SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

PRODUCTIONS LTD.

ANNUAL REPORT 2005-2006

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

11TH ANNUAL REPORT 2OO5-20O6

CONTENTS PAGE NO. K Sera Sera Productions Limited > Notice 1 > Directors' Report 5 > Corporate Governance Report 9 > CEO / CFO Certification 17 > Auditors' Report on Corporate Governance 18 > Management Discussion & Analysis 19 > Auditors' Report 22 > Balance Sheet 25 > Profit and Loss Account 26 > Cash Flow Statement 27 > Schedules forming part of the Accounts 28 > Statement pursuant to Section 212(1)(e) of The Companies Act, 1956 42 > Balance Sheet Abstract and Company's General Business Profile 43 > Statement pursuant to Section 217(2A) of The Companies Act, 1956 44

Twenty Twenty Television Company Limited - Subsidiary > Directors' Report 45 > Auditors' Report 48 > Balance Sheet 51 > Profit and Loss Account 52 > Cash Flow Statement 53 > Schedules forming part of the Accounts 54 > Balance Sheet Abstract and Company's General Business Profile 60

K Sera Sera Productions FZ-LLC - Subsidiary > Directors' Report 61 > Auditors' Report 62 > Balance Sheet 63 > Income Statement 63 > Statement of changes in Equity 63 > Cash Flow Statement 64 > Notes to the Financial Statements 65

Consolidated Statements > Auditors' Report on Consolidated Accounts 69 > Balance Sheet 70 > Profit and Loss Account 71 > Cash Flow Statement 72 > Schedules Forming Part of Consolidated Accounts 73

Attendance Slip & Proxy Form

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

K SERA SERA PRODUCTIONS LIMITED (As on 2nd September, 2006)

BOARD OF DIRECTORS MR. ASHOK PAMANI Non-Executive Chairman MR. PARAG SANGHAVI Managing Director MR. RAMESH PAMANI Non-Executive Non-Independent Director MR. ASHOK GANGWANI Non-Executive Non-Independent Director MR. RAJ SITAL MOTWANI Non-Executive Independent Director MR. A. PARTHASARTHY NAIDU Non-Executive Independent Director DR. MITHILESH KUMAR SINHA Non-Executive Independent Director MR. PRAKASHKUMAR SHAH Non-Executive Independent Director MR. DINESH KUMAR DEORA Non-Executive Independent Director MR. PRAMOD SAWANT Non-Executive Independent Director MR. RAJESH SHAH Non-Executive Non-Independent Director

COMPANY SECRETARY MS. AMRUTA PARANJAPE

AUDITORS M/s. RSM & CO. Chartered Accountants

INTERNAL AUDITORS M/s. TIWARI SINGH HEGDE & ASSOCIATES Chartered Accountants

BANKERS STANDARD CHARTERED BANK LTD. KOTAK MAHINDRA BANK LTD. ORIENTAL BANK OF COMMERCE CANARA BANK HDFC BANK LTD. UTI BANK LTD. YES BANK LTD. CITIBANK N.A.

REGISTRAR & SHARE TRANSFER BIGSHARE SERVICES PRIVATE LIMITED AGENTS E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), - 400 072.

REGISTERED OFFICE VERSOVA SHREE DARSHAN CHS LIMITED, Ground Floor, Plot No. 15, R.D.R 2, Sardar Vallabhbhai Patel Nagar, Near Versova Telephone Exchange, Andheri (West), Mumbai - 400 053.

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

K SERA SERA PRODUCTIONS LIMITED

NOTICE After clause 37, insertion of clause 37A which shall read as under: NOTICE is hereby given that the ELEVENTH ANNUAL GENERAL MEETING OF K SERA SERA PRODUCTIONS "37A. The Fully paid shares shall be free from all lien LIMITED will be held at The Club, Colonial Hall, Ground and that in the case of partly paid share the Company's Floor, 197, D.N.Nagar, Andheri (West), Mumbai - 400 053 lien shall be restricted to money's called or payable at on Friday, 29th September 2006 at 9.45 a.m to transact a fixed time in respect of such shares." the following business : After clause 53, insertion of clause 53 A which shall ORDINARY BUSINESS : read as under:

