REPORT OF THE DIRECTORS AND MANAGEMENT DISCUSSION AND ANALYSIS
REPORT OF THE DIRECTORS AND
Your Directors present their Twentieth Annual Report together with the Audited Accounts
of the Company for the year ended 3151 March 2014.
2. DIVIDEND:
In view of loss Incurred during the year under review, your Directors do not recommend
any dividend to the Shareholders for the financial year ended 31" March 2014.
3. OPERATIONS:
During the year under review, the Company produced and marketed documentary films for
the Ministry of Panchayati Raj titled Role of Award winning Gram Panchayts of Goa, of 25
minutes duration. A prestigious quasi-ad film on the architecture of Mumbais famous
landmark Victoria Terminus (CST) was also produced for Central Railways. The film received
much critical acclaim from viewers across the country and it was of 6 minutes duration and
titled Worlds Most Beautiful Heritage Station Building.
The Company is on the empanelment of various Ministries, Madhyam and NFDC, New Delhi
and NPCL, Mumbai.
In the current year the Company has produced three animated modules ad films in 2D
format titled Panchayat Extension in Schedule Areas - PESA, for Ministry of Panchayati
Raj, of 60 seconds duration each. We are also in the process of finalizing couple of
documentaries/ad films for other Ministries thru NFDC.
The Company during the year under review also focused on the medical division because
of more opportunity in this area of business. However due to stringent competition from
unorganized sector and reduced profit margin the performance compared to previous year has
come down. The Company is taking measures to improve its performance.
The Company had a turnover of Rs 21.12 lakhs, including other income, during the year
under review. However the Companys revenue declined, the primary reason being the delayed
start of our daily show, which has resulted in a clear shift of revenue. Hence, the
Companys loss before tax level stood at Rs 1,352.89 lakhs against previous year loss
figure of Rs 84.30 lakhs, after the write off certain non-moving inventories, doubtful
debtors and trade advances.
4. FUTURE OUTLOOK:
The company shall continue to explore initiatives like acquisition of production and
marketing rights of successful and performing programmes and also explore more
opportunities in television content production for hindi and regional channels. The
Company in the current year shall be producing Indias first English theatre talk show,
titled Pariez Vous English...!. This shall be in collaboration with NCPA, a series of %
hour episodes numbering 39. The show shall explore the history of Indian English Theatre
from pre-independence days to present day, with the likes of Amitabh Bachchan, Shashi
Kapoor, Shahrukh Khan, Alec Padamsee, Naseerudin Shah, Ompuri, Kabir Bedi are some of them
to name a few. The final creatives along with the budget is being discussed upon. We have
also pitched a daily show for Star Vijay Channel which should convert this year. The
channel has approved the concept and asked the Company to proceed with further development
on the script and screenplay. The Company has submitted couple of good television shows-
fiction and documentary proposals for Doordarshan along with couple of feature film
broadcast proposals. Apart from these the Company will be getting more work from various
ministries thru NFDC.
| I.FINANCIAL RESULTS: |
Yearended |
|
31st March 2014 |
31st March 2013 |
|
(in Rs) |
(in Rs) |
| Gross Loss before Financial Cost and Depreciation |
(135,118,542) |
(7,892,384) |
| Less: Financial Cost |
22,525 |
51,029 |
| Depreciation |
410,343 |
486,967 |
| Loss before tax |
(135,551,410) |
(8,430,380) |
| Current taxes & Short Provisions |
- |
- |
| Loss aftertax |
(135,551,410) |
(8,430,380) |
| Balance of Profit/ (Loss) from previous years |
28,397,623 |
36,828,003 |
| Balance carried to Balance Sheet |
(91,656,528) |
28,397,623 |
The company also proposes to co-produce a tamil language feature film with good star
cast at a very reasonable budget with excellent profit margin. The film is of horror
genere with 5 top heros and 5 top heroines. The company is in the process of raising funds
for the same. The artists have already been spoken to.
5. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT :
Managements Discussion and Analysis Report for the year under review, as stipulated
under Clause 49 of the Listing Agreement with Stock Exchange, Mumbai, is included
elsewhere in this Annual Report.
6. CORPORATE GOVERNANCE:
A separate report on Corporate Governance together with Certificate from Practicing
Chartered Accountant on its compliance is included elsewhere in this Annual Report.
