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PEN INDIA LIMITED ANNUAL REPORT

2016-2017

CONTENTSTABLE OF

CORPORATE OVERVIEW

STATUTORY REPORTS

FINANCIAL STATEMENTS

Corporate Information About Pen India LimitedOur JourneyBusiness OverviewAwards and AccoladesKey Strengths Future StrategyBoard of DirectorsCMD’S MessageFinancial Highlights

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Management Discussion and Analysis Board’s Report

23

30

Standalone Financial Statements - Independent Auditors’ Report

- Balance Sheet

- Statement of Profit and Loss

- Statement of Cash Flows

- Notes

Consolidated Financial Statements - Independent Auditors’ Report

- Consolidated Balance Sheet

- Statement of Consolidated Profit

and Loss

- Statement of Cash Flows

- Notes

- Form AOC-1

47

78

1Annual Report 2016-17

STATUTORY AUDITORS M/s. A. Bafna & Co., Chartered Accountants

BANKERS HDFC Bank LimitedYES Bank LimitedBank of MaharashtraState Bank of India

REGISTRAR & SHARE TRANSFER AGENTS Big Share Services Private LimitedE- 2, AnsaInd Estate, Saki Vihar Road, Andheri(E), SakinakaMumbai, Maharashtra-400072

REGISTERED OFFICE (Television Division)PEN INDIA LIMITED, PEN House, Asha ColonyJuhu Tara RoadJuhu, Mumbai-400049Investor Contact: [email protected]

CORPORATE OFFICE(PEN Studios)1101, B wing, Fortune TerracesOpp. Citi Mall & PVR ECX & Tanishq, New Link RoadAndheri (W), Mumbai-400053

DIGITAL OFFICE(Bollywood Times and Play My Movie)S-6 & S-9, Pinnacle Business Park, Shanti NagarMahakali Caves RoadAndheri (E), Mumbai-400093

CORPORATE IDENTITY NUMBER U72200MH2000PLC128481

CORPORATEINFORMATION

BOARD OF DIRECTORS

Mr. Jayantilal Gada Chairman & Managing Director

Mr. Dhaval GadaNon Executive Director

Mr. Akshay GadaNon Executive Director

Mr. Satish KaushikNon – Executive Professional Director

Mr. Javed AkhtarIndependent Director

Mr. Tilak Raj BajaliaIndependent Director

GROUP PRESIDENT – C&MA and GROUP COMPANY SECRETARYMr. Rajendra Kumar Haran

Pen India Limited2

Mr Jayantilal Gada began his entrepreneurial journey in 1984, in the media and entertainment industry with a video library called Popular Video Cassette Company. He subsequently ventured into trading video rights and distributing video cassettes across India, soon becoming the largest video library not just in India but also in Asia.

In 1992, the business was restructured under the name ‘Popular Entertainment Network’ and began to acquire video rights for movies to be distributed over various mediums such as video cassettes, satellites, terrestrial platforms etc. The Company subsequently forayed into theatrical and distribution rights of movies. PEN India Limited was incorporated in the year 2000.

Over the years, the company has successfully adapted to the changing trends in content consumption, by expanding into content aggregation and distribution for broadcasting on television platforms. It has been one of the most effective content aggregators for the broadcasting channel Zee. Between 2004 and 2016, the company aggregated more than 2,500 movies for a cumulative value of more than INR 3,000 cr. The company also has access to a diverse content library, which has been growing continuously with the addition of new releases as well as through catalogue acquisitions. This enables the company to distribute to platforms catering to a wide range of audiences. Over the years, PEN has become one of the largest independent content and rights aggregators of Bollywood movies in India.

The company further ventured into producing and co-producing Hindi and regional movies, which received much acclaim from the Bollywood fraternity and critics, and also yielded strong box office returns. The company focuses on partnering with the best creative producers and directors in the industry and promptly monetizing all movie rights primarily in the pre-release stage, thereby de-risking itself from the uncertainties of the movie production industry.

Gearing up for the next major growth spurt in the media and entertainment industry - which will primarily be fuelled by the growth of digital media platforms through mediums such as smartphones and tablets - PEN is setting up its own digital media platforms and will offer unique services at reasonable prices for Indian consumers.

OUR VISION“To consistently provide delightful and innovative entertainment experiences by engaging audiences and nurturing talent with current formats and technology”

OUR BUSINESSThe company is an established integrated media content house in India engaged in the following activities:• Movie production, acquisition & sale

of movie rights, theatrical & satellite distribution, as well as marketing of movies

• Intangibles & copyrights• Royalty & advertising• Consultancy in purchase of film rights

ABOUTPEN INDIA LIMITED

Between 2004 and 2016

2,500+

>3,000 Cr.Cumulative value (INR)

Movies Aggregated

For


JOURNEYOUR

Mr Jayantilal Gada started with a video library called “Popular Video Cassette Co” in 1983

1986-1990

1996-2000

1991-1995

Restructured Popular Entertainment Network Limited (PEN) and started dealing in copyrights of Hindi feature films vizvideo, satellite and doordarshan

Launched Audio CDs

Became Exclusive agency to ZEE for acquisitions of Hindi feature films for ZEE cinema

Launched TV production business and produced / producing Uddan, Dil Ki Batein Dil Hi Jaane, Rishton Ka Saudagar - Baazigar, Naamkaran and produced its first movie “Kahaani”

Trading of video rights & distribution of VHS tapes across India.

Launched VCD and DVD and formed PEN India Limited

Started an animation divisionand produced animation films like Krishna,

Raavan, Ganesh, Ghatotkach, Mahabharat etc.

Ventured into Digital Platforms, Induction of Mr Satish Kaushik

as Professional Director and Mr Javed Akhtar and Mr Tilak

Raj Bagalia as Independent Directors.

2001-2005

2011-2015

2006-2010

2016 - Till Date

COMPLETED

YEARS

1986

2016

Pen India Limited4

BUSINESSOVERVIEW

MOVIE PRODUCTION, CO-PRODUCTION AND DISTRIBUTION

PEN is primarily engaged in the production, co-production and distribution of Hindi movies. The company’s strategy is to monetise its movies early in the pre-release stage and de-risk itself from the uncertainties of the box office. The company has also ventured into producing and co-producing various regional films. It continues to expand its portfolio of companies under its banner PEN across Hindi and regional movies in Tamil, Telugu, Kannada and Gujarati languages. Pen Group has also expanded its production business to television serials and has successfully produced serials such as Udaan (Colors), Dil Ki BaateinDil Hi Jaane (Sony) and Rishton Ka Saudagar Baazigar (Life Ok) and Naamkaran (Star Plus).

FEW MAJOR MOVIES PRODUCED/CO-PRODUCED BY

THE COMPANY

Serial started on 16th August, 2014 on Viacom 18,

Colors at 8.30 pm Monday to Friday. Successfully

completed 818 Episodes upto 30th June, 2017

and still continuing.

Serial started on 12th September, 2016 on Star

Plus at 9.00 pm Monday to Friday. Successfully

completed 232 Episodes upto 30th June, 2017

and still continuing.

Produced byDhaval Jayantilal Gada

& Guroudev Bhalla


MOVIE AGGREGATION

Since its inception, PEN has diversified its business from solely being a video cassette library to trading video rights and distributing video cassettes, and subsequently to acquiring and distributing copyrights of Hindi feature films for video, satellite, terrestrial and other mediums The company continues to own rights to more than 500 films, more than 10,000 songs, 1,000 plus Digital films’ rights and more than 10,000 films’ data for digital.

Following our investment strategy in movie content acquisitions, we have closed various deals in the current financial year, the major ones being:• Exclusive perpetual dubbing rights for satellite movies of 150 South

Indian language movies which will convert into 1500 films• Remaking rights for titles such as Kahani, Chatrapati Leader, Nayak

Returns, Paiya, Aakhiree Rasta, Andha Khanoon, Chalbaaz and many others• Remaking rights for Mahabharat film and 139 episodes of Mahabharat

Katha television series for the next ten years• Fresh making rights for titles such as Gumnaam, The Game of Unknown,

S3 and Total Dhamaal

2004 Tarzan The Wonder CarAitraaz

2006 Phir Hera PheriVivah

2007 DhamaalWelcomeTare Zammen Par

2008 Rang Rasiya

2011 Tanu Weds ManuDon 2

2012 Kahaani

2013 Race 2Chennai ExpressSingh Saab The GreatMahabharat

2014 Main tera Tera HeroSholay 3DEntertainment

2015 Singh is Bling

2016 ShivaayKahaani 2Baaghi

2017 Commando 2MachineSingham 3 - Tamil

SOM

E M

OVIE

S RE

LEAS

ED A

ND A

CQUI

RED

BY P

EN

UPCO

MIN

G M

OVIE

S

UPCOMING MOVIES

HIND

I

REGIONAL

Aiyaary - Sidharth Malhotra and Neeraj Pandey (Wednesday, Special 26, Baby, M.S. Dhoni - Fame, Neeraj Pandey) Yamla Pagla Deewana 3 - Sunny Deol, Bobby Deol, Dharmendra - Super Hit series, last 2 parts and now directed by Navnit Singh

Total Dhamaal 3 - Ajay Devgn, Anil Kapoor - Super Hit series - Last 2 parts and now same director

Kahaani 3 - Super Hit jodi again for Part 3, Directed by Sujoy Ghosh only

Commando 3 - Vidyut, Vipul Shah, Reliance, PEN - Again for part 3

S3 - PEN made Tamil Super Hit with SURYA. And now in Hindi, this Brand gets more powerful with SUNNY DEOL; Directed by K. Ravi Chandran

Gumnaam - The Game of Unknown - PEN trying for this brand to also make it big for PEN, like KAHAANI. A Thriller, Directed by E. Niwas

Gujjubhai 2 - Gujarati - Siddharth Randeria, Again a super hit brand

Chitkaar - Gujarati - Super Brand Drama. Filming with Latesh Shah and Sujata Mehta

Sandakozhi 2 – Tamil - Super Brand name again. Vishal and Lingusamy

Kumki 2 - Tamil - Super Brand again. ELEPHANT MOVIE, Directed by Prabhu Solomon

Pen India Limited8

FEW MOVIES AGGREGATED/DISTRIBUTED BY PEN

BT is a multi-platform model available as a mobile app, website and on social media platforms such as Facebook, Twitter and Instagram. It is the first-of-its-kind digital platform for promoting movies as well as booking tickets for movies and for other Bollywood entertainment. The user-friendly interface on BT’s app and web platform provides a seamless booking experience. The interface allows users to:

• Search, select and book tickets for newly released movies in nearby theatres through the ‘In Cinema’ section

Bollywood Times (BT)

YouTube

DIGITAL MEDIA PLATFORMS

Launching Soon

Source: Google Play

1,000+

4.5Rating

Downloads

STILL ON DEMO

Pen Movies is available on the YouTube Platform and has more than 3.57 Lakh Subscribers

>3.57 LakhSubscribers


A COLLECTION OF MORE THAN 1,000 MOVIES, ALREADY

PMM is a digital platform that provides online video-on-demand services. Through PMM, users can access a wide range of Hindi movies, regional movies in Marathi, Gujarati, Punjabi, Bengali and Bhojpuri, and global movies that are dubbed in various languages.

PMM is a pure play movie streaming platform, available via mobile (IOS and Android) and web platforms, with an option for the user to download content for viewing without an internet connection. Downloads are restricted to the mobile application. A few films will be free to watch; others will be available via subscription and also on a pay-per-view basis at very affordable rates so as to make this platform easily accessible to the mass market. PMM is developed and operated by Play My Movie Private Limited, a 100% subsidiary of Pen India Limited.

Play My Movie (PMM)

• Browse through an encyclopaedia of Bollywood Movies through the ‘BTDB’ section, which provides information such as movie trailers, star casts, producers, directors, synopses, release dates, etc

• Watch trailers and songs from upcoming movies in the ’Trending Now’ section

• Read exclusive movie reviews, celebrity interviews, latest trends, top news and more information about films in the ‘BT News’ section

Launching Soon

A DIGITAL PLATFORM THAT PROVIDES ONLINEVIDEO-ON-DEMAND SERVICES

NEWSMOVIE

TICKETS

TRENDS

TRIVIA

ALREADY BUILT A DATABASE OF MORE THAN 10,000 FILMS


M Tunes • M Tunes will cater to all music lovers with latest and the best

Bollywood songs in all their glory and in HD quality too.

• M Tunes, with its high-energy packaging will make each song sound more beautiful.

• M Tunes understands music better and its perfectly matched mood-mapped songs promises to match and enhance the viewer’s experience.

• M Tunes is the most sought after prime time music channel by Bollywood and Music industry.

BT News • BT NEWS, Bollywood’s only news TV channel that will pick

up issues and subjects that have been unexplored and all this in its trademark witty style.

• BT News, in its bold and daring red and white packaging, will provide its own unique perspective of Bollywood, as never seen before on Indian television.

• BT NEWS believes in being ahead of the competition by knowing and dishing out the latest news before anybody else.

iLove• iLove, a music TV channel that captures eternal love in all its

forms across generations of Bollywood movies.

• iLove boasts of the largest collection of love songs ever to have been contained in one TV channel. Ranging from the exquisite melodies of the 60s’ to the energetic and playful romantic songs of 70s’ and 80s’ to more recent soulful renditions of love.

• Each song on the channel has been lovingly handpicked and placed in the playlist. The older song visuals have been restored passionately to their former glory and the sound remastered to match modern viewing technology making it a television experience never created before in India.

ENTERING SOONFOR SHOWCASING PEN’S MOVIEIN A BETTER WAY.

Pen India Limited12

AWARDSAND ACCOLADES

Kutch Shakti Entertainment Award

Jago Vagad Awareness Award

Dhirubhai Ambani Memorial Award - 13th Annual Gujarati Screen & Stage Awards

Gauravvanta Gujarati AwardInternational Creative Arts Society

GIFA Golden Award Gujarati Iconic Film Awards

2001

2011

2013

2016

PRESTIGIOUS AWARDS RECEIVED BY

MR JAYANTILAL GADA


Sr.No.

Award Year of Award Category Recipient

1 South Asian Rising Star Film Awards (SAIFF)

Sep-12 Best Screenplay Sujoy Ghosh

2 Fiji International Film Oct-12 Best Film Kahaani

3 Big Star Entertainment Dec-12 Best Thriller Kahaani

4 ETC Business Awards Jan-13 Surprise Hit of the Year Kahaani

5 Zee Cine Awards Jan-13 Best Film (Jury) Kahaani

Best Actress Vidya Balan

Best Director Sujoy Ghosh

Best Story Sujoy Ghosh

Best Editor Namrata Rao

6 Screen Awards Jan-13 Best Production Designer Kaushik Das & Subrata Barik


Best Sound Design Sanjay & Allwyn



7 Filmfare Awards Jan-13 Best Editor Namrata Rao

Best Cinematography Setu




8 Stardust Awards Jan-13 Best New Film Producer Sujoy Ghosh & Kushal Gada

Best Actress (Thriller) Vidya Balan

Best Supporting Actor (Male) Nawazuddin Siddique

9 Mirchi Music Awards Feb-13 Best Background Music Clinton Cerejo

10 Apsara Awards Feb-13 Best Actress Vidya Balan


Best Screenplay Sujoy Ghosh


11 Gujrati Screen Awards Mar-13 Special Awards for Kahaani Dhaval Gada & Kushal Gada

12 National Awards Mar-13 Best Original Screenplay Sujoy Ghosh


Special Jury Award Nawazuddin Siddique

13 TOIFA (Times of India Film Awards)

Apr-13 Best Editor Namrata Rao


Best Screenplay Sujoy Ghosh

14 IIFA Jul-13 Best Editor Namrata Rao


Pen India Limited14

STRENGTHSKEY

Since 1995, the PEN brand has been used by the company for various media-related activities, including their video rental business, content aggregation, content distribution, home video distribution and content creation. This gives the PEN brand considerable and constant media visibility. The group has been in existence for over three decades.

The company has a diverse content library, which has been growing continuously with the addition of new releases as well as through catalogue acquisitions. This enables the company to distribute to platforms catering to a wide range of audiences. Further, the company is also expanding its library beyond filmed entertainment content to various types of content such as special interest, music, devotional and MVAS content, among others. This has helped the company to diversify its revenue mix.

The company has a strong presence in various distribution platforms such as television, home entertainment, digital new media and other media. The company has an extensive distribution network, which is its key strength and gives it a sustainable competitive advantage. The company’s distribution reach is a key advantage, giving it the ability to offer entertainment ’anytime, anywhere’ to its consumers. This also gives the company a direct insight into consumer preferences and consumption patterns across platforms, enabling it to further cross-leverage these insights.

The promoters and business management group are experienced within their respective specialized segments, as well as in the entertainment industry. The main promoter Jayantilal Gada has with over 30 years’ business experience and has essayed a prominent role in the growth and development of the business and the PEN brand. The company’s management team comprises senior professionals who have vast domain knowledge and experience, having acquired and distributed content for several years. As a result, the company is well-positioned to focus on its continued expansion, and on strengthening its content library and distribution network.

As an established entity that is engaged in various aspects of the Indian entertainment industry, the company has created, maintained and built goodwill with other industry participants. This has led to repeated business transactions with known names in the industry for the acquisition of content as well as for content distribution to platforms such as Zee TV, Sony TV, Colors and Star Plus, among others.

1

3

5

4

2

Established and reputed brand name

Vast, diverse and growing content library

Diversified distribution platforms

Experienced promoters/directors and management team

Strong relationships in the industry


The overall strategy of the group is structured on its content library and its ability to successfully monetize the same through diversified platforms across the world. The strategy is designed to address predictability, scalability and sustainability, ultimately resulting in profitability.The key elements of the group’s strategy are as follows:

PEN’s vision is to be a leading entertainment content aggregator by acquiring content that it can exploit over various existing and emerging distribution platforms. Guided by entertainment consumption patterns and return on investment, the company’s strategy is to focus on acquiring additional content as follows:

Perpetual rightsThe company’s aim is to own the complete intellectual property rights of a film by acquiring perpetual rights, as well as, to monetize these over a maximum number of distribution platforms. This will contribute to the long term sustainability of the company’s business model.

Television broadcast rights and new media rights including music-based rightsOver the last few years, television has emerged as a key monetization medium for films. Hence, the company’s strategy is to further strengthen its competitive advantage by building on and augmenting its aggregation rights for television broadcasts, and to further leverage its portfolio approach.

Remake Rights owned by PEN

Hindi RegionalAakhiree Rasta ChatrapathiAndha Khanoon LeaderChalbaaz PaiyaEk Hi Bhool Pandiya NaduJohn Jani Janardhan Vidiyum MunnSansaar Endrendum PunnagaiMaang Bharo Sajna KirumiKahaani Moodar KoodamNayak Returns Thamizuka En Ondrai A

Fresh Making Rights owned by PEN

Gumnaam - The Game Unknown S3Total Dhamaal

Over the last few years, television has emerged as a key monetization medium for the distribution of films. The company believes that this will lead to better monetization of content, resulting in more demand and increased revenue for content shared via the television platform. The company intends to broad base its revenue streams by further increasing its distribution of content through new media avenues, such as MVAS, internet and video on demand services platforms. The company believes that increasing volumes of internet and mobile phone subscribers, combined with the growth of internet and mobile bandwidth, will be key growth drivers and will help the company to diversify its revenue streams, while also monetizing its content library.

As non-theatrical revenues gain more importance, the company believes that its vast and diverse content library will allow it to monetize satellite licensing, digital new media licensing and home video distribution more efficiently as the company will be able to aggregate and package several films together, instead of monetizing each title on an individual basis.

Managing the monetization of content across various distribution platforms over its lifecycle is a crucial aspect of the company’s strategy to enhance profitability and generate revenue.

STRATEGYFUTURE

Scaling up the content library by driving return-on-investment

Enhancing monetization of the content library through existing and emerging media platforms

Enhancing revenue predictability through strategically packaged sales

Optimizing content monetization across its lifecycle

Pen India Limited16

He has over 30 years of experience in the entertainment industry and has been associated with the company since its inception. He has successfully led the company through the transition from video, audio and terrestrial to satellite and now digital. He started his journey by operating a video library shop named Popular Video Cassette Library at Lamington Road, Mumbai. By 1992, Popular Video Cassette Library was restructured into Popular Entertainment Network Limited, and the PEN brand was created. He then ventured into supplying Hindi feature films to Door Darshan (DD). In the early 1990s when the private television channels took off in India, he became the leading distributor for all major networks, including Zee, Sony, Sahara and Star, among others. In 2004, Zee Entertainment Limited approached Mr. Gada to provide consultancy services to exclusively purchase TV and broadcasting rights for movies, for their channels owing to his business acumen, astute judgment and deep knowledge of the movie industry. By 2011, Mr. Gada was involved in movie production and co-production, and had produced the Hindi movie Kahaani, which was a great success and received numerous awards and accolades.

Aged 28 years, Dhaval Gada is an entrepreneur, and Indian films and television producer. He is the son of Jayantilal Gada, the founder and promoter of PEN India Limited and PEN Group. He has more than nine years of experience in the business of producing television serials. He joined top management of PEN India Limited on November 3, 2014, becoming one of the youngest producers in the Bollywood film industry. Mr. Gada has since produced and co-produced several well-known films under the PEN banner, including Singh Is Bling, and Kahaani. Besides playing an active role in PEN India’s top management, he also entered the television industry in 2014 with Udaan, which recorded the highest TRPs on Colors. He has also produced daily soaps like Dilki Baatein Dil hi Jaane and Naamkaran. Mr. Gada’s passion for the Bollywood industry is even seen on digital platform through the planned launch of his own app Play My Movie.

Akshay Gada, aged 20 years, began his career in the movie industry under the guidance of his father Jayantilal Gada and his older brother Dhaval Gada. He started out by actively participating in the production of the company’s movies. At the young age of 19, he founded and developed his own complete entertainment digital portal called Bollywood Times. He aspires to direct films someday.