1. To receive, consider and adopt the audited Profit & Loss "53A. The Company shall use a common form of Account for the year ended 31st March 2006 and transfer." Audited Balance Sheet as at that date together with After clause 142, insertion of clause 142 A which shall the Reports of the Board of Directors and the Auditors read as under: thereon. "142A. There shall be no forfeiture of unclaimed 2. To declare dividend on the 38,40,524, 5% Cumulative dividends before the claim become barred by law" Redeemable Non Convertible Preference shares of Rs. 10/- each. RESOLVED FURTHER THAT any Director or the Company Secretary of the Company be and is hereby 3. To Appoint a Director in place of Mr. Ashok Pamani, authorized to take necessary steps for giving effect to who retires by rotation and being eligible offers himself this resolution." for re-appointment. 7. To consider and, if thought fit, to pass, with or 4. To Appoint a Director in place of Mr. Raj Sital Motwani, without modification(s), the following resolution as who retires by rotation and being eligible offers himself an ordinary resolution : for re-appointment. "RESOLVED THAT in supersession of the Ordinary 5. To consider and, if thought fit, to pass, with or Resolution passed at the Annual General Meeting of without modification(s), the following resolution as th an Ordinary Resolution : the Company held on 7 July, 2004 and pursuant to the provisions contained in section 293(1)(d) of the "RESOLVED THAT M/s. RSM & Co., Chartered Companies Act, 1956 and other applicable provisions, Accountants be and are hereby reappointed as the if any, of the Companies act, 1956, consent of the Statutory Auditors of the Company to hold office from Company be and is hereby accorded to the Board of the conclusion of this meeting until the conclusion of Directors (which term shall be deemed to include any the next Annual General Meeting of the Company, upon Committee thereof for the time being and from time to such remuneration in addition to the reimbursement of time, to which all or any of the powers hereby conferred traveling and other out of pocket expenses incurred on the Board by this resolution may be delegated by incidental to their functions, as may be agreed to the Board) to borrow from time to time any sum or sums between the Board of Directors of the Company and of money not exceeding Rs. 500 Crores ( Rupees Five the Auditors and that the Board of Directors of the Hundred Crores Only ) with or without security and on Company be and is hereby authorized to fix the such other terms and conditions as the Board of remuneration as aforesaid." Directors at its sole discretion may deem fit, notwithstanding that the moneys to be borrowed, SPECIAL BUSINESS: together with the moneys already borrowed by the Company (apart from Temporary Loans obtained or to 6. To consider and, if thought fit, to pass, with or be obtained from the Company's Bankers in the without modification(s), the following resolution as ordinary course of business) may exceed the aggregate a special resolution : of the Paid-up Capital of the Company and its Free Reserves, that is to say, Reserves not set apart for "RESOLVED THAT pursuant to Section 31 and other any specific purpose. applicable provisions, if any, of the Companies Act, 1956, the Articles of Association of the Company be RESOLVED FURTHERTHAT any Director or Company and are hereby altered by adding the following clauses. Secretary be and is hereby authorized to do and perform all such acts, deeds, matters or things as may After clause 19, insertion of clause 19A which shall be necessary, appropriate, expedient or desirable to read as under: give effect to this resolution."

"19A. No option or right to call of shares shall be 8. To consider and, if thought fit, to pass, with or given to any person except with the sanction of the without modification(s), the following resolution as company in general meeting." an ordinary resolution :

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

K SERA SERA PRODUCTIONS LIMITED

"RESOLVED THAT Mr. Dinesh Kumar Deora, who was NOTES appointed as an Additional Director of the Company nd by the Board of Directors in their meeting held on 2 1. A MEMBER ENTITLEDTO ATTEND AND VOTE ATTHE September, 2006 and who holds office up to the date MEETING IS ENTITLED TO APPOINT A PROXY TO of this Annual General Meeting and in respect of whom ATTEND AND VOTE INSTEAD OF HIMSELF AND THE a notice in writing under Section 257 of the Companies PROXY NEED NOT BE A MEMBER OFTHB COMPANY. Act, 1956 has been received from a member signifying THE PROXY, IN ORDER TO BE EFFECTIVE, MUST BE its intention to propose him as a candidate for the office DEPOSITED ATTHE REGISTERED OFFICE OF THE of Director of the Company, be and is hereby appointed COMPANY NOT LESSTHAN 48 HOURS BEFORETHE as a Director liable to retire by rotation." COMMENCEMENT OF THE MEETING.

