Letter of Offer July 24, 2013 For Equity Shareholders of ...
Transcript of Letter of Offer July 24, 2013 For Equity Shareholders of ...
Letter of Offer
July 24, 2013
For Equity Shareholders of the Company only
RELIANCE MEDIAWORKS LIMITED
Our Company was incorporated as Adlabs Films Private Limited on November 30, 1987, as a private limited company in Mumbai under the Companies Act, 1956. Pursuant to conversion into a public company, our Company’s name was changed to Adlabs Films Limited. Subsequently, our Company’s name was further changed to Reliance MediaWorks
Limited. For details of changes in the name and the registered office of our Company, please see the chapter entitled “History and Certain Corporate Matters” at page 169 of this
Letter of Offer.
Registered Office: Film City Complex, Goregaon (East), Mumbai 400 065, Maharashtra
Contact Person: Ashish Agarwal, Company Secretary and Compliance Officer Tel: +91 22 3980 8900 Facsimile: +91 22 3980 8985 Email: [email protected] Website: www.reliancemediaworks.com
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF RELIANCE MEDIAWORKS LIMITED
THE “COMPANY” OR THE “ISSUER” ONLY
THE PROMOTERS OF OUR COMPANY ARE RELIANCE LAND PRIVATE LIMITED AND RELIANCE CAPITAL LIMITED
ISSUE OF UPTO 14,99,10,052 EQUITY SHARES WITH A FACE VALUE OF `5 EACH (“EQUITY SHARES”) AT A PREMIUM OF `35 PER EQUITY SHARE FOR
AN AMOUNT NOT EXCEEDING `59,964.02 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY IN THE
RATIO OF 13 EQUITY SHARES FOR EVERY 4 FULLY PAID-UP EQUITY SHARES HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD
DATE, THAT IS ON WEDNESDAY JULY 24, 2013 (“ISSUE”). THE ISSUE PRICE IS 8 TIMES THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER
DETAILS, PLEASE SEE THE CHAPTER ENTITLED “TERMS OF THE ISSUE” AT PAGE 319 OF THE LETTER OF OFFER.
GENERAL RISKS
Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their
own examination of our Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to refer to the chapter entitled “Risk
Factors” at page 11 of this Letter of Offer before making an investment in this Issue.
ISSUER’S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any
material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or
any such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares are listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”) (collectively, “Stock Exchanges”). Our Company
received “in-principle” approvals from the BSE and the NSE for listing the Equity Shares to be Allotted in the Issue vide their letters dated April 18, 2013 and April 10, 2013,
respectively. For the purpose of the Issue, the Designated Stock Exchange is BSE.
Lead Manager REGISTRAR TO THE ISSUE
Axis Capital Limited
Axis House, 1st Floor,
C-2 Wadia International Centre, P.B. Marg, Worli, Mumbai – 400 025
Telephone: +91 22 4325 3150
Facsimile: +91 22 4325 3000 Email: [email protected]
Website: www.axiscapital.co.in
Investor Grievance Email: [email protected] Contact Person: Vivek Toshniwal
SEBI Registration Number: INM000012029
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078 Telephone: +91 22 2596 7878
Facsimile: +91 22 2596 0329
E-mail: [email protected] Investor Grievance Email: [email protected]
Website: www.linkintime.co.in Contact Person: Pravin Kasare
SEBI Registration No.: INR 000004058
ISSUE PROGRAMME
ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR SPLIT
APPLICATION FORMS ISSUE CLOSES ON
Tuesday, August 6, 2013 Tuesday, August 13, 2013 Tuesday, August 20, 2013
TABLE OF CONTENTS
SECTION I: GENERAL ..................................................................................................................................................................... 1
DEFINITIONS AND ABBREVIATIONS .......................................................................................................................................... 1 NOTICE TO OVERSEAS SHAREHOLDERS ................................................................................................................................... 6 PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA .................................................................. 8 FORWARD LOOKING STATEMENTS .......................................................................................................................................... 10
SECTION II: RISK FACTORS ......................................................................................................................................................... 11
SECTION III: INTRODUCTION ..................................................................................................................................................... 39
SUMMARY OF INDUSTRY ............................................................................................................................................................ 39 SUMMARY OF BUSINESS ............................................................................................................................................................. 41 SUMMARY FINANCIAL INFORMATION .................................................................................................................................... 47 ISSUE ................................................................................................................................................................................................ 63 GENERAL INFORMATION ............................................................................................................................................................ 64 CAPITAL STRUCTURE .................................................................................................................................................................. 69 OBJECTS OF THE ISSUE ................................................................................................................................................................ 81 BASIS FOR ISSUE PRICE ............................................................................................................................................................. 128 STATEMENT OF TAX BENEFITS ............................................................................................................................................... 131
SECTION IV: ABOUT THE COMPANY ...................................................................................................................................... 138
INDUSTRY OVERVIEW ............................................................................................................................................................... 138 BUSINESS ...................................................................................................................................................................................... 149 REGULATIONS AND POLICIES .................................................................................................................................................. 166 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................................................. 169 OUR SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIP .............................................................................................. 179 OUR MANAGEMENT ................................................................................................................................................................... 190 OUR PROMOTER AND PROMOTER GROUP ............................................................................................................................ 200 OUR GROUP COMPANIES ........................................................................................................................................................... 208 DIVIDEND POLICY ...................................................................................................................................................................... 224
SECTION V: FINANCIAL STATEMENTS ................................................................................................................................... F-1
PRO FORMA FINANCIAL STATEMENT ................................................................................................................................. F-261 STATEMENT OF CAPITALISATION POST ISSUE ................................................................................................................. F-265 FINANCIAL INDEBTEDNESS ..................................................................................................................................................... 225 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ....... 234 MATERIAL DEVELOPMENTS .................................................................................................................................................... 275
SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................................................... 276
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ..................................................................................... 276
GOVERNMENT AND OTHER APPROVALS .............................................................................................................................. 304 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................................... 306
SECTION VII: ISSUE INFORMATION ........................................................................................................................................ 319
TERMS OF THE ISSUE ................................................................................................................................................................. 319
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................................................ 352
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ................................................................................ 353
SECTION IX: OTHER INFORMATION ....................................................................................................................................... 380
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ......................................................................................... 380 DECLARATION ............................................................................................................................................................................. 382
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SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
Definitions
Unless the context indicates or implies otherwise, certain definitions and abbreviations used in this Letter of Offer have the meanings as
provided below. Reference to any legislation, act or regulation shall be to such legislation, act or regulation as amended from time to time.
Issuer Related Terms
Term Description
“RMWL”, “our Company”, “the Company”
or “the Issuer” Reliance MediaWorks Limited
“We” or “us” or “our” or “our Group” Reliance MediaWorks Limited and its subsidiaries, joint ventures and associates on a consolidated
basis, unless the context indicates or implies otherwise
ADAV Anil Dhirubhai Ambani Ventures Limited
Articles / Articles of Association Articles of Association of our Company
Auditors B S R & Co., Chartered Accountants and Chaturvedi & Shah, Chartered Accountants
Board/Board of Directors Board of Directors of our Company or a duly constituted committee thereof
DDMG Digital Domain Media Group Inc. and its subsidiaries
Director A director of our Company
ED Directorate of Enforcement
Eligible Equity Shareholders Existing Equity Shareholders on the Record Date i.e. Wednesday, July 24, 2013.
Equity Shares Equity Shares of our Company at face value of ` 5 each
Equity Shareholder / Shareholder A holder of the Equity Shares of our Company
Group Companies
Companies, firms, ventures etc. promoted by our Promoters, irrespective of whether such entities
are covered under section 370(1)(B) of the Companies Act or not and disclosed in the chapter
entitled “Our Group Companies” at page 208 of this Letter of Offer.
iLab Our facility for digital image correction, film restoration and film processing in the UK
Joint Ventures Joint ventures of our Company set out in the chapter entitled “Our Subsidiaries, Joint Ventures
and Partnership” at page 179 of this Letter of Offer.
Lowry Digital Reliance Lowry Digital Imaging Services Inc.
Memorandum / Memorandum of
Association Memorandum of Association of our Company
Promoter Group
Such persons and entities constituting the promoter group of our Company in terms of Regulation
2(1)(zb) of the ICDR Regulations. However, Reliance Capital Limited, being an investing
company, has made investments in excess of 10% in its normal course of business in various
companies, which are neither related to Reliance Capital Limited nor Reliance Capital Limited has
any influence of management control over them. Accordingly, these companies have not been
included within the definition of ‘Promoter Group’.
Promoters The promoters of our Company viz. Reliance Land Private Limited and Reliance Capital Limited
Registered Office The registered office of our Company situated at Film City Complex, Goregaon (East), Mumbai
400 065, Maharashtra
Reliance Group In context of this Letter of Offer, Reliance Group shall mean the group of companies headed /
promoted by Anil D. Ambani
RoC Registrar of Companies, Maharashtra, situated at Everest, 5
th Floor, 100, Marine Drive, Mumbai -
400 002, Maharashtra
Subsidiaries Subsidiaries of our Company set out in the chapter entitled “Our Subsidiaries, Joint Ventures and
Partnership” at page 179 of this Letter of Offer.
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Issue Related Terms
Term Description
Abridged Letter of Offer The abridged letter of offer to be sent to the Equity Shareholders of our Company with respect to the
Issue in accordance with the ICDR Regulations
Allot / Allotted / Allotment The allotment of Equity Shares pursuant to the Issue
Allottees Persons to whom Equity Shares of our Company are Allotted pursuant to the Issue
Application Supported by Blocked
Amount / ASBA
The application (whether physical or electronic) used by an ASBA Investor to make an application
authorizing the SCSB to block the application amount in his / her specified bank account maintained
with the SCSB
ASBA Account An account maintained with an SCSB and specified in the CAF for blocking the amount mentioned in
the CAF
ASBA Investor
Equity Shareholders proposing to subscribe to the Issue through ASBA process and who:
1. are holding the Equity Shares of our Company in dematerialized form as on the Record Date
and have applied for their Rights Entitlements and / or additional Equity Shares in
dematerialized form;
2. have not renounced their Rights Entitlements in full or in part;
3. are not Renouncees; and
4. are applying through blocking of funds in a bank account maintained with the SCSBs
Banker to the Issue Axis Bank Limited
Composite Application Form / CAF The form used by an Investor to make an application for the Allotment of Equity Shares in the Issue
Consolidated Certificate In case of holding of Equity Shares in physical form, the certificate that our Company would issue for
the Equity Shares Allotted to one folio
Controlling Branches of the SCSBs Such branches of the SCSBs which coordinate with the Lead Manager, the Registrar to the Issue and
the Stock Exchanges, a list of which is available at http://www.sebi.gov.in
Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA Investors and a list
of which is available at http://www.sebi.gov.in
Designated Stock Exchange BSE
Draft Letter of Offer The draft letter of offer dated March 11, 2013 filed with SEBI
Investor(s) The Equity Shareholders of our Company on the Record Date, i.e. Wednesday, July 24, 2013 and the
Renouncees
Issue
Issue of upto 14,99,10,052 Equity Shares each at a premium of ` 35 per Equity Share for an amount
not exceeding `59,964.02 lakhs on a rights basis to the existing Equity Shareholders of our Company
in the ratio of 13 Equity Shares for every 4 fully paid-up Equity Shares held on the Record Date (i.e.
Wednesday, July 24, 2013)
Issue Closing Date Tuesday, August 20, 2013
Issue Opening Date Tuesday, August 6, 2013
Issue Price ` 40
Issue Proceeds The proceeds of the Issue that are available to our Company Issue Size The issue of upto 14,99,10,052 Equity Shares for an amount not exceeding `59,964.02 lakhs
Lead Manager/LM Axis Capital Limited
Letter of Offer The final letter of offer to be filed with the Stock Exchanges after incorporating the observations
received from the SEBI on the Draft Letter of Offer
Listing Agreement The listing agreements entered into between our Company and the Stock Exchanges
Monitoring Agency Axis Bank Limited, the Monitoring Agency appointed in accordance with Regulation 16 of the ICDR
Regulations
Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please see the chapter entitled
“Objects of the Issue” at page 81 of this Letter of Offer.
Non Institutional Investors All Investors including sub-accounts of FIIs registered with SEBI, which are foreign corporate or
foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Rights
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Term Description
Issue Equity Shares for a cumulative amount of more than ` 2 lakhs.
QFI
QFI shall mean a person who fulfills the following criteria:
i. Resident in a country that is a member of Financial Action Task Force (“FATF”) or a member of a
group which is a member of FATF; and ii. Resident in a country that is a signatory to International
organization of Securities Commission’s Multilateral Memorandum of Understanding or a signatory
of a bilateral Memorandum of Understanding with SEBI.
Provided that the person is not resident in a country listed in the public statements issued by FATF
from time to time on: (a) jurisidictions having a strategic Anti-Money Laundering / Combating the
Financing of Terrorism (“AML / CFT”) deficiencies to which counter measures apply; (b)
jusrisdictions that have not made sufficient progress in addressing the deficiencies or have not
committed to an action plan developed with the FATF to address the deficiencies;
Provided further, such person is not resident in India;
Provided further that such person is not registered with SEBI as FII or Sub-Account, Foreign Venture
Cpaital Investor.
QIB(s) or Qualified Institutional Buyer Applicants in the Issue who are qualified institutional buyers, as defined under Regulation 2(1)(zd) of
the ICDR Regulations
Record Date Wednesday, July 24, 2013
Registrar to the Issue Link Intime India Private Limited
Renouncee(s) Any person(s) who has/have acquired Rights Entitlements from Equity Shareholders
Rights Entitlements The number of Equity Shares that an Investor is entitled to in proportion to the number of Equity
Shares held by the Investor on the Record Date
SAF(s) Split Application Form(s)
SCSB(s) A Self Certified Syndicate Bank registered with SEBI, which acts as a banker to the Issue, and which
offers the facility of ASBA. A list of all SCSBs is available at http://www.sebi.gov.in
Stock Exchanges The BSE and the NSE where the Equity Shares of our Company are presently listed
Conventional and General Terms or Abbreviations
Term/Abbreviation Description/ Full Form
` or Rupees or INR or Rs. Indian Rupee
AGM Annual General Meeting
AS Accounting Standards in accordance with the Companies (Accounting Standards) Rules, 2006 as amended
BPLR Benchmark Prime Lending Rate
BSE BSE Limited
CDSL Central Depository Services (India) Limited
Central Government The Central Government of India
CIN Corporate Identification Number
Companies Act Companies Act, 1956
CY Calender Year
Depositories Act Depositories Act, 1996
Depository A depository registered with the SEBI under the Securities and Exchange Board of India (Depositories
and Participants) Regulations, 1996
DIN Director Identification Number
DP ID Depository Participant Identity
DP / Depository Participant Depository Participant as defined under the Depositories Act
EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation
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Term/Abbreviation Description/ Full Form
ECS Electronic Clearing Service
EGM Extra-Ordinary General Meeting
EPS Earnings Per Share
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999
FII Foreign Institutional Investor (as defined under the SEBI (Foreign Institutional Investors) Regulations,
1995), registered with the SEBI
Financial Year / Fiscal / FY
12 months ended March 31 of that particular year. In relation to our Company, Fiscal 2008 represents the
nine months ended March 31, 2008, Fiscal 2012 represents eighteen months ended September 30, 2012, Fiscal
2013 represents twelve months ending September 30, 2013
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
GoI Government of India
ICAI Institute of Chartered Accountants of India
ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2009, as amended from time to time
IFRS International Financial Reporting Standards
India Republic of India
Indian GAAP Generally accepted accounting principles followed in India
IT Act Income Tax Act, 1961
LLC Limited Liability Company
LIBOR London Inter Bank Offer Rate
MCA Ministry of Corporate Affairs, Government of India
Mutual Fund / MF Mutual fund registered with the SEBI under the SEBI (Mutual Funds) Regulations, 1996
NECS National Electronic Clearing Service
NR Non-Resident
NRE Account Non-Resident External Account
NRI Non-Resident Indian
NRO Account Non-Resident Ordinary Account
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
p.a. Per annum
PAN Permanent Account Number
PAT Profit After Tax
PBT Profit Before Tax
PLR Prime Lending Rate
QIP or Qualified Institutions
Placement
Qualified Institutions Placement in accordance with the provisions of Chapter VIII of the ICDR
Regulations
RBI Reserve Bank of India
Regulation S Regulation S under the Securities Act
SBI PLR Prime lending rate of State Bank of India
SEBI Securities and Exchange Board of India
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time
Securities Act U.S. Securities Act, 1933, as amended from time to time
SEZ Special Economic Zone
Sq.ft. square feet
STT Securities Transaction Tax
Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011, as amended from time to time
Tier 1 Cities Fairly well-established market, with potential of higher consumer pattern
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Term/Abbreviation Description/ Full Form
Tier 2 Cities Growing market, experiencing growing demand and investments
Tier 3 Cities Market yet to be established, where customers are relatively more price sensitive
UK United Kingdom
US / USA / United States United States of America
Technical and Industry Related Terms
Term/Abbreviation Description/ Full Form
2D 2 dimensional
3D 3 dimensional
6D 6 dimensional
ATPs Average ticket prices
C&S Cable and satellite
CGI Computer-generated imagery
DCI Digital Cinema Initiative
DI Digital intermediate
DTS Digital Theatre Surround
E&M Entertainment and media
IMAX Image Maximum
SPH Spend per head on food and beverages
TVC Television commercials
VFX Visual effects services
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NOTICE TO OVERSEAS SHAREHOLDERS
No action has been or will be taken to permit the Issue in any jurisdiction where action would be required for that purpose, except that the Draft
Letter of Offer has been filed with the SEBI for its observations. Accordingly, the Equity Shares may not be offered or sold, directly or
indirectly, and this Letter of Offer may not be distributed, in any jurisdiction, except in accordance with legal requirements applicable in such
jurisdiction. Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer
and, in those circumstances, this Letter of Offer must be treated as sent for information only and should not be copied or redistributed.
Accordingly, persons receiving a copy of this Letter of Offer should not, in connection with the issue of the Equity Shares or the Rights
Entitlements, distribute or send this Letter of Offer in or into the United States or any other jurisdiction where to do so would or might
contravene local securities laws or regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or
nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in this Letter of Offer.
Neither the delivery of this Letter of Offer nor any sale hereunder shall, under any circumstances, create any implication that there has been no
change in our Company's affairs from the date hereof or that the information contained herein is correct as at any time subsequent to the date of
this Letter of Offer.
NO OFFER IN THE UNITED STATES
The rights and the Equity Shares have not been and will not be registered under the United States Securities Act, 1933, as amended (“Securities
Act”), or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the
territories or possessions thereof (“United States” or “U.S.”) or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S
under the Securities Act (“Regulation S”)), except in a transaction exempt from the registration requirements of the Securities Act. The rights
referred to in this Letter of Offer are being offered in India, but not in the United States. The offering to which this Letter of Offer relates is not,
and under no circumstances is to be construed as, an offering of any securities or rights for sale in the United States or as a solicitation therein of
an offer to buy any of the said securities or rights. Accordingly, this Letter of Offer / Letter of Offer / Abridged Letter of Offer and the enclosed
CAF should not be forwarded to or transmitted in or into the United States at any time.
Neither our Company nor any person acting on behalf of our Company will accept subscriptions or renunciation from any person, or the agent of
any person, who appears to be, or who our Company or any person acting on behalf of our Company has reason to believe is, either a “U.S.
person” (as defined in Regulation S) or otherwise in the United States when the buy order is made. Envelopes containing CAF should not be
postmarked in the United States or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an
offer under this Letter of Offer, and all persons subscribing for the Equity Shares and wishing to hold such Equity Shares in registered form
must provide an address for registration of the Equity Shares in India. Our Company is making this issue of Equity Shares on a rights basis to
the Equity Shareholders of our Company and this Letter of Offer / Abridged Letter of Offer and CAF will be dispatched to Equity Shareholders
who have an Indian address. Any person who acquires rights and the Equity Shares will be deemed to have declared, represented, warranted and
agreed, (i) that it is not and that, at the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States
when the buy order is made, (ii) it is not a “U.S. person” (as defined in Regulation S), and does not have a registered address (and is not
otherwise located) in the United States, and (iii) is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws
and regulations.
Our Company reserves the right to treat as invalid any CAF which: (i) does not include the certification set out in the CAF to the effect that the
subscriber is not a “U.S. person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United
States and is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations; (ii) appears to our
Company or its agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided; or
(iv) where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements;
and our Company shall not be bound to allot or issue any Equity Shares or Rights Entitlements in respect of any such CAF. Our Company is
informed that there is no objection to a United States shareholder selling its rights in India. Rights Entitlements may not be transferred or sold to
any U.S. Person.
European Economic Area Restrictions
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, “Relevant Member
State”), an offer of the Equity Shares to the public may not be made in that Relevant Member State prior to the publication of a prospectus in
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relation to the Rights Entitlements or the Equity Shares which has been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that an offer of Equity Shares or Rights Entitlements to the public in that Relevant Member
State from and including the Relevant Implementation Date may be made:
(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose
corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last Fiscal; (2) a total balance sheet of
more than Euro 430.00 lakhs and (3) an annual net turnover of more than Euro 500.00 lakhs, as shown in its last annual or consolidated
accounts; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of Equity Shares shall result in the requirement for the publication by our Company or the Lead Manager pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any Equity Shares in any Relevant Member State means
the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to
enable an investor to decide to purchase or subscribe the Equity Shares, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and
includes any relevant implementing measure in each Relevant Member State. In the case of any Rights Entitlements or Equity Shares being
offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to
have represented, acknowledged and agreed that the Rights Entitlements or Equity Shares acquired by them in the Issue have not been acquired
on a nondiscretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may
give rise to an offer of any Rights Entitlements or Equity Shares acquired by them in the Issue to the public other than their offer or resale in a
Relevant Member State to qualified investors as so defined who are not financial intermediaries or in circumstances in which the prior consent
of the Lead Manager has been obtained to each such proposed offer or resale.
United Kingdom Restrictions
This Letter of Offer is only being distributed to, and is only directed at (i) persons who are outside the UK , or (ii) investment professionals
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“Order”) or (iii) high net worth
entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as “relevant persons”). The Equity Shares are only available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such Equity Shares will be engaged in only with, relevant persons. Any person who is not a relevant person
should not act or rely on this document or any of its contents.
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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA
Certain Conventions
References in this Letter of Offer to “India” are to the Republic of India. All references to the “US”, or the “U.S.A.” or the “United States” are
to the United States of America and all references to “UK” or the “U.K.” are to the United Kingdom.
Financial data
Unless stated otherwise, the financial data in this Letter of Offer is derived from our Company's audited and restated consolidated and stand
alone financial statements, as applicable. Our Company's Financial Year commences on April 1 and ends on March 31 of the following calendar
year except for:
Fiscal 2008, which commenced on July 1, 2007 and ended on March 31, 2008;
Fiscal 2012, which commenced on April 1, 2011 and ended on September 30, 2012; and
Fiscal 2013, which commenced on October 1, 2012 and will end on September 30, 2013.
Our Company prepares its financial statements in accordance with the generally accepted accounting principles in India, which differ, in certain
respects, from generally accepted accounting principles in other countries. Indian GAAP differs, in certain significant respects, from the
International Financial Reporting Standards. Our Company publishes its financial statements in Indian Rupees. Any reliance by persons not
familiar with Indian accounting practices on the financial disclosures presented in this Letter of Offer should accordingly be limited. We have
not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own
advisors regarding such differences and their impact on our financial data.
In this Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off and, unless
otherwise specified, all financial numbers in parenthesis represent negative figures.
For definitions, please see the chapter entitled “Definitions and Abbreviations” at page 1 of this Letter of Offer.
Market and Industry data
Unless stated otherwise, market, industry and demographic data used in this Letter of Offer has been obtained from market research, publicly
available information, industry publications and government sources. Industry publications generally state that the information that they contain
has been obtained from sources believed to be reliable but that the accuracy and completeness of that information is not guaranteed. Similarly,
internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified and neither our
Company nor the Lead Manager makes any representation as to the accuracy of that information. Accordingly, Investors should not place undue
reliance on this information.
Currency of presentation
All references in this Letter of Offer to “Rupees”, “`”, “Rs.”, “Indian Rupees” and “INR” are to Indian Rupees, the official currency of India.
All references to “U.S. $”, “U.S. Dollar”, ‘USD” or “$” are to United States Dollars, the official currency of the United States of America. All
references to “EUR”, “€” or “Euro” are to Euro, the official currency of the European Union. All references to “MUR” are to Mauritian rupee,
the official currency of Mauritius. All references to “MYR” or “RM” are to Malaysian Ringgit, the official currency of Malaysia. All references
to “NPR” are to Nepalese Rupee, the official currency of Nepal. All references to “GBP” or “£” are to Pound Sterling, the official currency of
the UK.
Please Note:
One lakh is equal to 100,000/100 thousand
One million is equal to 10,00,000/10 lakhs
One billion is equal to 1,000 million/100 crores
One crore is equal to 10 million/100 lakhs
9
Exchange rates
Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent of the Rupee price of the Equity
Shares on the Stock Exchanges. These fluctuations will also affect the conversion into U.S. Dollars of any cash dividends paid in Rupees on the
Equity Shares.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and the U.S. Dollar (in
Rupees per U.S. Dollar) based on the reference rates obtained from www.rbi.org.in. No representation is made that the Rupee amounts actually
represent such amounts in U.S. Dollars or could have been or could be converted into U.S. Dollars at the rates indicated, at any other rates or at
all.
12 months ended March 31 Period End Average* High* Low*
2009 50.95 45.91 52.06 39.89
2010 45.14 47.42 50.53 44.94
2011 44.65 45.58 47.57 44.03
2012 51.16 47.95 54.24 43.95
Eighteen months ended September 30, 2012 52.70 50.25 57.22 43.95
6 months ended March 31, 2013 54.39 54.16 55.70 51.62
Month ended Period End Average* High* Low*
January 2013 53.29 54.32 55.33 53.29
February 2013 53.77 53.77 54.48 52.97
March 2013 54.39 54.40 55.05 54.10
April 2013 54.22 54.38 54.88 53.94
May 2013 56.50 55.01 56.50 53.74
June 2013 59.70 58.40 60.59 56.42
Source: website at www.rbi.org.in
*Note: Average, High and low have been obtained from www.rbi.org.in as the average of all the rates available during the period, the maximum of all the rates
available during the period and the minimum of all the rates available during the period respectively. The reference rate on July 1, 2013 was U.S. $1.00 = `
59.15.
10
FORWARD LOOKING STATEMENTS
Certain statements in this Letter of Offer are not historical facts but are “forward-looking” in nature. Forward looking statements appear
throughout this Letter of Offer, including, without limitation, under the chapters entitled “Risk Factors”, “Management's Discussion and
Analysis of Financial Condition and Results of Operations”, “Industry” and “Business”. Our Company may, from time to time, make written or
oral forward-looking statements in reports to Equity Shareholders and in other communications. Forward-looking statements include statements
concerning our Company’s plans, objectives, goals, strategies, future events, future revenues or financial performance, capital expenditures,
financing needs, plans or intentions relating to acquisitions, our Company’s competitive strengths and weaknesses, our Company’s business
strategy and the trends our Company anticipates in the industries and the political and legal environment, and geographical locations, in which
our Company operates, and other information that is not historical information.
Words such as “believe”, “anticipate”, “estimate”, “seek”, “expect”, “continue”, “intend”, “predict”, “project”, “should”, “goal”, “future”,
“could”, “may”, “will”, “would”, “targets”, “aims”, “is likely to”, “plan” and similar expressions, or variations of such expressions, are intended
to identify forward-looking statements but are not the exclusive means of identifying such statements.
By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the
predictions, forecasts, projections and other forward-looking statements will not be achieved.
These risks, uncertainties and other factors include, among other things, those particularly listed under the chapter entitled “Risk Factors” at
page 11 of this Letter of Offer, as well as those included elsewhere in this Letter of Offer. Prospective investors should be aware that a number
of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in
such forward-looking statements. These factors include, but are not limited, to:
Our inability to effectively implement our business and growth strategies;
Our ability to effectively respond to competition and changes in technology;
Prevention of piracy;
Reduction in our advertising/sponsorship revenue;
Reduction or termination of our tax incentives;
Success of the films that we exhibit; and
Competition from other entertainment avenues.
For a further discussion of factors that could cause our Company’s actual results to differ, see the chapters entitled “Risk Factors” and
“Business” at pages 11 and 149, respectively. By their nature, certain market risk disclosures are only estimates and could be materially
different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been
estimated. Neither our Company nor the Lead Manager make any representation, warranty or prediction that the results anticipated by such
forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios
and should not be viewed as the most likely or standard scenario. Neither our Company nor the Lead Manager nor any of their respective
affiliates or advisors have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to
reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock
Exchanges requirements, our Company and Lead Manager will ensure that Investors in India are informed of material developments until the
time of the grant of listing and trading permissions by the Stock Exchanges.
11
SECTION II: RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Letter of Offer, including
the risks and uncertainties described below, before making an investment in our Equity Shares. The risks and uncertainties described in this
section are not the only risks that we currently face. Additional risks and uncertainties not known to us or that we currently believe to be
immaterial may also have an adverse effect on our business, results of operations and financial condition. If any of the following risks, or other
risks that are not currently known or are now deemed immaterial, actually occur, our business, results of operations and financial condition
could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment.
The financial and other related implications of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below.
However, there are risk factors where the effect is not quantifiable and hence the same has not been disclosed in such risk factors.
To obtain a complete understanding, you should read this section in conjunction with the chapters entitled “Business” and “Management's
Discussion and Analysis of Financial Condition and Results of Operations” as well as the other financial and statistical information contained
in this Letter of Offer.
Unless otherwise stated, the financial information of our Company used in this section is derived from our restated consolidated financial
statements.
Internal Risks
1. Our Auditors have qualified their audit report.
Our auditors have qualified their audit report in respect of our consolidated financial statements for six months ended March 31, 2013, Fiscal
2012 and Fiscal 2011.
In the audit report on consolidated financial results for six months ended March 31, 2013, our Auditors have drawn attention to the recognition
of Deferred Revenue Expenditure aggregating ` 1,040.41 lakhs pertaining to start up and stabilization costs of the business of Reliance
MediaWorks Entertainment Services Limited, one of our subsidiaries, since the recognition is not in accordance with the relevant accounting
standard.
If our Company had recognised these losses in the six months ended March 31, 2013, the loss for the said period would have been higher by `
1,040.41 lakhs.
In the audit report on consolidated financial results for Fiscal 2012, our Auditors have drawn attention to the recognition of Deferred Revenue
Expenditure aggregating ` 1,213.80 lakhs pertaining to start up and stabilization costs of the business of Reliance MediaWorks Entertainment
Services Limited, one of our subsidiaries, since the recognition is not in accordance with the relevant accounting standard.
If our Company had recognised these losses in Fiscal 2012, the loss for the said period would have been higher by ` 1,213.80 lakhs.
In the audit report on consolidated financial results for Fiscal 2011, our Auditors have drawn attention to the recognition of Deferred Revenue
Expenditure aggregating ` 1,734.00 lakhs pertaining to start up and stabilization costs of the business of Reliance MediaWorks Entertainment
Services Limited, one of our subsidiaries, since the recognition is not in accordance with the relevant accounting standard.
If our Company had recognised these losses in Fiscal 2011, the loss for the said period would have been higher by ` 1,734.00 lakhs.
Further, our Auditors have in the report on restated standalone financial information drawn attention to the fact that the networth of our
Company has fully eroded on account of loss of ₹91,016.62 lakhs (as restated) for Fiscal 2012 on a consolidated basis and ₹70,356.34 lakhs
on a standalone basis. In addition, our Auditors have in the report on restated consolidated financial information drawn attention to the fact that
the networth of our Company has fully eroded on account of loss of ₹34,044.77 lakhs (as restated) for the six months ended March 31, 2013 on
a consolidated basis and ₹27,593.15 lakhs on a standalone basis.
The erosion of networth, in view of the auditors, indicates an uncertainty that may cast a doubt about our Company’s ability to continue as a
going concern. We cannot assure you that our net worth will not decrease further.
12
For further details, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.
2. We are making operating losses for the last 5 years since 2009 onwards and continue to incur losses. The company has incurred net
losses of `91,016.62 lakhs during the 18 month period ending on September 30, 2012. At present, we have a negative net worth.
As per our audited restated financial statements, we incurred net losses of `32,796.95 lakhs in Fiscal 2011, on a consolidated basis and
`24,348.00 lakhs on a standalone basis. Further, for Fiscal 2012 and for the six months ended March 31, 2013, we incurred a net loss of `
91,016.62 lakhs and ` 34,044.77 lakhs, respectively on a consolidated basis and ` 70,356.34 lakhs and ` 27,593.15 lakhs, respectively on a
standalone basis as per our audited restated financial statements. The net losses are on account of charges paid towards loans taken, depreciation
and write-off for properties where we have decided to exit.
Further, our net worth as at March 31, 2013, reduced to ` (92,707.78) lakhs on a consolidated basis and ` (47,014.66) lakhs on a standalone
basis, as per our audited restated financial statements. For further details, please see the chapter entitled “Financial Statements” at page F-1 of
this Letter of Offer.
In addition, we incurred losses (as per our audited restated financial statements), for the previous five (5) financial periods as set out below.
Sl.
No.
Fiscal Net operating loss
#(in ` lakhs)
(Consolidated)
Net loss (in ` lakhs)
(Consolidated)
Net operating loss
#(in ` lakhs)
(Standalone)
Net loss (in ` lakhs)
Standalone
1. 2009 (6,942.17) (7,787.97) (4,920.31) (4,937.01)
2. 2010 (13,281.09) (12,803.24) (8,797.00) (8,797.00)
3. 2011 (32,427.06) (32,796.95) (24,348.00) (24,348.00)
4. 2012 (90,007.31) (91,016.62) (70,356.34) (70,356.34)
5. Six months ended March 31,
2013
(33,578.17) (34,044.77) (27,593.15) (27,593.15)
# Net operating loss is calculated as net loss for the year, excluding provision for tax and share of loss allocated to minority and impacts of scheme.
Further, during Fiscal 2009, pursuant to a Court sanctioned scheme of amalgamation with our wholly owned subsidiaries Adlabs Multiplex and
Theatres Limited, Adlabs Multiplex Limited, Rave Entertainment Private Limited and Mahimna Entertainment Private Limited we had recorded
an adjustment for diminution in value of assets (production and distribution rights, fixed assets, investments, debtors and loans and advances)
aggregating `15,669.70 lakhs by debiting the same to the capital reserve instead of the profit and loss account. If we debited the profit and loss
account instead, the loss before tax for Fiscal 2009 would have been higher by the said amount.
Our ability to pay dividends will depend upon a number of factors, including, amongst others, our profitability, our results of operations,
earnings, capital requirements and surplus, general financial conditions, contractual restrictions and applicable Indian and foreign legal
restrictions. Our financial position may accordingly be perceived adversely by external parties such as customers and bankers, which may affect
our reputation and business operations.
3. The proposed issue proceeds of `59,964.02 lakhs will mainly go towards payment of promoter’s debt and may not help in substantially
reviving the company.
We have over the years availed of debt funding from Reliance Capital, one of our Promoters, primarily in the form of inter-corporate debt
(“ICD”). As on May 31, 2013 loans aggregating ` 1,14,783.43 lakhs are outstanding from Reliance Capital. We intend to repay ₹45,000 lakhs
out of the Issue Proceeds to Reliance Capital since we believe that this will assist in reducing our total debt component and to enable us to better
leverage our equity. There can be no assurance, however, that repaying the said debt will help substantially in reviving our Company.
4. There are certain criminal cases pending against us, our Directors, our Promoters, our Group Companies and our Joint Ventures.
There are 127 criminal proceedings pending against us, our Directors, our Promoters, our Group Companies and our Joint Ventures before
various fora and are at various stages of adjudication. The impact of these litigations cannot be quantified. For details of all the pending criminal
13
actions and cases against us, our Directors, our Promoters and our Group Companies please see the chapter entitled “Outstanding Litigations
and other Material Developments” at page 276 of this Letter of Offer.
In addition to the above, there are various litigations outstanding involving our Company, our Subsidiaries, our Joint Ventures, our Directors,
one of our Promoters and our Group Companies. These legal proceedings are pending at different levels of adjudication before various fora. The
amounts claimed in these proceedings have been disclosed to the extent ascertainable and quantifiable and include amounts claimed jointly and
severally from our Company and other parties. Should any new developments arise, such as any change in applicable Indian law or any rulings
against our Company by appellate courts or tribunals, our Company may need to make provisions in its financial statements that could increase
expenses and current liabilities. Any adverse decision may have an adverse effect on our Company’s business, results of operations and financial
condition. The brief details of such outstanding litigation as of the date of this Letter of Offer are as follows:
Litigation against our Company
Sr. No. Nature of litigation Number of outstanding cases Aggregate approximate amount involved
(in ` lakhs)*
1. Criminal 1 NA
2. Civil 32 481.52
3. Winding up cases 2 324.24
4. Arbitration 2 7,859.97
5. Tax 35 6,923.80
6. Labour 6 14.53
7. Consumer 19 15.05
8. Enforcement Directorate
investigation
1 NA
Litigation against our Subsidiaries and Joint Ventures
Sr. No. Name of Subsidiary/Joint
Venture
Nature of litigation Number of outstanding
cases
Aggregate approximate
amount involved
(in ` lakhs)*
1. Reliance MediaWorks
Entertainment Services
Limited
Tax 2 536.88
2. Reliance MediaWorks
Theatres Limited
Civil 2 1.50
3. Swanston Multiplex Cinemas
Private Limited
Criminal 3 NA
4. Swanston Multiplex Cinemas
Private Limited
Civil 1 32.95
5. Swanston Multiplex Cinemas
Private Limited
Labour 1 NA
6. Swanston Multiplex Cinemas
Private Limited
Tax cases 3 157.81
*Litigation that is not quantifiable is represented as NA
Litigation against our Directors
Sr. No. Name of Director Nature of litigation Number of outstanding
cases
Aggregate approximate
amount involved (in ` lakhs)*
1. Gautam Doshi Criminal 1 NA
2. Sujal Shah Civil 2 ` 2,800.00 *Litigation that is not quantifiable is represented as NA
Note: With respect to the proceedings before the ED in relation to the issue of FCCBs by our Company in 2006, as disclosed in risk factor no. 16, the summons
14
have also been issued to Anil Sekhri, one of our non-executive Directors.
Litigation against our Promoter
Sr. No. Name of Promoter Nature of litigation Number of outstanding
cases
Aggregate approximate
amount involved
(` in lakhs)*
1. Reliance Capital Limited Criminal 44 NA
2. Reliance Capital Limited Civil 3 921.50
3. Reliance Capital Limited Investor Related Disputes
(monetary)
242 9.42
4. Reliance Capital Limited Consumer 279 1,55.44 *Litigation that is not quantifiable is represented as NA
Litigation against our Group Companies
Sr. No. Name of Group Company Nature of litigation Number of outstanding
cases
Aggregate approximate
amount involved
(` in lakhs)*
1. Reliance Broadcast Network
Limited
Civil 13 205.97
2. Reliance Broadcast Network
Limited
Tax 2 70.57
3. Reliance Broadcast Network
Limited
Labour 5 31.29
4. Reliance Broadcast Network
Limited
Stamp Duty 1 8.19
5. Reliance Broadcast Network
Limited
Notices 5 1,421
6. Reliance Capital Asset
Management Limited
Civil 18 48.47
7. Reliance Capital Asset
Management Limited
Consumer 23 185.00
8. Reliance General Insurance
Company Limited
Civil 1 14.33
9. Reliance General Insurance
Company Limited
Consumer 6,659 5,546.42
10. Reliance General Insurance
Company Limited
Insurance claims 26,411 29,835.17
11. Reliance General Insurance
Company Limited
Arbitration 1 100
12. Reliance Securities Limited Civil 5 1,924.42
13. Reliance Securities Limited Arbitration 4 41.92
14. Reliance Securities Limited Consumer 7 45.43
15. Reliance Securities Limited Labour 1 NA
16. Reliance Money Express
Limited
Civil 1 1.03
17. Reliance Life Insurance
Company Limited
Criminal 102 NA
18. Reliance Life Insurance
Company Limited
Civil 116 655.94
19. Reliance Life Insurance Arbitration 1 2,109.42
15
Sr. No. Name of Group Company Nature of litigation Number of outstanding
cases
Aggregate approximate
amount involved
(` in lakhs)*
Company Limited
20. Reliance Life Insurance
Company Limited
Tax 14 7,955.58
21. Reliance Life Insurance
Company Limited
Labour 10 NA
22. Reliance Life Insurance
Company Limited
Consumer 733 2,588.17
23. Reliance Life Insurance
Company Limited
Insurance claims 7,426 NA
24. Reliance Life Insurance
Company Limited
Notices 1,148 NA
25. Reliance Home Finance
Limited
Consumer 10 0.94
26. Indian Commodity Exchange
Limited
Civil 2 NA
27. Reliance Exchangenext Limited Civil 1 NA
28. Quant Capital Private Limited Civil 2 NA
29. Quant Broking Private Limited Civil 1 NA
30. Quant Securities Private
Limited
Civil 1 NA
31. Quant Commodities Private
Limited
Civil 1 NA
32. Quant Capital Advisors Private
Limited
Civil 1 NA
33. Quant Capital Finance and
Investments Private Limited
Civil 1 NA
34. Quant Investment Service
Private Limited
Civil 1 NA
35. QCAP Trade Private Limited Civil 1 NA
36. Reliance Asset Reconstruction
Company Limited
Civil 1 NA
*Litigation that is not quantifiable is represented as NA
Action taken by SEBI against Promoter Group / Group Companies in the past:
Sl. No. Name of Promoter Group / Group company Action taken by SEBI
1. Reliance Securities Limited Two show cause notices were issued by SEBI to Reliance Securities
Limited (RSL) on August 9, 2010 and August 31, 2010, alleging
violation of the provisions of the SEBI (Stock Brokers and Sub-
brokers) Regulations, 1992 in respect of certain irregularities in
operations. RSL, subsequently, approached SEBI under the SEBI
guidelines for Consent Orders without admitting to, or denying,
guilt. The terms of consent were accepted by SEBI. The accepted
terms of consent were issued in the form of a Consent Order on June
9, 2011. According to the terms of the Consent Order, amongst other
things, RSL was directed to pay `25,00,000 as settlement charges
for settlement of the matter. Pursuant to the said Consent Order,
Reliance Securities Limited paid `25,00,000 and the said
proceedings stand disposed off.
16
Sl. No. Name of Promoter Group / Group company Action taken by SEBI
2. Reliance Equities International Private Limited(1)
SEBI conducted an inspection of books and records of Reliance
Equities International Private Limited (“REIPL”) for the period
April 1, 2008 to March 31, 2009. REIPL had submitted its responses
on various findings / comments of SEBI. Subsequently, SEBI by its
letter date August 31, 2010 directed REIPL to rectify certain defects
which it had failed to rectify. REIPL submitted its response to SEBI
on September 24, 2010 confirming the corrective steps taken.
3. Reliance Share & Stock Brokers Private Limited SEBI, vide order dated December 11, 2006 had suspended Reliance
Share & Stock Brokers Private Limited’s (RSSBPL) registration as
stock broker for a period of 4 (four) months. Thereafter, RSSBPL
filed an appeal No. 151 of 2006 with Securities Appellate Tribunal
(SAT) challenging SEBI’s order. Meanwhile, SEBI through its letter
dated November 30, 2007 has agreed to the consent terms proposed
by RSSBPL of settling the matter, among other things, by payment
of `50,00,000. However, the payment under the abovementioned
letter from SEBI was subject to approval of consent terms by SAT.
SEBI vide order no. EFD / DRAIII / VRP / SS / 109671 / 2007
dated November 30, 2007 has accepted RSSBPL consent application
for a consent order towards settlement of the dispute with them. The
dispute was settled without admitting or denying the guilt under the
consent terms proposed by RSSBPL and as approved by the
independent high power advisory committee (HPAC) of SEBI.
4. Reliance Capital Limited SEBI had issued a letter (no. MIRSD-4/DP/INSP/OW/10677/2010)
dated July 1, 2010 to Reliance Capital in respect of certain
irregularities / deficiencies in its depository operations.
Reliance Capital has submitted the detailed reply vide letter dated
July 20, 2010 confirming the corrective steps taken.
5. Reliance Capital Asset Management Limited 1. SEBI on June 3, 2009 directed Reliance Capital Asset
Management Limited to withdraw one particular advertisement
pertaining to the NFO of Reliance Infrastructure Fund of
Reliance Mutual Fund for non compliance with regulation
30(1) of Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996.
SEBI vide order dated January 12, 2010 disposed off the
proceedings and directed Reliance Capital Asset Management
Limited to abide by the aforesaid regulations.
2. SEBI had imposed a fine of `6,00,000 on Reliance Mutual Fund
in March 2003 for breach of investment restrictions which was
duly paid.
17
IRDA Penalties
Sl. No. Name of Promoter Group /
Group company
Details Paid on Penalty imposed
1. Reliance General Insurance
Company Limited
Co-insurer – Breach by lender May 29, 2006 1,000
Co-insurer – Breach by lender August 28, 2006 1,000
Co-insurer- Breach by lender August 28, 2006 1,000
Predatory Pricing December 5, 2006 50,00,000
Breach of File & Use Guidelines
(Health wise policy)
July 28, 2009 20,00,000
2. Reliance Life Insurance Company
Limited
Payment of excess referral fees
than envisaged in the referral
guidelines and deviation in the
File & Use procedure particularly
in group products in violation of
circular IRDA/Cir. No.
01/IRDA/ACTL/MC/2006-07
dated 12/7/2006
August 12, 2010 10,00,000
5. Gautam Doshi, one of our non-executive Directors, is currently being investigated by the Central Bureau of Investigation.
The Central Bureau of Investigation (CBI) has registered a first information report (FIR) dated October 21, 2009 pertaining to allegations of
criminal conspiracy and criminal misconduct, in respect of telecommunications licences and spectrum allotted by the Government of India inter
alia to SwanTelecom Limited in 2008. Pursuant to the FIR, the CBI filed a charge sheet dated April 2, 2011 in the Court of Special Judge (CBI),
New Delhi, against various persons, including one of our non-executive Directors, Gautam Doshi. The Special Judge (CBI) has framed charges
against all the persons specified in the charge sheet.
Proceedings in the matter, including a writ petition that Gautam Doshi has preferred to the High Court at Delhi, are ongoing. For further details,
please see the chapter entitled “Outstanding Litigation and Material Developments” at page 285 of this Letter of Offer.
6. Our net worth has decreased substantially over the last three years which restricts our ability to invest in our overseas subsidiaries and
joint ventures and may hamper our growth plans.
As per our audited restated financial statements, our Company’s net worth on a standalone basis has decreased from `66,641.08 lakhs as on
March 31, 2008 to `(47,014.66) lakhs as on March 31, 2013 and on a consolidated basis has decreased from `67,783.05 lakhs as on March 31,
2008 to `(92,707.78) lakhs as on March 31, 2013. In terms of the applicable FEMA regulations, we may not invest in our joint ventures or
wholly owned subsidiaries situated outside India in excess of 400% of our Company’s net worth as on the last audited balance sheet. This limit
includes contribution to the capital of, loans granted to, and guarantees issued to or on behalf of, the overseas joint ventures or wholly owned
subsidiaries. As on March 31, 2013 we have invested ` 67,249.29 lakhs in our overseas subsidiaries and joint ventures. Accordingly, we will not
be able invest in our overseas joint ventures or wholly owned subsidiaries till our net worth increases significantly, which may have an adverse
impact on our future growth plan.
7. If we are unable to effectively implement our business and growth strategies, our results of operations may be adversely affected.
Our success will depend, in large part, on our ability to effectively implement our business and growth strategies. We cannot assure you that we
will be able to execute our strategies in a timely manner or within budget estimates or that we will meet the expectations of targeted customers.
We believe that our business and growth strategies will place significant demands on our management and other resources and will require us to
develop and improve operational, financial and other internal controls. Our business and growth strategies may require us to incur further
indebtedness. Any inability to manage our business and growth strategies could adversely affect our business, financial condition and results of
operations.
As part of our growth strategy, we propose to increase the number of cinema theatres we operate in India and other countries with Indian
diaspora. When establishing new cinema theatres, we may encounter cost overruns or delays in implementation due to, among other causes,
18
delays in construction, receipt of government approvals or delivery of equipment by suppliers. For instance, the Image Maximum (IMAX)
Dome theatre scheduled to be established in Mumbai in December 2000 was not established until March 2001. In addition, the four screen
multiplex project scheduled to be established in Mumbai in September 2001 was not fully established until November 2001. In the future, if any
cinema theatres are not established in a timely manner, or at all, our business and results of operations may be adversely affected. Further, we
were scheduled to complete construction of all three stages of our studio by December 2011. However, while we completed one stage by
January 2011, we are yet to complete construction of the other stages.
New cinema theatres we establish may not achieve anticipated levels of patronage and as a result may not perform as expected. The occurrence
of any of these risks could adversely affect our business, financial condition, and results of operations.
8. Conditions and restrictions imposed on us by the agreements governing our indebtedness could adversely affect our ability to operate
our businesses.
Certain of our financing agreements include conditions and restrictive covenants that require us to obtain consents from the respective lenders
prior to carrying out certain activities and entering into certain transactions. Our lenders have certain rights to determine how we operate our
businesses, which, among other things, restrict our ability to raise additional equity, pay dividends, make investments, effect a change in
ownership, amend our Memorandum and Articles of Association, undertake a merger, amalgamation or reconstruction, make changes in our
management, incur additional long-term indebtedness, sell assets or acquire other businesses. We cannot assure you that we will be able to
obtain approvals to undertake any of the activities restricted under these financial covenants as and when required in respect of such restrictions
or comply with such covenants or other covenants in the future.
Further, these debt obligations are typically secured by a combination of security interests over our assets and hypothecation of movables and
future receivables. The security allows our lenders to sell the relevant assets in the event of our default, convert outstanding debt into equity,
nominate directors to our Board or exercise other such related rights.
Under such financing agreements, we are also required to comply with certain financial covenants, such as the maintenance of certain specified
financial ratios, including a ratio of gross borrowings to tangible net worth, which may limit our ability to obtain additional funds. We currently
are not in compliance with some of these financial ratios; however the relevant lenders have not yet recalled any of these loans. If we are unable
to maintain these ratios, the lenders are entitled to declare the loans due immediately. In addition, certain of the loan agreements contain cross-
default provisions, whereby a default of any of the covenants under any one of financing agreements may result in an event of default under
other financing agreements or respective concession or licence agreements. If we do not repay the outstanding loan amounts in a timely manner
or at all, our business, reputation and financial condition may be adversely affected. Further, our Company has used short term borrowings for
long term investments during Fiscals 2012, 2011 and 2010. For further details, please see the chapter entitled “Financial Statements” at page F-
1 of this Letter of Offer.
If we incur more debt or there is an increase in the applicable interest rates for our existing debt, our interest payment obligations will increase
and we may become subject to additional conditions from lenders, including additional restrictions on the operation of our businesses. The
financing agreements that we are party to or which we may enter into in the future may be unilaterally terminated by our lenders or the lenders
could decline to lend to us under such agreements. Further, we cannot assure you that we will be able to raise additional financing on favourable
terms, or at all. Any failure in the future to obtain sufficient financing could result in a lack of cash flow to meet our operating requirements and,
therefore, could have an adverse effect on our business, financial condition and results of operations.
9. Contingent liabilities that have not been provided for could adversely affect our financial condition.
As of March 31, 2013 we had certain contingent liabilities as per our audited restated financial statements, that had not been provided for, as
disclosed in our restated consolidated financial statements. The details of such contingent liabilities are as follows: (` in lakhs)
Particulars As of March 31, 2013
Consolidated Standalone
Central excise 2,555.90 2,555.90
Service tax 204.90 204.90
Income tax 2,418.30 2,418.30
Entertainment tax 14,112.40 14,112.40
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Particulars As of March 31, 2013
Value Added Tax 522.80* 522.80*
Claims against our Company not acknowledged
as debts 8,152.10
8,152.10
Guarantees given on behalf of Subsidiary
Companies -
16,443.90
Contingent liabilities of Subsidiary Companies 536.90 -
Share of contingent liabilities in the Joint
Ventures 99.30
-
* The Maharashtra Value Added Tax Act, 2002 lists the scheduled entry, inter alia, “Copy right” w.e.f. 1 April 2005. Pursuant to this enactment / scheduled
entry, the entertainment industry has made a written representation to the Finance Minister, Maharashtra for deletion of the scheduled entry from the Act.
Similar representation was made by the industry in some other states, as a result of which the Maharashtra Value Added Tax Act, 2002 was modified to delete
this scheduled entry. Our Company is awaiting a positive response from the Ministry of Finance in respect of the assurance given. Accordingly, no provision
(amount not currently ascertainable) has been made in the books of accounts.
With effect from the May 1, 2011 the Maharashtra Value Added Tax Act, 2002 was amended to exempt tax on “Copyrights” for distribution and exhibition of
cinematographic films in theatres and cinema halls.
If any of these liabilities materialises, our financial condition could be adversely affected. For further details, please see the chapter entitled
“Financial Statements” at page F-1 of this Letter of Offer.
10. The objects of the Issue include the utilization of the proceeds of the Issue to repay existing loans from one of our Company’s Promoter.
Our Company intends to use a portion of the Net Proceeds to discharge some of the existing loans availed by our Company from Reliance
Capital Limited, one of our Company’s Promoter. We propose to repay ` 45,000 lakhs to one of our Promoter, Reliance Capital Limited, which
constitutes 75% of the issue size. To the extent that portion of the existing loans are adjusted as share application money, our Company will not
receive fresh funds. As at May 31, 2013 we had availed of loans aggregating ` 114,783.43 lakhs from Reliance Capital Limited constituting
50.67% of our aggregate loan amount. For further details, please see the chapter entitled “Capital Structure” at page 69 of this Letter of Offer.
Additionally, if the Company’s other Equity Shareholders do not subscribe to the Issue the proportionate share of equity held by the Company’s
Promoters will increase. This will dilute the relative interest of the Company’s other Equity Shareholders. For further details, please see the
chapter entitled “Objects of the Issue” at page 81 of this Letter of Offer.
11. Our Company’s high debt-equity ratio may hamper our ability to avail of future debt
As per our audited restated financial statements, as of March 31, 2013, our Company’s total outstanding borrowing was `2,27,834.90 lakhs on a
consolidated basis and `2,22,401.50 lakhs on a standalone basis against our Company’s net worth of ` (92,707.78) lakhs as of March 31, 2013
on a consolidated basis and ` (47,014.66) lakhs on a standalone basis. As per our audited restated financial statements, our EBITDA on a
consolidated basis was of ` (5,923.00) lakhs and ` (20,738.91) lakhs before exceptional items for six months ended March 31, 2013 and Fiscal
2012, respectively. Further, for the six month ended March 31, 2013 and Fiscal 2012, our EBITDA on stand alone basis before exceptional
items was ` (4,137.17) lakhs and ` (13,278.54) lakhs, respectively. Further, as per our audited restated financial statements, our Company’s total
outstanding borrowing increased to ` 226,518.80 lakhs as on May 31, 2013. Our Company’s high debt leverage may make it difficult for us to
raise finance, on terms favourable to us or at all. While one of the objects of this Issue is to pre-pay / repay some of our Company’s existing
borrowings, there can be no assurance that the improvement in the debt-equity ratio, upon repayment of such existing borrowings, will facilitate
raising additional debt on favourable terms. If our Company’s highly levereaged debt profile continues, or worsens, it will have a significant
impact on our business, results of operations and financials.
12. Our Company has delayed the repayment of certain loans.
As per our audited restated financial statements, during Fiscal 2012, our Company has delayed the repayment of the following loans:
20
Nature of loan Principal amount (` in
lakhs)
Due date Date of payment
Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012
Secured term loan 13,333.33 March 31, 2012 May 11, 2012
Secured term loan 1,250.00 December 16, 2011 December 30, 2011
Secured term loan 1,000.00 May 3, 2012 May 6, 2012
Delay in repayment of loans may not only constitute a default under the respective loan agreements but may also affect our ability to raise
further debt. Consequently, our inability to raise further debt may adversely affect our business, financial condition and results of operations.
While none of the loans has been recalled by any lender so far, there can be no assurance that they may not be recalled in future.
13. If we cannot respond effectively to competition, our financial condition and results of operations may be adversely affected.
We face competition in the various segments of the entertainment and media industry in which we operate. As per our audited restated financial
statements, during six months ended March 31, 2013, Fiscal 2012, Fiscal 2011 and Fiscal 2010, our theatrical exhibition business constituted
69.42%, 69.99%, 65.39% and 64.37%, respectively of our total consolidated revenues. We cannot assure you that this business segment will
continue to contribute to our consolidated revenue at similar levels. Increased competition resulting from the growth of other theatrical
exhibitors’ operations may reduce attendance in our cinema theatres, which could adversely affect our financial condition and results of
operations.
In addition, our theatrical exhibition business competes with alternative film delivery methods, including cable television, Internet, digital video
disc, satellite and pay-per-view services. Film distributors, while licensing a film to the domestic theatrical exhibition industry, have
traditionally refrained from making the same film available through other film delivery methods for a certain period of time, a practice
commonly referred to as the “theatrical release window”. If film distributors significantly reduce the duration of the theatrical release window,
the appeal of viewing films in cinema theaters may be reduced, which may adversely affect our business, financial condition and results of
operations.
We are also engaged in the business of television content production, an area which has witnessed increasing levels of competition.
Our costs related to marketing and human resources may increase due to such increased competition. Further, our competitors may expand their
financial and other resources in an attempt to increase their market share. If we are unable to adequately address such competitive pressures, our
business and financial condition may be adversely affected.
14. Piracy may reduce attendance at our cinema theatres, which may adversely affect our business and financial condition.
Piracy, i.e., making available unauthorised copies of media content, software or other digital content at highly reduced prices or without charge,
is prevalent throughout the world, including India. Anti-piracy laws may not be adequate or may be inadequately enforced in the jurisdictions in
which we operate. The availability of pirated copies of films may cause some of our potential customers to be less inclined or completely
disinclined to visit cinema theatres, which may adversely affect our business and results of operations.
Our business is highly dependent on the maintenance of intellectual property rights in the entertainment products and services we create and
exhibit. Piracy of media products, including digital and Internet piracy and the sale of counterfeit consumer products, may decrease revenues
received from the exploitation of our products. The move to digital formats has facilitated high-quality piracy, particularly through the Internet
and cable television. We may face difficulties in monitoring infringement of our intellectual property rights. The Indian film industry
experiences significant amounts of losses due to piracy. Existing copyright and trademark laws in India afford only limited practical protection
and the lack of Internet-specific legislation relating to trademark and copyright protection creates a further challenge for us to protect our content
delivered through such media. Notwithstanding the anti-piracy measures we take, we cannot assure you that we will be able to prevent piracy of
our products.
15. We have no prior experience in establishing or operating studios.
We are in the process of establishing an approximately 200,000 square feet studio in Film City, Mumbai, comprising of three studio buildings
with eight sound stages with appropriate noise control and other features. A part of this studio was completed in January 2011 and we expect to
21
complete the remaining portion of the studio by December, 2013. While we have been operating one studio building with three sound stages
since January, 2011, we have not in the past established or operated studios. As per our audited restated financial statements, during Fiscal 2012
and six months ended March 31, 2013, we generated ` 1,436.75 lakhs and ₹ 344.58 lakhs, respectively, from the studio, constituting less than
2% of our total revenues. Our studios may be subject to various operational risks, such as unexpected maintenance or technical problems,
accidents, power interruptions or equipment failures. Due to our lack of experience in operating studios, we may be unable to prevent or address
such risks appropriately. Further, any studio that we establish and operate may not perform as expected. Any failure to successfully operate
studios may adversely affect our business, financial condition and results of operations.
16. Our Company is subject to certain proceedings before the Directorate of Enforcement in relation to the issue of FCCBs by our Company
in 2006 and summons have been issued in relation thereto. Any adverse outcome in relation to the proceedings may have a detrimental
impact on our reputation and financial condition.
On July 15, 2013, Anil Sekhri, a non-Executive Director of the Company appeared personally before the ED pursuant to summons issued on
July 3, 2013 with respect to the issue of FCCBs by the Company in 2006. Similar summons were issued to Anil Sekhri, to Manmohan Shetty,
our ex-Chairman and Managing Director, and to one of our key management personnel, in the past. The correspondence in this regard required
the persons to provide information and documents inter alia in respect of the issue of FCCB’s. Our Company has provided the information
sought by the ED through its replies dated September 4, 2012 and April 18, 2013.
Further to Anil Sekhri’s appearance in response to the summons, the ED has issued fresh summons to one of our key management personnel
directing him to appear before it on the July 22, 2013. The hearing was adjourned.
Any adverse outcome may adversely affect our reputation and financial condition. For further details, please see chapter entitled ‘Outstanding
Litigation and Material Developments’ on page 279 of this Letter of Offer.
17. Our pro forma financial statements have not been audited or reviewed by our Auditors.
Our Company is proposing to undertake internal restructuring of its business by transferring its whole or part of theatrical exhibition business
and film and media services to certain of its wholly owned subsidiaries which it is yet to identify and our shareholders have approved the same
proposal on February 21, 2012 through postal ballot. Accordingly, our Company has prepared pro forma financial statements which assume the
transfer of our Company’s film and media services and theatrical exhibition business division to our subsidiaries at book values. For the purpose
of the transfer, it is assumed that all assets which form part of business division assets and business division liabilities are transferred to the
subsidiaries of the Company and the amount receivable as consideration on transfer is shown as a short term loan and advance recoverable from
these subsidiaries.
The pro forma financial information has been prepared by our management and has not been audited or reviewed by our Auditors. It may not
necessarily be indicative of the net results of operations that might have been achieved by the Company for period or dates indicated, nor is it
necessarily indicative of the future results of the Company after such proposed internal restructuring.
For further details, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.
18. We have not received consents for transferring our film and media services and theatrical exhibition business to our subsidiaries from
some of our lenders.
We are in the process of transferring our film and media services and theatrical exhibition business to certain of our wholly owned subsidiaries
which we will identify in due course. The shareholders of our Company have approved the transfer through a resolution dated February 21,
2012.
In terms of the financing agreements with our lenders we are required to obtain their prior consent for, amongst other, transferring our business.
While we have received consents from certain lenders, we have not received consent from all. Further, the consents received are also subject to
certain conditions including:
22
that there should be no material change to the security offered to the lenders and the assets transferred should continue to secure the
exposure;
the relevant subsidiaries or our Company, as the case may be, should ensure sufficient cash flows to meet the repayment obligations;
that our Company has received necessary approval from all lenders; and
that we would continue to comply with the terms and conditions of the financing documents.
Non-receipt of the requisite consents in time or at all from the lenders may either hamper the process of transferring our film and media
services and theatrical exhibition business to certain of our wholly owned subsidiaries or we may be forced to repay the debt due to them.
19. Changes in technology may render our current technologies obsolete or require us to undertake substantial capital investments, which
could adversely affect our results of operations.
Technologies currently under development or that may be developed in the future, if employed by our existing competitors or new entrants, may
adversely affect our competitiveness. The development and application of new technologies involve time, substantial cost and risk. Our
competitors may be able to deploy new technologies before us and we cannot predict how emerging and future technological changes will affect
our operations or the competitiveness of our services. If we fail to successfully implement new technologies in a timely manner or at all, our
business, financial condition and results of operations may be adversely affected.
We are engaged in the business of film and media services and currently have a production laboratory in Mumbai and a post-production services
facility in Burbank, USA and London, UK. As per our audited restated financial statements, our film and media services business generated `
6,353.40 lakhs, ` 27,802.90 lakhs, `23,265.50 lakhs and `15,764.30 lakhs for six months ended March 31, 2013, Fiscal 2012, Fiscals 2011 and
2010, respectively, which constituted 18.07%, 22.55%, 27.82% and 21.72%, respectively, of our total consolidated revenues for the said
periods. However, new technologies may replace traditional film production methods which may adversely affect our business and results of
operations.
In relation to our theatrical exhibition business, digital projection technology may replace traditional analogue film projection technology in
cinema theatres. Digital projection technology is more expensive to implement and operate than analogue film projection technology. While 355
of our screens were equipped with digital projection technology as of May 31, 2013, to remain competitive in the future, we may be required to
implement and operate digital projection technology in more of our cinema theatres, which would require significant investments of time,
financial resources and personnel attention that may adversely affect our financial condition. Further, if we are unable to implement digital
projection technology in our cinema theatres in a timely manner, or at all, we may lose patronage which could adversely affect our business and
financial condition, specifically in the US.
20. If the exhibition of films through megaplexes becomes more popular in India, our business and results of operations may be adversely
affected.
Changes in technology and the availability of real estate have significantly altered the global theatrical exhibition industry. Multiplexes, a
cinema theatre format that typically comprises four to five screens may, in the future, be substantially replaced by megaplexes, a cinema theatre
format that typically comprises 14 to 15 screens. The megaplex format has achieved popularity in many developed markets, including the
United States. In these markets, the industry-wide strategy of aggressively building megaplexes has generated significant competition and has
rendered many multiplexes obsolete. If the exhibition of films through megaplexes becomes more popular in India, we may be required to make
significant investments to shift our theatrical exhibition business towards the establishment and operation of megaplexes, which could adversely
affect our business, financial condition and results of operations.
21. Reduction in our advertisement/ sponsorship revenues could have an adverse effect on our results of operations.
As per our audited restated financial statements, during six months ended March 31, 2013, Fiscal 2012, Fiscals 2011 and 2010, we had `
1,928.60 lakhs, ` 3,498.40 lakhs, `3,684.20 lakhs and `4,651.70 lakhs of advertisement/sponsorship revenue, respectively. This constituted
5.26%%, 2.79%, 4.33% and 6.22%, respectively, of our total consolidated revenue for the same periods. We generally utilise our existing
cinema infrastructure to display advertisements for our advertising customers. Our gross margin on advertisement revenue is high as we do not
23
incur significant additional cost for each additional amount of advertisement revenue we earn. Consequently, changes in our advertisement
revenue will have a larger percentage impact on our profit before tax than changes in some of our other sources of revenue.
22. The cost of exhibition of a film varies across films and cinemas and if we are unable to obtain films on competitive terms, our results of
operations may be adversely affected.
We rely on distributors to obtain films for exhibition. In order to obtain a film for exhibition, we enter into agreements in which the distributor’s
share is typically calculated as a percentage of ticket receipts (net of entertainment taxes and other applicable taxes). The applicable percentage
is negotiated on a film-to-film basis in respect of films produced in India and periodically for film releases by international studios. Distributors
work on a non-exclusive basis and there is competition between exhibitors to acquire films. Competitive pressures may result in increasing the
cost at which we acquire the rights to exhibit films. If we are unable to recover such increased costs through higher box office collections or
other forms of revenue generation, our results of operations would be adversely affected.
23. In the event of any reduction or termination of any of our tax incentives or, specifically, if a state Government refuses to grant,
withdraws or reduces its entertainment tax incentive, our business and results of operations may be adversely affected.
We benefit from certain tax regulations and incentives. Specifically, we are subject to entertainment taxes in various states in India in which we
operate our cinema theatres. The applicable entertainment tax is determined by the relevant state as a percentage of our gross box office
collections in that state. The rates vary substantially from state to state. We are eligible for entertainment tax exemption for certain of our cinema
theatres, which is typically staggered over a period of time. In addition, we also enjoy full entertainment tax exemption in respect of certain of
our cinema theatres in Punjab and Rajasthan. When deciding whether to open a new cinema theatre, we consider the availability of
entertainment tax holidays and incentives given by various state Governments. Typically, the developer, from whom we propose to acquire a
new property, files an application for the grant of an entertainment tax exemption with respect to the relevant property. If a state Government
refuses to grant, withdraws, or reduces its entertainment tax incentive, our business, financial condition and results of operations may be
adversely affected.
Further, in certain instances, we are required to operate a cinema theatre for a certain period of time in order to avail of certain tax incentives. If
we fail to operate a cinema theatre for the required period of time, we will not be eligible for the tax incentive and will have to pay taxes in
arrears, which may adversely affect our financial condition and results of operations.
24. Certain equipment for the construction of our studio and some of our cinema theatres may not be received in a timely manner, or at all,
which could adversely affect our business and results of operations.
We are currently in the process of constructing a studio in Film City, Mumbai. As part of the construction process, we have placed orders for
certain equipment. However, based on our estimates, we are yet to place orders for large number of equipment. Similarly, we are yet to place
orders for certain equipment for new cinema theatres that we are constructing. If we do not receive any such equipment in a timely manner, on
favourable terms, or at all, the construction of our studio and cinema theatres may be delayed or prevented, which could adversely affect our
business, financial condition and results of operations.
25. Our business and growth strategies involve the pursuit of strategic acquisitions, and any difficulties encountered in identifying or
integrating other entities may adversely affect our financial condition and results of operations.
Our growth strategy involves the acquisition of new businesses. For example, we have acquired Rave Entertainment Private Limited, Synergy
Communications Private Limited (now, “Big Synergy Media Limited”), iLab and Reliance Lowry Digital Imaging Services Inc. (“Lowry
Digital”) between the financial years 2007 and 2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-
Reliance LLC, an associate entity, in financial year 2012. Although as of the date of this Letter of Offer, we have not entered into any letters of
intent, memoranda of understanding or agreements regarding contemplated acquisitions, we intend to continue to evaluate options for
acquisitions that may improve our businesses and service offerings. We may be unable to complete future acquisitions on terms acceptable to us,
in a timely manner, or at all. Our acquisitions may require that our management develop new expertise, manage new business relationships,
attract new customers and operate in new geographic markets. Furthermore, acquisitions require the devotion of significant attention and
resources from our management, and the diversion of our management, attention and resources could adversely affect our ability to manage our
business.
24
In addition, we cannot assure you that the integration of any future acquisitions will be successful or that the expected strategic benefits or
synergies of any future acquisitions will be realised. We may experience difficulties in integrating acquisitions into our existing business and
operations. Future acquisitions may expose us to potential risks including risks associated with the integration of new operations, services or
personnel, unforeseen or unaccounted liabilities, the diversion of resources from our existing businesses and technologies, our inability to
generate sufficient revenue to offset the costs of acquisitions, and potential loss of, or harm to, relationships with employees or customers, any
of which could significantly disrupt our ability to manage our business and in turn adversely affect our business, financial condition and results
of operations.
26. If we are unable to obtain or renew approvals in a timely manner, or at all, our business and results of operations may be adversely
affected.
As of May 31, 2013 we operated 119 cinema theatres with 439 screens across India and the United States. In order to operate each of these
cinema theatres, we must obtain certain approvals, many of which we must renew from time to time. In addition, as we expand our business and
open new cinema theatres, we will require additional approvals for these new locations. If we fail to obtain or renew any applicable licences,
registration or permits in a timely manner, or at all, our ability to operate our cinema theatres may be adversely affected, which could in turn
adversely affect our business, financial condition and results of operations.
The approvals and licences obtained by us may contain conditions, some of which could be onerous. We cannot assure you that the approvals,
licences, registrations or permits issued to us would not be suspended or revoked in the event of non-compliance or alleged non-compliance with
any terms or conditions thereof, or pursuant to any regulatory action. Any suspension or revocation of any of the approvals, licences,
registrations or permits that have been or may be issued to us may adversely affect our business and results of operations.
27. Failure to complete contracts, which have a fixed-time frame, as scheduled may negatively affect our profitability and may result in
increased expenses due to repetition of work.
We derive a significant portion of our earnings from our post-production services on a fixed-time frame basis. In respect of such fixed-time post-
production services, we bear the risk of penalty provisions, cost overruns, completion delays and wage inflation in connection with these
projects. Our failure to estimate the resources and time required for a project, including as a result of uncertainties due to creativity issues, may
adversely affect our reputation, business, financial condition and results of operations. In addition, our post-production agreements require that
we redo the production of content that is rejected by clients on grounds of such content not complying with specifications. Such agreements also
provide for penalty clauses where we are liable to pay penalties for any delay in the completion and handover of the material being produced
under the agreement. We cannot assure you that we will always complete the production of material under our post-production arrangements on
time or that such material will be accepted by our clients. Any inability to complete these post-productions in a timely manner or in accordance
with client specifications could adversely affect our business, financial condition and results of operations.
28. Procurement of new contracts for our post-production business is subject to negotiations, financial closure and initial quality tests. Our
inability to procure new contracts could affect our future results of operations and cash flows.
The growth of our business depends on our ability to win new contracts. Generally, it is difficult to predict whether and when we will be
awarded a new contract since many potential contracts involve negotiations with our clients and also financial closure prior to signing definitive
agreements. The process also involves initial quality tests which are normally done by way of pilot productions and subject to approval by the
clients. As the growth of our business will be derived primarily from these contracts, our future results of operations and cash flows can
fluctuate materially from period to period depending on the timing of contract awards.
29. If the number of unsuccessful films in the film industry increases, our business, financial condition and results of operations may be
adversely affected.
Our business relies heavily on the success of the films we exhibit. Our potential cinema theatre patrons may be inclined to visit our theatres in
significant part based on the appeal of the films we exhibit, irrespective of the services, technologies and amenities we offer. Typically, we are
also able to raise the profile of our film and media services business through association with successful films. A film’s success cannot be
predicted through the use of any definite formula or study of prior successful films. Consequently, the success of a new film may be difficult to
predict. We cannot assure you that box office collections of films with well-known casts or previously successful content will be successful. If
25
the number of unsuccessful films in the film industry increases, our business, financial condition and results of operations may be adversely
affected.
30. We operate most of our cinema theatres through agreements with the owners and / or developers of the relevant properties, which entail
certain risks.
As of May 31, 2013 we operated 119 cinema theatres with 439 screens across India and the United States. We operate a vast majority of our
cinema theatres through a lease on the relevant property, a business conducting agreement or a management agreement to operate the relevant
property as a cinema theatre. We cannot assure you that we will be able to enter into or renew business conducting agreements for our cinema
theatres that are of the same duration as the relevant property leases on favourable terms, or at all. In the event that a business conducting
agreement or lease is not renewed, we will be required to expend time and financial resources to relocate the cinema theatre, which may
adversely affect our financial condition. We cannot assure you that we will be able to relocate a cinema theatre to an appropriate location in a
timely manner, or at all. There can be no assurance that a relocated cinema theatre will generate revenues at levels equal to those generated at
the previous location. Further, if any lease or business conducting agreement is terminated, revoked subsequent to the lock-in period and prior to
tenure, not renewed or if we are required to cease business operations at a property for any reason whatsoever, our business, financial condition
and results of operations may be adversely affected. After such termination, if the relevant property is leased or sold to another theatrical
exhibition company, we may face increased competition in that geographic area. We operate some of our cinema theatres inside shopping malls
and if the operator of a shopping mall has not obtained certain approvals, our ability to operate such cinema theatres may be adversely affected.
While we pay stamp duty on our business conducting agreements, these agreements may be treated as lease under relevant stamp legislation. In
such event, we would be required to pay a higher stamp duty and might also be required to pay penalties in accordance with the relevant stamp
duty legislation. If any of our business conducting agreements is treated under relevant stamp duty legislation as a lease, our business and
financial condition may be adversely affected.
31. We are dependent on the services of key management personnel and our ability to recruit and retain skilled and experienced employees.
In order to successfully manage and expand our business, we are dependent on the services of key management personnel and our ability to
attract, train, motivate and retain skilled employees, including artists, technicians and other professionals. If we are unable to hire additional
personnel or retain existing qualified personnel, our ability to expand our business may be impaired and our revenues may decline. We may be
unable to hire and retain enough skilled and experienced employees to replace those who leave or may not be able to re-deploy. In addition, we
do not maintain key man insurance. We also may be unable to retain the proper mix of employees to follow industry trends and changing
customer preferences. Any failure to hire or retain key management personnel and skilled and experienced employees could adversely affect our
business and results of operations.
32. Our Company, Subsidiaries, Promoters, Group Companies and associate companies of our Company have availed of unsecured loans
that may be recalled by lenders at any time.
Our Company, Subsidiaries, Promoters, Group Companies and associate companies of our Company have availed of unsecured loans which
may be recalled by the lenders at any time. Any accelerated repayment of such loans may adversely affect the cash flow and results of
operations of such entities. We may also require alternative sources of financing, which may not be available on commercially reasonable terms
or at all. Separately, certain loans availed by our Company from the Promoters are overdue. While none of the loans have been recalled by the
Promoters so far, there can be no assurance that they may not be recalled in future. For further details in relation to the unsecured loans obtained
by our Company, please see the chapter entitled “Financial Indebtedness” at page 225 of this Letter of Offer.
33. If we are unable to recover certain amounts outstanding in relation to our film and media services business, our financial condition
and results of operations may be adversely affected.
Certain risks are involved in relation to the film and media services industry practice of extending credit for long periods of time and the
uncertainty regarding the receipt of certain outstanding amounts due. Due to these industry conditions, we have and will continue to have high
levels of outstanding receivables. As per our audited restated financial statements, as of March 31, 2013, we had ` 7,885.57 lakhs of trade
receivables in relation to our film and media services business. Given the nature of the film and media services industry and our clients, billings
are generally subject to negotiation at the time of settlement. This often results in high levels of rebates, discounts and write-offs. Any increase
26
in the levels of rebates, discounts or write-offs given could increase our working capital requirements and could adversely affect our business,
financial condition and results of operations.
34. If a third party files an intellectual property infringement case against us, our business, reputation and financial condition may be
adversely affected.
A significant portion of our business involves intellectual property. The films exhibited at our cinema theatres and television content we produce
involve intellectual property rights of various entities. While we attempt to ensure that necessary consents are obtained from third parties to
acquire intellectual property rights for the distribution and exhibition of films and the production of television content, third parties may file
infringement cases against us or may make us party to claims filed against third parties, such as producers. Such cases may not be decided in our
favour, which may result in the payment of damages and/or injunctive action. Further, the defense of any infringement claim may consume
significant time and financial resources. If a third party files an intellectual property infringement action against us, our business, reputation and
financial condition may be adversely affected.
35. If the strength of the “Reliance Group” brand name is diluted, our business and financial condition may be adversely affected.
We believe that the “Reliance Group” brand name commands strong brand recall and interest among the Indian population due to its long
presence in the Indian market and the diversified businesses in which the Reliance Group operates. Our success depends in part on our ability to
leverage the strength of the “Reliance Group” brand name. Any adverse change in the strength of the “Reliance Group” brand name, due to,
among other reasons, an adverse change among customers with regard to the perceived service quality of other companies in the Reliance
Group, could tarnish the “Reliance Group” brand and cause consumers be less interested in our products and services. If the strength of the
“Reliance Group” brand name is diluted for any reason, our business and financial condition may be adversely affected.
36. We do not own several trademarks and a logo related to our business and if we are unable to enter into or renew licence agreements for
the use of these trademarks and logo, our business and financial condition may be adversely affected.
We do not own the trademarks “Reliance MediaWorks” and “BIG Cinemas”. Reliance Big Entertainment Private Limited has entered into an
agreement for the use of the “BIG Cinemas” trademark.
We also do not own the “Reliance” trademark, the logo or the logo. We have entered into a brand licence agreement with
Anil Dhirubhai Ambani Ventures Limited for the use of the “Reliance” trademark and the logo. Under the terms of the brand licence agreement,
Anil Dhirubhai Ambani Ventures Limited may terminate the agreement on various grounds, including, among others, our failure to pay our debt
upon maturity, our undergoing change of control or any attempt by us to claim any right of ownership in relation to the “Reliance” trademark or
the logo.
Brand recognition is critical to the successful operation and growth of our business. If we are unable to use the trademarks or logo related to our
business, we may be required to change our name and/or logo. Any such change may lead to additional costs or dilute or eliminate the strength
of our brand, which would have an adverse effect on our business, financial condition and results of operations. For details, please see the
chapter entitled “Business” at page 149 of this Letter of Offer.
37. We may acquire new businesses, enter into strategic partnerships or undertake internal restructuring. If such undertakings / activities
do not yield the expected results, it may adversely affect our business, results of operations and financial condition.
We may acquire or partner with companies that we believe will enhance our business, revenues and profitability, in India or overseas, where
suitable opportunities arise. We may also evaluate restructuring some of our business divisions and subsidiaries including by transferring certain
of our business divisions to our subsidiaries. We may also evaluate various options to raise further capital, including through investments in our
subsidiaries which may have an impact on our shareholding in such subsidiaries. These activities, in general, involve numerous risks, including:
diversion of our management’s attention and diversion of resources from our existing business;
inability to control or loss of control over the business divisions or subsidiaries as a result of restructuring;
inability to coordinate product, development, sales and marketing functions of the acquired business;
27
inability to control the activities of the entities with whom we partner, including preventing such partner from entering into similar
arrangements with our competitors;
transition of operations, users and advertisers of the acquired business onto our existing platforms;
inability to retain the management, key personnel and other employees of the acquired business and integrate them into our core
workforce successfully and smoothly;
inability to assimilate the operations, administrative systems, product, technologies and information systems of the acquired business
with our core businesses; and
increase in investment of capital, which may increase our funding requirements as a result of acquisition or restructuring.
In the event that any of the above risks materialises, we may not be able to manage such risks successfully or in a timely manner or at all, which
could have, our business, results of operations and financial condition may be adversely affected. Further, acquired assets or business may not
generate the financial results that we expect and we may not be able to achieve the objective of any internal restricting that we may undertake.
These activities involved incurring substantial expenditure and employing significant time and other resources. In the event that these activities
fail to provide the expected results, our business, results of operations and financial condition may be adversely affected.
38. Our Company does not own the premises where our Company’s Registered Office is situated and its operations may be interrupted in
case of inability to renew the lease agreement.
Our Company does not own the premises where our Company’s Registered Office is situated. In terms of the lease agreement with the
Maharashtra Film Stage & Cultural Development Corporation Limited, our Company pays an annual rent for the premises on which our
registered office is situated. The rent is subject to an escalation every five years. Additionally, our Company is liable to pay a consideration
linked to the activities carried out by our Company from the said premises. The lease has been granted for a term of 33 years (“Initial Term”)
from October 21, 1996. The term of the lease shall be renewed for a further period of 33 years on an application made by our Company, six
months prior to the expiration of the Initial Term, on the same terms and conditions. In event our Company fails to renew the lease agreement or
if our Company is required to vacate the premises for any reason whatsoever, our Company will have to search for alternative office space.
There can be no assurance that our Company will be able to obtain the same on similar terms or at all.
39. The financial statements of our Company for the previous years may not be comparable to each other.
The financial statements of our Company for Fiscal 2012 are for eighteen months ended September 30, 2012 and the financial statements of our
Company for the Fiscal 2008 are for nine months ended March 31, 2008. The financial statements of our Company for the Fiscals 2009, 2010 and
2011 are for Fiscal 2009, 2010 and 2011, respectively. Consequently, our financial statements for these financial years are not comparable due to
different accounting periods and also because of the various schemes of arrangements and acquisitions undertaken by our Company. For further
details, please see the chapter entitled “History and Certain Corporate Matters” at page 169 of this Letter of Offer.
Further, our financial statements for Fiscals 2008 and 2009 reflect the accounting treatments prescribed in the schemes of arrangements given effect to
by our Company as approved by the respective High Courts. For further details of the accounting treatments pursuant to the schemes of
arrangements, please see the chapters entitled “History and Certain Corporate Matters – Scheme of Arrangements” and “Financial Statements”
at pages 173 and F-1, respectively.
40. We are subject to the risk of theft and fraud / embezzlement by our employees, contractors and customers.
We are exposed to the risk of theft and embezzlement by employees, contractors and customers. While we carefully recruit all of our employees
and develop and revise appropriate procedures for the handling and transportation of cash, equipment and intellectual property materials, we
cannot assure you that our employees and customers will not commit any acts of theft or embezzlement against us. The occurrence of any such
acts could adversely affect our reputation, business and financial condition.
28
Further, in the recent past, one of our contractors Laurent & Benton from whom we sourced human resources committed a fraud on the contract
labour employees aggregating approximately `294.20 lakhs. We have issued a legal notice to the said contractor but we have not received a
response from it. Should the contractor not be traced we may be required to compensate Laurent & Benton’s employees, which we may not be
able to recover from Laurent & Benton.
41. If our information technology systems are disrupted, our business and financial condition may be adversely affected.
The day-to-day operations of our cinema theatres involve the use of information technology systems, including the processing of advance
bookings, ticket sales and billing processes. We also rely on our information technology systems for carrying out routine corporate activities,
such as processing of financial information and management of our accounts. Any disruption of our information technology systems may
adversely affect our business, financial condition and results of operations.
42. If there is a dispute or a strike within the Hindi or United States film industry, our business may be adversely affected.
In India, the Hindi film industry was significantly affected by a dispute between multiplex operators and film distributors that led to a strike by
multiplex operators between April 2009 and June 2009. The said strike adversely impacted our ability to exhibit any Hindi films in our
multiplexes. Although the strike was eventually resolved, our domestic theatrical exhibition revenues suffered. Our theatrical exhibition
revenue, on a standalone basis, was significantly lower during the quarter ended June 2009 as compared to the corresponding period in year
2008. We cannot assure you that a strike will not occur in the future or that it will be resolved on terms favourable to us. If such a strike occurs,
our business, financial condition and results of operations could be adversely affected.
In the United States, the film industry was significantly affected by a strike conducted by the United States’ two major writers’ guilds between
November 2007 and February 2008 as a result of the guilds’ dispute with the Alliance of Motion Picture and Television Producers. During and
after this period, the production of certain films was significantly disrupted or completely halted. As a result, the release dates of certain films
were delayed, the production of certain films and their final content were adversely affected and the financing arrangements regarding certain
films were disrupted or terminated. Such a strike could adversely affect the operations of our subsidiary located in the United States, Lowry
Digital, which provides various film and media services to American film productions. We cannot assure you that a strike related to the
American film industry will not occur in the future or that such a strike will be resolved in a manner that does not adversely affect the operations
of Lowry Digital. If such a strike occurs, our business, financial condition and results of operations could be adversely affected.
43. If film distributors delay in providing us films or do not enter into agreements with us for the distribution of their films, our business
and results of operations could be adversely affected.
We rely on film distributors to supply the films that we exhibit at our cinema theatres. We cannot assure you that we will be able to enter into
agreements with all film distributors from whom we wish to source films or that film distributors will supply us films under our agreements in a
timely manner. As a result, we may be unable to exhibit films in our cinema theatres as desired or expected. If film distributors delay in
providing us their films or do not enter into agreements with us for the distribution of their films, our business and results of operations could be
adversely affected.
44. We operate our theatrical exhibition and film and media services businesses in India and overseas, which entails certain risks.
We operate our theatrical exhibition and film and media services businesses in several foreign jurisdictions in addition to India. As of May 31,
2013, we operated our theatrical exhibition business in India and the United States, with 254 screens in India and an additional 185 screens
overseas. In addition, we operate our film post production services through production laboratory in Mumbai and our creative services through
facilities in Burbank, London and Navi Mumbai. As we operate in various jurisdictions around the world, we are subject to laws, rules and
regulations in the jurisdictions in which we operate our theatrical exhibition and film and media services businesses. The laws, rules and
regulations applicable in these jurisdictions generally vary from each other and we may be required to obtain additional certifications or
approval in certain jurisdictions. We may also be required to make changes to the manner in which we conduct our operations to comply with
the applicable laws in these jurisdictions. In the event that we are unable to comply with the requirements under the applicable laws, rules or
regulations of the jurisdictions in which we operate, we may face actions and claims against us. This may have adverse effect our business,
29
results of operations and financial conditions. Further, any failure to manage our overseas business operations effectively or balance our
management’s attention and resources between our Indian and overseas business operations may adversely affect our business, financial
condition and results of operations.
45. We face certain risks related to our handling of inflammable materials, including film rolls.
We work with certain inflammable materials in the course of our business, including film rolls. Despite compliance with requisite industry
safety standards, our operations are subject to hazards associated with the handling of these inflammable materials. If improperly handled or
subjected to unsuitable conditions, these materials could be destroyed and may also cause damage to our properties. The loss of such materials
due to fire could cause us to fail to deliver certain film materials in a timely manner, or at all, which could adversely affect our business,
financial condition and results of operations.
46. Some viewers or civil society organisations may find the film or television content we exhibit or produce to be objectionable.
It is possible that some viewers in India or overseas may object to certain film or television content exhibited or produced by us based on
religious, political, ideological or any other positions held by such viewers. This is particularly possible with regard to content that is graphic in
nature, including violent or romantic scenes and films that are politically oriented or targeted at a particular segment of the public. Viewers or
civil society organisations, including interest groups, political parties, religious or other organisations may assert legal claims, seek to ban the
exhibition of film at our cinema theatres or television content, protest against us or films in our cinema theatres or television programs, damage
our facilities, disrupt our operations or object in a variety of other ways. The occurrence of any of these risks could damage our reputation and
have an adverse effect on our business, prospects, financial condition and results of operations. The films exhibited by us and television content
that we produce could result in claims being asserted, prosecuted or threatened against us based on a variety of grounds, including, among
others, defamation, hurting religious sentiments, invasion of privacy, negligence, obscenity or facilitating illegal activities, any of which could
have an adverse effect on our business, financial condition and results of operations.
47. Our liabilities may not be fully covered by insurance policies, which may expose us to substantial costs that could adversely affect our
business, financial condition and results of operations.
We maintain insurance for each of our properties which we believe is typical in our industry and in amounts which we believe are commercially
appropriate for a variety of risks, including for losses incurred due to terrorism, fire, flood, earthquake allied perils and burglary and loss of
profit due to fire in our cinema theatres. Additionally, we maintain insurance related to commercial general liability, cash and equipment in
transit as well as coverage for various items of equipment. However, such insurance may not be adequate to cover all losses or liabilities that
may arise from our operations, particularly when the loss suffered is not easily quantifiable. Even if we have availed of adequate insurance
cover, we may not be able to successfully assert our claims for any liability or loss under the relevant insurance policies. Additionally, there may
be various other risks or losses for which we are not insured either because such risks are uninsurable or not insurable on commercially
acceptable terms. For example, we do not carry insurance for certain types of losses, such as those due to war. We also do not maintain a key
man insurance policy. Should an uninsured loss occur, we could incur substantial losses. In addition, even if any such loss is insured, we may be
required to pay a significant deductible on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss,
or the amount of the loss may exceed the limit of our coverage. Further, if an accident resulting in personal injury to a patron or other third party
at one of our cinema theatres occurs, even if we hold sufficient insurance cover for the liability, our reputation may be adversely affected. If an
uninsured loss or a loss in excess of an insured limit occurs, our business, financial condition and results of operations may be adversely
affected. Furthermore, we cannot assure you that in the future we will be able to maintain insurance of the types or at levels which we deem
necessary or adequate.
48. Restrictions on ticket prices imposed in certain states of India may adversely affect our results of operations.
Cinema theatres in Delhi, Punjab, Haryana Tamil Nadu and Andhra Pradesh are subject to regulations under which the ticket prices are required
to be approved by the licensing authority, and such prices may be increased only with the prior sanction of the licensing authority. In Tamil
Nadu and Andhra Pradesh, the minimum and maximum ticket prices are determined based on facilities in the respective cinema theatres.
Further, in Tamil Nadu, we are required to reserve 10.00% of the total approved seating capacity of the cinema theatres for the lowest class
depending on the location of the cinema theatres. For the Fiscal 2011, Fiscal 2012 and for the six months ended March 31, 2013, cinema theatres
in Delhi, Punjab, Haryana, Tamil Nadu and Andhra Pradesh accounted for 23%, 22% and 22%, respectively, of our total theatrical exhibition
revenues. As of May 31, 2013, 26 of the 96 cinema theatres operated by us in India are located in these states, representing 60 out of a total of
30
254 screens in India (including food courts). In the event these restrictions prevent us from increasing the ticket prices as may be required by us,
it may affect the results of our operations.
49. We face competition from other forms of media and entertainment.
We compete for the public's leisure time and disposable income with other forms of entertainment, including, among others, sporting events,
concerts, live theatre and restaurants. The theatrical exhibition industry also faces competition from other forms of out-of-home entertainment,
such as concerts, amusement parks and from other forms of in-home entertainment. We also face competition from other forms of media such as
radio, cable television, newspapers, and magazines. These alternate forms of entertainment compete with the theatrical exhibition of films to
capture the discretionary spending of the patrons and advertisement revenues.
50. We have not entered into definitive agreements to use the Net Proceeds of the Issue.
We intend to use the Net Proceeds of the Issue for (i) prepayment/ repayment of our loans availed from our various entities including our
Promoters and (ii) general corporate purposes, as described in the chapter entitled “Objects of the Issue” at page 81 of this Letter of Offer.
Pending utilization of the Issue Proceeds as described in this Letter of Offer, we intend to temporarily invest the funds in high quality interest
bearing liquid instruments, including deposits with banks and investments in money market mutual funds and other financial products and
investment grade interest bearing securities. Such investments would be in accordance with the investment policies or investment limits
approved by our Board of Directors from time to time. Our management will have the discretion to revise our business plan from time to time
and consequently our funding requirement and deployment of funds may also change.
51. Some of our Group Companies have incurred losses.
As set forth below, some of our Group Companies have incurred losses (as per their unconsolidated financial statements). (` in lakhs)
Sr. No. Name of the Group Company Profit /
Loss after
tax for the
financial
year 2011
Profit /
Loss after
tax for the
financial
year 2012
Profit / Loss
after tax for
the
financial
year 2013
1. Adhar Project Management & Consultancy Private Limited 10.84 (0.54) (0.31)
2. Indian Commodity Exchange Limited (3,122.00) (2,556.00) (1,026.03)
3. Reliance Alternative Investments Services Private Limited 4.19 (2.84) (0.03)
4. Reliance Asset Management (Malaysia) Sdn. Bhd. a* (912.81) (1,038.90) (947.40)
5. Reliance Asset Management (Singapore) Pte Limitedb* (732.10) (1,519.09) (1,188.30)
6. Reliance Capital (Singapore) Pte. Limitedd (5.68) (9.17) (2.56)
7. Reliance Capital Asset Management (UK) Plc.c* (623.16) (603.75) (636.22)
8. Reliance Composite Insurance Broking Limited 605.79 (226.36) (933.14)
9. Reliance Exchangenext Limited (108.58) (146.94) (2548.54)
31
Sr. No. Name of the Group Company Profit /
Loss after
tax for the
financial
year 2011
Profit /
Loss after
tax for the
financial
year 2012
Profit / Loss
after tax for
the
financial
year 2013
10. Reliance General Insurance Company Limited (31,160.17) (34,319.93) (9276.92)
11. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private
Limited)
(0.16) (0.16) (809.07)
12. Reliance Share & Stock Brokers Private Limited (133.13) (121.05) (3251.73)
13. Reliance Spot Exchange Infrastructure Limited (648.47) (550.98) (128.45)
14. Reliance Venture Asset Management Private Limited (215.23) (106.46) (0.32)
15. Reliance Wealth Management Limited (93.78) (286.60) (308.90)
16. Viscount Management Services Limited (7,144.15) (7,996.66) (16959.00)
17. Indian Agri Services Private Limited NA (6.60) (0.04)
18. Reliance CWT India Limited (0.39) (0.58) (0.21)
a Losses in RM. The average exchange rate for the year ended March 31, 2010, March 31, 2011, March 31, 2012 & March 31, 2013 used for
conversion are RM1=` 13.69, 14.47, 15.62 and 17.54 respectively. b Losses in SGD. The average exchange rate for the year ended March 31, 2010, March 31, 2011 , March 31, 2012 & March 31, 2013 used for
conversion is SG$ 1 = ` 33.25, 34.21, 38.15 & 42.38 respectively. c Losses in Pound. The average exchange rate for the year ended March 31, 2010, March 31, 2011 , March 31, 2012 & March 31, 2013 used for
conversion is £1= ` 75.72, 70.87 ,76.44& 85.84 , respectively. d. Losses in USD. The average exchange rate for the year ended March 31, 2010, March 31, 2011 , March 31, 2012 & March 31, 2013, used for
conversion is $1= ` 54.17, 45.98,45.27& 55.69 respectively.
*Differences due to conversion of IFRS financial to Indian GAAP
Further, our listed Group Company has also suffered losses (as per their unconsolidated financial statements): (` in lakhs)
Name of the Group Company Loss After Tax
for the financial
year 2010(1)
Loss After Tax
for six months ended
September 30, 2010(1)
Loss After Tax
for six months
ended March 31,
2011(2)
Loss After Tax
for 12 months
ended March 31,
2012
Loss After Tax
for six months
ended September
30, 2012(3)
Reliance Broadcast Network Limited (7,612.67) (2,491.73) (1,149.68) (1,952.53) (2,670.15)
(1) Pursuant to the board resolution dated October 21, 2010, Reliance Broadcast Network Limited closed its books of accounts as of September 30, 2010 and accordingly
the financial year was of six months ending September 30, 2010.
(2) Pursuant to the board resolution dated May 5, 2011, Reliance Broadcast Network Limited closed its books of accounts as of March 31, 2011 and accordingly the
financial year was of six months ending March 31, 2011.
(3) Based on unaudited financials subject to limited review
For details, please see the chapter entitled “Our Group Companies” at page 208 of this Letter of Offer.
32
52. We have experienced negative cash flows during previous fiscals and any negative cash flows in the future could adversely affect our
financial condition and the trading price of our Equity Shares.
As per our audited restated financial statements, we have negative cash flow from operations of ` 7,320.59 lakhs on a consolidated basis and `
470.30 lakhs on a standalone basis. The negative cash flows from operations are primarily on account of losses incurred by our Company. The
negative cash flows in the previous periods, as per our audited restated financial statements, are as set forth in the tables below:
Standalone: (` in lakhs)
Six months ended
March 31, 2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Net cash generated
from/(used in) Operating
Activities
(470.30) (510.48) NA NA (13,864.35)
Net cash generated from /
(used in) investing activities
(8,216.10) (15,611.58) (7,987.20) (51,893.66) (2,062.80)
Net cash flow (used in) /
generated from financing
activities
NA NA NA NA NA
Only negative cash flows have been disclosed. Positive cash flow during any fiscal has been indicated as “NA”.
Consolidated: (` in lakhs)
Six months ended
March 31, 2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Net cash generated
from/(used in)
Operating Activities
(7,320.59) (8,288.22) (5,216.62) NA NA
Net cash generated
from / (used in)
investing activities
(1,307.14) (3,161.67) NA (46,562.73) (23,791.91)
Net cash flow (used in) /
generated from
financing activities
NA NA NA NA NA
Only negative cash flows have been disclosed. Positive cash flow during any fiscal has been indicated as “NA”.
Any negative cash flows in the future could adversely affect our financial condition and the trading price of the Equity Shares.
53. We have entered into, and may, in future, enter into, related party transactions.
We have entered into, and may in the future enter into, certain transactions with our Promoters and Group Companies, including companies
engaged in our line of business or in related areas. These transactions were primarily made in the ordinary course of business at arm’s length. It
is likely that we will continue to enter into further related party transactions in the future. For details of the related party transactions, please see
the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.
54. We may raise additional equity capital which may dilute your existing shareholding.
Our growth and business strategies may require us to raise additional capital. We may raise such additional capital through a further issue of
securities. Our Company’s shareholders have at the annual general meeting held on December 24, 2012 approved a qualified institutions
placement (“QIP”) of equity shares or instruments that are convertible into or exchangeable with equity shares, in one or more tranches, upto an
aggregate amount not exceeding `50,000 lakhs, which as per Regulation 89 of the SEBI (ICDR) Regulations, can happen only once our
networth becomes substantially positive, as the aggregate amount of the QIP cannot exceed five times of our networth as per the audited balance
33
sheet of the previous financial year. Any issuance of Equity Shares to persons other than the Equity Shareholders will dilute your existing equity
shareholding. Further, we may obtain a funding from our Promoters through an equity infusion. This will also dilute your shareholding.
External Risk Factors
55. The Indian film exhibition sector is highly regulated and changes in regulations may have an adverse effect on our business.
The Indian film exhibition sector is highly regulated by both the central and the state governments. These regulations and policies are exhaustive
and apply to all aspects of building and safety requirements, specify preconditions to be met for licensing requirements, show tax and
entertainment tax registrations and the pre-conditions for grant of exemptions from the payment of entertainment tax. These regulations and
policies have an impact on our ability to operate cinemas and the viability of our cinemas in different states. Changes in these regulations may
have an adverse effect on our business and may render our business unviable by increasing compliance requirements and compliance costs.
56. The transition to IFRS converged Indian Accounting Standards in India is still unclear and we may be negatively impacted by such
transition.
The Ministry of Corporate Affairs, Government of India, has recently notified that the IFRS converged Indian Accounting Standards (“IND
AS”) will be implemented in a phased manner. It was also mentioned that the date of implementation of IND AS will be notified by the MCA at
a later date and such date is yet to be notified. Additionally, IND AS has fundamental differences with IFRS and hence financial statements
prepared under IND AS may be substantially different from financial statements prepared under IFRS. There can be no assurance that the
financial condition, results of operations, cash flow or changes in shareholder’s equity of our Company will not appear materially worse under
IND AS than under Indian GAAP. As our Company adopts IND AS reporting, it may encounter difficulties in the ongoing process of
implementing and enhancing its management information systems. Moreover, there is increasing competition for the small number of IFRS
experienced accounting personnel available once Indian companies begin to prepare IND AS financial statements. There can be no assurance
that the adoption of IND AS by our Company will not adversely affect its reported results of operations or financial condition and any failure to
successfully adopt IND AS in accordance with the prescribed timelines could have a material adverse effect on our financial position and results
of operations.
57. Fluctuation of the Rupee against foreign currencies may have an adverse effect on our results of operations.
While we report our financial results in Indian rupees, portions of our total income, expenses and investments are denominated, generated or
incurred in currencies other than Indian rupees. Such foreign currencies include the USD, GBP, MYR and EUR. To the extent that our income,
expenditures and investments are not denominated in Indian rupees, exchange rate fluctuations may have an adverse effect on our results of
operations and financial condition.
Further, our future capital expenditures and investments may be denominated in currencies other than Indian rupees. Therefore, a decline in the
value of the Indian rupee against such other currencies could increase the Indian rupee cost of incurred on such expenditures and investments.
The exchange rate between the Indian rupee and various foreign currencies has varied substantially in recent years and may continue to fluctuate
significantly in the future. The consolidation of our overseas subsidiaries will also expose us to translation risks which may significantly impact
our results of operations and financial condition.
Risks Relating to India
58. Political instability or changes in the Government of India could adversely affect economic conditions in India and consequently our
business.
We are incorporated in India, derive a significant portion of our revenues from India and a significant portion of our assets are located in India.
Consequently, our performance and the market price and liquidity of the Equity Shares may be affected by changes in exchange rates and
controls, interest rates, Government policies, taxation, social and ethnic instability and other political and economic developments affecting
India. The Government has traditionally exercised and continues to exercise significant influence over many aspects of the economy. Our
business and the market price and liquidity of the Equity Shares may be affected by interest rates, changes in Government policy, taxation,
social and civil unrest and political, economic or other developments in or affecting India. Since 1991, successive governments have pursued
policies of economic and financial sector liberalisation and deregulation and encouraged infrastructure projects. The Government in recent years
34
has announced policies and taken initiatives that support the economic liberalisation programme pursued by previous governments. The
Government may change policies regarding the rate of economic liberalisation, banks and financial institutions and the film industry, foreign
investment and other matters affecting investment in the Equity Shares. A significant change in the Government's policies in the future, in
particular, those relating to the film industry in India, could affect business and economic conditions in India, and could also adversely affect our
financial condition and results of operations.
59. If communal disturbances, riots or terrorist attacks occur in India, or if regional hostilities increase, our business, financial condition
and results of operations may be adversely affected.
India has experienced communal disturbances, riots and terrorist attacks in recent years. If such events recur, our operational and marketing
activities may be adversely affected, resulting in a decline in our income. The Asian region has, from time to time, experienced instances of civil
unrest and hostilities among neighbouring countries. Hostilities and tensions may occur in the future and on a wider scale. Military activity or
terrorist attacks in India, such as the attacks in Mumbai in November 2008, as well as other acts of violence or war could influence the Indian
economy by creating a perception that investments in India involve higher degrees of risk. Events of this nature in the future, as well as social
and civil unrest within other countries in Asia, could influence the Indian economy and could have an adverse effect on the market for securities
of Indian companies, including the Equity Shares.
60. A slowdown in the economic growth in India could adversely affect our business.
We derive most of our revenues from operations in India and consequently, our performance and growth is dependent in large part on the state
of the Indian economy. Any slowdown in the Indian economy, and in particular in the discretionary spending habits of our customers, could
adversely affect our business.
61. A downgrade of India’s sovereign debt rating may adversely affect our ability to raise additional debt financing.
India's sovereign debt rating could be downgraded due to various factors, including changes in tax or fiscal policy, which are outside our control.
Such downgrading could cause a change in interest rates or other commercial terms and could adversely affect our ability to raise additional
financing as well as our capital expenditure plans, business and financial performance. A decline in this reserve could affect the valuation of the
Indian Rupee and could result in reduced liquidity and higher interest rates, which could adversely affect the availability of financing to us.
62. Natural disasters that could severely disrupt the normal operation of our business.
Some of the countries in which we operate have, in the past, experienced natural disasters, such as tsunamis and earthquakes. If any of our
facilities were to be damaged by a natural disaster, our business operations could be interrupted or delayed, which could adversely affect our
business, financial condition and results of operations.
63. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could adversely affect our
business.
The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern, such as swine influenza, could have a
negative impact on the global economy, financial markets and business activities worldwide, which could adversely affect our business. While
we have not been adversely affected by such outbreaks in the past, we cannot assure you that a future outbreak of an infectious disease among
humans or animals or any other serious public health concerns will not have an adverse effect on our business.
64. Our ability to raise foreign capital may be constrained by Indian law.
As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our
financing sources for our operations and could constrain our ability to obtain financing on favourable terms and refinance existing indebtedness.
In addition, we cannot assure you that required approvals will be granted to us without onerous conditions, or at all. Limitations on foreign debt
may have an adverse effect on our business, financial condition and results of operations.
35
65. Our business and activities are regulated by the Competition Act, 2002.
The Parliament has enacted the Competition Act, 2002, as amended, (“Competition Act”) for the purpose of preventing practices having an
adverse effect on competition in the relevant market in India under the auspices of the Competition Commission of India (“CCI”). Under the
Competition Act, any arrangement, understanding or action whether or not formal or informal which causes or is likely to cause an appreciable
adverse effect on competition is void and attracts substantial penalties. Any agreement among competitors which directly or indirectly involves
determination of purchase or sale prices, limits or controls production, or shares the market by way of geographical area or number of customers
in the relevant market is presumed to have an appreciable adverse effect on competition in the relevant market in India and shall be void.
Further, the Competition Act prohibits abuse of dominant position by any enterprise. If it is proved that the contravention committed by a
company took place with the consent or connivance or is attributable to any neglect on the part of, any director, manager, secretary or other
officer of such company, that person shall be guilty of the contravention and liable to be punished.
On March 4, 2011 the Government of India notified and brought into force the combination regulation (merger control) provisions under the
Competition Act with effect from June 1, 2011. The combination regulation provisions require that acquisition of shares, voting rights, assets or
control or mergers or amalgamations which cross the prescribed asset and turnover based thresholds shall be mandatorily notified to and pre-
approved by the CCI. In addition, on May 11, 2011, the CCI issued the final Competition Commission of India (Procedure in regard to the
transaction of business relating to combinations) Regulations, 2011 which sets out the mechanism for implementation of the combination
regulation provisions under the Competition Act. It is unclear as to how the Competition Act and the CCI will affect the business environment in
India.
If we are adversely impacted, directly or indirectly, by any provision of the Competition Act, or its application or interpretation, generally or
specifically in relation to any merger, amalgamation or acquisition proposed by us, or any enforcement proceedings initiated by the CCI, either
suo moto or pursuant to any complaint, for alleged violation of any provisions of the Competition Act it may have a material adverse effect on
our business, financial condition and results of operations.
Risks Relating to the Investment in the Equity Shares
66. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash flows, working capital
requirements, capital expenditures and other factors.
The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital
requirements, capital expenditures and other factors. There can be no assurance that we will have distributable funds in future periods or that we
will pay dividend even if we have distributable profits.
67. The price of our Equity Shares may be volatile.
The trading price of our Equity Shares may fluctuate after this Issue due to a variety of factors, including our results of operations and the
performance of our business, competitive conditions, general economic, political and social factors, the performance of the Indian and global
economy and significant developments in India’s fiscal regime, volatility in the Indian and global securities market, performance of our
competitors, the Indian film industry and the perception in the market about investments in the film industry, changes in the estimates of our
performance or recommendations by financial analysts and announcements by us or others regarding contracts, acquisitions, strategic
partnerships, joint ventures, or capital commitments. In addition, if the stock markets experience a loss of investor confidence, the trading price
of our Equity Shares could decline for reasons unrelated to our business, financial condition or operating results. The trading price of our Equity
Shares might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. Each of
these factors, among others, could adversely affect the price of our Equity Shares.
68. Any future issuance of Equity Shares by us or sales of the Equity Shares by any of our significant shareholders may adversely affect the
trading price of the Equity Shares.
Any future issuance of Equity Shares by us, such as a primary offering or pursuant to a preferential allotment, may dilute your shareholding in
us, adversely affect the trading price of our Equity Shares and could affect our ability to raise capital through an issuance of our securities. In
addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares.
36
Additionally, the disposal of Equity Shares by any of our significant shareholders or our promoters, any future issuance of Equity Shares by us
or the perception that such issuances or sales may occur may significantly affect the trading price of the Equity Shares. We cannot assure you
that we will not issue Equity Shares or that such shareholders will not dispose of, pledge or encumber their Equity Shares in the future.
69. The movements in the price of the Equity Shares may be subject to restrictions from time to time, which may adversely affect a
shareholder’s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.
We are subject to a daily circuit breaker imposed on listed companies by all stock exchanges in India which does not allow transactions beyond
certain volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers
generally imposed by SEBI on Indian stock exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the
historical volatility in the price and trading volume of the Equity Shares. The stock exchanges are not required to inform us of the percentage
limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit breaker would effectively limit the upward
and downward movements in the price of the Equity Shares. As a result of this circuit breaker, the ability of shareholders to sell the Equity
Shares or the price at which shareholders may be able to sell their Equity Shares may be adversely affected.
70. There is no guarantee that the Equity Shares will be listed on the Stock Exchanges in a timely manner or at all, and any trading
closures at the Stock Exchanges may adversely affect the trading price of our Equity Shares.
In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be
granted until after the Equity Shares have been issued and allotted. Approval for listing and trading will require all relevant documents
authorising the issuing of Equity Shares to be submitted. There could be a failure or delay in listing the Equity Shares on the Stock Exchanges.
Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares.
71. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.
Capital gains arising from the sale of the Equity Shares are generally taxable in India. Currently, any gain realised on the sale of our shares on a
stock exchange held for more than 12 months will not be subject to capital gains tax in India if the securities transaction tax (“STT”) has been
paid on the transaction. The STT will be levied on and collected by an Indian stock exchange on which our shares are sold. Any gain realised on
the sale of our shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and as a
result of which no STT has been paid, will be subject to capital gains tax in India. Further, any gain realised on the sale of our shares held for a
period of 12 months or less will be subject to capital gains tax in India. Capital gains arising from the sale of our shares will be exempt from
taxation in India in cases where an exemption is provided under a treaty between India and the country of which the seller is a resident.
Generally, Indian tax treaties do not limit India’s ability to impose tax on capital gains. For more information, please see the chapter entitled
“Statement of Tax Benefits” at page 131 of this Letter of Offer. However, capital gains on the sale of our Equity Shares purchased in the Issue by
residents of certain countries may not be taxable in India by virtue of the provisions contained in the taxation treaties between India and such
countries. As a result, residents of other countries may be liable for tax in India as well as in their own jurisdictions on gains arising from a sale
of Equity Shares.
72. You will not be able to sell immediately on the Stock Exchanges any of the Equity Shares you purchase in the Issue.
The Equity Shares will be listed on the Stock Exchanges. Pursuant to Indian regulations, certain actions must be completed before the Equity
Shares can be listed and trading may commence. Investors’ book entry, or “demat”, accounts with depository participants in India are expected
to be credited within two working days of the date on which the basis of allotment is approved by the Stock Exchanges. Thereafter, upon receipt
of final approval from the Stock Exchanges, trading in the Equity Shares is expected to commence within seven working days of the date on
which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure that the Equity Shares will be credited to
investors’ demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above.
73. Our Company’s scrip has been moved to the trade-to-trade segment of the BSE and NSE. BSE and NSE have moved our Company’s scrip from the normal trading segment of the exchanges to the restricted trading segment, i.e., ‘trade-
to-trade’ segment, with effect from July 19, 2013. Consequently, selling / buying of shares in the scrip results into giving / taking delivery of
shares at the gross level and no intraday netting off / square-off facility is permitted. Further, a circuit filter of 5% or less will be applicable. This
could have an impact on the volume of shares traded which would impact liquidity and, potentially, the price of our Equity Shares.
37
Prominent notes
1. Issue of upto 14,99,10,052 Equity Shares at a premium of ` 35 per Equity Share for an amount not exceeding `59,964.02 lakhs on a
rights basis to the existing Equity Shareholders of our Company in the ratio of 13 Equity Share(s) for every 4 fully paid-up Equity
Share(s) held by the existing Equity Shareholders on the record date, that is on Wednesday, July 24, 2013. The Issue Price is 8 times
the face value of the Equity Shares.
2. As per our audited restated financial statements, our net worth as at March 31, 2013 was ` (92,707.78) lakhs on a consolidated basis
and `(47,014.66) on a stand alone basis, as per our restated financial statements prepared under Indian GAAP.
3. There has been no financing arrangement whereby our Promoter Group, directors of our Promoters, our Directors and their relatives
have financed the purchase by any other person of securities of our Company other than in normal course of the business of the
financing entity during the period of six months immediately preceding the date of filing of this Letter of Offer.
4. Our Company has been in compliance the provisions of the Equity Listing Agreement, including Clauses 35, 40A, 41 and 49; the
provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Prohibition of Insider Trading
Regulations), 1992 during the financial year immediately preceding the date of filing this Letter of Offer.
5. As per our audited restated financial statements, set out below are the related party transactions entered into by us.
(` in lakhs)
Sr.
No.
Particulars Transaction
Amount
Transaction
Amount
Transaction
Amount
Transaction
Amount
Transaction
Amount
Transaction
Amount
Six months
ended March
31, 2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2008
1. Holding
Companies
-
- - - - 546.38
2. Significant
Shareholders, key
managerial
personnel and
their relatives 11.80 35.80 10.80 17.80 7.80 179.70
3. Enterprises over
which Company
has significant
influence /
associates 8,198.31 (23.30) 15.80 262.90 414.37 753.51
For further details about our related party transactions, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.
6. Details of the transaction between our Company and our Group Companies and between our Company and our Subsidiaries during
Fiscal 2012 and the six months ended March 31, 2013, along with the nature of transactions and the cumulative value of such
transactions are set out below:
38
Sr.
No.
Name of the Party
Fiscal 2012
Amount (` in lakhs) Nature of transaction
1. Reliance General Insurance Company Limited 201.02 Insurance
2. Reliance Equity Advisors Limited 0.31 Theatrical exhibition business revenue
3. Reliance Life Insurance Company Limited 89.77 Theatrical exhibition business revenue
4. Reliance Broadcast Network Limited 198.95 Theatrical exhibition business revenue
Total 490.05
Sr.
No.
Name of the Party
Six months ended March
31, 2013
Amount (` in lakhs) Nature of transaction
1. Reliance General Insurance Company Limited 1.28 Theatrical exhibition business revenue
2. Reliance Broadcast Network Limited 6.92 Theatrical exhibition business revenue
3. Reliance Capital Asset Management Limited 27.62 Theatrical exhibition business revenue
4. Reliance Capital Limited 0.75 Theatrical exhibition business revenue
5. Reliance General Insurance Company Limited 1.19 Insurance
Total 37.76
7. Investors may contact the Lead Manager for complaints, information or clarifications pertaining to the Issue.
39
SECTION III: INTRODUCTION
SUMMARY OF INDUSTRY
The following is a summary of the industry overview. This summary should be read in conjunction with, and is qualified in its entirety by, more
detailed information in the chapter entitled “Industry Overview” at page 138 of this Letter of Offer.
We have relied on websites and publicly available documents from various sources. The data may have been re-classified by us for the purpose
of presentation. Neither we nor any other person connected with the Offer has independently verified the information provided in this chapter.
Industry sources and publications, referred to in this section, generally state that the information contained therein has been obtained from
sources generally believed to be reliable but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability
cannot be assured, and, accordingly, investment decisions should not be based on such information.
Overview of the Indian Economy
India is one of the fastest growing economies in the world with a rapidly expanding entertainment and media (“E&M”) industry.
According to the Ministry of Statistics and Programme Implementation’s revised estimates, India’s GDP at factor cost (at constant 2004-2005
prices) registered a lower growth of 4.96% during Financial Year 2013, as compared with 6.21% in Financial Year 2012, largely attributable to
dismal performance of agriculture sector 1.79% during the Financial Year 2013 as compared to 3.65% in Financial Year 2012 and service sector
6.59% in Financial Year 2013 as compared to 8.20% in Financial Year 2012. However of the larger countries of the world only China and
Indonesia has grown faster than India in the Financial Year 2013. (Source http://indiabudget.nic.in “Budget Speech of FM for Financial Year
13-14”)
The following table illustrates India's real GDP growth between financial years 2009 and 2012 (at factor cost at constant 2004-05 prices):
Financial Year 2009 Financial Year 2010 Financial Year 2011 Financial Year 2012 Financial Year 2013
6.7% 8.6% 9.3% 6.2% 5.0%
Source: http://mospi.nic.in “Summary of macroeconomic aggregates at constant (2004-05) prices, 1950-51 to 2012-13”
Overview of the Indian Entertainment and Media Industry
The Indian E&M industry (primarily comprised, among others, of film, television, print media, animation and visual effects VFX, radio and
music) has witnessed steady growth in recent years and is estimated to have reached `72,80,000 lakhs in 2011. The Indian E&M industry is
projected to grow at a compound annual growth rate (“CAGR”) of 14.90% from the year 2011 to the year 2016 to reach `1,45,70,000 lakhs.
The Indian E&M industry has grown at a CAGR of 9.09% between 2007 and 2011. (Source: Federation of Indian Chambers of Commerce and
Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The following factors are expected to contribute to further growth of the Indian E&M industry:
the continued growth and development of the Indian economy;
favourable demographic characteristics and trends in India;
the cultural diversity of the Indian population;
the internationalisation of the Indian E&M industry;
the availability of popular content; and
digitisation of content.
The following table provides the expected sizes and growth rates of the various segments of the Indian E&M industry for the years 2011 through
2016:
40
(` lakhs)
E&M Industry
Segment 2011 2012P 2013P 2014P 2015P 2016P
CAGR (2011
to 2016)
T.V. 32,90,000 38,00,000 43,50,000 51,40,000 61,80,000 73,50,000 17.00%
Print 20,88,000 22,60,000 24,68,000 27,00,000 29,49,000 32,34,000 9.00%
Film 9,29,000 10,00,000 10,97,000 12,11,000 13,45,000 15,03,000 10.00%
Radio 1,15,000 1,30,000 1,60,000 2,00,000 2,40,000 2,95,000 21.00%
Music 90,000 1,00,000 1,13,000 1,31,000 1,54,000 1,82,000 15.00%
O.O.H. 1,78,000 1,95,000 2,15,000 2,36,000 2,60,000 2,90,000 10.00%
Animation 3,10,000 3,63,000 4,30,000 5,11,000 6,10,000 6,90,000 17.00%
Gaming 1,30,000 1,80,000 2,30,000 2,90,000 3,70,000 4,60,000 29.00%
Digital Advertising 1,54,000 1,99,000 2,58,000 3,35,000 4,37,000 5,70,000 30.00%
Total 72,84,000 82,27,000 93,21,000 1,07,54,000 1,25,45,000 1,45,74,000 14.90% *P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
41
SUMMARY OF BUSINESS
The information in this section is qualified in its entirety by, and should be read together with, the more detailed financial and other information
included in this Letter of Offer, including the information contained in the sections “Industry Overview”, “Risk Factors”, “Business” and
“Management’s Discussion and Analysis on Results of Operations and Financial Conditions” on pages 138, 11, 149 and 234, respectively.
The following is a summary of our business. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed
information in the chapter entitled “Business” at page 149 of this Letter of Offer.
Overview
We are one of India’s leading entertainment and media (“E&M”) companies with a presence across several businesses such as theatrical
exhibition of films, film and media services and television content production and distribution. Our headquarters are located in Mumbai and we
have operations across 78 cities and towns in India and internationally, in, the UK and the United States.
Our theatrical exhibition business is our largest source of revenue. We operate one of India’s largest cinema chains, under the brand ‘BIG
Cinemas’, with 254 screens in India (including 16 screens which are only managed by our Company) and an additional 185 screens in the
United States (including 116 screens which are only managed by our Company) as of May 31, 2013. During Fiscal 2012, BIG Cinemas
(excluding customers of screens which are only managed by our Company) catered to approximately 502 lakhs and 74 lakhs consumers in India
and overseas, respectively and approximately 144 lakhs consumers in India for the six months ended March 31, 2013 March 31, 2013 and 15
lakhs consumers overseas for the six months ended March 31, 2013.
Our film and media services business comprising production services, post-production services and media and creative services for films and
television is our second largest source of revenue, which comprises:
Production services: We lease sound stages, shooting floors, standard and high definition multi-camera equipment and other related
equipment to television and film production companies.
Post-production services: We process and trade film negatives at our laboratory located in Film City, Mumbai. Our 4K DI laboratory
located in Film City, Mumbai undertakes quality enhancement of film and television content through digital techniques.
Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to 3D and CGI services through
our wholly owned subsidiary, Reliance MediaWorks Entertainment Services Limited. In addition, our wholly owned subsidiaries
located in United States and UK, Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK) Limited, respectively,
are engaged in the business of digital image correction, film restoration and film processing.
We operate our film post production services through our production laboratory in Mumbai and our creative services through facilities in
Burbank (United States), London (UK) and Navi Mumbai (India). Films processed at our laboratory in Mumbai have won, among others, 15
national awards for cinematography and our Company’s film processing facilities have been certified by Kodak Imagecare, an internationally
recognised quality certification program, for each of the years beginning 2007. We were among four companies to receive the “Judges Award
for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in 2010. In August 2011, our Company received a
patent for an innovation – “System and method for removing semi-transparent artifacts from digital images caused by contaminants in the
camera’s optical path”. We won the Scientific and Technical Award, 2012 at the Academy of Motion Picture, Arts and Sciences in 2012, for
the development of a unique and efficient system for the reduction of noise and other artefacts, thereby providing high quality images required
by the film making process.
As a part of our long term growth strategy of asset creation, during the previous five years, we have established:
a business process outsourcing (BPO) facility at Navi Mumbai;
post-production facilities for television commercials and broadcast; and
a DI Lab.
42
Further, we have purchased broadcast and film cameras. We have also increased the number of screens we operate. This has been achieved
organically and has enhanced our reach in terms of exhibition business and also enabled us to strengthen our capabilities in post-production
services and creative services divisions.
are also in the process of establishing approximately 2,00,000 square feet studio located in Film City, Mumbai with facilities for shooting
films, television shows and television commercials, which we believe meets international standards. This studio aims to provide a one-stop
solution for all production needs for domestic and international clients. When completed, the studio is expected to have three studio
buildings with eight sound stages with appropriate noise control and other features. A part of the studio constituting one studio building
with three sound stages is in operation since January 2011. We expect to complete the remaining portion of the studio by December 2013.
We are also engaged in the business of television content production through our subsidiary, Big Synergy Media Limited, under the brand
“BIG Synergy”, which primarily produces non-fiction programmes in addition to adapting international programme formats for Indian
viewers. We have produced shows such as Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India’s Got
Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.
For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our restated consolidated net loss after tax was ` 34,044.77 lakhs, `
91,016.62 lakhs and ` 32,796.95 lakhs, respectively and our standalone net loss after tax was ` 27,593.15 lakhs, ` 70,356.34 lakhs and `
24,348.00 lakhs, respectively. For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our consolidated total income was `
36,637.80 lakhs, ` 125,486.90 lakhs and ` 85,026.20 lakhs, respectively and our standalone total income was ` 24,026.10 lakhs, `
80,454.80 lakhs and ` 54,287.40 lakhs respectively.
Our Competitive Strengths
We believe the following are our key competitive strengths:
Strong reputation and brand in the E&M sector
We believe that we have established a strong reputation and brand in the E&M sector. We have rebranded our theatrical exhibition and our
television content production businesses as “BIG Cinemas” and “BIG Synergy”, respectively. This rebranding was undertaken in order to create
a single E&M brand, “BIG”.
We have received various awards for our theatrical exhibition business, including “Multiplex of the Year” for the year 2012 at Star Retail
Awards, “Best Cinema Chain” for the year 2012 ZEE ETC Business Awards, “Most Admired Innovative Concept of the Year” at the Images
Retail Awards 2010 for our Ciné Diner theatre exhibition concept, “Most Admired Retailer of the Year: Entertainment” award at the India
Retail Awards in 2009, the “Exhibitor of the Year” award at the CineAsia 2008 awards and the “Retailer of the Year” in the ‘Entertainment &
Fun’ category at the India Retail Summit in 2007. The Silent National Anthem campaign launched by Big Cinemas has secured a silver lion in
the PR Lions category and two bronze lions for Best Use of Broadcast in a Promotional Campaign and Corporate Image & Information, Films
categories in 2011.
BIG Synergy, under which we produce television content, has produced television shows such as Kaun Banega Crorepati, Kya Aap Paanchvi
Paas Se Tez Hain, Dus Ka Dum, India’s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. Many of these shows have
received high viewer ratings and received awards in various categories.
Our Academy Award winner wholly owned subsidiary Lowry Digital, we believe is one of the leading digital image correction and restoration
facilities in the world. Lowry Digital’s clients include industry leaders such as Walt Disney Pictures and Television and Warner Bros.
Entertainment Inc. Lowry Digital’s facility has provided image enhancement and restoration services to approximately 621 films as of May 31,
2013 and has worked on classics such as Casablanca, Singin’ in the Rain, Sunset Boulevard and a number of Walt Disney Pictures & Television
classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie the Pooh, Beauty and the Beast and 101
Dalmatians.
We invested 30% in capital of Galloping Horse America LLC. Consequently, Galloping Horse America LLC has been renamed Galloping
Horse-Reliance LLC. Galloping Horse-Reliance LLC has acquired certain assets of Digital Domain Media Group Inc (DDMG), an Academy
43
Award-winning digital production studio in Hollywood. We believe that this association strengthens our position substantially as a major service
provider for Hollywood studios as also demonstrates our quality and efficient workflow processes as well as strong brand repute.
We believe that our longstanding presence in the film processing business has made us one of the important operators in the Hindi film category
in addition to being a key operator in certain regional language films. Films processed at our laboratory located in Mumbai have won, among
others, 15 national awards for cinematography and our film processing facilities have been certified by Kodak Imagecare, an internationally
recognised quality certification program, for each of the years beginning 2007.
We believe we have established a strong reputation and brand through the quality of our products and services which have obtained industry
recognition and customer satisfaction. We believe that our strong reputation and brand differentiates us from our competitors.
Demonstrated ability to expand our operations both organically and inorganically
We have created a global E&M company that is capable of operating across the entire E&M business value chain. Since the Reliance Group
acquired control of our Company in the financial year 2006, we have grown and diversified our business. Our revenues have grown from
`36,296.74 lakhs in Fiscal 2008 to `1,25,486.90 lakhs in Fiscal 2012. Currently, we have diversified service offering across several businesses,
such as theatrical exhibition of films, film and media services and television and content production and distribution.
Our theatrical exhibition business has expanded from 32 screens across five cities as of March 31, 2006 to 439 screens across more than 99
towns and cities in India and the United States as of May 31, 2013. Of the 439 screens 355 screens are equipped with digital projectors. The
number of customers our Big Cinemas brand (excluding customers of screens which are only managed by our Company) catered to in India
increased from 126 lakhs in Fiscal 2008 to 576 lakhs across India and overseas in Fiscal 2012. Big Cinemas (excluding customers of screens
which are only managed by our Company) had approximately 144 lakhs customers in India for the six months ended March 31, 2013 and 15
lakhs customers overseas for the six months ended March 31, 2013.
We have also demonstrated our ability to acquire companies located in India and overseas in order to consolidate our position as a company that
is capable of operating across the entire E&M business value chain. For example, we acquired Rave Entertainment Private Limited (“Rave”),
Synergy Communications Private Limited (now, Big Synergy Media Limited), iLab and Lowry Digital between the financial years 2007 and
2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-Reliance LLC, an associate entity, in financial
year 2012. The acquisition of Rave helped us in establishing our footprint in the North Indian cinema territories, while Synergy
Communications Private Limited has facilitated our entry into the business of television content production and Lowry, “Digital Domain” and
iLab have helped us establish significant presence in the North American and European markets, offering us new business opportunities in
image processing and restoration, 2D to 3D conversion and VFX.
Presence across various E&M businesses and geographies
We believe we are a one-stop solution provider for film and television producers and distributors in India. We provide the entire range of film
services, including studio rental, equipment rental, DI post-production laboratory services, VFX, stereoscopic conversion, film processing,
digital cinema mastering and operating cinema theatres in India and US. Our presence across various businesses in the E&M sector allows allow
us to develop long-term relationships as we are able to cross-sell our various services and offer solutions for the varying requirements of our
customers.
Our strategy is to create a single global E&M company that is capable of operating in geographically diverse markets and catering to a variety of
consumers. We have expanded our operations by acquiring theatrical exhibition assets in US. We have also established a presence in the film
post-production services business in the United States and the UK through the acquisition of Lowry Digital and iLab, respectively. We believe
that our multinational presence makes us an attractive proposition for our customers.
Our technological capabilities
We have attempted to develop or acquire the latest technological capabilities across our business lines to ensure that we remain competitive. In
our film and media services business, we utilise various sophisticated technologies, including digital camera technology capable of recording
high-definition video, sync-sound enabled studio stages and fibre optic cables for the distribution of films.
44
We utilise proprietary image processing technology to deliver superior picture elements and have developed a unique technology, the “Lowry
Process”, which is used to create high image quality for all outputs, including film, broadcast television, advertisements, digital cinema, Blu-Ray
Disc and internet video. Lowry Digital’s services include film restoration, emergency image repair, digital blow-ups and DI enhancements.
Lowry Digital also offers image enhancement tools which are used for the restoration and upgrade of damaged analogue film prints. We were
among four companies to receive “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in
November 2010. In August 2011, our Company received a patent for the following innovation – “System and method for removing semi-
transparent artifacts from digital images caused by contaminants in the camera’s optical path”. Our Company was the first Indian company to
be recognized in the category of science and technology for the development of a unique and efficient system for the reduction of noise and
other artefacts which provide a high quality image required for the film making process at the Academy of Motion Pictures, Arts & Science
Awards 2012.
Our film processing laboratory, through its telecine scanners, enables us to capture the fine details of a filmed image. We are capable of grading
the film in an uncompressed 4K resolution, the highest available resolution for film production.
We introduced the IMAX digital projection system in India in 2001, which has enabled us to take advantage of the increasing number of IMAX
and IMAX 3D releases.
The Reliance Group’s brand, experience and position in India and overseas
The Reliance Group is a diversified business group with a strong brand, level of experience and position in India and overseas. The Reliance
Group is headed by Anil D. Ambani, one of India’s leading entrepreneurs, who has won several awards and was voted as the “Person of Year –
2008” by Light Readings for outstanding achievements in the telecommunications industry and “Businessman of the Year” in a poll conducted
by The Times of India in 2006. Reliance Communications Limited, one of India’s leading wireless carriers, in terms of coverage and capacity,
and Reliance Capital Limited, one of the India’s leading private sector financial services companies are part of the Reliance Group. The
Reliance Group also includes Reliance Power Limited, one of India’s leading power development companies. The Reliance Group has a large
presence in the entertainment, communications and infrastructure sectors and we derive significant benefits from our association with the group.
For example, we are able to derive benefits of synergy in approaching advertisers through our relationship with Reliance Broadcast Network
Limited, a group company which owns 92.7 Big FM, one of India's leading radio networks, and BIG Street, an out-of-home media business. We
believe that we will continue to benefit from the depth of experience of the Reliance Group and our association with the Reliance Group
significantly enhances our brand value.
Our Business Strategy
Our business strategy is to build upon our competitive strengths and business opportunities to continue to be a leading E&M company. Our
business strategy consists of the following principal elements:
Create lean front-end centers in overseas markets and substantial back-end delivery centres in India for film and media services
Hollywood produces maximum number of high budget films with high expenditure on VFX and 3D conversions. However, the cost of
production in US is almost four times as compared to that in India (Source: Federation of Indian Chambers of Commerce and Industry and KPMG,
“Indian Media & Entertainment Industry Report 2009”). We have identified this opportunity and mapped the demand with supply. We have created
strategic front-ends in the markets of US (Burbank) and UK (London), complimented by back-end delivery centres in India, one of which is
located in a SEZ. The front-end centers in US and UK focus on business development and hence are lean on assets. We intend to continue to
focus on further enhancement of strategic front-end tie-ups as also further strengthen the force-to-market (sales) teams backed by increasing
back-end asset creation in India, where our main delivery centres are located.
Continue to focus on increasing our revenue from film and media services through complementary services
We intend to expand our service offerings in line with technological developments and market demand. For instance, we have extended our
BPO offerings from restoration and content processing to VFX, 2D to 3D conversion and CGI keeping in line with the emerging market trends.
We commenced production services business with equipment rental and have extended our service bouquet by building a state-of-the-art studio
in Film City, Mumbai, comprising of three studio buildings with eight sound stages, which we believe will significantly strengthen our ability to
provide film and media services. While a part of the studio constituting one studio building with three sound stages is operational, we expect to
complete the remaining portion of the studio by December 2013.
45
Opportunistically expand our theatrical exhibition business
The key elements of our growth strategy for our domestic theatrical exhibition business include the following:
Focussing on select metro and tier 1 cities which we believe could potentially have a higher consumption pattern; and
Expanding in certain select locations to establish a footprint or to strengthen our presence in identified film territories.
A retail centric approach, to enhance the profitability of our theatrical exhibition business
Our key focus in improving the profitability of our theatres is through increasing patronage and improving the overall customer experience,
which we believe will lead to greater spending by customers, allow us to command greater premiums in our ticket prices and increase
advertising revenues. We seek to achieve this through the following:
Enhancing our understanding of our customer to enable us to customise our programme selection. Further, we propose to introduce movie
and time specific pricing to increase admits and, consequently, box office collections;
Offering the customer a wider F&B choice and providing the customer greater access to F&B option in-theatre i.e. within the precincts of
the auditorium;
Augmenting our advertising sales by better utilising the available on-screen and off-screen space;
Delivering consistent customer experience, in line with our proposition of delivering an affordable luxury experience to larger pool of
customers, whilst keeping a tight control on costs; and
Exploring avenues for rent rationalisation, in the context of the changing market environment.
Grow our business through internal restructuring
We would continue to evaluate various opportunities for the growth of our business. In order to garner further investments with an aim to raise
fresh capital for the growth of our business, we are considering restructuring certain of our business divisions i.e. film and media services
business and exhibition business, including by transferring them to our subsidiaries. We may also consider options for entering into technical
and financial collaboration with strategic partners either directly or through our subsidiaries. For further details, please see the chapter entitled
“History and Certain Corporate Matters” at page 169 of this Letter of Offer.
Continue to pursue strategic acquisitions and alliances
We have expanded our operations by identifying and carrying out strategic acquisitions / alliances. The goals that we hope to achieve through
such strategic acquisitions/alliances include:
the expansion and enhancement of our businesses with minimum cost – both capital & operational;
the benefit of technical and operational synergies; and
expansion of our geographical reach.
We intend to continue to evaluate such options even in the future.
Competition
Our theatrical exhibition business comprises 254 screens across 96 cinemas and 78 cities in India as of May 31, 2013 and is a combination of
single or twin-screen cinemas and multiplexes. We face significant competition from some organised multiplex chains in large cities. We face
competition in the standalone cinema theatre segment from local cinema theatres in Tier 2 Cities and Tier 3 Cities where customers are price
sensitive.
46
In our film processing business, we face competition from certain other laboratories.
We have set up our 4K DI laboratory and face competition from existing companies. However, the client base that we have established through
our processing laboratory has helped us establish ourselves as a key player in this segment.
In our television content production business, we primarily create non-fiction content. This is an emerging segment and the competition is
restricted to a few players.
We also face intense competition in our US operations from various cinema theatre operators. Further, our restoration business also faces
competition in the United States.
47
SUMMARY FINANCIAL INFORMATION
Following is a summary of the financial information. This summary should be read in conjunction with, and is qualified in its entirety by, more
detailed information in the section entitled “Financial Statements” at page F-1.
Consolidated Financial Information
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September 30,
2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A Non-current assets
I Fixed assets
(i) Tangible assets 81,929.44 89,148.54 111,782.74 104,933.32 80,215.84 40,666.60
(ii) Intangible assets 7,925.80 8,895.80 8,804.20 6,034.60 3,249.60 18,251.60
(iii) Capital work-in-
progress 8,880.60 12,010.90 15,029.90 24,538.92 21,203.60 21,331.01
(iv) Intangible assets
under development - 285.90 - 132.51 - -
II Goodwill on
consolidation 5,149.02 5,145.32 8,819.42 8,728.62 4,202.56 2,746.76
III Non-current
investments 8,836.30 553.34 1,092.99 1,272.41 1,161.72 6,991.37
IV Deferred tax assets
(net) 26.11 14.31 2.60 2.20 18.70 64.40
V Long-term loans and
advances 22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35
VI Other non-current
assets 583.90 62.00 389.30 277.42 59.41 43.75
136,135.07 139,803.39 175,290.91 173,086.38 134,928.27 119,388.84
B Current assets
I Current investments - - 10.44 7,902.30 - 13,556.71
II Inventories 1,151.00 1,417.70 1,325.30 907.20 690.50 761.30
III
Trade receivables 18,546.30
18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
IV Cash and bank
balances 9,395.50 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49
V Short-term loans and
advances 5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
VI Other current assets 1,465.80 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96
36,217.60 46,293.94 53,482.14 79,667.62 68,885.16 67,888.57
48
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September 30,
2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Liabilities
C Non-current
liabilities
I Long-term
borrowings 37,443.20 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90
II Deferred tax
liabilities (net) - - 516.39 63.39 66.59 192.03
III Other long-term
liabilities 4,062.40 3,639.00 2,909.05 1,468.90 871.85 342.98
IV Long-term provisions 545.10 621.10 774.71 383.20 3,434.40 3,038.99
42,050.70 79,928.47 48,630.26 42,320.49 61,733.30 56,673.90
D Minority interest 1,216.98 1,074.08 1,347.88 1,736.58 3,006.58 1,621.78
E Current liabilities
I Short-term
borrowings 145,385.80 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22
II Trade payables 15,054.57 18,967.70 12,935.97 11,088.28 8,287.62 9,003.83
III Other current
liabilities 61,080.90 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62
IV Short-term provisions 271.50 200.90 215.99 165.91 230.40 1,826.01
221,792.77 163,199.80 176,089.69 172,880.96 89,832.56 61,198.68
F Net Worth (A+B-C-
D-E) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05
G Represented by
i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and surplus
(net) (95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74
H Net worth (i + ii) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05
49
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue from operations 35,139.80 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94
Other income 1,498.00 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80
Total revenue 36,637.80 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74
Direct operational expenses 14,321.70 49,304.20 31,059.80 28,102.00 23,868.30 9,792.00
Employee benefits expense 8,975.90 31,712.30 20,979.80 13,179.30 10,147.60 2,605.10
Finance costs (including loss on
derivative contracts) (net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Depreciation, amortisation and
impairment expense 7,723.40 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Other expenses 19,263.20 65,209.31 34,672.96 25,317.05 20,056.90 7,914.65
Total expenses 64,214.90 207,312.71 117,453.26 88,044.99 80,062.41 33,370.61
(Loss) / profit before exceptional
items, tax and minority interest (27,577.10) (81,825.81) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Exceptional items (6,001.07) (8,181.50) - - - -
(Loss) / profit before tax and
minority interest (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Less - Provision for taxes
- Current tax 232.90 769.50 113.90 39.77 416.36 228.29
- Deferred tax (credit) / charge (11.80) (492.59) 452.69 13.25 (69.44) 551.72
- Fringe benefit tax - - - - 171.70 78.00
Net (loss) / profit after tax before
minority interest (33,799.27) (90,284.22) (32,993.65) (13,334.11) (7,460.79) 2,068.12
Less: (Loss) / profit transferred to
Minority interest 245.50 732.40 (196.70) (530.87) (322.12) 53.80
Net (loss) / profit after tax before
adjustment pursuant to Schemes (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,138.67) 2,014.32
50
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Add: Adjustment pursuant to
Modified Composite Scheme of
Amalgamation and Arrangement - - - - - 84.20
Less: Adjustment pursuant to
Scheme of Amalgamation of
Katch 22 - - - - - (100.00)
Less: Adjustment pursuant to
Scheme of Arrangement for
demerger of Radio business/
Scheme of Amalgamation - - - - (649.30) -
Net (loss) / profit after tax (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.97) 1,998.52
Period March 2013 – Six months ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
51
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
A
Cash flow from operating
activities
Net (loss) / profit before
tax, as restated (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Adjustment for
Depreciation, amortisation
and impairment expense 9,608.00 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Bad debts / Advances
written off 155.53 1,010.40 201.20 152.10 348.40 391.00
Sundry balances written-
off 16.50 981.50 - - - -
Provisions written back - - - (241.70) - -
Capital work in progress
written off 2,902.70 4,424.60 - - - -
Provision for doubtful
debts and advances 590.00 4,767.92 1,666.30 121.90 - 3.20
Dividend income - (0.40) - - (132.60) (127.40)
Interest income (226.50) (1,255.70) (868.40) (538.60) (967.10) (967.70)
Profit on derivative
contract - - - - - (977.40)
Loss / (profit) on sale /
discarding of fixed assets
(net) 2.10 669.80 (2,694.80) 70.60 6.80 57.20
Loss on disposal of
subsidiaries - 2,722.92 - - - -
Gain on sale of current
investments (57.50) (39.50) (423.60) (274.40) (269.20) (32.40)
Gain on sale of
investments - - - - (1,700.00) (2,660.30)
Unrealised foreign
exchange (gain) / loss (1,250.80) (2,304.85) (129.80) (474.39) (1,136.60) 16.70
Finance costs (including
loss on derivative
contracts) (net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Operating profit before
working capital changes
and before net results of
Radio Business (7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 11,687.89
52
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Adjustment for cash loss
pertaining to transaction
relating to Radio business
till March 31, 2008,
pursuant to the Modified
Composite Scheme of
Amalgamation and
Arrangement - - - - - (8,377.00)
(7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 3,310.89
Operating profit before
working capital changes
Adjustment for :
(Increase) / decrease in
trade receivables (258.90) (2,083.40) (393.30) (2,513.90) (17,371.80) (7,658.94)
Decrease / (increase) in
loans and advances and
other assets 5,800.60 2,806.20 (5,004.24) (1,670.40) 7,719.20 (1,370.40)
(Increase) / Decrease / in
Inventories 270.30 (178.50) (417.00) (231.50) 80.10 (551.40)
Increase / (decrease) in
trade and other payable
(2,861.75) 7,912.90 3,345.12 4,196.26 (2,084.43) 10,404.08
Adjustment for Katch 22
merger due to Scheme of
Amalgamation - - - - - 23.30
Cash (used in) /
generated from operating
activities (4,957.19) (9,486.52) (6,404.88) 6,761.52 3,540.21 4,157.53
Taxes paid (net of refunds) (2,363.40) 1,198.30 1,188.26 (1,467.09) (1,974.50) (1,628.70)
Net cash (used in) /
generated from operating
activities (A) (7,320.59) (8,288.22) (5,216.62) 5,294.43 1,565.71 2,528.83
B
Cash flow from investing
activities
Purchase of fixed assets (1,184.67) (8,721.73) (22,335.80) (40,917.60) (35,911.00) (49,772.50)
Proceeds from sale of fixed
assets 463.30 1,914.10 13,999.70 23.10 1,097.50 14.10
Purchase of investment-
long term- in shares of
subsidiaries companies/
joint venture/ associates
- (90.80) (3,001.00) (7,861.20) (2,653.60)
(1,147.81)
Profit from / investment in
mutual funds (net) (27.00) 39.50 423.60 274.40 269.20 32.40
Redemption of /
investment in mutual
funds - - 7,983.98 (7,982.03) 13,556.69 (13,623.83)
Purchase of investment-
long term- other - - - (9.90) (4.30) (0.30)
53
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Proceeds on sale of non-
current investments / rights
therein 338.30 9,092.50 23.10 4,066.80 3,127.30 -
(Investment in) /
withdrawals’ from
Partnership firm (0.16) 33.26 (15.80) 371.80 278.30 -
Dividend income - - - - 132.60 127.40
Dividend income - 0.40 - - - -
Advance towards share
application - (6,811.20) - - - -
Interest income 260.10 1,368.30 784.50 647.30 1,626.10 288.20
Cash (used)/ generated in
investing activities (1,297.94) (3,084.87) 772.48 (46,527.13) (23,688.81) (65,588.13)
Taxed paid (net of refunds) (9.20) (76.80) (25.80) (35.60) (103.10) (194.40)
Net Cash (used)/
generated in investing
activities (B) (1,307.14) (3,161.67) 746.68 (46,562.73) (23,791.91) (65,782.53)
C
Cash flow from financing
activities
Proceeds from fresh issue
of share capital (including
share premium) /
preference shares
29,500.00 - - - -
-
Payment to Minority (53.57) (994.10) (228.60) (598.60) (212.90) -
Dividend tax paid on
distribution by Subsidiaries
and joint ventures - - (9.10) - (12.80) -
Introduction of capital by
minority partners in a
Subsidiary - - - 62.99 - -
Profit/ (loss) on option
contract - - - - - 977.40
Proceeds from long-term
borrowings - 68,308.50 39,775.90 5,489.00 7,826.10 40,000.00
Repayment of Foreign
currency convertible bonds - - (15,814.50) - - -
(Repayment) / proceeds
from short term borrowings
(net) 38,985.80 3,029.50 (1,003.80) 52,962.60 31,271.20 28,812.30
Repayment of long term
borrowings (18,248.00) (62,160.50) (17,083.30) - - -
Interest recoverable from
Reliance Broadcast
Network Limited - - (1,448.60) (2,507.90) (2,584.90) -
Recovered from Reliance 9,961.40 20,000.00 - - -
54
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Broadcast Network
Limited pursuant to
demerger of Radio
business 63.80
Dividend (including
dividend tax) paid - (7.90) - - (1,349.20) (1,164.10)
Finance costs (including
loss on derivative
contracts) (net) (10,425.70) (35,314.00) (18,773.50) (13,414.80) (11,287.10) (4,949.20)
Net cash generated from
(used in) financing
activities ( C ) 10,119.13 12,322.90 5,414.50 41,993.29 23,650.40 63,676.40
Net increase / (decrease)
in cash and cash
equivalent (A+B+C) 1,491.40 873.01 944.56 724.99 1,424.20 422.70
Cash and cash equivalents
as at beginning of the
period 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40 5,101.00
Cash and cash equivalents
taken over on acquisition
of subsidiaries - (794.96) - 292.10 611.90 -
Exchange gain / loss on
translation 36.80 99.20 20.10 (119.50) - -
Cash and cash equivalents
disposed on sale of subs/
JV's - - - - - -
Adjustment from
Composite Scheme of
Amalgamation and
Arrangement / Modified
Composite Scheme of
Amalgamation and
Arrangement / Scheme of
Arrangement / Scheme of
Amalgamation - - - - (4,207.00) 306.70
Cash and cash
equivalents as at end of
the period 7,227.20 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40
1,491.40 873.01 944.56 724.99 1,424.20 422.70
The above statement should be read together with significant accounting policies and notes to summary statement of cash flows, as restated, of
the Group (Annexure IV)
55
Note:
1. The above cash flow statement has been prepared under the “Indirect” Method as set out in Accounting Standard 3 – ‘Cash Flow
Statements’.
Period March 2013 – Six months ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
56
Standalone Financial Information
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
March 31,
2013
September 30,
2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A
Non-current assets
I Fixed assets
(i) Tangible assets 70,032.73 75,331.83 85,631.03 84,424.23 66,359.33 34,799.90
(ii) Intangible assets 645.30 722.20 418.10 184.60 219.00 18,206.10
(iii) Capital work-in-
progress 8,865.10 11,966.60 13,812.70 16,132.50 16,863.20 21,331.01
(iv) Intangible assets
under development - - - - - -
II Non-current
investments 18,040.94 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45
III Deferred tax assets
(net) - - - - - -
IV Long-term loans and
advances 21,737.30 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13
V Other non-current
assets 583.90 62.00 290.30 277.42 59.41 43.75
119,905.27 128,722.57 134,746.13 132,017.01 109,704.98 114,257.34
B Current assets
I Current investments - - - 7,902.40 - 13,500.30
II Inventories 762.80 658.50 724.50 596.80 518.30 191.80
III Trade receivables 16,116.40 16,179.40 18,741.90 22,119.10 20,202.40 11,640.10
IV Cash and bank
balances 5,351.90 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29
V Short-term loans and
advances 63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
VI Other current assets 424.20 717.60 4,265.20 2,765.47 4,281.48 3,911.16
86,398.80 79,766.60 94,307.00 108,369.43 79,887.31 67,886.33
Liabilities
C Non-current
liabilities
I Long-term borrowings 35,137.50 71,412.50 39,870.80 36,416.70 54,230.00 53,099.90
II Deferred tax liabilities
(net) - - - - - -
III Other long-term
liabilities 3,963.50 3,636.70 2,934.69 1,822.66 839.10 342.98
57
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
March 31,
2013
September 30,
2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
IV Long-term provisions 494.00 501.10 695.90 344.50 3,427.40 3,038.34
39,595.00 75,550.30 43,501.39 38,583.86 58,496.50 56,481.22
D Current liabilities
I Short-term borrowings 144,714.00 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60
II Trade payables 11,458.93 12,646.50 10,489.20 7,308.80 5,162.10 8,245.66
III Other current liabilities 57,466.20 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46
IV Short-term provisions 84.60 94.00 125.40 31.80 29.30 1,800.65
213,723.73 153,390.40 168,745.58 160,332.22 79,986.13 59,021.37
E Net Worth (A+B-C-
D) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
F Represented by
i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and surplus
(net) (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
G Net Worth (i+ ii) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
Note :
58
Summary statement of profit and loss of the Company, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Revenue from operations 23,641.20 76,129.30 48,669.20 45,551.99 48,234.34 26,894.71
Other income 384.90 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30
Total revenue 24,026.10 80,454.80 54,287.40 48,625.19 54,882.24 32,280.01
Direct operational expenses 9,547.77 30,064.14 20,449.70 15,631.90 15,752.90 7,585.30
Employee benefits expense 3,644.00 13,856.10 9,882.50 5,969.20 5,645.80 2,272.80
Finance costs (including loss on
derivative contracts) (net) 13,694.80 39,061.20 16,973.30 11,306.60 12,363.70 2,751.34
Depreciation and amortisation
expense 4,078.60
10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Other expenses 14,971.50 49,813.10 24,594.80 18,427.09 13,743.54 7,150.27
Total expenses 45,936.67 143,583.94 78,635.40 57,422.19 59,802.55 29,730.75
(Loss) / profit before tax and
exceptional items (21,910.57) (63,129.14) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Exceptional items (5,682.58) (7,227.20) - - - -
(Loss) / profit before tax (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Less - Provision for taxes
- Deferred tax charge / (credit) - - - - (134.80) 621.40
- Fringe benefit tax - - - - 151.50 71.49
Net (loss) / profit after tax (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
Period March 2013 – Six months ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
59
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
A Cash Flow from
operating activities
Net (loss) / profit before
tax, as restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Adjustment for
Depreciation and
amortisation expense 5,963.20 10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Bad debts / advances
written-off 27.32 103.60 107.30 50.50 263.00 385.10
Provision for doubtful
debts and advances 590.00 8,977.20 1,658.20 121.90 - -
Provision for diminution
in value of non-current
investments - 825.10 - - - -
Sundry balances written-
off 16.50 981.50 - - - -
Capital work-in-progress
written-off 2,902.70 4,424.60
Dividend income - (200.40) - (85.30) (205.40) (148.80)
Interest income (145.40) (1,080.10) (773.20) (406.40) (716.70) (831.50)
Profit on derivative
contract - - - - - (977.40)
Loss / (profit) on sale /
discarding of fixed assets
(net) 7.90 674.20 (2,701.10) 40.80 4.40 56.50
Gain on sale of non-
current investments - (766.50) - - - -
Gain on sale of current
investments (57.50) (39.50) (423.60) (274.40) (269.20) (9.10)
Gain on sale of non-
current investments - - - - (1,700.00) (2,660.30)
Provisions written back - - - (241.70) - -
Unrealised foreign
exchange (gain) / loss (13.00) (2,588.50) (305.30) 2,000.20 (807.20) (18.10)
60
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Finance costs (including
loss on derivative
contracts) (net)
39,061.20 16,973.30
11,306.60
12,363.70
2,751.34 13,694.80
Operating (loss) / profit
before working
capital changes and
before net results of
Radio business
(9,194.54) (3,077.30) 9,802.60 16,308.90 11,068.04
(4,606.63)
Adjustment for cash loss
pertaining to transaction
relating to Radio business
up to March 31, 2008
pursuant to Modified
Composite Scheme of
Amalgamation and
Arrangement - - - - - (8,377.00)
Operating (loss) / profit
before working capital
changes (4,606.73) (9,194.54) (3,077.30) 9,802.60 16,308.90 2,691.04
Adjustment for :
Decrease / (Increase) / in
trade receivables (413.22) 515.90 2,749.20 (2,008.60) (17,317.60) (7,582.14)
Decrease / (increase) in
loans and advances and
other assets 4,817.10 3,918.50 (5,484.91) (1,978.10) (6,541.45) (5,773.14)
Decrease / (increase) in
inventories (104.30) 66.00 (127.70) (78.50) (325.40) (30.30)
Increase / (decrease) in
trade and other payables 51.65 2,393.56 4,988.71 4,863.50 (4,444.30) 9,061.70
Cash generated from /
(used in) from operating
activities (255.40) (2,300.58) (952.00) 10,600.90 (12,319.85) (1,632.84)
Taxes paid (net of
refunds) (214.90) 1,790.10 1,693.00 (1,122.00) (1,544.50) (1,346.80)
Net cash generated from
/ (used in) operating
activities (A) (470.30) (510.48) 741.00 9,478.90 (13,864.35) (2,979.64)
B
Cash flow from
investing activities
Purchase of fixed assets (767.50)
(5,183.50)
(15,372.10)
(24,733.56)
(21,363.60)
(46,194.40)
Proceeds from sale of
fixed assets 46.40 762.40 13,986.70 10.80 1,087.60 12.10
Proceeds on sale of non-
current investments 60.00 1,233.62 1.00 4,066.80 3,127.30 -
Loan to subsidiaries and
joint ventures (net) (7,776.30) (1,721.70) (13,597.70) (21,195.70) - -
61
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Purchase of non-current
investment - in shares of
subsidiaries companies /
joint venture/ associates - (12,127.00) (2,000.00) (3,005.00) (201.80) (2,720.80)
Advance for application
money towards
subscription of shares in a
joint venture - - - (125.00) - -
Repayment of capital by
Partnership firm - - - 241.70 - -
Purchase of non-current
investments – other - - - (9.90) (4.50) (0.40)
Profit from / investment
in mutual funds (net) 57.50 39.50 423.60 274.40 269.20 9.10
Redemption of /
(investment in) mutual
funds - - 7,902.40 (7,902.40) 13,500.30 (13,480.50)
Dividend income - 200.40 - 85.30 205.40 148.80
Interest income 164.40 1,232.00 685.90 425.60 1,395.40 238.40
Cash generated (used
in) / from investing
activities (8,215.50) (15,564.28) (7,970.20) (51,866.96) (1,984.70) (61,987.69)
Taxed paid (net of
refunds) (0.06) (47.30) (17.00) (26.70) (78.10) (194.40)
Net Cash generated
(used in) / from
investing activities (B) (8,216.10) (15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)
C Cash flow from
financing activities
Proceeds from long-term
borrowings - 66,900.00 37,500.00 3,500.00 - 40,000.00
Proceeds from short-term
borrowings (net) 38,289.40 4,053.20 2,598.10 54,539.70 31,250.80 28,845.30
Proceeds from issue of
Preference Shares - 29,500.00 - - - -
Repayment of Foreign
currency convertible
bonds - (15,814.50) - - -
Repayment of long-term
borrowings (17,108.30) (61,020.80) (17,083.30) - - -
Profit on derivative
contract - - - - - 977.40
Interest recoverable from
Reliance Broadcast
Network Limited - - (1,448.60) (2,507.89) (2,584.90) -
62
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period March
2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008
Recovered from Reliance
Broadcast Network
Limited pursuant to
Scheme of Arrangement 63.80 9,961.40 20,000.00 - - -
Dividend (including
dividend distribution tax)
paid - - - - (1,349.20) (1,164.10)
Finance costs (including
loss on derivative
contracts) (net) (10,175.60) (34,561.34) (16,757.90) (13,034.60) (11,201.60) (4,795.30)
Net cash flow generated
from / (used in)
financing activities ( C ) 11,069.30 14,832.46 8,993.80 42,497.21 16,115.10 63,863.30
Net increase in cash and
cash equivalent
(A+B+C) 2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Cash and cash equivalents
as at beginning of the
period 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10 1,987.53
Cash and cash equivalents
adjusted pursuant to
Composite Scheme of
Amalgamation and
Arrangement - - - - 37.70 1,300.00
Cash and cash equivalents
adjusted pursuant to
Modified Composite
Scheme of Amalgamation
and Arrangement - - - - (843.70) -
Cash and cash
equivalents as at end of
the period 4,294.40 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10
2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Note :
1. The above cash flow statement has been prepared under the "Indirect Method" as set out in Accounting Standard 3 - Cash Flow
Statement
Period March 2013 – Six month ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
63
ISSUE
The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed
information in the chapter entitled “Terms of the Issue” at page 319 of this Letter of Offer.
Equity Shares to be issued 14,99,10,052 Equity Shares
Rights Entitlements 13 Equity Share(s) for every 4 fully paid-up Equity Share(s) held on the Record Date.
Record Date Wednesday, July 24, 2013
Face Value per Equity Share ` 5
Issue Price per Equity Share `40
Equity Shares outstanding prior to the Issue 4,61,26,170 Equity Shares(1)
Equity Shares outstanding after the Issue (assuming full
subscription for and Allotment of the Rights
Entitlements)
19,60,36,222 Equity Shares
Terms of the Issue For more information, please see the section entitled “Terms of the Issue” at page 319.
Use of Issue Proceeds For further information, please see the section entitled “Objects of the Issue” at page
81.
(1)
The Equity Shareholders of our Company have, at the Annual General meeting held on December 24, 2012 approved a qualified institutions placement (QIP)
of Equity Shares or instruments that are convertible into or exchangeable into Equity Shares, in one or more tranches, upto an aggregate amount not exceeding
` 50,000 lakhs. Accordingly, our Company may undertake the QIP in accordance with the ICDR Regulations.
64
GENERAL INFORMATION
Pursuant to the resolution passed by our Board of Directors at its meeting held on July 25, 2012 it has been decided to make the following offer
to the Equity Shareholders, with a right to renounce:
ISSUE OF UPTO 14,99,10,052 EQUITY SHARES AT A PREMIUM OF `35 PER EQUITY SHARE FOR AN AMOUNT NOT
EXCEEDING ` 59,964.02 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY IN
THE RATIO OF 13 EQUITY SHARES FOR EVERY 4 FULLY PAID-UP EQUITY SHARES HELD ON THE RECORD DATE,
THAT IS ON WEDNESDAY, JULY 24, 2013. THE ISSUE PRICE IS 8 TIMES THE FACE VALUE OF THE EQUITY SHARES.
Issue Programme
The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned
below:
ISSUE OPENS ON LAST DATE FOR RECEIVING
REQUESTS FOR SPLIT APPLICATION
FORMS
ISSUE CLOSES ON
Tuesday, August 6, 2013 Tuesday, August 13, 2013 Tuesday, August 20, 2013
Registered Office of our Company
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
Mumbai 400 065
Maharashtra
Telephone: +91 22 3980 8900
Facsimile: +91 22 3980 8985
Website: www.reliancemediaworks.com
CIN: L29299MH1987PLC045446
Address of the RoC
Our Company is registered with the RoC, which is situated at the following address:
Registrar of Companies
Everest, 5th
Floor,
100, Marine Drive
Mumbai 400 002
Maharashtra
Board of Directors of our Company
Our Board of Directors consists of:
Name and Designation DIN Address
Gautam Doshi
Non-Executive Non-Independent Director
00004612 402, Hamilton Court, Tagore Road, Santa Cruz (West),
Mumbai 400 054
Amit Khanna
Non-Executive Non-Independent Director
00005430 301, Sea Star, 3rd Floor, Balraj Sahani Marg Juhu, Mumbai
400 049
Sujal Shah
Non-Executive Independent Director
00058019 9, Ganesh Bhuvan, Natwar Nagar, Road no.2, Jogeshwari
(East), Mumbai 400 060
65
Name and Designation DIN Address
Anil Sekhri
Non-Executive Independent Director
00506790 23-A, Krishna Kunj, Opp. Millat Nagar, Off. New Link
Road, Andheri (West), Mumbai 400 053
Prasoon Joshi
Non-Executive Independent Director
01260545 201-202, B Wing, Quantum Park Building Union Park,
Khar (West), Mumbai 400 052
For further details of our Directors, please see the chapter entitled “Our Management” at page 190 of this Letter of Offer.
Company Secretary and Compliance Officer
Ashish Agarwal is the Company Secretary and Compliance Officer of our Company. His details are as follows:
Ashish Agarwal
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
Mumbai 400 065
Maharashtra
India
Tel: +91 22 3980 8900
Facsimile: +91 22 3980 8985
Email: [email protected]
Investors may contact the Registrar to the Issue or our Company Secretary and Compliance Officer for any pre-Issue / post-Issue related matter.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as
name, address of the applicant, number of Equity Shares applied for, amount blocked, ASBA Account number and the designated branch of the
SCSB where the CAF was submitted by the ASBA Investors.
Lead Manager
Axis Capital Limited
Axis House, 1st Floor,
C-2 Wadia International Centre,
P.B. Marg, Worli, Mumbai – 400 025
Telephone: +91 22 4325 3150
Facsimile: +91 22 4325 3000
Email: [email protected]
Website: www.axiscapital.co.in
Investor Grievance Email: [email protected]
Contact Person: Vivek Toshniwal
SEBI Registration Number: INM000012029
Legal Advisors to the Issue
Bharucha & Partners
2nd
Floor, Hague Building,
9, S. S. Ram Gulam Marg,
Ballard Estate,
Mumbai 400 001
Telephone: +91 22 6132 3900
Facsimile: +91 22 6633 3900
Email: [email protected]
66
Auditors to our Company
B S R & Co., Chartered Accountants
KPMG Lodha Excelus
1st Floor, Apollo Mills Compound
N.M. Joshi Marg
Mahalakshmi
Mumbai 400 011
Telephone: +91 22 3989 6000
Facsimile: +91 22 3983 5010
Email: [email protected]
Chaturvedi & Shah, Chartered Accountants
714-715 Tulsiani Chambers
212, Nariman Point
Mumbai 400 021
Telephone: +91 22 30218500
Facsimile: +91 22 302185 95
Email: [email protected]
Registrar to the Issue
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Telephone: +91 22 2596 7878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR000004058
Bankers to the Issue
Axis Bank Limited
Axis House, 6th
Floor,
Bombay Dyeing Mill Compound,
P. B. Marg, Worli,
Mumbai 400 029
Telephone: +91 22 2425 3654
Facsimile: +91 22 2424 1700
Contact Person: Sandeep Singh
Email: [email protected]
Bankers to our Company
Yes Bank Limited
Indiabulls Finance Centre,
Tower II, 25th
Floor,
S.B. Marg,
Elphinstone (West),
Mumbai 400 013
Telephone: +91 22 3347 9158
Email : [email protected]
Syndicate Bank
Nariman Point Branch
227, Nariman Bhavan, Ground Floor,
Nariman Point,
Mumbai 400 021
Telephone : +91 22 22029881 / 2284 2865
Facsimile: +91 22 2202 4812
Email : [email protected]
Axis Bank Limited
Axis House, 7th
Floor,
Bombay Dyeing Mill Compound,
P. B. Marg, Worli,
Union Bank of India
Industrial Finance Branch
Union Bank Bhavan,
239, Vidhan Bhavan Marg,
67
Mumbai 400 029
Telephone: +91 22 2425 3734
Facsimile: +91 22 2424 1700
Email : [email protected]
Nariman Point,
Mumbai 400 021
Telephone: +91 22 2289 2150
Facsimile: +91 22 2285 5037 / 2204 0023
Email : [email protected]
Bank of Baroda
Chakala Branch
Apple Heritage,
Andheri (East),
Mumbai 400 093
Telephone: +91 22 26877314 / 26879832
Facsimile No. : +91 22 2687 8307
Email : [email protected]
Self Certified Syndicate Banks
The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on http://www.sebi.gov.in.
