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Notes to Accounts of PVR INOX Ltd.

Mar 31, 2023

Impairment testing of Goodwill:

Goodwill represents excess of consideration paid over the net assets acquired. This is monitored by the management at the level of cash generating unit (CGU) and is tested annually for impairment. Cinemax India Limited (2012-13), Cinema exhibition undertaking of DLF Utilities Limited (2016-17), SPI Cinemas Limited (2018-19) and INOX Leisure Limited and Jazz cinemas (2022-23) acquired/merged during the previous year now completely integrated with the existing cinema business of the Parent Company, and accordingly is monitored together as one CGU. The Parent Company tested goodwill for impairment using a post-tax discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital, using discount rate of 10 to 12.5% p.a. and terminal growth rate of 4%-5%. This long-term growth rate takes into consideration external macroeconomic sources of data. Such long-term growth rate considered does not exceed that of the relevant business and industry sector. We believe use of a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. The Parent Company believes that any reasonably possible change in the key assumptions on which a recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

No impairment of goodwill was identified as of March 31, 2023.

¹ During the previous year ended March 31, 2023, there was an additional equity investment of 15,000 Lakhs in PVR Pictures Limited.

² During the year ended March 31, 2023, 60 (March 31, 2022 : Nil) 0.01% Compulsorily Convertible Debentures were converted into 9,071 equity shares of Zea Maize Private Limited.

³ During the year ended March 31, 2023, there was an additional capital infusion of 150 Lakhs in Zea Maize Private Limited through equity shares and the same is pending for allotment as on March 31, 2023.

⁴ Business Combination (Merger by Absorption)

Shouri Properties Private Limited (SPPL) is a wholly-owned subsidiary of the Company (consequent to merger of erstwhile INOX Leisure Limited with the Company). SPPL holds a license to operate a multiplex cinema theatre. The Board of Directors of the erstwhile INOX Leisure Limited (INOX), at their meeting held on January 21, 2022, had approved the draft Scheme of Amalgamation (Merger by Absorption) ("the Scheme") under Sections 230 to 232 of the Companies Act, 2013 ("the Act") and other relevant applicable sections of the act for amalgamation of SPPL with the INOX 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. Further the Board of Directors of the Company at their meeting held on March 16, 2023, has approved the amalgamation of SPPL with Company. Thereafter, the Company has filed an application with Hon''ble NCLT Mumbai on April 06, 2023 for substitution of name of INOX Leisure Limited with PVR INOX Limited in the Company Scheme Petition along with other consequential amendments. The matter was heard on April 13, 2023 and Hon''ble NCLT Mumbai has allowed the application and fixed the final date of hearing on June 07, 2023 formalities. The Company is yet to receive the approval of NCLT on the scheme, accordingly appropriate accounting treatment of the Scheme will be done post receipt of NCLT approval.

⁵ During the previous year ended March 31, 2023, SPI Entertainment Project (Tirupati) Private Limited has been struck off as per Companies Act, 2013 & after taking the requisite approvals as required by the law the Company has written off the investment.

¹ Pursuant to Section 115BAA of Income Tax Act, 1961, the Company from the current fiscal year has opted for lower tax rates. Consequent to this, the Company has calculated tax for current year and remeasured its deferred tax basis rates prescribed in this section and credited the consequential impact in the deferred taxes for the year ended March 31, 2023 amounting to 113,433 Lakhs. Also, an amount of 16,993 Lakhs on account of MAT credit entitlement for the previous years has been charged to Profit & Loss account.

In assessing the realisability of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable incomes over the periods in which the deferred tax assets are deductible, management believes that it is probable that the Company will be able to realise the benefits of those deductible differences in future.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of 110 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) Term Loan from banks carries variable interest rate based on respective bank benchmark rate, effective rate of interest varying in between 7.70% p.a to 11.05% p.a.

(iv) FY 2022-23 has been a year of recovery post-pandemic, with significant volatility in business that had an adverse effect on the financial performance. This has resulted in the Company being in non-compliance with certain financial covenants agreed with its lenders. The Company has sought and received waiver letters from all its lenders for the financial year 2022-23 wherever these covenants were required to be tested.

(v) All Debentures are secured by mortgage on all movable (both present and future)properties, plant and equipment, capital work-in-progress, other intangible assets, loans and advances, security deposit, inventories, trade receivables, & capital advances of the Company (Excluding immovable properties situated at Gujarat, Bangalore & Tamil Naidu and Assets on which specific security/ lien exists or is created in favour of any statutory/ regulatory body) . All the Debentures have been repaid during the year.

(i) Term loan from banks are secured by first pari passu charge over all movable (both present and futurejproperties, plant and equipment, capital work-in-progress, other intangible assets, loans and advances, security deposit, inventories, trade receivables, & capital advances of the Company (Excluding immovable properties situated at Gujarat, Bangalore & Tamil Naidu and Assets on which specific security/ lien exists or is created in favour of any statutory/ regulatory body). Also there is a specific charge on the immovable property situated at Mumbai for a bank loan amounting to 13,056 Lakhs.

d) Finance lease obligation is secured by hypothecation of plant and machinery taken on lease. The interest rate implicit in the lease is varying between 11.37% p.a. to 13.99% p.a. The payment is scheduled in 28 equal quarterly instalments from the start of lease agreements.

e) During COVID-19, the Company has initiated discussions with landlords for waiver and rebates in Rental charges during the lockdown period. The Company has been successful in getting relief from most of its landlords.

The Company has elected to apply the practical expedient of not assessing the rent concessions as a lease modification, as per MCA notification dated July 24, 2020 on Ind AS 116 for rent concessions which are granted due to COVID-19 pandemic. As per requirements of MCA notification, total rent concessions recorded during year ended March 31, 2023 amounted to 1305 Lakhs (March 31, 2022 : 126,977 Lakhs). Out of this, 124,430 Lakhs is recognised in "Other incomeâ during the year ended March 31, 2022 after adjusting the rent expense of 12,547 Lakhs for the year ended March 31, 2022. There was no such income to be classified in other income during the year ended March 31, 2023.

33 Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service, in terms of Payment of Gratuity Act, 1972. The scheme is funded with four insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets. Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

As the plan assets include investments in quoted mutual funds, the Company has diversified the market risk.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

38 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law requires such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of international transactions with the associated enterprises during the financial year and expects such records to be in existence latest by the due date of filing the return of income. The management is of the opinion that its international transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on these standalone financial statements, particularly on the amount of tax expense and that of provision for taxation.

39 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a Company meeting the applicability threshold, is required to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, care for destitute women and rehabilitation of under privileged person, environment sustainability, disaster relief and COVID-19 relief. A CSR committee has been formed by the Company as per the Companies Act, 2013.

During the year ended March 31, 2023 and the previous year March 31, 2022 the Company did not have any obligation for spending money on CSR activities.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial liabilities and assets approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

Long-term fixed-rate and variable-rate receivables/deposit are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables/deposits.

The fair values of the quoted instruments are based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under leases, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

There is no significant estimate involved in level 3. Further, the deferred consideration is based on the present value of the expected cash outflows discounted using risk adjusted discount rate i.e 9.50% p.a. The estimated fair value of deferred consideration would increase/decrease if the expected cash outflows were higher/lower or the risk adjusted discount rate was higher/lower.

43 Segment

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Managing Director of the Company has been identified as being the chief operating decision maker to assess the financial performance and position of the Company and make strategic decisions. The Company is engaged primarily in the business of theatrical exhibition and allied activities under the brand "PVR INOX". Accordingly, in the context of Indian Accounting Standard 108 - Operating Segments, it is considered to constitute single reportable segment.

44 Business Combination

(i) Amalgamation of Inox Leisure Limited with PVR INOX Limited:

During the previous year, the Board of Directors of PVR INOX Limited (formerly known as PVR LIMITED) ("Company" or "Transferee Company"), in their meeting held on March 27, 2022, considered and approved a scheme of amalgamation of INOX Leisure Limited ("Transferor Company") into and with the Company and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other rules and regulations framed thereunder ("Scheme").

During the current year, the Company has received requisite approvals and the scheme has been sanctioned by the Hon''ble National Company Law Tribunal (NCLT) vide its order dated January 12, 2023 ((Mumbai Bench) with the appointed date of January 01, 2023. The Certified true copy of the said order sanctioning the scheme has been filed with the Registrar of Companies, New Delhi. In accordance with the order of NCLT, the Company has given effect to the scheme in the standalone financial statements w.e.f. appointed date i.e. January 01, 2023. Management has determined that the effect of the difference in appointed date between the requirements of the Scheme and of Ind AS 103 - Business Combinations, is not material to these financial statements. The merger has been accounted for using the acquisition accounting method under Ind AS 103 - Business Combinations and the difference between the fair value of net identifiable assets acquired and consideration paid on the merger has been accounted for as Goodwill of 14,63,379 Lakhs. In accordance with the Scheme, the purchase consideration of 16,29,666 Lakhs has been discharged by issue and allotment of 36,701,729 equity shares of the Company to the shareholders of INOX Leisure Limited.

The stamp duty payable on such issue amounting to INR 5,000 Lakhs has been debited to Securities Premium Account.

The amalgamation of PVR INOX Limited and INOX Leisure Limited is of significant strategic value for the Company and will further cement the Company''s market leadership position in India. The Company expects to realise synergies and cost savings related to this acquisition as a result of purchasing and procurement economies of scale and general and administrative expense savings, particularly with respect to the consolidation of corporate related functions and elimination of redundancies.

D Revenue and profit contribution

The acquired business contributed revenues of 141,269 Lakhs and loss before tax of 15,644 Lakhs for the period between January 01, 2023 to March 31, 2023.

If the acquisitions had occurred on April 01, 2022, consolidated pro-forma revenue and profit before tax for the year ended March 31, 2023 would have been 11,90,438 Lakhs and 19,479 Lakhs, respectively.

(ii) Acquisition of Cinema exhibition undertaking of Jazz Cinemas Pvt. Ltd.:

During the quarter, the Company acquired the cinema exhibition undertaking situated at Chennai of Jazz Cinemas Pvt. Ltd. on a slump sale basis. The sale and transfer of the said Cinema exhibition undertaking has been completed on March 03, 2023 and the same has been accounted as per Ind AS 103, "Business combinationâ. The same has resulted in goodwill of 15,725 Lakhs.

(b) The financial figures in above note exclude expenses reimbursed to/by related parties.

(d) For Zea Maize Private Limited, share capital movement refer note 5.

(e) Corporate Guarantee given to bank against credit facility availed by Zea Maize Private Limited amounting to 1500 Lakhs (March 31, 2022

1200 Lakhs).

(''f) All transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and within the ordinary course of business. Outstanding balances at the year end are unsecured and settlement occurs in cash. Transactions relating to dividend, subscriptions for new equity shares are on the same terms and conditions that are offered to other shareholders.

46 Financial Risk Management objective and policies

The Company''s principal financial liabilities comprise of loans and borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk, legal, taxation and accounting risk and liquidity risk. The Company''s treasury team overseas the management of these risks supported by senior management.

(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 risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and FVTOCI investments.

(i) Interest rate risk

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''s exposure to the risk of changes in market interest rates relates primarily to the long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

contractual and regulatory requirements and has implemented disclosure controls and internal controls over financial reporting which are tested for effectiveness on an ongoing basis.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Loans primarily represents security deposits given to Mall Developers/lessors. Such deposit will be returned to the Company on expiry of lease entered with Mall developers/lessors. The credit risk associated with such security deposits is relatively low.

Trade receivables are typically unsecured and are derived from revenue earned from customers located in India. Trade receivables also includes receivables from Debit/credit card companies and online movie ticketing partners which are realisable within a period 1 to 3 working days. The Company monitors the economic environment in which it operates. The Company manages its credit risk through establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.

The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors as the Company''s historical experience for customer. Accordingly, based on the business environment in which the Company operates, management considers that the trade receivables (other than Government dues) are in default/doubtful if the payment is outstanding for more than 270 days and more than 365 days in case of government dues. Basis above, as at March 31, 2023, Company has impaired Trade receivables of 13,702 Lakhs (March 31, 2022: 13,479 Lakhs). Further, the management believes that the unimpaired amounts that are past due by more than 270 days continue to be collectible in full, based on historical payment behaviour and analysis of customer credit risk.

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers.

(ii) Currency risk

Currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates.

The majority of the Company''s revenue and expenses are in Indian Rupees, with the remainder denominated in US Dollars. Management considers currency risk to be low and does not hedge its currency risk. As variations in foreign currency exchange rates are not expected to have a significant impact on the results of operations, a sensitivity analysis is not presented.

(b) Legal, taxation and accounting risk

The Company is presently involved into various judicial, administrative, regulatory and litigation proceedings concerning matters arising in the ordinary course of business operations including but not limited to personal injury claims, landlord-tenant disputes, commercials disputes, tax disputes (including entertainment tax subsidy and other direct and indirect tax matters like GST, Service tax, Sales tax etc.), employment disputes and other contractual disputes. Many of these proceedings seek an indeterminate amount of damages. In situations where management believes that a loss arising from a proceeding is probable and can reasonably be estimated, the Company records the amount of the probable loss. As additional information becomes available, any potential liability related to these proceedings is assessed and the estimates are revised, if necessary.

(d) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Company''s approach to manage liquidity is to have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, lease liabilities and advance payment terms.

The Company''s liquidity management process as monitored by management, includes the following:

â¢ Day to Day funding, managed by monitoring future cash flows to ensure that requirements can be met.

â¢ Maintaining rolling forecasts of the Company''s liquidity position on the basis of expected cash flows.

â¢ Maintaining diversified credit lines.

47 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return on capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long-term debts plus amount payable for purchase of property plant and equipment divided by total equity.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

50 The Company has paid remuneration to Mr. Ajay Bijli, Managing Director and Mr. Sanjeev Kumar, Executive Director respectively for the year ended March 31, 2022 which was already approved by the Nomination and Remuneration Committee and the Board of Directors in their respective meetings. The same is in accordance with the minimum remuneration as was originally approved by the shareholders vide their resolutions dated July 03, 2018 and September 29, 2020. In view of the inadequacy of profits, the Company had also obtained approval of the shareholders by way of special resolution in Annual General Meeting of the Company held on July 21st 2022, pursuant to the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

51 The Company has paid remuneration to Mr. Ajay Bijli, Managing Director and Mr. Sanjeev Kumar, Executive Director respectively for the year ended March 31, 2023 which was already approved by the Nomination and Remuneration Committee and the Board of Directors in their respective meetings. The same is in accordance with the minimum remuneration as was originally approved by the shareholders vide their resolutions dated July 03, 2018 and September 29, 2020. The Company shall seek approval of the shareholders by way of special resolution in its forthcoming Annual General Meeting of the Company pursuant to the provisions of Section 197 read with Schedule V to the Companies Act, 2013 and in view of the inadequacy of profits.

(vii) The Company have 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:

(a) d irectly 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The title deeds/legal ownership of immovable properties including the leased properties as disclosed in the standalone financial statements are held in the name of the Company.

(ix) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

54 Previous year figures have been audited by a firm of Chartered Accountants other than S.R. Batliboi & Co. LLP and have been regrouped and re-arranged wherever necessary.

53 Other statutory information :

(i) The Company do not have any transactions with companies struck off.

(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as

income during the 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).

(iv) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(v) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries)

with the understanding that the Intermediary shall :

(a) d irectly 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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

Mar 31, 2022

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Note:

Impairment testing of Goodwill:

Goodwill represents excess of consideration paid over the net assets acquired. This is monitored by the management at the level of cash generating unit (CGU) and is tested annually for impairment. Cinemax India Limited, Cinema exhibition undertaking of DLF Utilities Limited and SPI Cinemas Private Limited acquired in financial year 2012- 13, 2016-17 and 2018-19 respectively are now completely integrated with the existing cinema business of the Company, and accordingly is monitored together as one CGU. The Company tested goodwill for impairment using a post-tax discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital, using discount rate of 10 to 12.5% p.a. and terminal growth rate of 5% to 10%. This long-term growth rate takes into consideration external macroeconomic sources of data. Such long-term growth rate considered does not exceed that of the relevant business and industry sector. We believe use of a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. The Company believes that any reasonably possible change in the key assumptions on which a recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash-generating unit.