DIRECTORSBOARD OF

MR. JAYANTILAL GADA Chairman & Managing Director

MR. DHAVAL GADA Non-Executive Director

MR. AKSHAY GADA Non-Executive Director


Satish Kaushik is a graduate from the prestigious National school of Drama, New Delhi and subsequently studied at the Film and Television Institute of India in Pune. A renowned Indian film director, producer and actor in Indian theatre and the Hindi film industry, he started his career as an assistant director to Shekhar Kapoor for the film Masoom. His first film as a director was Roop Ki Rani Choron Ka Raja (1993). He has directed many other movies such as Prem, TereNaam, Mujhe Kucch Kehna Hai, Hum Aapke Dil Mein Rehte Hain, Hamara Dil Aapke Paas Hai and Milenge Milenge. He has acted in over a hundred films such as Mr. India, Ram Lakhan, Saajan Chale Saural, Haseena Maan Jaayegi and Chhote Miyan Bade Miyan. He also co-wrote and anchored a television countdown show named Philips Top Ten, for which he won the Screen Videocon Award. His latest TV Show Sumit Sambhal Lega won him much appreciation. His foray into international cinema includes Sarah Gavron's Brick Lane and Dev Benegal's Road Movie. He recently turned RJ and his programme Filmy Calendar Show is a tremendous success on 91.9 Radio Nasha. He is a director in Delhi Film Council and other private sector companies.

Javed Akhtar is the son of the legendary writer and poet Jan Nissar Akhtar. He born in Gwalior, schooled in Lucknow, and graduated from Saifiya College in Bhopal. Mr. Akhtar is a legendary poet, lyricist and screenwriter in the Indian film industry. He was awarded the civilian honour of Padma Shri by the Government of India in 1999, followed by the Padma Bhushan in 2007. In 2013, he received the Sahitya Akademi Award in Urdu, India's second highest literary honour, for his poetry collection Lava. He has also won five National Film Awards and eleven Filmfare awards for his work as a lyricist and dialogue writer. Out of the 24 films he wrote with Salim Khan, 20 were hits. Some of his hits include Andaz, Seeta Aur Geeta, Zanjeer, Deewar and Sholay. Mr. Akhtar was a member of the Rajya Sabha, the upper house of the Indian Parliament from 2010-16. He is a Director in Indian Spinal Injuries Centre and many private sector companies.

Tilak Raj Bajalia is a commerce graduate and member of The Institute of Cost & Works Accountants of India. He served as a Deputy Managing Director at Small Industries Development Bank of India from October 4, 2012 to December 31, 2013 and was Executive Director of IDBI Limited. Mr. Bajalia served as the Head of SME Vertical. He has been associated with CII and FICCI for the development and growth of SMEs. He started his banking career in 1974 at Bank of India and joined IDBI in 1983. He served as a Director of Small Industries Development Bank of India since 2009 and a Member of the committee constituted by Reserve Bank of India for restructuring cases with exposure of less than INR 100 million. Mr. Bajalia is a director in many private sector companies.

MR. SATISH KAUSHIK Non-Executive Professional Director

MR. JAVED AKHTAR Independent Director

MR. TILAK RAJ BAJALIA Independent Director

Pen India Limited18

MESSAGECMD’s

I am delighted to write to you at the end of what has been a very satisfying financial year for Pen India. I express my gratitude for your consistent support and encouragement throughout our journey.

Our journey began as a small video cassette retail shop, way back in 1983. Over the years, the group has successfully adapted to changing content consumption patterns by expanding into content aggregation and distribution for broadcasting on television platforms, and production and co-production and distribution of Indian movie rights, as well as by foraying into the digital space. Today, we have evolved into one of the largest and well-diversified Media & Entertainment (M&E) corporate groups. I believe that we were able to come to this far on the back of our three decades of experience in the M&E industry, as well as our ability to gauge the pulse of the masses throughout the years and pick out correct content at competitive costs. We are also supported by our strong understanding of the industry’s dynamics and our willingness to move ahead with the changing times and industry dynamics. We have longstanding established relationships across the M&E industry.

The M&E industry has been undergoing a rapid transformation over the last few years, with the beginning of new era of digitization. Indian theatrical revenues are increasing at a fast pace, driven by increased footfalls and higher average price of tickets. In movie production and distribution, Pen India continued to drive higher growth backed by the industry’s demand for fast-growing multiplexes and digital platforms. We have continued our strategy of expanding our movie content library and investing in quality content. India is currently witnessing a digital revolution, with content consumption increasing multi-fold across platforms. We are well positioned to benefit from the rapidly growing M&E industry.

Digitization has been disrupting conventional business models in every aspect of the M&E industry and, in the process, creating many opportunities. The ever-widening reach of


mobile internet, lower internet tariffs, continued penetration of affordable mobile devices and the increased availability of smart devices at affordable rates are bringing more consumers across the country into the digital age. All these trends continued to drive the shift in consumption to digital platforms. Audiences are clearly looking beyond traditional media and this trend, we believe, is here to stay. The core mantra of the M&E industry remains unchanged – entertaining the masses.

This digital revolution augurs well for our digital platforms, namely Play My Movies (mobile app for providing online video-on-demand) and Bollywood Times (mobile app for providing online ticketing, movie promotion and Bollywood news), which are both our wholly-owned subsidiaries. We believe that we are well poised for a phase of repaid growth in our digital business in the coming years.

Our company’s operations were focused on distribution of films across theatrical, television and digital channels, along with monetization of our content library. The financial year 2016-17 was indeed eventful for our company. Our company’s total income for the year was INR 153.01 cr compared to last year’s INR 146.43 cr. Our Profit After Tax was INR 18.06 cr against last year’s INR 12.34 cr, clocking 46% growth in our YoY profitability. This growth was primarily driven by another year of strong performance in our movie production, and distribution and sale of rights businesses. We also closed the year with record EBITDA margins of 22%. India’s high GDP growth rate along with rapidly-growing disposable incomes, presented a great opportunity for growth in the M&E industry. With the exception of print media, all segment of the M&E industry are expected to grow at double digit rates for the next five years.

Equipped with a strong balance sheet, a large content library and our more than three decades-long standing in the M&E industry, we will continue to capitalize on new opportunities. I believe that our company has strong business visibility for the next few years and will leverage multiple monetization channels as facilitated by the digital revolution. We are ready to capitalize the strong growth opportunity presented by the M&E industry and hope to generate good top-line and bottom-line growth for next few years. I would like to thank you for your continued support and trust in the Pen Group. I would also like to thank our dynamic workforce who is the main reason for our success story. I remain grateful to all our stakeholders and assure you that we will continue our quest to build a wholesome family.

Thank you.

Yours sincerely,

Jayantilal GadaChairman & Managing Director

Pen India Limited20

FINANCIAL HIGHLIGHTSKEY CONSOLIDATED

REVENUE (Rs. In Lakhs)

PAT MARGIN (%)

NETWORTH (Rs. In Lakhs )

FY17FY16FY15FY14FY13

15,300 14,642

9,628

5,783

1,228


10.9%8.4%

2.4%

5.7%

23.1%


4,960

3,203

1,9691,432

961

EBITDA MARGIN (%)

EPS (In Rs.)

RoCE (%)


12.6%

12.6%

7.0%11.1%

38.5%


119

88

17

3328


26.6%

17.3%21.6%

15.7%

26.2%

PEN IS EXCLUSIVE RIGHT HOLDER TILL 31ST DECEMBER, 2030.


ANALYSISMANAGEMENT DISCUSSION AND

GLOBAL ECONOMY OVERVIEW

The global economy is in the midst of a decade-long slow growth environment, characterized by an imminent productivity growth crisis. The looming labour shortage in mature economies and skill deficiencies in emerging markets will further add to the challenges of global economic prospects. Global financial markets continue to face elevated levels of uncertainty, notwithstanding the resilience to the outcomes of the Brexit referendum and the US election.

Global growth is expected to be 3.5% for 2017. The US has led this improvement by growing at 2-3%. Fiscal easing is also likely under the Trump administration. Europe’s growth forecast is 1.5%, which is consistent with the gradual improvement in the labour market. Japan’s growth rate is in the range of 1% due to a weakness in its demographics and a decline in its working age population. China is expected to grow by 6.5%; long term concerns remain due to the continued rapid debt growth, which has a potential for financial weakness. Growth is projected to pick up from 2017 onwards, almost entirely on account of developments in emerging markets and developing economies. This primarily reflects two factors: the gradual normalization of macroeconomic conditions in several countries experiencing deep recessions and the increasing weight of fast-growing countries in this group, in the world economy.

INDIAN ECONOMY OVERVIEW

The Indian economy has been performing well despite the impact of demonetization. While the GDP in FY17 grew at 7.1%, it is further expected to grow above 7% in FY18. Incomes have risen at a brisk pace in India and will continue rising given the country’s strong economic growth prospects. Nominal per capita income have recorded a CAGR of 8.87 % over 2000–15. Rising incomes and the consequent positive impact on the consumer base across

the country will be the key growth driver for the entertainment industry. As the proportion of working age population in the total population increases, the GDP is expected to grow higher. Per capita income is expected to expand at a CAGR of 5.6 % for the period 2010-20

The introduction of GST and the recent demonetization programme are likely to boost the country’s GDP. Despite some delays in domestic policy reforms and enduring fragilities in the banking system, investment demand is supported by the monetary easing cycle, rising FDI, and the government’s efforts in infrastructure investments and public-private partnerships. Economic activity is beginning to firm after demonetization shocked the economy, resulting in massive cash shortages and economic disruptions at the end of the last year. The manufacturing PMI crossed into expansionary territory in January 2017, and imports rebounded. Despite the backdrop of more moderate growth, the government stuck to a market-friendly budget for FY 2017. The budget pursued growth-supportive policies while targeting a narrower deficit of 3.2% of GDP, and was met with a positive market reaction.

MEDIA AND ENTERTAINMENT INDUSTRY

With more than 800 television channels, 100 million pay-TV households, 70,000 newspapers and 1,000 films produced annually, India’s vibrant M&E industry provides attractive growth opportunities for global corporations. The Indian M&E sector is poised to grow from INR 1,157 billion in 2015 to reach INR 2,260 billion by 2019, at a CAGR of 14.3% – a growth rate that is more than three times that of the global M&E industry, which is expected to grow at 4.4%.

FY20FFY19F

FY18FFY17F

FY16EFY15

FY14FY13

FY12FY11

FY10

2402

.4

2207

.6

2026

.7

1874

.9

1747

.5

1581

.6

1576

.8

1456

.2

1444

.3

1455

.7

1387

.9

0

500

1000

1500

2000

2500

3000

-2%0%2%4%6%8%10%12%

RISING PER-CAPITA INCOME IN INDIA (USD)

Pen India Limited24

In FY16, the Indian M&E industry registered growth of 9.1% over 2015 & reached USD 18.7 billion, in terms of value. During 2015-20, the industry is expected to grow at a CAGR of 14.33% from 2015-20 with the market expected to reach to USD 35.2 billion by 2020.

The next five years will see digital technologies increasing their influence across the industry, leading to a sea change in consumer behaviour across all segments The entertainment industry is projected to be worth more than USD 62.2 billion by FY25.

The entertainment industry continues to be dominated by the television segment, with the segment accounting for 44.24% of revenue share in 2016, which is expected to grow further to 48.56% by 2020.

Television, print and films together accounted for 79.54% of market share in 2016, in terms of value. In 2016, total spending on advertising across all media across the Indian entertainment industry stood at USD 7.85 billion, which is expected to touch USD 8.1 billion in 2016. Print was the largest contributor, accounting for 39.9% of the advertising share in 2015 and is projected to be 37.3% in 2016.

Advertising revenue is expected to touch USD 14.8 billion by 2020, growing at a CAGR of 9.76% between 2011 and 2020. Print media and television contributed for 76.2% of total revenue from advertising in 2016. Television advertising generated USD 2.99 billion in revenue in 2016. Mobile advertising has emerged as the third-largest advertising medium in India after television and print advertising. Spending on mobile advertising in India is expected to grow to USD 1.53 billion by the end of 2018.

Apart from the impact of rising incomes, the recent widening of the consumer base will also be aided by the expansion of the middle class, increasing urbanization and changing lifestyles. The entertainment industry will benefit from a continued rise in the propensity to spend among individuals; empirical evidence points to the fact that a decreasing dependency ratio leads to higher discretionary spending on entertainment. Traditionally, only advertising has been a key source of revenue for the M&E industry; in recent times, however, revenue from subscriptions and value-added services has also contributed significantly.

SIZE OF MAJOR INDUSTRY SEGMENTS

ADVERTISING REVENUE SHARE

SIZE OF MAJOR INDUSTRY SEGMENTS

MARKET SIZE (USD Bn)

0

10

20

30

40

50

60

70

FY25PFY20P

FY19PFY18P

FY17PFY16

FY15FY14

FY13FY12

FY11FY10

FY09FY08

-0.2-0.10.00.10.20.30.40.50.60.70.8

FY16

14.4

12.7 13

.7 16

17.5

16.9

17 18 18.7

7 23.4

26.9

30.9 30

.9 62.2

2020P

2016

2016


With consumers willing to pay for content and extra services, the subscription segment will play an important role in the post-digitisation era.

The implementation of GST is likely to streamline multiple incidences of taxes that are currently being levied by both the central and state governments. While the introduction of GST is likely to have varied levels of impact across various media segments, the M&E industry is expected to be a net beneficiary. This is primarily due to the availability of input credits across the board and the inclusion of entertainment tax within the ambit of GST.

Government policy and initiatives have had a significant impact on the M&E industry. Implementation was a challenge, resulting in few glitches in the medium term. Demonetization resulted in a reduction in discretionary spending on marketing and advertising, which affected the M&E industry. Advertising revenues across print, television and radio were impacted to a great extent. Cinema halls, in particular single screens and live events, were also affected. However, the impact will not be felt for a longer period of time. The consumption and advertising demand has increased since, and spending levels are expected to bounce back.

In the long run, the widening of the tax base and formalisation of the economy could yield a positive impact on the country’s GDP and advertising spends.

INDIAN FILM INDUSTRY

The Indian film industry is the largest in the world in terms of the number of films produced, with around 1,500 to 2,000 films produced every year in more than 20 languages. The industry also received the second-highest footfalls in the world in 2015 (over 2.1 billion) following China (almost 2.2 billion). Despite

the large number of films and theatre admissions, the industry continues to be a minor player as compared to global industries in terms of revenue.

In India, the film industry’s gross realization stands at USD 2.1 billion versus gross realization of USD 11 billion in the US and Canada which produces a significantly lower number of films (approximately 700 films). This is mainly due to low ticket realizations and occupancy levels, lack of quality content and rampant piracy. Overall, the industry is projected to grow at a CAGR of 7.7% until 2021, to encompass a net worth of INR 206.6 billion. The key growth drivers are expansion of multiplexes in smaller cities, investments by foreign studios in domestic and regional productions, the growing popularity of niche movies, and the emergence of digital and ancillary revenue streams. The domestic box office contributes the majority of revenue, representing 70% of the total industry.

Revenues (INR Billion)

2012 2013 2014 2015 2016 2017p 2018p 2019p 2020p 2021p 2015-16 (YoY

growth)

CAGR 2016-2017

Domestic Theatrical 85.1 93.4 93.5 101.4 99.8 106.6 111.8 117.9 124.2 131.2 -1.60% 5.60%

Overseas Theatrical 7.6 8.3 8.6 9.6 10.9 11.8 12.5 13.4 14.3 15.3 14% 7.20%

Home video 1.7 1.4 1.2 1 0.9 0.8 0.7 0.6 0.6 0.5 -13% -11.20%

Cable & Satellite Rights 12.6 15.2 14.7 15.9 15.3 16.2 17 18 19.1 20.2 -4% 5.70%

Ancillary Revenue streams 5.4 7 8.4 10.2 15.5 19.6 23.9 28.3 33.4 39.4 51% 20.60%

Total 112.4 125.3 126.4 138.2 142.3 155 166 178.2 191.6 206.6 3% 7.70%

FILM INDUSTRY PERFORMANCE

Pen India Limited26

Cable and Satellite (C&S) rights contributed 11% of the overall industry revenue in 2016. However, this segment witnessed negative growth of 4% from INR 15.9 billion in 2015 to INR 15.3 billion in 2016. This can be attributed to a steep decline in the C&S rights market of Tamil and Telugu movies.

The Indian film industry is dominated by Bollywood, the Hindi film industry, which contributes 43% of its revenue. Regional and international films contribute the remaining 50% and 7% respectively. Within the regional film industry, Tamil and Telugu are the largest segments comprising approximately 36% of net box office revenues followed by Bengali, Kannada and Malayalam films. Currently, the international films segment is small but growing, driven by rising numbers of English and other foreign-language speakers, as well as rising numbers of dubbed international movies being released across the country.

The inconsistency of quality content is another reason for the poor performance of films as a medium in India. In 2016, Bollywood raked up a sum of INR 37 billion from 225 movies. However, the catch is that only 50 films contributed 96% of the total box office share. Demonetisation was held responsible for the poor performance of the industry in the last couple of months of 2016. However, the Aamir Khan starrer Dangal proved that convincing stories and organic content will always evoke the passion of theatre-watchers, irrespective of other factors.

In India, theatre ticket sales comprise roughly 70% of the total revenue; however, the decreasing number of screens is eroding this number. The shutting down of single-screen theatres and the inadequate presence of multiplexes in the country can be a major setback to the medium. The density of screens in India is as low as eight per million viewers, with the majority of screens being present in urban and semi-urban areas. CY2017 is expected to see domestic theatricals recovering from the impact of demonetisation. Films, especially regional films, which deferred their release dates to 2017, are likely to contribute to 2017 revenues, supplementing the originally-planned releases. The

multiplex industry is projected to add screens at a similar pace (150-200 screens per annum) while single screens are likely to recover from the prevailing drop in occupancy levels.

Overseas revenue has been aiding the film industry. A considerable 8% of the overall theatrical collection comes from the overseas markets. Southern films are key drivers in this regard. The US (30%), UK (20%) and Middle East (25%) are three prime overseas markets for Indian films. Over the next five years, this segment is expected to grow at a CAGR of 7%.

Several international film studios such as Warner Bros, Disney, Fox and Dreamworks, have not only set up distribution houses in India, but have also entered into partnerships with local film production houses through acquisitions and co-production agreements. For example: Walt Disney acquired a 50% stake in UTV and now has a controlling stake in UTV Software Communications. Viacom18, a JV between Viacom and Network 18, was the first studio model-based production house. Viacom18 engages in production, syndication, marketing and worldwide film distribution.

Additionally, a key example of collaboration is Fox Star joining hands with Dharma Productions, in a deal valued at INR 5,000 million. Fox has produced almost 30 Bollywood films, as well as a few Tamil and Malayalam language films. Local film production can leverage the experience of these international studios to expand their international reach and incorporate enhanced project planning and cost controls.

Impact of Digitization in Indian Film Industry

Digitization of movies enables wider distribution of films across various regions and curbing piracy. Key benefits of digitization can be witnessed across the value chain:

Film-makers: Digital printing costs 80% less than conventional printing, allowing producers to scale up to five times the number of screens than originally allowed by the same budget. Due to this, digitization has enabled the penetration of content to smaller cities and towns. In the current scenario, over 60% of box office collections are realized in the first week of a movie’s release. Increased penetration, simultaneous release across theatres and front-ending of revenue has resulted in a drastic increase in the number of films generating over INR 1 billion in box office revenues.

Distributors and exhibitors: Digitization of content has resulted in the reduction of costs incurred during physical transportation and print manufacturing. Digital content is delivered by way of satellite or hard drives, adding convenience and cost-effectiveness to the process. Nearly all theatres have adopted digital technology, resulting in a shift from large-sized projection systems to smaller and more efficient digital projection systems. Although digital projection systems involve a heavy initial investment, the running costs as compared to analogue are minimal.

BOX OFFICE REVENUE SPLIT BY LANGUAGE


Consumers: Digital projection in cinemas enables superior quality of images, which is also not subject to deterioration with the passage of time. It has given viewers access to technologies such as VFX, animation and 3D films. Digital cinema has also helped in addressing piracy. With the advent of digital technologies, piracy of films and songs has decreased tremendously. With digital distribution, movies are released on the same day in all places and checks can be kept on where movies are showing and how many times they are screened – this results in a tremendous reduction in the scope for piracy.

TELEVISION INDUSTRY

The television industry grew by 8.5% over 2015 and the size of the television industry was INR 588 billion in 2016. It is expected to register a CAGR of 14.7% and touch INR 116 billion by 2021. Television had a steady run in 2016, with another year of double-digit growth, despite headwinds on account of demonetisation.

The growth in subscription revenues was affected by the slow pace of digitisation and Average Revenue per User realisations from the addressable C&S base. Television advertising was stable at 11% growth in 2016; there was strong support for sports properties such as IPL and T20 cricket World Cup. This growth was also supplemented by the launch of 4G services in the second half of the year.

Indian television viewership continues to be dominated by the general entertainment genre, with Hindi and regional GECs leading the way. The viewership share of GECs was in the range of 55-60% in 2016, following a similar growth rate of 58% in 2015. The movie genre accounted for 22-25% of viewership share in 2016, which was slightly higher than 2015’s 20% share. Hindi movies accounted for the bulk of viewership.

The emergence of Free to Air channels as a major source of reach and viewership has the potential to translate into a large advertising market in the future. However, this comes at a risk of cannibalizing subscription revenues. Even though factors such as slow consumption pickup, Broadcast Audience Research Council (BARC) data recalibration and 2016’s demonetisation programme brought down advertising spends, this blip is not likely to last beyond 2017.

Looking ahead to 2017, advertising revenues are likely to experience similar growth levels as in 2016, on account of the first quarter impact of demonetisation and the Indian economy recalibrating to GST later in the year. The long-term forecast for advertising growth remains robust at 14.4% CAGR over 2016-21, on account of economic fundamentals remaining sound and India continuing to remain a mass-market consumption story. On the subscription growth front, the intent behind TRAI’s tariff and interconnect guidelines could help in alleviating certain issues, combined with the inevitable although delayed completion of digitisation, leading to a projected 14.8% CAGR over 2016-21.

There has been a paradigm shift in the overall operations of the television sector due to the on-going cable digitisation; however, constant delays in the supply of Set-Top-Boxes, seeding and challenges pertaining to addressability, gross billing, per subscriber billing and roll out of packaging, remain a major concern amongst stakeholders. It is now expected that digitisation will largely be completed in CY2017, with related benefits flowing through at a slow pace, based on historical indicators.

