MIRA
INFORM REPORT
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Report Date : |
24.12.2008 |
IDENTIFICATION DETAILS
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Name : |
UTV SOFTWARE COMMUNICATIONS LIMITED |
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Registered Office : |
Parijat House 1076 Dr. Emoses Road, Worli Naka, Mumbai-400018, |
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Country : |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
22.06.1990 |
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Com. Reg. No.: |
11-56987 |
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CIN No.: [Company
Identification No.] |
L72200MH1990PLC056987 |
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Legal Form : |
A Public Limited Liability Company. The company’s shares are listed on
stock exchange. |
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Line of Business : |
Software Consultants, Advisers, Experts or Developers in the Field of Computer
and Computer Graphics, Audio and Video Graphics and Communication media. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 10000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established and reputed company in entertainment industry. Available
information indicates satisfactory financial responsibility of the company.
Directors are reported as experienced, respectable and having satisfactory
means of their own. Their trade relations are fair. Payments are usually
correct and as per commitments. The company can be
considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office/ Corporate Office : |
Parijat House 1076 Dr. Emoses Road, Worli Naka, Mumbai-400018, |
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Tel. No.: |
91-22-24905353 |
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Fax No.: |
91-22-24905370 |
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E-Mail : |
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Website : |
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Overseas Offices: |
Located At:- ·
United State of ·
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·
·
Indigames ·
Ignition |
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Branch office |
15-19, Shah & Nahar Industrial Estate, Off. |
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Tel. No.: |
91-22-24965322 |
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Fax No.: |
91-22-24965306 |
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Branch Office: |
UTV House, Marwah Estate, Kishanlal Marwah Marg, Andheri
(East), Mumbai - 400 072, |
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Tel. No.: |
91-22-28570000 |
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Fax No.: |
91-22-28572558 |
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Branch Office: |
No. 5, Community Centre, Panchseel, |
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Tel. No.: |
91-11-26495643 |
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Fax No.: |
91-11-26497789 |
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Branches: |
Located at:- · Noida ·
· Chennai |
DIRECTORS
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Name : |
Mr. Rohinton Screwvala |
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Designation : |
Chief Managing Director and Chief Executive Officer |
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Address : |
3, Landmark, 17/738
Dhanukar Marg, Mumbai - 400 026, |
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Date of Appointment : |
22.06.1990 |
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Name : |
Mrs. Zarina Mehta |
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Designation : |
Non-Executive Director |
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Address : |
3, Landmark, 17/738
Dhanukar Marg, Mumbai - 400 026, |
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Date of Appointment : |
02.04.1991 |
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Name : |
Mr. Deven Khote |
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Designation : |
Executive Director |
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Address : |
Ashoka Apartments, |
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Date of Appointment : |
02.04.1991 |
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Name : |
Mr. Kishore Biyani |
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Designation : |
Independent Non-Executive Director |
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Name : |
Mr. Andy Bird |
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Designation : |
Independent Non-Executive Director |
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Name : |
Mr. Sanjaya Kulkarni |
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Designation : |
Independent Non-Executive Director |
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Address : |
A-12, Technocrat Society,
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Date of Appointment : |
25.02.2002 |
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Name : |
Mr. Suketu Shah |
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Designation : |
Independent Non-Executive Director |
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Address : |
A-52, Darshan Apartments,
Mount Pleasant Road, Malabar Hill, Mumbai - 400 006, Maharashtra, India |
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Date of Appointment : |
07.07.2000 |
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Name : |
Mr. Darius Shroff |
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Designation : |
Independent Non-Executive Director |
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Address : |
8, Moonnight, 158, |
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Date of Appointment : |
20.05.2000 |
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Name : |
Mr. Ketan Dalal |
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Designation : |
Director |
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Address : |
Flat No. G, Baug.e. sara,
10, |
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Date of Appointment : |
20.05.2000 |
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Name : |
Mr. Alain Fontaine |
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Designation : |
Director |
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Address : |
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Date of Appointment : |
