Notes to Accounts of Cineline India Ltd.

Mar 31, 2018

1. Corporate information

Cineline India Limited (the ‘Company’) is a company domiciled in India, incorporated under the Companies Act, 1956 on 22 May 2002. The Company is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is into the business of renting out premises owned by the Company and operating windmills.

2. Recent accounting pronouncements

i. Ind AS 116 “Leases:

On 18 July 2017, the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India issued an Exposure Draft of Ind AS 116, “Leases”. The exposure draft sets out the principles for the recognition, measurement, presentation and disclosure of leases. Ind AS 116 is expected to replace Ind AS 17 from its proposed effective date, being annual periods beginning on or after 1 April 2019.

ii. Amendments to Ind AS Ind AS 12 “Income Taxes”

The amendment considers that tax law determines which deductions are offset against taxable income and that no deferred tax asset is recognised if the reversal of the deductible temporary difference will not lead to tax deductions. Accordingly, segregating deductible temporary differences in accordance with tax law and assessing them on entity basis or on the basis of type of income is necessary to determine whether taxable profits are sufficient to utilise deductible temporary differences.

The fair value of investment property has been determined by an independent valuer, who has adequate professional experience as well as adequate expertise in the location and category of the investment property. The value is determined based on the rate prescribed by government authorities for commercial property. The resultant fair value estimates for investment property is included in level 2.

The Company has no restrictions on the realisability of its investment property and no contractual obligations to either purchase, construct or develop investment property or for repairs, maintenance and enhancements.

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The equity shareholders are entitled to dividend to be proposed by the Board of Directors and to be approved by the shareholders in the General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Terms and rights attached to preference shares

The Company has one class of preference shares. The preference shares have preferred right on payment of dividend and repayment of capital over equity shareholders.

(a) Term loan taken from Central Bank of India is secured against:

i) First and exclusive charge / hypothecation of:

1) All rental receivables arising out of leasing of following properties:

a) Theatre buildings

b) Boomerang property

c) Commercial spaces to multiple brands at Eternity mall, Nagpur

2) All income / receivables from sale of power from two windmills

ii) First and exclusive charge on all project’s movable tangible and intangible assets including all stocks, work-in-progress, receivables, inventories, goodwill, patents, trade licenses, permits and all other intellectual property rights and all plant, machinery and equipment employed in the project.

iii) First and exclusive charge over all the project contracts and insurance policies/proceeds under the insurance contract in relation to the project.

iv) First and exclusive charge by way of assignment of the escrow account, into which, inter alia, all the project operating cash flows, treasury income, revenue / receivables of the Company would be deposited.

v) Personal / corporate guarantee of Rasesh B. Kanakia and Himanshu B. Kanakia.

vi) First and exclusive charge by way of over all the rights, title, interest, benefits, claims and demands whatsoever of the Company in each of the project documents, duly acknowledge and consented to by the relevant counter parties or lessees to such project document, including the rights to receive any liquidated damages.

(b) The vehicle loan from Axis bank is secured against the vehicle for which the loan was taken.

These assumptions were developed by the management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Sensitivity analysis

The financial results are sensitive to the actuarial assumptions. The changes to the defined benefit obligations for increase in decrease of 1% from assumed salary escalation, withdrawal and discount rates are given below. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability at 31 March 2018.

The present value of the defined benefit obligation calculated with the same method (projected unit credit) as the defined benefit obligation recognised in the balance sheet. The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another since some of the assumptions may be co-related.

Compensated absences

The Company has a defined benefit compensated absences plan. It is payable to all the eligible employees at the rate of daily salary subject to a maximum of forty two days. The obligation for compensated absences is recognised in the same manner as gratuity and net charge to the statement of profit and loss for the year is Rs.0.80 lakhs (Previous year: net charge of Rs.0.66 lakhs).

Note 3: Related party transactions

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 “Related Party Disclosures”, names of the related parties, related party relationships, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during the reported period are as follows:

Note 4: Segment information Operating segments

The Company is organised into two segments viz. Retail space division comprising of malls and theatre buildings for lease to third parties and Windmill division comprising of wind energy generator.

The chief operationing decision maker monitors the operating results of its business segments separately for the purpose of making decision about resource allocation and performance assessment. Operating segments have been identified based on the nature of revenue and assets and other criteria specified under Ind AS 108 “Operating segments”.

(a) The carrying value of trade and other receivables, security deposits, cash and bank balances and other financial assets recorded at amortised cost, is considered to be a reasonable approximation of fair value.

(b) The carrying value of borrowings, trade payables, security deposits and other financial liabilities recorded at amortised cost is considered to be a reasonable approximation of fair value.

ii) Fair values heirarchy and method of valuation Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the balance sheet are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Valuation process and technique used to determine fair value

The fair values for instruments at amortised cost are based on discounted cash flows using a discount rate determined based on market interest rate for an equivalent instrument.

Note 4.1: Risk Management

The Company’s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Company’s risk management is carried out by finance team under policies approved by the Board of Directors. The Board of Directors provide written principles for overall risk management, as well as policies covering specific areas, interest rate risk, credit risk and investment of excess liquidity.

A) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and principally from credit exposures to customers relating to outstanding receivables. The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting date.

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. The Company’s policy is to deal only with creditworthy counterparties.

In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. Trade receivables consist of a large number of customers. The Company has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents and loans is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Contractual maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

C) Market risk - foreign exchange

The Company is not exposed to any foreign exchange risk arising from foreign currency transactions.

