Mar 31, 2018
BOARDS REPORT & MANAGEMENT DISCUSSION AND ANALYSIS
To
The Members
Tips Industries Limited
The Directors are pleased to present the 22nd Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended March 31, 2018. The Management Discussion and Analysis is also included in this Report.
OVERVIEW OF THE ECONOMY
India has emerged as the fastest-growing major economy in the world as per the Central Statistics Organization (CSO) and International Monetary Fund (IMF) and it is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. India''s GDP is estimated to have increased to 6.6 percent in FY 2017-18 and is expected to grow at 7.3 percent in FY 2018-19.
The calendar year 2017 was a great year for the Indian economy. Retail inflation was the lowest in almost four decades, the rupee strengthened against the US dollar for the first time in seven years and several reforms such as the Goods and Services Tax (GST), recapitalization of banks and the Insolvency and Bankruptcy Code were implemented. After enjoying the status of the world''s fastest-growing major economy for a couple of years, India was overtaken by China in 2018.
THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY
The Year 2017 has been an eventful year for the Indian Media & Entertainment (M&E) industry. The Indian M&E industry witnessed another year of all-round growth. The Indian M&E sector reached Rs,1.5 trillion (USD 22.7 billion) in 2017, a growth of almost 13 percent over 2016, according to FICCI-KPMG Report.
Segment |
CY2016 |
CY2017 |
CY2018E |
CY2020E |
CAGR 2016 - 20 |
Television |
594 |
660 |
734 |
862 |
9.8% |
|
296 |
303 |
331 |
369 |
5.7% |
Filmed entertainment |
122 |
156 |
166 |
192 |
11.9% |
Digital media |
92 |
119 |
151 |
224 |
24.9% |
Animation and VFX |
54 |
67 |
80 |
114 |
20.4% |
Live events |
56 |
65 |
77 |
109 |
18.0% |
Online gaming |
26 |
30 |
40 |
68 |
27.5% |
Out of Home media |
32 |
34 |
37 |
43 |
7.7% |
Radio |
24 |
26 |
28 |
34 |
8.6% |
Music |
12 |
13 |
14 |
18 |
10.6% |
Total |
1,308 |
1,473 |
1,660 |
2,032 |
11.6% |
All figures are gross of taxes (Rs,. in billion)
Source: KPMG India - FICCI Media and Entertainment Report 2017
Television continued its strong run, on the back of digitization of television homes, and tent-pole properties like the IPL and non-fiction programming, particularly in regional languages. The film segment also led on the growth mainly due to the international revenues generated by Indian films and increased technical competence in the segment with higher investment in VFX, Animation and Post production in lines with global trends.
Print accounted for the second-largest share of the Indian M&E sector, growing at 3 percent to reach Rs,303 billion in 2017. The Events segment continued its strong run, supported by increased below-the-line spends across Tier II and III cities, growth in sports events, premium properties, and activations.
The advent of large OTT platforms in India such as Google, Netflix, Amazon, Eros Now, Jio Cinema etc., have significantly increased the demand for films'' digital rights. Digital revenue generated Rs,8.5 billion for the film segment in 2017, an increase of 40 percent over 2016. Netflix has grown from zero to more than 117 million streaming customers globally over the last decade.
India has now overtaken the US to become the world''s second-largest smartphone market after China. The continuous growth of digital infrastructure and positive policy implementations by the Government have paved the way for the future growth of digital music. 93 percent of people reported using mobile devices for music consumption in 2017, a rise from 85 percent in 2016, according to the Report.
FILM
According to FICCI-KPMG Report, the Indian film industry witnessed a growth of 27 percent due to a combination of high growth in overseas theatrical releases (particularly in China), growth in satellite rights values and domestic box office collections. All sub-segments, with the exception of home video, grew, and the film segment reached Rs,156 billion in 2017. The success in international markets indicates a promising future.
Revenues |
2016 |
2017 |
2018E |
2020E 1 |
Domestic theatricals |
85.6 |
96.3 |
103.0 |
118.0 |
Overseas theatricals |
8.5 |
25.0 |
25.0 |
28.0 |
Broadcast rights |
16.0 |
19.0 |
20.0 |
22.0 |
Digital/OTT rights |
6.0 |
8.5 |
10.0 |
14.5 |
In-cinema advertising |
5.9 |
6.4 |
7.5 |
9.0 |
Home Video |
0.4 |
0.3 |
0.2 |
0.2 |
Total |
122.4 |
155.5 |
165.7 |
191.7 |
(Gross of taxes, Rs, in billion)
Source: KPMG India - FICCI Media and Enlerlainmenl Report 2017
The Indian film production industry has immensely benefited over the past decade due to multiplex proliferation, decline in piracy due to digitized delivery and growth of regional cinema. Digital movie rights and international box office revenue streams have significantly strengthened the economics for Indian movie producers. However, the domestic theatrical collection has been growing at a slower pace even as multiplexes continue to expand. While on the one hand, top movies are taking away a larger share, on the other, niche content is getting wider acceptance from the audience. For some small budget niche movies, revenue from the sale of digital rights is now equivalent to the box office collections.
As per the Report, the biggest grosser for the year 2017 was Baahubali 2: The Conclusion which was a Tamil-Telugu bilingual dubbed in Hindi. Tiger Zinda Hai, Golmaal Again, Judwaa 2, Toilet Ek Prem Katha, Fukrey Returns and Badrinath Ki Dulhania were the big hits for Bollywood in 2017. The top 50 films contributed approximately 97.75 percent of the total net box office collection. Box office collections of the top 50 films grew by 11.60 percent in 2017. Further, the number of films crossing the Rs,1 billion mark in terms of net box office has also increased in the year 2017 as compared to the previous years.
MUSIC
India is one of the countries where digital music sales have overtaken physical sales. Rising smartphone penetration, affordable mobile data, and the growing adoption of music streaming platforms have been the driver for the music industry''s growth. As per the Report of Media and Entertainment Industry, sales of digital music through digital channels account for approximately 65 percent of overall music sales in India in 2017.
According to the FICCI-KPMG Report, the paid subscriber penetration among online music users is expected to increase to 5 percent and the number of online music listeners in India is projected to reach 273 million by 2020. India is estimated to have 481 million internet users with a 65 percent urban penetration and 20 percent rural penetration. The increasing penetration of private FM radio stations will increase music consumption and increase revenues accordingly. YouTube is one of the most viewed platforms for music. Music videos have the highest viewership on YouTube as compared to other genres, with over 3 billion views.
Despite the high level of consumption, the music industry accounts for less than 1 percent of the Indian M&E Industry. Revenue leakages through piracy, the steady decline of physical formats, disintermediation due to the emergence of new media, price erosion due to disintermediation and high content-acquisition costs have been roadblocks in the industry''s growth.
The internet was not good for the music business due to piracy, but it does drive strength for the broader video entertainment business around the world.
BUSINESS OVERVIEW
Tips Industries Limited (TIPS), one of the most renowned entertainment companies is engaged in the business of Production and Distribution of films and leveraging its Audio content digitally in India and overseas. Mr. Kumar Taurani and Mr. Ramesh Taurani, the co-founders of TIPS, are well-known names in the Indian M&E space with a proven track record of producing films that have a wholesome entertainment for the entire family. TIPS also has one of the largest and diversified music libraries with a collection of over 25,000 songs across all genres and major languages. The Company is also a leading producer of Punjabi films in the country.
With the increased penetration of smartphones and internet to rural areas, there has been an increase in rural population as potential customers. As a result, most digital music companies in India are looking to develop/invest in the regional content library.
FINANCIAL RESULTS
The Company earned total revenue including other income of Rs,4992.85 lakh as compared to the previous year of Rs,6642.26 lakh. The net profit after tax for the year stood at Rs,312.87 lakh as compared to Rs,299.02 lakh in the previous year.
The highlights of the Financial Results of the Company for the year under review along with the figures for the previous year are as follows:
_ (Rs, in Lakh)
Particulars |
2017-18 |
2016-17 |
Income |
4992.85 |
6,642.26 |
Profit/(Loss) before Depreciation, Interest, Provision for Contingencies and Taxation |
1202.69 |
1,601.70 |
Less: Depreciation and Interest |
802.64 |
1,171.04 |
Profit/(Loss) before Provision for Taxation, Extraordinary and Prior Period year items |
400.05 |
430.66 |
Less: Provision for Taxation |
||
Current Tax |
87.18 |
88.20 |
Wealth Tax |
0.00 |
0.00 |
Taxes in respect of earlier years |
0.00 |
43.44 |
Particulars |
2017-18 |
2016-17 |
Profit/(Loss) after Provision for Taxation but before Extraordinary and Prior Period year items |
312.87 |
299.02 |
Less: Prior Period Expenses |
0.00 |
0.00 |
Profit/(Loss) after Taxation |
312.87 |
299.02 |
Add: Balance Brought Forward |
2,721.66 |
2,606.65 |
Profit/(Loss) after Taxation available for Appropriation |
3,034.53 |
2,905.67 |
Transfer to General Reserves |
0.00 |
15.00 |
Share Capital |
1431.87 |
1,431.87 |
Reserves & Surplus |
5535.87 |
5,370.36 |
(Rs, in Lakh)
PERFORMANCE REVIEW
One of the much-awaited multi-starrer action thriller film "Race 3" is under advanced stages of production in the year, which is produced under the banner of Tips Industries Limited & Salman Khan Films and directed by Remo D''Souza, the film features Salman Khan, Anil Kapoor, Bobby Deol, Jacqueline Fernandez, Daisy Shah and others. Race 3 is expected to hit the silver screens on Eid, June 15,2018.
The music library of the Company is one of the most exhaustive in the industry comprising a collection of over 25,000 songs, which are available for streaming and download across the leading industry digital marketplaces like iTunes and Google Play, as well as popular streaming platforms like Saavn and Gaana. The music revenue for FY 2017-18 was Rs,4258.91 lakh as compared to Rs,3195.18 lakh in the previous year.
DIVIDEND AND RESERVES
The Directors recommend a final dividend of 10 percent i.e. Rs,1.00/-(one rupee) per share on fully paid-up Equity Share of Rs,10/- each of the Company. The Board of Directors has not recommended transfer of any amount to General Reserves and amount of Rs,2,887 lakh is retained in the Profit and Loss Account.
SHARE CAPITAL
The paid-up Equity Share Capital as of March 31, 2018, stood at 1,43,18,659 Equity Shares.
During the year under review, there is no change in the share capital of the Company, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As of March 31, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.
REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The Company does not have any subsidiary, associate and joint venture company.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance, forms part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Director Retiring by Rotation
In terms of Section 152 of the Companies Act, 2013, Mr. Ramesh Taurani, Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends the same for your approval.
Re-appointment of Managing Directors
The Board of Directors of the Company, on the recommendation of the Nomination and Remuneration Committee, at their Meeting held on May 28, 2018, approved the re-appointment of Mr. Kumar Taurani as Chairman and Managing Director and Mr. Ramesh Taurani as Managing Director for a period of three years with effect from June 1, 2018. The Board recommends the reappointment of Managing Directors for your approval.
Declaration by Independent Directors
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Key Managerial Personnel
Mr. Kumar Taurani, Chairman and Managing Director; Mr. Ramesh Taurani, Managing Director; Mr. Ishwar Gursahani, Chief Financial Officer and Ms. Bijal Patel, Company Secretary are the Key Managerial Personnel of the Company.
During the year under review, there was no change in the Key Managerial Personnel of the Company.
The Board of Directors, at their meeting held on May 28, 2018, has appointed Mr. Sunil Chellani as Chief Financial Officer of the Company w.e.f. June 1, 2018, in place of Mr. Ishwar Gursahani who has tendered his resignation from the position of Chief Financial Officer of the Company w.e.f. closure of business hours of May 31,2018.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out performance evaluation. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:
a. that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,
2018, and of the profit of the Company for the year ended on that date;
c. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a going concern basis;
e. that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DETAILS OF BOARD AND COMMITTEE MEETINGS
Board Meetings
The Board of Directors of the Company met four times during the financial year i.e. from April 1, 2017 to March 31, 2018 on May 30, 2017, September 13, 2017, November 29,2017 and February 2, 2018. Details of the Board Meetings and attendance of the Directors are provided in the Corporate Governance Report, which forms part of this Annual Report.
Committees of the Board
With a view to having a more focused attention on the business and for better governance and accountability, the Board has constituted the Committees viz. Audit Committee, Stakeholders'' Relationship Committee, Nomination, and Remuneration Committee, Corporate Social Responsibility Committee and Buyback Committee.
The details with respect to the compositions, roles, terms of reference, etc. of relevant committees are provided in the Corporate Governance Report of the Company, which forms part of this Annual Report.
AUDITORS
Statutory Auditors
M/s. SSPA & Associates, Chartered Accountants, (Firm Registration No. 131069W) were re-appointed as the Statutory Auditor of the Company at the 21st AGM held on September 13, 2017, to hold the office till the conclusion of 23rd AGM, subject to ratification by the members at every Annual General Meeting.
However, in accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. Hence, M/s. SSPA & Associates shall continue as Statutory Auditors for the remaining period of the term until the conclusion of the 23rd Annual General Meeting of the Company.
In the opinion of the Directors, the notes to financial statement are self-explanatory and adequately explain the matters, which are dealt with within the Auditors'' Report. In case of the qualified opinion of the Auditors with respect to non-recognition of deferred tax explained in Note No. 34(15) of the notes to Financial Statements, the statement of the impact of the qualification has been disclosed on the website of the Company.
Secretarial Auditors
Provisions of Section 204 read with rules made thereunder, M/s. N.L. Bhatia & Associates, Practicing Company Secretaries (UIN: P1996MH055800) have been appointed to undertake Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed herewith as Annexure I and forms part of this Report.
The said report does not contain any observation or qualification which requires any explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
Internal Auditors
Pursuant to provisions of Section 138 read with rules made thereunder, the Board has appointed M/s. Maheshwari & Co., Chartered Accountants (Firm Registration No. 105834W) as Internal Auditors of the Company to check the internal controls and functioning of the activities and recommend ways of improvement. Internal Audit is carried out on a quarterly basis, and the report is placed in the Meetings of the Audit Committee and the Board for their consideration and direction. Their scope of work is as decided by the Audit Committee and the Board of Directors.
INTERNAL CONTROL AND FINANCIAL REPORTING SYSTEMS
The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. It has documented the procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring the reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations.
Adequate internal control systems commensurate with the nature of the Company''s business and size and complexity of its operations have been recognized. Internal control systems ensure the reliability of financial reporting, timely feedback on the achievement of operational and strategic goals, compliance with applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.
During the year under review, no material or serious observations have been received from the Internal Auditors of the Company with respect to inefficiency or inadequacy of the controls.
RISK MANAGEMENT
TIPS has a well-defined policy to foresee, identify and analyze risks and take suitable action to mitigate and minimize the impact of such risks. Accordingly, the Company has identified the followings risks that can impact its business performance and plans:
Piracy
Piracy, both physical and digital, although declining at the global level, remains a perennial challenge in India''s music industry. Accordingly, the digitally pirated music remained the most popular source of consumption. High content prices, low-income level, and cheaper internet infrastructure are the major factors leading to content piracy. In some of the cases, the films have leaked before their release dates as well. "According" in the cinemas is one of the major sources of the leakage as over 90 percent of new release titles originate from cinemas.
Paid-service model still in the nascent stage
The biggest issue is the general music consumer''s apparent unwillingness to pay for music. India-based streaming services may have amassed over 100 million users, the overall conversion rate to paying is estimated to be around 1 percent.