7. DIRECTORS:
Satyen Gandhi - Director (DIN : 00471423) retires by rotation at the ensuing Annual
General Meeting and being eligible has offered himself for re-appointment.
8. LISTING ON THE STOCK EXCHANGE:
The Companys shares are listed with the Bombay Stock Exchange and the Company has paid
the necessary listing fees for the financial year 2013-14.
9. FIXED DEPOSITS:
The Company has not accepted or renewed any Fixed Deposits within the meaning of
Section 58A of the Companies Act, 1956.
10. DIRECTORS RESPONSBILITYSTATEMENT:
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:
(i) in the preparation of annual accounts, the applicable Accounting Standards have
been followed along with proper explanation relating to material departures.
(ii) the Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company as at 31st March 2014 and of the profit
of the Company for the financial year.
(iii) the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) the Directors have prepared the Annual Accounts on a going concern basis.
11. AUDITORS:
M/s Mukesh M Shah & Co, Chartered Accountants, who are the Statutory Auditors of
the Company, retires at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment.
12. PARTICULARS OF EMPLOYEES COVERED UNDER THE (PARTICULARS OF EMPLOYEES RULES), 1975:
The Company has not paid any remuneration attracting the provision of section 217(2A)
of the Companies Act, 1956 read with Companies (particulars of employees rule), 1975.
Hence, no information is required to be appended to this report in this regard.
13. ADDITIONAL INFORMATION:
Information in terms of section 217(1 )(e) of the Companies Act, (Disclosure of
particulars in the Report of Board of Directors) Rules, 1988 and forming part of the
Directors Report is appended in Annexure to this report.
14. ACKNOWLEDGEMENT:
Your Directors would like to express their grateful appreciation for assistance and
co-operation received from Banks, Government Authorities, Stock Exchange, Producers and
Right holders, Television Channels, Customers, Vendors and Members during the period under
review. Your Directors also wish to place on record theirdeep sense of appreciation for
the committed services of the executives, staff and workers of the Company.
|
For and on behalf of the Board of Directors |
|
Sd/- |
| Place: Mumbai |
Ajay Shanghavi |
| Dated: 12th August 2014 |
Managing Director |
ANNEXURE TO DIRECTORS REPORT FOR THE YEAR ENDED 31st MARCH 2014
Information in terms of Section 217 (1)(e) of the Companies Act, (Disclosure of
particulars in respect of Board of Directors) Rules, 1988 are as under:
A. CONSERVATION OF ENERGY:
The operations of the Company are not energy intensive. However energy conservation
measures are being taken for regular preventive maintenance of all equipments. This
enhances productivity and efficiency of the equipment resulting in power saving.
B. TECHNOLOGY ABSORPTION:
As the Company has not acquired any technology, the question of absorption of
technology does not apply to the Company.
C. FOREIGN EXCHANGE OUTGO:
During the year, there was no outgo of foreign exchange.
|
For and on behalf of the Board of Directors |
|
Sd/- |
| Place: Mumbai |
Ajay Shanghavi |
| Dated: 12th August 2014 |
Managing Director |
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Directors have pleasure in presenting the Management Discussion and Analysis Report
for the year ended 31" March 2014.
The Company was started to capitalize on the growing demand for quality programming
of the mushrooming satellite channels.
The Company has a good infrastructure for a total production environment for television
software, marketing television software, documentaries, events, and Television commercials
and trading in feature film and television program rights, worldwide.
IN HOUSE PRODUCTIONS OBJECTIVES
To produce and market international quality television software for leading Indian and
Offshore terrestrial and satellite television channels.
Produce and market relevant television software for Indias leading terrestrial channel
- Doordarshan that penetrates across the length and breadth of the country.
Export television software to countries in Asia, Europe, USA, Africa and the Middle
East.
Acquire media properties on an ongoing basis including television software concepts,
scripts and treatment, film concepts, television and feature film broadcast rights, music
rights for films and service contracts with leading actors, directors, cameramen, music
directors etc., on a project basis.
To build a library of television programs and feature films that may be exploited in
the domestic and international markets.
The company has successfully created and produced some of the best television software
in the country in genres such as soaps, sitcoms, thrillers, variety shows, events etc.,
for local and International television stations and clients. New genres are becoming
increasingly popular and as a result more entrants are expected to participate which makes
the media more competitive. The Company will be working more closely with various
ministries and Government Agencies and shall be producing documentary and social welfare
ad films, which is a big break through the Company got due to sustained efforts put in.
