Notes to Accounts of Prime Focus Ltd.

Mar 31, 2023

Provisions and Contingencies

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it is
probable that the Company will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end of
the reporting period, taking into account the risks and uncertainties
surrounding the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flow (when the effect of
the time value of money is material).

When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
a receivable is recognised as if it is virtually certain that
reimbursement will be received, and the amount of the receivable
can be measured reliably.

Contingent liabilities are disclosed unless the possibility of outflow
of resources is remote. Contingent assets are neither recognised
nor disclosed in the financial statements.

2.16.1 Onerous contracts

Present obligations arising under onerous contracts are recognised
and measured as provisions. An onerous contract is considered to
exist where the Company has a contract under which the unavoidable
costs of meeting the obligations under the contract exceed the
economic benefits expected to be received from the contract.

2.16.2 Restructurings

A restructuring provision is recognised when the Company has
developed a detailed formal plan for the restructuring and has
raised a valid expectation in those affected, that it will carry out
the restructuring by starting to implement the plan or announcing
its main features to those affected by it. The measurement of a
restructuring, which are those amounts that are both necessarily
entailed by the restructuring and not associated with the ongoing
activities of the entity.

2.17 Financialinstruments

Financial assets and financial liabilities are recognised when a
Company becomes a party to the contractual provisions of the
instruments.

Financial assets and financial liabilities are initially measured at
fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value
of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the

acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in profit or loss.

2.18 Financial assets

All regular way purchases of sales of financial assets are recognised
or de-recognised on a trade date basis. Regular way purchases
or sales are purchases or sales of financial assets that require
delivery of assets within the time frame established by regulation
or convention in the marketplace.

All recognised financial assets are subsequently measured in their
entirety at either amortised cost or fair value, depending on the
classification of the financial assets.

2.18.1 Classification of financial assets

Debt instruments that meet the following conditions are
subsequently measured at amortised cost (except for debt
instruments that are designated at fair value through profit or loss
on initial recognition):

• the asset is held within a business model whose objective is
to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

For the impairment policy on financial assets measured at amortised
cost, refer note 2.18.5

Debt instruments that meet the following conditions are measured
at fair value through other comprehensive income (except for debt
instruments that are designed as at fair value through profit or loss
on initial recognition):

• the asset is held within a business model whose objective is
achieved both by collecting contractual cash flows and selling
financial assets; and

• the contractual terms of the instrument give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Interest income is recognised in profit or loss for FVTOCI debt
instruments. For the purposes of recognising foreign exchange
gains and losses, FVTOCI debt instruments are treated as financial
assets measured at amortised cost. Thus, exchange differences
on the amortised cost are recognised in profit or loss and other
changes in the fair value of FVTOCI financial assets are recognised
in other comprehensive income. When the investment is disposed of,

the cumulative gain or loss previously accumulated is reclassified to
profit or loss.

For the impairment policy on debt instruments at FVTOCI, (refer
note 2.18.5).

All other financial assets are subsequently measured at fair value.

2.18.2 Effective interest method

The effective interest is a method of calculating the amortised
cost of debt instruments and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including all fees and
points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts)
through the expected life of the debt instrument, or, where
applicable, a shorter period, to the net carrying amount on initial
recognition.

Income is recognised on an effective interest basis for debt
instruments other than those financial assets classified as at
FVTPL. Interest income is recognised in profit or loss and is included
in the "Other income" line item.

2.18.3 Investments in equity instruments at fair value through other
comprehensive income (FVTOCI)

On initial recognition, the Company can make an irrevocable
election (on an instrument-by-instrument basis) to present the
subsequent changes in fair value in other comprehensive income
pertaining to investments in equity instruments. This election is
not permitted if the equity investment is held for trading. These
elected investments are initially measured at fair value plus
transaction costs. Subsequently, they are measured at fair value
with gains and losses arising from changes in fair value recognised
in other comprehensive income. The cumulative gain or loss is not
reclassified to profit or loss on disposal of the investments.

A financial asset is held for trading if:

• it has been acquired principally for the purpose of selling it in
the near term; or

• on initial recognition, it is part of a portfolio of identified
financial instruments that the Company manages together
and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a
hedging instrument or a financial guarantee.

Dividends on these investments in equity instruments are
recognised in profit or loss when the Company''s right to receive the

dividends is established, it is probable that the economic benefits
associated with the dividend will flow to the entity, the dividend
does not represent a recovery of part of cost of the investment
and the amount of dividend can be measured reliably. Dividends
recognised in profit or loss are included in the ''Other income'' line
item.

2.18.4 Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as FVTPL, unless
the Company irrevocably elects on initial recognition to present
subsequent changes in fair value in other comprehensive income
for investments in equity instruments which are not held for trading
(refer note 2.18.3).

Debt instruments that do not meet the amortised cost criteria or
FVTOCI criteria (see above) are measured at FVTPL. In addition,
debt instruments that meet the amortised cost criteria or the
FVTOCI criteria but are designated as at FVTPL are measured at
FVTPL.

A financial asset that meets the amortised cost criteria or debt
instruments that meet the FVTOCI criteria may be designated as at
FVTPL upon initial measurement if such designation eliminates or
significantly reduces a measurement or recognition inconsistency
that would arise from measuring assets or liabilities or recognising
the gains and losses on them on different basis. The Company has
not designated any debt instruments at FVTPL.

Financial assets at FVTPL are measured at fair value at the end
of each reporting period, with any gains or losses arising on re¬
measurement recognised in profit or loss. The net gain or loss
recognised in profit or loss incorporates any dividend or interest
earned on the financial asset and is included in the ''Other income''
line item. Dividend on financial assets at FVTPL is recognised when
the Company''s right to receive the dividends is established, it is
probable that the economic benefits associated with the dividend
will flow to the entity, the dividend does not represent a recovery
of part of cost of the investment and the amount of dividend can be
measured reliably.

2.18.5 Impairment of financial assets

The Company applies the expected credit loss model for recognising
impairment loss on financial assets measured at amortised cost,
debt instruments at FVTOCI, lease receivables, trade receivables,
other contractual rights to receive cash or other financial asset, and
financial guarantees not designated as at FVTPL.

Expected credit losses are the weighted average of credit losses
with the respective risks of default occurring as the weights. Credit
loss is the difference between all contractual cash flows that are
due to the Company in accordance with the contract and all the cash
flows that the Company expects to receive (i.e. all cash shortfalls),
discounted at the original effective interest rate (or credit-adjusted
effective interest rate for purchased or originated credit-impaired
financial assets). The Company estimates cash flows by considering
all contractual terms of the financial instrument (for example,
prepayment, extension, call and similar options) through the
expected life of that financial instrument.

The Company measures the loss allowance for a financial instrument
at an amount equal to lifetime expected credit losses if the credit
risk on that financial instrument has increased significantly since
initial recognition. If the credit risk on a financial instrument has
not increased significantly since initial recognition, the Company
measures the loss allowance for that financial instrument at an
amount equal to 12-month expected credit losses. 12-month
expected credit losses are portion of the life-time expected credit
losses that represent the lifetime cash shortfalls that will result if
default occurs within the 12 months after the reporting date and
thus, are not cash shortfalls that are predicted over the next 12
months.

If the Company measured loss allowance for a financial instrument
at lifetime expected credit loss model in the previous period, but
determines at the end of a reporting period that the credit risk
has not increased significantly since initial recognition due to
improvement in credit quality as compared to the previous period,
the Company again measures the loss allowance based on 12 month
expected credit losses.

When making the assessment of whether there has been a
significant increase in credit risk since initial recognition, the
Company uses the change in the risk of a default occurring over
the expected life of the financial instrument instead of the change
in the amount of expected credit losses. To make that assessment,
the Company compares the risk of a default occurring on the
financial instrument as at the reporting date with the risk of a
default occurring on the financial instrument as at the date of initial
recognition and considers reasonable and supportable information
that is available without undue cost or effort, that is indicative of
significant increase in credit risk since initial recognition.

For trade receivables or any contractual right to receive cash or
another financial asset that result from transactions that are within

the scope of Ind AS 115, the Company always measures the loss
allowance at an amount equal to lifetime expected credit losses.

Further, for the purpose of measuring lifetime expected credit loss
allowance for trade receivables, the Company has used a practical
expedient as permitted under Ind AS 109. This expected credit loss
allowance is computed based on a provision matrix which takes into
account historical credit loss experience and adjusted for forward¬
looking information.

The impairment requirements for the recognition and measurement
of a loss allowance are equally applied to debt instruments at
FVTOCI except that the loss allowance is recognised in other
comprehensive income and is not reduced from the carrying amount
in the balance sheet.

2.18.6 De-recognition of financial assets

The Company derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Company neither
transfers nor retains substantially all the risks and rewards
of ownership and continues to control the transferred asset,
the Company recognises its retained interest in the asset and
an associated liability for the amounts it may have to pay. If
the Company retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Company continues
to recognise the financial asset and also a collateralised borrowing
for the proceeds received.

On derecognition of a financial asset in its entirety, the difference
between the asset''s carrying amount and the sum of the
consideration received and receivable and the cumulative gain or
loss that had been recognised in other comprehensive income and
accumulated in equity is recognised in profit or loss if such gain
or loss would have otherwise been recognised in profit or loss on
disposal of that financial asset.

On derecognition of financial asset other than its entirety (e.g.
when the Company retains an option to repurchase part of the
transferred asset), the Company allocates the previous carrying
amount of the financial asset between the part it continues to
recognise under continuing involvement, and the part it no longer
recognises on the basis of the relative fair values of those parts
on the date of the transfer. The difference between the carrying
amount allocated to the part that is no longer recognised and the
sum of the consideration received for the part no longer recognised

and any cumulative gain or loss allocated to it that had been
recognised in other comprehensive income is recognised in profit or
losses if such gain or loss would have otherwise been recognised in
profit or loss on disposal of that financial asset. A cumulative gain
or loss that had been recognised in other comprehensive income is
allocated between the part that continues to be recognised in other
comprehensive income and the part that is no longer recognised on
the basis of the relative fair value of those parts.

2.18.7 Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency
is determined in that foreign currency and translated at the spot
rate at the end of each reporting period.

• For foreign currency denominated financial assets measured
at amortised cost and FVTPL, the exchange differences
are recognised in profit or loss except for those which are
designated as hedging instruments in a hedging relationship.

• Changes in the carrying amount of investments in equity
instruments at FVTOCI relating to changes in foreign currency
rates are recognised in other comprehensive income.

• For the purposes of recognising foreign exchange gains and
losses, FVTOCI debt instruments are treated as financial
assets measured at amortised cost. Thus, exchange
differences on the amortised cost are recognised in profit or
loss and other changes in the fair value of FVTOCI financial
assets are recognised in other comprehensive income.

2.18.8 Investments in subsidiaries

The Company has elected to recognise its investments in
subsidiaries at cost in accordance with the option available in Ind AS
27, ''Separate Financial Statement.

2.19 Financial liabilities and equityinstruments

2.19.1 Classification as debt or equity

Debt and equity instruments issued by the Company are classified
as either financial liabilities or as equity in accordance with the
substance of the contractual arrangement and the definitions of a
financial liability and equity instrument.

2.19.2 Equity instruments

An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all its liabilities.
Equity instruments issued by a Company are recognised at the
proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised
and deducted directly in equity. No gain or loss is recognised in profit

or loss on the purchase, sale, issue or cancellation of the Company''s
own equity instruments.

2.19.3 Compound financial instruments

The component parts of compound financial instruments
(convertible notes) issued by the Company are classified separately
as financial liabilities and equity in accordance with the substance
of the contractual arrangements and the definitions of a financial
liability and an equity instrument. A conversion option that will
be settled by the exchange of a fixed amount of cash or another
financial asset for a fixed number of the Company''s own equity
instruments is an equity instrument.

At the date of issue, the fair value of the liability component is
estimated using the prevailing market interest rate for similar non¬
convertible instruments. This amount is recognised as a liability on
an amortised cost basis using the effective interest method until
extinguished upon conversion or at the instrument''s maturity date.

The conversion option classified as equity is determined by
deducting the amount of the liability component from the fair
value of the compound financial instrument as a whole. This is
recognised and included in equity, net of income tax effects, and is
not subsequently remeasured. In addition, the conversion option
classified as equity will remain in equity until the conversion option
is exercised, in which case, the balance recognised in equity will be
transferred to other component of equity. When the conversion
option remains unexercised at the maturity date of the convertible
note, the balance recognised in equity will be transferred to
retained earnings. No gain or loss is recognised in profit or loss upon
conversion or expiration of the conversion option.

Transaction costs that relate to the issue of the convertible notes
are allocated to the liability and equity components in proportion to
the allocation of the gross proceeds. Transaction costs relating to
the equity component are recognised directly in equity. Transaction
costs relating to the liability component are included in the carrying
amount of the liability component and are amortised over the lives
of the convertible notes using the effective interest method.

2.19.4 Financial liabilities

All financial liabilities are subsequently measured at amortised cost
using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial
asset does not qualify for de-recognition or when the continuing
involvement approach applies, financial guarantee contracts
issued by the Company, and commitments issued by the Company

to provide a loan at below-market interest rate are measured in
accordance with the specific accounting policies set out below.

2.19.4.1 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial
liability is either contingent consideration recognised by the
Company as an acquirer in a business combination to which Ind AS
103 applies or held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been incurred principally for the purpose of
repurchasing it in the near term; or

• on initial recognition, it is part of a portfolio of identified
financial instruments that the Company manages together
and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a
hedging instrument.

A financial liability other than a financial liability held for
trading or contingent consideration recognised by the
Company as an acquirer in a business combination to which
Ind AS 103 applies, may be designated as at FVTPL upon
initial recognition if:

• such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would
otherwise arise;

• the financial liability forms part of a group of financial assets
or financial liabilities or both, which is managed, and its
performance is evaluated on a fair value basis, in accordance
with the Company''s documented risk management or
investment strategy, and information about the grouping is
provided internally on that basis; or

• it forms part of a contract containing one or more embedded
derivatives, and the Ind AS 109 permits the entire combined
contract to be designated as at FVTPL in accordance with Ind
AS 109.

Financial liabilities at FVTPL are stated at fair value, with any gains
or losses arising on re-measurement recognised in profit or loss.
The net gain or loss recognised in profit or loss incorporates any
interest paid on the financial liability and is included in the ''Other
income'' line item.

However, for not-held-for-trading financial liabilities that are
designated as at FVTPL, the amount of change in fair value of the
financial liability that is attributable to changes in the credit risk of

the liability is recognised in other comprehensive income, unless
the recognition of the effects of changes create mismatch in
profit or loss, in which case these effects of changes in credit risk
are recognised in profit or loss. Changes in fair value attributable
to a financial liability''s credit risk that are recognised in other
comprehensive income are reflected immediately in retained
earnings and are not subsequently reclassified in profit or loss.

Gains or losses on financial guarantee contracts and loan
commitments issued by the Company that are designated by the
Company as at fair value through profit or loss are recognised in
profit or loss.

2.19.4.2 Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not held-for-trading and are not
designated as at FVTPL are measured at amortised cost at the
end of subsequent accounting periods. The carrying amounts of
financial liabilities that are subsequently measured at amortised
cost are determined based on the effective interest method.
Interest expense that is not capitalised as part of costs of an asset
is included in the ''Finance costs'' line item.

The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
(including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial
liability, or (where appropriate) a shorter period, to the net carrying
amount on initial recognition.

2.19.4.3 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer
to make specified payments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payments when due
in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company are initially
measured at their fair values and, if not designated as at FVTPL, are
subsequently measured at the higher of:

• The amount of loss allowance determined in accordance with
impairment requirements of Ind AS 109; and

• The amount initially recognised less, when appropriate, the
cumulative amount of income recognised in accordance with
the principles of Ind AS 115.

2.19.4.4 Commitments to provide a loan at below-market interest rate

Commitments to provide a loan at below-market interest rate are
initially measured at their fair values and, if not designated as at
FVTPL, are subsequently measured at the higher of:

• the amount of loss allowance determined in accordance with
impairment requirements of Ind AS 109; and

• the amount initially recognised less, when appropriate, the
cumulative amount of income recognised in accordance with
the principles of Ind AS 115.

2.19.4.5 Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency
and are measured at amortised cost at the end of each reporting
period, the foreign exchange gains and losses are determined based
on the amortised cost of the instruments and are recognised in
''Other income''.

The fair value of financial liabilities denominated in a foreign
currency is determined in that foreign currency and translated at the
spot rate at the end of each reporting period. For financial liabilities
that are measured as at FVTPL, the foreign exchange component
forms part of the fair value gains or losses and is recognised in profit
or loss.

2.19.4.6 De-recognition of financial liabilities

The Company de-recognises financial liabilities when, and only
when, the Company''s obligations are discharged, cancelled or
have expired. An exchange with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment
of the original financial liability and the recognition of a new
financial liability. Similarly, a substantial modification of the terms
of an existing financial liability (whether or not attributable to the
financial difficulty of a debtor) is accounted for as an extinguishment
of the original financial liability and the recognition of a new financial
liability. The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable is
recognised in profit or loss.

2.20 Derivative financial instruments

Derivatives are initially recognised at fair value at the date the
derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period.
The resulting gain or loss is recognised in profit or loss immediately.

2.20.1 Embedded derivatives

Derivatives embedded in non- derivative host contracts that are
not financial assets within the scope of Ind AS 109 are treated as
separate derivatives when their risks and characteristics are not
closely related to those of the host contracts and the host contracts
are not measured at FVTPL.

2.21 Offsetting

Financial assets and financial liabilities are off set and the net
amount is presented when and only when, the Company has legally
enforceable right to set off the amount it intends, either to settle
them on a net basis or to realise the asset and settle the liability
simultaneously.

2.22 Cash and Cash equivalents

The Company''s cash and cash equivalents consists of cash on
hand and in banks and demand deposits with banks, which can
be withdrawn at any time, without prior notice or penalty on the
principal.

For the purposes of cash flow statement, cash and cash equivalents
comprise cash and cheques in hand, bank balances, demand
deposits with banks, net of outstanding bank overdrafts that are
repayable on demand and considered part of the Company''s cash
management system. In the balance sheet, bank overdrafts are
presented under borrowings within current financial liabilities.

2.23 Segment reporting

Operating segments are reported in a manner consistent with
internal reporting provided to the Chief Operating Decision Maker
(CODM) of the Company. The CODM is responsible for allocating
resources and assessing performances of the operating segments
of the Company.

2.24 Earnings per share

The Company presents basic and diluted earnings per share ("EPS")
data for it''s equity shares. Basic EPS is calculated by dividing the
profit or loss attributable to equity shareholders of the Company
by weighted average number of equity shares outstanding during
the period. Diluted EPS is determined by adjusting the profit or
loss attributable to equity shareholders and the weighted average
number of equity shares outstanding for the effect of all dilutive
potential ordinary shares, which includes all stock options granted
to employees.

2.25 Exceptional items

Exceptional items refer to items of income or expenses within the
statement of profit and loss from ordinary activities which are
non-recurring and are of such size, nature or incidence that their
disclosure is considered necessary to explain the performance of
the Company.

2.26 Events after reporting date

Where events occurring after the balance sheet date provide
evidence of conditions that existed at the end of the reporting
period, the impact of such event is adjusted within the financial
statements. Otherwise, events after the balance sheet date of
material size or nature are only disclosed.