Due to demonetization, advertising revenues were impacted across television, print and radio. As per estimates, annual advertising growth rates for television, print and radio were adversely impacted by about 1.5-2.5%. However, the impact of demonetisation was short-lived, as since January 2017, there has been an upswing in consumption and advertising demand. However, spend levels continue to remain lower than in the same period of the previous year. As customers are increasingly adopting e-payment options, demonetisation will have a positive impact on companies in the long run. It will reduce cash collection overheads and bring down bad debts. In the next six to eight months, major DTH operators are envisaging e-payments contributing majorly to their recharges and collections.

The long-term forecast for advertising growth in the television industry remains robust at 14.4% CAGR over 2016-21, due to strong economic fundamentals and India remaining a mass market consumption story. On the subscription growth front, the intent behind TRAI’s tariff and interconnect guidelines could help to alleviate some of the issues, combined with the inevitable though delayed completion of digitisation, leading to a projected 14.8% CAGR over 2016- 21.

TV INDUSTRY SIZE (INR Bn)

Pen India Limited28

BARC (Urban and Rural) data was available across the entire 52 weeks for the first time in 2016. BARC also introduced the metric of ‘000 Impressions in January 2016, as a measurement tool for viewership. The coverage of rural viewership by BARC opened up several new marketing opportunities for broadcasters and advertisers in 2016. Ratings pushed Free-To-Air GEC channels of the top broadcasters, along with DD National, to the top 10 category. This has resulted in ad rates for these channels increasing by about 50-70% during the year. Free-to-Air channel launches were broad-based, covering Hindi movies, news (Hindi and regional), music and even children’s programmes at the end of the year. A YoY comparison shows a rise in TV impressions and the average time spent in rural India by 30% and 26% respectively. This is higher than the overall growth in TV impressions of 24% and average time spent of 21%.

DIGITAL MEDIA

Good broadband speeds are essential for consumers to have a rich internet-based experience. The average broadband speed in India is 4.1 mbps (3Q-2016), which has marked a 62% increase YoY. The broadband (4 mbps) adoption (IPv4) in India is at 30%, representing a 116% YoY change. Parallely, the adoption of IPv6 internet protocol is improving in India, which creates the necessary infrastructure to connect more devices, support higher speeds, increase security of communication and reduce latency. As of 2016, IPv6 adoption in India was at 16.4%. How fast telecom companies are able to transition to this new protocol will lay down the foundation for the adoption of new age technology such as Internet of Things.

The number of wireless users in India is likely to cross 389 million in 2016 and reach 969 million in 2021, and 4G connections are expected to grow five-fold from 2016 to 2021 at a CAGR of 38%. The number of 3G connections is expected to surpass 2G connections by 2019. Further, 3G and 4G connections are expected to represent 80% of overall connections by 2021, up from 25% in 2016.

With increasing accessibility and the affordability of smartphones, users are increasingly consuming content through their phones. The number of internet-enabled mobile phones crossed 300 million in 2016 and is expected to touch 700 million in 2021. The penetration of mobile devices in India is growing steadily; mobile remains the primary device to cater to Indians’ digital needs. A digital customer’s appetite for rich content, especially video, continues to grow on the go, requiring higher bandwidth. The rate of growth of 4G networks will be multi-fold as compared to the growth in wired connections and Wi-Fi access. Mobile video traffic is expected to grow 11.5 times during 2016-21 at a CAGR of 63%, and the number of video-capable devices and connections is expected to grow 2.2 times between 2016 and 2021, crossing 800 million.

Digital advertising was marginally impacted by demonetisation, but continued its growth trajectory with 28% growth in 2016 and contributed 15% of overall advertising revenues. With a rapid increase in internet penetration, advertisers’ interest has also increased to match the continuing shift in consumption towards

DIGITAL ADVERTISEMENT SPEND (INR Bn)

BROADCASTER INDUSTRY SIZE (INR Bn)


digital media. The launch of Reliance Jio provided an added impetus as data costs have been falling. Digital advertising is expected to grow at a robust CAGR of almost 31% between 2016 and 2021, to emerge as the fastest-growing segment in the M&E industry. Also, the digital advertising industry will contribute more than 27% to total advertising spends. The mobile advertisements spend is expected to grow from INR 16.9 billion in 2016 to reach INR 132 billion in 2021 at 50.9% CAGR.

With improved network, better access to internet and smart mobile devices, digital platforms are expected to drive more media consumption.

The Government of India, through its umbrella Digital India initiative, continues to invest and drive several digital initiatives to improve the digital infrastructure and digital ecosystem of the country.

About 1,12,871 km of optical fibre cable has already been laid out under BharatNet for high connectivity. Mumbai is expected to be fitted with 1,200 Wi-Fi hotspots for free usage and Google is working with Railtel to provide free Wi-Fi at over 400 railways stations in the next few years. Bharat Sanchar Nigam Limited has also built over 2,500 free Wi-Fi hotspots across the country. The government’s initiative to connect remote parts of the country has boarded 8,621 villages already, and plans to onboard over 55,000 villages by 2019.

Today, video content dominates mobile internet usage and the same trend is likely to continue going ahead. Video is expected to represent 60% of the overall mobile data traffic and is expected to grow to 78% by 2021. Online video is part of the daily lives of 85% of mobile data consumers in India, who watch such content at least once a week; 39% of connected consumers watch online videos daily. Urban consumers have been early adopters of video, especially in the age group of 15-34, constituting 70-75% of the total internet base. With on-demand accessibility, aggressively-priced high speed 4G data services, and a latent demand for differentiated content, OTT Video on Demand services have seen an upsurge in the last year.

Sources:

https://www.conference-board.org/economic-outlook2017/

https://www.imf.org/external/pubs/ft/weo/2016/02/pdf/c1.pdf

https://www.ibef.org/download/Entertainment-June-2017.pdf

http://www.focus-economics.com/countries/india

ht tps://assets.kpmg.com/content/dam/kpmg/in/pdf/2017/03/FICCIFrames2017.pdf

Deloitte Report on The Indian Film Industry – Indywood September 2016

http://www.focus-economics.com/countries/india

INTERNET USERS (In Millions)

CONTRIBUTION OF CONSUMPTION CATEGORIES TO MOBILE INTERNET IN INDIA

2016

2021

Pen India Limited30

Dear Members,The Board of Directors hereby submits the report of the business and operation of your Company along with the audited financial statements, for the year ended 31st March, 2017. The consolidated performance of the Company and it’s subsidiaries has been referred wherever required.

1. Results of our operationsDuring the year under review, performance of your company as under:

(In Lakhs)

Sr. No.

Particulars Standalone Consolidated

Year ended31-03-2017

Year ended31-03-2016

Year ended31-03-2017#

1 Revenue from operation 14,679.07 13,723.01 14679.22

2 Other Income 621.93 919.93 620.53

3 Total Revenue (1+2) 15,301.00 14,642.94 15299.75

4 Expenses:

(a) Cost of Sales 11,392.76 12,375.28 11392.65

(b) Employee benefit expense 193.31 85.21 193.31

(c) Financial Costs 662.77 204.00 744.82

(d) Depreciation and amortization expense 37.45 30.81 70.59

(e) Other Expenses 400.59 332.51 418.32

5 Total Expenses 12,686.90 13,027.84 12819.69

6 Profit/(Loss) before exceptional and extraordinary items and tax 2,614.10 1,615.09 2480.06

7 Tax Expenses:

(a) Current Tax 876.40 522.14 838.67

(b) Deferred Tax (-)46.46 (-)0 .53 (-)45.18

(c) Short/(Excess) Tax Provisions for Earlier Years (-) 18.53 (-) 140.63 (-)18.54

8 Profit/(Loss) after tax 1,802.70 1,234.11 1705.11

Earning Per Equity Shares

(a) Basic 128.76 88.15 121.79

(b) Dilute 128.76 88.15 121.79

# Previous year figures not available since one years of consolidation activities

• Financial Review Over Company’s business involving the distribution of film across theatrical, television and digital channel. During the year under review, the Standalone Revenue from operations of the Company is Rs. 15301.01 lacs over the previous year’s Rs. 14642.95 lacs. However, your Company had a substantial growth of 46.07% over the previous year’s with a Net profit after tax of Rs.1802.70 lacs during the year as compared to net profit of Rs. 1234.11 lacs of previous year.

As per the Consolidated Accounts, the total revenue from operations is Rs. 15299.76 lacs as subsidiaries

Companies are yet to start commercial operation in full fledged manner.

A detailed discussion on the business performance is presented in the Management Discussion and Analysis Section of the Annual Report.

• AppropriationYour Company is in a phase of development where it is financially prudent to build up a healthy reserve base so as to serve as a source for meeting the financial requirements of the company for the effectuation of its plans in the years to come.

BOARD’S REPORT


It is keeping with this financial policy that your directors have decided to plough back the profits of the company into its business rather than declaring dividend for the financial year 2016-17. It is felt that a sound financial base in the Company would in the long run lead to improved share valuations, culminating into maximization of returns for the shareholders.

• Transfer to reservesNo amount is proposed to be transferred in reserves at the standalone level.

2. Particulars of loans, guarantees or investmentsLoans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

3. Fixed DepositsWe have not accepted any fixed deposits and as such, no amount or principal or interest was outstanding as of the Balance Sheet date.

4. Particulars of contracts or arrangements made with related partiesParticulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure 1 to the Board’s report.

5. Material changes and commitments affecting financial position between the end of the financial year and date of the report

• The Board at its meeting held on 27th May, 2017 has approve issue and allotment of 2,94,00,000 fully paid-up equity shares of face value of Rs.10/- each to the shareholders of the Company in proportion of 21:1 by issue of bonus equity shares by capitalization of Rs.29,40,00,000/- from the Securities Premium Account, General Reserves or any other permitted reserves/ surplus as per the Audited Accounts of the Company for the financial year ended 31st March, 2016 to the Equity Shareholders and consequently, the paid-up share capital of the Company increased from 14,00,000 Equity Shares to 3,08,00,000 Equity Shares.

• The Company existing paid-up share capital of 30,800,000 Equity Shares are registered with National Securities Depository Ltd vide ISIN INE644X01019 for dematerialization. Out of 30,800,000 Equity Shares, 14,00,000 are in dematerialized form and 2,94,00,000 are in physical form.

6. Management Discussion and Analysis:Management Discussion and Analysis is attached, which form part of this Report.

7. Subsidiaries and Associates During the year under review the Company has invested in following 3 Companies and consequent to Section 2(87) of the Companies Act, 2013, the said Companies are subsidiaries of the Company. As on 31st March, 2017, the Company has 3 subsidiaries and 4 Associate Companies.

• Bollywood Times Private Limited• Play My Movie Private Limited• Propmax Developers and Holders Private Limited

1. Bollywood Times Private Limited (BTPL)BTPL was incorporated on 17.03.2016 as 100% subsidiary of Pen India Limited. The Company is in digital entertainment industry. BTPL has developed and operates a digital platform in the name of Bollywood Times (BT) which is a multi-platform model as a mobile app, Website & social media. BT is a digital platform for online movie promotion & ticket booking besides providing details, trends review of movies. The Company is yet to start its operation in full fledged manner as it is having total revenue of Rs. 0.15 lacs during the year ended 31.03.2017.

2. Play My Movie Private Limited (PMMPL)PMMPL was incorporated on 08.03.2016 as 100% subsidiary of Pen India Limited. PMMPL is developing a digital platform in the name of Play My Movies (PMM) for providing online Video-on-demand services available on mobiles & web platform. The company is yet to start its operation on commercial scale.

3. Propmax Developers and Holders Private Limited (PDHPL)PDHPL was incorporated on 01.07.2014, however it has become as 100% subsidiary of Pen India Limited during the current year. PDHPL is taking care of real estate activities of the company. The company has acquired one property in the current year. The Company is yet to start generate income, however suffered a loss of Rs. 125.86 lacs mainly towards interest and depreciation cost.

The Company has prepared the consolidated financial statements of the Company, which form part of this Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended below as Annexure 2 to the Board’s Report.

8. Report on Corporate Social ResponsibilityAnnual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure - 3 and forms an integral part of this Report.

Pen India Limited32

9. Corporate Governance:Our Corporate Governance philosophy: Corporate governance is about maximizing shareholder value, ethically and sustainably. The Company believes that the goal of the corporate governance is to ensure fairness for every stakeholder. The Company always seeks to ensure that performance is driven by integrity. Your Board exercises its fiduciary responsibilities in the widest sense of the term.

10. Disclosures:• Meeting of the Board:

The Board met 19 (Nineteen) times during the financial year. These were held on 2nd April, 2016, 11th April, 2016, 21st April, 2016, 14th May, 2016, 18th May, 2016, 1st June, 2016, 18th June, 2016, 24th June, 2016, 15th July, 2016, 10th September, 2016, 19th September, 2016, 20th September, 2016, 10th October, 2016, 28th October, 2016, 2nd November, 2016, 23rd December, 2016, 30th January 2017, 22nd February, 2017 and 15th March, 2017.

• Committees:i. Corporate Social Responsibility Committee:

The Corporate Social Responsibility Committee comprises following Directors:

Sr. No.

Name of the Director Designation

1 Mr. Jayantilal GadaChairman & Managing Director

2 Mr. Dhaval Gada Member

3 Mr. Akshay Gada Member

One Meeting of the Corporate Social Responsibility Committee held on 19th September, 2016.

The Corporate Social Responsibility Committee is reconstituted by the Board of Directors at their meeting held on 5th July, 2017 with the following Directors as the Members of the said Committee:

Sr. No.


1 Mr. Javed Akhtar Chairman

2 Mr. Satish Kaushik Member

3 Mr. Tilak Raj Bajalia Member

ii. Management Committee:The day-to-day management of the Company is vested with the Management Committee, which is subjected to the overall superintendence and control of the Board. The Committee is constituted by the Board of Directors w.e.f. 27th May, 2017 and it does comprise the following Directors:

Sr. No.


1 Mr. Jayantilal GadaChairman & Managing Director

2 Mr. Dhaval Gada Member


iii. Nomination and Remuneration Committee:The role of Nomination and Remuneration Committee is as follows:

• Determine/recommend the criteria for appointment of Executive, Non-Executive and Independent Directors to the Board;

• Determine/recommend the criteria for qualifications, positive attributes and independence of Director;

• Identify candidates who are qualified to become Directors and who may be appointed in the Management Committee and recommend to the Board their appointment and removal;

• Review and determine all elements of remuneration package of all the Executive Directors, i.e. salary, benefits, bonuses, pension etc.;

• Review and determine fixed component and performance linked incentives for Directors, along with the performance criteria;

• Determine policy on service contracts, notice period, severance fees for Directors and Senior Management;

• Formulate criteria and carry out evaluation of each Director’s performance and performance of the Board as a whole.

The Nomination and Remuneration Committee was constituted by the Board of Directors w.e.f. 5th July, 2017 and it does comprise the following Directors as the Members of the said Committee:

Sr. No.



2 Mr. Satish Kaushik Member


Board Evaluation:The Company would formulate criteria for performance evaluation of the Directors and the Board as a whole.


iv. Stakeholders Relationship Committee:The Stakeholder Relationship Committee have entrusted with the following Role:

• Oversee and review all matters connected with the transfer of the Company’s shares

• Approve issue of the Company’s duplicate share certificates

• Consider, resolve and monitor redressal of investors’ / shareholders’ grievances related to transfer of shares, non-receipt of Annual Report, non-receipt of declared dividend etc.

• Oversee the performance of the Company’s Share Transfer Agent

• Recommend methods to upgrade the standard of services to investors

• Monitor implementation and compliance with the Company’s Code of Conduct for Prohibition of Insider Trading

• Carry out any other function as is referred by the Board from time to time and / or enforced by any statutory notification/amendment or modification as may be applicable

• Perform such other functions as may be necessary or appropriate for the performance of its duties

The Stakeholders Relationship Committee was constituted by the Board of Directors w.e.f. 5th July, 2017 and it’s comprises following Directors as the Members:

Sr. No.



2 Mr. Jayantilal Gada Member

v. Audit Committee:The Audit Committee of the Company is entrusted with the responsibility to supervise the Company’s internal controls and financial reporting process and, inter alia, performs the following functions:

• Overseeing the Company’s financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible;

• Reviewing and examining with management the quarterly financial results before submission to the Board for approval;

• Reviewing and examining with management the annual financial statements and the auditors’ report thereon before submission to the Board for its approval;

• Reviewing management discussion and analysis of financial condition and results of

operations;• Scrutinising of inter-corporate loans and

investments made by the Company;• Reviewing with management the annual

financial statements as well as investments made by the unlisted subsidiary companies;

• Reviewing, approving or subsequently modifying any Related Party Transactions in accordance with the Related Party Transaction Policy of the Company;

• Approving the appointment of Chief Financial Officer after assessing the qualifications, experience and background, etc. of the candidate;

• Recommending the appointment, remuneration and terms of appointment of Statutory Auditors of the Company and approval for payment of any other services;

• Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;

• Reviewing management letters / letters of internal control weaknesses issued by the Statutory Auditors;

• Discussing with Statutory Auditors, before the commencement of audit, on the nature and scope of audit as well as having post-audit discussion to ascertain area of concern, if any;

• Reviewing with management, Statutory Auditors and Internal Auditor, the adequacy of internal control systems;

• Reviewing the financial statements, in particular, the investments made by the unlisted subsidiaries;

• Recommending appointment, remuneration and terms of appointment of Internal Auditor of the Company;

• Reviewing the adequacy of internal audit function and discussing with Internal Auditor any significant finding and reviewing the progress of corrective actions on such issues;

• Evaluating internal financial controls and risk management systems;

• Valuating undertaking or assets of the Company, wherever it is necessary;

• Reviewing the functioning of the Whistle Blowing mechanism;

The Committee is governed by the terms of reference which are in line with the regulatory requirements mandated by the Companies Act.

The Audit Committee was constituted by the Board of Directors w.e.f. 5th July, 2017and it’s comprises following Directors as the Members of the said Committee:

Pen India Limited34

Sr. No.


1 Mr. Tilak Raj Bajalia Chairman

2 Mr. Javed Akhtar Member

3 Mr. Jayantilal Gada Member

vi. Initial Public Offer Committee (IPO Committee):IPO Committee is entrusted with the following powers:

• The IPO Committee has been constituted to decide the terms and conditions of the Issue,

• Finalisation and filing of the Draft Red Herring Prospectus and this Red Herring Prospectus with SEBI, the Stock Exchanges and other regulatory bodies as may be required;

• Handle all matter relating to appointment of intermediaries and advisors in relation to the IPO;

• Deciding on allocation of the equity shares to specific categories of persons;

• Opening of bank accounts, securities account, escrow or custodian accounts, submitting applications and seeking listing of Equity Shares with the Stock Exchanges;

• Determining and finalising the price band, bid opening and closing date of this Issue, approving and finalising the ‘Basis of Allocation’;

• Determining the price at which the Equity Shares are to be offered to the investors;

• Settling difficulties and doubts arising in relation to the IPO;

• Empowering the authorized officers to enter into and execute any agreements or arrangements in relation to the IPO; and

• Carry out all acts and take all decisions as may be necessary for the purposes of the IPO and listing.

The IPO Committee was constituted by the Board of Directors w.e.f. 5th July, 2017and it’s comprises following Directors as the Members of the said Committee:

Sr. No.


1 Mr. Jayantilal Gada Chairman



Mr. Rajendra Kuamr Haran, appointed as the Convener of the IPO Committee.

vii. Declaration by Independent Directors:The Company has received necessary declaration from independent director under Section 149(7) of the Companies Act, 2013 that he meets the criteria

of independence laid down in Section 149(6) of the Companies Act 2013.

11. Directors and Key Managerial Personnel:• Appointment:

The following appointments were made till the date of the report:

a. Appointment of Shri Jayantilal Gada as the Chairman & Managing Director of the Company w.e.f. 1st April, 2016.

b. Appointment of Shri Dhaval Gada as a Non-Executive Directorof the Company w.e.f. 1st April, 2016.

c. Appointment of Shri Javed Akhtar, as an Independent Director w.e.f. 27th May, 2016.

d. Appointment of Shri Satish Kaushik as a Non-Executive Professional Director w.e.f. 27th May, 2016

e. Appointment of Shri Tilak Raj Bajalia as an Independent Director w.e.f. 5th July, 2017

The Company has received notices under Section 160 of the Companies Act, 2013, proposing appointment of Shri Jhaved Akhta and Shri Tilak Raj Bajalia as an Independent Director and Shri Satish Kaushik as a Non-Executive Professional Director at the ensuing Annual General Meeting of the Company.

• Re-appointments:As per provisions of the Companies Act, 2013, Shri Dhaval Gada and Shri Akshay Gada retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends their appointment.

• Resignation:a. Due to personal reason Shri Kantilal Gada Promoter

and First Director of the Company has resigned as a Director with effect from 14th May, 2016. The Board places on record its appreciation for the services rendered by Shri Kantilal Gada during his tenure with the Company.

b. Due to personal reason Shri Kushal Gada resigned as a Director with effect from 14thMay, 2016. The Board places on record its appreciation for the services rendered by Shri Kushal Gada during his tenure with the Company.

c. Due to unavailability of time Shri Dhaval Gada resigned from the office of the Managing Director of the Company with effect from 1st April, 2016. However, Shri Dhaval Gada continues to remain in the Board as a Non-Executive Director of the Company.

12. Internal financial control and its adequacy:The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding


of its assets, the prevention and detention of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosure.

13. Significant and material ordersThere are no significant and material orders passed by the regulations or courts or tribunals impacting the going concern status and Company’s operation in future.

14. Extract of Annual ReturnIn accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended in Annexure 4 of the Board’s report.

15. Directors’ responsibility statementThese financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed under section 133 of the company’s Act,2013("The Act") read with Rule 7 of the companies (Accounts) Rule 2014,the provision of the act (to the extend notify). Accounting policies have been consistently applied, except where newly-issued accounting standard is initially adopted or a revision to an existing standard requires a change in the accounting policy hitherto in use.

The Directors confirm that:• In the preparation of the annual accounts for the year

ended 31st March, 2017, the applicable accounting standards read with requirements set out under schedule III to the Act, have been followed and there are no material departures from the same;

• 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 at end of the financial year of the profit and loss of the Company for that period;

• They have taken proper and sufficient care towards 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;

• They have prepared the annual accounts on a ‘going concern’ basis;

• They have laid down internal financial controls, which are adequate and are operating effectively; and

• They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

16. Audit Report and Auditors:• Audit Reports:

The Auditors’ Report for fiscal 2017 does not contain any qualification, reservation or adverse remark.

