Phantom Digital Effects will not meet the statutory timeline of May 30, 2026, for the approval and submission of its audited financial results for the financial year ended March 31, 2026. The delay stems from operational and structural factors, primarily the evaluation of Indian Accounting Standards (Ind AS) related to a proposed migration from the NSE SME Emerge Platform to the Main Board. Additionally, the company is managing the complexities of consolidating overseas subsidiaries for the first time, which has extended the audit timeline.

The company has filed an application for migration to the NSE Main Board, which is at an advanced stage of consideration. In connection with this, Phantom Digital Effects is evaluating the applicability of Ind AS and related financial reporting requirements under the Companies Act, 2013, and SEBI (LODR) Regulations, 2015. This evaluation process, along with consultations with statutory auditors, has impacted the finalisation schedule for the financial results.

During the financial year 2025-26, the company completed the acquisition of Milk Visual Effects Limited in London, United Kingdom. This acquisition requires the consolidation of the subsidiary's financial statements with the holding company for the first time. The process involves significant complexity, including the alignment of accounting policies across jurisdictions, currency translation from GBP to INR, and the elimination of intercompany transactions.

The audit readiness of overseas subsidiaries was further impacted by operational transitions and the reorganisation of accounting and finance functions at Tippet Studios Inc., USA. These changes necessitated additional time for the review and streamlining of accounting records and supporting documentation. The company is undertaking additional verification procedures to ensure the completeness and accuracy of the consolidated financial statements, including the reconciliation of intercompany transactions.

The Audit Committee and the Board of Directors are closely monitoring the progress of the audit and consolidation process. Phantom Digital Effects has undertaken to submit the audited financial results to the NSE immediately upon approval by the board and to keep the exchange informed of any material developments regarding the updated timeline.

Phantom Digital Effects Limited received an Administrative Warning Letter from the Securities and Exchange Board of India (SEBI) on May 25, 2026, addressing non-compliance with Qualified Institutional Placement (QIP) allotment requirements during the financial year 2025-26. The regulator identified that two proposed allottees, who were related or group entities, should have been treated as a single allottee under Regulation 180(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. This classification resulted in a breach of the minimum allottee requirement prescribed in the regulation.

The proposed allotment was part of a QIP tranche approved by the Board of Directors on May 8, 2025. During the process of obtaining listing approval from the stock exchange, the relationship between the allottees was identified. Upon being informed by the exchange, the company voluntarily withdrew and nullified the allotment via a Board Resolution dated May 9, 2025. The company informed the stock exchange of this withdrawal on the same day, ensuring that no securities were ultimately allotted pursuant to the tranche and that no funds remained with the company.

SEBI’s letter does not impose any monetary penalty or operational restrictions on the company. Phantom Digital Effects stated that there was no loss caused to investors or shareholders as a result of the issue. The company acknowledged the observations and committed to strengthening its internal compliance review and due diligence mechanisms to ensure strict adherence to regulatory provisions in the future.

The disclosure was submitted to the National Stock Exchange of India Limited on May 26, 2026, following an internal review of disclosure requirements under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The matter will be placed before the Board of Directors in the ensuing meeting for noting.

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