ANNUAL REPORT 2008-09

Designed by Nicholas Hoffland Design

Printed at Thomson Press, India

Good economic circumstances usually make for great team-building. Its an excellent time to assemble the best talent that wants to be part of a profitable whole. With some diligence, its not difficult to get a model act together in terms of a mix of optimal goals and objectives for individuals, the team and the organization; set up systems for open and frequent communication, peer accountability; and create a culture that appreciates and bonds the team for best results. However, even in prosperous times things are never THAT perfect… and exceptional organizations more often than not, tend to get built by less than exceptional teams.

And then there are times when the economy is less than booming. The times when businesses have to take tough calls. Are these a good time for building the finest teams? The last year demonstrates resoundingly that these are indeed great times to build excellent teams and very nimble teamwork.

Periods when resources aren’t available for the asking, force organizations and teams to roll up their sleeves and develop REAL PEOPLE POWER. These are times when wise organizations leave behind any misguided reluctance to focus on teams and grapple squarely with the realization that without the right teams and work methods, the organization will not effectively identify and implement new ways to survive and thrive.

Resource-scarce situations force huge efficiencies. They ensure that much more is achieved with less. Flatter organization structures, greater inter-dependence… these enable a diversity of skills that deliver quick turnaround and results.

These are the times when motivated people dig deep down, work across functions and really collaborate and work as teams. They group together in a highly bonded, highly trusting manner to become more flexible and infinitely more responsive.

Organizations too respond and metamorphose to engage employee teams better in consultation and decision-making, which in turn create greater involvement and belonging.

Working in tandem, huge quality and productivity is achieved, simply because well allied people come together in multi-disciplinary teams to make projects and missions happen. Empowered, mission-focused teams also ensure that diverse experience and learnings are rapidly shared to deal with emerging opportunities or pitfalls.

These not so easy times… these red hot crucibles of adversity, these form the school of the greatest learning… these are the times when balanced individuals finally learn to balance well with each other… far better than in times when the next quarter’s positive results are more or less driven northwards by footfalls rushing in.

It is to these interesting times that we are indeed grateful. For when the corner is turned, it is these journeys that will have made us stronger and infinitely more proficient… all for one, one for all, all for the organization… REAL PEOPLE POWER.

1. Statutory Information 1

2. Chairman’s Statement 2

3. 2008-09 : An Overview 6

4. Directors’ Report 34

5. Management Discussion and Analysis 41

7. Report on Corporate Governance 44

8. Standalone Financial Statements 56

9. Consolidated Financial Statements 90

10. Summarised Financial Statements of Subsidiaries 126

Board of Directors

Mr. Ajay Bijli Chairman cum Managing DirectorMr. Sanjeev Kumar Joint Managing DirectorMr. Sumit Chandwani DirectorMr. Vikram Bakshi DirectorMr. Ravi K. Sinha DirectorMr. Renaud Jean Palliere DirectorMr. Sanjay Khanna Director

Company SecretaryMr. N.C. Gupta

AuditorsS.R. Batliboi & Co.Chartered Accountants

BankersStandard Chartered BankHDFC Bank LimitedKotak Mahindra Bank Limited

SubsidiariesPVR Pictures Limited PVR blu-O Entertainment LimitedC. R. Retail Malls (India) Private LimitedSunrise Infotainment Private Limited

Registrar & Share Transfer Agents (R&TA) Karvy Computershare Private Limited (KCPL), 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Tel. : +91-40-2342 0815-828 Fax : +91-40-2342 0814www.kcpl.karvy.com

Registered Office61, Basant Lok, Vasant Vihar, New Delhi - 110057

Corporate OfficeBlock A, 4th Floor, Building No 9, DLF Cyber City, Phase III,Gurgaon - 122002, Haryana, India

1

Contents

1. Statutory Information 1

2. Chairman’s Statement 2

3. 2008-09 : An Overview 6

4. Directors’ Report 34

5. Management Discussion and Analysis 41

7. Report on Corporate Governance 44

8. Standalone Financial Statements 56

9. Consolidated Financial Statements 90

10. Summarised Financial Statements of Subsidiaries 126

Board of Directors

Mr. Ajay Bijli Chairman cum Managing DirectorMr. Sanjeev Kumar Joint Managing DirectorMr. Sumit Chandwani DirectorMr. Vikram Bakshi DirectorMr. Ravi K. Sinha DirectorMr. Renaud Jean Palliere DirectorMr. Sanjay Khanna Director

Company SecretaryMr. N.C. Gupta

AuditorsS.R. Batliboi & Co.Chartered Accountants

BankersStandard Chartered BankHDFC Bank LimitedKotak Mahindra Bank Limited

SubsidiariesPVR Pictures Limited PVR blu-O Entertainment LimitedC. R. Retail Malls (India) Private LimitedSunrise Infotainment Private Limited

Registrar & Share Transfer Agents (R&TA) Karvy Computershare Private Limited (KCPL), 17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081 Tel. : +91-40-2342 0815-828 Fax : +91-40-2342 0814www.kcpl.karvy.com

Registered Office61, Basant Lok, Vasant Vihar, New Delhi - 110057

Corporate OfficeBlock A, 4th Floor, Building No 9, DLF Cyber City, Phase III,Gurgaon - 122002, Haryana, India

1

Contents

333

Dear Shareholders,

Speaking candidly, in economic history, there hasn’t been a year quite like this one for many, many decades. Your company has retained its robustness and vitality and has ridden every crest and trough and has re-entered calmer waters looking back at a huge and interesting learning experience. The year has really proved that the exhibition industry is reasonably immune to most factors and is really driven by only one thing – and that is the viewers’ insatiable appetite for good movie content. All good, really !

The situation in the US had a gigantic impact across the globe. And in India too, this particular combination of fundamentals and sentiment affected virtually every sector. The sectors with maximum exposure to the US economy were hit the most when it came to discretionary spending.

The Hindi fi lm industry too had a somewhat lackluster annual run and the non-availability of good content too, drove footfall numbers southward.

The higher costs of capital and tightened liquidity forced re-thinking on many capital and revenue expenditures critical to business. The plunging Sensex wiped out market capitalizations across all spaces and entertainment was no different.

C H A I R M A N ’ S S T A T E M E N T

Ajay Bijli Sanjeev Kumar

2

333

Dear Shareholders,

Speaking candidly, in economic history, there hasn’t been a year quite like this one for many, many decades. Your company has retained its robustness and vitality and has ridden every crest and trough and has re-entered calmer waters looking back at a huge and interesting learning experience. The year has really proved that the exhibition industry is reasonably immune to most factors and is really driven by only one thing – and that is the viewers’ insatiable appetite for good movie content. All good, really !

The situation in the US had a gigantic impact across the globe. And in India too, this particular combination of fundamentals and sentiment affected virtually every sector. The sectors with maximum exposure to the US economy were hit the most when it came to discretionary spending.

The Hindi fi lm industry too had a somewhat lackluster annual run and the non-availability of good content too, drove footfall numbers southward.

The higher costs of capital and tightened liquidity forced re-thinking on many capital and revenue expenditures critical to business. The plunging Sensex wiped out market capitalizations across all spaces and entertainment was no different.

C H A I R M A N ’ S S T A T E M E N T

Ajay Bijli Sanjeev Kumar

2

C H A I R M A N ’ S S T A T E M E N T

However, we at PVR also realized that its in unique times like this, that tremendous medium and long term opportunities arise. This is the time to re-examine fundamentals, re-jig the core of the business and go line by line to draw stronger effi ciencies. Every single person on the PVR team stood shoulder to shoulder and hammered away at every opportunity to do this, regardless of whether it came wrapped in a good or diffi cult situations, till silver linings appeared everywhere.

PVR used the spaces inherent in times like this, to enter new entertainment and leisure domains. The long awaited bowling centre project was piloted and launched to great acclaim. New cinemas were inaugurated. Production projects were completed and released. Tremendous breadth and depth was added to several operation footprints.

Given that PVR depends greatly on its internal accruals to fi nance expansion, your company’s expansion plans were not curtailed the way other capital market-dependant industry players were.

To handle topline and bottomline contraction, PVR teams saved or maximized every rupee. Distribution was revisited and operational costs were pared down across the board without affecting core effi ciencies. Capital was raised at reasonable costs to tide the company through requirement situations. Teams in operations did their best to maximize average revenue per user across exhibition and F&B. Marketing maximized their revenues even in a challenging

consumer situation such as this – actually taking this year’s topline higher than last year. Distribution dug in deeper for better results.

We are very clear that this astounding year has made all of us doubly conscious of the value we have to create and deliver. Our systems and our people are at their highest razor-sharp effi ciency. And now, just as the economy and spending are all set up to pick up, we believe that your company will be the fi rst to hit the ground running, once a real revival begins.

While we are pragmatic enough to realize that the current rallies have been more a matter of sentiment rather than fundamentals, we are confi dent that the market remains strong at the core and we look forward to an excellent future, poised as we collectively are, to perform very strongly.

We thank you for having stood like a rock and reposed your faith in the company. Above all, we thank all our people for having brought the company through a remarkably interesting year.

Good wishes

Ajay Bijli Sanjeev Kumar

C H A I R M A N ’ S S T A T E M E N T

4 5

C H A I R M A N ’ S S T A T E M E N T

However, we at PVR also realized that its in unique times like this, that tremendous medium and long term opportunities arise. This is the time to re-examine fundamentals, re-jig the core of the business and go line by line to draw stronger effi ciencies. Every single person on the PVR team stood shoulder to shoulder and hammered away at every opportunity to do this, regardless of whether it came wrapped in a good or diffi cult situations, till silver linings appeared everywhere.

PVR used the spaces inherent in times like this, to enter new entertainment and leisure domains. The long awaited bowling centre project was piloted and launched to great acclaim. New cinemas were inaugurated. Production projects were completed and released. Tremendous breadth and depth was added to several operation footprints.

Given that PVR depends greatly on its internal accruals to fi nance expansion, your company’s expansion plans were not curtailed the way other capital market-dependant industry players were.

To handle topline and bottomline contraction, PVR teams saved or maximized every rupee. Distribution was revisited and operational costs were pared down across the board without affecting core effi ciencies. Capital was raised at reasonable costs to tide the company through requirement situations. Teams in operations did their best to maximize average revenue per user across exhibition and F&B. Marketing maximized their revenues even in a challenging

consumer situation such as this – actually taking this year’s topline higher than last year. Distribution dug in deeper for better results.

We are very clear that this astounding year has made all of us doubly conscious of the value we have to create and deliver. Our systems and our people are at their highest razor-sharp effi ciency. And now, just as the economy and spending are all set up to pick up, we believe that your company will be the fi rst to hit the ground running, once a real revival begins.

While we are pragmatic enough to realize that the current rallies have been more a matter of sentiment rather than fundamentals, we are confi dent that the market remains strong at the core and we look forward to an excellent future, poised as we collectively are, to perform very strongly.

We thank you for having stood like a rock and reposed your faith in the company. Above all, we thank all our people for having brought the company through a remarkably interesting year.

Good wishes

Ajay Bijli Sanjeev Kumar

C H A I R M A N ’ S S T A T E M E N T

4 5

6 7

6 7

Cinema production too has used the current environment and leveraged the PVR brand to create a very strong portfolio of films in development, which strategically feeds the content requirement of the exhibition business, in addition to addressing production profitability issues very well.

As footfall contracted to an extent this year in the face of a dearth of good content, competition from other sources of entertainment, and the distribution-producer situation, the organization actually reached out into communities and established deep bonds and warm relationships which helped shore up the topline. In the medium and long term, these bonds will yield rich dividends for the organization. Viewing the success of this model, intensive efforts are on, to broaden and deepen such relationships to keep viewers locked into the brand.

The organization found newer and newer ways, to provide viewers with value, all the while lowering costs in ways that did not affect consumer expectation and the long term value of assets and equity.

The PVR brand made itself invaluable to the community of large, prestigious brands and advertisers by offering deep, involving catchments relevant to their businesses.

O V E R V I E W : T H E M A N A G E M E N T T E A M

• Build quality into the PVR brand in every dimension, for the long term.

• Leverage the brand for business and growth.• Make each transaction more profi table.

• Get closer to people and processes in every way.• Build relationships. Build people.

Build the organization.

THE PVR FIVE STAR MODEL

There is nothing like a fast-changing, tough business environment to drive home the value of a strong, vital brand. Whenever business cycles move faster - consumers, channel partners, distributors and all stakeholders seek out friends – and brands that they can call friends.

Given that the rapidly evolving circumstances forced introspection, we at PVR examined everything and took every step to grow the brand.

In terms of growing the footprint of the brand, this was an excellent year. Situations on the ground threw up every opportunity for exhibition business models to be re-invented completely. It became possible in the retail environment, to establish multiplexes as a retail environment cornerstone service instead of the cash-cow that it was currently viewed as.

The growth trajectory has been unprecedented and PVR is poised to set up 60 new screens in the next 12 months – in choice premium locations. The PVR brand has played a major role in enabling the organization to close new deals at very sensible long-term operation models and price-points.

The distribution and programming business has been re-jigged to ensure a steady, sustainable stream of good content from diverse sources – some of them very innovative – to ensure that all ends of the exhibition business meet their objectives. This will ensure that regardless of the external impetus, the organization will have excellent content to offer viewers.

The brand was leveraged immensely to take marketing and profitability to unprecedented levels.

Given that this was contraction year, every cost centre was shifted to a variable approach, in accordance with footfall, thereby keeping costs proportionate to business. Process-base outsourcing, alternative material usage and other cost contraction methods were used.

The organization put a number of measures into place to retain the best of its people, in spite of a financially difficult year.

PVR also entered a completely new entertainment domain with the launch of PVR bluO, bowling-based entertainment model. The model will be multiplied rapidly after test-benching.

All round growth, huge self-recognition of our own strengths, big investments for the future – a truly excellent year !

8 9

Cinema production too has used the current environment and leveraged the PVR brand to create a very strong portfolio of films in development, which strategically feeds the content requirement of the exhibition business, in addition to addressing production profitability issues very well.

As footfall contracted to an extent this year in the face of a dearth of good content, competition from other sources of entertainment, and the distribution-producer situation, the organization actually reached out into communities and established deep bonds and warm relationships which helped shore up the topline. In the medium and long term, these bonds will yield rich dividends for the organization. Viewing the success of this model, intensive efforts are on, to broaden and deepen such relationships to keep viewers locked into the brand.

The organization found newer and newer ways, to provide viewers with value, all the while lowering costs in ways that did not affect consumer expectation and the long term value of assets and equity.

The PVR brand made itself invaluable to the community of large, prestigious brands and advertisers by offering deep, involving catchments relevant to their businesses.

O V E R V I E W : T H E M A N A G E M E N T T E A M

• Build quality into the PVR brand in every dimension, for the long term.

• Leverage the brand for business and growth.• Make each transaction more profi table.

• Get closer to people and processes in every way.• Build relationships. Build people.

Build the organization.

THE PVR FIVE STAR MODEL

There is nothing like a fast-changing, tough business environment to drive home the value of a strong, vital brand. Whenever business cycles move faster - consumers, channel partners, distributors and all stakeholders seek out friends – and brands that they can call friends.

Given that the rapidly evolving circumstances forced introspection, we at PVR examined everything and took every step to grow the brand.

In terms of growing the footprint of the brand, this was an excellent year. Situations on the ground threw up every opportunity for exhibition business models to be re-invented completely. It became possible in the retail environment, to establish multiplexes as a retail environment cornerstone service instead of the cash-cow that it was currently viewed as.

The growth trajectory has been unprecedented and PVR is poised to set up 60 new screens in the next 12 months – in choice premium locations. The PVR brand has played a major role in enabling the organization to close new deals at very sensible long-term operation models and price-points.

The distribution and programming business has been re-jigged to ensure a steady, sustainable stream of good content from diverse sources – some of them very innovative – to ensure that all ends of the exhibition business meet their objectives. This will ensure that regardless of the external impetus, the organization will have excellent content to offer viewers.

The brand was leveraged immensely to take marketing and profitability to unprecedented levels.

Given that this was contraction year, every cost centre was shifted to a variable approach, in accordance with footfall, thereby keeping costs proportionate to business. Process-base outsourcing, alternative material usage and other cost contraction methods were used.

The organization put a number of measures into place to retain the best of its people, in spite of a financially difficult year.

PVR also entered a completely new entertainment domain with the launch of PVR bluO, bowling-based entertainment model. The model will be multiplied rapidly after test-benching.

All round growth, huge self-recognition of our own strengths, big investments for the future – a truly excellent year !

8 9

11111111111111

PVR is India’s fi nest cinema exhibition brand.

Maintaining the brand’s growth and vitality in the face

of a competitive, contraction year was very challenging.

2008-09 could have been a very diffi cult year had it

not been for the people at PVR who stood shoulder to

shoulder and beat back the downturn at every single

show of every single day, in every possible way. Across

every single function that contributes to the exhibition

business, every opportunity was embraced to carry out

each activity differently, so that it yielded better value

at a lower cost.

Many of these learnings in terms of structures,

processes, technologies and skills have now been

absorbed into the organization’s DNA and will

yield tremendous dividends in the coming months

and years.

O V E R V I E W : P V R ’ S E X H I B I T I O N B U S I N E S S

10

11111111111111

PVR is India’s fi nest cinema exhibition brand.

Maintaining the brand’s growth and vitality in the face

of a competitive, contraction year was very challenging.

2008-09 could have been a very diffi cult year had it

not been for the people at PVR who stood shoulder to

shoulder and beat back the downturn at every single

show of every single day, in every possible way. Across

every single function that contributes to the exhibition

business, every opportunity was embraced to carry out

each activity differently, so that it yielded better value

at a lower cost.

Many of these learnings in terms of structures,

processes, technologies and skills have now been

absorbed into the organization’s DNA and will

yield tremendous dividends in the coming months

and years.

O V E R V I E W : P V R ’ S E X H I B I T I O N B U S I N E S S

10

12121212121222222221

All F&B processes were re-assessed and re-evaluated continually.

At the PVR candy bar, patrons were offered greater value combos that actually increased the spend per head. F&B communication was designed in such a way, that the strike rate per show actually went up even in the face of lower footfall. Different value packages were continually re-devised to keep the public imagination refreshed and engaged.

At lobby level, well-branded franchisees were introduced to round off offerings not possible under PVR’s candy bar model. These were locked-in on direct rent or profit share models that yielded well in a non-cannibalising way. Local tastes and preferences have been catered to well in different ways, while keeping the core PVR candy bar model intact. These arrangements have yielded uniform profitability with the PVR candy bar.

At certain locations, merely the back-end of the complete F&B outlet was outsourced

O V E R V I E W : P V R ’ s E X H I B I T I O N B U S I N E S S

to different kinds of high-quality vendors, which resulted in wider consumer choice and significantly improved food and service quality, while at the same time lowering operating costs. This has been done across the range – at the high-end, premium service end as well as the mass consumption end. At premium locations, liquor licences have been sought and obtained. These will increase spend and revenue considerably, while adding sheen to the brand.

Even as the market contracted, not a single job was lost, thanks to the continual re-absorption and training that was put into place.

Thus food and beverage operations have expanded hugely this year in terms of broadened business models, deepened processes and better overall quality.

Food and beverage services hugely revitalised

13

12121212121222222221

All F&B processes were re-assessed and re-evaluated continually.

At the PVR candy bar, patrons were offered greater value combos that actually increased the spend per head. F&B communication was designed in such a way, that the strike rate per show actually went up even in the face of lower footfall. Different value packages were continually re-devised to keep the public imagination refreshed and engaged.

At lobby level, well-branded franchisees were introduced to round off offerings not possible under PVR’s candy bar model. These were locked-in on direct rent or profit share models that yielded well in a non-cannibalising way. Local tastes and preferences have been catered to well in different ways, while keeping the core PVR candy bar model intact. These arrangements have yielded uniform profitability with the PVR candy bar.

At certain locations, merely the back-end of the complete F&B outlet was outsourced

O V E R V I E W : P V R ’ s E X H I B I T I O N B U S I N E S S

to different kinds of high-quality vendors, which resulted in wider consumer choice and significantly improved food and service quality, while at the same time lowering operating costs. This has been done across the range – at the high-end, premium service end as well as the mass consumption end. At premium locations, liquor licences have been sought and obtained. These will increase spend and revenue considerably, while adding sheen to the brand.

Even as the market contracted, not a single job was lost, thanks to the continual re-absorption and training that was put into place.

Thus food and beverage operations have expanded hugely this year in terms of broadened business models, deepened processes and better overall quality.

Food and beverage services hugely revitalised

13

141414 15

O V E R V I E W : P R O J E C T I O N

Cinema paradiso marches into the future

Projection in most of the cinemas is making rapid leaps in technology. The entire system is being moved from the fi lm platform to the digital platform, which is resulting in manifold benefi ts.

Being server and software based, rather than fi lm dependant, the new digital technology essentially enables maximization of the rights of any fi lm by giving programming the complete fl exibility to schedule a fi lm so as to serve its public appeal in a saturated manner. The digital model has lowered costs too, since it is no longer based on physical prints. The viewing quality of digital of course, provides

cinegoers with a matchless viewing experience every time, regardless of how many times a fi lm is run.

All personnel at all the cinemas

are continually trained and re-trained to keep pace with technologies and the changing business models that they enable. Growth paths are identifi ed for them and their special needs are kept in mind as they climb up the ladder.

141414 15

O V E R V I E W : P R O J E C T I O N

Cinema paradiso marches into the future

Projection in most of the cinemas is making rapid leaps in technology. The entire system is being moved from the fi lm platform to the digital platform, which is resulting in manifold benefi ts.

Being server and software based, rather than fi lm dependant, the new digital technology essentially enables maximization of the rights of any fi lm by giving programming the complete fl exibility to schedule a fi lm so as to serve its public appeal in a saturated manner. The digital model has lowered costs too, since it is no longer based on physical prints. The viewing quality of digital of course, provides

cinegoers with a matchless viewing experience every time, regardless of how many times a fi lm is run.

All personnel at all the cinemas

are continually trained and re-trained to keep pace with technologies and the changing business models that they enable. Growth paths are identifi ed for them and their special needs are kept in mind as they climb up the ladder.

16116161161616

Finding new ways to secure smiles

The security function was particularly squeezed in 2008-09 and personnel across all levels contributed magnificently. At one end, lower footfall put severe pressure on the way things were operated earlier. On the other hand, the increased terrorist activity across the country, mandated hugely increased security and alertness.

Another factor is that cinema security (in comparison to security anywhere else) is considered an extension of the cinema experience and thus needs to be extra-sensitive to patrons who are essentially seeking a pleasurable and comfortable experience.

PVR handled all these aspects with a mix of outsourced and in-house security. All security on-campus was examined and rationalized for minimum exposure and maximum visibility. The entire structure was revamped such that a basic constant core resource, managed the entire infrastructure, at a cost that was flexible in accordance with footfall.

Costs were actually pared down by as much as 25%, by multi-tasking with smaller numbers. Much greater co-operation was developed with public security infrastructure such as the police and the fire department and proper communication and interaction channels were instituted and systematized.

The lower footfalls actually yielded time for additional training in aspects such as first aid,

O V E R V I E W : S E C U R I T Y A N D M A I N T E N A N C E

fire-fighting and evacuation procedures. Huge efforts were continually made to re-orient outsourced and in-house personnel on patron handling, issue handling, conflict minimization and grooming, so that patrons actually felt that security was a welcome presence.

Proper in-cinema communication also ensured better receptivity and interaction. And thus, what could have been a negative year, actually turned out to be a very positive one.

Maintenance and services

Given that PVR is in the premium entertainment business, it was not possible to significantly lower maintenance and service costs without affecting customer satisfaction indices and reducing asset life. Maintenance is essentially an investment rather than an expense.

Good savings were effected in energy consumption by merely lowering the numbers of lights used in any cinema and in rationalised use of airconditioning whenever patrons would exit any given area. However any piece of maintenance that compromised customer satisfaction was completely avoided.

17

16116161161616

Finding new ways to secure smiles

The security function was particularly squeezed in 2008-09 and personnel across all levels contributed magnificently. At one end, lower footfall put severe pressure on the way things were operated earlier. On the other hand, the increased terrorist activity across the country, mandated hugely increased security and alertness.

Another factor is that cinema security (in comparison to security anywhere else) is considered an extension of the cinema experience and thus needs to be extra-sensitive to patrons who are essentially seeking a pleasurable and comfortable experience.

PVR handled all these aspects with a mix of outsourced and in-house security. All security on-campus was examined and rationalized for minimum exposure and maximum visibility. The entire structure was revamped such that a basic constant core resource, managed the entire infrastructure, at a cost that was flexible in accordance with footfall.

Costs were actually pared down by as much as 25%, by multi-tasking with smaller numbers. Much greater co-operation was developed with public security infrastructure such as the police and the fire department and proper communication and interaction channels were instituted and systematized.

The lower footfalls actually yielded time for additional training in aspects such as first aid,

O V E R V I E W : S E C U R I T Y A N D M A I N T E N A N C E

fire-fighting and evacuation procedures. Huge efforts were continually made to re-orient outsourced and in-house personnel on patron handling, issue handling, conflict minimization and grooming, so that patrons actually felt that security was a welcome presence.

Proper in-cinema communication also ensured better receptivity and interaction. And thus, what could have been a negative year, actually turned out to be a very positive one.

Maintenance and services

Given that PVR is in the premium entertainment business, it was not possible to significantly lower maintenance and service costs without affecting customer satisfaction indices and reducing asset life. Maintenance is essentially an investment rather than an expense.

Good savings were effected in energy consumption by merely lowering the numbers of lights used in any cinema and in rationalised use of airconditioning whenever patrons would exit any given area. However any piece of maintenance that compromised customer satisfaction was completely avoided.

17

181818188188

O V E R V I E W : H O U S E K E E P I N G

The futuristic environments at any PVR cinema site need world-class housekeeping so as to exceed patrons’ expectations, and that is precisely what every single member of the housekeeping function delivers.

Given the pressures of 2008-09, a mix of models has been adopted, with some cinema location’s services being outsourced and some being serviced by in-house personnel. This mix is closely monitored for the best effi ciencies and quality.

PVR has been at the forefront of technology. Many of the toilets are waterless since they are bacteria-based bio-technology driven, and on an average, each saves enough water in a year to fi ll three swimming pools. Almost all functions in this arm are automated using world-leading branded equipment. All personnel, whether outsourced or in-house are trained in the relevant technologies by leading training providers.

Huge savings have been effected in the last year through a sea-change in equipment usage, consumables sourcing and centralized ordering and inventory control.

During the contraction, not a single person in housekeeping was

laid off. Work was rationalized, teams handled increased workloads. All uniforms were re-designed by Ravi Bajaj and several team-building initiatives were launched as were a number of motivation measures to keep the housekeeping teams buoyant and motivated.

Housekeeping: shining more than ever this year

19

181818188188

O V E R V I E W : H O U S E K E E P I N G

The futuristic environments at any PVR cinema site need world-class housekeeping so as to exceed patrons’ expectations, and that is precisely what every single member of the housekeeping function delivers.

Given the pressures of 2008-09, a mix of models has been adopted, with some cinema location’s services being outsourced and some being serviced by in-house personnel. This mix is closely monitored for the best effi ciencies and quality.

PVR has been at the forefront of technology. Many of the toilets are waterless since they are bacteria-based bio-technology driven, and on an average, each saves enough water in a year to fi ll three swimming pools. Almost all functions in this arm are automated using world-leading branded equipment. All personnel, whether outsourced or in-house are trained in the relevant technologies by leading training providers.

Huge savings have been effected in the last year through a sea-change in equipment usage, consumables sourcing and centralized ordering and inventory control.

During the contraction, not a single person in housekeeping was

laid off. Work was rationalized, teams handled increased workloads. All uniforms were re-designed by Ravi Bajaj and several team-building initiatives were launched as were a number of motivation measures to keep the housekeeping teams buoyant and motivated.

Housekeeping: shining more than ever this year

19

20202020202002

OVERVIEW : NEW BUSINESS DEVELOPMENT, PROJECTS & DESIGN

Premium project development :more bullish than ever before

In terms of business development, when the organization will look back at 2008-09, it will probably view the year as one of the most bullish ever. And even though all industries have experienced contraction, it is precisely because PVR teams have worked very hard with the opportunities presented by the economic situation that PVR has had a year of never-before growth. At the bottom of this year, PVR has signed on an unprecedented number of screens this year, of which more than 60 will be opened in the next 12 months.

The organization went to the next level by capitalizing on the inherent strength of the brand. Benefi ts that emerged from standing tall with the brand were numerous. It enabled cherry picking among choice locations, it redefi ned PVR’s role as a key tenant, it enabled the brand to work with the ablest and most passionate partners who gave PVR the highest priority. The brand played a role in pricing too and enabled setups at a fraction of their earlier cost. To some extent, existing real estate contracts too, were renegotiated. It was possible in these times, to educate real estate owners to view multiplexes as necessary infrastructure for their malls rather than as a cash cow to be milked. This sea-change is yielding rich dividends for the brand.

Plans are in implementation to grow the footprint of every sub-brand within PVR especially PVR Talkies and the uppermost ends. Properties are under development for the creation of new brands too.

Project costs have been addressed well too, by re-writing multiplex setup rules. Efforts have been successfully made to transfer setup capex to owners of real estate. As a result, costs have been a fraction of what they used to be. In a lot of cases, the entire operation models have been changed and now PVR operates across several models : from key- tenant under old-school multiplex arrangements, to cost-share, to operating profi t-share models. The paradigms of the business at the development end, have been re-written. The trend having begun, is expected to play out for quite some time in the future.

21

20202020202002

OVERVIEW : NEW BUSINESS DEVELOPMENT, PROJECTS & DESIGN

Premium project development :more bullish than ever before

In terms of business development, when the organization will look back at 2008-09, it will probably view the year as one of the most bullish ever. And even though all industries have experienced contraction, it is precisely because PVR teams have worked very hard with the opportunities presented by the economic situation that PVR has had a year of never-before growth. At the bottom of this year, PVR has signed on an unprecedented number of screens this year, of which more than 60 will be opened in the next 12 months.

The organization went to the next level by capitalizing on the inherent strength of the brand. Benefi ts that emerged from standing tall with the brand were numerous. It enabled cherry picking among choice locations, it redefi ned PVR’s role as a key tenant, it enabled the brand to work with the ablest and most passionate partners who gave PVR the highest priority. The brand played a role in pricing too and enabled setups at a fraction of their earlier cost. To some extent, existing real estate contracts too, were renegotiated. It was possible in these times, to educate real estate owners to view multiplexes as necessary infrastructure for their malls rather than as a cash cow to be milked. This sea-change is yielding rich dividends for the brand.

Plans are in implementation to grow the footprint of every sub-brand within PVR especially PVR Talkies and the uppermost ends. Properties are under development for the creation of new brands too.

Project costs have been addressed well too, by re-writing multiplex setup rules. Efforts have been successfully made to transfer setup capex to owners of real estate. As a result, costs have been a fraction of what they used to be. In a lot of cases, the entire operation models have been changed and now PVR operates across several models : from key- tenant under old-school multiplex arrangements, to cost-share, to operating profi t-share models. The paradigms of the business at the development end, have been re-written. The trend having begun, is expected to play out for quite some time in the future.

21

222222222222222222222222222

Multiplex fi t-outs really defi ne the PVR brand’s personality and create a future- proof design edge that cinegoers enjoy as “the PVR experience”. PVR has always been at the cutting edge of theatre design and initial expenditures in this domain have paid handsome dividends in times, where rapid competition growth is steadily equalizing the cine-going experience.

The PVR design team consistently incorporates international level design into every PVR campus, which assists in operational fi nancial effi ciencies on a per square foot basis, every single month. At fi tout stage itself, PVR’s per seat costs are extremely low compared to the value they generate. All PVR design integrates technology superbly with long term benefi ts. All aspects of consumer psychology and the latest trends in addressing these are built into the design of every multiplex. Maximum marketing income opportunities are intelligently built in without compromising either aesthetic or operational effi ciencies.

PVR’s future-proof design incorporates profi ts at the drawing board stage itself by providing spaces for the organization to interact with the audiences of the future – 8-10-15 years down the line. Given that every cinema is locked into long term leases, design follows suit by making itself relevant to audience aesthetics through the duration of that tenure.

The previous year resulted in much greater effi ciencies for the design team. All outsourced feasibility work is now serviced in-house resulting in large cash savings. The team supported the huge growth curve of the development of new properties and re-assessed every element of design process and cinema design inventory, so that turnaround times are lightning quick and comprehensive. All teams have emerged well-bonded to face the upturn that is round the corner.

OVERVIEW : NEW BUSINESS DEVELOPMENT, PROJECTS & DESIGN

Profi table and future-proof by design

23

222222222222222222222222222

Multiplex fi t-outs really defi ne the PVR brand’s personality and create a future- proof design edge that cinegoers enjoy as “the PVR experience”. PVR has always been at the cutting edge of theatre design and initial expenditures in this domain have paid handsome dividends in times, where rapid competition growth is steadily equalizing the cine-going experience.

The PVR design team consistently incorporates international level design into every PVR campus, which assists in operational fi nancial effi ciencies on a per square foot basis, every single month. At fi tout stage itself, PVR’s per seat costs are extremely low compared to the value they generate. All PVR design integrates technology superbly with long term benefi ts. All aspects of consumer psychology and the latest trends in addressing these are built into the design of every multiplex. Maximum marketing income opportunities are intelligently built in without compromising either aesthetic or operational effi ciencies.

PVR’s future-proof design incorporates profi ts at the drawing board stage itself by providing spaces for the organization to interact with the audiences of the future – 8-10-15 years down the line. Given that every cinema is locked into long term leases, design follows suit by making itself relevant to audience aesthetics through the duration of that tenure.

The previous year resulted in much greater effi ciencies for the design team. All outsourced feasibility work is now serviced in-house resulting in large cash savings. The team supported the huge growth curve of the development of new properties and re-assessed every element of design process and cinema design inventory, so that turnaround times are lightning quick and comprehensive. All teams have emerged well-bonded to face the upturn that is round the corner.

OVERVIEW : NEW BUSINESS DEVELOPMENT, PROJECTS & DESIGN

Profi table and future-proof by design

23

2524 25252525525525252525525252525252525525555222222222222422424242242424242424242424242442424242424242422242424444224242424242442424442442424242422242424244422442424244422244442422424224222444242244442442244424224422424244442424222222222422222244

Innovative marketing regardless of the quality of content, ensured that the PVR cinemas enjoyed the largest market share in any area they were operating in. Given that footfall was a matter of constant concern this year, numbers were protected to a large extent by really intensifying local area marketing in every neighbourhood. Absence of good content gave the organisation the incentive and opportunity to really connect deeply with audiences and build bonds which will pay forward.

Neither PVR cinema campuses nor the PVR brand let the industry down. The sheen and experience levels were kept as concertedly strong and buoyant as they were earlier. Gears shifted to engage the viewer more deeply at all levels, even to the extent of good systemic interaction with the cinema stars as part of all movie activity.

This factor was greatly appreciated by marketers, especially those seeking upmarket, strongly engaged audiences. PVR remained a medium of choice when it came to talking to premium consumers. Deeper engagements led to the cinemas being utilized not just as a vehicle to talk to viewers, but as vehicles to engage with viewers meaningfully and to use these exercises as catchment for data, opinion or sampling - wherever the marketing imagination could go.

PVR’s innovative marketing approaches saw huge brands like Mercedes Benz, Airtel, Lufthansa and Hindustan Lever among many others, deeply engaged with the organization for all marketing offerings. Marketing income actually grew by over 30% in the year. Tremendous efforts are on to deepen these relationships to mutual benefit in times to come.

O V E R V I E W : C I N E M A M A R K E T I N G

Movie marketing upside in the downturn!

2524 25252525525525252525525252525252525525555222222222222422424242242424242424242424242442424242424242422242424444224242424242442424442442424242422242424244422442424244422244442422424224222444242244442442244424224422424244442424222222222422222244

Innovative marketing regardless of the quality of content, ensured that the PVR cinemas enjoyed the largest market share in any area they were operating in. Given that footfall was a matter of constant concern this year, numbers were protected to a large extent by really intensifying local area marketing in every neighbourhood. Absence of good content gave the organisation the incentive and opportunity to really connect deeply with audiences and build bonds which will pay forward.

Neither PVR cinema campuses nor the PVR brand let the industry down. The sheen and experience levels were kept as concertedly strong and buoyant as they were earlier. Gears shifted to engage the viewer more deeply at all levels, even to the extent of good systemic interaction with the cinema stars as part of all movie activity.

This factor was greatly appreciated by marketers, especially those seeking upmarket, strongly engaged audiences. PVR remained a medium of choice when it came to talking to premium consumers. Deeper engagements led to the cinemas being utilized not just as a vehicle to talk to viewers, but as vehicles to engage with viewers meaningfully and to use these exercises as catchment for data, opinion or sampling - wherever the marketing imagination could go.

PVR’s innovative marketing approaches saw huge brands like Mercedes Benz, Airtel, Lufthansa and Hindustan Lever among many others, deeply engaged with the organization for all marketing offerings. Marketing income actually grew by over 30% in the year. Tremendous efforts are on to deepen these relationships to mutual benefit in times to come.

O V E R V I E W : C I N E M A M A R K E T I N G

Movie marketing upside in the downturn!

262626266262626666662666662666

The film production function of PVR Pictures is in the process of signing several films in this year with diverse directors and star casts. Each of these films is being selected on the basis of good stories - strong scripts with good lock-ins with the audiences. Excellent production values will be built into the films and fiscal prudence will be worked out to ensure that all the films are completed on time and within budget.

While PVR Pictures made its production debut in December 2007 with ‘Taare Zameen Par’, which was a smash hit at the box office, it produced 3 more films during 2008. The company’s second production ‘Jaane Tu Ya Jaane Na’ which was co-produced with Aamir Khan Productions Private Limited was released in July 2008 and performed exceptionally well at the box office. In addition the company also co-produced ‘Contract’ (a co-production with Ram Gopal Verma) and ‘Mere Khwabon Mein Jo Aaye’, which however did not fare too well at the box office.

The environment in the film industry this year, threw up ample opportunities for the logical investor and PVR Pictures capitalized on these to build positive relationships across the industry – in mainstream Hindi cinema as well as in the regional cinema domain. Given the overall paucity of liquidity, PVR Pictures will be helping a number of productions in achieving good cinematic results at far lower cost. It is hoped that these more realistic methods of handling cinema production, with their emphasis on good stories, are here to stay. The organization looks forward to playing a far more aggressive role in the production business and in the process hopes to animate genuinely good quality cinema in India – in terms of both production and demand.

PVR Pictures is positioning itself to recognized as a major film production brand and be counted among the top 5 production houses in the next 3 years. It can leverage the PVR brand, excellent management skills, relationships and exhibition circuit to capture a share of opportunity available in the Indian content space.

O V E R V I E W : P V R P I C T U R E S : P R O D U C T I O N

A bigger picture : new strategies, new numbers

27

262626266262626666662666662666

The film production function of PVR Pictures is in the process of signing several films in this year with diverse directors and star casts. Each of these films is being selected on the basis of good stories - strong scripts with good lock-ins with the audiences. Excellent production values will be built into the films and fiscal prudence will be worked out to ensure that all the films are completed on time and within budget.

While PVR Pictures made its production debut in December 2007 with ‘Taare Zameen Par’, which was a smash hit at the box office, it produced 3 more films during 2008. The company’s second production ‘Jaane Tu Ya Jaane Na’ which was co-produced with Aamir Khan Productions Private Limited was released in July 2008 and performed exceptionally well at the box office. In addition the company also co-produced ‘Contract’ (a co-production with Ram Gopal Verma) and ‘Mere Khwabon Mein Jo Aaye’, which however did not fare too well at the box office.

The environment in the film industry this year, threw up ample opportunities for the logical investor and PVR Pictures capitalized on these to build positive relationships across the industry – in mainstream Hindi cinema as well as in the regional cinema domain. Given the overall paucity of liquidity, PVR Pictures will be helping a number of productions in achieving good cinematic results at far lower cost. It is hoped that these more realistic methods of handling cinema production, with their emphasis on good stories, are here to stay. The organization looks forward to playing a far more aggressive role in the production business and in the process hopes to animate genuinely good quality cinema in India – in terms of both production and demand.

PVR Pictures is positioning itself to recognized as a major film production brand and be counted among the top 5 production houses in the next 3 years. It can leverage the PVR brand, excellent management skills, relationships and exhibition circuit to capture a share of opportunity available in the Indian content space.

O V E R V I E W : P V R P I C T U R E S : P R O D U C T I O N

A bigger picture : new strategies, new numbers

27

28228282828282882828888222828228288888

O V E R V I E W : P V R P I C T U R E S : D I S T R I B U T I O N

PVR Pictures, is a subsidiary of PVR Ltd is involved in film production / co-production of Indian cinema and distribution of Indian and Hollywood content across Indian theatres. The company secured Private Equity Investment in June, 2008 worth Rs 120 crores from private equity investors ICICI Venture and JP Morgan Mauritius Holdings IV Limited for a 40% stake to the investors. The funds will be used to add strength and diversity to the company’s production and distribution portfolios in the coming years.

The distribution arm of PVR Pictures has emerged as a very savvy film distribution unit which has delivered an excellent mix of films to different regions of the country. While keeping a permanent eye on profitability, the distribution wing at PVR has endeavored to raise the quality of films offered to the Indian public by giving distribution opportunities to independent films, meritorious directors, foreign films and good regional cinema – in addition to distributing Indian and international box office chartbusters. PVR Pictures has distributed over 70 international and Indian films during the last two years. Some of the major films distributed by the company during 2008-09 include Ghajini, Kidnap, Golmaal Returns, Sarkar Raj, Mere Baap Pehle Aap, Bal Ganesh, Hannibal Rising, Jaane Tu Ya Jaane Na, Contract etc.

Much more than just distribution

From merely ensuring good properties and territories at a profitable price point, PVR Pictures has migrated to ensuring the rationalization of content across the entire calendar year, with proper release pace and momentum – with a particular view to dealing with seasonality – keeping in mind, the normal peaks and troughs that affect availability of good properties.

In the distribution space, PVR Pictures is positioning itself as the leading independent distributor of films outside the major studios and is looking forward to control the entire distribution rights including theatrical, satellite, television, and DVD rights for international films in India.

29

28228282828282882828888222828228288888

O V E R V I E W : P V R P I C T U R E S : D I S T R I B U T I O N

PVR Pictures, is a subsidiary of PVR Ltd is involved in film production / co-production of Indian cinema and distribution of Indian and Hollywood content across Indian theatres. The company secured Private Equity Investment in June, 2008 worth Rs 120 crores from private equity investors ICICI Venture and JP Morgan Mauritius Holdings IV Limited for a 40% stake to the investors. The funds will be used to add strength and diversity to the company’s production and distribution portfolios in the coming years.

The distribution arm of PVR Pictures has emerged as a very savvy film distribution unit which has delivered an excellent mix of films to different regions of the country. While keeping a permanent eye on profitability, the distribution wing at PVR has endeavored to raise the quality of films offered to the Indian public by giving distribution opportunities to independent films, meritorious directors, foreign films and good regional cinema – in addition to distributing Indian and international box office chartbusters. PVR Pictures has distributed over 70 international and Indian films during the last two years. Some of the major films distributed by the company during 2008-09 include Ghajini, Kidnap, Golmaal Returns, Sarkar Raj, Mere Baap Pehle Aap, Bal Ganesh, Hannibal Rising, Jaane Tu Ya Jaane Na, Contract etc.

Much more than just distribution

From merely ensuring good properties and territories at a profitable price point, PVR Pictures has migrated to ensuring the rationalization of content across the entire calendar year, with proper release pace and momentum – with a particular view to dealing with seasonality – keeping in mind, the normal peaks and troughs that affect availability of good properties.

In the distribution space, PVR Pictures is positioning itself as the leading independent distributor of films outside the major studios and is looking forward to control the entire distribution rights including theatrical, satellite, television, and DVD rights for international films in India.

29

3030303030303030030330303

O V E R V I E W : P V R B L U O

From being the finest player in the cinema exhibition space, PVR is now embracing other entertainment formats at the premium end. To this end, a super-luxury 24 bowling lane-based entertainment centre was set up in Delhi this year and has fast become the spot to see and be seen for the jet-set in Delhi and the NCR.

PVR bluO Rhythm’n’Bowl is an entertainment facility spread over 42,500 sq feet, set up in collaboration with Major Cineplex Group, Thailand. The entire gigantic project was executed in six months and features 24 bowling lanes, 5 concept rooms, 2 karaoke areas, a tattoo bar, lounges and a 200 cover sitting area. A dedicated 4-star kitchen services the facility. The entire ambience is geared towards really youth-oriented, futuristic upscale entertainment. It has become the favoured stopping point for visiting cinema stars, celebrities and the entire social network of the city.

bluO-ing the entertainment space!

The space seeds and irrigates the concept of bowling and has become the hub of national bowling activity. PVR bluO Rhythm’n’Bowl has hosted the national bowling championships and really large inter-corporate bowling events and is set to take leadership of the entire bowling arena.

Rapid expansion is envisaged as PVR bluO Rhythm’n’Bowl will move onwards to about 250 lanes in the next 3 years across 14 cities. The first steps in the pipeline are in Bangalore and Delhi in premium locations. Entertainment is all set to be redefined across a much wider arena.

31

3030303030303030030330303

O V E R V I E W : P V R B L U O

From being the finest player in the cinema exhibition space, PVR is now embracing other entertainment formats at the premium end. To this end, a super-luxury 24 bowling lane-based entertainment centre was set up in Delhi this year and has fast become the spot to see and be seen for the jet-set in Delhi and the NCR.

PVR bluO Rhythm’n’Bowl is an entertainment facility spread over 42,500 sq feet, set up in collaboration with Major Cineplex Group, Thailand. The entire gigantic project was executed in six months and features 24 bowling lanes, 5 concept rooms, 2 karaoke areas, a tattoo bar, lounges and a 200 cover sitting area. A dedicated 4-star kitchen services the facility. The entire ambience is geared towards really youth-oriented, futuristic upscale entertainment. It has become the favoured stopping point for visiting cinema stars, celebrities and the entire social network of the city.

bluO-ing the entertainment space!

The space seeds and irrigates the concept of bowling and has become the hub of national bowling activity. PVR bluO Rhythm’n’Bowl has hosted the national bowling championships and really large inter-corporate bowling events and is set to take leadership of the entire bowling arena.

Rapid expansion is envisaged as PVR bluO Rhythm’n’Bowl will move onwards to about 250 lanes in the next 3 years across 14 cities. The first steps in the pipeline are in Bangalore and Delhi in premium locations. Entertainment is all set to be redefined across a much wider arena.

31

3333333333333333333333

OVERVIEW : PVR NEST : CORPORATE SOCIAL RESPONSIBILITY

PVR Nest Plant trees, even though you may not be around to eat the fruit

PVR Nest completed three years in 2008 - a collective journey towards working for children and the environment. PVR NEST’s activities in 2008 made significant progress and received great appreciation within our community of beneficiaries, families, PVR NEST friends, PVR associates and partners. This year PVR Nest’s work was honoured with the Karmaveer Puraskaar, Delhi 2008 from ICONGO (Indian Confederation of NGOs) for being the Best Corporate Citizens For Holistic CSR Initiatives. PVR NEST tried to maintain a holistic and principled approach. It continued to develop programs which had a strong connection with the present state of affairs and ‘future structural needs’. At the same time, it deepened the process of partnership and alliance building, by strengthening old ties and forging new ones.

SCHOOL-LIFE, an initiative, inaugurated by Dr. APJ Abdul Kalam, former President of India, in 2008, has been developed as an off-shoot of PVR Childscapes. The programme aims to mainstream children between the ages of 5-12 years to primary and secondary schools. Many children from Childscapes have been admitted to government and public schools in neighbourhood areas. 50 children have been benefited by this programme. The notable partners are Delhi Government’s Bhagidari Programme, Agro Tech Foods Pvt. Ltd., NDMC School (Pandara Road), Little Ones Public School, Green Field Paramount Junior and KG School, Literacy India and individuals. One fresh initiative was the ‘capacity building ‘of these children. HAQ, the Child Right Workshop supported the development of this program. Because of lack of proper guidance and positive utilisation of energy, most street children are susceptible to crime. To prevent this, it is important that their energy be channelised in a positive direction. Their problems in life, family, community and society need discussion and their questions need answers. Further, they need to be equipped with knowledge of child protection laws so that they can protect their interests and participate in society as equal citizens. This initiative brought a lot of synergy into our existing program. Group work, collage-making , drawing and discussion were the primary tools.

GREEN FILMS took on a new dimension this year. PVR Nest children decided to term it “ Hari Soch”- thinking green. They decided to watch green films and think green. All of them thought green in their own ways. Some painted green, some had cut- outs of green trees, some dressed like endangered animals and some sang impromptu green songs. The programs were engaging and educating. They watched films from Children’s Film Society. All children came from special schools.

Since inception, around 275 children have benefited from PVR Nest and more than 10,000 children have watched films on the environment through its various initiatives. Programs like Childscapes and PVR Ki Paathshala cover the basic needs of these special children such as education, food and healthcare. Other more pertinent needs are also addressed such as capacity building and creative development, understanding their insecurities and preparing them for newer opportunities. Our programs empower them with self-confidence and enable them to find new meanings in their existing world.32

3333333333333333333333

OVERVIEW : PVR NEST : CORPORATE SOCIAL RESPONSIBILITY

PVR Nest Plant trees, even though you may not be around to eat the fruit

PVR Nest completed three years in 2008 - a collective journey towards working for children and the environment. PVR NEST’s activities in 2008 made significant progress and received great appreciation within our community of beneficiaries, families, PVR NEST friends, PVR associates and partners. This year PVR Nest’s work was honoured with the Karmaveer Puraskaar, Delhi 2008 from ICONGO (Indian Confederation of NGOs) for being the Best Corporate Citizens For Holistic CSR Initiatives. PVR NEST tried to maintain a holistic and principled approach. It continued to develop programs which had a strong connection with the present state of affairs and ‘future structural needs’. At the same time, it deepened the process of partnership and alliance building, by strengthening old ties and forging new ones.

SCHOOL-LIFE, an initiative, inaugurated by Dr. APJ Abdul Kalam, former President of India, in 2008, has been developed as an off-shoot of PVR Childscapes. The programme aims to mainstream children between the ages of 5-12 years to primary and secondary schools. Many children from Childscapes have been admitted to government and public schools in neighbourhood areas. 50 children have been benefited by this programme. The notable partners are Delhi Government’s Bhagidari Programme, Agro Tech Foods Pvt. Ltd., NDMC School (Pandara Road), Little Ones Public School, Green Field Paramount Junior and KG School, Literacy India and individuals. One fresh initiative was the ‘capacity building ‘of these children. HAQ, the Child Right Workshop supported the development of this program. Because of lack of proper guidance and positive utilisation of energy, most street children are susceptible to crime. To prevent this, it is important that their energy be channelised in a positive direction. Their problems in life, family, community and society need discussion and their questions need answers. Further, they need to be equipped with knowledge of child protection laws so that they can protect their interests and participate in society as equal citizens. This initiative brought a lot of synergy into our existing program. Group work, collage-making , drawing and discussion were the primary tools.

GREEN FILMS took on a new dimension this year. PVR Nest children decided to term it “ Hari Soch”- thinking green. They decided to watch green films and think green. All of them thought green in their own ways. Some painted green, some had cut- outs of green trees, some dressed like endangered animals and some sang impromptu green songs. The programs were engaging and educating. They watched films from Children’s Film Society. All children came from special schools.

Since inception, around 275 children have benefited from PVR Nest and more than 10,000 children have watched films on the environment through its various initiatives. Programs like Childscapes and PVR Ki Paathshala cover the basic needs of these special children such as education, food and healthcare. Other more pertinent needs are also addressed such as capacity building and creative development, understanding their insecurities and preparing them for newer opportunities. Our programs empower them with self-confidence and enable them to find new meanings in their existing world.32

343334

Directors’ Report

Dear Shareholders,Your directors have pleasure in presenting the Fourteenth Annual Report on the business and operations of the Company and Audited Financial Statements for the year ended March 31, 2009.

