BOARD OF DIRECTORSmuktaarts.com/Aboutus/investorsrelation/mal-annualreport2009.pdf · Mr. Anil...
Transcript of BOARD OF DIRECTORSmuktaarts.com/Aboutus/investorsrelation/mal-annualreport2009.pdf · Mr. Anil...
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BOARD OF DIRECTORSMr. Subhash Ghai, Chairman & Managing Director Mr. Parvez A. Farooqui, Executive Director Mr. Rahul Puri, Executive Director Mr. Anil Harish Mr. Vijay Choraria Mr. Pradeep Guha
Company Secretary & Compliance Officer Mr. Ravi B Poplai
Auditors M/s Shamit Majmudar Associates
Internal Auditors M/s BDO Haribhakti Consulting Pvt. Ltd.
Bankers Punjab National Bank Limited HDFC Bank Limited IDBI Bank Limited Kotak Mahindra Bank Limited
Registrar & Transfer Agents Link Intime India Private Limited C-�3, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (W) Mumbai – 400 078
Registered Office 6, Bashiron, 28th Road TPS – III, Bandra (W) Mumbai – 400 050
COnTEnTSFinancial Highlights 2
Chairman’s Statement 3
Management Discussion & Analysis 5
Notice 7
Directors’ Report 9
Corporate Governance �3
FInAnCIALS
Mukta Arts Limited 2�
Consolidated Financial of Mukta Arts Limited & it’s Subsidiaries 39
Whistling Woods International Limited 52
Connect.� Limited 73
Mukta Tele Media Limited 82
Coruscant Tec Private Limited 92
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PERFORMAnCEPerformance at a glance
Rupees in millions
Year ended 3�st March
2009
Year ended 3�st March
2008
Year ended 3�st March
2007
Year ended 3�st March
2006
Year ended 3�st March
2005
Realisation from productions, �,65�.04 �,094.66 965.2� 374.80 45�.44
distribution & exhibition
Equipment Hire Income 7.30 �2.07 2.22 25.09 28.60
Other Income �9.�6 24.93 49.�2 36.�2 3�.59
TOTAL InCOME 1,677.50 1,131.66 1,016.55 436.01 511.63
Profit/(Loss) before Interest,
Depreciation and Tax 89.27 �66.4� �67.04 (27.�5) (�34.86)
Depreciation �8.89 �7.64 22.64 29.98 32.�4
Interest 9.60 0.43 0.63 0.60 0.56
Profit/(Loss) before Tax 60.78 �48.34 �43.77 (57.73) (�67.56)
Profit/(Loss) after Tax 4�.0� �30.30 �37.�6 (56.46) (�69.67)
Dividend 22.58 45.�6 45.�6 - -
Dividend Rate 20% 40% 40% - -
Gross Fixed Assets 407.89 364.48 3�3.3� 369.84 36�.98
Net Fixed Assets 2��.62 �87.�0 �57.09 �84.06 204.73
Total Assets 1,547.59 1,402.21 1,279.66 1,195.53 1,144.66
Equity Share Capital ��2.92 ��2.92 ��2.92 ��2.92 ��2.92
Reserves and Surplus �,�52.97 �,�38.38 �,060.92 975.25 �,029.60
net Worth 1,265.89 1,251.30 1,173.83 1,088.17 1,142.52
Earnings per Share (EPS)
In Rupees
EPS Basic �.82 5.77 6.07 - -
EPS Adjusted to Rs. 5 �.82 5.77 6.07 - -
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ChAIRMAn STATEMEnT 2009
It has been a tough year for business in almost all sectors and all segments of industry. Although some believe that the entertainment industry is recession proof, this is not fully true. The financial cycle of film production has been affected and has led to a slow down at the trade level, although consumer confidence in good films continues unabated. The spiraling costs of ‘A’ listed stars and related production costs have resulted in margins being completely eroded with greatly increased risks of film making.
The industry has realized its mistake, undergone a reality check and a correction. Mukta Arts Ltd, inspite of strong fundamentals and consistent performance, has also been affected by these economic conditions. In addition, the strike lasting from April – June 2009 has affected the business, margins & profitability of our films.
In last three years financial years of 2006-07, 2007-08 & 2008-09, Mukta Arts has been able to generate good profits and to pay dividend in the range of 20% to 40%. At present, we have three movies ready for release and three new projects in the pipeline to be launched later this year including movies to be directed by Abbas-Mastan, Subhash Ghai and a newcomer, Vishnu Shyamaprasad. Mukta Arts is proud to have active film distribution offices across India.
Although the Exhibition business added substantially to the top line of the Company, it affected the profitability of the Company due to a wafer thin profit margin. Hence, the Company took a prudent business decision to reduce the exhibition services to multiplexes where our investments were in excess of our profits last year, We continue to run this business, albeit at 40% of the volume as it was last year. We are however, working towards consolidating our Distribution business to make it stronger.
The positive side of an otherwise difficult year is that we showed our best performance in terms of the top line crossing Rs.165 crores. This is a growth of about 50% of over the previous year top line. During the year, we released two films “Sanai Choughade” and “Yuvvraaj”. Although two other films were almost complete and could have been released in the last quarter of the year, we chose not to do so owing to the IPL timing and impasse between the producers and multiplex operators over the revenue share dispute.
We still have three films in the pipeline (apart from “Paying Guests” released in June 2009) but I have decided to go slow on the production given the current external trade environment. As Warren Buffet said ‘’Sometimes it’s best not to do anything and just go out and play golf”. I do not play golf, so I am going to do what I love most, write scripts. So I am going to do just that and maybe it will pay off very well in years to come.
As a cost cutting exercise, the Mukta Arts offices will be shifted to the Communication Centre which is located opposite to WWI once the same is complete, Mukta will be housed in the top floor of this beautiful building. The Communication Centre is expected to be complete by September and we may brand it as MUKTA/SG HOUSE. This exercise will consolidate all the Mukta Arts activities under one roof. This would also release the office space in Bandra for sale, redevelopment or lease.
During the year, the Audeus complex was completed. However given the difficult Real Estate phase, the offers coming our way are below our expectation. We would rather wait and go with the right party at the right time for the right price, rather than rush into a distress deal.
The Company exited completely from its subsidiary, Red Carpet Films Limited as the Company did not have the administrative control on the same and the management decided rather to concentrate more on its own business. Accordingly shares were sold off to the promoters of Red Carpet films at par.
The film “Paying Guests” directed by Paritossh Painter starring Shreyas Talpade, Chunky Pandey, Ashish Chaudhary, Javed Jafferey, Vatsal Seth, Celina Jetley, Neha Dhupia, Riya Sen, Sayali Bhagat, Johny Lever and others has already been released theatrically worldwide on �9th June 2009 immediately after the strike by the Producers and Distributors was called off, Although the film has not fared well theatrically but we are sure to recover further out of Satellite Rights, Terrestrial Rights, Home Video Rights etc. The other films in pipeline are “Hello Darling” directed by Manoj Tiwari starring Isha Koppikar, Celina Jaitley, Gul Panag, Javed Jaffrey and others, “Right Yaaa Wrong” directed by Neeraj Pathak starring Sunny Deol, Irrfan Khan, Isha Koppikar, Konkona Sen Sharma and others, and a Bengali Film ”Nouka Dubi” directed by Rituparno Ghosh.
On the Whistling Woods International front there has been a lot of development with three batches now having graduated from this prestigious Institute. The Second Convocation was held recently and Lord Bhiku Parekh, a well known economist, was the Chief Guest. The industry feedback on the graduate students has been very positive. The intake of students has been satisfactory.
We have taken some new initiatives during the year. Among those that have taken off the ground is an MBA Programme in Media Management which was launched last year with Manipal University. This year the students of the first MBA batch will be spending a year with WWI to do their industry exposure and projects. We have finalized a similar proposal with Manipal, Dubai which launches the MBA in Media Management this year and their students would come to Whistling Woods International starting next year.
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We have also finalized a TV Broadcast Studies Programme and put in place the curriculum and faculty. The media launch took place in June in the presence of the TVBS Academic Advisory Board members. This is a one year programme and is focused on Television and Radio giving the students exposure to creative and business aspects of Broadcasting. We have also finalized another major international initiative with Centre of Education Ciudad- de la Luz(CDLL), a state of the art Film School based in the Film City of Alicante on the Mediterranean Sea and promoted by the Valencian Provincial Government. This agreement will allow us to launch Whistling Woods International programmes in Spain. CDLL is Europe’s largest Film City and the most modern film school. Since CDLL’s infrastructure meets the standards of WWI, we are happy that students will now have a choice and be able to pursue WWI film making programme internationally. It will also put WWI on the international map.
The management is currently in negotiations with some schools in Hollywood this will further add value to students’ skill sets leading to WWI students getting a global exposure and perspective. I strongly believe that in years to come WWI will be an internationally leading film school and a fountainhead of film and TV technicians in India. I can be proud that I could in my own way make this possible with the support of my shareholders.
The ongoing activities of WWI continued successfully and these included international University students from Syracuse University- USA coming for one month to WWI, a few Deakin University- Australia students doing a part of their learning at WWI and our own WWI animation students doing a joint production programme in Bradford- UK with the students of Bradford University under the UKIERI grant.
The celebrities who visited the WWI campus for master classes workshops and goodwill visits included Lord Bhiku Parikh, Danny Boyle, Dan Wolman, Sooni Taraporewala, Ketan Mehta, Vipul Shah, Shelley Page, Michael Peyser, Barrie Osbourne, Umesh Kulkarni, Vishal Bharadwaj, Rishi Kapoor, Farhan Akhtar, Ritesh Sidhwani,, Jaya Bachchan, Dharmesh Darshan, Santosh Sivan, Amole Gupte, Pankaj Kapur among others.
We were happy to have organized an evening for the Consul Generals of all countries based in Mumbai, to give them a look and feel of what WWI is doing, so that it could lead to possible tie-ups with Universities/ Institutes in their countries. The idea is to make WWI more international. Most Consul Generals highly appreciated the vision of the WWI and its infrastructure and promised to carry the message to the students and Institutes in their respective countries.
Post the exit of Kurt Inderbitzin, former Dean of WWI, we scouted for and appointed John Lee Jr. as the new Dean. John Lee has published a book “The Producers Business Handbook” which is widely used in US universities by students studying film production.
With the paucity of good acting talent, I have been thinking in terms an initiative to set up an Actors Studio as a specialized wing of WWI so as to scale up this activity. I hope to launch the Actors Studio next year. I can assure you that despite the slowdown in the economy and its consequence on raising funds, selling or distributing films etc, I am committed to push our vision and agenda and make Mukta a formidable company.
We may need to tide over tough times for a year or two but we will emerge stronger once some of the initiatives we are taking start showing results. I thank all my shareholders for staying with me through thick and thin and value your being part of an adventurous journey.
Subhash Ghai
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MAnAGEMEnT DISCuSSIOn AnD AnALySISIndustry Performance:
The Entertainment Industry was projected to grow between �2-�5% with sectorwise growth varying between 8-�8%. In the absence of consolidated data, it is not quite clear whether this growth has been achieved. Even under the current economic scenario, however it is likely that the growth in the Entertainment Sector may outstrip GDP growth which is slid down to 5%.
The developments that have hurt the industry and resulted in the slowdown include:
a) The economic slowdown led to reduced ad spend and hence lower consumption of ad time as also decline in rates of ad time which in turn has affected revenues of many TV channels. Margins of TV Producers are in turn under pressure and many television companies are struggling for survival.
b) The affect of the TV industry at the trade level has certainly affected its modalities of operations and GEC and Movie channels have moved to syndication of Movie rights as a means of cutting costs. This has resulted in values of libraries dipping significantly and prices of new movies for satellite rights heading southwards.
c) The price war in the DVD market and the strategy of rock bottom prices offered by a new entrant into this space, has totally eroded margins in DVD market and affected prices offered for DVD rights.
d) The free availability of internet downloads for audio tracks has almost completely wiped out the physical format market with the only silver lining being the mobile downloads.
e) The failure of some of the animation movies which had raised high hopes has spoilt the animation party and although a spate of animation movies had been announced, many have either slowed down production or shelved the project.
f) While the growth in the DTH market continued, the subsidy on set top boxes is bleeding DTH operators who are having a tough time containing operational losses.
g) Procedures who had announced movies with big stars and those who had signed them up at huge prices are now facing significant losses in the absence of corporate support Distributors are backing out from high pay outs with movie after movie failing at the Box Office.
h) FM Radio continued to be stable. However with more licenses likely to be issued the competition will only increase.
i) Despite the economic environment the applications for new TV licenses have continued and the government has cleared a number of licenses recently. Whether these channels would finally be launched remains to be seen.
j) It has been a challenge for the management, given the rapid change in the business environment, to keep its feet firmly on the ground to ensure the winds of change do not blow it off while keeping its eyes on the horizon. During the year, the Company has shown profits and ended the year with the highest turnover ever and almost a 50% growth in the top line. The Company showed good profits in movie production; however it did lose in distribution and exhibition business for multiplexes which has continued to have problems owing to pressures on its already thin margins.
k) The hard negotiations between the multiplex owners and movie producers finally ended the stalemate over revenue share. The pressure on the cost controls and revenues was seen in the struggle between multiplexes and movie producers for a bigger pie in the Box Office revenues. The issue came to the front owing to the changed economic scenario.
The pressures on the booking margins in exhibition has virtually disappeared and the Company has decided to roll back from this business and hence in the forthcoming year the top line may affect since the booking business constituted a significant component of the top line.
Among the other initiatives taken by the Company to buffer the downturn of the economy included withdrawal from Red Carpet Films (RCF). The Company had invested in acquiring a majority stake in RCF expecting to additional mid budget film production activities. However due to its unability to have administrative control over RCF, the Company decided to sell off its share and instead concentrate on its own activities.
The Company also with a view to cut down its overheads has decided to move its offices to the Communication Centre which is located opposite WWIL. Once the same is complete, Mukta will be housed in the top floor of this beautiful building. The Audeus complex is ready but we have not been able to find a buyer or lessee at a price acceptable to the Company. We may have to wait a while longer to be able to sign an acceptable deal. We also plan to lease out the Communication Centre except the top floor which will house the Mukta Arts’ offices.
At the end of the year Ravi Gupta- CEO Mukta Arts Limited who completed his tenure opted not to continue further in a full time capacity. The Company has renegotiated and engaged him in an advisory and consultancy capacity allowing him flexibility. The Company appreciates the contribution of Ravi Gupta to the growth of the Company during his tenure as CEO.
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Review of Operations:
During the year the following two movies were released “Yuvvraaj” starring Anil Kapoor, Salman Khan, Katrina Kaif, Zayed Khan and others, “Sanai Choughude” starring Sai Tamhankar, Subodh Bhave, Tushar Dalvi, Shilpa Tulaskar and others.
The following movies are nearly complete “Right Yaaa Wrong” starring Sunny Deol, Irrfan Khan, Konkona Sen Sharma, Ishaa Koppikar and others, “Hello Darling” starring Celina Jaitley, Isha Koppikar, Gul Panag, Javed Jaffrey and others. The Company has however decided to delay the release of these movies awaiting an improvement in the environment. Film “Paying Guests” starring Shreyas Tlpade, Ashish Chaudhary, Javed Jafferey, Vatsal Seth, Celina Jetley, Neha Dhupia, Riya Sen, Sayali Bhagat, Chunkey Pandey, Johny Lever etc was released on �9th January 2009.
The Company touched a turnover of Rs.�67 crores showing nearly a 50% growth in the top line. The bottom line would have been much better but for the distribution losses and the eroding business margins in the exhibition bookings.
Distribution and Exhibition:
While the Company did grow significantly in distribution and exhibition, the risk in distribution and negligible margins in exhibition has compelled the Company to roll back in the multiplex booking business.
Among the movies distributed in the year were “Slumdog Crorepati”, “Singh is Kinng”, “8X�0 Tasveer”, “Saas Bahu aur Sensex”, “Dasvidaniya”, “Firaaq”, “Shoot on Sight”, “Quantum of Solace”, “Milk”, “The Reader”, “Australia” etc.
Whistling Woods International (WWI):
During the year, WWI showed good growth and its student community continued to increase. A new course in Broadcasting specializing in Production, Business Management and Operations was also announced at a press conference. The second year students of the Manipal University moved into WWI in July 2009. In the forthcoming year we can expect a slow down in the Company, and we need to ride out the rough waves rather than attempt anything adventurous. We would use this time to restructure and plan for the year ahead.
During the year the Company acquired Coruscant Tec Pvt. Limited with the intention of entering into the mobile VAS space as the Company has access to a large library of audio and video content. However it is premature to expect any significant earnings in this business. The Company had earlier acquired 5�% of Coruscant Tec Pvt. Limited and the balance 49% option is due to Mukta Arts Limited. Mukta Arts Limited hopes that over a period of time Coruscant Tec will help Mukta Arts Limited penetrate into the mobile VAS space as content providers to Telcos.
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nOTICENotice is hereby given that the 27th Annual General Meeting of Mukta Arts Limited will be held on Saturday, the 26th of September, 2009 at 4.00 p.m. at the Whistling Woods Institute Auditorium, Dada Saheb Phalke Chitra Nagari, Goregaon (E), Mumbai- 400 065 to transact the following business:
Ordinary Business:
1 To receive, consider, and adopt the audited Profit and Loss Account of the Company for the year ended 31st March, 2009 and the Balance Sheet as at that date together with the Director’s Report and Auditor’s Report thereon.
2 To appoint Director in place of Mr. Anil Harish, who retires by rotation and, being eligible, offers himself for reappointment.
3 To consider and declare the interim dividend as Final Dividend and pass the following resolution as an Ordinary Resolution:
“RESOLVED ThAT interim dividend at the rate of 20% on the paid up capital share capital of the Company, paid by the Board of Directors as interim dividend of the Company during the year, at the meeting held on 20th January, 2009 be and is hereby declared as Final dividend for the year ended 3�st March, 2009.”
4 To consider and pass with or without modifications, the following resolution as an Ordinary Resolution:
“RESOLVED ThAT pursuant to section 224 of the Companies Act, �956 M/s. Shamit Majmudar Associates, Chartered Accountants, Mumbai, be and are hereby appointed as the Statutory Auditors of the Company to hold office from the conclusion of the Twenty- seventh Annual General Meeting until the conclusion of the Twenty-eighth Annual General Meeting, on such remuneration as may be approved by the Board of Directors.”
Registered Office: By Order of the Board 6, Bashiron, 28th Road TPS – III, Bandra (W) Ravi B Poplai Mumbai – 400 050 Company Secretary Place: Mumbai Date: 3�st July 2009
nOTES:
�. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY / PROXIES INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY FORMS, TO BE EFFECTIVE SHOULD BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
2. The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, the �9th September, 2009 to Saturday, the 26th September, 2009 (both days inclusive).
3. Members seeking any information or clarification on the Accounts are requested to send in written queries to the Company, at least seven days before the date of the meeting. Replies to such written queries received, will be provided only at the meeting.
4. Members/proxies should bring the Attendance Slip sent herewith, duly filled in, along with the Annual Report for attending the meeting.
5. Dividends pertaining to Financial Years 200�-02 have been transferred to Investor Education and Protection Fund, in pursuance to Section 205A to Section 205C of Companies Act, �956.
6. Dividends pertaining to Financial Years 2002-03, 2003-04, 2006-07, 2007-08 and 2008-09 which remain unclaimed for a period of seven years will be transferred to Investor Education and Protection Fund, in pursuance to Section 205A to Section 205C of Companies Act, �956. The actual dates on which the transfers will be made are provided in the Corporate Governance Report for reference. Members who have, till date, not encashed their dividend warrants for these years are advised to claim the dividend from the Investor Services Department at the Registered Office of the Company at the earliest. Once unclaimed dividends are transferred to the Investor Education and Protection Fund, Members will not be entitled to claim these dividends.
Registered Office: By Order of the Board 6, Bashiron, 28th Road TPS – III, Bandra (W) Ravi B Poplai Mumbai – 400 050 Company Secretary
Place: Mumbai Date: 3�st July 2009
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AnnExuRE TO nOTICEBrief profile of Mr. Anil Harish, who retires by rotation and is eligible for re-appointment.
Mr. Anil Harish started off with an education from Mumbai’s premier schools and colleges and finally obtained his LLM from the University Of Miami, USA. Today he is one of the leading legal experts on matters relating to taxation, property transactions, and the Foreign Exchange Management Act. He is President of Hyderabad (Sind) National Collegiate Board and is a member of the Managing Committee of Indian Merchants Chamber and is a Director of a number of Companies
By Order of the Board Ravi B Poplai Company Secretary
Place: Mumbai Date: 3�st July 2009
note: A Company bus will be available outside Goregaon (East) Station to carry the shareholders to the AGM venue, till 3.30 p.m. Also BEST buses route no. 343 are available on a regular basis.
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DIRECTORS’ REPORTTo the Members,
Your Directors take pleasure in presenting the Twenty-Seventh Annual Report and Audited Statement of Accounts of the Company for the Accounting year ended 3�st March, 2009:
Financial Results:
(Figures in millions)
Particularsyear ending
31.03.2009(Rs.)
year ending 31.03.2008
(Rs.)Profit before interest, depreciation & tax 89.27 �66.4� Less : Interest 9.60 0.43Profit after interest, before depreciation & tax 79.67 �65.98 Less : Depreciation �8.89 �7.64Profit before tax 60.78 �48.34 Less : Provision for taxation �9.00 �2.�8 Fringe Benefit Tax .88 5.57 Deferred Tax Liability/(Asset) (0.��) 0.29 Profit available for appropriation 4�.0� �30.30 Less : Interim Dividend 22.58 45.�6 Tax on Interim Dividend 3.84 7.68Profit for the year �4.59 77.46Add: Balance brought forward �06.78 29.32
Profit Carried forward to Balance Sheet ��6.37 �06.78
Dividend
The Company has declared Interim Dividend of 20%, viz. Rs. �/- per share on 20th January, 2009 and distributed the same on �0th February, 2009. The Board of Directors has considered the interim dividend paid as the final dividend for the financial year ended 3�st March 2009.
Company’s Performance
During the year the total revenues of the Company rose to Rs.�.68 Billion as compared to Rs. �.�3 Billion of last year showing a top line growth of about 49%. The Company’s performance has been discussed in the Management Analysis in details.
new Initiatives
Mukta Arts Ltd. during the year had acquired 5�% controlling stake in Coruscant Tec Private Limited with option on the balance shares under a performance linked formula. Coruscant Tec, founded in 2003, a Chennai based VAS Company was one the first companies to venture into the lucrative mobile value added services space (MVAS) and provide content and applications related to the fast growing MVAS space. These cover ringtones, wallpapers, Video on Demand, applications, m-comics, mobizines, mobiepisodes and java games. Coruscant is a Red Herring award winner in 2006 and has done innovative work in MVAS such as MF Hussain wallpapers, Uncle Pai comics, aggregation of java games, repurposing magazine content for the mobile, etc.
Coruscant Tec has a few tie ups in place for content aggregation as well as for distribution of content through Telcos. The Company is undercapitalized and was seeking investors who could create and aggregate content which is the key to this business. For Mukta Arts Ltd. which has access to short content created by Whistling Woods students and Audio and Film content, Coruscant was a good fit.
Mukta Arts Limited has exited from its shareholding in “Red Carpet Films Limited” by selling its entire equity in the Company effective from 25th March, 2009 to the original promoter of Red Carpet Films Limited. Details are indicated in the Management Report.
Share Capital
The Share Capital remained the same during the year under review.
Directors
Mr. Anil Harish, Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The requisite particulars in respect of director seeking re-appointment are given in Annexure I.
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Auditor’s Report and Certificate
The Company’s explanation to the Auditors’ observation in their Report have been detailed in Note Nos. 2 (f) & 2 (g) in the notes forming part of Accounts contained in Schedule “P” which forms part of the Annual Report. The Auditors have also certified the Company’s Compliance of the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement and the same is enclosed as an Annexure to the Report on Corporate Governance.