ECONOMIC. INDUSTRY AND BUSINESS OVERVIEW
Indias Media and Entertainment (M&E) industry reaches millions of people. 161
million TV households, 94,067 newspapers (12,511 dailies), close to 2000 multiplexes, 214
million internet users out of which 130 million are mobile internet users - all these are
platforms that could drive change and be transformational catalysts. 2013 was a tumultuous
year for the industry. In the midst of an economic slowdown, the industry faced several
challenges, both business and regulatory. However, 2013 was a year in which the foundation
of the industry was strengthened to position for growth as the economy improves. In
television, industry structures began the process of realignment, with Multiple System
Operator (MSOs) and Local Cable Operator (LCOs) in a delicate dance to evolve their
relationship. Several regulations including the ad cap and notifications around
aggregators were announced, that will likely change how the industry does business.
Digitisation has yet to deliver its promise with set top boxes seeded in Phase I and II
cities but with packaging and Average Revenue per User (ARPU) increases yet to kick in.
The future though, looks promising, with efforts being made to introduce channel
packaging, implement subscriber management systems and raise the ARPU - initiatives that
are likely to benefit all the stakeholders in the television ecosystem. Films had slower
growth in 2013, than in 2012 and returned to the mean as far as growth rates go. Multiplex
expansion, ticket prices growth and the expansion of digital screens are all likely to
slow down in the near term - challenging the industry to find new avenues to maintain
momentum. However, India is a heavily under-screened country and the macro story for the
film industry remains strong. The print sector had a comfortable year -especially regional
print, with English print struggling on the ad revenue front. Advertising
remained steady in the smaller towns and cities and elections in the Hindi heartland
provided a boost. In 2014, with general elections, the news business is likely to have a
good year. Radio too, had a good year with better long term prospects. The industry
continues to require regulatory interventions as it is in dire need of reform. FM radio
nevertheless, is now becoming an integral part of many media plans. The big hope for the
future of the M&E industry continues to be digital. With a fast growing internet user
base of over 200 million internet users, the potential of the industry to enhance
engagement with customers and generate revenue from digital media is indeed vast. 2013 saw
a few tipping points for digital; the telecom companies began to focus on data as a
revenue driver, as contribution from voice slowed, and the advertising agencies began a
furious competition to acquire digital and social media boutiques. All of these point to a
bright future for this sector. Over the years, live events has been emerging as a robust
category. Last year saw Indian audiences flocking to shows by international DJs, musicians
and comedians. IP driven shows also show record viewership and attendance. Live events
have become a major source of revenue for artistes and a credible avenue for sponsors.
Several companies in this space are heading towards critical mass and are poised to take
the sector forward. It is time for Indian companies in the M&E sector to begin looking
at opportunities outside India. While several companies have gone overseas in search of
the diaspora dollar, there are opportunities that Indian companies could begin to explore
in mainstream markets overseas. For example, Africa and the Middle East are some of the
fastest growing M&E markets. As companies in other sectors have shown, the experience
of working in India is an asset when entering these markets - Indian M&E companies
could do well to explore the MEA region.
The Indian Media and Entertainment (M&E) Industry, one of the most vibrant and
exciting industries in the world, has had a tremendous impact on the lives and the Indian
economy. As the M&E industry widens its reach, it plays a critical role in creating
awareness on issues affecting, channelling the energy of and building aspirations among
Indias millions. As it entertains and informs the country, the M&E industry has been
a catalyst for the growth of large parts of the Indian economy. Take for example, a
villager - illiterate and previously unaware of what life has to offer, who begins to see
a better life through entertainment programs on TV and aspires for a better life for him
and his family. This drives demand for various products and services. These aspirations
have been key to self motivated transformation taking deep root in India - Transformation
not just from handouts and government schemes, but transformation stemming from ambition
and aspiration. The media plays a significant role in our lives today and is all pervasive
with touch points ranging from television to newspapers to films to radio to outdoor
properties. With the addition of new media such as social networking services, animation
and VFX, online gaming and applications running on mobile devices, a new dimension has
been added to the world of media that was dominated by traditional media. In addition to
their implicit impact, all media platforms provide a great opportunity to carry explicit
messages to create social impact. Further, interactive and social platforms give people a
voice.