D) Market risk - interest rate risk

The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s variable rate borrowings. The Company is not exposed to changes in market interest rates in so far it relates to fixed rate borrowings.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on variable rate borrowing, as follows:

Note 5: Capital management

The Company’ s capital management objectives are:

- to ensure the Company’s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

The Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in the economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Note 6: Micro, Small and Medium Enterprises

Based on the information available with the Company, there are no dues in respect of micro and small enterprises at the balance sheet date. Further, no interest during the year has been paid or is payable in respect thereof. This disclosure has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 7: Operating leases

The Company has leasing arrangement for premises and utilities which is in the nature of operating lease. Operating lease rental charged to statement of profit and loss amount to Rs. 27 lakhs (previous year Rs. 27 lakhs).

Note 8 : Corporate social responsibility

The Company has formed a Corporate Social Responsibility Committee as required under Section 135 of the Companies Act, 2013. The Company was required to spend Rs. 20 lakhs as per Section 135(5) of Companies Act, 2013. The Company has spent Rs. 70 lakhs on the activities mentioned in Schedule VII to the Companies Act, 2013.

Note 9: The Company has entered into a transaction with Kanakia Spaces Realty Private Limited (formerly known as Centaur Mercantile Private Limited) for purchase of commercial premises in Kanakia Wall Street project. The same was approved by the board in its meeting held on 30 March 2016 and approved by the shareholders by means of postal ballot on 9 May 2016. The Company has paid earnest deposits of Rs. 14,096 lakhs including applicable taxes (31 March 2017: Rs. 6,052 lakhs, 1 April 2016: 5,858 lakhs) and has capitalised borrowing cost as per Ind AS 23 “Borrowing costs” amounting Rs. 599 lakhs (previous year: Rs. 641 lakhs).

Note 10: First time adoption of Ind AS

These financial statements for the year ended 31 March 2018, are the first financial statements prepared by the Company in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘previous GAAP’).

In preparing these financial statements, the Company’s opening Ind AS balance sheet was prepared as at 1 April 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its previous GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

The Company has applied Ind AS 101 in preparing these first financial statements. The effect of transition to Ind AS on equity, total comprehensive income and reported cash flows are presented in this section and are further explained in the notes accompanying the tables.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions: A1.1 Deemed cost for property, plant and equipment and investment property

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. The same exemption is also available on investment properties. Accordingly, the Company has elected to measure all of its property, plant and equipment and investment properties at their previous GAAP carrying value.

A.2 Ind AS mandatory exceptions: A2.1 Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

A2.2 Classification and measurement of financial assets

The classification and measurement of financial assets has been made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money, i.e., the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) the effects of the retrospective application are not determinable;

b) the retrospective application requires assumptions about what management’s intent would have been in that period; and

c) the retrospective application requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

A2.3 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choice, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

B. Reconciliation between previous GAAP and Ind AS

The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes: i) Measurement of financial assets and liabilities at amortised cost

UnderpreviousGAAP.financialassetsandfinancialliabilitiesweretypicallycarriedatthecontractualamountreceivableorpayable.

Under Ind AS, financial instruments carried at amortised cost are initially recognised at fair value, and subsequently measured at amortised cost, at effective interest rate. For certain financial assets and financial liabilities, the fair value thereof at the date of transition to Ind AS has been considered as the new amortised cost of that financial asset and financial liability at the date of transition to Ind AS.

ii) Amortisation of loan processing fee

Under previous GAAP, loan processing fee was charged to statement of profit and loss in the year it was incurred. However, under Ind AS, the same is being expensed off over the tenure of the borrowing. Consequently, the unamortised expense has been credited to equity as at the date of transition to Ind AS.

iii) Remeasurement of post-employment benefit obligations

Under the previous GAAP, these re-measurements formed a part of the profit or loss for the year.

Under Ind AS, re-measurements i.e. actuarial gains and losses, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of the statement of profit and loss.

Retained earnings as at 1 April 2016 has been adjusted consequent to the above Ind AS transition adjustments.

Note 11: The Company is in the process of appointing a Chief Financial Officer (CFO) as required under the provisions of Section 203 of the Act, as the previous CFO has resigned w.e.f. 16 April 2018. Accordingly, these financial statements have not been authenticated by a CFO as required under section 134 of the Act.

Note 12: Authorisation of financial statements

These financial statements for the year ended 31 March 2018 (including comparatives) have been approved by the Board of Directors on 28 May 2018.

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Mar 31, 2016

4 (c). Rights and restrictions attached to equity shareholders

The Company has only one class of equity share having face value of Rs. 5 each. Every holder of equity share is entitled to one vote per equity share. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining assets of the Company.

4 (d ). Rights and restrictions attached to preference shareholders:-

The Company has only one class of preference share having face value of Rs. 10 each. Every holder of preference share is entitled to one vote per preference share.

4 (e). Details of shares allotted as fully paid up by way of bonus issues and bought back during the last 5 years to be given for each class of shares

The Company has not issued any bonus shares nor there has been any buy back of shares during five years immediately preceding 31 March 2016.

1. Disclosures pursuant to Accounting Standard 15 "Employee Benefits”

I. The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

The following table set out the status of the gratuity plan as required under Accounting Standard 15 “Employee Benefits” and the reconciliation of opening and closing balances of the present value of the defined benefit obligation.