• Statutory AuditorsIn accordance with the provisions of Companies Act, 2013, at the Annual General Meeting held on 30th September, 2015, the shareholders had appointed M/s A.Bafna & Co., Chartered Accountants, as Statutory Auditors of the Company, for a period of 5 years i.e. upto the conclusion of 20th Annual General Meeting to be held for the adoption of accounts for the financial year ending 31st March, 2020.

M/s A. Bafna & Co, Chartered Accountants, have consented to be the Auditors of the Company, if their appointment is ratified by the members at the Annual General Meeting and have also confirmed that their appointment is as per the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

17. Policy Relating to Sexual Harassment:As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made thereunder, your Company has constituted Internal Committees (IC).

No complaints have been received during the year.

18. Particulars of Employees and Related Disclosures:Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report [Annexure 5].

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the Report. However, having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company, at the registered office and the same will be furnished on request.

19. Internal Controls and Risk ManagementThe Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meeting of the Board of Directors of the Company.

Pen India Limited36

The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. The Board of Directors reviews adequacy and effectiveness of the Company’s internal control environment and monitors the implement of audit recommendations.

20. Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo:A. Conservation of Energy

a. Steps taken for conservation of energy:The Company is not engaged in any manufacturing or processing activity. Considering the nature of the Company activities, there is not reporting to be made on conservation of energy.

Notwithstanding this, the Company recognizes the importance of energy conservation in decreasing the adverse effects of global warming and climate change. The Company carries on its activities in an environmental friendly and energy efficient manner.

b. Steps taken by the Company for utilizing alternate sources of energy:Since the principal operations of the Company are not power intensive all operations are presently being carried out using conventional energy sources. As and when a substitute alternate energy source which is viable is made available in the market, the Company will make all efforts to switch to the alternate source of energy.

c. The capital investment on energy conservation equipment:The Company has not made any capital investment on energy conservation equipment.

B. Technology Absorption

a. Efforts made towards technology absorption:None

b. The benefits derived like product improvement, cost reduction, product development or import substitution:None

c. Information regarding imported technology (Imported during last three years):The Company has not imported any technology during the last three years.

d. Expenditure incurred on research and development:Nil

C. Foreign exchange earnings and outgo:

i. Income in Foreign CurrencyTheatrical Revenue - Rs.1,30,268/-

ii. Expenditure in Foreign Currency (accrual basis)Professional Fees - Rs.8,71,301/-

21. General:Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees’ Stock Option Scheme referred to in this Report.

• The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

• No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

• The Managing Director of the Company is not receiving any remuneration or commission from any of its subsidiaries.

22. Acknowledgement:Your Directors would like to express their sincere 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 Company's executives, staff and workers.

For and on behalf of the Board of Directors

For Pen India Limited

(Jayantilal Gada)Place: Mumbai Chairman & Managing DirectorDate : 6th July 2017 DIN No.: 00726688


ANNEXURES TO THE BOARD’S REPORT

Annexure 1Particulars of contracts/arrangements made with related parties

[Pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014 – AOC-2]

The Form pertains to the disclosure of particulars of contracts/ arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013, including certain arm’s length transactions under third proviso thereto.

The paid-up share capital of the Company increased from Rs.1,40,00,000/- to Rs.30,80,00,000/- w.e.f. 27-05-2017. The Board prior approval necessary before availing or rendering services with related parties in terms of Section 188 of the Companies Act, 2013. However, no approval of the Board of Directors are require any related party transactions entered during the year are in Ordinary Course of the Business and at Arm’s Length basis.

Details of contracts or arrangements or transactions not at arm’s length basis:There were no contracts or arrangements or transactions entered into during the year ended 31st March, 2017, which were not at arm’s length basis.

Details of material contracts or arrangements or transaction at arm’s length basis:The details of material contracts or arrangement or transactions at arm’s length basis for the year ended 31st March, 2017 are as follows:

Name of related party Nature of relationship Duration of contracts

Nature of Transaction

Amount in Rs.

Shri Jayantilal Gada Chairman & Managing Director Not Applicable Sale of Car 5,58,932/-

M/s Popular Entertainment Network Pvt. Ltd.

Enterprises where Key Management Personnel or their relatives are able to exercise significantInfluence(Lessor)

5 Years Leasing of Immovable Property

8,40,000/-

M/s Pen Music Pvt Ltd. Enterprises where Key Management Personnel or their relatives are able to exercise significant Influence (Service Provider)

Not Applicable Availing of services

4,00,000/-

For and on behalf of the Board of DirectorsFor Pen India Limited


Pen India Limited38

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Annexure 3Report on Corporate Social Responsibility

A. Focus areas:The Company supports various bodies in carrying out activities in the areas of rural development, education, promoting health care, general semantics etc.

CSR Objectives:To attain its CSR objectives in a professional manner and integrated manner, the main objectives are:

1. To promote, carry out, support activities relating to: Education and Training including in Science and Technology, Humanities etc; Healthcare; Welfare of Children, Women, Senior Citizens, and differently Abled Persons; Employment enhancing Vocational skills; Sanitation; Water management; Agriculture; Horticulture; promotion of Culture; Art & Craft; Conservation of Natural Resources; Promotion and development of traditional Arts & Handicrafts; Employment Generation; Environment Sustainability; Science & Technology; Rural Development; Animal Welfare; welfare and development measures towards reducing inequalities faced by Socially and Economically Backward groups; and such activities may include establishing, supporting and / or granting aid to institutions engaged in any of the activities referred to above.

2. To conduct and support studies & research; publish and support literature, publications & promotion material; conduct and support discussions, lectures, workshops & Seminar in any of the areas covered above.

3. To promote, carry out, support any activities covered in Schedule VII to the Companies Act, 2013, as amended from time to time.

Overview of projects or programs proposed to be undertaken:The Company would take undertake activities relating to Promoting Education, Healthcare, Rural development and Sanitation in the coming financial years.

B. The Composition of the CSR Committee as on 31st March, 2017 is as follows:The CSR Committee comprises the following Directors as its Members:

Shri JayantilalGada – Chairman Shri DhavalGada – MemberShri AkshayGada – Member

C. Average net profit of the Company for last three financial years:

Financial Years Profit in Rs.

2015-16 16,15,09,926/-

2014-15 57,287,939/-

2013-14 4,95,08,426/-

The average Net Profit amount is Rs. 8,94,35,430/-

D. CSR Expenditure (2% of the amount as in item 3 above): Rs. 17,88,709/-

Pen India Limited40

E. Details of CSR spent during the financial year:a. Total amount spent for the financial year – Rs. 28,00,000/-b. Amount unspent, if any – Rs. Nil.

F. Annual Report on Corporate Social Responsibility (CSR) ActivitiesManners in which the amount spend during the financial year is detailed below:

Sr. No.

CSR Project/Activity

Sector Locations Budget for projects /

programmes

Amount spent: Direct on projects/ programmes

Cumulative Expenditure

up to reporting period

Amount spent: Direct/Implementing

Agency

1 Shri Navjivan Viklang Sevashray

Gujarat Bhachau - Kutch

Rs.18,00,000/- Direct on Projects

Rs.18,00,000/- Implementing Agency

2 Shri Navjivan Viklang Sevashray

Gujarat Bhachau - Kutch

Rs.10,00,000/- Direct on Projects

Rs.10,00,000/- Implementing Agency

G. Our CSR ResponsibilitiesWe hereby affirm that the CSR Policy, as approved by the Board, has been implemented and the CSR committee monitors the implementation of the projects and activities in compliance with our CSR objectives.




Annexure 4Form No. MGT-9

Extract of annual return as on the financial year ended on 31-03-2017[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. Registration and other details:

i. CIN U72200MH2000PLC128481

ii. Registration Date 29/08/2000

iii. Name of the Company Pen India Limited

iv. Category/Sub-Category of the Company Public Limited Company

v. Address of the Registered office and contact details Pen house, Asha Colony, Juhu Tara Road, Juhu, Mumbai- 400049

vi. Whether listed company No

vii.Name, Address and Contact details of Registrar and Transfer Agent, if any

N. A.

II. Principal Business Activities of the CompanyAll the business activities contributing 10% or more of the total turnover of the company shall be stated

Sr. No.

Name and Description of main products/services

NIC Code of the Product/ service

% to total turnover of the company

1. Movies Production and distribution 99961210 100%

III. Particulars of Holding, Subsidiary and Associate Companies

Sr. No.

Name and Address of the Company

CIN/LLPIN Holding/ Subsidiary/Associate

% of shares held

ApplicableSection

1. Propmax Developers & Holders Private Ltd.

U70102MH2014PTC255788 Subsidiary 100.00 Section 2(87) of the Companies Act, 2013

2. Play My Movies Private Ltd. U74999MH2016PTC274023 Subsidiary 100.00

3. Bollywood Times Private Limited U74900MH2016PTC274558 Subsidiary 100.00

4. Wizart Entertainment LLP AAG-2474 Associate 50.00Section 2(6) of the Companies

Act, 2013

5. Pen Production No.1 LLP AAG-3170 Associate 50.00

6. Bright Light Pictures LLP AAG-2473 Associate 50.00

7. Breakthrough Films LLP AAG-2475 Associate 50.00

IV. Shareholding Pattern (Equity Share Capital Breakup as percentage of Total Equity)ii. Category-wise Shareholding

Category ofShareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during

The YearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

A. Promoter

1. Indian

a. Individual/ HUF - 14,00,000 14,00,000 100 - 14,00,000 14,00,000 100 0%

b. Central Govt - - - - - - - - -

Pen India Limited42

Category ofShareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during

The YearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

c. State Govt(s) - - - - - - - - -

d. Bodies Corp - - - - - - - - -

e. Banks / FI - - - - - - - - -

f. Any Other - - - - - - - - -

Sub-total (A) (1) - 14,00,000 14,00,000 100 - 14,00,000 14,00,000 100 0%

2. Foreign - - - - - - - - -

g. NRIs-Individuals - - - - - - - - -

h. Other-Individuals - - - - - - - - -

i. Bodies Corp. - - - - - - - - -

j. Banks/FI - - - - - - - - -

k. Any Other - - - - - - - - -

Sub-total (A) (2) - - - - - - - - -

B. Public Shareholding - - - - - - - - -

1. Institutions - - - - - - - - -

a. Mutual Funds - - - - - - - - -

b. Banks/FI - - - - - - - - -

c. Central Govt - - - - - - - - -

d. State Govt(s) - - - - - - - - -

e. Venture Capital Funds - - - - - - - - -

f. Insurance Companies - - - - - - - - -

g. FIIs - - - - - - - - -

h. Foreign Venture Capital Funds

- - - - - - - - -

i. Others (specify) - - - - - - - - -

Sub-total (B) (1) - - - - - - - - -

2. Non Institutions - - - - - - - - -

a. Bodies Corp.i. Indianii Overseas

--

--

--

--

--

--

--

--

--

b. Individualsi. Individual shareholders

holding nominal share capital upto Rs. 1 lakh

ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

c. Others (Specify) - - - - - - - - -

Sub-total (B) (2) - - - - - - - - -

Total Public Shareholding (B)=(B)(1)+ (B)(2)

- - - - - - - - -

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) - 14,00,000 14,00,000 100 - 14,00,000 14,00,000 100 0%


ii. Shareholding of Promoters

Sr. No

Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year % Change in share holding

during the year

No. of Shares

% Of Total Shares of the

Company

% Of Shares Pledged /

encumbered to total shares

No. of Shares

% Of Total Shares of the

Company

% Of Shares Pledged /

encumbered to total shares

1 Shri Jayantilal Gada 13,99,950 99.99 0 13,99,950 99.99 0 0

2 Smt Bhavita Shah 10 0.0007 0 10 0.0007 0 0

3 Smt Hansa Gada 9 0.0006 0 9 0.0006 0 0

4 Shri Dhaval Gada 1 0.00007 0 1 0.00007 0 0

5 Shri Kantilal Gada 10 0.0007 0 10 0.0007 0 0

6 Shri Akshay Gada 0 0 0 10 0.0007 0 0

7 SmtVasanti Gada 10 0.0007 0 10 0.0007 0 0

8 Shri Rajni Acharya 10 0.0007 0 0 0 0 0

TOTAL 14,00,000 100 0 14,00,000 100 0 0

ii. Change in Promoters' Shareholding (Please specify, if there is no change)

Sr. No

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares of the

company

No. of shares % of total shares of the

company

1 At the beginning of the year - - - -

2 Date wise Increase/Decrease in Promoters Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer/bonus/sweat equity etc)

- - - -

3 At the End of the year - - - -

V. Indebtedness (Equity Share Capital Breakup as percentage of Total Equity)Indebtedness of the Company including interest outstanding/accrued but not due for payment

SecuredLoans excluding deposits

UnsecuredLoans

Deposits TotalIndebtedness

Indebtedness at the beginning of the financial yeari. Principal Amountii. Interest due but not paidiii. Interest accrued but not

57,99,21,113 15,41,65,041 - 73,40,86,154

Total(i+ii+iii) 57,99,21,113 15,41,65,041 - 73,40,86,154

Change in Indebtedness during the financial year - Addition - Reduction

(-) 1,13,01,841 (-) 15,41,58,630 - (-) 16,54,60,471

Net Change (-) 1,13,01,841 (-) 15,41,58,630 - (-) 16,54,60,471

Pen India Limited44

SecuredLoans excluding deposits

UnsecuredLoans

Deposits TotalIndebtedness

Indebtedness at the end of the financial yeari. Principal Amountii. Interest due but not paid iii. Interest accrued but not due

56,86,19,172 6,411 - 56,86,25,583

Total (i+ii+iii) 56,86,19,172 6,411 - 56,86,25,583

VI. Remuneration of Directors and Key Managerial PersonnelA. Remuneration to Managing Director, Whole-time Directors and/or Manager

Sr. No

Particulars of Remuneration Total Amount

Shri Jayantilal Gada

Shri Dhaval Gada

Shri Akshay Gada

1 Gross salarya. Salary as per provisions contained in section 17 (1) of the Income-tax Act, 1961b. Value of perquisites u/s 17 (2) Income-tax Act, 1961c. Profits in lieu of salary u/s 17 (3) Income-tax Act, 1961

75,00,000 5,40,000 5,40,000

2 Stock Option - - -

3 Sweat Equity - - -

4 Commission - as % of profit - others, specify

- - -

5 Others (Bonus) 25,000 25,000 25,000

Total (A) 75,25,000 5,65,000 5,65,000

Ceiling as per the Act Rs. 16,80,88,024/- (being 11% of the Net Profit of the company as calculated as per Section 198 of

Companies Act, 2013)

B. Remuneration to other Directors

Sr. No

Particulars of Remuneration Name of MD/WTD/Manager

TotalAmount

1 Independent Directors• Fee for attending board committee meetings• Commission• Others, please specify

Total (1)

2 Other Non-Executive Directors• Fee for attending board committee meetings• Commission• Others, please specify

Total (2)

Total (B) = (1+2)

Total Managerial Remuneration

Overall Ceiling as per the Act


C. Remuneration to Key Managerial Personnel Other Than MD/Manager/WTD

Sr. No

Particulars of Remuneration Key Managerial Personnel Total

CEO CompanySecretary

CFO

1 Gross salarya. Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961b. Value of perquisites u/s 17 (2) Income-tax Act, 1961c. Profits in lieu of salary u/s 17 (3) Income-tax Act, 1961

- - - -

2 Stock Option

3 SweatEquity

4 Commission - as % of profit - others, specify

Total

VII. Remuneration of Directors and Key Managerial Personnel

Type Section of the companies Act

Brief description

Details of Penalty/

Punishment/Compounding fees imposed

Authority[RD/NCLT/Court]

Appeal made. If any(give

details)

A. Company

Penalty - - None - -

Punishment

Compounding

B. Directors

Penalty

Punishment

Compounding

C. Other Officers In Default

Penalty

Punishment

Compounding



Pen India Limited46

Annexure 5Particulars of Employees

3(a) Compensation relating to financial year 2016-17 for Managing Director, Whole-time Director, Director and other KMP as on 31st March, 2017 as follows:

Name of the KMP Currency Financial year Base/Fixed Pay Bonus and Incentive

Total compensation

Shri Jayantilal Gada INR 2016-17 75,00,000/- p.a. 25,000/- 75,25,000/-

Information as per Rule 5(1) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

3(b) Remuneration to Managing Director/Whole-Time Director:

Name of the Directors

Director Identification

Number (DIN)

Title Remuneration in financial year

2016-17

Remuneration in financial year

2015-16

% Increase in remuneration in

financial year 2016-17 as compared to financial

year 2015-16

Ratio of remuneration to MRE excluding

to MD/WTD

Ratio of remuneration to MRE including

MD/WTD


00726688 Chairman & Managing Director

Rs.75,00,000/- Rs.12,00,000/- 525% 67.64 56.82

3(c) Remuneration of other key managerial personnel (KMP):

Name of the KMP

Title Remuneration in financial

year 2016-17

Remuneration in financial

year 2015-16

% increase of remuneration in

financial year 2016-17 as compared to financial

year 2015-16

Ratio of remuneration to MRE excluding

to MD/WTD

Ratio of remuneration to MRE including

MD/WTD

No. of RSUs granted in the financial year

2016-17


Chairman & Managing Director

Rs.75,00,000/- Rs.12,00,000/- 525% 67.64 56.82 NIL

3(d) Information as per Rule 5(2) of Chapter XIII, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:To employees in terms of remuneration drawn during the year

Employee Name Designation Educational qualification

Experience in years

Remuneration in the financial year 2016-17 (in Rs.)

Previous employment and designation


Chairman & Managing Director

S.S.C. Passed 16 Years Rs.75,00,000/- Pen India Limited, Chairman & Managing Director




INDEPENDENT AUDITOR’S REPORT

To The Members,Pen India Limited,

Report on the Standalone Financial Statements1. We have audited the accompanying standalone financial statements of Pen India Limited(“the Company”) which comprise the

Balance Sheet as at 31 March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with

respect to the preparation of these standalone financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended).

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial

statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2017, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements9. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of

Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

Pen India Limited48

10. Further to our comments in annexure A, as required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. The standalone Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flow dealt with by this report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rule issued thereunder;

e. On the basis of the written representations received from the directors as on 31st March, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,2017 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

1. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements. Refer note 27 to the standalone financial statements;

2. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

3. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

4. The Company has provided requisite disclosures in its standalone Financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 38 to the standalone Financial Statements.

For and on behalf ofA. Bafna & Co.Chartered AccountantsFirm Registration No.:03660C

CA. Jinendra Kumar SethiPartnerMembership No. 072006

Place: MumbaiDate : 6th July 2017


Annexure A to the Independent Auditor’s Report Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement’ of our report of even date to the standalone financial statements of Pen India Limited for the year ended March 31st 2017

1. Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

c. There are no immovable properties held in the name of the Company.

2. As per the information received by us, the inventory has been physically verified (copyrights of film verified with reference to title documents/ agreements) by the management at reasonable intervals during the year. As explained to us, no discrepancies were noticed on physical verification as compared to the book records.

3. The Company has granted unsecured loans to 2 companies covered in the register maintained under Section 189 of the Act; and with respect to the same:

i. In our opinion the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

ii. The schedule of repayment of principal has been stipulated where in the principal amounts are repayable after a period of 3 years and since these re - payments are not due during the year, in our opinion, the question of repayment of the principal amount does not arise;

iii. The principal amounts of loans are repayable after a period of 3 years and since these re - payments are not due during the year there is no overdue amount in respect of loans granted to such companies.

4. In our opinion, company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security.

5. In our opinion, the Company has not accepted any deposits from the public. Accordingly, the provisions of clause 3(v) of the Order are not applicable.

6. As informed to us the, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried by the company.

7a. According to information and explanations given to us and on the basis of our examination of the books of account, and, records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employee State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2017 for a period of more than six months from the date on when they become payable.

Pen India Limited50

7b. According to the information and explanations given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute except the following:

Name of Statute

Nature of Dues

Amount (in Rs.)

Period to which the amount relates

Forum where dispute is pending/appeal in the process of being lodged

Service tax Service Tax Demand

43,43,002/- 2008-09 to 2011-12 Office of Assistant Commissioner, Division VII, Service tax-VI, Mumbai

Service tax Service Tax Demand

63,43,795/- 2009-10 & 2010-11 Office of the Commissioner of Service tax, Audit-I, Mumbai

8. In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to bank, financial institutions.

9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. The Company had opening term loans which have been repaid in part or full during the year.

10. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

11. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

14. Based upon the audit procedures performed and the information and explanation given by the management, the company has not made any preferential allotment or private placement of share or fully or partly convertible debentures during the year under review. Accordingly, the provision of clause 3 (xiv) of Orders are not applicable to the Company and hence not commented upon.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provision of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.





“Annexure B” to the Independent Auditor’s report on the Internal Financial Controls Under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the act”) on the Standalone Financial Statements of Pen India Limited

1. In conjunction with our audit of the standalone financial statements of Pen India Limited (“the Company”) as of and for the year ended 31st March2017, we have audited the internal financial controls over financial reporting (IFCoFR) of the company as of that date.

Management’s Responsibility For Internal Financial Control2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the criteria

established by the Company considering the essential components of internal control as stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the company’s business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit in accordance

with the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls Over Financial Reporting6. A company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s IFCoFR includes those policies and procedures that

• Pertain to the maintenance of records that , in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls,

material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Pen India Limited52

Opinion8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such

internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.





BALANCE SHEET AS AT 31 MARCH, 2017

Particulars Note No. As on31.03.2017

(Amt Rs.)

As on31.03.2016

(Amt Rs.)

