PVR

1. Segment Information
 
 Business Segments:
 
 The Company is solely engaged in the business of film exhibition.  The
 entire operations are governed by the same set of risk and returns,
 hence, the same has been considered as representing a single
 
 primary segment. The said treatment is in accordance with the guiding
 principles enunciated in the Accounting Standard – 17 on Segment
 Reporting.
 
 Geographical Segments:
 
 The Company sells its products and services within India with nil
 income from overseas market and do not have any operations in economic
 environments with different set of risks and returns. Hence, it is
 considered operating in a single geographical segment.
 
 2. Related Party Disclosures
 
 Subsidiaries 
 
 C.R. Retail Malls (India) Private Limited
 
 PVR Pictures Limited
 
 Sunrise Infotainment Private Limited
 
 PVR bluO Entertainment Limited (with effect from July 2, 2008)
 
 Key Management Personnel       
 
 Ajay Bijli, Chairman cum Managing Director and
 
 Sanjeev Kumar, Joint Managing Director
 
 Relatives of Key Management Personnel
 
 Sandhuro Rani and Selena Bijli
 
 Enterprises having control o significant influence over the Company
 
 Bijli Investments Private Limited
 
 Priya Exhibitors Private Limited
 
 Enterprises owned or significantly influenced by key management
 personnel or their relatives
 
 The Amritsar Transport Company Private Limited
 
 ATC Carriers Private Limited
 
 Leisure World Private Limited
 
 
 NOTES:
 
 a) The Company has availed loans from banks, a body corporate and Small
 Industries Development Bank of India (SIDBI) aggregating to Rs.
 706,746,872 (Previous year Rs. 609,837,346) which are further secured
 by personal guarantee of two directors of the Company. Term Loan from
 Punjab National Bank is further secured by second charge on all the
 movable and immovable assets namely current and movable fixed assets of
 PVR Phoenix, Mumbai of a subsidiary company. Loan from SIDBI is further
 secured by first charge on personal properties of a director at Vasant
 Vihar and Jhandewalan, New Delhi.
 
 b) The above particulars exclude expenses reimbursed to/by related
 parties.
 
 c) No amount has been provided as doubtful debt or advance/written off
 or written back in the year in respect of debts due from/to above
 related parties, except as disclosed above.
 
 3.  The Board of Directors of the Company approved the merger of
 Sunrise Infotainment Private Limited, its subsidiary company in the
 meeting held on October 24, 2008. Pursuant to this approval, the
 Company has on January 29, 2009, filed with Honorable High Court at New
 Delhi, a scheme of amalgamation entailing merger of the subsidiary
 company with the Company. As per the said scheme, with effect from the
 Appointed Date i.e. April 01, 2008, the undertaking of the subsidiary
 company, pursuant to the provisions contained in Sections 391 to 394
 and other applicable provisions of the Companies Act 1956, shall stand
 transferred to and vested in the Company on a going concern basis
 without any further act, deed or matter. However, the Amalgamation
 shall be effective from the date of filing of the certified copy of the
 Order of the Honorable Delhi High Court with Registrar of Companies NCT
 of Delhi & Haryana. Pending the approval of the said High Court, the
 effect of the amalgamation has not been given.
 
 4.  Security Deposits (paid) include Rs. 15,812,089 recoverable from
 three parties, with whom the Company had entered into Memorandum of
 Understanding for taking multiplex/office space on rent. The Company is
 in discussions with the parties for the recovery of the aforesaid
 amount and is hopeful of recovering the same. Hence, no provision
 against the same has been considered necessary.
 
 5.  Since the warrant holder of 1,200,000 warrants have not exercised
 their option of subscribing to equity shares of the Company within the
 stipulated period (i.e. by March 17, 2009) the Company has forfeited
 the entire amount of upfront payment (i.e. Rs.  25,820,400) received
 against warrants and has transferred the same to Capital Reserve.
 
 6.  A sum of Rs. 44,204,329 is appearing as balance with excise
 authorities (shown in the Schedule of Loans and Advances) at year end,
 the accounts of which are subject to reconciliation. Necessary
 adjustments, if any, which in the opinion of the management will not be
 material, will be made as and when the accounts are finally reconciled.
 