9. To consider and, if thought fit, to pass, with or 2. The explanatory statement pursuant to Section 173(2) without modification(s), the following resolution as of the Companies Act, 1956 setting out the material facts an ordinary resolution : concerning the special business mentioned under item Nos. 6 to 10 of the Notice is annexed hereto. "RESOLVED THAT Mr. Rajesh Shah, who was appointed as an Additional Director of the Company 3. The Register of Members and the Shares Transfer Books nd by the Board of Directors in their meeting held on 2 of the Company will be closed from Tuesday, 26lh September, 2006 and who holds office up to the date September 2006 to Friday 29th September 2006 (both of this Annual General Meeting and in respect of whom days inclusive). a notice in writing under Section 257 of the Companies Act, 1956 has been received from a member signifying The members are requested to: its intention to propose him as a candidate for the office of Director of the Company, be and is hereby appointed (a) intimate to the Company's Registrars and Share as a Director liable to retire by rotation." Transfer Agents, M/s. Bigshare Services Private Limited (for shares held in physical form) and to their 10. To consider and, if thought fit, to pass, with or Depository Participants (DP) (for shares held in without modification(s), the following resolution as dematerialized form) the changes, if any, in their an ordinary resolution : registered address, Bank account number / details etc. at an early date, quote ledger folio numbers / "RESOLVED THAT Mr. Pramod Sawant, who was DP Identity and Client Identity Numbers in all their appointed as an Additional Director of the Company correspondences; by the Board of Directors in their meeting held on 2nd September, 2006 and who holds office up to the date (b) bring the copy of the Annual Report and the of this Annual General Meeting and in respect of whom Attendance Slip duly filled in for attending the Annual a notice in writing under Section 257 of the Companies General Meeting; Act, 1956 has been received from a member signifying its intention to propose him as a candidate for the office 4. Members desirous of obtaining any information of Director of the Company, be and is hereby appointed concerning the accounts and operations of the Company as a Director liable to retire by rotation." are requested to address their questions to the Company at the registered office address so as to reach at least seven days before the date of the Meeting, to enable the By Order of the Board of Directors information required to be made available at the Meeting, to the best extent possible.

5. Members / beneficial Owners are requested to quote their AMRUTA PARANJAPE full name as per Company's record, Folio No. / DP and (Company Secretary) Client ID Nos. as the case may be, in all correspondence with the company. Place: Mumbai Date : September 2, 2006 6. In case of Joint holders attending the meeting, only such joint holder who is higher in the order of names will be Registered Office : entitled to vote. Versova Shree Darshan CHS Limited, Ground Floor, Plot No. 15, R.D.P 2, 7. Corporate Members intending to send their authorized Sardar Vallabahbhai Patel Nagar, representatives are requested to send a duly certified Near Versova Telephone Exchange, copy of the Board resolution authorizing their Andheri (West), Mumbai-400 053. representatives to attend and vote at the Annual General Meeting.

