ANNUAL REPORT PEN INDIA LIMITED 2016-2017 TABLE OF CONTENTS CORPORATE FINANCIAL OVERVIEW STATEMENTS 1 Corporate Information 47 Standalone Financial 2 About Pen India Limited Statements 3 Our Journey - Independent Auditors’ Report 4 Business Overview - Balance Sheet 12 Awards and Accolades - Statement of Profit and Loss 14 Key Strengths - Statement of Cash Flows 15 Future Strategy - Notes 16 Board of Directors 18 CMD’S Message 78 Consolidated 20 Financial Highlights Financial Statements - Independent Auditors’ Report - Consolidated Balance Sheet STATUTORY REPORTS - Statement of Consolidated Profit 23 Management Discussion and Loss and Analysis - Statement of Cash Flows 30 Board’s Report - Notes - Form AOC-1 CORPORATE INFORMATION STATUTORY AUDITORS M/s. A. Bafna & Co., Chartered Accountants BANKERS HDFC Bank Limited YES Bank Limited Bank of Maharashtra State Bank of India REGISTRAR & SHARE TRANSFER AGENTS Big Share Services Private Limited E- 2, AnsaInd Estate, Saki Vihar Road, Andheri(E), Sakinaka Mumbai, Maharashtra-400072 BOARD OF DIRECTORS REGISTERED OFFICE (Television Division) Mr. Jayantilal Gada PEN INDIA LIMITED, PEN House, Asha Colony Chairman & Managing Director Juhu Tara Road Juhu, Mumbai-400049 Mr. Dhaval Gada Investor Contact: [email protected] Non Executive Director Mr. Akshay Gada CORPORATE OFFICE Non Executive Director (PEN Studios) 1101, B wing, Fortune Terraces Mr. Satish Kaushik Opp. Citi Mall & PVR ECX & Tanishq, New Link Road Non – Executive Professional Director Andheri (W), Mumbai-400053 Mr. Javed Akhtar Independent Director DIGITAL OFFICE (Bollywood Times and Play My Movie) Mr. Tilak Raj Bajalia S-6 & S-9, Pinnacle Business Park, Shanti Nagar Independent Director Mahakali Caves Road Andheri (E), Mumbai-400093 GROUP PRESIDENT – C&MA and GROUP COMPANY SECRETARY CORPORATE IDENTITY NUMBER Mr. Rajendra Kumar Haran U72200MH2000PLC128481 Annual Report 2016-17 1 ABOUT PEN INDIA LIMITED Mr Jayantilal Gada began his entrepreneurial journey in 1984, in the media and entertainment industry with a video library called Popular Video Cassette Company. He subsequently ventured into trading video rights and distributing video cassettes across OUR VISION India, soon becoming the largest video library not just in India but also in Asia. “To consistently provide delightful and innovative entertainment experiences In 1992, the business was restructured under the name ‘Popular by engaging audiences and nurturing Entertainment Network’ and began to acquire video rights for talent with current formats and movies to be distributed over various mediums such as video cassettes, satellites, terrestrial platforms etc. The Company technology” subsequently forayed into theatrical and distribution rights of movies. PEN India Limited was incorporated in the year 2000. OUR BUSINESS Over the years, the company has successfully adapted to The company is an established the changing trends in content consumption, by expanding integrated media content house in India into content aggregation and distribution for broadcasting engaged in the following activities: on television platforms. It has been one of the most effective content aggregators for the broadcasting channel Zee. Between • Movie production, acquisition & sale 2004 and 2016, the company aggregated more than 2,500 of movie rights, theatrical & satellite movies for a cumulative value of more than INR 3,000 cr. The distribution, as well as marketing of company also has access to a diverse content library, which has been growing continuously with the addition of new releases movies as well as through catalogue acquisitions. This enables the • Intangibles & copyrights company to distribute to platforms catering to a wide range of • Royalty & advertising audiences. Over the years, PEN has become one of the largest • Consultancy in purchase of film rights independent content and rights aggregators of Bollywood movies in India. The company further ventured into producing and co-producing Hindi and regional movies, which received much acclaim from the Bollywood fraternity and critics, and also yielded strong box office returns. The company focuses on partnering with the best creative producers and directors in the industry and promptly Between 2004 and 2016 monetizing all movie rights primarily in the pre-release stage, thereby de-risking itself from the uncertainties of the movie production industry. 