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Notes to Accounts of PVR Ltd.

Mar 31, 2016

A. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

All Debentures are secured by mortgage on immovable properties (excluding immovable properties at Gujarat, Bangalore) ranking pari passu and secured by first pari passu charge on movable fixed assets of the Company (excluding vehicles hypothecated to banks) and all receivables of the Company both present and future.

b. (i) Term loan from banks and body corporate are secured by first pari passu charge over all fixed assets of the Company (excluding immovable properties at Gujarat, Bangalore and vehicles hypothecated to banks) and receivables of the Company both present and future.

(ii) Car loans of Rs. 140 lakhs (March 31, 2015: Rs. 178 lakhs) carries interest @ 10.25% p.a. and is repayable in 60 monthly installments. The loan is secured by hypothecation of vehicles purchased out of the proceeds of the loan.

(iv) Term Loan from banks and body corporate carries variable interest rate based on respective bank/ body corporate benchmark rate, effective rate of interest varying in between 9.95% p.a to 10.75% p.a.

(v) Finance lease obligation is secured by hypothecation of plant and machinery taken on lease. The interest rate implicit in the lease is varying in between 11.74% p.a. to 13.99% p.a. The payment is scheduled in 28 equal quaterly installments from the start of lease agreements.

1. GRATUITY PLAN:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service, in terms of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

2. LEASES

Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre-operative expenditure (pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

Disclosure for assets taken under non-cancellable leases, where the Company is presently carrying commercial operations is as under, which reflects the outstanding amount for non-cancellable period:

ii. Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

3. DETAILS OF DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES AS PER MSMED ACT, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 02, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the Act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

4. The Company has applied to the Ministry of Corporate Affairs for their approval for waiver of excess Remuneration of Rs. 235.64 lakhs and Rs.135.74 lakhs paid to its Managing Director and Joint Managing Director respectively for financial year 2014-15. The approval of Central Government is awaited.

5. SEGMENT INFORMATION

Business Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Accounting Standard - 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

6. The Board of Directors of the Company had approved the merger of PVR Leisure Limited and Lettuce Entertain you limited with the Company effective from April 01, 2015. Since PVR Leisure Limited & Lettuce Entertain You Limited are wholly owned subsidiaries of PVR Limited, therefore on their merger, no shares of PVR Limited will be issued. The Hon''ble Delhi High Court has fixed July 19, 2016 as final date of hearing for the merger of above mentioned Companies with PVR Limited.

7. On April 15, 2015 the company has invested in equity share capital of Zea Maize Private Limited for a sum of Rs. 500 lakhs. Post investment in Zea Maize (P) Ltd. (a company engaged in gourmet popcorn business), has become a subsidiary of PVR Limited.

8. The Board of directors in the meeting held on September 04, 2015 approved the Scheme of Amalgamation to merge Bijli Holdings Private Limited ("BHPL") with PVR Limited ("Company"), effective from January 01, 2016. Post proposed amalgamation of BHPL with Company; the Equity Shares of PVR Limited held by BHPL shall be held directly by members of BHPL. The Hon''ble High Court of Delhi has fixed August 04, 2016 as the final date of hearing.

9. On June 09, 2015, the Company has entered into definitive agreements with DLF Utilities Limited for purchase of its cinema business on slump sale basis, which was subject to Competition Commission of India (CCI) approval. The Company has received CCI order u/s 31 (7) of the Competition Act, 2002 on May 04, 2016, whereby the CCI has approved the proposed combination with DLF Utilities Limited in relation to acquisition of DT Cinemas, with certain modifications, which inter alia exclude DT Savitri (1 screen) and DT Saket (6 screens) from the proposed combination. The management is in process of closing the revised agreement with DLF utilities Limited which would be closed as per the terms of the agreement by May 31, 2016. As per the terms of definite agreement, the Company had deposited Rs. 5,000 lakhs in an Escrow account.

10. (a) Previous year''s figures have been re-grouped/ re-arranged where necessary to confirm to current year''s classification.

(b) The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs.


Mar 31, 2015

1. Corporate information

PVR Limited (the Company) is a public limited company with domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on leading stock exchanges in India. The Company is in the business of exhibition and production of films. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages at cinema location.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 1 33 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. As at March 31,2015, 693,878 (March 31,2014, 693,878) equity shares issued on preferential basis during F.Y. 2012-13 are under lock in till January 1 1,2016.

b. (i) Term loan from banks and body corporate are secured by first pari passu charge over all fixed assets of the Company (excluding immovable properties at Gujarat, Bangalore and vehicles hypothecated to banks) and receivables of the Company both present and future.

(ii) Term loan from banks and body corporate are also guaranteed by the personal guarantee of two of its promoter directors of the Company to the extent of Nil(March 31,2014: Rs 93 lakhs).

(iii) Car loans of Rs. 178 lakhs (March 31,2014: Rs. 213 lakhs ) carries interest @ 10.25% p.a. and is repayable in 60 monthly instalments. The loan is secured by hypothecation of vehicles purchased out of the proceeds of the loan.

c. As at and for the year ended March 31,2015, the Company has not been able to meet certain financial covenants in respects of its borrowings from Banks and Debenture holders. The Company is in the process of applying the waiver to respective lenders and is hopeful of securing the same. In view of above, no adjustment is considered necessary by the management.

d. The asset of Rs. 4,837 lakhs (March 31, 2014 : Rs. 4,496 lakhs) recognized by the Company as 'MAT credit entitlement' represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 1 1 5JAA of the Income Tax Act, 1961. The management, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

4. Composite Scheme of Amalgamation between the Company, Cine Hospitality Private Limited (CHPL) and along with Cinemax India Limited (CIL) & its subsidiaries in accordance with section 391-394 of The Companies Act, 1956

During the previous year ended March 31,2014, pursuant to the scheme of arrangement, approved by Hon'ble High Court of Delhi on February 12, 2014, in between PVR Limited (the Company) and Cinemax India Limited (CIL) along with its subsidiaries viz. Vista Entertainment Limited, Growel Entertainment Limited, Nikmo Entertainment Limited, Odeon Shrine Multiplex Limited and Cinemax Motion Pictures Limited which were in the business of running multiplexes and Cine Hospitality Private Limited (CHPL) which was the Holding Company of CIL and wholly owned subsidiary of the Company. CIL along with its subsidiaries and CHPL were amalgamated with the Company from the appointed date i.e. April 1,2013

Pursuant to the above, CHPL stands merged with the Company following "Purchase Method" of accounting as per the Accounting standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. All the assets and liabilities of CHPL were fair valued, the difference in the value of net assets merged (Rs. 27,026 lakhs) and value of investment (Rs.37,101 lakhs) in CHPL has been treated as goodwill amounting to Rs. 10,075 lakhs, Goodwill has been amortised in books over a period of 10 years on straight line method basis during the previous year.