Financial Highlights

(Rs. in Lacs)

2008-09 2007-08

Income 27,870 24,470

Expenditure 22,849 19,092

Earnings before depreciation interest and tax (EBIDTA) 5,021 5,378

Depreciation 1,894 1,510

Interest 1,143 681

Profit before Tax 1,984 3,187

Provision for Taxation including Deferred Tax 719 1,081

Profit after Tax 1,265 2,106

Balance brought forward from previous year 2,767 2,017

Profit available for appropriation 4,032 4,123

Appropriations

Transfer to Capital Redemption Reserve 1,000 1,000

Dividend on:

Preference Shares 12 74

Equity Shares 230 230

Corporate Dividend Tax 41 52

Surplus carried to Balance Sheet 2,749 2,767

35

During the year under review the exhibition industry was under pressure due to low-occupancy primarily on account of terrorist attacks in major metro cities across the country beside 26/11 episode of Mumbai. The impact of terrorists attacks kept the masses stay away from the Multiplexes resulting into lower box office revenue. In addition there were few Hit/Block Buster in the period under review.

DividendThe company paid dividend @ 5% on Redeemable Preference Shares of the Company (fully redeemed during

the year) on prorata basis during the year.

Your directors are pleased to recommend a dividend of 10% (Re. 1 per Equity Share) for the year ended March 31, 2009. The total outgo on account of dividend to be paid to equity shareholders shall be Rs. 230.13 lacs.

343334

Directors’ Report

Dear Shareholders,Your directors have pleasure in presenting the Fourteenth Annual Report on the business and operations of the Company and Audited Financial Statements for the year ended March 31, 2009.

Financial Highlights

(Rs. in Lacs)

2008-09 2007-08

Income 27,870 24,470

Expenditure 22,849 19,092

Earnings before depreciation interest and tax (EBIDTA) 5,021 5,378

Depreciation 1,894 1,510

Interest 1,143 681

Profit before Tax 1,984 3,187

Provision for Taxation including Deferred Tax 719 1,081

Profit after Tax 1,265 2,106

Balance brought forward from previous year 2,767 2,017

Profit available for appropriation 4,032 4,123

Appropriations

Transfer to Capital Redemption Reserve 1,000 1,000

Dividend on:

Preference Shares 12 74

Equity Shares 230 230

Corporate Dividend Tax 41 52

Surplus carried to Balance Sheet 2,749 2,767

35

During the year under review the exhibition industry was under pressure due to low-occupancy primarily on account of terrorist attacks in major metro cities across the country beside 26/11 episode of Mumbai. The impact of terrorists attacks kept the masses stay away from the Multiplexes resulting into lower box office revenue. In addition there were few Hit/Block Buster in the period under review.

DividendThe company paid dividend @ 5% on Redeemable Preference Shares of the Company (fully redeemed during

the year) on prorata basis during the year.

Your directors are pleased to recommend a dividend of 10% (Re. 1 per Equity Share) for the year ended March 31, 2009. The total outgo on account of dividend to be paid to equity shareholders shall be Rs. 230.13 lacs.

36 37

Operations ReviewKindly refer to Management Discussion & Analysis

Report covered under Corporate Governance which forms part of this report.

SubsidiariesAs on March 31, 2009 the Company has four

subsidiary companies namely M/s PVR Pictures Limited (PVR Pictures), M/s C. R. Retail Malls (India) Private Limited (CRR), M/s Sunrise Infotainment Private Limited (SIPL) and M/s PVR bluO Entertainment Limited (PVR bluO) out of which CRR and SIPL are wholly owned subsidiaries of the Company.

PVR Pictures Limited (PVR Pictures)

PVR Pictures is in the business of film production & distribution. The Company during the year co-produced inter alia a movie namely “Jaane Tu Ya Jaane Na” with Amir Khan Production Private Limited (“AKPPL”). The film performed strongly at the box office. PVR Pictures has network in major film territories and has distributed various Hollywood and Bollywood movies across Indian theatres.

PVR bluO Entertainment Limited (PVR bluO)

PVR bluO Entertainment Limited is a 51:49 Joint Venture between the Company and Major Cineplex Group Plc. of Thailand. On 12th March 2009 PVR bluO opened its first and India’s largest 24 lane Bowling Centre with the brand name of “bluO” located at prestigious Ambience Mall in Gurgaon giving fillip to out door retail entertainment which proved to be extremely successful venture of the Company.

The 24 lane Bowling Centre is equipped with world Cuisine Lounge, 2 Platinum Lounges for Private Dining and variety of entertainment options for consumers.

The opening of “bluO” is another step towards evolving PVR from a film entertainment company to a retail entertainment player with a focus to enhance the out of home entertainment experience for the patrons and to provide world-class lifestyle entertainment concepts to the Indian consumers.

Corporate GovernanceThe Company is committed to uphold the highest

standards of corporate governance. Company strongly believes that this relationship can be strengthened through corporate fairness, transparency and accountability. Your Company complies with all the provisions of Clause 49 of the Listing Agreement.

A report on Corporate Governance, along with a Certificate from Practicing Company Secretary is enclosed. A Certificate from Chairman cum Managing Director and CFO, confirming the correctness of the financial statements, adequacy of the internal control measures as enumerated in Clause 49 of the Listing Agreement are also enclosed.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming integral part of this Report.

DirectorsIn accordance with the provisions of Sections 255

and 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Sumit Chandwani and Mr. Renaud Jean Palliere retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Fixed DepositsDuring the year under review your Company has

not accepted any fixed deposits under Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules 1975.

Status of Amalgamation of Sunrise Infotainment Pvt. Ltd. with the Company

The Company filed a petition under Section 391 and other applicable provisions of the Companies Act, 1956, alongwith a Scheme of Amalgamation entailing merger of Sunrise Infotainment Private Limited (Transferor Company) with PVR Limited (Transferee Company) with the Hon’ble Delhi High Court on 29th January, 2009. The matter is listed for hearing before the Hon’ble Delhi High Court on 3rd August, 2009.

Sunrise Infotainment Pvt. Ltd. (SIPL)

Sunrise Infotainment Pvt. Ltd., a wholly owned subsidiary of the Company, operates 6 screen Multiplex at “Oberoi Mall” at Goregaon, Mumbai. SIPL opened its Multiplex on 16th May 2008 and was granted entertainment tax exemption on 20th August 2008.

C.R. Retail Malls (India) Pvt. Ltd. (CRR)

C.R. Retail Malls (India) Pvt. Ltd., a wholly owned subsidiary of the Company, operates 7 screen Multiplex at “High Street Phoenix Mall” at Lower Parel, a prime retail and entertainment destination in Mumbai. CRR opened the Multiplex on 26th December 2008 and was granted entertainment tax exemption on 2nd March 2009.

Consolidated Financial Statements

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the Financial Year 2008-09.

Particulars under Section 212 of the Companies Act, 1956

The Company has obtained an exemption from the Ministry of Corporate Affairs, Government of India vide its letter no. 47/505/2009-CL-III dated 30th June, 2009 in terms of Section 212(8) of the Companies Act, 1956 from attaching the audited accounts of its subsidiaries for the financial year under review. In pursuance thereof, the Company undertakes that annual accounts of the subsidiary companies and the related detailed information for the year ended March 31, 2009 will be made available to its investors seeking such information at any point of time. The annual accounts of the subsidiary companies are also kept for inspection by any investor at the registered office of the Company and concerned subsidiary companies. The statement required pursuant to the above referred approval letter is enclosed after the Consolidated Accounts of the Company forming part of this Annual Report.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, the Directors confirm:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) That they have taken proper and sufficient care for the 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) That they have prepared the annual accounts for the financial year ended 31st March 2009 on a going concern basis.

Auditors & Auditors’ ReportThe Statutory Auditors of the Company, M/s. S.R.

Batliboi & Co., Chartered Accountants, New Delhi, hold office until the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment and have confirmed that their re-appointment if made, shall be within the limits of Section 224(1B) of the Companies Act, 1956. The Board recommends the re-appointment of S.R. Batliboi & Co., Chartered Accountants as Statutory Auditors of the Company.

The Auditor’s observations and the relevant notes on the accounts are self-explanatory and therefore, do not call for further comments.

36 37

Operations ReviewKindly refer to Management Discussion & Analysis

Report covered under Corporate Governance which forms part of this report.

SubsidiariesAs on March 31, 2009 the Company has four

subsidiary companies namely M/s PVR Pictures Limited (PVR Pictures), M/s C. R. Retail Malls (India) Private Limited (CRR), M/s Sunrise Infotainment Private Limited (SIPL) and M/s PVR bluO Entertainment Limited (PVR bluO) out of which CRR and SIPL are wholly owned subsidiaries of the Company.

PVR Pictures Limited (PVR Pictures)

PVR Pictures is in the business of film production & distribution. The Company during the year co-produced inter alia a movie namely “Jaane Tu Ya Jaane Na” with Amir Khan Production Private Limited (“AKPPL”). The film performed strongly at the box office. PVR Pictures has network in major film territories and has distributed various Hollywood and Bollywood movies across Indian theatres.

PVR bluO Entertainment Limited (PVR bluO)

PVR bluO Entertainment Limited is a 51:49 Joint Venture between the Company and Major Cineplex Group Plc. of Thailand. On 12th March 2009 PVR bluO opened its first and India’s largest 24 lane Bowling Centre with the brand name of “bluO” located at prestigious Ambience Mall in Gurgaon giving fillip to out door retail entertainment which proved to be extremely successful venture of the Company.

The 24 lane Bowling Centre is equipped with world Cuisine Lounge, 2 Platinum Lounges for Private Dining and variety of entertainment options for consumers.

The opening of “bluO” is another step towards evolving PVR from a film entertainment company to a retail entertainment player with a focus to enhance the out of home entertainment experience for the patrons and to provide world-class lifestyle entertainment concepts to the Indian consumers.

Corporate GovernanceThe Company is committed to uphold the highest

standards of corporate governance. Company strongly believes that this relationship can be strengthened through corporate fairness, transparency and accountability. Your Company complies with all the provisions of Clause 49 of the Listing Agreement.

A report on Corporate Governance, along with a Certificate from Practicing Company Secretary is enclosed. A Certificate from Chairman cum Managing Director and CFO, confirming the correctness of the financial statements, adequacy of the internal control measures as enumerated in Clause 49 of the Listing Agreement are also enclosed.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming integral part of this Report.

DirectorsIn accordance with the provisions of Sections 255

and 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Sumit Chandwani and Mr. Renaud Jean Palliere retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Fixed DepositsDuring the year under review your Company has

not accepted any fixed deposits under Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules 1975.

Status of Amalgamation of Sunrise Infotainment Pvt. Ltd. with the Company

The Company filed a petition under Section 391 and other applicable provisions of the Companies Act, 1956, alongwith a Scheme of Amalgamation entailing merger of Sunrise Infotainment Private Limited (Transferor Company) with PVR Limited (Transferee Company) with the Hon’ble Delhi High Court on 29th January, 2009. The matter is listed for hearing before the Hon’ble Delhi High Court on 3rd August, 2009.

Sunrise Infotainment Pvt. Ltd. (SIPL)

Sunrise Infotainment Pvt. Ltd., a wholly owned subsidiary of the Company, operates 6 screen Multiplex at “Oberoi Mall” at Goregaon, Mumbai. SIPL opened its Multiplex on 16th May 2008 and was granted entertainment tax exemption on 20th August 2008.

C.R. Retail Malls (India) Pvt. Ltd. (CRR)

C.R. Retail Malls (India) Pvt. Ltd., a wholly owned subsidiary of the Company, operates 7 screen Multiplex at “High Street Phoenix Mall” at Lower Parel, a prime retail and entertainment destination in Mumbai. CRR opened the Multiplex on 26th December 2008 and was granted entertainment tax exemption on 2nd March 2009.

Consolidated Financial Statements

In compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the Financial Year 2008-09.

Particulars under Section 212 of the Companies Act, 1956

The Company has obtained an exemption from the Ministry of Corporate Affairs, Government of India vide its letter no. 47/505/2009-CL-III dated 30th June, 2009 in terms of Section 212(8) of the Companies Act, 1956 from attaching the audited accounts of its subsidiaries for the financial year under review. In pursuance thereof, the Company undertakes that annual accounts of the subsidiary companies and the related detailed information for the year ended March 31, 2009 will be made available to its investors seeking such information at any point of time. The annual accounts of the subsidiary companies are also kept for inspection by any investor at the registered office of the Company and concerned subsidiary companies. The statement required pursuant to the above referred approval letter is enclosed after the Consolidated Accounts of the Company forming part of this Annual Report.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors’ Responsibility Statement, the Directors confirm:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

ii) That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) That they have taken proper and sufficient care for the 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) That they have prepared the annual accounts for the financial year ended 31st March 2009 on a going concern basis.

Auditors & Auditors’ ReportThe Statutory Auditors of the Company, M/s. S.R.

Batliboi & Co., Chartered Accountants, New Delhi, hold office until the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment and have confirmed that their re-appointment if made, shall be within the limits of Section 224(1B) of the Companies Act, 1956. The Board recommends the re-appointment of S.R. Batliboi & Co., Chartered Accountants as Statutory Auditors of the Company.

The Auditor’s observations and the relevant notes on the accounts are self-explanatory and therefore, do not call for further comments.

Employee Stock Option Scheme (ESOS)

The company received approval of shareholders by means of Postal Ballot on January 5, 2009 for granting of 5,00,000 stock options to the employees of the company. During the year 5,00,000 Options were granted to the eligible employees of the Company in terms of the Employee Stock Option Scheme, 2008 (PVR ESOS, 2008). No options were vested to any employee during the year under review.

The disclosure as required under Clause 12.1 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, is set out in Annexure ‘III’ to the Directors’ Report.

The certificate from the Statutory Auditors under the SEBI (Employees Stock Option and Employees Stock Purchase Scheme) Guidelines, 1999, confirming that the PVR ESOS 2008 has been implemented in accordance with the guidelines and shareholders resolution, will be placed before the shareholders at the ensuing Annual General Meeting.

Forfeiture of upfront payment against Warrants

During the year, company forfeited a sum of Rs. 258 lacs due to non exercise of conversion right against 12,00,000 Convertible Warrants into Equity Shares issued to one of the promoter company.

Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given as Annexure - I hereto and forms part of this report.

Particulars of EmployeesThe information as required in accordance with

Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is set out in Annexure ‘II’ to the Directors’ Report. However, as per the provisions of Section 219 (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

AcknowledgementThe Directors would like to express their gratitude

towards shareholders, customers/patrons, suppliers, collaborators, bankers, financial institutions and all other business associates and various departments of Central Government and State Government for the incessant support provided by them to the company and their confidence in its management.

Your Directors also place on record their deep appreciation of the contribution made by the employees at all levels. Your Company‘s consistent growth was made possible by their hard work, integrity, cooperation and support.

For and on behalf of the Board

Ajay Bijli

Chairman cum Managing Director

Place: Gurgaon, HaryanaDate : July 31, 2009

38 39

Annexure I to Directors’ Report : Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars required under Section 217(1) (e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are as mentioned herein below:

i) Conservation of Energy

Energy conservation measures taken:

• Power factor is being maintained above 0.95 with the use of capacitor banks. These banks are used to neutralize the inductive current by providing capacitive current. As a result power factor improves and we get rebate applicable on energy bills from Electricity Distribution Companies (Tata Power/BSES).

• Switching on/off procedure is being followed for entire lighting and other load within the premises for which timers are used.

• The air conditioning system, preventive maintenance, routine services are monitored to make the system efficient. Also regulation of the AHU timings for proper utilisation has further helped in saving electricity consumption.

• All the new fittings are with CFL or energy saver which uses less electrical power as compared to old GL lamps.

• Temperature sensors are being put in Cinema Audi’s for better control on AC.

• Seat lights of LED’s are used in place of GSL light to save energy.

• Outside consultants have been appointed to suggest energy saving measures over and above the existing system. They suggest on optimization of energy distribution, Lux level of various areas, design aspects of electrical and HVAC system etc. so that other aspects of energy conservation and equipment efficiency can be maintained.

• Installed Variance Frequency Drives (VFD) for various Air Handling Units (AHU’s) to conserve energy.

• Keep close monitoring of AC Plant, AHU’s, pumps, running hours by installation of Running Hours Meters & Energy Meters.

• Signage Boards have been replaced with LCD’s to conserve energy at Company’s Multiplex at Faridabad.

• Poster windows in all cinemas having copper chokes have been replaced with electronic ballast to conserve energy and to enhance the light of tube lights.

ii) Technology Absorption

Since the company has no subsisting Technology Agreement hence not applicable.

iii) Foreign Exchange Earnings & Outgo March 31, 09 March 31, 08

(Rs.) (Rs.)Earnings in foreign currency (on accrual basis) Income from Sale of Film Rights Nil 452,981Expenditure in foreign currency (on accrual basis) Travelling 1,406,013 1,018,553Professional fees (including expenses, net of income tax) 4,134,242 1,878,042Director Sitting Fees 84,429 NilAdvertisement Expense 1,117,249 NilTotal 6,741,933 2,896,595CIF Value of Imports Capital Goods 31,313,984 2,680,226Software 550,000 285,645Total 31,863,984 2,965,871

For and on behalf of the Board

Place: Gurgaon, Haryana Ajay BijliDate: July 31, 2009 Chairman cum Managing Director

Employee Stock Option Scheme (ESOS)

The company received approval of shareholders by means of Postal Ballot on January 5, 2009 for granting of 5,00,000 stock options to the employees of the company. During the year 5,00,000 Options were granted to the eligible employees of the Company in terms of the Employee Stock Option Scheme, 2008 (PVR ESOS, 2008). No options were vested to any employee during the year under review.

The disclosure as required under Clause 12.1 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, is set out in Annexure ‘III’ to the Directors’ Report.

The certificate from the Statutory Auditors under the SEBI (Employees Stock Option and Employees Stock Purchase Scheme) Guidelines, 1999, confirming that the PVR ESOS 2008 has been implemented in accordance with the guidelines and shareholders resolution, will be placed before the shareholders at the ensuing Annual General Meeting.

Forfeiture of upfront payment against Warrants

During the year, company forfeited a sum of Rs. 258 lacs due to non exercise of conversion right against 12,00,000 Convertible Warrants into Equity Shares issued to one of the promoter company.

Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given as Annexure - I hereto and forms part of this report.

Particulars of EmployeesThe information as required in accordance with

Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is set out in Annexure ‘II’ to the Directors’ Report. However, as per the provisions of Section 219 (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

AcknowledgementThe Directors would like to express their gratitude

towards shareholders, customers/patrons, suppliers, collaborators, bankers, financial institutions and all other business associates and various departments of Central Government and State Government for the incessant support provided by them to the company and their confidence in its management.

Your Directors also place on record their deep appreciation of the contribution made by the employees at all levels. Your Company‘s consistent growth was made possible by their hard work, integrity, cooperation and support.

For and on behalf of the Board

Ajay Bijli

Chairman cum Managing Director

Place: Gurgaon, HaryanaDate : July 31, 2009

38 39

Annexure I to Directors’ Report : Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Particulars required under Section 217(1) (e) of the Companies Act, 1956, read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are as mentioned herein below:

i) Conservation of Energy

Energy conservation measures taken:

• Power factor is being maintained above 0.95 with the use of capacitor banks. These banks are used to neutralize the inductive current by providing capacitive current. As a result power factor improves and we get rebate applicable on energy bills from Electricity Distribution Companies (Tata Power/BSES).

• Switching on/off procedure is being followed for entire lighting and other load within the premises for which timers are used.

• The air conditioning system, preventive maintenance, routine services are monitored to make the system efficient. Also regulation of the AHU timings for proper utilisation has further helped in saving electricity consumption.

• All the new fittings are with CFL or energy saver which uses less electrical power as compared to old GL lamps.

• Temperature sensors are being put in Cinema Audi’s for better control on AC.

• Seat lights of LED’s are used in place of GSL light to save energy.

• Outside consultants have been appointed to suggest energy saving measures over and above the existing system. They suggest on optimization of energy distribution, Lux level of various areas, design aspects of electrical and HVAC system etc. so that other aspects of energy conservation and equipment efficiency can be maintained.

• Installed Variance Frequency Drives (VFD) for various Air Handling Units (AHU’s) to conserve energy.

• Keep close monitoring of AC Plant, AHU’s, pumps, running hours by installation of Running Hours Meters & Energy Meters.

• Signage Boards have been replaced with LCD’s to conserve energy at Company’s Multiplex at Faridabad.

• Poster windows in all cinemas having copper chokes have been replaced with electronic ballast to conserve energy and to enhance the light of tube lights.

ii) Technology Absorption

Since the company has no subsisting Technology Agreement hence not applicable.

iii) Foreign Exchange Earnings & Outgo March 31, 09 March 31, 08

(Rs.) (Rs.)Earnings in foreign currency (on accrual basis) Income from Sale of Film Rights Nil 452,981Expenditure in foreign currency (on accrual basis) Travelling 1,406,013 1,018,553Professional fees (including expenses, net of income tax) 4,134,242 1,878,042Director Sitting Fees 84,429 NilAdvertisement Expense 1,117,249 NilTotal 6,741,933 2,896,595CIF Value of Imports Capital Goods 31,313,984 2,680,226Software 550,000 285,645Total 31,863,984 2,965,871

For and on behalf of the Board

Place: Gurgaon, Haryana Ajay BijliDate: July 31, 2009 Chairman cum Managing Director

Management Discussion and Analysis

Annexure III to Directors’ Report : Disclosure as required under SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as on March 31, 2009

A. Particulars ESOS Scheme

1 Number of options granted 5,00,000

2 The Pricing Formula The closing market Price on the day prior to the date of grant.3 Number of options vested Nil

4 Number of options exercised Nil

5 Total number of shares arising as a result of exercise of options Nil

6 Number of options lapsed Nil

7 Variation in the terms of options N.A.

8 Money realised by exercise of options Nil

9 Total Number of Options in force 5,00,000

B. Employee-wise details of options granted to:

(i) Senior managerial personnel

Name No. of options granted

Pramod Arora 81,000

N. C. Gupta 81,000

Amitabh Vardhan 76,000

Nitin Sood 76,000

Gautam Dutta 66,000

Sunil Bhatnagar 20,000

Rakesh Kaul 20,000

Sumneet Kaur 20,000 Sanjay Walia 20,000

(ii) Any other employee who were granted, during any one year, options amounting to 5% or more of the options granted during the year

Name No. of options granted

NIL

(iii) Identified employees who were granted option, during any one year, equal or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

Name No. of options granted

NIL

C. Diluted Earnings Per Share pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 5.42

D. The impact on the profits and EPS of the fair value method is given in the table below :-

Rs.

Profit as reported 126,516,928.00

Add - Intrinsic Value Cost -

Less - Fair Value Cost 1,448,270.39

Profit as adjusted 125,068,657.61

Earning per share (Basic) as reported 5.50

Earning per share (Basic) adjusted 5.43

Earning per share (Diluted) as reported 5.42

Earning per share (Diluted) adjusted 5.36

E. Weighted average exercise price of Options whose

(a) Exercise price equals market price 88.00

(b) Exercise price is greater than market price Nil

(c) Exercise price is less than market price Nil

Weighted average fair value of options whose

(a) Exercise price equals market price 37.10

(b) Exercise price is greater than market price Nil

(c) Exercise price is less than market price Nil

F. Method and Assumptions used to estimate the fair value of options granted during the year:

The fair value has been calculated using the Black Scholes Option Pricing model

The Assumptions used in the model are as follows:

Date of grant 30-Jan-09

1. Risk Free Interest Rate 5.01%

2. Expected Life 3.70

3. Expected Volatility 51.80%

4. Dividend Yield 0.45%

5. Price of the underlying share in market at the time of the option grant (Rs.) 88.00

The following Management Discussion and Analysis Section should be read in conjunction with the financial statements and notes to accounts for the period ended 31st March, 2009. The reference to FY 09 and FY 08 in this section refers to the year ended 31st March, 2009 and year ended 31st March, 2008 respectively. This discussion contains certain forward looking statements based on current expectations, which entail various risks and uncertainties that could cause the actual results to differ materially from those reflected in them. All references to “PVR”, “we”, “our”, “Company” in this report refer to PVR Limited and should be construed accordingly.

Industry Structure & Development

India’s Film industry is one of the largest in the world with more than 1000 movie releases and over 3 billion movie goers annually. The filmed entertainment sector is estimated to have grown at a Compound Average Growth Rate (CAGR) of 17.7 percent over the past 3 years.

While the historical performance witnessed promising growth, the year 2008-09 heralded challenging times for the filmed entertainment industry

as a whole. It is estimated that the growth rate of the industry remained flat during last year owing to weak movie pipeline with less number of successful releases, unanticipated events such as launch of IPL and frequent bomb blasts, and consequent decline realizations from theatricals, Cable & Satellite rights and ancillary revenue streams.

In the long term, the industry is projected to grow at the CAGR of 9.1 percent during 2008-2013, and reach the size of INR 168.6 billion by 2013. The performance is expected to be mainly driven by improved contributions from multiplexes in the overall exhibition industry, rise in overseas box office collections and growth in home video segment. While theatrical collections continue to be the largest contributor to Industry revenues, ancillary revenue streams such as sale of TV rights, mobile rights, internet download rights etc are becoming increasingly important in the overall pie of the industry (Source: KPMG–The Indian Entertainment and Media Industry Report 2009.

Multiplex Industry during the first quarter of current Financial Year 2010 has gone through a difficult phase due to the Indian Premier League (IPL) and the impasse between exhibitors and producers on revenue sharing leading to delay in movie releases. This has adversely

40 41

Management Discussion and Analysis

Annexure III to Directors’ Report : Disclosure as required under SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as on March 31, 2009

A. Particulars ESOS Scheme

1 Number of options granted 5,00,000

2 The Pricing Formula The closing market Price on the day prior to the date of grant.3 Number of options vested Nil

4 Number of options exercised Nil

5 Total number of shares arising as a result of exercise of options Nil

6 Number of options lapsed Nil

7 Variation in the terms of options N.A.

8 Money realised by exercise of options Nil

9 Total Number of Options in force 5,00,000

B. Employee-wise details of options granted to:

(i) Senior managerial personnel

Name No. of options granted

Pramod Arora 81,000

N. C. Gupta 81,000

Amitabh Vardhan 76,000

Nitin Sood 76,000

Gautam Dutta 66,000

Sunil Bhatnagar 20,000

Rakesh Kaul 20,000

Sumneet Kaur 20,000 Sanjay Walia 20,000

(ii) Any other employee who were granted, during any one year, options amounting to 5% or more of the options granted during the year

Name No. of options granted

NIL

(iii) Identified employees who were granted option, during any one year, equal or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

Name No. of options granted

NIL

C. Diluted Earnings Per Share pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 5.42

D. The impact on the profits and EPS of the fair value method is given in the table below :-

Rs.

Profit as reported 126,516,928.00

Add - Intrinsic Value Cost -

Less - Fair Value Cost 1,448,270.39

Profit as adjusted 125,068,657.61

Earning per share (Basic) as reported 5.50

Earning per share (Basic) adjusted 5.43

Earning per share (Diluted) as reported 5.42

Earning per share (Diluted) adjusted 5.36

E. Weighted average exercise price of Options whose

(a) Exercise price equals market price 88.00

(b) Exercise price is greater than market price Nil

(c) Exercise price is less than market price Nil

Weighted average fair value of options whose

(a) Exercise price equals market price 37.10

(b) Exercise price is greater than market price Nil

(c) Exercise price is less than market price Nil

F. Method and Assumptions used to estimate the fair value of options granted during the year:

The fair value has been calculated using the Black Scholes Option Pricing model

The Assumptions used in the model are as follows:

Date of grant 30-Jan-09

1. Risk Free Interest Rate 5.01%

2. Expected Life 3.70

3. Expected Volatility 51.80%

4. Dividend Yield 0.45%

5. Price of the underlying share in market at the time of the option grant (Rs.) 88.00

The following Management Discussion and Analysis Section should be read in conjunction with the financial statements and notes to accounts for the period ended 31st March, 2009. The reference to FY 09 and FY 08 in this section refers to the year ended 31st March, 2009 and year ended 31st March, 2008 respectively. This discussion contains certain forward looking statements based on current expectations, which entail various risks and uncertainties that could cause the actual results to differ materially from those reflected in them. All references to “PVR”, “we”, “our”, “Company” in this report refer to PVR Limited and should be construed accordingly.

Industry Structure & Development

India’s Film industry is one of the largest in the world with more than 1000 movie releases and over 3 billion movie goers annually. The filmed entertainment sector is estimated to have grown at a Compound Average Growth Rate (CAGR) of 17.7 percent over the past 3 years.

While the historical performance witnessed promising growth, the year 2008-09 heralded challenging times for the filmed entertainment industry

as a whole. It is estimated that the growth rate of the industry remained flat during last year owing to weak movie pipeline with less number of successful releases, unanticipated events such as launch of IPL and frequent bomb blasts, and consequent decline realizations from theatricals, Cable & Satellite rights and ancillary revenue streams.

In the long term, the industry is projected to grow at the CAGR of 9.1 percent during 2008-2013, and reach the size of INR 168.6 billion by 2013. The performance is expected to be mainly driven by improved contributions from multiplexes in the overall exhibition industry, rise in overseas box office collections and growth in home video segment. While theatrical collections continue to be the largest contributor to Industry revenues, ancillary revenue streams such as sale of TV rights, mobile rights, internet download rights etc are becoming increasingly important in the overall pie of the industry (Source: KPMG–The Indian Entertainment and Media Industry Report 2009.

Multiplex Industry during the first quarter of current Financial Year 2010 has gone through a difficult phase due to the Indian Premier League (IPL) and the impasse between exhibitors and producers on revenue sharing leading to delay in movie releases. This has adversely

40 41

impacted revenue generation of the Company. However the Management is hopeful to recover the shortfall in revenue in the remaining nine months period.

Opportunities1. Largest Industry - The Indian film industry is

one of the largest globally with a history of steady growth. With films being the most popular form of mass entertainment in India, the film industry has witnessed robust double-digit growth over the past decade with domestic box office collections. With favorable demographics and lack of affordable alternatives, the sector will sustain high growth in the coming years.

2. Demographic scenario supports long-term fundamentals: The sector’s growth is directly related to the changing demographic profile of the country. Robust macro forecasts and rising disposable income are expected to boost the spend on film exhibition sector.

3. Rising market for Indian film abroad: Indian expatriates and the worldwide embracing of Indian cultural products have created a strong new market for Indian films outside India. In recent times, the overseas market has been fast emerging as a primary source of revenue for the filmmakers because of the growing interest in the Hindi films amongst non-resident Indians and is further expected to promote the growth of Indian film industry.

4. Improvement in the quality and variety of content: Growing corporatisation in the film industry has opened up gateways for creative producers who have good scripts but no source of financing. Multiplexes are offering greater opportunities for creating content catering to the multiplex audience. This has enabled the producers to be more experimental with projects, creating new avenues for growth.

5. Adoption of Digital Technology: Digitalization of content is playing a major role in transforming the face of the Indian entertainment and media industry. Digital solutions in Filmed Entertainment have helped the producers & exhibitors to reach relevant audience and increase the number of prints with comparatively lower additional costs.

6. Integration across value chain and changing business mix creating additional value: On the back of high growth witnessed in the sector, film exhibition companies are increasingly looking for opportunities to vertically integrate across the film industry value chain (production, distribution and exhibition) and diversify their business mix into other entertainment-related revenue generating avenues such as food courts, gaming, advertising.

Threats/Risks and Mitigation Measures

1. Concentration risk: Significant expansion plans across various markets of India by the Multiplex Owners may lead to excess supply and unhealthy competition.

However in view of screen density in India being less than 12 screens per million population as compared to 117 screens per million in USA, we believe that the situation across the country is far from over supply.

2. Execution delays: There is a possibility of execution delays due to delay or failure in handover of properties from real estate developers due to pace of retail development or slowdown in organized retail and sluggish real estate activity.

Company has a team comprising of qualified executives which ensures timely execution and completion of projects.

3. Piracy: The difference between the average time lag between release of films in major Tier-I cities such as Mumbai and Tier-II cities is the highest in India, making significant scope for piracy. Increase in piracy activities can further hamper revenue streams from sale of rights for TV, DVD, CDs, mobiles etc. Further the shelf life of films in the last few years have reduced significantly, the success or failure of the film now depends largely on its performance in the opening weeks with the privacy having an adverse impact on legitimate revenues of the producers, distributor and exhibitors. We expect film industry in consultation with the Government of India, shall be able to address the issue of piracy successfully.

4. Quality of Content: Success in the film exhibition business is heavily dependent on the quality of the content being released and the flow of the content during the year. The success of a release can be highly unstable and seasonal, therefore impacting the performance of the business. With the advent of more and more professional entities into film production, the industry is becoming better and organised and is all set to roll out quality movies on a consistent basis thus producing quality movies for movie goers.

However we are of the view that the quality of the movies to be produced is expected to be better in the time to come.

5. Competition from other forms of entertainment - Supply of different types and formats of entertainment, like theme parks, movie-on-demand on DTH and cable platforms, IPL, Live Gaming, amongst others, could affect revenues. PVR has already moved towards lifestyle retail entertainment and opened a 24 lanes Bowling Centre & Karaoke Centre at Ambience

Internal Control Systems and their adequacy

The Company has adequate internal control systems commensurate with its size and need.

M/s KPMG periodically review all control systems and assists in monitoring and upgrading the effectiveness of control systems. The Audit Committee also review this process.

Material Developments in Human ResourcesRecruitment & Selection

At PVR, we believe in hiring potential talent and develop their skills further by putting up a structured and extensive training program to develop a team of professionals who would handle patrons by providing highest level of customer service in the entertainment world.

The stern process of selection encompasses evaluating candidates based on their educational background, Skill & Industry experience. Our linkage with best education and training institutes ensures constant supply of resources that are industry trained and ready to deliver on the values that govern the organization.

Industrial Relations

With our fair management practices across the board we ensure a congenial work environment and a good quality of work life.

Mall Gurgaon through its Joint Venture Company “PVR bluO Entertainment Limited” in technical and financial collaboration with Major Cineplex Group Plc. Thailand.

Product wise AnalysisThe Revenue Growth under various heads during

the year under review is summarised as under:

Revenue growth under various heads

(Rs. in Lacs) Year ended 31.03.2009 31.03.2008 growth

Income from Ticket Sales & Revenue Sharing 17,645 15,753 12%

Sale of Food and Beverages 5,427 4,649 17%

Advertisement & Royalty Income 3,825 2,934 30%

Other Operating Income 576 540 6%

Net Operating Income 27,473 23,876 15%

Other Income 398 594 -33%

Total Income 27,871 24,470 14%

Financial PerformanceThe Company’s financial performance is discussed

under the head “Financial Highlights” in Director’s Report to the Shareholders.

IPO Funds Utilisation

During the year under review the IPO proceeds were fully utilized for the purpose, the public offer was made i.e. for setting up new cinemas, investment in equity share capital of the subsidiaries and other General Corporate requirements of the Company.

Operating performanceFootfalls & Occupancy

The Company entertained around 17 million patrons at its cinemas during FY 09 as compared to 15.8 million patrons (excluding those at franchise cinemas) during the FY 08, registering a growth of 7%. The growth in footfalls was on account of addition of four new cinemas with 24 screens during the year.

Future Outlook

The Company has been pursuing an expansion plan that involves setting up of 42 additional screens in the next year, which will be in line with our strategy to be the major Cinema Exhibition player in the country.

Future outlook for the FY 2009-10 is positive and barring the unforseen circumstances the company’s performance is expected to show continued growth.

42 43

impacted revenue generation of the Company. However the Management is hopeful to recover the shortfall in revenue in the remaining nine months period.

Opportunities1. Largest Industry - The Indian film industry is

one of the largest globally with a history of steady growth. With films being the most popular form of mass entertainment in India, the film industry has witnessed robust double-digit growth over the past decade with domestic box office collections. With favorable demographics and lack of affordable alternatives, the sector will sustain high growth in the coming years.

2. Demographic scenario supports long-term fundamentals: The sector’s growth is directly related to the changing demographic profile of the country. Robust macro forecasts and rising disposable income are expected to boost the spend on film exhibition sector.

3. Rising market for Indian film abroad: Indian expatriates and the worldwide embracing of Indian cultural products have created a strong new market for Indian films outside India. In recent times, the overseas market has been fast emerging as a primary source of revenue for the filmmakers because of the growing interest in the Hindi films amongst non-resident Indians and is further expected to promote the growth of Indian film industry.

4. Improvement in the quality and variety of content: Growing corporatisation in the film industry has opened up gateways for creative producers who have good scripts but no source of financing. Multiplexes are offering greater opportunities for creating content catering to the multiplex audience. This has enabled the producers to be more experimental with projects, creating new avenues for growth.

5. Adoption of Digital Technology: Digitalization of content is playing a major role in transforming the face of the Indian entertainment and media industry. Digital solutions in Filmed Entertainment have helped the producers & exhibitors to reach relevant audience and increase the number of prints with comparatively lower additional costs.

6. Integration across value chain and changing business mix creating additional value: On the back of high growth witnessed in the sector, film exhibition companies are increasingly looking for opportunities to vertically integrate across the film industry value chain (production, distribution and exhibition) and diversify their business mix into other entertainment-related revenue generating avenues such as food courts, gaming, advertising.

Threats/Risks and Mitigation Measures

1. Concentration risk: Significant expansion plans across various markets of India by the Multiplex Owners may lead to excess supply and unhealthy competition.

However in view of screen density in India being less than 12 screens per million population as compared to 117 screens per million in USA, we believe that the situation across the country is far from over supply.

2. Execution delays: There is a possibility of execution delays due to delay or failure in handover of properties from real estate developers due to pace of retail development or slowdown in organized retail and sluggish real estate activity.

Company has a team comprising of qualified executives which ensures timely execution and completion of projects.

3. Piracy: The difference between the average time lag between release of films in major Tier-I cities such as Mumbai and Tier-II cities is the highest in India, making significant scope for piracy. Increase in piracy activities can further hamper revenue streams from sale of rights for TV, DVD, CDs, mobiles etc. Further the shelf life of films in the last few years have reduced significantly, the success or failure of the film now depends largely on its performance in the opening weeks with the privacy having an adverse impact on legitimate revenues of the producers, distributor and exhibitors. We expect film industry in consultation with the Government of India, shall be able to address the issue of piracy successfully.

4. Quality of Content: Success in the film exhibition business is heavily dependent on the quality of the content being released and the flow of the content during the year. The success of a release can be highly unstable and seasonal, therefore impacting the performance of the business. With the advent of more and more professional entities into film production, the industry is becoming better and organised and is all set to roll out quality movies on a consistent basis thus producing quality movies for movie goers.

However we are of the view that the quality of the movies to be produced is expected to be better in the time to come.

5. Competition from other forms of entertainment - Supply of different types and formats of entertainment, like theme parks, movie-on-demand on DTH and cable platforms, IPL, Live Gaming, amongst others, could affect revenues. PVR has already moved towards lifestyle retail entertainment and opened a 24 lanes Bowling Centre & Karaoke Centre at Ambience

Internal Control Systems and their adequacy

The Company has adequate internal control systems commensurate with its size and need.

M/s KPMG periodically review all control systems and assists in monitoring and upgrading the effectiveness of control systems. The Audit Committee also review this process.

Material Developments in Human ResourcesRecruitment & Selection

At PVR, we believe in hiring potential talent and develop their skills further by putting up a structured and extensive training program to develop a team of professionals who would handle patrons by providing highest level of customer service in the entertainment world.

The stern process of selection encompasses evaluating candidates based on their educational background, Skill & Industry experience. Our linkage with best education and training institutes ensures constant supply of resources that are industry trained and ready to deliver on the values that govern the organization.

Industrial Relations

With our fair management practices across the board we ensure a congenial work environment and a good quality of work life.

Mall Gurgaon through its Joint Venture Company “PVR bluO Entertainment Limited” in technical and financial collaboration with Major Cineplex Group Plc. Thailand.

Product wise AnalysisThe Revenue Growth under various heads during

the year under review is summarised as under:

Revenue growth under various heads

(Rs. in Lacs) Year ended 31.03.2009 31.03.2008 growth

Income from Ticket Sales & Revenue Sharing 17,645 15,753 12%

Sale of Food and Beverages 5,427 4,649 17%

Advertisement & Royalty Income 3,825 2,934 30%

Other Operating Income 576 540 6%

Net Operating Income 27,473 23,876 15%

Other Income 398 594 -33%

Total Income 27,871 24,470 14%

Financial PerformanceThe Company’s financial performance is discussed

under the head “Financial Highlights” in Director’s Report to the Shareholders.

IPO Funds Utilisation

During the year under review the IPO proceeds were fully utilized for the purpose, the public offer was made i.e. for setting up new cinemas, investment in equity share capital of the subsidiaries and other General Corporate requirements of the Company.

Operating performanceFootfalls & Occupancy

The Company entertained around 17 million patrons at its cinemas during FY 09 as compared to 15.8 million patrons (excluding those at franchise cinemas) during the FY 08, registering a growth of 7%. The growth in footfalls was on account of addition of four new cinemas with 24 screens during the year.

Future Outlook

The Company has been pursuing an expansion plan that involves setting up of 42 additional screens in the next year, which will be in line with our strategy to be the major Cinema Exhibition player in the country.

Future outlook for the FY 2009-10 is positive and barring the unforseen circumstances the company’s performance is expected to show continued growth.

42 43

Report on Corporate Governance

Name of the Category Shareholding Number Attendance No. of Number of CommitteeDirector in the of Board at the last other Memberships and Company Meetings AGM held Directorships Chairmanship in all (No. of attended on Sept. 30, Companies including Shares) durng the 2008 PVR Limited year

Member- Chairman- ships ship

Ajay Bijli Promoter, 102922 6 No 2 2 1 Executive Director

Sanjeev Kumar Executive Director 10000 6 Yes 2 2 -

Sumit Chandwani Non Executive - 3 Yes 4 4 1 Independent

Vikram Bakshi Non Executive - 4 Yes 4 3 - Independent

Renaud Jean Palliere Non Executive - 2 No - - - Independent

Sanjay Khanna Non Executive 7500 6 No - - - Independent

Ravi. K. Sinha Non Executive - 5 Yes 2 3 1

Corporate GovernanceAs mandatory under Clause 49 of the Listing

Agreement, the company has complied with the conditions of Corporate Governance by establishment of a framework for compliance with the SEBI Regulations.

Company’s Philosophy on Corporate Governance

PVR believes in adopting and adhering the best practices in the area of Corporate Governance and recognizes that good Corporate Governance is essential to build and retain the confidence of its stakeholders vis a vis enhancing corporate performance and accountability.

Corporate Governance has become integral part of PVR in its pursuit of excellence, growth and value creation. It continuously endeavors to leverage available resources for translating opportunities into reality. During the year under review, the Board of Directors, Management and Employees continued its pursuit of achieving these objectives through the adoption and monitoring of prudent business plans, monitoring of major risks of the Company’s business and that the Company pursues policies and procedures to satisfy

its legal and ethical responsibilities. The Company’s Philosophy is to achieve business excellence and optimize long-term Shareholders’ value on a sustained basis by ethical business conduct. The Company is committed to transparency in all its dealings and places strong emphasis on business ethics.

Board of DirectorsComposition of the Board

As on 31st March, 2009, the Company had seven Directors on the Board. The Board is comprised of two Executive Directors, five Non Executive Directors out of which four are the Independent Directors.

The Company has an Executive Chairman and the number of the Independent Directors is not less than half of total number of Directors.

The terms of reference of the Board of Directors are in accordance with those inter-alia specified in Clause 49 of the Listing Agreement and other applicable provisions of the Companies Act, 1956.

Details of the Board of Directors as on 31st March, 2009 in terms of their directorship/membership in committees of public companies and attendance in the last Annual General Meeting & Board Meetings are as follows:

Number of Board Meetings

The Board of Directors met 6 (six) times during the year as follows:

• April 15, 2008,• June 2, 2008, • July 31, 2008, • October 24, 2008,• November 18, 2008 and • January 30, 2009

Remuneration Paid to Directors

Executive Directors

The details of the remuneration to the Executive Directors are as under:

Mr. Ajay Bijli, Chairman cum Managing Director (CMD) and Mr. Sanjeev Kumar, Joint Managing Director (JMD) of the company were paid following remuneration and perquisites during the year under review:

Amount (Rs.)

Remuneration Mr. Ajay Bijli Mr. Sanjeev Kumar

Salary & Perquisites 18,339,097 9,185,548

Contribution to 1,380,852 690,426Provident Fund

Total 19,719,949 9,875,974

Perquisites include Company leased accommodation/HRA.

Non Executive Directors

During the year under review, Mr. Ravi K. Sinha a Non-Executive Director was paid annual professional fees of Rs. 2,400,000 (Rupees Twenty Four Lacs).

Further, the following Non-Executive Directors of the company were paid remuneration (Sitting fees) for attending meetings of the Board/Committee of the Directors as follows:

Name of the Directors Sitting Fees (Rs.)

Mr. Sanjay Khanna 2,60,000.00

Mr. Ravi K. Sinha 1,20,000.00

Mr. Sumit Chandwani 1,60,000.00

Mr. Vikram Bakshi 2,00,000.00

Mr. Renaud Jean Palliere 1,00,000.00

Total 8,40,000.00

The company does not have any direct pecuniary relationship/transaction with any of its Non Executive Directors except Mr. Ravi K. Sinha who is paid monthly retainership fees for advising the Company on Corporate matters.

Code of Conduct

The Board has laid down a Code of Conduct for all Board members and senior management of the Company which is available on the website of the Company www.pvrcinemas.com. All Board members and senior management that includes company 44 45

Report on Corporate Governance

Name of the Category Shareholding Number Attendance No. of Number of CommitteeDirector in the of Board at the last other Memberships and Company Meetings AGM held Directorships Chairmanship in all (No. of attended on Sept. 30, Companies including Shares) durng the 2008 PVR Limited year

Member- Chairman- ships ship

Ajay Bijli Promoter, 102922 6 No 2 2 1 Executive Director

Sanjeev Kumar Executive Director 10000 6 Yes 2 2 -

Sumit Chandwani Non Executive - 3 Yes 4 4 1 Independent

Vikram Bakshi Non Executive - 4 Yes 4 3 - Independent

Renaud Jean Palliere Non Executive - 2 No - - - Independent

Sanjay Khanna Non Executive 7500 6 No - - - Independent

Ravi. K. Sinha Non Executive - 5 Yes 2 3 1

Corporate GovernanceAs mandatory under Clause 49 of the Listing

Agreement, the company has complied with the conditions of Corporate Governance by establishment of a framework for compliance with the SEBI Regulations.

Company’s Philosophy on Corporate Governance

PVR believes in adopting and adhering the best practices in the area of Corporate Governance and recognizes that good Corporate Governance is essential to build and retain the confidence of its stakeholders vis a vis enhancing corporate performance and accountability.

Corporate Governance has become integral part of PVR in its pursuit of excellence, growth and value creation. It continuously endeavors to leverage available resources for translating opportunities into reality. During the year under review, the Board of Directors, Management and Employees continued its pursuit of achieving these objectives through the adoption and monitoring of prudent business plans, monitoring of major risks of the Company’s business and that the Company pursues policies and procedures to satisfy

its legal and ethical responsibilities. The Company’s Philosophy is to achieve business excellence and optimize long-term Shareholders’ value on a sustained basis by ethical business conduct. The Company is committed to transparency in all its dealings and places strong emphasis on business ethics.

Board of DirectorsComposition of the Board

As on 31st March, 2009, the Company had seven Directors on the Board. The Board is comprised of two Executive Directors, five Non Executive Directors out of which four are the Independent Directors.

The Company has an Executive Chairman and the number of the Independent Directors is not less than half of total number of Directors.

The terms of reference of the Board of Directors are in accordance with those inter-alia specified in Clause 49 of the Listing Agreement and other applicable provisions of the Companies Act, 1956.

Details of the Board of Directors as on 31st March, 2009 in terms of their directorship/membership in committees of public companies and attendance in the last Annual General Meeting & Board Meetings are as follows:

Number of Board Meetings

The Board of Directors met 6 (six) times during the year as follows:

• April 15, 2008,• June 2, 2008, • July 31, 2008, • October 24, 2008,• November 18, 2008 and • January 30, 2009

Remuneration Paid to Directors

Executive Directors

The details of the remuneration to the Executive Directors are as under:

Mr. Ajay Bijli, Chairman cum Managing Director (CMD) and Mr. Sanjeev Kumar, Joint Managing Director (JMD) of the company were paid following remuneration and perquisites during the year under review:

Amount (Rs.)

Remuneration Mr. Ajay Bijli Mr. Sanjeev Kumar

Salary & Perquisites 18,339,097 9,185,548

Contribution to 1,380,852 690,426Provident Fund

Total 19,719,949 9,875,974

Perquisites include Company leased accommodation/HRA.

Non Executive Directors

During the year under review, Mr. Ravi K. Sinha a Non-Executive Director was paid annual professional fees of Rs. 2,400,000 (Rupees Twenty Four Lacs).

Further, the following Non-Executive Directors of the company were paid remuneration (Sitting fees) for attending meetings of the Board/Committee of the Directors as follows:

Name of the Directors Sitting Fees (Rs.)

Mr. Sanjay Khanna 2,60,000.00

Mr. Ravi K. Sinha 1,20,000.00

Mr. Sumit Chandwani 1,60,000.00

Mr. Vikram Bakshi 2,00,000.00

Mr. Renaud Jean Palliere 1,00,000.00

Total 8,40,000.00

The company does not have any direct pecuniary relationship/transaction with any of its Non Executive Directors except Mr. Ravi K. Sinha who is paid monthly retainership fees for advising the Company on Corporate matters.

Code of Conduct

The Board has laid down a Code of Conduct for all Board members and senior management of the Company which is available on the website of the Company www.pvrcinemas.com. All Board members and senior management that includes company 44 45

executives’ one level below the Board have affirmed compliance with the said Code. A declaration signed by the Chairman to this effect is provided elsewhere in the Annual Report.

Audit Committee

Composition, Meetings and Attendance:

As on March 31, 2009, the Audit Committee comprises of four Non -Executive and Independent Directors. The Chief Financial Officer, the Statutory Auditors and the Internal Auditors are the invitees in the Committee meetings.

The Company Secretary acts as the Secretary of the Audit Committee.

The Terms of reference of the Audit Committee are in accordance with those specified in Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956.

Composition and Attendance

Mr. Sumit Chandwani who has knowledge in Finance and Accounts is the Chairman of the Audit Committee. During the year under review the Audit Committee met four times on June 02, 2008; July 31, 2008; October 21, 2008 and January 30, 2009 and the maximum gap between any such two meetings did not exceed four months as stipulated under Clause 49.

Name of the Members No. of meetings attended

Mr. Sumit Chandwani 2

Mr. Vikram Bakshi 4

Mr. Renaud Jean Palliere 2

Mr. Sanjay Khanna 3

Investors Grievance Committee

Terms of Reference

The Investors Grievance Committee focuses on shareholders’ grievances, monitor the response to investors’ queries besides strengthening of investor relations. It looks into all kinds of investor complaints including transfer of shares, non-receipt of dividends/ annual reports and other such issues.

Composition and Attendance

The Investor Grievance Committee comprises of three Directors, two of whom are Non-Executive Directors.

During the year under review the Investors Grievance Committee met four times on June 02, 2008; July 31, 2008; October 21, 2008 and January 30, 2009.

Name of the No. of meetingsMembers attended

Mr. Ajay Bijli 4

Mr. Sumit Chandwani 2

Mr. Sanjay Khanna 3

The Company Secretary, being the Compliance Officer, is entrusted with the responsibility, to look into the redressal of the Shareholders and investors complaints and report the same to the Investor Grievance Committee.

Remuneration Committee

Terms of Reference

The Remuneration Committee of the Board consists of four members, all of whom are Independent Directors. The Remuneration Committee has been constituted for the determination of remuneration packages of the Directors.

Composition

Name of the No. of meetingsMembers attended

Mr. Sumit Chandwani 1

Mr. Vikram Bakshi 1

Mr. Renaud Jean Palliere 1

Mr. Sanjay Khanna 1

During the year ended March 31, 2009, the Remuneration Committee meeting was held on June 02, 2008.

The Remuneration policy of the Company is aimed at rewarding performance, based on review of the achievements on a regular basis. The remuneration paid to the Executive Directors is recommended by the Remuneration Committee and approved by the Board of Directors in the Board Meeting, subject to the subsequent approval by the shareholders and such other authorities as and when required.

