| The Directors are pleased to present the Thirteenth Annual Report and
the Audited Statement of Accounts of the Company for the year ended
31st March 2012.
FINANCIAL RESULTS:
(Rs In Lacs)
Particulars For the
year ended For the
year ended
31st March
2012 31st March
2011
Revenue from Operations and Other Income 22,091.79 18,443.69
Profit Before Interest, Depreciation and
Tax (PBIDT) 1,421.05 2,528.23
Less : Interest 853.47 683.04
Less : Depreciation 1,681.05 1,709.74
(Loss) before Tax (PBT) (1,113.47) 135.46
Provision for taxation - (63.35)
(Loss) after Tax (PAT) (1,113.47) 198.81
Add : Profit brought forward from
previous year 569.34 370.53
Balance carried forwarded to Balance Sheet (544.13) 569.34
BUSINESS OVERVIEW
During the year under review, your Company has achieved an operational
and other income of ' 22,091.79 lacs. The Company has posted a net loss
of ' 1,113.47 lacs during the year as compared to a net profit of '
198.81 lacs in the previous year.
During the year profitability was adversely affected mainly on account
of loss due to foreign exchange fluctuation of ' 448.16 incurred on
redemption of FCCB and provision of Service Tax Liability for '
1,116.90 Lacs discussed in detail hereinafter.
SERVICE TAX PROVISION
Finance Act 2010 defined renting of immovable property as a taxable
service with retrospective effect from 1st June 2007. The company
challenged the levy of service tax on renting of immovable property
(Levy) before various High Courts, which had granted an interim stay in
favour of the Company against the proposed Levy.
Based on the legal advice obtained by the Company, no provision for
this Levy was made by the Company in earlier years. This levy was
upheld by various High Courts during the current year. The Company has
filed a Special Leave Petition before the Hon'ble Supreme Court which
is pending and is making payment as per directions of the Hon'ble
Supreme Court.
Accordingly, the Company has provided for this levy and an amount of '
309.07 lakhs being the charge for the current year is included in
'Service tax' and the amount of ' 807.83 lakhs being the charge for
the period upto 31st March 2011 is shown as an exceptional item in the
Statement of Profit and Loss. Please refer note no. 31 of the Notes to
Accounts in this regards.
NEW PROPERTIES:
During the year 2 Multiplex were opened in Chennai and Kolkata. With
this, the total number of operational properties of the Company now
stands at 27 with 102 screens and seating capacity of 28,518 seats.
DIVIDEND
In view of net losses for the year, the directors do not recommend any
dividend for the year ended 31st March 2012.
SUBSIDIARIES
During the year, the Company has acquired further shareholding of
Headstrong Films Private Limited and now it has become a subsidiary of
the Company. Besides this, the Company has two more subsidiaries,
namely Fame Motion Pictures Limited and Big Pictures Hospitality
Services Private Limited.
Fame Motion Pictures Limited is mainly engaged in distribution of
films. Big Pictures Hospitality Services Private Limited is engaged in
the business of operating food court and restaurants in India and
Headstrong Films Private Limited is engaged in the business of film
production and distribution in India. During the year, there are no
business activities in these two companies. However, the Management is
re-assessing the business feasibility and is exploring new initiatives
/ projects.
The Ministry of Corporate Affairs, New Delhi has issued a General
Circular No: 2 /2011 dated 8th February 2011 (said Circular) granting
general exemption from complying with the provisions of Section 212 and
the General Exemption is subject to certain conditions which inter alia
requires the Board of Directors of the Company to give consent, by
passing a Board Resolution, for not attaching the Balance Sheet of the
subsidiary/ies concerned. Accordingly, your Directors have passed
necessary Board Resolution to avail the above general exemption. The
Consolidated Financial Statements of holding company and all the
subsidiaries, prepared in strict compliance with applicable accounting
standards and Listing Agreement as prescribed by the Securities and
Exchange Board of India (SEBI) and duly audited by Statutory Auditors
of the Company have been presented in the Annual Report along with the
prescribed Financial Information in respect of the subsidiary
companies. The Company will make available the Annual Accounts of the
subsidiary companies and the related detailed information to the
Members of the Company as well as Members of subsidiary companies who
may be interested in obtaining the same at any point of time. The
Annual Accounts of the subsidiary companies will also be kept open for
inspection at the Registered Office of the Company as well as that of
the respective subsidiary companies. Hard copy of details of accounts
of subsidiaries shall be made available to the Members on demand.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205C(2)(b) of the Companies Act,
1956, an amount of application money of ' 0.46 Lacs received during the
Initial Public Offer made in 2005 and remained unclaimed for a period
of 7 years have been transferred by the Company to the Investor
Education and Protection Fund.
