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Directors Report of Prime Focus Ltd.

Jun 30, 2015

The Company's Directors are pleased to present the Eighteenth Annual Report and th e Audited Statements of the Accounts for the financial year ended June 30, 2015.

1. FINANCIAL PERFORMANCE SUMMARY

The Consolidated and Standalone Audited Financial Results for the year ended June 30, 2015 are as follows:

(Rs, In lacs)

Particulars Consolidated Standalone

2014-15 2013-14 2014-15 2013-14 (12months) (15 months (12months) (15months)

Income from operations 153797.45 103,272.16 11349.36 27,354.79

Other operating income 6961.09 4869.71 1010.14 175.40 Total income from operations 160758.54 108141.87 12359.50 27530.19

Less: Expenses 158749.98 101,639.25 9892.01 22,648.91

Add: Other income 1955.95 4601.01 1102.59 3693.81

Less: Finance costs 7272.55 6,867.60 2466.79 2,810.83

Less: Exceptional items 24754.80 1,740.65 1570.32 -171.51

Less: Tax expense 3252.51 707.93 2343.98 -446.50

Less: Minority interest -2093.07 -638.69 - -

Net Profit/Loss for the period -29222.28 2426.14 (2811.01) 6382.27

2. OPERATIONS AND PERFORMANCE REVIEW

During the year under review, on consolidated basis, total income of the Company and its subsidiaries stood to beRs, 160758.54 lacs as compared to Rs, 108141.87 lacs in the previous year.

On standalone basis, total income during the year wasRs, 12359.5 lacs as compared toRs, 27530.19 lacs in the previous year. Profit before exceptional items and tax during the period was Rs,1103.28 lacs as compared to Rs, 5764. 26 lacs in the previous year. The Net (loss)/profit after tax wasRs, (2811.01) lacs as compared to Rs, 6,382 lacs in the previous year.

A detailed analysis on the Company's performance, both Consolidated & Standalone, is included in the "Management Discussion & Analysis" Report which forms part of this Annual Report.

3. DIVIDEND

In view of the losses in Financial Year 2014-15, your Board did not recommend any dividend for its equity shareholders.

4. SHARE CAPITAL

During the year under review, the Authorized Share Capital of the Company was increased from Rs, 25,00,00,000 (Rupees Twenty Five Crores Only) divided into 25,00,00,000 (Twenty Five Crores) equity shares of Rs, 1/- (Rupee One Only) each to Rs, 35,00,00,000 (Rupees Thirty Five Crores Only) divided into 35,00,00,000 (Thirty Five Crores) equity shares of Rs, 1/-(Rupee One Only) each.

The Company had issued and allotted 90,384,615 equity shares of Rs, 1/- each to Reliance Media Works Limited and 23,076,923 equity shares of Rs, 1/- each to Monsoon Studio Private Limited aggregating to 113,461,538 equity shares of Rs, 1/- each on April 7, 2015 at a price of Rs, 52/- per share (including a premium of Rs, 51/- per share) on Preferential basis thereby triggering an open offer limit of 26%. Hence Reliance Media Works Limited together with Person Acting in Concert namely Reliance Land Private Limited, Namit Malhotra, Naresh Malhotra and Monsoon Studio Private Limited made open offer to the shareholders of the company for the acquisition up to 7,77,08,534 fully paid up equity shares of face value Rs, 1/- each from the public shareholders of the company constituting 26% of the full diluted voting equity capital of the company.

During the process of open offer, Reliance Media Works Limited acquired 4,36,95,446 equity shares and Monsoon Studio Private Limited acquired 44,29,172 equity shares from the public shareholders pursuant to Chapter II Regulation 3(2) of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011.

Consequent to the aforesaid allotment, the issued, subscribed and paid-up equity share capital of the Company increased to Rs, 29,88,78,974/- comprising of 29,88,78,974 equity shares of Rs, 1/- each from Rs, 18,54,17,436/- comprising of 18,54,17,436 equity shares of Rs, 1/-each.

5. EMPLOYEE STOCK OPTION SCHEME (ESOP)

In the Board of Directors' meeting held on July 02, 2014, approval was granted to introduce and implement Employee Stock Option Scheme titled 'PFL-ESOP Scheme 2014' whereby stock options up to 6% of the paid up capital of the Company (post aforesaid preferential allotment) aggregating 17,932,738 stock options would be issued to eligible employees of the Company, its subsidiaries and associates. The said scheme was approved by the shareholders in the Extra-ordinary General Meeting held on August 01, 2014.

6. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year under review, following material changes took place:

A. Merger of Double Negative Holdings Limited (Double Negative) with PFW's VFX business:

Effectively July 01, 2014, Prime Focus World N.V. ('PFWNV') forming part of the group, closed the transaction relating to the merger of Double Negative, one of the largest Visual effects services providers to the global film industry pursuant to a share sale agreement date June 25, 2014. This agreement has created the World's largest independent VFX, stereo conversion and animation company serving the Hollywood film industry and Double Negative has now become a wholly owned subsidiary of PFWNV.

B. Prime Focus and Gener8 signed Technology Licensing Partnership

Prime Focus had entered into a licensing and 3D conversion partnership with Canada's Gener8 Media Corp. ("Gener8" or "the Company"), a global leader in 3D conversion technology, which shall secure an exclusive worldwide license to use the Company's proprietary 3D conversion technology G83D™ throughout the entertainment industry.

C. Acquisition of Film and Media business:

The Company acquired the Film and Media Services business of Reliance MediaWorks Limited ("RMW") on a slump sale basis as a going concern along with the assets and liabilities at a lump sum consideration of Rs, 350 crore.

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the Financial Statements relate and the date of this Report.

7. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, there were no significant or material orders passed by the Regulators or Courts or Tribunal which would impact the going concern status of the Company and its future operation.

8. RISK MANAGEMENT

The Board of the Company has formed a Risk Management Committee and a policy to frame, implement and monitor the risk management plan for the Company. The Policy covers the various risks associated with the Company while executing its object. The Policy aims to assess the risk, manage it and monitor it so as to keep the risk at zero level or minimum level. The Risk Management Committee shall be responsible to monitor and review the risk management plan of the Company. The Company is committed to manage risk in a manner appropriate to achieve its strategic objectives. For further details, please refer to the Management Discussion and Analysis Report which forms part of the Annual Report.

9. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company is constantly endeavoring to improve the standards of internal control in various areas and taking steps to strengthen the internal control system to make it commensurate with the size of the respective entities and the nature of their business. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company's risk management policies and systems. For further details, please refer to the Management Discussion and Analysis Report which forms part of the Annual Report.

10. HUMAN RESOURCES

Human Resource is considered as one of the most critical resource in the business which can be continuously smoothened to maximizethe effectiveness of the organization. Human Resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening the Company's Policies and Systems. All personnel continue to have healthy, cordial and harmonious approach thereby enhancing the contributory value of the Company. The Company has generally enjoyed cordial relations with its personnel.

Further, the total number of personnel's of the Company as on June 30, 2015 is over 6,000.

11. PREVENTION OF SEXUAL HARASSMENT

The Company has zero tolerance for sexual harassment at workplace and has a mechanism in place for prevention, prohibition and redressal

of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological. All employees (permanent, contractual, temporary, trainees) are covered.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

During the year under review, Company has not received any complaints on sexual harassment.

12. DEBENTURES

During the year under review, Company issued 4,891 unlisted, unrated Redeemable Debentures not convertible into Equity Shares of the Company of Rs, 100,000/- each aggregating to Rs, 48.91 Crore to meet general corporate purposes.

13. PUBLIC DEPOSITS

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013("Act") read with the Companies (Acceptance of Deposits) Rules, 2014.

14. EXTRACT OF ANNUAL RETURN

The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed as ANNEXURE-A to this Report.

15. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its subsidiaries have been prepared in accordance with the provisions of the Act read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of the Listing Agreement with the Stock Exchanges and forms part of the Annual Report. Pursuant to Section 129(3) of the Act, a statement containing the salient features of the financial statements of the subsidiary companies is at ached to the Financial Statements in Form AOC-1. The Company will make available the said financial statements and related detailed information of the subsidiary companies upon the request by any member of the Company or its subsidiary companies. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company.

Pursuant to the provisions of section 136 of the Act, the Audited financial statements of the Company, consolidated financial statements along with relevant documents and separate Audited Accounts in respect of subsidiaries, are available on the website of the Company viz.www.primefocus.com.

16. SUBSIDIARY COMPANIES, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year, the following changes have taken place in subsidiary companies:

a. Companies which have become subsidiaries:

1. Gener8 India Media Services Limited (formerly known as Prime Focus Entertainment Services Limited/Reliance MediaWorks Entertainment Services Limited) -Subsidiary of the Company

2. Reliance MediaWorks (Mauritius) Limited - Subsidiary of the Company

3. Reliance Lowry Digital Imaging Services Inc. - Subsidiary of Reliance MediaWorks (Mauritius) Limited

4. Double Negative Holdings Limited - Subsidiary of Prime Focus World N.V.

5. Gener8 Digital Media Services Limited - Subsidiary of PF World Limited

6. Double Negative Limited - Subsidiary of Double Negative Holdings Limited

7. Double Negative Singapore Pte. Limited- Subsidiary of Double Negative Holdings Limited

8. Double Negative Films Limited- Subsidiary of Double Negative Holdings Limited

9. Double Negative Canada Productions Limited - Subsidiary of Double Negative Holdings Limited

b. Companies ceased to be subsidiary companies

Based on the approval of the Board of Directors of the Company vide Resolution dated March 31, 2015, the entire holding of 21,492,003 ordinary shares in Prime Focus London Plc, a Company incorporated in the UK was sold at a total consideration of £ 399,751.26 (@1.86 pence each). Prime Focus London Plc and its following subsidiaries cease to be subsidiaries of Prime Focus Limited.