As the plan is unfunded, contribution is taken as equal to the benefit paid by the Company.

ii. The Company has a defined benefit compensated absences plan. It is payable to all the eligible employees at the rate of daily salary subject to a maximum of forty two days.

The following table set out the status of the compensated absences benefit obligation as required under Accounting Standard 15 “Employee benefits”:

2. Bank borrowings

A. Term loan taken from Central bank of India is secured against:

I) First and exclusive charge / hypothecation of all rental receivables arising out of leasing of following properties:

1) All rental receivables arising out of leasing of following properties:

a) Theatre buildings

b) Boomerang property

c) Commercial spaces to multiple brands at Eternity mall, Nagpur

2) All income / receivables from sale of power from two windmills

II) First and exclusive charge on all project''s movable tangible and intangible assets including all stocks, work-in-progress, receivables, inventories, goodwill, patents, trade licenses, permits and all other intellectual property rights and all plant, machinery and equipment employed in the project.

III) First and exclusive charge over all the project contracts and insurance policies/proceeds under the insurance contract in relation to the project.

IV) First and exclusive charge by way of assignment of the escrow account, into which, inter alia, all the project operating cash flows, treasury income, revenue / receivables of the Company would be deposited.

V) First and exclusive charge by way of over all the rights, title, interest, benefits, claims and demands whatsoever of the Company in each of the project documents, duly acknowledge and consented to by the relevant counter parties or lessees to such project document, including the rights to receive any liquidated damages.

VI) Personal / corporate guarantee of Rasesh B. Kanakia and Himanshu B. Kanakia.

B. The vehicle loan from Axis bank is secured against Maruti Suzuki SX4 for which the loan was taken.

C. Terms of repayment

3. Primary segment information

The Company is organized into two business segments viz. Retail space division comprising of construction of malls for sale and or lease to third parties and Windmill division comprising of wind energy generator.

Secondary segment information

The Company does not have geographical distribution of revenue hence the secondary segmental reporting based on geographical location of its customers is not applicable to the Company.

4. Earnings per share (EPS)

The basic earnings per equity share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The earnings per share is calculated as under:

5. Operating lease

The Company has leasing arrangement in respect of operating lease for premises and utilities. Operating lease rental charged to statement of profit and loss amount to Rs. 26.49 lacs (previous year Rs. 6.62 lacs).

6. Corporate social responsibility activities

The Company has formed a Corporate Social Responsibility Committee as required under Section 135 of the Companies Act, 2013. The Company was required to spend Rs. 12.03 lacs as per Section 135(5) of Companies Act, 2013. The Company has spent Rs. 28.50 lacs on the activities mentioned in Schedule VII to the Companies Act, 2013.

7. The Company has entered into a transaction with Kanakia Spaces Realty Private Limited (formerly known as Centaur Mercantile Private Limited) for purchase of commercial premises in Kanakia Wall Street project. The same was approved by the board in its meeting held on 30 March 2016 and approved by the shareholders by means of postal ballot on 9 May 2016. The Company has paid earnest deposits of Rs. 5,858.00 lacs and has capitalized borrowing cost as per Accounting Standard 16 “Borrowing costs” amounting to Rs. 151.88 lacs.

8. Based on the information available with the Company, there are no dues outstanding in respect of micro and small enterprises at the balance sheet date. Further, no interest during the year has been paid or payable in respect thereof. The above disclosures has been determined to the extent such parties have been identified on the basis of information available with the Company.

9. Previous year comparatives

Figures for the previous year have been regrouped wherever considered necessary to confirm with the current year’s presentation.

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Mar 31, 2015

1. Background of the Company

Cineline India Limited was incorporated on 22 May 2002. The Company is into the business of renting out premises owned by the Company and operating windmill.

2. Basis of preparation of financial statements

The financial statements which have been prepared under historical cost convention on the accrual basis of accounting, are in accordance with the applicable requirements of the Companies Act, 2013 (the "Act") and comply in all material aspects with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended).

3. Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent liabilities. The estimates and assumptions used in accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods.

4. Rights and restrictions attached to equity shareholders

The Company has only one class of equity share having face value of Rs. 5 each. Every holder of equity share is entitled to one vote per equity share. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining assets of the Company.

5. Rights and restrictions attached to preference shareholders:-

The Company has only one class of preference share having face value of Rs.10 each. Every holder of preference share is entitled to one vote per preference share.

6. Disclosures pursuant to Accounting Standard 15 "Employee Benefits"

I. The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

ii. The Company has a defined benefit compensated absences plan. It is payable to all the eligible employees at the rate of daily salary subject to a maximum of forty two days.

7. Bank borrowings

A. Term loan taken from Axis bank is secured against:

(i) Personal guarantee of Mr. Rasesh B. Kanakia and Mr. Himanshu B. Kanakia.

(ii) Charge on the moveable fixed assets and current assets of the Company.

Primary charge

a) Hypothecation of receivables (pertaining to Nagpur mall, multiplexes leased to PVR Limited, advertisement revenue, car parking revenue and revenue from sale of power)

b) Escrow agreement to be executed by the Company with the bank and to be acknowledged by the tenants to route the cash flows through the designated account.

Collateral charge

a) Exclusive charge by way of mortgage of the following two properties:

* Commercial building "Eternity mall and multiplex" situated at plot no. 1, KH No. 312/2,313/1, Bearing Corporation House No. 22, C.S No. 1784/1, Ward No. 71, Mouje Sitabuldi, Talukaand District Nagpur."

