Directors’ Report Dear Shareholders
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Directors’ Report Dear Shareholders, Your directors are pleased to present the twelfth Annual Report and financial statements for the year ended March 31, 2007. Financial Overview (Rs. Lacs) 2006-07 2005-06 Income 17,196 10,602 Expenditure 13,933 8,709 Earnings before depreciation interest and tax (EBIDTA) 3,263 1,893 Depreciation 1,241 707 Interest 550 323 Profit before Tax 1,472 863 Provision for Taxation including Deferred Tax 419 315 Profit after Tax 1,053 548 Balance brought forward from previous year 1,339 885 Transfer from Debenture Redemption Reserve - 226 Profit available for appropriation 2,392 1,659 Appropriations Interim Dividend on Preference Shares 100 52 on Equity Shares 229 329 229 281 Corporate Dividend tax46 39 Surplus carried to Balance Sheet 2,017 1,339 Financial Review Total Income of the Company grew by 62% from Rs.10,602 lacs in previous year to Rs.17,196 lacs for the year under review. Earnings before interest depreciation and tax (EBIDTA) increased from Rs.1,893 lacs in previous year to Rs.3,266 lacs for the year under review, marking a growth of 73%. Profit after Tax (PAT) increased by 93% from Rs.548 lacs in previous year to Rs.1,053 for the year under review. Dividend During the year under review your Directors declared and paid: - 5% interim dividend on 20,000,000 Redeemable Preference Shares and - 10% interim dividend on 22,915,370 Equity Shares of the Company held by the respective shareholders of the Company as on 21st, March 2007, for the financial year 2006-07 . 14 Dear Shareholders, Your Directors have recommended that these be treated as movies followed by variety of food offerings. the only dividends for the year. The growth in the Income was achieved through a Your directors are pleased to present the twelfth Annual Report and financial statements for the year ended healthy mix of growth in Income of existing cinemas and March 31, 2007. Operations Review by opening of new cinemas. During the year under review your Company had The total number of Financial Overview launched a new brand of cinema called ‘PVR Talkies’ to patrons who (Rs. Lacs) cater the demand of the cinema viewing public in class B & watched movies at 2006-07 2005-06 C cities at a lower price range of Rs. 40 to Rs. 60 for an our cinemas during enhanced movie viewing experience. The first of PVR the year was Income 17,196 10,602 Talkies multiplexes were opened at Aurangabad and Latur in 14.73 million, as Expenditure 13,933 8,709 the state of Maharashtra. compared to 8.78 million in Earnings before depreciation interest and tax (EBIDTA) 3,263 1,893 the previous year. The average occupancy In current financial year, the Company has entered into in our cinemas during the year was 43% as compared to Depreciation 1,241 707 the business of Food Court by launching its first outlet at 46% in the previous year. The Occupancies of the cinemas Sahara Mall, Gurgaon, Haryana by the name of ‘PVR Food Interest 550 323 which operated for full year both in 2005-06 & 2006-07 Union’. This has increased the bouquet offering available to increased from 46% to 49% however, new properties Profit before Tax 1,472 863 the movie viewing Patrons who now have a better mix of Provision for Taxation including Deferred Tax 419 315 Profit after Tax 1,053 548 which operated for a part of the year 2006-07 had lower occupancy levels as the same were in the process of stabilizing. Balance brought forward from previous year 1,339 885 Transfer from Debenture Redemption Reserve - 226 New Cinemas which commenced operations Profit available for appropriation 2,392 1,659 During the year under review the Company commenced commercial operations from seven new multiplex projects and one project became operational during the current financial year thereby adding 31 new screens under its operation. Appropriations Details of these new cinema properties added by the Company are as under : Interim Dividend on Preference Shares 100 52 Cinema Screens Seats Commencement date on Equity Shares 229 329 229 281 PVR Juhu , Mumbai 5 1279 April 2006 PVR Indore 5 1199 April 2006 Corporate Dividend tax46 39 PVR Lucknow 4 874 April 2006 Surplus carried to Balance Sheet 2,017 1,339 PVR Mulund, Mumbai 6 1815 June 2006 PVR Sahara Mall, Gurgaon 2 528 July, 2006 PVR Talkies, Aurangabad 3 1151 September 2006 PVR Talkies , Latur 3 1148 September 2006 Financial Review PVR Vadodra 3 1096 May , 2007 Total Income of the Company grew by 62% from Rs.10,602 lacs in previous year to Rs.17,196 lacs for the year under review. Earnings before interest depreciation and tax (EBIDTA) increased from Rs.1,893 lacs in previous year Except the multiplexes at Gurgaon and Vadodra all the above projects have been granted exemption from the payment to Rs.3,266 lacs for the year under review, marking