Expert Opinion
Except for:
the report of our Auditors with respect to the audit report dated July 3, 2013 in the form and context it appears in this Letter of Offer; and
the report on the statement of tax benefits dated June 29, 2013 received from Jitendra Sanghavi & Co., Chartered Accountants, in the form
and context in which it appears in this Letter of Offer,
we have not obtained any other expert opinion in relation to this issue.
Monitoring Agency
Since the Issue size is in excess of `50,000 lakhs, in accordance with Regulation 16 of the ICDR Regulations, our Company is required to
appoint a Monitoring Agency. Accordingly, pursuant to an agreement dated July 1, 2013 we have appointed Axis Bank Limited as the
monitoring agency.
Statement of responsibility of the Lead Manager
Axis Capital Limited is the sole Lead Manager to the Issue and all the responsibilities relating to coordination and other activities in relation to the
Issue shall be performed by it. The various activities have been set forth below:
Sr. No. Activities
1. Structuring of the Issue in conformity with the ICDR Regulations, undertaking liaison with the Stock Exchanges, as may be required
under the prevailing framework of regulations/rules/guidelines issued by the SEBI and the Stock Exchanges.
2. Assisting our Company and its legal advisors in drafting the Letter of Offer, the Abridged Letter of Offer and the CAF; conduct due
diligence as may be required on our Company and assist in compliance with regulatory requirements of the SEBI and the Stock
Exchanges. The Lead Manager shall ensure compliance with the ICDR Regulations and other stipulated requirements and completion
of prescribed formalities with the Stock Exchanges and the SEBI.
3. Assisting in the listing of the Equity Shares issued pursuant to the Issue on the Stock Exchanges.
4. Assist in the selection of various agencies connected with the Issue, including printers, advertising agencies, legal advisors, bankers to
the Issue (selecting collection centers) and Registrar to the Issue.
68
Sr. No. Activities
5.
The post issue activities will involve essential follow up steps which must include finalization of basis of allotment, listing of
instruments and dispatch of certificates and refunds, if any, with the various agencies connected with the activities such as Registrars
to the Issue, Bankers to the Issue. Whilst, many of the post issue activities will be handled by other intermediaries, the Lead Manager
shall be responsible for ensuring that these agencies fulfill their functions and enable them to discharge this responsibility through
suitable agreements with the Issuer Company.
Credit Rating
As this is an issue of Equity Shares on rights basis, credit rating is not required for this Issue.
Trustees
As the Issue is of Equity Shares, the appointment of trustees is not required.
Appraisal Reports
None of the purposes for which the Net Proceeds are proposed to be utilised have been appraised by any bank or financial institution.
Book Building Process
As the Issue is a rights issue, the Issue will not be made through the book building process.
Underwriting
The Issue is not underwritten.
69
CAPITAL STRUCTURE
The share capital of our Company as on the date of this Letter of Offer is set forth below:
(In `, except share data)
Aggregate value at face value Aggregate value at Issue
Price
A AUTHORISED SHARE CAPITAL
48,00,00,000 Equity Shares of `5/- each 240,00,00,000
2,00,00,000 Preference Shares of `5/- each. 10,00,00,000
Total 250,00,00,000
B ISSUED, SUBSCRIBED AND PAID-UP CAPITAL BEFORE
THE ISSUE
4,61,26,170 fully paid up Equity Shares of `5/- each 23,06,30,850
10%, 29,50,000 Redeemable Non Convertible Preference Shares of
`5/- each 1,47,50,000
Total 24,53,80,850
C
PRESENT ISSUE BEING OFFERED TO THE EXISTING
EQUITY SHAREHOLDERS THROUGH THIS LETTER OF
OFFER
14,99,10,052 Equity Shares at an Issue Price of ` 40 per Equity Share 74,95,50,260 599,64,02,080
D ISSUED, SUBSCRIBED AND PAID UP CAPITAL AFTER THE
ISSUE
19,60,36,222 Equity Shares of `5/- each fully paid-up# 98,01,81,110
10%, 29,50,000 Redeemable Non Convertible Preference Shares of
`5/- each 1,47,50,000
E SECURITIES PREMIUM ACCOUNT
Before the Issue 761,69,98,808
After the Issue 1286,38,50,628 #
Assuming full subscription of the Issue
The Issue of Equity Shares has been authorised by our Board of Directors pursuant to its resolution dated July 25, 2012.
Changes in the Authorised Capital of our Company
1. The initial authorised share capital of `25,00,000 divided into 25,000 equity shares of `100/- each was sub-divided into 2,50,000 equity
shares of `10/- each pursuant to a resolution of our shareholders passed on November 1, 1999.
2. The authorised share capital of `25,00,000 divided into 2,50,000 equity shares of `10/- each was increased to `12,00,00,000 divided
into 1,20,00,000 equity shares of `10/- each pursuant to a resolution of the shareholders passed on November 1, 1999.
3. The authorised share capital of `12,00,00,000 divided into 1,20,00,000 equity shares of `10/- each was sub-divided into 2,40,00,000
Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on August 1, 2000.
4. The authorised share capital of `12,00,00,000 divided into 2,40,00,000 Equity Shares of `5/- each was increased to `15,00,00,000
divided into 3,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on May 14, 2005.
70
5. The authorised share capital of `15,00,00,000 divided into 3,00,00,000 Equity Shares of `5/- each was increased to `25,00,00,000
divided into 5,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on July 26, 2005.
6. The authorised share capital of `25,00,00,000 divided into 5,00,00,000 Equity Shares of `5/- each was increased to `30,00,00,000
divided into 6,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on January 12, 2006.
7. The authorised share capital of `30,00,00,000 divided into 6,00,00,000 Equity Shares of `5/- each was increased to `46,02,90,000
divided into 9,20,58,000 Equity Shares of `5/- each on May 29, 2009 pursuant to the scheme of amalgamation amongst Adlabs
Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited, Rave Entertainment Private
Limited and our Company. For further details, please see the chapter entitled “History and Certain Corporate Matters – Scheme of
Arrangements” at page 176 of this Letter of Offer.
8. The authorised share capital of `46,02,90,000 divided into 9,20,58,000 Equity Shares of `5/- each was increased to `50,00,00,000
divided into 10,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on September 30, 2009.
9. The authorised share capital was reclassified from `50,00,00,000 divided into 10,00,00,000 Equity Shares of `5/- each, to
`50,00,00,000 divided into 8,00,00,000 Equity Shares of `5/- each and 2,00,00,000 (Two Crore) Preference Shares of `5/- each
pursuant to a resolution of the shareholders passed on March 30, 2012.
10. The authorised share capital of `50,00,00,000 divided into 8,00,00,000 Equity Shares of `5/- each and 2,00,00,000 Preference Shares
of `5/- each was increased to `250,00,00,000 divided into 48,00,00,000 Equity Shares of `5/- each and 2,00,00,000 preference shares
of ` 5/- each pursuant to a resolution of the shareholders passed on July 13, 2012.
Notes to the Capital Structure
1. Share Capital History of our Company
a. The history of the equity share capital and securities premium account of our Company is detailed in the following table:
Date of allotment No. of equity
shares allotted
Face
Value
per
equity
share (`)
Issue Price
per equity
share (`)
Nature of
consideration
Cumulative
number of
equity shares
Cumulative equity
share capital (`)
Cumulative equity
securities premium
(`)(5)
At incorporation 200 100/- 100/- Cash 200 20,000 -
February 8, 1990 4,800 100/- 100/- Cash 5,000 5,00,000 -
November 1, 1999 85,00,000 10/-(1) - Bonus in the ratio
of 170:1 fully
paid up equity
shares out of the
general reserve
85,50,000 8,55,00,000 -
December 2, 1999 300 10/- 10/- Cash 85,50,300 8,55,03,000 -
December 29, 2000 44,00,150 5/-(2) 120/- Cash(3) 2,15,00,750 10,75,03,750 50,60,17,250
May 24, 2005 35,00,000 5/- 150/- Cash 2,50,00,750 12,50,03,750 1,01,35,17,250
August 8, 2005 1,10,00,000 5/- 175.20/- Cash 3,60,00,750 18,00,03,750 2,88,57,17,250
March 31, 2006 38,00,000 5/- 175.20/- Cash 3,98,00,750 19,90,03,750 3,53,24,77,250
November 13, 2007 4,92,754 5/- 543.42/- Cash(4) 4,02,93,504 20,14,67,520 3,79,77,85,858.68
November 22, 2007 7,48,866 5/- 543.42/- Cash(4) 4,10,42,370 20,52,11,850 4,20,09,90,290.40
November 30, 2007 3,99,396 5/- 543.42/- Cash(4) 4,14,41,766 20,72,08,830 4,41,60,33,084.72
December 11, 2007 9,48,565 5/- 543.42/- Cash(4) 4,23,90,331 21,19,51,655 4,92,67,59,452.02
December 19, 2007 7,03,933 5/- 543.42/- Cash(4) 4,30,94,264 21,54,71,320 5,30,57,71,057.88
January 2, 2008 16,22,544 5/- 543.42/- Cash(4) 4,47,16,808 22,35,84,040 6,17,93,81,198.36
71
Date of allotment No. of equity
shares allotted
Face
Value
per
equity
share (`)
Issue Price
per equity
share (`)
Nature of
consideration
Cumulative
number of
equity shares
Cumulative equity
share capital (`)
Cumulative equity
securities premium
(`)(5)
January 22, 2008 11,64,734 5/- 543.42/- Cash(4) 4,58,81,542 22,94,07,710 6,80,64,97,278.64
February 5, 2008 1,19,818 5/- 543.42/- Cash(4) 4,60,01,360 23,00,06,800 6,87,10,09,686.20
February 25, 2008 74,886 5/- 543.42/- Cash(4) 4,60,76,246 23,03,81,230 6,91,13,29,806.32
March 17, 2008 49,924 5/- 543.42/- Cash(4) 4,61,26,170 23,06,30,850 6,93,82,09,886.40 (1) On November 1, 1999, face value of the equity shares was sub-divided from `100/- each to `10/- each. (2) On August 1, 2000, face value of the equity shares was sub-divided from `10/- each to `5/- each. (3) Issuance of 44,00,150 Equity Shares pursuant to an initial public offer undertaken by our Company for an aggregate amount of `5,280.0
lakhs. (4) Equity Shares allotted by our Company pursuant to conversion of foreign currency convertible bonds. (5) Adjustments to the securities premium account: The amount standing to the credit of the securities premium account was adjusted towards
FCCB redemption premium and related issue expenses during the Fiscals 2006 to 2011. Further, it was adjusted pursuant to the various schemes
of arrangements undertaken by our Company, as approved by the respective High Courts, during Fiscal 2008 and Fiscal 2009. For details,
please see chapter entitled “Financial Statements”at page F-1 of this Letter of Offer.
b. The details of the equity shares allotted for consideration other than cash are provided in the following table:
Date of
allotment
Name of the allottee(s) No. of equity
shares allotted
Face value per
equity share (`)
Issue Price per
equity share (`)
Reasons for the allotment
November 1,
1999
Existing equity
shareholders of our
Company
85,00,000 10/- - Bonus in the ratio of 170:1 fully
paid up equity shares out of the
general reserve
c. The details of the preference shares allotted are provided in the following table:
Date of
allotment
Name of the
allottee(s)
No. of preference
shares allotted
Face value per
preference share
(`)
Issue Price
per equity
share (`)
Reasons for the allotment
March 31,
2012
Reliance Utility
Engineers Private
Limited
17,50,000 5/- 1,000/- For the purpose of networth rebuilding
and strengthening the long term
resource base of our Company
including meeting working capital
requirements March 31,
2012
Reliance Infocomm
Engineering Private
Limited
12,00,000 5/- 1,000/-
2. History of the equity share capital held by our Promoters
a. Details of the build-up of our Promoters’ shareholding in our Company:
Date of
allotment/
Transfer
Nature of transaction No. of Equity
Shares
Nature of
consideration
Face value
per Equity
Share (`)
Issue Price
/Average
Acquisition Price
per Equity Share
(`)
Percentage of
the pre- Issue
capital
(%)
Percentage of
the post- Issue
capital (%)#
Reliance Land Private Limited
June 30, 2005 Acquisition of Equity
Shares(1) 58,00,000 Cash 5/- 169.00/- 12.57 2.96
August 8, 2005 Preferential Allotment 1,10,00,000 Cash 5/- 175.20/- 23.85 5.61
March 31,
2006 Conversion of warrants 38,00,000 Cash 5/- 175.20/- 8.24 1.94
72
Date of
allotment/
Transfer
Nature of transaction No. of Equity
Shares
Nature of
consideration
Face value
per Equity
Share (`)
Issue Price
/Average
Acquisition Price
per Equity Share
(`)
Percentage of
the pre- Issue
capital
(%)
Percentage of
the post- Issue
capital (%)#
Total 2,06,00,000
44.66 10.51
Reliance Capital Limited
October 1,
2005
Purchase from
secondary market 12,55,000 Cash 5/- 99.19/- 2.72 0.64
January 6,
2009
Purchase from
secondary market 2,00,000 Cash 5/- 214.88/- 0.43 0.10
January 6,
2009
Purchase from
secondary market 2,00,000 Cash 5/- 214.73/- 0.43 0.10
January 7,
2009
Purchase from
secondary market 12,500 Cash 5/- 230.00/- 0.03 0.01
January 7,
2009
Purchase from
secondary market 12,500 Cash 5/- 228.01/- 0.03 0.01
January 9,
2009
Purchase from
secondary market 87,500 Cash 5/- 179.17/- 0.19 0.04
January 9,
2009
Purchase from
secondary market 87,500 Cash 5/- 178.75/- 0.19 0.04
January 12,
2009
Purchase from
secondary market 23,000 Cash 5/- 179.87/- 0.05 0.01
January 12,
2009
Purchase from
secondary market 77,000 Cash 5/- 180.03/- 0.17 0.04
January 14,
2009
Purchase from
secondary market 45,000 Cash 5/- 178.75/- 0.10 0.02
January 14,
2009
Purchase from
secondary market 55,000 Cash 5/- 178.87/- 0.12 0.03
February 3,
2009
Purchase from
secondary market 81,000 Cash 5/- 164.59/- 0.18 0.04
February 3,
2009
Purchase from
secondary market 1,19,000 Cash 5/- 165.17/- 0.26 0.06
February 10,
2009
Purchase from
secondary market 50,000 Cash 5/- 170.44/- 0.11 0.03
February 10,
2009
Purchase from
secondary market 50,000 Cash 5/- 170.14/- 0.11 0.03
February 13,
2009
Purchase from
secondary market 86,000 Cash 5/- 178.60/- 0.19 0.04
February 13,
2009
Purchase from
secondary market 1,14,000 Cash 5/- 178.36/- 0.25 0.06
February 18,
2009
Purchase from
secondary market 50,000 Cash 5/- 163.68/- 0.11 0.03
February 18,
2009
Purchase from
secondary market 50,000 Cash 5/- 163.33/- 0.11 0.03
February 25,
2009
Purchase from
secondary market 42,000 Cash 5/- 164.00/- 0.09 0.02
February 25,
2009
Purchase from
secondary market 58,000 Cash 5/- 163.97/- 0.13 0.03
February 26,
2009
Purchase from
secondary market 20,000 Cash 5/- 162.59/- 0.04 0.01
February 26,
2009
Purchase from
secondary market 80,000 Cash 5/- 162.80/- 0.17 0.04
February 27,
2009
Purchase from
secondary market 40,000 Cash 5/- 165.63/- 0.09 0.02
February 27, Purchase from 60,000 Cash 5/- 165.45/- 0.13 0.03
73
Date of
allotment/
Transfer
Nature of transaction No. of Equity
Shares
Nature of
consideration
Face value
per Equity
Share (`)
Issue Price
/Average
Acquisition Price
per Equity Share
(`)
Percentage of
the pre- Issue
capital
(%)
Percentage of
the post- Issue
capital (%)#
2009 secondary market
October 14,
2009 Acquisition of shares(2) 24,00,000 Cash 5/- 355.62/- 5.20 1.22
October 14,
2009 Acquisition of shares(2) 24,00,000 Cash 5/- 355.62/- 5.20 1.22
November 3,
2009
Purchase from
secondary market 15,000 Cash 5/- 251.03/- 0.03 0.01
November 3,
2009
Purchase from
secondary market 35,000 Cash 5/- 246.20/- 0.08 0.02
November 4,
2009
Purchase from
secondary market 15,000 Cash 5/- 251.73/- 0.03 0.01
November 4,
2009
Purchase from
secondary market 85,000 Cash 5/- 253.06/- 0.18 0.04
November 5,
2009
Purchase from
secondary market 30,000 Cash 5/- 272.23/- 0.07 0.02
November 5,
2009
Purchase from
secondary market 70,000 Cash 5/- 273.40/- 0.15 0.04
November 13,
2009
Purchase from
secondary market 24,000 Cash 5/- 284.95/- 0.05 0.01
November 13,
2009
Purchase from
secondary market 26,000 Cash 5/- 284.83/- 0.06 0.01
November 20,
2009
Purchase from
secondary market 15,000 Cash 5/- 282.86/- 0.03 0.01
November 20,
2009
Purchase from
secondary market 35,000 Cash 5/- 282.14/- 0.08 0.02
November 16,
2011
Purchase from
secondary market 1,00,352 Cash 5/- 83.24/- 0.22
0.05
November 17,
2011
Purchase from
secondary market 62,588 Cash 5/- 82.95/- 0.14
0.03
November 18,
2011
Purchase from
secondary market 81,070 Cash 5/- 81.88/- 0.18
0.04
November 22,
2011
Purchase from
secondary market 48,743 Cash 5/- 82.90/- 0.11
0.02
November 24,
2011
Purchase from
secondary market 1,00,000 Cash 5/- 83.50/- 0.22 0.05
November 29,
2011
Purchase from
secondary market 31,613 Cash 5/- 84.61/- 0.07 0.02
Total 85,29,366 18.49 4.35 # Assuming full subscription of the Issue
(1) On June 30, 2005, Reliance Land Private Limited entered into two separate share purchase agreements with Vasanji Asaria Mamania and
Rubaiyat Arun Patel, being erstwhile shareholders of our Company, for acquiring 44,00,000 Equity Shares and 14,00,000 Equity Shares,
respectively, i.e. aggregating to 58,00,000 Equity Shares.
(2) On October 14, 2009, there was an intergroup transfer from AAA Entertainment Private Limited to Reliance Capital Limited.
b. The Issue is exempted from the requirements of minimum promoters’ contribution in accordance with Regulation 34(c) of the ICDR
Regulations.
c. Our Promoters have, through the letters dated July 26, 2012 and July 1, 2013 (“Subscription Letters”), jointly and / or severally,
undertaken to (i) apply for Equity Shares being offered to them pursuant to the Issue to the extent of their Rights Entitlements; (ii)
apply directly or through our Company’s Promoter Group for any Equity Shares renounced in their favour; and (iii) apply directly or
through the Company’s Promoter Group for any additional Equity Shares in the Rights Issue only to the extent of any unsubscribed
74
portion of the Rights Issue, subject to applicable law, to ensure that at least 90% of the Rights Issue is subscribed (together the
“Promoter Subscription”).
As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance with the paragraph
above, either / both Promoters may acquire Equity Shares over and above their Rights Entitlements which may result in an increase in
their shareholding, individually and / or collectively, above their current shareholding. Any such subscription and acquisition of Equity
Shares by either / both Promoters in the Rights Issue will not result in change of control of the management of the Company in
accordance with Regulation 3 (2) of the Takeover Code and shall be exempt in terms of Regulation 10 (4) (b) of the Takeover Code.
Further, such subscription to additional Equity Shares by either / both Promoters beyond their Rights Entitlements will be in accordance
with the provisions of Regulation 10(4) (b) of the Takeover Code. As such, other than meeting the requirements indicated in the chapter
entitled “Objects of the Issue” at page 81 of this Letter of Offer, there is no other intention / purpose for the Issue, including any
intention to delist our Equity Shares, even if, as a result of any Allotment in the Issue to either / both Promoter(s) and / or the members
of our Promoter Group, the shareholding of our Promoters and/or Promoter Group in our Company exceeds their current shareholding.
However, such participation will not result in breach of minimum public shareholding requirement stipulated in the equity Listing
Agreement entered into between us and the Stock Exchanges.
d. Our Company had availed of unsecured loans aggregating `1,18,834.50 lakhs (“RCL Loan”) from Reliance Capital Limited, which is
one of our Promoters. As at May 31, 2013, the total amount outstanding for the RCL Loan was `1,14,783.43 lakhs. For further
details, please see the chapter entitled “Financial Indebtedness” at page 225 of this Letter of Offer. Reliance Capital Limited through
its letter dated March 8, 2013 and July 1, 2013 has consented to adjust the RCL Loan towards share application money against
Promoter Subscription. Consequently, no fresh Issue proceeds would be received by our Company to such an extent. For further
details, please see the chapter entitled“Objects of the Issue” at page 81 of this Letter of Offer.
3. Shareholding Pattern of our Company
The table below presents the shareholding pattern of Equity Shares for the quarter ended June 30, 2013 is as follows:
75
Category
code
Category of
Shareholder
Number of
Shareholders
Total number
of shares
Number of shares
held in
dematerialized
form
Total shareholding as a percentage
of total number of shares
Shares Pledged or otherwise
encumbered
As a percentage of
(A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a percentage
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=(VIII) /
(IV)*100
(A) Shareholding of Promoter and
Promoter Group
NA NA
1 Indian
(a) Individuals/ Hindu Undivided Family
(b) Central Government/ State
Government(s)
(c) Bodies Corporate 2 2,91,29,366 2,91,29,366 63.15 63.15
(d) Financial Institutions/ Banks
(e) Any Other(Specify)
Sub Total(A)(1) 2 2,91,29,366 2,91,29,366 63.15 63.15
2 Foreign
A Individuals (Non-Resident
Individuals/Foreign Individuals)
B Bodies Corporate
C Institutions
D Qualified Foreign Investors
E Any Other (specify)
Sub Total(A)(2) 0 0 0 0.00 0.00
Total Shareholding of Promoter
and Promoter Group (A)=
(A)(1)+(A)(2) 2 2,91,29,366 2,91,29,366 63.15 63.15
76
Category
code
Category of
Shareholder
Number of
Shareholders
Total number
of shares
Number of shares
held in
dematerialized
form
Total shareholding as a percentage
of total number of shares
Shares Pledged or otherwise
encumbered
As a percentage of
(A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a percentage
(B) Public shareholding N.A. N.A.
1 Institutions N.A. N.A.
(a) Mutual Funds/ UTI 0 0 0 0.00 0.00
(b) Financial Institutions /Banks 3 60,005 60,005 0.13 0.13
(c) Central Government/ State
Government(s)
(d) Venture Capital Funds
(e) Insurance Companies
(f) Foreign Institutional Investors 1 1 1 0.00 0.00
(g) Foreign Venture Capital Investors
(h) Qualified Foreign Investors
(i) Any Other (specify)
1. Trust 0 0 0 0.00 0.00
Sub-Total (B)(1) 4 60,006 60,006 0.13 0.13
2 Non-institutions
(a) Bodies Corporate 1,085 35,36,123 35,36,123 7.67 7.67
(b) Individuals-
i. Individual shareholders holding
nominal share capital up to `1
lakh 93,142 1,12,36,983 1,12,08,265 24.36 24.36 ii. Individual shareholders
holding nominal share capital in
excess of `1 lakh. 26 14,27,032 14,27,032 3.09 3.09
77
Category
code
Category of
Shareholder
Number of
Shareholders
Total number
of shares
Number of shares
held in
dematerialized
form
Total shareholding as a percentage
of total number of shares
Shares Pledged or otherwise
encumbered
As a percentage of
(A+B)
As a
percentage of
(A+B+C)
Number
of shares
As a percentage
(c) Qualified Foreign Investors
(d) Any Other (specify)
1. Clearing Member 286 4,58,159 4,58,159 0.99 0.99
2. NRI (Repartriate)
566
2,50,317
2,50,267
0.54
0.54
3. NRI (Non-Repartriate) 147
27,280
27,280 0.06 0.06
4. HUF 1 900 0 0.00 0.00
5. Trust 1 4 4 0.00 0.00
Sub-Total (B)(2)
95,254
1,69,36,798
1,69,07,130
36.72 36.72
Total Public Shareholding
(B)= (B)(1)+(B)(2)
95,258
1,69,96,804
1.69.67.136
36.85
36.85
TOTAL (A)+(B)
95,260 4,61,26,170
4,60,96,502
100.00 100.00
(C) Shares held by Custodians and
against which Depository
Receipts have been issued
N.A. 1 Promoter and Promoter Group
2 Public
GRAND TOTAL (A)+(B)+(C)
95,260 4,61,26,170
4,60,96,502
100.00 100.00
78
4. The list of top 10 shareholders of our Company and the number of Equity Shares held by them is as under:
a. As of July 21, 2013:
Sr. No. Name of the Shareholder Number of Equity Shares
held
Percentage of
shareholding
1. Reliance Land Private Limited 2,06,00,000 44.66
2. Reliance Capital Limited 85,29,366 18.49
3. Thalia Infratech Private Limited 2,04,000 0.44
4. Atul Goel 2,00,000 0.43
5. Vimgi Investments Pvt Ltd 1,70,000 0.37
6. Veena Gupta 1,60,000 0.35
7 Adonis Niryat Private Limited 1,60,000 0.35
8. Gulshan Investment Company Limited 1,46,000 0.32
9. Elara India Opportunities Fund Limited 1,41,380 0.31
10. Manmohan Shetty 1,22,484 0.27
b. As of July 14, 2013:
Sr. No. Name of the Shareholder Number of Equity
Shares held
Percentage of
shareholding
2. Reliance Land Private Limited 2,06,00,000 44.66
2. Reliance Capital Limited 85,29,366 18.49
3. Thalia Infratech Private Limited 2,04,000 0.44
4. Atul Goel 2,00,000 0.43
5. Vimgi Investments Pvt Ltd 1,70,000 0.37
6. Veena Gupta 1,60,000 0.35
7 Adonis Niryat Private Limited 1,60,000 0.35
8. Gulshan Investment Company Limited 1,46,000 0.32
9. Religare Finvest Ltd 1,36,495 0.30
10. Bonanza Portfolio Limited 1,28,261 0.28
c. As of July 22, 2011:
Sr. No. Name of the shareholder Number of Equity Shares
held
Percentage of
shareholding 1. Reliance Land Private Limited 2,06,00,000 44.66
2. Reliance Capital Limited 81,05,000 17.57
3. Manmohan Shetty 17,91,234 3.88
4. Deutsche Securities Mauritius Limited 4,08,116 0.88
5. BNP Paribas Arbitrage 3,88,400 0.84
6. Thalia Infratech Private Limited 2,04,000 0.44
7. Macquarie Bank Limited 1,96,000 0.42
8. Globe Capital Market Limited 1,77,755 0.39
9. JM Financial Services Private Limited 1,62,000 0.35
10. DLF Commercial Developers Limited 1,15,943 0.25
5. Our Company, our Directors and the Lead Manager have not entered into any buy-back arrangement and / or safety net facility
for purchase of Equity Shares from any person.
6. Our Company has not issued Equity Shares during a period of one year preceding the date of this Letter of Offer.
7. Except Reliance Securities Limited, which has sold one share in April 2013, none of our Promoters, directors of our Promoters,
Promoter Group, our Directors and their immediate relatives have purchased or sold any Equity Shares during a period of six
months preceding the date on which this Letter of Offer with SEBI.
8. Except as stated in the chapter entitled “Our Management” at page 198 of this Letter of Offer, none of our Directors and their
immediate relatives or key management personnel hold any Equity Shares. None of our Promoter Group or directors of our
79
Promoters hold any Equity Shares in our Company.
9. Preferential allotments made by our Company after being a listed company have been made in compliance with the relevant
provisions of applicable law.
10. Our Company has not issued any Equity Shares out of revaluation reserves.
11. Our Company has 94,615 members as of July 21, 2013.
12. Our Company has not issued any Equity Shares pursuant to any scheme approved under the Sections 391-394 of the
Companies Act.
13. Neither the Lead Manager nor any associates of the Lead Manager hold any Equity Shares in our Company.
14. All Equity Shares will be fully paid up at the time of Allotment failing which such Equity Shares may be forfeited for non-
payment of calls within 12 months from the date of Allotment.
15. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments convertible into the
Equity Shares.
16. There have been no financial arrangements whereby our Promoter Group, our Directors and their relatives have financed the
purchase by any other person of securities of our Company, other than in the normal course of the business of the financing
entity during a period of six months preceding the date of filing of this Letter of Offer.
17. Our Company’s shareholders have at the AGM held on December 24, 2012 approved a qualified institutions placement
(“QIP”) of Equity Shares or instruments that are convertible into or exchangeable with Equity Shares, in one or more tranches,
upto an aggregate amount not exceeding `50,000 lakhs. Our Company may undertake the QIP in accordance with the ICDR
Regulations, which may not be possible if our company has a negative networth as per the audited balance sheet of the
previous financial year. Except as stated above, there will be no further issue of Equity Shares, whether by way of issue of
bonus shares, preferential allotment, rights issue, or in any other manner during the period commencing from submission of
this Letter of Offer with SEBI until the Equity Shares have been listed.
18. Except the QIP as set out above, our Company presently does not intend or propose to alter the capital structure for a period of
six months from the Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares or further issue
of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares)
whether on a preferential basis or issue of bonus or rights or further public issue of specified securities or otherwise. However,
if our Company enters into acquisitions, joint ventures or other arrangements, our Company may, subject to necessary
approvals, consider raising additional capital to fund such activity or use Equity Shares as currency for acquisitions or
participation in such joint ventures.
19. Further, the shareholders of our Company pursuant to a resolution passed at the AGM held on August 31, 2010 have in terms
of section 81(1A) of the Companies Act and the SEBI (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999, accorded their consent to our Board of Directors to introduce and implement the Reliance
MediaWorks Employee Stock Option Scheme (“ESOS Scheme”). In terms of the resolution, our Board of Directors is also
authorised to issue and allot Equity Shares of our Company and/or options giving rights to purchase or subscribe such number
of Equity Shares/equity linked instruments including depository receipts (“ESOS Securities”) which could give rise to the
issue of Equity Shares of our Company, to the permanent employees of our Company, our Subsidiaries and our Directors on
such terms as may be decided by our Board of Directors.
Additionally, the number of ESOS Securities issued to any single employee, including any non executive or independent
director, during any one year shall be less than 1% of the issued and paid up Equity Shares of our Company i.e. upto 4,61,261
Equity Shares. However, the aggregate number of securities issued shall not exceed 10% of the paid up share capital of our
Company as on August 2, 2010 i.e. 46,12,617 Equity Shares.
As on the date of this Letter of Offer, our Company has not granted any ESOS Securities under the aforesaid scheme.
20. At any given time, there shall be only one denomination of the Equity Shares. Our Company shall comply with such disclosure
and accounting norms as may be specified by SEBI from time to time.
80
21. The Equity Shares are fully paid up and there are no partly paid up Equity Shares as on the date of filing this Letter of Offer.
22. The Issue will remain open for a minimum of 15 days. The Board of Directors or duly authorised committee thereof shall have
the right to extend the Issue period as it may determine from time to time, provided that the issue will not be kept open in
excess of 30 days from the Issue Opening Date.
23. An over-subscription to the extent of 10% of the Issue may be retained for the purpose of rounding off to the nearer multiple of
minimum allotment lot.
81
OBJECTS OF THE ISSUE
The objects of the Issue are:
1. Repayment / prepayment of debt; and
2. General corporate purposes.
The main objects set out in our Memorandum of Association enable us to undertake our existing activities and the activities for which
funds are being raised by us through the Issue.
Requirement of Funds
The details of the Net Proceeds are set forth in the following table:
Sr. No. Description Amount (In ` lakhs)
1. Gross proceeds of the Issue 59,964.02
2. Issue expenses 350.00
3. Net Proceeds 59,614.02
Means of Finance
The following table details the objects of the Issue and the amount proposed to be financed from the Net Proceeds of the Issue:
Sr. No. Objects of the Issue Amount proposed to be
financed from Net Proceeds of
the Issue (In ` lakhs)
Percentage amount proposed to be
financed from Net Proceeds of the
Issue (%)
1. Repayment/ prepayment of debt to Reliance
Capital Limited, viz one of our Promoters
45,000 75.05
2. Repayment/ prepayment of debt to other
lenders
14,200 23.68
3. General corporate purposes 414.02 0.69
Total 59,614.02 100.00
Utilization of Net Proceeds
The details of utilisation of net proceeds of the Issue will be in accordance with the table set forth below:
Sr. No. Particulars Amount to be utilised (In ` lakhs)
Upto September 2014
1. Repayment/ prepayment of debt to Reliance Capital Limited, viz one
of our Promoters
45,000
2. Repayment/ prepayment of debt to certain lenders 14,200
3. General corporate purposes 414.02
Total 59,614.02
Details of the Objects of the Issue
The stated objects of the Issue are proposed to be financed entirely out of the Net Proceeds. Accordingly, we confirm that there is no
requirement for us to make firm arrangements of finance through verifiable means towards 75% of the stated means of finance,
excluding the amount to be raised through the Issue. The Net Proceeds, after deduction of all issue expenses, are estimated to be
approximately ` 59,614.02 lakhs. The details in relation to Objects of the Issue are set forth herein below.
82
The fund requirement described below is based on the management estimates and is not appraised by any bank or financial institution. In
case of any shortfall or any variation in the actual utilization of funds earmarked for the objects mentioned above, such shortfall or
increased fund deployment for a particular activity will be financed through internal accruals and additional borrowings. If there is any
surplus from the Net Proceeds after meeting all the above mentioned objects, such surplus proceeds will be used for general corporate
purposes. Further, since the Net Proceeds of the Issue are not intended to be utilized for any project, there is no schedule of
implementation or any deployment of funds.
Our Company has availed of certain long-term and other short-term loan facilities from various banks, financial institutions, other
lenders and one of our Promoters. These loan facilities aggregated `2,53,334.50 lakhs as at May 31, 2013 and the amount outstanding
under these facilities as at May 31, 2013 was ` 226,518.80 lakhs. For further details of the long-term and short-term loan facilities
availed by our Company, please see the chapter entitled “Financial Indebtedness” at page 225 of this Letter of Offer. Our Company
intends to utilise ` 59,200 lakhs towards repayment and/or pre-payment of a portion of such outstanding debt.
1. Repayment of debt to Reliance Capital Limited
The following table provides the details of the unsecured loans availed by our Company from Reliance Capital Limited which are
proposed to be repaid and/or prepaid out of the Net Proceeds (“Identified Loans”) as certified by Sandeep S. Shah, Chartered
Accountants vide their certificate dated July 1, 2013:
Sr.
no.
Name of
the lenders
Nature of
borrowing
Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding as
at May 31, 2013
(In `lakhs)
Interest
Tenure
Repayment
1. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
March 7, 2012
25,187.50 21,136.43(1)
13.00%
p.a.
One year from the
date of
disbursement
On Demand
2. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
March 30, 2012
1,900.00 1,900.00(1)
13.00%
p.a.
One year from the
date of
disbursement
On Demand
3. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
April 3, 2012
18,850.00 18,850.00(1)
13.00%
p.a.
One year from the
date of
disbursement
On Demand
4. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
May 7, 2012
39,840.00 39,840.00(1)
13.00%
p.a.
One year from the
date of
disbursement
On Demand
5. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
June 7, 2012
3,863.50 3,863.50(1)
13.00%
p.a.
One year from the
date of
disbursement
On Demand
6. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated July
3, 2012
7,690.00 7,690.00(1)
13.00%
p.a.
One year from the
date of
disbursement
On Demand
7. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
September 10, 2012
4,565.50 4,565.50 13.00%
p.a.
One year from the
date of
disbursement
On Demand
8. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
3,238.00 3,238.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand
83
Sr.
no.
Name of
the lenders
Nature of
borrowing
Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding as
at May 31, 2013
(In `lakhs)
Interest
Tenure
Repayment
October 25, 2012
9. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
November 23, 2012
2,400.00 2,400.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand
10. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
December 6, 2012
3,500.00 3,500.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand
11. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
January 8, 2013
4,200.00 4,200.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand
12. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
February 5, 2013
2,000.00 2,000.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand
13. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
May 15, 2013
1,600.00 1,600.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand
Total 118,834.50 114,783.43
(1) These loans were due within one year from the date of respective disbursements and are currently overdue.
Each of our Promoters have undertaken by their letters dated July 1, 2013, jointly and / or severally to: (a) to apply for Equity Shares
being offered to us pursuant to the Rights Issue to the extent of our Rights Entitlements; (b) to apply directly or through the Company’s
Promoter Group for any Equity Shares renounced in their favour; and (c) to apply directly or through the Company’s Promoter Group for
any additional Equity Shares in the Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable
law, to ensure that at least 90% of the Rights Issue is subscribed.
Reliance Capital Limited through its letters dated March 8, 2013 and July 1, 2013 has consented to adjust the RCL Loan towards share
application money against Promoter Subscription. Consequently no fresh Issue proceeds would be received by our Company to such an
extent.
None of the identified loans provide for any penalty in the event of pre-payment of the outstanding amounts under such loans.
2. Repayment / pre-payment of loans from other lenders
A. Loans from banks
In addition to the above, we may also repay/pre-pay loan facilities availed from various financial institutions, including banks, in part or
full. Details of our outstanding loan facilities as certified by Sandeep S. Shah, Chartered Accountants vide their certificate dated July 1,
2013, are set out below.
Sr.
No.
Name of the
lender
Nature and date of the loan
agreement/sanction letter
Purpose of
utilisation
Amount
sanctioned as
at May 31,
2013 (in ₹
lakhs)
Amount
outstanding as
at May 31,
2013 (in ₹
lakhs)
Interest
(% per annum)
1. Union Bank of
India
Term loan agreement dated
January 29, 2010 and review
For financing
our Company’s
8,000.00 4,000.00(1) Base Rate +
3.50% p.a.
84
Sr.
No.
Name of the
lender
Nature and date of the loan
agreement/sanction letter
Purpose of
utilisation
Amount
sanctioned as
at May 31,
2013 (in ₹
lakhs)
Amount
outstanding as
at May 31,
2013 (in ₹
lakhs)
Interest
(% per annum)
letter dated January 18, 2010
as modified by the sanction
letter dated February 9, 2010.
This was further modified by
the sanction letter dated July
27, 2011. Our Company
accepted this revision effective
from June 6, 2012 vide
agreement dated June 7, 2012
Studio project
in Mumbai
2. Syndicate Bank General Agreement dated June
11, 2010 and the sanction letter
dated May 31, 2010 as
supplemented by letter dated
July 18, 2011
For augmenting
long term
working capital
requirement
15,000.00 8,437.50(2) Base Rate +
2.50% p.a.
3. Syndicate Bank General agreement dated June
10, 2011 and sanction letter
dated June 6, 2011 and
modified vide letter dated
October 10, 2011
Long term
working capital
10,000.00 10,000.00 Base rate + 1%
p.a.
4. Barclays Bank PLC 12.50% unsecured redeemable
Non –
Convertible Debentures
Adjustment of
amounts
payable under
an interest rate
swap
4,400.00 2,750.00(3) 12.50% p.a.,
compounded
monthly,
payable
quarterly in
arrears
Total 37,400.00 25,187.50 (1) On June 28, 2013 our Company repaid an installment of ` 400 lakhs. Accordingly, repayment of the said loan, if any, from the Net Proceeds will be
only to the extent of ` 3,600 lakhs. (2) On June 13, 2013 our Company repaid an installment of ` 937.50 lakhs. Accordingly, repayment of the said loan, if any, from the Net Proceeds will
be only to the extent of ` 7,500.00 lakhs. (3) On June 10, 2013 our Company repaid Series D of ` 550 lakhs. Accordingly, repayment of the said loan, if any, from the Net Proceeds will be only to
the extent of ` 2,200 lakhs.]
B. Loans from other lenders
Loans from other lenders as certified by Sandeep S. Shah, Chartered Accountants vide their certificate dated July 1, 2013, are set out
below:
Sr.
No.
Name of the
lender
Nature and date of the
loan agreement/sanction
letter
Amount sanctioned as at
May 31, 2013 (in ₹ lakhs)
Amount outstanding as at
May 31, 2013 (in ₹ lakhs)
Interest
(% per annum)
1. Magma Fin Corp
Limited
Inter corporate deposit
facility agreement dated
March 26, 2012, renewal
letter dated September 8,
2012 and March 20, 2013
2,200.00 2,200.00 12.00% p.a.
2. Magma Fin Corp
Limited
Inter corporate deposit
facility agreement dated
April 30, 2012, renewal
letter dated October 9,
2012 and April 6, 2013
1,300.00 1,300.00 12.00% p.a.
Total 3,500.00 3,500.00
85
Our Company intends to utilise the Net Proceeds to pre-pay / repay, in part or full, some of our outstanding loans availed of from various
financial institutions including banks. The rationale for pre-paying / repaying these facilities, inter alia, is to reduce our prevailing high
interest costs and to increase our administrative and operating flexibility.
We will identify the facilities to be repaid based, amongst others, on the factors set out below.
a. Sanction limits granted;
b. Existence of other facilities from the same lender;
c. Prevailing rate of interest; and
d. Operational flexibility.
86
The details of outstanding loan facilities availed from one of our Promoter, various financial institutions, banks and others along with end utilization of the same, as certified by Sandeep S. Shah,
Chartered Accountants vide their certificate dated July 1, 2013, are as follows:
Table A: Unsecured inter-corporate deposits taken from Promoters – Reliance Capital Limited
Sr.
no.
Name of the
lenders
Nature of
borrowing
Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
1. Reliance
Capital Limited
Inter corporate
deposit facility agreement
dated March 7,
2012
25,187.50 21,136.43(1) 13.00%
p.a.
One year from the
date of disbursement
On Demand Towards repaying
commercial paper (CP) aggregating
`10,500 lakhs on
March 31, 2012. The CP was issued
on November 23, 2011 to Yes Bank.
Towards to
repaying a part of
CP’s aggregating `
12,500 lakhs on
November 25, 2011. The CP was
issued to Yes Bank on February 25,
2011 (Net proceeds
from issue# – ` 11,490.20 lakhs)
Towards repaying a loan
of ` 10,000 lakhs availed from Bank of India. The
loan was availed of on
May 28, 2010 and was repaid on February 28,
2011 ,
Towards repaying CP
aggregating ` 2,500 lakhs issued to IFCI
Limited on March 4,
2010 and balance ` 7,500 lakhs was used
to repay a part of a Syndicate Bank loan
of ` 10,000 lakhs
raised on December 24, 2009.
Refer note no. 4
below for details of utilization of CP
issued to IFCI
Limited
The loan from
Syndicate Bank was used towards
repaying a loan of
` 10,000 lakhs availed from
Allahabad Bank on January 9, 2009.
The loan was
repaid on January 8, 2010.
Refer note no 6 for
details of Allahabad Bank
loan utilization
Funding subsidiaries towards their capital
expenditure and working
capital requirements – `
267.71 lakhs (End Use)
Working capital
requirements of the
Company – ` 1,222.49
lakhs (End Use)
87
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Towards repaying an installment of a
loan aggregating to
` 10,000 lakhs availed of from
Syndicate Bank – ` 1,250 lakhs
The loan was drawn in various tranches
aggregating `
10,000 lakhs. The first drawdown
of ` 2,500 lakhs was on September
18, 2009.
` 1,080 lakhs towards capital
expenditure for the
Company’s theatrical exhibition
business. (End Use)
` 689.50 lakhs - Funding
subsidiaries towards their capital
expenditure and
working capital requirements (End
Use)
` 730.50 lakhs towards the
Company’s working capital requirements
(End Use)
Second drawdown
of ` 3,500 lakhs was on September
29, 2009.
` 763.50 lakhs - Funding
subsidiaries towards
their capital expenditure and
working capital
requirements (End
Use)
` 760 lakhs towards capital expenditure
for the Company’s
theatrical exhibition
business (End Use)
` 737 lakhs towards capital expenditure
for the Company’s
film production services business
88
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
(End Use).
` 1,239.50 lakhs
towards the
Company’s working capital requirements
(End Use)
Third drawdown of ` 2,000 lakhs was
October 29, 2009.
` 190 lakhs – Funding
subsidiaries towards their capital
expenditure and
working capital requirements (End
Use)
` 481.31 lakhs towards capital
expenditure for the
Company’s
theatrical exhibition
business(End Use)
` 682.39 lakhs towards capital
expenditure for the Company’s film
production services
business (End Use)
` 646.30 lakhs
towards the Company’s working
capital requirements
(End Use)
Fourth drawdown
of ` 2,000 lakhs –
December 29, 2009
` 1,500 lakhs -
funding subsidiaries
towards their capital expenditure and
working capital
requirements (End
89
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Use)–
` 357.68 lakhs
towards capital
expenditure for the Company’s film
production services
business (End Use).
` 142.32 lakhs
towards the Company’s working
capital requirements
(End Use)
Towards repaying a
sum of ` 937.50
lakhs, an installment of a
loan aggregating ` 15,000 lakhs
availed of from
Syndicate Bank –
Loan of ` 15,000
lakhs availed from
Syndicate Bank on June 14, 2010
Towards repaying loan
of ` 10,000 lakhs
availed from Union Bank of India and drawn
down on December 15,
2009 and December 30,
2009. The loan was
repaid on June 15, 2010.
Towards repaying a
secured loan of `
10,000 lakhs availed from Syndicate Bank
on December
31,2008. The loan
was repaid on
December 30, 2009.
Refer note no 2
below
` 1,733 lakhs - Funding
subsidiaries towards their capital
expenditure and
working capital requirements (End
Use)
` 209 lakhs towards capital expenditure
for the Company’s
theatrical exhibition business (End Use).
` 1,066.90 lakhs towards capital
expenditure for the
Company’s film
90
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
production services business. (End Use)
` 1,991.10 lakhs
towards the Company’s working
capital requirements
(End Use)
Towards repaying
CPs worth `12,500
lakhs on March 9, 2012. The CP was
issued on October
10, 2011 to Yes Bank. (Net
proceeds from
issue# – ` 11,920.55)
Used to repay CPs
of ` 10,000 raised
from Franklin
Templeton on
February 3, 2011.
The CP was repaid
on October 12,
2011. (Net
proceeds from
issue# – ` 9,252.39)
Used to repay CPs of ` 7,500 lakhs raised from
LIC Income Plus MF on May 19, 2010. The CPs
were repaid on February
4, 2011 (Net proceeds
from issue# – `
7,191.46)
Used to repay
CPs of ` 2,500
lakhs and `
1,500 lakhs
raised on November 25,
2009 and
November 30, 2009,
respectively,
from JM Mutual Fund.
The CPs were
repaid on May 25, 2010.
` 713 lakhs towards capital
expenditure of
theatrical exhibition
business (End
Use).
` 203.11 lakhs
towards capital expenditure of
film production
services business (End
Use).
Refer note no 5
91
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Working capital
requirements
of the
Company – `
2,275.35 lakhs (End Use)
` 310 lakhs towards
capital expenditure for the Company’s
film production
services business. (End Use)
` 508.52 lakhs towards capital
expenditure for the
Company’s theatrical exhibition
business. (End Use)
` 933.87 lakhs
towards the
Company’s working capital requirements
(End Use)
92
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
` 1,920.15 lakhs
towards the
Company’s
working capital
requirements part
(End Use)
2. Reliance
Capital Limited
Inter corporate
deposit facility agreement
dated March
30, 2012
1,900.00 1,900.00(1) 13.00%
p.a.
One year from the
date of disbursement
On Demand ` 1,900 lakhs
towards the Company’s
working capital
requirements (End
Use)
3. Reliance Capital
Limited
Inter corporate deposit facility
agreement
dated April 3, 2012
18,850.00 18,850.00(1) 13.00% p.a.
One year from the date of
disbursement
On Demand Repayment of loan
from DBS Bank – `
15,000 lakhs
The loan from DBS
Bank of ` 15,000
lakhs was used to
repay / redeem outstanding foreign
currency
convertible bonds aggregating Euro
20.65 million i.e. ` 15,488.66 lakhs.
The FCCB proceeds of Euro 84 million (` 45,719.94 lakhs) was utilized to inter alia for:
Establishing / acquiring new theatrical
exhibition complexes - ` 7,258.75 lakhs;
Film distribution - ` 1,394 lakhs;
Film production - ` 15,271.11 lakhs; and
Radio business - ` 16,630.82 lakhs.
(End Use)
Repayment of a
Yes Bank loan of ` 2,000 lakhs.
` 2,000 lakhs
towards the Company’s
working capital
requirements. (End
Use)
` 1,850 lakhs
towards the Company’s
working capital
requirements (End
Use)
93
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
4. Reliance Capital
Limited
Inter corporate deposit facility
agreement
dated May 7, 2012
39,840.00 39,840.00(1) 13.00% p.a.
One year from the date of
disbursement
On Demand Repayment of a
Yes Bank loan of `
1,000 lakhs.
` 1,000 lakhs towards the
Company’s
working capital requirements (End
Use)
Repayment of a syndicated bank
loan of – `
13,333.33 lakhs
The syndicated loan
of ` 40,000 lakhs
was utilized
towards
Repaying CPs
aggregating ` 25,500 lakhs;
capital expenditure of
theatrical
exhibition
business – `
14,500 lakhs
Refer note no. 1 regarding details of bank loan facilities availed by the Company
Repayment of a Canara Bank loan
of ` 12,500 lakhs raised on
September 28,
2010.
Repayment of CPs issued to IFCI
Limited of
` 2,500 lakhs on October 14, 2010
and July 16, 2010 (Net proceeds from
issue# – ` 2,451.05)
` 414 lakhs towards capital expenditure
for the Company’s film production
services business.
(End Use)
` 94 lakhs towards
capital expenditure for the Company’s
theatrical exhibition
business. (End Use)
` 1,943.05 lakhs
towards the
Company’s working capital requirements
(End Use)
94
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Towards repaying a
loan of ` 10,000
lakhs availed from
Union Bank on June 18, 2010. The
loan was repaid on
October 18, 2010.
Towards repaying a loan
of ` 10,000 availed from
Syndicate Bank on
December 24, 2009. The loan was repaid on June
24, 2010.
Towards repaying a
loan of ` 10,000
lakhs availed from Allahabad Bank on
January 9, 2009. The
loan was repaid on January 8, 2010.
Refer note no 6
Repayment of a
Canara Bank loan
of ` 7,500 lakhs
raised on November 15, 2010
Towards repaying a
CP of ` 4,000 lakhs –November 26,
2010 (LIC Mutual Fund issued on
August 30, 2010)
(Net proceeds from
issue# – ` 3,926.17
lakhs)
` 168 lakhs – Funding
subsidiaries towards
their capital expenditure and
working capital
requirements (End
Use)
` 55 lakhs towards capital expenditure
for the Company’s
film production services business.
(End Use)
` 3,703.17 lakhs towards the
Company’s working capital requirements
(End Use)
Towards repaying a
short term loan on December 2, 2010
– ` 1,500 lakhs –
HDFC Bank Short
term loan , drawn
on September 3, 2010)
` 1,500 lakhs – Funding subsidiaries towards
their capital expenditure
and working capital
requirements (End Use)
95
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Towards repaying a
part of CPs on
December 3, 2010
– Used for part
payment of CPs
aggregating `
20,000 lakhs
(LIC Mutual Fund
` 10,000 lakhs and
LIC Mutual Fund –
` 10,000 lakhs
issued on January
29, 2010) (Net
proceeds from
issue# - ` 18,998.04
lakhs)
Towards repaying CPs
of ` 2,500 lakhs –
Religare Mutual Fund
taken on January 6, 2010
and repaid on February
26, 2010
Towards partly repaying a loan of
Allahabad Bank of `
10,000 lakhs drawn on January 9, 2009
Refer note no 6
Towards repaying CPs
of ` 5,000 lakhs issued to JM Mutual Fund on
January 6, 2010 and
repaid on February 26, 2010
Towards party repaying
CPs of ` 17,500 lakhs
partly issued to LIC Mutual Fund:
` 12,500 lakhs on December 8, 2009 ;
and
` 5,000 lakhs on
December 14, 2009.
The CPs was repaid on March 8, 2010.
Towards repaying the
following CPs
` 3,000 lakhs -
Religare Mutual Fund –
issued on
September 9, 2009
` 7,000 lakhs –
JM Mutual Fund – issued
on September 9, 2009
` 2,500 lakhs –
Andhra Bank – issued on
September 9,
2009
towards partly
repaying CPs
CP’s of Religare Mutual Fund, JM
Mutual Fund and
Andhra Bank were partly used for
funding of a CP
Yes Bank Limited
– ` 15,000 lakhs
issued on April 29, 2009 and repaid on
September 9, 2009
(Net proceeds
from issue# - `
14,562.24 lakhs) Refer note no 7
For details of utilization of IDFC
Limited refer note
no 8
96
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
issued to IDFC
Limited of `
15,000 lakhs –
raised on September 14,
2009 and due
on December 14, 2009
Repayment of loan
of Yes Bank – ` 3,000 lakhs
500 lakhs –
Funding subsidiaries
towards their capital
expenditure
and working capital
requirements
(End Use)
2,500 lakhs
towards the
Company’s working capital
requirements
(End Use)
Repayment of loan
of Yes Bank – `
1,500 lakhs
` 1,500 lakhs
towards the
Company’s working capital
requirements (End
Use)
– ` 1,006.67 lakhs
towards the
Company’s working capital
requirements (End
Use)
97
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
5. Reliance Capital
Limited
Inter corporate deposit facility
agreement
dated June 7, 2012
3,863.50 3,863.50(1) 13.00% p.a.
One year from the date of
disbursement
On Demand Repayment of loan of Syndicate Bank
– ` 937.50 lakhs
Refer utilization given in Sr. No. 1
of Table A given
for Syndicate Bank
repayment of `
937.50 lakhs
Repayment of loan of Syndicate Bank
– ` 1,250 lakhs
Refer utilization given in Sr. No. 1
of Table A given
for Syndicate Bank
repayment of `
1,250 lakhs
Repayment of an installment of loan
from Union Bank
of India – ` 400 lakhs
` 400 lakhs was expended towards
capital expenditure
for the studio at Film City, Mumbai.
(End Use)
Funding subsidiaries
towards their
capital expenditure and working capital
requirements – `
570.49 lakhs (End
Use)
` 705.51 lakhs towards the
Company’s
working capital requirements (End
Use)
6. Reliance
Capital Limited
Inter corporate
deposit facility agreement
dated July 3,
2012
7,690.00 7,690.00(1) 13.00%
p.a.
One year from the
date of disbursement
On Demand Funding
subsidiaries towards their
capital expenditure
and working capital
98
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
requirements – ` 4,401.45 lakhs
(End Use)
` 3,288.55 lakhs towards the
Company’s
working capital requirements (End
Use)
7. Reliance Capital
Limited
Inter corporate deposit facility
agreement
dated September 10,
2012
4,565.50 4,565.50 13.00% p.a.
One year from the date of
disbursement
On Demand Funding subsidiaries
towards their
capital expenditure and working capital
requirements – `
937.11 lakhs (End
Use)
Repayment of an
installment of loan from Union Bank
of India – ` 400
lakhs
` 400 lakhs was
expended towards capital expenditure
for the studio at
Film City, Mumbai. (End Use)
Repayment of a
series of non-
convertible
debentures issue to
Barclays Bank PLC
– `550 lakhs
Adjustment of
amounts payable
under an interest
rate swap held by
the Company
converted into
Unsecured
Redeemable Non -
Convertible
Debentures (End
Use)
99
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
` 1,740.89 lakhs
towards the
Company’s
working capital
requirements (End
Use)
Towards repaying a
sum of ` 937.50 lakhs, an
installment of a
loan aggregating ` 15,000 lakhs
availed of from Syndicate Bank –
Loan of ` 15,000
lakhs availed from Syndicate Bank on
June 14, 2010
Towards repaying loan
of ` 10,000 lakhs availed from Union
Bank of India and drawn
down on December 15, 2009 and December 30,
2009. The loan was
repaid on June 15, 2010.
` 1,733 lakhs -
Funding
subsidiaries towards
their capital
expenditure and working capital
requirements (End
Use)
` 209 lakhs towards
capital expenditure for the Company’s
theatrical exhibition
business (End Use).
` 1,066.90 lakhs
towards capital
expenditure for the
Company’s film
production services business. (End Use)
` 1,991.10 lakhs
towards the
Towards repaying a
secured loan of ` 10,000 lakhs availed
from Syndicate Bank
on December 31, 2008. The loan was
repaid on December
30, 2009.
Refer note no 2
below
100
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Company’s working capital requirements
(End Use)
8. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement
dated October
25, 2012
3,238.00 3,238.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand Funding
subsidiaries
towards their
capital expenditure
and working capital
requirements – `
329.17 lakhs (End
Use)
` 2,908.83 lakhs
towards the Company’s
working capital
requirements (End
Use)
9. Reliance
Capital
Limited
Inter corporate
deposit facility
agreement dated
November 23, 2012
2,400.00 2,400.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand Funding
subsidiaries
towards their capital expenditure
and working capital
requirements – `
331.77 lakhs (End
Use)
` 2,068.23 lakhs
towards the
Company’s working capital
requirements (End
Use)
10. Reliance
Capital
Limited
Inter
corporate
deposit
facility
3,500.00 3,500.00 13.00%
p.a.
One year from the
date of
disbursement
On Demand Funding
subsidiaries
towards their capital expenditure
and working capital
requirements – `
101
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
agreement
dated
December
6, 2012
531.50 lakhs (End
Use)
Repayment of an
installment of loan
from Union Bank
of India – ` 400
lakhs
` 400 lakhs was
expended towards capital expenditure
for the studio at
Film City, Mumbai. (End Use)
Repayment of a
series of non-
convertible
debentures issue to
Barclays Bank PLC
– `550 lakhs
Adjustment of
amounts payable
under an interest
rate swap held by
the Company
converted into
Unsecured
Redeemable Non -
Convertible
Debentures (End
Use)
Towards repaying a
sum of ` 937.50
lakhs, an installment of a
loan aggregating ` 15,000 lakhs
availed of from
Syndicate Bank –
Loan of ` 15,000
lakhs availed from
Syndicate Bank on June 14, 2010
Towards repaying loan
of ` 10,000 lakhs
availed from Union Bank of India and drawn
down on December 15,
2009 and December 30, 2009. The loan was
repaid on June 15, 2010.
` 1,733 lakhs - Funding
subsidiaries towards their capital
expenditure and
working capital requirements (End
Use)
Towards repaying a
secured loan of `
10,000 lakhs availed from Syndicate Bank
on December 31,
2008. The loan was repaid on December
30, 2009.
Refer note 2 below
102
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
` 209 lakhs towards capital expenditure
for the Company’s
theatrical exhibition business (End Use).
` 1,066.90 lakhs towards capital
expenditure for the
Company’s film production services
business. (End Use)
` 1,991.10 lakhs towards the
Company’s working capital requirements
(End Use)
` 1,081 lakhs towards the
Company’s
working capital requirements (End
Use)
11. Reliance Capital
Limited
Inter
corporate
deposit
facility
agreement
dated
January 8,
2013
4,200.00 4, 200.00 13.00% p.a.
One year from the date of
disbursement
On Demand Funding subsidiaries
towards their
capital expenditure and working capital
requirements – `
2,118.20 lakhs (End Use)
` 2,081.80
lakhs towards
the Company’s
working capital
requirements
(End Use)
103
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
12. Reliance
Capital
Limited
Inter
corporate
deposit
facility
agreement
dated
February 5,
2013
2,000.00 2,000.00 13.00%
p.a.
One year from
the date of
disbursement
On
Demand
Funding
subsidiaries
towards their
capital
expenditure and
working capital
requirements –
` 253.47 lakhs
(End Use)
` 1,746.53
lakhs towards
the Company’s
working capital
requirements
(End Use)
13. Reliance
Capital
Limited
Inter
corporate
deposit
facility
agreement
dated May
15, 2013
1,600.00 1,600.00 13.00%
p.a.
One year from
the date of
disbursement
On
Demand
Funding
subsidiaries
towards their
capital
expenditure and
working capital
requirements –
` 713.17 lakhs
(End Use)
Repayment of a
series of non-
convertible
debentures
issue to
Adjustment of
amounts
payable under
an interest rate
swap held by
104
Sr.
no. Name of the
lenders Nature of
borrowing Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May 31,
2013
(In ` lakhs)
Interest
Tenure
Repayment First level
utilization of loans
Subsequent traces Subsequent traces - 1 Subsequent traces –
2
Barclays Bank
PLC – ` 550
lakhs
the Company
converted into
Unsecured
Redeemable
Non -
Convertible
Debentures
(End Use)
` 336.83 lakhs
towards the
Company’s
working capital
requirements
(End Use)
(1) These loans were due within one year from the date of respective disbursements and are currently overdue.
Table B: Loan facilities availed from various financial institutions, including banks and others
Sr.
No.
Name of
the lender
Nature and date of the
loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at May
31, 2013 (in
` lakhs)
Amount
outstanding
as at May 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level utilization of
loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
1. Union Bank
of India
Term loan agreement
dated January 29, 2010 and review letter dated
January 18, 2010 as
For financing
the Company’s
Studio 8,000.00 4,000.00
Base Rate +
3.50% p.a.
Capital expenditure
towards studio at Film City, Mumbai (End
Use).
105
Sr.
No.
Name of
the lender
Nature and date of the
loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at May
31, 2013 (in
` lakhs)
Amount
outstanding
as at May 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level utilization of
loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
modified by the
sanction letter dated February 9, 2010
project in
Mumbai
2. Syndicate
Bank
General Agreement
dated June 11, 2010 and
the sanction letter dated
May 31, 2010 as
supplemented by letter
dated July 18, 2011
For
augmenting
long term
working
capital
requirement
15,000.00 8,437.50
Base Rate +
2.50% p.a. Loan of ` 15,000 lakhs
was drawn on 1June 4, 2010
` 10,000 lakhs used to repay loan
of ` 10,000 lakhs availed from Union Bank of India on
December 15, 2009 and
December 30, 2009. The loan was repaid on June 15, 2010
Repayment of a secured loan of ` 10,000 lakhs
availed from Syndicate Bank repaid on December 30, 2009. The loan was availed on
December 31, 2008.
Refer note 2
below
` 1,733 lakhs – Funding subsidiaries towards their
capital expenditure and
working capital requirements (End Use)
` 209 lakhs towards capital
expenditure for the Company’s theatrical
exhibition business. (End
Use)
` 1,066.90 towards capital
expenditure for the Company’s film production
services business. (End
Use)
` 1,991.10 lakhs towards the
Company’s working capital
requirements (End Use)
3. Syndicate
Bank
General agreement
dated June 10, 2011 and sanction letter dated
June 6, 2011
Long term
working capital
10,000.00 10,000.00
Base rate +
1% p.a.
Loan was drawn on 13
June 2011 and used for part repayment of CPs
issued to Franklin
Templeton aggregating
CP of Franklin Templeton raised
on December 28, 2010 was used
for repayment of a CP of `
20,000 lakhs raised from LIC
Mutual Fund issued on March 9,
CP of LIC Mutual Fund was used for the
repayment of CPs of ` 17,500 lakhs issued from LIC Mutual Fund on December 14, 2009
and repaid on March 26, 2010
Refer note 3
below
106
Sr.
No.
Name of
the lender
Nature and date of the
loan
agreement/sanction
letter
Purpose of
utilisation
Amount
sanctioned
as at May
31, 2013 (in
` lakhs)
Amount
outstanding
as at May 31,
2013 (in `
lakhs)
Interest
(% per
annum)
First level utilization of
loans
Subsequent traces Subsequent traces – 1 Subsequent
traces – 2
`22,500 lakhs, drawn on
December 28, 2010 and repaid on June 15, 2011.
(Net proceeds from
issue# – ` 21,339.07 lakhs)
2010 – ` 5,000 lakhs and March
15, 2010 – ` 15,000 lakhs. The CP was repaid on December 29,
2010 (Net proceeds from issue#
– ` 18,908.92 lakhs)
Funding subsidiaries towards their capital
expenditure and working capital requirements –
` 1,408.92 lakhs (End Use)
` 1,339.07 lakhs towards the
Company’s working capital
requirements (End Use).
4. Barclays
Bank PLC
Unsecured Redeemable
Non - Convertible
Debentures
4,400.00 2,750.00
12.50% p.a.,
compounded
monthly, payable
quarterly in
arrears
Series A – September
18, 2012
Series B – December 10, 2012
Series C – March 10,
2013 Series D – June 10, 2013
Series E – September
10, 2013
Series F – December 10,
2013
Series G – March 10, 2014
Series H – June 10, 2014
Series A – September 18, 2012 –
` 550.00
Series B – December 10, 2012 -
` 550.00
Series C – March 10, 2013 - ` 550.00
Series D – June 10, 2013 - ` 550.00
Series E – September 10, 2013 -
` 550.00
Series F – December 10, 2013 - `
550.00
Series G – March 10, 2014 - `
550.00
Series H – June 10, 2014 - ` 550.00
Adjustment of amounts payable under an
interest rate swap held by the Company
converted into Unsecured Redeemable Non - Convertible Debentures (End Use)
107
Table C: Unsecured inter-corporate deposits - Others
Sr. no. Name of
the
lenders
Nature of
borrowing
Amount
sanctioned
(In ` lakhs)
Principal
amount
outstanding
as at May
31, 2013
(In ` lakhs)
Interest
Tenure
Repayment First level utilization
of loans
Subsequent traces Subsequent traces - 1 Subsequent traces – 2
1. Magma
Fin Corp
Limited
Inter
corporate
deposit facility
agreement
dated March 26, 2012
2,200.00 2,200.00 12.00%
p.a.
6 months from
date of drawl
On Demand Repayment of an
installment of loan
from Union Bank of
India – ` 400 lakhs
` 400 lakhs was
expended towards
capital expenditure
for the studio at Film
City, Mumbai (End
Use).
` 383 lakhs - Funding subsidiaries towards
their capital
expenditure and working capital
requirements (End
Use)
` 1,417 lakhs. towards the Company’s
working capital requirements (End
Use)
2. Magma
Fin Corp Limited
Inter
corporate deposit
facility
agreement dated April
30, 2012
1,300.00 1,300.00 12.00%
p.a.
6 months from
date of drawl
On Demand ` 1,300 lakhs towards the Company’s
working capital
requirements (End
Use)
# - The CP’s have been issued at a discount to face value
108
Note no. 1: Syndicated loan from 6 Banks
Sr.
No.
Name of the
lender
Nature and date of the
loan agreement/sanction
letter
Purpose of
utilisation
Amount
Sanction
Amount
availed
Interest
(% per
annum)
First level
utilization of
loans
Subsequent
traces
Subsequent
traces - 1
Subsequent
traces – 2
1 Allahabad
Bank
June 27, 2012 Repayment of
existing
commercial
paper and
incurring fresh
capital
expenditure
5,000.00 5,000.00
13.25% -
(SBPLR –
1.50%) p.a.
Syndicated loan
of ₹40,000
lakhs was used
towards
repaying
commercial
papers
aggregating `
25,500 lakhs
and towards
capital
expenditure for
the Company’s
theatrical
exhibition
business – `
14,500 lakhs
(End Use).
Used for repayment of Commercial Papers (CP’s)
aggregating ₹25,500 lakhs in the matter set out below
CP issued to UTI Mutual Fund - ₹5,000 lakhs issued on
December 28, 2007 and repaid on March 26, 2008 (Net
proceeds from issue# – ₹ 4,898.48 lakhs)
Subsequent traces
CP issued to Tata Mutual Fund – ₹ 5,000 lakhs issued
on October 4, 2007 and repaid on December 28, 2007
(Net proceeds from issue# – ₹ 4,907.65 lakhs)
Subsequent traces
CP issued to ABN AMRO Mutual Fund – ₹ 5,000 lakhs
issued on July 6, 2007 and repaid on October 4, 2007
(Net proceeds from issue# – ₹ 4,903.87 lakhs)
Subsequent traces
₹ 4,903.87 lakhs was used to fund expansion of Radio
business, which was demerged from the Company
effective April 1, 2008 pursuant to scheme of demerger
approved by the High Court of Judicature at Mumbai
(End Use)
2 Export Import
Bank
June 27, 2012
7,000.00 7,000.00
3 Jammu &
Kashmir Bank
June 27, 2012
7,000.00 7,000.00
4 Syndicate
Bank
June 27, 2012
7,000.00 7,000.00
5 Union Bank of
India
June 27, 2012
6,000.00 6,000.00
6 Vijaya Bank June 27, 2012
8,000.00 8,000.00
109
Sr.
No.
Name of the
lender
Nature and date of the
loan agreement/sanction
letter
Purpose of
utilisation
Amount
Sanction
Amount
availed
Interest
(% per
annum)
First level
utilization of
loans
Subsequent
traces
Subsequent
traces - 1
Subsequent
traces – 2
Used for repayment of CP’s
CP issued to UTI Mutual Fund – ₹ 5,000 lakhs issued on
December 28, 2007 and repaid on March 26, 2008 (Net
proceeds from issue# – ₹ 4,898.48 lakhs)
Subsequent traces
CP issued to Kotak Mahindra Mutual Fund – ₹ 3,000
lakhs issued on October 3, 2007 and repaid on December
28, 2007 (Net proceeds from issue# – ₹ 2,943.82 lakhs)
&
CP issued to Principal Mutual Fund – ₹ 2,000 lakhs
issued on October 5, 2007 and repaid on December 28,
2007 (Net proceeds from issue# – ₹ 1,964.07 lakhs)
Subsequent traces
CP issued to UTI Mutual Fund – ₹ 3,000 lakhs issued on
July 5, 2007 and repaid on October 3, 2007 (Net
proceeds from issue# – ₹ 2,941.97 lakhs) &
CP issued to HSBC Mutual Fund – ₹ 2,000 lakhs issued
on July 6, 2007 and repaid on October 5, 2007 (Net
proceeds from issue# – ₹ 1,961.37 lakhs)
Subsequent traces
₹ 4,903.34 lakhs was used to fund expansion of Radio
business, which was demerged from the Company
effective April 1, 2008 pursuant to scheme of demerger
approved by the High Court of Judicature at Mumbai
(End Use)
110
Sr.
No.
Name of the
lender
Nature and date of the
loan agreement/sanction
letter
Purpose of
utilisation
Amount
Sanction
Amount
availed
Interest
(% per
annum)
First level
utilization of
loans
Subsequent
traces
Subsequent
traces - 1
Subsequent
traces – 2
Used for repayment of CP’s
CP issued to Sundaram BNP Paribas Mutual Fund – ₹
3,000 lakhs issued on December 26, 2007 and repaid on
March 26, 2008 (Net proceeds from issue# – ₹ 2,937.74
lakhs)
Subsequent traces
CP repaid to Sundaram BNP Paribas Mutual Fund - ₹
3,000 lakhs issued on September 28, 2007 and repaid on
December 26, 2007 (Net proceeds from issue# – ₹
2,941.90 lakhs)
Subsequent traces
CP repaid to Sundaram BNP Paribas Mutual Fund – ₹
3,000 lakhs issued on July 10, 2007 and repaid on
September 28, 2007 (Net proceeds from issue# – ₹
2,954.67 lakhs)
Subsequent traces
₹ 2,000 lakhs was used to fund expansion of Radio
business, which was demerged from the Company
effective April 1, 2008 pursuant to scheme of demerger
approved by the High Court of Judicature at Mumbai
(End Use)&
₹ 954.67 lakhs towards capital expenditure for the
Company’s theatrical exhibition business (End Use).
111
Sr.
No.
Name of the
lender
Nature and date of the
loan agreement/sanction
letter
Purpose of
utilisation
Amount
Sanction
Amount
availed
Interest
(% per
annum)
First level
utilization of
loans
Subsequent
traces
Subsequent
traces - 1
Subsequent
traces – 2
Used for repayment of CP’s
CP issued to UTI Mutual Fund – ₹ 5,000 lakhs issued on
December 26, 2007 and repaid on March 26, 2008 (Net
proceeds from issue# – ₹ 4,896.24 lakhs)
Subsequent traces
₹ 4,896.24 lakhs was used to fund expansion of Radio
business, which was demerged from the Company
effective April 1, 2008 pursuant to scheme of demerger
approved by the High Court of Judicature at Mumbai
(End Use)
Used for repayment of CP’s
CP issued to Principal Mutual Fund – ₹ 7,500 lakhs
issued on December 27, 2007 and repaid on March 26,
2008 (Net proceeds from issue# – ₹ 7,342.85 lakhs)
Subsequent traces
₹ 2,662.68 lakhs was used to fund expansion of Radio
business, which was demerged from the Company
effective April 1, 2008 pursuant to scheme of demerger
approved by the High Court of Judicature at Mumbai
(End Use)
₹ 4,680.17 lakhs towards capital expenditure for the
Company’s theatrical exhibition business (End Use).
112
Note no. 2
Syndicate Bank loan availed on December 31, 2008 and repaid on December 30, 2009, used for repayment of
a. Non-convertible debentures issued to Canara Robecco Mutual Fund – ₹ 5,000 lakhs – issued on November 21, 2008 and repaid on January 9,
2009
Subsequent traces
Repayment of CP of JM Financial Mutual Fund of ₹5,000 lakhs issued on November 6, 2008 and repaid on November 21, 2008 (Net proceeds from
issue# - ₹4,969.37 lakhs)
Subsequent traces
Part repayment of a CP of JM Financial Mutual Fund - ₹10,000 lakhs issued on September 19, 2008 and repaid on November 6, 2008 (Net proceeds
from issue# - ₹9,844.64 lakhs)
Subsequent traces
Used for repayment of 3 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Birla Sunlife Trustee
Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01
ABN AMRO Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Subsequent traces
Used for repayment of 4 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
HDFC Standard Life
Insurance Company 2,500.00 May 20, 2008 August 20, 2008 2,446.66
ABN AMRO Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Subsequent traces
Used for repayment of 3CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
LIC Mutual Fund 2,000.00 February 20, 2008 May 20, 2008 1,950.70
ABN AMRO Mutual Fund 5,000.00 February 20, 2008 May 20, 2008 4,876.75
Lotus India Mutual Fund 2,000.00 February 20, 2008 May 20, 2008 1,950.70
And
₹ 786.64 lakhs towards the Company’s working capital requirements (End Use)
113
Subsequent traces
Used for part repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Principal Mutual Fund 5,000.00 November 20, 2007 February 20, 2008 4,892.11
Birla Sunlife Trustee
Company Limited 4,500.00 November 20, 2007 February 20, 2008 4,402.89
Subsequent traces
Part repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on August 22, 2007 and repaid on November 20, 2007 (Net proceeds from
issue# - ₹ 11,764.45 lakhs)
Subsequent traces
Repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007 (Net proceeds from issue# - ₹
11,715.46 lakhs)
Subsequent traces
₹ 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹ 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 1,094.16 lakhs towards capital expenditure for the Company’s production and distribution business. (End Use)
b. Part repayment of a CP of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds
from issue# - ₹ 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ₹ 22,500 lakhs issued on October 24, 2008 and repaid on December 5, 2008 (Net proceeds from
issue# - ₹ 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra Mutual
Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco Mutual
Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
114
Subsequent traces
Used for repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco Mutual
Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 8.500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahabad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual Fund 4,500.00
June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Allahabad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative Bank
Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance Company
Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra Mutual
Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
And
₹ 1,938.84 lakhs towards the Company’s working capital requirements
115
Subsequent traces
₹ 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹ 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 11,353.84 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
Note no. 3
LIC Mutual Fund (through 2 CP’s) - ₹ 17,500 lakhs raised on December 14, 2009 and repaid on March 26, 2010 (Net proceeds from issue# - ₹
17,323.30 lakhs)
Subsequent traces
Part repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
IDFC Limited 15,000.00 September 14, 2009 December 14, 2009 14,706.67
Yes Bank Limited 7,500.00 September 14, 2009 December 14, 2009 7.359.63
Subsequent traces
Part repayment of 5 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Indian Overseas Bank 1,000.00 December 17, 2008 March 17, 2009 966.63
Federal Bank 2,500.00 December 17, 2008 March 17, 2009 2,416.58
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
And
₹ 234.75 lakhs towards the Company’s working capital requirements
116
Subsequent traces
Used for repayment of 4 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Canara Robecco Mutual
Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Kotak Mahindra Mutual
Fund 5,000.00 September 19, 2008 December 19, 2008 4,845.96
JP Morgan Mutual Fund 3,000.00 December 5, 2008 December 30, 2008 2,969.49
And
Repayment of a non-convertible debenture issued to Canara Robecco Mutual Fund – ₹ 5,000 lakhs issued on November 21, 2008 and repaid on
December 30, 2008
And
₹ 2,716.53 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
And
₹ 2,058.88 lakhs towards the Company’s working capital requirements (End Use)
Subsequent traces
Part repayment of 7 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
STCI Primary Dealer
Limited 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Birla Sunlife Trustee
Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01
ABN AMRO Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Kotak Mahindra Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
And
Repayment of a CP of JP Morgan Mutual Fund – ₹ 3,000 lakhs issued on November 6, 2008 and repaid on December 5, 2008 (Net proceeds from
issue# - ₹ 2,964.67 lakhs)
Subsequent traces
Repayment of a CP of JP Morgan Mutual Fund – ₹ 3,000 lakhs issued on September 19, 2008 and repaid on November 6, 2008 (Net proceeds from
issue# - ₹ 2,953.39 lakhs)
(This CP was repaid along with the 7 CP’s included above)
117
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
HDFC Standard Life
Insurance Co. Ltd. 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Sundaram BNP Paribas
Mutual Fund 1,000.00 May 20, 2008 August 20, 2008 978.66
ABN AMRO Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Birla Sunlife Insurance
Company Limited 1,000.00 May 20, 2008 August 20, 2008 978.66
And
Used for repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Birla Sunlife Insurance
Company Limited 5,500.00 February 20, 2008 August 20, 2008 5,238.78
Kotak Mahindra Mutual
Fund 2,500.00 February 20, 2008 August 20, 2008 2,381.26
Subsequent traces
CP’s of ₹12,000 lakhs
₹ 8,878.31 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 2,865.65 lakhs towards the Company’s working capital requirements (End Use)
CP’s of ₹8,000 lakhs
Repayment of a CP of Lotus India Mutual Fund – ₹ 2,500 lakhs issued on November 20, 2007 and repaid on February 20, 2008 (Net proceeds from
issue# - ₹ 2,446.05 lakhs)
And
₹ 5,120.04 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
And
CP of ₹ 2,500 lakhs was used for part repayment of a CP of UTI Bank Limited – ₹ 12,000 lakhs – issued on August 22, 2007 and repaid on
November 20, 2007 (Net proceeds from issue# - ₹ 11,764.45 lakhs)
Subsequent traces
Part repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on August 22, 2007 and repaid on November 20, 2007 (Net proceeds from
issue# - ₹ 11,764.45 lakhs)
Subsequent traces
Repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007 (Net proceeds from issue# - ₹
11,715.46 lakhs)
118
Subsequent traces
₹ 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹ 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 1,094.16 lakhs towards capital expenditure for the Company’s production and distribution business. (End Use)
Note no. 4
CP raised from IFCI Limited - ₹ 2,500 lakhs issued on March 4, 2010 and repaid on June 4, 2010 (Net proceeds from issue# - ₹ 2,452.10 lakhs)
Subsequent traces
Repayment of a CP of LIC Mutual Fund – ₹ 2,500 lakhs issued on December 8, 2009 and repaid on March 7, 2010 (Net proceeds from issue# - ₹
2,477.70 lakhs)
Subsequent traces
Repayment of a CP of Andhra Bank – ₹ 2,500 lakhs issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - `
2,457.58 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# -
₹ 14,562.24 lakhs)
Subsequent traces
Repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on February 3, 2009 and repaid on April 30, 2009 (Net proceeds from issue# - ₹
14,663.15 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds from issue# -
₹ 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ₹₹ 22,500 lakhs issued on October 24, 2008 and repaid on December 5, 2008 (Net proceeds from
issue# - ₹ 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra Mutual
Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco Mutual
Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
119
Subsequent traces
Used for repayment of 2 CP’s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco Mutual
Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 8,500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahabad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual Fund 4,500.00
June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Allahabad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative Bank
Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance Company
Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra Mutual
Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
And
₹ 1,938.84 lakhs towards the Company’s working capital requirements
120
Subsequent traces
₹ 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹ 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 11,353.84 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
Note no. 5
CPs of ₹ 2,500 lakhs and ₹ 1,500 lakhs raised on November 25, 2009 and November 30, 2009, respectively, from JM Mutual Fund. The CPs were
repaid on May 25, 2010 (Net proceeds from issue # ₹ 2,424.26 lakhs and ₹ 1,455.78 lakhs respectively)
Subsequent traces
₹ 2,380.04 lakhs towards capital expenditure for the Company’s film production services business. (End Use)
And
Repayment of a CP of JM Mutual Fund – ₹ 1,500 lakhs issued on September 1, 2009 and repaid on November 30, 2009 (Net proceeds from issue# - ₹
1,474.55 lakhs)
Subsequent traces
₹ 1,474.55 lakhs towards capital expenditure for the Company’s film production services business. (End Use)
Note no. 6
Towards repaying a loan of ₹ 10,000 lakhs availed from Allahabad Bank on January 9, 2009. The loan was repaid on January 8, 2010
Subsequent traces
Part repayment of a CP of ₹ 22,500 lakhs of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net
proceeds from issue# - ₹ 22,011.52 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds from issue#
- ` 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ₹ 22,500 lakhs issued on October 24, 2009 and repaid on December 5, 2009 (Net proceeds from
issue# - ₹ 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra Mutual
Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco Mutual
Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
121
Subsequent traces
Used for repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco Mutual
Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 8,500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahbad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual Fund 4,500.00
June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Allahbad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative Bank
Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance Company
Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra Mutual
Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
And
₹ 1,938.84 lakhs towards the Company’s working capital requirements
122
Subsequent traces
₹ 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹ 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 11,353.84 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
Note no. 7
CP’s of Religare Mutual Fund, JM Mutual Fund and Andhra Bank were partly used for funding of a CP Yes Bank Limited – ₹ 15,000 lakhs issued on
April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# - ` 14,562.24 lakhs)
CP of Religare Mutual Fund – ₹ 3,000 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - ₹
2,949.10 lakhs)
And
CP of JM Mutual Fund - ₹ 7,000 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - ₹ 6,881.23
lakhs)
And
CP of Andhra Bank - ₹ 2,500 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - ` 2,457.58 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# -
₹ 14,562.24 lakhs)
Subsequent traces
Repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on February 3, 2009 and repaid on 30 April 2009 (Net proceeds from issue# - ₹
14,663.15 lakhs)
Subsequent traces
Part repayment of a CP of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds from issue# -
₹ 22,011.53 lakhs)
Subsequent traces
Repayment of a CP of ABN AMRO Mutual Fund – ₹ 22,500 lakhs issued on October 24, 2008 and repaid on December 5, 2008 (Net proceeds from
issue# - ₹₹ 22,105.73 lakhs)
Subsequent traces
Used for repayment of 5 CP’s
Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Canara Robecco Mutual
Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53
Kotak Mahindra Mutual
Fund 5,000.00 September 26, 2008 October 24, 2008 4,947.06
Canara Robecco Mutual
Fund 10,000.00 September 26, 2008 October 24, 2008 9,894.12
IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53
123
Subsequent traces
Used for repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06
Canara Robecco Mutual
Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(` in lakhs)
ABN AMRO Mutual Fund 8.500.00 June 4, 2008 September 1, 2008 8,315.88
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Mirae Asset Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85
Allahbad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68
Birla Sunlife Mutual Fund 4,500.00
June 4, 2008 September 1, 2008 4,402.53
Subsequent traces
Used for repayment of 8 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Allahbad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87
Birla Sunlife Mutual Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21
United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27
UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34
Saraswat Cooperative Bank
Limited 1,000.00 March 4, 2008 June 4, 2008 975.55
SBI Life Insurance Company
Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87
Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14
ABN AMRO Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59
Subsequent traces
Used for repayment of 3 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80
Principal Mutual Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17
Kotak Mahindra Mutual
Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56
₹ 1,938.84 lakhs towards the Company’s working capital requirements
124
Subsequent traces
` 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹₹ 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 11,353.84 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
Note no. 8
CP of IDFC Limited - ` 15,000 lakhs issued on September 14, 2009 and repaid on December 14, 2009 (Net proceeds from issue# - ₹ 14,706.67 lakhs)
Subsequent traces
Part repayment of 5 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Indian Overseas Bank 1,000.00 December 17, 2008 March 17, 2009 966.63
Federal Bank 2,500.00 December 17, 2008 March 17, 2009 2,416.58
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05
And
₹ 234.75 lakhs towards the Company’s working capital requirements
Subsequent traces
Used for repayment of 4 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Canara Robecco Mutual
Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98
Kotak Mahindra Mutual
Fund 5,000.00 September 19, 2008 December 19, 2008 4,845.96
JP Morgan Mutual Fund 3,000.00 December 5, 2008 December 30, 2008 2,969.49
125
And
Repayment of a non-convertible debenture issued to Canara Robecco Mutual Fund – ` 5,000 lakhs issued on November 21, 2008 and repaid on
December 30, 2008
₹ 2,716.53 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
And
₹ 2,058.88 lakhs towards the Company’s working capital requirements (End Use)
Subsequent traces
Part repayment of 7 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
ABN AMRO Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
STCI Primary Dealer
Limited 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Birla Sunlife Trustee
Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01
ABN AMRO Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Canara Robecco Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
Kotak Mahindra Mutual
Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00
And
Repayment of a CP of JP Morgan Mutual Fund – ₹ 3,000 lakhs issued on November 6, 2008 and repaid on December 5, 2008 (Net proceeds from
issue# - ₹ 2,964.67 lakhs)
Subsequent traces
Repayment of a CP of JP Morgan Mutual Fund – ` 3,000 lakhs issued on September 19, 2008 and repaid on November 6, 2008 (Net proceeds from
issue# - ₹ 2,953.39 lakhs)
(This CP was repaid along with the 7 CP’s included above)
Subsequent traces
Used for repayment of 6 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹ in lakhs)
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
HDFC Standard Life
Insurance Co. Ltd. 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Sundaram BNP Paribas
Mutual Fund 1,000.00 May 20, 2008 August 20, 2008 978.66
ABN AMRO Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66
Birla Sunlife Insurance
Company Limited 1,000.00 May 20, 2008 August 20, 2008 978.66
126
And
Used for repayment of 2 CP’s
Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#
(₹₹ in lakhs)
Birla Sunlife Insurance
Company Limited 5,500.00 February 20, 2008 August 20, 2008 5,238.78
Kotak Mahindra Mutual
Fund 2,500.00 February 20, 2008 August 20, 2008 2,381.26
Subsequent traces
CP’s of ` 12,000 lakhs
₹ 8,878.31 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 2,865.65 lakhs towards the Company’s working capital requirements (End Use)
CP’s of ₹ 8,000 lakhs
Repayment of a CP of Lotus India Mutual Fund – ₹ 2,500 lakhs issued on 20 November 2007 and repaid on February 20, 2008 (Net proceeds from
issue# - ₹ 2,446.05 lakhs)
And
₹ 5,120.04 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)
CP of ₹ 2,500 lakhs was used for part repayment of a CP of UTI Bank Limited – ₹ 12,000 lakhs – issued on August 22, 2007 and repaid on 20
November 2007 (Net proceeds from issue# - ₹ 11,764.45 lakhs)
Subsequent traces
Part repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on August 22, 2007 and repaid on 20 November 2007 (Net proceeds from
issue# - ₹ 11,764.45 lakhs)
Subsequent traces
Repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007 (Net proceeds from issue# - ₹
11,715.46 lakhs)
Subsequent traces
` 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of
demerger approved by the High Court of Judicature at Mumbai (End Use)
And
₹ 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)
And
₹ 1,094.16 lakhs towards capital expenditure for the Company’s production and distribution business. (End Use)
For further details regarding our indebtedness, please see the chapter entitled “Financial Indebtedness” beginning at page 225 of this Letter of Offer.
127
3. General Corporate Purposes
Our Company intends to deploy the balance Net Proceeds aggregating ` 414.02 lakhs for general corporate purposes, including but
not restricted to, future growth requirements, strategic initiatives, partnerships, joint ventures and acquisitions, meeting exigencies
which our Company in ordinary course of business may face, or any other purposes as may be approved by the Board of Directors.
4. Issue related expenses
The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses, advertisement
expenses, and registrar’s fees. The estimated Issue related expenses are as follows:
Activity Expense
(₹ in lakhs)
Expense (% of total
expenses)
Expense (% of Issue
Size)
Fee to the Lead Manager 75.00 21.43 0.13
Fee to the Registrar to the Issue 3.06 0.87 0.01
Fee to the Monitoring Agency and Legal Advisors 17.00 4.86 0.03
Others (SEBI Fees, Stock Exchange Fees, Printing, Stationery
and Postage, Advertisement, etc)
254.94 72.84 0.43
Total estimated Issue expenses 350.00 100.00 0.58 Note: Our Company will recoup the expenses already incurred and paid, from the issue expenses set out above.
Interim use of proceeds
The management of our Company, in accordance with the policies formulated by it from time to time, will have flexibility in deploying
the Net Proceeds received from the Issue. Pending utilization of the Issue Proceeds for the purposes described above, our Company
intends to temporarily invest the funds in interest bearing liquid instruments including investments in mutual funds and other financial
products, such as principal protected funds, derivative linked debt instruments, other fixed and variable return instruments, listed debt
instruments, rated debentures or deposits with banks as may be approved by our Board of Directors. Such investments would be in
accordance with the investment policies approved by our Board of Directors from time to time.
Bridge Financing Facilities
Our Company has not raised any bridge loans from any bank or financial institution as on the date of this Letter of Offer, which are
proposed to be repaid from the Net Proceeds.
Monitoring of Utilisation of Funds
In terms of Regulation 16 of the ICDR Regulations we are required to appoint a monitoring agency since the Issue size is in excess of
₹50,000 lakhs. The Monitoring Agency will monitor the utilisation of Issue Proceeds.
Pursuant to clause 49 of the Listing Agreement, our Company shall on a quarterly basis disclose to the Audit Committee the uses and
applications of the Issue Proceeds. The Audit Committee shall review the report submitted by the Monitoring Agency and make
recommendations to our Board of Directors for further action, if appropriate. Our Company shall, on an annual basis, prepare a statement
of funds utilised for purposes other than those stated in this Letter of Offer and place it before the Audit Committee. Such disclosure
shall be made only until such time that all the Issue Proceeds have been utilised in full. The statement shall be certified by the statutory
auditors of our Company.
Further, in accordance with clause 43A of the Listing Agreement, our Company will furnish a statement to the Stock Exchanges on a
quarterly basis a statement on indicating material deviations, if any, in the utilisation of the Net Proceeds of the Issue. This information
will also be published in newspapers simultaneously / along with the interim or annual financial results, after placing the same before the
Audit Committee. Further, our Company will also inform the Stock Exchanges of deviations, if any, in the utilisation of Net Proceeds of
the Issue, pointed out by the Monitoring Agency, after review by our Audit Committee and also publish the same in the newspapers.
Our Company proposes to utilise the Net Proceeds to repay certain loans availed by our Company from our Promoter and related entities,
as mentioned in this chapter entitled “Objects of the Issue”. Other than as mentioned in this section, no part of the Issue Proceeds will be
paid by our Company as consideration to our Promoters, our Board of Directors, our Company’s key management personnel or
companies promoted by our Promoters, except in the usual course of business.
128
BASIS FOR ISSUE PRICE
You should read the following summary with the chapter entitled “Risk Factors” at page 11 and the more detailed information about us
and the restated financial statements included in this Letter of Offer at page F-1.
The face value of each Equity Share is ₹5/- and the Issue Price is 8 times the face value of each Equity Share.
Qualitative Factors
We believe we have the following competitive strengths:
1. Strong reputation and brand in the E&M sector;
2. Demonstrated ability to expand our operations both organically and inorganically;
3. Presence across various E&M businesses and geographies;
4. Our technological capabilities; and
5. The Reliance Group’s brand, experience and position in India and overseas.
For further details regarding some of the qualitative factors which form the basis for computing the Issue Price please see the chapters
entitled “Business” and “Risk Factors” at pages 149 and 11, respectively.
Quantitative Factors
Information presented in this section is derived from our standalone and consolidated restated financial statements prepared in
accordance with Indian GAAP, Companies Act and the ICDR Regulations. Some of the quantitative factors which form the basis for
computing Issue Price are as follows:
1. Basic Earnings Per Share (EPS) and Diluted Earnings Per Share (EPS)
Particulars Basic EPS (in ₹)
# Diluted EPS (in ₹)
#
Weight Standalone Consolidated Standalone Consolidated
Fiscal 2010 (19.07) (27.89) (19.07) (27.89) 1
Fiscal 2011 (52.79) (71.22) (52.79) (71.22) 2
Fiscal 2012 (152.53) (197.43) (152.53) (197.43) 3
Weighted Average (97.04) (127.10) (97.04) (127.10)
Six month period ended March 31,
2013 (59.82) (73.81) (59.82) (73.81)
# As per our audited restated financial statements
Note:
(1) The face value of Equity Share is ₹5/-; and
(2) Earnings per share calculations are done in accordance with AS 20 ‘Earnings per Share’ issued by the ICAI.
2. Price/Earning (P/E) ratio in relation to Issue Price of ₹ 40 per Equity Share
Sr. No. Particulars Standalone Consolidated
a. P/E ratio based on Basic EPS for Fiscal 2010 at the
Issue Price
Cannot be computed as EPS
for Fiscal 2010 is negative
Cannot be computed as EPS for
Fiscal 2010 is negative
b. P/E ratio based on Diluted EPS for Fiscal 2010 at the
Issue Price
Cannot be computed as EPS
for Fiscal 2010 is negative
Cannot be computed as EPS for
Fiscal 2010 is negative
c. P/E ratio based on Basic EPS for Fiscal 2011 at the
Issue Price
Cannot be computed as EPS
for Fiscal 2011 is negative
Cannot be computed as EPS for
Fiscal 2011 is negative
129
Sr. No. Particulars Standalone Consolidated
d. P/E ratio based on Diluted EPS for Fiscal 2011 at the
Issue Price
Cannot be computed as EPS
for Fiscal 2011 is negative
Cannot be computed as EPS for
Fiscal 2011 is negative
e. P/E ratio based on Basic EPS for Fiscal 2012 at the
Issue Price
Cannot be computed as EPS
for Fiscal 2012 is negative
Cannot be computed as EPS for
Fiscal 2012 is negative
f. P/E ratio based on Diluted EPS for Fiscal 2012 at the
Issue Price
Cannot be computed as EPS
for Fiscal 2012 is negative
Cannot be computed as EPS for
Fiscal 2012 is negative
g. P/E ratio based on Basic EPS for the six months ended
March 31, 2013 at the Issue Price
Cannot be computed as EPS
for the six months ended
March 31, 2013 is negative
Cannot be computed as EPS for
the six months ended March
31, 2013 is negative
h. P/E ratio based on Diluted EPS for the six months ended
March 31, 2013 at the Issue Price
Cannot be computed as EPS
for the six months ended
March 31, 2013 is negative
Cannot be computed as EPS for
the six months ended March
31, 2013 is negative
Peer Group P/ E*
Particulars P/ E Ratio
Highest Inox Leisure Limited - 33.83
Lowest PVR Limited - 16.47
Average 25.15#
* Computed based on closing market price as on March 28, 2013 on BSE Limited divided by respective EPS for the twelve month period ended March
31, 2013.
# Average of both the peer group companies, viz., Inox Leisure Limited and PVR Limited
3. Return on Net worth (“RoNW”)
Particulars RoNW (%) Weight
Standalone# Consolidated
#
Fiscal 2010 (21.21)% (35.92)% 1
Fiscal 2011 (144.88)% (1,214.37)% 2
Fiscal 2012(1)
NA NA 3
Weighted Average (103.66)% (821.55)%
Six month ended March 31,
2013(1)
NA NA
# As per our audited restated financial statements
Note: Net worth as appearing in the restated audited standalone and consolidated summary statement of assets and liabilities for the respective period
has been considered for RoNW. (1) RoNW for Fiscal 2012 and six months ended March 31, 2013 cannot be computed as our net worth as per the consolidated and standalone restated
financial statements is negative.
4. Minimum Return on Increased Net Worth Required to Maintain pre-Issue EPS as of March 31, 2013:
(a) Based on Basic EPS
Based on standalone restated financial statements: Cannot be computed as EPS is negative; and
Based on consolidated restated financial statements: Cannot be computed as EPS is negative.
(b) Based on Diluted EPS:
Based on standalone restated financial statements: Cannot be computed as EPS is negative; and
Based on consolidated restated financial statements: Cannot be computed as EPS is negative.
130
5. Net Asset Value per share
NAV (`)
Standalone# Consolidated
#
NAV per Equity Share as at March 31, 2013 (102.25) (201.31)
NAV per Equity Share after the Issue 6.53 (16.78)
Issue Price 40.00 40.00 # As per our audited restated financial statements
NAV per Equity Share = Net worth, as restated, at the end of the period/year (excluding preference share capital and premium)/ Number
of equity shares outstanding at the end of the period.
6. Comparison with Industry Peers:
Name of the
Company
Standalone/
Consolidated Period ended
Face Value
(`)
Basic EPS
(`) P/E
(1) RONW (%) NAV
Reliance
MediaWorks
Limited
Stand-alone Fiscal 2012(2)
5/- (152.53)# NA
(3) # NA
(4) # (44.66)
#
Stand-alone Six months ended
March 31, 2013
5/- (59.82) # NA
(3) # NA
(4) # (102.25)
#
Peer Group*
Inox Leisure
Limited Stand-alone
Year ended March
31, 2013
10/- 1.92 33.83 3.63% 82.08
PVR Limited Stand-alone Year ended March
31, 2013
10/- 18.42 16.47 8.53% 162.36
*Source: As per audited standalone financial statement filed with the Stock Exchanges # As per our audited restated financial statements
(1) Computed based on closing market price as on March 28, 2013 on BSE Limited divided by respective EPS for the twelve month period ended March
31, 2013. (2) Fiscal 2012 represents eighteen months ended September 30, 2012. (3) Cannot be computed as EPS is negative. (4) Cannot be computed as net worth is negative. (5) Computed by dividing the net profit for the period with the net worth. (6) Computed by dividing the net worth (excluding preference share capital and premium) with the total outstanding equity shares as at the end of the
period.
On the basis of the above qualitative and quantitative parameters and the current market price of the equity shares of the Company, our
Company, in consultation with the Lead Manager, is of the opinion that the Issue Price of ` 40 per Equity Share is justified. For further
details, please see the chapter entitled “Risk Factors” at page 11 and our financials including important profitability and return ratios, as
set out in the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.
131
To,
The Board of Directors,
Reliance MediaWorks Limited
Filmcity Complex,
Goregaon (East)
Mumbai - 400065
STATEMENT OF TAX BENEFITS
We hereby report that the enclosed statement, prepared by Reliance MediaWorks Limited (formerly known as Adlabs Films Limited)
(hereinafter referred to as the “Issuer”), states the possible tax benefits available to the Issuer and its members under the provisions of the
Income Tax Act, 1961, Wealth Tax Act, 1957 and Gift Tax Act, 1958 presently in force in India. The benefits as stated are dependent on
the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence the ability of the Company or its
shareholders to derive the tax benefits is dependent upon fulfilling such conditions.
The benefits discussed in the enclosed annexure are not exhaustive. This statement is only intended to provide general information to the
investors and is neither designed nor intended to be a substitute for professional advice. In view of the individual nature of the tax
consequences and the changing tax laws each investor is advised to consult his or her own tax consultant with respect to the specific tax
implications arising out of their participation in the issue.
We do not express any opinion or provide any assurance as to whether:
i) the Issuer or its members will continue to obtain these benefits in future; or
ii) the conditions prescribed for availing the benefits, where applicable have been / would be met
The contents of the enclosed statement are based on the information, explanations and representations obtained from the Issuer and on
the basis of the understanding of the business activities and operations of the Issuer and the interpretation of the current tax laws in force
in India.
For JITENDRA SANGHAVI & CO.
CHARTERED ACCOUNTANTS.
PLACE: MUMBAI (J.B. SANGHAVI)
Date: 29.6.2013 PARTNER
Membership No.30127
Firm Reg.No.104299W
132
TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS
The tax benefits listed below are the possible benefits available under the Income Tax Act, 1961 and the Wealth Tax Act, 1957, presently
in force in India. Several of these benefits are dependent on the Issuer or its members fulfilling the conditions prescribed under the
relevant provisions of the respective tax laws. Hence, the ability of the Issuer or its members to derive the tax benefits is dependent upon
fulfilling such conditions, which based on the business imperatives, the Issuer may or may not choose to fulfill.
The benefits discussed below are not exhaustive. This statement is only intended to provide general information to the investors and is
neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and
the changing tax laws, each investor is advised to consider in his / her own case the tax implications of an investment in the shares.
Further each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their
participation in the issue.
I. Tax Benefits available to the Issuer - under the Income Tax Act, 1961 (the Act)
A. Special Tax Benefits
The Issuer does not enjoy any special tax benefits
B. General Tax Benefits
1. Depreciation Benefits
Under section 32 of the Act, the Issuer is entitled to claim depreciation at the prescribed rates on specified tangible and
intangible assets used by the Issuer for the purposes of its business and subject to other conditions listed in the Act.
Unabsorbed depreciation, if any, for an assessment year can be carried forward & set off against income from any other source
in the subsequent assessment years as per section 32 subject to the provisions of section 72(2) and section 73(3) of the Act.
2. Minimum Alternate Tax (MAT) and Credit for the same
The Issuer would be required to pay tax on its book profits under the provisions of section 115JB in case where tax on its “total
income” (the term defined under section 2(45) of the Act) is less than 18.50%(plus applicable education cess & also a surcharge
in case book profit exceeds Rs.100 lakhs) of its “book profits” (the term defined under section 115JB of the Act). Such tax is
referred to as Minimum Alternate Tax (MAT).
The difference between the MAT paid for any assessment year commencing on or after April 1, 2006 and the tax on its total
income payable for that assessment year shall be allowed to be carried forward as “MAT credit”. The MAT credit shall be
utilised to be set off against taxes payable on the total income in the subsequent assessment years. However, it can be carried
forward only upto 10 assessment years succeeding the assessment year in which such MAT was paid.
3. Exemption from Dividends and Income from units of Specified Mutual Funds
Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section 115-O
(whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or paid by the
domestic companies in respect of which the distributing company is liable to pay dividend distribution tax. Similarly the income
received from units of a Mutual Fund specified under section 10(23D) is exempt from tax. Such income distributed by the
Mutual Fund or the Administrator of the specified undertaking would also be subject to applicable dividend distribution tax,
except when the distribution is made by an open ended “equity oriented fund”. It may be pertinent to note that section 14A of
the Act restricts claim for deduction of expenses incurred in relation to exempt income.
4. Dividend Distribution tax
Dividends declared/distributed/paid by the Issuer is subject to dividend distribution tax @ 15% (plus applicable surcharge and
education cess). As per Section 115O(1A), for the purpose of calculating dividend distribution tax, the aforesaid amount of
dividend shall be reduced by the amount received by the Issuer from its subsidiaries by way of dividend during the financial
year provided the subsidiaries have paid dividend distribution tax.
133
5. Concessional rate of tax on Dividend from Foreign subsidiaries.
Dividend received by an Indian holding company from its foreign subsidiaries will be taxed at concessional rate of Tax @ 15%
under Section 115BBD.
6. Capital Gains
(a) Under section 112 of the Act, long term capital gains are subject to tax at the rate of 20% (plus applicable surcharge
and education cess). Such long term capital gains are to be computed by deducting from the sale consideration (i)
expenditure incurred in connection with such transfer; and (ii) except in case of certain bonds and debentures the
indexed cost of acquisition of the capital asset. In computing the long term capital gains chargeable to tax, no
deduction under Chapter VI-A would be allowed under section 112 of the Act.
In case of long term capital gains arising from the transfer of unlisted securities, the maximum tax payable on long
term capital gains is restricted to 10% of the capital gains calculated without indexation of the cost of acquisition.
However, in respect of long term capital gains arising from transfer of listed securities, units or zero coupon bonds, the
maximum tax payable on long term capital gains is restricted to 10% of the capital gains calculated without indexation
of the cost of acquisition.
Further, in terms of section 10(38) of the Act, any long term capital gain arising to the Issuer on or after October 1,
2004, from the transfer of a long term capital asset being an equity share in a company or a unit of an equity oriented
fund, where such transaction is chargeable to securities transaction tax (STT), is exempt from tax in the hands of the
Issuer. However, long term capital gains earned by the Issuer shall be taken into account in computing the book profits
for the purposes of computation of MAT.
(b) In terms of section 111A of the Act any short term capital gains arising to the Issuer from the transfer of a short term
capital asset being an equity share in a company or unit of an equity oriented fund, where such transaction is
chargeable to STT, would be subject to tax only at a rate of 15% (plus applicable surcharge and education cess). In
other cases, the short term capital gains would be chargeable to tax @ 30% (plus applicable surcharge and education
cess). Further deduction under Chapter VI-A would not be allowed from such short term capital gains subject to tax
under section 111A of the Act.
(c) As per the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains
arising to the Issuer {other than those exempt under section 10(38)} shall not be chargeable to tax to the extent such
capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the
capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a period of three years from the
date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term
capital gains in the year in which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year
is Rs. 50 lakhs.
II. Tax Benefits available to the Members of the Company under the Act
I. Special Tax Benefits
There are no special tax benefits available to the members of the Company.
II. General Tax Benefits
2.1 Resident Members
a) Under section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section
64(1A) of the Act, will be exempt from tax to the extent of Rs. 0.015 lakh per minor child, whose income is so
included.
134
b) The characterization of gains / losses, arising from sale of shares, as capital gains or business income would depend on
the nature of holding in the hands of the member and various other factors.
c) Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section
115O (whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or
paid by the domestic companies in respect of which the distributing company is liable to pay dividend distribution tax.
However, it may be pertinent to note that section 14A of the Act restricts claim for deduction of expenses incurred in
relation to exempt income
d) Under section 111A of the Act, capital gains arising from transfer of short term capital assets, inter alia being an equity
share in a company, which is subject to STT will be taxable @15% (plus applicable surcharge and educational cess). In
other cases, the short term capital gains would be chargeable as part of the total income and the tax rates would depend
on the income slab. Further no deduction under Chapter VI-A would be allowed in computing such short term capital
gains subject to tax under section 111A of the Act.
e) Under section 112 of the Act, long term capital gains are subject to tax at the rate of 20% (plus applicable surcharge
and education cess). Such long term capital gains are to be computed by deducting from the sale consideration (i)
expenditure incurred in connection with such transfer; and (ii) except in case of certain bonds and debentures the
indexed cost of acquisition of the capital asset. In computing the long term capital gains chargeable to tax, no
deduction under Chapter VI-A would be allowed under section 112 of the Act.
However, in respect of long term capital gains arising from transfer of listed securities, units or zero coupon bonds, the
maximum tax payable on long term capital gains is restricted to 10% of the capital gains calculated without indexation
of the cost of acquisition.
Further, in terms of section 10(38) of the Act, any long term capital gain arising to the Issuer on or after October 1,
2004, from the transfer of a long term capital asset being an equity share in a company, where such transaction is
chargeable to securities transaction tax (STT), is exempt from tax in the hands of the Issuer. However, in case of
companies, long term capital gains earned by the Issuer shall be taken into account in computing the book profits for
the purposes of computation of MAT.
f) As per the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains
arising to the members {other than those exempt under section 10(38)} shall not be chargeable to tax to the extent such
capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the
capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a period of three years from the
date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term
capital gains in the year in which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year
is Rs. 50 lakhs.
g) Under section 54F of the Act, where in the case of an individual or HUF capital gain arise from transfer of long term
assets {other than a residential house and those exempt under section 10(38) of the Act} then such capital gain, subject
to the conditions and to the extent specified therein, will be exempt if the net sales consideration from such transfer is
utilised, for purchase of residential house property within a period of one year before or two year from the date of
transfer, or for construction of residential house property within a period of three years after the date of transfer. If only
a part of the net consideration is so reinvested, the exemption shall be proportionately reduced.
h) In terms of section 36(xv) of the Act, the STT paid by the member in respect of the transactions entered into in the
course of the business would be deductible while computing income chargeable under the head “Profits and Gains
under Business or Profession” arising from taxable securities transactions.
i) As per the provisions of section 10(23D) of the Act, all mutual funds set up by public sector banks, public financial
institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI) or authorized by the
Reserve Bank of India are eligible for exemption from income-tax, subject to the conditions specified therein, on their
entire income including income from investment in the shares of the company.
135
2.2 Non Resident Members other than Foreign Institutional Investors
a) Under section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section
64(1A) of the Act, will be exempt from tax to the extent of Rs.0.015 lakh per minor child, whose income is so
included.
b) The characterization of gains / losses, arising from sale of shares, as capital gains or business income would depend on
the nature of holding in the hands of the member and various other factors.
c) Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section
115O (whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or
paid by the domestic companies in respect of which the distributing company is liable to pay dividend distribution tax.
However, it may be pertinent to note that section 14A of the Act restricts claim for deduction of expenses incurred in
relation to exempt income.
d) Under section 111A of the Act, capital gains arising from transfer of short term capital assets, inter alia being an equity
share in a company, which is subject to STT will be taxable @15% (plus applicable surcharge and educational cess). In
other cases, the short term capital gains would be chargeable as part of the total income and the tax rates would depend
on the income slab. Further no deduction under Chapter VI-A would be allowed in computing such short term capital
gains subject to tax under section 111A of the Act.
e) Under section 112 of the Act, long term capital gains would be subject to tax at the rate of 20% (plus applicable
surcharge and education cess). Such long term capital gains are to be computed by deducting from the sale
consideration (i) expenditure incurred in connection with such transfer; and (ii) the cost of acquisition of the capital
asset from the sale consideration. However, there exists a special provision for non residents providing for adjustments
to the cost of acquisition, in respect of exchange rate fluctuations, in computing the capital gains. Further, in computing
the long term capital gains chargeable to tax, no deduction under Chapter VI-A would be allowed under section 112 of
the Act
Further, in terms of section 10(38) of the Act, any long term capital gain arising on or after October 1, 2004, from the
transfer of a long term capital asset inter alia being an equity share in a company, where such transaction is chargeable
to STT, is exempt from tax in the hands of the member. However, in the case of companies, long term capital gains so
earned shall be taken into account in computing the book profits for the purposes of computation of MAT.
f) As per the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains
arising to the members {other than those exempt under section 10(38)} shall not be chargeable to tax to the extent such
capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the
capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a period of three years from the
date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term
capital gains in the year in which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year
is Rs. 50 lakhs.
g) Under section 54F of the Act, where in the case of an individual or HUF capital gain arise from transfer of long term
assets {other than a residential house and those exempt under section 10(38) of the Act} then such capital gain, subject
to the conditions and to the extent specified therein, will be exempt if the net sales consideration from such transfer is
utilised, for purchase of residential house property within a period of one year before or two year from the date of
transfer, or for construction of residential house property within a period of three years after the date of transfer. If only
a part of the net consideration is so reinvested, the exemption shall be proportionately reduced.
h) In terms of section 36(xv) of the Act, the STT paid by the member in respect of the transactions entered into in the
course of the business would be deductible while computing income chargeable under the head “Profits and Gains
under Business or Profession” arising from taxable securities transactions.
i) As per section 90 of the Act, the provisions of the Act or the provisions of the applicable Double Tax Avoidance
Agreement, whichever is more beneficial to the taxpayer / assessee, would apply. In order to avail the benefit under
136
Double Tax Avoidance Agreement (DTAA), every person not being a resident in India has to provide a certificate of
him being a resident (i.e. Tax Residency Certificate) in any country outside India or specified territory outside India,
obtained by him from the Government of that country or specified territory.
2.3 Special optional provisions available to Non Resident Indians under the Act
a) A Non Resident Indian (NRI), i.e. an individual being a citizen of India or person of Indian origin has an option to be
governed by the special provisions contained in Chapter XII-A of the Act, i.e. “Special Provisions relating to certain
incomes of Non-Residents”.
b) Under section 115E of the Act, where the NRI has subscribed the shares of the company in convertible foreign
exchange, long term capital gains arising to the non resident on transfer of such shares {in cases not covered under
section 10(38) of the Act} be chargeable to tax at concessional flat rate of 10% (plus applicable surcharge and
educational cess). In computing the capital gains for non residents, arising from transfer of shares or debentures of an
Indian company, no indexation benefit is allowed. However, in such cases all the non residents have been provided
with a protection against foreign exchange fluctuation under the first proviso to section 48 of the Act.
c) Under provisions of section 115F of the Act, long term capital gains {not covered under section 10(38) of the Act}
arising to the NRI from the transfer of such shares shall be exempt from income tax if the net consideration is
reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so
reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax
subsequently, if the specified assets are transferred or otherwise converted into money within three years from the date
of their acquisition.
d) Under provisions of section 115G of the Act, it shall not be necessary for the NRI to furnish his return of income if his
only source of income is investment income or long term capital gains or both arising out of assets acquired, purchased
or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from.
e) Under section 115-I of the Act, the NRI may elect not to be governed by the provisions of Chapter XII-A of the Act for
any assessment year by furnishing his return of income under section 139 of the Act declaring therein that the
provisions of the Chapter shall not apply to him for that assessment year and if he does so the provisions of this
Chapter shall not apply to him. In such a case the tax on investment income and long term capital gains would be
computed as per normal provisions of the Act, in which case the above stated provisions from point (c) to (h) in Para
2.2 would be applicable.
2.4 Foreign Institutional Investors (FIIs)
a) Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section
115-O (whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or
paid by the domestic companies in respect of which the distributing company is liable to pay dividend distribution tax.
b) The characterization of gains / losses arising from sale of shares as capital gains or business income would generally
depend on the nature of holding in the hands of the member and various other factors.
c) Under section 111A of the Act, capital gains arising from transfer of short term capital assets, inter alia being an equity
share in a company, which is subject to STT will be taxable @15% (plus applicable surcharge and educational cess). In
other cases, the short term capital gains would be chargeable to tax @30% (plus applicable surcharge and education
cess).
d) Under section 10(38) of the Act, any long term capital gain arising on or after October 1, 2004, from the transfer of a
long term capital asset inter alia being an equity share in a company, where such transaction is chargeable to STT, is
exempt from tax in the hands of the member. However, in the case of companies, long term capital gains so earned
may be taken into account in computing the book profits for the purposes of computation of MAT.
e) Section 115AD provides special provisions for taxability of various types of income of FIIs. Under section 115AD
long term capital gains arising from transfer of shares in a company {other than those mentioned in point (d) above},
are taxed at the rate of 10% (plus applicable surcharge and education cess). Such capital gains would be computed
without giving effect to the first and second proviso to section 48 of the Act. In other words, the benefit of indexation
137
or the adjustment in respect of foreign exchange fluctuation, as mentioned under the two proviso would not be allowed
while computing the capital gains. Under Section 196D of the Act, no deduction shall be made from any income by
way of capital gains, in respect of transfer of shares referred to in Section 115AD.
f) As per the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains
arising to the investors / members {other than those exempt under section 10(38)} shall not be chargeable to tax to the
extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part
of the capital gain is so reinvested, the exemption shall be proportionately reduced.
However, if the assessee transfers or converts the notified bonds into money within a period of three years from the
date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term
capital gains in the year in which such bonds are transferred or otherwise converted into money. The maximum
investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year
is Rs. 50 lakhs.
g) As per section 90 of the Act, the provisions of the Act or the provisions of the applicable Double Tax Avoidance
Agreement, whichever is more beneficial to the taxpayer / assessee, would apply. In order to avail the benefit under
Double Tax Avoidance Agreement (DTAA), every person not being a resident in India has to provide a certificate of
him being a resident (i.e. Tax Residency Certificate) in any country outside India or specified territory outside India,
obtained by him from the Government of that country or specified territory.
III. Tax Benefits under the Wealth Tax Act, 1957
Shares in a company held by a member will not be treated as an asset within the meaning of section 2(ea) of Wealth-tax Act,
1957. Hence, wealth tax is not leviable on shares held in a company.
IV. The Gift Tax Act, 1958
Since the provisions of The Gift Tax Act, 1958 have ceased to apply with effect from October 1, 1998 , gift of shares made on
or after October 1, 1998 will not be liable to Gift Tax under the Gift Tax Act, 1958. However, pursuant to the Finance Act,
2009, Section 56 of the Act has been amended to provide that the value of any property, including shares and securities ,
received without consideration or for inadequate consideration (from persons or in situations other than those exempted under
section 56 (vii) of the Act ) will be included in the computation of total income of the recipient and be subject to tax.
V. Direct Tax Code
The above statement does not provide the tax benefits under the Direct Tax Code. The year of implementation of the Direct Tax
Code is not certain at present. The tax benefits under the said code are not furnished as the same is under formative stage.
138
SECTION IV: ABOUT THE COMPANY
INDUSTRY OVERVIEW
We have relied on websites and publicly available documents from various sources. The data may have been re-classified by us for the
purpose of presentation. Neither we nor any other person connected with the Offer has independently verified the information provided
in this chapter. Industry sources and publications, referred to in this section, generally state that the information contained therein has
been obtained from sources generally believed to be reliable but their accuracy, completeness and underlying assumptions are not
guaranteed and their reliability cannot be assured, and, accordingly, investment decisions should not be based on such information.
Overview of the Indian Economy
India is one of the fastest growing economies in the world with a rapidly expanding entertainment and media (“E&M”) industry.
According to the Ministry of Statistics and Programme Implementation’s (MOSPI) revised estimates, India’s GDP at factor cost (at
constant 2004-2005 prices) registered a lower growth of 4.96% during Financial Year 2013, as compared with 6.21% in Financial Year,
largely attributable to dismal performance of agriculture sector 1.79% during Financial Year 2013 as compared to 3.65% in Financial
Year 2012 and service sector 6.59% in Financial Year 2013 as compared to 8.20% in Financial Year 2012. However of the larger
countries of the world only China and Indonesia has grown faster than India in Financial Year 2013. (Source http://indiabudget.nic.in
“Budget Speech of FM for Financial Year 13-14”).
The following table illustrates India's real GDP growth between financial years 2009 and 2013 (at factor cost at constant 2004-05 prices):
Financial Year 2009 Financial Year 2010 Financial Year 2011 Financial Year 2012 Financial Year 2013
6.7% 8.6% 9.3% 6.2% 5.0%
Source: http://mospi.nic.in “Summary of macroeconomic aggregates at constant (2004-05) prices, 1950-51 to 2012-13”
Overview of the Indian Entertainment and Media Industry
The Indian E&M industry (primarily comprised, among others, of film, television, print media, animation and visual effects VFX, radio
and music) has witnessed steady growth in recent years and is estimated to have reached `72,80,000 lakhs in 2011. The Indian E&M
industry is projected to grow at a compound annual growth rate (“CAGR”) of 14.90% from the year 2011 to the year 2016 to reach
`1,45,70,000 lakhs. The Indian E&M industry has grown at a CAGR of 9.09% between 2007 and 2011. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The following factors are expected to contribute to further growth of the Indian E&M industry:
the continued growth and development of the Indian economy;
favourable demographic characteristics and trends in India;
the cultural diversity of the Indian population;
the internationalisation of the Indian E&M industry;
the availability of popular content; and
digitisation of content.
The following table provides the expected sizes and growth rates of the various segments of the Indian E&M industry for the years 2011
through 2016:
(` lakhs)
E&M Industry
Segment 2011 2012P 2013P 2014P 2015P 2016P
CAGR (2011
to 2016)
T.V.
32,90,000
38,00,000
43,50,000
51,40,000
61,80,000
73,50,000 17.00%
20,88,000
22,60,000
24,68,000
27,00,000
29,49,000
32,34,000 9.00%
Film
9,29,000
10,00,000
10,97,000
12,11,000
13,45,000
15,03,000 10.00%
Radio
1,15,000
1,30,000
1,60,000
2,00,000
2,40,000
2,95,000 21.00%
139
(` lakhs)
E&M Industry
Segment 2011 2012P 2013P 2014P 2015P 2016P
CAGR (2011
to 2016)
Music
90,000
1,00,000
1,13,000
1,31,000
1,54,000
1,82,000 15.00%
O.O.H.
1,78,000
1,95,000
2,15,000
2,36,000
2,60,000
2,90,000 10.00%
Animation
3,10,000
3,63,000
4,30,000
5,11,000
6,10,000
6,90,000 17.00%
Gaming
1,30,000
1,80,000
2,30,000
2,90,000
3,70,000
4,60,000 29.00%
Digital
Advertising
1,54,000
1,99,000
2,58,000
3,35,000
4,37,000
5,70,000 30.00%
Total
72,84,000
82,27,000
93,21,000
1,07,54,000
1,25,45,000
1,45,74,000 14.90% *P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Favourable Demographic Characteristics and Trends in India
The growth of the Indian economy has led to increased income levels and has resulted in the availability of greater amounts of disposable
income. It is estimated that the number of households with an income of less than ` 0.90 lakhs per year will decrease from approximately
1,011 lakhs households in 2005 to 499 lakhs households in 2025. (Source: Federation of Indian Chambers of Commerce and Industry and
KPMG, “Indian Media & Entertainment Industry Report 2009”)
The following chart illustrates certain expected changes in the distribution of income groups in India:
E=Estimated
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2009”)
Approximately 70.0% of India’s population was below 35 years of age in 2001. More than 50.0% percent of India’s population is
expected to be under the age of 30 in 2015. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &
Entertainment Industry Report 2009”)
The following chart illustrates the population distribution in India across various age groups:
140
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2009”)
Cultural Diversity of the Indian Population
India is a country with significant geographic, linguistic and cultural diversity. Although catering to India’s diversity is challenging for
the E&M industry, such diversity broadens the scope of services offered and reduces the concentration of business risk. Regional content
has emerged as one of the most significant aspects of content customisation and has become a significant growth driver for the E&M
industry in India.
The following charts illustrate the linguistic composition of the Indian film market, by shares of the number of films released:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Certain E&M trends with regard to diversity include the growth in popularity of regional channels and the expansion of regional channel
portfolios by regional and national media companies. Content preferences have shifted more towards socially relevant and localised /
regionalised programs, such as Phulwa (Chambal forest in MP), Diya Aur Baati Hum (Pushkar, Rajasthan), Agle Janam (Uttar Pradesh
and Bihar), Pavitra Rishta (Maharashtra), Balika Vadhu (Rajasthan) and Laado (Haryana). Large broadcasters have looked at increasing
their presence in regional market by new channel launch and M&A activity for example, launch of Discovery Tamil, ETV’s takeover by
Network 18 etc. Dainik Bhaskar entered Marathi by launching editions in Aurangabad, Nasik, Jalgaon and Ahmednagar and
strengthened its position on Rajasthan and Jharkhand by launching more editions. (Source: Federation of Indian Chambers of Commerce and
Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
141
Internationalisation of the Indian E&M Industry
Indian E&M companies have begun targeting international markets. International demand for Indian content has grown and a number of
Indian television channels are currently broadcast across the world. For example, NDTV has launched NDTV Arabia and NDTV
Malaysia. Regional language channels such as Asianet have also been broadcasting overseas. “Colors” was recently launched in the
United States and the UK as “Aapka Colors”. Content produced in India is targeted largely at the Indian diaspora in key markets,
primarily the United States, the UK, United Arab Emirates and South Africa. (Source: Federation of Indian Chambers of Commerce and
Industry and KPMG, “Indian Media & Entertainment Industry Report 2009” & “Indian Media & Entertainment Industry Report 2010”)
Further, in recent years, some large budget and popular Hindi films have generated a significant share of their box office earnings
overseas. Overseas theatrical revenues alone have accounted for approximately 7.4% of Indian film industry revenues in CY 2011, which
is complemented by overseas home viewing revenue streams such as DVD and satellite broadcasts. Due to the presence of a significant
non-resident Indian population in countries around the world, E&M companies expect to increase their revenues from such international
markets and are now attempting to target non-resident Indians with their productions. (Source: Federation of Indian Chambers of Commerce
and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The Availability of Popular Content
Over the years, the availability and variety of Indian film content has increased. Five films have breached the level of `10,000 lakhs in
2011, more than double the count of films as compared to last year. Further, it was not just the A-list star cast films that did well, niche /
focussed content from independent film-makers also gained widespread acceptance. “Ragini MMS”, “Murder 2” and “Tanu weds Manu”
performed well at the box office in 2011. Themes that were women oriented such as “No One Killed Jessica” and “The Dirty Picture”,
horror based “Haunted”, urbane life based “Zindagi Na Milegi Dobara”, “Delhi Belly” and romance based “Ladies v/s Ricky Bahl” were
all box-office hits. The Indian film industry has also witnessed the increasing use of special effects and film viewing technologies. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Digitisation of Content
Digitisation is changing the Indian E&M industry. The introduction of the Conditional Access System has led to the increasing
popularity of digital cable. Further, the advent of direct-to-home service providers such as Dish TV, Tata Sky, Sun, Big TV and Airtel
Digital TV and the commercial launch of Internet protocol television has increased the digitisation of E&M content. Digitisation has
reached every aspect of the film-making process in India, from production and post-production to distribution and projection. Further,
recently, the Central Government has made digitization of cable television mandatory by October 31, 2012, in Mumbai, Delhi, Chennai
and Kolkata.
Segments of the Indian E&M industry
The Indian E&M industry is primarily comprised, among others, of film, television, and animation and VFX segments.
Film
The film segment is one of the largest segments of the E&M industry and is primarily comprised of films distributed through theatrical
exhibition, home video, C&S television. The film segment has grown by 11.50% from `833,000.00 lakhs in 2010 to `929,000.00 lakhs
in 2011. In 2012, the film segment contributed approximately 12.80% of India’s total E&M industry revenue. The Indian film industry is
projected to grow at a CAGR of 10.10% from 2011 to 2016 to reach approximately `1,503,000 lakhs in 2016. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
142
Recent Trends in the Indian Film Industry
In the recent past, the following trends have emerged in the Indian film industry:
Changing trend in film production & distribution
Film budgets have increased sharply over the years.
Movies with familiar starcast and strong recall are believed to perform better on box office. 2012 has seen sequels like Dabangg 2, Race
2, Housefull -2, Jism 2, Murder 3, Raaz 3, Kya super cool hai hum. Sequels have historically made more money than the original film at
the box office. Dhoom 2 did business of INR 15,000 lakhs compared to INR 7,000 lakhs for Dhoom.
Movies are also releasing on a wider scale. The number of domestic and international screens for big budget films has more than doubled
in the last year. Medium budget films have also observed a steady growth in domestic screens. The average print size for top 3 films has
increased from 1080 in CY 2008 to 3000 in CY 2011.
Demand for quality infrastructure in increasing rapidly. Integrated and well-equipped studios such as Reliance and Yash Raj are
providing quality infrastructure to film makers. On a daily basis, there is a demand-supply gap of 100 studio floors in Mumbai alone
which is home for bollywood and Hindi GECs. There is a clear potential for absorbing additional floor space. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Pan-India Release of Films
In recent years, there has been a growing trend among Indian producers and distributors to release the films across larger networks via
analogue or digital media. Pan-India releases enable producers to take advantage of the publicity and attention which the film receives at
the time of release. Further, it also helps to curb down the incidence of piracy.
Exploitation of the Overseas Market by the Indian Film Industry
The growing popularity of Indian film content overseas has opened new avenues for the Indian film industry. While the US region, UK
and Middle East continue to account for the bulk of overseas revenues; markets in South Korea, Western Europe, Taiwan and Africa are
gearing up for Hindi films. Studios continue to seed new markets for Indian films. For example, Vijay’s Tamil film was screened in
Denmark and ‘Kites’ was screened in Latin America. In 2011, ‘Ra-One’ and ‘Bodyguard’ were released with over 900 prints in the
overseas market. The industry believes that it is a question of influencing consumption patterns and cultivating relationships with the
local partners. The contribution of overseas revenue in the total film’s revenue can go up from its current levels of 10-15 percent to
upwards of 40 percent. While most benefits from these markets would accrue to the big budget films, there trickledown effect to quality
content in medium and low budget films is expected. Along with identification of new markets, Industry believes that growth would also
be driven by enhanced overseas marketing campaign and increased penetration in existing areas. As a result of these and other factors,
overseas theatrical revenues are expected to increase from approximately `69,000.00 lakhs in 2011 to approximately `1,15,000.00 lakhs
in 2016 and are expected to constitute approximately 10.50% of Indian films’ total revenues in 2016. (Source: Federation of Indian
Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Growing Popularity of Hollywood and other Western Films Among the Indian Population
Along with changing lifestyles, the film preference of the Indian population is shifting towards Hollywood and other Western films. The
success of Hollywood films in India can be attributed to a number of factors such as an ever rising English speaking population, the
growth of multiplexes, increased international exposure through internet, television and tourism, Hindi and local language dubbing and
simultaneous global releases. Given the rising importance of the Indian market for Hollywood producers, a large number of films are
being released in India prior to the US release to play on the prestige factor of watching films before the rest of the world. In 2011, ten
Hollywood films were released in India prior to their release in their home market. (Source: Federation of Indian Chambers of Commerce and
Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Revenue Streams of the Indian Film Industry
Domestic theatrical exhibition is the largest contributor of revenue for the Indian film industry. The second largest contributor is overseas
theatrical. However, contributions from cable and satellite rights are growing at a faster pace and are likely to emerge as the second
largest contributor in the near future.
143
The following chart illustrates the components of the Indian film industry revenue streams for the years 2007 through 2016:
P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
Domestic Theatrical
In 2011, theatrical revenue (including overseas collections) constituted approximately 81.5% of total Indian film industry revenue. The
revenue from domestic theatrical exhibition has increased from `620,000.00 lakhs in 2010 to `688,000.00 lakhs in 2011, increase of
10.97%. This segment is expected to grow to `1,080,000.00 lakhs in 2016. (Source: Federation of Indian Chambers of Commerce and Industry
and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The growth in domestic theatrical exhibition revenue is demonstrated by the following tables which provide the net box office revenues
for the top 10 grossing films in India in CY 2011 and 2012:
Top 10 Films – Domestic Box Office Revenue (Calendar Year 2011)* Top 10 Films – Domestic Box Office Revenue (Calendar Year 2012)*
Rank Film Net Revenue (` in
lakhs)
Rank Film Net Revenue (in
lakhs)
1 Bodyguard 14,095.00 1 Ek Tha Tiger 18,654.64
2 Ready 12,086.00 2 Dabangg 2 13,681.00
3 Ra.One 11,475.00 3 Rowdy Rathore 13,166.00
4 Singham 9,776.00 4 Agneepath 11,996.00
5 Zindagi Na Milegi Dobara 8,988.00 5 Housefull 2 11,267.00
6 The Dirty Picture (Hindi) 7,518.00 6 Barfi ! 10,555.46
7 Don 2 7,091.00 7 Jab Tak Hai Jaan 10,151.32
8 Rockstar 6,762.00 8 Bol Bachchan 9,991.78
9 Mere Brother Ki Dulhan 5,781.00 9 Talaash 9,025.92
10 Delhi Belly 5,521.00 10 Son Of Sardaar 8,834.00
Total: 89,093.00 Total: 117,323.12
(Source: www.boxofficeindia.co.in) *Top 10 films calculated on the basis of net collections received during the year indicated, regardless of release date.
144
The following table provides details of the size and growth of the Indian film industry for the years 2009 through 2016:
(` in lakhs)
2009 2010 2011 2012P 2013P 2014P 2015P 2016P CAGR 2011-
2016
Total industry size 893,000 833,000 929,000 1,000,000 1,097,000 1,211,000 1,345,000 1,503,000
Growth (%) -6.72% 11.52% 7.64% 9.70% 10.39% 11.07% 11.75% 10.10%
Domestic theatrical 685,000 620,000 688,000 735,000 802,000 880,000 972,000 1,080,000
Growth (%) -9.49% 10.97% 6.83% 9.12% 9.73% 10.45% 11.11% 9.40%
*P=Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
A recent change in the domestic theatrical exhibition segment is the emergence and growth of multiplexes. Multiplex contribution has
increased to approximately 25.00% of the total domestic theatrical revenues for the overall Indian film industry in 2009 and as much as
60.00% for Hindi films. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry
Report 2010”)
Further, many single-screen and stand-alone cinema theatres are being converted into multi-screen cinema theatres and multiplexes. A
number of single screen and stand-alone cinema theatres have been acquired on lease for refurbishment or renovation or conversion to
multiplexes. Such refurbishment or renovation and conversion to a multiplex has resulted in higher occupancy rates and consequently,
higher box office collections.
In addition to the increase in admits in Indian multiplexes, the ATPs and food and beverage spending per admit in India are likely to
increase in line with the trends prevailing in the developed markets, which will be beneficial to Indian multiplexes.
The growth of multiplexes in India is being driven by a variety of factors. We believe that cinema theatre patrons often prefer
multiplexes over single-screen cinema theatres as multiplexes function as comprehensive entertainment platforms with cinema theatres,
gaming parlours and food courts, thus catering to a wider range of leisure time requirements. Further, we believe that the growing
popularity of Hollywood films among Indian viewers is also driving the growth of multiplexes in India as cinema theaters patrons
typically prefer to watch Hollywood films in multiplexes or refurbished cinema theatres. Film producers often prefer large multiplex
chains as channel partners as multiplex chains enable them to release a film on a pan-India basis. Multiplexes are also instrumental in
developing a separate class of audiences in large Indian cities for niche and off-beat films.
Another important trend in the theatrical segment in India is the emergence of digital technology as a preferred medium for the exhibition
of films over analogue technology. The rising number of cinema theatres and multiplexes in India equipped with digital projection
technology provides the film industry with a larger number of release centres for the distribution of their films. While prior to the
increased penetration of digital projection technology, a film was typically released in approximately 250 centres, films are now typically
released in 700 to 800 centres due to lower costs and improved logistics. The number of screens equipped with digital projection
technology is expected to increase significantly as producers and distributors utilise more screens equipped with digital projection
technology to ensure a wider release of their films, reduce print costs and combat piracy. Digital projection technology also provides
theatrical exhibitors with the opportunity to receive additional revenues through alternative content offerings such as sporting events and
award shows. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report
2010”)
In India, multiplex penetration (admits as a percentage of population) is quite low compared to the penetration in more developed
countries as shown in the following table. However, multiplex penetration and SPH are expected to grow in line with overseas trends and
the gap is expected to decrease as the propensity to spend increases across the Indian populace as a result of increasing disposable
incomes.
145
30
43 45 4652 53
61
77
117
12
0
20
40
60
80
100
120
140
UK
Belg
ium
Germ
an
y
Sp
ain
Ita
ly
Irela
nd
Den
ma
rk
Fra
nce
US
Ind
ia
(Source: KPMG and CII, “Indian entertainment industry Focus 2010: Dreams to reality”)
Overseas Theatrical
The demand for Indian films among the Indian population in the United States, UK and the Far East region is growing. This is
demonstrated by the contribution of overseas theatrical revenues in the total revenue of the Indian film industry. The revenue from
overseas theatrical exhibition is expected to grow from `69,000.00 lakhs in 2011 to `115,000.00 lakhs in 2016. (Source: Federation of
Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The growing popularity of Indian films in overseas market has opened new opportunities for Indian exhibitors. Typically, cinema chains
in the United States show very few foreign films, including Indian films. This has created an opportunity for Indian exhibitors to
establish cinema theatres in the United States for exhibiting Indian films to the local Indian population. In addition, Indian film
distributors may access a unique distribution opportunity in exhibiting their films through Indian cinema chains instead of United States
cinema chains, as United States cinema chains often exhibit Indian films in smaller cinema theatres, which causes poor customer
experience that results in lower box office collections. Further, smaller cinema theatres in the United States that exhibit Indian films
typically deal with Indian film distributors by giving a minimum guarantee and a percentage share of the overflow, which results in
substantial under-reporting of revenues.
Television
Television has played a dominant role in the Indian E&M industry, with a size of `3,290,000.00 lakhs and believed to be approximately
1,460 lakhs television households in 2011. Household penetration of cable and satellite television has increased to approximately 80.0%
in the year. The number of television channels in India has increased from 120 in 2003 to more than 623 in 2011. While general
entertainment channels (“GECs”) in Hindi and regional languages still garner a greater share of TV viewership, channels which cater to
niche audiences are also popular. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment
Industry Report 2012”)
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The following chart illustrates the growth in number of cable and satellite (“C&S”) households in India in 2010 to 2016:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”).
The following charts illustrate the programming composition of India’s GECs in 2004 and 2008:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2009”)
Fictional television programmes remained the dominant genre in the Indian television industry, with films ranking as the second most
popular programme type. These fictional offerings have retained their prominence despite the growing popularity of “reality TV”
content. In 2008 and 2009, serialised “soaps” occupied the most programming time and received the most viewership. However, viewer
preferences have shifted from the popular ‘saas bahu’ programmes in favour of socially relevant and localised or regionalised content.
The number of big format programmes has also increased substantially over the last five years. (Source: Federation of Indian Chambers of
Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2010”)
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The following chart illustrates the size of the Indian television industry for the years 2006 through 2016:
P = Projected
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
The strength of the Indian economy and the increasing popularity of new distribution platforms such as digital distribution are expected
to propel the growth of the Indian television industry.
Animation and VFX
India’s animation and VFX industry was approximately `310,000.00 lakhs in 2011 and is expected to grow at a CAGR of 17.0 % to
reach approximately `690,000.00 lakhs in 2016. The Indian animation and VFX industry is driven by the increased consumption of
animated content, creation of global intellectual property formats, acceptance of 3D graphics and the spread of the industry to
international markets. The use of VFX in live-action films has grown significantly in recent years. Many live action films in India now
include special effects sequences and the duration of these sequences is estimated to have grown by nearly 40.0% percent over 2008. The
growing demand and capability of Indian studios to produce high quality VFX content has helped Indian studios establish their presence
in overseas markets. Overseas presence enables Indian studios to create integrated production systems and generate robust pipelines of
projects through their global networks. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &
Entertainment Industry Report 2012”)
The following table illustrates the size of the animation and VFX industry in India for the years 2008 through 2011:
Segment (INR Lakhs) 2008 2009 2010 2011
CAGR (2008-
11)
Animation Services 48000 55200 62100 71000 14%
Animation Production 36000 36700 38600 42000 5%
VFX 23000 31500 44700 62000 39%
Post Production 68000 77600 90800 135000 26%
Total 175000 201000 236200 310000 21%
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report
2012”)
The VFX industry in India is in an early stage of development and has the potential to grow into a significantly larger industry. The use
of VFX has been an integral part of many Hollywood films, with 8 out of the 10 top grossing Hollywood films in 2011 featuring
significant VFX sequences. The Indian film industry is increasingly producing storylines and films oriented around the use of VFX. With
due increases in the capabilities of Indian VFX studios and competitive pricing, VFX is expected to become one of the top outsourcing
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sectors in India. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report
2012”)
Unlike in India, the VFX industry in overseas markets has matured. However, the Indian VFX industry is undergoing a series of changes
in order to provide better quality service to viewers such as offering services on alternative platforms such as television, Internet and
mobile applications and offering high-definition content, image up-scaling, conversion from 2D to 3D and CGI.
The following table provides the estimated cost of production of 30 minutes of animated content in India, Korea/Philippines and North
America:
(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)
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BUSINESS
The information in this section is qualified in its entirety by, and should be read together with, the more detailed financial and other
information included in this Letter of Offer, including the information contained in the sections “Industry Overview”, “Risk Factors”,
“Our Business” and “Management’s Discussion and Analysis on Results of Operations and Financial Conditions” on pages 138, 11,
149 and 234, respectively. In this section, descriptions of contracts and agreements are not, nor do they purport to be, complete
summaries of all terms or terms customarily found in such contracts and agreements.
Overview
We are one of India’s leading entertainment and media (“E&M”) companies with a presence across several businesses such as theatrical
exhibition of films, film and media services and television content production and distribution. Our headquarters are located in Mumbai
and we have operations across 78 cities and towns in India and internationally, in, the UK and the United States.
Our theatrical exhibition business is our largest source of revenue. We operate one of India’s largest cinema chains, under the brand ‘BIG
Cinemas’, with 254 screens in India (including 16 screens which are only managed by our Company) and an additional 185 screens in
the United States (including 116 screens which are only managed by our Company) as of May 31, 2013. During Fiscal 2012, BIG
Cinemas (excluding customers of screens which are only managed by our Company) catered to approximately 502 lakhs and 74 lakhs
consumers in India and overseas, respectively and approximately 144 lakhs consumers in India for the six months ended March 31, 2013
March 31, 2013 and 15 lakhs consumers overseas for the six months ended March 31, 2013.
Our film and media services business comprising production services, post-production services and media and creative services for films
and television is our second largest source of revenue, which comprises:
Production services: We lease sound stages, shooting floors, standard and high definition multi-camera equipment and other
related equipment to television and film production companies.
Post-production services: We process and trade film negatives at our laboratory located in Film City, Mumbai. Our 4K DI
laboratory located in Film City, Mumbai undertakes quality enhancement of film and television content through digital
techniques.
Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to 3D and CGI services
through our wholly owned subsidiary, Reliance MediaWorks Entertainment Services Limited. In addition, our wholly owned
subsidiaries located in United States and UK, Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK)
Limited, respectively, are engaged in the business of digital image correction, film restoration and film processing.
We operate our film post production services through our production laboratory in Mumbai and our creative services through facilities in
Burbank (United States), London (UK) and Navi Mumbai (India). Films processed at our laboratory in Mumbai have won, among others,
15 national awards for cinematography and our Company’s film processing facilities have been certified by Kodak Imagecare, an
internationally recognised quality certification program, for each of the years beginning 2007. We were among four companies to receive
the “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in 2010. In August 2011, our
Company received a patent for an innovation – “System and method for removing semi-transparent artifacts from digital images caused
by contaminants in the camera’s optical path”. We won the Scientific and Technical Award, 2012 at the Academy of Motion Picture,
Arts and Sciences in 2012, for the development of a unique and efficient system for the reduction of noise and other artefacts, thereby
providing high quality images required by the film making process.
As a part of our long term growth strategy of asset creation, during the previous five years, we have established:
a business process outsourcing (BPO) facility at Navi Mumbai;
post-production facilities for television commercials and broadcast; and
a DI Lab.
Further, we have purchased broadcast and film cameras. We have also increased the number of screens we operate. This has been
achieved organically and has enhanced our reach in terms of exhibition business and also enabled us to strengthen our capabilities
in post-production services and creative services divisions.
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We are also in the process of establishing approximately 2,00,000 square feet studio located in Film City, Mumbai with facilities for
shooting films, television shows and television commercials, which we believe meets international standards. This studio aims to
provide a one-stop solution for all production needs for domestic and international clients. When completed, the studio is expected
to have three studio buildings with eight sound stages with appropriate noise control and other features. A part of the studio
constituting one studio building with three sound stages is in operation since January 2011. We expect to complete the remaining
portion of the studio by December 2013.
We are also engaged in the business of television content production through our subsidiary, Big Synergy Media Limited, under the
brand “BIG Synergy”, which primarily produces non-fiction programmes in addition to adapting international programme formats
for Indian viewers. We have produced shows such as Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum,
India’s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.
For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, as per our audited restated financial statements, our restated
consolidated net loss after tax was ` 34,044.77 lakhs, ` 91,016.62 lakhs and ` 32,796.95 lakhs, respectively and our standalone net
loss after tax was ` 27,593.15 lakhs, ` 70,356.34 lakhs and ` 24,348.00 lakhs, respectively. For the six months ended March 31,
2013, Fiscal 2012 and Fiscal 2011, our consolidated total income was ` 36,637.80 lakhs, ` 125,486.90 lakhs and ` 85,026.20 lakhs,
respectively and our standalone total income was ` 24,026.10 lakhs, ` 80,454.80 lakhs and ` 54,287.40 lakhs respectively, as per
our audited restated financial statements..
Our Competitive Strengths
We believe the following are our key competitive strengths:
Strong reputation and brand in the E&M sector
We believe that we have established a strong reputation and brand in the E&M sector. We have rebranded our theatrical exhibition and
our television content production businesses as “BIG Cinemas” and “BIG Synergy”, respectively. This rebranding was undertaken in
order to create a single E&M brand, “BIG”.
We have received various awards for our theatrical exhibition business, including “Multiplex of the Year” for the year 2012 at Star Retail
Awards, “Best Cinema Chain” for the year 2012 ZEE ETC Business Awards, “Most Admired Innovative Concept of the Year” at the
Images Retail Awards 2010 for our Ciné Diner theatre exhibition concept, “Most Admired Retailer of the Year: Entertainment” award at
the India Retail Awards in 2009, the “Exhibitor of the Year” award at the CineAsia 2008 awards and the “Retailer of the Year” in the
‘Entertainment & Fun’ category at the India Retail Summit in 2007. The Silent National Anthem campaign launched by Big Cinemas has
secured a silver lion in the PR Lions category and two bronze lions for Best Use of Broadcast in a Promotional Campaign and Corporate
Image & Information, Films categories in 2011.
BIG Synergy, under which we produce television content, has produced television shows such as Kaun Banega Crorepati, Kya Aap
Paanchvi Paas Se Tez Hain, Dus Ka Dum, India’s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. Many of
these shows have received high viewer ratings and received awards in various categories.
Our Academy Award winner wholly owned subsidiary Lowry Digital, we believe is one of the leading digital image correction and
restoration facilities in the world. Lowry Digital’s clients include industry leaders such as Walt Disney Pictures and Television and
Warner Bros. Entertainment Inc. Lowry Digital’s facility has provided image enhancement and restoration services to approximately 621
films as of May 31, 2013 and has worked on classics such as Casablanca, Singin’ in the Rain, Sunset Boulevard and a number of Walt
Disney Pictures & Television classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie
the Pooh, Beauty and the Beast and 101 Dalmatians.
We invested 30% in capital of Galloping Horse America LLC. Consequently, Galloping Horse America LLC has been renamed
Galloping Horse-Reliance LLC. Galloping Horse-Reliance LLC has acquired certain assets of Digital Domain Media Group Inc
(DDMG), an Academy Award-winning digital production studio in Hollywood. We believe that this association strengthens our position
substantially as a major service provider for Hollywood studios as also demonstrates our quality and efficient workflow processes as well
as strong brand repute.
We believe that our longstanding presence in the film processing business has made us one of the important operators in the Hindi film
category in addition to being a key operator in certain regional language films. Films processed at our laboratory located in Mumbai have
won, among others, 15 national awards for cinematography and our film processing facilities have been certified by Kodak Imagecare,
an internationally recognised quality certification program, for each of the years beginning 2007.
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We believe we have established a strong reputation and brand through the quality of our products and services which have obtained
industry recognition and customer satisfaction. We believe that our strong reputation and brand differentiates us from our competitors.
Demonstrated ability to expand our operations both organically and inorganically
We have created a global E&M company that is capable of operating across the entire E&M business value chain. Since the Reliance
Group acquired control of our Company in the financial year 2006, we have grown and diversified our business. Our revenues have
grown from `36,296.74 lakhs in Fiscal 2008 to `1,25,486.90 lakhs in Fiscal 2012 and `36,637.80 lakhs for the six months ended March
31, 2013 on a consolidated basis and have grown from `32,280.01 lakhs in Fiscal 2008 to `80,454.80 lakhs in Fiscal 2012 and
`24,026.10 lakhs for the six months ended March 31, 2013 on a stand alone basis. Currently, we have diversified service offering across
several businesses, such as theatrical exhibition of films, film and media services and television and content production and distribution.
Our theatrical exhibition business has expanded from 32 screens across five cities as of March 31, 2006 to 439 screens across more than
99 towns and cities in India and the United States as of May 31, 2013. Of the 439 screens 355 screens are equipped with digital
projectors. The number of customers our Big Cinemas brand (excluding customers of screens which are only managed by our Company)
catered to in India increased from 126 lakhs in Fiscal 2008 to 576 lakhs across India and overseas in Fiscal 2012. Big Cinemas
(excluding customers of screens which are only managed by our Company) had approximately 144 lakhs customers in India for the six
months ended March 31, 2013 and 15 lakhs customers overseas for the six months ended March 31, 2013.
We have also demonstrated our ability to acquire companies located in India and overseas in order to consolidate our position as a
company that is capable of operating across the entire E&M business value chain. For example, we acquired Rave Entertainment Private
Limited (“Rave”), Synergy Communications Private Limited (now, Big Synergy Media Limited), iLab and Lowry Digital between the
financial years 2007 and 2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-Reliance LLC,
an associate entity, in financial year 2012. The acquisition of Rave helped us in establishing our footprint in the North Indian cinema
territories, while Synergy Communications Private Limited has facilitated our entry into the business of television content production
and Lowry, “Digital Domain” and iLab have helped us establish significant presence in the North American and European markets,
offering us new business opportunities in image processing and restoration, 2D to 3D conversion and VFX.
Presence across various E&M businesses and geographies
We believe we are a one-stop solution provider for film and television producers and distributors in India. We provide the entire range of
film services, including studio rental, equipment rental, DI post-production laboratory services, VFX, stereoscopic conversion, film
processing, digital cinema mastering and operating cinema theatres in India and US. Our presence across various businesses in the E&M
sector allows allow us to develop long-term relationships as we are able to cross-sell our various services and offer solutions for the
varying requirements of our customers.
Our strategy is to create a single global E&M company that is capable of operating in geographically diverse markets and catering to a
variety of consumers. We have expanded our operations by acquiring theatrical exhibition assets in US. We have also established a
presence in the film post-production services business in the United States and the UK through the acquisition of Lowry Digital and
iLab, respectively. We believe that our multinational presence makes us an attractive proposition for our customers.
Our technological capabilities
We have attempted to develop or acquire the latest technological capabilities across our business lines to ensure that we remain
competitive. In our film and media services business, we utilise various sophisticated technologies, including digital camera technology
capable of recording high-definition video, sync-sound enabled studio stages and fibre optic cables for the distribution of films.
We utilise proprietary image processing technology to deliver superior picture elements and have developed a unique technology, the
“Lowry Process”, which is used to create high image quality for all outputs, including film, broadcast television, advertisements, digital
cinema, Blu-Ray Disc and internet video. Lowry Digital’s services include film restoration, emergency image repair, digital blow-ups
and DI enhancements. Lowry Digital also offers image enhancement tools which are used for the restoration and upgrade of damaged
analogue film prints. We were among four companies to receive “Judges Award for Creativity & Innovation” in post-production at the
Hollywood Post Alliance Awards in November 2010. In August 2011, our Company received a patent for the following innovation –
“System and method for removing semi-transparent artifacts from digital images caused by contaminants in the camera’s optical path”.
Our Company was the first Indian company to be recognized in the category of science and technology for the development of a unique
and efficient system for the reduction of noise and other artefacts which provide a high quality image required for the film making
process at the Academy of Motion Pictures, Arts & Science Awards 2012.
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Our film processing laboratory, through its telecine scanners, enables us to capture the fine details of a filmed image. We are capable of
grading the film in an uncompressed 4K resolution, the highest available resolution for film production.
We introduced the IMAX digital projection system in India in 2001, which has enabled us to take advantage of the increasing number of
IMAX and IMAX 3D releases.
The Reliance Group’s brand, experience and position in India and overseas
The Reliance Group is a diversified business group with a strong brand, level of experience and position in India and overseas. The
Reliance Group is headed by Anil D. Ambani, one of India’s leading entrepreneurs, who has won several awards and was voted as the
“Person of Year – 2008” by Light Readings for outstanding achievements in the telecommunications industry and “Businessman of the
Year” in a poll conducted by The Times of India in 2006. Reliance Communications Limited, one of India’s leading wireless carriers, in
terms of coverage and capacity, and Reliance Capital Limited, one of the India’s leading private sector financial services companies are
part of the Reliance Group. The Reliance Group also includes Reliance Power Limited, one of India’s leading power development
companies. The Reliance Group has a large presence in the entertainment, communications and infrastructure sectors and we derive
significant benefits from our association with the group. For example, we are able to derive benefits of synergy in approaching
advertisers through our relationship with Reliance Broadcast Network Limited, a group company which owns 92.7 Big FM, one of
India's leading radio networks, and BIG Street, an out-of-home media business. We believe that we will continue to benefit from the
depth of experience of the Reliance Group and our association with the Reliance Group significantly enhances our brand value.
Our Business Strategy
Our business strategy is to build upon our competitive strengths and business opportunities to continue to be a leading E&M company.
Our business strategy consists of the following principal elements:
Create lean front-end centers in overseas markets and substantial back-end delivery centres in India for film and media services
Hollywood produces maximum number of high budget films with high expenditure on VFX and 3D conversions. However, the cost of
production in US is almost four times as compared to that in India (Source: Federation of Indian Chambers of Commerce and Industry and
KPMG, “Indian Media & Entertainment Industry Report 2009”). We have identified this opportunity and mapped the demand with supply. We
have created strategic front-ends in the markets of US (Burbank) and UK (London), complimented by back-end delivery centres in India,
one of which is located in a SEZ. The front-end centers in US and UK focus on business development and hence are lean on assets. We
intend to continue to focus on further enhancement of strategic front-end tie-ups as also further strengthen the force-to-market (sales)
teams backed by increasing back-end asset creation in India, where our main delivery centres are located.
Continue to focus on increasing our revenue from film and media services through complementary services
We intend to expand our service offerings in line with technological developments and market demand. For instance, we have extended
our BPO offerings from restoration and content processing to VFX, 2D to 3D conversion and CGI keeping in line with the emerging
market trends. We commenced production services business with equipment rental and have extended our service bouquet by building a
state-of-the-art studio in Film City, Mumbai, comprising of three studio buildings with eight sound stages, which we believe will
significantly strengthen our ability to provide film and media services. While a part of the studio constituting one studio building with
three sound stages is operational, we expect to complete the remaining portion of the studio by December 2013.
Opportunistically expand our theatrical exhibition business
The key elements of our growth strategy for our domestic theatrical exhibition business include the following:
Focussing on select metro and tier 1 cities which we believe could potentially have a higher consumption pattern; and
Expanding in certain select locations to establish a footprint or to strengthen our presence in identified film territories.
A retail centric approach, to enhance the profitability of our theatrical exhibition business
Our key focus in improving the profitability of our theatres is through increasing patronage and improving the overall customer
experience, which we believe will lead to greater spending by customers, allow us to command greater premiums in our ticket prices and
increase advertising revenues. We seek to achieve this through the following:
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Enhancing our understanding of our customer to enable us to customise our programme selection. Further, we propose to introduce
movie and time specific pricing to increase admits and, consequently, box office collections;
Offering the customer a wider F&B choice and providing the customer greater access to F&B option in-theatre i.e. within the
precincts of the auditorium;
Augmenting our advertising sales by better utilising the available on-screen and off-screen space;
Delivering consistent customer experience, in line with our proposition of delivering an affordable luxury experience to larger pool
of customers, whilst keeping a tight control on costs; and
Exploring avenues for rent rationalisation, in the context of the changing market environment.
Grow our business through internal restructuring
We would continue to evaluate various opportunities for the growth of our business. In order to garner further investments with an aim to
raise fresh capital for the growth of our business, we are considering restructuring certain of our business divisions i.e. film and media
services business and exhibition business, including by transferring them to our subsidiaries. We may also consider options for entering
into technical and financial collaboration with strategic partners either directly or through our subsidiaries. For further details, please see
the chapter entitled “History and Certain Corporate Matters” at page 169 of this Letter of Offer.
Continue to pursue strategic acquisitions and alliances
We have expanded our operations by identifying and carrying out strategic acquisitions / alliances. The goals that we hope to achieve
through such strategic acquisitions/alliances include:
the expansion and enhancement of our businesses with minimum cost – both capital & operational;
the benefit of technical and operational synergies; and
expansion of our geographical reach.
We intend to continue to evaluate such options even in the future.
Recent measures to stimulate our business operations
The business of the Company is broadly segmented in 3 lines of businesses, i.e.
i. Theatrical Exhibition;
ii. Film and Media Services; and
iii. Television / Film production and distribution.
While we reported a loss of ` 34,044.77 lakhs on a restated consolidated basis for the six months ended March 31, 2013 and ` 27,593.15
lakhs on a restated standalone basis and ` 91,016.62 lakhs, as restated in Fiscal 2012 on a consolidated basis and ` 70,356.34 lakhs on a
stand alone basis we believe that our performance must be viewed against the backdrop of certain legacy problems that we have faced
and continue to face. Further, we have initiated remedial measures which we believe have benefitted us and will be reflected in the
coming financial years. Set out below is a brief segment wise description of our operations since 2006, as were then were, was acquired
by the Reliance Group.
i. Theatrical Exhibition
The theatrical exhibition business has been our largest source of revenue since 2008. At the time of the Acquisition we operated
5 multiplexes and 20 screens across Mumbai, Nashik and Pune. The strategy behind the acquisition was to emerge as a leader in
the theatrical exhibition business with a pan-India presence of about 500 screens across Tier I, Tier II & Tier III cities/ towns.
To implement this strategy we built a projects team comprising engineers, architects and supply chain professionals. The scale
of recruitment was in line with the overall strategy.
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In conformity with the strategy envisaged we acquired a number of properties and were operating 543 screens as at March 31,
2011, resulting in significant capital expenditure and, consequently, high levels of debt. In addition to rapid expansion in India,
we have entered into overseas markets through acquisitions.
However, due to changed economic scenario, we had to abate the envisaged growth plan. We continued to retain the services of
the projects team expecting to complete the targeted scale upon recovery in the economic environment. These increased
overheads along with the higher rentals locked in during the expansion phase led to adverse impact in the financial results.
Accordingly, to fund growth and to reduce the debt component and thereby the debt servicing costs, we proposed a rights issue
in 2009. Unfortunately, though, given the macro-economic scenario in and global financial crises post 2008, the rights issue
could not be completed resulting in us bearing a significant debt servicing cost. This Issue is expected to provide much required
funds which will enable us to reduce our debt servicing cost and shore up our resources.
In the interim, we have undertaken the following measures to enhance our operating efficiencies and chart a path to profitability
–
a) We have closed loss making properties
b) We have undertaken a manpower rationalization exercise to right size the project team to match the changed role of
focusing on maintenance rather than rapid expansion; and
c) We have identified properties with high rentals (as a percentage of revenues) and re-negotiated the contracts to lower
rentals; This is clearly visible as the rent expense as a percentage of Exhibition Revenues has come down from 43.28% for
the twelve month period, April 2011 to March 2012 to 35.28% for the twelve month period, April 2012 to March 2013.
Further to our recent endeavours to rationalize our screen count, reduced from 543 screens as on March 31, 2011 to 439 screens
as of May 31, 2013.
In addition, the above measures for Indian operations have resulted in improvement of standalone financials for the theatrical
exhibition segment. Standalone revenues for the segment have increased from ` 37,567.40 lakhs for the twelve month period,
April 2011 to March 2012 to ` 40,890.74 lakhs for the twelve month period, April 2012 to March 2013, an 8.84% growth in
spite of shutting down of loss making properties. Standalone segment result (earnings before interest and tax) for the segment
showed marked improvement, reducing from loss of ` 15,987.59 lakhs for the twelve month period, April 2011 to March 2012
to loss of ` 9,947.62 lakhs for twelve month period, April 2012 to March 2013.
In the above context, we have decided to focus our energies on the cash flow generation from India operations of the theatrical
exhibition segment. In line with this thought process, we have truncated our overseas business, by selling our Malaysian and
Nepal theatre exhibition chain while continuing our operations in the USA.
While exiting / closing loss making properties resulted in a write-off of approximately ` 5,289.69 lakhs for Fiscal 2012 and `
5,753.70 lakhs for the six month ended March 31, 2013, we believe that this loss which will enable us to re-focus our priorities.
We believe that these measures are bearing fruition which coupled with the recent surge in the industry has enabled us to
recover and generate profits at the EBITDA level. Further, we also believe that these measures will generate sufficient cash for
future growth.
ii. Film and Media Services (FMS)
FMS is categorized into i) Post production services, ii) production services & iii) media & creative services. Production and
post-production services have always been and continue to be profitable business segments.
We realized that the trend of digitization was emerging across various industries including telecom, retail, healthcare and
manufacturing. Replacing the existing analog technology with digital technology resulting in instant access to a full range of
multi-media entertainment is expected to have far reaching implications. This rapid shift towards new technology is expected to
restructure the entire industry and we believe will have significant impact on each business within the industry.
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Keeping abreast with this new evolving trend, in Fiscal 2009, we decided to venture into media & creative services including
restoration, content processing, VFX and stereoscopic conversion and set up a BPO in a SEZ at Airoli, Navi Mumbai of about
90,000 sq. ft.
In July 2011, we signed a three (3) year binding ‘Guaranteed Compensation’ contract with Digital Domain Production Inc., a
subsidiary of DDMG, with an overall value in excess of ` 10,000 lakhs annually to cater to their VFX & conversion projects.
We hired and trained VFX & conversion artists to deliver projects received from Digital Domain Production Inc. Since
September, 2011 we have serviced this contract, however, in September 2012, DDMG filed for bankruptcy along with its
subsidiaries and we had to write off ` 2,774.82 lakhs receivable from Digital Domain Production Inc.
We had also signed a three (3) year contract with National Film Archives for India (NFAI) for restoration of 1,000 films and
hired restoration artists to restore these films. However, due to its internal constraints, NFAI awarded around 600 films to us
over a period of 3 years.
Both these cases resulted in excessive capacity, leading to significant impact on our profits.
Subsequently, we have adopted the following measures to curb losses:
a) Employee strength has been pared in line with the revenue visibility, resulting in a significant reduction on the overall
salary cost;
b) Relocation of facilities have resulted in rent reduction; and
c) Strict monitoring and control over collection of receivables.
d) Reinforce sale team in US to attract outsourcing work to India
e) Joint acquisition of VFX business of DDMG along with Beijing Galloping Horse Media Co. Ltd.
We have expended significant energy in rationalizing the cost and paring our staff strength. Similarly, we believe we have made
substantial progress towards augmenting our delivery process by way of technological integration, improved pricing
mechanisms, building operational efficiencies and expanding senior management bandwidth wherever critical, across
geographies.
We are now, therefore, focusing on business development and revenue enhancement and are in discussions with large corporate
houses / studios across USA, UK and Asia.
We believe these efforts would pay off in the coming years, and result in a positive impact on the cash flows from this business
segment.
iii. Television / Film production and distribution
TV content production under the brand “BIG Synergy” has been a profitable venture from inception and is expected to grow
and deliver premium content.
Rights Issue
As per our audited restated financial statements, during six month ended March 31, 2013 and Fiscal 2012, our total income was
` 36,637.80 lakhs and `125,486.90 lakhs on a consolidated basis and ` 24,026.10 lakhs and ` 80,454.80 lakhs on a standalone
basis respectively and total expenses was ` 64,214.90 lakhs and ` 207,312.71 lakhs on a consolidated basis and ` 45,936.67
lakhs ` 143,583.94 lakhs on a standalone basis respectively. As per our audited restated financial statements, the total expenses
comprised finance costs (net) for the six months ended March 31, 2013 and Fiscal 2012 was `13,930.70 lakhs and ` 39,751.40
lakhs on a consolidated basis and ` 13,694.80 lakhs and ` 39,061.20lakhs on a standalone basis respectively, constituting
38.02% and 31.68% on a consolidated basis and 57.00% and 48.55% on a standalone basis respectively of our total income. In
Fiscals 2011 and 2010, our finance cost (net) comprised only 20.60% and 15.67% on a consolidated basis and 31.27% and
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23.25% on a standalone basis, respectively, of our total income as per our audited restated financial statements. The significant
and continuous increase in our finance cost is crucial and hampers our ability to grow.
As set out in the section entitled ‘Object of the Issue’ at page 81 of this Letter of Offer the objects of this Issue are to repay/pre-
pay some of our outstanding debts. Reducing our outstanding debt will, we believe, significantly help in reducing our finance
cost over time. This will enable us to attract finance on more favourable terms.
We expect that the measures mentioned above coupled with this Issue will send out a clear signal that we are headed in the right
direction and are on the path to recovery. We believe that this Issue is in the best interests of our Company and, consequently,
our shareholders.
Our Business Operations
Theatrical Exhibition Business
We operate one of India’s largest cinema chains under the brand “BIG Cinemas”, with 254 screens in India and 185 screens in the United
States as of May 31, 2013. Of the 439 screens operated by our Company, 132 screens are operated through management agreements. We
introduced the IMAX digital projection system in India and created properties such as BIG Cinemas R City, IMAX Big Cinemas and
Metro BIG Cinemas in Mumbai and Odeon BIG Cinemas in New Delhi.
