DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in submitting the Eighteenth Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2015. Financial and Operational Review: The Company has earned a gross income of Rs. 5778.66 lacs for the financial year 2014-15, as compared to Rs. 5047.27 lacs in the previous year, recording an increase of Rs 731.39 lacs. The Company has incurred a net loss of Rs. 128.94 lacs for the year as compared to net profit of Rs. 9.26 lacs in the previous year. Interest expenditure for the year under review has marginally increased by Rs. 55.27 lacs as compared to the previous year. Depreciation during the year has recorded a marginal increase by Rs. 8.11 lacs as compared to the previous year. Earnings per share have been NIL for the current year as compared to Rs. 0.02 in the previous year. Resources & Liquidity: The Company's paid up capital is Rs. 11,48,72,950 with accumulated Reserves & Surplus of Rs. 151,13,20,386 2. CHANGES IN CAPITAL STRUCTURE There has been no change in the capital structure during the year under review. 3. TRANSFER TO RESERVES The amounts decreased in the reserves during the year on account of the losses are Rs. 128,94,796 as compared to the previous year increase on account of profit Rs. 9,25,763.42 4. DIVIDEND On account of losses, Your Directors do not propose any dividend for the year ended 31 st March, 2015. 5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The details of loans or guarantees given by the Company and any investments made by the Company is given in the notes to the Accounts forming part of the financial statements 6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined and to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. 7. BOARD OF DIRECTORS As per the provisions of Section 152 of the Companies Act, 2013, Mr. Prem Krishen Malhotra, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The Board recommends his appointment. In accordance with the provisions of Section 149 of the Companies Act, 2013, your Board of Directors are seeking the appointment of Mr. Niranjan Shivdasani, who is retiring by rotation at the ensuing Annual General Meeting under the erstwhile applicable provisions of Companies Act, 1956, as Independent Directors for 4 (four) consecutive years for a term up to the conclusion of the 22nd Annual General Meeting of the Company in the calendar year 2019. Brief resume of the Directors, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees, their shareholding and relationships between them inter se, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges, are provided in the report on Corporate Governance forming part of the Annual Report. 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 and clause 49 of the Listing Agreement. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 8. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no material significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. The details of the same are given in the notes to Accounts forming part of the financial statements. The Company has adopted Related Party Transactions Policy which is displayed on website of Company www.cinevistaas.com 9. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code has been posted on the Company's website www.cinevistaas.com . All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. 10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA) The detailed Analysis of the Operating performance of the Company for the year, the state of affairs and the key changes in the operating environment has been included in the Management Discussion and Analysis section which forms part of the Annual Report. 11. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report and Management Discussion and Analysis and Auditors' Certificate are appended as part of the Annual Report. The required certification by Chief Executive Officer and Chief Financial Officer is also appended to the Annual Report. The requisite certificate from the Auditors of the Company, M/s Sarath & Associates, Chartered Accountants, confirming Compliance with the conditions of Corporate Governance as stipulated under the aforesaid clause 49, is annexed to this Report. 12. DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed. ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review. iii) The directors have taken proper and sufficient care for 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. iv) The directors have prepared the annual accounts on a going concern basis. v) 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. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. 13. SUBSIDIARIES Pursuant to General Circular No. 2/2011 No.51/12/2007-CL-III dated 08.02.2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors has passed a resolution for sending the Balance Sheet without attaching copy of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of the Subsidiary Companies namely Chimera Entertainment Private Limited (Formerly Cinevista Studios Private Limited), Cinevista Eagle Plus Media Private Limited and Video Vista Inc. In accordance with the General Circular issued by the Ministry of Corporate Affairs, the Company will make available the Annual Accounts of the subsidiary companies and the related detailed information upon request by any member of the Company and its subsidiaries interested in obtaining the same. Further, the Annual Accounts of the subsidiaries would also be available for inspection by any member at the Registered Office of the Company and at the Office of the respective subsidiary companies, during working hours. The Company has disclosed in the consolidated balance sheet the following information in aggregate for each subsidiary:- (a) Capital (b)reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable. The holding as well as subsidiary companies in question shall regularly file such data to the various regulatory and Government authorities as may be required by them. The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year. In addition to "Consolidation of Financial Statements" as required under Clause 32 of the Listing Agreement with the Stock Exchanges, the details on the performance of the Company's subsidiaries are attached. 14. FIXED DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 15. AUDITORS The Company's Statutory Auditors M/s. Sarath & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. You are requested to appoint the Auditors. The Company has received the letter from them to the effect that their appointment if made would be within the limits prescribed under Section 139 of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of section 141 of the said Act. The Auditors' Report to the members on the Accounts of the Company for the financial year ended March 31, 2015 does not contain any qualification. The observation made in the Auditors' Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. 16. SECRETARIAL AUDIT Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s. Yogesh D. Dabholkar and Co., Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure A". As directed by Securities & Exchange Board of India, (SEBI) secretarial audit is being carried out at the specified period by the Practicing Company Secretary. The findings of the secretarial audit were entirely satisfactory. Observation made in Secretarial Audit Report with regards to loan given to subsidiaries viz. M/s. Cinevista Eagle Plus Media Pvt. Ltd. and Chimera Entertainment Pvt. Ltd. of Rs.8589/- and Rs.7975/- respectively are towards statutory filing fees to be paid to Registrar of Companies (ROC). The same has been duly repaid by subsidiaries to M/s. Cinevista Ltd on 20th July, 2015. Loan was given to subsidiaries as the practice which was allowed in Companies Act, 1956. However, the same is repaid to be in compliance with Companies Act, 2013. There are no other qualification in Secretarial Audit Report and observation made in the Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under the Companies Act, 2013. 17. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure B". 18. BUSINESS RISK MANAGEMENT: Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Directors' report. At present the company has not identified any element of risk which may threaten the existence of the company. 19. PREVENTION OF INSIDER TRADING: The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. 20. STATUTORY INFORMATION Conservation of Energy & Technology Absorption Considering the nature of the business of the Company, the particulars required to be furnished pursuant to the Companies Act, 2013, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to the Conservation of Energy and Technology Absorption are not applicable. Foreign Exchange Earnings and Outgo Foreign Exchange Earnings have been Rs. 25.39 Lacs as compared to the previous year which amount to Rs. 78.78 Lacs and Foreign Exchange Outgo for current year is Rs. NIL as compared to previous year which was also Rs. NIL. Particulars of Employees The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance. 21. APPRECIATION Your Directors thank the viewers, suppliers, bankers, Financial Institutions, Central and State Governments and Shareholders, for their consistent support to the Company. The Directors also sincerely acknowledge the significant contributions made by all the employees for their dedicated services to the company. For and on behalf of the Board Cinevista Limited Prem Krishen Malhotra Chairman Date: 13th August, 2015 Place: Mumbai |