MIRA
INFORM REPORT
|
Report Date : |
14.05.2012 |
IDENTIFICATION DETAILS
|
Name : |
PRIME FOCUS LIMITED |
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Registered
Office : |
2nd Floor, Building – H, Main Frame IT Park, Royal Palms, Near Aarey Colony, Goregaon –
(East), Mumbai- 400065, Maharashtra |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
24.06.1997 |
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Com. Reg. No.: |
11-108981 |
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Capital
Investment / Paid-up Capital : |
Rs. 138.867 Millions |
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CIN No.: [Company Identification
No.] |
L92100MH1997PLC108981 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
MUMP09864B |
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PAN No.: [Permanent Account No.] |
AACP6811B |
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Legal Form : |
A Public Limited Liability company. The company’s Share are Listed on the
Stock Exchange. |
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Line of Business
: |
Providing Digital and post Production Services |
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No. of Employees
: |
3500 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (48) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 12000000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is an established company having satisfactory track. Trade
relations are reported as fair. Business is active. Payments are reported to
be usually correct and as per commitment. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
|
Risk Category |
ECGC Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
2nd Floor, Building – H, Main Frame IT Park, Royal Palms, Near Aarey Colony, Goregaon –
(East), Mumbai- 400065, Maharashtra, India |
|
Tel. No.: |
91-22-42095000 |
|
Fax No.: |
91-22-42095001 |
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E-Mail : |
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|
Website : |
DIRECTORS
As on 13.04.2012
|
Name : |
Mr. Naresh Malhotra |
|
Designation : |
Chairman&Whole-time Director |
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|
Name : |
Mr. Namit Malhotra |
|
Designation : |
Managing Director |
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|
Name : |
Mr. Rakesh Jhunjhunwala |
|
Designation : |
Non Executive Director |
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|
Name : |
Mr. Chandir Gidwani |
|
Designation : |
Non Executive Director |
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|
Name : |
Mr. Kodi Raghavan Srinivasan |
|
Designation : |
Independent and Non Executive Director |
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|
Name : |
Mr. Rivkaran Chadha |
|
Designation : |
Independent and Non Executive Director |
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Name : |
Mr. Padmanabha Gopal Aiyar |
|
Designation : |
Independent and Non Executive Director |
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|
Name : |
Mr. Hariharan Padmanabhan |
|
Designation : |
Independent and Non Executive Director |
KEY EXECUTIVES
|
Name : |
Mr. Navin Agarwal |
|
Designation : |
Company Secretary |
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|
Name : |
Mr. Ramki Sankaranarayanan |
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Designation : |
Chief Executive Officer |
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Name : |
Mr. Nishant Fadia |
|
Designation : |
Chief Executive Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 13.04.2012
|
Category of Shareholders |
No. of Shares |
Percentage of Holding |
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
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|
75787712 |
50.91 |
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|
- |
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|
75787712 |
50.91 |
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|
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|
Total shareholding
of Promoter and Promoter Group (A) |
75787712 |
5091. |
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
1392539 |
0.94 |
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|
64000 |
0.04 |
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|
12306692 |
8.27 |
|
|
13763231 |
9.25 |
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|
|
|
|
|
24371179 |
16.37 |
|
|
|
|
|
|
14174399 |
9.52 |
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|
16263391 |
10.92 |
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|
|
|
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|
2.801017 |
1.88 |
|
|
1696517 |
1.14 |
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|
10000 |
0.01 |
|
|
59316503 |
39.85 |
|
Total Public
shareholding (B) |
73079734 |
49.09 |
|
Total (A)+(B) |
148867446 |
100.00 |
|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
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|
- |
- |
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- |
- |
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- |
- |
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Total
(A)+(B)+(C) |
148867446 |
- |
BUSINESS DETAILS
|
Line of Business : |
Providing Digital and post Production Services |
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Product: |
Digital and post Production Services |
GENERAL INFORMATION
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No. of Employees : |
3500 (Approximately) |
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Bankers : |
·
Yes Bank Limited ·
ICICI Bank Limited ·
Ratnakar Bank Limited ·
IDBI Bank Limited ·
Kotak Mahindra Bank Limited |
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Facilities : |
(Rs. in Millions)
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
MZS and Associates Chartered Accountants |
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Subsidiaries : |
·
Prime Focus London Plc. ·
Prime Focus International Limited (formerly known
as Prime Focus Investments Limited) ·
Prime Focus Technologies Private Limited ·
Flow Post Solutions Private Limited ·
GVS Software Private Limited ·
Prime Focus Motion Pictures Limited |
|
|
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|
Enterprises owned or significantly influenced by Key Management
Personnel or their relatives: |
·
Blooming Bud Coaching Private Limited ·
N2M Reality Private Limited |
CAPITAL STRUCTURE
As on 30.09.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200000000 |
Equity Shares |
Rs.1/- each |
Rs. 200.000 Millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
148867446 |
Equity Shares |
Rs.1/- each |
Rs. 148.867
Millions |
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|
|
|
|
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
200000000 |
Equity Shares |
Rs.1/- each |
Rs. 200.000 Millions |
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|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
138867446 |
Equity Shares |
Rs.1/- each |
Rs. 138.867
Millions |
|
|
|
|
|
Note: Of the above: i. 36,000,000
Equity Shares of Rs. 1/- each (Previous year 3,600,000 Equity Shares of
Rs. 10/- each) each were allotted as
fully paid up pursuant to scheme of arrangement for consideration other than
cash.