No impairment of goodwill was identified as of March 31, 2022.

¹ During the year ended March 31, 2018, the Company had acquired a minority stake for a value of USD 4 million (equivalent to ''2,581 Lakhs), in an American luxury restaurant-and-theatre Company "iPic Entertainment Inc.â (formerly known as iPic-Gold Entertainment LLC). The Company designated this investment as equity shares at FVTOCI because these equity shares represent investments that the Company intends to hold for long-term strategic purpose. Accordingly, the fair value changes with respect to such investment has been recognised in OCI - ''Equity investments at FVTOCI''. Since IPIC had filed for bankruptcy under Chapter XI during FY 2019-20, the Company had created provision against the full investment value. Further, during the current year ended March 31, 2022, after taking requisite approvals as required by the law the Company has written off the investment.

¹ During the year ended March 31, 2022, loan amounting to ''2,792 Lakhs given to P V R Lanka Limited was converted to 7,451,640 Equity shares of PVR Lanka Limited of LKR 100/- each.

² During the year ended March 31, 2022, 23,095 (March 31, 2021: 5,709) 0.01% Compulsorily Convertible Preference Shares were converted into 23,095 (March 31, 2021: 5,709) equity shares of Zea Maize Private Limited.

During the previous year ended March 31, 2021, there was an additional capital infusion of ''140 Lakhs in Zea Maize Private Limited, ''70 Lakhs through 0.01% Compulsory convertible preference shares and ''70 Lakhs through equity shares.

³ During the year ended March 31, 2022, there was an additional capital infusion of ''600 Lakhs (March 31, 2021: Nil) in Zea Maize Private Limited through 60 (March 31, 2021: Nil) 0.01% Compulsory convertible debentures of ''1,000,000/- each.

¹ Includes interest accrued amounting to ''796 Lakhs (March 31, 2021:'' 1,114 Lakhs) on loans given to related companies.

² The Entertainment tax/GST 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 erstwhile/current State Government schemes and applications filed with the authorities.

¹ The Company has not accounted for deferred tax assets on loss on fair valuation of "iPic Entertainment Inc." investment on account of absence of reasonable certainty.

² The MAT credit entitlement recognised by the Company represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of the Income Tax Act, 1961.

The management, based on future projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable

the Company to utilise MAT credit entitlement and Deferred tax assets.

*The Finance Act, 2021 had introduced amendments in various provisions of the Income Tax Act,1961 to exclude "goodwill of a business/ professionâ from the purview of intangible assets u/s 32(1)(ii) of the Income Tax Act,1961 eligible for depreciation effective April 01, 2020 onwards. In accordance with the requirements of Ind AS 12 - Income Taxes, during the previous year ended March 31, 2021 the Company had recognised one time deferred tax expense amounting to ''11,299 Lakhs as the outcome of difference between Goodwill as per books of account and its remaining unutilised tax base of '' Nil as per the aforementioned amendment. This deferred tax liability is not expected to be a cash flow item.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of ''10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

f) 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 32.

g) Qualified Institutions Placement

During the previous year ended March 31, 2021, the Company had completed the Qualified Institutions Placement ("QIP") under Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, pursuant to which 5,555,555 equity shares having a face value of ''10 each were issued and allotted, at an issue price of ''1,440 per equity share (including a securities premium of ''1,430 per equity share), aggregating to ''80,000 Lakhs.

The proceeds of such Qualified Institutions Placement amounts to ''79,107 Lakhs (net of issue related expenses which has been adjusted against securities premium). As per the placement document, QIP proceeds were to be utilised for repayment/ prepayment of outstanding borrowings along with interest, ongoing capital expenditure, funding suitable organic and inorganic growth opportunities including investment in subsidiaries, meeting short and long-term working capital requirements, meeting operating expenses and general corporate purposes. As on March 31, 2022, entire QIP proceeds have been utilised and there is no deviation in use of proceeds from the objects stated in the placement document for the QIP.

h) Rights issue

During the previous year ended March 31, 2021, the Company had issued and allotted 3,823,872 equity shares on August 07, 2020 of face value ''10/- each (Rights Equity Shares) to the eligible equity shareholders at an issue price ''784 per Rights Equity Share (including premium of ''774 per Rights Equity Share) aggregating to ''29,979 Lakhs.

The proceeds of Rights issue amounts to ''29,754 Lakhs (net of issue related expenses which has been adjusted against securities premium). As per the letter of offer, Rights issue proceeds were to be utilised for repayment/ prepayment of outstanding borrowings along with interest and general corporate purposes. As on March 31, 2021, entire Rights issue proceeds were utilised and there was no deviation in use of proceeds from the objects stated in the Offer document for the Rights issue.

All Debentures are secured by mortgage on all movable (both present and future) properties, plant and equipment, capital work-in-progress, other intangible assets, loans and advances, security deposit, inventories, trade receivables, & capital advances of the Company (Excluding immovable properties situated at Gujarat, Bangalore & Tamil Nadu and Assets on which specific security/lien exists or is created in favour of any statutory/regulatory body).

b) (i) Term loan from banks are secured by first pari passu charge over all movable (both present and future)properties, plant and equipment, capital work-in-progress, other intangible assets, loans and advances, security deposit, inventories, trade receivables, & capital advances of the Company (Excluding immovable properties situated at Gujarat, Bangalore & Tamil Nadu and Assets on which specific security/ lien exists or is created in favour of any statutory/ regulatory body).

(iii) Term Loan from banks carries variable interest rate based on respective bank benchmark rate, effective rate of interest varying in between 7.40% p.a to 10.25% p.a.

(iv) During previous year ended March 31, 2021, the Company had availed the moratorium announced by Reserve Bank of India and had adjusted the current and non-current balance of term loan based on revised repayment schedule agreed with Banks.

(v) Outbreak of COVID19 and consequent lockdowns announced by the various state government has had material negative impact on the financial performance of the business. This has resulted in Company being in non-compliance with certain financial covenants agreed with its lenders. The Company has sought and received waiver letters from all its lenders for financial year 2020-21 and 202122 wherever these covenants were required to be tested.

e) Consequent to spurt of second wave of COVID-19, the Company has initiated discussions with landlords for waiver and rebates in Rental charges during the lockdown period. The Company has been successful in getting relief from most of its landlords.

The Company has elected to apply the practical expedient of not assessing the rent concessions as a lease modification, as per MCA notification on Ind AS 116 for rent concessions which are granted due to COVID-19 pandemic. As per requirements of MCA notification, total rent concessions recorded during year ended March 31, 2022 amounted to ''26,977 Lakhs (March 31, 2021: ''44,478 Lakhs). Out of this ''24,430 Lakhs (March 31, 2021: ''42,525 Lakhs) is recognised in "Other incomeâ after adjusting the rent expense of ''2,547 Lakhs (March 31, 2021: ''1,953 Lakhs) for the year ended March 31, 2022.

i. Bank overdraft is secured by first pari passu charge on all current assets of the Company including inventories and receivables both present and future. It carries variable interest rate based on respective banks benchmark rate, effective rate of interest varying in between 7.55% to 10.25% p.a.

ii. The Company has been sanctioned working capital limits from banks but there are no requirements on the Company to submit quarterly returns or statements with the banks.

iii. In respect of Short-term loan from Banks, maximum amount outstanding during the year was ''16,100 Lakhs (March 31, 2021: ''17,167 Lakhs) with a maturity period of 7 days to 1 year, effective rate of interest 5 % p.a. to 10.25 % p.a.

iv. As at March 31, 2022, the Company had ''16,299 Lakhs {''7,500 Lakhs pertains to term loans and balance ''8,799 Lakhs pertains to working capital} (March 31, 2021: ''7,563 Lakhs) of undrawn committed borrowing facilities.

31 Gratuity plan:

The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets. Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

As the plan assets include investments in quoted mutual funds, the Company has diversified the market risk.

36 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law requires such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of international transactions with the associated enterprises during the financial year and expects such records to be in existence latest by the due date of filing the return of income. The management is of the opinion that its international transactions with the associated enterprises are at arm''s length so that the aforesaid legislation will not have any impact on these standalone financial statements, particularly on the amount of tax expense and that of provision for taxation.

37 Corporate Social Responsibility

During the year ended March 31, 2022 the Company did not have any obligation for spending money on CSR activities.

There is no significant estimate involved in level 3. Further, the deferred consideration is based on the present value of the expected cash outflows discounted using risk adjusted discount rate i.e. 9.50% p.a. The estimated fair value of deferred consideration would increase/ decrease if the expected cash outflows were higher/lower or the risk adjusted discount rate was higher/lower.

41 Segment

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Chairman of the Company has been identified as being the chief operating decision maker to assess the financial performance and position of the Company and make strategic decisions. The Company is engaged primarily in the business of theatrical exhibition and allied activities under the brand "PVR". Accordingly, in the context of Indian Accounting Standard 108 - Operating Segments, it is considered to constitute single reportable segment.

42 Business Combination

Amalgamation of Inox Leisure Limited with PVR Limited:

The Board of Directors of PVR Limited ("Company" or "Transferee Company"), at their meeting held on March 27, 2022, have considered and approved a scheme of amalgamation of INOX Leisure Limited ("Transferor Company") into and with the Company and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other rules and regulations framed thereunder ("Scheme").

The Scheme is subject to the receipt of applicable approvals, including approvals from the respective jurisdictional Hon''ble National Company Law Tribunal, SEBI, BSE Limited and the National Stock Exchange of India Limited, shareholders of both the Companies and such other approvals, permissions, and sanctions of regulatory and other authorities as may be necessary. Subsequent to the relevant approvals and the scheme becoming effective the shareholders of INOX Leisure Limited will receive the shares of PVR Limited as per the approved exchange ("swap") ratio, which is for every 10 shares of INOX Leisure Limited 3 shares of PVR Limited will be issued.

(a) The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole.

(b) The financial figures in above note exclude expenses reimbursed to/by related parties.

(d) For Zea Maize Private Limited, share capital movement refer note 5A.

(e) Corporate Guarantee given to bank against credit facility availed by Zea Maize Private Limited.

(f) All transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions and within the ordinary course of business. Outstanding balances at the year end are unsecured and settlement occurs in cash. Transactions relating to dividend, subscriptions for new equity shares are on the same terms and conditions that are offered to other shareholders.

Impact of COVID-19 pandemic:

In light of COVID-19 outbreak, the Company has considered the likely impact on its financial risk management policies, refer note 50 for details.

(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 risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and FVTOCI investments.

(i) Interest rate risk

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Loans primarily represents security deposits given to Mall Developers/ lessors. Such deposit will be returned to the Company on expiry of lease entered with Mall developers/lessors. The credit risk associated with such security deposits is relatively low.

The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors as the Company''s historical experience for customer. Accordingly, based on the business environment in which the Company operates, management considers that the trade receivables (other than Government dues) are in default/doubtful if the payment is outstanding for more than 270 days and more than 365 days in case of government dues. Basis above, as at March 31, 2022, Company has impaired Trade receivables of ''3,479 Lakhs (March 31, 2021: ''3,770 Lakhs). Further, the management believes that the unimpaired amounts that are past due by more than 270 days continue to be collectible in full, based on historical payment behavior and analysis of customer credit risk. The delay in collections is primarily to due COVID impact on the industry segments in which Company operates.

(ii) Currency risk

Currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates.

(b) Legal, taxation and accounting risk

To mitigate these risks, the Company employs in-house counsel and uses third party tax & legal experts to assist in structuring significant transactions and contracts. PVR also has systems and controls that ensure the timely delivery of financial information in order to meet contractual and regulatory requirements and has implemented disclosure controls and internal controls over financial reporting which are tested for effectiveness on an ongoing basis.

(d) Liquidity risk

The Company''s liquidity management process as monitored by management, includes the following:

- Day to Day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Company''s liquidity position on the basis of expected cash flows.

45 Capital management

49 Other statutory information:

(i) The Company do not have any transactions with companies struck off.

(ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iii) The Company have not any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the 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).

(iv) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(v) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) d irectly 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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(a) d irectly 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(viii) The title deeds/legal ownership of immovable properties including the leased properties as disclosed in the standalone financial statements are held in the name of the Company.

50 Estimation of uncertainties relating COVID-19 pandemic:

COVID-19 continued to impact the multiplex operations and the cinema industry at large in FY''2022. The impact of Second wave was seen in the first two quarters of the year. Post wave 2.0 cinema operations resumed from July 30, 2021 with various states allowing cinemas to operate with different capacity restrictions. Regular flow of new content started from the 1^st week of November 2021 once the key state of Maharashtra allowed cinemas to operate from 22 ^nd October onwards.

Third wave was the shortest as compared to the previous two waves. It started during the last week of December 2021 and lasted till the first week of February 2022. Majority of our properties were operational during early Q4 FY''2022 (with exception of Delhi and Haryana which were shut during January 2022) with various capacity restrictions but with limited or no content. Restrictions on cinema operations started easing from the 1^st week of February 2022 and by the first week of March 2022, all restrictions were eased. New content started to release in theatres during the second half of February 2022 and the month of March 2022 saw a fabulous performance of movies at Cinemas and strong recovery in footfalls. The Company witnessed EBITDA losses for the year. Given the high fixed cost nature of the business and that no new content got released during a large part of the year, the Company saw operational losses for the 12 months.

During the year, the Company has deftly managed its operations and mitigated the impact of the pandemic. Looking at how admissions have come back in March 2022 and the sustenance of ATP and SPH at elevated levels compared to pre pandemic levels, reflects the strong business model of the Company and the affinity of the consumer to come back to theatres.

We have carried out an assessment of the appropriateness of going concern, impairment of assets and other related aspects and we believe that there is no impact on the same. We believe that the pandemic may adversely impact the business in the short-term, but the long-term drivers of the business are intact and we do not anticipate any material medium to long-term risks to the business.

51 During the previous year, upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting dated June 02, 2021 had approved remuneration of ''642 Lakhs and ''443 Lakhs paid to Mr. Ajay Bijli, Chairman & Managing Director and Mr. Sanjeev Kumar, Joint Managing Director, respectively, during the Financial Year 2020-21. The same was in accordance with the minimum remuneration as was originally approved by the shareholders vide their resolutions dated July 03, 2018

and September 29, 2020. Pursuant to the provisions of Section 197 read with Schedule V to the Companies Act, 2013 and in view of the inadequacy of profits for the Financial Year 2020-21, Shareholder''s approval was taken in the AGM held on September 28, 2021 for the above mentioned remuneration.

52 Upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting dated May 09, 2022 has approved remuneration of ''642 Lakhs and ''443 Lakhs paid to Mr. Ajay Bijli, Chairman & Managing Director and Mr. Sanjeev Kumar, Joint Managing Director, respectively, during the Financial Year 2021-22. The same is in accordance with the minimum remuneration as was originally approved by the shareholders vide their resolutions dated July 03, 2018 and September 29, 2020. Pursuant to the provisions of Section 197 read with Schedule V to the Companies Act, 2013 and in view of the inadequacy of profits for the Financial Year 2021-22, the Company shall seek approval of the shareholders by way of special resolution in its forthcoming Annual General Meeting for the above mentioned remuneration.

Mar 31, 2019

1 Reporting entity

The Companyâs equity shares are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.

The Company is in the business of movie exhibition & production and operates largest cinema circuit across India.

The Company earns revenue from sale of movie tickets, in-cinema advertisements/product displays and sale of food and beverages and restaurant business.

2 Significant accounting policies

2.1 Basis of preparation

(a) Statement of compliance

These Standalone Financial Statements comply with Indian Accounting Standards (âInd ASâ) as prescribed under Section 133 of the Companies Act, 2013 (the âActâ), read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, relevant provisions of the Act and other accounting principles generally accepted in India.