2.27 Amendments to the existing accounting standards:

On March 31, 2023, the Ministry of Corporate Affairs (MCA) has
notified Companies (Indian Accounting Standards) Amendment
Rules, 2023. This notification has resulted into amendments in the
following existing accounting standards which are applicable to
Company from April 01, 2023.

i. IND AS 101 - First-time Adoption of Indian Accounting
Standards

ii. IND AS 102 - Share-based Payments

iii. IND AS 103 - Business Combinations

iv. IND AS 107 - Financial Instruments Disclosures

v. IND AS 109 - Financial Instruments

vi. IND AS 115 - Revenue from Contracts with Customers

vii. IND AS 1 - Presentation of Financial Statements

viii. IND AS 8 - Accounting Policies, Changes in Accounting
Estimates and Errors

ix. IND AS 12 - Income Taxes

x. IND AS 34 - Interim Financial Reporting

Application of above amendments are not expected to have any
significant impact on the Company''s financial statements.

3. Critical accounting judgements and key sources of estimation
uncertainty

In the application of the Company''s accounting policies, which are
described in note 2, the management of the Company is required to
make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based
on historical experiences and other factors that are considered to
be relevant. Actual results may differ from these estimates.

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

3.1 Revenue recognition

The Company derives revenues from fixed price contracts, property
rental income and management service. The revenue recognised
on these contracts is recognised on completion of delivery of the
services.

3.2 Taxation

The Company makes estimates in respect of tax liabilities and tax
assets. Full provision is made for deferred and current taxation at
the rates of tax prevailing at the year-end unless future rates have
been substantively enacted. These calculations represent best
estimate of the tax charge that will be incurred and recovered but
actuals may differ from the estimates made and therefore affect
future financial results. The effects would be recognised in the
Statement of Profit and Loss.

Deferred tax assets arise in respect of unutilised losses and other
timing differences to the extent that it is probable that future
taxable profits will be available against which the asset can be
utilised or to the extent they can be offset against related deferred
tax liabilities. In assessing recoverability, estimation is made of
the future forecasts of taxable profit, including for transactions
expected to be consummated during the current year. If these
forecast profits do not materialise, they change, or there are
changes in tax rates or to the period over which the losses or timing
differences might be recognised, then the value of deferred tax
assets will need to be revised in a future period.

The Company has losses and other timing differences for which
no deferred tax asset has been recognised in these financial
statements. This situation can arise where the future economic
benefit of these timing differences is estimated to be not probable.
It can also arise where the timing differences are of such a nature
that their value is dependent on only certain types of profit being
earned, such as capital profits. If trading or other appropriate profits
are earned in future, these losses and other timing differences may
yield benefit to the Company in the form of a reduced tax charge.

3.3 Depreciation and useful lives of property, plant and equipment
and intangible assets

Property, plant and equipment are depreciated over the estimated
useful lives of the assets, after taking into account their estimated
residual value. Intangible assets are amortized over its estimated
useful lives. Management reviews the estimated useful lives and
residual values of the assets annually in order to determine the
amount of depreciation/ amortization to be recorded during any
reporting period. The useful lives and residual values are based on
the Company''s historical experience with similar assets and take
into account anticipated technological changes. The depreciation/
amortization for future periods is adjusted if there are significant
changes from previous estimates.

3.4 Expected credit losses on financial assets

The impairment provision of financial assets are based on
assumption about risk of default and expected timing of collection.
The Company uses judgement in making these assumptions and
selecting the inputs to the impairment calculation, based on the
Company''s history of collections, customer''s creditworthiness,
existing market condition as well as forward looking estimates at
the end of each reporting period.

3.5 Provisions

Provisions and liabilities are recognized in the period when it
becomes probable that there will be a future outflow of funds
resulting from past operations or events and the amount of cash
outflow can be reliably estimated. The timing of recognition and
quantification of the liability require the application of judgement
to existing facts and circumstances, which can be subject to change.
Since the cash outflows can take place many years in the future, the
carrying amounts of provisions and liabilities are reviewed regularly
and adjusted to take account of changing facts and circumstances.

3.6 Fair value measurements and valuation process

Some of the Company''s assets and liabilities are measured at fair
value for financial reporting purposes. Further, the Company has
used valuation experts for the purpose of ascertaining fair value
for certain assets and liabilities. In estimating the fair value of an
asset or a liability, the Company uses market-observable data to
the extent that it is available. Where Level 1 inputs are not available,
the Company engages third party qualified valuers to perform
the valuation. The management works closely with the qualified
external valuers to establish the appropriate valuation techniques
and inputs to the model.

3.7 Defined benefit obligations

The costs of providing other post-employment benefits are charged
to the Statement of Profit and Loss in accordance with Ind AS 19
"Employee benefits" over the period during which benefits is derived
from the employees'' services and is determined based on valuation
carried out by independent actuary. The costs are determined based
on assumptions selected by the management. These assumptions
include salary escalation rate, discount rates, expected rate of
return on assets and mortality rates. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit
obligation is highly sensitive to change in these assumptions.

3.8 Leases:

Ind AS 116 defines a lease term as the non-cancellable period for
which the lessee has the right-to-use an underlying asset including
optional periods, when an entity is reasonably certain to exercise
an option to extend (or not to terminate) a lease. The Company
considers all relevant facts and circumstances that create an
economic incentive for the lessee to exercise the option when
determining the lease term. The option to extend the lease term is
included in the lease term, if it is reasonably certain that the lessee
would exercise the option. The Company reassesses the option
when significant events or changes in circumstances occur that are
within the control of the lessee.

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Mar 31, 2018

1. Earnings Per Equity Share (EPS)

T asic EPS amounts are calculated by dividing the net (loss) / profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

T iluted EPS amounts are calculated by dividing the net (loss) / profit attributable to equity shareholders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

Note: Potential equity shares are anti-dilutive in nature and hence diluted earnings per share is same as basic earnings per share.

2. Employee benefit plans

3. Defined Contribution Plans

The Company makes provident fund, Employee State Insurance and employees'' pension scheme contribution to the relevant authorities, which are defined contribution plans for the qualifying employees.

4. Defined Benefit Plans

The Company has a defined benefit gratuity plan (unfunded) for qualifying employees. The defined benefit plans are administered by the Company. Under this plan, the employee is entitled to a lump-sum payment upon retirement from the services of the Company. An employee becomes eligible to receive payment upon completion of 5 years of service at the rate of 15 days of service for each completed year of service.

These plans typically expose the Company to actuarial risks such as; longevity risk and salary risk.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of the plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.

As such an increase in the salary of the plan participants will increase the plan''s liability.

No other post-retirement benefits are provided to the employees.

In respect of the said plan, the most recent actuarial valuation and the present value of the defined benefit obligation were carried out by an external expert, who is a duly registered actuary. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit credit method.

The discount rates reflect the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

The estimates of future salary increase, considered in actuarial valuation, take into account, inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market. The above information is certified by the actuary.

5. Financial instruments

6. Capital risk management

The objectives when managing capital are to safeguard the ability to continue as a going concern to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The management sets the amounts of capital required in proportion to risk. The Company manages its capital structure and adjusts it in light of changes in economic conditions and risk characteristics of the underlying assets.

The capital structure of consists of borrowings (as detailed in note 15, 18 and 20), offset by cash and bank balances (note 11), equity (comprising issued capital, reserves and retained earnings as detailed in statement of changes in shareholders'' equity), and share warrants. The debt equity ratio for current year is 0.38 as on March 31, 2018 (March 31, 2017: 0.58)

During the year, the Company''s strategy was to monitor and manage the use of funds whilst developing business strategies and marketing.

7. Financial Risk Management objectives

T wide range of risks may affect the Company''s business and financial results. Amongst other risks that could have significant influence on the Company are market risk, credit risk and liquidity risk.

The Board of Directors of the Company manage and review the affairs of the Company by setting up short term and long-term budgets by monitoring the same and taking suitable actions to minimise potential adverse effects on its operational and financial performance.

8. Market risk

The Company is primarily exposed to the following market risks.

9. Foreign Currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) and the Company''s net investments in foreign subsidiaries.

10. Interest rate risk management

The Company is exposed to interest rate risk because it borrows funds at floating interest rates also.

The sensitivity analysis for exposure to interest rates on borrowings as at the end of the reporting period indicates that a 50 basis point increase in floating interest rates on such borrowings would have decreased equity and profit for the year by Rs, 1.00 Crores and Rs, 1.03 Crores for March 31, 2018 and March 31, 2017 respectively and a 50 basis point decrease in floating interest rates on such borrowings would have increased equity and profit by the same amount respectively.

11. Credit risk management

Credit risk is the risk of financial loss to the Company if a client or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from clients and cash. Management has a credit policy in place and the exposure to credit risk is monitored on an on-going basis.

The Company has a low credit risk in respect of its trade receivables, its principal customers being reputed production houses, national broadcasters and major organisations which the Company has worked with for number of years. However, as Company grows its customer base and works with more independent producers it will experience an increased credit risk environment. The Company is also exposed to credit risk in respect of its cash and seeks to minimise this risk by holding funds on deposit with banks and others.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs, 73.20 Crores and Rs, 87.99 Crores as at March 31, 2018 and March 31, 2017 respectively, being the total of the carrying amount of the balances with banks, bank deposits, investments (excluding equity and preference investments), trade receivables, unbilled revenue and other financial assets (excluding group company receivables).

The Company''s exposure to customers is diversified and no single customer contributes to more than 10% of outstanding trade receivables and unbilled revenue as at March 31, 2018 and March 31, 2017.

12. Liquidity risk management

Liquidity risk refers to the risk that the Company may not be able to meet its financial obligations timely.

Management monitors rolling forecasts of the Company''s liquidity position (comprising of undrawn bank facilities and cash and cash equivalents) on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents. The Company manages the liquidity risk by maintaining adequate funds is cash and cash equivalents. The Company also has adequate credit facilities agreed with banks and others to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost effective manner

13. Share based payments

A. During the financial year 2014-15, the Board of Directors of the Company and its Shareholders'' approved a share option plan and reserved 17,932,738 common shares for issuance thereunder. During the financial year 2016-17, options totalling to 17,932,738 ordinary shares were granted to certain identified eligible employees. Detailed description of share based payment arrangements is as below:

(a) Date of shareholders'' approval August 01, 2014

(b) Total number of options approved under ESOS 17,932,738

(c) Vesting requirements Out of the total options granted, 45.88% options vest after 1^st year, 45.88% options vest after 2nd year and 8.24% options vest after 3^rd year from the date of respective grant.

(d) Exercise price or pricing formula Rs, 52

(e) Maximum term of options granted 2 years from each vesting date

(f) Source of shares (primary, secondary or combination) Primary

(g) Variation in terms of options No Variation

B. T he weighted average fair value of the share option granted during the financial year 2016-17 is Rs, 32.26/-. Options were priced using a Black Sholes Merton Formula pricing model. Where relevant, the expected life used in this model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions and behavior considerations. Expected volatility is based on historical sale price volatility of comparable companies in the industry over the expected life of 2 - 4 years.

Fair value of 8,227,579 option vested during the year is Rs, 24.35 Crores (previous year Rs, NIL)

Money realised by exercise of option during the year is Rs, 1.49 Crores (previous year Rs, NIL).

The options outstanding at March 31, 2018 have an exercise price of Rs, 52/- (March 31, 2017: Rs, 52/-) and a weighted average remaining contractual life of 2 years (March 31, 2017: 3 years)

Weighted average share price at the date of the exercise of share options exercised in 2017-18 is Rs, 99.60 (previous year not disclosed as no shares were exercised then).

D. Expense recognised in Statement of Profit and Loss

The Company has followed the fair value method to account for the grant of stock options and charge for the year ended March 31, 2018 is Rs, 24.71 Crores (previous year: Rs, 25.55 Crores)

14 Related party transactions

a. List of Parties where control exists, irrespective of transactions:

i) Subsidiary companies

De-fi Media Limited

Prime Focus Technologies Limited

Prime Focus Visual Effects Private Limited

GVS Software Private Limited

Prime Focus Motion Pictures Limited

PF World Limited, (Mauritius)

PF Investments Limited (Mauritius)

Prime Focus 3D India Private Limited Gener8 India Media Services Limited Reliance Media works (Mauritius) Limited PF Overseas Limited (Mauritius)

Prime Focus Malaysia Sdn. Bhd.

ii) Step-down subsidiary companies

Subsidiary companies of PF World Limited (Mauritius)

Prime Focus Luxembourg S.a.r.l

Prime Focus 3D Cooperatief U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World NV. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World NV.)

DNEG North America Inc. (Formerly known as Prime Focus North America Inc.) (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of DNEG North America, Inc.)

Prime Focus Creative Services Canada Inc. (Subsidiary of Prime Focus World NV.)

Gener8 Digital Media Services Limited, Canada (Subsidiary of Prime Focus World N.V.)

Vegas II VFX Limited (Subsidiary of Prime Focus Creative Services Canada Inc.)

Prime Focus VFX USA, Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus ME Holdings Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus World Malaysia Sdn. Bhd. (Subsidiary of Prime Focus World N.V.)

Prime Focus China Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus (HK) Holdings Limited. (Subsidiary of Prime Focus China Limited)

T NEG Creative Services Private Limited (Formerly known as Prime Focus World Creative Services Private Limited) (Subsidiary of Prime Focus World NV.)

* The value 0.00 means amount is below Rs, 50,000/-.

t Key management personnel have given personal guarantee and have pledged part of their shareholdings for borrowings obtained by the Company (Refer Notes 15 and 18). The figures of Key management personnel do not include provisions for gratuity / other employee benefit as separate actuarial valuation not available. Under ESOP Scheme 2014, 1,030,000 options were granted to Key management personnel in previous year, of which 10,000 options were exercised by Key management personnel during the year. The stock options outstanding for KMP''s as at March 31, 2018 is 2,770,000 and employee stock option expense for the year March 31, 2018 is Rs, 1.62 Crores (previous year Rs, 1.52 Crores)

0# There are no provision for doubtful debts / amount write off / written back in respect of due from / to related parties other than disclosed above if any.

Note : All contracts / arrangements with related parties are at arm’s length

15. Vide Business Transfer Agreement dated November 19, 2014 between the Company, Reliance Media Works Limited (RMW) and Reliance Land Private Limited, the Company acquired RMW''s film and media services business for consideration other than cash. Upon receipt of necessary statutory approvals, with effect from April 07, 2015, net assets of films and media services business including investments and loans in subsidiaries were transferred to and recorded by the company. Further in accordance with the said Agreement, the transfer of BOT Agreement pertaining to the Studio including other business assets and liabilities related to the BOT Agreement ("Studios") and debt facilities of Rs, 200 Crores were to be effected post receipt of the necessary additional approvals. Pending receipt of the additional approvals, the Studios'' and the debt facilities have not been transferred to and recorded by the Company. However, based on the mutual understanding with RMW, the Company, continues to operate the Studio, recognize revenue from operations and incurs operating expenses including obligations towards lease rentals and property tax.

The Company has taken certain premises on cancellable and non-cancellable operating lease basis. The tenure of the lease ranges from 11 to 180 months.

Amount of lease rental charged to the Statement of Profit and Loss in respect of non-cancellable operating leases is Rs, 1.48 crore (Previous year: Rs, 0.52 crore).

Amount of lease rental charged to the Statement of Profit and Loss in respect of cancellable operating leases is Rs, 9.89 crore (Previous year: Rs, 10.71 crore).

The Company has sublet certain premises on cancellable operating lease basis. The tenure of the lease is of 60 months. An amount of Rs, 8.85 crore (Previous year Rs, 8.20 crore) has been recognised as other operating income in respect of the sublease.

* In the above matter, the Company is hopeful of succeeding and as such does not expect any significant liability to crystalize.

16. CORPORATE SOCIAL RESPONSIBILITY

I n view of the average net loss in past three years, the Company was not required to and did not incur any expenditure towards the Corporate Social Responsibility activities during FY 2017-18 (previous year Rs, NIL).

17. SEGMENT REPORTING

As per Ind AS 108 on "Segment Reporting" segment information has been provided under the Notes to Consolidated Financial Statements.

18. EVENT AFTER REPORTING PERIOD

There were no events after the reporting period.

19. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved for issue by the Board of Directors on May 30, 2018.

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Mar 31, 2017

1. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Company''s accounting policies, which are described in note 2, the management of the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experiences and other factors that are considered to be relevant. Actual results may differ from those estimates.

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

2. Revenue recognition

The Company also derives revenues from fixed price VFX and 2D to 3D content conversion contracts. The revenue recognized on these contracts is dependent on the estimated percentage of completion at a point in time, which is calculated on the basis of the man days of work performed as a percentage of the estimated total man days to complete a contract. The actual man days and estimated man days to complete a contract are updated on a monthly basis.

The estimated man days remaining to complete a project are judgmental in nature and are estimated by experienced staff using their knowledge of the time necessary to the work.

If a contract is expected to be loss making, based on estimated costs to complete, the expected loss is recognized immediately.

3. Taxation

The Company makes estimates in respect of tax liabilities and tax assets. Full provision is made for deferred and current taxation at the rates of tax prevailing at the year-end unless future rates have been substantively enacted. These calculations represent our best estimate of the costs that will be incurred and recovered but actuals

may differ from the estimates made and therefore affect future financial results. The effects would be recognized in the Statement of Profit and Loss.

Deferred tax assets arise in respect of unutilized losses and other timing differences to the extent that it is probable that future taxable profits will be available against which the asset can be utilized or to the extent they can be offset against related deferred tax liabilities. In assessing recoverability, estimation is made of the future forecasts of taxable profit. If these forecast profits do not materialize, they change, or there are changes in tax rates or to the period over which the losses or timing differences might be recognized, then the value of deferred tax assets will need to be revised in a future period.

The Company has losses and other timing differences for which no value has been recognized for deferred tax purposes in these financial statements. This situation can arise where the future economic benefit of these timing differences is estimated to be not probable. It can also arise where the timing differences are of such a nature that their value is dependent on only certain types of profit being earned, such as capital profits. If trading or other appropriate profits are earned in future, these losses and other timing differences may yield benefit to the Company in the form of a reduced tax charge.

4. Depreciation and useful lives of property, plant and Equipment and intangible assets

Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Intangible assets are amortized over its estimated useful lives. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/ amortization to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation/ amortization for future periods is adjusted if there are significant changes from previous estimates.

5. Recoverability of trade receivable

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

6. Provisions

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.

7. Fair value measurements and valuation process

Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. Further, the Company has used valuation experts for the purpose of ascertaining fair value for certain assets and liabilities. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent that it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. The management reports the valuation findings to the board of directors of the Company to explain the cause of fluctuations in the fair value of the assets and liabilities.

8. First Time adoption of IND AS

The Company has prepared the opening balance sheet as per Ind AS as of July 1, 2015 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS by reclassifying items from previous GAAP to Ind AS as required under Ind

AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to certain exceptions and certain optional exemptions availed by the Company as detailed below.

The Company has adopted Ind AS with effect from April 01, 2016 with comparatives being restated. Accordingly, the impact of transition has been provided in the opening Reserves as at July 01, 2015 and all the periods presented have been restated accordingly.