ii. 40,000,000
Equity Shares of Rs. 1/- each (Previous year 4,000,000 Equity Shares of Rs.
10/- each) were allotted as fully paid up bonus shares by capitalisation of
Reserves.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
138.867 |
128.226 |
128.226 |
|
|
2] Share Warrant |
138.695 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2885.598 |
1990.951 |
1863.685 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
3163.160 |
2119.177 |
1991.911 |
|
|
LOAN FUNDS |
|
|
|
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|
1] Secured Loans |
1196.667 |
1518.716 |
1622.940 |
|
|
2] Unsecured Loans |
2162.697 |
2162.697 |
2162.697 |
|
|
TOTAL BORROWING |
3359.364 |
3681.413 |
3785.637 |
|
|
DEFERRED TAX LIABILITIES |
187.303 |
164.522 |
161.919 |
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|
|
|
|
|
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TOTAL |
6709.827 |
5695.112 |
5939.467 |
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APPLICATION OF FUNDS |
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|
|
|
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FIXED ASSETS [Net Block] |
2226.413 |
1407.086 |
1618.893 |
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Capital work-in-progress |
52.366 |
600.694 |
444.256 |
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INVESTMENT |
|
|
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DEFERREX TAX ASSETS |
2302.297 |
2302.272 |
2307.269 |
|
|
|
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
0.000
|
0.000 |
0.000 |
|
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Sundry Debtors |
1073.179
|
677.701 |
524.266 |
|
|
Cash & Bank Balances |
110.206
|
151.805 |
470.805 |
|
|
Other Current Assets |
56.315
|
62.187 |
0.000 |
|
|
Loans & Advances |
1122.347
|
888.986 |
748.978 |
|
Total
Current Assets |
2362.047
|
1780.679 |
1744.049 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
164.852
|
94.339 |
63.217 |
|
|
Other Current Liabilities |
65.741
|
29.781 |
110.559 |
|
|
Provisions |
2.703
|
1.499 |
1.225 |
|
Total
Current Liabilities |
233.296
|
125.619 |
175.001 |
|
|
Net Current Assets |
2128.751
|
1655.060 |
1569.049 |
|
|
|
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|
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|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
6709.827 |
5965.112 |
5939.467 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
1355.058 |
952.726 |
910.953 |
|
|
|
Other Income |
48.163 |
50.428 |
117.485 |
|
|
|
TOTAL (A) |
1403.221 |
1003.154 |
1028.438 |
|
|
|
|
|
|
|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Operating Costs |
804.781 |
494.902 |
515.084 |
|
|
|
TOTAL (B) |
804.781 |
494.902 |
515.084 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
598.440 |
508.252 |
513.354 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
138.615 |
123.560 |
140.929 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
459.825 |
384.692 |
372.425 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
239.510 |
193.497 |
182.001 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
220.315 |
191.195 |
190.424 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
22.780 |
63.929 |
56.959 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
197.535 |
127.266 |
133.465 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
1012.692 |
885.426 |
751.961 |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
1210.227 |
1012.692 |
885.426 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Technical Services Receipts |
279.377 |
47.932 |
47.024 |
|
|
|
Interest Received |
0.006 |
0.549 |
4.831 |
|
|
TOTAL EARNINGS |
279.383 |
48.481 |
51.855 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Capital Goods |
205.955 |
322.731 |
NA |
|
|
TOTAL IMPORTS |
205.955 |
528.686 |
NA |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
1.49 |
0.99 |
10.48 |
|
|
|
Diluted |
1.26 |
0.89 |
9.33 |
|
QUARTERLY
|
PARTICULARS |
30.06.2011 1st Quarter |
30.09.2011 2nd Quarter |
31.12.2011 3rd Quarter |
|
Type |
Unaudited |
Unaudited |
Unaudited |
|
Net Sales |