These Standalone Financial Statements for the year ended March 31, 2019 are approved by the Audit Committee at its meeting held on May 9, 2019 and Board of Directors at its meeting held on May 10, 2019.

(b) Functional and presentation currency

These Standalone Financial Statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

(c) Basis of Measurement

These Standalone Financial Statements have been prepared on an accrual basis and under the historical cost convention, except for the following assets and liabilities which have been measured at fair value:

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments, refer note 2.2(v))

(d) Critical accounting estimates and judgements

In preparing these Standalone Financial Statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Information about significant areas of estimation and judgements in applying accounting policies that have the most significant effect on the Standalone Financial Statements are as follows:

- Note 2.2 (p) (iii) and 31 - measurement of defined benefit obligations: key actuarial assumptions;

- Note 2.2 (b),(c), (d), 3 and Note 4 - measurement of useful life and residual values of property, plant and equipment and intangible assets;

- Note 35 - Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy;

- Note 2.2 (u) - judgement required to determine ESOP assumptions;

- Note 2.2 (p) - judgement required to determine probability of recognition of current tax, deferred tax assets and MAT credit entitlement; and

- Note 2.2 (v)- fair value measurement of financial instruments.

There are no assumptions and estimation that have a significant risk resulting in a material adjustment within the next financial year.

i. Capital Work in progress

Capital work in progress represents leasehold improvements, plant and machinery and other assets under installation and cost relating thereto.

ii. Details of assets on finance lease included in Plant and machinery are as follows:

iii. Capitalised borrowing costs

The amount of borrowing costs capitalised during the year ended March 31, 2019 was Rs.1,501 lakhs (March 31, 2018: 429 lakhs).

Note: Impairment testing of Goodwill:

Goodwill represents excess of consideration paid over the net assets acquired. This is monitored by the management at the level of cash generating unit (CGU) and is tested annually for impairment. Cinemax India Limited and Cinema exhibition undertaking of DLF Utilities Limited acquired in financial year 2012- 13 and 2016-17 respectively is now completely integrated with the existing cinema business of the Company, and accordingly is monitored together as one CGU. The Company tested goodwill for impairment using a discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital, using the discount rate of 10% to 12.5% and terminal value growth rate of 5% to 10% from 2023-24. We believe use of a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. Additionally the goodwill has been tested for impairment by reference to the quoted price of equity shares of PVR Limited (âPVRâ), which carries total cinema exhibition business. As at March 31, 2019, total market capitalization of PVR is 768,452 lakhs significant part of which represents value of the cinema exhibition business which is higher than the carrying value of Goodwill.

No impairment of goodwill was identified as of March 31, 2019.

Notes:

(a) Short-term deposits are made for varying periods ranging between one day to three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

(b) Earmarked unpaid dividend accounts are restricted in use as it relates to unclaimed dividends or unpaid dividend.

(c) The disclosures regarding specified bank notes held and transacted during November 8, 2016 to December 30, 2016 has not been made in these financial statements since the requirement does not pertain to financial year ended March 31, 2019.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

e) 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 32).

All Debentures are secured by mortgage on immovable properties (excluding immovable properties at Gujarat, a flat at Bangalore and assets taken on finance lease) ranking pari passu and secured by first pari passu charge on movable assets of the Company (excluding vehicles hypothecated to banks and assets taken on finance lease) and all receivables of the Company both present and future.

b) (i) Term loan from banks are secured by first pari passu charge over all movable and immovable fixed assets of the Company (excluding immovable properties at Gujarat, a flat at Bangalore, vehicles hypothecated to banks and assets taken on finance lease) and receivables of the Company both present and future.

(ii) Vehicle loans of Rs. Nil (March 31, 2018: Rs.50 lakhs) carries interest @ 10.25% p.a. and is repayable in 60 monthly instalments.

The loan is secured by hypothecation of vehicles purchased out of the proceeds of the loan.

(iii) Above loans are repayable in equal/ unequal monthly/ quarterly instalments as follows:

(iv) Term Loan from banks carries variable interest rate based on respective bank/body corporate benchmark rate, effective rate of interest varying in between 8.50%p.a to 9.95% pa.

(v) Finance lease obligation is secured by hypothecation of plant and machinery taken on lease. The interest rate implicit in the lease is varying between 11.37% p.a. to 13.99% p.a. The payment is scheduled in 28 equal quarterly instalments from the start of lease agreements.

(vi) The Company has satisfied all material debt covenants.

Notes:

i. Bank overdraft is secured by first pari passu charge on all current assets of the Company including inventories and receivables both present and future. It carries variable interest rate based on respective banks/body corporate benchmark rate, effective rate of interest varying in between 8.85% to 10.7% p.a.

ii. In respect of Commercial Paper maximum amount outstanding during the year was Rs.15,000 lakhs (March 31, 2018 : Rs.11,500 lakhs) with a maturity period of 3 months, effective rate of interest varying from 6.95% to 7.75%.

iii. The Company had Rs.12,516 lakhs (March 31, 2018: Rs.11,648 lakhs) of undrawn committed borrowing facility available as at the year ended March 31, 2019.

During the year ended March 31, 2019 Rs.192 lakhs of unbilled revenue as of April 1, 2018 has been reclassified to Trade receivables upon billing to customers.

During the year ended March 31, 2019 the Company recognised revenue of Rs.3,261 Lakhs from opening advance from customers. as of April 1, 2018.

3 Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service, in terms of Payment of Gratuity Act, 1972. The scheme is funded with two insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets. Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

As the plan assets include investments in quoted mutual funds, the Company has diversified the market risk.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected return on plan assets is based on expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations.

The Company expects to contribute Rs.667 lakhs (March 31, 2018 Rs.550 lakhs) to gratuity fund in the financial year 2019-20. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

4 Employee Stock Option Plans

The Company has provided stock options to its employees. During the year 2018-19, the following schemes were in operation:

The Company measures the cost of ESOP using the fair value method. The option has been granted on an exercise price of Rs.1,400. As a result, an expense of Rs.63 lakhs is recorded in financial statements in current year of which Rs.10 lakhs is capitalised under Capital work-in progress and balance Rs.53 lakhs is debited in statement of profit and loss.

5 Leases

i Rental expenses in respect of operating leases are recognised as an expense in the statement of profit and loss and capitalised under CWIP, as the case may be.

Operating Lease (for assets taken on lease)

Disclosure for assets taken under non-cancellable leases, where the Company is presently carrying commercial operations is as under, which reflects the outstanding amount for non-cancellable period:

ii Rental income/Sub-Lease income in respect of operating leases are recognised as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

iii Finance lease: Company as lessee

The Company has finance leases contracts for plant and machinery (Projectors). These leases involve significant upfront lease payment, have terms of renewal and bargain purchase option. However, there is no escalation clause. Each renewal is at the option of lessee. Future minimum lease payments (MLP) under finance leases together with the present value of the net MLP are as follows:

6 Capital & Other Commitments

(a) Capital Commitments

(b) Other Commitments

The Company was availing Entertainment tax exemptions, in respect of certain Multiplexes as per the erstwhile State Government schemes & is under obligation to operate respective Multiplexes for a certain number of years.

Pursuant to judgment by the Honâble Supreme Court dated February 28, 2019, it was held that basic wages for the purpose of provident fund, to include special allowances which are common for all employees. However there is uncertainty with respect to the applicability of the judgment and period from which the same applies. The Company has estimated the impact of the same from March 1, 2019 to March 31, 2019 based on a prospective approach and has recognized the same in the financial statements.

Owing to the aforesaid uncertainty and pending clarification from the authority in this regard, the Company has not recognised any provision for the previous years. Further management also believes that the impact of the same on the Company will not be material

7 Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 2, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

8 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law requires such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of international transactions with the associated enterprises during the financial year and expects such records to be in existence latest by the due date of filing the return of income.

The management is of the opinion that its international transactions are at armâs length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

9 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, is required to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, care for destitute women and rehabilitation of under privileged person, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act.

During the year, the Company has spent Rs.360 lakhs through its foundation PVR Nest. PVR Nest focuses on providing education, healthcare, nutrition and rehabilitation to children.

10 Disclosure required under Section 186(4) of the Companies Act, 2013

Full particulars of loans given, investment made, guarantee given, security provided together with purpose in terms of Section 186(4) of the Companies Act, 2013

11 Fair Value

Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair value.

The carrying value & fair value of financial instruments by categories as of March 31, 2019 were as follows:

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

- Long-term fixed-rate and variable-rate receivables/deposit are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables/deposits.

- The fair values of the quoted instruments are based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under finance leases, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

12 Segment

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The Chairman of the Company has been identified as being the chief operating decision maker to assess the financial performance and position of the Company and make strategic decisions. The Company is engaged primarily in the business theatrical exhibition and allied activities under the brand âPVRâ. Accordingly, In the context of Indian Accounting Standard 108 - Operating Segments, it is considered to constitute single reportable segment.

13 Acquisition of SPI Cinemas Private Limited

The Board of Directors in its meeting held on August 12, 2018, approved the acquisition of SPI Cinemas Private Limited (âSPIâ) via Share Purchase Agreement (SPA) signed on August 12, 2018 by way of acquisition of 71.69% equity shares in SPI for a cash consideration of Rs.63,560 lakhs and for the balance 28.31% stake, through issue of 1,599,974 equity shares of the Company to SPI shareholders in the ratio of 1: 18.19 equity shares in the Company, pursuant to the proposed scheme of amalgamation (âSchemeâ). Consequent to above, on fulfilment of condition precedent in the said SPA, on August 17, 2018, the Company completed the acquisition of 71.69% shareholding in SPI. The proposed scheme of amalgamation has been approved by National Stock Exchange of India Limited & BSE Limited. Further, the scheme of amalgamation has also been approved by the members of the Company, secured and unsecured creditors of the Company and unsecured creditors of SPI in the NCLT meeting convened on April 24, 2019. The Company has filed an application with NCLT for final order in the matter. NCLT vide order dated May 8, 2019 has fixed July 10, 2019 as the next date of hearing of the Petition for the consideration of the approval of the Scheme of Amalgamation between the Petitioner Companies.

14 Financial risk Management objective and policies

The Companyâs principal financial liabilities comprise of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations and to provide guarantees to support its operations. The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk, legal, taxation and accounting risk and liquidity risk. Companyâs treasury team overseas the management of these risks supported by senior management.

(a) Market Risk

(i) Interest rate risk

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 Companyâs exposure to the risk of changes in market interest rates relates primarily to the long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Interest Rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on loans and borrowings. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

(ii) Currency risk

Currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates.

The Majority of the Companyâs revenue and expenses are in Indian Rupees, with the remainder denominated in US Dollars. Management considers currency risk to be low and does not hedge its currency risk. As variations in foreign currency exchange rates are not expected to have a significant impact on the results of operations, a sensitivity analysis is not presented.

(b) Legal, taxation and Accounting risk

In situations where management believes that a loss arising from a proceeding is probable and can reasonably be estimated, PVR records the amount of the probable loss. As additional information becomes available, any potential liability related to these proceedings is assessed and the estimates are revised, if necessary.

To mitigate these risks, the Company employs in-house counsel and uses third party tax & legal experts to assist in structuring significant transactions and contracts. PVR also has systems and controls that ensure the timely delivery of financial information in order to meet contractual and regulatory requirements and has implemented disclosure controls and Internal controls over financial reporting which are tested for effectiveness on an ongoing basis.

(c) Credit Risk

The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the Standalone Balance Sheet

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Loans primarily represents security deposits given to Mall Developers. Such deposit will be returned to the Company on expiry of lease entered with Mall Developer. The credit risk associated with such security deposits is relatively low.

The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available internal credit risk factors such as the Companyâs historical experience for customers. Based on the business environment in which the Company operates, management considers that the trade receivables (other than Government dues) are in default/doubtful if the payment is outstanding for more than 270 days and more than 365 days in case of government dues. Basis above, for the year ended March 31, 2019, Company has impaired Trade receivables of Rs.2,102 lakhs (March 31, 2018: Rs.1,161 lakhs).

Majority of trade receivables are from domestic customers, which are fragmented and are not concentrated to individual customers. Movement in the allowance for impairment in respect of trade receivables

(d) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Companyâs approach to manage liquidity is to have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Companyâs reputation.

The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, finance leases and advance payment terms.

The Companyâs liquidity management process as monitored by management, includes the following:

- Day to Day funding, managed by monitoring future cash flows to ensure that requirements can be met.

- Maintaining rolling forecasts of the Companyâs liquidity position on the basis of expected cash flows.

The Company has also significant contractual obligations in the form of operating lease (Note no. 33(i)) and capital & other commitments (Note No.34).

15 Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long-term debts plus amount payable for purchase of fixed assets divided by total equity.

16 The Board of Directors has recommended final dividend of 20% (Rs.2 per fully paid up equity share of Rs.10 each) for the year ended March 31, 2019 in the Board meeting dated May 10, 2019, which is subject to the approval of shareholders at the ensuing Annual General meeting of the Company.

17 Expenses capitalised

The Company has capitalised following expenses through capital work-in-progress (CWIP) which directly or indirectly relates to setting up of cinemas. Consequently, expenses disclosed under the respective notes are net of amounts capitalised by the Company.

During year ended March 31, 2018, the Company had sold its stake in one of its subsidiary Company âSmaaash Leisure Limited (formerly known as PVR BluO Entertainment Limited) (âInvestmentâ)â to âSmaaash Entertainment Private Limitedâ for a total consideration of Rs.8,600 lakhs, the details of which are as follows:

Under the erstwhile state entertainment tax laws, the Company enjoyed exemption on payment of entertainment tax to recoup the capital investments made in cinemas. However, post implementation of GST, the mechanism on how such exemptions/refunds will be made available has not been clarified by the authorities. The Company has submitted written representations to the various state governments directly and through multiplex associations, stating that since the Company has invested significant amounts on assurance that such exemptions will continue post GST, therefore, the authorities should crystalise the mechanism for extending such exemptions/refunds to the Company. As the matter is still pending for conclusion with various state authorities, the Company has not accounted for such incentives amounting to 1,398 lakhs from the period July 1, 2017 to March 31, 2019 in the financial statements.

Mar 31, 2018

1 Reporting entity

PVR Limited (âthe Companyâ) is a public limited Company domiciled in India and incorporated under the provisions of the Indian Companies Act with its registered office located at â61, Basant lok, Vasant Vihar, New Delhi, India - 110057â. The Companyâs equity shares are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India.

The Company is in the business of films exhibition & production and operates theatres in India. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages and restaurant business.

2 Significant accounting policies

2.1 Basis of preparation

(a) Statement of compliance

These standalone financial statements comply with Indian Accounting Standards (âInd ASâ) as prescribed under section 133 of the Companies Act, 2013 (the âActâ), read together with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, relevant provisions of the Act and other accounting principles generally accepted in India. The Company had adopted Ind AS with effect from April 1, 2016, with transition date of April 1, 2015, pursuant to notification issued by Ministry of Corporate Affairs dated February 16, 2015, notifying the Companies (Indian Accounting Standard) Rules, 2015.

These standalone financial statements for the year ended March 31, 2018 are approved by the Audit Committee and Board of Directors on May 04, 2018.

(b) Functional and presentation currency

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

(c) Basis of Measurement

These standalone financial statements have been prepared on an accrual basis and under the historical cost convention, except for the following assets and liabilities which have been measured at fair value:

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments, refer note 2.2(v))

(d) Critical accounting estimates and judgements

In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Information about significant areas of estimation and judgements in applying accounting policies that have the most significant effect on the standalone financial statements are as follows:

- Note 2.2 (p) (iii) and 31 - measurement of defined benefit obligations: key actuarial assumptions;

- Note 2.2 (b),(c), (d), 3 and Note 4 - measurement of useful life and residual values of property, plant and equipment and useful life of intangible assets;

- Note 35 - Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy;

- Note 2.2 (u) - judgement required to determine ESOP assumptions;

- Note 2.2 (p) - judgement required to determine probability of recognition of current tax, deferred tax assets and MAT credit entitlement; and

- Note 2.2 (v)- fair value measurement of financial instruments.