15.04.2002 |
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Name : |
Mr. Manoj Thakur |
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Designation : |
Director |
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Address : |
37 H. Tower, 13 A, South
Horizons, Hong Kong, |
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Date of Appointment : |
15.04.2002 |
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Name : |
Mr. Rahul Shah |
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Designation : |
Director |
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Address : |
ILFS Centre, Plot NO. C-22,
Ground Floor, Bandra Kurla Complex, Mumbai - 400 051, |
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Date of Appointment : |
12.06.2002 |
KEY EXECUTIVES
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Name : |
Mr. Mohd. Sajid Ali |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Promoters: |
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Indian Promoter |
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Rohinton S. Screwvala |
1322987 |
5.78 |
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Consultants Limited |
3231740 |
14.12 |
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Zanina Mehta |
800 |
0.00 |
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United Teleshopping and Marketing Company Limited |
20 |
0.000 |
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Foreign
Promoters |
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Unilazer Hong Kong Limied |
2565593 |
11.21 |
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Non-Promoters
Holding |
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Institutional Investors |
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Mutual Funds and UTI |
1476343 |
6.45 |
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Bank Financial Institutions, Insurance Companies (Central / State
Government, Institution) |
425800 |
1.86 |
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Foreign Institutional Investors (FIIS) |
4216925 |
18.42 |
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Others |
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Private Corporate Bodies |
2984582 |
13.04 |
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Indian Public |
2197423 |
9.60 |
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NRIs |
423932 |
1.85 |
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Any Other (Please specity) |
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Trust |
296640 |
1.29 |
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Clearing Members |
14153 |
0.06 |
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Foreign Companies |
163074 |
0.7 |
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Foreign Corporate Bodies |
3500000 |
14.85 |
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Directors |
173596 |
0.76 |
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Total |
22893608 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Software Consultants, Advisers, Experts or Developers in the Field of Computer
and Computer Graphics, Audio and Video Graphics and Communication media. |
GENERAL INFORMATION
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Suppliers : |
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Customers : |
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No. of Employees : |
471 |
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Bankers : |
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Banking
Relations : |
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Auditors : |
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Name : |
Price and Waterhouse and Company Chartered Accountant |
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Associates : |
Vijay Television Limted |
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Subsidiaries : |
·
UTV Communications ( ·
UTV Communications ( ·
UTV Motion Pictures ( ·
UTV Broadcasting Limited ·
Genx Entertainment Limited ·
Ignition Entertainment Limited ·
Ignition Entertainment Limited ( ·
Digi-Guys Limited |
CAPITAL STRUCTURE
As on 31.03.2008
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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36000000 |
Equity Shares |
Rs. 10/- each |
Rs. 360.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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24840000 |
Equity Shares |
Rs. 10/-
each |
Rs. 248.400
Millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
248.400 |
228.936 |
194.936 |
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2] Share Application Money |
0.000 |
37.525 |
0.000 |
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3] Reserves & Surplus |
1777.800 |
1413.720 |
1101.177 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2026.200 |
1680.181 |
1296.113 |
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LOAN FUNDS |
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1] Secured Loans |
2447.900 |
1591.383 |
972.561 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
2447.900 |
1591.383 |
972.561 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
38.438 |
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TOTAL |
4474.100 |
3271.564 |
2307.112 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
272.700 |
392.319 |
85.043 |
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Capital work-in-progress |
18.000 |
13.019 |
63.283 |
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INVESTMENT |
780.500 |
785.248 |
262.180 |
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DEFERREX TAX ASSETS |
0.000 |
134.630 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
267.900
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831.803
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690.252 |
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Sundry Debtors |
1001.800
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452.860
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486.873 |
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Cash & Bank Balances |
23.300
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90.347
|
9.426 |
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Other Current Assets |
0.000
|
0.752
|
0.086 |
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Loans & Advances |
3561.700
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1050.053
|
1070.778 |