Less than desirable growth in screens
India still has one of the lowest densities of screens per capita in the world. This under-penetration of screens has resulted in the untapped market potential for the Indian film segment. Increase in screen density and higher access to cinemas across the country could potentially enhance domestic box office collections, improve the return on investment in films and pave the way for greater investment in both the film content and exhibition.
Need for a "single window clearance" for the opening of multiplexes
The cinema owners are required to obtain multiple licenses from different state government departments impacting the opening of screens. The delay in getting license clearance has severely hampered the growth of screens in India over the years. The challenges involved are multi-fold where each state has its own set of license requirements for the operation of cinemas along with the validity of the licenses for a short-term period of only 1-2 years.
OPPORTUNITIES
Anti-piracy regulations
The Government has refocused on the challenge the M&E Industry is facing due to digital piracy. A social media campaign to promote Indian geographical indications (GIs) has been launched by the Cell for IPR Promotions & Management (CIPAM). State governments are also setting up their IP rights unit. The industry is fighting this threat by concerted measures such as conducting raids on pirates, creating more awareness among customers and adopting new paid models to track streaming and downloads on the internet and mobile phones. Industry bodies such as Phonographic Performance Limited (PPL) and Indian Music Industry (IMI) have established vigilance teams to curb music-copyright violations in various cities in collaboration with the local police. The Indian copyright law has provisions for digital right management for protection of the content on digital media environment. The Government has banned various websites that provides online streaming or torrent links to download the pirated content.
Overseas theatricals
The growing popularity of Bollywood films in the overseas markets is another growth opportunity. Overseas theatricals have emerged as an important avenue for producers, giving them an additional safety net. More focus is placed on the Chinese market, as well as the North American market. Overseas theatricals contributed approximately 16 percent to the overall segment''s revenue in 2017, an increase of approximately 3 times from 2016. The Aamir Khan-starring film Dangal became the highest grossing non-Hollywood film in China.
Regional markets
Online ticketing platform Book My Show reported average occupancy of 45-46 percent for regional films last year, compared to around 39-40 percent in 2016. Within the regional space, Gujarati films registered a 44 percent increase over 2016 in terms of transactions on the site, followed by Malayalam films registering a 38 percent rise. Malayalam, Bengali and Marathi cinema did not disappoint this year as well. The share of theatrical revenues from regional films has been rising.
OUTLOOK
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is growing at a rapid pace. The industry has witnessed tremendous growth in the last few years and the growth momentum is expected to continue. Digitization has played a major role in the Indian M&E industry.
Rising income and evolving lifestyles, backed by increasing digitization and higher internet usage, pave the way for the tremendous scope of growth for almost all segments of this industry. These are all positive developments for TIPS as the Company is poised to leverage its experience and expertise of providing wholesome family entertainment to the Indian audiences with its Hindi and Punjabi films, as well as its huge repertoire of digitized music collection across the digital media.
According to the latest report by FICCI-KPGM,the Indian M&E industry is projected to grow at a CAGR of over 11.6 percent over the period FY 2016-21. During this period, and in line with the global trend, sectors like Digital media (24.9 percent), Animation and VFX (20.4 percent), Online gaming (27.5 percent) are projected to grow at a much higher rate than traditional segments like Films (11.9 percent) and Music (10.6 percent).
HUMAN RESOURCES
TIPS has always believed that its people are its most valuable assets. The Company ensures that all its employees enjoy a safe and healthy working environment. The Company has a strong emphasis on values based on integrity, excellence, and passion. It has always had a mutually respectful and appreciative relationship with all its employees.
As of March 31, 2018, the number of employees on the payroll of the Company was 47.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is provided in Annexure II forming part of this report.
WHISTLE BLOWER POLICY / VIGIL MECHANISM POLICY
The Company has adopted a Whistle Blower Policy/Vigil Mechanism Policy for Directors and employees to report their genuine concerns. Details of the policy are provided in the Corporate Governance Report, which forms part of this Annual Report.
RELATED-PARTY TRANSACTIONS
All transactions with related parties were reviewed and approved by the Audit Committee and Board. The details of the related-party transactions as per Ind AS 24 are set out in Notes to the Financial Statements forming part of this report.
The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 is disclosed in Form No. AOC-2 as Annexure III.
The Company has adopted a Related-Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee is constituted in accordance with the provisions of Section 135 of the Companies Act, 2013 read with rules made thereunder.
Considering the aggregate net profit of preceding three financial years and other applicable provisions mentioned in Section 135 of the Companies Act, 2013 read with and Schedule VII of the Companies Act, 2013, the Company is not required to contribute any amount on CSR activities during FY 2017-18.
DEPOSITS
The Company has not accepted any deposits from the public/ shareholders in accordance with Section 73 of the Companies Act, 2013 and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.
During FY 2017-18, the Company has accepted deposits only from Directors of the Company which are exempted as per the provision of Section 73 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014. The declarations have been obtained from the Directors in terms of Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014. Details of the deposits accepted from Directors are provided in notes to financial statement.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
The particulars of Loans, Guarantees and Investments have been disclosed in the financial statements read together with Notes annexed to and forming an integral part of the financial statements.
EXTRACT OF ANNUAL RETURN
Extract of the Annual Return in Form MGT-9 pursuant to Section 92(3) of the Companies Act, 2013 for the financial year ended March 31, 2018, is provided in Annexure IV forming part of this report.
SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of energy
The particulars as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy have not been provided considering the nature of activities undertaken by the Company during the year under review.
Technology absorption
During the year, the Company has not absorbed or imported any technologies.
Foreign exchange earnings and outgoings
Details of foreign exchange earnings and outgoings of the Company made during the year are provided in notes to financial statement.
OTHER DISCLOSURES
The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
No material changes and commitments which could affect the Company''s financial position have occurred between the end of the financial year of the Company and the date of this report
No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future
No complaint received from any employee, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder
CAUTIONARY STATEMENT
Statements in this Board''s Report and Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be forward-looking within the meaning of applicable securities, laws, and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include a change in government regulations, tax laws, economic and political developments within and outside the country and such other factors.
ACKNOWLEDGMENTS AND APPRECIATION
The Directors wish to acknowledge and place on record their sincere appreciation for the assistance and co-operation received from all the members, regulatory authorities, customers, financial institutions, bankers, lenders, vendors and other business associates.
The Directors also recognize and appreciate all the employees for their commitment, commendable efforts, teamwork, professionalism and continued contribution to the growth of the Company.
For and on behalf of the Board of Directors
Kumar S. Taurani
Chairman and Managing Director
Place: Mumbai (DIN: 00555831)
Date: May 28,2018
Mar 31, 2016
To
The Members,
Tips Industries Limited
The Directors are pleased to present the 20th Annual Report on the business and operation of the Company together with the Audited Financial Statements for the financial year ended March 31, 2016. The Management Discussion and Analysis is also included in this Report.
OVERVIEW OF THE ECONOMY:
The world economy continued its uphill climb during the year 2015. Geo-political tensions and slow pace of recovery in advanced economies led to the global output rising by 2.4 per cent in 2015, marginally lower than the 2.6 per cent in 2014, according to World Economic Situation and Prospects, 2016, published by United Nations. Other key factors affecting global growth were volatility and rebalancing in the Chinese economy, drop in oil and other commodity prices, slowdown in emerging economies and slow demand pickup in major developed economies.
A major macro-economic event that had a big impact during the year was price of crude oil. This was a year in which the global economy saw a big drop in commodity prices, with crude oil dropping from a high of near USD100 per barrel in October 2014 to sub USD30 in January 2016. While this volatility rocked many oil-producing economies around the world, it was a positive development for oil-importing countries like India.
The Indian economy continued to power ahead during the year, in spite of many challenges. For the second year in a row, India surpassed China to emerge as the fastest growing major economy in the world, with the GDP growth rate of 7.6 per cent. Other challenges included stressed balance sheets of major PSU banks and passage of key reforms, which did affect investor sentiments. On the other hand, inflation largely remained within the desirable limits of the government, largely on account of low commodity prices, especially prices of crude oil. Low crude oil prices also helped in keeping the Current Account Deficit (CAD) under control, allowing the Reserve Bank of India to loosen its monetary policy and lower repo rates.
The outlook for the year 2016 continues to remain optimistic and buoyant. Key agencies have forecast an above average monsoon for the year, a key to rural growth as well as consumption demand in key industries. The government''s focus on reviving infrastructure, manufacturing and housing through long term initiatives that are all expected to aid GDP growth.
THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY:
The year 2015 was a seminal year in many ways for the Media and Entertainment (M&E) industry. A year that sparked excitement and renewed hope but at the same time a year in which reality came to roost. Lower commodity prices, lower inflation and lower borrowing costs are likely to drive consumerism in the country benefiting the media industry. This resilience is reflected in the performance of the M&E sector which grew by 12.8 per cent from INR1026 billion in 2014 to INR1157 billion in 2015.
The Indian media and entertainment industry : Size |
The Indian media and entertainment industry : Projections |
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Overall industry size (INR billion) (For calendar years) |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
Growth in 2015 over 2014 |
2016P |
2017P |
2018P |
2019P |
2020P |
CAGR (2015 2020) |
TV |
297.0 |
329.0 |
370.1 |
417.2 |
474.9 |
542.2 |
14.2% |
617.0 |
709.6 |
823.3 |
956.8 |
1097.6 |
15.1% |
|
192.9 |
208.8 |
224.1 |
243.1 |
263.4 |
283.4 |
7.6% |
305.2 |
329.6 |
355.9 |
383.6 |
412.5 |
7.8% |
Films |
83.3 |
92.9 |
112.4 |
125.3 |
126.4 |
138.2 |
9.3% |
158.7 |
174.1 |
190.0 |
207.8 |
227.3 |
10.5% |
Radio |
10.0 |
11.5 |
12.7 |
14.6 |
17.2 |
19.8 |
15.3% |
23.4 |
28.4 |
32.7 |
37.8 |
43.3 |
16.9% |
Music |
8.6 |
9.0 |
10.6 |
9.6 |
9.8 |
10.8 |
10.2% |
12.1 |
14.0 |
16.1 |
18.4 |
20.6 |
13.8% |
OOH |
16.5 |
17.8 |
18.2 |
19.3 |
22.0 |
24.4 |
10.9% |
28.3 |
31.6 |
35.4 |
40.0 |
45.2 |
13.1% |
Animation and VFX |
23.7 |
31.0 |
35.3 |
39.7 |
44.9 |
51.1 |
13.8% |
58.3 |
67.1 |
78.1 |
91.3 |
108.0 |
16.1% |
Gaming |
10.0 |
13.0 |
15.3 |
19.2 |
23.5 |
26.5 |
12.8% |
30.8 |
34.4 |
39.0 |
45.4 |
50.7 |
13.9% |
Digital Advertising |
10.0 |
15.4 |
21.7 |
30.1 |
43.5 |
60.1 |
38.2% |
81.1 |
113.6 |
153.3 |
199.3 |
255.2 |
33.5% |
Total |
652 |
728 |
821 |
918 |
1,026 |
1,157 |
12.8% |
1,315 |
1,502 |
1,724 |
1,980 |
2,260 |
14.3% |
Source: KPMG in India analysis, 2016
The government''s Digital India and Smart City initiatives are set to exponentially increase the internet penetration in tier II and tier III cities, revolutionizing businesses and our way of life. India''s estimated internet current user-base of more than 300 million (as of December 2015). One of the critical issues for such limited coverage is the poor broadband coverage in the tier II and III cities.
FILM:
For the M&E industry, the year was a mixed bag. Exhibitors recorded a significant growth in regional and Hollywood film collections, the collection for Hindi films was almost fiat as compared to previous years. This may be an indicator of audiences looking beyond Bolly wood for their entertainment. Bolly wood delivered a handful of films based on superior content that performed well. However, weak contents failed to attract audiences to theatres.
The box office collections for Bolly wood in 2015 were low compared to 2014. In particular, only six of the leading 10 grossing films in 2015 crossed the INR1 billion mark and two crossed the INR2 billion mark as compared to 2014 wherein nine of the leading 10 grosser had collections above INR1 billion.
Domestic theatricals continued to be the main source of revenue with a 73 per cent share in the total revenues for the Indian film industry. In 2015, domestic theatrical revenues grew by 8.5 per cent to reach INR101 billion on the back of an increase in overall footfalls as well as an inflationary growth in average ticket prices.
Film Industry Performance: |
||||||||||||
Revenues (INR billion) |
2011 |
2012 |
2013 |
2014 |
2015 |
2016P |
2017P |
2018P |
2019P |
2020P |
2014-15 (YoY growth) |
CAGR (2015 2020) |
Domestic theatrical |
68.8 |
85.1 |
93.4 |
93.5 |
101.4 |
115.8 |
125.7 |
136.1 |
147.6 |
159.9 |
8.5% |
9.5% |
Overseas theatrical |
6.9 |
7.6 |
8.3 |
8.6 |
9.6 |
11.4 |
12.4 |
13.5 |
14.5 |
15.6 |
11.5% |
10.9% |
Cable and satellite rights |
10.5 |
12.6 |
15.2 |
14.7 |
15.9 |
18.2 |
19.8 |
21.4 |
23.2 |
25.1 |
8.1% |
9.5% |
Home video |
2.0 |
1.7 |
1.4 |
1.2 |
1.0 |
0.9 |
0.8 |
0.7 |
0.6 |
0.6 |
-14.0% |
-12.2% |
Ancillary revenue streams |
4.7 |
5.4 |
7.0 |
8.4 |
10.2 |
12.5 |
15.4 |
18.3 |
21.9 |
26.1 |
22.3% |
21.1% |
Total |
92.9 |
H2.4 |
125.3 |
126.4 |
138.2 |
158.7 |
174.1 |
190.0 |
207.8 |
227.3 |
9.3% |
10.5% |
Source: KPMG in India analysis
Bollywood Films such as ''Bajrangi Bhaijaan'', ''Tanu Weds Manu Returns'', ''Piku'' and ''ABCD2'' performed very well at the box office due to the strong content. ''Baahubali - a bi-lingual film, created box-office history and set a new standard for filmmakers in India Also, a few Hollywood franchise films such as ''Avengers: Age of Ultron'', ''Fast & Furious 7'', ''Jurassic World'', which got a wider release due to dubbing and release on e-cinema screens, also showed strong performance.
MUSIC:
The music industry continued its shift to digital consumption in 2015. The market size of the music industry is INR10.8 billion in 2015 and is expected to grow to INR20.6 billion by 2020. Digital music now generates revenue of over 55 per cent of the overall size of the music industry in India. Nearly 40 per cent of the music consumed is Bolly wood, 30 per cent is Regional, 10 per cent is Classical and Devotional and 20 per cent is the rest of the market.
The year 2015 saw the music streaming services getting strong traction and clearer business models have begun to emerge for these players. Players like Gaana, Saavan, Hungama, Wynk, Rdio, and Guvera have started to gain increased user traffic on the back of cheaper connectivity, better Smartphone penetration and acceptance of fermium models amongst consumers supplemented by high levels of customer acquisition spend. However, most users are consuming content for free and there has been strong resistance to switching to subscription models. There are an estimated 40 million active consumers in India who stream every month and out of which only about 0.2 million customers are paid subscribers.