Exemptions from retrospective application

a) Business combination exemption

The Company has applied the exemption as provided in Ind AS 101 on non-application of Ind AS 103, "Business Combinations" to business combinations consummated prior to July 01, 2015 (the "Transition Date"), pursuant to which goodwill/capital reserve arising from a business combination has been stated at the carrying amount prior to the date of transition under Indian GAAP. The Company has also applied the exemption for past business combinations to acquisitions of investments in subsidiaries / associates / joint ventures consummated prior to the Transition Date.

b) Investments in subsidiaries

The Company has elected to measure investment in subsidiaries at cost or fair value as deemed cost on date of transition.

c) Cumulative translation difference on foreign operations

The Company has elected the option to reset the cumulative translations difference on foreign operations that exist as of the transition date to zero.

d) Fair value as deemed cost exemption

The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value as at transition date except for certain class of assets which are measure at fair value as deemed cost.

a. Addition to plant and equipment includes Rs, 0.24 crores (net gain) [Previous period Rs,0.43 crores (net loss)] on account of exchange difference during the year / period.

b. Plant and equipment and vehicles includes assets taken on finance lease as under:

Gross block: Rs, 9.04 crores (March 31, 2016 : Rs, 7.71 crores; July 01, 2015 : Rs, 4.12 crores)

Depreciation charge for the year : Rs, 1.07 crores (Previous period : Rs, 0.46 crores)

Accumulated depreciation: Rs, 2.21 crores (March 31, 2016 : Rs, 1.72 crores; July 01, 2015: Rs, 1.39 crores)

Net Block: Rs, 6.84 crores (March 31, 2016 : Rs, 5.99 crores; July 01, 2015: Rs, 2.73 crores)

c. Building includes leasehold premises

Gross block: Rs, 112.20 crores (March 31, 2016: Rs, 112.20 crores; July 01, 2015 : Rs, 112.20 crores)

Depreciation charge for the year : Rs, 3.43 crores (Previous period : Rs, 2.71 crores)

Accumulated depreciation: Rs, 6.65 crores (March 31, 2016: Rs, 3.22 crores; July 01, 2015: Rs, 0.51 crores)

d. Refer note 15 and 18 for assets pledged/ hypothecated.

a. Software include assets taken on finance lease as under:

Gross Block: Rs, 1.25 crores (March 31, 2016 : Rs, 0.96 crores; July 01, 2015: Nil)

Amortisation for the year: Rs, 0.20 crores (Previous period : Rs, 0.04 crores)

Accumulated amortisation : Rs, 0.24 crores (March 31, 2016 : Rs, 0.04 crores; July 01, 2015: Nil) Net Block: Rs, 1.01 crores (March 31, 2016 : Rs, 0.92 crores; July 01, 2015: Nil)

b) These investments form part of net assets acquired on slump sale basis, recorded at fair value Rs, NIL based on the valuation report obtained. (Refer note 32).

c) The list of investment in subsidiaries, along with proportion of ownership held and country of incorporation are disclosed in note 1.1 of Consolidated Financial Statements.

d) During the year, 15,000,000 9% non-cumulative, redeemable, optionally convertible, preference shares of 10/- each of Prime focus Technologies Limited were converted to 83,916 equity shares of 10/- each at a premium of Rs, 3,977/- per share aggregating to Rs, 33.45 crores. Consequent to conversion of the said investment into equity shares, the Company has recognized gain of 18.46 crores. The said gain has been disclosed as an exceptional item in the Statement of Profit and Loss.

i. Loans given to subsidiaries except for De-Fi Media Limited are considered under "Current Loans" and are repayable on demand and management intends to receive the loan within the operating cycle. De-Fi Media Limited loan were without planned maturity nor were repayable on demand. During the year, the Company recovered the entire loan from De-Fi Media Limited

ii. All the above loans carry interest @ 5% - 15% except for loan of Rs, 93.15 crores given to Gener8 India Media Services Limited (acquired in business combination) which is interest free.

iii. All loans are given for general corporate purpose of the subsidiaries.

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

a. On November 05, 2012, the Company issued 1,901 Zero Coupon Unsecured Redeemable Non-Convertible Debentures (NCDs) of Rs, 10 Lakhs each, of the aggregate nominal value of Rs, 190.10 crores to Standard Chartered Private Equity (Mauritius) III Limited. The Debentures were issued in two series being the Series A NCDs and the Series B NCDs. The Series A NCDs comprised of 1,010 Debentures aggregating Rs, 101 crores redeemable after 5 years and the Series B NCDs comprised of 891 Debentures aggregating Rs, 89.10 crores redeemable after 6 years.

The amounts payable on redemption on Debentures are as follows:

(i) With respect to the Series A NCDs, an amount equal to 188.17% of the Principal amount of Series A NCDs.

(ii) With respect to the Series B NCDs, an amount equal to 213.41% of the Principal amount of Series B NCDs

In the event that, either the Company or the Debenture Holders are desirous of redeeming the Debentures prior to its scheduled maturity other than upon the occurrence of an Event of Default, the Company and the Debenture Holders shall mutually agree on the amounts payable to the Debenture Holders upon such early redemption and the other terms of such redemption.

b. On February 20, 2015, the Company made an offer for the issuance of upto 4,000 unlisted, unrated, redeemable debentures not convertible into Equity Shares of the Company of face value of Rs, 1 lakh each ("Debentures") aggregating upto Rs, 27 crores with a Green Shoe Option of upto Rs, 13 crores on a private placement basis. On March 04, 2015, 2,891 Debentures aggregating Rs, 28.91 crores were allotted. On April 07, 2015, the Company made an additional offer for the issuance of upto 2,000 unlisted, unrated, redeemable debentures not convertible into Equity Shares of the Company of face value of Rs, 1 lakh each ("Debentures") aggregating upto Rs,20 crores. On May 05, 2015, the Company allotted 1,580 debentures under Tranche - 1, aggregating Rs, 15.80 crores and on May 08, 2015 the Company further allotted 420 debentures under Tranche - 2, aggregating Rs, 4.20 crores. In aggregate, the company allotted 4,891 debentures amounting to Rs, 48.91 crores at 14% interest payable quarterly and a redemption premium payable on maturity of the debenture to make the IRR of 17%. Of these Debentures Rs, 28.91 crores matures in September 2017 and Rs, 20 crores matures in November 2017.

c. On August 13, 2014, the Company entered into a long-term loan agreement with others to borrow Rs, 45 crores at an interest rate of 12.50% p.a., to repay the existing term loan and for general corporate purpose which includes working capital and advance payment for capital expenditure. The term loan is to be repayable in 120 equated monthly installments starting from October 01, 2014 for loan availed on

August 29, 2014 and from November 01, 2014 for loan availed on September 05, 2014. Further, the term loan is secured by a specific charge on immovable properties of the Company. At the year end March 31, 2017, Rs,35.97 crores is disclosed as non-current and Rs,2.44 crores is disclosed as current. At the period end March 31, 2016, Rs,38.40 crores were disclosed as non-current and Rs,2.91 crores were disclosed as current. As at July 01, 2015 Rs, 40.62 crores were disclosed as non-current and Rs,2.65 crores were disclosed as current.

d. On October 19, 2015, the Company entered into an agreement for term loan with others to borrow Rs, 20 crores at an interest rate of 15.25% p.a., to repay the existing term loan and for general corporate purpose which includes working capital. The loan is repayable in 6 quarterly installments starting from end of 3rd quarter from the date of disbursement. The loan is secured by pledge of shares by promoters. At the year end March 31, 2017, 11.25 crores is disclosed as current. At the period end March 31, 2016, 11.25 crores were disclosed as non-current and Rs,8.75 crores were disclosed as current.

e. During the previous period, the Company had taken Inter Corporate Deposits (ICDs) at an interest rate of 13% p.a., for general corporate purpose which includes working capital. These inter corporate deposits were repayable after 2 years from the date of disbursement. As at March 31, 2016, outstanding balance of these inter corporate deposits was Rs, 108.38 crores. The ICDs was repaid during the year out of the proceedings received from new facility granted as mentioned in point (f) below.

f. During the current year, the Company has availed a Term Loan facility aggregating to Rs, 191 crores at an interest rate based on one-year MCLR 1.90% with a reset on yearly basis. This term loan is repayable in 84 months from date of the 1st disbursement including 6 months moratorium, it is to be repaid in 26 quarterly installments (post 6 months moratorium). The term loan is secured with exclusive charge over present and future current assets and movable fixed assets, personal guarantees of promoters, 35% of shares of the Company held by promoters, Corporate Guarantee of Reliance Capital Limited of Rs, 100 crore, exclusive charge by way of mortgage of immovable properties, pledge of 30% shares of subsidiaries viz; Prime Focus World Creative Services Private Limited, Prime Focus Technologies Limited and its subsidiaries, PF World Limited, Mauritius, Prime Focus Luxembourg s.a.r.l., Prime Focus 3D Cooperatief U.A. and pledge over $25 million worth shares of Digital Domain Holdings Limited, as and when, received by the Company.

As at March 31, 2017 out of the above availed facility, Company took the disbursement aggregating to Rs, 148.50 crore. At the year-end, out of the outstanding loan amount 127.51 crore (net of transaction fees) is disclosed as non-current and Rs,4.46 crore is disclosed as current.

g. Finance lease

The Company has acquired certain equipments (mainly equipment, office equipment and vehicles) under finance leases. The average lease term is around 5 years. The Company has option to purchase the equipment for a nominal amount at the end of the lease term. The CompanyRs,s obligation under finance leases are secured by hypothecation of plant and equipment, office equipment and vehicles taken on lease.

Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 11.70% to 14.50% per annum.

h. Foreign currency loans - buyerRs,s credit of Rs, 13.91 crores (March 31, 2016: Rs, 11.77 crores; July 01, 2015: 16.20 crores) are secured by pari passu charge on the immoveable assets of the Company, both present and future (except building in Royal Palms, Goregaon, Mumbai), pari passu charge on the Company’s current assets both present and future and personal guarantees of the promoter director. Also secured against margin monies - fixed deposits. Interest rate ranges from 1% to 2% p.a. with maturity profile of 2-3 years. As at March 31, 2017 Rs,8.50 crores(March 31, 2016: Rs,8.48 crores; July 01, 2015: Rs,6.58 crores) is non-current and Rs,5.41 crores (March 31, 2016: Rs,3.29 crores; July 01, 2015: Rs,9.62 crores) is current.

a. In February 2011, the Company entered into an agreement for a working capital demand loan of Rs,25 crores from a bank for a term of six months at an interest rate of 13% p.a. This is renewed periodically and is secured by first pari passu charge on the Company’s current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at March 31, 2016 and as at July 01, 2015, Rs,10 crores were outstanding and was included in short-term demand loans. The said loan was repaid during the year.

b. On November 06, 2012, the Company entered in to an agreement for pre-shipment financing under export orders ("Facility") of Rs,38.50 crores for funding against confirmed orders up to 100% of export sales. The interest rate for the facility drawn in Indian rupees is base rate plus margin and for facility drawn in currency other than Indian rupees is LIBOR plus margin. There are sub-limits under the facility for financial guarantees / standby letter of credit for payment undertaking for buyer’s credit, pre-shipment financing under export letter of credit, export bills discounting, export invoice financing, import invoice financing, overdraft, short-term loans and bonds/ guarantees. The Facility is secured by first pari-passu charge on stock and book debts of the Company, personal guarantee of the promoters, first pari-passu charge on movable fixed assets of the Company, first pari-passu charge on immovable fixed assets located at Royal Palms-Mastermind, Goregoan, Mumbai and Raghuvanshi Mills, Mumbai and pledge of shares of the Company. As at March 31, 2017 Rs,12.90 crores, as at March 31, 2016 Rs,14.66 crores and as at July 01, 2015 Rs, 14.67 crores were outstanding under the Facility and included in cash credit/ overdraft.

c. On November 05, 2014, the Company raised Rs, 5 crores from others at an interest rate of 15.50% per annum for a term of 6 months from date of disbursement. This loan is renewed and is secured by pledge of shares by a promoter director. The loan was repaid during the previous period.

d. On October 28, 2014, the Company borrowed Rs, 50 lakhs as working capital demand loan from a bank for a term of ten months at an interest rate of 13.75%. The short-term demand loan is secured by first pari passu charge on the Company’s current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at March 31, 2016 and as at July 01, 2015, Rs, 0.50 crores were outstanding and was included in short-term demand loans. The said loan was repaid during the year.

e. On February 18, 2015, the Company raised Rs, 5 crores from others at an interest rate of 17% per annum for a term of 363 days from the date of disbursement. On February 15,2016, the said loan of Rs, 5 crores was repaid and on February 16, 2016, March 02, 2016 and March 09, 2016 the Company further borrowed Rs, 5.75 Crores; Rs, 2.25 cores and Rs, 2 crores respectively. The short-term demand loan is secured by pledge of shares by a promoter director. As at March 31, 2016 Rs,10 crores and as at July 01, 2015 Rs, 5 crores was outstanding and is included under shortterm demand loan. The said loan was repaid during the year.

f. Cash credits/ overdraft from banks are secured against first pari passu charge on the Company’s current assets both present and future, personal guarantees and pledge of shares by the promoter director. The cash credit is repayable on demand and carries interest at the rate of 14.00% to 14.75% per annum. As at March 31, 2017 the outstanding is Rs,19.69 crores and as at March 31, 2016 and July 01, 2015, the cash credits/ overdraft outstanding were Rs,11.38 crores and Rs, 18.36 crores respectively.

g. On January 31, 2013, the Company entered into an agreement for a working capital loan of Rs,15 crores from others at an interest rate of 16% per annum for a term of 12 months from the date of disbursement. This loan is renewed periodically and is secured by personal guarantee and pledge of shares by a promoter director. On February 01, 2016, the Company rolled over the said loan at an interest rate of 15.50% per annum for a term of 12 months from the date of renewal. On January 21, 2015, the Company additionally borrowed Rs,5 crores for general corporate purpose at an interest rate of 15.50% per annum for a term of 12 months from the date of disbursement. On January 22, 2016, the Company rolled over the loan at an interest rate of 15.50% per annum for a term of 12 months from the date of renewal. The general corporate purpose loan is secured by personal guarantee and pledge of shares by a promoter director. As at March 31, 2016 Rs,13.50 crores and as at July 01, 2015 Rs, 17.74 crores were outstanding and was included under short-term demand loan. The said loan was repaid during the year.

h. On September 14, 2015, the Company entered into an agreement for a working capital demand loan of Rs,10 crores from a bank for a term of 90 days at an interest rate of 13.90% per annum. This loan is renewed periodically and is secured by first pari passu charge on the Company’s current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at March 31, 2017 and as at March 31, 2016, Rs,10 crores are outstanding and is included in short-term demand loans.

G. The unabsorbed business losses expire after seven years from the assessment year and unabsorbed depreciation has indefinite life.

9. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the net (loss) / profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year / period.

Diluted EPS amounts are calculated by dividing the net (loss) / profit attributable to equity shareholders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

10. Employee benefit plans

11. Defined contribution plans

''The Company’s defined contribution plans are provident fund, Employee State Insurance and employees’ pension scheme (under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952).

12. Defined benefit plans

The Company has a defined benefit gratuity plans (unfunded) for qualifying employees of its operations in India. The defined benefit plans are administered by the Company. Under this plan, the employee is entitled to a lump-sum payment upon retirement from the services of the Company. An employee becomes eligible to receive payment upon completion of 5 years of service at the rate of 15 days of service for each completed year of service.

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

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of the plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.

As such an increase in the salary of the plan participants will increase the plan’s liability.

No other post-retirement benefits are provided to the employees.

In respect of the said plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out by an external expert, who’s a duly registered actuary. The present value of the defined benefit obligation and the related current service cost and past service cost, where measured using the projected unit credit method.

The discount rates reflect the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

The estimates of future salary increase, considered in actuarial valuation, take into account, inflation, seniority, promotions and other relevant factors, such as demand and supply in the employment market. The above information is certified by the actuary.

(v) The expected contributions for Defined Benefit Plan for the next financial year will be in line with financial year 2016-17.

13. Financial instruments

14. Capital Risk Management

The objectives when managing capital are to safeguard the ability to continue as a going concern to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The management sets the amounts of capital required in proportion to risk. The Company manages its capital structure and adjusts it in light of changes in economic conditions and risk characteristics of the underlying assets.

The capital structure of consists of borrowings (as detailed in note 15, 18 and 20), offset by cash and bank balances (note 11), and equity (comprising issued capital, reserves and retained earnings as detailed in statement of changes in shareholders’ equity). The debt equity ratio for current year is 0.51 as on March 31, 2017 (0.45 as on March 31, 2016)

During the year, the Company’s strategy was to monitor and manage the use of funds whilst developing business strategies and marketing. The Company is not subject to any externally imposed capital requirements

15. Financial risk management objectives

A wide range of risks may affect the Company’s business and financial results. Amongst other risks that could have significant influence on the Company are market risk, credit risk and liquidity risk.

The Board of Directors of the Company manage and review the affairs of the Company by setting up short term and long-term budgets by monitoring the same and taking suitable actions to minimize potential adverse effects on its operational and financial performance.

16. Market risk

The Company is primarily exposed to the following market risks.

17. Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency) and the Company’s net investments in foreign subsidiaries.

The Company’s sensitivity to a 5% appreciation/depreciation of above mentioned foreign currencies with respect to Rupee would result in decrease/ increase in the Company’s net profit / (loss) before tax by approximately Rs, 6.32 Crores for the year ended March 31, 2017 (March 31, 2016: Rs,9.88 crores). This sensitivity analysis includes only outstanding foreign currency denominated monetary items.

18. Interest rate risk management

The Company is exposed to interest rate risk because it borrows funds at floating interest rates also.

The sensitivity analysis for exposure to interest rates on borrowings as at the end of the reporting period indicates that a 50 basis point increase in floating interest rates at the reporting date would have decreased equity and profit for the year / period by Rs, 1.03 Crore and Rs, 0.29 crore for March 31, 2017 and March 31, 2016 respectively and a 50 basis point decrease in floating interest rates at the reporting date would have increased equity and profit by the same amount respectively.

19. Credit risk management

Credit risk is the risk of financial loss to the Company if a client or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company receivables from clients and cash. Management has a credit policy in place and the exposure to credit risk is monitored on an on-going basis.

The Company has a low credit risk in respect of its trade receivables, its principal customers being reputed production houses, national broadcasters and major organizations which the Company has worked with for number of years. However, as the Company grows its customer base and works with more independent producers it will experience an increased credit risk environment. The Company is also exposed to credit risk in respect of its cash and seeks to minimize this risk by holding funds on deposit with major financial institutions.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs, 358.56 crores, Rs, 382.04 crores and Rs, 322.60 crores as at March 31, 2017; March 31, 2016 and July 01, 2015 respectively, being the total of the carrying amount of the balances with banks, bank deposits, investments excluding equity and preference investments, trade receivables, unbilled revenue and other financial assets.

The Company’s exposure to customers is diversified and no single customer contributes to more than 10% of outstanding trade receivables and unbilled revenue as at March 31, 2017 and March 31, 2016.

0. Liquidity risk management

Liquidity risk refers to the risk that the Company may not be able to meet its financial obligations timely.

Management monitors rolling forecasts of the Company’s liquidity position (comprising of undrawn bank facilities and cash and cash equivalents) on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents.

30. Share based payments

A. During the financial year 2014-15, the Board of Directors of PFL and its Shareholders’ approved a share option plan and reserved 17,932,738 common shares for issuance there under. During the financial year 2016-17, option totaling to 17,932,738 ordinary shares were granted to certain identified eligible employees of the Company. Detailed description of share based payment arrangements is as below:

(a) Date of shareholders’ approval August 01, 2014

(b) Total number of options approved under ESOS 17,932,738

(c) Vesting requirements Out of the total options granted, 45.88% options vest after 1st year,

45.88% options vest after 2nd year and 8.24% options vest after 3rd year from the date of respective grant.

(d) Exercise price or pricing formula '' 52

(e) Maximum term of options granted 2 years from each vesting date

(f) Source of shares (primary, secondary or combination) Primary

(g) Variation in terms of options No Variation

B. The weighted average fair value of the share option granted during the financial year 2016-17 is '' 32.26. Options were priced using a Black Sholes Merton Formula pricing model. Where relevant, the expected life used in this model has been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions and behavior considerations. Expected volatility is based on historical sale price volatility of comparable companies in the industry over the expected life of 2 - 4 years.

Option vested during the year is '' NIL (previous period '' NIL)

Money realized by exercise of option during the year is Rs, NIL (previous period Rs, NIL)

The options outstanding at March 31, 2017 have an exercise price of Rs, 52/- (March 31, 2016: Rs, NIL) and a weighted average remaining contractual life of 3 years (March 31, 2016: N.A. years)

Weighted average share price at the date of the exercise of share options exercised in 2016-17 is not disclosed as no share were exercised during this year.

