KOFFEE BREAK PICTURES LIMITED
The Directors are pleased to present the 23rd Annual Report together withthe Audited Financial Statements for the financial year ended March 31 2015. TheManagement Discussion and Analysis is also included in this Report.
1. FINANCIAL PERFORMANCE
The brief financial results of the Company are as detailed below:
| || ||[In Rs.] |
|Particulars ||Year ended 31st March 2015 ||Year ended 31st March |
| || ||2014 |
|Total Revenue ||4350793 ||1765969 |
|Profit/(Loss) before taxation ||(141582864) ||(4978657) |
|Profit/(Loss) after tax ||141582864 ||4978657 |
2. OPERATION AND STATE OF THE AFFAIRS OF THE COMPANY
During the financial year ended on March 31 2015 your Company reported top-line growthof 146.37% over the previous year. The Gross revenue from operations stood at Rs. 43.51lacs as compared with Rs. 17.66 lacs in the previous year. However due to written off thedebts not be unrealized and inventory having no value amounting to Rs. 1420.79 lacs duringthe year the Company incurred a loss of Rs. 1415.82 lacs as compared to a loss of Rs.49.78 lacs in the previous year.
3. CORPORATE OVERVIEW
During the year the company is in the business of Media and Entertainment. There is nochange in nature of the business of the Company. The Company has its registered office atMumbai.
4. OVERVIEW OF THE ECONOMY AND ANALYSIS
As per the latest GDP growth estimates Indian economy grew by 7.4% in FY15 compared to6.9% in FY14 mostly driven by improved economic fundamentals and revision of GDPmethodology calculation. Even inflation showed signs of moderation a welcome sign -wholesale price and consumer price inflation declined. Reduced inflation falling crudeoil prices stable Rupee improved purchasing power and consumer spending higher capitalinflows supported by the government policy reforms have already put India on anaccelerating growth track an improved the business outlook.
Reforms like e-auctions of coalmines and telecom FDI hike in insurance speedierregulatory approvals etc. will be critical growth enablers to de-bottleneck stalledprojects improve the investment outlook and the ease of doing business in the country.Reforms currently underway such as GST implementation Amendment on Land Acquisition BillLabour Reforms etc. are expected to provide the requisite thrust for growth in themedium-term.
The M & E industry is expected to register a good growth in view of thedigitization and enhanced number of channels and private stakeholder momentum incrossover movies and crossover audience increase in global presence of Indian channelsand creation of domestic demand for animation and special effects. Besides adaptation tohigh-end digital technology the entertainment industry is also witnessing rapiddevelopment of state-of-the-art studios and post production facilities. The digitaltechnologies and their innovative applications have changed the entertainment sectorconsiderably especially the content production and its quality. Internet has also emergedas the latest revenue stream and has become one of the fastest growing advertising mediumand has made a significant impression on the entertainment industry
Opportunities and Challenges
Apart from making animation films we are targeting products at the children segment.This age-group is easier to please as they do not have any pre-notions about the productsthey view. Hence they form an excellent audience. Also all products aimed at this segmenthave a higher repeat value ensuring better sales in fields of home video and merchandise.If kids like one thing they would repeatedly want to do the same thing time and overagain. We are using the best of hardware and software apart from specialized man-power weaim at delivering traditional 2D animation 90 minute films in a span of 9 to 12 monthswhich usually take 25 - 30 months. After the setup of our own animation studio which isone of the best in country in terms of human resources hardware & software we can nowundertake projects for other firms & individuals. With the launch of more televisionchannels there is an acute shortage of material to telecast increasing our opportunitiesto exploit better prices for our content.
However the media and entertainment are constrained with many challenges includingrising costs (wages inventory and interest costs) intensified competition from other lowcost countries and political risk to implement the reforms like GST etc. Such issues needto be addressed to result in unlocking maximum growth potential.
5. DIVIDEND AND RESERVES
In view of the in losses incurred during the year Your Directors express theirinability to recommend any dividend. During the year under review no amount wastransferred to General Reserve.
