Annual Report 2013 - 14
National Film Development Corporation Limited (A Government of India Enterprise)
National Film Development Corporation Limited (A Government of India Enterprise) 39th Annual Report 2013 – 14
Silver Gateway Award Mumbai Film Festival 2013
Best Asian Film NETPAC Award 2013
Dioraphte Audience Award
Best Actress Abu Dhabi 2013
Rotterdam 2014
Best Director Best Actor Best Actress Best Cinematography International Film Festival Queensland, 2014
QISSA
HEIMATFILM & NFDC presents
THE TALE OF A LONELY GHOST
A FILM BY ANUP SINGH
I R R FA N
KHAN
TISCA
CHOPR A
T ILLO TA M A
SHOME
R A SIK A
DUGA L
THE MATCH FACTORY PRESENTS A HEIMATFILM AND NATIONAL FILM DEVELOPMENT CORPORATION (INDIA) PRODUCTION IN COPRODUCTION WITH AUGUSTUS FILM CINÉ-SUD PROMOTION AND ZDF/DAS KLEINE FERNSEHSPIEL IN COLLABORATION WITH ARTE IRRFAN KHAN TILLOTAMA SHOME TISCA CHOPRA RASIKA DUGAL DANISH AKTHARI SUPPORTED BY NATIONAL FILM DEVELOPMENT CORPORATION (INDIA) FILM- UND MEDIENSTIFTUNG NRW EURIMAGES THE NETHERLANDS FILM FUND FILMFÖRDERUNGSANSTALT FONDS SUD CINÉMA MINISTÈRE DE LA CULTURE ET DE LA COMMUNICATION - CNC MINISTÈRE DES AFFAIRES ÉTRANGÈRES ET EUROPÉENNES INSTITUT FRANÇAIS DEUTSCHER FILMFÖRDERFONDS MEDIENBOARD BERLIN-BRANDENBURG MEDIA I2I AUDIOVISUAL CENTRE NATIONAL DU CINÉMA ET DE L´IMAGE ANIMÉE PRODUCED WITH SUPPORT OF THE HUBERT BALS FUND OF THE INTERNATIONAL FILM FESTIVAL ROTTERDAM WRITTEN BY ANUP SINGH MADHUJA MUKHERJEE DIRECTOR OF PHOTOGRAPHY SEBASTIAN EDSCHMID MAKE-UP & HAIR DESIGN BÄRBEL SCHEID COSTUME DESIGN DIVYA & NIDHI GAMBHIR PRODUCTION DESIGN TIM PANNEN SOUND DESIGN PETER FLAMMAN SOUND RECORDIST SIMONE GALAVAZI COMPOSER BÉATRICE THIRIET EDITOR BERND EUSCHER LINE PRODUCER RAKESH MEHRA ASSOCIATE PRODUCER SAHAB NARAIN ASSOCIATE PRODUCERS ZDF CLAUDIA TRONNIER / ARTE DORIS HEPP EXECUTIVE PRODUCER VIKRAMJIT ROY CO-PRODUCERS NINA LATH GUPTA BERO BEYER THIERRY LENOUVEL PRODUCED BY JOHANNES REXIN BETTINA BROKEMPER DIRECTED BY ANUP SINGH WITH
Contents Board of Directors...........................................................................................................................................................5 About us.........................................................................................................................................................................7 Production......................................................................................................................................................................9 Distribution....................................................................................................................................................................11 Promotion.....................................................................................................................................................................13 Training & Development...............................................................................................................................................15 Notice...........................................................................................................................................................................16 Chairman’s Letter To Shareholders..............................................................................................................................17 Directors’ Report...........................................................................................................................................................19 Management Analysis Report......................................................................................................................................28 Report on Corporate Governance................................................................................................................................34 Auditors’ Certificate on Corporate Governance............................................................................................................39 Balance Sheet as at 31st March, 2014.........................................................................................................................40 Statement of Profit and Loss for the year ended 31st March, 2014.............................................................................41 Cash Flow Statement for the year ended 31st March, 2014........................................................................................42 Notes on Accounts.......................................................................................................................................................44 Auditor’s Report............................................................................................................................................................64 Annexure to the Auditors’ Report.................................................................................................................................66 Comments of the Comptroller and Auditor General of India under Section 619 (4) of the Companies Act, 1956 on the Accounts of National Film Development Corporation Limited for the year ended 31st March 2014. ...............68 Reply of Management to the Comments of the Comptroller and Auditor General of India on the accounts of the Company..................................................................................................................................69
Annual Report 2013–14
3
Registered Office Mumbai Discovery of India Building (6th Floor), Nehru Center, Dr. Annie Beseant Road, Worli, Mumbai – 400 018. CIN U92100MH1975GOI022994 Regional Offices Chennai 1st Floor, Co-optex Warehouse Building, 350, Pantheon Road, Egmore Chennai – 600 008. Kolkata R.I.C. Industrial ,Estate Compound, Upen Banerjee Road, Parnasree, Behala, Kolkata – 700 060. New Delhi 4th Floor, Soochana Bhavan, Phase I, C.G.O. Complex, Lodhi Road, New Delhi – 110 003. Camp office Thiruvananthapuram Chitranjali Studio Complex Thiruvananthapuram – 695 027 Bankers H.D.F.C Bank State Bank of India State Bank of Travancore Indian Bank Punjab National Bank IDBI Bank Yes Bank Bank of India Auditor M/s C. B. Chhajed & Co. Chartered Accountants DGP House, Ground Floor, 88-C, Old Prabhadevi Road, Mumbai – 400 025.
Board of Directors (As on 31/03/2014) Chairman
Ramesh Sippy
Full-time Directors
Nina Lath Gupta Managing Director
Sahab Narain Director (Finance)
Part-time Directors (Official)
Bharathi S. Sihag Government Nominee Director
Raghvendra Singh Government Nominee Director
Independent Directors
Jawahar Lal Wattal
A.K.Bir
Annual Report 2013–14
5
Vision To create domestic and global appreciation and celebration of the Cinemas of India.
Mission NFDC aims at fostering excellence in cinema and promoting the diversity of its culture by supporting and encouraging films made in various Indian languages.
6
Annual Report 2013–14
About us Incorporated in the year 1975, National Film Development Corporation Limited (NFDC) was formed by the Government of India with the primary objective of planning, promoting and organizing an integrated and efficient development of the Indian film industry. While its recent successes include films like The Lunchbox by Ritesh Batra, The Good Road by Gyan Correa, NFDC boasts of a catalogue of noteworthy films with acclaimed filmmakers like Agantuk by Satyajit Ray, Gandhi by Richard Attenborough, The Making of the Mahatma by Shyam Benegal, Salaam Bombay by Mira Nair, Dance of the Wind by Rajan Khosa, Rudaali by Kalpana Lajmi, Party by Govind Nihalani, Jaane Bhi Do Yaaro by Kundan Shah amongst many others. With more than 300 films in 21 regional languages, NFDC’s architecture aims towards creating domestic and global appreciation of the Cinemas of India. In addition to planning, promoting and funding independent films in India and international markets, NFDC develops new talent and facilitates the growth of Indian cinema in all languages through productions and co – productions, script development and need – based workshops. Having commissioned 30 productions / co-productions in 17 Indian languages and introduced 19 new filmmakers, NFDC has restored 87 titles and digitised 31 titles under its brand Cinemas of India and recently launched a Video-on-Demand platform currently hosting more than 75 titles available for Free, PayPer-View, and Subscription Video-On-Demand. NFDC also organizes Film Bazaar, South Asia’s Global Film Market, in Goa which is the biggest co – production and distribution market for the entire South Asian region.
Annual Report 2013–14
7
8
Annual Report 2013–14
Production NFDC’s Film Production Department supports and drives NFDC’s mission through the Cinemas of India. It continuously seeks to create an environment conducive to the making of cinema that reflects India’s most imaginative, diverse and vibrant film culture. The Department endeavours to support, through production and collaboration, a community of versatile and emerging filmmakers who embody diversity, innovation and uniqueness. Apart from production of films, NFDC also produces advertisements, documentaries, short films, TV series, web advertisements, radio series and thematic musical anthems.
Annual Report 2013–14
9
10
Annual Report 2013–14
Distribution At NFDC, the focus is to establish a sustainable mechanism for distribution of films in India, both its own productions and also films of independent filmmakers with limited access to domestic markets. With effect from FY 2011 – 12, the newly restructured Distribution Division has launched the brand Cinemas of India to facilitate distribution of its own films, to begin with, and subsequently films of independent film makers in the second phase. The Multifaceted Distribution Platform – with products under the brand ‘Cinemas of India’ currently comprises • Home Video • Theatre Releases • Satellite Syndication • YouTube Internet Channel There are several other innovative platforms in the offing such as – • Internet VOD Platform – ‘www.cinemasofindia.com’ a pay – per – view and subscription model, available worldwide. • Mobile Platforms – Cinemas of India channel across various mobile service providers. In addition, NFDC releases media campaigns across Television, Radio, Digital Theatres, Web, Mobiles, and Public LCDs for more than 30 government clients, including Incredible India, National Rural Health Mission, NREGA, Ministry of Agriculture and Department of Customs etc.
Annual Report 2013–14
11
12
Annual Report 2013–14
Promotion Organized by the National Film Development Corporation (NFDC), Film Bazaar is a platform exclusively created to encourage collaboration between the international and South Asian film fraternity. The Bazaar is focused on discovering, supporting and showcasing South Asian content and talent, in the realm of filmmaking, production and distribution. A converging point for film buyers and sellers from all over the world, the Bazaar also aims at facilitating the sales of world cinema in the South Asian region. First held in 2007, Film Bazaar has evolved into South Asia’s global film market, witnessing an increased South Asian and International participation with every edition. The 2013 market saw an attendance of 831 delegates from 36 countries including dedicated country delegations from Australia, Canada and Poland.
Annual Report 2013–14
13
NFDC LABS LABS
MASTER CLASSES
14
SCREENWRITING | DIRECTING | CREATIVE PRODUCING EDITING | CINEMATOGRAPHY | SOUND
Annual Report 2013–14
Training & Development Given the gap in the area of mid – career training opportunities in the film sector, as also the need for greater focus on research and development in content creation, the Training & Development Division was set up in 2012. It has been established under the brand NFDC Labs to deliver two outputs for the NFDC & Indian Film community – • Training for Professional filmmakers, providing workshops and master – classes in core disciplines; Directing, Writing, Editing, Cinematography and Producing. • Establish a development arm within the NFDC itself to support script and project development to ensure a steady flow of quality projects towards the NFDC production department and towards the Industry at large. Training activities include long running staged development programmes for scripts in different states across the subcontinent, including international industry immersion programmes in overseas film markets & festivals. NFDC also conducts various training programmes in Avid & FCP Digital Non – Linear Editing, Audio Dubbing, Digital Cinematography, Multimedia Subtitling, etc., for students under State Government sponsored schemes.
Annual Report 2013–14
15
Notice Notice is hereby given that the 39th Annual General Meeting of National Film Development Corporation Limited will be held on Monday, the 29th September 2014 at 12.00 noon in the Board Room of NFDC, at 7th Floor, Discovery of India Building, Nehru Centre, Dr. Annie Besant Road, Worli, Mumbai – 400 018 to transact the business mentioned herein below:
Ordinary Business: 1.
To read, consider and adopt the Director’s Report and Audited Annual Accounts of the company for the year ended 31st March 2014 and Auditors’ Report and the comments of Comptroller and Auditor General of India thereon and to pass with or without modification the following Resolution as an Ordinary Resolution.
“RESOLVED that the Audited Balance sheet as on 31st March, 2014 and the Profit and Loss Account for the year ended 31st March, 2014 together with the Director’s Report and the Auditors Report and the comments of the Comptroller and Auditor General of India are hereby read, considered and adopted.”
Special Business: 2.
To pass with or without modification the following Resolution as a Special Resolution.
“RESOLVED that approval is hereby given for borrowing upto Rs. 100 Crores, where the money to be borrowed, together with the money already borrowed by the Company will exceed aggregate of its paid-up Share Capital and free reserves, apart from temporary loans obtained from the company’s bankers in the ordinary course of business.” By Order of the Board of Directors For National Film Development Corporation Limited
Date: 15th September 2014 Place: Mumbai
(E.J. PAUL) Company Secretary
Explanatory Statement Persuant To Section 102 of The Companies Act 2013 In Relation To The Above Item 2. As per Section 180 of the Companies Act, 2013, the Board of directors of a Company shall borrow money only with the consent of the Company by special resolution, when the money to be borrowed, together with money already borrowed by the Company will exceed aggregate of its paid-up Share Capital and free reserves, apart from temporary loans obtained from the company’s banker’s in the ordinary course of business. Currently the Company has borrowed around Rs. 2.63 Crores from Punjab National Bank, Chennai for renovation of theatre. There are plans to construct sound studio in Kolkata for which also money may have to be borrowed. Funds are also required for further expansion plans of the Company. Further the Company has asked for a loan of Rs. 16.85 Crores from the Central Government for meeting its day to day business expenses including payment of salary to staff. Thus the total borrowings of the Company may exceed its paid up Share Capital and free reserves. It is in this connection the above resolution has been put up for the approval of the shareholders. None of the directors, key managerial personnel, neither their relatives are interested in the above resolution.
16
Annual Report 2013–14
Chairman’s Letter to Shareholders
On behalf of the Board of Directors of the National Film Development Corporation Ltd. (NFDC), I am happy to present a report on NFDC for the year 2013-14. Having earned profits for three years in a row with a positive net worth as on 31 March 2013, NFDC was declared a Turnaround PSU by the Department of Public Enterprises in September 2013. Further more, NFDC’s achievements significantly exceeded the projections committed to in the revival plan for NFDC that was approved by the Government of India in September 2010. The performance of NFDC in terms of the Memorandum of Understanding signed with the Ministry of Information & Broadcasting (the administrative Ministry), Government of India for the FY 2012-13 has been rated as “Excellent”. The robust performance of the company faced a setback when the Ministry of Information and Broadcasting, the administrative ministry, vide letter no. 1/9/2009-MUC dated 13th June 2013 changed the EMA Policy and de-notified NFDC carrying out audio-visual publicity work of Govt. / PSUs. This change in the policy has acutely affected the performance of the company. This segment of business had been contributing as much as 80% to 85% of the gross turnover of NFDC and was instrumental in revival of the company. As a result, turnover of the company slid down to Rs.12693 lakhs in the FY 13-14 from a turnover of Rs. 25124 lakhs in previous year. The profitability of the company is also severely affected. During the FY 2013-14, NFDC incurred a loss of Rs. 321 lakhs (PBT) in comparison to a PBT of Rs. 831 lakhs in the FY 2012-13. Your company is carrying on a business model where most of the business activities are development oriented. These activities are generally loss making and therefore, to meet its overhead cost and capital cost for expansion, a supportive profit oriented business activity (ies) is required to sustain operating costs and cross subsidizing developmental initiatives.
The Board for Reconstruction of Public Sector Enterprises (BRPSE), while approving the Revival Plan of NFDC, recognized this factor and approved the proposed business plan of NFDC taking cognizance of the initiative of the Ministry of Information and Broadcasting allowing NFDC to carry out audio-visual publicity of the Government / PSU etc. in 2009. NFDC was on nascent stage of recovery when the Media Business activity was abruptly stopped. Board for Reconstruction of Public Sector Enterprise (BRPSE) in its meeting held on 29th August 2013, took note of the same and recommended that “ The ministry should continue NFDC as one of the agency for the business of advertisement under the Electronic Media Advertisement policy along with DAVP as it is a part of revival plan of NFDC recommended by BRPSE and approved by the Government.” NFDC is looking forward to an early restoration of the activity in order to ensure sustainability of the enterprise. NFDC has continuously endeavoured to encourage a balanced growth of India’s multi-lingual and diverse cinema by encouraging new talent and undertaking 100% production of the first feature films, developing new scripts, co-producing good quality films in partnership with Indian and foreign filmmakers, and creating domestic and international markets to promote these films. The company has partnered in some path breaking films that have received critical acclaim and awards across the globe. It has created cinema in various Indian languages that reflect India’s diverse and vibrant film culture. A significant step to promote Indian cinema was taken by setting up a Video On Demand (VOD) platform, www.cinemasofindia.com to upload and stream Indian films across geographical, social & cross-cultural barriers.
Annual Report 2013–14
17
The Film Club Initiative is continuing its efforts to roll out its Film Club wherein tie-ups are proposed with school / education boards to showcase films in order to build audiences for critically acclaimed cinema. In the offing, NFDC intends to set up a Film Cultural Centre in Mumbai. This Centre would be a place where film screenings, workshops, lectures, research material, and interactions with the film fraternity can be offered to cine lovers, youth and local residents. NFDC strongly believes that a unique Film Centre in Mumbai will encourage a deeper understanding and appreciation of the art, aesthetics, history and technology of filming. The company adheres to the requirements of corporate governance notified by the Department of Public Enterprises and has been given a certificate to this effect by the statutory auditors of the Corporation. Its commitment to ensuring customer satisfaction
continues, as is evident from the customer rating of 4.50 given on a scale of 1 to 5 by clients for whom NFDC carries out production work and publicity campaigns, as also the 4.70 rating given by the film fraternity towards the steps taken by NFDC for promoting Indian cinema in film markets abroad. On behalf of the Board of Directors and all officials of the Company, I would like to convey my sincere gratitude to the Hon’ble Union Minister of State (Independent charge) of Information & Broadcasting, Shri Prakash Javadekar, and Secretary, Ministry of Information & Broadcasting, Shri Bimal Jhulka, for the immense support and guidance received from them. I would also like to express my thanks and appreciation to my esteemed colleagues on the Board and to all employees of NFDC, as also to the other stakeholders of the Company for their valuable support and cooperation to the Company.