1. Prime Focus London Plc, UK 8. VTR Media Services Limited

2. VTR Media Investments Limited 9. PF Broadcast & Commercial Limited

3. Busy Buses Limited 10. Prime Focus Broadcast Limited

4. Slipstream Limited 11. VTR Post Limited

5. VTR Media Investments 2 Limited 12. Prime VFX Limited

6. DMJM Film Limited 13. PF Broadcast VFX Limited

7. Prime Focus Productions 5 Limited 14. PF Film UK Limited

c. Joint Venture / Associates Companies

a. Joint Venture

No Company has become / ceased to be a joint venture during the financial year 2014-15.

b. Associates Companies

Acquired 30% ownership interest in Digital Domain - Reliance LLC during the financial year 2014-15.

The Company has adopted a Policy for determining Material Subsidiaries in line with Clause 49 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the website of the Company (URL: ht p://www.primefocus.com/sites/default/fi les/pdf/ Policy_on_Material_Subsidiaries.pdf)

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A) CONSERVATION OF ENERGY

i) The steps taken to or impact on conservation of energy– Although the Company is not engaged in manufacturing activities, the Company makes every effort to conserve energy as far as possible in its post-production facilities, Studios, Offices, etc. The Company also takes Significant measures to reduce energy consumption by using energy efficient computers and by purchasing energy-efficient equipment. The Company purchases PCs, laptops, air conditioners etc. that meet environment standards, wherever possible and replace old equipment with more energy-efficient equipment

ii) The Steps taken by the Company for utilizing alternate sources of energy– Not applicable

iii) The capital investment on energy conservation equipments–

The Company constantly evaluates new developments and invests into latest energy efficient technology.

B) TECHNOLOGY ABSORPTION

i) The efforts made towards technology absorption – The Company adopts the latest trends in the technology development and introduces the same so as to ensure reduction in cost with best quality output.

ii) The benefits derived like product improvement, cost reduction, Product development or import substitution– Not applicable

C) IMPORTED TECHNOLOGY

i) The details of technology imported- Not Applicable

ii) The year of import - Not applicable

iii) Whether the technology has been fully absorbed - Not applicable

iv) If not fully absorbed - Not applicable

Expenditure incurred on Research and Development (R&D):

Your company is predominantly a service provider and therefore has not set up a formal R&D unit, however continuous research and development is carried out at various development centers as an integral part of the activities of the Company.

Particulars of foreign currency earnings and outgo are as under:

(Rs, In lacs)

Particulars June 30, 2015 June 30, 2014

Foreign Exchange Earned: 1667 19,804

Revenue from operations and interest income

Foreign Exchange Outgo: 58 183

Technical service cost, repairs and maintenance, interest and others

18. MANAGEMENT DISCUSSION AND ANALYSIS

Management's Discussion and Analysis Report for the financial year ended June 30, 2015 as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is included as a separate section forming part of the Annual Report.

19. CORPORATE GOVERNANCE REPORT

A separate section on Corporate Governance forming part of the Directors' Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

20. DIRECTORS

Pursuant to Section 149(10) of the Act, read along with the Rules framed there under, the Members had at the Annual General Meeting of the Company held on December 24, 2014, approved the appointment of Independent Directors [viz. Mr. Srinivasan Kodi Raghavan (DIN: 00012449), Mr. Rivkaran Singh Chadha (DIN: 00308288) and Mr. Padmanabha Gopal Aiyar (DIN 02722981)] from the conclusion of 17th Annual General Meeting to the conclusion of 22nd Annual General Meeting i.e. for a period of five consecutive years. Further, pursuant to the Section 149(13) and 152 of the Act, provisions for the retirement of rotation of directors shall not apply to such Independent Directors.

At the said Annual General Meeting, Mr. Naresh Malhotra was re-appointed as a Whole-time Director, liable to retire by rotation for a term of five years commencing from April 1, 2015.

In the Extra-Ordinary General Meeting held on August 1, 2014, Mr. Ramakrishnan Sankaranarayanan (DIN: 02696897) was appointed as Managing Director and Mr. Namit Malhotra (DIN: 00004049) was appointed as Chairman (Executive Director) and Chief Executive Officer of the Company. They have been appointed for a tenure of three years with effect from June 25, 2014 and their period of Office is liable to retire by rotation.

Dr. (Mrs.) Hemalatha Thiagarajan (DIN: 07144803) was appointed as an Additional Director (Non-Executive Independent) under Section 149 and Section 161 of the Act w.e.f. March 31, 2015, subject to consent by the Members of the Company at the ensuing Annual General Meeting. Further, Mr. Amit Bapna (DIN: 00008443) was appointed as an Additional Director (Nominee on behalf of Reliance MediaWorks Limited) w.e.f. September 16, 2015. Notices pursuant to Section 160 of the Act have been received from the Member proposing the appointment of Dr. (Mrs.) Hemalatha Thiagarajan and Mr. Amit Bapna as Directors of the Company.

In accordance with the provisions of Section 152 of the Act and Articles of Association of the Company, Mr. Ramakrishnan Sankaranarayanan (DIN: 02696897) shall retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re- appointment.

The Board recommends these appointment / re-appointment. Items seeking your approval on the above are included in the Notice convening the Annual General Meeting.

All the Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

Brief resumes of the directors being appointed / re-appointed forms part of the Notice of the ensuing Annual General Meeting.

The Company has incurred loss for the Financial Year 2014-2015. Accordingly, the disclosure required under Schedule V, Part II, proviso of Section II B (iv)(IV) of the Act forms part of the Corporate Governance Report.

21. RECEIPT OF REMUNERATION OR COMMISSION FROM HOLDING COMPANY OR SUBSIDIARY COMPANY

Mr. Ramakrishnan Sankaranarayanan, Managing Director of the Company was appointed as an Executive Director in Prime Focus Technologies Private Limited ("PFT"), a subsidiary company on June 25, 2014. He is in receipt of Rs, 34,00,000/- p.a. as remuneration in his capacity as an Executive Director of PFT.

22. KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, Mr. Namit Malhotra was appointed as a CEO and Executive Director. Mr. Vikas Rathee was appointed as Chief Financial Officer (CFO) of the Company w.e.f. August 01, 2014 in place of Mr. Nishant Fadia who stepped down as CFO with effect from July 31, 2014.

Ms. Kirti Desai was appointed as the Company Secretary and Compliance Officer with effect from August 01, 2014 in place of Mr. Navin Agarwal who resigned with effect from July 31, 2014. Ms. Kirti Desai had resigned from the post of Company Secretary and Compliance Officer with effect from July 07, 2015. Further, Ms. Parina

Shah was appointed as the Company Secretary and Compliance Officer of the Company w.e.f. September 12, 2015.

The Company has designated following personnel as KMPs pursuant to the provisions of Section 203 of the Act and the rules made there under.

- Mr. Ramakrishnan Sankaranarayanan, Managing Director

- Mr. Namit Malhotra, Chief Executive Officer

- Mr. Vikas Rathee, Chief Financial Officer

- Ms. Parina Shah, Company Secretary

23. BOARD EVALUATION

Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI under Clause 49 of the Equity Listing Agreement, the Board of Directors ("Board") has carried out an annual evaluation of its own performance, and that of its Committees and individual Directors.

The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors. A separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors; performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

The criteria for performance evaluation of the Board included aspects like Board composition and structure; effectiveness of Board processes, information and functioning etc. The criteria for performance evaluation of Committees of the Board included aspects like composition of Committees, effectiveness of Committee meetings etc. The criteria for performance evaluation of the individual Directors included aspects on contribution to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition the Chairperson was also evaluated on the key aspects of his role.

Selection and procedure for nomination and appointment of Directors

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The Committee is also responsible for reviewing and veting the CVs of potential candidates' vis-à-vis the required competencies, undertake a reference and due diligence and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Criteria for Determining Qualifications, Positive Attributes and Independence of a Director

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement, which is annexed as "Annexure-B".

Familiarization Programme for Independent Directors

Pursuant to requirement of Securities and Exchange Board of India vide Circular no. CIR/CFD/POLICY CELL/7/2014 dated September 15, 2014, the Company has in place a programme for familiarization of the Independent Directors with the Company, details of which is available on the website of the company: (ht p://www.primefocus.com/sites/ default/files/pdf/ Familiarization _programme_ for_ Independent_ Directors.PDF).

24. NOMINATION AND REMUNERATION POLICY

The Company has in place a Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and other Employees pursuant to the provisions of the Act and Clause 49 of the Listing Agreement.. The policy forms a part of this report and is annexed as "Annexure-C".