BUSINESS OVERVIEW:
Tips Industries Limited (TIPS) is one of the most respected and renowned entertainment companies with presence in music, film production and distribution. Mr. Kumar Taurani and Mr. Ramesh Taurani, co-founder of TIPS, are well known names in the Indian M&E space with a proven track record of producing films that have a wholesome entertainment for the entire family. TIPS also has one of the largest and diversified music library with a collection of over 25,000 songs across all genres and major languages. TIPS owns the RACE franchise, one of the most successful mainstream Hindi film franchise in recent years with a proven success at box office. The Company is also a leading producer of Punjabi films in the country.
The highlights of the Financial Results of the Company for the year under review along with the figures for previous year are as follows:â
(Rs, in lakhs)
Particulars |
2015-16 |
2014-15 |
Income |
7151.45 |
10380.54 |
Profit/(Loss) before Depreciation, Interest, Provision for Contingencies and Taxation |
1803.47 |
1664.00 |
Less: Depreciation and Interest |
1422.37 |
1329.49 |
Profit/(Loss) before Provision for Taxation, Extraordinary and Prior Period year items |
381.09 |
334.51 |
Less: Provision for Taxation |
||
Current Tax |
77.71 |
59.13 |
Wealth Tax |
0.00 |
3.82 |
Taxes in respect of earlier years |
0.00 |
1.94 |
Profit/(Loss) after Provision for Taxation but before Extraordinary and Prior Period year items |
303.39 |
269.61 |
Less: Prior Period Expenses |
0.00 |
0.00 |
Profit/(Loss) after Taxation |
303.39 |
269.61 |
Add: Balance Brought Forward |
2324.88 |
2302.00 |
Profit/(Loss) after Taxation available for Appropriation |
2628.27 |
2571.61 |
Dividend |
150.68 |
153.59 |
Dividend Tax |
30.67 |
31.27 |
General Reserves |
22.75 |
20.00 |
Share Capital |
1506.77 |
1535.86 |
Reserves & Surplus |
5457.41 |
5489.10 |
With the increased penetration of smart phones and internet to rural areas, there has been an increase of rural population as potential customers. As a result, most digital music companies in India are looking to develop/invest in regional content library. Music rights are expected to recover on an average about 10 to 15 per cent of the production costs of a film.
FINANCIAL RESULTS:
The Company earned total revenue including other income of Rs, 7151.45 lakhs as compare to the previous year of Rs, 10380.54 lakhs. The net profit after tax for the year stood atRs, 303.39 lakhs as compared to Rs, 269.61 lakhs in the previous year.
PERFORMANCE REVIEW:
During the year 2015-16, TIPS produced and released its Punjabi comedy-thriller film "Ambarsariya" on March 25, 2016. The film is directed by Mandeep Kumar, written by Dheeraj Rattan and stars Diljit Dosanjh, Monica Gill, Navneet Kaur Dhillon, Lauren Gottlieb and others. The film received positive response from audience and got a good opening at U.S. box office in the first weekend.
In the mainstream Hindi films, the Rom-Com film "Loveshhuda", directed by Vaibhav Misra, was distributed by TIPS. The film stars Girish Kumar and Navneet Kaur Dhillon in leading roles. It was released on February 19, 2016.
The outlook for the next year is positive. TIPS is confident that its music business will continue to deliver consistent growth and revenue. With better 3G coverage and the introduction of 4G services, the consumption of digital music is expected to increase significantly over the next few years. The Company has always been at the forefront of leveraging latest technology and innovation in the industry. The music library of the Company is one of the most exhaustive in the industry comprising of a collection of over 25,000 songs, which are available for streaming and download across leading industry digital marketplaces like iTunes and Google Play, as well as popular streaming platforms like Saavn and Gaana. The music revenue for the year 2015-16 was Rs, 4309.86 lakhs as compared to Rs, 3221.78 lakhs in the previous year. In the films business, the Company is actively considering some exciting scripts for short listing.
DIVIDEND:
The Directors recommend final dividend of 10% i.e. Rs, 1.00/- (one rupee) per share on fully paid-up Equity Shares of Rs, 10/- each of the Company. The proposed dividend, subject to approval by the shareholder of the Company at the Annual General Meeting, will absorb a sum of Rs, 150.68 lakhs (Previous Year being Rs, 153.59 lakhs) and Dividend Tax of Rs, 30.67 lakhs (Previous Year being Rs, 31.27 lakhs).
TRANSFER TO RESERVES:
The Company transferred a sum of Rs, 22.75 lakhs to the General Reserve and amount of Rs, 2424.16 lakhs is retained in the Profit and Loss Account.
SHARE CAPITAL:
The paid up Equity Share Capital as on March 31, 2015 was 1,53,58,640. Due to the buy-back of 10,39,981 Equity Shares of the Company, as on date, the paid-up share capital of the Company has been reduced to 1,43,18,659 Equity Shares.
- Buyback of Equity Shares:
The Buy-back offer commenced on November 26, 2015 and closed on May 25, 2016. The Company has bought back 10,39,981 Equity Shares from the open market using the nationwide electronic trading facilities of the BSE Limited (''BSE'') and National Stock Exchange of India Limited(''NSE'') from the existing registered shareholders/beneficial owners, other than the Promoters of the Company. The total fund utilized in the Buy-back is Rs, 6,52,95,997.15 (excluding brokerage, transactional charges and taxes) which represents 96.02% of the Maximum Buy-back Size of Rs, 6,80,00,000/- (excluding brokerage, transactional charges and taxes). The highest price at which the Equity Shares were bought back was Rs, 70/- per Equity Share while the lowest price was Rs, 51/- per Equity Share. The Equity Shares were bought back at an average price of Rs, 62.79 per Equity Share. These prices are based on daily reporting by the broker and exclude brokerage, transactional charges and taxes.
- During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company.
REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:
The Company does not have any subsidiary, associate and joint venture Company.
CORPORATE GOVERNANCE REPORT:
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance, forms part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
- Cessation from Directorship:
Mr. Vijay Agarwal, Independent Director of the Company, has resigned from the post of directorship with effect from closure of business hours of August 14, 2015.
The Board takes this opportunity to place on record its appreciation for the support and invaluable contribution made by him during his tenure as Independent Director of the Company.
- Director Retiring by Rotation:
In terms of Section 152 of the Companies Act, 2013, Mr. Ramesh Taurani, Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends the same for your approval.
- Appointment of Director:
Mr. Venkitaraman Subramanian Iyer was appointed as an Additional Director (Non-Executive Independent) of the Company with effect from May 25, 2016 by the Board of Directors and holds office up to the date of this Annual General Meeting under Section 161 of the Companies Act, 2013. The Company has received requisite notice in writing from a member proposing Mr. Venkitaraman Subramanian Iyer for appointment as an Independent Director. The Board recommends the appointment of Mr. Venkitaraman Subramanian Iyer as Independent Director under Section 149 of the Companies Act, 2013 and under Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to hold office for 5 consecutive years.
- Declaration by Independent Directors:
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)
(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
- Key Managerial Personnel:
Mr. Kumar Taurani, Chairman & Managing Director, Mr. Ramesh Taurani, Managing Director, Mr. Ishwar Gursahani, Chief Financial Officer and Ms. Bijal Patel, Company Secretary, were the Key managerial Personnel during the year under review.
BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out performance evaluation. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.
DIRECTORâS RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:
a. that in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;
c. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a going concern basis;
e. that the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f. that the director had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DETAILS OF BOARD AND COMMITTEES MEETING:
- Board Meetings:
The Board of Directors met five times during the financial year ended March 31, 2016 on May 8, 2015, August 14, 2015, November 4, 2015, November 5, 2015 and February 11, 2016. Details of the Board meetings and attendance of the directors are provided in the Corporate Governance Report, which forms part of this Annual Report.
- Committees of the Board:
With a view to have a more focused attention on business and for better governance and accountability, the Board has constituted the Committees viz. Audit Committee, Stakeholders'' Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Buy-back Committee.
The details with respect to the compositions, roles, terms of reference, etc. of relevant committees are provided in the Corporate Governance Report of the Company, which forms part of this Annual Report.
RELATED PARTY TRANSACTIONS:
All Related Party Transactions that were entered into during the financial year were on an arm''s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations.
All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company''s website.
Details of the transactions with Related Parties are provided in the accompanying financial statements. There were no transactions during the year which would require to be reported in Form AOC-2.
AUDITORS:
- Statutory Auditors:
M/s. SSPA & Associates, Chartered Accountants, (Firm Registration No: 131069W) who are Statutory Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The consent of the Auditors along with certificate under Section 139 of the Companies Act, 2013 has been obtained from the auditors to the effect that their appointment, if made, shall be in accordance with the prescribed conditions and that they are eligible to hold the office of Auditors of the Company.
In the opinion of the directors, the notes to financial statement are self-explanatory and adequately explain the matters, which are dealt within the Auditors'' Report. In case of qualified opinion of the Auditors with respect to non-recognition of deferred tax explained in note no. 33 of the notes to Financial Statements.
- Secretarial Auditors:
Provisions of Section 204 read with rules made thereunder, M/s. N.L. Bhatia & Associates, Practicing Company Secretaries (C.P No. 422) had been appointed to undertake Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed herewith as Annexure I and forms part of this Report.
The said report does not contain any observation or qualification which requires any explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
- Internal Auditors:
Pursuant to provisions of Section 138 read with rules made there under, the Board has appointed M/s. Maheshwari & Co., Chartered Accountants (Firm Registration No: 105834W), as the Internal Auditors of the Company to check the internal controls and functioning of the activities, and recommend ways of improvement. Internal Audit is carried out on a quarterly basis, the report is placed in the Meetings of the Audit Committee and the Board for their consideration and direction. Their scope of work is as decided by the Audit Committee and the Board of Directors.
INTERNAL CONTROL & FINANCIAL REPORTING SYSTEMS
The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. It has documented the procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations.
Adequate internal control systems commensurate with the nature of the Company''s business and size and complexity of its operations have been recognized. Internal control systems ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.
During the year under review, no material or serious observations have been received from the Internal Auditors of the Company with respect to inefficiency or inadequacy of the controls.
RISK MANAGEMENT:
Risks are an inherent part of any business. The Company has formulated a Risk Assessment and Minimization Policy with regard to risk management to identify risks inherent in business operations of the Company and provides guidelines to define, measure, report, control and mitigate the identified risks. This Policy ensures the sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the Company''s business.
Some of the risks and threats that the company is exposed to are-
- Piracy:
Piracy is a major risk and bane for the M&E industry globally. The industry has been working relentlessly to reduce this key threat. With the advent of internet and digitization, this threat continues to be a major source of revenue loss for all the stakeholders in the industry. This has a potential to incentivize piracy as people would And it much easier to watch movie on their laptops or mobile than travel to far off theatres. Hence, there is need for a collective, structured, scientific, multipronged and proactive approach to combat piracy.
- Consumer preference shifting to alternate forms of entertainment:
TV, IPL, OTT platforms, live entertainment etc. and other forms of outdoor entertainment such as sports, eating out, etc. may eat into the share of domestic theatricals as an entertainment option.
- Lost opportunities due to the inability to add new screens in a timely manner:
India lags behind on account of screen penetration and lack of infrastructure is leading to a lost revenue opportunity for the industry. This affects the scope of the smaller films to a greater extent. Each meritorious independent film, under marketed or under monetized would be a missed opportunity, not only for that particular film or film maker, but for the entire Indian film industry.
- Ticket pricing:
Increasing ATPs are dissuading the audience from watching the films in theatres. Regions with low ATP prices have witnessed improved occupancy levels and a boost to film business. For instance, the occupancy levels are very high in the south where the ATP prices are capped. Also, the Marathi film industry experienced a boom in the last year due to low ATP prices. Hence, there is need to rationalize the ATP prices to improve the footfalls.
OPPORTUNITIES:
The opportunities observed are based on the trends noticed in past couple of years, which continues to be relevant. Some of the key ones are as follows:
- Digitization:
Digitization has impacted all aspects of the M&E industry right from production to distribution to exhibition to sales of tickets. The next wave of growth in the overall M&E industry is expected to be driven by increased digitization. Over the year, there have been far-reaching changes in the form of availability of low-cost smart devices and dropping data plans. In spite of this, India still has a low internet penetration of around 19 per cent, indicating a huge growth potential. The advent of 4G services, the increasing adoption of 3G in urban areas and 2G in rural areas are all strong signals of the immense growth potential that will be unlocked by digitization.
- Regional Markets:
The year 2014 saw a huge surge in production and release of regional films. From Tamil to Telugu and from Marathi to Punjabi, all the regional film markets performed excellently. The share of theatrical revenues from regional films has been rising from around 12-13% in 2013 to almost 20-21% in 2014, particularly in Tier 2 and Tier 3 cities, as per industry data.
- Overseas Theatricals:
The growing popularity of Bolly wood films in the overseas markets is another growing opportunity. Over the year, new markets like China and Europe have seen a huge surge in interest in Hindi films. However, the share of overseas theatricals is still around 10-25 per cent, much lower than the almost 60 per cent for Hollywood films. As more and more new markets like Lebanon, Burma and Iraq continue to be mesmerized by Hindi films, the overseas theatrical avenue is poised for a big leap.
OUTLOOK:
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is growing at a rapid pace. The industry has witnessed tremendous growth in the last few years and the growth momentum is expected to continue. Digitization has played a major role in the Indian M&E industry, affecting every aspect from production to distribution. Going forward, those companies who take the digital leap and adapt their business models to meet the digital world stand to make maximum gains. Another key factor for the industry is the increasing number of screen in the country. In the next five years, the growth in the number of screens would primarily be driven by expansion to tier-II and tier-III cities.
The industry landscape is becoming highly dynamic, with the digital segment being among the fastest growing segments. Rising income and evolving lifestyles, backed by increasing digitization and higher internet usage, pave way for the tremendous scope of growth for almost all segments of this industry. These are all positive developments for TIPS as the Company is poised to leverage its experience and expertise of providing wholesome family entertainment to the Indian audiences with its Hindi and Punjabi films, as well as its huge repertoire of digitized music collection across the digital media.
HUMAN RESOURCES:
TIPS firmly believes in and has consistently practiced progressive HR values. The Company inculcates the values of transparency, professionalism and accountability in its operations to generate long-term benefits for its shareholders, customers, employees and society alike. At TIPS, there is consistent emphasis on each individual''s sense of responsibility, while simultaneously as part of a team. This results in our people''s ability to work in perfect harmony despite coming from different disciplines. As of March 31, 2016, the number of employees on the payroll of the Company was 53.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is provided in Annexure II forming part of this report.
WHISTLE BLOWER POLICY /VIGIL MECHANISM POLICY:
The Company has adopted a Whistle Blower Policy/Vigil Mechanism Policy for directors and employees to report their genuine concerns. Details of the policy are provided in the Corporate Governance Report, which forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As a part of its Corporate Social Responsibility (CSR) initiative, the Company has undertaken project in accordance with Schedule VII of the Companies Act, 2013 and the Company''s CSR policy.
The average net profit of the Company, computed as per Section 198 of the Companies Act, 2013 during the three immediately preceding financial years was Rs, 87.03 lakhs. It was required to spend Rs, 1.74 lakhs on CSR activities during the Financial Year 2015-16, being 2% of the average net profits of the three immediately preceding financial years.
The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided in Annexure III forming part of this report.
EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return in form MGT-9 pursuant to Section 92(3) of the Companies Act, 2013 for the financial year ended March 31, 2016 is provided in Annexure IV forming part of this report.
DEPOSITS:
The Company has not accepted any deposit from public/ shareholders in accordance with Section 73 of the Companies Act, 2013 and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance Sheet.