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

K SERA SERA PRODUCTIONS LIMITED

EXPLANATORY STATEMENT PURSUANT TO SECTION None of the Directors are interested in this resolution except 173(2) OF THE COMPANIES ACT, 1956 IN RESPECT OF Mr. Dinesh Kumar Deora, since it relates to his appointment. ITEM NOS. 6 TO 10 OF THE NOTICE ITEM NO. 9 ITEM NO. 6 Mr. Rajesh Shah was appointed as an Additional Director of The Company proposes to list its securities at the National the Company on 2nd September 2006. Pursuant to Section Stock Exchange of Limited. The Company has initiated 260 of the Companies Act, 1956, he holds office upto the the documentation process in respect of the same. In order date of this Annual General Meeting. to meet requirements of the Listing Agreement (to be entered by the Company) with the National Stock Exchange of India Pursuant to Section 257 of The Companies Act 1956, notice Limited, the Articles of Association of the Company are in writing has been received from a Member of the Company required to be altered to include some more clauses. Pursuant along with the deposit of Rs. 500/- signifying its intention to to section 31 of the Companies Act, 1956, any alteration in propose the said Director as candidate for the Office of the Articles of Association of the Company requires approval Directors. of members of the Company in general meeting by passing a special resolution. Mr. Rajesh Shah is a practising Cost Accountant and has over 15 years experience in cost audit. His presence on The Board of Directors recommend the resolution for your the board would immensly benefit the Company. approval. Your Directors recommend the approval of this resolution. None of the Directors of the Company are concerned or interested in this resolution. None of the Directors are interested in this resolution except Mr. Rajesh Shah, since it relates to his appointment. ITEM NO. 7 ITEM NO. 10 As per section 293(1 )(d) of The Companies Act, 1956, Mr. Pramod Sawant was appointed as an Additional Director approval of members is required for borrowing over and above nd the limit of paid up capital and free reserves. At the Annual of the Company on 2 September 2006. Pursuant to Section General Meeting of the Company held on 7th July 2004, the 260 of the Companies Act, 1956, he holds office upto the members had authorised the Board of Directors to borrow date of this Annual General Meeting. upto Rs. 200 Crores (Rupees Two Hundred Crores only). Pursuant to Section 257 of The Companies Act 1956, notice in writing has been received from a Member of the Company The limit of Rs. 200 Crores is now proposed to be raised to along with the deposit of Rs. 500/- signifying its intention to Rs. 500 Crores taking into consideration expansion plans of propose the said Director as candidate for the Office of the company and corporate guarantees required to be given Directors. by the Company for its subsidiaries. Mr. Pramod Sawant is an Electrical Engineer. However, he The Board of Directors recommend the resolution for your also possess experience in the areas of film production approval. and editing. His presence on the board would immensly None of the Directors of the Company are concerned or benefit the Company. interested in this resolution. Your Directors recommend the approval of this resolution. ITEM NO. 8 None of the Directors are interested in this resolution except Mr. Dinesh Kumar Deora was appointed as an Additional Mr. Pramod Sawant, since it relates to his appointment. Director of the Company on 2nd September 2006. Pursuant to Section 260 of the Companies Act, 1956, he holds office upto the date of this Annual General Meeting. By Order of the Board of Directors

Pursuant to Section 257 of The Companies Act 1956, notice in writing has been received from a Member of the Company along with the deposit of Rs. 5007- signifying its intention to AMRUTA PARANJAPE propose the said Director as candidate for the Office of (Company Secretary) Directors. Place: Mumbai Mr. Dinesh Kumar Deora is a qualified Chartered Date : September 2, 2006 Accountant and a practicing Company Secretary and has a vast experience in the corporate laws, accounting and Registered Office : taxation field. His presence on the board would immensly Versova Shree Darshan CHS Limited, benefit the Company. Ground Floor, Plot No. 15, R.D.P 2, Sardar Vallabahbhai Patel Nagar, Your Directors recommend the approval of this resolution. Near Versova Telephone Exchange, Andheri (West), Mumbai-400 053.

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net K SERA SERA PRODUCTIONS LIMITED

INFORMATION PURSUANT TO CLAUSE 49 OF THE LISTING AGREEMENT:-

Brief details in respect of the Directors seeking re-appointment at the Annual General Meeting.

Names of Directors Mr. Ashok Pamani Mr. Raj Sital Motwani Date of Birth 23-5-1960 24-7-1961 Date of Appointment 1 6-9-2002 23-11-2002 Qualifications MBA in International Trade and Finance MBA from University of Michigan Expertise in functional area International Marketing International trade Other Directorships 1. Style Asia Inc 1. Style Asia Ltd 2. Generation Marketing Group Inc 2. SKM International Ltd 3. SGA Investments LLC 3. Link Holdings Ltd 4. K Sera Sera Productions Inc 4. Sitals Net Corp 5. KKK Investments (Pvt) Ltd, Mauritus 5. S. K. Holdings Ltd 6. Twenty Twenty Television Company Limited Other Committee Memberships NIL NIL Shareholding 6,47,550 shares 1,00,000 shares

Brief details in respect of the Directors seeking appointment at the Annual General Meeting:

Names of Directors Mr. Dinesh Kumar Deora Mr. Rajesh Shah Mr. Pramod Sawant Date of Birth 10-6-1969 29-1-1962 20-8-1974 Date of Appointment 2-9-2006 2-9-2006 2-9-2006 Qualifications CA&CS ICWA Dip. in Electronic Engg. Expertise in functional area Corporate Laws & Taxation Cost & Finance Film Production & Editing Other Directorships Virtual Advisor Pvt. Ltd. Parshaw Fintrade & God's Gift Entertainment Consultants Pvt. Ltd. Pvt. Ltd. Other Committee Memberships NIL NIL NIL Shareholding NIL NIL NIL