The different types of agreements through which we operate our cinema theatres are set forth below:
Business conducting agreements: Typically, business conducting agreements are entered into between our Company, the
owners of the cinema theatre premises and persons/entities who hold licenses to operate cinema theatres (“License Holders”).
Under business conducting agreements, our Company operates and manages the cinema theatres on a conducting basis
exclusively, in consideration of which, our Company pays certain conducting charges to the License Holders. The licenses and
approvals required to operate the cinema theatres are acquired and maintained by the License Holders. The term of business
conducting agreements ranges from three years to twenty years.
Lease agreements: Lease agreements are entered into between our Company and the owners of the cinema theatre premises.
Under lease agreements, our Company obtains a right to occupy, possess and operate various cinema theatres /multiplexes on
exclusive basis, in consideration of which, our Company pays rent along with certain additional charges. The licenses and
approvals required to operate the cinema theatres are acquired and maintained by our Company. Typically, the term of these
lease agreements ranges from ten years to twenty years.
Management agreements: Management agreements are entered into between our Company and the owners of the cinema theatre
premises. Under management agreements, our Company manages operations for the cinema theatres, in consideration of which,
our Company receives a monthly management fee. Typically, the term of these management agreements ranges from three years
to ten years.
We operate most of our cinema theatres through lease arrangements, business conducting agreements or through management
agreements, except the multiplex situated at Mulund, Mumbai which is owned by us, the multiplex situated at Wadala, Mumbai which is
owned by us through a perpetual lease, the multiplex at Kalyani Nagar, Pune which is owned by a partnership firm, wherein we are one
of the partners and the multiplex at Trimurti Chowk, Nashik, which is owned by our Joint Venture company through a lease of 90 years.
Our cinema theatres are equipped with various types of sound systems such as Dolby Digital (5.1, EX and 7.1) and DTS, comfortable
seating and other customer-friendly amenities such as Mobile Box Office, mobile phone ticket purchasing application, ticketing through
“Print@Home” at select locations and “Easyticket”, a virtual pre-paid card that may be used to purchase tickets.
The number of our cinema theatres and screens are as follows:
As of March 31 Number of Cinema Theatres Number of Screens in Our
Cinema Theatres
2006 8 32
2007 15 57
2008 54 147
2009 115 429
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As of March 31 Number of Cinema Theatres Number of Screens in Our
Cinema Theatres
2010 140 508
2011 146 543
As of September 30, 2012 122 463
We operate 119 cinema theatres with 439 screens across India and the United States as of May 31, 2013.
India
In India, BIG Cinemas is located in 15 states and union territories with 96 properties and 254 screens as of May 31, 2013.
The number of our cinema theatres and screens in the states and union territories of India as of May 31, 2013 were as follows:
State / Union Territory Number of Cinema Theatres Number of Screens
Andhra Pradesh 7 15
Chattisgarh 2 3
Delhi 1 2
Gujarat 12 32
Haryana 2 5
Karnataka 2 6
Madhya Pradesh 3 8
Maharashtra 28 89
Pondicherry 1 2
Punjab 6 20
Rajasthan 6 9
Tamil Nadu 10 18
Uttaranchal 1 3
Uttar Pradesh 14 39
West Bengal 1 3
Total 96 254
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The following map illustrates our theatrical exhibition presence across 78 cities in India as on May 31, 2013:
The following table provides certain details of admits, ATP and SPH that illustrate the growth our theatrical business in India over the
last two Fiscals:
Particulars* Fiscal Tier 1 Cities Tier 2 Cities Tier 3 Cities
Admits (lakhs) 2011 107 55 86
2012 187 117 198
ATP (`) 2011 150 94 64
2012 168 78 52
SPH (`) 2011 41 27 19
2012 43 28 20
* excluding admits to theatres which are only managed by our Company
The United States
We have 185 screens located across the United States as of May 31, 2013. We have 23 cinema theatres located in the states of New
Jersey, New York, Virginia, California, Florida, Illinois, Georgia, Maryland, Tennessee, Kansas, Nevada, Ohio, North Carolina,
Pensylvania and South Carolina. In addition to exhibiting films in the Hindi, Tamil and Telugu languages, we also exhibit English-
language Hollywood films. We operate the leased cinema theatres under the brand name “Big Cinemas”.
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The following map illustrates our presence across the United States as of May 31, 2013:
Our Theatrical Exhibition Business Model
Our revenues are primarily generated from the following:
patronage and patron spending, which entails revenues generated from ticket sales, food and beverage sales, gaming and
parking;
advertising revenue;
business conducting fees; and
management fees.
The yearly details of our patron admissions for our cinema theatres globally are as follows:
Period Patron Admissions (in lakhs)*
Fiscal 2008 126
Fiscal 2009 258
Fiscal 2010 331
Fiscal 2011 359
Fiscal 2012 576
* Excluding patrons in theatres which are only managed by our Company
Our patron admissions for our cinemas theatres (excluding patrons in theatres which are only managed by our Company) are 502 lakhs
across India and 74 lakhs across the United States for Fiscal 2012 and approximately 144 lakhs across India and 15 lakhs across the
United States for six months ended March 31, 2013.
We have adopted a price differentiation model which we believe has increased our appeal to consumers by offering our patrons an
enhanced cinema-going experience at each price point. Our ATPs for our single / twin screen cinema theatres as compared to our
multiplexes may vary.
We provide our patrons with a wide variety of food and beverage options which we believe enhances their cinema-going experience. The
food and beverage offerings are primarily in the nature of fast food.
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The exhibition of films in our cinema theatres offers advertisers an opportunity to command the attention of a large, captive audience and
our pan-India presence is an attractive feature for such advertisers. Advertising opportunities in a cinema theatre include space selling,
on-screen and off-screen promotions and event sponsorship. We have entered into advertising agreements with several reputed
companies, including HDFC Limited, ITC Limited and Reliance Communications Limited.
Film and Media Services
The film and media services business is our second largest source of revenue and has been operational for approximately two decades.
We have expanded our portfolio of film and media services to provide post-production and grading with our 4K DI laboratory and our
digital cinema mastering facility.
Our film production services and post-production services operations in India are located in Mumbai. In Mumbai, we provide a wide
range of services.
We are engaged in media & creative services such as restoration, content processing, VFX, conversion of 2D content to 3D and CGI
business through our subsidiary, Reliance MediaWorks Entertainment Services Limited.
In addition, our subsidiaries located in United States and UK, Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks
(UK) Limited, respectively, are engaged in the business of digital image correction and film restoration.
The following chart illustrates our presence across the E&M industry value chain:
Film Processing Business
Our film processing business serviced approximately 245 clients and 58 clients during Fiscal 2012 and the six months ended March 31,
2013, respectively. For the said period, we provided film processing services for 230 films and developed approximately 28,316
analogue prints and 39 films and developed approximately 4,150 prints in Fiscal 2012 and the six months ended March 31, 2013,
respectively. We have established facilities that offer a variety of film negative services, including, film negatives processing, colour
correction, editing and the production of final prints for distribution. We also supply film negatives to film producers.
We have received national Indian awards for best cinematography for 15 films including, Salim Langde Pe Mat Ro in 1990, Suchitra
Mitra in 1993, Tarana in 1996, Hum Dil De Chuke Sanam in 2000, Rasikpriya in 2001, Girni and Swades in 2005, Parsi wada Tarapore
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– Present Day & Yatra in 2006, Kramasha in 2007, Three Of Us in 2008 and Kutty Srank and Gaarud in 2009, Anhe Ghorey Da Daan in
2011, Kaatal in 2012. In addition, our processing laboratory in Chennai received the South Indian Cinematographers’ Association award
for ‘Best Colour Laboratory’ in 2007.
The customer base for our film processing business includes the following film companies:
Filmmakers Film
Yash Raj Films Private Limited Rocket Singh, Badmaash Company, Lafangey Parindey, Mere Brother Ki
Dulhan, Ladies V/S Ricky Bahl, Ishqzaade, Ek Tha Tiger, Jab Tak Hai Jaan
Red Chillies Entertainment Private Limited Om Shanti Om, Main Hoo Na, Billu, Ra. One
Studio 18 OMG! Oh My God, Department, Shaitan, Son of Sardar, Aiyaa!, Chashme
Baddoor
UTV Software Communications Limited Rowdy Rathore , Barfi!, Dev D, Fashion, Welcome To Sajjanpur, Mumbai Meri
Jaan, Race, Taare Zameen Par, The Blue Umbrella, The Namesake, Aamir,
Chup Chup Ke, Khosla Ka Ghosla, The Happening, Chance Pe Dance, Udaan,
Raajneeti, Thank You, Kai po Che
Vinod Chopra Films Private Limited Ferrari Ki Sawaari ,Munnabhai M.B.B.S., Parineeta, Eklavya, Lage Raho
Munna Bhai, 3 Idiots
Rakeysh Omprakash Mehra Productions Delhi-6, Teen Thay Bhai
Rajshri Productions Private Limited Vivah, Dulhan Wahi Jo Piya Man Bhaye, Tarana, Ek Vivaah . . . Aisa Bhi, Love
U Mr. Kalakaar
Arbaaz Khan Productions Dabangg
Shree Ashtavinayak Cine Vision Limited Bol Bachchan ,Maharathi, Jab We Met, Superstar, Bhagam Bhag, Golmaal,
Golmaal Returns, Kidnap, Khatta Meetha, Rockstar,
Mukta Arts Limited 36 China Town, Apna Sapna Money Money, Black & White, Good Boy Bad Boy,
Sanai Choughade, Bombay to Bangkok, Khanna & Iyer, Shaadi Se Pehle, Valu-
The Bull, Yuvvraj, Hello Darling
Tips Industries Limited Kismat Konnection, Naqaab, Race, Dil Apna Punjabi, Prince, Tere Naal Love
Ho Gaya
Nadiadwala Grandson Entertainment Private Limited Jaan-E-Mann, Heyy Babyy, Housefull, House Full -2
B.R.Films Private Limited Bhootnath, Videsh, Water, Baabul
Dharma Productions Student Of The Year, I Hate Luv Storys, We Are Family, Agneepath, Ek Main
Aur Ekk Tu,
Balaji Motion Pictures Limited Once Upon a Time in Mumbai , Ragini MMS, The Dirty Picture, Kya Super Cool
Hai Hum, Ek thi Daayan
Reliance Big Entertainment Private Limited Kites, Raavan, Singham, Real Steel, Cowboys & Aliens Don 2, Dredd, Makkhi,
David
Eros Entertainment Aladin, Anjana Anjani, Veer, Shirin Farhad ki Nikal Padi, Khiladi 786
Function of a Film Processing Laboratory
A film processing laboratory is an integral component of the film production to exhibition value chain. Raw film is created during the
production of a film and cannot be exhibited in such form until it undergoes a number of processes to render it fit for viewing, which are
provided by a film processing laboratory. The laboratory aligns the film, performs sound correction and edits the film, which results in
the creation of a final print. The final print is then previewed in a preview theatre as a quality check. Distributors, the last link in the
value chain, market and distribute a film after acquiring distribution rights from the film producers of the film and ordering prints from
the film processing lab.
Film Processing Business
The primary services of our film processing business are colour negatives processing, colour positives processing, film printing, photo
guard coating and ultrasonic film cleaning. The processes involved for performing these services are detailed as follows:
Stage I
The exposed set of film negatives received from a studio or film shoot location is processed at our laboratory in accordance with the
picture negatives reports or camera logs prepared by the camera assistant for the camera operator or director. After the film is developed,
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it is inspected in accordance with the camera log and divided into sections according to the scenes and takes filmed. These sections are
then joined together into rolls, which are examined by the grading operator along with instructions received from the director to
determine how they will be printed. When the characteristics have been decided and recorded, a positive print is made from the
assembled rolls and processed through the developing machine. These prints are known as the “daily rush prints”.
Stage II
The negatives then undergo post-production processes, such as editing and sound synchronisation, in order to produce the first film print.
The laboratory then assembles the final picture and tracks the negatives to match the editor’s work print so that the newly created print
may be sent for approval to the film production company.
Stage III
A potential release print is ready for release when printing characteristics for both picture and sound have been standardised such that the
required number of copies of may be produced in consistency with the approved print.
We utilise a preview theatre featuring Dolby Digital Surround EX and DTS sound systems to carry out a final inspection of the films
processed at the laboratory, in addition to analysing films with densitometers and film analysers. We utilise two diesel generators with a
total capacity of 510 kVA as a backup power supply for our critical chemical processing activities.
DI Laboratory Business
We have set up a 4K DI laboratory that converts traditional analogue films to digital formats and features real-time grading capabilities.
Its integrated client services include telecine, digital optics, promotional packaging, conversion, scanning, high definition recording and
subtitling. Films serviced by our DI laboratory include, among others, Barfi!, Student Of The Year, Jab Tak Hai Jaan, Khiladi 786, Son
of Sardar, OMG! Oh My God, Chakravyuh, Rowdy Rathore, Ishqzaade, Bol Bachchan, Rockstar, Singam, RA- One, Zindagi Na Milegi
Dobara, Robot, 3 Idiots.
Digital Cinema Services Business
Our DCI grade digital cinema services business includes:
digital content mastering;
global fibre optic distribution; and
digital cinema theatre equipment installation and maintenace
Our secure digital cinema services facility located in Film City, Mumbai is connected to our digital processing labs on the same premises
and offers film producers and distributors the ability to have their finished film delivered in both 35 mm and digital formats. We have
introduced fibre optic distribution of films from India to the United States. We have successfully transmitted several films over our fibre
optic network to the United States. The fibre optic network entails robust security features as well as flexibility, timing and pricing
advantages.
Film and Broadcast Equipment Rental Business
Our film and broadcast equipment rental business rents standard and high definition cameras with assorted lenses and related equipment
as well as providing solutions and expertise through our technical advisory team. We have been associated with 33 programmes on
general entertainment channels in India and 77 televised events during Fiscal 2012. During the said period, we have also rented out film
equipment for 70 films and 519 advertising films. Further, we were associated with 12 programmes on general entertainment channels in
India and 27 televised events during the six months ended March 31, 2013. During the said period, we have also rented out film
equipment for 37 films and 250 advertising films. The following table lists some of the television programmes, event and films
associated with our equipment rental business:
Television Programmes Events Films
Kaun Banega Crorepati Filmfare Awards Dabangg (Arbaaz Khan Productions) and Aurangazeb (Yash
Raj Films)
Bigg Boss Femina Miss India Rajneeti (Prakash Jha Productions)
Jhalak Dikhla Ja Mirchi Awards Heroine (Bhandarkar entertainment)
Nach Baliye Star Parivaar Awards Barfi! ( Eshana Films)
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Television Programmes Events Films
India's Got Talent Star Screen Awards Bol Bachchan ( Shree ashtavinayak Films)
Pati Patni Aur Woh Standard Chartered Mumbai Marathon Rowdy Rathore ( SLB Films)
Rakhi Ka Swayamvar Airtel Delhi Marathon Ra – One (Red Chillies Entertainment)
Rahul Dulhaniya Le Jayega Sunfeast Bangalore Marathon Body Guard (The Reel Life Productions Pvt Ltd)
Dus Ka Dum Economic Times Awards Tees Maar Khan (Three's Company Productions)
Sacch Ka Samna Brand Equity Awards The Dirty Picture (Vertex Motion Pictures Pvt. Ltd.)
Creative Services
We offer a wide range of creative solutions to filmmakers through pre-production, production and post-production stages, including the
following:
VFX
We offer various VFX Solutions, with specialisation in highly complex visual effects, such as concept design, pre-visualisation, “look
development”, on-set supervision, 3D animation and CGI, matte painting, compositing and finishing for 2D and 3D stereoscopic feature
films and television projects. Our VFX team is supported by a network that connects our VFX studios in Burbank (USA), London (UK),
Navi Mumbai and Film City, Mumbai, (India). Galloping Horse - Reliance LLC, in which we have 30% stake, which owns Academy-
award winning brand “Digital Domain”, facilitates outsourcing of VFX and conversion work to India and UK and also demonstrates our
superior quality and efficient workflow processes as well as strong brand repute.
2D to 3D Conversion
We operate a 2D to 3D conversion facility that combines the technological and artistic abilities present in Hollywood with the skills and
large scale image processing capabilities in India. Through this facility, we cater to the demand for converting new films shot in standard
2D and older legacy titles proposed to be released in cinemas in stereoscopic 3D.
Our facility is based in Navi Mumbai (India) and houses a team of approximately 260 artists who have been trained to develop 3D
content. We have made our foray in the domestic markets with ‘Don 2’.
Film Restoration
We provide comprehensive solutions for the transfer of analogue content to digital formats. We address the needs of a variety of content
owners, such as international film and television studios, television networks, library owners and content distribution companies. We
offer services including restoration, encoding, transcoding, compression authoring, format and standards conversion, duplication and
dubs, meta tagging, repurposing, editing, versioning, quality control and archiving. We have serviced an order for the digitisation and
digital restoration of 600 films preserved by the National Films Archive of India.
Lowry Digital
Lowry Digital, our subsidiary based in Burbank, United States, operates digital restoration facilities. Lowry Digital utilises proprietary
image processing technology to deliver superior picture elements and has developed a unique technology, the “Lowry Process”, which is
used to create high image quality for all outputs, including film, broadcast television, advertisements, digital cinema, Blu-ray Disc and
Internet video. Lowry Digital’s services include film restoration, emergency image repair, digital blow-ups and DI enhancements. Lowry
Digital also offers image enhancement tools which are used for restoration and upgrade of damaged analogue film prints.
Lowry Digital’s clients include industry leaders such as Walt Disney Pictures & Television and Warner Bros. Entertainment Inc. Lowry
Digital’s facility has provided image enhancement and restoration services to approximately 621 films as of May 31, 2013 and has
worked on film classics such as Casablanca, Singin’ in the Rain, Sunset Boulevard and a number of Walt Disney Pictures & Television
classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie the Pooh, Beauty and the Beast
and 101 Dalmatians.
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iLab
iLab is a dedicated film and media services facility located in Soho, London, which offers front-end, processing, restoration and post-
production services to broadcasters and studios. iLab has produced rushes for many high-end films and original drama series for the
British Broadcasting Corporation and offers bespoke, specialist rush service for the advertising, feature film and broadcast markets.
3D Solutions
We offer integrated stereo services for various 3D alignment issues, image and detail enhancements, grain and noise management and
on-set consulting, in addition to our other services for stereoscopic 3D conversion, DI grading for 3D, creation and handling of 3D
pictures and 3D camera services. We have performed image and detail enhancements, addressed vertical and horizontal alignments
issues and ‘911 emergency services’ for 3D versions of leading titles such as Journey to the Center of the Earth, X Games 3D: The
Movie and Step Up.
Television Content Production and Film Distribution
Our television and film content production and distribution operations comprise of the production of television content which is
produced by us and includes related services of financing for the production of films. Film distribution operations comprise of our share
of revenue from exploitation and distribution rights acquired by us, which may include as a package, theatrical rights and video and
television rights.
We established BIG Synergy, our brand for television content production, through the acquisition of a majority interest in Synergy
Communications Private Limited (now known as Big Synergy Media Limited) in 2007. Big Synergy is one of the key companies in non-
fiction programming in India and has enjoyed success in adapting international formats for Indian viewers.
In 2011, Big Synergy’s KBC was awarded ‘CNN - IBN Indian of the Year 2011 Team KBC & Amitabh Bachchan’ in Entertainment
Category, Big Star most Entertaining Series (TV Non-Fiction) 2011 & Big Star TV Show of the Decade 2001-2010 at Big Star
Entertainment Awards, Best Anchor Game/Quiz Show at Indian Television Academy Awards 2011. Amongst various other awards, Big
Synergy was awarded ‘Best Production House of the Year’ at the Ninth Indian Telly Awards 2009.
Big Synergy has produced shows such as Kya Aap Paanchvi Paas Se Tez Hain, India’s Got Talent, Sach Ka Saamna and Aap Ki
Kachehri, Dus Ka Dum, Jhalak Dikhhla Jaa, Eureka, A Question of Answers, Mum Tum Aur Hum, as well as the adaptation of
international formats such as Mastermind India, University Challenge, Kamzor Kadi Kaun, India’s Child Genius, Bluffmaster, Heart
Beat- Dil Tham Ke Khelo and Kaun Banega Crorepati (Including its regional version), which have been broadcasted on major television
channels, including Colors, Star, Sony and Zee.
We also selectively undertake film distribution.
Competition
Our theatrical exhibition business comprises 254 screens across 96 cinemas and 78 cities in India as of May 31, 2013 and is a
combination of single or twin-screen cinemas and multiplexes. We face significant competition from some organised multiplex chains in
large cities. We face competition in the standalone cinema theatre segment from local cinema theatres in Tier 2 Cities and Tier 3 Cities
where customers are price sensitive.
In our film processing business, we face competition from certain other laboratories.
We have set up our 4K DI laboratory and face competition from existing companies. However, the client base that we have established
through our processing laboratory has helped us establish ourselves as a key player in this segment.
In our television content production business, we primarily create non-fiction content. This is an emerging segment and the competition
is restricted to a few players.
We also face intense competition in our US operations from various cinema theatre operators. Further, our restoration business also faces
competition in the United States.
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Employees
As of May 31, 2013, we had 1,951 full-time employees and 1,829 workers on contract labour basis.
Insurance
We maintain a general all-risk insurance cover for all of our cinema theatres and premises including cover for riots, terrorism, fire,
burglary and housebreaking, flood and earthquake. We also maintain group medical insurance covering all employees. In addition, we
have also purchased a public liability non-industrial risk policy, which has been extended to cover terrorism.
Intellectual Property
We do not own the trademarks “Reliance MediaWorks” and “BIG Cinemas”.
We have entered into a brand licensing agreement (“Brand Licensing Agreement”) with ADAV on December 7, 2009 for the use of the
trademarks “Reliance” and the logo on non-exclusive and royalty-free basis for a period of 10 years. In terms of the Brand License
Agreement, ADAV may terminate the agreement on various grounds, including (i) our failure to repay debt in the ordinary course of
business or when such debt becomes due, (ii) change of control of our Company, (iii) or if we attempt to claim any right of ownership in
relation to the aforementioned brand. In consideration of the licensing rights, we shall incur expenditure from time to time in accordance
with the directives and guidance of the authorised representatives of ADAV for an amount up to `5,000 lakhs.
We have entered into a brand license agreement (“Big BLA”) with Reliance Big Entertainment Private Limited (“RBEPL”) on
December 1, 2009 for the trademark “Big Cinemas” and the logo on a non-exclusive and royalty-free basis for a period of 10 years.
RBEPL may terminate the agreement on various grounds, including (i) our failure to repay debt in ordinary course of business or when
such debt becomes due or files for insolvency, (ii) change of control of our Company, (iii) or if we attempt to claim any right of
ownership in relation to the aforementioned brand. In consideration of the licensing rights, we shall incur expenditure from time to time
in accordance with the directives and guidance of the authorised representatives of RBL for an amount up to `5,000 lakhs.
Lowry Digital, one of our subsidiaries has obtained US Patent # 7,973,977 B2 issued on July 5, 2011 for ‘System and Method for
Removing Semi-Transparent Artifacts from Digital Images caused by Contaminants in the Camera's Optical Path’.
In addition, Lowry Digital has also filed an application with the US Patents and Trademarks Office for a patent for ‘System and Method
of Static Pattern Removal from Movies Captured using a Digital CCD Camera’.
Our Properties
Our registered office is located at Film City Complex, Goregaon (East), Mumbai 400 065, Maharashtra. We have taken our registered
office on lease from the Maharashtra Film Stage Cultural Development Corporation Limited pursuant to the lease agreement dated
October 21, 1996 for a period of 33 years for a rent payable annually and which is subject to an escalation every five years. Additionally,
our Company is liable to pay a consideration linked to the activities carried out by our Company from the said premises. The lease has
been granted for a term of 33 years (“Initial Term”) from October 21, 1996. The term of the lease shall be renewed for a further period of
33 years on an application made by our Company, six months prior to the expiration of the Initial Term, on the same terms and
conditions.
We own the multiplex situated at Mulund, Mumbai and the multiplex situated at Wadala, Mumbai is owned by us through a perpetual
lease. Further, the multiplex at Kalyani Nagar, Pune is owned by a partnership firm, wherein we are one of the partners and the multiplex
at Trimurti Chowk, Nashik, is owned by our joint venture company through a lease of 90 years. We have entered into various lease
agreements and conducting agreements for our cinema theatres located in India and overseas and the period of such leases varies across
our properties.
Further, we have also entered into separate agreements dated August 14, 2007 on build, operate and transfer basis for our studios located
at Film City, Mumbai for a period of 20 years for a rent payable annually and which is subject to an escalation every year. Our
production laboratory in Mumbai and a post-production services facility in Burbank, United States have been obtained on lease or leave
and license basis. Additionally, in respect of our production laboratory in Mumbai our Company is liable to pay a consideration linked to
the activities carried out by our Company from the said premises. This lease has been granted for a term of 33 years (“Initial Term”)
from October 21, 1996. The term of the lease shall be renewed for a further period of 33 years on an application made by our Company,
six months prior to the expiration of the Initial Term, on the same terms and conditions.
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REGULATIONS AND POLICIES
The following description is a summary of certain sector specific laws and regulations in India, which are applicable to our Company.
The information detailed in this section has been obtained from publications available in the public domain. The regulations set out
below may not be exhaustive, and are only intended to provide general information to the investors and are neither designed nor
intended to substitute for professional legal advice.
The Cinematograph Act, 1952
The Cinematograph Act, 1952 (“Cinematograph Act”) was enacted to regulate and certify cinematograph films prior to the exhibition
of such films. The Cinematograph Act authorizes the Central Government to constitute a Board of Film Certification in accordance with
the Cinematograph (Certification) Rules, 1983 (“Certification Board”) for the purpose of sanctioning films for public exhibition in
India.
The Cinematograph Film Rules, 1948
The Cinematograph Film Rules, 1948 (“Cinematograph Rules”) require that a license must be obtained prior to storing of any film
unless specifically exempted. Any person transporting, storing or handling films must ensure compliance with the provisions of the
Cinematograph Rules. The Cinematograph Rules inter alia pertain to precautions against fire, restriction of access to films by
unauthorised personnel, supervision of operations, storage of any loose films, minimum specifications for aisle space and exits in storage
rooms and electrical installations in the storage rooms. The Cinematograph Rules also specify the form and the procedure for applying
for licenses, renewal of licenses, transfer of licenses, refusal to license and cancellation of licenses.
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 (“Employment Act”) was enacted with the
object of regulating the conditions of employment of workers employed in cinemas and theatres. A producer of a feature film is
mandated to enter into an agreement with the workers prior to employing them. Further, the Employment Act enjoins them to register
such an agreement with the relevant authority. The Employment Act specifically makes the Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952, the Payment of Gratuity Act, 1972 applicable to all cinema theatres employing five or more
workers. The Employment Act also provides a dispute resolution mechanism in order to address grievances of the workers employed in
such theatres or under producers of feature films.
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984
The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984 provides the form of the agreement between a
cine-worker and a producer of a feature film. The rules also provide the procedure for reference of disputes and conduct of proceedings
before a Conciliation Officer of a Tribunal.
The Cine-Workers Welfare Fund Act, 1981
The Cine-Workers Welfare Fund Act, 1981 (“Welfare Fund Act”) was enacted with the object of setting up a welfare fund catering to
needs of the cine-workers and to promote activities for their welfare. The Welfare Fund Act provides that the Central Government will
create a Cine-Workers’ Welfare Fund wherein contributions would be made by way of grants of the Central Government and voluntary
contributions, etc. The Welfare Fund Act also provides that the Central Government should apply such funds for the purpose of meeting
expenses incurred in carrying out activities for the general welfare of the cine-workers, including providing grants and loans to such
workers and to devise schemes for their benefit. The Central Government is also authorised to require producers to furnish statistical data
about workers employed under them from time to time.
The Cine- Workers Welfare Cess Act, 1981
The Cine- Workers Welfare Cess Act, 1981 (“Cess Act”) provides for the levy and collection of cess on feature films for the purposes of
the Cine-workers Welfare Fund under the Welfare Fund Act. The Cine-Workers Welfare Cess Rules, 1984 lays down the manner of
collection of the duty prescribed in the Cess Act.
The Copyright Act, 1957
The Copyright Act, 1957 (“Copyright Act”) covers registration of copyrights of original literary, dramatic, musical and artistic works,
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cinematographic films and sound recordings. A copyright board has been established under the Copyright Act (“Copyright Board”),
which ordinarily hears all proceedings instituted before it. The Copyright Board is deemed to be a civil court and all proceedings before
the Copyright Board are deemed to be judicial proceedings as understood under the Code of Criminal Procedure, 1887 and the Indian
Penal Code, 1887 respectively. The Copyright Act also envisages that a copyright office shall be established under the immediate control
of the registrar of copyrights.
In accordance with the Copyright Act, copyright shall subsist during the period of the lifetime of the author and until sixty years
thereafter. Licensing and assignment of copyright is permitted in accordance with the provisions of the Copyright Act. Further, copyright
societies have been set up for issuing and granting licenses. Infringement of copyright is a civil or criminal offence under the Copyright
Act depending on the circumstances. Further, certain police officers above the rank of sub inspector may seize, without warrant, all
materials used for infringement. No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class is
empowered to try an offence under the Copyright Act. The Copyright Rules, 1958 which sets out the procedure for the enforcement of
the Copyright Act was also introduced with the Copyright Act.
The Prevention of Food Adulteration Act, 1954
The Prevention of Food Adulteration Act, 1954 (“PF Act”) was enacted to make provisions for prevention of food adulteration. The PF
Act restricts a person from selling or distributing any food which is adulterated or misbranded or being sold in contravention of the
conditions of the license under which it is to be distributed or sold or any article which has been prohibited from being sold by the Food
Health Authority or any other adulterant and enjoins all persons to ensure that the standards as laid down by the Central Committee on
food standards from time to time is met. The PF Act empowers the Central and the State Governments to appoint public analysts and
food inspectors for the purpose of taking samples of food from outlets selling them and for examining such food. A purchaser or a
recognized consumer association may also get any article of food analysed in the manner prescribed. The PF Act also provides that a
vendor of food items may be required to disclose the name and other details of any person from whom such food has been purchased.
The PF Act outlines the procedure and penalties to be levied in cases of contravention of any of the terms of the PF Act.
The Standards of Weights and Measures (Packaged Commodities) Rules, 1977
The Standards of Weights & Measures (Packaged Commodities) Rules, 1977 (“Packaging Rules”) issued under the Standards of
Weights and Measures Act, 1976 set out the rules applicable to packaged commodities. ‘Pre-packed commodity’ means a commodity
which, without the purchasers being present, is placed in a package of whatever nature, whether sealed or opened,, so that the quantity of
the product containing therein has a pre-determined value and such value cannot be altered without the package or its lid or cap, as the
case may be, being opened or undergoing a perceptible modification. The expression ‘Package’ is to be construed as a package
containing a pre-packed commodity. Every company selling such packaged product must ensure that the package being sold bears a label
containing the name and address of the manufacturer and the packer, a common description of the commodity/commodities packaged,
the net quantity of the commodity, the month and year of manufacture and the maximum retail price of the product. A consumer buying
such product must ensure that these declarations are mentioned prominently on the label of the product. The Weights & Measures
Organization, Controller of Legal Metrology at the state level, Assistant Controller of Legal Metrology at the divisional level and
Inspector, Weights & Measures at circle level are the appropriate authorities for redressal of any disputes under the Packaging Rules.
Environmental Regulations
Our Company is subject to Indian laws and regulations concerning environmental protection. The principal environmental regulations
applicable to industries in India are the Water (Prevention and Control of Pollution) Act, 1974, the Water Access Act, 1977, the Air
(Prevention and Control of Pollution) Act, 1981, the Environment Protection Act, 1986 and the Hazardous Wastes (Management and
Handling) Rules, 1989. Further, environmental regulations require a company to file an Environmental Impact Assessment (“EIA”) with
the State Pollution Control Board (“PCB”) and the Ministry of Environment and Forests (“MEF”) before undertaking a project entailing
the construction, development or modification of any plant, system or structure. If the PCB approves the project, the matter is referred to
the MEF for its final determination. The estimated impact that a particular project might have on the environment is carefully evaluated
before granting clearances. When granting clearance, conditions may be imposed and the approving authorities may direct variations to
the proposed project.
Kyoto Protocol and Carbon Credits
The Kyoto Protocol is a protocol to the International Framework Convention on Climate Change with the objective of reducing
greenhouse gases (“GHG”) that cause climate change. The Kyoto Protocol was agreed on December 11, 1997 at the third conference of
the parties to the treaty when they met in Kyoto, and entered into force on February
16, 2005. India ratified the Kyoto Protocol on August 22, 2006.
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The Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008
The Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, as amended (“Hazardous Wastes Rules”),
which superseded the Hazardous Wastes (Management and Handling) Rules, 1989, state that the occupier will be responsible for safe
and environmentally sound handling of hazardous wastes generated in his establishment. The hazardous wastes generated in the
establishment of the occupier should be sent or sold to a recycler or re-processor or re-user registered or authorised under the Hazardous
Wastes Rules or should be disposed off in an authorised disposal facility. The Ministry of Environment and Forests has been empowered
to deal with the trans-boundary movement of hazardous wastes and to grant permission for transit of hazardous wastes through any part
of India. No import of hazardous waste is permitted in India. The State Government, occupier, operator of a facility or any association of
the occupier will be individually or jointly or severally responsible for, and identify sites for, establishing the facility for treatment,
storage and disposal of hazardous wastes for the State.
Foreign Investment Regulation
The industrial policy was formulated in 1991 to implement the Government’s liberalisation programme and consequently industrial
policy reforms relaxed industrial licensing requirements and restrictions on foreign investment. FDI is allowed under the automatic route
for 100% in respect of sector in which our Company carries out its business.
Labour Laws
The workers are regulated by various labour laws, rules and regulations including the Workmen Compensation Act, 1923, the Payment
of Wages Act, 1936, the Employees’ State Insurance Act, 1948, the Factories Act, 1948, the Minimum Wages Act, 1948, the Employees’
Provident Funds and Miscellaneous Provisions Act, 1952, the Payment of Bonus Act, 1965, the Contract Labour (Regulation and
Abolition) Act, 1970 and the Payment of Gratuity Act, 1972, where applicable.
Intellectual Property Laws
In India, trademarks enjoy protection under both statutory and common law. The Trade Marks Act, 1999 protects a distinct ‘mark’. The
Trade Marks Act also makes special provision for application of marks as ‘collective marks’. The Registrar of Trademarks is the
authority responsible for registration of the trademarks, settling opposition proceedings and rectification of the register of trademarks.
The Indian Patent Act, 1970 protects any new invention / inventive step allowing the inventor the opportunity to reap the benefits of his
effort. The patent may be for a process or a product. An application for patent can be filed at any of the four patent offices in India.
Shops and Establishments legislations in various states
The provisions of various Shops and Establishments legislations, as applicable, regulate the conditions of work and employment in shops
and commercial establishments and generally prescribe obligations in respect of inter alia registration, opening and closing hours, daily
and weekly working hours, holidays, leave, health and safety measures and wages for overtime work.
Property Laws
The Transfer of Property Act, 1882 (“TP Act”) lays down general principles for the transfer of immovable property in India. It specifies
the categories of property that can be transferred, the persons competent to transfer property, the legitimacy of restrictions and conditions
imposed on the transfer and the creation of contingent and vested interest in the property. The TP Act recognizes, among others, sale,
mortgage, charge and lease as forms in which an interest in an immovable property may be transferred.
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HISTORY AND CERTAIN CORPORATE MATTERS
Our Company was incorporated as Adlabs Films Private Limited on November 30, 1987, as a private limited company under the
Companies Act. Our Company was originally promoted by Manmohan Ramanna Shetty and Vasanji Asaria Mamania. In 1989, our
Company entered into the business of motion picture processing by setting up a film processing laboratory at Andheri, Mumbai.
On June 19, 2000, pursuant to the conversion of our Company into a public company, the name of our Company was changed to Adlabs
Films Limited. Subsequently, in December 2000, our Company made an initial public offering of 44,00,150 Equity Shares.
On June 30, 2005, one of our Promoters i.e. Reliance Land Private Limited entered into share purchase agreements with Vasanji Asaria
Mamania and Rubaiyat Arun Patel, erstwhile shareholders of our Company, for acquiring an aggregate of 23.20% of our Company’s
shareholding. Further, our Board of Directors, pursuant to their resolution dated August 8, 2005, approved issuance of 1,10,00,000
Equity Shares on preferential basis to Reliance Land Private Limited along with 38,00,000 warrants, convertible into one Equity Share
for each warrant held of our Company. Pursuant to the above, Reliance Capital Limited and Reliance Land Private Limited made an open
offer for acquiring a further shareholding of 20.00% of our Company in compliance with the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
On September 14, 2007, the High Court of Judicature at Mumbai approved the scheme of amalgamation pursuant to which Katch 22
Entertainment Private Limited was amalgamated with our Company with effect from April 1, 2006. For further detail, please see the part
entitled “Scheme of Arrangements- The scheme of amalgamation amongst Katch 22 Entertainment Private Limited, our Company and
their respective shareholders and creditors” in this chapter at page 173.
On March 7, 2008, the High Court of Judicature at Mumbai approved the scheme of arrangement pursuant to which Entertainment One
Limited was merged into our Company and the digital cinema business of Adlabs Multiplex and Theatres Limited (formerly Mukta
Adlabs Digital Exhibition Private Limited) was demerged to our Company with effect from April 1, 2005. For further detail, see
“Scheme of Arrangements- The composite and modified schemes of amalgamation and arrangement amongst Entertainment One
Limited, Adlabs Multiplex and Theatres Limited (previously known as Mukta Adlabs Digital Exhibition Private Limited), our Company
and their respective shareholders and creditors” in this chapter at page 174.
On April 4, 2009, the High Court of Judicature at Mumbai approved the scheme of arrangement pursuant to which the radio business of
our Company was demerged to Reliance Broadcast Network Limited (previously known as Reliance Unicom Limited– subsequently it
was also known as Reliance Media World Limited) with effect from April 1, 2008. For further details, please see the part entitled
“Scheme of Arrangements - The scheme of arrangement amongst Reliance Broadcast Network Limited (previously known as Reliance
Unicom Limited– subsequently it was also known as Reliance Media World Limited) our Company and their respective shareholders and
creditors” in this section at page 175.
On May 8, 2009, the High Court of Judicature at Mumbai approved the scheme of arrangement pursuant to which Adlabs Multiplexes
and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited, Rave Entertainment Private Limited were
merged into our Company with effect from April 1, 2008. For further detail, see “Scheme of Arrangements - The scheme of
amalgamation amongst Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited,
Rave Entertainment Private Limited, our Company and their respective shareholders and creditors” in this chapter at page 176.
Our Company’s name was further changed to Reliance MediaWorks Limited pursuant to which a fresh certificate of incorporation dated
October 5, 2009 was issued by the RoC.
Changes in Registered Office
The details of change in the registered office are set forth below:
Date of Change of
Registered Office
Details of the address of Registered Office Reasons for
change
July 17, 2000 Change of registered office address from 35/38 Suren Road, Andheri (East), Mumbai 400
093 to Film City Complex, Goregaon (East), Mumbai 400 065
Not known.
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The Main Objects of Company
The main objects, inter alia, contained in the Memorandum of Association of our Company are as follows:
1. To carry on the business of manufacturers, producers, exporters, importers, hirers, dealers, distributors and exhibitors of raw
films, chemicals, photographic and optical goods, cinematographic films, video cassettes, apparatus, recorders, machinery and
equipments pertaining to or required for the film developing, printing, processing, editing, sound recording, re-recording,
transferring, dubbing of sound, video taping, transferring film to video, duplicating video cassettes, discs or any format and to
edit various formats.
2. To arrange to produce, secure, procedure, acquire, retain, purchase, publish, dispose off and distribute advertisement films, TV
serials, feature films, and programmes of educational, cultural, devotional, industrial, health, entertainment, family welfare,
tourism, Governmental and of other subjects of interest.
The main objects as contained in the Memorandum of Association enable our Company to carry on the business presently carried out as
well as business proposed to be carried out and the activities proposed to be undertaken pursuant to the Objects of the Issue.
Amendments to the Memorandum of Association
Our Memorandum of Association was amended from time to time pursuant to the change in the authorised share capital of our Company.
For details of change in the authorised capital of our Company since its incorporation, please see the chapter entitled “Capital Structure”
at page 69 of this Letter of Offer. The details along with the amendment of our Memorandum of Association due to changes other than
the changes to authorised share capital are set out below:
Date of
shareholders’
resolution
Nature of Amendment
December 2, 1999 The name of our Company was changed from Adlabs Films Private Limited to Adlabs Films Limited
January 12, 2006 Additions were made to other objects of our Company by inserting clauses 86 to 91 to the clause III(C) of the
Memorandum of Association, as follows:
“86.To carry on the business of running a TV Station, Radio Station, recording studio, shooting studio, sound
mixing studio, dubbing studio, editing unit, preview theatre, hiring out the film shooting equipment,
studios for production of serials for the Indian Market and export thereof.
87. To carry on the business of production of Television serials and radio programmes, to play, relay, uplink,
downlink, broadcast, telecast live or otherwise all kinds of programme including but not restricted to
entertainment, news, and current affairs, health, game shows, songs, features films, educational, sports and
artistic shows or any other entertainment content.
88. To carry on the business of development of music software including series of sound or music recorded on
magnetic tapes, cassette, compact disk and digital media, digital system for pre-production, post
production and software for commercial broadcasting which can be played and reproduced on any
appropriate apparatus for the Indian market and for transfer and export by any means out of India.
89. To carry on business of financing any person or partnership firm, joint venture company, body corporate
or any other entity, whether incorporated or not and whether in India or abroad related to film production,
TV serial , TV channels, radio programmes, running and maintenance of multiplex and all or any objects
in relation thereto.
90. To carry on the business of designers, manufacturers, processors, assemblers, dealers, traders, distributors,
importers, exporters, agents, consultants, designers and contractors, for erection and commissioning turn-
key or transporting and converting, repairing, installing, training, servicing maintenance of all kinds of
telephone instruments, intercoms, accessories, telecommunication, radio communication equipment
further for the Indian market and for transfer and export by any means out of India.
91. To carry on business of construction, development and maintenance, of residential complex, commercial
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Date of
shareholders’
resolution
Nature of Amendment
complex, entertainment centres, convention centres, exhibition centres, guest house, restaurants, parlours,
including all value added services such as recreational and other facilities such as movie theatre, hotels,
fast food centre, exhibitions of paintings, telecommunication centre, fitness centre, children’s theme park,
amusement park.”
September 30, 2009 The name of our Company was changed from Adlabs Films Limited to
Reliance MediaWorks Limited.
Promoters
The Promoters of our Company are Reliance Land Private Limited and Reliance Capital Limited. For details, please see the chapter
entitled “Our Promoters and Promoter Group” at page 200 of this Letter of Offer.
Capital raising activities through equity or debt
As on July 21, 2013, our Company had 94,615 members. For further details regarding our debt capital raising, please see the chapter
entitled “Financial Indebtedness” and regarding our equity capital raising, please see the chapter entitled “Capital Structure” at pages
225 and 69, respectively, of this Letter of Offer.
Our Company’s Shareholders
For details regarding our Comapny’s shareholders, please see the chapter entitled “Capital Structure” at page 69 of this Letter of Offer.
Major events of our Company
The table below sets forth some of the key events in our history:
Year Event
1989 Entered the business of motion picture processing by setting up a film processing laboratory at Andheri, Mumbai
December 2000 Our Company made an initial public offering of 44,00,150 Equity Shares
November 2001 Our first multiplex IMAX, Wadala, Mumbai was made fully operational
September 2005 The Reliance group acquired majority stake in our Company
January 2006 Commenced the film distribution business
January 2006 Issued and allotted 84,000 zero coupon foreign currency convertible bonds of face value of € 1,000 each
aggregating € 84 million (FCCBs)
May 2006 Incorporated wholly owned subsidiaries Adlabs Films (USA) Inc. (now known as Reliance MediaWorks (USA)
Inc) and Adlabs Films (UK) Limited (now known as Reliance MediaWorks (UK) Limited) in the United States
and UK, respectively.
January 2007 Acquired a 51% stake in Synergy Communications Private Limited (Big Synergy Media Limited) which is
involved in the business of operating in television content production
April 2007 Acquired 100% stake in Rave Entertainment Private Limited in order to establish our Company’s presence in the
theatrical exhibition business in the North
September 2008 Film processing, digital cinema and post-production facilities was certified by the Federation Against Copyright
Theft, UK
February 2008 Incorporated a wholly owned subsidiary namely Adlabs Films Netherland B.V. (now known as Reliance
MediaWorks (Netherlands) B.V.) in the Netherlands for distribution of films
April 2008 Commenced exhibition business in the United States through our Subsidiaries
September 2008 Acquired 90% of the paid-up capital of Lowry Digital, which enabled us to enter film restoration business in USA
October 2008 Our theatrical exhibition business was re-branded as “BIG Cinemas”
November 2008 Acquired 70% of the paid-up capital of Big Cinemas Lotus Five Star Sdn. Bhd., Malaysia, through one of our
Subsidiaries, which enabled us to enter the exhibition business in Malaysia
May 2009 Entered into the business of digital restoration and content processing facilities by acquiring AAA Digital Imaging
Private Limited (now known as Reliance MediaWorks Entertainment Services Limited)
June 2009 Transfer and vesting of our radio business in Reliance Unicom Limited (now known as Reliance Broadcast
Network Limited) with effect from April 1, 2008
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Year Event
January 2010 Acquired iLab, a dedicated film and media services facility located in Soho, London
January 2011 Commencement of operations of Stage 1 of our Studio
January 2011 Redeemed all outstanding FCCBs on the due date
May 2011 Sold 89.68% stake in Sri Ramakrishna Theatre Limited held by our Company. It is no longer a subsidiary of our
Company.
June 2011 Sold 50% stake in Cineplex Private Limited held by our Company. It is no longer a joint venture of our Company.
April 2012 Sold 100% stake in Rave Entertainment and Food Nepal Private Limited held by the Company
June 2012 Acquired the remaining 30% of the paid-up capital of Big Cinemas Lotus Five Star Sdn. Bhd., Malaysia, making it
a wholly owned subsidiary of Reliance MediaWorks (Malaysia) Sdn Bhd., one of our indirect subsidiaries.
September 2012 Invested 30% stake in capital of Galloping Horse America LLC and jointly bid for certain assets and brand
“Digital Domain” of DDMG. This gave us access to visual effects, Mothership Media and certain other businesses
and assets of DDMG and its subsidiaries.
September 2012 Sold 100% stake in BIG Cinemas’ exhibition circuit in Malaysia held by our Company.
December 2012 In line with an MoU signed between Reliance Group and Wanda Group, China, to set up a joint venture for
strategic long term relationship between the two groups, we have agreed to explore possible co-operation in the
multiplexes business in India and the US.
Our Business
For details in relation to our business, please see the chapter entitled “Business” at page 149 of this Letter of Offer.
Injunction or restraining order
Our Company is under no injunction or restraining order.
Technology and market competence
For details on the technology and market competence of our Company, please see the chapter entitled “Business” at page 149 of this
Letter of Offer.
Competition
For details on the competition faced by our Company, please see the chapter entitled “Business” at page 149 of this Letter of Offer.
Our Subsidiaries and Joint Ventures
Our Company has 26 Subsidiaries, 2 (two) Joint Ventures, 1 associate and is a partner in 1 partnership firm. For details, please see the
chapter entitled “Our Subsidiaries, Joint Ventures and Partnership” at page 179 of this Letter of Offer.
Proposed Internal Restructuring
On February 21, 2012, our Company’s shareholders approved the proposed transfer of our exhibition and film and media services
divisions to certain of our wholly owned subsidiaries that we are yet to identify. Accordingly, we are in process of transferring these
business divisions.
We believe that such a transfer will enable us to garner fresh investment into these businesses and harness the growth potential. Towards
this end, we may also consider entering into technical and financial collaboration with strategic and private equity partners either directly
or through our subsidiaries. Further, should an appropriate opportunity arise, we may acquire or partner with companies that we believe
will enhance our business, revenues and profitability. The impact, if any, on our financial statements cannot be quantified, at present. The
above process will not impact our equity share capital. Accordingly, our Company has prepared pro forma financial statements which
assume the transfer of our Company’s film production services and theatrical exhibition business division to our Subsidiaries at book
values. For the purpose of the transfer, it is assumed that all assets which form part of business division assets and business division
liabilities are transferred to the Subsidiaries of the Company and the amount receivable as consideration on transfer is shown as a short
term loan and advance recoverable from these Subsidiaries.
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The pro forma financial information has been prepared by our management and has not been audited or reviewed by our Auditors. It may
not necessarily be indicative of the net results of operations that might have been achieved by the Company for period or dates indicated,
nor is it necessarily indicative of the future results of the Company after such proposed internal restructuring. For further details, please
see the chapter entitled “Financial Statements - Pro Forma Financial Statements” at page F-261 of this Letter of Offer.
Further, our Company has, on July 17, 2012, executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of `60,500 lakhs in our Company’s film and media services division. The investment is
proposed to be made into the subsidiary of our Company, into which our film and media services division will be transferred. No
definitive agreement has been executed in respect of the proposed transaction. This term sheet has been extended and is now valid till
August 12, 2013.
While our Company is not sure of any definitve timeframe within which the proposed internal restructuring will occur, we believe that it
will not be completed prior to the closure of this Issue.
Scheme of Arrangements
a. The scheme of amalgamation (“Katch 22 Scheme”) amongst Katch 22 Entertainment Private Limited (“Katch”), our
Company and their respective shareholders and creditors.
The Katch 22 Scheme was approved by the High Court of Judicature at Mumbai on September 14, 2007, thereby granting its
approval for amalgamation of Katch with our Company. The purpose of the merger was to achieve business synergies and
operational consolidation as well as convenience. The Katch 22 Scheme was approved with effect from April 1, 2006
(“Appointed Date”).
The Katch 22 Scheme provided for transfer and vesting of the “undertaking” (as described below) in our Company.
“Undertaking” means the entire business of Katch along with all assets, properties, debts, liabilities and obligations pertaining to
the same.
Set forth below are the key features of the Katch 22 Scheme:
Share Capital as on March 31, 2006:
i. The authorised capital of Katch was `1,00,000 and the issued, subscribed and paid up share capital on the
same date was `1,00,000. After March 31, 2006, Katch issued and allotted 13,00,000, 9% non-cumulative
redeemable preference shares of `1 each for cash at a premium of `99 each.
ii. The authorised capital of our Company was `30,00,00,000 and the issued, subscribed and paid up share
capital on the same date was `19,90,03,750.
Date of operation of Katch 22 Scheme: The Katch 22 Scheme shall be effective from Appointed Date but shall be
operative from the date on which the certified copy of the High Court order is filed with the RoC i.e. October 9, 2007
(“Effective Date”).
Transfer and vesting of Undertaking: With effect from the Appointed Date the undertaking of Katch was transferred to
and vested in our Company.
Cancellation of existing share capital: Upon the Katch 22 Scheme being effective, no shares of our Company shall be
allotted in lieu or exchange of its holding in Katch and the share capital of Katch stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which Katch was a
party to and which were subsisting before the arrangement to be in full force and effect against and in favour of our
Company.
Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against Katch arising at the Appointed
Date, as and from the Effective Date were continued and enforced by or against our Company.
Staff, employees and workmen: On the Katch 22 Scheme becoming operative, all the employees, staff and workmen of
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Katch in service on the Effective Date were transferred to our Company on terms and conditions not less favorable
than subsisting with Katch on the Effective Date.
Accounting Treatment: Our Company recorded all the assets and liabilities of Katch transferred to and vested in our
Company at their fair values. The investment in Katch, appearing in books of our Company stood cancelled. The
difference, being the excess or shortfall of the net assets of Katch transferred to our Company against the book value of
the investment in the shares of Katch recorded by our Company, along with a diminution in the value of assets and
liabilities of our Company, pursuant to the order of the High Court of Judicature at Mumbai, was adjusted against
general reserves.
Dissolution: Upon the Katch 22 Scheme becoming effective, Katch stood dissolved without being wound up.
b. The composite and modified scheme of amalgamation and arrangement (“EM Scheme”) between Entertainment One Limited
(“EOIL”), Adlabs Multiplex and Theatres Limited (previously, Mukta Adlabs Digital Exhibition Private Limited) (“MADEL”),
our Company and their respective shareholders and creditors.
The High Court of Judicature at Mumbai pursuant to its order dated September 15, 2006 sanctioned the Composite Scheme
which, interalia, provided for the amalgamation of EOIL and demerger of the digital cinema business of MADEL to our
Company with effect from April 1, 2005 along with demerger of the radio business of our Company to RUL effective from
March 31, 2006. Subsequently, an application was filed with the Ministry of Information and Broadcasting by our Company for
the vesting of radio licenses held by it in the name of RUL. Pending receipt of the above-mentioned approval and completion of
licensing and other procedural formalities, the Composite Scheme was eventually not filed with the RoC as required under the
applicable provisions of the Companies Act. Thereafter, our Company filed a modified scheme of arrangement which was
between our Company, EOIL, MADEL and their respective shareholders and creditors (“EM Scheme”).
The EM Scheme was approved by the High Court of Judicature at Mumbai on March 7, 2008, thereby granting its approval to
merge EOIL into our Company and demerge the digital cinema business of MADEL to our Company. The purpose of the
merger was to streamline the film production and exhibition businesses of our Company. The EM Scheme was approved with
effect from April 1, 2005 (“Appointed Date”).
The EM Scheme provided for transfer and vesting of (i) “EOIL undertaking”; and (ii) “MADEL undertaking” in our Company.
“EOIL undertaking” means the entire business and, all assets, properties, debts, liabilities and obligations of EOIL as on the
Appointed Date. “MADEL undertaking” means the digital cinema business and, all related assets, properties, debts, liabilities
and obligations pertaining to the digital cinema business of MADEL as on the Appointed Date.
Set forth below are the key features of the EM Scheme:
Share Capital as on March 31, 2006:
i. The authorised capital of EOIL was `25,00,000.00 and the issued, subscribed and paid up share capital on the
same date was `5,00,000.00.
ii. The authorised capital of MADEL was `10,00,00,000.00 and the issued, subscribed and paid up share capital
on the same date was `1,00,000.00.
iii. The authorised capital of our Company was `30,00,00,000.00 and the issued, subscribed and paid up share
capital on the same date was `19,90,03,750.
Date of operation of EM Scheme: The EM Scheme shall be effective from Appointed Date but shall be operative from
the date on which the certified copy of the High Court order is filed with the RoC i.e. March 31, 2008 (“Effective
Date”).
Transfer and vesting of Undertaking:
i. With effect from the Appointment Date and upon the EM Scheme becoming effective, the EOIL undertaking
was transferred and vested in our Company.
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ii. With effect from the Appointed Date, the MADEL undertaking was transferred and vested in our Company as
a going concern. With effect from the Appointment Date and upon the EM Scheme becoming effective, all
statutory licenses and permits required by MADEL for carrying on the business of digital cinema business
were vested in our Company in accordance with the terms of the EM Scheme. However, the transfer and
vesting of the MADEL undertaking is subject to the securities, charges, mortgages and other encumbrances
that were subsisting in respect to MADEL undertaking or any part thereof.
Cancellation of existing share capital: Upon the EM Scheme being effective, no share of our Company shall be allotted
in lieu or exchange of its holding in EOIL and the share capital of EOIL stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which EOIL and
MADEL (pertaining to its digital cinema business) were party to and which were subsisting on the Effective Date
continued to be in full force and effect in the name of our Company.
Legal Proceedings: All suits, appeal and other legal proceedings, pending on or after the Appointed Date by or against
EOIL and MADEL (pertaining to its digital cinema business) were continued and enforced by or against our Company.
Staff, employees and workmen: With effect from the Appointment Date and upon the EM Scheme becoming effective,
all the employees, staff and workmen of EOIL and MADEL (pertaining to its digital cinema business) were transferred
to our Company on terms and conditions not less favorable than subsisting with EOIL and MADEL on the Effective
Date.
Accounting Treatment: Upon the EM Scheme becoming effective, investments in the equity share capital of EOIL as
appearing in our Company’s books of accounts was cancelled. Also, all assets and liabilities recorded in the books of
accounts of EOIL was transferred to and vested in our Company and the same was recorded at their fair values as on
the Appointed Date. The inter company balances was cancelled. The excess of the fair value of the assets recorded over
and above the value of our Company’s liabilities, less the book value of the equity shares of EOIL as appearing in our
Company’s books, if positive, was to be created to the general reserve account of our Company and if negative be
debited to the securities premium account. All credits were included in our general reserves, while all debits were
adjusted against the securities premium account. Our Company recorded the asset and liabilities pertaining to digital
cinema business of MADEL at the respective book values in the books of our Company as on the Appointed Date.
MADEL reduced the book value of asset and liabilities pertaining to the digital cinema business of MADEL. Excess of
book value of assets over book value of liabilities of the digital media business of MADEL to be adjusted; credits
against general reserve and debits were to be adjusted against the securities premium. Further, the financial statements
of our Company prepared after the Effective Date was not to record the results of the transaction related to radio
business from March 31, 2006 upto the Effective Date in its profit and loss accounts and, instead, the net effect of all
such transactions was to be debited / credited to the general reserve account of our Company.
Dissolution: Upon the EM Scheme becoming effective, EOIL shall be dissolved without being wound up.
Remaining Business of MADEL: The remaining business of MADEL and assets, liabilities and obligations pertaining
thereto shall continue to belong to and be vested in and be managed by MADEL.
c. The scheme of arrangement (“RUL Scheme”) amongst Reliance Broadcast Network Limited (previously known as Reliance
Unicom Limited) (“RUL”), our Company and their respective shareholders and creditors.
The RUL Scheme was approved by the High Court of Judicature at Mumbai on April 4, 2009, thereby granting its approval to
demerge the radio business of our Company to RUL. The purpose of the demerger was to explore the potential of radio business
of our Company to the fullest, provide focused leadership and management attention and enhance shareholder value. The RUL
Scheme was approved with effect from April 1, 2008 (“Appointed Date”).
The RUL Scheme provided for transfer and vesting of the “radio business undertaking” (as described below) in RUL as a going
concern. “Radio business undertaking” means the radio business of our Company along with all related assets, properties, debts,
liabilities and obligations pertaining to the same and as mutually agreed between our Board of Directors and the board of
directors of RUL. Pursuant to the RUL Scheme, all the shareholders of our Company were issued one RUL equity share for
every equity share of our Company held by them.
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Set forth below are the key features of the RUL Scheme:
Share Capital as on March 31, 2008:
i. The authorised capital of RUL was `1,05,50,000 and the issued, subscribed and paid up share capital on the
same date was `1,05,50,000.
ii. The authorised capital of our Company was `30,00,00,000 and the issued, subscribed and paid up share
capital on the same date was `23,06,30,850.
Date of operation of RUL Scheme: The RUL Scheme shall be effective from Appointed Date but shall be operative
from the date on which the certified copy of the High Court order is filed with the RoC i.e. June 30, 2009 (“Effective
Date”).
Transfer and vesting of Undertaking: With effect from the Appointed Date the radio business undertaking of our
Company was transferred to and vested in RUL as a going concern. Also, all licenses, permissions, approvals and
consents held by our Company that are required for carrying out the operations of the radio business were also
transferred and vested in RUL and mutated by the statutory authorities concerned in favour of RUL. The demerger was
subject to the securities, charges and mortgages and other encumbrances created to secure the liabilities forming part of
the radio business.
Cancellation of existing share capital: Pursuant to the demerger, RUL shall in respect of every equity share of `5/- each
of our Company issue one equity share of `5/- each in RUL. The capital of RUL shall increase to that extent. The
shares held by our Company in RUL stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which our
Company (pertaining to its radio business) was a party to and which were subsisting on the Effective Date continued to
be in full force and effect in the name of RUL.
Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against our Company (pertaining to its
radio business) were continued and enforced by or against RUL.
Staff, employees and workmen: On the RUL Scheme being operative, all the employees, staff and workmen of our
Company (pertaining to its radio business) in service on the Effective Date were transferred to RUL on terms and
conditions not less favorable than subsisting with our Company on the Effective Date.
Accounting Treatment: In terms of the RUL Scheme, the book value of the assets and liabilities pertaining to our radio
business undertaking were reduced by our Company at our book values. The difference that is in excess of the book
value of the assets pertaining to radio business undertaking over liabilities after adjusting the investments made by our
Company in RUL was to be, in the event of a credit balance be credited to our Company’s capital reserve account, and
in the event of a debit, was to be adjusted against our Company’s securities premium account. RUL shall record all
assets and liabilities pertaining to the radio business at the respective book values on the Appointed Date. There will be
a credit in share capital, to the extent of the shares issued.
Further, in relation to RUL, the liabilities in excess of assets recorded by RUL over and above the amount credited as
share capital after adjusting the cancellation of then existing share capital of RUL held by our Company shall be
deemed to comprise and be credited to the extent of `10,000 lakhs was credited to the securities premium account, and
the balance, if any, was to be treated as capital reserve arising on acquisition of business pursuant to the demerger. In
event of shortfall, the same was to be debited and carried forward as goodwill.
Remaining Business of our Company: The remaining business of our Company and assets, liabilities and obligations
pertaining thereto shall continue to belong to and be vested in and be managed by our Company.
d. The scheme of amalgamation (“AAMR Scheme”) amongst Adlabs Multiplexes and Theatres Limited (“AMTL”), Adlabs
Multiplex Limited (“AML”), Mahimna Entertainment Private Limited (“MEPL”), Rave Entertainment Private Limited
(“Rave”) (collectively, “Transferor Companies”), our Company and their respective shareholders and creditors.
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The AAMR Scheme was approved by the High Court of Judicature at Mumbai on May 8, 2009, thereby granting its approval
for merging AMTL, AML, MEPL and Rave with our Company. The purpose of the merger was for administrative convenience
and economical and operational synergy. The AAMR Scheme was approved with effect from April 1, 2008 (“Appointed
Date”).
The AAMR Scheme provided for transfer and vesting of the “undertakings” (as described below) in our Company.
“Undertaking” means the entire business of the Transferor Companies along with all assets, properties, debts, liabilities and
obligations pertaining to the same.
Set forth below are the key features of the AAMR Scheme:
Share Capital as on March 31, 2008:
i. The authorised capital of AMTL was `10,00,00,000 and the issued, subscribed and paid up share capital on
the same date was `5,00,000.
ii. The authorised capital of AML was `1,00,00,000 and the issued, subscribed and paid up share capital on the
same date was `98,10,000.
iii. The authorised capital of MEPL was `1,00,000 and the issued, subscribed and paid up share capital on the
same date was `1,00,000. After March 31, 2008, the authorised share capital was changed to `2,90,000 and
the issued, subscribed and paid up share capital was `2,90,000.
iv. The authorised capital of Rave was `5,00,00,000 and the issued, subscribed and paid up share capital on the
same date was `3,00,00,000. After March 31, 2008, the authorised share capital was changed to `5,00,00,000
and the issued, subscribed and paid up share capital was `5,00,00,000.
v. The authorised capital of our Company was `30,00,00,000 and the issued, subscribed and paid up share
capital on the same date was `23,06,30,850.
Upon the sanction of the AAMR Scheme, the authorised share capital of our Company was increased by the authorised
share capital of the Transferor Companies.
Date of operation of AAMR Scheme: The AAMR Scheme shall be effective from Appointed Date but shall be
operative from the date on which the certified copy of the High Court order is filed with the RoC i.e. May 29, 2009
(“Effective Date”).
Transfer and vesting of Undertaking: With effect from the Appointed Date the undertakings of the Transferor
Companies were transferred to and vested in our Company. Also, all licenses, permissions, approvals and consents held
by the Transferor Companies were also transferred and vested in our Company. The merger was subject to the
securities, charges and mortgages and other encumbrances created or subsisting in respect of the assets of the
Transferor Companies with respect to the financial agreement and arrangements entered into by the Transferor
Companies.
Cancellation of existing share capital: Upon the AAMR Scheme being effective, no shares of our Company shall be
allotted in lieu or exchange of its holding in the Transferor Companies and the share capital of Transferor Companies
stood cancelled.
Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which the
Transferor Companies were a party to and which were subsisting on the AAMR Scheme coming into effect continued
to be in full force and effect against our in favour of our Company.
Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against the Transferor Companies were
continued and enforced by or against our Companies.
Staff, employees and workmen: On the AAMR Scheme becoming operative, all the employees, staff and workmen of
the Transferor Companies in service on the Effective Date were transferred to our Company on terms and conditions
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not less favorable than subsisting with the Transferor Companies on the Effective Date.
Accounting Treatment: On the AAMR Scheme becoming operative, all our investment in the share capital of the
Transferor Companies stood cancelled. Further, all assets and liabilities of the Transferor Companies were recorded by
our Company at their respective fair values as on March 31, 2009. The inter company balance and transactions stood
cancelled. The difference between the amount of assets and liabilities taken over and recorded by our Company after
making all required adjustments along with any appreciation/diminution in the value of our assets whether fixed or
current investments, if any, were to be adjusted into the capital reserve account.
Dissolution: Upon the AAMR Scheme becoming effective, the Transferor Companies stood dissolved without being
wound up.
Financial and Strategic Partners
Our Company does not have any financial or strategic partners. Further, our Promoters have not entered into a sharholder’s agreement in
respect of the Company.
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OUR SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIP
Our Company has the following 26 Subsidiaries, two Joint Ventures, one associate and is a partner in one partnership firm. None of our
Subsidiaries or Joint Ventures is listed on any stock exchange or has made any public or rights issue in the last three years or has become
a sick company under the meaning of the Sick Industrial Companies Act, 1985 or is under winding up as of the date of this Letter of
Offer.
Unless otherwise specified, all information in this section is as on the date of this Letter of Offer.
Following are the Subsidiaries of our Company:
1. Big Cinemas Entertainment (DE) LLC;
2. Big Cinemas Entertainment LLC;
3. Big Cinemas Exhibitions LLC;
4. Big Cinemas Falls Church LLC;
5. Big Cinemas Galaxy LLC;
6. Big Cinemas IMC LLC;
7. Big Cinemas Laurel LLC;
8. Big Cinemas Norwalk LLC;
9. Big Cinemas Phoenix LLC;
10. Big Cinemas Sahil LLC;
11. Big Cinemas SAR LLC;
12. Big Pictures USA, Inc.;
13. Big Synergy Media Limited;
14. Phoenix Big Cinemas Management LLC;
15. Reliance Lowry Digital Imaging Services Inc.;
16. Reliance Media Consultant Private Limited;
17. Reliance Media & Marketing Communications LLC;
18. Reliance MediaVentures Private Limited;
19. Reliance MediaWorks Creative Services Limited;
20. Reliance MediaWorks Entertainment Services Limited;
21. Reliance MediaWorks Theatres Limited;
22. Reliance Media Works VFX Inc.;
23. Reliance MediaWorks (Mauritius) Limited;
24. Reliance MediaWorks (UK) Limited;
25. Reliance MediaWorks (USA) Inc.; and
26. Reliance MediaWorks (Netherlands) B.V.
Following are the joint ventures / associates set up by our Company:
1. Divya Shakti Marketing Private Limited;
2. Swanston Multiplex Cinemas Private Limited; and
3. Galloping Horse – Reliance, LLC.
Following is a partnership firm set up by our Company:
1. HPE / Adlabs LP
Subsidiaries
1. Big Cinemas Entertainment (DE) LLC
Corporate Information
Big Cinemas Entertainment (DE) LLC was incorporated in Delaware, USA, under applicable US law on January 24, 2008 as
Adlabs Entertainment (DE) LLC. Big Cinemas Entertainment (DE) LLC is primarily engaged in the business of exhibition of
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films.
Capital Structure
Big Cinemas Entertainment (DE) LLC does not have any share capital.
Shareholding
Big Cinemas Entertainment (DE) LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a
wholly owned subsidiary of our Company.
2. Big Cinemas Entertainment LLC
Corporate Information
Big Cinemas Entertainment LLC was incorporated in New Jersey, USA, under applicable US law on December 19, 2007 as
Adlabs Entertainment LLC. Big Cinemas Entertainment LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Entertainment LLC does not have any share capital.
Shareholding
Big Cinemas Entertainment LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly
owned subsidiary of our Company.
3. Big Cinemas Exhibitions LLC
Corporate Information
Big Cinemas Exhibitions LLC was incorporated in Delaware, USA, under applicable US law on March 6, 2008 as Adlabs
Exhibition LLC. Big Cinemas Exhibitions LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Exhibitions LLC does not have any share capital.
Shareholding
Big Cinemas Exhibitions LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly
owned subsidiary of our Company.
4. Big Cinemas Falls Church LLC
Corporate Information
Big Cinemas Falls Church LLC was incorporated in Virginia, USA, under applicable US law on November 8, 2007 as Adlabs
Falls Church LLC. Big Cinemas Falls Church LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Falls Church LLC does not have any share capital.
Shareholding
Big Cinemas Falls Church LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly
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owned subsidiary of our Company.
5. Big Cinemas Galaxy LLC
Corporate Information
Big Cinemas Galaxy LLC was incorporated in Georgia, USA, under applicable US law on December 21, 2007 as Adlabs
Galaxy LLC. Big Cinemas Galaxy LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Galaxy LLC does not have any share capital.
Shareholding
Big Cinemas Galaxy LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned
subsidiary of our Company.
6. Big Cinemas IMC LLC
Corporate Information
Big Cinemas IMC LLC was incorporated in California, USA, under applicable US law on January 10, 2008 as Adlabs IMC
LLC, and it was accepted by the concerned regulatory authority on January 19, 2008. Big Cinemas IMC LLC is primarily
engaged in the business of exhibition of films.
Capital Structure
Big Cinemas IMC LLC does not have any share capital.
Shareholding
Big Cinemas IMC LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned
subsidiary of our Company.
7. Big Cinemas Laurel LLC
Corporate Information
Big Cinemas Laurel LLC was incorporated in Maryland, USA, under applicable US law on November 28, 2007 as Adlabs
Laurel LLC. Big Cinemas Laurel LLC was earlier engaged in the business of exhibition of films. However, the cinema theatre
operated by the company, i.e. Big Cinemas Laurel, was closed on May 9, 2010 due to expiry of its lease agreement. The
company is currently not engaged in any business.
Capital Structure
Big Cinemas Laurel LLC does not have any share capital.
Shareholding
Big Cinemas Laurel LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned
subsidiary of our Company.
8. Big Cinemas Norwalk LLC
Corporate Information
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Big Cinemas Norwalk LLC was incorporated in California, USA, under applicable US law on March 7, 2008 as Adlabs
Norwalk LLC. Big Cinema Norwalk was closed on January 31, 2012 due to expiry of lease of the premises. The company is at
present not engaged in any business.
Capital Structure
Big Cinemas Norwalk LLC does not have any share capital.
Shareholding
Big Cinemas Norwalk LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned
subsidiary of our Company.
9. Big Cinemas Phoenix LLC
Corporate Information
Big Cinemas Phoenix LLC was incorporated in Delaware, USA, under applicable US law on February 22, 2008 as Adlabs
Phoenix LLC. Big Cinemas Phoenix LLC is primarily engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Phoenix LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 51% member of Big Cinemas Phoenix LLC, which in turn is a wholly owned subsidiary
of our Company.
10. Big Cinemas Sahil LLC
Corporate Information
Big Cinemas Sahil LLC was incorporated in Illinois, USA, under applicable US law on November 7, 2008 and it was accepted
by the concerned regulatory authority on November 13, 2008 as Adlabs Sahil LLC. Big Cinemas Sahil LLC is primarily
engaged in the business of exhibition of films.
Capital Structure
Big Cinemas Sahil LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 97% member of Big Cinemas Sahil LLC, which in turn is a wholly owned subsidiary of
our Company.
11. Big Cinemas SAR LLC
Corporate Information
Big Cinemas SAR LLC was incorporated in Michigan, USA, under applicable US law on November 7, 2007 and it was
accepted by the concerned regulatory authority on November 8, 2007 as Adlabs SAR LLC. Big Cinemas SAR LLC was earlier
engaged in the business of exhibition of films. However, the cinema theatre which was operated by the company, i.e. Big
Cinemas Novi 8, was closed on September 30, 2010 due to expiry of its lease agreement. The company is currently not engaged
in any business.
Capital Structure
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Big Cinemas SAR LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 51% member of Big Cinemas SAR LLC, which in turn is a wholly owned subsidiary of
our Company.
12. Big Pictures USA, Inc.
Corporate Information
Big Pictures USA, Inc. was incorporated in New Jersey, USA, under applicable US law on March 30, 2009. Big Pictures USA,
Inc. has not commenced operations. Big Pictures USA, Inc. proposes to engage in the business of exhibition and distribution of
films.
Capital Structure
No. of equity shares Authorised capital 2,500 equity shares of no par value
Issued, subscribed and paid-up capital Nil
Shareholding
Big Pictures USA, Inc. is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned
subsidiary of our Company.
13. Big Synergy Media Limited
Corporate Information
Big Synergy Media Limited was incorporated in India on February 24, 1988 under the Companies Act as Synergy
Communications Private Limited. Big Synergy Media Limited is engaged in the business of television contents production.
Capital Structure
No. of shares Authorised capital 20,000 equity shares of `100/- each and 12,00,000 preference shares of
`100/- each
Issued, subscribed and paid-up capital 10,000 equity shares of `100/- each
Shareholding
Our Company holds 5,100 equity shares of Big Synergy Media Limited, which constitutes 51% of interest in Big Synergy
Media Limited.
14. Phoenix Big Cinemas Management LLC
Corporate Information
Phoenix Big Cinemas Management LLC was incorporated in the State of Tennessee, USA, under the applicable US law on
February 22, 2008 as Phoenix Adlabs Theatre Management LLC, and it was accepted by the concerned regulatory authority on
February 25, 2008. Phoenix Big Cinemas Management LLC is engaged in the business of managing theatres.
Capital Structure
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Phoenix Big Cinemas Management LLC does not have any share capital.
Shareholding
Reliance MediaWorks (USA) Inc. is a 51% member of Phoenix Big Cinemas Management LLC, which in turn is a wholly
owned subsidiary of our Company.
15. Reliance Lowry Digital Imaging Services Inc.
Corporate Information
Reliance Lowry Digital Imaging Services Inc. was incorporated in California, USA, under the applicable US law on April 3,
2008. Reliance Lowry Digital Imaging Services Inc. is engaged in the business of digital processing of movie content.
Capital Structure
No. of ordinary shares Authorised capital 1,000 ordinary shares of $1/- each
Issued, subscribed and paid-up capital 1,000 ordinary shares of $1/- each
Shareholding
Reliance MediaWorks (USA) Inc., a wholly owned subsidiary of our Company, and our Company hold 90.00% and 10.00%
interest, respectively, in Reliance Lowry Digital Imaging Services Inc.
16. Reliance Media Consultant Private Limited
Reliance Media Consultant Private Limited was incorporated in India on February 16, 2012 under the Companies Act. Reliance
Media Consultant Private Limited is engaged in the business of offering consultancy and advisory services in all areas of film
and media services.
Capital Structure
No. of equity shares Authorised Share Capital 10,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 10,000 equity shares of `10/- each
Shareholding
Reliance Media Consultant Private Limited is a wholly owned subsidiary of our Company.
17. Reliance Media & Marketing Communications LLC
Corporate Information
Reliance Media & Marketing Communications LLC was incorporated in Delaware, USA, under the applicable US law on May
13, 2009 as Adlabs Media LLC. Reliance Media & Marketing Communications LLC is engaged in the business of advertising
and marketing services.
Capital Structure
Reliance Media & Marketing Communications LLC does not have any share capital.
Shareholding
Reliance Media & Marketing Communications LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which
in turn is a wholly owned subsidiary of our Company.
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18. Reliance MediaVentures Private Limited
Corporate Information
Reliance MediaVentures Private Limited was incorporated under the Companies Act on June 19, 2012. Reliance MediaVentures
Private Limited is yet to commence business operations.
Capital Structure
No. of equity shares Authorised capital 10,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 10,000 equity shares of `10/- each
Shareholding
Reliance MediaVentures Private Limited is a wholly owned subsidiary of our Company.
19. Reliance MediaWorks Creative Services Limited
Corporate Information
Reliance MediaWorks Creative Services Limited was incorporated in India under the Companies Act on June 20, 2013.
Reliance MediaWorks Creative Services Limited is yet to commence business operations.
Capital Structure
No. of shares Authorised capital 80,000 equity shares of `10/- each
2,00,000 Preference Shares of `1/- each
Issued, subscribed and paid-up capital 50,000 equity shares of `10/- each
Shareholding
Reliance MediaWorks Creative Services Limited is a wholly owned subsidiary of Reliance MediaWorks Entertainment Services
Limited, which in turn is a wholly owned subsidiary of our Company.
20. Reliance MediaWorks Entertainment Services Limited
Corporate Information
Reliance MediaWorks Entertainment Services Limited was incorporated in India under the Companies Act on March 27, 2006
as AAA Infrastructure Investment Private Limited. Reliance MediaWorks Entertainment Services Limited is engaged in the
business of conversion of 2D movies into 3D movies, film restoration, image processing and content format processing.
Capital Structure
No. of shares Authorised capital 15,00,000 equity shares of `10/- each
50,00,000 preference shares of `1/- each
Issued, subscribed and paid-up capital 8,50,000 equity shares of `10/- each
12,00,000 preference shares of `1/- each
Shareholding
Reliance MediaWorks Entertainment Services Limited is a wholly owned subsidiary of our Company.
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21. Reliance MediaWorks Theatres Limited
Corporate Information
Reliance MediaWorks Theatres Limited was incorporated in India under the Companies Act on May 19, 2003 as Gemini
Exhibitors Limited. It is a partner in a partnership firm Gold Adlabs which operates a multiplex in Pune.
Capital Structure
No. of equity shares Authorised capital 5,00,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 50,000 equity shares of `10/- each
Shareholding
Reliance MediaWorks Theatres Limited is a wholly owned subsidiary of our Company.
22. Reliance Media Works VFX Inc.
Corporate Information
Reliance Media Works VFX Inc. was incorporated in California, USA, under the applicable USA law on January 25, 2010.
Reliance Media Works VFX Inc. is engaged in the business of providing visual effects and animation services.
Capital Structure
No. of equity shares Authorised capital 200 equity shares of no par value
Issued, subscribed and paid-up capital 100 equity shares of no par value
Shareholding
Reliance Media Works VFX Inc. is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly
owned subsidiary of our Company.
23. Reliance MediaWorks (Mauritius) Limited
Corporate Information
Reliance MediaWorks (Mauritius) Limited was incorporated in Mauritius, under the applicable Mauritius law on March 20,
2008 as Adlabs (Mauritius) Limited. Reliance MediaWorks (Mauritius) Limited is engaged in the business of exhibition of
films.
Capital Structure
No. of ordinary shares Authorised capital 1,000 ordinary shares of no par value
Issued, subscribed and paid-up capital 1,000 ordinary shares of no par value
Shareholding
Reliance MediaWorks (Mauritius) Limited is a wholly owned subsidiary of our Company.
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24. Reliance MediaWorks (UK) Limited
Corporate Information
Reliance MediaWorks (UK) Limited was incorporated in the UK, under the applicable UK law on May 19, 2006 as Adlabs
Films (UK) Limited. Reliance MediaWorks (UK) Limited is engaged in the business of film distribution and in providing
dedicated film and media services facility in London through iLab.
Capital Structure
No. of ordinary shares Authorised capital 10,000 ordinary shares of £1/- each
Issued, subscribed and paid-up capital 10,000 ordinary shares of £1/- each
Shareholding
Reliance MediaWorks (UK) Limited is a wholly owned subsidiary of our Company.
25. Reliance MediaWorks (USA) Inc.
Corporate Information
Reliance MediaWorks (USA) Inc. was incorporated in New Jersey, United States, under the applicable United States law on
May 17, 2006 as Adlabs Films USA Inc. Reliance MediaWorks (USA) Inc. is engaged in the business of exhibition, film
distribution and post production services through its subsidiaries. It is also engaged in the business of providing services such as
film restoration, emergency image repair, digital blow-ups and DI enhancements and also operates digital restoration facilities
through its subsidiaries Reliance Lowry Digital Imaging Services Inc. and Reliance Media Works VFX Inc.
Capital Structure
No. of ordinary stock Authorised capital 200 ordinary stock of no par value
Issued, subscribed and paid-up capital 200 ordinary stock of no par value, issued for $ 20,000
Shareholding
Reliance MediaWorks (USA) Inc. is a wholly owned subsidiary of our Company.
26. Reliance MediaWorks (Netherlands) B.V.
Corporate Information
Reliance MediaWorks (Netherlands) B.V. was incorporated in Netherlands, under the applicable Netherlands law on February
8, 2008 as Adlabs Films Netherlands B.V. Reliance MediaWorks (Netherlands) B.V. is engaged in the business of film
distribution.
Capital Structure
No. of equity shares Authorised capital 900 equity shares of Euro 100/- each
Issued, subscribed and paid-up capital 180 equity shares of Euro 100/- each
Shareholding
Reliance MediaWorks (Netherlands) B.V. is a wholly owned subsidiary of our Company.
188
Joint Ventures
1. Divya Shakti Marketing Private Limited
Corporate Information
Divya Shakti Marketing Private Limited was incorporated in India under the Companies Act on October 21, 1994. Divya Shakti
Marketing Private Limited is engaged in the business of exhibition of films.
Capital Structure
No. of equity shares Authorised capital 2,10,000 equity shares of `10/- each
Issued, subscribed and paid-up capital 2,00,000 equity shares of `10/- each
Shareholding
Our Company holds 1,00,000 equity shares of Divya Shakti Marketing Private Limited, which constitutes 50% of interest in
Divya Shakti Marketing Private Limited.
2. Swanston Multiplex Cinemas Private Limited
Corporate Information
Swanston Multiplex Cinemas Private Limited was incorporated in India under the Companies Act on October 11, 2001.
Swanston Multiplex Cinemas Private Limited is engaged in the business of exhibition of films.
Capital Structure
No. of equity shares Authorised capital 30,00,000 equity shares of ` 10/- each
Issued, subscribed and paid-up capital 20,30,000 equity shares of ` 10/- each
Shareholding
Our Company holds 10,15,000 equity shares of Swanston Multiplex Cinemas Private Limited, which constitutes 50% of interest
in Swanston Multiplex Cinemas Private Limited.
Associates
Galloping Horse-Reliance LLC
Corporate Information
Galloping Horse-Reliance LLC was incorporated in Delaware, USA under applicable law on September 17, 2012. It is engaged
in the business of visual effects through its wholly owned subsidiaries.
Capital Structure
Galloping Horse-Reliance LLC does not have share capital.
Shareholding
Reliance MediaWorks (USA) Inc., our wholly owned subsidiary is 30% member of Galloping Horse-Reliance LLC.
189
Partnership Firm
HPE / Adlabs LP
Corporate Information
HPE /Adlabs LP was incorporated in California, United States of America under applicable law on June 9, 2006. It is engaged
in the business of production of movies.
Capital Structure
HPE/ Adlabs LP does not have any share capital.
Shareholding
Our Company is a limited partner in HPE / Adlabs LP.
Interest of our Subsidiaries, Partnership Firm and Joint Ventures in our Company
None of our Subsidiaries, Partnership Firm and Joint Ventures holds any Equity Shares in our Company. We have entered into
certain transactions with our Subsidiaries and Joint Ventures. For details, please see the chapter entitled “Financial Statements”
at page F-1 of this Letter of Offer.
190
OUR MANAGEMENT
Board of Directors
According to our Articles of Association, our Company is required to have not less than three Directors and not more than 12 Directors.
Our Company currently has five Directors.
The following table sets forth details regarding the Board of Directors of our Company as of the date of filing this Letter of Offer:
Name, Father’s Name, Designation, Term,
DIN, Occupation, Nationality and Address
Age
(in years)
Other Directorships/Partnerships/Trusts in which our
Director is a trustee
Gautam Doshi
Father’s name: Bhailal Doshi
Designation: Non-Executive Non-Independent
Director
Term: Liable to retire by rotation
DIN: 00004612
Occupation: Service
Nationality: Indian
Address:
402, Hamilton Court
Tagore Road, Santa Cruz (West)
Mumbai 400 054.
60 Other directorships
1. Connect Infotain Private Limited;
2. Digital Bridge Foundation;
3. Piramal Life Sciences Limited;
4. Reliance Anil Dhirubhai Ambani Group Limited;
5. Reliance Big TV Limited;
6. Reliance Broadcast Network Limited;
7. Reliance Communications Infrastructure Limited;
8. Reliance Home Finance Limited;
9. Reliance Telecom Limited;
10. REL Utility Engineers Limited (formerly known as
Sonata Investments Limited);
11. Sterlite Industries (India) Limited; and
12. Telecom Infrastructure Finance Private Limited.
Proprietorships
1. Gautam Doshi & Co.
Amit Khanna
Father’s name: Jawaharlal Khanna
Designation: Non-Executive Non-Independent
Director
Term: Liable to retire by rotation
DIN: 00005430
Occupation: Media Professional
Nationality: Indian
Address:
301, Sea Star, 3rd
Floor
Balraj Sahani Marg, Juhu
Mumbai 400 049.
62 Other directorships
1. Earth Communications Office - India Association;
2. Reliance BIG TV Limited; and
3. Reliance Entertainment Private Limited.
4.
Proprietorships
1. Film Unit; and
2. Media Corp
Trusts
1. Mumbai Academy of Moving Images
Sujal Shah
Father’s name: Anil Shah
Designation: Non-Executive Independent
Director
44 Other directorships
1. Amal Limited;
2. Gitanjali Gems Limited;
3. Hindoostan Mills Limited;
4. Hindoostan Technical Fabrics Limited;
5. i-Process Services (India) Private Limited;
191
Name, Father’s Name, Designation, Term,
DIN, Occupation, Nationality and Address
Age
(in years)
Other Directorships/Partnerships/Trusts in which our
Director is a trustee
Term: Liable to retire by rotation
DIN: 00058019
Occupation: Professional
Nationality: Indian
Address:
9, Ganesh Bhuvan, Natwar Nagar,
Road no.2, Jogeshwari (East),
Mumbai 400 060.
6. Keynote Corporate Services Limited;
7. Pramerica Trustees Private Limited;
8. Reliance Asset Reconstruction Company Limited;
9. Rudolf Atul Chemicals Limited;
10. Sabero Organics Gujarat Limited;
11. SSPA Consultants Private Limited;
12. Bhishma Realty Limited; and
13. Capricon Realty Limited
Partnerships
1. SSPA & Associates; and
2. SSPA & Co.
Anil Sekhri
Father’s name: Avtarkrishan Sekhri
Designation: Non-Executive Independent
Director
Term: Liable to retire by rotation
DIN: 00506790
Occupation: Professional
Nationality: Indian
Address:
23-A, Krishna Kunj, Opp. Millat Nagar, Off
New Link Road, Andheri (West), Mumbai 400
053.
54 Other directorships
1. ND S Art World Private Limited;
2. Reliance Broadcast Network Limited;
3. Sprint Tours & Travels Private Limited;
4. Reliance MediaWorks Entertainment Services
Limited;
5. Reliance MediaWorks Theatres Limited; and
6. Big Synergy Media Limited
Proprietorships
1. Anil Sekhri & Co.
HUF
1. Avtar HUF
Prasoon Joshi
Father’s name: Devendra Kumar Joshi
Designation: Non-Executive Independent
Director
Term: Liable to retire by rotation
DIN: 01260545
Occupation: Service
Nationality: Indian
Address:
201-202, B Wing, Quantum Park Building,
Union Park, Khar (West) Mumbai 400 052.
46 Other directorships
1. McCann Erickson India Private Limited;
2. Result Services Private Limited;
3. Associated Corporate Consultants India Private
Limited;
4. Reliance Broadcast Network Limited; and
5. End to end Marketing Solutions Private Limited.
Relationship with Other Directors
192
None of our Directors are related to one another.
Brief Biographies
Gautam Doshi, aged 60 years, has been a Director since October 7, 2005. He holds a master’s degree in commerce from the University
of Mumbai, Mumbai. He is also a fellow member of the Institute of Chartered Accountants of India. He has 36 years of experience in
areas such as mergers and acquisitions, income-tax, international taxation, accounting, auditing, finance, banking, legal and general
management. He was a senior partner in RSM & Co. and was a founder director of Ambit Corporate Finance Private Limited. He is
currently the group managing director of the Reliance Group.
Amit Khanna, aged 62 years, has been a Director since April 26, 2007. He holds a bachelor’s degree in arts from St. Stephen’s College,
New Delhi. He has nearly 40 years of experience in areas such as film production, script writing, lyrics writing, direction, theatre, radio,
films, journalism and television programming. He has held the position of the president, All India Film Producers Council, president,
Film and Television Producers Guild of India Limited and vice-president, Association of Motion Picture and TV Program Producers. He
has also been on the governing council of the film institutes situated in Pune and Kolkata. He was the first Indian to serve on the jury of
International Emmy. He has also been on the jury of various film festivals and awards in India and abroad. Besides serving on various
international, government and trade organizations and institutions, he has also won several awards.
Sujal Shah, aged 44 years, has been a Director since April 26, 2007. He holds a bachelor’s degree in commerce from University of
Mumbai, Mumbai. He is also a chartered accountant by qualification and is a member of the Institute of Chartered Accountants of India.
He has approximately 20 years experience in the field of accounting and corporate consultancy practice including mergers and
acquisitions, restructuring of companies, valuation of business/shares, due diligence review. He was the president of the Chamber of Tax
Consultants for the year 2010-2011 and is a founder partner of SSPA & Co., Chartered Accountants.
Anil Sekhri, aged 54 years, has been a Director since September 13, 2007. He holds a bachelor’s degree in commerce from Punjab
University, Chandigarh. He is also a fellow member of the Institute of Chartered Accountants of India. He has over 26 years of
experience in the areas such as accounting, taxation and legal matters with focus on media and entertainment sector. He is the founder of
Anil Sekhri & Co., Chartered Accountants.
Prasoon Joshi, aged 46 years, has been a Director since September 3, 2009. He holds a bachelor’s degree in science from University of
Meerut, Meerut a master’s degree in science (physics) from Meerut University, Meerut and a master’s degree in business administration
in marketing from the Institute of Management Technology, Ghaziabad. He has over 18 years of experience in areas such as advertising,
song writing, poetry and communication. He has received approximately 400 national and international awards and honors. He is
currently the executive chairman of McCann Worldgroup, India.
None of our Directors is or was a director of any listed company during the last five years preceding the date of filing of this Letter of
Offer, whose shares have been or were suspended from being traded on the BSE or the NSE, during the term of their directorship in such
company.
Except as set out below, none of our Directors is or was a director of any listed company which has been or was delisted from any
recognised stock exchange in India during the term of their directorship in such company.
Director Name of the
Company
Listed on Date of
delisting
Compulsory or
Voluntary
Reasons
for
delisting
Whether
relisted
Tenure
Mr. Sujal
Shah
Amrit
Banaspati
Company
Limited
BSE (May 20,
1996)
BSE - March
7, 2013.
Voluntary Please see
note 1
below.
No Appointed on
October 30,
2010.
Resigned with
effect from July
17, 2013.
Mr. Sujal
Shah
Amrit
Banaspati
Company
Limited
Delhi Stock
Exchange (DSE)
(May 21, 1996)
DSE – April 8,
2013.
Voluntary Please see
note 1
below.
No Appointed on
October 30,
2010.
Resigned with
effect from July
17, 2013.
193
Note 1:
The company has sold/transferred its edible oils business along with its manufacturing undertaking located at Rajpura (Punjab) on a
slump sale basis and as a going concern to M/s Bunge India Private Limited. Pursuant to the said sale/transfer of the edible oils business,
the company is engaged in trading of various commodities and treasury operations pertaining to cash consideration received from the
said sale/transfer of edible oils business. Further, the management of the company is exploring various new business opportunities, other
than the edible oils business, in which the company may engage in future. Since, the company is no longer engaged in the edible oils
business, which was its core business at the time of listing with BSE and DSE, it has been delisted.
Remuneration of our Directors
The remuneration paid to our Directors during Fiscal 2012 is as follows:
1. Executive Directors
Our Company does not have any executive Director. Ashish Agarwal, though, is the Manager of our Company in terms of the
Companies Act.
2. Non-Executive Directors
The following table sets forth the details of sitting fees and commission paid to the non-executive Directors during Fiscal 2012:
(in `)
Name Fiscal 2012
Sitting fees Commission and others
Gautam Doshi 50,000 Nil
Amit Khanna 1,80,000 Nil
Sujal Shah 2,05,000 Nil
Anil Sekhri 2,05,000 Nil
Prasoon Joshi 1,20,000 Nil
Ajay Prasad * 30,000 Nil *Ajay Prasad has resigned w.e.f April 10, 2012.
Except as stated in this section and the sitting fees paid in Fiscal 2012, no amount or benefit has been paid within the two preceding years
or is intended to be paid or given to any of our Company’s officers including our Directors and key management personnel.
None of the beneficiaries of loans, advances and sundry debtors are related to our Directors. Further, except statutory benefits and
contractual payments like gratuity and leave encashments, upon termination of their employment in our Company or retirement, no
officer of our Company, including our Directors and our key management personnel, are entitled to any benefits upon termination of
employment.
No loans have been availed by our Directors from our Company. Except Krishnanand Shetty, none of the key managerial personnel has
availed any loan from our Company.
Service Contracts with our Directors
We have not entered into any service contracts with our Directors entitling them to any benefits on termination of employment or
otherwise.
Service Agreement with the Manager
Pursuant to Board resolution dated July 1, 2011, Ashish Agarwal was appointed as a Manager of our Company with effect from July 1,
2011.
A service agreement has been entered into by our Company with Ashish Agarwal on July 1, 2011 (Service Agreement) in relation to his
appointment as the Manager with effect from July 1, 2011 for a period of five years, i.e. upto June 30, 2016 with a remuneration of `24
lakhs per annum.
The Service Agreement shall expire on June 30, 2016. Either party may terminate the Service Agreement with one month prior notice.
194
His DIN is 01598849.
Shareholding of Directors
None of our Directors hold any Equity Shares in our Company.
Borrowing Powers of our Board of Directors
Pursuant to a resolution passed by the shareholders of our Company on October 25, 2007, and in accordance with the provisions of the
Companies Act, the Board is authorised to borrow from time to time, any sum or sums of money, upon such terms and conditions and
with or without security, in Indian/foreign currency, as our Board may in its discretion think fit, notwithstanding that the money or
monies to be so borrowed by us (excluding the temporary loans obtained or to be obtained from our Company’s bankers in the ordinary
course of business) together with the sums already borrowed, may exceed the aggregate of our paid-up capital and free reserves,
provided the sums so borrowed shall not, at any time, exceed `5,00,000 lakhs.
Corporate Governance
Our Company is in compliance with the applicable corporate governance requirements, including under the Equity Listing Agreements,
the Companies Act and other applicable laws and regulations. The corporate governance framework is based on an effective independent
Board, separation of the Board’s supervisory role from the executive management team and constitution of committees of the Board, as
required under law.
Committees of the Board of Directors
The Board has constituted committees of Directors, each of which functions in accordance with the relevant provisions of the Companies
Act and the Equity Listing Agreements. These include, (i) Audit Committee, (ii) Shareholders’ and Investors’ Grievance Committee, (iii)
Remuneration Committee, and (iv) Committee of Directors. The details of these committees are as follows:
A. Audit committee
The members of the Audit Committee are:
1. Sujal Shah;
2. Amit Khanna;
3. Anil Sekhri;
4. Gautam Doshi; and
5. Prasoon Joshi.
The Audit Committee was re-constituted by a resolution passed by the Board of Directors in its meeting held on May 15, 2012. The
terms of reference of the Audit Committee are as provided in Clause 49 of the Equity Listing Agreements, as well as Section 292A of the
Companies Act, including overview of the accounting systems, correctness of the financial reporting and internal controls of our
Company.
B. Shareholders’ and Investors’ Grievance Committee
The members of the Shareholders’ and Investors’ Grievance Committee are:
1. Gautam Doshi;
2. Amit Khanna; and
3. Prasoon Joshi.
The Shareholders’ and Investors’ Grievance Committee was re-constituted by a meeting of our Board held on October 22, 2009. The
terms of reference of the Shareholders’ and Investors’ Grievance Committee include investigation into any matter relating to redressing
shareholders’ and/or investors’ complaints pertaining to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividend,
duplicate share certificates and dematerialization or rematerialization of shares.
195
C. Nomination / Remuneration Committee
The members of the Nomination / Remuneration Committee are:
1. Anil Sekhri;
2. Gautam Doshi;
3. Amit Khanna; and
4. Sujal Shah.
The name of Remunation Committee was changed to Nomination/ Remuneration Committee in the meeting of Board of Directors held
on November 03, 2012. The Nomination/ Remuneration Committee was re-constituted by a circular resolution passed by the Board of
Directors on June 9, 2010. The powers, duties and terms of reference of the Remuneration Committee include reviewing the overall
compensation policy and structure, service agreements and other employment conditions for the members of the board.
D. Committee of Directors
The members of the Committee of Directors are:
1. Amit Khanna;
2. Sujal Shah; and
3. Anil Sekhri.
The above Committee of Directors was constituted by a meeting of our Board held on July 25, 2012. The powers, duties and terms of
reference of the Committee of Directors include, inter alia, fixing a record date for the purpose of the issue, finalizing the size of issue
and issue price, deciding the opening and closing dates for the rights issue, approving and adopting the draft letter of offer, letter of offer,
application form and such other as documents as may be required, issuing and allotting the shares in one or more tranches and to do all
such acts and deeds necessary or desirable in connection with or incidental to the issue of the shares and dispose of the balance
unsubscribed portion of the right issue, if any, to our Promoters and/or any person(s) or institution(s) as it thinks most beneficial to our
Company, subject to such regulations, if any, as may be applicable.
Interests of our Directors
All of our Directors, including our independent Directors, may be deemed to be interested to the extent of fees, if any, payable to them
for attending meetings of the Board or a committee thereof, as well as to the extent of other remuneration and reimbursement of
expenses, if any, payable to them under our Articles of Association. All our non-executive Directors are entitled to sitting fees of as set
out at 193 above. Our Directors, including independent Directors, may also be regarded as interested in the Equity Shares held by the
companies, firms and trust, in which they are interested as directors, members, partners or trustees.
Our Directors, including independent Directors, may also be regarded as interested to the extent Equity Shares are allotted to entities in
which they are interested as directors, members, partners or trustees. Further, Mrs. Geeta Sekhri, wife of Anil Sekhri, one of our
Directors holds 1 (one) Equity Share. Anil Sekhri can be considered interested in our Company to extent of Equity Shares held by Mrs.
Geeta Sekhri.
All Directors may be deemed to be interested in the contracts, agreements / arrangements entered into or to be entered into by our
Company with any company in which they hold directorships or any partnership firm in which they are partners as declared in their
respective declarations.
Except as stated above, none of our Directors are interested in the promotion of our Company nor have any of them acquired any
property in 2 years preceding the date of this Letter of Offer.
Except as otherwise stated in the chapter entitled “Financial Statements” beginning at page F-1 of this Letter of Offer, our Company has
not entered into any contract, agreements or arrangements during the two years preceding the date of this Letter of Offer, in which our
Directors are interested directly or indirectly and no payments have been made to them in respect of such contracts, agreements or
arrangements.
Bonus or profit sharing plan for our Directors
Our Company does not have any bonus or profit sharing plan for its Directors.
196
Changes in our Board of Directors during the last three years:
Name Date of Appointment/ Change/ Cessation Reason
Pradeep Shah September 3, 2009 Resignation
Prasoon Joshi September 3, 2009 Appointment as additional director, regularized on
September 30, 2009
Ajay Prasad February 15, 2010 Appointment as additional director, regularized on August
31, 2010
Darius Kakalia June 9, 2010 Resignation
Ajay Prasad April 10, 2012 Resignation
197
Management Organisation Structure
Key Managerial Personnel of our Company
Venkatesh Roddam, Chief Executive Officer, aged 49 years, joined our Company in January 2012 to head the Film and Media Services
Business. He was re-designated as the CEO of the Company with effect from May 1, 2013. He holds a Masters degree in Business
Administration. Concurrently, he also holds directorship positions at VenSat Tech Services Pvt Ltd and Annapurna Studios Pvt Ltd.
Having spent a majority of his career in banking, he started his career with ANZ Grindlays Bank in 1987 and went on to work with
Emirates Bank International Ltd, HDFC Bank Ltd and Deutsche Bank AG. Thereafter, he held a leadership position as the CEO with
Mahindra Satyam BPO, before moving on to set up VenSat Tech Services Pvt Ltd in 2010 and has approximately 25 years of experience.
During Fiscal 2012, he was paid a gross compensation of ₹112.50 lakhs.
Mohan Umrotkar, Chief Financial Officer, aged 39 years, joined our Company in May 2008 and has been redesignated as the Chief
Financial Officer with effect from May 1, 2013. He is a chartered accountant by qualification. Prior to joining our Company, he was with
C.C Choksi & Company, a member firm of Deloitte. He has approximately 17 years of experience. He heads our finance function.
During Fiscal 2012, he was paid a gross compensation of `97.50 lakhs.
Shiana Makhija, Chief Human Resources Officer, aged 47 years, joined our Company in January 2011. She holds a bachelor's degree in
arts from University of Mumbai, Mumbai. She also holds masters’ degree in arts (social work) from Tata Institute of Social Sciences.
She has previously worked with companies such as Blue Star Limited, Johnson Controls India Private Limited, MIRC Electronics
Limited and Reliance Capital Limited and has held the position of Senior Vice President – Human Resources at Reliance Capital Ltd.
She has approximately 20 years of experience in the field of human resources. During Fiscal 2012 she was paid a gross compensation of
`105.00 lakhs.
Krishnanand Shetty, President – Processing & DI Lab, aged 60 years, joined our Company in April 1999. He holds a bachelor's degree
in science from University of Mumbai, Mumbai. He has approximately 36 years of experience in the media and entertainment industry.
During Fiscal 2012, he was paid a gross compensation of `150.00 lakhs. Although Krishnanand Shetty was supposed to retire on
February 20, 2012, by a letter dated February 1, 2012, his services were extended for a further period of two years.
Venkatesh Roddam
Chief Executive Officer
International
Business
Board of Directors
Ashish Agarwal
Company Secretary &
Manager
Film & Media Services
India
Business
Krishnanand Shetty
President - Processing &
DI Lab
Ashish Chakravorty
President - Production
Service &Broadcast Solution
Naresh Jhangiani
President – Operations
Media & Creative Services
& Corporate Services
Naresh Malik
President – Media &
Creative Services & Global
Sales - USA
Mohan Umrotkar
Chief Financial
Officer
Shiana Makhija
Chief Human
Resources Officer
USA India
Exhibition Operations
Ashish Saksena
Chief Operating Officer
Big Synergy
Siddhartha B – Chairman & MD
ns Media & Creative Services &
Corporate Services
President – Operations Media &
Creative Services & Corporate
Services
President – Operations Media &
Creative Services & Corporate
Services
v&MD
198
Ashish Chakravorty, President - Production Services & Broadcast Solutions, aged 48 years, joined our Company in January 2008. He
holds a bachelor's degree in economics from University of Mumbai, Mumbai. Prior to joining our Company he has worked with Zee
Entertainment Enterprises Limited and Universal Music. He has approximately 24 years of experience in various fields such as
marketing, advertising and music. During Fiscal 2012, he was paid a gross compensation of `49.50 lakhs.
Naresh Jhangiani, President – Operation Media & Creative Services & Corporate Services, aged 48 years, joined our Company in
January 2012. He holds a degree in Masters of Business administration in Human Resources. Prior to joining our Company, he has
worked with VenSat Tech Services Pvt Ltd, Mahindra Satyam BPO & Gati Limited. He has approximately 23 years of experience in
various fields such as human resources, marketing, business development, business affairs and talent management. During Fiscal 2012,
he was paid a gross compensation of `49.50 lakhs.
Naresh Malik, President – Media & Creative Services & Global Services (an employee of Reliance Lowry Digital Imaging Services
Inc.), aged 46 years, joined our Company in January 2010. He holds a bachelor’s degree in engineering (electronics and communication)
from Institution of Engineers, Chennai. Prior to joining our Company he has worked with, inter alia, Century Communication Limited -
Pixion, Ideal System Asia Pacific and Grass Valley Group and has held the position of Chief Executive Officer in Prime Focus World.
He has approximately 21 years of experience in the management and post production business. During Fiscal 2012, he was paid a gross
compensation of `145.33 lakhs.
Ashish Saksena, Chief Operating Officer - Exhibition, aged 46 years, joined our Company in September 2009. He holds a bachelor's
degree in Technology (Mechanical) from University of Calicut and post graduate diploma in management from IGNOU. Prior to joining
our Company, he held the position of CEO with PVR Pictures Limited and has also worked with Inox Leisure. He has approximately 25
years of experience. During Fiscal 2012, he was paid a gross compensation of ` 132.50 lakhs.
Ashish Agarwal, Company Secretary and Manager, aged 39 years, joined our Company in July 2011. He holds a bachelor's degree in
commerce and has obtained a degree in law from Maharshi Dayanand Saraswati University, Ajmer, Rajasthan. He is also a member of
the Institute of Company Secretaries of India. Prior to our Company he has worked with Aditya Birla Nuvo Limited. He has
approximately 14 years of experience in the legal and secretarial area. During Fiscal 2012, he was paid a gross compensation of `30
lakhs.
Except for the Service Agreement with Ashish Agarwal in relation to his appointment as the Manager with effect from July 1, 2011 for a
period of five years, the key management personnel are permanently employed with our Company as of the date of this Letter of Offer.
None of the key management personnel are related to each other.
Brief details of the general employment contract of key management personnel of our Company
Our Company has entered into general employment contracts with our key management personnel. A summary of the terms of these
general employment contracts is set out below:
The key management personnel are subject to an initial probation period of six months. Either party may terminate the contract during
this period, after giving a notice for a period of 15 days, without assigning any reason. The appointment and continuation of the key
management personnel is subject to them being found medically fit to be employed. The age of retirement is 58 years.
The key management personnel is prohibited from disclosing any secret, processes, methods, designs and any intellectual property of our
Company along with any other information relating to our Company gathered during the course of their employment. Any inventions,
discoveries, intellectual property designed or developed would become our Company’s exclusive property.
After completion of probation period, normally either party may terminate the contract after giving a notice of one month. Our Company
may terminate the contract, without a notice, if the particulars provided by the applicant in the application are incomplete or incorrect.
Also, if there is any misconduct or fraudulent activity on part of the employee, the services can be terminated.
Shareholding of key managerial personnel
Except Krishnanand Shetty and Ashish Chakravorty, who hold 150 Equity Shares and 100 Equity Shares, respectively, in our Company,
none of our key managerial personnel hold Equity Shares of our Company.
199
Interest of Key Managerial Personnel
Except to the extent of their shareholding in our Company, and remuneration or benefits to which they are entitled as per the terms of
their appointment and reimbursement of expenses incurred by them in the ordinary course of business, our Company’s key managerial
personnel do not have any other interest in our Company.
Bonus or profit sharing plan of the key management personnel
None of the key management personnel are entitled to any profit sharing plan.
Changes in the key management personnel
The changes in the key management personnel in the last three years are as follows:
Name Designation Date of change Reason for
change
Shiana Makhija Chief Human Resources Officer January 3, 2011 Appointment
Ashok Ganapathy Chief Executive Officer – Exhibition May 5, 2011 Appointment
Kirti Desai Company Secretary and Manager May 15, 2011 Resignation
Madhulika Singh Manager May 28, 2011 Appointment
Madhulika Singh Manager July 1, 2011 Resignation
Ashish Agarwal Company Secretary and Manager July 1, 2011 Appointment
Venkat Devarajan Chief Financial Officer December 16,
2011
Resignation
Tushar Dhingra Chief Operating Officer – Exhibition (North, East & Central) December 31,
2011
Resignation
Shankar Dutta President – Motion Pictures & Allied Services December 31,
2011
Resignation
Venkatesh
Roddam
Chief Executive Officer – Film & Media Services January 2, 2012 Appointment
Anil Arjun Chief Executive Officer September 30,2012 Resignation
Anantha Krishnan Vice President – Technology February 28, 2013 Resignation
Ashok Ganapathy Chief Executive Officer – Exhibition May 30, 2013 Resignation
Naresh Jhangiani President – Operation Media & Creative Services & Corporate
Services
May 23, 2013 Re-designation
Employees
Employee Stock Option Scheme
The shareholders of our Company pursuant to a resolution passed at the AGM held on August 31, 2010 have in terms of section 81(1A)
of the Companies Act and the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999,
accorded their consent to our Board of Directors to introduce and implement the Reliance MediaWorks Employee Stock Option Scheme
(“ESOS Scheme”). As on the date of this Letter of Offer, our Company has not granted any ESOS Securities under the aforesaid
scheme.
Payment or Benefit to Officers of our Company (non salary related)
Except as stated above, no amount or benefit (non salary related) has been paid within the two preceding years or is intended to be paid
or given to any of our Company’s officers including our Directors and key management personnel, including benefits in kind for all
capacities and contingent or deferred compensation. Further, except statutory benefits upon termination of their employment in our
Company or retirement, no officer of our Company, including our Directors and our key management personnel, are entitled to any
benefits upon termination of employment.
200
OUR PROMOTER AND PROMOTER GROUP
Promoters
Reliance Land Private Limited and Reliance Capital Limited are the Promoters of our Company.
1. Reliance Land Private Limited
Reliance Land Private Limited was incorporated as Reliance Homes Limited, a public limited company, under the Companies Act on
December 23, 1993. The company received a certificate of commencement of business on January 3, 1994. Subsequently, the name of
the company was changed to Reliance Land Limited pursuant to which a fresh certificate of incorporation dated May 25, 1995 was
issued by the Registrar of Companies. Pursuant to the conversion of the company into a private limited company, the name was changed
to Reliance Land Private Limited on September 7, 2001.
Reliance Land Private Limited is involved in the business of real estate.
The registered office of Reliance Land Private Limited is situated at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi
Mumbai 400 710, India.
Board of directors
The board of directors of Reliance Land Private Limited comprises of:
1. Achuthan Kothandath; and
2. Vinod Kumar Tripathi.
Shareholding pattern
Shareholding pattern of Reliance Land Private Limited as of June 30, 2013 is as follows:
Name of Shareholder No. of Equity Shares Held % of shareholding
Reliance Capital Limited 50,00,000 50.00
Reliance Share & Stock Brokers Private
Limited
50,00,000 50.00
Total 1,00,00,000 100.00
Unconsolidated Financial performance
(In ` lakhs, except share data)
Particulars As at and for the
nine month period
ended March 31,
2010(1)
As at and for the
year ended March
31, 2011
As at and for the
year ended March
31, 2012
As at and for the
year ended March
31, 2013
Sales & Other Income 31.34 41.47 17.10 161.18
PAT (185.09) 115.29 (157.20) (1,485.26)
Equity Capital 1,000.00 1,000.00 1,000.00 1,000.00
Reserves 33,887.54 30,852.83 37,195.62 29,772.87
Basic and Diluted EPS (in `)(1)
(2.45) 1.15 (1.57) (14.85)
Net asset value per share (in `)(2)
348.88 318.53 381.96 307.73 (1)
Excluding preference dividend (2)
Excluding reserves earmarked for preference share redemption
201
Promoters of Reliance Land Private Limited
Reliance Capital Limited is the promoter of Reliance Land Private Limited. The directors of Reliance Capital Limited are as follows:
1. Anil D. Ambani;
2. Amitabh Jhunjhunwala;
3. Rajendra Prabhakar Chitale;
4. Dr. Bidhubhusan Samal; and
5. Vijayendra Nath Kaul.
There has been no change in the control or the management of Reliance Land Private Limited in the three years preceding the date of this
Letter of Offer.
Our Company confirms that the permanent account number, bank account number, company registration number and the address of the
Registrar of Companies where Reliance Land Private Limited is registered shall be submitted to the Stock Exchanges at the time of filing
this Letter of Offer.
2. Reliance Capital Limited
Reliance Capital Limited was incorporated as Reliance Capital & Finance Trust Limited under the Companies Act on March 5, 1986.
The company received a certificate of commencement of business on March 27, 1986. Subsequently, the name of the company was
changed to Reliance Capital Limited, pursuant to which a fresh certificate of incorporation dated January 6, 1995 was issued by the
Registrar of Companies.
Reliance Capital Limited is a non-banking financial company registered with the Reserve Bank of India under section 45-IA of the RBI
Act, 1934. Reliance Capital Limited has interests in asset management, mutual funds, portfolio management services, pension funds, life
and general insurance, private equity and proprietary investments, stock broking and depository services, investment banking, wealth
management, home and commercial finance, financial products distribution, venture capital, exchanges, asset reconstruction and other
activities in financial services.
The registered office of Reliance Capital Limited is situated at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai
400 710, India.
Board of directors
The board of directors of Reliance Capital Limited comprises of:
1. Anil D. Ambani;
2. Amitabh Jhunjhunwala;
3. Rajendra Prabhakar Chitale;
4. Dr. Bidhubhusan Samal; and
5. Vijayendra Nath Kaul
202
Shareholding Pattern
The shareholding pattern of Reliance Capital Limited as of June 30, 2013 is as follows:
Categor
y Code
( I )
Category of
Shareholder
( II )
No of
Shareh
olders
( III )
Total No of
Shares
( IV )
Number of
shares held
in
dematerilised
Form
( V )
Total Shareholding as percentage
of total number of shares
Shares Pledged
or otherwise
encumbered
As a
percentage of
(A+B) ( VI )
As a percentage
of (A+B+C) (
VII )
No of
Shares
(VIII)
As a
percent
age of
(A+B+
C)
(IX=VI
II/IV*1
00)
(A)
Shareholding of
Promoter and
Promoter Group
(1) Indian
(a) Individuals/Hindu
Undivided Family 9 11,65 ,983 11,65 ,983 0.48
0.47
0
0.00
(b)
Central
Government/State
Governments
- - - -
-
(c) Bodies Corporate 9 13,02,16,289 13,02,16,289 53.15 53.01 0 0.00
(d) Financial
Institutions/Banks
- - - -
-
(e) Any Other
(Specify) 1 16,00,000 16,00,000 0.65
0.65
0.00 0.00
Sub -Total (A)(1) 19 13,29,82,272 13,29,82,272 54.28
54.14
0
0.00
(2) Foreign
(a)
Individuals(Non-
Resident
Individuals/Foreign
Individuals)
- - - -
-
(b) Bodies Corporate
- - - -
-
(c) Institutions
- - - -
-
(d) Qualified Foreign
Investor
- - - -
-
(e) Any Other
(Specify)
- - - -
-
Sub -Total (A)(2)
- - - -
-
Total
shareholding of
Promoter and
Promoter Group
(A)=(A)(1)+(A)(2)
19 13,29,82,272 13,29,82,272 54.28
54.14
0
0
(B) Public
Shareholding
(1) Institutions
(a) Mutual Funds /UTI 187 18,03,022 17,38,725 0.74 0.73 - -
(b) Financial
Institutions/Banks 284 4,61,694 4,46,963 0.19
0.19
- -
(c)
Central
Government/State
Governments
78 76, 584 32,896 0.03
0.03
- -
203
Categor
y Code
( I )
Category of
Shareholder
( II )
No of
Shareh
olders
( III )
Total No of
Shares
( IV )
Number of
shares held
in
dematerilised
Form
( V )
Total Shareholding as percentage
of total number of shares
Shares Pledged
or otherwise
encumbered
As a
percentage of
(A+B) ( VI )
As a percentage
of (A+B+C) (
VII )
No of
Shares
(VIII)
As a
percent
age of
(A+B+
C)
(IX=VI
II/IV*1
00)
(d) Venture Capital
Funds
- - - -
-
- -
(e) Insurance
Companies 18 1,08,57,082 1,08,56,927 4.43
4.42
- -
(f)
Foreign
Institutional
Investors
514 4,79,82,718 4,79,76,899 19.59
19.53
- -
(g) Foreign Venture
Capital Investors
- - - -
-
- -
(h) Qualified Foreign
Investor
- - - -
-
- -
(I) Any Other
(Specify)
- - - -
-
- -
Sub -Total (B)(1) 1,081 6,11,81,100 6,10,52,410 24.97 24.91 0 0.00
(2) Non-Institutions
(a) Bodies Corporate 5,859 75,67,622 74,93,705 3.09 3.08 - -
(b)
i. Individual
shareholders
holding nominal
share capital up to
`1 Lakh.
11,45,0
10 3,80,97,561 3,31,23,638 15.55
15.51
- -
ii. Individual
shareholders
holding nominal
share capital in
excess of `1Lakh.
62 38,28,319 38,05,819 1.56
1.56
- -
(c) Qualified Foreign
Investor - - - -
-
- -
(d) Any Other
(Specify)
1 NRIs/OCBs 13,158 13,20,537 11,25,769 0.54 0.54 - 0.00
Sub -Total (B)(2) 11,64,0
89 5,08,14,039 4,55,48,931 20.74
20.69
0 0.00
Total Public
Shareholding
B=(B)(1)+(B)(2)
11,65,1
70 11,19,95,139 10,66,01,341 45.72
45.59
0 0.00
TOTAL (A) +(B) 11,65,1
89 24,49,77,411 23,95,83,613 100.00
99.73
0 0.00
(C)
Shares held by
Custodians and
against which
Depository
Receipts have
been issued
1 Promoter and
Promoter Group 0 0 0 0.00
0.00
0 0.00
2 Public 1 6,55,389 6,55,389 0.00 0.27 0 0.00
Sub - Total (C ) 1 6,55,389 6,55,389 0.00 0.27 0 0.00
GRAND TOTAL
(A)+(B)+(C)
11,65,1
90 24,56,32,800 24,02,39,002 100.00
100.00
0
0.00
204
Unconsolidated Financial Performance
The brief financial details of Reliance Capital Limited derived from its audited financial statements, prepared on a standalone basis, are
set forth below:
(In ` lakhs, except share data)
Particulars As at and for the year
ended March 31, 2011
As at and for the
year ended March
31, 2012
As at and for the
year ended March
31, 2013
Sales & Other Income 1,97,126.43 3,31,733.53 3,86,793.33
PAT 22,927.00 51,924.58 66,186.26
Equity Capital 24,616.00 24,616.00 24,616.00
Reserves (excluding revaluation reserves)* 6,71,208.89 10,66,374.01 11,34,623.81
Basic & Diluted EPS (in `) 9.33 21.14 26.95
Book value per share (in `) 283.28 444.15 461.92
* Reserves are net of miscellaneous expenditure to the extent not written off.
There has been no change in the control or the management of Reliance Capital Limited in the three years preceding the filing of this
Letter of Offer.
Our Company confirms that the permanent account number, bank account number, company registration number and the address of the
Registrar of Companies where Reliance Capital Limited is registered shall be submitted to the Stock Exchanges at the time of filing this
Letter of Offer.
Promoters of Reliance Capital Limited
The promoters of Reliance Capital Limited are as follows:
Individual promoters:
1. Kokila D. Ambani;
2. Anil D. Ambani;
3. Tina A. Ambani;
4. Jaianmol A. Ambani; and
5. Jaianshul A. Ambani (through father and natural guardian Anil D. Ambani).
Corporate promoters:
1. AAA Enterprises Private Limited;
2. AAA Infrastructure Consulting and Engineers Private Limited;
3. REL Utility Engineers Limited (formerly known as Sonata Investments Limited);
4. Reliance ADA Group Trustees Private Limited - Trustees of RCAP ESOS Trust; and
5. Reliance Innoventures Private Limited.
Natural person in control of the corporate promoters:
The natural person in control of the corporate promoters of Reliance Capital Limited is Anil D. Ambani.
Interests of Promoters
Our Promoters are interested in our Company to the extent of their shareholding, dividend received and interest received on the loans
given to us. For details on the shareholding of our Promoters in our Company, please see the chapter entitled “Capital Structure” at page
69 of this Letter of Offer. For details of loans given by Reliance Capital Limited, please see the chapter entitled “Financial Indebtedness”
at page 225 of this Letter of Offer.
Our Promoters do not have any interest in the property acquired by our Company within two years preceding the date of this Letter of
Offer or proposed to be acquired by our Company.
205
Reliance Capital Limited has provided a corporate guarantee in favour of Axis Trustee Services Limited for an amount of `35,000 lakhs
for the Non Convertible Debentures issued by our Company to Yes Bank for an aggregate amount of `35,000.00 lakhs. For further
details in relation to Non Convertible Debentures issued by our Company, please see the chapter entitled “Financial Indebtedness” at
page 225 of this Letter of Offer.
Payment of benefits to our Promoters or Promoter Group
Except as stated in the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer, there has been no payment of benefits
to our Promoters or Promoter Group during the two years preceding the filing of this Letter of Offer.
Confirmations
None of our Promoters have been declared as a willful defaulter by the RBI or any other government authority and there are no
violations of securities laws committed by our Promoters in the past and no proceedings for violation of securities laws are pending
against them.
Further, none of our Promoters or our Promoter Group or our Directors has been restrained from accessing the capital markets for any
reasons by SEBI or any other entity.
Companies with which our Promoters have disassociated in the last three years
Except as disclosed below, our Promoters have not disassociated from any company during the preceding three years from the date of
this Letter of Offer:
Reliance Capital Limited has disassociated from Medybiz Private Limited, Net Logistics Private Limited, Reliance Capital Services
Private Limited and Reliance Infrastructure Finance Private Limited as a result of sale of shares held by Reliance Capital Limited in
these companies. Reliance Commercial Finance Private Limited, Viscount Management Services (Alpha) Limited, Emerging Money
Mall Limited and Reliance Equities International Private Limited have been amalgamated with Reliance Capital Limited.
Change in the management and control of our Company
Other than as disclosed in this Letter of Offer, there has been no change in the management and control of our Company.
Promoter Group
In addition to our Promoters, the following persons form part of our Promoter Group i.e. part of the Reliance Group:
1. AAA Enterprises Private Limited;
2. AAA Infrastructure Consulting & Engineers Private Limited;
3. Adhar Project Management & Consultancy Private Limited;
4. Ammolite Holdings Limited;
5. Indian Agri Services Private Limited;
6. Indian Commodity Exchange Limited;
7. Payone Enterprise Private Limited (formerly known as Ashadeep Properties Private Limited);
8. QOPPA Trading Private Limited;
9. Quant Alternative Asset Management Private Limited;
10. Quant Broking Private Limited;
11. Quant Capital Advisors Private Limited;
12. Quant Capital Finance and Investments Private Limited;
13. Quant Capital Private Limited;
14. Quant Commodities Private Limited;
15. Quant Commodity Broking Private Limited;
16. Quant Investment Services Private Limited;
17. Quant Securities Private Limited;
18. QCAP Trade Private Limited (formerly Valankulam Investments and Trading Private Limited)
19. Reliance Alternative Investments Services Private Limited;
20. Reliance Asset Management (Malaysia ) SDN. BHD.;
206
21. Reliance Asset Management (Mauritius) Ltd.;
22. Reliance Asset Management (Singapore) Pte Limited;
23. Reliance Asset Reconstruction Company Limited;
24. Reliance Broadcast Network Limited;
25. Reliance Capital (Singapore) Pte. Limited;
26. Reliance Capital Asset Management (UK) Plc.;
27. Reliance Capital Asset Management Limited;
28. Reliance Capital Pension Fund Limited;
29. Reliance Capital Trustee Co. Limited;
30. Reliance Commodities Limited;
31. Reliance Composite Insurance Broking Limited
32. Reliance Consultants (Mauritius) Ltd;
33. Reliance Equity Advisors (India) Limited;
34. Reliance Exchangenext Limited;
35. Reliance Financial Limited;
36. Reliance General Insurance Company Limited;
37. Reliance Gilts Limited;
38. Reliance Home Finance Limited (formerly Reliance Home Finance Private Limited);
39. Reliance Innoventures Private Limited;
40. Reliance Financial Advisory Services Limited (formerly Reliance Investment Banking Services Limited);
41. Reliance Life Insurance Company Limited;
42. Reliance Money Express Limited;
43. Reliance Money Precious Metals Private Limited;
44. Reliance Net Limited;
45. Reliance AIF Management Company Private Limited (formerly Reliance Realty Private Limited);
46. Reliance Securities Limited;
47. Reliance Share & Stock Brokers Private Limited;
48. Reliance Spot Exchange Infrastructure Limited;
49. Reliance Venture Asset Management Private Limited;
50. Reliance Wealth Management Limited;
51. Viscount Management Services Limited;
52. Reliance Capital AIF Trustee Company Private Limited; and
53. Reliance CWT India Limited
The following entities have not been considered as being part of the Promoter Group for making disclosures in the Letter of Offer:
Names of the Companies Promoter(s)
Unilizer Media Limited
Unilazer Holdings Limited
TV Today Network Limited
Living Media India Limited
Aroon Purie
Ventura Textiles Limited
Ventura Texports Private Limited
Penny Securities & Investments Limited
Grover Vineyard Limited
Hindustan Export & Import Corporation Private Limited
Vallee De Vin Private Limited
Neeraj Deorah
Ravinder Kumar Jain
Deepak Roy
Menon & Menon Limited
Vijay Menon
Padmini Menon
Satish Menon
Preethi V Menon
K. Parameswaran
207
Vinod Sridharan
Divya V. Menon
Shreya V. Menon
Reverse Logistics Company Private
Limited
Hitendra Chaturvedi
Savita Chaturvedi
Rationale for not considering the above companies to be part of the Promoter Group:
Reliance Capital Limited (RCL), one of the Promoters of the Issuer, is a registered NBFC with the Reserve Bank of India. RCL is
classified as an “Investment Company” and is engaged in the business of acquisition and sale of securities. As part of its business RCL
invests in various companies from time to time and, on occasions, holds shares in excess of 10% of such companies. Accordingly, some
of these companies come within the ambit of the definition of Promoter Group in terms of SEBI ICDR Regulations.
RCL’s shareholding in these companies, though, is only in the nature of investment and these entities are neither related to RCL nor does
RCL have any significant influence or management control over them. These are purely financial investments with an intention to sell in
near future.
We further confirm that none of the promoters as mentioned above are related to Reliance Group.
Natural person in control of the Promoters
Anil D. Ambani is the promoter of our Promoters.
Anil D. Ambani, age 54 years, is the promoter of our Promoters. He holds a Bachelor’s
Degree in Science from the University of Bombay and a Master’s Degree in Business
Administration from the Wharton School, University of Pennsylvania, USA. Anil D.
Ambani is also the Chairman of Reliance Communications Limited, Reliance Capital
Limited, Reliance Infrastructure Limited and Reliance Power Limited. He is also on
the Board of Reliance Infratel Limited and Reliance Anil Dhirubhai Ambani Group
Limited. He is a member of the Wharton Board of Overseers, the Wharton School,
USA and Executive Board, Indian School of Business (ISB), Hyderabad. Anil D.
Ambani is also the Chairman of the Board of Governors of Dhirubhai Ambani Institute
of Information and Communication Technology, Gandhinagar, Gujarat.
Awards and Achievements
As one of the India’s youngest business leaders, Anil D. Ambani has received national and international acclaim for his vision and
leadership. Certain awards and recognitions include:
1. Ranked 4th
amongst India’s Top 100 CEOs by The Economic Times, India in 2010 and in 2009;
2. Included in its selection of 50 notable business leaders from emerging markets in 2010 by the UK-based Financial Times;
3. Ranked as the third most powerful and influential person of India in its list of 50 such luminaries by India Today magazine in
2009;
4. Also included in a similar list by the US-based Business Week magazine in 2009;
5. Awarded by Light Readings as the Person of the Year – 2008 for outstanding achievements in the communication industry;
6. Voted ‘The Businessman of the Year’ in a poll conducted by The Times of India – TNS, December, 2006;
7. Voted the ‘Best role model’ among business leaders in the biannual Mood of the Nation poll conducted by India Today
magazine, August 2006;
8. Conferred with ‘the CEO of the Year 2004’ award at the Platts Global Energy Awards.
208
OUR GROUP COMPANIES
Unless otherwise stated, none of the companies forming part of Group Companies is a sick company under the meaning of SICA and
none of them are under winding up. Further, except Reliance Broadcast Network Limited, all our Group Companies are unlisted
companies and they have not made any public issue of securities in the preceding three years.
None of our Group Companies, for which an application was made to the Registrar of Companies for striking off the name of the
company during the five years preceding the date of filing this Letter of Offer, have remained defunct.
The Group Companies of our Company are as follows:
Sr. No. Name of the company
1. Adhar Project Management & Consultancy Private Limited
2. Ammolite Holdings Limited
3. Indian Agri Services Private Limited
4. Indian Commodity Exchange Limited
5. QOPPA Trading Private Limited
6. Quant Alternative Asset Management Private Limited
7. Quant Broking Private Limited
8. Quant Capital Advisors Private Limited
9. Quant Capital Finance and Investments Private Limited
10. Quant Capital Private Limited
11. Quant Commodities Private Limited
12. Quant Commodity Broking Private Limited
13. Quant Investment Services Private Limited
14. Quant Securities Private Limited
15. QCAP Trade Private Limited (formerly Valankulam Investments and Trading Private Limited)
16. Reliance Alternative Investments Services Private Limited
17. Reliance Asset Management (Malaysia ) SDN. BHD.;
18. Reliance Asset Management (Mauritius) Limited
19. Reliance Asset Management (Singapore) Pte Limited
20. Reliance Asset Reconstruction Company Limited
21. Reliance Broadcast Network Limited
22. Reliance Capital (Singapore) Pte. Limited
23. Reliance Capital Asset Management (UK) Plc.
24. Reliance Capital Asset Management Limited
25. Reliance Capital Partners
26. Reliance Capital Pension Fund Limited
27. Reliance Capital Trustee Co. Limited
28. Reliance Commodities Limited
29. Reliance Composite Insurance Broking Limited
30. Reliance Consultants (Mauritius) Ltd.
31. Reliance Equity Advisors (India) Limited
32. Reliance Exchangenext Limited
33. Reliance Financial Limited
34. Reliance General Insurance Company Limited
35. Reliance Gilts Limited
36. Reliance Home Finance Limited (formerly Reliance Home Finance Private Limited)
37. Reliance Investment Banking Services Limited
38. Reliance Life Insurance Company Limited
39. Reliance Money Express Limited
40. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private Limited)
41. Reliance Securities Limited
42. Reliance Share & Stock Brokers Private Limited
43. Reliance Spot Exchange Infrastructure Limited
44. Reliance Venture Asset Management Private Limited
45. Reliance Wealth Management Limited
46. Viscount Management Services Limited
209
Sr. No. Name of the company
47. Reliance Capital AIF Trustee Company Private Limited
48. Reliance CWT India Limited
Top five Group Companies (details as at May 31, 2013)
The details of one listed Group Company and the top four Group Companies on basis of turnover are set forth below:
1. Reliance Broadcast Network Limited
Corporate Information
Reliance Broadcast Network Limited (CIN L64200MH2005PLC158355) was incorporated in India, under the Companies Act on
December 27, 2005 as Reliance Unicom Limited obtained the certificate of commencement of business on February 13, 2006. The name
was changed to Big Radio Limited vide a fresh certificate of incorporation consequent upon change of name dated October 6, 2006
issued by the Registrar of Companies. The name of the company was subsequently changed to Reliance Unicom Limited vide a fresh
certificate of incorporation consequent upon change of name dated September 18, 2007 issued by the Registrar of Companies. The name
of the company was again changed to Reliance Media World Limited vide the fresh certificate of incorporation consequent upon change
of name dated July 22, 2009 issued by the registrar. Subsequently the company’s name was changed to Reliance Broadcast Network
Limited vide the fresh certificate of incorporation consequent upon change of name dated June 17, 2010 issued by the registrar of the
companies. Reliance Broadcast Network Limited is a media entertainment conglomerate with play across radio, television, intellectual
properties andtelevision production. It is part of the Reliance Group and specializes in creating and executing integrated media solutions
for brands.
Interest of our Promoter
Reliance Capital Limited and Reliance Land Private Limited hold 19.80% and 48.94% interest, respectively, in Reliance Broadcast
Network Limited as on May 31, 2013.
Financial Information
The brief financial details of Reliance Broadcast Network Limited derived from its audited standalone financial statements for financial
year September 30, 2010 (i.e. April 1, 2010 to September 30, 2010), March 31, 2011 (i.e. October 1, 2010 to March 31, 2011) and
March 31, 2012 (i.e. April 1, 2011 to March 31, 2012) are set forth below:
(` in lakhs, except share data)
Particulars Six month period
ended September 30,
2010(1)
Six month period
ended March 31,
2011(2)
As at and for the
year ended March
31, 2012
As at and for the
year ended March
31, 2013
Equity Capital 3,972.56 3,972.56 3,972.56 3,972.56
Reserves (excluding revaluation
reserves)
20,660.89 19,511.22 17,558.65 13,143.23
Sales & other income 11,050.78 14,082.96 31,475.37 22,737.94
Profit After Tax (2,941.73) (1,149.68) (1,952.57) (2,351.35)
Basic and Diluted EPS (in `) (6.35)* (1.45)* (2.46) (2.96)
Book value (in `) 31.00 29.56 27.10 21.54 (1)
Pursuant to the board resolution dated October 21, 2010, Reliance Broadcast Network Limited closed its books of accounts as of September 30, 2010 and
accordingly the financial year was of six months ending September 30, 2010. (2)
Pursuant to the board resolution dated May 5, 2011, Reliance Broadcast Network Limited closed its books of accounts as of March 31, 2011 and accordingly the
financial year was of six months ending March 31, 2011. * Not annualized. .
Share Price Information
Equity Shares of Reliance Broadcast Network Limited are listed on BSE and NSE.
The monthly high and low of the closing market price of the equity shares of Reliance Broadcast Network Limited having a face value of
`5/- each for the last six months in NSE and BSE is as follows:
210
BSE
Month Monthly High price in ` Monthly Low price in `
January 2013 45.95 37.15
February 2013 40.45 27.80
March 2013 28.90 23.30
April 2013 31.10 24.10
May 2013 32.90 27.70
June 2013 36.35 26.25
The market capitalisation of Reliance Broadcast Network Limited based on the closing price of `36.35/- per equity share on the BSE as
on June 28, 2013 was`28,880.50 lakhs.
NSE
Month Monthly High price in ` Monthly Low price in `
January 2013 46 37.25
February 2013 39.75 27.85
March 2013 29.40 24.00
April 2013 31.05 24.15
May 2013 32.60 27.70
June 2013 36.15 26.40
The market capitalisation of Reliance Broadcast Network Limited based on the closing price of `36.15/- per equity share on the NSE as
on June 28, 2013 was `28,721.60 lakhs.
Changes in capital structure
The Authorised Share Capital of the Company has been altered from `125,00,00,000 (Rupees one hundred twenty five crore) comprising
of 15,00,00,000 (fifteen crore) Equity Shares of `5 (Rupees five) each, and 10,00,00,000 (ten crore) Preference Shares of `5 (Rupees
five) each to `150,00,00,000 (Rupees one hundred fifty crore) comprising of 20,00,00,000 (twenty crore) Equity Shares of `5 (Rupees
five) each, and 10,00,00,000 (ten crore) Preference Shares of `5 (Rupees five) each by way of ordinary resolution passed by the
shareholders at their 8th
AGM held on September 27, 2012.
There have been no changes in the subscribed and issued capital structure of Reliance Broadcast Network Limited during the preceding
six months.
Reliance Broadcast Network Limited has made no other public or rights issue in the last three years.
2. Reliance Life Insurance Company Limited
Corporate Information
Reliance Life Insurance Company Limited was incorporated in India, under the Companies Act on May 14, 2001. Reliance Life
Insurance Company Limited has been granted a license by Insurance Regulatory and Development Authority on January 03, 2002 for
carrying life insurance, health insurance and annuity business.
Interest of our Promoter
Reliance Capital Limited holds 47.78% interest in Reliance Life Insurance Company Limited.
Financial Information
The brief financial details of Reliance Life Insurance Company Limited derived from its audited standalone financial statements for
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financial years 2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital 1,16,584.49 1,19,632.35 1,19,632.35
Reserves (excluding revaluation reserves) (87,285.30) (29,044.23) 3,512.46
Sales & Other Income 6,57,114,64 5,49,761.92 4,04,539.33
Profit After Tax (12,929.10) 37,257.13 38,041.72
EPS (in `) (1.11) 3.16 3.18
Diluted EPS (in `) (1.11) 3.14 3.17
Net asset value per share (in `) 2.51 7.57 10.29
3. Reliance Capital Asset Management Limited
Corporate Information
Reliance Capital Asset Management Limited was incorporated in India, under the Companies Act on February 24, 1995. Reliance
Capital Asset Management Limited is engaged in the business of providing investment management and advisory services to mutual
funds. Reliance Capital Asset Management Limited is the asset management company for Reliance Mutual Fund.
Reliance Capital Asset Management Limited is also engaged in the business of providing portfolio management services.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Capital Asset Management Limited.
Financial Information
The brief financial details of Reliance Capital Asset Management Limited derived from its audited standalone financial statements for
financial years 2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital 1,051.00 1,051.00 1,127.00
Reserves (excluding revaluation reserves) 1,10,159.08 119,025.39 1,20,907.02
Sales & Other Income 69,925.10 64,229.00 71,267.41
Profit After Tax 26,127.34 27,610.90 19,753.82
Basic EPS/ (in `) 248.59 262.71 177.93
Diluted EPS (in `) 248.04 260.23 177.00
Net asset value per share (in `) 1,058.14 1,142.50 1,099.24
4. Reliance General Insurance Company Limited
Corporate Information
Reliance General Insurance Company Limited was incorporated in India, under the Companies Act on August 17, 2000. Reliance
General Insurance Company Limited is engaged in the business of providing general insurance services.
Interest of our Promoter
Reliance Capital Limited holds 96.50% interest in Reliance General Insurance Company Limited.
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Financial Information
The brief financial details of Reliance General Insurance Company Limited derived from its audited unconsolidated financial statements
for financial years 2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital 11,667.30 12,119.33 12,277.50
Reserves (excluding revaluation reserves) 50,489.61 60,017.64 66,082.55
Sales & Other Income 1,46,046.49 2,19,178.68 2,41,636.76
Profit After Tax (31,160.17) (34,319.93) (9,276.92)
Basic and Diluted EPS (in `) (26.80) (29.24) (7.61)
Net asset value per share (in `) 53.27 59.52 63.82
5. Reliance Securities Limited
Corporate Information
Reliance Securities Limited was incorporated in India, under the Companies Act on June 17, 2005. Reliance Securities Limited is
engaged in the business of securities brokering and is a depository participant of CDSL.
Interest of our Promoter
Reliance Capital Limited holds 99.60% interest in Reliance Securities Limited.
Financial Information
The brief financial details of Reliance Securities Limited derived from its audited unconsolidated financial statements for financial years
2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital 2,500.00 2,500.00 2,500.00
Reserves (excluding revaluation reserves) 2,774.82 3,374.76 2,639.50
Sales & Other Income 15,378.58 12,026.37 11,452.19
Profit After Tax 710.21 599.94 (735.26)
Basic and Diluted EPS (in `)* (4.18) (3.41) (8.75)
Net asset value per share (in `) 21.10 23.50 20.56 * After providing for dividend on cumulative redeemable preference shares
Group Company with negative net worth
The details of the Group Company with negative net worth as at March 31, 2013 are as follows:
1. Indian Commodity Exchange Limited
Corporate Information
Indian Commodity Exchange Limited was incorporated on August 18, 2008 in India, under the Companies Act. Indian Commodity
Exchange Limited is engaged in the business of commodity spot exchange.
Interest of our Promoter
Reliance Capital Limited holds 26.00% interest in Indian Commodity Exchange Limited.
213
Financial Information
The brief financial details of Indian Commodity Exchange Limited derived from its audited standalone financial statements for financial
years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
2. Reliance Equity Advisors (India) Limited
Corporate Information
Reliance Equity Advisors (India) Limited was incorporated in India, under the Companies Act on May 4, 2005. Reliance Equity
Advisors (India) Limited is engaged in the business of providing investment advisory services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Equity Advisors (India) Limited.
Financial Information The brief financial details of Reliance Equity Advisors (India) Limited derived from its audited standalone financial statements for
financial years 2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital 5.00 5.00 5.00
Reserves (excluding revaluation reserves) (1,526.55) (1,446.96) (1,318.98)
Sales & Other Income 2,315.81 2,073.45 1,929.67
Profit After Tax 226.44 79.58 127.97
Basic and Diluted EPS (in `) 452.88 159.16 255.95
Net asset value per share (in `) (3,043.10) (2,883.92) (2,627.98)
3. Reliance Spot Exchange Infrastructure Limited
Corporate Information
Reliance Spot Exchange Infrastructure Limited was incorporated in India, under the Companies Act on January 12, 2009. Reliance Spot
Exchange Infrastructure Limited is engaged in the business of commodity spot exchange.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Spot Exchange Infrastructure Limited.
Particulars As at and for the financial
year 2010
As at and for the financial
year 2011
As at and for the financial year
2012
Equity Capital 10,000 10,000 10,000
Reserves & Surplus (excluding
revaluation reserves)
(671) (3,793) (6,349)
Sales & Other Income 1,121 1,396 1,066
Profit After Tax (554) (3,122) (2,556)
Basic and Diluted EPS (0.37) (1.56) (1.28)
Net asset value per share 4.66 3.10 1.83
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Financial Information
The brief financial details of Reliance Spot Exchange Infrastructure Limited derived from its audited standalone financial statements for
financial years 2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital 1,765.00 1,765.00 1,765.00
Reserves (excluding revaluation reserves) (1,524.72) (2,073.35) (2,201.80)
Sales & Other Income 19.91 56.25 54.27
Profit After Tax (648.48) (550.98) (128.45)
Basic and Diluted EPS (in `) (42.98) (3.12) (0.73)
Net asset value per share (in `) 1.36 (1.75) (2.48)
4. Viscount Management Services Limited
Corporate Information
Viscount Management Services Limited was incorporated in India, under the Companies Act on May 8, 1995. It is engaged in the
business of providing consultancy services various fields including, management, finance and commerce to any person or corporation.
Interest of the Promoter
Reliance Capital Limited holds 17.74% and Reliance Land Private Limited holds 46.27% interest in Viscount Management Services
Limited.
Financial Information
The brief financial details of Viscount Management Services Limited derived from its audited standalone financial statements for
financial years 2010, 2011 and 2012 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2010
As at and for the financial
year 2011
As at and for the financial
year 2012
Equity Capital 6.00 6.00 23.00
Reserves (excluding revaluation reserves) 15,507.67 12,904.1 (2,493.96)
Sales & Other Income 0.00 1.15 0.00
Profit After Tax (7,400.29) (7,144.15) (7,996.66)
Basic and Diluted EPS (in `) (12,333.81) (11,906.91) (5,024.07)
Net asset value per share (in `) 25,856.12 21,516.83 (1,074.33)
5. Indian Agri Services Private Limited
Corporate Information
Indian Agri Services Private Limited was incorporated in India, under the Companies Act on April 29, 2011. Indian Agri Services
Private Limited is engaged in the business and services of handling, delivering commodities / things / produce from gate level to
consumers.
Interest of our Promoter
Reliance Capital Limited holds 100% interest in Indian Agri Services Private Limited.
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Financial Information
The brief financial details of Indian Agri Services Private Limited derived from its audited standalone financial statements for financial
years 2011, 2012 and 2013 are set forth below:
(` in lakhs, except share data)
Particulars
As at and for the financial
year 2011
As at and for the financial
year 2012
As at and for the financial
year 2013
Equity Capital NA 3.00 12.00
Reserves (excluding revaluation reserves) NA (6.60) (6.64)
Sales & Other Income NA 288.08 3.17
Profit After Tax NA (6.60) (0.04)
EPS/ Diluted EPS (in `) NA (21.99) (0.04)
Net asset value per share (in `) NA (12.00) 4.46
Other Group Companies
Details of other Group Companies are as follows:
1. Adhar Project Management & Consultancy Private Limited
Corporate Information
Adhar Project Management & Consultancy Private Limited was incorporated in India, under the Companies Act on June 11, 2008. Adhar
Project Management & Consultancy Private Limited is engaged in the business of providing management consultancy services.
Interest of our Promoter
Reliance Land Private Limited holds 100.00% interest in Adhar Project Management & Consultancy Private Limited.
2. Ammolite Holdings Limited
Corporate Information
Ammolite Holdings Limited was incorporated in Jersey, UK, under the relevant applicable laws on August 26, 2005. Ammolite Holdings
Limited is engaged in the business of managerial, technical, chartering, and agency services.
Interest of our Promoter
Reliance Capital Limited and Reliance Land Private Limited each holds 50.00% interest in Ammolite Holdings Limited.
3. QOPPA Trading Private Limited
Corporate Information
QOPPA Trading Private Limited was incorporated in India, under the Companies Act on February 28, 2011. QOPPA Trading Private
Limited is engaged in the business of investment and trading activities.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in QOPPA Trading Private Limited.
4. Quant Broking Private Limited
Corporate Information
Quant Broking Private Limited was incorporated in India, under the Companies Act on December 4, 2007. Quant Broking Private
216
Limited is engaged in the business of broking.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Broking Private Limited.
5. Quant Capital Advisors Private Limited
Corporate Information
Quant Capital Advisors Private Limited was incorporated in India, under the Companies Act on March 9, 2009. Quant Capital Advisors
Private Limited is engaged in the business of providing mutual fund advisory services.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Capital Advisors Private Limited.
6. Quant Capital Finance and Investments Private Limited
Corporate Information
Quant Capital Finance and Investments Private Limited was incorporated in India, under the Companies Act on December 31, 1981.
Quant Capital Finance and Investments Private Limited is a non banking financial institution.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Capital Finance and Investments Private Limited.
7. Quant Capital Private Limited
Corporate Information
Quant Capital Private Limited was incorporated in India, under the Companies Act on December 4, 2007. Quant Capital Private Limited
is engaged in the business of providing investment and financial services.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Capital Private Limited.
8. Quant Commodities Private Limited
Corporate Information
Quant Commodities Private Limited was incorporated in India, under the Companies Act on March 9, 2009. Quant Commodities Private
Limited is engaged in the business of commodity exchange.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Commodities Private Limited.
9. Quant Commodity Broking Private Limited
Corporate Information
Quant Commodity Broking Private Limited was incorporated in India, under the Companies Act on March 9, 2009. Quant Commodity
Broking Private Limited is engaged in the business of commodity broking.
217
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Commodity Broking Private Limited.
10. Quant Investment Services Private Limited
Corporate Information
Quant Investment Services Private Limited was incorporated in India, under the Companies Act on March 18, 2011. Quant Investment
Services Private Limited is engaged in the business of providing advisory services.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Investment Services Private Limited.
11. Quant Securities Private Limited
Corporate Information
Quant Securities Private Limited was incorporated in India, under the Companies Act on December 4, 2007. Quant Securities Private
Limited is engaged in the business of stock broking.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Securities Private Limited.
12. QCAP Trade Private Limited (formerly Valankulam Investments and Trading Private Limited)
Corporate Information
QCAP Trade Private Limited was incorporated in India, under the Companies Act on March 1, 2011. QCAP Trade Private Limited is
engaged in the business of investment and trading activities.
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in QCAP Trade Private Limited.
13. Quant Alternative Asset Management Private Limited
Corporate Information
Quant Alternative Asset Management Private Limited was incorporated in India, under the Companies Act on October 12, 2012. Quant
Alternative Asset Management Private Limited is engaged in the business of Investment and Asset Management activities
Interest of our Promoter
Reliance Capital Limited holds 74.00% interest in Quant Alternative Asset Management Private Limited.
14. Reliance Alternative Investments Services Private Limited
Corporate Information
Reliance Alternative Investments Services Private Limited was incorporated in India, under the Companies Act on September 26, 2008.
Reliance Alternative Investments Services Private Limited is engaged in the business of providing services of a trustee.
218
Interest of our Promoter
Reliance Capital Limited holds 100% interest in Reliance Alternative Investments Services Private Limited.
15. Reliance Asset Management (Malaysia) SDN. BHD.
Corporate Information
Reliance Asset Management (Malaysia) SDN. BHD. was incorporated in Malaysia, under the applicable Malaysian law on February 20,
2009. Reliance Asset Management (Malaysia) SDN. BHD. is engaged in the business of Islamic fund management.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Malaysia) SDN. BHD.
16. Reliance Asset Management (Mauritius) Limited
Corporate Information
Reliance Asset Management (Mauritius) Limited was incorporated in Mauritius, under the applicable Mauritius law on December 27,
2004. Reliance Asset Management (Mauritius) Limited is engaged in the business of providing investment management and advisory
services to collective investment schemes.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Mauritius) Limited.
17. Reliance Asset Management (Singapore) Pte Limited
Corporate Information
Reliance Asset Management (Singapore) Pte Limited was incorporated in Singapore, under the applicable Singapore law on August 22,
2005. Reliance Asset Management (Singapore) Pte Limited is engaged in the business of providing fund management services.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Singapore) Pte Limited.
18. Reliance Asset Reconstruction Company Limited
Corporate Information
Reliance Asset Reconstruction Company Limited was incorporated in India, under the Companies Act on April 17, 2006. Reliance Asset
Reconstruction Company Limited is engaged in the business of asset reconstruction and securitization.
Interest of our Promoter
Reliance Capital Limited holds 49% interest in Reliance Asset Reconstruction Company Limited.
19. Reliance Capital (Singapore) Pte. Limited
Corporate Information
Reliance Capital (Singapore) Pte. Limited is a private company with limited liability, incorporated in Singapore, on 7 August 2008.
Reliance Capital (Singapore) Pte. Limited is registered with the Accounting and Corporate Regulatory Authority with registration
number 200815527C. Reliance Capital (Singapore) Pte. Limited’s objective is to carry on or undertake any business or activity
(including but not limited to investment holding company).
219
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Capital (Singapore) Pte. Limited.
20. Reliance Capital Asset Management (UK) Plc.
Corporate Information
Reliance Capital Asset Management (UK) Plc. was incorporated in UK, under the applicable UK law on May 23, 2007. Reliance Capital
Asset Management (UK) Plc. is engaged in the business of providing financial advisory services.
Interest of our Promoter
Reliance Capital Limited holds 65.23% interest in Reliance Capital Asset Management (UK) Plc.
21. Reliance Capital Partners
Corporate Information
Reliance Capital Partners is a partnership firm constituted in India, under the Indian Partnership Act, 1932 on April 19, 2006. Reliance
Capital Partners is engaged in the business of trading in various commodities and articles other than securities.
Interest of our Promoter
Reliance Capital Partners is a partnership firm. Reliance Capital Limited and Reliance Land Private Limited are its partners.
22. Reliance Capital Pension Fund Limited
Corporate Information
Reliance Capital Pension Fund Limited was incorporated in India, under the Companies Act on March 31, 2009. Reliance Capital
Pension Fund Limited is engaged in the business of managing pension funds and undertaking related activities.
Interest of our Promoter
Reliance Capital Limited holds 70.45% interest in Reliance Capital Pension Fund Limited.
23. Reliance Capital Trustee Co. Limited
Corporate Information
Reliance Capital Trustee Co. Limited was incorporated in India, under the Companies Act on March 1, 1995. Reliance Capital Trustee
Co. Limited is engaged in the business of providing trusteeship services and act as administrator of mutual funds. Reliance Capital
Trustee Co. Limited is the trustee for Reliance Mutual Fund.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Capital Trustee Co. Limited.
24. Reliance Commodities Limited
Corporate Information
Reliance Commodities Limited was incorporated in India, under the Companies Act on July 8, 2005. Reliance Commodities Limited is
engaged in the business of Commodities Broking.
220
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Commodities Limited.
25. Reliance Composite Insurance Broking Limited
Corporate Information
Reliance Composite Insurance Broking Limited was incorporated in India, under the Companies Act on October 24, 1994. Reliance
Composite Insurance Broking Limited is engaged in the business of insurance broking.
Interest of our Promoter
Reliance Capital Limited holds 99.60% in Reliance Securities Limited.
Reliance Securities Limited holds 51.79% interest in Reliance Composite Insurance Broking Limited.
26. Reliance Consultants (Mauritius) Ltd.
Corporate Information
Reliance Consultants (Mauritius) Ltd. was incorporated in Mauritius, under the applicable Mauritius law on March 10, 2008. Reliance
Consultants (Mauritius) Ltd. is engaged in the business of providing investment advisory services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Consultants (Mauritius) Ltd.
27. Reliance Exchangenext Limited
Corporate Information
Reliance Exchangenext Limited was incorporated in India, under the Companies Act on July 7, 2000. Reliance Exchangenext Limited is
engaged in the business of forming and promoting stock exchanges.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Exchangenext Limited.
28. Reliance Financial Limited
Corporate Information
Reliance Financial Limited was incorporated in India, under the Companies Act on August 26, 2005. Reliance Financial Limited is
registered with RBI as a Non Banking Financial Company. Reliance Financial Limited is engaged in the business of providing financial
services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Financial Limited.
29. Reliance Gilts Limited
Corporate Information
Reliance Gilts Limited was incorporated in India, under the Companies Act on August 17, 2000. Reliance Gilts Limited is engaged in the
business of dealing in government securities.
221
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Gilts Limited.
30. Reliance Home Finance Limited
Corporate Information
Reliance Home Finance Limited was incorporated in India, under the Companies Act on June 5, 2008. Reliance Home Finance Limited
is engaged in the business of providing home finance and other allied services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Home Finance Limited.
31. Reliance Financial Advisory Services Limited (formerly Reliance Investment Banking Services Limited)
Corporate Information
Reliance Financial Advisory Services Limited was incorporated in India as Reliance Investment Banking Services Limited, under the
Companies Act on May 22, 2008. Reliance Investment Banking Services Limited is engaged in the business of providing investment /
merchant banking services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Financial Advisory Services Limited.
32. Reliance Money Express Limited
Corporate Information
Reliance Money Express Limited was incorporated in India, under the Companies Act on November 28, 2002. Reliance Money Express
Limited is registered with RBI for providing services as a full –fledged money changer (FFMC) and money transfer services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Money Express Limited.
33. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private Limited)
Corporate Information
Reliance Money Precious Metals Private Limited was incorporated in India, under the Companies Act on October 5, 2006.
Reliance Money Precious Metals Private Limited is engaged in the business of offering Gold Accumulation Plans to retail investors.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Money Precious Metals Private Limited.
34. Reliance Share & Stock Brokers Private Limited
Corporate Information
Reliance Share & Stock Brokers Private Limited was incorporated in India, under the Companies Act on November 26, 1993. Reliance
Share & Stock Brokers Private Limited is engaged in the business of share and stock broking services.
222
Interest of our Promoter
Reliance Capital Limited and Reliance Land Private Limited each hold 50.00% interest in Reliance Share & Stock Brokers Private
Limited.
35. Reliance Venture Asset Management Private Limited
Corporate Information
Reliance Venture Asset Management Private Limited was incorporated in India, under the Companies Act on October 6, 2006. Reliance
Venture Asset Management Private Limited is engaged in the business of providing venture capital services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Venture Asset Management Private Limited.
36. Reliance Wealth Management Limited
Corporate Information
Reliance Wealth Management Limited was incorporated in India, under the Companies Act on January 1, 2009. Reliance Wealth
Management Limited is engaged in the business of providing portfolio / wealth management services.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Wealth Management Limited.
37. Reliance Capital AIF Trustee Private Limited
Corporate Information
Reliance Capital AIF Trustee Private Limited was incorporated in India, under the Companies Act on September 21, 2006. Reliance
Capital AIF Trustee Private Limited is engaged in the business to act as trustee, settlor, administrator, representative or nominee of or for
any investment funds, alternative investment funds.
Interest of our Promoter
Reliance Capital Limited holds 100.00% interest in Reliance Capital AIF Trustee Private Limited.
38. Reliance CWT India Limited
Corporate Information
Reliance CWT India Limited was incorporated on January 12, 2009, in India, under the Companies Act. Reliance CWT India Limited is
engaged in the business of managing commodity exchange deliveries for spot and derivatives trading.
Interest of our Promoter
Reliance Capital Limited holds 18% interest in Reliance CWT India Limited
Common Pursuits amongst our Group Companies with our Company
There are no common pursuits amongst any of our Group Companies and our Company.
Related Business Transactions within our Group Companies and Significance on the Financial Performance of our Company
For details, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.
223
Sale/ Purchase between Group Companies
Our Company does not have any sales/purchase arising out of any transaction with any group company exceeding aggregate 10% of total
sales or purchase of our Company during the financial years 2012, 2011, 2010, 2009 and 2008.
COMPANIES WITH WHICH OUR PROMOTERS HAVE DISASSOCIATED IN THE LAST THREE YEARS
Except as disclosed below, our Promoters have not disassociated from any company during the preceding three years from the date of
this Letter of Offer:
Reliance Capital Limited has disassociated from Medybiz Private Limited, Net Logistics Private Limited, Reliance Capital Services
Private Limited And Reliance Infrastructure Finance Private Limited as a result of sale of shares held by it in these companies. Reliance
Commercial Finance Private Limited, Viscount Management Services (Alpha) Limited , Emerging Money Mall Limited and Reliance
Equities International Private Limited have been amalgamated with Reliance Capital Limited. Further, Reliance Capital Infrastructure
Partners has been dissolved. Accordingly Reliance Capital Limited has ceased to be a partner.
224
DIVIDEND POLICY
The declaration and payment of dividends will be recommended by our Board of Directors and approved by the shareholders of our
Company, at their discretion, subject to the provisions of the Articles of Association and the Companies Act. The dividend, if any, will
depend on a number of factors, including but not limited to the future expansion plans and capital requirements, profit earned during the
financial year, liquidity and applicable taxes including dividend distribution tax payable by our Company.
Our company has not paid any dividend on the Equity Shares for financial years 2010, 2011 and 2012.
F-1
SECTION V: FINANCIAL STATEMENTS
Sr. No. Particulars Pg No.
1. Audited restated consolidated financial statements as of and for the six months period
ended March 31, 2013, as of and for the eighteen months period ended September 30,
2012, as of and for the year ended March 31, 2011, as of and for the year ended March
31, 2010, as of and for the year ended March 31, 2009, as of and for the nine months
period ended March 31, 2008.
F-2 – F-146
2. Audited restated standalone financial statements as of and for the six months period
ended March 31, 2013, as of and for the eighteen months period ended September 30,
2012, as of and for the year ended March 31, 2011, as of and for the year ended March
31, 2010, as of and for the year ended March 31, 2009, as of and for the nine months
period ended March 31, 2008.
F-146 – F-260
3. Pro Forma Financials F-261 – F-264
4. Statement of capitalisation post issue F-265 – F-267
F-2
The Board of Directors
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
MUMBAI 400 065
July 3, 2013
Dear Sirs,
1. We have examined the attached restated summary consolidated financial information of
Reliance MediaWorks Limited („RMWL‟ or „the Company‟ or „the Parent Company‟) and
its subsidiaries, joint ventures and associate / s (together referred to as „the Group‟), as
approved by the Board of Directors of the Company, prepared in terms of the requirements
of Paragraph B, Part II of Schedule II to the Companies Act, 1956 ('the Act'), the Securities
and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations
2009, as amended to date, to the extent applicable („SEBI Regulations‟), the Guidance note
on „Reports in Company Prospectus (Revised)‟ issued by the Institute of Chartered
Accountants of India („ICAI‟), to the extent applicable („Guidance Note‟), and in terms of
our engagement agreed upon with you in accordance with our engagement letter dated
July 3, 2013 in connection with the proposed Issue of Equity Shares of the Company on a
rights basis.
2. We have examined the attached Summary Statement of Assets and Liabilities, as restated,
of the Group as at March 31, 2013, September 30, 2012, March 31, 2011, March 31, 2010,
March 31, 2009 and March 31, 2008, the attached Summary Statement of Profit and Loss,
as restated, of the Group for the six months ended March 31, 2013, eighteen months period
ended September 30, 2012, year ended March 31, 2011, year ended March 31, 2010, year
ended March 31, 2009 and nine months ended March 31, 2008 and the attached Summary
Statement of Cash Flow, as restated, of the Group for the six months ended
March 31, 2013, eighteen months period ended September 30, 2012, year ended
March 31, 2011, year ended March 31, 2010, year ended March 31, 2009 and nine months
ended March 31, 2008, as set out in Annexure I, Annexure II and Annexure III
respectively, together referred to hereinafter as the „Restated Summary Statements of the
Group‟. These Restated Summary Statements of the Group have been prepared by the
management of the Company from the audited condensed consolidated financial
statements for the six months ended March 31, 2013 which have been approved by the
Board of Directors and from the audited consolidated financial statements for the eighteen
months period ended September 30, 2012 for the year ended March 31, 2011, year ended
March 31, 2010, year ended March 31, 2009 and nine months ended March 31, 2008,
being the last five financial years / periods for which the consolidated accounts of the
Group have been made up, and have been approved by the Board of Directors of the
Company for the respective years and approved by the members of the Company. The
consolidated financial statements of the Company as at and for the year ended
March 31, 2009 and nine months ended March 31, 2008 have been audited by one of the
joint auditors, B S R & Co., Chartered Accountants. The condensed consolidated financial
statement as at and for the six month ended March 31, 2013, consolidated financial
statements for the eighteen months ended September 30, 2012 and the financial statements
as at and for the year ended March 31, 2011 and as at and for the year ended March
31, 2010 have been audited by us.
F - 3
a. In the consolidated financial statements for the nine months ended March 31, 2008, the
joint auditors, B S R & Co., Chartered Accountants, have relied on reports of other
auditors for subsidiaries, associate and certain joint ventures not audited by them, whose
financial statements reflect the Group‟s share of total assets of ` 4,200.20 lakhs as at
March 31, 2008 and the Group‟s share of total revenues of ` 3,490.00 lakhs and net cash
inflows of ` 3,256.30 lakhs for the nine months ended March 31, 2008.
b. In the consolidated financial statements for the year ended March 31, 2009, the joint
auditors, B S R & Co., Chartered Accountants, have relied on reports of other auditors for
subsidiaries, associate and certain joint ventures not audited by them, whose financial
statements reflect the Group‟s share of total assets of ` 40,048.70 lakhs as at March
31, 2009 and the Group‟s share of total revenues of ` 20,003.80 lakhs and net cash inflows
of ` 1,323.60 lakhs for the year ended March 31, 2009.
c. In the consolidated financial statements for the year ended March 31, 2010:
i) the financial statements of Swanston Multiplex Cinemas Private Limited, a joint
venture has been audited by one of the joint auditors, B S R & Co., Chartered
Accountants, whose financial statements reflect Group‟s share of total assets of
` 937.60 lakhs as at March 31, 2010, Group‟s share of total revenues of ` 542.10 lakhs
and Group‟s share of net cash inflows aggregating ` 3.20 lakhs for the year ended on
that date;
ii) the financial statements of Adlabs Distributors and Exhibitors Limited, a subsidiary
has been audited by one of the joint auditors, Chaturvedi & Shah Chartered
Accountants, whose financial statements reflect Group‟s share of total assets of
` 691.40 lakhs as at March 31, 2010, Group‟s share of total revenues of ` 173.50 lakhs
and Group‟s share of net cash inflows aggregating ` 43.80 lakhs for the year ended on
that date;
iii) we have relied on reports of other auditors for certain subsidiaries, associate and
certain joint ventures not audited by us, whose financial statements reflect the
Group‟s share of total assets of ` 63,844.80 lakhs as at March 31, 2010 and the
Group‟s share of total revenues of ` 25,476.10 lakhs and Group‟s share of net cash
outflows aggregating ` 35.60 lakhs for the year ended on that date.
d. In the consolidated financial statements for the year ended March 31, 2011:
i) the financial statements of Swanston Multiplex Cinemas Private Limited a joint
venture has been audited by one of the joint auditors, B S R & Co., Chartered
Accountants, whose financial statements reflect Group‟s share of total assets of
` 838.50 lakhs as at March 31, 2011, Group‟s share of total revenues of ` 589.50 lakhs
and net cash outflows aggregating ` 46.70 lakhs for the year ended on that date;
ii) we have relied on reports of other auditors for certain subsidiaries and certain joint
ventures not audited by us, whose financial statements reflect the Group‟s share of
total assets of ` 70,293.40 lakhs as at March 31, 2011 and the Group‟s share of total
revenues of ` 32,236.50 lakhs and Group‟s share of net cash outflows aggregating
` 796.19 lakhs for the year ended on that date.
e. In the consolidated financial statements for the eighteen months ended
September 30, 2012, we have relied on reports of other auditors for certain subsidiaries
and certain joint ventures not audited by us, whose financial statements reflect the
Group‟s share of total assets of ` 58,143.20 lakhs as at September 30, 2012 and the
Group‟s share of total revenues of ` 45,324.60 lakhs and Group‟s share of net cash
inflows aggregating ` 1,494.80 lakhs for the eighteen months ended on that date.