25. BOARD MEETINGS

During the year, fourteen Board Meetings were held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and Clause 49 of the Listing Agreement.

Details of the composition of the Board and its Committees and of the Meetings held, at endanger of the Directors at such Meetings and other relevant details are provided in the Corporate Governance Report.

26. AUDIT COMMITTEE

The Audit Committee comprises of following members:

Name of the Member Positions

Mr. Rivkaran Chadha Chairman

Mr. Kodi Raghavan Srinivasan Member

Mr. Padmanabha Gopal Aiyar* Member

Mr. Nainesh Jaisingh or his Alternate viz. Mr. Vibhav Member Parikh, during his absence

Mr. Amit Bapna** Member

*Mr. Padmanabha Gopal Aiyar was appointed as a member of the Committee with effect from November 14, 2014.

**Mr. Amit Bapna was appointed as a member of the Committee with effect from September 16, 2015.

Further, details relating to the Audit Committee are provided in the Corporate Governance Report.

27. VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The policy of vigil mechanism is available on the Company's website (Weblink: ht p://www.primefocus.com/sites/default/fi les/pdf/Vigil_ Mechanism_Policy.pdf )

28. PARTICULARS OF EMPLOYEES

The information on employees who were in receipt of remuneration of not less than Rs, 60 lakhs during the year or Rs, 5 lakhs per month during any part of the said year as required under Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. The said statement is also open for inspection at the registered Office of the Company. Any member interested in obtaining a copy of the same may write to the Company Secretary.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to the Report as "Annexure D".

29. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The brief outline of the CSR Policy of the Company along with the Annual Report on CSR activities is set out in "Annexure E" of this report. The policy is available on the Company's website (Weblink: ht p://www.primefocus.com/sites/default/fi les/pdf/CSR_Policy.pdf)

30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of Loans given, Investments made, Guarantees given and Securities provided during the year under Section 186 of the Act are stated in the Notes to Accounts of Standalone Financial Statements which forms part of this Annual Report.

31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/ transactions entered by the Company with the Related Parties during the financial year were on an Arm's length basis and were in compliance with the applicable provisions of the Act and the Listing Agreement. There are no materially Significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Actin Form AOC-2 pursuant to Section 134 (3) (h) of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014 is at ached as ANNEXURE-F to this Report.

All Related Party Transactions are placed before the Audit Committee as also before the Board for approval. 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 policy on Related Party Transactions as approved by the Board is uploaded on the Company's website (URL:ht p://www.primefocus. com/sites/default/fi les/pdf/policy_on_related_parties.pdf.)

32. AUDITORS

Statutory Auditors

In the last AGM held on December 24, 2014, M/s Deloit e Haskins & Sells (DHS), Chartered Accountants (Registration No. 117364W), have been appointed as Statutory Auditors of the Company to hold Office

from the conclusion of 17th Annual General Meeting till the conclusion of 22nd Annual General Meeting of the Company, subject to ratification of their appointment by the Members at every Annual General Meeting. Further, DHS have under Section 139(1) of the Act and the Rules framed there under furnished a certificate of their eligibility and consent for appointment.

The Auditor's Report on the consolidated financial statements contains qualification as regards figures for certain components included in the consolidated financial statements being unaudited for part of the year as under:

i.) The financial statements / the consolidated financial statements of certain subsidiaries whose financial statements / consolidated financial statements for the year ended 31st March, 2015 have been audited by us / other auditors reflect total assets of Rs, 2,893.31 crore as at 31st March, 2015, total revenues of Rs, 953.34 crore and net cash outflow amounting to Rs, 0.52 crore for the year ended on that date. The financial information of the said subsidiaries for the year ended 30th June, 2015, as considered in the consolidated financial statements, has been derived by making appropriate adjustments, based on the management accounts approved by the board of directors of the Holding Company, to the financial information as per the aforementioned audited financial statements/consolidated financial statements for the year ended 31st March, 2015. The financial information so derived of the said subsidiaries reflect total assets (net) of Rs, 73.63 crore as at 30th June, 2015, total revenues of Rs, 372.18 crore and net cash inflows amounting to Rs, 19.98 crore for the year ended on that date, as considered in the consolidated financial statements. Our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on our reports and that of the other auditors and the aforementioned management accounts.

ii.) The consolidated financial statements include unaudited standalone financial information in respect of certain subsidiaries which reflect total assets of Rs, 45.70 crore as at 30th June, 2015, total revenue of Rs, Nil, cash inflows amounting to Rs, 2.69 crore for the year then ended. These unaudited financial information as approved by the Board of Directors of the Company have been furnished to us by the Management and our report in so far as it relates to the amounts and disclosures included in respect of the subsidiaries is based solely on such approved unaudited standalone financial information.

The response of Directors with respect to the above are as follows:-

During the financial year 2014-15, the following material events took place:

1. Double Negative UK Holdings Ltd became a subsidiary of Prime Focus World NV (a subsidiary of the company) in July 2014. This entity has operating subsidiaries in UK, Singapore and Canada;

2. Licensing and 3D conversion partnership with Canada's Gener8 Media Corp, a global leader in 3D conversion technology, in March 2015; and

3. Acquisition of the global Film and Media Services business ('FMS business') from Reliance MediaWorks Limited in April 2015;

There were various local auditors, the annual closing of all the subsidiaries being April – March, unlike July-June for the holding company, local accounting rules and conversion of the same to Indian GAAP for audit of financials of the above mentioned acquisitions.

In view of the above-mentioned facts, it was difficult for the Company to complete the audit of component financial statements within the available time frame.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. S. N. Ananthasubramanian & Co., Practicing Company Secretaries, to undertake Secretarial Audit of the Company for the financial year 2014-15. The report of the Secretarial Auditor is annexed to this report as "Annexure G". The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks.

33. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm 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) 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 at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis.

e) the directors had laid down internal financial controls to be followed by the company and such internal financial controls are adequate and the Company is constantly endeavoring to improve the standards of internal control in various areas and taking steps to strengthen the internal control system to make it commensurate and effective with the size of the respective entities and the nature of their business.

f) 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.

34. ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation to its stakeholders financial institutions, bankers and business associates, Government authorities, customers and vendors for their co-operation and support and looks forward to their continued support in future. Your Directors also place on record, their deep sense of appreciation for the commit ed services by the employees of the Company.

On behalf of the Board of Directors

Naresh Malhotra Ramakrishnan Sankaranarayanan

Whole-Time Director Managing Director

DIN:00004597 DIN:02696897

Date: September 16, 2015

Place: Mumbai


Jun 30, 2014

Dear Members,

The directors are pleased to present the Annual Report of the Company along with the Audited Accounts for the period ended June 30, 2014:

1. FINANCIAL PERFORMANCE:

The Consolidated and Standalone Audited Financial Results for the period ended June 30, 2014 are as follows:

(RsIn lacs) Consolidated 2013-14 2012-13 (15 month) (12 month) Income from operations 103,272 76,216

Other operating income 146 -

Other income 4,601 1,741

Total income 108,019 77,957

Less: Expenses 83,596 58,687

Profit before interest, depreciation and tax 24,423 19,270

Less: Finance costs 6,867 4,183

Profit after interest,before depreciation and tax 17,556 15,087

Less: Depreciation and amortisation expense 13,320 9,988

Profit before exceptional items and tax 4,236 5,099

Less: Exceptional items 1,740 10,765

Profit/(Loss) before tax 2,496 (5,666) Less: Provision for tax

Current tax 5,205 (653)

Excess provision of taxes in respect of earlier - (588) years

MAT credit entitlement (177) (18)

Deferred tax (4,319) (2,722)

Profit after tax 1,787 (1,685)

Less: Minority interest (639) 346

Profit after tax (after adjustment of minority 2,426 (2,031) interest) Add: balance brought forward from previous year 25,724 28,385

Less: Minority share 1,943 630

Less: Adjustment of depreciation on fixed assets 22 -

Profit available for appropriation 26,185 25,724

Less: Transfer to debenture redemption reserve 6,365 -

Balance carried to balance sheet 19,820 25,724



Paticular standalone 2013-14 2012-13 (15 month) (12 month) Income from operations 27,355 18,288

Other operating income 146 -

Other income 3,723 1,945

Total income 31,224 20,233

Less: Expenses 18,250 12,816

Profit before interest, depreciation and tax 12,974 7,417

Less: Finance costs 2,811 2,299

Profit after interest, before depreciation and tax 10,163 5,118

Less: Depreciation and amortisation expense 4,399 3,481

Profit before exceptional items and tax 5,764 1,637

Less: Exceptional items (172) 10,766

Profit / (Loss) before tax Less: Provision for tax 5,936 (9,129)

Current tax 4,442 -

Excess provision of taxes in respect of earlier years - (244)

MAT credit entitlement (18) -

Deferred tax (4,870) (2,961)

Profit after tax - (5,924)

Less: Minority interest - -

Profit after tax (after adjustment of 6,382 (5,924) minority interest)

Add: balance brought forward from previous year 8,485 14,409

Less: Minority share - -

Less: Adjustment of depreciation on fi xed assets - -

Profit available for appropriation 14,867 8,485

Less: Transfer to debenture redemption reserve 5,866 -

Balance carried to balance sheet 9,001 8,485

2. OPERATION AND PERFORMANCE REVIEW:

During the period under review, on consolidated basis, total income of the Company and its subsidiaries stood to be Rs. 108,019 lacs as compared to Rs. 77,957 lacs in the previous year.