During the year 2015-16, the Company has accepted deposits only from directors of the Company which are exempt as per the provision of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. The declarations have been obtained from the directors in terms of Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014. Details of the deposits accepted from directors are provided in notes to financial statement.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY:
Details of Loans, Guarantees and Investments are provided in the notes to Financial Statement.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
- Conservation of Energy:
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy have not been provided considering the nature of activities undertaken by the Company during the year under review.
- Technology Absorption:
During the year, Company has not absorbed or imported any technologies.
- Foreign exchange earnings & outgoings:
Details of foreign exchange earnings & outgoings of the company made during the year are provided in notes to Financial Statement.
OTHER DISCLOSURES:
The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
- No material changes and commitments which could affect the Company''s financial position have occurred between the end of the financial year of the Company and date of this report.
- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
- No complaint received from any employee, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under.
CAUTIONARY STATEMENT:
Statements in this Board''s Report and Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking within the meaning of applicable securities, laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include change in government regulations, tax laws, economic & political developments within and outside the country and such other factors.
ACKNOWLEDGMENTS AND APPRECIATION:
The Directors take this opportunity to express the sincere appreciation for the incredible support and overwhelming co-operation from bank, financial institutions, customers, suppliers and all other business associates of the Company.
The Directors give their warm gratitude to the shareholders for their faith in the Company. The directors also sincerely appreciate the professionalism and dedication displayed by the employees of the Company.
For and on behalf of the Board of Directors
Kumar S. Taurani
Chairman and Managing Director
Place: Mumbai DIN: 00555831
Date: May 25, 2016
Mar 31, 2015
Dear Members,
The Directors are pleased to present the Nineteenth Annual Report
along with the Audited Financial Statements for the financial year
ended March 31,2015. The Management Discussion and Analysis is also
included in this Report.
OVERVIEW OF THE ECONOMY:
The Global economy continued with its challenge of building strong
growth. According to the International Monetary Fund (IMF), the world
global output for the year 2014 grew by a modest 3.4 percent, same as
2013. Complex factors like the geo-political situation in Ukraine and
the Middle East and uncertainty in Greece impacted growth. Another key
event in the year was the dramatic fall in international oil prices,
particularly since September2014. This had a positive impact, driving
consumption and reducing prices.
In India, the year 2014 was a year that will be remembered as a year of
structural reforms. The new government initiated several reforms in
core sectors like banking, insurance, infrastructure and defence. These
had a positive cascading impact across sectors and industries. Investor
and consumer confidence revived remarkably during the year. Moreover,
with the new methodology for measuring GDP growth, the Indian GDP
growth was revised to 7.3 per cent for the year 2014-15 compared to 6.9
percent in the year 2013-14. Inflation remained at benign levels,
falling to around 5 per cent toward the latter half of the year due
totalling oil prices and below 5 per cent in April 2015.
THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY:
The overall sentiments in the Indian M&E industry reflected the renewed
positivity and optimism of the Indian economy. There were many positive
developments for the M&E industry during the year. Digitisation
continues with its rapid strides penetrating deeper into rural areas,
helped by proliferation of low-cost smart devices and falling internet
costs. One of the highlights of the year was the announcement of
DIGITAL INDIA initiative by the government. A programme aimed at
digitally empowering the society and knowledge economy.
The M&E industry grew by 11.7 percent in 2014 to US$ 1,026 billion, as
per report by FICCI-Frames 2015. Digital advertising continued its
relentless march, growing by 44.5 percent in 2014. This is hardly
surprising, considering that in 2014, India topped as the world's
fastest growing smartphone market. By the end of 2014, India already
had around 116 million internet enabled smartphones, and by 2019, this
is expected to rise to 435 million.
FILMS:
The year 2014 was a mixed year for the Indian film industry. While
category A films continued to perform well at the box-office, other
films did neither have compelling content nor the pull of a top-league
actor to attract audiences. Content continues to remain central to the
success of films, as audiences have become more discerning and
selective, given the rising costs of tickets as well as availability of
other entertainment platforms.
The main source of revenue remains domestic theatres, contributing as
much as 74 per cent. During the year, domestic theatrical revenues
suffered due to lack of content-oriented films. The gross box office
collection of top 10 Hindi films in 2014 grew by 2.4 per cent over
2013. However, box office collection for the next 10 films dropped by 3
percent.
There was a marked difference in the Cable & Satellite (C&S) rights
acquisition strategy by broadcasters. Barring category A films, prices
for C&S rights declined overall during the year.
The year 2014 saw a record number of regional films being produced. 287
Tamil movies were released during the year, followed by 255 Telugu
movies in 2014. Compared to these, the number of Hindi movies released
during the year was 216. The Marathi and Punjabi movies also had a
significant year, with the animated Punjabi movie Chaar Saahibzaade
generating INR 700 million at the box office.
MUSIC:
Music continues to remain a small but very critical stream for the M&E
industry. The music industry was worth INR 9.8 billion in 2014,
increasing by 2.3 percent. It is expected to cross INR 10 billion in
the year 2015, as per FICCI-Frames 2015 report.
The year 2014 saw many production houses raising the prices for the
music rights of their films. During the year, music labels continued to
acquire music rights much before the theatrical release of films.
Digitalisation continues to be the key driver in the music space.
Digital channels already account for more than 50 per cent of the
overall size of the music industry in the country, while physical sales
have fallen by around 30-35 per cent on a year-to-year basis.
The continued popularity of music streaming across digital marketplaces
like iTunes and Google Play, and from streaming platforms like Saavn
and Gaana, continue to drive digital consumption of music.
For the music industry, the long awaited and highly anticipated auction
of Phase III of radio licenses also saw revival of proceedings. The
first auctions are expected to take place in the latter half of 2015,
with the government giving its go-ahead for partial auctions for 135
channels in 69 cities.
BUSINESS OVERVIEW:
With an unwavering focus on providing wholesome family entertainment,
TIPS has emerged as one of the most respected and renowned companies in
the Indian M&E industry. From humble beginning in 1975, the vision and
venture of the founders - Mr. Kumar Taurani and Mr. Ramesh Taurani, has
seem TIPS make rapid progress and evolve into a professional and
corporate house with a presence across music, film production and
distribution.
MUSIC continues to remain the forte of TIPS. The Company today boasts
of a huge library with a collection of over 25000 songs across all
genres and major languages. The music business of the Company continues
to deliver strong performance. Powered by the growing penetration of
digitisation, the music business of the Company holds massive potential
for future growth as new technology, new consumption platforms and new
delivery formats evolve, thus unlocking more value from the TIPS music
library. The Phase III auction for radio licences slated to commence in
2015 are expected to open up yet more avenues for monetization of the
Company's digital assets.
TIPS is also known for production of family entertainment films. TIPS
films are always family entertainers providing clean, light- hearted and
enjoyable experience for the family. Over the years, the Company has
delivered some top box office hits like RACE, KISMAT CONNECTION, RACE2,
AJAB PREM Kl GHAZAB KAHANI, RAJA HINDUSTANI etc. TIPS is also a leading
producer of Punjabi films with an enviable record an all time hit in
Punjabi cinema.
FINANCIAL RESULTS:
Financial Results of the Company for the year under review along with
the figures for previous year are as follows:Â
(Rs. in Lacs)
Particulars 2014-15 2013-14
Income 10380.54 10551.27
Profit/(Loss) before Depreciation,
Interest, Provision for
Contingencies and Taxation 1664.00 (294.01)
Less: Depreciation and Interest 1329.49 1253.65
Profit/(Loss) before Provision for
Taxation, Extraordinary and Prior
Period year items 334.51 (1547.66)
Less: Provision for Taxation
Current Tax 59.13 0.00
Wealth Tax 3.82 3.66
Taxes in respect of earlier years 1.94 72.59
Profit/(Loss) after Provision for
Taxation but before Extraordinary
and Prior Period year items 269.61 (1623.91)
Less: Prior Period Expenses 0.00 0.00
Profit/(Loss) after Taxation 269.61 (1623.91)
Add: Balance Brought Forward 2302.00 4105.60
Profit/(Loss) after Taxation available
for Appropriation 2571.61 2481.69
Dividend 153.59 153.59
Dividend Tax 31.27 26.10
General Reserves 513.50 493.50
Share Capital 1535.86 1535.86
Reserves & Surplus 5489.10 5446.22
PERFORMANCE REVIEW:
During the year, Tips came up with its production, a comedy film
"Entertainment" on August 8, 2014 directed by writers-turned- directors
Sajid-Farhad, starring Akshay Kumar, Tamanna Bhatia, Paresh Rawal,
Johny Lever, Sonu Sood, Krushna Abhishek and others. The film was
appreciated for screenplay, cinematography, dialogues and the actor's
portrayal of their respective characters.
The Company's music business continues to smartly monetize the
impressive music library. The Company was amongst the first in the
industry to understand the huge implications of the digital revolution,
and started digitising its entire library. Today, the Company has a
digital library of over 25000 songs, which are available for streaming
and download across leading industry digital marketplaces like iTunes
and Google Play, as well as popular streaming platforms like Saavn and
Gaana. The music revenue for the year 2014-15 was Rs. 3221.78 lacs as
compared to Rs. 3052.19 lacs in the previous year.
The Company earned total revenue including other income of Rs.
10380.54 lacs as compare to the previous year of Rs. 10551.27 lacs.
The net profit after tax for the year stood at Rs. 269.61 lacs as
compared to the net loss of Rs. 1623.91 lacs in the previous year.
DIVIDEND:
Your Directors recommend dividend of @ 10% (ten percent) i.e. Rs.
1.00/- (one rupee) per share on 15358640 fully paid-up Equity Shares of
Rs. 10/- each of the Company for the year ended March 31, 2015. The
proposed dividend, if approved, at the Annual General Meeting, will
absorb a sum of Rs. 153.59 lacs (Previous Year being Rs. 153.59 lacs)
and dividend Tax of Rs. 31.27 lacs (Previous Year being Rs.26.10
lacs).
TRANSFER TO RESERVES:
The Company transferred a sum of Rs. 20 lacs to the General Reserve
and an amount ofRs. 2324.88 lacs is retained in the Profit and Loss
Account.
SHARE CAPITAL:
The paid up Equity Share Capital as at March 31,2015 stood at Rs.
1535.86 lacs. During the year under review, the Company has not issued
shares with differential voting rights nor has granted any stock
options or sweat equity. As on March 31,2015, none of the Directors of
the Company hold instruments convertible into equity shares of the
Company.
REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE
COMPANIES:
The Company does not have any subsidiary, associate and joint venture
Company.
CORPORATE GOVERNANCE REPORT:
In compliance with the provisions of Clause 49 of the Listing
Agreement, a separate report on Corporate Governance along with a
certificate from the Auditors on its compliance, forms part of this
Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
* Cessation from Directorship:
Due to pre-occupied with her professional commitments, Ms. Sunita
Menon, Independent Director of the Company has resigned from the post
of directorship with effect from May 7,2014.
The Board takes this opportunity to place on record its appreciation
for the support and invaluable contribution made by Ms. Sunita Menon
during her tenure as Independent Director of the Company.
* Director Retiring by Rotation:
In terms of Section 152 of the Companies Act, 2013, Mr. Kumar Taurani,
Director of the Company is liable to retire by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-appointment. The Board recommends the same for your approval.
* Re-appointment of Managing Directors:
The Nomination & Remuneration Committee and the Board have approved the
re-appointment of Mr. Kumar Taurani as Chairman & Managing Directors
and Mr. Ramesh Taurani as Managing Director for period of 3 years w.e.f
July 1,2015 to May 31,2018 .Approval of the shareholders is sought for
the same in the ensuing Annual General Meeting.
* Appointment of Independent Directors and declaration of independence:
In compliance with the provisions of Sections 149, 152, Schedule IV and
other applicable provisions, if any, of the Companies Act, 2013 read
with Companies (Appointment and Qualification of Directors) Rules,
2014, Mr. Amitabh Mundhra, Mrs. Radhika Pereira and Mr. Vijay Agarwal
were appointed as Independent Directors on the Board of Directors of
the Company at the 18th AGM of the Company held on August 8, 2014, to
hold office up to five consecutive years.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed under sub-section (6) of Section 149 of the
Companies Act, 2013.
* Appointment of Key Managerial Personnel:
Mr. Ishwar T. Gursahani, V.P - Legal & Corporate Affairs of the Company
has been appointed as a Chief Financial Officer of the Company w.e.f.
June 27,2014.
Pursuant to the provisions of Section 203 of the Companies Act, 2013,
the appointment of Mr. Kumar Taurani and Mr. Ramesh Taurani as Chief
Executive Officer, Mr. Ishwar T. Gursahani as a Chief Financial
Officer and Ms. Bijal Patel as a Company Secretary, were formalized as
the Key Managerial Personnel of the Company.
BOARD EVALUATION:
Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the
Listing Agreement, the Board has carried out performance evaluation.
The manner in which the evaluation carried out has been explained in
Corporate Governance Report.
DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act, 2013, in relation to
the audited financial statements of the Company for the year ended
March 31,2015, the Board of Directors hereby confirms that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) such accounting policies have been selected and applied
consistently and the Directors made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at March 31, 2015 and of the profit/loss
of the Company for that year;
(c) proper and sufficient care was taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) the annual accounts of the Company have been prepared on a going
concern basis;
(e) internal financial controls have been laid down to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively;
(f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
DETAILS OF BOARD AND COMMITTEES MEETING:
* Board Meetings:
The Board of Directors met five times during the financial year ended
March 31,2015 on May 9, 2014, June 27, 2014, Augusts, 2014, November 12,
2014 and February 5, 2015. Details of the Board meetings and attendance
of the directors are provided in the Corporate Governance Report, which
forms part of this Annual Report.
* Committees of the Board:
With a view to have a more focused attention on business and for better
governance and accountability, the Board has constituted the mandatory
committees viz. Audit Committee, Stakeholders' Relationship Committee,
Nomination and Remuneration Committee and Corporate Social
Responsibility Committee.
The details with respect to the compositions, roles, terms of reference
etc. of relevant committees are provided in the Corporate Governance
Report of the Company, which forms part of this Annual Report.
RELATED PARTY TRANSCATIONS:
All contracts/ arrangements/ transactions entered by the Company during
the financial year with related parties were in the ordinary course of
business and on an arm's length basis. Thus Disclosure in form AOC-2
is not required.
Further, during the year, the Company had not entered into any
contract/ arrangement/ transaction with related parties which could be
considered material in accordance with the policy of the Company on
materiality of related party transactions. All related party
transactions are placed before the Audit Committee and Board for
approval.
The details of the related party transactions as required under
Accounting Standard - 18 are set out in note to the financial
statements forming part of this Annual Report.
The Policy on Related Party Transactions as approved by the Board has
been uploaded on the website of the Company. The web-link of the same
has been provided in the Corporate Governance Report.
AUDITORS:
* Statutory Auditors:
M/s. SSPA & Associates, Chartered Accountants, (Firm Registration No:
131069W) who are Statutory Auditors of the Company hold office up to
the forthcoming Annual General Meeting and are recommended for
re-appointment to audit the accounts of the Company for the financial
year 2015-16.
The consent of the Auditors along with certificate under Section 139 of
the Companies Act, 2013 has been obtained from the auditors to the
effect that their appointment, if made, shall be in accordance with the
prescribed conditions and that they are eligible to hold the office of
Auditors of the Company.
* Secretarial Auditors:
Provisions of Section 204 read with rules made thereunder, M/s. N.L.