Compensation Committee

The Compensation Committee administers and supervises the ESPS and ESOS besides determination of all related matters.

Composition

Name of the No. of meetingsMembers attended

Mr. Ajay Bijli 1

Mr. Vikram Bakshi 1

Mr. Sumit Chandwani Nil

Mr. Ravi K. Sinha 1

During the year ended March 31, 2009, the Compensation Committee met only once on January 30, 2009.

Details of complaints/ queries received and resolved during the Financial Year 2008-09 are as follows:

Nature of Complaints Number of Complaints/ complaints / Queries Queries resolved received during during the the year year

Non-receipt of Securities 3 3

Non-receipt of 2 2Annual Report

Non-receipt of 9 9Dividend Warrants

Non-receipt of 4 4refund orders

Total 18 18

The transfer/transmission/split of physical share certificates is approved by the Company Secretary at least once in a fortnight on the basis of recommendations received from the Company’s Registrars and Share Transfer Agent M/s Karvy Computershare Private Limited. The Investors may lodge their grievances through e-mails at cosec@pvrcinemas.com or through letters addressed to Mr. Purnachander, Unit PVR Ltd., Karvy Computershare Private Limited, 17-24, Vittal Rao Nagar, Madhapur, Hyderabad-500 081.

General Body Meetings:Details of the last three Annual General Meetings (AGMs) of the Company are as under:

Financial Day & Date Time Venue Special Resolutions passedYear

2005-06 Wednesday, 9:30 A.M. 61, Basant Lok, (i) Increasing the FII Shareholding limit September 6, Vasant Vihar, under Foreign Exchange Management 2006 New Delhi - 110057 Act, 1999;

(ii) Utilization of IPO funds in a manner other than that mentioned in the prospectus.

2006-07 Saturday, 10:30 A.M. 61, Basant Lok, (i) Issue of Foreign Currency Convertible August 18, Vasant Vihar, Bonds pursuant to the provisions of 2007 New Delhi - 110057 Section 81(1A) of the Companies Act, 1956;

(ii) Issue of Warrants convertible into Equity Shares pursuant to the provisions of Section 81(1A) of the Companies Act, 1956; and

(iii) Increase in the FII Shareholding limit under Foreign Exchange Management Act, 1999.

2007-08 Friday, 10:00 A.M. The Claremont Hotel (i) Approval to hold office or Place of Profit September 30, & Convention Centre, under the Company. 2008 Aaya Nagar, Mehrauli Gurgaon Road, New Delhi – 110 030

46 47

executives’ one level below the Board have affirmed compliance with the said Code. A declaration signed by the Chairman to this effect is provided elsewhere in the Annual Report.

Audit Committee

Composition, Meetings and Attendance:

As on March 31, 2009, the Audit Committee comprises of four Non -Executive and Independent Directors. The Chief Financial Officer, the Statutory Auditors and the Internal Auditors are the invitees in the Committee meetings.

The Company Secretary acts as the Secretary of the Audit Committee.

The Terms of reference of the Audit Committee are in accordance with those specified in Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956.

Composition and Attendance

Mr. Sumit Chandwani who has knowledge in Finance and Accounts is the Chairman of the Audit Committee. During the year under review the Audit Committee met four times on June 02, 2008; July 31, 2008; October 21, 2008 and January 30, 2009 and the maximum gap between any such two meetings did not exceed four months as stipulated under Clause 49.

Name of the Members No. of meetings attended

Mr. Sumit Chandwani 2

Mr. Vikram Bakshi 4

Mr. Renaud Jean Palliere 2

Mr. Sanjay Khanna 3

Investors Grievance Committee

Terms of Reference

The Investors Grievance Committee focuses on shareholders’ grievances, monitor the response to investors’ queries besides strengthening of investor relations. It looks into all kinds of investor complaints including transfer of shares, non-receipt of dividends/ annual reports and other such issues.

Composition and Attendance

The Investor Grievance Committee comprises of three Directors, two of whom are Non-Executive Directors.

During the year under review the Investors Grievance Committee met four times on June 02, 2008; July 31, 2008; October 21, 2008 and January 30, 2009.

Name of the No. of meetingsMembers attended

Mr. Ajay Bijli 4

Mr. Sumit Chandwani 2

Mr. Sanjay Khanna 3

The Company Secretary, being the Compliance Officer, is entrusted with the responsibility, to look into the redressal of the Shareholders and investors complaints and report the same to the Investor Grievance Committee.

Remuneration Committee

Terms of Reference

The Remuneration Committee of the Board consists of four members, all of whom are Independent Directors. The Remuneration Committee has been constituted for the determination of remuneration packages of the Directors.

Composition

Name of the No. of meetingsMembers attended

Mr. Sumit Chandwani 1

Mr. Vikram Bakshi 1

Mr. Renaud Jean Palliere 1

Mr. Sanjay Khanna 1

During the year ended March 31, 2009, the Remuneration Committee meeting was held on June 02, 2008.

The Remuneration policy of the Company is aimed at rewarding performance, based on review of the achievements on a regular basis. The remuneration paid to the Executive Directors is recommended by the Remuneration Committee and approved by the Board of Directors in the Board Meeting, subject to the subsequent approval by the shareholders and such other authorities as and when required.

Compensation Committee

The Compensation Committee administers and supervises the ESPS and ESOS besides determination of all related matters.

Composition

Name of the No. of meetingsMembers attended

Mr. Ajay Bijli 1

Mr. Vikram Bakshi 1

Mr. Sumit Chandwani Nil

Mr. Ravi K. Sinha 1

During the year ended March 31, 2009, the Compensation Committee met only once on January 30, 2009.

Details of complaints/ queries received and resolved during the Financial Year 2008-09 are as follows:

Nature of Complaints Number of Complaints/ complaints / Queries Queries resolved received during during the the year year

Non-receipt of Securities 3 3

Non-receipt of 2 2Annual Report

Non-receipt of 9 9Dividend Warrants

Non-receipt of 4 4refund orders

Total 18 18

The transfer/transmission/split of physical share certificates is approved by the Company Secretary at least once in a fortnight on the basis of recommendations received from the Company’s Registrars and Share Transfer Agent M/s Karvy Computershare Private Limited. The Investors may lodge their grievances through e-mails at cosec@pvrcinemas.com or through letters addressed to Mr. Purnachander, Unit PVR Ltd., Karvy Computershare Private Limited, 17-24, Vittal Rao Nagar, Madhapur, Hyderabad-500 081.

General Body Meetings:Details of the last three Annual General Meetings (AGMs) of the Company are as under:

Financial Day & Date Time Venue Special Resolutions passedYear

2005-06 Wednesday, 9:30 A.M. 61, Basant Lok, (i) Increasing the FII Shareholding limit September 6, Vasant Vihar, under Foreign Exchange Management 2006 New Delhi - 110057 Act, 1999;

(ii) Utilization of IPO funds in a manner other than that mentioned in the prospectus.

2006-07 Saturday, 10:30 A.M. 61, Basant Lok, (i) Issue of Foreign Currency Convertible August 18, Vasant Vihar, Bonds pursuant to the provisions of 2007 New Delhi - 110057 Section 81(1A) of the Companies Act, 1956;

(ii) Issue of Warrants convertible into Equity Shares pursuant to the provisions of Section 81(1A) of the Companies Act, 1956; and

(iii) Increase in the FII Shareholding limit under Foreign Exchange Management Act, 1999.

2007-08 Friday, 10:00 A.M. The Claremont Hotel (i) Approval to hold office or Place of Profit September 30, & Convention Centre, under the Company. 2008 Aaya Nagar, Mehrauli Gurgaon Road, New Delhi – 110 030

46 47

Resolutions passed during the year through Postal Ballot

During the year under review, the Company has conducted a Postal Ballot in pursuance to the provisions of Section 192A of the Companies Act, 1956 and Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 for seeking approval of the shareholders:

By way of Special Resolutions:

1. Granting of Stock Options to the employees under Employees Stock Option Scheme; and

2. Alteration in the Articles of Association of the Company;

By way of Ordinary Resolutions:

1. Approving Agreements with Mr. Ajay Bijli, Chairman cum Managing Director and Mr. Sanjeev Kumar, Joint Managing Director; and

2. Authorisation to the Board of Directors of the Company for creation of charge/mortgage/hypothecation/encumbrance in terms of Section 293(1)(a) of the Companies Act, 1956.

The notice of the Postal Ballot was published in Business Standard (English daily) and Business Standard Hindi (Vernacular newspaper).

M/s Brajesh Kumar & Associates, Company Secretaries, New Delhi were appointed as scrutinizer by the Board. Mr. Brajesh Kumar had submitted his report on January 05, 2009 based on which same day result was declared by the company.

The summary of the results are as follows:

Resolution I: Granting of Stock Options to the employees under Employees Stock Option Scheme

Particulars No. of No. of % Postal Shares Ballot Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 238 136,48,123 100%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 11 285 0.00%resolutions (%age) (of Total valid shares under Postal Ballots received)

Resolution II: Alteration in the Articles of Association of the Company;

Particulars No. of No. of % Postal Shares Ballot Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 240 136,48,100 100%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 9 264 0.00%resolutions (%age) (of Total valid shares under Postal Ballots

received)

Resolution III: Approving Agreements with Mr. Ajay Bijli, Chairman cum Managing Director and Mr. Sanjeev Kumar, Joint Managing Director;

Particulars No. of No. of % Postal Shares Ballot

Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 240 136,48,054 100%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 9 310 0.00%resolutions (%age) (of Total valid shares under Postal Ballots received)

Resolution IV: Authorisation to the Board of Directors of the Company for creation of charge/mortgage/hypothecation/encumbrance in terms of Section 293(1)(a) of the Companies Act, 1956

Particulars No. of No. of % Postal Shares Ballot Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 235 122,36,355 89.65%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 14 14,12,036 10.35%resolutions (%age) (of Total valid shares under Postal Ballots received)

The Chairman after pursuing the scrutinizer’s report announced that the resolutions as per the Postal Ballot Notice were duly passed with requisite majority and directed that the resolutions be recorded in the minute book.

Subsidiary CompaniesThe Clause 49 of the listing agreement defines a

“Material Non Listed Indian Subsidiary” as an unlisted subsidiary, incorporated in India whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively of the listed holding company and its subsidiary in the immediately preceding accounting year.

PVR Pictures Limited is the material non listed Indian subsidiary of the Compamy and has Mr. Sumit Chandwani an Independent Director on the Board of PVR Pictures Limited.

Disclosuresa) Related Party Transactions:

There were no materially significant related party transactions i.e. transactions of the company of material nature, with its promoters, directors or the management or their relatives, its subsidiaries etc. during the year, that may have potential conflict with the interests of the Company at large. All related party transactions have been disclosed in the Notes to the Accounts appearing elsewhere in this report.

b) Compliances made by the Company:

There were no non-compliances during the last three years by the Company in respect of any matter related to Capital Market.

c) Compliance of newly inserted Clause 5A of the Listing Agreement:

As required under Clause 5A of the Listing Agreement there were six cases in respect of 176 Equity shares of the Company which could not be credited in the respective demat accounts of the Members due to want of certain information for which M/s Karvy Computershare Private Limited has already sent requisite reminders for intimating desired information. 176 equity shares in demat form have already been credited to a suspense account opened by the company.

d) The Company During the year forfeited a sum of Rs. 258 lacs due to non exercise of rights to convert 12,00,000 Convertible Warrants into Equity Shares issued to one of the promoter.

There were no penalties imposed or strictures passed on the Company by Stock Exchanges, SEBI or any other Statutory Authority. The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreements entered into with the stock exchanges.

ManagementThe Management Discussion and Analysis Report is

given separately and forms integral part of this Report.

CMD/CFO Certifi cationThe Certificate from Mr. Ajay Bijli, Chairman cum

Managing Director and Mr. Nitin Sood, Chief Financial 48 49

Resolutions passed during the year through Postal Ballot

During the year under review, the Company has conducted a Postal Ballot in pursuance to the provisions of Section 192A of the Companies Act, 1956 and Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 for seeking approval of the shareholders:

By way of Special Resolutions:

1. Granting of Stock Options to the employees under Employees Stock Option Scheme; and

2. Alteration in the Articles of Association of the Company;

By way of Ordinary Resolutions:

1. Approving Agreements with Mr. Ajay Bijli, Chairman cum Managing Director and Mr. Sanjeev Kumar, Joint Managing Director; and

2. Authorisation to the Board of Directors of the Company for creation of charge/mortgage/hypothecation/encumbrance in terms of Section 293(1)(a) of the Companies Act, 1956.

The notice of the Postal Ballot was published in Business Standard (English daily) and Business Standard Hindi (Vernacular newspaper).

M/s Brajesh Kumar & Associates, Company Secretaries, New Delhi were appointed as scrutinizer by the Board. Mr. Brajesh Kumar had submitted his report on January 05, 2009 based on which same day result was declared by the company.

The summary of the results are as follows:

Resolution I: Granting of Stock Options to the employees under Employees Stock Option Scheme

Particulars No. of No. of % Postal Shares Ballot Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 238 136,48,123 100%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 11 285 0.00%resolutions (%age) (of Total valid shares under Postal Ballots received)

Resolution II: Alteration in the Articles of Association of the Company;

Particulars No. of No. of % Postal Shares Ballot Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 240 136,48,100 100%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 9 264 0.00%resolutions (%age) (of Total valid shares under Postal Ballots

received)

Resolution III: Approving Agreements with Mr. Ajay Bijli, Chairman cum Managing Director and Mr. Sanjeev Kumar, Joint Managing Director;

Particulars No. of No. of % Postal Shares Ballot

Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 240 136,48,054 100%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 9 310 0.00%resolutions (%age) (of Total valid shares under Postal Ballots received)

Resolution IV: Authorisation to the Board of Directors of the Company for creation of charge/mortgage/hypothecation/encumbrance in terms of Section 293(1)(a) of the Companies Act, 1956

Particulars No. of No. of % Postal Shares Ballot Forms

Total Postal Ballot 282 136,49,654 59.31%forms received (of total no. of Equity shares)

Less: Invalid Postal 33 1,238 0.01%Ballot forms (of Total no. of shares under Postal Ballots received)

Net valid Postal 249 136,48,416 99.99%Ballot forms (of Total valid shares under Postal Ballots received)

Votes cast in favour of 235 122,36,355 89.65%the resolutions (%age) (of Total valid shares under Postal Ballots received)

Votes cast against the 14 14,12,036 10.35%resolutions (%age) (of Total valid shares under Postal Ballots received)

The Chairman after pursuing the scrutinizer’s report announced that the resolutions as per the Postal Ballot Notice were duly passed with requisite majority and directed that the resolutions be recorded in the minute book.

Subsidiary CompaniesThe Clause 49 of the listing agreement defines a

“Material Non Listed Indian Subsidiary” as an unlisted subsidiary, incorporated in India whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively of the listed holding company and its subsidiary in the immediately preceding accounting year.

PVR Pictures Limited is the material non listed Indian subsidiary of the Compamy and has Mr. Sumit Chandwani an Independent Director on the Board of PVR Pictures Limited.

Disclosuresa) Related Party Transactions:

There were no materially significant related party transactions i.e. transactions of the company of material nature, with its promoters, directors or the management or their relatives, its subsidiaries etc. during the year, that may have potential conflict with the interests of the Company at large. All related party transactions have been disclosed in the Notes to the Accounts appearing elsewhere in this report.

b) Compliances made by the Company:

There were no non-compliances during the last three years by the Company in respect of any matter related to Capital Market.

c) Compliance of newly inserted Clause 5A of the Listing Agreement:

As required under Clause 5A of the Listing Agreement there were six cases in respect of 176 Equity shares of the Company which could not be credited in the respective demat accounts of the Members due to want of certain information for which M/s Karvy Computershare Private Limited has already sent requisite reminders for intimating desired information. 176 equity shares in demat form have already been credited to a suspense account opened by the company.

d) The Company During the year forfeited a sum of Rs. 258 lacs due to non exercise of rights to convert 12,00,000 Convertible Warrants into Equity Shares issued to one of the promoter.

There were no penalties imposed or strictures passed on the Company by Stock Exchanges, SEBI or any other Statutory Authority. The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreements entered into with the stock exchanges.

ManagementThe Management Discussion and Analysis Report is

given separately and forms integral part of this Report.

CMD/CFO Certifi cationThe Certificate from Mr. Ajay Bijli, Chairman cum

Managing Director and Mr. Nitin Sood, Chief Financial 48 49

Officer in terms of Clause 49 (V) of the listing agreement with the stock exchanges for the year under review as placed before the Board is enclosed at the end of this report.

Shareholdersa) Means of Communication

The company interacts with its shareholders through multiple forms of corporate and financial communication such as annual reports, result announcement and media releases. These results are also made available at the web site of the company www.pvrcinemas.com. The web site also displays official news releases.

All material information about the Company is promptly sent through facsimile to the Stock Exchanges where the shares of the Company are listed.

The Annual Results of the Company were published in the following newspapers:

Newspapers Language Region

Financial Express English Delhi, Ahmedabad, Chandigarh, Lucknow, Bangalore, Bombay, Kolkata, Chennai and Hyderabad.

Jansatta Hindi New Delhi

BSE SENSEX NIFTY INDEX

Jan 09 114.25 84.60 114.50 85.00

Feb 09 99.00 78.50 94.00 70.05

Mar 09 83.60 67.20 81.40 68.15

Business Standard English Delhi, Ahmedabad, Bangalore, Bombay, Bhubaneswar, Kolkata, Chandigarh, Cochin, Hyderabad, Lucknow, Chennai and Pune.

General Shareholders’ Information1. Annual General Meeting : 30th day of September 2009 10:30 A.M. at The Claremont Hotel & Convention Centre, Mehrauli Gurgaon Road, New Delhi - 110 030

2. Financial calendar : Tentative Schedule: Accounting Year 1st April to 31st March Adoption of Quarterly Results for the Quarter Ended: June 30, 2009, end July, 2009 September 30, 2009 end October, 2009 December 31, 2009 end January, 2010 March 31, 2010 end June, 2010

3. Book Closure Date : 21.09.2008 to 30.09.2008 (both days inclusive)

4. Dividend Payment : Within prescribed period of time.

5. Listing on Stock Exchanges : Bombay Stock Exchange Limited (BSE) National Stock Exchange of India Limited (NSE)

6. Stock Code : BSE Script Code : 532689; NSE Symbol : PVR ISIN : INE 191H01014

7. Market Price Data

Monthly High Low for the year under review:

NSE BSE

Month High Low High Low

Apr 08 208.90 176.55 208.00 179.90

May 08 209.00 182.15 209.80 183.00

June 08 199.00 159.00 199.85 160.25

July 08 185.00 157.00 183.00 160.20

Aug 08 207.80 171.00 208.75 169.00

Sep 08 202.95 139.00 203.50 130.00

Oct 08 158.00 78.05 155.00 77.00

Nov 08 109.95 62.25 109.90 61.00

Dec 08 103.70 58.20 103.50 57.50

9. Registrar and Transfer Agents : Karvy Computershare Private Limited (KCPL) 17-24, Vittal Rao Nagar, Madhapur, Hyderabad-500 081. Tel : +91-40-23420 815-828 Fax : +91-40-23420 814 Website: www.kcpl.karvy.com

10. Share Transfer System : Share transfers in physical form can be lodged with

KCPL at the above mentioned address

11 (a) Distribution Schedule

PVR LIMITEDConsolidated Distribution Schedule as on March 31, 2009

Category (Amount) No. of Cases % of Cases Total Shares Amount (Rs.) % of Amount

1-5000 21757 96.982262% 1259859 12598590 5.47%5001-10000 305 1.359544% 250563 2505630 1.09%10001-20000 160 0.713203% 243434 2434340 1.06%20001-30000 51 0.227334% 130967 1309670 0.57%30001-40000 22 0.098065% 79770 797700 0.35%40001-50000 32 0.142641% 152325 1523250 0.66%50001-100000 44 0.196131% 329450 3294500 1.43%100001 & Above 63 0.280824% 20567502 205675020 89.37%

Total 22434 100% 23013870 230138700 100%

50 51

8. Performance of PVR Share price in comparison to:

Officer in terms of Clause 49 (V) of the listing agreement with the stock exchanges for the year under review as placed before the Board is enclosed at the end of this report.

Shareholdersa) Means of Communication

The company interacts with its shareholders through multiple forms of corporate and financial communication such as annual reports, result announcement and media releases. These results are also made available at the web site of the company www.pvrcinemas.com. The web site also displays official news releases.

All material information about the Company is promptly sent through facsimile to the Stock Exchanges where the shares of the Company are listed.

The Annual Results of the Company were published in the following newspapers:

Newspapers Language Region

Financial Express English Delhi, Ahmedabad, Chandigarh, Lucknow, Bangalore, Bombay, Kolkata, Chennai and Hyderabad.

Jansatta Hindi New Delhi

BSE SENSEX NIFTY INDEX

Jan 09 114.25 84.60 114.50 85.00

Feb 09 99.00 78.50 94.00 70.05

Mar 09 83.60 67.20 81.40 68.15

Business Standard English Delhi, Ahmedabad, Bangalore, Bombay, Bhubaneswar, Kolkata, Chandigarh, Cochin, Hyderabad, Lucknow, Chennai and Pune.

General Shareholders’ Information1. Annual General Meeting : 30th day of September 2009 10:30 A.M. at The Claremont Hotel & Convention Centre, Mehrauli Gurgaon Road, New Delhi - 110 030

2. Financial calendar : Tentative Schedule: Accounting Year 1st April to 31st March Adoption of Quarterly Results for the Quarter Ended: June 30, 2009, end July, 2009 September 30, 2009 end October, 2009 December 31, 2009 end January, 2010 March 31, 2010 end June, 2010

3. Book Closure Date : 21.09.2008 to 30.09.2008 (both days inclusive)

4. Dividend Payment : Within prescribed period of time.

5. Listing on Stock Exchanges : Bombay Stock Exchange Limited (BSE) National Stock Exchange of India Limited (NSE)

6. Stock Code : BSE Script Code : 532689; NSE Symbol : PVR ISIN : INE 191H01014

7. Market Price Data

Monthly High Low for the year under review:

NSE BSE

Month High Low High Low

Apr 08 208.90 176.55 208.00 179.90

May 08 209.00 182.15 209.80 183.00

June 08 199.00 159.00 199.85 160.25

July 08 185.00 157.00 183.00 160.20

Aug 08 207.80 171.00 208.75 169.00

Sep 08 202.95 139.00 203.50 130.00

Oct 08 158.00 78.05 155.00 77.00

Nov 08 109.95 62.25 109.90 61.00

Dec 08 103.70 58.20 103.50 57.50

9. Registrar and Transfer Agents : Karvy Computershare Private Limited (KCPL) 17-24, Vittal Rao Nagar, Madhapur, Hyderabad-500 081. Tel : +91-40-23420 815-828 Fax : +91-40-23420 814 Website: www.kcpl.karvy.com

10. Share Transfer System : Share transfers in physical form can be lodged with

KCPL at the above mentioned address

11 (a) Distribution Schedule

PVR LIMITEDConsolidated Distribution Schedule as on March 31, 2009

Category (Amount) No. of Cases % of Cases Total Shares Amount (Rs.) % of Amount

1-5000 21757 96.982262% 1259859 12598590 5.47%5001-10000 305 1.359544% 250563 2505630 1.09%10001-20000 160 0.713203% 243434 2434340 1.06%20001-30000 51 0.227334% 130967 1309670 0.57%30001-40000 22 0.098065% 79770 797700 0.35%40001-50000 32 0.142641% 152325 1523250 0.66%50001-100000 44 0.196131% 329450 3294500 1.43%100001 & Above 63 0.280824% 20567502 205675020 89.37%

Total 22434 100% 23013870 230138700 100%

50 51

8. Performance of PVR Share price in comparison to:

(b) Shareholding pattern

Consolidated Shareholding Pattern as on March 31, 2009

Sl. No. Category No. of Cases Total Shares % to Equity

1 Promoters 3 9480029 41.19%2 Foreign Institutional Investors 12 5462396 23.74%3 Mutual Funds 15 2003604 8.71%4 Resident Individuals 21659 2356912 10.24%5 Bodies Corporates 427 1415737 6.15%6 Financial Institutions / Banks 1 59295 0.26%7 Non-Resident Indians 250 192145 0.83%8 Clearing Members 62 21748 0.09%9 Trusts 5 2022004 8.79%

Total 22434 23013870 100%

12. Dematerialization of shares and liquidity

Our Equity Shares are tradable in dematerialized form since its listing. We have entered into agreement with both the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to facilitate trading in dematerialized form in India.

The breakup of Equity Share capital held with depositories and in physical form is as follows:

Sl. Category No. of Total Shares % to EquityNo. Holders

1 Physical 1,331 10,926 0.04747

2 NSDL 16,962 21,909,645 95.20191

3 CDSL 4,141 1,093,299 4.75060

Total 22,434 23,013,870 100.00

13. Address for correspondence :Mr. N.C. GuptaCompany Secretary & Compliance OfficerPVR Limited

Registered Office :61, Basant Lok, Vasant Vihar, New Delhi - 110057

Corporate Office :Block A, 4th Floor, Building No. 9DLF Cyber City, Phase IIIGurgaon, Haryana - 122002Investor grievance email : cosec@pvrcinemas.comTel : + 91-124-4708100Fax : + 91-124-4708101Website : www.pvrcinemas.com

14. Certificate on Corporate Governance A certificate from Practicing Company Secretary

on compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is enclosed at the end of this report.

For and on behalf of the Board

Place: Gurgaon, Haryana Ajay BijliDate: July 31, 2009 Chairman cum

Managing Director

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT

PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT, PURSUANT TO CLAUSE 49 OF THE

LISTING AGREEMENT.

It is hereby declared that all Board Members and senior management personnel have affirmed compliance with the

Code of Conduct for the Directors and Senior Management in respect of Financial Year ended March 31, 2009

Place : Gurgaon Ajay BijliDate : July 31, 2009 Chairman cum Managing Director

CMD’s Declaration

52 53

(b) Shareholding pattern

Consolidated Shareholding Pattern as on March 31, 2009

Sl. No. Category No. of Cases Total Shares % to Equity

1 Promoters 3 9480029 41.19%2 Foreign Institutional Investors 12 5462396 23.74%3 Mutual Funds 15 2003604 8.71%4 Resident Individuals 21659 2356912 10.24%5 Bodies Corporates 427 1415737 6.15%6 Financial Institutions / Banks 1 59295 0.26%7 Non-Resident Indians 250 192145 0.83%8 Clearing Members 62 21748 0.09%9 Trusts 5 2022004 8.79%

Total 22434 23013870 100%

12. Dematerialization of shares and liquidity

Our Equity Shares are tradable in dematerialized form since its listing. We have entered into agreement with both the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to facilitate trading in dematerialized form in India.

The breakup of Equity Share capital held with depositories and in physical form is as follows:

Sl. Category No. of Total Shares % to EquityNo. Holders

1 Physical 1,331 10,926 0.04747

2 NSDL 16,962 21,909,645 95.20191

3 CDSL 4,141 1,093,299 4.75060

Total 22,434 23,013,870 100.00

13. Address for correspondence :Mr. N.C. GuptaCompany Secretary & Compliance OfficerPVR Limited

Registered Office :61, Basant Lok, Vasant Vihar, New Delhi - 110057

Corporate Office :Block A, 4th Floor, Building No. 9DLF Cyber City, Phase IIIGurgaon, Haryana - 122002Investor grievance email : cosec@pvrcinemas.comTel : + 91-124-4708100Fax : + 91-124-4708101Website : www.pvrcinemas.com

14. Certificate on Corporate Governance A certificate from Practicing Company Secretary

on compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is enclosed at the end of this report.

For and on behalf of the Board

Place: Gurgaon, Haryana Ajay BijliDate: July 31, 2009 Chairman cum

Managing Director

DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT

PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT, PURSUANT TO CLAUSE 49 OF THE

LISTING AGREEMENT.

It is hereby declared that all Board Members and senior management personnel have affirmed compliance with the

Code of Conduct for the Directors and Senior Management in respect of Financial Year ended March 31, 2009

Place : Gurgaon Ajay BijliDate : July 31, 2009 Chairman cum Managing Director

CMD’s Declaration

52 53

CMD and CFO’s Certifi cation

We, Ajay Bijli, Chairman cum Managing Director, and Nitin Sood, Chief Financial Officer of PVR Limited, to the best of our knowledge and belief, certify that:

1. We have reviewed the financial statements and cash flow statements for the year and to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

2. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company’s code of conduct;

3. We are responsible for establishing and maintaining internal controls for financial reporting and have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and Audit Committee, wherever applicable:

a) Deficiencies in the design or operation of internal controls, if any, which come to our notice and steps have been taken / proposed to be taken to rectify these deficiencies;

b) Significant changes in internal control over financial reporting during the year;

c) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements;

d) Instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting

Place : Gurgaon Ajay Bijli Nitin SoodDate : July 31, 2009 Chairman cum Managing Director Chief Financial Officer

Certifi cate on compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreements

To the Members of PVR Limited

1. We have examined the implementation of Corporate Governance procedures by PVR Limited during the period ended March 31, 2009 with the relevant records and documents maintained by the Company, furnished to us for our examination and the report on Corporate Governance as approved by the Board of Directors.

2. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

3. 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.

4. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has in all respect complied with the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreements with the stock exchanges and that no investor grievance is pending for a period exceeding one month against the Company as per the records maintained by the Investors’ Grievance Committee.

For Brajesh Kumar & Associates Company Secretaries

Brajesh KumarPlace : New Delhi (Proprietor)Date : July 31, 2009 M. No.: 19059, C.P. No.: 7497

54 55

CMD and CFO’s Certifi cation

We, Ajay Bijli, Chairman cum Managing Director, and Nitin Sood, Chief Financial Officer of PVR Limited, to the best of our knowledge and belief, certify that:

1. We have reviewed the financial statements and cash flow statements for the year and to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

2. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company’s code of conduct;

3. We are responsible for establishing and maintaining internal controls for financial reporting and have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and Audit Committee, wherever applicable:

a) Deficiencies in the design or operation of internal controls, if any, which come to our notice and steps have been taken / proposed to be taken to rectify these deficiencies;

b) Significant changes in internal control over financial reporting during the year;

c) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements;

d) Instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting

Place : Gurgaon Ajay Bijli Nitin SoodDate : July 31, 2009 Chairman cum Managing Director Chief Financial Officer

Certifi cate on compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreements

To the Members of PVR Limited

1. We have examined the implementation of Corporate Governance procedures by PVR Limited during the period ended March 31, 2009 with the relevant records and documents maintained by the Company, furnished to us for our examination and the report on Corporate Governance as approved by the Board of Directors.

2. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

3. 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.

4. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has in all respect complied with the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreements with the stock exchanges and that no investor grievance is pending for a period exceeding one month against the Company as per the records maintained by the Investors’ Grievance Committee.

For Brajesh Kumar & Associates Company Secretaries

Brajesh KumarPlace : New Delhi (Proprietor)Date : July 31, 2009 M. No.: 19059, C.P. No.: 7497

54 55

5656

Standalone Financial Statements

1. We have audited the attached Balance Sheet of PVR Limited (‘the Company’) as at March 31, 2009 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. 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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. 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;

iii. the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. on the basis of the written representations received from the directors, as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause

(g) of sub-section (1) of Section 274 of the Companies Act, 1956.

vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2009;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

For S. R. Batliboi & Co.Chartered Accountants

per Anil GuptaPartnerMembership No.: 87921

Place: GurgaonDated: May 29, 2009

Auditors’ Report to the Members of PVR Limited

57

5656

Standalone Financial Statements

1. We have audited the attached Balance Sheet of PVR Limited (‘the Company’) as at March 31, 2009 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. 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 Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. 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;

iii. the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. on the basis of the written representations received from the directors, as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause

(g) of sub-section (1) of Section 274 of the Companies Act, 1956.

vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2009;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

For S. R. Batliboi & Co.Chartered Accountants

per Anil GuptaPartnerMembership No.: 87921

Place: GurgaonDated: May 29, 2009

Auditors’ Report to the Members of PVR Limited

57

Re: PVR LIMITED (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) 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) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loan to three companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 487,325,000 and the year end balance of loans outstanding from two parties was Rs. 392,325,000.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c) The loans granted are re-payable on demand. The Company has received the repayment of loans as and when demanded by it, thus, there has been no default on the part of the companies to whom the money has been lent. The receipt of interest has been regular.

(d) There is no overdue amount of loans granted to aforesaid three companies listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other

parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

(iv) 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 and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) 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 have regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund,

Annexure referred to in paragraph 3 of our report of even date

employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or banks. We have been informed that the Company did not have any outstanding debentures during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In respect of dealing/trading in units of mutual funds, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The units have been held by the Company, in its own name.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by a subsidiary company from a financial institution and counter guarantee to a bank for the bank guarantee furnished to Office of the Additional Collector, Mumbai suburban district, (entertainment tax authorities) by a subsidiary company, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, out of proceeds of term loans from a bank amounting to Rs. 100,000,000, unutilized amounts aggregating to Rs. 90,644,278, were lying in the units of mutual funds. Read with above, all other term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year. However, we have verified the end use of money raised by public issues in an earlier year, as disclosed in the notes to the financial statements (Refer Note No. 11.2 of Schedule 22).

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. Batliboi & Co.Chartered Accountants

per Anil GuptaPartnerMembership No.: 87921

Place : GurgaonDate : May 29, 2009

58 59

Re: PVR LIMITED (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) 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) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loan to three companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 487,325,000 and the year end balance of loans outstanding from two parties was Rs. 392,325,000.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c) The loans granted are re-payable on demand. The Company has received the repayment of loans as and when demanded by it, thus, there has been no default on the part of the companies to whom the money has been lent. The receipt of interest has been regular.

(d) There is no overdue amount of loans granted to aforesaid three companies listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other

parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

(iv) 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 and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) 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 have regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund,

Annexure referred to in paragraph 3 of our report of even date

employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or banks. We have been informed that the Company did not have any outstanding debentures during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In respect of dealing/trading in units of mutual funds, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The units have been held by the Company, in its own name.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by a subsidiary company from a financial institution and counter guarantee to a bank for the bank guarantee furnished to Office of the Additional Collector, Mumbai suburban district, (entertainment tax authorities) by a subsidiary company, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, out of proceeds of term loans from a bank amounting to Rs. 100,000,000, unutilized amounts aggregating to Rs. 90,644,278, were lying in the units of mutual funds. Read with above, all other term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year. However, we have verified the end use of money raised by public issues in an earlier year, as disclosed in the notes to the financial statements (Refer Note No. 11.2 of Schedule 22).

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S. R. Batliboi & Co.Chartered Accountants

per Anil GuptaPartnerMembership No.: 87921

Place : GurgaonDate : May 29, 2009

58 59

Schedules As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

SOURCES OF FUNDS

Shareholders’ FundsShare Capital 1 230,138,700 330,138,700Advance received against convertible warrants - 25,820,400Reserves and surplus 2 1,873,251,050 1,748,665,561

2,103,389,750 2,104,624,661

Loan fundsSecured loans 3 968,057,016 954,889,548Deferred Tax Liabilities (Net) 4 208,250,614 69,604,467

3,279,697,380 3,129,118,676

APPLICATION OF FUNDS

Fixed Assets 5Gross block 2,479,893,254 2,087,311,726Less : Accumulated Depreciation 674,704,083 491,534,862

Net block 1,805,189,171 1,595,776,864Capital Work-in-Progress including Capital Advances 39,062,890 193,571,260Pre-operative expenses (pending allocation) 6 31,810,837 34,606,853

Fixed Assets 1,876,062,898 1,823,954,977Intangible Assets (net of amortisation and including 7 13,532,278 8,652,658capital advances)Investments 8 669,912,278 785,273,893Current Assets, Loans and AdvancesInterest accrued on long term investments 2,594,745 1,978,708Inventories 9 27,254,028 20,910,288Sundry debtors 10 134,910,946 130,863,892Cash and bank balances 11 57,187,539 111,160,457Other current assets 12 6,011,590 15,473,303Loans and advances 13 1,043,350,912 655,319,783

1,271,309,760 935,706,431

Less: Current Liabilities and ProvisionsCurrent liabilities 14 510,232,221 377,998,916Provisions 15 40,887,613 46,470,367

551,119,834 424,469,283

Net Current Assets 720,189,926 511,237,148

3,279,697,380 3,129,118,676

Notes to Accounts 22

Schedules For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

INCOMEOperating income 16 2,715,581,866 2,360,767,116Other income 17 71,489,410 86,227,336

2,787,071,276 2,446,994,452

EXPENDITUREFilm distributors’ share (including commission) 694,843,935 619,323,306Consumption of food and beverages 181,283,246 157,870,840Personnel expenses 18 340,838,369 247,124,571Operating and other expenses 19 1,067,966,275 884,832,288

2,284,931,825 1,909,151,005

Profit before depreciation/amortisation, interest and tax (EBITDA) 502,139,451 537,843,447Depreciation/amortisation 189,449,652 150,989,701Interest paid 20 114,294,635 68,140,266

Profit Before Tax 198,395,164 318,713,480

Provision for Minimum Alternative Tax (MAT)/Current Tax (20,800,000) (97,240,000)Less: MAT Credit Entitlement Account 9,300,000 (11,500,000) -Wealth Tax (125,000) (60,000)Deferred tax charge (52,462,075) (4,980,224)Deferred tax charge for earlier years (86,184,072) -Income tax credit for earlier years (net) (Refer Note No. 13 of Schedule 22) 85,092,911 24,407Fringe benefit tax (6,700,000) (5,800,000)

Total Tax (Expense) (71,878,236) (108,055,817)

Net Profit after tax 126,516,928 210,657,663Balance brought forward from previous year 276,765,402 201,679,577

Profit available for appropriation 403,282,330 412,337,240Appropriations- Transfer to Capital Redemption Reserve 100,000,000 100,000,000- Interim dividend on equity shares - 23,013,870- Interim dividend on preference shares 1,246,576 7,390,710- Final Dividend on equity shares 23,013,870 -- Tax on dividends 4,123,063 5,167,258

Surplus carried to Balance Sheet 274,898,821 276,765,402

Earnings per share 21Basic [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 5.43 8.78Diluted [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 5.43 8.53

Notes to Accounts 22

Balance Sheet as at 31 March, 2009 Profi t and Loss Account for the year ended March 31, 2009

The Schedules referred to above and Notes to Accounts form an integral part of the Balance Sheet.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

The Schedules referred to above and Notes to Accounts form an integral part of the Profit and Loss Account.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 200960 61

Schedules As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

SOURCES OF FUNDS

Shareholders’ FundsShare Capital 1 230,138,700 330,138,700Advance received against convertible warrants - 25,820,400Reserves and surplus 2 1,873,251,050 1,748,665,561

2,103,389,750 2,104,624,661

Loan fundsSecured loans 3 968,057,016 954,889,548Deferred Tax Liabilities (Net) 4 208,250,614 69,604,467

3,279,697,380 3,129,118,676

APPLICATION OF FUNDS

Fixed Assets 5Gross block 2,479,893,254 2,087,311,726Less : Accumulated Depreciation 674,704,083 491,534,862

Net block 1,805,189,171 1,595,776,864Capital Work-in-Progress including Capital Advances 39,062,890 193,571,260Pre-operative expenses (pending allocation) 6 31,810,837 34,606,853

Fixed Assets 1,876,062,898 1,823,954,977Intangible Assets (net of amortisation and including 7 13,532,278 8,652,658capital advances)Investments 8 669,912,278 785,273,893Current Assets, Loans and AdvancesInterest accrued on long term investments 2,594,745 1,978,708Inventories 9 27,254,028 20,910,288Sundry debtors 10 134,910,946 130,863,892Cash and bank balances 11 57,187,539 111,160,457Other current assets 12 6,011,590 15,473,303Loans and advances 13 1,043,350,912 655,319,783

1,271,309,760 935,706,431

Less: Current Liabilities and ProvisionsCurrent liabilities 14 510,232,221 377,998,916Provisions 15 40,887,613 46,470,367

551,119,834 424,469,283

Net Current Assets 720,189,926 511,237,148

3,279,697,380 3,129,118,676

Notes to Accounts 22

Schedules For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

INCOMEOperating income 16 2,715,581,866 2,360,767,116Other income 17 71,489,410 86,227,336

2,787,071,276 2,446,994,452

EXPENDITUREFilm distributors’ share (including commission) 694,843,935 619,323,306Consumption of food and beverages 181,283,246 157,870,840Personnel expenses 18 340,838,369 247,124,571Operating and other expenses 19 1,067,966,275 884,832,288

2,284,931,825 1,909,151,005

Profit before depreciation/amortisation, interest and tax (EBITDA) 502,139,451 537,843,447Depreciation/amortisation 189,449,652 150,989,701Interest paid 20 114,294,635 68,140,266

Profit Before Tax 198,395,164 318,713,480

Provision for Minimum Alternative Tax (MAT)/Current Tax (20,800,000) (97,240,000)Less: MAT Credit Entitlement Account 9,300,000 (11,500,000) -Wealth Tax (125,000) (60,000)Deferred tax charge (52,462,075) (4,980,224)Deferred tax charge for earlier years (86,184,072) -Income tax credit for earlier years (net) (Refer Note No. 13 of Schedule 22) 85,092,911 24,407Fringe benefit tax (6,700,000) (5,800,000)

Total Tax (Expense) (71,878,236) (108,055,817)

Net Profit after tax 126,516,928 210,657,663Balance brought forward from previous year 276,765,402 201,679,577

Profit available for appropriation 403,282,330 412,337,240Appropriations- Transfer to Capital Redemption Reserve 100,000,000 100,000,000- Interim dividend on equity shares - 23,013,870- Interim dividend on preference shares 1,246,576 7,390,710- Final Dividend on equity shares 23,013,870 -- Tax on dividends 4,123,063 5,167,258

Surplus carried to Balance Sheet 274,898,821 276,765,402

Earnings per share 21Basic [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 5.43 8.78Diluted [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 5.43 8.53

Notes to Accounts 22

Balance Sheet as at 31 March, 2009 Profi t and Loss Account for the year ended March 31, 2009

The Schedules referred to above and Notes to Accounts form an integral part of the Balance Sheet.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

The Schedules referred to above and Notes to Accounts form an integral part of the Profit and Loss Account.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 200960 61

For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

A. Cash fl ow from operating activities: Profi t before taxation 198,395,164 318,713,480 Adjustments for : Depreciation/amortisation 189,449,652 150,989,701 Loss on disposal of fixed assets (net) 13,797,816 2,278,058

Pre-operative expenses charged off 76,692 71,425 Interest income (27,117,970) (37,348,992) Loss on sale of current investments 6,398 20,489 Dividend income (12,677,880) (22,061,198) Interest expense 114,294,635 68,140,266 Provision for doubtful debts and advances (net) 1,145,146 1,273,309

Operating profi t before working capital changes 477,369,653 482,076,538 Movements in working capital : (Increase) in sundry debtors (5,342,200) (76,920,570) (Increase) in inventories (6,343,740) (3,295,002) (Increase) in loans and advances and other current assets (70,289,489) (19,384,064) Increase in current liabilities and provisions 135,879,473 127,327,119

Cash generated from operations 531,273,697 509,804,021 Direct taxes paid (net of refunds) (85,661,533) (105,119,595)

Net cash from operating activities 445,612,164 404,684,426

B. Cash fl ows (used in) investing activities Purchase of fixed assets (250,026,695) (438,884,141) Purchase of intangible assets (7,382,036) (4,278,668) Proceeds from sale of fixed assets - 4,361,402 Consideration paid for acquiring interest in a subsidiary - (125,000) Investment in newly incorporated subsidiary (57,553,265) - Purchase of investments (1,341,944,552) (1,957,521,206) Sale of investments 1,515,949,769 1,811,368,468 Loan given to a body corporate (20,000,000) - Loans given to subsidiaries (676,650,000) (307,000,000) Loans refunded by subsidiaries 532,725,000 276,600,000 Dividend received 12,677,880 22,061,198 Interest received 33,032,428 27,613,596 Fixed Deposits with banks placed (44,893,437) (12,722,514) Fixed Deposits with banks encashed 12,484,180 11,933,300

Net cash (used in) investing activities (291,580,728) (566,593,565)

C. Cash fl ow (used in)/from fi nancing activities Repayment of preference share capital (100,000,000) (100,000,000) Proceeds from long-term borrowings 289,380,000 671,232,753 Repayment of long-term borrowings (276,212,532) (317,007,944) Advance received against convertible warrants - 25,820,400 Dividend and tax thereon paid (36,932,301) (394,179) Interest paid (116,648,778) (77,480,025)

Net cash (used in)/from fi nancing activities (240,413,611) 202,171,005

Net (decrease)/increase in cash and cash equivalents (A + B + C) (86,382,175) 40,261,866 Cash and cash equivalents at the beginning of the year 97,941,665 57,679,799

Cash and cash equivalents at the end of the year 11,559,490 97,941,665

Components of cash and cash equivalents as at March 31, 2009 March 31, 2008

Cash and cheques on hand 3,389,156 7,874,346 With banks - on current accounts 7,995,548 89,990,502 With banks - on deposit accounts* - - With banks - on unpaid and unclaimed dividend accounts** 174,786 76,817

11,559,490 97,941,665

*difference of Rs. 45,628,049 (Previous year Rs. 13,218,792) from Schedule 11 represents short-term investments with an original maturity of more than three months.**these balances are not available for use as they represent corresponding unpaid dividend liabilities.

NOTE: 1. The above Cash Flow Statement has been prepared under the “Indirect Method” as stated in Accounting Standard 3 on Cash Flow Statement.

NOTE: 2. The total purchase consideration for acquiring interest in the subsidiary company has been discharged by means of cash and cash equivalents.

Cash Flow Statement for the year ended March 31, 2009 Cash Flow Statement for the year ended March 31, 2009 (continued)

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

62 63

For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

A. Cash fl ow from operating activities: Profi t before taxation 198,395,164 318,713,480 Adjustments for : Depreciation/amortisation 189,449,652 150,989,701 Loss on disposal of fixed assets (net) 13,797,816 2,278,058

Pre-operative expenses charged off 76,692 71,425 Interest income (27,117,970) (37,348,992) Loss on sale of current investments 6,398 20,489 Dividend income (12,677,880) (22,061,198) Interest expense 114,294,635 68,140,266 Provision for doubtful debts and advances (net) 1,145,146 1,273,309

Operating profi t before working capital changes 477,369,653 482,076,538 Movements in working capital : (Increase) in sundry debtors (5,342,200) (76,920,570) (Increase) in inventories (6,343,740) (3,295,002) (Increase) in loans and advances and other current assets (70,289,489) (19,384,064) Increase in current liabilities and provisions 135,879,473 127,327,119

Cash generated from operations 531,273,697 509,804,021 Direct taxes paid (net of refunds) (85,661,533) (105,119,595)

Net cash from operating activities 445,612,164 404,684,426

B. Cash fl ows (used in) investing activities Purchase of fixed assets (250,026,695) (438,884,141) Purchase of intangible assets (7,382,036) (4,278,668) Proceeds from sale of fixed assets - 4,361,402 Consideration paid for acquiring interest in a subsidiary - (125,000) Investment in newly incorporated subsidiary (57,553,265) - Purchase of investments (1,341,944,552) (1,957,521,206) Sale of investments 1,515,949,769 1,811,368,468 Loan given to a body corporate (20,000,000) - Loans given to subsidiaries (676,650,000) (307,000,000) Loans refunded by subsidiaries 532,725,000 276,600,000 Dividend received 12,677,880 22,061,198 Interest received 33,032,428 27,613,596 Fixed Deposits with banks placed (44,893,437) (12,722,514) Fixed Deposits with banks encashed 12,484,180 11,933,300

Net cash (used in) investing activities (291,580,728) (566,593,565)

C. Cash fl ow (used in)/from fi nancing activities Repayment of preference share capital (100,000,000) (100,000,000) Proceeds from long-term borrowings 289,380,000 671,232,753 Repayment of long-term borrowings (276,212,532) (317,007,944) Advance received against convertible warrants - 25,820,400 Dividend and tax thereon paid (36,932,301) (394,179) Interest paid (116,648,778) (77,480,025)

Net cash (used in)/from fi nancing activities (240,413,611) 202,171,005

Net (decrease)/increase in cash and cash equivalents (A + B + C) (86,382,175) 40,261,866 Cash and cash equivalents at the beginning of the year 97,941,665 57,679,799

Cash and cash equivalents at the end of the year 11,559,490 97,941,665

Components of cash and cash equivalents as at March 31, 2009 March 31, 2008

Cash and cheques on hand 3,389,156 7,874,346 With banks - on current accounts 7,995,548 89,990,502 With banks - on deposit accounts* - - With banks - on unpaid and unclaimed dividend accounts** 174,786 76,817

11,559,490 97,941,665

*difference of Rs. 45,628,049 (Previous year Rs. 13,218,792) from Schedule 11 represents short-term investments with an original maturity of more than three months.**these balances are not available for use as they represent corresponding unpaid dividend liabilities.

NOTE: 1. The above Cash Flow Statement has been prepared under the “Indirect Method” as stated in Accounting Standard 3 on Cash Flow Statement.

NOTE: 2. The total purchase consideration for acquiring interest in the subsidiary company has been discharged by means of cash and cash equivalents.

Cash Flow Statement for the year ended March 31, 2009 Cash Flow Statement for the year ended March 31, 2009 (continued)

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

62 63

Schedule 1 : Share capital As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Authorised share capital30,000,000 (Previous year 30,000,000) equity shares of Rs. 10 each 300,000,000 300,000,00020,000,000 (Previous year 20,000,000) preference shares of Rs. 10 each 200,000,000 200,000,000

500,000,000 500,000,000

Issued, subscribed and paid-up23,013,870 (Previous year 23,013,870) equity shares of Rs. 10 each fully paid 230,138,700 230,138,700Nil (Previous year 10,000,000) 5% redeemable preference - 100,000,000shares of Rs. 10 each fully paid 230,138,700 330,138,700

NOTES: 1. Of the above Nil (Previous year 5,321,000) 5% redeemable preference shares were held by Mr. Ajay Bijli, Chairman cum Managing Director.

2. Preference shares were redeemable at par after three years with a put and call option at the end of two years from the date of allotment i.e. September 23, 2005.

3. The company has during the year granted 5,00,000 stock options to its employees. (Refer Note No. 18 of Schedule 22).

Schedule 2 : Reserves and SurplusCapital Redemption Reserve AccountAs per last account 100,000,000 -Add: Transferred from Profit and Loss Account during the year 100,000,000 100,000,000

Closing Balance 200,000,000 100,000,000Securities Premium Account - as per last account 1,371,900,159 1,371,900,159Add:Excess provision for share issue expenses now written 631,670 -back and added to securities premium account

1,372,531,829 1,371,900,159

Capital Reserve - Created during the year (Refer Note No. 8 of Schedule 22) 25,820,400 -

Profit and Loss Account Balance 274,898,821 276,765,402

1,873,251,050 1,748,665,561

Schedule 3 : Secured LoansLoans from banksTerm loans from banks 437,148,336 477,170,810(Due within one year Rs. 146,039,128, (Previous year Rs. 139,846,405))Car finance loans from banks 15,539,446 19,355,065(Due within one year Rs. 8,442,389, (Previous year Rs. 6,786,609))

Other loansTerm loans from a body corporate 477,269,234 400,213,673(Due within one year Rs. 144,324,782, (Previous year Rs. 94,658,114))Term loan from small industries development bank of india (SIDBI) 38,100,000 58,150,000(Due within one year Rs. 20,400,000, (Previous year Rs. 20,050,000))

968,057,016 954,889,548

NOTES:

1. a) Term loans from United Bank of India and Union Bank of India to the extent of Rs. 91,377,638, are secured by first pari passu charge by way of hypothecation of the whole of the movable properties including movable plant and machinery, machinery spares, tools and accessories and other movable assets (except vehicles hypothecated to banks) of all current and future operating theatres of the Company ranking pari passu with other lenders. These are further secured by the personal guarantee of two directors of the Company.

b) Term Loan from Punjab National Bank to the extent of Rs. 245,770,698, is secured by first pari passu charge with other lenders on all assets and movable property (excluding vehicles hypothecated to banks), including current assets namely current and movable fixed assets of any kind belonging to the Company both present and future except those at PVR Juhu, Mumbai. This loan is further secured by

Schedules to the AccountsSchedules to the Accounts

Schedule 4 : Deferred Tax Liabilities (Net) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets and 225,236,534 82,756,004intangibles as per tax books and financial books

Gross Deferred Tax Liabilities 225,236,534 82,756,004

Deferred Tax AssetsEffect of expenditure debited to profit and loss account in the current year/ 14,759,651 11,314,503earlier years but allowable for tax purposes in following years Provision for doubtful debts and advances 2,226,269 1,837,034

Gross Deferred Tax Assets 16,985,920 13,151,537

Net Deferred Tax Liabilities 208,250,614 69,604,467

second charge on all the movable and immovable assets namely current and movable fixed assets as well as the movable and immovable assets at PVR Juhu, Mumbai of the Company and PVR Phoenix, Mumbai of the subsidiary.

c) Term Loan from Axis Bank of India to the extent of Rs. 100,000,000, is secured by first pari passu charge with other lenders on all movable and immovable fixed assets (excluding vehicles hypothecated to banks) and receivables, belonging to the Company both present and future except those at PVR Juhu, Mumbai and at locations operated by subsidiaries of the Company. These are further secured by the personal guarantee of two directors of the Company.

