PVR

The directors have pleasure in presenting the Thirteenth Annual Report
 on the business and operations of the Company and Financial Statements
 for the year ended March 3 1, 2008.
 
 Financial Highlights
 
                                                         (Rs. Lacs)
 
                                               2007-08         2006-07
 
 Income                                         24,470          17,186
 
 Expenditure                                    19,092          13,870
 
 Earnings before depreciation 
 interest and tax (EBIDTA)                       5,378          3,3 16
 
 Depreciation                                    1,510           1,241
 
 Interest                                          681             550
 
 Profit before Tax                               3,187           1,525
 
 Provision for Taxation including 
 Deferred Tax                                    1,081             469
 
 Profit after Tax                                2,106           1,056
 
 Balance brought forward from 
 previous year                                   2,017           1,336
 
 Transfer from Debenture 
 Redemption Reserve
 Profit available for appropriation              4,123           2,392
 
 Appropriations
 
 Transfer to Capital Redemption Reserve          1,000
 
 Interim Dividend
 on Preference Shares                      74               100
 
 on Equity Shares                         230      304      229    329
 
 Corporate Dividend tax                             52              46
 
 Surplus carried to Balance Sheet                2,767           2,017
 
 Financial Review
 
 During the year under review the company has scaled new heights, the
 total income has gone up to Rs. 24,470 lac from Rs. 17,186 lacs in
 previous year reflecting a growth of 42%. Earnings before Interest,
 Depreciation and Tax (EBIDTA) was Rs. 5,378 lacs against Rs. 3,316 lacs
 in previous year, registering a growth of 62%.
 
 Profit after Tax (PAT) increased by 99% from Rs. 1056 lacs in previous
 year to Rs. 2106 lacs for the year under review.
 
 Dividend
 
 During the year under review your Directors declared and paid interim
 dividend for the Financial Year 2007-08 as under:
 
 5% on Redeemable Preference Shares of the Company on prorate basis.
 
 10% on Equity Share Capital of the Company held by the Equity
 Shareholders as on 22nd April, 2008.
 
 Your Directors have recommended that these be treated as the final
 dividends for the year.
 
 Operations Review
 
 During the year under review, your company took an initiative by
 introducing PVR Premiere brand with its first cinema at Select Citywalk
 Mall in Delhi. The PVR Premiere range of cinemas are unique in their
 use of space, facilities and aesthetics and provide unparalleled leg
 rooms, liberal seat width, swanky interiors, state of the art sound and
 projection system which shall offer to movie goers a complete luxurious
 movie watching experience.
 
 The growth in the income was achieved through a healthy mix of growth
 in income of existing cinemas and by opening of new cinemas. The total
 number of patrons who watched movies at our cinemas during the year was
 17.97 million, as compared to 14.73 million in the previous year. The
 average occupancy in our cinemas during the year was 39.9% as compared
 to 42.7% in the previous year. For the full year ended March 2008,
 despite a drop in occupancy, the footfalls from comparable properties
 grew by 4%. This has been achieved through effective film programming,
 leading to a significant growth in average number of shows per day per
 screen across comparable properties in comparison with last year.
 
 New Initiatives
 
 To ramp up its presence across the retail entertainment landscape, your
 company entered into a Joint Venture with Major Cineplex Group, a
 leading and one of the largest film exhibition and retail entertainment
 company based out of Thailand and formed a new company namely PVR bluO
 Entertainment Limited for carrying out the activities of setting-up and
 running Bowling Alleys, Karaoke Centers and Ice Skating Rinks across
 India.
 
 During the year under review, your company has also signed a Memorandum
 of Understanding with M/s Gyan Enterprises Private Limited, a company
 promoted by Mr. Amit Burman of Dabur group and Mr. Rohit Aggarwal to
 enter in to a Joint Venture through a Special Purpose Vehicle namely
 M/s Lite Bite Foods Private Limited for the purpose of running,
 managing and operating Food Courts, Restaurants, Pubs, Coffee Shops
 etc.
 
 New cinemas which commenced operations
 
 During the year under review, your company has commenced operations at
 four new multiplex projects, thereby adding 16 new screens under
 operation.
 
 During the current year also, your company has so far commenced
 operation from three new projects and thereby adding additional 17
 screens to the total tally.
 
 Details of these new cinema properties added by the Company are as
 under :
 
 Name of Property                 Screens      Seats  Commencement date
 
 PVR Baroda                         3          1,094  May-07
 
 PVR Flamez Mall, Ludhiana          4          1,025  Aug-07
 
 PVR Prashant Vihar                 3            786  Aug-07
 
 PVR Select City Walk Saket         6          1,238  Nov-07
 
 PVR Goregaon                       6          1,783  May-08
 
 PVR Ambience Mall, Gurgaon         7          1,194  May-08
 
 PVR Centra Mall, Chandigarh        4          1,150  July-08
 
 The multiplex at Ludhiana is tax-exempted and the multiplex at Goregaon
 Mumbai is also eligible for E-tax exemption as per the state policies.
 