Bhatia & Associates, Practicing Company Secretaries (C.P No. 422) had
been appointed to undertake Secretarial Audit of the Company. The
report of the Secretarial Auditor is annexed herewith as Annexure I and
forms part of this Report.
The said report does not contain any observation or qualification
requiring explanation or comments from the Board under Section 134(3)
of the Companies Act, 2013.
* Internal Auditors:
Pursuant to provisions of Section 138 read with read with rules made
thereunder, the Board has appointed M/s. Maheshwari & Co., Chartered
Accountants (Firm Registration No: 105834W), as an Internal Auditors of
the Company to check the internal controls and functioning of the
activities and recommend ways of improvement. The Internal Audit is
carried out quarterly basis, the report is placed in the Audit Committee
Meeting and the Board Meeting for their consideration and direction.
Their scope of work is as decided by the Audit Committee and the Board
of Directors.
The Internal Financial Controls with reference to financial statements
as designed and implemented by the Company are adequate. During the
year under review, no material or serious observation has been received
from the Internal Auditors of the Company for inefficiency or
inadequacy of such controls.
INTERNAL CONTROL SYSTEMS:
The Company has adequate internal controls systems in place
commensurate with the nature of the Company's business, size and
complexity of its operations. All processes are well-defined and
properly documented. All transactions are properly recorded and all it
is ensured that all expenses incurred are within defined budgetary
allotments. The Company ensures all rules, laws and statutes are
strictly followed and complied with. The Company regularly undertakes
internal audit under the supervision of the Internal Audit committee.
Any discrepancies or inconsistencies found during such internal audits
are immediately corrected.
RISK MANAGEMENT:
In accordance with Clause 49 of the Listing Agreement, the Board has
approved the Risk Assessment and Minimization Policy to avoid events,
situations or circumstances which may lead to negative consequences on
the Company's businesses, and define a structured approach to manage
uncertainty and to make use of these in their decision making pertaining
to all business divisions and corporate functions. Key business risks
and their mitigation are considered in the business plans and in
periodic management reviews.
Some of the risks and threats that the company is exposed to are-
* Piracy Risk:
Piracy has been one of the biggest problems for the M&E industry
globally. The industry has been working relentlessly to reduce this key
threat. With the advent of internet and digitisation, this threat
continues to be a major source of revenue loss for all the stakeholders
in the industry.
The industry has been co-operating with the government to clamp down on
this threat. During the year 2014, there was a 10 per cent reduction in
piracy cases registered in India. The industry is increasingly
leveraging latest advancement in technology to cope with this issue. An
example of this is the use of Cube technology to catch film exhibitors
and syndicates using pirated versions of films.
* Production Risk:
Production risks can be defined as the risk getting production extended
the projected date or the risk of over spending during production. It
requires large outlays of money that cannot be recovered if the project
fails at any stage. The planned release may have to be delayed beyond
schedule. Such delay in production may throw the whole production
schedule out of gear and escalate the cost of the movie.
* Spiraling Costs:
The two largest cost components of a film are the fees of stars and the
cost of promotion. The A list stars continue to command exorbitantly
high fees, that can sometimes go as high as 40 per cent of the total
budget of the film. Advertising and Promotions account for 15-20 per
cent of the total film budget. With the theatrical revenue window
narrowing down to the first weekend, most producers are forced to make
this enormous marketing spend, as it has a direct impact on the box
office collections of the film.
* Infrastructure and Talent Development:
While India is the largest producer in terms of films produced, it
lacks a long way behind in both infrastructure and talent development.
For example, compared to 125 screens per million people in the USA,
India still has only 7 screens per million people. In terms of other
infrastructure too, India lags behind considerably. There are only four
film cities in the country, indicating a huge gap. Opening more
institutions like Film and Television Institute of India will go a long
way in augmenting India's talent pool for the industry.
OPPORTUNITIES:
The opportunities observed are based on the trends noticed in past
couple of years, which continues to be relevant. Some of the key ones
are as follows:
* Digitisation:
Digitisation has impacted all aspects of the M&E industry - right from
production to distribution to exhibition to sales of tickets. The next
wave of growth in the overall M&E industry is expected to be driven by
increased digitisation. Over the year, there have been far-reaching
changes in the form of availability of low-cost smart devices and
dropping data plans. In spite of this, India still has a low internet
penetration of around 19 percent, indicating a huge growth potential.
The advent of 4G services, the increasing adoption of 3G in urban areas
and 2G in rural areas are all strong signals of the immense growth
potential that will be unlocked by digitisation.
* Regional Markets:
The year 2014 saw a huge surge in production and release of regional
films. From Tamil to Telugu and from Marathi to Punjabi, all the
regional film markets performed excellently. The share of theatrical
revenues from regional films has been rising from around 12-13% in 2013
to almost 20-21% in 2014, particularly in Tier 2 and Tier 3 cities, as
per industry data.
* Overseas Theatricals:
The growing popularity of Bollywood films in the overseas markets is
another growing opportunity. Over the year, new markets like China and
Europe have seen a huge surge in interest in Hindi films. However, the
share of overseas theatricals is still around 10-25 per cent, much
lower than the almost 60 per cent for Hollywood films. As more and more
new markets like Lebanon, Burma and Iraq continue to be mesmerised by
Hindi films, the overseas theatrical avenue is poised fora big leap.
OUTLOOK:
India is back on the fast-track of economic growth. Both the
International Monetary Fund (IMF) and the World Bank have forecast the
country to grow at 7.5 per cent for the year 2015 and 7.8 per cent in
the year 2016. The long-term structural reforms taken by the government
will continue to drive further growth in the key sectors. Oil prices
are expected to remain low in the short-term, easing pressure on
inflation as well as prices. Investor confidence and sentiments are
likely to remain positive.
The India M&E industry is also expected to continue with its growth
trajectory. It is expected to grow at a Compounded Annual Growth Rate
(CAGR)of 13.9 per cent from 2014-19, and reach INR 1,964 billion in
2019. The highest growth is expected to happen in the digital
advertising space, which is expected to grow ata CAGR of 30.2 per cent
from 2014-19, while the film and music segments are expected to grow at
CAGR of 10 percent 14 per cent in the same period.
AUDITORS' REPORT:
In the opinion of the directors, the notes to financial statements are
self explanatory and adequately explain the matters, which are dealt
within the Auditors' Report. In case of qualified opinion of the
Auditors with respect to non-recognition of differed tax explained in
note no. 33 of the notes to financial statements.
HUMAN RESOURCES:
TIPS firmly believes in and has consistently practiced progressive HR
values. The Company inculcates the values of transparency,
professionalism and accountability in its operations to generate
long-term benefits for its shareholders, customers, employees and
society alike. At TIPS, there is consistent emphasis on each
individual's sense of responsibility, while simultaneously as part of a
team. This results in our people's ability to work in perfect harmony
despite coming from different disciplines. As of 31 March 2015, the
number of employees on our payroll was 59.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197 of the Companies Act, 2013
read with Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 in respect of employees of the Company is
provided in Annexure II forming part of this report.
WHISTLE BLOWER POLICY /VIGIL MECHANISM POLICY:
Pursuant to provisions of Section 177 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement, the Board of Directors in its
meeting held on November 12,2014 has adopted a "Whistle Blower Policy/
Vigil Mechanism Policy" for directors and employees of the Company.
Details of the policy are provided in the Corporate Governance Report,
which forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY(CSR):
Pursuant to provision of Section 135 of the Companies Act, 2013 read
with the Companies (Corporate Social Responsibility Policy) Rules,
2014, the Board has approved CSR Policy based on the recommendation of
the CSR Committee. The Company has initiated activities in accordance
with the said Policy, the details of which have been prescribed in
Annexure III.
EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return in form MGT-9 pursuant to Section 92(3) of
the Companies Act, 2013 for the financial year ended March 31,2015 is
provided in Annexure IV forming part of this report.
DEPOSITS:
During the year 2013-14, The Company had accepted the deposits from
public and members of the Company within the meaning of Section 58A of
the Companies Act, 1956 read with rules made thereunder. The outstanding
deposits as on March 31, 2014 were Rs. 46 lacs and the same has been
repaid on or before March 31, 2015 in accordance with Section 74 of the
Companies Act, 2013.
During the year 2014-15, the Company has accepted the deposits only
from directors of the Company which are exempt as per the provision of
Section 73 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014. The declarations have been
obtained from the directors in terms of Rule 2(c)(viii) of the
Companies (Acceptance of Deposits) Rules, 2014. Details of the deposits
accepted from directors are provided in notes to financial statement.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY:
Details of Loans, Guarantees and Investments are provided in the notes
to Financial Statement.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
* Conservation of Energy:
The particulars as required under the provisions of Section 134(3)(m)
of the Companies Act, 2013 read with rule 8 of the Companies (Accounts)
Rules, 2014 in respect of conservation of energy have not been provided
considering the nature of activities undertaken by the Company during
the year under review.
* Technology Absorption:
During the year, Company has not absorbed or imported any technologies.
* Foreign exchange earnings & outgoings:
Details of foreign exchange earnings & outgoings of the company made
during the year are provided in notes to financial Statement.
OTHER DISCLOSURE:
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
* No material changes and commitments which could affect the Company's
financial position have occurred between the end of the financial year
of the Company and date of this report.
* No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
* No compliant received from any employee, pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and rules made thereunder.
CAUTIONARY STATEMENT:
Statements in this Board's Report and Management Discussion and
Analysis describing the Company's objectives, expectations or
predictions may be forward looking within the meaning of applicable
securities, laws and regulations. Actual results may differ materially
from those expressed in the statement. Important factors that could
influence the Company's operations include change in government
regulations, tax laws, economic & political developments within and
outside the country and such other factors.
ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to express the sincere appreciation
for the incredible support and overwhelming co- operation from bank,
financial institutions, customers, suppliers and all other business
associates of the Company.
Your Directors give their warm gratitude to the shareholders for their
faith in the Company. The directors also sincerely appreciate the
professionalism and dedication displayed by the employees of the
Company.
For and on behalf of the Board of Directors
Sd/-
Kumar S. Taurani
Place: Mumbai DIN: 00555831
Date: May 8, 2015 Chairman and Managing Director
Mar 31, 2014
Dear Members,
The Directors hereby present their Eighteenth Annual Report along with
the Audited Accounts of the Company for the financial year ended March
31, 2014.
HIGHLIGHTS OF FINANCIAL RESULTS:
Financial Results of the Company for the year under review along with
the figures for previous year are as follows:-
(Rs. in Lacs)
Particulars 2013-14 2012-13
Income 10,551.27 13,925.28
Profit/(Loss) before Depreciation, Interest,
Provision for Contingencies and Taxation (294.01) 2,111.63
Less: Depreciation and Interest 1,253.65 649.86
Profit/(Loss) before Provision for Taxation,
Extraordinary and Prior Period year items (1,547.66) 1,461.77
Less : Provision for Taxation
Current Tax 0.00 287.89
Wealth Tax 3.66 5.15
Excess / Short Provisions 72.59 0.00
Profit/(Loss) after Provision for Taxation
but before Extraodinary and Prior Period
year items (1,623.91) 1,168.74
Less: Prior Period Expenses 0.00 0.00
Profit/(Loss) after Taxation (1,623.91) 1,168.74
Add: Balance Brought Forward 4,105.60 3,431.21
Profit/(Loss) after Taxation available
for Appropriation 2,481.69 4,599.95
Dividend 153.59 322.53
Dividend Tax 26.10 54.81
General Reserves 493.50 493.50
Share Capital 1,535.86 1,535.86
Reserves & Surplus 5,446.22 7,249.82
DIVIDEND:
Your Directors recommend dividend of @ 10% (at ten per cent) i.e. Rs.
1.00/- (one rupee) per share on 1,53,58,640 fully paid-up Equity Shares
of Rs. 10/- each of the Company for the year ended March 31, 2014. The
proposed dividend, if approved, at the Annual General Meeting, will
absorb a sum of Rs. 153.59 lacs (Previous Year being Rs. 322.53 lacs)
and Dividend Tax of Rs. 26.10 lacs (Previous Year being Rs. 54.81
lacs). The Dividend Tax is provided at the rate applicable on the day
on which the accounts were approved by the Board of Directors.
REVIEW OF OPERATION:
(a) Turnover:
The turnover of the Company for F.Y. 2013-14 in comparison with the
previous year 2012-13 are as under:
(Rs. in Lacs)
Particulars FY 2013-14 FY 2012-13
Royalty Receipt (Net) 3,047.02 3,037.73
Film Production & Distribution 7,314.46 10,476.84
Audio Product Sales 5.16 4.89
Advertisement Income 0.00 259.54
Other Income
Scrap Sales 0.00 8.26
Total Turnover 10,366.64 13,787.26
(b) Business Spheres:
Your Company operates dynamically in two spheres:
* Film Production & Distribution
* Music
* Film Production and Distribution:
During F.Y. 2013-14, Tips has produced and released two films and
received mixed response from audiences.
"Ramaiya Vastavaiya", Rom-Com film was directed by director-
actor-choreographer Prabhudheva with debutant Girish Kumar, Shruti
Hassan and others. It was released on July 19, 2013.
"Phata Poster Nikla Hero", action comedy film directed by one of the
most commercially successful director Rajkumar Santoshi starring Shahid
Kapoor and Ileana D''Cruz in lead roles. It was released on September
20, 2013.
* Music:
Tips is one of the few Indian entertainment companies with rich
industry experience of over 25 years to realize the potential of social
media and the digital platform. Music in Indian cinema is another
substantial revenue generator where fate of any bollywood movie rest on
music of the film.
Tips has been exploring new avenues for exploitation of digital music
market in India and across the globe. It has been contracting with
various websites and licensing its extensive repertoire for
exploitation through streaming and download services, mobile services
like caller ring back tones, full track downloads, videos of the songs,
dialogues, wallpapers, etc and continues to be a significant component
in the revenues of the Company.
The melodious song "Jeene Laga Hoon" from the film Ramaiya Vastavaiya,
sung by magical voices of Atif Aslam and Shreya Goshal, become a major
hit at the time of launch and continues on the popular video viewing
site and making it to the top of the list. YouTube India has declared
"Jeene Laga Hoon" as the No. 1 trending music video of 2013.
In less than a year, the company has seen increase of 50 percent in its
fan base from 2 million in 2013 to 5 million fan mark, making it one of
the largest and most active entertainment brands on facebook. The
number of fans on the page has been growing in leaps and bounds and
this is increasing popularity on facebook.
FUTURE OUTLOOK
The Hindi film industry is the largest contributor to the industry''s
revenue, followed by the South Indian movie industry and other language
cinema industries. In the 20th Century, Indian cinema took huge strides
towards growth and in recent years Indian film industry has undergone a
massive change. Today, 21st Century, Indian cinema stands at par with
Hollywood cinema.
Apart from regular screenings at major international film festivals,
the overseas market contributes a sizeable chunk to box office
collections. The Indian film industry has reached out further to
international audiences through mediums such as DVDs and by screening
of films in their country of residence wherever commercially feasible,
which contribute substantially to the overall revenue to cinema.
Regular foreign Investments made by major global studios such as 20th
Century Fox, Sony Pictures, and Warner Bros put a stamp of confirmation
that bollywood has etched itself on the global podium.
On music front, availability of quality music has enhanced the end user
experience. Company has million hit on social networking site, looking
at figures, Company has been expanding its scope for distribution of
music though internet.
Presently, The Company is in process of production of its film "It''s
Entertainment" directed by Sajid- Farhad and starring Akshay Kumar,
Tamanna Bhatia, Paresh Rawal, Johny Lever, Sonu Sood, Krushna Abhishek
and others. The movie will hit the Silver Screen in month of August,
2014.