Further to above, CIL along with its subsidiaries stands merged with the Company following "Pooling of Interest Method" and accordingly, all the assets, liabilities and debts including reserves of CIL & its subsidiaries have been recorded at their respective book values as on the appointed date as per the Accounting standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. The difference between the value of net assets acquired (Rs. 1 3,748 lakhs) and fair value of investment in CIL of Rs. 30,532 lakhs was adjusted/added with securities premium account/ Surplus of statement of Profit & Loss. Accordingly, Rs. 36,921 lakhs have been adjusted with Securities premium account and Rs. 6389 lakhs has been added to surplus of statement of Profit & Loss during the previous year.

Further, the Company had issued 10,90,283 equity shares in the swap ratio of 4 equity shares of PVR Limited of Rs. 10 each against each 7 equity shares of Rs. 5 each of CIL to erstwhile shareholders of CIL in accordance with the Scheme during the previous year.

5. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @ 1 5 days last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

6. Leases

i. Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre- operative expenditure (pending allocation), as the case may be.

(ii) Other Commitments

As per the incentive scheme of some State Governments for exemption from payment of entertainment tax, the Company is under obligation to operate the respective Multiplexes for a certain number of years.

7. Contingent Liabilities (not provided for) in respect of:

(Rs. in lakhs)

Particulars March 31, March 31, 2015 2014 a) Appeals filed by the Company with Commissioner of Income Tax 2,224 2,110 (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31,2012, 2011,2010, 2009, 2008, 2007, 2006 respectively. (the Company has paid an amount of Rs. 890 lakhs which is appearing in the Schedule of Loans and Advances)

b) Possible demand on account of entertainment tax exemption treated 3,444 3,653 as capital subsidy for assessment year 2012-13 to 2014-15 on the grounds of ongoing assessments

c) Show cause notices raised by Service tax Commissionerate, 2,110 539 New Delhi for non-levy of Service tax on invoices. (the company has already deposited under protest an amount of Rs. 100 lakhs which is appearing under loan and advances)

d) Possible exposure of Service tax on sale of food and beverages for 1,614 - financial year 2014-15

e) Notice u/s 271 C of the Income Tax Act, 1961 issued by JCIT (TDS). 115 115 CIT(A) has decided the matter in favour of the Company. Matter is Pending before ITAT.

f) Demand of Sales tax under Various State VAT Acts where appeal is 225 332 pending before competent authority (the Company has paid an amount of Rs. 77 lakhs under protest)

g) Demand of entertainment tax under Assam Amusement and 334 334 Betting tax Act, 1939 where appeal is pending before High Court

h) Appeal filed by CR Retails Malls (India) Ltd., against the order of - 91 Chief Controlling Revenue Authority, Pune against the demand of deficit stamp duty indemnified by the company.

i) Notice from Entertainment Tax department Chennai against short 43 43 deposit of Entertainment tax on regional movies

j) Notice from Commercial Tax department, Indore against alleged 823 823 collection of Entertainment tax during exemption period

k) Claims against the Company not acknowledged as debts 553 255

l) Amount involved/ exposure in respect of matter under litigation with 364 364 various parties including developers

m) Labour cases pending * Amount not Amount not ascertainable ascertainable

*In view of the several number of cases, pending at various forums/courts, it is not practicable to furnish the details of each case, however, as per estimate of management, the amount in aggregate is not material. Based on the discussions with the solicitors, the management believes that the Company has strong chances of success in the cases and hence no provision is considered necessary.

8. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 02, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

9. The Company has applied to the Ministry of Corporate Affairs for approval of the Remuneration paid as minimum remuneration to its Managing Director and Joint Managing Director for financial year 2014-15. The approval of Central Government is awaited.

10. The Board of directors has approved the merger of PVR Leisure Limited and Lettuce Entertain You Limited, (subsidiary company of PVR Leisure Limited) with PVR Limited which is subject to the approvals of the shareholders of the Company. The scheme in relation to the merger shall be finalised in due course and shall be approved by the constituted committee. Pending approval of the scheme at various levels. No adjustment is required to be done at this stage.

11. Segment Information

Business Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Accounting Standard - 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

12. Related Party Disclosure

Names of related parties and related party relationship

(a) Related parties where control exists

Subsidiaries PVR Pictures Limited PVR Leisure Limited

PVR bluO Entertainment Limited Lettuce Entertain You Limited

(b) Related parties with whom transactions have taken place during the year

Key Management Personnel

Ajay Bijli, Chairman cum Managing Director Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Personnel

Mrs. Salena Bijli, Wife of Mr Ajay Bijli Mrs. Sandhuro Rani, Mother of Mr Ajay Bijli

Enterprises having significant influence over the Company

Bijli Holding Private Limited

Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

PVR Nest

Priya Exhibitors Private Limited

13. (a) Previous year's figures have been re-grouped/ re-arranged where necessary to confirm to current year's classification. (b) The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs.


Mar 31, 2014

Corporate information

PVR Limited (the Company) is a public limited company with domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on leading stock exchanges in India. The Company is in the business of exhibition and production of films. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages at cinema location.

Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, I956 read with General Circular 8/20I4 dated April 04, 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1. Composite Scheme of Amalgamation between the Company, Cine Hospitality Private Limited (CHPL) and along with Cinemax India Limited (CIL) & its subsidiaries in accordance with section 391-394 of The Companies Act, 1956

Pursuant to the scheme approved by Hon''ble High Court of Delhi on February I2, 20I4, in between PVR Limited (the Company) and Cinemax India Limited (CIL)along with its subsidiaries viz. Vista Entertainment Limited, Growel Entertainment Limited, Nikmo Entertainment Limited, Odeon Shrine Multiplex Limited and Cinemax Motion Pictures Limited which are in the business of running multiplexes and Cine Hospitality Private Limited (CHPL) which was the Holding Company of CIL and wholly owned subsidiary of the Company. CIL along with its subsidiaries and CHPL were amalgamated with the Company from the appointed date i.e. April 1, 2013

Pursuant to the above, CHPL stands merged with the Company following "Purchase Method" of accounting as per the Accounting Standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. All the assets and liabilities of CHPL were fair valued, the difference in the value of net assets merged (Rs. 27,026 lakhs) and value of investment (Rs.37,101 lakhs) in CHPL has been treated as goodwill amounting to Rs. 10,075 lakhs, Goodwill has been amortised in books over a period of 10 years on straight line method basis.

Further to above, CIL along with its subsidiaries stands merged with the Company following "Pooling of Interest Method" and accordingly, all the assets, liabilities and debts including reserves of CIL & its subsidiaries have been recorded at their respective book values as on the appointed date as per the Accounting Standard 14 "Accounting for Amalgamation", issued by the Institute of Chartered Accountants of India. The difference between the value of net assets acquired (Rs. 13,748 lakhs) and fair value of investment in CIL of Rs. 30,532 lakhs was adjusted/added with securities premium account/ Surplus of statement of Profit & Loss. Accordingly, Rs. 36,921 lakhs have been adjusted with Securities premium account and Rs. 6389 lakhs has been added to surplus of statement of Profit & Loss.