Ramesh Sippy Chairman
18
Annual Report 2013–14
Directors’ Report To, The Shareholders The Directors have pleasure in presenting the Thirty Ninth Annual Report together with Audited accounts of the Company for the financial year ended March 31, 2014
1. Performance Highlights a.
(` in Lakhs)
The highlights of performance of the company for the year 2013-2014 as against the performance in F.Y. 20122013and FY 2011-12 are as under (` in Lakhs)
Parameters Gross Revenues Gross Margin (EBIDTA)
2013-14
2012-13
2011-12
12,693
25,124
25571
(116)
953
587
Profit / (Loss) Before Tax
(321)
831
408
Net Worth
1957
2,278
1643
b.
September 2010 by converting its existing loan into equity and infusion of Rs. 300 lakhs as fresh equity. The financial performance of NFDC had been escalating consistently since then. Revenues of the company increased from Rs. 6820 lakhs in the FY 2009-10 to Rs. 25112 lakhs in FY 2012-13. On the other hand profitability of the company jumped from a loss of Rs. 713 lakhs in the FY 2009-10 to a profit of Rs.831 lakhs in FY 2012-13.
NFDC had been making profits in immediate preceding three years after revival of the company in 2010-11. In June 2013 (F.Y. 2013-14), the Ministry of Information & Broadcasting amended the Electronic Media Policy and de-notified NFDC to carry out Audio-Video publicity of various departments / ministries of Government of India. This decision adversely affected the profitability and turnover of the company. It is hoped that the Ministry of Information & Broadcasting would give back the business of Electronic Media Advertising in order to enable the company to resume its trajectory of growth and profitability.
Particulars
Pre-Revival
Post Revival
FY 09-10
FY 10-11 FY 11-12 FY 12-13
Share Capital – Paid up
1399.85
4539.98
4539.98
4539.98
Accumulative Losses C/f
3475.39
3306.76
2896.80
2262.16
(3475.39)
1233.22
1643.18
2277.82
Total Revenue
Net Worth
6820
18500
25571
25112
Profit / (Loss) Before Tax
(713)
168
408
831
The Board for Reconstruction of Public Sector Enterprises (BRPSE), after reviewing NFDC’s performance declared NFDC as a “Turnaround PSE” on 31st October 2013.
Discontinuation of Media business by the ministry was also reviewed by the Board for Reconstruction of Public Sector Enterprises (BRPSE), in its meeting held on August 29, 2013 and recommended that “The ministry should continue NFDC as one of the agency for the business of advertisement under the Electronic Media Advertisement policy along with DAVP as it is a part of revival plan of NFDC recommended by BRPSE and approved by the Government.” The Ministry is yet to amend EMA policy enabling NFDC to carry out the Media business. c.
Turnaround
NFDC was declared sick by BRPSE in 2008. Government of India approved the revival package of NFDC in
Annual Report 2013–14
19
d.
Dividend
Due to accumulated and carried forward losses of Rs. 2585 Lakhs as on March 31, 2014, as also losses for F.Y. 2013-14, payment of dividend is not recommended for the year ended March 31, 2014
2. Financial Review a.
Summary of Financial Results
The summary of financial results of the company for the year ended March 31, 2014 is given below (` in Lakhs)
Particulars
2013 - 2014
2012 - 2013
12,693.31
25,123.60
(116.50)
952.55
8.58
13.78
84.88
107.71
(320.64)
831.06
Nil
196.43
(320.64)
634.64
Less: Profit / (Loss) Brought forward
(2264.49)
(2,899.13)
Balance Carried to Balance Sheet
(2585.14)
(2,264.49)
Gross Income EBIDTA Financial Expenses Depreciation Profit / (Loss) Before Tax Provision for Tax, etc. Profit / (Loss) After Tax
b.
Growth
In the financial year 2013-2014, the company achieved a turnover of Rs. 12,693 lakhs which is not inconsistent with the turnover achieved in earlier year. The discontinuation of the Electronic Media Advertisement business by the Ministry of Information & Broadcasting has however adversely affected the working of the company across all realms of its functioning.
c.
Net Worth
The net worth of the company stands at Rs.1957.18 Lakhs as on March 31, 2014 (Previous year Rs.2277.82 Lakhs).
d.
Particulars regarding conservation of Foreign Exchange Earnings and Outgo
The particulars regarding foreign exchange outgo during the year under review are given in note no. 44 to Notes on Accounts forming part of the Annual Accounts. Earnings in foreign exchange are Rs. 227.73 Lakhs against
20
Annual Report 2013–14
Rs.142.25 Lakhs in the previous year and expenditure in foreign currency is Rs. 421.20 Lakhs (previous year Rs. 519.08 Lakhs).
3. Directors’ Responsibility Statement Pursuant to Section 217 (2AA) of the Companies Act, 1956, it is hereby confirmed that – i.
In the preparation of the Annual Accounts for the period ended March 31, 2014, the applicable accounting standards have been followed, along with proper explanation relating to material departures, if any;
ii.
Such accounting policies are selected and applied consistently, and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the company at the end of the financial year, and of the profit or loss of the company for that period.
iii.
Proper and sufficient care is taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company, and for preventing and detecting fraud and other irregularities.
iv.
The annual accounts have been prepared on a going concern basis.
4. Activities Of The Company Film Production Under the 12th Five Year Plan Scheme of the Ministry of Information and Broadcasting titled “Production of films in various Indian languages”, the Film Production Department produces /coproduces feature films that embody the Cinemas of India. Under the Scheme, NFDC produces/co-produces films under its extant guidelines for film production, whereby it encourages debutant filmmakers by undertaking 100% production of their first feature film and co-production of good quality films in partnership with private players both from India and abroad. The Production Department supports and drives NFDC’s mission to create artistic content with the intent of fostering excellence in cinema and to promote Indian culture through the cinemas of India. The Production Department, in keeping with this directive, is continuously seeking to create an environment that facilitates and nurtures filmmakers who bring India’s varied and lively film culture to life. The Production Department endeavors to support, through production and collaboration, a community of versatile and emerging filmmakers who embody diversity, innovation and uniqueness.
• During the period April 2013 to March 2014, NFDC produced/ completed the following films, of which three were directed by debutant filmmakers. Details of these films are as under – Film Name
Language
Director
Category
Manjhi – The Magadhi Mountain Man
Ketan Mehta
Co-Production
Vees Manjhe Vees
Marathi
Uday Bhandarkar
Own Production
Tasher Desh
Bengali
Qaushik Mukherjee
Co-Production
Qissa
Punjabi
Anup Singh
Co-Production
Jal
Hindi
Girish Malik
Co-Production
The Lunchbox Hindi
Ritesh Batra
Co-Production
• Some of the outstanding achievements accomplished by the films produced/co-produced by NFDC between April 2013 and March 2014 were as follows:
1. NFDC’s own production The Good Road, made by firsttime director Gyan Correa, was released across theatres in Gujarat in July 2013. The film was also India’s official entry into the Best Foreign Film category at the 86th Academy Awards (Oscars).
2. Punjabi film Qissa, directed by Anup Singh and coproduced by NFDC and Heimatfilm of Germany premiered at the Toronto International Film Festival 2013 and won the NETPAC (Network for the Promotion of Asian Cinema) Award for the Best Asian Film at the same festival. The film has since generated a buzz with International Trade Magazines and Films Festivals. Actress Tillotama Shome was awarded the Best Actress title in the New Horizons Competition of the seventh Abu Dhabi Film Festival for her role in the film.
Qissa was also honoured as the opening film at the International Film Festival of Rotterdam 2014 to celebrate the 25th anniversary of the Hubert Bals Fund. It also won the Diophrate Award, as known as the Audience Award there. At Vesoul International Film Festival 2014, Qissa received a special mention from the jury and received the Prix Jury Langues O’, while at the Curacao International Film Festival at Rotterdam 2014, it was adjudged the ‘Best of the Fest’ by the audience, along with Paolo Sorrentino’s La Grande Bellezza and Sebastian Leilo’s Gloria. 3. The Lunchbox, made by debutant director Ritesh Batra and co-produced by NFDC along with Anurag Kashyap Films, Dar Motion Pictures, ROH Films (Germany), ASAP Films(France), Cine Mosaic (USA), was screened at the
Festival de Cannes 2013, where it won the Grand Rail d’Or Award, popularly known as the Cannes Critics Award. From there it went to the Toronto International Film Festival 2013 and won The Church of Iceland Award (Special Mention) at the Reykjavik Film Festival 2013. The Dubai International Film Festival 2013 saw Irrfan Khan win the Best Actor Award in the Muhr Asia Africa Feature category and Writer/Director Ritesh Batra get a special mention for the screenplay. The film won the best Screenplay Award and shared the Grand Jury Prize at the Asia Pacific Screen Awards 2013, and subsequently won Outstanding Achievement Award for lead actor Irrfan Khan, Best Supporting Actor for Nawazuddin Siddiqui and the Best Screenplay Award for Ritesh Batra. It was also adjudged the Best Film at the London Indian Film Festival 2013, and the Best Feature at the Oslo Films from the South Festival 2013. Irrfan Khan and Ritesh Batra also won the Best Actor and Best Script Awards respectively at the Asian Film Awards 2014. The Lunch Box has been the most successful Indian film at the box office in non-traditional markets across the world in recent years.
Qissa Anup Singh |Punjabi
Vees Mhanje Vees Uday Bhandarkar | Marathi
Annual Report 2013–14
21
Training and Development
Distribution
NFDC LABS has been established by NFDC to provide a framework of professional development for Indian filmmakers already established in the work-field or developing their careers following Film and/or Media studies.
• Cinemas of India- NFDC’s production & distribution brand Cinemas of India gained further momentum with a host of theatrical releases including Cinemas Of India, a multifaceted distribution platform, was launched in the early 2012, to facilitate showcasing of Indian cinemas. It also plays an important role in bridging the gap between the maestros of Indian Cinema and the new age filmmakers, by presenting their work in various formats. The main segments are Home Video, theatrical distribution, Video On Demand and television syndication.
NFDC Labs seeks to deepen and enhance the working practice of talented writers, directors and producers, through project-based workshops, labs, and master-classes. DEVELOPMENT work in NFDC is operational in synchronicity with the Production department, providing analyses, evaluation and direct intervention, script development sessions on Board– Recommended projects, etc. Further the development department liaises constantly with creative community players in relation to upcoming or completing (editing) projects which may have an NFDC component or future talent acquisition interest.
• The much-anticipated www.cinemasofindia.com has been launched to showcase films online whereby films can be viewed for free and Pay-Per-View basis. Work towards having films available in packages for Subscriptions basis is on. The website currently hosts 75 titles, of which three films have been introduced under the Pay-Per-View category. All
NFDC Labs
22
Annual Report 2013–14
films on the Cinemas of India VOD website are available for viewing with Adaptive Streaming - that allows the film to switch it's picture quality depending on the viewer's internet speeds, English subtitles and social media sharing and commenting abilities. • Work towards the creation of the Cinemas of India App for Android, iPad and iPhone devices has also begun with the basic templates, functionality and design already being shared with our development team.
• NFDC successfully released more than 30 titles in DVDs in 2011-12 under the brand, “Cinemas Of India”. This process saw the release of 21 titles in 2013-14, in DVD and VCD format. This list included the highly acclaimed title, Om Dar B Dar by Kamal Swaroop and Salaam Bombay by Mira Nair, The year also saw the release of NFDC’s new films, Tasher Desh and The Good Road. List of DVDs released in the FY 13-14 is as under:
Annual Report 2013–14
23
List of NFDC Films – DVD Released From 01.04.2013 to 31.03.2014 Sl.
Film Name
Language
Director
Malayalam
Roopa Swaminathan
1
Five By Four
2
Limited Manuski
Marathi
Nachiket Patwardhan
3
Dance Like A Man
English
Pamela Rooks
4
Nirbachana
Oriya
Biplab Ray Choudhury
5
1:1:6 An Ode To Lost Love
English
Madhu Ambat
6
Dance of The Wind
Hindi
Rajan Khosha
7
Char Adhyay
Hindi
Kumar Sahani
8
Gaman
Hindi
Muzaffar Ali
9
Miss Beatty’s Children
English
Pamela Rooks
10
Galige
Kannada
M. S. Sathyu
11
The Good Road
Gujarati
Gyan Correa
12
Sammohanam
Malayalam
C. P. Padmakumar
13
Mahri Da Diva
Punjabi
Surinder Singh
14
Salaam Bombay
Hindi
Mira Nair
15
Tasher Desh
Bengali
Qaushik Mukherjee (Q)
16
10 DVD Pack
Miscell.
A Collection of 10 films
17
Mukta
Marathi
Jabbar Patel
18
Women Special DVD Pack
Hindi
A Collection of 3 films
19
Om Dar-B-Dar
Hindi
Kamal Swaroop
20
Paar
Hindi
Gautam Ghose
21
Sanghat
Bengali
Pinaki Choudhury
22
Antareen
Bengali
Mrinal Sen
Theatrical Release – This year saw the release ofnew titles, The Good Road (Gujarati), Tasher Desh (Bengali) and Om Dar Ba Dar (Hindi) across various cinemas.
24
Annual Report 2013–14
Promotion of Indian Cinema in Festival & Markets abroad The Overseas division works towards building the presence of Indian Cinema at International Film Festivals & Markets. With the International Film community’s ever-increasing interest in Indian Cinema, the division primarily focuses on promoting and showcasing Cinemas of India and Indian talent at International Film Festivals & Markets. The division has also fostered partnerships with private and government film institutions from across the world. To facilitate visibility of Indian Cinema in global markets, and promotion of India as a filming destination, the Ministry of Information & Broadcasting has entrusted the task of promoting Indian films at various International Film Festivals and markets in India and abroad to the Corporation. Under these initiatives the Corporation sets up India Pavilions/India Stands at various markets including the Cannes Film Festival, Toronto International Film Festival, MIPCOM, American Film Market, European Film Market and Filmart. Mindful of its responsibility of ensuring that such promotion meets the needs of the Filmmakers, NFDC obtains a feedback and evaluation from participant filmmakers. For the year 2013-14, NFDC’s activities in this field received a rating of 4.70 out of total of 5 (Excellent Rating) for its efforts.
Film Bazaar NFDC set up Film Bazaar India in 2007 in Goa alongside the International Film Festival of India with the objective of creating a production & sales platform that would ensure greater visibility of Indian Cinema across world markets. In 2010, the market was expanded to cater to the needs of cinemas of South Asia. Film Bazaar is now a full-fledged and the only South Asian Film Market, a converging point for buyers and sellers of film rights from all over the world in this region. It is a window to South Asian Cinema for Film Festival Directors/Programmers for possible selection and a platform for Producers seeking South Asian stories for Co-production.
A Knowledge Series session in progress at Film Bazaar, 2013 Goa The event has now become a regular feature on the International Market calendar for the International film industry. From a tentative start in 2007 with 170 delegates, Film Bazaar in 2013 saw the attendance of 831 delegates from 36 countries. Film Bazar currently stands as the most effective platform for promoting Indian Cinema & has enable the discovery of some of the most acclaimed films of India in the International circuit in recent years.
5. Human Resource Development a.
Schedule Caste / Schedule Tribe Reservation
The directives issued by the Government of India regarding reservation for SC/ST in appointment and promotion to various posts, were complied with.
b.
Training & Human Resource Development
Training and human resource development is receiving a place of priority and a programme to impart suitable training to employees in technical and soft skills is being implemented. During the year under report 81 man days of training were imparted to officers and employees of the Company. An assessment of specific skill sets and potential of each employee, based on the responsibilities discharged by them during their years of employment, is also currently underway through a professional HR agency.
c.
Industrial Relations
Industrial relations continued to be healthy, cordial and harmonious. There were no strikes.
Producers’ Lab sessions at Film Bazaar 2013 at Film Bazaar, 2013 Goa
Annual Report 2013–14
25
6. MOU With Ministry of Information and Broadcasting
10. Vigilance Matters
The performance of NFDC in terms of Memorandum of Understanding signed with the Ministry of Information and Broadcasting (the administrative Ministry) Government of India for the FY 2012-13 has been rated as “Excellent”.
A Chief Vigilance Officer is due to be appointed by the Ministry of information and Broadcasting. However, the company has designated an officer in the rank of Deputy General Manager to oversee vigilance matters.
However, in case of MOU signed with the administrative ministry for the FY 13-14, the target fixed by the task force of DPE needs revision due to non-fulfillment of commitments given by the administrative ministry in the MOU to continue NFDC as an agency to undertake audio-visual publicity work of Govt./PSUs.