359.110 |
410.210 |
469.240 |
|
Total Expenditure |
269.090 |
298.520 |
338.360 |
|
PBIDT (Excl OI) |
90.020 |
111.690 |
130.880 |
|
Other Income |
16.980 |
84.630 |
61.780 |
|
Operating Profit |
107.000 |
196.320 |
192.660 |
|
Interest |
36.200 |
41.400 |
48.630 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
70.800 |
154.920 |
144.030 |
|
Depreciation |
69.1200 |
70.620 |
67.930 |
|
Profit Before Tax |
1.680 |
84.300 |
76.100 |
|
Tax |
(3.750) |
20.530 |
26.740 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
5.430 |
63.760 |
49.350 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
5.430 |
63.760 |
49.350 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
14.08
|
12.68 |
12.98 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
14.58
|
20.07 |
20.90 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
9.33
|
10.74 |
10.92 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.07
|
0.09 |
0.10 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.07
|
0.06 |
0.09 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
10.12
|
14.18 |
9.97 |
LOCAL AGENCY FURTHER INFORMATION
|
Check List by Info Agents |
Available in Report (Yes / No) |
|
1) Year of Establishment |
Yes |
|
2) Locality of the firm |
Yes |
|
3) Constitutions of the firm |
Yes |
|
4) Premises details |
No |
|
5) Type of Business |
Yes |
|
6) Line of Business |
Yes |
|
7) Promoter’s background |
Yes |
|
8) No. of employees |
Yes |
|
9) Name of person contacted |
No |
|
10) Designation of contact person |
No |
|
11) Turnover of firm for last three years |
Yes |
|
12) Profitability for last three years |
Yes |
|
13) Reasons for variation <> 20% |
-- |
|
14) Estimation for coming financial year |
No |
|
15) Capital in the business |
Yes |
|
16) Details of sister concerns |
Yes |
|
17) Major suppliers |
No |
|
18) Major customers |
No |
|
19) Payments terms |
No |
|
20) Export / Import details (if applicable) |
No |
|
21) Market information |
-- |
|
22) Litigations that the firm / promoter |
-- |
|
23) Banking Details |
Yes |
|
24) Banking facility details |
Yes |
|
25) Conduct of the banking account |
-- |
|
26) Buyer visit details |
-- |
|
27) Financials, if provided |
Yes |
|
28) Incorporation details, if applicable |
Yes |
|
29) Last accounts filed at ROC |
Yes |
|
30) Major Shareholders, if available |
No |
OPERATIONS REVIEW:
Total Income of The Company for the year increased to Rs. 1403.221 Millions from Rs. 1003.154 Millions in the previous year and witnessed 39.88% growth. Profit before Tax, Depreciation and Interest (PBDIT) amounted to Rs. 598.440 Millions which is higher by 17.74 % in comparison to previous year. Net Profit after Tax is at Rs. 197.535 Millions as against Rs. 127.266 Millions in previous year.
On consolidated basis, total income of The Company and its
subsidiary stands at Rs. 5179.357 Millions. Total Income has increased by
12.21% over previous financial year. Profit before Tax, Depreciation and
Interest (PBDIT) was Rs. 1750.565 Millions which is higher by 52.63% in
comparison to previous year amount of Rs. 1146.935 Millions. Profit after Tax
(PAT) increased by 123.87% during the year and stands at Rs. 881.881 Millions.
CAPITAL
During the year,
the authorised share capital of the Company was increased from Rs. 150.000
Millions to Rs. 200.000 Millions to enable the Company to meet the additional
capital requirements.
During the year,
the Company has allotted 10,641,566 Equity Shares of face value of Re. 1/- each
to Qualified Institutional Buyers under QIP as per Chapter VI of the SEBI Regulations
at a price of Rs. 68.58 per Equity Share (Including a premium of Rs. 67.58 per
Equity Share), aggregating to Rs. 729.798 Millions on November 10, 2010. The
amount was raised with object to augment long term working capital requirements
of the Company in view of the expected growth in the Company’s business, prepay
/ repay debt, expand and to upgrade existing facilities, strengthen the
financial position of our Company, fund other strategic initiatives and/or for
other general corporate purposes.