Directors’ Responsibility Statement [Section 217 (2AA)]
The Directors confirm that:
• in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
• the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the company for the year;
• the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
• the Directors had prepared the annual accounts on a going concern basis;
Auditors:
M/s Shamit Majmudar Associates, Chartered Accountants retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment as the Auditors of the Company.
Statutory Disclosures:
The Statements relating to the subsidiary companies viz. Whistling Woods International Limited, Connect.� Limited (Previously Mukta Arts International Limited), Mukta Tele Media. Ltd., and Coruscant Tec Private Limited pursuant to Section 2�2 of the Companies Act, �956 are attached to the Accounts.
Particulars of employees required under Section 2�7 (2A) of the Companies Act, �956 and the Companies (Particulars of Employees) Rules, �975, as amended, are given in Annexure II.
Particulars regarding Foreign Exchange earnings and outgo required under Section 2�7 (�) (e) of the Companies Act, �956 and Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, �988 are given in Schedule P (Statement of Significant Accounting Policies and Notes forming Part of Accounts) of this report.
A cash flow statement for the year ended 31.03.2009 is included with the Accounts.
Corporate Governance
The Company has been proactive in following the principles and practices of good Corporate Governance. The company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreements of the Stock Exchanges are complied with.
A separate statement on corporate governance is produced as a part of the Annual Report along with the Auditors certificate on its compliance.
Conservation of Energy and Technology Absorption
The Company is not engaged in manufacturing activities, and as such the particulars relating to conservation of energy and technology absorption are not applicable. The Company makes every effort to conserve energy as far as possible in its post-production facilities, Studios, Offices, etc.
Fixed Deposits
The Company has not accepted any deposits during the year and as such no amount of principal or interest was outstanding at the Balance Sheet date.
Social Commitments
Your Company is aware of its social responsibility and has been from time to time contributing to social causes.
Acknowledgements
The Board of Directors wishes to thank and record its appreciation to the Artistes, Technicians, film distributors, Bankers, Media and shareholders who have extended their continued support to the Company.
Your Directors thank especially all employees of the Company for their dedicated services to the Company.
On Behalf of the Board of Directors Place: Mumbai Subhash Ghai
Date : 3�st July, 2009 Chairman & Managing Director
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AnnExuRES TO DIRECTORS’ REPORTAnnexure-I
PARTICULARS ABOUT DIRECTORS SEEKING RE-APPOINTMENT
Name Qualification Age Area of expertise Directorship of other Companies
Mr. Anil Harish B.A., LL.B., LL.M.(USA) 55 Advocate PUBLIC LIMITED COMPANIES
1 Hotel Leelaventure Limited
2 Pantaloon Retail (India) Limited
3 Unitech Limited
4 Hinduja Ventures Limited
5 Mahindra Lifespace Developers Ltd.
6 Ador Welding Limited
7 Advani Hotels & Resorts (India) Ltd.
8 Valecha Engineering Limited
9 Mukta Arts Limited
10 Galaxy Entertainment Corporation Ltd.
11 Mantri Chandak Constructions Ltd.
12 Hinduja Global Solutions Ltd.,
13 K.C. Maritime (India) Ltd.
14 Pride Hotels Ltd.,
15 Future Ventures India Ltd.
Annexure-II
Information as per Section 2�7 (2A) of the Companies Act, �956 read with the Companies (Particulars of Employees) Rules, �975 and forming part of the Directors’ Report:
name Designation Qualification Age Date ofJoining Experience
Gross Remuneration
(Rs.)
Previous Employment
Subhash Ghai
Chairman & Managing Director
B.Com, Diploma in Cinema from FTII, Pune
66 years
07.09.�982 40 years �5,640,620 Promoter of the Company
Ravi Gupta
CEO M.Sc., M.B.A 57 years
�.04.2004 34 years 3,304,000 Global CEOof B4U Television
Network
notes:
Remuneration includes salary and other allowances.
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CORPORATE InFORMATIOn
Mr. Subhash Ghai, Chairman & Managing Director Mr. Parvez A. Farooqui, Executive Director
Mr. Rahul Puri, Executive Director Mr. Anil Harish
Mr. Vijay Choraria Mr. Pradeep Guha
Company Secretary and Compliance Officer
Mr. Ravi B Poplai
Auditors
M/s Shamit Majmudar Associates Chartered Accountants
Registered Office
6, Bashiron, 28th Road TPS – III, Bandra (W)
Mumbai – 400 050
Audit Committee
Mr. Vijay Choraria - Chairman Mr. Anil Harish
Mr. Parvez A. Farooqui
Remuneration Committee
Mr. Anil Harish - Chairman Mr. Vijay Choraria
Mr. Parvez A. Farooqui
Shareholders/Investors Grievances Committee:
Mr. Vijay Choraria - Chairman Mr. Parvez A. Farooqui
Mr. Pradeep Guha
Share Transfer Committee
Mr. Parvez A. Farooqui - Chairman Mr. Vijay Choraria Mr. Pradeep Guha
Bankers
Punjab National Bank Limited HDFC Bank Limited
IDBI Bank Kotak Mahindra Bank Limited
Registrar & Transfer Agents Link Intime India Private Limited
C-�3, Pannalal Silk Mills Compound LBS Marg, Bhandup (W)
Mumbai – 400 078
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CORPORATE GOVERnAnCEThe Company’s philosophy on Corporate Governance seeks achieving highest levels of transparency and accountability in various facets of its operations. Whilst the Company appreciates that Growth and Profitability is important, it is equally conscious of the business enablers and gives them as much importance as financial performance. The Company encourages independence and flexibility within an established framework of policies and processes with a view to create vibrant value systems for future growth. Information about major company developments is shared with the shareholders through public notices, press releases and through Annual Reports. In addition, we give below the information on areas covered under Corporate Governance section under clause 49 of the Listing Agreement.
COMPAny’S PhILOSOPhy On CODE OF GOVERnAnCE
The Company’s Corporate Governance policies recognize the Company’s commitment to good and efficient Corporate Governance. The Board of Directors, the Company’s highest policymaking body, is committed in its responsibility for all decisions to all constituents, including investors, employees and regulatory authorities. The Company recognizes that the shareholders are ultimately the persons who are catalyst to the economic activities and also the ultimate beneficiaries thereof.
COMPOSITIOn OF BOARD
The Chairman of the Board of Mukta Arts Limited is also its Managing Director. All Directors including Non-Executive Directors are suitably qualified, experienced and competent. At present, the Board consists of six members, of which three are Non-Executive & Independent Directors.
The list of Executive and Non-Executive Directors is given below:
S.no. name of the Director Designation Status of the Director� Mr. Subhash Ghai Chairman & Managing Director Executive Director2 Mr. Parvez A. Farooqui Executive Director Executive Director3 Mr. Rahul Puri Executive Director Executive Director4 Mr. Anil Harish Director Non–Executive Director & Independent5 Mr. Vijay Choraria Director Non–Executive Director & Independent6 Mr. Pradeep Guha Director Non–Executive Director & Independent
BOARD MEETInGS AnD ATTEnDAnCE
Four Board meetings were held during the year ended 3�st March, 2009. Agenda for the Board meetings is sent to the Directors sufficiently in advance to allow them to examine and interact on the issues involved. Also the senior Executives of the Company are invited to make presentation from time to time.
The information as required under Annexure IA to Clause 49 of the Listing Agreement is made available to the Board. The agenda and the papers for consideration at the Board meeting are circulated sufficiently in advance prior to the meeting. Adequate information is circulated as part of the Board papers and is also made available at the Board meeting to enable the Board take informed decisions.
The dates on which meetings were held are as follows:
S. no. Date of Meeting Board Strength no. of Directors Present� �4.04.2008 6 42 25.07.2008 6 63 3�.�0.2008 6 44 20.0�.2009 6 6
ATTEnDAnCE OF EACh DIRECTOR AT ThE BOARD MEETInGS AnD LAST AnnuAL GEnERAL MEETInG (AGM) AnD ThE nuMBER OF COMPAnIES AnD COMMITTEES WhERE hE IS DIRECTOR / MEMBER AS On 31.03.2009
Directors
no. of Board Meetings
Attended during the period
Attendance at the last
AGM held on 20.09.2008
no. of Directorship in other Boards as
on 31.03.2009 *
no. of Memberships in other Board Committees held in other Companies
**
For whole year Chairman MemberMr. Subhash Ghai 3 Yes 3 Nil �Mr. Rahul Puri 4 Yes 2 Nil NilMr. Parvez A. Farooqui 4 Yes 2 Nil Nil
Mr. Anil Harish 3 No �4 5 9Mr. Vijay Choraria 4 No �0 5 8Mr. Pradeep Guha 2 Yes 4 NIL NIL
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* Directorships in Private Companies, Foreign Companies and Not for Profit Companies are excluded for this purpose.
** For this purpose Audit Committee, Shareholders/Investors’ Grievance and Remuneration Committee is considered.
COMMITTEES OF DIRECTORS
The Board of Directors provide guidance to operating management on policy matters as well as in the monitoring of the actions of operating management. This involvement is formalized through the constitution of designated committees of the Board. The committees are intended to provide regular exchange of information and ideas between the Board and operating management.
AuDIT COMMITTEE
To provide assistance to the Board of Directors of the Company the Audit Committee was constituted. It consists of Chairman and two other members. The Chairman of the Audit Committee is independent Non-Executive Director. The Audit Committee provides direction to and oversees the Audit and Risk Management functions, reviews the financial accounts, interacts with statutory auditors and reviews matters of special interest.
COMPOSITIOn, nAME OF MEMBERS, ChAIRMAn AnD OThERS DETAILS
Mr. Vijay Choraria Chairman Mr. Anil Harish Member Mr. Parvez A. Farooqui Member
During the year under review, the Audit Committee met four times and the no. of times each member attended the meeting is given below.
Meetings & attendance during the year
Members Meetings held during the tenure of the Directors Meetings Attended
Mr. Vijay Choraria 4 3Mr. Anil Harish 4 3Mr. Parvez A. Farooqui 4 4
REMunERATIOn COMMITTEE
The Committee comprises of following Directors
Mr. Anil Harish Chairman Mr. Vijay Choraria Member Mr. Parvez A. Farooqui Member
The Remuneration Committee was constituted to recommend and review remuneration package of Directors and Senior Executives and to present report to the Board on remuneration package of Directors and other Senior Management Officials.
The Company follows the market linked remuneration policy which is aimed at enabling the Company to attract and retain the best talent. Compensation is also linked to individual and team performance as they support the achievement of Corporate Goals.
Meetings & attendance during the year
Members Meetings held during the tenure of the Directors Meetings Attended
Mr. Vijay Choraria 2 2Mr. Anil Harish 2 NilMr. Parvez A. Farooqui 2 2
DETAILS OF REMUNERATION TO EXECUTIVE DIRECTORS
Particulars Mr. Subhash GhaiChairman & Managing Director
Mr. Parvez A. FarooquiExecutive Director
Mr. Rahul Puri Executive Director
Salary �3,000,000 �,756,000 �,756,000Employers Contribution to Provident Fund -- �44,000 �44,000
Perquisites 2,640,620 �2,864 ��,244Total 15,640,620 1,912,864 1,911,244
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DETAILS OF SERVICE COnTRACTnames Period of Contract Dates of AppointmentMr. Subhash Ghai 3 Years �st April, 2008Mr. Parvez A. Farooqui 5 Years �st April, 2005Mr. Rahul Puri 3 Years 23rd October, 2007
DETAILS Of REMUNERATION TO NON-ExECUTIvE DIRECTORS
names Sitting fees (Rs.)
Salary & perquisites (Rs.) Commission (Rs.) Total
(Rs.)Mr. Anil Harish �5,000 Nil Nil �5,000Mr. Vijay Choraria 20,000 Nil Nil 20,000Mr. Pradeep Guha �0,000 NIL Nil �0,000
TOTAL 45,000
DETAILS OF ShARES ISSuED unDER EMPLOyEES STOCk PuRChASE SChEME
The Company had issued 400,000 equity shares to the CEO Mr. Ravi Gupta under the Employees Stock Purchase Scheme. These shares were lying with the Depositories as Locked in Shares and were partially released in favour of the beneficiary during the year 2008-09.
EquITy ShARES OF MukTA ARTS LIMITED hELD By DIRECTORS AS On 31ST MARCh, 2009Members no. of Shares heldMr. Subhash Ghai �2,4�7,990Mr. Rahul Puri NILMr. Parvez A. Farooqui 77,300Mr. Anil Harish NILMr. Vijay Choraria NILMr. Pradeep Guha NIL
ShAREhOLDERS / InVESTOR GRIEVAnCE COMMITTEE
Shareholders / Investor Grievance Committee comprising the following Directors, approves transfer of shares, splitting and consolidation of shares, issuance of duplicate shares and reviewing shareholder’s complaints and resolution thereof.
COMPOSITIOn, nAME OF MEMBERS AnD ChAIRMAn
Mr. Vijay Choraria Chairman Mr. Parvez A. Farooqui Member Mr. Pradeep Guha Member
MEETInGS AnD ATTEnDAnCE DuRInG ThE yEAR
Members Meetings held during the tenure Of the Director Meetings Attended
Mr. Vijay Choraria 4 3Mr. Parvez A. Farooqui 4 4Mr. Pradeep Guha 4 3
Company Secretary is the Compliance Officer of the Company for matters relating to shareholders, Stock Exchanges, The Securities Exchange Board of India (SEBI) and other related regulatory authorities.
nO. OF COMPLAInTS PEnDInG WITh ThE COMPAny
The Company and its Registrar & Transfer Agents M/s Link Intime India Private Limited received 6 letters / complaints during the financial year ended 31st March, 2009 and all were replied to the satisfaction of the shareholders.
ShARE TRAnSFER COMMITTEE
Share Transfer Committee provides assistance to the Board of Directors in ensuring that the transfer of shares takes place within the stipulated period of one month from the date they are lodged with the Company. The Committee frames the policy for ensuring timely transfer of shares including transmission, splitting of shares into marketable lots, consolidation, changing joint holding into single holding and vice versa and also for issuing duplicate share certificates in lieu of those torn/destroyed, lost or defaced.
COMPOSITIOn, nAME OF MEMBERS AnD ChAIRMAn
Mr. Parvez A. Farooqui Chairman Mr. Vijay Choraria Member Mr. Pradeep Guha Member
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MEETInGS AnD ATTEnDAnCE DuRInG ThE yEAR
Members Meetings held during the tenure of the Director Meetings Attended
Mr. Parvez A. Farooqui 2 2Mr. Vijay Choraria 2 2Mr. Pradeep Guha 2 2
GEnERAL BODy MEETInGS
Location and time of the General Body Meetings held during the last three years
Description of Meeting Location Date Time
26th AGM* *Whistling Woods Institution’s AuditoriumDada Saheb Phalke Chitra NagariGoregaon (E), Mumbai-400 065
20.09.2008 4.00 P.M.
25th AGM* Whistling Woods Institution’s AuditoriumDada Saheb Phalke Chitra NagariGoregaon (E), Mumbai-400 065
29.09.2007 4.00 P.M.
24th AGMWhistling Woods Institution’s AuditoriumDada Saheb Phalke Chitra NagariGoregaon (E), Mumbai-400 065
�2.08.2006 4.00 P.M.
** In the 26th AGM the following special resolutions were passed
�. Re-appointment of Mr. Subhash Ghai as Managing Director of the Company.
2. Appointment of Mr. Rahul Puri as Whole Time Director (Executive Director) of the Company.
* * In the 25th AGM the following special resolutions were passed
�. Allotment of Company’s Equity Shares to the Employees of the Company.
2. Reappointment of Mr. Siraj A. Farooqui as Chief Operating Officer (Production & Studio) from 01.04.2007.
DISCLOSuRES
�) The Company has entered into certain transactions with Directors and / or companies in which the Directors or the Management or their relatives, etc., have interest. However, these transactions are of routine nature and do not have any potential conflict with the interest of the Company at large.
2) Neither has any non-compliance with any of the legal provisions of law been made by the Company nor any penalty or stricture imposed by the Stock Exchanges or SEBI or any other statutory authority, on matters related to the capital markets, during the last 3 years.
RISk MAnAGEMEnT
The Company appreciates that the Film Industry is prone to the vagaries of varying likes and dislikes of viewing public. To mitigate such risks, an attempt is being made not only to produce large number of Films covering wider spectrum of viewership but also in different languages. The Company is also widening its distribution network in the market to expand its reach. Whistling Woods Institute, the Film and Television Institute promoted by the Company’s subsidiary Whistling Woods International Limited, had commenced its operations from �8th July 2006. This endeavour will help in sourcing and grooming pool of talent for the Company’s projects in future.
CEO/ CFO CERTIFICATIOn
The Executive Director has signed a certificate accepting responsibility for the financial statements and confirming the effectiveness of the internal control systems, as required in Clause 49 of the Listing Agreement. The certificate is contained in this Annual Report.
AuDITORS’ CERTIFICATE On CORPORATE GOVERnAnCE
The company has obtained a certificate from the auditors of the company regarding compliance with the provisions relating to Corporate Governance laid down in Clause 49 of the Listing Agreement with Stock Exchanges which is attached herewith.
MEAnS OF COMMunICATIOn
Information like Quarterly Financial Results and Press Releases on significant developments in the Company has been made available from time to time to the Press and has also been submitted to the Stock Exchanges to enable them to put them on their web sites. The quarterly Financial Results are published in English and vernacular newspapers. The Company has its own website and all the vital information relating to the Company is displayed on the said website. The address of the website is www.muktaarts.com.
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ShareholderS’ InformatIon A. Annual General Meeting: 27th Annual General Meeting Date: 26th September, 2009
Time: 4.00 P.M.
Venue: Whistling Woods Auditorium, Whistling Woods Institute Dada Saheb Phalke Chitra Nagari Goregaon (E), Mumbai – 400 065
B. Financial Calendar:
Financial year �st April to 3�st March
Adoption of quarterly Results I st quarter By the end of July 2009
II nd quarter By the end of October, 2009
III rd quarter By the end of January, 20�0
IV th quarter By the end of June, 20�0
C. Date of Book Closure: �9th September, 2009 to
26th September, 2009 (both days inclusive)
D. Registered Office: 6, Bashiron 28th Road, TPS – III Bandra (W), Mumbai – 400 050
E. Listing on Stock Exchanges: Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 00� Tel: + 9� – 22 – 2265 558� Fax: + 9� – 22 –2272 37�9 / 2272 2039
National Stock Exchange of India Ltd Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai – 400 05� Tel: +9�-22- 26598�00 - 8��4 Fax: + 9� – 22 – 2659 8237 / 38
Calcutta Stock Exchange Association Ltd. 7, Lyons Range, Kolkata – 700 00� Tel: + 9� – 33 – 22�0 4470 - 77 Fax:+ 9� – 33 – 22�0 4492 / 22�0 4500
The Listing fees for the year 2009–�0 have already been paid to all the Stock Exchanges where the Company’s shares are listed.
F. Stock Code: Bombay Stock Exchange Limited Code No: 532357 Symbol: MUKTARDM ISIN No. INE374B0�0�9
National Stock Exchange of India Ltd Symbol: MUKTAARTS
Calcutta Stock Exchange Association Ltd. Scrip Code – 23922
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G. Market Price Data
Given below is the Market Price Data in respect of The Stock Exchange, Mumbai and National Stock Exchange of India Limited.
Month BSE nSE
April 2008 to March 2009
highest Rate (Rs.)
LowestRate (Rs.)
Average Volume
Traded (nos.)
highestRate (Rs.)
LowestRate (Rs.)
Average Volume
Traded (nos.)April ��9.90 86.55 3727�� ��9.00 87.05 3592May ��4.40 86.45 2743�2 ��6.25 93.00 3708June �08.00 73.20 269669 �05.00 73.�5 �942July 99.00 65.00 3630�8 90.00 63.00 �694
August 90.00 66.25 �84724 90.65 75.�5 �733September �08.00 7�.20 43�3�4 �09.00 72.00 2�5�
October 82.40 47.90 �03449 85.00 48.�0 �860November 70.95 38.00 �45762 74.00 4�.05 �754December 55.95 44.00 95�55 56.00 42.50 667January 57.00 42.�5 342794 59.40 42.00 879�February 45.50 37.�5 8909� 47.00 34.70 308�
March 42.00 32.05 3�5374 43.00 32.�5 2862
h. Address of Registrars and Transfer Agents Link Intime India Private Limited C-�3, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (W) Mumbai – 400 078
I. Share Transfer System
The Company has entrusted the administrative work of share transfers, transmissions, issuance of duplicate certificates etc., and all tasks related to shareholdings to Link Intime India Private Limited, the Registrars and Share Transfer Agents.
J. Distribution of Shareholding as on 31st March, 2009Shareholding of nominal Value (Rs)
no. of Shareholders
% of Total Shareholders
ShareAmount (Rs.)
% of TotalShare Amount
Range� - 5000 5�88 88.35�5 3098530 2.8667500� - �0000 3�3 5.3304 �287020 �.0924�000� - 20000 �39 2.3672 �052200 0.972�2000� - 30000 53 0.9026 687980 0.64403000� - 40000 26 0.4428 460200 0.46454000� - 50000 28 0.4768 667840 0.60875000� - �00000 45 0.7663 �7�0490 �.4642�0000� and above 80 �.3624 �0394�740 9�.8875TOTAL 5872 100.00 112906000 100.00
k. Dematerialization of Shares As on 3�st March, 2009, 22,558,457 shares were dematerialised, which is 99.90% of total paid up capital.L. Company’s Branches/Locations Production House
Bait-Ush-Sharaf 29th Road, Bandra, Mumbai- 400 050 Premises under Construction
�.) “Audeus” Plot No. A – �8, Opp. Laxmi Industrial Estate, Off Link Road, Andheri (w), Mumbai – 400 053
2.) “Communication Centre” Film City Complex, Goregaon East, Mumbai 400065
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M. Address for correspondence
Shareholders can address their correspondence to the Registered Office of the Company at Mumbai and/or at Company’s Registrar and Transfer Agents:
Company Registrar and Transfer AgentsContact PersonAddressTelephone No.Fax No.
Mr. Ravi B PoplaiMr. Parvez A. Farooqui6, Bashiron28th Road, TPS – IIIBandra (W)Mumbai – 400 050(022) 2642 �332(022) 2640 7449
Mr. N. Mahadevan IyerMr. Sandeep Holam/ Mr.Raghunath PujariLink Intime India Private LimitedC-�3, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W)Mumbai – 400 078(022) 2596 3838(022) 2596 269�/ 2594 6969
n nOMInATIOn FACILITy
Shareholders holding shares in physical form and desirous of making a nomination in respect of their shareholding in the Company, as permitted under Section �09A of the Companies Act, �956, are requested to submit their request to the Registrar and Transfer Agents, M/s Link Intime India Private Limited.
O unCLAIMED DIVIDEnD
As conveyed in the corporate Governance Report for the previous year, the unpaid Dividends in respect of 200�-02 have been transferred to Investor Education Fund on the 6th July 2009. Dividends pertaining to the Financial Years 2002-03 to 2008-09 which remain unclaimed for a period of seven years will be transferred to Investor Education and Protection Fund (IEPF) in due course. To enable the members to claim their Dividend before its transfer to the above fund the proposed dates are given below:
Dividend Reference Date of Declaration Due Date for transfer to IEPFFinal Dividend 2002 3�-07-2003 30-07-20�0Final Dividend 2004 29-07-2004 28-07-20��Interim Dividend 2007 �4-03-2007 �3-03-20�4Interim Dividend 2008 �4-04-2008 �3-04-20�5Interim Dividend 2009 29-04-2009 28-04-20�6
P GOVERnAnCE OF SuBSIDIARIES
The subsidiaries of the Company function independently, with an adequately empowered Board of Directors and sufficient resources, however for effective Governance the working of the said subsidiaries is reviewed by the Board from time to time.
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AuDITOR’S REPORT On CORPORATE GOVERnAnCETo the Board of Directors of Mukta Arts Limited
We have read the Report of the Board of Directors on Corporate Governance and have examined relevant records relating to compliance of conditions of Corporate Governance by Mukta Arts Limited, for the year ended 3�st March, 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.