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net K SERA SERA PRODUCTIONS LIMITED K SERA SERA PRODUCTIONS LIMITED Regd. Office : Versova Shree Darshan CHS Limited, Ground Floor, Plot No. 15, R.D.R 2, Sardar Vallabhbhai Patel Nagar, Near Versova Telephone Exchange, Andheri (W), Mumbai - 400 053. Tel. : 6696 3035 / 36 • Fax : 6696 3037 • Email : [email protected] • Website : www.kserasera.com

DIRECTORS' REPORT Dear Members, various agreements with renewed Film Makers and Directors. During the Financial year 2005-06, Motion Your Directors have pleasure in presenting the Eleventh Picture Distribution Division of our Company distributed Annual Report together with the Audited Accounts for the number of movies in various circuits across the country. year ended 31SI March, 2006. Apart from distributing in house movies, our distribution division distributed various movies produced under other FINANCIAL HIGHLIGHTS : banners including leading films like Malamaal Weekly, No 2005-06 2004-05 Entry, Salaam Namaste, Kaal, Hanuman, Mangal Pandey- (Rupees) (Rupees) The Rising and Apaharan. During the year under review, Television division of our Company produced one serial Total Income 538,490,970 375,147,305 named "Kasshish" which was aired on Zee Television Channel. Profit Before Interest, 145,906,068 83,751,412 Depreciation and Tax DIVIDEND With a view to conserve your Company's resources, the Less: Interest & 5,313,447 31,37,514 Directors do not recommend any Dividend on equity Shares other finance costs of the Company. However dividend on the 38,40,524, 5% Cumulative Redeemable Non Convertible Preference Depreciation and 3,822,995 28,343,220 shares of Rs. 107- each shall be paid. Amortisation FUTURE OUTLOOK Profit / (Loss) Before Tax 136,769,626 52,270,678 Growing Economy, Advancements in technology, Multiplex, Less: Provision for Taxes 49,299,506 18,231,198 Corporatisation, Digital Cinemas, Rise in consumer spending, (Current & Deferred) Changing lifestyle have brought boom in Entertainment Industry. Such boom is expected to continue in future, thereby Profit / (Loss) After Tax 87,470,120 34,039,480 bringing huge scope and potential for Film Production, Less: Previous Period - 1,965,690 Distribution activities. For Television industry, DTH, IPTV are Adjustments likely to push up subscription revenues and will contribute to the growth of television industry. Less: Appropriations - The Company is working on multiple genre model of Proposed final dividend entertainment and has switched its focus from Small and Medium Budget films to Medium and Big Budget films. The - Equity Shares - - Company has signed agreements with leading Production - Preference shares 1 ,920,262 810,193 Houses, Directors and other film makers. The Company has number of film projects in hand which are at different Tax on Dividend 269,317 113,630 stages of production and will be scheduled for release in Add/ (Less) : Balance 52,727,213 21,577,246 coming years. Further, Company is planning to expand its Brought forward from operations in overseas market. the previous year Following projects are under production: Balance Carried Forward 138,007,754 52,727,213 S.No. Name of Film Director Star Cast TURNOVER AND PROFITS 1. Partner David Dhavan Salman Khan, During the year under review, the total turnover was Sohail Khan Rs. 538,490,9707- and the profit after providing depreciation & Others and amortization but before tax was Rs. 136,769,6267-. 2. Nanhe Jaisalmer Samir Karnik Bobby Deol OVERALL PERFORMANCE and Others The Company mainly has three divisions viz Motion Picture 3. ISeeU Vivek Agarwal Arjun Rampal Production, Motion Picture Distribution and Television, broadband and wireless. During the financial year and others 2005-06, Motion Picture Production Division of our 4. Kisse Pyar Karoo Balakumar Arshad Warsi, Company released 3 movies viz. "Sarkar", "My wife's Ashish Chudhary, Murder" and "James". Among these Sarkar was a Hit movie Udita Goswami and the other two movies received mixed response from and others the audience. A movie titled "Darna Zaroori Hai" was sold during the financial year 2005-06. Further, in order to 5. Untitled "Remake Sangeet Sivan produce multiple genre movies, the company signed of Athadu" and others

