Background of the Company
The Company is one of the largest Exhibition theatre chains in India
and having business of exhibition of films. "Cinemax" brand is one
of the most recognisable film exhibition brands and stands for
superlative and innovative entertainment for families and social
cohorts. The exhibition chain is a combination of high-end multiplexes
and provides customer satisfaction through process enhancements and
constant innovation in the services and facilities such as high comfort
recliner seating arrangements in 'The Red Lounge', massage chairs,
etc.
The Company is also engaged in gaming business which is currently
operational under two brand names "Giggles- The Gaming Zone" and
"VERSUS". The ambience has been exclusively designed with interiors
and colors that enhance the overall gaming experience.
1. Basis of preparation of financial statements
The financial statements which have been prepared under the historical
cost convention on the accrual basis of accounting, are in accordance
with the applicable requirements of the Companies Act, 1956 (the
'Act') and comply in all material aspects with the Accounting
Standards prescribed by the Central Government, in accordance with the
Companies (Accounting Standards) Rules, 2006, to the extent applicable.
2. Use of estimates
The preparation of financial statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumption that affect the reported amounts of assets and
liabilities, revenue and expenses and disclosure of contingent
liabilities. The estimates and assumptions used in accompanying
financial statements are based upon managements' evaluation of the
relevant facts and circumstances as of the date of the financial
statements. Actual results may differ from the estimates and
assumptions used in preparing the accompanying financial statements.
Any revision to accounting estimates is recognised prospectively in
current and future periods.
3. Disclosures pursuant to Accounting Standard 15 (AS -15)
"Employee Benefits"
i. The Company has a defined benefit gratuity plan. Every employee
gets a gratuity on leaving the Company after the completion of five
years, at fifteen days of last drawn salary for each completed year of
service.
The following table set out the status of the gratuity plan as required
under Accounting Standard (AS) - 15 - Employee benefits and the
reconciliation of opening and closing balances of the present value of
the defined benefit obligation.
4. Segment reporting:
Primary segment information:
As the Companys' business activity falls within a single primary
business segment i.e., Film exhibition, the disclosure requirements of
AS-17 "Segment Reporting", to the extent it relates to disclosure
of primary segment information is not applicable.
Secondary segment information:
The entire operations of the Company are within India and therefore the
secondary segment reporting based on geographical location of its
customers is also not applicable to the Company.
5. Earnings/(Losses) per share (EPS):
The basic earnings/ (losses) per equity share is computed by dividing
the net profit/(loss) attributable to the equity shareholders for the
year/period by the weighted average number of equity shares outstanding
during the reporting year. The number of shares used in computing
diluted earnings/(losses) per share comprises the weighted average
number of shares considered for deriving basic earnings/(losses) per
share and also the weighted average number of equity shares, which may
be issued on the conversion of all dilutive potential shares, unless
the results would be anti dilutive. The earnings/ (losses) per share is
calculated as under:
6. Bank Borrowings:
A. Term Loans, Working Capital Loans and Non Fund Based Credit
Facilities taken from Axis Bank are secured against:
i. Charge on the movable fixed assets and current assets of the
Company.
ii. Debt Service Reserve Account (DSRA) equivalent to one month
interest repayment to be maintained under lien with Axis Bank.
iii. Goods procured under Letter of Credit.
iv. Undertaking from Cinemax India Limited that its subsidiary will
route their entire receivables through designated account with Axis
Bank.
B. Vehicle Loans taken from various banks are secured against the
vehicles taken on hire purchase and the personal guarantees of the
erstwhile directors.
7. Contingent liability includes claim against the Company not
acknowledged as debt Rs. 293.43 lacs.
8. Capital Commitments:
Estimated value of contracts remaining to be executed on capital
account and not provided for, net of advances, aggregated to Rs. 169.84
lacs (Previous year Nil).
8. CIF value of import in respect of capital goods purchased during
the period aggregated to Rs. 28.57 lacs (Previous year Nil).
9. Exceptional items includes the followings :
10. Based on the available information with the management, the
Company does not owe any sum to a micro, small or medium enterprise as
defined in Micro, Small and Medium Enterprises Development Act, 2006.