D. Expense recognized in statement of profit and loss

The Company has followed the fair value method to account for the grant of stock options, profit and loss impact for the year ended March 31, 2017 is Rs,25.55 Crores (previous period : Nil)

21. Related party transactions

a. List of Parties where control exists, irrespective of transactions:

i) Subsidiary companies

De-fi Media Limited (formerly known as Prime Focus International Limited)

Prime Focus Technologies Limited Prime Focus Visual Effects Private Limited GVS Software Private Limited Prime Focus Motion Pictures Limited PF World Limited, (Mauritius)

PF Investments Limited (Mauritius)

Prime Focus 3D India Private Limited Gener8 India Media Services Limited Reliance MediaWorks (Mauritius) Limited (w.e.f. April 07, 2015)

PF Overseas Limited (Mauritius)

Prime Focus Malaysia Sdn Bhd (w.e.f. July 15, 2015)

ii) Step-down subsidiary companies

Subsidiary companies of PF World Limited (Mauritius)

Prime Focus Luxembourg S.a.r.l

Gener8 Digital Media Services Limited, Canada

Prime Focus 3D Cooperatief U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World N.V. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus North America Inc. (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc.)

Prime Focus Creative Services Canada Inc. (Subsidiary of Prime Focus World N.V.)

Vegas II VFX Limited (Subsidiary of Prime Focus Creative Services Canada Inc.)

Prime Focus VFX USA, Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus ME Holdings Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus World Malaysia sdn bhd (Subsidiary of Prime Focus World N.V.)

Prime Focus China Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus (HK) Holdings Limited. (Subsidiary of Prime Focus China Limited)

Prime Focus World Creative Services Private Limited (Subsidiary of Prime Focus World N.V.)

Double Negative India Pvt. Ltd. (Formerly known as Reliable Laptops Private Limited) (Subsidiary of Prime Focus World Creative Services Private Limited)

Double Negative Holdings Limited (Subsidiary of Prime Focus World N.V.)

Double Negative Limited UK (Subsidiary of Double Negative Holdings Limited)

Double Negative Singapore Pte Limited (Subsidiary of Double Negative Holdings Limited)

Double Negative Canada Productions Limited (Subsidiary of Double Negative Holdings Limited)

Double Negative Film Limited UK (Subsidiary of Double Negative Holdings Limited)

Double Negative Huntsman VFX Limited (Subsidiary of Double Negative Canada Productions Limited)

Double Negative LA LLC (w.e.f. 07.03.2017) (Subsidiary of Double Negative Holdings Limited)

Prime Focus Academy of Media & Entertainment Studies (w.e.f. October 01, 2016) (Subsidiary of Prime Focus World Creative Services Private Limited)

Prime Focus Animation UK Limited (w.e.f. January 16, 2017) (Subsidiary of Prime Focus International Services UK Limited) Subsidiary companies of Prime Focus Technologies Limited

Prime Focus Technologies UK Limited Prime Focus Technologies, Inc.

Prime Post Europe Ltd (Subsidiary of Prime Focus Technologies UK Limited)

DAX PFT LLC (Subsidiary of Prime Focus Technologies, Inc.)

DAX Cloud ULC (Subsidiary of DAX PFT LLC)

Subsidiary companies of Reliance MediaWorks (Mauritius) Limited

Reliance Lowry Digital Imaging Services Inc.

b. List of related parties with whom transactions have taken place during the period / year

i) Subsidiary companies

Prime Focus Technologies Limited Prime Focus Visual Effects Private Limited GVS Software Private Limited Prime Focus 3D India Private Limited Prime Focus Motion Pictures Limited De-Fi Media Limited PF World Limited

Gener8 India Media Services Limited Reliance MediaWorks (Mauritius) Limited Prime Focus Malaysia sdn bhd

ii) Step down subsidiary companies Prime Focus Creative Services Canada Inc Prime Focus International Services UK Limited Prime Focus World N.V.

Prime Focus World Creative Services Private Limited Prime Focus Technologies, Inc Double Negative India Private Limited

iii) Key management personnel

Mr. Namit Malhotra - CEO, Chairman and Executive Director Mr. Naresh Malhotra - Whole-time Director Mr. Ramakrishnan Sankaranarayanan - Managing Director Mr. Vikas Rathee - CFO

Ms. Kirti Desai - Company Secretary (resigned w.e.f. July 07, 2015)

Ms. Parina Shah - Company Secretary (w.e.f. September 12, 2015)

iv) Enterprises owned or significantly influenced by Key Management Personnel or their relatives Blooming Buds Coaching Private Limited

N2M Realty Private Limited Monsoon Studio Private Limited

v) Enterprises exercising significant influence over the Company Reliance MediaWorks Limited

Standard Chartered Private Equity (Mauritius) III Limited Standard Chartered Private Equity (Mauritius) Limited Standard Chartered Bank

*The value Rs, 0.00 means amount is below 50,000/

* ¹Key management personnel have given personal guarantee and have pledged part of their shareholdings for borrowings obtained by the Company (Refer Notes 15 and 18). The figures of Key management personnel do not include provisions for gratuity / other employee benefit as separate actuarial valuation not available. Under ESOP Scheme 2014, 1,030,000 options were granted to Key Management Personnel during the year

## There are no provision for doubtful debts / amount write off / written back in respect of due from / to related parties other than disclosed above if any.

Note : All contacts / arrangements with related parties are at arm’s length.

22. Vide Business Transfer Agreement dated November 19, 2014 between the Company, Reliance Media Works Limited (RMW) and Reliance Land Private Limited, the Company acquired RMW’s film and media services business for consideration other than cash. In accordance with the said Agreement, the transfer of BOT Agreement pertaining to the Studio including other business assets and liabilities related to the BOT Agreement ("Studios") and debt facilities of Rs, 20,000 lac was to be effected post receipt of the necessary additional approvals. Pending receipt of the additional approvals, the Studios’ and the debt facilities have not been transferred to and recorded by the Company. However, based on the mutual understanding with RMW, the Company, continues to operate the Studio, recognize revenue from operations and incurs operating expenses including obligations towards lease rentals and property tax.

Amount of lease rental charged to the Statement of Profit and Loss in respect of non-cancellable operating leases is Rs, 0.52 crore (Previous year: Rs, 0.15 crore).

The Company has taken certain premises on cancellable operating lease basis. The tenure of the lease ranges from 11 to 180 months. Amount of lease rental charged to the Statement of Profit and Loss in respect of cancellable operating leases is Rs,10.71 crore (Previous year: Rs,8.40 crore). The Company has sublet certain premises on cancellable operating lease basis. The tenure of the lease if of 60 months. An amount of Rs, 8.20 crore (Previous year Rs, 6.85 crore) has been recognized as other operating income in respect of the sublease.

23. Corporate social responsibility

The Company did not spend on the Corporate social responsibility activities during FY 2016-17 considering the losses.

24. First-time IND AS adoption reconciliation

The financial statements have been prepared in accordance with the Indian Accounting Standards (herein after referred to as ''Ind AS’) including the Accounting standards under the relevant provision of Companies Act, 2013.

These financial statements are the Company’s first Ind AS financial statements. Upto the period ended March 31, 2016, the Company prepared its financial statements in accordance with the requirement of Indian GAAP which includes Standard notified under the Companies (Accounting Standards) Rules, 2006 (hereinafter referred to as ''Previous GAAP’). The date of transition to Ind AS is July 01, 2015.

This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at July 01, 2015 and the financial statements as at and for the period ended March 31, 2016.

Effect of Ind AS adoption on the Cash flow Statement:

There are no material adjustment to the Statement of cash flow as reported in the previous GAAP.

Notes to first time adoption

a) Deemed cost for property, plant and equipment

The Company has elected to use fair value as deemed cost for its Buildings as at the transition date. As a result, the value of property, plant and equipment increased by '' 133.87 crores in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves.

b) Deemed cost for investments

The Company has elected to use fair value as deemed cost for the equity based investments in two of its subsidiaries.

c) Trade receivables

As per Ind AS 109, the Company has applied expected credit loss model for recognizing the allowance for doubtful debts.

d) Security deposits

Under the previous GAAP, interest free lease deposit were recorded at their transaction value. On transaction to Ind AS, these lease deposits are premeasured at amortized cost using the effective interest rate method. The difference between the transaction value of the deposit and amortized cost is regarded as prepaid rent and recognized as expenses uniformly over the lease period. Interest income, measured by the effective interest rate method is accrued. The effect of these is reflected in total equity and / or profit or loss, as applicable.

e) Embedded derivatives

The Company has identified embedded derivatives in its non-convertible debentures that has option to convert the debentures into its subsidiaries shares at fair value on maturity. The embedded derivative was carved out and separately valued at transition date. Balance portion of debt are recognized using effective rate method.

f) Deferred tax

The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the reserves on date of transition with consequential impact to the statement of profit and loss for the subsequent period.

g) Retained earnings

Retained earnings as at July 01, 2015 has been adjusted consequent to the above Ind AS transition adjustments net of deferred tax

h) Re-measurement of defined benefit obligation

Under previous GAAP, actuarial gains and losses were recognized in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of re-measurement of net defined benefit liability, which is recognized in other comprehensive income in respective years.

38. The Board of Directors of the Company vide resolution passed on September 17, 2015 inter-alia, considered and approved re-alignment of the Financial Year of the Company in accordance with Section 2(41) of the Companies Act, 2013. Accordingly, the financial year 2015-16 is for a period of 9 months ending on March 31, 2016 and therefore the figures of the last financial period which are for nine (9) months are not comparable with figures of the current financial year, which is for twelve (12) months.

* For the purpose of this clause ''Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated November 08, 2016

25. Segment Reporting

As per Ind AS 108 on "Segment Reporting" segment information has been provided under the Notes to Consolidated Financial Statements.

26. Event after the reporting period

There were no events after the reporting period.

27. Approval of Financial Statements

The financial statements were approved for issue by the board of directors on May 23, 2017.

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Mar 31, 2016

b. Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of '' 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all liabilities, in proportion to their shareholding.

c. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

e. In the Board of Directors meeting held on July 02, 2014 approval was granted to introduce and implement Employee Stock Option Scheme titled ''PFL-ESOP Scheme 2014'' whereby stock options up to 6% of the paid up capital of the Company (post preferential allotment) aggregating 17,932,738 stock options would be issued to eligible employees of the Company, its subsidiaries and associates. The said scheme was approved by the shareholders in the Extra-ordinary General Meeting held on August 01, 2014.

a. On November 05, 2012, the Company issued 1,901 Zero Coupon Unsecured Redeemable Non-Convertible Debentures (NCDs) of Rs, 1,000,000 each, of the aggregate nominal value of Rs, 1,901,000,000 to Standard Chartered Private Equity (Mauritius) III Limited. The Debentures were issued in two series being the Series A NCDs and the Series B NCDs. The Series A NCDs comprised of 1,010 Debentures aggregating Rs,1,010,000,000 redeemable after 5 years and the Series B NCDs comprised of 891 Debentures aggregating Rs, 891,000,000 redeemable after 6 years.

The amounts payable on redemption on Debentures are as follows:

i. With respect to the Series A NCDs, an amount equal to 188.17% of the Principal amount of Series A NCDs.

ii. With respect to the Series B NCDs, an amount equal to 213.41% of the Principal amount of Series B NCDs

In the event that either the Company or the Debenture Holders are desirous of redeeming the Debentures prior to its scheduled maturity other than upon the occurrence of an Event of Default, the Company and the Debenture Holders shall mutually agree on the amounts payable to the Debenture Holders upon such early redemption and the other terms of such redemption.

b. On February 20, 2015 the Company made an offer for the issuance of up to 4,000 unlisted, unrated, redeemable debentures not convertible into Equity Shares of the Company of face value of Rs, 1,00,000/- each ("Debentures") aggregating up to Rs, 270,000,000 with a Green Shoe Option of up to Rs, 130,000,000 on a private placement basis. On March 04, 2015, 2,891 Debentures aggregating Rs, 289,100,000 were allotted. On April 7, 2015 the Company made an additional offer for the issuance of up to 2,000 unlisted, unrated, redeemable debentures not convertible into Equity Shares of the Company of face value of Rs, 1,00,000/- each ("Debentures") aggregating up to Rs, 200,000,000. On May

5, 2015, the Company allotted 1,580 debentures under Tranche - 1, aggregating Rs, 158,000,000 and on May 08, 2015 the Company further allotted 420 debentures under Tranche - 2, aggregating Rs, 42,000,000. In aggregate, the company allotted 4,891 debentures amounting to Rs, 489,100,000 at 14% interest payable quarterly and a redemption premium payable on maturity of the debenture to make the IRR of 17%. Of these Debentures Rs, 289,100,000 mature in August 2017 and Rs, 200,000,000 matures in November 2017.

c. On August 13, 2014, the Company entered into a long term loan agreement with others to borrow Rs, 450,000,000 at an interest rate of 12.50% p.a., to repay the existing term loan and for general corporate purpose which includes working capital and advance payment for capital expenditure. The term loan is to be repayable in 120 equated monthly installment starting from October 01, 2014 for loan availed on August 29, 2014 and from November 01, 2014 for loan availed on September 05, 2014. Further, the term loan is secured by a specific charge on immovable properties of the Company. At the period end, Rs, 384,009,988 is disclosed as non-current and Rs, 29,134,516 is disclosed as current. As at June 30, 2015 Rs, 432,737,071 is disclosed as non-current.

d. On October 19, 2015, the Company entered into an agreement for term loan with others to borrow Rs, 200,000,000 at an interest rate of 15.25% p.a., to repay the existing term loan and for general corporate purpose which includes working capital. The loan is repayable in 6 quarterly installments starting from end of 3rd quarter from the date of disbursement. The loan is secured by pledge of shares by promoters. At the period end Rs, 112,500,000 is disclosed as non-current and Rs, 87,500,000 is disclosed as current.

e. During the current period, on various dates, the Company entered into an agreement for an unsecured inter corporate deposit aggregating Rs, 1,083,800,000 at an interest rate of 13% p.a., for general corporate purpose which includes working capital. These inter corporate deposits are repayable after 2 years from the date of disbursement. As at March 31, 2016, outstanding balance of these inter corporate deposits are Rs, 1,083,800,000.

Finance lease obligations are secured by hypothecation of plant and equipment, office equipment and vehicles taken on lease.

g. Foreign currency loans - buyer''s credit are secured by pari passu charge on the immoveable assets of the Company, both present and future (except building in Royal Palms, Goregaon, Mumbai), pari passu charge on the Company''s current assets both present and future and personal guarantees of the promoter director.

The Company had recognized a deferred tax asset on the carry forward losses in the earlier years. Based on the agreements entered into by the Company for lease/ sub-lease of its premises and to render outsourcing service to its subsidiaries coupled with the revenue from existing business activities, the management is confident that sufficient taxable income to offset carry forward losses would be generated.

a. In February 2011, the Company entered into an agreement for a working capital demand loan of Rs, 250,000,000 from a bank for a term of six months at an interest rate of 13% p.a. This is renewed periodically and is secured by first pari passu charge on the Company''s current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at March 31, 2016 and as at June 30, 2015, Rs, 100,000,000 is outstanding and is included in short-term demand loans.

b. On November 6, 2012, the Company entered in to an agreement for pre-shipment financing under export orders ("Facility") of Rs, 385,000,000 for funding against confirmed orders up to 100% of export sales. The interest rate for the facility drawn in Indian rupees is base rate plus margin and for facility drawn in currency other than Indian rupees is LIBOR plus margin. There are sub-limits under the facility for financial guarantees / standby letter of credit for payment undertaking for buyer''s credit, pre-shipment financing under export letter of credit, export bills discounting, export invoice financing, import invoice financing, overdraft, short-term loans and bonds/ guarantees. The Facility is secured by first pari-passu charge on stock and book debts of the Company, personal guarantee of the promoters, first pari-passu charge on movable fixed assets of the Company, first pari-passu charge on immovable fixed assets located at Royal Palms-Mastermind, Goregoan, Mumbai and Raghuvanshi Mills, Mumbai and pledge of shares of the Company. As at March 31, 2016 Rs, 146,607,729 and as at June 30, 2015 Rs, 146,718,825 is outstanding under the Facility and included in cash credit/ overdraft.

c. On October 28, 2014, the Company borrowed Rs, 5,000,000 as working capital demand loan from a bank for a term of ten months at an interest rate of 13.75%. The short-term demand loan is secured by first pari passu charge on the Company''s current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at March 31, 2016 and as at June 30, 2015, Rs, 5,000,000 is outstanding and is included in short-term demand loans.

d. On November 5, 2014, the Company raised Rs, 50,000,000 from others at an interest rate of 15.5% per annum for a term of 6 months from date of disbursement. This loan is renewed and is secured by pledge of shares by a promoter director. The loan was repaid during the period.

e. On February 18, 2015, the Company raised Rs, 50,000,000 from others at an interest rate of 17% per annum for a term of 363 days from the date of disbursement. The short-term demand loan is secured by pledge of shares by a promoter director. As at March 31, 2016 Rs, 100,000,000 and as at June 30, 2015 Rs, 50,000,000 was outstanding and is included under short-term demand loan.

f. Cash credits/ overdraft from banks are secured against first pari passu charge on the Company''s current assets both present and future, personal guarantees and pledge of shares by the promoter director. The cash credit is repayable on demand and carries interest at the rate of 14.50% to 14.75% per annum. As at March 31, 2016 and June 30, 2015, the cash credits/ overdraft outstanding were Rs, 113,750,673 and Rs, 183,587,792 respectively.

g. On January 31, 2013, the Company entered into an agreement for a working capital loan of Rs, 150,000,000 from others at an interest rate of 16% per annum for a term of 12 months from the date of disbursement. This loan is renewed periodically and is secured by personal guarantee and pledge of shares by a promoter director. On February 01, 2016, the Company rolled over the said loan at an interest rate of 15.50% per annum for a term of 12 months from the date of renewal. On January 21, 2015, the Company additionally borrowed Rs, 50,000,000 for general corporate purpose at an interest rate of 15.50% per annum for a term of 12 months from the date of disbursement. On January 22, 2016, the Company rolled over the loan at an interest rate of 15.50% per annum for a term of 12 months from the date of renewal. The general corporate purpose loan is secured by personal guarantee and pledge of shares by a promoter director. As at March 31, 2016 Rs, 135,000,000 and as at June 30, 2015 Rs, 177,400,000 was outstanding and is included under short-term demand loan.

h. On September 14, 2015, the Company entered into an agreement for a working capital demand loan of Rs, 100,000,000 from a bank for a term of 90 days at an interest rate of 13.90% per annum. This loan is renewed periodically and is secured by first pari passu charge on the Company''s current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at March 31, 2016, Rs, 100,000,000 is outstanding and is included in short-term demand loans.

i. On November 06, 2015, the Company entered into an agreement for an unsecured inter-corporate deposit of Rs, 330,000,000 from others at an interest rate of 13% p.a., for general corporate purpose which includes working capital. The inter-corporate deposit was repaid during the period.

j. On April 20, 2015, the Company entered in an agreement with others for an unsecured demand loan for an amount not exceeding Rs, 100,000,000 in as many tranches as parties mutually decide. Of the total available limits, the Company has availed loan of Rs, 60,000,000 during the period for working capital purpose at an interest rate of 11% p.a. The outstanding balance as on March 31, 2016 is Rs, Nil.