F - 4
f. In the consolidated financial statements for the six months ended March 31, 2013, we
have relied on reports of other auditors for certain subsidiaries and certain joint ventures
not audited by us, whose financial statements reflect the Group‟s share of total assets of ` 54,710.28 lakhs as at March 31, 2013 and the Group‟s share of total revenues of ` 12,661.40 lakhs and Group‟s share of net cash outflows aggregating ` 854.70 lakhs for the
six months ended on that date.
3. Without qualifying our report, we draw attention to the following:
a) As set out in paragraph (a) (i) of Note D of Annexure IV to this report, the Group‟s net
worth is fully eroded and has a negative net worth of ` 92,707.78 Lakh (as restated), the
Group has incurred a loss of ` 34,044.77 lakh (as restated) for the period October 1, 2012
to March 31, 2013, indicating the existence of uncertainty that may cast doubt about the
Group‟s ability to continue as a going concern. Considering the matters set out in the said
note, this Restated Summary Statement, of the Group is prepared on a going concern
basis.
b) As set out in paragraph (b) (i) of Note D of Annexure IV to this report, the Group‟s net
worth is fully eroded and has a negative net worth of ` 58,105.02 Lakh (as restated), the
Group has incurred a loss of ` 91,016.62 lakh (as restated) for the period April 1, 2011 to
September 30, 2012, indicating the existence of uncertainty that may cast doubt about the
Group‟s ability to continue as a going concern. Considering the matters set out in the said
note, this Restated Summary Statement, of the Group is prepared on a going concern
basis.
c) As set out in paragraph (e)(i) of Note D of Annexure IV, during the period ended March
31, 2008, the Hon‟ble High Court of Judicature at Bombay vide its order dated March
7, 2008 sanctioned the Modified Composite Scheme of Amalgamation and Arrangement
(„Modified Scheme‟) for modification of the Composite Scheme. The Modified Scheme
was filed with the ROC on March 31, 2008. The Modified Scheme inter-alia provides
that the net results of the transactions related to the radio business of the Company for the
period from March 31, 2006 to the Effective Date (i.e. the date of filing the Modified
Scheme with the ROC, March 31, 2008) be adjusted in the General reserve account of the
Company. The Composite Scheme was given effect to in accordance with the accounting
treatment prescribed by the said Scheme in the consolidated financial statements for the
fifteen months ended June 30, 2007 and, only the modifications to the original scheme
were have been given effect to in the consolidated financial statements for the nine
months ended March 31, 2008.
d) As set out in paragraph (d)(ii) of Note D and point 2 of paragraph IV of Note E of
Annexure IV, during the year ended March 31, 2009, the Hon‟ble High Court of
Judicature at Mumbai vide its order dated May 8, 2009 sanctioned the Scheme of
Amalgamation of the Company with its wholly owned subsidiaries Adlabs Multiplex and
Theatres Limited, Adlabs Multiplex Limited, Rave Entertainment Private Limited and
Mahimna Entertainment Private Limited („Amalgamation Scheme‟), under sections 391
to 394 of the Act. Pursuant to the said Amalgamation Scheme, the Company has
recorded an increase in value of its assets aggregating ` 17,890.10 lakhs by crediting the
Capital reserve. Further, the Company has recorded an adjustment for diminution in
value of its assets (production and distribution rights, fixed assets, investments, debtors
and loans and advances) aggregating ` 15,669.70 lakhs by debiting the same to Capital
reserve instead of the profit and loss account, had the Company debited the profit and loss
account, the loss before tax for the year would be higher by the said amount.
F - 5
4. Effective April 1, 2011, revised Schedule VI notified vide Notification No. S.O. 447(E), dated
February 28, 2011 (as amended by Notification No. 2/6/2008-CL-V, dated 30-3-2011) and
General Circular No. 62/2011 F No. 17/244/2011-CL-V, dated September 5, 2011 under the
Act has become applicable to the Group for preparation and presentation of these Summary
financial statements, as restated of the Group. Accordingly, the Group has prepared these
Restated Summary Statements as per revised Schedule VI. The adoption of revised Schedule
VI does not impact recognition and measurement principles followed for preparation of
annual financial statements, however it introduces additional new disclosures, including
compulsory classification of all assets and liabilities into current and non-current.
Further, we draw attention to the fact that for the purposes of these Restated Summary
Statements, due to practical difficulties, restatement/ reclassification of the summary financial
information as per revised Schedule VI, pertaining to certain subsidiaries, associate/s and
certain joint ventures, the said restatement/ reclassification for the year / period ended March
31, 2010, March 31, 2009 and nine months ended March 31, 2008 has not been audited by the
respective auditor. Such financial information, as approved by the Board of Directors of the
Company and certified by a Proprietor / firm of chartered accountant have been furnished to
us by the management of the Company and our report in so far as it relates to the amounts
included in respect of such subsidiaries, associate/s and joint venture is based solely on such
certified summary financial information.
5. In accordance with the requirements of Paragraph B, Part II of Schedule II of the Act, the
SEBI Regulations, the Guidance Note and in accordance with the terms of our engagement
agreed with you, and read with paragraphs 2 and 4 above and with regards to adjustments for
matters of emphasis in the Auditors‟ report as stated in paragraph 3 above, we confirm/
further report that the Restated Consolidated Summary Statements examined by us and as set
out in Annexure I, Annexure II and Annexure III to this report are prepared after making
adjustments and regrouping as in our opinion were appropriate and as are more fully
described in the significant accounting policies and notes to the Restated Summary
Statements of the Group enclosed as Annexure IV to this report.
6. Based on the above, read with the matters stated in paragraph 2 and 4 above and with regards
to adjustments for matters of emphasis in the Auditors‟ report as stated in paragraph 3 above,
we are of the opinion that the Restated Summary Statements of the Group have been made
after incorporating:
i. Adjustments for the changes in accounting policies adopted by the Company
retrospectively in respective financial years / periods to reflect the same accounting
treatment as per changed accounting policy for all the reporting periods;
ii. Adjustments for material amounts in the respective financial years/ periods to which they
relate;
iii. Adjustments for qualifications, as applicable in the Auditors‟ reports in the respective
years/ periods to which they relate; and
iv. There are no extraordinary items that need to be disclosed separately in the Restated
Summary Statements of the Group.
7. We have also examined the following other restated financial information set out in the
Annexures prepared by the management and approved by the Board of Directors, relating to
the Restated Summary Statements of the Group and annexed to this report.
a) Statement of share capital of the Group, enclosed as Annexure V
b) Summary statement of reserves and surplus of the Group, enclosed as Annexure VI
F - 6
c) Statement of non-current investment, deferred tax assets, long-term loans and advances
and other non-current assets, of the Group, enclosed as Annexure VII
d) Statement of current assets of the Group, enclosed as Annexure VIII
e) Statement of non-current liabilities of the Group, enclosed as Annexure IX
f) Statement of current liabilities of the Group, enclosed as Annexure X
g) Statement of revenue of the Group, enclosed as Annexure XI
h) Statement of other income of the Group, enclosed as Annexure XII
i) Statement of contingent liabilities and commitments of the Group, enclosed as Annexure
XIII
j) Statement of accounting ratios of the Group, enclosed as Annexure XIV
k) Statement of principal terms and conditions of long-term borrowings and short-term
borrowings of the Group, enclosed as Annexure XV
l) Statement of capitalization of the Group, as at March 31, 2013, enclosed as Annexure
XVI
m) Statement of dividend paid/ proposed of the Group, enclosed as Annexure XVII
n) Statement of related party disclosures of the Group, enclosed as Annexure XVIII
o) Statement of Segment Information of the Group, enclosed in Annexure XIX.
8. In our opinion, the Restated Summary Statements, as restated of the Group contained in Annexure
I, Annexure II and Annexure III to this report, read with the significant accounting policies and
notes disclosed in Annexure IV and other financial information contained in Annexure V to
Annexure XIX of this report and read with paragraphs 2, 3 and 4 above and note 2 and 3 disclosed
in Annexure VII and Annexure VIII respectively, have been prepared in accordance with
Paragraph B, Part II of Schedule II of the Act and the SEBI Regulations.
9. The report should not in any way be construed as a reissuance or redating of any of the previous
audit reports issued by us or by the other firm of Chartered Accountants, nor should this report be
construed as a new opinion on any consolidated financial statements referred to herein.
10. We have no responsibility to update our report for events and circumstances occurring after the
date of the report.
11. This report is intended solely for use of the management and for inclusion in the Offer Document
in connection with the proposed issue of equity shares of the Company on a rights basis, and is not
to be used, referred to or distributed for any other purpose without our prior written consent.
For B S R & Co.
Chartered Accountants
Firm‟s Registration No: 101248W
For Chaturvedi & Shah
Chartered Accountants
Firm‟s Registration No: 101720W
Bhavesh Dhupelia
Partner
Membership No: 042070
Mumbai
Parag D. Mehta
Partner
Membership No: 113904
Mumbai
F - 7
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A Non-current
assets
I Fixed assets
(i) Tangible
assets 81,929.44 89,148.54 111,782.74 104,933.32 80,215.84 40,666.60
(ii) Intangible
assets 7,925.80 8,895.80 8,804.20 6,034.60 3,249.60 18,251.60
(iii) Capital
work-in-
progress 8,880.60 12,010.90 15,029.90 24,538.92 21,203.60 21,331.01
(iv) Intangible
assets under
development - 285.90 - 132.51 - -
II Goodwill on
consolidation 5,149.02 5,145.32 8,819.42 8,728.62 4,202.56 2,746.76
III Non-current
investments 8,836.30 553.34 1,092.99 1,272.41 1,161.72 6,991.37
IV Deferred tax
assets (net) 26.11 14.31 2.60 2.20 18.70 64.40
V Long-term loans
and advances 22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35
VI Other non-
current assets 583.90 62.00 389.30 277.42 59.41 43.75
136,135.07 139,803.39 175,290.91 173,086.38 134,928.27 119,388.84
B Current assets
I Current
investments - - 10.44 7,902.30 - 13,556.71
II Inventories 1,151.00 1,417.70 1,325.30 907.20 690.50 761.30
III Trade
receivables 18,546.30
18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
IV Cash and bank
balances 9,395.50 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49
V Short-term
loans and
advances 5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
VI Other current
assets 1,465.80 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96
36,217.60 46,293.94 53,482.14 79,667.62 68,885.16 67,888.57
F - 8
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Liabilities
C Non-current
liabilities
I Long-term
borrowings 37,443.20 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90
II Deferred tax
liabilities (net) - - 516.39 63.39 66.59 192.03
III Other long-term
liabilities 4,062.40 3,639.00 2,909.05 1,468.90 871.85 342.98
IV Long-term
provisions 545.10 621.10 774.71 383.20 3,434.40 3,038.99
42,050.70 79,928.47 48,630.26 42,320.49 61,733.30 56,673.90
D Minority
interest 1,216.98 1,074.08 1,347.88 1,736.58 3,006.58 1,621.78
E Current
liabilities
I Short-term
borrowings 145,385.80 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22
II Trade payables 15,054.57 18,967.70 12,935.97 11,088.28 8,287.62 9,003.83
III Other current
liabilities 61,080.90 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62
IV Short-term
provisions 271.50 200.90 215.99 165.91 230.40 1,826.01
221,792.77 163,199.80 176,089.69 172,880.96 89,832.56 61,198.68
F Net Worth
(A+B-C-D-E) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05
G Represented by
i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and
surplus (net) (95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74
H Net worth (i +
ii) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05
The above statement should be read together with significant accounting policies and notes to
summary statement of assets and liabilities, as restated, of the Group (Annexure IV)
F - 9
Annexure II
Reliance MediaWorks Limited
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Revenue from operations 35,139.80 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94
Other income 1,498.00 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80
Total revenue 36,637.80 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74
Direct operational
expenses 14,321.70 49,304.20 31,059.80 28,102.00 23,868.30 9,792.00
Employee benefits
expense 8,975.90 31,712.30 20,979.80 13,179.30 10,147.60 2,605.10
Finance costs (including
loss on derivative
contracts) (net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Depreciation, amortisation
and impairment expense 7,723.40 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Other expenses 19,263.20 65,209.31 34,672.96 25,317.05 20,056.90 7,914.65
Total expenses 64,214.90 207,312.71 117,453.26 88,044.99 80,062.41 33,370.61
(Loss) / profit before
exceptional items, tax
and minority interest (27,577.10) (81,825.81) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Exceptional items (Refer
note 8 of I of E of
Annexure IV and 12 of II
of E of Annexure IV) (6,001.07) (8,181.50) - - - -
(Loss) / profit before tax
and minority interest (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Less - Provision for taxes
- Current tax 232.90 769.50 113.90 39.77 416.36 228.29
- Deferred tax (credit) /
charge (11.80) (492.59) 452.69 13.25 (69.44) 551.72
- Fringe benefit tax - - - - 171.70 78.00
Net (loss) / profit after tax
before minority interest (33,799.27) (90,284.22) (32,993.65) (13,334.11) (7,460.79) 2,068.12
Less: (Loss) / profit
transferred to Minority
interest 245.50 732.40 (196.70) (530.87) (322.12) 53.80
F - 10
Annexure II
Reliance MediaWorks Limited
Summary statement of profit and loss of the Group, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Net (loss) / profit after tax
before adjustment
pursuant to Schemes (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,138.67) 2,014.32
Add: Adjustment pursuant
to Modified Composite
Scheme of Amalgamation
and Arrangement - - - - - 84.20
Less: Adjustment
pursuant to Scheme of
Amalgamation of Katch
22 - - - - - (100.00)
Less: Adjustment
pursuant to Scheme of
Arrangement for
demerger of Radio
business/ Scheme of
Amalgamation - - - - (649.30) -
Net (loss) / profit after tax
(Balance carried to
Annexure VI) (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.97) 1,998.52
The above statement should be read together with significant accounting policies and notes to summary
statement of profit and loss, as restated, of the Group (Annexure IV)
Period March 2013 – Six months ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F - 11
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
A
Cash flow from
operating activities
Net (loss) / profit
before tax, as
restated (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13
Adjustment for
Depreciation,
amortisation and
impairment expense 9,608.00 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
Bad debts /
Advances written off 155.53 1,010.40 201.20 152.10 348.40 391.00
Sundry balances
written-off 16.50 981.50 - - - -
Provisions written
back - - - (241.70) - -
Capital work in
progress written off 2,902.70 4,424.60 - - - -
Provision for
doubtful debts and
advances 590.00 4,767.92 1,666.30 121.90 - 3.20
Dividend income - (0.40) - - (132.60) (127.40)
Interest income (226.50) (1,255.70) (868.40) (538.60) (967.10) (967.70)
Profit on derivative
contract - - - - - (977.40)
Loss / (profit) on
sale / discarding of
fixed assets (net) 2.10 669.80 (2,694.80) 70.60 6.80 57.20
Loss on disposal of
subsidiaries - 2,722.92 - - - -
Gain on sale of
current investments (57.50) (39.50) (423.60) (274.40) (269.20) (32.40)
Gain on sale of
investments - - - - (1,700.00) (2,660.30)
Unrealised foreign
exchange (gain) /
loss (1,250.80) (2,304.85) (129.80) (474.39) (1,136.60) 16.70
Finance costs
(including loss on
derivative contracts)
(net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24
Operating profit
before working
capital changes and
before net results
of Radio Business (7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 11,687.89
F - 12
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment for cash
loss pertaining to
transaction relating
to Radio business till
March 31, 2008,
pursuant to the
Modified Composite
Scheme of
Amalgamation and
Arrangement - - - - - (8,377.00)
(7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 3,310.89
Operating profit
before working
capital changes
Adjustment for :
(Increase) /
decrease in trade
receivables (258.90) (2,083.40) (393.30) (2,513.90) (17,371.80) (7,658.94)
Decrease / (increase)
in loans and
advances and other
assets 5,800.60 2,806.20 (5,004.24) (1,670.40) 7,719.20 (1,370.40)
(Increase) / Decrease
/ in
Inventories 270.30 (178.50) (417.00) (231.50) 80.10 (551.40)
Increase / (decrease)
in trade and other
payable
(2,861.75) 7,912.90 3,345.12 4,196.26 (2,084.43) 10,404.08
Adjustment for
Katch 22 merger due
to Scheme of
Amalgamation
(Refer note 3 of VI
of E of Annexure
IV) - - - - - 23.30
Cash (used in) /
generated from
operating activities (4,957.19) (9,486.52) (6,404.88) 6,761.52 3,540.21 4,157.53
Taxes paid (net of
refunds) (2,363.40) 1,198.30 1,188.26 (1,467.09) (1,974.50) (1,628.70)
Net cash (used in) /
generated from
operating activities
(A) (7,320.59) (8,288.22) (5,216.62) 5,294.43 1,565.71 2,528.83
F - 13
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
B
Cash flow from
investing activities
Purchase of fixed
assets (1,184.67) (8,721.73) (22,335.80) (40,917.60) (35,911.00) (49,772.50)
Proceeds from sale
of fixed assets 463.30 1,914.10 13,999.70 23.10 1,097.50 14.10
Purchase of
investment- long
term- in shares of
subsidiaries
companies/
joint venture/
associates
- (90.80) (3,001.00) (7,861.20) (2,653.60)
(1,147.81)
Profit from /
investment in mutual
funds (net) (27.00) 39.50 423.60 274.40 269.20 32.40
Redemption of /
investment in
mutual funds - - 7,983.98 (7,982.03) 13,556.69 (13,623.83)
Purchase of
investment- long
term- other - - - (9.90) (4.30) (0.30)
Proceeds on sale of
non-current
investments / rights
therein 338.30 9,092.50 23.10 4,066.80 3,127.30 -
(Investment in) /
withdrawals‟ from
Partnership firm (0.16) 33.26 (15.80) 371.80 278.30 -
Dividend income - - - - 132.60 127.40
Dividend income - 0.40 - - - -
Advance towards
share application - (6,811.20) - - - -
Interest income 260.10 1,368.30 784.50 647.30 1,626.10 288.20
Cash (used)/
generated in
investing activities (1,297.94) (3,084.87) 772.48 (46,527.13) (23,688.81) (65,588.13)
Taxed paid (net of
refunds) (9.20) (76.80) (25.80) (35.60) (103.10) (194.40)
Net Cash (used)/
generated in
investing activities
(B) (1,307.14) (3,161.67) 746.68 (46,562.73) (23,791.91) (65,782.53)
F - 14
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
C
Cash flow from
financing activities
Proceeds from fresh
issue of share capital
(including share
premium) /
preference shares
(Refer note 2)
29,500.00 - - - -
-
Payment to Minority (53.57) (994.10) (228.60) (598.60) (212.90) -
Dividend tax paid on
distribution by
Subsidiaries and
joint ventures - - (9.10) - (12.80) -
Introduction of
capital by minority
partners in a
Subsidiary - - - 62.99 - -
Profit/ (loss) on
option contract - - - - - 977.40
Proceeds from long-
term borrowings - 68,308.50 39,775.90 5,489.00 7,826.10 40,000.00
Repayment of
Foreign currency
convertible bonds - - (15,814.50) - - -
(Repayment) /
proceeds from short
term borrowings
(net) 38,985.80 3,029.50 (1,003.80) 52,962.60 31,271.20 28,812.30
Repayment of long
term borrowings (18,248.00) (62,160.50) (17,083.30) - - -
Interest recoverable
from Reliance
Broadcast Network
Limited - - (1,448.60) (2,507.90) (2,584.90) -
Recovered from
Reliance Broadcast
Network
Limited pursuant to
demerger of Radio
business
9,961.40 20,000.00 - - -
63.80
Dividend (including
dividend tax) paid - (7.90) - - (1,349.20) (1,164.10)
Finance costs
(including loss on
derivative contracts)
(net) (10,425.70) (35,314.00) (18,773.50) (13,414.80) (11,287.10) (4,949.20)
Net cash generated
from (used in)
financing activities
( C ) 10,119.13 12,322.90 5,414.50 41,993.29 23,650.40 63,676.40
F - 15
Annexure III
Reliance MediaWorks Limited
Summary statement cash flow of the Group, as restated
(` in lakhs)
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Net increase /
(decrease) in cash
and cash
equivalent
(A+B+C) 1,491.40 873.01 944.56 724.99 1,424.20 422.70
Cash and cash
equivalents as at
beginning of the
period 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40 5,101.00
Cash and cash
equivalents taken
over on acquisition
of subsidiaries - (794.96) - 292.10 611.90 -
Exchange gain / loss
on translation 36.80 99.20 20.10 (119.50) - -
Cash and cash
equivalents disposed
on sale of subs/ JV's - - - - - -
Adjustment from
Composite Scheme
of Amalgamation
and Arrangement /
Modified Composite
Scheme of
Amalgamation and
Arrangement /
Scheme of
Arrangement /
Scheme of
Amalgamation - - - - (4,207.00) 306.70
Cash and cash
equivalents as at
end of the period
(refer note (I) and
(II) D of Annexure
VIII) 7,227.20 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40
1,491.40 873.01 944.56 724.99 1,424.20 422.70
The above statement should be read together with significant accounting policies and notes to summary
statement of cash flows, as restated, of the Group (Annexure IV)
Note:
2. The above cash flow statement has been prepared under the “Indirect” Method as set out in Accounting
Standard 3 – „Cash Flow Statements‟.
3. During Period 2012, the Company has apportioned the loans received on a short term basis into
preference shares amounting to ` 29,500 lakhs
F - 16
Period March 2013 – Six months ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F - 17
Annexure IV
Reliance MediaWorks Limited
Significant accounting policies and notes to the restated summary statements of the Group
The figures for Period March 2013 represent six months ended March 31, 2013, Period 2012 represent eighteen
months ended September 30, 2012, Period 2011 represent the year ended March 31, 2011, Period 2010 represents the
year ended March 31, 2010, Period 2009 represents the year ended March 31, 2009 and Period 2008 represents the
nine months ended March 31, 2008. Summary statements are not strictly comparable on account of accounting
pursuant to Court approved Schemes in Period 2008 and Period 2009. Also, the summary statements are not
comparable on account of varying accounting periods forming part of them.
The restated summary statements of the Group have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (“the Act”) read with the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on
August 26, 2009, as amended, to the extent applicable.
A. Summary of significant accounting policies
1. Basis of preparation
These summary statements of the Group relate to Reliance MediaWorks Limited („the Company or Parent
Company‟), its subsidiary companies, associates and joint ventures. The Company along with its
subsidiaries, associates and joint ventures constitute „the Group‟.
The summary statements of the subsidiaries, joint venture and associates companies used in the
consolidation are for the same reporting period as the Company. These financial statements are audited by
the auditors of the respective entities.
These summary statements of the Group are prepared and presented under the historical cost convention on
the accrual basis of accounting except for revaluation of certain fixed assets and in accordance with the
Accounting Standards („AS‟) notified in the Companies (Accounting Standards) Rules, 2006 and the
relevant provisions of the Companies Act, 1956 („the Act‟), to the extent applicable. The summary
statements are presented in Indian Rupees in lakhs except per share data and where mentioned otherwise.
Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011 (as
amended by notification no. F. No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no.
62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised Schedule VI
notified under the Act has become applicable to the Company for the purpose of preparation and
presentation of its summary statements. The adoption of revised Schedule VI does not impact the
recognition and measurement principles followed for preparation of summary statements. All assets and
liabilities have been classified as current or non-current as per the Company‟s normal operating cycle and
other criteria set out in the revised Schedule VI.
Due to practical difficulties, restatement / reclassification of the summary financial information as per
revised Schedule VI, pertaining to certain subsidiaries, associate and joint ventures, the said restatement /
reclassification for the Period March 2013, 2012, 2011, 2010, 2009 and 2008 has not been audited by the
respective auditor. Such financial information, as approved by the Board of Directors of the Company and
certified by a firm of Chartered Accountant / Chartered Accountant have been furnished to us by the
management of the Company and our report in so far as it relates to the amounts included in respect of such
subsidiaries, associate and joint venture is based solely on such certified summary financial information.
F - 18
The restated summary statements of Group have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by
SEBI on August 26, 2009, as amended, to the extent applicable.
2. Principles of Consolidation
The Summary statements of the Group are prepared in accordance with AS 21 – „Consolidated Financial
Statements‟, AS 23 - „Accounting for Investments in Associates in Consolidated Financial Statements‟ and
AS 27 – „Financial Reporting of Interest in Joint ventures‟. Summary statements of the Group are prepared
using uniform accounting policies for transactions and other events in similar circumstances except where it
is not practicable to do so. The Summary statements of the Group are presented, to the extent possible, in
the same format as that adopted by the Parent Company for its independent Summary Statements. The
Summary statements of the Group have been consolidated on the following basis:
Subsidiaries
The excess of cost to the Group of its investment in subsidiaries over its portion of equity in the subsidiaries
at the respective dates on which investments in such subsidiaries was made is recognised in the financial
statements as goodwill and any excess of assets over the investment of the Group in a subsidiary is
transferred to Capital reserve. The Group‟s portion of equity in the subsidiaries is determined on the basis
of the book value of assets and liabilities as per the financial statements of the subsidiaries as on the date of
the investment.
The financial statements of the Parent 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, after
eliminating intra-group balances / transactions and resulting unrealised profits in full. The amounts shown
in respect of reserves / accumulated losses comprise the reserve / accumulated losses as per the balance
sheet of the Parent Company and its share in the post-acquisition increase / decrease in the relevant reserve /
accumulated losses of the subsidiaries.
F - 19
The amount of goodwill and capital reserve are presented on a net basis for each Subsidiary.
Minority interest‟s share of profits or losses is adjusted against the income to arrive at the net income attributable to the shareholders. Minority interests‟ share of net
assets is disclosed separately in the Summary statements of the Group.
Joint venture entities
Interests in jointly controlled entities are accounted for using proportionate consolidation method.
The group consists of
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period March
2013
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Reliance MediaWorks
Entertainment Services Limited
May 4, 2009 India 100% 100% 100% 100% - -
Reliance Media Consultant
Private Limited
February 16,
2012
India 100% 100% - - - -
Reliance MediaVentures Private
Limited
June 19, 2012 India 100% 100% - - - -
Reliance MediaWorks Theatres
Limited
May 19, 2003 India 100% 100% 100% 100% 100% 100%
Big Synergy Media Limited January 12,
2007
India 51% 51% 51% 51% 51% 51%
Sri Ramakrishna Theatres
Limited (Refer Note 10 below)
January 11,
2008
India - - 89.68% 89.68% 89.68% 89.16%
F - 20
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period March
2013
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Reliance MediaWorks (UK)
Limited
May 19, 2006 United
Kingdom
100% 100% 100% 100% 100% 100%
Reliance MediaWorks (USA)
Inc.
May 17, 2006 United States
of America
100% 100% 100% 100% 100% 100%
Reliance MediaWorks
(Netherlands) B.V.
February 8,
2008
The
Netherlands
100% 100% 100% 100% 100% 100%
Reliance MediaWorks
(Mauritius) Limited
March 20,
2008
Mauritius 100% 100% 100% 100% 100% 100%
Rave Entertainment and Food
Nepal Private Limited (Refer
note 12)
August 24,
2008
Nepal - - 100% 100% 100% -
Big Cinemas Entertainment LLC December 19,
2007
United States
of America
100% 100% 100% 100% 100% 100%
Big Cinemas Entertainment (DE)
LLC
January 24,
2008
United States
of America
100% 100% 100% 100% 100% 100%
Adlabs Forum LLC (Refer note 7
below)
March 6,
2008
United States
of America
- - - - 100% 100%
Big Cinemas Laurel LLC November
28, 2007
United States
of America
100% 100% 100% 100% 100% 100%
F - 21
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period March
2013
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Big Cinemas Falls Church LLC November 8,
2007
United States
of America
100% 100% 100% 100% 100% 100%
Adlabs Heritage LLC (Refer note
7 below)
March 7,
2008
United States
of America
- - - 100% 100% 100%
Big Cinemas Norwalk LLC March 14,
2008
United States
of America
100% 100% 100% 100% 100% 100%
Big Cinemas Galaxy LLC (Refer
note 8 below)
December 21,
2007
United States
of America
100% 100% 100% 51% 51% 51%
Big Cinemas Sahil LLC November
13, 2007
United States
of America
97% 97% 97% 97% 100% 100%
Big Cinemas SAR LLC November 8,
2007
United States
of America
51% 51% 51% 51% 51% 51%
Phoenix Big Cinemas
Management LLC
February 25,
2008
United States
of America
51% 51% 51% 51% 51% 51%
Big Cinemas Union LLC (Refer
note 7 below)
February 8,
2008
United States
of America
- - - - 100% 100%
Big Cinemas Phoenix LLC February 22,
2008
United States
of America
51% 51% 51% 51% 51% 51%
F - 22
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period March
2013
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Big Cinemas Exhibitions LLC March 6,
2008
United States
of America
100% 100% 100% 100% 100% 100%
Big Cinemas IMC LLC January 19,
2008
United States
of America
100% 100% 100% 100% 100% 100%
Reliance Lowry Digital Imaging
Services Inc. (Refer note 9
below)
September 1,
2008
United States
of America
100% 100% 100% 100% 90% -
Big Pictures USA Inc March 30,
2009
United States
of America
100% 100% 100% 100% 100% -
Adlabs Digital Media LLC (Refer
note 7 below)
March 27,
2009
United States
of America
- - - 100% 100% -
Reliance Media and Marketing
Communications LLC
May 13, 2009 United States
of America
100% 100% 100% 100% - -
Adlabs GlobalStar LLC (Refer
note 7 below)
September
23, 2009
United States
of America
- - - - - -
Reliance Media Works VFX Inc. January 25,
2010
United States
of America
100% 100% 100% 100% - -
Reliance MediaWorks (Malaysia)
Sdn. Bhd. (Refer note 13)
April 18,
2008
Malaysia - - 100% 100% 100% -
F - 23
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period March
2013
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Reliance MediaWorks Big
Cinemas Sdn. Bhd. (Refer note
13)
November 1,
2008
Malaysia - - 70% 70% 70% -
Adlabs Multiplex Limited (Refer
note 1 below)
December 20,
2007
India - - - - - 100%
Rave Entertainment Private
Limited (Refer Note 2 below)
May 31, 2007 India - - - - - 100%
Adlabs Multiplexes and Theatres
Limited (Refer Note 3 below)
April 1, 2006 India - - - - - 100%
Katch 22 Entertainment Private
Limited (Refer Note 4 below)
April 23,
2007
India - - - - - -
Reliance Broadcast Network
Limited (Refer Note 5 below)
March 27,
2006
India - - - - - 100%
Joint ventures
Adlabs Multiplex Limited (Refer
Note 1 below)
NA India - - - - - -
Swanston Multiplex Cinemas NA India 50% 50% 50% 50% 50% 50%
F - 24
Name of the entity Date of
gaining
control
Country of
Incorporation
Ownership
interest
Period March
2013
Ownership
interest
Period 2012
Ownership
interest
Period 2011
Ownership
interest
Period 2010
Ownership
interest
Period 2009
Ownership
interest
Period 2008
Subsidiaries / Step down
Subsidiaries / Joint ventures /
Associates
Private Limited
Divya Shakti Marketing Private
Limited
NA India 50% 50% 50% 50% 50% 50%
Cineplex Private Limited (Refer
Note 11 below)
NA India - - 50% 50% 50% 50%
Associates
Sultan Production Private
Limited (Refer Note 6 below)
NA India - - - NA 49% 49%
GH – Reliance LLC NA United States
of America
30% - - - - -
F - 25
Notes:
Note 1 – Adlabs Multiplex Limited („AML‟) was accounted as a Joint venture till the fifteen month period
ended June 30, 2007 and part of Period 2008. During Period 2008, the balance outstanding shares of AML were
acquired by the Parent Company and AML became a 100% subsidiary of the Parent Company. During Period
2009, effective from April 1, 2008, AML was amalgamated with the Parent Company as per Scheme of
Amalgamation for merger of wholly owned subsidiaries.
(Refer note 2 of V of E of Annexure IV for details of Scheme of Amalgamation of AML with the Parent
Company)
Note 2 – Rave Entertainment Private Limited („REPL‟) was amalgamated with the Parent Company during
Period 2009, effective April 1, 2008 as per Scheme of Amalgamation for merger of wholly owned subsidiaries.
(Refer note 2 of VI of E of Annexure IV for details of acquisition of shares of REPL by the Group and note 2 of
V of E of Annexure IV for details of Scheme of Amalgamation of REPL with the Parent Company)
Note 3 - Adlabs Multiplexes and Theatres Limited („AMTL‟) was a joint venture of the Parent Company up to
April 1, 2006 with the Parent Company holding 50% interest in the Joint venture. Subsequently, the Parent
Company acquired the balance shares of AMTL and AMTL became a wholly owned subsidiary of the Parent
Company effective April 1, 2006. During Period 2009, effective from April 1, 2008, AMTL was amalgamated
with the Parent Company as per Scheme of Amalgamation for merger of wholly owned subsidiaries. (Refer note
2 of V of E of Annexure IV for details of Scheme of Amalgamation of AMTL with the Parent Company).
Note 4 – Katch 22 Entertainment Private Limited („Katch 22) was merged with the Parent Company during
period 2008 with effect from April 1, 2006 as per Scheme of Amalgamation of Katch 22 with the Parent
Company. (Refer note 3 of VI of E of Annexure IV for details of Scheme of Amalgamation). The shares of
Katch-22 were acquired effective April 23, 2007 and transactions of Katch 22 were not considered as part of
consolidated financial statements of fifteen month period ended June 30, 2007. However, no restatement
adjustments have been made pertaining to consideration of balances of Katch 22 in financial statements of
fifteen month period ended June 30, 2007.
Note 5 – Reliance Broadcast Network Limited („RBNL‟) was considered as a subsidiary of the Parent Company
till March 31, 2006. During the fifteen month period June 30, 2007, as per Composite Scheme of Amalgamation
and Arrangement, the Radio Business of the Parent Company was to be demerged to Reliance Broadcast
Network Limited and the investment of the Group in RBNL was to be cancelled. The Composite Scheme of
Amalgamation and Arrangement was given effect to in the financial statements for the fifteen month period
ended June 30, 2007, on an in-principle basis and RBNL was not consolidated as a subsidiary for those financial
statements. Subsequently, the Company modified the Composite Scheme of Amalgamation and Arrangement,
vide Modified Composite Scheme of Amalgamation and Arrangement which was given effect to in the financial
statements for Period 2008 and accordingly RBNL was considered a subsidiary of the Parent Company and
consolidated in the results for Period 2008. During Period 2009, the Radio Business of the Company was
demerged to RBNL as per Scheme of Arrangement and the investment of the Parent Company in the shares of
RBNL was deemed to be cancelled. Accordingly RBNL was not considered as a subsidiary for the financials of
Period 2009. (Refer note 1 of V of E of Annexure IV for details of Scheme of demerger of Radio business
pursuant to Scheme of Arrangement)
Note 6 – The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of
20%. This investment was made by the Company with the intention of investment in the movie "Sultan: The
warrior". However, during the Period 2010, the Company has issued a letter of termination and demanded
refund for the moneys paid by the Company towards production of the movie in the Joint venture and sale of
shares held by the Company to Orcher Studios Private Limited, as per a shareholders agreement signed by the
Company, which has been agreed to Orcher Studios Private Limited. Since, the Company has the intention of
F - 26
selling the shares, the Company has decided not to consider Sultan as an associate under AS-18 Related Party
Disclosures and AS-23 'Accounting for Associates in consolidated financial statements.
During Period 2011, the shares in Sultan Production Private Limited have been sold by the Group
Note 7 – These Companies have been dissolved during the Period 2010 / Period 2011.
Note 8 – During Period 2011, as part of settlement with the minority holders, the Group has acquired the
balance 49% stake in Big Cinemas Galaxy LLC.
Note 9 – During Period 2010, the Parent Company, acquired the balance 10% of the shares of Reliance Lowry
Digital Imaging Services Inc. from the external shareholders. The balance 90% of the shares are held by
Reliance MediaWorks (USA) Inc., a wholly owned subsidiary of the Parent Company.
Note 10 – During Period 2012 on May 27, 2011, the Parent Company, sold its shareholding in Sri Ramakrishna
Theaters Limited („SRTL‟) comprising of 89.68% of the issued equity share capital of SRTL, whereupon SRTL
has ceased to be subsidiary of the Company.
Note 11 – During Period 2012 on June 3, 2011, the Parent Company, sold its shareholding in Cineplex Private
Limited („CPL‟) comprising of 50% of the issued equity share capital of CPL, whereupon CPL has ceased to be
joint venture of the Company.
Note 12 – During Period 2012 on April 30, 2012, the Parent Company, sold its shareholding in Rave
Entertainment and Food Nepal Private Limited. The transfer of consideration for the same was subject to
approval of regulatory authorities and has been completed post the date of financial statements.
Note 13 – During Period 2012, on September 21, 2012, Reliance MediaWorks (Mauritius) Limited, a wholly
owned subsidiary of the Parent Company, has sold its entire holding in Reliance MediaWorks (Malaysia) Sdn.
Bhd.. Consequently, Reliance Works (Malaysia) Sdn. Bhd. and its wholly owned subsidiary Reliance
MediaWorks Big Cinemas Sdn. Bhd. have ceased to be subsidiaries of the Company.
3. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles
(„GAAP‟) in India requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial
statements and the reported amount of income and expenses during the reported period. The estimates and
assumptions used in the accompanying summary statements are based upon managements‟ evaluation of
relevant facts and circumstances as at the date of the summary statements, which in its opinion are prudent
and reasonable. Actual results could differ from those estimates. Any revision to accounting estimates is
recognised prospectively in current and future periods.
4. Goodwill on consolidation
The excess of cost to the Parent Company of its investments over its portion of equity in the subsidiaries /
associates / joint ventures, as at the date on which the investment was made, is recognised as goodwill in
the summary statements of the Group. The Group‟s portion of equity in the subsidiaries / associates / joint
ventures‟ is determined on the basis of the book value of assets and liabilities as per the financial statements
of the subsidiaries as on the date of investment.
F - 27
Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. The Group assesses the
recoverability of goodwill by reference to the valuation methodology adopted by it on the acquisition date,
which included strategic and synergic factors that were expected to enhance the enterprise value.
Accordingly, the Group would consider that there exists a decline other than temporary in the carrying
value of goodwill when, in conjunction with its valuation methodology, its expectations with respect to the
underlying acquisitions it has made deteriorates with adverse market conditions.
5. Fixed assets and depreciation / amortisation
a. Tangible assets
Tangible fixed assets are stated at cost and / or revalued amount in accordance with Scheme of
Amalgamation less accumulated depreciation and any provision for impairment. Cost includes freight,
duties, taxes (other than those recoverable from tax authorities) and other expenses related directly /
indirectly to the acquisition / construction and installation of the fixed assets and for bringing the asset to its
working condition for its intended use.
Depreciation on fixed assets is provided on the straight line method, at the rates prescribed in Schedule XIV
to the Act, which, in management‟s opinion, reflects the estimated useful lives of those fixed assets, except
assets of subsidiaries and a Joint Venture, namely Reliance MediaWorks (USA) Inc. (including its
subsidiaries), Reliance MediaWorks Big Cinemas Sdn. Bhd., Reliance MediaWorks (UK) Limited and
Swanston Multiplex Cinemas Private Limited and theatrical exhibition segment in India wherein
depreciation is provided at following rates:
Leasehold improvements / buildings are depreciated over the lower of the useful life of the asset and the
lease term, on a straight line basis.
Individual assets costing up to ` 0.05 lakhs are depreciated fully in the period of acquisition.
b. Intangible assets
Intangible assets, all of which have been acquired / created and are controlled through custody or legal
rights, are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are
regarded as having a limited useful economic life and the cost is amortised over the lower of useful life and
ten years.
Application software purchased, which is not an integral part of the related hardware, is shown as an
intangible asset and amortised on a straight line basis over its useful life, not exceeding five / ten years, as
determined by management.
Film rights comprise negative rights and distribution rights in films and are for a contractually specified
mode of exploitation, period and territory and are stated at cost less accumulated amortisation. Cost of film
Particulars of fixed assets
Rate of depreciation
Plant and machinery 7.07% to 20%
Furniture and fixture 10% to 25%
Office equipments 10%
Computers 20%
Vehicles 10%
F - 28
rights comprises original purchase price / minimum guarantee. Cost is ascertained on specific identification
basis where possible.
In case multiple films / rights are acquired for a consolidated amount, cost is allocated to each film / right
based on management‟s best estimates.
The individual film forecast method is used to amortise the cost of film rights acquired. Under this method,
costs are amortised in the proportion that gross revenues realised 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 unamortised cost over the film right‟s realisable value.
In respect of unreleased films, payments towards film rights are classified under capital advances as the
amounts are refundable in the event of non-release of the film.
Internally generated software is capitalised by the Group and amortised over its estimated useful life of
five / ten years.
Purchased goodwill is recognised by the Group on the basis of excess of purchase consideration paid over
the fair value of assets acquired at the time of acquisition of business and is amortised over, its estimated
useful life not exceeding ten years.
6. Impairment
In accordance with AS 28 – „Impairment of Assets‟, where there is an indication of impairment of the
Group‟s asset, the carrying amounts of the Group‟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 a cash
generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and
loss.
If at the Balance sheet date there is an indicator that a previously assessed impairment loss no longer exists,
the recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject to a
maximum depreciated historical amount.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of
the asset and from its disposal at the end of its useful life.
7. Investments
Long-term investments are carried at cost. A provision for diminution is made to recognise a decline, other
than temporary, in the value of long-term investments and is determined separately for each individual
investment.
Current investments are carried at lower of cost and fair value.
8. Inventories
Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon lamps and stores
and spares related to theatrical exhibition / film production services business etc.) are stated at the lower of
cost and net realisable value. Cost is determined on the first-in first-out (FIFO) basis except in the case of
Reliance MediaWorks (USA), Inc. (and its subsidiaries), and Reliance MediaWorks Big Cinemas Sdn. Bhd.
wherein the Group uses the weighted average method.
F - 29
Inventory of DVD‟s is stated at lower of cost or net realisable value, wherein cost is determined using
weighted average method.
Inventory of content cost not aired is stated at lower of cost and net realisable value.
9. Employee benefits
Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short
term employee benefits. The undiscounted amount of short term employee benefits expected to be paid in
exchange for the services rendered by employees are recognised as an expense during the period.
Long term employee benefits:
Provident fund and other schemes
The Group‟s state governed provident fund scheme, employee state insurance scheme and labour welfare
fund are defined contribution plans. The contribution paid / payable under the schemes is recognised during
the Period in which the employee renders the related service.
Gratuity Plan
The Group‟s gratuity benefit scheme is a defined benefit plan. The Group‟s net obligation in respect of the
gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior periods; that benefit is discounted to determine its present
value and the fair value of any plan assets is deducted.
The present value of the obligation under such defined benefit plan is determined based on actuarial
valuation using the Projected unit credit method.
The obligation is measured at the present value of the estimated future cash flows. 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.
Actuarial gains and losses are recognised immediately in the statement of profit and loss.
Other Long term employment benefits:
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 recognised as a liability at the present value of the
defined benefit obligation at the Balance sheet date, determined based on actuarial valuation using
Projected unit credit method. 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.
10. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. The amount recognised as revenue is exclusive of value added tax,
service tax and net of trade discounts.
F - 30
Amount of entertainment tax is shown as a reduction from revenue.
Film production services
Revenue from processing / printing of cinematographic films is recognised upon completion of the related
processing / printing.
Revenue from processing of digital content is recognised using the proportionate completion method. Use
of the proportionate completion method requires the Group to estimate the efforts expended to date as a
proportion of the total efforts to be expended. Efforts expended have been used to measure progress
towards completion, as there is a direct relationship between efforts expended and contracted output.
Sale of traded goods is recognised when the risks and rewards of ownership are passed on to the customer,
which generally coincides with the dispatch of goods.
Income from equipment / facility rental is recognised over the period of the relevant agreement /
arrangement.
Theatrical exhibition and related income
Sale of tickets
Revenue from theatrical exhibition is recognised on the date of the exhibition of the films and comprises
proceeds from sale of tickets, gross of entertainment tax. As the Group is the primary obligor with respect
to exhibition activities, the share of distributors in these proceeds is separately disclosed as Distributors‟
share.
Amount of entertainment tax is shown as a reduction from revenue where applicable.
Revenue from gift cards is recognised on the basis of availing the facility by the customer. At the time of
sale, the amounts received are recognised as deferred revenue.
Share of profit in partnership firm is recognised on the basis of audited financial statement of the
Partnership firm.
Sale of food and beverages
Revenue from sale of food and beverages is recognised upon sale and delivery at the counter.
Advertisement / sponsorship revenue
Revenue from advertisements, sponsorship and events is recognised on the date of the exhibition of the
advertisement / event or over the period of the contract or on completion of the Group‟s obligation, as
applicable.
Management fee is recognised as revenue on a time proportion basis as per the relevant agreement.
Television / film production, distribution and related income
Television / Film content production and related income
Revenue from sale of content / motion picture is accounted for on the date of agreement to assign / sell the
rights in the concerned motion picture / content or on the date of release of the content / motion picture,
whichever is later. Program sales are accounted on the delivery of tape to the channel.
Income from film distribution activity
F - 31
In case of distribution rights of motion picture / content, revenue is recognised on the date of release /
exhibition.
Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is
recognised on the date when the rights are made available to the assignee for exploitation.
Revenue from sale of VCDs / DVDs, etc is recognised when the risks and rewards of ownership are passed
on to the customer, which generally coincides with the dispatch of the products.
Interest income / income from film financing
Interest income, including from film / content related production financing, is recognised on a time
proportion basis at the rate implicit in the transaction.
Dividend income
Dividend income is recognised when the right to receive dividend is unconditional at the balance sheet date.
Marketing Rights / Rights to profit
Amounts received in lieu of future marketing rights sale, right to future profit from business of the Group
and other rights are recognised as income in the period of entering into the contract.
11. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of
the transactions. Exchange differences arising on foreign exchange transactions settled during the period are
recognised in the statement of profit and loss of the period.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated
at the closing exchange rates on that date; the resultant exchange differences are recognised in the statement
of profit and loss except in case of exchange differences arising on translation of monetary items which
form part of Group‟s net investment in a non-integral foreign operation which is accumulated in a „Foreign
currency translation reserve‟ until its disposal.
Non-monetary items which are carried at historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction.
Forward contracts are entered into to hedge the foreign currency risk of the underlying transaction. The
premium or discount on all such contracts arising at the inception of each contract is amortised as income or
expense over the life of the contract. Exchange difference on forward contracts is recognised as income or
expense in the statement of profit and loss of the period. Any profit or loss arising on the cancellation and
renewal of forward contract is recognised as income or expense for the period.
12. Foreign currency translation
The consolidated financial statements are reported in Indian rupees in accordance with AS-11 – „The
Effects of Changes in Foreign Exchange Rates‟ which specifies translation of foreign subsidiaries on the
basis of their classification as integral / non-integral to the operations of the Parent Company.
Local currency financials of each integral foreign subsidiary within the Group into Indian Rupees is
performed in respect of assets and liabilities other than fixed assets, using the exchange rate in effect at the
balance sheet date and for revenue and expense items other than the depreciation costs, using average
exchange rate during the reporting period. Net exchange difference resulting from the above translation of
F - 32
the financial statements of integral foreign subsidiaries is recognised in the consolidated statement of profit
and loss. Fixed assets are translated at exchange rates on the date of the transaction and depreciation on
fixed assets is translated at exchange rates used for translation of the underlying fixed assets.
Translation of local currency balances of each non-integral foreign subsidiary within the Group into Indian
Rupees is performed in respect of assets and liabilities at the exchange rate in effect at the Balance sheet
date and for revenue and expense items at the average exchange rate during the reporting period. Net
exchange differences resulting from the above translation of the financial statements is accumulated in a
„Foreign currency translation reserve‟, disclosed as Reserves and surplus. The amount accumulated will be
held in this account till the time of disposal of the net investment in the subsidiary.
13. Earnings per share
In determining earning per share, the Group considers the net result after tax and includes the post tax effect
of any extraordinary / exceptional item. The number of shares used in computing basic earnings per share is
the weighted average number of shares outstanding during the period. The number of shares used in
computing diluted earning per share comprises the weighted average number of shares considered for
deriving basic earnings per share and also the weighted average number of shares that could have been
issued on the conversion of all dilutive potential equity shares unless the results would be anti-dilutive.
Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a
later date.
14. Taxation
Income-tax expense comprises current tax expense and fringe benefit tax computed in accordance with the
relevant provisions of the Income tax Act, 1961 / local Income tax regulations of the respective countries of
operation of the Group and deferred tax charge or credit.
Current tax provision is made based on the tax liability computed after considering tax allowances and
exemptions, in accordance with the Income tax Act, 1961 / local Income tax regulations of the respective
countries of operation of the Group. Deferred tax charge or credit and the corresponding deferred tax
liability or asset is recognised for timing differences between the profits / losses offered for income tax and
profits / losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax
rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be
realised in future. However, where there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance sheet date and written down / up to reflect the amount
that is reasonably / virtually certain (as the case may be) to be realised.
Provision for fringe benefit tax is made on the basis of applicable rates on the taxable value of eligible
expenses of the Group as prescribed under the Income Tax Act, 1961 till Period 2009 on the basis of
applicability.
15. Share issue / Foreign Currency Convertible Bonds (FCCB) issue expenses and premium on
redemption
Share / FCCB issue expenses incurred and premium payable on FCCB are adjusted in the period of issue
against the Securities premium reserve.
16. Provisions and contingencies
F - 33
Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Group
recognises it has a present obligation as a result of past events, it is more likely than not that an outflow of
resources will be required to settle the obligation and the amount can be reasonably estimated.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation
that may, but probably will not require an outflow of resources. 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.
Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is
probable that a liability has been incurred and the amount can be reasonably estimated.
17. Leases
Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases are recorded
on a straight line basis over the lease term.
18. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are
capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial
period of time to get ready for its intended use. All other borrowing costs are charged to revenue.
19. Commercial papers
Commercial papers issued are recognised as a liability, at the amount of cash received at the time of
issuance i.e. discounted value. The discount is amortised as interest cost over the period of the commercial
paper, at the rate implicit in the transaction.
F - 34
B. Significant changes in accounting policies and other adjustments (debited) / credited to the restated financial statements:
(` in lakhs)
Particulars Refer
Note
Below
Period
March 2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment to
opening balance in
the statement of
profit and loss as at
July 1, 2007
(Loss) / profit after tax as per audited financial
statements
(34,173.39) (91,047.40) (32,886.10) (14,320.80) (5,787.10) 4,731.50
Balances as per audited financial statements 9,786.53
Adjusted for
Change in depreciation method (a) - - - (130.28) (853.29) 371.29 464.15
Change in estimated useful life (b) - - - - - - (218.77)
Restatement of FCCB‟s (c) - - 1,272.40 1,718.10 (1,130.10) (1,860.40) -
Prior period adjustment (net) (d) - - - - - (0.40) 0.40
Effect of qualification – deferred revenue
expenditure
(e)
173.40 520.19 (1,734.00) - - - -
Miscellaneous expenditure not written off,
adjusted in opening balance
(f)
- - 2.50 2.56 0.74 9.45 (15.25)
Prior period – tax
Excess / (short) provision for tax (g) (44.78) 46.40 12.44 (72.82) (11.76) (10.61) 81.13
Excess / (short) provision for Minimum alternative
tax
(g) - - - - (1,242.60) 1,242.60
Net impact of all adjustments 128.62 566.59 (446.66) 1,517.56 (1,994.41) (2,733.27) 1,554.26
F - 35
Particulars Refer
Note
Below
Period
March 2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment to
opening balance in
the statement of
profit and loss as at
July 1, 2007
Current tax impact of adjustments
Deferred tax impact of adjustments (g) - (535.81) 535.81 - (6.46) 0.29 0.08
(Loss) / Profit after tax as per restatement (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.77) 1,998.52
Balances as per restatement as on July 1,
2007
11,340.87
F - 36
a) Change in accounting policy for depreciation
During Period 2009, the Group has charged depreciation as per the written down value method in
the film production services, production and distribution business and for unallocated assets at the
rates specified in Schedule XIV of the Companies Act, 1956 till March 31, 2008. Starting April 1,
2008, the Group has changed its policy to charge depreciation as per the straight line method at the
rates specified in Schedule XIV of the Companies Act, 1956. Accordingly, depreciation charge for
the previous period‟s has been restated based on the new method and the impact of change in
depreciation method for the period prior to July 1, 2007 has been adjusted to opening balance of the
surplus in statement of profit and loss, as restated as on July 1, 2007.
b) Change in estimated useful life of assets
The Group had revised the estimated useful lives of certain fixed assets pertaining to the theatrical
exhibition business from July 1, 2007, since in the opinion of the management, the revised useful
life reflect the estimated period of economic benefit to be derived from the use of such assets. For
the purpose of these summary statements, depreciation has been recomputed based on revised useful
life of the assets from the date of capitalisation of these assets. Accordingly depreciation for the
periods prior to July 1, 2007 has been restated and depreciation for these periods has been adjusted
to opening balance of the surplus in statement of profit and loss, as restated as on July 1, 2007.
c) Accounting for Foreign Currency Convertible Bonds („FCCB‟)
During Period 2008, the liability for FCCB‟s had been reclassified as a non-monetary liability inter-
alia on the basis of the trend of earnings, movement of the Parent Company‟s share prices and
conversion option exercised by the FCCB holders (bondholders holding 75.42% of the FCCB had
exercised conversion option as of March 31, 2008). However, during Period 2011, the balance
FCCB‟s were redeemed at a premium, as per the terms of the issue document.
The Company had reversed foreign exchange fluctuation loss aggregating to ` 438.06 lakhs in
Period 2008 based on the consideration of FCCB‟s as a non-monetary liability. This position was
carried forward till Period 2010 and was a matter of emphasis referred to in the auditors report for
Period 2008, 2009 and 2010.
Hence, the Company has reversed the reversal made during Period 2008 and recognised the loss /
gain on the non-converted portion of FCCB‟s, considering them as a monetary item in Period 2008,
2009 and 2010 and reversed this loss in Period 2011, wherein the Company has recognised the
entire loss on redemption in its audited financial statements.
d) Prior period adjustments (net)
Prior period adjustments pertain to under accrual of expenses by Subsidiaries and Joint ventures.
The amount pertains to period‟s prior to July 1, 2007 and hence the same has been adjusted against
the opening balance of the surplus in statement of profit and loss, as restated as of June 30, 2007.
e) Deferred revenue expenditure
Reliance MediaWorks Entertainment Services Limited, a subsidiary of the Group had recognised
deferred revenue expenditure for start up and stabilisation costs during Period 2011, which was a
subject matter of qualification by the auditors of the Subsidiary in Period 2011. The Group has
F - 37
reversed the accounting treatment followed by the Subsidiary regarding recognition of deferred
revenue expenditure and has appropriately charged off the expenditure in the Statement of profit
and loss, as restated.
The deferred revenue expenditure was amortised over a period of 5 years starting Period 2012,
which has been appropriately reversed in the Statement of profit and loss, as restated of Period 2012
and Period March 2013.
f) Miscellaneous expenditure not written-off
The Group has written off the balances of miscellaneous expenditure as of July 1, 2007 to the
opening balance of surplus of statement of profit and loss, as restated as on April 1, 2006 and has
consequently reversed the charge made for write off made in Period 2008, 2009, 2010 and 2011.
g) Tax impact on restatement
The statement of profit and loss, as restated of some periods include amounts paid / provided for or
refunded / written back, in respect of shortfall / excess income tax (including fringe benefit tax)
arising out of assessments, appeals etc. which has now been adjusted in the respective period‟s tax
liability. Also, income tax (current tax and deferred tax) has been computed on adjustments made
and has been adjusted accordingly in the statement of profit and loss, as restated for the respective
periods.
h) Consequent to the notification of the Companies (Accounting Standards) Rules, 2006, with effect
from July 1, 2007, the Group adopted Accounting Standard (AS 15) - Employee Benefits. However,
there was no significant impact on adoption of the Standard which is required to be adjusted to the
opening balance of reserves and surplus.
i) Adjustments have been made in the Restated Summary Statements, wherever required, by a
reclassification of the corresponding items of income, expenses, assets and liabilities, in order to
bring them in line with the groupings as per the audited financials of the Group for Period March
2013 as prepared under Government Notification no. S.O. 447 (E) dated February 28, 2011 (as
amended by notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General
Circular no. 62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs.
j) The Company in Period 2009 has classified its operations in US and in Period 2010 its operations in
Nepal as non-integral to the operations of the Parent Company in India. The impact of this change is
not material on the results of respective periods and hence, no restatement has been made for the
same.
k) De-merger of Radio Business
During the year ended March 31, 2006 the Company commenced operations of the Radio business.
The Company was granted 45 FM Radio operation licenses in various parts of India including all
metros.
During the fifteen month period ended June 30, 2007, the Board of Directors and members of the
Company and the Hon‟ble High Court of Judicature at Bombay approved the Composite Scheme of
Amalgamation and Arrangement („Composite Scheme‟) which among other things provided for
demerger of the Radio business of the Company to Reliance Broadcast Network Limited with effect
from April 1, 2006. The Company had given the in-principle effect of the Composite Scheme
including the demerger of the Radio business of the Company to Reliance Broadcast Network
F - 38
Limited in the accounts for the fifteen month period ended June 30, 2007 pending filing of the
Scheme with the Registrar of Companies. Subsequently, due to non-receipt of approval from the
Ministry of Information and Broadcasting, the Company filed the Modified Composite Scheme of
Amalgamation and Arrangement (the „Modified Composite Scheme‟) which provided for reversal
of the effect of demerger, of the Radio business that was given effect to in the accounts for the
fifteen month period ended June 30, 2007 and provided for adjusting the net result of the
transactions related to Radio business for the period March 31, 2006 till the effective date of the
Modified Composite Scheme i.e. March 31, 2008 in the General reserve account of the Company.
During Period 2009, the Board of Directors and members of the Company and the Hon‟ble High
Court of Judicature at Bombay approved a Scheme of Arrangement which provides for demerger of
the Radio business of the Company effective April 1, 2008 to Reliance Broadcast Network Limited.
Accordingly, transaction related to Radio business does not form part of the statement of profit and
loss, for Period 2008. However, the assets and liability were included in the summary statement of
assets and liability in Period 2008. The assets and liabilities of the Radio business for Period 2008
which are included in the statement of assets and liability of the Group are:
Particulars Period 2008
(` in lakhs)
Fixed assets
Gross block 32,728.23
Less: Accumulated depreciation 3,845.38
Net block 28,882.85
Capital work in progress 2,309.17
Current assets
Inventories 17.67
Sundry debtors 6,679.51
Cash and bank balances 843.71
Loans and advances 6,387.06
13,927.95
Current liabilities and provisions
Current liabilities 4,348.71
Provisions 626.94
4,975.65
Net working capital 8,952.30
Less: Loans 2,046.28
Net Capital employed 38,098.04
(Refer note 1 of VI of E of Annexure IV for details of the Modified Composite Scheme of
Amalgamation and Arrangement giving effect to in the accounts of the Company for Period 2008
and note Refer note 1 of V of E of Annexure IV for details of the Scheme of arrangement given
effect to in the accounts of the Group for Period 2009)
C. Auditors‟ qualification
F - 39
a. Period March 2013
i. As reproduced below, auditors have qualified their audit report for Period March 2013 for
recognition of deferred revenue expenditure
We draw attention to Note 42 to the consolidated financial statements regarding recognition of
Deferred Revenue Expenditure aggregating to ` 1,040.41 lakhs pertaining to start-up and
stabilization costs of the business, by Reliance MediaWorks Entertainment Services Limited, a
subsidiary of the Company. As opined by the auditor of the subsidiary, such recognition is not
in accordance with Accounting Standard 26 – „Intangible Assets.
Had the Group recognised the above loss and such costs, the loss before tax and deficit in
Statement of profit and loss as at period ended March 31, 2013 for the Group would be higher by
` 1,040.41 lakhs.
(Refer note (e) of B of Annexure IV for effect of restatement of the qualification)
b. Period 2012
i. As reproduced below, auditors have qualified their audit report for Period 2012 for
recognition of deferred revenue expenditure
We draw attention to Note 49 to the consolidated financial statements regarding recognition of
Deferred Revenue Expenditure aggregating to ` 1,213.80 lakhs pertaining to start-up and
stabilization costs of the business, by Reliance MediaWorks Entertainment Services Limited, a
subsidiary of the Company. As opined by the auditor of the subsidiary, such recognition is not
in accordance with Accounting Standard 26 – „Intangible Assets.
Had the Group recognised the above loss and such costs, the loss before tax and deficit in
Statement of profit and loss as at period ended September 30, 2012 for the Group would be
higher by ` 1,213.80 lakhs.
(Refer note (e) of B of Annexure IV for effect of restatement of the qualification)
c. Period 2011
i. As reproduced below auditors have qualified their audit report for Period 2011 for
recognition of deferred revenue expenditure. The qualification is re-produced as follows:
As more fully explained in note 15 of Schedule 23 to the consolidated financial statements, the
financial statements of Reliance MediaWorks Entertainment Services Limited, a subsidiary, has
been qualified on account of treatment of start up and stabilisation costs of the film production
services segment aggregating to ` 1,734.00 lakhs as deferred revenue expenditure, which is not in
accordance with Accounting Standard 26 – „Intangible Assets‟, prescribed in the Companies
(Accounting Standards) Rules, 2006. Had the Subsidiary not followed the said accounting
treatment, the loss for the current year would have been higher by ` 1,734.00 lakhs and
F - 40
consequentially the Debit balance in Profit and Loss Account would have been higher by `
1,734.00 lakhs.
The management has adjusted the effect of the qualification in the restated statements of the
Group.
(Refer note (e) of B of Annexure IV for effect of restatement of the qualification)
D. Extract of other matters / matter of emphasis referred by auditors in their reports as
reproduced below:
a. Period March 2013
i) We draw attention to note 37 to the consolidated financial statements; the Group‟s net
worth is fully eroded and has a negative net worth of ` 91,294.20 lakhs, the Group has
incurred a loss of ` 34,173.39 lakhs for the six month period October 1, 2012 to March 31,
2013, indicating the existence of uncertainty that may cast doubt about the Group‟s ability
to continue as a going concern. Considering the matters set out in the said note, this
consolidated financial statement is prepared on a going concern basis.
Our opinion is not qualified in respect of these matters.
(Refer note 5 of I of E of Annexure IV)
b. Period 2012
i) Without qualifying our report, we draw attention to note 37 to the consolidated financial
statements; the Group‟s net worth is fully eroded and has a negative net worth of `
56,562.80 lakhs, the Group has incurred a loss of ` 91,047.40 lakhs for the eighteen month
period April 1, 2011 to September 30, 2012, indicating the existence of uncertainty that
may cast doubt about the Group‟s ability to continue as a going concern. Considering the
matters set out in the said note, this consolidated financial statement is prepared on a going
concern basis.
(Refer note 5 of II of E of Annexure IV)
c. Period 2010
i) Without qualifying our report, we draw attention to note 8 of schedule 22 to the financial
statements regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟).
During the financial period ended March 31, 2008, the Company re-classified the liability
towards FCCB as non–monetary liability inter-alia on the basis of the trend of earnings,
movement of the Company‟s share prices and conversion option exercised by the FCCB
holders. The Company continues to classify the liability towards FCCB as non–monetary
liability as in its view the current fall in the market price of the Company‟s share price and
non-conversion by bond holders is a temporary aberration, consequently, the foreign
exchange fluctuation gain for the year aggregating ` 1,718.10 lakhs has not been recognised
and the said liability has not been restated at the year-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should
be restated at the year-end exchange rate in accordance with Accounting Standard 11 -
„The Effects of Changes in Foreign Exchange Rates‟ prescribed in the Companies
(Accounting Standards) Rules, 2006. There is no specific guidance of The Institute of
F - 41
Chartered Accountants of India on accounting for foreign currency bonds convertible into
equity shares at the option of the holder. Had the said liability been considered as a
monetary liability as before, the loss before tax for the current year would be lower by `
1,718.10 lakhs and the reserves and surplus would be lower by ` 1,272.30 lakhs.
(Refer note 5 of IV of E of Annexure IV for note 17 of Schedule 22 which has been
referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary
item)
d. Period 2009
i) Without qualifying our report, we draw attention to Note 10 of Schedule 22 to the
consolidated financial statements regarding accounting of the Foreign Currency
Convertible Bonds („FCCB‟). During the previous financial period ended March 31, 2008,
the Company reclassified the liability towards FCCB as non–monetary liability inter-alia
on the basis of the trend of earnings, movement of the Company‟s share prices and
conversion option exercised by the FCCB holders. The Company continues to classify the
liability towards FCCB as non– monetary liability as in its view the current fall in the
market price of the Company‟s share price and non conversion by bond holders during the
year is a temporary aberration, consequently, the foreign exchange fluctuation (net loss) for
the year aggregating ` 1,130.10 lakhs has not been recognised and the said liability has not
been restated at the period-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should
be restated at the period-end exchange rate in accordance with Accounting Standard 11 -
„The Effects of Changes in Foreign Exchange Rates‟ prescribed in the Companies
(Accounting Standards) Rules, 2006 issued by the Central government in consultation with
the National Advisory Committee on Accounting Standards. There is no specific guidance
of The Institute of Chartered Accountants of India on accounting for foreign currency
bonds convertible into equity shares at the option of the holder. Had the said liability been
considered as a monetary liability, the loss before tax for the current year would be higher
by ` 1,130.10 lakhs and the reserves and surplus would be lower by ` 2,990.40 lakhs.
(Refer note 7 of V of E of Annexure IV for note 10 of Schedule 22 which has been referred
to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary
item)
ii) Without qualifying our opinion, we draw attention to Note 2 of Schedule 22 to the
financial statements. As more fully explained in the said Note, during the year, the Hon‟ble
High Court of Judicature at Mumbai vide its order dated May 8, 2009 sanctioned the
Scheme of Amalgamation of the Company with its wholly owned subsidiaries Adlabs
Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Rave Entertainment Private
Limited and Mahimna Entertainment Private Limited, under sections 391 to 394 of the Act.
Pursuant to the said Scheme the Company has the made an adjustment for diminution in
value of its assets (production and distribution rights, fixed assets, investments, debtors and
loans and advances) aggregating ` 15,669.70 lakhs by debiting the same to capital reserve
F - 42
instead of the statement of profit and loss. Had the Company debited the statement of profit
and loss the loss before tax for the year would be higher by the said amount.
(Refer note 2 of V of E of Annexure IV for note 2 of Schedule 22 which has been referred
to above)
e. Period 2008
i) Without qualifying our report, we draw attention to Note 1 of Schedule 22 to the financial
statements. As more fully explained in the said Note, during the period, the Hon'ble High
Court of Judicature at Bombay vide its order dated March 7, 2008 sanctioned the Modified
Composite Scheme of amalgamation and arrangement ('the Modified Scheme') between the
Company, Entertainment One India Limited ('E-ONE') and Mukta Adlabs Digital
Exhibition Private Limited ('MADEL')#. The Scheme was filed with the Registrar of
Companies ('ROC') on March 31, 2008. Pending completion of licensing and other
procedural formalities, the original Composite Scheme of amalgamation and arrangement
between the Company, E-ONE, MADEL#, Reliance Unicom Limited ('RUL')## and their
respective shareholders and creditors sanctioned by the Hon'ble High Court of Judicature at
Bombay vide its order dated September 15, 2006 was not filed with the Registrar of
Companies ('ROC') as required under Section 391(3) of the Companies Act, 1956 ('the
Act'). However, the said original Scheme was given effect to by the Company's
management in the previous period's financial statements for the fifteen months ended June
30, 2007, so as to give effect to the substance of the Scheme as approved by the Hon'ble
High Court of Judicature at Bombay. The Modified Scheme inter-alia provides that the net
results of the transactions related to the radio business of the Company for the period from
March 31, 2006 to the Effective date (i.e. the date of filing the Modified Scheme with the
ROC) be adjusted in the General reserve account of the Company (the original scheme
provided for the demerger of the radio business of the Company to RUL## effective March
31, 2006). As the original scheme was given effect to in the previous period's financial
statements for the fifteen months ended June 30, 2007, only the modifications to the
original scheme have been given effect to in the current period's financial statements
(including reversal of demerger of radio business to RUL##).
# - The name of the Company was subsequently changed to Adlabs Multiplex and Theatres
Limited
## - The name of the Company was subsequently changed to Reliance Broadcast Network
Limited
(Refer note 1 of VI of E of Annexure IV for note 1 of Schedule 22 which has been referred
to above)
ii) Without qualifying our report, we draw attention to Note 16 of Schedule 22 to the financial
statements regarding accounting of the Foreign Currency Convertible Bonds ('FCCB').
During the current period, the Company reclassified the liability towards FCCB as non-
monetary liability inter-alia on the basis of the trend of earnings and movement of the
Company's share prices. Accordingly, the foreign exchange fluctuation (net loss)
aggregating to ` 438.10 lakhs accounted in previous period has been reversed and the
foreign exchange fluctuation loss for the current period aggregating to ` 3,621.80 lakhs has
not been recognised by management and the said liability has not been revalued at the
period-end exchange rate.
F - 43
An alternate view exists that the liability towards FCCB is a monetary liability and should
be revalued at the period-end exchange rate in accordance with Accounting Standard 11 -
'The Effects of Changes in Foreign Exchange Rates' prescribed in the Companies
(Accounting Standard) Rules, 2006 issued by the Central Government in consultation with
the National Advisory Committee on Accounting Standard. There is no specific guidance
of The Institute of Chartered Accountants of India on accounting for foreign currency
bonds convertible into equity shares at the option of the holder. Had the said liability been
considered as a monetary liability as before, the profit after tax would be lower by `
4,118.90 lakhs.
(Refer note 7 of VI of E of Annexure IV for note 21 of Schedule 22 which has been
referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary
item)
E. Extract of significant notes from audited financial statements
I. Period March 2013
1. Lease disclosure under AS 19 – „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Amount payable within lock-in-period is ` 51,547.10 lakhs
Amount debited to statement of profit and loss for lease rental is ` 9,692.50 lakhs.
2. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:
Name of the Company Country of
Incorporation
% of ownership
interest as at
March 31, 2013
Particulars Minimum
lease
payments (` in
lakhs)
For the Parent Company / Subsidiaries companies
Amounts due within one year from the Balance sheet date 14,363.40
Amounts due in the period between one year and five years 42,408.80
Amount due after five years 58,034.40
114,806.60
F - 44
Swanston Multiplex Cinemas Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
Details of Joint Venture
Particulars Period March 2013
Balance Sheet
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 111.50
(b) Reserves and surplus (140.30)
LIABILITIES
Non-current liabilities
(a) Long term borrowing 211.70
(b) Long-term provisions 0.60
Current liabilities
(a) Trade payable 88.00
(b) Other current liabilities 69.40
Total 340.90
ASSETS
Non-current assets
(a) Fixed assets
Tangible assets 200.90
(b) Long-term loans and advances 71.90
Current assets
(a) Inventories 3.80
(b) Trade Receivables 17.30
(c) Cash and cash equivalents 31.00
(d) Short-term loans and advances 0.60
(e) Other current assets 15.40
Total 340.90
Statement of Profit and loss
Revenue
(a) Revenue from operations 96.60
(b) Other income 0.20
Total Revenue 96.80
Expenses
Direct operation expenses 49.80
F - 45
Particulars Period March 2013
Employee benefit expense 4.20
Finance cost -
Depreciation / amortisation expense 10.70
Other expenses 82.50
Total Expenses 147.20
(Loss) before tax (50.40)
Tax Expenses
(1) Current tax -
(2) Deferred tax (credit)/ charge -
(Loss) for the period (50.40)
OTHER MATTERS
1. Contingent Liabilities 99.30
2. Capital Commitments -
Movement of the aggregate Shareholders‟ funds of the Joint
ventures:
Shareholders‟ funds as at beginning of the period 21.60
Add: Share of (loss) / profits for the period (50.40)
Shareholders‟ funds as at the end of the period (28.80)
3. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Currency As at March 31, 2013
Amount – foreign
currency (lakhs) Amount – (` in
lakhs)
Trade and other receivables USD 40.30 2,202.60
GBP 9.50 789.70
Trade and other payables USD 68.90 3,765.70
GBP 9.00 748.10
EURO 0.60 42.00
MUR 0.60 1.10
Loans / Buyers credit USD 85.70 4,683.90
Cash and bank balances USD 27.30 1492.10
GBP 4.00 332.50
EURO 0.10 7.00
F - 46
4. Movement of Goodwill
Particulars Period March 2013
(` in lakhs)
Opening balance of Goodwill 5,145.32
Impact of exchange differences 3.70
5,149.02
5. Considering the continuing substantial losses incurred by the Group / Parent Company, its net worth
has been eroded. However, having regard to improved operational performance on account of
stabilization of new businesses in films and media services, financial support from its promoters,
further restructuring exercise being implemented etc, the financial statements of the Company have
been prepared on the basis of going concern and no adjustments are required to the carrying value of
assets and liabilities.
6. The Parent Company executed an indicative non-binding term sheet with a private equity fund to
acquire a substantial minority stake through an investment of ` 6,050 in the Group‟s film and media
services division. The investment is proposed to be made into the subsidiary of the Parent Company,
into which our film and media services division will be transferred. No definitive agreement has
been executed in respect of the proposed transaction. The exclusivity period as per non-binding term
sheet has been expired on October 15, 2012, however the Parent Company and the fund have
extended the exclusivity period upto August 12, 2013.
7. The shareholders of the Parent Company have approved on February 21, 2012 through postal ballot
the resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings
pertaining to the Film & Media Services and Exhibition business on a going concern basis to its
wholly owned subsidiaries at consideration not less than tax written down values as the board may
decide and on such terms and conditions and in such manner as may be decided by the board and
the wholly owned subsidiaries. Since necessary approval from lenders and other appropriate
authorities are still awaited, the Company has not executed relevant agreements with its
subsidiaries. The appropriate accounting treatment / disclosures will be given once the requisite
approvals are obtained.
8. Exceptional items includes:
a. The Parent Company has undertaken an initiative for rationalization / improvement of
overall Exhibition business, under which the Parent Company is re-negotiating rentals.
As part of this initiative, rentals for several properties have been reduced, however in
some cases the Parent Company has decided to exit the property. In these cases, `
5,682.58 lakhs pertaining to these properties have been written off / provided to the
statement of profit and loss, thereby reducing subsequent cash losses suffered by the
Parent Company.
b. A subsidiary of the Parent Company in Mauritius has provided certain advances and
deposits – ` 318.49 lakhs.
9. For Period March 2013, subsidiaries in USA have been considered as non-integral and subsidiaries
in UK, Mauritius and Netherlands have been considered as integral to the operations of the Parent
Company in India.
II. Period 2012
1. Lease disclosure under AS 19 – „Leases‟
F - 47
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Amount payable within lock-in-period is ` 79,927.10 lakhs
Amount debited to statement of profit and loss for lease rental is ` 30,455.10 lakhs (excluding
amount capitalised ` 268.30 lakhs).
2. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
September 30,
2012 Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited (up to June 3, 2011) India Nil
Divyashakti Marketing Private Limited India 50%
Details of Joint Venture
Particulars Period 2012
Balance Sheet
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 111.50
(b) Reserves and surplus (89.90)
LIABILITIES
Non-current liabilities
(a) Long term borrowing 211.70
(b) Other long-term liabilities 0.50
(c) Long-term provisions 0.30
Current liabilities
Particulars Minimum
lease
payments (` in
lakhs)
For the Parent Company / Subsidiaries companies
Amounts due within one year from the Balance sheet date 15,846.90
Amounts due in the period between one year and five years 50,170.40
Amount due after five years 67,363.60
133,380.90
F - 48
Particulars Period 2012
(a) Trade payable 79.80
(b) Other current liabilities 47.50
Total 361.40
ASSETS
Non-current assets
(a) Fixed assets
Tangible assets 206.50
(b) Long-term loans and advances 70.30
Current assets
(a) Inventories 3.70
(b ) Trade Receivables 23.40
(c) Cash and cash equivalents 30.40
(d) Short-term loans and advances 11.90
(e) Other current assets 15.20
Total 361.40
Statement of Profit and loss
Revenue
(a) Revenue from operations 1,109.80
(b) Other income 8.70
Total Revenue 1,118.50
Expenses
Direct operation expenses 525.90
Employee benefit expense 57.20
Finance cost 1.10
Depreciation / amortisation expense 102.50
Other expenses 642.50
Total Expenses 1,329.20
(Loss) before tax (210.70)
Tax Expenses
(1) Current tax 17.50
(2) Deferred tax (credit)/ charge 0.10
(Loss) for the period (228.30)
OTHER MATTERS
F - 49
Particulars Period 2012
1. Contingent Liabilities 98.00
2. Capital Commitments Nil
Movement of the aggregate Shareholders‟ funds of the Joint
ventures:
Shareholders‟ funds as at beginning of the period 423.90
Add: Issue of shares by joint venture 125.00
Add: Share of (loss) / profits for the period (228.30)
Effect of disposal of joint ventures (299.00)
Shareholders‟ funds as at the end of the period 21.60
Note:
Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Company has decided to provide for diminution in the value of
investments in the Joint Venture amounting to ` 825.06 lakhs.
3. Foreign currency exposures (other than investments and fixed assets) not covered by forward
contracts
Currency As at September 30, 2012
Amount – foreign
currency (lakhs) Amount – (` in
lakhs)
Trade and other receivables USD 184.90 9,762.70
GBP 24.80 2,117.30
MYR 15.10 262.60
MUR 174.30 312.50
Trade and other payables USD 114.70 6,056.20
GBP 7.00 597.60
EURO 0.40 27.20
MYR 0.10 1.70
MUR 34.50 61.90
Loans / Buyers credit USD 158.60 8,374.10
Cash and bank balances USD 39.30 2,075.00
GBP 6.80 580.50
EURO 0.10 6.80
4. Movement of Goodwill
Particulars Period 2012
(` in lakhs)
F - 50
Particulars Period 2012
(` in lakhs)
Opening balance of Goodwill 8,819.42
Impact for Subsidiaries sold during the period / year (3,196.30)
Impact of exchange differences 14.80
Impact of impairment for a Joint venture (492.60)
5,145.32
5. Considering the continuing substantial losses incurred by the Group / Parent Company, its net worth
has been eroded. However, having regard to improved operational performance on account of
stabilisation of new businesses in films and media services, financial support from its promoters,
further restructuring exercise being implemented etc, the financial statements of the Company have
been prepared on the basis of going concern and no adjustments are required to the carrying value of
assets and liabilities.
6. The Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in the Company‟s film and media
services division. The investment is proposed to be made into the subsidiary of the Company, into
which our film and media services division will be transferred. No definitive agreement has been
executed in respect of the proposed transaction. Though exclusivity period as per non-binding term
sheet has been expired on October 15, 2012, the Company and the fund are in process of extending
exclusivity period.
7. The shareholders of the Parent Company have approved on February 21, 2012 through postal ballot
the resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings
pertaining to the Film & Media Services and Exhibition business on a going concern basis to its
wholly owned subsidiaries at consideration not less than tax written down values as the board may
decide and on such terms and conditions and in such manner as may be decided by the board and
the wholly owned subsidiaries. Since necessary approval from lenders and other appropriate
authorities are still awaited, the Company has not executed relevant agreements with its
subsidiaries. The appropriate accounting treatment / disclosures will be given once the requisite
approvals are obtained.
8. During Period 2012, the Company has dropped several properties under development / completed
properties and hence has written off the carrying value of capital work-in-progress of ` 4,424.60
lakhs and deposits of ` 981.50 lakhs pertaining to these properties.
9. Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Group has decided to write down the value of its goodwill amounting to
` 492.60 lakhs.
10. Reliance MediaWorks (USA) Inc., a Subsidiary acquired the assets of Digital Domain Media Group
Inc.‟s („DDMG‟) VFX and commercial business jointly through an auction process with Beijing
Galloping Horse Media Co., Ltd („Galloping Horse‟) and has agreed to hold 30% units of Galloping
Horse America, LLC, a special purpose entity incorporated by Galloping Horse for the purpose of
acquisition of these assets of DDMG. The Subsidiary is in the process of entering in an agreement
with Galloping Horse. Hence, the amounts advanced by the Subsidiary to the special purpose
vehicle has been treated as advances given towards share application.
11. During Period 2012, the Company has sold its shareholding in
a) A joint venture - Cineplex Private Limited effective June 3, 2011
F - 51
b) Subsidiaries – Sri Ramakrishna Theatres Limited effective May 28, 2011, Rave
Entertainment and Food Nepal Private Limited effective April 30, 2012, Reliance
MediaWorks (Malaysia) Sdn. Bhd. effective September 21, 2012 and Reliance
MediaWorks Big Cinemas Sdn. Bhd. effective September 21, 2012
12. Exceptional items includes:
a) Loss on sale of investment in subsidiaries in Malaysia, which operated in the theatrical
exhibition business aggregating to ` 2,722.90 lakhs
b) Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a
subsidiary of Digital Domain Media Group Inc. ('DDMG') for various services rendered.
On September 11, 2011, DDMG along with all its subsidiaries filed for bankruptcy
proceedings in the United States of America. The amount provided for outstanding
balances is ` 2,774.80 lakhs
c) Loss on Litigation settlement by US subsidiary of ` 2,683.90 lakhs. The subsidiary was a
defendant in a law suit regarding termination of a lease. During the previous year, the said
subsidiary received an adverse order for claim of damages by the landlord to the tune of
USD 4.9 million. The US Supreme Court has denied an appeal filed by the subsidiary
Company. Accordingly, the Subsidiary has made a provision of ` 2,683.90 lakhs for such
claim along with other charges payable as per the order. Considering its nature same has
been disclosed as an exceptional item.
13. For Period 2012, subsidiaries in USA and Nepal have been considered as non-integral and
subsidiaries in UK, Malaysia, Mauritius and Netherlands have been considered as integral to the
operations of the Parent Company in India.
14. Interest and finance charges (net) include loss on derivative transactions (net) of ` 5,966.80 lakhs.
III. Period 2011
1. Lease disclosure under AS 19 - „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Minimum
lease
payments (` in
lakhs)
For the Parent Company / Subsidiary Companies
Amounts due within one year from the balance sheet date 14,312.10
Amounts due in the period between one year and five years 61,643.10
Amount due after five years 84,795.60
160,750.80
For Joint ventures (Group's share)
Amounts due within one year from the balance sheet date 193.00
Amounts due in the period between one year and five years 176.90
F - 52
369.90
Amount payable within lock-in-period is ` 102,125.80 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 17,114.60 lakhs excluding
amount capitalised ` 906.20 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Group has assigned the derivative contract pertaining to Interest rate swap for long term
loans to a Company (Assignee), who has advised the Group regarding entering into these
contracts. The Assignee had advised the Group with regards to entering into these derivative
contracts and has indemnified the Company with regards to any mark to market losses that the
Group will have to incur on termination of these contracts. Consequently, the total mark to
market loss of ` 1,921.40 lakhs has not been recognised by the Group in its statement of profit
and loss. For the same reason, the Group has also not recognised a liability for these MTM losses and
amounts receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporatio
n
% of ownership
interest as at
March 31, 2011
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divyashakti Marketing Private Limited India 50%
Details of Joint ventures
Particulars Period 2011
(` in lakhs)
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 74.00
(b) Reserves and surplus 349.90
Share application money, pending allotment 125.00
LIABILITIES
Non-current liabilities
(a) Long-term borrowings 383.00
(b) Deferred tax liabilities (net) 38.40
(c) Other long-term liabilities 4.30
(d) Long-term provisions 1.00
F - 53
Particulars Period 2011
(` in lakhs)
Current liabilities
(a) Trade payables 103.70
(b) Other current liabilities 48.30
(c) Short-term provisions 80.30
Total 1,207.90
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets (including capital work-in-progress) 761.90
(b) Long-term loans and advances 168.00
Current assets
(a) Current investments 10.40
(b) Inventories 11.80
(c ) Trade receivables 84.60
(d) Cash and bank balances 33.90
(e) Short-term loans and advances 101.10
(f) Other current assets 36.20
Total 1,207.90
Statement of profit and loss
(a) Revenue from operations 1,093.00
(b) Other income 9.30
Total revenue 1,102.30
Expenses
Direct operational expenses 540.10
Employee benefits expense 54.40
Finance costs (net) 14.30
Depreciation / amortisation expense 112.00
Other expenses 419.60
Total expenses 1,140.40
Loss before tax (38.10)
Tax expenses
(1) Current tax 30.30
(2) Deferred tax (credit) (1.00)
Loss for the period (67.40)
OTHER MATTERS
1. Contingent liabilities 116.20*
2. Capital commitments Nil
*amount is not quantifiable in case of joint venture
Movement of the aggregate reserves of the joint ventures:
F - 54
Particulars Period 2011
(` in lakhs)
Reserves as at beginning of the period 491.30
Add: Share of loss for the period (67.40)
Reserves as at the end of the period 423.90
4. Foreign currency exposures (other than investments and fixed assets) not covered by
forward contracts
Particulars Currency As at March 31, 2011
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
Trade and other receivables USD 57.00 2,587.80
GBP 9.50 691.60
EURO 0.70 44.80
NPR 375.80 242.60
MYR 34.60 519.70
SGD 0.40 14.40
MUR 174.30 288.80
Trade and other payables USD 56.50 2,564.90
GBP 7.60 553.20
EURO 0.40 25.60
MYR 99.30 1,491.30
NPR 72.30 46.70
MUR 1.10 1.80
Loans / Buyers credit USD 147.70 6,705.10
MYR 53.20 799.00
Cash and bank balances USD 13.40 608.30
MYR 22.00 330.40
NPR 157.20 101.50
GBP 4.10 298.40
EURO 0.30 19.20
MUR 0.40 0.70
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency
Convertible Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840
lakhs which were convertible at any time on or after March 7, 2006 and up to the close of the
business on January 19, 2011 by the holders of the Bonds („the Bondholders‟) into newly issued
equity shares of the Company with full voting rights with par value of ` 5 each („Shares‟) at an
initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42 per share
with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. The Bonds were listed on the
F - 55
Singapore Exchange Securities Trading Limited („SGX ST‟). Of the above, bondholders holding
bonds of value Euro 633.50 lakhs opted for conversion in period ended March 31, 2008. During the
year ended March 31, 2009, the Company demerged its radio division to Reliance Broadcast
Network Limited. As per the terms of FCCB‟s issued, the conversion price of the bonds is subject
to adjustment and the Company was awaiting a confirmation from the bondholders till the date of
redemption. Unless previously redeemed, converted or purchased and cancelled, the bonds will
mature on January 26, 2011 at 121.679 per cent of the principal amount.
During the financial period ended March 31, 2008, the Company classified the liability towards
FCCB‟s as non–monetary liability inter-alia on the basis of the trend of earnings, movement of the
Company's share prices and conversion option exercised by the FCCB holders. On January 25,
2011, the entire FCCB‟S outstanding as at March 31, 2010, aggregating to Euro 206.50 lakhs have
been redeemed at ` 15,814.20 lakhs (including premium ` 3,085.40 lakhs). Consequently on
redemption, foreign exchange loss aggregating to ` 1,489.60 lakhs has been accounted.
6. Movement of goodwill
Particulars Period 2011
(` in lakhs)
Opening balance of goodwill 8,728.62
Goodwill for Subsidiaries acquired in the current year -
Goodwill for additional shares in Subsidiaries acquired in the current year (net) 90.80
8,819.42
7. The Parent Company's stake in share capital of Sultan Production Private Limited ('Sultan') is
in excess of 20%. This investment was made by the Parent Company with the intention of
investment in the movie "Sultan: The warrior". However, during Period 2009, the Company has
issued a letter of termination demanded refund for the moneys paid by the Company and filed a
recovery suit against Orcher Studios, as per a shareholders‟ agreement signed by the Company
which has been agreed to by Orcher Studios. Since, the Company has intention of selling the
shares; the Company has decided not to consider Sultan as an associate under AS-18 Related
Party Disclosures and AS-23 'Accounting for Associates in Consolidated Financial Statements.
The outstanding balance of Sultan Production Private Limited was ` 1,158.80 lakhs as at March
31, 2010, of which the Company has considered ` 120.00 lakhs as doubtful in Period 2010 and
provided for the same.
During Period 2011 Company have received all the money receivable as per the shareholders
agreement and sold the shares
8. During Period 2011, the Company has sold assets of ` 10,417.30 lakhs for `13,997.20 lakhs
pertaining to the theatrical exhibition segment and leased them back subsequently. The profit
on sale of these assets has been disclosed under the Annexure of other income.
9. For Period 2011, subsidiaries in USA and Nepal have been considered as non-integral and
subsidiaries in UK, Malaysia, Mauritius and Netherlands have been considered as integral to
the operations of the Parent Company in India.
10. Interest and finance (net) charge includes loss on derivative contract (net) ` 2,166.90 lakhs.
F - 56
IV. Period 2010
1. Lease disclosure under AS 19 – „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars Minimum
lease
payments (` in
lakhs)
For the Parent Company
Amounts due within one year from the balance sheet date 8,089.60
Amounts due in the period between one year and five years 33,154.40
Amount due after five years 71,712.40
112,956.40
For Subsidiaries
Amounts due within one year from the balance sheet date 2,453.90
Amounts due in the period between one year and five years 7,167.50
Amounts due after five years 10,170.30
19,791.70
For Joint ventures (Group's share)
Amounts due within one year from the balance sheet date 193.00
Amounts due in the period between one year and five years 369.90
562.90
Amount payable within lock-in-period is ` 74,381.30 lakhs.
Amount debited to profit and loss account for lease rental is ` 12,366.10 lakhs excluding amounts
capitalised ` 1,344.20 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Group has assigned the derivative contracts pertaining to Options for FCCB and interest
rate swap for long term loans to a Company (Assignee), who has advised the Group regarding
entering into these contracts. The Assignee had advised the Group with regards to entering into
these derivative contracts and has indemnified the Group with regards to any mark to market
losses that the Group will have to incur on termination of these contracts. Consequently, the
total mark to market loss of ` 2,750.40 lakhs has not been recognised by the Group in its profit
and loss account. For the same reason, the Group has also not recognised a liability for these
MTM losses and amounts receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
F - 57
Name of the Company
Country of
Incorporation
% of ownership
interest as at
March 31, 2010
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divyashakti Marketing Private Limited India 50%
Details of Joint ventures
Particulars
Period 2010
(` in lakhs)
I Assets
1. Fixed assets net block (including Capital work-in-progress) 871.00
2. Investments
-
3. Current assets, loans and advances
a) Inventories
11.40
b) Sundry debtors
70.50
c) Cash and bank balances
77.80
d) Interest accrued but not due
1.00
e) Loans and advances
277.80
II Liabilities
1. Shareholders' fund
491.30
2. Advance towards share application money 125.00
3. Unsecured loans
456.80
4. Deferred tax liability (net) 39.50
5. Current liabilities and provisions
a) Liabilities
153.90
b) Provisions
43.00
III Income
1. Income from theatrical exhibition (net of duties and taxes) 1,027.30
2. Other income
36.00
IV Expenses
1. Direct operational expenses
539.70
2. Personnel costs 53.60
3. Other operating and general administrative expenses
348.60
4. Depreciation
111.80
5. Interest
44.40
Loss before tax
(34.80)
Provision for tax (including deferred tax)
(47.50)
Profit after tax
12.70
V. Other matters
1. Contingent liabilities
948.20
2. Capital commitments
Nil
F - 58
Particulars
Period 2010
(` in lakhs)
Movement of the aggregate shareholders funds of the joint ventures:
At the beginning of the period
478.60
Add: Share of profits for the period
12.70
At the end of the period
491.30
4. Foreign currency exposures (other than investments and fixed assets) not covered by
forward contracts
Particulars Currency As at March 31, 2010
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 29.00 1,305.90
GBP 1.60 108.60
EURO 0.40 24.20
NPR 0.20 0.10
Sundry creditors USD 59.60 2,683.80
GBP 16.70 1,133.40
EURO 1.60 96.90
MYR 107.60 1,484.30
NPR 113.60 72.20
MUR 1.20 1.80
Loans and advances USD 14.20 639.40
GBP 6.20 420.80
EURO 0.10 6.10
MYR 31.40 433.20
NPR 296.60 188.40
MUR 174.30 265.00
Loans taken USD 101.90 4,588.60
MYR 53.20 733.90
NPR 443.30 281.60
Advance from
customer
USD 3.30 148.60
GBP 0.50 33.90
Cash and bank
balances
USD 54.70 2,463.10
MYR 28.00 386.20
NPR 1.50 1.00
GBP 1.10 74.70
F - 59
Particulars Currency As at March 31, 2010
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
EURO 0.10 6.10
MUR
Buyers credit USD 46.10 2,075.90
GBP 1.20 78.00
EURO 8.20 496.70
Foreign currency
convertible bonds
(FCCB) (refer note
(c) of B of Annexure
IV)
EURO 206.50 12,511.90
Provision for premium
on redemption on
FCCB
EURO 44.80 2,712.40
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency
Convertible Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840
lakhs. The Bonds are convertible at any time on or after March 7, 2006 and up to the close of
the business on January 19, 2011 by the holders of the Bonds („the Bondholders‟) into newly
issued equity shares of the Company with full voting rights with par value of ` 5 each („Shares‟)
at an initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42 per
share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. Of the above
bondholders holding bonds of value Euro 633.50 lakhs opted for conversion in Period 2008.
The balance bond values aggregating to EURO 206.50 lakhs are outstanding as on the balance
sheet date. During Period 2009, the Company demerged its radio division to Reliance
Broadcast Network Limited (refer note 1 of V of E of Annexure IV). As per the terms of bond
issue, the conversion price of the bonds is subject to adjustment, after agreement with the
bondholders. Pending finalisation of agreement, the revised conversion price is not yet decided.
Consequently the equity shares issuable on conversion of FCCB 2,061,884 have been computed
based on initial conversion price. The Bonds are listed on the Singapore Exchange Securities
Trading Limited („SGX ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on
or after January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain
conditions. Unless previously redeemed, converted or purchased and cancelled, the bonds will
mature on January 26, 2011 at 121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2010 is as follows:
F - 60
Period 2010
(` in lakhs)
Opening balance
3,084.79
Adj: foreign exchange fluctuation
(372.50)
Closing balance
2,712.29
During Period 2008, the Company classified the liability towards FCCB as non–monetary
liability inter-alia on the basis of the trend of earnings, movement of the Company's share
prices and conversion option exercised by the FCCB holders. The Company continues to
classify the liability towards FCCB as a non–monetary liability as in its view the current fall in
the market price of the Company‟s share price and non-conversion by bond holders is a
temporary aberration. Further, pursuant to scheme of demerger of the radio division, the
conversion price is subject to adjustment, after agreement with bond holders. The Company
estimates that there will be significant adjustments to conversion price considering the value of
Radio division which has demerged. Consequently, the foreign exchange fluctuation (gain) /
loss for the year ended March 31, 2010 aggregating to ` (1,718.10) lakhs has not been
recognised by management. Cumulative loss not recognised due to classification of FCCB as a
non-monetary liability is ` 1,272.20 lakhs in respect of outstanding FCCB's. Unrecognised
losses on FCCB's which were converted into equity shares in earlier periods is ` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV)
6. The Parent Company's stake in share capital of Sultan Production Private Limited ('Sultan') is
in excess of 20%. This investment was made by the Company with the intention of investment
in the movie "Sultan: The warrior". However, during Period 2010, the Company has issued a
letter of termination demanded refund for the moneys paid by the Parent Company and filed a
recovery suit against Orcher Studios, as per a shareholders agreement signed by the Company
which has been agreed to by Orcher Studios.
Since, the Parent Company has intention of selling the shares, the Company has decided not to
consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23 'Accounting
for Associates in Consolidated Financials Statements.
The outstanding balance of Sultan Production Private Limited is ` 1,158.80 lakhs of which the
Company has considered ` 120.00 lakhs as doubtful in Period 2010 and provided for the same.
7. Movement of goodwill
Particulars Period 2010
(` in lakhs)
Opening balance of goodwill 4,202.56
Goodwill for Subsidiaries acquired in the period 1,944.36
Goodwill for additional shares in Subsidiaries acquired in the period (net) 2,581.70
Total 8,728.62
8. For Period 2010, subsidiaries in USA and Nepal have been considered as non-integral and
subsidiaries in UK, Malaysia, Mauritius and Netherlands have been considered as integral to
the operations of the Parent Company in India.
F - 61
9. Interest and finance charges (net) include loss on derivative transactions (net) of ` 3,539.20
lakhs.
V. Period 2009
1. Demerger of the Radio Business of the Company to Reliance Broadcast Network Limited
The Board of the Company in their meeting held on October 25, 2008 approved a Scheme of
Arrangement („the Radio Scheme‟) between Reliance Broadcast Network Limited („RBNL‟), a
wholly owned subsidiary and the Company for the de-merger of the Radio business of the Company
into RBNL.
The shareholders of the Company accorded their approval in a court convened meeting of members
of the Company held on January 22, 2009. The Radio Scheme was approved by the Hon‟ble High
Court of Judicature at Bombay vide its order dated April 4, 2009 and filed with the Registrar of
Companies („ROC‟) on June 30, 2009, as required under Section 391(3) of the Act after obtaining
approval from the Ministry of Information and Broadcasting („MIB‟) for vesting of radio licenses
held by the Company in the name of RBNL.
As per the Radio Scheme, the Radio business of the Company stands transferred to RBNL with
effect from April 1, 2008, the Appointed Date and has been given effect to on June 30, 2009, being
the Effective Date and the accounting treatment prescribed by the Radio Scheme has been given
effect to in the financial statements for the year ended March 31, 2009.
All the assets of and liabilities, directly allocable and as mutually determined by the Board of
Directors of RBNL and the Company, of the Radio business as at April 1, 2008 have been
transferred at their respective book values. Further, general borrowings of the Company as on April
1, 2008 have been allocated between the Company and RBNL on the basis of ratio of total assets of
the Company immediately before giving effect of the Radio Scheme. In consideration of the
demerger, RBNL will allot equity shares of ` 5 each in the ratio of 1:1 and upon issue of shares as
above the Company‟s investment in shares of RBNL will stand cancelled.
As per the provisions of the Radio Scheme, excess balances of assets transferred over liabilities and
the cost of Investments in RBNL cancelled has been debited to Securities premium account as
follows:
Amount
(` in lakhs)
Assets of Radio Business as of April 1, 2008 transferred as per the provisions of the
Radio Scheme 44,929.50
Liabilities of Radio Business as of April 1, 2008 transferred as per the provisions of the
Radio Scheme (6,831.50)
General borrowings of the Company as of April 1, 2008 allocated between RBNL (Radio
Business) and the Company as per the provisions of the Radio Scheme (22,400.00)
Excess of net assets transferred to RBNL (Radio Business) 15,698.00
Cancellation of investment in RBNL 1,010.00
Total amount debited to Securities premium account as per the Provisions of the
Radio Scheme 16,708.00
The radio business has been held / carried on in trust for the period April 1, 2008 till the Effective
Date by the Company. Accordingly, the Company has charged interest, at an agreed rate on the
amount receivable as at the appointed date and subsequent funding till the effective date. The total
F - 62
receivable ` 26,095.00 lakhs (includes interest ` 2,584.90 lakhs) has been disclosed as a recoverable
from RBNL.
However, for Period 2009 financial statements, pending allotment of shares by RBNL, the
investment has been cancelled to give effect to the substance of the Radio Scheme as approved by
the Hon‟ble High Court of Judicature at Bombay and RBNL ceases to be a subsidiary for Period
2009 financial statements.
2. Scheme for merger of wholly owned subsidiaries with the Company
The Board of the Company in their meeting held on January 30, 2009 approved the Scheme of
Amalgamation („Amalgamation Scheme‟) of the Company („Transferee‟) with its wholly owned
subsidiaries Adlabs Multiplexes and Theatres Limited („AMTL‟), Adlabs Multiplex Limited
(„AML‟), Mahimna Entertainment Private Limited („MEPL‟) and Rave Entertainment Private
Limited („REPL‟) (collectively referred to as the Transferor Companies). The Amalgamation
Scheme was approved by the Hon‟ble High Court of Judicature at Bombay vide its order dated May
8, 2009 and filed with the Registrar of Companies („ROC‟) on May 29, 2009, as required under
Section 391(3) of the Act.
AMTL, AML and REPL are engaged in the exhibition business and has been included in the
exhibition segment. MEPL has been included in the unallocated corporate segment.
As per the Amalgamation Scheme, AMTL, AML, MEPL and REPL amalgamated with the
Company with effect from April 1, 2008, the Appointed Date and has been given effect to on May
29, 2009, being the Effective Date and the accounting treatment prescribed by the Amalgamation
Scheme has been given effect to in the financial statements for the Period 2009.
In accordance with the requirements of the Amalgamation Scheme, the credit aggregating ` 5,826.20
lakhs to Capital reserve has been arrived at as follows:
All assets and liabilities of the transferor companies as at April 1, 2008 which have been
identified by the Board of Directors have been recorded at their respective fair values (as
determined based on valuation reports from government approved valuer / management
estimates) as on March 31, 2009. Investments in the equity shares of the transferor companies
as appearing in the books of the Transferee Company as at March 31, 2009 have been
cancelled. The excess of net assets of the transferor companies taken over at fair value (as
determined on March 31, 2009) over the cost of investment in these companies, aggregating `
3,605.80 lakhs has been credited to Capital reserve.
The Company has recorded an increase in the value of its assets based on revaluation of certain
assets of the Company pertaining to the Exhibition and Film Services business. The total
increase in value of assets of the Company is ` 17,890.10 lakhs, based on revaluation reports
obtained from government approved external valuers. The Company has also reduced the value
of its assets by ` 15,669.70 lakhs (Fixed assets and intangible rights ` 3,989.50 lakhs, Debtors `
2,050.70 lakhs, Loans and advances including capital advances ` 6,188.50 lakhs and
Investments ` 3,441.00 lakhs). The net increase in the value of assets of the Company ` 2,220.40
lakhs has been credited to Capital reserve pursuant to the provisions of the Scheme.
F - 63
The authorised share capital of the transferor Companies was considered as authorised share
capital of the transferee Company. Hence, the authorised share capital of the Company has been
increased by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each.
The above mentioned accounting treatment is in accordance with the Amalgamation Scheme, had
the Company followed accounting treatment prescribed by AS – 14 “Accounting for
Amalgamations” / Indian GAAP:
The excess of investments over net assets acquired for the Company amounting to ` 1,939.10
lakhs would have been transferred to Goodwill and would have been amortised over 5 years.
The appreciation in the value of the Company‟s assets aggregating ` 17,890.10 lakhs would
have been credited to the Revaluation reserve instead of being credited to the capital reserve.
The diminution in the value of the Company‟s assets aggregating ` 15,669.70 lakhs would have
been debited to the profit and loss account instead of capital reserve. Accordingly, had the
Amalgamation Schemes as referred above been accounted for as per the requirements of AS –
14 “Accounting for Amalgamations” / Indian GAAP, the loss for the year would be higher by `
16,057.60 lakhs, capital reserve would have been lower ` 281.20 lakhs, revaluation reserve
would have been higher by ` 17,890.10 lakhs and balance of Goodwill would have been `
1,551.30 lakhs.
3. Lease disclosure under AS 19 - „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Minimum lease
payments (` in lakhs)
For the Parent Company
Amounts due within one year from the balance sheet date 6,724.30
Amounts due in the period between one year and five years 27,988.70
Amounts due after five years 71,374.40
Total 106,087.40
For Subsidiaries
Amounts due within one year from the balance sheet date 3,319.50
Amounts due in the period between one year and five years 8,465.20
Amounts due after five years 7,942.50
Total 19,727.20
For Joint venture (Group‟s share)
Amounts due within one year from the balance sheet date 2,046.70
Total 2,046.70
F - 64
Amount payable within lock-in-period is ` 39,398.00 lakhs.
Amount debited to profit and loss account for lease rental is ` 9,672.10 lakhs excluding amount
capitalised ` 1,244.10 lakhs.
4. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contracts pertaining to Options for FCCB and Interest rate
swap for long term loans to a Company(„Assignee‟), who has advised the Company regarding
entering into these contracts. The Assignee had advised the Company with regards to entering into
these derivative contracts and has indemnified the Company with regards to any mark to market
losses that the Company will have to incur on termination of these contracts. Consequently, the total
mark to market loss of `14,037.00 lakhs have not been recognised by the Company in its profit and
loss account.
For the same reason, the Company has also not recognised a liability for these MTM losses and
amounts receivable from the Assignee Company.
5. Interest in joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company Country of
Incorporation
% of ownership
interest as at
March 31, 2009
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divyashakti Marketing Private Limited India 50%
Details of Joint ventures
Period 2009
(` in lakhs)
I Assets
1. Fixed assets (including Capital work-in-progress) 964.20
2. Current assets, loans and advances
a) Inventories 11.20
b) Sundry debtors 53.70
c) Cash and bank balances 82.00
d) Interest accrued but not due 0.60
e) Loans and advances 115.00
II Liabilities
1. Shareholders' fund 478.60
2. Unsecured loans 506.80
3. Deferred tax liability (net) 55.70
4. Current liabilities and provisions
F - 65
Period 2009
(` in lakhs)
a) Liabilities 159.30
b) Provisions 26.30
III Income
1. Sales (net of duties and taxes) 1,186.70
2. Other income 92.00
IV Expenses
1. Operating expenses 956.80
2. Depreciation 109.70
3. Interest -
Profit before tax 212.20
Provision for tax (including deferred tax) 51.50
Profit after tax 160.70
V. Other matters
1. Contingent liabilities 1,016.10
2. Capital commitments Nil
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 404.90
Add: Share of profits for the period 160.70
Less: Dividend declared during the period (87.00)
At the end of the period 478.60
6. Foreign currency exposures (other than investments and fixed assets) not covered by
forward contracts
Particulars
Currency As at March 31, 2009
Foreign Currency
Amount (lakhs) Amount (` in lakhs)
Sundry debtors USD 34.60 1,805.20
GBP 0.50 37.10
EURO 0.20 13.80
Sundry creditors USD 45.00 2,347.80
GBP 2.30 170.60
EURO 0.10 6.90
MUR 133.60 216.80
MYR 0.60 8.60
NPR 2.80 1.80
Loans and advances USD 37.80 1,972.20
GBP 0.50 37.10
EURO 0.60 41.30
MYR 19.70 282.00
NPR 41.30 26.60
MUR 282.80 458.90
F - 66
Particulars
Currency As at March 31, 2009
Foreign Currency
Amount (lakhs) Amount (` in lakhs)
Cash and bank balances USD 16.70 871.30
MYR 68.70 983.30
NPR 54.70 35.30
GBP 1.10 81.60
EURO 0.40 27.60
Buyers credit USD 5.30 276.60
GBP 1.20 85.30
EURO 8.20 564.90
Unsecured loans USD 156.40 8160.10
Foreign Currency Convertible bonds
(„FCCB‟)
EURO 206.50 14,230.00
Provision for premium on redemption
of FCCB
EURO 44.80 3,084.80
7. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued Zero Coupon Foreign Currency Convertible
Bonds („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are convertible at any time
on or after March 7, 2006 and up to the close of the business on January 19, 2011 by the holders of
the Bonds („the Bondholders‟) into newly issued equity shares of the Company with full voting
rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in Terms and
Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `
54.26 = EUR 1.00. Of the above bondholders holding bonds of value Euro 633.50 lakhs opted for
conversion in the Period 2008. The balance bondholders holding bonds value aggregating to Euro
206.50 lakhs have not opted for conversion and outstanding as on the balance sheet date. The
conversion price is subject to adjustment in certain circumstances, such as demerger of divisions,
based on the agreement with bondholders and the Company. Pending finalisation of agreement, the
revised conversion price is not yet decided. Consequently the equity shares issuable on conversion
of FCCB have been computed based on initial conversion price. The Bonds are listed on the
Singapore Exchange Securities Trading Limited („SGX-ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or
after January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain
conditions. Unless previously redeemed, converted or purchased and cancelled, the bonds will
mature on January 26, 2011 at 121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2009 is as follows:
Particulars Period 2009
(` in lakhs)
Opening balance 2,839.89
Add: foreign exchange fluctuation 244.90
Closing balance 3,084.79
During Period 2008, the Company re-classified the liability towards Foreign Currency Convertible
Bonds ('FCCB') as non–monetary liability inter-alia on the basis of the trend of earnings, movement
F - 67
of the Company's share prices and conversion option exercised by the FCCB holders. The Company
continues to classify the liability towards FCCB as a non–monetary liability as in its view the
current fall in the market price of the Company‟s share price and non-conversion by bond holders is
a temporary aberration. Consequently, the foreign exchange fluctuation loss for the Period 2009
aggregating to ` 1,130.10 lakhs has not been recognised by the management. Cumulative loss not
recognised due to classification of FCCB as a non-monetary liability is ` 2,990.40 lakhs in respect of
outstanding FCCB's. Unrecognised losses on FCCB's which were converted into equity shares in
earlier periods is ` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV)
8. Impairment Disclosure
During Period 2009, the Company has impaired certain fixed assets pertaining to the:- Exhibition
Division on the basis of determination of value in use of each property, which the Company
considers as the relevant Cash Generating Unit („CGU‟) for the purpose of impairment testing. The
Company has considered a discount rate of 11.68%. The amount of impairment loss of ` 551.70
lakhs has been debited to the Capital reserve pursuant to Scheme of Amalgamation.
(Refer note 2 of V of E of Annexure IV)
9. Movement of Goodwill
Particulars Period 2009
(` in lakhs)
Opening balance of goodwill 2,746.76
Goodwill, reversed on Subsidiaries which have been amalgamated in the Period 2009 (1,605.50)
Goodwill for Malaysia Subsidiary acquired in the Period 2009 3,060.70
Goodwill for additional shares in Subsidiaries acquired in the Period 2009 0.60
Total 4,202.56
10. For Period 2009, subsidiaries in USA have been considered as non-integral and subsidiaries in
UK, Malaysia, Mauritius, Nepal and Netherlands have been considered as integral to the
operations of the Parent Company in India.
11. Interest and finance (net) charge includes loss on derivative contract (net) ` 4,864.90 lakhs.
VI. Period 2008
1. Modified Composite Scheme of amalgamation and arrangement
The Board of the Company at their meeting held April 23, 2006 approved the Composite Scheme of
amalgamation and arrangement between the Company, Entertainment One India Limited („E-
ONE‟), Adlabs Multiplex and Theatres Limited („AMTL‟) and Reliance Broadcast Network
Limited („RBNL‟). The shareholders of the Company accorded their approval to the Composite
Scheme at the Annual General Meeting on July 29, 2006. The Composite Scheme was approved by
F - 68
the Hon'ble High Court of Judicature at Bombay vide its order dated September 15, 2006. The
Composite Scheme inter-alia provided for the following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
the demerger of the radio business of the Company to RBNL effective March 31, 2006.
The Company had made an application to the Ministry of Information and Broadcasting for vesting
of radio licenses held by it in the name of RBNL. Pending the said approval, the Composite Scheme
was not filed with the Registrar of Companies ('ROC') as required under Section 391(3) of the
Companies Act, 1956 ('the Act'). However, for the purpose of the fifteen month period ended June
30, 2007 financial statements, pending completion of licensing and other procedural formalities, the
Composite Scheme was given effect to in view of the Court approval and to give effect to the
substance of the Composite Scheme as approved by the Hon'ble High Court of Judicature at
Bombay
In accordance with the requirements of the Composite Scheme, the merger of E-ONE as well as the
digital business of AMTL and the demerger of the radio business of the Company was accounted
for as follows:
All assets and liabilities of E-ONE as at April 1, 2005 were recorded by the Company at
their fair values. Since E-ONE was a wholly owned subsidiary of the Company, the
investment by the Company in the shares of E-ONE was cancelled against the assets and
liabilities acquired on amalgamation. The excess of net assets taken (at fair value) over the
cost of investment in EONE amounting to ` 272.58 lakhs was credited to 'Amounts pending
transfer to the Securities premium account and / or General reserve account as per the
Composite Scheme of amalgamation and arrangement'.
All assets and liabilities of the digital business of AMTL as at April 1, 2005 were recorded
by the Company at their book values. Since AMTL was a wholly owned subsidiary of the
Company, no consideration was paid against the assets and liabilities acquired. The excess
of liabilities over the assets taken over (at book value) amounting to ` 44.69 lakhs was
debited to 'Amounts pending transfer to the Securities premium account and / or General
reserve account as per the Composite Scheme of amalgamation and arrangement'.
All assets and liabilities of the radio business of the Company as at March 31, 2006 were
transferred at their respective book values. The aggregate value of net assets transferred
pursuant to the Composite Scheme in excess of ` 10,000.00 lakhs (which was recorded as
receivable from RBNL) was recorded in 'Amounts pending transfer to the Securities
premium account and/or General reserve account as per the Composite Scheme of
amalgamation and arrangement'
Subsequently during the current period, the Board modified the aforesaid Composite Scheme vide
circular mode pursuant to Section 289 of the Companies Act, 1956 on February 13, 2008. The
Modified Composite Scheme of amalgamation and arrangement (the Modified Scheme) between the
Company, E-ONE and AMTL was approved by the Hon'ble High Court of Judicature at Bombay
vide its order dated March 7, 2008 and was filed with the ROC as required under Section 391(3) of
the Companies Act, 1956 ('the Act') on March 31, 2008.The Modified Scheme inter-alia provides
for the following:
F - 69
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
adjusting the net results of the transactions related to radio business from March 31, 2006
till the effective date in the General reserve account of the Company.
As the Composite Scheme was primarily modified in relation to the radio business, in respect of
amalgamation of E-ONE and merger of digital business of AMTL, these were already given effect
to in the financial statements of the fifteen month period ended June 30, 2007. Accordingly, no
further adjustments are made in the current period's financial statements, except that the amounts
which were not credited / debited to 'Securities premium' / 'General reserve' pending filing the
Composite Scheme with ROC have now been debited / credited to Securities premium / General
reserve as applicable on the filing of the Modified Scheme with the ROC.
During the Period upto March 31, 2008, E-ONE and AMTL carried on their existing business in
trust for and on behalf of the Company. All vouchers, deeds, licenses, agreements, loan documents,
etc are in the name of E-ONE and AMTL. The tile deeds, licenses, agreements, loan documents, etc
are being transferred in the name of the Company.
As regards the Radio business, the provision relating to demerger of the radio business of the
Company to RBNL effective March 31, 2006 as provided in the Composite Scheme and given
effect to in the fifteen month period ended June 30, 2007 financial statements has been deleted in
the Modified Scheme. Accordingly, all the adjustments effected in the fifteen month ended June 30,
2007 financial statements in this regard have been reversed during the current period. Further, in
accordance with the Modified Scheme, the net results of the transactions related to radio business
for the period from March 31, 2006 till the effective date i.e. March 31, 2008 have been debited to
General reserve account of the Company.
The net results of the transactions related to radio business for the period from March 31, 2006 up to
March 31, 2008 are summarised hereunder:
Particulars Period 2008
(` in lakhs)
Fifteen
month period
ended June
30, 2007
(` in lakhs)
Income 11,160.90 3,320.30
Expenditure
Direct costs 5,062.10 2,024.60
Personnel costs 3,477.60 2,528.10
Other operating and general administrative expenses * 5,584.10 4,547.60
Interest 1,346.30 2,119.90
Depreciation / amortisation 2,396.60 1,474.80
Loss before taxation (6,705.80) (9,374.70)
Tax Expenses - fringe benefit tax 114.90 75.50
Loss after tax (A) (6,820.70) (B) (9,450.20)
Total (A + B) (16,270.90)
Tax effect of the above 1,907.60
Balance transferred to General reserve account 14,363.30
F - 70
* includes ` 785.80 lakhs (Fifteen month ended June 30, 2007: ` 2,086.70 lakhs, since reversed)
being interest etc. allocated / charged in the fifteen month ended June 30, 2007 by Company to the
Radio Business on net funds utilised in carrying on the radio business.
For deviation to the accounting treatment recommended in the standard refer note 3 of VI of E of
Annexure IV.
2. Acquisition of Rave Entertainment Private Limited ('REPL')
On May 31, 2007, the Company entered into a Share Purchase Agreement ('SPA') with the
shareholders of Rave Entertainment Private Limited ('REPL'), a company engaged inter-alia in the
business of owning and operating multiplexes, for acquisition of 100% stake in that company. One
of the conditions precedent to the SPA was the approval by the Hon'ble High Court of Judicature at
Allahabad of the Scheme of demerger filed by REPL for demerger of Kanpur properties. Pending
approval of the Scheme of demerger by the said Court, the shares of REPL were held in Escrow and
the consideration of ` 500 lakhs was disclosed under loans and advances in the last period's
financial statements. On December 12, 2007, the Hon'ble High Court of Judicature at Allahabad
approved the said Scheme of demerger. Consequently, REPL is now a wholly owned subsidiary of
the Company and the amounts placed in Escrow and those disclosed under loans and advances have
been adjusted as per the terms of the SPA.
3. Acquisition of Katch 22 Entertainment Private Limited ('Katch 22')
On April 23, 2007, the Company acquired 100% stake in Katch 22, a company engaged in the
production and distribution of films. Subsequently, pursuant to the Board of Directors' approval
vide resolution dated April 26, 2007, the Company had filed the Scheme of amalgamation of Katch
22 ('the Katch 22 Scheme') with the Hon'ble High Court of Judicature at Bombay for the merger of
Katch 22 with the Company effective April 1, 2006. The Katch 22 Scheme was approved by the
Hon'ble High Court of Judicature at Bombay vide its order dated September 14, 2007 and filed with
the ROC on October 9, 2007. The Katch 22 Scheme inter-alia provides for the amalgamation of
Katch 22 Entertainment Private Limited with the Company effective April 1, 2006.
In accordance with the requirements of the said Katch 22 Scheme, the merger of Katch 22 with the
Company has been accounted for as follows:
As per the Katch 22 Scheme, Katch 22 amalgamates with the Company retrospectively
from April 1, 2006, the Appointed Date. All assets and liabilities of Katch 22 as at April 1,
2006 have been recorded by the Company at their fair values. Since Katch 22 was a wholly
owned subsidiary of the Company, the investment by the Company in the shares of Katch
22 has been cancelled against the assets and liabilities acquired on amalgamation. The
excess of net assets taken over at fair value (as determined on the effective date i.e.
October 9, 2007) over the cost of investment in Katch 22 amounting to ` 201.80 lakhs has
been credited to General reserve account.
The Company has also recorded the reduction of ` 2,000 lakhs in the value of its assets
(debtors, unamortised rights and loans and advances) by debit to 'General reeserve account'
as per the provisions of the Katch 22 Scheme.
F - 71
The net results of the transactions relating to Katch from April 1, 2006 upto the Effective Date are
as follows:
Particulars For the period
from July 1, 2007
to October 8, 2007
(` in lakhs)
Fifteen month
period ended
June 30, 2007
(` in lakhs)
Sales and Service (net) - 701.90
Other Income 23.30 -
Total Revenue 23.30 701.90
Direct costs - 1,691.30
Other operating and general administrative expenses 0.20 0.10
Interest - 131.60
Profit Before taxation 23.10 (1,121.10)
Tax expenses - -
Profit after tax 23.10 (1,121.10)
Impact of Schemes referred to in notes 1 of VI of E of Annexure IV and 3 of VI of E of
Annexure IV:
Had the Company followed the accounting treatment prescribed by AS-14 / generally accepted
accounting principles in India:
` 201.80 lakhs arising from the merger of Katch 22 with the Company and credited to the
General reserve account would have been credited to Capital reserve account;
Reduction of ` 2,000.00 lakhs in value of the Company's assets would have been debited to
the Profit and loss account instead of General reserve account;
` 2,086.70 lakhs being interest on monies advances by the Company to the Radio Business
would have been reversed in the profit and loss account as against the reversal in the
General reserve; and
the net results (loss) of the transactions related to Radio Business from March 31, 2006
upto the Effective date i.e. March 31, 2008 aggregating to ` 14,363.30 lakhs (net of tax
benefits) arising from modification in the Scheme of demerger of Radio Business and
debited to the General reserve account would have been debited to profit and loss account.
Accordingly, had the Modified Scheme been accounted for in compliance with the requirements of
AS 14 / generally accepted accounting principles in India, the profit for the period before tax would
have been lower by ` 18,450.00 lakhs, General reserve account would have been higher by `
18,248.20 lakhs and Capital reserve account would have been stated at ` 201.80 lakhs.
4. Lease disclosure under AS 19 - „Leases‟
The Group is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
F - 72
Particulars Period 2008
(` in lakhs)
For the Parent Company
Amounts due within one year from the balance sheet date 4,607.80
Amounts due in the period between one year and five years 18,978.80
Amounts due after five years 53,463.80
Total 77,050.40
For Subsidiaries
Amounts due within one year from the balance sheet date 465.40
Amounts due in the period between one year and five years 1,936.40
Total 2,401.80
For Joint venture (Group‟s share)
Amounts due within one year from the balance sheet date 114.00
Amounts due in the period between one year and five years 104.50
Total 218.50
Amount payable within lock-in-period is ` 38,309.40 lakhs.
Amount debited to profit and loss account for lease rental is ` 3,287.20 lakhs.
5. Interests in Joint Venture
The Group's interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company Country of
incorporation % of ownership
interest as at March 31, 2008
Swanston Multiplex Cinemas Private Limited India 50.00% Adlabs Multiplex Limited (Became wholly owned subsidiary with effect from December 20, 2007)
India -
Cineplex Private Limited India 50.00% Divyashakti Marketing Private Limited India 50.00%
Details of Joint ventures
Particulars Period 2008 (` in lakhs)
I. Assets 1. Fixed assets (including Capital work-in-progress) 1,063.80 2. Investments 56.40 3. Current assets, loans and advances a) Inventories 8.50 b) Sundry debtors 88.40 c) Cash and bank balances 69.30 d) Interest accrued but not due 0.50 e) Loans and advances 73.50 II. Liabilities
1. Shareholders' fund 478.90
F - 73
Particulars Period 2008 (` in lakhs)
2 Unsecured loans 634.60 3. Deferred tax liability (net) 54.10 4. Current liabilities and provisions a) Liabilities 179.60 b) Provisions 13.20 III. Income
1. Sales (net of duties and taxes) 1024.10 2. Other income 102.80 IV. Expenses
1. Operating expenses 911.30 2. Depreciation 102.10 3. Interest 0.60 4. Profit before tax 112.90 5. Prior period adjustments (0.40) 6. Provision for tax (including deferred tax) 30.00 7. Profit after tax 83.30 V. Other matters
1. Contingent liabilities 2,032.20 2. Capital commitments - Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 497.10 Add: Share of loss for the period (18.20) At the end of the period 478.90
6. Foreign currency exposures (other than investments and fixed assets) not covered by
forward contracts
Particulars Currency
Period 2008 Foreign Currency
Amount (lakhs) Amount
(` in lakhs)
Sundry debtors USD 6.00 239.80 EURO 0.10 6.50
GBP 3.70 290.80 Sundry creditors USD 43.80 1,958.00 EURO 0.30 15.40 GBP 8.30 524.40 MUR 0.70 1.10 Unsecured loans USD 35.80 1,433.80 EURO 13.20 839.30 GBP 0.10 9.00 Zero Coupon Foreign Currency Convertible Bonds („FCCB‟) (Refer note (c) of B of Annexure IV)
EURO 206.50 13,099.90
Provision for premium on redemption of FCCB
EURO 44.80 2,899.90
7. Foreign Currency Convertible Bonds („FCCB‟)
F - 74
On 25 January 2006 the Company ('Issuer') issued Zero Coupon Foreign Currency Convertible
Bonds ('Bonds' or 'FCCB') aggregating Euro 840 lakhs. The Bonds are convertible at any time on or
after 7 March 2006 and upto the close of the business on January 19, 2011 by the holders of the
Bonds ('the Bondholders') into newly issued equity shares of the Company with full voting rights
with par value of ` 5 each ('Shares') at an initial conversion price (as defined in Terms and
Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `
54.26=EUR 1.00. The conversion price is subject to adjustment in certain circumstances. The Bonds
are listed on the Singapore Exchange Securities Trading Limited ('SGX-ST').
The Bonds may be redeemed, in whole but not in part, at the option of the Issuer at any time on or
after January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain
conditions. Unless previously redeemed, converted or purchased and cancelled, the bonds will
mature on January 26, 2011 at 121.679 per cent of the principal amount.
During the Period 2008, bond holders holding bonds aggregating Euro 633.50 lakhs have opted to
convert the bonds to equity shares. Accordingly shares aggregating to 6,325,420 have been issued to
them at a price of ` 543.42 per share (including securities premium of ` 538.42 per share).
Period 2008
(` in lakhs)
Opening balance 10,006.59
Add: Reversal of provision for premium on conversion of FCCB (7,858.20)
Add: foreign exchange fluctuation 691.50
Closing balance 2,839.89
* Premium payable on redemption of FCCB ` 9,880.90 lakhs has been fully provided for and has
been charged to securities premium account. During the period, Bond holders holding bonds
aggregating Euro 633.50 lakhs have opted to convert their bonds into equity shares.
During the Period 2008, FCCBs have been reclassified as non-monetary liabilities pursuant to inter-
alia the current trend of earnings and market price of the Company's equity share exceeding the
conversion price stipulated in the offer document (bondholders holding 75.42% of the FCCB have
exercised conversion option to this date). Consequently, the foreign exchange fluctuation loss
aggregating to ` 438.10 lakhs accounted in the fifteen month period ended June 30, 2007 and year
ended 31 March 2006 has been reversed during the period in the Profit and Loss account and
foreign exchange fluctuation loss of ` 3,621.80 lakhs for the financial period has not been
recognised in the profit and loss account.
(Refer note (c) of B of Annexure IV)
8. For Period 2008, subsidiaries in USA, UK, Mauritius, and Netherlands have been considered as
integral to the operations of the Parent Company in India.
F - 75
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012 March 31,
2011
March
31,
2010
March
31, 2009
March 31,
2008
Authorised
Equity shares of
` 5/-each 24,000.00 24,000.00 5,000.00
5,000.0
0 4,602.90 3,000.00
Preference
shares of `5/-
each 1,000.00 1,000.00 - - - -
25,000.00 25,000.00 5,000.00
5,000.0
0 4,602.90 3,000.00
Issued,
subscribed and
paid-up capital
Equity shares of
` 5/- each, fully
paid-up 2,306.31 2,306.31 2,306.31
2,306.3
1 2,306.31 2,306.31
10 %
redeemable non
convertible non
cumulative
preference
shares
(Preference
shares) of ` 5/-
each, fully paid-
up 147.50 147.50 - - - -
2,453.81 2,453.81 2,306.31
2,306.3
1 2,306.31 2,306.31
(refer notes (a) to (i) below)
(a) Reconciliation of the shares outstanding at the commencement and at the end of the period
Equity shares
No of
Shares No of Shares No of Shares
No of
Shares
No of
Shares No of Shares
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
(In
lakhs) (In lakhs)
At the
commencement
of the period 461.26 461.26 461.26 461.26 461.26 398.00
Share issued
during the
period - - - - - 63.26
F - 76
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012 March 31,
2011
March
31,
2010
March
31, 2009
March 31,
2008
At end of the
period 461.26 461.26 461.26 461.26 461.26 461.26
Preference shares
No of
Shares No of Shares No of Shares
No of
Shares
No of
Shares No of Shares
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
(In
lakhs) (In lakhs)
At the
commencement
of the period 29.50 - - - - -
Share issued
during the
period - 29.50 - - - -
At end of the
period 29.50 29.50 - - - -
(b) Rights, preferences and restriction attached to equity shares
The Company has only one class of equity shares having par value of ` 5 per share. Each equity holder
is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees.
The dividend proposed, if any by the Board of the Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the shareholders.
(c) Rights, preferences and restriction attached to Preference share
Preference shares shall be redeemed at the end of 20 years from the date of allotment i.e. each
Preference shares shall be redeemed at a premium calculated in a manner that gives the holder an
yield of 10% p.a. (till date of redemption ) on issue price of ` 1,000 (including premium of ` 995) after
deduction of dividend, if any declared during the tenure. However, the premium on redemption will
be paid only to the original subscribers or to the transferees if the transfers have been previously
approved by the Company.
Further early redemption at the option of holder of Preference shares can be done, at issue price plus
yield as mentioned above, at any time after the date of allotment by giving not less than two months
advance notice to the Company. Early redemption at the option of Company at the applicable
redemption price can be done, any time after the date of allotment by giving not less than 30 days
notice to the Preference share holder.
(d) Names of shareholders holding more than 5% of equity share in the Company
No of
Shares No of Shares No of Shares
No of
Shares
No of
Shares No of Shares
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
(In
lakhs) (In lakhs)
Reliance Land 206.00 206.00 206.00 206.00 206.00 206.00
F - 77
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012 March 31,
2011
March
31,
2010
March
31, 2009
March 31,
2008
Private Limited
Reliance Capital
Limited 85.29 85.29 81.05 81.05 29.55 -
AAA
Entertainment
Private Limited - - - - 48.00 48.00
%
holding
in the
class
% holding
in the class
% holding
in the class
%
holding
in the
class
%
holding
in the
class
% holding
in the class
Reliance Land
Private Limited 44.66% 44.66% 44.66% 44.66% 44.66% 44.66%
Reliance Capital
Limited 18.49% 18.49% 17.57% 17.57% 6.41% -
AAA
Entertainment
Private Limited - - - - 10.40% 10.40%
(e)
Names of
shareholders
holding more
than 5% of
Preference
share in the
Company
No of
Shares No of Shares No of Shares
No of
Shares
No of
Shares No of Shares
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
(In
lakhs) (In lakhs)
Reliance
Infocomm
Engineering
Private Limited 12.00 12.00 - - - -
Reliance Utility
Engineers
Private Limited 17.50 17.50 - - - -
%
holding
in the
class
% holding
in the class
% holding
in the class
%
holding
in the
class
%
holding
in the
class
% holding
in the class
Reliance
Infocomm
Engineering
Private Limited 40.68% 40.68% N.A. N.A. N.A. N.A.
F - 78
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012 March 31,
2011
March
31,
2010
March
31, 2009
March 31,
2008
Reliance Utility
Engineers
Private Limited 59.32% 59.32% N.A. N.A. N.A. N.A.
(f) Pursuant to shareholder approval dated March 30, 2012, the authorised share capital of the Company
was reclassified from 1,000 lakh equity shares of ` 5 each to 800 lakh equity shares of ` 5 each and 200
lakh preference shares of ` 5 each.
(g) Pursuant to shareholder approval dated July 13, 2012, the authorised share capital of the Company
was increased from ` 5,000 lakhs to ` 25,000 lakhs divided into 4,800 lakh equity shares of ` 5 each
and 200 lakh preference shares of ` 5 each.
(h) During Period 2009, the authorised share capital of the Company has been increased as per the
provisions of Scheme of Amalgamation by ` 1,602.90 divided into 32,058,000 shares of ` 5 each.
(refer note 1 of VI of E of Annexure IV)
(i) During the Period 2008, bond holders holding bonds aggregating EURO 633.50 lakhs have opted to
convert their bonds to equity shares. Accordingly, equity shares aggregating to 63.26 lakhs have been
issued to them at a price of ` 543.42 per share (including securities premium of ` 538.42).
F - 79
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
a) Securities
premium
reserve
At the
commencement
of the period 76,214.64 46,862.14 47,235.25 46,862.75 63,815.65 25,824.54
Less : Provision
for premium on
redemption of
Zero Coupon
Foreign
Currency
Convertible
Bonds ('FCCB')
(Also refer note
(c ) of B of
Annexure IV) - - (373.11) 372.50 (244.90) (691.50)
Add : On
issuance of
equity shares
pursuant to
conversion of
FCCB‟s - - - - - 34,161.66
Add : Premium
on issuance of
preference
shares - 29,352.50 - - - -
Less:
Adjustment
pursuant to
Katch 22
Scheme (Refer
note 3 of VI of
E of Annexure
IV) - - - - - (1,287.00)
Add : Reversal
of provision for
premium on
FCCB converted
during the
period (Also
refer note (c ) of
B of Annexure
IV)
- - - - 7,858.20
-
F - 80
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
Less :
Adjustment
pursuant to
Modified
Composite
Scheme of
Amalgamation
and
Arrangement
(Refer note 1 of
VI of E of
Annexure IV)
- - - - (2,050.25)
Less:
Adjustment
pursuant to
Scheme of
Arrangement for
demerger of
Radio business
(refer note 1 of
V of E of
Annexure IV) - - - - (16,708.00) -
76,214.64 76,214.64 46,862.14 47,235.25 46,862.75 63,815.65
b) General
reserve
At the
commencement
of the period 911.95 790.62 888.42 1,210.22 1,324.82 5,633.54
Add : Transfer
from Statement
of profit and
loss - 151.03 - - - 11,580.20
Add : Transfer
on account of
Scheme of
Amalgamation
of Katch 22
(Refer note 3
of VI of E of
Annexure IV)
- - - - 201.80
-
F - 81
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
Less : Reduction
in value of
Companies
assets pursuant
to Scheme of
Amalgamation
of Katch 22
(Refer note 3 of
VI of E
Annexure IV) - - - - - (2,000.00)
Less : Net result
of the
transactions
relating to Radio
business
adjusted
pursuant to
Modified
Composite
Scheme of
Amalgamation
and
Arrangement
(Refer note 1 of
VI of E of
Annexure IV) - - - - - (14,363.30)
Less:
Transferred to
Capital
Redemption
reserve - (29.70) (97.80) (321.80) (114.60) -
Add :
Adjustment
pursuant to
Modified
Scheme of
Amalgamation
and
Arrangement
(Refer note1of
VI of E of
Annexure IV)
- - - - 272.58
-
911.95 911.95 790.62 888.42 1,210.22 1,324.82
c) Capital reserve
on
consolidation - - - 240.70 -
F - 82
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
d) Capital reserve
–I At the
commencement
and end of the
period 33.88 33.88 33.88 33.88 33.88 33.88
e) Capital reserve
- II
At the
commencement
of the period 5,826.20 5,826.20 5,826.20 5,826.20 - -
Amounts
transferred to
Capital reserve
as per provisions
of the Scheme
of
Amalgamation
(Refer note 2 of
V of E of
Annexure IV) - - - - 5,826.20 -
5,826.20 5,826.20 5,826.20 5,826.20 5,826.20 -
f) Capital
redemption
reserve
At the
commencement
of the period
1,200.00 534.20 436.40 114.60 - -
Add:
Transferred
from profit and
loss - 636.10 - - - -
Add:
Transferred
from general
reserve - 29.70 97.80 321.80 114.60 -
1,200.00 1,200.00 534.20 436.40 114.60 -
g) Foreign
Currency
Translation
Reserve
At the
commencement
of the period 654.44 (315.04) (428.85) 262.12 - -
F - 83
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
Add: Foreign
currency
translation gain /
(loss) on non-
integral
operations (net) (452.59) 969.48 113.81 (690.98) 262.12 -
201.85 654.44 (315.04) (428.85) 262.01 -
h) Amount
pending
transfer to the
Securities
premium
reserve and / or
the General
reserve as per
the Composite
Scheme of
Amalgamation
and
Arrangement
(Refer note 1 of
VI of E of
Annexure IV)
i) Pending
transfer to
Securities
premium
reserve
At the
commencement
of the period - - - - - (10,015.64)
Reversal due to
the Modified
Scheme of
Amalgamation
and
Arrangement - - - - - 7,965.39
Transfer to
Securities
premium reserve - - - - - 2,050.25
- - - - - -
ii) Pending
transfer to
General
reserve
F - 84
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
At the
commencement
of the period - - - - - 272.58
On merger of E-
ONE transfer to
General Reserve - - - - - (272.58)
Transfer to
General reserve - - - - - -
I) (Deficit) /
Surplus in
Statement of
profit and loss
At the
commencement
of the period (145,399.94) (53,333.09) (20,481.64) (7,615.79) 302.39 11,340.87
(Loss) / Profit
for the period, as
per Statement of
profit and loss (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.97) 1,998.52
Reduction of
Reserves on sale
of subsidiaries
and joint
ventures - (148.43) - - - -
Appropriations
Transfer to
general reserve - (151.00) - - - (11,580.20)
Capital
redemption
reserve - (636.10) - - - -
Proposed
dividend on
preference
shares of a
subsidiary - (43.90) (46.60) (53.50) (76.00) (84.00)
Proposed
dividend on
equity shares of
a subsidiary - - - - - (1,153.15)
Dividend tax on
proposed
dividend on
preference
shares of a
subsidiary
- (7.10) (7.90 (9.11) (12.91) (14.28)
F - 85
Annexure VI
Reliance MediaWorks Limited
Summary statement of reserves and surplus, of the Group, as restated
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
Dividend tax on
proposed
dividend on
equity shares (105.40) (63.70) - - (41.30) (205.37)
(179,550.11) (145,400.94) (53,333.09) (20,481.64) (7,615.79) 302.39
(95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74
The above statement should be read together with significant accounting policies and notes to summary
statements of the Group (Annexure IV)
F - 86
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current
assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
A Non-current
investments
I Investment in
Equity
Instruments
(Unquoted)
Others (non-trade,
unquoted and at
cost)
a Sultan Production
Private Limited
(refer note 7 of III
of E Annexure IV) - - - 1.00 1.00 1.00
b Manipal Industries
Limited - - 0.01 0.01 0.01 0.01
C Efficient
Management
Services Private
Limited - - 0.02 0.02 0.02 0.02
- - 0.03 1.03 1.03 1.03
II Investment in
Associates
A GH – Reliance LLC 8,198.30 - - - - -
III Investment in
Partnership Firm
(Unquoted and at
cost)
a Gold Adlabs 507.20 507.04 540.30 524.50 503.40 529.60
b HPE / Adlabs LP 1,999.30 1,999.30 1,999.30 1,999.30 2,241.00 4,607.75
(2009 and 2010 `
2,366.80 lakhs
towards recovery of
principal pursuant
to a contract and
2010; ` 241.70 lakhs
has been repaid by
the partnership firm
as principal)
F - 87
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current
assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Less : -Provision for
diminution in value
of the long term
investments (1,999.30) (1,999.30) (1,999.30) (1,999.30) (2,241.00) -
507.20 507.04 540.30 524.50 503.40 5,137.35
IV Investment in
preference shares
(non-trade,
unquoted and at
cost)
Tree of Knowledge
DOT Com Private
Limited # - - - - 1,200.00 1,200.00
Less : -Provision for
diminution in value
of the long term
investments - - - - (1,200.00) -
- - - - - 1,200.00
V Investment in
Government
securities (trade,
unquoted and at
cost)
Government
securities
a National savings
certificates 30.30 30.30 34.30 114.40 104.50 100.20
(Pledged with State
government
authorities)
B Rural Electrification
Corporation Bond - - - 22.00 22.00 22.00
30.30 30.30 34.30 136.40 126.50 122.20
VI Investment in
mutual fund (non-
trade, unquoted
and at lower of
cost and fair value) 100.50 16.00 518.36 610.48 530.79 530.79
Total 8,836.30 553.34 1,092.99 1,272.41 1,161.72 6,991.37
Aggregate value of
unquoted 10,835.60 2,552.64 3,092.29 3,271.71 4,602.72 6,991.37
F - 88
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current
assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
investments
Aggregate provision
for diminution in
value of
investments 1,999.30 1,999.30 1,999.30 1,999.30 3,441.00 -
B Deferred tax asset
Arising on account
of timing difference
in:
Provision for leave
encashment and
gratuity 192.05 254.80 274.60 130.50 137.10 207.30
Others* 5,345.13 3,258.81 39.20 79.30 584.10 186.10
Unabsorbed
depreciation
allowance and
carried forward
business loss * 1,593.18 1,895.10 4,101.77 2,215.30 1,093.90 1,899.30
7,130.36 5,408.71 4,415.57 2,425.10 1,815.10 2,292.70
Deferred tax
liability
Arising on account
of timing difference
in:
Depreciation/
amortisation (net) 6,782.77 5,019.30 4,929.36 2,485.89 1,862.99 2,420.33
Others 321.48 375.10 - 0.40 - -
7,104.25 5,394.40 4,929.36 2,486.29 1,862.99 2,420.33
Net deferred tax
assets / (liabilities) 26.11 14.31 (513.79) (61.19) (47.89) (127.63)
* Restricted to the
extent of deferred
tax liability due to
absence of virtual
certainty
The net asset /
(liability) has been
shown as the Group
does not have the
option to set off the
balances of
individual
Companies.
Deferred tax asset 26.11 14.31 2.60 2.20 18.70 64.40
F - 89
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current
assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Deferred tax
liability
-
- 516.39 63.39 66.59 192.03
Net deferred tax
asset / (liability) 26.11 14.31 (513.79) (61.19) (47.89) (127.63)
C Long-term loans
and advances
- Unsecured,
considered good
I Capital advances 652.90 905.20 1,712.91 2,868.32 1,931.27 9,613.49
II Security deposits 13,378.10 13,878.10 17,788.75 17,484.12 16,926.55 14,799.22
III Loans to others 96.90 271.90 206.20 266.11 320.00 385.30
IV Advance tax, tax
deducted at source,
advance fringe
benefit tax (net of
provision for tax
Period March 2013
- ` 1,291.70 lakhs,
Period 2012 - ` 1,
292.40 lakhs,
Period 2011 - `
638.30 lakhs,
Period 2010 – `
1,144.90 lakhs,
Period 2009 - `
4,006.26 lakhs,
Period 2008 - `
4,818.37 lakhs) 2,608.70 2,116.78 3,726.90 5,416.88 4,154.02 3,450.82
V Advance towards
investment (Refer
Annexure XIII) 5,000.00 5,000.00 5,000.00 - - -
VI Others * 1,067.30 1,515.30 935.00 1,130.95 1,485.00 1,044.52
22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35
*Prepaid expenses
and entertainment
tax paid under
protest etc.
-Unsecured
considered
F - 90
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current
assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
doubtful
Security deposits 384.80 240.50 - - - -
Others 173.30 - - - - -
Provision for
doubtful advances,
deposits and others (558.10) (240.50) - - - -
- - - - - -
22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35
D Other non-current
assets
I Interest accrued but
not due 31.70 22.20 49.00 52.50 49.10 33.44
II Fixed Deposits with
bank - 8.40 99.00 - - -
III Gratuity - - 9.80 - - -
IV Balance with bank -
Margin money
deposit* 552.20 31.40 231.50 224.92 10.31 10.31
*Margin money
deposits are under
bank lien for
guarantees given by
the Company
583.90 62.00 389.30 277.42 59.41 43.75
# These shares have been forfeited during Period 2010
The above statement should be read with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
Notes:
1. Amounts due from parties related to the issuer Company, has been disclosed in Annexure
XVIII as part of related party disclosures.
2. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall
disclose in the offer document whether any of the receivable are related to directors or promoters
or the issuer in any way. In absence of clarification on “related to the directors or promoters”,
Company has disclosed amounts due from relatives of directors as defined in Schedule IA of the
Companies Act, 1956 and in case of promoters, amount due from “Promoter Group” and “Group
Companies” as defined in SEBI ICDR Regulation. The List of persons / entities classified as
“Promoter Group” and “Group Companies” has been determined by the Group and relied upon
by the Auditors.
3. Refer note 2 of V of E of Annexure IV, note 1 of VI of E of Annexure IV and note 3 of VI of
E of Annexure IV for advances written off pursuant to Schemes.
F - 91
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
A Current
investments
I Investment in
mutual fund (non-
trade, unquoted
and at lower of
cost and fair
value)
Investment in
mutual funds - - 10.44 7,902.30 - 13,556.71
- - 10.44 7,902.30 - 13,556.71
Market value of
current
investment - 10.44 7,906.70 - 13,556.71
B Inventories
(valued at lower
cost and net
realisable value)
(refer note 8 of A
of Annexure IV)
I Stores and spares 517.30 425.80 482.40 356.50 388.00 57.80
II Chemical stock 18.80 36.50 20.70 16.50 33.50 17.20
III Food and beverages 373.50 346.10 433.00 371.70 154.80 67.60
IV Negative film rolls 30.10 45.50 52.40 54.10 54.60 58.80
V Content not aired 211.30 563.80 334.90 60.70 - 515.80
VI Stocks of DVD's - - 1.90 47.70 59.60 44.10
1,151.00 1,417.70 1,325.30 907.20 690.50 761.30
C Trade receivables
Unsecured,
considered good;
I Debts outstanding
for a period
exceeding six
months from the
date they are due
for payments 13,204.00 13,162.72 16,175.70 13,145.50 14,184.30 1,518.70
Other debts 5,342.30 5,510.32 5,424.90 10,085.10 6,847.40 10,622.80
18,546.30 18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
F - 92
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Unsecured,
considered
doubtful;
II Debts outstanding
for a period
exceeding six
months from the
date they are due
for payments 5,354.70 2,421.99 724.60 49.60 - 224.10
Other debts - 2,386.70 - - 40.60 93.80
5,354.70 4,808.69 724.60 49.60 40.60 317.90
Less: Provision for
doubtful debts 5,354.70 4,808.69 724.60 49.60 40.60 317.90
- - - - - -
18,546.30 18,673.04 21,600.60 23,230.60 21,031.70 12,141.50
D Cash and bank
balances
Cash and cash
equivalents
I Balances with
banks
- in current
accounts 5,340.10 4,755.40 5,003.80 2,809.80 3,235.00 2,364.80
- in fixed deposit
account with
original maturity
less than three
months 1,469.20 360.30 283.55 1,489.59 228.50 3,372.30
II Cash on hand 417.90 583.30 234.40 257.70 196.00 91.60
- Foreign
Currency
denominated
preloaded cards - - - - - 1.70
7,227.20 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40
III Other bank
balances
- in dividend
account 10.50 10.50 12.20 13.80 14.60 8.20
- in escrow
account - - - - - -
- in fixed deposit
account maturing 1,801.80 610.80 697.11 648.49 1,535.61 1,391.90
with in a year
- in margin
money deposit
maturing with in a 356.00 4,878.40 5,541.93 3,051.59 2,672.28 5,145.99
F - 93
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
year*
2,168.30 5,499.70 6,251.24 3,713.88 4,222.49 6,546.09
9,395.50 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49
*Margin money
deposits are under
bank lien for
guarantees given by
the Company
E Short-term loans
and advances
- Unsecured,
considered good
I Amount due from
Reliance Broadcast
Network Limited
pursuant to
demerger of Radio
business - - 6,095.00 26,095.00 26,095.00 -
II Loans to others 1,161.70 879.60 1,507.90 1,136.69 2,745.40 14,071.10
III Deposits 211.60 185.50 1.85 35.48 0.05 0.08
IV Advance tax, tax
deducted at source,
advance fringe
benefit tax (net of
provision for tax of
Period March 2013:
` Nil, Period 2012 :
` 37.40 lakhs, 2011
: ` 112.10 lakhs,
2010: ` 419.00
lakhs 2009: `
530.96 lakhs and
2008: ` 295.76
lakhs) 342.50 327.00 688.97 275.08 66.99 27.65
V Advance towards
share application
(Refer note 10 of II
of E of Annexure
IV) - 6,811.20 - - - -
VI Others * 3,943.20 4,759.80 4,908.29 9,024.40 5,972.23 10,925.78
5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
- Unsecured,
considered
Doubtful
F - 94
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Loans to others 393.50 393.50 - - - -
Others* 1,081.50 1,081.50 979.50 120.60 0.60 66.50
Less: Provision for
doubtful advances 1,475.00 1,475.00 979.50 120.60 0.60 66.50
- - - - - -
5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61
*includes service
tax credit input,
value added tax
input credit,
prepaid expenses,
employee advance,
advances to
vendors etc.
F Other current
assets
I Unbilled revenue 1,401.00 1,531.40 1,461.90 217.00 125.10 -
II Interest accrued and
due from Reliance
Broadcast Network
Limited - 63.80 3,930.20 2,481.60 - -
III Interest accrued but
not due 49.80 92.90 178.70 91.30 209.40 900.66
IV Assets held for sale 15.00 15.00 - - - -
IV Other receivables
for sale of
investment / Right
to investment
- 338.30 - - 4,066.80 3,127.30
1,465.80 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96
The above statement should be read with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
Notes:
1. The list of parties related to directors / promoters (as per SEBI ICDR Regulations, 2009)
are as follows:
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Trade receivables
Reliance Capital
Limited 26.46 24.98 37.40 43.42 1.63 -
Reliance Capital
Asset Management
Limited 36.01 28.80 32.29 4.38 0.26 -
Gini & Jony
Apparel Private - - 1.23 0.03 0.56 -
F - 95
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets, of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Limited
TV Today Network
Limited - - 0.09 - - -
Reliance Equity
Advisors (India)
Limited - 0.31 - - - -
Reliance Broadcast
Network Limited 1,476.06 1,513.41 1,376.70 1,337.90 - -
Reliance Life
Insurance Company
Limited - 1.10 0.92 - - -
Loans, advances
and other
receivables
Reliance Broadcast
Network Limited - 63.82 10,025.20 28,749.80 26,095.00 -
Reliance Securities
Limited - - - - - 3,126.90
Reliance General
Insurance Company
Limited - 0.31 - - - -
Reliance Life
Insurance Company
Limited 9.00 9.00 9.00 9.00 20.00 -
Total 1,547.53 1,641.73 11,482.83 30,144.53 26,117.45 3,126.90
2. Above data excludes amounts due from parties related to the issuer Company, which has been disclosed
in Annexure XVIII as part of related party disclosures.
3. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose in
the offer document whether any of the receivable are related to directors or promoters or the issuer in
any way. In absence of clarification on “related to the directors or promoters”, Company has disclosed
amounts due from relatives of directors as defined in Schedule IA of the Companies Act, 1956 and in
case of promoters, amount due from “Promoter Group” and “Group Companies” as defined in SEBI
ICDR Regulation. The List of persons / entities classified as “Promoter Group” and “Group Companies”
has been determined by the Group and relied upon by the Auditors.
4. Refer note 2 of V of E of Annexure IV, note 1 of VI of E of Annexure IV and note 3 of VI of E of
Annexure IV for receivables and advances written off pursuant to Schemes.
F - 96
Annexure IX
Reliance MediaWorks Limited
Statement of non-current liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March
31, 2008
A Long term
borrowing
I Non convertible
debentures (secured) 25,000.00 35,000.00 - - - -
II Non convertible
debentures
(unsecured) 550.00 1,650.00 - - - -
III Term loans
- From banks
(secured) 11,653.50 20,171.30 36,131.60 39,671.57
40,000.0
0 37,500.00
- From banks
(unsecured) - 961.17 7,500.00 - 3,130.46 -
- Others (secured) - 17,500.00 - - - 2,500.00
III Zero Coupon Foreign
Currency Convertible
Bonds ('FCCB') - - -
14,230.0
0 13,099.90
IV Other loans and
advances
From other parties
(Secured) 239.70 366.80 - - - -
From other parties
(Unsecured) - 19.10 798.51 733.43 - -
37,443.20 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90
B Other long-term
liabilities
I Lease rent liability as
per AS 19 - "Leases" 3,917.70 3,502.20 2,784.55 1,419.60 820.05
342.98
II Dues for capital
expenditure - - 1.36 - - -
III Security deposit 144.70 136.80 123.14 49.30 51.80 -
4,062.40 3,639.00 2,909.05 1,468.90 871.85 342.98
C Long-term provision
I Leave encashment 407.20 517.00 728.03 362.00 343.16 162.76
II Gratuity 137.90 104.10 46.68 21.20 6.45 36.34
F - 97
Annexure IX
Reliance MediaWorks Limited
Statement of non-current liabilities of the Group, as restated
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March
31, 2008
III Premium on
redemption of FCCB - - - - 3,084.79 2,839.89
545.10 621.10
774.71
383.20
3,434.40
3,038.99
The above statement should be read with significant accounting policies and notes
to summary statements, as restated (Annexure IV)
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F - 98
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities, of the Group as restated
(` in lakhs)
As at
Particulars
March 31,
2013
Septembe
r 30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March
31, 2008
A Short term
borrowing
I Term loans
- From banks
(secured) - - - -
10,000.0
0 -
- Term loan
(unsecured) - - 23,500.00 40,000.00
10,000.0
0 -
II Loans repayable
on demand
(secured)
From banks
- Cash credit 1,972.70 1,451.20 3,264.00 985.20 37.16 293.30
III Other loans and
advances
a From banks
- Buyers credit
(unsecured) - - 318.00 1,392.60 926.80 -
- Buyers credit
(secured) 2,509.70 3,974.50 2,965.87 - - -
- Others
(unsecured) - - 1,885.19 1,897.32 -
b Commercial
Papers
(unsecured) - - 57,842.40 72,683.00
49,024.5
0 38,688.70
c Inter-corporate
deposit
(unsecured)
140,903.4
0
101,345.4
0 15,000.00 - - 2,046.30
d From other
parties (Secured) - - 100.40 - - -
e From other
parties
(Unsecured) - - 187.49 456.76 223.89 290.92
145,385.80 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22
F - 99
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities, of the Group as restated
(` in lakhs)
As at
Particulars
March 31,
2013
Septembe
r 30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March
31, 2008
Above includes
Borrowings from
Promoters (as per
SEBI ICDR 113,183.43 97,845.50 15,000.00 - - 2,046.30
Regulations,
2009) / Group
companies /
Subsidiaries /
Material
Associate
companies
B Other current
liabilities
I Current maturities
of long-term
debts 45,005.90 24,824.90 50,633.53 35,421.68 3,130.46 0.40
II Interest accrued
and due on
borrowings 7,646.30 2,272.40 28.80 - - -
III Interest accrued
but not due on
borrowings 388.60 2,257.50 63.68 50.53 30.00 -
IV Unclaimed
dividend 10.50 10.50 12.20 13.80 14.60 8.20
V Advance received
from customers 2,036.00 2,187.90 2,453.30 1,759.40 924.60 5,395.10
VII Dues for capital
expenditure 1,805.40 2,195.20 3,334.60 4,315.04 2,147.50 716.17
Temporary book
overdraft 460.70 924.90 - - - -
Deposits received 18.50 - - - - -
VIII Others * 3,709.00 2,586.80 3,233.46 2,663.57 2,957.71 2,929.75
61,080.90 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62
*including
payable related to
employee,
expense payable,
lease rent and
statutory dues etc.
C Short-term
provision
I Proposed - - - - - 1,153.15
F - 100
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities, of the Group as restated
(` in lakhs)
As at
Particulars
March 31,
2013
Septembe
r 30, 2012
March 31,
2011
March
31, 2010
March
31, 2009
March
31, 2008
dividend
II Tax on proposed
dividend 105.40 - 7.90 9.11 41.30 210.35
III Gratuity 0.70 1.80 0.92 - 24.95 112.86
IV Leave
encashment 165.40 199.10 207.17 156.80 164.15 349.65
271.50 200.90 215.99 165.91 230.40 1,826.01
The above statement should be read with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
Note: Disclosure as per SEBI ICDR Regulations, 2009 are as follows
Particulars of
Lenders
Principal
Amount
(` in lakhs)
Period when
amount is
outstanding
Interest Rate Repayment
Schedule
Reliance Capital
Limited
2,046.30
Period 2008 12.00% Repayable on
demand
Reliance Capital
Limited
15,000.00
Period 2011 12.00% Repayable on
demand
Reliance Capital
Limited
97,845.50 Period 2012 13.00% Repayable on
demand
Reliance Capital
Limited
113,183.43 Period March
2013
13.00% Repayable on
demand
The above statement should be read together with significant accounting policies and notes to summary
statements (Annexure IV).
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F - 101
Annexure XI
Reliance MediaWorks Limited
Statement of revenue of the Group, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Theatrical exhibition
Sale of tickets 18,267.70 68,030.50 39,009.50 34,706.70 25,864.40 10,034.40
less: Entertainment tax 3,068.00 10,885.50 5,098.90 3,958.20 2,288.70 1,288.00
15,199.70 57,145.00 33,910.60 30,748.50 23,575.70 8,746.40
Advertisements /
sponsorship revenue 1,928.60 3,498.40 3,684.20 4,651.70 1,465.20 1,437.80
Facilities provided at
multiplex 844.60 2,345.20 1,054.70 737.30 647.30 329.10
Food and beverages 5,026.00 19,396.40 10,716.70 8,722.30 6,470.34 1,725.34
Others 1,388.60 3,879.70 2,011.70 1,850.20 1,012.60 -
24,387.50 86,264.70 51,377.90 46,710.00 33,171.14 12,238.64
Film production services
Processing/ printing of
films 4,842.60 22,905.30 18,794.00 11,486.40 9,299.80 3,595.70
Equipment / facility rental
income 1,346.50 3,665.30 2,084.60 1,566.50 612.40 265.30
Trading income 121.60 1,304.30 1,926.30 2,229.30 3,077.40 2,410.20
Others 42.70 150.90 44.30 72.30 67.40 -
6,353.40 28,025.80 22,849.20 15,354.50 13,057.00 6,271.20
Film / content production,
distribution and related
services 4,398.90 9,150.90 4,980.30 9,442.70 19,707.20 12,259.10
Total 35,139.80 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
F - 102
Annexure XII
Reliance MediaWorks Limited
Statement of other income of the Group, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009 Period 2008
Recurring
Dividend income from :
- Other non-current
investments - - - - - 10.10
- Current investments - 0.40 0.80 - 132.60 117.30
- 0.40 0.80 - 132.60 127.40
Interest income from:
- Bank 149.10 733.40 364.90 326.80 496.70 737.30
- Loans, advance and
other deposits 77.40 522.30 503.50 211.80 470.40 230.40
226.50 1,255.70 868.40 538.60 967.10 967.70
Gain on sale of current
investments 57.50 39.50 423.60 274.40 269.20 32.40
Bad debts recovered/
provision written back 19.50 85.60 1,405.50 1,080.90 - -
Sundry balances written
back (net) - - 306.30 - - -
Foreign exchange gain
advances, trade
receivables and trade
payables (net) 1,125.90 - - 80.10 1,070.70 -
Miscellaneous income 68.60 101.00 119.40 69.70 648.41 762.60
Non Recurring
Gain on derivative
contracts (net) - - - - - 977.40
Gain on sale of
investments / rights
therein (long term) - 563.30 - - 1,700.00 2,660.30
Consultation fees - - - - 2,130.45 -
Proceeds from keyman
insurance policy - - - - 266.44 -
Share of advertisement
income - - - 1,213.00 - -
Profit on sale of assets /
discarding of assets (net) - - 2,694.80 - - -
1,498.00 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Note
1. The classification of other income by the management into recurring and non-recurring is based
on the current operations and business activities of the Company.
F - 103
2. Other income is related / incidental to the business activities of the Company.
3. In accordance with the accounting treatment followed by the Company, exchange fluctuation
gain / loss and profit / loss on sale of assets is disclosed net. Gross amounts in respect thereof are
not readily determinable. Hence, net gain where applicable has been considered for the purpose
of above disclosure.
F - 104
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
Contingent Liabilities
of Parent Company
A Central excise
Disputed central excise
demand pending with the
Central Excise and
Service Tax Appellate
Tribunal 2,555.90 2,555.90 1,918.40 1,715.30 1,308.60 1,110.90
B Value added tax
Disputed value added tax
demand pending for
various states 522.80 38.40 - - - -
C Service tax
Disputed service tax
demand pending with the
Central Excise and
Service Tax Appellate
Tribunal 204.90 204.90 - - - -
C Income tax
i) Disputed liability in
respect tax deduction at
source, matter is pending
with Commissioner of
Income tax (Appeals) 1,017.10 1,017.10 1,017.10 - - -
ii) Disputed tax liability in
respect of AY 2008-09 for
Rave Entertainment
Private Limited („REPL‟),
REPL was wholly owned
subsidiary of the
Company and merged
with it with effect from
April 1, 2008.
Department‟s appeal
against order of
Commissioner of Income
Tax (Appeals) is pending
with Income Tax
Appellant 1,401.20 1,401.20 1,401.20 - - -
F - 105
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
Tribunal (ITAT). In
Period 2011 the same was
pending with
Commissioner of Income
Tax (Appeals).
Further Company has
received demand in
respect of REPL matter
for assessment year 2009-
10, appeal is pending
with Commissioner of
Income tax (Appeals)
- 1,787.20 - - - -
D Entertainment tax
i) In respect of a Multiplex,
the Company has received
a demand for
entertainment tax
pertaining to the period
wherein the said multiplex
was availing an exemption
from entertainment tax.
The Company has filed an
appeal against the said
demand. 71.50 - - - - -
ii) In respect of certain
multiplexes, the Company
has made an application
for availing exemption
under the relevant Act
retrospectively from the
date of commencement of
the operations of the said
multiplex and the
application is pending
approval
- 300.70 219.40 340.00 391.29 357.40
iii) In respect of certain
multiplexes, the Company
is in dispute with the
entertainment tax
authorities regarding
eligibility for availing
exemption under the
relevant Act. 570.60 509.60 558.80 451.70 293.45 219.40
F - 106
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
iii) In respect of demand
orders received for
payments of entertainment
tax collected and not paid
to the authorities, the
Company has made an
appeal against said
demand orders as it
believes that the same is
not payable, being
exemption from payment
available to it - 113.20 107.50 62.94 56.89
iv) The Company shall be
liable to pay the
entertainment tax in the
event that the multiplexes
do not continue operations
for a period of 10 years
from the respective dates
from which they
commenced their
operations 13,470.30 12,845.00 11,125.20 10,614.90 5,747.47 4,404.40
E Claim against Company
not acknowledged as
debts
8,152.10 7,859.80 198.60 74.00 74.00 74.00
The Company has
engaged the services of a
Contractor for the purpose
of deploying personnel at
its cinemas. During the
tenure of the contract, the
Company has paid the
Contractor, amounts
payable towards
employers
The Company has
engaged the services of a
Contractor for the purpose
of deploying personnel at
its cinemas. During the
tenure of the contract, the
Company has paid the
Contractor, amounts
F - 107
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
payable towards
employers contribution to
provident fund (PF)
amounting to ` 294.20
lakhs on a regular basis.
The Company has learnt
that the Contractor has
failed to deposit
appropriate amounts for
employee and employer
contributions amounting
to approximately ` 588.40
lakhs with the PF
authorities and the
Company apprehends that
some portion of the
aforesaid amount which
was supposed to be
deposited in the individual
accounts of the Personnel
by the Contractor may
have actually been mis-
appropriated by the
Contractor. The Company
has filed a criminal
complaint against the
Contractor and the matter
is currently under
investigation. The
Company has not received
any claims in this regard.
F Value Added Tax:
The Maharashtra Value
Added Tax Act, 2002 lists
the Scheduled entry,
interalia, “Copy right”
w.e.f. April 1, 2005. to
delete this scheduled
entry. The Company is
F - 108
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
awaiting a positive
response from the
Ministry of Finance in
respect of the assurance
given. Accordingly, no
provision (amount not
currently ascertainable)
has been made in the
books of accounts.
Pursuant to this
enactment/ scheduled
entry, the entertainment
industry has made a
written representation to
the Finance Minister,
Maharashtra for deletion
of the scheduled entry
from the Act. Similar
representation was made
by the industry in some
other states, as a result of
which the Act was
modified
With effect from May 1,
2011 the Maharashtra
Value Added Tax Act,
2002 was amended to
exempt the on Copyrights
for distributon and
exhibition of
cinematographic films in
theatres and cinema halls
G
Guarantees given to bank
and others for loans/credit
facilities given to others - 183.00 - - - -
H Capital Commitment
i) Estimated amount of
contract remaining to be
executed on capital
account and not provided
for net of advances (for
fixed 4,653.50 4,803.00 5,269.90
12,248.7
0 6,386.90 13,599.60
assets)
F - 109
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
ii) Estimated amount of
contract remaining to be
executed on capital
account and not provided
for net of advances (for
investments) 1,200.00 1,200.00 1,200.00 - - -
iii) Amount of uncalled on
1,500,000 partly paid
preference shares of Tree
of Knowledge DOT COM
Private Limited - - - - 300.00 300.00
I Contingent liabilities of
Subsidiary Companies
i) Disputed Income tax
liability, wherein the
Subsidiary has filed an
appeal before the first
appellate authority - - 7.50 7.50 - -
Octroi / Cess Tax
ii) Disputed Cess Tax
Demand pending with
Deputy Commissioner,
Navi Mumbai Municipal
Corporation-Cess
Department. The
Company believes, being
an SEZ unit it is fully
exempt from payment of
Octroi/Cess Tax as per
Maharashtra IT-ITEs
policy, 2009. The amount
of ` 96.56 lakhs deposited,
as Tax demand, for the
purpose of admission of
Appeal is reflected as
Short Term Loans and
Advances. 536.90 536.90 - - - -
iii) Claims against a - - 112.00 64.20 - -
F - 110
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
subsidiary not
acknowledged as debts
iv) A subsidiary of the
Company has received an
adverse judgement with
regard to a cancelled
lease.
