MANAGEMENT DISCUSSION AND ANALYSIS 1. Industry Structure and Development Indian Media & Entertainment Industry has earned an estimated revenue of INR 102600 Crore in the year 2014 with a growth of 11.7% over the brvious year. The industry is expected to log in a CAGR of over 14% during the next 5 years and its total revenue is set to be INR 196400 Crore by the year 2019. However, surprisingly the Indian Film Industry hardly registered any growth during the year 2014 with its total revenue remaining more or less stagnant at Rs. 12640 Crore as compared to Rs. 12530 Crore in the brvious year. 2. Outlook for Company (i) Post Production Your Company is gradually moving out of the Post Production activity and as such your Company does not foresee any growth in income from the said activity. (ii) Trading in IPR of Films The Company has not acquired any new rights of films. Apart from revenue from exploiting the rights of films which the company is already holding, your Company does not expect any significant contribution to its revenue from this business. (iii) Film & TV Serial Production Your company's film project titled "Action Jackson" directed by Director Prabhu Deva starring Ajay Devgn, Sonakshi Sinha, Yami Gautam and with music by Himesh Reshammiya, was released in December, 2014. The film did not do good business at the Box Office. However, since your Company had already sold various rights of the film to Eros International Media Ltd. the Company was able to restrict its loss from the said film to Rs. 2.55 Crore. For the time being your Company has put on hold all its Film Projects and as such the Company does not expect any revenue from Film production and distribution business. Similarly the Company does not have any ongoing TV project, whereby no revenue is expected from the said activity. 3. Opportunities, Threats and Challenges (i) Opportunities: With budget of films increasing day by day and growing influence of studios in film production business, your Company is finding it difficult to make its brsence felt in the film production & TV production business. At least for a short term period your Company does not foresee any future in the media and entertainment industry. Your Company is however exploring other business opportunities in the field of dealing in all kinds of plastic raw materials and electronic goods. A detailed business plan is being worked out and your Company expects to roll out its new business activity in the second half of current financial year. (ii) Threats and Challenges: Indian Economy seems to be on a strong footing and is estimated to grow at about 8 to 8.5% during the year 2016. The threat of global slowdown continues to loom large. However, with stable government at the centre, improvement business sentiment and policy reforms already announced, the prospects for business are bright and your Company will be making all efforts to take advantage of the situation. 4. Internal Control System The Company has adequate internal control system to ensure operational efficiency and compliance of laws and regulations. The internal control system is reviewed by the Audit Committee from time to time and its suggestions, if any, are implemented. The Company has appointed a qualified Chartered Accountant as Internal Auditor, who submits his report on a quarterly basis. Observations of Internal Auditor are noted and wherever necessary corrective steps are taken. 5. Financial Performance with respect to Operational Performance (i) Sales Income from post production activity declined from Rs. 29.63 Lac in the brvious year to Rs. 22.21 Lac in the current year. The Company did not earn any Income from Trading in IPR of commercial films and sale of DVD / VCD which was at Rs. 16.20 Lac in the brvious year. Income from Film Production and TV Serials was at Rs. 8,573.18 Lac as compared to Rs. 443.44 Lac in the brvious year. (ii) Operating Profit, Finance Charges, Debrciation and Net Profit The Company suffered an operating loss of Rs. 239.18 Lac during the year as against operating loss of Rs.17.79 Lac in the brvious year. Finance charges during the year were lower at Rs. 3.16 Lac (Previous Year Rs. 6.75 Lac). After providing for Debrciation of Rs. 20.41 Lac (Previous Year Rs. 27.42 Lac), and after providing for current taxation of Rs. Nil , Deferred Tax of Rs. Nil there was a Net Loss of Rs. 262.75 Lac as against Net Loss of Rs. 50.72 Lac in the brvious year. (iii) Capital Investment During the year ended on 31st March, 2015 capital investment of Rs. 2.08 Lac was made out of own funds. (iv) Working Capital The Company was enjoying working capital facilities of Rs. 300 Lac during the year ended on 31st March, 2015. The entire limit remained unutilized for most of the year under review. 6. Human Resources The Company has maintained peaceful and cordial relationship with the employees. Cautionary Statement Statements in this report on Management Discussion and Analysis describing the Company's objectives, estimates and expectations are "forward looking" statements. These statements are based on certain assumptions and expectations of future events. The actual results may differ materially from those exbrssed or implied. Important factors that could make a difference to the Company's operations include economic conditions affecting the Entertainment Industry, changes in government regulations, tax regimes, economic developments within India and outside the country and other factors such as litigations and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. |