RELEASED THE PLEDGE SHARES OF PROMOTER & PROMOTER GROUP:
As on March 31, 2013, Promoter & Promoter Group were holding
1,07,12,762 equity shares out of them 5,00,000 equity shares
representing 4.67% of the equity share capital of the Company were
pledge. All the Pledged shares of the Promoter & Promoter Group were
released on May 18, 2013.
All the necessary disclosures as per the Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011 were duly made to the Stock Exchanges.
PUBLIC DEPOSITS:
During the year, under review, the Company had accepted deposits from
public within the meaning of Section 58A of the Companies Act, 1956 and
the rules made there under and that none of matured deposits have been
unpaid to the depositor(s) during the year. The outstanding deposits as
on March 31, 2014 were Rs. 280 lacs as against Rs.1,766 lacs on March
31, 2013.
DIRECTORS:
The Board consists of Executive and Non- Executive independent
directors including who have wide and varied experience in different
disciplines of corporate functioning.
In terms of Section 152 of the Companies Act, 2013, Mr. Ramesh Taurani,
Director of the Company is liable to retire by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
re-appointment.
In terms of Section 149 of the Companies Act, 2013, which has come into
force with effect from April 1, 2014, an Independent Director shall
hold office for a term up to five consecutive years on the Board of a
company and is not liable to retire by rotation.
In compliance with the provisions of Section 149 read with Schedule IV
of the Act, the appointment of Mr. Amitabh Mundhra, Mrs. Radhika
Pereira and Mr. Vijay Agarwal as Independent Directors is being placed
before the Members in General Meeting for their approval. The Company
has received declarations from all the Independent Directors of the
Company confirming that they meet with the criteria of independence as
prescribed under sub-section (6) of Section 149 of the Companies Act,
2013 Members are requested to refer to the Notice of the Annual General
Meeting and the Explanatory Statement for details of the qualifications
and experience of the Directors.
Ms. Sunita Menon has resigned from the post of directorship with effect
from May 7, 2014. The Board takes this opportunity to place on record
its appreciation for the support and invaluable contribution made by
Ms. Sunita Menon during her tenure as Independent Director of the
Company.
AUDITORS AND AUDITORS'' REPORT:
M/s. B.K. Khare & Co., Chartered Accountants, have resigned as the
Statutory Auditors of the Company vide their letter dated June 16,
2014. The Board has proposed that M/s. SSPA & Associates, Chartered
Accountants be appointed as the Statutory Auditors of the Company to
fill up the casual vacancy caused due to resignation of M/s. B.K. Khare
& Co., and their appointment is subject to approval of members in the
ensuring Annual General Meeting of the Company.
A resolution proposing appointment of M/s. SSPA & Associates as the
Statutory Auditors of the Company pursuant to Section 139 of the
Companies Act, 2013 forms part of the Notice.
M/s. B.K. Khare & Co. has been Statutory Auditors of your Company since
2004 and the Board place on record its appreciation for the services
rendered by them as the Auditors of the Company.
The observations and comments given in the Auditors'' Report read
together with notes to accounts are self-explanatory and do not require
further explanation.
INTERNAL CONTROL SYSTEM:
The Company has appointed M/s. Maheshwari & Co. - Chartered Accountants
as its Internal Auditors to check the internal controls and functioning
of the activities and recommend ways of mprovement. The Internal Audit
is carried out quarterly basis, the report is placed in the Audit
Committee Meeting and the Board Meeting for their consideration and
direction. Their scope of work is as decided by the Audit Committee and
the Board of Directors.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
directors based on the representation received from the management
state that:
1. In the preparation of the accounts, the applicable accounting
standards have been followed and there are no material departures.
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgment and estimates were made so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2014
and of the profit of the Company for that period.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities.
4. The annual accounts of the Company have been prepared on a going
concern basis.
SUBSIDIARY COMPANIES
The Company does not have any subsidiary Company within the meaning of
section 4 of the Companies Act, 1956. Thus the Company is not required
to furnish a statement pursuant to the provisions of Section 212 of the
Companies Act, 1956.
CONSERVATION OF ENERGY
Considering the Company''s business activities, information required
under Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is not applicable to the Company.
TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
During the year, Company has not absorbed or imported any technologies.
FOREIGN EXCHANGE EARNINGS & OUTGOINGS
During the year ended March 31, 2014, the Company has incurred/
received foreign exchange towards the following:
(Rs. in Lacs)
Particulars 2013-14 2012-13
Outgoings:
(A) Travelling Expenses 0.21 0.64
(B) Film Production Expenses 1,845.76 1,690.51
Earnings:
(A) F.O.B. value of Exports 508.92 NIL
(B) Royalty (net) 739.78 388.44
CORPORATE GOVERNANCE
The Report on Corporate Governance alongwith the Statutory Auditors''
Certificate regarding compliance of the conditions of corporate
governance pursuant to Clause 49 of the Listing Agreement is annexed
hereto and forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management discussion and Analysis as required under the Clause 49 of
the Listing Agreement is annexed hereto and forms part of the Annual
Report.
APPRECIATION
Your Directors takes this opportunity to express their sincere
appreciation for the incredible support and co-operation by the
employees of the Company which they recognize as one of the prime
factors in growth of the Company. Secondly, the Directors give their
warm gratitude to the shareholders for their faith in the Company.
Lastly, the Directors are grateful for the overwhelming co-operation
received from the bankers, lenders, customers and associates of the
Company. The Directors strongly believe the Company has been able to
reach its current level because of the constant support and best wishes
of all these people.
For and on behalf of the Board of Directors
Sd/-
Place : Mumbai Kumar S. Taurani
Date : June 27, 2014 Chairman & Managing Director
Mar 31, 2013
To, The Members of Tips Industries Limited
The Directors hereby present their Seventeenth Annual Report along
with the Audited Accounts of the Company for the fnancial year ended
31st March, 2013.
Highlights of Financial Results:
Financial Results of the Company for the year under review along with
the fgures for previous year are as follows:Â
(Rs. in ''Lacs'')
Particulars 2012-13 2011-12
Income 13925.28 7713.12
Proft/(Loss) before Depreciation,
Interest, Provision for Contingencies
and Taxation 2111.63 1760.42
Less: Depreciation and Interest 649.86 695.20
Proft/(Loss) before Provision for
Taxation, Extraordinary and Prior
Period year items 1461.77 1065.22
Less: Provision for Taxation
Current Tax 287.89 154.67
Wealth Tax 5.15 2.52
Excess / Short Provisions 0.00 23.27
Proft/(Loss) after Provision for
Taxation but before Extraordinary and
Prior Period year items 1168.74 884.76
Less: Prior Period Expenses 0.00 4.14
Proft/(Loss) after Taxation 1168.74 880.62
Add: Balance Brought Forward 3431.21 2987.54
Proft/(Loss) after Taxation
available for Appropriation 4599.95 3868.16
Dividend 322.53 319.17
Dividend Tax 54.81 51.77
General Reserves 493.50 376.50
Share Capital 1535.86 1595.87
Reserves & Surplus 7249.82 6861.56
Dividend:
Your Directors recommend dividend of @ 21% (at twenty one per cent)
i.e. Rs. 2.10/- (Two rupees and ten paise only) per share on
1,53,58,640 fully paid-up Equity Shares of Rs. 10/- each of the Company
for the year ended 31st March, 2013. The proposed dividend, if
approved, at the Annual General Meeting, will absorb a sum of Rs.
322.53 lacs (Previous Year being Rs. 319.17 lacs) and Dividend Tax of
Rs. 54.81 lacs
(Previous Year being Rs. 51.77 lacs). The Dividend Tax is provided at
the rate applicable on the day on which the accounts were approved by
the Board of Directors.
Transfer to Reserves
An amount of Rs. 117 Lacs is transferred to General Reserves in the
Balance Sheet.
Review of Operations:
(a) Turnover:
There has been an upward revision in the turnover of the Company during
the year under review as compared to previous year. The fgures for
2012-13 in comparison with the previous year 2011-12 are as under:
(Rs. in Lacs)
Particulars FY 2012-13 FY 2011-12
Royalty Receipt (Net) 3037.73 3483.27
Film Production & 10476.84 3621.62
Distribution
Audio Product Sales 4.89 24.30
Advertisement Income 259.54 0.00
Other
Artiste Management Fees 0.00 68.00
Audio Rights Receipt 0.00 5.00
Scrap Sales 8.26 29.85
Total Turnover 13787.26 7232.03
(b) Business Spheres:
Your Company operates dynamically in two spheres
- Film Production & Distribution
- Music
- Film Production and Distribution:
"Race 2"
This year, Tips came up with the much awaited sequel of Race, the
blockbuster of 2008, multi-starrer action thriller flm "Race 2"
directed by Abbas-Mustan starring Saif Ali Khan, John Abraham, Anil
Kapoor, Deepika Padukone, Jaqueline Fernandez and Ameesha Patel.
Race 2 was released on 25 January 2013, and opened with huge response
at the box offce. The movie was commercially successful of the year.
"Jayantabhai ki Luv Story"
On 15th February this year, day after Valentine''s Day, Tips released
its second home production "Jayantabhai Ki Luv Story", directed by
Vinnil Markan with unique story of romance of a street-thug, Vivek
Oberoi, who surprisingly falls in love with Neha Sharma.
Music:
Tips has been striving in exploitation of digital music market in India
and across the globe. It has been contracting with various websites and
licensing its extensive repertoire for exploitation through streaming
and download service. Also, Mobile services like caller ring back
tones, full track downloads, videos of the songs, dialogues,
wallpapers, etc continues to be a signifcant component in the revenues
of the Company. Television has also been an added source of revenue
through licensing of song videos to channels for broadcast.
Buyback
During the year, the Company has bought back 6,00,060 equity shares
from the open market using the nationwide electronic trading facilities
of the Bombay Stock Exchange Limited (''BSE'') and National Stock
Exchange of India Limited(''NSE'') from the existing registered
shareholders/benefcial owners. The buyback offer was open from 23rd
August, 2012 to 8th March, 2013. The total fund utilized in the
Buy-back is Rs. 4,61,04,688/- (excluding brokerage, transactional
charges and taxes). The highest price at which the Equity Shares were
bought back was Rs. 88.00 per Equity Share while the lowest price was
Rs. 55.50 per Equity Share. The Equity Shares were bought back at an
average price of Rs. 76.83 per Equity Shares.
Share Capital Pre Buyback Post Buyback
Authorised Rs. 20,00,00,000/- Rs. 20,00,00,000/- Capital (2,00,00,000
Equity (2,00,00,000 Equity
Shares of Rs. 10/- each) Shares of Rs. 10/- each)
Paid Up Rs. 15,95,87,000/- Rs. 15,35,86,400/- Capital (1,59,58,700
Equity (1,53,58,640 Equity
Shares of Rs. 10/- each Shares of Rs. 10/- each
fully paid-up) fully paid-up)
Acquisitions by the Promoters:
- Before commencement of Buy-back Offer
Before Buyback, the promoters have acquired 4,85,234 equity shares of
the Company from open market which raises promoter holding to
1,07,12,762 shares representing 67.13 % of the paid up capital of the
Company.
- After Closure of Buy-back Offer
The total voting rights of Promoters have increased to 69.75% of the
paid up capital of the Company is due to the buy-back offer. There is
no change in the total number of shares held by the promoters and
promoter group.
Details of the acquisitions are given in the Corporate Governance
Report which forms a part of this Annual Report.
Future Outlook
Indian Cinema is on the threshold of completing 100 glorious years of
entertaining audiences in India and Overseas. India is the world''s
largest producer of flms and has potential to be one of the world''s
leading markets. With the passage of time there has been a continuous
technological advancement in Indian cinema. In the 20th Century, Indian
cinema took huge strides towards growth and, today, at the turn of the
21st Century Indian cinema stands at par with Hollywood cinema.
The Indian cinema consists of millions of overseas viewers for which
flms are made available both through mediums such as DVDs and by
screening of flms in their country of residence wherever commercially
feasible, which contribute substantially to the overall revenue to
cinema. One cannot think of Bollywood movies without music. Music in
Indian cinema is another substantial revenue generator where fate of
any Bollywood movie is rest on music of the Film.
The South Indian flm industry defnes the four flm cultures of South
India as a single entity. Although developed independently for a long
period of time, gross exchange of flm performers and technicians as
well as globalisation helped to shape this new identity. Henceforth the
scope of expansion of the Company in the industry is alluring by
exploring diversifed areas of production and Music.
"Ramaiya Vastavaiya" is an upcoming flm of the Company directed by
Prabhudheva, The flm introduces Girish Kumar son of renowned
producer Kumar Taurani, opposite Shruti Hassan. The movie will hit the
Silver Screen on 19th July, 2013.
The Company is in process of production of its flm titled "Phata Poster
Nikla Hero", directed by Rajkumar Santoshi and starring Shahid Kapoor
and Ileana D''Cruz in lead roles.
Other flm presently titled "It''s Entertainment" starring Akshay Kumar
Tamanna Bhatia, Paresh Rawal, Johny Lever, Sonu Sood, Krushna Abhishek,
and others, to be directed by Sajid- Farhad is yet to commence.
On music front, availability of quality music has enhanced the end user
experience. Company has 1 million hit on social networking site,
looking at fgures, Company has been expanding its scope for
distribution of music though Internet.
The world has entered into age of mobile phones where availability of
everything and anything is just a click away from anywhere which
provides Companies to be with end user 24*7. The Company aims at
exploiting of its music through mobile medium.
Directors
The Board consists of Executive and Non- Executive Director including
independent director who have wide and varied experience in different
disciplines of corporate functioning.
- Mr. Vijay Agarwal was appointed as Additional (Non-Executive
Independent) Director of the Company with effect from 31st October,
2012. As per the provisions of section 260 of the Companies Act, 1956,
he will hold offce upto the date of the ensuing Annual General Meeting
of the Company. The Company has received notice under section 257 of
the Companies Act, 1956, together with requisite deposit proposing
appointment of Mr. Vijay Agarwal as Director of the Company.
- Pursuant to the provisions of Sections 255 and 256 of the Companies
Act, 1956 and in terms of the Articles of Association of the Company,
Ms. Sunita Menon, Directors of the Company is liable to retire by
rotation at the ensuing Annual General Meeting and being eligible, has
offered herself for re-appointment.
Public Deposits
During the year, under review, the Company had accepted deposits from
public within the meaning of Section 58A of the Companies Act, 1956 and
the rules made there under and that none of matured deposits have been
unpaid to the depositor(s) during the this year. The outstanding
deposits as on 31st March 2013 was Rs.2,066 lacs as against Rs.276 lacs
on 31st March, 2012.
Auditors:
M/s. B. K. Khare & Co., Chartered Accountants, holds offce upto the
conclusion of the ensuing Annual General Meeting and is eligible for
re-appointment. They have furnished the necessary certifcate as
required under Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
Internal Control System:
The Company has appointed M/s. Maheshwari & Co. Â Chartered Accountants
as its Internal Auditors to check the internal controls and functioning
of the activities and recommend ways of improvement. The Internal
Audit is carried out quarterly basis, the report is placed in the Audit
Committee Meeting and the Board Meeting for their consideration and
direction. Their scope of work is as decided by the Audit Committee and
the Board of Directors.
Particulars of Employees
Particulars of employees required in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended are mentioned in the
table below:
Directors'' Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
directors based on the representation received from the management
state that:
1. In the preparation of the accounts, the applicable accounting
standards have been followed and there are no material departures
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgment and estimates were made so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2013
and of the proft of the Company for that period.