The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination, conducted in the manner described in the “Guidance Note on Certification of Corporate Governance” issued by the Institute of Chartered Accountants of India, was limited to procedures and implementation thereof adopted by the Company for ensuring compliance with the conditions of Corporate Governance. Our examination was neither an audit nor was it conducted to express an opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanation given to us and on the basis of our examination described above, the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
M/s Shamit Majmudar Associates Chartered Accountants
Shamit Majmudar Proprietor
Membership No. 0�0595
Place: Mumbai Date: 3�.07.2009
CEO/CFO CERTIFICATIOnI Parvez A. Farooqui, Executive Director certify that:
(a) I have reviewed the stand alone and Consolidated financial results and the cash flow statement of Mukta Arts Limited (the Company) for the year and that to the best of my knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
(b) There are, to the best of my knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.
(c) I accept responsibility for establishing and maintaining internal controls for financial reporting and that I have evaluated the effectiveness of the internal control systems of the company pertaining to financial reporting and I have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies.
(d) I have indicated to the auditors and the Audit committee
(i) significant changes in internal control over financial reporting during the year;
(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
iii) instances of significant fraud of which I become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.
For and on behalf of Mukta Arts Limited
Parvez A. Farooqui Executive Director
Place: Mumbai Date: 3�.07.2009
2�
AuDITORS’ REPORTTo the Members
�. We have audited the attached Balance Sheet of Mukta Arts Limited as at 3�st March 2009 and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, �956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above:
(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the requirements of the Accounting Standards referred to in sub-section (3C) of Section 2�� of the Companies Act, 1956;
(v) on the basis of the written representations received from the directors as on 3�st March, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (�) of Section 274 of the Companies Act, �956.
5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 3�st March, 2009;
(ii) in the case of Profit and Loss Account of the profit of the Company for the year ended on that date, and
(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For ShAMIT MAJMuDAR ASSOCIATES Chartered Accountants
ShAMIT MAJMuDAR Place: Mumbai Proprietor Dated: 3�st July 2009 Membership No. 0�0595
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AnnExuRE TO ThE AuDITORS’ REPORT[Referred to in paragraph (3) thereof]
(i) The nature of the Company’s business/ activities during the year is such that clauses (viii) and (xiii) of paragraph 4 of the Companies (Auditor’s Report) order, 2003 are not applicable to the Company for the year ending 3�st March 2009.
(ii) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the management at the end of the year and we are informed that no discrepancies between book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year.
(iii) In respect of inventories:
(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its activity during the year.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iv) In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 30� of The Companies Act, �956:
According to the information and explanations given to us the Company has given unsecured loan to a Subsidiary Company, the maximum outstanding balance during the year was Rs. 22�.5 millions and the outstanding balance as on 3�st March 2009 is Rs. 2�8.5 millions. The outstanding interest on unsecured loan as on 3�.03.2009 is Rs. �3.96 millions. The same is not overdue and the rate of interest and other terms and conditions of loan is in our opinion not prima facie prejudicial to the interest of the Company. Apart from the above, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 30� of The Companies Act, �956.
(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for purchase of inventory and fixed assets. There are no sales of goods.
(vi) In respect of transactions entered in the register maintained in pursuance of section 30� of the Companies Act �956:
(a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.
(b) According to the information and explanations given to us, there are transactions/arrangements in excess of Rs 0.50 millions in respect of subsidiary companies in which directors are interested and prices are reasonable having regard to the prevailing market prices at the relevant time.
(vii) The Company has not accepted any deposits from the public to which the provisions of Section 58A and section 58AA of the Companies Act, �956 and the Companies (Acceptance of Deposits) Rules �975, are applicable.
(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.
(ix) According to the information and explanations given to us in respect of statutory and other dues:
(a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Cess and any other statutory dues with the appropriate authorities during the year. There were no undisputed amount of outstanding statutory dues as at 3�st March 2009 for more than six months from the date they became payable.
(b) Disputed dues in respect of Service Tax is Rs 2.12 millions out of which Rs 0.88 millions has not been paid since the matter is pending before CESTAT. (kindly refer Note no. 2(g) in schedule P)
23
(x) The Company has no accumulated losses as at the end of the year. The Company has not incurred cash losses during the financial year and the previous year.
(xi) According to the information and explanations given to us, the Company was not liable to repay any dues to any financial institution and bank, and there were no debenture holders during the year.
(xii) According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xiv) According to the information and explanations given to us and on the basis of our examination of the Company’s records we are of the opinion that the Company is maintaining adequate records regarding transactions in it’s trading activities in the units of Mutual Funds (Debt Schemes) and timely entries have been made in these records. The investments have been held by the Company in it’s own name.
(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by subsidiary Whistling Woods International Limited from Punjab National Bank during the previous year.
(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not taken any term loan during the year.
(xvii) According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment (fixed assets etc.) and vice versa.
(xviii) The Company has not made any preferential allotment during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by public issues during the year.
(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
For ShAMIT MAJMuDAR ASSOCIATES Chartered Accountants
ShAMIT MAJMuDAR Place: Mumbai Proprietor Dated: 3�st July 2009 Membership No. 0�0595
24
BALANCE SHEET AS AT 31ST MARCH, 2009
SCHEDULECurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs.
SOURCES OF FUNDS
Shareholders’ Fund
Share Capital A 112,917,500 112,917,500
Reserves & Surplus B 1,152,972,059 1,138,376,957
Loan Funds
Secured / Unsecured Loans C 281,698,843 150,912,550
TOTAL 1,547,588,402 1,402,207,007
APPLICATION OF FUNDS
Fixed Assets D
Gross Block 353,397,563 334,595,873
Less : Depreciation 196,271,531 177,384,191
Net Block without WIP 157,126,032 157,211,682
Add : Capital Work in Progress 54,489,477 29,888,313
Net Block 211,615,509 187,099,995
Investments E 682,252,295 684,501,046
Deferred Tax Asset/(Liability) (9,244,513) (9,355,035)
Current Assets, Loans & Advances
Inventories F 298,425,040 288,732,011
Debtors G 176,452,387 172,598,021
Cash & Bank Balances H 36,972,908 83,941,746
Loans, Advances & Deposits I 528,197,758 478,620,269
1,040,048,092 1,023,892,047
Less : Current Liabilities & Provisions J 382,213,941 494,192,960
Net Current Assets 657,834,152 529,699,087
Miscellaneous Expenditure 5,130,958 10,261,914
(to the extent not written off)
TOTAL 1,547,588,402 1,402,207,007
Statement of Significant Accounting Policies Pand Notes forming part of Accounts
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
25
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULECurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs.
INCOME
Realisation from Production, Distribution & Exhibition K 1,651,041,121 1,094,659,601
Equipment Hire Income 7,298,363 12,068,681
Other Income L 19,161,800 24,932,495
1,677,501,284 1,131,660,777
EXPENDITURE
Cost of Production, Distribution & Exhibition M 1,484,337,691 886,659,990
Administrative and other expenses N 108,091,357 73,830,363
Depreciation 18,887,340 17,637,350
Preliminary Expenses Written off 5,130,956 5,130,956
1,616,447,344 983,258,659
Profit/(Loss) Before Extraordinary, Non Recurring 61,053,940 148,402,118
and Prior Period items
Less:Extraordinary, Non Recurring & Prior Period Exp. O 275,485 64,856
Profit/(Loss) Before Tax 60,778,455 148,337,262
Less : a) Provision for Taxation 19,000,000 12,181,100
b) Fringe Benefit Tax 875,000 5,565,000
c) Deferred Tax Liability/(Asset) (110,522) 293,086
Profit/(Loss) after Tax 41,013,977 130,298,076
Add : Balance brought forward from last year 106,777,043 29,316,717
Profit available for Appropriation 147,791,020 159,614,793
Appropriations
Transfer to General Reserve 5,000,000 -
Interim Dividend paid during the year 22,581,200 45,162,400
Tax on Interim Dividend 3,837,675 7,675,350
Balance carried forward 116,372,145 106,777,043
Statement of Significant Accounting Policies Pand Notes forming part of Accounts
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
26
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009Current Year
31.03.2009Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.A. CASH FROM OPERATING ACTIvITIES
Net Profit/(Loss) before tax and extraordinary items : 61,053,940 148,402,118 Adjustments for :Depreciation 18,887,340 17,637,350 Interest, dividend, etc., received (18,468,965) (23,930,409)Miscellaneous expenditure written off 5,130,956 5,130,956 (Profit)/Loss on sale of fixed assets (101,053) (443,009)Provision for Dimunation of LIC Mutual fund 162,691 219,545 Operating profit before working capital changes 66,664,909 147,016,551 Adjustments for :(Increase)/ Decrease in Inventories (9,693,029) (144,135,088)(Increase)/ Decrease in Receivables (3,854,366) (56,173,085)(Increase)/ Decrease in Loans and advances 5,799,584 (63,649,441)Increase/(Decrease) in Trade Creditors (82,529,291) 100,213,428 Inc./ (Dec.) in Other current liabilities and provisions (49,324,728) 108,364,592 Cash generated from/(used in) operations (72,936,921) 91,636,957 Direct Taxes paid (55,377,073) (78,488,758)Prior period adjustments (275,485) (64,856)Cash flow before extraordinary items (128,589,478) 13,083,343 Extraordinary items :Net Cash Generated from/(used in) Operating Activities (128,589,478) 13,083,343
B. CASH FLOW FROM INvESTING ACTIvITIESPurchases of fixed assets (53,586,318) (56,195,283)Sale/disposal of fixed assets 10,284,518 8,994,320 (Additions to)/Redemption of investments 2,086,059 33,690,539 Interest, dividend, etc. received 18,468,965 23,930,409 Net cash generated from/(used in) investing activities (22,746,776) 10,419,985
C. CASH FLOW FROM FINANCING ACTIvITIESLoans borrowed (net) 130,786,293 45,090,368 Dividend paid (22,581,200) (45,162,400)Tax on Dividend paid (3,837,675) (7,675,350)Loss on exchange fluctuation - - Net cash recovered from/(used in) financing activities 104,367,418 (7,747,382)Net increase/(decrease) in cash and cash equivalents (46,968,837) 15,755,946 (A+B+C)Cash and cash equivalents (opening) 83,941,746 68,185,800 Cash and cash equivalents (closing) 36,972,908 83,941,746
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
27
SCHEDULES FORMING PART OF THE ACCOUNTSCurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs. SCHEDULE AShare CapitalAuthorised Share Capital 24,000,000 Equity Shares of Rs. 5/- each 120,000,000 120,000,000 (Previous year 24,000,000 Equity Shares of Rs. 5/- each)
Issued, Subscribed & Paid-up Capital22,581,200 Equity Shares of Rs.5/- each 112,906,000 112,906,000 (Previous year 22,581,200 Equity Shares of of Rs 5/- each out of which 16,490,000 shares were allotted as fully paid up by way of Bonus Shares by capitalisation of reserves)Add:- Forfeited shares 11,500 11,500 (Amount originally paid up)
112,917,500 112,917,500
SCHEDULE BReserves & SurplusShare Premium 973,360,000 973,360,000 General ReserveBalance as per last balance sheet 58,239,914 58,239,914 Add : Transfer during the year 5,000,000 -
63,239,914 58,239,914
Balance as per Profit & Loss account 116,372,145 106,777,043
1,152,972,059 1,138,376,957
SCHEDULE CSecured & Unsecured LoansFrom banks against finance of cars 1,913,265 999,300 From LIC against Keyman Insurance Policy of CMD 198,020,500 149,913,250 Other Secured Loan from Banks 46,147,378 - Unsecured Loan 35,617,700 -
281,698,843 150,912,550 SCHEDULE DFixed Assets (Amount in Rs.)
GROSS BLOCK DEPRECIATION NET BLOCKParticulars As on
01.04.2008Additions
during the year
Ded./Adj.during
the year
Total as on
31.03.2009
Depreciationupto
31.03.2008
Additionsduring
the year
Ded./Adjduring
the year
Total Depreciation
upto 31.03.2009
As on 31.03.2009
As on 31.03.2008
Block ‘A’Ownership Premises
106,399,693 7,819,166 - 114,218,859 24,622,690 865,796 - 25,488,486 88,730,373 81,777,003
Block ‘B’Plant & Machinery 177,525,618 6,410,738 - 183,936,356 118,825,881 12,562,484 - 131,388,365 52,547,991 58,699,737 Block ‘C’Motor Vehicles & Others
26,338,071 5,235,726 2,364,298 29,209,499 17,504,428 3,074,831 247,194 20,826,453 8,383,046 8,833,643
Block ‘D’ Furniture Fixture & 21,213,081 1,700,358 - 22,913,439 14,130,421 1,973,307 - 16,103,728 6,809,711 7,082,660 Office EquipmentsBlock ‘E’Computer Software 619,410 - - 619,410 619,410 - - 619,410 - - Intangible AssetsExhibition Rights 2,500,000 - - 2,500,000 1,681,361 163,728 - 1,845,089 654,911 818,639 TOTAL 334,595,873 21,165,988 2,364,298 353,397,563 177,384,191 18,640,146 247,194 196,271,531 157,126,032 157,211,682 Previous Year 313,308,687 29,838,499 651,991 334,595,873 159,746,841 17,506,923 130,427 177,384,191 157,211,682 153,561,846 Capital WIP 29,888,313 32,420,330 7,819,166 54,489,477 - - - - 54,489,477 29,888,313
364,484,186 53,586,318 10,183,464 407,887,040 177,384,191 18,640,146 247,194 196,271,531 211,615,509 187,099,995
28
SCHEDULES FORMING PART OF ACCOUNTSCurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs. SCHEDULE EInvestments
A UNITS OF MUTUAL FUNDS - qUOTEDUnits of LIC Mutual Fund : 19,913,211 45,299,815 LICMF Floating Rate Fund - Growth Plan ( No. of Units 1,946,170.838, Previous year 4,434,721.095)
Units of DWS Mutual Fund : - 20,623,680 Units of DWS Credit Opportunity Cash Fund: (Previous year No. of Units 2,053,754.02)
19,913,211 65,923,496 Less: Provision for Dimunation of LIC Mutual fund 162,691 219,545
19,750,520 65,703,951
PRINCIPAL PNB MF FIXED MATURITY - 11,116,400
( A ) 19,750,520 76,820,350 (NAV of LIC Mutual Fund as on 31.03.2009 is Rs 19,750,520)(NAV of LIC Mutual Fund as on 31.03.2008 is Rs 45,080,270)(NAV of DWS Mutual Fund as on 31.03.2008 is Rs 20,650,086)
B INTER CORPORATE DEPOSITS (UNqUOTED)With Companies ( B ) 285,132,017 232,560,468 (Includes loan to a subsidiary Rs 218,500,000 Previous year Rs.176,500,000)
C LONG TERM INvESTMENTS IN EqUITY SHARESIn wholly owned subsidiaries (Unquoted)Equity Shares of Connect.1 Ltd. 594,000 594,000 (594 shares of Rs.1000/- each, Previous year 594 shares)
Equity Shares of Whistling Woods International Ltd. 169,997,000 169,997,000 (169,997 shares of Rs 1000/- each, Previous year 169,997 shares)
Equity Shares of Mukta Tele Media Ltd. 499,600 499,600 (4,996 shares of Rs.100/- each, Previous year 4,996 shares)
8% RC Preference Shares of Whistling Woods International Ltd. 200,000,000 200,000,000 (200,000 Preference Shares of Rs 1000/- each, Previous year 200,000)
Equity Shares of Red Carpet Films Ltd. - 250,470 (Previous year 25,047 shares of Rs.10/- each)
Equity Shares of Coruscant Tec Pvt Ltd. 2,500,000 - (5,100 Shares, Previous year Nil)
Others (Unquoted)Shares of Bashiron Co. Op. Hsg. Society Ltd 500 500 (10 Shares of Rs. 50/- each, Previous year - 10 shares )
Shares of Bait-Ush-Sharaf Co. Op. Hsg.Society. Ltd. 500 500 (10 Shares of Rs. 50/- each, Previous year - 10 shares)
Equity Shares of Indiasound Ltd. 3,778,158 3,778,158 (7,500,000 Equity Shares of 0.1 Pence each,Previous year 7,500,000 Equity Shares)
( C ) 377,369,758 375,120,228
Total (A+B+C) 682,252,295 684,501,046
29
SCHEDULES FORMING PART OF ACCOUNTSCurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs. SCHEDULE FInventoriesRights of Films (Exhibition, Distribution & other commercial rights including Copyrights) 3,550,000 3,550,000 Work In Progress- Under production films 294,841,616 284,822,550 - Others 33,424 - - Stock of Materials - 359,461
298,425,040 288,732,011
SCHEDULE GSundry Debtors (Unsecured)a) Debts outstanding for a period exceeding six months - Considered good 58,624,884 35,399,889 - Considered doubtful 1,526,438 - b) Other Debts Considered good - Considered good 117,827,503 137,198,132 Less : Provision for doubtful debts 1,526,438 -
176,452,387 172,598,021
SCHEDULE HCash & Bank balancesCash in Hand 432,493 414,057 With Scheduled Banks:In Current Accounts 8,296,196 57,332,064 (Includes Rs. 167,085 in EEFC account,Previous year Rs.143,343)Fixed Deposit with Scheduled Banks 28,244,219 26,195,625
36,972,908 83,941,746
SCHEDULE ILoans & AdvancesAdvances recoverable in cash or in kind or for value to be received 180,212,270 178,476,109 (Includes Rs 21,555,226 from Subsidiary CompaniesPrevious year Rs 16,959,681)(Includes Rs 20,500,000 from a trust in which one of the Directorsis Trustee, Previous year Rs 21,000,000)Advance Taxes and other payments 285,439,684 230,062,611 Advances to Staff 1,307,500 1,381,056 Deposits 61,238,304 68,700,493 {Including Rs.300,000 to a firm of which Managing Director isproprietor, Previous year Rs.300,000}{Including Rs. Nil to Managing Director for use of premises,Previous year Rs.500,000}(Includes Rs 36,285,000 to Subsidiary Companies Previous year Rs 37,300,000)
528,197,758 478,620,270
30
SCHEDULES FORMING PART OF ACCOUNTSCurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs.
SCHEDULE J
Current Liabilities & Provisions:
Sundry Creditors for goods and services rendered 92,336,323 174,865,614
Provision for Taxation 133,214,516 110,813,078
Advances towards films and other services 155,678,658 207,830,208
Unclaimed Dividend 984,444 684,060
382,213,941 494,192,961
SCHEDULE K
Realisation from Production, Distribution & Exhibition
Recovery from New Productions 628,068,073 343,307,936
Recovery from Distribution & Exhibition 981,600,494 632,393,593
Recovery from old films 41,372,554 118,958,072
1,651,041,121 1,094,659,601
SCHEDULE L
Other Income
Interest 16,388,245 18,570,374
Other Income 591,782 559,077
Profit on Sale of Assets 101,053 443,009
Dividend / Income from Units of Mutual Funds 2,080,720 5,360,035
19,161,800 24,932,494
SCHEDULE M
Cost of Production, Distribution & Exhibition
Cost of New Productions 451,067,401 245,691,501
Expenses of Distribution & Exhibition 1,024,235,433 629,038,659
Expenses of old films 9,034,857 11,929,830
1,484,337,691 886,659,990
31
SCHEDULES FORMING PART OF ACCOUNTSCurrent Year
31.03.2009Amount in Rs.
Previous Year31.03.2008
Amount in Rs. SCHEDULE N
Administrative and Other Expenses
Personnel Expenses 45,532,047 34,518,379
(Including Directors Remuneration of Rs 19,464,728
Previous year - Rs.13,873,315)
Repairs & Maintenance : Buildings 2,311,387 2,622,147
Machinery 1,431,527 1,067,173
Others 176,759 60,174
Printing & Stationery 1,064,505 998,615
Telephone & Trunkcalls 2,099,263 2,128,797
Insurance 763,265 1,308,752
Brokerage & Commission 594,280 2,601,653
Electricity Charges 842,630 705,727
Rent 13,320,951 1,748,065
Travelling Expenses 1,176,358 1,479,634
Auditors Remuneration 1,952,663 1,932,500
Professional Expenses 4,930,149 4,243,211
Legal Expenses 2,870,214 778,008
Interest 9,601,158 162,182
Bank Charges 2,550,187 270,634
Rates & Taxes 3,287,247 3,497,191
Bad Debts -Written off 1,047,341 3,307,208
Publicity Expenses 1,339,339 1,778,634
Motor Car Expenses 3,833,753 2,419,221
Miscellaneous Expenses 7,366,334 6,202,458
108,091,357 73,830,363
SCHEDULE O
Extraordinary, Non Recurring & Prior Period Exp.
Prior Period Expenses 275,485 64,856
275,485 64,856
32
SCHEDULE “P”
Statement of Significant Accounting Policies and Notes forming Part of Accounts
1 Significant Accounting Policies
(a) Basis of Preparation of Accounts
The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on accrual basis.
The preparation of financial statements in conformity with Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the year.
(b) (i) Fixed Assets
Fixed Assets are stated at cost of acquisition including the attributable costs to bring the assets to their working condition. Exhibition Rights (Intangible assets) are recorded at the consideration paid for acquisition.
(ii) Depreciation
Depreciation has been provided on Written Down Value Method as per the provision of Companies Act, 1956 and at the rate specified in Schedule XIV of the Companies Act, 1956.
(iii) Capital work in progress
Capital work in progress is shown in Asset Schedule, however pending completion of project no depreciation is provided on the same.
(c) Investments
Investments in the units of Mutual Funds are stated at lower of ‘Cost’ or ‘Net Asset Value’ at the end of the financial year and where ever the net asset value is less than the cost the same is treated as diminution and provided for in the accounts.Other investments are stated at cost.
Holding of investments in subsidiaries and Associate Companies are of strategic importance to the Company and therefore the company does not consider it necessary to provide decrease in the book value of such investments, till such relationship continues with the investee Company.
(d) Inventories
Inventories of under production films and serials are valued at actual amount spent,which includes amount paid, bills settled and advance paid for which bills are awaited.The residual value of old films are valued at Nil as total cost of production is charged to revenue at the time of first release of such film. Other inventories are stated at cost.
(e) Transactions in Foreign Currencies
Transactions in Foreign Currencies are accounted at standard exchange rates. Current assets and current liabilities in foreign currencies are realigned with rates ruling on Balance Sheet date. Any gain/loss arising on realignment or realisation is charged to the Profit and Loss Account.
(f) Revenue recognition
(i) Recovery of old films are recognised at Gross overflows and royalties earned.
Sales/Realisations are recognised on despatch of softwares to the respective parties.
(ii) Interest Income is accounted on accrual basis.
(iii) Dividend income is accounted for when right to receive is established.
(g) Miscellaneous Expenditure
Share issue expenses are amortised over a period of 10 years.
(h) Retirement benefits
(i) Contribution to Provident Fund and other recognised dues are charged to revenue.
(ii) Gratuity is provided on the basis of actuarial valuation made by LIC in accordance with its group gratuity scheme However, for the current year based on the acturial valuation no further provision was required.
33
Current Year Previous Year2 Contingent Liabilities 31.03.2009 31.3.2008
Rupees Rupeesa Claims against the company not acknowledged as Debts Nil Nil b Guarantees given by Bank on behalf of the company 75,743,508 82,523,213 c Letters of Credit given by bank on behalf of the company Nil Nil d Estimated amount of contracts remaining to be executed on Capital
Account & not provided for (net of advance)Nil Nil
Nil Nile Legal suits filed against the company (having monetory implication) Nil Nil f (i) The Income Tax Assessment of the Company is completed upto
Assessment Year 2006-07. There are certain additions made in various assessment for which various appeals are pending at first appellate stage and Tribunal stage (including the appeal decided in favour of Company where in Department is in further appeal).
The disputed Tax amount in respect of the above is : 21,146,616 21,879,805
(ii) Survey action was conducted by the Income Tax TDS department in the registered office of the Company on 27.08.2003. The assessment of the same was completed and demand of Rs 4,957,270 was raised. Aggrieved by the order the Company had filed appeal before the CIT(Appeals).