Other payables include withholding taxes, service tax payable and employer and employee contribution to provident and other funds.

a. Additions to plant and equipment includes Rs, 4,280,189 (net loss) [Previous year: Rs, 2,635,642 (net loss)] on account of exchange difference during the period.

b. Plant and equipment and vehicles include assets taken on finance lease as under:

Gross block: Rs, 77,131,969 (Previous year: Rs, 41,233,601)

Depreciation charge for the period: Rs, 4,564,751 (Previous year: Rs, 7,171,487)

Accumulated depreciation: Rs, 17,211,379 (Previous year: Rs, 13,906,109)

Net block: Rs, 59,920,590 (Previous year: Rs, 27,327,492)

c. Building includes leasehold premises of Rs, 651,900,000 and its accumulated depreciation of Rs, 20,340,351 (Previous year: Rs, 651,900,000 and Rs, 5,055,351 respectively)

b. On March 31, 2015 the Company sold its entire holdings of 21,492,003 ordinary shares of Prime Focus London Plc., a subsidiary company incorporated in the U.K. for a consideration of Rs, 37,074,693. After the reversal of provision of Rs, 514,636,483 made in respect of this investment in the past, the Company incurred a loss of Rs, 106,971,970, which was disclosed as an exceptional item in the previous year (Refer note 22). Of the total consideration, Rs, 18,967,001 (previous year Rs, 19,987,159) is outstanding as at March 31, 2016. (Refer note 17).

c. These investments form part of net assets acquired on slump sale basis, recorded at fair value Rs, Nil based on valuation report obtained. (Refer note 28).

a. Loans given to subsidiaries except for De-Fi Media Limited are considered under "Short-Term Loans and Advances" and are repayable on demand and management intends to receive the loan within an operating cycle. De-Fi Media Limited loan is without planned maturity nor is repayable on demand.

b. All the above loans carry interest @ rate of 10% - 15% except for loan of Rs, 909,785,248 given to Gener8 India Media Services Limited (acquired in business combination) which is interest free.

c. All loans are given for general corporate purpose of the subsidiaries.

d. There are no advances in the nature of loans.

ii. Investment by loanee in the shares of the subsidiaries.

1. Leases

The Company has taken premises on non-cancellable operating lease basis. The tenure of leases ranges from 36 to 180 months with non-cancellable periods ranging from 12 to 60 months. Future lease rentals in respect of the premises taken on non-cancellable operating leases are as follows:

Amount of lease rental charged to the Statement of Profit and Loss in respect of non-cancellable operating leases is Rs, 1,431,127 (Previous year: Rs, 1,736,056).

The Company has taken certain premises on cancellable operating lease basis. The tenure of the lease ranges from 11 to 180 months. Amount of lease rental charged to the Statement of Profit and Loss in respect of cancellable operating leases is Rs, 80,458,390 (Previous year: Rs, 90,358,148).

The Company has sublet certain premises on cancellable operating lease basis. The tenure of the lease is of 60 months. An amount of Rs, 66,413,951 (Previous year: Rs, 80,773,094) has been recognized as other operating income in respect of the sublease (Refer note 27).

2. Segment information

Business is the primary segment for the Company being post production activities. Since, the Company''s entire operations are governed by the same set of risks and returns, these have been considered as representing a single segment.

Segment information for secondary segment reporting (by geographical segment based on location of customers)

3. Related party disclosures

a. List of Parties where control exists, irrespective of transactions:

i) Subsidiary companies

Prime Focus London Plc, UK (till March 31, 2015) (Refer note 13(b))

De-fi Media Limited (formerly known as Prime Focus International Limited)

Prime Focus Technologies Private Limited Prime Focus Visual Effects Private Limited GVS Software Private Limited Prime Focus Motion Pictures Limited PF World Limited, (Mauritius)

PF Investments Limited (Mauritius)

Prime Focus 3D India Private Limited

Gener8 India Media Services Limited (w.e.f. April 07, 2015) (formerly known as Prime Focus Entertainment Services Limited / Reliance Media Works Entertainment Services Limited)

Reliance Media Works (Mauritius) Limited (w.e.f. April 07, 2015)

PF Overseas Limited (Mauritius)

Prime Focus Malaysia sdn bhd (w.e.f. July 15, 2015)

ii) Step-down subsidiary companies

Subsidiary companies of PF World Limited (Mauritius)

Prime Focus Luxembourg S.a.r.l

Gener8 Digital Media Services Limited, Canada (w.e.f. December 24, 2014)

Prime Focus 3D Cooperate U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World N.V. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus North America Inc. (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc.)

Prime Focus Creative Services Canada Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus VFX Australia Pty Limited (Subsidiary of Prime Focus World N.V.) (Liquidated in FY 2014)

Vegas II VFX Limited (Subsidiary of Prime Focus Creative Services Canada Inc.)

Prime Focus VFX USA, Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus ME Holdings Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus World Malaysia sdn bhd (Subsidiary of Prime Focus World N.V.)

Prime Focus China Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus (HK) Holdings Limited. (Subsidiary of Prime Focus China Limited)

Prime Focus World Creative Services Private Limited (Subsidiary of Prime Focus World N.V.)

Reliable Laptops Private Limited (Subsidiary of Prime Focus World Creative Services Private Limited)

Double Negative Holdings Limited (w.e.f. July 01, 2014) (Subsidiary of Prime Focus World N.V.)

Double Negative Limited UK (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings Limited)

Double Negative Singapore Pte Limited (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings Limited)

Double Negative Canada Productions Limited (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings Limited)

Double Negative Film Limited UK (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings Limited)

Double Negative Huntsman VFX Limited (Subsidiary of Double Negative Canada Productions Limited)

Subsidiary companies of Prime Focus London Plc, UK (till March 31, 2015) (Refer note 13b)

VTR Media Services Limited (formerly known as Prime Focus Visual Entertainment Services Limited) (Under Liquidation)

VTR Media Investments Limited

PF Broadcast & Commercial Limited (Under Administration)

Busy Buses Limited

Prime Focus Broadcast Limited (Liquidated in FY 2014)

Clipstream Limited

VTR Post Limited (formerly known as Prime Focus Post Limited/ Amazing Spectacles Limited) (Subsidiary of VTR Media Investments Limited)

Prime Post (Europe) Limited (formerly known as Prime Focus (MW) Limited) (Subsidiary of VTR Media Investments Limited till October 14, 2014, Subsidiary of Prime Focus Technologies UK Limited w.e.f. October 15, 2014)

VTR Media Investments 2 Limited (formerly known as Prime Focus Productions 1 Limited) (Subsidiary of VTR Media Investments Limited) Prime VFX Limited (formerly known as PF Television VFX Limited) (Subsidiary of VTR Media Investments Limited)

DMJM Film Limited (Subsidiary of VTR Media Investments Limited) (Liquidated in FY 2013)

PF Broadcast VFX Limited (Under Administration) (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 5 Limited (Dissolved on July 28, 2015) (Subsidiary of VTR Media Investments Limited)

PF Film UK Limited (Under Administration) (Subsidiary of VTR Media Investments Limited)

Subsidiary companies of Prime Focus Technologies Private Limited Prime Focus Technologies UK Limited Prime Focus Technologies, Inc.

Prime Post Europe Ltd (Subsidiary of Prime Focus Technologies UK Limited)

DAX PFT LLC (Subsidiary of Prime Focus Technologies, Inc.)

DAX Cloud ULC (Subsidiary of DAX PFT LLC)

Subsidiary companies of Reliance Media Works (Mauritius) Limited Reliance Lowry Digital Imaging Services Inc.

b. List of related parties with whom transactions have taken place during the period / year

i. Subsidiary companies

Prime Focus Technologies Private Limited Prime Focus Visual Effects Private Limited GVS Software Private Limited Prime Focus 3D India Private Limited Prime Focus Motion Pictures Limited Prime Focus International Limited

PF World Limited

Gener8 India Media Services Limited Reliance Media Works (Mauritius) Limited Prime Focus Malaysia sdn bhd

ii. Step down subsidiary companies Prime Focus North America, Inc

Prime Focus Creative Services Canada Inc Prime Focus International Services UK Limited Prime Focus ME Holdings Limited Prime Focus World N.V.

Prime Focus World Creative Services Private Limited Prime Focus Technologies, Inc

iii. Key management personnel

Mr. Namit Malhotra - CEO, Chairman and Executive Director Mr. Naresh Malhotra - Whole-time Director Mr. Ramakrishnan Sankaranarayanan - Managing Director Mr. Vikas Rathee - CFO (w.e.f August 1, 2014)

Mr. Nishant Fadia - CFO (till July 31, 2014)

Ms. Kirti Desai - Company Secretary (resigned w.e.f. July 7, 2015)

Ms. Parina Shah - Company Secretary (w.e.f. September 12, 2015)

iv. Enterprises owned or significantly influenced by Key Management Personnel or their relatives Blooming Buds Coaching Private Limited

N2M Realty Private Limited Monsoon Studio Private Limited

v. Enterprises exercising significant influence over the Company Reliance MediaWorks Limited

Standard Chartered Private Equity (Mauritius) III Limited Standard Chartered Private Equity (Mauritius) Limited Standard Chartered Bank

* Key management personnel have given personal guarantee and have pledged part of their shareholdings for borrowings obtained by the Company. (Refer notes 5 and 9).

## There are no provisions for doubtful debts / amounts written off / written back in respect of dues from / to related parties.

4. Vide Business Transfer Agreement dated November 19, 2014 between the Company, Reliance Media Works Limited (RMW) and Reliance Land Private Limited, the Company acquired RMW''s film and media services business for consideration other than cash. In accordance with the said Agreement, the transfer of BOT Agreement pertaining to the Studio including other business assets and liabilities related to the BOT Agreement ("Studios") and debt facilities of Rs. 20,000 lac was to be effected post receipt of the necessary additional approvals. Pending receipt of the additional approvals, the Studios'' and the debt facilities have not been transferred to and recorded by the Company. However, based on the mutual understanding with RMW, the Company, continues to operate the Studio, recognize revenue from operations and incurs operating expenses including obligations towards lease rentals and property tax.

5. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006

The Company does not have suppliers who are registered as micro, small or medium enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 as at March 31, 2016. The information regarding micro, small and medium enterprises has been determined on the basis of information available with the management.

6. The Board of Directors of the Company vide resolution passed on September 17, 2015 inter-alia, considered and approved re-alignment of the Financial Year of the Company in accordance with SECTION 2(41) of the Companies Act, 2013 and accordingly the financial year 2015-16 is for a period of 9 months ending on March 31, 2016 and therefore the financial statements of the last financial year are not comparable with financial statements of the current period which are for nine (9) months.

7. Previous year''s figures have been regrouped where necessary to confirm to current period''s classification.

---

Jun 30, 2015

A. Rights, preferences and restrictions at ached to shares

The Company has one class of equity shares having a par value of Rs, 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all liabilities, in proportion to their shareholding.

b. In the Board of Directors meeting held on July 02, 2014 approval was granted to introduce and implement Employee Stock Option Scheme titled 'PFL-ESOP Scheme 2014' whereby stock options up to 6% of the paid up capital of the Company (post preferential allotment) aggregating 17,932,738 stock options would be issued to eligible employees of the Company, its subsidiaries and associates. The said scheme was approved by the shareholders in the Extra-ordinary General Meeting held on August 01, 2014.

c. On November 05, 2012, the Company issued 1,901 Zero Coupon Unsecured Redeemable Non-Convertible Debentures (NCDs) of Rs, 1,000,000 each, of the aggregate nominal value of Rs, 1,901,000,000 to Standard Chartered Private Equity (Mauritius) III Limited. The Debentures were issued in two series being the Series A NCDs and the Series B NCDs. The Series A NCDs comprised of 1,010 Debentures aggregating Rs,1,010,000,000 redeemable after 5 years and the Series B NCDs comprised of 891 Debentures aggregating Rs, 891,000,000 redeemable after 6 years.

The amounts payable on redemption on Debentures are as follows:

i. With respect to the Series A NCDs, an amount equal to 188.17% of the Principal amount of Series A NCDs.

ii. With respect to the Series B NCDs, an amount equal to 213.41% of the Principal amount of Series B NCDs

In the event that either the Company or the Debenture Holders are desirous of redeeming the Debentures prior to its scheduled maturity other than upon the occurrence of an Event of Default, the Company and the Debenture Holders shall mutually agree on the amounts payable to the Debenture Holders upon such early redemption and the other terms of such redemption.

b. On February 20, 2015 the Company made an offer for the issuance of up to 4,000 unlisted, unrated, redeemable debentures not convertible into Equity Shares of the Company of face value of Rs, 100,000 each ("Debentures") aggregating up to Rs, 270,000,000 with a Green Shoe Option of up to Rs, 130,000,000 on a private placement basis. On March 04, 2015, 2,891 Debentures aggregating Rs, 289,100,000 were allot ed. On April 07, 2015 the Company made an additional offer for the issuance of up to 2,000 unlisted, unrated, redeemable debentures not convertible into Equity Shares of the Company of face value of Rs, 100,000 each ("Debentures") aggregating up to Rs, 200,000,000. On May 05, 2015, the Company allotted 1,580 debentures under Tranche - 1, aggregating Rs, 158,000,000 and on May 08, 2015 the Company further allotted 420 debentures under Tranche – 2, aggregating Rs, 42,000,000. In aggregate, the company allotted 4,891 debentures amounting to Rs, 489,100,000 at 14% interest payable quarterly and a redemption premium payable on maturity of the debenture to make the IRR of 17%. Of these Debentures Rs, 289,100,000 matures in August 2017 and Rs, 200,000,000 matures in November 2017.

c. On November 06, 2012, the Company entered into a term loan agreement with a bank to borrow Rs, 495,000,000 to fund the redemption of FCCB at an interest rate of base rate margin (as may be agreed with the bank from time to time) for a tenor up to a maximum of 4 years. The base rate and margin were 14.75% during the previous period. The term loan was to be repaid in 45 monthly installments starting from the end of 4th month from the date of disbursement. The outstanding balance as at June 30, 2015 and June 30, 2014 is Rs, Nil and Rs, 330,000,000 respectively. The term loan was secured by a specific charge on immovable assets of the Company, personal guarantees of the promoters and pledge of shares of the company held by the promoter.

d. On August 13, 2014, the Company entered into a long term loan agreement with others to borrow Rs, 450,000,000 at an interest rate of 12.50% p.a., to repay the existing term loan and for general corporate purpose which includes working capital and advance payment for capital expenditure. The term loan is to be repayable in 120 equated monthly installment starting from October 01, 2014 for loan availed on August 29, 2014 and from November 01, 2014 for loan availed on September 05, 2014. Further, the term loan is secured by a specific charge on immovable properties of the Company. At the year end, outstanding balance of the term loan is Rs, 432,737,071.

e. Lease obligations towards assets acquired under finance leases:

Finance lease obligations are secured by hypothecation of plant and equipment, Office equipment and vehicles taken on lease.

f. Foreign currency loans – buyer's credit are secured by pari passu charge on the immoveable assets of the Company, both present and future (except building in Royal Palms, Goregaon, Mumbai), pari passu charge on the Company's current assets both present and future and personal guarantees of the promoter director.

The Company had recognized a deferred tax asset on the carry forward losses in the earlier years. Although the Company has incurred taxable losses in the current year, based on the agreements entered into by the Company for lease/ sub-lease of its premises and to render outsourcing service to its subsidiaries coupled with the revenue from existing business activities, the management is confident that sufficient taxable income to offset carry forward losses would be generated.

The Company did not have any long-term contracts including derivative contracts for which any provision was required for any foreseeable losses.

a. In February 2011, the Company entered into an agreement for a working capital demand loan of Rs, 250,000,000 from a bank for a term of six months at an interest rate of 13% Per Annum. This is renewed periodically and is secured by first pari passu charge on the Company's current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at June 30, 2015, Rs, 100,000,000 and as at June 30, 2014, Rs, 250,000,000 is outstanding and is included in short-term demand loans.

b. On November 06, 2012, the Company entered in to an agreement for pre-shipment financing under export orders ("Facility") of Rs, 385,000,000 for funding against confirmed orders up to 100% of export sales. The interest rate for the facility drawn in Indian rupees is base rate plus margin and for facility drawn in currency other than Indian rupees is LIBOR plus margin. There are sub-limits under the facility for financial guarantees / standby letter of credit for payment undertaking for buyer's credit, pre-shipment financing under export letter of credit, export bills discounting, export invoice financing, import invoice financing, overdraft , short-term loans and bonds/ guarantees. The Facility is secured by first pari-passu charge on stock and book debts of the Company, personal guarantee of the promoters, first pari-passu charge on movable fixed assets of the Company, first pari-passu charge on immovable fixed assets located at Royal Palms-Mastermind, Goregoan, Mumbai and Raghuvanshi Mills, Mumbai and pledge of shares of the Company. As at June 30, 2015 Rs, 146,718,825 and June 30, 2014 Rs, 292,267,856 is outstanding under the Facility. As at June 30, 2015 Rs, nil and June 30, 2014 Rs, 166,900,000 is included in short-term demand loans and as at June 30, 2015 Rs, 146,718,825 and June 30, 2014 Rs, 125,367,856 is included in cash credit / overdraft .

c. On October 28, 2014, the Company borrowed Rs, 5,000,000 as working capital demand loan from a bank for a term of ten months at an interest rate of 13.75%. The short-term demand loan is secured by first pari passu charge on the Company's current assets both present and future, personal guarantees and pledge of shares by the promoter director. As at June 30, 2015, Rs, 5,000,000 is outstanding and is included in short-term demand loans.

d. On November 05, 2014, the Company raised Rs, 50,000,000 from a financial institution at an interest rate of 15.5% Per Annum for a term of 6 months from date of disbursement. This loan is renewed and is secured by pledge of shares by a promoter director. As at June 30, 2015 Rs, 50,000,000 was outstanding and is included under short-term demand loan.

e. On February 18, 2015, the Company raised Rs, 50,000,000 from a financial institution at an interest rate of 17% Per Annum for a term of 363 days from the date of disbursement. The short-term demand loan is secured by pledge of shares by a promoter director. As at June 30, 2015 Rs, 50,000,000 was outstanding and is included under short-term demand loan.

f. Cash credits/ overdraf from banks are secured against first pari passu charge on the Company's current assets both present and future, personal guarantees and pledge of shares by the promoter director. The cash credit is repayable on demand and carries interest at the rate of 14.50% to 14.75% Per Annum. As at June 30, 2015 and June 30, 2014, the cash credits/ overdraf outstanding were Rs, 183,587,792 and Rs, 179,919,806, respectively.

g. On January 31, 2013, the Company entered into an agreement for a working capital loan of Rs, 150,000,000 from others at an interest rate of 16% Per Annum for a term of 12 months from the date of disbursement. This loan is renewed periodically and is secured by personal guarantee and pledge of shares by a promoter director. On February 01, 2015, the Company rolled over the said loan at an interest rate of 15.50% Per Annum for a term of 12 months from the date of renewal. On January 21, 2015, the Company additionally borrowed Rs, 50,000,000 for general corporate purpose at an interest rate of 15.50% Per Annum for a term of 12 months from the date of disbursement. The general corporate purpose loan is secured by personal guarantee and pledge of shares by a promoter director. As at June 30, 2015 Rs, 177,400,000 and as at June 30, 2014 Rs, 135,000,000 was outstanding and is included under short-term demand loan.

h. On November 27, 2014, the Company raised Rs, 50,000,000 through inter corporate borrowing for working capital at an interest rate of 18% Per Annum for a term of 60 days from the date of disbursement. The working capital loan was secured by pledge of shares by a promoter director. The loan was repaid during the year.

i. On July 01, 2014, the Company raised working capital term loan of Rs, 3,000,000,000 from others at an interest rate of 13.5% Per Annum. The loan was repaid on March 31, 2015. This loan was secured by pledge of the Company's shares in PF World Ltd. (Mauritius).