There are no assumptions and estimation that have a significant risk resulting in a material adjustment within the next financial year.

Note: Impairment testing of Goodwill:

The specified bank notes as defined under the notification issued by the Ministry of Finance, Department of Economic dated 8 November, 2016 are no longer in existence. Hence, the Company has not provided the corresponding disclosures as prescribed in Schedule III to the Companies Act, 2013. Disclosure made in the previous year financial statement is as below:

Note: For the purpose of this disclosure, the term âSpecified Bank Notesâ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8^th November, 2016.

b Terms and rights attached to equity shares

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

b. (i) Term loan from banks are secured by first pari passu charge over all movable and immovable fixed assets of the Company (excluding immovable properties at Gujarat, a flat at Bangalore, vehicles hypothecated to banks and assets taken on finance lease) and receivables of the Company both present and future.

(ii) Vehicle loans of Rs.50 lakhs (March 31, 2017: Rs.97 lakhs) carries interest @ 10.25% p.a. and is repayable in 60 monthly instalments. The loan is secured by hypothecation of vehicles purchased out of the proceeds of the loan.

(iii) Above loans are repayable in equal/ unequal monthly/ quarterly instalments as follows:

(iv) Term Loan from banks carries variable interest rate based on respective bank/ body corporate benchmark rate, effective rate of interest varying in between 8.70%p.a to 9.05% pa.

(vi) The Company has satisfied all material debt covenants.

Notes:

i. Bank overdraft is secured by first pari passu charge on all current assets of the Company including inventories and receivables both present and future. It carries variable interest rate based on respective banks/ body corporate benchmark rate, effective rate of interest varying in between 8.75% to 10.45% p.a.

ii. I n respect of Commercial Paper maximum amount outstanding during the year was Rs.11,500 lakhs (March 31, 2017 : Rs.11,000 lakhs) with a maturity period of 3 months.

iii. The Company had Rs.11,648 lakhs (March 31, 2017: Rs.4,477 lakhs) of undrawn committed borrowing facility available as at the year ended March 31, 2018.

3 Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service, in terms of Payment of Gratuity Act, 1972. The scheme is funded with two insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets. Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

As the plan assets include investments in quoted mutual funds, the Company has diversified the market risk.

The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The Company expects to contribute Rs.550 lakhs (March 31, 2017 Rs.445 lakhs) to gratuity fund in the financial year 2018-19. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

The estimates of future salary increases considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors, including supply and demand in the employment market.

The Company measures the cost of ESOP using the fair value method. The option has been granted on an exercise price of Rs.1,400. As a result, an expense of Rs.247 lakhs is recorded in financial statements in current year.

The Company measures the cost of ESOP using the fair value method. The option has been granted on an exercise price of Rs.1,400. As a result, an expense of Rs.58 lakhs is recorded in financial statements in current year of which Rs.10 lakhs is capitalised under Capital work-in progress and balance Rs.48 lakhs is debited in statement of profit and loss.

The Company measures the cost of ESOP using the fair value method. The option has been granted on an exercise price of Rs.200. As a result, an expense of â Nil lakhs (March 2017: â Nil) is recorded in the financial statements.

The Company measures the cost of ESOP using the fair value method. The option has been granted on an exercise price of Rs.200. As a result, an expense of â Nil lakhs (March 2017: Rs.5 lakhs) is recorded in these standalone financial statements.

4 Leases

i Rental expenses in respect of operating leases are recognised as an expense in the statement of profit and loss and capitalised under CWIP, as the case may be.

Operating Lease (for assets taken on lease)

Disclosure for assets taken under non-cancellable leases, where the Company is presently carrying commercial operations is as under, which reflects the outstanding amount for non-cancellable period:

ii Rental income/Sub-Lease income in respect of operating leases are recognised as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

iii Finance lease: Company as lessee

5 Capital & Other Commitments

(a) Capital Commitments

(b) Other Commitments

6 Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 02, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

7 The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law requires such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of international transactions with the associated enterprises during the financial year and expects such records to be in existence latest by the due date of filing the return of income. The management is of the opinion that its international transactions are at armâs length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

39 Corporate Social Responsibility

During the year, the Company has spent Rs.232 lakhs through its foundation PVR Nest & others. PVR Nest focuses on providing education, healthcare, nutrition and rehabilitation to children.

8 Disclosure required under Sec 186(4) of the Companies Act 2013

Full particulars of loans given, investment made, guarantee given, security provided together with purpose in terms of section 186(4) of the Companies Act, 2013

9 Fair Value

The carrying value & fair value of financial instruments by categories as of March 31, 2018 were as follows:

* Long-term fixed-rate and variable-rate receivables/deposit are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables/deposits.

9 Segment

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Chairman of the Company has been identified as being the chief operating decision maker to assess the financial performance and position of the Company and make strategic decisions. The Company is engaged primarily in the business theatrical exhibition and allied activities under the brand âPVRâ. Accordingly, In the context of Indian Accounting Standard 108 - Operating Segments, it is considered to constitute single reportable segment.

10 Business Combinations

(i) Amalgamation of Bijli Holdings Private Limited with PVR Limited

I n the previous year, pursuant to the scheme of amalgamation, approved by Honâble High Court of Delhi on September 15, 2016, between PVR Limited (the Company) and Bijli holdings Private Limited (BHPL), BHPL was merged with the Company from the appointed date i.e. January 01, 2016.

BHPL was forming part of the promoter group of the Company, which was holding 10,031,805 equity shares in the Company constituting 21.55% of the Companyâs paid-up equity share capital. Consequent upon amalgamation of BHPL with the Company, individual promoters of the Company, directly hold shares in the Company in the same proportion as they held through the erstwhile BHPL. The amalgamation has resulted in simplification of the shareholding structure and reduction of shareholding Tiers as well as demonstrates the promoterâs direct commitment to and engagement to the Company.

Pursuant to the above, BHPL stands merged with the Company following âPurchase Methodâ of accounting as per the Accounting standard 14 âAccounting for Amalgamationâ, issued by the Institute of Chartered Accountants of India, basis approved scheme by Honâble High Court of Delhi of Delhi.

Upon the scheme becoming effective, the authorised share capital of PVR shall automatically stand enhanced by the authorised share capital of BHPL.

Pursuant to the approved scheme, 10,031,805 fully paid up equity shares of the face value of Rs.10 each credited as fully paid up in the share capital of the Company to the members of BHPL in the ratio of their equity shareholding in BHPL. There was no change in the promoter shareholding of the Company, pursuant to this scheme. The promoter continues to hold the same percentage of shares in the Company, pre and immediately post the amalgamation of BHPL.

(ii) Amalgamation of Lettuce Entertain you Limited, PVR Leisure Limited with PVR Limited

In the previous year, pursuant to the scheme of amalgamation, approved by Honâble High Court of Delhi on January 04, 2017, between PVR Limited (the Company) and PVR Leisure Limited (PVR Leisure) and Lettuce Entertain you Limited (Lettuce), later Companies were amalgamated with the Company from the appointed date i.e. April 01, 2015. Lettuce and PVR Leisure are individually referred to as âAmalgamating Company and collectively referred to as âAmalgamating Companiesâ and PVR is referred to as âAmalgamated Companyâ for the purpose of this clause. Amalgamating Companies are subsidiaries of the Company and are engaged in similar/ related businesses. Through consolidation, the synergies that exist among the entities in terms of similar business processes and resources can be put to the best advantage of the stakeholders.

Pursuant to the above, Amalgamating Companies stands merged with the Company following âPurchase Methodâ of accounting as per the Accounting standard 14 âAccounting for Amalgamationâ, issued by the Institute of Chartered Accountants of India, basis approved scheme by Honâble High Court of Delhi. Upon the scheme becoming effective, the authorised share capital of PVR shall automatically stand enhanced by the authorised share capital of Amalgamating Companies.

Pursuant to the approved scheme, entire paid-up equity and non-cumulative convertible preference share capital of PVR Leisure as held by the Company directly, and the entire paid-up equity share capital of Lettuce held by the Company through PVR Leisure, upon the scheme becoming effective shall stand cancelled on the effective date and no shares of the Company shall be issued or allotted in consideration for amalgamation.

Had the Company was required to follow the Ind AS 103, âBusiness Combinationâ the entities under common control should have used âPooling of Interest methodâ, according to which, recognised capital reserve would had been Rs.468 lakhs as against Rs.545 lakhs recognised in books as per the approved order of Honâble High Court.

(iii)Acquisition of Cinema exhibition undertaking of DLF Utilities Limited

The Company during financial year ended March 31, 2017, acquired part of the Cinema exhibition undertaking of DLF Utilities Limited (operated under the brand name of âDT Cinemasâ) on a slump sale basis. The sale and transfer of the said Cinema exhibition undertaking, as a going concern was completed on May 31, 2016 and the same was accounted as per Ind AS 103, âBusiness combinationâ in financial year 2016-17.

Out of the total consideration payable to DLF Utilities Limited as mentioned above, Rs.10,000 lakhs are payable on obtaining two separate regulatory approvals, Rs.5,000 lakhs payable on obtaining each approval. Company during the last year had received one such approval and had paid Rs.5,000 lakhs accordingly and balance Rs.5,000 lakhs had been paid on receipt of second approval during the year ended March 31, 2018.

11 Financial risk Management objective and policies

(a) Market Risk

(i) Interest rate risk

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Interest Rate sensitivity

(ii) Currency risk

Currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates.

(b) Legal, taxation and Accounting risk

The Company is presently involved into various judicial, administrative, regulatory and litigation proceedings concerning matters arising in the ordinary course of business operations including but not limited to personal injury claims, landlord-tenant disputes, commercials disputes, tax disputes(including entertainment tax subsidy and other direct and indirect tax matters like GST, Service tax, Sales tax etc.), employment disputes and other contractual disputes. Many of these proceedings seek an indeterminate amount of damages. In situations where management believes that a loss arising from a proceeding is probable and can reasonably be estimated, PVR records the amount of the probable loss. As additional information becomes available, any potential liability related to these proceedings is assessed and the estimates are revised, if necessary.

To mitigate these risks, the Company employs in-house counsel and uses third party tax & legal experts to assist in structuring significant transactions and contracts. PVR also has systems and controls that ensure the timely delivery of financial information in order to meet contractual and regulatory requirements and has implemented disclosure controls and Internal controls over financial reporting which are tested for effectiveness on an ongoing basis.

(c) Credit Risk

The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the Standalone Balance Sheet

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Other financial assets primarily represents security deposits given to Mall Developers. Such deposit will be returned to the Company on expiry of lease entered with Mall Developer. The credit risk associated with such security deposits is relatively low.

(d) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Companyâs approach to manage liquidity is to have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Companyâs reputation.

The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, finance leases and advance payment terms.

The Companyâs liquidity management process as monitored by management, includes the following:

- Day to Day funding, managed by monitoring future cash flows to ensure that requirements can be met.

The Company has also significant contractual obligations in the form of operating lease (Note no. 32(i)) and capital & other commitments (Note No.33).

12 Capital Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long term debts plus amount payable for purchase of fixed assets divided by total equity.

13 The Board of Directors has recommended final dividend of 20% (Rs.2 per fully paid up equity share of Rs.10 each) for the year ended March 31, 2018 in the Board meeting dated May 04, 2018, which is subject to the approval of shareholders at the ensuing Annual General meeting of the Company.

14 Expenses capitalised

15 During the year ended March 31, 2018, the Company has sold its stake in one of its subsidiary Companies âPVR BluO Entertainment Limited (âInvestmentâ)â to âSmaaash Entertainment Private Limitedâ for a total consideration of Rs.8,600 lakhs, the details of which are as follows:

16 Under the erstwhile state entertainment tax laws, the Company enjoyed exemption on payment of entertainment tax to recoup the capital investments made in cinemas. However, post implementation of GST, the mechanism on how such exemptions / refunds will be made available has not been clarified by the authorities. The Company has submitted written representations to the various state governments directly and through multiplex associations, stating that since the Company has invested significant amounts on assurance that such exemptions will continue post GST, therefore, the authorities should crystalise the mechanism for extending such exemptions /refunds to the Company. As the matter is still pending for conclusion with various state authorities, the Company has not accounted for such incentives amounting to Rs.1,032 lakhs from the period July 01, 2017 to March 31, 2018 in the financial statements.

17 Previous year financial statements for the year March 31, 2017 were audited by another firm of Chartered Accountants.

Mar 31, 2017

1. Corporate information

PVR Limited (âthe Companyâ) is a public limited Company with domiciled in India and incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on leading stock exchanges in India. The registered office of the Company is located at â61, Basant lok, Vasant Vihar, New Delhi, India - 110057â.

The Company is in the business of films exhibition & production and operates largest theatre circuit in India. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages and restaurant business.

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

For all the period up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017 are the first financial statements of the Company prepared in accordance with Ind AS. Refer to note 29 for detailed information on adoption of Ind AS.

The financial statements have been prepared on an accrual basis and under the historical cost convention, except for the following assets and liabilities which have been measured at fair value:

Certain financial assets and liabilities measured at fair value {refer accounting policy regarding financial instruments, refer note 2.2 (n)}

3. FIRST-TIME ADOPTION OF IND AS

These are Companyâs first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 01, 2015 (transition date). In preparing its opening Ind AS balance sheet, the Company has adjusted the amount reported previously in financial statements prepared in accordance with IGAAP.

3.1 exemptions availed and applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

- Ind AS 103 Business combinations: The Company has elected to apply Ind AS 103 prospectively to business combinations done after its transition date. Business combinations made prior to the transition date have not been restated;

- Deemed cost: Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the IGAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible assets. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets at their IGAAP carrying value;

- Ind AS 27 requires investments in subsidiaries, joint ventures and associates to be recorded at cost or in accordance with Ind AS 109 in its separate financial statements. The Company has availed the above exemption and recognized the investment in subsidiaries at the IGAAP carrying amount at the date of transition to Ind AS; and

- Ind AS 102 requires share based payments to be measured at fair value. However Ind AS 101 provides an exemption on application of Ind AS 102 Share-based payment to equity instruments that vested before date of transition to Ind AS. Accordingly, Company has availed this exemption and measured the unvested options at fair value. The excess of share compensation expenses measured using fair value over the cost recognized under IGAAP using Intrinsic value has been adjusted in âEmployee stock option outstanding reserveâ with the corresponding impact taken to the retained earnings as on the transition date.

3.2 RECONCILIATION:

The following reconciliations provide the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101:

Explanations for reconciliation of Balance sheet as previously reported under IGAAP to Ind AS:

A. Goodwill Amortization:

Adjustment includes reversal of Goodwill amortization amounting to Rs. 1,008 lakhs, as under Ind AS Goodwill is tested for impairment.

B. Deferred tax Assets (DTA):

Adjustment includes creation of DTA amounting to Rs. 2,893 lakhs on business losses & unabsorbed depreciation on account of reasonable certainty and other temporary differences arising out of Ind AS.

C. Other financial assets:

Security deposit paid to Mall Developers discounted and recorded at Present value.

D. Other non-current assets:

- Acquisition-related costs have been expensed off under âexceptional itemâ in accordance with Ind AS 103 âBusiness combinationâ amounting to Rs. 490 lakhs for the year ended March 31, 2016.

- Security deposit paid to Mall Developers discounted and deferred rent portion classified under other current assets.

E. Other Equity:

a) Adjustments to retained earnings and other comprehensive Income have been made in accordance with Ind AS for the above mentioned lines.

b) In addition, as per Ind AS19, actuarial gains and losses are recognized in other comprehensive Income as compared to being recognized in the statement of Profit & loss under IGAAP.

F. Provision:

Adjustments reflects dividend (including corporate dividend tax), declared and approved post reporting period amounting to Rs. 1,123 lakhs for March 2016 and Rs. 500 lakhs for March 2015.