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Total
Current Assets |
4854.700
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2425.815
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2257.415 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
1399.600
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473.835
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355.924 |
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Provisions |
52.200
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5.632
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4.885 |
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Total
Current Liabilities |
1451.800
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479.467
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360.809 |
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Net Current Assets |
3402.900
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1946.348
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1896.606 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
4474.100 |
3271.564 |
2307.112 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover |
2862.900 |
1524.500 |
1729.375 |
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Other Income |
104.300 |
285.400 |
41.746 |
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Total Income |
2967.200 |
1809.900 |
1771.121 |
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Profit/(Loss) Before Tax |
78.100 |
197.388 |
49.311 |
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Provision for Taxation |
33.400 |
[168.551] |
19.349 |
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Profit/(Loss) After Tax |
44.700 |
365.939 |
29.962 |
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Expenditures : |
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Direct Cost |
0.000 |
1225.595 |
1505.937 |
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Power and Fuel Cost |
8.900 |
0.000 |
0.000 |
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Other Manufacturing Expenses |
2417.700 |
0.000 |
0.000 |
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Employee Cost |
145.000 |
0.000 |
0.000 |
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Selling and Administration Expense |
92.100 |
0.000 |
0.000 |
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Miscellaneous Expenses |
63.500 |
0.000 |
0.000 |
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Staff Cost |
0.000 |
141.364 |
122.988 |
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Other Expenses |
0.000 |
198.798 |
76.432 |
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Interest and Financial Charges |
190.200 |
16.099 |
0.000 |
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Depreciation & Amortization |
33.600 |
30.656 |
16.453 |
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Properative Expenditure Capitalized |
[61.900] |
0.000 |
0.000 |
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Total Expenditure |
2889.100 |
1616.512 |
1721.810 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2008 1st
Quarter |
30.09.2008 2nd
Quarter |
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Sales Turnover |
|
632.900 |
653.100 |
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Other Income |
|
84.500 |
149.600 |
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Total Income |
|
717.400 |
802.700 |
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Total Expenditure |
|
689.100 |
761.000 |
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Operating Profit |
|
28.300 |
41.700 |
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Interest |
|
0.000 |
[16.700] |
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Gross Profit |
|
28.300 |
58.400 |
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Depreciation |
|
7.800 |
8.000 |
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Tax |
|
0.900 |
1.500 |
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Reported PAT |
|
24.000 |
41.200 |
KEY RATIOS
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PARTICULARS |
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
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PAT / Total Income |
(%) |
1.51
|
20.22 |
1.69 |
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Net Profit Margin (PBT/Sales) |
(%) |
2.63
|
12.95 |
2.85 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
1.52
|
7.00 |
14.39 |
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Return on Investment (ROI) (PBT/Networth) |
|
0.04
|
11.75 |
0.04 |
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Debt Equity Ratio (Total Liability/Networth) |
|
1.92
|
0.52 |
1.03 |
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Current Ratio (Current Asset/Current Liability) |
|
3.34
|
5.06 |
0.71 |
LOCAL AGENCY FURTHER INFORMATION
History:
Subject was incorporated in
The Company is mainly engaged in the production of television programmes
and feature films,commercials,animation programmes,corporate documentaries and
inflight programmes,licensing of television programmes and feature films.
The Honourable High Court of Mumbai had sanctioned the Scheme of Amalgamation
of United Studios Limited with the Company on December,2000.
The company's subsidiaries are UTV International(Singapore)Pte Limited,UTV
International Holdings Limited,UTVNET Solutions Limited,Vijay Television Limited.With
the approval of Shareholders the equity shares has been split into 2 for 1 and
subsequently the face values has been reduced to Rs.5 per share.
The company has diversified its areas of interest in TV Content,Animation,Post
Production,Allied Content in the form of Ad Commercials as the growth in these
areas is bright in future. In 2001 the company opened its largest Studio Floors
in Kuala-Lumpur measuring 29000 Sq ft.
SUBSIDIARIES
& JOINT VENTURE COMPANIES:
As at March 31, 2008, the Company has the following subsidiaries viz.:
1) UMP Plc 2) UTV Motion Pictures (Mauritius) Limited 3) IG Interactive
Entertainment Limited 4) UTV Communications (USA) LLC 5) Ignition Entertainment
Limited- UK and its subsidiaries i.e. Ignition Entertainment Limited (USA) and
Digi-Guys Limited 6) Indiagames Limited 7) UTV TV Content Limited
As at March 31,2008, IG Interactive Entertainment Limited., UTV Communications
(
UMP Plc is 76.82% subsidiary of the Company.
Ignition Entertainment Limited (
Ignition Entertainment Limited (USA) and Digi-Guys Limited are 100% subsidiaries
of Ignition Entertainment Limited (UK).