Other payables include withholding taxes, service tax payable and employer and employee contribution to provident and other funds.

b. Plant and equipment and vehicles include assets taken on finance lease as under: Gross block: Rs, 41,233,601 (Previous period: Rs, 50,899,305)

Depreciation charge for the year: Rs, 7,171,487 (Previous period: Rs, 5,281,414) Accumulated depreciation: Rs, 13,906,109 (Previous period: Rs, 14,775,579) Net block: Rs, 27,327,492 (Previous period: Rs, 36,123,726)

c. Building includes leasehold premises of Rs, 651,900,000 and its accumulated depreciation of Rs, 5,055,351 (Previous Year: Rs, Nil)

a. Sof ware includes assets taken on finance lease as under: Gross block: Rs, Nil (Previous period: Rs, 1,550,000) Depreciation charge for the period: Rs, Nil (Previous period: Rs, 313,726) Accumulated depreciation: Rs, Nil (Previous period: Rs, 1,061,295) Net block: Rs, Nil (Previous period: Rs, 488,705)

b. On March 31, 2015 the Company sold its entire holdings of 21,492,003 ordinary shares of Prime Focus London Plc., a subsidiary company incorporated in the U.K. for a consideration of Rs, 37,074,693. After the reversal of provision of Rs, 514,636,483 made in respect of this investment in the past, the Company incurred a loss of Rs, 106,971,970, which has been disclosed as an exceptional item (Refer Note 22). Of total consideration, Rs, 19,987,159 is outstanding as at June 30, 2015.

a. Loans given to subsidiaries except for Prime Focus International Limited is considered under "Short-Term Loans and Advances" and are repayable on demand and management intends to receive the loan within an operating cycle. Prime Focus International Limited loan is without planned maturity nor is repayable on demand.

b. All the above loans are with interest of 10% - 15% except for loan of Rs, 909,785,248 given to Gener8 India Media Services Limited (acquired in business combination) which is interest free.

c. All loans are given for general corporate purpose of the subsidiaries.

d. There are no advances in the nature of loans. ii. Investment by loaned in the shares of the subsidiaries.

Investment by Prime Focus Technologies Private Limited in subsidiaries.

a. Other loans and advances includes prepaid expenses, loans and advances to employees and others, advances to suppliers and service taxes receivable.

b. Loans and advances include amount due from private companies in which directors is a member / director.

a. Margin money deposits aggregating Rs, 23,448,636 (previous period: Rs, 59,898,384) are subject to first charge to secure the foreign currency loans – buyer's credit and bank guarantees.

b. Margin money deposits aggregating Rs, 20,957,600 (previous period: Rs, Nil) are subject to first charge to secure the interest of non-convertible debenture holders.

1. The disclosures as required under Accounting Standard 15 "Employee Benefits" are as follows:

a. Defined benefit plan:

The Company has a defined benefit gratuity plan (unfunded). This plan provides a lump sum payment to employees on retirement or termination of employment, an amount based on respective employee's last drawn salary and tenure of employment with the Company.

Major drivers in actuarial assumptions typically are years of service and employee compensation. The estimates of rate of escalation in salary, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, including supply and demand in the employment market. The above information is as certified by the actuary.

b. Defined contribution plan:

The Company contributed Rs, 2,965,436 (Previous period: Rs, 5,200,609) to provident fund during the year and recognized the contribution as an expense, which is included in note 19 as contribution to provident fund and other funds.

2. Leases

The Company has taken premises on non-cancellable operating lease basis. The tenure of leases ranges from 36 to 180 months with non-cancellable periods ranging from 12 to 60 months. Future lease rentals in respect of the premises taken on non-cancellable operating leases are as follows:

Amount of lease rental charged to the Statement of Profit and Loss in respect of non-cancellable operating leases is Rs, 1,736,056 (Previous period: Rs, 10,834,829).

The Company has taken certain premises on cancellable operating lease basis. The tenure of the lease ranges from 11 to 180 months. Amount of lease rental charged to the Statement of Profit and Loss in respect of cancellable operating leases is Rs, 90,358,148 (Previous period: Rs, 65,960,287).

The Company has sublet certain premises on cancellable operating lease basis with a lock in period of one year. The tenure of the lease is of 60 months. An amount of Rs, 80,773,094 (Previous period: Rs, 2,906,798) has been recognized as other operating income in respect of the sublease (Refer Note 27).

3. Segment information

Business is the primary segment for the Company being post production activities. Since, the Company's entire operations are governed by the same set of risks and returns, these have been considered as representing a single segment.

4. Related party disclosures

a. List of Parties where control exists, irrespective of transactions: i) Subsidiary companies

Prime Focus London Plc, UK (till March 31, 2015) (Refer Note 13(b))

Prime Focus International Limited.

Prime Focus Technologies Private Limited

Prime Focus Visual Effects Private Limited

GVS Sof ware Private Limited

Prime Focus Motion Pictures Limited

PF World Limited

PF Investments Limited

Prime Focus 3D India Private Limited

Gener8 India Media Services Limited. (w.e.f. April 07, 2015) (formerly known as Prime Focus Entertainment Services Limited / Reliance

MediaWorks Entertainment Services Limited)

Reliance MediaWorks (Mauritius) Limited (w.e.f. April 07, 2015)

PF Overseas Limited (w.e.f. July 26, 2013)

ii) Step-down subsidiary companies

Subsidiary companies of PF World Limited

Prime Focus Luxembourg S.a.r.l

Gener8 Digital Media Services Limited (w.e.f. December 24, 2014)

Prime Focus 3D Cooperatief U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World N.V. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus North America Inc. (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc.)

Prime Focus Creative Services Canada Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus VFX Australia Pty Limited (Subsidiary of Prime Focus World N.V.) (Liquidated in FY 2014)

Vegas II VFX Limited (w.e.f. May 30, 2013) (Subsidiary of Prime Focus Creative Services Canada Inc.)

Prime Focus VFX USA, Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus ME Holdings Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus China Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus (HK) Holdings Limited. (Subsidiary of Prime Focus China Limited)

Prime Focus World Creative Services Private Limited (Subsidiary of Prime Focus World N.V.)

Double Negative Holdings Limited (w.e.f. July 01, 2014) (Subsidiary of Prime Focus World N.V.)

Double Negative Limited (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings UK)

Double Negative Singapore Pte Limited (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings UK)

Double Negative Canada Productions Limited (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings UK)

Double Negative Films Limited (w.e.f. July 01, 2014) (Subsidiary of Double Negative Holdings UK)

Subsidiary companies of Prime Focus London Plc, UK (till March 31, 2015)

VTR Media Services Limited (formerly known as Prime Focus Visual Entertainment Services Limited) (Under Liquidation)

VTR Media Investments Limited

PF Broadcast & Commercial Limited (Under Administration)

Busy Buses Limited

Prime Focus Broadcast Limited (Liquidated in FY 2014)

Slipstream Limited

VTR Post Limited (formerly known as Prime Focus Post Limited/ Amazing Spectacles Limited) (Subsidiary of VTR Media Investments Limited)

Prime Post (Europe) Limited (formerly known as Prime Focus (MW) Limited) (Subsidiary of VTR Media Investments Limited till October 14, 2014, Subsidiary of Prime Focus Technologies UK Limited w.e.f. October 15, 2014)

VTR Media Investments 2 Limited (formerly known as Prime Focus Productions 1 Limited) (Subsidiary of VTR Media Investments Limited)

Prime VFX Limited (formerly known as PF Television VFX Limited) (Subsidiary of VTR Media Investments Limited)

DMJM Film Limited (Subsidiary of VTR Media Investments Limited) (Liquidated in FY 2013)

PF Broadcast VFX Limited (Under Administration) (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 5 Limited (Dissolved on July 28, 2015) (Subsidiary of VTR Media Investments Limited)

PF Film UK Limited (Under Administration) (Subsidiary of VTR Media Investments Limited)

Subsidiary companies of Prime Focus Technologies Private Limited

Prime Focus Technologies UK Limited

Prime Focus Technologies, Inc.

Prime Post Europe Ltd (Subsidiary of Prime Focus Technologies UK Limited w.e.f. October 15, 2014)

DAX PFT LLC (Subsidiary of Prime Focus Technologies, Inc.)

DAX Cloud ULC (Subsidiary of DAX PFT LLC)

Subsidiary companies of Reliance Media Works (Mauritius) Limited (w.e.f. April 07, 2015)

Reliance Lowry Digital Imaging Services Inc.

b. List of related parties with whom transactions have taken place during the year / period i. Subsidiary companies

Prime Focus Technologies Private Limited

Prime Focus London Plc, UK

Prime Focus Visual Effects Private Limited

GVS Sof ware Private Limited

Prime Focus 3D India Private Limited

Prime Focus Motion Pictures Limited

Prime Focus International Limited

PF World Limited

Gener8 India Media Services Limited

Reliance MediaWorks (Mauritius) Limited

ii. Step down subsidiary companies

Prime Focus North America, Inc

Prime Focus Creative Services Canada Inc

Prime Focus International Services UK Limited

Prime Focus ME Holdings Limited

Prime Focus World N.V.

Prime Focus World Creative Services Private Limited

Prime Focus Technologies, Inc iii. Key management personnel

Mr. Namit Malhotra – CEO, Chairman and Executive Director (w.e.f June 25, 2014)

Mr. Naresh Malhotra – Whole-time Director (Chairman till June 24, 2014)

Mr. Ramakrishnan Sankaranarayanan – Managing Director (w.e.f June 25, 2014), CEO (till June 24, 2014)

Mr. Vikas Rathee – CFO (w.e.f August 01, 2014)

Mr. Nishant Fadia – CFO (till July 31, 2014)

Ms. Kirti Desai – Company Secretary (resigned w.e.f. July 07, 2015) iv. Enterprises owned or Significantly influenced by Key Management Personnel or their relatives

Blooming Buds Coaching Private Limited

N2M Reality Private Limited

Monsoon Studio Private Limited v. Enterprises exercising Significant influence over the Company

Reliance MediaWorks Limited (w.e.f. April 07, 2015)

Standard Chartered Private Equity (Mauritius) III Limited

Standard Chartered Private Equity (Mauritius) Limited

Standard Chartered Bank

** The balance outstanding as at June 30, 2015 have not been disclosed, since as at the year-end these companies were not related parties (Refer Note 13(b))

## There are no provisions for doubtful debts / amounts writ en off / writ en back in respect of dues from / to related parties except in respect of the following:

a. Provision for doubtful loans and advances of Rs, Nil (previous period: Rs, 1,353,249,789) (net) has been made in respect of for Prime Focus London Plc, UK. Of the total provision Rs, 1,353,249,789 (previous period: Rs, Nil) has been writ en off during the year.

b. Provision for diminution in the value of investments of Rs, Nil (previous period: Rs, 514,636,483) has been made in respect of investments made in Prime Focus London Plc, UK (Refer Note 13b).

5. On April 07, 2015, 23,076,923 and 90,384,615 equity shares were allot ed to Monsoon Studio Private Limited and Reliance MediaWorks Limited ("RMW"), respectively, on a preferential basis at Rs 52 per share. Of these 67,307,692 equity shares were issued to Reliance Media Works Limited as consideration other than cash towards the transfer of its film and media services business to the Company in accordance with the Business Transfer Agreement dated November 19, 2014 between the Company, RMW and Reliance Land Private Limited. In accordance with the said Agreement, the transfer of BOT Agreement pertaining to the Studio including other business assets and liabilities related to the BOT Agreement ("Studios") and debt facilities of Rs,. 2,000,000,000 crore was to be effected post receipt of the necessary additional approvals. Upon receipt of the necessary statutory approvals, with effect from the closing date of April 07, 2015, net assets of film and media services business were transferred to and recorded by the Company at the fair value of Rs,. 4,017,690,352 as determined by the independent values. However, pending receipt of the additional approvals, the Studios' and the debt facilities have not been transferred to and recorded by the Company. Presently, the Company has recorded a capital reserve of Rs,. 517,690,352 being the difference between consideration for the transaction being Rs,. 3,500,000,000 and fair value of the net assets transferred as detailed below. Post receipt of additional approvals, the Studios' and the debt facilities will be recorded at fair value with the diff eventual being adjusted against the capital reserve.

6. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Company does not have suppliers who are registered as micro, small or medium enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 as at June 30, 2015. The information regarding micro, small and medium enterprises has been determined on the basis of information available with the management.

7. Effective June 30, 2014, the Company sold its 'Backend Business', which includes (a) business of providing the services of conversion of 2D audio visual/ moving images to stereo 3D audio visual/moving images provided by the Company to Prime Focus World N.V., a company incorporated and operating under the laws of Netherlands ("PFW") ('Conversion Business'); and (b) the business of providing the services of computer generated film visual special effects by the Company to PFW ("VFX Business"), to Prime Focus World Creative Services Private Limited.', a company incorporated in India and an indirect controlled subsidiary of the Company on a going concern basis by way of slump sale for a total consideration of Rs, 2,297,049,000. The gain recognized on the backend slump sale of Rs,. 1,972,058,739 was recorded as exceptional item in previous period (Refer Note 22). Consequently, the figures for the current year exclude the 'backend business' and hence are not comparable with the figures of the previous period.

8. Pursuant to the enactment of the Companies Act, 2013 ("the Act"), effective 1st April, 2014, the Company has revised the estimated useful lives of its fixed assets to ensure compliance with the stipulations of Schedule II to the Act. Accordingly, the unamortized depreciable amounts of the fixed assets as at 1st July, 2014 have been charged over the revised remaining useful lives. This has the impact of decreasing depreciation charge for the year ended June 30, 2015 by Rs, 24,700,563. Further, in accordance with the stipulations of the said Schedule, writ en down values of fixed assets, whose lives had expired as at 1st July, 2014 aggregating Rs, 10,260,080 (net of tax) have been adjusted against retained earnings.

9. The Board of Directors of the Company vide circular resolution passed on March 24, 2014 inter-alia, considered and approved the extension of the previous financial year i.e. (April 01, 2013 to March 31, 2014) of the Company by a period of three (3) months in accordance with the provisions of Section 210 of the Companies Act, 1956. Accordingly, the Previous Year's financial year of the Company was for a period of fifteen (15) months i.e. commencing from April 01, 2013 and ending on June 30, 2014 and therefore the financial results of the last financial period are not comparable with financial results of the current year which are for twelve (12) months.

---

Jun 30, 2014

1. Corporate information

Prime Focus Limited (the Company) is a public listed company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the business of post-production including digital intermediate, visual eff ects, 2D to 3D conversion and other technical and creative services to the Media and Entertainment industry.

2. The disclosures as required under Accounting Standard 15 "Employee Benefits" are as follows:

a. Defined benefit plan:

The Company has a defined benefit gratuity plan (unfunded). This plan provides a lumpsum payment to employees on retirement or termination of employment, an amount based on respective employee''s last drawn salary and tenure of employment with the Company.

Major drivers in actuarial assumptions typically are years of service and employee compensation. The estimates of rate of escalation in salary, considered in actuarial valuation, take into account infl ation, seniority, promotion and other relevant factors, including supply and demand in the employment market. The above information is as certifi ed by the actuary.

b. Defined contribution plan:

The Company contributed Rs. 5,200,609 (Previous year: Rs. 2,809,463) to provident fund during the period and recognized the contribution as an expense, which is included in note 19 as contribution to provident fund and other funds.

3. Leases

The Company has taken premises on non-cancellable operating lease basis. The tenure of leases ranges from 36 to 180 months with non-cancellable periods ranging from 12 to 60 months. Future lease rentals in respect of the premises taken on non-cancellable operating leases are as follows:

Amount of lease rental charged to the Statement of Profit and Loss in respect of non-cancellable operating leases is Rs. 10,834,829 (Previous year: Rs. 9,881,074).

The Company has taken certain premises on cancellable operating lease basis. The tenure of the lease ranges from 11 to 180 months. Amount of lease rental charged to the Statement of Profit and Loss in respect of cancellable operating leases is Rs. 65,960,287 (Previous year: Rs. 46,171,297).

The Company has sublet certain premises on cancellable operating lease basis. The tenure of the lease is of 60 months. An amount of Rs. 2,906,798 (Previous year: Rs. Nil) has been recognized as other income in respect of the sublease (Refer note 27).

4. Segment information

Business is the primary segment for the Company being post production activities. Since, the Company''s entire operations are governed by the same set of risks and returns, these have been considered as representing a single segment.

Segment information for secondary segment reporting (by geographical segment based on location of customers)

5. Related party disclosures

a. List of Parties where control exists, irrespective of transactions: i) Subsidiary companies

Prime Focus London Plc, UK

Prime Focus International Limited

Prime Focus Technologies Private Limited

Prime Focus Visual Eff ects Private Limited

GVS Sof ware Private Limited

Prime Focus Motion Pictures Limited

PF World Limited

PF Investments Limited

Prime Focus 3D India Private Limited

Prime Focus World Creative Services Private Limited (w.e.f. July 12, 2013 it is a subsidiary of Prime Focus World N.V.)

PF Overseas Limited (w.e.f. July 26, 2013)

ii) Step-down subsidiary companies

Subsidiary companies of PF World Limited

Prime Focus Luxembourg S.a.r.l

Prime Focus 3D Cooperatief U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World N.V. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus North America Inc. (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc.)

Prime Focus Creative Services Canada Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus VFX Australia Pty Limited (Subsidiary of Prime Focus World N.V.) (Liquidated in FY 2014)

Prime Focus VFX USA, Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus ME Holdings Limited (formerly known as Lifestyles Interseas Limited) (Subsidiary of Prime Focus World N.V.)

Prime Focus China Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus (HK) Holdings Limited (Subsidiary of Prime Focus China Limited)

Prime Focus World Creative Services Private Limited (Subsidiary of Prime Focus World N.V. w.e.f. July 12, 2013)

Subsidiary companies of Prime Focus London Plc, UK

Prime Focus Visual Entertainment Services Limited

VTR Media Investments Limited

PF Film UK Limited (Liquidated in FY 2013)

PF Broadcast & Commercial Limited (Liquidated in FY 2013)

Busy Buses Limited

Prime Focus Broadcast Limited (Liquidated in FY 2014)

Clipstream Limited

Amazing Spectacles Limited (Subsidiary of VTR Media Investments Limited)

Prime Focus MW Limited (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 1 Limited (Subsidiary of VTR Media Investments Limited)

PF Television VFX Limited (Subsidiary of VTR Media Investments Limited)

PF Broadcast VFX Limited (Subsidiary of VTR Media Investments Limited) (Liquidated in FY 2014)

Prime Focus Productions 5 Limited (Subsidiary of VTR Media Investments Limited)

DMJM Film Limited (Subsidiary of VTR Media Investments Limited) (Liquidated in FY 2014)

Subsidiary companies of Prime Focus Technologies Private Limited

Prime Focus Technologies UK Limited

Prime Focus Technologies, Inc.

DAX PFT LLC (Subsidiary of Prime Focus Technologies, Inc.)

DAX Cloud ULC (Subsidiary of DAX PFT LLC)

b. List of related parties with whom transactions have taken place during the period / year i. Subsidiary companies

Prime Focus Technologies Private Limited

Prime Focus London Plc, UK

Prime Focus Visual Eff ects Private Limited

GVS Sof ware Private Limited

Prime Focus 3D India Private Limited

Prime Focus Motion Pictures Limited

PF Investments Limited

Prime Focus International Limited

PF Overseas Limited

Prime Focus World Creative Services Private Limited

ii. Step down subsidiary companies

PF Broadcast & Commercial Limited

Prime Focus Visual Entertainment Services Limited

Prime Focus North America, Inc

Prime Focus Creative Services Canada Inc

Prime Focus International Services UK Limited

Prime Focus ME Holdings Limited

Prime Focus World N.V.