* Commercial building "Cinemax" Multiplex, Eternity Mall, Teen Haat Naka, L.B.S. Marg, Thane (West) 400602.

B. The vehicle loan from Axis bank is secured against Maruti Suzuki SX4 for which the loan was taken.

8 Disclosure of related party transactions under Accounting Standard 18 "Related Party Disclosures"

In accordance with the disclosure requirements of Accounting Standard 18 "Related Party Disclosures" the details of related party transactions are given below:

i. List of related parties:

Name of the related party Relationship

Mr. Rasesh B. Kanakia Director

Mr. Himanshu B. Kanakia Director

Mr. Jatin Shah Key management personnel

Mrs. Manisha Vora Relative of director

Kanakia Spaces Private Limited Entities under common control or significant influence can be exercised

Centaur Mercantile Private Limited Entities under common control or significant influence can be exercised

RBK Education Solutions Private Limited Entities under common control or significant influence can be exercised

9. Primary segment information

The Company is organised into two business segments viz. Retail space division comprising of construction of malls for sale and or lease to third parties and Windmill division comprising of wind energy generator.

Secondary segment information

The Company does not have geographical distribution of revenue hence the secondary segmental reporting based on geographical location of its customers is not applicable to the Company.

10. Based on the available information with the management, the Company does not owe any sum to a micro, small or medium enterprise as defined in Micro, Small and Medium Enterprises Development Act, 2006.

11. Balances of certain trade receivables, advances and trade payables are subject to confirmation / reconciliation and subsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material.

12. Previous year comparatives

Figures for the previous year have been regrouped wherever considered necessary to confirm with the current year's presentation.

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Mar 31, 2014

1 (a). Rights and restrictions attached to equity shareholders

The Company has only one class of equity share having face value of Rs. 5 each. Every holder of equity share is entitled to one vote per equity share. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining assets of the Company.

1 (b). Rights and restrictions attached to preference shareholders:-

The Company has only one class of preference share having face value of Rs.10 each. Every holder of preference share is entitled to one vote per preference share.

2. Disclosures pursuant to Accounting Standard 15 "Employee Benefits"

I. The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

The following table set out the status of the gratuity plan as required under Accounting Standard 15 "Employee Benefits" and the reconciliation of opening and closing balances of the present value of the defined benefit obligation.

3. Segment reporting:

Primary segment information

The Company is organised into two-business segments viz. Retail space division comprising of construction of malls for sale and or lease to third parties and Windmill division comprising of wind energy generator.

4. Earnings per share (EPS)

The basic earnings per equity share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The earnings per share is calculated as under:

5. Bank Borrowings:

A. Term Loans taken from Axis Bank are secured against:

i. Personal guarantee of Mr. Rasesh Kanakia and Mr. Himanshu Kanakia.

ii. Charge on the moveable fixed assets and current assets of the Company.

Primary charge

a) Hypothecation of receivables (pertaining to Nagpur mall, multiplexes leased to Cinemax India Limited, advertisement revenue, car parking revenue and revenue from sale of power).

b) Escrow agreement to be executed by the Company with the bank and to be acknowledged by the tenants to route the cash flows through the designated account.

Collateral charge

a) Exclusive charge by way of mortgage of the following two properties:

Commercial building "Eternity mall and Multiplex" situated at plot no. 1, KH No. 312/2,313/1, Bearing Corporation House No. 22, C.S No. 1784/1, Ward No. 71, MoujeSitabuldi, Taluka and District Nagpur

Commercial building "Cinemax" Multiplex, Eternity Mall, Teen Haat Naka, L.B.S. Marg, Thane (West) 400602.

B. The car loan from Axis bank is secured against Maruti Suzuki SX4 for which the loan was taken.

6. Based on the available information with the management, the Company does not owe any sum to a micro, small or medium enterprise as defined in Micro, Small and Medium Enterprises Development Act, 2006.

7. Extraordinary item pertain to the expenses incurred towards carrying out the process of demerging the Companys'' theatre exhibition business into a separate entity viz. Cinemax India Limited.

8. The current assets, loans and advances are stated at the value, which in the opinion of the board, are realisable in the ordinary course of the business. Current liabilities and provisions are stated at the value payable in the ordinary course of the business.

9. Balances of certain trade receivables, advances and trade payables are subject to confirmation/reconciliation andsubsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material.

10. Previous year comparatives

Figures for the previous year have been regrouped wherever considered necessary to confirm with the current years'' presentation.

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Mar 31, 2013

1. Segment reporting:

Primary segment information:

Till the previous year, the Company was organised into three-business segments viz. Theatre Exhibition division comprising of multiplex theatres and other entertainment facilities, Retail space division comprising of construction of malls for sale and or lease to third parties and Windmill division comprising of wind energy generator.

However, Theatre Exhibition business of the Company has been demerged with effect from 1 April 2012 to a separate entity viz. Cinemax Exhibition India Limited (presently known as Cinemax India Limited) in the manner provided for in the scheme sanctioned by the Honorable High Court of Judicature at Bombay vide its order dated 9 March 2012.