Further, the Company has issued 10,90,283 equity shares in the swap ratio of 4 equity shares of PVR Limited of Rs. 10 each against 7 equity shares of Rs. 5 each of CIL to erstwhile shareholders of CIL in accordance with the Scheme.

2. Contingent Liabilities (not provided for) in respect of:

(Amount in lakhs)

Particulars March 31,2014 March 31,2013

a) Appeals filed by the Company with 2,110 1,478 Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2010, 2009, 2008, 2007, 2006 respectively. (the Company has paid an amount of Rs. 890 lakhs which is appearing in the Schedule of Loans and Advances)

b) Possible demand on account of 3,653 2,154 entertainment tax exemption treated as capital subsidy for assessment year 2012-13 to 2014-15 on the grounds of ongoing assessments

c) Show cause notices raised by Service 539 539 tax Commissionerate, New Delhi for non-levy of Service tax on invoices. (the company has already paid an amount of Rs. 85 lakhs which is appearing under loan and advances)

d) Notice u/s 27IC of the Income Tax 115 115 Act, 1961 issued by JCIT (TDS). CIT(A) has decided the matter in favour of the Company. Matter is Pending before ITAT.

e) Demand of Sales tax under Various State Vat Act where appeal is pending before competent authority (the Company has paid an amount of Rs. 41 lakhs under protest) 332 -

f) Demand of entertainment tax under Assam Amusement and Betting tax Act, 1939 where appeal is pending before High Court 334 -

g) Appeal filed by CR Retails Malls ( India) Ltd., against the order of Chief Controlling Revenue Authority, Pune against the demand of deficit stamp duty indemnified by the company. 91 91

h) Notice from Entertainment Tax department Chennai regarding short deposit of E tax on regional movies 43 43

i) Notice from Commercial Tax department, Indore regarding alleged collection of Entertainment tax during exemption period 823 823

j) Claims against the Company not acknowledged as debts 255 32

k) Labour cases pending * Amount not Amount not ascertainable ascertainable

*In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case, however, as per estimate of management, the amount in aggregate is not material. Based on the discussions with the solicitors the management believes that the Company has a strong chance of success in the cases and hence no provision is considered necessary.

3. During the year, the Company has executed the sale deed of Anupam Cinema Property, Located at New Delhi, for a consideration of Rs. 5200 lakhs during the year. As a result the Company has earned a profit of Rs. 1915 lakhs. The profit on the aforesaid sale has been considered as exceptional item in the statement of profit and loss in the current year.

4. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Government of India has promulgated an Act namely The Micro, Small and Medium Enterprise Development Act, 2006 which comes into force with effect from October 2, 2006. As per the act, the Company is required to identify the Micro, Small and Medium Suppliers and pay them interest on overdue beyond the specified period irrespective of terms agreed with the suppliers. The Company has sent the confirmation letters to its suppliers at the year end, to identify the supplier registered with the act. As per the information available with the Company, none of the supplier has confirmed that they have registered with the Act. In view of this, the liability of interest has not been provided nor is required disclosure done.

5. Segment Information

Business Segments:

The Company is engaged in the business of film exhibition and production. There are no separately identifiable business segment considering the proportion of revenues, profits and assets of the Company. Hence no separate disclosures have been made in line with Accounting Standard - I7 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

6. (a) Previous year''s figures have been re-grouped/ re-arranged where necessary to confirm to current year''s classification.

(b) The figures in the financial statements and notes thereto have been rounded off to nearest rupees in lakhs.

(c) The current year financial statement includes the impact of scheme of amalgamation as stated in note 29. Therefore, the figures of previous year are strictly not comparable to current year figures.


Mar 31, 2013

1. Corporate information

PVR Limited (the Company) is a public limited company with domiciled in India and incorporated under the provisions of the Companies Act, I956. Its shares are listed on leading stock exchanges in India. The Company is in the business of exhibition and production of films. The Company also earns revenue from in-cinema advertisements/product displays and sale of food and beverages at cinema location.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, I956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service in terms of payment of Gratuity Act, 1972 without any maximum limit. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

4. In respect of service tax on immovable properties matter where Special Leave Petition (SLP) is pending before the Honorable Supreme Court an amount of Rs. I4I,624,348 (net of CENVAT) for the period upto March 3I, 20II has been shown as an Exceptional item in the financial statement in the previous year ended March 3I, 20I2.

5. Scheme of arrangement for Demerger of Production Business of one of the subsidiaries PVR Pictures Limited

i. During the previous year ended March 3I, 20I2, Pursuant to the Composite Scheme of Arrangement (''Scheme'') filed by PVR Limited (the transferee Company) and PVR Pictures Limited (the transferor Company), under the provisions of the Companies Act, I956 and as approved by the shareholders, and sanctioned by the Honorable High Court of Delhi on February 02, 20I2, the production business undertaking of the transferor Company (non listed) was transferred to and vested in the transferee Company with effect from April 0I, 20II (the appointed date). The Company has made necessary filing with the Registrar of Companies, NCT of Delhi and Haryana on February 29, 20I2 being the effective date. The Scheme provides that all the assets and liabilities pertaining to production business undertaking in the books of transferor Company as on appointed date shall be transferred to and vested in the transferee Company pursuant to this scheme and recorded by the transferee Company. Accordingly, the scheme has been given effect in the financial statements of previous year ended March 3I, 20I2.

ii. The approved Scheme further provides that from the effective date, such of the assets and liabilities covered under the Scheme and as the Board of Directors consider relevant and appropriate after considering corresponding deferred tax adjustments and proportionate reduction in value of investments in subsidiary, shall be adjusted to their fair values, and the corresponding adjustment out of above shall be set off against specified reserves (including Securities Premium account). Accordingly the Company had written down the value of such assets by Rs. 493,783,033 and set off the same against reserves as per Scheme during the previous year ended March 31, 2012.

6. Pursuant to Share Purchase Agreement inter-alia with L Capital Eco Limited, the Company has transferred 151,87,245 equity shares held by it in PVR bluO Entertainment Limited to PVR Leisure Limited, a subsidiary of the Company for a sum of Rs. 329,978,340 on 28th December, 2012. As a result the Company has earned a profit of Rs. 33,293,650 in the current year. Also during the previous year ended March 31, 2012, the Company had sold its investment in the shares of its subsidiary company CR Retail Mall (India) Ltd and had earned a profit of Rs 168,564,053. The profit on the above sales has been considered as exceptional item in the statement of profit and loss in the respective years.

7. During the previous year ended March 31, 2012, the Company has on July 05, 2011 purchased 40% share capital of PVR Pictures Limited from JP Morgan Mauritius Holdings IV Limited and ICICI Venture Funds Management Company Limited. Subsequent to the above purchase, PVR Pictures Ltd. had become a wholly owned subsidiary of the Company.

