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PVR Ltd.

BSE: 532689 Sector: Media
NSE: PVR ISIN Code: INE191H01014
BSE 00:00 | 14 Feb 2075.20 2.50
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2080.00

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2095.05

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NSE 00:00 | 14 Feb 2075.80 3.75
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OPEN 2080.00
PREVIOUS CLOSE 2072.70
VOLUME 13886
52-Week high 2095.05
52-Week low 1345.80
P/E 70.04
Mkt Cap.(Rs cr) 10,652
Buy Price 2058.05
Buy Qty 1.00
Sell Price 2075.20
Sell Qty 1.00
OPEN 2080.00
CLOSE 2072.70
VOLUME 13886
52-Week high 2095.05
52-Week low 1345.80
P/E 70.04
Mkt Cap.(Rs cr) 10,652
Buy Price 2058.05
Buy Qty 1.00
Sell Price 2075.20
Sell Qty 1.00

PVR Ltd. (PVR) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 23rd Annual Report on thebusiness and operations of your Company and Audited Financial Statements for the yearended March 31 2018 (‘year under review/FY 2017-18').

1. Financial Highlights

( Rs. in crores)
Standalone Consolidated
Particulars 2017-18 2016-17 2017-18 2016-17
Revenue from Operations 2246 2002 2334 2119
Other Income 30 60 31 63
Total Revenue 2276 2062 2365 2182
Expenses 1861 1712 1933 1810
EBIDTA 415 350 432 372
Finance cost 83 80 84 81
Depreciation and amortisation 142 122 154 138
Net Profit before tax 190 148 194 153
Taxation 69 54 70 57
Net Profit after tax 121 94 124 96
Share of NCI - - 1 (0)
Other Comprehensive Income (10) (1) (10) (1)
Total Comprehensive Income 111 93 115 94
EPS
Basic 25.97 19.89 26.68 20.50
Diluted 25.86 19.89 26.57 20.50
Assets
Non-Current Assets
Property plant and equipments including CWIP 1665 1526 1691 1616
Investment in subsidiaries/Joint venture 32 73 2 -
Financial Assets 231 174 232 179
Deferred tax Assets (includes MAT credit entitlement) 16 43 16 43
Other Non-current assets 105 102 110 108
Total (A) 2049 1918 2051 1946
Current Assets
Inventories 19 17 20 19
Financial Assets 194 169 223 175
Other current assets 30 39 55 86
Total current assets (B) 243 225 298 280
Total Assets (A)+(B) 2292 2143 2349 2226
Equity and liabilities
Equity (A) 1056 953 1075 965
Non-controlling Interest (B) - - 1 41
Non-current liability
Financial liabilities 562 605 561 605
Provisions 9 6 10 7
Deferred tax liabilities (includes MAT credit entitlement) - - 1 1
Total Non-current liability (C) 571 611 572 613
Current liability
Financial liabilities 575 507 593 524
Provisions 3 3 3 3
Other current liability 87 69 105 80
Total Current liability (D) 665 579 701 607
Total Equity and liability (A)+(B)+(C)+ (D) 2292 2143 2349 2226

2. Dividend

Y our Directors have recommended a Final dividend of ` 2/- (Rupees Two) per EquityShare for the financial year ended March 31 2018 for your approval. The Dividend outgowill amount to ` 9.4 crores plus Dividend Distribution Tax of ` 1.9 crore approximately.

3. T ransfer to Reserve:

Y our Company has transferred ` 23.6 crores to the Debenture Redemption Reserve.

4. Financial Review:

During the year under review your Company entertained 7.6 crores patrons in itscinemas up by 1.20% as compared to the previous year. Revenue from operations hasincreased by 10% from ` 2062 crores to ` 2276 crores. Net Box office revenue has grownby 11% and Food and beverage revenue showed a growth of 10% in FY 2017-18. SponsorshipIncome showed a robust growth of 20% as compared to previous year. During the year yourCompany added 49 screens expanding the network to 625 screens spread over 134 propertiesin 51 cities across the country.

Kindly refer to Management Discussion & Analysis and Corporate Governance Reportswhich form part of this report for a detailed operation and business performance.