2. Earnings/(Losses) per Share (EPS):

The basic Earnings/ (Losses) per equity share is computed by dividing the net profit/(loss) attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting year. The number of shares used in computing diluted Earnings/(Losses) per share comprises the weighted average number of shares considered for deriving basic Earnings/(Losses) per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The Earnings/(Losses) per share is calculated as under:

3. Bank Borrowings:

A. Term Loanstaken from Axis Bank are secured against:

i. Personal Guarantee of Mr. Rasesh Kanakia and Mr. Himanshu Kanakia.

ii. Charge on the moveable fixed assets and current assets of the Company.

a) Exclusive charge by way of mortgage of the following three properties as under:

b) Commercial Building "Eternity Mall and Multiplex" situated at plot no. 1, KH No. 312/2,313/1, Bearing Corporation House No. 22, C.S No. 1784/1, Ward No. 71, MoujeSitabuldi, Talukaand District Nagpur.

c) Commercial Building "Cinemax" Multiplex, Eternity Mall, Teen Haat Naka, L.B.S. Marg, Thane (West) 400602.

d) Commercial Building "Cinemax" Multiplex, Wonder Mall, Kapurbawadi Junction, Ghodbunder Road, Thane (West) 400601.

iii. Debt Service Reserve Account (DSRA) equivalent to one month interest repayment to be maintained under lien with AxisBank.

B. Term Loan taken from Aditya Birla Finance Limited which is secured against:

i. Exclusive Charge and hypothecation of present and future lease rental receivables from the property situated at

Ground floor Unit B1-004 & B1-005 of Boomerang Building, situated at Village Sakinaka Chandivali, Andheri East. Mumbai -53.

ii First & Exclusive charge with mortgage of Units B1-004 & B1-005 of Boomerang Building, situated at Village SakinakaChandivali, Andheri East, Mumbai -53

4. Contingent liability pertaining to service tax on rental of immovable properties amount to Rs. Nil (Previous Year Rs. 365.92lacs).

5. Capital Commitments:

Estimated value of contracts remaining to be executed on capital account and not provided for, net of advances aggregated to Rs. Nil (Previous Year Rs. 269.45 lacs).

6. CIF value of imports in respect of capital goods purchased during the year aggregated to Rs. Nil (Previous Year Rs. 35.72lacs).

7. Expenditure in foreign currency in relation to foreign traveling and marketing aggregated to Rs. Nil(Previous Year Rs. 1.15lacs).

8. Based on the available information with the management, the Company does not owe any sum to a micro, small or medium enterprise as defined in Micro, Small and Medium Enterprises Development Act, 2006.

9. Extraordinary item pertain to the expenses incurred towards carrying out the process of demerging the Company''s Theatre Exhibition Business into a separate entity viz. Cinemax India Limited.

10. The Current Assets, Loans and Advances are stated at the value, which in the opinion of the Board, are realisable in the ordinary course of the business. Current liabilities and provisions are stated at the value payable in the ordinary course of the business.

11. Balances of certain debtors, advances and creditors are subject to confirmation/reconciliation and subsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material.

12. The Honorable High Court of Judicature at Bombay vide its order dated 9th March 2012 has sanctioned the Scheme of demerger i.e. Composite Scheme of Arrangement between the CinelineIndia Limited Formerly known as Cinemax Properties Limited) and Cinemax India Limited (Formerly known as Cinemax Exhibition India Limited) and their respective Shareholders and Creditors under Sections 391 to 394 read with Sections 78, 100 to 103 of the Companies Act, 1956. 1st April 2012 and 20th April 2012 are the appointed date and effective date, respectively of the scheme. Accordingly, the Honorable High Court has inter alia sanctioned the following:

a) Demerger of Exhibition of Films business:

The Scheme envisages the demerger of Theatre Exhibition business of Cineline India Limited (Formerly known as Cinemax Properties Limited) into separate entity viz., Cinemax India Limited (Formerly known as Cinemax Exhibition India Limited) on a going concern basis in the manner provided for in the scheme.

b) Issue and Allotment of Shares of Cinemax India Limited (CIL) in the ratio of 1:1.

Each individual shareholder of Cineline India Limited (Formerly known as Cinemax Properties Limited) {including their respective heirs, executors, administrators or other legal representatives or the successors - in - title}whose name shall appear in the Register of Members of CPL as on the Demerger Record Date i.e.18 May 2012 shall be issued and allotted shares of CIL in the following manner:

1 (One) fully paid Equity Share of Rs. 5 (Rupees Five) each of CIL shall be issued and allotted for every 1 (One) fully paid Equity Share of Rs. 10 (Rupees Ten) each held in CPL "

c) Name change of the Company:

Pursuant to Scheme of arrangement name of "Cinemax India Limited" changed to "Cinemax Properties Limited" with effect from 9th May 2012 and further changed to "Cineline India Limited" w.e.f. 26th March 2013.

13. Previous year comparatives:

Figures for the previous year have been regrouped wherever considered necessary to confirm with the current year''s presentation.

The Theatre Exhibition Business of Cineline India Limited (Formerly known as Cinemax Properties Limited) has been demerged with effect from 1st April 2012 to a separate entity viz. Cinemax Exhibition India Limited (presently known as Cinemax India Limited) in the manner provided for in the scheme sanctioned by the Honorable High Court of Judicature at Bombay vide its order dated 9th March 2012. Hence the figures for the previous year cannot be effectively compared with the figures for the year ended 31st March 2013.

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Mar 31, 2012

1. Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the applicable Accounting Standards and Accounting Rules as notified by Central Government under the Companies Act, 1956, to the extent applicable.

2. Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent liabilities. The estimates and assumptions used in accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

3. Disclosures pursuant to Accounting Standard 15 (AS -15) "Employee Benefits

The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

Secondary segment information:

The Company does not have geographical distribution of revenue hence the secondary segmental reporting based on geographical location of its customers is not applicable to the Company.

4. Earnings/(Losses) per Share (EPS):

The basic earnings/(losses) per equity share is computed by dividing the net profit/(loss) attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings/(losses) per share comprises the weighted average number of shares considered for deriving basic earnings/(losses) per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The Earnings/(Losses) per share is calculated as under:

5. Bank Borrowings:

1. Term Loans, Working Capital Loans and Non Fund Based Credit Facilities taken from Axis Bank are secured against:

i. Personal Guarantee of Mr. Rasesh B. Kanakia and Mr. Himanshu B. Kanakia

ii. Charge on the moveable fixed assets and current assets of the Company and its three wholly owned subsidiaries viz. Vista Entertainment Private Limited, Nikmo Entertainment Private Limited and Odean Shrine Multiplex Private Limited.

iii. Exclusive charge by way of mortgage of the following three properties as under:

a) Commercial Building "Eternity Mall and Multiplex" situated at plot no. 1, KH No. 312/2,313/1, Bearing Corporation House No. 22, C.S No. 1784/1, Ward No. 71, Mouje Sitabuldi, Taluka and District Nagpur.

b) Commercial Building "Cinemax" Multiplex, Eternity Mall, Teen Haat Naka, L.B.S. Marg, Thane (West) 400602.

c) Commercial Building "Cinemax" Multiplex, Wonder Mall, Kapurbawadi Junction, Ghodbunder Road, Thane (West) 400601.

iv. Debt Service Reserve Account (DSRA) equivalent to one month interest repayment to be maintained under lien with Axis Bank.

v. Corporate guarantee of the three wholly owned operating subsidiaries viz. Vista Entertainment Private Limited, Nikmo Entertainment Private Limited and Odeon Shrine Multiplex Private Limited.

vi. Goods procured under Letter of Credit.

2. Vehicle loans taken from various banks are secured against the vehicles taken on hire purchase and the personal guarantees of the directors.

6. Contingent liability pertaining to service tax on rental of immovable properties amounts to Rs. 365.92 lacs (Previous year Rs. 377.19 lacs)

7. Capital Commitments:

Estimated value of contracts remaining to be executed on capital account and not provided for, net of advances, aggregated to Rs. 269.45 lacs (Previous year Rs. 1,086.00 lacs).

8. CIF value of import in respect of capital goods purchased during the year aggregated to Rs. 35.72 lacs (Previous year Rs. 139.36 lacs).

9. Expenditure in foreign currency in relation to foreign traveling and marketing aggregated to Rs. 1.15 lacs (Previous year Rs. 3.81 lacs).

10. Based on the available information with the management, the Company does not owe any sum to a micro, small or medium enterprise as defined in Micro, Small and Medium Enterprises Development Act, 2006.

11. The exceptional items includes

(I) Rs. 202.93 lacs towards prepayment charges on account of shifting of banking facilities to avail better terms.

(ii) The Company has made provision of Rs. 365.92 lacs pertaining to service tax on Renting of Immoveable property in accordance with the Supereme Court Order dated 14 October 2011.

12. The Current Assets, Loans and Advances are stated at the value, which in the opinion of the Board, are realizable in the ordinary course of the business. Current liabilities and provisions are stated at the value payable in the ordinary course of the business.

13. Balances of certain debtors, advances and creditors are subject to confirmation/reconciliation and subsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material.

14. Events occurring after Balance Sheet date:

The Hon'ble High Court of Judicature at Bombay vide its order dated 9 March 2012 has sanctioned the Scheme of demerger i.e. Composite Scheme of Arrangement between the Cinemax Properties Limited (formerly known as Cinemax India Limited) and Cinemax Exhibition India Limited (CEIL) and their respective Shareholders and Creditors under Sections 391 to 394 read with Sections 78,100 to 103 of the Companies Act, 1956.1 April 2012 and 20 April 2012 are the appointed date and effective date, respectively of the scheme. Accordingly, the Hon'ble High Court has inter alia sanctioned the following:

a) Demerger of Exhibition of Films business:

The Scheme envisages the demerger of Theatre Exhibition business of Cinemax Properties Limited (formerly known as Cinemax India Limited) into separate entity viz., Cinemax Exhibition India Limited on a going concern basis in the manner provided for in the scheme.

b) Issue and Allotment of Shares of Cinemax Exhibition India Limited (CEIL) in the ratio of 1:1.

Each individual shareholder of Cinemax India Limited (CIL) {including their respective heirs, executors, administrators or other legal representatives or the successors in title whose name shall appear in the Register of Members of CIL as on the Demerger Record Date i.e. 18 May 2012 shall be issued and allotted shares of CEIL in the following manner:

1 (One) fully paid Equity Share of Rs. 5 (Rupees Five) each of CEIL shall be issued and allotted for every 1 (One) fully paid Equity Share ofRs. 10 (Rupees Ten) each held in CIL.

c) Reduction of the existing equity share capital of CEIL.