2. Car finance loans to the extent of Rs. 15,539,446 are to be secured by hypothecation of vehicles purchased out of the proceeds of the loans.

3. Term Loans from a body corporate to the extent of Rs. 477,269,234, are secured by first pari passu charge with other lenders on all fixed assets of the Company (excluding vehicles hypothecated to banks) both present and future except those at PVR Juhu, Mumbai. These loans are further secured by first pari passu charge on all receivables both present and future. These are further secured by the personal guarantee of two directors of the Company.

4. Loan from SIDBI to the extent of Rs. 38,100,000 is secured by a first pari passu charge by way of hypothecation of all the movable assets (except vehicles hypothecated to banks) both present and future, of all cinemas of the Company ranking pari passu with other lenders. It is further secured by a second charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi and is also secured by the personal guarantee of two directors of the Company.

64 65

Schedule 1 : Share capital As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Authorised share capital30,000,000 (Previous year 30,000,000) equity shares of Rs. 10 each 300,000,000 300,000,00020,000,000 (Previous year 20,000,000) preference shares of Rs. 10 each 200,000,000 200,000,000

500,000,000 500,000,000

Issued, subscribed and paid-up23,013,870 (Previous year 23,013,870) equity shares of Rs. 10 each fully paid 230,138,700 230,138,700Nil (Previous year 10,000,000) 5% redeemable preference - 100,000,000shares of Rs. 10 each fully paid 230,138,700 330,138,700

NOTES: 1. Of the above Nil (Previous year 5,321,000) 5% redeemable preference shares were held by Mr. Ajay Bijli, Chairman cum Managing Director.

2. Preference shares were redeemable at par after three years with a put and call option at the end of two years from the date of allotment i.e. September 23, 2005.

3. The company has during the year granted 5,00,000 stock options to its employees. (Refer Note No. 18 of Schedule 22).

Schedule 2 : Reserves and SurplusCapital Redemption Reserve AccountAs per last account 100,000,000 -Add: Transferred from Profit and Loss Account during the year 100,000,000 100,000,000

Closing Balance 200,000,000 100,000,000Securities Premium Account - as per last account 1,371,900,159 1,371,900,159Add:Excess provision for share issue expenses now written 631,670 -back and added to securities premium account

1,372,531,829 1,371,900,159

Capital Reserve - Created during the year (Refer Note No. 8 of Schedule 22) 25,820,400 -

Profit and Loss Account Balance 274,898,821 276,765,402

1,873,251,050 1,748,665,561

Schedule 3 : Secured LoansLoans from banksTerm loans from banks 437,148,336 477,170,810(Due within one year Rs. 146,039,128, (Previous year Rs. 139,846,405))Car finance loans from banks 15,539,446 19,355,065(Due within one year Rs. 8,442,389, (Previous year Rs. 6,786,609))

Other loansTerm loans from a body corporate 477,269,234 400,213,673(Due within one year Rs. 144,324,782, (Previous year Rs. 94,658,114))Term loan from small industries development bank of india (SIDBI) 38,100,000 58,150,000(Due within one year Rs. 20,400,000, (Previous year Rs. 20,050,000))

968,057,016 954,889,548

NOTES:

1. a) Term loans from United Bank of India and Union Bank of India to the extent of Rs. 91,377,638, are secured by first pari passu charge by way of hypothecation of the whole of the movable properties including movable plant and machinery, machinery spares, tools and accessories and other movable assets (except vehicles hypothecated to banks) of all current and future operating theatres of the Company ranking pari passu with other lenders. These are further secured by the personal guarantee of two directors of the Company.

b) Term Loan from Punjab National Bank to the extent of Rs. 245,770,698, is secured by first pari passu charge with other lenders on all assets and movable property (excluding vehicles hypothecated to banks), including current assets namely current and movable fixed assets of any kind belonging to the Company both present and future except those at PVR Juhu, Mumbai. This loan is further secured by

Schedules to the AccountsSchedules to the Accounts

Schedule 4 : Deferred Tax Liabilities (Net) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets and 225,236,534 82,756,004intangibles as per tax books and financial books

Gross Deferred Tax Liabilities 225,236,534 82,756,004

Deferred Tax AssetsEffect of expenditure debited to profit and loss account in the current year/ 14,759,651 11,314,503earlier years but allowable for tax purposes in following years Provision for doubtful debts and advances 2,226,269 1,837,034

Gross Deferred Tax Assets 16,985,920 13,151,537

Net Deferred Tax Liabilities 208,250,614 69,604,467

second charge on all the movable and immovable assets namely current and movable fixed assets as well as the movable and immovable assets at PVR Juhu, Mumbai of the Company and PVR Phoenix, Mumbai of the subsidiary.

c) Term Loan from Axis Bank of India to the extent of Rs. 100,000,000, is secured by first pari passu charge with other lenders on all movable and immovable fixed assets (excluding vehicles hypothecated to banks) and receivables, belonging to the Company both present and future except those at PVR Juhu, Mumbai and at locations operated by subsidiaries of the Company. These are further secured by the personal guarantee of two directors of the Company.

2. Car finance loans to the extent of Rs. 15,539,446 are to be secured by hypothecation of vehicles purchased out of the proceeds of the loans.

3. Term Loans from a body corporate to the extent of Rs. 477,269,234, are secured by first pari passu charge with other lenders on all fixed assets of the Company (excluding vehicles hypothecated to banks) both present and future except those at PVR Juhu, Mumbai. These loans are further secured by first pari passu charge on all receivables both present and future. These are further secured by the personal guarantee of two directors of the Company.

4. Loan from SIDBI to the extent of Rs. 38,100,000 is secured by a first pari passu charge by way of hypothecation of all the movable assets (except vehicles hypothecated to banks) both present and future, of all cinemas of the Company ranking pari passu with other lenders. It is further secured by a second charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi and is also secured by the personal guarantee of two directors of the Company.

64 65

Schedule 6 : Pre-operative Expenses (pending allocation) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Balance brought forward 34,606,853 37,987,538Salary and other allowances 8,506,527 13,806,512Contribution to provident and other funds (Refer Note No. 17 of Schedule 22) 650,507 908,502Staff welfare expenses 1,470,385 1,235,736Rent (net of recovery of Rs.3,320,141, Previous year Nil) 8,293,877 5,847,892Rates and taxes 1,374,117 3,033,272Communication costs 31,178 23,538Architect and other fees 3,717,500 9,937,730Professional charges 7,185,717 9,070,275Travelling and conveyance 1,393,029 1,542,270Printing and stationery 2,611 154,334Insurance 169,557 233,359Repairs and maintenance: - Buildings 228,017 1,413,856 - Common area maintenance (net of recovery of Rs. 2,216,613, Previous year Nil) 5,412,994 -Electricity and water charges (net of recovery of Rs. 90,135, Previous year Rs. 240,861) 107,167 1,039,435Security service charges 157,789 679,869Interest on fixed loans 2,696,642 9,414,737Bank and other charges 505,620 689,734Fringe benefit tax 206,328 284,953Miscellaneous expenses 1,276,968 1,136,684

77,993,383 98,440,226Less : Allocated to fixed assets 46,105,854 54,355,489Less: Expenses written off 76,692 71,425Less : Expenses pertaining to Goregaon, Mumbai - 9,406,459Project transferred to a wholly owned subsidiary

Balance Carried Forward 31,810,837 34,606,853

Note:Rent includes amount paid to a director 1,716,000 1,282,500Rates and taxes include stamp duty on registration of lease deeds 1,331,610 2,248,000

Schedules to the Accounts

Schedule 7 : Intangible Assets Rs.

Software Film Rights’ Cost Total Previous Year Development Cost

Gross BlockAt 01.04.2008 12,492,054 1,834,658 14,326,712 9,739,884 Additions 7,511,376 - 7,511,376 4,586,828

At 31.03.2009 20,003,430 1,834,658 21,838,088 14,326,712

Amortisation At 01.04.2008 3,968,736 1,834,658 5,803,394 4,117,520 For the year 2,502,416 - 2,502,416 1,685,874

At 31.03.2009 6,471,152 1,834,658 8,305,810 5,803,394

For previous year 1,685,874 - 1,685,874

Net Block

At 31.03.2009 13,532,278 - 13,532,278 8,523,318

Capital Advances ( Unsecured, considered good) - 129,340

At 31.03.2009 13,532,278 - 13,532,278 8,652,658

At 31.03.2008 8,523,318 - 8,523,318 Sche

dule

5 :

Fixe

d A

sset

sRs

.

La

nd F

reeh

old

Build

ing

Leas

ehol

d Pl

ant &

Fu

rnitu

re &

Ve

hicl

es

Tota

l Pr

evio

us Y

ear

Im

prov

emen

ts

Mac

hine

ry

Fitt

ings

Gro

ss B

lock

At 0

1.04

.200

8

190

,350

1

,273

,590

6

88,2

21,8

47

1,0

59,3

39,6

12

309

,352

,390

2

8,93

3,93

7

2,0

87,3

11,7

26

1,6

97,7

90,5

94

Add

ition

s

-

-

131

,979

,997

2

28,0

86,0

52

51,

665,

744

3

,977

,986

4

15,7

09,7

79

402

,597

,211

D

educ

tions

/Adj

ustm

ents

-

-

7

,223

,752

1

3,99

8,29

6

1,9

06,2

03

-

23,

128,

251

1

3,07

6,07

9

At 3

1.03

.200

9

190

,350

1

,273

,590

8

12,9

78,0

92

1,2

73,4

27,3

68

359

,111

,931

3

2,91

1,92

3

2,4

79,8

93,2

54

2,0

87,3

11,7

26

Dep

reci

atio

n

A

t 01.

04.2

008

-

2

11,0

59

151

,300

,389

2

45,8

47,2

28

91,

816,

863

2

,359

,323

4

91,5

34,8

62

348

,667

,654

F

or th

e ye

ar

-

20,

760

6

1,25

2,63

7

87,

547,

028

3

5,18

9,65

1

2,9

37,1

60

186

,947

,236

1

49,3

03,8

27

Ded

uctio

ns

-

-

405

,060

2

,812

,106

5

60,8

49

-

3,7

78,0

15

6,4

36,6

19

At 3

1.03

.200

9

-

231

,819

2

12,1

47,9

66

330

,582

,150

1

26,4

45,6

65

5,2

96,4

83

674

,704

,083

4

91,5

34,8

62

For

pre

viou

s ye

ar

-

20,

760

4

6,45

1,18

2

71,

376,

056

2

9,19

8,11

7

2,2

57,7

12

149

,303

,827

Net

Blo

ck

At 3

1.03

.200

9

190

,350

1

,041

,771

6

00,8

30,1

26

942

,845

,218

2

32,6

66,2

66

27,

615,

440

1

,805

,189

,171

1

,595

,776

,864

At 3

1.03

.200

8

190

,350

1

,062

,531

5

36,9

21,4

58

813

,492

,384

2

17,5

35,5

27

26,

574,

614

1

,595

,776

,864

Cap

ital w

ork

in p

rogr

ess

2

8,52

7,24

3

137

,566

,765

C

apita

l Adv

ance

s (U

nsec

ured

, con

sider

ed g

ood)

1

0,53

5,64

7

56,

004,

495

3

9,06

2,89

0

193

,571

,260

Tot

al

190

,350

1

,041

,771

6

00,8

30,1

26

942

,845

,218

2

32,6

66,2

66

27,

615,

440

1

,844

,252

,061

1

,789

,348

,124

Not

es:

1. F

ixed

ass

ets

of th

e co

st o

f Rs.

17,

575,

831,

Pre

viou

s ye

ar R

s. 4

,485

,661

, (W

DV

Rs. 1

3,79

7,81

6, P

revi

ous

year

Rs.

1,2

75,5

77) h

ave

been

disc

arde

d du

ring

the

year

.2.

Gro

ss B

lock

of F

ixed

Ass

ets

inclu

de R

s. 4

3,95

1,08

9 (P

revi

ous

year

Rs.

43,

951,

089)

bei

ng C

ompa

ny’s

prop

ortio

nate

sha

re o

f exp

ense

s to

war

ds m

odific

atio

n in

the

build

ing

stru

ctur

e an

d eq

uipm

ents

, clai

med

by

the

vario

us la

ndlo

rds

of th

e pr

oper

ties

take

n on

rent

.3.

Clai

ms

of R

s. 1

7,46

4,31

7 (P

revi

ous

year

Rs.

17,

464,

317)

lodg

ed b

y so

me

deve

lope

rs o

n th

e C

ompa

ny a

nd c

laim

s of

Rs.

7,6

81,0

33 (P

revi

ous

year

Rs.

7,6

81,0

33) l

odge

d by

the

Com

pany

on

the

deve

lope

rs a

re

subj

ect t

o co

nfirm

atio

n/re

conc

iliatio

n. H

owev

er, t

he C

ompa

ny h

ad d

uly

acco

unte

d fo

r afo

resa

id c

laim

s in

the

book

s. A

djus

tmen

ts, i

f any

, whi

ch in

the

opin

ion

of th

e m

anag

emen

t, w

ill no

t be

mat

erial

, wou

ld b

e m

ade

once

the

claim

s ar

e co

nfirm

ed/r

econ

ciled

.4.

Adj

ustm

ents

to fi

xed

asse

ts in

clude

Rs.

5,5

52,4

20 b

eing

cre

dit o

f Cou

nter

veilin

g D

uty

(CVD

) per

tain

ing

to e

arlie

r yea

rs, b

ut c

laim

ed a

t the

end

of t

he c

urre

nt y

ear o

n im

porte

d pl

ant a

nd m

achi

nery

.5.

Dep

recia

tion

prov

ided

for t

he y

ear i

s ne

t of r

ever

sal o

f dep

recia

tion

prov

ided

in e

arlie

r yea

rs o

f Rs.

482

,450

(Pre

viou

s ye

ar R

s. 1

,637

,116

).

66 67

Schedule 6 : Pre-operative Expenses (pending allocation) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Balance brought forward 34,606,853 37,987,538Salary and other allowances 8,506,527 13,806,512Contribution to provident and other funds (Refer Note No. 17 of Schedule 22) 650,507 908,502Staff welfare expenses 1,470,385 1,235,736Rent (net of recovery of Rs.3,320,141, Previous year Nil) 8,293,877 5,847,892Rates and taxes 1,374,117 3,033,272Communication costs 31,178 23,538Architect and other fees 3,717,500 9,937,730Professional charges 7,185,717 9,070,275Travelling and conveyance 1,393,029 1,542,270Printing and stationery 2,611 154,334Insurance 169,557 233,359Repairs and maintenance: - Buildings 228,017 1,413,856 - Common area maintenance (net of recovery of Rs. 2,216,613, Previous year Nil) 5,412,994 -Electricity and water charges (net of recovery of Rs. 90,135, Previous year Rs. 240,861) 107,167 1,039,435Security service charges 157,789 679,869Interest on fixed loans 2,696,642 9,414,737Bank and other charges 505,620 689,734Fringe benefit tax 206,328 284,953Miscellaneous expenses 1,276,968 1,136,684

77,993,383 98,440,226Less : Allocated to fixed assets 46,105,854 54,355,489Less: Expenses written off 76,692 71,425Less : Expenses pertaining to Goregaon, Mumbai - 9,406,459Project transferred to a wholly owned subsidiary

Balance Carried Forward 31,810,837 34,606,853

Note:Rent includes amount paid to a director 1,716,000 1,282,500Rates and taxes include stamp duty on registration of lease deeds 1,331,610 2,248,000

Schedules to the Accounts

Schedule 7 : Intangible Assets Rs.

Software Film Rights’ Cost Total Previous Year Development Cost

Gross BlockAt 01.04.2008 12,492,054 1,834,658 14,326,712 9,739,884 Additions 7,511,376 - 7,511,376 4,586,828

At 31.03.2009 20,003,430 1,834,658 21,838,088 14,326,712

Amortisation At 01.04.2008 3,968,736 1,834,658 5,803,394 4,117,520 For the year 2,502,416 - 2,502,416 1,685,874

At 31.03.2009 6,471,152 1,834,658 8,305,810 5,803,394

For previous year 1,685,874 - 1,685,874

Net Block

At 31.03.2009 13,532,278 - 13,532,278 8,523,318

Capital Advances ( Unsecured, considered good) - 129,340

At 31.03.2009 13,532,278 - 13,532,278 8,652,658

At 31.03.2008 8,523,318 - 8,523,318 Sche

dule

5 :

Fixe

d A

sset

sRs

.

La

nd F

reeh

old

Build

ing

Leas

ehol

d Pl

ant &

Fu

rnitu

re &

Ve

hicl

es

Tota

l Pr

evio

us Y

ear

Im

prov

emen

ts

Mac

hine

ry

Fitt

ings

Gro

ss B

lock

At 0

1.04

.200

8

190

,350

1

,273

,590

6

88,2

21,8

47

1,0

59,3

39,6

12

309

,352

,390

2

8,93

3,93

7

2,0

87,3

11,7

26

1,6

97,7

90,5

94

Add

ition

s

-

-

131

,979

,997

2

28,0

86,0

52

51,

665,

744

3

,977

,986

4

15,7

09,7

79

402

,597

,211

D

educ

tions

/Adj

ustm

ents

-

-

7

,223

,752

1

3,99

8,29

6

1,9

06,2

03

-

23,

128,

251

1

3,07

6,07

9

At 3

1.03

.200

9

190

,350

1

,273

,590

8

12,9

78,0

92

1,2

73,4

27,3

68

359

,111

,931

3

2,91

1,92

3

2,4

79,8

93,2

54

2,0

87,3

11,7

26

Dep

reci

atio

n

A

t 01.

04.2

008

-

2

11,0

59

151

,300

,389

2

45,8

47,2

28

91,

816,

863

2

,359

,323

4

91,5

34,8

62

348

,667

,654

F

or th

e ye

ar

-

20,

760

6

1,25

2,63

7

87,

547,

028

3

5,18

9,65

1

2,9

37,1

60

186

,947

,236

1

49,3

03,8

27

Ded

uctio

ns

-

-

405

,060

2

,812

,106

5

60,8

49

-

3,7

78,0

15

6,4

36,6

19

At 3

1.03

.200

9

-

231

,819

2

12,1

47,9

66

330

,582

,150

1

26,4

45,6

65

5,2

96,4

83

674

,704

,083

4

91,5

34,8

62

For

pre

viou

s ye

ar

-

20,

760

4

6,45

1,18

2

71,

376,

056

2

9,19

8,11

7

2,2

57,7

12

149

,303

,827

Net

Blo

ck

At 3

1.03

.200

9

190

,350

1

,041

,771

6

00,8

30,1

26

942

,845

,218

2

32,6

66,2

66

27,

615,

440

1

,805

,189

,171

1

,595

,776

,864

At 3

1.03

.200

8

190

,350

1

,062

,531

5

36,9

21,4

58

813

,492

,384

2

17,5

35,5

27

26,

574,

614

1

,595

,776

,864

Cap

ital w

ork

in p

rogr

ess

2

8,52

7,24

3

137

,566

,765

C

apita

l Adv

ance

s (U

nsec

ured

, con

sider

ed g

ood)

1

0,53

5,64

7

56,

004,

495

3

9,06

2,89

0

193

,571

,260

Tot

al

190

,350

1

,041

,771

6

00,8

30,1

26

942

,845

,218

2

32,6

66,2

66

27,

615,

440

1

,844

,252

,061

1

,789

,348

,124

Not

es:

1. F

ixed

ass

ets

of th

e co

st o

f Rs.

17,

575,

831,

Pre

viou

s ye

ar R

s. 4

,485

,661

, (W

DV

Rs. 1

3,79

7,81

6, P

revi

ous

year

Rs.

1,2

75,5

77) h

ave

been

disc

arde

d du

ring

the

year

.2.

Gro

ss B

lock

of F

ixed

Ass

ets

inclu

de R

s. 4

3,95

1,08

9 (P

revi

ous

year

Rs.

43,

951,

089)

bei

ng C

ompa

ny’s

prop

ortio

nate

sha

re o

f exp

ense

s to

war

ds m

odific

atio

n in

the

build

ing

stru

ctur

e an

d eq

uipm

ents

, clai

med

by

the

vario

us la

ndlo

rds

of th

e pr

oper

ties

take

n on

rent

.3.

Clai

ms

of R

s. 1

7,46

4,31

7 (P

revi

ous

year

Rs.

17,

464,

317)

lodg

ed b

y so

me

deve

lope

rs o

n th

e C

ompa

ny a

nd c

laim

s of

Rs.

7,6

81,0

33 (P

revi

ous

year

Rs.

7,6

81,0

33) l

odge

d by

the

Com

pany

on

the

deve

lope

rs a

re

subj

ect t

o co

nfirm

atio

n/re

conc

iliatio

n. H

owev

er, t

he C

ompa

ny h

ad d

uly

acco

unte

d fo

r afo

resa

id c

laim

s in

the

book

s. A

djus

tmen

ts, i

f any

, whi

ch in

the

opin

ion

of th

e m

anag

emen

t, w

ill no

t be

mat

erial

, wou

ld b

e m

ade

once

the

claim

s ar

e co

nfirm

ed/r

econ

ciled

.4.

Adj

ustm

ents

to fi

xed

asse

ts in

clude

Rs.

5,5

52,4

20 b

eing

cre

dit o

f Cou

nter

veilin

g D

uty

(CVD

) per

tain

ing

to e

arlie

r yea

rs, b

ut c

laim

ed a

t the

end

of t

he c

urre

nt y

ear o

n im

porte

d pl

ant a

nd m

achi

nery

.5.

Dep

recia

tion

prov

ided

for t

he y

ear i

s ne

t of r

ever

sal o

f dep

recia

tion

prov

ided

in e

arlie

r yea

rs o

f Rs.

482

,450

(Pre

viou

s ye

ar R

s. 1

,637

,116

).

66 67

Schedules to the Accounts

Schedule 8 : Investments As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Long Term Investments (At Cost)Other than trade investments

A. In Subsidiary Companies (Unquoted)

Fully paid up equity shares of Rs. 10 each20,000,000 (Previous year 20,000,000) in CR Retail Malls (India) Private Limited 200,000,000 200,000,00021,500,000 (Previous year 21,500,000) in PVR Pictures Limited 215,000,000 215,000,0005,000,000 (Previous year 5,000,000) in Sunrise Infotainment Private Limited 50,025,000 50,025,0005,865,000 (Previous year Nil) in PVR BluO Entertainment Limited 58,650,000 -Fully paid up 5% cumulative preference shares of Rs. 10 each5,000,000 (Previous year 5,000,000) in Sunrise Infotainment Private Limited 50,000,000 50,000,000

B. In Government Securities (Unquoted)

6 years National Savings Certificates* 5,548,000 5,548,000(Deposited with Entertainment Tax Authorities)6 years National Savings Certificates** 45,000 45,000(Deposited with Municipal Corporation of Hyderabad)

Current Investments (At lower of Cost and Market Value)Other than trade investments (Quoted)Units in mutual funds of Rs. 10 each743,106.133 (Previous year Nil) units of GFBG IDFC Money Manager Fund - 10,426,894 -Treasury Plan - Institutional Plan B - Growth3,891,294.852 (Previous year Nil) units of DWS Ultra Short Term Fund - 40,121,585 -Institutional Growth2,086,714.350 (Previous year Nil) units of 2032/HDFC Cash Management Fund - 40,095,799 -Treasury Advantage Fund - Wholesale - GrowthNil (Previous year 5,065,237.974) units of Birla Sun Life Liquid Plus - Institutional - - 50,686,823Daily Dividend - ReinvestmentNil (Previous year 5,021,464.997) units of Kotak Flexi Debt Scheme - Daily Dividend - 50,370,818Nil (Previous year 4,048,674.995) units of TFLD TATA Floater Fund - Daily Dividend - 40,630,883Nil (Previous year 2,883,067.574) units of 28Q ICICI Prudential - - 30,484,115Flexible Income Plan Dividend - Daily Dividend ReinvesmentUnits in mutual funds of Rs. 1,000 eachNil (Previous year 92,378.275) units of Reliance Liquidity Plus Fund- - 92,483,254Institutional Option -Daily Dividend Plan

669,912,278 785,273,893

Notes :1.*Held in the name of the Managing Director in the interest of the Company.2. **Held in the name of the Employee in the interest of the Company.

3. The following units held in mutual funds were purchased and sold during the year: Purchased Value (Rs.)

- In Dividend option: Units in mutual funds of Rs. 10 each9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93011,868,643.971 28Q ICICI Prudential - Flexible Income Plan Dividend - 125,493,107Daily Dividend Reinvesment 11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,57341,305.361 TFLD TATA Floater Fund - Daily Dividend 414,524

Schedules to the Accounts

4,911.320 Birla Sun Life Liquid Plus - Institutional - Daily Dividend - Reinvestment 49,1478,074,656.399 Kotak Flexi Debt Scheme - Daily Dividend 81,031,2642,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment 2,922,261.628 GFBG IDFC Money Manager Fund - Treasury Plan - 40,434,301Institutional Plan B - Growth 3,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - 30,426,894Institutional Plan B - Daily Dividend3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,891,294.852 DWS Ultra Short Term Fund - Institutional Growth 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - 40,095,799Wholesale - Daily Dividend - Reinvestment Option 2,086,714.350 2032/HDFC Cash Management Fund - Treasury Advantage Fund - 40,095,799Wholesale - Growth 8,159,398.664 Reliance Fixed Horizon Fund - VIII - Series 12 - 81,593,987Institutional Dividend Payout Plan 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,415,7092,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,023

Units in mutual funds of Rs. 1,000 each173,485.241 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 173,682,38919,998.720 Templeton India Treasury Management Account Institutional Plan - 20,012,179Daily Dividend Reinvestment

Sold

- In Dividend option:Units in mutual funds of Rs. 10 each9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93014,751,711.545 28Q ICICI Prudential - Flexible Income Plan Dividend - 155,977,222Daily Dividend Reinvesment 11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,5734,089,980.356 TFLD TATA Floater Fund - Daily Dividend 41,045,4075,070,149.294 Birla Sun Life Liquid Plus - Institutional - Daily Dividend Reinvestment 50,735,97013,096,121.396 Kotak Flexi Debt Scheme - Daily Dividend 131,402,0822,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment 2,179,155.495 GFBG IDFC Money Manager Fund - Treasury Plan - 30,007,407Institutional Plan B - Growth 3,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - 30,426,894Institutional Plan B - Daily Dividend 3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - 40,095,799Wholesale - Daily Dividend - Reinvestment Option 8,159,398.664 Reliance Fixed Horizon Fund - VIII - Series 12 - 81,593,987Institutional Dividend Payout Plan 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,409,3112,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,023

Schedule 8 : Investments (continued)

68 69

Schedules to the Accounts

Schedule 8 : Investments As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Long Term Investments (At Cost)Other than trade investments

A. In Subsidiary Companies (Unquoted)

Fully paid up equity shares of Rs. 10 each20,000,000 (Previous year 20,000,000) in CR Retail Malls (India) Private Limited 200,000,000 200,000,00021,500,000 (Previous year 21,500,000) in PVR Pictures Limited 215,000,000 215,000,0005,000,000 (Previous year 5,000,000) in Sunrise Infotainment Private Limited 50,025,000 50,025,0005,865,000 (Previous year Nil) in PVR BluO Entertainment Limited 58,650,000 -Fully paid up 5% cumulative preference shares of Rs. 10 each5,000,000 (Previous year 5,000,000) in Sunrise Infotainment Private Limited 50,000,000 50,000,000

B. In Government Securities (Unquoted)

6 years National Savings Certificates* 5,548,000 5,548,000(Deposited with Entertainment Tax Authorities)6 years National Savings Certificates** 45,000 45,000(Deposited with Municipal Corporation of Hyderabad)

Current Investments (At lower of Cost and Market Value)Other than trade investments (Quoted)Units in mutual funds of Rs. 10 each743,106.133 (Previous year Nil) units of GFBG IDFC Money Manager Fund - 10,426,894 -Treasury Plan - Institutional Plan B - Growth3,891,294.852 (Previous year Nil) units of DWS Ultra Short Term Fund - 40,121,585 -Institutional Growth2,086,714.350 (Previous year Nil) units of 2032/HDFC Cash Management Fund - 40,095,799 -Treasury Advantage Fund - Wholesale - GrowthNil (Previous year 5,065,237.974) units of Birla Sun Life Liquid Plus - Institutional - - 50,686,823Daily Dividend - ReinvestmentNil (Previous year 5,021,464.997) units of Kotak Flexi Debt Scheme - Daily Dividend - 50,370,818Nil (Previous year 4,048,674.995) units of TFLD TATA Floater Fund - Daily Dividend - 40,630,883Nil (Previous year 2,883,067.574) units of 28Q ICICI Prudential - - 30,484,115Flexible Income Plan Dividend - Daily Dividend ReinvesmentUnits in mutual funds of Rs. 1,000 eachNil (Previous year 92,378.275) units of Reliance Liquidity Plus Fund- - 92,483,254Institutional Option -Daily Dividend Plan

669,912,278 785,273,893

Notes :1.*Held in the name of the Managing Director in the interest of the Company.2. **Held in the name of the Employee in the interest of the Company.

3. The following units held in mutual funds were purchased and sold during the year: Purchased Value (Rs.)

- In Dividend option: Units in mutual funds of Rs. 10 each9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93011,868,643.971 28Q ICICI Prudential - Flexible Income Plan Dividend - 125,493,107Daily Dividend Reinvesment 11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,57341,305.361 TFLD TATA Floater Fund - Daily Dividend 414,524

Schedules to the Accounts

4,911.320 Birla Sun Life Liquid Plus - Institutional - Daily Dividend - Reinvestment 49,1478,074,656.399 Kotak Flexi Debt Scheme - Daily Dividend 81,031,2642,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment 2,922,261.628 GFBG IDFC Money Manager Fund - Treasury Plan - 40,434,301Institutional Plan B - Growth 3,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - 30,426,894Institutional Plan B - Daily Dividend3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,891,294.852 DWS Ultra Short Term Fund - Institutional Growth 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - 40,095,799Wholesale - Daily Dividend - Reinvestment Option 2,086,714.350 2032/HDFC Cash Management Fund - Treasury Advantage Fund - 40,095,799Wholesale - Growth 8,159,398.664 Reliance Fixed Horizon Fund - VIII - Series 12 - 81,593,987Institutional Dividend Payout Plan 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,415,7092,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,023

Units in mutual funds of Rs. 1,000 each173,485.241 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 173,682,38919,998.720 Templeton India Treasury Management Account Institutional Plan - 20,012,179Daily Dividend Reinvestment

Sold

- In Dividend option:Units in mutual funds of Rs. 10 each9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93014,751,711.545 28Q ICICI Prudential - Flexible Income Plan Dividend - 155,977,222Daily Dividend Reinvesment 11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,5734,089,980.356 TFLD TATA Floater Fund - Daily Dividend 41,045,4075,070,149.294 Birla Sun Life Liquid Plus - Institutional - Daily Dividend Reinvestment 50,735,97013,096,121.396 Kotak Flexi Debt Scheme - Daily Dividend 131,402,0822,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment 2,179,155.495 GFBG IDFC Money Manager Fund - Treasury Plan - 30,007,407Institutional Plan B - Growth 3,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - 30,426,894Institutional Plan B - Daily Dividend 3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - 40,095,799Wholesale - Daily Dividend - Reinvestment Option 8,159,398.664 Reliance Fixed Horizon Fund - VIII - Series 12 - 81,593,987Institutional Dividend Payout Plan 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,409,3112,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,023

Schedule 8 : Investments (continued)

68 69

Schedule 12 : Other Current Assets As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Interest accrued on deposits and others 4,667,457 11,197,952Income accrued for which invoices have been raised subsequently 1,344,133 4,275,351

6,011,590 15,473,303

Included in Other current assets are:i) Outstanding from two subsidiaries, companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 i.e. CR Retail Malls (India) Private Limited - 8,329,167 Sunrise Infotainment Private Limited - 1,035,370ii) Maximum amount outstanding from such company at any time during the year CR Retail Malls (India) Private Limited 10,503,923 8,329,167 Sunrise Infotainment Private Limited 6,585,161 1,035,370

Schedules to the Accounts Schedules to the Accounts

Units in mutual funds of Rs. 1,000 each265,863.516 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 266,165,64319,998.720 Templeton India Treasury Management Account Institutional Plan - 20,012,179Daily Dividend Reinvestment

March 31, 2009 March 31, 20084. Aggregate value of investments Market Value Cost Market Value CostQuoted 90,644,278 90,644,278 264,655,893 264,655,893Unquoted 579,268,000 520,618,000

669,912,278 785,273,893

Schedule 8 : Investments (continued)

Schedule 9 : Inventories As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

(At lower of cost and net realisable value) Food and beverages 8,125,610 5,801,711Stores and spares 19,128,418 15,108,577

27,254,028 20,910,288

Schedule 10 : Sundry DebtorsDebts outstanding for a period exceeding six monthsSecured, considered good 536,443 1,843,522Unsecured, considered good 15,386,019 6,949,095Unsecured, considered doubtful 6,387,037 5,048,856Other debtsSecured, considered good 5,239,155 2,964,948Unsecured, considered good 113,749,329 119,106,327Unsecured, considered doubtful 105,279 148,314

141,403,262 136,061,062Less : Provision for doubtful debts 6,492,316 5,197,170

134,910,946 130,863,892

Included in Sundry debtors are:i) Outstanding from a subsidiary company under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 i.e. PVR bluO Entertainment Limited 2,988,888 -ii) Maximum amount outstanding from such company at any time during the year PVR bluO Entertainment Limited 2,988,888 -

Schedule 11 : Cash and Bank BalancesCash on hand 3,389,156 7,874,346Balances with scheduled banks:On current accounts 7,995,548 89,990,502On deposit accounts* 45,628,049 13,218,792On unpaid and unclaimed dividend accounts 174,786 76,817

57,187,539 111,160,457

* Includes fixed deposit receipts pledged with banks amounting to Rs. 44,490,758 (Previous year Rs. 12,765,722).

Schedule 13 : Loans and advancesUnsecured, considered goodAdvances recoverable in cash or in kind or for value to be received 58,647,250 58,489,538Balance with excise authorities 44,204,329 9,167,146Inter-corporate loans and advances to subsidiaries 392,325,000 248,656,035 Inter-corporate loans to others 20,000,000 -Advance against share capital given to a proposed subsidiary - 1,096,735Advance payment of Income Tax/Tax Deducted at Source/Tax Refundable (net) 147,299,230 4,767,073MAT Credit Entitlement Account 9,300,000 -Deposits - others 371,575,103 333,143,256Unsecured, considered doubtfulAdvances recoverable in cash or in kind or for value to be received 57,462 207,462

1,043,408,374 655,527,245Less : Provision for doubtful advances 57,462 207,462

1,043,350,912 655,319,783

Included in Loans and advances are:i) Outstanding from subsidiaries, companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 i.e. PVR Pictures Limited - 50,000,000 CR Retail Malls (India) Private Limited 231,925,000 100,205,019 Sunrise Infotainment Private Limited 160,400,000 98,451,016ii) Maximum amount outstanding from such companies at any time during the year PVR Pictures Limited 95,000,000 226,600,000 CR Retail Malls (India) Private Limited 231,925,000 100,484,970 Sunrise Infotainment Private Limited 160,400,000 123,400,000iii) Outstanding from two private limited companies in which some of the directors of the Company are interested as directors 4,900,000 4,900,000

70 71

Schedule 12 : Other Current Assets As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Interest accrued on deposits and others 4,667,457 11,197,952Income accrued for which invoices have been raised subsequently 1,344,133 4,275,351

6,011,590 15,473,303

Included in Other current assets are:i) Outstanding from two subsidiaries, companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 i.e. CR Retail Malls (India) Private Limited - 8,329,167 Sunrise Infotainment Private Limited - 1,035,370ii) Maximum amount outstanding from such company at any time during the year CR Retail Malls (India) Private Limited 10,503,923 8,329,167 Sunrise Infotainment Private Limited 6,585,161 1,035,370

Schedules to the Accounts Schedules to the Accounts

Units in mutual funds of Rs. 1,000 each265,863.516 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 266,165,64319,998.720 Templeton India Treasury Management Account Institutional Plan - 20,012,179Daily Dividend Reinvestment

March 31, 2009 March 31, 20084. Aggregate value of investments Market Value Cost Market Value CostQuoted 90,644,278 90,644,278 264,655,893 264,655,893Unquoted 579,268,000 520,618,000

669,912,278 785,273,893

Schedule 8 : Investments (continued)

Schedule 9 : Inventories As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

(At lower of cost and net realisable value) Food and beverages 8,125,610 5,801,711Stores and spares 19,128,418 15,108,577

27,254,028 20,910,288

Schedule 10 : Sundry DebtorsDebts outstanding for a period exceeding six monthsSecured, considered good 536,443 1,843,522Unsecured, considered good 15,386,019 6,949,095Unsecured, considered doubtful 6,387,037 5,048,856Other debtsSecured, considered good 5,239,155 2,964,948Unsecured, considered good 113,749,329 119,106,327Unsecured, considered doubtful 105,279 148,314

141,403,262 136,061,062Less : Provision for doubtful debts 6,492,316 5,197,170

134,910,946 130,863,892

Included in Sundry debtors are:i) Outstanding from a subsidiary company under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 i.e. PVR bluO Entertainment Limited 2,988,888 -ii) Maximum amount outstanding from such company at any time during the year PVR bluO Entertainment Limited 2,988,888 -

Schedule 11 : Cash and Bank BalancesCash on hand 3,389,156 7,874,346Balances with scheduled banks:On current accounts 7,995,548 89,990,502On deposit accounts* 45,628,049 13,218,792On unpaid and unclaimed dividend accounts 174,786 76,817

57,187,539 111,160,457

* Includes fixed deposit receipts pledged with banks amounting to Rs. 44,490,758 (Previous year Rs. 12,765,722).

Schedule 13 : Loans and advancesUnsecured, considered goodAdvances recoverable in cash or in kind or for value to be received 58,647,250 58,489,538Balance with excise authorities 44,204,329 9,167,146Inter-corporate loans and advances to subsidiaries 392,325,000 248,656,035 Inter-corporate loans to others 20,000,000 -Advance against share capital given to a proposed subsidiary - 1,096,735Advance payment of Income Tax/Tax Deducted at Source/Tax Refundable (net) 147,299,230 4,767,073MAT Credit Entitlement Account 9,300,000 -Deposits - others 371,575,103 333,143,256Unsecured, considered doubtfulAdvances recoverable in cash or in kind or for value to be received 57,462 207,462

1,043,408,374 655,527,245Less : Provision for doubtful advances 57,462 207,462

1,043,350,912 655,319,783

Included in Loans and advances are:i) Outstanding from subsidiaries, companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 i.e. PVR Pictures Limited - 50,000,000 CR Retail Malls (India) Private Limited 231,925,000 100,205,019 Sunrise Infotainment Private Limited 160,400,000 98,451,016ii) Maximum amount outstanding from such companies at any time during the year PVR Pictures Limited 95,000,000 226,600,000 CR Retail Malls (India) Private Limited 231,925,000 100,484,970 Sunrise Infotainment Private Limited 160,400,000 123,400,000iii) Outstanding from two private limited companies in which some of the directors of the Company are interested as directors 4,900,000 4,900,000

70 71

Schedules to the Accounts Schedules to the Accounts

Schedule 17 : Other Income As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

InterestOn bank deposits (Gross, Tax Deducted at Source Rs. 887,963, 4,011,824 1,006,616Previous year Rs. 208,378)On long term investments - Non Trade (Gross, Tax Deducted at 616,037 572,105Source Rs. Nil, Previous year Rs. Nil)From subsidiaries (Gross, Tax Deducted at Source Rs. 4,473,720, 19,742,809 35,190,629Previous year Rs. 7,972,196)From others (Gross, Tax Deducted at Source Rs. 450,220, 2,747,300 579,642Previous year Rs. Nil)

Dividend income (from current investments - other than trade) 12,677,880 22,061,198Rent received (Gross, Tax Deducted at Source Rs. 1,384,732, 6,838,411 7,322,537Previous year Rs. 1,001,852)Royalty Income (to the extent of sign on fee, from a customer) - 832,416Foreign exchange difference (net) 29,475 -Unspent Liabilities written back 11,474,617 4,318,895Miscellaneous income 13,351,057 14,343,298

71,489,410 86,227,336

Schedule 18 : Personnel ExpensesSalary and other allowances 294,015,292 210,091,695Contribution to gratuity fund (Refer Note No. 17 of Schedule 22) 5,272,075 4,772,582Contribution to provident and other funds (Refer Note No. 17 of Schedule 22) 24,140,187 18,827,688Staff welfare expenses 17,410,815 13,432,606

340,838,369 247,124,571

Schedule 14 : Current Liabilities As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Sundry Creditors(a) total outstanding dues of Micro and Small Enterprises - -(b) total outstanding dues of creditors other than Micro and Small Enterprises 404,717,270 340,817,924Unclaimed dividend (statutory liabilities as referred in Section 205C of the Companies Act, 1956)* 174,786 76,817Book overdraft with banks 19,843,183 7,085,506Security deposits 17,811,889 17,220,223Income received in advance (includes amount adjustable after one year Rs. 36,000,000, Previous year Rs. Nil) 65,598,583 11,054,435Interest accrued but not due on loans 2,086,510 1,744,011

510,232,221 377,998,916

Included in Sundry Creditors are:Payable to subsidiary companies 43,526,363 3,518,150* Shall be transferred to Investor Education and Protection Fund (as and when due)

Schedule 15 : ProvisionsFor Interim Dividend - on Equity Shares - 23,013,870 - on Preference Shares - 7,390,710For Final Dividend - on Equity Shares 23,013,870 -For Corporate Dividend Tax 3,911,207 5,167,258For Fringe Benefit Tax (Net of Payment) 311,540 702,499 For Staff benefit schemes - Leave Encashment 8,378,921 5,423,448For Staff benefit schemes - Gratuity 5,272,075 4,772,582

40,887,613 46,470,367

Schedule 16 : Operating IncomeIncome from sale of tickets of films (net of entertainment tax paid 1,509,672,603 1,306,621,836Rs. 337,067,058, Previous year Rs. 326,170,479)Income from Revenue Sharing (net of entertainment tax paid 254,851,247 268,710,263 Rs. Nil, Previous year Rs. 358,824)Income from sale of film rights and distribution of films - 452,981Sale of food and beverages 542,694,976 464,873,343Advertisement (Gross,Tax Deducted at source Rs. 20,632,755, 380,296,634 285,935,259Previous year Rs. 7,035,995)Royalty Income (to the extent of pouring fee) (Gross, Tax 2,178,293 7,432,987Deducted at source Rs. 116,456, Previous year Rs. Nil)Management fees (Gross, Tax Deducted at source Rs. 381,912, 4,133,533 11,813,969Previous year Rs. 848,474)Convinience Fees 21,754,580 14,926,478

2,715,581,866 2,360,767,116

72 73

Schedules to the Accounts Schedules to the Accounts

Schedule 17 : Other Income As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

InterestOn bank deposits (Gross, Tax Deducted at Source Rs. 887,963, 4,011,824 1,006,616Previous year Rs. 208,378)On long term investments - Non Trade (Gross, Tax Deducted at 616,037 572,105Source Rs. Nil, Previous year Rs. Nil)From subsidiaries (Gross, Tax Deducted at Source Rs. 4,473,720, 19,742,809 35,190,629Previous year Rs. 7,972,196)From others (Gross, Tax Deducted at Source Rs. 450,220, 2,747,300 579,642Previous year Rs. Nil)

Dividend income (from current investments - other than trade) 12,677,880 22,061,198Rent received (Gross, Tax Deducted at Source Rs. 1,384,732, 6,838,411 7,322,537Previous year Rs. 1,001,852)Royalty Income (to the extent of sign on fee, from a customer) - 832,416Foreign exchange difference (net) 29,475 -Unspent Liabilities written back 11,474,617 4,318,895Miscellaneous income 13,351,057 14,343,298

71,489,410 86,227,336

Schedule 18 : Personnel ExpensesSalary and other allowances 294,015,292 210,091,695Contribution to gratuity fund (Refer Note No. 17 of Schedule 22) 5,272,075 4,772,582Contribution to provident and other funds (Refer Note No. 17 of Schedule 22) 24,140,187 18,827,688Staff welfare expenses 17,410,815 13,432,606

340,838,369 247,124,571

Schedule 14 : Current Liabilities As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Sundry Creditors(a) total outstanding dues of Micro and Small Enterprises - -(b) total outstanding dues of creditors other than Micro and Small Enterprises 404,717,270 340,817,924Unclaimed dividend (statutory liabilities as referred in Section 205C of the Companies Act, 1956)* 174,786 76,817Book overdraft with banks 19,843,183 7,085,506Security deposits 17,811,889 17,220,223Income received in advance (includes amount adjustable after one year Rs. 36,000,000, Previous year Rs. Nil) 65,598,583 11,054,435Interest accrued but not due on loans 2,086,510 1,744,011

510,232,221 377,998,916

Included in Sundry Creditors are:Payable to subsidiary companies 43,526,363 3,518,150* Shall be transferred to Investor Education and Protection Fund (as and when due)

Schedule 15 : ProvisionsFor Interim Dividend - on Equity Shares - 23,013,870 - on Preference Shares - 7,390,710For Final Dividend - on Equity Shares 23,013,870 -For Corporate Dividend Tax 3,911,207 5,167,258For Fringe Benefit Tax (Net of Payment) 311,540 702,499 For Staff benefit schemes - Leave Encashment 8,378,921 5,423,448For Staff benefit schemes - Gratuity 5,272,075 4,772,582

40,887,613 46,470,367

Schedule 16 : Operating IncomeIncome from sale of tickets of films (net of entertainment tax paid 1,509,672,603 1,306,621,836Rs. 337,067,058, Previous year Rs. 326,170,479)Income from Revenue Sharing (net of entertainment tax paid 254,851,247 268,710,263 Rs. Nil, Previous year Rs. 358,824)Income from sale of film rights and distribution of films - 452,981Sale of food and beverages 542,694,976 464,873,343Advertisement (Gross,Tax Deducted at source Rs. 20,632,755, 380,296,634 285,935,259Previous year Rs. 7,035,995)Royalty Income (to the extent of pouring fee) (Gross, Tax 2,178,293 7,432,987Deducted at source Rs. 116,456, Previous year Rs. Nil)Management fees (Gross, Tax Deducted at source Rs. 381,912, 4,133,533 11,813,969Previous year Rs. 848,474)Convinience Fees 21,754,580 14,926,478

2,715,581,866 2,360,767,116

72 73

Schedules to the Accounts

Schedule 19 : Operating and Other Expenses As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Rent (Refer Note No. 19(i)(a) of Schedule 22) 388,716,941 322,147,267Less: Receipt from sub-lessees (Gross, Tax Deducted at Source Rs. 12,249,542, Previous year Rs. 3,999,146) (60,493,570) 328,223,371 (29,229,751) 292,917,516Rates and taxes 12,317,619 13,584,636Communication costs 20,760,868 18,284,427Professional charges 17,428,472 21,604,296Advertisement and publicity (net) 121,974,873 102,746,662Business promotion and entertainment 3,692,695 2,550,093Travelling and conveyance 46,515,938 37,999,123Printing and stationery 12,440,470 10,963,761Insurance 6,821,706 7,162,963Repairs and maintenance :

- Buildings 47,431,977 38,422,067- Plant & Machinery 28,706,534 22,716,058- Common area maintenance 161,254,642 110,139,459- Others 22,455,820 11,550,199

Electricity and water charges 161,047,771 125,366,185Auditor’s remuneration

- Audit fee 2,040,550 2,119,492- Tax audit fee 275,750 280,900- Quarterly limited review of accounts 1,011,240 1,011,240- Certification etc. 78,652 96,217- Out-of-pocket expenses 186,150 3,592,342 79,436

Security service charges 26,405,600 20,849,745Donations - 3,246,760Pre-operative expenses charged off 76,692 71,425Irrecoverable balances written off (net) 465,954 7,396,169Provision for doubtful debts and advances (net) 1,145,146 1,273,309Loss on sale of Current Investments - other than trade 6,398 20,489Loss on disposal of fixed assets (net) 13,797,816 2,278,058Directors Sitting Fees 840,000 520,000Bank and other charges 14,346,980 11,515,607Miscellaneous expenses 16,216,591 18,065,996

1,067,966,275 884,832,288

Rent includes amount paid to directors 8,548,000 6,286,500

Schedule 20 : Interest paidIntereston fixed loans 113,480,215 66,820,005to banks and others 814,420 1,320,261

114,294,635 68,140,266

Schedules to the Accounts

Schedule 21 : Earning per share (EPS) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Net profit as per profit and loss account 126,516,928 210,657,663Less: Dividend on Preference Shares and tax thereon 1,458,432 8,646,762

Net Profit for calculation of basic and diluted EPS 125,058,496 202,010,901

Weighted average number of equity shares in calculating basic EPS:Number of equity shares outstanding at the beginning of the year 23,013,870 23,013,870Number of equity shares outstanding at the end of the year 23,013,870 23,013,870

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,013,870

Weighted average number of equity shares in calculating diluted EPS:Weighted number of equity shares of Rs. 10 each outstanding during the year (as above) 23,013,870 23,013,870Add: Effect of advance received against convertible share warrants - 659,016

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,672,886

Basic Earnings Per Share 5.43 8.78Diluted Earnings Per Share 5.43 8.53

74 75

Schedules to the Accounts

Schedule 19 : Operating and Other Expenses As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Rent (Refer Note No. 19(i)(a) of Schedule 22) 388,716,941 322,147,267Less: Receipt from sub-lessees (Gross, Tax Deducted at Source Rs. 12,249,542, Previous year Rs. 3,999,146) (60,493,570) 328,223,371 (29,229,751) 292,917,516Rates and taxes 12,317,619 13,584,636Communication costs 20,760,868 18,284,427Professional charges 17,428,472 21,604,296Advertisement and publicity (net) 121,974,873 102,746,662Business promotion and entertainment 3,692,695 2,550,093Travelling and conveyance 46,515,938 37,999,123Printing and stationery 12,440,470 10,963,761Insurance 6,821,706 7,162,963Repairs and maintenance :

- Buildings 47,431,977 38,422,067- Plant & Machinery 28,706,534 22,716,058- Common area maintenance 161,254,642 110,139,459- Others 22,455,820 11,550,199

Electricity and water charges 161,047,771 125,366,185Auditor’s remuneration

- Audit fee 2,040,550 2,119,492- Tax audit fee 275,750 280,900- Quarterly limited review of accounts 1,011,240 1,011,240- Certification etc. 78,652 96,217- Out-of-pocket expenses 186,150 3,592,342 79,436

Security service charges 26,405,600 20,849,745Donations - 3,246,760Pre-operative expenses charged off 76,692 71,425Irrecoverable balances written off (net) 465,954 7,396,169Provision for doubtful debts and advances (net) 1,145,146 1,273,309Loss on sale of Current Investments - other than trade 6,398 20,489Loss on disposal of fixed assets (net) 13,797,816 2,278,058Directors Sitting Fees 840,000 520,000Bank and other charges 14,346,980 11,515,607Miscellaneous expenses 16,216,591 18,065,996

1,067,966,275 884,832,288

Rent includes amount paid to directors 8,548,000 6,286,500

Schedule 20 : Interest paidIntereston fixed loans 113,480,215 66,820,005to banks and others 814,420 1,320,261

114,294,635 68,140,266

Schedules to the Accounts

Schedule 21 : Earning per share (EPS) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Net profit as per profit and loss account 126,516,928 210,657,663Less: Dividend on Preference Shares and tax thereon 1,458,432 8,646,762

Net Profit for calculation of basic and diluted EPS 125,058,496 202,010,901

Weighted average number of equity shares in calculating basic EPS:Number of equity shares outstanding at the beginning of the year 23,013,870 23,013,870Number of equity shares outstanding at the end of the year 23,013,870 23,013,870

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,013,870

Weighted average number of equity shares in calculating diluted EPS:Weighted number of equity shares of Rs. 10 each outstanding during the year (as above) 23,013,870 23,013,870Add: Effect of advance received against convertible share warrants - 659,016

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,672,886

Basic Earnings Per Share 5.43 8.78Diluted Earnings Per Share 5.43 8.53

74 75

Schedule 22: Notes to the Accounts1. Nature of Operations

PVR Limited is in the business of film exhibition. The Company also earns revenue from in-cinema advertisements/product displays and in-cinema sale of food and beverages.