3. Proper and suffcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities.
4. The annual accounts of the Company have been prepared on a going
concern basis.
Subsidiary Companies
The Company does not have any subsidiary Company within the meaning of
section 4 of the Companies Act, 1956. Thus the Company is not required
to furnish a statement pursuant to the provisions of Section 212 of the
Companies Act, 1956.
Audit Committee
The Company has constituted an Audit Committee in accordance with
Clause 49 of the Listing Agreement read with section 292A of the
Companies Act, 1956. Adequate disclosures in respect of the composition
of the Audit Committee, its functions and the Chairmanship have been
made in the Corporate Governance Report which forms an essential part
of this report.
The Audit Committee functions in terms of the role and powers delegated
by the Board of Directors keeping in view the provisions of Clause 49
of the Listing Agreement and Section 292A of the Companies Act, 1956.
Conservation of Energy
Our operations are not energy intensive. However signifcant measures
have been taken to reduce the energy consumption by purchasing latest
technology energy effcient equipments.
Technology Absorption, Adoption and Innovation
During the year, Company has not absorbed or imported any technologies.
Foreign Exchange Earnings & Outgoings
During the year ended 31st March, 2013, the Company has incurred/
received foreign exchange towards the following:
(Rs. In Lacs)
Particulars 2012-13 2011-12
Outgoings:
(A) Traveling Expenses 0.64 59.92
(B) Payments to Artistes NIL 50.05
(C) Film Production Expenses 1690.51 49.80
Earnings:
(A) F.O.B. value of Exports NIL 1.43
(B) Royalty (net) 388.44 257.34
Management Discussion and Analysis
A Management discussion and Analysis as required under the Clause 49 of
the Listing Agreement is annexed and forming part of the Report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement, a Report on Corporate
Governance is annexed hereto and forms part of the Annual Report. As
required by the Listing Agreement, a certifcate from M/s. B. K. Khare &
Co, Chartered Accountants, and Statutory Auditors of the Company,
regarding compliance of conditions of corporate governance stipulated
by the Stock Exchanges is annexed to this Report. The Company also
submits to the Stock Exchanges quarterly corporate governance report as
required by Clause 49 of the Listing Agreement.
Auditors'' Report
In the opinion of the Directors, the notes to accounts are self-
explanatory and adequately explain the matters, which are dealt within
the Auditors'' Report.
Appreciation
Your Directors takes this opportunity to express their sincere
appreciation for the incredible support and co-operation by the
employees of the Company which they recognize as one of the prime
factors in growth of the Company. Secondly, the Directors give their
warm gratitude to the shareholders for their faith in the Company.
Lastly, the Directors are grateful for the overwhelming co-operation
received from the bankers, lenders, customers and associates of the
Company. The Directors strongly believe the Company has been able to
reach its current level because of the constant support and best wishes
of all these people.
For and on behalf of the Board of Directors
Place: Mumbai Kumar S. Taurani
Date: 23rd May, 2013 Chairman & Managing Director
Mar 31, 2012
The accordance with section 217 of the Companies Act, 1956 and with the
view to give the shareholders a glimpse of the activities which took
place during the previous year along with the financials and to
enlighten them regarding the future outlook of the Company, your
Directors hereby present their Report as on 31st March, 2012.
Financial Highlights
(Rs. in Lacs')
Particulars 2011-12 2010-11
Income 7713.12 6724.18
Profit/(Loss) before Depreciation,
Interest, Provision for
Contingencies and Taxation 1760.42 1211.53
Less: Depreciation and Interest 695.20 804.21
Profit/(Loss) before Provision for
Taxation, Extraordinary and Prior
Period year items 1065.22 407.32
Less: Provision for Taxation
Current Tax 154.67 90.46
Wealth Tax 2.52 0.83
Excess / Short Provisions 23.27 0.35
Profit/(Loss) after Provision for
Taxation but before Extraordinary and
Prior Period year items 884.76 315.68
Less: Prior Period Expenses 4.14 17.38
Profit/(Loss) after Taxation 880.62 298.30
Add: Balance Brought Forward 2987.54 2936.01
Profit/(Loss) after Taxation
available for Appropriation 3868.16 3234.31
Dividend 319.17 199.48
Dividend Tax 51.77 32.36
General Reserves 376.50 310.50
Share Capital 1595.87 1595.87
Reserves & Surplus 6861.56 6351.89
Dividend
Your Directors recommend a dividend of @ 20% i.e. Rs. 2/- per share on
15958700 fully paid-up Equity Shares of Rs. 10/- each of the Company
for the year ended March 31, 2012. The proposed dividend, if approved
at the Annual General Meeting, will absorb a sum of Rs. 319.17 lacs
(Previous Year being Rs. 199.48 lacs) and Dividend Tax of Rs. 51.77
lacs (Previous Year being Rs. 32.36 lacs). The Dividend Tax is provided
at the rate applicable on the day on which the Accounts were approved
by the Board of Directors.
Transfer to Reserves
An amount of Rs. 66 Lacs is transferred to General Reserves in the
Balance Sheet.
Review of Operations
(a) Turnover:
There has been an upward revision in the turnover of the Company during
the year under review as compared to previous year. The figures for
2011-12 in comparison with the previous year 2010-11 are as under:
Rs. in Lacs
Particulars FY 2011-12 FY 2010-11
Royalty 3483.27 3672.90
Film Production &
Distribution 3621.62 2906.25
Audio Product Sales 24.30 78.08
Other Income 34.85 50.33
Artiste Management 68.00 _
Total Turnover 7232.02 6662.27
(b) Business Spheres:
Your Company operates dynamically in two spheres viz., Film Production
& Distribution and Exploitation of Music
- Film Production and Distribution:
During the year under review, the Company had acquired the entire
copyrights worldwide in perpetuity of the Punjabi Film Jihne Mera Dil
Lutiya" starring Gippy Grewal, Diljit Dosanjh, Neeru Bajwa, Jaswinder
Bhalla and produced by Batra Showbiz Pvt. Ltd. The movie saw the
biggest opening ever for a Punjabi movie. It went on to run
successfully for over 7 weeks in the theatres and made a record
breaking box office collection of over Rs. 10 crores.
On 24th February, 2012 Tips came up with its production, a romantic
comedy - "Tere Naal Love Ho Gaya' featuring the couple Ritiesh and
Genelia Deshmukh and directed by Man deep Kumar. The film being very
entertaining, received a good response from the viewers with the box
office collection of over Rs. 25 crores globally.
- Music:
Tips has been venturing and exploring new avenues for exploitation of
music digitally in India and across the globe. It has been contracting
with various websites and licensing its extensive repertoire for
exploitation through streaming and download service. Tips has made its
presence on ITunes globally across the markets of United Kingdom,
Canada, Australia, Germany, New Zealand, USA, Belgium, Netherlands.
Also, exploitation through mobile services like caller ring back tones,
full track downloads, videos of the songs, dialogues, wallpapers, etc
continues to be a significant constituent in the revenues of the
Company. Television has also been an added source of revenue through
licensing of song videos to channels for broadcast.
(c) Sale of Machinery:
The Company owned a machinery for manufacture of Audio Cassettes, the
Net Asset Value of which was Rs. 3,76,17,524/-. Since, the audio
cassettes no longer exist, the machine had no utility. Hence, the
machinery was sold for Rs. 4,69,000/-.
Acquisitions by the Promoters
During the year, the promoters have acquired 717,794 equity shares of
the Company from open market thereby raising the promoter holding to
1,02,27,528 shares representing 64.09% of the paid up capital of the
Company as against 9,517,084 shares representing 59.64% of the paid up
capital during the previous year. Details of the acquisitions are given
in the Corporate Governance Report which forms a part of this Annual
Report.
Future Outlook
India has the potential to be one of the world's leading markets for
the creative industries - both foreign and domestic. The country
produces the greatest number of films in the world and boasts a
creative and diverse music market and is continuously growing. Hence,
the scope of expansion of the Company in this industry is alluring with
the penetration of the Company in diversified areas of production,
distribution as well as music. With constant technology improvements
and introduction of more areas of exploitation in films and music, the
Company's outlook includes keeping pace with the advancements in the
industry and absorbing the same.
The Company is currently in process of shooting of the film "Race 2'
starring Saif Ali Khan, John Abraham, Deepika Padukone, Amisha Patel,
Anil Kapoor and others and being directed by Abbas- Mutan. It is also
in process of producing a film titled "Jayantabhai ki Love Story'
starring Vivek Oberoi, Neha Sharma & others and being directed by
Vinnyl Markan. The Company has already sold the distribution rights of
Race 2 to UTV Motion Pictures. Other projects starring Abhishek and to
be directed by Mohit Suri and starring Shahid Kapur to be directed by
Siddharth Anand are yet to commence.
On the music front, availability of quality audio code's and digital
music has enhanced the end users experience in listening to music. With
internet playing the most significant role in purchase of music, the
Company has been expanding its scope by licensing its repertoire to
various websites.
The growing dominance of the mobile as a music playing device with its
potential to go beyond the current rage of caller ring back tones, its
ability to explore the long tail of music with the search and explore
features, the Company aims at increasing exploitation of its music
through mobile services.
Directors
In accordance with the provision of the Companies Act, 1956, and the
Company's Article of Association, Mr. Ramesh Taurani, Director of the
Company retires by rotation at the ensuing Annual General Meeting and
being eligible, has offered himself for re-appointment. His detailed
profile forms a part of this Annual Report.
Mr. Kumar Taurani was appointed as Chairman & Managing Director and Mr.
Ramesh Taurani was appointed as Managing Director for the period from
01-04-2008 to 31-3-2013 on a remuneration of Rs. 90,00,000/- (Rupees
Ninety Lacs only) per annum. The Remuneration Committee and the Board
has approved their re-appointment for a period of 3 years w.e.f.
01-06-2012 to 31-5-2015 at an increased remuneration of Rs.
1,50,00,000/- (One Crore Fifty Lacs only) per annum i.e. Rs.
12,50,000/- (Rupees Twelve Lacs Fifty Thousand only) per month.
Approval of the shareholders is sought for the same in the ensuing
Annual General Meeting.
Public Deposits
During the year, under review, the Company had accepted deposits from
public within the meaning of Section 58A of the Companies Act, 1956 and
the rules made there under and that none of matured deposits have been
unpaid to the depositor(s). Moreover, most of the deposits have been
repaid which has brought the outstanding deposits as on 31st March 2012
to Rs. 276 lacs as against Rs. 2119 lacs as on 31st March, 2011.
Auditors
M/s. B. K. Khare & Co., Chartered Accountants, holds office upto the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment. They have furnished the necessary certificate as
required under Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
Internal Control
The Company has appointed M/s. Maheshwari & Co. - Chartered Accountants
as its Internal Auditors to check the internal controls and functioning
of the activities and recommend ways of improvement. The Internal
Audit is carried out quarterly and the report is placed in the Audit
Committee Meeting and the Board Meeting for their consideration and
direction. Their scope of work is as decided by the Audit Committee and
the Board of Directors.
Particulars of Employees
Particulars of employees required in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended are mentioned in the
table below:
Sr. Full Name Current Gross Remun- Qualification
No Designation & eration p.a.
Nature of Duties (Rupees)
1. Kumar Taurani Chairman & Rs.90,00,000 B.Com
Managing
Director
2. Ramesh Taurani Managing
Director Rs.90,00,000 B.Com
3. Sahas Malhotra Sr. V.PMusic Rs.60,00,000 Economics
(Hons)
Full Nam Date of Experience Age Previous
Joining Employment
Kumar Taurani 08/05/96 32 54 Years N.A.
Ramesh Taurani 27/09/05 31 52 Years N.A
Sahas Malhotra 08/10/10 18 37 Years Sony Music
Entertainment
India
Directors' Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
directors based on the representation received from the management
state that:
1. In the preparation of the accounts, the applicable accounting
standards have been followed and there are no material departures
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgment and estimates were made so as to give a true and
fair view of the state of affairs of the Company as at March 31, 2012
and of the profit of the Company for that period.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities.
4. The annual accounts of the Company have been prepared on a going
concern basis.
Conservation Of Energy
Our operations are not energy intensive. However significant measures
have been taken to reduce the energy consumption by purchasing latest
technology energy efficient equipments.
Technology Absorption, Adoption and Innovation
During the year, Company has not absorbed or imported any technologies.
Foreign Exchange Earnings & Outgoings
During the year ended March 31, 2012, the Company has incurred/
received foreign exchange towards the following:
Particulars 2011-121 2010-11
(Rs. in Lacs) (Rs. in Lacs)
Outgoings:
(A) Traveling Expenses 59.92 26.06
(B) Payments to Artistes 50.05 -
(C) Music Expenses _ 10.56
Earnings:
(A) F.O.B. value of Exports 1.43 27.02
(B) Royalty (net) 257.34 122.68
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a Report on Corporate Governance is annexed hereto and forms
part of this Report. A certificate from M/s. B. K. Khare & Co,
Chartered Accountants, and Statutory Auditors of the Company, regarding
compliance of conditions of corporate governance stipulated by the
Stock Exchanges is annexed to this Report. The Company also submits to
the stock exchange quarterly corporate governance report as required by
Clause 49 of the Listing Agreement.
The Company publishes on its website various information relating to
business of the Company, quarterly results, balance sheet & profit &
loss account, Directors Report, Auditors Report, Shareholding pattern
to keep the shareholders updated about the Company Affairs.
Management Discussion and Analysis
In accordance with the Listing Agreement, the Management Discussion and
Analysis Report is annexed hereto and forms part of this Report.
Auditors' Report
In the opinion of the Directors, the notes to accounts are self-
explanatory and adequately explain the matters, which are dealt within
the Auditors' Report.
Appreciation
The Directors firstly, would like to acknowledge and appreciate the
efforts of the employees of the Company which they recognize as one of
the prime factors in growth of the Company. Secondly, the Directors
give their sincere thanks to the shareholders for their support and
trust in the Company. Lastly, the Directors are grateful to the
bankers, lenders, customers and associates of the Company for their
co-operation at all times. The Directors strongly believe the Company
has been able to reach its current level because of the constant
support and best wishes of all these people.
For and on behalf of the Board of Directors
Place: Mumbai Kumar S. Taurani
Date: May 18, 2012 Chairman & Managing Director
Mar 31, 2011
TO THE MEMBERS
The Directors have pleasure in presenting their 15th Annual Report
along with the Audited Accounts of the Company for the financial year
ended March 31, 2011.
HIGHLIGHTS OF FINANCIAL RESULTS
(Rs. in 'thousands')
Particulars 2010-11 2009-10
Income 672418 850597
Profit/(Loss) before Depreciation, Interest,
Provision for Contingencies and Taxation 121153 155025
Less: Depreciation and Interest 80421 56916
Profit/(Loss) before Provision for Taxation,
Extraordinary and Prior Period year items 40732 98109
Less: Provision for Taxation
Current Tax 9046 8828
Deferred Tax - -
Fringe Benefit Tax - -
Wealth Tax 83 97
Excess / Short Provisions 35 4428
Profit/(Loss) after Provision for Taxation but
before Extraordinary and Prior Period year items 31568 84756
Less: Prior Period Expenses 1738 -
Profit/(Loss) After Tax 29830 84756
Add: Balance brought forward 293601 238320
Profit/(Loss) after Taxation available for
Appropriation 323431 323076
Dividend 19948 21632
Dividend Tax 3236 3593
General Reserves 1500 4250
Balance carried forward to Balance Sheet 298754 293601
Share Capital 159587 173059
Reserves & Surplus 635189 679162
DIVIDEND
Your Directors recommend a dividend of @ 12.5% i.e. Rs. 1.25 per share
on 15958700 fully paid-up Equity Shares of Rs. 10/- each of the Company
for the year ended March 31, 2011. The proposed dividend, if approved
at the Annual General Meeting, will absorb a sum of Rs. 199.48 lacs
(Previous Year being Rs. 216.32 lacs) and Dividend Tax of Rs. 32.36
lacs (Previous Year being Rs. 35.93 lacs). The Dividend
Tax is provided at the rate applicable on the day on which the Accounts
were approved by the Board of Directors.