During the current
provided, the Company
has provided for the
judgement - - 2,211.00 - - -
J Share of Contingent
liabilities in the Joint
Ventures („JV‟)
A Joint Venture had
received demand orders
for payment of
entertainment tax
collected and not paid to
the authorities aggregating
to ` 198.10 lakhs. The
Bombay High Court
passed an order dated
October 21, 2008 in
favour of the JV,
upholding the exemption
of payment from
entertainment tax
available to the JV and
has also directed the State
Government to refund the
amount of ` 20 lakhs
deposited by the JV. The
State Government had
preferred a special leave
petition („SLP‟) before the
Supreme Court of India
challenging the said Order
and the judgment passed
by the Bombay High
Court. Based on a legal
opinion obtained by the
JV, the JV had made a
provision aggregating to `
18.30 lakhs in the books
of accounts - - - - 89.90 89.90
F - 111
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Group
(` in lakhs)
As at
Particulars
March
31, 2013
Septembe
r 30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
However, the Supreme
Court vide its Order dated
July 27, 2009, directed
the Chief Minister of
Maharashtra to realise the
amount to the extent the
JV has unjustly enriched
itself and pay the same to
a voluntary or a charitable
organisation. The
management of the JV has
subsequently
paid the entire amount of
entertainment tax
demanded aggregating to `
187.30 lakhs
A Joint Venture shall be
liable to pay entertainment
tax in the event that the
Multiplex does not
continue operations for
the period of ten years
from the date of
commercial operations 96.90 96.90* 96.90* 929.40 926.20 926.20
As per amendment made
by Finance Act 2010,
renting of immovable
property is defined as a
taxable service with
retrospective effect from
June 1, 2007. Based on a
legal opinion obtained by
the management joint
venture has reversed the
unpaid service tax
liability. - - 16.40 15.90 - -
Disputed VAT liability of
a Joint Venture - - 1.80 1.80 - -
Claims against a Joint
Venture not
acknowledged as debts 2.40 1.10 1.10 1.10 - -
* Amount is not currently quantifiable in case of a joint venture
F - 112
Note:
a) The Group is a party to various legal proceedings in the normal course of business and does not expect
the outcome of these proceedings to have any adverse effect on its financial conditions, results of
operations or cash flows.
b) The amounts are excluding penalty and interest if any that would be levied at the time of final
conclusion.
Other Commitment :-
a) In view of the loss during the period, the Company has not created Debenture Redemption Reserve in
terms of Section 117 (C) of the Companies Act, 1956. The Company shall create such reserve out of
profit, if any in future years.
b) Preference shares shall be redeemed at the end of 20 years from the date of allotment. Each Preference
shares shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a.
(till date of redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of
dividend, if declared during the tenure. However, the premium on redemption will be paid only to the
original subscribers or to the transferees if the transfers have been previously approved by the Company.
Yield on preference shares of ` 1,471.00 lakhs (cumulative till date ` 2,958.10 lakhs) for the current
period will be paid as premium at the time of redemption.
The above statement should be read together with significant accounting policies and notes to summary
statements, as restated, of the Group (Annexure IV).
F - 113
Annexure XIV
Reliance MediaWorks Limited
Statement of accounting ratios based on adjusted profits related to earnings per share, net asset value and
return on net worth of the Group
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
1 Net (loss) / profit
after tax, as
restated (after
dividend on
preference shares (34,044.77) (91,067.62) (32,851.45) (12,865.85) (7,876.88) 1,900.24
2 Weighted average
number of Equity
Share outstanding
during the period
for basic earning
per share 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 42,103,935
3 Add - equity share
issuable on
conversion of
FCCB (Refer note
(c) of B of
Annexure IV) - - 1,694,699 2,061,884 2,061,884 6,084,140
4 Weighted average
number of equity
share outstanding
during the Period
for dilutive
earnings per share
(Refer note (c) of
B of Annexure IV) 46,126,170 46,126,170 47,820,869 48,188,054 48,188,054 48,188,075
5 Number of equity
shares outstanding
at the end of the
period 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170
6 Paid up value of
each equity share 5.00 5.00 5.00 5.00 5.00 5.00
7 Total paid capital
– equity 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
F - 114
Annexure XIV
Reliance MediaWorks Limited
Statement of accounting ratios based on adjusted profits related to earnings per share, net asset value and
return on net worth of the Group
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
8 Reserves and
surplus (net of
deficit in statement
of profit and loss)
(excluding
revaluation
reserve) (95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74
9 Net worth
attributable to
equity
shareholders (7+8) (92,855.28) (58,252.52) 2,705.22 35,815.97 49,240.99 67,783.05
Accounting
Ratios
a) Earning per share
Basic earning per
share (73.81) (197.43) (71.22) (27.89) (17.08) 4.51
Diluted earning
per share (73.81) (197.43) (71.22) (27.89) (17.08) 3.94
b) Return of net
worth (refer note 7
below) NA NA (1,214.37%) (35.92)% (16.00)% 2.80%
c) Net assets value
per share
(126.29) 106.75 146.95 (201.31) 5.86 77.65
Note
1 The ratios have been
computed as under :-
Basic and diluted earning
per share
Net profit / (loss) after tax, as restated, excluding
extraordinary items attributable to equity shareholders
Weighted average number of equity share outstanding during the
period
Return on Net worth %
Net profit / (loss) after tax, as restated, excluding
extraordinary items attributable to equity shareholders
Net worth, as restated, excluding revaluation reserve at the end
of the period
F - 115
Net assets value per share
(`)
Net worth, as restated, excluding revaluation reserve at the
end of the period
Number of equity share outstanding at the end of the year/
period
2 Restated net profit as appearing in the restated statement of profit and loss and net worth as appearing in
summary statement of assets and liabilities, as restated, has been considered for the purpose of computing
the above ratios.
3 Calculation of ratios post issue has not been considered.
4 Earnings per share calculations are done in accordance with Accounting Standard 20 "Earning Per Share",
notified in the Companies (Accounting Standards) Rules, 2006.
5 The above statement should be read together with significant accounting policies and notes to summary
statements, as restated (Annexure IV)
6 Dilutive EPS has not been presented in Period 2009, Period 2010 and Period 2011, since it is anti
dilutive.
7 Return on net worth for the Period March 2013 and Period 2012 cannot be computed as net worth as
on March 31, 2013 and September 30, 2012 is negative.
8 Dividend on preference capital is non-cumulative and will be paid as premium at the time of
redemption and shall be adjusted against securities premium reserve. Accordingly, the same is not
adjusted for the purpose of calculating the above ratios. Yield is ` 1,471.00 lakhs for Period March
2013 and ` 1,487.10 lakhs for Period 2012.
F - 116
Annexure XV
Reliance MediaWorks Limited Statement of principal terms and conditions of long-term borrowings and short-term borrowings of the Group
(` in lakhs)
S.
No
Particulars As at
March 31,
2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
1. Commercial Papers / Short Term Loans from Banks (unsecured)
A Templeton Mutual
Fund (Refer note 9 of
Annexure XV) - -
21,984.7
9 - - -
B ICICI Prudential
(Refer note 9 of
Annexure XV) - - 9,943.51 - - -
C Templeton Mutual
Fund (Refer note 9 of
Annexure XV) - - 9,422.16 - - -
D Yes Bank Limited
(Refer note 9 of
Annexure XV) - -
11,619.6
3 - - -
E BNP Paribas (Refer
note 9 of Annexure
XV) - - 4,872.31 - - -
F LIC MF Savings Plus
Fund - - - 7,450.18 - -
G LIC MF Income Plus - - - 9,832.06 - -
H LIC MF Floating Rate - - - 983.21 - -
I LIC MF Savings Plus
Fund - - - 9,808.90 - -
J J M Financial Mutual
Fund - - - 2,477.40 - -
K J M Financial Mutual
Fund - - - 1,486.43 - -
L LIC MF Income Plus - - - 9,599.87 - -
M LIC MF Savings Plus
Fund - - - 9,599.87 - -
N IFCI Limited - - - 2,466.68 - -
O LIC MF Floating Rate - - - 4,744.82 - -
P LIC MF Savings Plus
Fund
- - - 4,744.53 - -
Q LIC MF Income Plus - - - 9,489.05 - -
R Yes Bank Limited - - - - 14,886.41 -
S IDBI Limited - - - - 2,457.18 -
F - 117
S.
No
Particulars As at
March 31,
2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
T SIDBI - - - - 491.44 -
U Canara Bank - - - - 2,456.18 -
V IFCI Limited - - - - 4,893.69 -
W LIC MF Floating Rate
Fund - - - - 4,767.92 -
X LIC MF Income Plus
Fund - - - - 4,767.92 -
Y LIC MF Liquid Fund - - - - 4,767.92 -
Z LIC MF Savings Plus
Fund - - - - 4,767.92 -
AA LIC MF Special Unit
Scheme - - - - 4,767.92 -
AB UTI Mutual Funds -
liquid cash plan - - - - - 1,973.16
AC ABN Amro Money
Plus Fund - - - - - 4,932.89
AD Lotus India Liquid
Fund - - - - - 1,973.16
AE Birla Sun Life Interval
Income Fund Quarterly
Plan Series II
- - - - - 5,297.62
AF Kotak Quarterly
Interval Plan - Series 6
- - - - - 2,408.01
AG Allahabad Bank - - - - - 1,965.13
AH Birla Cash Plus - - - - - 4,421.54
AI United Bank Of India - - - - - 3,438.97
AJ UTI Spread Fund - - - - - 2,456.41
AK Saraswat Co-op Bank
Ltd.
- - - - - 982.42
AL SBI Life Insurance Co.
Ltd.
- - - - - 2,456.04
AM Tata MF - Tata Fixed
Horizon Fund
- - - - - 3,928.19
AN ABN Amro Flexi Short
Term Plan - Series B - - - - - 2,455.16
AO Allahabad Bank Loan - - - 10,000.0
0 10,000.00 -
AP Revolving line of
credit from ICICI
Bank, New York
Branch - - - 1,885.19
1,897.28 -
AQ Syndicate Bank Loan - - 10,000.0
0
10,000.0
0
- -
AR Union Bank of India
Loan
- - 10,000.0
0
10,000.0
0
- -
AS Bank of Baroda Loan - - - 10,000.0
0
- -
AT Yes Bank Limited - - 3,500.00 - - -
Sub Total -
15,000.00
-
15,000.00
81,342.40 114,568.1
9
60,921.78 38,688.70
2. Unsecured Long Term Loan from Bank (including amounts due within the next 1 year)
A Canara Bank Loan
- -
20,000.0
0 - - -
F - 118
B DBS Bank Limited
(Refer note 9 of
Annexure XV) - - 15,000.00 - - -
C ICICI Bank Loan, New
York Branch - - - 2,701.81 6,260.92 -
D Non-convertible
debentures 2,750.00
3,850.00 - - - -
2,750.00 3,850.00 35,000.00 2,701.81 6,260.92 -
3. Secured Short Term Loan From Bank / Other Loans form Bank (including amounts due
within the next 1 year)
A Syndicate Bank (Refer
note 6 of Annexure XV) - - - - 10,000.00 -
B Bank Asiana – Working
Capital Lines (Refer note
12 of Annexure XV) 994.94 961.17 - - - -
Sub Total 994.94 961.17 - - 10,000.00 -
4. Secured Long Term Loan From Bank / Other Long Term Loan (including amounts due
within the next 1 year)
A Allahabad Bank (Refer
note 1 of Annexure XV)* - 1,666.67 3,333.33 5,000.00 5,000.00 -
B Exim Bank (Refer note 1
of Annexure XV)* - 2,333.34 4,666.68 7,000.00 7,000.00 -
C Jammu & Kashmir Bank
(Refer note 1 of
Annexure XV)* - 2,333.34 4,666.68 7,000.00 7,000.00 -
D Syndicate Bank (Refer
note 1 of Annexure XV)* - 2,333.34 4,666.68 7,000.00 7,000.00 -
E Union Bank of India
(Refer note 1 of
Annexure XV)* - 2,000.00 4,000.00 6,000.00 6,000.00 -
F Vijaya Bank (Refer note
1 of Annexure XV)* - 2,666.67 5,333.33 8,000.00 8,000.00 -
G Rank Investments Private
Limited (Refer note 1 of
Annexure XV) - - - - - 2,500.00
H Barclays Bank Plc (Refer
note 1 of Annexure XV)
- - - - - 37,500.00
I Syndicate Bank (Refer
note 6 of Annexure XV)
- - 6,250.00 10,000.00 - -
J Syndicate Bank (Refer
note 1 of Annexure XV
8,437.50 10,312.50 15,000.00 - - -
K Union Bank of India
(Refer note 1 of
Annexure XV)
4,000.00 4,800.00 6,000.00 3,500.00 - -
L Syndicate Bank (Refer
note 1 of Annexure XV)
10,000.00
10,000.00
- - - -
M Non Convertible
Debentures (Refer note
(Refer note 9 &10 of
35,000.00 35,000.00 - - - -
F - 119
S.
No
Particulars As at
March 31,
2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
Annexure XV)
N Indiabulls Financial
Service Limited (Refer
note 14 of Annexure XV)
17,500.00 17,500.00 - - - -
O Axis Bank – Term loan
(Refer note 11 of
Annexure XV)
3,366.04 4,208.79 5,348.40 3,484.42 - -
Sub Total 78,303.54 95,154.65 59,265.15 56,984.42 40,000.00 40,000.00
* - As per agreement dated June 28, 2008 for long term loan obtained from banks, the Company has to
comply with covenants with regards to financial parameters, as specified in the agreement. Based on Period
2009, 2010, 2011 and 2012 financials, the Company is not in compliance with the debt covenants.
5. Overdraft facilities / Working Capital Demand Loans from Banks / Car Loan
A Cash credit-Bank of
Baroda (Refer note 2,
4,6 and 15 of Annexure
XV)
530.61 554.60 540.53 352.63 37.20 293.60
B Cash Credit – Axis Bank
(Refer note 2, 4, 5, 6 and
15 of Annexure XV)
645.33 - 1,959.47 - - -
C Cash Credit – Axis Bank
(Refer note 11 of
Annexure XV)
796.82 896.60 764.00 533.62 - -
D Cash Credit - - 99.25 - -
E Others (Car loan) (Refer
note 3 of Annexure XV)
- - - - 0.40
F Buyers credit (Refer note
2, 4,6, 7 and 15 of
Annexure XV)
2,509.75
3,974.50 2,965.90 - - -
Sub Total 4,482.51 5,425.70 6,229.90 985.50 37.20 294.00
6. Others (Unsecured)
A Zero Coupon FCCB
(Refer note 8 of
Annexure XV)
- - - 15,224.30 14,230.00 13,099.90
B Inter Corporate Deposits 140,903.43 101,345.40 15,000.00 - - 2,046.30
C Buyers Credit - - 318.00 1,392.68 926.80 -
D Others - - 187.49 456.80 223.89 290.62
E Others (long-term) - 19.10 798.51 733.40 - -
F NIC Bank – Term loan - - - 182.33 - -
Subtotal 140,903.4
3
101,364.5
0
16,304.00 17,989.51 15,380.69 15,436.82
7. Others (Secured) (including amounts due within the next 1 year)
A Equipment loan (refer
note 13 of Annexure XV)
43.46 60.88 100.40 - - -
B Finance lease obligations
to HP Financial Services
357.14 447.47 - - - -
F - 120
S.
No
Particulars As at
March 31,
2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
Subtotal 400.60 508.35 100.40 - - -
Grand Total 227,834.9
0
207,264.3
7
198,241.80 193,229.43 132,600.59 94,419.52
Period March 2013
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Union Bank of India
4,000.00
14.00% per annum ` 400 .00 - 20 equal
quarterly instalment
starting from March
31, 2012
Syndicate Bank
8,437.50
13.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from
September 14, 2011
Syndicate Bank
10,000.00
11.50% per annum ` 2,500.00 - 4 equal
quarterly instalment
starting from
September 14, 2013
Non Convertible Debentures
35,000.00
11.00% per annum
Coupon Series 1 - ` 10,000
lakhs – March 1, 2014
Series 2 - ` 12,500
lakhs – March 1, 2015
Series 3 - ` 12,500
lakhs – March 1, 2016
Non Convertible debentures
2,750.00
12.50% per annum All series of ` 550
lakhs
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December
10, 2013
Series G – March 10,
2014
Series H – June 10,
2014
Buyers Credit
2,509.75
Libor Linked –
Various
Various Dates
Inter Corporate Deposit - Magma Fincorp
Limited 2,200.00
12.00% per annum September 26, 2013
Inter Corporate Deposit - Magma Fincorp
Limited 1,300.00
12.00% per annum April 29, 2013
Inter-corporate deposit – Reliance Capital 113,183.43 13.00% per annum Various Dates
F - 121
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Limited
Inter-corporate deposit - Chlorosulf
Private Limited 24,220.00
13.00% per annum Various Dates
Indiabulls Financial Services Limited
17,500.00
12.79% per annum 6 equal monthly
instalments starting
the 13th
month from
the date of
disbursement
Bank of Baroda (cash credit) 530.61 13.50% per annum Repayable on demand
Axis Bank Limited (cash credit) 645.33 13.25% per annum Repayable on demand
Axis Bank – Term loan – RMESL
3,366.04
13.75% per annum
18 unequal quarterly
instalment starting
from December 31,
2010
Equipment loan – Lowry
43.46
11.00% per annum repayable in 40
prorated monthly
instalments
Axis Bank (Cash credit – RMESL) 796.82 13.75% per annum Repayable on demand
Bank Asiana – Working Capital Lines
994.94
6.25% per annum May 17, 2012
HPFS – RMESL – Equipment Loan 357.15 12.95% per annum Various Dates
Total 227,834.91
Period 2012
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Allahabad Bank *
1,666.67
13.25% per annum ` 1,666.67 due on
March 31, 2013
Exim Bank *
2,333.34
13.25% per annum ` 2,333.34 due on
March 31, 2013
Jammu & Kashmir Bank *
2,333.34
13.25% per annum ` 2,333.34 due on
March 31, 2013
Syndicate Bank *
2,333.34
13.25% per annum `2,333.34 due on
March 31, 2013
Union Bank of India *
2,000.00
13.25% per annum ` 2,000.00 due on
March 31, 2013
Vijaya Bank *
2,666.67
13.25% per annum ` 2,666.67 due on
March 31, 2013
Union Bank of India 4,800.00
14.00% per annum ` 400 .00 - 20 equal
quarterly instalment
F - 122
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
starting from March
31, 2012
Syndicate Bank
10,312.50
13.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from
September 14, 2011
Syndicate Bank
10,000.00
11.75% per annum ` 2,500.00 - 4 equal
quarterly instalment
starting from
September 14, 2013
Buyers Credit
3,974.50
Libor Linked –
Various
Various Dates
Inter Corporate Deposit - Magma Fincorp
Limited 2,200.00
12.00% per annum March 26, 2013
Inter Corporate Deposit - Magma Fincorp
Limited 1,300.00
12.00% per annum April 29, 2013
Inter-corporate deposit – Reliance Capital
Limited 97,845.40
13.00% per annum Various Dates
Non Convertible debentures
3,850.00
12.50% per annum All series of ` 550
lakhs
Series B – December
10, 2012
Series C – March 10,
2013
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December
10, 2013
Series G – March 10,
2014
Series H – June 10,
2014
Indiabulls Financial Services Limited
17,500.00
12.79% per annum 6 equal monthly
instalments starting
the 13th
month from
the date of
disbursement
Bank of Baroda (cash credit) 554.60 13.50% per annum Repayable on demand
Axis Bank (cash credit – RMESL) 896.60 13.75% per annum Repayable on demand
Non Convertible Debentures
35,000.00
11.00% per annum Series 1 - ` 10,000
lakhs – March 1, 2014
Series 2 - ` 12,500
lakhs – March 1, 2015
Series 3 - ` 12,500
lakhs – March 1, 2016
Axis Bank – Term loan – RMESL
4,208.79
13.75% per annum 18 unequal quarterly
instalment starting
from December 31,
F - 123
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
2010
Equipment loan – Lowry
60.88
11.00% per annum repayable in 40
prorated monthly
instalments
Bank Asiana – Working Capital Lines
961.17
6.25% per annum May 17, 2012
HPFS – RMESL – Equipment Loan 447.47 12.95% per annum Various Dates
Inter Corporate Deposit - Divya Shakti
Marketing Pvt. Ltd. 19.10
Interest free
Total 207,264.37
* - Details of delayed repayment of loans:
Nature of loan Principal amount (`
in lakhs)
Due date Date of payment
Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012
Secured term loan 13,333.33 March 31, 2012 May 11, 2012
Secured term loan 1,250.00 December 16, 2011 December 30, 2011
Secured term loan 1,000.00 May 3, 2012 May 6, 2012
Period 2011
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Templeton Mutual Fund 21,984.79 11.75% per
annum
June 15, 2011
ICICI Prudential Fund 9,943.51 11.15% per annum April 20, 2011
Templeton Mutual Fund 9,422.16 11.75% per
annum
October 12, 2011
Yes Bank Limited 11,619.63 11.75% per
annum
November 25,
2011 BNP Paribas Mutual Fund
4,872.31 12.00% per
annum
June 20, 2011
Allahabad Bank 3,333.33 10.25% per annum ` 1,666.67 due on
March 31, 2012.
` 1,666.67 due on
March 31, 2013 Exim Bank 4,666.68 10.25% per annum ` 2,333.34 due on
March 31, 2012.
` 2,333.34 due on
March 31, 2013 Jammu & Kashmir Bank 4,666.68 10.25% per annum ` 2,333.34 due on
March 31, 2012.
` 2,333.34 due on
March 31, 2013
F - 124
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Syndicate Bank 4,666.68 10.25% per annum ` 2,333.34 due on
March 31, 2012.
` 2,333.34 due on
March 31, 2013 Union Bank of India 4,000.00 10.25% per annum ` 2,000.00 due on
March 31, 2012.
` 2,000.00 due on
March 31, 2013 Vijaya Bank 5,333.33 10.25% per annum ` 2,666.67 Due on
March 31, 2012.
` 2,666.67 Due on
March 31, 2013 Syndicate Bank 6,250.00
12.00% per annum ` 1,250.00 - 8
equal quarterly
instalment started
from September
17, 2010
Union Bank of India 6,000.00
13.00% per annum ` 400.00 - 20
equal quarterly
instalment starting
from March 31,
2012 Syndicate Bank 15,000.00
12.00% per annum ` 937.50 - 16
equal quarterly
instalment starting
from September
14, 2013
Canara Bank 12,500.00 11.50% per annum March 28, 2012
7,500.00 11.50% per annum May 15, 2012
Syndicate Bank 10,000.00 9.00% per annum May 27, 2011
Union Bank of India 10,000.00 10.50% per annum May 23, 2011
Yes Bank Limited 3,500.00 12.50% per annum May 27, 2011
DBS Bank Limited 15,000.00 11.40% per annum January 24, 2012
Buyers credit 3283.90 Libor Linked –
Various
Various Dates
Bank of Baroda (cash credit) 540.53 11.00% per annum Repayable on
demand Axis Bank (cash credit) 1,959.47 12.75% per annum Repayable on
demand Axis Bank – Term loan 5,348.40 13.75% per annum 18 unequal
quarterly
instalment starting
from December
31, 2010
Equipment loan – Others 100.40 11.00% per annum repayable in 40
prorated monthly
instalments
F - 125
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Cash Credit – Axis Bank 764.00 12.50% per annum Repayable on
demand
Reliance Capital Limited 15,000.00 12.00% per annum Various dates
Others 986.00 Interest free Various dates
Total 198,241.80
Period 2010
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
LIC MF Savings Plus 7,450.18 6.60% per annum May 10, 2010
LIC MF Income Plus 9,832.06 5.50% per annum July 26, 2010
LIC MF Floating Rate 983.21 5.50% per annum July 26, 2010
LIC MF Savings Plus Fund 9,808.90 5.50% per annum August 11, 2010
JM Financial Mutual Fund 2,477.40 6.30% per annum May 25, 2010
JM Financial Mutual Fund 1,486.43 6.30% per annum May 25, 2010
LIC MF Income Plus 9,599.87 6.25% per annum December 3, 2010
LIC MF Savings Plus 9,599.87 6.25% per annum December 3, 2010
IFCI Ltd. 2,466.68 7.75% per annum June 4, 2010
LIC MF Floating Rate 4,744.82 7.25% per annum December 29,
2010 LIC MF Savings Plus 4,744.53 7.25% per annum December 29,
2010 LIC MF Income Plus 9,489.05 7.25% per annum December 29,
2010 Allahabad Bank 5,000.00 10.75% per annum ` 1,666.67 due on
March 31, 2011.
` 1,666.67 due on
March 31, 2012
` 1,666.67 due on
March 31, 2013
Exim Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
F - 126
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Syndicate Bank 7,000.00
10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 due on
March 31, 2011.
` 2,000.00 due on
March 31, 2012
` 2,000.00 due on
March 31, 2013
Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 due on
March 31, 2011.
` 2,666.67 due on
March 31, 2012
` 2,666.67 due on
March 31, 2013
Syndicate Bank 10,000.00
10.00% per annum ` 1250.00 - 8
equal quarterly
instalment starting
from September
17, 2010
Union Bank of India 3,500.00
11.00% per annum ` 400 - 20 equal
quarterly
instalment starting
from March 31,
2012
Allahabad Bank 10,000.00 7.75% per annum September 24,
2010
Syndicate Bank 10,000.00 7.50% per annum June 22, 2010
Union Bank of India 10,000.00 7.00% per annum June 11, 2010
Bank of Baroda 10,000.00 7.75% per annum July 10, 2010
Buyers Credit 1,392.68 Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of Annexure
XV)
15,224.30 - January 25, 2011
Bank of Baroda (cash credit) 352.63 11.00% per annum Repayable on
demand
Axis Bank – Term loan 3,484.42 10.75% 18 unequal
quarterly
instalment starting
from December
31, 2010
F - 127
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
NIC Bank – Term loan 182.33 12% 16 un-equal
quarterly
instalments
Cash Credit – Axis Bank 533.62 10.75% Repayable on
demand
Cash Credit – NIC Bank 99.25 12.50% Repayable on
demand
ICICI Bank 1,885.19 Benchmark +
0.25% per annum
Within 30 months
from date of
disbursement
ICICI Bank 2,701.81 Benchmark +
3.20% per annum
Within 30 months
from date of
disbursement
Others 1,190.20 Interest free Various dates
Total 193,229.43
Period 2009
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Yes Bank Limited 14,886.41 9.75% per annum April 30, 2009
IDBI Limited 2,457.18 10.00 % per
annum
June 4, 2009
SIDBI 491.44 10.00 % per
annum
June 4, 2009
Canara Bank 2,456.18 10.25 % per
annum
June 4, 2009
IFCI 4,893.69 10.20 % per
annum
June 18, 2009
LIC MF Floating Rate Fund 4,767.92 10.75 % per
annum
September 14,
2009
LIC MF Income Plus Fund 4,767.92 10.75 % per
annum
September 14,
2009
LIC MF Liquid Fund 4,767.92 10.75 % per
annum
September 14,
2009
LIC MF Savings Plus Fund 4,767.92 10.75% per annum September 14,
2009
LIC MF Special Unit Scheme 4,767.92 10.75% per annum September 14,
2009 Allahabad Bank 5,000.00 10.75% per annum ` 1,666.67 due on
March 31, 2011.
` 1,666.67 due on
March 31, 2012
` 1,666.67 due on
March 31, 2013
F - 128
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Exim Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Syndicate Bank 7,000.00
10.75% per annum ` 2,333.34 due on
March 31, 2011.
` 2,333.34 due on
March 31, 2012
` 2,333.34 due on
March 31, 2013
Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 due on
March 31, 2011.
` 2,000.00 due on
March 31, 2012
` 2,000.00 due on
March 31, 2013
Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 due on
March 31, 2011.
` 2,666.67 due on
March 31, 2012
` 2,666.67 due on
March 31, 2013
Allahabad Bank 10,000.00 13.50% per annum January 8, 2010
Syndicate Bank 10,000.00 13.50% per annum December 31,
2009
Buyers Credit 926.80 Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of Annexure
XV)
14,230.00 - January 25, 2011
ICICI Bank 6,260.92 Benchmark +
3.20% per annum
Within 30 months
from date of
disbursement
ICICI Bank 1,897.28 Benchmark +
0.25% per annum
Within 30 months
from date of
disbursement
Bank of Baroda (cash credit) 37.20 11.00% per annum Repayable on
demand
Others 223.89 Interest free Various dates
F - 129
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Total 132,600.59
Period 2008
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
UTI Mutual Funds - liquid cash plan 1,973.16 10.25% per
annum
May 20, 2008
ABN Amro Money Plus Fund 4,932.89 10.25% per
annum
May 20, 2008
Lotus India Liquid Fund 1,973.16 10.25% per
annum
May 20, 2008
Birla Sunlife Interval Income Fund 5,297.62 10% per annum August 20, 2008
Kotak Quarterly Interval Plan - Series 6 2,408.01 10% per annum August 20, 2008
Allahabad Bank 1,965.13 10.20 % per
annum
June 4, 2008
Birla Cash Plus 4,421.54 10.20 % per
annum
June 4, 2008
United Bank Of India 3,438.97 10.20 % per
annum
June 4, 2008
UTI Spread Fund 2,456.41 10.20% per
annum
June 4, 2008
Saraswat Co-op Bank Ltd. 982.42 10.28% per
annum
June 4, 2008
SBI Life Insurance Co. Ltd. 2,456.04 10.28% per
annum
June 4, 2008
Tata MF - Tata Fixed Horizon Fund 3,928.19 10.50% per
annum
June 4, 2008
ABN Amro Flexible Short Term Plan - Series B 2,455.16
10.50% per
annum
June 4, 2008
Rank Investments Private Limited 2,500.00 10.75% per
annum ` 833.34 due on
March 31, 2011.
` 833.34 due on
March 31, 2012
` 833.32 due on
March 31, 2013
Barclays Bank PLC 37,500.00 10.75% per
annum ` 12,500.00 due on
March 31, 2011.
` 12,500.00 due on
March 31, 2012
` 12,500.00 due on
March 31, 2013
ICICI (car loan) 0.40 Various rates As per schedule
F - 130
Particulars of Lenders and Instrument Amount
outstanding
Interest Rate Repayment
Schedule
Zero Coupon FCCB (Refer note 8 of Annexure
XV)
13,099.90 - January 25, 2011
Inter-corporate deposit – Reliance Capital limited 2,046.30 12.00% per
annum
Repayable on
demand
Bank of Baroda (cash credit) 293.60 11.25% per
annum
Repayable on
demand Others 290.62 Interest free Various dates
Total 94,419.52
Commercial Paper:
Details of Terms of Discount rate and repayment schedule of Commercial papers are set out below:
Period 2011
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Templeton MF (4,500 commercial paper of face
value ` 500,000 each dated December 28, 2010
aggregating to ` 22,500 lakhs)
21,984.79 Issued at `
21,339.08 lakhs,
discount rate
11.75 % per
annum
June 15, 2011
ICICI Prudential Mutual Fund (2,000 commercial
paper of face value ` 500,000 each dated January 20,
2011 aggregating to ` 10,000 lakhs)
9,943.51 Issued at `
9,732.42 lakhs,
discount rate
11.15 % per
annum
April 20, 2011
Templeton MF (2,000 commercial paper of face
value ` 500,000 each dated February 3, 2011
aggregating to ` 10,000 lakhs)
9,422.16 Issued at `
9,252.39 lakhs,
discount rate
11.75 % per
annum
October 12, 2011
Yes Bank Ltd (2500 commercial paper of face value
` 500,000 each dated February 25, 2011 aggregating
to ` 12,500 lakhs)
11,619.63 Issued at `
11,490.20 lakhs,
discount rate
11.75 % per
annum
November 25,
2011
BNP Paribas Mutual Fund (1,000 commercial paper
of face value ` 500,000 each dated March 21, 2011
aggregating to ` 5,000 lakhs)
4,872.31 Issued at `
4,854.75 lakhs,
discount rate
12.00 % per
annum
June 20, 2011
Total 57,842.40
Period 2010
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
F - 131
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Savings Plus (1,500 commercial paper of face
value ` 500,000 each dated June 3, 2009 aggregating to
` 7,500 lakhs)
7,450.18 Issued at `
7,064.41 lakhs,
discount rate
6.60 % per
annum
May 10,
2010
LIC MF Income Plus (2,000 commercial paper of face
value ` 500,000 each dated October 28, 2009
aggregating to ` 10,000 lakhs)
9,832.06 Issued at `
9607.67 lakhs,
discount rate
5.50 % per
annum
July 26, 2010
LIC MF Floating Rate (200 commercial paper of face
value ` 500,000 each dated October 28, 2009
aggregating to ` 1,000 lakhs)
983.21 Issued at `
960.77 lakhs,
discount rate
5.50 % per
annum
July 26, 2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated November 13, 2009
aggregating to ` 10,000 lakhs)
9,808.90 Issued at `
9607.67 lakhs,
discount rate
5.50 % per
annum
August 11,
2010
J M Financial Mutual Fund (500 commercial paper of
face value ` 500,000 each dated November 25, 2009
aggregating to ` 2,500 lakhs)
2,477.40 Issued at `
2424.26 lakhs,
discount rate
6.30 % per
annum
May 25,
2010
J M Financial Mutual Fund (300 commercial paper of
face value ` 500,000 each dated November 30, 2009
aggregating to ` 1,500 lakhs)
1,486.43 Issued at `
1455.78 lakhs,
discount rate
6.30 % per
annum
May 25,
2010
LIC MF Income Plus (2,000 commercial paper of face
value ` 500,000 each dated January 29, 2010
aggregating to ` 10,000 lakhs)
9,599.87 Issued at `
9499.02 lakhs,
discount rate
6.25 % per
annum
December 3,
2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated January 29, 2010
aggregating to ` 10,000 lakhs)
9,599.87 Issued at `
9499.02 lakhs,
discount rate
6.25 % per
annum
December 3,
2010
IFCI Ltd. (2,000 commercial paper of face value `
500,000 each dated January 29, 2010 aggregating to `
10,000 lakhs)
2,466.68 Issued at `
2452.10 lakhs,
discount rate
7.75 % per
annum
June 4, 2010
LIC MF Floating Rate (1000 commercial paper of face
value ` 500,000 each dated March 9, 2010 aggregating
to ` 5,000 lakhs)
4,744.82 Issued at `
4,723.24 lakhs,
discount rate
7.25 % per
annum
December
29, 2010
LIC MF Savings Plus (1000 commercial paper of face
value ` 500,000 each dated March 15, 2010 aggregating
to ` 5,000 lakhs)
4,744.53 Issued at `
4,728.56 lakhs,
discount rate
7.25 % per
annum
December
29, 2010
F - 132
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Income Plus (2000 commercial paper of face
value ` 500,000 each dated March 15, 2010 aggregating
to ` 10,000 lakhs)
9,489.05 Issued at `
9,457.12 lakhs,
discount rate
7.25 % per
annum
December
29, 2010
Total 72,683.00
Period 2009
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Yes Bank Limited (3,000 commercial paper of
face value ` 500,000 each dated February 3, 2009
aggregating to ` 15,000 lakhs)
14,886.41 Issued at `
14,663.14 lakhs,
discount rate 9.75
% per annum
April 30, 2009
IDBI Limited (500 commercial paper of face
value ` 500,000 each dated March 9, 2009
aggregating to ` 2500 lakhs)
2,457.18 Issued at `
2,441.80 lakhs,
discount rate
10.00 % per
annum
June 4, 2009
SIDBI (100 commercial paper of face value `
500,000 each dated March 9, 2009 aggregating to
` 500 lakhs)
491.44 Issued at ` 488.36
lakhs, discount
rate 10.00 % per
annum
June 4, 2009
Canara Bank (500 commercial paper of face value
` 500,000 each dated March 6, 2009 aggregating
to ` 2,500 lakhs)
2,456.18 Issued at `
2,438.37 lakhs,
discount rate
10.25% per
annum
June 4, 2009
IFCI (1,000 commercial paper of face value `
500,000 each dated March 20, 2009 aggregating
to ` 5,000 lakhs)
4,893.69 Issued at `
4,877.33 lakhs,
discount rate
10.20% per
annum
June 18, 2009
LIC MF Floating Rate Fund (1,000 commercial
paper of face value ` 500,000 each dated March
17, 2009 aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount
rate 10.75% per
annum
September 14,
2009
LIC MF Income Plus Fund (1,000 commercial
paper of face value ` 500,000 each dated March
17, 2009 aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount
rate 10.75% per
annum
September 14,
2009
LIC MF Liquid Fund (1,000 commercial paper of
face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at `
4,746.95 lakhs,
discount rate
10.75% per
annum
September 14,
2009
F - 133
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Savings Plus Fund (1,000 commercial
paper of face value ` 500,000 each dated March
17, 2009 aggregating to ` 5,000 lakhs)
4,767.92 Issued at `
4,746.95 lakhs,
discount rate
10.75% per
annum
September 14,
2009
LIC MF Special Unit Scheme (1,000 commercial
paper of face value ` 500,000 each dated March
17, 2009 aggregating to ` 5,000 lakhs)
4,767.92 Issued at `
4,746.95 lakhs,
discount rate
10.75% per
annum
September 14,
2009
Total 49,024.50
Period 2008
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
UTI Mutual Funds - liquid cash plan (400
commercial paper of face value ` 500,000 each
dated February 20, 2008 aggregating to ` 2,000
lakhs)
1,973.16 Issued at `
1,950.70 lakhs,
discount rate
10.25% per
annum
May 20, 2008
ABN Amro Money Plus Fund (1,000 commercial
paper of face value ` 500,000 each dated February
20, 2008 aggregating to ` 5,000 lakhs)
4,932.89 Issued at `
4,876.74 lakhs,
discount rate
10.25 % per
annum
May 20, 2008
Religare Mutual Fund* (400 commercial paper of
face value ` 500,000 each dated February 20, 2008
aggregating to ` 2,000 lakhs)
1,973.16 Issued at `
1,950.70 lakhs,
discount rate
10.25 % per
annum
May 20, 2008
Birla Sunlife Interval Income Fund Quarterly Plan
Series II (1,100 commercial paper of face value `
500,000 each dated February 20, 2008 aggregating
to ` 5,500 lakhs)
5,297.62 Issued at `
5,238.78 lakhs,
discount rate
10.00% per
annum
August 20, 2008
Kotak Quarterly Interval Plan - Series 6 (500
commercial paper of face value ` 500,000 each
dated February 20, 2008 aggregating to ` 2,500
lakhs)
2,408.01 Issued at `
2,381.26 lakhs,
discount rate
9.20% per annum
August 20, 2008
Allahabad Bank (400 commercial paper of face
value ` 500,000 each dated March 4, 2008
aggregating to ` 2,000 lakhs)
1,965.13 Issued at `
1,949.87 lakhs,
discount rate
10.20% per
annum
June 4, 2008
Birla Cash Plus (900 commercial paper of face
value ` 500,000 each dated March 4, 2008
aggregating to ` 4,500 lakhs)
4,421.54 Issued at `
4,387.21 lakhs,
discount rate
10.20% per
annum
June 4, 2008
F - 134
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
United Bank Of India (700 commercial paper of
face value ` 500,000 each dated March 4, 2008
aggregating to ` 3,500 lakhs)
3,438.97 Issued at `
3,412.27 lakhs,
discount rate
10.20% per
annum
June 4, 2008
UTI Spread Fund (500 commercial paper of face
value ` 500,000 each dated March 4, 2008
aggregating to ` 2,500 lakhs)
2,456.41 Issued at `
2,437.34 lakhs,
discount rate
10.20% per
annum
June 4, 2008
Saraswat Co-op Bank Ltd. (200 commercial paper
of face value ` 500,000 each dated March 7, 2008
aggregating to ` 1,000 lakhs)
982.42 Issued at ` 975.55
lakhs, discount
rate 10.28% per
annum
June 4, 2008
SBI Life Insurance Co. Ltd. (500 commercial paper
of face value ` 500,000 each dated March 7, 2008
aggregating to ` 2,500 lakhs)
2,456.04 Issued at `
2,438.87 lakhs,
discount rate
10.28% per
annum
June 4, 2008
Tata MF - Tata Fixed Horizon Fund (800
commercial paper of face value ` 500,000 each
dated March 7, 2008 aggregating to ` 4,000 lakhs)
3,928.19 Issued at `
3,900.14 lakhs,
discount rate
10.50% per
annum
June 4, 2008
ABN Amro Flexible Short Term Plan - Series B
(500 commercial paper of face value ` 500,000
each dated March 7, 2008 aggregating to ` 2,500
lakhs)
2,455.16 Issued at `
2,437.59 lakhs,
discount rate
10.50% per
annum
June 4, 2008
Total 38,688.70
* Religare Mutual Fund is Formerly known as Lotus India Mutual Fund
Notes:
Note 1: Secured by first pari passu charge on all fixed assets of the Parent Company.
Note 2: Cash credit is secured by deferred payment note, hypothecation of book-debts, moveable fixed assets
and stocks of chemicals.
Note 3: Secured against the motor cars acquired on Equitable Monthly Instalment (EMI) System.
Note 4: Secured by pari passu first charge on the inventories, book debts and other current assets of the
Company.
F - 135
Note 5: Secured by pari passu second charge of all the movable fixed assets and pari passu first charge on
current assets of the Company.
Note 6: Secured by pari passu first charge on goods, stocks, raw material finished goods, unfinished goods,
book debts and loans and advances i.e. current assets of the Company
Note 7: Secured by pari passu second charge on current assets and the moveable fixed assets of the
Company.
Note 8: As per the terms of the issue document, the bonds were redeemable, in whole but not in part at the
option of the Company at any time on or after January 25, 2009 and on or prior to January 26, 2011 subject
to certain conditions at 121.679 per cent of the principal amount. During the current year the balance
outstanding bonds were redeemed.
Note 9: These loans have been guaranteed by Reliance Capital Limited.
Note 10: Secured by first pari passu charge on the all assets of the Parent Company and its Wholly owned
Indian subsidiaries.
Note 11: Secured by pari passu first charge of all the fixed assets, inventories, book debts and loans of
advances of subsidiary and Corporate guarantee of the Parent Company.
Note 12 : Secured by Standby Letter of credit issued by Parent Company for availing facility by subsidiary
company in foreign.
Note 13: Secured by the hypothecation of fixed assets purchased.
Note 14: Secured by second charge on current assets and fixed assets (including moveable and immovable)
of the Parent Company.
Note 15: Secured by first pari passu charge on the current assets and moveable fixed assets of the Company.
F - 136
Annexure XVI
Reliance MediaWorks Limited
Statement of capitalisation of the Group
Pre-issue Post-issue
As at
Particulars March 31, 2013 As Adjusted for Issue
Borrowings:
Short term borrowings 145,385.80
Long term borrowings (including ` 45,005.90 current
maturities) 82,449.10
Total borrowings 227,834.90 -
Shareholder's fund:
Share capital 2,453.81
Reserves and surplus (net) (excluding revaluation reserves) (95,161.58)
Less: Miscellaneous expenditures not written off -
Total shareholder's fund (92,707.77) -
Long term debt / Shareholder‟s fund NA
Notes : -
a) Short term borrowing represents amount repayable within one year from March 31, 2013
b) The figures disclosed above are based on the summary statement of assets and liabilities, as restated, of
the Company as at March 31, 2013
c) The corresponding post issue figures are not determinable at this stage pending the completion of the
Rights issue process and hence have not been furnished.
F - 137
Annexure XVII
Reliance MediaWorks Limited
Statement of the dividend paid / proposed
(` in lakhs)
Class of shares
Face
Value of
share in `
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Equity shares
Equity shares capital as at
year end / period end 5
2,306.31
2,306.31
2,306.31
2,306.31 2,306.31 2,306.31
Total 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
Final dividend
Rate of the final dividend
(excluding dividend
distribution tax) - - - - - 50.00%
Aggregating amount of
final dividend - - - - - 1,153.20
F - 138
Annexure XVIII
Reliance MediaWorks Limited
Statement of related party disclosures of the Group
(` in lakhs)
Parties where control exists
Holding Company
Reliance Capital Limited (up to November 30, 2007)
Reliance Land Private Limited (up to November 30, 2007)
Other related parties with whom transactions have taken place during the period
(a) Significant shareholders, key managerial personnel and their relatives
Manmohan Shetty (up to November 30, 2007)
Pooja Shetty (up to November 30, 2007)
Kirti Desai – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from January
30, 2008 till May 15, 2011)
Madhulika Singh – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from May
28, 2011 upto June 30, 2011)
Ashish Agarwal – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from July
1, 2011)
Reliance Land Private Limited (upto November 30, 2007)
(b) Enterprises over which company / key managerial personnel has significant influence /
Associates
HPE / Adlabs LP.
Sultan Production Private Limited (up to March 31, 2009)
GH – Reliance LLC (with effect from October 1, 2012)
Gold Adlabs
Dharma Production Private Limited (up to November 30, 2007)
Idream Productions Private Limited (up to November 30, 2007)
Whistling Woods International Private Limited (up to November 30, 2007)
Reliance Communication Infrastructure Limited (up to November 30, 2007)
Reliance Capital Assets Management Limited (up to November 30, 2007)
Reliance Web Stores Limited (up to November 30, 2007)
Reliance General Insurance Company Limited (up to November 30, 2007)
M/s. Shringar Films (upto November 30, 2007)
South Yarra Holding (upto November 30, 2007)
Shringar Films Limited (upto November 30, 2007)
Adlabs Shringar Multiplex Cinemas Private Limited (upto November 30, 2007)
(c) Joint ventures
F - 139
Cineplex Private Limited (upto June 3, 2011)
Swanston Multiplex Cinemas Private Limited
Divyashakti Marketing Private Limited
Adlabs Multiplex Limited (upto December 19, 2007)
Nature of
Transactions
Name of Related
Party
Holding Company
Period
March
2013
Period
2012
Period
2011 Period
2010
Period
2009
Period
2008
Dividend Paid
Reliance Land
Private Limited
-
- - - - 515.00
Reliance Capital
Limited
-
- - - - 31.38
Nature of
Transactions
Name of Related
Party
Significant Shareholders, key managerial personnel and their
relatives
Period
March
2013
Period
2012
Period
2011 Period
2010
Period
2009
Period
2008
Dividend Paid Manmohan Shetty - - - - 57.30
Managerial
Remuneration
Kirti Desai - 5.60 10.80 7.80 7.80 1.40
Madhulika Singh - 0.80 - - - -
Ashish R. Agarwal 11.80 29.40 - - - -
Manmohan Shetty - - - - - 116.10
Pooja Shetty - - - - - 4.90
Loans given Kirti Desai - - - 5.00 - -
Loans
received back Kirti Desai
-
- - 5.00 - -
Nature of
Transaction
s
Name of Related
Party
Enterprises over which Company has significant influence /
associates
Period
March
2013
Period
2012
Period
2011 Period
2010
Period
2009
Period
2008
Reimburseme
nt of
expenses
Sultan Production
Private Limited - - - - (107.70) -
Income from
theatre
operation Gold Adlabs 16.80 166.60 121.60 151.30 252.08 292.22
(Withdrawal)
/ additional
contribution Gold Adlabs (16.79) (189.90)
(105.80
) (130.l0) (278.31) (301.61)
Interest
Income HPE / Adlabs LP -
-
- - - 43.70
Repayment
of
Principal by
Limited
liability
Partnership HPE / Adlabs LP - - - 241.70 - -
Investment in GH – Reliance 8,198.30 - - - - -
F - 140
Nature of
Transaction
s
Name of Related
Party
Enterprises over which Company has significant influence /
associates
Period
March
2013
Period
2012
Period
2011 Period
2010
Period
2009
Period
2008
Associate LLC
Loan Given
Sultan Production
Private Limited
-
- - - 548.30 719.20
Outstanding
Balances as
at period end
Sultan Production
Private Limited
-
- - - 1,159.70 719.20
F - 141
Annexure XIX
Reliance MediaWorks Limited
Segment information of the Group
Particulars Film production services
Period
March
2013
Period
2012
Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 6,861.50 28,638.40 24,726.90 16,060.40 13,498.00 6,647.70
Other income - - 416.30 409.80 - 49.70
Net revenue 6,861.50 28,638.40 25,143.20 16,470.20 13,498.00 6,697.40
Internal segment
sales (508.10) (835.50) (1,877.70) (705.90) (441.00) (376.50)
Total segment
revenue 6,353.40 27,802.90 23,265.50 15,764.30 13,057.00 6,320.90
Result ((loss) /
profit before
interest and
corporate expenses)
Segment result (7,443.51) (13,312.94) (477.60) 3,067.42 3,538.96 2,306.70
Other Information
Segment assets 76,436.29 71,199.49 75,073.22 58,167.72 29,764.20 15,425.76
Segment liabilities 5,959.70 5,484.30 5,268.80 4,656.80 1,577.50 3,186.70
Net capital
employed 70,476.59
65,715.19
69,804.42 53,510.92 28,186.70 12,239.06
Capital expenditure 1,119.86 3,786.50 16,464.20 23,533.80 4,810.90 7,514.61
Depreciation,
amortisation and
impairment 3,755.00 9,346.80 4,870.00 2,189.28 1,049.84 330.50
Particulars Theatrical exhibition
Period
March
2013
Period
2012
Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 24,387.50 86,275.00 51,424.60 47,620.80 34,169.84 12,238.64
Other income 19.50 41.51 3,300.40 14.80 - 330.30
Net revenue 24,407.00 86,316.51 54,725.00 47,635.60 34,169.84 12,568.94
Internal segment
sales
-
(9.00) (46.70) (910.80) (998.70) -
F - 142
Particulars Theatrical exhibition
Period
March
2013
Period
2012
Period 2011 Period 2010 Period 2009 Period 2008
Total segment
revenue 24,407.00 86,307.51 54,678.30 46,724.80 33,171.14 12,568.94
Result ((loss) /
profit before
interest and
corporate
expenses)
Segment result (13,366.09) (30,380.83) (10,398.60) (4,953.70) (4,545.60) 684.90
Other
Information
Segment assets 66,818.13 84,119.03 108,259.33 121,947.33 108,036.63 55,514.41
Segment
liabilities
18,174.90 21,310.70
15,772.40 13,197.00 10,908.40 5,575.30
Net capital
employed
48,643.23 62,808.33
92,486.93 108,750.33 97,128.23 49,939.11
Capital
expenditure
436.79 2,488.60
5,860.10 18,905.70 36,854.70 16,980.33
Depreciation and
amortisation and
impairment 3,901.30
11,732.00 8,241.80 7,140.70 3,509.60 1,152.00
Particulars Television / Film Production and Distribution
Period
March
2013
Period
2012
Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating revenue 4,398.90 9,150.90 5,334.00 10,411.00 21,164.80 13,907.90
Other income - 44.14 690.20 656.30 - 332.10
Net revenue 4,398.90 9,195.04 6,024.20 11,067.30 21,164.80 14,240.00
Internal segment
sales
- -
(353.70) (968.30) (1,457.60) (1,648.80)
Total segment
revenue
4,398.90 9,195.04
5,670.50 10,099.00 19,707.20 12,591.20
Result ((loss) /
profit before
interest and
corporate expenses)
Segment result 638.51 1,965.80 1,150.00 4,011.00 3,187.33 (148.32)
F - 143
Particulars Television / Film Production and Distribution
Period
March
2013
Period
2012
Period 2011 Period 2010 Period 2009 Period 2008
Other Information
Segment assets 13,775.16 13,687.66 10,528.86 16,325.56 16,882.06 41,849.73
Segment liabilities 3,358.10 3,072.30 2,417.70 2,178.20 1,420.70 7,974.30
Net capital
employed
10,417.06 10.615.36
8,111.16 14,147.36 15,461.36 33,875.43
Capital expenditure 4.44 23.10 19.20 483.20 - 7,512.90
Depreciation and
amortisation and
impairment 29.00 38.60 49.00 280.00 8,915.87 8,647.50
Particulars Radio
Period
March
2013
Period
2012
Period 2011 Period 2010 Period 2009 Period 2008
Other Information
Segment assets - - - - - 45,061.80
Segment liabilities - - - - - 7,021.90
Net capital
employed
-
- - - - 38,039.90
Capital expenditure - - - - - 19,195.02
Particulars Total
Period
March 2013
Period 2012
Period 2011 Period 2010 Period 2009 Period 2008
Revenue
Operating
revenue
35,647.90
124,064.30 81,485.50 74,092.20 68,832.64 32,794.24
Other income 19.50 85.64 4,406.90 1,080.90 - 712.10
Net revenue 35,667.40 124,149.94 85,892.40 75,173.10 68,832.64 33,506.34
Internal
segment sales
(508.10)
(844.50) (2,278.10) (2,585.00) (2,897.30) (2,025.30)
Total segment
revenue
35,159.30
123,305.44 83,614.30 72,588.10 65,935.34 31,481.04
Unallocated
revenue
1,478.50
2,181.46 1,411.90 2,175.80 7,184.90 4,815.70
Total Revenue 36,637.80 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74
F - 144
Particulars Total
Period
March 2013
Period 2012
Period 2011 Period 2010 Period 2009 Period 2008
Result ((loss) /
profit before
interest and
corporate
expenses)
Segment result (20,171.08) (41,727.97) (9,726.20) 2,124.72 2,180.69 2,843.28
Unallocated
corporate
income 1,478.50 2,181.46 1,411.90 2,175.80 7,184.90 4,815.70
Unallocated
corporate
expenses (954.89) (10,709.42) (6,598.56) (5,864.41) (3,860.56) (1,827.61)
(Loss) / profit
before interest
and tax (19,647.47) (50,255.91) (14,912.86) (1,563.89) 5,505.03 5,831.37
Income tax
(including
deferred tax and
fringe benefit
tax) (221.10) (276.91) (586.63) (53.02) (543.36) (858.01)
Minority
interest (245.50) (732.40) 196.70 530.87 322.12 (53.80)
(Loss) / profit
for the period (34,044.77) (91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52
Other
Information
Segment assets 157,029.58 169,006.18 193,861.41 196,440.61 154,682.89 157,851.70
Unallocated
corporate assets 15,323.09 17,046.37 34,913.25 56,315.00 49,131.99 29,425.71
Total assets 172,352.67 186,052.55 228,774.66 252,755.61 203,814.88 187,277.41
Segment
liabilities 27,492.70 29,867.30 23,458.90 20,032.00 13,906.60 23,758.20
Unallocated
corporate
liabilities 237,567.75 214,335.05 202,608.93 196,906.03 140,665.84 95,736.46
Total liabilities 265,060.45 244,202.35 226,067.83 216,938.03 154,572.44 119,494.66
Net capital
employed
(unallocated) (222,472.57) (197,288.68) (167,695.68) (140,591.03) (91,533.85) (66,310.75)
Capital
expenditure 1,561.09 6,298.20 22,343.50 42,922.70 41,665.60 51,202.86
Unallocated
corporate
capital
expenditure - 51.90 58.70 168.60 186.30 74.28
Total capital
expenditure 1,561.09 6,350.10 22,402.20 43,091.30 41,851.90 51,277.14
F - 145
Particulars Total
Period
March 2013
Period 2012
Period 2011 Period 2010 Period 2009 Period 2008
Depreciation
and
amortisation
and impairment 7,685.30 21,117.40 13,160.80 9,609.98 13,475.31 10,130.00
Unallocated
depreciation
and
amortisation
and impairment 38.00 218.10 65.70 119.46 67.10 23.62
Total
depreciation
and
amortisation
and impairment 7,723.30 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62
India
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Segment Revenue 28,333.10 89,526.60 60,277.90 50,012.80 52,324.04 31,292.64
Segment Assets 149,223.17 160,714.52 200,866.76 227,050.71 178,966.78 186,167.11
Capital Expenditure 859.42 4,485.79 18,941.70 34,344.70 22,584.80 51,276.64
United States of America
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Segment Revenue 6,544.00 20,636.40 16,234.10 15,679.80 11,540.00 120.00
Segment Assets 19,178.10 19,239.10 14,093.80 13,294.80 12,385.10 654.40
Capital Expenditure 674.95 720.40 2,325.60 5,269.80 9,101.00 0.50
Malaysia
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Segment Revenue - 9,427.20 5,615.70 4,970.80 1,491.10
Segment Assets - - 10,323.60 10,892.10 12,197.90
Capital Expenditure - 405.90
617.50
1,702.50
10,081.00
Others
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Segment Revenue 282.20 3,715.20 1,486.60 1,924.70 580.20 68.40
Segment Assets 3,951.40 6,098.90 3,490.50 1,518.00 265.10 455.90
Capital Expenditure 26.73 737.90 517.40 1,774.30 85.10 -
F - 146
Total
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Segment Revenue 35,159.30 81,644.46 83,614.30 72,588.10 65,935.34 31,481.04
Segment Assets 172,352.67 186,052.55 228,774.66 252,755.61 203,814.88 187,277.41
Capital Expenditure 1,561.09 6,350.10 22,402.20 43,091.30 41,851.90 51,277.14
The Group has disclosed Business Segment as the primary segment.
The business of the Group is divided into three segments - Film production services, Theatrical exhibition
and Television / Film production and distribution. Segments have been identified taking into account the
nature of the business, the differing risks and returns, the organisation structure and internal reporting
system. Film production services operation primarily comprise of processing of raw exposed films, colour
correction, editing, digital processing, equipment / facility rental, copying and printing of positive exhibitions
prints and trading in raw film rolls. Theatrical exhibition operations comprise of single screen, multiplex /
Imax cinema exhibition, range of activities / services offered at cinema centres including catering food and
beverages. Television / film production and distribution comprises of production of television / film content
which is produced / coproduced by the Group and includes related services of financing for production of
films. Film distribution operation comprises of the Group‟s share of revenue from exploitation of distribution
rights acquired by the Group, which may include as a package, theatrical rights and video and television
rights.
Segment revenue, segment results, segment assets and segment liabilities include the respective amounts
identifiable to each segment as also the amounts allocable on a reasonable basis. Income and expenses which
are not directly attributable to any business segment are shown as unallocated corporate income / expenses.
Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocated
corporate assets and liabilities respectively.
Further, the Group has considered the overseas operations as a separately identifiable geographic segment
due to substantial operations in the United States of America and Malaysia. Hence, the Group has identified
secondary segments based on geographic locations and has reported India, Americas, Malaysia and Rest of
world as geographic segments.
Pursuant to the business restructuring exercise of Film production services, with effect from October 1, 2011,
animation business is no longer considered to be a part of this segment.
F - 147
The Board of Directors
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
MUMBAI 400 065
July 3, 2013
Dear Sirs
1. We have examined the attached restated summary financial information of Reliance
MediaWorks Limited („RMWL‟ or „the Company‟), as approved by the Board of Directors of
the Company, prepared in terms of the requirements of Paragraph B, Part II of Schedule II to
the Companies Act, 1956 ('the Act'), the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations 2009, as amended to date, to the extent
applicable („SEBI Regulations‟), the Guidance note on „Reports in Company Prospectus
(Revised)‟ issued by the Institute of Chartered Accountants of India („ICAI‟), to the extent
applicable („Guidance Note‟), and in terms of our engagement agreed upon with you in
accordance with our engagement letter dated July 3, 2013 in connection with the proposed
Issue of Equity Shares of the Company on a rights basis.
2. We have examined the attached Summary Statement of Assets and Liabilities, as restated, of
the Company as at March 31, 2013, September 30, 2012, March 31, 2011, March 31, 2010,
March 31, 2009 and March 31, 2008, the attached Summary Statement of Profit and Loss, as
restated, for the six months ended March 31, 2013, eighteen months ended September 30,
2012, year ended March 31, 2011, year ended March 31 2010, year ended March 31, 2009 and
nine months ended March 31, 2008, and the attached Summary Statement of Cash Flow, as
restated, for the six months ended March 31, 2013, eighteen months ended September 30,
2012, for the year ended March 31, 2011, year ended March 31, 2010, year ended March 31,
2009 and nine months ended March 31, 2008, as set out in Annexure I, Annexure II and
Annexure III respectively, together referred to hereinafter as the „Restated Summary
Statements‟. These restated summary statements of RMWL have been prepared by the
management from the audited condensed financial statements for the six months ended March
31, 2013 which have been approved by the Board of Directors and from the audited financial
statements for the eighteen months ended September 30, 2012, for the year ended March 31,
2011, year ended March 31, 2010, year ended March 31, 2009 and nine months ended
March 31, 2008, being the last five financial years / periods for which the accounts of the
Company have been made up, and have been approved by the Board of Directors for the
respective years / periods and adopted by the Members of the Company. The financial
statements of the Company as at and for the year ended March 31, 2009 and nine months ended
March 31, 2008 have been audited by one of the joint auditors, B S R & Co., Chartered
Accountants. The condensed financial statement as at and for the six month ended March 31,
2013, financial statements as at and for the eighteen months ended September 30, 2012 and the
financial statements as at and for the year ended March 31, 2011 and as at and for the year
ended March 31, 2010 have been audited by us. The restated summary statements have been
prepared in line with General Circular No. 62/2011 F No. 17/244/2011-CL-V, dated September
5, 2011 issued by Ministry of Corporate Affairs, Government of India.
F-148
3. Without qualifying our report, we draw attention to the following
a) As set out in paragraph (a) of Note C of Annexure IV to this report, the Company‟s net worth
is fully eroded (restated) and has a negative net worth of ` 47,014.66 lakhs, and the Company
has incurred a loss of ` 27,593.15 lakh (as restated) for the six months period October 1, 2012
to March 31, 2013, indicating the existence of uncertainty that may cast doubt about the
Company‟s ability to continue as a going concern. Considering the matters set out in the said
note, this Restated Summary Statement is prepared on a going concern basis.
b) As set out in paragraph (b) of Note C of Annexure IV to this report, the Company‟s net worth
is fully eroded (restated) and has a negative net worth of ` 20,451.53 lakhs, and the Company
has incurred a loss of ` 70,356.34 lakh (as restated) for the eighteen months period April 1,
2011 to September 30, 2012, indicating the existence of uncertainty that may cast doubt about
the Company‟s ability to continue as a going concern. Considering the matters set out in the
said note, this Restated Summary Statement is prepared on a going concern basis.
c) As set out in paragraph (f)(i) of Note C of Annexure IV, during the nine months period ended
March 31, 2008, the Hon‟ble High Court of Judicature at Bombay vide its order dated March
7, 2008 sanctioned the Modified Composite Scheme of Amalgamation and Arrangement
(„Modified Scheme‟) for modification of the Composite Scheme. The Modified Scheme was
filed with the ROC on March 31, 2008. The Modified Scheme inter-alia provides that the net
results of the transactions related to the radio business of the Company for the period from
March 31, 2006 to the Effective Date (i.e. the date of filing the Modified Scheme with the
ROC, March 31, 2008) be adjusted in the General reserve account of the Company. The
Composite Scheme was given effect to in accordance with the accounting treatment
prescribed by the said Scheme in the financial statements for the fifteen months ended June
30, 2007 and, only the modifications to the original scheme were given effect to in the
financial statements for the nine months ended March 31, 2008.
d) As set out in paragraph (e)(ii) of Note C and point 2 of paragraph IV of Note D of Annexure
IV, during the year ended March 31, 2009, the Hon‟ble High Court of Judicature at Mumbai
vide its order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company
with its wholly owned subsidiaries Adlabs Multiplex and Theatres Limited, Adlabs Multiplex
Limited, Rave Entertainment Private Limited and Mahimna Entertainment Private Limited
(„Amalgamation Scheme‟), under sections 391 to 394 of the Act. Pursuant to the said
Amalgamation Scheme, the Company has recorded an increase in value of assets aggregating
` 17,890.10 lakhs by crediting the Capital reserve. Further, the Company has recorded an
adjustment for diminution in value of its assets (production and distribution rights, fixed
assets, investments, debtors and loans and advances) aggregating ` 15,669.70 lakhs by
debiting the same to Capital reserve instead of the profit and loss account, had the Company
debited the profit and loss account, the loss before tax for the year would be higher by the said
amount
4. In accordance with the requirements of Paragraph B, Part II of Schedule II of the Act, the SEBI
Regulations, the Guidance Note and in accordance with the terms of our engagement agreed with
you, and read with paragraphs 2 above and with regards to adjustments for matters of emphasis in
the Auditors‟ report as stated in paragraph 3 above, we confirm / further report that the Restated
Summary Statements examined by us and as set out in Annexure I, Annexure II and Annexure III
to this report are prepared after making adjustments and regrouping as in our opinion were
appropriate and as are more fully described in significant accounting policies and notes to the
Restated Summary Statements enclosed as Annexure IV to this report.
F-149
5. Based on the above, read with the matters stated in paragraphs 2 above and with regards to
adjustments for matters of emphasis in the Auditors‟ report as stated in paragraph 3 above, we are
of the opinion that the restated financial information have been made after incorporating:
i. Adjustments for the changes in accounting policies adopted by the Company retrospectively
in respective financial years/ periods to reflect the same accounting treatment as per changed
accounting policy for all the reporting periods;
ii. Adjustments for material amounts in the respective financial years / periods to which they
relate;
iii. Adjustments for qualifications, as applicable in the Auditors‟ reports in the respective years/
periods to which they relate; and
iv. There are no extraordinary items that need to be disclosed separately in the Restated
Summary Statements.
6. We have also examined the following other restated financial information set out in the
Annexures prepared by the management and approved by the Board of Directors, relating to the
Restated Summary Statements and annexed to this report:
a) Statement of share capital, enclosed as Annexure V
b) Summary statement of reserves and surplus, enclosed as Annexure VI
c) Statement of non-current investment, deferred tax assets (net), long-term loans and
advances and other non-current assets, enclosed as Annexure VII
d) Statement of current assets, enclosed as Annexure VIII
e) Statement of non-current liabilities, enclosed as Annexure IX
f) Statement of current liabilities, enclosed as Annexure X
g) Statement of revenue, enclosed as Annexure XI
h) Statement of other income, enclosed as Annexure XII
i) Statement of contingent liabilities and commitments, enclosed as Annexure XIII
j) Statement of accounting ratios, enclosed as Annexure XIV
k) Statement of principal terms and conditions of long-term borrowings and short-term
borrowings, enclosed as Annexure XV
l) Statement of capitalization as at March 31, 2013, enclosed as Annexure XVI
m) Statement of dividend paid/ proposed, enclosed as Annexure XVII
n) Statement of related party disclosures, enclosed as Annexure XVIII
o) Statement of tax shelter, enclosed as Annexure XIX
7. In our opinion, the Restated Summary Statements contained in Annexure I, Annexure II and
Annexure III to this report, read with the significant accounting policies and notes disclosed in
Annexure IV, and other restated financial information contained in Annexure V to Annexure XIX
to this report, and read with paragraphs 2 and 3 above and note 2 and 3 disclosed in Annexure VII
and Annexure VIII respectively, have been prepared in accordance with Paragraph B, Part II of
Schedule II of the Act and the SEBI Regulations.
8. The report should not in any way be construed as a reissuance or redating of any of the previous
audit reports issued by us or by the other firm of Chartered Accountants, nor should this report be
construed as a new opinion on any financial statements referred to herein.
F-150
9. We have no responsibility to update our report for events and circumstances occurring after the
date of this report.
10. This report is intended solely for use of the management and for inclusion in the Offer Document
in connection with the proposed issue of equity shares of the Company on a rights basis, and is
not to be used, referred to or distributed for any other purpose without our prior written consent.
For B S R & Co.
Chartered Accountants
Firm‟s Registration No: 101248W
For Chaturvedi & Shah
Chartered Accountants
Firm‟s Registration No: 101720W
Bhavesh Dhupelia
Partner
Membership No: 042070
Mumbai
Parag D. Mehta
Partner
Membership No: 113904
Mumbai
F-151
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Assets
A Non-current
assets
I Fixed assets
(i) Tangible
assets 70,032.73 75,331.83 85,631.03 84,424.23 66,359.33 34,799.90
(ii) Intangible
assets 645.30 722.20 418.10 184.60 219.00 18,206.10
(iii) Capital
work-in-progress 8,865.10 11,966.60 13,812.70 16,132.50 16,863.20 21,331.01
(iv) Intangible
assets under
development - - - - - -
II Non-current
investments 18,040.94 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45
III Deferred tax
assets (net) - - - - - -
IV Long-term loans
and advances 21,737.30 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13
V Other non-
current assets 583.90 62.00 290.30 277.42 59.41 43.75
119,905.27 128,722.57 134,746.13 132,017.01 109,704.98 114,257.34
B Current assets
I Current
investments - - - 7,902.40 - 13,500.30
II Inventories 762.80 658.50 724.50 596.80 518.30 191.80
III Trade receivables 16,116.40 16,179.40 18,741.90 22,119.10 20,202.40 11,640.10
IV Cash and bank
balances 5,351.90 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29
V Short-term loans
and advances 63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
VI Other current
assets 424.20 717.60 4,265.20 2,765.47 4,281.48 3,911.16
86,398.80 79,766.60 94,307.00 108,369.43 79,887.31 67,886.33
Liabilities
C Non-current
liabilities
I Long-term
borrowings 35,137.50 71,412.50 39,870.80 36,416.70 54,230.00 53,099.90
II Deferred tax
liabilities (net) - - - - - -
F-152
Annexure I
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Company, as restated
(` in lakhs)
Particulars
As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
III Other long-term
liabilities 3,963.50 3,636.70 2,934.69 1,822.66 839.10 342.98
IV Long-term
provisions 494.00 501.10 695.90 344.50 3,427.40 3,038.34
39,595.00 75,550.30 43,501.39 38,583.86 58,496.50 56,481.22
D Current
liabilities
I Short-term
borrowings 144,714.00 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60
II Trade payables 11,458.93 12,646.50 10,489.20 7,308.80 5,162.10 8,245.66
III Other current
liabilities 57,466.20 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46
IV Short-term
provisions 84.60 94.00 125.40 31.80 29.30 1,800.65
213,723.73 153,390.40 168,745.58 160,332.22 79,986.13 59,021.37
E Net Worth
(A+B-C-D) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
F Represented by
i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
ii) Reserves and
surplus (net) (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
G Net Worth (i+
ii) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08
Note :
The above statement should be read with significant accounting policies and notes to summary statement of
assets and liabilities of the Company, as restated (Annexure IV)
F-153
Annexure II
Reliance MediaWorks Limited
Summary statement of profit and loss of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Revenue from operations 23,641.20 76,129.30 48,669.20
45,551.99 48,234.34 26,894.71
Other income 384.90 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30
Total revenue
24,026.10
80,454.80 54,287.40
48,625.19 54,882.24 32,280.01
Direct operational
expenses 9,547.77 30,064.14 20,449.70
15,631.90 15,752.90 7,585.30
Employee benefits
expense 3,644.00 13,856.10 9,882.50 5,969.20 5,645.80 2,272.80
Finance costs (including
loss on derivative
contracts) (net) 13,694.80 39,061.20 16,973.30
11,306.60 12,363.70 2,751.34
Depreciation and
amortisation expense 4,078.60
10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Other expenses 14,971.50 49,813.10 24,594.80
18,427.09 13,743.54 7,150.27
Total expenses 45,936.67 143,583.94 78,635.40 57,422.19 59,802.55 29,730.75
(Loss) / profit before tax
and exceptional items (21,910.57) (63,129.14) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Exceptional items (Refer
note 4 of I of D of
Annexure IV and 7 of II
of D of Annexure IV) (5,682.58) (7,227.20) - - - -
(Loss) / profit before tax (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Less - Provision for taxes
- Deferred tax charge /
(credit) - - - - (134.80) 621.40
- Fringe benefit tax - - - - 151.50 71.49
Net (loss) / profit after
tax (Balance carried to
Annexure VI) (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
The above statement should be read with significant accounting policies and notes to summary statement of
profit and loss of the Company, as restated (Annexure IV)
F-154
Annexure II
Reliance MediaWorks Limited
Period March 2013 – Six months ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F-155
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
A Cash Flow from
operating
activities
Net (loss) / profit
before tax, as
restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Adjustment for
Depreciation and
amortisation
expense 5,963.20 10,789.40 6,735.10 6,087.40 12,296.61 9,971.04
Bad debts /
advances written-
off 27.32 103.60 107.30 50.50 263.00 385.10
Provision for
doubtful debts and
advances 590.00 8,977.20 1,658.20 121.90 - -
Provision for
diminution in value
of non-current
investments - 825.10 - - - -
Sundry balances
written-off 16.50 981.50 - - - -
Capital work-in-
progress written-off 2,902.70 4,424.60
Dividend income - (200.40) - (85.30) (205.40) (148.80)
Interest income (145.40) (1,080.10) (773.20) (406.40) (716.70) (831.50)
Profit on derivative
contract - - - - - (977.40)
Loss / (profit) on
sale / discarding of
fixed assets (net) 7.90 674.20 (2,701.10) 40.80 4.40 56.50
Gain on sale of
non-current
investments - (766.50) - - - -
Gain on sale of
current investments (57.50) (39.50) (423.60) (274.40) (269.20) (9.10)
Gain on sale of
non-current
investments - - - - (1,700.00) (2,660.30)
Provisions written
back - - - (241.70) - -
Unrealised foreign
exchange (gain) /
loss (13.00) (2,588.50) (305.30) 2,000.20 (807.20) (18.10)
F-156
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Finance costs
(including loss on
derivative
contracts) (net)
39,061.20 16,973.30
11,306.60
12,363.70
2,751.34
13,694.80
Operating (loss) /
profit before
working
capital changes
and before net
results of Radio
business
(9,194.54) (3,077.30) 9,802.60 16,308.90 11,068.04
(4,606.63)
Adjustment for
cash loss pertaining
to transaction
relating to Radio
business up to
March 31, 2008
pursuant to
Modified
Composite Scheme
of Amalgamation
and Arrangement - - - - - (8,377.00)
Operating (loss) /
profit before
working capital
changes (4,606.73) (9,194.54) (3,077.30) 9,802.60 16,308.90 2,691.04
Adjustment for :
Decrease /
(Increase) / in trade
receivables (413.22) 515.90 2,749.20 (2,008.60) (17,317.60) (7,582.14)
Decrease /
(increase) in loans
and advances and
other assets 4,817.10 3,918.50 (5,484.91) (1,978.10) (6,541.45) (5,773.14)
Decrease /
(increase) in
inventories (104.30) 66.00 (127.70) (78.50) (325.40) (30.30)
Increase /
(decrease) in trade
and other payables 51.65 2,393.56 4,988.71 4,863.50 (4,444.30) 9,061.70
Cash generated
from / (used in)
from operating
activities (255.40) (2,300.58) (952.00) 10,600.90 (12,319.85) (1,632.84)
Taxes paid (net of
refunds) (214.90) 1,790.10 1,693.00 (1,122.00) (1,544.50) (1,346.80)
F-157
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Net cash
generated from /
(used in)
operating
activities (A) (470.30) (510.48) 741.00 9,478.90 (13,864.35) (2,979.64)
B
Cash flow from
investing activities
Purchase of fixed
assets (767.50)
(5,183.50)
(15,372.10)
(24,733.56)
(21,363.60)
(46,194.40)
Proceeds from sale
of fixed assets 46.40 762.40 13,986.70 10.80 1,087.60 12.10
Proceeds on sale of
non-current
investments 60.00 1,233.62 1.00 4,066.80 3,127.30 -
Loan to
subsidiaries and
joint ventures (net) (7,776.30) (1,721.70) (13,597.70) (21,195.70) - -
Purchase of non-
current investment
- in shares of
subsidiaries
companies / joint
venture/ associates
(Refer Note 2) - (12,127.00) (2,000.00) (3,005.00) (201.80) (2,720.80)
Advance for
application money
towards
subscription of
shares in a joint
venture - - - (125.00) - -
Repayment of
capital by
Partnership firm - - - 241.70 - -
Purchase of non-
current investments
– other - - - (9.90) (4.50) (0.40)
Profit from /
investment in
mutual funds (net) 57.50 39.50 423.60 274.40 269.20 9.10
Redemption of /
(investment in)
mutual funds - - 7,902.40 (7,902.40) 13,500.30
(13,480.50)
Dividend income - 200.40 - 85.30 205.40 148.80
Interest income 164.40 1,232.00 685.90 425.60 1,395.40 238.40
F-158
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Cash generated
(used in) / from
investing activities (8,215.50) (15,564.28) (7,970.20) (51,866.96) (1,984.70) (61,987.69)
Taxed paid (net of
refunds) (0.06) (47.30) (17.00) (26.70) (78.10) (194.40)
Net Cash
generated (used
in) / from
investing activities
(B) (8,216.10) (15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)
C Cash flow from
financing
activities
Proceeds from
long-term
borrowings - 66,900.00 37,500.00 3,500.00 - 40,000.00
Proceeds from
short-term
borrowings (net)
(Refer note 3
below) 38,289.40 4,053.20 2,598.10 54,539.70 31,250.80 28,845.30
Proceeds from
issue of Preference
Shares (Refer note
3 below) - 29,500.00 - - - -
Repayment of
Foreign currency
convertible bonds - (15,814.50) - - -
Repayment of
long-term
borrowings (17,108.30) (61,020.80) (17,083.30) - - -
Profit on derivative
contract - - - - - 977.40
Interest recoverable
from Reliance
Broadcast Network
Limited - - (1,448.60) (2,507.89) (2,584.90) -
Recovered from
Reliance Broadcast
Network Limited
pursuant to Scheme
of Arrangement 63.80 9,961.40 20,000.00 - - -
Dividend
(including dividend
distribution tax)
paid - - - - (1,349.20) (1,164.10)
F-159
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Finance costs
(including loss on
derivative
contracts) (net) (10,175.60) (34,561.34) (16,757.90) (13,034.60) (11,201.60) (4,795.30)
Net cash flow
generated from /
(used in) financing
activities ( C ) 11,069.30 14,832.46 8,993.80 42,497.21 16,115.10 63,863.30
Net increase in
cash and cash
equivalent
(A+B+C) 2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Cash and cash
equivalents as at
beginning of the
period 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10 1,987.53
Cash and cash
equivalents
adjusted pursuant
to Composite
Scheme of
Amalgamation and
Arrangement - - - - 37.70 1,300.00
Cash and cash
equivalents
adjusted pursuant
to Modified
Composite Scheme
of Amalgamation
and Arrangement - - - - (843.70) -
Cash and cash
equivalents as at
end of the period
(refer note (I) and
(II) of D of
Annexure VIII) 4,294.40 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10
2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)
Note :
2. The above cash flow statement has been prepared under the "Indirect Method" as set out in
Accounting Standard 3 - Cash Flow Statement
3. During Period 2012, the Company has apportioned loan given to a subsidiary into preference
shares amounting to ` 12,000 lakhs
4. During Period 2012, the Company has apportioned the loans received on a short term basis into
preference shares amounting to ` 29,500 lakhs
The above statement should be read with significant accounting policies and notes to summary statement of
cash flow of the Company, as restated (Annexure IV)
F-160
Annexure III
Reliance MediaWorks Limited
Summary statement of cash flow of the Company, as restated
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Period March 2013 – Six month ended March 31, 2013
Period 2012 - Eighteen months ended September 30, 2012
Period 2011 - Year ended March 31, 2011
Period 2010 - Year ended March 31, 2010
Period 2009 - Year ended March 31, 2009
Period 2008 - Nine months ended March 31, 2008
F-161
Annexure IV
Reliance MediaWorks Limited
Significant accounting policies and notes to the restated summary statements
The figures for Period March 2013 represent the six month period ended March 31, 2013, Period 2012 represents the
eighteen month period ended September 30, 2012, Period 2011 represents the year ended March 31, 2011, Period
2010 represents the year ended March 31, 2010, Period 2009 represents the year ended March 31, 2009 and Period
2008 represents the nine month period ended March 31, 2008. Summary statements are not strictly comparable on
account of accounting pursuant to Court approved Schemes in Period 2008 and Period 2009. Also, the summary
statements are not comparable on account of varying accounting periods forming part of them.
The restated summary statements have been prepared to comply in all material respects with the requirements of
Schedule II to the Companies Act, 1956 (“the Act”) read with the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on August 26,
2009, as amended, to the extent applicable.
A. Summary of significant accounting policies
1. Basis of preparation
These summary statements are prepared and presented under the historical cost convention on the accrual
basis of accounting except for revaluation of certain fixed assets and in accordance with the Accounting
Standards („AS‟) notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions
of the Companies Act, 1956 („the Act‟), to the extent applicable. The summary statements are presented in
Indian Rupees in lakhs except per share data and where mentioned otherwise.
Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011 (as
amended by notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no.
62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised Schedule VI
notified under the Act has become applicable to the Company for the purpose of preparation and
presentation of its summary statements. The adoption of revised Schedule VI does not impact the
recognition and measurement principles followed for preparation of summary statements. All assets and
liabilities have been classified as current or non-current as per the Company‟s normal operating cycle and
other criteria set out in the revised Schedule VI.
The restated summary statements of Company have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by
SEBI on August 26, 2009, as amended, to the extent applicable.
2. Use of estimates
The preparation of summary statements of the Company in conformity with generally accepted accounting
principles („GAAP‟) in India requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of contingent liabilities on the date of the
summary statements and the reported amount of income and expenses during the reported period. The
estimates and assumptions used in the accompanying financial statements are based upon management‟s
evaluation of relevant facts and circumstances as at the date of the financial statements, which in its opinion
are prudent and reasonable. Actual results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
F-162
3. Fixed assets and depreciation / amortisation
a. Tangible assets
Tangible fixed assets are stated at cost and / or revalued amount in accordance with scheme of
amalgamation less accumulated depreciation and any provision for impairment. Cost includes freight,
duties, taxes (other than those recoverable from tax authorities) and other expenses related directly /
indirectly to the acquisition / construction and installation of the fixed assets for bringing the asset to its
working condition for its intended use.
Depreciation on fixed assets is provided on the straight line method, at the rates prescribed in Schedule XIV
to the Act, which, in management‟s opinion, reflects the estimated useful lives of those fixed assets, except
in case of following assets of theatrical exhibition segment wherein depreciation is provided at following
rates:
Leasehold improvements / buildings are depreciated over the lower of the useful life of the asset and the
lease term, on a straight line basis.
Individual assets costing up to ` 0.05 lakhs are depreciated fully in the year of acquisition.
b. Intangible assets
Intangible assets, all of which have been acquired / created and are controlled through custody or legal
rights, are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are
regarded as having a limited useful economic life and the cost is amortised over the lower of useful life and
ten years.
Application software purchased, which is not an integral part of the related hardware, is shown as
intangible assets and amortised on a straight line basis over its useful life, not exceeding five / ten years, as
determined by management.
Film rights comprise negative rights and distribution rights in films and are for a contractually specified
mode of exploitation, period and territory and are stated at cost less accumulated amortisation. Cost of film
rights comprises original purchase price / minimum guarantee. Cost is ascertained on specific identification
basis where possible. In case multiple films / rights are acquired for a consolidated amount, cost is
allocated to each film / right based on management‟s best estimates.
The individual film forecast method is used to amortise the cost of film rights acquired. Under this method,
costs are amortised in the proportion that gross revenues realised 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 unamortised cost over the film right‟s realisable value.
Particulars of fixed assets
Rate of depreciation
Plant and machinery 10%
Office equipment 10%
Furniture and fixture 10%
Computers 20%
Vehicles 10%
F-163
In respect of unreleased films, payments towards film rights are classified under capital advances as the
amounts are refundable in the event of non‑release of the film.
Purchased goodwill is recognised by the Company on the basis of excess of purchase consideration paid
over the value of the assets acquired at the time of acquisition and is amortised over its estimated useful
life not exceeding ten years.
4. Impairment
In accordance with AS 28 – „Impairment of Assets‟, where there is an indication of impairment of the
Company‟s asset, 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 a cash
generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and
loss.
If at the balance sheet date there is an indicator that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a
maximum of the depreciated historical cost.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of
the asset and from its disposal at the end of its useful life.
5. Investments
Long-term investments are carried at cost. A provision for diminution is made to recognise a decline, other
than temporary, in the value of long-term investments and is determined separately for each individual
investment.
Current investments are carried at lower of cost and fair value.
6. Inventories
Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon lamps and stores
and spares related to theatrical exhibition / film production services business etc.) are stated at the lower of
cost and net realisable value. Cost is determined on the first-in first out (FIFO) basis.
7. Employee benefits
Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short
term employee benefits. The undiscounted amount of short term employee benefits expected to be paid in
exchange for the services rendered by employees are recognised as an expense during the period.
Long term employee benefits:
Provident fund and other schemes
F-164
The Company‟s state governed provident fund scheme, employee state insurance scheme and labour
welfare fund are defined contribution plans. The contribution paid / payable under the schemes is
recognised during the period in which the employee renders the related service.
Gratuity Plan
The Company‟s gratuity benefit scheme is a defined benefit plan. The Company‟s net obligation in respect
of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior period; that benefit is discounted to determine its
present value and the fair value of any plan assets is deducted.
The present value of the obligation under such defined benefit plan is determined based on actuarial
valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows. 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.
Actuarial gains and losses are recognised immediately in the statement of profit and loss.
Other Long term employment benefits:
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 recognised as a liability at the present value of the
defined benefit obligation at the balance sheet date, determined based on actuarial valuation using Projected
Unit Credit Method. 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.
8. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured. The amount recognised as revenue is exclusive of value added
tax, service tax and net of trade discounts.
Amount of entertainment tax is shown as a reduction from revenue.
Film production services
Revenue from processing / printing of cinematographic films is recognised upon completion of the related
processing / printing.
Revenue from processing of digital content is recognised using the proportionate completion method. Use
of the proportionate completion method requires the Company to estimate the efforts expended to date as a
proportion of the total efforts to be expended. Efforts expended have been used to measure progress
towards completion, as there is a direct relationship between efforts expended and contracted output.
Sale of traded goods is recognised when the risks and rewards of ownership are passed on to the customer,
which generally coincides with the dispatch of goods.
F-165
Income from equipment / facility rental is recognised over the period of the relevant agreement /
arrangement.
Theatrical exhibition and related income
Sale of tickets
Revenue from theatrical exhibition is recognised on the date of the exhibition of the films and comprises
proceeds from sale of tickets, gross of entertainment taxes. As the Company is the primary obligor with
respect to exhibition activities, the share of distributors in these proceeds is separately disclosed as
distributors‟ share.
Amount of entertainment tax is shown as a reduction from revenue.
Sale of food and beverages
Revenue from sale of food and beverages is recognised upon sale and delivery at the counter.
Advertisement / sponsorship revenue
Revenue from advertisements, sponsorship and events is recognised on the date of the exhibition of the
advertisement / event, over the period of the contract or on completion of the Company‟s obligations, as
applicable.
Film production, distribution and related income
Film production and related income
Revenue from sale of content / motion pictures is accounted for on the date of agreement to assign / sell the
rights in the concerned motion picture / content or on the date of release of the content / motion picture,
whichever is later.
Income from film distribution activity
In case of distribution rights of motion pictures / content, revenue is recognised on the date of release /
exhibition.
Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is
recognised on the date when the rights are made available to the assignee for exploitation.
Revenue from sale of VCDs / DVDs, etc is recognised when the risks and rewards of ownership are passed
on to the customer, which generally coincides with the dispatch of the products.
Interest income / income from film financing
Interest income, including from film / content related production financing, is recognised on a time
proportion basis at the rate implicit in the transaction.
Dividend income
Dividend income is recognised when the right to receive dividend is unconditional at the balance sheet date.
F-166
Marketing rights / Rights to profit
Amounts received in lieu of future marketing rights sale, right to future profit from business of the
Company and other rights are recognised as income in the period of entering into the contract.
9. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of
the transactions. Exchange differences arising on foreign exchange transactions settled during the period are
recognised in the statement of profit and loss of the period.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated
at the closing exchange rates on that date; the resultant exchange differences are recognised in the statement
of profit and loss except in case of exchange differences arising on translation of monetary items which
form part of Company‟s net investment in a non-integral foreign operation which is accumulated in a
„Foreign currency translation reserve‟ until its disposal.
Non-monetary items which are carried at historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction.
Forward contracts are entered into to hedge the foreign currency risk of the underlying transaction. The
premium or discount on all such contracts arising at the inception of each contract is amortised as income or
expense over the life of the contract. Exchange differences on forward contracts are recognised as income
or expense in the statement of profit and loss of the period. Any profit or loss arising on the cancellation
and renewal of forward contract are recognised as income or expense for the period.
10. Earnings per share
In determining earning per share, the Company considers the net result after tax and includes the post tax
effect of any extraordinary / exceptional item. The number of shares used in computing basic earnings per
share is the weighted average number of shares outstanding during the period. The number of shares used in
computing diluted earnings per share comprises the weighted average number of shares considered for
deriving basic earnings per share and also the weighted average number of shares that could have been
issued on the conversion of all dilutive potential equity shares unless the results would be anti - dilutive.
Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a
later date.
11. Taxation
Income-tax expense comprises current tax expense and fringe benefit tax computed in accordance with the
relevant provisions of the Income tax Act, 1961 and deferred tax charge or credit.
Current tax provision is made based on the tax liability computed after considering tax allowances and
exemptions, in accordance with the Income tax Act, 1961. Deferred tax charge or credit and the
corresponding deferred tax liability or asset is recognised for timing differences between the profits / losses
offered for income tax and profits / losses as per the summary statements. Deferred tax assets and liabilities
are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance
sheet date.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be
realised in future. However, where there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each Balance sheet date and written down / up to reflect the amount
that is reasonably / virtually certain (as the case may be) to be realised.
F-167
Provision for fringe benefit tax was made on the basis of applicable rates on the taxable value of eligible
expenses of the Company as prescribed under the Income Tax Act, 1961 till Period 2009 on the basis of
applicability.
12. Share issue / Foreign Currency Convertible Bonds (FCCB) issue expenses and premium on
redemption.
Share / FCCB issue expenses incurred and premium payable on FCCB are adjusted in the period of issue
against the Securities premium reserve.
13. Provisions and contingencies
Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Company
recognises that it has a present obligation as a result of past events, it is more likely than not that an outflow
of resources will be required to settle the obligation and the amount can be reasonably estimated.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation
that may, but probably will not require an outflow of resources. 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.
Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is
probable that a liability has been incurred and the amount can be reasonably estimated.
14. Leases
Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases are recorded
on a straight line basis over the lease term.
15. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are
capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial
period of time to get ready for its intended use. All other borrowing costs are charged to revenue.
16. Commercial papers
Commercial papers are recognised as a liability at the amount of cash received at the time of issuance i.e.
discounted value. The discount is amortised as interest cost over the period of the commercial paper at the
rate implicit in the transaction.
F-168
B. Significant changes in accounting policies and other adjustments credited / (debited) to the restated summary statements:
(` in lakhs)
Particulars Refer
Note
Below
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Adjustment to balance
at the beginning in the
statement of profit and
loss as at July 1, 2007
(Loss) / profit after tax as per audited
financial statements (27,593.15) (70,356.34) (25,621.00) (10,437.00) (2,972.60) 4,590.50
Balances as per audited financial
statements
8,794.79
Adjusted for
Change in depreciation method (a) - - - - (834.31) 370.57 463.74
Change in estimated useful life (b) - - - - -
- (218.77)
Restatement of FCCB‟s (c) - - 1,272.40 1,718.10 (1,130.10) (1,860.40) -
Excess / (short) provision for tax (d) - - 0.60 (78.10) -
(1.70) 79.20
Excess / (short) Minimum alternative tax (d) - - - - -
(1,242.60) 1,242.60
Net impact of all adjustments
- - 1,273.00 1,640.00 (1,964.41) (2,734.13) 1,566.77
Loss / (profit) after tax as restated
(27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
Balance of statement of profit and loss as
on July 1, 2007, as restated 10,361.56
F-169
a) Change in accounting policy for depreciation
During Period 2009, the Company has charged depreciation as per the written down value method in
the film production services, production and distribution business and for unallocated assets at the rates
specified in Schedule XIV of the Companies Act, 1956 till March 31, 2008. Starting April 1, 2008, the
Company has changed its policy to charge depreciation as per the straight line method at the rates
specified in Schedule XIV of the Companies Act, 1956. Accordingly, depreciation charge for the
previous period‟s has been restated based on the new method and the impact of change in depreciation
method for the period prior to July 1, 2007 has been adjusted to opening balance of the surplus in
statement of profit and loss, as restated as on July 1, 2007.
b) Change in estimated useful life of assets
The Company had revised the estimated useful lives of certain fixed assets pertaining to the theatrical
exhibition business from July 1, 2007, since in the opinion of the management, the revised useful life
reflect the estimated period of economic benefit to be derived from the use of such assets. For the
purpose of these summary statements, depreciation has been recomputed based on revised useful life of
the assets from the date of capitalisation of these assets. Accordingly depreciation for the periods prior
to July 1, 2007 has been restated and depreciation for these periods has been adjusted to opening
balance of the surplus in statement of profit and loss, as restated as on July 1, 2007.
c) Accounting for Foreign Currency Convertible Bonds („FCCB‟)
During Period 2008, the liability for FCCB‟s had been reclassified as a non-monetary liability inter-alia
on the basis of the trend of earnings, movement of the Company‟s share prices and conversion option
exercised by the FCCB holders (bondholders holding 75.42% of the FCCB had exercised conversion
option as of March 31, 2008). However, during Period 2011, the balance FCCB‟s were redeemed at a
premium, as per the terms of the issue document.
The Company had reversed foreign exchange fluctuation loss aggregating to ` 438.06 lakhs in Period
2008 based on the consideration of FCCB‟s as a non-monetary liability. This position was carried
forward till Period 2010 and was a matter of emphasis referred to in the auditor‟s report for Period
2008, 2009 and 2010.
Hence, the Company has reversed the reversal made during Period 2008 and recognised the loss / gain
on the non-converted portion of FCCB‟s, considering them as a monetary item in Period 2008, 2009
and 2010 and reversed this loss in Period 2011, wherein the Company had recognised the entire loss on
redemption in its audited financial statements.
d) Tax impact on restatement
The statement of profit and loss of some period‟s include amounts paid / provided for or refunded /
written back, in respect of shortfall / excess income tax (including fringe benefit tax, wealth tax and
MAT credit entitlement) arising out of assessments, appeals etc. which has now been adjusted in the
respective Period‟s tax liability. Also, income tax (current tax and deferred tax) has been computed on
adjustments made and has been adjusted accordingly in the statement of profit and loss, as restated for
the respective periods.
e) Consequent to the notification of the Companies (Accounting Standards) Rules, 2006, with effect from
July 1, 2007, the Company adopted Accounting Standard (AS 15) - Employee Benefits. However,
there was no significant impact on adoption of the Standard which is required to be adjusted to the
opening balance of reserves and surplus.
f) Adjustments have been made in the Restated Summary Statements, wherever required, by a
reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring
them in line with the groupings as per the audited financials of the Company for Period March 2013 as
prepared under Government Notification no. S.O. 447 (E) dated February 28, 2011 (as amended by
notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no. 62/2011
dated September 5, 2011, issued by the Ministry of Company Affairs.
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g) The Company in Period 2009 has classified its operations in US and in Period 2010 its operations in
Nepal as non-integral to the operations of the Parent Company in India. The impact of this change is
not material on the results of respective periods and hence, no restatement has been made for the same.
h) De-merger of Radio business
During the year ended March 31, 2006, the Company commenced operation of the Radio business. The
Company was granted 45 FM Radio operation licenses in various parts of India including all metros.
During the fifteen month period ended June 20, 2007, the Board of Directors of the Company,
members of the Company and the Hon‟ble High Court of Judicature at Bombay approved the
Composite Scheme of Amalgamation and Arrangement („Composite Scheme‟) which among other
things provided for demerger of the Radio business of the Company to Reliance Broadcast Network
Limited with effect from April 1, 2006. The Company had given the in-principle effect of the
Composite Scheme including the demerger of the Radio business of the Company to Reliance
Broadcast Network Limited in the accounts for the fifteen month period ended June 30, 2007, pending
filing of the Composite Scheme with the Registrar of Companies. Subsequently, due to non-receipt of
approval from the Ministry of Information and Broadcasting, the Company filed the Modified
Composite Scheme of Amalgamation and Arrangement (the „Modified Composite Scheme‟) which
provided for reversal of the effect of demerger, of the Radio business that was given effect to in the
accounts for the fifteen month period ended June 30, 2007 and provided for adjusting the net result of
the transactions related to Radio business for the period March 31, 2006 till the effective date of the
Modified Composite Scheme i.e. March 31, 2008 in the General reserve of the Company.
During Period 2009, the Board of Directors of the Company, members of the Company and the
Hon‟ble High Court of Judicature at Bombay approved a Scheme of Arrangement („the Radio Scheme')
which provided for demerger of the Radio business of the Company effective April 1, 2008 to Reliance
Broadcast Network Limited.
Accordingly, transactions related to Radio business do not form part of the statement of profit and loss
for the Period 2008. However, the assets and liability were included in the summary statement of assets
and liability in Period 2008. The assets and liabilities of the Radio business for Period 2008 which are
included in the statement of assets and liability of the Company are:
Particulars Period 2008
(` in lakhs)
Fixed assets Gross block 32,728.23
Less: Accumulated depreciation 3,845.38
Net block 28,882.85
Capital work in progress 2,309.17
Current assets Inventories 17.67
Sundry debtors 6,679.51
Cash and bank balances 843.71
Loans and advances 6,387.06
13,927.95
Current liabilities and provisions Current liabilities 4,348.71
Provisions 626.94
4,975.65
Net working capital 8,952.30
Less: Loans 2,046.28
Net capital employed 38,098.04
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(Refer note 1 of VI of D of Annexure IV for details of the Modified Composite Scheme of Amalgamation and
Arrangement given effect to in the accounts of the Company for Period 2008 and note 1 of V of D of Annexure
IV for details of the Scheme of Arrangement given effect to in the accounts of the Company for Period 2009)
C. Extract of other matters / matter of emphasis referred by auditors in their reports as reproduced
below:
a) Period March 2013
i) We draw attention to note 41 to the condensed financial statements; the Company‟s net worth is fully
eroded and has a negative net worth of ` 46,796.00 lakhs, the Company has incurred a loss of `
27,593.15 lakhs for the six months period October 1, 2012 to March, 31, 2013, indicating the existence
of uncertainty that may cast doubt about the Company‟s ability to continue as a going concern.
Considering the matters set out in the said note, this financial statement is prepared on a going concern
basis.
Our opinion is not qualified in respect of these matters.
(Refer note 5 of I of D of Annexure IV for note 41 which has been referred to above)
b) Period 2012
i) Without qualifying our report, we draw attention to note 45 to the financial statements; the Company‟s
net worth is fully eroded and has a negative net worth of ` 20,232.70 lakhs, the Company has incurred a
loss of ` 70,356.34 lakhs for the eighteen month period April 1, 2011 to September 30, 2012, indicating
the existence of uncertainty that may cast doubt about the Company‟s ability to continue as a going
concern. Considering the matters set out in the said note, this financial statement is prepared on a
going concern basis.
(Refer note 4 of II of D of Annexure IV for note 45 which has been referred to above)
ii) Under clause (x) of CARO –
The accumulated losses of the Company are more than 50% of its net worth and it has incurred cash
losses in the current financial period and in the immediately preceding financial year.
iii) Under clause (xi) of CARO –
In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of its dues to bankers or financial institutions or bondholders, however there
have been instances of delays in payment of principal amount which are subsequently paid.
Nature of default Principal amount (`
in lakhs)
Due date Date of payment
Principal loan
amount 12,500.00 March 28, 2012 May 14, 2012
13,333.33 March 31, 2012 May 11, 2012
1,250.00 December 16, 2011 December 30, 2011
1,000.00 May 3, 2012 May 6, 2012
iv) Under clause (xvii) of CARO –
According to the information and explanations given to us and on an overall examination of the
Balance sheet of the Company, we report that the Company has used funds raised on short term basis
for long term investments. The Company has used short term borrowings aggregating ` 54,320.00
lakhs to fund long term purposes.
v) Under clause (xxi) of CARO –
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According to the information and explanations given to us, no fraud by the Company has been noticed
or reported during the period. Further, Company has reported a possible misappropriation of provident
fund by the contractor engaged by the Company amounting to approximately ` 588.40 lakhs. The
Company has filed a criminal complaint against the Contractor and the matter is currently under
investigation
c) Period 2011
i) Under clause (x) of CARO –
The accumulated losses of the Company are more than 50% of its net worth and it has incurred cash
losses in the current financial year and in the immediately preceding financial year.
ii) Under clause (xvii) of CARO –
According to the information and explanations given to us and on an overall examination of the
Balance sheet of the Company, we report that the Company has used funds raised on short term basis
for long term investments. The Company has used short term borrowings aggregating ` 67,740.00
lakhs to long term purpose.
d) Period 2010
i) Without qualifying our report, we draw attention to note 17 of schedule 22 to the financial statements
regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the financial
period ended March 31, 2008, the Company re-classified the liability towards FCCB as non–monetary
liability inter-alia on the basis of the trend of earnings, movement of the Company‟s share prices and
conversion option exercised by the FCCB holders. The Company continues to classify the liability
towards FCCB as non–monetary liability as in its view the current fall in the market price of the
Company‟s share price and non-conversion by bond holders is a temporary aberration, consequently,
the foreign exchange fluctuation gain for the year aggregating ` 1,718.10 lakhs has not been recognised
and the said liability has not been restated at the year-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be restated
at the year-end exchange rate in accordance with Accounting Standard 11 - „The Effects of Changes in
Foreign Exchange Rates‟ prescribed in the Companies (Accounting Standards) Rules, 2006. There is
no specific guidance of The Institute of Chartered Accountants of India on accounting for foreign
currency bonds convertible into equity shares at the option of the holder. Had the said liability been
considered as a monetary liability as before, the loss before tax for the current year would be lower by `
1,718.10 lakhs and the reserves and surplus would be lower by ` 1,272.30 lakhs.
(Refer note 5 of IV of D of Annexure IV for note 17 of Schedule 22 which has been referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
ii) Under clause (xvii) of CARO –
According to the information and explanations given to us and on an overall examination of the
Balance sheet of the Company, we report that the Company has used funds raised on short term basis
for long term investments. The Company has used short term borrowings aggregating ` 26,560 lakhs to
fund fixed assets, investments and long term loans to subsidiaries.
e) Period 2009
i) Without qualifying our report, we draw attention to Note 19 of Schedule 22 to the financial statements
regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the previous
financial period ended March 31, 2008, the Company reclassified the liability towards FCCB as non–
monetary liability inter-alia on the basis of the trend of earnings, movement of the Company‟s share
prices and conversion option exercised by the FCCB holders. The Company continues to classify the
liability towards FCCB as non– monetary liability as in its view the current fall in the market price of
the Company‟s share price and non conversion by bond holders during the year is a temporary
F-173
aberration, consequently, the foreign exchange fluctuation (net loss) for the year aggregating ` 1,130.10
lakhs has not been recognised and the said liability has not been restated at the period-end exchange
rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be restated
at the period-end exchange rate in accordance with Accounting Standard 11 - „The Effects of Changes
in Foreign Exchange Rates‟ prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central government in consultation with the National Advisory Committee on Accounting
Standards. There is no specific guidance of The Institute of Chartered Accountants of India on
accounting for foreign currency bonds convertible into equity shares at the option of the holder. Had
the said liability been considered as a monetary liability, the loss before tax for the current year would
be higher by ` 1,130.07 lakhs and the reserves and surplus would be lower by ` 2,990.40 lakhs.
(Refer note 7 of V of D of Annexure IV for note 19 of Schedule 22 which has been referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
ii) Without qualifying our opinion, we draw attention to Note 2 of Schedule 22 to the financial statements.
As more fully explained in the said Note, during the year, the Hon‟ble High Court of Judicature at
Mumbai vide its order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company
with its wholly owned subsidiaries Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex
Limited, Rave Entertainment Private Limited and Mahimna Entertainment Private Limited, under
sections 391 to 394 of the Act. Pursuant to the said Scheme the Company has made an adjustment for
diminution in value of its assets (production and distribution rights, fixed assets, investments, debtors
and loans and advances) aggregating ` 15,669.70 lakhs by debiting the same to capital reserve instead
of the statement of profit and loss. Had the Company debited the statement of profit and loss the loss
before tax for the year would be higher by the said amount.
(Refer note 2 of V of D of Annexure IV for note 2 of Schedule 22 which has been referred to above)
iii) Under clause (ix) (a) of CARO –
According to the information and explanations given to us and on the basis of our examination of the
records of the Company, amounts deducted / accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees‟ State Insurance, Income tax, Sales-tax / VAT,
Customs duty, Entertainment tax, Investor Education and Protection Fund, Cess and other material
statutory dues have been generally regularly deposited during the year by the Company with the
appropriate authorities. In respect of service tax, management is in the process of reconciling the
amounts accrued as per the books of account on a monthly basis as compared to the payment records
maintained. Based on the payment records examined by us, the Company has been generally regular in
depositing the said amounts with the appropriate authorities. As informed to us, the Company did not
have any dues on account of Wealth tax. There were no dues on account of cess under Section 441A of
the Act since the date from which the aforesaid section comes into force has not yet been notified by
the Central Government. According to the information and explanations given to us and except for the
outcome of the reconciliation referred to above, no undisputed amounts payable in respect of Provident
fund, Employees‟ State Insurance, Income tax, Sales-tax / VAT, Service tax, Customs duty,
Entertainment tax, Investor Education and Protection Fund and other material statutory dues were in
arrears as at March 31, 2009 for a period of more than six months from the date they became payable
except for ` 391.30 lakhs being entertainment tax pertaining to multiplexes / single screens where the
Company has made an application for availing exemption under the relevant Act retrospectively from
the date of commencement of operations of the said multiplex. Also, as more fully explained in note 3
of Schedule 22 to the financial statements, no amount has been accrued in respect of Maharashtra
Value Added Tax.
(Note 3 of Schedule 22 refers to disclosure of contingent liabilities in Period 2009, refer Annexure XIII
for details of contingent liabilities)
f) Period 2008
F-174
i) Without qualifying our report, we draw attention to Note 1 of Schedule 22 to the financial statements.
As more fully explained in the said Note, during the period, the Hon'ble High Court of Judicature at
Bombay vide its order dated March 7, 2008 sanctioned the Modified Scheme of Amalgamation and
Arrangement ('the Modified Scheme') between the Company, Entertainment One India Limited ('E-
ONE') and Mukta Adlabs Digital Exhibition Private Limited ('MADEL')#. The Scheme was filed with
the Registrar of Companies ('ROC') on March 31, 2008. Pending completion of licensing and other
procedural formalities, the original composite Scheme of amalgamation and arrangement between the
Company, E-ONE, MADEL, Reliance Unicom Limited ('RUL') ## and their respective shareholders
and creditors sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated
September 15, 2006 was not filed with the Registrar of Companies ('ROC') as required under Section
391(3) of the Companies Act, 1956 ('the Act'). However, the said original Scheme was given effect to
by the Company's management in the previous period's financial statements for the fifteen months
ended June 30, 2007, so as to give effect to the substance of the Scheme as approved by the Hon'ble
High Court of Judicature at Bombay. The Modified Scheme inter-alia provides that the net results of
the transactions related to the radio business of the Company for the period from March 31, 2006 to the
Effective date (i.e. the date of filing the Modified Scheme with the ROC) be adjusted in the General
reserve of the Company (the original scheme provided for the demerger of the radio business of the
Company to RUL## effective March 31, 2006). As the original scheme was given effect to in the
previous period's financial statements for the fifteen months ended June 30, 2007, only the
modifications to the original scheme have been given effect to in the current period's financial
statements (including reversal of demerger of radio business to RUL##).
# - The name of the Company was subsequently changed to Adlabs Multiplex and Theatres Limited
## - The name of the Company was subsequently changed to Reliance Broadcast Network Limited
(Refer note 1 of VI of D of Annexure IV for note 1 of Schedule 22 which has been referred to above)
ii) Without qualifying our report, we draw attention to Note 21 of Schedule 22 to the financial statements
regarding accounting of the Foreign Currency Convertible Bonds ('FCCB'). During the current period,
the Company reclassified the liability towards FCCB as non-monetary liability inter-alia on the basis of
the trend of earnings and movement of the Company's share prices. Accordingly, the foreign exchange
fluctuation (net loss) aggregating to ` 438.10 lakhs accounted in previous period has been reversed and
the foreign exchange fluctuation loss for the current period aggregating to ` 3,621.80 lakhs has not been
recognised by management and the said liability has not been revalued at the period-end exchange rate.
An alternate view exists that the liability towards FCCB is a monetary liability and should be revalued
at the period-end exchange rate in accordance with Accounting Standard 11 - 'The Effects of Changes
in Foreign Exchange Rates' prescribed in the Companies (Accounting Standards) Rules, 2006 issued by
the Central government in consultation with the National Advisory Committee on Accounting
Standard. There is no specific guidance of The Institute of Chartered Accountants of India on
accounting for foreign currency bonds convertible into equity shares at the option of the holder. Had
the said liability been considered as a monetary liability as before, the profit after tax would be lower
by ` 4,118.90 lakhs.
(Refer note 7 of VI of D of Annexure IV for note 21 of Schedule 22 which has been referred to above)
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
iii) Under clause (ix) (a) of CARO –
According to the information and explanations given to us and on the basis of our examination of the
records of the Company, amounts deducted / accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees' State Insurance, Income tax, Customs duty,
Entertainment tax and other material statutory dues have been generally regularly deposited during the
period by the Company with the appropriate authorities. In respect of service tax and sales tax / VAT,
management is in the process of reconciling the amounts accrued as per the books of account on a
monthly basis as compared to the payment records maintained. Based on the payment records
F-175
examined by us, the Company has been generally regular in depositing the said amounts with the
appropriate authorities. As informed to us, the Company did not have any dues on account of Wealth
tax and Investor Education and Protection Fund. There were no dues on account of cess under Section
441A of the Act since the date from which the aforesaid section comes into force has not yet been
notified by the Central Government.
According to the information and explanations given to us and except for the outcome of the
reconciliation referred to above, no undisputed amounts payable in respect of Provident fund,
Employees' State Insurance, Income tax, Sales tax / VAT, Service tax, Customs duty, Entertainment tax
and other material statutory dues were in arrears as at March 31, 2008 for a period of more than six
months from the date they became payable except for ` 280.30 lakhs being entertainment tax pertaining
to a multiplex where the Company has made an application for availing exemption under the relevant
Act retrospectively from the date of commencement of operations of the said multiplex. Also, as more
fully explained in note 4 of Schedule 22 to the financial statements, no amount has been accrued in
respect of Maharashtra Value Added Tax.
(Note 4 of Schedule 22 refers to disclosure of contingent liabilities in Period 2008, refer Annexure XIII
for details of contingent liabilities)
D. Extract of significant notes from audited financial statements
I. For Period March 2013
1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatres, office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars Minimum lease
payments (` in
lakhs)
Amounts due within one year from the balance sheet date 12,663.70
Amounts due in the period between one year and five years 37,200.70
Amount due after five years 56,348.40
Total 106,212.80
Amount payable within lock-in-period is ` 46,106.40 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 7,981.30 lakhs
2. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency As at March 31, 2013
Amount – foreign
currency (lakhs) Amount – (` in lakhs)
Trade and other
receivables
USD
888.80 48,335.70
GBP 120.80 10,044.90
EURO 2.30 164.10
Trade and other
payables
USD
0.90 49.80
GBP 0.10 6.60
EURO 0.30 17.70
F-176
Particulars Currency As at March 31, 2013
Amount – foreign
currency (lakhs) Amount – (` in lakhs)
Borrowings USD 45.90 2,509.70
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
March 31, 2013
Swanston Multiplex Cinemas Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
Details of Joint Venture
Particulars Period March 2013
Balance Sheet
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 111.50
(b) Reserves and surplus (140.30)
LIABILITIES
Non-current liabilities
(a) Long term borrowings 211.70
(b) Long-term provisions 0.60
Current liabilities
(a) Trade payables 88.00
(b) Other current liabilities 69.40
Total 340.90
ASSETS
Non-current assets
(a) Fixed assets
Tangible assets 200.90
(b) Long-term loans and advances 71.90
Current assets
(a) Inventories 3.80
(b) Trade Receivables 17.30
(c) Cash and cash equivalents 31.00
(d) Short-term loans and advances 0.60
(e) Other current assets 15.40
Total 340.90
Statement of Profit and loss
Revenue
(a) Revenue from operations 96.60
(b) Other income 0.20
Total Revenue 96.80
F-177
Particulars Period March 2013
Expenses
Direct operation expenses 49.80
Employee benefits expense 4.20
Finance cost -
Depreciation / amortisation expense 10.70
Other expenses 82.50
Total Expenses 147.20
(Loss) before tax (50.40)
Tax Expenses
(1) Current tax -
(2) Deferred tax (credit)/ charge -
(Loss) for the period (50.40)
OTHER MATTERS
1. Contingent Liabilities 99.30
2. Capital Commitments -
Movement of the aggregate Shareholders‟ funds of the Joint ventures:
Shareholders‟ funds as at beginning of the period 21.60
Add: Share of (loss) / profits for the period (50.40)
Shareholders‟ funds as at the end of the period (28.80)
4. The Company has undertaken an initiative for rationalisation / improvement of overall Exhibition
business, under which the Company is re-negotiating rentals. As part of this initiative, rentals for
several properties have been reduced, however in some cases the Company has decided to exit the
property. In these cases, the amounts pertaining to these properties have been written off / provided to
the statement of profit and loss, thereby reducing subsequent cash losses suffered by the Company.
This has been disclosed an exceptional item in the financial statements of the Company.
5. Considering the continuing substantial losses incurred by the Company, its net worth has been eroded.
However, having regard to improved operational performance on account of stabilisation of new
businesses in films and media services, financial support from its promoters, further restructuring
exercise being implemented etc, the financial statements of the Company have been prepared on the
basis of going concern and no adjustments are required to the carrying value of assets and liabilities.
6. The Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in the Company‟s film and media
services division. The investment is proposed to be made into the subsidiary of the Company, into
which our film and media services division will be transferred. No definitive agreement has been
executed in respect of the proposed transaction. The exclusivity period as per non-binding term sheet
has been expired on October 15, 2012, however the Company and the fund have extended the
exclusivity period in the current quarter upto August 12, 2013.
7. The shareholders of the Company have approved on February 21, 2012 through postal ballot the
resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings pertaining to the
Film & Media Services and Exhibition business on a going concern basis to its wholly owned
subsidiaries at consideration not less than tax written down values as the board may decide and on such
terms and conditions and in such manner as may be decided by the board and the wholly owned
subsidiaries. Since necessary approval from lenders and other appropriate authorities are still awaited,
the Company has not executed relevant agreements with its subsidiaries. The appropriate accounting
treatment / disclosures will be given once the requisite approvals are obtained.
II. For Period 2012
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1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatres, office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars Minimum lease
payments (` in
lakhs)
Amounts due within one year from the balance sheet date 13,569.00
Amounts due in the period between one year and five years 44,636.40
Amount due after five years 65,270.60
Total 123,476.00
Amount payable within lock-in-period is ` 73,317.60 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 23,708.60 lakhs
(excluding amount capitalised ` 268.30 lakhs)
2. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency As at September 30, 2012
Amount – foreign
currency (lakhs) Amount – (` in lakhs)
Trade and other
receivables
USD
821.70 43,383.70
GBP 108.90 9,301.40
EURO 2.30 159.00
Trade and other
payables
USD
1.70 88.60
GBP 0.10 4.50
EURO 0.20 11.00
MYR 0.10 0.90
Borrowings USD 75.30 3,974.50
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
September 30,
2012 Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited (up to June 3, 2011) India Nil
Divya Shakti Marketing Private Limited India 50%
Details of Joint Venture
Particulars Period 2012
Balance Sheet
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 111.50
F-179
Particulars Period 2012
(b) Reserves and surplus (89.90)
LIABILITIES
Non-current liabilities
(a) Long term borrowing 211.70
(b) Other long-term liabilities 0.50
(c) Long-term provisions 0.30
Current liabilities
(a) Trade payable 79.80
(b) Other current liabilities 47.50
Total 361.40
ASSETS
Non-current assets
(a) Fixed assets
Tangible assets 206.50
(b) Long-term loans and advances 70.30
Current assets
(a) Inventories 3.70
(b) Trade Receivables 23.40
(c) Cash and cash equivalents 30.40
(d) Short-term loans and advances 11.90
(e) Other current assets 15.20
Total 361.40
Statement of Profit and loss
Revenue
(a) Revenue from operations 1,109.80
(b) Other income 8.70
Total Revenue 1,118.50
Expenses
Direct operation expenses 525.90
Employee benefits expense 57.20
Finance cost 1.10
Depreciation / amortisation expense 102.50
Other expenses 642.50
Total Expenses 1,329.20
(Loss) before tax (210.70)
Tax Expenses
(1) Current tax 17.50
(2) Deferred tax (credit)/ charge 0.10
(Loss) for the period (228.30)
OTHER MATTERS
F-180
Particulars Period 2012
1. Contingent Liabilities 98.00
2. Capital Commitments Nil
Movement of the aggregate Shareholders‟ funds of the Joint ventures:
Shareholders‟ funds as at beginning of the period 423.90
Add: Issue of shares by joint venture 125.00
Add: Share of (loss) / profits for the period (228.30)
Effect of disposal of joint ventures (299.00)
Shareholders‟ funds as at the end of the period 21.60
Note:
Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex
cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the
termination of the lease, the Company has decided to provide for diminution in the value of
investments in the Joint Venture amounting to ` 825.06 lakhs.
4. Considering the continuing substantial losses incurred by the Company, its net worth has been eroded.
However, having regard to improved operational performance on account of stabilisation of new
businesses in films and media services, financial support from its promoters, further restructuring
exercise being implemented etc, the financial statements of the Company have been prepared on the
basis of going concern and no adjustments are required to the carrying value of assets and liabilities.
5. The shareholders of the Company have approved on February 21, 2012 through postal ballot the
resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings pertaining to the
Film and Media Services and Exhibition business on a going concern basis to its wholly owned
subsidiaries at consideration not less than tax written down values as the board may decide and on such
terms and conditions and in such manner as may be decided by the board and the wholly owned
subsidiaries. Since necessary approval from lenders and other appropriate authorities are still awaited,
the Company has not executed relevant agreements with its subsidiaries. The appropriate accounting
treatment / disclosures will be given once the requisite approvals are obtained.
6. The Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in the Company‟s film and media
services division. The investment is proposed to be made into the subsidiary of the Company, into
which our film and media services division will be transferred. No definitive agreement has been
executed in respect of the proposed transaction. Though exclusivity period as per non-binding term
sheet has been expired on October 15, 2012, the Company and the fund are in process of extending
exclusivity period.
7. Exceptional items includes:
a. Provision of ` 6,921.90 lakhs made for advances given to a wholly owned subsidiary –
Reliance MediaWorks (Mauritius) Limited, which suffered a loss on sale of its investments
held in Exhibition operations in Malaysia.
b. Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary
of Digital Domain Media Group Inc. ('DDMG') for various services rendered. On September
11, 2011, DDMG along with all its subsidiaries filed for bankruptcy proceedings in the United
States of America. The amount provided for outstanding balances is ` 305.30 lakhs.
8. During Period 2012, the Company has dropped several properties under development / completed
properties and hence has written off the carrying value of capital work-in-progress of ` 4,424.60 lakhs
and deposits of ` 981.50 lakhs pertaining to these properties.
9. During Period 2012, the Company has sold its shareholding in
a. A joint venture - Cineplex Private Limited effective June 3, 2011
b. Subsidiaries – Sri Ramakrishna Theatres Limited effective May 28, 2011, Rave Entertainment
and Food Nepal Private Limited effective April 30, 2012, Reliance MediaWorks (Malaysia)
Sdn. Bhd. effective September 21, 2012 and Reliance MediaWorks Big Cinemas Sdn. Bhd.
(formerly known as Big Cinemas Lotus Five Star Sdn. Bhd.) effective September 21, 2012
F-181
10. Interest and finance charges (net) include loss on derivative transactions (net) of ` 5,966.80 lakhs.
III. For Period 2011
1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Minimum
lease
payments (` in
lakhs)
Amounts due within one year from the balance sheet date 11,445.10
Amounts due in the period between one year and five years 52,967.90
Amounts due after five years 73,466.30
Total 137,879.30
Amount payable within lock-in-period is ` 81,291.30 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 12,527.10 lakhs excluding amount
capitalised ` 906.20 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contract pertaining to Interest rate swap for long term loans
to a Company (Assignee), who has advised the Company regarding entering into these contracts. The
Assignee had advised the Company with regards to entering into these derivative contracts and has
indemnified the Company with regards to any mark to market losses that the Company will have to
incur on termination of these contracts. Consequently, the total mark to market loss of ` 1,921.40 lakhs
has not been recognised by the Company in its statement of profit and loss.
For the same reason, the Company has also not recognised a liability for these MTM losses and
amounts receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporatio
n
% of ownership
interest as at
March 31, 2011
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
Details of Joint ventures
Particulars Period 2011
(` in lakhs)
EQUITY AND LIABILITIES
Shareholders' funds
(a) Share capital 74.00
F-182
Particulars Period 2011
(` in lakhs)
(b) Reserves and surplus 349.90
Share application money, pending allotment 125.00
LIABILITIES
Non-current liabilities
(a) Long-term borrowings 383.00
(b) Deferred tax liabilities (net) 38.40
(c) Other long-term liabilities 4.30
(d) Long-term provisions 1.00
Current liabilities
(a) Trade payables 103.70
(b) Other current liabilities 48.30
(c) Short-term provisions 80.30
Total 1,207.90
ASSETS
Non-current assets
(a) Fixed assets
(i) Tangible assets (including capital work-in-progress) 761.90
(b) Long-term loans and advances 168.00
Current assets
(a) Current investments 10.40
(b) Inventories 11.80
(c ) Trade receivables 84.60
(d) Cash and bank balances 33.90
(e) Short-term loans and advances 101.10
(f) Other current assets 36.20
Total 1,207.90
Statement of profit and loss
(a) Revenue from operations 1,093.00
(b) Other income 9.30
Total revenue 1,102.30
Expenses
Direct operational expenses 540.10
Employee benefits expense 54.40
Finance costs (net) 14.30
Depreciation / amortisation expense 112.00
Other expenses 419.60
F-183
Particulars Period 2011
(` in lakhs)
Total expenses 1,140.40
Loss before tax (38.10)
Tax expenses
(1) Current tax 30.30
(2) Deferred tax (credit) (1.00)
Loss for the period (67.40)
OTHER MATTERS
1. Contingent liabilities 116.20*
2. Capital commitments Nil
*amount is not quantifiable in case of joint venture
Movement of the aggregate shareholders funds of the joint
ventures:
Shareholder‟s funds as at beginning of the period 491.30
Add: Share of loss for the period (67.40)
Shareholder‟s funds as at the end of the period 423.90
4. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency As at March 31, 2011
Amount – foreign
currency (lakhs)
Amount
(` in lakhs)
Trade and other receivables USD 770.80 34,994.80
GBP 51.90 3,778.20
EURO 2.30 149.90
Trade and other payables USD 5.80 262.80
GBP 0.20 11.50
EURO 0.10 4.20
Buyers credit USD 72.30 3,283.90
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible
Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs which were
convertible at any time on or after March 7, 2006 and up to the close of the business on January 19,
2011 by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company
with full voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in
Terms and Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion
of ` 54.26=EUR 1.00. The Bonds were listed on the Singapore Exchange Securities Trading Limited
(„SGX ST‟). Of the above, bondholders holding bonds of value Euro 633.50 lakhs opted for
conversion in Period 2008. During Period 2009, the Company demerged its radio division to Reliance
Broadcast Network Limited. As per the terms of FCCB‟s issued, the conversion price of the bonds is
subject to adjustment and the Company was awaiting a confirmation from the bondholders till the date
of redemption. Unless previously redeemed, converted or purchased and cancelled, the bonds will
mature on January 26, 2011 at 121.679 per cent of the principal amount.
F-184
During Period 2008, the Company classified the liability towards FCCB‟s as non–monetary liability
inter-alia on the basis of the trend of earnings, movement of the Company's share prices and conversion
option exercised by the FCCB holders. On January 25, 2011, the entire FCCB‟S outstanding as at
March 31, 2010, aggregating to Euro 206.50 lakhs have been redeemed at ` 15,814.20 lakhs (including
premium ` 3,085.40 lakhs). Consequently on redemption, foreign exchange loss aggregating to `
1,489.60 lakhs has been accounted.
(Refer note (c) of B of Annexure IV)
6. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of
20%. During Period 2011, the Company has received all the money receivable as per the shareholders
agreement and sold the shares. This investment was made by the Company with the intention of
investment in the movie "Sultan: The warrior". However, during Period 2010, the Company had issued
a letter of termination demanding refund for the moneys paid by the Company and filed a recovery suit
against Orcher Studios, as per a shareholders‟ agreement signed by the Company which has been
agreed to by Orcher Studios. Since, the Company has intention of selling the shares; the Company has
decided not to consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23
'Accounting for Associates in Consolidated Financial Statements. The outstanding balance of Sultan
Production Private Limited was ` 1,158.80 lakhs as at March 31, 2010, of which the Company had
considered ` 120.00 lakhs as doubtful in the previous year and provided for the same.
7. During Period 2011, the Company has sold assets of ` 10,417.30 lakhs for ` 13,997.20 lakhs pertaining
to the theatrical exhibition segment and leased them back subsequently. The profit on sale of these
assets has been disclosed under the Statement of other income.
8. Interest and finance (net) charge includes loss on derivative contract (net) ` 2,166.90 lakhs.
IV. For Period 2010
1. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the term of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating lease are as follows:
Particulars
Minimum lease
payments (` in
lakhs)
Amounts due within one year from the balance sheet date 8,089.60
Amounts due in the period between one year and five years 33,154.40
Amount due after five years 71,712.40
Total 112,956.40
Amount payable within lock-in-period is ` 54,805.40 lakhs
Amount debited to statement of profit and loss for lease rental is ` 8,092.60 lakhs excluding amount
capitalised ` 1,071.40 lakhs.
2. Mark to Market (MTM) losses on derivative contracts
F-185
The Company has assigned the derivative contracts pertaining to Options for FCCB and interest rate
swap for long term loans to a Company (Assignee), who has advised the Company regarding entering
into these contracts. The Assignee had advised the Company with regards to entering into these
derivative contracts and has indemnified the Company with regards to any mark to market losses that
the Company will have to incur on termination of these contracts. Consequently, the total mark to
market loss of ` 2,750.40 lakhs has not been recognised by the Company in its statement of profit and
loss. For the same reason, the Company has also not recognised a liability for these MTM losses and
amounts receivable from the Assignee Company.
3. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company
Country of
Incorporation
% of ownership
interest as at
March 31, 2010
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
Details of Joint ventures
Particulars
Period 2010
(` in lakhs)
I Assets
1. Fixed assets net block(including Capital work-in-progress) 871.00
2. Current assets, loans and advances
a) Inventories
11.40
b) Sundry debtors
70.50
c) Cash and bank balances
77.80
d) Interest accrued but not due
1.00
e) Loans and advances
277.80
II Liabilities
1. Shareholders' fund
491.30
2. Advance towards share application money 125.00
3. Unsecured loans
456.80
4. Deferred tax liability (net) 39.50
5. Current liabilities and provisions
a) Liabilities
153.90
b) Provisions
43.00
III Income
1. Income from theatrical exhibition (net of duties and taxes) 1,027.30
2. Other Income
36.00
IV Expenses
1. Direct operational expenses
539.70
2. Personnel costs 53.60
3. Other operating and general administrative expenses
348.60
4. Depreciation
111.80
5. Interest
44.40
Loss before tax
(34.80)
Provision for tax (including deferred tax)
(47.50)
Profit after tax
12.70
V. OTHER MATTERS
1. Contingent liabilities
948.20
2. Capital commitments
Nil
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period
478.60
Add: Share of profits for the period
12.70
At the end of the period
491.30
4. Foreign currency exposures (other than investments) not covered by forward contracts
F-186
Particulars Currency As at March 31, 2010
Amount – foreign
currency (lakhs) Amount – (` in lakhs)
Sundry debtors USD 2.60 117.60
GBP 0.10 10.80
Advance from
customers
USD 0.10 2.20
Sundry creditors USD 1.60 71.40
EURO 0.10 8.00
Loans and advances USD 601.40 27,080.10
GBP 35.70 2,422.90
EURO 1.60 96.50
Buyers credit USD 18.20 817.90
GBP 1.20 78.00
EURO 8.20 496.70
Foreign currency
convertible bonds
(FCCB) (Refer note (c)
of B of Annexure IV)
EURO 206.50 12,511.90
Provision for premium
on redemption on
FCCB
EURO 44.80 2,712.40
5. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible
Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds
are convertible at any time on or after 7 March 2006 and up to the close of the business on January 19,
2011 by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company
with full voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in
Terms and Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion
of ` 54.26=EUR 1.00. Of the above bondholders holding bonds of value Euro 633.50 lakhs opted for
conversion in Period 2008. The balance bond values aggregating to EURO 206.50 lakhs are
outstanding as on March 31, 2010. During Period 2009, the Company demerged its radio division to
Reliance Broadcast Network Limited (refer note 1 of V of D of Annexure IV). As per the terms of bond
issue, the conversion price of the bonds is subject to adjustment, after agreement with the bondholders.
Pending finalisation of agreement, the revised conversion price is not yet decided. Consequently the
equity shares issuable on conversion of FCCB - 2,061,884 have been computed based on initial
conversion price. The Bonds are listed on the Singapore Exchange Securities Trading Limited („SGX
ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions.
Unless previously redeemed, converted or purchased and cancelled, the bonds will mature on January
26, 2011 at 121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2010 is as follows:
F-187
Period 2010
(` in lakhs)
Opening balance
3,084.79
Adj: foreign exchange fluctuation
(372.50)
Closing balance
2,712.29
During Period 2008, the Company classified the liability towards FCCB as non–monetary liability
inter-alia on the basis of the trend of earnings, movement of the Company's share prices and
conversion option exercised by the FCCB holders. The Company continues to classify the liability
towards FCCB as a non–monetary liability as in its view the current fall in the market price of the
Company‟s share price and non-conversion by bond holders is a temporary aberration. Further,
pursuant to Scheme of Arrangement for demerger of the Radio business, the conversion price is
subject to adjustment, after agreement with bond holders. The Company estimates that there will
be significant adjustments to conversion price considering the value of Radio business which has
demerged. Consequently, the foreign exchange fluctuation (gain) / loss for Period 2010
aggregating to ` (1,718.10) lakhs has not been recognised by management. Cumulative loss not
recognised due to classification of FCCB as a non-monetary liability is ` 1,272.20 lakhs in respect
of outstanding FCCB's. Unrecognised losses on FCCB's which were converted into equity shares
in earlier periods is ` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)
6. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of
20%. This investment was made by the Company with the intention of investment in the movie
"Sultan: The warrior". However, during Period 2010, the Company has issued a letter of termination
demanding refund for the moneys paid by the Company and filed a recovery suit against Orcher
Studios, as per a shareholders‟ agreement signed by the Company which has been agreed to by Orcher
Studios.
Since, the Company has intention of selling the shares; the Company has decided not to consider Sultan
as an associate under AS-18 „Related Party Disclosures‟ and AS-23 'Accounting for Associates in
Consolidated Financials Statements‟.
The outstanding balance of Sultan Production Private Limited is ` 1,158.80 lakhs of which the
Company has considered ` 120.00 lakhs as doubtful in the current year and provided for the same.
7. Interest and finance charges (net) include loss on derivative transactions (net) of ` 3,539.20 lakhs.
V. For Period 2009
1. Demerger of the Radio business of the Company to Reliance Broadcast Network Limited
The Board of the Company in their meeting held on October 25, 2008 approved a Scheme of
Arrangement („the Radio Scheme‟) between Reliance Broadcast Network Limited („RBNL‟), a wholly
owned subsidiary and the Company for the de-merger of the Radio business (constituting the Radio
segment) of the Company into RBNL.
The shareholders of the Company accorded their approval in a court convened meeting of members of
the Company held on January 22, 2009. The Radio Scheme was approved by the Hon‟ble High Court
of Judicature at Bombay vide its order dated April 4, 2009 and filed with the Registrar of Companies
(„ROC‟) on June 30, 2009, as required under Section 391(3) of the Act after obtaining approval from
the Ministry of Information and Broadcasting („MIB‟) for vesting of radio licenses held by the
Company in the name of RBNL.
As per the Radio Scheme, the Radio business of the Company stands transferred to RBNL with effect
from April 1, 2008, the Appointed Date and has been given effect to on June 30, 2009, being the
Effective Date and the accounting treatment prescribed by the Radio Scheme has been given effect to
in the financial statements for Period 2009.
F-188
All the assets and liabilities, directly allocable and as mutually determined by the Board of Directors of
RBNL and the Company, of the Radio business as at April 1, 2008 have been transferred at their
respective book values. Further, general borrowings of the Company as on April 1, 2008 have been
allocated between the Company and RBNL on the basis of ratio of total assets of the Company
immediately before giving effect of the Radio Scheme. In consideration of the demerger, RBNL will
allot equity shares of ` 5 each in the ratio of 1:1 and upon issue of shares as above the Company‟s
investment in shares of RBNL will stand cancelled.
As per the provisions of the Radio Scheme, excess balances of assets transferred over liabilities and the
cost of investments in RBNL cancelled has been debited to Securities premium reserve as follows:
Particulars Amount
(` in lakhs)
Assets of Radio business as of April 1, 2008 transferred as per the provisions of the
Radio Scheme 44,929.50
Liabilities of Radio business as of April 1, 2008 transferred as per the provisions of
the Radio Scheme (6,831.50)
General borrowings of the Company as of April 1, 2008 allocated between RBNL
(Radio Business) and the Company as per the provisions of the Radio Scheme (22,400.00)
Excess of net assets transferred to RBNL (Radio business) 15,698.00
Cancellation of investment in RBNL 1,010.00
Total amount debited to Securities premium reserve as per the provisions of
the Radio Scheme 16,708.00
The Radio business has been held / carried on in trust for the period April 1, 2008 till the Effective
Date by the Company. Accordingly, the Company has charged interest, at an agreed rate on the amount
receivable as at the appointed date and subsequent funding till the Effective Date. The total receivable `
26,095.00 lakhs (includes interest ` 2,584.90 lakhs) has been disclosed as a recoverable from RBNL.
However, for Period 2009 financial statements, pending allotment of shares by RBNL, the investment
has been cancelled to give effect to the substance of the Radio Scheme as approved by the Hon‟ble
High Court of Judicature at Bombay and RBNL ceases to be a subsidiary for Period 2009 financial
statements.
2. Scheme for merger of wholly owned subsidiaries with the Company
The Board of the Company in their meeting held on January 30, 2009 approved the Scheme of
Amalgamation („Amalgamation Scheme‟) of the Company („Transferee‟) with its wholly owned
subsidiaries Adlabs Multiplexes and Theatres Limited („AMTL‟), Adlabs Multiplex Limited („AML‟),
Mahimna Entertainment Private Limited („MEPL‟) and Rave Entertainment Private Limited („REPL‟)
(collectively referred to as the Transferor Companies). The Amalgamation Scheme was approved by
the Hon‟ble High Court of Judicature at Bombay vide its order dated May 8, 2009 and filed with the
Registrar of Companies („ROC‟) on May 29, 2009, as required under Section 391(3) of the Act.
AMTL, AML, and REPL are engaged in the exhibition business and have been included in the
theatrical exhibition segment. MEPL has been included in the unallocated corporate segment.
As per the Amalgamation Scheme, AMTL, AML, MEPL and REPL amalgamated with the Company
with effect from April 1, 2008, the Appointed Date and has been given effect to on May 29, 2009,
being the Effective Date and the accounting treatment prescribed by the Amalgamation Scheme has
been given effect to in the financial statements for Period 2009.
In accordance with the requirements of the Amalgamation Scheme, the credit aggregating ` 5,826.20
lakhs to Capital reserve has been arrived at as follows:
F-189
All assets and liabilities of the Transferor companies as at April 1, 2008 which have been
identified by the Board of Directors have been recorded at their respective fair values (as
determined based on valuation reports from Government approved valuer / management estimates)
as on March 31, 2009. Investments in the equity shares of the Transferor companies as appearing
in the books of the Transferee Company as at March 31, 2009 have been cancelled. The excess of
net assets of the transferor companies taken over at fair value (as determined on March 31, 2009)
over the cost of investment in these companies, aggregating ` 3,605.80 lakhs has been credited to
Capital reserve.
The Company has recorded an increase in the value of its assets based on revaluation of certain
assets of the Company pertaining to the theatrical exhibition and film production services business.
The total increase in value of assets of the Company is ` 17,890.10 lakhs, based on revaluation
reports obtained from Government approved external valuers. The Company has also reduced the
value of its assets by ` 15,669.70 lakhs (Fixed assets and intangible rights ` 3,989.50 lakhs, Debtors
` 2,050.70 lakhs, Loans and advances including capital advances ` 6,188.50 lakhs and Investments `
3,441.00 lakhs). The net increase in the value of assets of the Company ` 2,220.40 lakhs has been
credited to Capital reserve pursuant to the provisions of the Amalgamation Scheme.
The authorised share capital of the Transferor Companies was considered as authorised share
capital of the Transferee Company. Hence, the authorised share capital of the Company has been
increased by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each.
The above mentioned accounting treatment is in accordance with the Amalgamation Scheme, had
the Company followed accounting treatment prescribed by AS – 14 “Accounting for
Amalgamations” / Indian GAAP:
The excess of investments over net assets acquired by the Company amounting to ` 1,939.10 lakhs
would have been transferred to Goodwill and would have been amortised over 5 years.
The appreciation in the value of the Company‟s assets aggregating ` 17,890.10 lakhs would have
been credited to the Revaluation reserve instead of being credited to the Capital reserve.
The diminution in the value of the Company‟s assets aggregating ` 15,669.70 lakhs would have
been debited to the statement of profit and loss instead of Capital reserve. Accordingly, had the
Amalgamation Scheme as referred above been accounted for as per the requirements of AS – 14
“Accounting for Amalgamations” / Indian GAAP, the loss for the year would be higher by `
16,057.60 lakhs, capital reserve would have been lower ` 281.20 lakhs, revaluation reserve would
have been higher by ` 17,890.10 and balance of Goodwill would have been ` 1,551.30 lakhs.
3. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars Minimum lease
payments (` in
lakhs)
Amounts due within one year from the balance sheet date 6,724.30
Amounts due in the period between one year and five years 27,988.70
Amounts due after five years 71,374.40
Total 106,087.40
Amount payable within lock-in-period is ` 39,398.00 lakhs
F-190
Amount debited to statement of profit and loss for lease rental is ` 6,440.60 lakhs excluding amount
capitalised ` 1,244.10 lakhs.
4. Mark to Market (MTM) losses on derivative contracts
The Company has assigned the derivative contracts pertaining to Options for FCCB and Interest rate
swap for long term loans to a Company („Assignee‟), who has advised the Company regarding entering
into these contracts. The Assignee had advised the Company with regards to entering into these
derivative contracts and has indemnified the Company with regards to any mark to market losses that
the Company will have to incur on termination of these contracts. Consequently, the total mark to
market loss of `14,037.00 lakhs have not been recognised by the Company in its statement of profit and
loss.
For the same reason, the Company has also not recognised a liability for these MTM losses and
amounts receivable from the Assignee Company.
5. Interest in Joint ventures
The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:
Name of the Company Country of
Incorporation
% of ownership
interest as at
March 31, 2009
Swanston Multiplex Cinemas Private Limited India 50%
Cineplex Private Limited India 50%
Divya Shakti Marketing Private Limited India 50%
Details of Joint ventures
Period 2009
(` in lakhs)
I Assets
1. Fixed assets (including Capital work-in-progress) 964.20
2. Current assets, loans and advances
a) Inventories 11.20
b) Sundry debtors 53.70
c) Cash and bank balances 82.00
d) Interest accrued but not due 0.60
e) Loans and advances 115.00
II Liabilities
1. Shareholders' fund 478.60
2. Unsecured loans 506.80
3. Deferred tax (net) 55.70
4. Current liabilities and provisions
a) Liabilities 159.30
b) Provisions 26.30
III Income
1. Sales (net of duties and taxes) 1,186.70
2. Other income 92.00
IV Expenses
1. Operating expenses 956.80
2. Depreciation 109.70
F-191
Period 2009
(` in lakhs) 3. Interest -
Profit before tax 212.20
Provision for tax (including deferred tax) 51.50
Profit after tax 160.70
V. Other matters
1. Contingent liabilities 1,016.10
2. Capital commitments Nil
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 404.90
Add: Share of profits for the period 160.70
Less: Dividend declared during the period (87.00)
At the end of the period 478.60
6. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency
As at March 31, 2009
Amount – Foreign
currency (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 18.20 948.30
GBP 1.70 124.40
EURO 0.20 10.60
Sundry creditors USD 3.80 200.40
GBP 0.10 4.00
EURO 0.10 3.50
Loans and advances USD 333.00 17,375.30
GBP 4.40 327.40
EURO 0.60 40.80
Buyers credit USD 5.30 276.60
GBP 1.20 85.30
EURO 8.20 564.90
Foreign Currency Convertible Bonds
(„FCCB‟) (Refer note (c) of B of Annexure
IV)
EURO 206.50 14,230.00
Provision for premium on redemption of
FCCB
EURO 44.80 3,084.80
7. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company („Issuer‟) issued Zero Coupon Foreign Currency Convertible Bonds
(„Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after 7
March 2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds („the
Bondholders‟) into newly issued equity shares of the Company with full voting rights with par value of
` 5 each („Shares‟) at an initial conversion price (as defined in Terms and Conditions of the Bonds) of `
543.42 per share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. Of the above
bondholders holding bonds of value Euro 633.50 lakhs opted for conversion in the Period 2008. The
F-192
balance bondholders holding bonds of value aggregating to Euro 206.50 lakhs have not opted for
conversion and are outstanding as on March 31, 2009. During Period 2009, pursuant to the Scheme of
Arrangement for demerger of Radio business, the conversion price is subject to adjusted after
agreement with the bondholders and the Company. Pending finalisation of agreement, the revised
conversion price is not yet decided. Consequently the equity shares issuable on conversion of FCCB
have been computed based on initial conversion price. The Bonds are listed on the Singapore Exchange
Securities Trading Limited („SGX-ST‟).
The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions.
Unless previously redeemed, converted or purchased and cancelled, the bonds will mature on January
26, 2011 at 121.679 per cent of the principal amount.
The balance in premium account as at March 31, 2009 is as follows:
Period 2009
(` in lakhs)
Opening balance 2,839.89
Add: foreign exchange fluctuation 244.90
Closing balance 3,084.79
During Period 2008, the Company re-classified the liability towards Foreign Currency Convertible
Bonds ('FCCB') as non–monetary liability inter-alia on the basis of the trend of earnings, movement of
the Company's share prices and conversion option exercised by the FCCB holders. The Company
continues to classify the liability towards FCCB as a non–monetary liability as in its view the current
fall in the market price of the Company‟s share price and non-conversion by bond holders is a
temporary aberration. Consequently, the foreign exchange fluctuation loss for the Period 2009
aggregating to ` 1,130.10 lakhs has not been recognised by the management. Cumulative loss not
recognised due to classification of FCCB as a non-monetary liability is ` 2,990.40 lakhs in respect of
outstanding FCCB's. Unrecognised losses on FCCB's which were converted into equity shares in
earlier periods is ` 2,199.50 lakhs.
(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s a monetary liability)
8. Impairment Disclosure
During the Period 2009, the Company has impaired certain fixed assets pertaining to the theatrical
exhibition segment on the basis of determination of value in use of each property, which the Company
considers as the relevant Cash Generating Unit („CGU‟) for the purpose of impairment testing. The
Company has considered a discount rate of 11.68%. The amount of impairment loss of ` 551.70 lakhs
has been debited to the Capital reserve pursuant to Scheme of Amalgamation.
(Refer note 2 of V of D of Annexure IV)
9. Interest and finance (net) charge includes loss on derivative contract (net) ` 4,864.90 lakhs.
VI. For Period 2008
1. Modified Composite Scheme of Amalgamation and Arrangement
The Board of the Company at their meeting held April 23, 2006 approved the Composite Scheme of
Amalgamation and Arrangement (the „Composite Scheme‟) between the Company, Entertainment One
India Limited („E-ONE‟), Adlabs Multiplexes and Theatres Limited („AMTL‟) and Reliance Broadcast
Network Limited („RBNL‟). The shareholders of the Company accorded their approval to the Scheme
at the Annual General Meeting on July 29, 2006. The Composite Scheme was approved by the Hon'ble
F-193
High Court of Judicature at Bombay vide its order dated September 15, 2006. The Composite Scheme
inter-alia provided for the following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
the demerger of the radio business of the Company to RBNL effective March 31, 2006.
The Company had made an application to the Ministry of Information and Broadcasting for vesting of
Radio licenses held by it in the name of RBNL. Pending the said approval, the Composite Scheme was
not filed with the Registrar of Companies ('ROC') as required under Section 391(3) of the Companies
Act, 1956 ('the Act'). However, for the purpose of the fifteen months ended June 30, 2007 financial
statements, pending completion of licensing and other procedural formalities, the Composite Scheme
was given effect to in view of the Court approval and to give effect to the substance of the Composite
Scheme as approved by the Hon'ble High Court of Judicature at Bombay.
In accordance with the requirements of the Composite Scheme, the merger of E-ONE as well as the
digital business of AMTL and the demerger of the Radio business of the Company was accounted for
as follows:
All assets and liabilities of E-ONE as at April 1, 2005 were recorded by the Company at their
fair values. Since E-ONE was a wholly owned subsidiary of the Company, the investment by
the Company in the shares of E-ONE was cancelled against the assets and liabilities acquired
on amalgamation. The excess of net assets taken (at fair value) over the cost of investment in
E-ONE amounting to ` 272.58 lakhs was credited to 'Amounts pending transfer to the
Securities premium account and / or General reserve account as per the Composite Scheme of
Amalgamation and Arrangement'.
All assets and liabilities of the digital business of AMTL as at April 1, 2005 were recorded by
the Company at their book values. Since AMTL was a wholly owned subsidiary of the
Company, no consideration was paid against the assets and liabilities acquired. The excess of
liabilities over the assets taken over (at book value) amounting to ` 44.69 lakhs was debited to
'Amounts pending transfer to the Securities premium account and / or General reserve account
as per the Composite Scheme of Amalgamation and Arrangement'.
All assets and liabilities of the Radio business of the Company as at March 31, 2006 were
transferred at their respective book values. The aggregate value of net assets transferred
pursuant to the Composite Scheme in excess of ` 10,000 lakhs (which was recorded as
receivable from RBNL) was recorded in 'Amounts pending transfer to the Securities premium
account and / or General reserve account as per the Composite Scheme of Amalgamation and
Arrangement'
Subsequently during the current period, the Board modified the aforesaid Composite Scheme vide
circular mode pursuant to Section 289 of the Companies Act, 1956 on February 13, 2008. The
Modified Composite Scheme of amalgamation and arrangement (the „Modified Scheme‟) between the
Company, E-ONE and AMTL was approved by the Hon'ble High Court of Judicature at Bombay vide
its order dated March 7, 2008 and was filed with the ROC as required under Section 391(3) of the
Companies Act, 1956 ('the Act') on March 31, 2008.The Modified Scheme inter-alia provides for the
following:
the amalgamation of E-ONE with the Company effective April 1, 2005;
the merger of the digital business of AMTL with the Company effective April 1, 2005; and
adjusting the net results of the transactions related to Radio business from March 31, 2006 till
the Effective Date in the General reserve account of the Company.
As the Composite Scheme was primarily modified in relation to the Radio business, in respect of
amalgamation of E-ONE and merger of digital business of AMTL, these were already given effect to in
the financial statements of the fifteen month period June 30, 2007. Accordingly, no further adjustments
are made in the Period 2008 financial statements, except that the amounts which were not credited /
debited to 'Securities premium' / 'General reserve account ' pending filing the Composite Scheme with
ROC have now been debited / credited to Securities premium / General reserve account as applicable
on the filing of the Modified Scheme with the ROC.
F-194
During the Period upto March 31, 2008, E-ONE and AMTL carried on their existing business in trust
for and on behalf of the Company. All vouchers, deeds, licenses, agreements, loan documents, etc are
in the name of E-ONE and AMTL. The tile deeds, licenses, agreements, loan documents, etc are being
transferred in the name of the Company.
As regards the Radio business, the provision relating to demerger of the Radio business of the
Company to RBNL effective March 31, 2006 as provided in the Composite Scheme and given effect to
in the fitten month period ended June 30, 2007 financial statements have been deleted in the Modified
Scheme. Accordingly, all the adjustments effected in the fifteen month period ended June 30, 2007
financial statements in this regard have been reversed during the Period 2008. Further, in accordance
with the Modified Scheme, the net results of the transactions related to Radio business for the period
from March 31, 2006 till the Effective Date (i.e. March 31, 2008) have been debited to General reserve
account of the Company.
The net results of the transactions related to Radio business for the period from March 31, 2006 up to
March 31, 2008 are summarised hereunder:
Particulars Period 2008
(` in lakhs)
Fifteen month
period ended June
30, 2007
(` in lakhs)
Income 11,160.90 3,320.30
Expenditure
Direct costs 5,062.10 2,024.60
Personnel costs 3,477.60 2,528.10
Other operating and general administrative
expenses *
5,584.10 4,547.60
Interest 1,346.30 2,119.90
Depreciation / amortisation 2,396.60 1,474.80
Loss before tax (6,705.80) (9,374.70)
Tax expenses - fringe benefit tax 114.90 75.50
Loss after tax (A) (6,820.70) (B) (9,450.20)
Total (A + B) (16,270.90)
Tax effect of the above 1,907.60
Balance transferred to General reserve
account
14,363.30
* includes ` 785.80 lakhs (Fifteen month period ended June 30, 2007: ` 2,086.70 lakhs, since reversed)
being interest etc. allocated / charged in the fifteen month period ended June 30, 2007 by Company to
the radio business on net funds utilised in carrying on the Radio business.
For deviation to the accounting treatment recommended in the standard refer note 3 of VI of D of
Annexure IV.
2. Acquisition of Rave Entertainment Private Limited ('REPL')
On May 31, 2007, the Company entered into a Share Purchase Agreement ('SPA') with the
shareholders of Rave Entertainment Private Limited ('REPL'), a company engaged inter-alia in the
business of owning and operating multiplexes, for acquisition of 100% stake in that company. One of
the conditions precedents to the SPA was the approval by the Hon'ble High Court of Judicature at
Allahabad of the Scheme of demerger filed by REPL for demerger of Kanpur properties. Pending
approval of the Scheme of demerger by the said Court, the shares of REPL were held in Escrow and the
consideration of ` 500 lakhs was disclosed under loans and advances in the fifteen month period ended
June 30, 2007 financial statements. On December 12, 2007, the Hon'ble High Court of Judicature at
Allahabad approved the said Scheme of demerger. Consequently, REPL is now a wholly owned
subsidiary of the Company and the amounts placed in Escrow and those disclosed under loans and
advances have been adjusted as per the terms of the SPA.
3. Acquisition of Katch 22 Entertainment Private Limited ('Katch 22')
F-195
On April 23, 2007, the Company acquired 100% stake in Katch 22, a company engaged in the
production and distribution of films. Subsequently, pursuant to the Board of Directors' approval vide
resolution dated April 26, 2007; the Company had filed the Scheme of Amalgamation of Katch 22 ('the
Katch 22 Scheme') with the Hon'ble High Court of Judicature at Bombay for the merger of Katch 22
with the Company effective April 1, 2006. The Katch 22 Scheme was approved by the Hon'ble High
Court of Judicature at Bombay vide its order dated September 14, 2007 and filed with the ROC on
October 9, 2007. The Katch 22 Scheme inter-alia provides for the amalgamation of Katch 22
Entertainment Private Limited with the Company effective April 1, 2006.
In accordance with the requirements of the Katch 22 Scheme, the merger of Katch 22 with the
Company has been accounted for as follows:
As per the Katch 22 Scheme, Katch 22 amalgamates with the Company retrospectively from
April 1, 2006, the Appointed Date. All assets and liabilities of Katch 22 as at April 1, 2006
have been recorded by the Company at their fair values. Since Katch 22 was a wholly owned
subsidiary of the Company, the investment by the Company in the shares of Katch 22 has
been cancelled against the assets and liabilities acquired on amalgamation. The excess of net
assets taken over at fair value (as determined on the Effective Date i.e. October 9, 2007) over
the cost of investment in Katch 22 amounting to ` 201.80 lakhs has been credited to General
reserve account.
The Company has also recorded the reduction of ` 2,000.00 lakhs in the value of its assets
(debtors, unamortised rights and loans and advances) by debit to 'General reserve account' as
per the provisions of the Katch 22 Scheme.
The net results of the transactions relating to Katch from April 1, 2006 up to the Effective Date are as
follows:
Particulars For the period from
July 1, 2007 to October
8, 2007 (` in lakhs)
Fifteen month
period ended
June 30, 2007
(` in lakhs)
Sales and service (net) - 701.90
Other income 23.30 -
Total revenue 23.30 701.90
Direct costs - 1,691.30
Other operating and general administrative expenses 0.20 0.10
Interest - 131.60
Profit before tax 23.10 (1,121.10)
Tax expenses - -
Profit after tax 23.10 (1,121.10)
Impact of Schemes referred to in notes 1 of VI of D of Annexure IV and 3 of VI of D of Annexure
IV:
Had the Company followed the accounting treatment prescribed by AS-14 / generally accepted
accounting principles in India:
` 201.80 lakhs arising from the merger of Katch 22 with the Company and credited to the
General reserve account would have been credited to Capital reserve account;
Reduction of ` 2,000 lakhs in value of the Company's assets would have been debited to the
statement of profit and loss instead of General reserve account;
` 2,086.70 lakhs being interest on monies advances by the Company to the Radio business
would have been reversed in the statement of profit and loss as against the reversal in the
General reserve account, and
The net results / (loss) of the transactions related to Radio business from March 31, 2006 up to
the Effective Date i.e. March 31, 2008 aggregating to ` 14,363.30 lakhs (net of tax benefits)
F-196
arising from modification in the Scheme of demerger of Radio business and debited to the
General reserve account would have been debited to statement of profit and loss.
Accordingly, had the Modified Scheme been accounted for in compliance with the requirements of AS
14 / generally accepted accounting principles in India, the profit for the period before tax would have
been lower by ` 18,450 lakhs, General reserve account would have been higher by ` 18,248.20 lakhs
and Capital reserve account would have been stated at ` 201.80 lakhs.
4. Lease disclosure under AS 19 – „Leases‟
The Company is obligated under non-cancellable leases primarily for theatre and office premises and
equipments which are renewable thereafter as per the terms of the respective agreements.
The future minimum lease payments in respect of non-cancellable operating leases are as follows:
Particulars
Minimum lease
payments (` in
lakhs) Amounts due within one year from the balance sheet date 4,607.80
Amounts due in the period between one year and five years 18,978.80
Amounts due after five years 53,463.80
Total 77,050.40
Amount payable within lock-in-period is ` 38,309.40 lakhs.
Amount debited to statement of profit and loss for lease rental is ` 2,593.50 lakhs.
5. Interest in Joint ventures
Name of the Company Country of
incorporation % of ownership
interest as at March 31, 2008
Swanston Multiplex Cinemas Private Limited India 50.00% Adlabs Multiplex Limited (Became subsidiary with effect from December 20, 2007)
India -
Cineplex Private Limited India 50.00% Divya Shakti Marketing Private Limited India 50.00%
Details of Joint ventures
Particulars Period 2008
(` in lakhs)
I. Assets
1. Fixed assets (including Capital work-in-progress) 1,063.80
2. Investments
56.40
3. Current assets, loans and advances
a) Inventories 8.50
b) Sundry debtors 88.40
c) Cash and bank balances 69.30
d) Interest accrued but not due 0.50
e) Loans and advances 73.50
II. Liabilities
1. Shareholders' fund
478.90
2. Unsecured loans 634.60
3. Deferred tax (net) 54.10
4. Current liabilities and provisions
F-197
Particulars Period 2008
(` in lakhs)
a) Liabilities 179.60
b) Provisions 13.20
III. Income
1. Sales (net of duties and taxes) 1,024.10
2. Other income 102.80
IV. Expenses
1. Operating expenses 911.30
2. Depreciation 102.10
3. Interest 0.60
4. Profit before tax 112.90
5. Prior period adjustments (0.40)
6. Provision for tax 30.00
7. Profit after tax 83.30
V. Other Matters
1. Contingent liabilities 2,032.20
2. Capital commitments -
Movement of the aggregate shareholders‟ funds of the joint ventures:
At the beginning of the period 497.10
Add: Share of losses for the period (18.20)
At the end of the period 478.90
6. Foreign currency exposures (other than investments) not covered by forward contracts
Particulars Currency Period 2008
Amount – Foreign
currency (lakhs)
Amount
(` in lakhs)
Sundry debtors USD 4.60 184.40
GBP 3.10 246.30
Euro 0.10 6.50
Sundry creditors USD 40.80 1,636.10
GBP 1.60 129.90
Euro 8.20 520.20
Loans and advances USD 21.60 865.80
Euro 7.00 444.20
Foreign Currency Convertible Bonds („FCCB‟) (Refer note (c) of B Annexure IV)
Euro 206.50 13,099.90
Provision for premium on redemption of FCCB Euro 44.80 2,899.90
7. Foreign Currency Convertible Bonds („FCCB‟)
On January 25, 2006 the Company ('Issuer') issued Zero Coupon Foreign Currency Convertible Bonds
('Bonds' or 'FCCB') aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after
March 7, 2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds ('the
Bondholders') into newly issued equity shares of the Company with full voting rights with par value of
` 5 each ('Shares') at an initial conversion price (as defined in Terms and Conditions of the Bonds) of `
F-198
543.42 per share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. The conversion
price is subject to adjustment in certain circumstances. The Bonds are listed on the Singapore Exchange
Securities Trading Limited ('SGX-ST').
The Bonds may be redeemed, in whole but not in part, at the option of the Issuer at any time on or after
January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions.
Unless previously redeemed, converted or purchased and cancelled, the bonds will mature on January
26, 2011 at 121.679 per cent of the principal amount.
During Period 2008, bond holders holding bonds aggregating Euro 633.50 lakhs have opted to convert
the bonds to equity shares. Accordingly shares aggregating to 6,325,420 have been issued to them at a
price of ` 543.42 per share (including securities premium of ` 538.42 per share).
The balance in premium account as at March 31, 2008 is as follows:
Period 2008
(` in lakhs)
Opening balance
10,006.59
Add: Reversal of provision for premium on conversion of FCCB
(7,858.20)
Add: foreign exchange fluctuation
691.50
Closing balance
2,839.89
* Premium payable on redemption of FCCB ` 9,880.90 lakhs has been fully provided for and has been
charged to securities premium reserve. During Period 2008, Bond holders holding bonds aggregating
Euro 633.50 lakhs have opted to convert their bonds into equity shares.
During Period 2008, FCCBs have been reclassified as non-monetary liabilities pursuant to inter-alia the
current trend of earnings and market price of the Company's equity share exceeding the conversion
price stipulated in the offer document (bondholders holding 75.42% of the FCCB have exercised
conversion option up to March 31, 2008). Consequently, the foreign exchange fluctuation loss
aggregating to ` 438.10 lakhs accounted in the fifteen month period ended June 30, 2007 and year
ended March 31, 2006 has been reversed during the period in the statement of profit and loss and
foreign exchange fluctuation loss of ` 3,621.80 lakhs for the financial period has not been recognised in
the statement of profit and loss.
(Refer (c) of B of Annexure IV for subsequent consideration of FCCB as a monetary liability)
F-199
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital of the Company
(` in lakhs)
Particulars
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
Authorised
Equity shares of ` 5/-each 24,000.00 24,000.00 5,000.00 5,000.00 4,602.90 3,000.00
Preference shares of ` 5/-
each 1,000.00 1,000.00 - - - -
25,000.00 25,000.00 5,000.00 5,000.00 4,602.90 3,000.00
Issued, subscribed and
paid-up capital
Equity shares of ` 5/- each,
fully paid-up 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
10 % redeemable non
convertible non cumulative
preference shares
(Preference shares) of `
5/- each, fully paid-up 147.50 147.50 - - - -
2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31
(refer notes (a) to (i) below)
(a) Reconciliation of the shares outstanding at the commencement and at the end of the period
Equity shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In lakhs) (In lakhs)
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
At the commencement of the
period 461.26 461.26 461.26 461.26 461.26 398.00
Share issued during the
period - - - - - 63.26
At end of the period 461.26 461.26 461.26 461.26 461.26 461.26
Preference shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In
lakhs) (In lakhs)
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
At the commencement of the
period 29.50 - - - - -
Share issued during the
period
-
29.50 - - - -
At end of the period 29.50 29.50 - - - -
(b) Rights, preferences and restriction attached to equity shares
The Company has only one class of equity shares having par value of ` 5 per share. Each equity holder is
entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. The
dividend proposed, if any by the Board of the Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
F-200
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital of the Company
(` in lakhs)
Particulars
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
(c) Rights, preferences and restriction attached to Preference share
Preference shares shall be redeemed at the end of 20 years from the date of allotment i.e. each Preference
shares shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a.
(till date of redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend,
if any declared during the tenure. However, the premium on redemption will be paid only to the original
subscribers or to the transferees if the transfers have been previously approved by the Company.
Further early redemption at the option of holder of Preference shares can be done, at issue price plus yield
as mentioned above, at any time after the date of allotment by giving not less than two months advance
notice to
the Company. Early redemption at the option of Company at the applicable redemption price can be done,
any time after the date of allotment by giving not less than 30 days notice to the Preference share holder.
(d) Names of shareholders holding more than 5% of equity share in the Company
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In lakhs) (In lakhs)
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
Reliance Land Private
Limited 206.00 206.00 206.00 206.00 206.00 206.00
Reliance Capital Limited 85.29 85.29 81.05 81.05 29.55 -
AAA Entertainment Private
Limited - - - - 48.00 48.00
%
holding in
the class
% holding
in the class
%
holding
in the
class
%
holding
in the
class
%
holding
in the
class
%
holding
in the
class
Reliance Land Private
Limited 44.66% 44.66% 44.66% 44.66% 44.66% 44.66%
Reliance Capital Limited 18.49% 18.49% 17.57% 17.57% 6.41% -
AAA Entertainment Private
Limited - - - - 10.40% 10.40%
(e)
Names of shareholders
holding more than 5% of
Preference share in the
Company
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
No of
Shares
(In lakhs) (In lakhs)
(In
lakhs) (In lakhs) (In lakhs)
(In
lakhs)
Reliance Infocomm
Engineering Private Limited 12.00 12.00 - - - -
Reliance Utility Engineers
Private Limited 17.50 17.50 - - - -
%
holding in
the class
% holding
in the class
%
holding
in the
class
%
holding
in the
class
%
holding
in the
class
%
holding
in the
class
Reliance Infocomm
Engineering Private Limited 40.68% 40.68% N.A. N.A. N.A. N.A.
Reliance Utility Engineers
Private Limited 59.32% 59.32% N.A. N.A. N.A. N.A.
F-201
Annexure V
Reliance MediaWorks Limited
10
Statement of share capital of the Company
(` in lakhs)
Particulars
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March
31, 2008
(f) Pursuant to shareholder approval dated March 30, 2012, the authorised share capital of the Company was
reclassified from 1,000 lakh equity shares of ` 5 each to 800 lakh equity shares of ` 5 each and 200 lakh
preference shares of ` 5 each.
(g) Pursuant to shareholder approval dated July 13, 2012, the authorised share capital of the Company was
increased from ` 5,000 lakhs to ` 25,000 lakhs divided into 4,800 lakh equity shares of ` 5 each and 200
lakh preference shares of ` 5 each.
(h) During Period 2009, the authorised share capital of the Company has been increased as per the provisions
of Scheme of Amalgamation by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each. (refer note 2of
V of D of Annexure IV)
(i) During the Period 2008, bond holders holding bonds aggregating EURO 633.50 lakhs have opted to
convert their bonds to equity shares. Accordingly, equity shares aggregating to 63.26 lakhs have been
issued to them at a price of ` 543.42 per share (including securities premium of ` 538.42).