The Company has
allotted 1,000,000 warrants convertible into Equity Shares on October 15, 2010
to Mr. Namit Malhotra, a member of the Promoters and Promoter Group carrying an
option/ entitlement to subscribe to equivalent number of Equity Shares on a future
date not exceeding 18 months from the date of allotment of such warrants. Each
warrant shall be convertible into one equity share of nominal value of Rs. 10/-
each at a price not less than the minimum price determined in accordance with
the provision of Chapter VI of SEBI (ICDR) Regulations.
To augment and
improve liquidity of Company’s equity share and enhance shareholder’s value,
Company’s equity share of Rs. 10/- each fully paid up was subdivided into 10
equity shares of Rs.1 fully paid up. The record date fixed for the purpose of
sub division of equity shares of the company was November 1, 2010.
The Company had
issued FCCB of USD 55 mn on December 12, 2007 and during the year, no bonds
have been converted into equity shares of the Company.
FINANCIAL PERFORMANCE
The total income of the Company increased to Rs. 5179.360 million compared to Rs. 4615.720 million in the previous year, a rise of 12.21%. EBIDTA improved from Rs. 1146.930 million in the previous year to Rs. 1750.560 million in the current year, registering a growth of 52.63%. The Profit before Tax for the current year stood at Rs. 941.940 million against Rs. 502.720 million in the previous year, indicating a rise of 87.37%. The Profit after Tax (before minority interest) increase to Rs. 881.880 million from Rs. 393.930 million in the previous year, an increase of 123.87%.
Awards and
Achievements:
During the year, the Company has received several awards.
Some prominent awards received are as follows:
• CGTantra Community Awards 2011 for Best VFX in Commercial for Zen Estilo ad.
• Apsara Awards 2011 for Best Visual Effects for ‘Guzaarish’
• EME Awards 2011 for Best Film Content ‘Guzaarish’
• EME Awards 2011 for the Best TV Content for Indigo Airlines ‘On-Time’ advert.
• Award of Excellence at ASIFA IAD 2010 for ‘Raavan‘
MANAGEMENT DISCUSSION
AND ANALYSIS
Economic Overview
In its twice-yearly world economic outlook published in April 2011, the International Monetary Fund (IMF) has confirmed that the global economic recovery is proceeding steadily. It has estimated GDP growth at 4.4% for the current year and has projected a 4.5% growth in the next year.
While the US GDP grew at 3.1% in 2010, the euro zone continued to struggle with a growth of about 1% in GDP. The situation in the UK remained grim, considering that in February 2010, the authorities revised the GDP growth numbers to 1.7% from 1.8% for the current year, and from 2.3% to 2.2% for the year 2012. In the first quarter of 2011, the GDP actually contracted by 0.5%, largely due to a massive cut in spending, subdued wages and squeezed household budgets.
Emerging markets, especially those in India and China, continued their growth momentum, with 8.8% and 10% GDP growth respectively. In India, the economy is fast moving forward on the back of impressive growth in consumption, rise in salary-levels, rapid urbanisation and overall growth in the manufacturing and service sectors. Inflation does continue to remain a worry and concern, with the government raising interest rates to rein in growing inflation.
Industry Overview
After being impacted adversely by the global downturn in economy in 2008 and 2009, the global entertainment and media (EandM) industry has entered a positive growth phase in 2010, according to the Global Entertainment and Media Outlook: 2010-14 report by Price Waterhouse Coopers (PWC). This report estimates the global EandM spending grew by 4.6% in the year 2010. Over the next five years, the E and M spending is estimated to rise to USD 1.9 trillion in 2015, growing at a Compounded Annual Growth Rate (CAGR) of 5.7%.
R egion-wise, the US continued to be the single-largest market at US$ 726 million in 2010 and is growing at a CAGR of 5.6%. Europe and Middle East combined are the second-largest market with a size of US$ 580 million and CAGR of 6.1%. Asia-Pacific is the fastest growing market with a size of US$ 425 million and CAGR of 9.2%, led by explosive growths in China and India.
Sector-wise, Television Distribution is the largest segment at US$ 230 billion with a CAGR of 8.3%, closely followed by Television Network (Broadcast and Cable) growing at a CAGR of 6.6%. The Film Entertainment segment is US$ 104 billion and expected to grow at CAGR of 5.3%. The highest growth is expected to come from the Video Gaming segment at 11.4% CAGR and which is worth US$ 46.0 billion in 2010. The music segment is pegged to grow at 5.2% CAGR with an estimated size of US$ 47.9 billion in 2010.