On standalone basis, total income during the period was Rs. 31,224 lacs as compared to Rs. 20,233 lacs in the previous year. Profit before interest, depreciation and tax during the period was Rs. 12,974 lacs as compared to Rs. 7,417 lacs in the previous year. The Net Profit /(loss) af er tax was Rs. 6,382 lacs as compared to Rs. (5,924) lacs in the previous year.

During the period, the Company has made a provision for doubtful loans/advances and diminution in investment value of Rs. 13,532 lacs and Rs. 5,146 lacs respectively, for its loans and investments in Prime Focus London Plc, a subsidiary, which continued to suff er business headwinds due to continuing recessionary conditions and despite revival/value maximization eff orts by the Management for past several years.

Pursuant to the approval of the Board of Directors and the Shareholders, Company executed a business transfer agreement to sell, transfer and/or otherwise dispose of its "Backend business" on a going concern basis by way of slump sale to Prime Focus World Creative Services Private Limited, a Company incorporated in India and a direct subsidiary of Prime Focus World N.V., a company incorporated and operating under the laws of Netherland for a total consideration of Rs. 22,970 lacs, eff ective June 30, 2014.

3. DIVIDEND:

In order to preserve funds for future activities, the Board of Directors of your Company do not recommend any Dividend for the period ended June 30, 2014.

4. APPROPRIATIONS:

An amount of Rs. 5,866 lacs is transferred to Debenture Redemption Reserve during the year.

5. SHARE CAPITAL:

The issued, subscribed and paid-up equity share capital of the Company as on June 30, 2014 stood at Rs. 1,854 lacs comprising of 185,417,436 equity shares of Re. 1/- each

Subsequently, pursuant to the approval of the shareholders in the Extra-ordinary General Meeting held on August 01, 2014, the Company has increased its authorized share capital from Rs. 2,500 lacs divided into 250,000,000 equity shares of Re.1/- each to Rs. 3,500 lacs dividend into 350,000,000 equity shares of Re. 1/- each.

6. SUBSIDIARIES:

During the period, the Company sold its entire shareholding held in M/s. Prime Focus World Creative Services Private Limited to M/s. Prime Focus World N.V., a company incorporated under the laws of Netherland.

Pursuant to the provisions of amended Clause 49 of the Listing Agreement, the Board of Directors has approved the ''material subsidiary policy''. The said policy is available for review at the below mentioned link:

Link: ht p://primefocusltd.com/sites/default/modules/fi lemanager/ fi les/corporate_governance/Policy_on_Material_Subsidiaries.pdf

In terms of the general exemption granted by the Central Government vide their General Circular No. 2/2011 dated February 8, 2011 under Section 212(8) of the erstwhile Companies Act, 1956, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being at ached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any Member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Offi ce of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the fi nancial results of its subsidiary companies.

A statement pursuant to Section 212 of the erstwhile Companies Act,1956, is set out as an annexure to this Report.

In compliance with Clause 32 of the Listing Agreement, audited consolidated fi nancial statements of the Company and its subsidiaries also form part of this Annual Report.

The Consolidated Financial Statements have been prepared in accordance with the relevant accounting standards as prescribed under Section 211(3C) of the Act.

7. DIRECTORS:

During the period under review, Mr. Naresh Malhotra relinquished his position as a Chairman of the Company vide his let er dated June 25, 2014. He shall continue to act as the Whole-time Director of the Company.

In view of the resignation of Mr. Naresh Malhotra as Chairman, Mr. Namit Malhotra was appointed as the Chairman, CEO and Executive Director of the Company with eff ect from June 25, 2014 for a period of 3 years at a remuneration upto Rs. 50 lacs p.a. Mr. Ramakrishnan Sankaranarayanan was appointed as the Managing Director of the Company with eff ect from June 25, 2014 for a period of 3 years at a remuneration upto Rs. 50 lacs p.a. Both these appointments were approved by the shareholders in the Extra-ordinary General Meeting held on August 01, 2014.

Pursuant to Section 152 of the Companies Act, 2013 and under the applicable provisions of the Articles of Association of the Company, Mr. Naresh Malhotra, Whole-time Director, retires by rotation at the ensuing 17th Annual General Meeting and being eligible, off ers himself for re-appointment. The Board has proposed the re-appointment of Mr. Naresh Malhotra as Director of the Company, liable to retire by rotation at the ensuing 17th Annual General Meeting.

The Board of Directors of the Company (the ''Board''), at its meeting held on November 14, 2014 has, subject to the approval of shareholders, re-

appointed Mr. Naresh Malhotra as Whole-time Director, for a period of 5 (fi ve) years from the expiry of his present term, which shall expire on March 31, 2015, at the remuneration recommended by the Nomination and Remuneration Commit ee and approved by the Board.

Pursuant to Sections 149, 150 and 152 of the Act, read with Companies (Appointment and Qualifi cation of Directors) Rules, 2014 alongwith Schedule IV of the Act (including any statutory modifi cation(s) or re-enactment thereof for the time being in force), the Independent Directors can hold offi ce for a term of fi ve consecutive years on the Board of Directors of your Company. Accordingly, it is proposed to appoint the following Directors as Non-executive Independent Directors not liable to retire by rotation for fi ve (5) consecutive years with eff ect from the conclusion of the 17th Annual General Meeting upto the conclusion of the 22nd Annual General Meeting, subject to approval of shareholders at the ensuing 17th Annual General Meeting.

a) Mr. Kodi Raghavan Srinivasan

b) Mr. Padmanabha Gopal Aiyar

c) Mr. Rivkaran Chadha

The Company has received requisite notice under Section 160 of the Companies Act, 2013 in writing from a member proposing the appointment of the aforesaid Directors.

All the above mentioned Independent Directors have given the declaration of independence as per Section 149 (6) of the Act.

The Company shall be issuing the let er of appointment to the Independent Directors pursuant to their appointment in the ensuing 17th Annual General Meeting of the Company and the terms and conditions of appointment shall be disclosed on the website of the Company as required under Clause 49(II)(B)(4) of the Listing Agreement.

8. MERGER OF DOUBLE NEGATIVE HOLDINGS LIMITED (DOUBLE NEGATIVE) WITH PFW''s VFX BUSINESS:

Eff ective July 01, 2014, Prime Focus World N.V. (''PFWNV'') forming part of the group, closed the transaction relating to the merger of Double Negative, one of the largest Visual Eff ects services providers to the global fi lm industry pursuant to a share sale agreement dated June 25, 2014. This agreement has created the world''s largest independent VFX, stereo conversion and animation company serving the Hollywood fi lm industry and Double Negative has now become a wholly owned subsidiary of PFWNV.

9. EXECUTION OF BINDING TERM SHEET WITH RESPECT TO INVESTMENT BY OPEN OFFER OF COMPANY''S SHARES:

The Company in view of its growing business requirements as a global leader in the media and entertainment industry and the need to compete with its peer group in the domestic and international market,

has strengthened its position and networth by augmenting its long term resources. As a step towards this objective, Company proposes to combine its global fi lm and media services business with that of Reliance MediaWorks Limited ("RML") by acquiring its fi lm and media services business ("F&M business") to be transferred to and acquired by the Company by way of slump sale on a going concern basis, for a net consideration of Rs. 350 crores, which includes the fi xed assets, current assets and current liabilities of the business on such terms and conditions as are agreed between the Company and RML.

In light of the above, it is proposed to issue upto 67,307,692 equity shares at the price of Rs. 52/- per share on a preferential allotment basis in terms of the Guidelines for Preferential Issues contained in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("ICDR Regulations") as consideration for the proposed business transfer. The Company has entered into binding term sheet on July 02, 2014 with the Promoters of the Company and RML set ing out the rights and obligations of the parties involved vis-a-vis the preferential off er. Upon execution of the term sheet RML along with persons acting in concert have made an open off er to the shareholders of the Company.

Further, pursuant to the Company''s proposal to acquire the Film and Media business of Reliance MediaWorks Limited, it was necessary to obtain the necessary permission of the Hon''ble Competition Commission of India (CCI) and Company has appointed solicitors and advocates to represent and fi le the necessary application before the Hon''ble Competition Commission of India on behalf of the Company.

The aforesaid open off er is subject to the procurement of the approval of CCI and consent from Securities and Exchange Board of India and the Company shall take necessary steps to complete the preferential off er and the open off er process on the approvals being granted.

10. PREFERENTIAL OFFER:

Further to the above, the Board of Directors in its meeting held on July 02, 2014 approved issuance of upto 23,076,923 equity shares each on a preferential basis subject to requisite statutory approvals to Monsoon Studio Private Limited (Promoter Group Company) and also to Reliance MediaWorks Limited at the price of Rs. 52/- per share and the said issue was approved by the shareholders at the Extra- ordinary General Meeting held on August 01, 2014. The issuance shall be eff ected upon receipt of all necessary statutory approvals.