DIRECTORS
Mr. Pavan Kumar Jain and Mr. Kishore Biyani, Directors of the Company
retire by rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment.
A brief resume of the Directors being proposed to be
appointed/re-appointed as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges is stated separately in the notice
convening the Annual General Meeting.
ISSUE OF SHARES
Employee Stock Option Scheme - 2009
During the current financial year, in accordance with the terms and
conditions of the Employees Stock Option Scheme 2009, the options
vested in the second year were exercised and 36,603 equity shares of
the face value of ' 10 each were allotted to the eligible employees of
the Company.
The applicable disclosures as stipulated under SEBI (Employee Stock
Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999, is
provided as Annexure-I, forming part of this report.
The Company has received certificate from Auditors of Company
confirming that scheme has been implemented in accordance with SEBI
Guidelines and resolution passed by Shareholders. Auditors' certificate
would be placed at Annual General Meeting for inspection by members.
Rights Issue
Through the Letter of Offer dated 30th January 2012, the Company made a
Rights Issue of 20,290,508 equity shares with a face value of ' 10 each
at a premium of ' 34 per equity share. The Rights Issue was opened for
subscription on 7th February 2012 and was closed on 21st February 2012.
Allotment of 20,290,508 equity shares were made on 2nd March 2012.
Details of utilization of Rights Issue Proceeds
(Rs In Lacs)
Particulars Proposed
Utilisation Utilised
upto 31st
March 2012 Balance Fund
Repayment of Loan 7,000.00 7,000.00 0.00
Issue Expenses 180.04 171.24 8.80
General Corporate
Purpose 1,747.78 0.00 1,747.78
Total 8,927.82 7,171.24 1,756.58 *
*Temporarily invested in liquid mutal funds.
APPOINTMENT OF MANAGER UNDER SECTION 269 OF THE COMPANIES ACT, 1956
During the year, Mr. Rajeev Patni was appointed as Manager of the
Company pursuant to the provisions of Section 269 of the Companies Act,
1956, subject to the approval of the shareholders in the ensuing Annual
General Meeting.
REDEMPTION OF OUTSTANDING FCCB
During the year, the outstanding Series A Bond and Series B Bond
aggregating US $ 13,000,000 were redeemed at 82% of the redemption
value. On redemption of such bonds, the Company made full and final
settlement of its liabilities and obligations in respect of the
outstanding bonds.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors make the following statement pursuant to Section
2I7(2AA) of the Companies Act, 1956:
(i) That in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed;
(ii) That the Board of Directors have selected such accounting policies
and applied them consistently, and made judgments and estimates that
were reasonable and prudent so as to give the true and fair view of the
state of affairs of the Company as at 31st March 2012, and the loss of
the Company for the said financial year;
(iii) That the Board of Directors have taken proper and sufficient care
for the maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 1956, for safeguarding the assets
of the Company and for preventing and detecting fraud and other
irregularities;
(iv) That the Board of Directors have prepared the annual accounts on a
"going concern basis" and on an "accrual basis".
AUDITORS
M/s. Patankar & Associates (Firm Registration No. 107628W), Chartered
Accountants, Auditors of the Company will retire from the office of the
Auditors at the conclusion of the forthcoming Annual General Meeting
and are eligible for re-appointment. They have furnished a certificate
of their eligibility for appointment under Section 224(IB) of the
Companies Act, 1956 and they are not disqualified under provisions of
Section 226(3)(e) of the said Act.
AUDITORS' REPORT
The Auditors Report to the Shareholders does not contain any
qualifications. The notes forming part of the accounts are
self-explanatory and do not call for any further clarifications under
Section 217(3) of the Companies Act, 1956.