REVIEW OF OPERATIONS
(a) Turnover:
During the year under review, the Company's net turnover was Rs.
6659.77 lacs (including Rs. 3672.90 lacs from Royalty Receipts and
2906.25 lacs from Film Distribution Income) as compared to turnover of
Rs.8423.71 lacs in the previous year. The other income in current year
is Rs. 64.41 lacs as compared to Rs. 82.26 lacs in the previous year.
During the year under review, the Company earned a profit of Rs. 407.31
lacs before provision for taxation and extraordinary & prior period
adjustments as compared to profit of Rs. 981.09 lacs in the previous
year.
(b) Film Production / Distribution/ Royalty Income:
The Company released 1 (One) hindi cinematographic film in the
financial year 2010-2011 - "Prince". It has also undertaken
distribution of 1(One) Punjabi Movie "Mel Kara De Rabba" which was a
phenomenal success worldwide. The Company has earned majority of its
revenues through exploitation of its music on digital platforms like
radio, mobile and internet and licensing its movies for exploitation
through Cable TV, Satellite, Pay per view, DTH, IPTV, VOD, etc.
BUY BACK
During the year, the Company has bought back 13,47,200 shares from the
open market using the nation wide electronic trading facilities of the
Bombay Stock Exchange Limited ('BSE') and National Stock Exchange of
India Limited('NSE') from the registered shareholders/ beneficial
owners. The buy back offer was open from June 11, 2010 to August 23,
2010. The total amount paid by the Company for buy back is Rs.639.96
lacs (without brokerage). The highest price paid for buy back is
Rs.48.50 & the lowest price is Rs. 42.50, so the equity shares were
bought back at an average of Rs.47.50. The capital structure of the
Company before and after buy back is as follows:
Share Capital Pre - Buy Back Post Buy Back
Authorised Capital Rs. 20,00,00,000/- Rs. 20,00,00,000/-
(2,00,00,000 Equity (2,00,00,000 Equity
Shares Shares
of Rs. 10/- each) of Rs. 10/- each)
Paid Up Capital Rs. 17,30,59,000/- Rs. 15,95,87,000/-
(1,73,05,900 Equity (1,59,58,700 Equity
Shares Shares
of Rs. 10/- each fully of Rs. 10/- each fully
paid-up paid-up)
FUTURE OUTLOOK
The Indian entertainment industry is among the fastest growing sectors
in the country. In the past two decades entertainment industry in India
has witnessed explosive growth. The popularity of Indian entertainment
industry goes well beyond the geographical frontiers of the country. As
India's profile rises on the global stage, interest in India's culture
and entertainment industry is also bound to grow.
New Technology is driving the entertainment industry / Music Industry
into the next decade, and its boundaries is merging with those of the
telecommunications and information technology segments, giving rise to
a host of value-added features for consumers and new revenue streams
for players in the industry. There is a technology push in the industry
with a wide repertoire of film and music becoming available through a
variety of legitimate and convenient platforms and options like
increased internet penetration, digital downloads, ring tones,
introduction of DTH and IP-TV, Video on Demand, Satellite Radio and FM
Radio, cable and satellite television, pay per view telecast, etc. Due
to the emergence of very prominent 3G services, mobile entertainment is
becoming the biggest growth driver in digitization of music & films.
Large scale exploitation of movies & music is also undertaken through
mobile services like ring tones, caller tunes, games, images,
wallpapers, themes, song video downloads, etc.
Your company is currently in process of commencing production of a
movie directed by the Abbas-Mastan which is the sequel of super hit
movie the Race. The star casts of the movie include John Abraham, Saif
Ali Khan, Sonakshi Sinha, Deepika Padukone & others are in finalization
stage. In the current year company is in process of distributing
another Punjabi Movie "Jinhe Mera Dil Lutiya".
DIRECTORS
In accordance with the provision of the Companies Act, 1956, and the
Company's Article of Association, Mr. Amitabh Mundhra, Director of the
Company retires by rotation at the ensuing Annual General Meeting and
being eligible, has offered himself for re-appointment. His detailed
profile forms a part of Corporate Governance Report.
PUBLIC DEPOSITS
During the year, under review, the Company had accepted deposits from
public within the meaning of Section 58A of the Companies Act, 1956 and
the rules made thereunder and that none of matured deposits have been
unpaid to the depositor(s).
AUDITORS
M/s. B. K. Khare & Co., Chartered Accountants, holds office upto the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment. They have furnished the necessary certificate as
required under Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
PARTICULARS OF EMPLOYEES
Particulars of employees required in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended are mentioned in the
table below:
Sr. Full Name Current Gross Qualification
No Designation & Remuneration p. a.
Nature of Duties (Rupees)
1. Kumar Taurani Chairman & Rs.90,00,000 B. Com.
Managing Director
2. Ramesh Taurani Managing Director Rs.90,00,000 B. Com.
3. Sahas Malhotra V. P. Music Rs.60,00,000 Economics
(Hons)
Sr. Full Name Date of Experience Age Previous
Joining Employment
No
1. Kumar Taurani 08/05/96 31 53 Years N. A.
2. Ramesh Taurani 27/09/05 30 51 Years N. A
3. Sahas Malhotra 08/10/10 17 36 Years Sony Music
Entertainment
India
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
directors based on the representation received from the management
state that:
1) In the preparation of the accounts, the applicable accounting
standards have been followed and there are no material departures.
2) Accounting policies selected were applied consistently except in
regard to change in the accounting policy in respect of amortization of
cost of production of feature films (Refer to Note B3 of Schedule 21).
Reasonable and prudent judgment and estimates were made so as to give a
true and fair view of the state of affairs of the Company as at March
31, 2011 and of the profit of the Company for the year ended on that
date.
3) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities.
4) The annual accounts of the Company have been prepared on a going
concern basis.
CONSERVATION OF ENERGY
Our operations are not energy intensive. However significant measures
have taken to reduce the energy consumption by purchasing latest
technology energy efficient equipments.
TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
During the year, Company has not absorbed or imported any technologies.
FOREIGN EXCHANGE EARNINGS & OUTGOINGS
During the year ended March 31, 2011, the Company has incurred/
received foreign exchange towards the following:
Particulars 2010-11 2009-10
(Rs. in (Rs. in
thousands) thousands)
Outgoings:
(A) Traveling Expenses 2606 181
(B) Legal & Professional Fees - -
(C) Payments to Artistes 1056 -
(D) Film Production Expenses - 3251
Earnings:
(A) F.O.B. value of Exports 2702 4299
(B) Royalty (net) 12268 1887
(C) Miscellaneous Income - 55714
(Film Distribution Income)
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a Report on Corporate Governance is annexed hereto and forms
part of this Report. A certificate from M/s. B. K. Khare & Co,
Chartered Accountants, and Statutory Auditors of the Company, regarding
compliance of conditions of corporate governance stipulated by the
Stock Exchanges is annexed to this Report. The Company also submits to
the stock exchange quarterly corporate governance report as required by
Clause 49 of the Listing Agreement.
The Company publishes on its web site various information relating to
business of the Company, quarterly results, balance sheet & profit &
loss account, Directors Report, Auditors Report, Shareholding pattern
to keep the shareholders updated about the Company Affairs.
MANAGEMENT DISCUSSION AND ANALYSIS
In accordance with the Listing Agreement, the Management Discussion and
Analysis Report is annexed hereto and forms part of this Report.
AUDITORS' REPORT
In the opinion of the Directors, the notes to accounts are
self-explanatory and adequately explain the matters, which are dealt
within the Auditors' Report.
APPRECIATION
Your Directors take this opportunity to express their sincere thanks to
all the shareholders, banker, lenders & others business associates for
their continuous support. Your Directors also express their gratitude
to the employees for their hard work, commitment, knowledge and loyalty
for the Company which has enabled the Company to achieve steady growth.
For and on behalf of the Board of Directors
Kumar S. Taurani
Chairman & Managing Director
Place: Mumbai
Date: May 11, 2011
Mar 31, 2010
The Directors have pleasure in presenting their 14th Annual Report
along with the Audited Accounts of the Company for the financial year
ended March 31, 2010.
HIGHLIGHTS OF FINANCIAL RESULTS
(Rs. in thousands)
Particulars 2009-10 2008-09
Income 850597 662981
Profit/(Loss) before Depreciation,
Interest, Provision for Contin
-gencies and Taxation 155025 165567
Less: Depreciation and Interest 56916 30543
Profit/(Loss) before Provision
for Taxation, Extraordinary and Prior
Period year items 98109 135024
Less: Provision for Taxation
Current Tax 8828 15298
Deferred Tax -- --
Fringe Benefit Tax -- 824
Wealth Tax 97 93
Excess / Short Provisions 4428 36
Profit/(Loss) after Provision for
Taxation but before Extraordinary and
Prior Period year items 84756 118774
Les: Prior Period Expenses -- 4234
Profit/(Loss) after Taxation
available for Appropriation 323076 266341
Dividend 21632 19036
Dividend Tax 3593 3235
General Reserves 4250 5750
Balance carried forward to
Balance Sheet 293601 238320
Share Capital 173059 173059
Reserves & Surplus 679162 619631
DIVIDEND
Your Directors recommend a dividend @ 12.5% i.e. Rs. 1.25 per share on
1,73,05,900 fully paid-up Equity Shares of Rs. 10/- each of the Company
for the year ended March 31, 2010. The proposed dividend, if approved
at the Annual General Meeting, will absorb a sum of Rs. 216.32 lacs
(Previous Year being Rs. 190.36 lacs) and Dividend Tax of Rs. 35.93
lacs (Previous Year being Rs. 32.35 lacs). The Dividend Tax is
provided at the rate applicable on the day on which the Accounts were
approved by the Board of Directors.
REVIEW OF OPERATIONS
(a) Turnover:
During the year under review, the Companys net turnover was Rs.
8423.71 lacs (including Rs. 3157.17 lacs from Royalty Receipts and Rs.
4952.27 lacs from Film Distribution Income) as compared to turnover of
Rs.6472.46 lacs in the previous year. The other income in current year
is Rs. 82.26 lacs as compared to Rs. 157.35 lacs in the previous year.
During the year under review, the Company earned a profit of Rs. 981.09
lacs before provision for taxation and extraordinary & prior period
adjustments as compared to profit of Rs. 1350.24 lacs in the previous
year.
During the year under review, the Company released audio of 2 (Two)
Hindi Movies. The sales volumes of physical formats i.e. audio
cassettes and CDs have been experiencing a downward trend. However,
non-physical forms of music like mobile, radio, public performance and
internet are becoming increasingly popular and the revenues from this
segment during the year being Rs. 3157.17 lacs has shown a phenomenal
growth of 34% as compared to previous years revenue of Rs. 2356.40
lacs.
(b) Film Production / Distribution Income:
The Company released 2 (Two) hindi cinematographic films in the
financial year 2009-2010 - "Ajab Prem ki Ghazab Kahani" and "Toh Baat
Pakki". The total revenues generated from production and distribution
of these films in the financial year 2009-2010 are Rs.4952.27 lacs
FUTURE OUTLOOK
With the boom in the media industry a plethora of opportunities have
opened up for filmmakers in India and with the multiplex culture
engulfing India, filmmakers are getting several opportunities in
Production and Distribution areas. A combination of factors is changing
the face of Indian film distribution and production, according to
industry observers.
Grabbing the immense scope in Production and Distribution, the Company
plans to produce 2-3 Movies in the forthcoming year. The Company also
looks forward to carrying out Distribution activities in the year
ahead.
Further, since the non-physical formats are gaining popularity, the
Company aims in focusing on digital operations like ring tones, music
downloads, wall-papers, FM radio etc.
DIRECTORS
In accordance with the provision of the Companies Act, 1956, and the
Companys Article of Association, Ms. Radhika Pereira Director of the
Company retires by rotation at the ensuing Annual General Meeting and
being eligible, has offered herself for re-appointment.
PUBLIC DEPOSITS
During the year, under review, the Company had accepted deposits from
public within the meaning of Section 58A of the Companies Act, 1956 and
the rules made thereunder and that none of matured deposits have been
unpaid to the depositor(s).
AUDITORS
M/s. B. K. Khare & Co., Chartered Accountants, holds office upto the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment. They have furnished the necessary certificate as
required under Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
PARTICULARS OF EMPLOYEES
Particulars of employees required in accordance with the provisions of
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 as amended are mentioned in the
table below:
Sr Name Age Designation Remuneration Qualification
No (Yrs) (Gross) p.a.
1. Kumar
Taurani 52 yrs Chairman & Rs. 90,00,000/- B. Com.
Managing Director
2. Ramesh
Taurani 50 yrs Managing
Director Rs. 90,00,000/- B. Com.
Name Exp. Date of Last employment
Years) commencement and designation
of employment held
Kumar Taurani 31 08/05/1996 Business-
Managing Partner
Ramesh Taurani 30 27/09/2005 Business - Partner
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
directors based on the representation received from the management
state that:
1. In the preparation of the accounts, the applicable accounting
standards have been followed and there are no material departures
2. Accounting policies selected were applied consistently. Reasonable
and prudent judgment and estimates were made so as to give a true and
fair view of the state of affairs of the Company as at March 31,2010
and of the profit of the Company for the year ended on that date.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities.
4. The annual accounts of the Company have been prepared on a going
concern basis.
CONSERVATION OF ENERGY
Information as per Section 217(1)(e) of the Companies Act, 1956 read
with the Companies (Disclosures of Particulars in the Report of Board
of Directors) Rules, 1988, are not applicable to the Company.
TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
During the year, Company has not imported any technologies.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a Report on Corporate Governance is annexed hereto and forms
part of this Report. A certificate from M/s. B. K. Khare & Co,
Chartered Accountants, and Statutory Auditors of the Company, regarding
compliance of conditions of corporate governance stipulated by the
Stock Exchanges is annexed to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
In accordance with the Listing Agreement, the Management Discussion and
Analysis Report is annexed hereto and forms part of this Report.
AUDITORS REPORT
In the opinion of the Directors, the notes to accounts are
self-explanatory and adequately explain the matters, which are dealt
within the Auditors Report. In case of valuation of inventory, entire
cost of copyrights and in-house music production costs are considered
for the purpose of valuation of inventories in the absence of records
of title-wise stock and the entire such cost is apportioned on the
stock of saleable inventory on average basis. The Management is of
opinion that it will not have any material impact on valuation of
inventories.
APPRECIATION
The Board of Directors place on record its appreciation to all the
employees of the Company for their outstanding contribution to the
operations of the Company during the year under review. Your Directors
also place on record their sincere appreciation of the wholehearted
support extended by the Government and other Statutory Authorities,
Companys Bankers, Business Associates, Auditors and all the
stakeholders of the Company.
For and on behalf of the Board of Directors
Place: Mumbai Kumar S. Taurani
Date: May 26, 2010 Chairman & Managing Director