a growth of 73%. of entertainment tax as per Entertainment Tax Exemption Policy of the respective State. Profit after Tax (PAT) increased by 93% from Rs.548 lacs in previous year to Rs.1,053 for the year under review. Your Company now operates and manages 82 screens across the country spread over Delhi, Haryana, Karnataka, Uttar Pradesh, Andhra Pradesh, Maharashtra, Gujarat and Madhya Pradesh. Dividend Employee Stock Option Scheme (ESOS) During the year under review your Directors declared and paid: During the Year, your Company has allotted 136,500 Equity Shares to the eligible employees of the company on - 5% interim dividend on 20,000,000 Redeemable Preference Shares and exercising the rights of stock options granted to them earlier in the preceding year. - 10% interim dividend on 22,915,370 Equity Shares of the Company The details of the shares issued under ESOS during the year under review is as follows: held by the respective shareholders of the Company as on 21st, March 2007, for the financial year 2006-07 . 38000 Equity shares allotted on January 31, 2007. 98500 Equity shares allotted on March 31, 2007. 14 15 The other details of ESOS as required under the SEBI M/s Sunrise Infotainment Private Limited is (Employee Stock Option Scheme and Employee Stock implementing the six screens Multiplex Project at Oberoi Purchase Scheme) Guidelines, 1999 are annexed as Mall, Goregaon Mumbai. The Multiplex is a part of much Annexure I hereto and forms part of this report. awaited mall development at the prime location of suburb Increase in Equity Share Mumbai. Capital The Company has obtained an exemption from the Ministry of Corporate Affairs Government of India vide its Consequent upon the allotment of shares to the eligible letter no. 47/277/2007-CL-3 dated 7th June, 2007 in employees under the Employee Stock Option Scheme the terms of Section 212(8) of the Companies Act, 1956 paid-up equity share capital of the Company has increased from attaching the audited accounts of its subsidiaries for from Rs. 22,87,73,700/- to Rs. 23,01,38,700/- divided the financial year. In pursuance thereof, the Company into 23013870 equity shares of Rs. 10 each. undertakes that annual accounts of the subsidiary companies and the related detailed information for the year Subsidiaries ended March 31, 2007 will be made available to its investors and subsidiary companies’ investors seeking such As on March 31, 2007 the Company has two information at any point of time. The annual accounts of the subsidiary companies namely M/s PVR Pictures Limited subsidiary companies are also kept for inspection by any (PVR Pictures) and M/s C R Retail Malls (India) Private investor at the registered office of the Company and Limited (CRR) in which it holds 100% shareholding. In concerned subsidiary companies. The statement required current financial year Company has also acquired the entire pursuant to the above referred approval letters is disclosed share holding of M/s Sunrise Infotainment Private Limited after the Consolidated Accounts of the Company forming (SUNRISE) thereby making it wholly owned subsidiary of part of this Annual Report. the Company. Corporate Governance PVR Pictures Limited is engaged in the business of film distribution and has therefore successfully distributed It has always been your Company’s endeavor to excel various Hollywood and Hindi movies. PVR Pictures has got through good Corporate Governance practices. Corporate its offices in Delhi, Mumbai, Bangalore, Indore and governance is all about the effective management of Hyderabad and distributes movies in all territories in India relationships among constituents of the system – on its own or with the help of its associates. shareholders, management, employees, customers, PVR Pictures is now looking at making a bigger foothold vendors, regulatory and the community at large. Your in the Hindi film distribution business and is exploring Company strongly believes that this relationship can be options for alliances, tie ups with producers to exploit film strengthened through corporate fairness, transparency and rights. PVR Pictures has during the year tied up with M/s accountability. Your Company complies with all the Aamir Khan Productions Private Limited to co-produce provisions of revised clause 49 of the Listing Agreement. two movies which are at present in an advance stage of The Corporate Governance Report in terms of Clause production. PVR Pictures shall additionally be distributing 49 of the Listing Agreement is attached and forms part of these movies on pan India basis. this Annual Report. Your Company has also been deploying certain portion The certificate from the Practicing Company Secretary of the IPO funds in the film distribution and film production on the compliance of Corporate Governance Code business as well in line with the shareholders approval.