11. EMPLOYEE STOCK OPTION SCHEME (ESOP):

In the Board of Directors'' meeting held on July 02, 2014, approval was granted to introduce and implement Employee Stock Option Scheme titled ''PFL-ESOP Scheme 2014'' whereby stock options upto 6% of the paid up capital of the Company (post aforesaid preferential allotment) aggregating 17,932,738 stock options would be issued to eligible

employees of the Company, its subsidiaries and associates. The said scheme was approved by the shareholders in the Extra-ordinary General Meeting held on August 01, 2014.

12. CORPORATE GOVERNANCE REPORT:

The Company is commit ed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certifi cate from the Auditors of the Company confi rming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is at ached to the Report on corporate governance.

13. WHISTLE BLOWER MECHANISM:

The employees of the Company are eligible to make Protected Disclosures under the Whistle Blower Policy in relation to mat ers relating to alleged wrongful conduct.

All Protected Disclosures should be addressed to the Vigilance and Ethics Offi cer appointed for the purpose viz. Mrs. Nivedita Nanda, Sr Vice President HR & Administration and reported in writing by the whistle blowers as soon as possible af er the whistle blower becomes aware of the same so as to ensure a clear understanding of the issues raised.

In order to protect identity of the whistle blower, the Vigilance and Ethics Offi cer will take necessary steps and shall assure that in case any further clarifi cation is required he will get in touch with the Whistle Blower. Any Anonymous / Pseudonymous disclosure shall not be entertained by the Vigilance and Ethics Offi cer.

Any Protected Disclosure against the Vigilance and Ethics Offi cer should be addressed to the Chairman of the Company and the Protected Disclosure against the Chairman/ CEO of the Company should be addressed to the Chairman of the Audit Commit ee.

The Receiving authority shall also carry out initial investigation either himself or by involving any other Offi cer of the Company or an outside agency before referring the mat er to the Audit Commit ee of the Company for further appropriate investigation and needful action.

14. PUBLIC DEPOSITS:

During the year under review, the Company did not accept any Deposits within the meaning of the provisions of Section 58A of the erstwhile Companies Act, 1956.

15. PARTICULARS OF EMPLOYEES:

In terms of provisions of Section 217(2A) of the erstwhile Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure forming part of the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts being sent to all the shareholders of the Company excluding the Statement of particulars of employees u/s 217(2A) of the said Act. Any Shareholder interested in obtaining copy of this statement may write to Company Secretary, at the Registered Offi ce of the Company.

16. DIRECTORS'' RESPONSIBILITY STATEMENT U/S 217 (2AA) OF THE COMPANIES ACT, 1956:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confi rm to their best knowledge and belief that:

i. In the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. They have 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 aff airs of the Company as at June 30, 2014 and of the Profit and loss account of the Company for the year ended on that date;

iii. They have taken proper and suffi cient care 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 fraud and other irregularities;

iv. They have prepared the annual accounts on a going concern basis.

17. MANAGEMENT DISCUSSION AND ANALYSIS:

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

18. AUDITORS AND AUDITORS'' REPORT:

M/s. Deloit e Haskins & Sells, Chartered Accountants (Registration no. 117364W), who are the Statutory Auditors of the Company, hold offi ce until the conclusion of the ensuing Annual General Meeting of

the Company. It is proposed to re-appoint them to examine and audit the accounts of the Company for fi ve years to hold offi ce from the conclusion of this 17th Annual General Meeting till the conclusion of the 22nd Annual General Meeting of the Company subject to ratification of their appointment at every Annual General Meeting subsequent to the appointment.

The Company has received let er from them to the eff ect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualifi ed for re-appointment.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

i. Conservation of Energy and Technology absorption:

In terms of section 217(1)(e) of the erstwhile Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988, the Directors furnish herein below the required additional information:

Conservation of Energy:

Although the Company is not engaged in manufacturing activities, the Company makes every eff ort to conserve energy as far as possible in its post production facilities, Studios, Offi ces, etc. The Company also takes significant measures to reduce energy consumption by using energy effi cient computers and by purchasing energy-effi cient equipment. The Company purchases PCs, laptops, air conditioners etc that meet environment standards, wherever possible and replace old equipment with more energy-effi cient equipment.

Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

The Company constantly evaluates new developments and invests into latest energy effi cient technology.

Impact of the measures and consequent impact on the cost of production of goods:

As energy costs comprise a very small part of our total expenses, the fi nancial impact of these measures is not material.

Total energy consumption:

As the Company does not form part of the list of industries specifi ed in the schedule, the same is not applicable to the Company.

Research and Development (R&D) and Technology Absorption:

Your company is predominantly a service provider and therefore has not set up a formal R&D unit, however continuous research and development is carried out at various development centers as an integral part of the activities of the Company. The Company adopts the latest trends in the technology development and introduces the same so as to ensure reduction in cost with best quality output.

ii. Foreign Exchange Earnings and Outgo:

Rs In lacs June 30, 2014 March 31, 2013 (15 months) (12 months)

Foreign Exchange Earned: 19,804 12,001 Revenue from operations and interest income

Foreign Exchange Outgo: 183 482 Technical service cost, repairs and maintenance, interest and others

20. ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation for the encouragement and co-operation by its stakeholders, including fi nancial institutions, bankers and business associates, Government authorities, customers and vendors during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commit ed services by the executives and staff of the Company.

For and on behalf of the Board of Directors Sd/- Naresh Malhotra Whole-time Director & Chairman of the Meeting Place: Mumbai Date: November 14, 2014


Mar 31, 2013

Dear Members,

The directors are pleased to present the Annual Report of the Company along with the Audited Accounts for the year ended March 31, 2013:

1. Financial PerFormance:

The Consolidated and Standalone Audited Financial Results for the year ended March 31, 2013 are as follows:

(Rs.in lacs) Particulars consolidated Standalone 2012-13 2011-12 2012-13 2011-12

Income from operations 76,216.25 77,191.33 18,288.23 17,102.72

Other income 1,741.19 2,015.37 1,945.06 2,478.38

Total income 77,957.44 79,206.70 20,233.29 19,581.10

Less: expenditure 58,687.24 55,336.48 12,816.60 11,433.57

Proft before interest, depreciation and tax 19,270.20 23,870.22 7,416.69 8,147.53

Less: Interest 4,182.51 3,476.09 2,299.51 1,794.83

Proft afer interest, before depreciation and tax 15,087.69 20,394.13 5,117.18 6,352.70

Less: Depreciation 9,988.57 7,114.11 3,480.43 2,974.10

Proft before exceptional items and tax 5,099.12 13,280.02 1,636.75 3,378.60

Less: exceptional items 10,765.65 10,765.65

(loss )/proft before tax (5,666.53) 13,280.02 (9,128.90) 3,378.60

less: Provision for tax

Current tax (1,241.49) 2,557.79 512.38

excess provision of taxes in respect of previous years (243.75)

MAT credit entiltlement (18.08) (271.54)

Defered tax (2,722.22) 713.72 (2,960.86) 559.07

Proft afer tax (1,684.74) 10,280.05 (5,924.29) 2,307.15

Less: Minority interest 346.36 354.7

Proft afer tax (afer adjustment of minority interest) (2,031.10) 9,925.35 (5,924.29) 2,307.15

Add: balance brought forward from previous year 28,385.91 18,460.56 14,409.43 12,102.28

Less: Minority share 630.28

Proft available for appropriation 25,724.53 28,385.91 8,485.14 14,409.43

Less: Transfer to general reserve

Balance carried to balance sheet 25,724.53 28,385.91 8,485.14 14,409.43

2. oPeraTion and PerFormance review:

During the year under review, on consolidated basis, total income of the Company and its subsidiary stood to be Rs. 77,957.44 lacs as compared to Rs. 79,206.70 lacs in the previous year.

On standalone basis, total income during the year was Rs. 20,233.29 lacs as compared to Rs. 19,581.10 lacs in the previous year, registering a growth of 6.93%. Proft before interest, depreciation and tax during the year was Rs. 7,416.69 lacs as compared to Rs. 8,147.53 lacs in the previous year. The Net (loss)/proft afer tax was Rs. (5,924.29) lacs as compared to Rs. 2,307.15 lacs in the previous year, the decline in proft was primarily due to foreign exchange fuctuation on account of repayment of Foreign Currency Convertible Bonds (FCCB) during the fnancial year.

3. dividend:

In order to preserve funds f or future activities, the Board of Directors of your Company do not recommend any Dividend for the year ended March 31, 2013.

4. aPProPriaTionS:

No appropriations are proposed to be made for the year under consideration.

5. Share caPiTal:

During the fnancial year, the Authorized Share Capital of the Company was increased from Rs. 20,00,00,000 (Rupees Twenty Crores) comprising of 20,00,00,000 (Twenty Cores) equity Shares of Rs. 1 each to Rs. 25,00,00,000 (Rupees Twenty Five Crores) comprising of 25,00,00,000 (Twenty Five Cores) equity Shares of Rs. 1 each, with the approval of the shareholders in the Annual General Meeting held on September 29, 2012.

