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Mukta Arts Ltd.

BSE: 532357 Sector: Media
NSE: MUKTAARTS ISIN Code: INE374B01019
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VOLUME 5374
52-Week high 120.00
52-Week low 61.20
P/E 54.22
Mkt Cap.(Rs cr) 142
Buy Price 0.00
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Sell Price 0.00
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OPEN 64.25
CLOSE 63.25
VOLUME 5374
52-Week high 120.00
52-Week low 61.20
P/E 54.22
Mkt Cap.(Rs cr) 142
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mukta Arts Ltd. (MUKTAARTS) - Director Report

Company director report

To the Members

Your Directors take pleasure in presenting the Thirty Fifth Annual Report together withthe Audited Statement of Accounts of the Company for the financial year ended 31stMarch 2017.

1. RESULTS OF OUR OPERATIONS

(Figures in Millions)
Particulars Year ending 31.03.2017 Year ending 31.03.2016
(Rs.) (Rs.)
Profit/(Loss) before interest depreciation & tax 135.40 102.81
Less: Interest 63.52 58.65
Profit/(Loss) after interest before depreciation & tax 71.88 44.15
Less: Depreciation 64.67 61.69
Profit/(Loss) before tax 7.21 (17.53)
Less: Provision for taxation 9.43 0
Deferred Tax Liability /(Asset) 6.54 1.52
Profit/(Loss) available for appropriation (8.76) (19.05)
Less: Interim / Final Dividend 0 0
Tax on Interim / Final Dividend 0 0
Profit/(Loss) for the year (8.76) (19.05)
Add: Balance brought forward (69.55) (50.50)
Less: Transfer to general reserve 0 0
Profit/(Loss) Carried forward to Balance Sheet (78.31) (69.55)

Financial Performance and the state of Company's affairs:

During the year the total revenues of the Company were placed at Rs. 681.02 Millionscompared to Rs. 618.404 Millions last year.

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

The Company and Whistling Woods International Ltd. had filed applications at the BombayHigh Court to review its order dated 9th February 2012 and after detailed hearing theReview Petition was admitted and a stay was granted on 30th July 2014. Howeveras an interim arrangement the High Court has ordered the Petitioner to deposit withMaharashtra Film Stage and Cultural Development Corporation Limited (‘MFSCDCL') thearrears of rent for the years 2000-01 to 2013-14 aggregating to Rs 100038000 by January2015 and pay rent of Rs. 4500000 per annum from the year financial 2014-15 pendingdisposal of the review petition. As per the terms of the said order MAL has paid anaggregate amount of Rs. 113538000 /- by 31st March 2017 pending final hearing. TheState Government of Maharashtra and MFSCDCL had challenged the Order of the High Court inthe Supreme Court this special leave petition was dismissed by the Supreme Court on 22ndSeptember 2014.

Dividend

In view of the loss incurred by the Company in the year under review Your Directorsregret that they have not recommended any dividend on Equity Shares for the year ended on31st March 2017.

Particulars of loans guarantees or investments by company

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to Financial Statements.

Fixed Deposits

The Company has not accepted any deposits within the meaning of section 73 of theCompanies Act 2013 read with the Companies (Acceptance of deposits) Rules 2014.

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

All transactions entered with Related Parties for the year under review were on arm'slength basis and in the ordinary course of business and that the provisions of sections188 of the Companies Act 2013 are not attracted. Thus disclosure in Form AOC-2 is notrequired. Further there are no material related party transactions during the year underreview with Promoters Directors or Key Managerial Personnel. The Company has developed aRelated Party Transactions framework through Standards Operating Procedures for thepurpose of identification and monitoring of such transactions.

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

Material changes and commitment if any affecting the financial position of thecompany occurred between the end of the financial year to which this financial statementsrelate and the date of the report

Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.

Share Capital

During the year under review the company had re-issued and allotted 4000 Equity shareswhich were forfeited earlier to Mr. Subhash Ghai @ Rs. 66.24/- and hence the issued andpaid up capital rose from Rs. 112906000/- to Rs. 112926000/-

2. BUSINESS OVERVIEW

Your Company has for the past two years been focusing increasingly on the Cinemabusiness. Over the years the Company has built up a dedicated clientele with its offeringof affordable luxury where the patron gets a world class experience at par with any ofIndia's other top multiplexes but at a distinctly more affordable value. The Company isexpanding internationally and its premium 6 screen multiplex theatre in Bahrain opened inSeptember 2016. In addition the company has opened multiple properties across India andmany more will follow.