5. Future Outlook

W e are optimistic regarding the box office prospects

2018-19 on back of strong content pipeline and consumer demand. Our relentless pursuitof innovation delivering the best movie viewing experience & growing circuit of highquality cinemas remain critical factors in our ability to generate positive operatingresults over the long-term.

6. R eport on the Performance & Position of Subsidiaries

As on March 31 2018 the Company had three Subsidiary companies namely PVR PicturesLimited PVR Lanka Limited and Zea Maize Private Limited.

During the year the Company has sold out its subsidiary PVR bluO Entertainment Limitedfor a value of ` 86 crores and received consideration against its 51% shareholdings.

Pursuant to Section 134 of the Companies Act 2013 and Rule 8(1) of the Companies(Accounts) Rules 2014 report on performance and financial position of subsidiaries isattached as per Annexure ‘1' which forms part of this report.

In terms of provisions under Section 136 of the Companies Act 2013 audited accountsof the subsidiary companies are placed on its website at www.pvrcinemas.com

The Company will make available physical copies of these documents upon request by anyshareholder of the Company. These documents shall also be available for inspection at theregistered office of the Company during business hours up to the date of Annual GeneralMeeting.

7. Corporate Governance

The Company is committed to uphold the highest standards of corporate governance andbelieves that the business relationship can be strengthened through corporate fairnesstransparency and accountability. Your Company complies with all the mandatory provisionsof SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

A report on Corporate Governance along with a certificate received from a practicingCompany Secretary is attached and forms part of the Annual Report. A certificate fromChairman cum Managing Director and Chief Financial Officer of the Company confirming thecorrectness of the financial statements compliance with Company's Code of Conduct andadequacy of the internal control measures as enumerated and reporting of matters to theAudit Committee in terms of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is also attached and forms part of this report. in FY

8. Directors

P ursuant to Section 149 read with Section 152 and other applicable provisions if anyof the Companies Act 2013 one-third of the retirable Directors shall retire every yearand if eligible may offer for re-appointment. Consequently Mr. Sanjeev Kumar whoretires by rotation at the ensuing Annual General Meeting and being eligible offer himselffor re-appointment in accordance with the provisions of the Companies Act 2013.

Your Directors recommend his appointment at the ensuing Annual General Meeting.

Pursuant to the provisions under Section 134(3)(d) of the Companies Act 2013 withrespect to statement on declaration given by Independent Directors under Section 149(6) ofthe Act the Board hereby confirms that all the Independent Directors of the Company havegiven a declaration and have confirmed that they meet the criteria of Independence asprovided in the said Section 149(6).

9. Key Managerial Personnel

The K ey Managerial Personnel (KMP) in the Company Section 2(51) and 203 of theCompanies Act 2013 are as follows:

Mr . Ajay Bijli – Chairman cum Managing Director
Mr . Pankaj Dhawan – Company Secretary cum Compliance Officer
Mr . Nitin Sood – Chief Financial Officer

During the year Mr. Pankaj Dhawan working as Senior V.P. Secretarial was appointed andre-designated as Company Secretary cum Compliance Officer of the Company effective from 30thMay 2017.

10. P olicy on Directors appointment and Remuneration Policy

P ursuant to the requirements under Section 134(3)(e)

Section 178(3) of the Companies Act 2013 the policy on appointment of Board Membersincluding criteria for determining qualifications positive attributes independence of adirector and the policy on remuneration of directors KMP and other employees is attachedas Annexure ‘2' which forms part of this report.

11. P articulars of remuneration of Directors/ KMP/Employees

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached as Annexure ‘3' which forms partof this report.

In terms of Section 136 of the Act the report and accounts are being sent to theMembers and others entitled thereto excluding the information on employees particularswhich is available for inspection by the members at the registered office of the Companyduring business hours on working days of the Company up to the date of ensuing AnnualGeneral Meeting. Any member interested in obtaining such particulars may write to theCompany Secretary at the registered office of the Company and the same will be furnishedon request.

12. Employees Stock Option Plan

During the year your Company introduced PVR Employees Stock Option Plan 2017(‘PVR ESOP 2017'). The Nomination and Remuneration Committee in the meetings held on26th July 2017 and on 11th August 2017 have granted 240000options and 60000 options respectively to the employees of the Company at a price of `1400/- per option in accordance with the Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 (‘SEBI SBEB Regulations').