 7.  i) The Company has investments of Rs. 200,000,000 in equity shares
 of C. R. Retail Malls (India) Private Limited. Further a sum of Rs.
 231,925,000 is recoverable from C. R. Retail Malls (India) Private
 Limited in respect of loan granted to it by the Company. As per the
 latest audited financial statements of C. R. Retail Malls (India)
 Private Limited, it has accumulated losses of Rs. 12,456,281 which have
 resulted in erosion of a portion of its net worth.
 
 ii) The Company has investments of Rs. 50,025,000 and Rs. 50,000,000 in
 the equity and preference share capital respectively, of Sunrise
 Infotainment Private Limited. Further a sum of Rs. 160,400,000 is
 recoverable from Sunrise Infotainment Private Limited in respect of
 loan granted to it by the Company. As per the latest audited financial
 statements of Sunrise Infotainment Private Limited, it has accumulated
 losses of Rs. 24,829,071 which have resulted in erosion of a portion of
 its net worth.
 
 iii) The Company has investments of Rs. 58,650,000 in equity shares of
 PVR bluO Entertainment Limited. As per the latest audited financial
 statements of PVR bluO Entertainment Limited, it has accumulated losses
 of Rs. 3,627,163 which have resulted in erosion of a portion of its net
 worth.
 
 These being long term investments and also in view of projected
 profitable operations of the above companies, management is of the view
 that the diminution in the value of these investments is temporary in
 nature and hence no provision is required to be made thereagainst.
 
 7.1 During the year ended March 31, 2006, the Company had successfully
 completed its public issue. This comprised of 5,700,000 equity shares
 of Rs. 10 each at a premium of Rs. 215 per share. Alongwith this public
 issue, there was also a sale of 2,000,000 equity shares by a
 shareholder of the Company i.e. Western India Trustee and Executor
 Company Limited (India Advantage Fund-I).
 
 NOTES:
 
 i) The Board of Directors of the Company have approved the inter-se
 re-allocation of unspent monies amounting to Rs. 9,833,661 from issue
 expenses to general corporate expenses.
 
 ii) *** includes Rs. 1,282,500,000 raised through public issue of
 equity shares.
 
 iii) The Board of Directors of the Company, in accordance with the
 rights given in the prospectus has in its meeting held on November 18,
 2008 ratified the funding of the projects with respect to Sunrise
 Infotainment Private Limited and C. R. Retail Malls (India) Private
 Limited, wholly owned subsidiaries of the Company as per the details
 given above, out of the IPO proceeds.
 
 8.  Pursuant to the clarification by Central Board of Excise and
 Customs (CBEC) vide Circular No. File No. 137/72/2008-CX.4 dated
 November 21, 2008, that the accumulated CENVAT/Service Ta x Credit upto
 March 31, 2008 can be utilized by the Company for payment of output
 service tax without any restriction of time limit. The Company has
 recognised such CENVAT/Service Ta x credit amounting to Rs. 26,846,361
 by crediting to the accounts of rent expenses by Rs. 20,692,168 and
 income from revenue sharing by Rs. 6,154,193.
 
 9.  The Company is entitled to exemption from payment of entertainment
 tax in respect of some of its multiplexes, in accordance with the
 Scheme of the respective state governments. In the assessment orders
 for the Assessment Year 2006-07, the Company’s contention that the
 amount of entertainment tax is a capital receipt, has been accepted
 during the year. Accordingly, treating the amount of entertainment tax
 exemption amounts as a capital receipt in respect of multiplexes in
 those states covered by the above orders, the Company has re-computed
 its current income tax liability and deferred tax liability for the
 years ended March 31, 2006, 2007 and 2008. Provision for tax for the
 current year’s income tax and deferred tax has also been made on the
 same basis.  As a result of above change, the current income tax charge
 is lower by Rs. 123,504,839 (including reversal of current income tax
 provision for earlier years aggregating to Rs. 80,558,256) and deferred
 tax charge is higher by Rs. 123,504,839 (including deferred tax charge
 for earlier years aggregating to Rs. 80,558,256).
 
 10.  The asset of Rs. 9,300,000 (Previous year Rs. Nil) recognised by
 the Company as ‘MAT Credit Entitlement Account’ under ‘Loans and
 Advances’ represents that portion of MAT liability, which can be
 recovered and set off in subsequent years based on provisions of
 Section 115JAA of the Income Ta x Act, 1961. The management, based on
 the present trend of profitability and also the future profitability
 projections, is of the view that there would be sufficient taxable
 income in foreseeable future, which will enable the Company to utilize
 MAT credit assets.
 
 11.  Gratuity Plan
 
 The Company has a defined benefit gratuity plan. Every employee who has
 completed five years or more of service gets a gratuity on departure at
 15 days salary (last drawn salary) for each completed year of service.
 The scheme is funded with an insurance company in the form of a
 qualifying insurance policy.
 
 The following tables summarize the components of net benefit expense
 recognized in the profit and loss account and the funded status and
 amounts recognized in the balance sheet for the gratuity plan.
 