During this fiscal year the Company has transferred its Cinema exhibition division toa separate legal entity Mukta A2 Cinemas Limited (Wholly owned subsidiary) of Mukta ArtsLimited by way of slump sale.

Connect.1 Limited has produced a number of short films specifically for the internetmedium with a good response. The company continues to partner with the best platforms toensure that we build strongly on this success.

Subsidiary Companies

As on 31.03.2017 we have seven Indian subsidiary Companies namely Whistling WoodsInternational Limited Connect.1 Limited Mukta Tele Media Limited Mukta CreativeVentures Limited (Formerly known as Coruscant Tec Limited) Mukta A2 Multiplex SPC. MuktaA2 Cinemas Limited and Mukta V N Films Limited. There is no material subsidiary of thecompany within the meaning of Regulation 27 and 30 of the Listing Regulations.

Out of the subsidiaries of the Company the most notable has been the WhistlingWoods International Limited (‘WWI') that has regularly been rated as one of theTen Best Film Schools in the World by ‘The Hollywood Reporter' partnering withglobal brands like Sony Apple Foxconn & many more and with its alumni earninglaurels in India & globally. In the field of Digital Content Creation and educationthereof Whistling Woods is now partnering with Google and has set up India's first andAsia's 2nd ‘YouTube Space'. WWI has also entered into a historic partnership with theTata Institute of Social Sciences' School of Vocational education to accredit all the3-year UG courses that WWI runs with BSc BA & BBA degrees. Whistling Woods continuedits discussions and negotiations with the Maharashtra government to restore its originalland holdings so that it is able to proceed appropriately with its strategically proposedexpansion plan. Academically WWI has its own School of Music with a 2-yr Diploma in MusicProduction & Composition and has been in market with its online education with a‘Foundation in Film-making' course under the WWI Virtual Academy.

Another subsidiary of the Company Connect.1 Ltd. (C.1) the digital contentcreation and distribution arm of Mukta Arts continues to exploit the latent industryopportunity in the digital content consumption sector. After exploring the non-fictioncontent space on YouTube C.1 has restructured its business model to focus on what thecore strengths of the group are - fiction content. C.1 has established ties with theexisting and emerging digital content platforms in India & overseas and pursuant tothe same has commissioned fiction web-series and short-fiction story ideas. In the monthsto come these will be developed by C.1 produced in-house or co-produced with otherdigital platforms and syndicated to various digital content platforms for distribution.C.1 has also restructured its business to reduce its fixed cost in order to build aleaner more financially efficient business model. C.1 has also undertaken a detailedresearch & analysis of the digital content industry in India and having observed thegrowth cycle is strategically planning its investment in digital platform content tocoincide with the growth of monetisation efficiency of the industry.

Mukta Tele Media Limited is another subsidiary of the Company. The main objects ofthe Company are to take up production of tele-serials management of event shows andentertainment software.

Another subsidiary of the Company Mukta Creative Ventures Limited (formerlyknown as Coruscant Tec Limited) is a Mumbai (India) based mobile solutions companywith a focus on content applications and commerce having office in Mumbai. The companyhas in a short period of time forged alliances with several leading Indian andinternational aggregators telecom operators (telcos) financial networks and banks tobring mobile content and commerce to Indian mobile subscribers-one of the fastest growingtelecom markets in the world thereby reaching out to almost 55 million subscribers in GSMand CDMA segments.

Mukta A2 Cinemas Limited is a wholly owned subsidiary company incorporatedexclusively to handle the exhibition business. The Business of Cinemas are shooting up asafter a lackluster 2014 the film sector saw Hollywood and regional films creating recordsand pushing this sector to grow by 9.3% though Bollywood offerings remained muted in theirperformance. With the digital sector on a high growth path the exhibition sector needsinnovative solutions to improve its growth trajectory. This company is likely to increasethe ability and autonomy to nurture the Cinema Business effectively streamline theactivities currently being undertaken by the Company rationalize financial strength andflexibility and deliver greater value to the investors and the clients.