8. Segment Information Business Segments:

The Company is engaged in the business of film production as well as exhibition. However considering the proportion of revenues, profits and assets of production business to the total revenues, profits and assets of the combined operations, the Company does not consider the production business as a separately identifiable reportable segment and hence no separate disclosures have been made in line with Accounting Standard - 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

9. The Company in the earlier years had applied to the Ministry of Corporate Affairs, Central Government for approval of the remuneration paid beyond the prescribed limits to its Director aggregating to Rs 11,875,097 for the financial years 2008 to 2011. The approval of the Central Government is awaited.

10. Related Party Disclosure

Subsidiaries PVR Pictures Limited

PVR Leisure Limited

Cine Hospitality Private Limited

Cinemax India Limited

Vista Entertainment Limited

Growel Entertainment Limited

Nikmo Entertainment Limited

Cinemax Motion Pictures Limited

Odeon Shrine Multiplex Limited

PVR bluO Entertainment Limited

Lettuce Entertain You Limited

CR Retail Malls (India) Limited (till May 18, 2011)

Key Management Personnel Ajay Bijli, Chairman cum Managing Director

Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Personnel Ms. Salena Bijli, Wife of Mr Ajay Bijli

Ms. Sandhuro Rani, Mother of Mr Ajay Bijli

Enterprises having significant influence over the Company Bijli Holding Private Limited

Priya Exhibitors Private Limited

Enterprises over which Key Management Personnel are able to exercise significant influence

PVR Nest

11. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective State Governments. The Company''s contention that Entertainment tax is a capital receipt and the Company''s appeal for not setting off such capital receipt from the value of fixed assets was rejected by Assessing Officer and Commissioner of Income Tax (Appeals) for Assessment Years 2006-07 onwards. The Company had filed appeal against the order of CIT (Appeals) before the Income Tax Appellate Tribunal (ITAT), Delhi in respect of the assessment year 2006-07 and 2007-08. The Income Tax Appellate Tribunal, Delhi for Assessment Year 2006-07 has accepted Company''s contention of treating Entertainment Tax as a capital receipt and for not setting off such capital receipt from block of fixed assets. Based on the above order and order pronounced by Honorable High Court of Gujrat and Mumbai in the similar matters during the year and also basis the tax opinion obtained, the Company has reversed deferred tax liabilities of Rs. 307,531,453 upto March 31, 2012 in the current year. However, the overall deferred tax credit is reduced by Rs. 178,180,078 during the current year on account of principles of virtual certainty.

12. (a) Previous year''s figures have been re-grouped/ re-arranged wherever necessary to conform to current year''s classification.

(b) The figures in the financial statements and notes thereto have been rounded off to nearest rupee.


Mar 31, 2012

1. Corporate information

PVR Limited (the Company) is a public Company with domicile in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on leading stock exchanges in India. The Company is in the business of production and exhibition of films. The Company also earns revenue from in-cinema advertisements/product displays and in-cinema sale of food and beverages.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below:

3. Amalgamation of erstwhile Leisure World Private Limited with the Company in the previous year

i. Pursuant to the scheme of Amalgamation of Leisure World Private Limited with the Company under Section 391 to 394 of the Companies Act, 1956, (the scheme of Amalgamation) as sanctioned by the Hon'ble High Court of New Delhi vide its Order dated August, 19, 2010, the assets and liabilities of Leisure World Private Limited were transferred to and vested in the Company with effect from the appointed date, i.e April 01, 2010.

ii. The Company has made necessary filings with the Registrar of Companies, NCT of Delhi and Haryana in the previous year and accordingly the scheme was given effect to in the accounts in the previous year . In terms of the Accounting Standard 14 – Accounting for amalgamation, issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation was accounted under "Purchase method", wherein all the assets and liabilities of Leisure World Private Limited, have been accounted for in the books on the basis of the fair values as on April 1, 2010.

iii. The Board of the Directors of the Company in their meeting dated April 12, 2010 approved the swap ratio to 152 (Rs 10/- fully paid up) equity shares of the Company for every 100 (Rs. 10/- fully paid up) equity shares held by the shareholders of Leisure World Private Limited(Transferor Company). Accordingly 1,460,112 equity shares were issued by the Company to the shareholders of the Leisure World Private Limited. These equity shares so allotted by the Company to the shareholders of the transferor company rank pari-passu in all respects with the existing equity shares of the PVR Ltd. The share capital of the transferor company stands cancelled and extinguished. Pursuant to the approved scheme of amalgamation, the authorized share capital of the Company stands increased to 36,000,000 equity shares of Rs 10 each in the previous year.

iv. Pursuant to the Scheme of Amalgamation approved by the Hon'ble High Court, all assets and liabilities of the transferor company were transferred to the Company at fair value and all inter-company transactions were eliminated in the previous year. However, no elimination of inter-company transactions was made for transactions entered upto March 31, 2010 in the previous year.

v. As per the Scheme, the excess if any, of the aggregate fair value of the assets reduced by the aggregate value of the liabilities as recorded by the Company and upon their transfer shall be credited to the Amalgamation Reserve which forms the part of the net worth of the Company. Accordingly, an amount of Rs.19,336,308 has been credited to Amalgamation Reserve forming the part of the Reserve and Surplus of the Company in the previous year.

vi. Pursuant to the Scheme of Amalgamation, the bank account and agreements in the name erstwhile Leisure World Private Limited are in the process of being transferred in the name of the Company.

4. Gratuity Plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @15 days last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

5. Employee Stock Option Plans

The Company has provided stock option scheme to its employees. As at March 31, 2012, the following schemes are in operation:

PVR ESOS 2008:

Date of grant January 30, 2009

Date of Shareholder's approval January 5, 2009

Date of Board Approval January 30, 2009

Number of options granted 500,000

Method of Settlement (Cash/Equity) Equity

Vesting Period

Not less than one year and not more than ten years from the date of grant of options.

Exercise Period Within a period of two years from the date of vesting

Vesting Conditions

Subject to continued employment with the Company. Further, Compensation Committee may also specify certain performance parameters subject to which options would vest.

Market value as at January 30, 2009 Rs. 88

Stock Options granted:

There were no stock options granted during the current and the previous year and thus weighted average fair value of stock options has not been disclosed.

The Company measures the cost of ESOP using the intrinsic value method. However, the options in earlier years were granted on then prevailing market price of Rs. 88. As a result, there is no expense to be recorded in the financial statements.