EQUITY & LIABILITIES

1. Shareholders' Funds

a. Share Capital 3 14,000,000 14,000,000

b. Reserves & Surplus 4 486,313,105 306,332,066

2. Non - current Liabilities

a. Deferred tax liabilites (Net) 5 - 1,324,346

b. Long Term Provisions 6 510,521 -

3. Current Liabilities

a. Short Term borrowings 7 568,625,583 734,086,154

b. Trade payables 8 87,647,617 21,301,482

c. Other Current Liabilities 9 257,801,722 143,426,168

d. Short Term Provisions 10 130,876 -

TOTAL 1,415,029,424 1,220,470,216

ASSETS

4. Non Current Assets

a. Property, Plant and Equipment 11A 9,929,464 13,232,773

b. Intangible Assets 11B - -

c. Non Current Investments 12 75,271,640 -

d. Deferred Tax Assets(net) 5 3,322,421 -

e. Long Term Loans and Advances 13 30,104,099 112,388,725

5. Current Assets

a. Current Investments 14 669,679,989 503,165,960

b. Inventories 15 452,229,465 432,282,068

c. Trade Receivables 16 103,153,569 15,047,808

d. Cash and Cash Equivalents 17 19,682,746 60,362,745

e. Short term Loans and Advances 18 50,073,380 82,853,703

f. Other Current Assets 19 1,582,651 1,136,434

TOTAL 1,415,029,424 1,220,470,216

Significant Accounting Policies & Notes to Financial Statements 1 to 41

As per our report of even date For and on behalf of the BoardA. Bafna & Co.Firm Registration Number 03660CChartered Accountants

CA. Jinendra Kumar Sethi R K Haran Jayantilal Gada Akshay Gada Partner Group President - C&MA and Chairman & Managing Director Director Membership No. 072006 Group Company Secretary (DIN No.00726688) (DIN No.07283493)

Date : 6th July 2017 Place : Mumbai

Pen India Limited54

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2017

Particulars Note No. Year ended31.03.2017

(Amt Rs.)

Year ended31.03.2016

(Amt Rs.)

I Revenue from operations 20 1,467,907,430 1,372,301,152

II Other Income 21 62,193,235 91,993,616

III Total Revenue 1,530,100,665 1,464,294,768

IV Expenses:

Cost of Sales 22 1,139,276,827 1,237,528,632

Employee benefit expenses 23 19,331,006 8,521,747

Finance cost 24 66,277,243 20,400,846

Depreciation and amortisation expenses 25 3,745,942 3,081,915

Other Expenses 26 40,059,187 33,251,701

Total Expenses 1,268,690,205 1,302,784,841

V Profit before tax 261,410,460 161,509,926

VI Tax Expenses:

1. Current Tax 87,640,991 52,214,884

2. Deferred Tax (4,646,767) (53,005)

3. Short/(Excess)Tax Provision for Earlier Years (1,853,940) (14,063,012)

81,140,285 38,098,867

VII Profit / (loss) for the period (XI - XIV) 180,270,175 123,411,060

VIII Earings per equity share 34

1. Basic 128.76 88.15

2. Diluted 128.76 88.15




Date : 6th July 2017Place : Mumbai


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2017

Particulars Year ended31.03.2017

(Amt Rs.)


(Amt Rs.)

A Cash flow from operating activities

Net Profit before Taxation 261,410,460 161,509,926

Adjustments for - -

Fixed Assets Written Off/Sold 1,289,474 -

Depreciation 3,745,942 3,081,915

Interest Income (44,787,029) -

Share of Loss in Associate LLP's 28,360

Interest Expense 66,277,243 20,400,846

Profit on sale of Mutual Funds (16,643,379) (11,152,440)

Profit on sale of asset (55,121)

Dividend Received - (8,869,818)

9,855,489 34,60,504

Operating profit before working capital changes 271,265,949 164,970,430

Adjustments for -

Increase in Trade and Other Receivable (55,771,655) (90,605,843)

Decrease/(Increase) in Inventories (19,947,398) (94,645,850)

Increase in Trade and Other Payables 181,073,950 (514,295,726)

105,354,898 (699,547,419)

Cash generated from operations 376,620,847 (534,576,989)

Direct Taxes paid (net of refund of taxes) (5,073,676) (11,887,193)

Net cash from operating activities 381,694,522 (546,464,182)

B Cash flow from investing activities

Expenditure on property, plant and equipment (1,751,875) (1,060,407)

Long term loan recd back /(given) (8,576,100) 6,307,751

Purchases of Investments ( Current & Non Current) (416,814,029) (678,165,960)

Proceeds from sale of Investments 191,643,379 641,152,439

Proceeds from sale of property, plant and equipment 74,890

Interest Income 44,787,029 -

Dividend Received - 8,869,818

Net cash used in investing activities (190,636,706) (22,896,359)

C Cash flow from financing activities

Proceeds / (Repayment) from/(of) Long-term Borrowings - 109,020,493

Issue of Equity share capital - -

Proceeds / Repayment from/(of) Short-term Borrowings (165,460,571) 531,886,226

Interest paid (66,277,243) (20,400,846)

Net cash used in financing activities (231,737,814) 620,505,873

Pen India Limited56





(Amt Rs.)


(Amt Rs.)

Net (decrease)/increase in cash and cash equivalents (A+B+C) (40,679,997) 51,145,331

Cash and Cash Equivalents at beginning of the year 60,362,745 9,217,414

Cash and Cash Equivalents at end of the year 19,682,746 60,362,745

Notes:

1. The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard – 3 on Cash Flow Statements, issued by the Institute of Chartered Accountants of India.

2. Cash and cash equivalents at the end of the year represents cash and bank balances.


1. Nature of OperationsThe Company was incorporated on 29th August 2000 to carry on the business of to purchase, take on hire or otherwise acquire, films and television and video with the exhibiting and renting of the same and to sell, give on hire or otherwise the films, talkies and the right so acquired and the company’s production with their exhibiting, distributing and renting rights to theatres both in India and outside, satellite rights, other media rights & to carry on the business as manufacturers, sellers, distributors, dealers, buyers importers,exporters of audio and video cassettes, records, compact disc, laser disc, electro magnetic devices in any formats, televisions, radios, amplifiers, tape recorders, video recorders, digitalelectronics and other control systems, sound/video transferring and processing, videographics, video vision.

2. Statement of Significant Accounting PoliciesThese financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed unser section 133 of the companies Act, 2013 ("The Act") read with Rule 7 of the companies (Accounts) Rule 2014,the provision of the act (to the extend notify). Accounting policies have been consistently applied, except where newly-issued accounting standard is initially adopted or a revision to an existing standard requires a change in the accounting policy hitherto in use.

All the assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of operations and the time between the acquisition of assets and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

The significant accounting policies are as follows -

a. Basis of Accounting -The financial statements are prepared in accordance with the historical cost convention under accrual method of accounting and as a going concern.

b. Use of EstimatesThe preparation of the financial statements in conformity with generally accepted accounting principles ('GAAP') requires management to make estimates and

assumptions that affect the reported amount of assets and liabilities , revenues and expenses, as well as disclosure of contingent liabilities on the date of the financial statements. Key estimates made by the Company in preparing these financial statements. Key estimates made by the company in preparing these financial statement include useful lives of assets as well as utilization of economic benifits from these assets, accrual of expenses , recoverability of trade receivables and deffered tax assets . Management belives that the estimates made in the preparation of financial statement are prudent and resonable . Actual results may differ from those estimates. Any revision to accounting estimates is recognised prospectively, in the period in which revisions are made.

c. Revenue Recognitioni. Revenue from Sale of Rights is recognised on

fulfillment of the following criteria• Persuasive evidence of a sale or licensing

arrangement with a customer exists.• The film is complete and, in accordance with

the terms of the arrangement, either has been delivered or is available to be delivered.

• The gross revenue is fixed or determinable.• The license period of the arrangement

has begun and the customer can begin its exploitation or exhibition.

• Collection is reasonably assured.

ii. Revenue from film exhibition is recognised when the said film is exhibited in theatres and the final account of the said film is received from various theatre owners. If the film is exhibited in the last 3 months of the Financial Year, the gross revenue received from theatrical owners would be reduced from the cost of the film and if there is any balance cost, the same would be carried forward to the subsequent year to be written off in the subsequent year after adjustments of any receipts in subsequent year and if there is a credit balance in the cost after crediting the receipts to the cost of the film, the same would be transferred to profit & loss account.

iii. Revenue from Sale of Compact Discs and VideoTapes is recognised upon passing of title to the customers, which generally coincides with the delivery.

iv. Advertisement Revenue is recognised when the commercial appears before the public i.e. on telecast.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH, 2017

Pen India Limited58

v. Royalty Income is recognised on the basis of information submitted by the customer.

d. Other Incomei. Interest income is recognised on a time proportion

basis taking into account the amount outstanding and the rate applicable.

ii. On disposal of investments , the difference between the carrying amount and the disposal proceeds is recognised in the Statement of Profit and Loss.

e. Property, plant and equipment:Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management. The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The useful lives and residual values of the Company’s assets are determined as per Schedule II of the Companies Act, 2013. Depreciation for assets purchases / sold during a period is proportionately charged.

Repairs and maintenance costs are recognized in net profit in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

f. Intangible assetsIntangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

g. Content AdvancesAdvances arepaid to producers/owners of the film , in terms of the agreements entered into with them , for acquisition of associated rights . All advances are reviewed by the management periodically , considering facts of each case, to determine recoverability. These advances are transferred to film rights at the point of exploitation.

h. Investmentsi. Investments that are readily realisable and intended

to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments.

ii. Current investments are carried at lower of cost and fair value determined on an individual investment basis.

iii. Long-term investments are carried at cost. However, provision for diminution in the value of investments, if any, is made to recognise a decline, other than temporary in nature.

i. InventoriesItems of inventory are valued on the basis given below:i. Stock of Work in Progress - The cost of production

of various films are accumulated under this head. All the cost incurred for production of a particular film is debited to particular picture account and is transferred to revenue account only when the said particular film is released / exibited in theatres.

ii. Stock of Rights - Finished Goods - Stock of Rights are valued at cost of purchase.

j. Impairment of Assets Impairment loss is provided to the extent the carrying amount of assets exceed their recoverable amount. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

k. Provisions & ContingenciesA provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither regognised nor disclosed in the financial statements.


l. Employee Benefitsi. Short-term Employee Benefits

a. Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii. Long-term Employee Benefitsa. Defined Contribution Plans

The company has Defined Contribution Plans for post employment benefits in the form of Provident Fund which is administered through Government of India. Provident Fund Scheme is classified as Defined Contribution Plans as the company has no further obligation beyond making the contributions. The company's contributions to Defined Contribution Plans are charged to the Profit and Loss Statement as incurred. The expense related to other post employment and long term benefits is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

m. LeasesThe Company has evaluated all existing leases as "Operating Leases". Aggregate of lease rentals payable under non - cancellable operating lease arrangemnts ( over the initial and subsequent periods of lease ) are charged to the Statement of Profit and Loss on a straight line basis over the non-cancellable period of the lease.

n. Foreign Currency TransactionsTransactions in foreign currencies are accounted at

exchange rates prevalent on the date of the transaction. Foreign currency monetary assets and liabilities at the period end are translated using the exchange rates prevailing at the end of the period. All exchange differences are recognised in the Statement of Profit & Loss . Non monetary foreign currency items are recorded using the exchange rates that existed when the values were determined accordingly. The reporting currency of the Company is Indian Rupee

o. Taxes on IncomeProvision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from “timing differences” between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

p. Earnings per ShareBasic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

q. Cash and cash equivalentsCash and cash equivalents for the purposes of cashflow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

Pen India Limited60

3. Share CapitalParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Authorized shares:

50,00,000 Equity shares of Rs.10/-each 50000000 50,000,000

50,000,000 50,000,000

Issued, Subscribed and fully paid up shares

14,00,000 Equity Shares of Rs. 10/- each fully paid-up 14,000,000 14,000,000

Total issued, subscribed and fully paid up share capital 14,000,000 14,000,000

3.1 Reconciliation of the shares at the beginning and at the end of the reporting period

Particulars 31.03.2017(Nos.)

31.03.2017(Amt Rs.)

31.03.2016(Nos.)

31.03.2016(Amt Rs.)

Equity shares of Rs. 10/- each

At the beginning of the period 1,400,000 14,000,000 1,400,000 14,000,000

Add: Issued during the period - - - -

Outstanding at the end of the period 1,400,000 14,000,000 1,400,000 14,000,000

3.2 Terms/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 for one vote per share.

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

3.3 List of Shareholders holding more than 5% of total Issued Shares


31.03.2017(% Holding)

31.03.2016(Nos.)

31.03.2016(% Holding)

Mr. Jayantilal V. Gada 1,399,950 99.99% 1,399,950 99.99%

4. Reserves & SurplusParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

I Securities Premium Reserve

Balance as per last Balance Sheet 36,000,000 36,000,000

Add: Premium on shares issued during the year - -

Closing Balance 36,000,000 36,000,000

II Surplus - Balance in the Statement of Profit and Loss

Balance as per last Balance Sheet 270,332,066 146,921,006

Add: Profit for the year 180,270,175 123,411,060

Less: Charge on account of transitional provisions under Accounting Standard 15 (Net of Deferred Tax)

289,136 -

Net Surplus in the Statement of Profit and Loss 450,313,105 270,332,066

Total Reserves and Surplus 486,313,105 306,332,066


5. Deferred tax Asset/(Liabilities) (Net)Particulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Deferred tax Asset/(liability) on account of

Depreciation 3,100,433 53,005

Gratuity 181,083 -

Leave Encashment 40,905 -

Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same government taxation laws.

Opening Net Liability -1,324,346 1,377,351

Closing Net Asset/(Liability) 4,646,767 1,324,346

Current Year Deferred Tax Asset / (Liability) 3,322,421 53,005

6. Long Term ProvisionsProvision for Employee Benefits

Provision for Gratuity 476,708 -

Provision for Leave Encashment 33,813 -

510,521 -

7. Short Term Borrowingsa. Secured Loans repayable on demand from

Banks - Overdraft 568,619,172 371,293,441

Others - India Infoline - 208,627,671

Bank Overdraft from YES Bank Limited is secured against Property i.e. Pen House (owned by M/s Popular Entertainment Pvt Ltd, a related company) and personal guarantee of Chairman and Managing Director Mr.Jayantilal Gada, Outstanding as on 31.03.2017 Rs. 1.77 Crs.Previous year Bank Overdraft from Yes Bank was secured against Mutual Funds owned by the company and Popular Entertainment Network Private Limited(Related Party) (PY Rs. 17.19 Crs)

Bank Overdraft from BNP Paribas Bank and HDFC Banks are secured against Mutual Funds owned by the company and Popular Entertainment Network Private Limited(Related Party)

Loan from India Infoline is also Secured against Mutual Funds.

b. Unsecured Loans

Loan from Director 6,411 14,656,997

Loans and Advances from Related Parties - 1,275,157

Loan from others - 138,232,887

568,625,583 734,086,154

The above unsecured loans are interest free

The Company does not have any default as on Balance Sheet date in repayment of any loan or interest, wherever applicable.

Pen India Limited62

8. Trade PayablesParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Trade Payables -

Trade Payables due to Micro and Small Enterprises 979,680 -

Trade Payables due to other than Micro and Small Enterprises 86,667,937 21,301,482

For the year and as at March 31, 2017 and March 31, 2016, there are no inter-ests due/paid/payable to Micro and Small Enterprises

87,647,617 21,301,482

The details of amounts outstanding to Micro, Small and Medium Enterprises is based on information available with the Company

9. Other Current liabilitiesStatutory Liabilities 37,213,375 1,229,124

Advances Received From Customers 220,588,347 142,197,044

257,801,722 143,426,168

10. Short Term ProvisionsProvision for Employee Benefits

Provision for Gratuity 46,501 -

Provision for Leave Encashment 84,375 -

130,876 -

11A. Property, Plant and Equipment The Changes in the carrying value of Property, plant and equipment for the year ended March 31,2017 are as follows:

Particulars Plant & Machinery(Amt. Rs.)

Computer (Amt. Rs.)

Furnitures & Fixtures (Amt. Rs.)

Motor Car (Amt. Rs.)

Office Equipments

(Amt. Rs.)

Total(Amt. Rs.)

Gross Carrying value as of April 1, 2016 3,957,603 2,506,179 21,517,604 20,632,127 987,678 49,601,190

Additions 98,402 824,237 129,236 - - 1,051,875

Deletions/Write off - - - 19,930,127 - 19,930,127

Gross Carrying value as of March 31, 2017 4,056,005 3,330,416 21,646,840 702,000 987,678 30,722,938

Accumulated Depreciation as of April 1, 2016 3,227,816 2,176,290 11,521,427 18,790,925 651,958 36,368,416

Depreciation 193,108 279,285 2,053,190 376,551 143,809 3,045,942

Accumulated Depreciations on deletions/write off - - - 18,620,884 - 18,620,884

Accumulated Depreciation as of March 31,2017 3,420,923 2,455,574 13,574,617 546,592 795,768 20,793,474

Carrying value as of March 31, 2017 635,081 874,841 8,072,223 155,409 191,911 9,929,464

Carrying value as of April 1, 2016 729,787 329,889 9,996,176 1,841,202 335,720 13,232,774


Particulars Plant & Machinery(Amt. Rs.)

Computer (Amt. Rs.)



Office Equipments

(Amt. Rs.)

Total(Amt. Rs.)

Gross Carrying value as of April 1, 2015 3,666,420 2,264,560 20,989,998 20,632,127 987,678 48,540,783

Additions 291,183 241,619 527,605 - - 1,060,407

Deletions - - - - - -

Gross Carrying value as of March 31, 2016 3,957,603 2,506,179 21,517,603 20,632,127 987,678 49,601,190

Accumulated Depreciation as of April 1, 2015 3,002,396 2,126,016 9,524,714 18,169,076 464,300 33,286,502

Depreciation 225,420 50,274 1,996,713 621,849 187,659 3,081,915

Accumulated Depreciations on deletions - - - - - -

Accumulated Depreciation as of March 31,2016 3,227,816 2,176,290 11,521,427 18,790,925 651,959 36,368,417

Carrying value as of March 31, 2016 729,787 329,889 9,996,176 1,841,202 335,719 13,232,773

Carrying value as of April 1, 2015 664,024 138,544 11,465,284 2,463,051 523,378 15,254,281

11B.Intangible AssetsThe Changes in the carrying value of Intangible Assets for the year ended March 31,2017 are as follows:

Particulars Software(Amt. Rs.)

Total(Amt. Rs.)

Gross Carrying value as of April 1, 2016 - -

Additions 700,000 700,000

Deletions - -

Gross Carrying value as of March 31, 2017 700,000 700,000

Accumulated Amortization as of April 1, 2016 - -

Amortization Expenses 700,000 700,000

Accumulated amortizations on deletions - -

Accumulated Amortization as of March 31,2017 700,000 700,000

Carrying value as of March 31, 2017 - -

Carrying value as of April 1, 2016 - -

The Changes in the carrying value of Intangible Assets for the year ended March 31,2016 are as follows:


Total(Amt. Rs.)


Additions - -

Deletions - -

Gross Carrying value as of March 31, 2016 - -

The Changes in the carrying value of Property, plant and equipment for the year ended March 31,2016 are as follows:

Pen India Limited64


Total(Amt. Rs.)


Amortization Expenses - -


Accumulated Amortization as of March 31,2016 - -



12. Non Current Investments (Unquoted)Particulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

(Valued at cost less other than temporary diminution in value, if any)

1 Investment in fully paid- up Equity Shares (Refer Note 29)

i. Wholly owned subsidiaries

10,000 Equity Share of Rs 10/ - each of Propmax Developers & Holders Private Limited (P.Y. Nil)

100,000 -

10,000 Equity Share of Rs 10/ - each of Play My movie Private Limited (P.Y. Nil)

100,000 -

75,00,000 Equity Share of Rs 10/ - each of Bollywood Times Private Lim-ited (P.Y. Nil)

75,000,000 -

75,200,000 -

2 Investment in Associates (LLP's) (Refer Note 36)

Share in Breakthrough Films LLP 25,000 -

Debit Balance in Current Account of Breakthrough Films LLP -7,000 -

Share in Brightlight Pictures LLP 25,000 -

Debit Balance in Current Account of Brightlight Pictures LLP -7,187 -

Share in Pen Production No 1 LLP 25,000 -

Debit Balance in Current Account of Pen Production No 1 LLP -7,173 -

Share in Wizart Entertainment LLP 25,000 -

Debit Balance in Current Account of Wizart Entertainment LLP -7,000 -

71,640 -

Total 75,271,640 -

13. Long term Loans and AdvancesUnsecured, considered good (unless otherwise stated)

a. Capital Advances - 2,855,741

b. Security Deposits 101,470 601,470

c. Loans and advances to related parties

Loans and advances to wholly owned subsidiary companies (Refer Note 29 ) 15,128,428 -

All the above loans and advances have been given for business purposes.

Loans and Advances shown above, fall under the category of ‘Long Term Loans & Advances’ in nature of Loans and are re-payable after 3 years


Particulars 31.03.2017(Amt Rs.)