Mukta A2 Multiplex SPC. is also a wholly owned subsidiary company incorporated inthe Kingdom of Bahrain for running of a 6 screen multiplex in the Mall situated at JuffairMall. The success of the brand in India and the zest with which patrons have accepted ithas ushered the company to open a cinema over-seas in the beautiful city of ManamaBahrain. This will be the first time that an Indian exhibition company not even a decadeold opens a branch abroad. The company has lived up to the standards it has set foritself- to provide its patrons the best movie watching experience with pocket friendlyprices and continues to touch horizons with higher and higher standards.

The Programming service business has from April 2014 been carried over by oursubsidiary Mukta VN Films Limited which is jointly held by the Company along withVN Films Private Limited a subsidiary of UFO Moviez.

During the year the Board of Directors reviewed the affairs of its subsidiaryCompanies. Further pursuant to provisions of Section 129(3) of the Act a statementcontaining salient features of the financial statements of the Company's subsidiaries inForm AOC-1 is attached as Annexure - A to this Report.

3. CORPORATE GOVERNANCE

Corporate Governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders' expectations. The Company has been following theprinciples of good Corporate Governance over the years and lays strong emphasis ontransparency accountability and integrity. As per Regulation 27 (2) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section onCorporate Governance forms part of this Annual Report.

Number of meetings of the board

The details of the number of meetings of the Board held during the financial year2016-17 forms part of the Corporate Governance Report. The Company had 5 meetings of theBoard during the year. The intervening gap between any two meetings was within the periodprescribed by Regulation-17(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and the Companies Act 2013.

Committees of the Board

Currently the Board has five Committees namely Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Share TransferCommittee and Risk Management Committee.

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

S. No. Name of the Committee Composition of the Committee
1. Audit Committee 1. Mr. Parvez A.Farooqui
2. Mr. Kewal Handa
3. Mr. Mamohan Shetty
2. Nomination and Remuneration Committee 1. Mrs. Paulomi Dhawan
2. Mr. Kewal Handa
3. Mr. Mamohan Shetty
3. Stakeholders Relationship Committee 1. Mr. Parvez A.Farooqui
2. Mr. Kewal Handa
3. Mrs. Paulomi Dhawan
4. Share Transfer Committee 1. Mr. Parvez A.Farooqui
2. Mr. Kewal Handa
3. Mr. Mamohan Shetty
5. *Risk Management Committee 1. Mr. Parvez A.Farooqui
2. Mr. Kewal Handa
3. Mrs. Paulomi Dhawan

* The requirement of Risk Management Committee under Regulation 21 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is not applicable to your company so the Audit Committee and the Boardin their Meetings held on 24th May 2017 decided to dissolve the RiskManagement Committee.

Board Diversity

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

Remuneration and Nomination Policy

The Board of Directors of the Company has Non-Executive Independent Directors who havein depth knowledge of the business and industry as the members of Nomination andRemuneration Committee. The composition of the Board is in conformity with the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act2013.

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Policy Personnel and Senior Management of theCompany. This Policy also lays down criteria for selection and appointment of BoardMembers. The policy is attached as Annexure – B to the Board's Report.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation17(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Board evaluation

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

The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The performance evaluation of the Chairmanand the Non-Independent Director(s) was carried out by the Independent Directors. TheBoard of Directors expressed their satisfaction with the evaluation process. None of theindependent directors are due for re-appointment.

Directors and Key Managerial Personnel

The Company has following Key Managerial Personnel:

Sr. No. Name of the Person Designation
1 Mr. Subhash Ghai Executive Chairman
2 Mr. Rahul Puri Managing Director
3 Mr. Parvez A. Farooqui Executive Director
4 Mr. Prabuddha Dasgupta Chief Financial Officer
5 Ms. Monika Shah Company Secretary

Directors responsibility statement

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section134(3)(c) of the Companies Act 2013:

i. in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe Loss of the company for the year ended on that date;

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

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

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

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

4. AUDIT AND AUDITORS

Statutory Auditors

M/s Uttam Abuwala & Co. Chartered Accountants were re-appointed as the StatutoryAuditors of the Company to hold office for a period of 4 years till the conclusion of theThirty Eighth Annual General Meeting of the Company to be held in the year 2020. In termsof the first proviso to Section 139 of the Companies Act 2013 the appointment of theauditors shall be subject to ratification at every Annual General Meeting. In this regardAuditors have confirmed their eligibility and submitted the Certificate in writing thattheir appointment if ratified would be within the prescribed limit under the Act andthey are not disqualified for re-appointment.

