Company has only one class of share referred to as equity share with
The Company is engaged in the production/ making of cinematic and
television content, which requires various types, qualities and
quantities of raw materials and inputs in different denominations. Due
to the multiplicity and complexity of the items it is not practicable
to maintain the quantitative record/ continuous stock register, as the
process of making content is not amenable to the same. Hence
quantitative details are not maintained. Physical stock of finished
content is taken at the end of year. The Ministry of Corporate Affairs
vide its Notification dated February 8, 2011 has granted exemption from
giving quantitative details of para 3(ii)(a)(I) & (2) of Part II,
Schedule VI to the Companies Act, 1956 to manufacturing Companies like
our Company. The Board has given the consent required under the
Arbitration proceedings initiated by the Company against Prasar Bharati
on account of wrongful encashment of bank guarantees of Rs. 75,050,000
were ongoing before former Chief Justice YV Chandrachud. The parties
completed the pleadings before the Arbitrator but unfortunately he
passed away in July 2008 while the cross examinations were on. The
Company had filed a petition before the Hon. High Court at Bombay for
appointment of a sole Arbitrator in place and stead of Justice
Chandrachud in January 2009. The Bombay High Court appointed Justice BN
Srikrishna, former Judge of Hon. Supreme Court of India as Sole
Arbitrator vide order dated November 27, 2009 and the arbitration
proceedings are ongoing. Opinion obtained by the Company from Justice
AM Ahmadi, former Chief Justice of the Supreme Court of India, supports
the Company''s stand that the amount is fully recoverable. In view of
this, the management of the Company does not consider it necessary to
make a provision there against in the accounts. The Company is showing
amount withheld by Prasar Bharti as Long Term Loans and Advances.
Accounting Standard (AS) 26 on Intangible Assets states that in the
absence of persuasive evidence there is a presumption that intangible
assets have a useful life of 10 years. In respect of cinematic content,
the Company has persuasive evidence that the useful life of cinematic
content is over 20 years.
The management has considered the following factors viz. the expected
usage of the asset by the enterprise, typical product life cycles,
technical, technological or other types of obsolescence, expected
actions by competitors or potential competitors, the level of
maintenance expenditure required to obtain the expected future economic
benefits from the asset, the period of control over the asset, the
useful life of the asset and for reasons viz. shelf lives of movies
have substantially increased since 2000, getting better value for
longer lease in excess of ten years, emergence of channels dedicated
only for featuring content more than ten years old, growth in the
numbers of distribution channels, rapid multiplication of remaking,
animation and other new versions etc. is of the view that the useful
life of the cinematic content is over 20 years. Hence, amortisation of
t 46,444,466 is not required to be made. The Company is in line with
International Accounting Practices and this is a step towards complying
with IFRS norms which will become mandatory from 2014.
There is no individual content that is material to the financial
statements of the Company as a whole. There is no content whose title
is restricted. The cinematic content of carrying value of Rs. 413,771,841
is pledged to Yes Bank Ltd as security for working capital loan of Rs.
The total cost of content as at March 31, 2012 is Rs. 443,437,138. Based
on a review of estimates of future realisations taken as a whole, the
management is of the view that future recoverable amount from content
rights to be more than its carrying unamortised cost of content. Hence,
no impairment/ write down is considered necessary on this account.
As per Accounting Standard (AS) 28 on Impairment of Assets, the
Company has assessed whether there is any indications that any assets
has impaired. Since the carrying amount is less than the recoverable
amount, there is no necessity for making any provision for impairment.
During the year, Company operated in only one business segment viz
Related Party Disclosure
In accordance with Accounting Standard (AS) 18 Related Party
Disclosure, the disclosure in respect of transactions with the
Company''s related parties are as given below
i. Subsidiaries of the Company
a. PNC Productions Ltd
b. PNC Wellness Ltd
(wholly owned subsidiary)
ii. Key managerial personnel
a. Pal lab Bhattacharya - Wholetime Director and CEO
b. Rangita Pritish Nandy - Wholetime Director and Creative Director
c. Anand Upadhyay - Company Secretary (Resigned wef January 9, 2012)
d. Rupali Vaidya - Company Secretary (Appointed wef January 9, 2012)
iii. Non executive Directors ;ind their relatives a. Pritish Nandy -
b. Rina Pritish Nandy - Non-Executive Director
c. Udayan Bose - Non-Executive, Independent Director
d. Nabankur Gupta - Non-Executive, Independent Director
e. Vishnu Kanhere - Non-Executive, Independent Director
f. Tapan Chaki - Non-Executive, Independent Director
g. Hema Malini - Non-Executive, Independent Director
h. Ishita Pritish Nandy - daughter of Non-Executive Chairman
The Company has incurred loss during the year. Managerial remuneration
paid/ payable is within the limit of minimum remuneration payable as
per Part II of Schedule XIII of the Companies Act, 1956. The payment of
remuneration is duly approved by the Remuneration Committee.
The company has an investment of Rs. 29,100,000 (LY Rs. 5,100,000) in
wholly owned subsidiary viz PNC Wellness Limited as at March 31, 2012.
Further temporary advances of Rs. 713,510 were receivable as at March 31,
In view of loss, no provision has been made for income tax liability
during the year.
Loans and Advances of f 46,753,181 includes: i) f 15,000,000 advanced
against the Music, Asian and Indian Satellite rights of a film, where
the Company has lien over the exploitation of the said rights and ii) Rs.
31,753,181 being balance amount advanced towards joint production of a
film where the Company has joint re-exploitation rights. The Company
has initiated recovery proceedings in respect of the aforesaid
advances, i) The Company has filed a Summary Suit with the Hon. High
Court at Bombay which is pending hearing and disposal and ii) The
Company has initiated arbitration proceedings which are ongoing before
Justice Smt KK Baam (Retired). The management considers the same are
good and fully recoverable. Legal opinion obtained by the Company from
SF Rego, Judge (Retired), City Civil and Sessions Court, Mumbai,
supports this and consequently no provision has been made in the
accounts at this stage.
Balances of trade receivable, trade payables and loans and advances are
subject to confirmation by the respective parties.
In the opinion of the management investments, current assets and loans
and advances are of the value stated in the financial statements are
realisable in the ordinary course of business. The provisions for all
known liabilities and depreciation are adequate and are not in excess
of the amounts considered, reasonably necessary.
There are no dues payable to the Investor Education and Protection Fund
as at March 31, 2012.
All known liabilities have been provided in the books of accounts.
The previous year figures have been regrouped/ reclassified wherever
necessary to bring conformity to the current year''s presentation.