11. Board of Directors and Board Meetings
Ministry of I&B, vide letter no. 1/9/2009-MUC dated 13th June 2013 changed the EMA Policy and made DAVP the sole agency for undertaking audio-visual publicity work of Govt. / PSUs. This change in the policy has acutely affected the performance of the company in view of the fact that this segment of business contribute as much as 80% to 85% of the gross turnover of NFDC.
The Company’s directors are appointed and their remuneration is fixed by the Government of India. Currently there are three independent directors appointed by the Government of India. The company has no role in the appointment of its directors. During the year the Ministry of Information and Broadcasting, Government of India, has appointed Smt. Bharathi S. Sihag as part time Government Director of the company with effect from September 4, 2013.
NFDC is poised to get an “EXCELLENT” rating considering its achievements against REVISED target.
During the Financial Year 2013-14, six Board Meetings were held on 30/04/2013, 30/05/2013, 12/07/2013, 20/10/2013, 27/11/2013 and 01/02/2014.
7. Official Language Implementation
12. Auditors
The Official Language Act, along with the Rules thereof and orders issued from time to time by the Department of Official Language, Ministry of Information and Broadcasting, and the Department of Public Enterprises regarding use of Hindi, were implemented in the Company during the year. Meetings of the Official Language Implementation Committee were held regularly to review the use of Hindi in the Company and steps taken to implement the Annual Program for the year 2013-2014 issued by the Department of Official Language, Ministry of Home Affairs, Government of India.
The Comptroller and Auditor General of India appointed M/s. C.B. Chhajed & Co., Chartered Accountants, DGP House, Ground Floor, 88-C, Old Prabhadevi Road, Mumbai – 400 025 as Auditors of the Company for the year 2013-2014 under Section 619(2) of the Companies Act 1956.
8. Report On Conservation Of Energy, Technology Absorption, etc.
13. Right to Information Act, 2005
Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Director) Rules, 1988 regarding Conservation of Energy, Technology Absorption is not applicable to the Company.
9. Particulars of Employees Receiving Salary as Per Secton 217 (2A) There was no employee of the Company who received remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.
26
Annual Report 2013–14
The auditors have audited the Accounts of the Company for the year ended March 31, 2014. The audited accounts with required annexure and reports are annexed to this report.
Necessary action has been taken by the Company towards implementation of Right to Information (RTI) Act 2005 in NFDC. RTI Machinery is in place to attend to RTI applications and followups 1 . Chief Public Information Officer R. Harish, Manager (Legal/ P&A) 2. Appellate Authority N.K.Vyas, Deputy General Manager (P&A)
14. Vigil Mechanism In order to practice better Corporate Governance, NFDC has adopted a Policy for Prevention of Fraud. The objective of the policy is to provide a system for detection and prevention of fraud,
reporting of any fraud that is detected or suspected and for fair dealing of matters pertaining to fraud. The Head of Departments, General Managers, and Regional Managers are designated as the Nodal officers for this Fraud Policy and will co-ordinate all activities as per the Policy.
15. Audit Committee The composition of the Audit Committee as on 31st March 2014 is as under: Name of the Director
Designation
Position in Committee
Ramesh Sippy
Independent Director
Chairman
Nina Lath Gupta
Managing Director
Member
Bharathi S. Sihag
Govt. Nominee Director
Member
A.K. Bir
Independent Director
Member
Jawahar Lal Wattal Independent Director
Member
Director Finance, Internal Auditors and Statutory Auditors are standing invitees in the Audit Committee meetings. Senior functional executives are also invited as and when required to provide inputs to the Committee.
16. Comments on the Auditors Report PARA (a) Arbitration awards have been issued in favour of the Company against two parties for recovery of the deposit amounting to Rs.18 Lakhs. In respect of the balance amount of Rs.12 Lakhs, arbitration proceedings are still underway. Since the Corporation is hopeful of getting arbitration award in its favour, no provision has been made for the same in the books of accounts.
PARA (d) It is expected that there will be no negative impact on the net profits of the Company and respective assets and liabilities on account of the issues raised by the auditors in Paras (a) to (c).
17. Risk Management Policy The Board of directors review internal & external risks of the business periodically so as to take timely corrective action. In order to review its internal weaknesses and various external threats periodically, reports are placed before the Board of directors.
18. Acknowledgements The Board thanks the Company’s business partners for their support and confidence in NFDC and look forward to sustaining and building this mutually supportive relationship in the future as well. The Board also gratefully acknowledges the support and guidance received from the Union Government of India, various Ministries of the Government of India, particularly the Ministry of Information and Broadcasting, in the Company’s operations and expansion plans. The Directors also express their grateful appreciation to the Department of Public Enterprises, Comptroller and Auditor General of India, Chairman and Members of the Audit Board, Statutory Auditors, Internal Auditors, Bankers, patrons and customers of the Company. The Board records its deep appreciation for the enthusiastic and dedicated work of the members of NFDC. Their outstanding team effort was invaluable for the smooth functioning of the Company during the year under report. For and on behalf of the Board of Directors For National Film Development Corporation Ltd.
Place: Mumbai Date: 15th September, 2014
(Ramesh Sippy) Chairman
PARA (b) The accounting of overseas distribution income for the film “Gandhi”, which is distributed half yearly (June & December) on calendar year basis by the collection agent, is accounted for in the books as per the statement received from the agent. Since the practice has been followed consistently, there will not be any major impact due to accounting of this income on calendar year basis. PARA (c) No comments
Annual Report 2013–14
27
Management Analysis Report The Company:
NFDC consider itself responsible for facilitating growth in areas of the Indian film industry, which cannot be undertaken by the private sector due to commercial constraints. In a fast-growing industry like India’s, new challenges emerge at every stage. NFDC aims at stepping into these areas and filling the gaps to supplement the efforts of the industry.
National Film Development Corporation Limited is a Public Sector Undertaking established to encourage the good cinema movement in the country. The primary goal of the NFDC is to plan, promote and organize an integrated and efficient development of the Indian Film Industry and foster excellence in cinema. Over the years, NFDC has provided a wide range of services essential to the growth of Indian Cinema. The NFDC (and its predecessor the Film Finance Corporation) has so far funded / produced over 300 feature films. These films, in various Indian languages, have been widely acclaimed and have won many national and international awards. It is also exploring ways and means to develop audiences and distribute critically acclaimed cinema to the same.
Legal Status and Autonomy The company is a legal entity and is legally, functionally, and financially autonomous, operates under the corporate laws as an independent commercial enterprise. However, the Government of India through the Ministry of Information & Broadcasting and the Department of Public Enterprises under the Ministry of Heavy Industries, monitors its performance through a system of Memorandum of Undertaking (MoU) as regards targets to be achieved every year as part of accountability to the Parliament in respect of all Government companies. Government can and does issue guidelines to regulate and bring about some uniform pattern in the functioning of the Company. Company is managed and run under the superintendence, control and direction of its Board of Directors as per the Companies Act.
NFDC also aims to promote the growth of Indian Cinema through other activities such as Script development, promotion of films made by independent filmmakers in markets abroad, and creation of platforms for greater interaction between Indian filmmakers and members of the international film fraternity through the Film Bazaar organized by NFDC alongside the International Film Festival of India in Goa since November, 2007.
Overall Industry Size & Projections Overall industry size (INR Billion)
(` in Billion)
Growth in 2013 over 2012
2014p
2015p
2016p
2017p
2018p
CAGR 2013-18
2008
2009
2010
2011
2012
2013
TV
241.0
257.0
297.0
329.0
370.1
417.2
12.7%
478.9
567.4
672.4
771.9
885.0
16.2%
Print
172.0
175.2
192.9
208.8
224.1
243.1
8.5%
264.0
287.0
313.0
343.0
374.0
9.0%
Films
104.4
89.3
83.3
92.9
112.4
125.3
11.5%
138.0
158.3
181.3
200.0
219.8
11.9%
Radio
8.4
8.3
10.0
11.5
12.7
14.6
15.0%
16.6
19.0
23.0
27.8
33.6
18.1%
Music
7.4
7.8
8.6
9.0
10.6
9.6
-9.9%
10.1
11.3
13.2
15.1
17.8
13.2%
OOH
16.1
13.7
16.5
17.8
18.2
19.3
5.9%
21.2
23.1
25.2
27.5
30.0
9.2%
Animation and VFX
17.5
20.1
23.7
31.0
35.3
39.7
12.5%
45.0
51.7
60.0
70.2
82.9
15.9%
7.0
8.0
10.0
13.0
15.3
19.2
25.5%
23.5
28.0
32.3
36.1
40.6
16.2%
6.0
8.0
10.0
15.4
21.7
30.1
38.7%
41.2
55.1
69.7
88.1
102.2
27.7%
580
587
652
728
821
918
11.8%
1039
1201
1390
1580
1786
14.2%
Gaming Digital Advertising Total Source: KPMG in India analysis
Industry Overview Coming off 2012, a record year, 2013 saw the industry record a strong performance, both in terms of content and box office collections. The year was marked with films that scored well at the box office with stronger stories, grander sets, experimental concepts, new faces, multi-starrers and strategic marketing initiatives. While the capital poured in through organised and
28
Annual Report 2013–14
unorganised channels, the industry still faced challenges in delivering robust bottom line results. The audiences stayed away from the regular run-of-the-mill concepts, barring a few mega starrers that were able to pull in viewers based on star persona and past successes. Content has always been ‘the king’, but it used to struggle to reach the audience on time while content owners grappled with issues
such as piracy.The necessary digital infrastructure has now been developed to allow this content to travel quickly to its audiences in both metros and regional parts of India. The Indian film industry’s growth has been fuelled by the expansion of the multiplexes that have enabled players to effectively segment the market. While the audience now have access to a greater variety of content, available at various price points, production houses can now seek to develop theme-based movies that attract a niche audience but deliver a strong positive return on investment. The industry has benefitted greatly from digitisation; from shooting the movie on digital formats and distributing content across various locations, to marketing the film on various social media platforms to monetizing content on video on demand (VoD) platforms. While monetising of content on digital delivery platforms remains a concern in the short term, the industry is buoyant about its long term potential due to improved internet access at affordable prices.
One of the key breakthroughs expected to be adopted in the future is the use of laser phospor projectors in film theatres, which will bring along advantages of longer service life, immediate dimming and lower operating costs. However, regulatory and safety concerns regarding their use are still being explored. Industry discussions indicate towards leveraging the historical success of certain movies and build strong franchises around them by producing sequels. Some sequels lined up in 2014 include, Hate Story 2, Welcome Back and Singham 2. Also, the successful Hollywood trend of converting TV shows into movies may soon be witnessed by the Indian film industry, with the makers of Bigg Boss deciding to adopt the celebrity reality show into a movie.
The industry is also observing greater interaction across the regional language markets from exchange of talent to remake movies in different languages. Most of this has been possible due to studios forming alliances with regional players and co-producing movies.
Videos on demand platforms (VoD) are soon expected to replace DVDs as an online content delivery network portal for audiovideo streaming services. It is becoming easier with telecom and internet providers offering inexpensive and convenient services and platforms like Google Play Movies where one can rent movies starting INR 50. Google plans to bring YouTube to television screens in India through DTH providers. The next wave of significant growth is expected to be driven by rapid expansion of multiplex infrastructure, which will be a function of performance of the real estate industry and growth of organized retail in India.
Film Production
Challenges faced by the Industry
The Indian film industry has players like Yash Raj Films, Dharma Productions, Rajshri Productions, Mukta Arts, and others, who have been involved in film production since the 1960s and 1970s. These larger production houses and international players, including corporate houses like Disney India, Viacom18 Motion Pictures, Fox Star Studios, Reliance Entertainment, etc., continue to drive a professional and management-driven approach to production, distribution and marketing of films. Indian production companies are increasingly shifting away from producing stardriven films to content-oriented films with new talent. The move is primarily driven by considerable increase of over 15-30 per cent in production costs. While the cost structure varies for different films; artist fees continue to constitute a major portion of the overall film’s budget. Corporatisation is leading the industry to become more prudent in producing movies. The pre-production phase of movies has become more structured, with greater emphasis given to acquisition of script, planning, budgeting and financing activities.
The growing internet user base is fuelling piracy like never before. With the advent of technology and the proliferation of the internet in tier II and tier III markets, physical piracy has transformed into online piracy, which operates through peer-to-peer networks. This technology does not leave a footprint and thus makes it difficult for the authorities to clamp down on the perpetrators. The Ministry of Information & Broadcasting has proposed to address the issue of intellectual property theft by declaring piracy as a non-bailable offence. Also the industry is looking at reducing the release window of films from 3-4 months in 2012 to 2-3 months in 2013. Filmmakers are also making a conscious effort to create awareness about the ill effects of piracy and the connection between piracy and organised crime among their audience.
Emerging Trends With the theatrical business being extremely content sensitive, there is a constant need for exhibitors to increase revenue per user, resulting in alternate revenue streams becoming an important source for driving sustainable business value. BIG Cinemas has taken initial steps towards building a business model whereby it can leverage its existing multiplex network to bring about a change in the way Indians shop.
The concentration of power in the hands of a few top actors and now directors and technicians, a characteristic, which is prominent across all language markets and more strongly in case of Bollywood and the South Indian film industry is unsustainable from a long-term perspective as the high talent acquisition costs leads to higher risks and in certain cases impact the return. Lack of spaces to screen films is becoming a source of much discontentment in the industry. Mismanagement, coupled with low footfalls and poor brand pull led to the shutdown of several malls and multiplexes, and put on hold the plans of building more such avenues for film exhibition. Almost 150 multiplexes in India are trapped in project delays because of the market slowdown.
Annual Report 2013–14
29
These challenges have come at a time when films are ready to be released on wider platforms due to digitization, but do not have quality cinema theatres to screen these films. Independent cinema faces a bigger challenge here in not having dedicated venues for their release to provide an exclusive space where filmmakers can nurture their niche audience. Distribution is another key issue faced by independent filmmakers in India. Indian independent filmmakers usually work with constrained budgets and are hence unable to market and promote their films in the most desirable manner. Hence, several independent films skip audience attention and are completely out of sight in less than a week of their release. India’s film merchandising market is still very premature, unlike other countries, such as the US, UK and China. Some of the reasons for low uptake of the category include limited focus and reach of Indian filmmakers, piracy – where lookalikes and best copies of original film merchandise are sold in grey/open markets for a much lesser price, diverse audience to be reached with different propositions and price points, absence of iconic figures in Indian cinema, product quality and utility concerns and limited popularity period for such merchandise.
Competitive Position of NFDC NFDC was set up to promote the growth of the Indian Film Industry in accordance with the economic objective of the Government as laid down from time to time. Keeping this objective in mind, NFDC is positioned to facilitate the growth of the film industry and strategize the development work from time to time as per the need of the film industry. Along with production of regional and art films, which promote Indian culture through the cinemas of India, NFDC is now focused on development of content and talent, an area that needs improvement. NFDC also plays a very crucial role in research and development of content development in order to deliver quality films. As the industry grows and diversifies, there are new challenges and shortfalls faced at each stage of growth, and NFDC identifies and develops new initiatives to supplement the growth and efforts of the industry.
Products & Services NFDC’s offers the following services.
Film Production NFDC’s Film Production Department supports and drives NFDC’s mission through the Cinemas of India. It continuously seeks to create an environment conducive to the making of cinema that reflects India’s most imaginative, diverse and vibrant film culture. The Department’s endeavour is to support, through production and collaboration, a community of versatile and emerging filmmakers who embody diversity, innovation and uniqueness. Apart from production of films, NFDC also produces advertisements, documentaries, short films, TV series, web advertisements, radio series and thematic musical anthems.
Distribution At NFDC, the focus is to establish a sustainable mechanism for distribution of films in India, both its own productions and also films of independent filmmakers with limited access to domestic markets. The Distribution Division has launched the brand Cinemas of India to facilitate distribution of its own films and also films of independent filmmakers. The Multifaceted Distribution Platform – with products under the brand ‘Cinemas of India’ currently comprises – • • • • •
Home Video Theatre Releases Satellite Syndication YouTube Internet Channel Internet VOD Platform – ‘www.cinemasofindia.com’a pay – per – view and subscription model, available worldwide. • Mobile Platforms – Cinemas of India channel across various mobile service providers. In addition, NFDC releases media campaigns across Television, Radio, Digital Theatres, Web, Mobiles, and Public LCDs for more than 30 government clients.
Training & Development NFDC’s role and efforts are parallel to its commercial counterpart, the private sector. It is a development corporation and therefore needs constant review in accordance with the needs of the industry at a given point of time, to supplement the efforts of, and not compete with the private sector.
30
Annual Report 2013–14
Given the gap in the area of mid – career training opportunities in the film sector, as also the need for greater focus on research and development in content creation, the Training & Development Division was set up in 2012.
It has been established under the brand NFDC Labs to deliver two outputs for the NFDC & Indian Film community – • Training for Professional filmmakers, providing workshops and master classes in core disciplines; Directing, Writing, Editing, Cinematography and Producing. • Establish a development arm within the NFDC itself to support script and project development to ensure a steady flow of quality projects towards the NFDC production department and towards the Industry at large. Training activities include long running staged development programmes for scripts in different states across the subcontinent, including international industry programmes in overseas film markets & festivals. NFDC also conducts various training programmes in Avid & FCP Digital Non – Linear Editing, Audio Dubbing, Digital Cinematography, Multimedia Subtitling, etc., for students under State Government sponsored schemes.
