame India Limited – Subsidiary Company (w.e.f. 6th January, 2011)

d. Fame Motion Pictures Limited (formerly Shringar Films Limited) – subsidiary of Fame India Limited

e. Big Pictures Hospitality Services Private Limited – subsidiary of Fame India Limited

(ii) Other related parties with whom there are transactions:

a. Inox Motion Pictures Limited – Fellow Subsidiary

b. Mr. Alok Tandon (Manager) – Key Management Personnel

16. In respect of amounts mentioned under unclaimed dividends, the actual amount to be transferred to the Investor Education and Protection Fund shall be determined on the due date.

17. Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956, is enclosed vide Annexure.


Mar 31, 2010

1. In respect of Service-tax Matters

(a) During the year ended 31st March 2009, in view of the Honorable Delhi High Courts judgment dated 18th April 2009 in the case of Home Solution Retail India Ltd. & Others v. Union of India, wherein it was held that renting of immovable property by itself is not a service and accordingly the levy of service tax on activity of renting immovable property is ultra vires the Finance Act, 1994, the service tax of Rs. 318.84 lacs in respect of rentals paid during the year ended 31st March 2009 was not charged to the Profit and Loss Account.

During the current year, as per the amendment made by the Finance Act, 2010, renting of immovable property is now defined as a taxable service with retrospective effect from Ist June 2007. Accordingly, the Company has provided for the above service tax of Rs. 318.84 lacs in respect of rentals paid during the year ended 31st March 2009 and the same is included in the amount of Service Tax charged to the Profit and Loss Account in Schedule 16: Operating and Other Expenses.

(b) Till the year ended 3 Ist March 2008, as per the then prevailing regulations, the Company was claiming service tax set-off in respect of service tax paid, to the extent of 20% of service tax collected, and the balance amount of service tax paid was charged to the Profit and Loss Account. During the year ended 31st March 2009, the Central Board of Excise and Customs, vide Circular No CBEC No. 137/72/2008-CX dated 21st November, 2008, had clarified that such unutilized accumulated amount of service-tax as on 31st March 2008 can be utilized for payment of service tax after Ist April 2008. Accordingly, during the year ended 31st March, 2009 the Company had taken credit for such unutilized accumulated amount of service tax of Rs. 321.22 lacs and the same was shown separately in the Schedule 16: Operating and Other Expenses, as deduction.

2. In respect of taxation matters

(a) In the appellate proceedings before the Commissioner of Income-tax (Appeals) the Companys contention that the amount of entertainment tax exemption availed for some of its multiplexes is a capital receipt has been accepted, in respect of one more multiplex during the current year, in addition to a few multiplexes in the last year. Accordingly, treating the amount of entertainment tax exemption amounts as a capital receipt in respect of multiplexes in those States covered by the orders of the Commissioner of Income-tax (Appeals), the Company has recomputed its current tax liability and deferred tax liability, and credited an amount of Rs. 192.63 lakhs (Previous year Rs. 1022.62 lakhs) in the Profit and Loss Account under Taxation in respect of Earlier Years.

Provision for current tax is also made on the same basis and consequently the provision for current taxation is for Minimum Alternate Tax payable on book profit.

(b) The Minimum Alternate Tax (MAT) paid by the Company is entitled to be carried forward and utilized in subsequent years. In the opinion of management, on the basis of projections, estimates of future taxable income and the extension of period for utilization of MAT credit as per the amendment made by the Finance Act (No. 2), 2009, the Company would have normal tax liability within the specified period to avail such MAT credit. Consequently, the Company has now recognized the MAT credit entitlement of Rs. 978.00 lakhs in respect of earlier years and Rs. 292.00 lakhs in respect of current year.

3. In the opinion of Board of Directors, the current assets, loans and advances are approximately of the values stated if realised, in the ordinary course of business and the provisions of depreciation and of all known liabilities are adequate and not in excess of the amount reasonably necessary.

4. Term loan from Axis Bank is secured by mortgage of immovable property situated at Vadodara and charge on all stocks, debts and movable properties situated at Burdhwan, Indore Central, Rajarhat (Kolkata), Jayanagar (Bangalore), Siliguri and Maleswaram (Bangalore) multiplexes.

Term loan from Citi Bank is secured by mortgage of immovable property situated at Pune and charge on all movable assets situated at Pune and Thane multiplexes and six future multiplexes.

Term loan from Canara Bank is secured by mortgage of immovable property situated at Nariman Point and hypothecation of movable properties and current assets at Nariman Point.

Term loan from ING Vysya Bank is secured by second charge on immovable property situated at Nariman Point and exclusive charge on all the Current and Fixed assets situated at Vizag multiplex and six future multiplexes.

5. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt - Rs. 58.95 lacs (Previous Year Rs. 15.30 lacs).

b. Bank Guarantees furnished by the Company for performance of contractual obligations Rs. 391.54 lacs (Previous Year

Rs. 391.54 lacs)

c. Municipal Tax demand - Rs. 402.45 lacs (Previous Year Rs. 1346.11 lacs)

d. Entertainment Tax demand - Rs. 53.06 lacs (Previous Year Rs. 53.06 lacs)

e. Service Tax demand - Rs. 55.74 lacs (Previous Year Rs. 55.74 lacs).

6. Estimated amounts of contracts remaining to be executed on capital account and not provided for, net of advances - Rs. 1109.42 lacs (Previous Year Rs. 960.00 lacs)

7. In respect of Entertainment Tax liability of the Company and its treatment in these accounts: -

a. The exemption from payment of Entertainment Tax in respect of Multiplexes of the Company, which are eligible for such exemption, is subject to fulfillment of the terms and conditions of the respective Government policies issued in this regard.

b. The Entertainment Tax exemption in respect of some of the Multiplexes of the Company has been accounted on the basis of eligibility criteria as laid down in the respective Schemes but is subject to final Orders yet to be received from respective authorities. Accordingly the amount of Rs 277.14 lacs (Previous Year Rs. 408.91 lacs) being Entertainment Tax in respect of such Multiplexes has not been charged to profit & loss account. Cumulative amount as on 31" March 2010 - Rs. 2372.40 lacs (as on 31 st March 2009 - Rs. 2119.94 lacs).

c. In respect of the Multiplex Cinema Theatre at Vadodara, the issues in respect of the eligibility for exemption from payment of entertainment tax and the method of computing the exemption availed, have been decided in favour of the Company by the Honourable High Court of Gujarat vide its order dated 26th June, 2009. Pending receipt of final eligibility certificate the figures indicated in the above note include the figures pertaining to the said Multiplex.

8. In view of the diverse nature of food and beverages sold by the Company, in the opinion of the management, it is not practical to give quantitative details thereof. Consequently, quantitative information regarding purchases, turnover, opening / closing stocks in respect of the same are not given. All items of food and beverages are indigenously procured.

9. Amount of Rs. 266.96 lacs (Previous year Rs. 42.69 lacs) is paid to a firm in which one of the directors is a partner, towards Legal & Professional fees.

10. Tax deducted at source from Interest received is Rs. 4.81 lacs (Previous Year Rs. 1.34 lacs)

11. The arbitration award in the matter of disputed recoveries pertaining to one of the multiplex of the Company has been received in favour of the Company and the arbitrator has further granted interest claimed on the unpaid amount at the rate of 15% p.a. The Company has accordingly accounted interest of Rs. 75.07 lakhs receivable upto 31 st March, 2010.

12. The Companys significant leasing arrangements are in respect of :-

a. Operating leases for premises (offices and residential accommodations for employees) - Generally, these lease arrangements are non-cancelable, range between 11 months to 33 months and are usually renewable by mutual consent on mutually agreeable terms. Lease rentals of Rs. 3.01 lacs (Previous Year Rs. 10.42 lacs) are included in Property Rent and Conducting Fee/ in Schedule 17 to the Profit and Loss Account and lease rental of Rs. Nil lacs (Previous Year Rs. 15.85 lacs) are in. hided in Schedule 6 : Pre-operative Expenditure Pending Allocation.

b. The Company is operating some of the multiplexes under Operating Lease / Business Conducting Arrangement. There arrangements are for a period of 9-25 years with a minimum lock-in period of 3-10 years and the agreement provides for escalation in rentals after pre-determined periods. Property Rent and Conducting Fees of Rs. 3012.03 lacs (Previous Year Rs. 2633.07 lacs) are included in Property Rent and Conducting Fees in Schedule 17 to the Profit and Loss Account

13. The operating licenses in respect of some of the multiplexes are not in the name of the Company.

14. Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs. 94.05 lacs (Previous year Rs. 97.68 lacs) is recognized as an expense and included in Contribution to Provident & Other Funds in the Profit and Loss Account and Rs. 2.35 lacs (Previous Year Rs. 10.74 lacs) is included in pre-operative expenses.

15. Related Party Disclosure: (i) Where Control Exists

Holding Company - Gujarat Fluorochemicals Limited Ultimate Holding Company - Inox Leasing & Finance Limited (ii) Other related parties with whom there are transactions: Fellow Subsidiary - Inox Motion Pictures Limited Key Management Personnel - Mr. Alok Tandon (Manager)

16. In respect of amounts mentioned under Unclaimed Dividends, there is no amount due and outstanding to be credited to Investor Education and Protection Fund as at 31 March 2010.

17. Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956, is enclosed vide Annexure.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X