In March 2005, the ICAI has issued a guidance note on 'Accounting for Employees Share Based Payments' applicable to employee based share plan, the grant date in respect of which falls on or after April 1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting in the financial statements. Applying the fair value based method defined in said guidance note, the impact on the reported net profit and earnings per share would be as follows:

6. Leases

i. Rental expenses in respect of operating leases are recognized as an expense in the statement of profit and loss and pre- operative expenditure (pending allocation), as the case may be.

ii. Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the statement of profit and loss or netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

The Company has given spaces of cinemas/ food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The Company has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

7. Capital and Other commitments

b) Other Commitments

i. As at March 31, 2012 the Company has commitments of Rs. 17,198,233 (March 31, 2011: Rs. 7,867,863) relating to rendering of marketing services.

ii. As at March 31, 2012 the Company has commitments of Rs. 4,653,299 (March 31, 2011: Rs. Nil) relating to completion of production of films.

iii. For commitments related to lease arrangements (refer Note 31)

8. Contingent Liabilities (not provided for) in respect of:

(Amount in Rs.)

Particulars March 31,2012 March 31,2011

a) Labour cases pending * Amount not Amount not ascertainable ascertainable

b) Claims against the Company not acknowledged as debts (the Company has paid under protest an amount of Rs. 1,998,809 (March 31, 2011 : Rs. 1,998,809) which is appearing under Loans and Advances) 3,506,380 2,809,468

c) Show Cause Notice raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on certain invoices. (the Company has already paid an amount of Rs.1,900,334 which is appearing under Loans and Advances) 13,095,770 14,418,819

d) Demands by Service Tax Commissioner (Adjn.), New Delhi for non-levy of Service tax on certain marketing income. 8,033,084 4,014,042

e) Appeals filed by the Company with Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2009, 2008, 2007, 2006 respectively. (the Company has already paid an amount of Rs. 96,242,608 under protest which is appearing under Loans and Advances) 137,739,449 114,260,843

f) Notice u/s 271C of the Income Tax Act, 1961 issued by JCIT, Lucknow 11,497,200 -

g) Appeal filed by CR Retails Malls (India) Ltd., against the order of Chief Controlling Revenue Authority, Pune against the demand of deficit stamp duty indemnified by the Company. 9,068,925 -

h) Notice from Entertainment department Chennai regarding short deposit of Entertainment tax on regional movies. 4,254,152 -

i) Arbitration filed on rental dues claimed by erstwhile landlord of food court in Ludhiana, Punjab 45,288,360 -

j) Appeal filed by the Company against the order of Municipal Corporation of Greater Mumbai against the demand of property tax for a multiplex at Mumbai. - 14,773,264

*In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case. Based on the discussions with the solicitors/meeting the terms and conditions by the Company, the management believes that the Company has a strong chance of success in the cases and hence no provision there against is considered necessary.

9. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective State Governments. The Company's contention that Entertainment tax is a capital receipt and the Company's appeal for not setting off such capital receipt from the value of fixed assets was rejected by Assessing Officer and Commissioner of Income Tax (Appeals) for Asessment Years 2006-07 onwards. The Company had filed appeal against the order of CIT (Appeals) before the Income Tax Appellate Tribunal (ITAT), Delhi in respect of the assessment year 2006-07 and 2007- 08. Subsequent to the year end, the Income Tax Appellate Tribunal, Delhi for Assessment Year 2006-07 has accepted Company's contention of treating Entertainment Tax as a capital receipt and for not setting off such capital receipt from block of fixed assets. Based on the above order, the Company has re-computed its tax liability in respect of current tax and deferred tax for the said year for which the favorable order has been received and accordingly income tax provision for earlier years has been reduced by Rs 775,683 and deferred tax charge for earlier years has been reduced by Rs. 3,366,725.

While the matter relating to Assessment Year 2007-08 is pending with ITAT and for Assessment Years 2008-09 and 2009-10 with CIT (Appeals), the Company is confident for entitlement as mentioned above. However, till the time favourable orders are received from ITAT, the Company continues with its earlier position and has provided for Income tax and deferred tax liabilities for the Assessment year 2007-08 onwards by treating the Entertainment Tax (E.T.) as capital receipt and reducing the notional amount of E.T. from the block of fixed assets while calculating depreciation on fixed assets.

10. The Company had filed a Special Leave Petition (SLP) before Hon'ble Supreme Court against the order of Hon'ble High Court of Delhi which upheld the levy of Service tax vide its order dated September 23, 2011. The Hon'ble Supreme Court passed an interim direction on October 21, 2011 directing the Company to deposit with the Service tax Department 50% of arrears towards service tax till September 30, 2011 in three equated installments within six months and for balance 50% to furnish a solvency surety. Further as per the directions of the Hon'ble Supreme Court, the Company is paying the service tax towards renting of immovable property from October 2011 onwards. Though the matter is still pending with the Hon'ble Supreme Court, in view of the above developments, the Company considers it prudent to make provision in its books for the entire amount of service tax on immovable property. As a result, the current year service tax on rent (net of cenvat credit) of Rs. 79,055,520 is clubbed with Rent expenses and Rs. 141,624,348 (net of cenvat credit) related to period before March 31, 2011 is shown as exceptional item in the statement of profit and loss.

11. Segment Information

Business Segments:

The Company is engaged in the business of film production as well as exhibition. However considering the proportion of revenues, profits and assets of production business to the total revenues, profits and assets of the combined operations, the Company does not consider the production business as a separately identifiable reportable segment and hence no separate disclosures have been made in line with Accounting Standard – 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with Nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

12. Related Party Disclosure

Subsidiaries

CR Retail Malls (India) Limited*

PVR Pictures Limited

PVR bluO Entertainment Limited

Key Management Personnel

Ajay Bijli, Chairman cum Managing Director Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Personnel

Ms. Salena Bijli, Wife of Mr. Ajay Bijli

Ms. Sandhuro Rani, Mother of Mr. Ajay Bijli

Enterprises having significant influence over the Company

Bijli Investments Private Limited Priya Exhibitors Private Limited

* w.e.f. May 18, 2011, CR Retail Malls (India) Limited ceases to be the subsidiary of the Company.

13. The Company in the earlier years had applied to the Ministry of Corporate Affairs, Central Government for approval for the remuneration paid beyond the prescribed limits to its Director aggregating to Rs 11,875,097 for the financial years 2008 to 2011. The approval of the Central Government is awaited.

14. During the year, the Company sold its investment in the shares of its subsidiary company CR Retail Malls (India) Ltd for a consideration more than the cost of investments. The profit on the same amounting to Rs 168,564,053 has been disclosed as an exceptional item in the statement of profit and loss.

15. The Company has on July 05, 2011 purchased 40% share capital of PVR Pictures Limited from JP Morgan Mauritius Holdings IV Limited and ICICI Venture Funds Management Company Limited. Subsequent to the above purchase, PVR Pictures Ltd has now become a wholly owned subsidiary of the Company.