LISTING FEES
The Company confirms that the Annual Listing Fees due to BSE Limited
and National Stock Exchange of India Ltd., Mumbai for the Financial
Year 2012-13 have been paid.
CORPORATE GOVERNANCE
In accordance with Clause 49 of the Listing Agreement with Stock
Exchanges, your Company has ensured continued compliance of Corporate
Governance requirements during the financial year ended 3Ist March 20I2
and a Management Discussion and Analysis, Corporate Governance Report
and a Certificate from the Statutory Auditors on compliance of
conditions of Corporate Governance are forming part of the Annual
Report.
In compliance with the requirements of clause 49(V), a certificate from
Manager and as Head of Finance is forming part of Corporate Governance
Report.
All the Board Members and senior Management Personnel of the Company
had affirmed compliance with the Code of Conduct for the Board and a
declaration to this effect duly signed by the Manager of the Company is
forming part of Corporate Governance Report.
INTERNAL CONTROL SYSTEM AND ITS ADEQUACY
Your Company has adequate Internal Control System to ensure
safeguarding of assets against unauthorized use and to ensure that all
transactions are duly authorized, recorded and reported correctly. The
Company has an Internal Audit System carried out periodically.
FIXED DEPOSITS
During the year, your Company has not invited nor accepted/renewed
deposits from the public within the meaning of Section 58A, 58AA and
other relevant provisions of the Companies Act, 1956, if any.
PARTICULARS OF EMPLOYEES
There are no employees who have been paid salary in excess of the limit
stipulated under provisions of Section 217(2A) of the Companies Act,
1956. Hence, no separate disclosure is made by the Company in this
regard.
CONSERVATION OF ENERGY
Your Company has taken the following energy conservation measures:
- Power factor is being maintained with the use of capacitor banks
and Auto power factor correction meter. These banks are used to
neutralize the inductive current by providing capacitive current. As a
result, a power factor improves and the Company gets rebate as may be
applicable on energy bills from Electricity Distribution Companies. The
overall current consumption from the equipment also reduces which leads
to increase life cycle of the equipments like Motors and heaters.
- Successfully installed Variable Frequency Drive (VFD) for Audi AHU
motors in Multiplex Cinema theatres situated at Malad, Kandivali -
Raghuleela, Vashi, Kalyan, Bangalore - Prestige, Kolkata - South City,
Kolkata - Hiland Park & Panchkula, which helps us to control the speed
of Aircon motor as per the temperature and the occupancy. It helps to
optimize energy consumption for Air conditioning system.
- All operational units have implemented Planned Preventive
Maintenance (PPM) program where the schedule for all the engineering
and projection equipments are chalked out in advance with the PPM
chart. A benefit of the PPM program is to improve the efficiency of the
machines and minimizing breakdowns. As a part of PPM program the air
conditioning system was overhauled and chemical dosing was used to
recover the loss of ageing and reduced capacity. As a result, the
electrical current required for getting the desired result has reduced.
- All the new fittings are with CFL or energy a saver, which uses
less electrical power as compared to incandescent lamps. Replaced 50
watt Halogen lamps with 3 watt/ 9watt LED lamps in Malad property.
- Emphasizing on CFL and LED lamps in existing units and upcoming
project.
- Installed digital projectors at Malad, Andheri, Vashi, Pune - FNS,
Kolkata - South City, Bangalore - Lido & Shankarnag. This consumes 20%
less amount of energy compared with conventional projection system.
Upcoming properties are equipped with 80% digital projection system.
- LED based outdoor signage has been installed at Multiplex Cinema
Theatre situated at Panchkula.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
Our business is such that there is not much scope for new technology
absorption, adaptation and innovation.
Your Company continues to use latest technologies for improving the
productivity and quality of its services and products, wherever
possible.
EMPLOYEE RELATIONS:
Employee Relations continued to be cordial throughout the year. The
Directors appreciate the efforts put in by the employees at all the
levels.
ACKNOWLEDGEMENT:
The Board of Directors of your Company place on record their gratitude
and would like to thank Shareholders, Bankers, Financial Institutions,
Customers, Dealers and Suppliers for their valuable support and
co-operation.
For and on behalf of the Board
Pavan Kumar Jain Deepak Asher
Director Director
Place: Mumbai
Date: 24th May 2012
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