31.03.2016(Amt Rs.)

d. Other Loans & Advances

Advance Income tax (Net of provisions) 8,772,698 99,633,424

MVAT Receivable 82,872 29,459

Other Loans & Advances 6,018,631 9,268,631

30,104,099 112,388,725

14. Current Investmentsa. Investment in Liquid Mutual Funds Units

BSL Medium Term Plan 204,600,000 100,000,000

Deutsche Mutual Fund - 50,000,000

Franklin Templeton Mutual Fund Collection A/c 150,000,000 150,000,000

Icici Regular Income Fund- Growth 78,165,960 78,165,960

IDFC Arbitrage Fund- Collection Account - 50,000,000

KOTAK EQUITY ARBITRAGE FUND - 75,000,000

DSP Blackrock Mutual Fund Collection Account 54,700,000 -

ICICI PRUDENTIAL FMP SERIES 79-1218 FUND 50,000,000 -

Kotak Medium Term Fund- Growth 82,214,029 -

Reliance Regular Savings Fund 50,000,000 -

669,679,989 503,165,960

Aggregate amount of quoted investments 669,679,989 503,165,960

Market value of quoted investments 745,923,059 503,165,960

Aggregate amount of unquoted investments - -

15. InventoriesWork-in-progress (Various Films) 264,436,620 432,282,068

Finished Goods (Stock of Rights) 187,792,845 -

452,229,465 432,282,068

16. Trade ReceivablesAggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment.

Unsecured, considered good (A) 2,302,934 13,316,231

Other Trade receivables (Due for a period less than six months)

Unsecured, from companies under the same management 8,700 1,432,103

Unsecured, considered good (B) 100,841,935 299,474

103,153,569 15,047,808

17. Cash and cash equivalentsi. Cash and cash equivalents

a. Balance with Banks in current accounts 11,613,472 51,596,753

b. Cash on hand 8,069,274 8,765,992

19,682,746 60,362,745

Pen India Limited66

18. Short-term loans and advancesParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Other loans and advances 50,073,380 82,853,703

50,073,380 82,853,703

19. Other Current Assetsi. Prepaid Expenses 533,459 -

ii. Advance to vendors 1,049,192 1,136,434

1,582,651 1,136,434

20. Revenue from operations(a) Sale of Rights/ products 737,363,455 558,009,158

(b) Sale of Services 118,572,448 115,367,158

(c) Distribution & Theatrical Revenue 670,321,637 722,644,754

(c) Other Operating revenue 30,172,339 1,647,240

1,556,429,878 1,397,668,310

(d) Less: Service Tax 88,522,448 25,367,158

Net revenue from operations 1,467,907,430 1,372,301,152

21. Other IncomeInterest Income 44,787,029 68,280,075

Other non-operating income 17,406,205 23,713,541

62,193,235 91,993,616

22. Cost of SalesStock at the beginning of the period 43,419,194

Purchase - Rights 1,273,109,750 1,116,169,113

- Compact Discs / Video Tapes - 485,892

- Distribution Cost 98,497,399 77,339,017

- Marketing Cost 129,019,322 -

- Other Cost 90,879,821 115,416

1,591,506,293 1,237,528,632

Less : Stock at the end of the period

Under Production - Films 264,436,620 -

Stock in Trade - Rights 187,792,845 -

1,139,276,827 1,237,528,632

23. Employee benefits expensesSalaries and wages 18,378,065 7,501,627

Contribution to provident fund and other funds 430,166 359,152

Staff Welfare Expense 522,775 660,968

19,331,006 8,521,746


24. Finance CostParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Interest on

Bank OD and Cash Credit 66,277,243 20,400,846

66,277,243 20,400,846

25. Depreciation and amortisation expensesDepreciation on Property, Plant and Equipment 3,045,942 3,081,915

Amortization on Intangible Assets 700,000 -

3,745,942 3,081,915

26. Other ExpensesElectricity expenses 919,341 858,196

Rent, Rates and Taxes 1,580,964 1,406,773

Repairs and maintenance 770,354 1,038,740

Legal & Professional Charges 12,375,712 14,916,968

Travelling, Conveyance & Lodging 803,046 602,624

Travelling Expenses(Foreign) 42,447 185,575

Postage, Courier & Telephone/Internet Expenses 520,500 552,920

Printing and Stationery 3,727,848 62,999

Octroi Charges - 2,223

Auditors Remuneration 630,000 550,000

Profession Tax for Company 10,000 31,078

Office expenses 664,478 662,839

Interest on Statutory dues 189,426 1,781,142

Bank Charges 1,177,404 20,281

Prior Period Expenses - 394,741

Service Tax 1,701,333 373,844

MVAT Paid 14,540 576,811

Water Charges 33,442 43,894

Advertisement Expenses 1,196,000 294,955

Donation 9,033,300 6,502,200

Others 2,311,464 1,339,770

Food & Beverage 284,554 169,850

Insurance Expenses 111,798 133,812

Motor Car Expenses 86,153 342,129

Registration,Subscription, Renewal & Membership Fees 309,638 100,186

Share of Loss in Associate LLP's 28,360 -

Property Tax 806,543 307,152

Fixed Assets Written off 730,542 -

40,059,187 33,251,701

Payment to Auditor

(Excluding service tax)

Stat Audit Fees 530,000 450,000 Tax Audit Fees 100,000 100,000 Total 630,000 550,000

Pen India Limited68

27. Contingent LiabilityParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Claims against the company not acknowleged as debt 10,686,795 -

Name of Statue

Nature of dues

Amount(Rs.) Period to which the amount related

Forum where dispute is pending/appeal in the

process of being lodged

Service Tax

Service Tax

Demand

43,43,002/- 2008-09 to 2011-12 Office of Assisstant Commissioner , Division VII,

Service tax -VI, Mumbai

Service Tax

Service Tax

Demand

63,43,793/- 2009-10 & 2010-11 Office of the Commissioner of Service tax , Audit-I,

Mumbai

28. Employee BenefitsThe Company has adopted provisions of Accounting Standard 15 “Employee Benefits” for the first time during the year. In accordance with the stipulations of the Standard, the Company has adjusted Rs. 4,42,172/- (net of deferred tax aggregating to Rs. 1,53,036/-) towards the additional liability of Defined Benefit obligation in respect of gratuity and leave encashment up to 31st March, 2016 against the balance of Opening Profit and Loss Balance as at 1st April, 2016.

The company has classified various employee benefits as under:

A. Defined Contribution Plans

The company has recognised the following amounts in the Profit and Loss Account for the year:

i. Contribution to Provident Fund 430,166 359,152

B. Defined Benefit Plans

1. Valuation in respect of Gratuity have been carried out by actuary, as at the Balance Sheet date, based on the following assumptions:

a. Mortality IALM(2006-08) Ult. IALM(2006-08) Ult.

b. Discount Rate (per annum) 6.84% 7.79%

c. Rate of increase in Compensation Levels 10.00% 10.00%

d. Rate of Return(Expected) on Plan Assets - -

e. Withdrarwal Rates 10.00% 10.00%

i. Changes in the Present Value of Obligation

a. Present Value of Obligation of period ( as on 31.03.2016) 327,660 -

b. Interest Cost 25,525 -

c. Past Service Cost - -

d. Current Service Cost 162,010 -

e. Curtailment Cost/(Credit) - -

f. Settlement Cost/(Credit) - -

g. Benefits Paid - -



31.03.2016(Amt Rs.)

h. Actuarial (Gain)/Loss 8,014 -

i. Present Value of Obligation at end of period (as on 31.03.2017) 523,209 -

ii. Changes in the Fair value of Plan Assets

a. Fair Value of Plan Assets at beginning of period - -

b. Expected Return on Plan Assets - -

c. Actuarial Gain/(Loss) - -

d. Employers' Contributions - -

e. Benefits Paid - -

f. Fair Value of Plan Assets at end of period - -

iii. Fair value of Plan Assets


b. Adjustment to Opening Fair Value of Plan Assets - -

c. Actual Return on Paln Assets - -

d. Contributions - -

e. Benefits Paid - -


g. Funded Status -523,209 -

h. Excess of actual over estimated return on Plan Assets - -

iv. Actuarial Gain/(Loss) Recongnized

a. Actuarial Gain/(Loss) for the period (Obligation) -8,014 -

b. Actuarial Gain/(Loss) for the period (Plan Asset) - -

c. Total Gain/(Loss) for the period -8,014 -

d. Actuarial Gain/(Loss) recognized for the period -8,014 -

e. Unrecognized Actuarial Gain/(Loss) at end of period - -

v. Amount recognised in the Balance Sheet

a. Present Value of Obligation as at end of period 523,209 -

b. Fair Value of Plan Assets as at end of period - -

c. Funded Status -523,209 -

d. Unrecognized Actuarial Gain/(Loss) - -

e. Net Asset/ (liability) recognized in the Balance Sheet -523,209 -

vi. Expenses recognised in the Profit and Loss Account

a. Current Service Cost 162,010 -

b. Past Service Cost - -

c. Interest Cost 25,525 -

d. Expected Return on Plan Assets - -



g. Net actuarial (Gain)/Loss for the period 8,014 -

h. Total Expenses recognised in the Profit and Loss Account 195,549 -

Pen India Limited70


31.03.2016(Amt Rs.)

vii. Movements in the Liability recognized in Balance Sheet

a. Opening Net Liability 327,660 -

b. Adjustments to Opening Fair Value of Plan Assets - -

c. Expenses as Above 195,549 -

d. Contribution Paid - -

e. Closing Net Liability 523,209 -

viii. Experience Analysis - Liabilities

a. Actuarial (Gain)/Loss due to Change in Bases 48,258 -

b. Experience (Gain)/Loss due to change in Experience -40,244 -

Total 8,014 -

Experience Analysis - Plan Assets

Experience (Gain)/Loss due to change in Plan Assets - -

ix. Schedule III Details

Current Liability 46,501 -

Non-current Liability 476,708 -

2 Leave Encashment

i. Assumptions as at 31.03.2017 31.03.2016

Mortality IALM(2006-08) Ult. IALM(2006-08) Ult.

a. Discount Rate (per annum) 6.84% 7.79%

b. Rate of increase in Compensation 10.00% 10.00%

c. Rate of Return on Plan Assets - -

d. Withdrawal rates 10.00% 10.00%

ii. Changes in present value of obligations

a. Present Value of Obligation of period (as on 31.03.2016) 114,512 -


c. Past Service Cost - -

d. Current Service Cost 62,080 -



g. Benefits Paid -12,089 -

h. Actuarial (Gain)/Loss -54,765 -

i. Present Value of Obligation at end of period (as on 31.03.2017) 118,188 -

iii. Changes in fair value of plan assets



c. Expected Return on Paln Assets - -

d. Contributions 12,089 -

e. Benefits Paid -12,089 -




31.03.2016(Amt Rs.)

iv. Fair value of plan assets



c. Actual Return on Paln Assets - -

d. Contributions 12,089 -

e. Benefits Paid -12,089 -


g. Funded Status -118,188 -

h. Excess of actual over estimated return on Plan Assets - -

v. Actuarial Gain/(Loss) Recognized

a. Actuarial Gain/(Loss) for the period (Obligation ) 54,765 -

b. Total Gain/(Loss) for the period 54,765 -

c. Actuarial Gain/(Loss) recognized for the period 54,765 -

vi. Amounts to be recognized in the balance sheet and statement of Profit & Loss Account

a. Present Value of Obligation at end of period 118,188 -

b. Fair Value of Plan Assets at end of period - -

c. Funded Status -118,188 -

d. Unrecognized Actuarial Gain/(loss) - -

e. Net Asset/(liability) Recognized in the Balance Sheet -118,188 -

vii. Expenses recognised in the Profit and Loss Account

a. Current Service Cost 62,080 -


c. Expected Return on Plan Assets - -

d. Net actuarial (Gain)/Loss recognized for the period -54,765 -

e. Total Expenses recognised in the Profit and Loss Account 15,765 -

viii. Movements in the liability recognized in balance sheet

a. Opening Net Liability 114,512 -

b. Expenses as above 15,765 -

c. Contribution paid -12,089 -

d. Closing net liability 118,188 -

ix. Experience Analysis - Liabilities

a. Actuarial (Gain)/Loss due to change in bases 2,944 -

b. Experience (Gain)/Loss due to change in experience -57,709 -

Total -54,765 -

x. Schedule III Details

Current Liability 84,375 -

Non-Current Liability 33,813 -

Pen India Limited72

29. The Company has made investments in 100% subsidaries namely Bollywood Times Private Limited (BTPL), Propmax Developer & Holders Pvt. Ltd. and Play My Movie Private Limited agreegating to Rs. 752 Lacs. Further, the Company has also given loans & advances aggregating to Rs. 151.28 Lacs to Propmax Developer & Holders Pvt. Ltd. and Play My Movie Private Limited. The Compnay is also a 50% holder in Wizart Entertainment LLP, Pen Production No.1 LLP, Bright Line Pictures LLP, Breakthrough Films LLP. As per the latest audited Financial Statements of Bollywood Times Private Limited (BTPL), Propmax Developer & Holders Pvt. Ltd., Play My Movie Private Limited for the year ended March 31, 2017 , they have reported losses in the current financial year aggregating to Rs. 135.60 lacs. As per the unaudited Financial Statements of Wizart Entertainment LLP, Pen Production No.1 LLP, Bright Light Pictures LLP, Breakthrough Films LLP provided to us by the management for the year ended March 31, 2017, they have reported losses in the current financial year aggregating to Rs. 28,360/- (Share of Pen India Limited). However, no provision for diminution in value of the investments of subsidiaries is considered as necessary as these companies are in incumbency stage and the investments in them are strategic long -term investments and the diminution in the value is temporary in nature. Investments in Associate LLP's is carried forward net of losses incurred.

30. Managerial RemunerationParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Salary & Allowances 8,655,000 2,475,000

8,655,000 2,475,000

31. Related Party DisclosuresList of Related Parties :

a. Key Management Personnel Mr.Jayantilal Gada

Mr.Dhaval Gada

Mr.Akshay Gada

b. Relative of Key Management Personnel Mrs. Hansa Gada

c. Enterprises where Key Management Personnel or their relatives are able to exercise significant influence


M/s Dhaval & Guroudev Productions Pvt. Ltd.

M/s Play My Movie Pvt.Ltd

M/s Play My Song Pvt.Ltd

M/s Bollywood Times Pvt. Ltd.

M/s Ethnic Enterprises

M/s Propmax Developers & Holders Pvt. Ltd.

M/s Wizart Entertainment LLP

M/s Pen Production No.1 LLP

M/s Bright Light Pictures LLP

M/s Breakthrough Films LLP

M/s Final Cut Media Pvt Ltd.

M/s Pen Music Pvt Ltd.

M/s Propmind Holding and Developers Pvt Ltd.

M/s Maxima Holding and Developers Pvt Ltd.


Disclosure of transactions between the company and related parties and outstanding balances as at the year end:


31.03.2016(Amt Rs.)

a. Key Management Personnel

Remuneration - -

a. Mr.Jayantilal Gada 7,500,000 1,200,000

b. Mr.Dhaval Gada 540,000 1,200,000

c. Mr.Akshay Gada 540,000 -

Professional Fees - -

a. Mr.Jayantilal Gada - 7,000,000

b. Mr.Dhaval Gada 360,000 -

c. Mr.Akshay Gada 360,000 360,600

Bonus Paid

a. Mr.Jayantilal Gada 25,000 25,000

b. Mr.Dhaval Gada 25,000 25,000

c. Mr.Akshay Gada 25,000 25,000

Loan Taken From

Mr.Jayantilal Gada 43,026,363 65,258,072

Loan Repaid to

Mr.Jayantilal Gada 57,676,949 50,747,852

Outstanding Loan

Mr.Jayantilal Gada 6,411 14,674,697

Remuneration/Professional Fees Payable (Outstanding Balance)

a. Mr.Jayantilal Gada - 118,964

b. Mr.Dhaval Gada 130,697 36,241

c. Mr.Akshay Gada 10,920 -

Sale of Car

Mr.Jayantilal Gada 558,932 -

b. Relative of Key Management Personnel

Professional Fees

Mrs. Hansa Gada 2,050,000 -

Bonus Paid

Mrs. Hansa Gada 25,000 -

c. Enterprises where Key Management Personnel or their relatives are able to exercise significant

Rent Paid

M/s Popular Entertainment Network Pvt. Ltd. 840,000 840,000

Pen India Limited74


31.03.2016(Amt Rs.)

Professional Fees

M/s Pen Music Pvt Ltd. 400,000 -

Professional Fees Payable

M/s Pen Music Pvt Ltd. 360,000 -

Interest Income

M/s Play My Movie Pvt Ltd. 50,621 -

M/s Propmax Developers & Holders Pvt. Ltd. 89,287 -

Loan Taken

M/s Popular Entertainment Network Pvt. Ltd. - 8,416,238

Loan Repaid

M/s Popular Entertainment Network Pvt. Ltd. 2,115,157 3,994,529

Loan given to wholly owned subsidiaries

M/s Play My Movie Pvt Ltd. 5,102,511 -

M/s Propmax Developers & Holders Pvt. Ltd. 9,900,000 -

Outstanding Loan taken

M/s Popular Entertainment Network Pvt. Ltd. - 1,275,158

Outstanding Loan given

M/s Play My Movie Pvt Ltd. 5,148,070 -

M/s Propmax Developers & Holders Pvt. Ltd. 9,980,358 -

Investment in Wholly owned subsidiaries

10,000 Equity Share of Rs 10/ - each of Propmax Developers & Holders Private Limited (P.Y. Nil)

100,000 -

10,000 Equity Share of Rs 10/ - each of Play My movie Private Limited (P.Y. Nil) 100,000 -

75,00,000 Equity Share of Rs 10/ - each of Bollywood Times Private Limited (P.Y. Nil)

75,000,000 -

Investment in Associates (LLP's)(50% Share)

Breakthrough Films LLP 25,000 -

Brightlight Pictures LLP 25,000 -

Pen Production No 1 LLP 25,000 -

Wizart Entertainment LLP 25,000 -

Business Auxilliary services rendered to M/s Dhaval & Guroudev Productions Pvt. Ltd.

560,000 1,411,910

O/s Receivable from M/s Dhaval & Guroudev Productions Pvt. Ltd. (Business Auxilliary)

- 1,411,910

O/s Receivable from M/s Dhaval & Guroudev Productions Pvt. Ltd. (Current A/c) 8,700 20,193


32A.Income in Foreign CurrencyParticulars 31.03.2017

(Amt Rs.)31.03.2016

(Amt Rs.)

Theatrical Revenue 130,268 -

130,268 -

32B.Expenditure in Foreign Currency (Accrual Basis)Professional Fees 871,301 -

871,301 -

33. Disclosures for Operating Leasesa. Lease payments recognised in the Profit and Loss Account 840,000 840,000

b. Significant leasing arrangements

i. The company has not paid any interest free security deposits under certain agreements.

ii. Certain agreements provide for increase in rent.

iii. Some of the agreements contain a provision for their renewal.

c. Future minimum lease payments under non-cancellable agreements

i. Not later than one year 840,000 840,000

ii. Later than one year and not later than five years 840,000 840,000

iii. Later than five years - -

34. EPSBasic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The company has not issued any potential equity shares and accordingly, basic earnings per share and diluted earnings per share are the same. Earnings per Share has been computed as under:

Basic/ Diluted

Profit after Taxation (Rupees) 180,270,175 123,411,060

Weighted average number of shares 1,400,000 1,400,000

Basic EPS (Rs. per Equity Share of Rs. 10 each) - 128.76 88.15

35. Segment ReportingThe company acquires, co-produces and distributes Indian films in multiple formats. Film content is monitored and strategic decisions around the business operations are made based on the film content, whether it is new release or library. Hence, Management identifies only one operating segment in the business i.e. film content.

Pen India Limited76

36. Details Relating Investment in Limited Liability Patnership (LLP) in the current yearAs at 31.03.2017 As at 31.03.2016

Name of the LLP Name of the partner in LLP

Total Capital(Amt. Rs.)

Share of each partner in the profit of LLP

Name of the partner in

LLP

Share of each partner in the profit of LLP

1 Wizart Entertainment LLP Pen India Ltd. 50,000 50% NA -

Reshma Kadakia 50,000 50% NA -

2 Pen Production No.1 LLP Pen India Ltd. 50,000 50% NA -


3 Bright Light Pictures LLP Pen India Ltd. 50,000 50% NA -


4 Breakthrough Films LLP Pen India Ltd. 50,000 50% NA -


37. Particulars of loans given and investment made as required by clause (4) of Section 186 of the Companies Act, 2013

Name Nature As at 31.03.2017

(Amt. Rs)

As at 31.03.2016(Amt. Rs.)

Period Rate of Interest

1 Propmax Developers & Holders Private Ltd.

Long Term Loans & Advances

9,980,358 - After a period of 3 years

9% p.a.

2 Play My Movies Private Ltd. Long Term Loans & Advances

5,148,070 - After a period of 3 years

9% p.a.

3 Non Current Investment (Refer Note 12)

Investment 75,271,640 - NA NA

4 Current Investment Investment 669,679,989 503,165,960 NA NA

38. Details of Specified Bank notesParticulars SBN

(Rs.)Other

denomition Notes (Rs.)

Total(Rs.)

Closing Cash in hand as on 08.11.2016 - 8,009,479 8,009,479

Add:- Permitted Receipts - 270,000 270,000

Less:- permitted payments - 294,704 294,704

Less:- Amount deposited in banks - - -

Closing Cash in hand as on 30.12.2016 7,984,775


39. As required by the Companies Act, a Corporate Social Responsibility (CSR) committee has been formed by the Company. CSR objects chosen by the Company primarily consist of promoting education, including special education and employment enhancing vocation skills especially among children,women,elderly and the differently abled and livelihood enhancement projects ; setting up homes and hostels for women and orphans etc. As per the provisions of the Act, gross amount required to be spent by the Company is 17,88,709/- (previous year Rs.9,96,566/-). A total of Rs. 28 lakhs has been spent by the Company during the current year.

40. All loans and advances and accounts receivables are subject to confirmations and considered good and recoverable. Other current assets have a value on realization in the ordinary course of the business at least equal to their carrying amounts .

41. Previous year's figuresPrevious year's figures have been reworked, regrouped, reclassified wherever necessary.




Pen India Limited78

INDEPENDENT AUDITOR’S REPORT

To The Members,Pen India Limited,

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of Pen India Limited (hereinafter referred to as ‘‘the Holding Company’’), it’s subsidiaries (collectively referred to as ‘the Group’) and its associates, comprising of the Consolidated Balance Sheet as at 31 March 2017, the Consolidated Statement of Profit and Loss and the consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information(hereinafter referred to as “the consolidated financial statements”).

Management’s Responsibility for the Financial StatementsThe Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (‘the Act’), (particularly Accounting Standard 21, Consolidated Financial Statements).

The respective Board of Directors of the companies included in the Group and of its associates are responsible for maintenance of adequate accounting records for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit.

While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and by the other auditors in terms of their reports referred to in Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on Consolidated Financial Statements.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of other auditors, referred to in the Other Matter paragraph below, the aforesaid consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the consolidated balance sheet, of the state of affairs of the Group and its associates as at March 31, 2017;


ii. In the case of the consolidated statement of profit and loss, of the profit of the Group and its associates for the year ended on that date; and

iii. In the case of the consolidated cash flow statement, of the cash flows of the Group and its associates for the year ended on that date.

Other Mattersa. We did not audit the financial Statements of subsidiary Companies whose financial statements reflect total assets of Rs. 23.94

crores as at March 31, 2017, total revenues of Rs. 15,000/- and net cash flows of Rs.11.58 Lakhs for the year then ended. These fi-nancial statements have been audited by other auditors whose reports have been furnished to us and our opinion is based solely on the reports of the other auditors.

b. We have relied on the unaudited financial statements of four associates wherein the Group’s share of net loss aggregates Rs. 28,360/- for the year ended March 31, 2017. These unaudited financial statements as approved by the Board of Directors of the Company has been furnished to us by the Management and our report in so far as it relates to the amounts included in respect of these associates, is based solely on such approved unaudited financial statements.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements certified by the Management.