UTV Motion Pictures (
The statement pursuant to Section 212(1)(8) of the Companies Act, 1956 in
respect of subsidiaries is attached. The Consolidated Accounts of the Company
and its subsidiaries are presented as part of this Annual Report in accordance
with Accounting Standard 21 issued by the Institute of Chartered Accountants of
India.
The Company has been exempted by the Ministry of Company Affairs, vide their
letter No. 47/294/2008-CL-III dated May 7, 2008 from attaching the Audited
Financial Statements along with the reports of the Board of Directors and the
Auditor's Report pertaining to its subsidiary companies viz., 1) UMP Plc 2) UTV
Motion Pictures (Mauritius) Limited 3) IG Interactive Entertainment Limited 4)
UTV Communications (USA) LLC 5) Ignition Entertainment Limited (UK) and its
subsidiaries i.e. Ignition Entertainment Limited (USA) and Digi-Guys Limited 6)
Indiagames Limited 7) UTV TV Content Limited. As per the terms of the exemption
letter, a statement containing brief financial details of the Company's
subsidiaries for the year/ period ended March 31, 2008 is included in the
Annual Report. Accordingly, the audited accounts of the above mentioned
subsidiary companies are not attached.
The audited accounts of the subsidiary Companies are also kept for inspection
by any member at the Company's Registered office and copies will be made
available on request to the members when requested.
Subsidiaries:
a) UMP Plc:
The Company was incorporated on March 27, 2007 as UTV Motion Pictures Plc at
Isle of Man. The name of the Company was changed to UMP Plc on January 31,
2008.
During the year UMP Plc was listed on the Alternative Investment Market of
('AIM') of the London Stock Exchange and the shares started trading with effect
from July 2, 2007. UMP Plc allotted 24,137,931 equity shares of USD 0.05 each
comprising of 23.18% of the post allotment equity at USD 2.90 per share aggregating
to USD 70 million. The balance shares are held by the Company.
During the year, UMP Plc has acquired 99.75% controlling stake in UTV Motion
Pictures (
b) IG Interactive Entertainment
Limited:
The Company was incorporated on September 6, 2004 as UTV Communications (UK)
Limited with an intention to carry out Film Acquisition, Syndication and
Distribution business in the
During the year, the holding of IG Interactive Entertainment Limited in its
subsidiary Ignition Entertainment Limited (UK) has been reduced from 71.09% to
70% due to the issue of additional shares by Ignition Entertainment Limited to
its minority shareholders. Ignition Entertainment Limited (
c) UTV Communications (
UTV
d) UTV TV Content Limited ('UTV
TV'):
The Company was incorporated on July 9, 2007 as UTV Movies Limited. On
January 24, 2008, the Company acquired 100% equity stake in UTV TV Content
Limited for a consideration of Rs. 0.50 million, making it a wholly owned
subsidiary of the Company. The name of the Company was changed to UTV TV
Content Limited on June 03, 2008. UTV TV incorporated a Company on May 06, 2008
called RB Entertainment Limited ('RBEL'), which is a 60:40 joint Venture
between UTV TV and Mr. Rajesh Beri.
e) UTV Broadcasting Limited
('UTVBL'):
On January 24, 2008, the Company has sold off its 98.75% equity stake in
UTVBL, a dormant company at a consideration of Rs.19.75 million. Subsequent to
such sale UTVBL ceased to be a subsidiary of the Company.
f) UTV New Media Limited
('UNML'):
On April 30, 2008, the Company acquired 100% equity stake in UNML thus making
it a wholly owned subsidiary of the Company. UNML was incorporated on September
20, 2007 under the name of 'United New Media Ventures Limited' and consequent
to the acquisition by the Company, the name of the Company was changed to UTV
New Media Limited w.e.f. May 06, 2008. The Company carries on the business of
developing and maintaining websites and acquisition and exploitation of digital
rights on mobile and digital platforms.
On May 08, 2008 UNML completed the acquisition of ITNation Media Private
Limited (' ITNation').
ITNation has technology based consumer and trade focussed business model
positioned as an Online Technology Infomediary' in
Joint Ventures:
i) Windmill Entertainment Limited
('WEL'):
Windmill Entertainment Limited is a 50:50 Joint Venture between the
Company and Mr. Shekhar Suman.