F-202
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
a)
Securities
premium
reserve
At the
commencement
of the period 76,169.95 46,817.45 47,190.56 46,818.06 63,770.96 24,537.54
Less : Provision
for premium on
redemption of
Zero Coupon
Foreign
Currency
Convertible
Bonds ('FCCB')
(Also refer note
(c) of B of
Annexure IV) - - (373.11) 372.50 (244.90) (691.50)
Add : On
issuance of
equity shares
pursuant to
conversion of
FCCB‟s - - - - - 34,161.66
Add : Premium
on issuance of
preference
shares - 29,352.50 - - - -
Add : Reversal
of provision for
premium on
FCCB
converted
during the
period (Also
refer note (c) of
B of Annexure
IV) - - - - - 7,858.20
Less :
Adjustment
pursuant to
Modified
Composite
Scheme of
Amalgamation
and
Arrangement
(Refer note 1 of
VI of D of
Annexure IV) - - - - - (2,094.94)
F-203
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Less:
Adjustment
pursuant to
Scheme of
Arrangement
for demerger of
Radio business
(refer note 1 of
V of D of
Annexure IV) - - - - (16,708.00) -
76,169.95 76,169.95 46,817.45 47,190.56 46,818.06 63,770.96
b)
General
reserve
At the
commencement
of the period 1,195.08 1,195.08 1,195.08 1,195.08 1,195.08 5,584.00
Add : Transfer
from Statement
of profit and
loss - - - - - 11,500.00
Add : Transfer
on account of
Scheme of
Amalgamation
of Katch 22
(Refer note 3 of
VI of D of
Annexure IV) - - - - - 201.80
Less :
Reduction in
value of
Companies
assets pursuant
to Scheme of
Amalgamation
of Katch 22
Refer note 3 of
VI of D of
Annexure IV) - - - - - (2,000.00)
Less : Net result
of the
transactions
relating to
Radio business
adjusted
pursuant to
Modified
Composite
Scheme of
Amalgamation
and
Arrangement
(Refer note 1 of
VI of D of
Annexure IV) - - - - - (14,363.30)
F-204
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
Add :
Adjustment
pursuant to
Modified
Scheme of
Amalgamation
and
Arrangement
(Refer note 1 of
VI of D of
Annexure IV) - - - - - 272.58
1,195.08 1,195.08 1,195.08 1,195.08 1,195.08 1,195.08
c) Capital reserve
At the
commencement
of the period 5,826.20 5,826.20 5,826.20 5,826.20 - -
Amounts
transferred to
Capital reserve
as per
provisions of
the Scheme of
Amalgamation
(Refer note 2 of
V of D of
Annexure IV) - - - 5,826.20 -
5,826.20 5,826.20 5,826.20 5,826.20 5,826.20 -
d)
Foreign
currency
translation
reserve
At the
commencement
of the period 2,973.05 (625.60) (682.51) 532.29 - -
Add: Foreign
currency
translation gain
/ (loss) on non-
integral
operations (net) 1,030.02 3,598.65 56.91 (1,214.80) 532.29 -
4,003.07 2,973.05 (625.60) (682.51) 532.29 -
e) Amount
pending
transfer to the
Securities
premium
reserve and /
or the General
reserve as per
the Composite
Scheme of
Amalgamation
and
Arrangement
(Refer note 1
of VI of D of
Annexure IV)
F-205
Annexure VI
Reliance MediaWorks Limited
10
Summary statement of reserves and surplus of the Company
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March 31,
2009
March 31,
2008
i) Pending
transfer to
Securities
premium
reserve
At the
commencement
of the period - - - - - (10,060.33)
Reversal due to
the Modified
Scheme of
Amalgamation
and
Arrangement - - - - - 7,965.39
Transfer to
Securities
premium
reserve - - - - 2,094.94
- - - - - -
ii) Pending
transfer to
General
reserve
At the
commencement
of the period - - - - - 272.58
On merger of E-
ONE transfer to
General
Reserve - - - - - (272.58)
Transfer to
General reserve - - - - - -
f) (Deficit) /
Surplus in
Statement of
profit and loss
At the
commencement
of the period (109,069.62) (38,713.28) (14,365.28) (5,568.28) (631.27) 10,361.56
(Loss) / Profit
for the period,
as per Statement
of profit and
loss (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37
Appropriations
Transfer to
general reserve - - - - - (11,500.00)
Proposed
dividend - - - - - (1,153.15)
Dividend tax - - - - - (196.05)
(136,662.77) (109,069.62) (38,713.28) (14,365.28) (5,568.28) (631.27)
Total (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)65502.1
F-206
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-
current assets of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
A
Non-current
investments
I Investment in
equity instruments
Subsidiary
companies (non-
trade, unquoted
and at cost)
A Reliance
MediaWorks
Theatres Limited 5.00 5.00 5.00 5.00 5.00 5.00
B Reliance
MediaWorks Films
(UK) Limited 8.47 8.47 8.47 8.47 8.47 8.47
C Reliance
MediaWorks (USA)
Inc. 9.21 9.21 9.21 9.21 9.21 9.21
D Reliance
MediaWorks
(Netherlands) B.V. 10.40 10.40 10.40 10.40 10.40 10.40
E Reliance
MediaWorks
(Mauritius) Limited 0.01 0.01 0.01 0.01 0.01 0.01
F Big Synergy Media
Limited 641.55 641.55 641.55 641.55 641.55 641.55
G Rave Entertainment
and Food (Nepal)
Private Limited - - 60.00 60.00 60.00 -
H Sri Ramakrishna
Theatres Limited
(refer note 9 of II of
D of Annexure IV) - - 442.10 442.10 442.10 -
I Reliance
MediaWorks
Entertainment
Services Limited 2,005.00 2,005.00 2,005.00 5.00 - -
J Reliance Lowry
Digital Imaging
Services Inc. (This
investment constitute
10% of the
outstanding shares
and balance 90% of
the
outstanding shares
are held by Reliance
MediaWorks (USA),
Inc., a wholly owned
subsidiary of the
Company) 3,000.00 3,000.00 3,000.00 3,000.00 - -
F-207
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-
current assets of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
K Reliance Media
Consultant Private
Limited 1.00 1.00 - - - -
L Rave Entertainment
Private Limited
(refer note 2 of V of
D of Annexure IV
for merger of the
subsidiary with the
Company) - - - - - 515.30
M Reliance Broadcast
Networks Limited
(refer note1 of V of
D of Annexure IV
for Scheme of
Arrangement for
demerger of Radio
business) - - - - - 1,010.00
N Adlabs Multiplex
Limited (refer note 2
of V of D of
Annexure IV for
merger of the
subsidiary with the
Company) - - - - - 1,753.50
O Adlabs Multiplex
and Theatres
Limited (refer note 2
of V of D of
Annexure IV for
merger of the
subsidiary with the
Company) - - - - - 5.00
P Reliance
MediaVentures
Private Limited 1.00 1.00 - - - -
Joint Ventures
(non-trade,
unquoted at cost)
A Cineplex Private
Limited (refer note 9
of II of D of
Annexure IV) - - 25.00 25.00 25.00 25.00
B Divya Shakti
Marketing Private
Limited 329.00 329.00 329.00 329.00 329.00 329.00
C Swanston Multiplex
Cinemas Private
Limited (refer note 3
of II of D of
Annexure IV) 825.06 825.06 700.06 700.06 700.06 700.06
Less: Provision for
diminution in value
of long-term
investments (825.06) (825.06) - - - -
F-208
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-
current assets of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
Others (non-trade,
unquoted at cost)
A Sultan Production
Private Limited
(refer note 6 of III
of D of Annexure
IV) - - - 1.00 1.00 1.00
6,010.64 6,010.64 7,235.80 5,236.80 2,231.80 5,013.50
II Investment in
partnership firm
(non-trade,
unquoted at cost)
A HPE / Adlabs LP
(Investment in
limited
partnership) (2009
and 2010 : `
2,366.80 lakhs
towards recovery of
principal pursuant to
a contract and 2010:
` 241.70 lakhs has
been repaid by the
Partnership firm as
principal) 1,999.30 1,999.30 1,999.30 1,999.30 2,241.00 4,607.75
Less: Provision for
diminution in value
of long term
investments (refer
note 2 of V of D of
Annexure IV) (1,999.30) (1,999.30) (1,999.30) (1,999.30) (2,241.00) -
- - - - - 4,607.75
III Investment in
preference shares
(non-trade,
unquoted at cost)
A Tree of Knowledge
DOT Com Private
Limited.# - - - - 1,200.00 1,200.00
Less: Provision for
diminution in value
of long term
investments (refer
note 2 of V of D of
Annexure IV) - - - - (1,200.00) -
Reliance
MediaWorks
Entertainment
Services Limited 12,000.00 12,000.00 - - - -
# These shares have
been forfeited during
Period 2010 12,000.00 12,000.00 - - - 1,200.00
F-209
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-
current assets of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
IV
Investment in
Government
securities (trade,
unquoted and at
cost)
Government
securities
National savings
certificates 30.30 30.30 32.50 112.60 102.70 98.20
(pledged with State
government
authorities) 30.30 30.30 32.50 112.60 102.70 98.20
Total 18,040.94 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45
Aggregate value of
unquoted
investments
20,865.30
20,865.30
9,267.60
7,348.70
5,775.50
10,919.45
Aggregate provision
for diminution in
value of investments 2,824.36 2,824.36 1,999.30 1,999.30 3,441.00 -
B Deferred tax asset
Arising on account
of timing difference
in:
Provision for leave
encashment and
gratuity 187.70 193.10 272.80 127.90 126.40 207.30
Others* 5,266.00 3,246.90 547.50 79.30 583.30 186.10
Unabsorbed
depreciation
allowance and
carried forward
business loss * - - 3,108.90 2,215.00 1,093.90 1,894.30
5,453.70 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70
Deferred tax
liability
Arising on account
of timing difference
in:
Depreciation/
amortisation 5,453.70 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70
5,453.70 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70
Net deferred tax
assets / liabilities - - - - - -
* Restricted to the
extent of deferred
tax liability due to
absence of virtual
certainty
C Long-term loans
and advances
- Unsecured,
considered good
F-210
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-
current assets of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
I Capital advances 601.50 641.10 1,483.80 2,577.50 1,776.90 9,613.49
II Security deposits 12,810.90 13,169.10 16,053.70 16,354.50 16,116.50 14,559.40
III
Capital advance to
related party 98.60 98.60 - - - -
IV Loans to others 96.90 271.90 206.20 266.11 320.00 385.30
V Advance tax, tax
deducted at source,
advance fringe
benefit tax (net of
provision for tax
Period March 2013 -
` 594.50, Period
2012 - ` 594.50,
Period 2011 - `
594.50, Period 2010
– ` 594.10, Period
2009 4,392.76,
Period 2008 - `
4,097.08) 2,119.70 1,904.20 3,647.00 5,319.80 4,171.14 3,354.42
VI Advance towards
investment (Refer
Annexure XIII) 5,000.00 5,000.00 5,000.00 - - -
VII Others* 1,009.70 1,514.10 935.00 1,130.95 1,485.00 1,044.52
21,737.30 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13
*Prepaid expenses
and entertainment
tax paid under
protest
D Other non-current
assets
I
Interest accrued but
not due 31.70 22.20 49.00 52.50 49.10 33.44
II Gratuity - - 9.80 - - -
III
Balance with bank -
Fixed deposit
accounts with
maturity greater than
twelve months - 8.40 - - - -
IV
Balance with bank -
Margin money
deposit* 552.20 31.40 231.50 224.92 10.31 10.31
583.90 62.00 290.30 277.42 59.41 43.75
* Margin money
deposits are under
bank lien for
guarantees given by
the Company
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)
Notes:
F-211
Annexure VII
Reliance MediaWorks Limited
Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-
current assets of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
1. Amounts due from parties related to the issuer Company, has been disclosed in Annexure XVIII as part of
related party disclosures.
2. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose in the
offer document whether any of the receivable are related to directors or promoters or the issuer in any way. In
absence of clarification on “related to the directors or promoters”, Company has disclosed amounts due from
relatives of directors as defined in Schedule IA of the Companies Act, 1956 and in case of promoters, amount
due from “Promoter Group” and “Group Companies” as defined in SEBI ICDR Regulation. The List of persons
/ entities classified as “Promoter Group” and “Group Companies” has been determined by the Group and relied
upon by the Auditors.
3. Refer note 2 of V of D of Annexure IV, note 1 of VI of D of Annexure IV and note 3 of VI of D of Annexure
IV for advances written off pursuant to Schemes.
F-212
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Current investments
I Investment in
mutual fund (non-
trade, unquoted and
at lower of cost and
fair value)
Investment in mutual
funds - - - 7,902.40 - 13,500.30
- - - 7,902.40 - 13,500.30
Market value of
current investment - - - 7,906.70 - 13,500.30
Inventories
(valued at lower cost
and net realisable
value) (refer note 6 of
A of Annexure IV)
I Stores and spares 403.50 312.70 357.30 293.90 283.30 44.80
II Chemical stock 18.80 36.50 20.70 16.50 33.50 17.20
III Food and beverages 310.30 279.10 303.50 238.60 146.90 53.30
IV Raw films 30.20 30.20 43.00 47.80 54.60 58.80
V Content not aired - - - - - 17.70
762.80 658.50 724.50 596.80 518.30 191.80
Trade receivables
Unsecured,
considered good;
I Debts outstanding for
a period exceeding
six months from the
date they are due for
payments 12,528.70 12,916.10
14,758.90
13,159.70
15,216.30 1,756.20
Other debts 3,587.70 3,263.30 3,983.00 8,959.40 4,986.10 9,883.90
16,116.40 16,179.40
18,741.90
22,119.10
20,202.40
11,640.10
Unsecured,
considered
doubtful;
II Debts outstanding for
a period exceeding
six months from the
date they are due for
payments 2,830.40 2,240.40 681.20 1.90 - 206.60
Other debts - - - - - 93.80
2,830.40 2,240.40 681.20 1.90 - 300.40
Less: Provision for
doubtful debts 2,830.40 2,240.40 681.20 1.90 - 300.40
- - - - - -
16,116.40 16,179.40 20,202.40
F-213
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
18,741.90 22,119.10 11,640.10
D Cash and bank
balances
Cash and cash
equivalents
I Balances with banks
- in current
accounts 2,876.30 1,364.40 3,034.50 1,368.30 1,129.00 1,911.60
- in fixed deposit
account with original
maturity less than
three months 1,050.00 - - - 186.25 -
II Cash on hand 368.10 547.10 166.60 85.20 55.80 77.50
4,294.40 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10
III Other bank
balances
- in dividend
accounts 10.50 10.50 12.20 13.80 14.60 8.20
- in fixed deposit
account maturing
with in a year 691.00 1.60 10.70 - - -
- in margin money
deposit maturing
with in a year* 356.00 4,878.40 5,537.80 3,047.87 2,672.28 5,145.99
1,057.50 4,890.50 5,560.70 3,061.67 2,686.88 5,154.19
5,351.90 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29
*Margin money
deposits are under
bank lien for
guarantees given by
the Company
E Short-term loans
and advances
- Unsecured,
considered good
I Amount due from
Reliance Broadcast
Networks Limited
pursuant to demerger
of Radio business - - 6,095.00 26,095.00 26,095.00 -
II Loans and advances
to related parties
- subsidiaries 59,923.60 51,155.40 49,844.90 35,877.00 17,729.80 7,622.80
- joint ventures 192.60 192.60 391.10 399.20 565.70 706.20
- Advance towards
share application
money in a Joint
venture - Swanston
Multiplex Cinemas
Private Limited - - 125.00 125.00 - -
F-214
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
III Loans to others 756.00 698.90 1,285.80 1,136.69 528.40 13,566.90 IV Deposits 77.20 29.40 - - - -
V
Others * 2,794.10 3,332.80 4,071.80 6,837.60 5,908.30
9,603.78
63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
- Unsecured,
considered doubtful
I Loans and advances
to related parties -
Subsidiaries 6,921.90 6,921.90 - - - -
Loans to others 393.50 393.50 - - - -
II Others* 1,081.50 1,081.50 978.90 120.00 - 65.80
Less: Provision for
doubtful advances 8,396.90 8,396.90 978.90 120.00 - 65.80
- - - - - -
63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68
*includes service tax
input credit, value
added tax input
credit, prepaid
expenses, employee
advance, advances to
vendors etc.
F Other current assets
I Unbilled revenue 420.00 561.10
177.30
217.00
125.10 -
II Interest accrued and
due from Reliance
Broadcast Network
Limited - 63.80
3,930.20
2,481.60 - -
III Interest accrued but
not due 4.20 32.70
157.70 66.87 89.58
783.86
IV Other receivables for
sale of investment /
Right to investment - 60.00 - -
4,066.80
3,127.30
424.20 717.60 4,265.20 2,765.47 4,281.48 3,911.16
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Notes:
1. The list of parties related to directors / promoters (as per SEBI ICDR Regulations, 2009) are as follows:
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
Trade receivables
Reliance Capital Limited 26.46 24.98 37.40 43.42 1.63 -
Reliance Capital Asset
Management Limited
36.01
28.80 32.29 4.38 0.26 -
Gini & Jony Apparel Private
Limited
-
- 1.23 0.03 0.56 -
F-215
1
0
Annexure VIII
Reliance MediaWorks Limited
Statement of current assets of the Company
(` in lakhs)
As at
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March 31,
2009
March
31, 2008
TV Today Network Limited - - 0.09 - - -
Reliance Equity Advisors
(India) Limited
-
0.31 - - - -
Reliance Broadcast Network
Limited
1,476.06
1,513.41 1,376.70 1,337.90 - -
Reliance Life Insurance
Company Limited
-
1.10 0.92 - - -
Loans, advances and other
receivables
Reliance Broadcast Network
Limited
-
63.82 10,025.20 28,749.80 26,095.00 -
Reliance Securities Limited
-
- - - -
3,126.90
Reliance General Insurance
Company Limited
-
0.31 - - - -
Reliance Life Insurance
Company Limited
9.00
9.00 9.00 9.00 20.00
-
Total 1,547.53 1,641.73 11,482.83 30,144.53 26,117.45 3,126.90
2. Above data excludes amounts due from parties related to the issuer Company, which has been disclosed in
Annexure XVIII as part of related party disclosures.
3. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose in the
offer document whether any of the receivable are related to directors or promoters or the issuer in any way. In
absence of clarification on “related to the directors or promoters”, Company has disclosed amounts due from
relatives of directors as defined in Schedule IA of the Companies Act, 1956 and in case of promoters, amount
due from “Promoter Group” and “Group Companies” as defined in SEBI ICDR Regulation. The List of persons
/ entities classified as “Promoter Group” and “Group Companies” has been determined by the Group and relied
upon by the Auditors.
4. Refer note 2 of V of D of Annexure IV, note 1 of VI of D of Annexure IV and note 3 of VI of D of Annexure
IV for receivables and advances written off pursuant to Schemes.
F-216
Annexure IX
Reliance MediaWorks Limited
10
Statement of non-current liabilities of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March 31,
2010
March 31,
2009
March 31,
2008
A Long-term
borrowings
I Non convertible
debentures
(secured) 25,000.00 35,000.00 - - - -
II Non Convertible
Debentures
(Unsecured) 550.00 1,650.00 - - - -
III Term loans
- From banks
(secured) 9,587.50 17,262.50
32,370.80 36,416.70 40,000.00 37,500.00
- From banks
(unsecured) - - 7,500.00 - - -
- Others
(secured) - 17,500.00 - - - 2,500.00
IV Zero Coupon
Foreign Currency
Convertible
Bonds ('FCCB') - - - - 14,230.00 13,099.90
35,137.50 71,412.50
39,870.80 36,416.70 54,230.00 53,099.90
B Other long-term
liabilities
I Lease rent
liability as per
AS 19 - "Leases" 3,770.50 3,379.60 2,449.05 1,265.86 787.30 342.98
II Security deposit 144.70 136.30 123.14 49.30 51.80 -
III Advance from
related party 48.30 120.80 362.50 507.50 - -
3,963.50 3,636.70 2,934.69 1,822.66 839.10 342.98
C Long-term
provisions
I Leave
encashment
373.20
472.80 695.90 344.50 342.50 162.56
II Gratuity 120.80 28.30 - - - 35.89
III Premium on
redemption of
FCCB - - - - 3,084.90 2,839.89
494.00 501.10 695.90 344.50 3,427.40 3,038.34
The above statement should be read with significant accounting policies and notes to summary statements of the
Company, as restated (Annexure IV)
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F-217
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities of the Company
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
A Short-term
borrowings
I Term loans
From banks
(secured) - - - - 10,000.00 -
From banks
(unsecured) - - 23,500.00 40,000.00 10,000.00 -
II Loans
repayable on
demand
(secured)
From banks
- Cash credit 1,175.90 554.60 2,500.00 352.60 37.20 293.60
III Loans and
advance from
related parties
(unsecured) 125.00 550.00 245.00 345.00 245.00 -
IV Other loans
and advances
a From banks
- Buyers credit
(unsecured) - - 318.00 1,392.60 926.80 -
- Buyers credit
(secured) 2,509.70 3,974.50 2,966.00 - - -
b Commercial
papers
(unsecured) - - 57,842.40 72,683.00 49,024.50 38,688.70
d Inter-corporate
deposit
(unsecured) 140,903.40 101,345.40 15,000.00 - - 2,046.30
144,714.00 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60
Above
includes
Borrowings
from
Promoters
113,308.43 98,395.50 15,245.00 345.00 245.00 2,046.30
(as per SEBI
ICDR
Regulations,
2009) / Group
companies /
Subsidiaries /
Material
Associate
companies
F-218
Annexure X
Reliance MediaWorks Limited
Statement of current liabilities of the Company
(` in lakhs)
As at
Particulars
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010
March
31, 2009
March 31,
2008
B Other current
liabilities
I Current
maturities of
long-term
debts 42,550.00 23,383.40 49,045.80 32,307.60 - 0.40
II Interest
accrued and
due on
borrowings 7,715.00 2,324.30 28.80 - - -
III Interest
accrued but not
due on
borrowings 351.10 2,222.60 18.30 20.10 30.00 -
IV Unclaimed
dividend 10.50 10.50 12.20 13.80 14.60 8.20
V Advance
received from
customers 1,472.90 1,258.70 1,527.00 1,130.90 731.80 4,936.40
VI Dues for
capital
expenditure 1,769.40 2,133.80 3,252.00 3,154.00 2,136.50 399.43
VII Temporary
book overdraft
460.70 924.90 - - - -
VIII Others * 3,136.60 1,967.20 1,875.48 1,592.02 1,648.33 2,602.03
*including
payable related
to employee,
lease rent,
expense
payable and
statutory dues. 57,466.20 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46
C Short-term
provisions
I Proposed
dividend - - - - - 1,153.15
II Tax on
proposed
dividend - - - - - 196.05
III Gratuity - - - - - 104.24
IV Leave
encashment 84.60 94.00 125.40 31.80 29.30 347.21
84.60 94.00 125.40 31.80 29.30 1,800.65
The above statement should be read with significant accounting policies and notes to summary
statements of the Company, as restated (Annexure IV)
Note: Disclosure as per SEBI ICDR Regulations, 2009 are as follows
Particulars of
Lenders
Principal
Amount
(` in lakhs)
Period when
amount is
outstanding
Interest Rate Repayment
Schedule
Reliance
MediaWorks Theatres
245.00
Period 2011 and
2009
7.00% Repayable on
demand
F-219
Particulars of
Lenders
Principal
Amount
(` in lakhs)
Period when
amount is
outstanding
Interest Rate Repayment
Schedule
Limited
Reliance
MediaWorks Theatres
Limited
345.00
Period 2010 7.00% Repayable on
demand
Reliance
MediaWorks Theatres
Limited
550.00 Period 2012 9.50% to 10.25% Repayable on
demand
Reliance
MediaWorks Theatres
Limited
125.00 Period March
2013
9.50% to 10.25% Repayable on
demand
Reliance Capital
Limited
2,046.30
Period 2008 12.00% Repayable on
demand
Reliance Capital
Limited
15,000.00
Period 2011 12.00% One year from
date of the loan
Reliance Capital
Limited
97,845.50 Period 2012 13.00% One year from
date of the loan
Reliance Capital
Limited
113,183.43 Period March
2013
13.00% One year from
date of the loan
Note:
1. Also refer Annexure XV for principal terms and conditions for borrowings
F-220
Annexure XI
Reliance MediaWorks Limited
Statement of revenue of the Company
(` in lakhs)
For the Period
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Theatrical exhibition
Sale of tickets 15,149.60 47,893.80 26,272.30 22,401.80 18,147.00 8,378.20
Less: Entertainment tax 3,068.00 8,965.80 3,919.10 2,890.80 1,925.80 1,023.50
12,081.60 38,928.00 22,353.20 19,511.00 16,221.20 7,354.70
Advertisements /
sponsorship revenue 1,698.80 2,980.10 2,117.00 3,819.30 1,245.00 1,281.00
Facilities provided at
multiplex 795.60 2,203.40 754.70 578.40 525.60 303.30
Food and beverages 4,102.40 13,222.70 7,122.80 5,139.89 3,867.94 1,434.91
Others 589.90 1,710.50 1,032.50 1,590.40 328.40 -
19,268.30 59,044.70 33,380.20 30,638.99 22,188.14 10,373.91
Film production services
Processing / printing of
films 2,574.80 11,355.30 10,606.10 7,106.40 6,999.60 3,666.20
Equipment / facility rental
income 1,346.50 3,948.80 2,066.60 1,839.40 612.40 265.30
Trading income 121.60 1,304.30 1,926.30 2,229.30 3,077.40 2,410.20
Others 42.70 150.90 13.60 45.90 67.40 -
4,085.60 16,759.30 14,612.60 11,221.00 10,756.80 6,341.70
Film / content
production, distribution
and related services 287.30 325.30 676.40 3,692.00 15,289.40 10,179.10
Total 23,641.20 76,129.30 48,669.20 45,551.99 48,234.34 26,894.71
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
F-221
Annexure XII
Reliance MediaWorks Limited
Statement of other income of the Company
(` in lakhs)
For the period
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Recurring
Dividend income from :
- Joint ventures - - - - 75.00 55.00
- Subsidiaries - 200.40 - 85.30 - -
- Other non-current
investments - - - - - 7.20
- Current investments - - - - 130.40 86.60
- 200.40 - 85.30 205.40 148.80
Interest income from:
- Bank 86.20 613.00 303.60 253.50 344.60 470.70
- Loans, advance and other
deposits 36.40 467.10 469.60 152.90 372.10 360.80
122.60 1,080.10 773.20 406.40 716.70 831.50
Gain on sale of current
investments 57.50 39.50 423.60 274.40 269.20 9.10
Bad debts recovered /
provisions written back 19.50 79.50 814.00 1,080.90 - -
Sundry balances written
back (net) - - 306.30 - - -
Foreign exchange gain (net) 124.70 2,081.90 349.10 - 1,203.50 -
Miscellaneous income 60.60 77.60 250.90 13.20 156.20 758.20
Non recurring
Gain on derivative contracts
(net) - - - - - 977.40
Gain on sale of non-current
investment / rights therein - 766.50 - - 1,700.00 2,660.30
Consultation fees - - - - 2,130.50 -
Proceeds from key man
insurance policy - - - - 266.40 -
Share of advertisement
income - - - 1,213.00 - -
Profit on sale of assets /
discarding of assets (net) - - 2,701.10 - - -
384.90 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30
The above statement should be read together with significant accounting policies and notes to summary
statements, as restated (Annexure IV).
Note
4. The classification of other income by the management into recurring and non-recurring is based on the
current operations and business activities of the Company.
5. Other income is related / incidental to the business activities of the Company.
6. In accordance with the accounting treatment followed by the Company, exchange fluctuation gain /
loss and profit / loss on sale of assets is disclosed net. Gross amounts in respect thereof are not readily
determinable. Hence, net gain where applicable has been considered for the purpose of above
disclosure.
F-222
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
A Central excise
Disputed central excise
demand pending with
the Central Excise and
Service Tax Appellate
Tribunal 2,555.90 2,555.90 1,918.40 1,715.30 1,308.80 1,110.90
B Value added tax
Disputed value added
tax demand pending for
various states 522.80 38.40 - - - -
C Service tax
Disputed Service Tax
demand pending with
the Central Excise and
Service Tax Appellate
Tribunal 204.90 204.90 - - - -
D Income tax
i) Disputed liability in
respect tax deduction at
source, matter is
pending with
Commissioner of
Income tax (Appeals) 1,017.10 1,017.10 1,017.10 - - -
ii) Disputed tax liability in
respect of AY 2008-09
for Rave Entertainment
Private Limited
(„REPL‟), REPL was
wholly owned
subsidiary of the
Company and merged
with it with effect from
April 1, 2008. 1,401.20 1,401.20 1,401.20 - - -
Department‟s appeal
against order of
Commissioner of
Income Tax (Appeals)
is pending with Income
Tax Appellant Tribunal
(ITAT). In Period 2011
the same was pending
with Commissioner of
Income Tax (Appeals).
F-223
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
Further Company has
received demand in
respect of REPL matter
for assessment year
2009-10, appeal is
pending with
Commissioner of
Income tax (Appeals)
- - - - - 1,787.20
E Entertainment tax
i) In respect of a
Multiplex, the
Company has received
a demand for
entertainment tax
pertaining to the period
wherein the said
multiplex was availing
an exemption from
entertainment tax. The
Company has filed an
appeal against the said
demand. 71.50 - - - - -
ii) In respect of certain
multiplexes, the
Company has made an
application for availing
exemption under the
relevant Act
retrospectively from the
date of commencement
of the operations of the
said multiplex and the
application is pending
approval
- 300.70 219.40 340.00 391.30 280.30
iii) In respect of certain
multiplexes, the
Company is in dispute
with the entertainment
tax authorities
regarding eligibility for
availing exemption
under the relevant Act. 570.60 509.60 558.80 451.70 293.40 219.40
iv) In respect of demand
orders received for
payments of
entertainment tax
collected and not paid
to the authorities, the
Company has made an
appeal against said
demand orders as it
believes that the same is
not payable, being
exemption from - - 113.20 107.50 62.90 56.90
F-224
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
payment available to it
v) The Company shall be
liable to pay the
entertainment tax in the
event that the
multiplexes do not
continue operations for
a period of 10 years
from the respective
dates from which they
commenced their
operations 13,470.30 12,845.00 11,125.20 10,614.90 5,747.50 4,404.40
F The Company has
engaged the services of
a Contractor for the
purpose of deploying
personnel at its
cinemas. During the
tenure of the contract,
the Company has paid
the Contractor, amounts
payable towards
employers contribution
to provident fund (PF)
amounting to ` 294.20
lakhs on a regular basis.
The Company has
learnt that the
Contractor has failed to
deposit appropriate
amounts for employee
and employer
contributions
amounting to
approximately ` 588.40
lakhs with the PF
authorities and the
Company apprehends
that some portion of the
aforesaid amount which
was supposed to be
deposited in the
individual accounts of
the Personnel by the
Contractor may have
actually been mis-
appropriated by the
Contractor. The
Company has filed a
criminal complaint
against the Contractor
and the matter is
F-225
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
currently under
investigation. The
Company has not
received any claims in
this regard.
G Claims against
Company not
acknowledged as debts 8,152.10 7,859.80 198.60 74.00 74.00 74.00
H Guarantees
Guarantee given to
Ministry of information
broadcasting of Radio
license - - - - 2,302.00 -
Guarantees given to
bank and others for
loans / credit facilities
given to Subsidiary
Companies 11,325.90 14,489.80 10,518.00 17,689.60 11,258.40 -
Guarantees given to
bank for loans / credit
facilities given to
Others - 183.00 - - - -
Guarantee given to a
Service providers in
respect of Subsidiary
Companies 5,118.00 4,944.40 4,254.00 4,218.10 33.70 -
I Value added tax:
Value added tax: The
Maharashtra Value
Added Tax Act, 2002
lists the Scheduled
entry, interalia, “Copy
right” w.e.f. 1 April
2005. Pursuant to this
enactment / scheduled
entry, the entertainment
industry has made a
written representation
to the Finance Minister,
Maharashtra for
deletion of the
scheduled entry from
the Act. Similar
representation was
made by the industry in
some other states, as a
result of which the Act
was modified to delete
this scheduled entry.
The Company is
awaiting a positive
response from the
Ministry of Finance in
F-226
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
respect of the assurance
given. Accordingly, no
provision (amount not
currently ascertainable)
has been made in the
books of accounts.
With effect from the
May 1, 2011 the
Maharashtra Value
Added Tax Act, 2002
was amended to exempt
tax on Copyrights for
distribution and
exhibition of
cinematographic films
in theatres and cinema
halls.
J Capital Commitment
i) Estimated amount of
contract remaining to
be executed on capital
account and not
provided for net of
advances (for fixed
assets) 4,389.40 4,512.20 4,646.74 11,858.30 5,661.80 13,409.70
ii) Estimated amount of
contract remaining to
be executed on capital
account and not
provided for net of
advances (for
investments) 1,200.00 1,200.00 1,200.00 - - -
iii) Amount of uncalled on
150,000 partly paid
preference shares of
Tree of Knowledge
DOT COM Private
Limited - - - 300.00 300.00
The above statement should be read with significant accounting policies and notes to summary statements, as
restated (Annexure IV)
Note :-
a) The Company is a party to various legal proceedings in the normal course of business and does not expect
the outcome of these proceedings to have any adverse effect on its financial conditions, results of operations
or cash flows.
b) The amounts are excluding penalty and interest if any that would be levied at the time of final conclusion.
Other Commitment :-
a) Company has issued letter of financial support to some of its wholly owned foreign subsidiaries.
b) In view of the loss during the period, the Company has not created Debenture Redemption Reserve in
terms of Section 117 (C) of the Companies Act, 1956. The Company shall create such reserve out of profit,
if any in future years.
c) Preference shares shall be redeemed at the end of 20 years from the date of allotment. Each Preference
shares shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a.
(till date of redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend,
F-227
Annexure XIII
Reliance MediaWorks Limited
Statement of contingent liabilities and commitments of the Company
(` in lakhs)
As at
Particulars
March
31, 2013
September
30, 2012
March
31, 2011
March
31, 2010
March
31, 2009
March 31,
2008
if declared during the tenure. However, the premium on redemption will be paid only to the original
subscribers or to the transferees if the transfers have been previously approved by the Company. Yield on
preference shares of ` 1,471.00 lakhs (cumulative till date ` 2,958.10 lakhs) for the current period will be
paid as premium at the time of redemption.
Annexure XIV
Reliance MediaWorks Limited
Summary of accounting ratios of the Company
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
1 Net (loss) / profit
after tax, as
restated (27,593.15) (70,356.34)
(24,348.00) (8,797.00) (4,937.01) 1,856.37
2 Weighted average
number of equity
shares
outstanding
during the Period
for basic earnings
per share 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 42,103,935
3 Add - equity share
issuable on
conversion of
FCCB (Refer note
(c) of B of
Annexure IV) - - 1,694,699 2,061,884 2,061,884 6,084,140
4 Weighted average
number of equity
share outstanding
during the Period
for dilutive
earnings per share
(Refer (c) of B of
of Annexure IV) 46,126,170 46,126,170 47,820,869 48,188,054 48,188,054 48,188,075
5 Number of equity
shares
outstanding at the
end of the Period 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170
6 Paid up value of
each equity share 5.00 5.00 5.00 5.00 5.00 5.00
7 Total paid capital 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
F-228
Annexure XIV
Reliance MediaWorks Limited
Summary of accounting ratios of the Company
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
– equity
8 Reserves and
surplus (net of
deficit in
statement of profit
and loss)
(excluding
revaluation
reserve) (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77
9 Net worth
attributable to
equity
shareholders
(7+8) (47,162.16) (20,599.03) 16,806.16 41,470.36 51,109.66 66,641.08
Accounting
ratios
a) Earnings per
share
Basic earnings per
share (59.82) (152.53) (52.79) (19.07) (10.70) 4.41
Diluted earnings
per share (59.82) (152.53) (52.79) (19.07) (10.70) 3.85
b) Return of net
worth NA NA (144.88)% (21.21)% (9.66)% 2.79%
c) Net assets value
per share (102.25) (44.66) 36.44 89.91 110.80 144.48
Note
1 The ratios have been
computed as under :-
Basic and diluted
earning per share
Net profit / (loss) after tax, as restated, excluding
extraordinary items attributable to equity shareholders
Weighted average number of equity share outstanding
during the period
Return on Net worth %
Net profit / (loss) after tax, as restated, excluding
extraordinary items attributable to equity shareholders
Net worth, as restated, excluding revaluation reserve at
the end of the period
Net assets value per
share (`)
Net worth, as restated, excluding revaluation reserve at
the end of the period
Number of equity share outstanding at the end of the
period
F-229
Annexure XIV
Reliance MediaWorks Limited
Summary of accounting ratios of the Company
(` in lakhs)
Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
2 Restated net profit as appearing in the restated statement of profit and loss and net worth as
appearing in summary statement of assets and liabilities, as restated, has been considered for the
purpose of computing the above ratios.
3 Calculation of ratios post issue has not been considered.
4 Earnings per share calculations are done in accordance with Accounting Standard 20 "Earning
Per Share", notified in the Companies (Accounting Standards) Rules, 2006.
5 The above statement should be read together with significant accounting policies and notes to
summary statements, as restated (Annexure IV)
6 Dilutive EPS has not been presented in Period 2009, Period 2010 and Period 2011, since it is
anti dilutive.
7 Return on net worth for the Period March 2013 and Period 2012 cannot be computed as net
worth as on March 31, 2013 and September 30, 2012 is negative.
8 Dividend on preference capital is non-cumulative and will be paid as premium at the time of
redemption and shall be adjusted against securities premium reserve. Accordingly, the same is
not adjusted for the purpose of calculating the above ratios. Yield is ` 1,471.00 lakhs for
Period March 2013 and ` 1,487.10 lakhs for Period 2012.
F-230
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
N
o
Particulars As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010 March
31, 2009
March
31, 2008
1. Commercial Papers / Short Term Loans from Banks (unsecured)
A Templeton
Mutual Fund
(Refer note 9 of
Annexure XV) - - 21,984.79 - - -
B ICICI Prudential
Fund (Refer note
9 of Annexure
XV)
- - 9,943.51 - - -
C Templeton
Mutual Fund
(Refer note 9 of
Annexure XV) - - 9,422.16 - - -
D Yes Bank
Limited (Refer
note 9 of
Annexure XV) - - 11,619.63 - - -
E BNP Paribas
(Refer note 9 of
Annexure XV) - - 4,872.31 - - -
F LIC MF Savings
Plus Fund - - - 7,450.18 - -
G LIC MF Income
Plus - - - 9,832.06 - -
H LIC MF Floating
Rate - - - 983.21 - -
I LIC MF Savings
Plus Fund
- - - 9,808.90 - -
J J M Financial
Mutual Fund
- - - 2,477.40 - -
K J M Financial
Mutual Fund - - - 1,486.43 - -
L LIC MF Income
Plus - - - 9,599.87 - -
M LIC MF Savings
Plus Fund - - - 9,599.87 - -
N IFCI Limited - - - 2,466.68 - -
O LIC MF Floating
Rate - - - 4,744.82 - -
P LIC MF Savings
Plus Fund - - - 4,744.53 - -
Q LIC MF Income
Plus - - - 9,489.05 - -
R Yes Bank
Limited - - - - 14,886.41 -
S IDBI Limited - - - - 2,457.18 -
F-231
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
N
o
Particulars As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010 March
31, 2009
March
31, 2008
T SIDBI - - - - 491.44 -
U Canara Bank - - - - 2,456.18 -
V IFCI Limited - - - - 4,893.69 -
W LIC MF Floating
Rate Fund - - - - 4,767.92 -
X LIC MF Income
Plus Fund - - - - 4,767.92 -
Y LIC MF Liquid
Fund - - - - 4,767.92 -
Z LIC MF Savings
Plus Fund
- - - - 4,767.92 -
AA LIC MF Special
unit scheme
Special Unit
Scheme
- - - - 4,767.92 -
AB UTI Mutual
Funds - liquid
cash plan - - - - - 1,973.16
AC ABN Amro
Money Plus Fund - - - - - 4,932.89
AD Lotus India
Liquid Fund - - - - - 1,973.16
AE Birla Sun Life
Interval Income
Fund Quarterly
Plan Series II - - - - -
5,297.62
AF Kotak Quarterly
Interval Plan -
Series 66 - - - - - 2,408.01
AG Allahabad Bank - - - - - 1,965.13
AH Birla Cash Plus - - - - - 4,421.54
AI United Bank Of
India - - - - - 3,438.97
AJ UTI Spread Fund - - - - - 2,456.41
AK Saraswat Co-op
Bank Ltd. - - - - - 982.42
AL SBI Life
Insurance Co.
Ltd. - - - - - 2,456.04
AM Tata MF - Tata
Fixed Horizon
Fund - - - - - 3,928.19
AN ABN Amro Flexi
Short Term Plan -
Series B - - - - - 2,455.16
F-232
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
N
o
Particulars As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010 March
31, 2009
March
31, 2008
AO Kotak Mahindra
Flexi Debt
Scheme - - - - - -
AP Birla Cash Plus - - - - - -
AQ Allahabad Bank - - - 10,000.00 10,000.00 -
AR Syndicate Bank - - 10,000.00 10,000.00 - -
AS Union Bank of
India -
-
10,000.00 10,000.00
- -
AT Bank of Baroda - - - 10,000.00 - -
AU Yes Bank
Limited - - 3,500.00 -
- -
Sub total - - 81,342.40 112,683.00 59,024.50 38,688.70
2. Unsecured Long Term Loan from Bank / others (including amounts due within the next 1 year)
A Canara Bank - - 20,000.00 - - -
- B DBS Bank Limited
(Refer note 9 of
Annexure XV) - - 15,000.00 - - -
C Non-convertible
debentures 2,750.00 3,850.00 - - - -
Sub total 2,750.00 3,850.00 35,000.00 - - -
3. Secured Short Term Loan From Bank
A Syndicate Bank
(Refer note 6 of
Annexure XV) - - - - 10,000.00 -
Sub total - - - - 10,000.00 -
4. Secured Long Term Loan From Bank / Other Long Term Loan (including amounts due within
the next 1 year)
A Allahabad Bank
(Refer note 1 of
Annexure XV)*
* - 1,666.67 3,333.33 5,000.00 5,000.00 -
B Exim Bank (Refer
note 1 of Annexure
XV) * - 2,333.34 4,666.68 7,000.00 7,000.00 -
C Jammu & Kashmir
Bank (Refer note 1
of Annexure XV) * - 2,333.34 4,666.68 7,000.00 7,000.00 -
D Syndicate Bank
(Refer note 1 of
Annexure XV) * - 2,333.34 4,666.68 7,000.00 7,000.00 -
E Union Bank of
India (Refer note 1
of Annexure XV) * - 2,000.00 4,000.00 6,000.00 6,000.00 -
F Vijaya Bank (Refer
note 1 of Annexure - 2,666.67 5,333.33 8,000.00 8,000.00 -
F-233
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
N
o
Particulars As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010 March
31, 2009
March
31, 2008
XV) *
G Rank Investments
Private Limited
(Refer note 1 of
Annexure XV) - - - - - 2,500.00
H Barclays Bank Plc
(Refer note 1 of
Annexure XV) - - - - - 37,500.00
I Syndicate Bank
(Refer note 6 of
Annexure XV)
- - 6,250.00 10,000.00 - -
J Syndicate Bank
(Refer note 1 of
Annexure XV)
8,437.50 10,312.50
15,000.00 - - -
K Union Bank of
India (Refer note 1
of Annexure XV) 4,000.00 4,800.00 6,000.00 3,500.00 - -
L Syndicate Bank
(Refer note 1 of
Annexure XV)
10,000.00
10,000.00 - - - -
M Non Convertible
Debentures (Refer
note 10 of
Annexure XV)
35,000.00 35,000.00 - - - -
N Indiabulls Financial
Service Limited
(Refer note 11 of
Annexure XV) 17,500.00 17,500.00 - - - -
Sub total 74,937.50 90,945.86 53,916.70 53,500.00 40,000.00 40,000.00
* - As per agreement dated June 28, 2008 for long term loan obtained from banks, the Company has to comply
with covenants with regards to financial parameters, as specified in the agreement. Based on Period 2009, 2010,
2011 and 2012 financials, the Company is not in compliance with the debt covenants.
5. Overdraft facilities / Car loan
A Cash credit - Bank
of Baroda (Refer
note 2, 4,6 and 12 of
Annexure XV) 530.61 554.63 540.53 352.60 37.20 293.60
B Cash credit – Axis
Bank (Refer note 5
and 12 of Annexure
XV) 645.33 - 1,959.47 - - -
C Car loan (Refer
note 3 of Annexure
XV) -
-
- - - 0.40
D Buyers credit (Refer
note 7 and 12 of
Annexure XV) 2,509.75
3,974.48
2,965.90 - - -
Sub Total 3,685.69 4,529.11 5,465.90 352.60 37.20 294.00
6. Others (Unsecured) (including amounts due within the next 1 year)
F-234
Annexure XV
Reliance MediaWorks Limited
Statement of principal terms and conditions of long-term borrowings and short-term borrowings
(` in lakhs)
S.
N
o
Particulars As at
March 31,
2013
September
30, 2012
March 31,
2011
March 31,
2010 March
31, 2009
March
31, 2008
A Zero Coupon
Foreign Currency
Convertible Bonds
(Refer note 8 of
Annexure XV)
-
-
- 15,224.30 14,230.00 13,099.90
B Inter corporate
deposits
141,028.43 101,895.43 15,245.00 345.00 245.00 2,046.30
C Buyers credit - - 318.00 1,392.60 926.80 -
Subtotal 141,028.43 101,895.43 15,563.00 16,961.90 15,401.80 15,146.20
Grand total 222,401.62 201,220.40 191,288.00 183,497.50 124,463.50 94,128.90
Period March 2013
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Union Bank of India
4,000.00
14.00% per annum ` 400 .00 - 20 equal
quarterly instalment
starting from March
31, 2012
Syndicate Bank
8,437.50
13.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from
September 14, 2011
Syndicate Bank
10,000.00
11.50% per annum ` 2,500.00 - 4 equal
quarterly instalment
starting from
September 14, 2013
Non Convertible Debentures
35,000.00
11.00% per annum
Coupon Series 1 - ` 10,000
lakhs – March 1, 2014
Series 2 - ` 12,500
lakhs – March 1, 2015
Series 3 - ` 12,500
lakhs – March 1, 2016
Non Convertible debentures
2,750.00
12.50% per annum All series of ` 550
lakhs
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December
10, 2013
Series G – March 10,
2014
Series H – June 10,
2014
Buyers Credit 2,509.75 Libor Linked – Various Dates
F-235
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Various
Inter Corporate Deposit - Magma Fincorp
Limited 2,200.00
12.00% per annum September 26, 2013
Inter Corporate Deposit - Magma Fincorp
Limited 1,300.00
12.00% per annum April 29, 2013
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 125.00
9.50% - 10.25% per
annum
Repayable on demand
Inter-corporate deposit – Reliance Capital
Limited 113,183.43
13.00% per annum Various Dates
Inter-corporate deposit - Chlorosulf Private
Limited 24,220.00
13.00% per annum Various Dates
Indiabulls Financial Services Limited
17,500.00
12.79% per annum 6 equal monthly
instalments starting the
13th
month from the
date of disbursement
Bank of Baroda (cash credit) 530.61 13.50% per annum Repayable on demand
Axis Bank Limited (cash credit) 645.33 13.25% per annum Repayable on demand
Total 222,401.62
Period 2012
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Allahabad Bank *
1,666.67
13.25% per annum ` 1,666.67 Due on
March 31, 2013
Exim Bank *
2,333.34
13.25% per annum ` 2,333.34 Due on
March 31, 2013
Jammu & Kashmir Bank *
2,333.34
13.25% per annum ` 2,333.34 Due on
March 31, 2013
Syndicate Bank *
2,333.34
13.25% per annum ` 2,333.34 Due on
March 31, 2013
Union Bank of India *
2,000.00
13.25% per annum ` 2,000.00 Due on
March 31, 2013
Vijaya Bank *
2,666.67
13.25% per annum ` 2,666.67 Due on
March 31, 2013
Union Bank of India
4,800.00
14.00% per annum ` 400 .00 - 20 equal
quarterly instalment
starting from March
31, 2012
Syndicate Bank
10,312.50
13.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from
September 14, 2011
Syndicate Bank
10,000.00
11.75% per annum ` 2,500.00 - 4 equal
quarterly instalment
starting from
September 14, 2013
F-236
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Non Convertible Debentures
35,000.00
11.00% per annum
Coupon Series 1 - ` 10,000
lakhs – March 1, 2014
Series 2 - ` 12,500
lakhs – March 1, 2015
Series 3 - ` 12,500
lakhs – March 1, 2016
Non Convertible debentures
3,850.00
12.50% per annum All series of ` 550
lakhs
Series B – December
10, 2012
Series C – March 10,
2013
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December
10, 2013
Series G – March 10,
2014
Series H – June 10,
2014
Buyers Credit
3,974.48
Libor Linked –
Various
Various Dates
Inter Corporate Deposit - Magma Fincorp
Limited 2,200.00
12.00% per annum March 26, 2013
Inter Corporate Deposit - Magma Fincorp
Limited 1,300.00
12.00% per annum April 29, 2013
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 550.00
9.50% - 10.25% per
annum
Repayable on demand
Inter-corporate deposit – Reliance Capital
Limited 97,845.40
13.00% per annum Various Dates
Indiabulls Financial Services Limited
17,500.00
12.79% per annum 6 equal monthly
instalments starting the
13th
month from the
date of disbursement
Bank of Baroda (cash credit) 554.63 13.50% per annum Repayable on demand
Total 201,220.40
* - Details of delayed repayment of loans:
Nature of loan Principal amount (` in
lakhs)
Due date Date of payment
Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012
Secured term loan 13,333.33 March 31, 2012 May 11, 2012
Secured term loan 1,250.00 December 16, 2011 December 30, 2011
Secured term loan 1,000.00 May 3, 2012 May 6, 2012
Period 2011
F-237
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Templeton Mutual Fund 21,984.79 11.75% per annum June 15, 2011
ICICI Prudential Fund 9,943.51 11.15% per annum April 20, 2011
Templeton Mutual Fund 9,422.16 11.75% per annum October 12, 2011
Yes Bank Limited 11,619.63 11.75% per annum November 25, 2011
BNP Paribas Mutual Fund
4,872.31 12.00% per annum June 20, 2011
Allahabad Bank
3,333.33
10.25% per annum ` 1,666.67 Due on
March 31, 2012. `
1,666.67 Due on
March 31, 2013 Exim Bank
4,666.68
10.25% per annum ` 2,333.34 Due on
March 31, 2012. `
2,333.34 Due on
March 31, 2013 Jammu & Kashmir Bank
4,666.68
10.25% per annum ` 2,333.34 Due on
March 31, 2012. `
2,333.34 Due on
March 31, 2013 Syndicate Bank
4,666.68
10.25% per annum ` 2,333.34 Due on
March 31, 2012. `
2,333.34 Due on
March 31, 2013 Union Bank of India
4,000.00
10.25% per annum ` 2,000.00 Due on
March 31, 2012. `
2,000.00 Due on
March 31, 2013 Vijaya Bank
5,333.33
10.25% per annum ` 2,666.67 Due on
March 31, 2012. `
2,666.67 Due on
March 31, 2013 Syndicate Bank
6,250.00
12.00% per annum ` 1,250.00 - 8 equal
quarterly instalment
started from September
17, 2010 Union Bank of India
6,000.00
13.00% per annum ` 400.00 - 20 equal
quarterly instalment
starting from March
31, 2012 Syndicate Bank
15,000.00
12.00% per annum ` 937.50 - 16 equal
quarterly instalment
starting from
September 14, 2011 Canara Bank 12,500.00 11.50% per annum March 28, 2012
7,500.00 11.50% per annum May 15, 2012
Syndicate Bank 10,000.00 9.00% per annum May 27, 2011
Union Bank of India 10,000.00 10.50% per annum May 23, 2011
Yes Bank Limited 3,500.00 12.50% per annum May 27, 2011
DBS Bank Limited 15,000.00 11.40% per annum January 24, 2012
Buyers Credit 3,283.90
Libor Linked –
Various
Various Dates
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 245.00
7.00% per annum Repayable on demand
F-238
Particulars of lenders and instrument Amount
outstanding (`
in lakhs)
Interest rate Repayment schedule
Inter-corporate deposit – Reliance Capital
Limited 15,000.00
12.00% per annum March 28, 2012
Bank of Baroda (cash credit) 540.53 11.00% per annum Repayable on demand
Axis Bank (cash credit) 1,959.47 12.75% per annum Repayable on demand
Total 191,288.00
Period 2010
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
LIC MF Savings Plus fund 7,450.18 6.60% per annum May 10, 2010
LIC MF Income Plus 9,832.06 5.50% per annum July 26, 2010
LIC MF Floating Rate 983.21 5.50% per annum July 26, 2010
LIC MF Savings Plus Fund 9,808.90 5.50% per annum August 11, 2010
J M Financial Mutual Fund 2,477.40 6.30% per annum May 25, 2010
J M Financial Mutual Fund 1,486.43 6.30% per annum May 25, 2010
LIC MF Income Plus 9,599.87 6.25% per annum December 3, 2010
LIC MF Savings Plus Fund 9,599.87 6.25% per annum December 3, 2010
IFCI Limited 2,466.68 7.75% per annum June 4, 2010
LIC MF Floating Rate 4,744.82 7.25% per annum December 29, 2010
LIC MF Savings Plus 4,744.53 7.25% per annum December 29, 2010
LIC MF Income Plus 9,489.05 7.25% per annum December 29, 2010
Allahabad Bank
5,000.00
10.75% per annum ` 1,666.67 Due on
March 31, 2011. `
1,666.67 Due on
March 31, 2012 `
1,666.67 Due on
March 31, 2013
Exim Bank
7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on
March 31, 2012 `
2,333.34 Due on
March 31, 2013
Jammu & Kashmir Bank
7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on
March 31, 2012 `
2,333.34 Due on
March 31, 2013
Syndicate Bank
7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on
March 31, 2012 `
2,333.34 Due on
March 31, 2013
Union Bank of India
6,000.00
10.75% per annum ` 2,000.00 Due on
March 31, 2011. `
2,000.00 Due on
March 31, 2012 `
2,000.00 Due on
March 31, 2013
F-239
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Vijaya Bank
8,000.00
10.75% per annum ` 2,666.67 Due on
March 31, 2011. `
2,666.67 Due on
March 31, 2012 `
2,666.67 Due on
March 31, 2013
Syndicate Bank
10,000.00
10.00% per annum ` 1250.00 - 8 equal
quarterly instalment
starting from
September 17, 2010 Union Bank of India
3,500.00
11.00% per annum ` 400 - 20 equal
quarterly instalment
starting from March
31, 2012 Allahabad Bank 10,000.00 7.75% per annum September 24, 2010
Syndicate Bank 10,000.00 7.50% per annum June 22, 2010
Union Bank of India 10,000.00 7.00% per annum June 11, 2010
Bank of Baroda 10,000.00 7.75% per annum July 10, 2010
Buyers Credit 1,392.60
Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of
Annexure XV) 15,224.30 - January 25, 2011
Inter-corporate deposit – Reliance
MediaWorks Theatres Limited 345.00
7% per annum Repayable on demand
Bank of Baroda (cash credit) 352.60 11.00% per annum Repayable on demand
Total 183,497.50
Period 2009
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Yes Bank Limited 14,886.41 9.75% per annum April 30, 2009
IDBI Limited 2,457.18 10.00 % per annum June 4, 2009
SIDBI 491.44 10.00 % per annum June 4, 2009
Canara Bank 2,456.18 10.25 % per annum June 4, 2009
IFCI 4,893.69 10.20 % per annum June 18, 2009
LIC MF Floating Rate Fund 4,767.92 10.75 % per annum September 14, 2009
LIC MF Income Plus Fund 4,767.92 10.75 % per annum September 14, 2009
LIC MF Liquid Fund 4,767.92 10.75 % per annum September 14, 2009
LIC MF Savings Plus Fund 4,767.92 10.75% per annum September 14, 2009
LIC MF Special Unit Scheme 4,767.92 10.75% per annum September 14, 2009
Allahabad Bank – Secured loan 5,000.00 10.75% per annum ` 1,666.67 Due on
March 31, 2011. `
1,666.67 Due on
March 31, 2012 `
1,666.67 Due on
March 31, 2013
F-240
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
Exim Bank 7,000.00 10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on
March 31, 2012 `
2,333.34 Due on
March 31, 2013
Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on
March 31, 2012 `
2,333.34 Due on
March 31, 2013
Syndicate Bank – Secured loan 7,000.00
10.75% per annum ` 2,333.34 Due on
March 31, 2011. `
2,333.34 Due on
March 31, 2012 `
2,333.34 Due on
March 31, 2013
Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 Due on
March 31, 2011. `
2,000.00 Due on
March 31, 2012 `
2,000.00 Due on
March 31, 2013
Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 Due on
March 31, 2011. `
2,666.67 Due on
March 31, 2012 `
2,666.67 Due on
March 31, 2013
Syndicate Bank – Unsecured loan 10,000.00 13.50% per annum December 31, 2009
Allahabad Bank – Unsecured loan 10,000.00 13.50% per annum January 8, 2010
Buyers Credit 926.80 Libor Linked –
Various
Various Dates
Zero Coupon FCCB (Refer note 8 of
Annexure XV)
14,230.00 - January 25, 2011
Inter-corporate deposit - Reliance
MediaWorks Theatres Limited
245.00 7.00% per annum Repayable on demand
Bank of Baroda (cash credit) 37.20 11.00% per annum Repayable on demand
Total 124,463.50
Period 2008
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
UTI Mutual Funds - liquid cash plan 1,973.16 10.25% per annum May 20, 2008
F-241
Particulars of lenders and instrument Amount
outstanding
(` in lakhs)
Interest rate Repayment schedule
ABN Amro Money Plus Fund 4,932.89 10.25% per annum May 20, 2008
Lotus India Liquid Fund# 1,973.16 10.25% per annum May 20, 2008
Birla Sunlife Interval Income Fund 5,297.62 10% per annum August 20, 2008
Kotak Quarterly Interval Plan - Series 6 2,408.01 10% per annum August 20, 2008
Allahabad Bank 1,965.13 10.20 % per annum June 4, 2008
Birla Cash Plus 4,421.54 10.20 % per annum June 4, 2008
United Bank Of India 3,438.97 10.20 % per annum June 4, 2008
UTI Spread Fund 2,456.41 10.20% per annum June 4, 2008
Saraswat Co-op Bank Ltd. 982.42 10.28% per annum June 4, 2008
SBI Life Insurance Co. Ltd. 2,456.04 10.28% per annum June 4, 2008
Tata MF - Tata Fixed Horizon Fund 3,928.19 10.50% per annum June 4, 2008
ABN Amro Flexible Short Term Plan - Series
B
2,455.16
10.50% per annum June 4, 2008
Rank Investments Private Limited 2,500.00 10.75% per annum ` 833.34 Due on March
31, 2011. `
833.34 Due on March
31, 2012 `
833.32 Due on March
31, 2013
Barclays Bank Plc 37,500.00 10.75% per annum ` 12,500.00 Due on
March 31, 2011. `
12,500.00 Due on
March 31, 2012 `
12,500.00 Due on
March 31, 2013
ICICI (car loan) 0.40 Various rates As per schedule
Zero Coupon FCCB (Refer note 8 of
Annexure XV)
13,099.90 - January 25, 2011
Inter Corporate Deposit – Reliance Capital
Limited
2,046.30 12.00% per annum Repayable on demand
Bank of Baroda (cash credit) 293.60 11.25% per annum Repayable on demand
Total 94,128.90
Commercial Paper:
Details of Terms of Discount rate and repayment schedule of Commercial papers are set out below:
Period 2011
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
F-242
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Templeton MF (4,500 commercial paper of face value `
500,000 each dated December 28, 2010 aggregating to `
22,500 lakhs)
21,984.79 Issued at `
21,339.08 lakhs,
discount rate
11.75 % per
annum
June 15,
2011
ICICI Prudential Mutual Fund (2,000 commercial paper
of face value ` 500,000 each dated January 20, 2011
aggregating to ` 10,000 lakhs)
9,943.51 Issued at `
9,732.42 lakhs,
discount rate
11.15 % per
annum
April 20,
2011
Templeton MF (2,000 commercial paper of face value `
500,000 each dated February 3, 2011 aggregating to `
10,000 lakhs)
9,422.16 Issued at `
9,252.39 lakhs,
discount rate
11.75 % per
annum
October 12,
2011
Yes Bank Ltd (2500 commercial paper of face value `
500,000 each dated February 25, 2011 aggregating to `
12,500 lakhs)
11,619.63 Issued at `
11,490.20 lakhs,
discount rate
11.75 % per
annum
November
25, 2011
BNP Paribas Mutual Fund (1000 commercial paper of
face value ` 500,000 each dated March 21, 2011
aggregating to ` 5,000 lakhs)
4,872.31 Issued at `
4,854.75 lakhs,
discount rate
12.00 % per
annum
June 20,
2011
Total 57,842.40
Period 2010
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Savings Plus (1,500 commercial paper of face
value ` 500,000 each dated June 3, 2009 aggregating to `
7,500 lakhs)
7,450.18 Issued at `
7,064.41 lakhs,
discount rate 6.60
% per annum
May 10, 2010
LIC MF Income Plus (2,000 commercial paper of face
value ` 500,000 each dated October 28, 2009 aggregating
to ` 10,000 lakhs)
9,832.06 Issued at `
9607.67 lakhs,
discount rate 5.50
% per annum
July 26, 2010
LIC MF Floating Rate (200 commercial paper of face
value ` 500,000 each dated October 28, 2009 aggregating
to ` 1,000 lakhs)
983.21 Issued at ` 960.77
lakhs, discount
rate 5.50 % per
annum
July 26, 2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated November 13, 2009
aggregating to ` 10,000 lakhs)
9,808.90 Issued at `
9607.67 lakhs,
discount rate 5.50
% per annum
August 11,
2010
J M Financial Mutual Fund (500 commercial paper of
face value ` 500,000 each dated November 25, 2009
aggregating to ` 2,500 lakhs)
2,477.40 Issued at `
2424.26 lakhs,
discount rate 6.30
% per annum
May 25, 2010
J M Financial Mutual Fund (300 commercial paper of
face value ` 500,000 each dated November 30, 2009
aggregating to ` 1,500 lakhs)
1,486.43 Issued at `
1455.78 lakhs,
discount rate 6.30
% per annum
May 25, 2010
F-243
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
LIC MF Income Plus (2,000 commercial paper of face
value ` 500,000 each dated January 29, 2010 aggregating
to ` 10,000 lakhs)
9,599.87 Issued at `
9499.02 lakhs,
discount rate 6.25
% per annum
December 3,
2010
LIC MF Savings Plus (2,000 commercial paper of face
value ` 500,000 each dated January 29, 2010 aggregating
to ` 10,000 lakhs)
9,599.87 Issued at `
9499.02 lakhs,
discount rate 6.25
% per annum
December 3,
2010
IFCI Ltd. (2,000 commercial paper of face value `
500,000 each dated January 29, 2010 aggregating to `
10,000 lakhs)
2,466.68 Issued at `
2452.10 lakhs,
discount rate 7.75
% per annum
June 4, 2010
LIC MF Floating Rate (1000 commercial paper of face
value ` 500,000 each dated March 9, 2010 aggregating to
` 5,000 lakhs)
4,744.82 Issued at `
4723.24 lakhs,
discount rate 7.25
% per annum
December 29,
2010
LIC MF Savings Plus (1000 commercial paper of face
value ` 500,000 each dated March 15, 2010 aggregating
to ` 5,000 lakhs)
4,744.53 Issued at `
4728.56 lakhs,
discount rate 7.25
% per annum
December 29,
2010
LIC MF Income Plus (2000 commercial paper of face
value ` 500,000 each dated March 15, 2010 aggregating
to ` 10,000 lakhs)
9,489.05 Issued at `
9457.12 lakhs,
discount rate 7.25
% per annum
December 29,
2010
Total 72,683.00
Period 2009
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Yes Bank Limited (3,000 commercial paper of face
value ` 500,000 each dated February 3, 2009
aggregating to ` 15,000 lakhs)
14,886.41 Issued at ` 14,663.14
lakhs, discount rate
9.75 % per annum
April 30,
2009
IDBI Limited (500 commercial paper of face value `
500,000 each dated March 9, 2009 aggregating to `
2500 lakhs)
2,457.18 Issued at ` 2,441.80
lakhs, discount rate
10.00 % per annum
June 4, 2009
SIDBI (100 commercial paper of face value ` 500,000
each dated March 9, 2009 aggregating to ` 500 lakhs)
491.44 Issued at ` 488.36
lakhs, discount rate
10.00 % per annum
June 4, 2009
Canara Bank ( 500 commercial paper of face value `
500,000 each dated March 6, 2009 aggregating to `
2,500 lakhs)
2,456.18 Issued at ` 2,438.37
lakhs, discount rate
10.25% per annum
June 4, 2009
F-244
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
IFCI (1,000 commercial paper of face value ` 500,000
each dated March 20, 2009 aggregating to ` 5,000
lakhs)
4,893.69 Issued at ` 4,877.33
lakhs, discount rate
10.20% per annum
June 18,
2009
LIC MF Floating Rate Fund (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Income Plus Fund (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Liquid Fund (1,000 commercial paper of face
value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Savings Plus Fund (1,000 commercial paper
of face value ` 500,000 each dated March 17, 2009
aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
LIC MF Special Unit Scheme (1,000 commercial
paper of face value ` 500,000 each dated March 17,
2009 aggregating to ` 5,000 lakhs)
4,767.92 Issued at ` 4,746.95
lakhs, discount rate
10.75% per annum
September
14, 2009
Total 49,024.50
Period 2008
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
UTI Mutual Funds - liquid cash plan (400 commercial
paper of face value ` 500,000 each dated February 20,
2008 aggregating to ` 2,000 lakhs)
1,973.16 Issued at ` 1,950.70
lakhs, discount rate
10.25% per annum
May 20,
2008
ABN Amro Money Plus Fund (1,000 commercial
paper of face value ` 500,000 each dated February 20,
2008 aggregating to ` 5,000 lakhs)
4,932.89 Issued at ` 4,876.74
lakhs, discount rate
10.25 % per annum
May 20,
2008
Religare Mutual Fund* (400 commercial paper of face
value ` 500,000 each dated February 20, 2008
aggregating to ` 2,000 lakhs)
1,973.16 Issued at ` 1,950.70
lakhs, discount rate
10.25 % per annum
May 20,
2008
Birla Sunlife Interval Income Fund Quarterly Plan
Series II (1,100 commercial paper of face value `
500,000 each dated February 20, 2008 aggregating to `
5,500 lakhs)
5,297.62 Issued at ` 5,238.78
lakhs, discount rate
10.00% per annum
August 20,
2008
Kotak Quarterly Interval Plan - Series 6 (500
commercial paper of face value ` 500,000 each dated
February 20, 2008 aggregating to ` 2,500 lakhs)
2,408.01 Issued at ` 2,381.26
lakhs, discount rate
9.20% per annum
August 20,
2008
F-245
Particulars of Lenders and Instrument Amount
outstanding
Discount Rate Repayment
Schedule
Allahabad Bank (400 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
2,000 lakhs)
1,965.13 Issued at ` 1,949.87
lakhs, discount rate
10.20% per annum
June 4,
2008
Birla Cash Plus (900 commercial paper of face value `
500,000 each dated March 4, 2008 aggregating to `
4,500 lakhs)
4,421.54 Issued at ` 4,387.21
lakhs, discount rate
10.20% per annum
June 4,
2008
United Bank Of India (700 commercial paper of face
value ` 500,000 each dated March 4, 2008 aggregating
to ` 3,500 lakhs)
3,438.97 Issued at ` 3,412.27
lakhs, discount rate
10.20% per annum
June 4,
2008
UTI Spread Fund (500 commercial paper of face value
` 500,000 each dated March 4, 2008 aggregating to `
2,500 lakhs)
2,456.41 Issued at ` 2,437.34
lakhs, discount rate
10.20% per annum
June 4,
2008
Saraswat Co-op Bank Ltd. (200 commercial paper of
face value ` 500,000 each dated March 7, 2008
aggregating to ` 1,000 lakhs)
982.42 Issued at ` 975.55
lakhs, discount rate
10.28% per annum
June 4,
2008
SBI Life Insurance Co. Ltd. (500 commercial paper of
face value ` 500,000 each dated March 7, 2008
aggregating to ` 2,500 lakhs)
2,456.04 Issued at ` 2,438.87
lakhs, discount rate
10.28% per annum
June 4,
2008
Tata MF - Tata Fixed Horizon Fund (800 commercial
paper of face value ` 500,000 each dated March 7,
2008 aggregating to ` 4,000 lakhs)
3,928.19 Issued at ` 3,900.14
lakhs, discount rate
10.50% per annum
June 4,
2008
ABN Amro Flexible Short Term Plan - Series B (500
commercial paper of face value ` 500,000 each dated
March 7, 2008 aggregating to ` 2,500 lakhs)
2,455.16 Issued at ` 2,437.59
lakhs, discount rate
10.50% per annum
June 4,
2008
Total 38,688.70
* Religare Mutual Fund is formerly known as Lotus India Mutual Fund
Notes:
Note 1: Secured by first pari passu charge on all fixed assets of the company.
Note 2: Cash credit is secured by deferred payment note, hypothecation of book-debts, moveable fixed assets
and stocks of chemicals.
Note 3: Secured against the motor cars acquired on Equitable Monthly Instalment (EMI) System.
Note 4: Secured by pari passu first charge on the inventories and book debts of the Company.
Note 5: Secured by pari passu Second charge of all the movable fixed assets and pari passu First charge on
current assets of the Company.
F-246
Note 6: Secured by pari passu first charge on current assets of the Company including inventories, book debts
and loans and advances.
Note 7: Secured by pari passu second charge on current assets and the moveable fixed assets of the Company.
Note 8: As per the terms of the issue document, the bonds were redeemable, in whole but not in part at the
option of the Company at any time on or after January 25, 2009 and on or prior to January 26, 2011 subject to
certain conditions at 121.679 per cent of the principal amount. During Period 2011 the balance outstanding
bonds were redeemed.
Note 9: These loans have been guaranteed by Reliance Capital Limited.
Note 10: Secured by first pari passu charge on the all assets of the Company and its wholly owned Indian
subsidiaries, along with corporate guarantee by Reliance Capital Limited.
Note 11: Secured by second charge on current assets and fixed assets (including moveable and immovable) of
the Company.
Note 12: Secured by first pari passu charge on the current assets and moveable fixed assets of the Company.
F-247
Annexure XVI
Reliance MediaWorks Limited
Statement of capitalisation as at March 31, 2013
Pre-issue Post-issue
As at
Particulars March 31, 2013 As Adjusted for Issue
Borrowings:
Short term borrowings 144,714.00
Long term borrowings (including ` 42,550.00 current
maturities) 77,687.50
Total borrowings 222,401.50
Shareholder's Fund:
Share capital (including Preference Shares) 2,453.81
Reserves and surplus (net) (excluding revaluation reserves) (49,468.47)
Less: Miscellaneous expenditures not written /off -
Total shareholder's fund (47,014.66) -
Long term debt / Shareholder‟s fund NA
Notes : -
a) Short term borrowing represents amount repayable within one year from March 31, 2013
b) The figures disclosed above are based on the summary statement of assets and liabilities, as restated, of the
Company as at March 31, 2013
c) The corresponding post issue figures are not determinable at this stage pending the completion of the Rights
issue process and hence have not been furnished.
F-248
Annexure XVII
Reliance MediaWorks Limited
Statement of the dividend paid / proposed
(` in lakhs)
Class of shares
Face
value of
share in `
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
Equity shares
Equity share capital as
at period end 5
2,306.31
2,306.31
2,306.31
2,306.31 2,306.31 2,306.31
Total 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31
Final dividend
Rate of the final
dividend (excluding
dividend distribution
tax) - - - - - 50.00%
Aggregating amount of
final dividend - - - - - 1,153.15
F-249
Annexure XVIII
Reliance MediaWorks Limited
Statement of related party disclosures, as restated
Parties where control exists
Holding company
Reliance Capital Limited (up to November 30, 2007)
Reliance Land Private Limited (up to November 30, 2007)
Subsidiary companies
Reliance MediaWorks (UK) Limited (from May 19, 2006)
Reliance MediaWorks (USA) Inc. (from May 17, 2006)
Reliance MediaWorks (Netherlands) B.V. (from February 8, 2008)
Reliance MediaWorks (Mauritius) Limited (from March 20, 2008)
Adlabs Multiplexes and Theatres Limited (merged with the Company with effect from April 1, 2008)
Reliance MediaWorks Theatres Limited
Big Synergy Media Limited (from January 12, 2007)
Adlabs Multiplex Limited (from December 20, 2007 and merged with the Company with effect from
April 1, 2008)
Rave Entertainment Private Limited (from May 31, 2007 and merged with the Company with effect
from April 1, 2008)
Reliance Broadcast Network Limited (ceased to be a subsidiary with effect from April 1, 2008 pursuant
to demerger of Radio business)
Sri Ramakrishna Theatre Limited (from January 11, 2008 upto May 27, 2011)
Rave Entertainment and Food Nepal Private Limited (from August 24, 2008 upto April 30, 2012)
Reliance MediaWorks Entertainment Services Limited (from May 4, 2009)
Katch 22 Entertainment Private Limited (from April 23, 2007 and merged with the Company with
effect from April 1, 2006 during Period 2008)
Reliance Media Consultant Private Limited (from February 16, 2012)
Reliance MediaVentures Private Limited (from June 19, 2012)
Step down subsidiary companies
Big Cinemas Entertainment LLC (from December 19, 2007)
Big Cinemas Entertainment (DE) LLC (from January 24, 2008)
Big Cinemas Laurel LLC (from November 28, 2007)
Big Cinemas Falls Church LLC (from November 8, 2007)
Big Cinemas Norwalk LLC (from March 14, 2008)
Big Cinemas Galaxy LLC (from December 21, 2007)
Big Cinemas Sahil LLC (from November 13, 2007)
Big Cinemas SAR LLC (from November 8, 2007)
Phoenix Big Cinemas Management LLC (from February 25, 2008)
Big Cinemas Phoenix LLC (from February 22, 2008)
Big Cinemas Exhibitions LLC (from March 6, 2008)
Big Cinemas IMC LLC (from January 19, 2008)
Reliance Lowry Digital Imaging Services Inc. (from September 1, 2008)
Reliance Media Works VFX Inc. (from January 25, 2010)
Big Pictures USA Inc. (from March 30, 2009)
Reliance Media and Marketing Communications LLC (from May 13, 2009)
Adlabs Digital Media LLC (from March 27, 2009 till April 15, 2010, the date of dissolution)
Adlabs Forum LLC (from March 6, 2008 till February 8, 2010, the date of dissolution)
Adlabs Heritage LLC (from March 7, 200 till May 14, 2010, the date of dissolution)
Adlabs GlobalStar LLC (from September 23, 2009 till February 9, 2010, the date of dissolution)
F-250
Big Cinemas Union LLC (from February 8, 2008 till February 19, 2010, the date of dissolution)
Reliance MediaWorks (Malaysia) Sdn. Bhd. (from April 18, 2008 till September 21, 2012)
Reliance MediaWorks Big Cinemas Sdn. Bhd. (from November 1, 2008 till September 21, 2012)
Other related parties with whom transactions have taken place during the period
(a) Significant shareholders, Key managerial personnel and their relatives
Manmohan Shetty (up to November 30, 2007)
Pooja Shetty (up to November 30, 2007)
Kirti Desai – Manager appointed u/s 269 of the Companies Act, 1956 (from January 30, 2008 till May
15, 2011)
Madhulika Singh – Manager appointed u/s 269 of the Companies Act, 1956 (from May 28, 2011 till
June 30, 2011)
Ashish Agarwal – Manager appointed u/s 269 of the Companies Act, 1956 (from July 1, 2011)
Reliance Land Private Limited (up to November 30, 2007)
(b) Enterprises over which company has significant influence / associates
HPE / Adlabs LP.
Sultan Production Private Limited (upto March 31, 2009)
(c) Joint ventures
Cineplex Private Limited (upto June 3, 2011)
Swanston Multiplex Cinemas Private Limited
Divya Shakti Marketing Private Limited
Adlabs Multiplexes and Theatres Limited (upto December 19, 2007)
(d) Enterprises over which Key managerial personnel have significant influence
Dharma Production Private Limited (up to November 30, 2007)
Idream Productions Private Limited (up to November 30, 2007)
Whistling Woods International Private Limited (up to November 30, 2007)
Reliance Communication Infrastructure Limited (up to November 30, 2007)
Reliance Capital Asset Management Limited (up to November 30, 2007)
Reliance Web Stores Limited (up to November 30, 2007)
Reliance General Insurance Company Limited (up to November 30, 2007)
HPE / Adlabs LP. (up to November 30, 2007)
Nature of
transactions
Name of related
party
Holding Company
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Reliance Land
Private Limited - - - - - 515.00
Dividend
Paid
Reliance Capital
Limited - - - - - 31.38
Nature of
transactions
Name of related
party
Subsidiary Companies
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Receiving of
Services
Reliance
MediaWorks
Theatres Limited - - - 0.60 0.60 -
Adlabs Multiplex
Limited - - - - - 10.90
Reliance
MediaWorks
Entertainment
Service Limited 5.60 30.20 1,763.30 3.00 - -
F-251
Nature of
transactions
Name of related
party
Subsidiary Companies
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Rave
Entertainment
Private Limited - - - - - 4.70
Reimburseme
nt of
expenses
Reliance
MediaWorks (UK)
Limited - - - (0.90) (70.20) 242.00
Reliance
MediaWorks
(USA) Inc. - (88.80) (215.70) (0.80) (66.10) -
Reliance
MediaWorks
Entertainment
Services Limited - 4.70 0.30 38.90 - -
Sri Ramakrishna
Theatre Limited - - 1.70 - - -
Reliance
MediaWorks
(Mauritius)
Limited - 0.01 - - - -
Big Synergy Media
Limited - - - 58.50 86.70 81.80
Rendering of
services
Reliance
MediaWorks
Theatres Limited 3.40 10.00 6.60 6.00 6.00 -
Reliance
MediaWorks (UK)
Limited - - 0.50 3.80 425.80 36.40
Reliance
MediaWorks
(USA) Inc. - - - 4.00 740.30 89.20
Adlabs Multiplex
Limited - - - - - 3.80
Reliance
MediaWorks
Entertainment
Services Limited 3.10 85.50 6.30 0.60 - -
Reliance Lowry
Digital Imaging
Services Inc. 17.30 - - - - -
Reliance
MediaWorks
(Netherlands) B.V - - - 1.80 - -
Big Synergy Media
Limited 84.20 298.00 304.10 312.10 76.00 70.50
Interest
Income
Reliance Broadcast
Network Limited - - - - - 130.30
Interest
expenses
Reliance
MediaWorks
Theatres Limited 18.70 52.30 18.40 14.40 9.00 -
Dividend
income
Big Synergy Media
Limited - - - 85.30 - -
Investment /
Purchase of
shares
Reliance
MediaWorks
(Mauritius)
Limited - - - - - 0.10
Reliance
MediaWorks
(Netherlands) B.
V. - - - - - 10.40
Rave
Entertainment
Private Limited - - - - - 515.30
F-252
Nature of
transactions
Name of related
party
Subsidiary Companies
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Reliance Broadcast
Network Limited - - - - - 1,005.00
Adlabs Multiplex
Limited - - - - - 1,704.50
Reliance
MediaWorks
Entertainment
Services Limited - - - 4.00 - -
Reliance Media
Consultant Private
Limited - 1.00 - - - -
Reliance
MediaVentures
Private Limited - 1.00 - - - -
Conversion
of loan to
equity shares
Reliance
MediaWorks
Entertainment
Services Limited - - 2,000.00 - - -
Subscription
of preference
shares
Reliance
MediaWorks
Entertainment
Services Limited - 12,000.00 - - - -
Loan given
Reliance
MediaWorks
(Mauritius)
Limited - - 326.40 1,094.30 11,527.50 -
Reliance
MediaWorks (UK)
Limited 992.20 4,806.60 898.40 2,375.90 318.40 -
Reliance
MediaWorks
(USA) Inc. 3,890.70 2,918.80 7.090.00 11,564.60 9,381.70 865.80
Reliance
MediaWorks
(Netherlands) B.
V. - - 44.90 67.00 - 444.20
Adlabs Multiplexes
and Theatres
Limited - - - - - 436.50
Rave
Entertainment
Private Limited - - - - - 3,246.40
Reliance Broadcast
Network Limited - - - - - 6,098.10
Adlabs Multiplex
Limited - - - - - 24.80
Reliance
MediaWorks
Entertainment
Services Limited 2,841.30 6,901.30 6,814.30 6,277.50 - -
Rave
Entertainment and
Food Nepal Private
Limited - - 432.00 - - -
Reliance Media
Consultant Private
Limited 0.50
Reliance
MediaVentures
Private Limited 0.50
Big Synergy Media
Limited - - - - - 155.00
F-253
Nature of
transactions
Name of related
party
Subsidiary Companies
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Loan
received back
Reliance
MediaWorks
Theatres Limited - - - - - 310.90
Reliance
MediaWorks
Entertainment
Services Limited
$$ - 12,000.00 - - - -
Reliance
MediaWorks
(Mauritius)
Limited - 149.80 - - - -
Reliance
MediaWorks
(USA) Inc. - - - - 5,757.60 -
Reliance
MediaWorks
(Netherlands) B.
V. - - - - 406.70 -
Reliance Broadcast
Network Limited - - - - - 3,850.00
Adlabs Multiplex
Limited - - - - - 42.20
Big Synergy Media
Limited - - - - - 155.00
Rave
Entertainment and
Food Nepal Private
Limited - 432.00 - - - -
Loans taken
Reliance
MediaWorks
Theatres Limited - 505.00 -
300.00 245.00
-
Loans repaid
Reliance
MediaWorks
Theatres Limited
425.00 200.00 100.00 200.00
- -
Fixed assets
purchased
Reliance
MediaWorks
Entertainment
Services Limited
- 3.80 103.20
- - -
Fixed assets
sold
Reliance
MediaWorks
Entertainment
Services Limited - - 9.70 - - -
Guarantees
given
Reliance
MediaWorks
(USA) Inc.
- 1,056.00 2,832.10 810.50 11,258.40
-
Reliance
MediaWorks
(Netherlands) B.V. - - - -
33.70
-
Reliance
MediaWorks
Entertainment
Services Limited - 2,640.00 -
7,500.00
- -
Rave
Entertainment and
Food Nepal Private
Limited - - -
283.00
- -
Guarantees
cancelled
Rave
Entertainment and - - 100.00 - - -
F-254
Nature of
transactions
Name of related
party
Subsidiary Companies
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Food Nepal Private
Limited
Reliance
MediaWorks
(USA) Inc. 3,293.80 - 9,906.60 - - -
Guarantees
outstanding
Reliance
MediaWorks
(USA) Inc. 6,176.00 9,260.20 7,054.00 14,094.50 11,258.4 -
Reliance
MediaWorks
(Netherlands) B.V.
35.00 34.00 32.00 30.30 33.70 -
Reliance
MediaWorks
Entertainment
Services Limited 10,232.80 10,140.00 7,500.00 7,500.00 - -
Rave
Entertainment and
Food Nepal Private
Limited
- - 185.90 283.00 - -
Net
outstanding
balances as at
period end
Reliance
MediaWorks
(Mauritius)
Limited @ 14,186.50 13,939.90 12,135.50 11,708.20 12,008.90 -
Reliance
MediaWorks
Theatres Limited (143.90) (555.40) (238.60) (333.10) (235.10) 47.90
Reliance
MediaWorks (UK)
Limited 10,047.50 9,300.60 3,745.30 2,427.60 406.10 238.10
Reliance
MediaWorks
(USA) Inc. 34,358.30 29,431.80 22,814.70 15,451.60 5,572.30 865.80
Reliance
MediaWorks
(Netherlands) B.
V. 164.10 159.00 149.90 96.50 39.90 444.20
Adlabs Multiplexes
and Theatres
Limited - - - - 436.50
Rave
Entertainment
Private Limited - - - - 3,246.40
Reliance Broadcast
Network Limited - - - - 2,349.00
Adlabs Multiplex
Limited - - - - 72.80
Reliance Media
Consultant Private
Limited 0.50
Reliance
MediaVentures
Private Limited 0.50
Big Synergy Media
Limited 171.10 (74.20) (303.50) (477.20) 288.60 207.30
Reliance
MediaWorks
Entertainment
Services Limited 8,410.20 5,543.50 10,236.90 6,420.60 - -
Reliance Lowry 17.30 - - - - -
F-255
Nature of
transactions
Name of related
party
Subsidiary Companies
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Digital Imaging
Services Inc.
Sri Ramakrishna
Theatre Limited - - 1.70 - - -
Rave
Entertainment and
Food Nepal Private
Limited - - 432.00 - - -
@ - Amount provided for loans given to subsidiary - ` 6,921.90 lakhs
$$ - Amounts have been apportioned from loans towards subscription of preference shares of the
Subsidiary
Nature of
transactions
Name of related
party
Significant shareholders, key management personnel and their
relatives
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Dividend
paid Manmohan Shetty -
-
- - - 57.30
Managerial
remuneration
Ashish Agarwal 11.80 29.40
Madhulika Singh - 0.80
Kirti Desai - 5.60 10.80 7.80 7.80 1.40
Manmohan Shetty - - - - - 116.10
Pooja Shetty - - - - - 4.90
Loans given Kirti Desai - - - 5.00 - -
Loans repaid Kirti Desai - - - 5.00 - -
Nature of
transactions
Name of related
party
Enterprises over which Company has significant influence /
associates
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Reimbursement
of expenses
Sultan Production
Private Limited - - - - (107.70) -
Interest Income HPE / Adlabs LP - - - - - 43.70
Repayment of
principal by
Limited
Liability
Partnership HPE / Adlabs LP - - - 241.70 - -
Loan given
Sultan Production
Private Limited - - - - 548.30 719.20
Outstanding
Balances as at
year / period
end
Sultan Production
Private Limited - - - - 1,159.70 719.20
Nature of
transactions
Name of related
party
Joint ventures
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Receiving of
Services
Cineplex Private
Limited - - - 9.70 17.60 17.00
Divya Shakti
Marketing Private 13.70 - - 8.40 14.60 18.00
F-256
Nature of
transactions
Name of related
party
Joint ventures
Period
March
2013
Period
2012
Period
2011
Period
2010 Period
2009
Period
2008
Limited
Swanston Multiplex
Cinemas Private
Limited - - - 1.40 - -
Adlabs Multiplex
Limited - - - - - 23.50
Reimbursement
of expenses
Cineplex Private
Limited - 2.90 0.50 1.50 -
Swanston Multiplex
Cinemas Private
Limited (2.80) 7.00 - - - -
Divya Shakti
Marketing Private
Limited
2.40
- - 0.50 1.30 -
Rendering of
services
Cineplex Private
Limited - 2.80 16.50 16.50 16.90 12.60
Adlabs Multiplex
Limited - - - - - 6.50
Interest income
Divya Shakti
Marketing Private
Limited 22.90 20.20 13.50 17.10 29.03 -
Cineplex Private
Limited - - 16.50 50.70 13.34 -
Dividend Paid
Swanston Multiplex
Cinemas Private
Limited - - - - (75.00) (55.00)
Investment /
Purchase of
shares
Swanston Multiplex
Cinemas Private
Limited - 125.00 - - - -
Loan given
Advance
towards share
application
money
Swanston Multiplex
Private Limited - - - 125.00 -
-
Sale of fixed
assets
Divya Shakti
Marketing Private
Limited 6.60 - - - - -
Loan Received
back
Cineplex Private
Limited - 133.40 101.50 104.30 128.10 30.00
Outstanding
balances as at
year end
Cineplex Private
Limited
- - 133.40
256.90 342.20 489.20
Divya Shakti
Marketing Private
Limited
246.50 241.70 201.30
194.50 223.60 222.40
Swanston Multiplex
Cinemas Private
Limited 0.80 0.80 125.80 125.80 - -
* - Amount written off – Period March 2013 - ` 22.90 lakhs, Period 2012 - ` 20.20 lakhs, Period 2011 - ` 13.50
lakhs and Period 2010: ` 30.40 lakhs.
Note:
1. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of
20%. This investment was made by the Company with the intention of investment in the movie
"Sultan: The warrior". However, during Period 2010, the Company had issued a letter of
termination demanding refund for the moneys paid by the Company and filed a recovery suit
against Orcher Studios, as per a shareholders‟ agreement signed by the Company which has been
agreed to by Orcher Studios. Since, the Company has intention of selling the shares; the Company
F-257
has decided not to consider Sultan as an associate under AS-18 Related Party Disclosures and AS-
23 'Accounting for Associates in Consolidated Financial Statements. The outstanding balance of
Sultan Production Private Limited was ` 1,158.80 lakhs as at March 31, 2010, of which the
Company had considered ` 120.00 lakhs as doubtful in the previous year and provided for the
same.
During Period 2011, the Company has received all the money receivable as per the shareholders
agreement and sold the shares.
2. The Company has issued 11% 3,500 Secured Redeemable Non Convertible Debentures
(Debentures) amounting ` 35,000 lakhs as of September 30, 2012 having face value of ` 10 lakhs
each on a private placement basis. The Debentures are secured by first pari passu charge on all
assets of the company and its Indian subsidiaries.
3. Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a
multiplex cinema. The lease of the multiplex cinema has been terminated by the landlord.
Considering the termination of the lease, the Company has decided to provide for diminution in the
value of investments amounting to ` 825.10 lakhs.
F-258
Annexure XIX
Reliance MediaWorks Limited
Statement of tax shelter
(` in lakhs)
Sr.
No. Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
1 (Loss) / profit
before tax, as
restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26
Adjustments for:
Modified Scheme
of Amalgamation
and Arrangement - - - - - (6,705.80)
Amalgamation of
Katch 22 - - - - - (2,000.00)
2 Adjusted (Loss) /
profit before tax, as
restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) (6,156.54)
3a Income tax rates
including surcharge
and education cess 32.45% 32.45% 33.22% 33.99% 33.99% 33.99%
3b Minimum alternate
tax rate 20.01% 20.01% 19.93% 17.00% 11.33% 11.33%
4 Tax at income tax
rates (1X3a) - - - - - -
5 Adjustments:
A Permanent
differences
i Exempt income net
of expenses 352.76 (1,611.92) (1,752.58) (2,318.83) 10.29 (3,737.17)
ii Expenditure
disallowed under
Income Tax Act,
1961 2,902.73 4,426.92 (3,076.56) 4.05 23.68 20.77
iii Adjustments for:
Composite Scheme
of Amalgamation
and Arrangement
- - - - -
Iv Scheme of
Amalgamation -
- - (7,756.55) -
5a Total permanent
differences 3,255.49 2,815.00 (4,829.14) (2,314.78) (7,722.58) (3,716.40)
B Timing differences
i Difference between
book and tax
depreciation 2,632.90 737.62 (612.45) (2,061.06) (2,115.06) (5,038.38)
ii Unrealised notional
(gain) / loss on
foreign exchange - - - (2,037.19) 416.22 1,680.78
F-259
Annexure XIX
Reliance MediaWorks Limited
Statement of tax shelter
(` in lakhs)
Sr.
No. Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
iii Arising out of
differences in
treatment of
expenses as per
Income Tax Act,
1961 and as per
books of account: -
iv (Loss) / profit on
sale of fixed assets 7.90 674.20 (2,701.14) 40.79 4.40 56.50
v Notional rent as per
Accounting
Standard 19 on
"leases" 1,149.38 4,119.80 1,229.51 506.99 250.59 301.11
vi Provision of bad
debts / advance 590.00 9,802.30 1,658.21 121.88 - -
vii Others (16.50) 194.63 366.80 (174.17) 222.84 63.39
5b Total timing
differences 4,363.68 15,528.55 (59.07) (3,602.76) (1,221.01) (2,936.60)
c Other differences
i Profit on sale of
Investments (57.50) (806.09) (423.57) (274.41) (269.17) (9.10)
ii Dividend stripping
u/s.94
- - - 11.58
5c Total other
differences (57.50) (806.09) (423.57) (274.41) (269.17) 2.48
6 Total adjustments
(5a+5b+5c) 7,561.67 17,537.46 (5,311.78) (6,191.95) (9,212.76) (6,650.52)
7 Tax savings
thereon (6X3a) 2,453.76 5,690.91 (1,764.57) (2,104.64) (3,131.42) (2,260.51)
8 Taxable (loss) /
profit as per
Income Tax Act
(2+6)
(20,031.48) (52,188.88) (29,659.78)
(14,988.95
)
(14,133.07
)
(12,807.06
)
9 Income tax thereon
(8X3a) - - - - - -
10 Short term capital
gains tax - - - - - -
11 Total income tax
- - - -
12 Taxable income as
per section 115JB
of the Income Tax
Act, 1961 (27,003.15) (60,554.04) (23,961.52) (8,882.27) (5,125.70) (8,965.66)
13 MAT thereon
(12X3b) - - - - - -
14 Total tax as per
income tax return
(higher - - - - -
F-260
Annexure XIX
Reliance MediaWorks Limited
Statement of tax shelter
(` in lakhs)
Sr.
No. Particulars
Period
March
2013
Period
2012
Period
2011
Period
2010
Period
2009
Period
2008
of 9 and 13) -
14 Deferred tax charge
/ (credit) - - - - (134.80) 621.40
15 Fringe benefit tax - - - - 151.50 71.49
16 Total tax as per
summary statement
of profit and loss,
as restated - - - - 16.70 692.89
Notes
1. The statement of tax shelter has been prepared based on adjusted profit/loss as per the summary
statement of profit and losses, as restated (Refer Annexure II.)
2. The above statement should be read together with Summary of significant accounting policies and
notes to summary statement, as restated (Annexure IV).
3. The figures for the six months ended March 31, 2013 are based on the provisional computation of total
income prepared by the Company for the year ended March 31, 2013 and are subject to any changes
that may be considered at the time of final filing of the return of income for the year ended March 31,
2013.
4. The figures for the eighteen month period ended September 30, 2012 are based on the tax return for the
year ended March 31, 2012 and the provisional computation of total income prepared by the Company
for the year ended March 31, 2013 and are subject to any changes that may be considered at the time of
final filing of the return of income for the year ended March 31, 2013.
5. Where the adjusted restated results before taxes are a loss, tax expense at applicable rate is taken as
Nil.
F-261
PRO FORMA FINANCIAL STATEMENT
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Company on a pro forma basis as at March 31, 2013.
(` in lakhs)
Particulars As at Adjustments As at
March 31,
2013
(Restated)
Transfer of
Film
Production
Services
business
Transfer
of
Theatrical
Exhibition
business
March 31,
2013
(Restated)after
adjustments
Assets
A Non-current assets
I Fixed assets
(i) Tangible assets 70,032.73 29,928.75 39,827.69 276.29
(ii) Intangible assets 645.30 421.02 158.24 66.04
(iii) Capital work-in-progress 8,865.10 5,495.81 3,369.29 -
II Non-current investments 18,040.94 - 359.32 17,681.62
III Deferred tax assets (net) - - - -
IV Long-term loans and advances 21,737.30 3,395.85 14,056.49 4,284.96
V Other non-current assets 583.90 - - 583.90
119,905.27 39,241.43 57,771.03 22,892.81
B Current assets
I Inventories 762.80 80.84 681.96 -
II Trade receivables 16,116.40 3,829.38 2,493.88 9,793.14
III Cash and bank balances 5,351.90 - - 5,351.90
IV Short-term loans and advances 63,743.50 1,225.43 665.02 148,255.79
V Other current assets 424.20 - - 424.20
86,398.80 5,135.65 3,840.86 163,825.03
Liabilities
C Non-current liabilities
I Long-term borrowings 35,137.50 - - 35,137.50
II Deferred tax liabilities (net) - - - -
III Other long-term liabilities 3,963.50 72.18 3,436.10 455.22
IV Long-term provisions 494.00 366.82 - 127.18
39,595.00 439.00 3,436.10 35,719.90
D Current liabilities
I Short-term borrowings 144,714.00 - - 144,714.00
II Trade payables 11,458.93 1,664.01 8,576.89 1,218.03
III Other current liabilities 57,466.20 1,582.52 3,887.71 51,995.97
IV Short-term provisions 84.60 - - 84.60
213,723.73 3,246.53 12,464.60 198,012.60
E Net Worth (A+B-C-D) (47,014.66)
(47,014.66)
F Represented by
i) Share capital 2,453.81
2,453.81
F-262
Reliance MediaWorks Limited
Summary statement of assets and liabilities of the Company on a pro forma basis as at March 31, 2013.
(` in lakhs)
Particulars As at Adjustments As at
March 31,
2013
(Restated)
Transfer of
Film
Production
Services
business
Transfer
of
Theatrical
Exhibition
business
March 31,
2013
(Restated)after
adjustments
ii) Reserves and surplus (net) (49,468.47)
(49,468.47)
G Net Worth (i+ ii) (47,014.66)
(47,014.66)
The above statement should be read together with notes to pro forma financial statements
F-263
Reliance MediaWorks Limited
Summary statement of profit and loss of the Company on a proforma basis for the six month period ended
March 31, 2013.
(` in lakhs)
Particulars
Period
March
2013
(Restated)
Adjustments Period
March
2013
(Restated)
after
adjustment
s
Transfer
of Film
Production
Services
business
Transfer
of
Theatrical
Exhibition
business
Revenue from operations 23,641.20 4,111.26 19,268.45 261.49
Other income 384.90 83.37 55.78 507.24
Total revenue 24,026.10 4,194.63 19,324.23 507.24
Direct operational expenses 9,547.77 937.78 8,436.41 173.58
Employee benefits expense 3,644.00 1,842.51 1,488.40 313.09
Finance costs (including loss on derivative
contracts) (net) 13,694.80 - - 13,694.80
Depreciation and impairment expense 4,078.60 1,354.59 2,664.99 59.02
Other expenses 14,971.50 1,923.58 12,676.89 371.03
Total expenses 45,936.67 6,058.46 25,266.69 14,611.52
(Loss) before tax and exceptional items
(21,910.57
) (1,863.83) (5,942.46) (14,104.28)
Exceptional items (5,682.58) - (5,682.58) -
(Loss) / profit before tax
(27,593.15
) (1,863.83) (11,625.04) (14,104.28)
Less - Provision for taxes - - - -
Net (loss) after tax
(27,593.15
) (1,863.83) (11,625.04) (14,104.28)
Period March 2013 - Six months ended March 31, 2013
The above statement should be read together with notes to pro forma financial statements
F-264
Reliance MediaWorks Limited Notes to the pro forma unaudited financial statements
for the six month period ended March 31, 2013
(Currency: Indian Rupees in Lakhs)
Background
Reliance MediaWorks Limited (‘Reliance MediaWorks’ or ‘the Company’) was incorporated in 1987 as a
Private Limited Company and is currently a Public Listed Company. The equity shares of the Company are
listed on BSE Limited and National Stock Exchange of India Limited. Reliance MediaWorks is primarily
engaged in theatrical exhibition, film production services and television / film production and distribution and
related services.
The Company’s last financial year ended on March 31, 2013 and was for a period of six months ended on that
date. The pro forma balance sheet is prepared as of March 31, 2013 and the pro forma statement of profit and
loss is for a period of six months ended on March 31, 2013.
Basis of presentation
The shareholders of the Company have approved on February 21, 2012 through postal ballot the resolution to
sell or otherwise dispose of the Company’s whole or part of undertakings pertaining to the Film & Media
Services and Exhibition business on a going concern basis to its wholly owned subsidiaries at consideration not
less than tax written down values as the board may decide and on such terms and conditions and in such manner
as may be decided by the board and the wholly owned subsidiaries.
Further, the Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in our Company’s film and media services
division. The investment is proposed to be made into the subsidiary of our Company, into which our film and
media services division will be transferred. No definitive agreement has been executed in respect of the
proposed transaction. The term sheet signed by the parties is valid till August 12, 2013.
The pro forma financial information of the Company assume the transfer of the film production services and
theatrical exhibition business segments of the Company to the subsidiaries of the Company at book values. For
the purpose of the transfer, it is assumed that all assets which form part of segment assets and segment liabilities
are transferred to the subsidiaries of the Company and the amount receivable as consideration on transfer is
shown as a short term loan and advance recoverable from these subsidiaries.
The pro forma financial statements assume transfer of all assets and liabilities of these businesses as on the last
day of the financial year, for the purpose of preparation of the balance sheet and the first day of the financial
year for the purpose of statement of profit and loss.
This pro forma financial information is prepared solely for information purpose and is not necessarily indicative
of the net results of operations that might have been achieved for period or dates indicated, nor is it necessarily
indicative of the future results of the Company after subsidiarisation.
F-265
STATEMENT OF CAPITALISATION POST ISSUE
The Board of Directors
Reliance MediaWorks Limited (“the Company”)
Film City Complex
Goregaon (East)
MUMBAI 400 065
July 19, 2013
Certificate for Proposed Rights Issue of Equity Shares (the ‘Issue’) of Reliance MediaWorks
Limited (the ‘Company’)
We statutory auditors of Reliance MediaWorks Limited (‘the Company’), have been informed by the
management of the Company that it requires a confirmation from the statutory auditors in respect of
Statement of capitalisation of Company and Group respectively as adjusted for issue, for disclosure in
the offer document of the proposed issue of equity shares of the Company on a rights basis (the
“Rights Issue”), which is to be filed with the Securities and Exchange Board of India (”SEBI”) and
the Stock Exchanges.
The Statement of capitalisation of the Company and Group adjusted for issue is based on the
summary statement of assets and liabilities, as computed and certified by the Company’s
management, is as detailed below:
Statement of capitalisation of the Company as adjusted for issue
(` in lakhs)
Pre-Issue Post-issue
Particulars
As at March 31,
2013
As Adjusted for
Issue
Borrowings:
Short term borrowings 144,714.00 144,714.00
Long term borrowings (including ` 42,550.00 current
maturities) 77,687.50 77,687.50
Total borrowings 222,401.50 222,401.50
Shareholder's Fund:
Share capital (including Preference Shares) 2,453.81 9,949.31
Reserves and surplus (net) (excluding revaluation reserves) (49,468.47) 3,000.05
Less: Miscellaneous expenditures not written /off - -
Total shareholder's fund (47,014.66) 12,949.36
Long term debt / Shareholder’s fund NA 6.00
F-266
Statement of capitalisation of the Group as adjusted for issue
(` in lakhs)
Pre-Issue Post-issue
As at March 31,
2013
Particulars As Adjusted for Issue
Borrowings:
Short term borrowings 145,385.80 145,385.80
Long term borrowings (including ` 45,005.90 current
maturities) 82,449.10 82,449.10
Total borrowings 227,834.90 227,834.90
Shareholder's fund:
Share capital 2,453.81 9,949.31
Reserves and surplus (net) (excluding revaluation reserves) (95,161.58) (42,693.06)
Less: Miscellaneous expenditures not written off - -
Total shareholder's fund (92,707.77) (32,743.75)
Long term debt / Shareholder’s fund NA NA
Notes
The Statement of capitalization of Company and Group as adjusted for the issue are prepared by the
Company’s management and have considered the following principles for the purpose of calculation:
a) Short term borrowing represents amount repayable within one year from March 31, 2013.
b) Pre issue figures are based on the summary statement of assets and liabilities, as restated, of the
Company and Group as at March 31, 2013.
c) The corresponding post issue figures are based on the rights issue entitlement ratio of 13:4 (13
shares for every 4 shares held) and based on the issue price of ` 40 per share as decided by the Rights
Issue Committee in its meeting dated July 13, 2013.
d) The Capitalisation Statement, adjusted for Rights Issue is prepared on the assumption that the
proposed rights issue of 149,910,052 Equity Shares at ` 40 per equity share will be subscribed fully.
Based on the information and explanations given to us and representations received from the
Company’s management, we confirm the accuracy and correctness of the Statement of capitalisation
of the Company and Group adjusted for Rights Issue as mentioned above.
This letter is intended solely for use of the management and for inclusion in the offer document in
connection with the Rights Issue and is not to be used, referred to or distributed for any other purpose
without our prior written consent. This letter is not a valuation report or a certification of the future
financial viability of the Company.
For B S R & Co.
Chartered Accountants
Firm’s Registration No: 101248W
For Chaturvedi & Shah
Chartered Accountants
Firm’s Registration No: 101720W
Bhavesh Dhupelia
Partner
Membership No: 042070
Mumbai
Parag D. Mehta
Partner
Membership No: 113904
Mumbai
225
FINANCIAL INDEBTEDNESS
The details of indebtedness of our Company on a standalone basis, as at May 31, 2013, are as provided below, together with a brief description of certain material covenants of the relevant financing
agreements:
Secured Loans
I. Loans
Sr. no. Name of the lenders Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal amount
outstanding as at
May 31, 2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
1. Syndicate Bank General
Agreement dated
June 11, 2010 and the sanction letter
dated May 31,
2010 as
supplemented by
letter dated July
18, 2011
15,000.00 8,437.50 For augmenting long term
working capital requirement
For augmenting long term
working capital requirement
Base Rate + 2.50%
p.a.
Five years 16 equal quarterly
installments after
one year initial moratorium from
the date of
drawdown
For details of
security see
note 1 below
2. Union Bank of India Term loan agreement dated
January 29, 2010
and review letter dated January 18,
2010 as modified by the sanction
letter dated
February 9, 2010. This was further
modified by the
sanction letter dated July 27,
2011. Our
Company accepted this
revision effective
from June 6, 2012 vide agreement
dated June 7, 2012
8,000.00 4,000.00 For financing our Company’s studios situated at Film City,
Mumbai
For financing our Company’s studios situated at Film City,
Mumbai
Base Rate + 3.50% p.a.
Six years 11 months 20 equal quarterly installment of
`400 lakhs commencing from
March 31, 2012
For details of security see
note 1 below
226
Sr. no. Name of the lenders Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal amount
outstanding as at
May 31, 2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
3. Bank of Baroda Sanction letter
January 5, 2010 as amended by letter
dated June 20,
2010 and November 1, 2010
and reviewed on
June 25, 2012 and Deed of
Declaration and
confirmation dated September
24, 2012 further
reviewed on March 22, 2013
and Deed of
Declaration and confirmation
dated March 26,
2013
Aggregate:
6,100.00
Aggregate:
5,074.22
Working capital Working capital
For details of
security see note 2 below
Fund based:
600.00
Fund based: 3.54 Cash credit: 2.75%
above Base Rate (floating) p.a.
Cash credit: 12
months
Cash credit: On
demand
Non fund
based: 5,500.00
Non fund based:
(i) letter of credit:
1,127.09 (USD 20 lakhs); (ii) bank
guarantee:
3,943.59
(i) Bank guarantee:
commission of 50%
of applicable charges for Old BGs and
1.05% p.a. for
New/fresh BG’s; and (ii) Inland/import
letter of credit/letter
of undertaking/ letter of credit to avail
buyer’s credit: (a)
40% of applicable charges for
import/inland letter
of credits upto `100 lakhs; (b) charges as
applicable for import/inland letter
of credits of above
`100 lakhs; and (c) letter of undertaking
/ letter of credit in
foreign currency as per schedule of
charges
(i) Bank guarantee:
five years. Above
five years, the same shall will be dealt on
case to case basis;
and (ii) Inland/import letter
of credit/ letter of
undertaking / letter of credit to avail
buyer’s credit: (a)
365 days for raw material; and (b)
upto three years for
capital goods
Bank guarantee on
expiry and
Inland/import letter of credit/
letter of
undertaking / letter of credit to
avail buyer’s
credit: on maturity
227
Sr. no. Name of the lenders Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal amount
outstanding as at
May 31, 2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
4. Axis Bank Limited Letter of
arrangement:
overdraft credit advances dated
January 29, 2010
and sanction letter December 8, 2009
as amended by the
letter dated August 13, 2010
and the letter
dated July 21, 2011 and first
supplemental
indenture of
mortgage dated
February 6, 2013
and the letter dated April 1,
2013
Aggregate:
5,500.00 Aggregate:
1,822.70
For details of
security see
note 3 below Fund based:
1,500.00 Fund based: 1.06 Over draft: to meet
temporary mismatch of funds
Over draft: To meet temporary mismatch of funds
Over draft: Base Rate + 4.00% p.a.
One year Over draft: On demand
Non fund
based: 4,000.00
Non fund based:
(i) letter of credit:Nil; (ii)
letter of credit for
purchase/import of capital goods:
Nil; (iii) buyers
credit: 1,668.27; (iv) bank
guarantee: 153.37;
and (v) standby letter of credit: Nil
(i) letter of credit: (a) for
procurement of raw materials, consumables
stores, spares and tools,
packing materials etc. (b) any other purpose approved by
the bank; (ii) letter of credit
for purchase / import of capital goods: (a) for
procurement of capital
goods; and (b) any other purpose approved by the
bank; (iii) buyers credit and
standby letter of credit: (a) for procurement of raw
materials, consumables
stores, spares and tools, packing materials etc. (b) any
other purpose approved by
the bank, (c) for procurement of capital goods; (iv) bank
guarantee: towards bids,
bond, security deposit, contract
performance/performance
guarantee, advance payment and retention money purpose
etc.
(i) buyers credit: (a) for
procurement of raw materials, consumables
stores, spares and tools,
packing materials etc. (b) any other purpose approved by
the bank, (c) for procurement
of capital goods; (ii) bank guarantee: towards bids,
bond, security deposit,
contract performance / performance guarantee,
advance payment and
retention money purpose etc.
Commission: (i)
letter of credit and letter of credit for
purchase/import of
capital goods: 0.60% p.a. + services tax;
(ii) buyers credit:
0.75% p.a. + applicable tax; (iii)
bank guarantee and
standby letter of credit: 0.75% p.a. +
applicable service
tax
(i) letter of credit and
letter of credit for purchase / import of
capital goods: (a)
inland letter of credit: maximum
usance upto 180
days; and (b) foreign letter of credit:
maximum usance of
365 days; (ii) buyers credit: (a) import of
raw material: upto
one year; and (b) import of capital
equipment: upto
three years; (iv) bank guarantee: maximum
upto 5.5 years; and
(v) standby letter of credit: three years
On maturity
228
Sr. no. Name of the lenders Nature of
borrowing
Amount
sanctioned
(except
otherwise
stated, in `
lakhs)
Principal amount
outstanding as at
May 31, 2013
(In `lakhs)
Purpose Utilization Interest/
Commission
Tenure
Repayment Security
5. Syndicate Bank General
agreement dated June 10, 2011 and
sanction letter
dated June 6, 2011 and modified vide
letter dated
October 10, 2011
10,000.00 10,000.00 Long term working capital Long term working capital Base rate + 1% p.a. Three years Four equal
quarterly installments from
the date of
drawdown after a moratorium
period of two
years
For details of
security see note 1 below
6. HDFC Bank Limited Loan agreement cum guarantee
dated October 26,
2006
Non fund based:
10,000.00
(credit facility)
Non fund based: 469.64 (Bank
Guarantee)
Working capital requirement Working capital requirement Commission: at a mutually agreed rate
On maturity On expiry For details of security see
note 4 below
7. 11% Secured Redeemable Non-
Convertible Debentures
issued to Yes Bank
Limited ***
11% Secured Redeemable Non -
Convertible
Debenture
35,000.00 35,000.00 Refinancing of existing debt and capital expenditure of the
Company
Repayment of Existing Debts 11.00% p.a. Coupon Rate
Series 1 – March 1, 2014
Series 2 – March 1,
2015
Series 3 –
March 1, 2016
Series 1 – March 1, 2014
Series 2 – March
1, 2015
Series 3 –
March 1, 2016
For details of security see
note 5 below
8. Indiabulls Housing
Finance Limited
(formerly
Indiabulls
Financial Services
Limited)
Loan
Agreement,
Deed of
Hypothecation
dated August
30,
2012,Sanction
Letter dated
August 30,
2012
17,500.00 17,500.00 General Corporate Purpose Repayment of Existing
Debts, Working Capital requirement and cash flow
mismatch
12.79% - IBFSL
PLR – 921bps
18 months 6 monthly equal
installment of Rs. 29,16,66,667/-
after completion
of moratorium period of 12
months
For details of
security see note 6 below
*** Reliance Capital Limited has provided a corporate guarantee dated March 5, 2012 in favour of Axis Trustee Services Limited for an amount of `35,000 lakhs for the said Non convertible Debentures.
Note 1:
229
First pari-passu charge on the fixed assets of our Company.
Note 2:
Cash credit & Inland/import letter of credit / letter of undertaking / letter of credit
First pari-passu charge on the entire current asset & movable fixed assets of our Company.
Bank guarantee
(i) Counter indemnity signed by our Company; and
(i) First pari-passu charge on the current asset of our Company; and
(ii) First pari-passu charge on the movable fixed assets of our Company.
Note 3:
(i) First pari-passu charge on the current asset of our Company; and
(ii) First pari-passu charge on the movable fixed assets of our Company.
In addition to the above, for bank guarantee and standby letter of credit a counter guarantee of our Company to be furnished.
Note 4:
Lien over fixed deposit to the extent of 100% value of the loan.
Note 5:
Secured by pari passu first charge on Fixed Assets (including Immovable and Movable Fixed Assets) and Current Assets of the Company and Indian wholly owned subsidiaries namely Reliance
MediaWorks Entertainment Services Limited and Reliance MediaWorks Theatres Limited.
Note 6:
Secured by Second charge on all Fixed Assets and Current Assets, including receivables/ book debts to the extent of minimum of 125% of the loan amount.
Unsecured Loans
II. Loans
230
Sr.
no.
Name of the
lenders
Nature of borrowing Amount sanctioned
(In ` lakhs)
Principal amount
outstanding as at
May 31, 2013
(In ` lakhs)
Interest/Commission
Tenure
Repayment
1. 12.50%
unsecured
redeemable
Non –
Convertible
Debentures
issued to
Barclays Bank
PLC
12.50% unsecured
redeemable Non –
Convertible
Debentures
4,400.00 2,750.00 12.50% p.a., compounded
monthly, payable quarterly in
arrears
Series D – June 10,
2013
Series E – September
10, 2013
Series F – December
10, 2013
Series G – March 10,
2014
Series H – June 10,
2014
Series D – June 10, 2013 - Rs. 550.00
Series E – September 10, 2013 - Rs.
550.00
Series F – December 10, 2013 - Rs.
550.00
Series G – March 10, 2014 - Rs. 550.00
Series H – June 10, 2014 - Rs. 550.00
III. Inter Corporate Deposits
Sr.
no.
Name of the lenders Nature of borrowing Amount sanctioned
(In ` lakhs)
Principal amount
outstanding as at May
31, 2013
(In ` lakhs)
Interest
Tenure
Repayment
1. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated March 7, 2012
25,187.50 21,136.43(1)
13.00% p.a. One year from date of
disbursement
On Demand
2. Magma Fin Corp Ltd Inter corporate deposit facility
agreement dated March 26, 2012
and renewal letter dated March 20,
2013
2,200.00 2,200.00 12.00% p.a. 6 months from date of
drawl/rollover
On Demand
3. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated March 30, 2012
1,900.00 1,900.00(1)
13.00% p.a. One year from date of
disbursement
On Demand
4. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated April 3, 2012
18,850.00 18,850.00(1)
13.00% p.a. One year from date of
disbursement
On Demand
231
Sr.
no.
Name of the lenders Nature of borrowing Amount sanctioned
(In ` lakhs)
Principal amount
outstanding as at May
31, 2013
(In ` lakhs)
Interest
Tenure
Repayment
5. Magma Fin Corp Ltd Inter corporate deposit facility
agreement dated April 30, 2012 and
renewal letter dated April 6, 2013
1,300.00 1,300.00 12.00% p.a. 6 months from date of
drawl/rollover
On Demand
6. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated May 7, 2012
39,840.00 39,840.00(1)
13.00% p.a. One year from date of
disbursement
On Demand
7. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated June 7, 2012
3,863.50 3,863.50(1)
13.00% p.a. One year from date of
disbursement
On Demand
8. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated July 3, 2012
7,690.00 7,690.00(1)
13.00% p.a. One year from date of
disbursement
On Demand
9. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated September 10,
2012
4,565.50 4565.50 13.00% p.a. One year from date of
disbursement
On Demand
10. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated October 25, 2012
3,238.00 3,238.00 13.00% p.a. One year from date of
disbursement
On Demand
11. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated November 23,
2012
2,400.00 2,400.00 13.00% p.a. One year from date of
disbursement
On Demand
12. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated December 6, 2012
3,500.00 3,500.00 13.00% p.a. One year from date of
disbursement
On Demand
14. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated January 8, 2013
4,200.00 4,200.00 13.00% p.a. One year from date of
disbursement
On Demand
15. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated February 5, 2013
2,000.00 2,000.00 13.00% p.a. One year from date of
disbursement
On Demand
16. Chlorosulf Private Ltd. Inter corporate deposit facility
agreement dated March 7, 2013
24,220.00 24,220.00 13.00% p.a. One year from date of
disbursement
On Demand
232
Sr.
no.
Name of the lenders Nature of borrowing Amount sanctioned
(In ` lakhs)
Principal amount
outstanding as at May
31, 2013
(In ` lakhs)
Interest
Tenure
Repayment
17. Chlorosulf Private Ltd. Inter corporate deposit facility
agreement dated April 1, 2013
4,280.00 4,280.00 13.00% p.a. One year from date of
disbursement
On Demand
18. Reliance Capital
Limited
Inter corporate deposit facility
agreement dated May 15, 2013
1,600.00 1,600.00 13.00% p.a. One year from date of
disbursement
On Demand
Total 1,50,834.50 1,46,783.43
(1) These loans were due within one year from the date of respective disbursements and are currently overdue
Others
Further, as of May 31, 2013, our Company has availed an unsecured loan of `375 lakhs by way of promissory note dated March 19, 2010 from Reliance MediaWorks Theatres Limited. This loan is
repayable on demand and the interest payable on the same is 7.00% - 10.50% per annum.
Restrictive Covenants with Respect to our Borrowing
Certain corporate actions for which our Company requires the prior written consent of the lenders include:
1. Make any change in the management set-up;
2. Transfer the Equity Shares held by our Promoters below the prescribed per cent;
3. Issue any guarantee except as required under the transaction documents;
4. Enter into any transaction of merger, consolidation, amalgamation or re-organisation;
5. Convey, sell, lease, let or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets, except for any permitted disposal;
6. Alter Memorandum of Association and / or Articles of Association;
7. Agree to, create, incur, assume or suffer to exist any security interest upon or with respect to any property, revenues, or assets (real, personal or mixed, tangible or intangible) of our Company,
whether now owned or hereafter acquired;
8. Change in our Company’s capital structure which is adverse to the interest of the lenders;
233
9. To declare or pay dividends for any year except out of profits relating to that year after the meeting of all financial commitments to the bank and making of due and necessary provisions;
10. To utilize the loans for purposes other than provided for;
11. Make any corporate investment or investment by way of contribution to share capital or debentures or advance funds to or place deposits with any concern; and
12. Any incremental indebtedness over and above outstanding as on February 15, 2012 – excluding promoter loans/group ICDs will be with the prior approval of Majority Debenture holders at that
point of time.
13. Future losses to be funded through Equity or Promoter’s loan / Group ICD’s
14. All future Promoter loans/Group ICDs will be subordinated & subservient in all terms and conditions to the Debentures.
15. Company to infuse equity to the satisfaction of lender within a period of 6 months from the borrowing done in August 2012
16. Further, under the terms of the loan agreements, our Company is required to maintain certain limits on financial ratios like, inter alia, ratio of gross borrowings to tangible net worth, ratio of
gross borrowings to EBITDA, ratio of secured debt to secured fixed assets and ratio of EBITDA to schedule debt payment.
234
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
You should read the following discussion of our financial condition and results of operations in conjunction
with the audited and restated consolidated financial statements including the schedules and notes thereto and
the examination reports thereon, which appear at page F-1.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may
differ materially from those anticipated in these forward-looking statements as a result of certain factors, such
as the risks set forth in the chapters entitled “Risk Factors” and “Forward Looking Statements” at pages 11
and 10, respectively.
The following discussion and analysis of our financial condition and results of operations is based upon and
should be read in conjunction with our audited consolidated financial statements, as restated, Six month period
ended March 31, 2013, Fiscal 2012 and Fiscal 2011, Fiscal 2010 and Fiscal 2009, including the schedules,
annexures and notes thereto and the reports thereon. Our audited consolidated and standalone financial
statements, as restated, are prepared in accordance with Indian GAAP, the accounting standards prescribed
under the Accounting Standard Rules, 2006, the relevant provisions of the Companies Act and the SEBI
Regulations.
Overview
We are one of India’s leading entertainment and media (“E&M”) companies with a presence across several
businesses such as theatrical exhibition of films, film and media services and television content production and
distribution. Our headquarters are located in Mumbai and we have operations across 78 cities and towns in India
and internationally, in, the UK and the United States.
Our theatrical exhibition business is our largest source of revenue. We operate one of India’s largest cinema
chains, under the brand ‘BIG Cinemas’, with 254 screens in India (including 16 screens which are only managed
by our Company) and an additional 185 screens in the United States (including 116 screens which are only
managed by our Company) as of May 31, 2013. During Fiscal 2012, BIG Cinemas (excluding customers of
screens which are only managed by our Company) catered to approximately 502 lakhs and 74 lakhs consumers
in India and overseas, respectively and approximately 144 lakhs consumers in India for the six months ended
March 31, 2013 March 31, 2013 and 15 lakhs consumers overseas for the six months ended March 31, 2013.
Our film and media services business comprising production services, post-production services and media and
creative services for films and television is our second largest source of revenue, which comprises:
Production services: We lease sound stages, shooting floors, standard and high definition multi-camera
equipment and other related equipment to television and film production companies.
Post-production services: We process and trade film negatives at our laboratory located in Film City,
Mumbai. Our 4K DI laboratory located in Film City, Mumbai undertakes quality enhancement of film
and television content through digital techniques.
Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to
3D and CGI services through our wholly owned subsidiary, Reliance MediaWorks Entertainment
Services Limited. In addition, our wholly owned subsidiaries located in United States and UK,
Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK) Limited, respectively,
are engaged in the business of digital image correction, film restoration and film processing.
We operate our film post production services through our production laboratory in Mumbai and our creative
services through facilities in Burbank (United States), London (UK) and Navi Mumbai (India). Films processed
at our laboratory in Mumbai have won, among others, 15 national awards for cinematography and our
Company’s film processing facilities have been certified by Kodak Imagecare, an internationally recognised
quality certification program, for each of the years beginning 2007. We were among four companies to receive
the “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in
2010. In August 2011, our Company received a patent for an innovation – “System and method for removing
235
semi-transparent artifacts from digital images caused by contaminants in the camera’s optical path”. We won
the Scientific and Technical Award, 2012 at the Academy of Motion Picture, Arts and Sciences in 2012, for the
development of a unique and efficient system for the reduction of noise and other artefacts, thereby providing
high quality images required by the film making process.
As a part of our long term growth strategy of asset creation, during the previous five years, we have established:
a business process outsourcing (BPO) facility at Navi Mumbai;
post-production facilities for television commercials and broadcast; and
a DI Lab.
Further, we have purchased broadcast and film cameras. We have also increased the number of screens we
operate. This has been achieved organically and has enhanced our reach in terms of exhibition business and
also enabled us to strengthen our capabilities in post-production services and creative services divisions.
We are also in the process of establishing approximately 2,00,000 square feet studio located in Film City,
Mumbai with facilities for shooting films, television shows and television commercials, which we believe
meets international standards. This studio aims to provide a one-stop solution for all production needs for
domestic and international clients. When completed, the studio is expected to have three studio buildings
with eight sound stages with appropriate noise control and other features. A part of the studio constituting
one studio building with three sound stages is in operation since January 2011. We expect to complete the
remaining portion of the studio by December 2013.
We are also engaged in the business of television content production through our subsidiary, Big Synergy
Media Limited, under the brand “BIG Synergy”, which primarily produces non-fiction programmes in
addition to adapting international programme formats for Indian viewers. We have produced shows such as
Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India’s Got Talent, Aap Ki
Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.
For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our restated consolidated net loss
after tax was ` 34,044.77 lakhs, ` 91,016.62 lakhs and ` 32,796.95 lakhs, respectively and our standalone
net loss after tax was ` 27,593.15 lakhs, ` 70,356.34 lakhs and ` 24,348.00 lakhs, respectively. For the six
months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our consolidated total income was ` 36,637.80
lakhs, ` 125,486.90 lakhs and ` 85,026.20 lakhs, respectively and our standalone total income was `
24,026.10 lakhs, ` 80,454.80 lakhs and ` 54,287.40 lakhs respectively.
Factors Affecting Our Results of Operations
The key factors affecting our results of operations are set out below:
Our Ability to Predict and Control Key Revenue and Cost Drivers
The key components of our costs include:
Distributors’ Share for Exhibition of Films: Our ability to retain a sufficient share of our box office
collections for the films we exhibit is one of the key drivers of our revenues. In India, in order to obtain the
right to exhibit a film in our single-screen cinema theatres, we pay the distributor of the film a certain fixed
percentage of the relevant film’s gross or net box office collections, while for the exhibition of a film in our
multiplexes, we pay the distributor of the film a percentage of our revenue based on the overall performance
of the film at multiplexes in India. In overseas, we enter into agreements with distributors in which a
distributor’s share could typically ranges between 40% to 70% of the box office collections, depending on
the location of the cinema theatre and the film. In the future, if distributors are able to demand a higher
share of films’ revenues, we will be able to retain a smaller share of our box office collections, which would
adversely affect our operations.
Film Studio Establishment and Operation: We are also in the process of establishing an approximately
200,000 square feet studio located in Film City, Mumbai with facilities for shooting films, television shows
and television commercials, which we believe is on par with international standards. We believe that our
236
future performance will be significantly dependent on our ability to complete the project in a timely manner
and within expected costs. A part of this studio was completed in January 2011. We expect to incur
significant additional costs to complete the remaining parts of the studio and to operate the studio to provide
film and television production services. Certain factors that may affect the cost of establishing the studio
include our ability to receive necessary equipment in a timely and cost efficient manner. As part of the
construction process, we have placed orders for certain items of equipment. However, we are yet to place
orders for large number of equipment. If we do not receive any such equipment in a timely manner, on
favourable terms or at all, the construction of our studio may be delayed or prevented, which could
adversely affect our results of operations.
Employee benefits Expenses: In order to successfully manage and expand our business, we are dependent on
the services of key management personnel and our ability to attract, train, motivate and retain skilled
employees, including artists, technicians and other professionals, which requires significant investments of
time and financial resources. Consequently, employee benefits expenses constitute a significant portion of
our total costs. As we add more products and services to our business and establish more cinema theatres,
our employee benefits expenses will increase as a result. In addition, if any of our employees unionise or
engage in work disruptions or stoppages, our employee benefits expenses may also increase. Changes in
labour regulations in India and in the overseas jurisdictions in which we operate may also affect the costs of
maintaining an adequate workforce.
Rent Expenses: Our ability to lease the properties at which we operate our cinema theatres at competitive
rates is a key driver of our costs. We operate all but four of our cinema theatres through lease arrangements,
business conducting agreements and management agreement for terms ranging from 3 to 30 years. . In the
event that a lease or a business conducting agreement or management agreement is not renewed, we will be
required to expend time and financial resources to relocate the cinema theatre which may adversely affect
our financial condition. Any adverse changes in our ability to lease properties at competitive rates may
adversely affect our results of operations.
Competitive Environment
In our theatrical exhibition business, we face competition from other cinema theatre chains and standalone
cinema theatre operators. We also face competition from alternative film delivery methods, including cable
television, the Internet, digital video disc, satellite and pay-per-view services. In addition, technologies currently
under development or that may be developed in the future, if employed by our existing theatrical exhibition
business competitors or new entrants, may adversely affect our competitiveness. Our competitors may be able to
deploy new technologies before us or we may be unable to adapt to new technologies, and we cannot predict
how emerging and future technological changes will affect our operations or the competitiveness of our
services. Changes in any of these factors may adversely affect the competitiveness of our theatrical exhibition
business and consequently, our results of operations.
We also face significant competition in our film production services business, including from local laboratories
in southern India, where certain competitors are also the producers and distributors of regional films, which
provides them with certain competitive advantages in relation to costs and business relationships. In digital film
processing industry, we face competition from existing entities. Some of these entities have longer operating
histories and greater financial resources than us. Our ability to compete in the film production services business
depends in significant part on our ability to adapt to technological trends and offer competitive rates for our
services. Any reduction in our ability to compete in the film production services business may adversely affect
our results of operations.
In our television production and distribution business, we primarily create non-fiction content, which is an
emerging business in India dominated by a few key entities. Our success in this line of business would depend
on our and our competitors’ ability to predict and cater to viewer preferences.
Success of Films
The success of the films we exhibit affects the revenue we generate in our theatrical exhibition business. Our
potential cinema theatre patrons may be inclined to visit our theatres in significant part based on the appeal of
the films we exhibit, irrespective of the services, technologies and amenities we offer. The availability of more
successful films in our cinema theatres results in higher patronage and longer running films, and as a result,
237
increased revenues from ticket sales, food and beverage sales and other revenue streams related to our cinema
theatres. Our theatrical exhibition business revenues are driven in significant part on the availability of popular
films that are well accepted by broad audiences.
Ability to Borrow at Favourable Rates
Our business requires significant amounts of capital expenditure and working capital. We have generally
resorted to borrowings to meet our capital expenditure requirements. As an Indian company, we are subject to
exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing
sources for our operations and could constrain our ability to obtain financing on favourable terms and refinance
existing indebtedness. In addition, certain of our financing agreements include conditions and restrictive
covenants that require us to obtain consents from the respective lenders prior to carrying out certain activities
and entering into certain transactions. Any future changes in regulatory restrictions or in the terms typically
found in our indebtedness agreements may adversely affect our ability to borrow at favourable rates, which may
in turn adversely affect our results of operations.
Changes in Interest and Foreign Exchange Rates
The entirety of our investments in our foreign operations and revenues generated from our foreign operations
are denominated in foreign currencies. Change in the relevant foreign exchange rates could occur for a variety
of reasons and may adversely affect the returns from these investments and the revenues generated. For
instance, such changes in exchange rates could result from a decline in India’s foreign exchange reserves. In the
future, adverse changes in interest and foreign exchange rates may adversely affect our results of operations.
Changes in Economic Conditions
Our results of operations are highly dependent on the overall economic conditions in India and in the foreign
jurisdictions in which we operate. Our theatrical film exhibition business is our largest source of revenue.
Cinema theatre attendance is a discretionary expense for our potential customers and thus may be particularly
reduced in times of negative economic conditions. Any slowdown in the Indian economy or in the economies of
the overseas jurisdictions in which we operate, due to, among other things, changes in interest rates, government
policies, taxation, social and civil unrest and political, economic or other developments, could adversely affect
our business and results of operations.
Restrictions on ability to fund our foreign subsidiaries
Our ability to fund our foreign subsidiaries is connected to our networth. Our stand-alone and consolidated
networth, as restated as on March 31, 2013, was ` (47,014.66) lakhs and ` (92,707.78) lakhs, respectively. Our
networth has eroded which has impaired our ability to fund our foreign subsidiaries, consequently, our growth
and results of operations may be adversely impacted.
Changes in Government Policies and Regulations
We are affected by changes in a variety of government policies and regulations that affect the operations of our
businesses in India. For instance, we are affected by changes in government policies regarding investment in
overseas subsidiaries. These policies are governed by the relevant authority for foreign investment in those
countries. In addition, we are eligible for exemptions from the payment of entertainment taxes in respect of 5 of
our cinema theatres on the basis of policies of certain State governments, such as Maharashtra, Madhya Pradesh,
Uttar Pradesh and Punjab. We are eligible for exemptions from the payment of a specified percentage of the
entertainment taxes for a period of up to five years on a staggered basis from the date of commencement of
operations in respect of 5 theatres in Maharashtra, Madhya Pradesh, and Uttar Pradesh, subject to the fulfilment
of certain conditions required by the regulation. In addition, we are eligible for an exemption from payment of
entire entertainment tax payable in respect of six theatres in Punjab and six theatres in Rajasthan throughout the
life of such theatres. In the future, if we are unable to avail of such exemptions, our results of operations could
be adversely affected. Cinema theatres in the states of Delhi, Punjab and Haryana are governed by the
provisions of the Punjab Cinemas (Regulation) Act, 1952, as amended, under which the licensee must comply
with ticket prices approved by the licensing authority. The said prices may be changed only with the prior
intimation of the licensing authority and in Delhi, the prices may not be changes more than six times in a year..
238
In the event these restrictions prevent us from increasing the ticket prices as may be required by us, it may affect
the results of our operations.
Our Significant Accounting Policies
Preparation of Consolidated Financial Statements
Our consolidated financial statements have been prepared in accordance with AS 21 – ‘Consolidated Financial
Statements’, AS 23 – ‘Accounting for Investments in Associates in Consolidated Financial Statements’ and AS
27 – ‘Financial Reporting of Interest in Joint Ventures’. Our consolidated financial statements are prepared
using uniform accounting policies for transactions and other events in similar circumstances, except where it is
not practicable to do so. Our consolidated financial statements are presented to the extent possible, in the same
format as that adopted by our Company for our independent financial statements. Our consolidated financial
statements have been consolidated on the following basis:
Subsidiaries: The excess of our cost of our investment in subsidiaries over our portion of equity in the
subsidiaries at the respective dates on which investment in such subsidiaries was made is recognised in
our financial statements as goodwill and any excess of assets over our investment in a subsidiary is
transferred to the capital reserve. Our portion of equity in our subsidiaries is determined on the basis of
the book value of assets and liabilities in accordance with the financial statements of our subsidiaries as
of the date of the investment.
The financial statements of our Company and our 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, after
eliminating intra-group balances and transactions and resulting unrealised profits in full. The amounts
shown in respect of reserves and accumulated losses comprise the reserve or accumulated losses in
accordance with the balance sheet of our Company and our share in the post-acquisition increase or
decrease in the relevant reserves or accumulated losses of our subsidiaries.
The amount of goodwill and capital reserve are presented on a net basis for each subsidiary.
The minority interest’s share of profits or losses is adjusted against the income to arrive at the net
income attributable to the shareholders. The minority interest’s share of net assets is disclosed
separately in the balance sheet.
During Fiscal 2012:
o We sold our entire shareholding in Sri Ramakrishna Theatres Limited, Rave Entertainment
and Food Nepal Private Limited, Reliance MediaWorks (Malaysia) Sdn. Bhd. and Reliance
MediaWorks Big Cinemas Sdn. Bhd. our subsidiaries in May 2011, April 2012 and September
2012 respectively.
o We sold our entire shareholding shares in a joint venture viz., Cineplex Private Limited in
June 2011.
o We incorporated new subsidiaries Reliance Media Consultant Private Limited and Reliance
MediaVentures Private Limited with effect from February 16, 2012 and June 19, 2012.
During Fiscal 2011:
o We sold our entire shareholding in Sultan Production Private Limited
o We dissolved three LLCs in the United States viz., Adlabs Heritage LLC, Adlabs Digital
Media LLC and Adlabs GlobalStar LLC.
o As part of a settlement with its minority holders, we acquired the balance 49% stake in Big
Cinemas Galaxy LLC.
Joint Venture Entities: Interest in jointly controlled entities are accounted for using the proportionate
consolidation method.
239
The list of subsidiaries considered in our consolidated financial statements with percentage
shareholding for six month period ended March 31, 2013 is summarised below:
Name of Subsidiary Country of Incorporation Ownership Interest as of
March 31, 2013 (%)
Reliance MediaWorks Theatres
Limited
India 100%
Reliance MediaWorks (UK)
Limited
United Kingdom 100%
Reliance MediaWorks (USA) Inc. United States 100%
Reliance MediaWorks
(Netherlands) B.V.
The Netherlands 100%
Reliance MediaWorks (Mauritius)
Limited
Mauritius 100%
Big Synergy Media Limited India 51%
Rave Entertainment and Food
Nepal Private Limited (4)
Nepal Nil
Reliance MediaWorks
Entertainment Services Limited
India 100%
Reliance Media Consultant Private
Limited
India 100%
Reliance MediaVentures Private
Limited
India 100%
Adlabs Multiplex Limited (1)
India N.A.
Rave Entertainment Private Limited (1)
India N.A.
Adlabs Multiplex and Theatres
Limited (1)
India N.A.
Katch 22 Entertainment Private
Limited (2)
India N.A.
Reliance Broadcast Network
Limited (3)
India N.A.
Sri Ramakrishna Theatres Limited (4)
India N.A.
(1) It was amalgamated with our Company in Fiscal 2009. (2) It was amalgamated with our Company in Fiscal 2008. (3) It ceased to be our subsidiary from Fiscal 2009 pursuant to a scheme of demerger. (4) It ceased to be a subsidiary pursuant to sale of shares in Fiscal 2012.
The list of step-down subsidiaries considered in our consolidated financial statements with percentage
shareholding as of March 31, 2013 is summarised below:
Name of Subsidiary Country of
Incorporation
Name of Parent
Company
Ownership Interest
as of March 31, 2013
(%)
BIG Cinemas
Entertainment LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas
Entertainment (DE) LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Adlabs Forum LLC (1)
United States Reliance MediaWorks
(USA) Inc.
N.A.
BIG Cinemas Laurel LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas Falls Church
LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Adlabs Heritage LLC (2)
United States Reliance MediaWorks N.A.
240
Name of Subsidiary Country of
Incorporation
Name of Parent
Company
Ownership Interest
as of March 31, 2013
(%)
(USA) Inc.
BIG Cinemas Norwalk
LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas Galaxy LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas Sahil LLC
United States Reliance MediaWorks
(USA) Inc.
97%
BIG Cinemas SAR LLC
United States Reliance MediaWorks
(USA) Inc.
51%
Phoenix BIG Cinemas
Management LLC
United States Reliance MediaWorks
(USA) Inc.
51%
Big Cinemas Union LLC (1)
United States Reliance MediaWorks
(USA) Inc.
N.A.
BIG Cinemas Phoenix
LLC
United States Reliance MediaWorks
(USA) Inc.
51%
BIG Cinemas Exhibition
LLC
United States Reliance MediaWorks
(USA) Inc.
100%
BIG Cinemas IMC LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Big Pictures USA Inc.
United States Reliance MediaWorks
(USA) Inc.
100%
Adlabs Digital Media LLC (2)
United States Reliance MediaWorks
(USA) Inc.
N.A.
Reliance Media and
Marketing
Communications LLC
United States Reliance MediaWorks
(USA) Inc.
100%
Reliance Lowry Digital
Imaging Services Inc.
United States Reliance MediaWorks
(USA) Inc. – 90%
Our Company – 10%
100%
Reliance Media Works
VFX Inc.
United States Reliance MediaWorks
(USA) Inc.
100%
Reliance MediaWorks
(Malaysia) Sdn. Bhd. (3)
Malaysia Reliance MediaWorks
(Mauritius) Limited
Nil
Reliance MediaWorks Big
Cinemas Sdn. Bhd. (3)
Malaysia Reliance MediaWorks
(Malaysia) Sdn. Bhd.
Nil
(1) Dissolved in Fiscal 2010 (2) Dissolved in Fiscal 2011 (3) Ceased to be subsidiary pursuant to sale of shares in Fiscal 2012
The list of joint venture entities considered in our consolidated financial statements with percentage
shareholding is summarised below:
Name of Joint Venture Country of
Incorporation
Ownership Interest as of
March 31, 2013 (%)
Swanston Multiplex Cinemas Private
Limited
India 50%
Divyashakti Marketing Private Limited
India 50%
Cineplex Private Limited (1)
India Nil (1) Ceased to be a Joint Venture pursuant to sale of shares in Fiscal 2012
241
Associates – GH – Reliance LLC is an Associate of the Company with effect from October 1, 2012
with Reliance MediaWorks (USA) Inc. holding 30%.
Key accounting policies that are relevant and specific to our business and operations are as follows:
Basis of Preparation: The summary statements of the subsidiaries, joint ventures and associate
companies used in the consolidation are for the same reporting period as our Company. These financial
statements are audited by the auditors of the respective entities.
Our financial statements have been prepared to comply in all material respects with the requirements of
the Schedule II of the Companies Act, 1956 (the “Act”) and the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009, to the extent applicable.
Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011
(as amended by notification no. F. No/2/6/2008-CL-V dated March 30, 2011), read with General
Circular no. 62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised
Schedule VI notified under the Act has become applicable to the Company for the purpose of
preparation and presentation of its summary statements. The adoption of revised Schedule VI does not
impact the recognition and measurement principles followed for preparation of summary statements.
All assets and liabilities have been classified as current or non-current as per the Company’s normal
operating cycle and other criteria set out in the revised Schedule VI.
Use of Estimates: The preparation of financial statements in conformity with GAAP in India requires
us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosures of contingent liabilities on the date of the financial statements and the reported amount of
income and expenses during the reported period. We believe that the estimates made in the preparation
of financial statements are reasonable. Actual results could differ from those estimates. Any revision to
accounting estimates is recognised prospectively in current and future periods.
Goodwill on consolidation: The excess of cost to the parent company of its investments over its
portion of equity in the subsidiaries / associates / joint ventures, as at the date on which the investment
was made, is recognised as goodwill in the financial statements. Our portion of equity in the
subsidiaries / associates / joint ventures’ is determined on the basis of the book value of assets and
liabilities as per the financial statements of the subsidiaries as on the date of investment.
Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. We assess the
recoverability of goodwill by reference to the valuation methodology adopted by us on the acquisition
date, which included strategic and synergic factors that were expected to enhance the enterprise value.
Accordingly, we would consider that there exists a decline other than temporary in the carrying value
of goodwill when, in conjunction with its valuation methodology, its expectations with respect to the
underlying acquisitions we have made deteriorates with adverse market conditions.
Fixed Assets and Depreciation / Amortisation:
o Tangible Assets: Tangible fixed assets are stated at cost or revalued amount in accordance
with the scheme of amalgamation less accumulated depreciation and any provision for
impairment. Cost includes freight, duties, taxes (other than those recoverable from tax
authorities) and other expenses related directly or indirectly to the acquisition or construction
and installation of the fixed assets and for bringing the asset to its working condition for its
intended use. Depreciation on fixed assets is provided on the straight line method, at the rates
prescribed in Schedule XIV to the Act, which, in our opinion, reflects the estimated useful
lives of those fixed assets, except assets of subsidiaries, namely Reliance MediaWorks (USA)
Inc. (including its subsidiaries), Reliance MediaWorks (UK) Limited and Swanston Multiplex
Cinemas Private Limited and our theatrical exhibition segment in India wherein depreciation
is provided at following rates:
242
Plant and machinery: 7.07% to 20%
Furniture and fixtures: 10% to 25%
Computers: 20%
Motor cars: 10%
Office equipment: 10%
Leasehold improvements / buildings are depreciated over the lower of useful life of the asset
and lease term, on a straight line basis. Individual assets costing up to ` 0.05 lakhs are
depreciated fully in the year of acquisition.
o Intangible Assets: Intangible assets, all of which have been acquired or created and are
controlled through custody or legal rights, are capitalised at cost, where they can be reliably
measured. Where capitalised, intangible assets are regarded as having a limited useful
economic life and the cost is amortised over the lower of useful life or ten years.
Application software purchased, which is not an integral part of the related hardware, is shown
as intangible assets and amortised on a straight line basis over its useful life, not exceeding
five or ten years, as determined by us.
Film rights comprise negative rights and distribution rights in films and are for a contractually
specified mode of exploitation, period and territory and are stated at cost less accumulated
amortisation. Cost of film rights comprises original purchase price or minimum guarantee.
Cost is ascertained on a specific identification basis where possible. In case multiple films or
rights are acquired for a consolidated amount, cost is allocated to each film / right based on
management’s best estimates.
The individual film forecast method is used to amortise the cost of film rights acquired. Under
this method, costs are amortised in the proportion that gross revenues realised bear to our
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 unamortised cost over the film
right’s realisable value.
In respect of unreleased films, payments towards film rights are classified under capital
advances as the amounts are refundable in the event of non-release of the film.
Internally generated software is capitalised by the Company and amortised over its estimated
useful life of five / ten years.
Purchased goodwill is recognised by us on the basis of excess of purchase consideration paid
over the value of the assets acquired at the time of acquisition and is amortised over its
estimated useful life not exceeding ten years.
Impairment: In accordance with Accounting Standards 28 – ‘Impairment of Assets’, where there is an
indication of impairment of our asset, the carrying amounts of our 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 a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in
the statement of profit and loss.
If at the Balance sheet date there is an indicator that a previously assessed impairment loss no longer
exists, the recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject
to a maximum depreciated historical amount.
243
Value in use is the present value of estimated future cash flows expected to arise from the continuing
use of the asset and from its disposal at the end of its useful life.
Investments: Long-term investments are carried at cost. A provision for diminution is made to
recognise a decline, other than temporary, in the value of long-term investments and is determined
separately for each individual investment. Current investments are carried at lower of cost and fair
value.
Inventories: Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon
lamps and stores and spares related to theatrical exhibition / film production services business etc.) are
stated at the lower of cost and net realisable value. Cost is determined on the first-in first out basis,
except in the case of Reliance MediaWorks (USA) Inc. (and its subsidiaries) and Reliance MediaWorks
Big Cinemas Sdn. Bhd., wherein we use the weighted average method. Inventory of DVDs is stated at
lower of cost and net realisable value.
Employee benefits:
o Short Term Employee Benefits: All employee benefits payable wholly within 12 months of
rendering the service are classified as short term employee benefits. The undiscounted amount
of short term employee benefits expected to be paid in exchange for the services rendered by
employees are recognised as an expense during the period.
o Long Term Employee Benefits:
Provident Fund and Other Schemes: Our state governed provident fund scheme,
employee state insurance scheme and labour welfare fund are defined contribution
plans. The contribution paid or payable under the schemes is recognised during the
year in which the employee renders the related service.
Gratuity Plan: Our gratuity benefit scheme is a defined benefit plan. Our net
obligation in respect of the gratuity benefit scheme is calculated by estimating the
amount of future benefit that employees have earned in return for their service in the
current and prior year; that benefit is discounted to determine its present value and
the fair value of any plan assets is deducted. The present value of the obligation
under such defined benefit plan is determined based on actuarial valuation using the
Projected Unit Credit Method. The obligation is measured at the present value of the
estimated future cash flows. 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. Actuarial gains and losses are
recognised immediately in the statement of Profit and Loss.
Other Long Term Employment Benefits: 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 recognised as a liability at the present value
of the defined benefit obligation at the Balance Sheet date, determined based on
actuarial valuation using Projected Unit Credit Method. 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.
Revenue Recognition: Revenue is recognised to the extent that it is probable that the economic
benefits will flow to us and the revenue can be reliably measured. The amount recognised as sales is
exclusive of value added tax and service tax and net of trade discounts. Amount of entertainment tax is
shown as a reduction from revenue.
o Film Production Services Income: Revenue from processing or printing of cinematographic
films is recognised upon completion of the related processing / printing. Revenue from
processing of digital content is recognised using the proportionate completion method. Use of
the proportionate completion method requires us to estimate the efforts expended to date as a
proportion of the total efforts to be expended. Efforts expended have been used to measure
244
progress towards completion, as there is a direct relationship between efforts expended and
contracted output. Sale of traded goods is recognised when the risks and rewards of ownership
are passed on to the customer, which generally coincides with the dispatch of goods. Income
from equipment or facility rental is recognised over the period of the relevant agreement or
arrangement.
o Theatrical Exhibition and Related Income:
Sale of tickets: Revenue from theatrical exhibition is recognised on the date of the
exhibition of the films and comprises proceeds from sale of tickets, gross of
entertainment tax. As we are the primary obligor with respect to exhibition activities,
the share of distributors in these proceeds is separately disclosed as distributors’
share. Amount of entertainment tax is shown as a reduction from revenue
Revenue from gift cards is recognised on the basis of availing the facility by the
customer. At the time of sale, the amounts received are recognised as deferred
revenue.
Share of profit in partnership firm is recognised on the basis of audited financial
statement of the Partnership firm.
Sale of food and beverages: Revenue from sale of food and beverages is recognised
upon sale and delivery at the counter.
Advertisement / sponsorship revenue: Revenue from advertisements, sponsorship and
events is recognised on the date of the exhibition of the advertisement or event, over
the period of the contract or on completion of our obligations, as applicable.
Management fee is recognised as revenue on a time proportion basis as per the
relevant agreement.
o Television/ Film Production and Related Income: Revenue from sale of content or motion
pictures is accounted for on the date of agreement to assign or sell the rights in the concerned
content or motion picture or on the date of release of the content or motion picture, whichever
is later. Program sales are accounted on the delivery of tape to the channel.
o Income from Film Distribution Activity: In case of distribution rights of motion pictures or
content, revenue is recognised on the date of release or exhibition. Revenue from other rights
such as satellite rights, overseas rights, music rights or video rights is recognised on the date
when the rights are made available to the assignee for exploitation. Revenue from sale of
VCDs/ DVDs is recognised when the risks and rewards of ownership are passed on to the
customer, which generally coincides with the dispatch of the products.
o Interest Income or Income from Film Financing: Interest income, including from film or
content related production financing, is recognised on a time proportion basis at the rate
implicit in the transaction.
o Dividend Income: Dividend income is recognised when the right to receive dividend is
unconditional at the balance sheet date.
o Marketing Rights or Rights to Profit: Amounts received in lieu of future marketing rights sale,
right to future profit from our business and other rights are recognised as income in the period
of entering into the contract.
Foreign Currency Transactions: Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of the transactions. Exchange differences arising on foreign
exchange transactions settled during the year are recognised in the statement of profit and loss of the
period. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date
are translated at the closing exchange rates on that date; the resultant exchange differences are
245
recognised in the statement of profit and loss except in case of exchange differences arising on
translation of monetary items which form part of our net investment in a non-integral foreign operation
which is accumulated in a ‘foreign currency translation reserve’ until its disposal. Non-monetary items
which are carried at historical cost denominated in a foreign currency are reported using the exchange
rate at the date of the transaction. Forward contracts are entered into to hedge the foreign currency risk
of the underlying transaction. The premium or discount on all such contracts arising at the inception of
each contract is amortised as income or expense over the life of the contract. Exchange difference on
forward contracts are recognised as income or expense in the statement of profit and loss of the period.
Any profit or loss arising on the cancellation and renewal of forward contract is recognised as income
or expense for the period.
Foreign Currency Translation: The consolidated financial statements are reported in Indian rupees in
accordance with AS-11 – ‘The Effects of Changes in Foreign Exchange Rates’ which specifies
translation of foreign subsidiaries on the basis of their classification as integral / non-integral to the
operations of the parent company.
Local currency financials of each integral foreign subsidiary into Indian Rupees is performed in respect
of assets and liabilities other than fixed assets, using the exchange rate in effect at the balance sheet
date and for revenue and expense items other than the depreciation costs, using average exchange rate
during the reporting period. Net exchange difference resulting from the above translation of the
financial statements of integral foreign subsidiaries is recognised in the consolidated statement of profit
and loss. Fixed assets are translated at exchange rates on the date of the transaction and depreciation on
fixed assets is translated at exchange rates used for translation of the underlying fixed assets.
Translation of local currency balances of each non-integral foreign subsidiary into Indian Rupees is
performed in respect of assets and liabilities at the exchange rate in effect at the balance sheet date and
for revenue and expense items at the average exchange rate during the reporting period. Net exchange
differences resulting from the above translation of the financial statements is accumulated in a ‘Foreign
currency translation reserve’, disclosed as reserves and surplus. The amount accumulated will be held
in this account till the time of disposal of the net investment in the subsidiary.
Leases: Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases
are recorded on a straight line basis over the lease term.
Borrowing costs: Borrowing costs that are attributable to the acquisition, construction or production of
qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that
necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs
are charged to revenue.
Recent Changes in Accounting Policies
1. Change in Accounting Policy for Depreciation, amortisation and impairment expense
During Fiscal 2009, we have charged depreciation as per the written down value method in the film
production services, production and distribution business and for unallocated assets at the rates
specified in Schedule XIV of the Companies Act till March 31, 2008. Commencing from April 1, 2008,
we changed our policy to charge depreciation as per the straight line method at the rates specified in
Schedule XIV of the Companies Act. For further details, please see the chapter entitled “Financial
Statements – Significant accounting policies and notes to the restated summary statements of the Group
– Significant changes in accounting policies and other adjustments (debited) / credited to the restated
financial statements on page F-1
Our Business Segments
Our business is divided into three segments on the basis of the nature of the businesses, the differing risks and
returns, the organisation structure and our internal reporting systems:
246
(a) Theatrical Exhibition: Theatrical exhibition operations comprise of single screen, multiplex, IMAX
cinema exhibition and a range of activities and services offered at our cinema theatres including
catering food and beverages.
(b) Film Production Services: Film production services primarily comprise of processing of raw exposed
films, colour correction, editing, digital processing, visual effects, equipment rental, copying and
printing of positive exhibition prints and trading in raw film rolls.
(c) Television, Film Production, Distribution and related services: Television and film production and
distribution operations comprise of the production of television or film content which is produced or
co-produced by us and includes relates services of financing for production of films. Film distribution
operations comprise of our share of revenue from exploitation and distribution rights acquired by us,
which may include as a package, theatrical rights and video and television rights.
247
The following table summarises our consolidated income and operating profit from our three business segments, for the six month ended March 31, 2013, Fiscals
2012, 2011, 2010 and 2009: (in ` lakhs except percentage amounts)
Business
Segment
Six month ended March 31,
2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Incom
e
% of
Total
Income
of
Three
Segme
nts
Operati
ng
Profit/
(Loss)
Income % of
Total
Income
of
Three
Segme
nts
Operati
ng
Profit/
(Loss)
Incom
e
% of
Total
Income
of
Three
Segme
nts
Operati
ng
Profit/
(Loss)
Incom
e
% of
Total
Income
of
Three
Segme
nts
Operati
ng
Profit/
(Loss)
Incom
e
% of
Total
Income
of
Three
Segme
nts
Operati
ng
Profit/
(Loss)
Theatrical
Exhibitio
n#
24,407.
00 69.42%
(13,366.
09)
86,307.5
0 69.99%
(30,380.
83)
54,678.
30 65.39%
(10,398.
60)
46,724.
80 64.37%
(4,953.7
0)
33,171.
14 50.31%
(4,545.6
0)
Film
Productio
n
Services#
6,353.4
0 18.07%
(7,443.5
1)
27,802.9
0 22.55%
(13,312.
94)
23,265.
50 27.83% (477.60)
15,764.
30 21.72%
3,067.4
2
13,057.
00 19.80%
3,538.9
6
Film
Productio
n and
Distributi
on#
4,389.9
0 12.51% 638.51 9,195.00 7.46% 1,965.80
5,670.5
0 6.78% 1,150.00
10,099.
00 13.91%
4,011.0
0
19,707.
20 29.89%
3,187.3
3
Total
35,159.
30
100.00
%
(20,171.
09
)
123,305.
40
100.00
%
(41,727.
97)
83,614.
30
100.00
%
(9,726.2
0)
72,588.
10
100.00
%
2,124.7
2
65,935.
34
100.00
%
2,180.6
9
248
# This includes part of Other Income allocated to each of our business segments and does not include unallocated revenue.
Additionally, we have considered our overseas operations as separately identifiable geographic segments due to substantial operations in the US and Malaysia.
The following table summarises our consolidated income from our four geographic segments, for the six month ended March 31, 2013, Fiscals 2012, 2011, 2010
and 2009:
(in ` lakhs except percentage amounts)
Geographic Segments Six month ended March 31, 2013 * Fiscal 2012* Fiscal 2011* Fiscal 2010* Fiscal 2009*
Income % of Total
Income of Three
Segments
Income % of
Total
Income
of Three
Segments
Income % of
Total
Income
of Three
Segments
Income % of
Total
Income
of Three
Segments
Income % of
Total
Income
of Three
Segments
India 28,333.10 80.58% 89,526.60 72.61% 60,277.90 72.09% 50,012.80 68.90% 52,324.04 79.36 %
United States of America 6,544.00 18.61% 20,636.40 16.74% 16,234.10 19.41% 15,679.80 21.60% 11,540.00 17.50%
Malaysia 0.00 0.00% 9,427.20 7.65% 5,615.70 6.72% 4,970.80 6.85% 1,491.10 2.26%
Others 282.20 0.81% 3,715.20 3.01% 1,486.60 1.78% 1,924.70 2.65% 580.20 0.88%
Total 35,159.30 100.00% 123,305.40 100.00% 83,614.30 100.00% 72,588.10 100.00% 65,935.34 100.00%
249
* This includes part of Other Income allocated to each of our business segments and does not include unallocated revenue.
Consolidated Results of Operations
The following table provides certain information with respect to our consolidated results of operations for six month ended March 31, 2013, Fiscals 2012, 2011,
2010 and 2009, as set forth in our audited restated consolidated financial statements. (in ` lakhs except percentage amounts)
Particulars Six month ended
March 31, 2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Revenue from operations 35,139.80 95.91%
123,441.4
0 98.37% 79,207.40 93.16% 71,507.20 95.64% 65,935.34 90.17%
Other income 1,498.00
4.09% 2,045.50 1.63% 5,818.80 6.84% 3,256.70 4.36% 7,184.90 9.83%
Total revenue 36,637.80
100.00
%
125,486.9
0
100.00
% 85,026.20
100.00
% 74,763.90
100.00
% 73,120.24
100.00
%
Expenditure
Direct operational expenses 14,321.70 39.09% 49,304.20 39.29% 31,059.80 36.53% 28,102.00 37.59% 23,868.30 32.64%
Employee benefits expense 8,975.90 24.50% 31,712.30 25.27% 20,979.80 24.67% 13,179.30 17.63% 10,147.60 13.88%
Other expenses 19,263.20 52.58% 65,209.31 51.97% 34,672.96 40.78% 25,317.05 33.86% 20,056.90 27.43%
Finance costs (net) 13,930.70 38.02% 39,751.40 31.68% 17,514.20 20.60% 11,717.20 15.67% 12,447.20 17.02%
Depreciation, amortization and impairment expense 7,723.40 21.08% 21,335.50 17.00% 13,226.50 15.56% 9,729.44 13.01% 13,542.41 18.52%
Total expenses 64,214.90
175.27
%
207,312.7
1
165.21
% 117,453.26
138.14
% 88,044.99
117.76
% 80,062.41
109.49
%
Loss before exceptional items, tax, minority
interest and share in associates
(27,577.1
0)
(75.27
%)
(81,825.8
1)
(65.21
%)
(32,427.06)
(38.14)
%
(13,281.09)
(17.76)
%
(6,942.17)
(9.49)
%
Exceptional items
(6,001.07
)
(16.38
%)
(8,181.50
) (6.52%)
Loss before tax, minority interest and share in
associates
(33,578.1
7)
(91.65
%)
(90,007.3
1)
(71,73
%)
(32,427.06)
(38.14)
%
(13,281.09)
(17.76)
%
(6,942.17)
(9.49)
%
Less: Provision for tax
250
Particulars Six month ended
March 31, 2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
Amount
(` in
lakhs)
% of
Total
Income
- Current tax 232.90 0.64% 769.50 0.61%
113.90 0.13%
39.77 0.05% 416.36 0.57%
- Deferred tax credit / (charge) (11.80) (0.03%) (492.59) (0.39%)
452.69 0.53%
13.25 0.02%
(69.44) (0.09)%
- Fringe benefit tax - - - - - 0.00% - 0.00%
171.70 0.23%
Loss after tax and before minority interest
(33,799.2
7)
(92.25
%)
(90,284.2
2)
(71.95
%)
(32,993.65)
(38.80)
%
(13,334.11)
(17.83)
%
(7,460.79)
(10.20)
%
Add: Share in profit of associate
Less: (Loss) / profit transferred to Minority interest
245.50 0.67%
732.40 0.58%
(196.70) (0.23)%
(530.87) (0.71)%
(322.12) (0.44)%
Net loss after tax before adjustment pursuant to
Schemes
(34,044.7
7)
(92.92
%)
(91,016.6
2)
(72.53
%)
(32,796.95)
(38.57)
%
(12,803.24)
(17.12)
%
(7,138.67)
(9.76)
%
Less: Adjustment pursuant to Radio Scheme of
Arrangement / Scheme of Amalgamation
- - - - (649.30) (0.89)%
Net loss as restated
(34,044.7
7)
(92.92
%)
(91,016.6
2)
(72.53
%)
(32,796.95)
(38.57)
%
(12,803.24)
(17.12)
%
(7,787.97)
(10.65)
%
251
INCOME
Our income comprises income from our operations and other income, each of which is described below.
Income from operations
Our income from operations is primarily comprised of income from our various businesses: theatrical exhibition, film production services and
television and film content production and distribution.
Theatrical Exhibition
The theatrical exhibition of films is our primary business and largest source of revenue, which is generated from the sale of admission tickets,
food and beverage sales, the sale of advertisement space and the utilisation of other facilities in our cinema theatres.
Film Production Services
Our film production services business is our second largest source of revenue, which is generated from the operation of services related to film
processing, film negatives trading, equipment rental, post-production and film restoration.
Television and Film Production and Distribution
We acquire various rights including the right to theatrical exhibition in India and overseas territories and home viewing format rights for films
for distribution on a commission basis or on an overflow basis for our distribution business. We typically acquire the rights to films that are
under production or are at a conceptual stage. We also engage in the co-production of films. Where we have co-produced films we realise our
revenue from these films including through the sale of rights for theatrical releases and satellite broadcast. BIG Synergy Media Limited, one of
our subsidiaries is engaged in the production of television content.
Interest Income
Interest income is primarily generated from certain fixed deposits that we maintain. We also generate interest income from loans given to our
employees and interest on inter-corporate deposits.
Other Income
Our other income primarily includes both recurring and non-recurring income. The recurring components of our
other income include dividend income, interest income, profit on sale of current investments, bad debts recovered, provisions and sundry
balances written back and foreign exchange gains. The non-recurring components of our other income include profits on option contracts, sale
and discarding of assets and sale of investments, profits from insurance and share of advertisement income.
Expenditure
Our expenditure consists generally of operating expenses, employee benefits expenses, administrative expenses, finance costs (net) and
depreciation / amortisation.
Direct operational expenses
Our operating expenses primarily comprise the following:
the production and processing of film negatives for our film services business;
distributors’ share in our theatrical exhibition business;
food and beverage costs;
overflow to producers; and
content production costs in the relation to our television and film content production and distribution business.
252
Cost of Negative Films
The production and processing of film negatives is a significant cost in relation to our film production services business. It primarily consists of
the cost of negatives purchased by us for trading and utilisation during processing.
Distributors’ Share in Our Theatrical Exhibition Business
In order to obtain the right to exhibit a film in our single-screen cinema theatres, we pay the distributor of the film a certain fixed percentage of
the relevant film’s gross or net box office collections. In order to obtain the right to exhibit a film in our multiplexes, we pay the distributor of
the film a percentage of our revenue based on the overall performance of the film at multiplexes in India, in accordance with the settlement
agreement reached in May 2009 between the Multiplex Association of India and the Film & Television Producers’ Guild of India. Pursuant to
the settlement agreement, we have entered into distribution agreements with major distributors in India which provide for a sliding scale of
payment of a distributor’s share based on a film’s performance. For the exhibition of films in the United States, we enter into agreements with
distributors in which a distributor’s share typically ranges from approximately 40.0% to 70.0% of box office collections, depending on the
location of the cinema theatre and the film.
Food and Beverage Costs
We purchase branded and unbranded food and beverage items from various vendors for preparation and sale in our theatres and multiplexes.
The cost of our food and beverage sales is determined by the type and quantity of items purchased, the controls we institute to reduce wastage
and the structure of the menu used in our theatres and multiplexes.
Overflow to Producers
When we acquire film distribution rights, we typically are required to pay a minimum guarantee to the producer of the content. Revenue
received in excess of such minimum guarantee is shared between us and the producer, according to terms of the relevant distribution agreement.
Content Production Costs
Content production costs relate to our television and film content production and distribution business and consist of costs such as equipment
rental, location rental, artist costs, other technical and profession personnel hiring and other incidental expenses at film and television content
production locations.
Electricity, power and water charges
Electricity, power and water charges are mainly pertaining to our theatrical exhibition business, wherein we incur cost of utilities for operation
of our theatres and also include cost of diesel for operation of generators for backup power at our cinemas and facilities.
Employee Benefits Expense
Employee benefits expenses consist primarily of expenses incurred towards payment of salaries, allowances and bonuses, contributions to the
employees’ provident fund and other welfare funds, gratuity and leave encashment and other staff welfare expenses. Our employee benefits
expenses have grown and are expected to continue to grow, primarily due to the increase in the number of cinema theatres we operate and the
expansion of our new businesses.
Other Expenses
Other expenses primarily include rent, legal and professional expenses, expenses for advertising and business promotion, travelling and
conveyance expenses, communication expenses, electricity charges, office, printing and stationary expenses.
253
Rent
Lease rent for theatrical exhibition is a major component of our cost.
Finance Costs
Our finance costs include interest and charges payable on borrowings and loss on derivative contracts. Interest primarily includes interest on
borrowings paid to banks and financial institutions and interest paid to corporate lenders on inter-corporate deposits. We borrow primarily to
meet our capital expenditure requirements and meet working capital shortfalls. Finance costs also include bank guarantee commissions paid to
banks towards guarantees given to our Subsidiaries, regulatory authorities and other officials in various states.
Depreciation and Amortisation Expense
We incur capital expenditure on lease improvements, plant and machinery, air conditioning equipment, theatrical equipment, data processing
equipment and office equipment. In our theatrical exhibition business, our plant and machinery include, among others, our projectors, sound
system equipment and equipment used for our concession counters in our cinema theatres. In our film production services business, our plant
and machinery include, among others, laboratory equipment used for processing of film negatives, scanners for the processing of exposed film,
subtitling equipment and cameras for our equipment rental business.
Immoveable assets at our leased premises, which include civil works and electrical items, are capitalised as leasehold assets and are amortised
over the primary period of lease.
Depreciation is provided on the basis of “Straight Line Method”, at the rates specified in Schedule XIV of the Companies Act or the rates based
on useful lives of the assets as estimated by the management, whichever is higher.
