1. Corporate Information:

“7SEAS ENTERTAINMENT LIMITED” is engaged in the business of providing gaming solutions through software development, IT Infrastructure solutions to clients and partners through aggressive market development and continuous improvement through agility. It is public company domiciled in India and incorporated under the provisions of Companies Act, 1956 applicable in India and it was incorporated in the year 1991 having its Registered office at 5th Floor, Plot No.92, 93 & 94 Kavuri Hills, Hyderabad, Madhapur, Telangana, India, 500081. The shares of the company are listed in Bombay Stock Exchange.

2. Material accounting policies

Material accounting policies adopted by the company are as under:

2.1 Basis for Preparation of financial statements:a) Statement of Compliance with Ind AS

These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of the Companies Act, 2013as amended from time to time.

Accounting policies have been consistently applied to all the years presented except where a newly issued AccountingStandard is initially adopted or a revision to an existing Accounting Standard requires a change in the accountingpolicy hitherto in use. These financial statements have been prepared for the Company as a going concern on thebasis of relevant Ind AS that are effective at the Company’s annual reporting date March 31,2024.

The Ind AS financial statements were approved by the Board of Directors of the Company on May 28, 2024.

b) Basis of measurement

The financial statements have been prepared on a historical cost convention on accrual basis, except for the followingmaterial items that have been measured at fair value as required by relevant Ind AS: -

i. Certain financial assets and liabilities measured at fair value (refer Note - 2.21 accounting policy on financialinstruments)

ii. Net defined employee benefit assets / (liability) are measured at fair value of plan assets, less present value ofdefined benefit obligations.

iii. Share based payment transactions are measured at fair value.

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operatingcycle and other criteria set out in Division II - Ind AS Schedule III to the Act. The Company presents assets andliabilities in the balance sheet based on current/ non-current classification.

An asset is classified as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted All other assets are classified as non-current.

• A liability is classified as current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reportingperiod the Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cashequivalents. The Company has identified twelve months as its operating cycle.

c) Presentation currency and rounding off

The financial statements are presented in INR and all values are rounded to nearest lakhs (INR 00,000), except whenotherwise indicated.

d) Uses of Estimates and judgments:

The preparation of standalone financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities as at the Balance Sheet date, reportedamount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date.The estimates and assumptions used in the accompanying financial statements are based upon the Management’sevaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results coulddiffer from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions toaccounting estimates, if any, are recognised in the year in which the estimates are revised and in any future yearsaffected. Refer Note 2.27 for detailed discussion on estimates and judgements.Information about significant areas of estimation uncertainty and critical judgements in applying accounting policiesthat have the most significant effect on the amounts recognised in the standalone financial statements is included inthe following notes:

• Useful lives of property, plant and equipment;

• Impairment;

• Financial instruments;

• Employee benefits;

• Provisions;

• Income taxes

2.2 Current and Non-Current Classification:

Current assets / liabilities include the current portion of non-current assets / liabilities respectively. All other assets /liabilities including deferred tax assets and liabilities are classified as non-current.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and othercriteria set out in the Schedule III tothe Companies Act, 2013. Based on the nature of services and the time betweenthe rendering of service and their realisation in cash and cashequivalents, the Company has ascertained its operatingcycle as twelve months for the purpose of current and non-current classification of assets andliabilities.

2.3 Property Plant and Equipment (Ind AS 16):

Items of property, plant and equipment are measured at historical cost less accumulated depreciation andaccumulated impairment losses, if any. The cost comprises purchase price, taxes (other than those subsequentlyrecoverable from tax authorities), borrowing cost if capitalisation criteria are met anddirectly attributable cost ofbringing the asset to its working condition for the intended use.

“Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefits associated with the item will flow to the Company and the costof the item can be measured reliably. The carrying amount of any component

accounted for as a separate asset isderecognized when replaced. All other repairs and maintenance are charged to Statement of Profit and Loss duringthe year in which they are incurred.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposalor when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognitionof the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) isincluded in the income statement when the asset is derecognised.”

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date isclassified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress’.

Depreciation methods, estimated useful lives:

Items of Property, Plant and Equipment are stated at cost less accumulated depreciation.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and nonrefundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

Depreciation on the fixed assets has been provided based on useful lives as prescribed under part C of schedule II of the Companies act, 2013.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Depreciation on additions (disposals) is provided on a pro-rata basis i.e., from (upto) the date on which the asset is ready for use (disposed of).