On April 13, 2012, the Company had alloted 1,00,00,000 equity shares of Rs. 1 each against conversion of warrants held by Mr. Namit Malhotra, Promoter of the Company at a premium of Rs. 54.478 per share (each warrant convertible into one equity share of face value of Rs. 1 each). Consequent to the aforesaid allotment, the paid up capital of the Company increased from 138,867,446 equity shares of Rs. 1 each to 148,867,446 equity shares of Rs. 1 each.

On November 5, 2012, the Company had also alloted 3,65,49,990 equity shares of Rs. 1 each to Standard Chartered Private equity (Mauritius) III Limited, on preferential basis at a premium of Rs. 50.75 per share. Consequent to the aforesaid allotment, the paid up capital of the Company has increased from 148,867,446 equity shares of Rs. 1 each to 185,417,436 equity shares of Rs.1 each.

6. non converTiBle deBenTUreS

On November 5, 2012, the Company had issued the following Zero Coupon Unsecured Redeemable Non Convertible Debentures to Standard Chartered Private equity (Mauritius) Limited:

- Series A-1010 Zero Coupon Unsecured Redeemable Non Convertible Debentures of face value of Rs. 10,00,000 each aggregating to Rs. 101 Crores repayable at the end of fve years from the date of allotment

- Series B-891 Zero Coupon Unsecured Redeemable Non Convertible Debentures of face value of Rs. 10,00,000 each aggregating to Rs. 89.1 Crores repayable at the end of six years from the date of allotment

The said NCD''s issued under Series A and Series B are listed on Wholesale Debt Market Segment of the Bombay Stock exchange Limited (BSe).

7. SUBSidiarieS:

In terms of the general exemption granted by the Central Government vide their General Circular No. 2/2011 dated February 8, 2011 under Section 212(8) of the Companies Act, 1956, the Balance Sheet, Proft and Loss Account and other documents of the subsidiary companies are not being atached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Ofce of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the fnancial results of its subsidiary companies.

A statement pursuant to Section 212 of the Companies Act, 1956, is set out as an annexure to this Report.

In compliance with Clause 32 of the Listing Agreement, audited consolidated fnancial statements of the Company and its subsidiaries also form part of this Annual Report.

The Consolidated Financial Statements have been prepared in accordance with the relevant accounting standards as prescribed under Section 211(3C) of the Act.

8. direcTorS:

In accordance with the requirements of the Companies Act, 1956, Mr. Naresh Malhotra, Chairman & Whole Time Director and Mr. G.P Aiyar, Independent and Non executive Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible ofer themselves for re-appointment.

Mr. Nainesh Jaisingh, was appointed as an Additional Director w.e.f November 5, 2012 on the board of the Company pursuant to the provisions of Section 260 of the Companies Act, 1956 and he was subsequently appointed as Director with the approval of members of the Company in the extra Ordinary General Meeting held on December 20, 2012 pursuant to section 257 and other applicable provisions, if any of the Companies Act 1956. Mr. Vibhav Parikh was appointed as an Alternate Director to Mr. Nainesh Jaisingh w.e.f November 5, 2012.

Mr. Ramakrishnan Sankaranarayanan, Managing Director resigned from the Board of Directors of the Company with efect from November 5, 2012. Mr. Rakesh Jhunjhunwala, Non executive Director of the Company also resigned w.e.f July 26, 2013. The Board wishes to place on record its appreciation for the valuable contributions made by Mr. Ramakrishnan Sankaranarayanan and Mr. Rakesh Jhunjhunwala in development and growth of the Company and also for their valuable advices and guidance received during their tenure as Directors of the Company.

As stipulated in terms of Clause 49 of the listing agreement with the stock exchange, the brief resumes of Mr. Naresh Malhotra, Chairman & Whole Time Director and Mr. G.P Aiyar, Independent and Non executive Director are provided in the Notice convening 16th Annual General Meeting of the Company.

9. corPoraTe Governance rePorT:

Your Company has complied with all the mandatory provisions of the revised Clause 49 of the Listing Agreement. As part of the Company''s eforts towards beter corporate practice and transparency, a separate report on Corporate Governance compliances along with certifcate from practicing Company Secretary is annexed as a part of the Annual Report.

10. ForeiGn cUrrency converTiBle BondS (FccBs):

The Company had issued Foreign Currency Convertible Bonds (FCCBs) aggregating $ 55 million in the year 2007 which were listed on Singapore Stock exchange (SGX). Further the Company had redeemed the entire outstanding FCCBs of $ 79 million including redemption premium of $ 24 Million on scheduled legal maturity date on December 13, 2012 through Bank of New York, Trustee of Bond Holders.

Upon redemption of the FCCBs, the Company delisted the Bonds from the Singapore Stock exchange (SGX) on December 18, 2012.

11. PUBlic dePoSiTS:

During the year under review, the Company did not accept any Deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956.

12. ParTicUlarS oF emPloyeeS:

In terms of provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure forming part of the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the said

Act, the Report and Accounts being sent to all the shareholders of the Company excluding the Statement of particulars of employees u/s. 217(2A) of the said Act. Any Shareholder interested in obtaining copy of this statement may write to Company Secretary, at the Registered Ofce of the Company.

13. direcTorS'' reSPonSiBiliTy STaTemenT U/S 217 (2aa) oF The comPanieS acT, 1956:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confrm to their best knowledge and belief that:

i) In the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii) They have 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 afairs of the Company as at March 31, 2013 and of the proft and loss account of the Company for the year ended on that date;

iii) They have taken proper and sufcient care 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 fraud and other irregularities;

iv) They have prepared the annual accounts on a going concern basis.

14. manaGemenT diScUSSion and analySiS:

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock exchanges in India, is presented in a separate section forming part of the Annual Report.

15. aUdiTorS and aUdiTorS'' rePorT:

M/s MZSK & Associates, Chartered Accountants, Statutory Auditors of the Company will hold ofce until the ensuing Annual General Meeting and are eligible for re-appointment. M/s MZSK & Associates, Chartered Accountants, has indicated that they do not wish to seek re-appointment. The Board has recommended M/s Deloite Haskins & Sells, Chartered Accountants to be appointed as Statutory Auditors of the Company. The Members are requested to consider their appointment as Statutory Auditors and authorize the Board of Directors to fx their remuneration.

M/s Deloite Haskins & Sells, Chartered Accountants have furnished a certifcate of eligibility to the efect that their proposed appointment, if made will be in accordance with the limit prescribed under Section 224 (1B)of the Companies, Act, 1956 and they are not disqualifed for such appointment, within the meaning of sub- sections (3) and (4) of Section 226 of the Companies Act, 1956.

With respect to Auditors observations in their report dated May 30, 2013, under item No. ix(a) about minor delays in depositing income tax deductions at source (TDS) were due to delay in receipt of expected cash infows in time. However, the delay was not for the period exceeding three months.

16. conServaTion oF enerGy, TechnoloGy aBSorPTion and ForeiGn exchanGe earninGS and oUTGo:

i. conservation of energy and Technology absorption:

In terms of section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Directors furnish herein below the required additional information:

conservation of energy:

Although the Company is not engaged in manufacturing activities, the Company makes every efort to conserve energy as far as possible in its post production facilities, Studios, Ofces, etc. The company also makes signifcant measures to reduce energy consumption by using energy efcient computers and by purchasing energy-efcient equipment. We purchase PCs, laptops, air conditioners etc that meet environment standards, wherever possible and replace old equipment with more energy-efcient equipment.

Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

We constantly evaluate new developments and invest into latest energy efcient technology.

Impact of the measures and consequent impact on the cost of production of goods:

As energy costs comprise a very small part of our total expenses, the fnancial impact of these measures is not material.

Total energy consumption:

As the company does not form part of the list of industries specifed in the schedule, the same is not applicable to the Company. research and development (r & d) and Technology absorption:

Your company is predominantly a service provider and therefore has not set up a formal R & D unit, however continuous research and development is carried out at various development centers as an integral part of the activities of the Company. The Company adopts the latest trends in the technology development and introduces the same so as to ensure reduction in cost with best quality output.

17. acknowledGemenTS:

Your Directors would like to express their sincere appreciation for the encouragement and co-operation by its stakeholders, including fnancial institutions, bankers and business associates, Government authorities, customers and vendors during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commited services by the executives and staf of the Company.