Subsequent to allotment as prescribed in Note 14 (b) above, the existing 100,000 equity shares ofRs. 5 (Rupees Five) each of the Company will be cancelled. This reduction would not involve either a diminution of liability in respect of unpaid share capital or payment of paid-up share capital and the provisions of Section 101 of the Companies Act, 1956.

d) Name change of the Company:

Pursuant to Scheme of arrangement name of "Cinemax India Limited" changed to "Cinemax Properties Limited" with effect from 9 May 2012.

15. Previous year comparatives:

Till the year end 31 March 2011, the Company was using pre-revised schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised schedule VI, notified under the Companies Act, 1956, has become applicable to the Company. The Company has accordingly reclassified previous year figures to confirm to this year classification.

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Mar 31, 2011

1. Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the applicable Accounting Standards and Accounting Rules as notified by Central Government under the Companies Act, 1956, to the extent applicable.

2. Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent liabilities. The estimates and assumptions used in accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods.

a) Disclosures pursuant to Accounting Standard 15 (AS-15) "Employee Benefits"

i. The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

ii. The Company has a defined plan for compensated absences for its employees.

b) Segment reporting AS-17:

Primary segment information:

The Company is organized into three-business segments viz. Theatre Exhibition division comprising of multiplex theatres and other entertainment facilities, Retail space division comprising of construction of malls for sale and or lease to third parties and Windmill division comprising of wind energy generator.

Secondary segment information:

The Company does not have geographical distribution of revenue hence the secondary segmental reporting based on geographical location of its customers is not applicable to the Company.

c) Disclosure of Related Party transactions under AS-18:

In accordance with the disclosure requirements of Accounting Standard (AS)-18 "Related party Disclosures" the details of related party transactions are given below:

i. List of related parties:

Nature of relationship Name of related parties

Companies where control exists

Subsidiaries

1. Vista Entertainment Private Limited

2. Growel Entertainment Private Limited

3. Cinemax Motion Pictures Limited

4. Odeon Shrine Multiplex Private Limited

Ultimate Subsidiary

1. Nikmo Entertainment Private Limited (formerly known as Nikmo Finance Private Limited)

Directors and Key Management Personnel 1. Mr. Rasesh B. Kanakia

2. Mr. Himanshu B. Kanakia

3. Mrs. Hiral H. Kanakia (upto 10 September 2009)

Relatives of Directors and Key Management Personnel

1. Mrs. Rupal Kanakia

2. Mrs.ManishaVora

3. Mrs. Hiral H. Kanakia (from 11 September 2009)

Entities under common control or significant influence can be exercised

1. Kanakia Spaces Private Limited

2. Kanakia Finance And Investments Private Limited

3. R And H Amusements And Games Private Limited

4. Cine Cafe Services.

5. Kanakia Hospitality Private Limited

Beneficial Trust 1. Babubhai Kanakia Foundation

g) Bank Loans:

1 Term loans and Cash Credit taken from Jammu and Kashmir Bank are secured against:

i. Personal guarantees of Directors.

ii. Hypothecation of all movable fixed assets including furniture and fixtures, machinery / equipment, fittings etc. to be in upcoming projects at eight locations.

iii. Assignment of cash flows from eight new multiplexes.

iv. Hypothecation of the Equipments, furniture and other moveable's assets at installed in new nine locations.

v. Assignment of cash flows from new multiplexes proposed to be established at nine locations.

vi. Assignment of all receivables and dues from Hindustan Coca Cola Beverage Private Limited.

vii. Hypothecation of equipments, furniture and other moveable assets to be installed at three new multiplexes.

viii. First Charge of present &future cash flows of all the three multiplexes.

ix. Registered Mortgage of four multiplex.

x. Hypothecation of equipments, furniture and other moveable assets to be installed at four new multiplexes.

xi. First Charge of present &future cash flows of all the four multiplexes.

2 Term Loans from State Bank of India are secured against:

i. Land and construction at a mall being principal securities and against a theatre, being collateral security.

ii. Hypothecation charge on fit-outs financed by the Bank at twelve Cinema Halls and Multiplexes.

iii. Equatable mortgage of one mall & multiplex.

3 Term Loan and Cash Credit / Working Capital Demand Loan taken from Standard Chartered Bank are secured against:

i. Exclusive charge on a Windmill purchased of Standard Chartered Bank Term Loan.

ii. Exclusive charge on a Windmill proposed to be purchased of Standard Chartered Bank Term Loan.

iii. Exclusive charge on the receivables of two multiplexes.

iv. Personal guarantees of Directors.

v. Exclusive charge on one commercial property owned by the company.

4 Term Loans from Saraswat Bank are secured against:

i. Registered Mortgage of a property belonging to the company.

ii. Hypothecation of furniture and fixtures installed at four locations.

iii. Hypothecation of projections and screening equipments installed at four locations.

iv. Hypothecation of electrical and airconditioners installed at four locations.

v. Registered Mortgage of a theatre as collateral security.

vi. Personal guarantees of Directors

5 Term Loan from Tata Capital is secured against:

i. Hypothecation of equipments installed at four locations.

ii. Personal guarantee of Directors.

6. Cash Credit from HDFC Bank is secured against:

i. Assignment of cash accruals of three locations. ii. Personal Guarantee of directors.

7. Vehicle loans taken from various banks are secured against the vehicles taken on Hire purchase and the personal guarantees of the directors.