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

K SERA SERA PRODUCTIONS LIMITED

The Company has aquired theatrical rights/ distribution Pamani and Mr. Raj Sital Motwani retire by rotation, and rights of several films which are scheduled for release in being eligible offers themselves for re-appointment. the financial year 2006-07 and will continue to strengthen Appropriate resolutions for re-appointment of aforesaid its position in distribution business. The Company is also directors are being moved at the ensuing Annual General planning to expand its activities in television segment. Meeting. Brief resume of retiring directors are given in the notice of Annual General Meeting. FINANCE In accordance with section 260 of The Companies Act, 1956 (i) During the year under report, the company allotted and Articles of Association of the Company, Mr. Dinesh 50,00,366 Equity Shares of Rs. 10/- each at a premium Kumar Deora, Mr. Rajesh Shah and Mr. Pramod Sawant of Rs. 58/- per share on 4th March 2006 through Follow were appointed as additional directors with effect from on public issue made vide prospectus dated 27.2.2006 2nd September 2006. They hold office upto the date of through book building route. These shares were listed at the Bombay Stock Exchange Limited on 8th March ensuing Annual General Meeting. A notice has been 2006 and rank par; passu with the existing shares. received from a member signifying its intention to propose their appointments as Directors of the Company and (ii) During the year 2005-06, Company has availed trade appropriate resolutions for their appointment are being finance facility aggregating Rs. 15 Crores from Global moved at the ensuing Annual General meeting. Trade Finance Private Limited and Credit facilities from Standard Chartered Bank aggregating Rs. 2 Crores. Mr. A.Parthasarthy Naidu, Dr. Mithilesh Kumar Sinha and Mr. Prakashkumar Shah were regularized as Directors at INCREASE IN AUTHORISED SHARE CAPITAL the last Annual General Meeting held on 29th September 2005. Further, Mr. Vijay Chandra, Nominee Director of The Authorised share capital of the company was increased Sahara India Mass Communications Limited expired on from Rs. 30 Crores to Rs. 50 Crores by creation of 5th October 2005. The Board places on record its deep 2,00,00,000 preference shares of Rs. 10 each in the last appreciation for valuable guidance and contribution to the Annual General Meeting held on 29th September 2005. board made by him during his tenure. SUBSIDIARIES DIRECTORS' RESPONSIBILITY STATEMENT The Company has a wholly owned subsidiary namely Twenty Twenty Television Company Limited (Twenty Twenty) Pursuant to the requirement under Section 217(2AA) of to concentrate on the business of television content the Companies Act, 1956 with respect to Directors' production. In January 2006 your Company incorporated Responsibilities Statement, the Directors of the company a wholly owned subsidiary under the name K Sera Sera hereby state and confirm that: Productions FZ-LLC (KSS-Dubai) in the Dubai Media City, U.A.E. to strengthen its position overseas in film production, (1) in the preparation of the annual accounts, the pre production, distribution activities. The details about applicable accounting standards have been followed; Twenty Twenty and KSS-Dubai are outlined in their (2) they have selected such accounting policies and individual Directors Report and Financial statements applied them consistently and made judgments and appended to this Report. estimates that are reasonable and prudent so as to CONSOLIDATED FINANCIALS give a true and fair view of the state of affairs of the company as at 31st March, 2006 and of the profits of In pursuance of clause 32 of the listing agreement, the the company for the year ended on that date; Audited Consolidated Financial Statements for the year (3) they have taken proper and sufficient care for the ended 31st March 2006 and Cash Flow Statement for the st maintenance of adequate accounting records in year ended 31 March 2006 are annexed to this report. accordance with the provisions of this Act for Further, the reports and standalone audited financial safeguarding the assets of the company and for statements of subsidiary companies viz. Twenty Twenty preventing and detecting fraud and other irregularities; Television Company Limited and K Sera Sera Productions FZ-LLC along with statement pursuant to Section 212 (1) (4) they have prepared the annual accounts on a going (e) also forms part of this Annual Report. concern basis.

CORPORATE GOVERNANCE PUBLIC DEPOSITS

Pursuant to Clause 49 of the listing agreement with the The Company has not accepted any deposits from public Stock Exchange, the Corporate Governance Report along in accordance with Section 58A of the Companies Act, with Auditors Certificate on its compliance, Management 1956. Discussion and Analysis Report forms a part of this Annual PARTICULARS OF EMPLOYEES Report. Information of the employees of the category specified in DIRECTORS Section 217 (2A) of the Companies Act, 1956 read with In accordance with the provisions of the Companies Act, the Companies (Particulars of Employees) Rules, 1975 is 1956 and Articles of Association of the Company, Mr. Ashok contained in Annexure-A appended to this report.

www.reportjunction.com SANSCO SERVICES - Annual Reports Library Services - www.sansco.net

K SERA SERA PRODUCTIONS LIMITED

CONSERVATION OF ENERGY AND TECHNOLOGY depreciation/amortization for Financial Year 2005-06 is less ABSORPTION as compared to last financial year.