16. Scheme of arrangement for Demerger of Production Business of one of the subsidiaries PVR Pictures Limited

i. Pursuant to the Composite Scheme of Arrangement ('Scheme') filed by PVR Limited (the transferee Company) and PVR Pictures Limited (the transferor Company), under the provisions of the Companies Act, 1956 and as approved by the shareholders, and sanctioned by the Hon'ble High Court of Delhi on February 02, 2012, the production business undertaking of the transferor Company (non listed) was transferred to and vested in the transferee Company with effect from April 01, 2011 (the appointed date). The Company has made necessary filing with the Registrar of Companies, NCT of Delhi and Haryana on February 29, 2012 being the effective date. The Scheme provides that all the assets and liabilities pertaining to production business undertaking in the books of transferor Company as on appointed date shall be transferred to and vested in the transferee Company pursuant to this scheme and recorded by the transferee Company. Accordingly, the scheme has been given effect in these financial statements.

ii. The approved Scheme further provides that from the effective date, such of the assets and liabilities covered under the Scheme and as the Board of Directors consider relevant and appropriate after considering corresponding deferred tax adjustments and proportionate reduction in value of investments in subsidiary, shall be adjusted to their fair values, and the corresponding adjustment out of above shall be set off against specified reserves (including Securities Premium account). Accordingly the Company has written down the value of such assets by Rs. 493,783,033 and set off the same against reserves as per Scheme.

17. (a) The Company has during the year, merged operations of production business undertaking of PVR Pictures Limited pursuant to the Scheme of arrangement for Demerger and also started commercial operations at Udaipur, Surat, Vasant Kunj (New Delhi), Kolkata and Nanded. Hence current year's figures are not strictly comparable with those of the previous year.

(b) Previous year's figures have been re-grouped where necessary to confirm to current year's classification.

(c) The figures in the financial statements and notes thereto have been rounded off to nearest rupee.


Mar 31, 2011

Nature of Operations

PVR Limited is in the business of film exhibition. The Company also earns revenue from in-cinema advertisements/product displays and in-cinema sale of food and beverages.

1. Segment Information

Business Segments:

The Company is solely engaged in the business of film exhibition. The entire operations are governed by the same set of risk and returns, hence, the same has been considered as representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard – 17 on Segment Reporting.

Geographical Segments:

The Company sells its products and services within India with nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

2. Related Party Disclosure

Subsidiaries CR Retail Malls (India) Limited

PVR Pictures Limited

PVR bluO Entertainment Limited

Key Management Personnel Ajay Bijli, Chairman cum Managing

Director and;

Sanjeev Kumar, Joint Managing

Director

Enterprises having significant Bijli Investments Private Limited influence over the Company Priya Exhibitors Private Limited

NOTES:

a) *The Company has availed loans from banks and a body corporate aggregating to Rs. 460,494,676 (Previous year Rs.757,105,528) which are further secured by personal guarantee of two directors of the Company. Loan from SIDBI was further secured by second charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi.

b) The above particulars exclude expenses reimbursed to/by related parties.

c) No amount has been provided as doubtful debt or advance/written off or written back in the year in respect of debts due from/to above related parties.

3. The followings are the details of loans and advances by the Company, outstanding at the end of the year in terms of Securities & Exchange Board of Indias circular dated January 10, 2003:

4. Security Deposits (paid) include Rs. 2,832,089 (Previous year Rs. 2,832,089) recoverable from one party, with whom the Company had entered into Memorandum of Understanding for taking office space on rent and Rs. 5,890,311 paid to various developers for taking multiplex space on lease. The Company has filed legal suit for recovery of the aforesaid dues and is hopeful of recovering the same. Hence, no provision against the same has been considered necessary.

5. (a) The Finance Act 2010, amended the definition of the Renting of the Immovable Property Service to explicitly provide that the activity of the renting itself is a taxable service with retrospective effect from 1st June, 2007. The Company has challenged the impugned provisions of law by way of a writ petition filed with the Honble High Court of Delhi and a stay order is obtained. Also, based on the legal advice obtained, the management is confident that the service tax on renting of the immovable property is not applicable and hence is not payable. In view of this judgment, the service tax on renting of immovable properties to the extent of Rs. 141,624,348 (including Rs. 87,303,515 pertaining to earlier years) (net of service tax credit claimable) not paid to the landlords has not been provided during the year.

(b) Service tax amounting to Rs 15,011,689 (including Rs 5,409,585 pertaining to earlier years) on rental income has been charged from the lessees in the current year.

6 A. Amalgamation of erstwhile Leisure World Private Limited with the Company

(i) Pursuant to the scheme of Amalgamation of Leisure World Private Limited with the Company under Section 391 to 394 of the Companies Act, 1956, (the scheme of Amalgamation) as sanctioned by the Honble High Court of New Delhi vide its Order dated August 19, 2010, the assets and liabilities of Leisure World Private Limited were transferred to and vested in the Company with effect from the appointed date, i.e. April 1, 2010. The Company has made necessary filings with the Registrar of Companies, NCT of Delhi and Haryana. The Scheme of Amalgamation has accordingly been given effect to in these accounts.

(ii) In terms of the Accounting Standard 14 – Accounting for amalgamation, issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation is accounted under "Purchase method", wherein all the assets and liabilities of Leisure World Private Limited, have been accounted for in the books on the basis of the fair values as on April 1, 2010.

(iii) The Board of the Directors of the Company in their meeting dated April 12, 2010 approved the swap ratio to 152 (Rs 10/ - fully paid up) equity shares of the Company for every 100 (Rs. 10/- fully paid up) equity shares held by the shareholders of Leisure World Private Limited(Transferor Company). Accordingly 1,460,112 equity shares were issued by the Company to the shareholders of the Leisure World Private Limited. These equity shares so allotted by the Company to the shareholders of the transferor company rank pari-passu in all respects with the existing equity shares of the PVR Ltd. The share capital of the Transferor company stands cancelled and extinguished. Pursuant to the approved scheme of amalgamation, the authorized share capital of the Company stands increased to 36,000,000 equity shares of Rs 10 each.

(iv) Pursuant to the Scheme of Amalgamation approved by the Honble High Court, all assets and liabilities of the transferor Company are transferred to the Company at fair value and all inter-company transactions are eliminated. However, no elimination of inter-company transactions has been made for transactions entered upto March 31, 2010.

(v) As per the Scheme, the excess if any, of the aggregate fair value of the assets reduced by the aggregate value of the liabilities as recorded by the Company and upon their transfer shall be credited to the Amalgamation Reserve which forms the part of the net worth of the Company. Accordingly, an amount of Rs.19,336,308 has been credited to Amalgamation Reserve forming the part of the Reserve and Surplus of the Company. The summary of such Assets, Liabilities and Reserves is as below:

(vi) Pursuant to the Scheme of Amalgamation, the bank accounts and agreements in the name erstwhile Leisure World Private Limited are in the process of being transferred in the name of the Company.

In view of this amalgamation being effective from April 1, 2010, the figures for the year ended March 31, 2011 are not comparable with the previous years figures.