The previous GAAP figures have been reclassified to confirm to Ind-AS presentation requirement for this note.

Explanations for reconciliation of statement of Profit & loss as previously reported under IGAAP to Ind AS:

G. Employee Benefit Expenses:

(a) As per Ind AS 19, âEmployee benefitsâ, actuarial gains and losses are recognized in other comprehensive Income and not reclassified to profit and loss in subsequent period amounting to Rs. 20 lakhs net of tax; and

(b) The excess of share compensation expenses measured using fair value over the cost recognized under IGAAP using Intrinsic value has been adjusted in âEmployee stock option outstanding reserveâ with the corresponding impact taken to statement of profit and loss amounting to Rs. 33 lakhs.

H. Current Tax:

The tax component on actuarial gains and losses which are transferred to other comprehensive income under Ind AS.

I. government grant:

As per Ind AS 20, Government grant has been reclassified to Other Income amounting to Rs. 2,718 lakhs.

3.3 CASH FLOW STATEMENT

There was no significant reconciliation items between cash flow prepared under IGAAP and those prepared under Ind AS.

4. GRATUITY PLAN:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service, in terms of Payment of Gratuity Act, 1972. The scheme is funded with two insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets. Each year, the Board of Trustees reviews the level of funding in the gratuity plan. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

As the plan assets include investments in quoted mutual funds, the Company has diversified the market risk.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

5. EMPLOYEE STOCK OPTION PLANS

The Company has provided stock option scheme to its employees. During the year 2016-17, the following schemes were in operation:

6. LEASES

i. Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre-operative expenditure (pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

Disclosure for assets taken under non-cancellable leases, where the Company is presently carrying commercial operations is as under, which reflects the outstanding amount for non-cancellable period:

ii. Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

The Company has given spaces of cinemas/ food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The Company has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

iii. Finance lease: Company as lessee

7. CAPITAL & OTHER COMMITMENTS

(a) Capital Commitments

(b) Other Commitments

The Company is availing Entertainment tax exemptions in some states, in respect of certain Multiplexes as per the State Government schemes and is under obligation to operate respective Multiplexes for a certain number of years.

8. DETAILS OF DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES AS PER MSMED ACT, 2006

9. CORPORATE SOCIAL RESPONSIBILITY:

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, care for destitute women and rehabilitation of under privileged person, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the company as per the Act.

During the year, the Company has spent Rs. 185 lakhs through its foundation PVR Nest & others. PVR Nest focuses on providing education, healthcare, nutrition and rehabilitation to children.

10. DISCLOSURE REQUIRED UNDER SEC 186(4) OF THE COMPANIES ACT 2013

Included in loans and advance are certain inter corporate deposits the particulars of which are disclosed below as required by Sec 186(4) of Companies Act 2013:

11. SIGNIFICANT INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

These financial statement are separate financial statements prepared in accordance with Ind AS-27 âSeparate Financial Statementsâ. The Company has following investment in subsidiaries as at March 31, 2017

12. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future year/periods.

(i) Estimates and assumptions:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(ii) Defined benefit plans (gratuity benefits):

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans, the management considers the interest rates of government bonds.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in Note 30.

(iii) Taxation:

In preparing financial statements, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. The uncertain tax positions are measured at the amount expected to be paid to taxation authorities when the Company determines that the probable outflow of economic resources will occur. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

(iv) provisions and contingencies:

The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable Ind AS.

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows.

The Company has significant capital commitments in relation to various capital projects which are not recognized on the balance sheet. In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Guarantees are also provided in the normal course of business. There are certain obligations which management has concluded, based on all available facts and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial statements.

(v) Fair value measurement of financial instruments:

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer note 42 for such measurement.

(vi) Intangible asset under development

The Company capitalises intangible asset under development for a project in accordance with the accounting policy. Initial capitalisation of costs is based on managementâs judgement that technological and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the project, discount rates to be applied and the expected period of benefits.

13. FAIR VALUE

The carrying value and fair value of financial instruments by categories as of March 31, 2017 were as follows:

- The fair values of the quoted notes and bonds are based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under finance leases, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

14. SEGMENT INFORMATION

Operating Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Ind AS - 108 on Segment Reporting.

15. BUSINESS COMBINATIONS

(i) Amalgamation of Bijli Holdings private Limited with PVR Limited

Pursuant to the scheme of amalgamation, approved by Honâble High Court of Delhi on September 15, 2016, between PVR Limited (the Company) and Bijli holdings Private Limited (BHPL), BHPL was merged with the Company from the appointed date i.e. January 01, 2016.

BHPL was forming part of the promoter group of the Company, which was holding 10,031,805 equity shares in the Companyâs paid-up equity share capital. Consequent upon amalgamation of BHPL with the Company, individual promoters of the Company, directly hold shares in the Company in the same proportion as they held through the erstwhile BHPL. The amalgamation has resulted in simplification of the shareholding structure and reduction of shareholding tiers as well as demonstrates the promoterâs direct commitment to and engagement to the Company.

Upon the scheme becoming effective, the authorised share capital of PVR shall automatically stand enhanced by the authorised share capital of BHPL.

Pursuant to the approved scheme, 10,031,805 fully paid up equity shares of the face value of Rs. 10 each credited as fully paid up in the share capital of the Company to the members of BHPL in the ratio of their equity shareholding in BHPL. There was no change in the promoter shareholding of the Company, pursuant to this scheme. The promoter continues to hold the same percentage of shares in the Company, pre and immediately post the amalgamation of BHPL.

Had the above merger would have been accounted for, following Ind-AS 103 Business Combination; there would not be having any difference in the above transaction.

(ii) Amalgamation of Lettuce Entertain you Limited, PVR Leisure Limited with PVR Limited

Pursuant to the scheme of amalgamation, approved by Honâble High Court of Delhi on January 04, 2017, between PVR Limited (the Company) and PVR Leisure Limited (PVR Leisure) and Lettuce Entertain you Limited (Lettuce), later Companies were amalgamated with the Company from the appointed date i.e. April 01, 2015. Lettuce and PVR Leisure are individually referred to as âAmalgamating Company and collectively referred to as âAmalgamating Companiesâ and PVR is referred to as âAmalgamated Companyâ for the purpose of this clause.

Amalgamating Companies are subsidiaries of the Company and are engaged in similar/related businesses. Through consolidation, the synergies that exist among the entities in terms of similar business processes and resources can be put to the best advantage of the stakeholders.

Upon the scheme becoming effective, the authorised share capital of PVR shall automatically stand enhanced by the authorised share capital of Amalgamating Companies.

Had the Company was required to follow the Ind AS 103, âBusiness Combinationâ the entities under common control should have used âPooling of Interest methodâ, according to which, recognized capital reserve would had been Rs.468 lakhs as against Rs. 545 lakhs recognized in books as per the approved order of Honâble High Court of Delhi.

Post-merger, PVR BluO Entertainment Limited has become direct subsidiary of the Company.

(iii) Acquisition of Cinema exhibition undertaking of DLF utilities Limited

The Company during the year, acquired part of the Cinema exhibition undertaking of DLF Utilities Limited (operated under the brand name of âDT Cinemasâ) on a slump sale basis. Last year, in connection with this, Company had deposited Rs. 5,000 lakhs in an Escrow account .The sale and transfer of the said Cinema exhibition undertaking, as a going concern has been completed on May 31, 2016 and the same has been accounted as per Ind AS 103, âBusiness combinationâ.

Out of the total consideration payable to DLF Utilities Limited as mentioned above, Rs. 10,000 lakhs are payable on obtaining two separate regulatory approvals, Rs. 5,000 lakhs payable on obtaining each approval. The management at the time of acquisition has assessed that it shall obtain all the approvals shortly and thus no adjustment in this regard are made. Company during the year has received one such approval and has paid Rs. 5,000 lakhs accordingly and is confident of receiving the other approval.

16. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company is exposed to Market risk, credit risk, Legal, taxation and Accounting risk and liquidity risk. Companyâs Treasury teams overseas the management of these risks supported by senior management.

(a) Market Risk:

(i) Interest rate risk

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Interest Rate sensitivity:

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

(ii) Currency risk

Currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates.

(b) Legal, taxation and Accounting risk:

Change to any of the above laws, rules, regulations related to PVR Business could have a material impact on its financial results. Compliance with any proposed changes could also result in significant cost of PVR. Failure to fully comply with various laws, rules and regulations may expose PVR to proceedings which may materially affect its performance.

PVR is presently involved into various judicial, administrative, regulatory and litigation proceedings concerning matters arising in the ordinary course of business operations including but not limited to landlord-tenant disputes, tax disputes(including entertainment tax subsidy and other direct and indirect tax matters like Service tax, Sales tax etc.), and other contractual disputes. Many of these proceedings seek an indeterminate amount of damages. In situations where management believes that a loss arising from a proceeding is probable and can reasonably be estimated, PVR records the amount of the probable loss. As additional information becomes available, any potential liability related to these proceedings is assessed and the estimates are revised, if necessary.

To mitigate these risks, PVR employs in-house counsel and uses third party tax and legal experts to assist in structuring significant transactions and contracts. PVR also has systems and controls that ensure the timely delivery of financial information in order to meet contractual and regulatory requirements and has implemented disclosure controls and Internal controls over financial reporting which are tested for effectiveness on an ongoing basis.

(c) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligation. Management believes the credit risk on cash and cash equivalents is low because the counterparties are banks with high credit ratings.

Trade receivables are amount billed to customers for the sale of goods and services, and represent the maximum exposure to credit risk of those financial assets, exclusive of the allowance for doubtful debts. Normal credit terms for amounts due from customers is within 0-90 days which is in line with Industry practice.

The Company does not require collateral or other security from customers; however, credit evaluations are performed prior to the initial granting of credit when warranted and periodically thereafter. Based on policy, the Company records a reserve for estimated uncollectible amounts, which management believes reduce credit risk. Management assesses the adequacy of reserve quarterly, taking into account historical experience, current collection trend, the age of the receivables and, when warranted and available, the financial condition of specific counterparties.

Due to diversified client base, management believes the Company does not have a significant concentration of credit risk.

(d) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities. The Company monitors its risk of a shortage of funds using a liquidity planning tool.

The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, finance leases and advance payment terms.

17. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is long term debts plus amount payable for purchase of fixed assets divided by total equity.

18. During the year on August 09, 2016, Company has incorporated a new subsidiary âP V R Lanka Limitedâ in Democratic Socialist Republic of Sri Lanka. Subsequent to the year end on May 18, 2017, the Company has invested a sum of USD 59,993, to subscribe 91,249 numbers of shares of LKR 100 each.

19. The Board of Directors has recommended final dividend of 20% (Rs. 2 per fully paid up equity share of Rs 10 each) for the year ended March 31, 2017, subject to the approval of shareholders at the ensuing Annual General meeting of the Company.

20. EXPENSES CAPITALIZED DURING THE YEAR

The Company has incurred following expenses as pre-operative expenses through Capital work-in-progress.

21. During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R 308 (E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNâs and other notes as per the notification is given below:

22. The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs, where one lakh is equal to one hundred thousand.

Mar 31, 2016

A. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

All Debentures are secured by mortgage on immovable properties (excluding immovable properties at Gujarat, Bangalore) ranking pari passu and secured by first pari passu charge on movable fixed assets of the Company (excluding vehicles hypothecated to banks) and all receivables of the Company both present and future.

b. (i) Term loan from banks and body corporate are secured by first pari passu charge over all fixed assets of the Company (excluding immovable properties at Gujarat, Bangalore and vehicles hypothecated to banks) and receivables of the Company both present and future.

(ii) Car loans of Rs. 140 lakhs (March 31, 2015: Rs. 178 lakhs) carries interest @ 10.25% p.a. and is repayable in 60 monthly installments. The loan is secured by hypothecation of vehicles purchased out of the proceeds of the loan.

(iv) Term Loan from banks and body corporate carries variable interest rate based on respective bank/ body corporate benchmark rate, effective rate of interest varying in between 9.95% p.a to 10.75% p.a.

(v) Finance lease obligation is secured by hypothecation of plant and machinery taken on lease. The interest rate implicit in the lease is varying in between 11.74% p.a. to 13.99% p.a. The payment is scheduled in 28 equal quaterly installments from the start of lease agreements.

1. GRATUITY PLAN:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service, in terms of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

2. LEASES

Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre-operative expenditure (pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

Disclosure for assets taken under non-cancellable leases, where the Company is presently carrying commercial operations is as under, which reflects the outstanding amount for non-cancellable period:

ii. Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

3. DETAILS OF DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES AS PER MSMED ACT, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 02, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the Act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

4. The Company has applied to the Ministry of Corporate Affairs for their approval for waiver of excess Remuneration of Rs. 235.64 lakhs and Rs.135.74 lakhs paid to its Managing Director and Joint Managing Director respectively for financial year 2014-15. The approval of Central Government is awaited.

5. SEGMENT INFORMATION

Business Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Accounting Standard - 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

6. The Board of Directors of the Company had approved the merger of PVR Leisure Limited and Lettuce Entertain you limited with the Company effective from April 01, 2015. Since PVR Leisure Limited & Lettuce Entertain You Limited are wholly owned subsidiaries of PVR Limited, therefore on their merger, no shares of PVR Limited will be issued. The Hon''ble Delhi High Court has fixed July 19, 2016 as final date of hearing for the merger of above mentioned Companies with PVR Limited.

7. On April 15, 2015 the company has invested in equity share capital of Zea Maize Private Limited for a sum of Rs. 500 lakhs. Post investment in Zea Maize (P) Ltd. (a company engaged in gourmet popcorn business), has become a subsidiary of PVR Limited.

8. The Board of directors in the meeting held on September 04, 2015 approved the Scheme of Amalgamation to merge Bijli Holdings Private Limited ("BHPL") with PVR Limited ("Company"), effective from January 01, 2016. Post proposed amalgamation of BHPL with Company; the Equity Shares of PVR Limited held by BHPL shall be held directly by members of BHPL. The Hon''ble High Court of Delhi has fixed August 04, 2016 as the final date of hearing.

9. On June 09, 2015, the Company has entered into definitive agreements with DLF Utilities Limited for purchase of its cinema business on slump sale basis, which was subject to Competition Commission of India (CCI) approval. The Company has received CCI order u/s 31 (7) of the Competition Act, 2002 on May 04, 2016, whereby the CCI has approved the proposed combination with DLF Utilities Limited in relation to acquisition of DT Cinemas, with certain modifications, which inter alia exclude DT Savitri (1 screen) and DT Saket (6 screens) from the proposed combination. The management is in process of closing the revised agreement with DLF utilities Limited which would be closed as per the terms of the agreement by May 31, 2016. As per the terms of definite agreement, the Company had deposited Rs. 5,000 lakhs in an Escrow account.

10. (a) Previous year''s figures have been re-grouped/ re-arranged where necessary to confirm to current year''s classification.

(b) The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs.

Mar 31, 2015

1. Corporate information

PVR Limited (the Company) is a public limited company with domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on leading stock exchanges in India. The Company is in the business of exhibition and production of films. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages at cinema location.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 1 33 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. As at March 31,2015, 693,878 (March 31,2014, 693,878) equity shares issued on preferential basis during F.Y. 2012-13 are under lock in till January 1 1,2016.

b. (i) Term loan from banks and body corporate are secured by first pari passu charge over all fixed assets of the Company (excluding immovable properties at Gujarat, Bangalore and vehicles hypothecated to banks) and receivables of the Company both present and future.

(ii) Term loan from banks and body corporate are also guaranteed by the personal guarantee of two of its promoter directors of the Company to the extent of Nil(March 31,2014: Rs 93 lakhs).