The Company's explanation to the Auditors' observation in their Report have beendetailed in Note No's 3.40 and 3.41 in the notes forming part of accounts whichforms part of the Annual Report.

Secretarial Audit

Pursuant to provisions of Section 204(1) of the Companies Act 2013 read with rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed Pratik M. Shah Company Secretaries in Practice (C. P. No. 7401) toundertake the Secretarial Audit of the Company. The Draft Secretarial Audit Report isincluded as Annexure - C and forms an integral part of this Report.

Directors Explanation to Qualification in Secretarial Audit Report:

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

b) The financial statements for the year ended 31st March 2016 were not signed by theChief Financial Officer of the Company due to oversight and inadvertently and the Companyshall take due care as to avoid such error in future.

c) Attempts continue to be made to pay statutory dues on time and file the relevantreturns within prescribed time limits.

d) As adhering to the terms of the order passed by Bombay High Court the Company haspaid an amount of Rs. 113538000 /- to (Mahrashtra Film Stage and Cultural DevelopmentCorporation) MFCCDCL by March 31 2017. The State Govt. and MFSCDCL challenged the saidorder of the High Court in the Supreme Court which application was dismissed by theSupreme Court on 22 September 2014. The amount so paid / being paid by the Company havebeen treated as Deposit in the Financial Statements and the same will be adjustedaccordingly upon settlement of the case.

e) The trading window for the board meeting held on 26th May 2016 was not closed andthe same was not intimated to the Stock Exchange due to certain unavoidable circumstancesand the Company shall take due care regarding such compliances.

Certificate on Corporate Governance

Your Company has taken adequate steps to adhere to all the stipulations laid down inSEBI Listing Regulations.

A Report on Corporate Governance is included as a part of this Annual Report.Certificate from a Practicing Company Secretary M/s K. C. Nevatia & Associatesconfirming the compliance with the conditions of Corporate Governance as per SEBI ListingRegulations is included as Annexure - D of this Report.

Significant and material orders passed by the regulators or courts

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

Internal control systems and their adequacy

Your Company has an effective internal control and risk mitigation system which isconstantly assessed and strengthened with new/ revised standard operating procedures. YourCompany has in the year 2016 appointed NMAH & Associates LLP Chartered Accountantsto assist the Company in setting up effective Internal Financial Controls (IFC) and forperiodic review. With their assistance and guidance the Company has put in place anadequate system of internal controls commensurate with its size and nature of business.The key areas general IT controls and the entity level controls alongwith the riskcontrol matrix were considered for review. These systems have helped in assessing theeffectiveness and efficiency of operational controls enhancing governance and protectingagainst IT fraud and increasing reliability of financial reporting and statutorycompliance. The effectiveness of IFC was tested by the consultants who found nosignificant deficiencies. Further the statutory auditors through their independenttesting of IFC have also issued an unqualified opinion.

The Company's internal control system is commensurate with its size scale andcomplexities of its operations. The internal and operational audit is entrusted to M/s.Garg Devendra & Associates a reputed firm of Chartered Accountants The main thrust ofinternal audit is to test and review controls appraisal of risks and business processesbesides benchmarking controls with best practices in the industry.

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

The Audit Committee Statutory Auditors and the Business Heads are periodicallyapprised of the internal audit findings and corrective actions taken by the management arepresented to the Audit Committee. To maintain its objectivity and independence theinternal Audit function reports to the Chairman of the Audit Committee.

Extract of Annual Return

The details forming part of the extract of Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 read with Rule 12 of the Companies (Managementand administration) Rules 2014 is included in this Report as Annexure - E andforms an integral part of this Report.

5. Human Resources

Human Resource is considered as one of the most critical resources in the businesswhich can be continuously smoothened to maximize the effectiveness of the Organization.Human Resources build the Enterprise and the sense of belonging would inculcate the spiritof dedication and loyalty amongst them towards strengthening the Company's Polices andSystems. All personnel continue to have healthy cordial and harmonious approach therebyenhancing the contributory value of the Company.

The Company is committed to nurturing enhancing and retaining top talent throughsuperior Learning and Organizational Development.