The Company had paid Rs 2,478,636 under protest against the said demand . During the previous year Company has received Appellate order allowing appeal issues partly. The Company preferred appeal before Hon. Tribunal against the order of CIT(Appeal). The Company has received the order of Hon. Tribunal allowing appeal issues fully in Company’s favour. Appeal effect to the Appellate Tribunal’s order is pending.
g Department of Service Tax has levied service tax of Rs 2.12 million on sponsorship fees received for various films treating the Company as an ‘Advertising Agency’. Further the department had issued show cause notice proposing to levy Rs 2.02 millions service tax on a similar issue.
Against the levy of Rs 2.12 million, the Company filed appeal before the Commissioner of Central Excise (Appeals) and subsequently before Honorable Tribunal, claiming that the provisions of Service Tax Act is not applicable in this matter.
The Company has paid Rs 1.24 millions under protest and the same is shown as ‘advance recoverable in cash or kind’ since the matter is pending before the CESTAT and based on legal opinion sought, the management is of the opinion that the Company will have no liability on this account and that no provision is necessary.
h The Company Law Board had passed an order directing Central Government to undertake the investigation under section 237 of the Companies Act, 1956. The Company aggrieved by the order had moved the Bombay High Court and obtained stay on order. The hearing in this matter was completed and Hon’ble Bombay High Court has finally quashed the investigation.
i The Company has given a Corporate guarantee for Term Loan taken by its subsidiary Whistling Woods International Limited from Punjab National Bank.
3 Additional information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1956 is as follows :
The Company is in the business of production, distribution and exhibition of Entertainment software, hiring of equipments etc. which is not subject to any licence and as such information regarding consumption of Raw Materials, Production and sales is not applicable. Further the nature of business of the Company is such that the installed capacity is not quantifiable.
4 Business segment-wise Report (as per the reporting requirements of AS-17) (Rs in millions)
Current Year Previous Yeara. Revenue
Software Division 1,651.04 1,094.66 Equipment Division 7.30 12.07 Others 19.16 24.93 TOTAL 1,677.50 1,131.66 b. Results Software Division 166.70 208.00 Equipment Division (7.28) (1.99) Others 19.16 24.93
TOTAL 178.58 230.94
34
(Rs in millions)c. Capital Employed Current Year Previous Year Software Division 567.79 510.74 Equipment Division 148.47 151.49
Current Year Previous Year5 Earnings in Foreign Exchange Rupees Rupees
Realisation from Films & Music ( Exploitation of Rights) 882,023 5,193,706 882,023 5,193,706
6 Expenditure in Foreign CurrencyTravelling 197,213 330,958 For Films * 5,936,083 51,222,009 Publicity / Others 704,096 289,117
6,837,392 51,842,084 (*) Expenses include expenditure incurred on overseas locations towards travelling, lodging, boarding & location hire etc.
7 Auditors Remuneration :Statutory Audit Fees 600,000 600,000 Tax Audit Fees 200,000 200,000 For Taxation matters 325,000 325,000 For Other Services 125,000 125,000 Reimbursement of Expenses 132,500 132,500
1,382,500 1,382,500 8 Managerial Remuneration u/s 198 of the Companies Act, paid or
payable during the year :Salary 16,512,000 12,970,460 Contribution to Provident Fund 288,000 180,339 Perquisites 2,664,728 722,516 19,464,728 13,873,315
9 value of imports of material on CIF basisMachinery Spares - 6,905,318
10 a) Fixed deposits with scheduled banks include interest accrued (net of taxes) upto 31.03.09 Rs 2.17 million (Previous year Rs 1.56 million). Fixed deposits of Rs 27.92 million (Previous Year Rs 11.76 million) are pledged as security against bank guarantees given for the Company.
b) Lien has been marked on Investments to the extent of 1,913,720 units, previous year -3,163,311- units of LIC MF Floating Rate Fund - Dividend Re-investment Plan in favour of Punjab National Bank against bank guarantees given for the Company.
11 Taxes on Income
(a) Current Tax - Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961
(b) Deferred Tax Position - For the purpose of quantifying deferred tax amount as on Balance Sheet date deferred tax is recognised on timing differences being difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Liability till balance sheet date amounts to Rs 9,244,513 (Previous year Deferred Tax Liability Rs 9,355,034) .
12 Related Party Transaction (A) The list of related parties and nature of their relationship is furnished below: Companies under the same management- Whistling Woods International Ltd. 84.99% - subsidiary Connect.1 Limited 99% - subsidiary Mukta Tele Media Ltd. 99.92% - subsidiary Coruscant Tec Pvt. Ltd. 51% - subsidiary Mukta Tele Arts Pvt. Ltd. CMD is director Firms- Mukta Arts Proprietory firm of CMD
35
Trusts- MAL Employees Welfare Trust Executive Director is settler and One of the Directors is Trustee Directors of the company- Chairman & Managing Director Mr.Subhash Ghai Executive Director Mr.Parvez A. Farooqui Executive Director Mr.Rahul Puri Non Executive Directors Mr. Anil Harish Mr. Vijay Choraria Mr. Pradeep Guha Relatives of Directors- Mr. Ashok Ghai Brother of CMD Mr. Siraj Farooqui Brother of Executive Director Mr. Sameer Farooqui Brother of Executive Director Mr. Sajid Farooqui Brother of Executive Director
(B) Transactions with and outstanding balances of related parties are furnished below.
(Amount in Rupees)
Volume of transactions during the year Subsidiaries Associates Key
Manage-ment
personnel
Relatives of key
management personnel
Total Outstanding Balance
31.03.2009
Purchase & Other ServicesConnect.1 Ltd. 240,000 - - - 240,000 190,560 Mukta Arts - 130,000 - - 130,000 60,000 Mukta Tele Media Ltd. 81,000 - - - 81,000 - Interest RecoveriesWhistling Woods International Ltd. 18,046,603 - - - 18,046,603 13,957,242 Receiving of ServicesAshok Ghai - - - 1,800,000 1,800,000 - Payment of SalariesSiraj Farooqui - - - 1,900,000 1,900,000 - Sameer Farooqui - - - 377,480 377,480 - Sajid Farooqui - - - 132,999 132,999 - Investments8% RCPS of Whistling Woods International Ltd.
- - - - - 200,000,000
Shares of Whistling Woods International Ltd.
- - - - - 169,997,000
Shares of Connect.1 Ltd. - - - - - 594,000 Shares of Mukta Tele Media Ltd. - - - - - 499,600 Shares of Coruscant Tec Pvt Ltd 2,500,000 - - - 2,500,000 2,500,000 Shares of Red Carpet Films Ltd. 250,470 - - - 250,470 - Loans GivenWhistling Woods International Ltd. 42,000,000 - 42,000,000 218,500,000 Interest RecoverableWhistling Woods International Ltd. 13,957,242 - 13,957,242 13,957,242 Advances RecoverableMAL Employees Welfare Trust 500,000 - - - 500,000 20,500,000 Mukta Tele Media Ltd. - - - - - 6,637,984 Coruscant Tec Pvt. Ltd 960,000 - - - 960,000 960,000
36
Volume of transactions during the year Subsidiaries Associates Key
Manage-ment
personnel
Relatives of key
management personnel
Total Outstanding Balance
31.03.2009
Managerial RemunerationSubhash Ghai - - 15,640,620 - 15,640,620 - Parvez A. Farooqui - - 1,912,864 - 1,912,864 - Rahul Puri - - 1,911,244 - 1,911,244 - Deposits for Premisestaken on lease or otherwiseConnect.1 Ltd. 750,000 - - - 750,000 2,550,000 Mukta Arts - - - - - 300,000 Subhash Ghai 500,000 - - - 500,000 - Muka Tele Media Ltd. 265,000 - - - 265,000 3,735,000 Whistling Woods International Ltd. - - - - - 30,000,000
Note: The company has paid to it’s Non-executive Directors, the sitting fees @ Rs.5,000/- per Board-meeting attended. 13. (a) There were no amounts payable to Small Scale Industrial Undertaking on the Balance Sheet date.
(b) The Company has no Suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act are not applicable.
14. Current Investments bought and sold during the year
No. of units
LIC MF FLOATING RATE FUND Sold 2,488,550.26
DWS CREDIT OPPORTUNITY CASH FUND Sold 2,053,754.02
15. Previous year figures have been regrouped wherever necessary.
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
37
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. REGISTRATION DETAILS Registration No. L92110MH1982PLC028180 State Code: 011
Balance Sheet Date : 31.03.2009
II. CAPITAL RAISED (AMOUNTS IN RS. THOUSANDS)Public Issue : Nil Bonus Issue: Nil
Rights Issue : Nil Private Placement : Nil
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNTS IN RS. THOUSANDS)Total Liabilities 1547588 Total Assets 1547588
SOURCES OF FUNDSPaid-up Capital 112918 Reserves & Surplus 1152972
Secured Loans 246080 Unsecured Loans 35618
APPLICATION OF FUNDSNet Fixed Assets 211616 Investments 682252
Net Current Assets 657834 Misc. Expenditure 5131
Deffered Tax Assets (9245)
Iv. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)
Turnover 1677501 Total Expenditure 1616723
Profit /Loss before tax 60778 Profit /Loss after tax 41014
Earning per Share - Rs 1.82 Dividend rate % 20%
v. GENERIC NAMES OF PRINCIPAL PRODUCTS / SERvICES OF COMPANY
Item Code No.: Not Applicable
Product Description: SOFTWARE PRODUCTION, DISTRUBUTION & EQUIPMENT HIRE
38
STAT
EMEN
T PU
RSUA
NT to
SEC
TIO
N 21
2 of
the
COM
PANI
ES A
CT, 1
956
RELA
TING
to S
UBSI
DIAR
Y CO
MPA
NIES
1N
ame
of th
e C
ompa
nyW
hist
ling
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ds
Inte
rnat
iona
l Ltd
.C
onne
ct.1
Lim
ited
(For
mer
ly k
now
n as
Muk
ta A
rts
Inte
rnat
iona
l Ltd
.)
Muk
ta T
ele
Med
ia L
td.
Cor
usca
nt T
ec P
vt. L
imite
d
2Fi
nanc
ial Y
ear o
f the
Sub
sidi
ary
Com
pany
31 M
arch
, 200
931
Mar
ch, 2
009
31 M
arch
, 200
931
Mar
ch, 2
009
3H
oldi
ng C
ompa
ny’s
Inte
rest
Num
ber o
f sha
res
169
,997
59
449
9651
00
(Equ
ity s
hare
s of
Rs.
1000
/- fu
lly
paid
up)
(Equ
ity S
hare
s of
Rs
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0/-e
ach
fully
pai
d-up
)(E
quity
Sha
res
of R
s 10
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each
fully
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d-up
)(E
quity
Sha
res
of R
s 10
/- ea
ch
fully
pai
d-up
)
4E
xten
t of s
hare
hold
ing
84.9
9%99
.00%
99.9
2%51
.00%
5Th
e N
et a
ggre
gate
of
Pro
fit /
Los
s of
the
C
ompa
ny fo
r the
fina
ncia
l yea
r, so
far a
s it
conc
erns
the
mem
bers
of M
ukta
Arts
Ltd
.
Acc
ount
s of
Whi
stlin
g W
oods
In
tern
atio
nal L
td. a
re a
nnex
edA
ccou
nts
of
Con
nect
.1
Lim
ited
(For
mer
ly k
now
n as
Muk
ta A
rts
Inte
rnat
iona
l Ltd
.) ar
e an
nexe
d
Acc
ount
s of
M
ukta
Te
le
Med
ia L
td. a
re a
nnex
edA
ccou
nts
of
Cor
usca
nt
Tec
Pvt
. Ltd
. are
ann
exed
6N
et
Agg
rega
te
of
Pro
fit
/ Lo
ss
of
the
Com
pany
for t
he
prev
ious
yea
r, so
far
as
it co
ncer
ns t
he
mem
bers
of M
ukta
Arts
Ltd.
Acc
ount
s of
Whi
stlin
g W
oods
In
tern
atio
nal
Ltd.
are
ann
exed
Acc
ount
s of
Con
nect
.1 L
imite
d(F
orm
erly
kno
wn
as M
ukta
Arts
In
tern
atio
nal L
td.)
are
ann
exed
Acc
ount
s of
M
ukta
Te
le
Med
ia L
td. a
rean
nexe
d
Acc
ount
s of
C
orus
cant
Te
c P
vt. L
td. a
rean
nexe
d
Fo
r and
on
beha
lf of
the
boar
d
S
UB
HA
SH
GH
AI
PA
Rv
Ez
A. F
AR
OO
qU
I
Cha
irman
& M
anag
ing
Dire
ctor
E
xecu
tive
Dire
ctor
RA
HU
L P
UR
I v
IJA
Y C
HO
RA
RIA
E
xecu
tive
Dire
ctor
D
irect
or
Pla
ce :
Mum
bai
RA
vI P
OP
LAI
Dat
e :
31st
Jul
y 20
09
Com
pany
Sec
reta
ry
39
Auditors’ report to the Board of Directors of Mukta Arts Limited on the Consolidated Financial Statement of Mukta Arts Limited and its Subsidiaries
1. We have audited the attached consolidated Balance Sheet of Mukta Arts Ltd. (the company) and its subsidiaries as at 31st March, 2009 the consolidated Profit and Loss Account for the year ended on that date annexed thereto, and the consolidated cash flow statement for the year ended on that date, which we have signed under reference to this report. These consolidated financial statements are the responsibility of the management of Mukta Arts Limited .Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
2. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of Mukta Arts Limited and its Subsidiaries included in the consolidated financial statements.
3. On the basis of the information and explanations given to us and on consideration of the separate audit reports on individual audited financial statements of Mukta Arts Limited and its Subsidiaries, in our opinion, the consolidated financial statements together with the notes thereon and attached thereto give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the consolidated balance sheet of the consolidated state of affairs of Mukta Arts Limited and its Subsidiaries as at 31st March 2009 ;
(b) in the case of the consolidated profit and loss account, of the consolidated results of operations of Mukta Arts Limited and its Subsidiaries for the year ended on that date ;
(c) in the case of the consolidated cash flow statement, of the consolidated cash flows of Mukta Arts Limited and its subsidiaries for the year ended on that date .
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
Place: Mumbai SHAMIT MAJMUDAR Dated: 31st July 2009 Proprietor Membership No. 010595
40
CONSOLIDATED BALANCE SHEET OF MUKTA ARTS LTD AND ITS SUBSIDIARIES AS AT 31ST MARCH-2009
SCHEDULE
Current Year 31.03.2009
Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.SOURCES OF FUNDSShareholders’ FundShare Capital A 112,917,500 112,917,500 Minority Interest 30,010,810 30,161,814 Reserves & Surplus B 779,722,606 863,840,092 Loan FundsSecured / Unsecured Loans C 356,554,456 257,282,925 TOTAL 1,279,205,373 1,264,202,331 APPLICATION OF FUNDSFixed Assets DGross Block 1,032,254,070 1,001,109,051 Less : Depreciation 417,174,517 327,964,827 Net Block without WIP 615,079,553 673,144,224 Add : Capital Work in Progress 55,955,346 35,332,572 Net Block 671,034,899 708,476,796 Investments E 90,162,195 137,216,175 Deferred Tax Asset/(Liability) (9,244,513) (8,397,737)Current Assets, Loans & AdvancesInventories F 302,160,447 292,467,417 Debtors G 181,043,747 183,215,463 Cash & Bank Balances H 37,443,079 136,713,054 Loans, Advances & Deposits I 488,260,315 444,383,654
1,008,907,588 1,056,779,588 Less : Current Liabilities & Provisions J 487,091,655 640,620,175 Net Current Assets 521,815,933 416,159,413 Miscellaneous Expenditure 5,436,859 10,747,684 (to the extent not written off) TOTAL 1,279,205,373 1,264,202,331 Statement of Significant Accounting Policies Pand Notes forming part of Accounts
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
41
CONSOLIDATED PROFIT & LOSS ACCOUNT OF MUKTA ARTS LTD AND ITS SUBSIDIARIES FOR THE YEAR ENDED 31ST MARCH, 2009
SCHEDULE
Current Year 31.03.2009
Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.INCOMERealisation from Productions, Distribution & Exhibition K 1,651,041,121 1,094,659,601 Equipment Hire Income 7,298,363 12,068,681 Fees from Students 162,671,566 97,322,656 Other Income L 29,847,897 37,623,255
1,850,858,947 1,241,674,193 EXPENDITURECost of Production, Distribution & Exhibition M 1,484,337,691 886,659,990 Administrative and other expenses N 309,021,852 227,917,850 Depreciation 89,209,689 103,699,206 Preliminary Expenses Written off 5,303,688 5,316,898
1,887,872,920 1,223,593,944 Profit/(Loss) Before Extraordinary, Non Recurring (37,013,974) 18,080,249 and Prior Period itemsLess:Extraordinary, Non Recurring and Prior Period items O 370,537 642,173 Profit/(Loss) Before Tax (37,384,511) 17,438,076 Less : a) Provision for Taxation 19,031,000 12,215,100 b) Fringe Benefit Tax 1,393,622 6,172,000 c) Deferred Tax Liability/(Asset) (110,522) (664,212)Profit/(Loss) after Tax (57,698,611) (284,812)Add : Balance brought forward from last year (167,759,822) (114,637,260)Profit available for Appropriation (225,458,433) (114,922,072)Appropriations Transfer to General Reserve 5,000,000 - Interim Dividend paid during the year 22,581,200 45,162,400 Tax on Interim Dividend 3,837,675 7,675,350 Balance carried forward (256,877,308) (167,759,822)Statement of Significant Accounting Policies Pand Notes forming part of Accounts
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
42
CONSOLIDATED CASHFLOW STATEMENT OF MUKTA ARTS LIMITED AND ITS SUBSIDIARIES FOR THE YEAR ENDED 31ST MARCH, 2009
Current Year 31.03.2009
Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.A. CASH FROM OPERATING ACTIvITIES
Net Profit before tax and extraordinary items : (37,013,974) 18,080,249 Adjustments for :Depreciation 89,209,689 103,699,206 Interest, dividend, etc., received (18,496,451) (24,751,548)Miscellaneous expenditure written off 5,303,688 5,316,898 (Profit)/Loss on sale of fixed assets (101,053) (443,009)Provision for Dimunation of Investment 162,691 219,545 Operating profit before working capital changes 39,064,590 102,121,341 Adjustments for :(Increase)/ Decrease in Inventories (9,693,030) (144,135,486)(Increase)/ Decrease in Receivables 2,171,716 (59,034,626)(Increase)/ Decrease in Loans and advances 14,862,752 (65,848,164)Increase/(Decrease) in Trade Creditors (124,218,348) 164,134,037 Inc./ (Dec.) in Other current liabilities and provisions (29,310,172) 127,337,146 Cash generated from/(used in) operations (107,122,492) 124,574,248 Direct taxes paid (58,739,413) (81,052,240)Prior period adjustments (370,537) (642,173)Cash flow before extraordinary items (166,232,442) 42,879,835 Extraordinary items : Net Cash Generated from/(used in) Operating Activities (166,232,442) 42,879,835
B. CASH FLOW FROM INvESTING ACTIvITIESPurchases of fixed assets (81,624,334) (79,821,175)Sale/disposal of fixed assets 10,183,714 8,551,313 (Additions to)/Redemption of investments 47,053,979 90,628,334 Interest, dividend, etc. received 18,496,451 24,751,548 Net cash generated from/(used in) investing activities (5,890,190) 44,110,020
C. CASH FLOW FROM FINANCING ACTIvITIES Loans borrowed (net) 99,271,531 29,306,900 Dividend paid (22,581,200) (45,162,400)Tax on Dividend paid (3,837,675) (7,675,350)Net cash recovered from/(used in) financing activities 72,852,656 (23,530,850)Net increase in cash and cash equivalents (A+B+C) (99,269,975) 63,459,005 Cash and cash equivalents (opening) 136,713,054 73,254,049 Cash and cash equivalents (closing) 37,443,079 136,713,054
As per our report of even date For and on behalf of the board
For SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director
SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595
Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
43
SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTSCurrent Year
31.03.2009 Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
SCHEDULE A
Share Capital
Authorised Share Capital
24,000,000 Equity Shares of Rs. 5/- each (Previous year 24,000,000 Equity Shares of Rs. 5/- each) 120,000,000 120,000,000
Issued, Subscribed & Paid-up Capital
22,581,200 Equity Shares of Rs.5/- each (Previous year 22,581,200 Equity Shares of Rs 5/- each out of which 16,490,000 shares were allotted as fully paid up by way of Bonus Shares by capitalisation of reserves)
112,906,000 112,906,000
Add:- Forfeited shares 11,500 11,500
(Amount originally paid up)
112,917,500 112,917,500
SCHEDULE B
Reserves & Surplus
Share Premium 973,360,000 973,360,000
General Reserve
Balance as per last balance sheet 58,239,914 58,239,914
Add : Transfer during the year 5,000,000 -
63,239,914 58,239,914
Balance as per Profit & Loss account (256,877,308) (167,759,822)
779,722,606 863,840,092
SCHEDULE C
Secured / Unsecured Loans
From banks against finance of cars 2,003,371 1,700,673
From LIC against Keyman Insurance Policy of CMD 198,020,500 149,913,250
Term Loan from Banks 120,790,823 105,669,002
Unsecured Loan 35,739,762 -
356,554,456 257,282,925
44
SC
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45
SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTSCurrent Year
31.03.2009 Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
SCHEDULE E
Investments
A UNITS OF MUTUAL FUNDS - qUOTED
Units of LIC Mutual Fund : 19,913,211 45,299,815
LICMF Floating Rate Fund - Growth Plan
( No. of Units 1,946,170.838, Previous year 4,434,721.095)
Units of DWS Mutual Fund : - 20,623,680
Units of DWS Credit Opportunity Cash Fund:
(Previous year No. of Units 2,053,754.02)
19,913,211 65,923,495
Less: Provision for Dimunation of LIC Mutual fund 162,691 219,545
19,750,520 65,703,950
PRINCIPAL PNB MF FIXED MATURITY - 11,116,400
( A ) 19,750,520 76,820,350
(NAV of LIC Mutual Fund as on 31.03.2009 is Rs 19,750,520)
(NAV of LIC Mutual Fund as on 31.03.2008 is Rs 45,080,270)
(NAV of DWS Mutual Fund as on 31.03.2008 is Rs 20,650,086)
B INTER CORPORATE DEPOSITS (UNqUOTED)
With Companies ( B ) 66,632,017 56,060,468
C LONG TERM INvESTMENTS IN EqUITY SHARES
In wholly owned subsidiaries (Unquoted)
Shares of Bashiron Co. Op. Hsg. Society Ltd 500 500
(10 Shares of Rs. 50/- each, Previous year - 10 shares )
Shares of Bait-Ush-Sharaf Co. Op. Hsg.Society. Ltd. 1,000 750
(20 Shares of Rs. 50/- each, Previous year - 15 shares)
Equity Shares of Indiasound Ltd. 3,778,158 3,778,158
(7,500,000 Equity Shares of 0.1 Pence each,
Previous year 7,500,000 Equity Shares)
( C ) 3,779,658 3,779,408
D FIXED DEPOSIT
With Banks (Including interest accrued) ( D ) - 555,949
TOTAL ( A + B+ C +D) 90,162,195 137,216,175
SCHEDULE F
Inventories
Rights of Films (Exhibition, Distribution & other
commercial rights including Copyrights) 3,750,000 3,750,000
Work In Progress
- Under production films 298,377,023 288,357,957
- Stock of Materials /Others 33,424 359,460
302,160,447 292,467,417
46
SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTSCurrent Year
31.03.2009 Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
SCHEDULE GSundry Debtors (Unsecured)a) Debts outstanding for a period exceeding six months
- considered good 59,399,269 37,116,985
- considered doubtful 2,507,018 884,147
b) Other Debts Considered good
- considered good 121,644,478 146,098,478
183,550,766 184,099,610
Less: Provision for doubtful debts 2,507,018 884,147
181,043,747 183,215,463
SCHEDULE HCash & Bank balancesCash in Hand 486,219 476,899
With Scheduled Banks:
In Current Accounts 8,687,641 110,015,530
(Includes Rs. 167,085 in EEFC account,
Previous year Rs.143,343)
Fixed Deposit with Scheduled Banks 28,269,219 26,220,625
37,443,079 136,713,054
SCHEDULE ILoans & AdvancesAdvances recoverable in cash or in kind or for value 162,072,859 169,236,453
to be received
(Includes Rs 20,500,000 from a trust in which one of the Directors
is Trustee, Previous year Rs 21,000,000)
Advance Taxes and other payments 296,002,412 237,262,999
Advances to Staff 1,307,500 1,381,056
Deposits 28,877,544 36,503,146
{Including Rs.300,000 to a firm of which Managing Director is proprietor, Previous year Rs.300,000}
{Including Rs. Nil to Managing Director for use of premises, Previous year Rs.500,000}
488,260,315 444,383,654
SCHEDULE JCurrent Liabilities & Provisions:Sundry Creditors for goods and services rendered 188,003,913 312,222,261
Provision for Taxation 136,139,598 114,633,376
Advances towards films and other services 161,963,700 213,080,478
Unclaimed Dividend 984,444 684,060
487,091,655 640,620,175
47
SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTSCurrent Year
31.03.2009 Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.SCHEDULE KRealisation from Production, Distribution & ExhibitionRecovery from New Productions 628,068,073 343,307,936 Recovery from Distribution & Exhibition 981,600,494 632,393,593 Recovery from old films 41,372,554 118,958,072
1,651,041,121 1,094,659,601
SCHEDULE LOther IncomeInterest 16,415,731 19,391,513 Other Income 11,250,393 12,428,698 Profit on Sale of Assets 101,053 443,009 Dividend / Income from Units of Mutual Funds 2,080,720 5,360,035
29,847,897 37,623,255
SCHEDULE MCost of Production, Distribution & ExhibitionCost of New Productions 451,067,401 245,691,501 Expenses of Distribution & Exhibition 1,024,235,433 629,038,659 Expenses of old films 9,034,857 11,929,830
1,484,337,691 886,659,990
SCHEDULE N Administrative and Other Expenses Personnel Expenses 72,000,741 63,625,291 (Including Directors Remuneration of Rs 21,618,892Previous year - Rs.18,616,594) Repairs & Maintenance : Buildings 10,268,097 8,460,907 Machinery 3,124,857 1,651,673 Others 187,210 60,174 Printing & Stationery 3,619,801 2,531,625 Telephone & Trunkcalls 5,727,377 6,193,090 Insurance 1,615,984 1,870,625 Brokerage & Commission 638,424 2,601,653 Electricity Charges 17,452,253 11,456,178 Rent 27,056,309 15,818,241 Travelling Expenses 5,634,371 4,634,014 Auditors Remuneration 2,356,949 2,449,145 Professional Expenses 45,710,447 33,558,264 Legal Expenses 2,870,214 778,008 Interest 38,582,255 27,454,942 Bank Charges 2,584,936 270,634 Rates & Taxes 12,963,306 8,526,113 Bad Debts -Written off 1,127,065 7,093,612 Publicity Expenses 12,984,694 9,745,849 Motor Car Expenses 4,581,539 3,297,875 Miscellaneous Expenses 37,935,023 15,839,937
309,021,852 227,917,850
SCHEDULE O Extraordinary, Non Recurring & Prior Period Exp. Prior Period Expenses 370,537 642,173
370,537 642,173
48
SCHEDULES TO THE CONSOLIDATED FINANCIAL STATEMENTS SCHEDULE “P”
Statement of Significant Accounting Policies and Notes forming Part of Consolidated Accounts
1 Significant Accounting Policies
(a) Basis of Preparation of Accounts
The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on accrual basis.