The details of the PVR Employees Stock Options Plan 2017 (PVR ESOP 2017) areavailable on the website of the Company at www.pvrcinemas.com.

13. Meetings of the Board of Directors

During the FY 2017-18 seven Board Meetings were as per convened. The details ofBoard Meetings and Committee Meetings held are given in the Corporate Governance Report.

14. Performance Evaluation of the Board its

Committees and Directors

P ursuant to applicable provisions of the Companies Act 2013 and the Listing Agreementwith Stock Exchanges the Board in consultation with its Nomination & RemunerationCommittee has formulated a framework containing inter alia the criteria forperformance evaluation of the entire Board of the Company its Committees and IndividualDirectors including Independent Directors.

In order to evaluate the performance and various aspects of the functioning of theBoard and its Committees such as adequacy of the Constitution and Composition of the Boardand its Committees are assessed matters addressed in the Board and Committee Meetingsprocesses followed at the meetings and regulatory compliances and Corporate Governanceetc are reviewed. Similarly for evaluation of Directors' performance their profilecontribution in Board and Committee Meetings execution and performance of specificduties obligations regulatory compliances and governance are evaluated.

During the financial year under review the Independent Directors had met separatelywithout the presence of any Non- Independent Directors and the members ofmanagement and discussed inter alia the performance of Non-Independent Directorsand Board as a whole and reviewed the performance of the Chairman of the Company aftertaking into account the views of Executive and Non-Executive Directors.

The performance evaluation of all the Independent Directors have been done by theentire Board excluding the Director being evaluated.

The Directors expressed their satisfaction with the evaluation process.

In compliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the performance evaluation of the Board was carried outduring the year under review details of which are given in Corporate Governance Report.

15. Directors' Responsibility Statement

Pursuant to requirements of Section 134(3)(c) of the Companies

Act 2013 with respect to Directors' Responsibility Statement the Directors confirm:

a. That in the preparation of the annual accounts the applicable accounting standardshave been followed and no material departures have been made from the same;

b. That such accounting policies have been selected by them and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2018 andof the profit and loss of the Company for the year ended on that date; c. That proper andsufficient care has been taken by them for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;

d. That the annual accounts have been prepared by them on a going concern basis;

e. That they have laid down proper internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively and

f. That they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

16. Statutory Auditors and their Report

There are no observations (including any qualification reservation adverse remark ordisclaimer) by the Auditors in their Audit Report that may call for any explanation fromthe Directors. Further the notes to accounts referred to in the Auditor's Report areself-explanatory.

17. Secretarial Auditors and their Report

The Company has appointed M/s Arun Gupta & Associates a firm of CompanySecretaries in Practice to undertake the Secretarial Audit. The Report of the SecretarialAudit Report in MR-3 is annexed as Annexure ‘4'.

There are no qualifications or observations or other adverse remarks of the SecretarialAuditors in the Report issued by them for the FY 2017-18 which call for any explanationfrom the Board of Directors.

18. Consolidated Financial Statements

This Annual Report also includes Consolidated Financial Statements for the FY 2017-18.

During the period under review Consolidated Turnover was ` 2365 crores as compared to` 2182 crores in the previous year. Net Profit after Tax for the year is ` 124 crores ascompared to ` 96 crores in the Previous Year.

The audited consolidated financial statements together with Auditors' Report forms partof the Annual Report.

19. Internal Financial Control System

According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedure adopted by the Company for ensuring theorderly and efficient Conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.

The Company has a well placed proper and adequate Internal Financial Control System inplace which ensures that all assets are safeguarded and protected and that thetransactions are authorised recorded and reported correctly.

The Company's Internal Financial Control System also comprises due compliances withCompany's policies and Standard Operating Procedures (SOPs) audit and compliance byCompany's Internal Auditor M/s Ernst and Young LLP. The Internal Auditors independentlyevaluate the adequacy of internal controls and concurrently audit the majority of thetransactions. Independence of the audit and compliance is ensured by direct reporting byInternal Auditors to the Audit Committee of the Board.