 12. Leases
 
 i) Rental expenses in respect of operating leases are recognized as an
 expense in the Profit and Loss Account and Pre-Operative Expenditure
 (pending allocation), as the case may be.
 
 Operating Lease (for assets taken on lease)
 
 a) The Company has taken various cinemas, multiplexes, offices and
 godown premises under operating lease agreements. These are generally
 renewable at the option of the Company. The management of the Company
 based on valuation done by independent valuation experts, has allocated
 rent into two parts i.e. rent paid for use of land and building
 separately. The impact of straight lining of lease rent as required by
 the Accounting Standard 19 on Leases, for use of building does not have
 material impact on profit for the current year. As a result of this
 computation, a sum of Rs. 15,608,885 provided till last year has been
 reversed to rent expense during the year.
 
 b) The Company has given spaces of cinemas/food courts under operating
 lease arrangements taken on lease or being operated under revenue
 sharing arrangements. The Company has common fixed assets for operating
 multiplex/giving on rent. Hence separate figures for the fixed assets
 given on rent are not ascertainable.
 
 13. Contingent Liabilities (not provided for) in respect of:
 
 a) Labour cases pending*
 
 b) Claims against the Company not acknowledged as debts (including
 Rs.3,578,441, Previous year Rs. 3,128,441 paid under protest which is
 appearing in the Schedule of Loans and Advances)**
 
 c) Corporate guarantee given against the loan of Rs. 500,000,000
 sanctioned by a financial to the subsidiary, to the extent of loan
 drawn.
 
 d) Counter Guarantee given to a bank for the bank guarantee furnished
 to office of the Additional Collector, Mumbai Subarban district,
 (Entertainment Ta x Authority) by a subsidiary.
 
 e) Show cause notices raised by Service tax Commissionerate, New Delhi
 for non-levy of Service tax on invoices and excess utilisation of
 Cenvat credit (the Company has paid an amount of Rs. 1,080,361 which is
 appearing in the Schedule of Loans and Advances).**
 
 f) Appeal filed by the Company with Commissioner of Income Ta x
 (Appeals) against relief claimed in appeal with regard to certain
 expenses disallowed by the assessing officer in respect of financial
 year ended March 31, 2006. The said amount has already been paid and is
 appearing in the Schedule of Loans and Advances**
 
 g) The Honorable High Court of Delhi, vide judgment dated April 18,
 2009 in the case of Home Solution Retail India Limited and others Vs
 Union of India, has held that renting of immovable property by itself
 is not a service and accordingly the levy of service tax on activity of
 renting immovable property is “ultra vires” the Finance Act, 1994.  In
 view of this judgement, the service tax on renting of immovable
 property to the extent amount not paid to the landlords has not been
 provided during the year.**
 
 March 31, 2009            March 31, 2008
 
 (Rs.)                             (Rs.)
 
 Amount not                     Amount not
 
 ascertainable                  ascertainable
 
   3,578,441                     3,128,441
 
 470,583,332                   398,111,647
 
  62,500,000                       -
 
  20,252,588                       -
 
   3,672,879                       -
 
  33,553,220                       -
 
 
 * In view of the large number of cases pending at various
 forums/courts, it is not practicable to furnish the details of each
 case.
 
 ** Based on the discussions with the solicitors/meeting the terms and
 conditions by the Company, the management believes that the Company has
 a strong chance of success in the cases and hence no provision there
 against is considered necessary.
 
 13.1 The members of the Company in the Annual General Meeting held on
 September 30, 2008, accorded their approval under Section 314 of the
 Companies Act, 1956, for the continuation of availment of professional
 services of Mr. R.K. Sinha (a director of the Company) as an advisor
 (not in employment) to the Company. The Company has during the year
 paid Rs. 2,400,000 to him, which is appearing under Professional Charge
 in the Schedule 19. The Company has filed an application under Section
 309(1)(b) of the Companies Act, 1956 before the Central Government for
 its opinion to confirm that Mr. R.K. Sinha is a professional director
 and possesses the requisite professional qualification. The opinion of
 the Central Government in the said matter is awaited.
 
 14.  In view of the diverse nature of the food and beverages items
 (each being less than 10% in value of the total turnover of the
 Company) being sold by the Company, it is not practicable to give the
 quantitative details thereof. All items of food and beverages are
 indigenously procured.
 
 15.  Previous Year Comparative
 
 (a) The Company has during the year, started commercial operations at
 Ambience Mall, Ambience Food Court and Chandigarh. Hence, current
 years figures are not strictly comparable with those of previous year.
 
 (b) Previous years figures have been re-grouped where necessary to
 conform to current year’s classification.