Film Bazaar Organized by the National Film Development Corporation (NFDC), Film Bazaar is a platform exclusively created to encourage collaboration between the international and South Asian film fraternity. The event is focused on discovering, supporting and showcasing South Asian content and talent, in the realm of filmmaking, production and distribution. A converging point for film buyers and sellers from all over the world, the Bazaar also aims at facilitating the sales of world cinema in the South Asian region. The Film Bazaar is held every year from November 20 to 24 at the Goa Marriott Resort, alongside the International Film Festival of India (IFFI).
Services to Various Government Departments NFDC provides various services to government departments / PSUs and also executes various plan / non plan schemes of government departments relating to film production / exhibition / marketing / etc. NFDC also executes the media production work like production of advertisements, documentaries, short films, TV series, web advertisements, radio series and thematic musical anthems.
Preview Theatres NFDC gives on hire its 81 seaters Preview Theatre at Mumbai and 100 seater Preview Theatre at Chennai, for exhibition of film to various government / non-government clients. The theaters are equipped with latest technology to show films in analog and digital platforms, including 3D projection facilities.
SWOT ANALYSIS Strength The NFDC has the largest catalogue in India of award winning and critically acclaimed films. It has so far funded/produced over 300 feature films. It has also produced the largest number of international co-productions, having co-produced more than 20 films. NFDC enjoys considerable experience in the field and has strong links with the international film fraternity and film funding bodies of other countries. Recognized as the launching pad for young talent, it is becoming a destination for not only the debutant directors / artist but also for established filmmakers. NFDC enjoys a prestigious position in international markets where NFDC has successfully organized many international markets / festivals and the same has been rated “Excellent” by independent experts. NFDC also emerged as an agency to undertake publicity assignment of various Government departments and able to capture a substantial business share by providing a “Total Customer Satisfaction”. Government Departments has rated NFDC as 4.91 on a scale of 5 (Excellent). NFDC also developed skills in production work like production of advertisements, documentaries, short films, TV series, web advertisements, radio series and thematic musical anthems. NFDC has a streamlined procedure for screening scripts & production of good quality films. This combined with its production activities has the potential of creating an organization of formidable strength. NFDC also has a substantial international presence and widespread global contacts.
Weaknesses Even after having a good distribution network, NFDC film which are non-stream films face several hurdles - (a) visibility of films to be screened is very low due to lack of high P&A and marketing budgets; (b) Box-office Clutter leaves no screen-space for nonmainstream films thus leading to exhibition roadblocks; (c) Hollywood and Bollywood films have extensive pan-India release supported by innovative marketing strategies and high spends thus creating distribution bottlenecks, making it more attractive for distributor to pick up these films rather than non-mainstream films.
Opportunities Given the hurdles NFDC face for film distribution and exhibition spaces, there is scope to exploit the digital platform for marketing and exhibiting its films online.
Annual Report 2013–14
31
There is also an opportunity to have a Film Centre in Metros, a space for films beyond the cinema hall, where children and adults can learn more about the movies, find research material, meet young filmmakers, attend short courses on film appreciation or film editing, enjoy screenings of children’s films, see the best of regional and world cinema and discover new ways of approaching the study of Indian Film. NFDC is presently working on a project to build a Film Cultural Centre in Mumbai. Building audiences for good cinema is also an absolute necessity. Children in schools do not have access to good regional and world cinema. NFDC Film Club programme, which is in the offing, is targeted at school children, and will capitalize on students’ natural interest in cinema and use it as a tool to instill social and aspirational values, nation building, and as a medium of art. This programme will make good films accessible to all the school boards of India.
Threats Small-budget, non-star, independent films, find it difficult to reach its audiences due to low P&A and marketing budgets leading to low footfalls. For this reason distributers and exhibitors are not willing to give prime slots to these films, as they are not commercially viable. This is a real threat to NFDC films.
Internal Audit Reports are being reviewed by the Audit Committee on quarterly basis. Internal audit reports are also being reviewed by Statutory Auditors of the company appointed by the Comptroller and Auditor General of India. Books of Accounts are also being audited by the Comptroller and Auditor General of India.
Future Outlook As per FICCI-KPMG Report 2013, the CAGR of the Film Industry and the anticipated size of the industry are as under. As can be seen, theatrical revenues would continue to dominate the distribution sector and ancillary streams of revenue would continue to be dependent upon the returns from the theatrical box-office as is the case in present.
Future Outlook - Role of NFDC NFDC, from time to time, identifies need gaps in the film industry that requires attention and development in the areas so as to contribute to the overall growth of the industry. NFDC has thus increased its focus on the aspects of film development, film production, film marketing and distribution and film exhibition. Given the objectives stated above, NFDC proposes to include the following activities in its plans for the next five years:
Further, lack of development of audiences for alternative kinds of cinema makes distribution of such films an even bigger challenge for NFDC.
i.
NFDC will support films in Indian languages that aim at artistic excellence with a focus to present better quality films to more audiences across the country.
NFDC was nominated as an authorized agent to carry on business of Audio-Visual Publicity of Government Department / PSUs alongside DAVP by amending Electronic Media Policy of Ministry of Information and Broadcasting, Government of India. Any change in Policy would adversely affect the profitability of the company.
ii.
After successfully opening the Tagore Film Centre in Chennai, the focus is now to open a Film Cultural Centre in Mumbai. This Centre will aim to fulfill needs of educating adults and children about movies, find research material, meet young filmmakers, attend short courses on film appreciation or film editing, enjoy screenings of children’s films, see the best of regional and world cinema and discover new ways of approaching the study of Indian Film.
iii.
NFDC’s main objective is to build audiences by promoting films that act as a medium for value-based social change and dissemination of the cinematic art form in addition to entertainment. The Film Club programme that will come into action this year hopes to expose the students to the wealth and variety of cinema from India and across the globe.
iv.
With a fast growing internet user base of over 200 million internet users,
the potential of the industry to enhance engagement with audience and generate revenue from digital media is indeed vast. To exploit this platform the www.cinemasofindia.com - a pay per view Internet model – plans to showcase films by other talented Indian
Internal Control Systems and Their Adequacy The company has adequate internal control and Internal Audit System commensurate with its size and nature of business. The company has formulated various policies and procedures, as a part of Internal Control Systems, for orderly and efficient conduct of its business. The Management takes reasonable care and ensures safeguard of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records and timely preparation of reliable financial information. Internal control is being ensured through internal audit by independent firms of Chartered Accountants. The nominated firms conducts periodical Internal audits of regional / corporate office allotted to them. Additionally, the Company also commissions concurrent audit of its primary business activities of Feature Film Production, Non-Feature Film Production and Publicity assignment of various government departments through independent auditors.
32
Annual Report 2013–14
known as the Knowledge Series. Currently confined only to the Film Bazaar, NFDC intends to develop it into a yearround facility and make it available in different regions of the country.
filmmakers, in addition to the NFDC films, to give the film buffs a choice of good cinema.
v.
vi.
COI will upload and stream Indian films across geographical, social & cross-cultural barriers. The website is engineered to act as a carrier of Indian cinema in the global culture of film. The campaign aims to encourage and make available online to an audience, deserving Indian films.
vii.
To develop film-related talent by organizing internationallevel training workshops for film professionals in the spheres of script writing, film production management, film direction and international marketing and distribution. In addition to the existing in-house training programs being held by NFDC, more expansive training with leading names from the industry, Indian as well as global, will be conducted regularly.
India is a country full of diverse culture and landscapes, with each state has its own uniqueness and style. NFDC, to promote India as a film-shooting destination for filmmakers globally, has started consultation services for assisting State Government to formulate Film Policies. These policies will put systems into place and make processes easier for filmmakers and their unit to shoot film in that particular State.
Corporate Social Responsibility Due to accumulated and carried forward losses of Rs. 2585 lakhs as on March 31, 2014, the company is not incurring any expenditure on Corporate Social Responsibility. The Department of Public Enterprises vide their Office Memorandum forwarding minutes of MoU negotiations, exempted NFDC from undertaking any performance targets relating to Corporate Social Responsibility, sustainable development, and Research and Development, in view of its accumulated losses.
To promote a quality film culture by playing a greater role in film festivals and actively organizing seminars, workshops and screenings. NFDC also conducts a series of lectures, presentations and panel discussions on the various aspects of film production, development and distribution,
Size of the Indian Film Industry Industry performance Revenue
(` in Billion)
2011-12 2013p 2014p 2015p 2016p 2017p (YoY growth)
CAGR 20122017
2008
2009
2010
2011
2012
Domestic Theatrical
80.2
68.5
62.0
68.8
85.1
92.4
104.7
115.3
127.6
142.2
23.8%
10.8%
Overseas Theatrical
9.8
6.8
6.6
6.9
7.6
8.3
9.0
9.8
10.8
11.9
9.0%
9.4%
Home Video
3.8
4.3
2.3
2.0
1.7
1.4
1.2
1.1
1.0
0.9
-15.0%
-12.0%
Cable & Satellite Rights
7.1
6.3
8.3
10.5
12.6
14.1
16.2
19.1
22.8
27.3
20.0%
16.8%
Ancillary Revenue Streams
3.5
3.5
4.1
4.7
5.4
6.2
7.2
8.3
9.6
11.1
15.2%
15.5%
Total
104.4
89.3
83.3
92.9
112.4
122.4
138.3
153.6
171.7
193.3
21%
11.5%
Annual Report 2013–14
33
Report on Corporate Governance A Public Sector Enterprise of Government of India, NFDC follows the extant Guidelines on Corporate Governance issued by Department of Public Enterprises (DPE), Ministry of Heavy Industries and Public Enterprises, Government of India. A Brief report on Corporate Governance is given below:-
1. Company’s Philosophy On Code Of Corporate Governance. NFDC is committed to good Corporate Governances supported by appropriate transparent systems and practice to protect promote and safeguard the interests of all its stakeholders. NFDC is committed to act as a competitive, client-friendly and development-oriented organization for promotion of good cinema in the country and abroad. It is also committed to providing client friendly best services to all its customers in a transparent manner.
2. Board Of Directors a. Composition of Board The Board of Directors of NFDC comprises of Seven Members out of which Two are Functional Directors and Five are Directors of whom two are the nominees of the Government of India and three are Non-official Directors. The Directors bring to the Board wide range of experience knowledge and skills. The composition of the Board as on 31st March 2014 is as follows: Functional Directors Name of the Director
Designation
Nina Lath Gupta
Managing Director
Sahab Narain
Director (Finance)
Non Executive Directors Name of the Director
Designation
Raghvendra Singh
Government Nominee Director
Bharathi S. Sihag (w.e.f. 04.09.2013)
Government Nominee Director
Ramesh Sippy
Chairman & Non-official Director
A.K. Bir
Non-official Director
Jawahar Lal Wattal
Non-official Director
b. Other provisions as to Board and Committees
34
(i)
Details of Board Meeting held during the Financial Year 2013-14
During the Financial Year 2013-2014, six Board Meetings were held on i. e. on 30/04/2013, 30/05/2013, 12/07/2013, 20/10/2013, 27/11/2013 and 01/02/2014.
The Board has complete access to all the relevant information within the Company enabling Board of Directors and Committees thereof to take informed and efficient decision.
Annual Report 2013–14
(ii)
Details of Number of Board Meetings attended by Directors, attendance at last AGM number of other Directorship (in Public Limited Companies) / Committee Memberships held by directors during the year 2013-2014 are tabled below :-
Board Meeting Sr. No.
Name of Director
Designation
Held during the tenure
Attended
Attendances at Last AGM (held on 30.09.2013)
No. of other Directorships as on 31/3/2014
No. of other Committee Memberships as on 31/3/2014 As As Chairman Member
1
Ramesh Sippy
Chairman
6
5
No
5
3
Nil
2
Nina Lath Gupta
Managing Director
6
6
Yes
Nil
Nil
3
3
Sahab Narain
Director (Finance)
6
5
Yes
Nil
Nil
2
4
Jitendra Government Shankar Mathur Nominee Director
3
1
NA
Nil
Nil
1
5
Bharathi S. Sihag
Government Nominee Director
3
1
Yes
Nil
Nil
1
6
Raghvendra Singh
Government Nominee Director
6
3
Yes
Nil
Nil
2
7
A.K. Bir
Independent Director
6
6
NA
Nil
Nil
2
8
Jawahar Lal Wattal
Independent Director
6
1
NA
1
Nil
2
(iii)
None of the Directors on the board is a member of more than 10 Committees.
(iv)
Brief Profile of new Directors Smt. Bharathi S. Sihag was appointed as part-time Government Director with effect from 04.09.2013. She is working as Additional Secretary & Financial Advisor, Ministry of Information and Broadcasting.
(c) Code of Conduct The Company has prepared a policy on Code of Conduct for the Board members and Senior Management Personnel in alignment with Company’s mission and objectives and aims at enhancing ethical and transparent process in managing the affairs of the Company. Further the Company has formulated a policy on Fraud Prevention. Both the policies are in the process of approval by its Board of Directors.
3. Commitees of The Board of Directors 3.1 The Committees constituted by the Board are as follows:
• Audit Committee • Personnel Sub Committee • Remuneration Committee
Annual Report 2013–14
35
3.1.1 Audit Committee (i)
The composition of the Audit Committee as on 31st March 2014 is as under:
Sl. No
Name of the Director
Designation
Position in Committee
1
Ramesh Sippy
Independent Director
Chairman
2
Nina Lath Gupta
Managing Director
Member
3
Bharathi S. Sihag
Government Nominee Director
Member
4
A.K. Bir
Independent Director
Member
5
Jawahar Lal Wattal
Independent Director
Member
Director Finance, Internal Auditors and Statutory Auditors are standing invitees in the Audit Committee meetings. Senior functional executives are also invited as and when required to provide inputs to the Committee. (ii)
The terms of reference of the Audit Committee are as under:
(a) to comply with the requirements laid down in Section 292A of the Companies Act: (b) to take on record and /or to review unaudited/audited quarterly/half-yearly/annual financial statements of the CompanyDuring the year 2013-2014 four Audit Committee Meetings were held on 12.07.2013, 20.10.2013, 27.11.2013 and 01.02.2014. Meeting attended by individual members during the year 2013-2014 are detailed below:Sl. No
Name of the Director Designation
Position in the Committee
No. of Meeting held during their tenure
Meeting attended
1
Ramesh Sippy, Independent Director
Chairman
4
3
2
Nina Lath Gupta, Managing Director
Member
4
4
3
Jitendra Shankar Mathur, Government Nominee Director
Member
1
0
4
Bharathi S. Sihag, Government Nominee Director
Member
3
1
5
A.K. Bir, Independent Director
Member
4
4
6
Jawahar Lal Wattal, Independent Director
Member
4
0
3.1.2 Personnel Sub Committee The compositions of Personnel Sub Committee of Board of Directors as on 31st March 2014 are as follows: Sl. No
Name of the Director
Designation
Position in Committee
Independent Director
Chairman
1
Ramesh Sippy
2
Nina Lath Gupta
Managing Director
Member
3
Sahab Narain
Director (Finance)
Member
4
Raghvendra Singh
Government Nominee Director
Member
5
Jawahar Lal Wattal
Independent Director
Member
The terms of reference of the Personnel Sub Committee are as under: To consider the promotion of officers from Junior Officer up to the level of Deputy General Manager and Welfare issues and other policy matters related to personnel. During the year 2013-2014 no Personnel Sub Committee Meeting was held.
36
Annual Report 2013–14
3.1.3 Remuneration Committee: The composition of Remuneration Committee as on 31st March 2014 is as follows: Sl.No
Name of the Director
Designation
Position in Committee
Independent Director
Chairman
1
Ramesh Sippy
2
Nina Lath Gupta
Managing Director
Member
3
Sahab Narain
Director (Finance)
Member
4
Raghvendra Singh
Government Nominee Director
Member
5
A.K. Bir
Independent Director
Member
The terms of reference of the Remuneration Committee are as under: To decide the annual bonus/variable pay pool and policy for its distribution across the executives and non unionized supervisors within the prescribed limits. During the year 2013-2014, no Remuneration Committee Meeting was held. Ms. Nina Lath Gupta, Managing Director was paid a remuneration of Rs. 20,22,795/- and Shri Sahab Narain, Director (Finance) was paid a remuneration of Rs. 18,37,181/- for the F.Y. 2013-2014. None of the other directors were paid any remuneration during the financial year 2013-2014.