In calendar year 2013, the Indian Media & Entertainment (M&E) industry
registered a growth of 11.8 per cent over 2012 and touched INR 918 billon. The overall
growth rate remained muted, with a slow GDP growth and a weak rupee. Lower GDP meant lower
demand from the consumer and this impacted advertising. At the same time, the industry
began to see some benefits from the digitisation of media products and services, and
growth in regional media. Gaming and digital advertising were the two prominent industry
sub-sectors which recorded a strong growth in 2013 compared to the previous year, albeit
on a smaller base. For projections till 2018, digital advertising is expected to have the
highest CAGR of 27.7 per cent while all other sub-sectors are expected to grow at a
Compound Annual Growth Rate (CAGR) in the range of 9 to 18 per cent. Overall, the industry
is expected to register a CAGR of 14.2 percent to touch INR 1785.8 billion by 2018. The
Indian M&E sector showed some resilience and began to grapple seriously with some
structural issues it has long talked about but not engaged with. These include TV and
Print industry measurement, advertising volumes, inventory and rates, actions to see
digitisation through and reap its benefits, working out the MSO-LCO relationship,
copyright laws and operational efficiency. Many of these remain alive and will take a few
years to sort through.
Source: FICCI-KPMG Indian Media and Entertainment Industry Report 2014.
FLOW AND PRODUCT MANAGEMENT
Regular ideation process backed by a strong shoot, logistics, product, talent and crew
management helped the company not only to save money and time but also has increased its
delivery level to its peak, with less wastage and quick scalability. The trading
activities and the medical division of the company has got very good response and the
company should expect a good growth in the years ahead.
THREATS. RISKS AND CONCERNS
The management of risk does not imply risk elimination but prudent risk management.
Given the companys market position, any new entrant represents competition. The company
has been one of the consistent content providers for the last few years it can withstand
the competition despite and increasing number of new players. Due to high attrition of key
professionals and actors the quality of the programs could suffer. The company strength is
more on the story lines, script and screenplay rather than on the actors and the company
has performance oriented appraisal system thus resulting in low attrition level. The
company has moved very strongly in the area of trading in television software and films.
But there is always a risk in sourcing good programs in a reasonable acquisition cost. The
company is quite confident to move ahead in this front with its contacts and past track
record in this field.
INTERNAL CONTROLS AND THEIR ADEQUACY
The company believes in formulating adequate and effective internal control systems and
implementing the same to ensure that the interests of the company are safeguarded and
reliability of accounting data and its accuracy are ensured with proper checks and
balances. The senior management team meets to address issues like operational efficiency,
protection and conservation of resources, accuracy and promptness in financial reporting
and compliance with laws and regulation, at regular frequency to discuss various issues
that influence the business and to take strategic decisions. The company has an internal
audit system, which submits report to the Chairman of Audit Committee periodically.
FINANCIAL AND OPERATIONAL PERFORMANCES
The last year has been a challenging one and we have tried to seek new opportunities in
the changing environment. Through a variety of strategies, our income from overall
operations i.e. from the Healthcare Division and from Media Operations has lowered from Rs
109.70 lakhs to Rs 21.12 lakhs on year to year comparison. The Companys turnover
decreased, compared to the previous year, so also the revenues, the primary reason being
the delayed start of our daily show, which has resulted in a clear shift of revenue. Hence
the Companys loss before tax level stood at Rs 135.51 lakhs against previous year loss
figure of Rs 84.30 lakhs, after the write off of certain non-moving inventories, doubtful
debtors and trade advances. The Company is taking suitable measures to improve the
turnover and margins in future operations and to attain better efficiency.
HUMAN CAPITAL
As a knowledge database and service provider, we are fully conscious of our
responsibility toward our customers. Our efforts are directed toward the fulfillment of
customer satisfaction through the quality of services. As the consolidation of this
industry gains momentum, the need to develop a dedicated team of skilled manpower assumes
urgency and importance.
We will continue to focus on training and motivation of manpower so as to develop teams
of qualified and skilled personnel to effectively discharge their responsibilities in a
number of projects and activities. It is, in this context, which we have been working
towards promoting the skills and professionalism of our employees to cope with and focus
on the challenges of change and growth.
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