The year also saw some clear trends emerging in the industry:
2010 marks the first time in history that 5 out of the top 10 and only the 5th time that 2 out of the top 5 highest grossing films were animation films. Toy Story 3 grossed over US$ 1 billion. In fact, TOY STORY 3 is the highest
grossing animated film ever and the first animated film to have grossed US$ 1 billion. With Harry Potter and the Deathly Hallows Part I, Inception, Shrek Forever After and The Twilight Saga – Eclipse also in the top 10, animation and VFX is now big business.
Digital technology continues to increase its dominance across all segments of the industry. Unprecedented changes in technology and consumer behaviour are making the industry more fragmented and diverse. As 3D invades more and more of Their daily lives through 3D televisions and 3D games with motion sensors, there is a
growing readiness to pay for content driven by improved customer experience and convenience.
As 3D invades more
and more of Their daily lives through 3D televisions and 3D games with motion
sensors, there is a growing readiness to pay for content driven by improved
customer experience and convenience.
The Indian Market
After a lacklustre 2009, the year 2010 was one filled with growth and dynamism for the industry. The industry registered a healthy growth of 11% over 2009 and touched INR 652 billion. This trend is expected to continue in 2011 when the industry is estimated to grow by 13%. This interesting year also saw an influx of new content distribution platforms, as well as growth in regional markets. There was a marked resurgence in advertising spends and DTH subscribers touched grew to almost 28 million by the end of 2010, a tremendous growth. Digitisation continued to be a key driver of growth, with greater adoption of digital prints by the film studios. With the rollout of 3G and new devices like tablets, new media comprising of gaming, digital advertising and animation and VFX are growing much faster. Animation and VFX stands apart insofar as growth opportunities are concerned, with a huge potential for growth in film-restoration and 2D-3D conversion.
As per FICCI -KPMG report 2011, film was the only segment of the industry that did not grow in 2010. The dismal
performance of 2009 continued in 2010, with size shrinking to INR 83 billion from INR 89 billion in the previous year, a decline of 6.7%. As in 2009, the prime reason for this decline was lack of availability of good quality content.
2010 also saw unprecedented growth in the DTH platform. The net subscriber base increased by over 75% as compared to 2009 and 12 million new subscribers were added, making the total number of subscribers 28 million at the end of 2010. The Television segment grew by 15.5% in 2010, and is expected to touch INR 630 million by 2015, making it half the industry size and the second largest segment.
Indian Animation and
VFX
The Indian animation and VFX segment grew at 17.5% in 2010 over 2009 to reach INR 26.6 million. The growth was led by VFX and post production, which grew at 42% and 17%, while animation grew at 10%.
Even though seven animated movies were being made in 2010, only three (Toonpur Ka Superhero, Luv-Kush – The Warrior Twin and Ramayana – The Epic) were eventually released in the theatres, where they received lukewarm success. A primary reason for this is lack of distribution partners. On the other hand, globally, it was a year of super success for animated films. Two out of the top five and five out of the top ten highest grossing films were animated films. Toy Story 3 grossed over US$ 1 billion.
The quantum of work in the animation segment continued to be dominated by TV, which accounted for 60% of all
work done in animation. Direct to DVD and Movies for theatres accounted for 20% each of the total quantum of
work in this segment.
The VFX segment continued to play an ever-increasing role in movies world-wide. Of the top ten highest grossing movies of 2010, Iron Man2, Inception, TRON: Legacy and Clash of the Titans all heavily used VFX. In 2009, nine of the top ten highest grossing movies relied heavily on VFX. In the Indianfilm industry too, the demand for VFX is growing as Indian film-makers explore newer genres like sci-fi and mythology.
BUSINESS OVERVIEW
Prime Focus Limited (Prime Focus) is a leading visual entertainment services company in Asia, and the largest in India. The company started in 1997 in Mumbai as a post production house. Today, with a pan-India presence in Mumbai, Delhi, Chennai, Bangalore, Hyderabad and Chandigarh, the company has transformed itself into a onestop shop providing Creative and Technical services for the film, broadcast, commercials, music, gaming and media industries. It is part of the global Prime Focus group which has offices in major markets like London, New York, Los Angeles and Vancouver. The company works with marquee clients that include the biggest names in the industry: Warner Bros, Universal, Paramount, 20th Century Fox, James Cameron, Ogilvy, JWT, BBC, Saatchi and Saatchi, Yash Raj Films, Dharma Productions, Red Chillies Entertainment and many more.