The preparation of financial statements in conformity with Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the year.
(b) Principles of consolidation
The consolidated financial statements relate to Mukta Arts Limited (“The Company”) and its subsidiaries. The consolidated financial statements have been prepared on the following basis:
1. The financial statements of the Company and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses (other than those allocated to particular films & serials), after eliminating intra-group balances and intra-group transactions.
2. The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as Company’s separate financial statements.
(c) The Subsidiaries considered in the consolidated financial statement are : % voting power
as on 31.03.09% voting power as on 31.03.08
Connect.1 Limited 99.00 99.00 (Formerly known as Mukta Arts International Limited)Whistling Woods International Limited 84.99 84.99 Mukta Tele Media Limited 99.92 99.92 Coruscant Tec Pvt. Limited 51.00 -
2 Other Significant Accounting Policies
These are set out in the notes to the financial statements under significant of Accounting Policies of the financial statements of the company and its Subsidiaries.
3 Contingent LiabilitiesCurrent Year
RupeesPrevious Year
Rupeesa Claims against the company not acknowledged as Debts- Nil Nilb Guarantees given by Bank on behalf of the company 75,743,508 82,523,213 c Letters of Credit given by bank on behalf of the company Nil Nil d Estimated amount of contracts remaining to be executed on Capital
Account and not provided for (net of advances)(i) Whistling Woods International Ltd. 199,012 11,459,263 e Legal suits filed against the company (having monetary implication)f (i) The Income Tax Assessment of the Company is completed upto
Assessment Year 2006-07. There are certain additions made in various assessment for which various appeals are pending at first appellate stage and Tribunal stage (including the appeal decided in favour of Company where in Department is in further appeal). The disputed Tax amount in respect of the above is :
21,146,616 21,879,805
(ii) Survey action was conducted by the Income Tax TDS department in the registered office of the Company on 27.08.2003. The assessment of the same was completed and demand of Rs 4,957,270 was raised. Aggrieved by the order the Company had filed appeal before the CIT(Appeals).
The Company had paid Rs 2,478,636 under protest against the said demand . During the previous year Company has received Appellate order allowing appeal issues partly. The Company preferred appeal before Hon. Tribunal against the order of CIT(Appeal). The Company has received the order of Hon. Tribunal allowing appeal issues fully in Company’s favour. Appeal effect to the Appellate Tribunal’s order is pending.
49
g Department of Service Tax had levied service tax of Rs 2.12 million on sponsorship fees received for various films treating the Company as an ‘Advertising Agency’. Further the department had issued show cause notice proposing to levy Rs 2.02 millions service tax on a similar issue. Against the levy of Rs 2.12 million, the Company filed appeal before the Commissioner of Central Excise (Appeals) and subsequently before Honorable Tribunal, claiming that the provisions of Service Tax Act is not applicable in this matter. The Company had paid Rs 1.24 millions under protest and the same is shown as ‘advance recoverable in cash or kind’ since the matter is pending before the CESTAT and based on legal opinion sought, the management is of the opinion that the Company will have no liability on this account and that no provision is necessary.
h The Company Law Board had passed an order directing Central Government to undertake the investigation under section 237 of the Companies Act, 1956. The Company aggrieved by the order had moved the Bombay High Court and obtained stay on order. The hearing in this matter was completed and Hon’ble Bombay High Court has finally quashed the investigation.
i The Company has given a Corporate guarantee for Term Loan taken by its subsidiary Whistling Woods International Limited from Punjab National Bank.
j Matters in respect of Whistling Woods International Ltd. Income Tax i) Assessment year 2003-04
There are certain additions made in the assessment and department has raised a demand Rs 2,913,501 (including interest Rs 651,159). Aggrieved by the assessment order, the Company had filed an appeal before CIT (Appeal) which has been upheld. The Company has preferred an appeal with the Income Tax Appellate Tribunal on the above order. The Assessing officer has also levied penalty of Rs 2,500,000 and Company has preferred an appeal before CIT (Appeal) against the same. The Company’s management is of the opinion that at this stage no provision is required
ii) Assessment year 2004-05
Certain additions made in the assessment and a demand of Rs 3,478,871 (including interest Rs 738,005) has been raised. Aggrieved by the assessment order, the Company had filed an appeal before CIT (Appeal) which has been upheld. The Company has preferred an appeal with the Income Tax Appellate Tribunal on the above order. The Assessing officer has also levied penalty of Rs 3,000,000 and Company has preferred an appeal before CIT (Appeal) against the same. The Company’s management is of the opinion that at this stage no provision is required
iii) Assessment year 2005-06
Certain additions are made in the assessment and a demand of Rs 524,063 (including interest Rs 106,950) has been raised. Aggrieved by the assessment order, the Company has filed an appeal before the CIT (Appeal). The Company’s management is of the opinion that at this stage no provision is required
iv) Assessment year 2006-07
Certain additions/disallowances are made in the assessment and a demand of Rs 218,147 (including interest of Rs 54,127) has been raised. Aggrieved by the assessment order, the Company has filed an appeal before the CIT (Appeal). The Company’s management is of the opinion that at this stage no provision is required
Others
Public Interest Litigation (‘PIL’) has been filed by Mr. Abdul Hamid Patel & Others alleging that the Maharashtra Film Stage and Cultural Development Corporation Limited (MFSCDCL) has not followed proper procedure while allotting the 20 acre land to the Company. The PIL is admitted and pending before the High Court. However, no injunction/interim relief was granted to the petitioners. In the opinion of the management, the Company has a good chance of wining the case.
In the year 1973-74, the Government of Maharashtra (‘GOM’), as per the scheme, invited applications of plots for development of film industry infrastructure in film city at Goregaon (East), Mumbai. Many applications were received and M/s PDR Videotronics (India) Private Limited (‘PDR’) was one of the applicant. The GOM issued a letter to PDR for allotment of one hectare of land.
Thereafter, MFSCDCL was formed for development of film city and as per the recommendation of Godbole Committee, the above scheme was scrapped. However, before scrapping of the scheme, PDR filed a suit in the High Court demanding specific performance of the scheme. The High Court admitted the suit and same is still pending.
Meanwhile, PDR took out a notice of motion saying that MFSCDCL is carrying out the activities on the allotted land thereby affecting their rights. Since the MFSCDCL didn’t argue and the High Court granted the injuction in favour of PDR.
Thereafter in the year 2003, the contempt petition was filed by PDR alleging that the construction work is being carried out on the said allotted land in violation of injuction. However, subsequently the contempt petition was disposed off by
50
the High Court. PDR took out another notice of motion on the same issue. The High Court refused to grant any relief to PDR and directed that the notice of motion be clubbed with the original suit of PDR against MFSCDCL and same suit to be expedited.
With a view to peacefully resolve the issue, the Company has offered to earmark one hectare of land out of the available free land for a possible assignment to PDR, in case the final decision of the High Court is in the favour of PDR. In the opinion of the management the Company has a good chance of wining the case.
Arrears of dividend on RCPS (Redeemable Cumulative Preference Shares) excluding dividend distribution tax not provided Rs 31,123,287 (2008: Rs 15,123,287)
Amounts payable on account of property tax disputes Rs Nil (2008: Rs 4,405,643)
4 Business segment-wise Report (as per the reporting requirements of AS-17)(Rs in millions)
Current Year Previous Yeara. Revenue
Software Division 1,651.04 1,094.66 Equipment Division 7.30 12.07 Fees from students 162.67 97.32 Others 29.85 37.62
TOTAL 1,850.86 1,241.67 b. Results
Software Division 166.70 208.00 Equipment Division (7.28) (1.99)Fees from students 162.67 97.32 Others 29.85 37.62
TOTAL 351.95 340.96 c. Capital Employed
Software Division 556.07 503.31 Equipment Division 148.48 151.49 Fees from students 106.28 128.69
5 Related Party Transaction
(A) The list of related parties and nature of their relationship is furnished below:
Companies under the same management- Whistling Woods International Ltd. 84.99% - subsidiary Connect.1 Limited 99% - subsidiary Mukta Tele Media Ltd. 99.92% - subsidiary Coruscant Tec Pvt. Limited 51% - subsidiary Mukta Tele Arts Pvt. Ltd. CMD is director
Firms- Mukta Arts Proprietory firm of CMD
Trusts- MAL Employees Welfare Trust Executive Director is settler & One of the Directors is Trustee Directors of the company- Chairman & Managing Director Mr.Subhash Ghai Executive Director Mr.Parvez A. Farooqui Executive Director Mr.Rahul Puri
Non Executive Directors Mr. Anil Harish Mr. Vijay Choraria Mr. Pradeep Guha
Relatives of Directors- Mr. Ashok Ghai Brother of CMD Mrs. Meghana Ghai Puri Daughter of CMD Mr. Siraj Farooqui Brother of Executive Director Mr. Sameer Farooqui Brother of Executive Director Mr. Sajid Farooqui Brother of Executive Director
51
(B) Transactions with and outstanding balances of related parties are furnished below.Volume of transactions during the year
Associates
Rs.
Key management
Personnel
Rs.
Relatives of key
management personnel
Rs.
Total
Rs.
Outstanding Balance
31.03.2009
Rs.Purchase & Other ServicesMukta Arts 1,30,000 - - 1,30,000 60,000 Receiving of services Ashok Ghai - - 18,00,000 18,00,000 - Payment of Salaries Siraj Farooqui - - 19,00,000 19,00,000 - Sameer Farooqui - - 3,77,480 3,77,480 - Sajid Farooqui - - 1,32,999 1,32,999 - Advances recoverable MAL Employees Welfare Trust - - - - 2,05,00,000 Managerial Remuneration Subhash Ghai - 1,56,40,620 - 1,56,40,620 - Parvez A. Farooqui - 19,12,864 - 19,12,864 - Rahul Puri - 19,11,244 - 19,11,244 - Meghana Ghai Puri - 21,54,164 - 21,54,164 -Deposits for Premises taken on lease or otherwise Mukta Arts - - - - 3,00,000 Subhash Ghai 5,00,000 - - 5,00,000 -
6 Calculation of Minority InterestCurrent
YearPrevious
Yeara) Whistling Woods International Ltd.
Paid up value of 15.0015% shares 3,00,03,000 3,00,03,000 Less: 15.0015% of Preliminary Expenses 46,167 69,251
2,99,56,833 2,99,33,749 b) Mukta Tele Media Ltd.
Paid up value of 0.08% shares 400 400 Less: 0.08% of Preliminary Expenses 35 47
365 353 c) Connect.1 Limited
(Formerly known as Mukta Arts International Limited)Paid up value of 1% shares 6,000 6,000 Less: 1% of Preliminary Expenses 35 70
5,965 5,930 d) Red Carpet Films Limited
Paid up value of 49.906% shares - 2,49,530 Less: 49.906% of Preliminary Expenses - 27,748
- 2,21,782 e) Coruscant Tec Pvt. Limited
Paid up value of 49% shares 49,000 - Less: 49% of Preliminary Expenses 1,352 -
47,648 -
Total Minority Interest 3,00,10,810 3,01,61,814
7 The consolidated financial statements have been prepared in accordance with the Accounting Standard ( AS-21) “Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India, except for those income and expenses allocated to particular films.
8 Previous year figures have been regrouped wherever necessary.
As per our report of even date For and on behalf of the boardFor SHAMIT MAJMUDAR ASSOCIATES SUBHASH GHAI PARvEz A. FAROOqUI Chartered Accountants Chairman & Managing Director Executive Director SHAMIT MAJMUDAR RAHUL PURI vIJAY CHORARIA Proprietor Executive Director Director Membership No. 010595Place : Mumbai RAvI POPLAI Date : 31st July 2009 Company Secretary
52
WHISTLING WOODS INTERNATIONAL LImITED
DIRECTORS’ REPORT
Dear Members of Whistling Woods International Ltd,Your Directors take pleasure in presenting the Eighth Annual Report and the Audited Statement of Accounts for the Accounting year ended 31st March 2009.
OperationsThe institute operated successfully for the third year in succession. The revenues from student fees increased by 56%. The institute held its second Convocation on 18th July 2009 in which 96 successful students were awarded Diplomas.
The Gross Block of Fixed Assets of the Company as on 31.3.2009 excluding capital work in progress was placed at Rs 670 million as compared to previous year figures of Rs 658 millions, which included Rs 30 million towards the right to use of the land as per agreement with Maharashtra Film, Stage and Cultural Development Corporation Limited, in lieu of which shares of Rs 30 million have been allotted to them. The Capital Work in progress as at 31st March 2009 stood at Rs 1.46 million.
During the year the Company recorded an income of Rs 172 million and the total loss after tax is Rs 97 million. Being the third year of operation, the company is still in investment mode and the losses have to be seen as investments. The expense includes a significant amount of Rs 69.9 million as depreciation. The institute has enrolled two batches during the year and is operating at about 75% occupancy. It is expected to reach optimum capacity utilization by the fourth year.
Share CapitalThe share capital remain the same during the year under review.
DirectorsMr. Vijay Choraria retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.
Mrs. Meghna Ghai Puri has been re-appointed as Whole Time Director (designated as President) of the Company w.e.f. 1st July, 2009 subject to approval of members in the Annual General Meeting.
Auditor’s reportThe Management’s explanation to the Auditors observation in their report is detailed herein below:
1) The Auditors have observed that no provision has been made in the Financial Statements for the Income Tax Liability for the Assessment year 2003-04, 2004-05, 2005-06 and 2006-07. Management has capitalized all costs till commencement of Project. In case interest Income is considered, as per the C.I.T Appellate Order, then corresponding administrative expenses for the relevant period also needs to be considered which will leave no taxable Income. Management has gone in appeal as only the income has been considered disallowing capitalization of the same.
2) Fixed assets register were prepared and presented for the perusal of the Auditors; however it was observed by Auditors that process of purchase and recording of assets needs to be strengthened. Management has introduced necessary controls to streamline the process.
3) The Institute is presently working at 75% of its optimum capacity in line with the projections prepared at the time of commencement of the Institute. The losses include large amounts of depreciation provided. Management is hopeful of wiping the accumulated losses over the next few years as the optimum capacity utilization is achieved.
4) During the project development stage, for effective utilization of funds, the short term funds available with the Company have been utilized partly for project related expenditure.
5) Due to temporary funds constraint, there has been slight delay in repayment of loan to Punjab National Bank.
Directors’ Responsibility Statement [Section 217 (2AA)]The Directors confirm that:
• in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
• the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the company for the year;
• the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
• the Annual accounts have been prepared on a going concern basis;
Auditors:M/s BSR & Co. Chartered Accountants retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment as the Auditors of the Company.
53
Statutory Disclosures:Particulars of employees required under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, are given in Annexure I.
Particulars regarding Foreign Exchange earnings and outgo required under Section 217 (1) (e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 are given in Schedule 28&29 (Statement of Significant Accounting Policies and Notes forming Part of Accounts) of this report.
The Particulars regarding disclosure about conservation of energy, technology absorption are not applicable to the Company.
Acknowledgements The Board of Directors wishes to thank and record its appreciation to the Government of Maharashtra, The Maharashtra Film Stage and Cultural Development Corporation Limited, Film Fraternity, Bankers and Media who have extended and are expected to extend their continued support of the Company.
Your Directors thank all the Governing Council Members, Advisory Board Members, employees and Faculty members of the Company for their dedicated services to the Company.
On behalf of the Board of Directors
Place: Mumbai Subhash Ghai
Dated: 28th July 2009 Chairman
Annexure – I
ANNEXURE TO DIRECTORS’ REPORTInformation as per Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Director’s Report:
Name Designation Qualification Age Date of Joining Experience Gross Remuneration
Previous Employment
Kurt Inderbitzin Dean M.B.A (Fin)-Chicago,
M.F.A- (Master in Fine Arts-New Orleans)
45 years 1.02.2006- 10-05-2008
21 years 9,47,828 Professor at University of La Verne
John Jerome Lee
Dean Masters in Fine Arts, Brooks Institute, Santa Barbara.
63 Years 08-09-2008 33 Years 18,39,085 CEO of icommunications Dynamics, LLC.
Notes:
Remuneration includes salary and other allowances.
54
WHISTLING WOODS INTERNATIONAL LImITED
AUDITORS’ REPORT
To the Members of Whistling Woods International Limited
We have audited the attached Balance Sheet of Whistling Woods International Limited (‘the Company’) as at 31 March 2009 and the related Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from mate-rial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a rea-sonable basis for our opinion.
1 As required by the Companies (Auditor’s Report) Order, 2003 (‘the Order’), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
2 As more fully explained in Schedule 21, the Company has disputed the demand from income tax authorities ag-gregating to Rs 12.63 million (including interest Rs 1.55 million and penalty Rs 5.50 million) for the financial years ended 31 March 2003 (assessment year 2003-04), 31 March 2004 (assessment year 2004-05), 31 March 2005 (as-sessment year 2005-06) and 31 March 2006 (assessment year 2006-07) and the matter is subjudice. No provision has been made in the financial statements for such liabilities. The impact of non provision on the loss for the year and net assets position as at year end is presently not ascertainable pending final adjudication.
3 Further to our comments in the Annexure referred to above, we report that:
a. we have obtained all the information and explanations which to the best of our knowledge and belief were neces-sary for the purposes of our audit;
b. in our opinion, proper books of account as required by law has been kept by the Company so far as appears from our examination of these books;
c. the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
d. in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (‘the Act’);
e on the basis of written representations received from the directors of the Company as at 31 March 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and
f. in our opinion, except for the effects of any adjustments that may arise from the matters stated in paragraph 2 above, and to the best of our information and according to the explanations given to us, the said financial state-ments give the information required by the Companies Act, 1956 in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2009;
(ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and
(iii) in case of the Cash Flow Statement ,of the cash flows of the Company for the year ended on that date.
For B S R & Co. Chartered Accountants
Place: MumbaiDate: 28th July 2009
Akeel MasterPartner
Membership No: 046768
55
Annexure to Auditors’ Report- 31 March 2009(Referred to in our report of even date)
i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets were physically verified during the period and no material discrepancies were noticed on such verification.
(c) There is no disposal of fixed assets during the year. Thus, paragraph 4 (i) (c) of the Order is not applicable.
ii) The Company is a service company, primarily rendering training to the students. Accordingly it does not hold any physi-cal inventories. Thus, paragraph 4(ii) of the Order is not applicable.
iii) (a) The Company has not granted any loans to companies/ firms/ other parties covered in the register maintained under Section 301 of the Act.
(b) The Company has taken loans from a company covered in register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs 222.50 million and the year end balance of such loans was Rs 218.50 million.
(c) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from a com-pany listed in the register maintained under Section 301 of the Act are not prima facie prejudicial to the interest of the Company.
(d) In case of loans taken from a company listed in the register maintained under Section 301 of the Act, no specific terms of repayment has been specified and repayments are being made regularly on demand.
iv) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regards to sale of services except with respect to controls over purchase and recording of fixed assets which further need to be strengthened. The Company’s nature of operations does not involve purchase of inventory and sale of goods.
v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or ar-rangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 Lakhs with a party dur-ing the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.
vi) The Company has not accepted any deposit from the public.
vii) In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.
viii) The Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act for any of the services rendered by the Company.
(ix) (a) According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted /accrued in the books of accounts in respect of undisputed statutory dues including Provident fund, Income tax, Sales tax/ VAT, Service tax, and other material statutory dues have been generally regularly deposited by the Company with appropriate authorities. except for an instance of delay in payment of fringe benefit tax during the year (amount deposited subsequently with next installment). As explained to us, the Company did not have any dues on account of Investor Education and protection fund, Employees’ State Insur-ance, Excise duty and Wealth tax.
There were no dues on account of Cess under Section 441A of the Act since the date from which the aforemen-tioned section comes into force has not been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Income tax, Sales tax/ VAT, Service tax, Custom duty and other material statutory dues were in arrears as at 31 March 2009 for a period of more than six months from the date they became payable.
56
WHISTLING WOODS INTERNATIONAL LImITED
(b) According to the information and explanations given to us, the following dues of income-tax have not been depos-ited by the Company on account of disputes:
Nature of the Statue
Nature of the Dues
Amount (including inter-est)
Period to which the amount relates(Assessment Year)
Forum for which the dispute is pending
Income tax Act, 1961
Assessment dues 974,691 2003-04 Income Tax Appellate Tribunal
Penalty
Assessment dues
Penalty
2,500,000
1,739,436
3,000,000
2003-04
2004-05
2004-05
CIT Appeals
Income Tax Appellate Tribunal
CIT Appeals
Assessment dues
Assessment dues
106,950
218,147
2005-06
2006-07
CIT Appeals
CIT Appeals
x) The Company has accumulated losses at the end of the financial year exceeding 50% of its net worth. The company has incurred cash losses in the current financial year and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanation given to us, the Company has not defaulted in repay-ment of dues to its banker, however, there have been instances of delays in payment of principal amount which are subsequently paid. The Company did not have any outstanding debentures or dues to any financial institutions during the year.