4. Annual General Meeting
No
Year
Location
Date & Time
Whether any special resolution passed
36th
2010-11 Registered Office 6th floor, Discovery of India Building, Nehru Centre, Dr .A. B .Road, Worli, Mumbai – 400 018
24.09.2011 2.00 AM
No
37th
2011-12 Registered Office 6th floor, Discovery of India Building, Nehru Centre, Dr .A. B .Road, Worli, Mumbai – 400 018
28.09.2012 11.00 AM
No
38th
2012-13 Registered Office 6th floor, Discovery of India Building, Nehru Centre, Dr .A. B. Road, Worli, Mumbai – 400 018
30.09.2013 11.00 AM
No
39th
2013-14 Registered Office 6th floor, Discovery of India Building, Nehru Centre, Dr .A. B. Road, Worli, Mumbai – 400 018
On or before 30.09.2014 during office hours
To be passed
5. Disclosures (i) (ii) (iii) (iv) (v)
There are no materially significant transactions with related parties i.e. promoters, directors or the management conflicting with the Company’s interest. The Company affirms that no personnel have been denied access to the Audit Committee. The Company has adopted suggested items to be included in the Report on Corporate Governance. There is no inter-se relationship between Directors of the Company. No penalties or strictures have been imposed on the company by any statutory authority, on any matter related to any guidelines issued by Government, during the last three years.
Annual Report 2013–14
37
Additional disclosures as required under the Guidelines on Corporate Governance for CPSEs issued by Department of Public enterprises: (i)
Items of expenditure debited in books of accounts, which are not for the purpose of business: NIL
(ii)
Expenses incurred which are personal in nature and incurred for the Board of Directors and Top Management: NIL
(iii)
Administrative and office expenses as a percentage of total expenses for the year 2013-2014 is 4.43% (Previous year 2.31%) and as a percentage of financial expenses for the year 2013-2014 is 4.46% (Previous year 2.32%)
(iv)
Information on adoption/non-adoption of non-mandatory requirements is given hereunder:
Non-mandatory Requirements i.
The Board : The Company is headed by a Managing Director. All the Independent Directors on the Board of the company were appointed for tenure of three years and none of the Independent Directors having/had tenure exceeding, in aggregate, a period of nine years.
ii.
Remuneration Committee: There was no Remuneration Committee of the Company in the Financial Year 2010-11. However in accordance with the directions of DPE the Board of NFDC has constituted a Remuneration Committee on 21.06.2011 to decide the annual bonus/variable pool and policy for its distribution across the executives and Non Unionized supervisors within the prescribed limits.
iii.
Shareholders Rights: As of now there is no system of sending half yearly financial performance including summary of the significant events in the last six months to each shareholder.
iv.
Audit Qualification: Auditors report annexed.
v.
Training to Board Member: It is need based.
vi.
Whistle Blower Policy: Policy for Prevention of Frauds” is being adopted by the Company, wherein a Whistle Blower mechanism is in place for detection, prevention and reporting of fraud. This policy applies to any fraud or suspected fraud involving employees as well as stakeholder, consultants, vendors, lenders, borrowers, contractors, outside agencies doing business with the Company, employees of such agencies, and/or any other parties with a business relationship with the Company.
6. Means of Communication The Company communicates with its shareholders through its Annual Reports, General Meeting and Disclosures through website. All important information pertaining to the Company is also mentioned in the Annual Report for each financial year containing inter alia Audited Accounts, Directors Report, Auditors Report which is circulated to the members and others entitled thereto.
38
Annual Report 2013–14
Auditors’ Certificate on Corporate Governance To, The Member National Film Development Corporation Limited. We have examined the compliance of condition of Corporate Governance by National Film Development Corporation Limited, (“the Company”) for the year ended 31st March 2014 as stipulated in Clause 8.2.1 of Guidelines on Corporate Governance issued by the Department of Public Enterprises for Central Public Sector Enterprises (CPSEs). The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limited to review of the procedures and implementation thereof, adopted by the company, for ensuring the compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion of financial statements of the Company. In our opinion and to the best of our information and according to the explanation given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 8.2.1 of Guidelines on Corporate governance issued by the Department of Public Enterprises for Central Public Sector Enterprises (CPSEs). We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For C.B. Chhajed & Co Chartered Accountants (FRN 101796W)
Date: 3rd September 2014 Place: Mumbai
C.P. Bhatia (Partner) Membership No. 045210
Annual Report 2013–14
39
Balance Sheet as at 31st March, 2014 (Amount in `)
Particulars
Notes
As at 31.03.2014
As at 31.03.2013
EQUITY AND LIABILITIES Shareholders’ Funds (a) Share Capital
3
45,39,98,500
45,39,98,500
(b) Reserves and Surplus
4
(25,82,80,786)
(22,62,16,363)
(a) Long Term Borrowings
5
90,78,689
–
(b) Trade Payables
6
6,74,99,495
3,75,26,503
(c) Other Long-Term Liabilities
7
9,34,20,435
17,16,39,273
(d) Long-Term Provisions
8
5,74,78,823
5,06,02,750
(a) Trade Payables
6
13,95,78,700
1,21,36,65,024
(b) Other Current Liabilities
9
1,03,44,29,493
1,02,01,98,851
Non-Current Liabilities
Current Liabilitis
(c) Short-Term Provisions
10 TOTAL
2,30,40,062
2,11,05,246
1,62,02,43,411
2,74,25,19,784
4,32,32,429
4,95,31,535
265
260
1,58,19,975
57,534
95,18,819
1,01,55,868
ASSETS Non-Current Assets (a) Fixed Assets Tangible Assets
11
Intangible Assets Capital Work-in-Progress (b) Long-Term Loans and Advances
12
(c) Cash and Bank Balances
15
–
15,95,21,784
(d) Trade Receivables
13
13,46,06,952
6,44,38,563
(a) Inventories
14
7,68,472
5,60,030
(b ) Trade Receivables
13
12,01,51,119
54,18,78,804
(c) Cash and Bank Balances
15
98,03,20,001
1,46,30,33,047
(d ) Short-Term Loans and Advances
16
29,42,32,301
43,09,50,504
(e) Other Current Assets
17
2,15,93,077
2,23,91,855
1,62,02,43,411
2,74,25,19,784
Current Assets
TOTAL Significant Accounting Policies
2
Notes 1 to 46 are integral part of Financial Statement As per our report of even date For C. B. CHHAJED & CO. Chartered Accountants (FRN 101796W)
Nina Lath Gupta Managing Director DIN No. : 00350722
C. P. Bhatia (Partner) M.No. 045210
Sahab Narain Director (Finance) DIN No. : 03641879
Place: Mumbai Dated: 1st July 2014
40
For and on behalf of Board of Directors
Annual Report 2013–14
E. J. Paul Company Secretary / Manager ( F & A) M.No. FCS 4521
Statement of Profit and Loss for the year ended 31st March, 2014 (Amount in `)
Particulars
Notes
Year 2013-14
Year 2012-13
INCOME Revenue from Operations
18
Other Income
19 TOTAL
1,16,61,35,987
2,38,64,91,814
10,31,95,084
12,58,68,375
1,26,93,31,071
2,51,23,60,189
EXPENSES Operating Expenditure
20
1,13,14,36,764
2,26,56,29,033
(Increase) / Decrease in Inventory
21
(2,08,442)
(3,90,324)
Employee Benefits Expenses
22
9,26,33,554
9,56,83,480
Other Expenses
23
5,71,18,834
5,61,83,279
Finance Cost
24
8,58,150
13,77,558
84,88,201
1,07,70,842
1,29,03,27,062
2,42,92,53,868
(2,09,95,990)
8,31,06,320
1,10,68,433
-
(3,20,64,423)
8,31,06,320
Current Tax
-
1,59,00,000
Deferred Tax
-
-
Tax Balances for Earlier Year Written Off
-
37,42,744
(3,20,64,423)
6,34,63,576
(1) Basic
(7.06)
13.98
(2) Diluted
(7.06)
13.98
Depreciation TOTAL PROFIT / (LOSS) BEFORE EXCEPTIONAL ITEMS AND TAX Exceptional Items
25
PROFIT / (LOSS) BEFORE TAX Less : Tax Expense
PROFIT / (LOSS) AFTER TAX Earnings Per Equity Share:
Significant Accounting Policies
2
Notes 1 to 46 are integral part of Financial Statement As per our report of even date
For and on behalf of Board of Directors
For C. B. CHHAJED & CO. Chartered Accountants (FRN 101796W)
Nina Lath Gupta Managing Director DIN No. : 00350722
C. P. Bhatia (Partner) M.No. 045210
Sahab Narain Director (Finance) DIN No. : 03641879
Place: Mumbai Dated: 1st July 2014
E. J. Paul Company Secretary / Manager ( F & A) M.No. FCS 4521
Annual Report 2013–14
41
Cash Flow Statement for the year ended 31st March, 2014 (Amount in `)
Particulars
Year 2013-14
Year 2012-13
I. Cash Flows from Operating Activities Net Profit Before Taxation And Extraordianry Items
(3,20,64,423)
8,31,06,320
Adjustments for Loss / (Profit) on Sale of Fixed Assets
(3,285)
24,20,912
Depreciation & Impairment
84,88,201
1,07,70,842
Provision for Gratuity
80,10,539
70,27,888
Provision for Leave Encashment
42,58,075
94,18,621
Provision for Doubtful Debts
8,05,064
18,44,910
Bad Debts Written off
9,18,906
30,67,842
1,10,68,433
–
Value Added Tax Written off
17,67,348
–
Credit Balance Written off
(1,46,157)
Service Tax Written off
Interest Income Interest Expenses
(8,50,54,469)
(10,45,15,176)
8,58,150
13,77,558
Total of (a) Operating Cash Profit Before Working Capital Changes
(4,90,29,194)
(6,85,86,603)
(8,10,93,617)
1,45,19,717
Adjustments for (Increase) / Decrease in Inventories
(2,08,442)
(3,90,065)
(Increase) / Decrease in Non-Current Sundry Debtors
(7,18,92,360)
(6,32,91,501)
(Increase) / Decrease in Current Sundry Debtors
42,17,27,685
18,75,25,316
(Increase) / Decrease in Long Term Loans & Advances
6,37,049
(3,69,227)
(Increase) / Decrease in Short Term Loans & Advances
11,56,99,959
(13,16,12,266)
Increase / (Decrease) in Non-Current Sundry Creditors
3,01,19,149
1,33,31,830
(1,07,40,86,324)
(6,27,50,716)
Increase / (Decrease) in Long Term Liabilities & Provision
(7,13,42,764)
7,38,62,136
Increase / (Decrease) in Short Term Liabilities & Provision
21,18,079
41,10,65,984
Increase / (Decrease) in Current Sundry Creditors
Total of (b)
(64,72,27,970)
42,73,71,491
Cash Generated from Operations
(72,83,21,586)
44,18,91,208
Income Tax (Paid) / Refund - Net
81,82,463
59,16,549
Cash Flows Before Extraordinary Item
(72,01,39,123)
44,78,07,757
Net Cash from Operating Activities (A)
(72,01,39,123)
44,78,07,757
II. Cash Flows from Investing Activities Capital Work In Progress Purchases of Fixed Assets Intangible Assets Sale of Fixed Assets Bank Deposit Interest Received Net Cash used in Investing Activities (B)
42
Annual Report 2013–14
(1,57,62,441)
4,81,795
(22,56,538)
(68,97,203)
(5)
(260)
70,727
18,39,246
33,64,68,460
(44,03,61,631)
8,58,53,247
9,03,52,721 40,43,73,450
(35,45,85,333)
Cash Flow Statement for the year ended 31st March, 2014 (Amount in `)
Particulars
Year 2013-14
Year 2012-13
III. Cash Flows from Financing Activities Long Term Borrowngs Interest Paid
1,07,49,066 (7,49,763)
Net Cash from Financing Activities ( C )
(13,77,558) 99,99,303
(13,77,558)
Net Increase in Cash and Cash Equivalents (A + B + C)
(30,57,66,370)
9,18,44,866
Opening Balance of Cash and Cash Equivalents
1,09,85,26,758
1,00,66,81,892
79,27,60,388
1,09,85,26,758
Closing Balance of Cash and Cash Equivalents Componant of Cash and Cash Equivalents Balances with Banks In Current Account Fixed Deposits with maturity of less than 3 months Cash on Hand Total Cash And Cash Equivalents (Note No.15) As per our report of even date
8,98,32,422 70,28,42,089
29,98,58,491 79,26,74,511
79,85,59,688
1,09,84,18,179
85,877
1,08,579
79,27,60,388
1,09,85,26,758
For and on behalf of Board of Directors
For C. B. CHHAJED & CO. Chartered Accountants (FRN 101796W)
Nina Lath Gupta Managing Director DIN No. : 00350722
C. P. Bhatia (Partner) M.No. 045210
Sahab Narain Director (Finance) DIN No. : 03641879
Place: Mumbai Dated: 1st July 2014
E. J. Paul Company Secretary / Manager ( F & A) M.No. FCS 4521
Annual Report 2013–14
43
Notes on Accounts Note: 1. Corporate Information National Film Development Corporation Limited (“the Company”) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956.The Company is engaged in production of various Indian language films, organizing film bazaar and international film festival in India as well as Abroad. The Company has its Head Office in Mumbai and Regional offices at New Delhi, Chennai and Kolkata.
charged to Statement of Profit & Loss. Where the film is completed but not ready for release during the year the entire cost of production/acquisition is shown as inventory. B.2
Cost of production of Indian Television serials/acquired programme and films purchased for TV rights are charged off in the financial year in which the first telecast of such films/serials take place or in the Financial Year, in which the rights expired, whichever is earlier.
The Company was set up with the objective to plan, promote and organize an integrated and efficient development of the film industry in accordance with the national economic policy and objectives laid down by the Central Government from time to time. Over the years, NFDC has funded/produced more than 300 films in eighteen Indian languages.
B.3
Rights in films for distribution through Television acquired by the Company wherein no telecast is made are accounted as advance to the extent of the amounts paid thereof. No provision is made for the unpaid acquisition price thereof, since actual liability shall arise only in the event of telecast as per terms of the agreement.
Note: 2. Significant Accounting Policies
B.4
Exploitation expenses in respect of co-production films Exploitation expenses in respect of co-production films are carried forward in the Balance Sheet to be recouped against future revenues earned from the exploitation over the period of twelve months from the date of exploitation. The amount of exploitation expenses which are not recouped within the period of twelve months are charged to Statement of Profit and Loss.
B.5
Income from Non-Performing Loans
Interest on loans for Films and Purchase of Equipments/ Constructions of Theatres is accrued and accounted in the income only to the extent equal to principal amount and no further credits are recognized thereafter unless the same is actually realized.
B.6
Revenue and Expense in respect of Media Campaigns released on behalf of various ministries / clients are recognized in the year in which the related advertisement or commercial spots are telecast / broadcast / appear before the public and in respect of which necessary intimation is received by the agency from the channel / theatre / website for successful telecast / broadcast. Campaigns commencing in a financial year and concluding in next financial year are recognized in the respective financial years on the basis of advertisement or commercial spots telecasted / broadcasted during that year.
B.7
Revenue and Expense in respect of Non-Feature Film undertaken during the year on behalf of various ministries / clients are not recognized until the goods have been formally accepted by the client or the client has done an act adopting the transaction.
A. Basis of Accounting and Use of Estimates. i.
ii.
Financial statements are prepared under the historical cost convention , on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with the provisions of Companies Act 1956, and comply with the mandatory Accounting Standards specified in Companies (Accounting Standard) Rules 2006, prescribed by the Central Government. The preparation of financial statements, in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the Revenue and Expenditure of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.
B. Recognition of Revenue and related expenses B.1
Amortization of cost of: Films, prints, TV rights, own production of films, taken over films and Corporation’s share in-
a) Indian co-production films b) Foreign Co-production films, is done by following, i.e.
B.1.1 Where the film is ready for release for exhibition on Commercial basis before the close of the financial year, the entire cost of production/acquisition of the films is
44
Annual Report 2013–14
B.8
Film Production in various Indian languages
The funds received from the Govt. of India for Film Production in various Indian languages and the expenditure incurred up to 31.03.2014 out of the same is shown on net basis under other long term liabilities on the liabilities side. The actual expenditure incurred on the film production in various Indian languages which are incomplete at the year end and to the extent certified by Chartered Accountants is shown as Inventory. The amount received and the expenditure incurred on production of respective films is shown as Income and Expenditure respectively when the Film is ready for release. The Company accounts for its income by way of Commission at 10% of the Cost of Production of such films when the film is ready for release.
C.8
Individual Assets purchased during the year costing upto Rs.5000/- are depreciated fully in the year of purchase.
C.9
Assets purchased for film production and other special project including festivals and markets is to depreciate @ 100%. In case of assets depreciated @ 100% a residual cost of Rs. 1/- is to maintain for physical counting purposes.
C.10
Completed films for which rights have not been sold out are valued at nominal value of Rs. 1/- each.
D. Impairment of Assets
C.1 Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation and impairment losses. Cost of acquisition or construction is inclusive of freight, duties, taxes, incidental expenses relating to acquisition, cost of installation/erection, attributable interest and financial cost till such time assets are ready for its intended use.
In accordance with Accounting Standard 28 (AS 28) on “ Impairment of Assets, where there is an indication of impairment of the Company’s assets, the carrying amounts of the Company’s assets are reviewed at each balance sheet date to determine whether there is any impairment based on internal/external factors. An impairment loss, if any, is recognized in the Statement of Profit & Loss, wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount of the assets is estimated at the higher of its net selling price and its value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss is further provided or reversed depending on changes in circumstances.