Individual assets costing less than ` 0.05 lakhs are fully depreciated in the year of acquisition. The depreciation is provided on pro rata basis on
the assets acquired, sold or disposed of during the relevant year. The annual depreciation rates are as provided below:
Asset Rate of Depreciation (%)
Plant and machinery 7.07% to 20%
Office equipment 10%
Furniture and fixtures 10% to 25%
Computers 20%
Vehicles 10%
Taxation
We are subject to income tax liability in India under the IT Act and overseas based on the relevant local laws of the particular jurisdiction. In
India, pursuant to the provisions of the IT Act we may also be liable to pay Minimum Alternate Tax based on book profit. We make provision
for current tax as well as for deferred tax liability based on our anticipated utilisation of tax charges carried forward. We have made necessary
provisions for fringe benefit tax as well.
Provision for Taxation
Current Tax: Current tax is the provision made for income tax liability on the profits for the applicable financial period in accordance with
applicable tax laws.
Deferred Tax: Deferred tax arises from timing differences between book profits (accounting) and taxable profits that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred tax is measured using tax rates and laws that have been enacted or
substantially enacted as of the date of our balance sheet.
Fringe Benefit Tax: In accordance with existing laws, we have provided for the necessary fringe benefit tax up to and including Fiscal 2009.
254
Six month ended March 31, 2013
Our results for six month period ended March 31, 2013 were primarily driven by the following key factors:
i) Closure of several loss making properties during the current period to reduce the operational losses suffered by the Exhibition business.
Income
Our total income was ` 36,637.80 lakhs for the six month period ended March 31, 2013.
Income from Operations
Our income from our operations was ` 35,139.80 lakhs for the six months ended March 31, 2013. (` in lakhs)
Particulars Six months ended March 31, 2013
Amount % of Total Income
Theatrical exhibition business:
Sale of tickets 18,267.70 49.86%
Entertainment tax (3,068.00) (8.37%)
Food and Beverage Sales 5,026.00 13.72%
Advertisements / Sponsorship revenue 1,928.60 5.26%
Others 2,233.20 6.09%
Total (a) 24,387.50 66.56%
Film Production Services Business:
Processing / printing of films 4,842.60 13.22%
Equipment / facility rental income 1,346.50 3.68%
Trading income 121.60 0.33%
Others 42.70 0.12%
Total (b) 6,353.40 17.34%
Income from television / films distribution and production
and related services (c) 4,398.90 12.01%
Total Income from Operations (a + b + c) 35,139.80 95.91%
Income from Theatrical Exhibition Business
Income from theatrical exhibition business was ` 24,387.50 lakhs for the six months ended March 31, 2013.
Our sale of tickets income was ` 18,267.70 lakhs for the six months ended March 31, 2013.
Food and beverage sales income for the six months ended March 31, 2013 was Rs. 5,026.00 lakhs, which was 27.51% of our gross box office
collections.
Advertisement / sponsorship income was ` 1,928.60 lakhs for the six months ended March 31, 2013.
Other revenue from exhibition business was ` 2,233.20 lakhs for the six months ended March 31, 2013.
Income from Film Production Services Business
Our income from film production services business was ` 6,353.40 lakhs for the six months ended March 31, 2013.
255
Income from processing and printing of films was ` 4,842.60 lakhs.
Income from equipment / facility rental income was ` 1,346.50 lakhs for the six months ended March 31, 2013.
Our income from film negatives trading was ` 121.60 lakhs.
Other film production services income increased was ` 42.70 lakhs.
Income from Television / Film Content Production and Distribution business
Our total income from our television / film content production and distribution business was ` 4,398.90 lakhs for the six months ended March
31, 2013.
Other Income
Our other income for the six months ended March 31, 2013 was ` 1,498.00 lakhs.
Expenditure (` in lakhs)
Particulars Six months ended March 31, 2013
Amount % of Total Income
Direct operational expenses 14,321.70 39.09%
Employee benefits expense 8,975.90 24.50%
Other expenses 19,263.20 52.58%
Finance costs (net) 13,930.70 38.02%
Depreciation, amortisation and impairment expense 7,723.40 21.08%
Total Expenditure 64,214.90 175.27%
Our expenditure was ` 64,214.90 lakhs for the six month ended March 31, 2013.
Direct Operating Expenses
Direct operating expenses were ` 14,321.70 lakhs for the six months ended March 31, 2013:
(` in lakhs)
Particulars Six months ended March 31, 2013
Amount
(` in lakhs)
% of Total Income
Distributors share 7,071.90 19.30%
Print, publicity expenses and Producers overflow 214.30 0.58%
Cost of production for television content 2,207.52 6.03%
Electricity, power and water charges 2,632.70 7.19%
Cost of food and beverage sold 1,499.70 4.09%
Cost of raw films sold 113.80 0.31%
Processing charges 140.70 0.38%
Other direct operational expenses 441.08 1.20%
Total 14,321.70 39.09%
Our revenue for television production was ` 4,111.62 lakhs and our cost of production of television content was ` 2,207.52 lakhs for the six
month period ended March 31, 2013 with a margin of 46.31%
Our cost of food and beverages as remained constant at about 29.84 % of our sale of food and beverages.
256
Employee benefits expense
Our employee benefits expenses were ` 8,975.90 lakhs for the six month period ended March 31, 2013.
Other Expenses
Our other expenses were ` 19,263.20 lakhs for the six month period ended March 31, 2013.
Finance Costs
Our finance cost was ` 13,930.70 lakhs for the six month period ended March 31, 2013.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense was ` 7,723.40 lakhs for the six months ended March 31, 2013.
Exceptional items
During six months ended March 31, 2013, the Company has recognised exceptional items of expenditure which consisted of:
i) The Company has undertaken an initiative for rationalization / improvement of overall Exhibition business, under which the Company is re-
negotiating rentals. As part of this initiative, rentals for several properties have been reduced, however in some cases the Company has
decided to exit the property. In these cases, ` 5,682.58 lakhs pertaining to these properties have been written off / provided to the statement
of profit and loss, thereby reducing subsequent cash losses suffered by the Company.
ii) A subsidiary of the Parent Company in Mauritius has provided certain advances and deposits – ` 318.49 lakhs.
Tax
Tax expenses were ` 221.10 lakhs for the six months ended March 31, 2013.
Minority Interest
Minority’s share of profit was ` 245.50 lakhs for the six months ended March 31, 2013.
(Loss)/Profit After Minority Interest After Adjustments pursuant to Schemes
Loss after minority interest after adjustments pursuant to Schemes was ` 34,044.77 lakhs for the six months ended March 31, 2013.
Fiscal 2012 compared to Fiscal 2011
Our results of operations for Fiscal 2012 were primarily driven by the following key factors:
i) We started delivery for the Digital Domain Production Inc. contract from our centres in Mumbai, India and London, United Kingdom.
ii) Subsequent bankruptcy of DDMG and acquisition of 30% controlling interest in Galloping Horse-Reliance LLC all through a court
approved process.
iii) Sale of our investments in Nepal and Malaysia in the exhibition business.
257
Further, during Fiscal 2012:
i) We sold our entire shareholding in our subsidiaries Sri Ramakrishna Theatres Limited, Rave Entertainment and Food Nepal Private
Limited, Reliance MediaWorks (Malaysia) Sdn. Bhd. and Reliance MediaWorks Big Cinemas Sdn. Bhd. and our Joint Venture Cineplex
Private Limited.
ii) We incorporated a new subsidiaries Reliance Media Consultant Private Limited and Reliance MediaVentures Private Limited with effect
from February 16, 2012 and June 19, 2012.
Income
Our total income was ` 85,026.20 lakhs in Fiscal 2011 to ` 125,486.90 lakhs in Fiscal 2012, for the reasons mentioned below.
Income from Operations
Our income from our operations was ` 79,207.40 lakhs for Fiscal 2011 and ` 123,441.40 lakhs for Fiscal 2012.
(` in lakhs)
Particulars Fiscal 2012 Fiscal 2011
Amount % of Total Income Amount % of Total Income
Theatrical exhibition business:
Sale of tickets 68,030.50 54.21% 39,009.50 45.88%
Entertainment tax (10,885.50) (8.67)% (5,098.90) (6.00)%
Food and Beverage Sales 19,396.40 15.46% 10,716.70 12.60%
Advertisements / Sponsorship revenue 3,498.40 2.79% 3,684.20 4.33%
Others 6,224.90 4.96% 3,066.40 3.61%
Total (a) 86,264.70 68.74% 51,377.90 60.43%
Film Production Services Business:
Processing / printing of films 22,905.30 18.25% 18,794.00 22.10%
Equipment / facility rental income 3,665.30 2.92% 2,084.60 2.45%
Trading income 1,304.30 1.04% 1,926.30 2.27%
Others 150.90 0.12% 44.30 0.05%
Total (b) 28,025.80 22.33% 22,849.20 26.87%
Income from television / films
distribution and production and
related services (c) 9,150.90 7.29% 4,980.30 5.86%
Total Income from Operations (a +
b + c) 123,441.40 98.37% 79,207.40 93.16%
Income from Theatrical Exhibition Business
Income from theatrical exhibition business was ` 51,377.90 lakhs in Fiscal 2011 and ` 86,264.70 lakhs in Fiscal 2012.
Our sale of tickets income was ` 39,009.50 lakhs in Fiscal 2011 and ` 68,030.50 lakhs in Fiscal 2012.
Food and beverage sales income for Fiscal 2012 was ` 19,396.40 lakhs vis-à-vis sales of ` 10,716.70 lakhs for Fiscal 2011. Food and beverage
sales income as a percentage of gross box office collections is 27.47% for Fiscal 2011 and 28.51% for Fiscal 2012 reflecting our increased focus
on food and beverage sales, our enhanced menu offerings at our cinemas.
258
Advertisement / sponsorship income was ` 3,498.40 lakhs for Fiscal 2012 vis-à-vis ` 3,684.20 lakhs for Fiscal 2011.
Other revenue from exhibition business was ` 6,224.90 lakhs for Fiscal 2012 vis-à-vis ` 3,066.40 lakhs for Fiscal 2011.
Income from Film Production Services Business
Our income from film production services business was ` 28,025.80 lakhs for Fiscal 2012 vis-à-vis ` 22,849.20 lakhs for Fiscal 2011.
Income from processing and printing of films was ` 22,905.30 lakhs for Fiscal 2012 vis-à-vis ` 18,794.00 lakhs for Fiscal 2011. The year
witnessed reduction in the share of analogue revenue due to increased trend of digitisation of movies.
Income from equipment / facility rental income was ` 3,665.30 lakhs for Fiscal 2012 vis-à-vis ` 2,084.60 lakhs for Fiscal 2011.
Our income from film negatives trading was ` 1,304.30 lakhs for Fiscal 2012 vis-à-vis ` 1,926.30 lakhs for Fiscal 2011.
Other film production services income increased was ` 150.90 lakhs for Fiscal 2012 vis-a-vis ` 44.30 lakhs for Fiscal 2011.
Income from Television / Film Content Production and Distribution business
Our total income from our television / film content production and distribution business was ` 9,150.90 lakhs for Fiscal 2012 vis-à-vis `
4,980.30 lakhs for Fiscal 2011.
Other Income
Our other income for Fiscal 2012 was ` 2,045.50 lakhs vis-à-vis ` 5,818.80 lakhs for Fiscal 2011. During Fiscal 2011, we had profit on sale of
fixed assets of ` 2,694.80 lakhs.
Expenditure (` in lakhs)
Particulars Fiscal 2012 Fiscal 2011
Amount % of Total Income Amount % of Total Income
Direct operational expenses 49,304.20 39.29% 31,059.80 36.53%
Employee benefits expense 31,712.30 25.27% 20,979.80 24.67%
Other expenses 65,209.31 51.97% 34,672.96 40.78%
Finance costs (net) 39,751.40 31.68% 17,514.20 20.60%
Depreciation, amortisation and
impairment expense 21,335.50 17.00% 13,226.50 15.56%
Total Expenditure 207,312.71 165.21% 117,453.26 138.14%
Our expenditure was ` 207,312.71 lakhs for Fiscal 2012 vis-à-vis ` 117,453.26 lakhs for Fiscal 2011.
Direct Operating Expenses
Direct operating expenses were ` 49,304.20 lakhs for Fiscal 2012 and ` 31,059.80 lakhs for Fiscal 2011. A breakup of our direct operating
expenses is as mentioned below:
Particulars Fiscal 2012 Fiscal 2011
Amount
(` in lakhs)
% of Total Income Amount
(` in lakhs)
% of Total Income
Distributors share 26,625.90 21.22% 16,027.20 18.85%
Print, publicity expenses and Producers overflow 163.70 0.13% 253.30 0.30%
Cost of production for television content 4,995.50 3.98% 3,185.20 3.75%
Electricity, power and water charges 8,847.40 7.05% 5,140.90 6.05%
259
Particulars Fiscal 2012 Fiscal 2011
Amount
(` in lakhs)
% of Total Income Amount
(` in lakhs)
% of Total Income
Cost of food and beverage sold 6,110.10 4.87% 3,382.40 3.98%
Cost of raw films sold 1,133.60 0.90% 1,667.10 1.96%
Processing charges 409.20 0.33% 332.10 0.39%
Other direct operational expenses 1,018.80 0.81% 1,071.60 1.26%
Total 49,304.20 39.29% 31,059.80 36.53%
Our revenue for television production was ` 4,334.55 lakhs in Fiscal 2011 and ` 8,825.23 lakhs in Fiscal 2012 and our cost of production of
television content was ` 3,185.20 lakhs for Fiscal 2011 and ` 4,995.50 lakhs. Our revenue for television production less cost of production of
television content in proportion to our revenue for television production leads to a margin of 26.52% in Fiscal 2011 and 43.40% in Fiscal 2012.
Our cost of food and beverages as remained constant at about 31.50% of our sale of food and beverages.
Employee benefits expense
Our employee benefits expenses were ` 31,712.30 lakhs for Fiscal 2012 vis-à-vis ` 20,979.80 lakhs for Fiscal 2011. As of September 30, 2012
we had 3,256 employees.
Other Expenses
Our other expenses were ` 65,209.31 lakhs for Fiscal 2012 vis-à-vis ` 34,672.96 lakhs for Fiscal 2011. The increase is primarily on account of
increased in our rent expenses.
Finance Costs
Our finance cost was ` 39,751.40 lakhs for Fiscal 2012 vis-à-vis ` 17,514.20 lakhs for Fiscal 2011, which included the loss on derivative
contracts of ` 5,966.80 lakhs in Fiscal 2012 and ` 2,166.90 lakhs in Fiscal 2011.
Our borrowings as of September 30, 2012 were ` 207,264.37 lakhs and ` 198,241.80 lakhs as of March 31, 2011.
We had borrowed a sum of ` 29,500 lakhs from Reliance Utility Engineers Private Limited and Reliance Infocomm Engineering Private Limited
in Fiscal 2012 towards repaying some of our outstanding obligations. These loans were subsequently converted to preference shares on March
31, 2012, thereby augmenting our net-worth and reducing our outstanding borrowings.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense was ` 21,335.50 lakhs for Fiscal 2012 vis-à-vis ` 13,226.50 lakhs for Fiscal 2011.
Exceptional items
During Fiscal 2012, the Company has recognised exceptional items of expenditure which consisted of:
i) Loss on sale of investment in subsidiaries in Malaysia, which operated in the theatrical exhibition business aggregating to ` 2,722.90 lakhs.
ii) Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary of Digital Domain Media Group Inc.
('DDMG') for various services rendered. On September 11, 2011, DDMG along with all its subsidiaries filed for bankruptcy proceedings in
the United States of America. The amount provided for outstanding balances is ` 2,774.80 lakhs.
iii) Loss on Litigation settlement by US subsidiary of ` 2,683.80 lakhs. The subsidiary was a defendant in a law suit regarding termination of a
lease. During the previous year, the said subsidiary received an adverse order for claim of damages by the landlord to the tune of USD 4.9
million. The US Supreme Court has denied an appeal filed by the subsidiary Company. Accordingly, the Subsidiary has made a provision of
260
` 2,683.80 for such claim along with other charges payable as per the order. Considering its nature same has been disclosed as an
exceptional item.
Tax
Tax expenses changed from ` 566.59 lakhs in Fiscal 2011 to ` 276.91 lakhs in the Fiscal 2012 due to reversal of deferred tax recognised by us in
earlier periods.
Minority Interest
Minority’s share of profit was ` 732.40 lakhs in Fiscal 2012 as compared to minority’s share of loss ` 196.70 lakhs in Fiscal 2011.
(Loss)/Profit After Minority Interest After Adjustments pursuant to Schemes
Loss after minority interest after adjustments pursuant to Schemes changed from ` 32,796.95 lakhs in Fiscal 2011 to ` 91,016.62 lakhs in the
Fiscal 2012.
Fiscal 2011 Compared to Fiscal 2010
Our results of operations for Fiscal 2011 were primarily driven by the following key factors:
i) Increase in the number of screens to 543 as of March 31, 2011 from 508 as of March 31, 2010; and
ii) Commencement, in Fiscal 2011, of commercial operation of our subsidiary Reliance MediaWorks Entertainment Services Limited, which is
engaged in the business of film restoration and conversion. This contributed to the improvement in our revenues from film production
services during Fiscal 2011.
Additionally, during the year our subsidiaries Adlabs Heritage LLC and Adlabs Digital Media LLC were dissolved and we acquired additional
49% stake in our subsidiary Big Cinemas Galaxy LLC, whereupon it became our wholly owned subsidiary. Consequently, to this extent, the
restated consolidated financial statements for Fiscal 2011 may not be directly comparable with the financial statements for Fiscal 2010.
Income
Our total income increased by 13.73% to ` 85,026.20 lakhs for Fiscal 2011 from ` 74,763.90 lakhs for Fiscal 2010, primarily as a result of
increase in revenue from theatrical exhibition and film production services.
Income from Operations
Our income from our operations increased by 10.77% to ` 79,207.40 lakhs for Fiscal 2011 from ` 71,507.20 lakhs for Fiscal 2010, primarily as
a result of increase in revenue from theatrical exhibition and film production services, which was partially offset by a decrease in income from
television and film content production and distribution. The following table provides details of our income from operations for Fiscals 2011 and
2010: (` in lakhs)
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total
Income
Amount % of Total
Income
Theatrical exhibition business:
Sales of tickets 39,009.50 45.88% 34,706.70 46.42%
Entertainment Tax (5,098.90) (6.00%) (3,958.20) (5.29%)
Food and Beverage Sales 10,716.70 12.60% 8,722.30 11.67%
Advertisements 3,684.20 4.33% 4,651.70 6.22%
Others 3,066.40 3.61% 2,587.50 3.46%
Total Theatrical Exhibition Business Income 51,377.90 60.43% 46,710.00 62.48%
261
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total
Income
Amount % of Total
Income
Film Production Services Business:
Processing and Printing of Film 18,794.00 22.10% 11,486.40 15.36%
Equipment and facilities rental income 2,084.60 2.45% 1,566.50 2.10%
Film Negatives Trading 1,926.30 2.27% 2,229.30 2.98%
Others 44.30 0.05% 72.30 0.10%
Total Film Production Services Business Income 22,849.20 26.87% 15,354.50 20.54%
Total Television and Film Content Production and Distribution
Income
4,980.30 5.86% 9,442.70 12.63%
Total Income from Operations 79,207.40 93.16% 71,507.20 95.64%
Income from Theatrical Exhibition Business
Our total income from our theatrical exhibition business increased by 9.99% to ` 51,377.90 lakhs for Fiscal 2011 from ` 46,710.00 lakhs for
Fiscal 2010, primarily as a result of increase in the number of screens under operation and the average realisations from theatres. The number of
our properties increased to 146 as of March 31, 2011 from 140 as of March 31, 2010. Due to the increase in our properties, our screens under
operation increased to 543 screens as of March 31, 2011 from 508 screens as of March 31, 2010. In addition to the increase in the number of
properties, we also derived realisations for full 12 months of Fiscal 2011 from 20 properties which had commenced operations during Fiscal
2010.
Our sale of tickets collections income increased by 12.40% to ` 39,009.50 lakhs for Fiscal 2011 from ` 34,706.70 lakhs for Fiscal 2010,
primarily as a result of increase in the number of screens under operation and average realisation from theatres due to an increase in the number
of multiplexes and an improvement in the business environment.
Food and beverage sales income increased by 22.87% to ` 10,716.70 lakhs for Fiscal 2011 from ` 8,722.30 lakhs for Fiscal 2010, primarily due
to the launch of new food products and combinations of food and beverages made available through a new menu at our cinema theatres.
Advertisement sponsorship income decreased by 20.80% to ` 3,684.20 lakhs for Fiscal 2011 from ` 4,651.70 lakhs for Fiscal 2010, mainly due
to the decrease in advertising expenditure incurred by our clients in view of adverse business and economic conditions.
Income from our other theatrical exhibition business increased by 18.51% from to ` 3,066.40 lakhs in Fiscal 2011 from ` 2,587.50 lakhs in
Fiscal 2010. Our other theatrical exhibition business mainly comprises of income from parking and kiosk rentals. The increase in our income
from other theatrical exhibition business was primarily on account of increase in footfalls and the number of our screens under operation.
Income from Film Production Services Business
Our total income from our film production services business increased by 48.81% to ` 22,849.20 lakhs for Fiscal 2011 from ` 15,354.50 lakhs
for Fiscal 2010, primarily as a result of growth in business related to digital conversion, movie restoration and equipment renting. Additionally,
our subsidiary, Reliance MediaWorks Entertainment Services Limited commenced operations in Fiscal 2011 and generated an income of `
4,293.37 lakhs.
Our income from processing and printing of films increased by 63.62% to ` 18,794.00 lakhs for Fiscal 2011 from ` 11,486.40 lakhs for Fiscal
2010 due to an improvement in our analogue film processing. During Fiscal 2011 we processed 372,484,000 feet of films as compared to
358,387,000 feet in Fiscal 2010. Consequently our income from processing of films increased to ` 5,978.75 lakhs in Fiscal 2011 from `
5,680.03 lakhs in Fiscal 2010.
Our income from equipment and facility rental increased by 33.07% to ` 2,084.60 lakhs for Fiscal 2011 from ` 1,566.50 lakhs for Fiscal 2010,
primarily as a result of completion of phase I of our new studio facility in January 2011 and consequent commencement of its renting.
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Our income from film negatives trading decreased by 13.59% to ` 1,926.30 lakhs for Fiscal 2011 from ` 2,229.30 lakhs for Fiscal 2010,
primarily as a result of decrease in the number of cans of negative sold from 18,41,000 cans in Fiscal 2010 to 13,75,800 cans in Fiscal 2011.
Our other film services income decreased by 38.73% to ` 44.30 lakhs in Fiscal 2011 from ` 72.30 lakhs in Fiscal 2010.
Income from Television and Film Content Production and Distribution Business
Our total income from our television and film content production and distribution business decreased by 47.26% to ` 4,980.30 lakhs for Fiscal
2011 from ` 9,422.70 lakhs for Fiscal 2010, primarily as a result of reduction in the number of movies distributed by us in Fiscal 2011.
Other Income
Our other income increased by 78.67% to ` 5,818.80 lakhs for Fiscal 2011 from ` 3,256.70 lakhs for Fiscal 2010, primarily as a result of the
profit realised on sale of fixed assets amounting to ` 2,694.80 lakhs, which were leased back subsequently, and recovery of bad debts or
provision written back amounting to ` 1,405.50 lakhs in Fiscal 2011.
Expenditure (` in lakhs)
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total Income Amount % of Total Income
Direct Operational Expenses 31,059.80 36.53% 28,102.00 37.59%
Employee benefits expense 20,979.80 24.67% 13,179.30 17.63%
Other expenses 34,672.96 40.78% 25,317.05 33.86%
Finance costs (net) 17,514.20 20.60% 11,717.20 15.67%
Depreciation, amortisation and impairment
expense
13,226.50 15.56% 9,729.44 13.01%
Total Expenditure 117,453.26 138.14% 88,044.99 117.76%
Our expenditure increased by 33.40% to ` 117,453.26 lakhs for Fiscal 2011 from ` 88,044.99 lakhs for Fiscal 2010, primarily as a result of
increases in direct operational expenses, employee benefits expenses and administrative and other expenses, and finance costs (net).
Direct Operational Expenses
The key components of our direct operational expenses are detailed in the following table: (` in lakhs)
Particulars Fiscal 2011 Fiscal 2010
Amount % of Total Income Amount % of Total Income
Distributors’ share 16,027.20 18.85% 15,782.50 21.11%
Print, publicity expenses and producers overflow 253.30 0.30% 333.80 0.45%
Cost of production for television content 3,185.20 3.75% 1,915.60 2.56%
Electricity, power and water charges 5,140.90 6.05% 4,173.90 5.58%
Cost of food and beverage sold 3,382.40 3.98% 2,618.30 3.50%
Cost of raw films sold 1,667.10 1.96% 2,007.00 2.68%
Processing charges 332.10 0.39% 509.00 0.68%
Other Direct Expenses 1,071.60 1.26% 761.90 1.02%
Total 31,059.80 36.53% 28,102.00 37.59%
Direct operational expenses increased by 10.53% to ` 31,059.80 lakhs for Fiscal 2011 from ` 28,102.00 lakhs for Fiscal 2010. This increased
primarily as a result of increases in Fiscal 2011 in (i) the cost of production for television content caused by an increase in the content
production and distribution undertaken by us during this Fiscal, (ii) utilities charges due to increased cost of fuel and other inputs and an
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increase in the number of screens operated by us, (iii) and an increase in cost of food and beverages sold resulting from the increase in the
number of screens operated by us customer footfalls.
Employee benefits expense
Our employee benefits expenses increased by 59.19% to ` 20,979.80 lakhs for Fiscal 2011 from ` 13,179.30 lakhs for Fiscal 2010, primarily as
a result of an increase in the number of employees to 6,644 as of March 31, 2011 as compared to 5,634 as of March 31, 2010 due to the
commencement of our production and post-production services for television commercials, VFX services, studio located at the Film City,
Mumbai, and digital conversion and restoration services.
Other Expenses
Our administrative and other expenses increased by 36.95% to ` 34,672.96 lakhs for Fiscal 2011 from ` 25,317.05 lakhs for Fiscal 2010,
primarily as a result of increases in costs due to rent and miscellaneous costs.
Finance Charges
Our finance costs (net) increased by 49.47% to ` 17,514.20 lakhs for Fiscal 2011 from ` 11,717.20 lakhs for Fiscal 2010, primarily as a result of
utilisation of borrowed funds for capital expenditure. Additionally, during Fiscal 2011, the interest rate on our borrowing increased, we incurred
expenditure on the interest rate swap for hedging the interest rates on our long term syndicated bank loan and we incurred foreign exchange loss
due to redemption of FCCBs.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense increased by 35.94% to ` 13,226.50 lakhs for Fiscal 2011 from ` 9,729.44 lakhs for Fiscal
2010, primarily as a result of increase in our assets due to the capital expenditure incurred and full year utilisation of certain assets during Fiscal
2011.
Tax
Tax increased by 968.63% to ` 566.59 lakhs for Fiscal 2011 from ` 53.02 lakhs for Fiscal 2010, primarily as a result of deferred tax, which
increased to ` 452.69 lakhs for Fiscal 2011 as from ` 13.25 lakhs for Fiscal 2010.
Minority Interest
Share of the minority interest in our losses was ` 196.70 lakhs for Fiscal 2011 as compared to ` 530.87 lakhs for Fiscal 2010.
(Loss)/Profit After Minority Interest After Adjustments Pursuant to Schemes
Loss after minority interest after adjustments increased to ` 32,796.95 lakhs for Fiscal 2011 from ` 12,803.24 lakhs for Fiscal 2010, primarily as
a result of increases in employee benefits expenses, administrative and other expenses, finance costs (net) and depreciation, amortisation and
impairment expense.
Fiscal 2010 Compared to Fiscal 2009
Our results of operations for Fiscal 2010 were primarily driven by the following key factors:
i) the expansion of our theatrical exhibition business;
ii) the acquisition of assets related to processing laboratory acquired by us from Vectrox Limited; and
iii) the expansion of our equipment rental business.
Additionally, during the year our subsidiaries BIG Cinemas Union LLC and Adlabs Forum LLC were dissolved, we acquired 100% stake in
Reliance MediaWorks Entertainment Services Limited, whereupon it became our wholly owned subsidiary, we registered three new subsidiaries
being Reliance Media Works VFX Inc., Adlabs Globalstar LLC and Reliance Media and Marketing Communications LLC, we purchased the
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balance 10% of the outstanding shares of Reliance Lowry Digital Imaging Services Inc., pursuant to which it became our wholly owned
subsidiary and we diluted our shareholding in BIG Cinemas Sahil LLC by 3%. Consequently, to this extent, the restated consolidated financial
statements for Fiscal 2010 may not be directly comparable with the financial statements for Fiscal 2009.
Income
Our total income increased by 2.25% to ` 74,763.90 lakhs for Fiscal 2010 from ` 73,120.24 lakhs for Fiscal 2009, primarily as a result of an
increase in our total theatrical exhibition business income by 40.82% to ` 46,710.00 lakhs for Fiscal 2010 from ` 33,171.14 lakhs for Fiscal
2009, an increase in film production services income by 17.60% to ` 15,354.50 lakhs for Fiscal 2010 from ` 13,057.00 lakhs for Fiscal 2009,
which was partially offset by a decrease in our total television and film content production and distribution income by 52.09% to ` 9,442.70
lakhs for Fiscal 2010 from ` 19,707.20 lakhs for Fiscal 2009.
Income from Operations
Our income from our operations increased by 8.45% to ` 71,507.20 lakhs for Fiscal 2010 from ` 65,935.34 lakhs for Fiscal 2009, primarily as a
result of increases in our total theatrical exhibition business income and film production services income, which, was partially offset by a
decrease in our total television and film content production and distribution income. The following table provides details of our income from
operations for Fiscals 2010 and 2009:
(` in lakhs)
Particulars Fiscal 2010 Fiscal 2009
Amount % of Total
Income
Amount % of Total
Income
Theatrical exhibition business:
Sale of tickets 34,706.70 46.42% 25,864.40 35.37%
Entertainment Tax (3,958.20) (5.29)% (2,288.70) (3.13)%
Food and Beverage Sales 8,722.30 11.67% 6,470.34 8.85%
Advertisements / Sponsorship 4,651.70 6.22% 1,465.20 2.00%
Others 2,587.50 3.46% 1,659.90 2.27%
Total Theatrical Exhibition Business Income 46,710.00 62.48% 33,171.14 45.37
Film Production Services Business:
Processing and Printing of Film 11,486.40 15.36% 9,299.80 12.72%
Equipment/ Facility Rental 1,566.50 2.10% 612.40 0.84%
Film Negatives Trading 2,229.30 2.98% 3,077.40 4.21%
Others 72.30 0.10% 67.40 0.09%
Total Film Production Services Business Income 15,354.50 20.54% 13,057.00 17.86%
Total Television and Film Content Production and
Distribution Income
9,442.70 12.63% 19,707.20 26.95%
Total Income from Operations 71,507.20 95.64% 65,935.34 90.17%
Income from Theatrical Exhibition Business
Our total income from our theatrical exhibition business increased by 40.82% to ` 46,710.00 lakhs for Fiscal 2010 from ` 33,171.14 lakhs for
Fiscal 2009, primarily as a result of an increase in the scale of our operations in India and the effect of accruing a full year of revenue for our
theatrical exhibition business operations in Malaysia. Our number of properties increased to 140 properties as of March 31, 2010 from 115
properties as of March 31, 2009. Our number of screens increased to 508 screens as of March 31, 2010 from 429 screens as of March 31, 2009.
Our sale of tickets collections income increased by 34.19% to ` 34,706.70 lakhs for Fiscal 2010 from ` 25,864.40 lakhs for Fiscal 2009,
primarily as a result of an increase in the number of our cinema theatres in India and the effect of accruing a full year of revenue for our
theatrical exhibition business operations in Malaysia.
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Food and beverage sales income increased by 34.80% to ` 8,722.30 lakhs for Fiscal 2010 from ` 6,470.34 lakhs for Fiscal 2009, primarily as a
result of an increase in the number of our cinema theatres and an improved menu.
Advertisement sponsorship income increased by 217.48% to ` 4,651.70 lakhs for Fiscal 2010 from ` 1,465.20 lakhs for Fiscal 2009, primarily
as a result of increased monetisation of available space in the Indian and overseas markets and the launch of several initiatives for co-branding
and promotion of our products.
Income from Film Production Services Business
Our total income from our film production services business increased by 17.60% to ` 15,354.50 lakhs for Fiscal 2010 from ` 13,057.00 lakhs
for Fiscal 2009, primarily as a result of our expansion into new business areas such as equipment rental.
Our income from the processing and printing of film increased by 23.51% to ` 11,486.40 lakhs for Fiscal 2010 from ` 9,299.80 lakhs for Fiscal
2009, primarily as a result of the full year effect of the acquisition of our Subsidiary, Lowry Digital.
Our income from equipment rental increased by 155.80% to ` 1,566.50 lakhs for Fiscal 2010 from ` 612.40 lakhs for Fiscal 2009, primarily as a
result of an increase in the number of cameras we rented and the rental of specialised equipment.
Our income from film negatives trading decreased 27.56% to ` 2,229.30 lakhs for Fiscal 2010 from ` 3,077.40 lakhs for Fiscal 2009, primarily
as a result of reduction in sales volume.
Income from Television and Film Content Production and Distribution Business
Our total income from our television and film content production and distribution business decreased by 52.09% to ` 9,442.70 lakhs for Fiscal
2010 from ` 19,707.20 lakhs for Fiscal 2009, primarily as a result of the non-availability of popular, large-budget content.
Other Income
Our other income decreased by 54.67% to ` 3,256.70 lakhs for Fiscal 2010 from ` 7,184.90 lakhs for Fiscal 2009, primarily as a result of
reduced income from, among other sources, dividends, the sale of long term investments and consultation fees.
Expenditure
(` in lakhs)
Particulars Fiscal 2010 Fiscal 2009
Amount % of Total
Income
Amount % of Total
Income
Direct Operational Expenses 28,102.00 37.59% 23,868.30 32.64%
Employee benefits expense 13,179.30 17.63% 10,147.60 13.88%
Other Expenses 25,317.05 33.86% 20,056.90 27.43%
Finance costs (net) 11,717.20 15.67% 12,447.20 17.02%
Depreciation, amortisation and impairment expense 9,729.44 13.01% 13,542.41 18.52%
Total Expenditure 88,044.99 117.77% 80,062.41 109.49%
Our expenditure increased by 9.97% to ` 88,044.99 lakhs for Fiscal 2010 from ` 80,062.41 lakhs for Fiscal 2009, primarily as a result of
increases in direct operational expenses, employee benefits expenses and administrative and other expenses, partially offset by a decrease in
depreciation, amortisation and impairment expense.
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Direct Operational Expenses
The key components of our direct operational expenses are detailed in the following table:
Particulars Fiscal 2010 Fiscal 2009
Amount
(` in lakhs)
% of Total Income Amount
(` in lakhs)
% of Total Income
Distributors’ share 15,782.50 21.11% 8,758.10 11.98%
Print, publicity expenses and Producers overflow 333.80 0.45% 2,029.20 2.78%
Cost of production for television content 1,915.60 2.56% 2,510.30 3.43%
Electricity, power and water charges 4,173.90 5.58% 3,640.50 4.98%
Cost of food and beverage sold 2,618.30 3.50% 2,020.70 2.76%
Cost of raw films sold 2,007.00 2.68% 3,008.70 4.11%
Processing charges 509.00 0.68% 1,331.40 1.82%
Other Direct Expenses 761.90 1.02% 569.40 0.78%
Total 28,102.00 37.59% 23,868.30 32.64%
Direct operational expenses increased by 17.74% to ` 28,102.00 lakhs for Fiscal 2010 from ` 23,868.30 lakhs for Fiscal 2009, primarily as a
result of an increase in amounts paid for distributors’ share caused by the addition of new cinema theatres.
Employee benefits expense
Our employee benefits expenses increased by 29.88% to ` 13,179.30 lakhs for Fiscal 2010 from ` 10,147.60 lakhs for Fiscal 2009, primarily as
a result of an increase in the number of employees to 5,634 as of March 31, 2010 as compared to 2,382 as of March 31, 2009 to operate
additional cinema theatres and the new businesses initiated by us during this Fiscal.
Other Expenses
Our administrative and other expenses increased by 26.23% to ` 25,317.05 lakhs for Fiscal 2010 from ` 20,056.90 lakhs for Fiscal 2009,
primarily as a result of increases in costs due to rent, legal and professional fees, facility maintenance charges, labour charges, advertisement,
repairs and miscellaneous costs.
Finance Charges
Our finance costs (net) decreased by 5.86% to ` 11,717.20 lakhs for Fiscal 2010 from ` 12,447.20 lakhs for Fiscal 2009, primarily as a result of
lower expenditure on hedging of loans and interest and foreign exchange gain due to redemption of FCCBs, which was partially offset by an
increase in the utilisation of borrowed funds for capital expenditure.
Depreciation, amortisation and impairment expense
Depreciation, amortisation and impairment expense decreased by 28.16% to ` 9,729.44 lakhs for Fiscal 2010 from ` 13,542.21 lakhs for Fiscal
2009, primarily as a result of a reduction in our amortisation cost of films due to a reduction in the number of films released during this Fiscal.
Tax
Tax decreased by 89.78% to ` 53.02 lakhs for Fiscal 2010 from ` 518.62 lakhs for Fiscal 2009, primarily as a result of withdrawal of the fringe
benefit tax during this Fiscal 2010 as compared to charge of ` 171.70 lakhs for Fiscal 2009, deferred tax (net) was ` 13.25 lakhs for Fiscal 2010
as compared to a credit of ` 69.44 lakhs for Fiscal 2009 and lower profit, in accordance with the IT Act, in Big Synergy Media Limited.
Minority Interest
Share of the minority interest in our losses was ` 530.87 lakhs for Fiscal 2010 as compared to ` 322.12 lakhs for Fiscal 2009.
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(Loss)/Profit After Minority Interest After Adjustments and Pursuant to Schemes
Loss after minority interest after adjustments increased to a loss of ` 12,803.24 lakhs for Fiscal 2010 from a loss of ` 7,787.97 lakhs for Fiscal
2009, primarily as a result increased interest costs, including losses from derivative contracts, depreciation, amortisation and impairment
expense.
Liquidity and Capital Resources
We operate in a capital intensive industry. Our primary liquidity needs have been to finance our operations, working capital needs, acquisitions
and expansions, dividend payments and debt servicing. We have historically funded such capital expenditures through a combination of internal
cash flows and borrowings. The following table sets forth a summary of our cash flows for the six months ended March 31, 2013, Fiscals 2012,
2011, 2010 and 2009:
(In ` lakhs)
Six months
ended March
31, 2013
Fiscal 2012 Fiscal 2011
Fiscal 2010 Fiscal 2009
Net cash (used in) / generated from operating
activities (7,320.59) (8,288.22) (5,216.62) 5,294.43 1,565.71
Net cash generated from /(used in) investing
activities (1,307.14) (3,161.67) 746.68 (46,562.73) (23,791.91)
Net cash generated/(used in) financing activities 10,119.13 12,322.90 5,414.50 41,993.29 23,650.40
Net increase/(decrease) in cash and cash equivalents 1,491.40 873.01 944.56 724.99 1,424.20
Cash in the form of bank deposits, current account balances and cash on hand represents our cash and cash equivalents.
Net cash generated from Operating Activities
Net cash used in operations in the six months ended March 31, 2013 was ` 7,320.59 lakhs primarily due to higher losses incurred by the
Company in the Fiscal 2012.
Net cash used in operations in the Fiscal 2012 was ` 8,288.22 lakhs primarily due to higher losses incurred by the Company in the Fiscal 2012.
Net cash used in operations in Fiscal 2011 was ` 5,216.62 lakhs, primarily as a result of higher losses incurred during Fiscal 2011.
In Fiscal 2010 we generated ` 5,294.43 lakhs as net cash from operating activities, primarily as a result of a smaller increase in sundry debtors
and greater finance costs (net), partially offset by a larger net loss before tax and an increase in loans and advances.
Net cash used in operations in Fiscal 2009 was ` 1,565.71 lakhs primarily due to increase in sundry debtors, trade payments and loss during the
year.
Net cash generated from Investing Activities
Net cash used in investing activities was ` 1,307.14 lakhs in the six months ended March 31, 2013 primarily due to our investment in GH –
Reliance LLC.
Net cash used in investing activities was ` 3,161.67 lakhs in Fiscal 2012 primarily due to our investment in purchase of fixed assets and
advances given towards share application partially offset by sale of our investment in subsidiaries.
Net cash generated from investing activities was ` 746.68 lakhs in Fiscal 2011. Key investments during Fiscal 2011 included, purchase of fixed
assets of ` 22,335.80 lakhs and redemption of mutual fund units aggregating ` 7,983.98 lakhs.
Net cash used in investing activities was ` 46,562.73 lakhs in Fiscal 2010. Key investments during Fiscal 2010 comprised of purchase of fixed
assets of ` 40,917.60 lakhs and investments in mutual fund units aggregating ` 7,982.03 lakhs.
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Net cash used in investing activities was `(23,791.91) lakhs in Fiscal 2009, which primarily consisted of the purchase of fixed assets
aggregating ` 35,911.00 lakhs and amounts paid for acquisition of companies which are, presently, our subsidiaries aggregating ` 7,861.20
lakhs, partially offset by proceeds on the sale of long term investments/rights therein of ` 3,127.30 lakhs and redemption of mutual fund units
aggregating ` 13,556.69 lakhs .
Net cash generated from Financing Activities
Net cash from financing activities was ` 10,119.13 lakhs for the six months ended March 31, 2013 due to raising of funds on short term basis
through inter-corporate deposits.
Net cash from financing activities was ` 12,322.90 lakhs during Fiscal 2012 due to repayment of debts during the period of ` 24,565.12 lakhs,
which was offset by funds raised through issue of 10%, 29,50,000 Redeemable Non Convertible Preference Shares of `5 each at a price of `
1,000 aggregating ` 29,500 lakhs.
Net cash generated from financing activities in Fiscal 2011 was ` 5,414.50 lakhs. During Fiscal 2011, we raised ` 39,775.90 lakhs from long
term borrowings and repaid ` 17,083.30 lakhs and ` 1,003.80 lakhs towards long term loans and short term loans (net), respectively.
Net cash generated from financing activities was ` 41,993.29 lakhs in Fiscal 2010, which primarily consisted of proceeds from short term
borrowings (net) of ` 52,962.60 lakhs and proceeds from long term borrowings of ` 5,489.00 lakhs, partially offset by interest expense and
finance charges (net) of ` 13,414.80 lakhs.
Net cash generated from financing activities was ` 23,650.40 lakhs in Fiscal 2009, which primarily consisted of proceeds from short term
borrowings (net) of ` 31,271.20 lakhs and proceeds from long term borrowings of ` 7,826.10 lakhs, partially offset by interest expense and
finance charges (net) of ` 11,287.10 lakhs, and payment of dividend of `1,574.90 lakhs.
Contingent Liabilities
For details in relation to our contingent liabilities, please see the chapter entitled “Financial Statements” on page F-1 of this Letter of Offer.
Indebtedness
For details in relation to the Company’s indebtedness, please see the chapter entitled “Financial Indebtedness” on page 225 of this Letter of
Offer.
Capital Commitments and Lease Obligations
For details in relation to our Capital Commitments and Lease Obligations, please see the chapter entitled “Financial Statements” at page F-1 of
this Letter of Offer.
Off-Balance Sheet Arrangements
Derivative Instruments
Details of indemnification contract entered into by the Company
In March 2008, the Company entered into had two outstanding derivative contracts – interest rate swap for its long term loans and foreign
currency option for outstanding FCCB’s, details of which are as follows:
a. Interest rate swap – Our Company had availed a term loan from a bank with fixed rate of interest based on either the government of India
bond rates or State Bank of India prime lending rate. The interest rate swap allowed our Company to swap its fixed rupee interest liability
either USD LIBOR or YEN LIBOR at the option of the lender.
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b. An EURO call option contract with knockouts for quarterly validity with strike price being fixed at each fixing date and a pre-determined
knock out range of fixing price + 0.0700. Further, our Company as part of the option deal, has also sold a EUR / USD put option in the
event a knock in happens at a barrier rate (fixing rate - 0.0400) then Bank has the option to buy EUR from the Company at the fixing rate.
The Company has entered into these derivative contracts based on the advice it has received from a party (Assignee). As per the consultancy and
indemnity agreements entered into with the Assignee, the Assignee has to indemnify the Company of mark to market losses suffered by it on
derivative contracts except for losses suffered on pre-mature termination of the contract. These agreements specify that the Company shall pay
the Assignee a certain fixed fee of, and a variable fee based on, performance of the derivative contracts.
Based on such advice, the Company has not considered the mark to market losses as of the balance sheet date in its profit and loss account.
Capital Expenditure
Historical Capital Expenditure
The following table sets forth our historical capital expenditure by segment for the six months ended March 31, 2013, Fiscals 2012, 2011, 2010
and 2009:
(` in lakhs)
Particular
s
Six months ended
March 31, 2013
Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009
Amoun
t
% of Total
Capital
Expenditur
e
Amoun
t
% of Total
Capital
Expenditu
re
Amount % of Total
Capital
Expenditu
re
Amount % of Total
Capital
Expenditur
e
Amount % of Total
Capital
Expenditur
e
Theatrical
Exhibition 436.79 27.98
2,488.6
0 39.19 5,860.10 26.16
18,905.7
0 43.87
36,854.7
0 88.05
Film
Production
Services
1,119.8
6 71.74
3,786.5
0 59.63
16,464.2
0 73.49
23,533.8
0 54.61 4,810.90 11.50
Television
and Film
Content
Production
and
Distributio
n 4.44 0.28 23.10 0.36 19.20
0.09
483.20 1.12 - -
Unallocate
d - - 51.90 0.82 58.70
0.26
168.60 0.40 186.30 0.45
Total 1,561.0
9 100.00
6,350.1
0 100.00
22,402.2
0
100.00 43,091.3
0 100.00 41,851.9
0 100.00
Related Party Transactions
For details of the related party transactions, please see the chapter entitled “Financial Statements - Statement of Related Party Transactions” at
page F-1 of this Letter of Offer.
Quantitative and Qualitative Disclosure about Market Risk
Market risk is the risk of loss related to adverse changes in market prices, including interest rate and foreign exchange rates of financial
instruments. We are exposed to various types of market risks, in the normal course of our business. The following discussion and analysis,
which constitute “forward-looking statements” that involve risk and uncertainties, summarise our exposure to different market risks.
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1. Unusual or Infrequent Events or Transactions
Except as described in the section entitled ‘Risk Factors’ at page 11 and ‘Financial Statements’ on page F-1of this Letter of Offer, there
have been no other events or transactions that, to the knowledge of the management of our Company, may be described as “unusual” or
“infrequent”.
2. Significant Economic Changes
Other than as mentioned under the part “Factors Affecting Results of Performance” in this chapter, to the knowledge of the
management of our Company, there are no other significant economic changes that materially affect or are likely to affect income from
continuing operations.
3. Known Trends or Uncertainties
Our business has been affected and we expect will continue to be affected by the trends identified above in the part entitled “Factors
Affecting our Results of Operations and Financial Condition” and the uncertainties described in the chapter entitled “Risk Factors” at
page 11 of this Letter of Offer. To our knowledge, except as described or anticipated in this Letter of Offer as mentioned above, there
are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.
4. Future Relationship Between Costs and Income
Other than as described in this Letter of Offer, particularly in this chapter, to the knowledge of the management of our Company, there
are no known factors that might affect the future relationship between costs and revenues.
5. Material Increases in Net Sales or Revenue due to Increased Sales Volume, Introduction of New Products or Services, or
Increased Sales Prices
Changes in revenues during the last three years are as explained in the part “Fiscal 2011 compared to Fiscal 2010” and “Fiscal 2010
compared to Fiscal 2009” in this chapter.
6. Total Turnover of Each Major Industry Segment in Which the Issuer Company Operated
We operate in the media and entertainment industry. We currently operate in three business segments; namely theatrical exhibition,
film production services facility and television / film production and distribution. Relevant published data, as available, has been
included in the chapter entitled ‘Industry Overview’ at page 138 of this Letter of Offer.
7. Status of Any Publicly Announced New Products or Business Segment
Except as described in this chapter and the chapters entitled ‘Our Business’ and ‘Risk Factors’ at pages 149 and 11, respectively, of this
Letter of Offer, there are currently no publicly announced new products or business segments.
8. Seasonality of Business
Our business is not seasonal. Our business is largely dependent on the state of economy and overall economic conditions prevailing
both locally and globally. The level of our operations, income and profitability may be affected by these factors. For further details in
this regard, please see the chapter entitled ‘Risk Factors’ at page 11 of this Letter of Offer.
9. Supplier or Customer Concentration
Our business is not significantly dependent on any of our suppliers or customers.
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10. Competitive Conditions
We have many competitors who are present in the exhibition, film processing, TV content production, equipment rental, digital
intermediate lab, digital cinema mastering and restoration business. In the future we may also face competition from global
entertainment companies who may establish operations in India. Besides, our exhibition business is subject to varying degrees of
competition in the geographic areas in which we operate. These competitors may be national players, regional players or smaller
independent exhibitors. For further details in this regard, please see the chapter entitled ‘Risk Factors’ at page 11 of this Letter of Offer.
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STOCK MARKET DATA
The Equity Shares of our Company have been listed on the BSE and the NSE since January 8, 2001 and January 10, 2001, respectively. The
tables below set forth, for the periods indicated the high, low and average closing prices and the trading volumes on the BSE and the NSE for
our Company’s Equity Shares.
As on the date of this Letter of Offer, 4,61,26,170 Equity Shares have been issued and are fully paid up.
The following tables set forth the reported high, low and average market prices of the Equity Shares of our Company on the BSE and the NSE
for the calendar years 2010, 2011 and 2012.
BSE
Calendar Year High (`) Date of High Volume on
date of High Low (`) Date of Low Volume on
date of Low Average Price
(`)
2010 309.00 October 6, 2010 42,63,296 160.40 May 26, 2010 37,480 222.81
2011 236.20 January 3, 2011 6,78,081 66.10 December 20,
2011
49,806 125.39
2012 103.80 December 3, 2012 17,12,026 49.00 May 31, 2012 90,111 72.41
(Source: www.bseindia.com)
NSE
Calendar Year High (`) Date of High Volume on
date of High Low (`) Date of Low Volume on
date of Low Average Price
(`)
2010 309.00 October 6, 2010 1,46,82,789 161.65 May 27, 2010 2,94,145 222.92
2011 236.00 January 3, 2011 15,67,560 66.10 December 20,
2011
1,38,119 125.44
2012 103.75 December 3, 2012 40,59,242 49.00 June 4, 2012 1,26,079 72.44
(Source: www.nseindia.com)
Notes
High and Low for the period are based on intra day prices and Average Price is based on average of closing price. In case of two days with the same closing price, the date with higher volume has been considered.
The following tables set forth the reported high, low and average market prices of the Equity Shares of our Company on the BSE and the NSE
during the last six months.
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BSE
Month High (`) Date of High Volume on
date of High
Low (`) Date of Low Volume on
date of Low
Average Price (`)
January 2013 88.90 January 2,
2013
34,227 72.05 January 25,
2013
16,788 79.74
February 2013 74.95 February 1,
2013
14,771 59.60 February 28,
2013
19,353 67.75
March 2013 61.95 March 7,
2013
36,923 44.65 March 28,
2013
48,676 54.31
April 2013 54.90 April 29,
2013
2,97,324 45.85 April 1, 2013 68,166 49.69
May 2013 61.50 May 11, 2013 1,14,835 46.75 May 31, 2013 95,305 54.49
June 2013 50.00 June 6, 2013 36,004 41.80 June 25, 2013 46,741 45.73
(Source: www.bseindia.com)
NSE
Month High (`) Date of High Volume on
date of High Low (`) Date of Low Volume on
date of Low Average Price (`)
January 2013 88 January 2,
2013
73,668 70.6 January 25,
2013
28,606 79.68
February 2013 74.95 February 4,
2013
25,797 59.1 February 28,
2013
54,028 67.64
March 2013 61.50 March 11,
2013
73,647 44.20 March 28,
2013
98,227 54.32
April 2013 55.70 April 29,
2013
5,85,103 45.80 April 1, 2013 1,32,628 49.76
May 2013 61.40 May 11,
2013
2,81,318 46.85 May 31,
2013
1,84,786 54.48
June 2013 49.90 June 7, 2013 87,874 41.65 June 25,
2013
76,439 45.80
(Source: www.nseindia.com)
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Notes
High and Low for the period are based on intra day prices and Average Price is based on average of closing price. In case of two days with the same closing price, the date with higher volume has been considered.
The closing prices of our Equity Shares on the BSE and the NSE on July 26, 2012, the trading day immediately following the day on which the
resolution of the Board to approve the Issue was passed, were `57.50 and `57.60 per Equity Share, respectively.
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MATERIAL DEVELOPMENTS
Recent Developments
The information required to be disclosed for the period between the last date of the financial statements provided to the shareholders and the
date preceding one month from the date of this Letter of Offer is provided below:
1. Working results of our Company on a stand-alone basis for the period from April 1, 2013 to May 31, 2013:
Particulars Amount (In ` lakhs)
Total sales / turnover 7,627.73
Other operating income 1,088.59
Total income 8,716.31
EBITDA (1,339.58)
Interest/ finance charges (net) 4,910.95
Provision for depreciation 1,159.80
Provision for tax -
Profit after tax (6,321.75)
2. Material changes and commitments, if any, affecting the financial position of our Company:
There are no material changes and commitments, other than as disclosed in this Letter of Offer, which are likely to affect the financial
position of our Company since March 31, 2013 (i.e. last date up to which audited information is incorporated in this Letter of Offer).
3. Reliance Group executed a MoU with the Wanda Group, China, to set up a joint venture for strategic long term relationship between
the two groups. Pursaunt to this MoU, we have agreed to explore possible co-operation in the multiplexes business in India and the US.
4. Reliance Lowry Digital Imaging Services Inc., our Subsidiary entered into an MOU with Eugene Mattos on June 13, 2013 for
providing complete CGI services for the production of the animation project “THE LITTLEST WARRIOR” for USD 83 lakhs.
5. Reliance Lowry Digital Imaging Services Inc. our Subsidiary entered into an MOU with Random Cow Pictures on February 7, 2013 for
providing complete CGI services for production of the animation project “IT’S A DOG’S WORLD” for USD 65 lakhs.
6. Reliance Lowry Digital Imaging Services Inc. our Subsidiary entered into an MOU with Ethreya Films, LLC on April 18, 2013 for
various shot production as well as some animation elements in reference of the animation project “ETHREYA CODE OF THE
BRETHREN” for USD 90 lakhs.
7. During the previous year, the Company executed an indicative non-binding term sheet with a private equity fund to acquire a
substantial minority stake through an investment of ` 60,500 lakhs in our Company’s film and media services division. The investment
is proposed to be made into the subsidiary of our Company, into which our film and media services division will be transferred. No
definitive agreement has been executed in respect of the proposed transaction. The validity of the term sheet has been extended till
August 12, 2013.
8. The current financial year of the Company has been extended till September 30, 2013.
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SECTION VI: LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
Except as stated below there are no outstanding litigation, suits, criminal or civil prosecutions, proceedings or tax liabilities against
our Company, its Subsidiaries, its Joint Ventures, associates, its Promoters, Directors and the Group Companies and there are no
defaults, non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions,
defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issued by our
Company, defaults in creation of full security as per terms of issue/other liabilities, proceedings initiated for economic/civil/any other
offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified
under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of our Company and no
disciplinary action has been taken by SEBI or any stock exchanges against our Company, its Subsidiaries, its Joint Ventures, its
associate, its Promoters, Directors or our Group Companies.
Except litigation with respect to our Company which has been disclosed as of the date of this Letter of Offer, and except as disclosed
otherwise on page 290 below, all litigation with respect to our Directors, our Subsidiaries, Joint Ventures, associates, Promoters, and
the Group Companies has been disclosed as ofJuly 10, 2013.
For details of the contingent liabilities of our Company, see the section entitled “Financial Statements” at page F-1.
Cases involving our Company
Cases filed against our Company
Criminal Cases
Kishor. K. Dave, managing trustee representing Shree Jagrut Nagrik, consumer protection organization registered under Public
Charity Trust Act, 1950 and Society Registration Act, 1860, has filed a letter with the Collector of Deesa. The Collector in turn
intimated the local police who took cognizance of the offence and filed a criminal complaint before the Additional Sessions Judge at
Deesa, Palanpur, against three employees of our Company at Rajmandir BIG Cinemas Deesa Theatre in their official capacity
alleging, inter alia, that food items were being sold in the above-mentioned theatre at a high price and for non-adherence to rules and
regulations under the Standard and Weights Measures Act, 1976 and the rules made there under. Bail has been granted to the three
employees and the matter is currently pending.
Civil Cases
1. IndusInd Media & Communications Limited (“Plaintiff”) has filed a summary suit (no. 1666 of 2006) before the High Court of
Judicature at Mumbai against Amit Bokadia, K.C. Bokadia and our Company for recovery of money due and payable by Amit
Bokadia and K.C. Bokadia to the Plaintiff in relation to two films titled “Ek Haseena Ek Deewana” and “Sazaa”. Our Company
was a party to the suit as our Company is in possession of the negatives of the above-mentioned films. Our Company has in the
reply, inter alia, stated that since our Company was entrusted with the task of converting the negatives of the film into positives
for public exhibition, our Company had the first lien and primary charge over the film negatives until the amount of `123.90
lakhs due and payable is paid to our Company. The matter is currently pending.
2. IDBI bank has filed an Original Application No. 34 of 2013 in the Debt Recovery Tribunal at Mumbai against Infinity India
Advisors Private Limited and Others claiming certain monies from Infinity Advisors India Private Limited. Our Company has
been made a party to the suit to restrain us from handing over the negatives of the film ‘Mrutyunjay- Legends of love’ that is in
our possession. Notice of the proceedings was served upon us on April 10, 2013. The matter is currently pending.
3. Krutika Jaggi has filed a suit No. 1902 of 2013 in the Bombay City Civil Court at Dindoshi, Goregaon against Sunrise Pictures
Private Limited and Others claiming certain monies from Sunrise Pictures Private Limited. Our Company has been made a party
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to the suit to restrain us from handing over the negatives of the film ‘HORN OK PLEASE’ that is in our possession. The matter is
currently pending.
4. One Mahendra Dhariwal had obtained advances in the form of loans from Samdarshi Jaiswal (“Plaintiff”) for making three films
i.e. “Maa Tujhe Salaam”, “Nehle Pe Dehla” and “Jail”. Samdarshi Jaiswal has filed a summary suit (no. 285 of 2007) before the
Court of Civil Judge (Senior Division), Chandigarh, against amongst others Mahendra Dhariwal and our Company alleging non-
payment of an amount due and payable by Mahendra Dhariwal and breach of undertaking by our Company by handing over the
prints of the movie “Nehle Pe Dehla” to Mahendra Dhariwal while the loan amount was outstanding. The Plaintiff has also
claimed a sum of `300.00 lakhs. The matter is currently pending.
5. Samdarshi Jaiswal has filed a civil contempt application (no. 144 of 2008) before the Civil Judge (Junior Division), Chandigarh
against our Company alleging violation of interim order dated February 21, 2007 in summary suit (no. 285 of 2007) discussed in
2 above which restrained the release of the prints of the movie. The matter is currently pending.
6. There are 23 matters pending against our Company, and others, before various courts and fora including Collector of Stamps, in
relation to, inter alia, infringement of intellectual property rights, recovery of amounts due and payable, ticket pricing,
restraining orders against the release of films. The aggregate amount involved in these cases is `181.52 lakhs. The matters are
currently pending.
7. A Writ Petition no. 7789 of 2012 has been filed before the High Court of Judicature at Mumbai by the Maharashtra State
Electricity Distribution Company Limited for setting aside an order dated March 26, 2012 passed by the Consumer Grievance
Redressal Forum, MSEDC Bhandup in favour of our Company wherein the utility was directed to revert the status of our
Company to an Industrial unit and accordingly be charged with Industrial tariff as against commercial tariff which we have paid
thus far. The matter is currently pending.
8. Our Company had filed a complaint before the Competition Commission of India, New Delhi, against Karnataka Film Chamber
and Commerce (“KFCC”) seeking a direction from the forum restraining KFCC for pressurizing all the local distributors and
producers in the State of Karnataka not to supply any language film prints to Big Cinema outlets. An interim order date
September 9, 2010 has been passed, which was further extended by an order dated September 21, 2010, restraining KFCC from
directly or indirectly imposing restriction on the distributors or producers to supply the film prints to Big Cinema Theatres. A
Final Order dated February 16, 2012 was passed against the KFCC. Against this Order, an appeal was preferred by KFCC before
the Competition Appellate Tribunal and by an order dated August 8, 2012 the interim reliefs prayed for by KFCC has been
rejected by Competition Appellate Tribunal. Against this Order of rejection, KFCC preferred a Writ Petition in the Karnataka
High Court and the same is currently pending and there is no monetary claim against our Company.
9. Sunil Prem Lalla has filed a Public Interest Litigation (L) 50 of 2013 in the High Court of Judicature at Mumbai against the State
of Maharashtra, Revenue & Forest Dept. and 15 Ors including our Company challenging the charging of internet handling
charges / convenience charges / service fee by online booking agencies and cinema exhibition chains despite issuance of an order
dated April 4, 2013 issued by the Govt. of Maharashtra. The matter is currently pending.
10. Radhakrishna Roadways Private Limited has filed a suit (L) 257 of 2012 in the High Court of Judicature at Mumbai against
Morpheus Media Ventures Private Limited and Others claiming certain monies from Morpheus Media Ventures Private Limited.
Our Company has been made a party to the suit to restrain us from handing over the negatives of the film ‘Chemistry’ that is in
our possession. Notice of these proceedings was served upon us on April 2, 2013. The matter is currently pending.
Winding up Cases
1. RDB Two Thousand Plus Limited has filed a winding up petition No. 294 of 2013 against our Company in the High Court of
Judicature at Mumbai alleging outstanding rentals and interest thereon, aggregating `315.37 lakhs for the duration our Company
was operating the multiplex theatre in RDB mall, Kolkata. While the matter is yet to be listed our Company has vide its letter
dated April 16, 2013 claimed a sum of `850.9 lakhs against RBD Two Thousand Plus Limited.
2. Cleave Fernandes, proprietor of Transcase Flight Cases has filed a winding up petition against our Company in the High Court
of Judicature at Mumbai being petition No. 315 of 2013 claiming the outstanding amounts and additionally, interest,
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aggregating a sum of `8.87 lakhs towards goods sold and delivered to our Company. The amounts due to Cleave Fernandes have
already been paid as of July 1, 2013. The matter, however, is yet to be withdrawn.
Arbitration Proceedings
1. Pursuant to a memorandum of understanding dated February 1, 2008 between Nishant Constructions Private Limited, the
developer of Regency Centre at Prahladnagar, Ahmedabad and our Company, the developer has initiated arbitration proceedings
against our Company in December 2011. The developer has claimed that it was ready to handover the possession of the
multiplex shell and our Company reneged from its obligations under the memorandum of association and terminated the
memorandum of association. The aggregate amount involved in this case is `6,006.93 lakhs. The matter is pending.
2. G.S.G. Builders and Infrastructure Limited, the developer of Gold Spot Mall, Hyderabad has initiated arbitration proceedings
against our Company in January 2012. The developer has alleged that our Company has on various occasions defaulted in the
payment of charges payable under a lease deed dated July 27, 2004 between the developer and our Company and has sought to
terminate the lease deed. Our Company has opposed the termination on various grounds and the matter is pending. The
aggregate amount involved in the matter is `1853.04.
Tax Cases
1. A show cause notice dated August 30, 1999 (“Show Cause Notice”) was issued by the Office of the Commissioner of Central
Excise, Mumbai, alleging that a chemical preparation employed for use in the processing of cinematograph films in our
Company’s laboratories amounted to a ‘manufacturing activity’ and hence attracts appropriate tariffs. It was further alleged that
the waste generated from the chemical preparations during such processing activity known as ‘Hypo Solution Waste’ fell within
the category of “Ash and residues – other than from the manufacture of iron and steel, containing metal or metal compounds”
and was chargeable to excise duty. The Commissioner of Central Excise pursuant to his order dated June 26, 2000 confirmed the
demands mentioned in the Show Cause Notice and levied penalties on our Company and Vasanji Mamania, our director then.
Several other periodical notices were issued by the Commissioner of Central Excise, Mumbai and the demand made pursuant to
these show cause notices were confirmed by their respective adjudicating officers. An appeal was preferred to the Customs
Excise and Service Tax Appellate Tribunal (“CESTAT”) by our Company challenging the orders of the above-mentioned
adjudicating officers. The CESTAT by its order dated July 11, 2008 remanded the matter back to the adjudicating authority for a
fresh hearing. The Commissioner of Central Excise preferred an appeal to the High Court of Judicature at Mumbai challenging
the order dated of July 11, 2008. The High Court, by its order dated June 24, 2009, directed all parties to appear before the
Commissioner of Central Excise and with this the appeal was disposed off. The adjudicating officer upon hearing the parties
further confirmed the demand made by all the show cause notice by his order dated August 27, 2009. Hence our Company has
preferred an appeal to the CESTAT challenging the order dated August 27, 2009. Thereafter, the Joint Commissioner of Central
Excise, Mumbai issued another show cause notice which was further confirmed by the Joint Commissioner of Central Excise,
Mumbai by his order dated July 15, 2010. A writ petition was filed before the High Court of Judicature at Mumbai against the
order dated July 15, 2010. Show cause notices were issued from time to time and multiple proceedings in the matter are currently
pending. An Order dated August 16, 2012 was passed against the Company by the Commissioner of Central Excise Mumbai-V.
In an appeal preferred by the Company against this order before the CESTAT by an order dated November 5, 2012, the
CESTAT stayed the said proceedings. A Show Cause Notice dated September 3, 2012 was issued by Commissioner of Central
Excise, Mumbai-V seeking the Company to show cause why a penalty and interest should not be charged on the Company for
non inclusion of duty of `120.00 lakhs. Personal hearing was held on January 7, 2013. We filed our reply to show cause notice
on the said date. By an Order dated January 29, 2013 Commissioner of Central Excise Mumbai-V confirmed the penalty of
`120.00 lakhs. CESTAT by an order dated February 4, 2013 passed an unconditional stay on this order and directed Assistant
Commissioner CE –V not to take any recovery action till final disposal of Appeal and Stay Application. A further Show Cause
Notice dated April 22, 2013 was issued by Commissioner of Central Excise, Mumbai-V seeking the Company to show cause
why a penalty and interest should not be charged on the Company for non inclusion of duty of `103.86 lakhs. The Company is in
the process of filing its reply to the show cause notice. The overall amount involved in these matters is `2,659.80 lakhs.
2. Pursuant to order dated January 22, 2013 by the Indore Bench of the High Court of Judicature at Madhya Pradesh, our Company
has been asked to file a fresh application against the claim of Assistant Commissioner, Commercial Tax, Indore of Entertainment
Tax from the Company in respect of its property, Mangal Cinema, Indore. The Company has filed its written submissions before
the Asst. Commissioner. By an order dated April 18, 2013 the Asst. Commissioner has confirmed the demand of `489.86 lakhs
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against our Company. Our Company has filed a Writ Petition No. 6687 of 2013 before the Indore Bench of the High Court of
Judicature at Madhya Pradesh against the order dated April 18, 2013. The Indore Bench of the High Court of Judicature at
Madhya Pradesh, by an order dated July 9, 2013 granted a stay in favour of the Company till further orders. The matter is
currently pending.
3. 2 (Two) matters, Order no. 102/BR-102/ST II/Yh-I/2012 and Order no. 60/ST II/WLH/2012 dated March 29, 2012 and May 28,
2012, respectively, involving our Company are pending before the CESTAT against orders of the Commissioner of Service Tax
in relation to service tax liabilities on various transactions. The aggregate amount involved in this matter is `272.63 lakhs.
4. 12 (Twelve) matters involving our Company are pending before various state authorities in relation to value added tax liabilities.
The aggregate amount involved in these matters is `522.80 lakhs.
5. Our Company has received 13 demand notices from the TDS department for financial year 2006-2007 to financial year 2009-
2010 with respect to short deduction of TDS, tax deducted but not paid and interest for delayed payment of TDS. The amount
involved in these matters is `1,017.10 lakhs. Our company has preferred appeals and applications for rectification of mistakes
apparent with respect to some of these notices. No replies have been received in this regard.
6. There are 2 (two) disputes pending with regard to Rave Entertainment Private Limited, a wholly owned subsidiary of our
Company which merged with our Company with effect from April 1, 2008. The IT Department issued two notices of demand for
`1,387.31 lakhs on November 20, 2010 with respect to addition of `3,344 lakhs undisclosed income in the assessment for the
assessment year 2008- 2009 and for ` 1,787.26 lakhs on Dec 19, 2011 with respect to addition of `3,286 lakhs undisclosed
income in the assessment for assessment year 2009- 2010. Appeals were preferred to the CIT (Appeal). The CIT (Appeal) by
orders dated November 30, 2011 and October 10, 2012 respectively have deleted the addition and allowed the appeal. The IT
department preferred appeals to the Income Tax Tribunal against the orders passed by the CIT (Appeal). The Income Tax
Tribunal has dismissed the case in respect of assessment year 2009 – 2010. The matter in respect of assessment year 2008 – 2009
is currently pending.
7. The owners of certain multiplexes that we manage in Gujarat, in their capacity as license holders, initiated proceedings before
the High Court of Judicature at Gujarat against the Entertainment tax authorities for availing exemption from payment of tax
under the applicable law. The High Court decided the matter against the owners who preferred an appeal to the Supreme Court
of India. In accordance with directions of the Supreme Court, our Company has deposited the amount payable for the disputed
period with the concerned authority since our Company is responsible for collection of entertainment tax. The amount involved
in this matter is `509.57 lakhs. The matter is currently pending. In respect of our multiplex at Chinchwad, Pune, the Additional
Collector at Pune has issued a notice dated September 15, 2012 claiming amount of `64.71 lakhs + `0.02 lakhs towards penalty
for the property. The claim of the Addl. Collector is based on the point that during the 100% ET exemption period, the ET
amount was collected from the Patrons by our Company but not deposited with the ET authorities. The claim is for period prior
to 2008. The final hearing was held on November 19, 2012. By an order dated March 30, 2013 the Addl. Collector has
confirmed the aforesaid claimed amount against the multiplex property. The Company has preferred an appeal against the
aforesaid order and the same is currently pending before the Div. Commissioner, Pune.
Labour Cases
6 (six) matters involving our Company are pending, among others, before various courts and forums such as Labour Court, City Civil
Court, Office of the Collector (Labour) in relation to, inter alia, payment of minimum wages, illegal termination and retrenchment.
The aggregate amount involved in these matters is `14.53 lakhs.
Consumer Cases
1. 4 (four) matters involving our Company are pending before Jaipur District Consumer Forum in relation to amounts collected by
sale of mineral water bottles in our theatres. The aggregate amount involved in these cases is `3.00 lakhs.
2. 15 (fifteen) matters involving our Company have been filed before Khandwa District Consumer Forum in relation to non
payment of Provident Fund to the Complainants. The aggregate amount involved in these cases is `12.05 lakhs. The Khandwa
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District Consumer Forum has issued orders against our Company in 14 (fourteen) of these matters aggregating `11.24 lakhs. The
matter in respect of the balance amount of `0.81 lakhs is currently pending.
Enforcement Directorate investigation
On July 15, 2013, Anil Sekhri, a non-Executive Director of the Company appeared personally before the Directorate of Enforcement
(ED) pursuant to summons issued on July 3, 2013 with respect to the investigation on the issue of FCCBs by the Company in 2006.
Similar summons were issued to Anil Sekhri on May 3, 2013 wherein he had sought additional time for appearance.
Similar summons were also issued to Manmohan Shetty, ex-Chairman and former Managing Director in the past on January 29, 2013
and one of our key management personnel appeared pursuant to the summons issued on February 15, 2013. Previously, through its
letter dated August 13, 2012 the ED sought information inter alia on the issue of FCCBs by our Company. Our Company has provided
the information through letters dated September 4, 2012 and April 18, 2013.
Further to Anil Sekhri’s appearance in response to the summons, the ED has issued fresh summons to one of our key management
personnel directing him to appear before it on the July 22, 2013. The hearing was adjourned. The matter is currently pending.
Cases filed by our Company
Criminal Complaints
Our Company had engaged the services of a contractor, Laurent & Benton Management Consultants Limited (“Contractor”), for
engaging the services of and deploying the personnel of the contractor at its various exhibition properties. Pursuant to an agreement
with the Contractor, our Company paid to the Contractor a sum of `294.20 lakhs towards its Provident Fund contribution payable to
the personnel deployed at the properties of our Company. Our Company, on learning that the amount as aforesaid which was
supposed to be deposited in the individual accounts of the personnel by the Contractor had actually been misappropriated by the
Contractor, lodged an FIR with the police authorities in New Delhi and filed a criminal complaint in the Court of Metropolitan
Magistrate, Patiala House, New Delhi. The Metropolitan Magistrate has by an order dated June 30, 2012 directed the Station House
Officer, Barakhamba and the Deputy Commissioner of Police (EOW) to look into the matter and submit their reports. Subsequently
one of the directors of the Contractor was arrested by the EOW. Two bail applications filed by the arrested director before the CMM
Patiala House Courts, New Delhi were rejected / dismissed and the director was remanded initially to police custody and later to
judicial custody. A further bail application filed by the director before the Addl. Sessions Judge, Patiala House Courts was rejected
however on a subsequent bail application by an order dated April 29, 2013 the Accused Director was granted conditional bail. The
matter is currently pending.
Criminal Cases
Our Company has filed 3 (three) separate complaints before various Metropolitan Magistrates and Sessions Courts in relation to
misappropriation of funds, cheating and misrepresentation of facts, violation of Private Security Guards (Regulation of Employment
and Welfare) Scheme, 2002 and Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981. The
matters are currently pending.
Civil Cases
1. Our Company has filed 4 (four) separate suits before the High Court of Judicature at Mumbai for recovery of dues. The
aggregate amount involved in these cases is `603.98 lakhs. The matters are currently pending.
2. Our Company has filed a suit 2537 of 2010 before the High Court of Judicature at Mumbai against Headstart Films Private
Limited and four others for recovery of dues amounting to `857.64 lakhs towards assistance given for the film “London
Dreams”. A notice of motion seeking interim reliefs was moved by our Company and the same was rejected by the High Court
of Judicature at Mumbai pursuant to its order dated September 21, 2010. The matter is currently pending.
3. Our Company has filed a writ petition 13305 of 2011 before the High Court of Judicature at Hyderabad against the Lokayukta,
the Government of Andhra Pradesh, Commissioner of Police, G. L. Narasimha Rao and others challenging order dated April 1,
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2011 passed by the Lokayukta, Government of Andhra Pradesh and seeking directions from the Court quash
ing the proceeding
initiated pursuant to a complaint filed by G. L. Narasimha Rao before the Court of the IX Additional Chief Metropolitan
Magistrate, Nampally alleging that online sale of movie tickets through online agencies by various theatres and multiplexes
including our Company is unlawful. By an order dated July 20, 2011 the High Court of Judicature at Hyderabad has granted
interim directions restraining the respondents from interfering with the sale of tickets through on-line ticket bookings by our
Company. The matter is currently pending.
4. A Section 9 Application (under the provisions of the Arbitration and Conciliation Act, 1996) Arb O. P. No. 24 of 2013 for
interim reliefs has been filed before the City Civil Court at Hyderabad and a Section 11 Arbitration Application no. 3 of 2013
has been filed before the Hon’ble High Court of Andhra Pradesh against Gayatri Hotels & Theatres Pvt. Ltd. in respect of
Maheshwari Parmeshwari Multiplex for recovery of our dues amounting to `630 lakhs. The High Court of Judicature at Andhra
Pradesh appointed a sole arbitrator pursuant to the Section 11 application by an order dated April 29, 2013. The matters are
currently pending.
Arbitration proceedings
1. Our Company has initiated 3 (three) separate arbitration proceedings in relation to termination of conducting agreements, entered
into between our Company with owners of properties at Indore (Big B and Satyam) and Guna (Jyoti and Sriram Smriti) on
grounds such as failure to obtain requisite approvals, structural deficiencies of the theatre, etc. The aggregate amount claimed by
our Company is `1,525.08 lakhs.
2. Our Company has initiated an arbitration proceeding against B. R. Films in relation to termination of an agreement dated March
14, 2008 pertaining to a film titled “Banda Yeh Bindaas Hai”. Pursuant to this agreement our Company had paid an amount of
`925.00 lakhs for distribution, exploitation, exhibition and marketing of the above-mentioned film. B. R. Films had agreed to
hand over the film to our Company on its completion. It is the claim of our Company that the B. R. Films failed to comply with
its obligation. The amount involved in the matter is approximately `1,321.50 lakhs. An award against was passed against our
Company and subsequently, our Company has filed an application in the High Court of Judicature at Mumbai for setting aside
the said award. The matter is currently pending.
Section 138 of the Negotiable Instruments Act, 1881
10 (ten) cases have been filed by our Company against its customers under Sections 138 and 142 of Negotiable Instruments Act, 1881
for recovery of dues and dishonour of cheques. The aggregate amount involved in these cases is approximately `294.59 lakhs. These
matters are pending.
Notices
Our Company has served a notice dated April 14, 2009 to Jagdish Vasudev Agarwal, proprietor of Rajmandir Cinema, Jalna for
termination of the conducting agreement entered into between the parties on July 31, 2007. Pursuant to this agreement it was agreed
between the parties that the premises of Rajmandir Cinema would be handed over to our Company on or before September 1, 2007
with all the necessary licenses, permissions, certifications and requirements for the purposes of refurbishing and operating the same.
Our Company has stated in its statement that Jagdish Vasudev Agarwal failed to carry out his obligations. The title of the property
was disputed by Marathwada Wakf Board. Our Company has claimed an amount of `42.50 lakhs from Jagdish Vasudev Agarwal.
Miscellaneous Matters
Our Company has filed 2 (two) separate complaints before the Joint Assessor & Collector, Mumbai Municipal Corporation and the
Brihan Mumbai Municipal Corporation. Our Company has sought adoption of the profit basis method for assessment of its property at
IMAX Big Cinemas, Wadala and Big Cinemas R Mulund, respectively, rather than the currently followed gross method. Both the
complaints are currently pending.
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Small Scale Industries
Except as disclosed below, our Company does not owe any small scale industries any amounts exceeding ` 1.00 lakh which is
outstanding for more than 30 days. There are no disputes with such entities in relation to payments to be made to them. (in ` lakhs)
Sr. No. Name Amount outstanding
as on June 30, 2013
Amount outstanding more than
30 days as on June 30, 2013
1. Linear Electronics Private Limited 1.06 1.06
2. R & S (I) Electronics Private Limited 3.57 3.57
Cases involving our Subsidiaries, Joint Ventures, associate and Partnership
Subsidiaries
1. Big Synergy Media Limited
Cases filed by Big Synergy Media Limited
Criminal Cases
Big Synergy Media Limited has filed a criminal complaint dated January 5, 2011with the police station located at Amboli,
Maharashtra against Prashant Jhadav alleging criminal breach of trust. Monies were advanced to Prashant Jhadav in various tranches
for the production and delivery of a TV series. The program did not materialise and the monies were repayable to Big Synergy Media
Limited. Prashant Jhadav was acting as Creative Producer through Shree Om Comtech Private Limited. The company claims that
Prashant Jhadav has misappropriated the money advanced to him by Big Synergy Media Limited. This matter has been transferred to
the police station located at Veera Desai. The amount involved in the matter is `79.20 lakhs and till date, an amount of `44.00 lakhs
has been recovered from him. Subsequently, post April 30, 2013, Prashant Jhadav has signed an undertaking to pay the balance
amount by the end of the financial year 2013 – 2014.The matter is currently pending.
Section 138 of the Negotiable Instruments Act, 1881
Big Synergy Media Limited has filed a cheque dishonour case in Andheri Metropolitan Magistrate Court in December 2011 having
case no. 2921 of 2011 and 2894 of 2011 against Mahuaa Media Private Limited (“Mahuaa”). Mahuaa has approached the Sessions
Court for squashing of the summons issued by Andheri Metropolitan Magistrate Court. The amount involved in the matter is ` 524.88
lakhs.. The Respondent on April 6, 2013 filed an application for permanent exemption. The matter has been adjourned to August 1,
2013. The matter is currently pending.
Winding up cases
Big Synergy Media Limited has filed a winding up petition dated February 01, 2012 having petition no. 58 of 2012 before the High
Court of Judicature at Delhi against Mahuaa Media Private Limited (“Mahuaa”) for recovery of money in relation to a television
show produced by Big Synergy Media Limited for Mahuaa. The amount involved is `524.88 lakhs. On November 27, 2012 the
Honourable Delhi High Court passed an order directing Mahuaa to pay to Big Synergy `50 Lakhs on or before February 15, 2013 and
also submit an affidavit which shall mention a detailed payment schedule for the balance monies. The petition has been disposed off
with the observation that in case of default by Mahuaa in payment of the abovementioned sum to Big Synergy, the petition may be
revived by Big Synergy. A copy of the order is yet to be received.
2. Reliance MediaWorks Entertainment Services Limited
Cases filed against Reliance MediaWorks Entertainment Services Limited
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Tax Cases
Reliance MediaWorks Entertainment Services Limited received a demand notice dated December 30, 2011 from Navi Mumbai
Municipal Corporation for payment of Octroi / Cess Tax as per details provided below.
Financial Year Tax (` in Lakhs) Interest / Penalty (` in
Lakhs)
Total
(` in Lakhs)
2008-09 12.08 57.64 69.72
2009-10 84.48 382.69 467.16
Reliance MediaWorks Entertainment Services Limited has preferred an appeal claiming that the company is a SEZ unit and, is
therefore, exempt from payment of Octroi/entry tax under the Maharashtra IT ITEs Policy 2009. The Directorate of Industries,
Government of Maharashtra, issued a letter on January 4, 2012 stating exemption of the company from Octroi/entry tax. The matter is
currently pending. The next date of hearing is on July 18, 2013.
3. Reliance MediaWorks Theatres Limited
Cases filed against Reliance MediaWorks Theatres Limited
Civil Cases
Two separate show cause notices dated August 17, 2010 and September 21, 2010 (the “Show Cause Notice”) were issued by the
Collector, Pune and the Assistant Commissioner of Police (Administration), Pune, respectively, to Gold Big Cinemas, alleging
exhibition of lesser number of Marathi movies than the number required as per the Maharashtra State Government resolution dated
January 4, 2003 read with the provisions of the Bombay Entertainments Duty Act, 1923. The Collector, Pune has claimed `1.50 lakhs
from Reliance MediaWorks Theatres Limited pursuant to the above-mentioned show cause notice dated August 17, 2010. Reliance
MediaWorks Theatres Limited has filed its written submissions. The matters are currently pending.
4. Reliance MediaWorks (USA) Inc.
Cases filed by Reliance MediaWorks (USA) Inc.
Civil Cases
Reliance MediaWorks (USA) Inc. filed a legal malpractice complaint against its former counsel Giarmarco, Mullins & Horton, P.C in
the above mentioned civil case (NewBurgh / Six Mile Limited Partnership v. Adlabs Films USA, Inc.). The matter was dismissed by
the United States District Court, Eastern District of Michigan. Reliance MediaWorks (USA) Inc. has preferred an appeal with the
Sixth Circuit Court of Appeals. The matter is currently pending.
Joint Ventures
1. Swanston Multiplex Cinemas Private Limited
Cases filed against Swanston Multiplex Cinemas Private Limited
Criminal Cases
1. The Brihan Mumbai Municipal Corporation (“BMC”) has filed 2 (two) cases before the Metropolitan Magistrate, Ville Parle,
Mumbai having case nos. 5787 and 5788/SS/2008 dated April 25, 2008 against Shravan Shroff, director of Swanston Multiplex
Cinemas Private Limited alleging unauthorized construction of an overhead tank and cooling towers for Fame Big Cinemas
theatre. Ld. Metropolitan Magistrate passed an order dated October 17, 2012 of acquittal. A copy of the order is yet to be
received.
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2. BMC has filed a complaint before the Court of Metropolitan, Mumbai Magistrate having case no. 10019/SS of 2008 against
Shravan Shroff and Swanston Multiplex Cinemas Private Limited for keeping celluloid base film at the theatre in violation of the
general conditions of the license issued by the Municipal Corporation of Greater Mumbai. The matter is currently pending.
Civil Cases
Swanston Multiplex Cinemas executed a Leave and License Agreement dated March 2, 2010 with Adlabs Shringar Multiplex Cinemas Pvt.
Ltd. through which Swanston Multiplex Cinemas was granted a right / license to use and occupy the Theatre Premises in a Building known
as Citi Mall in Andheri, Mumbai for the purpose of running the business of exhibiting movies for a period of 36 months at a prescribed
licence fee. Adlabs Shringar Multiplex Cinemas Pvt. Ltd. filed Arbitration Petition (L) No. 782 of 2012 in the Hon’ble High Court of
Judicature at Mumbai against Swanston Multiplex Cinemas for non-payment of the license fee by the Company on and from February 12,
2012. The Petition was disposed of by the Hon’ble Court on July 17, 2012 by passing an order recording the Consent Terms.
Subsequently, Adlabs Shringar Multiplex Cinemas Pvt. Ltd., vide their letter dated March 26, 2013 called upon Swanston Multiplex
Cinemas Pvt. Ltd. to make the payment of Service Tax of `32.95 lakhs for the period beginning April 2008 to February 2010, which
Swanston Multiplex Cinemas Pvt. Ltd. disputed and made a contention that the same is not payable in view of Consent Terms. Adlabs
Shringar Multiplex Cinemas Pvt. Ltd. on June 17, 2013 filed a Contempt Petition No. 44 of 2013 before the High Court of Judicature at
Mumbai for violation of Consent Terms. The matter is currently pending.
Labour Cases
The workers of Fame (India) Limited and Swanston Multiplex Cinemas Private Limited (through their union) (“Complainants”) have
filed a case no. 424/2010 dated October 13, 2010 before the Industrial Court, Bandra, Mumbai against Fame (India) Limited and
Swanston Multiplex Cinemas Private Limited (“Defendants”) alleging unfair labour practices. The Defendants have filed their reply
to the complaint. The matter is currently pending.
Tax
1. Swanston Multiplex Cinemas Private Limited received a notice for the assessment year 2005 – 2006 reopening the assessment
and giving show cause for disallowance under the Income Tax Act for alleged non deduction of TDS on film rental amounting to
`30.95 lakhs paid to non-resident film distributor. Swanston Multiplex Cinemas Private Limited submitted its response to the
notice dated March 30, 2012. Thereafter, the A.O. issued a notice under section 148 reopening the issue and subsequently an
order on March 4, 2013 demanding `11.20 lakhs. Swanston Multiplex Cinemas Private Limited filed an appeal with the CIT 3
on April 4, 2013 disputing the demand and subsequently filed a letter of stay against the demand with the Commissioner of
Income Tax on April 12, 2013. The matter is currently pending.
2. Swanston Multiplex Cinemas Private Limited was issued a show cause notice raising demand of `17.45 lakhs and interest and
penalty of `40.13 lakhs for financial year 2008-09 by the Assistant Commissioner of Sales Tax, Mumbai. Swanston Multiplex
Cinemas Private Limited replied to the said notice partially accepting claims raised by Assistant Commissioner of Sales Tax,
Mumbai. Thereafter, the Assistant Commissioner of Sales Tax issued an assessment order dated February 28, 2013 under the
Maharashtra VAT Act, 2002 demanding `61.49 lakhs. The order was received by Swanston Multiplex Cinemas Private Limited
on March 26, 2013. Swanston Multiplex Cinemas Private Limited has filed an appeal before the Deputy Commissioner, Sales
Tax (Appeal) on May 9, 2013. The matter is currently pending.
3. Swanston Multiplex Cinemas Private Limited received an assessment order dated January 29, 2013 under the Maharashtra VAT
Act, 2002 from the Assistant Commissioner of Sales tax for the assessment year 2005-06 demanding payment of ` 85.12 lakhs.
Swanston Multiplex Cinemas Private Limited filed an appeal on March 13, 2013 with the Deputy Commissioner of Sales Tax –
Appeals. The matter is currently pending.
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Cases filed by Swanston Multiplex Cinemas Private Limited
Civil Cases
Swanston Multiplex Cinemas Private Limited filed a writ petition before the High Court of Judicature at Mumbai against the State of
Maharashtra and other parties in relation to notices issued by the Tahilsdar on December 5, 2005, December 30, 2005 and January 21,
2006 for alleged non-payment of entertainment dues amounting to `198.10 lakhs. The High Court of Judicature at Mumbai granted
relief exonerating Swanston Multiplex Cinemas Private Limited from payment of the dues. However, this judgment was reversed by
the Supreme Court of India upon an appeal by the State of Maharashtra. Further the State of Maharashtra was directed to realize the
amount claimed and donate the same to a charitable organization. Swanston Multiplex Cinemas Private Limited has deposited an
amount of `187.00 lakhs with the Tehsildar, representing the State of Maharashtra. A review petition has now been filed by Swanston
Multiplex Cinemas Private Limited in the Supreme Court for a review of the judgment of the Supreme Court of India and the same
was dismissed on January 14, 2010.
Swanston Multiplex Cinemas Private Limited has also filed a notice of motion before the High Court of Judicature at Mumbai for
recovery of `20.00 lakhs from the Government of Maharashtra which was deposited upon the directions of the High Court at the time
of filing the writ petition. The notice of motion is currently pending.
Cases involving our Directors
1. Gautam Doshi
Cases filed against Gautam Doshi
Criminal Cases
The Central Bureau of Investigation (CBI) has registered a first information report dated October 21, 2009 pertaining to allegations of
criminal conspiracy and criminal misconduct, in respect of telecommunications licences and spectrum allotted by the Government of
India inter alia to SwanTelecom Limited in 2008. Pursuant to the FIR, the CBI filed a charge sheet dated April 2, 2011 in the Court of
Special Judge (CBI), New Delhi, against various persons, including one of our non-executive Directors, Gautam Doshi.
The Special Judge (CBI) has framed charges against all the persons specified in the charge sheet. Proceedings, in the matter, including
a writ petition that Gautam Doshi has preferred to the High Court of Judicature at Delhi are ongoing.
2. Sujal Shah
Cases filed against Sujal Shah
Civil Cases
Yogendra Naranji Thakkar filed suit No. 2505 of 2012 registered on November 9, 2012 in the High Court of Judicature at Mumbai
against Sujal Shah and three others for exemplary, substantial and punitive damages for defamation. An aggregate amount of
`2,800.00 lakhs plus interest at 18% from the date of the suit till the date of the payment and / realisation is claimed jointly and
severally from the Defendants. Yogendra Naranji Thakkar on April 20, 2013 also filed a writ petition 743 of 2013 with the High Court
of Judicature at Mumbai seeking the court to issue directions for the Institute of Chartered Accountants of India and the Disciplinary
Directorate to hear the complaint filed by him and to suspend the certificate of practice of Sujal Shah. The matter is currently pending.
3. Anil Sekhri
With respect to the proceedings before the Directorate of Enforcement (ED) in relation to the issue of FCCBs by our Company in
2006, the summons has also been issued to Anil Sekhri, one of our non-executive Directors. For further details, please see the
disclosure under the sub-head ‘Enforcement Directorate investigation’ under the head ‘Cases filed against our Company’ set out in
this chapter above at page 280.
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Cases filed by Anil Sekhri
Section 138 of the Negotiable Instruments Act, 1881
Anil Sekhri, one of our directors had filed summary suit no. 3772 of 1998) for recovery of `12.00 lakhs from one J. B. Singh before
the High Court of Judicature at Mumbai. The recovery suit was in relation to a cheque issued by J. B. Singh which was dishonoured.
The High Court of Judicature at Mumbai on December 2, 2002 issued a decree against J. B. Singh in the sum of `24.54 lakhs. J. B.
Singh has preferred an appeal no. 382 of 2003 to the High Court of Judicature at Mumbai on June 15, 2008 and the matter is currently
pending.
Cases involving our Promoters
1. Reliance Capital Limited
Cases filed against Reliance Capital Limited
Criminal Cases
There are 44 criminal cases filed against Reliance Capital Limited by its customers in various courts in respect of disbursement of
loan amounts. These cases are pending at various stages of adjudication. Majority of these cases are the appeals / revisions in respect
of cases filed against the borrowers’ u/s 138 of the Negotiable Instruments Act. 1881. These matters are currently pending.
Civil Cases
1. Bharatiben and others (as legal heirs and representatives of late Manubhai Maneklal) (“Plaintiffs”) have filed a suit no. 1708 of
1997 dated March 25, 1997 before the High Court of Judicature at Mumbai against Reliance Capital Limited for recovery of
equity shares delivered by Manubhai Maneklal and others to Reliance Capital Limited as a custodian in relation to transactions
undertaken by Reliance Enterprises Limited. The aggregate amount involved in this matter is `757.00 lakhs. The matter is
currently pending.
2. Harinarayan Bajaj and others (“Plaintiffs”) have filed a suit no. 2205 of 1997 dated July 1, 1997 before the High Court of
Judicature at Mumbai against Reliance Capital Limited alleging improper enforcement of security by Reliance Capital Limited
in relation to loans amounting to `1,000.00 lakhs granted by Reliance Capital Limited to the Plaintiffs. The Plaintiffs are
claiming refund of the shares pledged as security along with accrued benefits thereon or a payment of an amount of `164.50
lakhs with interest at 24%. The matter is currently pending.
3. Adil Patrawala has filed a case CP No. 27 of 2013, before the Company Law Board, Mumbai against Quant Capital Private
Limited and Reliance Capital Limited under section 397 – 398 of the Companies Act claiming mismanagement in the affairs of
Quant Capital Private Limited and oppression of the minority shareholder. Reliance Capital Limited has been made a party to the
suit as it is a majority shareholder having 74% stake in Quant Capital Private Limited. The petition is currently pending. The
Company Law Board granted an ad-interim relief claimed Adil Patrawala that his shareholding in Quant Capital Private Limited
cannot be diluted.
Investor Related Disputes
1. There are 51 investor related disputes in respect of shares and 11 cases are in relation to monetary claims involving an aggregate
amount of `9.42 lakhs. Further, there are 62 investor related disputes in which Reliance Capital Limited has been made a party,
but there would be no financial impact on Reliance Capital Limited. Out of these, 32 cases are in relation to settlement involving
brokers or third parties and 30 cases where settlement is pending for completion of procedural formalities. Further, there are 52
cases which involve the complainant making payment to Reliance Capital Limited or providing suitable indemnities and 25
cases where copies of relevant court documents / complaints are not available.
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2. There are 41 investor related disputes filed after the demerger of Reliance Capital Ventures Limited from Reliance Industries
Limited and its subsequent merger with Reliance Capital Limited, where parties claim to have lost shares pursuant to the said
demerger and merger. These cases relate to 1,536 shares in total. Reliance Capital Limited has not been made a party in all these
cases. These cases relate to ownership of shares and shares to be allotted subsequent to the said demerger and merger.
Consumer Cases
There are 279 consumer cases filed against Reliance Capital Limited by its customers in various courts in respect of disbursement of
loan amounts. Such cases include civil, insolvency, arbitration appeals and matters filed before the various courts. The aggregate
amount involved in these matters is `1,55.44 lakhs and are at various stages of adjudication.
Cases filed by Reliance Capital Limited
Criminal Cases
There are 14,661 cases filed by Reliance Capital Limited in various Metropolitan Magistrate courts in respect of dishonour of cheques
given towards repayment of loan. The cases involve an aggregate amount of `2369.77 lakhs and are at various stages of adjudication.
Arbitration Proceedings
1. There are 23 cases filed by Reliance Capital Limited before the sole arbitrator for recovery of dues in respect of loan facilities
granted by it to its various customers. The cases involve an aggregate amount of `4,335.70 lakhs and are at various stages of
adjudication.
2. There are 4 cases filed under section 9 of the Arbitration and Conciliation Act, 1996 for interim reliefs against the borrowers
before the Honourable High Court of Bombay against the borrower.
Cases involving our Group Companies
Except for the litigation in which our Company is also a party, none of the litigation against the Group Companies is likely to have
any adverse effect on the financial performance of our Company.
Cases filed against our Group Companies
1. Reliance Broadcast Network Limited
Cases filed against Reliance Broadcast Network Limited
Civil Cases
1. Subhiksha Trading Services Limited (“Plaintiff”) has filed a suit before the Additional City Civil Court, Chennai against Hash
10 Telecom Private Limited, Reliance Broadcast Network Limited and others for restraining the airing of certain advertisement
alleged to be defamatory. Reliance Broadcast Network Limited has filed its written statement. The matter is currently pending.
2. Leading Edge has taken out 5 (five) Chamber Summons for changing the name from Reliance Media World Limited to Reliance
Broadcast Network Limited in connection with recovery of an amount of approximately `64.00 lakhs. The application has been
allowed. The matter is currently pending.
3. Narendra Kumar Gupta, proprietor of Jai Durga Tent & Light Decorators has filed a suit before the District Court, New Delhi,
against Reliance Broadcast Network Limited for non – payment of dues for services rendered by him aggregating to `6.85 lakhs.
The matter is currently pending.
4. Rajender Mathur and two others have filed a suit before the District Court, Hisar, against Reliance Broadcast Network Limited
for recovery of damages caused to premises licensed to Reliance Broadcast Network Limited aggregating to `6.82 lakhs. The
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District court has dismissed the case on May 2, 2013. However, an appeal has been filed by Rajendra Mathur for the same. The
matter is currently pending.
5. De Kulture Music Pvt. Ltd. has filed a suit before the District Sessions Judge, Jaipur, against Reliance Broadcast Network
Limited for obtaining injunction against broadcasting of certain sound recordings. The matter is currently pending.
6. Sunrise Advertising Pvt. Ltd. has filed a petition before the District Court, New Delhi against Reliance Broadcast Network
Limited for injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them to be
defamatory in nature and also claiming the amount payable for the suit instituted. The matter is currently pending.
7. Regency Ceramics Limited has filed a petition before the City Civil Court, Hyderabad, against Reliance Broadcast Network
Limited for injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them to be
defamatory in nature and also claiming an amount of `125 lakhs towards damages. The matter is currently pending.
8. Simran Kohli has filed a petition before the Saket District Court at New Delhi against Reliance Broadcast Network Limited for
injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them to be defamatory
in nature and also claiming the costs of the suit. The matter is currently pending.
9. Amarjot Singh Bath has filed a petition before the Civil Court in Chandigarh against Reliance Broadcast Network Limited for
recovery of monies allegedly payable to him for the services rendered by him. The amount involved in the matter is `3.30 lakhs.
The matter is currently pending.
10. Basant Kumar Birla and others filed a suit against Prakash Jha and others dated October 8, 2012 for the use of the word ‘Birla’ in
the song ‘Mehengai’ from the movie ‘Chakravyuh’. Reliance Broadcast Network Limited has been made a party to the suit for
broadcasting the song. The matter is currently pending.
11. Jegson Publicity has filed a petition before the Tiz Hazari Court at New Delhi against Reliance Broadcast Network Limited dated
May 4, 2013 for injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them
to be defamatory in nature and also claiming the amount payable for the suit instituted. The matter is currently pending.
12. U Foam Private Limited has filed a petition before the City Civil Court at Hyderabad against Reliance Broadcast Network
Limited dated May 21, 2013 for injunction against the airing of certain radio spots aired by Reliance Broadcast Network
Limited, alleging them to be defamatory in nature. The matter is currently pending.
13. ODM Media Services India Private Limited has filed an application dated April 12, 2013 under Order 39, Rule 1 and 2 of the
Civil Procedure Code before the Additional City Civil and Sessions Judge at Bangalore seeking temporary injunction against the
airing of radio spots against them for the dues to be paid by ODM Media Services India Private Limited to Reliance Broadcast
Network Limited. Notice of the application was served on Reliance Broadcast Network Limited on July 1, 2013. The matter is
currently pending.
Tax Cases
A notice was issued by the Excise & Taxation Officer, Punjab (“ETO”) against Reliance Broadcast Network Limited for improper
documentation of goods under transport. Thereafter, an order dated July 28, 2007 was passed by the ETO against Reliance Broadcast
Network Limited for detention of the goods. Reliance Broadcast Network Limited obtained release of the goods and preferred an appeal to
the Deputy Excise and Taxation Commissioner cum Joint Director of Enforcement, Patiala (“Excise Commissioner”). The Excise
Commissioner disposed the appeal and remanded the matter back to the ETO. The ETO passed a similar order dated March 7, 2009 against
which Reliance Broadcast Network Limited has filed a fresh appeal to the Deputy Excise and Taxation Commissioner-Cum-Joint Director
Enforcement, Patiala Division, Patiala. The aggregate amount involved in this matter is `2.57 lakhs. The matter is currently pending.
A Writ Petition has been filed by the Sales Tax Department before the High Court of Jammu & Kashmir against the order passed by the
State Tax Appellate Tribunal in favour of Reliance Broadcast Network Limited claiming an amount of `68 lakhs. The High Court passed an
order on July 2, 2013 on a limited issue of maintainability of the writ petition and has admitted the petition filed by the department. The
matter is currently pending
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Labour Cases
1. Priti Suiru (“Claimant”) has filed a claim before the Industrial Tribunal, Panaji against Reliance Broadcast Network Limited
alleging wrongful termination of employment and claiming reinstatement and payment of outstanding wages. The amount
involved in the matter is `3.00 lakhs. The order has been passed in favour of the Claimant. Reliance Broadcast Network Limited
has filed a writ petition before the Bombay High Court at Goa against the said order.
2. Mahamaya Jena has filed a complaint before the Labour Court, Bhubaneswar against Reliance Broadcast Network Limited
claiming an amount of `2.28 lakhs towards performance incentive. The matter is currently pending.
3. Munish Ohja has filed a claim before the Labour Court, Chandigarh against Reliance Broadcast Network Limited claiming
amounts aggregating to `0.30 lakhs towards leave encashment. The matter is currently pending.
4. Meenakshi Bhojwani has filed an application before the High Court of Judicature at Delhi against Reliance Broadcast Network
Limited challenging the arbitral award dated December 30, 2009 passed by B. L. Garg, sole arbitrator in favour of Reliance
Broadcast Network Limited. The arbitral award dated December 30, 2009 was in relation to an employment contract and
employment bond, entered into between Reliance Broadcast Network Limited and Meenakshi Bhojwani, former employee. The
amount involved in the matter is `21.87 lakhs. The matter is currently pending.
5. Quadir Ashraf has filed a claim before the Labour Court, Jammu, against Reliance Broadcast Network Limited claiming
amounts aggregating to `3.84 lakhs towards leave encashment and performance bonus. The matter is currently pending.
Stamp Duty Cases
A notice dated April 30, 2007 was issued by the Court of Additional Commissioner (Stamps), Aligarh (“Stamps Commissioner”) against
Reliance Broadcast Network Limited alleging evasion of stamp duty payable on lease renewals. The aggregate amount involved in this
matter is `8.19 lakhs. The Stamps Commissioner passed an order dated October 22, 2009 against Reliance Broadcast Network Limited.
Thereafter, Reliance Broadcast Network Limited has filed a writ petition before the High Court of Judicature at Allahabad for quashing of
the said order. The High Court of Judicature quashed the orders of the lower court and the matter has been remanded to the Assistant
Commissioner (Stamp) for determination of stamp duty payable. Reliance Broadcast Network Limited received a favourable order from the
court and the Stamp Office has been instructed to refund the excess amount of stamp duty paid by Reliance Broadcast Network Limited.
Notices
5 (Five) separate show cause cum demand notices were issued by the Commissioner Service Tax, Mumbai against Reliance Broadcast
Network Limited for an amount aggregating to `1,421 lakhs. Reliance Broadcast Network Limited has filed its replies against these show
cause cum demand notices and the matter is currently pending.
Cases filed by Reliance Broadcast Network Limited
Civil Cases
1. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Mumbai against the Maharashtra
State Road Development Corporation Limited for recovery of amounts paid by Reliance Broadcast Network Limited under an
agreement dated May 17, 2009 as security deposit and advance license fees along with interest. The amount involved in this
matter is `540.00 lakhs. The matter is currently pending.
2. Reliance Broadcast Network Limited has filed a recovery suit against Sunrise Advertising Private Limited for recovery of
monies due from them. The amount involved in the matter is `18.80 lakhs. The matter has been admitted and a notice has been
served on the other side on April 30, 2013. The matter is currently pending.
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3. Reliance Broadcast Network Limited has filed a summary suit before the City Civil Court at Ahmedabad for recovery of
amounts due. Reliance Broadcast Network Limited are seeking refund of Security deposit amount of `105 lakhs along with
interest from Ahmedabad Municipal Corporation. The matter is currently pending.
Arbitration Proceedings
1. Reliance Broadcast Network Limited has initiated an arbitration proceeding before a sole arbitrator against Access Atlantech
Entertainment Limited in relation to payment for certain services rendered by Reliance Broadcast Network Limited. An
interim order dated March 1, 2011 has been passed in favour of Reliance Broadcast Network Limited in relation to the
admissibility of the arbitration proceeding. The aggregate amount involved in this matter is `34.30 lakhs. The matter is
currently pending.
2. Reliance Broadcast Network Limited has initiated an arbitration proceeding in relation to breach of employment contract and
employment bond entered into between Reliance Broadcast Network Limited and Meenakshi Bhojwani, former employee.
Reliance Broadcast Network Limited obtained award dated December 30, 2009 in its favour and the same has been challenged
before the High Court of Judicature at Delhi by Meenakshi Bhojwani. An execution petition has also been filed before the
District Judge, Chandigarh by Reliance Broadcast Network Limited for executing the arbitral award dated December 30, 2009.
The aggregate amount involved in the matter is `21.87 lakhs. The matter is currently pending.
3. Reliance Broadcast Network Limited had initiated an arbitration petition in Hyderabad in connection with the dispute with M/s
Stanpower in which Reliance Broadcast Network Limited is claiming an amount of `415.17 lakhs on account of breach by
Stanpower of the terms and conditions of an agreement executed with Reliance Broadcast Network Limited. The matter is
currently pending.
4. Reliance Broadcast Network Limited has a pending dispute with Broadcast Engineering Consultant India Ltd. (“BECIL”) for
an amount of ` 3,896.87 lakhs. 2 (two) separate applications have been filed by Reliance Broadcast Network Limited before
the High Court of Judicature at Delhi, under Sections 9 and 11 of the Arbitration & Conciliation Act, 1996, for the
appointment of an arbitrator to resolve the dispute with BECIL. The matter is currently pending.
5. Reliance Broadcast Network Limited filed two applications under section 11 of the Arbitration and Conciliation Act, 1996
before the High Court of Judicature at Mumbai for the appointment of an arbitrator to resolve the dispute with Mahuaa Media
Private Limited. The total amount involved in this matter was `56.28 lakhs. The parties entered into a settlement agreement
and Mahuaa Media Private Limited has paid approximately `42 lakhs through post dated cheques on February 22, 2013. The
matter is kept in abeyance till the last post dated cheque is encashed.
6. Reliance Broadcast Network Limited has filed an application under Section 11 of the Arbitration and Conciliation Act, 1996,
before the High Court of Bombay for the appointment of an arbitrator to resolve the dispute with Moon Up Info Tech Private
Limited and Mangla Add Creation. The court has appointed Mr. Gautam Mehta as the sole Arbitrator. The total amount
involved in the matter is `42.24 lakhs. The matter is currently pending.
7. Reliance Broadcast Network Limited had filed 6 separate Section 11 applications under the Arbitration and conciliation Act,
1996, before the Delhi High Court challenging the appointment of the arbitrator appointed by Delhi Metro Rail Corporation in
the ongoing dispute with Delhi Metro Rail Corporation. The High Court dismissed the applications. Reliance Broadcast
Network Limited has filed 6 separate SLPs before the Supreme Court challenging the order of the High Court out of which 4
SLPs have been filed on July 5, 2013 and 2 SLPs have been filed on July 15, 2013.
Section 138 of the Negotiable Instruments Act, 1881
45 cases have been filed by Reliance Broadcast Network Limited under sections 138 and 142 of the Negotiable Instruments Act, 1881 for
recovery of dues and dishonour of cheques. The aggregate amount involved in these cases is approximately `207.59 lakhs. These matters
are pending.
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Intellectual Property cases
1. Reliance Broadcast Network Limited has filed 16 compulsory licensing application in accordance with Section 31 (1) (b) of the
Copyright Act, 1957, before the Indian Copyright Board against various music labels to allow Reliance Broadcast Network
Limited to broadcast the work from repertoire of the respective music labels on payment of certain percentage of the net
advertising earnings of each of its radio station. The matter is currently pending.
2. Reliance Broadcast Network Limited has filed a complaint under Section 19A(2) read with Section 30A of the Indian Copyright
Act, 1957, before the Indian Copyright Board against Indian Performing Rights Society and Super Cassettes Industries Limited
to refund the royalty paid by Reliance Broadcast Network Limited as performance royalty. The matter is currently pending.
3. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Mumbai for declaration, permanent
and mandatory injunction & recovery against Indian Performing Rights Society. The matter is currently pending.
4. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Delhi for declaration, permanent and
mandatory injunction & recovery against Super Cassettes Industries Limited. The matter is currently pending.
Winding up cases
1. Reliance Broadcast Network Limited has filed a winding up petition before the High Court of Judicature at Chennai against
Subhiksha Trading Services Limited for non-payment of liabilities amounting to approximately `43.49 lakhs. The winding up
has been ordered by the court.
2. Reliance Broadcast Network Limited has filed a winding up petition before the High Court of Judicature at Mumbai against Raj
Oil Mills Limited for non-payment of liabilities amounting to approximately `178.12 lakhs. The matter is pending.
2. Reliance Capital Asset Management Limited
Cases filed against Reliance Capital Asset Management Limited
Civil Cases
1. Siddharth Deepak Chury has filed a suit before the High Court of Judicature at Mumbai against Prabhakar Deepak Chury and
Reliance Capital Asset Management Limited for obtaining possession of a flat owned by Siddharth Deepak Chury which was
being occupied by Reliance Capital Asset Management Limited on leave and license basis. Reliance Capital Asset Management
Limited has retained possession of the flat since the security deposit paid by Reliance Capital Asset Management Limited was
not refunded upon expiry of the license. The aggregate amount involved in this matter is `10.00 lakhs. The matter is currently
pending.
2. Pramila Lodha (“Plaintiff”) has filed a suit before the High Court of Judicature at Mumbai against Edelweiss Securities Limited
and Reliance Capital Asset Management Limited. The Plaintiff had provided a power of attorney in favour of Edelweiss
Securities Limited and directed Reliance Capital Asset Management Limited to mark a lien on her folio in favour of Edelweiss
Securities Limited. In the present dispute, the Plaintiff has moved to the High Court for issuing directions to Reliance Capital
Asset Management Limited not to act on instructions of the Edelweiss Securities Limited. The aggregate amount involved in this
matter is `12.73 lakhs. The matter is currently pending.
3. Kanti Gupta and Tanushree Varshney (through Kanti Gupta) (“Plaintiffs”) have filed a suit before the Civil Judge (Senior
Division), Kanpur Nagar against Shweta Varshney, Reliance Capital Asset Management Limited and 22 others (“Defendants”)
seeking a permanent injunction against Shweta Varshney from making payments to Defendant Nos. 2 to 23 in relation to
investments held in the name of Vivek Varshney, deceased son of Kanti Gupta, and for a decree of declaration of the Plaintiffs’
share in Vivek Varshney’s property. The matter is currently pending.
4. Dr. Murad A. Rahman (“Plaintiff”) has filed a suit before the High Court of Judicature at Delhi against Ayesha Swathy Rehman,
Reliance Capital Asset Management Limited and others for declaration, partition and a permanent and mandatory injunction.
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The High Court of Judicature at Delhi has directed Reliance Capital Asset Management Limited to freeze the mutual fund
investments of the Plaintiff’s father, late M.A. Rahman, until the matter is disposed off. The amount involved in the matter is
`8.63 lakhs. The matter is currently pending.
5. V. Sundar has filed a petition before the District Judge, Coimbatore in relation to the transmission of mutual fund units on the
basis of the nomination made by D K P Varadarajan, the deceased investor. The units of mutual fund held in the folio of D K P
Varadarajan have been frozen pending the disposal of the suit by the competent court. The amount involved in the matter is
`1.35 lakhs. The matter is currently pending.
6. Siddharth Shukla (“Plaintiffs”) has filed a suit before the Additional District Judge, Jabalpur M.P., in relation to recovery of
`1.35 lakhs towards non receipt of units in Reliance Diversified Power Sector Fund.
7. Indian Dairy (“Plaintiffs”) has filed a suit before Senior Civil Judge, Rohini, Delhi in relation to recovery of `1.50 lakhs towards
non allotment of units in Reliance Liquid Plus Fund.
8. Minor Gitanshu Agarwal & Minor Taejaal Agarwal (represented by their natural father, Sanjoy Kumar Agarwal) (“Plaintiffs”)
have filed a suit before the Civil Judge (Jr. Div.) Howrah against RMF & others for declaration to the effect that the redemption
amount which was paid by Defendant No. 1 (RMF) to Defendant No. 2, being the grandfather of Minor Gitanshu Agarwal &
Minor Taejaal Agarwal belongs to the Plaintiff.
9. Piyush Chandra (“Plaintiff”) has filed a suit at High Court of Judicature at Delhi, against Reliance Mutual Fund and others for
obtaining a decree for permanent injunction. The matter is currently pending.
10. Manoj Kumar Sharma (“Plaintiff”) has filed a case in the Court of Magistrate of First Class, Family Court, Bareily against
Neetu Singh & Ors. including Reliance Capital Asset Management Limited as a party for transfer of units invested in the name
of Neetu Singh to his name.
11. MGD Electronics & Rajesh Rathi (“Plaintiffs”) have filed a suit before the Honourable Civil Judge, Gandhinagar against YES
Bank Ltd, Ms. Shruti Panchal, RMF and others for recovery of a total amount of `33.67 lakhs in respect of losses incurred as a
result of an alleged fraud conducted on the Plaintiffs. The amount involved is `2.13 lakhs and interest thereon. The matter is
currently pending.
12. Smt Rajam Srinivasan filed a suit against Reliance Capital Asset Management Limited alleging wrongful allotment of units of
mutual funds to Sujatha against cheque submitted by her for an amount of `3.00 lakhs. An order was passed by the High Court
of Judicature at Chennai directing Reliance Capital Asset Management Limited to deposit a sum of `5.16 lakhs with the
Registrar of the Court. Reliance Capital Asset Management Limited preferred an appeal. The matter is currently pending.
13. T Shobhana & Velayudha Nair filed a suit for injunction before the Civil Court, Thiruvananthapuram against Ms. Deepa, HSBC,
Axis Bank, Reliance India Limited and others. The Court has directed Reliance Capital Asset Management Limited to freeze the
mutual fund investments of the Anoop Vrindavan, until the matter is disposed off. The amount involved in the matter is `1.55
lakhs. The matter is currently pending.
14. Siddharth Shukla has filed a writ petition before the High Court of Madhya Pradesh, Principal Seat at Jabalpur, for recovery of
`1.35 lakhs in relation to non receipt of units in Reliance Diversified Power Sector Fund. The applicant has prayed for dismissal
of the application filed by Reliance Mutual Fund for making the broker/agent a necessary party to the case. The application has
been allowed by Additional District Judge, Jabalpur M.P. The matter is currently pending.
15. Mrs. Girija Gunaseelan, an investor of Reliance Mutual Fund and others filed a suit before the Court of Principal Subordinate
Judge of Coimbatore against ICICI Bank Ltd, Reliance Capital Asset Management Limited and others for succession to the
properties of S. Gunaseelan. The amount involved is `1.97 lakhs. The matter is currently pending.
16. M Sudhakar has filed a suit in the Court of Subordinate Judge at Vellore, against S. Charumathi & Ors. including Reliance
Mutual Fund for transfer of the investments made in the name of S. Charumathi to his name and to restrain the payment of such
investments to S. Charumathi. The matter is currently pending.
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17. Sanjay Upadhyay has filed a suit in the Court of Civil Judge, Senior Division at Agra, against Smt. Indra Rani Upadhyay,
Rashmi Singh & Ors. including Reliance Mutual Fund to restrain the payment of investments held in the name of late Pramod
Kumar Upadhyay to Rashmi Singh, being the nominee registered under such investments and thereby claiming a one-third share
in such investments held in the name of late Pramod Kumar Upadhyay. The matter is currently pending.
18. Mahabir Prasad Gupta filed and application on May 21, 2013 in the Permanent Lok Adalat for Public Utility Services, Goregaon,
Haryana against Reliance Mutual Fund and Karvy Computershare Private for recovery for redemption proceeds. The amount
involved is `0.75 lakhs. The matter is currently pending.
Consumer Cases
There are 23 consumer related complaints filed against Reliance Capital Asset Management Limited before various District and State
Consumer Disputes Redressal Forums. In certain cases the branch managers, regional managers and chief executive officer/ managing
director of Reliance Capital Asset Management Limited have also been added as parties. These matters involve allegations relating to
inter alia deficiency in service, fraud committed by third parties, rejection of application for allotment of units, refusal for redemption
of units and non-receipt of dividend. The approximate amount involved in these matters is approximately `185.00 lakhs. The matters
are currently pending.
Cases filed by Reliance Capital Asset Management Limited
Civil Cases
Reliance Capital Asset Management Limited has filed an application before the High Court of Judicature at Mumbai for permission to
act as an agent of the receiver appointed by the High Court in the suit (no. 1937 and 1938 of 2000) filed by Siddharth Deepak Chury
against Prabhakar Deepak Chury and others for a flat owned by Siddharth Deepak Chury which was being occupied by Reliance
Capital Asset Management Limited on leave and license basis. Reliance Capital Asset Management Limited has retained possession
of the flat since the security deposit paid by Reliance Capital Asset Management Limited was not refunded upon expiry of the license.
The aggregate amount involved in this matter is `10.00 lakhs. The matter is currently pending.
Consumer Cases
Reliance Capital Asset Management Limited has preferred an appeal to the State Consumer Disputes Redressal Commission,
Maharashtra (Aurangabad Bench) against an order of the District Consumer Disputes Redressal Forum. The aggregate amount
involved in this matter is approximately `0.10 lakhs. The matter is currently pending.
3. Reliance General Insurance Company Limited
Cases filed against Reliance General Insurance Company Limited
Civil cases
Rajeev Kumar Garg, the land lord of Muzafarnagar premises filed case against Reliance General Insurance Company Limited for the
recovery of `14.33 lakhs for the renovations which was done by him. A written statement has been filed along with an application for
rejection of plaint and the matter is currently pending.
Consumer cases
There are 6,659 Consumer Cases involving an aggregate amount of `5,546.42 lakhs. The matters are pending before various
Consumer Forums.
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Insurance Claims
There are 26,411 claims pending before the Motor Accidents’ Claims Tribunal and various courts against Reliance General Insurance
Company Limited involving an aggregate amount of `29,835.17 lakhs. The matters are currently pending before various tribunals.
Arbitration proceedings
Arbitration proceedings have been initiated against Reliance General Insurance Company Limited by National Rayon Corporation
Ltd., for a claim of `100 lakhs. The matter is currently pending and next date of hearing is on July 24, 2013.
Cases filed by Reliance General Insurance Company Limited
Civil Cases
1. A civil suit has been filed against ICICI Bank in the High Court of Judicature at Mumbai under Original Ordinary Civil
Jurisdiction claiming wrongful debit of a sum of `24.54 lakhs and seeking recovery of the same. The matter is posted for
evidence and the next date of hearing is on July 17, 2013.
2. A civil suit has been filed against CLICO (a foreign firm) and KM Dastur in the High Court of Judicature at Mumbai for not
paying the reinsurance monies of `3,721.92 lakhs.
Arbitration Proceedings
Reliance General Insurance Company Limited has filed two arbitration applications at Delhi against Mac Overseas and Allied
Enterprises (“Defendants”) for refund of the security deposit paid to the Defendants by Reliance General Insurance Company Limited
in relation to the premises, furniture and fixtures taken by Reliance General Insurance Company Limited on leave and license basis.
The aggregate amount involved in the matter is `18.60 lakhs. The matter is currently pending.
4. Reliance Securities Limited
Cases filed against Reliance Securities Limited
Civil Cases
1. Amit Bhargava (“Appellant”) has preferred an appeal to the High Court of Judicature at Delhi against Reliance Securities
Limited challenging the arbitration award dated December 24, 2009 in favour of Reliance Securities Limited. The Appellant had
filed an arbitration application before a panel of arbitrators at NSE, New Delhi against Reliance Securities Limited claiming
reversal of the contract executed on NSE among other claims towards damages and compensation. The amount involved in the
matter is `1,900 lakhs. The matter is currently pending.
2. A writ petition has been filed by a group of 59 clients before the High Court at Guwahati. The matters relate to unauthorised sale
of Oil India shares in the months of September 2009 by a local sub-broker in Tinsukia, Assam. The complainants have prayed
for issuance of directions to SEBI to conduct an enquiry and investigation. The matter is currently pending.
3. Jayshree Gupta, an ex-employee of Reliance Securities Limited, has filed a suit before the district court in Delhi alleging illegal,
unlawful, arbitrary termination of services. The complainant has sought for an aggregate amount of `9.42 lakhs. The matter is
currently pending.
4. Two (2) petitions were filed before the High Court of Judicature, Delhi against Reliance Securities Limited for reimbursement of
service tax and claim of the balance rent under lease agreements for 2 (two) office premises rented by Reliance Securities
Limited in Delhi. The High Court order in both matters was given against Reliance Securities Limited. Subsequently, Reliance
Securities Limited has preferred an appeal against both the orders before the Supreme Court of India. The aggregate amount
involved in these matters is `15.00 lakhs. The matters are currently pending.
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Arbitration Proceedings
1. Arbitration proceedings have been initiated against Reliance Securities Limited by a client, Premshankar Mishra before NSE,
Kolkata. The Complainant has alleged unauthorised transactions in his account and has claimed an amount of `1.79 lakhs. An
award for payment of `0.94 lakhs together with 10% p.a interest from July 25, 2012 till the date of payment has been passed
against Reliance Securities Limited. Reliance Securities Limited is in the process of filing an appeal against the award.
2. Mrs. Poonam Garg, a client of Reliance Securitied Limited, has initiated arbitration proceedings against Reliance Securities
Limited before NSE, Ahmedabad. The complainant has alleged unauthorised transactions in her account and has claimed an
amount of `32.42 lakhs. The matter is currently pending hearing.
3. Smt. Deepshika Singpuri, a client of Reliance Securities Limited, initiated arbitration proceedings aginst Reliance Securities
Limited before the NSE, Kolkata on April 24, 2013. Notice of the proceedings was received by Reliance Securities Limited on
June 12. 2013. The complainant has alleged unauthorised transactions in her account and has claimed an amount of `3.36 lakhs.
The matter is currently pending.
4. Shree Abani Bhushan Prasad, a client of Reliance Securities Limited has initiated arbitration proceedings before the BSE,
Kolkata on June 17, 2013. Notice of the proceedings was received by Reliance Securities Limited on July 3, 2013. The
complainiant has alleged unauthorised transactions in his account and has claimed an amount of `5.20 lakhs with interest at 18%
p.a. from the date of sale, January 16. 2013 till the dateof receipt of compensation. The matter is currently pending.
Consumer Cases
1. There are 6 (six) consumer complaints filed against Reliance Securities Limited before consumer disputes redressal fora in
various states and districts. The aggregate amount involved in these matters is `41.12 lakhs. The matters are currently pending.
2. Laxmi Tomar, Bhopal and Sanjay Mehta, Gujarat (“Appellant”) have preferred appeals to the respective State Consumer
Dispute Redressal Commission, against the orders given by the District forum in favour of Reliance Securities Limited in respect
of certain trades executed in illiquid scrip and unauthorised trades in their accounts by the company. The amount involved in
these matters is `4.31 lakhs. The matters are currently pending.
Labour cases
Mehul Dubey has filed a complaint against Reliance Securities Limited before the Industrial Tribunal / Labour Court Jammu /
Srinagar. The matter related to illegal termination of services without following due process of law. The complainant has prayed for
reinstatement and back wages. The matter is currently pending.
Cases filed by Reliance Securities Limited
Consumer Cases
Reliance Securities Limited has filed an appeal before the State Commission, Mumbai for setting aside impugned order passed by the
district forum at Sindhudurg. The amount involved in the matter is ` 4.03 lakhs. The matter is currently pending.
Arbitration Proceedings
1. Reliance Securities Limited has initiated arbitration proceedings against one of its clients, Mrs. Ruchi Vipin Agarwal before
NSE, Mumbai for recovery of debit balance in her trading account. The amount involved in the matter is `8.04 lakhs. The matter
is currently pending.
2. Reliance Securities Limited has preferred an appeal to the High Court of Judicature at Mumbai against the Arbitration award
dated August 18, 2010 in the matter of arbitration before NSE, Mumbai in the case filed by Badrinath Bodhai against Reliance
Securities Limited. The amount involved in the matter is `4.13 lakhs. The matter is currently pending.
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3. Reliance Securities Limited has filed 12 arbitration petitions against its clients before various stock exchanges for recovery of the
outstanding ledger balance in the clients’ accounts. The amount involved in these matters is approximately `32.62 lakhs. In
eleven of these matters, the Arbitrator has passed orders in favour of Reliance Securities Limited. In one of these cases, the
Arbitrator has passed orders against Reliance Securities Limited. These orders are pending execution.
Section 138 of the Negotiable Instruments Act, 1881
Reliance Securities Limited has filed criminal complaints under section 138 of the Negotiable Instruments Act, 1881, against 2 (two)
clients for dishonour of cheques amounting to `9.84 lakhs. The amount has been recovered from Franchisee Deposit on June 18,
2013. The matters are currently pending.
5. Reliance Commodities Limited
Cases filed by Reliance Commodities Limited
Criminal cases
Reliance Commodities Limited has filed an application before the High Court of Judicature, at Ahmedabad for quashing of the
criminal complaint pending before the local police at Ahmedabad in respect of the complaint filed by one of the commodity client
alleging unauthorized transactions in his account along with his family member’s accounts. A settlement agreement was entered into
between the parties and the same was communicated to FMC and MCX. The matter is currently pending.
Section 138 of the Negotiable Instruments Act, 1881
Reliance Commodities Limited has filed complaints under section 138 of the Negotiable Instruments Act, 1881, against 3 (three)
customers for dishonour of cheques amounting to `13.7 lakhs. The Court has issued bailable warrants in all three complaints. The
matters are pending.
6. Reliance Money Express Limited (RMEX)
Cases filed against Reliance Money Express Limited
Civil Cases
Pritpal Kaur has filed a suit before Civil Judge (Senior Division), Chandigarh against RMEX and others for recovery of arrears on
lease rent pertaining to the Branch office occupied by Reliance Money Express Limited during the period 2008 to 2010. The amount
involved is `1.03 lakhs. The matter is currently pending.
Cases filed by Reliance Money Express Limited
Civil Cases
RMEX has filed a suit before the Subordinate Court at Kottayam against Cee & Cee Gold & Forex Pvt. Ltd & others for recovery of
money advanced to them for conversion to foreign currency. The amount involved in the matter is `235 lakhs. The matter is pending.
Section 138 of the Negotiable Instruments Act, 1881
RMEX has filed complaints under Section 138 of the Negotiable Instruments Act, 1881, against a defaulting client, M/s Globe
Explorer for dishonour of cheques amounting to `3.00 lakhs. The matter is pending.
7. Reliance Life Insurance Company Limited (RLIC)
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Cases Filed against RLIC
Criminal Cases
102 complaint/ first information reports have been filed against certain employees, ex employees, advisors, agents and distributors of
Reliance Life Insurance Company Limited under various sections of the IPC in various police stations across India. The Complaint /
FIRs have been filed in relation to allegations of inter alia forgery, cheating, criminal breach of trust, issuance of fake receipts, theft at
office premises, spurious calling, wrong surrender of policies, wrong encashment of surrender cheques, insurance, dead persons, etc.
The matters are currently under police investigation.
Civil Cases
1. Dhruv Kumar (“Petitioner”) has filed a writ petition in the nature of public interest litigation before the Lucknow bench of High
Court of Judicature at Allahabad against the Union of India, Insurance Regulatory and Development Authority, SEBI, Reliance
Life Insurance Company Limited and 13 other insurance companies. The Petitioner is challenging the validity and sale of Unit
Linked Insurance Products. The matter is currently pending.
2. Rajiv Lohia (“Plaintiff”) has filed a suit before the High Court of Judicature at Calcutta against Reliance Life Insurance Company
Limited alleging non-payment of certain sums owed by Reliance Life Insurance Company Limited to the Plaintiff. The amount
involved in the matter is `10.52 lakhs along with interest at a rate of 18% p.a. The matter is currently pending.
3. Bal Natrajan (“Petitioner”) has filed a writ petition before the High Court of Judicature at Kerala challenging the order dated
August 31, 2007 of the Insurance Ombudsman, Cochin. The Petitioner is challenging the cancellation of an insurance policy by
Reliance Life Insurance Company Limited. The amount involved in the matter is `0.50 lakhs. The matter is currently pending.
4. 82 civil cases have been filed before various civil courts against Reliance Life Insurance Company Limited for disputes in relation
to inter alia repudiation of claims, recovery of commission, commercial disputes, injunction for termination of services and
termination of lease deeds. The amount involved in the matters is approximately `354.62 lakhs. The matters are currently pending.
5. 28 cases have been filed before Lok Adalats at various locations against Reliance Life Insurance Company Limited involving
disputes relating to repudiation of claims, wrongful termination and deficiency in service. The amount involved in these matters is
approximately `90.44 lakhs. The matters are currently pending.
6. Hartford Academy of Insurance and Education Private Limited have filed a suit before the High Court of Judicature at Chennai
against Reliance Life Insurance Company Limited for recovering an amount of `94.72 lakhs towards the alleged unpaid bills. The
matter is currently pending.
7. SLC Assurance has filed a winding up petition before the High Court of Judicature at Mumbai on June 8, 2013 against Reliance
Life Insurance Company Limited for recovery of an amount of `17.80 lakhs being balance consideration on the commission due
from Reliance Life Insurance Company Limited. The matter is currently pending.
8. SLC Vision has filed a winding up petition before the High Court of Judicature at Mumbai on June 8, 2013 against Reliance Life
Insurance Company Limited for recovery of an amount of `87.34 lakhs being balance consideration on the commission due from
Reliance Life Insurance Company Limited. The matter is currently pending.
Arbitration Cases
Syntel Global Private Limited (“Claimant”) has commenced arbitration proceedings before Rohit Kapadia, Arbitrator, Mumbai
against Reliance Life Insurance Company Limited alleging non-provision of services required to be rendered under letters of intent
dated March 1, 2008 and April 1, 2008 issued by Reliance Life Insurance Company Limited and a master services agreement dated
September 19, 2008 entered into with Reliance Life Insurance Company Limited. The Claimant seeks payment of `1,120.25 lakhs
with interest at a rate of 18% p.a. along with the arbitration costs or a sum of `989.17 lakhs for expenditure incurred towards setting
up office infrastructure along with the arbitration costs. The matter is currently pending.
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Tax Cases
1. Reliance Life Insurance Company Limited has preferred an appeal to the Commissioner of Income Tax (Appeals), Chennai
against an order passed by the Assistant Director of Income Tax, International Taxation, Chennai, in relation to classification of
royalty payment made to the AMP Group, Australia. The amount involved in the matter is `5.23 lakhs. The matter is currently
pending.
2. Reliance Life Insurance Company Limited has preferred an appeal to the Small Causes Court of Bombay against an order dated
August 8, 2008 passed by the Municipal Corporation of Greater Mumbai (“MCGM”) directing Reliance Life Insurance Company
Limited to pay property tax in accordance with the enhanced value of a leasehold property of Reliance Life Insurance Company
Limited in Ghatkopar, Mumbai. The MCGM has filed the details of computation of the property tax, claiming arrears of `93.00
lakhs from Reliance Life Insurance Company Limited before the Court and Reliance Life Insurance Company Limited has replied
to the same. The matter is currently pending.
3. Reliance Life Insurance Company Limited has preferred an appeal to the Commissioner (Appeals) in Customs Excise and Service
Tax Appellate Tribunal (“CESTAT”), South Zonal Bench, Chennai against an order of the Commissioner (Appeal), Chennai in
relation to disallowance of ineligible credit of service tax. The amount involved in the matter is `33.80 lakhs. The matter is
currently pending.
4. Reliance Life Insurance Company Limited has preferred 9 appeals to the Commissioner of Income Tax (Appeal), Mumbai against
orders of the TDS Officer, Mumbai in relation to short deduction of tax. The amount involved in the matter is `1,449.41 lakhs.
The matters are currently pending.
5. Reliance Life Insurance Company Limited has preferred an appeal on May 24, 2013 bearing no. ST/87198/13-MUM to Customs
Excise and Service Tax Appellate Tribunal (“CESTAT”), West Zonal Bench, Mumbai against the order of Commissioner of
Service Tax, Mumbai in relation to exempted services of the “Traditional Golden Year Plan”. The amount involved in the matter
is `788.64 lakhs. The matter is currently pending.
6. Reliance Life Insurance Company Limited has preferred an appeal on June 20, 2013 to the Commissioner of Income Tax
(Appeal), Mumbai against orders of the Assessing Officer in relation to disallowance of 14A under Income Tax Act, 1961 for
assessment year 2011-12. The amount involved in the matter is `5,585.50 lakhs. The matter is currently pending.
Labour Cases
10 complaints have been filed before different labour conciliation officers against Reliance Life Insurance Company Limited
involving allegations of inter alia illegal termination and non-payment of wages. Reliance Life Insurance Company Limited has filed
its replies before the respective labour authorities.
Consumer Cases
1. 30 appeals have been preferred to the respective State Consumer Disputes Redressal Commissions challenging the orders of the
various District Consumer Disputes Redressal Forums passed in favour of Reliance Life Insurance Company Limited. The amount
involved in the matters is approximately `353.47 lakhs. The matters are currently pending.
2. 632 consumer complaints have been filed before consumer disputes redressal fora in various districts and states of India against
Reliance Life Insurance Company Limited. These matters involve allegations relating to inter alia claims repudiation, non-receipt
of policy documents and deficiency of service. The amount involved in the matters is approximately `1,928.17 lakhs. The matters
are currently pending.
3. Reliance Life Insurance Company Limited has preferred 68 appeals to various State Consumer Disputes Redressal Forums against
orders of the respective District Consumer Disputes Redressal Commissions. The amount involved in the matters is approximately
`270.83 lakhs. The matters are currently pending.
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4. 2 Appeals have been preferred to the respective National Consumer Disputes Redressal Commissions challenging the order of
State Consumer Disputes Redressal Commission passed in favour of Reliance Life Insurance Company Limited. The amount
involved in the matters is approximately `30.90 lakhs. The matters are currently pending.
5. Reliance Life Insurance Company Limited has preferred 1 Appeal to National Consumer Disputes Redressal Commissions against
order of the respective District Consumer Disputes Redressal Forum and State Consumer Dispute Redressal Commission. The
amount involved in the matters is approximately `4.8 lakhs. The matters are currently pending.
Insurance Cases
1. 433 complaints have been filed before the Insurance Ombudsman at various locations against Reliance Life Insurance Company
Limited involving disputes relating to inter alia refusal to refund the premium, cancellation of policy, unilaterally change in terms
of the policy. The amount involved in these matters is not ascertainable. Reliance Life Insurance Company Limited has replied to
281 complaints and is in the process of replying to the remaining complaints.
2. 6,993 complaints have been filed by policy holders received and have been received by Reliance Life Insurance Company Limited
from Insurance Regulatory and Development Authority and Life Council involving disputes relating to inter alia miss-selling,
non-processing claims, repudiation of claims, rejection of claims, refusal to refund premium amounts, non-issue of premium
receipts, unilaterally changing the terms of the policy, non receipt of the policy documents, recovery of money, fraud committed
by employees of Reliance Life Insurance Company Limited and deficiency of services. The amount involved in these cases is not
ascertainable.
Notices
1. 233 inspection notices were issued by various labour enforcement officers against different branches of Reliance Life Insurance
Company Limited in relation to compliances under labour laws. Reliance Life Insurance Company Limited has replied to 232 of
these notices and is in the process of replying to the 1 remaining notices.
2. 915 legal notices were issued against Reliance Life Insurance Company Limited in relation to various issues pertaining to policy
matters having claim and non-claim disputes, notices from statutory / regulatory authorities, non-payment of the lease rentals,
commercial disputes, unilateral termination or breach of lease / leave and license agreements. Reliance Life Insurance Company
Limited has replied to all the notices.
Cases Filed by RLIC
Civil Cases
1. Reliance Life Insurance Company Limited has filed four separate civil suits before the High Court at Bombay against Dawnay
Day, Sanjay Jadhav, Rajiv Lohia and Naizi Mohammad (“Defendants”) for recovery of amounts due to Reliance Life Insurance
Company Limited from the Defendants. The matters involve disputes relating to inter alia unsatisfactory services rendered by the
service provider, breach of contract and excess payment of remuneration. The amount involved in the matters is approximately
`765.52 lakhs. The matters are currently pending.
2. Reliance Life Insurance Company Limited has filed two civil suits before the City Civil Court, Mumbai against four former
employees namely Abhinav Chahad, and Santosh Mestry (“Defendants”) for recovery of amounts due for the alleged breach of
the respective employment contracts of the Defendants. The amount involved in the matters is `0.93 lakhs. The matters are
currently pending.
3. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Allahabad against
Insurance Ombudsman, U.P. and Uttrakhand and Vijay Kumar Gupta challenging an award of the Insurance Ombudsman,
Lucknow pertaining to computation of the premium amount. The matter is currently pending.
4. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Hyderabad against
Insurance Ombudsman, (A.P., Karnataka and Yanam) and M. Subhash challenging an award dated February 7, 2010 of the
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Insurance Ombudsman, Hyderabad pertaining to payment of sum assured to the nominee after the death of life assured. The
amount involved in the matter is `1.00 lakhs. The matter is currently pending.
5. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Chandigarh against
permanent Lok Adalat, Gurgaon and Surendra Kumar challenging an award dated March 21, 2011 of the permanent Lok Adalat,
Gurgaon pertaining to payment of claim arising out of health insurance. The amount involved in the matter is `2.10 lakhs. The
matter is currently pending.
6. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Lucknow against
Insurance Ombudsman, U.P and Uttarakhand and Sudhir Srivastava challenging the award of the Insurance Ombudsman,
Lucknow pertaining to claim related to Total Permanent Disability rider in the concerned policy. The matter is currently pending.
7. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Guwahati against
Insurance Ombudsman, Assam, Meghalaya, Mizoram, Arunachal Pradesh, Nagaland & Tripura and Ajijul Haque challenging the
award of the Insurance Ombudsman, Assam, Meghalaya, Mizoram, Arunachal Pradesh, Nagaland & Tripura pertaining to claim
related to repudiation of claim based on suppression of material facts. The matter is currently pending.
Arbitration Proceedings
Reliance Life Insurance Company Limited has commenced arbitration proceedings before arbitrator M.P.S. Rao against Azilon
Software Solutions Limited (“Azilon”) in relation to the non-provision of services by Azilon pursuant to a master services agreement
dated July 26, 2007 entered into by Azilon with Reliance Life Insurance Company Limited. Reliance Life Insurance Company
Limited had released 30% of the agreed services fees i.e. `9.36 lakhs under the agreement which has already been realized by Azilon.
The Bombay High Court pursuant to its order dated January 21, 2011 appointed M. P. S. Rao as a sole arbitrator to adjudicate the
matter. The amount involved in the matter is `9.36 lakhs along with `100.00 lakhs towards damages. The matter is currently pending.
8. Reliance Home Finance Limited
Cases filed against Reliance Home Finance Limited
Consumer Cases
There are 10 consumer cases filed against Reliance Home Finance Limited in respect of disbursement of loan amounts. These cases
involve an amount of `0.94 lakhs and are at various stages of adjudication.
9. Indian Commodity Exchange Limited
Cases filed against Indian Commodity Exchange Limited
Civil Cases
1. MMTC has filed a case against Indiabulls Financial Services Limited, Reliance Exchangenext Limited and Indian Commodity
Exchange Limited. MMTC alleged that the transfer of 26% shareholding to Reliance Exchangenext Limited by Indiabulls
Financial Services Limited is in breach of lock-in requirements under a share sale and purchase agreement dated October 13,
2010 between the MMTC and Indiabulls Financial Services Limited. MMTC has sought for declaration of transfer of shares to
be void. The matter is pending before the Company Law Board.
2. Narayane Behera & Others has filed a petition in Orissa High Court against the Union of India represented through Secretary,
Ministry of Consumer Affairs, Forward Market Commission, Magnum Finance Services Ltd and Indian Commodity Exchange
Limited in month of Feb 2013. The Petitioners are Clients of Magnum Finance Services Ltd and pray for action against this
company for violation of contract concerning amount invested with them. The matter is awaiting listing for hearing by the
honourable High Court.
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10. Reliance Exchangenext Limited
Cases filed against Reliance Exchangenext Limited
Civil Cases
MMTC has filed a case against Indiabulls Financial Services Limited, Reliance Exchangenext Limited and Indian Commodity
Exchange Limited. MMTC alleged that the transfer of 26% shareholding to Reliance Exchangenext Limited by Indiabills Financial
Services Limited is in breach of lock-in requirements under a share sale and purchase agreement dated October 13, 2010 between the
MMTC and Indiabulls Financial Services Limited. MMTC has sought for declaration of transfer of shares to be void. The matter is
pending before the Company Law Board.
11. Quant Capital Private Limited
Cases filed against Quant Capital Private Limited
Civil Cases
1. Quant Transactional Services Private Limited has filed a Suit No. 225 of 2013 against Quant Capital Finance and Investment
Private Limited and others under section 6 of the Specific Relief Act before the High Court of Judicature at Mumbai for recovery
of possession of immovable property. Quant Transactional Services Private Limited has alleged that Quant Capital Private
Limited and others have forcefully dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of
Motion No. (1) 624 of 2013 for repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently
pending.
2. Adil Patrawala has filed a case CP No. 27 of 2013 before the Company Law Board, Mumbai against Quant Capital Private
Limited and Reliance Capital Limited under section 397 – 398 of the Companies Act claiming mismanagement in the affairs of
Quant Capital Private Limited and oppression of the minority shareholder. The petition is currently pending. The Company Law
Board granted an ad-interim relief claimed Adil Patrawala that his shareholding in Quant Capital Private Limited cannot be
diluted.
Cases filed by Quant Capital Private Limited
Civil Cases
Quant Capital Private Limited has filed a summary suit No. 118 of 2013 against Quant Transactional Services Private Limited for
recovery of outstanding dues of `902.97 lakhs. A notice of motion (1) 461 of 2013 claiming interim relief praying lien over the assets
of Quant Transactional Services Private Limited was filed, which the High Court subsequently denied. The matter is currently
pending.
12. Quant Broking Private Limited
Cases filed against Quant Broking Private Limited
Civil Cases
Quant Transactional Services Private Limited has filed against Quant Broking Private Limited and others under section 6 of the
Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant
Transactional Services Private Limited has alleged that Quant Broking Private Limited and others have forcefully dispossessed them
from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the premises
and for taking inventory of the Fixed Assets. The matter is currently pending.
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13. Quant Securities Private Limited
Cases filed against Quant Securities Private Limited
Civil Cases
Quant Transactional Services Private Limited has filed against Quant Securities Private Limited and others under section 6 of the
Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant
Transactional Services Private Limited has alleged that Quant Services Private Limited and others have forcefully dispossessed them
from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the premises
and for taking inventory of the Fixed Assets. The matter is currently pending.
14. Quant Commodities Private Limited
Cases filed against Quant Commodities Private Limited
Civil Cases
Quant Transactional Services Private Limited has filed against Quant Commodities Private Limited and others under section 6 of the
Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant
Transactional Services Private Limited has alleged that Quant Commodities Private Limited and others have forcefully dispossessed
them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the
premises and for taking inventory of the Fixed Assets. The matter is currently pending.
15. Quant Capital Advisors Private Limited
Cases filed against Quant Capital Advisors Private Limited
Civil Cases
Quant Transactional Services Private Limited has filed against Quant Capital Advisors Private Limited and others under section 6 of
the Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant
Transactional Services Private Limited has alleged that Quant Capital Advisors Private Limited and others have forcefully
dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for
repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently pending.
16. Quant Capital Finance and Investments Private Limited
Cases filed against Quant Capital Finance and Investments Private Limited
Civil Cases
Quant Transactional Services Private Limited has filed against Quant Capital Finance and Investments Private Limited and others
under section 6 of the Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable
property. Quant Transactional Services Private Limited has alleged that Quant Capital Finance and Investments Private Limited and
others have forcefully dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624
of 2013 for repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently pending.
17. Quant Investment Service Private Limited
Cases filed against Quant Investment Service Private Limited
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Civil Cases
Quant Transactional Services Private Limited has filed against Quant Investment Service Private Limited and others under section 6
of the Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant
Transactional Services Private Limited has alleged that Quant Investment Service Private Limited and others have forcefully
dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for
repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently pending.
18. QCAP Trade Private Limited
Cases filed against QCAP Trade Private Limited
Civil Cases
Quant Transactional Services Private Limited has filed against QCAP Trade Private Limited and others under section 6 of the Specific
Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant Transactional
Services Private Limited has alleged that QCAP Trade Private Limited and others have forcefully dispossessed them from the
premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the premises and for
taking inventory of the Fixed Assets. The matter is currently pending.
19. Reliance Asset Reconstruction Company Limited
Cases filed against Reliance Asset Reconstruction Company Limited
Civil Cases
Hotel Punja International Limited has filed a writ petition No. 2843 of 2011 against Vijaya Bank and Reliance Asset Reconstruction
Company Limited before the Karnataka High Court seeking directions for Reliance Asset Reconstruction Company Limited to accept
OTS proposal. Reliance Asset Reconstruction Company Limited vide letter dated May 17, 2013 accepted Hotel Punja International
Limited’s OTS proposal and advised them to make the payment on or before June 30, 2013, failing which the recovery certificate will
be executed. The matter is currently pending.
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GOVERNMENT AND OTHER APPROVALS
On the basis of the approvals listed below, our Company can undertake this Issue and our current business activities and other than disclosed
below no further material approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or
continue our business activities. Unless otherwise stated, these approvals are all valid as of the date of this Letter of Offer.
I. Tax related and other approvals
1. Permanent Account Number AAACA4252H.
2. Tax Deduction Account Number MUMA20296D under the Income Tax Act, 1961.
3. Permits to pay the entertainment tax and additional tax on basis of return granted by the Commercial Tax Department of
relevant State Government.
4. Registration under the Central Sales Tax (Registration and Turnover) Rules, 1957 granted by the Commercial Tax Department
of relevant State Government.
5. Registration under the relevant state value added tax rules granted by the Commercial Tax Department of relevant State
Government.
II. Approvals in relation to human resources
1. Provident Fund Number MH / BAN / 45577.
2. Employee State Insurance Corporation Number 31 - 43575 – 122.
3. We have obtained the following Professional Tax Registration under the relevant state laws:
(i) State of Maharashtra (all locations): 27960001845P;
(ii) State of Gujarat (Vapi): PE2507001542;
(iii) State of Madhya Pradesh (all locations): 78271103303;
(iv) State of Andhra Pradesh (all locations, except Vizianagaram): 28405770417;
(v) State of Tamil Nadu (all locations): 08-117-PE-0034; and
(vi) West Bengal (all locations): RCE0037281.
III. Approvals in relation to the Business
Our Company is required to obtain various approvals in relation to our business. The registrations and approvals required to be obtained
by our Company usually in respect of our business in India include the following:
Cinema Licenses
1. License for cinema issued by the Commissioner of Police of the cities where the theaters of our Company are located.
2. License to sell tickets for admission to a cinema issued by the Commissioner of Police / Deputy Commissioner of the cities
where the theaters of our Company are located.
3. License for exhibition of cinematograph shows in theatres issued by the District Magistrate / Deputy Commissioner of the
cities where the theaters of our Company are located.
Municipality Laws
1. Licenses for storage of cinematograph films issued by license department of the relevant local municipalities.
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2. Licenses for establishment of cafeteria in theatres managed and operated by our Company issued by license department of the
relevant local municipalities.
3. Certificate for sanitary convenience issued by health department of the relevant local municipalities.
4. No objection certificates for disposal of treated sewage/effluents issued by the relevant local municipalities.
Environmental Regulations
Consents from the State Pollution Control Board to operate under the provisions of the Water (Prevention and Control of Pollution)
Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981.
Labour Laws
Registration Certificate of contract labours under the Contract Labour (Registration and Abolition) Act, 1970 issued by the relevant
state authorities.
Prevention of Food Adulteration Laws
License under the Prevention of Food Adulteration Act, 1954 and the Prevention of Food Adulteration Rules, 1955 issued by the
relevant state authorities.
Shops and Establishments Legislations
Registration Certificate of Establishment under the Shops and Establishment Act, 1948 as issued by the Corporation of the cities where
the theaters of our Company are located.
Fire and Emergency Service Laws
Fire license issued by the Directorate of Fire and Emergency Services under the Fire Force Act, applicable in the states where the
theatres of our Company are situated.
Certain approvals may have elapsed in their normal course and our Company has applications to the relevant authorities for renewal of such
licenses and / or approvals or is in the process of making such applications. We undertake to obtain all approvals, licenses, registrations and
permissions required to operate our business.
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OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
The Issue has been authorised by a resolution of our Board of Directors passed at their meeting held on July 25, 2012, pursuant to Section 81 (1)
of the Companies Act. This Letter of Offer has been approved by our Board of Directors on July 24, 2013.
Our Company received in-principle approvals from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated April 18,
2013 and April 10, 2013, respectively.
Prohibition by SEBI or Other Governmental Authorities
Our Company, Promoters, natural persons behind the Promoters, Directors, Promoter Group and Group Companies, have not been prohibited
from accessing or operating in capital markets under any order or direction passed by SEBI or any other regulatory or governmental authority.
The companies, with which our Promoters, Directors or persons in control of our Company are associated as promoter, directors or persons in
control have not been prohibited from accessing in capital markets under any order or direction passed by SEBI or any other regulatory or
governmental authority.
Except as provided in the table below, there has been no action taken by SEBI against any entity belonging to the Promoter Group or forming
part of Group Companies.
Sl. No. Name of Promoter Group / Group company Action taken by SEBI
1. Reliance Securities Limited Two show cause notices were issued by SEBI to Reliance Securities
Limited (RSL) on August 9, 2010 and August 31, 2010, alleging
violation of the provisions of the SEBI (Stock Brokers and Sub-
brokers) Regulations, 1992 in respect of certain irregularities in
operations. RSL, subsequently, approached SEBI under the SEBI
guidelines for Consent Orders without admitting to, or denying,
guilt. The terms of consent were accepted by SEBI. The accepted
terms of consent were issued in the form of a Consent Order on June
9, 2011. According to the terms of the Consent Order, amongst other
things, RSL was directed to pay `25,00,000 as settlement charges
for settlement of the matter. Pursuant to the said Consent Order,
Reliance Securities Limited paid `25,00,000 and the said
proceedings stand disposed off.
2. Reliance Equities International Private Limited(1)
SEBI conducted an inspection of books and records of Reliance
Equities International Private Limited (“REIPL”) for the period
April 1, 2008 to March 31, 2009. REIPL had submitted its responses
on various findings / comments of SEBI. Subsequently, SEBI by its
letter date August 31, 2010 directed REIPL to rectify certain defects
which it had failed to rectify. REIPL submitted its response to SEBI
on September 24, 2010 confirming the corrective steps taken.
3. Reliance Share & Stock Brokers Private Limited SEBI, vide order dated December 11, 2006 had suspended Reliance
Share & Stock Brokers Private Limited’s (RSSBPL) registration as
stock broker for a period of 4 (four) months. Thereafter, RSSBPL
filed an appeal No. 151 of 2006 with Securities Appellate Tribunal
(SAT) challenging SEBI’s order. Meanwhile, SEBI through its letter
dated November 30, 2007 has agreed to the consent terms proposed
by RSSBPL of settling the matter, among other things, by payment
of `50,00,000. However, the payment under the abovementioned
letter from SEBI was subject to approval of consent terms by SAT.
SEBI vide order no. EFD / DRAIII / VRP / SS / 109671 / 2007
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dated November 30, 2007 has accepted RSSBPL consent
application for a consent order towards settlement of the dispute
with them. The dispute was settled without admitting or denying the
guilt under the consent terms proposed by RSSBPL and as approved
by the independent high power advisory committee (HPAC) of
SEBI.
4. Reliance Capital Limited SEBI had issued a letter (no. MIRSD-4/DP/INSP/OW/10677/2010)
dated July 1, 2010 to Reliance Capital in respect of certain
irregularities / deficiencies in its depository operations.
Reliance Capital has submitted the detailed reply vide letter dated
July 20, 2010 confirming the corrective steps taken.
5. Reliance Capital Asset Management Limited 1. SEBI on June 3, 2009 directed
Reliance Capital Asset Management Limited to withdraw one
particular advertisement pertaining to the NFO of Reliance
Infrastructure Fund of Reliance Mutual Fund for non
compliance with regulation 30(1) of Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996.
SEBI vide order dated January 12, 2010 disposed off the
proceedings and directed Reliance Capital Asset Management
Limited to abide by the aforesaid regulations.
2. SEBI had imposed a fine of
`6,00,000 on Reliance Mutual Fund in March 2003 for breach
of investment restrictions which was duly paid.
(1)This company has been amalgamated with Reliance Capital Limited
There has been no action taken by SEBI against our Directors or any entity our Directors are involved in as promoters or directors.
Details of the entities that our Directors are associated with, which are engaged in securities market related business and are registered with
SEBI for the same are as follows:
Name of the Director Sujal Shah
Name of the entity Keynote Corporate Services Limited
SEBI Registration Number of the entity INM 0000 03606
If registration has elapsed, reason for non-renewal Permanent Registration
Details of any inquiry/investigation conducted by SEBI at any
time
Details as given below
Penalty imposed by SEBI (penalty includes deficiency/warning
letter, adjudication proceedings,
suspension/cancellation/prohibitory order
(i) Keynote Corporate Services Limited’s (Keynote) certificate of
registration was suspended for a period of two months pursuant
to a SEBI order dated September 26, 2003 in relation to the
matter of public issue of Maha Chemicals Limited which
opened for subscription in April 1994. Keynote was one of the
lead managers to the said issue. The Presiding Officer,
Securities Appellate Tribunal pursuant to his order dated
October 21, 2003 stayed the order dated September 26, 2003.
Further, pursuant to a subsequent order of April 21, 2004, SAT
directed Keynote not to negotiate, accept or act upon any new
assignments for two months. The matter has been settled.
(ii) A show cause notice was issued by SEBI to Keynote in
relation to a public cum rights issue of Majestic Industries
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Limited during the year 1996. In June 2009, Keynote filed
consent terms with SEBI which was further revised pursuant to
a letter dated August 7, 2009. SEBI by its order dated February
15, 2010 approved the consent terms. The matter has been
settled.
(iii) SEBI issued a show cause notice dated January 30, 2004 to
Keynote in relation to the public issue of Consortex Karl
Doelitzsch (India) Limited (formerly known as Andhra
Pradesh Power Tools Limited). A personal hearing was
conducted on September 16, 2005. Subsequently, a further
show cause notice dated June 7, 2011 was issued by SEBI
enclosing the report of the Enquiry Officer. The Enquiry
Officer in his report had recommended to SEBI to terminate
the proceedings against Keynote as no charges were
established. Keynote has filed its reply dated June 24, 2011
with SEBI. A personal hearing was scheduled on September 2,
2011 and subsequently, Keynote has on April 13, 2012, filed
its consent terms.
(iv) SEBI has issued a show cause notice dated September 9, 2008
to Keynote in relation to the public issue of Nissan Copper
Limited. Consent terms dated December 8, 2008 were filed by
Keynote Corporate Services Limited with SEBI. SEBI by its
order dated April 9, 2009 approved the consent terms. The
matter has been settled.
(v) A show cause notice dated May 20, 2011 was issued by SEBI
to Keynote Corporate Services Limited in relation to a public
issue of Emmbi Polyarns Limited dealt with during the year
2010. Keynote has filed its reply dated July 12, 2011.
Subsequently, on October 10, 2011 a personal hearing was
granted. The matter is currently pending.
(vi) SEBI has passed an order dated January 31, 2012 against
Keynote imposing a penalty of ` 10 lakhs in relation to the
public issue of Edserve Softsystems Limited. Keynote has filed
an appeal to the SAT on March 13, 2012. The matter is
pending.
Outstanding fee payable to SEBI by the entity, if any Nil
IRDA Penalties
Except as provided in the table below, there has been no penalty imposed by the IRDA against any entity belonging to the Promoter Group or
forming part of Group Companies.
Sl. No. Name of Promoter Group /
Group company
Details Paid on Penalty imposed
1. Reliance General Insurance
Company Limited
Co-insurer – Breach by lender May 29, 2006 1,000
Co-insurer – Breach by lender August 28, 2006 1,000
Co-insurer- Breach by lender August 28, 2006 1,000
Predatory Pricing December 5, 2006 50,00,000
Breach of File & Use July 28, 2009 20,00,000
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Sl. No. Name of Promoter Group /
Group company
Details Paid on Penalty imposed
Guidelines (Health wise
policy)
2. Reliance Life Insurance Company
Limited
Payment of excess referral fees
than envisaged in the referral
guidelines and deviation in the
File & Use procedure
particularly in group products
in violation of circular
IRDA/Cir. No.
01/IRDA/ACTL/MC/2006-07
dated 12/7/2006
August 12, 2010 10,00,000
Prohibition by RBI
Neither our Company nor its Promoters, Directors, Group Companies or relatives (as per the Companies Act) of our Promoters are identified as
willful defaulters by the RBI or any other governmental authority. There are no violations of securities laws committed by them in the past or
are pending against them.
Eligibility for the Issue
Our Company is a listed company and has been incorporated under the Companies Act. Our Equity Shares are presently listed on the Stock
Exchanges. It is eligible to offer this issue in terms of Chapter IV of the ICDR Regulations. It is eligible to offer the Issue in terms of Chapter IV
of the ICDR Regulations.
Please note that our Company has undergone a change of control consequent to an acquisition of its majority stake by the Reliance Group in
June 2005 in accordance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and
is making a rights issue of its securities for the first time subsequent to such change of control in accordance with clause (3)(a) of Part E of
Schedule VIII of ICDR Regulation. Therefore, the disclosures in the Letter of Offer have been made in accordance with Part A of Schedule VIII
of the ICDR Regulations, except for disclosures as specified in clause (4) of Part E of Schedule VIII of the ICDR Regulations.
DISCLAIMER CLAUSE OF SEBI
AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY
UNDERSTOOD THAT THE SUBMISSION OF THE DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE
DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY
RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE
ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS
EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER, AXIS CAPITALLIMITED HAS CERTIFIED THAT
THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN
CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE
FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR
MAKING INVESTMENT IN THE PROPOSED ISSUE.
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE
FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER
OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD
MANAGER, AXIS CAPITAL LIMITED WILL FURNISH TO SEBI A DUE DILIGENCE CERTIFICATE WHICH WILL READ AS
FOLLOWS:
(1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE
COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER
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MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO
THE ISSUE;
(2) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, OUR DIRECTORS AND
OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS
CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS
AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:
(a) THE DRAFT LETTER OF OFFER FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS,
MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
(b) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS GUIDELINES,
INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY
OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
(c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO
ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE
PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE
COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL
REQUIREMENTS.
(3) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OF
OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID.
(4) WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR
UNDERWRITING COMMITMENTS – NOT APPLICABLE
(5) WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR
SPECIFIED SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE
SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN
SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING
FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS/DRAFT PROSPECTUS WITH THE BOARD
TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING
PROSPECTUS/DRAFT PROSPECTUS – NOT APPLICABLE
(6) WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED
SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED
WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN
MADE IN THE DRAFT RED HERRING PROSPECTUS/DRAFT PROSPECTUS – NOT APPLICABLE
(7) WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-
REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM
THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE
RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’
CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT
ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN
ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER
ALONG WITH THE PROCEEDS Of THE PUBLIC ISSUE – NOT APPLICABLE
(8) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE FUNDS ARE BEING
RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE
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MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE COMPANY AND THAT THE ACTIVITIES
WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS
MEMORANDUM OF ASSOCIATION.
(9) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS
RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF
SUB-SECTION (3) OF SECTION 73 OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE
RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES
MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO
BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION -
NOTED FOR COMPLIANCE
(10) WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER THAT THE INVESTORS
SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.
(11) WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE
BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN
MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE
INVESTOR TO MAKE A WELL INFORMED DECISION.
(12) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER:
(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE
DENOMINATION FOR THE EQUITY SHARES OF THE COMPANY AND
(b) AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND
ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.
(13) WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009 WHILE MAKING THE ISSUE.
(14) WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN
VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE
PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE, ETC.
(15) WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE
PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS
TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE
REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
(16) WE ENCLOSE STATEMENT ON ‘PRICE INFORMATION OF PAST ISSUES HANDLED BY MERCHANT BANKERS
(WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)’, AS PER FORMAT SPECIFIED BY THE BOARD THROUGH
CIRCULAR - NOT APPLICABLE
(17) WE CERTIFY THAT PROFITS FROM RELATED PARTY TRANSACTIONS HAVE ARISEN FROM LEGITIMATE
BUSINESS TRANSACTIONS.
THE FILING OF THIS LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER
SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR
OTHER CLEARANCE AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE
RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER ANY IRREGULARITIES OR LAPSES IN THIS
LETTER OF OFFER.
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Caution
Disclaimer clauses from our Company and the Lead Manager
Our Company and the Lead Manager accept no responsibility for statements made otherwise than in this Letter of Offer or in any advertisement
or other material issued by our Company or by any other persons at the instance of our Company and anyone placing reliance on any other
source of information would be doing so at his own risk.
The Lead Manager and our Company shall make all information available to the Equity Shareholders and no selective or additional information
would be available for a section of the Equity Shareholders in any manner whatsoever including at presentations, in research or sales reports etc.
after filing of this Letter of Offer with SEBI.
No dealer, salesperson or other person is authorised to give any information or to represent anything not contained in this document. You must
not rely on any unauthorised information or representations. This Letter of Offer is an offer to sell only the Equity Shares and rights to purchase
the Equity Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this
Letter of Offer is current only as of its date.
Investors who invest in the Issue will be deemed to have represented to our Company and Lead Manager and their respective directors, officers,
agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire
Equity Shares, and are relying on independent advice / evaluation as to their ability and quantum of investment in the Issue.
Disclaimer with respect to jurisdiction
This Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and regulations thereunder. Any disputes
arising out of the Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, India only.
Designated Stock Exchange
The Designated Stock Exchange for the purpose of the Issue will be BSE.
Disclaimer Clause of the BSE
As required, a copy of the Draft Letter of Offer has been submitted to the BSE.
BSE Limited (“the Exchange”) has given vide its letter dated April 18, 2013, permission to this Company to use the Exchange’s name in this
Letter of Offer as one of the stock exchanges on which the company’s securities are proposed to be listed. The Exchange has scrutinized this
letter of offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does
not in any manner:
i. warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer; or
ii. warrant that this company’s securities will be listed or will continue to be listed on the Exchange; or
iii. take any responsibility for the financial or other soundness of this company, its promoters, its management or any scheme or project of
this company;
and it should not for any reason be deemed or construed that this letter of offer has been cleared or approved by the Exchange. Every person
who desires to apply for or otherwise acquires any securities of this company may do so pursuant to independent inquiry, investigation and
analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent
to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason
whatsoever.
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Disclaimer Clause of the NSE
As required, a copy of this letter of offer has been submitted to National Stock Exchange of India (hereinafter referred to as NSE). NSE has
given vide its letter Ref No. NSE/LIST/200766-Q dated April 10, 2013 permission to the Issuer to use its name in this letter of offer as one of
the stock exchanges on which this Issuer’s securities are proposed to be listed. NSE has scrutinized this Letter of Offer for its limited internal
purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid
permission given by NSE should not in any way be deemed or construed that the Letter of Offer has been cleared or approved by NSE; nor does
it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer; nor does it warrant that
this Issuer’s securities will be listed or will continue to be listed on the exchange; nor does it take any responsibility for the financial or other
soundness of this Issuer, its Promoters, its management or any scheme or project of this Issuer.
Every person who desires to apply for or otherwise acquires any securities of this Issuer may do so pursuant to independent inquiry,
investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such
person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or
for any other reason whatsoever.