2. Statement of Significant Accounting Policies

(a) Basis of preparationThe financial statements are prepared to comply in all material respects with the Notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements are prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(b) Use of estimatesThe 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 results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

(c) Fixed Assets Fixed Assets are stated at Cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price (net of CENVAT) and any directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing Cost, relating to acquisition of fixed assets which taken substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

Leasehold improvements represent expenses incurred towards civil works, interior furnishings, etc. on the leased premises at the various locations.

(d) DepreciationLeasehold Improvements are amortized over the estimated useful life or unexpired period of lease (whichever is lower) on a straight line basis.

Cost of structural improvements at premises where Company has entered into agreement with the parties to operate and manage Multiscreen/Single Screen Cinemas on revenue sharing basis are amortized over the estimated useful life or lock in period of the agreement (whichever is lower) on a straight line basis.

Depreciation on all other assets is provided on Straight-Line Method at the rates computed based on estimated useful life of the assets, which are equal to the corresponding rates prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing Rs. 5,000 and below are fully depreciated in the year of acquisition.

Notes to the Accounts

(e) Intangibles

Software

Cost relating to purchased software’s is capitalized and is amortized on a Straight-Line Basis over their estimated useful lives of six years.

Software licenses costing Rs. 5,000 and below are fully depreciated in the year of acquisition.

Film Right’s CostFilm right cost is capitalized and is amortized fully as and when the film is released.

(f) Expenditure on new projects and substantial expansionExpenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent expenditure is related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period, which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is adjusted against the total of the indirect expenditure.

All direct capital expenditure on expansion is capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its originally assessed standard of performance.

(g) InvestmentsInvestments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

(h) InventoriesInventories are valued as follows:

Food and beverages Lower of cost and net realizable value. Cost is determined on First In First Out Basis.

Stores and spares Lower of cost and net realizable value. Cost is determined on First In First Out Basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.

(i) Leases

Where the Company is the lesseeFinance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are

depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on an ongoing basis.

Where the Company is the lessorAssets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognised as revenue. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

(j) Revenue recognitionRevenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Amount of entertainment tax, sales tax and service tax collected on generating operating revenue has been shown as a reduction from the operating revenue.

Sale of Tickets of FilmsRevenue from sale of tickets of films is recognised as and when the film is exhibited.

Revenue SharingIncome from revenue sharing is recognized in accordance with the terms of agreement with parties to operate and manage Multiscreen/ Single screen Cinemas, namely PVR EDM, PVR Lucknow, PVR Indore, PVR Ludhiana and PVR Mulund in coordinated manner.

Income from Distribution of filmsTheatrical revenue from the distribution of films is accounted for on the basis of box office reports received from various exhibitors and revenue from the sale of satellite / TV rights is recognised at the time of initial period of transfer of right to the customer.

Sale of Food and BeveragesRevenue from sale of food and beverages is recognised upon passage of title to customers, which coincides with their delivery.

Advertisement RevenueAdvertisement revenue is recognised as and when advertisement is displayed at the cinema halls.

Royalty income (to the extent of Pouring Fee, from a customer) and Management Fee Revenue

Revenue is recognised on an accrual basis in accordance with the terms of the relevant agreements.

Convenience FeeConvenience fee is recognized as and when the ticket is sold on the website of the Company.

Interest IncomeInterest revenue is recognised on a time proportion basis, taking into account the amount outstanding and the rates applicable.

Dividend IncomeRevenue is recognized where the shareholder’s right to receive payment is established by the balance sheet date.

(k) Foreign currency Translations

(i) Initial RecognitionForeign currency transactions are recorded in Indian Rupees by applying to the foreign currency amount, the exchange rate between the Indian Rupee and the foreign currency prevailing at the date of the transaction.

(ii) ConversionForeign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange DifferencesExchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

(l) Retirement and other employee benefits(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the provident funds are due. There are no other obligations other than the contribution payable to the respective trusts.

(ii) Gratuity is a defined benefit obligation. The Company has created an approved gratuity fund for the future payment of gratuity to the employees. The Company accounts for the gratuity liability, based upon the actuarial valuation performed in accordance with the Projected Unit Credit method carried out at the year end, by an independent actuary. Gratuity liability of an employee, who leaves the Company before the close of the year and which is remaining unpaid, is provided on actual computation basis.

(iii) Short term compensated absences are provided for on based on estimates. Long term compensated balances are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. Leave encashment liability of an employee, who leaves the Company before the close of the year and which is remaining unpaid, is provided for on actual computation basis.

(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(m) Income taxesTax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax are measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deffered tax liabilities are offset, if a legally enforceable right exists to set of current tax assets against current tax liabilities and the deffered tax assets and deferred tax liabilites relates to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In case where the Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against

Notes to the Accounts

76 77

Schedule 22: Notes to the Accounts1. Nature of Operations

PVR Limited is in the business of film exhibition. The Company also earns revenue from in-cinema advertisements/product displays and in-cinema sale of food and beverages.

2. Statement of Significant Accounting Policies

(a) Basis of preparationThe financial statements are prepared to comply in all material respects with the Notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements are prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(b) Use of estimatesThe 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 results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

(c) Fixed Assets Fixed Assets are stated at Cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price (net of CENVAT) and any directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing Cost, relating to acquisition of fixed assets which taken substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

Leasehold improvements represent expenses incurred towards civil works, interior furnishings, etc. on the leased premises at the various locations.

(d) DepreciationLeasehold Improvements are amortized over the estimated useful life or unexpired period of lease (whichever is lower) on a straight line basis.

Cost of structural improvements at premises where Company has entered into agreement with the parties to operate and manage Multiscreen/Single Screen Cinemas on revenue sharing basis are amortized over the estimated useful life or lock in period of the agreement (whichever is lower) on a straight line basis.

Depreciation on all other assets is provided on Straight-Line Method at the rates computed based on estimated useful life of the assets, which are equal to the corresponding rates prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing Rs. 5,000 and below are fully depreciated in the year of acquisition.

Notes to the Accounts

(e) Intangibles

Software

Cost relating to purchased software’s is capitalized and is amortized on a Straight-Line Basis over their estimated useful lives of six years.

Software licenses costing Rs. 5,000 and below are fully depreciated in the year of acquisition.

Film Right’s CostFilm right cost is capitalized and is amortized fully as and when the film is released.

(f) Expenditure on new projects and substantial expansionExpenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent expenditure is related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period, which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is adjusted against the total of the indirect expenditure.

All direct capital expenditure on expansion is capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its originally assessed standard of performance.

(g) InvestmentsInvestments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

(h) InventoriesInventories are valued as follows:

Food and beverages Lower of cost and net realizable value. Cost is determined on First In First Out Basis.

Stores and spares Lower of cost and net realizable value. Cost is determined on First In First Out Basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.

(i) Leases

Where the Company is the lesseeFinance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalized.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are

depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on an ongoing basis.

Where the Company is the lessorAssets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognised as revenue. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

(j) Revenue recognitionRevenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Amount of entertainment tax, sales tax and service tax collected on generating operating revenue has been shown as a reduction from the operating revenue.

Sale of Tickets of FilmsRevenue from sale of tickets of films is recognised as and when the film is exhibited.

Revenue SharingIncome from revenue sharing is recognized in accordance with the terms of agreement with parties to operate and manage Multiscreen/ Single screen Cinemas, namely PVR EDM, PVR Lucknow, PVR Indore, PVR Ludhiana and PVR Mulund in coordinated manner.

Income from Distribution of filmsTheatrical revenue from the distribution of films is accounted for on the basis of box office reports received from various exhibitors and revenue from the sale of satellite / TV rights is recognised at the time of initial period of transfer of right to the customer.

Sale of Food and BeveragesRevenue from sale of food and beverages is recognised upon passage of title to customers, which coincides with their delivery.

Advertisement RevenueAdvertisement revenue is recognised as and when advertisement is displayed at the cinema halls.

Royalty income (to the extent of Pouring Fee, from a customer) and Management Fee Revenue

Revenue is recognised on an accrual basis in accordance with the terms of the relevant agreements.

Convenience FeeConvenience fee is recognized as and when the ticket is sold on the website of the Company.

Interest IncomeInterest revenue is recognised on a time proportion basis, taking into account the amount outstanding and the rates applicable.

Dividend IncomeRevenue is recognized where the shareholder’s right to receive payment is established by the balance sheet date.

(k) Foreign currency Translations

(i) Initial RecognitionForeign currency transactions are recorded in Indian Rupees by applying to the foreign currency amount, the exchange rate between the Indian Rupee and the foreign currency prevailing at the date of the transaction.

(ii) ConversionForeign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange DifferencesExchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

(l) Retirement and other employee benefits(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the provident funds are due. There are no other obligations other than the contribution payable to the respective trusts.

(ii) Gratuity is a defined benefit obligation. The Company has created an approved gratuity fund for the future payment of gratuity to the employees. The Company accounts for the gratuity liability, based upon the actuarial valuation performed in accordance with the Projected Unit Credit method carried out at the year end, by an independent actuary. Gratuity liability of an employee, who leaves the Company before the close of the year and which is remaining unpaid, is provided on actual computation basis.

(iii) Short term compensated absences are provided for on based on estimates. Long term compensated balances are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. Leave encashment liability of an employee, who leaves the Company before the close of the year and which is remaining unpaid, is provided for on actual computation basis.

(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(m) Income taxesTax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax are measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deffered tax liabilities are offset, if a legally enforceable right exists to set of current tax assets against current tax liabilities and the deffered tax assets and deferred tax liabilites relates to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In case where the Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against

Notes to the Accounts

76 77

future taxable profits. Unrecognised deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Minimum Alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(n) Earning Per shareBasic Earnings Per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting dividend on preference shares and attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(o) ProvisionsA provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best management estimate required to settle the obligation at each Balance Sheet date. These are reviewed at each Balance Sheet date and are adjusted to reflect the current best management estimates.

(p) Cash and Cash equivalentsCash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

(q) Employee Stock Compensation CostMeasurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the fair value method. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

3. Segment Information

Business Segments:The Company is solely engaged in the business of film exhibition. The entire operations are governed by the same set of risk and returns, hence, the same has been considered as representing a single

Notes to the Accounts

4. R

elat

ed P

arty

Dis

clos

ure

Su

bsidi

ary C

ompa

nies

Enter

prise

s hav

ing

Key M

anag

emen

t Pers

onne

l Re

lative

s of K

ey

Enter

prise

s own

ed or

sign

ifica

ntly

Gran

d Tota

l

sig

nifica

nt in

fluen

ce

Ma

nage

ment

Perso

nnel

influe

nced

by ke

y man

agem

ent

over

the C

ompa

ny

perso

nnel

or th

eir re

lative

s

31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8

Trans

actio

ns du

ring t

he ye

ar

Rem

uner

atio

n pa

id

Aja

y Bijli

-

-

-

-

19

,719,9

49

14,47

9,200

-

-

-

-

19

,719,9

49

14,47

9,200

Sa

njeev

Kuma

r -

-

-

-

9,

875,9

74

7,35

3,000

-

-

-

-

9,

875,9

74

7,35

3,000

Ma

nage

ment

Fees

PVR b

luO En

terta

inmen

t Lim

ited

3,00

0,000

-

-

-

-

-

-

-

-

-

3,

000,0

00

-

Rent

Exp

ense

Priya

Exhib

itors

Priva

te Lim

ited

-

-

16,44

7,356

17

,070,5

20

-

-

-

-

-

-

16,44

7,356

17

,070,5

20

Leisu

re Wo

rld Pr

ivate

Limite

d -

-

-

-

-

-

-

-

24

,336,4

87

17,84

1,619

24

,336,4

87

17,84

1,619

Film

Dist

ribut

ors S

hare

expe

nse

(net

of r

ecov

ery t

owar

ds p

ublic

ity)

PVR P

ictur

es Lim

ited

105,6

60,53

7 60

,811,2

01

-

-

-

-

-

-

-

-

105,6

60,53

7 60

,811,2

01

Inte

rim D

ivide

nd P

aid fo

r 200

7-08

Bijli

Inve

stmen

ts Pr

ivate

Limite

d -

-

4,

975,5

97

-

-

-

-

-

-

-

4,97

5,597

-

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

4,

330,0

00

-

-

-

-

-

-

-

4,33

0,000

-

Aja

y Bijli

-

-

-

-

18

,172

-

-

-

-

-

18,17

2 -

Divid

end

Paid

on

Pre

fere

nce

Shar

es

Aja

y Bijli

-

-

-

-

66

3,303

-

-

-

-

-

66

3,303

-

Adva

nce

Rece

ived

again

st W

arra

nts

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

-

25

,820,4

00

-

-

-

-

-

-

-

25,82

0,400

Fore

feitu

re o

f Adv

ance

Rec

eived

again

st W

arra

nts

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

25

,820,4

00

-

-

-

-

-

-

-

25,82

0,400

-

Refu

nd o

f Sha

res A

pplic

atio

n M

oney

Sunr

ise In

fotain

ment

Priva

te Lim

ited

-

10,00

0,000

-

-

-

-

-

-

-

-

-

10

,000,0

00

Rede

mpt

ion

of P

refe

renc

e Sh

are

Capi

tal

Aja

y Bijli

-

-

-

-

53

,210,0

00

53,21

0,000

-

-

-

-

53

,210,0

00

53,21

0,000

Subs

crip

tion

to E

quity

shar

e ca

pita

l

C.R. R

etail M

alls (

India

) Priv

ate L

imite

d -

-

-

-

-

-

-

-

-

-

-

-

PV

R Pict

ures

Limite

d -

20

0,000

,000

-

-

-

-

-

-

-

-

-

200,0

00,00

0 Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d -

49

,900,0

00

-

-

-

-

-

-

-

-

-

49,90

0,000

PV

R bluO

Enter

tainm

ent L

imite

d 58

,650,0

00

-

-

-

-

-

-

-

-

-

58,65

0,000

-

Subs

crip

tion

to P

refe

renc

e sh

are

capi

tal

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d -

50

,000,0

00

-

-

-

-

-

-

-

-

-

50,00

0,000

Inte

r Cor

pora

te L

oans

Give

n

PV

R Pict

ures

Limite

d 95

,000,0

00

158,6

00,00

0 -

-

-

-

-

-

-

-

95

,000,0

00

158,6

00,00

0 C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 37

1,250

,000

-

-

-

-

-

-

-

-

-

371,2

50,00

0 -

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 21

0,400

,000

138,4

00,00

0 -

-

-

-

-

-

-

-

21

0,400

,000

138,4

00,00

0

Inte

r Cor

pora

te L

oans

Rep

aid

PV

R Pict

ures

Limite

d 14

5,000

,000

226,6

00,00

0 -

-

-

-

-

-

-

-

14

5,000

,000

226,6

00,00

0 C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 23

9,325

,000

-

-

-

-

-

-

-

-

-

239,3

25,00

0 -

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 14

8,400

,000

40,00

0,000

-

-

-

-

-

-

-

-

14

8,400

,000

40,00

0,000

Inte

rest

Rec

eived

PVR P

ictur

es Lim

ited

1,92

0,548

16

,093,9

57

-

-

-

-

-

-

-

-

1,92

0,548

16

,093,9

57

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

9,67

5,884

12

,665,6

58

-

-

-

-

-

-

-

-

9,67

5,884

12

,665,6

58

Sunr

ise In

fotain

ment

Priva

te Lim

ited

8,14

6,377

6,

431,0

14

-

-

-

-

-

-

-

-

8,14

6,377

6,

431,0

14

primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard – 17 on Segment Reporting.

Geographical Segments:The Company sells its products and services within India with nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

4. Related Party Disclosures

Subsidiaries C.R. Retail Malls (India) Private LimitedPVR Pictures Limited

Sunrise Infotainment Private Limited PVR bluO Entertainment Limited (with

effect from July 2, 2008)

Key Management Personnel Ajay Bijli, Chairman cum Managing Director and Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Sandhuro Rani and Selena BijliPersonnel

Enterprises having control or Bijli Investments Private Limitedsignificant influence over Priya Exhibitors Private Limitedthe Company

Enterprises owned or The Amritsar Transport Company significantly influenced by key Private Limited management personnel or ATC Carriers Private Limited their relatives Leisure World Private Limited

78 79

future taxable profits. Unrecognised deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Minimum Alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(n) Earning Per shareBasic Earnings Per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting dividend on preference shares and attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(o) ProvisionsA provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best management estimate required to settle the obligation at each Balance Sheet date. These are reviewed at each Balance Sheet date and are adjusted to reflect the current best management estimates.

(p) Cash and Cash equivalentsCash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

(q) Employee Stock Compensation CostMeasurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the fair value method. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

3. Segment Information

Business Segments:The Company is solely engaged in the business of film exhibition. The entire operations are governed by the same set of risk and returns, hence, the same has been considered as representing a single

Notes to the Accounts

4. R

elat

ed P

arty

Dis

clos

ure

Su

bsidi

ary C

ompa

nies

Enter

prise

s hav

ing

Key M

anag

emen

t Pers

onne

l Re

lative

s of K

ey

Enter

prise

s own

ed or

sign

ifica

ntly

Gran

d Tota

l

sig

nifica

nt in

fluen

ce

Ma

nage

ment

Perso

nnel

influe

nced

by ke

y man

agem

ent

over

the C

ompa

ny

perso

nnel

or th

eir re

lative

s

31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8

Trans

actio

ns du

ring t

he ye

ar

Rem

uner

atio

n pa

id

Aja

y Bijli

-

-

-

-

19

,719,9

49

14,47

9,200

-

-

-

-

19

,719,9

49

14,47

9,200

Sa

njeev

Kuma

r -

-

-

-

9,

875,9

74

7,35

3,000

-

-

-

-

9,

875,9

74

7,35

3,000

Ma

nage

ment

Fees

PVR b

luO En

terta

inmen

t Lim

ited

3,00

0,000

-

-

-

-

-

-

-

-

-

3,

000,0

00

-

Rent

Exp

ense

Priya

Exhib

itors

Priva

te Lim

ited

-

-

16,44

7,356

17

,070,5

20

-

-

-

-

-

-

16,44

7,356

17

,070,5

20

Leisu

re Wo

rld Pr

ivate

Limite

d -

-

-

-

-

-

-

-

24

,336,4

87

17,84

1,619

24

,336,4

87

17,84

1,619

Film

Dist

ribut

ors S

hare

expe

nse

(net

of r

ecov

ery t

owar

ds p

ublic

ity)

PVR P

ictur

es Lim

ited

105,6

60,53

7 60

,811,2

01

-

-

-

-

-

-

-

-

105,6

60,53

7 60

,811,2

01

Inte

rim D

ivide

nd P

aid fo

r 200

7-08

Bijli

Inve

stmen

ts Pr

ivate

Limite

d -

-

4,

975,5

97

-

-

-

-

-

-

-

4,97

5,597

-

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

4,

330,0

00

-

-

-

-

-

-

-

4,33

0,000

-

Aja

y Bijli

-

-

-

-

18

,172

-

-

-

-

-

18,17

2 -

Divid

end

Paid

on

Pre

fere

nce

Shar

es

Aja

y Bijli

-

-

-

-

66

3,303

-

-

-

-

-

66

3,303

-

Adva

nce

Rece

ived

again

st W

arra

nts

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

-

25

,820,4

00

-

-

-

-

-

-

-

25,82

0,400

Fore

feitu

re o

f Adv

ance

Rec

eived

again

st W

arra

nts

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

25

,820,4

00

-

-

-

-

-

-

-

25,82

0,400

-

Refu

nd o

f Sha

res A

pplic

atio

n M

oney

Sunr

ise In

fotain

ment

Priva

te Lim

ited

-

10,00

0,000

-

-

-

-

-

-

-

-

-

10

,000,0

00

Rede

mpt

ion

of P

refe

renc

e Sh

are

Capi

tal

Aja

y Bijli

-

-

-

-

53

,210,0

00

53,21

0,000

-

-

-

-

53

,210,0

00

53,21

0,000

Subs

crip

tion

to E

quity

shar

e ca

pita

l

C.R. R

etail M

alls (

India

) Priv

ate L

imite

d -

-

-

-

-

-

-

-

-

-

-

-

PV

R Pict

ures

Limite

d -

20

0,000

,000

-

-

-

-

-

-

-

-

-

200,0

00,00

0 Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d -

49

,900,0

00

-

-

-

-

-

-

-

-

-

49,90

0,000

PV

R bluO

Enter

tainm

ent L

imite

d 58

,650,0

00

-

-

-

-

-

-

-

-

-

58,65

0,000

-

Subs

crip

tion

to P

refe

renc

e sh

are

capi

tal

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d -

50

,000,0

00

-

-

-

-

-

-

-

-

-

50,00

0,000

Inte

r Cor

pora

te L

oans

Give

n

PV

R Pict

ures

Limite

d 95

,000,0

00

158,6

00,00

0 -

-

-

-

-

-

-

-

95

,000,0

00

158,6

00,00

0 C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 37

1,250

,000

-

-

-

-

-

-

-

-

-

371,2

50,00

0 -

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 21

0,400

,000

138,4

00,00

0 -

-

-

-

-

-

-

-

21

0,400

,000

138,4

00,00

0

Inte

r Cor

pora

te L

oans

Rep

aid

PV

R Pict

ures

Limite

d 14

5,000

,000

226,6

00,00

0 -

-

-

-

-

-

-

-

14

5,000

,000

226,6

00,00

0 C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 23

9,325

,000

-

-

-

-

-

-

-

-

-

239,3

25,00

0 -

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 14

8,400

,000

40,00

0,000

-

-

-

-

-

-

-

-

14

8,400

,000

40,00

0,000

Inte

rest

Rec

eived

PVR P

ictur

es Lim

ited

1,92

0,548

16

,093,9

57

-

-

-

-

-

-

-

-

1,92

0,548

16

,093,9

57

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

9,67

5,884

12

,665,6

58

-

-

-

-

-

-

-

-

9,67

5,884

12

,665,6

58

Sunr

ise In

fotain

ment

Priva

te Lim

ited

8,14

6,377

6,

431,0

14

-

-

-

-

-

-

-

-

8,14

6,377

6,

431,0

14

primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard – 17 on Segment Reporting.

Geographical Segments:The Company sells its products and services within India with nil income from overseas market and do not have any operations in economic environments with different set of risks and returns. Hence, it is considered operating in a single geographical segment.

4. Related Party Disclosures

Subsidiaries C.R. Retail Malls (India) Private LimitedPVR Pictures Limited

Sunrise Infotainment Private Limited PVR bluO Entertainment Limited (with

effect from July 2, 2008)

Key Management Personnel Ajay Bijli, Chairman cum Managing Director and Sanjeev Kumar, Joint Managing Director

Relatives of Key Management Sandhuro Rani and Selena BijliPersonnel

Enterprises having control or Bijli Investments Private Limitedsignificant influence over Priya Exhibitors Private Limitedthe Company

Enterprises owned or The Amritsar Transport Company significantly influenced by key Private Limited management personnel or ATC Carriers Private Limited their relatives Leisure World Private Limited

78 79

NOTES:

a) * The Company has availed loans from banks, a body corporate and Small Industries Development Bank of India (SIDBI) aggregating to Rs. 706,746,872 (Previous year Rs. 609,837,346) which are further secured by personal guarantee of two directors of the Company. Term Loan from Punjab National Bank is further secured by second charge on all the movable and immovable assets namely current and movable fixed assets of PVR Phoenix, Mumbai of a subsidiary company. Loan from SIDBI is further secured by first charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi.

b) The above particulars exclude expenses reimbursed to/by related parties.

c) No amount has been provided as doubtful debt or advance/written off or written back in the year in respect of debts due from/to above related parties, except as disclosed above.

5. The Board of Directors of the Company approved the merger of Sunrise Infotainment Private Limited, its subsidiary company in the meeting held on October 24, 2008. Pursuant to this approval, the Company has on January 29, 2009, filed with Honorable High Court at New Delhi, a scheme of amalgamation entailing merger of the subsidiary company with the Company. As per the said scheme, with effect from the Appointed Date i.e. April 01, 2008, the undertaking of the subsidiary company, pursuant to the provisions contained in Sections 391 to 394 and other applicable provisions of the Companies Act 1956, shall stand transferred to and vested in the Company on a going concern basis without any further act, deed or matter. However, the Amalgamation shall be effective from the date of filing of the certified copy of the Order of the Honorable Delhi High Court with Registrar of Companies NCT of Delhi & Haryana. Pending the approval of the said High Court, the effect of the amalgamation has not been given.

6. The following are the details of loans and advances by the Company, outstanding at the end of the year in terms of Securities & Exchange Board of India’s circular dated January 10, 2003:

Outstanding amount as at Maximum amount outstanding during the year March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 Rs. Rs. Rs. Rs.

Loans and Advances to Subsidiaries(including accrued interest) - C.R. Retail Malls (India) Private Limited 231,925,000 107,447,279 238,545,767 107,447,279- PVR Pictures Limited - 50,000,000 95,000,000 226,600,000- Sunrise Infotainment Private Limited 160,400,000 98,464,701 165,752,730 123,400,000

Repayment of principal amount is not due as per stipulation.

7. Security Deposits (paid) include Rs. 15,812,089 recoverable from three parties, with whom the Company had entered into Memorandum of Understanding for taking multiplex/office space on rent. The Company is in discussions with the parties for the recovery of the aforesaid amount and is hopeful of recovering the same. Hence, no provision against the same has been considered necessary.

8. Since the warrant holder of 1,200,000 warrants have not exercised their option of subscribing to equity shares of the Company within the stipulated period (i.e. by March 17, 2009) the Company has forfeited the entire amount of upfront payment (i.e. Rs. 25,820,400) received against warrants and has transferred the same to Capital Reserve.

9. A sum of Rs. 44,204,329 is appearing as balance with excise authorities (shown in the Schedule of Loans and Advances) at year end, the accounts of which are subject to reconciliation. Necessary adjustments, if any, which in the opinion of the management will not be material, will be made as and when the accounts are finally reconciled.

10. i) The Company has investments of Rs. 200,000,000 in equity shares of C. R. Retail Malls (India) Private Limited. Further a sum of Rs. 231,925,000 is recoverable from C. R. Retail Malls (India) Private Limited in respect of loan granted to it by the Company. As per the latest audited financial statements of C. R. Retail Malls (India) Private Limited, it has accumulated losses of Rs. 12,456,281 which have resulted in erosion of a portion of its net worth.

ii) The Company has investments of Rs. 50,025,000 and Rs. 50,000,000 in the equity and preference share capital respectively, of Sunrise Infotainment Private Limited. Further a sum of Rs. 160,400,000 is recoverable from Sunrise Infotainment Private Limited in respect of loan granted to it by the Company. As per the latest audited financial statements of Sunrise Infotainment Private Limited, it has accumulated losses of Rs. 24,829,071 which have resulted in erosion of a portion of its net worth.

iii) The Company has investments of Rs. 58,650,000 in equity shares of PVR bluO Entertainment Limited. As per the latest audited financial statements of PVR bluO Entertainment Limited, it has accumulated losses of Rs. 3,627,163 which have resulted in erosion of a portion of its net worth.

These being long term investments and also in view of projected profitable operations of the above companies, management is of the view that the diminution in the value of these investments is temporary in nature and hence no provision is required to be made thereagainst.

Notes to the Accounts

Guar

ante

es G

iven

(Cor

pora

te G

uara

ntee

s)

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 62

,500,0

00

-

-

-

-

-

-

-

-

-

62,50

0,000

-

C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 72

,471,6

85

148,1

11,64

7 -

-

-

-

-

-

-

-

72

,471,6

85

148,1

11,64

7

Guar

ante

es Ta

ken

(Per

sona

l Gua

rant

ees)

Ajay B

ijli

-

-

-

-

*

*

-

-

-

-

*

*

Sanje

ev Ku

mar

-

-

-

-

*

*

-

-

-

-

*

*

Balan

ce o

utst

andi

ng at

the

end

of th

e ye

ar

Tr

ade

Rece

ivabl

e

PV

R bluO

Enter

tainm

ent L

imite

d 2,

988,8

88

-

-

-

-

-

-

-

-

-

2,98

8,888

-

Trad

e Pa

yabl

e

PV

R Pict

ures

Limite

d 33

,298,5

14

3,51

8,150

-

-

-

-

-

-

-

-

33

,298,5

14

3,51

8,150

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

71

4,878

1,

392,6

23

-

-

-

-

-

-

714,8

78

1,39

2,623

Secu

rity D

epos

its

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

2,

500,0

00

2,50

0,000

-

-

-

-

-

-

2,

500,0

00

2,50

0,000

Le

isure

World

Priva

te Lim

ited

-

-

-

-

-

-

-

-

2,

400,0

00

2,40

0,000

2,

400,0

00

2,40

0,000

Inte

r Cor

pora

te L

oans

Give

n

PV

R Pict

ures

Limite

d -

50

,000,0

00

-

-

-

-

-

-

-

-

-

50,00

0,000

CR

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

231,9

25,00

0 10

0,000

,000

-

-

-

-

-

-

-

-

231,9

25,00

0 10

0,000

,000

Sunr

ise In

fotain

ment

Priva

te Lim

ited

160,4

00,00

0 98

,400,0

00

-

-

-

-

-

-

-

-

160,4

00,00

0 98

,400,0

00

Inte

rest

Rec

eivab

le

C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d -

8,

329,1

67

-

-

-

-

-

-

-

-

-

8,32

9,167

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d -

1,

035,3

70

-

-

-

-

-

-

-

-

-

1,03

5,370

Adva

nce

Rece

ivabl

e in

Cas

h or

Kin

d

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

-

205,0

20

-

-

-

-

-

-

-

-

-

205,0

20

Sunr

ise In

fotain

ment

Priva

te Lim

ited

-

51,01

6 -

-

-

-

-

-

-

-

-

51

,016

Adva

nce

Rece

ived

again

st S

hare

s War

rant

s

Priya

Exhib

itors

Priva

te Lim

ited

-

-

-

25,82

0,400

-

-

-

-

-

-

-

25

,820,4

00

Inve

stm

ent i

n Eq

uity

Sha

re C

apita

l

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

200,0

00,00

0 20

0,000

,000

-

-

-

-

-

-

-

-

200,0

00,00

0 20

0,000

,000

PVR P

ictur

es Lim

ited

215,0

00,00

0 21

5,000

,000

-

-

-

-

-

-

-

-

215,0

00,00

0 21

5,000

,000

PVR b

luO En

terta

inmen

t Lim

ited

58,65

0,000

-

-

-

-

-

-

-

-

-

58

,650,0

00

-

Sunr

ise In

fotain

ment

Priva

te Lim

ited

50,02

5,000

50

,025,0

00

-

-

-

-

-

-

-

-

50,02

5,000

50

,025,0

00

Inve

stm

ent i

n Pr

efer

ence

Sha

re C

apita

l

Sunr

ise In

fotain

ment

Priva

te Lim

ited

50,00

0,000

50

,000,0

00

-

-

-

-

-

-

-

-

50,00

0,000

50

,000,0

00

Amou

nt re

ceive

d on

beh

alf o

f

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

637,4

10

-

-

-

-

-

-

-

-

-

637,4

10

-

PVR b

luO En

terta

inmen

t Lim

ited

1,25

6,344

-

-

-

-

-

-

-

-

-

1,

256,3

44

-

Sunr

ise In

fotain

ment

Priva

te Lim

ited

8,33

4,095

-

-

-

-

-

-

-

-

-

8,

334,0

95

-

Guar

ante

es G

iven

(Cor

pora

te G

uara

ntee

s)

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 62

,500,0

00

-

-

-

-

-

-

-

-

-

62,50

0,000

-

C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 47

0,583

,332

398,1

11,64

7 -

-

-

-

-

-

-

-

47

0,583

,332

398,1

11,64

7

Guar

ante

es Ta

ken

(Per

sona

l Gua

rant

ees)

Ajay B

ijli

-

-

-

-

*

*

-

-

-

-

*

*

Sanje

ev Ku

mar

-

-

-

-

*

*

-

-

-

-

*

*

Asset

s Mor

tgag

ed

Aja

y Bijli

-

-

-

-

*

*

-

-

-

-

*

*

Sa

njeev

Kuma

r -

-

-

-

*

*

-

-

-

-

*

*

4. R

elat

ed P

arty

Dis

clos

ure

Su

bsidi

ary C

ompa

nies

Enter

prise

s hav

ing

Key M

anag

emen

t Pers

onne

l Re

lative

s of K

ey

Enter

prise

s own

ed or

sign

ifica

ntly

Gran

d Tota

l

sig

nifica

nt in

fluen

ce

Ma

nage

ment

Perso

nnel

influe

nced

by ke

y man

agem

ent

over

the C

ompa

ny

perso

nnel

or th

eir re

lative

s

31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8

80 82

NOTES:

a) * The Company has availed loans from banks, a body corporate and Small Industries Development Bank of India (SIDBI) aggregating to Rs. 706,746,872 (Previous year Rs. 609,837,346) which are further secured by personal guarantee of two directors of the Company. Term Loan from Punjab National Bank is further secured by second charge on all the movable and immovable assets namely current and movable fixed assets of PVR Phoenix, Mumbai of a subsidiary company. Loan from SIDBI is further secured by first charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi.

b) The above particulars exclude expenses reimbursed to/by related parties.

c) No amount has been provided as doubtful debt or advance/written off or written back in the year in respect of debts due from/to above related parties, except as disclosed above.

5. The Board of Directors of the Company approved the merger of Sunrise Infotainment Private Limited, its subsidiary company in the meeting held on October 24, 2008. Pursuant to this approval, the Company has on January 29, 2009, filed with Honorable High Court at New Delhi, a scheme of amalgamation entailing merger of the subsidiary company with the Company. As per the said scheme, with effect from the Appointed Date i.e. April 01, 2008, the undertaking of the subsidiary company, pursuant to the provisions contained in Sections 391 to 394 and other applicable provisions of the Companies Act 1956, shall stand transferred to and vested in the Company on a going concern basis without any further act, deed or matter. However, the Amalgamation shall be effective from the date of filing of the certified copy of the Order of the Honorable Delhi High Court with Registrar of Companies NCT of Delhi & Haryana. Pending the approval of the said High Court, the effect of the amalgamation has not been given.

6. The following are the details of loans and advances by the Company, outstanding at the end of the year in terms of Securities & Exchange Board of India’s circular dated January 10, 2003:

Outstanding amount as at Maximum amount outstanding during the year March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 Rs. Rs. Rs. Rs.

Loans and Advances to Subsidiaries(including accrued interest) - C.R. Retail Malls (India) Private Limited 231,925,000 107,447,279 238,545,767 107,447,279- PVR Pictures Limited - 50,000,000 95,000,000 226,600,000- Sunrise Infotainment Private Limited 160,400,000 98,464,701 165,752,730 123,400,000

Repayment of principal amount is not due as per stipulation.

7. Security Deposits (paid) include Rs. 15,812,089 recoverable from three parties, with whom the Company had entered into Memorandum of Understanding for taking multiplex/office space on rent. The Company is in discussions with the parties for the recovery of the aforesaid amount and is hopeful of recovering the same. Hence, no provision against the same has been considered necessary.

8. Since the warrant holder of 1,200,000 warrants have not exercised their option of subscribing to equity shares of the Company within the stipulated period (i.e. by March 17, 2009) the Company has forfeited the entire amount of upfront payment (i.e. Rs. 25,820,400) received against warrants and has transferred the same to Capital Reserve.

9. A sum of Rs. 44,204,329 is appearing as balance with excise authorities (shown in the Schedule of Loans and Advances) at year end, the accounts of which are subject to reconciliation. Necessary adjustments, if any, which in the opinion of the management will not be material, will be made as and when the accounts are finally reconciled.

10. i) The Company has investments of Rs. 200,000,000 in equity shares of C. R. Retail Malls (India) Private Limited. Further a sum of Rs. 231,925,000 is recoverable from C. R. Retail Malls (India) Private Limited in respect of loan granted to it by the Company. As per the latest audited financial statements of C. R. Retail Malls (India) Private Limited, it has accumulated losses of Rs. 12,456,281 which have resulted in erosion of a portion of its net worth.

ii) The Company has investments of Rs. 50,025,000 and Rs. 50,000,000 in the equity and preference share capital respectively, of Sunrise Infotainment Private Limited. Further a sum of Rs. 160,400,000 is recoverable from Sunrise Infotainment Private Limited in respect of loan granted to it by the Company. As per the latest audited financial statements of Sunrise Infotainment Private Limited, it has accumulated losses of Rs. 24,829,071 which have resulted in erosion of a portion of its net worth.

iii) The Company has investments of Rs. 58,650,000 in equity shares of PVR bluO Entertainment Limited. As per the latest audited financial statements of PVR bluO Entertainment Limited, it has accumulated losses of Rs. 3,627,163 which have resulted in erosion of a portion of its net worth.

These being long term investments and also in view of projected profitable operations of the above companies, management is of the view that the diminution in the value of these investments is temporary in nature and hence no provision is required to be made thereagainst.

Notes to the Accounts

Guar

ante

es G

iven

(Cor

pora

te G

uara

ntee

s)

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 62

,500,0

00

-

-

-

-

-

-

-

-

-

62,50

0,000

-

C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 72

,471,6

85

148,1

11,64

7 -

-

-

-

-

-

-

-

72

,471,6

85

148,1

11,64

7

Guar

ante

es Ta

ken

(Per

sona

l Gua

rant

ees)

Ajay B

ijli

-

-

-

-

*

*

-

-

-

-

*

*

Sanje

ev Ku

mar

-

-

-

-

*

*

-

-

-

-

*

*

Balan

ce o

utst

andi

ng at

the

end

of th

e ye

ar

Tr

ade

Rece

ivabl

e

PV

R bluO

Enter

tainm

ent L

imite

d 2,

988,8

88

-

-

-

-

-

-

-

-

-

2,98

8,888

-

Trad

e Pa

yabl

e

PV

R Pict

ures

Limite

d 33

,298,5

14

3,51

8,150

-

-

-

-

-

-

-

-

33

,298,5

14

3,51

8,150

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

71

4,878

1,

392,6

23

-

-

-

-

-

-

714,8

78

1,39

2,623

Secu

rity D

epos

its

Pr

iya Ex

hibito

rs Pr

ivate

Limite

d -

-

2,

500,0

00

2,50

0,000

-

-

-

-

-

-

2,

500,0

00

2,50

0,000

Le

isure

World

Priva

te Lim

ited

-

-

-

-

-

-

-

-

2,

400,0

00

2,40

0,000

2,

400,0

00

2,40

0,000

Inte

r Cor

pora

te L

oans

Give

n

PV

R Pict

ures

Limite

d -

50

,000,0

00

-

-

-

-

-

-

-

-

-

50,00

0,000

CR

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

231,9

25,00

0 10

0,000

,000

-

-

-

-

-

-

-

-

231,9

25,00

0 10

0,000

,000

Sunr

ise In

fotain

ment

Priva

te Lim

ited

160,4

00,00

0 98

,400,0

00

-

-

-

-

-

-

-

-

160,4

00,00

0 98

,400,0

00

Inte

rest

Rec

eivab

le

C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d -

8,

329,1

67

-

-

-

-

-

-

-

-

-

8,32

9,167

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d -

1,

035,3

70

-

-

-

-

-

-

-

-

-

1,03

5,370

Adva

nce

Rece

ivabl

e in

Cas

h or

Kin

d

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

-

205,0

20

-

-

-

-

-

-

-

-

-

205,0

20

Sunr

ise In

fotain

ment

Priva

te Lim

ited

-

51,01

6 -

-

-

-

-

-

-

-

-

51

,016

Adva

nce

Rece

ived

again

st S

hare

s War

rant

s

Priya

Exhib

itors

Priva

te Lim

ited

-

-

-

25,82

0,400

-

-

-

-

-

-

-

25

,820,4

00

Inve

stm

ent i

n Eq

uity

Sha

re C

apita

l

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

200,0

00,00

0 20

0,000

,000

-

-

-

-

-

-

-

-

200,0

00,00

0 20

0,000

,000

PVR P

ictur

es Lim

ited

215,0

00,00

0 21

5,000

,000

-

-

-

-

-

-

-

-

215,0

00,00

0 21

5,000

,000

PVR b

luO En

terta

inmen

t Lim

ited

58,65

0,000

-

-

-

-

-

-

-

-

-

58

,650,0

00

-

Sunr

ise In

fotain

ment

Priva

te Lim

ited

50,02

5,000

50

,025,0

00

-

-

-

-

-

-

-

-

50,02

5,000

50

,025,0

00

Inve

stm

ent i

n Pr

efer

ence

Sha

re C

apita

l

Sunr

ise In

fotain

ment

Priva

te Lim

ited

50,00

0,000

50

,000,0

00

-

-

-

-

-

-

-

-

50,00

0,000

50

,000,0

00

Amou

nt re

ceive

d on

beh

alf o

f

C. R.

Reta

il Mall

s (In

dia) P

rivat

e Lim

ited

637,4

10

-

-

-

-

-

-

-

-

-

637,4

10

-

PVR b

luO En

terta

inmen

t Lim

ited

1,25

6,344

-

-

-

-

-

-

-

-

-

1,

256,3

44

-

Sunr

ise In

fotain

ment

Priva

te Lim

ited

8,33

4,095

-

-

-

-

-

-

-

-

-

8,

334,0

95

-

Guar

ante

es G

iven

(Cor

pora

te G

uara

ntee

s)

Su

nrise

Infot

ainme

nt Pr

ivate

Limite

d 62

,500,0

00

-

-

-

-

-

-

-

-

-

62,50

0,000

-

C.

R. Re

tail M

alls (

India

) Priv

ate L

imite

d 47

0,583

,332

398,1

11,64

7 -

-

-

-

-

-

-

-

47

0,583

,332

398,1

11,64

7

Guar

ante

es Ta

ken

(Per

sona

l Gua

rant

ees)

Ajay B

ijli

-

-

-

-

*

*

-

-

-

-

*

*

Sanje

ev Ku

mar

-

-

-

-

*

*

-

-

-

-

*

*

Asset

s Mor

tgag

ed

Aja

y Bijli

-

-

-

-

*

*

-

-

-

-

*

*

Sa

njeev

Kuma

r -

-

-

-

*

*

-

-

-

-

*

*

4. R

elat

ed P

arty

Dis

clos

ure

Su

bsidi

ary C

ompa

nies

Enter

prise

s hav

ing

Key M

anag

emen

t Pers

onne

l Re

lative

s of K

ey

Enter

prise

s own

ed or

sign

ifica

ntly

Gran

d Tota

l

sig

nifica

nt in

fluen

ce

Ma

nage

ment

Perso

nnel

influe

nced

by ke

y man

agem

ent

over

the C

ompa

ny

perso

nnel

or th

eir re

lative

s

31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8 31

-Mar

-09

31-M

ar-0

8

80 81

14. The asset of Rs. 9,300,000 (Previous year Rs. Nil) recognised by the Company as ‘MAT Credit Entitlement Account’ under ‘Loans and Advances’ represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

15. Derivative Instruments and unhedged Foreign Currency Exposure :

Particulars of Unhedged foreign currency exposure as at the Balance Sheet date

Amount in foreign currency

Particulars Currency March 31, 2009 March 31, 2008

Capital Advances USD - 687,798 EURO - 11,730

Cash in Hand Bangkok Bhat 3,100 10,650 Hongkong Dollar 130 130 Sterling pound 50 50 Singapore Dollar 100 100 US Dollar 8,731 -

16. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Particulars March 31, 2009 March 31, 2008 (Rs.) (Rs.)

The principal amount and the interest due thereonremaining unpaid to any supplier as at the end of each accounting year - -

- Principal amount - -

- Interest amount - -

The amount of interest paid by the buyer in terms of Section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year - -

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006. - -

The amount of interest accrued and remaining unpaid at the end of each accounting year; and - -

The amount of further interest remaining due andpayable even in the succeeding years, until such datewhen the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006. - -

11.1 During the year ended March 31, 2006, the Company had successfully completed its public issue. This comprised of 5,700,000 equity shares of Rs. 10 each at a premium of Rs. 215 per share. Alongwith this public issue, there was also a sale of 2,000,000 equity shares by a shareholder of the Company i.e. Western India Trustee and Executor Company Limited (India Advantage Fund-I).

11.2 Utilization of IPO funds: Amount in Rs.

As per Prospectus Total Estimated Amount spent tillObjects Project Cost March 31, 2009

Setting up of New Cinemas 1,380,000,000 1,106,175,259

Equity Investment/ Unsecured Loan in C. R. Retail, a wholly owned subsidiary for setting up a Multiplex (Refer note iii below) 300,000,000 406,425,000

Equity Investment/ Unsecured Loan in PVR Pictures Ltd, a wholly owned subsidiary for Film Distribution/Production Business 270,000,000 200,000,000

Equity Investment/ Unsecured Loan in Sunrise Infotainment Private Ltd, a wholly owned subsidiary for Setting up a multiplex (Refer note iii below) - 248,425,000

General Corporate Expenses (Refer note i below) 62,000,000 71,833,661

Issue Expenses (Refer note i below) 120,000,000 110,166,339

Total 2,132,000,000 2,143,025,259

Amount limited to the extent of purpose stated upto December 15, 2008 2,132,000,000 2,132,000,000

NOTES:

i) The Board of Directors of the Company have approved the inter-se re-allocation of unspent monies amounting to Rs. 9,833,661 from issue expenses to general corporate expenses.

ii) *** includes Rs. 1,282,500,000 raised through public issue of equity shares.iii) The Board of Directors of the Company, in accordance with the rights given in the prospectus has in its meeting held on

November 18, 2008 ratified the funding of the projects with respect to Sunrise Infotainment Private Limited and C. R. Retail Malls (India) Private Limited, wholly owned subsidiaries of the Company as per the details given above, out of the IPO proceeds.

12. Pursuant to the clarification by Central Board of Excise and Customs (CBEC) vide Circular No. File No. 137/72/2008-CX.4 dated November 21, 2008, that the accumulated CENVAT/Service Tax Credit upto March 31, 2008 can be utilized by the Company for payment of output service tax without any restriction of time limit. The Company has recognised such CENVAT/Service Tax credit amounting to Rs. 26,846,361 by crediting to the accounts of rent expenses by Rs. 20,692,168 and income from revenue sharing by Rs. 6,154,193.

13. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the Scheme of the respective state governments. In the assessment orders for the Assessment Year 2006-07, the Company’s contention that the amount of entertainment tax is a capital receipt, has been accepted during the year. Accordingly, treating the amount of entertainment tax exemption amounts as a capital receipt in respect of multiplexes in those states covered by the above orders, the Company has re-computed its current income tax liability and deferred tax liability for the years ended March 31, 2006, 2007 and 2008. Provision for tax for the current year’s income tax and deferred tax has also been made on the same basis. As a result of above change, the current income tax charge is lower by Rs. 123,504,839 (including reversal of current income tax provision for earlier years aggregating to Rs. 80,558,256) and deferred tax charge is higher by Rs. 123,504,839 (including deferred tax charge for earlier years aggregating to Rs. 80,558,256).

Notes to the Accounts

***

Notes to the Accounts

82 83

14. The asset of Rs. 9,300,000 (Previous year Rs. Nil) recognised by the Company as ‘MAT Credit Entitlement Account’ under ‘Loans and Advances’ represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

15. Derivative Instruments and unhedged Foreign Currency Exposure :

Particulars of Unhedged foreign currency exposure as at the Balance Sheet date

Amount in foreign currency

Particulars Currency March 31, 2009 March 31, 2008

Capital Advances USD - 687,798 EURO - 11,730

Cash in Hand Bangkok Bhat 3,100 10,650 Hongkong Dollar 130 130 Sterling pound 50 50 Singapore Dollar 100 100 US Dollar 8,731 -

16. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Particulars March 31, 2009 March 31, 2008 (Rs.) (Rs.)

The principal amount and the interest due thereonremaining unpaid to any supplier as at the end of each accounting year - -

- Principal amount - -

- Interest amount - -

The amount of interest paid by the buyer in terms of Section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year - -

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006. - -

The amount of interest accrued and remaining unpaid at the end of each accounting year; and - -

The amount of further interest remaining due andpayable even in the succeeding years, until such datewhen the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006. - -

11.1 During the year ended March 31, 2006, the Company had successfully completed its public issue. This comprised of 5,700,000 equity shares of Rs. 10 each at a premium of Rs. 215 per share. Alongwith this public issue, there was also a sale of 2,000,000 equity shares by a shareholder of the Company i.e. Western India Trustee and Executor Company Limited (India Advantage Fund-I).

11.2 Utilization of IPO funds: Amount in Rs.

As per Prospectus Total Estimated Amount spent tillObjects Project Cost March 31, 2009

Setting up of New Cinemas 1,380,000,000 1,106,175,259

Equity Investment/ Unsecured Loan in C. R. Retail, a wholly owned subsidiary for setting up a Multiplex (Refer note iii below) 300,000,000 406,425,000

Equity Investment/ Unsecured Loan in PVR Pictures Ltd, a wholly owned subsidiary for Film Distribution/Production Business 270,000,000 200,000,000

Equity Investment/ Unsecured Loan in Sunrise Infotainment Private Ltd, a wholly owned subsidiary for Setting up a multiplex (Refer note iii below) - 248,425,000

General Corporate Expenses (Refer note i below) 62,000,000 71,833,661

Issue Expenses (Refer note i below) 120,000,000 110,166,339

Total 2,132,000,000 2,143,025,259

Amount limited to the extent of purpose stated upto December 15, 2008 2,132,000,000 2,132,000,000

NOTES:

i) The Board of Directors of the Company have approved the inter-se re-allocation of unspent monies amounting to Rs. 9,833,661 from issue expenses to general corporate expenses.

ii) *** includes Rs. 1,282,500,000 raised through public issue of equity shares.iii) The Board of Directors of the Company, in accordance with the rights given in the prospectus has in its meeting held on

November 18, 2008 ratified the funding of the projects with respect to Sunrise Infotainment Private Limited and C. R. Retail Malls (India) Private Limited, wholly owned subsidiaries of the Company as per the details given above, out of the IPO proceeds.

12. Pursuant to the clarification by Central Board of Excise and Customs (CBEC) vide Circular No. File No. 137/72/2008-CX.4 dated November 21, 2008, that the accumulated CENVAT/Service Tax Credit upto March 31, 2008 can be utilized by the Company for payment of output service tax without any restriction of time limit. The Company has recognised such CENVAT/Service Tax credit amounting to Rs. 26,846,361 by crediting to the accounts of rent expenses by Rs. 20,692,168 and income from revenue sharing by Rs. 6,154,193.

13. The Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the Scheme of the respective state governments. In the assessment orders for the Assessment Year 2006-07, the Company’s contention that the amount of entertainment tax is a capital receipt, has been accepted during the year. Accordingly, treating the amount of entertainment tax exemption amounts as a capital receipt in respect of multiplexes in those states covered by the above orders, the Company has re-computed its current income tax liability and deferred tax liability for the years ended March 31, 2006, 2007 and 2008. Provision for tax for the current year’s income tax and deferred tax has also been made on the same basis. As a result of above change, the current income tax charge is lower by Rs. 123,504,839 (including reversal of current income tax provision for earlier years aggregating to Rs. 80,558,256) and deferred tax charge is higher by Rs. 123,504,839 (including deferred tax charge for earlier years aggregating to Rs. 80,558,256).