(iii) Car loans of Rs. 178 lakhs (March 31,2014: Rs. 213 lakhs ) carries interest @ 10.25% p.a. and is repayable in 60 monthly instalments. The loan is secured by hypothecation of vehicles purchased out of the proceeds of the loan.

c. As at and for the year ended March 31,2015, the Company has not been able to meet certain financial covenants in respects of its borrowings from Banks and Debenture holders. The Company is in the process of applying the waiver to respective lenders and is hopeful of securing the same. In view of above, no adjustment is considered necessary by the management.

d. The asset of Rs. 4,837 lakhs (March 31, 2014 : Rs. 4,496 lakhs) recognized by the Company as 'MAT credit entitlement' represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 1 1 5JAA of the Income Tax Act, 1961. The management, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

4. Composite Scheme of Amalgamation between the Company, Cine Hospitality Private Limited (CHPL) and along with Cinemax India Limited (CIL) & its subsidiaries in accordance with section 391-394 of The Companies Act, 1956

During the previous year ended March 31,2014, pursuant to the scheme of arrangement, approved by Hon'ble High Court of Delhi on February 12, 2014, in between PVR Limited (the Company) and Cinemax India Limited (CIL) along with its subsidiaries viz. Vista Entertainment Limited, Growel Entertainment Limited, Nikmo Entertainment Limited, Odeon Shrine Multiplex Limited and Cinemax Motion Pictures Limited which were in the business of running multiplexes and Cine Hospitality Private Limited (CHPL) which was the Holding Company of CIL and wholly owned subsidiary of the Company. CIL along with its subsidiaries and CHPL were amalgamated with the Company from the appointed date i.e. April 1,2013

Pursuant to the above, CHPL stands merged with the Company following "Purchase Method" of accounting as per the Accounting standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. All the assets and liabilities of CHPL were fair valued, the difference in the value of net assets merged (Rs. 27,026 lakhs) and value of investment (Rs.37,101 lakhs) in CHPL has been treated as goodwill amounting to Rs. 10,075 lakhs, Goodwill has been amortised in books over a period of 10 years on straight line method basis during the previous year.

Further to above, CIL along with its subsidiaries stands merged with the Company following "Pooling of Interest Method" and accordingly, all the assets, liabilities and debts including reserves of CIL & its subsidiaries have been recorded at their respective book values as on the appointed date as per the Accounting standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. The difference between the value of net assets acquired (Rs. 1 3,748 lakhs) and fair value of investment in CIL of Rs. 30,532 lakhs was adjusted/added with securities premium account/ Surplus of statement of Profit & Loss. Accordingly, Rs. 36,921 lakhs have been adjusted with Securities premium account and Rs. 6389 lakhs has been added to surplus of statement of Profit & Loss during the previous year.

Further, the Company had issued 10,90,283 equity shares in the swap ratio of 4 equity shares of PVR Limited of Rs. 10 each against each 7 equity shares of Rs. 5 each of CIL to erstwhile shareholders of CIL in accordance with the Scheme during the previous year.

5. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @ 1 5 days last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

6. Leases

i. Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre- operative expenditure (pending allocation), as the case may be.

(ii) Other Commitments

As per the incentive scheme of some State Governments for exemption from payment of entertainment tax, the Company is under obligation to operate the respective Multiplexes for a certain number of years.

7. Contingent Liabilities (not provided for) in respect of:

(Rs. in lakhs)

Particulars March 31, March 31, 2015 2014 a) Appeals filed by the Company with Commissioner of Income Tax 2,224 2,110 (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31,2012, 2011,2010, 2009, 2008, 2007, 2006 respectively. (the Company has paid an amount of Rs. 890 lakhs which is appearing in the Schedule of Loans and Advances)

b) Possible demand on account of entertainment tax exemption treated 3,444 3,653 as capital subsidy for assessment year 2012-13 to 2014-15 on the grounds of ongoing assessments

c) Show cause notices raised by Service tax Commissionerate, 2,110 539 New Delhi for non-levy of Service tax on invoices. (the company has already deposited under protest an amount of Rs. 100 lakhs which is appearing under loan and advances)

d) Possible exposure of Service tax on sale of food and beverages for 1,614 - financial year 2014-15

e) Notice u/s 271 C of the Income Tax Act, 1961 issued by JCIT (TDS). 115 115 CIT(A) has decided the matter in favour of the Company. Matter is Pending before ITAT.

f) Demand of Sales tax under Various State VAT Acts where appeal is 225 332 pending before competent authority (the Company has paid an amount of Rs. 77 lakhs under protest)

g) Demand of entertainment tax under Assam Amusement and 334 334 Betting tax Act, 1939 where appeal is pending before High Court

h) Appeal filed by CR Retails Malls (India) Ltd., against the order of - 91 Chief Controlling Revenue Authority, Pune against the demand of deficit stamp duty indemnified by the company.

i) Notice from Entertainment Tax department Chennai against short 43 43 deposit of Entertainment tax on regional movies

j) Notice from Commercial Tax department, Indore against alleged 823 823 collection of Entertainment tax during exemption period

k) Claims against the Company not acknowledged as debts 553 255

l) Amount involved/ exposure in respect of matter under litigation with 364 364 various parties including developers

m) Labour cases pending * Amount not Amount not ascertainable ascertainable

*In view of the several number of cases, pending at various forums/courts, it is not practicable to furnish the details of each case, however, as per estimate of management, the amount in aggregate is not material. Based on the discussions with the solicitors, the management believes that the Company has strong chances of success in the cases and hence no provision is considered necessary.

8. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 02, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

9. The Company has applied to the Ministry of Corporate Affairs for approval of the Remuneration paid as minimum remuneration to its Managing Director and Joint Managing Director for financial year 2014-15. The approval of Central Government is awaited.

10. The Board of directors has approved the merger of PVR Leisure Limited and Lettuce Entertain You Limited, (subsidiary company of PVR Leisure Limited) with PVR Limited which is subject to the approvals of the shareholders of the Company. The scheme in relation to the merger shall be finalised in due course and shall be approved by the constituted committee. Pending approval of the scheme at various levels. No adjustment is required to be done at this stage.

11. Segment Information

Business Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Accounting Standard - 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

12. Related Party Disclosure

Names of related parties and related party relationship

(a) Related parties where control exists

Subsidiaries PVR Pictures Limited PVR Leisure Limited

PVR bluO Entertainment Limited Lettuce Entertain You Limited

(b) Related parties with whom transactions have taken place during the year

Key Management Personnel

Ajay Bijli, Chairman cum Managing Director Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Personnel

Mrs. Salena Bijli, Wife of Mr Ajay Bijli Mrs. Sandhuro Rani, Mother of Mr Ajay Bijli

Enterprises having significant influence over the Company

Bijli Holding Private Limited

Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

PVR Nest

Priya Exhibitors Private Limited

13. (a) Previous year's figures have been re-grouped/ re-arranged where necessary to confirm to current year's classification. (b) The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs.

Mar 31, 2014

Corporate information

PVR Limited (the Company) is a public limited company with domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on leading stock exchanges in India. The Company is in the business of exhibition and production of films. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages at cinema location.

Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, I956 read with General Circular 8/20I4 dated April 04, 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. Composite Scheme of Amalgamation between the Company, Cine Hospitality Private Limited (CHPL) and along with Cinemax India Limited (CIL) & its subsidiaries in accordance with section 391-394 of The Companies Act, 1956

Pursuant to the scheme approved by Hon''ble High Court of Delhi on February I2, 20I4, in between PVR Limited (the Company) and Cinemax India Limited (CIL)along with its subsidiaries viz. Vista Entertainment Limited, Growel Entertainment Limited, Nikmo Entertainment Limited, Odeon Shrine Multiplex Limited and Cinemax Motion Pictures Limited which are in the business of running multiplexes and Cine Hospitality Private Limited (CHPL) which was the Holding Company of CIL and wholly owned subsidiary of the Company. CIL along with its subsidiaries and CHPL were amalgamated with the Company from the appointed date i.e. April 1, 2013

Pursuant to the above, CHPL stands merged with the Company following "Purchase Method" of accounting as per the Accounting Standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. All the assets and liabilities of CHPL were fair valued, the difference in the value of net assets merged (Rs. 27,026 lakhs) and value of investment (Rs.37,101 lakhs) in CHPL has been treated as goodwill amounting to Rs. 10,075 lakhs, Goodwill has been amortised in books over a period of 10 years on straight line method basis.

Further to above, CIL along with its subsidiaries stands merged with the Company following "Pooling of Interest Method" and accordingly, all the assets, liabilities and debts including reserves of CIL & its subsidiaries have been recorded at their respective book values as on the appointed date as per the Accounting Standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. The difference between the value of net assets acquired (Rs. 13,748 lakhs) and fair value of investment in CIL of Rs. 30,532 lakhs was adjusted/added with securities premium account/ Surplus of statement of Profit & Loss. Accordingly, Rs. 36,921 lakhs have been adjusted with Securities premium account and Rs. 6389 lakhs has been added to surplus of statement of Profit & Loss.

Further, the Company has issued 10,90,283 equity shares in the swap ratio of 4 equity shares of PVR Limited of Rs. 10 each against 7 equity shares of Rs. 5 each of CIL to erstwhile shareholders of CIL in accordance with the Scheme.

2. Contingent Liabilities (not provided for) in respect of:

(Amount in lakhs)

Particulars March 31,2014 March 31,2013

a) Appeals filed by the Company with 2,110 1,478 Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2010, 2009, 2008, 2007, 2006 respectively. (the Company has paid an amount of Rs. 890 lakhs which is appearing in the Schedule of Loans and Advances)

b) Possible demand on account of 3,653 2,154 entertainment tax exemption treated as capital subsidy for assessment year 2012-13 to 2014-15 on the grounds of ongoing assessments

c) Show cause notices raised by Service 539 539 tax Commissionerate, New Delhi for non-levy of Service tax on invoices. (the company has already paid an amount of Rs. 85 lakhs which is appearing under loan and advances)

d) Notice u/s 27IC of the Income Tax 115 115 Act, 1961 issued by JCIT (TDS). CIT(A) has decided the matter in favour of the Company. Matter is Pending before ITAT.

e) Demand of Sales tax under Various State Vat Act where appeal is pending before competent authority (the Company has paid an amount of Rs. 41 lakhs under protest) 332 -

f) Demand of entertainment tax under Assam Amusement and Betting tax Act, 1939 where appeal is pending before High Court 334 -

g) Appeal filed by CR Retails Malls ( India) Ltd., against the order of Chief Controlling Revenue Authority, Pune against the demand of deficit stamp duty indemnified by the company. 91 91

h) Notice from Entertainment Tax department Chennai regarding short deposit of E tax on regional movies 43 43

i) Notice from Commercial Tax department, Indore regarding alleged collection of Entertainment tax during exemption period 823 823

j) Claims against the Company not acknowledged as debts 255 32

k) Labour cases pending * Amount not Amount not ascertainable ascertainable

*In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case, however, as per estimate of management, the amount in aggregate is not material. Based on the discussions with the solicitors the management believes that the Company has a strong chance of success in the cases and hence no provision is considered necessary.

3. During the year, the Company has executed the sale deed of Anupam Cinema Property, Located at New Delhi, for a consideration of Rs. 5200 lakhs during the year. As a result the Company has earned a profit of Rs. 1915 lakhs. The profit on the aforesaid sale has been considered as exceptional item in the statement of profit and loss in the current year.

4. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 2, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

5. Segment Information

Business Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Accounting Standard - I7 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

6. (a) Previous year''s figures have been re-grouped/ re-arranged where necessary to confirm to current year''s classification.

(b) The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs.

(c) The current year financial statement includes the impact of scheme of amalgamation as stated in note 29. Therefore, the figures of previous year are strictly not comparable to current year figures.

Mar 31, 2013

1. Corporate information

PVR Limited (the Company) is a public limited company with domiciled in India and incorporated under the provisions of the Companies Act, I956. Its shares are listed on leading stock exchanges in India. The Company is in the business of exhibition and production of films. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages at cinema location.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, I956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service in terms of payment of Gratuity Act, 1972 without any maximum limit. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

4. In respect of service tax on immovable properties matter where Special Leave Petition (SLP) is pending before the Honorable Supreme Court an amount of Rs. I4I,624,348 (net of CENVAT) for the period upto March 3I, 20II has been shown as an Exceptional item in the financial statement in the previous year ended March 3I, 20I2.

5. Scheme of arrangement for Demerger of Production Business of one of the subsidiaries PVR Pictures Limited

i. During the previous year ended March 3I, 20I2, Pursuant to the Composite Scheme of Arrangement (''Scheme'') filed by PVR Limited (the transferee Company) and PVR Pictures Limited (the transferor Company), under the provisions of the Companies Act, I956 and as approved by the shareholders, and sanctioned by the Honorable High Court of Delhi on February 02, 20I2, the production business undertaking of the transferor Company (non listed) was transferred to and vested in the transferee Company with effect from April 0I, 20II (the appointed date). The Company has made necessary filing with the Registrar of Companies, NCT of Delhi and Haryana on February 29, 20I2 being the effective date. The Scheme provides that all the assets and liabilities pertaining to production business undertaking in the books of transferor Company as on appointed date shall be transferred to and vested in the transferee Company pursuant to this scheme and recorded by the transferee Company. Accordingly, the scheme has been given effect in the financial statements of previous year ended March 3I, 20I2.

ii. The approved Scheme further provides that from the effective date, such of the assets and liabilities covered under the Scheme and as the Board of Directors consider relevant and appropriate after considering corresponding deferred tax adjustments and proportionate reduction in value of investments in subsidiary, shall be adjusted to their fair values, and the corresponding adjustment out of above shall be set off against specified reserves (including Securities Premium account). Accordingly the Company had written down the value of such assets by Rs. 493,783,033 and set off the same against reserves as per Scheme during the previous year ended March 31, 2012.

6. Pursuant to Share Purchase Agreement inter-alia with L Capital Eco Limited, the Company has transferred 151,87,245 equity shares held by it in PVR bluO Entertainment Limited to PVR Leisure Limited, a subsidiary of the Company for a sum of Rs. 329,978,340 on 28th December, 2012. As a result the Company has earned a profit of Rs. 33,293,650 in the current year. Also during the previous year ended March 31, 2012, the Company had sold its investment in the shares of its subsidiary company CR Retail Mall (India) Ltd and had earned a profit of Rs 168,564,053. The profit on the above sales has been considered as exceptional item in the statement of profit and loss in the respective years.

7. During the previous year ended March 31, 2012, the Company has on July 05, 2011 purchased 40% share capital of PVR Pictures Limited from JP Morgan Mauritius Holdings IV Limited and ICICI Venture Funds Management Company Limited. Subsequent to the above purchase, PVR Pictures Ltd. had become a wholly owned subsidiary of the Company.

8. Segment Information Business Segments:

The Company is engaged in the business of film production as well as exhibition. However considering the proportion of revenues, profits and assets of production business to the total revenues, profits and assets of the combined operations, the Company does not consider the production business as a separately identifiable reportable segment and hence no separate disclosures have been made in line with Accounting Standard - 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

9. The Company in the earlier years had applied to the Ministry of Corporate Affairs, Central Government for approval of the remuneration paid beyond the prescribed limits to its Director aggregating to Rs 11,875,097 for the financial years 2008 to 2011. The approval of the Central Government is awaited.

10. Related Party Disclosure

Subsidiaries PVR Pictures Limited

PVR Leisure Limited

Cine Hospitality Private Limited

Cinemax India Limited

Vista Entertainment Limited

Growel Entertainment Limited

Nikmo Entertainment Limited

Cinemax Motion Pictures Limited

Odeon Shrine Multiplex Limited

PVR bluO Entertainment Limited

Lettuce Entertain You Limited

CR Retail Malls (India) Limited (till May 18, 2011)

Key Management Personnel Ajay Bijli, Chairman cum Managing Director

Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Personnel Ms. Salena Bijli, Wife of Mr Ajay Bijli

Ms. Sandhuro Rani, Mother of Mr Ajay Bijli

Enterprises having significant influence over the Company Bijli Holding Private Limited

Priya Exhibitors Private Limited

Enterprises over which Key Management Personnel are able to exercise significant influence

PVR Nest

11. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective State Governments. The Company''s contention that Entertainment tax is a capital receipt and the Company''s appeal for not setting off such capital receipt from the value of fixed assets was rejected by Assessing Officer and Commissioner of Income Tax (Appeals) for Assessment Years 2006-07 onwards. The Company had filed appeal against the order of CIT (Appeals) before the Income Tax Appellate Tribunal (ITAT), Delhi in respect of the assessment year 2006-07 and 2007-08. The Income Tax Appellate Tribunal, Delhi for Assessment Year 2006-07 has accepted Company''s contention of treating Entertainment Tax as a capital receipt and for not setting off such capital receipt from block of fixed assets. Based on the above order and order pronounced by Honorable High Court of Gujrat and Mumbai in the similar matters during the year and also basis the tax opinion obtained, the Company has reversed deferred tax liabilities of Rs. 307,531,453 upto March 31, 2012 in the current year. However, the overall deferred tax credit is reduced by Rs. 178,180,078 during the current year on account of principles of virtual certainty.