Nature of default Principal amount Due date Date of payment Delayed daysPrincipal 7,500,000 07 June 2008 09 June 2008 2Loan amount 7,500,000 07 September 2008 03 October 2008 26
7,500,000 07 December 2008 17 January 2009 417,500,000 07 March 2009 20 March 2009 13
xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities.
xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or nidhi/ mutual benefit fund/ society.
xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.
xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.
xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they are raised.
xvii) According and information and explanations given to us and on overall examination of the balance sheet of the com-pany, we report that the Company has used funds raised on short term for long term investments. The company has used short term credit from the suppliers aggregating to Rs 125.59 million to fund fixed assets and operating loss.
xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under section 301 of the act.
xix) The Company did not have any outstanding debentures during the year
xx) The Company has not raised any money by public issues during the year.
xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.
For B S R & Co.Chartered Accountants
Place: MumbaiDate: 28th July 2009
Akeel MasterPartner
Membership No: 046768
57
BALANCE ShEET AS AT 31 MARCh 2009(Currency: Indian rupees)
Schedule 2009 2008
SOURCES OF FUNDS
Shareholders’ funds
Share capital 3 400,000,000 400,000,000
Loan funds
Secured loans 4 74,733,551 105,344,818
Unsecured loans 5 218,500,000 176,500,000
693,233,551 681,844,818
APPLICATION OF FUNDS
Fixed assets 6
Gross block 670,619,844 658,378,264
Accumulated depreciation/amortisation 218,776,937 148,778,247
Net block 451,842,907 509,600,017
Add: Capital work in progress (including capital advances) 1,465,869 5,444,259
453,308,776 515,044,276
Deferred tax asset (net) 7 - -
Current assets, loans and advances
Sundry debtors 8 4,173,353 10,617,442
Cash and bank balances 9 361,428 5,879,770
Loans and advances 10 17,505,909 17,977,968
22,040,690 34,475,180
Less: Current liabilities and provisions
Current liabilities 11 145,423,805 132,882,842
Provisions 12 2,811,582 3,772,798
Net current assets (126,194,698) (102,180,459)
Miscellaneous expenditure (to the extent not written off or adjusted)
13307,750 461,627
Profit and loss account 365,811,723 268,519,375
693,233,551 681,844,818
Significant accounting policies 2
Notes to the accounts 20-34
The schedules referred to above form an integral part of this balance sheet.
As per our report attached For and on behalf of the Board
For B S R & CO. SUBhASh GhAI MEGhNA GhAI PURI Chartered Accountants Chairman Director
AkEEL MASTER MANMOhAN ShETTY PRADEEP GUhAPartner Director DirectorMembership No: 046768 DIShA BALChANDANI Company SecretaryPlace: MumbaiDate: 28th July 2009
58
WHISTLING WOODS INTERNATIONAL LImITED
PROFIT AND LOSS ACCOUNT FOR ThE YEAR ENDED 31 MARCh 2009(Currency: Indian rupees)
Schedule 2009 2008
Income
Fees from students 14 162,671,566 104,099,191
Other income 15 9,862,045 4,783,453
172,533,611 108,882,644
Expenditure
Personnel costs 16 25,390,727 25,877,932
Operating and administrative expenses 17 144,811,145 97,686,538
Depreciation/amortisation 6 69,998,689 85,720,792
Finance charges 18 29,011,725 27,292,760
269,212,286 236,578,022
(Loss) before tax and prior period expenses (96,678,675) (127,695,378)
Prior period expenses 19 95,052 89,071
(Loss) before tax (96,773,727) (127,784,449)
Less : Provision for tax
Fringe benefits tax 518,622 607,000
(Loss) after tax (97,292,349) (128,391,449)
Accumulated balance brought forward (268,519,374) (140,127,925)
Balance carried forward to balance sheet (365,811,723) (268,519,374)
Earnings per share of face value of Rupees 1,000 each 32 (486.46) (641.96)
Significant accounting policies 2
Notes to the accounts 20-34
The schedules referred to above form an integral part of this profit and loss account.
As per our report attached For and on behalf of the Board
For B S R & CO. SUBhASh GhAI MEGhNA GhAI PURI Chartered Accountants Chairman Director
AkEEL MASTER MANMOhAN ShETTY PRADEEP GUhAPartner Director DirectorMembership No: 046768 DIShA BALChANDANI Company SecretaryPlace: MumbaiDate: 28th July 2009
59
CASh FLOW STATEMENT FOR ThE YEAR ENDED 31 MARCh 2009(Currency: Indian Rupees)
2009 2008 Cash flows from Operating activitiesNet loss before tax and prior period expenses (96,678,675) (127,207,133)Adjustments:Prior period expenses (95,052) (577,317)Depreciation / amortisation for the year 69,998,689 85,720,793Preliminary expenses written-off 153,877 153,877Interest and financial expenses 29,011,725 27,292,760Provision for doubtful debts 96,433 884,147Interest income (3,775) (38,367)Operating profit before working capital changes 2,483,222 (13,771,239)Decrease / (Increase) in sundry debtors 6,347,656 3,745,689Decrease in loans and advances 3,785,773 3,295,382Increase in current liabilities 19,212,441 12,304,026(Decrease) / Increase in provisions (1,479,838) 511,495Cash generated from operations 30,349,255 (1,406,025)Income tax paid (3,313,714) (2,337,501)Net cash generated from operating activities 270,35,541 (3,743,526)Cash flows from investing activitiesPurchase of fixed assets (1,82,46,429) (7,49,58,206)Interest received 3,775 38,367Net cash generated / (used) in investing activities (18,242,654) (74,919,839)Cash flows from financing activitiesCapital inflow - 200,000,000Unsecured loans received 92,000,000 105,588,808Secured loans repaid 30,611,266 (15,783,467)Unsecured loans repaid (50,000,000) (179,088,809)Interest and financial expenses paid 25,699,964 (30,882,254)Net cash generated/ (used) from financing activities (14,311,230) 79,834,278 Net increase in cash and cash equivalents (5,518,343) 1,170,913Cash and cash equivalents at the beginning of the year 5,879,770 4,708,857Cash and cash equivalents at the end of the year 361,427 5,879,770Note:Cash and cash equivalents at the period end comprises:Cash on hand 39,167 39,435Balances with scheduled banks- in current account 297,261 5,815,335- in term deposit account 25,000 25,000
361,428 5,879,770
Th Company follows indirect method as prescribed in AS-3 Cash Flow Statements.The schedules referred to above form an integral part of this balance sheet.
As per our report attached For and on behalf of the Board
For B S R & CO. SUBhASh GhAI MEGhNA GhAI PURI Chartered Accountants Chairman Director
AkEEL MASTER MANMOhAN ShETTY PRADEEP GUhAPartner Director DirectorMembership No: 046768 DIShA BALChANDANI Company SecretaryPlace: MumbaiDate: 28th July 2009
60
WHISTLING WOODS INTERNATIONAL LImITED
Schedules to the financial statements for the year ended 31 March 2009(Currency: Indian rupees)
1. Background Whistling Woods International Limited (‘the Company’) was incorporated in 2001 and is a subsidiary of Mukta Arts
Limited (‘MAL’ or ‘the holding company’). MAL holds 85% of the equity share capital of the Company. The Company is an education, research and training institute and imparts training in various skills related to films, television and media industry.
2. Summary of significant accounting policies 2.1 Basisofpreparationoffinancialstatements These financial statements have been prepared and presented under the historical cost convention, on the
accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and the accounting principles generally accepted in India and comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision in accounting standard requires change in accounting policy hitherto in use. The management evaluates all recently issued and revised accounting standards on an ongoing basis
2.2 Useofestimates The preparation of the financial statements in conformity with generally accepted accounting principles (‘GAAP’)
in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements, and the reported amount of revenue and expenses during the reporting period. The estimates and assumptions used in the accompanying financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates used in preparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods.
2.3 Going concern The Company has accumulated losses exceeding 50% of its equity as at 31 March 2009. However, these
financial statements have been prepared on a going concern basis as the Company’s management believes that, based on the projected operating plans and the operating and financial support from its principal shareholder, the Company will be able to operate as a going concern in the foreseeable future. These financial statements do not include any adjustments relating to the recoverability and classification of the carrying amounts of assets or to the amounts and classification of liabilities that may be necessary if the entity is unable to continue as a going concern.
2.4 Fixed assets and depreciation Tangible assets Tangible fixed assets are carried at cost of acquisition or construction or revalued amount less accumulated
depreciation and impairment loss, if any. Cost includes inward freight, duties, taxes, and expenses incidental to acquisition/construction of the fixed assets up to the time the assets are ready for intended use.
Intangible assets Intangible assets comprise of intellectual property rights (‘IPR’) in course curriculum, diploma films and library of
books. An intangible asset is recognized if, and only if, it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise.
IPR in course curriculum consists of expenses incurred on internal development of course curriculum. The courseware has been submitted to Registrar of Copyrights for registration.
Depreciation/amortisation Depreciation on tangible fixed assets is provided pro-rata to the period of use, using the written down value
method (‘WDV’) at rates prescribed in Schedule XIV to the Companies Act, 1956. Tangible assets individually costing up to Rs 5,000 are depreciated fully in the year of capitalisation. The amortisation of intangible assets is provided pro-rata on straight line basis over the useful life of intangibles
determined by the management as mentioned below:
Intangible assets Estimated useful lifeIntellectual property rights (course curriculum) 5 yearsLibrary (books and copyrights) 1 yearDiploma film rights refer Note 1
Note 1: The individual film forecast method is used to amortise the cost of diploma films. Under this method, costs are amortized in the proportion that gross revenues realized bear to management’s estimate of the total gross revenues expected to be received. If estimates of the total revenues and other events or changes in circumstances indicate that the realisable value of a right is less than its unamortised cost, a loss is recognised for the excess of unamortized cost over the film right’s realisable value.
61
Schedules to the financial statements for the year ended 31 March 2009(Currency: Indian rupees)
2. Summary of significant accounting policies (Continued) 2.5 Impairment
In accordance with AS 28 on ‘Impairment of Assets’, where there is an indication of impairment of the Company’s assets, the carrying amounts of the Company’s assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of the asset (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or the cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the profit and loss account or against revaluation surplus, where applicable.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from their disposal at the end of their useful life.
2.6 Retirement benefits
(a) Definedcontributionplan
The Company makes contribution towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Both the employee and the Company make monthly contribution equal to a specified percentage of the covered employee’s salary. The monthly contributions payable to the Provident fund are charged to the profit and loss account as incurred.
(b) Definedbenefitplans
The Company provides for gratuity using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the profit and loss account in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.
The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from the calculation is limited to the present value of available refunds and reductions in future contributions to the scheme. The gratuity plan is managed by LIC to which contributions are made by the Company.
(c) Short-termemployeebenefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. These benefits include compensated absences such as paid annual leave and sickness leave. Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.
2.6 Retirement benefits(Continued)
(d) OtherLongtermemployeebenefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the Balance Sheet date. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the Balance Sheet date.
2.7 Revenue recognition
Revenue from tution fee is recognized over the period of the course. Revenue from acceptance and admission fees is recognized at the time of acceptance/admission of the student. Revenue from sale of prospectus and other materials/goods is recognized on delivery to the student.
Facilitation charges include revenue from provision of hostel and other related facilities to the students and are recognized on a time proportionate basis.
Revenue from hire of premises and equipments is recognized over the period of hire. Interest income is recognized on a time proportion basis.
2.8 Foreign currency transactions
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the period are recognised in the profit and loss account of the period.
62
WHISTLING WOODS INTERNATIONAL LImITED
Monetary assets and liabilities in foreign currency which are outstanding as at the period-end are translated at the period-end at the closing exchange rate and the resultant exchange differences are recognised in the profit and loss account.
2.9 Taxes on income
Income tax expense comprises of current tax expense, fringe benefits tax and deferred tax expense or credit.
Current taxes
Provision for current income-tax is recognized in accordance with the provisions of the Income-tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowance and exemptions.
2.9 Taxes on income (Continued)
Deferred taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Deferred tax assets are reassessed for the appropriateness of their respective carrying values at each balance sheet date.
Fringe benefits tax
Provision for Fringe Benefits Tax is made on the basis of the applicable rates on the taxable value of eligible expenses of the Company as prescribed under the Income-tax Act, 1961.
2.10 Provisions and contingencies
Provision is recognized in the balance sheet when the Company has a present obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and reliable estimation can be made of the amount required to settle the obligation. Contingent liabilities arising from claims, litigation, assessment, fines, penalties etc. are disclosed when there is a possible obligation or a present obligation as a result of a past event where it is not probable that an outflow of economic benefits will be required to settle the obligation, and the amount can be reasonably estimated. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
2.11 Earnings per share (‘EPS’)
Basic EPS is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period except where the results would be anti dilutive.
2.12 Borrowing costs
Borrowing costs directly attributable to the acquisition / construction of qualifying assets are capitalised as part of the cost of those assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.
2.13 Operating lease
Lease payments under operating lease are recognised as an expense in the statement of profit and loss account on a straight line basis over the lease term.
2.14 Miscellaneous expenditure
Preliminary expenses and expenses on underwriting or subscription of shares are amortised on a straight line-basis over a period of ten years.
63
SChEDULES TO ThE FINANCIAL STATEMENTS AS AT 31 MARCh 2009
2009 2008
3. Share capital
Authorised
200,000 (2008: 200,000) equity shares of Rupees 1,000 each 200,000,000 200,000,000
200,000 (2008: 200,000) 8% redeemable cumulative preference shares of Rupees 1,000 each 200,000,000 200,000,000
400,000,000 400,000,000
Issued , subscribed and paid-up
200,000 (2008: 200,000) equity shares of Rupees 1,000 each, fully paid-up 200,000,000 200,000,000
200,000 (2008: 200,000) 8% redeemable cumulative preference shares of Rupees 1,000 each, fully paid-up 200,000,000 200,000,000
400,000,000 400,000,000
Of the above:
(a) 30,000 (2008: 30,000) equity shares have been alloted as fully paid-up, pursuant to a contract without payment being received in cash.
(b) 169,997 (2008: 169,997) equity shares are held by Mukta Arts Limited, the holding company.
(c ) 200,000 (2008:200,000) 8% redeemable cumulative preference shares are held by Mukta Arts Limited, the holding company.
These preference shares may be redemed at any time on or after 21 June 2012 and on prior to 21 June 2027.
4. Secured loans
Term loan from bank 74,643,445 104,643,445
( Secured against hypothecation of building and machinery, the term loans are repayable in 16 quarterly
installments, commencing on 7 December 2007. The amount repayable within one year is Rs. 30 million (2008 : Rs. 15 million).
Vehicle finance loan 90,106 701,373
( Secured against hypothecation of related vehicles)
The amount repayable within one year is Rs 90,710 (2008: Rs 611,267)
74,733,551 105,344,818
5. Unsecured loans
Borrowings from holding company - Mukta Arts Limited 218,500,000 176,500,000
(No terms of repayment have been specified)
218,500,000 176,500,000
64
WHISTLING WOODS INTERNATIONAL LImITED
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65
SChEDULES TO ThE FINANCIAL STATEMENTS AS AT 31 MARCh 2009(Currency: Indian rupees)
2009 2008
7. Deferred tax assets(net) -
Deferred tax liabilities
Arising on account of timing difference in:
Depreciation/ amortisation 5,732,224 15,069,568
Deferred tax assets
Arising on account of timing difference in:
Section 43B disallowances 833,569 1,231,435
Unabosrbed depreciation as per Income tax Act, 1961 4,898,655 13,838,133
- -
Deferred tax assets on account of unabsorbed depreciation has been recognised only to the extent of the deffered tax liabiliy, as this amount is considered to be virtually certain of realisation.
8. Sundry debtors
Unsecured
Debts outstanding for a period exeeding six months
- considered good 774,386 1,717,096
- considered doubtful 980,580 884,147
Other debts, considered good 3,398,967 8,900,346
5,153,933 11,501,589
Less: Provsion for doubtful debts 980,580 884,147
4,173,353 10,617,442
9. Cash and bank balances
Cash in hand 39,167 39,435
Balances with scheduled banks
- in current account 297,261 5,815,335
- in term deposit account 25,000 25,000
361,428 5,879,770
10. Loans and advances
(Unsecured and considered good)
Advances recoverable in cash or in kind or for value to be received 674,650 5,013,585
Service tax credit receivable 2,733,886 1,002,311
Deposits 3,923,760 5,102,173
Advance tax and tax deducted at source 9,047,991 6,252,899
Fringe benefits-tax 1,125,622 607,000
17,505,909 17,977,968
Amounts recoverable from Companies under the same management
Name of the Company: Mukta Arts LimitedAdvances recoverable include balances recoverable from company under the same management Rs Nil (2008: Rs Nil). Maximum amount due at any time during the year Rs 993,187 (2008: Rs 993,160)). Whistling Woods International Limited
66
WHISTLING WOODS INTERNATIONAL LImITED
SChEDULES TO ThE FINANCIAL STATEMENTS AS AT 31 MARCh 2009(Currency: Indian rupees)
2009 2008
11. Current liabilities
Sundry creditors for goods and services (Refer schedule No 27) 57,196,651 47,372,730
Unearned revenue 38,420,312 39,932,069
Deposit received 30,000,000 30,000,000
Interest accrued but not due on unsecured loans 13,957,242 10,321,697
Interest accrued but not due on secured loans 701,771 1,025,557
Other liabilities 5,147,829 4,230,789
145,423,805 132,882,842
12. Provisions
Fringe benefits-tax 1,795,722 1,277,100
Gratuity - 1,431,131
Leave encashment 1,015,860 1,064,567
2,811,582 3,772,798
13. Miscellaneous expenditure (to the extent not written off or adjusted) 307,750 461,627
307,750 461,627
14. Fees from students
Admission fees/acceptance fees 34,600,000 15,000,000
Tution fees 115,530,683 82,016,317
Sale of prospectus/application forms /re-examination fees 720,283 306,339
Facililitaion charges recovered from students 11,820,600 6,776,535
162,671,566 104,099,191
15. Other income
Interest (tax deducted at source Rs nil (2008 : Rs 5,673) 3,775 38,367
Hire charges 5,313,322 3,907,996
Miscellaneous income 4,544,948 837,090
9,862,045 4,783,453
16. Personnel expenses
Salaries, bonus and allowances 23,334,406 23,324,931
Gratuity (500,250) 369,992
Leave encashment 521,853 579,171
Contributions to provident and other funds 1,116,157 519,474
Staff welfare expenses 918,561 1,084,364
25,390,727 25,877,932
67
SChEDULES TO ThE FINANCIAL STATEMENTS AS AT 31 MARCh 2009(Currency: Indian rupees)
2009 2008
17. Operating and administrative expensesRent 13,735,358 13,650,400 Travelling and conveyance 4,446,207 3,154,380 Telephone 3,616,916 4,057,674 Electricity expenses 16,609,623 10,712,841 Repairs and maintenance- building 7,956,710 5,838,760 Printing and stationery 2,555,184 1,533,010 Legal and professional fees ( includes expenses of earlier years Rs 920,000 ,(2008 : 488,246)) 40,127,500 29,765,799
Insurance 852,719 561,873 Courier and postage 179,161 77,654 Advertisement and publicity expenses 11,645,355 7,967,215 Laptop and other course material purchased or written off 1,693,330 584,500 Motor car expenses 747,786 878,654 Auditors’ remuneration ( Refer schedule 31) 386,050 413,215 Rates and taxes ( includes expenses of earlier years Rs 737,667, 2008: Rs nil)) 9,676,059 5,026,422
Security charges 5,415,832 4,476,296 Sets/student practicals 14,280,159 2,268,293 Capital work-in progress written off 4,295,255 - Preliminary expenses written off 153,877 153,877 Scholarships awards 2,429,687 1,428,125 Bad debts written off 79,724 2,337,757 Provision for doubtful debts 96,433 884,147 Advances given written off - 564,500 Convocation ceremony 1,809,898 - Prizes 251,650 100,861 Miscellaneous expenses 1,770,672 1,250,284
144,811,145 97,686,538
18. Finance chargesInterest On term loans from banks 10,898,909 13,808,923 On term loans from others 18,046,603 13,346,838
28,945,512 27,155,761 On other loans for vehicles 33,961 93,724
28,979,473 27,249,485 Financial expensesLoan processing charges and other bank charges 32,252 43,275
29,011,725 27,292,760 19. Prior period expenses
Security expenses - 49,531 Miscellaneous expenses 61,945 39,540 Film festival expenses 2,380 - Insurance 30,727 -
95,052 89,071
68
WHISTLING WOODS INTERNATIONAL LImITED
20. Capital commitments The estimated amount of contracts (net of capital advance) remaining to be executed on capital account and not
provided for at 31 March 2009 aggregate Rs 1,999,012 (2008: Rs 11,459,263).21. Contingencies Income tax • Assessment year 2003-04
There are certain additions made in the assessment and department has raised a demand Rs 2,913,501 (including interest Rs 651,159). Aggrieved by the assessment order, the Company had filed an appeal before CIT (Appeal) which has been upheld. The Company has preferred an appeal with the Income Tax Appellate Tribunal on the above order. The Assessing officer has also levied penalty of Rs 2,500,000 and Company has preferred an appeal before CIT (Appeal) against the same. The Company’s management is of the opinion that at this stage no provision is required.
• Assessment year 2004-05
Certain additions made in the assessment and a demand of Rs 3,478,871 (including interest Rs 738,005) has been raised. Aggrieved by the assessment order, the Company had filed an appeal before CIT (Appeal) which has been upheld. The Company has preferred an appeal with the Income Tax Appellate Tribunal on the above order. The Assessing officer has also levied penalty of Rs 3,000,000 and Company has preferred an appeal before CIT (Appeal) against the same. The Company’s management is of the opinion that at this stage no provision is required.
• Assessment year 2005-06
Certain additions are made in the assessment and a demand of Rs 524,063 (including interest Rs 106,950) has been raised. Aggrieved by the assessment order, the Company has filed an appeal before the CIT (Appeal). The Company’s management is of the opinion that at this stage no provision is required
• Assessment year 2006-07
Certain additions/disallowances are made in the assessment and a demand of Rs 218,147 (including interest of Rs 54,127) has been raised. Aggrieved by the assessment order, the Company has filed an appeal before the CIT (Appeal). The Company’s management is of the opinion that at this stage no provision is required.
Others Public Interest Litigation (‘PIL’) has been filed by Mr. Abdul Hamid Patel & Others alleging that the Maharashtra
Film Stage and Cultural Development Corporation Limited (MFSCDCL) has not followed proper procedure while allotting the 20 acre land to the Company. The PIL is admitted and pending before the High Court. However, no injunction/interim relief was granted to the petitioners. In the opinion of the management, the Company has a good chance of wining the case.
In the year 1973-74, the Government of Maharashtra (‘GOM’), as per the scheme, invited applications of plots for development of film industry infrastructure in film city at Goregaon (East), Mumbai. Many applications were received and M/s PDR Videotronics (India) Private Limited (‘PDR’) was one of the applicant. The GOM issued a letter to PDR for allotment of one hectare of land.
Thereafter, MFSCDCL was formed for development of film city and as per the recommendation of Godbole Committee, the above scheme was scrapped. However, before scrapping of the scheme, PDR filed a suit in the High Court demanding specific performance of the scheme. The High Court admitted the suit and same is still pending.
Meanwhile, PDR took out a notice of motion saying that MFSCDCL is carrying out the activities on the allotted land thereby affecting their rights. Since the MFSCDCL didn’t argue the High Court granted the injuction in favour of PDR.
Thereafter in the year 2003, the contempt petition was filed by PDR alleging that the construction work is being carried out on the said allotted land in violation of injuction. However, subsequently the contempt petition was disposed off by the High Court. PDR took out another notice of motion on the same issue. The High Court refused to grant any relief to PDR and directed that the notice of motion be clubbed with the original suit of PDR against MFSCDCL and same suit to be expedited.