2.4 Intangible assets (Ind AS 38):

Intangible assets are amortized over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as change in accounting estimates. The amortization expense on intangible assets with finite useful lives is recognized in profit or loss.

2.5 Investment in Subsidiaries

Investment in Subsidiaries are valued at cost. Dividend income from subsidiaries is recognised when its right to receivethe dividend is established.

2.6 Trade and other payables

These amounts represent liabilities for goods and services provided to the company prior to the end of the financialyear which are unpaid. The amounts are unsecured and are usually paid within the normal trade cycle as peragreement. Trade and other payables are presented as current liabilities unless payment is not due within 12 monthsafter the reporting period.

2.7 Effects of changes in foreign exchange rates (Ind AS 21):

During the financial year the company has not entered into any foreign exchange transactions. Hence this Ind AS does not have any financial impact on the financial statements of the company.

2.8 Impairment of non-financial assets/unlisted equity investments

The carrying amounts of the Company’s tangible and intangible assets, including unlisted equity investments, arereviewed at each reporting date to determine whether there is any indication of impairment. If any such indicationexists, then the asset’s recoverable amount is estimated in order to determine the extent of the impairment loss, if any.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value lesscosts of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value usinga pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific tothe asset or the cash generating unit for which the estimates of future cash flows have not been adjusted. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cashinflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets.

An impairment loss is recognised in the statement of profit or loss if the estimated recoverable amount of an asset or its cash generating unit is lower than its carrying amount. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been previously recognised.

2.9 Cash Flow Statement (Ind AS 7):

Cash flows are reported using the indirect method under Ind AS 7, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

a. Non-cash items: Nilb. Changes in Liability Arising from Financing Activity

2.10 Capital Work in Progress

Capital Work in Progress (CWIP) includes Plant & Equipment under erection and Preoperative Expenditure pending allocation on the assets to be acquired/commissioned, capitalized. It also includes payments made towards technical know-how fee and for other General Administrative Expenses incurred for bringing the asset into existence.

Investments are classified as Non-Current and Current investments. Investments, which are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as noncurrent investments.

Current investments are carried at lower of cost and fair value. Non-Current Investments are carried at cost less provision for other than temporary diminution, if any, in value of such investments.

2.11 Borrowing Costs (Ind AS 23):

Borrowing costs that are attributable to the acquisition or construction of qualifying assets up to the date of capitalization of such asset are capitalized as part of the cost of such assets. All other borrowing costs are charged to the Statement of Profit and Loss.

2.12 Revenue Recognition (Ind AS 18-Revenues):

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

• Sales Revenue is recognized on dispatch to customers as per the terms of the order. Sales Revenue is net of returns and applicable trade discounts and excluding GST billed to the customers.

• Subsidy from Government is recognized when such subsidy has been earned by the company and it is reasonably certain that the ultimate collection will be made.

• Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.

• All other incomes are recognized based on the communications held with the parties and based on the certainty of the incomes.

2.13 Inventories (Ind AS 2):

Inventories at the year-end are valued as under:

• Cost of Material excludes duties and taxes which are subsequently recoverable.

• Stocks at Depots are inclusive of duty, wherever applicable, paid at the time of dispatchfrom Factories.

2.14 Retirement and other Employee Benefits (Ind AS 19):

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as expenditure, when an employee renders related service.

Gratuity liability is a defined benefit obligation and the cost of providing the benefits under this plan has not determined on the basis of actuarial valuation at each year-end.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short term employee benefit. The Company has not provided any provision for leave encashment.

2.15 Ind AS 17- Leases

Finance charges in respect of finance lease obligations are recognized as finance costs in the statement of profit and loss. In respect of operating leases for premises, which are cancellable / renewable by mutual consent on agreed terms, the aggregate lease rents payable is charged as rent in the Statement of Profit and Loss.

2.16 Insurance Claims:

Insurance Claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

2.17 Earnings per Share (Ind AS 33):

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equityshareholders by the 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 averagenumber of equity shares outstanding for the effects of all dilutive potential ordinary shares.

2.18 Segment Reporting:

The company operates business in providing solutions through games development through software development, IT Infrastructure solutions to clients and partners through aggressive market development and continuous improvement through agility under single segment. Hence reporting is not applicable.

2.19 Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37):

Provisions are recognised only when there is a present obligation, as a result of past events, and when a reliableestimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at eachreporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values,where the time value of money is material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not wholly within the control of the Company; or

• Present obligations arising from past events where it is not probable that an outflow of resources will be required tosettle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are neither recognised nor disclosed. However, when realisation of income is virtually certain, related asset is recognised.