12. (a) Previous year''s figures have been re-grouped/ re-arranged wherever necessary to conform to current year''s classification.

(b) The figures in the financial statements and notes thereto have been rounded off to nearest rupee.

Mar 31, 2012

1. Corporate information

PVR Limited (the Company) is a public Company with domicile in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on leading stock exchanges in India. The Company is in the business of production and exhibition of films. The Company also earns revenue from in-cinema advertisements/product displays and in-cinema sale of food and beverages.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below:

3. Amalgamation of erstwhile Leisure World Private Limited with the Company in the previous year

i. Pursuant to the scheme of Amalgamation of Leisure World Private Limited with the Company under Section 391 to 394 of the Companies Act, 1956, (the scheme of Amalgamation) as sanctioned by the Hon'ble High Court of New Delhi vide its Order dated August, 19, 2010, the assets and liabilities of Leisure World Private Limited were transferred to and vested in the Company with effect from the appointed date, i.e April 01, 2010.

ii. The Company has made necessary filings with the Registrar of Companies, NCT of Delhi and Haryana in the previous year and accordingly the scheme was given effect to in the accounts in the previous year . In terms of the Accounting Standard 14 Ã Accounting for amalgamation, issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation was accounted under "Purchase method", wherein all the assets and liabilities of Leisure World Private Limited, have been accounted for in the books on the basis of the fair values as on April 1, 2010.

iii. The Board of the Directors of the Company in their meeting dated April 12, 2010 approved the swap ratio to 152 (Rs 10/- fully paid up) equity shares of the Company for every 100 (Rs. 10/- fully paid up) equity shares held by the shareholders of Leisure World Private Limited(Transferor Company). Accordingly 1,460,112 equity shares were issued by the Company to the shareholders of the Leisure World Private Limited. These equity shares so allotted by the Company to the shareholders of the transferor company rank pari-passu in all respects with the existing equity shares of the PVR Ltd. The share capital of the transferor company stands cancelled and extinguished. Pursuant to the approved scheme of amalgamation, the authorized share capital of the Company stands increased to 36,000,000 equity shares of Rs 10 each in the previous year.

iv. Pursuant to the Scheme of Amalgamation approved by the Hon'ble High Court, all assets and liabilities of the transferor company were transferred to the Company at fair value and all inter-company transactions were eliminated in the previous year. However, no elimination of inter-company transactions was made for transactions entered upto March 31, 2010 in the previous year.

v. As per the Scheme, the excess if any, of the aggregate fair value of the assets reduced by the aggregate value of the liabilities as recorded by the Company and upon their transfer shall be credited to the Amalgamation Reserve which forms the part of the net worth of the Company. Accordingly, an amount of Rs.19,336,308 has been credited to Amalgamation Reserve forming the part of the Reserve and Surplus of the Company in the previous year.

vi. Pursuant to the Scheme of Amalgamation, the bank account and agreements in the name erstwhile Leisure World Private Limited are in the process of being transferred in the name of the Company.

4. Gratuity Plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

5. Employee Stock Option Plans

The Company has provided stock option scheme to its employees. As at March 31, 2012, the following schemes are in operation:

PVR ESOS 2008:

Date of grant January 30, 2009

Date of Shareholder's approval January 5, 2009

Date of Board Approval January 30, 2009

Number of options granted 500,000

Method of Settlement (Cash/Equity) Equity

Vesting Period

Not less than one year and not more than ten years from the date of grant of options.

Exercise Period Within a period of two years from the date of vesting

Vesting Conditions

Subject to continued employment with the Company. Further, Compensation Committee may also specify certain performance parameters subject to which options would vest.

Market value as at January 30, 2009 Rs. 88

Stock Options granted:

There were no stock options granted during the current and the previous year and thus weighted average fair value of stock options has not been disclosed.

The Company measures the cost of ESOP using the intrinsic value method. However, the options in earlier years were granted on then prevailing market price of Rs. 88. As a result, there is no expense to be recorded in the financial statements.

In March 2005, the ICAI has issued a guidance note on 'Accounting for Employees Share Based Payments' applicable to employee based share plan, the grant date in respect of which falls on or after April 1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting in the financial statements. Applying the fair value based method defined in said guidance note, the impact on the reported net profit and earnings per share would be as follows:

6. Leases

i. Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre- operative expenditure (pending allocation), as the case may be.

ii. Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

The Company has given spaces of cinemas/ food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The Company has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

7. Capital and Other commitments

b) Other Commitments

i. As at March 31, 2012 the Company has commitments of Rs. 17,198,233 (March 31, 2011: Rs. 7,867,863) relating to rendering of marketing services.

ii. As at March 31, 2012 the Company has commitments of Rs. 4,653,299 (March 31, 2011: Rs. Nil) relating to completion of production of films.

iii. For commitments related to lease arrangements (refer Note 31)

8. Contingent Liabilities (not provided for) in respect of:

(Amount in Rs.)

Particulars March 31,2012 March 31,2011

a) Labour cases pending * Amount not Amount not ascertainable ascertainable

b) Claims against the Company not acknowledged as debts (the Company has paid under protest an amount of Rs. 1,998,809 (March 31, 2011 : Rs. 1,998,809) which is appearing under Loans and Advances) 3,506,380 2,809,468

c) Show Cause Notice raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on certain invoices. (the Company has already paid an amount of Rs.1,900,334 which is appearing under Loans and Advances) 13,095,770 14,418,819

d) Demands by Service Tax Commissioner (Adjn.), New Delhi for non-levy of Service tax on certain marketing income. 8,033,084 4,014,042

e) Appeals filed by the Company with Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2009, 2008, 2007, 2006 respectively. (the Company has already paid an amount of Rs. 96,242,608 under protest which is appearing under Loans and Advances) 137,739,449 114,260,843

f) Notice u/s 271C of the Income Tax Act, 1961 issued by JCIT, Lucknow 11,497,200 -

g) Appeal filed by CR Retails Malls (India) Ltd., against the order of Chief Controlling Revenue Authority, Pune against the demand of deficit stamp duty indemnified by the Company. 9,068,925 -

h) Notice from Entertainment department Chennai regarding short deposit of Entertainment tax on regional movies. 4,254,152 -

i) Arbitration filed on rental dues claimed by erstwhile landlord of food court in Ludhiana, Punjab 45,288,360 -

j) Appeal filed by the Company against the order of Municipal Corporation of Greater Mumbai against the demand of property tax for a multiplex at Mumbai. - 14,773,264

*In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case. Based on the discussions with the solicitors/meeting the terms and conditions by the Company, the management believes that the Company has a strong chance of success in the cases and hence no provision there against is considered necessary.

9. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective State Governments. The Company's contention that Entertainment tax is a capital receipt and the Company's appeal for not setting off such capital receipt from the value of fixed assets was rejected by Assessing Officer and Commissioner of Income Tax (Appeals) for Asessment Years 2006-07 onwards. The Company had filed appeal against the order of CIT (Appeals) before the Income Tax Appellate Tribunal (ITAT), Delhi in respect of the assessment year 2006-07 and 2007- 08. Subsequent to the year end, the Income Tax Appellate Tribunal, Delhi for Assessment Year 2006-07 has accepted Company's contention of treating Entertainment Tax as a capital receipt and for not setting off such capital receipt from block of fixed assets. Based on the above order, the Company has re-computed its tax liability in respect of current tax and deferred tax for the said year for which the favorable order has been received and accordingly income tax provision for earlier years has been reduced by Rs 775,683 and deferred tax charge for earlier years has been reduced by Rs. 3,366,725.

While the matter relating to Assessment Year 2007-08 is pending with ITAT and for Assessment Years 2008-09 and 2009-10 with CIT (Appeals), the Company is confident for entitlement as mentioned above. However, till the time favourable orders are received from ITAT, the Company continues with its earlier position and has provided for Income tax and deferred tax liabilities for the Assessment year 2007-08 onwards by treating the Entertainment Tax (E.T.) as capital receipt and reducing the notional amount of E.T. from the block of fixed assets while calculating depreciation on fixed assets.

10. The Company had filed a Special Leave Petition (SLP) before Hon'ble Supreme Court against the order of Hon'ble High Court of Delhi which upheld the levy of Service tax vide its order dated September 23, 2011. The Hon'ble Supreme Court passed an interim direction on October 21, 2011 directing the Company to deposit with the Service tax Department 50% of arrears towards service tax till September 30, 2011 in three equated installments within six months and for balance 50% to furnish a solvency surety. Further as per the directions of the Hon'ble Supreme Court, the Company is paying the service tax towards renting of immovable property from October 2011 onwards. Though the matter is still pending with the Hon'ble Supreme Court, in view of the above developments, the Company considers it prudent to make provision in its books for the entire amount of service tax on immovable property. As a result, the current year service tax on rent (net of cenvat credit) of Rs. 79,055,520 is clubbed with Rent expenses and Rs. 141,624,348 (net of cenvat credit) related to period before March 31, 2011 is shown as exceptional item in the statement of profit and loss.

11. Segment Information

Business Segments:

The Company is engaged in the business of film production as well as exhibition. However considering the proportion of revenues, profits and assets of production business to the total revenues, profits and assets of the combined operations, the Company does not consider the production business as a separately identifiable reportable segment and hence no separate disclosures have been made in line with Accounting Standard Ã 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

12. Related Party Disclosure

Subsidiaries

CR Retail Malls (India) Limited*

PVR Pictures Limited

PVR bluO Entertainment Limited

Key Management Personnel

Ajay Bijli, Chairman cum Managing Director Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Personnel

Ms. Salena Bijli, Wife of Mr. Ajay Bijli

Ms. Sandhuro Rani, Mother of Mr. Ajay Bijli

Enterprises having significant influence over the Company

Bijli Investments Private Limited Priya Exhibitors Private Limited

* w.e.f. May 18, 2011, CR Retail Malls (India) Limited ceases to be the subsidiary of the Company.

13. The Company in the earlier years had applied to the Ministry of Corporate Affairs, Central Government for approval for the remuneration paid beyond the prescribed limits to its Director aggregating to Rs 11,875,097 for the financial years 2008 to 2011. The approval of the Central Government is awaited.

14. During the year, the Company sold its investment in the shares of its subsidiary company CR Retail Malls (India) Ltd for a consideration more than the cost of investments. The profit on the same amounting to Rs 168,564,053 has been disclosed as an exceptional item in the statement of profit and loss.

15. The Company has on July 05, 2011 purchased 40% share capital of PVR Pictures Limited from JP Morgan Mauritius Holdings IV Limited and ICICI Venture Funds Management Company Limited. Subsequent to the above purchase, PVR Pictures Ltd has now become a wholly owned subsidiary of the Company.

16. Scheme of arrangement for Demerger of Production Business of one of the subsidiaries PVR Pictures Limited

i. Pursuant to the Composite Scheme of Arrangement ('Scheme') filed by PVR Limited (the transferee Company) and PVR Pictures Limited (the transferor Company), under the provisions of the Companies Act, 1956 and as approved by the shareholders, and sanctioned by the Hon'ble High Court of Delhi on February 02, 2012, the production business undertaking of the transferor Company (non listed) was transferred to and vested in the transferee Company with effect from April 01, 2011 (the appointed date). The Company has made necessary filing with the Registrar of Companies, NCT of Delhi and Haryana on February 29, 2012 being the effective date. The Scheme provides that all the assets and liabilities pertaining to production business undertaking in the books of transferor Company as on appointed date shall be transferred to and vested in the transferee Company pursuant to this scheme and recorded by the transferee Company. Accordingly, the scheme has been given effect in these financial statements.

ii. The approved Scheme further provides that from the effective date, such of the assets and liabilities covered under the Scheme and as the Board of Directors consider relevant and appropriate after considering corresponding deferred tax adjustments and proportionate reduction in value of investments in subsidiary, shall be adjusted to their fair values, and the corresponding adjustment out of above shall be set off against specified reserves (including Securities Premium account). Accordingly the Company has written down the value of such assets by Rs. 493,783,033 and set off the same against reserves as per Scheme.

17. (a) The Company has during the year, merged operations of production business undertaking of PVR Pictures Limited pursuant to the Scheme of arrangement for Demerger and also started commercial operations at Udaipur, Surat, Vasant Kunj (New Delhi), Kolkata and Nanded. Hence current year's figures are not strictly comparable with those of the previous year.

(b) Previous year's figures have been re-grouped where necessary to confirm to current year's classification.

(c) The figures in the financial statements and notes thereto have been rounded off to nearest rupee.

Mar 31, 2011

Nature of Operations

PVR Limited is in the business of film exhibition. The Company also earns revenue from in-cinema advertisements/product displays and in-cinema sale of food and beverages.

1. Segment Information

Business Segments:

The Company is solely engaged in the business of film exhibition. The entire operations are governed by the same set of risk and returns, hence, the same has been considered as representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard Ã 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

2. Related Party Disclosure

Subsidiaries CR Retail Malls (India) Limited

PVR Pictures Limited

PVR bluO Entertainment Limited

Key Management Personnel Ajay Bijli, Chairman cum Managing

Director and;

Sanjeev Kumar, Joint Managing

Director

Enterprises having significant Bijli Investments Private Limited influence over the Company Priya Exhibitors Private Limited

NOTES:

a) *The Company has availed loans from banks and a body corporate aggregating to Rs. 460,494,676 (Previous year Rs.757,105,528) which are further secured by personal guarantee of two directors of the Company. Loan from SIDBI was further secured by second charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi.

b) The above particulars exclude expenses reimbursed to/by related parties.

c) No amount has been provided as doubtful debt or advance/written off or written back in the year in respect of debts due from/to above related parties.

3. The followings are the details of loans and advances by the Company, outstanding at the end of the year in terms of Securities & Exchange Board of Indias circular dated January 10, 2003:

4. Security Deposits (paid) include Rs. 2,832,089 (Previous year Rs. 2,832,089) recoverable from one party, with whom the Company had entered into Memorandum of Understanding for taking office space on rent and Rs. 5,890,311 paid to various developers for taking multiplex space on lease. The Company has filed legal suit for recovery of the aforesaid dues and is hopeful of recovering the same. Hence, no provision against the same has been considered necessary.

5. (a) The Finance Act 2010, amended the definition of the Renting of the Immovable Property Service to explicitly provide that the activity of the renting itself is a taxable service with retrospective effect from 1st June, 2007. The Company has challenged the impugned provisions of law by way of a writ petition filed with the Honble High Court of Delhi and a stay order is obtained. Also, based on the legal advice obtained, the management is confident that the service tax on renting of the immovable property is not applicable and hence is not payable. In view of this judgment, the service tax on renting of immovable properties to the extent of Rs. 141,624,348 (including Rs. 87,303,515 pertaining to earlier years) (net of service tax credit claimable) not paid to the landlords has not been provided during the year.

(b) Service tax amounting to Rs 15,011,689 (including Rs 5,409,585 pertaining to earlier years) on rental income has been charged from the lessees in the current year.