6B. Amalgamation of erstwhile Sunrise Infotainment Private Limited with the Company in the previous year

(i) Pursuant to the scheme of Amalgamation of Sunrise Infotainment Private Limited with the Company under Section 391 to 394 of the Companies Act, 1956, (the scheme of Amalgamation) as sanctioned by the Honble High Court of New Delhi vide its Order dated September 25, 2009, the assets and liabilities of Sunrise Infotainment Private Limited (a Company engaged in the business of film exhibition) were transferred to and vested in the Company with effect from April 1, 2008. The Company had made necessary filings with the Registrar of Companies, NCT of Delhi and Haryana. The Scheme of Amalgamation has accordingly been given effect to in the accounts in the previous year.

(ii) In terms of the Accounting Standard 14 – Accounting for amalgamation, issued by the Institute of Chartered Accountants of India, the Scheme of Amalgamation is accounted under "Pooling of Interest method", wherein all the assets and liabilities of Sunrise Infotainment Private Limited, have been accounted for in their book values as appearing in the books as on April 1, 2008.

(iii) Goodwill arising out of difference in the acquisition value of shares in the merged entity and the book value of shares of the Transferor Company had been amortized.

(iv) On the amalgamation of the Transferor Company and Transferee Company, the share capital of the Transferor Company was extinguished since all the shares of the Transferor Company were held by the Transferee Company as its Holding Company. Since the Transferor Company was a wholly owned subsidiary of the Transferee Company, no shares were issued by the Transferee Company to the shareholders of the Transferor Company as a result of amalgamation.

(v) Pursuant to the Scheme of Amalgamation approved by the Honble High Court, all assets and liabilities of the transferor company were transferred to the transferee company and all inter-company transactions were eliminated. However, elimination of inter-company transactions were made for transactions entered upto March 31, 2008.

(vi) The credit balance in the Profit and Loss Account of erstwhile Sunrise Infotainment Private Limited of Rs. 2,936,870 as at April 1, 2008 was added to the accumulated surplus of the Company of the previous year.

(vii) As per the Scheme, during the period between the Appointed Date and the Effective Date, erstwhile Sunrise Infotainment Private Limited was deemed to have carried on the existing business in "trust" on behalf of the Company. Further all profits or incomes earned and losses and expenses incurred by Sunrise Infotainment Private Limited during such period, was for all purposes, be deemed to be profits or incomes or expenditure or losses of the Company. Accordingly, the net loss after tax incurred by erstwhile Sunrise Infotainment Private Limited during the year from April 1, 2008 to March 31, 2009 of Rs. 26,302,193 has been incorporated in the financial statements of the Company by way of an adjustment to the balance of the Profit and Loss Account as at March 31, 2008.

(viii) Pursuant to Scheme of Amalgamation approved by the Honble High Court of Delhi, the authorized share capital of the Company was reclassified as 35,000,000 Equity Shares of Rs. 10 each; 20,000,000 Preference shares of Rs. 10 each and 5,000,000 5% cumulative Preference shares of Rs. 10 each from 30,000,000 Equity shares of Rs. 10 each and 20,000,000 Preference shares of Rs. 10 each respectively in the previous year.

(ix) Pursuant to the Scheme of Amalgamation, the bank accounts and agreements in the name erstwhile Sunrise Infotainment Private Limited are in the process of being transferred in the name of the Company.

7. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective State Governments. In the assessment orders for the Assessment years 2006-07 and 2007-08, the Assessing Officer has accepted the Companys contention that the amount of entertainment tax is a capital receipt by reducing the notional amount of entertainment tax from the block of fixed assets while calculating depreciation on fixed assets. However the Companys contention of Entertainment tax a capital receipt and the Companys appeal for not setting off such capital receipt from the value of fixed assets has been rejected by Commissioner of Income Tax (Appeals) and the Company has filed appeals against the order of CIT (Appeals) before the Honble Income Tax Appellate Tribunal, Delhi in respect of these years. Till the time the appeal is pending, provision for current income tax and deferred tax liabilities for the current year and earlier years has been made based on the Companys position of treating the entertainment tax as a capital receipt and reducing the notional amount of entertainment tax from the block of fixed assets while calculating depreciation on fixed assets . Had the Company made the income tax provision based on the CIT (Appeals) order, the advance payment of income tax and deferred tax liability would have been lower by Rs. 192,389,520 each. There is no material impact in the Profit before tax of the current year.

8. The asset of Rs. 60,385,329 (Previous year Rs.16,200,000) recognized by the Company as MAT Credit Entitlement Account under Loans and Advances represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

9. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity plan.

The weighted average share price at the date of exercise for stock options was Rs. 167.73.

Stock Options granted:

There were no stock options granted during the current and the previous year and thus weighted average fair value of stock options has not been disclosed.

The options in earlier years were granted on then prevailing market price of Rs. 88. As a result, there is no expense to be recorded in the financial statements.

In March 2005, the ICAI has issued a guidance note on Accounting for Employees Share Based Payments applicable to employee based share plan, the grant date in respect of which falls on or after April 1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting

10. Leases

i) Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss Account and Pre- Operative Expenditure (pending allocation), as the case may be. Operating Lease (for assets taken on lease) Disclosure for properties under non cancellable leases, where the Company is carrying commercial operations is as under:

ii) Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the Profit and Loss Account and netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement.

11. During the year, the company has written off certain debtors amounting to Rs. 12,671,744 on account of non recovery of the same. These amounts have been charged off to profit and loss account in earlier years.

12. Other current assets include an amount of Rs. 22,778,611 which represents amount of entertainment tax recoverable from the Government of Uttar Pradesh in respect of its multiplexes at Allahabad and Lucknow which commenced operations effective from 5th March 2010 and 10th September, 2010 respectively. The Company has received the amounts in respect of Rs 8,995,297 subsequent to year end and is hopeful of recovering the balance in accordance with the Uttar Pradesh State Government Order no. 101/2009-10.

13. Contingent Liabilities (not provided for) in respect of:

March 31, 2011 March 31, 2010

(Rs.) (Rs.)

a) Labour cases pending * Amount not Amount not

ascertainable ascertainable

b) Claims against the Company not acknowledged as debts 2,809,468 (the Company has paid under protest an amount of Rs. 1,998,809 (Previous year Rs. 3,578,441) which is appearing in the Schedule of Loans and Advances)** 4,188,073

c) Corporate guarantee given against the loan of Rs. 500,000,000 sanctioned by a financial institution to the subsidiary, to the extent of loan drawn. 429,582,995

d) Show cause notices raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on invoices. (the Company has already paid an amount of Rs.1,900,334 prior to the issuance of show cause notice which is appearing in the Schedule of Loans and Advances)** 18,432,861 18,432,861

e) Appeals filed by the Company with Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2008, 2007, 2006 respectively. (the Company has paid an amount of Rs. 73,255,899 which is appearing in the Schedule of Loans and Advances)** 114,260,843 5,502,471

f) Appeal filed by the Company against the order of Municipal Corporation of Greater Mumbai against the demand of property tax for a multiplex at Mumbai.** 14,773,264 10,731,694

*In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case.