C.2
E. Foreign Currency Transactions
B.9
Income from Service projects is recognized on Accrual basis.
C. Fixed Assets & Depreciation
Depreciation on assets has been provided on the “Written Down Value” basis at the rates prescribed by Schedule XIV of the Companies Act, 1956 unless otherwise stated below.
C.3
Leasehold land is amortized over the period of lease.
C.4
Depreciation in respect of video cassettes recording equipment / telecine equipment, subtitling unit, 16 MM infrastructure and Laser sub-titling, video studio has been provided @ 10% on Straight line method.
C.5
Depreciation on the Avid Airplay and Special Effects Studio has been provided @ 25% on Straight Line Method considering the life span of the equipments.
Transactions in foreign exchange are accounted for at the date of transaction. Foreign currency monetary items of assets & liabilities are reported using exchange rates prevailing at the close of the year and exchange difference arising there from is charged/ credited to the Statement of Profit & Loss. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
F. Inventories
C.6
In case of Straight Line Method Depreciation is charged upto 95% of capitalized value.
C.7
Depreciation has been provided on pro-rata basis from the date of addition/upto the date of sale as the case may be.
F.1
Inventories include Unamortized cost of –
a) exploitations rights in imported films, b) Company’s share in foreign co-production films; films under production; Completed films; Stock of blank video cassettes, DVD’s and Gold.
Annual Report 2013–14
45
F.2
Inventory of video-cassettes and DVD’s have been valued at lower of cost and net realizable value, cost is determined as per FIFO method.
F.3
Gold is valued at historical cost.
every year is being notified by the Government. The Company has no obligation to make good the shortfall, if any between the return from the investment and the interest rate. (ii)
Defined Benefit Plan
G. Taxation Provision for current tax is made after taking into consideration benefit admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting “timing differences” between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.
H. Earning Per Share Earning Per equity share (Basic / Diluted) is calculated by dividing the Net Profit or (Loss) for the year attributable to Equity Shareholders (after deducting attributable taxes) by the weighted average number of Equity Shares outstanding during the year.
I. Employee Benefits (i)
Defined Contribution Plan
The Company’s Employee’s Provident Fund administered through Government Provident Fund and Labour Welfare Fund are considered as Defined Contribution Plans. The Company’s contributions paid / payable towards these defined contributions plan are recognized as expense in the Statement of Profit and Loss during the period in which the employee renders the related service. The interest rate payable by the said funds to the beneficiaries
46
Annual Report 2013–14
Company’s liabilities towards gratuity, long term compensated absences are considered as Defined Benefit Plans. The present value of the obligations under such Defined Benefit Plans are determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gains and losses are recognized immediately in the statement of profit and loss. The obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the balance sheet date on Government securities.
J. Leases Lease payments under operating lease are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.
K. Provisions and Contingencies Provisions are liabilities that can be measured only by using substantial degree of estimation. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent liability is disclosed in case of possible obligation where the probability of outflow of resources is not certain or where reliable estimate of the amount of obligation cannot be made.
Note: 3 Share Capital
(Amount in `)
As at 31 March 2014
Particulars
Number
As at 31 March 2013
Amount
Number
Amount
Authorised Equity Shares of 100/- each
45,40,000
45,40,00,000
45,40,000
45,40,00,000
45,39,985
45,39,98,500
45,39,985
45,39,98,500
45,39,985
45,39,98,500
45,39,985
45,39,98,500
45,39,985
45,39,98,500
45,39,985
45,39,98,500
Issued Equity Shares of 100/- each Subscribed & Paid up Equity Shares of 100 each fully paid Total
(Amount in `)
Equity Shares as on 31.03.2014
Particulars
Number Shares outstanding at the beginning of the year
Amount
Number
Amount
45,39,985
45,39,98,500
45,39,985
45,39,98,500
–
–
–
–
45,39,985
45,39,98,500
45,39,985
45,39,98,500
Allotment during the year Shares outstanding at the end of the year
Equity Shares as on 31.03.2013
Details of Shareholders holdng more than 5% of shareholding As at 31 March 2014
Name of Shareholder
No. of Shares held
President of India through Secretary Minstry of I&B, New Delhi
4539983
As at 31 March 2013
% of Holding 99.999956%
No. of Shares held 4539983
% of Holding 99.999956%
Of the above 28,40,000 Shares are alloted in conversion of Government Loan and interest accured theron into Share Capital. Terms / Rights attached to Equity Shares The Company has only one class of equity shares having par value of Rs. 100/- per share. The Company declare and pays dividend in Indian Rupees .
Note: 4 Reserves and Surplus
(Amount in `)
Particulars a. Capital Reserves
As at 31 March 2014
As at 31 March 2013
21,875
21,875
2,10,861
2,10,861
(22,64,49,099)
(28,99,12,675)
(3,20,64,423)
6,34,63,576
(25,85,13,522)
(22,64,49,099)
(25,82,80,786)
(22,62,16,363)
b. Other Reserves Special Reserve (Exports) c. Surplus Balance as per last financial statement (+) Net Profit/(Net Loss) for the current year Closing Balance Total
Annual Report 2013–14
47
Note: 5 Long Term Borrowings
(Amount in `)
Non-Current Particulars
As at 31 March 2014
Current
As at 31 March 2013
As at 31 March 2014
As at 31 March 2013
Secured Term Loan from Bank
90,78,689
–
16,70,377
–
–
–
16,70,377
–
90,78,689
–
–
–
Less : Amount disclosed under other current Liabilities (Note No.9) Total
a) Term loan was sanctioned from bank of Rs. 2,62,50,0000/- for construction of theater out of which Rs. 1,07,49,066/- was utilised during the year and carries interest @ 15.25% p.a. The said term loan is repayable 78 equal instalment of Rs. 336538/- plus interest starting from April 2014.
Note: 6 Trade Payables
(Amount in `)
Non-Current
Particulars
As at 31 March 2014
Trade Payable Total
Current
As at 31 March 2013
As at 31 March 2014
As at 31 March 2013
6,74,99,495
3,75,26,503
13,95,78,700
1,21,36,65,024
6,74,99,495
3,75,26,503
13,95,78,700
1,21,36,65,024
Note: 7 Other Long Term Liabilities
(Amount in `)
As at 31 March 2014
Particulars
As at 31 March 2013
A. Advance received from Ministry of Information and Broadcasting Received in Earlier Year
49,60,00,000
36,00,00,000
–
13,60,00,000
49,60,00,000
49,60,00,000
3,28,96,049
1,09,64,000
64,27,325
2,19,32,049
3,93,23,374
3,28,96,049
53,53,23,374
52,88,96,049
Less : Expensed During Current Year
12,85,48,190
11,34,53,966
: Expensed in Earlier Year
26,15,38,899
14,80,84,933
: Inventory of Regional Film
5,22,25,117
9,61,40,244
(B)
44,23,12,206
35,76,79,143
Balance ( A-B)
9,30,11,168
17,12,16,906
4,09,267
4,22,367
9,34,20,435
17,16,39,273
Received in Current Year
B. Add : Funds from Sale/Revenue Generation Ploughback In Earlier Year In Current Year
Total Fund available for Film Production
(A)
Total Fund Expensed for Film Production As allocated for various films Deposits Received Total
48
Annual Report 2013–14
Note: 8 Long Term Provisions
(Amount in `)
Particulars
As at 31 March 2014
As at 31 March 2013
Gratuity
3,23,24,546
2,58,20,000
Leave Encashment
2,51,54,277
2,47,82,750
5,74,78,823
5,06,02,750
Provision for Employee Benefits
Total
Note: 9 Other Current Liabilities
(Amount in `)
Particulars
As at 31 March 2014
As at 31 March 2013
Current maturities of Long Term Borrowing
16,70,377
–
Interest accured but not due on Borrowing
1,08,387
–
Advance from Customers
23,23,59,877
46,43,40,084
Advance for Production
69,55,74,548
34,22,06,109
4,69,48,577
5,11,83,876
Deposit received for rented Premises
55,46,400
53,24,400
Statutory Dues
62,94,088
12,02,62,603
Other Liabilities
4,59,27,239
3,68,81,779
1,03,44,29,493
1,02,01,98,851
As at 31 March 2014
As at 31 March 2013
Gratuity
34,59,937
20,95,199
Leave Encashment
36,80,125
31,10,047
1,59,00,000
1,59,00,000
2,30,40,062
2,11,05,246
Others Advances
Total
Note: 10 Short Term Provisions
(Amount in `)
Particulars (a) Provision for Employee Benefits
(b) Provision for Taxation For Income Tax Total
Annual Report 2013–14
49
50
Annual Report 2013–14
Leasehold Land
Building - 16 Mm
Building - Sub-Titling
Office Premises
Ownership Flats
VCR Equipments
16 MM Infra
Video Studio
Cinema Equipments (Exhib)
Cinema Equipments (Dist)
Office Equipments
Computers
Furniture & Fixture
Vehicles
Laser Studio
Electrical Fittings
Temprory Structure
Sound Studio
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
–
–
–
–
–
–
–
69,15,408
1,80,19,244
1,57,62,441
265
22,56,538
8,000
–
–
–
–
2,62,473
9,59,114
2,68,952
–
3,65,625
3,92,374
ADDITION
5,73,12,773
1,31,880
–
–
1,31,880
–
–
–
–
–
–
77,130
54,750
–
–
–
–
–
–
–
–
–
–
DEDUCTION
Gross Block [At Cost]
15,51,07,941
17,29,95,304
1,58,19,975
265
15,71,75,064
8,000
97,203
4,11,845
4,13,33,597
24,80,215
2,97,69,547
1,23,25,662
1,39,70,667
65,953
72,55,029
3,70,53,298
61,578
11,76,377
4,08,885
94,80,435
5,66,286
5,72,487
1,38,000
AS AT 31.03.2014
14,73,00,646
10,55,18,872
–
–
10,55,18,872
–
97,203
98,990
3,98,99,398
12,75,348
95,11,898
79,65,860
47,74,986
65,841
29,92,544
3,07,76,445
56,028
8,66,390
3,18,510
57,63,873
4,38,046
5,72,486
45,026
UPTO 01.04.2013
5,25,52,615
64,438
–
–
64,438
–
–
–
–
–
–
52,002
12,436
–
–
–
–
–
–
–
–
–
–
DEDUCTION
1,07,70,842
84,88,201
–
–
84,88,201
571
–
43,518
72,083
3,11,940
36,64,264
15,07,229
12,71,210
22
7,93,596
5,56,315
703
68,538
4,519
1,85,828
6,412
–
1,453
FOR THE YEAR
Depreciation
Notes The period of Leasehold Building 16MM has expired and the Corporation continue to use the same . Therefore this assets is shown at Re.1 in the Net Block
20,55,05,307
Previous Year
57,534
15,51,07,941
Capital WIP
C
–
15,50,50,407
–
97,203
4,11,845
4,13,33,597
24,80,215
2,95,07,074
1,14,43,678
1,37,56,465
65,953
68,89,404
3,66,60,924
61,578
11,76,377
4,08,885
94,80,435
5,66,286
5,72,487
1,38,000
AS AT 01.04.2013
Total
Intangible Asset
B
Total
Tangible Asset
Particulars
A
Sr. No.
Note No. 11 : Fixed Assets and Depreciation
10,55,18,872
11,39,42,635
–
–
11,39,42,635
571
97,203
1,42,508
3,99,71,481
15,87,288
1,31,76,162
94,21,087
60,33,759
65,863
37,86,140
3,13,32,760
56,731
9,34,928
3,23,028
59,49,701
4,44,458
5,72,486
46,479
TOTAL UPTO 31.03.2014
4,95,89,069
5,90,52,669
1,58,19,975
265
4,32,32,429
7,429
–
2,69,337
13,62,116
8,92,927
1,65,93,385
29,04,575
79,36,908
90
34,68,889
57,20,537
4,847
2,41,449
85,857
35,30,734
1,21,828
1
91,521
AS AT 31.03.2014
5,82,04,660
4,95,89,328
57,534
260
4,95,31,534
–
–
3,12,855
14,34,199
12,04,867
1,99,95,176
34,77,818
89,81,479
112
38,96,860
58,84,479
5,550
3,09,987
90,375
37,16,562
1,28,241
1
92,974
AS AT 31.03.2013
Net Block
(Amount in `)
Note: 12 Long Term Loans and Advances Particulars
(Amount in `)
As at 31 March 2014
As at 31 March 2013
1) Loans and advances to Staff Unsecured, Considered Good,
2,95,671
2,95,671
7,66,030
7,66,030
2) Loans for Production of Films Doubtful
1,44,02,720
Less : Provision for doubtful loans
1,44,02,720
1,44,02,720 –
1,44,02,720
–
3) Loans for Construction of Theatres Doubtful
2,98,703
Less : Provision for doubtful loans
2,98,703
2,98,703 –
2,98,703
–
4) Deposits Unsecured, Considered Good
92,23,148
93,89,838
Considered Doubtful
31,230
31,230
Less : Provision for Doubtful Deposits
31,230
92,23,148
Total
31,230
93,89,838
95,18,819
1,01,55,868
Note: 13 Trade Receivables
(Amount in `)
Non-Current Particulars
As at 31 March 2014
Current
As at 31 March 2013
As at 31 March 2014
As at 31 March 2013
Unsecured a) Trade Receivables outstanding more than six months Considered Good
13,46,06,952
6,44,38,563
1,78,14,343
2,21,56,615
Considered Doubtful
20,35,20,983
20,54,28,425
–
–
33,81,27,935
26,98,66,988
1,78,14,343
2,21,56,615
20,35,20,983
20,54,28,425
–
–
13,46,06,952
6,44,38,563
1,78,14,343
2,21,56,615
–
–
10,23,36,776
51,97,22,189
13,46,06,952
6,44,38,563
12,01,51,119
54,18,78,804
Less: Provision for Doubtful Debts
b) Others Considered Good Total
As the due date of collection has not been defined hence bill date is considered as due date.