During the year, the Company has invested Rs. 0.50 million in Windmill Entertainment
Limited, a Company incorporated on August 17, 2007 to house the joint venture
with Mr. Shekhar Suman for television content production. On November 5, 2007,
Mr. Shekhar Suman has invested Rs 0.25 million in Windmill Entertainment
Limited by acquiring 50% of the equity capital from the Company, thereby making
it a 50:50 Joint Venture. Being in its first year of operation and as at March
31, 2008, WEL posted a net loss of Rs. 4.12 million.
ii) Smriti Irani Television
Limited ('SITL'):
Smriti Irani Television Limited is a 50:50 Joint Venture between the Company
and Mrs. Smriti Irani. During the year, the Company has invested Rs. 0.25
million in STIL, a Company incorporated on December 6, 2007 to house the joint
venture with Mrs. Smriti Irani for television content production. Being the
first year of its operation and as at March 31, 2008, STIL posted a net loss of
Rs.0.75 million.
MANAGEMENT
DISCUSSION AND ANALYSIS:
INTRODUCTION:
They began as a television content production company in 1990 and have since
developed into an integrated media and entertainment group. The business can be
divided into four segments:
1. Television Content Production, Dubbing and Airtime sales;
2. Movie Production and Distribution;
3. Interactive Media, including console and mobile game development,
publishing and distribution and
4. New Media including Web and
On April 30, 2008, they made a foray into the new media segment by acquiring
100% of UTV New Media Limited ('UNML').
They are planning to make a re-entry into the broadcasting space as a new line
of business by subscribing to 75% of the equity share capital of UTV Global
Broadcasting Limited ('UGBL'). Simultaneous to the investment in UGBL, The Walt
Disney Company (
INDUSTRY OVERVIEW:
The Entertainment and Media industry (E&M) has been growing at a steady
rate for the past few years and this trend is expected to continue for a few
years. This year they have seen many Indian Companies push the envelope and
move beyond national boundaries, the result of which is the emergence of a new
cult of media companies, what they could call Indian media conglomerates'. The
world at large seems to be taking notice of
In 2007, the E&M industry recorded a growth of 17% over the previous year,
exceeding the expected 15% that was forecasted last year. Currently the size of
the E&M industry is estimated at Rs.513 billion, up from Rs. 438 billion in
2006 and has recorded a Compounded Annual Growth Rate (CAGR) of 19% from 2004
to 2007. Going forward, the industry is estimated to reach a size of Rs. 1,158
billion by 2012 recording a CAGR of 18% over a five year period. (Source:
FICCI-PwC Report 2008)
The Indian television industry is expected to grow from the current size of
Rs.226 billion to Rs. 600 billion by 2012 recording a CAGR of 22% (Source:
FICCI-PwC Report 2008). This growth is primarily due to growth in TV
Distribution industry fuelled by increase in PayTV homes and subscription
revenues, healthy growth in the content industry due to the exponential
increase in the number of TV channels. The dynamics of this industry are ever
changing with emerging technologies and platforms like DTH, IPTV and Mobile
TV.
The Indian film industry has grown phenomenally over the past four years and is
expected to continue growing at a CAGR of 13% reaching to Rs. 176 billion in
2012 from the current size of Rs.96 billion in 2007 (Source: FICCI-PwC Report
2008). They will see domestic box office ruling the pie; however, the relative
shares are expected to shift marginally from traditional revenues to emerging
streams of revenue like Home video, Television, Music, Internet, etc. The
multiplexes are also exploding in the country with an expected 5,000 screens to
be up and running by 2012 from the current 1,350 screens and with ticket
prices, which are also on the rise, being higher in multiplexes than single
screens, they can expect a substantial increase in total box office revenues
(Source: FICCI-PwC Report 2008).
The gaming industry in
Looking at the constant changes in technology and emerging streams of revenue
due to increased penetration of mobiles, Internet and other handheld devices,
it is no surprise that this industry has outgrown the Indian economy and shall
continue to do so in the coming years.