**Based on the discussions with the solicitors/meeting the terms and conditions by the Company, the management believes that the Company has a strong chance of success in the cases and hence no provision there against is considered necessary.

* As the future liability of gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the director is not included above.

*excluding provident fund contribution of Rs. 2,246,400 (Previous year Rs. 2,246,400).

** including Rs. 4,992,000 (Previous year Rs. 4,992,000) charged to pre-operative expenses. The said amount does not include provident fund contribution of Rs. 374,400 (Previous year Rs. 374,400).

The Ministry of Corporate Affairs (MCA), Central Government vide letter dated April 5th, 2010 had approved remuneration of Rs. 14,500,000 to Mr. Ajay Bijli, Chairman cum Managing Director (CMD) of the Company for the period 01.04.2008 to 31.03.2009 as against Rs. 19,719,949 paid during the said period. A representation has been made to MCA, Central Government for approval of the excess remuneration of Rs. 5,219,949 (as approved by the Remuneration Committee and shareholders of the Company) and the approval of the Central Government is awaited.

The MCA, Central Government vide another letter dated April 5th, 2010, had approved annual remuneration to CMD for the period 01.04.2009 to 31.03.2012 shall be as per last years remuneration i.e Rs. 19,719,949 (including contribution to provident fund). The Company has filed a representation to the Central Government for seeking approval for waiver of excess amount of remuneration of Rs. 1,628,903 per annum (excluding contribution to provident fund) paid to CMD during the period 01.04.2009 to 31.03.2010 and 01.04.2010 to 31.03.2011.

Remuneration of Rs. 9,984,000 (excluding contribution to provident fund) paid to the Joint Managing Director (JMD) during the financial year 2010-11 is within the limits prescribed under Schedule XIII to the Companies Act, 1956. The remuneration paid for the financial year 2009-10 was short of the approvals by Rs.7,584,000 for which the approval has been received in the current year.

14. In view of the diverse nature of the food and beverages items (each being less than 10% in value of the total turnover of the Company) being sold by the Company, it is not practicable to give the quantitative details thereof. All items of food and beverages are indigenously procured.

15. i) The Board of Director of the Company had recommended a dividend of Re. 1/- per share at its meeting held on May 28, 2010 subject to the approval of the shareholders at the annual general meeting and accordingly made an appropriation of Rs. 25,624,330 and Rs. 4,354,855 towards proposed dividend and dividend distribution tax respectively. The company has increased the appropriation by Rs. 1,499,312 for dividend and Rs. 150,043 for dividend distribution tax pertaining to dividend on shares allotted subsequent to March 31, 2010 but before the record date. The same has been disclosed under the current year appropriation.

iii) Final Dividend of Rs 1/- per share (i.e. 10% on equity share of face value of Rs 10/- each) for the year ended March 31, 2010 was approved by the shareholders in Annual General Meeting held on September 27, 2010 and same was paid in the current year except for Rs. 61,021 lying in unpaid dividend account.

iii) Proposed Dividend of Re 1/- per share (i.e. 10% on equity share of face value of Rs 10/- each) for the year ended March 31, 2011 has been approved by the Board of Directors in the meeting held on May 27, 2011 subject to the approval of shareholders in Annual General Meeting. The Company has also transferred 2.5% of the current year profits to general reserves.

16. (a) The board of directors in its meeting held on May 27, 2011 approved buy back of Companys own share from the open market for a sum up to 10% of its paid up equity share capital and free reserves.

(b) The Board of Directors of the Company in its meeting held subsequent to year end on 5th May, 2011 approved the sale of its investments in the shares of its subsidiary company CR Retail Mall (India) Ltd for a consideration more than the cost of investments

17. a) The Company has during the year started commercial operations at LDA Lucknow, Ahmedabad and Chennai. Hence, current years figures are not strictly comparable with those of the previous year.

b) Previous years figures have been re-grouped where necessary to conform to current years classification.


Mar 31, 2010

A) The foreign currency loan from Network Foods International Limited, Singapore availed during the earlier year is secured by third charge over fixed assets and second charge on current assets of the company, subject to ceding of charge to be agreed by the companys banker.

B) Working Capital loans from State Bank of India and Bank of Baroda are secured by way of hypothecation of stock in trade, book debts and other current assets.

Segment Reporting:

The Companys operations predominantly relates to manufacture of chocolates, hence no reportable primary segment information is made. The secondary segment reporting of the companys revenues are as follows:

2. Claims against the Company not acknowledged as debts:

a) From Commissioner of Customs, Chennai in respect of Advance licences not fulfilled within the stipulated time though extension and clubbing of such licences have been allowed by the Licensing authority Rs1.80 Crores (Previous year Rs1.80 Crores).During the year the company has received order in favour of the company from Commissioner of Customs, Chennai Vide order No. 10404/2009 dt 23-12-2009.However the department has preferred an appeal before the appellate tribunal against the order issued by Commissioner Customs,(Seaport-Export)

b) From Directorate of Revenue Intelligence, Chennai in respect of alleged non fulfillment of export obligation for Rs.3.19 crore (Rs.3.19 Crore )

3. Contingent Liabilities in respect of:

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.36.63 lakhs (Previous year Nil)

(b) Counter Guarantees given to the Bankers in respect of guarantees furnished by them Rs.5.43 Lakh (previous year Rs.5.43 Lakh)

4. (c) Accrued and unpaid preference dividend Rs.861.09 Lakh (previous year Rs 787.12 Lakh)

A sum of Rs. 2,11,69,774 is over due for repayment under Sales tax deferment scheme. As the company is sick company and the reference is made to BIFR, it is proposed to request for the waiver of interest amounting to Rs.1,27,99,548 as on 31.03.2010 (Rs.89, 88,989 as on 31.03.2009), hence the same is not provided in the accounts.

5. Additional information pursuant to para 3 and 4 of part II of Schedule VI the Companies Act, 1956. A Licensed Capacity : Not Applicable

B Installed Capacity : As this is an integrated plant, with versatile product range, ascertainment of installed capacity is not possible

C Actual Production (MT) : MT 5,885.66 ( previous year MT 6,988.06 )

6. Figures in brackets represent previous year

7. Previous year figures have been regrouped / reclassified wherever found necessary in order to have conformity with the current year classification.

8. The company, being sick company within the meaning of clause (o) of sub section (1) of section 3 of Sick Industrial Companies (special provisions) Act 1985, was referred to Board for Industrial Finance and rehabilitation (BIFR). BIFR has declared the company as sick company and appointed State Bank of India as operating agency. State Bank of India has commissioned APITCO for viability study. APITCO has submitted its study to SBI wherein the study says that the companys operations are viable on the basis assumptions made by them. The State Bank of India is yet to file the rehabilitation scheme before the BIFR.