20. Adequacy of Internal Financial Controls with reference to the Financial Statements

The Companies Act 2013 requires an effective Internal Financial Control System in theCompany. The system should be designed and operated effectively. Rule 8(5)(viii) ofCompanies (Accounts) Rules 2014 requires the information regarding adequacy of InternalFinancial Controls with reference to the financial statements to be disclosed in theBoard's report.

To ensure effective Internal Financial Controls the Company has laid down the followingmeasures:

• All operations are executed as per prescribed procedures and is updated andvalidated periodically.

• All legal and statutory compliances are ensured on a monthly basis.Non-compliance if any is seriously taken by the management and corrective actions aretaken immediately.

• The Company follows a robust 2-Tier internal audit process:

• Tier I: Cinema audits are conducted on a regular basis throughout the year.

• Tier II: Transaction audits are conducted regularly to ensure accuracy offinancial reporting safeguard and protection of all the assets.

• The audit reports for the above audits are compiled and submitted to AuditCommittee for deliberations review and necessary action.

• The Company uses Microsoft Navision Software for maintaining books of accountsand transactions are executed through prescribed procedures to ensurecorrectness/effectiveness of all transactions integrity and reliability of reporting.

• The Company has a comprehensive risk management framework.

• The Company has a robust mechanism of building budgets at an integratedcross-functional level. The budgets are reviewed on a periodically basis so as to analysethe performance and take corrective action wherever required.

• The Company has in place a well-defined Whistle Blower

• Policy/Vigil Mechanism.

• The Company has a system of Internal Business

• All departmental heads discuss their business issues and future plans in monthlyReview Meetings. They review their achievements in the Review Meetings.

• Compliance of secretarial functions is ensured by way of secretarial audit doneby M/s Arun Gupta & Associates and Internal Audit done by the Internal Auditors –M/s Ernst & Young LLP.

21. Development and Implementation of Risk Management

P ursuant to Section 134(3)(n) of the Companies Act at present the Company has notidentified any element of risk which may threaten the existence of the Company.

22. Conservation of Energy Technology Absorption Foreign Exchange Earning and Outgo

P ursuant to provisions of Section 134 of the

Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 the details ofConservation of Energy Technology Absorption Foreign Exchange Earning and Outgo areattached as Annexure ‘5' which forms part of this report.

23. Details of Policy developed and implemented on Corporate Social Responsibilities(CSR) initiatives

The Company has in place a CSR Policy in line with Schedule VII of the Companies Act2013. As per the policy the CSR activities are carried by PVR Nest which focuses interalia on:

a) Education and social development of the most vulnerable Sections of our society

b) Hunger Poverty Malnutrition and Health.

c) Sanitation and Safety

d) Gender Equality

e) Environmental Sustainability

The annual report on CSR activities is furnished in Annexure ‘6A & 6B'which forms part of this report.

24. Business Responsibility Report

As required under Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Business Responsibility Report is available atwebsite of the Company and is also part of this Annual Report.

25. Change in Capital Structure and Shares

During the year under review there is no change in the Capital Structure of theCompany.

26. Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act 2013 and 12(1) of the Companies(Management and Administration) Rules 2014 the extract of Annual Return as on March 31.2018 in the prescribed Form No. MGT-9 is attached as Annexure ‘7' and formspart of this report.

27. Particulars of Loans Guarantee or Investment under Section 186 of the Companies

Pursuant to Section 134(3)(g) of the Companies Act 2013 (Act) a statement containingof loans guarantee or investment under Section 186 of the Act as at end of the FY 2017-18is attached as Annexure ‘8' which forms part of this report.

28. Contracts or arrangements with Related Parties under Section 188(1) of theCompanies Act 2013

With reference to Section 134(3)(h) of the Companies Act 2013 (Act) all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were either in the ordinary course of business or on an arm'slength basis.

During the year the Company has not entered into any contract or arrangement withrelated parties which could be considered ‘material' according to the policy of theCompany on Materiality of Related Party Transactions.

Your attention is drawn to the Related Party Disclosures set out in the Standalone andConsolidated Financial Statements.

29. Disclosure on Audit Committee

The Audit Committee as on 31st March 2018 comprises of the followingindependent directors.