Business Overview:
Television:
TV CONTENT:
The TV Content segment represents the shows produced by us on a commissioned
basis. During the year, they provided television content for Hindi channels
like Star Plus (Bhabhi), Hungama TV (Hero), Bindass (Sun Yaar Chill Maar and
Shakira) and Doordarshan (Soni Mahiwal). They are also looking at inorganic
growth in the television content business. To that end, they have entered into
two Joint Ventures, one each with Smriti Irani and Shekhar Suman. While they
would provide these ventures with the financial and infrastructural muscle, the
talent would front the respective JVs and lend creative and relevant business
acumen. During the year they also forayed into television production for South
Indian market, where they have two shows on air, one on Gemini TV and another
on KTV.
AIR TIME SALES:
This business has shown steady growth during the fiscal. During the year, they
managed a monthly average of approximately 85 hours of content across all
leading South Indian Channels such as Sun TV, Gemini TV, Udaya TV and KTV.
During the year, among many other shows, they added Ramayanam, the first ever
dubbed show going on air on Sun TV. Currently, the Top 2 slots on Sun TV are
managed by us, which includes Kolangal on the top position followed by Arasi.
Besides Sun TV, they also have shows running on Gemini TV, KTV and Udaya TV
wherein some of the shows feature in the Top 5 list of these channels.
DUBBING:
The Dubbing division today, has a talent bank of over 500 voices across genres and
languages. During the year, they provided the dubbing services for television
content to large international players like Disney, National Geographic
Channel, The History Channel and various other channels including Bindass and
Bindass Movies.
Motion Pictures:
The movies business went from strength to strength during fiscal 2008. During
the fiscal the group released the following films:
The following were some of the key highlights of the movies business this
fiscal:
* THE BLUE UMBRELLA got the National Award for Best Children's
film.
* Launch of UTV Spotboy, the second motion picture brand providing us
with range and flexibility across a range of genres, budgets and target
audiences and at the same time bring them within the same studio through
different brands.
* UTV Mauritius entered into collaboration with Virgin Comics, an
entertainment division of Sir Richard Branson's Virgin, to create original
superhero franchises for publishing, animation and gaming, targeting
* Foray into the Telugu film industry,
* Foray into the lucrative Tamil film industry with its first
co-production KENNAMOOCHI YENNADA.
* Launched the own music label, UTV Music, which distributed the latest
tent-pole production JODHAA AKBAR.
* The Home Entertainment Division with a strong distribution chain across
* WELCOME, one of the movies released during the year was one of the
highest grossing films of calendar year 2007.
* They also successfully released three movies; DHAN DHANA DHAN GOAL,
TAARE ZAMEEN PAR and RACE in the attractive
* The tentpole production JODHAA AKBAR, the first blockbuster of 2008,
was released and has also been dubbed in Tamil, Telugu, Dutch and Arabic.
Besides being a blockbuster, it is also the 7th highest grosser in
* Following the success of JODHAA AKBAR was RACE, the second release of
2008 and also the 2nd blockbuster of 2008. RACE has recorded the 2nd highest
opening weekend collections of all time.
Interactive:
This business segment comprises Gaming Business through recent acquisitions of
Ignition and Indiagames, Animation, Post-Production and VFX activities. It is
important to note that the Animation, Post-Production and VFX businesses will
not form part of this segment in the following year. This is primarily because,
they have strategically decided to move out of animation outsourcing and use
the animation facilities for captive movie production. Post Production and VFX
business was sold during this fiscal so as to move out of service oriented
business model.