Report on Other Legal and Regulatory Requirements1. As required by section 143(3) of the Act, we report that.

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements.

d. In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors of the Holding Company as on March 31, 2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies, none of the directors of these entities is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls; refer to our Report in “Annexure A”, which is based on the auditors’ reports of the subsidiary companies, incorporated in India.

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, and to our best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations as at 31st March 2017 on the consolidated financial position of the group and its associates – Refer Note 31 – to the consolidated financial statements.

ii. The Group and its associates did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

Pen India Limited80

iii. As per information received and as confirmed by the management, there were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Holding Company, its subsidiary companies and associates incorporated in India.

iv. The Holding Company has provided requisite disclosures in its consolidated financial statements as to holdings as well as dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of accounts maintained by the Holding Company and the respective group entities, as produced to us and based on the consideration of report of other auditors, referred to in the Other Matters paragraph above. Refer Note No. 40 to the consolidated financial statements.





Annexure ‘’A” to the Independent Auditors' Report on the Consolidated Financial Statements of Pen India Limited (Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub - section 3 of Section 143 of the Companies Act, 2013 (“the Act”)In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended 31 March 2017, we have audited the internal financial controls over financial reporting of Pen India Limited (hereinafter referred as the “Holding Company”) and its subsidiaries (the holding company and its subsidiaries together referred to as “the group”) incorporated in India, as of that date.

Management’s Responsibility for Internal Financial ControlsThe respective Board of Directors of the Holding Company and its subsidiaries, all incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by these entities, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on, the Holding Company, its subsidiaries and associates incorporated in India, internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence obtained by us and the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Holding Company, its subsidiaries, associates incorporated in India, internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Pen India Limited82

OpinionIn our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the respective companies, considering the essential components of internal control stated in the Guidance Note.

Other MattersOur aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to standalone financial statements of 3 subsidiaries incorporated in India, is based on the corresponding audited reports of such companies.





CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2017

Particulars Note No. As on31.03.2017

(Amt Rs.)

EQUITY & LIABILITIES1. Shareholders' Funds

a. Share Capital 5 14,000,000 b. Reserves & Surplus 6 481,965,232

2. Non - current Liabilitiesa. Long Term Borrowings 7 148,747,723 b. Long Term Provisions 8 510,521

3. Current Liabilitiesa. Short Term borrowings 9 568,625,583 b. Trade payables 10 90,819,138 c. Other Current Liabilities 11 267,754,596 d. Short Term Provisions 12 598,888

TOTAL 1,573,021,682

ASSETS4. Non Current Assets

a. Property, Plant and Equipment 13A 166,201,685 b. Intangible Assets 13B - c. Intangible Assets under Development 13C 3,746,515 d. Goodwill on Consolidation 9,232,081 e. Non Current Investments 14 55,071,640 f. Deferred Tax Assets(net) 15 3,194,185g. Long Term Loans and Advances 16 14,688,791 h. Other Non-current Assets 17 1,345,480

5. Current Assetsa. Current Investments 18 669,679,989 b. Inventories 19 469,419,530 c. Trade Receivables 20 103,153,569 d. Cash and Cash Equivalents 21 21,146,178 e. Short term Loans and Advances 22 53,515,907 f. Other Current Assets 23 2,626,132

TOTAL 1,573,021,682 Significant Accounting Policies & Notes to Financial Statements 1 to 42




Pen India Limited84

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2017

Particulars Note No. Year ended31.03.2017

(Amt Rs.)

I Revenue from operations 24 1,467,922,430

II Other Income 25 62,053,327

III Total Revenue 1,529,975,757

IV Expenses:

Cost of Sales 26 1,139,264,621

Employee benefit expenses 27 19,331,006

Finance cost 28 74,481,644

Depreciation and amortisation expenses 29 7,059,196

Other Expenses 30 41,832,463

Total Expenses 1,281,968,929

V Profit before tax 248,006,827

VI Tax Expenses:

1. Current Tax 87,640,991

2. Deferred Tax (4,518,531)

3. Short/(Excess)Tax Provision for Earlier Years (1,853,940)

81,268,521

VII Profit / (loss) for the period (XI - XIV) 166,738,307

VIII Earings per equity share 38

1. Basic 119.10

2. Diluted 119.10






CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2017


(Amt Rs.)

A Cash flow from operating activities

Net Profit before Taxation 248,006,827

Adjustments for -

Fixed Assets Written Off 1,289,474

Depreciation 7,059,196

Interest Income -44,647,121

Interest Expense 74,481,644

Profit on sale of Mutual Funds -16,643,379

Profit on sale of asset -55,121

21,484,693

Operating profit before working capital changes 269,491,520

Adjustments for -

Increase inTrade and Other Receivable -55,771,655

Decrease/ (Increase) in Inventories -37,137,462

Increase in Short Term Loans and Advances 11,685,901

Increase in other Non-Current Assets -1,337,220

Increase in Other Current Assets -1,042,301

Increase in Short Term Provision 745,963

Increase in Other Current Liabilities 9,956,053

Increase in Trade and Other Payables 184,233,971

111,333,250

Cash generated from operations 380,824,770

Direct Taxes paid (net of refund of taxes) (5,073,676)

Net cash from operating activities 385,898,445

B Cash flow from investing activities

Expenditure on property, plant and equipment -165,083,865

Long term loan recd back /(given) -8,576,100

Purchases of Investments ( Current & Non Current) -396,914,029

Proceeds from sale of Investments 191,643,379

Proceeds from sale of property, plant and equipment 74,890

Interest Income 44,647,121

Dividend Received -

Net cash used in investing activities (334,208,604)

Pen India Limited86


(Amt Rs.)

C. Cash flow from financing activities

Proceeds / (Repayment) from/(of) Borrowings 120,987,498

Capital Introduced by Partners(Associate LLP's) -

Loan Taken from Directors or shareholders 27,743,425

Proceeds / Repayment from/(of) Short-term Borrowings (165,460,572)

Interest paid (74,481,644)

Net cash used in financing activities (91,211,293)

Net (decrease)/increase in cash and cash equivalents (A+B+C) (39,521,452)

Cash and Cash Equivalents at beginning of the year 60,667,631

Cash and Cash Equivalents at end of the year 21,146,178

Notes:

1. The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard – 3 on Cash Flow Statements, issued by the Institute of Chartered Accountants of India.

2. Cash and cash equivalents at the end of the year represents cash and bank balances.

3. Opening cash and cash equivalents have been taken from previous years Audited Balance Sheets.





1. Corporate InformationPEN INDIA LIMITED (“the Company”) is a closely held Public Limited Company incorporated in India.

2. Principles Of Consolidation:The consolidated financial statements relate to PEN India Limited (‘the Company’), its subsidiary companies and associates. The consolidated financial statements have been prepared on the following basis:

i. The financial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses as per Accounting Standard 21 – "Consolidated Financial Statements" notified by Companies (Accounting Standards) Rules, 2006.The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is

recognised in the financial statements as Goodwill or Capital Reserve, as the case may be.

ii. In case of associates where the company directly or indirectly through subsidiaries holds more than 20% of equity, Investments in associates are accounted for using equity method in accordance with Accounting Standard (AS) 23 - "Accounting for investments in associates in consolidated financial statements" issued by the Institute of Chartered Accountants of India. As per the Transitional Provisions of Accounting Standard 23 - "Accounting for investments in associates in consolidated financial statements" investment in an associate is accounted for in consolidated financial statements in accordance with this Standard. The carrying amount of investment in the associate should be brought to the amount that would have resulted had the equity method of accounting been followed as per this Standard since the acquisition of the associate.The corresponding adjustment in this regard should be made in the retained earnings in the consolidated financial statements.

The list of subsidiary companies and associates which are included in the consolidation and the Group’s holdings therein are as under:

Name of the Company Ownershipin %

Country of Incorporation

Indian Subsidiaries:

M/s Propmax Developers & Holders Private Limited 100% India

M/s Play My Movie Private Limited 100% India

M/s Bollywood Times Private Limited 100% India

Associates:

M/s Breakthrough Films LLP 50% India

M/s Brightlight Pictures LLP 50% India

M/s Pen Production No 1 LLP 50% India

M/s Wizart Entertainment LLP 50% India

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH, 2017

3. Nature of OperationsThe Holding Company was incorporated on 29th August 2000 to carry on the business to purchase, take on hire or otherwise acquire, films and television and video with the exhibiting and renting of the same and to sell, give on hire or otherwise the films, talkies and the right so acquired and the company’s production with their exhibiting, distributing and renting rights to theatres both in India and outside, satellite rights, other media rights & to carry on the business

as manufacturers, sellers, distributors, dealers, buyers importers,exporters of audio and video cassettes, records, compact disc, laser disc, electro magnetic devices in any formats, televisions, radios, amplifiers, tape recorders, video recorders, digitalelectronics and other control systems, sound/video transferring and processing, videographics, video vision.

Pen India Limited88

The subsidiary companies, M/s Bollywood Times Private Limited and M/s Play My Movie Private Limited, are involved in the business of development of software applications and M/s Propmax Developers and Holders Private Limited is involved in the business of acquiring and providing real estate on lease and rentals.

All the associate LLP's have been formed to venture into new business opportunities related to allied businesses of the Holding Company.

4. Statement of Significant Accounting PoliciesThese financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis, unless mentioned. GAAP comprises mandatory accounting standards as prescribed under section 133 of the companies Act,2013("The Act") ,the provisions of the Act (to the extent notified). Accounting policies have been consistently applied, except where newly-issued accounting standard is initially adopted or a revision to an existing standard requires a change in the accounting policy hitherto in use.

All the assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of operations and the time between the acquisition of assets and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

The significant accounting policies are as follows -

a. Basis of Accounting-The financial statements are prepared in accordance with the historical cost convention under accrual method of accounting and as a going concern.

b. Use of EstimatesThe preparation of the financial statements in conformity with generally accepted accounting principles ( ' GAAP') requires management to make estimates and assumptions that affect the reported amount of assets and liabilities , revenues and expenses , as well as disclosure of contingent liabilities on the date of the financial statements. Key estimates made by the Company in preparing these financial statements. Key estimates made by the company in preparing these financial statement include useful lives of assets as well as utilization of economic benifits from these assets, accrual of expenses , recoverability of trade receivables and deffered tax assets . Management belives that the estimates made in the preparation of financial statement are prudent and resonable . Actual results may differ

from those estimates. Any revision to accounting estimates is recognised prospectively, in the period in which revisions are made.

c. Revenue Recognitioni. Revenue from Sale of Rights is recognised on

fulfillment of the following criteria• Persuasive evidence of a sale or licensing

arrangement with a customer exists.• The film is complete and, in accordance with

the terms of the arrangement, either has been delivered or is available to be delivered.

• The gross revenue is fixed or determinable.• The license period of the arrangement

has begun and the customer can begin its exploitation or exhibition.

• Collection is reasonably assured.

ii. Revenue from film exhibition is recognised when the said film is exhibited in theatres and the final account of the said film is received from various theatre owners. If the film is exhibited in the last 3 months of the Financial Year, the gross revenue received from theatrical owners would be reduced from the cost of the film and if there is any balance cost, the same would be carried forward to the subsequent year to be written off in the subsequent year after adjustments of any receipts in subsequent year and if there is a credit balance in the cost after crediting the receipts to the cost of the film, the same would be transferred to profit & loss account.

iii. Revenue from Sale of Compact Discs and VideoTapes is recognised upon passing of title to the customers, which generally coincides with the delivery.

iv. Advertisement Revenue is recognised when the commercial appears before the public i.e. on telecast.

v. Royalty Income is recognised on the basis of information submitted by the customer.

vi. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue comprises the fair value of the consideration received or receivable for the sale of goods, net of goods and service tax, rebates and discounts.

vii. Service Income : Revenue is recognised upon the rendering of services. Revenue is not recognised to the extent when there are significant uncertainties regarding recovery of the consideration.


d. Other Income i. Interest income is recognised on a time proportion

basis taking into account the amount outstanding and the rate applicable.

ii. On disposal of investments, the difference between the carrying amount and the disposal proceeds is recognised in the Statement of Profit and Loss.

e. Property, plant and equipment:Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management. The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The useful lives and residual values of the Company’s assets are determined as per Schedule II of the Companies Act, 2013. Depreciation for assets purchases / sold during a period is proportionately charged.

Repairs and maintenance costs are recognized in net profit in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

Fully depreciated assets are retained in the financial statements until they are no longer in use. The gain or loss on disposal or retirement of an item of fixed assets recognised in the income statement is the difference between the net sales proceeds and carrying amount of relevant assets.

f. Intangible assetsIntangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

g. Content AdvancesAdvances arepaid to producers/owners of the film , in terms of the agreements entered into with them , for acquisition of associated rights . All advances are

reviewed by the management periodically , considering facts of each case, to determine recoverability. These advances are transferred to film rights at the point of exploitation.

h. Investmentsi. Investments that are readily realisable and intended

to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments.

ii. Current investments are carried at lower of cost and fair value determined on an individual investment basis.

iii. Long-term investments are carried at cost. However, provision for diminution in the value of investments, if any, is made to recognise a decline, other than temporary in nature.

i. InventoriesItems of inventory are valued on the basis given below:In case of Holding Company -i. Stock of Work in Progress - The cost of production

of various films are accumulated under this head. All the cost incurred for production of a particular film is debited to particular picture account and is transferred to revenue account only when the said particular film is released / exibited in theatres.

ii. Stock of Rights - Finished Goods - Stock of Rights are valued at cost of purchase.

In case of Subsidiary Companies -The cost of finished goods and work-in-progress included cost of material and supplies, labour cost, and other direct costs as well as the appropriate portion of production overheads.

j. Impairment of Assets Impairment loss is provided to the extent the carrying amount of assets exceed their recoverable amount. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each balance sheet date. If any such indication exists, the asset's recoverable amount is estimated. An imapairment loss is recognised whenever the

Pen India Limited90

carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.

k. Provisions & ContingenciesA provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither regognised nor disclosed in the financial statements.

l. Employee BenefitsIn case of Holding Company -i. Short-term Employee Benefits

a. Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii. Long-term Employee Benefitsa. Defined Contribution Plans

The company has Defined Contribution Plans for post employment benefits in the form of Provident Fund which is administered through Government of India. Provident Fund Scheme is classified as Defined Contribution Plans as the company has no further obligation beyond making the contributions. The company's contributions to Defined Contribution Plans are charged to the Profit and Loss Statement as incurred. The expense related to other post employment and long term benefits is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

In case of Subsidiary Companies -Retirement Benefits:

a. The Companies are not covered under the provisions of Provident Fund Act.

b. Gratuity is accounted on cash basis.

c. Provision for Leave Encashment is accrued and provided for at the end of the financial

year, the same is computed by applying the present salary rate on the accumulated leave to the credit of employees.

m. LeasesThe Company has evaluated all existing leases as "Operating Leases" . Aggregate of lease rentals payable under non - cancellable operating lease arrangemnts ( over the initial and subsequent periods of lease ) are charged to the Statement of Profit and Loss on a straight line basis over the non-cancellable period of the lease.

n. Foreign Currency TransactionsTransactions in foreign currencies are accounted at exchange rates prevalent on the date of the transaction. Foreign currency monetary assets and liabilities at the period end are translated using the exchange rates prevailing at the end of the period. All exchange differences are recognised in the Statement of Profit & Loss . Non monetary foreign currency items are recorded using the exchange rates that existed when the values were determined accordingly. The reporting currency of the Company is Indian Rupee.

o. Taxes on IncomeProvision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from “timing differences” between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

p. Earnings per ShareBasic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

q. Cash and cash equivalentsCash and cash equivalents for the purposes of cashflow


statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

r. As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company's separate financial statements.

s. As this is the first time that the Consolidated Financial Statements of Holding company are prepared and the relationship of Holding - Subsidiary - Associate has come into existence, according to Transitional Provisions of Accounting Statndard - 21 on "Consolidated Financial Statements" notified by Companies (Accounting Standards) Rules, 2006, comparative figures for the previous period are not presented.

5. Share CapitalParticulars 31.03.2017

(Amt Rs.)

Authorized shares:

50,00,000 Equity shares of Rs.10/-each 50,000,000

50,000,000

Issued, Subscribed and fully paid up shares

14,00,000 Equity Shares of Rs. 10/- each fully paid-up 14,000,000

Total issued, subscribed and fully paid up share capital 14,000,000

5.1 Reconciliation of the shares at the beginning and at the end of the reporting period


31.03.2017(Amt Rs.)

Equity shares of Rs. 10/- each

At the beginning of the period 1,400,000 14,000,000

Add: Issued during the period - -

Outstanding at the end of the period 1,400,000 14,000,000

5.2 Terms/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 for one vote per share.

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

5.3 List of Shareholders holding more than 5% of total Issued Shares


31.03.2017(% Holding)

Mr. Jayantilal V. Gada 1,399,950 99.99%

6. Reserves & SurplusParticulars 31.03.2017

(Amt Rs.)

I Securities Premium Reserve

Balance as per last Balance Sheet of Holding Company 36,000,000

Add: Premium on shares issued during the year -

Closing Balance 36,000,000

Pen India Limited92

7. Long Term BorrowingsParticulars 31.03.2017

(Amt Rs.)

Unsecured Borrowings

Loan From Directors 27,760,225

27,760,225

Loans from Director Mr Jayantilal Gada are interest free and long term in nature.

Secured Borrowings

HDFC Limited-Term Loan 120,987,498

HDFC Limited Term Loan is secured against commercial property in the name of M/s Propmax Developers & Holders Private Limited

120,987,498


148,747,723

8. Long Term ProvisionsProvision for Employee Benefits

Provision for Gratuity 476,708

Provision for Leave Encashment 33,813

510,521

9. Short Term Borrowingsa. Secured Loans repayable on demand from

Banks - Overdraft 568,619,172

Bank Overdraft from YES Bank Limited is secured against Property i.e. Pen House (owned by M/s Popular Entertainment Pvt Ltd, a related company) and personal guarantee of Chairman and Managing Director Mr.Jayantilal Gada, Outstanding as on 31.03.2017 Rs. 1.77 Crs.

Bank Overdraft from BNP Paribas Bank and HDFC Banks are secured against Mutual Funds owned by the company and Popular Entertainment Network Private Limited (Related Party)


II Surplus - Balance in the Statement of Profit and Loss

Balance as per last Balance Sheet of Holding Company 270,332,066

Add : Current Year Profits 166,738,307

Add : Pre-acquisition Loss of Subsidiary Companies of Current year 9,212,356

Less: Share of Loss in Associate LLP's 28,360

Less: Charge on account of transitional provisions under Accounting Standard 15 (Net of De-ferred Tax)

289,136

Net Surplus in the Statement of Profit and Loss 445,965,232

Total Reserves and Surplus 481,965,232



b. Unsecured Loans

Loan from Director 6,411

568,625,583

The above unsecured loans are interest free


10. Trade PayablesParticulars 31.03.2017

(Amt Rs.)

Trade Payables -

a. Trade Payables due to Micro and Small Enterprises 979,680

b. Trade Payables due to other than Micro and Small Enterprises 89,839,458

For the year and as at March 31, 2017 and March 31, 2016, there are no interests due/paid/payable to Micro and Small Enterprises

90,819,138

The details of amounts outstanding to Micro, Small and Medium Enterprises is based on information available with the Company

11. Other Current liabilitiesStatutory Liabilities 37,213,375

HDFC Limited (Current Maturities of Long Term Debt) 9,906,494

Advances Received From Customers 220,588,347

Other Payables

Audit fees payable 34,500

Electricity Bill Payable 11,880 46,380

267,754,596

12. Short Term ProvisionsProvision for Employee Benefits

Provision for Gratuity 46,501

Provision for Leave Encashment 84,375

130,876

Provision for Duties & Taxes

EPF 394,059

ECIS 61,041

Equalisation Levy Tax 13,037

Profession Tax -125

468,012

598,888

Pen India Limited94

13A. Property, Plant and Equipment The Changes in the carrying value of Property, plant and equipment for the year ended March 31,2017 are as follows:

Particulars Building(Amt. Rs.)

Plant & Machinery(Amt. Rs.)

Computer (Amt. Rs.)



Office Equipments

(Amt. Rs.)

Total(Amt. Rs.)

Gross Carrying value as of April 1, 2016 - 3,957,603 2,506,179 21,517,604 20,632,127 987,678 49,601,190

Additions 156,943,617 98,402 4,052,416 179,256 - - 161,273,691

Deletions/Write off - - - - 19,930,127 - 19,930,127

Gross Carrying value as of March 31, 2017

156,943,617 4,056,005 6,558,595 21,696,860 702,000 987,678 190,944,754

Accumulated Depreciation as of April 1, 2016

- 3,227,816 2,176,290 11,521,427 18,790,925 651,958 36,368,416

Depreciation 3,313,254 193,108 279,285 2,053,190 376,551 143,809 6,359,196

Depreciation of Subsidiaries shown in Cost of Sales

- - 631,589 4,752 - - 636,341

Accumulated Depreciations on deletions/write off

- - - - 18,620,884 - 18,620,884

Accumulated Depreciation as of March 31,2017

3,313,254 3,420,923 3,087,163 13,579,369 546,592 795,768 24,743,069

Carrying value as of March 31, 2017 153,630,363 635,081 3,471,432 8,117,491 155,409 191,911 166,201,685

Carrying value as of April 1, 2016 - 729,787 329,889 9,996,176 1,841,202 335,720 13,232,774

The Changes in the carrying value of Property, plant and equipment for the year ended March 31,2016 are as follows :

Gross Carrying value as of April 1, 2015 - 3,666,420 2,264,560 20,989,998 20,632,127 987,678 48,540,783

Additions - 291,183 241,619 527,605 - - 1,060,407

Deletions - - - - - - -

Gross Carrying value as of March 31, 2016

- 3,957,603 2,506,179 21,517,603 20,632,127 987,678 49,601,190

Accumulated Depreciation as of April 1, 2015

- 3,002,396 2,126,016 9,524,714 18,169,076 464,300 33,286,502

Depreciation - 225,420 50,274 1,996,713 621,849 187,659 3,081,915

Accumulated Depreciations on deletions - - - - - - -

Accumulated Depreciation as of March 31,2016

- 3,227,816 2,176,290 11,521,427 18,790,925 651,959 36,368,417

Carrying value as of March 31, 2016 - 729,787 329,889 9,996,176 1,841,202 335,719 13,232,773

Carrying value as of April 1, 2015 - 664,024 138,544 11,465,284 2,463,051 523,378 15,254,281


13B.Intangible AssetsThe Changes in the carrying value of Intangible Assets for the year ended March 31,2017 are as follows:


Total(Amt. Rs.)