8. Term Loan (Corporate Loan) from Kotak Mahindra Bank is secured against:

i. Charged on entire credit card receivables of the company.

ii. Mortgage of one multiplex as a collateral security.

h) Contingent liability pertaining to service tax on rental of immovable properties amounts to Rs. 377.19 lacs (Previous year Rs. 188.19 lacs)

i) Capital Commitments:

Estimated value of contracts remaining to be executed on capital account and not provided for, net of advances, aggregated to Rs. 1,086.00 lacs (Previous year Rs. 146.06 lacs).

j) CIF value of import in respect of capital goods purchased during the year aggregated to Rs. 139.36 lacs (Previous year Rs. 38.23 lacs).

k) Expenditure in foreign currency in relation to foreign traveling and marketing aggregated to Rs. 3.81 lacs (Previous year Rs. 6.75 lacs).

m) Bank guarantees amounting to Rs. Nil (Previous year Rs. 328.74 lacs).

p) Based on the available information with the management, the Company does not owe any sum to a small scale Industrial undertaking as defined in clause (j) to section 3 of the Industries (Development and Regulation) Act, 1951.

r) The current assets, loans and advances are stated at the value, which in the opinion of the Board, are realisable in the ordinary course of the business. Current liabilities and provisions are stated at the value payable in the ordinary course of the business.

s) Balances of certain debtors, advances and creditors are subject to confirmation/reconciliation subsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material.

t) Previous year's figures have been regrouped, wherever considered necessary to confirm with the current year's presentation.

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Mar 31, 2010

A) Disclosures pursuant to AS-15 (Revised) "Employee Benefits":

The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

b) Earnings perShare (EPS):

The basic earnings per equity share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The EPS is calculated as under:

c) Bank Loans:

1 Term loans and Cash Credit taken from Jammu and Kashmir Bank are secured against:

i. Personal guarantees of Directors.

ii. Hypothecation of all movable fixed assets including furniture and fixtures, machinery / equipment, fittings etc. to be in upcoming projects at eight locations.

iii. Assignment of cash flows from eight new multiplexes.

iv. Hypothecation of the Equipments, furniture and other movables assets at installed in new nine locations.

v. Assignment of cash flows from new multiplexes proposed to be established at nine locations.

vi. Assignment of all receivables and dues from Hindustan Coca Cola Beverage Private Limited.

vii. Hypothecation of equipments, furniture and other movable assets to be installed at three new multiplexes.

viii. First charge of present & future cash flows of all the three multiplexes.

ix. Registered mortgage of four multiplexes.

2 Cash credit from Bank of India is secured against the office premises belonging to Kanakia Spaces Private Limited, being collateral security.

3 Term Loans from State Bank of India are secured against:

i. Land and construction at a mall being principal securities and against a theatre, being collateral security.

ii. Hypothecation charge on fit-outs financed by the Bank at twelve Cinema halls & multiplexes.

iii. Registered mortgage on a Cinema hall, being a collateral security.

iv. Equitable mortgage of a multiplex theatre as collateral security.

4 Term Loan and Cash Credit / Working Capital Demand Loan taken from Standard Chartered Bank are secured against:

i. Exclusive charge on a Windmill purchased of Standard Chartered Bank Term Loan.

ii. Exclusive charge on a Windmill proposed to be purchased of Standard Chartered Bank Term Loan.

iii. Exclusive charge on the receivables of two multiplexes.

iv. Personal guarantees of Directors.

5 Term Loans from Saraswat Bank are secured against:

i. Registered mortgage of a property belonging to the company.

ii. Hypothecation of furniture and fixtures installed at four locations.

iii. Hypothecation of projections and screening equipments installed at four locations.

iv. Hypothecation of electrical and air conditioners installed at four locations.

v. Registered mortgage of a theatre as collateral security.

vi. Personal guarantees of Directors.

6 Term Loan from Tata Capital is secured against:

i. Hypothecation of equipments to be installed at four locations. ii. Personal guarantee of Directors.

7 Cash CreditfromHDFC Bank is secured against:

i. Assignment of cash accruals of three locations.

ii. Personal Guarantee of Directors.

8 Vehicle loans taken from various banks are secured against the vehicles taken on hire purchase and the personal guarantees of the Directors

h) Contingent liability pertaining to service tax on rental of immovable properties amounts to Rs. 188.19 lacs (Previous year Rs.Nil).

i) Capital Commitments:

Estimated value of contracts remaining to be executed on capital account and not provided for, net of advances, aggregated to Rs. 146.06 lacs (Previous year Rs. 640.30 lacs).

j) As the turnover of the Company includes sale of food and beverages, it is not possible to give quantitative details of the turnover and food and beverages consumed. The Company has been exempted from giving these particulars for the year vide Order No. F.No.46/128/2010-CL-lll dated 17 May 2010 issued by the Department of Company Affairs.

k.Exceptional items for the current year comprise of impairment loss on certain fixed assets due to forced closure for a multiples theatre and a food court.

l)GIF value of import in respect of capital goods purchased during the year aggregated to Rs.38.23 lacs (Previous year Rs. 267.83 lacs).

m)Expenditure in foreign currency in relation to foreign traveling and marketing aggregated to Rs.6.75 lacs (Previous year Rs.6.05 lacs).

n)The current assets,loans and advances are stated at the value,which in the opinion of the Board,are realisable in the ordinary course of the business.Current liabilities and provisions are stated at the value payable in the ordinary course of the business.

o)Previous years figures have been regrouped /rearranged,wherever considered necessary to conform with the current years presentation.