Selling Restrictions
The distribution of this Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be
restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Letter of Offer may come are required to
inform themselves about and observe such restrictions. Our Company is making the Issue of Equity Shares on a rights basis to the Equity
Shareholders of our Company and will dispatch the Letter of Offer and CAFs only to Equity Shareholders who have provided an Indian address.
No action has been or will be taken to permit the a public offering of the Equity Shares or Rights Entitlements to occur in any jurisdiction, or the
possession, circulation, or distribution of this Letter of Offer or any other material relating to our Company, the Equity Shares or Rights
Entitlements in any jurisdiction, where action would be required for that purpose, except that this Letter of Offer has been filed with SEBI.
Accordingly, the Equity Shares and Rights Entitlements may not be offered or sold, directly or indirectly, and none of this Letter of Offer or any
offering materials or advertisements in connection with the Equity Shares or Rights Entitlements may be distributed or published in any
jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Letter of Offer will not constitute an
offer in those jurisdictions in which it would be illegal to make such an offer.
This Letter of Offer and its accompanying documents are being supplied to you solely for your information and may not be reproduced,
redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.
If this Letter of Offer is received by any person in any jurisdiction where to do so would or might contravene local securities laws or regulation,
or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in this Letter of Offer.
Investors are advised to consult their legal counsel prior to accepting any provisional allotment of Equity Shares, applying for excess Equity
Shares or Rights Entitlements or making any offer, sale, resale, pledge or other transfer of the Equity Shares or Rights Entitlements.
Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no
change in our Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.
Each person who exercises Rights Entitlements and subscribes for Equity Shares or excess Equity Shares, or who purchases Rights Entitlements
or Equity Shares shall do so in accordance with the restrictions set out below.
United States Restrictions
The Rights Entitlements and the Equity Shares have not been, and will not be, registered under the Securities Act or under any securities laws of
any state or other jurisdiction of the United States and may not be offered, sold, resold, allotted, taken up, exercised, renounced, pledged,
transferred or delivered, directly or indirectly, within the United States (as defined in Regulation S). The Issue to which this Letter of Offer
relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlements for sale in the United
States or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlements. Accordingly, this Letter of Offer and
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the CAF should not be forwarded to or transmitted in or into the United States at any time. Any person who acquires Rights Entitlements or
Equity Shares will be deemed to have declared, warranted and agreed, by accepting the delivery of this Letter of Offer, that it is not and that at
the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States and is not a U.S. person (as defined
in Regulation S).
The Rights Entitlements and the Equity Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any
state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or
endorsed the merits of the offering of the Rights Entitlements, the Equity Shares or the accuracy or adequacy of this Letter of Offer. Any
representation to the contrary is a criminal offence in the United States.
Neither our Company nor any person acting on behalf of our Company will accept a subscription or renunciation from any person, or the agent
of any person, who appears to be, or who our Company or any person acting on behalf of our Company has reason to believe is, in the United
States. Any envelope containing a CAF and postmarked from the United States will not be accepted. Similarly, any CAF in which the exercising
holder or subscribing applicant requests Equity Shares to be issued in registered form or credited to a securities account and gives an address in
the United States will not be accepted. Our Company reserves the right to treat as invalid any CAF which: (i) appears to our Company or its
agents to have been executed in or dispatched from the United States; (ii) does not include the relevant certifications; or (iii) where our
Company believes acceptance of such CAF may infringe applicable legal or regulatory requirements; and our Company shall not be bound to
allot or issue any Equity Shares or Rights Entitlements in respect of any such CAF. Any payment made in respect of any CAF that does not meet
the foregoing criteria will be returned without interest. Any person in the United States who obtains a copy of this Letter of Offer or its
accompanying documents is required to disregard it.
Until the expiration of the 40 day period beginning on the date on which our Company will allot and issue the Equity Shares, an offer to sell or a
sale of, or subscription for, the Rights Entitlements or the Equity Shares within the United States by a broker / dealer (whether or not it is
participating in the Issue) may violate the registration requirements of the Securities Act.
Each purchaser of the Rights Entitlements and / or the Equity Shares will be deemed to have represented and agreed as follows (terms defined in
Regulation S have the same meanings when used herein):
(a) the purchaser (i) is, and the person, if any, for whose account it is acquiring such Rights Entitlements and/or the Equity Shares is,
outside the United States, and (ii) is acquiring the Rights Entitlements and/or the Equity Shares in an offshore transaction meeting the
requirements of Regulation S;
(b) the purchaser is aware that the Rights Entitlements and the Equity Shares have not been and will not be registered under the Securities
Act and are being distributed and offered outside the United States in reliance on Regulation S; and
(c) the purchaser acknowledges that our Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of
the foregoing representations and agreements.
European Economic Area Restrictions
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, “Relevant Member
State”), an offer of the Equity Shares to the public may not be made in that Relevant Member State prior to the publication of a prospectus in
relation to the Rights Entitlements or the Equity Shares which has been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that an offer of Equity Shares or Rights Entitlements to the public in that Relevant Member
State from and including the Relevant Implementation Date may be made:
(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose
corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last Financial Year; (2) a total balance
sheet of more than Euro 43,000,000 and (3) an annual net turnover of more than Euro 50,000,000, as shown in its last annual or
consolidated accounts; or
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(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of Equity Shares shall result in the requirement for the publication by our Company or the Lead Manager pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any Equity Shares in any Relevant Member State means
the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to
enable an investor to decide to purchase or subscribe the Equity Shares, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/7 1/EC and
includes any relevant implementing measure in each Relevant Member State.
In the case of any Rights Entitlements or Equity Shares being offered to a financial intermediary as that term is used in Article 3(2) of the
Prospectus Directive, such financial intermediary will be deemed to have represented, acknowledged and agreed that the Rights Entitlements or
Equity Shares acquired by them in the Issue have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with
a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Rights Entitlements or Equity Shares acquired
by them in the Issue to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined who are not
financial intermediaries or in circumstances in which the prior consent of the Lead Manager has been obtained to each such proposed offer or
resale.
United Kingdom Restrictions
This Letter of Offer is only being distributed to and is only directed at (i) persons who are outside the UK, or (ii) in circumstances where Section
21(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 does not apply.
Filing
The Draft Letter of Offer has been filed with the Corporation Finance Department of the SEBI, located at SEBI Bhavan, C-4-A, G Block,
Bandra-Kurla Complex, Bandra (East), Mumbai 400 051, India for its observations.
A copy of this Letter of Offer will be filed with the Designated Stock Exchange in accordance the provisions of the Companies Act.
Listing
Our Company will issue and dispatch Allotment advice/ share certificates/demat credit and/or letters of regret along with refund order or credit
the Allotted Equity Shares to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money
is not repaid within eight days from the day our Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the
refusal by the Stock Exchange(s), whichever is earlier) our Company and every Director of our Company who is an officer in default shall, on
and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies
Act.
Consents
Consents in writing of our Directors, the Auditors, the Lead Manager, the Legal Counsel, the Registrar to the Issue, lenders and experts to act in
their respective capacities have been obtained and such consents have not been withdrawn up to the date of this Letter of Offer. B S R & Co. and
Chaturvedi & Shah, Chartered Accountants, the Auditors of our Company, have given their written consent for the inclusion of their report in
the form and content in which it appears in this Letter of Offer and such consent and report have not been withdrawn up to the date of this Letter
of Offer. Jitendra Sanghavi & Co., Chartered Accountants have given their written consent for the inclusion of the statement of tax benefits
dated June 29, 2013 in the form and content in which it appears in this Letter of Offer. Furthermore, Sandeep S. Shah and Associates, Chartered
Accountants have given their written consent for the inclusion of their name and the certificate dated July 1, 2013 in respect of unsecured loans
availed by our Company from Reliance Capital Limited which are proposed to be repaid and/or prepaid out of the Net Proceeds, in the form and
content in which it appears in this Letter of Offer.
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Expert Opinion
Except for:
the report of our Auditors dated July 3, 2013 in the form and context it appears in this Letter of Offer; and
the report on the statement of tax benefits dated June 29, 2013 received from Jitendra Sanghavi & Co., Chartered Accountants, in the form
and context in which it appears in this Letter of Offer,
we have not obtained any other expert opinion in relation to this issue.
Issue related expenses
The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses, advertisement expenses, and
registrar. The estimated Issue related expenses are as follows:
Activity Expense
(` in lakhs)
Expense (% of total
expenses)
Expense (% of Issue
Size)
Fee to the Lead Manager 75.00 21.43 0.13
Fee to the Registrar to the Issue 3.06 0.87 0.01
Fee to the Monitoring Agency and Legal Advisors 17.00 4.86 0.03
Others (SEBI Fees, Stock Exchange Fees, Printing, Stationery and
Postage, Advertisement, etc.)
254.94 72.84 0.43
Total estimated Issue expenses 350.00 100.00 0.58 Note: Our Company will recoup the expenses already incurred and paid, from the issue expenses set out above.
Previous Issues by our Company
Our Company has not undertaken any public or rights issue during the last five years.
Previous issues of Equity Shares otherwise than for cash
Except as disclosed in the chapter entitled “Capital Structure” at page 69 of this Letter of Offer, our Company has not issued any Equity Shares
for consideration otherwise than for cash.
Commission and Brokerage paid on previous issues of the Equity Shares
Our Company had undertaken an initial public offer in Fiscal 2001. The commission and brokerage paid in relation to the initial public offer was
`191.09 lakhs.
Previous capital issue during the previous three years by listed Subsidiaries, Group Companies and associates of our Company
Except as disclosed at page 209 of this Letter of Offer, none of our Subsidiaries, Group Companies and associates of our Company are listed on
any stock exchange.
Reliance Broadcast Network Limited, a listed Group Company, has not made any public or rights issue in the last three years.
Performance vis-à-vis objects – Public / Rights Issue of our Company and/or listed Subsidiaries, Group Companies and associates of
our Company
Our Company has not undertaken any public or rights issue during the last 10 years immediately preceding the date of this Letter of Offer.
Except as disclosed at page 209 of this Letter of Offer, none of our Group Companies, our Subsidiaries and associates of our Company are listed
on any stock exchange.
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Reliance Broadcast Network Limited has not made any public or rights issue in the last ten years.
Outstanding Debentures/Bonds and Preference Shares
Our Company has issued:
3,500 11.00% secured redeemable non-convertible debentures of `10,00,000 each which are currently outstanding;
440 12.50% unsecured redeemable non-convertible debentures of `10,00,000 each of which 330 are currently outstanding; and
29,50,000 10.00% redeemable non-convertible preference shares of `5 each which are currently outstanding.
Option to Subscribe
Other than as disclosed in the chapter entitled “Capital Structure” at page 69 of this Letter of Offer, our Company has not given any person any
option to subscribe for the Equity Shares.
Investor Grievances and Redressal System
Our Company has adequate arrangements for the redressal of investor complaints in compliance with the corporate governance requirements
under the Listing Agreements. The Shareholders and Investors’ Grievance Committee currently comprises Gautam Doshi, Amit Khanna and
Prasoon Joshi and its broad terms of reference include investigation into any matter relating to redressing shareholders’ and/or investors’
complaints pertaining to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividend, duplicate share certificates and
dematerialization or rematerialization of shares.
Status of Complaints
(a) Total number of complaints received during Fiscal 2010: 19
(b) Total number of complaints received during Fiscal 2011: 37
(c) Total number of complaints received during Fiscal 2012 : 27
(d) Time normally taken for disposal of various types of investor complaints: Not more than five days.
Status of outstanding investor complaints in relation to our Company
As of date of this Letter of Offer, there were no outstanding investor complaints.
Status of outstanding investor complaints in relation to the listed Group Companies
In relation to the Reliance Broadcast Network Limited, there were no outstanding investor complaints as on March 31, 2013.
Investor Grievances arising out of the Issue
Our Company’s investor grievances arising out of the Issue will be handled by Link Intime India Private Limited, who is the Registrar to the
Issue. The Registrar will have a separate team of personnel handling only post-Issue correspondence.
The agreement between our Company and the Registrar will provide for retention of records with the Registrar for a period of at least one year
from the last date of dispatch of Allotment Advice/ share certificate / demat credit / refund order to enable the Registrar to redress grievances of
Investors.
All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA applicants giving full details
such as folio no., name and address, contact telephone / cell numbers, email i.d. of the first applicant, number and type of shares applied for,
Application Form serial number, amount paid on application and the name of the bank and the branch where the application was deposited,
along with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished.
The average time taken by the Registrar for attending to routine grievances will be 7-10 days from the date of receipt of complaints. In case of
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non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrar to attend to them as
expeditiously as possible. Our Company undertakes to resolve the Investor grievances in a time bound manner.
Registrar to the Issue
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Telephone: +91 22 2596 7878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR 000004058
Investors may contact the Compliance Officer in case of any pre-Issue / post -Issue related problems such as non-receipt of Allotment
advice/share certificates/ demat credit / refund orders etc. The contact details of the Compliance Officer are as follows:
Ashish Agarwal
Reliance MediaWorks Limited
Film City Complex
Goregaon (East)
Mumbai 400 065
Maharashtra, India
Tel: +91 22 3980 8900
Facsimile: +91 22 3980 8985
Email: [email protected]
Changes in Auditors during the last three years
Chaturvedi & Shah, Chartered Accountants were appointed as one of joint auditors on September 30, 2009.
Capitalization of Reserves or Profits
Other than as disclosed in the chapter entitled “Capital Structure” at page 69 of this Letter of Offer of this Letter of Offer, our Company has not
capitalized any of its reserves or profits in the last five years.
Revaluation of Fixed Assets
Except as stated in the chapter entitiled “Financial Statements” at page F-1, there has been no revaluation of our Company’s fixed assets in the
last five years.
Minimum Subscription
If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below 90%, after the Issue
Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription
amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days
after our Company becomes liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), our Company and every Director
of our Company who is an officer in default shall be jointly and severally liable to pay interest for the delayed period, as prescribed under sub-
sections (2) and (2A) of Section 73 of the Companies Act.
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SECTION VII: ISSUE INFORMATION
TERMS OF THE ISSUE
The Equity Shares proposed to be issued on a rights basis, are subject to the terms and conditions contained in this Letter of Offer, the enclosed
CAF, the Memorandum of Association and Articles of Association of our Company, and the provisions of the Companies Act, FEMA, the
guidelines and regulations issued by SEBI, approvals, if any, received from the RBI and other governmental authorities, the guidelines,
notifications and regulations for the issue of capital and for listing of securities issued by GoI and other statutory and regulatory authorities
from time to time, terms and conditions as stipulated in the allotment advice or security certificate.
Please note that QIB and Non Institutional applicants and other applicants whose application amount exceeds `2,00,000 can participate in the
Issue only through the ASBA process. Equity Shareholders of our Company who are not QIBs and Non Institutional applicants and whose
application amount is not more than `2,00,000 can participate in the Issue through the ASBA process as well as the non ASBA process. ASBA
Investors should note that the ASBA process involves application procedures that may be different from the procedure applicable to non ASBA
process. ASBA Investors should carefully read the provisions applicable to such applications before making their application through the ASBA
process. For details, please see parts entitled “Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”)
Process” in this chapter.
Basis for the issue
The Equity Shares are being offered for subscription to the existing Equity Shareholders whose names appear as beneficial owners as per the list
to be furnished by the Depositories in respect of the Equity Shares held in the electronic form and on the statutory register of members of our
Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, being Wednesday, July 24,
2013 as intimated to the Designated Stock Exchange.
Rights Entitlements
Eligible Equity Shareholder whose name appears as a beneficial owner in respect of the Equity Shares held in the electronic form or appears in
the register of members as an Equity Shareholder of our Company as on the Record Date, i.e., Wednesday, July 24, 2013, you are entitled to the
number of Equity Shares as set out in Part A of the enclosed CAF.
THE DISTRIBUTION OF THE LETTER OF OFFER AND THE ISSUE OF EQUITY SHARES ON A RIGHTS BASIS TO PERSONS
IN CERTAIN JURISDICTIONS OUTSIDE INDIA MAY BE RESTRICTED BY LEGAL REQUIREMENTS PREVAILING IN
THOSE JURISDICTIONS. OUR COMPANY IS MAKING THE ISSUE OF EQUITY SHARES ON A RIGHTS BASIS TO THE
EQUITY SHAREHOLDERS AND THE LETTER OF OFFER, ABRIDGED LETTER OF OFFER AND THE CAFS WILL BE
DISPATCHED ONLY TO THOSE EQUITY SHAREHOLDERS WHO HAVE A REGISTERED ADDRESS IN INDIA. ANY
PERSON WHO ACQUIRES RIGHTS ENTITLEMENTS OR EQUITY SHARES WILL BE DEEMED TO HAVE DECLARED,
WARRANTED AND AGREED, BY ACCEPTING THE DELIVERY OF THE LETTER OF OFFER, THAT IT IS NOT AND THAT
AT THE TIME OF SUBSCRIBING FOR THE EQUITY SHARES OR THE RIGHTS ENTITLEMENTS, IT WILL NOT BE, IN THE
UNITED STATES. PERSONS WHO MAY ACQUIRE RIGHTS ENTITLEMENTS OR COME INTO POSSESSION OF THIS
LETTER OF OFFER OR CAF ARE ADVISED TO CONSULT WITH THEIR OWN LEGAL ADVISORS AS TO WHAT
RESTRICTIONS MAY BE APPLICABLE TO THEM AND TO OBSERVE SUCH RESTRICTIONS. THIS LETTER OF OFFER
MAY NOT BE USED FOR THE PURPOSE OF AN OFFER OR INVITATION IN ANY CIRCUMSTANCES TO SUBSCRIBE TO
EQUITY SHARES IN WHICH SUCH ODDER OR INVITATION IS NOT AUTHORIZED. NO ACTION HAS BEEN TAKEN OR
WILL BE TAKEN THAT WOULD PERMIT THE OFFERING OF THE EQUITY SHARES PURSUANT TO THE ISSUE TO
OCCUR IN ANY JURISDICTION OTHER THAN INDIA, OR THE POSSESSION, CIRCULATION OR DISTRIBUTION OF THIS
LETTER OF OFFER RELATING TO THE COMPANY OR THE EQUITY SHARES IN ANY JURISDICTION WHERE ACTION
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FOR SUCH PURPOSE IS REQUIRED. ACCORDINGLY, THE EQUITY SHARES MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, AND THIS LETTER OF OFFER MAY NOT BE DISTRIBUTED OR PUBLISHED IN OR FROM
ANY COUNTRY OR JURISDICTION EXCEPT UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH
ANY APPLICABLE RULES AND REGUMALATIONS OF ANY SUCH COUNTRY OR JURISDICTION.
PRINCIPAL TERMS OF THE EQUITY SHARES
Face Value
Each Equity Share will have the face value of `5/-.
Issue Price
Each Equity Share shall be offered at an Issue Price of `40 at a premium of `35 per Equity Share. The Issue Price has been arrived at after
consultation between our Company and the Lead Manager.
Rights Entitlements Ratio
The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of 13 Equity Shares for every 4 Equity
Shares held on the Record Date.
Terms of Payment
The full amount of `40 per Equity Share is payable on application.
Reliance Capital Limited through its letters dated March 8, 2013 and July 1, 2013 has consented to adjust the RCL Loan towards share
application money against Promoter Subscription. Consequently no fresh Issue proceeds would be received by our Company to such an extent.
A separate cheque/demand draft pay order must accompany each Application form.
Pursuant to RBI Circular number DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the Stockinvest scheme has been
withdrawn and accordingly, payment through Stockinvest will not be accepted in the Issue.
Fractional Entitlements
For Equity Shares being offered on a rights basis under this Issue, if the shareholding of any of the Eligible Equity Shareholders is less than 4
Equity Shares or not in the multiple of 4, the fractional entitlement of such Eligible Equity Shareholders shall be ignored. Eligible Equity
Shareholders whose fractional Rights Entitlements are being ignored would be given preferential consideration for the Allotment of one
additional Equity Share each if they apply for additional Equity Shares over and above their Rights Entitlements, if any.
Number of Equity Shares held Rights Entitlement
1 3
2 6
3 9
4 13
5 16
6 19
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7 22
8 26
Ranking
The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of Association. The Equity
Shares allotted in the Issue shall rank pari passu with our existing Equity Shares in all respects, including in respect of right to receive dividend.
Listing and trading of Equity Shares proposed to be issued
Our Company’s existing Equity Shares are currently listed and traded on the Stock Exchanges under the ISIN INE540B01015. The fully paid up
Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on the Stock Exchanges under the existing ISIN for
fully paid up Equity Shares of our Company.
The listing and trading of the Equity Shares shall be based on the current regulatory framework applicable thereto. Accordingly, any change in
the regulatory regime would affect the listing and trading schedule.
The Equity Shares allotted pursuant to this Issue will be listed as soon as practicable and all steps for completion of the necessary formalities for
listing and commencement of trading shall be taken within seven Working Days of finalisation of the basis of allotment. Our Company has
made an application for “in-principle” approval for listing of the Equity Shares to the BSE and the NSE through letters dated April 18, 2013 and
April 10, 2013, respectively and has received such approval from the BSE pursuant to the letter no. DCS/PREF/LP-RT/042/13-14 dated April
18, 2013 and from the NSE pursuant to letter no. NSE/LIST/200766-Q dated April 10, 2013.
Rights of the Eligible Equity Shareholder
Subject to applicable laws, the Eligible Equity Shareholders of our Company shall have the following rights:
Right to receive dividend, if declared;
Right to attend general meetings and exercise voting powers, unless prohibited by law;
Right to vote in person or by proxy;
Right to receive offers for rights shares and be allotted bonus shares, if announced;
Right to receive surplus on liquidation;
Right to free transferability of Equity Shares; and
Such other rights as may be available to a shareholder of a listed public company under the Companies Act and Memorandum of
Association and Articles of Association.
General Terms of the Issue
Market Lot
The Equity Shares of our Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialised mode is one. In
case an Eligible Equity Shareholder holds Equity Shares in physical form, our Company would issue to the allottees one certificate for the
Equity Shares allotted to each folio (“Consolidated Certificate”).
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Joint Holders
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint tenants with the
benefit of survivorship subject to the provisions contained in the Articles of Association.
Nomination
Nomination facility is available in respect of the Equity Shares in accordance with the provisions of the Section 109A of the Companies Act. An
Eligible Equity Shareholder can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.
In case of Eligible Equity Shareholders who are individuals, a sole Eligible Equity Shareholder or first Eligible Equity Shareholder, along with
other joint Eligible Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all
the joint holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity
Shares by reason of the death of the original Eligible Equity Shareholder(s), shall be entitled to the same advantages to which he would be
entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Eligible Equity Shareholder(s) may also make a
nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder,
during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A
transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the
nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed
form available on request at the registered office of the Company or such other person at such addresses as may be notified by the Company.
The Applicant can make the nomination by filling in the relevant portion of the CAF.
Only one nomination would be applicable for one folio. Hence, in case the Investor(s) has already registered the nomination with our Company,
no further nomination needs to be made for Equity Shares that may be allotted in this Issue under the same folio.
In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares
to be allotted in this Issue. Nominations registered with respective Depositary Participant (“DP”) of the Investor would prevail. Any
Investor desirous of changing the existing nomination is requested to inform its respective DP.
Notices
All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English language national daily
newspaper, one Hindi language national daily newspaper and one regional language daily newspaper with wide circulation in Maharashtra and /
or, will be sent by post to the registered address of the Equity Shareholders in India or the Indian address provided by the Equity Shareholders
from time to time.
Additional Subscription by our Promoters and members of our Promoter Gorup
Our Promoters have, through the Subscription Letters, jointly and / or severally, undertaken to (i) apply for Equity Shares being offered to them
pursuant to the Issue to the extent of their Rights Entitlements; (ii) apply directly or through our Company’s Promoter Group for any Equity
Shares renounced in their favour; and (iii) apply directly or through the Company’s Promoter Group for any additional Equity Shares in the
Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable law, to ensure that at least 90% of the
Rights Issue is subscribed (together the “Promoter Subscription”).
As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance with the paragraph above,
either / both Promoters may acquire Equity Shares over and above their Rights Entitlements which may result in an increase in their
shareholding, individually and / or collectively, above their current shareholding. Any such subscription and acquisition of Equity Shares by
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either / both Promoters in the Rights Issue will not result in change of control of the management of the Company in accordance with Regulation
3 (2) and Regulation 3(3) of the Takeover Code and shall be exempt in terms of Regulation 10 (4) (a) and (b) of the Takeover Code. Further,
such subscription to additional Equity Shares by either / both Promoters beyond their Rights Entitlements will be in accordance with the
provisions of Regulation 10(4) (b) of the Takeover Code. As such, other than meeting the requirements indicated in the chapter entitled “Objects
of the Issue” at page 81 of this Letter of Offer, there is no other intention / purpose for the Issue, including any intention to delist our Equity
Shares, even if, as a result of any Allotment in the Issue to either / both Promoter(s) and / or the members of our Promoter Group, the
shareholding of our Promoters and/or Promoter Group in our Company exceeds their current shareholding.
However, such participation will not result in breach of minimum public shareholding requirement stipulated under Clause 40A of the equity
Listing Agreement entered into between us and the Stock Exchanges.
For details, please see the part entitled “Basis of Allotment” at page 340.
Procedure for Application
The CAF for Equity Shares would be printed in black ink for all the Eligible Equity Shareholders. In case the original CAFs are not received by
the Eligible Equity Shareholder or is misplaced by the Eligible Equity Shareholder, the Eligible Equity Shareholder may request the Registrar to
the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID, Client ID and their full name and address. In case the
signature of the Investor(s) does not match with the specimen registered with our Company, the application is liable to be rejected.
Please note that neither our Company nor the Registrar to the Issue shall be responsible for delay in the receipt of the CAF/duplicate CAF
attributable to postal delays or if the CAF/duplicate CAF are misplaced in the transit. The request for a duplicate CAF should reach the Registrar
to the Issue within seven days from the Issue Opening Date. Investors should note that those who are making the Application in such duplicate
CAF should not utilize the original CAF for any purpose, including renunciation, even if the original CAF is received or found subsequently. If
any Investor violates any of these requirements, they shall face the risk of rejection of both Applications.
Please note that QIB and Non Institutional applicants and other applicants whose application amount exceeds `2,00,000 can participate in the
Issue only through the ASBA process. Eligible Equity Shareholders of our Company who are not QIBs and Non Institutional applicants and
whose application amount is not more than `2,00,000 can participate in the Issue through the ASBA process as well as the non-ASBA process.
Acceptance of the Issue
You may accept the offer to participate and apply for the Equity Shares offered, either in full or in part, by filling Part A of the enclosed CAFs
and submit the same along with the application money payable to the Bankers to the Issue or any of the collection branches as mentioned on the
reverse of the CAFs before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by our
Board of Directors in this regard. Investors at centres not covered by the branches of collecting banks can send their CAFs together with the
cheque drawn at par on a local bank at Mumbai/demand draft payable at Mumbai to the Registrar to the Issue by registered post. Such
applications sent to anyone other than the Registrar to the Issue are liable to be rejected. For further details on the mode of payment, please see
the parts entitled “Mode of Payment for Resident Eligible Equity Shareholders/Investors” and “Mode of Payment for Non-Resident Eligible
Equity Shareholders/Investors” at pages 329 and 330, respectively. Investors may also choose to accept the offer to participate in the Issue by
plain-paper Applications.
CAF
The Registrar to the Issue will dispatch the CAF to Eligible Equity Shareholders as per their Rights Entitlements on the Record Date. The CAF
will clearly indicate the number of Equity Shares that the Eligible Equity Shareholder is entitled to. Applicants may also choose to accept the
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offer to participate in the Issue by making plain paper Applications. For more information, see the section entitled “Application on Plain Paper”
at page 327.
The CAF consists of four parts:
Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares;
Part B: Form for renunciation;
Part C: Form for application for renouncees; and
Part D: Form for request for Split Application Forms.
Option available to the Eligible Equity Shareholders
The CAFs will clearly indicate the number of Equity Shares that the Eligible Equity Shareholder is entitled to.
If the Eligible Equity Shareholder applies for an investment in Equity Shares, then he can:
Apply for his Rights Entitlements of Equity Shares in full;
Apply for his Rights Entitlements of Equity Shares in part (without renouncing the other part);
Apply for his Rights Entitlements of Equity Shares in part and renounce the other part of the Equity Shares;
Apply for his Rights Entitlements in full and apply for additional Equity Shares;
Renounce his Rights Entitlements in full.
Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above your Rights Entitlements, provided that you are eligible to apply under
applicable law and have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s).
Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, subject to sectoral
caps and in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under the part entitled “Basis of
Allotment” at page 340.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Equity Shares in Part A
of the CAF. The Renouncee applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.
Where the number of additional Equity Shares applied for exceeds the number available for Allotment, the Allotment would be made on a fair
and equitable basis in consultation with the Designated Stock Exchange.
Renouncees who have subscribed for all the Equity Shares renounced in their favor may also apply for additional Equity Shares.
Renunciation
This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person
or persons. Your attention is drawn to the fact that our Company shall not Allot and/or register Equity Shares in favour of more than three
persons (including joint holders), partnership firm(s) or their nominee(s), minors, any trust or society (unless the same is registered under the
Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts and is authorised under
its constitution or bye-laws to hold Equity Shares, as the case may be). Applications by HUFs will be treated as on par with applications by
natural persons. Additionally, existing Eligible Equity Shareholders shall not renounce in favor of persons or entities in the United States or who
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would otherwise be prohibited from being offered or subscribing for Equity Shares or Rights Entitlements under applicable securities laws.
Renouncees cannot participate in the ASBA Process.
Any renunciation (i) from resident Indian equity shareholder(s) to non-resident(s), or (ii) from non-resident equity shareholder(s) to resident
Indian(s), or (iii) from a non-resident equity shareholder(s) to other non-resident(s), is subject to the renouncer(s)/ renouncee(s) obtaining the
necessary regulatory approvals. The renouncer(s)/renouncee(s) is/ are required to obtain any such approval and attach the same to the CAF,
along with any other approval that may be required by such renouncer(s)/renouncee(s). All such renunciations shall be subject to any conditions
that may be specified in such regulatory approval. Applications not complying with conditions of the approval/not accompanied by such
approvals are liable to be rejected.
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as
an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to
Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of our Company who do not wish to
subscribe to the Equity Shares being offered but wish to renounce the same in favour of Renouncee shall not renounce the same (whether for
consideration or otherwise) in favour of OCB(s).
Part ‘A’ of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the
application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF
with the form of renunciation (Part ‘B’ of the CAF) duly filled in shall be conclusive evidence for our Company of the person(s) applying for
Equity Shares in Part ‘C’ of the CAF to receive Allotment of such Equity Shares. The Renouncees applying for all the Equity Shares renounced
in their favour may also apply for additional Equity Shares. Part ‘A’ of the CAF must not be used by the Renouncee(s) as this will render the
application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person.
Procedure for renunciation
To renounce all the Equity Shares offered to an Eligible Equity Shareholder in favour of one Renouncee
If you wish to renounce the offer indicated in Part ‘A’, in whole, please complete Part ‘B’ of the CAF. In case of joint holding, all joint holders
must sign Part ‘B’ of the CAF. The person in whose favour renunciation has been made should complete and sign Part ‘C’ of the CAF. In case
of joint Renouncees, all joint Renouncees must sign this part of the CAF.
To renounce in part/or renounce the whole to more than one person(s)
If you wish to either accept this offer in part and renounce the balance or renounce the entire offer under this Issue in favour of two or more
Renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of SAFs in the space provided for this
purpose in Part ‘D’ of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on
the last date of receiving requests for SAFs. On receipt of the required number of SAFs from the Registrar, the procedure as mentioned in
paragraph above shall have to be followed.
In case the signature of the Eligible Equity Shareholder(s), who has renounced the Equity Shares, does not match with the specimen registered
with our Company, the application is liable to be rejected.
Renouncee(s)
The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part ‘C’ of the CAF and submit the entire CAF to the
Bankers to the Issue on or before the Issue Closing Date along with the application money in full.
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Change and/or introduction of additional holders
If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already a joint holder with you, it
shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the
name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed.
However, this right of renunciation is subject to the express condition that our Board of Directors of our Company shall be entitled in its
absolute discretion to reject the request for Allotment from the Renouncee(s) without assigning any reason therefore.
Instructions for Options
The summary of options available to the Eligible Equity Shareholder is presented below. You may exercise any of the following options with
regard to the Equity Shares offered, using the enclosed CAF:
Option Available Action Required
1. Accept whole or part of your Rights Entitlements
without renouncing the balance
Fill in and sign Part A (All joint holders must sign)
2. Accept your Rights Entitlements in full and apply for
additional Equity Shares
Fill in and sign Part A including Block III relating to the acceptance of
entitlement and Block IV relating to additional Equity Shares (All joint
holders must sign)
3. Accept a part of your Rights Entitlements and renounce
the balance to one or more Renouncee(s)
OR
Renounce your Rights Entitlements to all the Equity Shares
offered to you to more than one Renouncee
Fill in and sign Part D (all joint holders must sign) requesting for SAFs. Send
the CAF to the Registrar to the Issue so as to reach them on or before the last
date for receiving requests for SAFs. Splitting will be permitted only once
On receipt of the SAF take action as indicated below
For the Equity Shares you wish to accept, if any, fill in and sign Part A
For the Equity Shares you wish to renounce, fill in and sign Part B indicating
the number of Equity Shares renounced and hand it over to the Renouncee.
Each of the Renouncee should fill in and sign Part C for the Equity Shares
accepted by them
4. Renounce your Rights Entitlements in full to one
person (Joint Renouncees are considered as one)
Fill in and sign Part B (all joint holders must sign) indicating the number of
Equity Shares renounced and hand it over to the Renouncee. The Renouncee
must fill in and sign Part C (All joint Renouncees must sign)
5. Introduce a joint holder or change the sequence of joint
holders
This will be treated as a renunciation. Fill in and sign Part B and the
Renouncee must fill in and sign Part C
In case of Equity Shares held in physical form, applicants must provide information in the CAF as to their respective bank account
numbers and name of the bank to enable the Registrar to print the said details on the refund order. Failure to comply with this may
lead to rejection of application. In case of Equity Shares held in demat form, bank account details furnished by the Depositorties will be
printed on the refund order.
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Please note that:
Part ‘A’ of the CAF must not be used by any person(s) other than the Eligible Equity Shareholder to whom this Letter of Offer has
been addressed. If used, this will render the application invalid.
Request for SAFs should be made for a minimum of one Equity Share or, in either case, in multiples thereof and one SAF for the
balance Equity Shares, if any.
Request by the Investor for the SAFs should reach the Registrar on or before Tuesday, August 13, 2013.
Only the Eligible Equity Shareholder to whom this Letter of Offer has been addressed shall be entitled to renounce and to apply
for SAFs. Forms once split cannot be split further.
SAFs will be sent to the Investor(s) by post at the applicant’s risk.
Eligible Equity Shareholders shall not renounce in favour of persons or entities in the United States or who would otherwise be
prohibited from being offered or subscribing for Equity Shares or Rights Entitlements under applicable securities laws.
While applying for or renouncing their Rights Entitlements, joint Eligible Equity Shareholders must sign the Application Form or
SAF in the same order and as per specimen signatures recorded with the Company/ Depositories.
Application(s) received from Non-Resident/NRIs, or persons of Indian origin residing abroad shall be subject to conditions, as
may be imposed from time to time by the RBI under FEMA in the matter of refund of Application Money, Allotment of Equity
Shares, interest, export of share certifications, etc. In case a Non-Resident or NRI Eligible Equity Shareholder has specific
approval from the RBI, in connection with his shareholder, he should enclose a copy of such approval with the CAF.
Availability of duplicate CAF
In case the original CAF is not received, or is misplaced by the Investor, the Registrar to the Issue will issue a duplicate CAF on the request of
the Investor who should furnish the registered folio number/ DP and Client ID and his/ her full name and address to the Registrar to the Issue.
Please note that the request for duplicate CAF should reach the Registrar to the Issue within 8 days from the Issue Opening Date. Please note
that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even
if it is received/ found subsequently. If the Investor violates such requirements, he / she shall face the risk of rejection of either original CAF or
both the applications.
Neither the Company or the Registrar or Lead Manager to the Issue will be responsible for postal delays or loss of duplicate CAF in transit, if
any.
Please also note that shareholder has an option to print the duplicate CAF from the website of the Registrar to the Issue (Web site:
www.linkintime.co.in) by providing his / her folio. no. / DP ID / Client ID to enable the shareholder to apply for the Issue.
Application on Plain Paper
An Investor who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to
the Issue on plain paper, along with a/c payee cheque drawn at par / Demand Draft, net of bank and postal charges payable at Mumbai and the
Investor should send the same by registered post directly to the Registrar to the Issue. Applications on plain paper will not be accepted from any
address outside India. For more information on the mode of payment, see the section entitled “Modes of Payment” at page 329.
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The envelope should be super scribed “Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants or
shareholders/applicants applying on non repatriable basis or “Reliance MediaWorks Limited - Rights Issue – NR” in case of non resident
shareholders/applicants applying on repatriable basis and should be postmarked in India. The application on plain paper, duly signed by the
Investors including joint holders, in the same order as per specimen recorded with our Company / Depository, must reach the office of the
Registrar to the Issue before the Issue Closing Date and should contain the following particulars:
Name of Issuer, being Reliance MediaWorks Limited;
Name and address of the Investor including joint holders;
Registered Folio Number/ DP and Client ID;
Number of Equity Shares held as on Record Date;
Share certificate numbers and distinctive numbers of Equity Shares, if held in physical form;
Allotment option preferred – physical or demat form, if held in physical form;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total application amount paid at the rate of `40 per Equity Share;
Particulars of cheque/ demand draft;
Savings/Current Account Number and name and address of the bank where the Investor will be depositing the refund order;
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the
courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity
Shares applied for pursuant to the Issue.
Signatures of Eligible Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company
or depository records; and
If the payment is made by a draft purchased from NRE/FCNR/NRO account, as the case may be, an account debit certificate from
the bank issuing the demand draft confirming that the demand draft has been issued by debiting the NRE/FCNR/NRO account.
Additionally, all applicants shall include the following:
“I/We understand that neither the Rights Entitlements nor the Equity Shares have been, and will be, registered under the United States
Securities Act of 1933, as amended (“US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or
otherwise transferred within the United States or to the territories or possessions thereof (“United States”). I/we understand the Equity Shares
referred to in this application are being offered in India but not in the United States. I/we understand the offering to which this application
relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlements for sale in the United
States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlements in the United States. Accordingly, I/we
understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that none of the
Company, the Registrar, the Lead Manager or any other person acting on behalf of the Company will accept subscriptions from any person, or
the agent of any person, who appears to be, or who the Company, the Registrar, the Lead Manager or any other person acting on behalf of the
Company has reason to believe is, a resident of the United States.
I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any jurisdiction or under any
circumstances in which such offer or sale is not authorised or to any person to whom it is unlawful to make such offer, sale or invitation except
under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are
acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our
residence.
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I/We understand and agree that the Rights Entitlements and Equity Shares may not be reoffered, resold, pledged or otherwise transferred except
in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act.
I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlements and/or the Equity Shares is/are,
outside the United States, and (ii) is/are acquiring the Rights Entitlements and/or the Equity Shares in an offshore transaction meeting the
requirements of Regulation S.
I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing
representations and agreements.”
Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce their rights and should
not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the Investor violates such requirements,
he/she shall face the risk of rejection of both the applications. Our Company shall refund such application amount to the Investor without any
interest thereon.
Last date for Application
The last date for submission of the duly filled in CAF is Tuesday, August 20, 2013. The Board may extend the said date for such period as it
may determine from time to time, subject to the Issue Period not exceeding 30 days.
If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on or before the close of banking
hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the invitation to offer contained in the
Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares
hereby offered, as provided under part entitled “Basis of Allotment” at page 340.
Modes of Payment
Mode of Payment for Resident Eligible Equity Shareholders/ Investors
All cheques / demand drafts accompanying the CAF should be drawn in favour of “Reliance MediaWorks Limited – Rights
Issue - R”, crossed ‘A/c Payee only’ and should be submitted along with the CAF to the Bankers to the Issue/Collecting Bank or
to the Registrar to the Issue, as the case may be;
Investors residing at places other than places where the bank collection centres have been opened by our Company for collecting
applications, are requested to send their CAFs together with Demand Draft for the full application amount, net of bank and postal
charges drawn in favour of “Reliance MediaWorks Limited – Rights Issue – R”, crossed ‘A/c Payee only’payable at Mumbai
directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or
the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.
Investors applying under the ASBA Process agree to authorize the SCSB to block an amount equivalent to the Application Money in the
relevant ASBA Account at the time of submission of the CAF. After verifying that sufficient funds are available in the ASBA Account details of
which are provided in the CAF, the SCSB shall block an amount equivalent to the Application Money mentioned in the CAF until it receives
instructions from the Registrar to the Issue. Upon receipt of intimation from the Registrar to the Issue, the SCSBs shall transfer such amount as
per the Registrar to the Issue’s instruction from the ASBA Account. This amount will be transferred in terms of the SEBI ICDR Regulations,
into the separate bank account maintained by the Company as per the provisions of Section 73(3) of the Companies Act. The balance amount
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remaining in the ASBA Accounts after the finalisation of the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions
issued in this regard by the Registrar to the Issue and the Lead Managers to the respective SCSB. An Investor applying under the ASBA Process
would be required to give instruction to block the entire Application Money at the time of the submission of the CAF. The SCSB may reject the
Application at the time of acceptance of CAF if the ASBA Account details of which have been provided by the Eligible Equity Shareholder in
the CAF does not have sufficient funds equivalent to the Application Money mentioned in the CAF. Subsequent to the acceptance of the
Application by the SCSB, the Company would have a right to reject the Application only on technical grounds.
In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for making applications on own
account using ASBA facility, they should have a separate account in their own name with any other SEBI registered SCSB. Such
account shall be used solely for the purpose of making application in public issues and clear demarcated funds should be available in
such account for ASBA applications.
Mode of Payment for Non-Resident Eligible Equity Shareholders/ Investors
As regards the application by non-resident Investor, the following conditions shall apply:
Individual non-resident applicants who are permitted to subscribe for Equity Shares by applicable local securities laws can obtain
application forms from the following address:
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Tel: +91 22 2596 7878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR 000004058
Applications will not be accepted from non-resident Indian in the United States or its territories and possessions, or any other
jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be restricted by applicable securities laws.
All non-resident investors should draw the cheques/demand drafts in favour of “Reliance MediaWorks Limited – Rights Issue –
NR”, crossed “A/c Payee only” for the full application amount, net of bank and postal charges and which should be submitted
along with the CAF to the Bankers to the Issue/Collecting Bank or to the Registrar to the Issue.
Non-resident investors applying from places other than places where the bank collection centres have been opened by our
Company for collecting applications, are requested to send their CAFs together with Demand Draft for the full application amount,
net of bank and postal charges drawn in favour of “Reliance MediaWorks Limited – Rights Issue – NR”, crossed ‘A/c Payee
only’ payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing
Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.
Payment by non-residents must be made by demand draft payable or drawn at Mumbai / cheque payable or drawn on a bank
account maintained at Mumbai or funds remitted from abroad in any of the following ways:
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Application with repatriation benefits
By the ASBA Process, from the ASBA Account maintained with an SCSB;
By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with
Foreign Inward Remittance Certificate); or
By cheque / draft drawn on a NRE or FCNR Account maintained in Mumbai; or
By Rupee draft purchased by debit to NRE / FCNR Account maintained elsewhere in India and payable in Mumbai; or
FIIs registered with SEBI must remit funds from special non-resident rupee account.
If the payment is made by a draft purchased from NRE/FCNR account, as the case may be, an account debit certificate from the bank
issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account. FIIs registered with SEBI must utilise funds
from special non-resident rupee account. NR Investors applying with repatriation benefits should draw cheques/drafts in favor of “Reliance
MediaWorks Limited – Rights Issue-NR” and must be crossed as “Account Payee Only” for the full Application Money, net of bank and
postal charges.
Application without repatriation benefits
By the ASBA Process, from the ASBA Account maintained with an SCSB;
As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in addition to the modes specified above,
payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Mumbai or Rupee Draft
purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the Allotment of Equity
Shares will be on non-repatriation basis.
Applicants should note that where payment is made through drafts purchased from NRE / FCNR / NRO accounts as the
case may be, an account debit certificate from the bank issuing the draft confirming that the draft has been issued by
debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. In the absence of such an account debit
certificate, the application shall be considered incomplete and is liable to be rejected.
All cheques / demand drafts submitted by NRs applying on a non-repatriation basis should be drawn in favor of “Reliance
MediaWorks Limited – Rights Issue - R” and must be crossed as “Account Payee Only” for the full Application Money, net of
bank and postal charges. The Application Forms duly completed together with the Application Money must be deposited before
the close of banking hours on or before the Issue Closing Date. If Application is made through CAF, the Collecting Bank shall be
indicated on the reverse of the CAFs. A separate cheque or bank draft must accompany each CAF.
An eligible Shareholder whose status has changed from resident to non-resident should open a new demat account reflecting the
changes status. Any application from a demat account which does not reflect the accurate status of the Applicant are liable to be
rejected at the sole discretion of our Company and the Lead Managers.
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Notes:
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity Shares can
be remitted outside India, subject to tax, as applicable according to the IT Act.
In case Equity Shares are allotted on a non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be
remitted outside India.
The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated
on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft
must accompany each CAF.
In case of an application received from non-residents, Allotment, refunds and other distribution, if any, will be made in accordance
with the guidelines/ rules prescribed by RBI / Government of India as applicable at the time of making such Allotment, remittance
and subject to necessary approvals.
Applications received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment of Equity Shares shall, inter alia,
be subject to conditions, as may be imposed from time to time by the RBI under the FEMA, in respect of matters including Refund
of Application Money, Allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest and export of share
certificates.
Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process
This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the ASBA Process. Our Company
and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may
occur after the date of the Letter of Offer. Investors who are eligible to apply under the ASBA Process are advised to make their
independent investigations and to ensure that the CAF is correctly filled up.
The list of banks that have been notified by SEBI to act as SCSBs for the ASBA Process is provided on http://www.sebi.gov.in. For details on
Designated Branches of SCSBs collecting the CAF, please refer the above mentioned SEBI link.
Equity Shareholders who are eligible to apply under the ASBA Process
The option of applying for Equity Shares in the Issue through the ASBA Process is only available to the Investors of our Company on the
Record Date and who:
hold the Equity Shares in dematerialised form as on the Record Date and have applied towards his/her Rights Entitlements or
additional Equity Shares in the Issue in dematerialised form;
have not renounced his/her Rights Entitlements in full or in part;
are not in the United States and are eligible under applicable securities laws to subscribe for the Rights Entitlements and
Equity Shares in the Issue;
are not a Renouncee; and
are applying through a bank account maintained with SCSBs.
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CAF
The Registrar will despatch the CAF to all Eligible Equity Shareholders as per their Rights Entitlements on the Record Date for the Issue. Those
Investors who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide
necessary details.
Investors desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only.
Application in electronic mode will only be available with such SCSBs who provide such facility. The Investor shall submit the CAF to the
SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said ASBA Account.
Mor than one Investor may apply using the same ASBA Account provided that the SCSB will not accept a total of more than five CAFs with
respect to any single ASBA Account.
Acceptance of the Issue
You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the respective CAFs sent by the Registrar,
selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the
Issue Closing Date or such extended time as may be specified by our Board of Directors of our Company in this regard.
Mode of payment
The Investor applying under the ASBA Process agrees to block the entire amount payable on application with the submission of the CAF, by
authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB.
After verifying that sufficient funds are available in the bank account details of which are provided in the CAF, the SCSB shall block an amount
equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of
intimation from the Registrar, the SCSBs shall transfer such amount as per the Registrar’s instruction from the bank account with the SCSB
mentioned by the Investor in the CAF. This amount will be transferred in terms of the ICDR Regulations, into the separate bank account
maintained by our Company as per the provisions of section 73(3) of the Companies Act. The balance amount remaining after the finalisation of
the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this regard by the Registrar to the Issue and the
Lead Manager to the respective SCSB.
The Investor applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the
submission of the CAF.
The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided
by the Investor in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to
the acceptance of the application by the SCSB, our Company would have a right to reject the application only on technical grounds.
Options available to the Equity Shareholders applying under the ASBA Process
The summary of options available to the Investors is presented below. You may exercise any of the following options with regard to the Equity
Shares, using the respective CAFs received from Registrar:
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Option Available Action Required
1. Accept whole or part of your Rights Entitlements without
renouncing the balance.
Fill in and sign Part A of the CAF (All joint holders must sign)
2. Accept your Rights Entitlements in full and apply for additional
Equity Shares
Fill in and sign Part A of the CAF including Block III relating to
the acceptance of entitlement and Block IV relating to additional
Equity Shares (All joint holders must sign)
The Investors applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary
details. However, in cases where this option is not selected, but the CAF is tendered to the SCSBs with the relevant details required
under the ASBA process option and the SCSBs block the requisite amount, then that CAFs would be treated as if the Investor have
selected to apply through the ASBA process option.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011
dated April 29, 2011, all applicants who are QIBs and Non Institutional applications or are applying in this Issue for Equity Shares for
an amount exceeding `2,00,000 shall mandatorily make use of ASBA facility.
Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are entitled to, provided that you are
eligible to apply for Equity Shares under applicable law and you have applied for all the Equity Shares (as the case may be) offered without
renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and
Allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed
under “Basis of Allotment” in this chapter at page 340.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Equity Shares in Part A
of the CAF.
Renunciation under the ASBA Process
Renouncees cannot participate in the Issue through ASBA Process.
Application on Plain Paper under ASBA process
An Investor who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is applying under the ASBA
Process may make an application to subscribe to the Issue on plain paper, along with Demand Draft, net of bank and postal charges payable at
Mumbai which should be drawn in favour of the “Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants
or shareholders/applicants applying on non repatriable basis or “Reliance MediaWorks Limited - Rights Issue -NR” in case of non resident
shareholders/applicants applying on repatriable basis and the Investors should send the same by registered post directly to the SCSB.
Applications on plain paper will not be accepted from any address outside India.
The envelope should be super scribed “Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants or
shareholders/applicants applying on non repatriable basis or “Reliance MediaWorks Limited - Rights Issue -NR” in case of non resident
shareholders/applicants applying on repatriable basis and should be postmarked in India. The application on plain paper, duly signed by the
Investors including joint holders, in the same order as per the specimen recorded with our Company / Depositories, must reach the office of the
SCSB before the Issue Closing Date and should contain the following particulars:
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Name of Issuer, being Reliance MediaWorks Limited;
Name and address of the Investor including joint holders;
Registered Folio Number/ DP and Client ID.;
Number of Equity Shares held as on Record Date;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total amount paid at the rate of `40 per Equity Share;
Details of the ASBA Account such as the account number, name, address and branch of the relevant SCSB;
In case of NR Eligible Equity Shareholders, details of the NRE/FCNR/NRO account such as the account number, name, address and
branch of the SCSB with which the account is maintained;
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the
courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity
Shares applied for pursuant to the Issue;
In case of joint holders, signatures of Eligible Equity Shareholders to appear in the same sequence and order as they appear in the
records of the Company and also the depository records; and
Additionally, all applicants shall include the following:
“I/We understand that neither the Rights Entitlements nor the Equity Shares have been, and will be, registered under the United States
Securities Act of 1933, as amended (“US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or
otherwise transferred within the United States or to the territories or possessions thereof (“United States”). I/we understand the Equity Shares
referred to in this application are being offered in India but not in the United States. I/we understand the offering to which this application
relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlements for sale in the United
States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlements in the United States. Accordingly, I/we
understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that none of the
Company, the Registrar, the Lead Manager or any other person acting on behalf of the Company will accept subscriptions from any person, or
the agent of any person, who appears to be, or who the Company, the Registrar, the Lead Manager or any other person acting on behalf of the
Company has reason to believe is, a resident of the United States.
I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any jurisdiction or under any
circumstances in which such offer or sale is not authorised or to any person to whom it is unlawful to make such offer, sale or invitation except
under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are
acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our
residence.
I/We understand and agree that the Rights Entitlements and Equity Shares may not be reoffered, resold, pledged or otherwise transferred except
in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act.
I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlements and/or the Equity Shares is/are,
outside the United States, and (ii) is/are acquiring the Rights Entitlements and/or the Equity Shares in an offshore transaction meeting the
requirements of Regulation S.
I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing
representations and agreements.”
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Option to receive Equity Shares in Dematerialized Form
INVESTORS UNDER THE ASBA PROCESS MAY NOTE THAT THE EQUITY SHARES UNDER THE ASBA PROCESS CAN BE
ALLOTTED ONLY IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY
SAHRES ARE HELD BY SUCH ASBA APPLICANT ON THE RECORD DATE.
General instructions for Investors applying under the ASBA Process
(a) Please read the instructions printed on the respective CAF carefully.
(b) Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete with
regard to any of the particulars required to be given therein, and / or which are not completed in conformity with the terms of this
Letter of Offer are liable to be rejected. The CAF must be filled in English. In case of non-receipt of CAF, Application can be made
on plain paper mentioning all necessary details as mentioned under the section entitled “Application on Plain Paper” at page 327.
(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details are
provided in the CAF and not to the Bankers to the Issue / Collecting Banks (assuming that such Collecting Bank is not a SCSB), to
our Company or Registrar or Lead Manager to the Issue. Plain-paper Applications are to be submitted with the Registrar to the Issue.
(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number
allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. Except for applications on behalf of the
Central or State Government, the residents of Sikkim and the officials appointed by the courts, CAFs without PAN will be
considered incomplete and are liable to be rejected. With effect from 16 August 2010, the demat accounts for Investors for which
PAN details have not been verified shall be “suspended credit” and no allotment and credit of Equity Shares pursuant to the Issue
shall be made into the accounts of such Investors.
(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not acceptable.
In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be
refunded and no interest will be paid thereon.
(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India.
Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive
Magistrate under his/her official seal. The Investors must sign the CAF as per the specimen signature recorded with our Company/or
Depositories.
(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen
signature(s) recorded with our Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and
all communication will be addressed to the first applicant.
(h) All communication in connection with application for the Equity Shares, including any change in address of the Investors should be
addressed to the Registrar to the Issue prior to the date of Allotment in this Issue quoting the name of the first/sole applicant
Investor, folio numbers and CAF number.
(i) Only the person or persons to whom the Equity Shares have been offered and not renouncee(s) shall be eligible to participate under
the ASBA process.
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(j) Only persons outside the United States and who are eligible to subscribe for Rights Entitlements and Equity Shares under applicable
securities laws are eligible to participate.
(k) Only the Eligible Equity Shareholders holding shares in dematerialized form are eligible to participate through ASBA process.
(l) In case of non-receipt of CAF, application can be made on plain paper mentioning all necessary details as mentioned as mentioned
under the heading “Application on Plain Paper” at page 327.
(m) In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for making
applications on own account using ASBA facility, they should have a separate account in own name with any other SEBI
registered SCSBs. Such account shall be used solely for the purpose of making application in public issues and clear
demarcated funds should be available in such account for ASBA applications.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April
29, 2011, all applicants who are QIBs and Non Institutional applicants or are applying in this Issue for Equity Shares for an amount exceeding
`2,00,000 /- shall mandatorily make use of ASBA facility.
Do’s:
a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.
b. Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs and not all
SCSBs and you should ensure that your SCSB offers such facility to you.
c. Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated
as Equity Shares will be allotted in the dematerialized form only.
d. Ensure that the CAFs are submitted at the SCSBs and details of the correct bank account have been provided in the CAF.
e. Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for} X {Issue Price of Equity
Shares, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the
CAF to the respective Designated Branch of the SCSB.
f. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the
CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.
g. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form.
h. Except for CAFs submitted on behalf of the Central or State Government and the residents of Sikkim and the officials appointed by
the courts, each applicant should mention their PAN allotted under the I. T. Act.
i. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held with the
Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint
names and such names are in the same sequence in which they appear in the CAF.
j. Ensure that the Demographic Details are updated, true and correct, in all respects.
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k. Ensure that the account holder in whose bank account the funds are to be blocked has signed authorizing such funds to be blocked.
l. Do not apply through non ASBA process if you are a QIB or Non Institutional investors or if you are and Applicant whose
Application Money exceeds ` 2,00,000
Don’ts:
a. Do not apply if you are in the United States or are not eligible to participate in the Issue under the securities laws applicable to your
jurisdiction.
b. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.
c. Do not apply through a CAF, as well as a plain-paper Application for additional Equity Shares, renunciation or any other purpose.
d. Do not pay the amount payable on application in cash, by money order or by postal order.
e. Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such Collecting Bank is
not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a
Designated Branch of the SCSB only.
f. Do not submit more than five CAFs per ASBA Account.
g. Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground.
h. Do not instruct your respective banks to release the funds blocked under the ASBA Process.
Grounds for Technical Rejection under the ASBA Process
In addition to the grounds listed under the part entitled “Grounds for Technical Rejection” in this chapter at page 346, applications under the
ABSA Process are liable to be rejected on the following grounds:
a) Application on a SAF (unless all the SAFs are used by the original shareholder).
b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the Registrar.
c) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a SCSB) / to a branch of a
SCSB which is not a Designated Branch of the SCSB / Company.
d) Renouncee applying under the ASBA Process.
e) Insufficient funds are available with the SCSB for blocking the amount.
f) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant to regulatory orders.
g) Account holder not signing the CAF or declaration mentioned therein.
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h) CAFs that do not include the certification set out in the CAF to the effect that the subscriber does not have a registered address (and is
not otherwise located) in the United States and is authorised to acquire the rights and the securities in compliance with all applicable
laws and regulations.
i) CAFs which have evidence of being executed in/dispatched from the United States.
j) Application by Applicants, that are QIBs, or Applicants whose Application money exceeds ` 200,000 who are eligible to apply
through ASBA Process, made through non-ASBA process.
k) Application by persons not competent to contract under the Indian Contract Act, 1872, as amended, except applications by minors
having valid demat accounts as per the demographic details provided by the Depositories.
l) The Application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for is more than ` 200,000, but
has applied separately through split CAFs of less than ` 200,000 each has not done so through the ASBA process.
m) Submitting the GIR instead of the PAN.
n) Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.
o) Submission of more than five CAFs per ASBA Account.
p) Application for Rights Entitlements or additional Equity Shares in physical form.
q) ASBA bids by SCSB on own account, other than through an ASBA Account in its own name with any other SCSB.
Depository account and bank details for Investors applying under the ASBA Process
IT IS MANDATORY FOR ALL THE INVESTORS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY
SHARES IN DEMATERIALISED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES
ARE HELD BY THE INVESTOR AS ON THE RECORD DATE. ALL INVESTORS APPLYING UNDER THE ASBA PROCESS
SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION
NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. INVESTORS APPLYING UNDER THE ASBA PROCESS
MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE
DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT
THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN
WHICH THEY APPEAR IN THE CAF.
Investors applying under the ASBA Process should note that on the basis of name of these Investors, Depository Participant’s name and
identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the
Depository demographic details of these Investors such as address, bank account details for printing on refund orders and occupation
(“Demographic Details”). Hence, Investors applying under the ASBA Process should carefully fill in their Depository Account details in
the CAF.
These Demographic Details would be used for all correspondence with such Investors including mailing of the letters intimating unblock of
bank account of the respective Investor. The Demographic Details given by the Investors in the CAF would not be used for any other purposes
by the Registrar. Hence, Investors are advised to update their Demographic Details as provided to their Depository Participants.
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By signing the CAFs, the Investors applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon
request, to the Registrar to the Issue, the required Demographic Details as available on its records.
Letters intimating Allotment and unblocking or refund (if any) would be mailed at the address of the Investor applying under the
ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank
account linked to the DP ID. Investors applying under the ASBA Process may note that delivery of letters intimating unblocking of
bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an
event, the address and other details given by the Investor in the CAF would be used only to ensure dispatch of letters intimating
unblocking of bank account.
Note that any such delay shall be at the sole risk of the Investors applying under the ASBA Process and none of our Company, the
SCSBs or the Lead Manager shall be liable to compensate the Investor applying under the ASBA Process for any losses caused due to
any such delay or liable to pay any interest for such delay.
In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the Investors (including the order
of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then such applications are liable to be rejected.
Underwriting
The Issue is not underwritten.
Issue Schedule
Issue Opening Date: Tuesday, August 6, 2013
Last date for receiving requests for SAFs: Tuesday, August 13, 2013
Issue Closing Date: Tuesday, August 20, 2013
The Board may however decide to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue
Opening Date.
Basis of Allotment
Subject to the provisions contained in the Letter of Offer, the Articles of Association of our Company and the approval of the Designated Stock
Exchange, the Board will proceed to Allot the Equity Shares in the following order of priority:
(a) Full Allotment to those Investors who have applied for their Rights Entitlements either in full or in part and also to the Renouncee(s)
who has/ have applied for Equity Shares renounced in their favour, in full or in part.
(b) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of 4.
(c) Investors whose fractional entitlements are being ignored would be given preference in allotment of one additional Equity Share each if
they apply for additional Equity Share. Allotment under this head shall be considered if there are any unsubscribed Equity Shares after
allotment under (a) above. If number of Equity Shares required for allotment under this head are more than number of Equity Shares
available after allotment under (a) above, the Allotment would be made on a fair and equitable basis in consultation with the
Designated Stock Exchange.
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(d) Allotment to the Investors who having applied for all the Equity Shares offered to them as part of the Issue and have also applied for
additional Equity Shares. The Allotment of such additional Equity Shares will be made as far as possible on an equitable basis having
due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after
making full Allotment in (a) and (b) above. The Allotment of such Equity Shares will be at the sole discretion of the Board / Committee
of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and will not be a preferential Allotment.
(e) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have applied for additional Equity
Shares provided there is surplus available after making full Allotment under (a), (b) and (c) above. The Allotment of such Equity
Shares will be at the sole discretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part
of the Issue and not preferential Allotment.
(f) Our Promoters have, through the Subscription Letters, jointly and severally, undertaken to (i) apply for Equity Shares being offered to
them pursuant to the Issue to the extent of their Rights Entitlements; (ii) apply directly or through our Company’s Promoter Group for
any Equity Shares renounced in their favour; and (iii) apply directly or through the Company’s Promoter Group for any additional
Equity Shares in the Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable law, to ensure
that at least 90% of the Rights Issue is subscribed (together the “Promoter Subscription”).
As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance with the paragraph above,
either / both Promoters may acquire Equity Shares over and above their Rights Entitlements which may result in an increase in their
shareholding, individually and / or collectively, above their current shareholding. Any such subscription and acquisition of Equity Shares by
either / both Promoters in the Rights Issue will not result in change of control of the management of the Company in accordance with Regulation
3 (2) of the Takeover Code and shall be exempt in terms of Regulation 10 (4) (b) of the Takeover Code. Further, such subscription to additional
Equity Shares by either / both Promoters beyond their Rights Entitlements will be in accordance with the provisions of Regulation 10(4) (b) of
the Takeover Code. As such, other than meeting the requirements indicated in the chapter entitled “Objects of the Issue” at page 81 of this Letter
of Offer, there is no other intention / purpose for the Issue, including any intention to delist our Equity Shares, even if, as a result of any
Allotment in the Issue to either / both Promoter(s) and / or the members of our Promoter Group, the shareholding of our Promoters and/or
Promoter Group in our Company exceeds their current shareholding.
However, such participation will not result in breach of minimum public shareholding requirement stipulated in the equity Listing Agreement
entered into between us and the Stock Exchanges.
Allotment Advices / Refund Orders
Our Company will issue and dispatch Allotment advice/ share certificates / demat credit and/or letters of regret along with refund order or credit
the allotted Equity Shares to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is
not repaid within eight days from the day our Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the
refusal by the Stock Exchange(s), whichever is earlier) our Company and every Director of our Company who is an officer in default shall, on
and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies
Act.
Investors residing at centers where clearing houses are managed by the RBI will get refunds through National Electronic Clearing Service
(“NECS”) except where Investors have not provided the details required to send electronic refunds or where the Investors are otherwise
disclosed as applicable or eligible to get refunds through direct credit and real-time gross settlement (“RTGS”).
In case of those Investors who have opted to receive their Rights Entitlements in dematerialized form using electronic credit under the
depository system, advice regarding their credit of the Equity Shares shall be given separately. Investors to whom refunds are made through
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electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within 15 days of the
Issue Closing Date.
In case of those Investors who have opted to receive their Rights Entitlements in physical form and our Company issues letter of allotment, the
corresponding share certificates will be kept ready within one month from the date of Allotment thereof or such extended time as may be
approved by our Company Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Investors are requested to
preserve such letters of allotment, which would be exchanged later for the share certificates.
The letter of allotment / refund order would be sent by registered post / speed post to the sole / first Investors registered address. Such refund
orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’
and would be drawn in favour of the sole/first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose.
The letter of allotment / Intimations would be sent by ordinary post.
Payment of Refund
Mode of making refunds
The payment of refund, if any, would be done through any of the following modes:
1. NECS – Payment of refund would be done through NECS for Investors having an account at any of the centres where such facility has
been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the
MICR code as appearing on a cheque leaf, from the Depositories/the records of the Registrar. The payment of refunds is mandatory for
Investors having a bank account at any centre where NECS facility has been made available (subject to availability of all information
for crediting the refund through NECS).
2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors’ bank has been assigned the Indian Financial
System Code (IFSC), which can be linked to a MICR, allotted to that particular bank branch. IFSC Code will be obtained from the
website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the
Investors have registered their nine digit MICR number and their bank account number with the registrar to our Company or with the
depository participant while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that
particular bank branch and the payment of refund will be made to the Investors through this method.
3. Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be eligible to receive refunds through direct credit.
Charges, if any, levied by the relevant bank(s) for the same would be borne by our Company.
4. RTGS – If the refund amount exceeds `2 lakhs, the investors have the option to receive refund through RTGS. Such eligible Investors
who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same
is not provided, refund shall be made through ECS or any other eligible mode. Charges, if any, levied by the refund bank(s) for the
same would be borne by our Company. Charges, if any, levied by the Investor’s bank receiving the credit would be borne by the
Investor.
5. For all other Investors the refund orders will be despatched through Speed Post/ Registered Post. Such refunds will be made by
cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and payable at par.
6. Credit of refunds to Investors in any other electronic manner permissible under the banking laws which is in force, and is permitted by
the SEBI from time to time.
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Printing of Bank Particulars on Refund Orders
As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the Investor’s
bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars, where available, will be printed
on the refund orders/refund warrants which can then be deposited only in the account specified. Our Company will in no way be responsible if
any loss occurs through these instruments falling into improper hands either through forgery or fraud.
Allotment advice / Share Certificates/ Demat Credit
Allotment advice/ demat credit or letters of regret will be dispatched to the registered address of the first named Investor or respective
beneficiary accounts within 15 days, from the Issue Closing Date. In case our Company issues Allotment advice, the relative share certificates
will be dispatched within one month from the date of the Allotment. Allottees are requested to preserve such allotment advice (if any) to be
exchanged later for share certificates.
Option to receive Equity Shares in Dematerialized Form
Investors shall be allotted the Equity Shares in dematerialized (electronic) form at the option of the Investor. Our Company has signed a
tripartite agreement with NSDL on October 31, 2000 which enables the Investors to hold and trade in Equity Shares in a dematerialized form,
instead of holding the Equity Shares in the form of physical certificates. Our Company has also signed a tripartite agreement with CDSL on
September 14, 2000 which enables the Investors to hold and trade in Equity Shares in a dematerialized form, instead of holding the Equity
Shares in the form of physical certificates.
In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic
credit to their beneficiary account as given in the CAF, after verification with a depository participant. Investor will have to give the relevant
particulars for this purpose in the appropriate place in the CAF. Allotment advice, refund order (if any) would be sent directly to the Investor by
the Registrar to the Issue but the Investor’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the
Investor’s depository account. CAFs, which do not accurately contain this information, will be given the Equity Shares in physical form. No
separate CAFs for Equity Shares in physical and /or dematerialized form should be made. If such CAFs are made, the CAFs for physical Equity
Shares will be treated as multiple CAFs and is liable to be rejected. In case of partial Allotment, Allotment will be done in demat option for the
Equity Shares sought in demat and balance, if any, will be allotted in physical Equity Shares. Eligible Equity Shareholders of the Company
holding Equity Shares in physical form may opt to receive Equity Shares in the Issue in dematerialized form.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE TRADED ON THE STOCK
EXCHANGES ONLY IN DEMATERIALIZED FORM.
The procedure for availing the facility for Allotment of Equity Shares in this Issue in the electronic form is as under:
Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name
of the holder in the same manner as is registered in the records of our Company. In the case of joint holding, the beneficiary account
should be opened carrying the names of the holders in the same order as registered in the records of our Company). In case of
Investors having various folios in our Company with different joint holders, the Investors will have to open separate accounts for
such holdings. Those Investors who have already opened such beneficiary account(s) need not adhere to this step.
For Eligible Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on the Record Date, the
beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and
wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary
account should be filled in the space provided in the CAF. It may be noted that the Allotment of Equity Shares arising out of this
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Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it
should be ensured that the depository account is in the name(s) of the Investors and the names are in the same order as in the records
of our Company/Depositories.
The responsibility for correctness of information (including Investor’s age and other details) filled in the CAF vis-à-vis such information with
the Investor’s depository participant, would rest with the Investor. Investors should ensure that the names of the Investors and the order in which
they appear in CAF should be the same as registered with the Investor’s depository participant.
If incomplete / incorrect beneficiary account details are given in the CAF, the Investor will get Equity Shares in physical form.
The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in
the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the
applicant’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account.
Renouncees will also have to provide the necessary details about their beneficiary account for Allotment of Equity Shares in this Issue. In case
these details are incomplete or incorrect, the application is liable to be rejected.
General instructions for Investors
(a) Please read the instructions printed on the enclosed CAF carefully.
(b) Application should be made on the printed CAF, provided by our Company except as mentioned under the head “Application
on Plain Paper” in this section at page 327 of this Letter of Offer and should be completed in all respects. The CAF found
incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity
with the terms of the Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded
without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the
names of all the Investors, details of occupation, address, father’s / husband’s name must be filled in block letters.
The CAF together with the cheque / demand draft should be sent to the Bankers to the Issue/Collecting Bank or to the Registrar to the Issue and
not to our Company or Lead Manager to the Issue. Investors residing at places other than cities where the branches of the Bankers to the Issue
have been authorised by our Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai of an
amount net of bank and postal charges and send their CAFs to the Registrar to the Issue by registered post. If any portion of the CAF is / are
detached or separated, such application is liable to be rejected.
Applications where separate cheques/demand drafts are not attached for amounts to be paid for Equity Shares are liable to be rejected.
(a) Except for applications on behalf of the Central and State Government, the residents of Sikkim and the officials appointed by
the courts, all Investors, and in the case of application in joint names, each of the joint Investors, should mention his / her
PAN number allotted under the I.T. Act, 1961, irrespective of the amount of the application. CAFs without PAN will be
considered incomplete and are liable to be rejected.
(b) Eligible Equity Shareholders, holding Equity Shares in physical form and Renouncees who are not Eligible Equity
Shareholders holding Equity Shares in demat form. Investors are advised that it is mandatory to provide information as to
their savings / current account number and the name of the bank with whom such account is held in the CAF to enable the
Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not
containing such details is liable to be rejected.
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(c) All payment should be made by cheque/demand draft only. Application through the ASBA process as mentioned above is
acceptable. Cash payment is not acceptable. In case payment is effected in contravention of this, the application may be
deemed invalid and the application money will be refunded and no interest will be paid thereon.
(d) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution
of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special
Executive Magistrate under his / her official seal. The Investors must sign the CAF as per the specimen signature recorded
with our Company and the Depositories.
(e) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant
power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to
sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or
society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above
referred documents are already registered with our Company, the same need not be a furnished again. In case these papers are
sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable
to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.
(f) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen
signature(s) recorded with our Company. Further, in case of joint Investors who are Renouncees, the number of Investors
should not exceed three. In case of joint Investors, reference, if any, will be made in the first Investor’s name and all
communication will be addressed to the first Investor.
(g) Application(s) received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment of Equity Shares shall,
inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of
application money, Allotment of Equity Shares, subsequent issue and Allotment of Equity Shares, interest, export of share
certificates, etc. In case a NR or NRI Investor has specific approval from the RBI, in connection with his shareholding, he
should enclose a copy of such approval with the CAF. Additionally, applications will not be accepted from NRs/NRIs in the
United States or its territories and possessions, or any other jurisdiction where the offer or sale of the Rights Entitlements and
Equity Shares may be restricted by applicable securities laws.
(h) All communication in connection with application for the Equity Shares, including any change in address of the Investors
should be addressed to the Registrar to the Issue prior to the date of Allotment in this Issue quoting the name of the first/sole
Investor, folio numbers and CAF number. Please note that any intimation for change of address of Investors, after the date of
Allotment, should be sent to the Registrar and Transfer Agents of our Company, in the case of Equity Shares held in physical
form and to the respective depository participant, in case of Equity Shares held in dematerialized form.
(i) SAFs cannot be re-split.
(j) Only the person or persons to whom Equity Shares have been offered and not Renouncee(s) shall be entitled to obtain SAFs.
(k) Investors must write their CAF number at the back of the cheque / demand draft.
(l) Only one mode of payment per application should be used. The payment must be by cheque / demand draft drawn on any of
the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing
House located at the centre indicated on the reverse of the CAF where the application is to be submitted.
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(m) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques and postal /
money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal
orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against
application in cash please refer point (e) above).
(n) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank / Registrar, as the case
may be, will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.
(o) The distribution of this Letter of Offer and issue of Equity Shares and Rights Entitlements to persons in certain jurisdictions
outside India may be restricted by legal requirements in those jurisdictions. Persons in the United States and such other
jurisdictions are instructed to disregard this Letter of Offer and not to attempt to subscribe for Equity Shares.
(p) Investors shall be given an option to get the Equity Shares in demat or physical mode.
(q) Investors are requested to ensure that the number of Equity Shares applied for by them do not exceed the prescribed limits
under prescribed laws
Grounds for Technical Rejections
Investors are advised to note that applications are liable to be rejected on technical grounds, including the following:
Amount paid does not tally with the amount payable;
Bank account details (for refund) are not provided or available with the depositories or Registrar to the Issue, as the case may be;
Age of Investor(s) not given (in case of renouncees);
Except for CAFs on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the courts,
PAN number not given for application of any value;
In case of CAF under power of attorney or by limited companies, corporate, trust, relevant documents are not submitted;
If the signature of the Investor does not match with the one given on the CAF and for renounce(s) if the signature does not match
with the records available with their depositories;
CAFs are not submitted by the Investors within the time prescribed as per the CAF and the Letter of Offer;
CAFs not duly signed by the sole / joint Investors;
CAFs by OCBs;
CAFs accompanied by Stockinvest;
In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the Investors
(including the order of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then such applications are
liable to be rejected.
CAFs that do not include the certifications set out in the CAF to the effect that, among other thing, the subscriber is not located in
the United States and is authorised to acquire the Rights Entitlements and Equity Shares in compliance with all applicable laws
and regulations;
CAFs which have evidence of being executed in/dispatched from the United States or any other jurisdiction where the offer or sale
of the Rights Entitlements and Equity Shares may be restricted by applicable securities laws;
CAFs by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where a
registered address in India has not been provided;
CAFs where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory
requirements;
In case the GIR number is submitted instead of the PAN;
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Application by persons not competent to contract under the Indian Contract Act, 1872, as amended, except applications by minors
having valid demat accounts as per the demographic details provided by the Depositories;
Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.
Applications from QIBs and Non Institutional applicants or from Investors applying in this Issue for Equity Shares for an amount
exceeding `2,00,000, which are not in ASBA.
The application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for is more than ` 2,00,000
but has applied separately through split CAFs of less than ` 2,00,000 and has not done so through the ASBA process; and
Please read the Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions
contained in the CAF are an integral part of the Letter of Offer and must be carefully followed. The CAF is liable to be rejected for any non-
compliance of the provisions contained in the Letter of Offer or the CAF.
Investment by FIIs
In accordance with the current regulations, the following restrictions are applicable for investment by FIIs:
The Issue of Equity Shares under this Issue to a single FII should not exceed 10% of the post-issue paid up capital of our Company. In respect of
an FII investing in the Equity Shares on behalf of its sub-accounts the investment on behalf of each sub-account shall not exceed 10% of the
total paid up capital of our Company.
Applications will not be accepted from FIIs in the United States or its territories and possessions, or any other jurisdiction where the offer or sale
of the Rights Entitlements and Equity Shares may be restricted by applicable securities laws.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April
29, 2011, all applicants who are QIBs and Non Institutional applicants or are applying in this Issue for Equity Shares for an amount exceeding
`2,00,000 shall mandatorily make use of ASBA facility.
Investment by NRIs
Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. Applications will not be accepted from NRIs in the United
States or its territories and possessions, or any other jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be
restricted by applicable securities laws. Investors that are NRIs should note that Applications where a registered address is not provided in india
is liable to be rejected.
NRI Applicants may please note that only such Applications as are accompanied by payment in free foreign exchange shall be considered for
Allotment under the reserved category. The NRI Applicants who intend to make payment through NRO accounts shall use the Application Form
meant for resident Indians and shall not use the Application Forms meant for reserved category.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number
CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Instutitional applicants or are applying in this Issue for Equity
Shares for an amount exceeding `2,00,000 shall mandatorily make use of ASBA facility.
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Procedure for Applications by Mutual Funds
A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not
be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly
indicate the name of the concerned scheme for which the application is being made.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April
29, 2011, all applicants who are QIBs and Non Institutional applicants or are applying in this Issue for Equity Shares for an amount exceeding
`2,00,000 shall mandatorily make use of ASBA facility.
No Mutual Fund scheme may invest more than 10% of its net asset value in equity shares or equity related instruments of any company,
provided that the limit of 10% will not apply to investments in index funds or sector or industry specific funds. No Mutual Fund under all its
schemes may own over 10% of any company’s paid-up share capital carrying voting rights.
Investment by QFIs
In terms of circulars dated January 13, 2012, SEBI has permitted investment by QFIs in Indian equity issues, including in rights issues. A QFI
can invest in the Issue through its DP with whom it has opened a demat account. No single QFI can hold more than 5% of paid up equity capital
of the company at any point of time.
Further, aggregate shareholding of all QFIs shall not exceed 10% of the paid up equity capital of the Company at any point of time.
Applications will not be accepted from QFIs in restricted jurisdictions.
QFI applicants which are QIBs or whose Application Money exceeds ` 2,00,000 can participate in the Issue only through the ASBA process.
Impersonation
As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of sub-section (1) of section 68A of the
Companies Act which is reproduced below:
“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares therein, or otherwise
induces a Company to Allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable
with imprisonment for a term which may extend to five years”.
Dematerialized dealing
Our Company has entered into agreements dated October 31, 2000 and September 14, 2000 with NSDL and CDSL, respectively, and its Equity
Shares bear the ISIN INE540B01015.
Payment by Stockinvest
In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated 5 November 2003, the Stockinvest Scheme has been withdrawn.
Hence, payment through Stockinvest would not be accepted in this Issue.
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Disposal of application and application money
No acknowledgment will be issued for the application moneys received by our Company. However, the Bankers to the Issue / Registrar to the
Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.
The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without
assigning any reason thereto.
In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in
part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the Investor within a
period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes liable to repay
it, our Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally
liable to repay the money with interest as prescribed under Section 73 of the Companies Act.
For further instructions, please read the CAF carefully.
Utilisation of Issue Proceeds
Our Board of Directors declares that:
(i) All monies received out of this Issue shall be transferred to a separate bank account other than the bank account referred to sub-
section (3) of Section 73 of the Companies Act;
(ii) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of our
Company indicating the purpose for which such monies have been utilised;
(iii) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet
of our Company indicating the form in which such unutilized monies have been invested; and
(iv) Our Company may utilize the funds collected in the Issue only after the basis of Allotment is finalized.
Undertakings by our Company
Our Company undertakes the following:
1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily.
2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock exchanges where the Equity
Shares are to be listed will be taken within seven working days of finalization of basis of Allotment.
3. The funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be made available to the Registrar
to the Issue by our Company.
4. Our Company undertakes that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to
the Investor within 15 days of the Issue Closing Date, giving details of the banks where refunds shall be credited along with amount
and expected date of electronic credit of refund.
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5. Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms that to the best of
its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letter of Offer misleading
and further confirms that it has made all reasonable enquiries to ascertain such facts.
6. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to non-ASBA applications while
finalising the basis of Allotment.
7. At any given time there shall be only one denomination for the Equity Shares of our Company.
8. We shall comply with such disclosure and accounting norms specified by SEBI from time to time.
9. The certificates of the securities or refund orders to non-resident shareholders will be dispatched within specified time
10. No further issue of securities shall be made till the securities offered through this Letter of Offer are listed or till the application
moneys are refunded on account of non-listing, under-subscription, etc
Minimum Subscription
If our Company does not receive the minimum subscription of 90% of the Issue, our Company shall forthwith refund the entire subscription
amount received within 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes
liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) our
Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable
to repay the money with interest as prescribed under sub-section (2) and (2A) of Section 73 of the Companies Act.
Important
Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAF are an
integral part of the conditions of this Letter of Offer and must be carefully followed; otherwise the application is liable to be
rejected.
All enquiries in connection with this Letter of Offer or accompanying CAF and requests for SAFs must be addressed (quoting the Registered
Folio Number/ DP and Client ID, the CAF number and the name of the first Eligible Equity Shareholder as mentioned on the CAF and super
scribed ‘Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants or shareholders/applicants applying on
non repatriable basis or “Reliance MediaWorks Limited - Rights Issue -NR” in case of non resident shareholders/applicants applying on
repatriable basis on the envelope and postmarked in India) to the Registrar to the Issue at the following address:
Link Intime India Private Limited
C 13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai 400 078
Tel: +91 22 2596 7878
Facsimile: +91 22 2596 0329
E-mail: [email protected]
Investor Grievance Email: [email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No.: INR 000004058
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It is to be specifically noted that this Issue of Equity Shares is subject to the risk factors mentioned in the section entitled “Risk
Factors” at page 11.
The Rights Entitlements and the Equity Shares are not intended to be offered or sold to persons in the United States or any other
jurisdiction where such offer or sale may be prohibited. The offering to which this Letter of Offer relates is not, and under no
circumstances is to be construed as, an offering of any shares or rights to sale in the United States, the territories or possessions
thereof, or a solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Letter of Offer and the CAF
should not be dispatched or forwarded to or transmitted in or to, the United States at any time. Our Company and the Lead
Manager reserve absolute discretion in determining whether to allow such participation as well as the identity of the persons who
may be allowed to do so. Any person who acquires Rights Entitlements or Equity Shares will be deemed to have declared,
warranted and agreed, by accepting the delivery of the Letter of Offer, that it is not and that at the time of subscribing for the
Equity Shares or the Rights Entitlements, it will not be, in the United States or any other jurisdiction where such acquisition may
be prohibited.
THE ISSUE WILL REMAIN OPEN FOR A MINIMUM 15 DAYS. HOWEVER, THE BOARD WILL HAVE THE RIGHT TO
EXTEND THE ISSUE PERIOD AS IT MAY DETERMINE FROM TIME TO TIME BUT NOT EXCEEDING 30 DAYS FROM THE
ISSUE OPENING DATE
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RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of India and FEMA. While the
Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian
economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically
restricted, foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the
foreign investor is required to follow certain prescribed procedures for making such investment. The government bodies responsible for granting
foreign investment approvals are FIPB and RBI.
Subscription by foreign investors (NRIs/FIIs)
FIIs are permitted to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the
equity shares to be issued is not less than the price at which the equity shares are issued to residents.
The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i)
the activities of the investee company are under the automatic route under the foreign direct investment (“FDI”) Policy and transfer does not
attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (ii) the non-resident shareholding is
within the sectoral limits under the FDI policy; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI.
As per the existing policy of the Government of India, OCBs cannot participate in this Issue.
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SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION
Capitalised terms used in this section have the meaning that has been given to such terms in the Articles of Association of our Company.
Pursuant to Schedule II of the Companies Act and the ICDR Regulations, the main provisions of the Articles of Association of our Company are
detailed below:
The regulations contained in Table 'A' in Schedule I of the Companies Act shall not apply to our Company on its registration, but instead thereof
regulations contained in these Articles shall apply.
Capital
Article 3 provides that “The Authorised Capital of the Company shall be as per Capital Clause of the Memorandum of Association of the
Company with power to increase, reduce, divide and/or sub-divide the Share Capital or reclassify them into several classes and attach thereto
respectively such preferential, priority, deferred, qualified or special rights, privileges, conditions or restrictions, whether in regard to dividend,
voting, return of capital, distribution of assets or otherwise, as may be determined in accordance with the laws, rules and regulations applicable
to the Company and to vary, modify or abrogate such rights, privileges, conditions or restrictions in such manner as may from time to time be
provided by the regulations/resolutions of the Company or are provided for in the Articles of Association of the Company and to consolidate or
sub-divide or re-organise shares or issue shares of higher or lower denominations..”
Article 4 provides that “Such shares of the authorised capital to carry such rights, privileges and conditions attached thereto as are provided by
the regulations of the Company for the time being and with the power to increase and reduce the Share Capital of the Company and to divide the
Shares in the Capital for the time being into several classes and to attach thereto respectively such preferential rights, privileges or conditions as
may be determined by or in accordance with the regulations of the Company and to vary, modify or abrogate any such rights, privileges or
conditions in such manner as may for the time being be provided by the regulations of the Company. The rights of the preference shares shall be
determined at the time of issue thereof.”
Increase of Capital by the Company at how carried into effect
Article 5 provides that “The Company may in General Meeting, from time to time by ordinary resolution, increase its capital by creation of new
shares which may be unclassified and may be classified at the time of issue in one or more classes and of such amount or amounts as may be
deemed expedient. The new shares shall be issued upon such terms and conditions with such rights and privileges annexed thereto as the
resolution shall be prescribed and in particular, such shares may be issued with a preferential or qualified right to dividends and in the
distribution of assets of the Company and with a right of voting at General Meeting of the Company in conformity with Section 87 and 88 of
Act, Whenever the Capital of the Company has been increased under the provisions of this Article, the Directors shall comply with the
provisions of Section 97 of the Act.”
Article 5a provides that “The Company may by special resolution, reduce or adjust in any manner, subject to any authorizations and approvals
required by Law-
(a) its Share Capital
(b) any Capital Redemption Reserve Account
(c) any Securities Premium Account
Notwithstanding the above any amounts standing to the credit of Securities Premium Account may also be utilized other than for capitalization,
for any other purposes as are in accordance with the provisions of law.”
Redeemable Preference Shares
Article 7 (1) provides that “Subject to the provision of Section 80 of the Act, the Company shall have the power to issue preference shares which
are or at the option of the Company are liable to be redeemed in accordance with Section 80A of the Act and the resolution authorizing such
issue shall prescribe the manner, terms and conditions of redemption.”
Further Issue of Capital
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Article 8(a) provides that “The Company shall have right to issue further shares in accordance with the provision of Section 81 of the Act.”
Sub-division, consolidation and cancellation of Shares
Article 8(b) provides that “Subject to the provisions of Section 94 and other applicable provisions of the Act, the Company in General
Meeting may, from time to time, sub-divide or consolidate its shares or any of them and the resolution where by any share is sub-divided may
determine that, as between the holders of the shares resulting from such sub-division one or more of such shares shall have same preference or
special advantage as regards dividend, capital or otherwise over or as compared with the other or other subject as aforesaid, the Company in
General Meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its share
capital by the amount of the shares so cancelled.”
Modification of rights
Article 9 provides that “Wherever the capital, by reason of the issue of the preference shares or otherwise is divided into different classes of
shares, all or any of the rights and privileges attached to each class may, subject to the provisions of sections 106 and 107 of the Act, be
modified, commuted, affected, abrogated, dealt with or varied with the consent in writing of the holders, of not less than three fourth of the
issues capital of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class
and all the provisions hereinafter contained as to general meeting shall mutatis mutandis apply to every such meeting. This Article is not to
derogate from any power the Company would have if this Article was omitted.
The rights conferred upon the holders of the shares (including preference shares if any) of any class issued with preferred or other rights or
privileges shall unless otherwise expressly provided by the terms of issue of shares of that class, be deemed not to be modified, commuted,
affected, abrogated dealt with or varied by the creation of issue of further shares ranking pari passu therewith.”
Beneficial Owner (Including Depository)
Article 12 provides that “Save as herein otherwise provided, the Company shall be entitled to treat the person whose name appears on the
Register of Members as the holder of any share or whose name appears as the beneficial owner of shares in the records of the depository, as
the absolute owner thereof and accordingly shall not except as ordered by a court of competent jurisdiction or as by law require, be bound to
recognize any benami trust or equity or equitable, contingent, future or partial or other claim or claims or right to or interest in such share on
the part of any other person whether or not it shall have express or implied notice thereof.
No Notice of any trust, express, implied or constructive shall be entered in the Register of Members or of debenture holders.”
The Board may issue shares as fully paid-up
Article 14 provides that “Subject to the provisions of the Act and these Articles, the Board may allot and issue shares in the Capital of the
Company as payment of any property sold or transferred or for services rendered to the Company in the conduct of its business or in
satisfaction of any shares, which may be so issued shall be deemed to be fully paid-up or partly paid-up shares.”
Acceptance of shares
Article 15 provides that “Any application signed by or on behalf of an applicant for shares in the Company followed by an allotment of any
share therein, shall be an acceptance of shares within the meaning of these Articles and every person who thus or otherwise accepts any shares
and whose name is therefore placed on the register shall, for the purpose of this Articles, be a member.”
Deposit and Call etc. to be a debt payable
Article 16 provides that “The money, if any, which the Board of Directors shall on the allotment of any shares being made by them, require or
direct to be paid by way of deposit, call or otherwise, in respect of any shares allotted by them shall immediately on the inscription of the name
of the allotted in the register of members as the name of the holder of such shares, become a debt due to and recoverable by the Company from
the allotted thereof and shall be paid by him accordingly.”
Liability of Members
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Article 17 provides that “Every member or his heirs, executors or administrators to the extent of his assets which come to their hands shall be
liable to pay of the Company the portion of the capital represented by his shares or shares which may, for the time being remain unpaid
thereon in such amount at such time or times and in such manner as the Board of Directors shall from time to time, in accordance with the
Company’s requisitions, require or fix for the payment thereof.”
Share Certificate
Article 18 provides that “(a) Every member or allottee of shares shall be entitled, without payment to receive one certificate for all the shares
of the same class registered in his name. Every share certificate shall specify the name of the person in whose favour it is issued, the share
certificate number and the distinctive number(s) of the shares to which it relates and the amount paid up thereon. Such certificate shall be
issued only in pursuance of resolution passed by the Board and on surrender to the Company of its letter of allotment or its fractional coupons
of requisite value, save in cases of issues, against letters of acceptance or of renunciation or in cases of issue of bonus shares PROVIDED
THAT if the letter of allotment is lost or destroyed, the Board may impose such reasonable terms, if, any as it think fit, as to evidence and
indemnity and the payment of out of pocket expenses incurred by the Company in investigating the evidence. If any member shall require
additional certificate he shall pay for each additional certificate (not being in the marketable lot) such sum not exceeding One Rupee as the
Directors shall determine. The certificates of title to shares shall be issued under the seal of the Company and shall be signed in conformity
with the provisions of the Companies (Issue of Share Certificates) Rules, 1960 or any statutory modification or re-enactment thereof for the
time being in force. Printing of blank forms to be used for issue of share certificates and maintenance of books and documents relating to issue
of Share Certificate shall be in accordance with the provisions of the aforesaid rules. Such certificates of title to shares shall be completed and
kept ready for delivery within three months after the allotment and within one month after the application for the registration of the transfer of
any such shares unless the conditions of issue of share provide otherwise.
(b) Any two or more joint allottee or holders of shares shall, for the purpose of this Article, be treated as a single member and the certificate of
any share which may be the subject of joint ownership may be delivered to any one of such joint owners on behalf of all of them.
(c) Provided, however, that no share certificate (s) shall be issued in respect of shares held in Depository.”
Renewal of Shares Certificate
Article 19 provides that “No Certificate of any share or share shall be issued either in exchange for those which are sub-divided or
consolidated or in replacement of those which are defaced, torn or old, decrepit, worn out or where the pages on the reverse for recording
transfer have been duly utilized unless the certificate in lieu of which it is issued is surrendered to the Company.
PROVIDED THAT no fees shall be charged for issue of new certificates in replacement of those which are old, decrepit or worn out or where
the pages on the reverse for recording transfer have been fully utilized.
In case of rematerialisation of shares, procedure thereof as may be prescribed under law, shall be followed.”
Dematerialisation of shares
Article 21 provides that “The Company shall be entitled to dematerialize its existing shares, debentures and other securities, rematerialize its
shares, debentures and other securities held in Depositories and other securities, in a dematerialized form pursuant to the Depositories
Act,1996 and the rules, bye laws, regulations framed thereunder, if any.”
Company not bound to recognize any interest in share other than of registered holder
Article 22 provides that “Except as ordered by a Court of Competent jurisdiction or as by law required, the Company shall not be bound to
recognize, even when having notice thereof, any equitable, contingent, future or partial interest in any share of (except only as is by these
Articles otherwise expressly provided) any right in respect of a share other than an absolute right thereto, in accordance with these Articles, of
the person from time to time registered as holder thereof but the Board shall be at liberty at their sole discretion to register any share in the
joint names of any two or more persons (but not exceeding 4 persons) or the survivor or survivors of them.”
Trust not recognized
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Article 23 provides that “(a) Save as herein otherwise provided, the Company shall be entitled to treat the person whose name appears on the
Register of Members as the holder of any share as the absolute owner thereof and accordingly shall not ( except as ordered by a Court of
Competent jurisdiction or as by law required) be bound to recognize any benami, trust or equity or equitable, contingent, future or partial or
other claim or claim s or rights to or interest in such share in the part of any other person whether or not it shall have express or limited notice
thereof. The provisions of Section 153 of the Act, shall apply.
(b) Shares may be registered in the name of an incorporated Company or other body corporate but not in the name of a minor (except in case
where they are fully paid) or in the name of a person of unsound mind or in the name of any firm or partnership.”
Calls
Directors may make call
Article 28 provides that “(a)Subject to the provisions of Section 91 of the Act the Board of Directors may, from time to time by a Resolution
passed at a meeting of a Board ( and not be a circular resolution) make such calls as it think fit upon the members in respect of all moneys
unpaid on the shares whether on account of the nominal value of the shares or by way of premium, held by them respectively and not be
conditions of allotment thereof made payable at fixed time and each member shall pay the amount of every calls so made payable at fixed
time and each member shall pay the amount of every call so made on him to the person or person and at the times and places appointed by the
Board of Directors. A call may be made payable by installments. A call may be postponed or revoked as the Board may determine.
Liability of joint-holders
Article 28 provides that “(b) The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.”
Notice or calls
Article 29 provides that “Not less than thirty days notice in writing of any calls shall be given by the Company specifying the time and place
of payment and the person or persons to whom such calls shall be paid.”
When call deemed to have been made
Article 30 provides that “A call shall be deemed to have been made at the time when the resolution authorizing such call was passed at a
meeting of the Board of Directors and may be made payable to the members on such date or at the discretion of the Directors on such
subsequent date as shall be fixed by the Board of Directors.”
Evidence in action by Company against shareholders.
Article 34 provides that “On the trial or hearing of any action or suit brought by the Company against any member or his legal representative
for the recovery of any moneys claimed to be due to the Company in respect of his shares it shall be sufficient to prove that the name of the
members in respect of whose shares the money is sought to be recovered and entered on the register of member as the holder or as one of the
holders at or subsequent to the date at which in money sought to be recovered is alleged to have become due on the shares in respect of which
the money is sought to be recovered that the resolution making the call is duly recorded in the minute book and the notice of such call was
duly given to the member or his legal representative sued in pursuance of these Articles and it shall not be necessary to prove the appointment
of Directors who made such call, not that a quorum of Directors was present at the Board at which any call was made not that the meeting at
which any call was made was duly convened or constituted nor any other matter whatsoever but the proof of the matters aforesaid shall be
conclusive evidence of the debt.”
Lien
Partial payment not to preclude forfeiture
Article 36 provides that “Neither the receipt by the Company of a portion of any money which shall, from time to time, be due from any
member to the Company in respect of his shares, either by way of principal or interest of any indulgence granted by the Company in respect of
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the payment of such money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as hereinafter
provided.”
Company to have lien on shares
Article 37 provides that “The Company shall have a first and paramount lien upon all shares (other than fully paid up shares registered in the
name of each member whether solely or jointly with others) and upon the proceeds of sale thereof, for all moneys (whether presently payable
or not), called or payable at a fixed time in respect of such shares and no equitable interests in any share shall be created except upon the
footing and condition that this Article is to have full legal effect. Any such lien shall extend to all dividends from time to time declared in
respect of shares, PROVIDED THAT the Board of Directors may, at any time, declare any share to be wholly or in exempt from the
provisions of this Article.”
As to enforcing lien by sale
Article 38 provides that “The Company may sell, in such manner as the Board thinks, fit, any shares on which the Company has a lien for the
purpose of enforcing the same PROVIDIED THAT no sale shall be made:
(a) Unless a sum in respect of which the lien exists is presently payable or
(b) Until the expiration of fourteen days after a notice in writing starting and demanding payment of such part of the amount in respect of
which the lien exists as is presently payable has been given to the registered holder for the time being of the share or the person entitled
thereto by reason of his death or insolvency.
For the purposes of such sale, the Board may cause to be issued a duplicate certificate in respect of such shares and may authorize one of their
members to execute a transfer thereof on behalf of and in the name of such members.
(c) The purchaser shall not be bound to see the application of the purchase money nor shall his title to the shares be affected by any irregularity
or invalidity in the proceedings in reference to the sale.”
Application of proceeds of sale
Article 39 provides that “(a)The net proceeds of any such sale shall be received by the Company and applied in or towards satisfaction of such
part of the amount in respect of which the lien exists as is presently payable; and
(b) The residue, if any, after adjusting costs and expenses, if any, incurred shall be paid to the person entitled to the shares at the date of the
sale (subject to a like lien for sums not presently payable existed on the shares before the sale.)”
Forfeiture of Shares
If money payable on share not paid notice to be given
Article 40 provides that “If any member fails to pay the whole or any part of any call or any installment of a call on or before the day
appointed for the payment of the same or any such extension thereof, the Board of Directors may, at any time thereafter, during such time as
the call for installment remains unpaid, give notice to his requiring him to pay the same together with any interest that may have accrued and
all expenses that may have been incurred by the Company by reason of such non-payment.”
In default of payment shares to be forfeited
Article 43 provides that “If the requirements of any such notice as aforesaid are not complied with any share or shares in respect of which such
notice has been given may at any time thereafter before payment of all calls or installments, interests and expenses due in respect thereof, be
forfeited by a resolution of the Board of Directors to that effect. Such forfeiture shall include all dividends declared or any other moneys
payable in respect of the forfeited shares and not actually paid before the forfeiture.”
Notice of forfeiture to a member
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Article 44 provides that “When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it
stood immediately prior to the forfeiture and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of
Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as
aforesaid.”
Forfeited share to be the property of the Company and may be sold etc.
Article 45 provides that “Any share so forfeited, shall be deemed to be the property of the Company and may be sold, re-allotted or otherwise
disposed off, either to the original holder or to any other person upon such terms and in such manner as the Board of Directors shall think fit.
Member still liable to pay money owing at the time of forfeiture and interest
Article 46 provides that “Any member whose shares have been forfeited shall notwithstanding the forfeiture be liable to pay and shall
forthwith pay to the Company on demand all calls, installments, interest and expenses owing upon or in respect of such shares at the time of
the forfeiture together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding eighteen percent per
annum as the Board of Directors may determine and the Board of Directors may enforce the payment of such moneys or any part thereof, if it
thinks fit, but shall not be under any obligation to do so.”
Effect of forfeiture
Article 47 provides that “The forfeiture of a share shall involve the extinction at the time of the forfeiture of all interest in and all claims and
demand against the Company in respect of the share and all other rights incidental to the share, except only such to those rights as by these
Articles are expressly saved.”
Power to annual forfeiture
Article 48 provides that “The Board of Directors may at any time before any share so forfeited shall have been sold, re-allotted or otherwise
disposed off, annul the forfeiture thereof upon such conditions as it thinks fit.”
Cancellation of share certificate in respect of forfeited shares
Article 51 provides that “Upon sale, re-allotment or other disposal, under the provisions of these Articles, the certificate or certificates
originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to
it by the defaulting member) stand cancelled and become null and void and of no effect and the Directors shall be entitled to issue a new
certificate or certificates in respect of the said shares to the person of persons entitled thereto.”
Surrender of Shares
Article 54 provides that “The Directors may, subject to the provisions of the Act, accept a surrender of any share from any member desirous of
surrendering on such terms and condition as they think fit.”
Transfer and Transmission of Shares
Article 55 provides that “The Company shall keep a book to be called “Register of Transfer’ and therein shall be fairly and distantly entered
particulars of every transfer or transmission of any share held in a material form.”
Article 56 provides that “In the case of transfer or transmission of shares or other marketable securities where the Company has not issued any
certificates and where such shares or securities are being held in an electronic and fungible form in a Depository, the provisions of the
Depositories Act, 1996 shall Apply.”
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Form of transfer
Article 57 provides that “The instrument of transfer of any share shall be in the prescribed form under the Companies (Central Government)
General Rules and Forms, 1956 and in accordance with the requirements of Section 108 of the Act.”
Transfer to be presented with evidence of title
Article 59 provides that “Every instrument of transfer shall be presented to the Company duly stamped for registration accompanied by such
evidence as the Board may required to prove the tile of the transferor, his right to transfer the shares and generally under the subject to such
conditions and regulations as the Board may, from time to time, prescribe and every registered instrument of transfer shall remain in the
custody of the Company until destroyed by order of the Board. In case of securities being dematerialized, procedure as applicable to demat, to
be followed.”
Nomination facility
Article 61 provides that “(1) Every holder of shares in, or holder of debentures of, a Company may, at any time nominate, in the prescribed
manner, a person to whom his shares in, or debentures of, the Company shall vest in the event of his death.
(2) Where the shares in, or debentures of, a Company are held by more than one person jointly, the joint holders may together nominate, in the
prescribed manner, a person to whom all the rights in the shares or debentures of the Company shall vest in the event of death of all the joint
holders.
(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise,
in respect of such shares in, or debentures of, the Company, where a nomination made in the prescribed manner purports to confer on any
person the right to vest the shares in or debentures of the Company, the nominee shall, on the death of the share holder or holder of debentures
of the Company or, as the case may be, on the death of the joint holders become entitled to all the rights in the shares or debentures of the
Company or, as the case may be, all the joint holders, in relation to such shares in, or debentures of the Company to the exclusion of all other
persons, unless the nomination is varied or cancelled in the prescribed manner.
(4) Where the nominee is a minor, it shall be lawful for the holder of the shares or holder of debentures, to make the nomination to appoint in
the prescribed manner any person to become entitled to shares in or debentures of the Company, in the event of his death, during the
minority.”
Transmission of shares
Article 62 provides that “(1) Any person who becomes a nominee by virtue of the provisions of section 109A, upon the production of such
evidence as may be required by the Board and subject as hereinafter provided, elect, either.
(a) to be registered himself as holder of the share of debenture, as the case may be ; or
(b) to make such transfer of the share or debenture , as the case may be, as the deceased shareholder or debenture holder, as the case may be,
could have made.
(2) The Board shall, in either case, have the same right to decline or suspend registration, as it would have had, if the deceased shareholder or
debenture holder, as the case may be, had transferred the share of debenture, as the case may be, before his death.
(3) If the person being a nominee, so becoming entitled, elects to be registered as holder of the share or debenture, as the case may be, himself,
he shall deliver or send to the Company a notice in writing signed by him stating that he so elects and such notice shall be accompanied with
the death certificate of the deceased shareholder or debenture holder, as the case may be.
(4) All the limitations, restrictions and provisions of this Act relating to the right to transfer and the registration of the transfers of shares or
debentures shall be applicable to any such notice of transfer as aforesaid as if the death of the member had not occurred and the notice of
transfer were a transfer signed by that shareholder or debenture holder, as the case may be.
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(5) A person, being a nominee, becoming entitled to a share or debenture by reason of the death of the holder shall be entitled to the same
dividends and other advantages to which he would be entitled if he were the registered holder of the share or debenture except that he shall
not, before being registered a member in respect of his share or debenture, be entitled in respect of it to exercise any right conferred by
membership in relation to meetings of the Company.
Provided that the Board may, at time, give notice requiring any such person to elect either to be registered himself or to transfer the share or
debenture, and if the notice is not complied with within ninety days, the Board may thereafter with hold payment of all dividends, bonuses or
other moneys payable in respect of the share or debenture, until the requirements of the notice have been complied with.”
Buy Back of securities
Article 63 provides that “The Company shall have the power subject to and in accordance with all other applicable provisions of the Act to
purchase any of its own shares, whether or not they are redeemable, at such rate(s) and to keep them alive and/or reissue from time to time
such number(s) of shares, purchased at such rate (s) and on such terms and conditions as the Board may deem fit and appropriate.
Except to the extent permitted by Section 77 or other applicable provisions (if any) of the Act, the Company shall not give whether directly or
indirectly and whether by means of a loan, guarantee, provisions of security or otherwise any financial assistance for the purpose of, or in
connection with the purchase or subscription made or to be made by any person of or for any shares in the Company.”
Power of Company to purchase its own securities.
Article 64 provides that “(1) The Company may purchase its own shares or other specified securities (hereinafter referred to as “buy-back”)
out of –
(i) its free reserves; or
(ii) the securities premium account ; or
(iii) the proceeds of any shares or other specified securities
However, no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind
of shares or same kind of other specified securities.
(2) The company shall not purchase its own shares or other specified securities under sub-section (1) unless –
(a) a special resolution has been passed in general meeting of the company authorising the buy back;
(b) the buy-back does not exceed twenty five percent of the total paid-up capital and free reserves of the company.
However the buy-back of the equity shares in any financial year shall not exceed twenty five percent of its total paid-up equity capital in that
financial year;
(c) the ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back or such other ratio as
the Central Government may prescribe.
(d) all the shares or other specified securities for buy-back are fully paid-up;
(3) The notice of the meeting at which special resolution is proposed to be passed shall be accompanied by an explanatory statement stating -
(a) a full and complete disclosure of all material facts;
(b) the necessity for the buy-back;
(c) the class of security intended to be purchased under the buy-back;
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(d) the amount to be invested under the buy-back; and
(e) the time limit for completion of buy-back.
(4) Every buy-back shall be completed within twelve months from the date of passing the special resolution under clause (b) of sub-section
(2).
(5) The buy-back under sub-section (1) may be
(a) from the existing security holders on a proportionate basis; or
(b) from the open market; or
(c) from old lots, that is to say, where the lot of securities is listed public company, whose shares are listed on a recognized stock exchange, is
smaller than such market lot, as may be specified by the stock exchange; or
(d) by purchasing the securities issued to employees of the company pursuant to a scheme of stock option or sweat equity.
(6) Where the company has passed a special resolution under sub-clause (b) if Clause (2) to buy-back its own shares or other securities under
this section, it shall, before making such purchases, file with the Registrar and the Securities and Exchange Board of India a declaration of
solvency in the form prescribed, verified an affidavit to the effect that the Board has made a full inquiry into the affairs of the company as a
result of which it is capable of meeting its liabilities and will not be rendered insolvent within period of one year of the date of declaration
adopted by the Board, and signed by at least two directors of the company, one of whom shall be the managing director, if any:
However the company shall file no declaration of solvency with the Securities and Exchange Board of India so long its share is not listed on
any recognized stock exchange.
(7) Where the company buys-back its own securities, it shall extinguish and physically destroy the securities so bought-back within seven days
of the last date of completion of buy-back.
(8) Where the company completes a buy-back of its shares or other securities, it shall not make further issue of the same kind of shares
(including allotment of further shares under clause (a) of sub-section (1) of section 81) or other specified securities within a period of twenty-
four months except by way of bonus issue or in the discharge of subsisting obligations such as conversion of warrants, stock option schemes
sweat equity or conversion of preference shares or debentures into equity shares.
(9) Where the company buys-back its securities under this section, it shall maintain a register of the securities so bought, the consideration
paid for the securities bought-back the date of cancellation of securities, the date of extinguishing and physically destroying of securities and
such other particulars as may be prescribed.
(10) The company shall, after the completion of the buy-back under this section, file with the Registrar and the Securities and Exchange Board
of India, a return containing such particulars relating to the buy-back within thirty days of such completion, as may be prescribed.
However no return shall be filed with the Securities and Exchange Board of India as long as the shares of the Company are not listed on any
recognised stock exchange.
Transfer of certain sums to capital redemption reserve account
Article 65 provides that “Where the company purchases its own shares out of free reserves, then sum equal to the nominal value of the share
so purchased shall be transferred to the capital redemption reserve account referred to in clause (d) of the provision to sub-section (1) of
section 80 and details of such transfer shall be disclosed in the balance-sheet.”
Prohibition for buy-back in certain circumstances
Article 66 provides that (1) The Company shall not directly or indirectly purchase its own shares or other specified securities –
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(a) through any subsidiary company including its own subsidiary companies; or
(b) through any investment company or group of investment company; or
(c) if a default, in repayment of deposit, redemption of debenture of preference shares or payment of dividend to any share holder or
repayment of a term loan or interest payable thereon to any financial institution or bank is subsisting.
(2) The company shall not directly or indirectly purchase its own shares or other specified securities in case such company has not complied
with provisions of Section 159, 207 and 211.
Issue of sweat equity shares
Article 67 provides that “(1) The company may issue sweat equity shares of a class of shares already issued if the following conditions are
fulfilled, namely:
(a) the issue of sweat equity shares is authorised by a special resolution passed by the company in the general meeting;
(b) the resolution specifies the number of shares, current market price, consideration if any, and the class or classes of directors or employees
to whom such equity shares are to be issued;
(c) not less than one year has at the date of the issue elapsed since the date on which the company was entitled to commence business
(d) the sweat equity shares of a company whose shares are listed on a recognised stock exchange are issued in accordance with the regulations
made by the Securities Exchange Board of India in this behalf.
However, so long as the equity shares of the Company are not listed on any recognized stock exchange, the sweat equity shares are to be
issued in accordance with the guidelines as may be prescribed.
(2) All the limitations, restrictions and provisions relating to equity shares shall be applicable to such sweat equity shares issued under clause
(1).”
Power to issue share warrants
Article 68 provides that “The Company may issue warrants subject to and in accordance with the provisions of Section 114 and 115 of the Act
and accordingly the Board may in its discretion with respect to any share which is fully paid upon application in writing signed by the persons
registered as holder of the share and authenticated by such evidence (if any) as the Board may, from time to time, require as to the identity of
the person signing the application and on receiving the certificates (if any) of the share and the amount of the stamp duty on the warrant and
such fee as the Board may, from time to time, require, issue a share warrant.”
Deposit of Share Warrants
Article 69 provides that “(a) The bearer of a share warrant may, at any time, deposit the warrant at the office of the Company and so long as
the warrant remains so deposited, the depositor shall have the same right of signing a requisition for calling a meeting of the Company and of
attending and voting and exercising the other privileges of the member at any meeting held after the expiry of two clear days from the time of
deposit, as if his name were inserted in the Register of Members as the holder of the share included in the deposit warrant.
(b) Not more than one person shall be recognized as depositor of the share warrant.
(c) The Company shall, on two days’ written notice, return the deposited share warrant to the depositor;”
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Privileges and disabilities of the holders of share warrant
Article 70 provides that “(a) Subject as herein otherwise expressly provided, no person shall as bearer of a share warrant, sign a requisition for
calling a meeting of the Company or attend or vote or exercise any other privileges of a member at a meeting of the Company or be entitled to
receive any notice from the Company.
(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he were named in the
Register of members as the Holder of the Share included in the warrant and he shall be a member of the Company.”
Issue of new share warrant or coupon
Article 71 provides that “The Board may, from time to time, make bye-laws as to the terms on which (if it shall think fit), a new share warrant
or coupon maybe issued by way of renewal in case of defacement, loss or destruction.”
Conversion of Shares into Stock and reconversion
Article 72 provides that “Share may be converted into stock
The Company may, by Ordinary Resolution:
(a) convert any paid up share into stock; and
(b) reconvert any stock into paid-up shares of any denomination.”
Transfer of Stock
Article 73 provides that “The several holders of such stock may transfer their respective interest therein or any part thereof in the same
manner and subject to the same regulations under which the stock arose might, before the conversion, have been transferred or as near thereto
as circumstances admit.
PROVIDED THAT the Board may, from time to time, fix the minimum amount of stock transferable, so however that such minimum shall not
exceed the nominal amount of the shares from which the stock arose.”
Right of stockholders
Article 74 provides that “The holders of stock shall, according to the amount of stock held by them, have the same right, privileges and
advantages as regards dividends, voting at meeting of the Company and other matters, as if they held shares from which the stock arose, but
no such privilege or advantage (except participation in the dividends and profits of the Company and in the assets on winding up) shall be
conferred by an amount of stock which would not, if existing in shares, have conferred those privileges or advantages.”
Power of Borrow
Article 76 provides that “Subject to the provisions of Section 58A, 292 and 293 of the Act and of these Article, the Board of Directors may,
from time to time at its discretion by a resolution passed at a meeting of the Board, borrow, accept, deposits from members either in advance
of calls or otherwise and generally raise or borrow or secure the payment of any such sum or sums of money for the purpose of the Company
from any source. PROVIDED THAT, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary
loans obtained from the Company’s bankers in the ordinary course of business) exceeds the aggregate of the paid up capital of the Company
and its free reserves (not being reserves set apart for any specific purpose) the Board of Directors shall not borrow such money without the
sanction of the Company in general meeting. No debt incurred by the Company in excess of the limit imposed by this Article shall be valid or
effectual unless the lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by this Article had
been exceeded.”
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The payment or repayment of money borrowed
Article 77 provides that “The payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms
and conditions in all respects as the Board of Directors may think fit and in particular in pursuance of a resolution passed at a meeting of the
Board(and not by circular Resolution) by the issue of bonds, debentures or debenture-stock of the Company, charged upon all or any part of
the property of the Company, (both present and future) including its uncalled capital for the time being and the debentures and the debenture-
stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be
issued.”
Term of issue of debenture
Article 78 provides that “Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be
issued on condition that they shall be convertible into share of any denomination and with any privileges and conditions as to redemption,
surrender, drawing, allotment of shares, attending (but not voting) at General Meeting, appointment of Directors and otherwise, debentures
with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in General Meeting by a Special
Resolution.”
Mortgage of uncalled capital
Article 79 provides that “If any uncalled capital of the company is included in or charged by an mortgage or other security, the Directors may,
subject to the provisions of the Act and these Articles, make calls on the members in respect of such uncalled capital in trust for the person in
whose favour such mortgage or security executed.”
Statutory Meeting
Article 80 provides that “The Statutory Meeting shall be held in accordance with the provisions of Section 165 of the Act within a period of
not less than one month and not more than six months from the date on which the Company shall be entitled to commence business.”
Annual General Meeting
Article 81 provides that “The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to any other
Meeting in that year. All General Meetings other than Annual General Meetings shall be called Extra-ordinary General Meetings. An Annual
General Meeting of the company shall be held within six months after the expiry of each financial year, provided that not more than fifteen
months shall lapse between the date of the Annual General Meeting and that of next. Nothing contained in the foregoing provision shall be
taken as affecting the right conferred upon the Registrar under the provisions of section 166 (1) of the Act to extend the time within which any
Annual General Meeting may be held. Every Annual General Meeting shall be called for a time during business hours, on a day that is not a
public holiday and shall be held at the office of the company or at some other place within the city in which the Registered Office of the
Company is situated as the Board may determine and the notices calling the Meeting specify as the Annual General Meeting. The company
may in any one Annual General Meeting fix the time for its subsequent Annual General Meeting. Every member of the company shall be
entitled to attend either in person or by proxy and the Auditors of the company shall have the right to attend and to be heard at any General
Meeting, which he attends on any part of the business, which concerns him as Auditor. At every Annual General Meeting of the company
there shall be laid on the table the Director’s Report and Audited Statement of Accounts, the Proxy Register with proxies and the Register of
Director’s Share holding which Register shall remain open and accessible during the continuance of the Meeting.”
Extra-ordinary General Meeting
Article 83 provides that “All General Meetings other than Annual General Meetings shall be called Extra-ordinary General Meetings.”
Requisitionists’ Meeting
Article 84 provides that “(1) Subject to the provisions of Section 188 of the Act, the Directors shall on the requisition in writing of such
number of members as hereinafter specified and (unless the General Meeting otherwise resolves) at the expense of requisitionists:
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(a) give to the members of the Company entitled to receive notice of the next Annual General Meeting, notice of any resolution, which may
properly be moved and is intended to be moved at the meeting.
(b) circulate to members entitled to have notice of any general meeting sent to them, any statement of not more than one thousand words with
respect to the matter referred to in any proposed resolution or any business to be dealt with at the meeting.
(2) The number of members necessary for a requisition under clause (1) hereof shall be
(a) Such number of members as represent not less than one-twentieth of the total voting power of all the members having at the date of the
resolution a right to vote on the resolution or business to which the requisition related; or
(b) not less than one hundred member having the rights aforesaid and holding shares in the Company on which there has been paid up an
aggregate sum of not less than rupees one lakh in all.
(3) Notice of any such resolution shall be given and any such statement shall be circulated to members of the Company entitled to have notice
of the meeting sent to them by serving a copy of the resolution or statement on each member in any manner permitted by the Act for service of
notice of the meeting and notice of any such resolution shall be given to any other member of the Company be giving notice of the general
effect of the resolution in any manner permitted by the Act, for giving him notice of meeting of the Company. The copy of the resolutions
shall be served or notice of the effect of the resolution shall be given, as the case may be , in the same manner and so far as practicable, at the
same time as notice of the meeting and where it is not practicable for it to be served or given at that time, it shall be served or given as soon as
practicable thereafter.
(4) The Company shall not be bound under this Article to give notice of any resolution or to circulate any statement unless:
(a) a copy of requisition signed by the requisitionists (or two or more copies which between them contain the signature of all the
requisitionists) is deposited at the registered office of the Company.
(i) in the case of requisition, requiring notice resolution, not less than six weeks before the meeting;
(ii) in the case of any holder requisition, not less than two weeks before the meeting; and
(b) there is deposited or tendered with the requisition sum reasonably sufficient to meet the Company expenses in giving effect thereto.
PROVIDED THAT if after a copy of the requisition requiring notice of a resolution has been deposited at the registered office of the Company
and an Annual General Meeting is called for a date of six weeks or less after such copy has been deposited, the copy although not deposited
within the time required by this clause, shall be deemed to have been properly deposited for the purposes also thereof.
(5) The Company shall also not be bound under this Article to circulate any statement if, on the application either of the Company or of any
other person who claims to be aggrieved is satisfied that the rights conferred by this Article are being abused to secure needless publicity for
defamatory matter.
(6) Notwithstanding anything in these Articles, the business which maybe dealt with at an Annual General Meeting shall include any
resolution of which notice is given in accordance with this Article and for the purposes of this clause, notice shall be deemed to have been so
given, notwithstanding the accidental commission, in giving it, to one or more members.”
Extra-ordinary General Meeting by Board and by requisition
Article 85 (a) provides that “The Directors may, whenever they think fit, convene an Extra-Ordinary General Meeting and they shall on
requisition of the members as hereinafter provided, forthwith proceed to convene Extra-ordinary General Meeting of the Company.”
When a Director or Any Two Members May Call an Extra-Ordinary General Meeting
Article 85 (b) provides that “If at any time there are not within India sufficient Directors capable of acting to form a quorum or if the number
of Directors be reduced in number to less than the minimum number of Directors prescribed by these Articles and continuing Directors fail or
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neglect to increase the number of Directors to that number or to convene a general meeting, any Director or any two or more members of the
Company holding not less than one-tenth of the total paid up share capital of the Company may call an Extra-Ordinary General Meeting in the
same manner as nearly as possible as that in which meeting may be called by the Directors.”
Quorum
Article 92 provides that “Five members entitled to vote and present in person shall be quorum for General Meeting and no business shall be
transacted at the general meeting unless the quorum requisite be present at the commencement of the meeting. A body corporate being a
member shall be deemed to be personally present if it is represented in accordance with Section 187 of the Act. The President of India or the
Governor of a State being a member of the Company shall be deemed to be personally present if he is presented in accordance with Section
187A of the Act.”
If quorum not present when meeting to be dissolved and when to be adjourned
Article 93 provides that “If within half an hour from the time appointed for holding a meeting of the Company a quorum is not present, the
meeting if called by or upon the requisition of members shall stand adjourned to the same day in the next week or if that day is a public
holiday until the next succeeding day which is not a public holiday at the time and place or to such other day and at such other time and place
as the Board may determine. If at the adjourned meeting also a quorum is not present with half an hour from the time appointed for holding
the meeting, the members present shall be quorum and may transact the business for which the meeting was called.”
Resolutions passed at adjourned meeting
Article 94 provides that “Where a resolution is passed at an adjourned meeting of the Company, the resolution for all purposes, be treated as
having been passed on the date on which it was in fact passed and shall not be deemed to have been passed on any earlier date.”
Chairman of General Meeting
Article 95 provides that “At every General Meeting the Chair shall be taken by the Chairman of the Board of Directors. If at any
meeting, the Chairman of the Board of Directors be not present within ten minutes after the time appointed for holding the meeting or though
present, be unwilling to act as Chairman, the Vice-Chairman of the Board of Directors would act as Chairman of the meeting and if Vice-
Chairman of the Board of Directors be not present or though present, be unwilling to act as and in default of their doing so or if no Directors
shall be present and willing to take the Chair, then the members present shall choose one of themselves, being a member entitled to vote to be
Chairman.
(a) Act for resolution sufficiently done or passed in General Meeting by ordinary resolution unless otherwise require. Any Act or resolution
which, under the provisions of this Article or of the Act, is permitted or enquired to be done or passed by the Company in General Meeting
shall be sufficiently so done or passed if effected by an ordinary resolution unless either the Act or the Articles specifically require such act to
be done or resolution passed by a Special resolution.”
Chairman's casting vote
Article 102 provides that “In the case of equality of votes the Chairman shall both on a show of hands and a poll (if any) have a casting vote in
addition to the vote or votes to which he may be entitled as a member.”
Votes of Members
Member paying money in advance no to be entitled to vote in respect thereof
Article 106 provides that “A member paying the whole or a part of the amount remaining unpaid on any share held by him although on part of
that amount has been called up, shall not entitled to any voting rights in respect of the moneys so paid by him until the same would but for
such payment become presently payable.”
Article 106A provides that “The Company may pass a resolution by postal ballot in the manner prescribed by Section 192A of the Act and
such other applicable provisions of the Act. Notwithstanding anything contained in the provisions of the Act, the Company, being a listed
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Company, may, and in the case of resolutions relating to such business as the Central Government may be notification declare to be conducted
only by postal ballot, shall get any resolution passed by means of a postal ballot instead of transacting the business in a general meeting of the
Company.”
Restriction on exercise of voting rights of members who have not paid calls
Article 107 provides that “No member shall exercise any voting rights in respect of any shares registered in his name on which any calls or
other sums presently payable by him have not been paid or in regard to which the Company has exercised any right of lien.”
Number of votes to which member entitled
Article 108 provides that “Subject to the provisions of Article 106 every member of the Company, holding any equity share capital and
otherwise entitled to vote shall, on a show of hands when present in person (or being a body corporate present by a representative duly
authorised) have one vote on a poll, when present (including a body corporate by a duly authorised representative) or by an agent duly
authorised under a Power of Attorney or by proxy, his voting right shall be in proportion to his share of the paid-up equity share capital of the
Company. Provided however, if any preference share-holder be present at any meeting of the Company, save as provided in clause (b) of
such-section(2) of Section 87, he shall have a right to vote only on resolutions before the meeting which directly affect the rights attached to
his preference shares. A member is not prohibited from exercising his voting rights on the ground that he has not held his shares or interest in
the Company for any specified period proceeding the date on which the vote is taken.”
Voting in person or by proxy
Article 113 provides that “Subject to the provisions of these Articles, vote may be given either personally or by proxy. A body corporate
being a member may vote either by a proxy or by a representative duly authorised in accordance with Section 187 of the Act.”
Proxies
Article 115 provides that “Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint
another person (whether a member or not) as his proxy to attend and vote instead of himself PROVIDED ALWAYS that a proxy so appointed
shall not have any right whatever to speak at the meeting. Every notice convening a meeting of the Company shall state that a member
entitled to attend and vote is entitled to appoint one or more proxies.”
Chairman of any meeting to be the judge of validity of any vote
Article 122 provides that “The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting. The
Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll. The decision of the
Chairman shall be final and conclusive.”
Directors
Number of Directors
Article 124 provides that “Until otherwise determined by a General Meeting of the Company and subject to the provisions of Section 252 of
the Act, the number of Directors shall not be less than three and not more than twelve.”
Debenture Directors
Article 126 provides that “Any Trust Deed for securing debentures or debenture-stocks, may, if so arranged, provide for the appointment, from
time to time by the Trustees thereof or by the holders of debentures or debenture-stocks, of some person to be a Director of the Company and
may empower such Trustees or holder or debentures or debenture-stocks, from time to time, to remove and re-appoint any Director so
appointed. The Director appointed under Article is herein referred to as "Debenture Director" and the term "Debenture Director" means the
Director for the time being in office under this Article. The Debenture Director shall be liable to retire by rotation or be removed by the
Company. The Trust Deed may contain such ancillary provisions as may be arranged between the Company and the Trustees and all such
provisions shall have effect notwithstanding any of the other provisions herein contained.”
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Corporation Directors
Article 127 provides that “Any bond or any other writing giving security issued or executed by the company in favour of any Credit
Corporation or any agreement executed by the company in favour of a Credit Corporation may provide for the appointment of a Director (in
these presents referred to as "The Corporation Directors") for and on behalf of the holder of such bonds of such Credit Corporation for such
period as therein provided for not exceeding the period for which any amount may be outstanding under such bond or writing or agreement
and for removal from the office of such Director and on a casual vacancy being caused whet her by resignation, death removal or otherwise,
for the appointment of another Director in the vacant place. The Corporation Director shall not be liable to retire by rotation and subject to the
provisions of the Act be removed from his office by the company.”
Nominee Director
Article 128 provides that “(a) Notwithstanding anything to the contrary contained in these Articles, so long as any moneys remain owning by
the Company to Bank, Industrial Finance Corporation of India(IFCI),Industrial Credit and Investment Corporation of India Limited (ICICI)
The Industrial Development Bank of India (IDBI) or to any other Financing Company or so long as IFCI, ICICI, IDBI or any other Financing
Corporation or any other Financing Company or Body (each of which IFCI, ICICI, IDBI or any other Finance Corporation or Credit
Corporation or any other Financing Company or Body is hereinafter in this Article referred to as "the Corporation") continued to hold
debentures in the Company as a result of underwriting or by direct subscription or private placement or so long as the Corporation holds shares
in the Company as result of underwriting or direct subscription or so long as any liability of the Company arising out of any guarantee
furnished by the Corporation on behalf of the Company remains outstanding the Corporation shall have a right to appoint from time to time
any person or persons as a Director or Directors, Whole-time or non-Whole-time (which Director or Directors is/are hereinafter referred to as
"Nominee Director/s") on the Board of the Company and to the Company and to remove from such office any person or persons so appointed
and to appoint any person or persons in his or their place/s.
(b) The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the
Corporation, such Nominee Director/s shall not be required to hold any share qualification in the Company. Also at the option of the
Corporation, such Nominee Director/s shall not be liable to retirement by rotation, Subject as aforesaid the Nominee Director/s shall be
entitled to the same rights and privileges and be subject to the same obligation as any other Director of the Company.
(c) The Nominee Director/s so appointed shall hold the said office only so long as moneys remained owing by the Company to the
Corporation or so long as the Corporation or private placement or so long as the Corporation holds shares in the Company as a result of
underwriting or direct subscription or liability of the company arising out of any guarantee is outstanding and the Nominee Director/s so
appointed in exercise of the said power shall ipso facto vacate such office immediately on the moneys owing by the Company to the
Corporation is paid off or on the Corporation shall ceasing to hold debentures/shares in the Company or on the satisfaction of the liability of
the Company arising out of any guarantee furnished by the Corporation.
(d) The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all General Meeting, Board
meetings or the Committee of which the Nominee Director/s is/are member/s as also the minutes of such meetings. The Corporation shall also
be entitled to receive all such notice and minutes.
(e) The Company shall pay to the Nominee Director/s sitting fees and expenses which the other Directors of the Company are entitled but if
any others fees, commission, moneys or remuneration in any other form is payable to the Directors of the Company. The fees, commission,
moneys, remuneration in relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly be paid by the
company directly to the Corporation Any expenses that may be incurred by the Corporation or such Nominee Director/s in connection with
their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or as the case may be to such Nominee
Director/s. Provided that if any such Nominee Director/s is an officer of the Corporation , the sitting fees in relation to such Nominee
Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation.
(f) Provided also that in the event of the Nominee Director/s being appointed as whole time Director/s such Nominee Director/s shall exercise
such power and duties as may be approved by the Lenders and have such rights as are usually exercised or available to a whole time Director,
in the management of the affairs of the Borrower and such Nominee Director/s shall be entitled to receive any remuneration, fees, commission
and moneys as may be approved by the Lenders.”
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Limit on number of non-retiring Directors
Article 129 provides that “The provisions of Articles 124, 125 and 126 are subject to the provisions of Section 256 of the Act and number of
such Directors appointed under Article 132 shall not exceed in the aggregate one-third of the total number of Directors for the time being in
office.”
Qualification of shares
Article 133 provides that “A Director need not hold any qualification shares.”
Director's sitting fees
Article 134 provides that “The fees payable to a Director for attending Board Meeting shall be such sum as may be prescribed under Section
310 of the Act or may be prescribed by the Central Government from time to time for each of the meetings of the Board or a Committee
thereof and adjournments thereto attended by him. The Directors, subject to the sanction of the Central Government (if any required), may be
paid such higher fees as the company in General Meeting shall from time to time determine.”
Extra remuneration to Directors for special work
Article 135 provides that “Subject to the provisions of Section 198, 309,310,311 and 314 of the Act, if any Director, being willing shall be
called, upon to perform extra services (which expression shall include work done by a Director as a member of any committee formed by the
Directors or in relation to signing Share Certificates) or to make special exertions in going or residing out of his usual place of residence or
otherwise for any of the purposes of the Company, the Company shall remunerate the Director so doing either by a fixed sum or otherwise as
may be determined by the Directors and such remuneration may be either in addition to or in substitution for his share in the remuneration
above provided. The Directors (other than the Managing Director or any other Whole-time paid Director) shall also be entitled to further
remuneration by way of commission at the rate of 1 per cent of the net profits of the company calculated in accordance with the provisions of
the Companies Act and such remuneration shall be divided among the Directors (other than the Managing Director or Whole-time paid
Directors) in such proportion and manner as may be agreed upon between them and the Board of Directors and in the absence of agreement,
equally.”
Directors and Managing Director may contract with company
Article 138 provides that “Subject to the provisions of the Act, the Directors (including a Managing Director and Whole-time Director) shall
not be disqualified by reason of his or their office as such from holding office under the company or form contracting with the company either
as vendor, purchaser, lender, agent, broker, lessor or lessee or otherwise, nor shall any such contract or any contract or arrangement entered
into by or on behalf of the company with any Director or with any company or partnership, of or in which any Director shall be member or
otherwise interested be avoided, nor shall any Director so contracting or being such member or so interested be liable to account to the
company for any profit realised by such contract or arrangement by reason only of such Director holding that office or of the fiduciary
relation thereby established, but it is declared that the nature of his interest shall be disclosed as provided by Section 299 of the Act and in this
respect all the provisions of Sections 300 and 301 of the Act shall be duly observed and complied with.”
Rotation and Appointment of Directors
Rotation of Directors
Article 139 provides that “Not less than two-thirds of the total number of Director shall (a) be persons whose period of the office is liable to
termination by retirement of Directors by rotation and (b) save otherwise expressly provided in the Articles be appointed by the company in
General Meeting.”
Retirement of Directors
Article 140 provides that “Subject to the provisions of Articles 129 the non-retiring Directors should be appointed by the Board for such
period or periods as it may in its discretion deem appropriate.”
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Retirement of Directors
Article 141 provides that “Subject to the provisions of Section 256 of the Act and Articles 129 at every Annual General Meeting of the
Company, one-third of such of the Directors for the time being as are liable to retire by rotation or if their number is not three or a multiple of
three the number nearest to one-third shall retire from office. The Debenture Directors, Nominee Directors, Corporation Directors, subject to
Articles 126,127,128 and 146 Managing Directors, if any, shall not be subject to retirement under this Article and shall not be taken into
account in determining the number of Directors to retire by rotation. In these Articles, a "Retiring Director" means a Director retiring by
rotation.”
Eligibility for re-election
Article 143 provides that “A retiring Director shall be eligible for re-election and shall act as a Director throughout and till the conclusion of
the meeting at which he retires.”
Managing Director
Power to appoint Managing Director
Article 146 provides that “Subject to the provisions of Sections 267, 268, 269, 316 and 317 of the Act, the Board may, from time to time,
appoint one or more Directors to be Managing Director or Managing Directors or Whole-time Directors of the Company, either for a fixed
term of five years as to the period for which he or they is or are to hold such office and may, from time to time (subject to the provisions of
any contract between him or them and the company) remove or dismiss him or them from office and appoint another or others in his or their
place or places.”
Proceedings of the Board of Directors
Article 150 provides that “The Directors may meet together as a Board for the dispatch of business from time to time unless the Central
Government by virtue of the provision of Section 285 of the Act otherwise directs, shall so meet at least once in every three months and at
least four such meetings shall be held in every year. The Directors may adjourn and otherwise regulate their meetings as they think fit. The
provision of this Article shall not be deemed to have been contravened merely by reason of the fact that the meeting of the Board which had
been called in compliance with the terms of this Article could not be held for want of a quorum.”
Quorum
Article 151 provides that “(a) Subject to Section 287 of the Act, the quorum for a meeting of the Board of Directors shall be one-third of its
total strength (excluding Directors, if any, whose place may be vacant at the time and any fraction contained in that one-third being rounded
off as one) or two Directors whichever is higher.
PROVIDED THAT where at any time the number of interested Directors at any meeting exceeds or is equal to two-third of the total strength,
the number of the remaining Directors (that is to say, the number of remaining who are not interested) present at the meeting being not less
than two shall be the quorum during such time.
(b) For the purpose of clause (a):
(i) “Total Strength” means total strength of the Board of Directors of the Company determined in pursuance of the Act, after deducting
therefrom number of the Directors, if any, whose place may be vacant at the time; and
(ii) “Interested Directors” means any Director whose presence cannot, by reason of any provisions in the Act, count for the purpose of forming
a quorum at a meeting of the Board, at the time of the discussion or vote or any matter.
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Chairman of Meeting
Article 153 provides that “(a) The Directors from time to time elect one of their number to be the Chairman and one to be the Vice-Chairman,
if required of the Board of Directors and determine the period for which they have to hold such office, but if no such Chairman or Vice-
Chairman is elected, the Directors present shall choose one of their number to be the Chairman of such meeting.
(b) The Chairman of the Board of Directors shall be the Chairman of the Meeting of Directors and shall also preside over all General Meetings
of the company. Provided that if the Chairman of the Board of Directors is not present, the Vice-Chairman of the Board of Directors shall
preside the meeting and if the Vice-Chairman of the Board of Directors is also not present, the Directors present shall choose one of their
number to be the Chairman of such meeting.”
Questions at Board Meeting how decided
Article 154 provides that “Subject to the provisions of Sections 316, 375(5) and 386 of the Act, questions arising at any meeting of the Board
shall be decided by a majority of votes and in case of any equality of votes, the Chairman shall have a second or casting vote.”
Powers of Board Meeting
Article 155 provides that “A meeting of the Board of the Directors for the time being at which a quorum is present shall be competent to
exercise all or any of the authorities, powers and discretion which by or under the Act or these Articles or the regulations for the time being of
the Company are vested in or exercisable by the Board of Directors generally.
Directors may appoint committee
Article 156 provides that “The Board of Directors may subject to the provisions of Section 292 and other relevant provisions of the Act or
these Articles, delegate any of the powers other than the powers to make calls and to issue debentures to such committee or committees and
may from time to time revoke and discharge any such committee of the Board either wholly or in part and either as to the persons or purposes,
but every committee of the Board so formed shall in exercise of the powers so delegated conform to any regulation that may from time to time
be imposed on it by the Board of Directors. All acts done by any such committee of the Board in conformity with such regulations and in
fulfillment of the purpose of their appointments, but not otherwise, shall have the like force and effect, as if done by the Board.”
Powers of the Board
General Powers of Management vested in Directors
Article 160 provides that “The business of the Company shall be managed by the Directors who may exercise all such powers of the Company
and do all such acts and things as are not by the Act or any other Act or by the Memorandum or by the Articles of Company required to be
exercised by the Company in General Meeting, subject nevertheless to any regulation of these Articles or the provisions of the Act or any
other Act and to such regulation being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in
General Meeting but no regulations made by the Company in General Meeting shall invalidate any prior act of the Directors which would have
been valid if that regulation had not been made, provided that the Board of Directors shall not except with the consent of the Company in
General Meeting :
(a) Sell, lease or otherwise dispose off the whole or substantially the whole of the undertaking of the Company or where the Company owns
more than one undertaking, of the whole or substantially the whole of any such undertaking;
(b) Remit or give time for the payment of any debt due by a Director
(c) Invest, otherwise than in trust securities, the amount of compensation received by the Company in respect of the compulsory acquisition, of
any such undertaking as is referred to in clause (a) or of any premises or properties used for any such undertaking and without which it cannot
be carried on or can be carried on only with difficulty or only after a considerable time;
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(d) Borrow moneys, where moneys to be borrowed, together with the money already borrowed by the Company (apart from temporary loans
obtained from the Company's bankers in the ordinary course of business) will exceed the aggregate of the paid up capital of the Company and
its free reserves, that is to say, reserves not set apart for any specific purpose; or
(e) Contribution to charitable and other funds not directly relating to the business of the Company or the welfare of its employees any amounts
the aggregate of which will, in any financial year, exceed fifty thousand rupees or five per cent of its average net profits as determined in
accordance with the provisions of Sections 349 and 350 of the Act during the three financial years immediately preceding, whichever is
greater, provided that the Company in General Meeting or the Board of Directors shall not contribute any amounts to any political party or for
any political purpose to any individual or body;
(i) Provided that in respect of the matter referred to in clause (d) and (e), such consent shall be obtained by a resolution of the Company which
shall specify the total amount upto which moneys may be borrowed by the Board under clause (d) or as the case may be, total amount which
may be contributed to charitable or other funds in any financial year under clause (e).
(ii) Provided further that the expression "temporary loans" in clause (d) above shall mean loans repayable on demand or within six months
from the date of the loan such as short term cash credit arrangements, the discounting of bills and the issue of other short term loans of a
seasonal character, but does not include loans raised for the purpose of financing expenditure of a capital nature.”
Certain powers to be exercised by the Board only at meeting.
Article 161 provides that “(1) Without derogating from the powers vested in the Board of Directors under these Articles, the Board shall
exercise the following powers on behalf of the Company and they shall do so only by means of resolutions passed at the meeting of the Board
:
(a) The power to make calls on shareholders in respect of moneys unpaid on their shares;
(b) The power to issue debentures ;
(c) The power to borrow moneys otherwise than on debentures ;
(d) The power to invest the funds of the Company; and
(e) The power to make loans.
Provided that the Board may, by resolution passed at a meeting, delegate to any committee of Directors, the Managing Director or any other
principal officer of the Company, the powers specified in sub-clauses (c), (d) and (e) to the extent specified below.
(2) Every resolution delegating the power referred to in sub-clause (1)(c) shall specify the total amount outstanding at any one time, upto
which money may be borrowed by the delegate.
(3) Every resolution delegating the power referred to in sub-clause (1)(d) shall specify the total amount upto which the funds of the Company
may be invested and the nature of the investments which may be made by the delegate.
(4) Every resolution delegating the power referred to in sub-clause (1)(e) shall specify the total amount upto which loans may be made by the
delegate, the purpose for which the loans may be made and the maximum amount of loans which may be for each such purpose in individual
cases.”
Certain powers of the Board
Article 162 provides that “Without prejudice to the general powers conferred by the last preceding Article and so as not in any way to limit or
restrict those powers and without prejudice to the other powers conferred by these Articles but subject to the restrictions contained in the last
preceding Articles, it is hereby declared that the Directors shall have the following powers, that is to say, power :
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(1) To pay the costs, charges and expenses preliminary and incidental to the formation, promotion, establishment and registration of the
Company.
(2) To pay and charge to the Capital Account of the Company any commission or interest, lawfully payable thereout under the provisions of
Sections 76 and 208 of the Act.
(3) Subject to Sections 292 and 297 and other applicable provisions of the Act, to purchase or otherwise acquire for the Company any
property, rights or privileges which the Company is authorised to acquire at or for such price or consideration and generally on such terms and
conditions as they may think fit in any such purchase or other acquisition, accept such title as the Director may believe or may be advised to be
reasonably satisfactory.
(4) At their discretion and subject to the provisions of the Act, to pay for any property, rights or privileges by or services rendered to the
Company, either wholly or partially in cash or in shares, bonds, debentures, mortgages or other securities of the Company and any such shares
may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon and any such bonds, debentures,
mortgages or other securities as may be either specifically charged upon all or any part of the property of the Company and its uncalled capital
or not so charged.
(5) To secure the fulfillment of any contracts or engagements entered into by the Company by mortgage or charge of all or any of the property
of the Company and its uncalled capital for the time being or in such manner as they may think fit.
(6) To accept from any member, so far as may be permissible by law, a surrender of his shares or any part thereof, on such terms and
conditions as shall be agreed.
(7) To appoint any person to accept and hold in trust for the Company property belonging to the Company or in which it is interested or for
any other purposes and to execute and to do all such deeds and things as may be required in relation to any such trust and to provide for the
remuneration of such trustee or trustees.
(8) To institute, conduct, defend, compound or abandon any legal proceedings by or against the Company or its officer or otherwise
concerning the affairs of the Company and also to compound and allow time for payment on satisfaction of any debts due and of any claim or
demands by or against the Company and to refer any difference to arbitration and observe the terms of any awards made therein either
according to Indian Law or according to Foreign Law and either in India or abroad and observe and perform or challenge any award made
therein.
(9) To act on behalf of the Company in all matters relating to bankruptcy, insolvency, winding up and liquidation of Companies.
(10) To make and give receipts, release and other discharge for moneys payable to the Company and for the claims and demands of the
Company.
(11) Subject to the provisions of Sections 291(1), 295, 370 and 372 and other applicable provisions of the Act and these Articles, to invest and
deal with any moneys of the Company not immediately required for the purpose thereof, upon such security (not being the shares of this
Company) or without security and in such manner as they may think fit and from time to vary or realise such investment. Save as provided in
Section 49 of the Act, all investments shall be made and held in the Company's own name.
(12) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any
personal liability whether as principal or surety, for the benefit of the Company, such mortgage of the Company's property (present and future)
as they think fit and any such mortgage may contain a power of sale and other powers, provisions, covenants and agreements as shall be
agreed upon.
(13) To open bank accounts and to determine from time to time who shall be entitled to sign, on the Company's behalf, bills, notes, receipt,
acceptance, endorsements, cheques, dividend warrants, release, contracts and documents and to give the necessary authority for such purposes.
(14) To distribute by way of bonus amongst the staff of the Company a share or shares in the profits of the Company and do give to any
Director, officer or other person employed by the Company a commission on the profits of any particular business and or transaction and to
charge such bonus or commission as part of working expenses of the Company.
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(15) To provide for the welfare of Directors or Ex-Directors or employees or ex-employees of the Company and the wives, widows and
families of the dependents or connections of such persons by building or contributing to the building of houses, dwellings or chawls or by
grants of money, pension, gratuities, allowances, bonus or other payments or by creating and from time to time, subscribing or contributing to
provident and other associations, institutions and by providing or subscribing or contributing towards places of interests and recreation,
hospitals, dispensaries, medical and other attendance and other assistance as the Board shall think fit and subject to the provisions of Section
293(1)(e) of the Act, to subscribe or contribute or otherwise to assist or to guarantee money to charitable, benevolent, religious, scientific,
national or other institutions or objects which shall have any moral or other claim to support or aid by the Company either by reason of locality
of operation or the public and general utility or otherwise.
(16) Before recommending any dividend, to set aside, out of the profits of the Company, such sums as they may think proper for depreciation
or the depreciation fund or to an insurance fund or as a reserve fund or sinking fund or any special or other fund or funds or account or
accounts to meet contingencies or to repay redeemable preference shares, debentures or debenture-stock or for special dividends or for
equalising dividends for repairing, improving, extending and maintaining any part of the property of the Company and such other purposes
(including the purposes referred to in the preceding clause) as the Board may, in their absolute discretion think conducive to the interest of the
company and subject to Section 292 of the Act, to invest the several sums so set aside or so much thereof as required to be invested, upon such
investments (other than share of this Company) as they may think fit and from time to time to deal with and vary such investments and dispose
off and apply and expend all or any part thereof for the benefit of the Company, in such manner and for such purposes as the Board in their
absolute discretion think conducive to the interest of the Company notwithstanding that the matters to which the Board apply or upon which
they expend the same or any part thereof or upon which the capital moneys of the Company might rightly be applied or expended and to divide
the General Reserve or Reserve Fund into such special funds as the Board may think fit with full power to transfer the whole or any portion of
a Reserve Fund to another Reserve Fund and/or division of a Reserve Fund and with full power to employ the assets constituting all or any of
the above funds including the depreciation fund in the business of the Company or in purchase or repayment of redeemable preference shares,
debentures or debenture-stock and without being bound to keep the same separate from the other assets and without being bound to pay
interest on the same with power however to the Board at their discretion to pay or allow to the credit of such funds interest at such rate as the
Board think proper.
(17) To appoint and at their discretion remove or suspend such general managers, managers, secretaries, assistants, supervisors, scientists,
technicians, engineers, consultants, legal, medical or economic advisers, research workers, labourers, clerks, agents and servants for
permanent, temporary or special services as they may from time to time think fit and to determine their powers and duties and to fix their
salaries or emoluments or remuneration and acquire security in such instances and to such amounts as they may think fit and also from time to
time provide for the management and transactions of the affairs of the company in any specified locality in India or elsewhere in such manner
as they think fit.
(18) From time to time and at any time to establish any local Board for managing of the affairs of the Company in any specified locality in
India or elsewhere and to appoint any person to be members of such local Board or managers or agencies and to fix their remuneration.
(19) Subject to Section 292 of the Act, from time to time and at any time, to delegate to any persons so appointed any of the powers,
authorities and discretion for the time being vested in the Board, other than their powers to make calls or to make loans or borrow moneys and
to authorise the members for the time being of such local Board or any of them to fill up any vacancies therein and to act notwithstanding
vacancies and such appointment or delegation may be made on such terms subject to such conditions as the Board may think fit and the Board
may at any time remove any person so appointed and may annul or vary any such delegation.
(20) At any time and from time to time by power of Attorney under the Seal of the Company, to appoint any person or persons to be the
Attorney or Attorneys of the Company, for such purposes and with such powers, authorities and discretion (not exceeding those vested in or
exercisable by the Board under these presents and excluding the power to make calls and excluding also, except in their limits authorised by
the Board, the power to make loans and borrow moneys) and for such period and subject to such conditions as the Board may from time to
time think fit and any such appointments may (if the Board thinks fit) be made in favour of the members of any local Board established as
aforesaid or in favour of any Company or the shareholders, Directors, Nominees or Managers of any Company or firm or otherwise in favour
of any fluctuating body or persons whether nominated directly or indirectly by the Board and any such power of Attorney may contain such
powers for the protection of convenience of persons dealing with such Attorneys as the Board may think fit and may contain powers enabling
any such delegating Attorneys as aforesaid to sub-delegate all or any of the powers, authorities and discretion for the time being vested in
them.
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(21) Subject to Sections 294, 297, 300 and other applicable provisions of the Act, for or in relation to any of the matters aforesaid or otherwise
for the purposes of the Company, to enter into all such negotiations and contracts and rescind and vary all such contracts and execute and do
all such acts, deeds and things in the name and on behalf of the company as they may consider expedient.
(22) From time to time make, vary and repeal bye-laws for the regulations of the business of the Company, its officers and servants.
(23) To purchase or otherwise acquire any lands, buildings, machinery, premises, hereditaments, property, effects, assets, rights, credits,
royalties, business and goodwill of any Joint Stock Company carrying on the business which the Company is authorised to carry on in any
part of India.
(24) To purchase, take on lease for any term of years or otherwise acquire any factories, or any land or lands, with or without buildings and out
houses thereon, situate in any part of India, at such price or rent and under and subject to such terms and conditions as the Directors may think
fit and in any such purchase, lease or other acquisition to accept such title as the Directors may believe or may be advised to be reasonably
satisfactory.
(25) To insure and keep insured against loss or damage by fire or otherwise for such period and to such extent as it may think proper all or any
part of the buildings, machinery, goods, stores, produce and other movable property of the Company, either separately or co-jointly, also to
insure all or any portion of the goods, produce, machinery and other articles imported or exported by the Company and to sell, assign,
surrender or discontinue any policies of assurance effected in pursuance of this power.
(26) To purchase or otherwise acquire or obtain license for the use of and to sell, exchange or grant license for the use of any trademark,
patent, invention or technical know-how.
(27) To sell from time to time any articles, materials, machinery, plants, stores and other articles and things belonging to the Company as the
Board may think proper and to manufacture, prepare and sell waste and bye-products.
(28) From time to time to extend any business any undertaking of the Company by adding, altering or enlarging all or any of the buildings,
factories, workshops, premises, plant and machinery, for the time being the property of or in the possession of the Company or by erecting
new or additional building and to expend such sum of money for the purpose aforesaid or any of them as may be thought necessary or
expedient.
(29) To undertake on behalf of the Company any payment of all rents and the performance of the convenants, conditions and agreements
contained in or reserved by any lease that may be granted or assigned to or otherwise acquired by the Company and to purchase the reversion
or reversions and otherwise to acquire the free hold simple of all or any of the lands of the Company for the time being held under lease or for
an estate less than free hold estate.
(30) To improve, manage, develop, exchange, lease, sell, resell and repurchase, dispose off, deal or otherwise turn to account, and property
(movable or immovable) or any rights or privileges belonging to or at the disposal of the Company or in which the Company is interested.
(31) To let, sell or otherwise dispose off, subject to the provisions of Section 293 of the Act and of the other Articles, any property of the
Company, either absolutely or conditionally and in such manner and upon such terms and conditions in all respects as it thinks fit and to
accept payment of satisfaction for the same in cash or otherwise as it thinks fit.
(32) Generally, subject to the provisions of the Act and these Articles, to delegate the powers, authorise and discretion vested in the Directors
to any person, firm, Company or fluctuating body of persons as aforesaid.”
The Seal
The Seal its custody and use
Article 167 provides that “(a)The Board of Directors shall provide a Common Seal for the purpose of the Company and shall have power from
time to time to destroy the same and substitute a new seal in lieu thereof and the Board shall provide for the safe custody of the Seal for the
time being, under such regulations as the Board may prescribe.
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(b) The Seal shall not be affixed to any instrument except by the authority of the Board of Directors or a Committee of the Board previously
given and in the presence of at least two Directors of the Company or at least one Director and Secretary or any other person duly authorised
by the Board, both of whom shall sign every instrument to which the seal is affixed. Provided further that the certificates of shares or
debentures shall be sealed in the manner and in conformity with the provisions of the Companies (Issue of Share Certificates) Rules, 1960 and
their statutory modifications for the time being in force.
Dividend
Division of profits
Article 168 provides that “(a) Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall
be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid but if and so long
as nothing is paid upon any shares in the Company, dividends may be declared and paid according to the amounts of the shares.
(b) No amount paid or credited as paid on a share in advance of calls shall be treated for the purpose of this regulation as paid on the shares.”
The Company in General Meeting may declare dividends
Article 169 provides that “The Company in General Meeting may declare dividends, to be paid to members according to their respective rights
and interest in the profits and may fix the time for payment and the Company shall comply with the provisions of Section 207 of the Act, but
no dividends shall exceed the amount recommended by the Board of Directors but the Company may declare a smaller dividend in General
Meeting.”
Dividend out of profits only
Article 170 provides that “No dividend shall be payable except out of profits of the Company arrived at in the manner provided for in Section
205 of the Act.”
Interim Dividend
Article 171 provides that “The Board of Directors may from time to time pay to the members such interim dividends as in their judgment the
position of the Company justifies.”
Debts may be deducted
Article 172(a) provides that “The Directors may retain any dividends on which the Company has a lien and may apply the same in or towards
the satisfaction of the debts, liabilities or engagements in respect of which the lien exists.”
Company may retain dividends
Article 172(b) provides that “The Board of Directors may retain the dividend payable upon shares in respect of which any person is under the
transmission Article entitled to become a member or which any person under that Article is entitled to transfer until such person shall become
a member or shall duly transfer the same.“
No member to receive dividend whilst indebted to the Company and the Company’s right of reimbursement thereof
Article 175 provides that “No member shall be entitled to receive payment of any interest or dividend or bonus in respect of his share or
shares, whilst any money may be due or owing from him to the Company in respect of such share or shares (or otherwise however either alone
or jointly with any other person or persons) and the Board of Directors may deduct from the interest or dividend to any member, all such sums
of money so due from him to the Company.”
Effect of Transfer of shares
Article 176 provides that “A transfer of shares shall not pass the right to any dividend declared therein before the registration of the transfer.”
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Dividend to joint holders
Article 177 provides that “Any one of several persons who are registered as joint holders of any share may give effectual receipts for all
dividends or bonus and payments on account of dividends in respect of each shares.”
Capitalisation
Article 182 provides that “(1) The Company in General Meeting may, upon the recommendation of the Board, resolve:
(a) that it is desirable to capitalize any part of the amount for the time being standing to the credit of the Company’s reserve accounts or to the
credit of the profit and loss account or otherwise available for distribution; and
(b) that such sum be accordingly set free for distribution in the manner specified in clause (2) amongst the members who would have been
entitled thereto, if distributed by way of dividend and in the same proportions.
(2) The sum aforesaid shall not be paid in cash but shall be applied, subject to the provision contained in clause (3) either in or towards:
(i) paying up any amount for the time being unpaid on any shares held by such members respectively.
(ii) paying up in full unissued shares of the Company to be allocated and distributed, credited as fully paid up to and amongst members in the
proportions aforesaid; or
(iii) partly in the way specified in such clause (i) and partly in that specified in sub-clause (ii).
(3) A share premium account and a capital redemption reserve account may, for the purpose of this regulation, only be applied in the paying
up of unissued shares to be issued to members of the Company as fully paid bonus shares.
(4) The Board shall give effect to the resolution passed by the Company in pursuance of this regulation.”
Fractional certificates
Article 183 provides that “ (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall
(a) make all appropriations and applications of the undivided profits resolved to be capitalized thereby and all allotments and issues of fully
paid shares and
(b) generally do all acts and things required to give effect thereto
(2) The Board shall have full power:
(a) to make such provision, by the issue of fractional cash certificate or by payment in cash or otherwise as it think fit, in the case of shares
becoming distributable in fractions, also
(b) to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing for the
allotment to them respectively credited as fully paid up, of any further shares to which they may be entitled upon such capitalization or (as the
case may require) for the payment by the Company on their behalf, by the application thereof of either respective proportions of the profits
resolved to be capitalized of the amounts remaining unpaid on their existing shares.
(3) Any agreement made under such authority shall be effective and binding on all such members.
(4) That for the purpose of giving effect to any resolution, under the preceding paragraph of this Article, the Directors may give such
directions as may be necessary and settle any question of difficulties that may arise in regard to any issue including distribution of new equity
shares and fractional certificates as they think fit.”
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Accounts
Article 184 provides that “ Books to be kept
(1) The Company shall keep at its registered office proper books of account as would give a true and fair view to the state of affairs of the
Company or its transaction with respect to:
(a) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure take place;
(b) all sales and purchases of goods by the Company;
(c) the assets and liabilities of the Company; and
(d) if so required by the Central Government, such particulars relating to utilization of material or labour or other items of cost as may be
prescribed by that Government.
Provided that all or any of the books of account aforesaid may be kept at such other place in India as the Board of Directors may decide and
when the Board of Directors so decides, the Company shall, within seven days of the decision file with the Registrar a notice in writing giving
the full address of that other place.
(2) Where the Company has branch office, whether in or outside India, the Company shall be deemed to have complied with the provisions of
clause (1) if proper books of account relating to the transactions effected at the branch are kept at that office and proper summarised returns,
made upto date at intervals of not more than three months, are sent by the branch office to the Company at its registered office or the other
place referred to in clause (1). The books of account and other books and papers shall be open to inspection by any Director during business
hours.”
Accounts to be audited
Article 187 provides that “Once at least in every year the accounts of the Company shall be examined, balanced and audited and the
correctness of the Profit and Loss Account and Balance Sheet ascertained by one or more Auditor or Auditors.”
Winding Up
Distribution of Assets
Article 195 provides that “If the Company shall be wound up and the assets available for distribution among the members as such shall be
insufficient to repay the whole of the paid up capital, such assets shall be distributed so that as nearly as may be the losses shall be borne by
the members in the proportion to the capital paid up or which ought to have been paid up at the commencement of winding up on the shares
held by them respectively and if in the winding up, the assets available for distribution among the members shall be more than sufficient to
repay the whole of the capital paid at the commencement of the winding up, the excess shall be distributed amongst members in proportion to
the capital at the commencement of the winding up, paid up or which ought to have been paid up on the shares held by them respectively. But
this article is to be without prejudice to the rights of the holders of shares issued upon special terms and conditions.”
Distribution in specie or kind
Article 196 provides that “(a) If the Company shall be wound up, whether voluntarily or otherwise, the liquidator may, with the sanction of a
special resolution, divide amongst the contributories in specie or kind, any part of the assets of the Company and may with the like sanction
vest any part of the assets of the Company in Trustees upon such trusts for the benefit of the contributories or any of them as the Liquidator,
with the like sanction, shall think fit.
(b) If thought expedient any such division may subject to the provisions of the Act be otherwise than in accordance with the legal rights of the
contributories (except where unalterably fixed by the Memorandum of Association) and in particular any class may be given preferential or
special rights or may be excluded altogether or in part but in case any division otherwise than in accordance with the legal rights of the
contributories, shall be determined on any contributory who would be prejudicial thereby shall have a right to dissent any ancillary rights as if
such determination were a special resolution passed pursuant to Section 494 of the Act.
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(c) In case any shares to be divided as aforesaid involve a liability to calls or otherwise, any person entitled under such division to any of the
said shares may within ten days after the passing of the special resolution by notice in writing direct the liquidator to sell his proportion and
pay him the net proceeds and the liquidator shall, if practicable, act accordingly.”
Directors and other’s right to indemnity
Article 197 provides that “Subject to the provisions of Section 201 of the Act, every Director or officer or servant of the Company or any
person (whether an officer of the Company or not) employed by the Company as auditor, shall be indemnified by the Company against and it
shall be the duty of the Directors out of the funds of the Company, to pay all costs, charges, losses and damages which any such person may
incur or become liable to by reason of any contract entered into or any act, deed, matter or thing done, concurred in or omitted to be done by
him in any way in or about the execution or discharge of his duties or supposed duties (except such, if any, as he shall incur or sustain through
or by his own wrongful act, neglect or default including expenses and in particular and so as not to limit the generality of the foregoing
provisions against all liabilities incurred by him as such Director, Officer or Auditor or other Officer of the Company in defending any
proceedings whether civil or criminal in which judgement is given in his favour or in which he is acquitted or in connection with any
application under Section 633 of the Act in which relief is granted to him by the Court.”
Director, Officer not responsible for acts of others
Article 198 provides that “Subject to the provisions of Section 201 of the Act, no Director, Auditor or other Officer of the Company shall be
liable for the acts, receipts, neglects or defaults of any other Director or Officer or for joining in any receipt or other act for conformity or for
any loss or expenses happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the
Directors for or on behalf of the Company or for the insufficiency or deficiency of any security in or upon which any of the money of the
Company shall be invested or for any loss or damages arising from the insolvency or tortuous act of any person, firm or Company to or with
whom any moneys, securities or effects shall be entrusted or deposited or any loss occasioned by any error of judgement, omission, default or
oversight on his part or for any other loss, damage or misfortune whatever shall happen in relation to execution of the duties of his office or in
relation thereto unless the same shall happen through his own dishonesty.”
Secrecy Clause
Article 199 provides that “Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee, Officer, servant, Agent,
Accountant or other person employed in the business of the Company shall, if so required by the Director, before entering upon his duties, sign
a declaration pledging himself to observe a strict secrecy respecting all transactions and affairs of the Company with the customers and the
state of the accounts with individuals and in matter thereto and shall, by such declaration pledge himself not to reveal any of the matters which
may come to his knowledge in the discharge of his duties, except when required to do so by the directors or by law or by the person to whom
such matters relate and except so far as may be necessary in order to comply with any of provisions in these presents contained.”
No member to enter the premises of the Company without permission
Article 200 provides that “No member or other person (not being a Director) shall be entitled to visit or inspect any property or premises of the
Company without the permission of the Board of Directors or Managing Director or to inquire discovery of or any information respecting any
details of the Company’s trading or any matter which is or may be in the nature of the trade secret, mystery of trade, secret process or any
other matter which relate to the conduct of the business of the Company and which in the opinion of the Directors, it would be inexpedient in
the interest of the Company to disclose.”
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SECTION IX: OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The copies of the following contracts which have been entered, or are to be entered into by our Company (not being contracts entered into in the
ordinary course of business carried on by our Company or contracts entered into more than two years before the date of this Letter of Offer)
which are or may be deemed material have been attached to the copy of the Letter of Offer delivered to the RoC for registration. Copies of the
abovementioned contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office between 10
a.m. and 5 p.m. on all Working Days until the Bid/Issue Closing Date.
A. Material Contracts for the Issue
1. Engagement Letter dated February 8, 2013 between our Company and the LM.
2. Escrow Agreement dated July 1, 2013 between our Company, the LM, the Banker to the Issue and the Registrar to the Issue.
3. Monitoring Agency Agreement dated July 1, 2013 between our Company and Axis Bank Limited
4. Issue Agreement dated March 8, 2013 between our Company and the LM.
5. Memorandum of Understanding dated March 8, 2013 between our Company and the Registrar to the Issue.
B. Material Documents
1. Certified copies of the updated Memorandum and Articles of Association of our Company as amended.
2. Certificate of Incorporation dated October 5, 2009.
3. Prospectus of our Company dated November 21, 2000.
4. Consents of our Directors, Company Secretary and Compliance Officer, Auditors, Lead Manager to the Issue, Lenders, Legal
Counsel, Sandeep S. Shah and Associates, Chartered Accountants and the Registrar to the Issue to include their names in this
Letter of Offer to act in their respective capacities, as applicable.
5. Resolution of our Board of Directors dated July 25, 2012 authorising the Issue and other related matters.
6. Resolution of our Board of Directors dated July 24, 2013 approving the Letter of Offer.
7. The Report of the Auditors being, B S R & Co. and Chaturvedi & Shah, as set out herein dated July 3, 2013 in relation to the
audited financial information of our Company.
8. Annual Reports of our Company for the Fiscals 2008, 2009, 2010 and 2011 and 2012 and the condensed financial statements
of our Company for the six months ended March 31, 2013.
9. The Statement of Tax Benefits dated June 29, 2013 from Jitendra Sanghavi & Co., Chartered Accountants.
10. Due Diligence Certificate dated March 11, 2013 addressed to SEBI from the LM.
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11. In principle listing approvals dated April 18, 2013 and April 10, 2013 issued by BSE and NSE respectively.
12. The Service Agreement dated July 1, 2011 entered between our Company with Ashish Agarwal.
Any of the contracts or documents mentioned in this Letter of Offer may be amended or modified at any time if so required in the of our
Company or if required by the other parties, without reference to the Equity Shareholders, subject to compliance with applicable law.
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DECLARATION
No statement made in this Letter of Offer contravenes any of the provisions of the Companies Act and the rules made thereunder. All the legal
requirements connected with the Issue as also the guidelines, instructions etc. issued by SEBI, Government and any other competent authority in
this behalf, have been duly complied with. We further certify that all the statements in this Letter of Offer are true and correct.
Signed by the Directors of our Company
Gautam Doshi
__________________________________________
Amit Khanna
__________________________________________
Sujal Shah
__________________________________________
Anil Sekhri
__________________________________________
Prasoon Joshi
__________________________________________
Venkatesh Roddam
Chief Executive Officer
__________________________________________
Ashish Agarwal
Company Secretary & Manager
__________________________________________
Mohan Umrotkar
Chief Financial Officer
__________________________________________
Date: July 24, 2013 Place: Mumbai