2,500+ Gearing up for the next major growth spurt in the media and entertainment industry - which will primarily be fuelled by the Movies Aggregated growth of digital media platforms through mediums such as smartphones and tablets - PEN is setting up its own digital media platforms and will offer unique services at reasonable For prices for Indian consumers. >3,000 Cr. Cumulative value (INR) 2 Pen India Limited OUR JOURNEY COMPLETED Ventured into Digital Platforms, 1986 Induction of Mr Satish Kaushik as Professional Director and 2016 - Till Date 2016 Mr Javed Akhtar and Mr Tilak Raj Bagalia as Independent YEARS Directors. Launched TV production business and produced / producing Uddan, Dil Ki 2011-2015 Batein Dil Hi Jaane, Rishton Ka Saudagar - Baazigar, Naamkaran and produced its first movie “Kahaani” Started an animation divisionand produced animation films like Krishna, Raavan, Ganesh, Ghatotkach, 2006-2010 Mahabharat etc. Became Exclusive agency to ZEE for 2001-2005 acquisitions of Hindi feature films for ZEE cinema Launched VCD and DVD and formed PEN 1996-2000 India Limited Restructured Popular Entertainment Network Limited (PEN) and started dealing in copyrights of Hindi feature films vizvideo, satellite and 1991-1995 doordarshan Launched Audio CDs Trading of video rights & distribution of VHS tapes across India. 1986-1990 Mr Jayantilal Gada started with a video library called “Popular Video Cassette Co” in 1983 Annual Report 2016-17 3 BUSINESS OVERVIEW FEW MAJOR MOVIES PRODUCED/CO-PRODUCED BY THE COMPANY MOVIE PRODUCTION, CO-PRODUCTION AND DISTRIBUTION PEN is primarily engaged in the production, co-production and distribution of Hindi movies. The company’s strategy is to monetise its movies early in the pre-release stage and de-risk itself from the uncertainties of the box office. The company has also ventured into producing and co-producing various regional films. It continues to expand its portfolio of companies under its banner PEN across Hindi and regional movies in Tamil, Telugu, Kannada and Gujarati languages. Pen Group has also expanded its production business to television serials and has successfully produced serials such as Udaan (Colors), Dil Ki BaateinDil Hi Jaane (Sony) and Rishton Ka Saudagar Baazigar (Life Ok) and Naamkaran (Star Plus). 4 Pen India Limited Serial started on 16th August, 2014 on Viacom 18, Colors at 8.30 pm Monday to Friday. Successfully completed 818 Episodes upto 30th June, 2017 and still continuing. Serial started on 12th September, 2016 on Star Plus at 9.00 pm Monday to Friday. Successfully completed 232 Episodes upto 30th June, 2017 and still continuing. Produced by Dhaval Jayantilal Gada & Guroudev Bhalla 2004 Tarzan The Wonder Car Aitraaz Aiyaary - Sidharth Malhotra and Neeraj Pandey (Wednesday, Phir Hera Pheri Special 26, Baby, M.S. Dhoni - Fame, Neeraj Pandey) 2006 Vivah Yamla Pagla Deewana 3 - Sunny Deol, Bobby Deol, Dharmendra 2007 Dhamaal - Super Hit series, last 2 parts and now directed by Navnit Singh Welcome Total Dhamaal 3 - Ajay Devgn, Anil Kapoor - Super Hit series - Tare Zammen Par Last 2 parts and now same director 2008 Rang Rasiya Kahaani 3 - Super Hit jodi again for Part 3, Directed by Sujoy 2011 Tanu Weds Manu Ghosh only Don 2 Commando 3 - Vidyut, Vipul Shah, Reliance, PEN - Again for part 3 2012 Kahaani UPCOMING MOVIES S3 - PEN made Tamil Super Hit with SURYA. And now in Hindi, 2013 Race 2 this Brand gets more powerful with SUNNY DEOL; Directed by Chennai Express K. Ravi Chandran Singh Saab The Great Gumnaam - The Game of Unknown - PEN trying for this brand Mahabharat to also make it big for PEN, like KAHAANI. A Thriller, Directed 2014 Main tera Tera Hero HINDI by E. Niwas Sholay 3D Entertainment UPCOMING MOVIES Singh is Bling REGIONAL 2015 Gujjubhai 2 - Gujarati - Siddharth Randeria, Again a super hit brand 2016 Shivaay Chitkaar - Gujarati - Super Brand Drama. Filming with Latesh Shah and Kahaani 2 Sujata Mehta Baaghi Sandakozhi 2 – Tamil - Super Brand name again. Vishal and Lingusamy 2017 Commando 2 Machine Kumki 2 - Tamil - Super Brand again. ELEPHANT MOVIE, Directed by SOME MOVIES RELEASED AND ACQUIRED PEN BY Singham 3 - Tamil Prabhu Solomon MOVIE AGGREGATION Since its inception, PEN has diversified its business from solely being a video cassette library to trading video rights and distributing video cassettes, and subsequently to acquiring and distributing copyrights of Hindi feature films for video, satellite, terrestrial and other mediums The company continues to own rights to more than 500 films, more than 10,000 songs, 1,000 plus Digital films’ rights and more than 10,000 films’ data for digital. Following our investment strategy in movie content acquisitions, we have closed various deals in the current financial year, the major ones being: • Exclusive perpetual dubbing rights for satellite movies of 150 South Indian language movies which will convert into 1500 films • Remaking rights for titles such as Kahani, Chatrapati Leader, Nayak Returns, Paiya, Aakhiree Rasta, Andha Khanoon, Chalbaaz and many others • Remaking rights for Mahabharat film and 139 episodes of Mahabharat Katha television series for the next ten