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Mukta Arts Ltd.

BSE: 532357 | NSE: MUKTAARTS |

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Series: EQ | ISIN: INE374B01019 | SECTOR: Media & Entertainment

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The Members,

The Directors take pleasure in presenting the Thirty Sixth Annual Report of your Company alongwith the Audited Statement of Accounts of the Company for the financial year ended 31st March, 2018.


(Figures in Millions)


Year ending 31.03.2018


Year ending 31.03.2017 (Rs.)

Profit/(Loss) before interest, depreciation & tax



Less: Interest



Profit/(Loss) after interest, before depreciation & tax



Less: Depreciation



Profit/(Loss) before tax



Less: Provision for taxation



Deferred Tax Liability /(Asset)



Profit/(Loss) available for appropriation



Less: Interim / Final Dividend



Tax on Interim / Final Dividend



Profit/(Loss) for the year



Other comprehensive income



Add: Balance brought forward



Less: Transfer to general reserve



Profit/(Loss) Carried forward to Balance Sheet



Company’s Performance

During the year the total revenues of the Company were placed at Rs. 259.75 Millions compared to Rs. 714.12 Millions last year.

The Company''s performance and outlook has been discussed in detail in the Management Discussion and Analysis.

The holding company, and WWIL had filed applications to review the said Order with the High Court and an interim stay was granted on July 30, 2014 which required deposit by Mukta Arts Limited of Rs 10,00,38,000 by January 2015 against payment of arrears of rent for the years 2000-01 to 2013-14 and payment of Rs 45,00,000 per annum from financial year 2014-15 till the settlement of the case to MFSCDCL. As per the terms of the said Order, till 31 March 2018 Rs 11,35,38,000/- has been paid by the Holding Company and Rs 45,00,000/- has been paid by WWIL. The State Govt. of Maharashtra and MFSCDCL challenged the order of the High Court in the Supreme Court which was dismissed by the Supreme Court on September 22, 2014. The amount so paid / being paid by the holding company have been accounted under Non - Current Other Financial Assets in the Financial Statements to be adjusted on the settlement of the case. Management of WWIL informs that these will be accounted as an expense, if required, on the settlement of the case.


Due to inadequate profits, the Directors regret their inability to recommend dividend for the financial year ended 31st March 2018 and no amount is proposed to be transferred to the reserves.

Particulars of loans, guarantees or investments by company

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.


The Company has not accepted any fixed deposits from the public, within the meaning of section 73 of the Companies Act, 2013 read with the Companies (Acceptance of deposits) Rules, 2014. Therefore, as on 31.03.2018 there were no deposits which were unpaid or unclaimed and due for repayment.

Particulars of Contracts or arrangements made with related party (ies)

All transactions entered with Related Parties during the year under review were:

- on arm’s length basis and

- in the ordinary course of business and

- there were no material transactions with any related party

as per the provisions of sections 188 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and therefore, disclosure in Form AOC-2 is not required.

The Company has developed a Related Party Transactions framework through Standards Operating Procedures for the purpose of identification and monitoring of such transactions.

All Related Party Transactions are placed before the Audit Committee as also before the Board for approval. The Policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web link of the same has been provided in the Corporate Governance Report. None of the Directors vis-a-vis the Company had any pecuniary relationship or transactions.

Material changes and commitment, if any, affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of this report.

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company’s financial position have occurred between the end of the financial year of the Company and date of this report.

Share Capital

During the year under review, the company has not issued any Equity shares or any other securities.


Your Company has for the past 3 years, been focusing increasingly on the Cinema business. Over the years, the Company has built up a dedicated clientele with its offering of affordable luxury where the patron gets a world class experience at par with any of India’s other top multiplexes, but at a distinctly more affordable value. The Company has expanded internationally in Bahrain to cater to cinema fans of the Kingdom of Bahrain with launch of ‘Mukta A2 Cinemas’ first 6 screen luxury cinema in Juffair Mall. During the previous year, the Company has transferred its Cinema exhibition division to a separate legal entity Mukta A2 Cinemas Limited (Wholly- owned subsidiary) of Mukta Arts Limited.

Subsidiary and Joint Venture Companies

As on 31.03.2018 the Company has six subsidiary Companies namely, Whistling Woods International Limited, Connect.1 Limited, Mukta Tele Media Limited, Mukta Creative Ventures Limited (formerly known as Coruscant Tec Private Limited), Mukta A2 Multiplex SPC. and Mukta A2 Cinemas Limited. The Company also has one Joint Venture Company namely, Mukta V N Films Limited. Whistling Woods International Limited is a material subsidiary of the company within the meaning of Regulation 16(1)(c) of SEBI (Listing Disclosure and Obligation Requirements) Regulation, 2015.