2.20 Prior Period and Extraordinary and Exceptional Items:

• All Identifiable items of Income and Expenditure pertaining to prior period are accounted through ‘’Prior Period Items’’.

• Extraordinary items are income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and, therefore, are not expected to recur frequently or regularly. The nature and the amount of each extraordinary item be separately disclosed in the statement of profit and loss in a manner that its impact on current profit or loss can be perceived.

• Exceptional items are generally non-recurring items of income and expenses within profit or loss from ordinary activities, which are of such, nature or incidence.

2.21 Financial Instruments (Ind AS 107): Financial Instruments:I. Financial assets:A. Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.

• Financial assets carried at amortized cost (AC)

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

A Financial asset which is not classified as AC or FVOCI are measured at FVTPL e.g. investments in mutual funds. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net in the Statement of Profit and Loss within other gains/(losses) in the period in which it arises.

• Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose Objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

B. Investments in subsidiaries

The Company has accounted for its investments in subsidiaries at cost and not adjusted to fair value at the end of each reporting period. Cost represents amount paid for acquisition of the said investments.

II. Financial LiabilitiesA. Initial recognition

All financial liabilities are recognized at fair value.

B. Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments

2.22 Events Reporting Period (Ind AS-10)

An entity shall adjust the amounts recognized in its financial statements to reflect adjusting events after the reporting period.

2.23 Consolidated and Separate Financial Statement (Ind AS 27):

The company has two subsidiary companies for the current reporting period. Hence consolidatedand separate financial statement are prepared as per the Ind AS 27.

2.24 Investments in Associates (Ind AS 28):

The company has not made any investments in any of its associates during the reporting period. This accounting standard has no financial impact on the financial statements for the current reporting period.

2.25 Interest in Joint Ventures (Ind AS 31)

The company has no interest in any Joint ventures. This accounting standard has no financial impact on the financial statements for the current reporting period.

2.26 Income Taxes (Ind AS 12)

Tax expense for the year, comprising current tax and deferred tax, are included in the determination of the net profit orloss for the year.

• Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxationauthorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantivelyenacted, at the year-end date. Current tax assets and tax liabilities are offset where the entity has a legallyenforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liabilitysimultaneously.

• Deferred Taxes:

Deferred income tax is provided in full, using the balance sheet approach, on temporary differences arising betweenthe tax bases of assets and liabilities and their carrying amounts in financial statements. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a businesscombination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferredincome tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end ofthe year and are expected to apply when the related deferred income tax asset is realised or the deferred income taxliability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probablethat future taxable amounts will be available to utilise those temporary differences and losses.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable taxregulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected tobe paid to the tax authorities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets andliabilities and when the deferred tax balances relate to the same taxation authority.

Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to itemsrecognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in othercomprehensive income or directly in equity, respectively.

2.27 Significant accounting judgements, estimates and assumptions

The preparation of financial statements requires management to make judgements, estimates and assumptions thataffect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes thatrequire a material adjustment to the carrying amount of assets or liabilities affected in future years.

I. Estimates and assumptions

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

(a) Defined benefit plans gratuity benefits

The cost of the defined benefit plans such as gratuity are determined using actuarial valuations. An actuarial valuationinvolves making various assumptions that may differ from actual developments in the future. These include thedetermination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in thevaluation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. Allassumptions are reviewed at each year end.The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yieldsavailable on government bonds at the accounting date with a term that matches that of liabilities. Salary increaserate takes into account of inflation, seniority, promotion and other relevant factors on long term basis.

(b) Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuationmodel, which is dependent on the terms and conditions of the grant. This estimate also requires determination of themost appropriate inputs to the valuation model including the expected life of the share option, volatility and dividendyield and making assumptions about them.

2.28 Recent accounting pronouncements

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) (Amendment) Rules, 2023 on 31st March 2023 amending:

a) Ind AS 1, ‘Presentation of Financial Statements’ - This amendment requires companies to disclose their material accounting policies rather than their significant accounting policies.

b) Ind AS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ - This amendment has introduced a definition of ‘accounting estimates’ and includes guidance to help distinguish changes in accounting policies from changes in accounting estimates.

c) Ind AS 12 ‘Income Taxes’ - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The amendments clarify how companies account for deferred tax on transactions such as leases

These are applicable from Financial Year beginning on or after 1st April 2023 (Thus for us will be applicable from 1st April 2024).

Based on a preliminary evaluation, the Company does not expect any material impact on the financial statements resulting from the implementation of these amendments