Prime Focus World Creative Services Private Limited

iii. Key management personnel

Mr. Namit Malhotra – CEO, Chairman and Executive Director (w.e.f June 25, 2014)

Mr. Naresh Malhotra – Whole-time Director (Chairman till June 24, 2014)

Mr. Ramakrishnan Sankaranarayanan – Managing Director (w.e.f June 25, 2014), CEO (till June 24, 2014)

iv. Relative of Key management personnel

Mr. Namit Malhotra –Son of Mr. Naresh Malhotra

v. Enterprises owned or significantly infl uenced by Key Management Personnel or their relatives

Blooming Buds Coaching Private Limited N2M Reality Private Limited

vi. Enterprises exercising significant infl uence over the Company

Standard Chartered Private Equity (Mauritius) III Limited Standard Chartered Private Equity (Mauritius) Limited Standard Chartered Bank

* Key management personnel have given personal guarantee and have pledged part of their shareholdings for borrowings obtained by the

Company. (Refer notes 5 and 9). ## There are no provisions for doubtful debts / amounts writ en off / writ en back in respect of dues from / to related parties except in

respect of the following.

a. Provision for doubtful loans and advances of Rs. 1,353,249,789 (net) has been made in respect of for Prime Focus London Plc, UK (Refer note 15 & 22).

b. Provision for diminution in the value of investments of Rs. 514,636,483 has been made in respect of investments made in Prime Focus London Plc, UK (Refer note 13)

6. Contingent liabilities in respect of in Rs As at June As at March 30, 2014 31, 2013

i Income Tax mat ers under dispute* 73,808,523 125,731,981

Relates to demands raised by the income tax authorities for various assessment years mainly on account of disallowances of depreciation on computer based assets, additions under the Transfer Pricing provisions and Tax deducted at source (TDS) amounts.

* In the above mat er, the Company is hopeful of succeeding and as such does not expect any significant liability to crystalize. ii On account of undertakings given by the Company in favour of Customs authorities at the time - 640,740,299 of import of capital goods underEPCG Scheme.

iii Guarantees given on behalf of subsidiaryand step-down subsidiary companies 5,093,282,586 2,185,619,913

7. Details of dues to micro and small enterprises as defi ned under the MSMED Act, 2006

The Company does not have suppliers who are registered as micro, small or medium enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 as at June 30, 2014. The information regarding micro, small and medium enterprises has been determined on the basis of information available with the management.

8. Effective June 30, 2014, the Company sold its ''Backend Business'', which includes (a) business of providing the services of conversion of 2D audio visual/ moving images to stereo 3D audio visual/moving images provided by the Company to Prime Focus World N.V., a company incorporated and operating under the laws of Netherlands ("PFW") (''Conversion Business''); and (b) the business of providing the services of computer generated fi lm visual special eff ects by the Company to PFW ("VFX Business"), to Prime Focus World Creative Services Private Limited.'', a company incorporated in India and an indirect controlled subsidiary of the Company on a going concern basis by way of slump sale for a total consideration of Rs. 2,297,049,000. The carrying values of net assets transferred under slump sale is given below:

The gain recognized on the backend slump sale of Rs. 1,972,058,739 is recorded as exceptional item (Refer note 22).

9. The Board of Directors of the Company vide circular resolution passed on March 24, 2014 inter-alia, considered and approved the extension of the current financial year i.e. (April 01, 2013 to March 31, 2014) of the Company by a period of three (3) months in accordance with the provisions of Section 210 of the Companies Act, 1956. Accordingly, the current financial year of the Company is for a period of fifteen (15) months i.e. commencing from April 01, 2013 and ending on June 30, 2014 and therefore the fi nancial results of the current fi nancial period are not comparable with fi nancial results of the year ended March 31, 2013 which are for twelve (12) months.

10. Previous year''s figures have been regrouped where necessary to confi rm to current period''s classifi cation.

---

Mar 31, 2013

1. corporate information

Prime Focus Limited (the Company) is a public company domiciled in India and incorporated under the provision of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the business of post-production including digital intermediate, visual efects, 2D to 3D conversion and other technical and creative services to the Media and entertainment industry.

2. Segment information

The Company is presently operating an integrated post production setup. The entire operations are governed by the same set of risks and returns and hence have been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17).

3. related party disclosures

a. list of Parties where control exists, irrespective of transactions:

i) Subsidiary Companies Prime Focus London Plc. Prime Focus International Limited. Prime Focus Technologies Private Limited

Prime Focus Visual efects Private Limited (earlier known as Flow Post Solutions Private Limited) GVS Sofware Private Limited Prime Focus Motion Pictures Limited PF World Limited PF Investments Limited Prime Focus 3D India Private Limited Prime Focus World Creative Services Private Limited (earlier known as Prime Focus Post Production Private Limited)

ii) Step-down Subsidiaries

Subsidiary companies of PF World Limited

Prime Focus Luxembourg S.a.r.l

Prime Focus 3D Cooperatief U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World N.V. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus North America Inc. (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc.)

Prime Focus Creative Services Canada Inc. (Subsidiary of Prime Focus World N.V.)

Prime Focus VFX Australia Pty Limited (Subsidiary of Prime Focus World N.V.)

Prime focus VFX USA, Inc. (Subsidiary of Prime Focus World N.V.)

Lifestyles Interseas Limited (Subsidiary of Prime Focus World N.V.)

Subsidiary companies of Prime Focus london Plc.

Prime Focus Visual entertainment Services Limited

VTR Media Investments Limited

PF Film UK Limited (Liquidated in FY 2013)

PF Broadcast & Commercial Limited

Busy Buses Limited

Prime Focus Broadcast Limited

Clipstream Limited

Amazing Spectacles Limited (Subsidiary of VTR Media Investments Limited)

Prime Focus MW Limited (earlier known as Meanwhile Content Limited) (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 1 Limited (Subsidiary of VTR Media Investments Limited)

PF Television VFX Limited (Subsidiary of VTR Media Investments Limited)

PF Broadcast VFX Limited (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 5 Limited (Subsidiary of VTR Media Investments Limited)

DMJM Film Limited (Subsidiary of VTR Media Investments Limited)

Subsidiary companies of Prime Focus Technologies Private limited

Prime Focus Technologies UK Limited Prime Focus Technologies, Inc.

b. list of other related parties with whom transactions have taken place during the year

i. Key management personnel

Mr. Naresh Malhotra - Chairman and Whole-time Director

Mr. Ramakrishnan Sankaranarayanan - Managing Director (from October 11, 2011 to November 5, 2012) and Chif executive Ofcer

Mr. Namit Malhotra (up to October 11, 2011)

ii. Relative of Key management personnel

Mr. Namit Malhotra - Son of Chairman and Whole-time Director

iii. enterprises owned or signifcantly infuenced by Key Management Personnel or their relatives Blooming Buds Coaching Private Limited N2M Realty Private Limited

iv. entities with signifcant infuence over the Company Standard Chartered Private equity (Mauritius) III Limited Standard Chartered Private equity (Mauritius) Limited Standard Chartered Bank

4. details of dues to micro and small enterprises as defned under the mSmed act, 2006

The Company does not have suppliers who are registered as micro, small or medium enterprise under the Micro, Small and Medium enterprises Development Act, 2006 as at March 31, 2012. The information regarding micro, small and medium enterprises has been determined on the basis of information available with the management.

5. Previous year''s fgures have been regrouped where necessary to confrm to current year''s classifcation.

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Mar 31, 2012

1. Corporate information

Prime Focus Limited (the Company) is a public company domiciled in India and incorporated under the provision of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the business of Post Production, Visual Effects, 2D to 3D conversion and providing complete solutions in terms of other technical and creative services to the entire Media and Entertainment Industry.

2. Long-term borrowings

a. On December 12, 2007, the Company issued 550 Foreign Currency Convertible Bonds (FCCBs) of a face value of $ 100,000 each, aggregating to $ 55 million (equivalent - Rs. 2,162,696,800). The net proceeds from the issue of the FCCBs are to be used for strategic acquisitions and/or strategic alliances outside of India, for investment into wholly owned subsidiaries and/or joint ventures outside of India, for announced and future acquisitions, for foreign currency capital expenditure or for any other use, as may be permitted under applicable laws or regulations from time to time.

As per the terms of the issue, the holders have an option to convert FCCBs into equity shares at a reset conversion rate of Rs. 110.90 per equity share. Further, under certain conditions, the Company has the option to redeem the bonds on or after December 12, 2010. Unless previously converted or redeemed or purchased and cancelled, the Company will redeem these bonds, at 143.66% at the end of the five years from the date of issue i.e. on December 13, 2012. As at March 31, 2012, no bonds have been converted into equity shares and the entire balance of 550 bonds have been included and disclosed as current maturities of long-term borrowings in other current liabilities.

The FCCBs as detailed above are compound instruments with an option of conversion into specified number of shares and an underlying foreign currency liability with the redemption at a premium in the event of non conversion at the end of the period. The bonds are redeemable only if there is no conversion of bonds earlier. The payment of premium on redemption is contingent in nature, the outcome of which is dependent on uncertain future events. Hence no provision is considered necessary nor has been made in the accounts in respect of such premium amounting to Rs. 889,009,734 (Previous year: Rs. 598,162,095). However, in the event of redemption, the premium payable would be adjusted against the balance in the securities premium account.

The management is of the opinion that the bonds are a non monetary liability and hence, the exchange gain/loss on translation of FCCB liability in the event of redemption have not been recognized. Had the Company revalued the bonds as at March 31, 2012 considering it as a long term monetary liability, the profit for the year ended March 31, 2012 would have been lower by Rs. 383,223,143 (Previous yean Rs. 39,062,293). The reserves as on that date would have been lower byRs. 636,186,650 (Previous year: Rs. 252,963,508) and foreign currency monetary item would have been Rs. Nil (Previous year: Rs. 39,062,293).

b. In May 2011, the Company entered into an agreement with a financial institution to borrow Rs. 100,000,000 for a term of one year at an interest rate of 14.50% per annum. Interest rate was fixed for six months and can be reset after six months. A promoter director of the Company has pledged shares of the Company held as promoter holding as collateral security. As at March 31, 2012, Rs. 100,000,000 is outstanding and is included in current maturities of long-term borrowings.

c. In May 2011, the Company entered into an agreement with a financial institution to borrow Rs. 100,000,000 at an interest rate of 13.50% for general corporate purposes which includes working capital and advance payment for capital expenditure. The loan is repayable after twenty-four months with a put/call option at the end of twelve months and every six months thereafter. A promoter director of the Company has pledged shares of the Company held as promoter holding as collateral security. As at March 31, 2012, Rs. 100,000,000 is outstanding and is included in long term borrowings.

d. In February 2012, the Company entered into an agreement with a financial institution to borrow Rs. 100,000,000 at an interest rate of 14.50% per annum for a term of nine months.. A promoter of the Company has pledged shares of the Company held as promoter holding as collateral security. Further, the loan has been guaranteed by the personal guarantee of a promoter director of the Company. As at March 31,2012, Rs. 100,000,000 is outstanding and is included in long-term borrowings.

e. In May 2008, the Company entered into a term loan agreement with a bank to borrow Rs. 200,000,000 at an interest rate of 14.50% to 14.75% to refinance capital expenditure incurred by the Company. The loan is repayable by way of sixty installments starting from the month following the month of first disbursement of term loan. In July 2011, the Company entered into a term loan agreement with the same bank to borrow Rs. 90,000,000 at an interest rate of 13.75% to refinance capital expenditure incurred by the Company during fiscal year 2011. The loan is repayable byway often monthly installments ofRs. 5,000,000 and five monthly installments of Rs. 8,000,000. The loan is secured by way of mortgage of building of the Company, subservient charges on all existing and future receivables and moveable fixed assets of the Company. Further, the loan has been guaranteed by the personal guarantees and pledge of shares of the Company by promoter directors of the Company. As at March 31,2012, Rs. 53,734,670 (Previous year: 56,767,678) is outstanding, of which Rs. 53,734,670 (Previous year: Rs. 48,658,008) is included in current maturities of long-term borrowings and balance ofRs. Nil (Previous year: Rs. 8,109,670) is included in long-term borrowings.

f. In September 2008, the Company entered into a term loan agreement with a bank to borrow Rs. 350,000,000 at an interest rate of 12.50% per annum or prime lending rate 2.50%, whichever is higher (at March 31, 2012 :15.25%). The loan is repayable in 84 equal monthly installments including interest of Rs. 6,272,500 w.e.f. one month after disbursement. The loan is secured by first charge on the project assets along with mortgage of office premises financed. Further, the loan has been guaranteed by the personal guarantee of a promoter director of the Company. As at March 31, 2012, Rs. 206,213,809 (Previous year: Rs. 248,616,978) is outstanding, of which Rs. 47,087,220 (Previous year: Rs. 42,403,169) is included in current maturities of long-term borrowings and balance of Rs. 159,126,589 (Previous year: Rs. 206,213,809) is included in long-term borrowings.

g. In January 2010, the Company entered into a term loan agreement as sub limit of capital letter of credit with a bankto borrowRs. 250,000,000 at an interest rate of 11.50% per annum, repayable in 24 equal monthly installments after initial moratorium of 3 months from the date of each drawdown Rs. 130,888,966 was outstanding as at March 31, 2011 of which Rs. 120,785,400 is included in current maturities of long-term borrowings and the balance of Rs. 10,103,566 is included in long-term borrowings The loan was fully repaid duringthe year-ended March 31,2012.

3. Gratuity and other post-employment benefit plans

a. Defined benefit plans:

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 of basic salary (last drawn salary) for each completed year of service. This plan is unfunded. The following tables summarize 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 respective plans.

4. Deferral/ capitalization of exchange differences

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items. In accordance with the amendment/ earlier amendment to AS 11, the Company has capitalized exchange loss, arising on long-term foreign currency loans, amounting to Rs. 29,358,628 (Previous year exchange gain Rs. 151,722) to the cost of fixed assets.

5. Segment information

The Company is presently operating an integrated post production setup. The entire operations are governed by the same set of risks and returns and hence have been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17).

6. Related party disclosures

a. List of parties where control exists, irrespective of transactions: i) Subsidiary companies

Prime Focus London Pic.

Prime Focus International Limited.

Prime Focus Technologies Private Limited

Flow Post Solutions Private Limited

GVS Software Private Limited

Prime Focus Motion Pictures Limited

PF World Limited

PF Investments Limited Prime Focus 3D India Private Limited Prime Focus Post Production Private Limited

ii) Step-down subsidiary Companies

Subsidiary companies of PF World Limited

Prime Focus Luxembourg S.a.r.l

Prime Focus 3D Cooperatief U.A. (Subsidiary of Prime Focus Luxembourg S.a.r.l)

Prime Focus World N.V. (Subsidiary of Prime Focus 3D Cooperatief U.A.)

Prime Focus International Services UK Limited (Subsidiary of Prime Focus World N.V.)

Prime Focus North America Inc (Subsidiary of Prime Focus World N.V.)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc)

Prime Focus Creative Services Canada Inc (Subsidiary of Prime Focus World N.V.)

Prime Focus VFX Australia Pty Limited (Subsidiary of Prime Focus World N.V.)

Prime focus VFX USA, Inc

Subsidiary companies of Prime Focus London Pic.

Prime Focus Visual Entertainment Services Limited

VTR Media Investments Limited

PF Film UK Limited

PF Broadcast & Commercial Limited

Busy Buses Limited

Amazing Spectacles Limited (Subsidiary of VTR Media Investments Limited)

Clipstream Limited (Subsidiary of VTR Media Investments Limited)

Meanwhile Content Limited (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 1 Limited (Subsidiary of VTR Media Investments Limited)

PF Television VFX Limited (Formerly known as Prime Focus Productions 2 Limited) (Subsidiary of VTR Media Investments Limited)

PF Broadcast VFX Limited (Formerly known as Prime Focus Production 3 Limited) (Subsidiary of VTR Media Investments Limited)

Prime Focus Productions 5 Limited (Subsidiary of VTR Media Investments Limited)

DMJM Film (SubsidaryofVTR Media Investment Limited)

Subsidiary company of Prime Focus Technologies Private Limited

Prime Focus Technologies UK Limited

b. List of other related parties with whom transactions have taken place during the year i) Key management personnel

Mr. Naresh Malhotra - Chairman and Whole-time Director Mr. Namit Malhotra - Managing Director (upto October 11,2011) Mr. Ramakrishnan Sankaranarayanan - Managing Director (w.e.f. Octoberll, 2011) ii) Enterprises owned or significantly influenced by key management personnel or their relatives Blooming Buds Coaching Private Limited N2M Reality Private Limited

7. Contingent liabilities

As at March 31,

2012 2011

i. On account of undertakings given by the Company in favour of Customs authorities at 624,224,149 693,529,871 the time of import of capital goods under EPCG Scheme. The Company is confident of meeting its future obligations on such undertakings in the normal course of business.

ii. On account of undertaking given on future probable obligation on behalf of subsidiary - 60,966,157 company in the course of acquisitions made.

iii. Matters pending with tax authorities towards addition made by the tax authorities for 5,271,860 5,271,860 the AY 2007-08. Company has gone for an appeal to CIT (Appeals) and has made full payment of demand under protest.

iv. Matters pending with Tax Authorities toward addition made by the tax authorities for the 17,362,955 - AY 2004-05.

v. Matters pending with tax authorities related to Tax Deducted at Source (TDS) demand 88,207,071 - raised by the tax authorities for AY 2007-08 to 2011-12. Company has gone for an appeal to CIT (Appeals).

vi. Guarantees given on behalf of subsidiary companies and step-down subsidiary 1,627,254,046 1,240,761,318

($24,452,904) ($21,372,904)

(Rs.4,702,000) (Rs.4000,000)

vii. Premium on conversion of FCCB (See note 5) 889,009,734 598,162,095

8. Subsequent events

Share warrants

On April13,2012the Board approved the allotment of 10,000,000 equity shares against conversion of warrants held by promoter of the company at a premium of Rs. 54.478 per share (each warrant convertible into one equity share of face value of Rs. 1 each). The paid up share capital of the Company increased to Rs. 148,867,446 effective April 13,2012 (post warrant conversion of 10,000,000 warrants) and the promoter holding increased to 50.91% on the enhanced capital.

9. Loans and advances in the nature of loans given to subsidiaries and associates and firms/companies in which directors are interested:

1. Prime Focus London Pic:

Balance as at March 31,2011: Rs. 600,642,180 (Previous year: Rs. 492,046,944.)

Maximum Amount outstandingduringthe year Rs. 600,642,180 (Previousyear: Rs. 492,046,944)

2. Prime Focus Technologies Private Limited:

Balance as at March 31,2011: Rs. 49,035,938 (Previous year: Rs. 84,897,278)

Maximum Amount outstanding duringthe year Rs. 228,666,535 (Previous year: Rs. 85,244,098)

10. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

The Company does not have suppliers who are registered as micro, small or medium enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 as at March 31, 2012. The information regarding micro, small and medium enterprises has been determined on the basis of information available with the management.

11. Previous year figures

Previous year's figures have been regrouped where necessary to confirm to this year's classification.

---

Mar 31, 2011

1. Nature of operations:

prime focus Limited is engaged in the business of post production and Visual effects services for films and television content.

2. the company does not have suppliers who are registered as micro, small or medium enterprise under the micro, small and medium enterprises Development act, 2006 as at march 31, 2011. the information regarding micro, small ") and medium enterprises has been determined on the basis of information available with the management.

3. segment information:

the company is presently operating an integrated post production setup. the entire operations are governed by the same set of risks and returns and hence have been considered as representing a single segment. the said treatment is in accordance with the guiding principles enunciated in the accounting standard on segment reporting (as-17).