Out of the subsidiaries of the Company, the most notable has been the Whistling Woods International Limited (‘WWIL’) that has regularly been rated as one of the Ten Best Film Schools in the World by ‘The Hollywood Reporter’. In a first-of-its kind academia-industry partnership, Asia’s premier Film, Communication and Creative Arts Institute, Whistling Woods International, has come together with Reliance Jio for a Development Lab dedicated for the Virtual Reality & Augmented Reality Industry. The lab, named ‘Whistling Woods Jio VR Lab’, has been set up at the Whistling Woods International Campus in Filmcity, Mumbai. The Lab has commenced its operations in mid-May 2018.

Mukta A2 Cinemas Limited (MA2) is a wholly-owned subsidiary company incorporated exclusively to handle the exhibition business. MA2 in joint venture with Asian Cinemas has launched 8 single screens at Gangavathi, Tandur, Nizamabad, Sadashivpeth, Kothagude, Medak, Khammam and Zaheerabad. MA2 this month has also taken over operations for launch of 2 screens at Sun City Multiplex, Vile Parle (East), Mumbai. It has started renovation of one of its screens and expects to complete it before the theatrical release of “Race-3” in June 2018. Thereafter the other screen will be operational to mark a signature multiplex here. With this, Mukta A2 Cinemas marks the completion of 48 screens globally. Mukta A2 Cinemas is now successfully operating in 14 cities making a PAN India presence to cater to the myriad needs of the movie buffs across the country.

Mukta A2 Multiplex SPC. is also a wholly-owned subsidiary company incorporated in the Kingdom of Bahrain for running of a 6 screen multiplex in the Mall situated at Juffair Mall. The theatre features the latest releases from Hollywood, Bollywood as well as Arabic releases. It’s equipped with state-of-the-art technology, including Dolby Atmos and Quantum Logic 3D surround sound systems, Light Tripler polarisation 3D technology and modern projection system. The cinema also offers dynamic seating options such as VIP recliners, sofas and rocker seats, in addition to the variety of gourmet food and beverage options.

Mukta V N Films Limited, carrying on the Programming service business which is jointly held by the Company along with VN Films Private Limited, a subsidiary of UFO Moviez. This business used to have a major contribution in topline though being a commission business, the impact on bottomline was small. As a result of this joint venture, the overall share of the business has grown with over 600 screens being managed by the new entity. Your Company holds 55% of the equity shares of Mukta V N Films Limited and as per provisions Section 2(87) of the Companies Act, 2013 it is a subsidiary company. Since, your Company is a listed Company, Indian Accounting Standard (Ind AS) is applicable with effect from financial year 2017-2018. Since, Mukta V N Films Limited is the result of joint venture between the Company and VN Films Private Limited as per Ind AS, Mukta V N Films Limited is not to be considered as subsidiary but a joint venture company. So, Mukta V N Films Limited is being treated as a joint venture company from the financial year 2017-2018.

Another subsidiary of the Company, Connect.1 Limited has for some time been entrusted with monetising the entire group’s content on all digital platforms since 2012. It has also curated & syndicated the content emerging from WWI (mostly in the nature of student fiction short films) on YouTube and Dailymotion. Connect.1 has produced a slate of widely viewed short films on the You Tube channel which received good feedback. This has led the company to establish links and partnership with all major platforms to ensure its content is well distributed.

Mukta Tele Media Limited is another subsidiary of the Company. The main objects of the Company are to take up production of TV-serials, management of event shows and entertainment software.

Another subsidiary of the Company, Mukta Creative Ventures Limited (formerly known as Coruscant Tec Limited) is abased mobile solutions company with a focus on content, applications and commerce, having office in Mumbai.

During the year, the Board of Directors reviewed the affairs of its subsidiary Companies. Further, pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached as Annexure A to this Report.

Pursuant to Section 136 of the Act companies are exempted from attaching the Annual Reports and other particulars of its subsidiary companies alongwith Annual Report of the Company. Therefore, the Annual Report of the subsidiary companies are not attached with this Annual Report.

Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the registered office address of the Company.


Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organization’s brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders'' expectations. The Company has been following the principles of good Corporate Governance over the years and lays strong emphasis on transparency, accountability and integrity. As per Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance alongwith the Certificate from Practicing Company Secretary confirming the compliance, is attached as Annexure F to this Report

Number of meetings of the board

The details of the number of meetings of the Board held during the financial year 2017-18 forms part of the Corporate Governance Report. The Company had 4 meetings of the Board during the year. The intervening gap between any two meetings was within the period prescribed by Regulation-17(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013.

Committees of the Board

Currently the Board has four Committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Share Transfer Committee.