For and on behalf of the Board of directors

Sd/-

naresh malhotra

Chairman and Whole-time Director

Mumbai

August 14, 2013


Mar 31, 2012

Dear Members,

The directors are pleased to present the Annual Report of the Company along with the Audited Accounts for the year ended March 31,2012:

1. FINANCIAL PERFORMANCE:

The Consolidated and Standalone Audited Financial Results for the year ended March 31, 2012 are as follows:

(Rs.in Lacs)

Particulars Consolidated Standalone 2011-12 2010-11 2011-12 2010-11

Income from Operations 77,191.33 50,295.83 17,102.72 13,550.58

Other Income 2,015.37 1,497.74 2,478.38 481.63

Total Income 79,206.70 51,793.57 19,581.10 14,032.21

Less: Expenditure 55,336.48 34,287.92 11,433.57 8,047.81

Profit Before Interest, Depreciation and Tax 23,870.22 17,505.65 8,147.53 5,984.40

Less: Interest 3,476.09 2,630.47 1,794.83 1,386.15

Profit After Interest, Before Depreciation and Tax 20,394.13 14,875.18 6,352.70 4,598.25

Less: Depreciation 7,114.11 5,455.74 2,974.10 2,395.10

Profit Before Tax (PBT) 13,280.02 9,419.44 3,378.60 2,203.15

Less: Provision For Tax

Current Tax 2,286.25 - 512.38 -

Deferred Tax 713.72 600.63 559.07 227.8

Profit After Tax 10,280.05 8,818.81 2,307.15 1,975.35

Less: Minority Interest 354.7 1,210.17 - -

Profit After Tax (after adjustment of minority interest) 9,925.35 7,608.64 2,307.15 1,975.35

Add: Balance Brought Forward from previous year 18,460.56 10,851.92 12,102.27 10,126.92

Profit available for appropriation 28,385.91 18,460.56 14,409.42 12,102.27

Less: Transfer To General Reserve - - - -

Balance Carried To Balance Sheet 28,385.91 18,460.56 14,409.42 12,102.27

2. OPERATION AND PERFORMANCE REVIEW:

Duringthe year under review, your Company has posted excellent financial performance as compared to the previous year. On consolidated basis, total income of the Company and its subsidiary stood to beRs. 79,206.70 Lacs as compared toRs. 51,793.57 Lacs in the previous year, registering a growth of 52.93%.

On standalone basis, total income duringthe year wasRs. 19,581.10 Lacs as compared toRs. 14,032.21 Lacs in the previous year, registering a growth of 39.54%. Profit Before Interest, Depreciation and Tax during the year was Rs. 8,147.53 Lacs which is higher by 36.15% over previous year. The Net Profit after Tax was Rs. 2,307.15 Lacs as compared to Rs. 1,975.35 Lacs in the previous year, registering a growth of 16.80%.

3. DIVIDEND:

In order to preserve funds for future activities, the Board of Directors of your Company do not recommend any Dividend for the year ended March 31, 2012.

4. APPROPRIATIONS:

No appropriations are proposed to be made for the year under consideration.

5. SHARE CAPITAL:

On April 13,2012the Board approvedthe allotment of 1,00,00,000 equity shares against conversion of warrants held by Mr. Namit Malhotra, Promoter of the Company at a premium of Rs. 54.478 per share (each warrant convertible into one equity share of face value of Rs.1 each).

Consequent to the aforesaid allotment, the paid up capital of the Company has increased from 138,867,446 equity shares of Rs. 1 each to 148,867,446 equity shares of bleach.

6. SUBSIDIARIES:

In terms of the general exemption granted by the Central Government vide their General Circular No. 2/2011 dated February 8,2011 under Section 212(8) of the Companies Act, 1956, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

A statement pursuant to Section 212 of the Companies Act, 1956, is set out as an annexure to this Report.

In compliance with Clause 32 of the Listing Agreement, audited consolidated financial statements of the Company and its subsidiaries also form part of this Annual Report.

The Consolidated Financial Statements have been prepared in accordance with the relevant accounting standards as prescribed under Section 211 (3C) of the Act.

7. DIRECTORS:

In accordance with the requirements of the Companies Act, 1956, Mr. Rakesh Jhunjhunwala, Non Executive Director and Mr. Rivkaran Chadha, Independent and Non Executive Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment..

Mr. Ramakrishnan Sankaranarayanan was appointed as Additional Director by the Board of Directors of the Company w.e.f.11thOctober,2011. Pursuant to the provisions of Section 260 of the Companies Act,1956, he holds office as Director up to the date of ensuing Annual General Meeting. Subject to the approval of shareholders, your Board recommends his appointment as a Director and requests shareholders approval on terms of his appointment as Managing Director of the Company.

As stipulated in terms of Clause 49 of the listing agreement with the stock exchanges, the brief resumes of Mr. Rakesh Jhunjhunwala, Non Executive Director, Mr. Rivkaran Chadha, Independent and Non Executive Director and Mr. Ramakrishnan Sankaranarayanan, Managing Director are provided in the Notice convening15th Annual General Meeting of the Company.

Mr. ChandirGidwani resigned from the Board of Directors of the Company with effect from August 12, 2011. Mr. Namit Malhotra, Managing Director also resigned with effect from October 11, 2011. The Board wishes to place on record its appreciation for the valuable contributions made by Mr. Chandir Gidwani and Mr. Namit Malhotra in development and growth of the Company and also for their valuable advices and guidance received during their tenure as Directors of the Company.

8. CORPORATE GOVERNANCE REPORT:

Your Company has complied with all the mandatory provisions of the revised Clause 49 of the Listing Agreement. As part of the Company's efforts towards better corporate practice and transparency, a separate report on Corporate Governance compliances along with certificate from practicing Company Secretary is annexed as a part of the Annual Report.

9. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs):

The Company had issued FCCB of $ 55 Million on December 12, 2007 and during the year under review, no bonds have been converted into equity shares of the Company.

10. PUBLIC DEPOSITS:

During the year under review, the Company did not accept any Deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956.

11. PARTICULARS OF EMPLOYEES:

In terms of provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure forming part of the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts being sent to all the shareholders of the Company excluding the Statement of particulars of employees u/s. 217(2A) of the said Act. Any Shareholder interested in obtaining copy of this statement may write to Company Secretary, at the Registered Office of the Company.

12. DIRECTORS' RESPONSIBILITY STATEMENT U/S 217 (2AA) OF THE COMPANIES ACT, 1956:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm to their best knowledge and belief that:

- In the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

- They have 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, 2012 and of the profit and loss account of the Company for the year ended on that date;

- They have taken proper and sufficient care 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 fraud and other irregularities;

- They have prepared the annual accounts on a going concern basis.

13. MANAGEMENT DISCUSSION AND ANALYSIS:

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

14. AUDITORS AND AUDITORS'REPORT:

M/s MZS & Associates, Chartered Accountants, Statutory Auditors of the Company will hold office until the ensuing Annual General Meeting and are eligible for re-appointment. M/s MZS & Associates, Chartered Accountants, has indicated that they do not wish to seek re-appointment. The Board has recommended M/s MZSK& Associates, Chartered Accountants to be appointed as Statutory Auditors of the Company. The Members are requested to consider their appointment as Statutory Auditors and authorize the Board of Directors to fix their remuneration.

M/s MZSK & Associates, Chartered Accountants have furnished a certificate of eligibility to the effect that their proposed appointment, if made will be in accordance with the limit prescribed under Section 224 (1B)of the Companies, Act, 1956 and they are not disqualified for such appointment, within the meaning of sub-sections (3) and (4) of Section 226 of the Companies Act, 1956.

As regards the emphasis and qualifications made by the Auditors as stated in paragraph number 4 of their report on the accounts of Prime Focus Limited and paragraph 5 of their report on the Consolidated Financial Statements of the Company, attention is invited to note no. 5 (a) of Significant Accounting Policies and notes forming part of the Accounts of the Company and Note no. 5 (a) of the Consolidated Financial Statements of the Company, wherein the detail explanation has been provided, which in the opinion of the Board of Directors are self explanatory.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

i. Conservation of Energy and Technology Absorption:

In terms of section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, the Directors furnish herein below the required additional information:

Conservation of Energy:

Although the Company is not engaged in manufacturing activities, the Company makes every effort to conserve energy as far as possible in its post production facilities, Studios, Offices, etc. The company also makes significant measures to reduce energy consumption by using energy efficient computers and by purchasing energy-efficient equipment. We purchase PCs, laptops, air conditioners etc that meet environment standards, wherever possible and replace old equipment with more energy-efficient equipment.

Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

We constantly evaluate new developments and invest into latest energy efficient technology.

Impact of the measures and consequent impact on the cost of production of goods:

As energy costs comprise a very small part of our total expenses, the financial impact of these measures is not material.

Total energy consumption:

As the company does not form part of the list of industries specified in the schedule, the same is not applicable to the Company.

Research and Development (R & D) and Technology Absorption:

Your company is predominantly a service provider and therefore has not set up a formal R&D unit, however continuous research and development is carried out at various development centers as an integral part of the activities of the Company. The Company adopts the latest trends in the technology development and introduces the same so as to ensure reduction in cost with best quality output.

16. ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation for the encouragement and co-operation by its stakeholders, including financial institutions, bankers and business associates, Government authorities, customers and vendors during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives and staff of the Company.