The company continues its aggressive foray into the Indian media and entertainment space with a combined focus on building its resources and introducing cutting edge new products. The company provides a unique ‘multi-local’ advantage to its customers via the use of its Global Digital PipelineTM. The company offers a full range of products and services, thereby reducing the need for multiple vendors and resulting in higher efficiencies of scope, scale and size for its customers.
The company has also launched SPF Worldversioningtm, a service that enables smooth and seamless roll out of global and regional marketing campaigns. The company has partnered with SCHAWK! – the world’s largest print supplier - to deliver Clear CPMTM, a total campaign management tool. SPF Worldversioningtm brings the synergies of the global footprint of both companies together, enabling tailormade control and coordination to suit clients/agencies’ specific requirements.
AWARDS WON DURING THE
YEAR
· ‘Best Special Effects’ for ‘Guzaarish’ at 2011 Apsara Awards
· EME Award for ‘VFX for the Best Film Content’ for ‘Guzaarish’
· ‘Award of Excellence’ at ASIFA IAD 2010 for ‘ Raavan’
· EME Award for ‘VFX for the Best TV Content’ for ‘On- Time’ (IndiGo Airlines)
· Gold Award in ‘Filmcraft (Special Effects)’ at Goafest2011 - ‘On-Time’ (IndiGo Airlines)
· CLEAR™ awarded ‘BEST OF IBC 2010’ at theInternational Broadcasting Convention in Amsterdamin September 2010
OUTLOOK
There is a lot to look forward to in the forthcoming year. With the industry estimated to grow at a CAGR of 14% and reach a size of INR 1275 billion, all segments of the industry are positively placed for sustained growth. Prime
Focus is well-poised and positioned to ride this wave of growth and expansion of opportunities.
The new media, comprising of gaming, digital advertising, and Animation and VFX, are set to dominate growth in the industry, with CAGR of 31%,28% and 19% respectively till 2015. Another strong emerging area of growth is in
the 3D segment. Movies like Avatar have been gamechangers and with advances in technology (both hardware and software), 3D is set to permeate beyond the theatrical experience to homes and gaming by way of 3D televisions and 3D gaming. Services like restoration archiving are also expected to take off and grow substantially.
Prime Focus is the largest Visual Entertainment Services player in India and a leading player in Asia. With a geographic presence across three continents and a unique global network of integrated studios located in all the major markets in the world, Prime Focus offers its spectrum of services in 4 timezones on a 24/7 basis. Prime Focus has a range of creative and technical products and services that are aimed at all value points and functions in the industry. From content creation to conservation and from crafting to circulation, it has products like SPF Worldversioningtm, Clear tm and View-DTM that deliver compulsive time and cost advantages for customers.
The future outlook for the company is bright and optimistic
and the company expects to take full advantage of its unique competencies,
capabilities and capacities to further strengthen its position as a leading
player.
CONTINGENT
LIABILITIES
|
Particular |
31.03.2011 |
|
On account of undertakings given by the Company in favour of Customs
authorities at the time of import of capital goods under EPCG Scheme. The
Company is confident of meeting its future obligations on such undertakings
in the normal course of business. |
693.529 |
|
On account of undertaking given on future probable obligation on behalf
of subsidiary company in the course of acquisitions made. |
60.966 |
|
Matters pending with Tax Authorities (Block Assessment). Company has been
advised that it has a valid case based on similar decided matters. |
0.112 |
|
Matters pending with Tax Authorities towards addition made by the tax
authorities for the AY 2007-08. Company has gone for an appeal to CIT (Appeals)
and has made full payment of demand under protest. |
5.271 |
|
Guarantee for Lease taken by step – down subsidiary |
44.631 (USD 1,000,000) |
|
Premium on conversion of FCB |
598.162 |
FIXED ASSETS
·
Tangible Assets
·
Building
·
Plant and Machinery
·
Furniture and Fixtures
·
Office Equipments
·
Vehicles
·
Intangible Assets
·
Goodwill
·
Right
·
Software
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 records 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.53.64 |
|
|
1 |
Rs.86.42 |
|
Euro |
1 |
Rs.69.28 |
INFORMATION DETAILS
|
Report Prepared
by : |
KVT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
5 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
5 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
48 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.