Note: 14 Inventories
(Amount in `)
Particulars
As at 31 March 2014
As at 31 March 2013
Stock of Blank Video Cassettes
1,06,238
1,06,238
Stock of DVD
6,60,295
4,51,853
1,938
1,938
7,68,472
5,60,030
Finished Goods
Gold Total
Annual Report 2013–14
51
Note: 15 Cash and Bank Balances
(Amount in `)
Non-Current Particulars
As at 31 March 2014
Current
As at 31 March 2013
As at 31 March 2014
As at 31 March 2013
1. Cash and Cash Equivalent a) Balances with Banks In Current Account
–
–
8,98,32,422
29,98,58,491
Fixed Deposits with maturity of
–
–
70,28,42,089
79,85,59,688
–
–
85,877
1,08,579
–
–
79,27,60,388
1,09,85,26,758
–
–
18,67,69,040
36,37,76,616
–
15,95,21,784
–
–
–
–
7,90,573
7,29,673
Sub Total
–
15,95,21,784
18,75,59,613
36,45,06,289
Total
–
15,95,21,784
98,03,20,001
1,46,30,33,047
less than 3 months b) Cash on Hand Sub Total 2. Other Bank Balance a) Balances with Banks Fixed Deposits with maturity for more than 3 months but less than 12 months b) Fixed Deposits with maturity for more than 12 months c) Fixed deposits with banks as security against borrowings
Note: 16 Short Term Loans and Advances
(Amount in `)
Particulars
As at 31 March 2014
As at 31 March 2013
5,49,592
2,22,159
1) Loans and advances to Staff Unsecured, Considered Good
5,49,592
2,22,159
2) Advances recoverable in cash or kind for value to be received Unsecured, Considered Good
3,33,88,044
3,99,53,545
Considered Doubtful
12,18,000
12,18,000
Less: Provision for Doubtful Loans
12,18,000
Service Tax Receivable VAT Receivable Advance Payment of Tax
3,33,88,044
12,18,000
16,77,82,013
28,75,67,533
22,66,760
47,78,913
3,99,53,545
9,01,43,959
26,01,92,732
9,83,26,422
39,06,72,868
1,01,932
1,01,932
1,01,932
1,01,932
3) Advances for Own Production of Films Unsecured, Considered Good Total
52
Annual Report 2013–14
29,42,32,300
43,09,50,504
Note: 17 Other Current Assets
(Amount in `)
Particulars
As at 31 March 2014
Interest Accured on Fixed Deposit Total
As at 31 March 2013
2,15,93,077
2,23,91,855
2,15,93,077
2,23,91,855
Note: 18 Revenue From Operation Particulars
(Amount in `)
Year 2013-14
Year 2012-13
Feature Film Production
12,82,43,518
11,34,53,967
Non Feature Film Production
27,56,38,310
31,17,61,863
Media Campaign
64,10,55,920
1,74,42,46,809
Distribution of Films Overseas
1,66,31,153
Domestic
3,33,67,332
87,96,882 4,99,98,485
4,84,97,139
5,72,94,021
Service Projects Sub-titling Hiring of Equipments Workshop / Market / Film Bazaar Training / Workshop Service Project Income Preview Theatre Total
11,99,969
87,62,382
31,948
11,96,123
4,14,31,097
14,08,46,627
75,23,913
19,39,568
1,38,25,678
–
71,87,150
69,90,455
1,16,61,35,987
2,38,64,91,814
Note: 19 Other Income
(Amount in `)
Particulars
Year 2013-14
Rent from Office Premises
Year 2012-13
1,08,64,876
1,06,29,604
9,228
18,211
46,57,729
50,86,471
8,50,54,469
10,40,17,252
Interest on Savings Bank
3,32,739
4,97,924
Other Income
3,61,926
4,29,177
Prior Period Items
3,21,526
17,73,907
3,285
–
14,43,148
4,06,873
1,46,157
30,08,955
10,31,95,084
12,58,68,375
Interest on Staff Advance Interest on Tax Refund Interest on Bank Fixed Deposit
Profit on Sale of Assets Profit on Foreign Exchange Fluctuations Credit Balances Written Back Total
Annual Report 2013–14
53
Note: 20 Operating Expenditure
(Amount in `)
Particulars
Year 2013-14
Year 2012-13
Feature Film Production
11,72,28,764
10,57,27,698
Non Feature Film Production
22,84,27,296
26,45,69,361
Media Campaign
64,01,95,187
1,72,76,62,397
Distribution of Films Overseas
1,24,86,805
Domestic
4,00,52,066
53,58,674 5,25,38,870
2,86,26,612
3,39,85,286
Service Projects Sub-titling
1,69,897
26,78,904
3,100
3,72,382
7,80,97,214
12,91,00,562
Training / Workshop
29,14,908
–
Training & Development
43,87,285
–
Service Project Expenses
60,61,602
–
Preview Theatre
14,12,642
15,32,443
1,13,14,36,764
2,26,56,29,033
Hiring of Equipments Workshop/Market/Film Bazaar
Total
Note: 21 (Increase) / Decrease In Inventories Particulars
(Amount in `)
Year 2013-14
(Increase) / Decrease Year 2013-14
Year 2012-13
(Increase) / Decrease Year 2012-13
Stock of DVD
6,60,295
4,51,853
(2,08,442)
(4,51,853)
Stock of Blank Video Cassettes
1,06,238
1,06,238
–
61,529
7,66,534
5,58,091
(2,08,442)
(3,90,324)
Total
Note: 22 Employee Benefit Expenses
(Amount in `)
Particulars
Year 2013-14
Salaries, Wages and Bonus
Year 2012-13
7,44,48,813
7,34,48,688
51,35,129
46,31,682
54,400
52,902
Leave Encashment
42,58,075
94,18,621
Gratuity
80,10,539
70,27,888
7,26,598
11,03,698
9,26,33,554
9,56,83,480
Contributions to Provident Fund Contributions to Other Fund
Staff Welfare Expenses Total
54
Annual Report 2013–14
Note: 23 Other Expenses
(Amount in `)
Particulars
Year 2013–14
Year 2012–13
Year 2013–14
Advertisement and Publicity
Year 2012–13
34,423
3,21,000
Auditors Remuneration
4,50,000
4,50,000
Bank Charges
1,18,690
87,789
9,18,906
30,67,842
5,95,878
12,34,506
Director's Travelling Expenses
22,24,223
28,77,621
Electricity Charges
32,57,647
26,34,476
10,500
–
2,87,819
4,58,184
27,44,979
13,97,543
–
24,20,912
Office General Expenses
33,20,869
25,01,729
Postage,Telgrams, Telex and Telephone Expenses
26,98,683
27,93,200
Printing & Stationery
15,04,794
13,52,530
Professional Charges
82,21,778
78,43,356
8,05,064
18,44,910
52,68,698
27,45,574
1,06,27,516
98,28,081
Repairs & Maintenance
40,26,249
32,03,153
Security Srevices Charges
15,00,646
11,10,604
9,009
12,43,677
Travelling and Local Conveyance Expenses
66,39,418
67,51,166
Value Added Tax Written Off
17,67,348
–
85,698
15,427
5,71,18,834
5,61,83,279
Bad Debts Written Off
36,31,413
88,70,052
Less : Provision for Doubtful Debts Utilised
27,12,506
58,02,210
Corporate Entertainment
Filing Fees Insurance Legal Expenses Loss on Sale of Assets
Provision for Doubtful Debts/Loan/Advance Rates & Taxes Rent Paid
Servce Tax Paid
CST/VAT Paid Total
(Amount in `)
Payments to the Auditor
Year 2013-14
Year 2012-13
for Audit Fees
3,50,000
3,50,000
for Tax Audit Fees
1,00,000
1,00,000
4,50,000
4,50,000
Total
Annual Report 2013–14
55
Note: 24 Finance Cost
(Amount in `)
Particulars
Year 2013-14
Interest Expense Total
Year 2012-13
8,58,150
13,77,558
8,58,150
13,77,558
Note: 25 Exceptional Items
(Amount in `)
Particulars
Year 2013-14
Service Tax Written Off Total
1,10,68,433
–
1,10,68,433
–
Note: 26. Contingent Liabilities not provided for Sr. No.
Year 2012-13
(Amount in `)
Particulars
Year 2013-14
1.
Bank Guarantees
2.
Legal cases against the Company.
3.
Claim against Company for increase in rental for the premises not acknowledge as debts pending in Civil Court.
4.
Year 2012-13
4,95,000
4,95,000
6,36,96,811
5,98,77,811
10,38,080
10,38,080
Balance salary payable to Senior General Manager, suspended earlier on the charges of mis-representation of facts and impounding of documents.
8,46,016
8,46,016
5.
Income Tax demand for the assessment year 2006-07 as per Order u/s 154 of the Income Tax Act 1961
99,54,320
–
6.
Income Tax demand for the assessment year 2011-12 as per Order u/s 156 of the Income Tax Act 1961
19,30,850
–
7,79,61,077
6,22,56,907
Total:
Note: 27 The balances in Sundry Debtors, Loans and Advances, Deposits and Current Liabilities including outstanding balances since last few years are subject to confirmation and consequential adjustment, if any on reconciliation. The financial impact, if any, is unascertainable.
Note: 28.1 Provision for Bad and Doubtful Debts During the year provision for bad and doubtful debts of Rs. 8,05,064/- (Previous year Rs. 18,44,910/-) has been made towards Sundry Debtors and Loans and Advances. Provision of Rs. 27,12,506/- (Previous year Rs. 58,02,210/-) towards bad and doubtful debts has been utilized for the bad debts during the year.
Note: 28.2 Service Tax Written off Service Tax balances of earlier years has been written off to the extent of Rs 1,10,68,433/- to match with the closing balances as per the service tax return. This activity has been carried out for reconciliation of old balances appearing in books of account.
Note: 28.3 Creditors Written Back The management of the Company has decided to write off creditors in cases were there is no likelihood of liability arising. Accordingly during the year creditors amounting to Rs. 1,46,157/- (Previous year Rs. 30,08,955/-) have been written back.
56
Annual Report 2013–14
Note: 29 Employee Benefits Valued as per Actuarial valuation using Projected Unit Credit Method
(i) Expense recognized in the Statement of Profit & Loss Account
(Amount in `)
Gratuity (Funded)
Gratuity (Funded)
Gratuity (Funded)
Leave Encashment (Unfunded)
March 31, 2014
March 31, 2013
March 31, 2012
March 31, 2014
March 31, 2013
March 31, 2012
Current Service Cost
13,06,430
9,49,173
8,40,575
8,35,326
5,48,332
23,87,042
Interest Cost
24,30,901
18,52,691
14,53,007
22,31,424
16,34,074
14,27,709
Expected Return on Plan Assets
(2,14,983)
(1,99,741)
(97,707)
–
–
–
Net Actuarial (Gains) / Losses
44,88,191
44,25,765
27,02,464
11,91,324
14,58,932
(4,46,228)
Past Service Cost
–
–
–
–
57,77,283
–
Difference in Opening
–
–
(9,31,579)
–
–
–
80,10,539
70,27,888
39,66,742
42,58,074
94,18,621
33,68,523*
Description
Total
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
(ii) Net Assets / (Liability) recognized in the Balance Sheet
Description
(Amount in `)
Gratuity (Funded)
Gratuity (Funded)
Gratuity (Funded)
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
March 31, 2014
March 31, 2013
March 31, 2012
March 31, 2014
March 31, 2013
March 31, 2012
Present Value of Defined Obligation
3,68,93,004
3,03,86,263
2,31,58,634
2,88,34,402
2,78,92,797
1,92,24,405
Fair Value of Plan Assets
11,08,521
24,71,064
13,56,296
–
–
–
Funded Status [Surplus /(Deficit)]
–
–
–
–
–
–
(3,57,84,483)
(2,79,15,199)
(2,18,02,338)
(2,88,34,402)
(2,78,92,797)
(1,92,24,405)
Net Asset / (Liability)
Annual Report 2013–14
57
(iii) Change in Obligation during the year
(Amount in `)
Gratuity (Funded)
Gratuity (Funded)
Gratuity (Funded)
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
March 31, 2014
March 31, 2013
March 31, 2012
March 31, 2014
March 31, 2013
March 31, 2012
3,03,86,263
2,31,58,634
1,81,62,588
2,78,92,797
1,92,24,405
1,65,70,488
–
–
–
–
57,77,283
–
Current Service Cost
13,06,430
9,49,173
8,40,575
8,35,326
5,48,332
23,87,042
Interest Cost
24,30,901
18,52,691
14,53,007
22,31,424
16,34,074
14,27,709
Actuarial (Gains) / Losses
44,60,968
44,25,765
27,02,464
11,91,324
14,58,932
(4,46,228)
Benefit Payments
(16,91,558)
–
–
(33,16,469)
(7,50,229)
(7,14,605)
Present Value of the Defined Benefit obligation at the end of the year
3,68,93,004
3,03,86,263
2,31,58,634
2,88,34,402
2,78,92,797
1,92,24,405
Description
Present Value of the Defined Benefit Obligation at the beginning of the Year Past Service Cost
(iv) Change in Assets during the year Description
Gratuity (Funded)
(Amount in `)
Gratuity (Funded)
Leave Encashment (Unfunded)
Gratuity (Funded)
March 31, 2014 March 31, 2013 March 31, 2012 March 31, 2014
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
March 31, 2013
March 31, 2012
Fair Value of Plan Assets at the beginning of the Year
24,71,064
13,56,296
3,49,611
–
–
–
Expected Return on Plan Assets
2,14,983
1,99,741
97,707
–
–
–
Contribution by Employer
1,41,255
9,15,027
9,08,978
–
–
–
(16,91,558)
–
–
–
–
–
(27,223)
–
–
–
–
–
11,08,521
24,71,064
13,56,296
–
–
–
Actual Benefits Paid Actuarial Gains/(Losses) on Plan Assets Fair Value of Plan Assets at the year end
58
Annual Report 2013–14
(v) Actuarial Assumptions Description
Gratuity (Funded)
Gratuity (Funded)
Gratuity (Funded)
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
Leave Encashment (Unfunded)
March 31, 2014
March 31, 2013
March 31, 2012
March 31, 2014
March 31, 2013
March 31, 2012
Discount Rate
9.03%
8.00%
8.00%
9.03%
8.50%
8.50%
Rate of Return on Plan Assets
8.70%
9.00%
5.00%
–
–
–
Salary Escalation Rate
7.00%
5.00%
5.00%
7.00%
7.00%
7.00%
Financial Year 2010-11 actuarial data is not available . *Including Leave Benefit availed during the year which is accounted in Salary paid during the year. a) b)
The estimates of future salary increases considered in actuarial valuation takes into account the inflation rate on Long term basis. The employees of the company retire at the age of 60 years as per the policy of the Company.
Note: 30 Ministry of Information and Broadcasting entrusted NFDC to execute its scheme of “Production of films in various Indian languages” under its planned scheme of main secretariat. Under the scheme an amount of Rs. 49.60 Crore was received upto 31st March 2013. Revenue generated an amount of Rs. 64,27,325/during the year (Previous Year Rs. 219,32,049/-) is ploughed back by Company in the sustaining scheme. The Company, out of above funds received, commissioned 29 films in various Indian languages. Out of 29 films, 5 films were completed during the year. The Company has expensed out of Rs.11,65,85,015/- during the year (Previous year Rs. 10,31,39,969/-) from the amount received on the basis of CA certificate and actual amount incurred by the Company. An amount of Rs.12,82,43,518/- (Previous year Rs.11,34,53,967/-) is recognized as revenue in Statement of Profit & Loss Account.
current year in respect of six film completed during the year and Rs.11,34,234/- (Previous year Rs.38,70,362/-) as commission on sale of films which is included in Distribution of films.
Note: 32 Revenue recognition for Media Releases, Revenue and Expense of respective Media Campaign undertaken during the year is accounted for after due verification /certification by a Chartered Accountant of the actual value of telecast /broadcast/appearance of the advertisement out of the Release amounts approved by the client / ministry. Revenue and Expenses in respect of media campaigns for which verification/certification of the actual value of successful telecast /broadcast/appearance of advertisement is in process, are accounted for on the basis of Release amounts of the respective campaign, after taking effect of estimated shortfall of 15% in telecast / broadcast /appearance of advertisements.
Note: 33 The expenditure incurred on films which are in progress, to the extent certified by CA amounting to Rs.5,22,25,117/- (Previous year Rs.9,61,40,244/-) is shown as an Inventory. The amount of fund received under the plan scheme and the balance amount of Rs. 9,30,11,168/- (Previous year Rs.17,12,16,906/-) is shown as Other long term liabilities.
In the opinion of the Board, the current assets, loans and advances have been stated at amounts that would be realized in the ordinary course of business. The provision of depreciation and for all known liabilities is adequate and not in excess of amounts considered reasonably necessary.
Note: 31
Note: 34
The Board of Directors in their meeting held on 15th September 2009, considered the letter No.202/21/2009–F(PSU) dated 06/08/09 received from the Ministry of Information & Broadcasting and was of the view that NFDC should be given a Producer Fee of 10% of the total cost of production of a film and 15% Commission on all sales effected by it in accordance with industry norms. Accordingly the Company has accounted for Rs. 1,16,58,502/(Previous year Rs.1,03,13,997/-) as Producer Fees in the
The Company has not received any intimation from Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid or payable as required under the said Act have not been given. Sundry creditors at the year end are subject to confirmation from the respective parties. The Company has provided for all known liabilities as on the Balance Sheet Date.
Annual Report 2013–14
59
Note: 35 The Company participated in various film festivals in India and Abroad on behalf of the Ministry of Information & Broadcasting and the Ministry of Tourism. Rs.2,71,00,000/- (Previous year Rs.5,76,11,472/-) was sanctioned by the Ministry of Information & Broadcasting and Rs. NIL/- (Previous year Rs. 4,67,28,609/-) by the Ministry of Tourism. The Company has spent an amount of Rs.2,86,80,938/- (Previous Year Rs.11,87,80,956/-) on the various items of expenditure as per Chartered Accountants Certificate.
Note: 36 During the year, the company started a Training and Development division called framework of professional development for Indian filmmakers already established in the work-field or developing their careers following films and /or media studies. The company organized 12 such workshops and trained 67 professionals. An amount of Rs 43,87,285/- spent on this activity (Previous Year Nil).
Note: 37 Deposits of Rs.30,00,000/- (Previous Year 30,00,000/-) placed with three parties in 1991 are secured against mortgage of immovable properties. The parties have not refunded the deposits
and securities are also not liquidated. The Company has initiated arbitration proceedings against the parties for recovery of the deposits. Awards have been issued in favour of the Company against two parties for recovery of the deposit amounting to Rs.18,00,000/- (Previous Year 18,00,000/-) for the balance amount of Rs.12,00,000/- (Previous Year Rs.12,00,000/-) the arbitration proceedings are still continuing. No provision has been made for the same in the books of accounts.
Note: 38 In case of Film ‘Gandhi’ the accounting of profits and distribution fee has been done on accrual basis except that these are accounted on calendar year basis instead of financial year basis. The fees and distribution fees are accounted based on statement of accounts received from the agents appointed under the agreement which are prepared on calendar year basis. The Company has ensured that the fees receivable are considered for the entire year on calendar year basis instead of financial year basis.
Note: 39 The recoverability of TV marketing debtors against which the Company has filed cases in the court of law is not certain. The impact of the outcome arising out of the legal cases on the financial statement is not ascertainable
Note: 40 Deferred Tax Assets (Net) Particulars
(Amount in `)
As at March 31, 2014
As at March 31, 2013
Rs.
Rs.