Notes to the Accounts

***

Notes to the Accounts

82 83

17. Gratuity Plan The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity

on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity plan.

Profit and Loss Account

(Amount in Rs.)

Net employee benefit expense (recognized in Employee Cost) 2008-09 2007-08

Current service cost 3,722,017 1,898,733Interest cost on benefit obligation 800,245 691,088Expected return on plan assets (610,088) (380,249)Add: Actual amount payable to pending full and final settlements - 1,869,231Net actuarial loss recognised in the year 1,359,901 693,779Net benefit expense 5,272,075 4,772,582Actual return on plan assets (732,222) (828,777)

Balance sheetDetails of Provision for gratuity are as follows:

2008-09 2007-08 2006-07

Defined benefit obligation 16,531,926 12,907,090 8,917,260

Fair value of plan assets (11,259,851) (8,134,508) 5,069,993

Plan asset/(liability) (5,272,075) (4,772,582) (3,847,267)

Changes in the present value of the defined benefit obligation are as follows:

2008-09 2007-08

Opening defined benefit obligation 12,907,090 8,917,260

Interest cost 800,245 691,088

Current service cost 3,722,017 1,898,733

Benefits paid (2,379,461) (1,611,529)

Actuarial losses on obligation 1,482,035 1,142,307

Add: Actual amount of gratuity payable to pending full and final settlements - 1,869,231

Closing defined benefit obligation 16,531,926 12,907,090

Changes in the fair value of plan assets are as follows:

2008-09 2007-08

Opening fair value of plan assets 8,134,508 5,069,993

Expected return 610,088 380,249

Contributions by employer 4,772,582 3,847,267

Benefits paid (2,379,461) (1,611,529)

Acturial Gain/(losses) 122,134 448,528

Closing fair value of plan assets 11,259,851 8,134,508

The Company expects to contribute Rs. 5,272,075 to gratuity fund in the year 2009-10.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

2008-09 2007-08

% %

Investments with insurer 97.14 92.79

Bank balances with the insurer 2.86 7.21

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below:

2008-09 2007-08

% %

Discount rate 7.25 7.75

Expected rate of return on plan assets 7.50 7.50

Increase in compensation cost 5.00 5.50

Employee turnover

upto 30 years 25 25

Above 30 years but upto 44 years 15 15

Above 44 years 10 10

a) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

b) Information relating to experience adjustment in the actual valuation of gratuity as required by Para 120 (n)(ii) of the Accounting Standard 15 (Revised) on Employee Benefits is not available with the Company.

c) The current year being only the third year of adoption of AS-15 (Revised) by the Company, disclosure as required by Para 120(n) of Accounting Standard 15 (revised) have been furnished only for the previous two years and not for the two years prior to that.

Defined Contribution Plan:

Contribution to Provident Fund 2008-09 2007-08

Charged to Profit and Loss Account 17,284,134 13,469,354

Charged to Pre-operative expenses 624,620 790,280

18. Employee Stock Option Plans: The Company has provided stock option scheme to its employees or fair value method. The fair value has been determined based

on the market price of the equity share listed on the Stock Exchange i.e. Rs. 88. During the year ended March 31, 2009, the following scheme is in operation:

PVR ESOS 2008

Date of grant January 30, 2009

Date of Shareholder’s approval January 5, 2009

Date of Board Approval January 30, 2009

Number of options granted 500,000

Method of Settlement (Cash/Equity) Cash

Vesting Period Not less than one year and not more than ten years from the date of grant of options

Exercise Period Within a period of two years from the date of vesting

Vesting Conditions Subject to continued employment with the Company. Further, Compensation Committee may also specify certain performance parameters subject to which options would vest.

Notes to the Accounts Notes to the Accounts

84 85

17. Gratuity Plan The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity

on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity plan.

Profit and Loss Account

(Amount in Rs.)

Net employee benefit expense (recognized in Employee Cost) 2008-09 2007-08

Current service cost 3,722,017 1,898,733Interest cost on benefit obligation 800,245 691,088Expected return on plan assets (610,088) (380,249)Add: Actual amount payable to pending full and final settlements - 1,869,231Net actuarial loss recognised in the year 1,359,901 693,779Net benefit expense 5,272,075 4,772,582Actual return on plan assets (732,222) (828,777)

Balance sheetDetails of Provision for gratuity are as follows:

2008-09 2007-08 2006-07

Defined benefit obligation 16,531,926 12,907,090 8,917,260

Fair value of plan assets (11,259,851) (8,134,508) 5,069,993

Plan asset/(liability) (5,272,075) (4,772,582) (3,847,267)

Changes in the present value of the defined benefit obligation are as follows:

2008-09 2007-08

Opening defined benefit obligation 12,907,090 8,917,260

Interest cost 800,245 691,088

Current service cost 3,722,017 1,898,733

Benefits paid (2,379,461) (1,611,529)

Actuarial losses on obligation 1,482,035 1,142,307

Add: Actual amount of gratuity payable to pending full and final settlements - 1,869,231

Closing defined benefit obligation 16,531,926 12,907,090

Changes in the fair value of plan assets are as follows:

2008-09 2007-08

Opening fair value of plan assets 8,134,508 5,069,993

Expected return 610,088 380,249

Contributions by employer 4,772,582 3,847,267

Benefits paid (2,379,461) (1,611,529)

Acturial Gain/(losses) 122,134 448,528

Closing fair value of plan assets 11,259,851 8,134,508

The Company expects to contribute Rs. 5,272,075 to gratuity fund in the year 2009-10.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

2008-09 2007-08

% %

Investments with insurer 97.14 92.79

Bank balances with the insurer 2.86 7.21

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below:

2008-09 2007-08

% %

Discount rate 7.25 7.75

Expected rate of return on plan assets 7.50 7.50

Increase in compensation cost 5.00 5.50

Employee turnover

upto 30 years 25 25

Above 30 years but upto 44 years 15 15

Above 44 years 10 10

a) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

b) Information relating to experience adjustment in the actual valuation of gratuity as required by Para 120 (n)(ii) of the Accounting Standard 15 (Revised) on Employee Benefits is not available with the Company.

c) The current year being only the third year of adoption of AS-15 (Revised) by the Company, disclosure as required by Para 120(n) of Accounting Standard 15 (revised) have been furnished only for the previous two years and not for the two years prior to that.

Defined Contribution Plan:

Contribution to Provident Fund 2008-09 2007-08

Charged to Profit and Loss Account 17,284,134 13,469,354

Charged to Pre-operative expenses 624,620 790,280

18. Employee Stock Option Plans: The Company has provided stock option scheme to its employees or fair value method. The fair value has been determined based

on the market price of the equity share listed on the Stock Exchange i.e. Rs. 88. During the year ended March 31, 2009, the following scheme is in operation:

PVR ESOS 2008

Date of grant January 30, 2009

Date of Shareholder’s approval January 5, 2009

Date of Board Approval January 30, 2009

Number of options granted 500,000

Method of Settlement (Cash/Equity) Cash

Vesting Period Not less than one year and not more than ten years from the date of grant of options

Exercise Period Within a period of two years from the date of vesting

Vesting Conditions Subject to continued employment with the Company. Further, Compensation Committee may also specify certain performance parameters subject to which options would vest.

Notes to the Accounts Notes to the Accounts

84 85

The details of activity under PVR ESOS 2008 have been summarized below:

Year ended March 31, 2009

Number of options

Outstanding at the beginning of the year -

Granted during the year 500,000

Forfeited during the year -

Exercised during the year -

Expired during the year -

Outstanding at the end of the year 500,000

Exercisable at the end of the year -

Weighted average fair value of options granted on the date of grant 37.10

The options have not yet been vested by the company, or a result the average remaining contractual life of the option is not determinable as on March 31, 2009 as mentioned above the, the option have been granted on market price of Rs. 88 and options have not been vested upto March 31, 2009 as a result, there is no expense to be recorded in the financial statements.

19. Leases

i) Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss Account and Pre-Operative Expenditure (pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

a) The Company has taken various cinemas, multiplexes, offices and godown premises under operating lease agreements. These are generally renewable at the option of the Company. The management of the Company based on valuation done by independent valuation experts, has allocated rent into two parts i.e. rent paid for use of land and building separately. The impact of straight lining of lease rent as required by the Accounting Standard 19 on Leases, for use of building does not have material impact on profit for the current year. As a result of this computation, a sum of Rs. 15,608,885 provided till last year has been reversed to rent expense during the year.

Disclosure for properties under non cancellable leases, where the Company is carrying commercial operations is as under:

For the year ended For the year ended March 31, 2009 March 31, 2008

(Amount in Rs.) (Amount in Rs.)

Lease payments for the year recognized in Profit and Loss Account 388,716,941 322,147,267Lease payments for the year recognized in Preoperative Expenditure 11,614,018 5,847,892Minimum Lease Payments : Not Later than one year 292,392,068 214,290,645Later than one year but not later than five years 894,611,505 643,584,668Later than five years 212,897,118 218,254,847

ii) Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the Profit and Loss Account and netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

a) The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

For the year ended For the year ended March 31, 2009 March 31, 2008

(Amount in Rs.) (Amount in Rs.)

Lease rent receipts for the year recognized in Profit and Loss Account 67,331,981 36,552,288Lease rent receipts for the year recognized in Preoperative Expenditure 3,320,141 -Minimum Lease Rent Receipts : Not Later than one year - 12,392,093Later than one year but not later than five years - -Later than five years - -

b) The Company has given spaces of cinemas/food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The Company has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

March 31, 2009 March 31, 2008 (Rs.) (Rs.)

20. Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances) 27,726,702 76,657,291

21. Contingent Liabilities (not provided for) in respect of: a) Labour cases pending* Amount not Amount not ascertainable ascertainable b) Claims against the Company not acknowledged as debts (including Rs.3,578,441, Previous year Rs. 3,128,441 paid under protest which is appearing in the Schedule of Loans and Advances)** 3,578,441 3,128,441

c) Corporate guarantee given against the loan of Rs. 500,000,000 sanctioned by a financial to the subsidiary, to the extent of loan drawn. 470,583,332 398,111,647

d) Counter Guarantee given to a bank for the bank guarantee furnished to office of the Additional Collector, Mumbai Subarban district, (Entertainment Tax Authority) by a subsidiary. 62,500,000 -

e) Show cause notices raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on invoices and excess utilisation of Cenvat credit (the Company has paid an amount of Rs. 1,080,361 which is appearing in the Schedule of Loans and Advances).** 20,252,588 -

f) Appeal filed by the Company with Commissioner of Income Tax (Appeals) against relief claimed in appeal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2006. The said amount has already been paid and is appearing in the Schedule of Loans and Advances** 3,672,879 -

g) The Honorable High Court of Delhi, vide judgment dated April 18, 2009 in the case of Home Solution Retail India Limited and others Vs Union of India, has held that renting of immovable property by itself is not a service and accordingly the levy of service tax on activity of renting immovable property is “ultra vires” the Finance Act, 1994. In view of this judgement, the service tax on renting of immovable property to the extent amount not paid to the landlords has not been provided during the year.** 33,553,220 -

* In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case.** Based on the discussions with the solicitors/meeting the terms and conditions by the Company, the management believes that the

Company has a strong chance of success in the cases and hence no provision there against is considered necessary.

22. Supplementary Statutory Information

22.1 Managerial Remuneration Chairman cum Managing Directors’ Remuneration*

Salary 11,507,097 8,460,000Contribution to Provident fund 1,380,852 1,015,200Perquisites 6,832,000 5,004,000

Total 19,719,949 14,479,200

Joint Managing Director’s Remuneration*

Salary 5,753,548 4,275,000Contribution to Provident fund 690,426 513,000Perquisites 3,432,000 2,565,000

Total** 9,875,974 7,353,000

* excluding contribution/provision for gratuity and leave encashment being the figures which are actually determined for the Company as a whole and therefore are not separately available.

** including Rs. 4,937,987 (Previous year Rs. 3,676,500) charged to pre-operative expenses.

Notes to the Accounts Notes to the Accounts

86 87

The details of activity under PVR ESOS 2008 have been summarized below:

Year ended March 31, 2009

Number of options

Outstanding at the beginning of the year -

Granted during the year 500,000

Forfeited during the year -

Exercised during the year -

Expired during the year -

Outstanding at the end of the year 500,000

Exercisable at the end of the year -

Weighted average fair value of options granted on the date of grant 37.10

The options have not yet been vested by the company, or a result the average remaining contractual life of the option is not determinable as on March 31, 2009 as mentioned above the, the option have been granted on market price of Rs. 88 and options have not been vested upto March 31, 2009 as a result, there is no expense to be recorded in the financial statements.

19. Leases

i) Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss Account and Pre-Operative Expenditure (pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

a) The Company has taken various cinemas, multiplexes, offices and godown premises under operating lease agreements. These are generally renewable at the option of the Company. The management of the Company based on valuation done by independent valuation experts, has allocated rent into two parts i.e. rent paid for use of land and building separately. The impact of straight lining of lease rent as required by the Accounting Standard 19 on Leases, for use of building does not have material impact on profit for the current year. As a result of this computation, a sum of Rs. 15,608,885 provided till last year has been reversed to rent expense during the year.

Disclosure for properties under non cancellable leases, where the Company is carrying commercial operations is as under:

For the year ended For the year ended March 31, 2009 March 31, 2008

(Amount in Rs.) (Amount in Rs.)

Lease payments for the year recognized in Profit and Loss Account 388,716,941 322,147,267Lease payments for the year recognized in Preoperative Expenditure 11,614,018 5,847,892Minimum Lease Payments : Not Later than one year 292,392,068 214,290,645Later than one year but not later than five years 894,611,505 643,584,668Later than five years 212,897,118 218,254,847

ii) Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the Profit and Loss Account and netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

a) The Company has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

For the year ended For the year ended March 31, 2009 March 31, 2008

(Amount in Rs.) (Amount in Rs.)

Lease rent receipts for the year recognized in Profit and Loss Account 67,331,981 36,552,288Lease rent receipts for the year recognized in Preoperative Expenditure 3,320,141 -Minimum Lease Rent Receipts : Not Later than one year - 12,392,093Later than one year but not later than five years - -Later than five years - -

b) The Company has given spaces of cinemas/food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The Company has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

March 31, 2009 March 31, 2008 (Rs.) (Rs.)

20. Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances) 27,726,702 76,657,291

21. Contingent Liabilities (not provided for) in respect of: a) Labour cases pending* Amount not Amount not ascertainable ascertainable b) Claims against the Company not acknowledged as debts (including Rs.3,578,441, Previous year Rs. 3,128,441 paid under protest which is appearing in the Schedule of Loans and Advances)** 3,578,441 3,128,441

c) Corporate guarantee given against the loan of Rs. 500,000,000 sanctioned by a financial to the subsidiary, to the extent of loan drawn. 470,583,332 398,111,647

d) Counter Guarantee given to a bank for the bank guarantee furnished to office of the Additional Collector, Mumbai Subarban district, (Entertainment Tax Authority) by a subsidiary. 62,500,000 -

e) Show cause notices raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on invoices and excess utilisation of Cenvat credit (the Company has paid an amount of Rs. 1,080,361 which is appearing in the Schedule of Loans and Advances).** 20,252,588 -

f) Appeal filed by the Company with Commissioner of Income Tax (Appeals) against relief claimed in appeal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2006. The said amount has already been paid and is appearing in the Schedule of Loans and Advances** 3,672,879 -

g) The Honorable High Court of Delhi, vide judgment dated April 18, 2009 in the case of Home Solution Retail India Limited and others Vs Union of India, has held that renting of immovable property by itself is not a service and accordingly the levy of service tax on activity of renting immovable property is “ultra vires” the Finance Act, 1994. In view of this judgement, the service tax on renting of immovable property to the extent amount not paid to the landlords has not been provided during the year.** 33,553,220 -

* In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case.** Based on the discussions with the solicitors/meeting the terms and conditions by the Company, the management believes that the

Company has a strong chance of success in the cases and hence no provision there against is considered necessary.

22. Supplementary Statutory Information

22.1 Managerial Remuneration Chairman cum Managing Directors’ Remuneration*

Salary 11,507,097 8,460,000Contribution to Provident fund 1,380,852 1,015,200Perquisites 6,832,000 5,004,000

Total 19,719,949 14,479,200

Joint Managing Director’s Remuneration*

Salary 5,753,548 4,275,000Contribution to Provident fund 690,426 513,000Perquisites 3,432,000 2,565,000

Total** 9,875,974 7,353,000

* excluding contribution/provision for gratuity and leave encashment being the figures which are actually determined for the Company as a whole and therefore are not separately available.

** including Rs. 4,937,987 (Previous year Rs. 3,676,500) charged to pre-operative expenses.

Notes to the Accounts Notes to the Accounts

86 87

Computation of Net Profit in accordance with section 349 of the 2008-09 2007-08Companies Act, 1956 for calculation of remuneration payable to directors Profit Before Tax 198,395,164 318,713,480Add: Directors’ remuneration 24,657,936 18,155,700Loss on sale of fixed assets as per Section 349 of the Companies Act, 1956 13,797,816 2,278,058Loss on sale of Current Investments 6,398 20,489Directors’ sitting Fee 840,000 520,000Provision for doubtful debts and advances 1,145,146 1,273,309Net profit as per Section 349 of the Companies Act, 1956 238,842,460 340,961,036Remuneration permissible to Managing and Whole time directors at 10% of the net profits as calculated above 23,884,246 34,096,104

The aforesaid remuneration paid to the directors is in excess of limits prescribed under Section 349 of the Companies Act 1956 by Rs. 3,640,399. The said remuneration has been approved by the Remuneration Committee of the Board of Directors and Shareholders of the Company. The Company is in the process of filing an application with the Central Government for seeking approval for excess amount of remuneration paid to the directors.

22.2 The members of the Company in the Annual General Meeting held on September 30, 2008, accorded their approval under Section 314 of the Companies Act, 1956, for the continuation of availment of professional services of Mr. R.K. Sinha (a director of the Company) as an advisor (not in employment) to the Company. The Company has during the year paid Rs. 2,400,000 to him, which is appearing under Professional Charge in the Schedule 19. The Company has filed an application under Section 309(1)(b) of the Companies Act, 1956 before the Central Government for its opinion to confirm that Mr. R.K. Sinha is a professional director and possesses the requisite professional qualification. The opinion of the Central Government in the said matter is awaited.

22.3 Earnings in foreign currency (on accrual basis) March 31. 2009 March 31, 2008 (Rs.) (Rs.)

Income from Sale of Film Rights Nil 452,981

22.4 Expenditure in foreign currency (on accrual basis) Travelling 1,406,013 1,018,553

Professional fees (including expenses, net of income tax) 4,134,242 1,878,042Director Sitting Fees 84,429 NilAdvertisement Expense 1,117,249 Nil

Total 6,741,933 2,896,595

22.5 CIF Value of Imports Capital Goods 31,313,984 2,680,226 Software 550,000 285,645

Total 31,863,984 2,965,871

23. In view of the diverse nature of the food and beverages items (each being less than 10% in value of the total turnover of the Company) being sold by the Company, it is not practicable to give the quantitative details thereof. All items of food and beverages are indigenously procured.

24. Previous Year Comparative(a) The Company has during the year, started commercial operations at Ambience Mall, Ambience Food Court and

Chandigarh. Hence, current year’s figures are not strictly comparable with those of previous year.(b) Previous year’s figures have been re-grouped where necessary to conform to current year’s classification.

Signature to Schedule 1 to 22

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

Notes to the Accounts

88 89

PVR LIMITEDBalance Sheet Abstract And Company General Business Profi le

I. REGISTRATION DETAILS Regn No. : 67827 State Code 55 Balance Sheet date : 31.03.2009

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs.Thousands) Public Issue Right Issue NIL NIL Bonus Issue Private Placement NIL NIL

III. POSITION OF MOBLISATION AND DEVELOPMENT OF FUNDS(Amount in Rs. Thousands)

Total Liabilities Total Assets 3279697 3279697 Sources of Funds Paid-up Capital Reserves & Surplus 230139 1873251 Secured Loans Unsecured Loans 968057 0 Deferred Tax Liabilities 208250 Application of Funds Net Fixed Assets Investment 1889595 669912 Net Current Assets Misc Expenditure 720190 0 Accumulated Losses NIL

IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousand) Turnover Total Expenditure 2787071 2588676 Profit Before Tax Profit After tax + – 198395 126517 Earning per Shares in Rs. Dividend rate % 5.43 10

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY (As per Monetary Terms)

Item code No. : NIL Product Description : Display of Films, Sales of Food & Beverages and Advertisement Income

N. C. Gupta Nitin Sood Ajay Bijli Sanjeev Kumar(Company Secretary) (Chief Financial Officer) (Chairman cum Managing Director) (Joint Managing Director)

Place: Gurgaon Sanjay KhannaDate: May 29, 2009 (Director)

Computation of Net Profit in accordance with section 349 of the 2008-09 2007-08Companies Act, 1956 for calculation of remuneration payable to directors Profit Before Tax 198,395,164 318,713,480Add: Directors’ remuneration 24,657,936 18,155,700Loss on sale of fixed assets as per Section 349 of the Companies Act, 1956 13,797,816 2,278,058Loss on sale of Current Investments 6,398 20,489Directors’ sitting Fee 840,000 520,000Provision for doubtful debts and advances 1,145,146 1,273,309Net profit as per Section 349 of the Companies Act, 1956 238,842,460 340,961,036Remuneration permissible to Managing and Whole time directors at 10% of the net profits as calculated above 23,884,246 34,096,104

The aforesaid remuneration paid to the directors is in excess of limits prescribed under Section 349 of the Companies Act 1956 by Rs. 3,640,399. The said remuneration has been approved by the Remuneration Committee of the Board of Directors and Shareholders of the Company. The Company is in the process of filing an application with the Central Government for seeking approval for excess amount of remuneration paid to the directors.

22.2 The members of the Company in the Annual General Meeting held on September 30, 2008, accorded their approval under Section 314 of the Companies Act, 1956, for the continuation of availment of professional services of Mr. R.K. Sinha (a director of the Company) as an advisor (not in employment) to the Company. The Company has during the year paid Rs. 2,400,000 to him, which is appearing under Professional Charge in the Schedule 19. The Company has filed an application under Section 309(1)(b) of the Companies Act, 1956 before the Central Government for its opinion to confirm that Mr. R.K. Sinha is a professional director and possesses the requisite professional qualification. The opinion of the Central Government in the said matter is awaited.

22.3 Earnings in foreign currency (on accrual basis) March 31. 2009 March 31, 2008 (Rs.) (Rs.)

Income from Sale of Film Rights Nil 452,981

22.4 Expenditure in foreign currency (on accrual basis) Travelling 1,406,013 1,018,553

Professional fees (including expenses, net of income tax) 4,134,242 1,878,042Director Sitting Fees 84,429 NilAdvertisement Expense 1,117,249 Nil

Total 6,741,933 2,896,595

22.5 CIF Value of Imports Capital Goods 31,313,984 2,680,226 Software 550,000 285,645

Total 31,863,984 2,965,871

23. In view of the diverse nature of the food and beverages items (each being less than 10% in value of the total turnover of the Company) being sold by the Company, it is not practicable to give the quantitative details thereof. All items of food and beverages are indigenously procured.

24. Previous Year Comparative(a) The Company has during the year, started commercial operations at Ambience Mall, Ambience Food Court and

Chandigarh. Hence, current year’s figures are not strictly comparable with those of previous year.(b) Previous year’s figures have been re-grouped where necessary to conform to current year’s classification.

Signature to Schedule 1 to 22

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

Notes to the Accounts

88 89

PVR LIMITEDBalance Sheet Abstract And Company General Business Profi le

I. REGISTRATION DETAILS Regn No. : 67827 State Code 55 Balance Sheet date : 31.03.2009

II. CAPITAL RAISED DURING THE YEAR (Amount in Rs.Thousands) Public Issue Right Issue NIL NIL Bonus Issue Private Placement NIL NIL

III. POSITION OF MOBLISATION AND DEVELOPMENT OF FUNDS(Amount in Rs. Thousands)

Total Liabilities Total Assets 3279697 3279697 Sources of Funds Paid-up Capital Reserves & Surplus 230139 1873251 Secured Loans Unsecured Loans 968057 0 Deferred Tax Liabilities 208250 Application of Funds Net Fixed Assets Investment 1889595 669912 Net Current Assets Misc Expenditure 720190 0 Accumulated Losses NIL

IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousand) Turnover Total Expenditure 2787071 2588676 Profit Before Tax Profit After tax + – 198395 126517 Earning per Shares in Rs. Dividend rate % 5.43 10

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS / SERVICES OF COMPANY (As per Monetary Terms)

Item code No. : NIL Product Description : Display of Films, Sales of Food & Beverages and Advertisement Income

N. C. Gupta Nitin Sood Ajay Bijli Sanjeev Kumar(Company Secretary) (Chief Financial Officer) (Chairman cum Managing Director) (Joint Managing Director)

Place: Gurgaon Sanjay KhannaDate: May 29, 2009 (Director)

9090

Auditor’s Report to the Board of Directors of PVR Limited on the consolidated fi nancial statements of PVR Limited and its subsidiaries (CR Retail Malls (India) Private Limited, PVR Pictures Limited, Sunrise Infotainment Private Limited and PVR bluO Entertainment Limited) (referred to as “PVR Group”).

We have audited the attached Consolidated Balance Sheet of PVR Group as at March 31, 2009, and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the PVR Limited’s management and have been prepared by the management on the basis of seperate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of Rs. 2,647,630,005 as at March 31, 2009, the total revenues of Rs. 971,719,646 and cash outflows amounting to Rs. 15,266,203 for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditors.

We report that the consolidated financial statements have been prepared by PVR Limited’s management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements notified under the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate audited financial statements of PVR Limited and its subsidiaries included in the consolidated financial statements.

Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the PVR Group as at March 31, 2009;

(b) in the case of the Consolidated Profit and Loss Account, of the Profit of the PVR Group for the year ended on that date; and

(c) in the case of the Consolidated Cash Flow Statement, of the Cash Flows of the PVR Group for the year ended on that date.

For S. R. Batliboi & Co.Chartered Accountants

per Anil GuptaPartnerMembership No.: 87921

Place : GurgaonDate : May 29, 2009

Auditors’ Report

91

ConsolidatedFinancial Statements

9090

Auditor’s Report to the Board of Directors of PVR Limited on the consolidated fi nancial statements of PVR Limited and its subsidiaries (CR Retail Malls (India) Private Limited, PVR Pictures Limited, Sunrise Infotainment Private Limited and PVR bluO Entertainment Limited) (referred to as “PVR Group”).

We have audited the attached Consolidated Balance Sheet of PVR Group as at March 31, 2009, and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the PVR Limited’s management and have been prepared by the management on the basis of seperate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of Rs. 2,647,630,005 as at March 31, 2009, the total revenues of Rs. 971,719,646 and cash outflows amounting to Rs. 15,266,203 for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditors.

We report that the consolidated financial statements have been prepared by PVR Limited’s management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements notified under the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate audited financial statements of PVR Limited and its subsidiaries included in the consolidated financial statements.

Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the PVR Group as at March 31, 2009;

(b) in the case of the Consolidated Profit and Loss Account, of the Profit of the PVR Group for the year ended on that date; and

(c) in the case of the Consolidated Cash Flow Statement, of the Cash Flows of the PVR Group for the year ended on that date.

For S. R. Batliboi & Co.Chartered Accountants

per Anil GuptaPartnerMembership No.: 87921

Place : GurgaonDate : May 29, 2009

Auditors’ Report

91

ConsolidatedFinancial Statements

Schedules For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

INCOMEOperating income 20 3,521,097,187 2,659,338,113Other income 21 116,045,835 63,640,574

3,637,143,022 2,722,978,687

EXPENDITUREFilm distributors’ share (including commission) 632,053,553 558,512,105Movie Distribution and Print Charges 510,236,769 264,914,482Cost of goods purchased for sale 144,504 -Consumption of food and beverages 193,107,629 157,870,840Personnel expenses 22 383,652,964 255,257,207Operating and other expenses 23 1,329,405,100 934,065,658Miscellaneous expenditure written off 152,342 -

3,048,752,861 2,170,620,292

Profit before depreciation/amortisation, interest and tax (EBITDA) 588,390,161 552,358,395Depreciation/amortisation 353,392,563 170,532,711Interest paid 24 125,471,612 51,438,936

Profit Before Tax 109,525,986 330,386,748

Provision for Minimum Alternative Tax (MAT)/current tax (20,800,000) (105,003,000)Less: MAT Credit Entitlement Account 9,300,000 (11,500,000) -Wealth Tax (125,000) (60,000)Deferred tax charge (5,773,590) (3,060,360)Deferred tax charge for earlier years (86,184,072) -Income tax credit for earlier years (net) (Refer Note No. 14 of Schedule 26) 85,062,550 28,156Fringe benefit tax (7,661,583) (6,043,602)

Total Tax Expense (26,181,695) (114,138,806)

Net Profit after tax 83,344,291 216,247,942Add: Share of Minority Interest in losses 3,791,837 -Net Profit for the year 87,136,128 216,247,942Balance brought forward from previous year 278,688,885 198,012,781

Profit available for appropriation 365,825,013 414,260,723Appropriations - Transfer to Capital Redemption Reserve 100,000,000 100,000,000 - Interim dividend on equity shares - 23,013,870 - Interim dividend on preference shares 1,246,576 7,390,710 - Final dividend on equity shares 23,013,870 - - Tax on dividends 4,123,063 5,167,258

Surplus carried to Balance Sheet 237,441,504 278,688,885

Earnings per share 25Basic [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 3.72 9.02Diluted [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 3.72 8.77

Notes to Accounts 26

Consolidated Balance Sheet as at March 31, 2009 Consolidated Profi t and Loss Account for the year ended March 31, 2009

Schedules As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

SOURCES OF FUNDSShareholders’ FundsShare Capital 1 230,138,700 330,138,700Advance received against convertible warrants - 25,820,400Reserves and surplus 2 2,456,762,652 1,753,690,352

2,686,901,352 2,109,649,452

Minority Interest 3Equity 199,683,340 -Securities premium account 411,911,741 -Non-Equity (3,791,837) -

607,803,244 -

Loan fundsSecured loans 4 1,440,540,348 1,353,001,195Unsecured loans 5 30,000 30,000

1,440,570,348 1,353,031,195

Deferred Tax Liabilities (Net) 6 208,250,614 69,604,467

4,943,525,558 3,532,285,114

APPLICATION OF FUNDSFixed Assets 7Gross block 3,662,472,527 2,088,817,783Less : Accumulated Depreciation 695,706,853 491,852,964

Net block 2,966,765,674 1,596,964,819Capital Work-in-Progress including Capital Advances 64,062,890 951,633,612Pre-operative expenses (pending allocation) 8 31,810,838 163,094,843

3,062,639,402 2,711,693,274

Intangible Assets (net of amortisation and including 9 186,207,990 160,102,342capital advances)Investments 10 1,148,399,611 297,728,040Deferred Tax Assets (net) 11 48,549,923 1,861,439Current Assets, Loans and AdvancesInterest accrued on long term investments 5,634,567 9,986,764Inventories 12 32,353,334 20,910,288Sundry debtors 13 184,906,119 207,289,668Cash and bank balances 14 84,310,581 145,547,081Other current assets 15 8,627,342 6,410,765Loans and advances 16 843,528,819 519,457,735

1,159,360,762 909,602,301

Less: Current Liabilities and ProvisionsCurrent liabilities 17 617,192,603 500,702,733Provisions 18 45,048,895 47,999,549

662,241,498 548,702,282

Net Current Assets 497,119,264 360,900,019

Miscellaneous Expenditure (to the extent not written off) 19 609,368 -

4,943,525,558 3,532,285,114

Notes to Accounts 26

The Schedules referred to above and Notes to Accounts form an integral part of the Consolidated Balance Sheet.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

The Schedules referred to above and Notes to Accounts form an integral part of the Consolidated Profit and Loss Account.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 200992 93

Schedules For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

INCOMEOperating income 20 3,521,097,187 2,659,338,113Other income 21 116,045,835 63,640,574

3,637,143,022 2,722,978,687

EXPENDITUREFilm distributors’ share (including commission) 632,053,553 558,512,105Movie Distribution and Print Charges 510,236,769 264,914,482Cost of goods purchased for sale 144,504 -Consumption of food and beverages 193,107,629 157,870,840Personnel expenses 22 383,652,964 255,257,207Operating and other expenses 23 1,329,405,100 934,065,658Miscellaneous expenditure written off 152,342 -

3,048,752,861 2,170,620,292

Profit before depreciation/amortisation, interest and tax (EBITDA) 588,390,161 552,358,395Depreciation/amortisation 353,392,563 170,532,711Interest paid 24 125,471,612 51,438,936

Profit Before Tax 109,525,986 330,386,748

Provision for Minimum Alternative Tax (MAT)/current tax (20,800,000) (105,003,000)Less: MAT Credit Entitlement Account 9,300,000 (11,500,000) -Wealth Tax (125,000) (60,000)Deferred tax charge (5,773,590) (3,060,360)Deferred tax charge for earlier years (86,184,072) -Income tax credit for earlier years (net) (Refer Note No. 14 of Schedule 26) 85,062,550 28,156Fringe benefit tax (7,661,583) (6,043,602)

Total Tax Expense (26,181,695) (114,138,806)

Net Profit after tax 83,344,291 216,247,942Add: Share of Minority Interest in losses 3,791,837 -Net Profit for the year 87,136,128 216,247,942Balance brought forward from previous year 278,688,885 198,012,781

Profit available for appropriation 365,825,013 414,260,723Appropriations - Transfer to Capital Redemption Reserve 100,000,000 100,000,000 - Interim dividend on equity shares - 23,013,870 - Interim dividend on preference shares 1,246,576 7,390,710 - Final dividend on equity shares 23,013,870 - - Tax on dividends 4,123,063 5,167,258

Surplus carried to Balance Sheet 237,441,504 278,688,885

Earnings per share 25Basic [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 3.72 9.02Diluted [Nominal value of shares Rs. 10 (Previous Year : Rs. 10)] 3.72 8.77

Notes to Accounts 26

Consolidated Balance Sheet as at March 31, 2009 Consolidated Profi t and Loss Account for the year ended March 31, 2009

Schedules As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

SOURCES OF FUNDSShareholders’ FundsShare Capital 1 230,138,700 330,138,700Advance received against convertible warrants - 25,820,400Reserves and surplus 2 2,456,762,652 1,753,690,352

2,686,901,352 2,109,649,452

Minority Interest 3Equity 199,683,340 -Securities premium account 411,911,741 -Non-Equity (3,791,837) -

607,803,244 -

Loan fundsSecured loans 4 1,440,540,348 1,353,001,195Unsecured loans 5 30,000 30,000

1,440,570,348 1,353,031,195

Deferred Tax Liabilities (Net) 6 208,250,614 69,604,467

4,943,525,558 3,532,285,114

APPLICATION OF FUNDSFixed Assets 7Gross block 3,662,472,527 2,088,817,783Less : Accumulated Depreciation 695,706,853 491,852,964

Net block 2,966,765,674 1,596,964,819Capital Work-in-Progress including Capital Advances 64,062,890 951,633,612Pre-operative expenses (pending allocation) 8 31,810,838 163,094,843

3,062,639,402 2,711,693,274

Intangible Assets (net of amortisation and including 9 186,207,990 160,102,342capital advances)Investments 10 1,148,399,611 297,728,040Deferred Tax Assets (net) 11 48,549,923 1,861,439Current Assets, Loans and AdvancesInterest accrued on long term investments 5,634,567 9,986,764Inventories 12 32,353,334 20,910,288Sundry debtors 13 184,906,119 207,289,668Cash and bank balances 14 84,310,581 145,547,081Other current assets 15 8,627,342 6,410,765Loans and advances 16 843,528,819 519,457,735

1,159,360,762 909,602,301

Less: Current Liabilities and ProvisionsCurrent liabilities 17 617,192,603 500,702,733Provisions 18 45,048,895 47,999,549

662,241,498 548,702,282

Net Current Assets 497,119,264 360,900,019

Miscellaneous Expenditure (to the extent not written off) 19 609,368 -

4,943,525,558 3,532,285,114

Notes to Accounts 26

The Schedules referred to above and Notes to Accounts form an integral part of the Consolidated Balance Sheet.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

The Schedules referred to above and Notes to Accounts form an integral part of the Consolidated Profit and Loss Account.As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 200992 93

For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

A. Cash flow from operating activities: Profit before taxation 109,525,986 330,386,748

Adjustments for : Depreciation/amortisation 353,392,563 170,532,711 Loss on disposal of fixed assets (net) 13,797,816 2,278,058 Pre-operative expenses charged off 76,692 71,425 Interest income (9,589,604) (13,650,006) Loss/ (Profit) on sale of current investments (net) (4,665,961) 19,114 Miscellaneous expenditure incurred (Preliminary expenses) (609,368) - (net of amount written off) Dividend income (69,023,488) (23,173,422) Interest expense 125,471,612 51,438,936 Provision for doubtful capital advances 770,000 - Provision for doubtful debts and advances 2,533,536 1,273,309

Operating profit before working capital changes 521,679,784 519,176,873 Movements in working capital : Decrease/(Increase) in sundry debtors 19,700,012 (139,736,650) (Increase) in inventories (11,443,046) (3,295,002) (Increase) in loans and advances and other current assets (134,744,397) (118,291,731) Increase in current liabilities and provisions 121,973,210 175,442,516

Cash generated from operations 517,165,563 433,296,006 Direct taxes paid (net of refunds) (103,108,136) (118,261,831)

Net cash from operating activities 414,057,427 315,034,175

B. Cash flows (used in) investing activities Purchase of fixed assets (519,453,506) (715,852,636) Purchase of intangible assets (171,866,307) (149,136,769) Proceeds from sale of fixed assets - 4,361,402 Consideration paid for acquiring interest in a subsidiary - (125,000) Purchase of investments (9,435,063,986) (1,893,739,014) Sale of investments 8,589,058,376 2,027,008,504 Loan given to a body corporate (20,000,000) - Loan refunded by a body corporate - 101,000,000 Dividend received 69,023,488 23,173,422 Interest received 11,405,953 12,599,002 Fixed Deposits with banks placed (56,926,737) (12,722,514) Fixed Deposits with banks encashed 24,417,480 11,958,300

Net cash (used in) investing activities (1,509,405,239) (591,475,303)

C. Cash flow from financing activities Proceeds from issuance of share capital 1,256,350,000 - Share Issue expenses (26,887,308) - Repayment of preference share capital (100,000,000) (100,000,000) Proceeds from long-term borrowings 391,280,000 821,232,753 Repayment of long-term borrowings (303,740,847) (318,896,297) Repayment of short-term borrowings - (1,504,559) Advance received against convertible warrants - 25,820,400 Dividend and tax thereon paid (36,932,301) (394,179) Interest paid (178,467,489) (120,542,403)

Net cash from financing activities 1,001,602,055 305,715,715

Net (decrease)/increase in cash and cash equivalents (A + B + C) (93,745,757) 29,274,587 Balance at the time of acquisition of subsidiary - 137,418 Cash and cash equivalents at the beginning of the year 132,328,289 102,916,284

Cash and cash equivalents at the end of the year 38,582,532 132,328,289

Consolidated Cash Flow Statement for the year ended March 31, 2009 Cash Flow Statement for the year ended March 31, 2009 (continued)

Components of cash and cash equivalents as at* March 31, 2009 March 31, 2008 Cash and cheques on hand 4,257,575 7,902,037 With banks - on current accounts 34,150,171 124,349,435 With banks - on deposit accounts* - - With banks - on unpaid and unclaimed dividend accounts** 174,786 76,817

38,582,532 132,328,289

*difference of Rs. 45,728,049 (Previous year Rs. 13,218,792) from Schedule 14 represents short-term investments with an original maturity of more than three months. ** these balances are not available for use as they represent corresponding unpaid dividend liabilities.Note: The above Cash Flow Statement has been prepared under the “Indirect Method” as stated in Accounting Standard 3 on Cash Flow Statement.

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

94 95

For the year ended For the year ended March 31, 2009 March 31, 2008 (Rs.) (Rs.)

A. Cash flow from operating activities: Profit before taxation 109,525,986 330,386,748

Adjustments for : Depreciation/amortisation 353,392,563 170,532,711 Loss on disposal of fixed assets (net) 13,797,816 2,278,058 Pre-operative expenses charged off 76,692 71,425 Interest income (9,589,604) (13,650,006) Loss/ (Profit) on sale of current investments (net) (4,665,961) 19,114 Miscellaneous expenditure incurred (Preliminary expenses) (609,368) - (net of amount written off) Dividend income (69,023,488) (23,173,422) Interest expense 125,471,612 51,438,936 Provision for doubtful capital advances 770,000 - Provision for doubtful debts and advances 2,533,536 1,273,309

Operating profit before working capital changes 521,679,784 519,176,873 Movements in working capital : Decrease/(Increase) in sundry debtors 19,700,012 (139,736,650) (Increase) in inventories (11,443,046) (3,295,002) (Increase) in loans and advances and other current assets (134,744,397) (118,291,731) Increase in current liabilities and provisions 121,973,210 175,442,516

Cash generated from operations 517,165,563 433,296,006 Direct taxes paid (net of refunds) (103,108,136) (118,261,831)

Net cash from operating activities 414,057,427 315,034,175

B. Cash flows (used in) investing activities Purchase of fixed assets (519,453,506) (715,852,636) Purchase of intangible assets (171,866,307) (149,136,769) Proceeds from sale of fixed assets - 4,361,402 Consideration paid for acquiring interest in a subsidiary - (125,000) Purchase of investments (9,435,063,986) (1,893,739,014) Sale of investments 8,589,058,376 2,027,008,504 Loan given to a body corporate (20,000,000) - Loan refunded by a body corporate - 101,000,000 Dividend received 69,023,488 23,173,422 Interest received 11,405,953 12,599,002 Fixed Deposits with banks placed (56,926,737) (12,722,514) Fixed Deposits with banks encashed 24,417,480 11,958,300

Net cash (used in) investing activities (1,509,405,239) (591,475,303)

C. Cash flow from financing activities Proceeds from issuance of share capital 1,256,350,000 - Share Issue expenses (26,887,308) - Repayment of preference share capital (100,000,000) (100,000,000) Proceeds from long-term borrowings 391,280,000 821,232,753 Repayment of long-term borrowings (303,740,847) (318,896,297) Repayment of short-term borrowings - (1,504,559) Advance received against convertible warrants - 25,820,400 Dividend and tax thereon paid (36,932,301) (394,179) Interest paid (178,467,489) (120,542,403)

Net cash from financing activities 1,001,602,055 305,715,715

Net (decrease)/increase in cash and cash equivalents (A + B + C) (93,745,757) 29,274,587 Balance at the time of acquisition of subsidiary - 137,418 Cash and cash equivalents at the beginning of the year 132,328,289 102,916,284

Cash and cash equivalents at the end of the year 38,582,532 132,328,289

Consolidated Cash Flow Statement for the year ended March 31, 2009 Cash Flow Statement for the year ended March 31, 2009 (continued)

Components of cash and cash equivalents as at* March 31, 2009 March 31, 2008 Cash and cheques on hand 4,257,575 7,902,037 With banks - on current accounts 34,150,171 124,349,435 With banks - on deposit accounts* - - With banks - on unpaid and unclaimed dividend accounts** 174,786 76,817

38,582,532 132,328,289

*difference of Rs. 45,728,049 (Previous year Rs. 13,218,792) from Schedule 14 represents short-term investments with an original maturity of more than three months. ** these balances are not available for use as they represent corresponding unpaid dividend liabilities.Note: The above Cash Flow Statement has been prepared under the “Indirect Method” as stated in Accounting Standard 3 on Cash Flow Statement.

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

94 95

Schedule 1 : Share Capital As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Authorised share capital 30,000,000 (Previous year 30,000,000) equity shares of Rs. 10 each 300,000,000 300,000,000 20,000,000 (Previous year 20,000,000) preference shares of Rs. 10 each 200,000,000 200,000,000

500,000,000 500,000,000Issued, subscribed and paid-up23,013,870 (Previous year 23,013,870) equity shares of Rs. 10 each fully paid 230,138,700 230,138,700Nil (Previous year 10,000,000) 5% redeemable preference shares of - 100,000,000Rs. 10 each fully paid 230,138,700 330,138,700NOTES:1. Of the above Nil (Previous year 5,321,000) 5% redeemable preference shares were held by Mr. Ajay Bijli, Chairman cum Managing

Director.2. Preference shares were redeemable at par after three years with a put and call option at the end of two years from the date of allotment i.e.

September 23, 2005.3. The Parent Company has during the year granted 500,000 stock options to its employees. (Refer Note No. 20 of Schedule 26)

Schedule 2 : Reserves and SurplusCapital Reserve (on consolidation) difference between the cost of the investment in a 3,101,308 3,101,308subsidiary and Parent Company’s portion in equity of the subsidiary at the time of acquisition (Refer Note No. 3 of Schedule 26)

Capital Reserve - Created during the year (Refer Note No. 8 of Schedule 26) 25,820,400 -Capital Redemption Reserve AccountBalance as per last account 100,000,000 -Add: Transferred from Profit and Loss Account during the year 100,000,000 100,000,000

Closing Balance 200,000,000 100,000,000Securities premium account - as per last account 1,371,900,159 1,371,900,159Add:Premium received on issue of share capital during the year 633,999,996 -by a subsidiary company Excess provision for share issue expenses now written back and 631,670 -added to securities premium account of Parent Company 2,006,531,825 1,371,900,159Less: Share issue expenses incurred by a subsidiary company 16,132,385 -

1,990,399,440 1,371,900,159Profit and Loss Account Balance 237,441,504 278,688,885

2,456,762,652 1,753,690,352

Schedule 3 : Minority Interesta) Minority interest in Equity of PVR Pictures Limited 143,333,340 - 14,333,334 Equity Shares of Rs. 10 each b) Minority interest in securities premium of PVR Pictures Limited 411,911,741 - (net of write off of share issue expenses incurred)c) Minority Interest in Non-Equity of PVR Pictures Limited Share of Profit/(loss) of the current year (2,014,527) -

553,230,554 -

d) Minority interest in Equity of PVR bluO Entertainment Limited 56,350,000 - 5,635,000 Equity Shares of Rs. 10 eache) Minority Interest in Non-Equity of PVR bluO Entertainment Limited (1,777,310) - Share of Profit/(loss) of the current year 54,572,690 -

Minority Interest in Equity of Subsidaries 199,683,340 -Minority Interest in Securities Premium of a Subsidary 411,911,741 -Minority Interest in Non-Equity of Subsidaries (3,791,837) -

607,803,244 -

Schedule 4 : Secured Loans As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Loans from banksTerm loans from banks 437,148,336 477,170,810(Due within one year Rs. 146,039,128, (Previous year Rs. 139,846,405))Car finance loans from banks 17,439,446 19,355,065(Due within one year Rs. 10,342,389 (Previous year Rs. 6,786,609))

Other loansTerm loan from a financial institution 470,583,332 398,111,647(Due within one year Rs. 41,000,004 (Previous year Rs. 26,666,667))

Term loans from a body corporate 477,269,234 400,213,673(Due within one year Rs. 144,324,782, (Previous year Rs. 94,658,114))

Term loan from small industries development bank of india (SIDBI) 38,100,000 58,150,000(Due within one year Rs. 20,400,000, (Previous year Rs. 20,050,000))

1,440,540,348 1,353,001,195

NOTES :

1. a) Term loans from United Bank of India and Union Bank of India to the extent of Rs. 91,377,638, are secured by first pari passu charge by way of hypothecation of the whole of the movable properties including movable plant and machinery, machinery spares, tools and accessories and other movable assets (except vehicles hypothecated to banks) of all current and future operating theatres of the Parent Company ranking pari passu with other lenders. These are further secured by the personal guarantee of two directors of the Parent Company.

b) Term Loan from Punjab National Bank to the extent of Rs. 245,770,698, is secured by first pari passu charge with other lenders on all assets and movable property (excluding vehicles hypothecated to banks), including current assets namely current and movable fixed assets of any kind belonging to the Parent Company both present and future except those at PVR Juhu, Mumbai of the Parent Company. This loan is further secured by second charge on all the movable and immovable assets namely current and movable fixed assets as well as the movable and immovable assets at PVR Juhu, Mumbai of the Parent Company and PVR Phoenix, Mumbai of the subsidiary.

c) Term Loan from Axis Bank of India to the extent of Rs. 100,000,000, is secured by first pari passu charge with other lenders on all movable and immovable fixed assets (excluding vehicles hypothecated to banks) and receivables, belonging to the Parent Company both present and future except those at PVR Juhu, Mumbai and at locations operated by subsidiaries of the Parent Company. These are further secured by the personal guarantee of two directors of the Parent Company.

2. Car finance loans to the extent of Rs. 17,439, 446 are to be secured by hypothecation of vehicles purchased out of the proceeds of the loans.

3. Term loan from a financial institution to the extent of Rs. 470,583,332 is secured by way of: (a) first and exclusive mortgage of property being seven (7) screen mutliplex cinema at Phoenix Mills, Senapati Bhapat Marg, Lower Parel of the subsidiary company, (b) undertaking for non-disposal of 76% of the total share capital of the Borrower held by the Parent Company, (c) assignment of all receivables of a Subsidiary Company, (d) hypothecation of all movable assets situated at the seven (7) screen multiplex cinema at Phoenix Mills, Senapati Bapat Marg, Lower Parel of the subsidiary company, and (e) Corporate gurantee of the Parent Company.

4. Term Loans from a body corporate to the extent of Rs. 477,269,234, are secured by first pari passu charge with other lenders on all fixed assets of the Parent Company (excluding vehicles hypothecated to banks) both present and future except those at PVR Juhu, Mumbai of the Parent Company. These loans are further secured by first pari passu charge on all receivables both present and future. These are further secured by the personal guarantee of two directors of the Parent Company.

5. Loan from SIDBI to the extent of Rs. 38,100,000 is secured by a first pari passu charge by way of hypothecation of all the movable assets (except vehicles hypothecated to banks) both present and future, of all cinemas of the Parent Company ranking pari passu with other lenders. It is further secured by a second charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi and is also secured by the personal guarantee of two directors of the Parent Company.

Schedules to the Consolidated AccountsSchedules to the Consolidated Accounts

Schedule 5 : Unsecured Loans As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Short Term Loans from a body corporate 30,000 30,000

30,000 30,000

96 97

Schedule 1 : Share Capital As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Authorised share capital 30,000,000 (Previous year 30,000,000) equity shares of Rs. 10 each 300,000,000 300,000,000 20,000,000 (Previous year 20,000,000) preference shares of Rs. 10 each 200,000,000 200,000,000

500,000,000 500,000,000Issued, subscribed and paid-up23,013,870 (Previous year 23,013,870) equity shares of Rs. 10 each fully paid 230,138,700 230,138,700Nil (Previous year 10,000,000) 5% redeemable preference shares of - 100,000,000Rs. 10 each fully paid 230,138,700 330,138,700NOTES:1. Of the above Nil (Previous year 5,321,000) 5% redeemable preference shares were held by Mr. Ajay Bijli, Chairman cum Managing

Director.2. Preference shares were redeemable at par after three years with a put and call option at the end of two years from the date of allotment i.e.