For and on behalf of the Board of Directors

Sd/-

Naresh Malhotra

Mumbai Chairman and Whole-time Director

May 30,2012


Mar 31, 2011

Dear Members,

The directors are pleased to present the Annual Report of the Company along with the audited Accounts for the year J ended March 31, 2011:

1. Financial Performance:

The Standalone and Consolidated Audited Financial Results for the year ended March 31, 2011 are as follows:

(Rs. in lacs)

Consolidated Standalone

Particulars 2010-11 2009-10 2010-11 2009-10

income from operations 50,295.83 45,278.38 13,550.58 9,527.26

other income 1,497.74 878.85 481.63 504.28

Total Income 51,793.57 46,157.23 14,032.21 10,031.54

less : expenditure 34,287.92 34,687.89 8,047.81 4,949.02

Profit Before Interest, Depreciation and Tax 17,505.65 11,469.35 5,984.40 5,082.52

less : interest 2,630.47 2,183.40 1,386.15 1,235.60

Profit After Interest, Before Depreciation and Tax 14,875.18 9,285.95 4,598.25 3,846.92

less : Depreciation 5,455.74 4,258.70 2,395.10 1,934.97

Profit Before Tax (PBT) 9,419.44 5,027.25 2,203.15 1,911.95

less: Provision For Tax

Current Tax - 852.30 - 613.25

Deferred Tax 600.63 235.64 227.80 26.04

Profit After Tax 8,818.81 3,939.31 1,975.35 1,272.66

less: Minority interest 1,210.18 596.93 - -

Profit After Tax (after adjustment of minority interest) 7,608.63 3,342.38 1,975.35 1,272.66

Add: Balance Brought Forward from previous year 10,851.92 7,509.54 10,126.92 8,854.26

Profit available for appropriation 18,460.55 10,851.92 12,102.27 10,126.92

less: Transfer To General Reserve - - - -

Balance Carried To Balance Sheet 18,460.55 10,851.92 12,102.271 10,126.92

2. Operations Review:

Total income of your company for the year under review increased to Rs. 14,032.21 lacs from Rs. 10,031.54 lacs in the previous year and witnessed 39.88% growth. Profit before Tax, Depreciation & interest (PBDiT) amounted to Rs. 5,984.40 lacs which is higher by 17.74 % in comparison to previous year. net Profit after Tax is at Rs. 1,975.35 lacs as against Rs. 1,272.66 lacs in previous year.

on consolidated basis, total income of your company and its subsidiary stands at Rs. 51,793.57 lacs. Total income has increased by 12.21% over previous financial year. Profit before Tax, Depreciation & interest (PBDiT) was Rs. 17,505.65 lacs which is higher by 52.63% in comparison to previous year amount of Rs. 11,469.35 lacs. Profit After Tax (PAT) increased by 123.87% during the year under review and stands at Rs. 8818.81 lacs.

3. Dividend:

in order to preserve funds for future activities, the Board of Directors of your Company do not recommend any Dividend for the year ended March 31, 2011.

4. Appropriations:

no appropriations are proposed to be made for the year under consideration.

5. CAPITAL:

During the year under review, the authorised share capital of the Company was increased from Rs. 15 Crores to Rs. 20 Crores to enable the Company to meet the additional capital requirements.

During the year under review, your Company has allotted 10,641,566 equity Shares of face value of Re. 1/- each to Qualified institutional Buyers under QiP as per Chapter viii of the SeBi Regulations at a price of Rs. 68.58 per equity Share (including a premium ofRs. 67.58 per equity Share), aggregating to Rs. 729,798,596 on november 10, 2010. The amount was raised with object to augment long term working capital requirements of the Company in view of the expected growth in the Company's business, prepay / repay debt, expand and to upgrade existing facilities, strengthen the financial position of our Company, fund other strategic initiatives and/or for other general corporate purposes.

Your Company has allotted 1,000,000 warrants convertible into equity Shares on october 15, 2010 to Mr. namit Malhotra, a member of the Promoters and Promoter Group carrying an option/ entitlement to subscribe to equivalent number of equity Shares on a future date not exceeding 18 months from the date of allotment of such warrants. each warrant shall be convertible into one equity share of nominal value of Rs. 10/- each at a price not less than the minimum price determined in accordance with the provision of Chapter vii of SeBi (iCDR) Regulations.

To augment and improve liquidity of Companys's equity share and enhance shareholder's value, Company's equity share ofRs. 10/- each fully paid up was subdivided into 10 equity shares of Rs. 1 fully paid up. The record date fixed for the purpose of sub division of equity shares of the company was november 1, 2010.

The Company had issued FCCB of USD 55 mn on December 12, 2007 and during the year under review, no bonds have been converted into equity shares of the Company.

6. SUBSIDIARIES:

we have six direct subsidiary companies including two foreign subsidiary companies.

in accordance with the general circular no. 2/2011 dated February 08, 2011 issued by the Ministry of Corporate Affairs, the annual accounts of these subsidiary companies are not being attached with the balance sheet of the Company. The Company will make available the annual accounts of the subsidiary companies and related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the registered office of the Company and that of the respective subsidiary companies. The consolidated financial statements presented by the Company include the financial results of its subsidiary companies.

7. DIRECTORS:

in accordance with the requirements of the Companies Act, 1956, Mr.Kodi Raghvan Srinivasan and Mr. Padmanabha Gopal Aiyar, independent and non executive Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. As stipulated in terms of Clause 49 of the listing agreement with the stock exchanges, the brief resume of Mr.Kodi Raghvan Srinivasan and Mr. Padmanabha Gopal Aiyar, will be provided in the notice convening 14th Annual General Meeting of the Company.

Mr.Hari Padmanabhan resigned from the Board of Directors the Company with effect from February 14, 2011. The Board wishes to place on record its appreciation for his valuable contribution during his tenure as member of the Board.

8. CORPORATE GOVERNANCE REPORT AND GENERAL SHAREHOLDER INFORMATION:

As required by Clause 49 (vi) of the listing agreement entered into by the Company with the stock exchanges, a detailed report on Corporate Governance is provided as Annexure which forms part of the Directors' Report. The General Shareholders information has been provided as Annexure which also forms part of the Directors' Report. The Company is in compliance with the requirement and disclosures that have to be made in this regard. The Practicing Company Secretary's' Certificate on compliance with corporate governance requirements by the Company is attached to the Corporate Governance Report and forms part of the Directors Report.

9. PUBLIC DEPOSITS:

During the year under review, the Company did not accept any Deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956.

10. PARTICULARS OF EMPLOYEES:

in terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

11. DIRECTORS' RESPONSIBILITY STATEMENT U/S 217 (2AA) OF THE COMPANIES ACT, 1956:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm to their best knowledge and belief that:

- In the preparation of annual accounts, the applicable accounting standards have been followed and there are no material departures;

- They have 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 31st March, 2011 and of the profit and loss account of the Company for the year ended on that date;

- They have taken proper and sufficient care 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 fraud and other irregularities;

- They have prepared the annual accounts on a going concern basis.

12. AWARDS AND ACHIEVEMENTS:

During the year, the Company has received several awards. Some prominent awards received are as follows:

- CGTantra Community Awards 2011 for Best vFX in Commercial for Zen estilo ad.

- Apsara Awards 2011 for Best visual effects for 'Guzaarish'

- eMe Awards 2011 for Best Film Content 'Guzaarish'

- eMe Awards 2011 for the Best Tv Content for indigo Airlines 'on-Time' advert.

- Award of excellence at ASiFA iAD 2010 for 'Raavan'

13. AUDITORS AND AUDITORS' REPORT:

M/s. S.R. Batliboi & Associates, Chartered Accountants resigned as Statutory Auditors of the Company and M/s. MZS & Associates, Chartered Accountants were appointed in their place at the extra ordinary General Meeting held on April 30, 2011 as Statutory Auditors of the Company.

M/s. MZS & Associates, Chartered Accountants, the Statutory Auditors hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The members are requested to consider their re-appointment and to fix their remuneration. The retiring auditors have, under Section 224 (1B) of the Companies Act, 1956, furnished confirmation of their eligibility for the re-appointment.

As regards the emphasis and qualifications made by the Auditors as stated in paragraph number 4 and 5 of their report on the accounts of Prime Focus limited and paragraph 5 of their report on the Consolidated Financial Statements of the Company respectively, attention is invited to note no. 19 (c), (d) and (e) of Schedule 16 on Significant Accounting Policies and notes forming part of the Accounts of the Company and note no. 16 (c), (d) and (e) of Schedule 18 of the Consolidated Financial Statements of the Company, wherein the detail explanation has been provided which in the opinion of the Board of Directors are self explanatory.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

i. Conservation of Energy and Technology Absorption:

Although the Company is not engaged in manufacturing activities, the Company makes every effort to conserve energy as far as possible in its post production facilities, Studios, offices, etc. The company also makes significant measures to reduce energy consumption by using/purchasing energy efficient equipments. we purchase PCs, laptops, air conditioners etc that meet environment standards, wherever possible and replace old equipment with more energy-efficient equipment. our energy costs constitutes a very small part of our total expenses, the financial impact of these _ measures is not material but we constantly evaluate new developments and invest into latest energy efficient technology.

Your company is predominantly a service provider and research & development is carried out as an integral part of the activities of the Company. The Company adopts the latest trends in the technology development and introduces the same so as to ensure reduction in cost with best quality output.

ii. Foreign Exchange Earnings and Outgo:

Activities relating to export, initiatives to increase exports, Developments of new export markets for Products and Services and Export Plan

The Company has continued to maintain focus and avail of export opportunities based on economic considerations. During the year, the Company has exports worth Rs. 6262.94 lacs.

(Rs. in lacs)

Particulars 2010-2011 2009-2010

Foreign exchange earned:

Technical Service receipts 2793.84 484.81

Foreign exchange outgo:

Payment on other accounts 197.64 324.00

15. Acknowledgements:

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives and staff of the Company.

For and on behalf of the Board of Directors

Sd/-

Naresh Malhotra

Chairman and Whole-time Director

Place: Mumbai

Date: June 20, 2011

 
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