This year has been an eventful one for Ignition where it launched Mercury
MeLimitedown Revolution for the WiiTM home video game system. It also published
games based on children's beloved character George of the JungleTM and
Crayola(R). It closed publishing deals with Playlogic and Marvellous
Entertainment to bring key properties like Obscure: The Aftermath, Bubble
Bobble and New Zealand Story to
During the year, the subsidiary in
Art of Fighting PS2 EuropeBubble Bobble Double Shot NDS USACrayola Treasure Adventures
NDS USAFlipper Critters NDS USAGeorge of the Jungle PS2/Wii/NDS EuropeKing of
Fighters XI PS2 EuropeMercury MeLimitedown WII Europe/USAMetal Slug Anthology
PS2 EuropeNeves NDS EuropeNew Zealand Story Revolution NDS USAObscure: The
Aftermath Wii/PS2/PC USARainbow Island Evolution PSP USASNK Vs CAPCOM NDS
EuropeTeenage Zombies NDS Europe/USA
BUSINESS STRATEGY:
The key elements of the business strategy are as follows:
Innovate and Grow Through The Integrated Platform of Media Businesses:
The goal is to become one of the largest and most respected integrated media
group by continuing to diversify across various entertainment platforms. They
believe that each of the business verticals is a highly scalable business
model. They believe in creating quality content across multiple platforms for a
global audience, but which also caters to local and regional tastes and
sensitivities. They recognise the need to target a relatively younger audience,
particularly in a country like
Television:
Continue to Produce and Market a
Wide Array of Television Contentntent:
They believe that continuing to produce a diverse mix of television programs is
critical to the ability to cater to a wide array of viewers and mitigate
against sudden changes in the preferences of the viewers. They continue to plan
to deliver diverse multi-genre and multilingual content across multiple
channels. In air time sales marketing, the focus is on improving margins rather
than volume building.
Motion Pictures:
Strengthen the 'Studio Approach' to Movie Production and
Distribution:
They continue to believe in a 'studio approach' to the movie production and
distribution business. This involves having a strong portfolio of movies under
production at all times and is achieved by entering into multiple movie
contracts with various successful directors and artists to develop and release
a line-up of movies aimed at various types of audiences. They believe the
'studio approach' enables us to exploit favorable marketing and distribution
arrangements and will allow us to exercise greater control over the creation
and capitalisation of intellectual property rights in relation to the movies
that they produce. The key elements of the 'studio approach' to movie
production include:
a. Maintain Diverse Portfolio of
Productions:
They believe a key to the success is maintaining a diverse portfolio of movie
productions, including live-action movies in Hindi, English and regional Indian
languages, as well as animated movies for the Indian and international market.
They believe that maintaining a diverse portfolio will allow us to capitalise
on the business potential of these segments and diversify the business risks.
b. Continue to Green light
Innovative Movie Concepts:
They believe that innovative concepts in diverse genres will drive the future
growth of the movie industry. They plan to focus on large, medium and small
budget films across various genres. They believe that small budget films will
provide us with the opportunity to introduce new and innovative concepts. With
the strong background and experience in movie production, they believe they are
well positioned to deliver these new and original movie concepts.
c. Establish Multiple Movie
Arrangements with Talent:
They believe that building and enhancing relationships with global studios,
international production houses and leading Indian and international talent
will enable us to increase the operations both in
d. Leverage Distribution
Capabilities through Vertical Integration:
In order to leverage the movie distribution capabilities, they will continue to
fully integrate the marketing and global distribution business with the movie
production business. They believe they can fully capitalise on the movies they
produce by successfully distributing such movies across a wide array of
distribution platforms, such as theaters, home entertainment products,
merchandising, and content on mobile phones.
Diversify Into Producing
International and Indian Regional Movies:
They believe in continuing to expand into the international marketplace rather
than being restricted in producing only Indian movies. The co-production of
Hollywood movies is evidence of this as they have been associated with well
regarded media companies in the
Retain all distribution rights
over content:
The strategy is to continue to focus on the production, or
co-production, and distribution of the own movies. They believe that movie
production entails fewer risks than having a distribution only model due to the
wide array of distribution platforms that are available to us when they produce
the own movies. Producing the own movies allows us to utilise the intellectual
property rights over such movies and capitalise on multiple distribution
channels such as music, home video, television rights, new media and merchandising
rights. Alternatively, they are not averse of acquiring movies provided they
are available to us for exploitation across multiple platforms and for long
period of time.
Broadcasting Develop Unique and
High Quality:
Broadcasting Content:
Through the proposed investment into UGBL, they intend to focus on developing
broadcasting entertainment that caters to various target segments of
Interactive:
Evaluate Opportunities for Growth in the Console and
During fiscal 2007, they acquired a controlling stake in Ignition that
undertakes in-house game development for consoles as well as worldwide
distribution of games. They also completed the process of acquiring a
controlling interest in Indiagames Limited during the current fiscal. They
believe that the acquisition of Ignition and Indiagames will drive the growth
in the interactive media business segment. They will also continue to evaluate
new opportunities for growth within the business and in the interactive gaming
industry generally.