September 23, 2005.3. The Parent Company has during the year granted 500,000 stock options to its employees. (Refer Note No. 20 of Schedule 26)

Schedule 2 : Reserves and SurplusCapital Reserve (on consolidation) difference between the cost of the investment in a 3,101,308 3,101,308subsidiary and Parent Company’s portion in equity of the subsidiary at the time of acquisition (Refer Note No. 3 of Schedule 26)

Capital Reserve - Created during the year (Refer Note No. 8 of Schedule 26) 25,820,400 -Capital Redemption Reserve AccountBalance as per last account 100,000,000 -Add: Transferred from Profit and Loss Account during the year 100,000,000 100,000,000

Closing Balance 200,000,000 100,000,000Securities premium account - as per last account 1,371,900,159 1,371,900,159Add:Premium received on issue of share capital during the year 633,999,996 -by a subsidiary company Excess provision for share issue expenses now written back and 631,670 -added to securities premium account of Parent Company 2,006,531,825 1,371,900,159Less: Share issue expenses incurred by a subsidiary company 16,132,385 -

1,990,399,440 1,371,900,159Profit and Loss Account Balance 237,441,504 278,688,885

2,456,762,652 1,753,690,352

Schedule 3 : Minority Interesta) Minority interest in Equity of PVR Pictures Limited 143,333,340 - 14,333,334 Equity Shares of Rs. 10 each b) Minority interest in securities premium of PVR Pictures Limited 411,911,741 - (net of write off of share issue expenses incurred)c) Minority Interest in Non-Equity of PVR Pictures Limited Share of Profit/(loss) of the current year (2,014,527) -

553,230,554 -

d) Minority interest in Equity of PVR bluO Entertainment Limited 56,350,000 - 5,635,000 Equity Shares of Rs. 10 eache) Minority Interest in Non-Equity of PVR bluO Entertainment Limited (1,777,310) - Share of Profit/(loss) of the current year 54,572,690 -

Minority Interest in Equity of Subsidaries 199,683,340 -Minority Interest in Securities Premium of a Subsidary 411,911,741 -Minority Interest in Non-Equity of Subsidaries (3,791,837) -

607,803,244 -

Schedule 4 : Secured Loans As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Loans from banksTerm loans from banks 437,148,336 477,170,810(Due within one year Rs. 146,039,128, (Previous year Rs. 139,846,405))Car finance loans from banks 17,439,446 19,355,065(Due within one year Rs. 10,342,389 (Previous year Rs. 6,786,609))

Other loansTerm loan from a financial institution 470,583,332 398,111,647(Due within one year Rs. 41,000,004 (Previous year Rs. 26,666,667))

Term loans from a body corporate 477,269,234 400,213,673(Due within one year Rs. 144,324,782, (Previous year Rs. 94,658,114))

Term loan from small industries development bank of india (SIDBI) 38,100,000 58,150,000(Due within one year Rs. 20,400,000, (Previous year Rs. 20,050,000))

1,440,540,348 1,353,001,195

NOTES :

1. a) Term loans from United Bank of India and Union Bank of India to the extent of Rs. 91,377,638, are secured by first pari passu charge by way of hypothecation of the whole of the movable properties including movable plant and machinery, machinery spares, tools and accessories and other movable assets (except vehicles hypothecated to banks) of all current and future operating theatres of the Parent Company ranking pari passu with other lenders. These are further secured by the personal guarantee of two directors of the Parent Company.

b) Term Loan from Punjab National Bank to the extent of Rs. 245,770,698, is secured by first pari passu charge with other lenders on all assets and movable property (excluding vehicles hypothecated to banks), including current assets namely current and movable fixed assets of any kind belonging to the Parent Company both present and future except those at PVR Juhu, Mumbai of the Parent Company. This loan is further secured by second charge on all the movable and immovable assets namely current and movable fixed assets as well as the movable and immovable assets at PVR Juhu, Mumbai of the Parent Company and PVR Phoenix, Mumbai of the subsidiary.

c) Term Loan from Axis Bank of India to the extent of Rs. 100,000,000, is secured by first pari passu charge with other lenders on all movable and immovable fixed assets (excluding vehicles hypothecated to banks) and receivables, belonging to the Parent Company both present and future except those at PVR Juhu, Mumbai and at locations operated by subsidiaries of the Parent Company. These are further secured by the personal guarantee of two directors of the Parent Company.

2. Car finance loans to the extent of Rs. 17,439, 446 are to be secured by hypothecation of vehicles purchased out of the proceeds of the loans.

3. Term loan from a financial institution to the extent of Rs. 470,583,332 is secured by way of: (a) first and exclusive mortgage of property being seven (7) screen mutliplex cinema at Phoenix Mills, Senapati Bhapat Marg, Lower Parel of the subsidiary company, (b) undertaking for non-disposal of 76% of the total share capital of the Borrower held by the Parent Company, (c) assignment of all receivables of a Subsidiary Company, (d) hypothecation of all movable assets situated at the seven (7) screen multiplex cinema at Phoenix Mills, Senapati Bapat Marg, Lower Parel of the subsidiary company, and (e) Corporate gurantee of the Parent Company.

4. Term Loans from a body corporate to the extent of Rs. 477,269,234, are secured by first pari passu charge with other lenders on all fixed assets of the Parent Company (excluding vehicles hypothecated to banks) both present and future except those at PVR Juhu, Mumbai of the Parent Company. These loans are further secured by first pari passu charge on all receivables both present and future. These are further secured by the personal guarantee of two directors of the Parent Company.

5. Loan from SIDBI to the extent of Rs. 38,100,000 is secured by a first pari passu charge by way of hypothecation of all the movable assets (except vehicles hypothecated to banks) both present and future, of all cinemas of the Parent Company ranking pari passu with other lenders. It is further secured by a second charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi and is also secured by the personal guarantee of two directors of the Parent Company.

Schedules to the Consolidated AccountsSchedules to the Consolidated Accounts

Schedule 5 : Unsecured Loans As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Short Term Loans from a body corporate 30,000 30,000

30,000 30,000

96 97

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets and intangibles 225,236,534 82,756,003as per tax books and financial books

Gross Deferred Tax Liabilities 225,236,534 82,756,003

Deferred Tax AssetsEffect of expenditure debited to profit and loss account in the current year/earlier 14,759,651 11,314,502years but allowable for tax purposes in following yearsProvision for doubtful debts and advances 2,226,269 1,837,034Carried forward business losses and unabsorbed depreciation - -

Gross Deferred Tax Assets 16,985,920 13,151,536

Net Deferred Tax Liabilities 208,250,614 69,604,467

Schedules to the Consolidated Accounts

Schedule 6 : Deferred Tax Liabilities (Net)

Sche

dule

7 :

Con

solid

ated

Fix

ed A

sset

sRs

.

Land

Fre

ehol

d Bu

ildin

g-

Build

ing-

Le

aseh

old

Plan

t &

Furn

iture

&

Vehi

cles

To

tal

Prev

ious

Yea

r

Fr

eeho

ld

Leas

ehol

d Im

prov

emen

ts

Mac

hine

ry

Fitt

ings

Gro

ss B

lock

At 0

1.04

.200

8

190

,350

1

,273

,590

-

6

88,2

21,8

47

1,0

60,5

98,0

88

309

,599

,971

2

8,93

3,93

7

2,0

88,8

17,7

83

1,6

98,4

91,3

53

Add

ition

s

-

-

635

,711

,841

3

43,4

13,8

95

497

,737

,538

1

13,4

13,7

87

6,5

05,9

34

1,5

96,7

82,9

95

403

,402

,509

D

educ

tions

-

-

-

7

,223

,752

1

3,99

8,29

6

1,9

06,2

03

-

23,

128,

251

1

3,07

6,07

9

At 3

1.03

.200

9

190

,350

1

,273

,590

6

35,7

11,8

41

1,0

24,4

11,9

90

1,5

44,3

37,3

30

421

,107

,555

3

5,43

9,87

1

3,6

62,4

72,5

27

2,0

88,8

17,7

83

Acu

mul

ated

Dep

reci

atio

n

At 0

1.04

.200

8

-

211

,059

-

1

51,3

00,3

89

246

,111

,431

9

1,87

0,76

2

2,3

59,3

23

491

,852

,964

3

48,8

70,9

84

For

the

year

-

2

0,76

0

2,7

53,7

64

67,

867,

959

9

5,43

7,39

3

38,

614,

868

2

,937

,160

2

07,6

31,9

04

149

,418

,599

D

educ

tions

-

-

-

4

05,0

60

2,8

12,1

06

560

,849

-

3

,778

,015

6

,436

,619

At 3

1.03

.200

9

-

231

,819

2

,753

,764

2

18,7

63,2

88

338

,736

,718

1

29,9

24,7

81

5,2

96,4

83

695

,706

,853

4

91,8

52,9

64

For

pre

viou

s ye

ar

-

20,

760

-

4

6,45

1,18

2

71,

481,

905

2

9,20

7,04

0

2,2

57,7

12

149

,418

,599

Net

Blo

ck

At 3

1.03

.200

9

190

,350

1

,041

,771

6

32,9

58,0

77

805

,648

,702

1

,205

,600

,612

2

91,1

82,7

74

30,

143,

388

2

,966

,765

,674

1

,596

,964

,819

At 3

1.03

.200

8

190

,350

1

,062

,531

-

5

36,9

21,4

58

814

,486

,657

2

17,7

29,2

09

26,

574,

614

1

,596

,964

,819

Cap

ital w

ork

in p

rogr

ess

28,

527,

243

8

29,4

93,7

11

Cap

ital A

dvan

ces

(Uns

ecur

ed, c

onsid

ered

goo

d)

3

5,53

5,64

7

122

,139

,901

64,

062,

890

9

51,6

33,6

12

Tot

al

3

,030

,828

,564

2

,548

,598

,431

NO

TES

:

1.

Fix

ed a

sset

s of

the

cost

of R

s. 1

7,57

5,83

1, P

revi

ous

year

Rs.

4,4

85,6

61, (

WD

V Rs

. 13,

797,

816,

Pre

viou

s ye

ar R

s. 1

,275

,577

) hav

e be

en d

iscar

ded

durin

g th

e ye

ar.

2.

Gro

ss B

lock

of F

ixed

Ass

ets

inclu

de R

s. 4

3,95

1,08

9 (P

revi

ous

year

Rs.

43,

951,

089)

bei

ng P

aren

t Com

pany

’s pr

opor

tiona

te s

hare

of e

xpen

ses

tow

ards

mod

ificat

ion

in th

e bu

ildin

g st

ruct

ure

and

equi

pmen

ts, c

laim

ed

by th

e va

rious

land

lord

s of

the

prop

ertie

s ta

ken

on re

nt.

3.

Clai

ms

of R

s. 1

7,46

4,31

7 (P

revi

ous

year

Rs.

17,

464,

317)

lodg

ed b

y so

me

deve

lope

rs o

n th

e Pa

rent

Com

pany

and

clai

ms

of R

s. 7

,681

,033

(Pre

viou

s ye

ar R

s. 7

,681

,033

) lod

ged

by th

e Pa

rent

Com

pany

on

the

deve

lope

rs a

re s

ubje

ct to

con

firm

atio

n/re

conc

iliatio

n. H

owev

er, t

he P

aren

t Com

pany

has

dul

y ac

coun

ted

for

afor

esaid

clai

ms

in th

e bo

oks.

Adj

ustm

ents

, if a

ny, w

hich

in th

e op

inio

n of

the

man

agem

ent,

will

not b

e m

ater

ial, w

ould

be

mad

e on

ce th

e cla

ims

are

conf

irmed

/rec

oncil

ed.

4.

Addi

tions

to fi

xed

asse

ts o

f allo

cate

d pr

e-op

erat

ive

expe

nditu

re o

f tw

o su

bsid

iary

com

pani

es in

clude

Rs.

11,

852,

699

relat

ing

to p

rior y

ear’s

for w

hich

bills

hav

e be

en re

ceiv

ed d

urin

g th

e cu

rren

t yea

r.5.

Ad

ditio

ns to

Lea

seho

ld B

uild

ing

inclu

de p

rem

ium

paid

am

ount

ing

to R

s. 4

68,7

50,0

00 to

war

ds le

ase

of 9

00 y

ears

.6.

Ad

just

men

ts to

fixe

d as

sets

inclu

de R

s. 5

,552

,420

bei

ng c

redi

t of C

ount

erve

iling

Dut

y (C

VD) p

erta

inin

g to

ear

lier

year

s, b

ut c

laim

ed a

t the

end

of t

he c

urre

nt y

ear

on im

porte

d pl

ant a

nd m

achi

nery

by

the

Pare

nt

Com

pany

.

7

. Dep

recia

tion

prov

ided

for t

he y

ear i

s ne

t of r

ever

sal o

f dep

recia

tion

prov

ided

in e

arlie

r yea

rs o

f Rs.

482

,450

(Pre

viou

s ye

ar R

s. 1

,637

,116

).

98 99

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets and intangibles 225,236,534 82,756,003as per tax books and financial books

Gross Deferred Tax Liabilities 225,236,534 82,756,003

Deferred Tax AssetsEffect of expenditure debited to profit and loss account in the current year/earlier 14,759,651 11,314,502years but allowable for tax purposes in following yearsProvision for doubtful debts and advances 2,226,269 1,837,034Carried forward business losses and unabsorbed depreciation - -

Gross Deferred Tax Assets 16,985,920 13,151,536

Net Deferred Tax Liabilities 208,250,614 69,604,467

Schedules to the Consolidated Accounts

Schedule 6 : Deferred Tax Liabilities (Net)

Sche

dule

7 :

Con

solid

ated

Fix

ed A

sset

sRs

.

Land

Fre

ehol

d Bu

ildin

g-

Build

ing-

Le

aseh

old

Plan

t &

Furn

iture

&

Vehi

cles

To

tal

Prev

ious

Yea

r

Fr

eeho

ld

Leas

ehol

d Im

prov

emen

ts

Mac

hine

ry

Fitt

ings

Gro

ss B

lock

At 0

1.04

.200

8

190

,350

1

,273

,590

-

6

88,2

21,8

47

1,0

60,5

98,0

88

309

,599

,971

2

8,93

3,93

7

2,0

88,8

17,7

83

1,6

98,4

91,3

53

Add

ition

s

-

-

635

,711

,841

3

43,4

13,8

95

497

,737

,538

1

13,4

13,7

87

6,5

05,9

34

1,5

96,7

82,9

95

403

,402

,509

D

educ

tions

-

-

-

7

,223

,752

1

3,99

8,29

6

1,9

06,2

03

-

23,

128,

251

1

3,07

6,07

9

At 3

1.03

.200

9

190

,350

1

,273

,590

6

35,7

11,8

41

1,0

24,4

11,9

90

1,5

44,3

37,3

30

421

,107

,555

3

5,43

9,87

1

3,6

62,4

72,5

27

2,0

88,8

17,7

83

Acu

mul

ated

Dep

reci

atio

n

At 0

1.04

.200

8

-

211

,059

-

1

51,3

00,3

89

246

,111

,431

9

1,87

0,76

2

2,3

59,3

23

491

,852

,964

3

48,8

70,9

84

For

the

year

-

2

0,76

0

2,7

53,7

64

67,

867,

959

9

5,43

7,39

3

38,

614,

868

2

,937

,160

2

07,6

31,9

04

149

,418

,599

D

educ

tions

-

-

-

4

05,0

60

2,8

12,1

06

560

,849

-

3

,778

,015

6

,436

,619

At 3

1.03

.200

9

-

231

,819

2

,753

,764

2

18,7

63,2

88

338

,736

,718

1

29,9

24,7

81

5,2

96,4

83

695

,706

,853

4

91,8

52,9

64

For

pre

viou

s ye

ar

-

20,

760

-

4

6,45

1,18

2

71,

481,

905

2

9,20

7,04

0

2,2

57,7

12

149

,418

,599

Net

Blo

ck

At 3

1.03

.200

9

190

,350

1

,041

,771

6

32,9

58,0

77

805

,648

,702

1

,205

,600

,612

2

91,1

82,7

74

30,

143,

388

2

,966

,765

,674

1

,596

,964

,819

At 3

1.03

.200

8

190

,350

1

,062

,531

-

5

36,9

21,4

58

814

,486

,657

2

17,7

29,2

09

26,

574,

614

1

,596

,964

,819

Cap

ital w

ork

in p

rogr

ess

28,

527,

243

8

29,4

93,7

11

Cap

ital A

dvan

ces

(Uns

ecur

ed, c

onsid

ered

goo

d)

3

5,53

5,64

7

122

,139

,901

64,

062,

890

9

51,6

33,6

12

Tot

al

3

,030

,828

,564

2

,548

,598

,431

NO

TES

:

1.

Fix

ed a

sset

s of

the

cost

of R

s. 1

7,57

5,83

1, P

revi

ous

year

Rs.

4,4

85,6

61, (

WD

V Rs

. 13,

797,

816,

Pre

viou

s ye

ar R

s. 1

,275

,577

) hav

e be

en d

iscar

ded

durin

g th

e ye

ar.

2.

Gro

ss B

lock

of F

ixed

Ass

ets

inclu

de R

s. 4

3,95

1,08

9 (P

revi

ous

year

Rs.

43,

951,

089)

bei

ng P

aren

t Com

pany

’s pr

opor

tiona

te s

hare

of e

xpen

ses

tow

ards

mod

ificat

ion

in th

e bu

ildin

g st

ruct

ure

and

equi

pmen

ts, c

laim

ed

by th

e va

rious

land

lord

s of

the

prop

ertie

s ta

ken

on re

nt.

3.

Clai

ms

of R

s. 1

7,46

4,31

7 (P

revi

ous

year

Rs.

17,

464,

317)

lodg

ed b

y so

me

deve

lope

rs o

n th

e Pa

rent

Com

pany

and

clai

ms

of R

s. 7

,681

,033

(Pre

viou

s ye

ar R

s. 7

,681

,033

) lod

ged

by th

e Pa

rent

Com

pany

on

the

deve

lope

rs a

re s

ubje

ct to

con

firm

atio

n/re

conc

iliatio

n. H

owev

er, t

he P

aren

t Com

pany

has

dul

y ac

coun

ted

for

afor

esaid

clai

ms

in th

e bo

oks.

Adj

ustm

ents

, if a

ny, w

hich

in th

e op

inio

n of

the

man

agem

ent,

will

not b

e m

ater

ial, w

ould

be

mad

e on

ce th

e cla

ims

are

conf

irmed

/rec

oncil

ed.

4.

Addi

tions

to fi

xed

asse

ts o

f allo

cate

d pr

e-op

erat

ive

expe

nditu

re o

f tw

o su

bsid

iary

com

pani

es in

clude

Rs.

11,

852,

699

relat

ing

to p

rior y

ear’s

for w

hich

bills

hav

e be

en re

ceiv

ed d

urin

g th

e cu

rren

t yea

r.5.

Ad

ditio

ns to

Lea

seho

ld B

uild

ing

inclu

de p

rem

ium

paid

am

ount

ing

to R

s. 4

68,7

50,0

00 to

war

ds le

ase

of 9

00 y

ears

.6.

Ad

just

men

ts to

fixe

d as

sets

inclu

de R

s. 5

,552

,420

bei

ng c

redi

t of C

ount

erve

iling

Dut

y (C

VD) p

erta

inin

g to

ear

lier

year

s, b

ut c

laim

ed a

t the

end

of t

he c

urre

nt y

ear

on im

porte

d pl

ant a

nd m

achi

nery

by

the

Pare

nt

Com

pany

.

7

. Dep

recia

tion

prov

ided

for t

he y

ear i

s ne

t of r

ever

sal o

f dep

recia

tion

prov

ided

in e

arlie

r yea

rs o

f Rs.

482

,450

(Pre

viou

s ye

ar R

s. 1

,637

,116

).

98 99

Schedule 10 : Investments As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Long Term Investments (At Cost)Other than trade investmentsIn Government Securities (Unquoted)6 years National Savings Certificates* 12,548,000 22,548,000(Deposited with Entertainment Tax Authorities)6 years National Savings Certificates** 45,000 45,000(Deposited with Municipal Corporation of Hyderabad)Current Investments (At lower of cost and market value)Other than trade investments (Quoted)***Units in mutual funds of Rs. 10 each743,106.133 (Previous year Nil) units of GFBG IDFC Money Manager Fund - 10,426,894 -Treasury Plan - Institutional Plan B - Growth3,891,294.852 (Previous year Nil) units of DWS Ultra Short Term Fund - 40,121,585 -Institutional Growth2,086,714.350 (Previous year Nil) units of 2032/HDFC Cash Management Fund - 40,095,799 -Treasury Advantage Fund - Wholesale - Growth2,856,687.967 (Previous year Nil) Reliance Medium Term Fund -Retail Plan- 51,903,449 -Growth Plan -Growth Option2,443,691.614 (Previous year Nil) DWS Ultra short Term Fund-Institutional Growth 25,195,928 -5,043,874.744 (Previous year Nil) GFBG IDFC Money Manager Fund Treasury Plan- 70,773,129 -Inst Plan-B-Growth2,889,251.799 (Previous year Nil) Principal Floating rate Fund Fmp- Institutional Option 40,149,910 -Growth Fund2,169,996.679 (Previous year Nil) Kotak Floater Long Term-Growth 30,153,406 -12,967,606.323 (Previous year Nil) Birla Sun life Savings Fund-Institutional Growth Fund 215,699,273 -7,179,969.374 (Previous year Nil) HDFC Cash Management Fund -Treasury Advantage Plan- 137,961,676 -Whole sale -Growth 11,226,566.546 (Previous year Nil)TFLG Tata Floater Fund-Growth 112,665,331 -7,391,231.547 (Previous year Nil) JM Money Manager Fund-Super Plus Plan-Growth 91,343,056 -6,253,799.562 (Previous year Nil) 27 ICICI Prudential-Flexible Income Plan- 101,918,797 -Premium GrowthNil (Previous year 5,065,237.974) units of Birla Sun Life Liquid Plus-Institutional- - 50,686,823Daily Dividend - ReinvestmentNil (Previous year 5,021,464.997) units of Kotak Flexi Debt Scheme - Daily Dividend - 50,370,818Nil (Previous year 4,048,674.995) units of TFLD TATA Floater Fund - Daily Dividend - 40,630,883Nil (Previous year 2,883,067.574) units of 28Q ICICI Prudential - Flexible Income - 30,484,115Plan Dividend - Daily Dividend Reinvesment170,874.265 (Previous year Nil) units of Reliance Medium Term Fund - Retail Plan- 3,104,632 -Growth Plan - Growth OptionUnits in mutual funds of Rs. 1,000 each139,563.202 (Previous year Nil) UTI Treasury advantage fund-Institutional Plan 164,293,746 -(Growth option)Nil (Previous year 92,378.275) units of Reliance Liquid Plus Fund - Institutional - 92,483,254Option Daily Dividend PlanNil (Previous year 10,469.086) units of Reliance Liquid Plus Fund - Institutional - 10,479,147Option Daily Dividend Plan

1,148,399,611 297,728,040

Notes :1. *Held in the name of the Managing Director in the interest of the Parent Company. 5,548,000 5,548,0002. *Held in the name of respective Director of the subsidiary company/companies. 7,000,000 17,000,0003. **Held in the name of the Employee in the interest of the Parent Company. 45,000 45,0004. *** Invested out of unutilised monies out of issue of share capital. 1,042,057,701 264,655,893

5. The following units held in mutual funds were purchased and sold during the year: Purchased Value (Rs.)Units in mutual funds of Rs. 10 each9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93011,868,643.971 28Q ICICI Prudential - Flexible Income Plan Dividend - 125,493,107 Daily Dividend Reinvestment11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,573 41,305.361 TFLD TATA Floater Fund - Daily Dividend 414,524 4,911.320 Birla Sun Life Liquid Plus - Institutional - Daily Dividend - Reinvestment 49,1478,074,656.399 Kotak Flexi Debt Scheme - Daily Dividend 81,031,2642,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment

Schedule 8 : Pre-Operative Expenses (pending allocation) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Balance brought forward 163,094,843 72,965,631Salary and other allowances 21,991,828 20,776,245Contribution to provident and other funds (Refer Note No. 19 of Schedule 26) 1,353,073 1,226,022Staff welfare expenses 1,777,155 1,253,733Rent (net of recovery of Rs. 3,320,141, Previous year Nil) 8,828,377 5,889,892Rates and taxes 10,524,113 6,784,326Communication costs 247,266 196,396Architect and other fees 9,277,107 18,972,177Professional charges 10,450,146 10,636,013Travelling and conveyance 5,681,019 2,332,236Printing and stationery 87,497 167,442Insurance 449,824 598,656Repairs and maintenance: - Buildings 1,866,921 1,735,423 - Plant and machinery repair 53,000 - - Common area maintenance (net of recovery of Rs. 2,216,613, Previous year Nil) 14,506,889 -Electricity and water charges (net of recovery of Rs. 955,468, Previous year Rs. 240,861) 7,275,702 1,092,610Security service charges 1,301,262 1,460,009Interest on fixed loans 53,337,677 69,178,446Interest to banks 699 -Bank and other charges 505,863 701,870Fringe benefit tax 430,656 284,953Miscellaneous expenses 3,734,692 1,269,677

316,775,609 217,521,757

Less : Allocated to fixed assets 284,888,079 54,355,489Less: Expenses written off 76,692 71,425

Balance Carried Forward 31,810,838 163,094,843

Note:Rent includes amount paid to a director of the Parent Company 1,716,000 1,282,500Rates and taxes includes stamp duty on registration of lease deeds 1,331,610 5,920,800

Schedule 9 : Consolidated Intangible AssetsRs.

Goodwill Software Trademark and Film rights’ Cost Total Previous Year (on Consolidation) Development Cost Copyrights

Gross Block At 01.04.2008 3,237,299 12,492,052 - 68,561,573 84,290,924 57,621,429 Additions 10,315,636 13,267,449 212,725,419 236,308,504 26,669,495

At 31.03.2009 3,237,299 22,807,688 13,267,449 281,286,992 320,599,428 84,290,924

Amortisation At 01.04.2008 1,433,758 3,968,734 - 41,690,864 47,093,356 25,979,244 For the year 647,460 2,648,309 145,398 142,319,492 145,760,659 21,114,112

At 31.03.2009 2,081,218 6,617,043 145,398 184,010,356 192,854,015 47,093,356

For previous year 647,760 1,685,874 - 18,780,778 21,114,412

Net Block

At 31.03.2009 1,156,081 16,190,645 13,122,051 97,276,636 127,745,413 37,197,568

Capital Advances (Unsecured, considered good) 58,462,577 122,904,774

At 31.03.2009 1,156,081 16,190,645 13,122,051 97,276,636 186,207,990 160,102,342

At 31.03.2008 1,803,541 8,523,318 - 26,870,709 37,197,568

Note: Amortisation for the year in respect of film right’s cost includes an amount of Rs. 26,660,401 impaired based on management’s estimate of a subsidiary company towards recoverable value of such right.

Schedules to the Consolidated Accounts Schedules to the Consolidated Accounts

100 101

Schedule 10 : Investments As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Long Term Investments (At Cost)Other than trade investmentsIn Government Securities (Unquoted)6 years National Savings Certificates* 12,548,000 22,548,000(Deposited with Entertainment Tax Authorities)6 years National Savings Certificates** 45,000 45,000(Deposited with Municipal Corporation of Hyderabad)Current Investments (At lower of cost and market value)Other than trade investments (Quoted)***Units in mutual funds of Rs. 10 each743,106.133 (Previous year Nil) units of GFBG IDFC Money Manager Fund - 10,426,894 -Treasury Plan - Institutional Plan B - Growth3,891,294.852 (Previous year Nil) units of DWS Ultra Short Term Fund - 40,121,585 -Institutional Growth2,086,714.350 (Previous year Nil) units of 2032/HDFC Cash Management Fund - 40,095,799 -Treasury Advantage Fund - Wholesale - Growth2,856,687.967 (Previous year Nil) Reliance Medium Term Fund -Retail Plan- 51,903,449 -Growth Plan -Growth Option2,443,691.614 (Previous year Nil) DWS Ultra short Term Fund-Institutional Growth 25,195,928 -5,043,874.744 (Previous year Nil) GFBG IDFC Money Manager Fund Treasury Plan- 70,773,129 -Inst Plan-B-Growth2,889,251.799 (Previous year Nil) Principal Floating rate Fund Fmp- Institutional Option 40,149,910 -Growth Fund2,169,996.679 (Previous year Nil) Kotak Floater Long Term-Growth 30,153,406 -12,967,606.323 (Previous year Nil) Birla Sun life Savings Fund-Institutional Growth Fund 215,699,273 -7,179,969.374 (Previous year Nil) HDFC Cash Management Fund -Treasury Advantage Plan- 137,961,676 -Whole sale -Growth 11,226,566.546 (Previous year Nil)TFLG Tata Floater Fund-Growth 112,665,331 -7,391,231.547 (Previous year Nil) JM Money Manager Fund-Super Plus Plan-Growth 91,343,056 -6,253,799.562 (Previous year Nil) 27 ICICI Prudential-Flexible Income Plan- 101,918,797 -Premium GrowthNil (Previous year 5,065,237.974) units of Birla Sun Life Liquid Plus-Institutional- - 50,686,823Daily Dividend - ReinvestmentNil (Previous year 5,021,464.997) units of Kotak Flexi Debt Scheme - Daily Dividend - 50,370,818Nil (Previous year 4,048,674.995) units of TFLD TATA Floater Fund - Daily Dividend - 40,630,883Nil (Previous year 2,883,067.574) units of 28Q ICICI Prudential - Flexible Income - 30,484,115Plan Dividend - Daily Dividend Reinvesment170,874.265 (Previous year Nil) units of Reliance Medium Term Fund - Retail Plan- 3,104,632 -Growth Plan - Growth OptionUnits in mutual funds of Rs. 1,000 each139,563.202 (Previous year Nil) UTI Treasury advantage fund-Institutional Plan 164,293,746 -(Growth option)Nil (Previous year 92,378.275) units of Reliance Liquid Plus Fund - Institutional - 92,483,254Option Daily Dividend PlanNil (Previous year 10,469.086) units of Reliance Liquid Plus Fund - Institutional - 10,479,147Option Daily Dividend Plan

1,148,399,611 297,728,040

Notes :1. *Held in the name of the Managing Director in the interest of the Parent Company. 5,548,000 5,548,0002. *Held in the name of respective Director of the subsidiary company/companies. 7,000,000 17,000,0003. **Held in the name of the Employee in the interest of the Parent Company. 45,000 45,0004. *** Invested out of unutilised monies out of issue of share capital. 1,042,057,701 264,655,893

5. The following units held in mutual funds were purchased and sold during the year: Purchased Value (Rs.)Units in mutual funds of Rs. 10 each9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93011,868,643.971 28Q ICICI Prudential - Flexible Income Plan Dividend - 125,493,107 Daily Dividend Reinvestment11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,573 41,305.361 TFLD TATA Floater Fund - Daily Dividend 414,524 4,911.320 Birla Sun Life Liquid Plus - Institutional - Daily Dividend - Reinvestment 49,1478,074,656.399 Kotak Flexi Debt Scheme - Daily Dividend 81,031,2642,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment

Schedule 8 : Pre-Operative Expenses (pending allocation) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Balance brought forward 163,094,843 72,965,631Salary and other allowances 21,991,828 20,776,245Contribution to provident and other funds (Refer Note No. 19 of Schedule 26) 1,353,073 1,226,022Staff welfare expenses 1,777,155 1,253,733Rent (net of recovery of Rs. 3,320,141, Previous year Nil) 8,828,377 5,889,892Rates and taxes 10,524,113 6,784,326Communication costs 247,266 196,396Architect and other fees 9,277,107 18,972,177Professional charges 10,450,146 10,636,013Travelling and conveyance 5,681,019 2,332,236Printing and stationery 87,497 167,442Insurance 449,824 598,656Repairs and maintenance: - Buildings 1,866,921 1,735,423 - Plant and machinery repair 53,000 - - Common area maintenance (net of recovery of Rs. 2,216,613, Previous year Nil) 14,506,889 -Electricity and water charges (net of recovery of Rs. 955,468, Previous year Rs. 240,861) 7,275,702 1,092,610Security service charges 1,301,262 1,460,009Interest on fixed loans 53,337,677 69,178,446Interest to banks 699 -Bank and other charges 505,863 701,870Fringe benefit tax 430,656 284,953Miscellaneous expenses 3,734,692 1,269,677

316,775,609 217,521,757

Less : Allocated to fixed assets 284,888,079 54,355,489Less: Expenses written off 76,692 71,425

Balance Carried Forward 31,810,838 163,094,843

Note:Rent includes amount paid to a director of the Parent Company 1,716,000 1,282,500Rates and taxes includes stamp duty on registration of lease deeds 1,331,610 5,920,800

Schedule 9 : Consolidated Intangible AssetsRs.

Goodwill Software Trademark and Film rights’ Cost Total Previous Year (on Consolidation) Development Cost Copyrights

Gross Block At 01.04.2008 3,237,299 12,492,052 - 68,561,573 84,290,924 57,621,429 Additions 10,315,636 13,267,449 212,725,419 236,308,504 26,669,495

At 31.03.2009 3,237,299 22,807,688 13,267,449 281,286,992 320,599,428 84,290,924

Amortisation At 01.04.2008 1,433,758 3,968,734 - 41,690,864 47,093,356 25,979,244 For the year 647,460 2,648,309 145,398 142,319,492 145,760,659 21,114,112

At 31.03.2009 2,081,218 6,617,043 145,398 184,010,356 192,854,015 47,093,356

For previous year 647,760 1,685,874 - 18,780,778 21,114,412

Net Block

At 31.03.2009 1,156,081 16,190,645 13,122,051 97,276,636 127,745,413 37,197,568

Capital Advances (Unsecured, considered good) 58,462,577 122,904,774

At 31.03.2009 1,156,081 16,190,645 13,122,051 97,276,636 186,207,990 160,102,342

At 31.03.2008 1,803,541 8,523,318 - 26,870,709 37,197,568

Note: Amortisation for the year in respect of film right’s cost includes an amount of Rs. 26,660,401 impaired based on management’s estimate of a subsidiary company towards recoverable value of such right.

Schedules to the Consolidated Accounts Schedules to the Consolidated Accounts

100 101

2,922,261.628 GFBG IDFC Money Manager Fund-Treasury Plan-Institutional Plan B-Growth 40,434,3013,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - Institutional Plan B - 30,426,894Daily Dividend 3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,891,294.852 DWS Ultra Short Term Fund - Institutional Growth 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - Wholesale - 40,095,799Daily Dividend - Reinvestment Option 2,086,714.350 2032/HDFC Cash Management Fund - Treasury Advantage Fund - 40,095,799Wholesale - Growth 2,086,714.350 2032/HDFC Cash Management Fund - Treasury Advantage Fund - 81,593,987Wholesale - Growth 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,415,7092,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,0231,769,968.799 Reliance Medium Term Fund - Daily Dividend Plan 30,258,5023,345,564.383 Q ICICI Prudential Flexible Income Plan Premium - Daily Dividend 35,374,32515,794,769.0 Reliance Medium term fund daily dividend plan 270,019,4769,167,969.0 Reliance Liquid Fund - Cash Plan Daily Dividend Option 102,144,9229,997,101.0 Reliance Interval Fund-quarterly plan-series I-institutional dividend plan 100,000,00024,992,252.0 Reliance Liquidity Fund Daily Dividend Reinvestment option 250,000,0002,496,256.0 DWS Ultra short Term Fund 25,000,0004,998,750.0 GCCD IDFC Cash Fund Super Inst Plan C-Daily Dividend 50,000,0001,890,073.0 GCDB IDFC Cash Fund Inst Plan B-Daily Dividend 20,000,0006,952,219.0 GFBD IDFC Money Manager Fund - Treasury Plan - Inst Plan-B - Daily Dividend 70,010,93115,000,000.0 UTI Fixed Income Interval Fund Monthly Interval Plan Series I 150,000,000Institutional Dividend Plan- Re-investment 10,068,109.0 UTI Fixed Income Interval Fund Series II Quarterly Interval Plan IV 100,681,094Institutional Daily Dividend Plan- Re-investment 7,500,000.0 UTI Short Term Fixed Maturity Plan Series I -VII(93 days) 75,000,000Institutional Dividend Plan -Re- Investment 7,000,000.0 UTI Short Term Fixed Maturity Plan Series I -IX(90 days) 70,000,000Institutional Dividend Plan -Re- Investment 3,999,120.0 Principal Cash Management fund liquid option Dividend Reinvestment Daily 40,000,0003,995,591.0 Principal Floating rate Fund Fop-Institutional Option Dividend Reinvestment Daily 40,005,05314,956,293.0 Kotak Flexi Debt Scheme -Daily Dividend 150,028,06712,266,828.0 Kotak Liquid (institutional Premium)- Daily Dividend 150,000,0002,976,250.0 Kotak Floater Long Term Daily dividend 30,000,00015,924,359.0 Kotak Flexi Debt Scheme -Institutional Daily Dividend 160,000,0009,000,000.0 Kotak Quarterly Interval Plan Series 2 Dividend 90,000,00010,000,000.0 Kotak Quarterly Interval Plan Series 3 Dividend 100,000,00010,018,862.0 Kotak Quarterly Interval Plan Series 8 Dividend 100,188,61615,019,947.0 Kotak Fmp 3M Series 32-Dividend 150,199,4725,000,000.0 DSP Black Rock FMP-1 M Series -4- Institutional Dividend Maturity 50,000,00027,341,145.0 Birla Sun Life Savings Fund-Institutional Daily Dividend - Reinvestment 273,597,36730,939,668.0 Birla Sun Life Cash plus-institutional premium Daily Dividend -re investment 310,000,00023,991,112.0 Birla Sun Life Short Term Fund-Institutional Daily Dividend 240,043,07017,863,187.0 HDFC Cash Management Fund -Saving plan-Daily Dividend Reinvestment 190,000,00018,946,928.0 HDFC Cash Management Fund -Treasury Advantage Plan -Whole sale - 190,066,106Daily Dividend 26,978,687.0 JPMORGAN India Liquid Fund -Dividend Plan -Reinvest 270,000,00026,981,118.0 JPPDI - JPMORGAN India Treasury Fund - Super Inst. 270,051,308Daily Dividend Plan -Reinvest 31,892,028.0 TFLD Tata Floater Fund Daily Dividend 320,055,64114,995,951.0 NIMID Canara Robeco Interval Monthly Institutional Dividend Fund 150,000,0007,500,000.0 NIQ2ID Canara Robeco Interval Series 2 Quarterly Plan 2 75,000,000Institutional Dividend Fund 3,494,444.0 JM High Liquidity Fund Plan Daily Dividend 35,000,00010,000,000.0 JM Interval fund Quarterly plan-2 institutional daily dividend 100,000,00010,000,000.0 JM Fixed Maturity Fund Series X Quarterly Plan 5- Institutional Dividend Plan 100,000,00018,492,413.0 JM Money Manager Fund- Super Plus Plan- Daily Dividend 185,011,34418,918,550.0 ICICI Prudential -Flexible Income Plan Premium - Daily Dividend 200,035,28719,999,000.0 32ISD ICICI Prudential Institutional Liquid Plan Super Institutional Daily Div 200,000,0002,856,688 Reliance Medium Term Fund -Retail Plan-Growth Plan -Growth Option 51,903,4492,443,692 DWS Ultra short Term Fund-Institutional Growth 25,195,9285,043,875 GFBG IDFC Money Manager Fund Treasury Plan -Inst Plan-B-Growth 70,773,1292,889,252 Principal Floating rate Fund FMP- Institutional Option Growth Fund 40,149,91015,339,765 Kotak Quarterly Interval Plan Series 9 Growth 153,397,6522,169,997 Kotak Floater Long Term –Growth 30,153,40612,967,606 Birla Sun life Savings Fund-Institutional Growth 215,699,2737,179,969 HDFC Cash Management Fund -Treasury Advantage Plan -Whle sale -Growth 137,961,67611,226,567 TFLG Tata Floter Fund -Growth 112,665,331

Schedules to the Consolidated Accounts Schedules to the Consolidated Accounts

7,391,232 JM Money Manger Fund- Super Plus Plan- Growth 91,343,056625,380.03 ICICI Prudential -Flexible Income Plan- Premium Growth 101,918,797170,874.27 Reliance Medium Term Fund - Retail Plan - Growth Plan - Growth Option 3,104,632Units in mutual funds of Rs. 1,000 each 173,485.241 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 173,682,38919,998.720 Templeton India Treasury Management Account Institutional Plan - 20,012,179Daily Dividend Reinvestment 50,040.000 Reliance Money Manager Fund- Institutional Option - Daily Dividend Plan 50,097,055361,577.000 UTI Treasury advantage fund-Institutional plan(Daily Dividend option)- 361,654,462Re-Investment 284,468.000 UTI Liquid Cash Plan Institutional Daily Dividend option Re-investment 290,000,000246,743.000 TFLG Tata Liquid Super High Investment Fund - Daily Dividend 275,000,000199,857.000 Mirae Asset Liquid Fund-Super Inst- Dividend Plan (Daily) (Re-investment) 200,000,000199,758.000 Mirae Asset Ultra Short Term Bond-Super Inst- Dividend Plan (Daily) 200,037,351(Re-investment) 139,563 UTI Treasuery advantage fund-Institutional plan (Growth option) 164,293,746SoldUnits in mutual funds of Rs. 10 each 9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93014,751,711.545 28Q ICICI Prudential - Flexible Income Plan Dividend - 155,977,222Daily Dividend Reinvesment 11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,5734,089,980.356 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 41,045,4075,070,149.294 Birla Sun Life Liquid Plus - Institutional - Daily Dividend - Reinvestment 50,735,97013,096,121.396 Kotak Flexi Debt Scheme - Daily Dividend 131,402,0822,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment 2,179,155.495 GFBG IDFC Money Manager Fund - Treasury Plan - 30,007,407Institutional Plan B - Growth 3,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - 30,426,894Institutional Plan B - Daily Dividend 3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - 40,095,799Wholesale - Daily Dividend - Reinvestment Option8,159,398.664 Reliance Fixed Horizon Fund - VIII - Series 12 - 81,593,987Institutional Dividend Payout Plan 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,409,3112,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,0231,769,968.80 Reliance Medium Term Fund - Daily Dividend Plan 30,258,5023,345,564.383 28Q ICICI Prudential Flexible Income Plan Premium - Daily Dividend 35,374,32515,794,769 Relaince Medium term fund daily dividend plan 270,019,4769,167,969 Reliance Liquid Fund - Cash Plan Daily Dividend Option 102,144,9229,997,101 Reliance Interval Fund-quarterly plan-series I-institutional dividend plan 100,027,99224,992,252 Reliance Liquidity Fund Daily Dividend Reinvestment option 250,000,0002,496,256 DWS Ultra short Term Fund 25,007,2944,998,750 GCCD IDFC Cash Fund Super Inst Plan C-Daily Dividend 50,000,0001,890,073 GCDB IDFC Cash Fund Inst Plan B-Daily Dividend 20,000,0006,952,219 GFBD IDFC Money Manager Fund - Tresury Plan - Inst Plan-B - Daily Dividend 70,010,93115,000,000 UTI Fixed Income Interval Fund Monthly Interval Plan Series I 150,000,000Institutional Dividend Plan- Re-investment 10,068,109 UTI Fixed Income Interval Fund Series II Quarterly Intervel Plan IV 100,681,094Institutional Daily Dividend Plan- Re-investment 7,500,000 UTI Short Term Fixed Maturity Plan Series I -VII(93 days) Institutional 75,000,000Dividend Plan -Re- Investment7,000,000 UTI Short Term Fixed Maturity Plan Series I -IX(90 days) Institutional 70,000,000Dividend Plan -Re- Investment3,999,120 Principal Cash Management fund liquid option Dividend Reinvestment Daily 40,000,0003,995,591 Principal Floating rate Fund Fmp- Insti Option Dividend Reinvestment Daily 40,005,05314,956,293 Kotak Flexi Debt Scheme -Daily Dividend 150,028,06712,266,828 Kotak Liquid (institutionalPremium)- Daily Dividend 150,000,0002,976,250 Kotak Floater Long Term Daily dividend 30,000,00015,924,359 Kotak Flexi Debt Scheme -Institutional Daily Dividend 160,000,0009,000,000 Kotak Quarterly Interval Plan Series 2 Dividend 90,000,00010,000,000 Kotak Quarterly Interval Plan Series 3 Dividend 100,000,00010,018,862 Kotak Quarterly Interval Plan Series 8 Dividend 100,188,616

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

102 103

2,922,261.628 GFBG IDFC Money Manager Fund-Treasury Plan-Institutional Plan B-Growth 40,434,3013,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - Institutional Plan B - 30,426,894Daily Dividend 3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,891,294.852 DWS Ultra Short Term Fund - Institutional Growth 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - Wholesale - 40,095,799Daily Dividend - Reinvestment Option 2,086,714.350 2032/HDFC Cash Management Fund - Treasury Advantage Fund - 40,095,799Wholesale - Growth 2,086,714.350 2032/HDFC Cash Management Fund - Treasury Advantage Fund - 81,593,987Wholesale - Growth 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,415,7092,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,0231,769,968.799 Reliance Medium Term Fund - Daily Dividend Plan 30,258,5023,345,564.383 Q ICICI Prudential Flexible Income Plan Premium - Daily Dividend 35,374,32515,794,769.0 Reliance Medium term fund daily dividend plan 270,019,4769,167,969.0 Reliance Liquid Fund - Cash Plan Daily Dividend Option 102,144,9229,997,101.0 Reliance Interval Fund-quarterly plan-series I-institutional dividend plan 100,000,00024,992,252.0 Reliance Liquidity Fund Daily Dividend Reinvestment option 250,000,0002,496,256.0 DWS Ultra short Term Fund 25,000,0004,998,750.0 GCCD IDFC Cash Fund Super Inst Plan C-Daily Dividend 50,000,0001,890,073.0 GCDB IDFC Cash Fund Inst Plan B-Daily Dividend 20,000,0006,952,219.0 GFBD IDFC Money Manager Fund - Treasury Plan - Inst Plan-B - Daily Dividend 70,010,93115,000,000.0 UTI Fixed Income Interval Fund Monthly Interval Plan Series I 150,000,000Institutional Dividend Plan- Re-investment 10,068,109.0 UTI Fixed Income Interval Fund Series II Quarterly Interval Plan IV 100,681,094Institutional Daily Dividend Plan- Re-investment 7,500,000.0 UTI Short Term Fixed Maturity Plan Series I -VII(93 days) 75,000,000Institutional Dividend Plan -Re- Investment 7,000,000.0 UTI Short Term Fixed Maturity Plan Series I -IX(90 days) 70,000,000Institutional Dividend Plan -Re- Investment 3,999,120.0 Principal Cash Management fund liquid option Dividend Reinvestment Daily 40,000,0003,995,591.0 Principal Floating rate Fund Fop-Institutional Option Dividend Reinvestment Daily 40,005,05314,956,293.0 Kotak Flexi Debt Scheme -Daily Dividend 150,028,06712,266,828.0 Kotak Liquid (institutional Premium)- Daily Dividend 150,000,0002,976,250.0 Kotak Floater Long Term Daily dividend 30,000,00015,924,359.0 Kotak Flexi Debt Scheme -Institutional Daily Dividend 160,000,0009,000,000.0 Kotak Quarterly Interval Plan Series 2 Dividend 90,000,00010,000,000.0 Kotak Quarterly Interval Plan Series 3 Dividend 100,000,00010,018,862.0 Kotak Quarterly Interval Plan Series 8 Dividend 100,188,61615,019,947.0 Kotak Fmp 3M Series 32-Dividend 150,199,4725,000,000.0 DSP Black Rock FMP-1 M Series -4- Institutional Dividend Maturity 50,000,00027,341,145.0 Birla Sun Life Savings Fund-Institutional Daily Dividend - Reinvestment 273,597,36730,939,668.0 Birla Sun Life Cash plus-institutional premium Daily Dividend -re investment 310,000,00023,991,112.0 Birla Sun Life Short Term Fund-Institutional Daily Dividend 240,043,07017,863,187.0 HDFC Cash Management Fund -Saving plan-Daily Dividend Reinvestment 190,000,00018,946,928.0 HDFC Cash Management Fund -Treasury Advantage Plan -Whole sale - 190,066,106Daily Dividend 26,978,687.0 JPMORGAN India Liquid Fund -Dividend Plan -Reinvest 270,000,00026,981,118.0 JPPDI - JPMORGAN India Treasury Fund - Super Inst. 270,051,308Daily Dividend Plan -Reinvest 31,892,028.0 TFLD Tata Floater Fund Daily Dividend 320,055,64114,995,951.0 NIMID Canara Robeco Interval Monthly Institutional Dividend Fund 150,000,0007,500,000.0 NIQ2ID Canara Robeco Interval Series 2 Quarterly Plan 2 75,000,000Institutional Dividend Fund 3,494,444.0 JM High Liquidity Fund Plan Daily Dividend 35,000,00010,000,000.0 JM Interval fund Quarterly plan-2 institutional daily dividend 100,000,00010,000,000.0 JM Fixed Maturity Fund Series X Quarterly Plan 5- Institutional Dividend Plan 100,000,00018,492,413.0 JM Money Manager Fund- Super Plus Plan- Daily Dividend 185,011,34418,918,550.0 ICICI Prudential -Flexible Income Plan Premium - Daily Dividend 200,035,28719,999,000.0 32ISD ICICI Prudential Institutional Liquid Plan Super Institutional Daily Div 200,000,0002,856,688 Reliance Medium Term Fund -Retail Plan-Growth Plan -Growth Option 51,903,4492,443,692 DWS Ultra short Term Fund-Institutional Growth 25,195,9285,043,875 GFBG IDFC Money Manager Fund Treasury Plan -Inst Plan-B-Growth 70,773,1292,889,252 Principal Floating rate Fund FMP- Institutional Option Growth Fund 40,149,91015,339,765 Kotak Quarterly Interval Plan Series 9 Growth 153,397,6522,169,997 Kotak Floater Long Term –Growth 30,153,40612,967,606 Birla Sun life Savings Fund-Institutional Growth 215,699,2737,179,969 HDFC Cash Management Fund -Treasury Advantage Plan -Whle sale -Growth 137,961,67611,226,567 TFLG Tata Floter Fund -Growth 112,665,331

Schedules to the Consolidated Accounts Schedules to the Consolidated Accounts

7,391,232 JM Money Manger Fund- Super Plus Plan- Growth 91,343,056625,380.03 ICICI Prudential -Flexible Income Plan- Premium Growth 101,918,797170,874.27 Reliance Medium Term Fund - Retail Plan - Growth Plan - Growth Option 3,104,632Units in mutual funds of Rs. 1,000 each 173,485.241 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 173,682,38919,998.720 Templeton India Treasury Management Account Institutional Plan - 20,012,179Daily Dividend Reinvestment 50,040.000 Reliance Money Manager Fund- Institutional Option - Daily Dividend Plan 50,097,055361,577.000 UTI Treasury advantage fund-Institutional plan(Daily Dividend option)- 361,654,462Re-Investment 284,468.000 UTI Liquid Cash Plan Institutional Daily Dividend option Re-investment 290,000,000246,743.000 TFLG Tata Liquid Super High Investment Fund - Daily Dividend 275,000,000199,857.000 Mirae Asset Liquid Fund-Super Inst- Dividend Plan (Daily) (Re-investment) 200,000,000199,758.000 Mirae Asset Ultra Short Term Bond-Super Inst- Dividend Plan (Daily) 200,037,351(Re-investment) 139,563 UTI Treasuery advantage fund-Institutional plan (Growth option) 164,293,746SoldUnits in mutual funds of Rs. 10 each 9,998,847.932 Reliance Liquidity Fund - Daily Dividend Reinvestment Option 100,019,47612,195,076.508 Reliance Medium Term Fund - Daily Dividend Plan 208,480,93014,751,711.545 28Q ICICI Prudential - Flexible Income Plan Dividend - 155,977,222Daily Dividend Reinvesment 11,760,987.533 FRDD ICICI Prudential Floating Rate Plan D - Daily Dividend 117,634,5734,089,980.356 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 41,045,4075,070,149.294 Birla Sun Life Liquid Plus - Institutional - Daily Dividend - Reinvestment 50,735,97013,096,121.396 Kotak Flexi Debt Scheme - Daily Dividend 131,402,0822,999,089.567 Templeton India Ultra Short Bond Fund - Institutional Plan - 30,045,779Daily Dividend Reinvestment 9,104,169.482 Templeton India Ultra Short Bond Fund - Super Institutional Plan - 91,212,853Daily Dividend Reinvestment 2,179,155.495 GFBG IDFC Money Manager Fund - Treasury Plan - 30,007,407Institutional Plan B - Growth 3,021,448.581 GFBD IDFC Money Manager Fund - Treasury Plan - 30,426,894Institutional Plan B - Daily Dividend 3,988,897.643 DWS Insta Cash Plus Fund - Institutional Plan - Daily Dividend 40,006,6494,006,149.246 DWS Ultra Short Term Fund - Institutional Daily Dividend 40,121,5853,996,989.377 HDFC Cash Management Fund - Treasury Advantage Plan - 40,095,799Wholesale - Daily Dividend - Reinvestment Option8,159,398.664 Reliance Fixed Horizon Fund - VIII - Series 12 - 81,593,987Institutional Dividend Payout Plan 2,040,931.058 Kotak Quarterly Interval Plan Series 2 - Dividend 20,409,3112,055,602.313 Kotak Monthly Interval Plan Series 2 - Dividend 20,556,0231,769,968.80 Reliance Medium Term Fund - Daily Dividend Plan 30,258,5023,345,564.383 28Q ICICI Prudential Flexible Income Plan Premium - Daily Dividend 35,374,32515,794,769 Relaince Medium term fund daily dividend plan 270,019,4769,167,969 Reliance Liquid Fund - Cash Plan Daily Dividend Option 102,144,9229,997,101 Reliance Interval Fund-quarterly plan-series I-institutional dividend plan 100,027,99224,992,252 Reliance Liquidity Fund Daily Dividend Reinvestment option 250,000,0002,496,256 DWS Ultra short Term Fund 25,007,2944,998,750 GCCD IDFC Cash Fund Super Inst Plan C-Daily Dividend 50,000,0001,890,073 GCDB IDFC Cash Fund Inst Plan B-Daily Dividend 20,000,0006,952,219 GFBD IDFC Money Manager Fund - Tresury Plan - Inst Plan-B - Daily Dividend 70,010,93115,000,000 UTI Fixed Income Interval Fund Monthly Interval Plan Series I 150,000,000Institutional Dividend Plan- Re-investment 10,068,109 UTI Fixed Income Interval Fund Series II Quarterly Intervel Plan IV 100,681,094Institutional Daily Dividend Plan- Re-investment 7,500,000 UTI Short Term Fixed Maturity Plan Series I -VII(93 days) Institutional 75,000,000Dividend Plan -Re- Investment7,000,000 UTI Short Term Fixed Maturity Plan Series I -IX(90 days) Institutional 70,000,000Dividend Plan -Re- Investment3,999,120 Principal Cash Management fund liquid option Dividend Reinvestment Daily 40,000,0003,995,591 Principal Floating rate Fund Fmp- Insti Option Dividend Reinvestment Daily 40,005,05314,956,293 Kotak Flexi Debt Scheme -Daily Dividend 150,028,06712,266,828 Kotak Liquid (institutionalPremium)- Daily Dividend 150,000,0002,976,250 Kotak Floater Long Term Daily dividend 30,000,00015,924,359 Kotak Flexi Debt Scheme -Institutional Daily Dividend 160,000,0009,000,000 Kotak Quarterly Interval Plan Series 2 Dividend 90,000,00010,000,000 Kotak Quarterly Interval Plan Series 3 Dividend 100,000,00010,018,862 Kotak Quarterly Interval Plan Series 8 Dividend 100,188,616

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

102 103

15,019,947 Kotak Fmp 3M Series 32-Dividend 150,218,1015,000,000 DSP Black Rock FMP-1 M Series -4- Institutional Dividend Maturity 50,014,00027,341,145 Birla Sun Life Savings Fund-Institutional Daily Dividend - Reinvestment 273,597,36730,939,668 Birla Sun Life Cash plus-inst-premium Daily Dividend -re investment 310,000,00023,991,112 Birla Sun Life Short Term Fund-Institutional Daily Dividend 240,043,07017,863,187 HDFC Cash Management Fund -Saving plan-Daily Dividend Reinvestment 190,000,00018,946,928 HDFC Cash Management Fund -Treasury Advantage Plan -Whole sale - 190,066,106Daily Dividend 26,978,687 JPMORGAN India Liquid Fund -Dividend Plan -Reinvest 270,000,00026,981,118 JPPDI - JPMORGAN India Treasury Fund - Super Inst. Daily 270,051,308Dividend Plan -Reinvest 31,892,028 TFLD Tata Floater Fund Daily Dividend 320,055,64114,995,951 NIMID Canara Robeco Interval Monthly Institutional Dividend Fund 150,002,1107,500,000 NIQ2ID Canara Robeco Interval Series 2 Quarterly Plan 2 75,000,000Institutional Dividend Fund 3,494,444 JM High Liquidity Fund Plan Daily Dividend 35,000,00010,000,000 JM Interval fund Quaterly plan-2 institutional daily dividend 99,999,97710,000,000 JM Fixed Maturity Fund Series X Quarterly Plan 5- Institutional Dividend Plan 99,999,74118,492,413 JM Money Manager Fund- Super Plus Plan- Daily Dividend 185,011,34418,918,550 ICICI Prudential -Flexible Income Plan Premium - Daily Dividend 200,035,28719,999,000 32 ISD ICICI Prudential Institutional Liquid Plan Super Institutional Daily Div 200,000,00015,339,765 Kotak Quarterly Interval Plan Series 9 Growth 157,987,310Units in mutual funds of Rs. 1,000 each265,863.516 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 266,165,64319,998.720 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 20,012,17910,469.086 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 10,479,14750,040.000 Reliance Money Manager Fund- Institutional Option - Daily Dividend Plan 50,097,055361,577.000 UTI Treasury advantage fund-Institutional plan(Daily Dividend option)- 361,667,420Re-Investment284,468.000 UTI Liquid Cash Plan Institutional Daily Dividend option Re-investment 290,000,000246,743.000 TFLG Tata Liquid Super High Investment Fund - Daily Divedend 275,000,000199,857.000 Mirae Asset Liquid Fund-Super Inst- Dividend Plan (Daily) (Re-inestment) 200,000,000199,758.000 Mirae Asset Ultra Short Term Bond-Super Inst- Dividend Plan (Daily) 200,037,351(Re-investment)

6. Aggregate value of investments March 31, 2009 March 31, 2008 Market Value Cost Market Value CostQuoted 1,135,806,611 1,135,806,611 275,135,040 275,135,040

Unquoted 12,593,000 22,593,000 1,148,399,611 297,728,040

Schedules to the Consolidated AccountsSchedules to the Consolidated Accounts

Schedule 11 : Deffered Tax Assets (Net)Deferred Tax AssetsEffect of expenditure debited to profit and loss account in the current year/ 18,523,576 1,992,588earlier years but allowable for tax purposes in following years Differences in depreciation in block of fixed assets as per tax books and financial booksProvision for doubtful debts and advances 733,636 -Carried forward business losses and unabsorbed depreciation 98,005,400 -

Gross Deferred Tax Assets 117,262,612 1,992,588

Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets and 68,712,689 131,149intangibles as per tax books and financial books

Gross Deferred Tax Liabilities 68,712,689 131,149

Net Deferred Tax Assets 48,549,923 1,861,439

Schedule 12 : Inventories(At lower of cost and net realisable value)Food and beverages 9,596,514 5,801,711Goods purchased for resale 360,093 -Stores and spares 22,396,727 15,108,577

32,353,334 20,910,288

Schedule 13 : Sundry Debtors

Debts outstanding for a period exceeding six monthsSecured, considered good 536,443 1,843,522Unsecured, considered good 31,266,930 10,204,111Unsecured, considered doubtful 7,775,428 5,048,856

Other debtsSecured, considered good 5,239,155 2,964,948Unsecured, considered good 147,863,591 192,277,087Unsecured, considered doubtful 105,279 148,314

192,786,826 212,486,838Less : Provision for doubtful debts 7,880,707 5,197,170

184,906,119 207,289,668

Schedule 14 : Cash and Bank BalancesCash on hand 4,257,575 7,902,037Balances with scheduled banks:On current accounts 34,150,171 124,349,435On deposit accounts* 45,728,049 13,218,792On unpaid and unclaimed dividend accounts 174,786 76,817

84,310,581 145,547,081

* Includes fixed deposit receipts pledged with banks amounting to Rs. 44,590,758 (Previous year Rs. 12,765,722).