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

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

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

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

Name Designation Ratio
Mr. Subhash Ghai Executive Chairman 29.96
Mr. Rahul Puri Managing Director 36.65
Mr. Parvez A. Farooqui Executive Director 36.36

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

Name Designation Ratio
Mr. Subhash Ghai Executive Chairman 17.83%
Mr. Rahul Puri Managing Director 13.82%
Mr. Parvez A. Farooqui Executive Director 14.36%
Mr. Prabuddha Dasgupta Chief Financial Officer 9.99%
Ms. Monika Shah Company Secretary 0.00

c. The percentage increase in the median remuneration of employees in the financialyear:- 50%

d. The number of permanent employees on the rolls of Company: - 367

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

Average percentage increase made in the salaries of Employees other than the managerialpersonnel in the financial year was 33.06% whereas the increase in the managerialremuneration was 41.00%.

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

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

g. Particulars of Employees

Information as per Rule 5(2) & 5(3) of Chapter XIII the Companies (Appointment andRemuneration of Mangerial Personnel) Rules 2014

1 Top Ten Employees in terms of remuneration drawn during the year

Sr. No. Name "Designation / Nature of Duties" Remuneration Qualification "Experience (in years)" "Date of Commencement of Employment" "Age (in years)" Last Employment Held Relative of any Director and Manger of the Company
1 Satwik Lele Chief Operating Officer 4965840 BE-Mech. & PGDBM 15 19-May-2014 43 INOX Leisure Limited No
2 Rahul Puri Managing Director 4397800 BSC - Business Management 18 01-Apr-2004 39 Nimbus Communications Ltd. * Yes
3 Parvez Farooqui Executive Director 4362600 B com 43 24-Oct-1984 61 Citi Colour Cor- poration Firm No
4 Ashish Gharde Group - COO 4000000 MBA(SIBM) 20 06-Feb-2017 45 L&T Balaji Telefilms No
5 Subhash Ghai Chairman 3595000 B com 47 09-Jul-1982 73 Mukta Arts since inception No
6 Siraj Farooqui Studio Chief Executive 3582260 Inter Arts 41 01-Jan-1984 63 Mukta Arts since inception * Yes
7 Vashdev Bajaj COO 3366000 B.Com 40 01-Jan-2008 61 Mukta Arts since inception No
8 Sanjay Ghai COO 3054000 Graduate 34 28-Nov-1983 52 Mukta Arts since inception No
9 Praboddha Das Gupta CFO 3811308 CA 25 07-Jul-2014 50 Neo sports broadcast pvt ltd No
10 Prem Taparia Fin. Manager 2303892 CA 13 25-Jul-2007 38 Simplex Mills Co. Ltd. No

Notes:

2 Details of Employees who were :

(A) Employed throughout the Financial Year under review and in receipt of remunerationfor the Financial Year in the aggregate of not less than Rs. 10200000 per annum: NIL

(B) Employed for the part of the Financial Year under review and in receipt ofremuneration at the rate of not less than Rs. 850000/- per month : NIL

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

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

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

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of the Annual Report.

7. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulation to report genuine concerns or grievances. The VigilMechanism/ Whistle Blower Policy may be accessed on the Company's websitehttp://muktaarts.com/Aboutus/investorrelations.php

8. RISK MANAGEMENT

Your Company is well aware of risks associated with its business. The Company managesrisk through a detailed Risk Management Policy framework which lays down guidelines inidentifying assessing and managing risks that the businesses are exposed to. Risk ismanaged by the Board through appropriate structures that are in place at the Company.

9. HEALTH SAFETY AND ENVIRONMENT:

As a responsible corporate citizen your Company lays considerable emphasis on healthsafety aspects of its human capital operations and overall working conditions. Thus beingconstantly aware of its obligation towards maintaining and improving the environment allpossible steps are being taken to meet the toughest environmental standards on pollutioneffluents etc. across various spheres of its business activities.

10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

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

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

11. GREEN INITIATIVE

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

A copy of this Annual Report is also available on the website of the Company atwww.muktaarts.com.

12. STATUTORY INFORMATION

The Business Responsibility Reporting as required by Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is not applicable to yourCompany for the financial year ended March 31 2017.

13. ACKNOWLEDGEMENTS

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

Your Directors also place on record their appreciation for the contributioncommitment and dedication to your Company's performance by the employees of the Company atall levels.

For and on behalf of the Board of Directors of
Mukta Arts Limited
Subhash Ghai
Place: Mumbai Executive Chairman
Date: 24th May 2017 DIN: 00019803