Focus on Creating Intellectual Property Rights over the Gaming Content
they develop:
They have in the past been focused on developing animation for clients, which
provides us with a stable revenue stream but does not allow us to retain
intellectual property rights over the animation they develop. With the
state-of-the-art animation studio, they believe they can begin the own in-house
large-scale animation projects which will provide us with certain advantages,
such as allowing us to retain certain intellectual property rights over the
animation content they produce and integrating the animation production
capabilities with the various distribution platforms.
In gaming too, the focus is on development rather than just publishing. In
Ignition at present, for example, they are in the process of developing three
original Intellectual Properties Wardevil, Reich and Angelic, for various
platforms. Original IP in gaming not only gives us the flexibility of
exploitation worldwide through multiple platforms but also allows us the option
of developing and publishing sequels.
New Media:
Monetise in-house and acquired content through Web and handheld
platforms:
Besides the website UTVi.com, UNML has plans of working in tandem with the
Bindass, UTV Movies and World Movies channels to set up entertainment portals
showcasing and monetising their content. However, UNML is not only restricting
itself to the in-house content available within the Group.
It is also looking at other sectors of entertainment and leisure which can be
deployed over the web and handheld devices. Besides servicing the entire
network on Web and mobile domain, it is also simultaneously forging
content/ecommerce tie ups with other established portals. On the mobile front,
it is also contracting various catalogues from the South Indian and other
regional spaces. With ITNation, UNML has got access to an interesting vertical
like technology but with an entertainment focus where it shall explore the
inherent synergies between its own operations and the Group's various
businesses. IT Nation also brings along excellent IT support and infrastructure
to the existing UNML businesses along with management with extensive experience
in the Web domain.
OPPORTUNITIES AND THREATS:
They currently operate in a highly competitive and dynamic industry. In
They look at the World as a marketplace and tapping that marketplace is a huge
opportunity for us. They are taking strides in that direction through the foray
into
In the Movies distribution business, the rapid growth of multiplexes and
digitisation of movie halls is presenting us with the opportunity of reaching
wider audiences in the first weekend itself. This is changing the economics of
the film distribution business. Changes such as these help film makers work
with greater creative freedom given the ability to work with larger budgets.
The flipside to this is that costs of production in general and star prices in
particular are on the rise and this calls for some degree of caution on the
part of film makers. They also believe the revolution in home video is still in
the making and lots will change in the areas of new media exploitation as
well.
The television space is highly fragmented and they expect some consolidation to
take place on that front. The mushrooming of broadcasting channels in
Further, fragmentation of audiences and growth of two TV households will
increase the demand for innovative, specialised programming. Audience
preferences, fickle as they are, are the biggest threat to this business. It is
essential to be ahead of time in this business rather than being a follower.
Innovation cannot be sporadic; it has to be continuous.
Gaming is a multi billion dollar industry worldwide and they are at present,
barely a drop in this large ocean. Both Ignition and Indiagames are looking at
the world as their markets rather than being restricted to any particular
region. Gaming in
While new and addressable technologies like Conditional Access System (CAS),
Direct-to-Home (DTH) and Internet Protocol Television (IPTV) provide opportunities
for broadcasters, due to the regulatory environment surrounding these areas,
any delay or change in the implementation of these can prove detrimental to the
broadcasting plans. The single biggest threat in this segment would come from
the large number of players, both existing and new, with fairly deep pockets,
which are capable of changing the dynamics of the business, at least in the
short term.
Considering the integrated business model that they have put together in the
recent past, the biggest opportunity for us is to cross leverage the power of
these businesses with each other. While each of these businesses in themselves
are capable of substantial scale up, achieving optimal synergies between these
businesses can take us to a different scale altogether.
The business of media and entertainment is all about creativity, people being
at the centre of that. With the amount of money that is being offered, manpower
retention is one the biggest challenges for any manpower intensive business.
Fixed Assets:
·
Leasehold improvements
·
Building
·
Plant and Machinery
·
Furniture and Fixture
·
Computers
·
Office Equipments
·
Motor Vehicles
·
Computer Software
·
Goodwill
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.48.49 |
|
|
1 |
Rs.71.89 |
|
Euro |
1 |
Rs.67.86 |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|