With a view to peacefully resolve the issue, the Company has offered to earmark one hectare of land out of the available free land for a possible assignment to PDR, in case the final decision of the High Court is in the favour of PDR. In the opinion of the management the Company has a good chance of wining the case.
Arrears of dividend on RCPS (Redeemable Cumulative Preference Shares) excluding dividend distribution tax not provided Rs 31,123,287 (2008: Rs 15,123,287)
Amounts payable on account of property tax disputes Rs Nil (2008: Rs 4,405,643)
69
22. Managerial remuneration2009 2008
Salaries, bonus and allowances 1,756,000 1,564,000Contribution to provident and other fund 144,000 160,200Perquisites 254,164 219,079Total 2,154,164 1,943,279
Computation of net profits in accordance with the relevant provisions of the Companies Act, 1956 has not been disclosed as no commission is payable to the Director. The amount does not include gratuity and leave encashment benefits, which are actuarially determined on an overall basis for the Company and individual information in respect of the Director is not available.
23. Related party disclosures (A) Related parties and their relationship:
Sr. No Category of related parties Names
I Related parties where control existsHolding company Mukta Arts Limited
II Related parties with whom transactions have taken place during the year
Enterprise over which key managerial person along with the relatives exercises significant influence
Mukta Tele Arts Private Limited.
III key managerial personnel Mrs. Meghana Ghai Puri (Whole time director)
(B) Transactions with related parties Particulars holding
Company Enterprise over
which key managerial person along with the
relatives exercises significant influence
key managerial personnel
Total
Loan received 92,000,000(105,588,809)
-(-)
-(-)
92,000,000(105,588,809)
Repayment of loan 50,000,000(179,088,809)
-(-)
-(-)
50,000,000(179,088,809)
Advance received/ reimbursement of exp
1,253,081(1,340,884)
-(-)
-(-)
1,253,081(1,340,884)
Payment of interest on loan 1,80,46,603(13,345,872)
-(-)
1,80,46,603(13,345,872)
Security Deposit refunded -(6,300,000)
- (6,300,000)
Remuneration paid (Refer Schedule 22)
-(-)
-(-)
2,154,164(1,943,279)
2,154,164(1,943,279)
Corporate guarantees given on behalf of the Company
120,000,000(120,000,000)
120,000,000(120,000,000)
Issue of RCPS -(200,000,000)
- (200,000,000)
(C) Balances with related parties: Particulars holding Company Enterprise over
which key managerial person along with the
relatives exercises significant influence
key managerial personnel
Total
Unsecured Loan 218,500,000(176,500,000)
-(-)
-(-)
218,500,000(176,500,000)
Interest accrued but not due
13,957,242(10,321,697)
-(-)
-(-)
13,957,242(10,321,697)
Deposit30,000,000
(30,000,000) 30,000,000
(30,000,000)
Note: - Previous Year Figures are given within brackets.
70
WHISTLING WOODS INTERNATIONAL LImITED
24. The Company is engaged in imparting training in various skills related to films, television and media field which is the primary business segment. The Company does not have any exports. The Company has only one reportable business segment, which is imparting training in various skills related to films, television and media and only one reportable geographical segment which is India. Accordingly, the segment information as required by the Accounting Standard 17 on Segment Reporting has not been separately disclosed.
25. The Company is obligated under non-cancellable leases primarily for premises. The future minimum lease payments in respect of non-cancellable operating lease are as follows:-
Period 2009 2008Amount due within one year from the balance sheet date - 4,798,463Amount due in the period between one year and five years - 1,471,500Amount due after five years - -Total - 6,269,963
Lease rent of Rs.13, 735,358 (2008 Rs 13,650,400) has been included under ‘Rent’ in Profit and Loss Account. Of the above the non cancellable portion is Rs 4,798,463 (2008: Rs 4,021,000)
26. Disclosures in respect of the defined benefit plans
Gratuity plan
The following table sets out the status of the gratuity plan as required under AS 15.
Reconciliation of opening and closing balances of the present value of the defined benefit obligation and fair value of plan assets:Particulars 2009 2008Change in present value of obligationsObligations at beginning of the year 791,500 -Service cost 282,968 -Interest cost 82,827 -Actuarial (gain)/loss (258,440)Benefits paid (7,788) -Obligations at the end of the period 891,067 791,500Change in plan assetsFair value of plans assets at beginning of the year, - -Expected return on plan assetsActuarial (gain)/loss - - Contributions by employer 906,145 -Benefits paid (7,788) -Fair value of plans assets at end of the period 898,357 - Actual return on plan assetsExpected return on plan assets - -Actuarial gain / (loss) on plan assets - -Actual return on plan assetsReconciliation of present value of the obligation and the fair value of plan assetsPresent value of the defined benefit obligations at the end of the year 891,067 -Fair value of plan assets at the end of year (898,357) -Present value of unfunded obligation 791,500Funded status being amount of (liability)/asset recognized in the balance sheet
(7,290) -
Gratuity cost for the yearService cost 282,968Interest cost 82,827 -Expected return on plan assets - -Actuarial (gain)/loss (258,440) -Net gratuity cost 107,355 -AssumptionsEstimated rate of return on plan assets 7.50% 0.00%Discount rate 7.00% 8.10%Rate of growth in salary levels 6.00% 6.00%
71
27. On the basis of the information and records available with management, there are no dues to Micro, Small and Medium enterprises, who have registered with the competent authorities. This information has not been disclosed for the previous year, as the Company was in the process of compiling the requisite list of Micro, Small and Medium enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.
28. Expenditure in foreign currencyParticulars 2009 2008Travelling expenses 1,341,408 573,459Advertisement expenses - 212,540Storage and health expenses 12,177 271,810Prizes - 41,042Professional fees 269,899 50,673Salary (paid to Dean) 649,334 -Recruitment Charges 7,457 -
29. Earnings in foreign currencyParticulars 2009 2008Tution fees 7,218,760 -Fees for short course 928,189 -Application form fees 59,677 -Reimbursement of expenses 390,550 -
30. CIF value of imports Particulars 2009 2008Capital goods 966,006 21,489,884
31. Auditors’ remuneration ( including service tax)2009 2008
Statutory audit fees 386,050 413,215Total 386,050 413,215
32. Earnings per share (‘EPS’) 2009 2008
a) Net loss attributable to equity shareholders (97,390,307) (128,391,450)b) Weighted average number of shares outstanding during the year 200,000 200,000 Basic and diluted earning per share of Rs 1,000 each (486.95) (641.96)
33. Information with regard to other matters specified in Part II of Schedule VI to the Companies Act, 1956 of India, is either nil or not applicable to the Company for the year.
34. Previous year’s figures Prior year’s figures have been regrouped or reclassified in order to conform to the current year’s presentation.
As per our report attached For and on behalf of the Board
For B S R & CO. SUBhASh GhAI MEGhNA GhAI PURI Chartered Accountants Chairman Director
AkEEL MASTER MANMOhAN ShETTY PRADEEP GUhAPartner Director DirectorMembership No: 046768 DIShA BALChANDANI Company SecretaryPlace: MumbaiDate: 28th July 2009
72
WHISTLING WOODS INTERNATIONAL LImITED
BALANCE ShEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. Registration Details Registration No. U32141MH200IPTCI303 State Code: 011
Balance Sheet Date : 31.03.2009
II. Capital Raised Amounts in Rs. ThousandsPublic Issue : - Bonus Issue: -
Rights Issue : - Private Placement : -
III. Position of Mobilisation and Deployment of Funds (Amounts in Rs. Thousands)Total Liabilities 841,468,939 Total Assets 841,468,939
Sources of FundsPaid-up Capital 400,000,000 Reserves & Surplus 293,233,551
Application of FundsNet Fixed Assets 453,308,778 Net Current Assets (126,194,699)
Accumulated losses 365,811,723 Misc. Expenditure 307,750
IV. Performance of Company (Amount in Rs. Thousands)
Turnover / Other income 172,533,611 Total Expenditure 269,307,338
Profit /Loss before tax ( 96,773,727 ) Profit /Loss after tax ( 97,292,349 )
Earning per Share - Rs ( 486.46) Dividend rate %
V. Generic Names of Principal Products / Services of Company
Item Code No. : Not Applicable
Product / Services: Education, research and training institute
Description
73
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
DIRECTORS’ REPORT
To the Members,
Your Directors take pleasure in presenting the Ninth Annual Report and the Audited Accounts of the Company for the Ac-counting Year ended 31st March 2009.
Operations:
The Income to the tune of Rs. 263,711 has been earned during the year. The Company has a profit of Rs. 59,284 after provision for tax during the year. The Directors are hopeful of increasing the profitability of the Company.
Directors:
Mr. Subhash Ghai retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reap-pointment.
Share Capital:
The Share Capital remains the same during the year under review.
Directors’ Responsibility Statement [Section 217 (2AA)]:
The Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) the directors had selected such accounting policies & applied them consistently and made judgements and estimates that are reasonable and prudent so as to give true & fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year;
iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts are prepared on a going concern basis;
Auditors:
M/s Shamit Majmudar Associates, Chartered Accountants retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment as the Auditors of the Company. The Directors recommend the reappointment of M/s Shamit Majmudar Associates as the Auditors of the Company for the year 2009-10.
Disclosure about conservation of energy, technology absorption and foreign exchange outgo and earnings:
The Company is not engaged in manufacturing activities and as such particulars regarding disclosure about Conservation of energy, technology absorption are not applicable to the Company.
There has been no foreign exchange outgo and earnings.
Other Statutory Information
The Company does not have any employees requiring disclosure as required under Section 217 (2A) of the Companies Act, 1956.
Acknowledgements:
The Board of Directors wishes to thank and record its appreciation to the Government Authorities and the Bankers, who have extended their continued support to the company.
Registered Office: On Behalf of Board of Directors
11, Bait-Ush-Sharaf, 29th Road, TPS – III, Bandra (W), Subhash Ghai Mumbai – 400 050 Chairman Place: Mumbai
Date: 28th July, 2009
74
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
AUDITORS REPORT
To the Members
1. We have audited the attached Balance Sheet of CONNECT.1 LIMITED (Formerly known as Mukta Arts International Ltd). as at 31st March 2009 and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above:
(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the requirements of the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) on the basis of the written representations received from the directors as on 31st March, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
(ii) in the case of Profit and Loss Account of the profit of the Company for the year ended on that date, and
(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
SHAMIT MAJMUDAR Place: Mumbai Proprietor Dated: 28th July 2009 Membership No. 010595
75
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
Annexure to the Auditors’ Report[Referred to in paragraph (3) thereof]
(i) The nature of the Company’s business/ activities during the year is such that clauses (ii), (vii), (viii), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) & (xx) of paragraph 4 of the Companies (Auditor’s Report) order, 2003 are not applicable to the Company for the year ended.
(ii) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the management at the end of the year and we are informed that no discrepancies between book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, the Company has not made any disposals during the year.
(iii) In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956:
According to the information and explanations given to us the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.
(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for purchase of fixed assets. There are no purchase of inventories and no sale of goods.
(v) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956:
To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.
(vi) The Company has not accepted any deposits from the public to which the provisions of Section 58A and section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975, are applicable.
(vii) According to the information and explanations given to us in respect of statutory and other dues there were no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as at 31st March, 2009 for more than six months from the date they became payable.
(viii) The Company has no accumulated losses as at the end of the year. The Company has not incurred cash losses during the financial year and the previous year.
(ix) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
SHAMIT MAJMUDAR Place: Mumbai Proprietor Dated: 28th July 2009 Membership No. 010595
76
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
PROfIT & LOSS ACCOUNT fOR THE yEAR ENDED 31ST MARCH 2009Current year Previous Year
SCHEDULE 31.03.2009 31.03.2008 Rupees Rupees
Income Rental Income 240,000 240,000 Interest Income 23,711 40,580
263,711 280,580 ExpenditureAdministration and other expenses H 16,491 16,072 Depreciation B 153,436 161,512 Preliminary Expenses Written off 3,500 3,500
173,427 181,084 Profit/(Loss) before Taxation 90,284 99,496 Less: Provision for Tax 31,000 34,000 Profit/(Loss) after Tax 59,284 65,496 Add: Balance brought forward from last year 119,177 53,681 Balance Carried to Balance Sheet 178,461 119,177 Statement of Significant Accounting Policies Iand Notes forming part of accounts
BALANCE SHEET AS AT 31ST MARCH 2009Current year Previous Year
SCHEDULE 31.03.2009 31.03.2008Rupees Rupees
SOURCES Of fUNDSShareholders’ fundShare Capital A 600,000 600,000 Profit & Loss Account 178,461 119,177
TOTAL 778,461 719,177 APPLICATION Of fUNDSfixed Assets B Gross Block 3,931,700 3,931,950 Less: Depreciation 1,016,660 863,224
2,915,040 3,068,726 Investments C 250 555,949 Current Assets, Loans & AdvancesCash & Bank Balance D 78,431 271,962 Debtors & Advances E 416,358 172,308
494,789 444,270 Less : Current Liabilities & Provisions f 2,635,118 3,356,768 Net Current Assets (2,140,329) (2,912,498)Miscellaneous Expenditure G 3,500 7,000
TOTAL 778,461 719,177 Statement of Significant Accounting Policies Iand Notes forming part of accounts
As per our report of even date For and on behalf of the board
for SHAMiT MAjMuDAR ASSOCiATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARvEz A. fAROOqUI MEGHNA GHAI PURI Proprietor Director Director Membership No. 010595
Place : Mumbai Date : 28th July 2009
77
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
CASH fLOW STATEMENT fOR THE yEAR ENDED 31ST MARCH 2009Current year
31.03.2009(Rupees)
Previous Year 31.03.2008
(Rupees) A. CASH fROM OPERATING ACTIvITIES
Net Profit before tax and extraordinary items : 59,284 65,496
Adjustments for :Depreciation 153,436 161,512 Interest, dividend, etc., received (23,711) (40,580)Miscellaneous expenditure written off 3,500 3,500
Operating profit before working capital changes 192,509 189,928
Adjustments for :(Increase)/ Decrease in Sundry Debtors (190,560) - Increase/(Decrease) in Trade Creditors (2,650) (3,600)Inc./ (Dec.) in Other current liabilities and provisions (719,000) (166,000)
Cash generated from/(used in) operations (719,701) 20,328 Direct Taxes paid (53,490) (57,800)
Cash flow before extraordinary items (773,191) (37,472)
Net Cash Generated from/(used in) Operating Activities (773,191) (37,472)
B. CASH fLOW fROM INvESTING ACTIvITIES
(Addition to)/ Redemption of Investments 555,699 (32,220)Interest, dividend, etc., received 23,711 40,580 Net cash generated from/(used in) investing activities 579,410 8,360
Net increase/(decrease) in cash and cash equivalents (193,781) (29,112)(A+B)Cash and cash equivalents (opening) 271,962 301,074 Cash and cash equivalents (closing) 78,431 271,962
As per our report of even date For and on behalf of the board
for SHAMiT MAjMuDAR ASSOCiATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARvEz A. fAROOqUI MEGHNA GHAI PURI Proprietor Director Director Membership No. 010595
Place : Mumbai Date : 28th July 2009
78
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
SCHEDULES fORMING PARTS Of ACCOUNTSCurrent year
31.03.2009 Rupees
Previous Year31.03.2008
Rupees
SCHEDULE - A
SHARE CAPITAL
Authorised Capital
5,000 Equity Share of Rs 1,000/- each
(Previous year 5,000 equity shares of Rs 1,000/- each) 5,000,000 5,000,000
Issued, subscribed & paid up 600,000 600,000
600 Equity Shares of Rs 1,000/- each
( Previous year 600 equity shares of Rs 1,000/- each )
600,000 600,000
SCHEDuLE - B
fixed Assets (Amount in Rs.)
GROSS BLOCK DEPRECIATION NET BLOCK
Particulars As on 01.04.2008
Additionsduring the
year
Deletions during the
year
Total as on
31.03.2009
Depreciationas on
31.03.2008
Depreciationfor the
year
Total Depreciation
upto 31.03.2009
As on 31.03.2009
As on 31.03.2008
Block ‘A’
Ownership Premises
3,931,950 - 250 3,931,700 863,224 153,436 1,016,660 2,915,040 3,068,726
TOTAL 3,931,950 - 250 3,931,700 863,224 153,436 1,016,660 2,915,040 3,068,726
Previous year 3,931,950 - - 3,931,950 701,712 161,512 863,224 3,068,726 3,230,238
During the year Rs. 250 has been transferred to Share -Bait-ush account from the Ownership premises
SCHEDULE - CInvestmentsFixed Deposit with Scheduled bank - 555,949 Shares -Bait-Ush Saraf C.H. S. Ltd 250 -
250 555,949
79
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
Current year31.03.2009
Rupees
Previous Year31.03.2008
Rupees
SCHEDULE - D
Cash & Bank Balances
Cash in hand 7,914 8,934
With Scheduled Bank (in current account) 70,517 263,028
78,431 271,962
SCHEDULE - E
Debtors & Advances
Sundry Debtors 190,560 -
Advance Taxes & Other Payments 225,798 172,308
416,358 172,308
SCHEDULE - f
Current Liabilities & Provision
Sundry Creditors- Annexure-1 6,618 9,268
Deposits 2,550,000 3,300,000
Provision for Income Tax 78,500 47,500
2,635,118 3,356,768
SCHEDULE - G
Miscellaneous Expenditure
Preliminary Expenses (to the extent not written off) 3,500 7,000
3,500 7,000
SCHEDULE - H
Administration and other expenses
Electricity Expenses - (400)
Audit Fees 6,618 6,742
Professonal Fees 500 -
Bank Charges 1,153 -
Filing Fees 1,020 2,530
Society Charges 7,200 7,200
16,491 16,072
SCHEDULES fORMING PARTS Of ACCOUNTS
80
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
SCHEDULE “I”
Statement of Significant Accounting Policies and Notes forming Part of Accounts
1 Significant Accounting Policies
(a) Basis of Preparation of Accounts
The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on accrual basis.
The preparation of financial statements in conformity with the Accounting Standards require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements, and the reported amounts of expenses during the year.
(b) (i) fixed Assets
Fixed Assets are stated at cost of acquisition and attributable costs and during the year Rs. 250 transferred to Shares-Bait-Ush account.
(ii) Depreciation
Depreciation has been provided on Written Down Value Method as per the provisions of Companies Act, 1956 and at the rates specified in Schedule XIV of the Companies Act, 1956.
(c) Revenue recognition
Interest Income and Rental Income are accounted on accrual basis.
Current year Previous Year
2 Contingent Liabilities Nil Nil
3 (a) There were no amounts payable to Small Scale Industrial Undertaking on the Balance Sheet date.
(b) The Company has no Suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act are not applicable.
Current year Rupees
Previous Year Rupees
4 Auditors Remuneration : Nil Nil
Statutory Audit Fees 6,618 6,742
As per our report of even date For and on behalf of the board
for SHAMiT MAjMuDAR ASSOCiATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARvEz A. fAROOqUI MEGHNA GHAI PURI Proprietor Director Director Membership No. 010595
Place : Mumbai Date : 28th July 2009
81
CONNECT.1 LIMITED(Formerly Mukta Arts International Limited)
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BuSiNESS PROFiLE
I. REGISTRATION DETAILS Registration No. U92110MH2000PLC124018 State Code: 011
Balance Sheet Date : 31.03.2009
II. CAPITAL RAISED (AMOUNTS IN RS. THOUSANDS)Public Issue : Nil Bonus Issue: Nil
Rights Issue : Nil Private Placement : Nil
III. POSiTiON OF MOBiLiSATiON AND DEPLOYMENT OF FuNDS (AMOuNTS iN RS. THOuSANDS)Total Liabilities 778 Total Assets 778
SOURCES Of fUNDSPaid-up Capital 600 Reserves & Surplus 178
Secured Loans Nil Unsecured Loans Nil
APPLICATION Of fUNDSNet Fixed Assets 2,914 Investments 0
Net Current Assets (2,140) Misc. Expenditure 4
Iv. PERfORMANCE Of COMPANy (AMOUNT IN RS. THOUSANDS)
Turnover 264 Total Expenditure 173
Profit /Loss before tax 90 Profit /Loss after tax 59
Earning per Share - Rs 98.81 Dividend rate % Nil
v. GENERIC NAMES Of PRINCIPAL PRODUCTS / SERvICES Of COMPANy
Item Code No. : Not Applicable
Product / Services: Description Marketing of films
82
MUKTA TELE MEDIA LIMITED
DIRECTORS’ REPORTTo the Members,
Your Directors take pleasure in presenting the Sixth Annual Report and the Audited Accounts of the Company for the Accounting year ended 31st March 2009.
Operations:The Company’s object is to take up production of tele-serials, management of event shows and entertainment software. The Income to the tune of Rs. 121,000 has been earned during the year. Due to administrative expenses and other fixed expenses the result for the year show a net loss of Rs. 136,537.
Share Capital:The Capital remains the same during the year under review.
Directors:Mr. Vijay Choraria resigned from the Board with effect from 18th August 2008 and Board of Directors appointed Mr. Rahul Puri as the Additional Director of the Company under section 260 of the Companies Act, 1956. Mr. Rahul Puri, Director vacates his office at the conclusion of the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
Mrs. Meghna Ghai Puri retires by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for re-appointment.
Directors’ Responsibility Statement [Section 217 (2AA)]:The Directors confirm that:
i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) the directors had selected such accounting policies & applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true & fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for the year;
iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts are prepared on a going concern basis; despite the fact, that the Company’s net worth is negative
Auditors and Auditors’ Report:M/s Shamit Majmudar Associates, Chartered Accountants, the Auditors, retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment as the Auditors of the Company. The Directors recommend the reappointment of M/s Shamit Majmudar Associates as Auditors of the Company for the year 2009-10.
In response to the Auditor’s comment on the negative networth of the Company, the management is considering some projects to explore new profit generating avenues.
Disclosure about conservation of energy, technology absorption and foreign exchange outgo and earnings:The Company is not engaged in manufacturing activities and as such particulars regarding disclosure about Conservation of energy, technology absorption are not applicable to the Company.
There has been no foreign exchange outgo and earnings.
Other Statutory Information:The Company does not have any employees requiring disclosure as required under Section 217 (2A) of the Companies Act, 1956.
Acknowledgements:The Board of Directors places on record its gratitude to, bankers, and the media for their continued support, patronage and goodwill. The Board also expresses its deep sense of appreciation to the employees and consultants for their guidance and support.
Registered Office: By Order of Board of Directors6, Bashiron, 28th Road,TPS – III, Bandra (W),Mumbai – 400 050
Place: Mumbai Parvez A. Farooqui Date: 28th July, 2009 Chairman
83
MUKTA TELE MEDIA LIMITED
AUDITORS REPORT
To the Members
1. We have audited the attached Balance Sheet of Mukta Tele Media Ltd. as at 31st March 2009 and related the Profit and Loss Account and Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above:
(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the requirements of the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) on the basis of the written representations received from the directors as on 31st March, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
(ii) in the case of Profit and Loss Account of the loss of the Company for the year ended on that date, and
(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
SHAMIT MAJMUDAR Place: Mumbai Proprietor Dated: 28th July 2009 Membership No. 010595
84
MUKTA TELE MEDIA LIMITED
AnnExURE TO THE AUDITORS’ REPORT[Referred to in paragraph (3) thereof]
(i) The nature of the Company’s business/ activities during the year is such that clauses (vii), (viii), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) & (xx) of paragraph 4 of the Companies (Auditor’s Report) order, 2003 are not applicable to the Company for the year ended.
(ii) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the management at the end of the year and we are informed that no discrepancies between book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, the Company has not made any disposals during the year.
(iii) In respect of inventories:
(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its activity during the year.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iv) In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956:
According to the information and explanations given to us the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.
(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for purchase of inventory and fixed assets. There is no sale of goods.
(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956:
To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.
(vii) The Company has not accepted any deposits from the public to which the provisions of Section 58A and section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975, are applicable.