6. SHARE CAPITAL
The paid up equity share capital as at March 31 2015 stood at Rs. 130011000 (RupeesThirteen crore eleven thousand). There is no change in the Share Capital of the companyduring the financial year.
The Company has not issued any equity shares with differential rights and hence noinformation as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture)Rules 2014 is furnished.
The Company has not issued any sweat equity shares and hence no information as perprovisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
The Company does not have any Employee Stock Option Scheme or Employee Stock PurchaseScheme. Hence no information as per the provisions of Rule 12(9) of the Companies (ShareCapital and Debenture) Rules 2014 has been furnished.
There are no shares held by trustees for the benefit of employees and hence nodisclosure has been made under Rule 16(4) of the Companies (Share Capital and Debentures)Rules 2014.
7. SUBSIDAIRY AND ASSOCIATES COMPANIES
As on March 31 2015 the Company has no Subsidiary Joint Ventures or AssociatesCompany.
8. CONSOLIDATED FINANCIAL STATEMENT
The Company is not required to consolidate its financial statements in terms of theprovision of Section 129(3) of the Companies Act 2013 and Rules made there-under duringthe financial year.
9. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges a separate sectionon corporate governance practices followed by the Company together with a certificatefrom the Company's Auditor confirming compliance forms an integral part of this Report.
10. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure - Aand forms an integral part of this Report.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mrs. Babita Kedia Director retires by rotation at theforthcoming Annual General Meeting and being eligible offers herself for reappointment.
Mr. Latif Khan and Mr. Vinod Jain were appointed Non Executive Independent Director fora period of five years at the 22nd Annual General Meeting held on September 302014.
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 Clause 49 ofthe Listing Agreement.
12. BOARD EVALUATION INDUCTION AND TRAINING OF BOARD MEMBERS
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an annual performance evaluation of its ownperformance the Directors individually as well as evaluation of the working of the Boardand its Committees culture execution and performance of specific duties obligations andgovernance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and the Non-independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.
The process followed by the Company for induction and training to Board members hasbeen explained in the Corporate Governance Report.
13. 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.
14. WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. TheWhistle Blower policy has been posted on the website of the Company. (www.koffeebreak.in).
15. REMUNERATION AND NOMINATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. . Theremuneration and nomination policy has been posted on the website of the Company(www.koffeebreak.in).
16. RELATED PARTY TRANSACTIONS AND POLICY
The Company has developed a related party transactions framework through standardoperating procedures for the purpose of identification and monitoring of transactions withthe related parties.
The policy on related party transactions as approved by the Board of Directors has beenuploaded on the website of the Company (www.koffeebreak.in). None of the Directors has anypecuniary relationship or transactions vis-d-vis the Company.
The details of transactions entered into with the related parties are givenhere-in-below in form AOC-2 in terms of the provision of section 188(1) including certainarms length transactions: A. Details of contract or arrangement or transactions notat arms length basis ; Nil
|b. Nature of contract /arrangements/transaction ||NA |
|c. Duration of contract /arrangements/transaction ||NA |
|d. Salient terms of contract /arrangements/transaction including the value if any ||NA |
|e. Justification for entering into such contract / arrangements/ transaction ||NA |
|f. Date(s) of approval by the Board ||NA |
|g. Amount paid as advances if any ||NA |
|h. Date on which special resolution was passed in general meeting as required under first proviso to section 188 ||NA |
B. Details of contract or arrangement or transactions at arms length basis :
|a. Name(s) of the related party and nature of relationship ||NA |
|b. Nature of contract /arrangements/transaction ||NA |
|c. Duration of contract /arrangements/transaction ||NA |
|d. Salient terms of contract/arrangements/transaction including the value if any ||NA |
|e. Date(s) of approval by the Board ||NA |
|f. Amount paid as advances if any ||NA |
17. 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.