Considering nature of activities carried on by the company EVENTS POST BALANCE SHEET DATE and the list of industries included in the Companies (Disclosure of Particulars in the report of the Board of The details of utilsation of funds raised in follow on public Directors) Rules, 1988, the provisions relating to issue as on the date of this report is as under: conservation of energy and technology absorption do not (Amount in Millions) apply to the company. Hence, information pertaining to the same is not provided. Purpose Projected Actual utilization utilization FOREIGN EXCHANGE EARNINGS AND OUTGO upto31st upto 2nd (Amount in Rupees) December September 2007 2006 Foreign Exchange Earnings : 43,156,762 (Assignment of overseas rights) Acquisition of office 45.00 45.00 premises & interior set up Foreign Exchange Outgo : 459,600 (Business Travel) Funding Distribution 30.00 15.00 activities AUDITORS Funding movie production 250.00 257.00 M/s. RSM & Co., Chartered Accountants, statutory auditors Issue Expenses 46.00 22.94 of the company will retire at the conclusion of the ensuing TOTAL 371.00 339.93 Annual General Meeting and are eligible for reappointment. It is proposed to re-appoint M/s. RSM & Co. Chartered The projections made in the prospectus was for Rs. 371 Accountants, as the statutory auditors of the Company. The million. Against Rs. 371 million, funding through public issue Company has received letters from them to the effect that was Rs. 340 million and Rs. 31 million was through internal their appointment, if made, would be within the prescribed accruals. limits under Section 224(1 B) of the Companies Act, 1956. AUDITORS REPORT AMORTISATION OF INTELLECTUAL PROPERTY RIGHTS The Auditors have made qualification in their report, stated in Para 3 (a) with reference to the Note No. 5 to Schedule The amortisation of Intellectual Property Rights (IPR's) is R forming part of the attached accounts, in respect suit done on following basis: filed by the Company and proceeding initiated under Section 138 of the Negotiable Instruments Act, againstThe If a movie is released in the last quarter of the financial Film Stage and Cultural Development year, IPRs are written off at 70% in the year of release, Corporation for recovery of its claim of Rs.1,08,76,000/-. 20% in the immediately succeeding year of release and We state that, no provision has been considered necessary 10% in the 3rd year succeeding the year of release. on this account, as the management is hopeful of recovering the same. If a movie is released in the first three quarters of financial year, IPRs are written off at 90% in the year of release and Further, the Annexure to the Auditors Report contains a 10% in the 3rd year succeeding the year of release. qualification to the effect that :

During the first three quarters of Financial Year 2004-05, 1) the coverage and the scope of internal audit system we released 3 movies namely , Vaastu Shastra and needs to be further strengthened so as to be and hence 90% of IPR were written off in the year commensurate with the size of the company and 2004-05 & 10% will be written off in the year 2007-08. A nature of its business. movie 'My Wifes Murder' was sold during the year 2004-05 2) Company's internal control procedures for the and 90% of IPR were written off in the year 2004-05 & purchase of inventory and fixed assets and for the sale 10% will be written off in the year 2007-08. of goods and services needs to be strengthened so as to be commensurate with the size of the Company During the first three quarters of Financial Year 2003-04, and nature of its business. we released one movie , hence 90% of IPR were written off in the year 2003-04 & 10% will be We state that : written off in the year 2006-07. During the last quarter, we M/s. Tiwari Singh Hedge & Associates were the internal released 2 movies Ek Hasina Thi & AbTak Chappan. Hence auditors of the Company for Financial Year 2005-06. The 70% of IPR 's were written off in the year 2003-04, 20% monthly internal audit reports submitted by them are was written off in the year 2004-05 and 10% will be written periodically reviewed by the Audit Committee and steps off in the financial year 2006-07. are being taken to strengthen internal control procedures Thus, for the movies released in the Financial years and internal audit system. The Company has re-appointed 2003-04 & 2004-05, there is no amortization of IPR's in M/s. Tiwari Singh Hegde and Associates as internal the Financial Year 2005-06. Hence the figure of auditors for the Financial Year 2006-07.

www.reportjunction.com