6 A. Amalgamation of erstwhile Leisure World Private Limited with the Company

(i) Pursuant to the scheme of Amalgamation of Leisure World Private Limited with the Company under Section 391 to 394 of the Companies Act, 1956, (the scheme of Amalgamation) as sanctioned by the Honble High Court of New Delhi vide its Order dated August 19, 2010, the assets and liabilities of Leisure World Private Limited were transferred to and vested in the Company with effect from the appointed date, i.e. April 1, 2010. The Company has made necessary filings with the Registrar of Companies, NCT of Delhi and Haryana. The Scheme of Amalgamation has accordingly been given effect to in these accounts.

(ii) In terms of the Accounting Standard 14 Ã Accounting for amalgamation, issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation is accounted under "Purchase method", wherein all the assets and liabilities of Leisure World Private Limited, have been accounted for in the books on the basis of the fair values as on April 1, 2010.

(iii) The Board of the Directors of the Company in their meeting dated April 12, 2010 approved the swap ratio to 152 (Rs 10/ - fully paid up) equity shares of the Company for every 100 (Rs. 10/- fully paid up) equity shares held by the shareholders of Leisure World Private Limited(Transferor Company). Accordingly 1,460,112 equity shares were issued by the Company to the shareholders of the Leisure World Private Limited. These equity shares so allotted by the Company to the shareholders of the transferor company rank pari-passu in all respects with the existing equity shares of the PVR Ltd. The share capital of the Transferor company stands cancelled and extinguished. Pursuant to the approved scheme of amalgamation, the authorized share capital of the Company stands increased to 36,000,000 equity shares of Rs 10 each.

(iv) Pursuant to the Scheme of Amalgamation approved by the Honble High Court, all assets and liabilities of the transferor Company are transferred to the Company at fair value and all inter-company transactions are eliminated. However, no elimination of inter-company transactions has been made for transactions entered upto March 31, 2010.

(v) As per the Scheme, the excess if any, of the aggregate fair value of the assets reduced by the aggregate value of the liabilities as recorded by the Company and upon their transfer shall be credited to the Amalgamation Reserve which forms the part of the net worth of the Company. Accordingly, an amount of Rs.19,336,308 has been credited to Amalgamation Reserve forming the part of the Reserve and Surplus of the Company. The summary of such Assets, Liabilities and Reserves is as below:

(vi) Pursuant to the Scheme of Amalgamation, the bank accounts and agreements in the name erstwhile Leisure World Private Limited are in the process of being transferred in the name of the Company.

In view of this amalgamation being effective from April 1, 2010, the figures for the year ended March 31, 2011 are not comparable with the previous years figures.

6B. Amalgamation of erstwhile Sunrise Infotainment Private Limited with the Company in the previous year

(i) Pursuant to the scheme of Amalgamation of Sunrise Infotainment Private Limited with the Company under Section 391 to 394 of the Companies Act, 1956, (the scheme of Amalgamation) as sanctioned by the Honble High Court of New Delhi vide its Order dated September 25, 2009, the assets and liabilities of Sunrise Infotainment Private Limited (a Company engaged in the business of film exhibition) were transferred to and vested in the Company with effect from April 1, 2008. The Company had made necessary filings with the Registrar of Companies, NCT of Delhi and Haryana. The Scheme of Amalgamation has accordingly been given effect to in the accounts in the previous year.

(ii) In terms of the Accounting Standard 14 Ã Accounting for amalgamation, issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation is accounted under "Pooling of Interest method", wherein all the assets and liabilities of Sunrise Infotainment Private Limited, have been accounted for in their book values as appearing in the books as on April 1, 2008.

(iii) Goodwill arising out of difference in the acquisition value of shares in the merged entity and the book value of shares of the Transferor Company had been amortized.

(iv) On the amalgamation of the Transferor Company and Transferee Company, the share capital of the Transferor Company was extinguished since all the shares of the Transferor Company were held by the Transferee Company as its Holding Company. Since the Transferor Company was a wholly owned subsidiary of the Transferee Company, no shares were issued by the Transferee Company to the shareholders of the Transferor Company as a result of amalgamation.

(v) Pursuant to the Scheme of Amalgamation approved by the Honble High Court, all assets and liabilities of the transferor company were transferred to the transferee company and all inter-company transactions were eliminated. However, elimination of inter-company transactions were made for transactions entered upto March 31, 2008.

(vi) The credit balance in the Profit and Loss Account of erstwhile Sunrise Infotainment Private Limited of Rs. 2,936,870 as at April 1, 2008 was added to the accumulated surplus of the Company of the previous year.

(vii) As per the Scheme, during the period between the Appointed Date and the Effective Date, erstwhile Sunrise Infotainment Private Limited was deemed to have carried on the existing business in "trust" on behalf of the Company. Further all profits or incomes earned and losses and expenses incurred by Sunrise Infotainment Private Limited during such period, was for all purposes, be deemed to be profits or incomes or expenditure or losses of the Company. Accordingly, the net loss after tax incurred by erstwhile Sunrise Infotainment Private Limited during the year from April 1, 2008 to March 31, 2009 of Rs. 26,302,193 has been incorporated in the financial statements of the Company by way of an adjustment to the balance of the Profit and Loss Account as at March 31, 2008.

(viii) Pursuant to Scheme of Amalgamation approved by the Honble High Court of Delhi, the authorized share capital of the Company was reclassified as 35,000,000 Equity Shares of Rs. 10 each; 20,000,000 Preference shares of Rs. 10 each and 5,000,000 5% cumulative Preference shares of Rs. 10 each from 30,000,000 Equity shares of Rs. 10 each and 20,000,000 Preference shares of Rs. 10 each respectively in the previous year.

(ix) Pursuant to the Scheme of Amalgamation, the bank accounts and agreements in the name erstwhile Sunrise Infotainment Private Limited are in the process of being transferred in the name of the Company.

7. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective State Governments. In the assessment orders for the Assessment years 2006-07 and 2007-08, the Assessing Officer has accepted the Companys contention that the amount of entertainment tax is a capital receipt by reducing the notional amount of entertainment tax from the block of fixed assets while calculating depreciation on fixed assets. However the Companys contention of Entertainment tax a capital receipt and the Companys appeal for not setting off such capital receipt from the value of fixed assets has been rejected by Commissioner of Income Tax (Appeals) and the Company has filed appeals against the order of CIT (Appeals) before the Honble Income Tax Appellate Tribunal, Delhi in respect of these years. Till the time the appeal is pending, provision for current income tax and deferred tax liabilities for the current year and earlier years has been made based on the Companys position of treating the entertainment tax as a capital receipt and reducing the notional amount of entertainment tax from the block of fixed assets while calculating depreciation on fixed assets . Had the Company made the income tax provision based on the CIT (Appeals) order, the advance payment of income tax and deferred tax liability would have been lower by Rs. 192,389,520 each. There is no material impact in the Profit before tax of the current year.

8. The asset of Rs. 60,385,329 (Previous year Rs.16,200,000) recognized by the Company as MAT Credit Entitlement Account under Loans and Advances represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

9. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity plan.

The weighted average share price at the date of exercise for stock options was Rs. 167.73.

Stock Options granted:

There were no stock options granted during the current and the previous year and thus weighted average fair value of stock options has not been disclosed.

The options in earlier years were granted on then prevailing market price of Rs. 88. As a result, there is no expense to be recorded in the financial statements.

In March 2005, the ICAI has issued a guidance note on Accounting for Employees Share Based Payments applicable to employee based share plan, the grant date in respect of which falls on or after April 1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting

10. Leases

i) Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss Account and Pre- Operative Expenditure (pending allocation), as the case may be. Operating Lease (for assets taken on lease) Disclosure for properties under non cancellable leases, where the Company is carrying commercial operations is as under:

ii) Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the Profit and Loss Account and netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement.

11. During the year, the company has written off certain debtors amounting to Rs. 12,671,744 on account of non recovery of the same. These amounts have been charged off to profit and loss account in earlier years.

12. Other current assets include an amount of Rs. 22,778,611 which represents amount of entertainment tax recoverable from the Government of Uttar Pradesh in respect of its multiplexes at Allahabad and Lucknow which commenced operations effective from 5th March 2010 and 10th September, 2010 respectively. The Company has received the amounts in respect of Rs 8,995,297 subsequent to year end and is hopeful of recovering the balance in accordance with the Uttar Pradesh State Government Order no. 101/2009-10.

13. Contingent Liabilities (not provided for) in respect of:

March 31, 2011 March 31, 2010

(Rs.) (Rs.)

a) Labour cases pending * Amount not Amount not

ascertainable ascertainable

b) Claims against the Company not acknowledged as debts 2,809,468 (the Company has paid under protest an amount of Rs. 1,998,809 (Previous year Rs. 3,578,441) which is appearing in the Schedule of Loans and Advances)** 4,188,073

c) Corporate guarantee given against the loan of Rs. 500,000,000 sanctioned by a financial institution to the subsidiary, to the extent of loan drawn. 429,582,995

d) Show cause notices raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on invoices. (the Company has already paid an amount of Rs.1,900,334 prior to the issuance of show cause notice which is appearing in the Schedule of Loans and Advances)** 18,432,861 18,432,861

e) Appeals filed by the Company with Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2008, 2007, 2006 respectively. (the Company has paid an amount of Rs. 73,255,899 which is appearing in the Schedule of Loans and Advances)** 114,260,843 5,502,471

f) Appeal filed by the Company against the order of Municipal Corporation of Greater Mumbai against the demand of property tax for a multiplex at Mumbai.** 14,773,264 10,731,694

*In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case.

**Based on the discussions with the solicitors/meeting the terms and conditions by the Company, the management believes that the Company has a strong chance of success in the cases and hence no provision there against is considered necessary.

* As the future liability of gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the director is not included above.

*excluding provident fund contribution of Rs. 2,246,400 (Previous year Rs. 2,246,400).

** including Rs. 4,992,000 (Previous year Rs. 4,992,000) charged to pre-operative expenses. The said amount does not include provident fund contribution of Rs. 374,400 (Previous year Rs. 374,400).

The Ministry of Corporate Affairs (MCA), Central Government vide letter dated April 5th, 2010 had approved remuneration of Rs. 14,500,000 to Mr. Ajay Bijli, Chairman cum Managing Director (CMD) of the Company for the period 01.04.2008 to 31.03.2009 as against Rs. 19,719,949 paid during the said period. A representation has been made to MCA, Central Government for approval of the excess remuneration of Rs. 5,219,949 (as approved by the Remuneration Committee and shareholders of the Company) and the approval of the Central Government is awaited.

The MCA, Central Government vide another letter dated April 5th, 2010, had approved annual remuneration to CMD for the period 01.04.2009 to 31.03.2012 shall be as per last years remuneration i.e Rs. 19,719,949 (including contribution to provident fund). The Company has filed a representation to the Central Government for seeking approval for waiver of excess amount of remuneration of Rs. 1,628,903 per annum (excluding contribution to provident fund) paid to CMD during the period 01.04.2009 to 31.03.2010 and 01.04.2010 to 31.03.2011.

Remuneration of Rs. 9,984,000 (excluding contribution to provident fund) paid to the Joint Managing Director (JMD) during the financial year 2010-11 is within the limits prescribed under Schedule XIII to the Companies Act, 1956. The remuneration paid for the financial year 2009-10 was short of the approvals by Rs.7,584,000 for which the approval has been received in the current year.

14. In view of the diverse nature of the food and beverages items (each being less than 10% in value of the total turnover of the Company) being sold by the Company, it is not practicable to give the quantitative details thereof. All items of food and beverages are indigenously procured.

15. i) The Board of Director of the Company had recommended a dividend of Re. 1/- per share at its meeting held on May 28, 2010 subject to the approval of the shareholders at the annual general meeting and accordingly made an appropriation of Rs. 25,624,330 and Rs. 4,354,855 towards proposed dividend and dividend distribution tax respectively. The company has increased the appropriation by Rs. 1,499,312 for dividend and Rs. 150,043 for dividend distribution tax pertaining to dividend on shares allotted subsequent to March 31, 2010 but before the record date. The same has been disclosed under the current year appropriation.

iii) Final Dividend of Rs 1/- per share (i.e. 10% on equity share of face value of Rs 10/- each) for the year ended March 31, 2010 was approved by the shareholders in Annual General Meeting held on September 27, 2010 and same was paid in the current year except for Rs. 61,021 lying in unpaid dividend account.

iii) Proposed Dividend of Re 1/- per share (i.e. 10% on equity share of face value of Rs 10/- each) for the year ended March 31, 2011 has been approved by the Board of Directors in the meeting held on May 27, 2011 subject to the approval of shareholders in Annual General Meeting. The Company has also transferred 2.5% of the current year profits to general reserves.

16. (a) The board of directors in its meeting held on May 27, 2011 approved buy back of Companys own share from the open market for a sum up to 10% of its paid up equity share capital and free reserves.

(b) The Board of Directors of the Company in its meeting held subsequent to year end on 5th May, 2011 approved the sale of its investments in the shares of its subsidiary company CR Retail Mall (India) Ltd for a consideration more than the cost of investments

17. a) The Company has during the year started commercial operations at LDA Lucknow, Ahmedabad and Chennai. Hence, current years figures are not strictly comparable with those of the previous year.

b) Previous years figures have been re-grouped where necessary to conform to current years classification.

Mar 31, 2010

A) The foreign currency loan from Network Foods International Limited, Singapore availed during the earlier year is secured by third charge over fixed assets and second charge on current assets of the company, subject to ceding of charge to be agreed by the companys banker.

B) Working Capital loans from State Bank of India and Bank of Baroda are secured by way of hypothecation of stock in trade, book debts and other current assets.

Segment Reporting:

The Companys operations predominantly relates to manufacture of chocolates, hence no reportable primary segment information is made. The secondary segment reporting of the companys revenues are as follows:

2. Claims against the Company not acknowledged as debts:

a) From Commissioner of Customs, Chennai in respect of Advance licences not fulfilled within the stipulated time though extension and clubbing of such licences have been allowed by the Licensing authority Rs1.80 Crores (Previous year Rs1.80 Crores).During the year the company has received order in favour of the company from Commissioner of Customs, Chennai Vide order No. 10404/2009 dt 23-12-2009.However the department has preferred an appeal before the appellate tribunal against the order issued by Commissioner Customs,(Seaport-Export)

b) From Directorate of Revenue Intelligence, Chennai in respect of alleged non fulfillment of export obligation for Rs.3.19 crore (Rs.3.19 Crore )

3. Contingent Liabilities in respect of:

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.36.63 lakhs (Previous year Nil)

(b) Counter Guarantees given to the Bankers in respect of guarantees furnished by them Rs.5.43 Lakh (previous year Rs.5.43 Lakh)

4. (c) Accrued and unpaid preference dividend Rs.861.09 Lakh (previous year Rs 787.12 Lakh)

A sum of Rs. 2,11,69,774 is over due for repayment under Sales tax deferment scheme. As the company is sick company and the reference is made to BIFR, it is proposed to request for the waiver of interest amounting to Rs.1,27,99,548 as on 31.03.2010 (Rs.89, 88,989 as on 31.03.2009), hence the same is not provided in the accounts.

5. Additional information pursuant to para 3 and 4 of part II of Schedule VI the Companies Act, 1956. A Licensed Capacity : Not Applicable

B Installed Capacity : As this is an integrated plant, with versatile product range, ascertainment of installed capacity is not possible

C Actual Production (MT) : MT 5,885.66 ( previous year MT 6,988.06 )

6. Figures in brackets represent previous year

7. Previous year figures have been regrouped / reclassified wherever found necessary in order to have conformity with the current year classification.

8. The company, being sick company within the meaning of clause (o) of sub section (1) of section 3 of Sick Industrial Companies (special provisions) Act 1985, was referred to Board for Industrial Finance and rehabilitation (BIFR). BIFR has declared the company as sick company and appointed State Bank of India as operating agency. State Bank of India has commissioned APITCO for viability study. APITCO has submitted its study to SBI wherein the study says that the companys operations are viable on the basis assumptions made by them. The State Bank of India is yet to file the rehabilitation scheme before the BIFR.

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