18. 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. that in the preparation of the Annual Accounts for the year ended March 31 2015the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
ii. and applied them consistently and made judgments and estimates that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company asat March 31 2015 and of the profit of the Company for the year ended on that date;
iii. that 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 the
Company and that such internal financial controls are adequate and were operatingeffectively; and
vi. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
19. STATUTORY AUDIT
M/s Agarwal Desai & Shah Chartered Accountants (Firm Registration No: 124850W)who are Statutory Auditors of the Company hold office up to the forthcoming Annual GeneralMeeting and are recommended for re- appointment to audit the accounts of the Company forthe financial year 2015-16. As required under the provisions of Section 139 of theCompanies Act 2013 the Company has obtained written confirmation from M/s. Agarwal Desai& Shah that their appointment if made would be in conformity with the limitsspecified in the said Section.
20. COST AUDIT
Provision of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 are not applicable to the Company during the year underreview.
21. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed Ms. Binu Singh Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is includedas Annexure-B and forms an integral part of this Report.
The Management comments on the qualifications in the Secretarial Audit Report as under:
These are the technical lapses and inadvertently. The Company has appointed theInternal Auditor and in process of the appointing Company Secretary and would be compliedthe requirement as soon as it find the suitable candidate. The Board of Director willensure that henceforth such lapses would not occur.
22. INTERNAL FINANCIAL CONROL AND THEIR ADEQUACY
Your Company has policies procedures and effective internal controls for ensuringorderly and efficient conduct of the business safeguard of its assets prevention anddetection of fraud and errors accuracy and completeness of the accounting record timelypreparation of financial statements and proper disclosure.
During the year such controls were tested and no reportable material weakness in thedesign or operation was observed.
The internal and operational audit is conducted on regular basis 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.
23. RISK MANAGEMENT
During the year under review the Company has identified and evaluates elements ofbusiness risk. Consequently a Business Risk Management framework is in place. The riskmanagement framework defines the risk management approach of the Company and includesperiodic review of such risks and also documentation mitigating controls and reportingmechanism of such risks. The framework has different risk models which help in identifyingrisks trend exposure and potential impact analysis at a Company level as also separatelyfor business.
Some of the risks that the Company is exposed to are:
The Company's policy is to actively manage its foreign exchange risk within theframework laid down. Given the interest rate fluctuations the Company has adopted aprudent and conservative risk mitigation strategy to minimize interest costs.
The Company is exposed to risks attached to various statutes and regulations. TheCompany is mitigating these risks through regular review of legal compliances carried outthrough internal as well as external compliance audits.
24. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Provision of Schedule VII of the Companies Act 2013 read with Companies CorporateSocial Responsibility Policy) Rules 2014 are not applicable to the Company during theyear under review.
25. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
As required by the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 the Company has formulated and implemented a policy onprevention of sexual harassment at workplace with a mechanism of lodging complaints. Itsredressal is placed on the intranet for the benefit of its employees.
During the year under review no complaints were reported to the Board.
26. STATUTORY INFORMATION
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 are not applicable to the Company duringthe period under review.
The information required under Section 197of the Companies Act 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are not applicable to the Company during the financial year.
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.
The Business Responsibility Reporting as required by Clause 55 of the Listing Agreementwith the Stock Exchanges is not applicable to your Company for the financial year endingMarch 31 2015.
27. CAUTIONARY STATEMENT
Statements in this Directors' Report & Management Discussion and Analysisdescribing the Company's objectives projections estimates expectations or predictionsmay be "forward-looking statements" within the meaning of applicable securitieslaws and regulations. Actual results could differ materially from those expressed orimplied.
Your Directors wish to thank all the stakeholders who have contributed to the successof your Company. Your Directors wish to place on record their appreciation for thecontribution made by the employees at all levels. Your Directors also wish to thank itscustomers dealers agents suppliers investors and bankers for their continued supportand faith reposed in the Company.
| || |
| ||For and on behalf of the Board of Directors of |
| ||KOFFEE BREAK PICTURES LIMITED |
| ||Pikesh Sitaram Sharma ||Babita Sharma |
|Place: Mumbai ||Managing Director ||Executive Director |
|Dated: August 31 2015 ||DIN: 05143923 ||DIN: 06942432 |