 Your company now operates and manages 101 screens across 25 locations
 in 14 cities spread over Delhi, Haryana, Karnataka, Uttar Pradesh,
 Punjab, Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh and
 Chandigarh.
 
 Subsidiaries
 
 As on March 31, 2008 the Company has four subsidiary companies namely
 M/s PVR Pictures Limited (PVR Pictures), M/s C R Retail Malls (India)
 Private Limited (CRR), M/s Sunrise Infotainment Private Limited (SIPL)
 and M/s PVR bluO Entertainment Limited (PBEL) out of which CRR and SIPL
 are wholly owned subsidiaries of the Company.
 
 PVR Pictures Limited (PVR Pictures)
 
 Your company operates film distribution and production business through
 its subsidiary, PVR Pictures, which is involved in production of Hindi
 films and distribution of Indian and international films. “Taare Zameen
 Par” and “Jaane Tu ya Jaane na” the first two coproduction movies of
 PVR Pictures (co-produced with Aamir Khan Productions Private Limited),
 released during the period received critical acclaim and performed
 strongly at the box office. PVR Pictures is also growing stronger in
 the business of film distribution and has successfully distributed
 various Hollywood and Hindi movies.
 
 PVR Pictures has also recently concluded a Private Equity placement of
 Rs. 120 Crores with The Western India Trustee and Executor Company
 Limited represented by its investment manager ICICI Ventures Funds
 Management Company Limited and JP Morgan Mauritius Holdings IV Limited
 for its 40% stake in the paid up share capital of the company. ICICI
 Venture and JP Morgan each holds 20% paid equity up share capital of
 PVR Pictures.
 
 CR Retail Malls (India) Private Limited (CRR)
 
 M/s CR Retail Malls (India) Private Limited is implementing the seven
 screens Multiplex Project at the Phoenix Mills compound, Lower Parel,
 Mumbai, a prime retail and entertainment destination in Mumbai. The
 project is completed. CRR is in the process of making application for
 the operating licenses for the multiplex and the multiplex is expected
 to start commercial operation soon.
 
 Sunrise Infotainment Private Limited (SIPL)
 
 M/s Sunrise Infotainment Private Limited is operating the six screens
 Multiplex Project at Oberoi Mall, Goregaon Mumbai. The Multiplex is a
 part of a mall development at the prime location of suburb Mumbai.  The
 multiplex was opened for the public on May 8, 2008 and was well
 appreciated by public.
 
 PVR bluO Entertainment Limited (PBEL)
 
 PBEL has recently been incorporated as on March 28, 2008 as subsidiary
 of your Company pursuant to the Joint Venture entered into with Major
 Cineplex Group (Major), a leading and one of the largest film
 exhibition and retail entertainment company based out of Thailand, for
 carrying out the activities of setting-up and running Bowling Alleys,
 Karaoke Centers and Ice Skating Rinks across India.
 
 Pursuant to the Joint Venture Agreement PVR and Major shall hold paid
 up share capital of the PBEL in the ratio of 51:49.
 
 PBEL is in process of setting up its first Bowling Alley at Ambience
 Mall, Guragon..
 
 The Company has obtained an exemption from the Ministry of Corporate
 Affairs Government of India vide its letter no. 47/335/2008-CL-III
 dated 28th May 2008 in terms of Section 212(8) of the Companies Act,
 1956 from attaching the audited accounts of its subsidiaries for the
 financial year 2007-08. In pursuance thereof, the Company undertakes
 that annual accounts of the subsidiary companies and the related
 detailed information for the year ended March 31, 2008 will be made
 available to its investors and subsidiary companies’ investors seeking
 such information at any point of time.  The annual accounts of the
 subsidiary companies are also kept for inspection by any investor at
 the Registered Office of the Company and concerned subsidiary
 companies. The statement required pursuant to the above referred
 approval letters is disclosed after the Consolidated Accounts of the
 Company forming part of this Annual Report.
 
 Corporate Governance
 
 It has always been your Company’s endeavor to excel through good
 Corporate Governance practices.  Corporate Governance is the mechanism
 by which the values, principles, policies and procedures of companies
 are manifested. Effective Corporate Governance is indispensable to
 resilient and vibrant capital markets and investor protection rests on
 this foundation. The core value of corporate governance lies in the
 principles of integrity, fairness, quality, transparency and
 accountability.  Your Company complies with all the provisions of
 Clause 49 of the Listing Agreement.
 