Deferred tax Assets arising on account of timing difference due to : Depreciation
3,158,129
3,203,475
Provision for Employee Benefits
20,965,598
18,106,904
Provision for Doubtful debts / loans
70,812,392
71,431,262
Brought forward Losses
37,635,604
37,635,604
Net deferred tax assets
132,571,723
130,377,245
In the absence of virtual certainty supported by convincing evidence that future taxable profit will be available to get setoff of carried forward business loss, deferred tax assets on carried forward business loss has not been recognized
60
Annual Report 2013–14
Note: 41 Related Party Disclosures Reporting Enterprise: National Film Development Corporation Ltd. Key Management Personnel: a. Ms. Nina Lath Gupta (Managing Director) b. Mr. Sahab Narain (Director Finance) Transactions with the Related Parties as required by AS -18 is given below:
Key Management Personnel Name of the Director
(Amount in `)
Amount (Rs.) 2013-2014
Amount (Rs.) 2012-2013
Designation
Nature of Transaction
Nina Lath Gupta
Managing Director
Remuneration
20,22,795/-
19,15,248/-
Sahab Narain
Director (Finance)
Remuneration
18,37,181/-
16,58,520/-
Note: 42 Earnings per Share
(Amount in `)
Particulars Net Profit / (Loss) attributable to Equity Shareholders
2013-2014
2012-2013
(3,20,64,423)
6,34,63,576
Weighted Average No. of Equity Shares for Basic (EPS)
45,39,985
45,39,985
Weighted Average No. of Equity Shares for Diluted (EPS)
45,39,985
45,39,985
Nominal Value of Share
100.00
100.00
Equity Per Share – Basic
(7.06)
13.98
Earnings Per Share – Diluted
(7.06)
13.98
Note: 43 Particulars of Directors Remuneration Particulars Managing Director – Remuneration – Contribution to EPF Director (Finance) – Remuneration – Contribution to EPF
(Amount in `)
2013-2014 18,59,487/-
2012-2013 16,51,017/-
1,63,308/-
2,64,231/-
16,87,290/-
15,27,780/-
1,49,891/-
1,30,740/-
Annual Report 2013–14
61
62
5,82,25,768
Operation Profit/(Loss)
37,06,78,032 5,24,37,417 – 25,93,548 – –
– 1,13,14,36,764 13,81,02,749 8,58,150 84,88,201 14,97,52,388 –
–
7,249
Total Capital Expenditure
Depreciation
Non cash expense other than depreciation
Total Depreciation
–
7,249
–
–
Other
Other
–
83,78,57,146
Capital Expenditure
Total Liabilities
–
83,78,57,146
Segment Liablities
Unallocated Corporate Liabilities
23,19,62,684
Total Assets
–
23,19,62,684
–
–
–
–
–
–
3,90,30,062
–
3,90,30,062
6,65,66,930
–
6,65,66,930
–
–
–
–
1,57,64,130
–
1,57,64,130
–
–
–
–
–
–
1,61,67,737 36,75,95,490
–
–
–
–
84,80,952
84,80,952
55,845
5,819
84,88,201
–
–
–
–
5,819
84,88,201
–
– –
1,01,758
1,01,758
1,58,19,975
1,58,19,975
44,71,01,415
16,38,75,263 1,42,45,25,698 55,845
–
44,71,01,415
Media Campaign
–
–
–
2,37,09,505
–
2,37,09,505
–
–
–
–
2,37,09,505
–
–
–
–
–
–
–
–
3,83,42,793
–
3,83,42,793
–
–
–
–
–
–
–
–
–
(5,85,50,473)
33,588
(5,85,84,060)
1,59,00,000
15,94,98,767
1,07,65,023
7,12,934
12,82,92,664
–
6,34,63,576
6,05,665
6,28,57,911
1,59,00,000
15,94,98,767
1,33,58,571
7,12,934
25,23,28,183
– 2,26,48,19,630
12,82,92,664 2,51,71,47,813
–
–
–
–
–
–
–
–
–
–
–
–
–
1,07,65,023
–
1,07,65,023
77,72,032
–
77,72,032
-
1,07,70,842
–
1,07,70,842
78,73,790
–
78,73,790
40,06,61,056 2,06,94,10,486
–
40,06,61,056 2,06,94,10,486
12,24,64,701 1,70,35,16,481 2,29,39,80,993
–
36,87,296 1,17,96,17,926
–
Total
12,82,92,664 2,51,71,47,813
Other
(Amount in `)
12,24,64,701 1,70,35,16,481 2,29,39,80,993
–
2,22,68,086
5,72,078
2,16,96,008
–
–
–
–
2,16,96,008
36,87,296 1,17,96,17,926
2,35,22,359
–
2,35,22,359
–
2,61,92,589
–
2,61,92,589
–
–
–
–
2,61,92,589
3,39,81,882 13,37,40,251 1,72,64,19,466
5,76,91,387 15,99,32,840 1,74,81,15,474
–
21,69,47,418 22,75,30,034
–
–
–
16,38,75,263 1,42,45,25,698
8,96,77,340 1,18,23,68,451 1,62,02,43,411
–
1,61,67,737 36,75,95,490
4,96,68,005
–
4,96,68,005
Service Project
2012-13
5,76,91,387 15,99,32,840 1,74,81,15,474
Film Distribution
21,69,47,418 22,75,30,034
8,96,77,340 1,18,23,68,451 1,62,02,43,411
Unallocated Corporate Assets
Segment Assets
(6,69,64,839)
1,10,68,433 –
8,60,733
– –
(2,18,46,892)
–
Other information
(23,31,944)
– 4,98,43,869
(5,58,96,406)
–
14,97,52,388
84,80,952
8,58,150
10,31,95,084
(3,20,64,423)
5,82,18,519
Net Profit /(Loss)
8,60,733
–
–
–
–
8,60,733
42,31,15,448
10,31,95,084 1,26,95,39,513
–
(2,18,46,892)
–
–
–
–
(2,18,46,892)
9,30,46,647 64,01,95,187
–
–
–
1,10,68,433
–
–
7,11,99,755 64,10,55,920
–
Film Production 42,31,15,448
Total
10,31,95,084 1,26,95,39,513
Other
4,98,43,869
Exceptional Item
Media Campaign
7,11,99,755 64,10,55,920
Service Project
2013-14
(2,09,95,990)
(23,31,944)
–
–
5,82,18,519
–
–
–
(23,31,944)
5,25,38,870
5,02,06,926
–
5,02,06,926
Film Distribution
–
7,249
Profit/(Loss) from ordinary activities
Income Taxes
Unallocated Expenses
Depreciation
–
34,56,56,060
Segment Expenses
Interest Expenses
40,38,81,828
–
40,38,81,828
Film Production
Total Revenue
Inter segment Sales
External Sales
Segment Revenue
Particulars
The segment information required as per accounting standard 17 is given below :
Note : 44 Segment Reporting
Annual Report 2013–14
Note: 45 Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of the part II of Schedule VI to the Companies Act, 1956 to the extent applicable. i) Earnings in Foreign Exchange Particulars Export on goods/rights calculated on FOB basis
(Amount in `)
2013-2014
2012-2013
2,27,73,428
ii) Expenditure in Foreign Currency Particulars Foreign Tours/ Participation Expenses
1,42,24,785
(Amount in `)
2013-2014
2012-2013
4,21,20,017
iii) Payment to Auditors
5,19,08,030 (Amount in `)
Particulars
2013-2014
2012-2013
Audit Fees
3,50,000
3,50,000
Tax Audit Fees
1,00,000
1,00,000
Note: 46 Previous year figures have been re-classified to confirm with current year presentation, wherever applicable.
Signature to Notes Financial Statements For C.B.CHHAJED & CO., Chartered Accountants (FRN 101796W)
For and on behalf of Board
Nina Lath Gupta Managing Director DIN No. : 00350722 C.P. Bhatia (Partner ) M. No. 045210
Place: Mumbai Dated: 1st July 2014
Sahab Narain Director (Finance) DIN No. : 03641879
E. J. Paul Company Secretary / Manager ( F & A) M. No. FCS 4521
Annual Report 2013–14
63
Auditor’s Report To the Members of National Film Development Corporation Limited.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
Report on the Financial Statements
Basis for Qualified Opinion
We have audited the accompanying financial statements of National Film Development Corporation Limited (‘the Company’), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.
(a)
No provision has been made in respect of deposits of Rs 30 Lacs placed with 3 parties in 1991 which are secured against mortgage of certain immovable properties. The parties have not refunded the deposits and relevant securities are also not liquidated. The Company had initiated arbitration proceedings against the parties for recovery of deposits and Arbitration Awards have been made in favour of the company for two parties for recovery of deposit amounting to Rs 18 Lacs. For the balance amount of Rs 12 Lacs arbitration proceedings are still continuing. ( Refer note 37)
(b)
In case of film Gandhi the accounting of profits and distribution fee has been done on accrual basis except that these are accounted on calendar year basis instead of financial year basis. The profit and distribution fees are accounted based on the statement of account received from the agents appointed under the agreement which are prepared on calendar year basis. The Company has ensured that the fees receivable are considered for the entire year on calendar year basis instead of financial year basis.(Refer note 38)
(c)
The recoverability of TV marketing debtors against which the Company has filed cases in the court of law is not certain. The impact of the outcome arising out of the legal cases on the financial statement is not ascertainable. (refer note 39)
(d)
The impact of our remarks in (a) to (c) above on the net profits of the company and the respective assets and liabilities is not ascertainable.
Management’s Responsibility for the Financial Statements The Company’s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with the General Circular 15/2013 dated 13th September, 2013 of Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
64
Annual Report 2013–14
Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i)
in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;
(ii)
in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and
(iii)
in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) read with the General Circular 15/2013 dated 13th September, 2013 of Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.
e) As per notification No GSR 829(E) dated 21-10-2003 the Government Companies are exempted from the provisions of clause 274 (1) (g) of the Companies Act 1956.
Report on Other Legal and Regulatory Requirements 1.
As required by the Companies (Auditor’s Report) Order, 2003 (as amended) (‘the Order’) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
2.
As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
For C.B. Chhajed & Co. Chartered Accountants (Firm’s Regn Number: 101796W)
Place: Mumbai Date: 1st July, 2014
C. P. Bhatia (Partner) Membership No: 045210
Annual Report 2013–14
65
Annexure to the Auditors’ Report (Referred to in paragraph 1 of ”Report on other legal and regulatory requirements” of our report of even date) To the Members of National Film Development Corporation Limited (‘the Company’)
or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) to (iii) (g) of paragraph 4 of the Order are not applicable to the Company for the year. 4.
In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.
5.
According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, commenting on transactions made in pursuance of such contracts or arrangements does not arise.
6.
According to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly clause (vi) of paragraph 4 of the Order is not applicable to the Company.
7.
In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.
8.
To the best of our knowledge and based on explanation given to us, the Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company. Accordingly, clauses (viii) of paragraph 4 of the Order are not applicable to the Company for the year.
1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.
(b) The fixed assets are physically verified by the management according to a phased program designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected. 2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. (b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
3.(a) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii) (b) to (iii) (d) of paragraph 4 of the Order are not applicable to the Company for the year. (b) In our opinion and according to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms
66
Annual Report 2013–14
9.(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. (b) According to the information and explanations given to us and the records of the Company examined by us, there
are no dues of sales tax, wealth tax, custom duty, service tax, excise duty and cess which have not been deposited on account of any dispute. The income tax dues which are not deposited on account of disputed matters pending before appropriate authorities are as under:
Name of Nature Amount in Statute of Dues (Rs.)
Period to which the amount relates
Forum where the dispute is pending
Income Tax Act, 1961
Income Tax
19,30,850
A.Y. 2011-12
Commissioner (Appeal) CIT (A) – III
Income Tax Act, 1961
Income Tax
99,54,320
A.Y. 2006-07
Commissioner (Appeal) CIT (A) – III
10.
The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and do not have incurred any cash losses in the immediately preceding financial year.
11.
According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank.
12.
In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
13.
In our opinion and according to the information and explanation given to us, the Company is not a chit fund / nidhi / mutual benefit fund/ society. Accordingly, Clause (Xiii) of paragraph 4 of the order is not Applicable to the Company.
14.
In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments. Accordingly, clause (xiv) of paragraph 4 of the Order is not applicable to the Company for the year.
15.
In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.
16.
In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.
17.
On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term purpose.
18.
According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.
19. The Company has not issued any debentures. Accordingly, clause 4(xix) of Paragraph 4 of the order is not applicable. 20.
The Corporation has not raised any money by way of public issue during the year. Therefore, the provisions of clause (xx) of the Order are not applicable to the Company.
21.
During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. For C.B. Chhajed & Co. Chartered Accountants (Firm’s Regn Number: 101796W)
Place: Mumbai Date: 1st July, 2014
C. P. Bhatia (Partner) Membership No: 045210
Annual Report 2013–14
67
Comments of the Comptroller and Auditor General of India under Section 619 (4) of the Companies Act, 1956 on the Accounts of National Film Development Corporation Limited for the year ended 31st March 2014. The preparation of financial statements of National Film Development Corporation Limited for the year ended 31st March 2014 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 619 (2) of the Companies Act, 1956 are responsible for expressing opinion on these financial statements under Section 227 of the Companies Act, 1956 based on the independent audit in accordance with the Standards on Auditing prescribed by their professional body, the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated 01.07.2014. I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 619(3) (b) of the Companies Act, 1956 of the financial statements of National Film Development Corporation Limited for the year ended 31st March 2014. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matter under section 619 (4) of the Companies Act, 1956 which has come to my attention and which in my view is necessary for enabling a better understanding of the financial statement and the related Audit Report. For and on the behalf ofthe Comptroller and Auditor General of India
Place: New Delhi. Date: 01.10.2014
68
Annual Report 2013–14
(V.A. Patwardhan) Principal Director of Commercial Audit & Ex-Officio Member, Audit Board-IV
Reply of Management to the Comments of the Comptroller and Auditor General of India on the accounts of the Company Sr. No. A (i)
CAG Comments BALANCE SHEET EQUITY AND LIABILITIES CURRENT LIABILITIES Other Current Liabilities Note 9- Rs.103,44,29,493 Advance for production Rs.69,55,74,548 This is understated by Rs.21.44 Lakh plus interest earned on Rs.4.78 Crore received in March 2007 from Ministry of Culture for production of film on First War of Independence 1857 and allied events which was dropped by the Ministry subsequently. Consequently, the above head is understated by Rs.21.43 Lakh plus interest earned on Rs.4.78 Crore from March 2014, which is not quantified.
Management Reply Ministry of culture vide letter no 1-5/2006 (Special Cell) dated 21st March 2007 sanctioned an amount of Rs.4,78,30,000/- for the production of film on First War of Independence 1857. NFDC started the work, on behalf of the ministry, immediately thereafter and incurred an amount of Rs. 18.84 Lakhs on various direct expenditure e.g. hiring of agencies, traveling etc. The money was spent out of the funds received from Ministry of Culture and was debited against the advance given by the ministry. Subsequently, In 2009, the ministry shelved the project and, vide sanction order no. F.No 1-36/2007-special cell (Pt.II) dated 20th November 2009, directed NFDC to distribute DVDs/CDs to various Schools/Colleges/ Universities and Research Institutions out of the same funds earlier provided for the production of the film. NFDC, started the work on the same and expensed an amount of Rs. 2.60 lakhs from the ministry’s funds. Ministry of Culture, subsequently, shelved this project also. The cost of Rs. 21.44 Lakhs ( Rs. 18.84 Lakhs + Rs. 2.60 Lakhs) incurred by NFDC to launch and initiate these projects on the direction of the Ministry of Culture are chargeable to the ministry. Therefore the advance account of the ministry is legitimately reduced with the same accordingly. Final settlement of the same with the ministry is in process. Sanction order no. 1-5/2006 (Special Cell) dated 21st March 2007 through which Ministry of Culture sanctioned the amount for the production of the film on first war of independences, does not include any clause for the payment of interest to the ministry. Therefore, provision for payment of interest on the funds received was not provided in this year and in earlier years. Therefore, the Advance for Production head of account shown under the current liabilities is not understated by Rs. 21.44 Lakhs plus interest on 4.78 crores received from Ministry of Culture.
A (ii)
Short-Term ProvisionsThe company created a Provision of Tax of Rs. 1.59 Crore for Financial Provision for Taxation – For Income Tax Rs.1,59,00,000 Year 2012-13 however, the actual MAT Liability works out to be Rs.44 Lakh as per the IT Return filed with Income Tax Department for the year Above represents erroneous provision for TAX/MAT for 2012-13. The company did not reverse the excess provision during Financial Year 2012-13, while the actual MAT Liability was the financial year 2013-14, on the conservative side, as income tax Rs.44 Lakh as per the IT Return (30th September 2013) assessment for the FY 2012-13 is not finalized yet. it filed with Income Tax Department for the year 2012-13. The liability for Income Tax for 2012-13 therefore was However, during the FY 14-15, the same will again be reviewed with the overstated by Rs.1.15 Crore, leading to overstatement of consultation with the tax consultant. Short Term Provisions and understatement of Reserves and Surplus by Rs.1.15 Crore.
B
NOTES ON ACCOUNTS Note-2 SIGNIFICANT ACCOUNTING POLICIES Recognition of Revenue and related expenses
This is to be stated that change in accounting policy, during the FY 201314, in the accounting policy of the company of “Recognition of Revenue and related expenses” is not having any material impact.
The fact that impact due to changes in Accounting Policies B.1.1. regarding treatment of cost of production of films and B.2 regarding treatment of cost of production of television serials/acquired programmes are not material has not been disclosed in the Financial /statements for 2013-14, which is mandatory as per Accounting Standard 5
Annual Report 2013–14
69
6th Floor, Discovery of India Building, Nehru Centre Dr. Annie Besant Road, Worli, Mumbai 400 018 T +91 22 6628 8288 | F +91 22 2495 2262 E
[email protected] | www.nfdcindia.com CIN U92100MH1975GOI022994