Mr. Sanjai Vohra (Chairman) Mr. Amit Burman Mr. Vikram Bakshi and Mr. Sanjay Khannaas members.

Further all recommendations of Audit Committee were accepted by the Board ofDirectors.

30. Disclosure on Vigil Mechanism

The Company has a vigil mechanism through Whistle Blower Policy to deal with instanceof fraud and mismanagement if any. In staying true to our values of strength performanceand passion and in line with our vision of being one of the most respected companies inIndia. The Company is committed to the high standards of Corporate Governance andstakeholder responsibility. The Company has Whistle Blower Investigation Committee whichprovides for adequate safeguards against victimisation of persons and also provide fordirect access to the Chairman of the Audit Committee and also to the members of theCommittee.

The policy ensures that strict confidentiality is maintained whilst Listing dealingwith concerns and also that no discrimination will be of meted out to any personfor a genuinely raised concern.

The Company has always provided a congenial atmosphere for work to all employees freefrom discrimination and harassment including sexual harassment. It has provided equal Ruleopportunities of employment to all without regard to their caste religion colourmarital status and sex.

31. Disclosure on Deposit under Chapter V

The Company has neither accepted nor renewed any during the FY 2017-18 in terms ofChapter V of the Companies Act 2013.

32. Code of Conduct

The Company has in place a Code of Conduct which is applicable to the Members of theBoard and all employees in the course of day to day business operations of the Company.The Company believes in ‘Zero Tolerance' against bribery corruption and unethicaldealings/behaviours of any form and the Board has laid down the directives to counter suchacts. The code laid down by the Board is known as ‘code of business conduct' whichforms an Appendix to the Code. The Code has been posted on the Company's website. The Codelays down the standard procedure of business conduct which is expected to be followed bythe Directors and the designated employees in their business dealings and in particular onmatters relating to integrity in the work place in business practices and in dealing withstakeholders. All the Board Members and the Senior Management personnel have confirmedcompliance with the Code.

33. Transfer to Investor Education and Protection Fund

The Company has transferred a sum of ` 48367/- to the Investor Education andProtection Fund established by the Central Government in compliance with the CompaniesAct 2013. The said amount represents unclaimed dividends which were lying with theCompany for a period of seven years from their respective due dates of payment.

The Company has transferred 974 shares to Investor Education and Protection FundAuthority established by the Central Government in compliance with the Companies Act2013. Any shareholder whose shares or unclaimed dividend has been transferred to the Fundmay claim the shares under provision to sub-section of Section 124(6) or apply for refundunder Section 125(3)(a) or under proviso to Section 125(3) as the case may be to theAuthority by making an application in Form IEPF- 5 online available on websitewww.iepf.gov.in along with fees.

34. Dividend Distribution Policy

Pursuant to Regulation 43A of the SEBI (Listing Obligations and deposits DisclosureRequirements) Regulations 2015 the Company has in place a formal policy on dividenddistribution. The policy on dividend distribution is attached as Annexure ‘9'which forms part of this report.

35. Prevention of Sexual Harassment Policy

The Company is committed to provide a protective environment at work place for all itswomen employees to ensure that every woman employee is treated with dignity and respectand as mandated under ‘The Sexual Harassment of Women at workplace (PreventionProhibition and Redressal ) Act 2013'. The Company has in place a formal policy forprevention of sexual harassment of its women employees. The total number of complaintsfiled during the FY 2017-18 were 21 and these were attended and closed during theFinancial year itself. Thus there were Nil complaints pending at the end of FY 2017-18.

36. Compliances with Secretarial Standards

The Company has ensured the compliances of applicable provisions of SecretarialStandards issued by the ‘Institute of Company Secretaries of India'.

37. Acknowledgements

Y our Directors thank the various Central and State Government

Departments Organisations and Agencies for the continued help and co-operationextended by them. The Directors also gratefully acknowledge all stakeholders of theCompany viz. customers members dealers vendors banks and other business partners forthe excellent support received from them during the year. The Directors place on recordtheir sincere appreciation to all employees of the Company for their unstinted commitmentand continued contribution to the Company.

For and On behalf of the Board
For PVR Limited
Place: Gurugram Ajay Bijli
Date: July 25 2018 Chairman cum Managing Director