 A report on Corporate Governance, along with a Certificate from
 Practicing Company Secretary and a Certificate from Chairman cum
 Managing Director and CFO, have been included in the Annual Report,
 detailing the compliances of Corporate Governance norms as enumerated
 in Clause 49 of the Listing Agreement.
 
 Management Discussion and Analysis Report
 
 Management Discussion and Analysis Report for the year under review, as
 stipulated under Clause 49 of the Listing Agreement, is presented in a
 separate section forming part of the Annual Report.
 
 Investor Grievance mail address
 
 Your Company has created the following e-mail ID for redressing the
 Investor complaints : cosec@pvrcinemas.com
 
 Directors
 
 During the period, the Board of Directors of your Company has been
 further strengthened by induction of Mr. Sanjay Khanna and Mr. Ravi K
 Sinha as non executive directors.
 
 In accordance with the provisions of Sections 255 and 256 of the
 Companies Act, 1956 and Articles of Association of the company, Mr.
 Vikram Bakshi retires by rotation at the ensuing Annual General Meeting
 and being eligible, offers himself for re-appointment.
 
 Mr. Amit Burman, Director of the Company, has due to his other
 professional commitments, resigned from the Board of Directors of the
 Company with effect from 24th January 2008. The Board places on record
 its sincere appreciation for the contribution made by Mr. Amit Burman.
 
 Mr. Sumit Chandwani, who was nominated as director on the Board to
 represent ICICI Venture Capital and Funds Management Company Limited
 (Investors) pursuant to the Shareholder Agreement dated March 12, 2003
 executed with the Investors, has ceased to be nominee of the Investors
 with effect from October 29, 2007 on Investors diluting its holding
 below 5% in the Company. However, Mr. Chandwani is continuing on the
 Board as an independent director.
 
 Fixed Deposits
 
 During the year under review your Company has not accepted any fixed
 deposits under section 58A of the Companies Act, 1956 read with
 Companies (Acceptance of Deposits) Rules 1975.
 
 Auditors and Auditors’ Report
 
 The Statutory Auditors of the Company, M/s. S.R. Batliboi & Co.,
 Chartered Accountants, New Delhi, hold office until the conclusion of
 the ensuing Annual General Meeting of the Company and are eligible for
 re-appointment and have confirmed that their re-appointment if made,
 shall be within the limits of Section 224(1B) of the Companies Act,
 1956. The Board recommends the re-appointment of S.R. Batliboi & Co.,
 Chartered Accountants as Auditors of the Company.
 
 Directors’ Responsibility Statement
 
 Pursuant to the requirement under Section 217 (2AA) of the Companies
 Act, 1956, with respect to Directors’ Responsibility Statement, the
 Directors confirm:
 
 i) That in the preparation of the annual accounts, the applicable
 accounting standards have been followed and no material departures have
 been made from the same;
 
 ii) That they had selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give true and fair view of the state of affairs of the
 Company at the end of the financial year and of the profit of the
 Company for that period;
 
 iii) That they had taken proper and sufficient care for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv) That they had prepared the annual accounts on a going concern
 basis.
 
 Conservation of Energy, Technology Absorption, Foreign Exchange Earning
 and Outgo
 
 A statement giving details of Conservation of Energy, technology
 absorption, foreign exchange earnings, and outgo, in accordance with
 Section 217(1)(e) of the Companies Act, 1956 read with Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988, is given as Annexure - I hereto and forms part of this report.
 
 Particulars of Employees
 
 The information as required in accordance with Section 217(2A) of the
 Companies Act, 1956, read with the Companies (Particulars of Employees)
 Rules, 1975, as amended, is set out in Annexure ‘II’ to the Directors’
 Report. However, as per the provisions of Section 219(1)(b)(iv) of the
 Companies Act, 1956, the Report and the Accounts are being sent to all
 the shareholders of the Company excluding the aforesaid information.
 Any shareholder interested in obtaining such information may write to
 the Company Secretary at the Registered Office of the Company.
 
 Acknowledgement
 
 Your Directors thank the Company’s customers/ patrons, vendors,
 investors, bankers and financial institutions for their continued
 support during the year.
 
 Your Directors also places on records their deep appreciation of the
 contribution made by the employees at all levels. Your Company ‘s
 consistant growth was made possible by their hard work, integrity,
 cooperation and support.
 
 
                                       On behalf of the Board
                                       Ajay Bijli
 
                                       Chairman cum Managing Director
 
 Place : Gurgaon, Haryana
 Date  : July 31, 2008