4. related party Disclosures:

a. List of Parties where control exists, irrespective of transactions:

i) Subsidiary Companies

prime focus London plc.

prime focus international Limited (formerly known as prime focus investments Limited)

prime focus technologies private Limited

flow post solutions private Limited

gVs software private Limited

prime focus motion pictures Limited

ii) Step-down Subsidiaries

Subsidiary of Prime Focus International Limited

prime focus international services uK Limited

prime focus North america, inc

1800 Vine street LLc (subsidiary of prime focus North america, inc)

prime focus VfX services i inc

prime focus VfX services ii inc

prime focus VfX technology inc

prime focus VfX pacific inc

prime focus VfX usa inc

prime focus VfX australia pty Limited

Subsidiary of Prime Focus London Plc.

prime focus Visual entertainment services Limited

Vtr media investments Limited

pf film uK Limited (formerly known as 37 Dean street Limited)

pf Broadcast & commercial Limited

Busy Buses Limited

prime focus technologies uK Limited

amazing spectacles Limited (subsidiary of Vtr media investments Limited)

clipstream Limited

meanwhile content Limited (formerly known as united sound & Vision Limited) (subsidiary of Vtr media investments Limited)

prime focus productions 1 Limited (subsidiary of Vtr media investments Limited)

prime focus productions 2 Limited (subsidiary of Vtr media investments Limited)

prime focus productions 3 Limited (subsidiary of Vtr media investments Limited)

prime focus productions 5 Limited (subsidiary of Vtr media investments Limited)

b. List of related parties with whom transactions have taken place during the year

i) Key Management Personnel

mr. Naresh malhotra - chairman and Whole-time Director

mr. Namit malhotra - managing Director

ii) Relatives of Key Management Personnel

mr. premnath malhotra

iii) Enterprises owned or significantly influenced by Key Management Personnel or their relatives

Blooming Bud coaching private Limited

N2m reality private Limited

5. Leases:

b. the company has taken certain premises on cancellable operating lease basis. the tenure of the lease ranges from 11 to 180 months.

c. amount of lease rental charged to the profit and loss account in respect of operating leases is Rs. 33,796,375/- (previous year Rs. 31,380,774/-).

6. stock split/sub-Division of equity shares:

the company has sub-Divided the existing 12,822,588 nos. of equity shares from every oNe equity share of Rs. 10/- each into teN equity shares ofRs. 1/- each (i.e. 12,822,588 equity shares ofRs. 10/- each in the capital of the company on which the sum of Rs. 10/- is credited as fully paid up into 128,225,880 equity shares of Rs. 1/- each of which the sum of Rs. 1/- is credited as fully paid up.) the record date fixed for the purpose of sub division of equity shares of the company was November 1, 2010.

7. qualified institutions placement:

the company has allotted 10,641,566 equity shares of face value of Rs. 1/- each to qualified institutional Buyers under qip as per chapter Viii of the seBi regulations at a price of Rs. 68.58 per equity share (including a premium ofRs. 67.58 per equity share), aggregating to Rs. 729,798,596 on November 10, 2010. further the floor price in respect of the aforesaid qualified institutions placement, based on the pricing formula as prescribed in regulation 85 of chapter Viii of seBi regulations is Rs. 68.58 per equity share and the relevant Date for this purpose in terms of regulation 81 of chapter Viii of seBi regulations is November 4, 2010.

8. issue of Warrants:

pursuant to the Board approval dated august 27, 2010 and shareholders' approval dated september 30, 2010, the company has allotted 1,000,000 warrants convertible into equity shares on october 15, 2010 to mr. Namit malhotra, a member of the promoters and promoter group carrying an option/entitlement to subscribe to equivalent number of equity shares on a future date not exceeding 18 months from the date of allotment of such warrants. each warrant shall be convertible into one equity share of nominal value of Rs. 10/- each at a price not less than the minimum price determined in accordance with the provision of chapter Vii of seBi (icDr) regulations. the company has received from mr. Namit malhotra, a sum equivalent to 25% of the price of the equity share to be issued in surrender/ exchange of each of such warrant.

9. No amortization has been done for film rights in the current year as the rights are not exercisable in the current year. since the rights are available for a period of more than 10 years the useful life of the rights is considered to be more than 10 years.

10. contingent Liabilities Not pro vided for:

(amount in Rs.)

2011 2010

i. on account of undertakings given by the company in favour of customs authorities at the time of import of capital goods under epcg scheme. the 693,529,871 748,591,339 company is confident of meeting its future obligations on such undertakings in the normal course of business.

ii. on account of undertaking given on future probable obligation on behalf of subsidiary company in the course of acquisitions made. 60,966,157 61,080,721 (refer Note 25 to schedule 16)

iii. matters pending with tax authorities (Block assessment). company has 112,684 112,684 been advised that it has a valid case based on similar decided matters.

iv. matters pending with tax authorities towards addition made by the tax authorities for the ay 2007-08. company has gone for an appeal to cit 5,271,860 5,271,860 (appeals) and has made full payment of demand under protest.

v. guarantee for Lease taken by step-down subsidiary. 44,631,320 44,979,660

(usD 1,000,000) (usD 1,000,000)

vi. premium on conversion of fccB (refer Note 19 (c) to schedule 16) 598,162,095 420,381,905

11. gratuity and other post-employment Benefit plans:

a. Define benefit plans:

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. this plan is unfunded.

the following tables summarise 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 respective plans.

Changes in the fair value of plan assets are as follows:

the company does not fund the gratuity nor it has plans presently to contribute in the next year and hence the disclosure relating to fair value of plan assets is not applicable.

b. Defined Contribution Plan:

amount recognized as an expense and included in schedule - 14 as contribution to provident fund Rs. 2,777,813/- (previous year Rs. 1,585,924/-).

12. Details of loans given to subsidiaries and associates and firms/companies in which directors are interested:

1. prime focus London plc :

Balance as at march 31, 2011: Rs. 492,046,944/-. (previous year Rs. Nil) maximum amount outstanding during the year Rs. 492,046,944/- (previous year Rs. 241,870,474/-)

2. prime focus technologies private Limited :

Balance as at march 31, 2011: Rs. 84,897,278/- (previous year Rs. 41,624,979/-) maximum amount outstanding during the year Rs. 85,244,098/- (previous year Rs. 45,258,248/-)

13. foreign currency convertible Bonds (fccB):

a. on December 12, 2007, the company issued 550 foreign currency convertible Bonds (fccB's) of a face value of usD 100,000 each, aggregating to usD 55.00 million (equivalent - Rs. 2,162,696,800/-). the net proceeds from the issue of the Bonds are to be used for strategic acquisitions and/or strategic alliances outside of india, for investment into wholly owned subsidiaries and/or joint ventures outside of india, for announced and future acquisitions, for foreign currency capital expenditure or for any other use, as may be permitted under applicable laws or regulations from time to time.

b. as per the terms of the issue, the holders have an option to convert fccB into equity shares at a reseted conversion rate of Rs. 110.90 per equity share. further, under certain conditions, the company has the option to redeem the bonds on or after December 12, 2010. unless previously converted or redeemed or purchased and cancelled, the company will redeem these bonds, at 143.66% at the end of the five years from the date of issue i.e. on December 13, 2012. as at march 31, 2011, no bonds have been converted into equity shares ofRs. 1/- each and the entire balance of 550 bonds have been included and disclosed in the schedule of "unsecured Loans".

c. the fccB's as detailed above are compound instruments with an option of conversion into specified number of shares and an underlying foreign currency liability with the redemption at a premium in the event of non , conversion at the end of the period. the bonds are redeemable only if there is no conversion of bonds earlier. j the payment of premium on redemption is contingent in nature, the outcome of which is dependent on uncertain future events. Hence no provision is considered necessary nor has been made in the accounts in respect of such premium amounting to Rs. 598,162,095/- (previous year Rs. 420,381,905/-). However, in the event of redemption, the premium payable would be adjusted against the balance in the securities premium account.

d. the management is of the opinion that the bonds are a non monetary liability and hence, the exchange gain/ loss on translation of fccB liability in the event of redemption have not been recognized.

e. Had the company revalued the bonds as at march 31, 2011 considering it as a long term monetary liability, the profit for the year ended march 31, 2011 would have been lower by Rs. 39,062,293/- (previous year: Rs. 46,124,146/-) . the reserves as on that date would have been lower by Rs. 252,963,508/- (previous year: Rs. 265,060,354/-) and foreign currency monetary item would have been Rs. 39,062,293/- (previous year: Rs. 46,124,146/-).

14. miscellaneous income:

as the company is engaged in providing post production services, net income of Rs. 3,475,819/- (previous year Rs. 1,955,719/-) from production of tV programme (gross Rs. 13,600,000/-(previous year Rs. 27,096,993/-) less: direct cost of Rs. 10,124,181/- (previous yearRs. 25,141,274/-)) is disclosed under other income as miscellaneous income. the revenue of the company for the year including revenue from tV production income is Rs. 1,368,658,259/- (previous year Rs. 979,822,586/-).

15. investments:

a. investments include Rs. 610,703,583/- (previous year: Rs. 610,703,583/-) in prime focus London plc, uK ['pf uK'], a subsidiary company. pf uK has been recording profits since march 2009. the market value of shares as on march 31, 2011 is Rs. 238,552,428/- (previous year: Rs. 150,345,934/-). the share trading of the company were suspended on march 31, 2011, and hence the last traded price on september 29, 2010 of pence 17 has been considered for calculation of market value of investments.

these being long term and strategic investments and also in view of the projected profitable operations of these companies, the management is of the view that there is no diminution other than temporary in the value of these investments.

16. During the fy 2008-09 the company was allotted 505,050 ordinary shares of 5 pence each in prime focus London plc, a subsidiary of the company, as fully paid up, for consideration other than cash, for providing an undertaking on certain future obligations, to the vendors under the share purchase agreement entered by prime focus London plc. to acquire machine effects Limited. the outcome is dependent on certain future events for which no reliable estimate can be made. further, in current year, the company has filed a suit in the Bombay High court alleging that the terms of the undertaking are not tenable and hence no provision is considered necessary.

17. previous year's figures have been regrouped where necessary to confirm to this year's classification.

---

Mar 31, 2010

1. Nature of Operations:

Prime Focus Limited is engaged in the business of Post Production and Visual Effects services for Films and Television content.

2. The Company does not have suppliers who are registered as micro, small or medium enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 as at March 31, 2010. The information regarding micro, small and medium enterprises has been determined on the basis of information available with the management.

3. During the FY 2008-09 the Company was allotted 505,050 ordinary shares of 5 pence each in Prime Focus London Plc, a subsidiary of the Company, as fully paid up for consideration other than cash for providing an undertaking on certain future obligations, to the vendors under the Share Purchase Agreement entered by Prime Focus London Plc. to acquire Machine Effects Limited.

The outcome of these obligations is dependent on uncertain future events for which no reliable estimate can be made. Hence no provision is considered necessary [Refer Note No. 13 (ii) of Schedule 16].

Subsequent to year end, the parties to whom the undertaking was provided have asked the Company to confrm that it will honor the guarantee provided by the Company. The Company has fled a suit in Mumbai High Court alleging that the terms of the undertaking are not tenable and hence no liability is expected to crystallise on the Company.

4. Segment Information

The Company is presently operating an integrated post production setup. The entire operations are governed by the same set of risks and returns and hence have been considered as representing a single segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17).

Geographical Segment

Although the Companys major operating divisions are managed in India, the following table shows the distribution of the Companys consolidated sales by geographical market, regardless of where the services were provided:

5. Related party disclosures:

a. List of Parties where control exists, irrespective of transactions:

i) Subsidiary Companies

Prime Focus London Plc.

Prime Focus Technologies Private Limited Flow Post Solutions Private Limited

Prime Focus Investments Limited GVS Software Private Limited Prime Focus Motion Pictures Limited

ii) Step-down Subsidiaries

Subsidiary of Prime Focus Investments Limited

Prime Focus North America, Inc (Formerly known as Post Logic Studios, Inc)

1800 Vine Street LLC (Subsidiary of Prime Focus North America, Inc)

Prime Focus VFX Services I Inc

Prime Focus VFX Services II Inc

Prime Focus VFX Technology Inc

Prime Focus VFX Pacifc Inc

Prime Focus VFX USA Inc

Prime Focus VFX Australia Pty Limited

Subsidiary of Prime Focus London Plc.

Prime Focus Visual Entertainment Services Limited (Formerly known as Blue Post Production Limited)

The Machine Room Limited (Liquidated during the year)

VTR Media Investments Limited

Machine Effects Limited

PF (Post Production) Limited (Liquidated during the year)

37 Dean Street Limited

Amazing Spectacles Limited (Formerly The Hive Animation Limited) (Subsidiary of VTR Media Investments Limited)

Clipstream Limited (Subsidiary of VTR Media Investments Limited)

K Post Limited (Subsidiary of VTR Media Investments Limited) (Liquidated during the year)

United Sound & Vision Limited (Subsidiary of VTR Media Investments Limited)

b. List of related parties with whom transactions have taken place during the year i) Key Management Personnel

Mr. Naresh Malhotra - Chairman

Mr. Namit Malhotra - Managing Director

ii) Relatives of Key Management Personnel

Ms. Neha Malhotra Mr. Premnath Malhotra

* Key management personnel have given personal guarantee and have pledged part of their share holdings for borrowings obtained by the Company. (Refer note 3 of Schedule 16)

# Company has given guarantee for lease taken by Step down Subsidiaries (Prime Focus North America Inc.) (Refer note 13 (v) of Schedule 16)

Leases:

a) The Company has taken the premises on non-cancellable operating lease basis. The tenure of lease is for 60 months and further expandable for 10 years without non cancellation clause on mutual consent with escalation clause. Future lease rentals in respect of the said premises taken on non-cancellable operating leases are as follows:

b) The Company has taken certain premises on cancellable operating lease basis. The tenure of the lease ranges from 11 to 180 months

c) Amount of lease rental charged to the Proft and loss account in respect of operating leases is Rs. 31,380,774 (previous year Rs. 32,087,647)

6. No amortization has been done for Film Rights in the current year as the rights are not exercisable in the current year. Since the rights are available for a period of more than 10 years the useful life of the rights is considered to be more than 10 years.

account and not provided for:

7. Contingent Liabilities not provided for: In Rupees

2010 2009

i. On account of undertakings given by the Company in favour of Customs 748,591,339 797,033,046 authorities at the time of import of capital goods under EPCG Scheme. The Company is confdent of meeting its future obligations on such undertakings in the normal course of business. ii. On account of undertaking given on future probable obligation on behalf 61,080,721 69,357,145 of subsidiary company in the course of acquisitions made. (Refer Note No. 6 of schedule 16)

iii. Matters pending with Tax Authorities (Block Assessment). Company has 112,684 1,046,969

been advised that it has a valid case based on similar decided matters.

iv. Matters pending with Tax Authorities towards addition made by the tax 5,271,860 Nil authorities for the AY 2007-08. Company has gone for an appeal to CIT

(Appeals) and has made full payment of demand under protest. v. Guarantee for Lease taken by step-down subsidiary 44,979,660 50,640,000

($ 1,000,000) ($ 1,000,000)

vi. Premium on conversion of FCCB (Refer Note No. 15 (c)) 420,381,905 269,140,513



14. Gratuity and other post-employment beneft plans: a. Defne beneft plans:

The Company has a defned beneft gratuity plan. Every employee who has completed fve years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. This plan is unfunded.

The following tables summarise the components of net beneft expense recognised in the proft and loss account and the funded status and amounts recognised in the balance sheet for the respective plans.

8. Details of loans given to subsidiaries and associates and firms/companies in which directors are interested:

1. Prime Focus London Plc : Balance as at March 31, 2010: Rs. Nil. (Previous Year Rs. 241,870,474)

Maximum Amount outstanding during the year Rs. 241,870,474 (Previous Year Rs. 251,316,179)

2. Prime Focus North America, Inc. : Balance as at March 31, 2010: Rs. Nil (Previous Year Rs. Nil)

Maximum Amount outstanding during the year Rs. Nil (Previous Year Rs. 150,542,131)

3. Prime Focus Technologies Private Limited : Balance as at March 31, 2010: Rs. 41,624,979 (Previous Year Rs. 33,600,998)

Maximum Amount outstanding during the year Rs. 45,258,248 (Previous Year Rs. 35,675,198)

9. Foreign Currency Convertible Bonds (FCCB):

a. On December 12, 2007, the Company issued 550 Foreign Currency Convertible Bonds (FCCBs) of a face value of $ 100,000 each, aggregating to $ 55.00 million (equivalent – Rs. 2,162,696,800). The net proceeds from the issue of the Bonds are to be used for strategic acquisitions and/or strategic alliances outside of India, for investment into wholly owned subsidiaries and/or joint ventures outside of India, for announced and future acquisitions, for foreign currency capital expenditure or for any other use, as may be permitted under applicable laws or regulations from time to time.

b. As per the terms of the issue, the holders have an option to convert FCCB into Equity Shares at an initial conversion rate of Rs. 1,386.79 per equity share at a fxed exchange rate of Rs. 39.39 per USD subject to certain adjustments as per the terms of the issue. In terms of condition of issue, the conversion price has been reset to Rs. 1,109 per equity share. Further, under certain conditions, the Company has the option to redeem the bonds on or after December 12, 2010. Unless previously converted or redeemed or purchased and cancelled, the Company will redeem these bonds, at 143.66% at the end of the fve years from the date of issue i.e. on December 13, 2012. As at March 31, 2010, no bonds have been converted into equity shares of Rs. 10 each and the entire balance of 550 bonds have been included and disclosed in the Schedule of “Unsecured Loans”.

c. The FCCBs as detailed above are compound instruments with an option of conversion into specifed number of shares and an underlying foreign currency liability with the redemption at a premium in the event of non conversion at the end of the period. The bonds are redeemable only if there is no conversion of bonds earlier. The payment of premium on redemption is contingent in nature, the outcome of which is dependent on uncertain future events. Hence no provision is considered necessary nor has been made in the accounts in respect of such premium amounting to Rs. 420,381,905 (Previous Year Rs. 269,140,619). However, in the event of redemption, the premium payable would be adjusted against the balance in the Securities Premium Account.

d. The management is of the opinion that the bonds are a non monetary liability and hence, the exchange gain/ loss on translation of FCCB liability in the event of redemption have not been recognized.

e. Had the Company revalued the bonds as at March 31, 2010 considering it as a long term monetary liability, the proft for the year ended March 31, 2010 would have been lower by Rs. 46,124,146 (Previous Year: Rs. 208,362,046). The reserves as on that date would have been lower by Rs. 265,060,354 (Previous Year : Rs. 218,936,208) and foreign currency monetary item would have been Rs. 46,124,146 (Previous Year: Rs. 416,724,092).

10. Miscellaneous Income:

As the Company is engaged in providing post production services, net income of Rs. 1,955,719 (Previous Year Rs. 952,076) from production of TV Programme (gross Rs. 27,096,993 (Previous Year Rs. 11,550,000) less: direct cost of Rs. 25,141,274 (Previous Year Rs. 10,597,924)) is disclosed under other income as Miscellaneous Income. The revenue of the Company for the year including revenue from TV production income is Rs. 979,822,586 (Previous Year Rs. 922,502,696)

11. Investments include Rs. 610,703,583 (Previous Year: Rs. 610,703,583) in Prime Focus London Plc, UK [PF UK], a subsidiary company. The Company has also paid an amount of to Rs. 234,044,490 (Previous Year Rs. Nil) to PF UK for which shares are yet to be issued to the Company. PF UK has recorded profts in Mar 09 and Mar 10. The Market value of shares as on March 31, 2010 is Rs. 150,345,934 (Previous Year: Rs. 99,656,756). These being long term and strategic investments and also in view of the projected proftable operations of these companies, the management is of the view that there is no diminution other than temporary in the value of these investments and the share application money.