A detailed note on Board and its committees is provided under the corporate governance section to this annual report. The composition of Committees, as per the applicable provisions of the Act and Rules, are as follows:


Name of the Committee

Composition of the Committee


Audit Committee

1. Mr. Kewal Handa

2. Mr. Parvez A.Farooqui

3. Mr. Manmohan Shetty


Nomination and Remuneration Committee

1. Mr. Kewal Handa

2. Mrs. Paulomi Dhawan

3. Mr. Mamohan Shetty


Stakeholders Relationship Committee

1. Mr. Kewal Handa

2. Mr. Parvez A.Farooqui

3. Mrs. Paulomi Dhawan


Share Transfer Committee

1. Mr. Parvez A.Farooqui

2. Mr. Kewal Handa

3. Mr. Mamohan Shetty

Board Diversity

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage difference in thought, perspectives, knowledge, skill, regional and industry experience, cultural and geographical background. The Board has adopted the Policy on Board Diversity which sets out the approach to diversity of the Board of Directors and the same is available on our website.

Remuneration and Nomination Policy

The Board of Directors of the Company has Independent Directors, who have in depth knowledge of the business and industry as the members of Nomination and Remuneration Committee. The composition of the Board is in conformity with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013.

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Policy Personnel and Senior Management of the Company. This Policy also lays down criteria for selection and appointment of Board Members. The policy attached as Annexure B to this Board''s Report.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

Board evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The performance evaluation of the Chairman and the Non- Independent Director(s) was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

None of the independent directors are due for re- appointment.

Directors and Key Managerial Personnel

The Company has following Key Managerial Personnel:

Sr. No.

Name of the Person



Mr. Subhash Ghai

Executive Chairman


Mr. Rahul Puri

Managing Director


* Mr. Parvez Faroqui

Non-Executive Director


Mr. Prabuddha Dasgupta

Chief Financial Officer


Ms. Monika Shah

Company Secretary

* Mr. Parvez Farooqui was Executive Director and KMP for the period from 01st April 2017 to 31st May 2017

Certificate on Corporate Governance

Mr. Pratik M. Shah, Practicing Company Secretary has certified the Company’s Compliance of the requirements of Corporate Governance in terms of Regulation 27 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the financial year ended 31st March, 2018 and the same is enclosed as an Annexure D to the Report on Corporate Governance.

Director’s responsibility statement

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i. in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. the Directors 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 the end of the financial year and of the profit of the company for the year ended on that date;

iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


Statutory Auditors

M/s Uttam Abuwala & Co., Chartered Accountants were re-appointed as the Statutory Auditors of the Company to hold office for a period of 4 years till the conclusion of the Thirty Eighth Annual General Meeting of the Company to be held in the year 2020.

The Company’s explanation to the Auditors’ observation in their Report have been detailed in Note No’s 42, 45, 46 and 49 in the notes forming part of accounts which forms part of the Annual Report.

Secretarial Audit

Pursuant to provisions of Section 204(1) of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed K. C. Nevatia & Associates, Company Secretaries in Practice (C. P. No. 2348) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report of the Company for the year ended is attached as Annexure C.

Directors Explanation to Qualification in Secretarial Audit Report:

a) Excess remuneration and professional fees paid to Mr. Subhash Ghai, erstwhile chairman and Managing Director of the company has been taken up at suitable level for review and the company is hopeful of getting the relief shortly.

b) As adhering to the terms of the order passed by Bombay High Court, the Company has paid an amount of Rs. 11,35,38,000/- to (Mahrashtra Film Stage and Cultural Development Corporation) MFCCDCL by March 31, 2018. The State Govt. and MFSCDCL challenged the said order of the High Court in the Supreme Court which application was dismissed by the Supreme Court on 22 September 2014. The amount so paid / being paid by the holding company have been accounted under Non-Current Other Financial Assets in the Financial Statements to be adjusted on the settlement of the case. Management of WWIL informs that these will be accounted as an expense, if required, on the settlement of the case.

Significant and material orders passed by the regulators or courts

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

Internal Financial control systems and their adequacy

Your Company has an effective internal financial control and risk mitigation system, which are constantly assessed and strengthened with new/ revised standard operating procedures. The Company’s internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to M/s. Garg Devendra & Associates, a reputed firm of Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee actively reviews the adequacy and effectiveness of the internal financial control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken by the management are presented to the Audit Committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

Extract of Annual Return

The details forming part of the extract of Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and administration) Rules, 2014, is attached as Annexure E and forms an integral part of this Report.

5. Human Resources

Human Resource is considered as one of the most critical resources in the business which can be continuously smoothened to maximize the effectiveness of the Organization. Human Resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening the Company’s Polices and Systems. All personnel continue to have healthy, cordial and harmonious approach thereby enhancing the contributory value of the Company.

The Company is committed to nurturing, enhancing and retaining top talent through superior Learning and Organizational Development.