(viii) According to the information and explanations given to us in respect of statutory and other dues there were no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as at 31st March, 2009 for more than six months from the date they became payable.
(ix) The Company has accumulated losses at the beginning of the year. The Company has incurred loss during the year. The accumulated losses have exceeded the entire net worth of the Company.
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
SHAMIT MAJMUDAR Place: Mumbai Proprietor Dated: 28th July 2009 Membership No. 010595
85
MUKTA TELE MEDIA LIMITED
BALANCE SHEET AS AT 31ST MARCH 2009
SCHEDULE Current Year 31.03.2009
Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
SOURCES OF FUnDS
Shareholders’ Fund
Share Capital A 500,000 500,000
TOTAL 500,000 500,000
APPLICATIOn OF FUnDS
Fixed Assets B
Gross Block 4,304,963 4,304,963
Less: Depreciation 1,109,389 939,165
3,195,574 3,365,798
Investments C 250 250
Current Assets, Loans & Advances
Inventories D 3,735,407 3,735,407
Deposits & Advance Tax Paid E 50,920 480
Cash and Bank Balances F 28,602 90,275
3,814,929 3,826,162
Current Liabilities & Provisions G 10,585,199 10,644,784
net Current Assets (6,770,270) (6,818,622)
Balance as per Profit & Loss account 4,030,451 3,893,914
Preliminary Expenses (to the extent not written off) 43,995 58,660
TOTAL 500,000 500,000
Statement of Significant Accounting Policiesand Notes forming part of accounts
H
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES PARVEZ A. FAROOQUI Chartered Accountants Chairman
SHAMIT MAJMUDAR RAHUL PURI Proprietor Director Membership No. 010595
Place : Mumbai MEGHnA GHAI PURI Date : 28th July 2009 Director
86
MUKTA TELE MEDIA LIMITED
PROFIT & LOSS ACCOUnT FOR THE YEAR EnDED 31ST MARCH 2009
SCHEDULE Current Year 31.03.2009
Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
InCOME
Rental Income 121,000 108,000
Total 121,000 108,000
ExPEnDITURE
Administration and other Expenses H 72,648 29,966
Depreciation 170,224 179,551
Preliminary Expenses written Off 14,665 14,665
Total 257,537 224,182
Profit/(Loss) after tax (136,537) (116,182)
Add: Balance brought forward from last year (3,893,914) (3,777,732)
Balance carried to Balance Sheet (4,030,451) (3,893,914)
Statement of Significant Accounting Policies and Notes forming part of accounts
I
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES PARVEZ A. FAROOQUI Chartered Accountants Chairman
SHAMIT MAJMUDAR RAHUL PURI Proprietor Director Membership No. 010595
Place : Mumbai MEGHnA GHAI PURI Date : 28th July 2009 Director
87
MUKTA TELE MEDIA LIMITED
CASH FLOW STATEMEnT FOR THE YEAR EnDED 31ST MARCH 2009
Current Year 31.03.2009
Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
A. CASH FROM OPERATInG ACTIVITIES
Net Profit / (Loss) before tax and extraordinary items : (136,537) (116,182)
Adjustments for :
Depreciation 170,224 179,551
Miscellaneous expenditure written off 14,665 14,665
Operating profit before working capital changes 48,352 78,034
Adjustments for :
(Increase)/ Decrease in Inventories - (400)
(Increase)/ Decrease in Loans and advances (50,440) (480)
Increase/(Decrease) in Trade Creditors 868 (45,198)
Inc./ (Dec.) in Other current liabilities and provisions (60,453) -
Cash generated from/(used in) operations (61,673) 31,956
Net Cash Generated from/(used in) Operating Activities (61,673) 31,956
B. CASH FLOW FROM InVESTInG ACTIVITIES
Net cash generated from/(used in) investing activities - -
C. CASH FLOW FROM FInAnCInG ACTIVITIES
Net cash recovered from/(used in) financing activities - -
Net increase/(decrease) in cash and cash equivalents (61,673) 31,956
(A+B+C)
Cash and cash equivalents (opening) 90,275 58,319
Cash and cash equivalents (closing) 28,602 90,275
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES PARVEZ A. FAROOQUI Chartered Accountants Chairman
SHAMIT MAJMUDAR RAHUL PURI Proprietor Director Membership No. 010595
Place : Mumbai MEGHnA GHAI PURI Date : 28th July 2009 Director
88
MUKTA TELE MEDIA LIMITED
SCHEDULES FORMInG PARTS OF ACCOUnTS
Current Year 31.03.2009
Rupees
Previous Year 31.03.2008
Rupees
SCHEDULE - A
Share Capital
Authorised Share Capital
50,000 Equity Shares of Rs.100/- each
(Previous year 50,000 Equity Shares of Rs.100/- each) 5,000,000 5,000,000
Issued , subscribed & paid up Capital
5,000 Equity Shares of Rs. 100/- fully paid-up(Previous year 5,000 Equity Shares of Rs.100/- fully paid-up)
500,000 500,000
500,000 500,000
SCHEDULE B
Fixed Assets (Amount in Rs.)
GROSS BLOCK DEPRECIATIOn NET BLOCK
Particulars As on 01.04.2008
Additionsduring the
year
Total as on
31.03.2009
Depreciationas on
31.03.2008
Depreciationfor the
year
Total Depreciation
upto 31.03.2009
As on 31.03.2009
As on 31.03.2008
Block ‘A’ –
Ownership Premises 4,260,063 – 4,260,063 913,830 167,312 1,081,142 3,178,921 3,346,233
Block ‘B’ –
Furniture & Fixture 10,800 – 10,800 6,241 825 7,066 3,734 4,559
Block ‘C’ –
Mobile Handset 5,000 – 5,000 5,000 - 5,000 - -
Air Conditioners 29,100 – 29,100 14,094 2,087 16,181 12,919 15,006
–
TOTAL 4,304,963 – 4,304,963 939,165 170,224 1,109,389 3,195,574 3,365,798
Previous year 4,304,963 – 4,304,963 759,614 179,551 939,165 3,364,798 3,545,349
Current Year 31.03.2009
Rupees
Previous Year 31.03.2008
Rupees
SCHEDULE - C
Investments (Unquoted)
Shares of Bait-Ush-Sharaf Co. Op. Hsg. Society Ltd. 250 250
(5 shares of Rs 50 each , Previous year 5 shares)
250 250
89
MUKTA TELE MEDIA LIMITED
Current Year 31.03.2009
Rupees
Previous Year 31.03.2008
Rupees
SCHEDULE - D
Inventories
Remake Rights of Films 200,000 200,000
Under Production T.V.Serials 3,535,407 3,535,407
3,735,407 3,735,407
SCHEDULE - E
Deposits & Other Current Assets
Reliance Energy Limited 480 480
Prepaid Expenses 1,000 -
Advance Tax Paid 49,440 -
50,920 480
SCHEDULE - F
Cash & Bank Balances
Cash in hand 5,157 1,483
With Scheduled Banks:
In Current Account 23,445 88,792
28,602 90,275
SCHEDULE - G
Current Liability & Provisions
Amount due (to Holding Company ) 10,372,984 10,637,984
Sundry Creditors for goods and services rendered 7,668 6,800
Rent Received in Advance 200,000 -
Duties & Taxes 4,547 -
10,585,199 10,644,784
SCHEDULE - H
Administrative Expenses
Auditors Remuneration 6,618 6,800
Professional Fees 1,000 -
Brokerage & Commission 44,144 -
Subscription Charges 5,500 -
Society Charges 14,000 14,000
Bank Charges 60 -
Rates & Taxes - 2,500
Filing Fees 1,326 6,666
72,648 29,966
90
MUKTA TELE MEDIA LIMITED
SCHEDULE “I”
Statement of Significant Accounting Policies and Notes forming Part of Accounts 1 Significant Accounting Policies (a) Basis of Preparation of Accounts The financial statements have been prepared under the historical cost convention, in accordance with Accounting
Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on accrual basis.
The preparation of financial statements in conformity with the Accounting Standards require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements, and the reported amounts of expenses during the year.
(b) (i) Fixed Assets Fixed Assets are stated at cost of acquisition and attributable costs. (ii) Depreciation Depreciation has been provided on Written Down Value Method as per the provisions of Companies Act,
1956 and at the rates specified in Schedule XIV of the Companies Act, 1956. (c) Inventories Inventories of under production of serials are valued at actual cost. (d) Revenue recognition Sales/Realisations are recognised on despatch of softwares to the respective parties. (e) Preliminary Expenses Preliminary Expenses are amortised over a period of 10 Years 2 Previous year figures have been regrouped wherever necessary.3 Contingent Liabilities
Current Year Rupees
Previous Year Rupees
nil Nil
4 The Company’s accumulated losses as at 31st March 2009 far exceeds its paid-up capital and reserves as at that date. Since the Directors are looking for right opportunity to explore the similar line of business activity, the Directors consider that it is appropriate to prepare the financial statements on going concern basis.
5 (a) There were no amounts payable to Small Scale Industrial Undertaking on the Balance Sheet date.
(b) The Company has no Suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act are not applicable.
6 Additional information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1956 is as follows :
The Company is in the business of production of software which is not subject to any licence and as such information regarding consumption of Raw Materials, Production and sales is not applicable.
Further the nature of business of the Company is such that the installed capacity is not applicable.
7 Auditors Remuneration :
Current Year Rupees
Previous Year Rupees
Statutory Audit Fees 6,618 6,8006,618 6,800
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES PARVEZ A. FAROOQUI Chartered Accountants Chairman
SHAMIT MAJMUDAR RAHUL PURI Proprietor Director Membership No. 010595
Place : Mumbai MEGHnA GHAI PURI Date : 28th July 2009 Director
91
MUKTA TELE MEDIA LIMITED
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. REGISTRATIOn DETAILS Registration No. U92100MH2002PLC137312 State Code: 011
Balance Sheet Date : 31.03.2009
II. CAPITAL RAISED (AMOUnTS In RS. THOUSAnDS)Public Issue : Nil Bonus Issue: Nil
Rights Issue : Nil Private Placement : Nil
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNTS IN RS. THOUSANDS)Total Liabilities 500 Total Assets 500
SOURCES OF FUnDSPaid-up Capital 500 Reserves & Surplus –
Secured Loans – Unsecured Loans –
APPLICATIOn OF FUnDSNet Fixed Assets 3,196 Investments –
Net Current Assets (6,770) Misc. Expenditure 44
Deffered Tax Assets 4,030
IV. PERFORMAnCE OF COMPAnY (AMOUnT In RS. THOUSAnDS)
Turnover 121 Total Expenditure 258
Profit /Loss before tax (137) Profit /Loss after tax (137)
Earning per Share - Rs – Dividend rate % Nil
V. GENERIC NAMES OF PRINCIPAL PRODUCTS / SERvICES OF COMPANY
Item Code No. : Not Applicable
Product Description: SOFTWARE PRODUCTION, DISTRUBUTION & EQUIPMENT HIRE
92
CORUSCANT TEC PRIVATE LIMITED
DIRECTORS’ REPORTTo the Members,Your Directors take pleasure in presenting the Sixth Annual Report and the Audited Accounts of the Company for the Accounting Year ended 31st March 2009.Operations:The Income to the tune of Rs. 439,341/- has been earned during the year. The Company has incurred loss of Rs. 1,342,986/- during the year and needs to be seen as one in startup mode. The Directors are hopeful of achieving better results in the years to come given the high growth rate in the MVAS space in which the Company operates. Share Capital:The Share Capital remains the same during the year under review. During the year Mukta Arts Ltd. had acquired 51% controlling stake in the Company and being eligible, has since initiated the process to acquire the balance 49% shares making it as fully owned subsidiary of Mukta Arts Limited.Directors:During the year Mr. Subhash Ghai, Mr. Parvez A. Farooqui, Mr. Rahul Puri were appointed as Additional Directors in the Board Meeting held on 19th September, 2008 to hold office upto the forthcoming Annual General Meeting. The Company has received notice from the members signifying their intention to propose them as candidates for the office of the Directors of the Company.Mr. Ajay Adiseshann and Mr. Probir Roy resigned from the Board of Directors with effect from 28th July, 2009. Registered Office:The Registered office of the Company has shifted from No.56, Luz Church Road, Mylapore, Chennai -4, Tamil Nadu to 6, Bashiron, TPS III, 28th Road, Bandra West, Mumbai-50, Maharashtra with effect from 28.04.2009.Directors’ Responsibility Statement [Section 217 (2AA)]:The Directors confirm that:i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper
explanation relating to material departures;ii) the directors had selected such accounting policies & applied them consistently and made judgements and estimates
that are reasonable and prudent so as to give true & fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year;
iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts are prepared on a going concern basis;Auditors:During the year M/s. K.S. Varadarajan & Co. Chartered Accountants, Chennai- 600 006 expressed their inability to render the services and in their place M/s Shamit Majmudar Associates, Chartered Accountants, Mumbai, were appointed as Company Auditors in the Extra Ordinary General Meeting held on 17th November, 2008.M/s Shamit Majmudar Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment as the Auditors of the Company. The Directors recommend the reappointment of M/s Shamit Majmudar Associates as the Auditors of the Company for the year 2009-10.Disclosure about conservation of energy, technology absorption and foreign exchange outgo and earnings:The Company is not engaged in manufacturing activities and as such particulars regarding disclosure about Conservation of energy, technology absorption are not applicable to the Company. Particulars regarding Foreign Exchange earnings and outgo required under Section 217 (1) (e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 are given in Schedule H (Statement of Significant Accounting Policies and Notes forming Part of Accounts) of this report.Other Statutory InformationThe Company does not have any employees requiring disclosure as required under Section 217 (2A) of the Companies Act, 1956.Acknowledgements:The Board of Directors wishes to thank and record its appreciation of the stakeholders, who have extended their continued support to the company. Registered Office: On Behalf of Board of Directors6, Bashiron, 28th Road TPS – III, Bandra (W) Subhash Ghai Mumbai – 400 050 Chairman Place: Mumbai Date: 28th July, 2009
93
CORUSCANT TEC PRIVATE LIMITED
AUDITORS REPORTTo the Members
1. We have audited the attached Balance Sheet of Coruscant Tec Pvt. Limited as at 31st March 2009 and related the Profit and Loss Account and Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above:
(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the requirements of the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) on the basis of the written representations received from the directors as on 31st March, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;
(ii) in the case of Profit and Loss Account of the loss of the Company for the year ended on that date, and
(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
SHAMIT MAJMUDARPlace: Mumbai Proprietor Dated: 28th July 2009 Membership No. 010595
94
CORUSCANT TEC PRIVATE LIMITED
ANNExURE TO THE AUDITORS’ REPORT[Referred to in paragraph (3) thereof]
(i) The nature of the Company’s business/ activities during the year is such that clauses (vii), (viii), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) & (xx) of paragraph 4 of the Companies (Auditor’s Report) order, 2003 are not applicable to the Company for the year ended.
(ii) In respect of fixed assets:
There are no fixed assets.
(iii) In respect of inventories:
There are no inventories at the end of year.
(iv) In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956:
According to the information and explanations given to us the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.
(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for purchase of inventory and fixed assets. There is no sale of goods.
(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956:
To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.
(vii) The Company has not accepted any deposits from the public to which the provisions of Section 58A and section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975, are applicable.
(viii) According to the information and explanations given to us in respect of statutory and other dues there were no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as at 31st March, 2009 for more than six months from the date they became payable.
(ix) The Company has accumulated losses at the beginning of the year. The Company has incurred loss during the year. The accumulated losses have exceeded the entire net worth of the Company.
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
For SHAMIT MAJMUDAR ASSOCIATES Chartered Accountants
SHAMIT MAJMUDARPlace: Mumbai Proprietor Dated: 28th July 2009 Membership No. 010595
95
CORUSCANT TEC PRIVATE LIMITED
BALANCE SHEET as at 31st March 2009
SCHEDULE Current Year
31.03.2009 Rupees
Previous Year
31.03.2008 Rupees
SOURCES OF FUNDS
Shareholders’ Fund
Share Capital A 100,000 100,000
Reserve & Surplus - 210,761
TOTAL 100,000 301,761
Current Assets, Loans & Advances
Sundry Debtors B 227,448 742,787
Cash & Bank Balance C 1,709 1,957
Loans & Advances D 120,156 365,064
349,314 1,109,809
Less : Current Liabilities & Provisions E 1,384,299 802,498
Net Current Assets (1,034,985) 307,311
Miscellaneous Expenditure F 2,760 3,450
Profit & Loss Account 1,132,225 -
TOTAL 100,000 310,761
Statement of Significant Accounting Policies and Notes forming part of accounts
H
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARVEz A. FAROOqUI Proprietor Director Membership No. 010595
Place : Mumbai RAHUL PURI Date : 28th July 2009 Director
96
CORUSCANT TEC PRIVATE LIMITED
PROfiT & LOSS ACCOuNT fOR THE yEAR ENDED 31ST MARCH 2009
SCHEDULE Current Year
31.03.2009 Rupees
Previous Year
31.03.2008 Rupees
Income
Sales 405,754 3,537,714
Professional Charges - 172,179
Other Income 33,587 -
439,341 3,709,893
Expenditure
Opening Work in Progress - 4,470,000
Less : Trfd to Advances Account - 2,250,000
- 2,220,000
Employees Cost 1,077,967 226,250
Administration and other expenses G 703,670 1,183,628
Preliminery Expenses written off 690 690
1,782,327 3,630,568
Profit/(Loss) before Taxation (1,342,986) 79,325
Less: Provision for Taxation - 25,000
Profit/(Loss) after Tax (1,342,986) 54,325
Add: Balance brought forward from last year 210,761 158,100
(1,132,225) 212,425
Less: Income Tax Pertaining to Earlier Years - 1,664
Balance Carried to Balance Sheet (1,132,225) 210,761
Statement of Significant Accounting Policiesand Notes forming part of accounts
H
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARVEz A. FAROOqUI Proprietor Director Membership No. 010595
Place : Mumbai RAHUL PURI Date : 28th July 2009 Director
97
CORUSCANT TEC PRIVATE LIMITED
CASH fLOW STATEMENT fOR THE yEAR ENDED 31ST MARCH 2009Current Year
31.03.2009 Amount in Rs.
Previous Year 31.03.2008
Amount in Rs.
A. CASH fROM OPERATiNG ACTiViTiES
Net Profit / (Loss) before tax and extraordinary items : (1,342,986) 79,325
Adjustments for :
Miscellaneous expenditure written off 690 690
Operating profit before working capital changes (1,342,296) 80,015
Adjustments for :
(Increase)/ Decrease in Receivables 515,339 (247,157)
(Increase)/ Decrease in Loans and advances 244,908 40,681
Increase/(Decrease) in Trade Creditors 36,341 (14,772)
Inc./ (Dec.) in Other current liabilities and provisions 545,460 73,363
Cash generated from/(used in) operations (248) (67,871)
Net Cash Generated from/(used in) Operating Activities (248) (67,871)
B. CASH fLOW fROM iNVESTiNG ACTiViTiES
Net cash generated from/(used in) investing activities - -
C. CASH fLOW fROM fiNANCiNG ACTiViTiES
Net cash recovered from/(used in) financing activities - -
Net increase/(decrease) in cash and cash equivalents (248) (67,871)
(A+B+C)
Cash and cash equivalents (opening) 1,957 69,828
Cash and cash equivalents (closing) 1,709 1,957
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARVEz A. FAROOqUI Proprietor Director Membership No. 010595
Place : Mumbai RAHUL PURI Date : 28th July 2009 Director
98
CORUSCANT TEC PRIVATE LIMITED
SCHEDuLES fORMiNG PARTS Of ACCOuNTSCurrent Year
31.03.2009 Rupees
Previous Year 31.03.2008
RupeesSCHEDULE - ASHARE CAPITALAuthorised Capital1,00,000 Equity Share of Rs 10/- each 1,000,000 1,000,000
Issued, subscribed & paid up 100,000 100,000 10,000 Equity Shares of Rs 10/- each
Total 100,000 100,000
SCHEDuLE - BSundry Debtorsa) Debts Outstanding for a period exceeding six months Considered good 98,026 399,998b) Other Debts Considered good 129,422 342,789
227,448 742,787
SCHEDULE - CCash & Bank BalancesCash in hand 1,487 364 With Scheduled Bank (in current account) 222 1,593
1,709 1,957
SCHEDULE - DLoans & AdvancesAdvances recoverable in cash or in kind 6,279 299,731 Advance Taxes -Income Tax & FBT 113,877 65,333
120,156 365,064
SCHEDULE - ECurrent Liabilities & ProvisionSundry Creditors 36,341 - Bank Overdraft 189,393 643,253 Other Liabilities 163,564 124,245 Amount due to holding Co. 960,000 - Provision for Taxation 35,000 35,000
1,384,299 802,498
SCHEDULE - FMiscellaneous ExpenditurePreliminery Expenses to the extent not written off or adjusted 2,760 3,450
2,760 3,450
SCHEDuLE - GAdministration and other expensesBank Charges 1,344 4,992 Interest & Finance Charges 1,624 170,426 Office Maintenance 10,451 1,989 Postage, Telegram & Filing Fees 6,395 129 Printing & Stationery 112 108 Professional Charges 651,298 959,806 Travelling & Conveyance 11,806 41,178 Telephone Expenses 11,198 - Download Charges 4,441 - Audit Fees 5,000 5,000
703,670 1,183,628
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CORUSCANT TEC PRIVATE LIMITED
SCHEDULE H
Statement of Significant Accounting Policies and Notes forming Part of Accounts
1 Significant Accounting Policies
Basis of Preparation of Accounts
The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on accrual basis.
The preparation of financial statements in conformity with the Accounting Standards require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements, and the reported amounts of expenses during the year.
2 Contingent Liabilities
Current Year Previous Year -------------------------------------------------- --------------------------------------------------
Nil Nil
3 (a) There were no amounts payable to Small Scale Industrial Undertaking on the Balance Sheet date.
(b) The Company has not received any intimation from “Suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.
4 Additional information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1956 is as follows :
The Company is in the business of production of software which is not subject to any licence and as such information regarding consumption of Raw Materials, Production and sales is not applicable. Further the nature of business of the Company is such that the installed capacity is not applicable.
5 Transaction in foreign Currency
Receipts Rs. 9,220,857 /-
Payments Rs. 9,802,191 /-
6 Auditors Remuneration :
Current Year Rupees
Previous Year Rupees
Statutory Audit Fees 5,000 5000
7 Previous year figures have been regrouped wherever necessary.
As per our report of even date For and on behalf of the Board
For SHAMIT MAJMUDAR ASSOCIATES SuBHASH GHAi Chartered Accountants Director
SHAMIT MAJMUDAR PARVEz A. FAROOqUI Proprietor Director Membership No. 010595
Place : Mumbai RAHUL PURI Date : 28th July 2009 Director
100
CORUSCANT TEC PRIVATE LIMITED
BALANCE SHEET ABSTRACT AND COMPANy’S GENERAL BuSiNESS PROfiLE
I. REGiSTRATiON DETAiLS Registration No. U72200MH2003PTC193963 State Code: 011
Balance Sheet Date : 31.03.2009
II. CAPITAL RAISED (AMOUNTS IN RS. THOUSANDS)Public Issue : Nil Rights Issue : Nil
Bonus Issue: Nil Private Placement : Nil
III. POSiTiON Of MOBiLiSATiON AND DEPLOyMENT Of fuNDS (AMOuNTS iN RS. THOuSANDS)Total Liabilities 100 Total Assets 100
SOURCES OF FUNDSPaid-up Capital 100 Reserves & Surplus Nil
Secured Loans Nil Unsecured Loans -
APPLICATION OF FUNDSNet Fixed Assets Nil Investments -
Net Current Assets (1,035) Misc. Expenditure 3
Accumulated Losses 1,132
IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)
Turnover / Other income 439 Total Expenditure 1,782
Profit /Loss before tax (1,343) Profit /Loss after tax (1,343)
Earning per Share - Rs - Dividend rate % Nil
V. GENERiC NAMES Of PRiNCiPAL PRODuCTS / SERViCES Of COMPANy
Item Code No. : Not Applicable
Product / Services: Description Development of Contents