11. The Honorable High Court of Judicature at Bombay vide its order
dated 9 March 2012 has sanctioned the Scheme of Demerger i.e. Composite
Scheme of Arrangement between the Cineline India Limited (Formerly
known as Cinemax Properties Limited) and Cinemax India Limited (Cinemax
Exhibition India Limited) and their respective Shareholders and
Creditors under Sections 391 to 394 read with Sections 78, 100 to 103
of the Companies Act, 1956. 1 April 2012 and 20 April 2012 are the
appointed date and effective date, respectively of the scheme.
Accordingly, the Honorable High Court has inter alia sanctioned the
following:
a) Demerger of Exhibition of Films business:
The Scheme envisages the demerger of Theatre Exhibition business of
Cineline India Limited (Formerly known as Cinemax Properties Limited)
into separate entity i.e. Cinemax India Limited (Formerly known as
Cinemax Exhibition India Limited) on a going concern basis in the
manner provided for in the scheme.
b) Issue and Allotment of Shares of Cinemax India Limited (CIL) in the
ratio of 1:1.
Each individual shareholder of Cineline India Limited (Formerly known
as Cinemax Properties Limited) (CPL) {including their respective heirs,
executors, administrators or other legal representatives or the
successors - in - title} whose name shall appear in the Register of
Members of CPL as on the Demerger Record Date i.e. 18 May 2012 shall be
issued and allotted shares of CIL in the following manner:
"1 (One) fully paid Equity Share of Rs. 5 (Rupees Five) each of CIL
shall be issued and allotted for every 1 (One) fully paid Equity Share
of Rs. 10 (Rupees Ten) each held in CPL."
c) Reduction of the existing Equity Share Capital of CIL.
Subsequent to allotment as prescribed in Note 39 (b) above, the
existing 100,000 equity shares of Rs. 5 (Rupees Five) each of the
Company will be cancelled. This reduction would not involve either a
diminution of liability in respect of unpaid share capital or payment
of paid-up share capital or the provisions of Section 101 of the
Companies Act, 1956.
d) Name change of the Company:
Pursuant to Scheme of arrangement name of "Cinemax Exhibition India
Limited" changed to "Cinemax India Limited" with effect from 22
June 2012.
12. On 29 November 2012, the erstwhile promoters (Kanakia Group) had
entered into a definitive sale agreement with PVR Limited (through Cine
Hospitality Private Limited, its wholly owned subsidiary) for the sale
of their entire stake of 69.27% in Cinemax India Limited.
13. On 8 January 2013, PVR Limited through its wholly owned
subsidiary, Cine Hospitality Private Limited (the "Acquirer") have
purchased controlling stake in the paid up equity share capital of the
Company from the erstwhile promoters, pursuant to a block deal executed
on the floor of the stock exchange.
14. Further, PVR Limited through its wholly owned subsidiary, Cine
Hospitality Private Limited (the "Acquirer") has acquired the stake
of 23.92 % through open offer to public having tendering period closure
as on 15 February 2013, resulting total stake into 93.19 % in Cinemax
India Limited.
15. The Current Assets, Loans and Advances are stated at the value,
which in the opinion of the management, are realisable in the ordinary
course of the business. Current liabilities and provisions are stated
at the value payable in the ordinary course of the business.
16. Balances of Trade Receivables, Trade Payables, Advances from
Customers and Advances to Suppliers/Vendors are subject to
confirmation/reconciliation and subsequent adjustment, if any. In the
opinion of the management such adjustment are not likely to be
material.
17. Previous period comparatives:
Figures for the previous period have been regrouped wherever considered
necessary to confirm with the current year's presentation.
The Theatre Exhibition Business of Cineline India Limited (Formerly
known as Cinemax Properties Limited) has been demerged with effect from
1 April 2012 to a separate entity viz. Cinemax Exhibition India Limited
(presently known as Cinemax India Limited) in the manner provided for
in the scheme sanctioned by the Honorable High Court of Judicature at
Bombay vide its order dated 9 March 2012. Hence the figures for the
previous period cannot be effectively compared with the figures for the
year ended 31 March 2013.
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