Further statutory disclosures w.r.t. Human Resources are as under:

i) As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on Sexual Harassment at workplace with a mechanism of lodging complaints. Its redressal is placed on the intranet for the benefit of its employees. During the year under review, no complaints were reported to the Board.

ii) The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:




Mr. Subhash Ghai

Executive Chairman


Mr. Rahul Puri

Managing Director


*Mr. Parvez A. Farooqui

Non-Executive Director


* Since Mr. Parvez Farooqui is a non-executive Director he did not receive any remuneration with effect from 01.06.2017

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:



%increase / decrease

Mr. Subhash Ghai

Executive Chairman


Mr. Rahul Puri

Managing Director


Mr. Parvez A. Farooqui

Non- Executive Director

- (10% increase is for to months from 01st April 2017 to 31st May 2017

Mr. Prabuddha Dasgupta

Chief Financial Officer


Ms. Monika Shah

Company Secretary


c. The percentage increase in the median remuneration of employees in the financial year:- 120%

d. The number of permanent employees on the rolls of Company: - 66

e. Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentage increase made in the salaries of Employees other than the managerial personnel in the financial year was 26.22% whereas the increase in the managerial remuneration was -2.91%.

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

g. Particulars of Employees

Information as per Rule 5(2) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Top Ten Employees in terms of remuneration drawn during the year






Nature of Duties






Date of Commencement of








Relative of any Director and Manger of the Company












Mukta Arts Since inception



Rahul V Puri




Bsc- Business Management







* Yes












Neo Sports broadcast Pvt. Ltd.





Studio Chief Executive


Inter Arts




Mukta Arts Since inception



Sanjay Ghai









Mukta Shakti Combine





Group Chief








Larsen & Toubro and Balaji Telefilms Limited



Prem Taparia







Simplex Mills Co. Ltd.



Rekha Misra

VP- Projects & Adm.






Great eastern Shipping Co.





EA to Chairman


MBA in






international school, Mumbai



Monika Shah








B. Raheja Builders


Details of Employees who were :

(A) Employed throughout the Financial Year under review and in receipt of remuneration for the Financial Year in the aggregate of not less than Rs. 1,02,00,000 per annum: NIL

(B) Employed for the part of the Financial Year under review and in receipt of remuneration at the rate of not less than Rs. 8,50,000/- per month : NIL

There was no employee either throughout the financial year or part thereof who was in receipt of remuneration which in the aggregate was in excess of that drawn by the Managing Director or Whole-time Director and who held by himself or alongwith his spouse or dependent children two percent or more of the Equity Shares of the Company.

* Mr. Rahul Puri is relative of Mr. Subhash Ghai

* Mr. Siraj Farooqui is relative of Mr. Parvez Farooqui.


Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.


The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement to report genuine concerns or grievances. The Vigil Mechanism/ Whistle Blower Policy may be accessed on the Company''s website


Your Company is well aware of risks associated with its business. The Company manages risk through a detailed Risk Management Policy framework which lays down guidelines in identifying, assessing and managing risks that the businesses are exposed to.


As a responsible corporate citizen, your Company lays considerable emphasis on health, safety aspects of its human capital, operations and overall working conditions. Thus being constantly aware of its obligation towards maintaining and improving the environment, all possible steps are being taken to meet the toughest environmental standards on pollution, effluents, etc. across various spheres of its business activities.


The Company is not engaged in manufacturing activities and as such the particulars relating to conservation of energy and technology absorption are not applicable. The Company makes every effort to conserve energy as far as possible in its post-production facilities, Studios, Offices, etc. In particular the Company has taken specific measures to ensure conservation of energy in places where Mukta A2 Cinemas are located.

Particulars regarding Foreign Exchange earnings and outgo required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in the notes forming part of accounts which forms part of the Annual Report.


Section 136 of the Act and the Rules framed there under allows the Company to send its Financial Statements by electronic mode to such Members whose shareholding is in dematerialized format and whose email addresses are registered with the Depositories for communication purposes. As a responsible corporate citizen, the Company proposes to effect electronic delivery of the Annual Report of the Company in lieu of the paper form to the Members who have registered their email IDs with the Depositories. A physical copy of the Annual Report will be sent to those Members who have not registered their email addresses with the Depositories for receiving electronic communication. A physical copy of this Annual Report can also be obtained free of cost by any Member from the Registered Office of the Company on any working day during business hours.

A copy of this Annual Report is also available on the website of the Company at


The Business Responsibility Reporting as required by Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to your Company for the financial year ended March 31, 2018.


Your Directors express their deep sense of gratitude to the Artistes, Technicians, film distributors, exhibitors, Bankers, stakeholders and business associates for their co-operation and support and look forward to their continued support in future.

Your Directors also place on record, their appreciation for the contribution, commitment and dedication to your Company’s performance by the employees of the Company at all levels.

For and on behalf of the Board of Directors of

Mukta Arts Limited

Subhash Ghai

Place: Mumbai Executive Chairman

Date: 24th May, 2018 DIN: 00019803

Director’s Report