Additions 700,000 700,000

Deletions - -

Gross Carrying value as of March 31, 2017 700,000 700,000


Amortization Expenses 700,000 700,000


Accumulated Amortization as of March 31,2017 700,000 700,000



The Changes in the carrying value of Intangible Assets for the year ended March 31,2016 are as follows:


Total(Amt. Rs.)


Additions - -

Deletions - -








Pen India Limited96

13C.Intangible Assets Under DevelopmentThe Changes in the carrying value of Intangible Assets under Development for the year ended March 31,2017 are as follows:


Total(Amt. Rs.)


Additions 3,746,515 3,746,515

Deletions - -

Gross Carrying value as of March 31, 2017 3,746,515 3,746,515





Carrying value as of March 31, 2017 3,746,515 3,746,515


The Changes in the carrying value of Intangible Assets under Development for the year ended March 31,2016 are as follows:


Total(Amt. Rs.)


Additions - -

Deletions - -








14. Non Current Investments (Unquoted)Particulars 31.03.2017

(Amt Rs.)

(Valued at cost less other than temporary diminution in value, if any)

1. Investment in Associates (LLP's)

Initial Cost of Investment in M/s Breakthrough Films LLP 25,000

Add/(Less) : Goodwill/(Capital Reserve) at the time of Acquisition -

Post Acquisition Share in Loss of M/s Breakthrough Films LLP -7,000

18,000



Initial Cost of Investment in M/s Brightlight Pictures LLP 25,000


Post Acquisition Share in Loss of M/s Brightlight Pictures LLP -7,187

17,813

Initial Cost of Investment in M/s Pen Production No 1 LLP 25,000


Post Acquisition Share in Loss of M/s Pen Production No 1 LLP -7,173

17,827

Initial Cost of Investment in M/s Wizart Entertainment LLP 25,000


Post Acquisition Share in Loss of M/s Wizart Entertainment LLP -7,000

18,000

Total 71,640

2. Investments in Mutual Funds (Quoted)

ICICI Prudential Mutual Fund 55,000,000

Market Value of Quoted Investments 55,086,317

Total 55,071,640

15. Deferred tax Asset/(Liabilities) (Net)i. PEN India Limited(Holding Company)

Deferred tax Asset/(liability) on account of -

Depreciation 3,100,433

Gratuity 181,083

Leave Encashment 40,905

Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same government taxation laws.

Opening Net Liability -1,324,346

Closing Net Asset/(Liability) 4,646,767

Current Year Deferred Tax Asset / (Liability) 3,322,421

ii. Bollywood Times Private Limited(subsidiary)

Opening Net Liability -

Closing Net Asset/(Liability) -128,236

Current Year Deferred Tax Asset / (Liability) -128,236

Pen India Limited98

16. Long term Loans and AdvancesParticulars 31.03.2017

(Amt Rs.)

Unsecured, considered good (unless otherwise stated)

a. Capital Advances -

b. Security Deposits 101,470

c. Loans and advances to related parties -

d. Other Loans & Advances

Advance Income tax (Net of provisions) 8,485,818

MVAT Receivable 82,872

Other Loans & Advances 6,018,631

14,688,791

17. Other Non-Current AssetsPreliminary Expenses 1,345,480

1,345,480

18. Current Investmentsa. Investment in Liquid Mutual Funds Units

BSL Medium Term Plan 204,600,000

Deutsche Mutual Fund -

Franklin Templeton Mutual Fund Collection A/c 150,000,000

ICICI Regular Income Fund- Growth 78,165,960

IDFC Arbitrage Fund- Collection Account -

KOTAK EQUITY ARBITRAGE FUND -

DSP Blackrock Mutual Fund Collection Account 54,700,000

ICICI PRUDENTIAL FMP SERIES 79-1218 FUND 50,000,000

Kotak Medium Term Fund- Growth 82,214,029

Reliance Regular Savings Fund 50,000,000

669,679,989

Aggregate amount of quoted investments 669,679,989

Market value of quoted investments 745,923,059

Aggregate amount of unquoted investments -

19. InventoriesWork-in-progress (Various Films) 264,436,620

Work-in-progress (Software Applications) 17,190,065

Finished Goods (Stock of Rights) 187,792,845

469,419,530

20. Trade ReceivablesAggregate amount of Trade Receivables outstanding for a period exceeding six months from the date they are due for payment.

Unsecured, considered good (A) 2,302,934



Other Trade receivables (Due for a period less than six months)

Unsecured, from companies under the same management 8,700

Unsecured, considered good (B) 100,841,935

103,153,569

21. Cash and cash equivalentsi. Cash and cash equivalents

a. Balance with Banks in current accounts 13,051,169

b. Cash on hand 8,095,009

21,146,178

22. Short-term loans and advancesCapital Advances 3,442,527

Other loans and advances 50,073,380

53,515,907

23. Other Current Assetsi. Prepaid Expenses 770,927

ii. Advance to vendors 1,405,925

iii. Preliminary Expenses 449,280

2,626,132

24. Revenue from operationsa. Sale of Rights/ products 737,363,455

b. Sale of Services 118,572,448

c. Distribution & Theatrical Revenue 670,321,637

d. Licence Fees 15,000

e. Other Operating revenue 30,172,339

1,556,444,878

f. Less: Service Tax 88,522,448

Net revenue from operations 1,467,922,430

25. Other IncomeInterest Income 44,647,121

Other non-operating income 17,406,205

62,053,327

26. Cost of SalesStock at the beginning of the period

Purchase - Rights 1,273,109,750

- Compact Discs / Video Tapes -

- Distribution Cost 98,497,399

- Marketing Cost 129,019,322

Pen India Limited100


- Application Development Expenses and related Expenses 17,177,858

- Other Cost 90,879,821

1,608,684,151

Less : Stock at the end of the period

Under Production - Films 264,436,620

Stock in Trade - Rights 187,792,845

Application Software under Development 17,190,065

1,139,264,621

27. Employee benefits expensesSalaries and wages 18,378,065

Contribution to provident fund and other funds 430,166

Staff Welfare Expense 522,775

19,331,006

28. Finance CostInterest on -

Bank OD and Cash Credit 66,277,243

HDFC Term Loan 8,204,401

74,481,644

29. Depreciation and amortisation expensesDepreciation on Property, Plant and Equipment 6,359,196

Amortization on Intangible Assets 700,000

7,059,196

30. Other ExpensesElectricity expenses 952,047

Rent, Rates and Taxes 1,580,964

Repairs and maintenance 1,030,569

Legal & Professional Charges 12,375,712

Travelling, Conveyance & Lodging 803,046

Travelling Expenses(Foreign) 42,447

Postage, Courier & Telephone/Internet Expenses 520,500

Printing and Stationery 3,727,848

Auditors Remuneration 756,500

Profession Tax for Company 10,000

Office expenses 664,478

Interest on Statutory dues 189,426

Bank Charges 1,177,404

Service Tax 1,701,333

MVAT Paid 14,540

Water Charges 33,442



Advertisement Expenses 1,196,000

Donation 9,033,300

Others 2,312,586

Food & Beverage 284,554

Insurance Expenses 111,798

Motor Car Expenses 86,153

Registration,Subscription, Renewal & Membership Fees 309,638

Registration Fees 217,400

Society Maintenance 410,788

Premilinary Expenses Written off 253,480

Property Tax 1,305,968

Fixed Assets Written off 730,542

41,832,463

Payment to Auditor

(Excluding service tax)

Stat Audit Fees 656,500 Tax Audit Fees 100,000 Total 756,500

31. Contingent LiabilityClaims against the Holding company not acknowleged as debt: 10,686,795

Name of Statue

Nature of dues

Amount(Rs.)

Period to which the amount related

Forum where dispute is pending/appeal in the process of being lodged

Service Tax

Service Tax

Demand

43,43,002/- 2008-09 to 2011-12 Office of Assisstant Commissioner, Division VII, Service tax -VI, Mumbai

Service Tax

Service Tax

Demand

63,43,793/- 2009-10 & 2010-11 Office of the Commissioner of Service tax, Audit-I, Mumbai

32. Employee BenefitsThe Holding Company has adopted provisions of Accounting Standard 15 “Employee Benefits” for the first time during the year. In accordance with the stipulations of the Standard, the Company has adjusted Rs. 4,42,172/- (net of deferred tax aggregating to Rs. 1,53,036/-) towards the additional liability of Defined Benefit obligation in respect of gratuity and leave encashment up to 31st March, 2016 against the balance of Opening Profit and Loss Balance as at 1st April, 2016.

The company has classified various employee benefits as under:

A. Defined Contribution Plans

The company has recognised the following amounts in the Profit and Loss Account for the year:

i. Contribution to Provident Fund 430,166



B. Defined Benefit Plans

1. Valuation in respect of Gratuity have been carried out by actuary, as at the Balance Sheet date, based on the following assumptions:

a. Mortality IALM(2006-08) Ult.

b. Discount Rate (per annum) 6.84%

c. Rate of increase in Compensation Levels 10.00%

d. Rate of Return(Expected) on Plan Assets -

e. Withdrarwal Rates 10.00%

i. Changes in the Present Value of Obligation

a. Present Value of Obligation of period ( as on 31.03.2016) 327,660

b. Interest Cost 25,525

c. Past Service Cost -

d. Current Service Cost 162,010

e. Curtailment Cost/(Credit) -

f. Settlement Cost/(Credit) -

g. Benefits Paid -

h. Actuarial (Gain)/Loss 8,014

i. Present Value of Obligation at end of period (as on 31.03.2017) 523,209

ii. Changes in the Fair value of Plan Assets

a. Fair Value of Plan Assets at beginning of period -

b. Expected Return on Plan Assets -

c. Actuarial Gain/(Loss) -

d. Employers' Contributions -

e. Benefits Paid -

f. Fair Value of Plan Assets at end of period -

iii. Fair value of Plan Assets


b. Adjustment to Opening Fair Value of Plan Assets -

c. Actual Return on Paln Assets -

d. Contributions -

e. Benefits Paid -


g. Funded Status -523,209

h. Excess of actual over estimated return on Plan Assets -

iv. Actuarial Gain/(Loss) Recongnized

a. Actuarial Gain/(Loss) for the period ( Obligation) -8,014

b. Actuarial Gain/(Loss) for the period ( Plan Asset) -

c. Total Gain/(Loss) for the period -8,014

d. Actuarial Gain/(Loss) recognized for the period -8,014

e. Unrecognized Actuarial Gain/(Loss) at end of period -



v. Amount recognised in the Balance Sheet

a. Present Value of Obligation as at end of period 523,209

b. Fair Value of Plan Assets as at end of period -

c. Funded Status -523,209

d. Unrecognized Actuarial Gain/(Loss) -

e. Net Asset/ (liability) recognized in the Balance Sheet -523,209

vi. Expenses recognised in the Profit and Loss Account

a. Current Service Cost 162,010

b. Past Service Cost -

c. Interest Cost 25,525

d. Expected Return on Plan Assets -



g. Net actuarial (Gain)/Loss for the period 8,014

h. Total Expenses recognised in the Profit and Loss Account 195,549

vii. Movements in the Liability recognized in Balance Sheet

a. Opening Net Liability 327,660

b. Adjustments to Opening Fair Value of Plan Assets -

c. Expenses as Above 195,549

d. Contribution Paid -

e. Closing Net Liability 523,209

viii. Experience Analysis - Liabilities

a. Actuarial (Gain)/Loss due to Change in Bases 48,258

b. Experience (Gain)/Loss due to change in Experience -40,244

Total 8,014

Experience Analysis - Plan Assets

Experience (Gain)/Loss due to change in Plan Assets -

ix. Schedule III Details

Current Liability 46,501

Non-current Liability 476,708

2. Leave Encashment

i. Assumptions as at

Mortality IALM(2006-08) Ult.

a. Discount Rate (per annum) 6.84%

b. Rate of increase in Compensation 10.00%

c. Rate of Return on Plan Assets -

d. Withdrawal rates 10.00%



ii. Changes in present value of obligations

a. Present Value of Obligation of period ( as on 31.03.2016) 114,512


c. Past Service Cost -

d. Current Service Cost 62,080



g. Benefits Paid -12,089

h. Actuarial (Gain)/Loss -54,765

i. Present Value of Obligation at end of period ( as on 31.03.2017) 118,188

iii. Changes in fair value of plan assets



c. Expected Return on Paln Assets -

d. Contributions 12,089

e. Benefits Paid -12,089


iv. Fair value of plan assets



c. Actual Return on Paln Assets -

d. Contributions 12,089

e. Benefits Paid -12,089


g. Funded Status -118,188

h. Excess of actual over estimated return on Plan Assets -

v. Actuarial Gain/(Loss) Recognized

Actuarial Gain/(Loss) for the period ( Obligation ) 54,765

Total Gain/(Loss) for the period 54,765

Actuarial Gain/(Loss) recognized for the period 54,765

vi. Amounts to be recognized in the balance sheet and statement of Profit & Loss Account

a. Present Value of Obligation at end of period 118,188

b. Fair Value of Plan Assets at end of period -

c. Funded Status -118,188

d. Unrecognized Actuarial Gain/(loss) -

e. Net Asset/(liability) Recognized in the Balance Sheet -118,188

vii. Expenses recognised in the Profit and Loss Account

a. Current Service Cost 62,080




c. Expected Return on Plan Assets -

d. Net actuarial (Gain)/Loss recognized for the period -54,765

e. Total Expenses recognised in the Profit and Loss Account 15,765

viii. Movements in the liability recognized in balance sheet

a. Opening Net Liability 114,512

b. Expenses as above 15,765

c. Contribution paid -12,089

d. Closing net liability 118,188

ix. Experience Analysis - Liabilities

a. Actuarial (Gain)/Loss due to change in bases 2,944

b. Experience (Gain)/Loss due to change in experience -57,709

Total -54,765

x. Schedule III Details

Current Liability 84,375

Non-Current Liability 33,813

33. 'The Holding Company has made investments in 100% subsidaries namely M/s Bollywood Times Private Limited (BTPL), M/s Propmax Developer & Holders Pvt. Ltd. and M/s Play My Movie Private Limited agreegating to Rs. 752 Lacs. Further, the Company has also given loans & advances aggregating to Rs.151.28 Lacs to M/s Propmax Developer & Holders Pvt. Ltd. and M/s Play My Movie Private Limited. The Company is also a 50% holder in M/s Wizart Entertainment LLP, M/s Pen Production No.1 LLP, M/s Bright Line Pictures LLP, M/s Breakthrough Films LLP. As per the latest audited Financial Statements of M/s Bollywood Times Private Limited (BTPL), M/s Propmax Developer & Holders Pvt. Ltd., M/s Play My Movie Private Limited for the year ended March 31, 2017, they have reported losses in the current financial year aggregating to Rs. 135.60 lacs. As per the unaudited Financial Statements of M/s Wizart Entertainment LLP, M/s Pen Production No.1 LLP, M/s Bright Light Pictures LLP, M/s Breakthrough Films LLP provided to us by the management for the year ended March 31, 2017, they have reported losses in the current financial year aggregating to Rs. 28,360/- (Share of M/s Pen India Limited).

34. Managerial RemunerationSalary & Allowances 8,655,000

8,655,000

35. Related Party DisclosuresList of Related Parties :

a. Key Management Personnel Mr.Jayantilal Gada

Mr.Dhaval Gada

Mr.Akshay Gada

b. Relative of Key Management Personnel Mrs. Hansa Gada


c. Enterprises where Key Management Personnel or their relatives are able to exercise significant influence


M/s Dhaval & Guroudev Productions Pvt. Ltd.

M/s Play My Song Pvt.Ltd

M/s Ethnic Enterprises

M/s Final Cut Media Pvt Ltd.

M/s Pen Music Pvt Ltd.

M/s Propmind Holding and Developers Pvt Ltd.

M/s Maxima Holding and Developers Pvt Ltd.

Disclosure of transactions between the company and related parties and outstanding balances as at the year end:


a. Key Management Personnel

Remuneration

a. Mr.Jayantilal Gada 7,500,000

b. Mr.Dhaval Gada 540,000

c. Mr.Akshay Gada 540,000

Professional Fees

a. Mr.Jayantilal Gada -



Bonus Paid

a. Mr.Jayantilal Gada 25,000



Loan Taken From

Mr.Jayantilal Gada 43,026,363

Loan Repaid to


Outstanding Loan


Remuneration/Professional Fees Payable (Outstanding Balance)

a. Mr.Jayantilal Gada -



Sale of Car

Mr.Jayantilal Gada 558,932



b. Relative of Key Management Personnel

Professional Fees

Mrs. Hansa Gada 2,050,000

Bonus Paid

Mrs. Hansa Gada 25,000

c. Enterprises where Key Management Personnel or their relatives are able to exercise significant

Rent Paid

M/s Popular Entertainment Network Pvt. Ltd. 840,000

Professional Fees

M/s Pen Music Pvt Ltd. 400,000

Professional Fees Payable

M/s Pen Music Pvt Ltd. 360,000

Loan Taken

M/s Popular Entertainment Network Pvt. Ltd. -

Loan Repaid

M/s Popular Entertainment Network Pvt. Ltd. 2,115,157

Outstanding Loan taken

M/s Popular Entertainment Network Pvt. Ltd. -

Business Auxilliary services rendered to M/s Dhaval & Guroudev Productions Pvt. Ltd. 560,000

O/s Receivable from M/s Dhaval & Guroudev Productions Pvt. Ltd. (Business Auxilliary) -

O/s Receivable from M/s Dhaval & Guroudev Productions Pvt. Ltd. (Current A/c) 8,700

36A.Income in Foreign CurrencyTheatrical Revenue 130,268

130,268

36B.Expenditure in Foreign Currency (Accrual Basis)Professional Fees 871,301

871,301

37. Disclosures for Operating Leasesa. Lease payments recognised in the Profit and Loss Account 840,000

b. Significant leasing arrangements

i. The company has not paid any interest free security deposits under certain agreements.



ii. Certain agreements provide for increase in rent.

iii. Some of the agreements contain a provision for their renewal.

c. Future minimum lease payments under non-cancellable agreements

i. Not later than one year 840,000

ii. Later than one year and not later than five years 840,000

iii. Later than five years -

38. EPSBasic earnings per share has been calculated by dividing profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The company has not issued any potential equity shares and accordingly, basic earnings per share and diluted earnings per share are the same. Earnings per Share has been computed as under:

Basic/ Diluted

Profit after Taxation (Rupees) 166,738,307

Weighted average number of shares 1,400,000

Basic EPS (Rs. per Equity Share of Rs. 10 each) - 119.10

39. Segment ReportingThe holding company acquires, co-produces and distributes Indian films in multiple formats. Film content is monitored and strategic decisions around the business operations are made based on the film content, whether it is a new release or library. The subsidiary companies, M/s Bollywood Times Private Limited and M/s Play My Movie Private Limited, are involved in the business of development of software applications and M/s Propmax Developers and Holders Private Limited is involved in the business of acquiring and providing real estate on lease and rentals.The company has identified three segments viz. Film Content, Development of Software Applications and Real Estate Lease Rentals. Business segments have been identified taking into account the nature of Products and services, the differring risks and returns and the internal business reporting systems.However, according to "Accounting Standard - 17 on Segment Reporting", different identified business segments are not identified as a reportable Segment since - (a) their revenue from sales to external customers and from transactions with other segments are not equal to 10 per cent or more of the total revenue,external and internal, of all segments; (b) their segment results, whether profit or loss, are not equal to 10 per cent or more of - (i) the combined result of all segments in profit, or (ii) the combined result of all segments in loss, whichever is greater in absolute amount; (c) their segment assets are not equal to 10 per cent or more of the total assets of all segments.

40. Details of Specified Bank notesParticulars SBN

(Rs.)Other

denomition Notes (Rs.)

Total(Rs.)

a. Holding Company (PEN India Limited) -

Closing Cash in hand as on 08.11.2016 - 8,009,479 8,009,479




Closing Cash in hand as on 30.12.2016 7,984,775


Particulars SBN (Rs.)

Other denomition Notes (Rs.)

Total(Rs.)

b. Subsidiary Company (M/s Bollywood Times Private Limited) -

Closing Cash in hand as on 08.11.2016 12,000 23,498 35,498



Less:- Amount deposited in banks 12,000 - 12,000

Closing Cash in hand as on 30.12.2016 19,661

c. Subsidiary Company(M/s Propmax Developers & Holders Private Ltd.) -

Closing Cash in hand as on 08.11.2016 - - -

Add:- Permitted Receipts - - -

Less:- permitted payments - - -



d. Subsidiary Company(M/s M/s Play My Movies Private Ltd.) -


Add:- Permitted Receipts - - -

Less:- permitted payments - - -



41. As required by the Companies Act, a Corporate Social Responsibility (CSR) committee has been formed by the Holding Company. CSR objects chosen by the Company primarily consist of promoting education, including special education and employment enhancing vocation skills especially among children,women,elderly and the differently abled and livelihood enhancement projects ; setting up homes and hostels for women and orphans etc. As per the provisions of the Act, gross amount required to be spent by the Company is 17,88,709/- (previous year Rs.9,96,566/-). A total of Rs. 28 lakhs has been spent by the Company during the current year.

42. All loans and advances and accounts receivables are subject to confirmations and considered good and recoverable. Other current assets have a value on realization in the ordinary course of the business at least equal to their carrying amounts .




CORPORATE OFFICE (PEN Studios)

1101, B wing, Fortune TerracesOpp. Citi Mall & PVR ECX & Tanishq, New Link Road

Andheri (W), Mumbai-400053

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pen india limited annual report 2016-2017 - …valoremadvisors.com/pdf/pen-india-2017.pdf · pen...

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