Schedule 15 : Other Current AssetsIInterest accrued on deposits and others 4,671,262 2,135,414Income accrued for which invoices have been raised subsequently 3,956,080 4,275,351

8,627,342 6,410,765

Schedule 16 : Loans and AdvancesUnsecured, considered goodAdvances recoverable in cash or in kind or for value to be received 160,115,188 112,219,813Advance recoverable from a proposed subsidiary - 1,096,735Balance with excise authorities 52,597,858 9,167,146Inter-corporate loans to a body corporate 20,000,000 -Advance payment of Income Tax/Tax Deducted at Source/Tax Refundable 170,982,149 11,424,733(net of income tax provision)* MAT Credit Entitlement Account 9,300,000 -Deposits - others 430,533,624 385,549,308Unsecured, considered doubtfulAdvances recoverable in cash or in kind or for value to be received 57,462 207,462

843,586,281 519,665,197Less : Provision for doubtful advances 57,462 207,462

843,528,819 519,457,735

Included in Loans and advances are:Outstanding from two/(three) private limited companies in which some of the directors 4,900,000 56,909,052are interested as directors* includes Rs. 70,000 (Previous year Rs. 70,000) acquired by a subsidiary company at the time of dissolution of its partnership firm

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.) As at As at

March 31, 2009 March 31, 2008 (Rs.) (Rs.)

104 105

15,019,947 Kotak Fmp 3M Series 32-Dividend 150,218,1015,000,000 DSP Black Rock FMP-1 M Series -4- Institutional Dividend Maturity 50,014,00027,341,145 Birla Sun Life Savings Fund-Institutional Daily Dividend - Reinvestment 273,597,36730,939,668 Birla Sun Life Cash plus-inst-premium Daily Dividend -re investment 310,000,00023,991,112 Birla Sun Life Short Term Fund-Institutional Daily Dividend 240,043,07017,863,187 HDFC Cash Management Fund -Saving plan-Daily Dividend Reinvestment 190,000,00018,946,928 HDFC Cash Management Fund -Treasury Advantage Plan -Whole sale - 190,066,106Daily Dividend 26,978,687 JPMORGAN India Liquid Fund -Dividend Plan -Reinvest 270,000,00026,981,118 JPPDI - JPMORGAN India Treasury Fund - Super Inst. Daily 270,051,308Dividend Plan -Reinvest 31,892,028 TFLD Tata Floater Fund Daily Dividend 320,055,64114,995,951 NIMID Canara Robeco Interval Monthly Institutional Dividend Fund 150,002,1107,500,000 NIQ2ID Canara Robeco Interval Series 2 Quarterly Plan 2 75,000,000Institutional Dividend Fund 3,494,444 JM High Liquidity Fund Plan Daily Dividend 35,000,00010,000,000 JM Interval fund Quaterly plan-2 institutional daily dividend 99,999,97710,000,000 JM Fixed Maturity Fund Series X Quarterly Plan 5- Institutional Dividend Plan 99,999,74118,492,413 JM Money Manager Fund- Super Plus Plan- Daily Dividend 185,011,34418,918,550 ICICI Prudential -Flexible Income Plan Premium - Daily Dividend 200,035,28719,999,000 32 ISD ICICI Prudential Institutional Liquid Plan Super Institutional Daily Div 200,000,00015,339,765 Kotak Quarterly Interval Plan Series 9 Growth 157,987,310Units in mutual funds of Rs. 1,000 each265,863.516 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 266,165,64319,998.720 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 20,012,17910,469.086 Reliance Liquidity Plus Fund- Institutional Option -Daily Dividend Plan 10,479,14750,040.000 Reliance Money Manager Fund- Institutional Option - Daily Dividend Plan 50,097,055361,577.000 UTI Treasury advantage fund-Institutional plan(Daily Dividend option)- 361,667,420Re-Investment284,468.000 UTI Liquid Cash Plan Institutional Daily Dividend option Re-investment 290,000,000246,743.000 TFLG Tata Liquid Super High Investment Fund - Daily Divedend 275,000,000199,857.000 Mirae Asset Liquid Fund-Super Inst- Dividend Plan (Daily) (Re-inestment) 200,000,000199,758.000 Mirae Asset Ultra Short Term Bond-Super Inst- Dividend Plan (Daily) 200,037,351(Re-investment)

6. Aggregate value of investments March 31, 2009 March 31, 2008 Market Value Cost Market Value CostQuoted 1,135,806,611 1,135,806,611 275,135,040 275,135,040

Unquoted 12,593,000 22,593,000 1,148,399,611 297,728,040

Schedules to the Consolidated AccountsSchedules to the Consolidated Accounts

Schedule 11 : Deffered Tax Assets (Net)Deferred Tax AssetsEffect of expenditure debited to profit and loss account in the current year/ 18,523,576 1,992,588earlier years but allowable for tax purposes in following years Differences in depreciation in block of fixed assets as per tax books and financial booksProvision for doubtful debts and advances 733,636 -Carried forward business losses and unabsorbed depreciation 98,005,400 -

Gross Deferred Tax Assets 117,262,612 1,992,588

Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets and 68,712,689 131,149intangibles as per tax books and financial books

Gross Deferred Tax Liabilities 68,712,689 131,149

Net Deferred Tax Assets 48,549,923 1,861,439

Schedule 12 : Inventories(At lower of cost and net realisable value)Food and beverages 9,596,514 5,801,711Goods purchased for resale 360,093 -Stores and spares 22,396,727 15,108,577

32,353,334 20,910,288

Schedule 13 : Sundry Debtors

Debts outstanding for a period exceeding six monthsSecured, considered good 536,443 1,843,522Unsecured, considered good 31,266,930 10,204,111Unsecured, considered doubtful 7,775,428 5,048,856

Other debtsSecured, considered good 5,239,155 2,964,948Unsecured, considered good 147,863,591 192,277,087Unsecured, considered doubtful 105,279 148,314

192,786,826 212,486,838Less : Provision for doubtful debts 7,880,707 5,197,170

184,906,119 207,289,668

Schedule 14 : Cash and Bank BalancesCash on hand 4,257,575 7,902,037Balances with scheduled banks:On current accounts 34,150,171 124,349,435On deposit accounts* 45,728,049 13,218,792On unpaid and unclaimed dividend accounts 174,786 76,817

84,310,581 145,547,081

* Includes fixed deposit receipts pledged with banks amounting to Rs. 44,590,758 (Previous year Rs. 12,765,722).

Schedule 15 : Other Current AssetsIInterest accrued on deposits and others 4,671,262 2,135,414Income accrued for which invoices have been raised subsequently 3,956,080 4,275,351

8,627,342 6,410,765

Schedule 16 : Loans and AdvancesUnsecured, considered goodAdvances recoverable in cash or in kind or for value to be received 160,115,188 112,219,813Advance recoverable from a proposed subsidiary - 1,096,735Balance with excise authorities 52,597,858 9,167,146Inter-corporate loans to a body corporate 20,000,000 -Advance payment of Income Tax/Tax Deducted at Source/Tax Refundable 170,982,149 11,424,733(net of income tax provision)* MAT Credit Entitlement Account 9,300,000 -Deposits - others 430,533,624 385,549,308Unsecured, considered doubtfulAdvances recoverable in cash or in kind or for value to be received 57,462 207,462

843,586,281 519,665,197Less : Provision for doubtful advances 57,462 207,462

843,528,819 519,457,735

Included in Loans and advances are:Outstanding from two/(three) private limited companies in which some of the directors 4,900,000 56,909,052are interested as directors* includes Rs. 70,000 (Previous year Rs. 70,000) acquired by a subsidiary company at the time of dissolution of its partnership firm

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.) As at As at

March 31, 2009 March 31, 2008 (Rs.) (Rs.)

104 105

Schedules to the Consolidated Accounts

Schedule 23 : Operating and Other ExpensesRent (Refer Note 21 (i)(a) of Schedule 26) 439,132,433 322,628,567Less: Receipt from sub-lessees (Gross, Tax Deducted at SourceRs. 12,249,542, Previous year Rs. 3,999,146) (61,868,120) 377,264,313 (29,229,751)Rates and taxes 26,451,113 16,867,626Communication costs 22,605,272 18,833,881Professional charges 34,859,986 30,504,524Advertisement and publicity (net) 222,498,440 132,596,504Commission to sub distributors 2,694,819 2,850,779Business promotion and entertainment 4,791,406 2,621,537Travelling and conveyance 55,780,559 40,304,836Printing and stationery 14,056,685 11,042,315Insurance 6,969,456 7,162,963Consumable stores 179,414 -Repairs and maintenance :

- Buildings 52,351,696 38,422,067- Plant & Machinery 29,002,062 22,716,058- Common area maintenance 184,155,959 110,139,459- Others 23,301,501 11,550,199

Electricity and water charges 185,287,009 125,471,628Auditor’s remuneration:

- Audit fee 3,063,454 2,316,684- Tax audit fee 567,792 308,990- Quarterly limited review of accounts 1,011,240 1,011,240- Certification etc. 78,652 96,217- Out-of-pocket expenses 192,525 4,913,663 79,436

Security service charges 29,105,707 20,849,745Donations - 3,246,760Pre-operative expenses charged off 76,692 71,425Irrecoverable balances written off (net) 472,966 7,396,130Provision for doubtful capital advances 770,000 -Provision for doubtful debts and advances 2,533,536 1,273,309Loss on sale of Current Investments (net) - other than trade - 19,114Loss on sale/discard of fixed assets (net) 13,797,816 2,278,058Directors Sitting Fees 840,000 520,000Bank and other charges 16,556,530 11,924,587Miscellaneous expenses 18,088,500 18,190,771

1,329,405,100 934,065,658

Rent includes amount paid to directors 8,548,000 6,286,500

Schedule 24 : Interest paidInterest

on fixed loans 124,634,392 50,118,675to banks and others 837,220 1,320,261

125,471,612 51,438,936

Schedule 17 : Current Liabilities As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Sundry Creditors(a) total outstanding dues of Micro and Small Enterprises - -(b) total outstanding dues of creditors other than Micro and Small Enterprises 494,039,946 456,615,475Unclaimed dividend (statutory liabilities as referred in Section 205C of the Companies Act, 1956)* 174,786 76,817Book overdraft with banks 22,835,222 7,085,506Security deposits 18,627,435 17,220,223Income received in advance (includes amount adjustable after one year Rs. 36,000,000 79,428,704 17,960,701Previous year Rs. Nil)Interest accrued but not due on loans 2,086,510 1,744,011

617,192,603 500,702,733

* Shall be transferred to Investor Education and Protection Fund (as and when due)

Schedule 18 : ProvisionsFor Interim Dividend- on Equity Shares - 23,013,870- on Preference Shares - 7,390,710For Final Dividend- on Equity Shares 23,013,870 -For Corporate Dividend Tax 3,911,207 5,167,258For Fringe Benefit Tax (Net of Payment) 1,130,910 726,941For Staff benefit schemes - Leave Encashment 9,690,994 5,973,887 - Gratuity 7,301,914 5,726,883

45,048,895 47,999,549

Schedule 19 : Miscellaneous Expenditure(To the extent not written off)

Preliminary Expenses - incurred during the year 761,710 -Less: Written off during the year 152,342 -

609,368 -

Schedule 20 : Operating IncomeIncome from sale of tickets of films (net of entertainment tax paid 1,649,110,288 1,306,621,836Rs. 356,820,193 Previous year Rs. 326,170,479)Income from Revenue Sharing (net of entertainment tax paid Rs. Nil, 254,851,247 268,710,263Previous year Rs. 358,824)Income from sale of film rights, distribution of films and production of films 612,482,514 299,023,978(Gross,Tax Deducted at source Rs. 11,168,648, Previous year Rs. 5,462,785)Income from Bowling (net of entertainment tax paid Rs. 601,861) 2,361,817 -Sale of food and beverages 575,694,588 464,873,343Advertisement (Gross,Tax Deducted at source Rs. 20,632,755, 396,854,035 285,935,259Previous year Rs. 7,035,995)Royalty Income (to the extent of pouring fee) (Gross, Tax 2,178,293 7,432,987Deducted at source Rs. 116,456, Previous year Rs. Nil)Management fees (Gross, Tax Deducted at source Rs. 381,912, 4,133,533 11,813,969Previous year Rs. 848,474)Sale of goods purchased for sale 90,697 -Income from shoe rentals 429,055 -Convinience Fees 22,911,120 14,926,478

3,521,097,187 2,659,338,113

Schedule 21 : Other IncomeInterest

On bank deposits (Gross, Tax Deducted at Source Rs. 934,140, 4,235,493 1,008,114Previous year Rs. 208,378)On long term investments - Non Trade (Gross, Tax Deducted at 2,606,811 2,343,016Source Rs. Nil, Previous year Rs. Nil)From others (Gross, Tax Deducted at Source Rs. 450,220, 2,747,300 10,298,876Previous year Rs. 2,189,152)

Dividend income (from current investments - other than trade) 69,023,488 23,173,422

Schedules to the Consolidated Accounts

Profit on sale of current investments - other than trade (net) 4,665,961 -Rent received (Gross, Tax Deducted at Source Rs. 1,384,732, 7,357,021 7,322,537Previous year Rs. 1,001,852)Royalty Income (to the extent of sign on fee, from a customer) - 832,416Foreign exchange difference (net) 98,265 -Unspent Liabilities written back 11,474,617 4,318,895Miscellaneous income 13,836,879 14,343,298

116,045,835 63,640,574

Schedule 22 : Personnel ExpensesSalary and other allowances (Refer Note No. 19 of Schedule 26) 333,118,399 217,691,475Contribution to gratuity fund (Refer Note No. 19 of Schedule 26) 5,272,075 4,772,582Contribution to provident and other funds (Refer Note No. 19 of Schedule 26) 26,752,009 19,254,300Staff welfare expenses 18,510,481 13,538,850

383,652,964 255,257,207

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

106 107

Schedules to the Consolidated Accounts

Schedule 23 : Operating and Other ExpensesRent (Refer Note 21 (i)(a) of Schedule 26) 439,132,433 322,628,567Less: Receipt from sub-lessees (Gross, Tax Deducted at SourceRs. 12,249,542, Previous year Rs. 3,999,146) (61,868,120) 377,264,313 (29,229,751)Rates and taxes 26,451,113 16,867,626Communication costs 22,605,272 18,833,881Professional charges 34,859,986 30,504,524Advertisement and publicity (net) 222,498,440 132,596,504Commission to sub distributors 2,694,819 2,850,779Business promotion and entertainment 4,791,406 2,621,537Travelling and conveyance 55,780,559 40,304,836Printing and stationery 14,056,685 11,042,315Insurance 6,969,456 7,162,963Consumable stores 179,414 -Repairs and maintenance :

- Buildings 52,351,696 38,422,067- Plant & Machinery 29,002,062 22,716,058- Common area maintenance 184,155,959 110,139,459- Others 23,301,501 11,550,199

Electricity and water charges 185,287,009 125,471,628Auditor’s remuneration:

- Audit fee 3,063,454 2,316,684- Tax audit fee 567,792 308,990- Quarterly limited review of accounts 1,011,240 1,011,240- Certification etc. 78,652 96,217- Out-of-pocket expenses 192,525 4,913,663 79,436

Security service charges 29,105,707 20,849,745Donations - 3,246,760Pre-operative expenses charged off 76,692 71,425Irrecoverable balances written off (net) 472,966 7,396,130Provision for doubtful capital advances 770,000 -Provision for doubtful debts and advances 2,533,536 1,273,309Loss on sale of Current Investments (net) - other than trade - 19,114Loss on sale/discard of fixed assets (net) 13,797,816 2,278,058Directors Sitting Fees 840,000 520,000Bank and other charges 16,556,530 11,924,587Miscellaneous expenses 18,088,500 18,190,771

1,329,405,100 934,065,658

Rent includes amount paid to directors 8,548,000 6,286,500

Schedule 24 : Interest paidInterest

on fixed loans 124,634,392 50,118,675to banks and others 837,220 1,320,261

125,471,612 51,438,936

Schedule 17 : Current Liabilities As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Sundry Creditors(a) total outstanding dues of Micro and Small Enterprises - -(b) total outstanding dues of creditors other than Micro and Small Enterprises 494,039,946 456,615,475Unclaimed dividend (statutory liabilities as referred in Section 205C of the Companies Act, 1956)* 174,786 76,817Book overdraft with banks 22,835,222 7,085,506Security deposits 18,627,435 17,220,223Income received in advance (includes amount adjustable after one year Rs. 36,000,000 79,428,704 17,960,701Previous year Rs. Nil)Interest accrued but not due on loans 2,086,510 1,744,011

617,192,603 500,702,733

* Shall be transferred to Investor Education and Protection Fund (as and when due)

Schedule 18 : ProvisionsFor Interim Dividend- on Equity Shares - 23,013,870- on Preference Shares - 7,390,710For Final Dividend- on Equity Shares 23,013,870 -For Corporate Dividend Tax 3,911,207 5,167,258For Fringe Benefit Tax (Net of Payment) 1,130,910 726,941For Staff benefit schemes - Leave Encashment 9,690,994 5,973,887 - Gratuity 7,301,914 5,726,883

45,048,895 47,999,549

Schedule 19 : Miscellaneous Expenditure(To the extent not written off)

Preliminary Expenses - incurred during the year 761,710 -Less: Written off during the year 152,342 -

609,368 -

Schedule 20 : Operating IncomeIncome from sale of tickets of films (net of entertainment tax paid 1,649,110,288 1,306,621,836Rs. 356,820,193 Previous year Rs. 326,170,479)Income from Revenue Sharing (net of entertainment tax paid Rs. Nil, 254,851,247 268,710,263Previous year Rs. 358,824)Income from sale of film rights, distribution of films and production of films 612,482,514 299,023,978(Gross,Tax Deducted at source Rs. 11,168,648, Previous year Rs. 5,462,785)Income from Bowling (net of entertainment tax paid Rs. 601,861) 2,361,817 -Sale of food and beverages 575,694,588 464,873,343Advertisement (Gross,Tax Deducted at source Rs. 20,632,755, 396,854,035 285,935,259Previous year Rs. 7,035,995)Royalty Income (to the extent of pouring fee) (Gross, Tax 2,178,293 7,432,987Deducted at source Rs. 116,456, Previous year Rs. Nil)Management fees (Gross, Tax Deducted at source Rs. 381,912, 4,133,533 11,813,969Previous year Rs. 848,474)Sale of goods purchased for sale 90,697 -Income from shoe rentals 429,055 -Convinience Fees 22,911,120 14,926,478

3,521,097,187 2,659,338,113

Schedule 21 : Other IncomeInterest

On bank deposits (Gross, Tax Deducted at Source Rs. 934,140, 4,235,493 1,008,114Previous year Rs. 208,378)On long term investments - Non Trade (Gross, Tax Deducted at 2,606,811 2,343,016Source Rs. Nil, Previous year Rs. Nil)From others (Gross, Tax Deducted at Source Rs. 450,220, 2,747,300 10,298,876Previous year Rs. 2,189,152)

Dividend income (from current investments - other than trade) 69,023,488 23,173,422

Schedules to the Consolidated Accounts

Profit on sale of current investments - other than trade (net) 4,665,961 -Rent received (Gross, Tax Deducted at Source Rs. 1,384,732, 7,357,021 7,322,537Previous year Rs. 1,001,852)Royalty Income (to the extent of sign on fee, from a customer) - 832,416Foreign exchange difference (net) 98,265 -Unspent Liabilities written back 11,474,617 4,318,895Miscellaneous income 13,836,879 14,343,298

116,045,835 63,640,574

Schedule 22 : Personnel ExpensesSalary and other allowances (Refer Note No. 19 of Schedule 26) 333,118,399 217,691,475Contribution to gratuity fund (Refer Note No. 19 of Schedule 26) 5,272,075 4,772,582Contribution to provident and other funds (Refer Note No. 19 of Schedule 26) 26,752,009 19,254,300Staff welfare expenses 18,510,481 13,538,850

383,652,964 255,257,207

As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

106 107

Schedule 26: Notes to The Consolidated AccountsNOTES annexed to and forming part of the Consolidated Balance Sheet as at March 31, 2009, Consolidated Profit and Loss Account and Consolidated Cash Flow Statement for the year ended on that date.

1. Principles of Consolidation

The Consolidated Financial Statements relate to PVR Limited (Parent Company) and its Subsidiary Companies (hereinafter referred as the “PVR Group”). The Consolidated Financial Statements have been prepared on the following basis:

(i) The financial statements of the Parent Company and its Subsidiary Companies have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group balances and intra group transactions resulting in unrealized profits or losses, if any, as per Accounting Standard – 21, Consolidated Financial Statements, notified under the Companies (Accounting Standards) Rules, 2006.

(ii) The Subsidiary Companies which are included in the consolidation and the Parent Company’s holding therein is as under:

Name of Subsidiary Company Country of Percentage of Ownership Percentage of Ownership Incorporation as at March 31, 2009 as at March 31, 2008

CR Retail Malls (India) Private Limited India 100 100

PVR Pictures Limited India 60 100

Sunrise Infotainment Private Limited India 100 100

PVR bluO Entertainment Limited India 51 Not Applicable

(iii) PVR bluO Entertainment Limited was incorporated on March 28, 2008. The financial statements have been prepared for the period from the date of incorporation i.e. March 28, 2008 to March 31, 2009. Except as stated above, the financial statements of the Subsidiary Companies used in the consolidation are drawn for the same period as that of the Parent Company i.e. year ended March 31, 2009.

(iv) Goodwill represents the difference between the Parent Company’s share in the net worth of a Subsidiary Company (CR Retail Malls (India) Private Limited) and the cost of acquisition at the time of making the investment in the Subsidiary Company. For this purpose, the Parent Company’s share of net worth of the Subsidiary Company is determined on the basis of the latest financial statements of the Subsidiary Company prior to acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition. Goodwill is amortised pro-rata over a period of 5 years from the date of acquisition.

(v) Capital Reserve represents the difference between the Parent Company’s share in the net worth of Subsidiary Companies (PVR Pictures Limited and Sunrise Infotainment Private Limited) and the cost of acquisition at the time of making the investment in the Subsidiary Companies. For this purpose, the Parent Company‘s share of net worth of the Subsidiary Companies is determined on the basis of the latest financial statements of the Subsidiary Companies prior to acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition.

(vi) Minorities’ interest in net loss of consolidated subsidiaries for the year has been identified and adjusted against the income in order to arrive at the net income attributable to the shareholders of the Parent Company. Their share of net assets has been identified and presented in the Consolidated Balance Sheet separately. Where accumulated losses attributable to the minorities are in excess of their equity, in the absence of the contractual obligation on the minorities, the same have been accounted for by the Parent Company.

(vii) As far as possible, the Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Parent Company’s separate financial statements. Differences in the accounting policies, if any, have been disclosed separately.

2. Goodwill (on Consolidation)

The Goodwill in the Consolidated Financial Statements represents the excess of the purchase consideration of investment over the PVR Limited’s share in the net assets of its subsidiary – CR Retail Malls (India) Private Limited.

Particulars March 31, 2005 (Rs.)

Investment - Fresh equity shares issued by CR Retail Malls (India) Private Limited on October 4, 2004 7,000,000

PVR Limited’s share in the net assets of its subsidiary 5,448,602

Goodwill (A) 1,551,398

Investment – Additional equity shares purchased from The Phoenix Mills Limited on March 28, 2005 100,000

PVR Limited’s share in the net assets of its subsidiary 82,460

Goodwill (B) 17,540

March 31, 2007 (Rs.)

Investment – Additional equity shares issued by CR Retail Malls (India) Private Limited on March 30, 2007 192,900,000

PVR Limited’s share in the net assets of its subsidiary 191,231,639

Goodwill (C) 1,668,361

Total Goodwill (A+B+C) 3,237,299

Notes to the Consolidated Accounts

Schedule 25 : Earning Per Share (EPS) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Net profit as per profit and loss account 87,136,128 216,247,942Less: Dividend on Preference Shares and tax thereon 1,458,432 8,646,762

Net Profit for calculation of basic and diluted EPS 85,677,696 207,601,181Weighted average number of equity shares in calculating basic EPS:Number of equity shares outstanding at the beginning of the year 23,013,870 23,013,870Number of equity shares outstanding at the end of the year 23,013,870 23,013,870

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,013,870

Weighted average number of equity shares in calculating diluted EPS:Number of equity shares outstanding at the beginning of the year. 23,013,870 23,013,870Add: Effect of advance received against convertible warrants - 659,016

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,672,886

Basic Earnings Per Share 3.72 9.02Diluted Earnings Per Share 3.72 8.77

Schedules to the Consolidated Accounts

108 109

Schedule 26: Notes to The Consolidated AccountsNOTES annexed to and forming part of the Consolidated Balance Sheet as at March 31, 2009, Consolidated Profit and Loss Account and Consolidated Cash Flow Statement for the year ended on that date.

1. Principles of Consolidation

The Consolidated Financial Statements relate to PVR Limited (Parent Company) and its Subsidiary Companies (hereinafter referred as the “PVR Group”). The Consolidated Financial Statements have been prepared on the following basis:

(i) The financial statements of the Parent Company and its Subsidiary Companies have been combined on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group balances and intra group transactions resulting in unrealized profits or losses, if any, as per Accounting Standard – 21, Consolidated Financial Statements, notified under the Companies (Accounting Standards) Rules, 2006.

(ii) The Subsidiary Companies which are included in the consolidation and the Parent Company’s holding therein is as under:

Name of Subsidiary Company Country of Percentage of Ownership Percentage of Ownership Incorporation as at March 31, 2009 as at March 31, 2008

CR Retail Malls (India) Private Limited India 100 100

PVR Pictures Limited India 60 100

Sunrise Infotainment Private Limited India 100 100

PVR bluO Entertainment Limited India 51 Not Applicable

(iii) PVR bluO Entertainment Limited was incorporated on March 28, 2008. The financial statements have been prepared for the period from the date of incorporation i.e. March 28, 2008 to March 31, 2009. Except as stated above, the financial statements of the Subsidiary Companies used in the consolidation are drawn for the same period as that of the Parent Company i.e. year ended March 31, 2009.

(iv) Goodwill represents the difference between the Parent Company’s share in the net worth of a Subsidiary Company (CR Retail Malls (India) Private Limited) and the cost of acquisition at the time of making the investment in the Subsidiary Company. For this purpose, the Parent Company’s share of net worth of the Subsidiary Company is determined on the basis of the latest financial statements of the Subsidiary Company prior to acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition. Goodwill is amortised pro-rata over a period of 5 years from the date of acquisition.

(v) Capital Reserve represents the difference between the Parent Company’s share in the net worth of Subsidiary Companies (PVR Pictures Limited and Sunrise Infotainment Private Limited) and the cost of acquisition at the time of making the investment in the Subsidiary Companies. For this purpose, the Parent Company‘s share of net worth of the Subsidiary Companies is determined on the basis of the latest financial statements of the Subsidiary Companies prior to acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition.

(vi) Minorities’ interest in net loss of consolidated subsidiaries for the year has been identified and adjusted against the income in order to arrive at the net income attributable to the shareholders of the Parent Company. Their share of net assets has been identified and presented in the Consolidated Balance Sheet separately. Where accumulated losses attributable to the minorities are in excess of their equity, in the absence of the contractual obligation on the minorities, the same have been accounted for by the Parent Company.

(vii) As far as possible, the Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Parent Company’s separate financial statements. Differences in the accounting policies, if any, have been disclosed separately.

2. Goodwill (on Consolidation)

The Goodwill in the Consolidated Financial Statements represents the excess of the purchase consideration of investment over the PVR Limited’s share in the net assets of its subsidiary – CR Retail Malls (India) Private Limited.

Particulars March 31, 2005 (Rs.)

Investment - Fresh equity shares issued by CR Retail Malls (India) Private Limited on October 4, 2004 7,000,000

PVR Limited’s share in the net assets of its subsidiary 5,448,602

Goodwill (A) 1,551,398

Investment – Additional equity shares purchased from The Phoenix Mills Limited on March 28, 2005 100,000

PVR Limited’s share in the net assets of its subsidiary 82,460

Goodwill (B) 17,540

March 31, 2007 (Rs.)

Investment – Additional equity shares issued by CR Retail Malls (India) Private Limited on March 30, 2007 192,900,000

PVR Limited’s share in the net assets of its subsidiary 191,231,639

Goodwill (C) 1,668,361

Total Goodwill (A+B+C) 3,237,299

Notes to the Consolidated Accounts

Schedule 25 : Earning Per Share (EPS) As at As at March 31, 2009 March 31, 2008 (Rs.) (Rs.)

Net profit as per profit and loss account 87,136,128 216,247,942Less: Dividend on Preference Shares and tax thereon 1,458,432 8,646,762

Net Profit for calculation of basic and diluted EPS 85,677,696 207,601,181Weighted average number of equity shares in calculating basic EPS:Number of equity shares outstanding at the beginning of the year 23,013,870 23,013,870Number of equity shares outstanding at the end of the year 23,013,870 23,013,870

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,013,870

Weighted average number of equity shares in calculating diluted EPS:Number of equity shares outstanding at the beginning of the year. 23,013,870 23,013,870Add: Effect of advance received against convertible warrants - 659,016

Weighted number of equity shares of Rs. 10 each outstanding during the year 23,013,870 23,672,886

Basic Earnings Per Share 3.72 9.02Diluted Earnings Per Share 3.72 8.77

Schedules to the Consolidated Accounts

108 109

3. Capital Reserve (on Consolidation)

The Capital Reserve in the Consolidated Financial Statements represents the excess of the PVR Limited’s share in the net assets of its subsidiary (PVR Pictures Limited and Sunrise Infotainment Private Limited) over the purchase consideration of investment.

Particulars March 31, 2006 (Rs.)

Fresh equity shares issued by PVR Pictures Limited on April 5, 2005 14,500,000

PVR Limited’s share in the net assets of its subsidiaries 14,524,483

Capital Reserve (A) 24,483

Investment – Additional equity shares purchased from erstwhile shareholders of PVR Pictures Limited 500,000

PVR Limited’s share in the net assets of its subsidiary 500,000

Capital Reserve (B) -

March 31, 2008 (Rs.)

Investment – Purchase of equity shares issued by Sunrise Infotainment Private Limited on June 20, 2007 125,000

PVR Limited’s share in the net assets of its subsidiaries 3,201,825

Capital Reserve (C) 3,076,825

Total Capital Reserve (A+ B+C) 3,101,308

PVR Limited had made investment by way of 10,000 equity shares of Rs. 10 each of Sunrise Infotainment Private Limited on June 20, 2007. Capital Reserve amounting to Rs. 3,076,825 has been worked out based on the net assets value of the subsidiary as on June 20, 2007. Financial statements as at June 20, 2007 drawn by the management for this purpose have been audited by their statutory auditors.

4. Statement of Significant Accounting Policies

(a) Basis of preparation

The financial statements are prepared to comply in all material respects with the Notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the PVR Group and are consistent with those used in the previous year.

(b) Use of estimates

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 results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

(c) Fixed Assets

Fixed Assets are stated at Cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price (net of CENVAT) and any directly attributable cost of bringing the asset in its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

Leasehold improvements represent expenses incurred towards civil works, interior furnishings, etc. on the leased premises at the various locations.

(d) Goodwill

Goodwill represents the difference between the Parent Company’s share in the net worth of the Subsidiary Company and the cost of acquisition at the time of making the investment in the Subsidiary Company. For this purpose, the Parent Company’s share of net worth of the Subsidiary Company is determined on the basis of the latest financial statements of the Subsidiary Company prior to acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition.

(e) Depreciation

Leasehold Improvements are amortized over the estimated useful life or unexpired period of lease (whichever is lower) on a straight line basis.

Cost of structural improvements at premises where Parent Company has entered into agreement with the parties to operate and manage Multiscreen/Single Screen Cinemas on revenue sharing basis are amortized over the estimated useful life or lock in period of the agreement (whichever is lower) on a straight line basis.

Depreciation on all other assets is provided on Straight-Line Method at the rates computed based on estimated useful life of the assets, which are equal to the corresponding rates prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing Rs. 5,000 and below and fully depreciated over a period of one year in case of one of the subsidiary companies (0.06% of the Total Assets). In case of others, assets costing Rs. 5,000 and below are fully depreciated in the year of acquisition.

(f) Intangibles

Goodwill

Goodwill arising out of acquiring share in a Subsidiary Company is amortised pro-rata over a period of 5 years from the date of acquisition.

Software

Cost relating to purchased software’s is capitalised and is amortised on a Straight-Line Basis over their estimated useful lives of six years.

Software licenses costing Rs 5,000 and below are fully depreciated in the year of acquisition.

Film Rights’ Cost

The intellectual property rights acquired/created in relation to films are capitalised as film rights. The Subsidiary Company’s amortisation policy is as below:

(a) In respect of films which have been co-produced/co-owned/acquired and in which the Subsidiary Company holds rights for a period of 5 years and above as below :

- 60% of the cost of film rights on first domestic theatrical release of the film. The said amortisation relates to domestic theatrical rights, international theatrical rights, television rights, music rights and video rights.

In case these rights are not exploited along with or prior to the first domestic theatrical release, proportionate cost of such right is carried forward to be written off as and when such right is commercially exploited or at the end of 1 year from the date of first domestic theatrical release, whichever occurs earlier.

- Balance 40% is amortised over the remaining license period based on an estimate of future revenue potential subject to a maximum period of 10 years.

(b) In case where theatrical rights/satellite rights/home video rights are acquired (primarily for foreign films)

- 30% of the cost is amortised on domestic theatrical release of the movie.

- 40% of the cost amortised on the sale of Satellite rights.

- In cases where there is no theatrical release, 70% of the cost is amortised at time of sale of satellite rights.

- 20% of the cost is amortised on the sale of Home Video rights.

- balance 10% cost is amortised on the second sale of satellite rights.

(c) In case where theatrical rights/satellite rights/home video rights are acquired for a limited period of 1 to 5 years entire cost of movies rights acquired or produced by the Company, on first theatrical release of the movie. The said amortisation relates to domestic theatrical rights, international theatrical rights, television rights, music rights and video rights and others.

In case these rights are not exploited along with or prior to the first domestic theatrical release, proportionate cost of such right is carried forward to be written off as and when such right is commercially exploited or at the end of 1 year from the date of first theatrical release, whichever occurs earlier.

In case circumstances indicate that the realisable value of a right is less than its unamortised cost, an impairment loss is recognised for the excess of unamortised cost over the management’s estimate of film rights realisable value.

In respect of unreleased films, payments towards film rights are classified under capital advances.

(g) Leases

Where the PVR Group is the lessee

Finance leases, which effectively transfer to the PVR Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the PVR Group will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on an ongoing basis.

Where the PVR Group is the lessor

Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognised as revenue. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

110 111

3. Capital Reserve (on Consolidation)

The Capital Reserve in the Consolidated Financial Statements represents the excess of the PVR Limited’s share in the net assets of its subsidiary (PVR Pictures Limited and Sunrise Infotainment Private Limited) over the purchase consideration of investment.

Particulars March 31, 2006 (Rs.)

Fresh equity shares issued by PVR Pictures Limited on April 5, 2005 14,500,000

PVR Limited’s share in the net assets of its subsidiaries 14,524,483

Capital Reserve (A) 24,483

Investment – Additional equity shares purchased from erstwhile shareholders of PVR Pictures Limited 500,000

PVR Limited’s share in the net assets of its subsidiary 500,000

Capital Reserve (B) -

March 31, 2008 (Rs.)

Investment – Purchase of equity shares issued by Sunrise Infotainment Private Limited on June 20, 2007 125,000

PVR Limited’s share in the net assets of its subsidiaries 3,201,825

Capital Reserve (C) 3,076,825

Total Capital Reserve (A+ B+C) 3,101,308

PVR Limited had made investment by way of 10,000 equity shares of Rs. 10 each of Sunrise Infotainment Private Limited on June 20, 2007. Capital Reserve amounting to Rs. 3,076,825 has been worked out based on the net assets value of the subsidiary as on June 20, 2007. Financial statements as at June 20, 2007 drawn by the management for this purpose have been audited by their statutory auditors.

4. Statement of Significant Accounting Policies

(a) Basis of preparation

The financial statements are prepared to comply in all material respects with the Notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the PVR Group and are consistent with those used in the previous year.

(b) Use of estimates

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 results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

(c) Fixed Assets

Fixed Assets are stated at Cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price (net of CENVAT) and any directly attributable cost of bringing the asset in its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

Leasehold improvements represent expenses incurred towards civil works, interior furnishings, etc. on the leased premises at the various locations.

(d) Goodwill

Goodwill represents the difference between the Parent Company’s share in the net worth of the Subsidiary Company and the cost of acquisition at the time of making the investment in the Subsidiary Company. For this purpose, the Parent Company’s share of net worth of the Subsidiary Company is determined on the basis of the latest financial statements of the Subsidiary Company prior to acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition.

(e) Depreciation

Leasehold Improvements are amortized over the estimated useful life or unexpired period of lease (whichever is lower) on a straight line basis.

Cost of structural improvements at premises where Parent Company has entered into agreement with the parties to operate and manage Multiscreen/Single Screen Cinemas on revenue sharing basis are amortized over the estimated useful life or lock in period of the agreement (whichever is lower) on a straight line basis.

Depreciation on all other assets is provided on Straight-Line Method at the rates computed based on estimated useful life of the assets, which are equal to the corresponding rates prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing Rs. 5,000 and below and fully depreciated over a period of one year in case of one of the subsidiary companies (0.06% of the Total Assets). In case of others, assets costing Rs. 5,000 and below are fully depreciated in the year of acquisition.

(f) Intangibles

Goodwill

Goodwill arising out of acquiring share in a Subsidiary Company is amortised pro-rata over a period of 5 years from the date of acquisition.

Software

Cost relating to purchased software’s is capitalised and is amortised on a Straight-Line Basis over their estimated useful lives of six years.

Software licenses costing Rs 5,000 and below are fully depreciated in the year of acquisition.

Film Rights’ Cost

The intellectual property rights acquired/created in relation to films are capitalised as film rights. The Subsidiary Company’s amortisation policy is as below:

(a) In respect of films which have been co-produced/co-owned/acquired and in which the Subsidiary Company holds rights for a period of 5 years and above as below :

- 60% of the cost of film rights on first domestic theatrical release of the film. The said amortisation relates to domestic theatrical rights, international theatrical rights, television rights, music rights and video rights.

In case these rights are not exploited along with or prior to the first domestic theatrical release, proportionate cost of such right is carried forward to be written off as and when such right is commercially exploited or at the end of 1 year from the date of first domestic theatrical release, whichever occurs earlier.

- Balance 40% is amortised over the remaining license period based on an estimate of future revenue potential subject to a maximum period of 10 years.

(b) In case where theatrical rights/satellite rights/home video rights are acquired (primarily for foreign films)

- 30% of the cost is amortised on domestic theatrical release of the movie.

- 40% of the cost amortised on the sale of Satellite rights.

- In cases where there is no theatrical release, 70% of the cost is amortised at time of sale of satellite rights.

- 20% of the cost is amortised on the sale of Home Video rights.

- balance 10% cost is amortised on the second sale of satellite rights.

(c) In case where theatrical rights/satellite rights/home video rights are acquired for a limited period of 1 to 5 years entire cost of movies rights acquired or produced by the Company, on first theatrical release of the movie. The said amortisation relates to domestic theatrical rights, international theatrical rights, television rights, music rights and video rights and others.

In case these rights are not exploited along with or prior to the first domestic theatrical release, proportionate cost of such right is carried forward to be written off as and when such right is commercially exploited or at the end of 1 year from the date of first theatrical release, whichever occurs earlier.

In case circumstances indicate that the realisable value of a right is less than its unamortised cost, an impairment loss is recognised for the excess of unamortised cost over the management’s estimate of film rights realisable value.

In respect of unreleased films, payments towards film rights are classified under capital advances.

(g) Leases

Where the PVR Group is the lessee

Finance leases, which effectively transfer to the PVR Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the PVR Group will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on an ongoing basis.

Where the PVR Group is the lessor

Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognised as revenue. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

110 111

(h) Expenditure on new projects and substantial expansion

Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent expenditure is related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period, which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is adjusted against the total of the indirect expenditure.

All direct capital expenditure on expansion is capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its originally assessed standard of performance.

(i) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

(j) Inventories

Inventories are valued as follows:

Food and beverages, goods Lower of cost and net realizable value. Cost is determined on First In First Out Basis. purchased for sale and cutlery

Stores and spares Lower of cost and net realizable value. Cost is determined on First In First Out Basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.

(k) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the PVR Group and the revenue can be reliably measured. Amount of entertainment tax, sales tax and service tax collected on generating operating revenue has been deducted from the respective operating revenue.

Sale of Tickets of Films

Revenue from sale of tickets of films is recognised as and when the film is exhibited.

Revenue Sharing

Income from revenue sharing is recognized in accordance with the terms of agreement with parties to operate and manage Multiscreen/ Single screen Cinemas, namely PVR EDM, PVR Lucknow, PVR Indore, PVR Mullund, PVR Ludhiana in coordinated manner.

Sale of Food and Beverages and Goods purchased for Sale

Revenue from sale of food and beverages and goods purchased for sale is recognised upon passage of title to customers, which coincides with their delivery.

Revenue from Bowling

Revenue from income from bowling is recognized as and when the games are played by patrons.

Income from Shoe Rental

Revenue from rental of shoes is recognised as and when shoes are given on rent.

Income from Theatrical Distribution

The revenue from theatrical distribution is recognized once the movie is released, based on “Daily collection Report” submitted by the Exhibitor.

Income from Film Distributio

Revenue from assignment of domestic theatrical exhibition rights of films is accounted for as per the terms of the assignment on the theatrical exhibition of the films or on the date of agreement to assign the rights, whichever is later.

Income from Production of Films

Revenues from film co –produced/co owned are accounted for based on the terms of the agreement.

Income from sale of all other rights other than film distribution

Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is recognized on the date when the rights are made available to the assignee for exploitation.

Advertisement Revenue

Advertisement revenue is recognised as and when advertisement is displayed at the cinema halls and bowling zones.

Royalty Income (to the extent of Pouring Fee, from customers) and Management Fee Revenue

Revenue is recognised on an accrual basis in accordance with the terms of the relevant agreements.

Convenience Fee

Convenience fee is recognized as and when the ticket is sold on the website of the Company.

Interest Income

Interest revenue is recognised on a time proportion basis, taking into account the amount outstanding and the rates applicable.

Dividend Income

Revenue is recognized where the shareholder’s right to receive payment is established by the balance sheet date.

(l) Foreign currency Translations

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

(m) Retirement and other employee benefits

i. Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.

ii. Gratuity is a defined benefit obligation. The parent company has created an approved gratuity fund for the future payment of gratuity to the employees. The PVR Group accounts for the gratuity liability, based upon the actuarial valuation performed in accordance with the Projected Unit Credit method carried out at the year end, by an independent actuary. Gratuity liability of an employee, who leaves the PVR Group before the close of the year and which is remaining unpaid, is provided on actual computation basis.

iii. Short term compensated absences are provided for on based on estimates. Long term compensated balances are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. Leave encashment liability of an employee, who leaves the PVR Group before the close of the year and which is remaining unpaid, is provided for on actual computation basis.

iv. Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(n) Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In case where the Concerned Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. Unrecognised deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Minimum Alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(o) Segment Reporting Polices

Identification of segments The PVR Group’s operating businesses are organized and managed separately according to the nature of products and services provided,

with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the PVR Group operate.

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

112 113

(h) Expenditure on new projects and substantial expansion

Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent expenditure is related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period, which is not related to the construction activity nor is incidental thereto is charged to the Profit and Loss Account. Income earned during construction period is adjusted against the total of the indirect expenditure.

All direct capital expenditure on expansion is capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its originally assessed standard of performance.

(i) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in the value is made to recognize a decline other than temporary in the value of the investments.

(j) Inventories

Inventories are valued as follows:

Food and beverages, goods Lower of cost and net realizable value. Cost is determined on First In First Out Basis. purchased for sale and cutlery

Stores and spares Lower of cost and net realizable value. Cost is determined on First In First Out Basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.

(k) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the PVR Group and the revenue can be reliably measured. Amount of entertainment tax, sales tax and service tax collected on generating operating revenue has been deducted from the respective operating revenue.

Sale of Tickets of Films

Revenue from sale of tickets of films is recognised as and when the film is exhibited.

Revenue Sharing

Income from revenue sharing is recognized in accordance with the terms of agreement with parties to operate and manage Multiscreen/ Single screen Cinemas, namely PVR EDM, PVR Lucknow, PVR Indore, PVR Mullund, PVR Ludhiana in coordinated manner.

Sale of Food and Beverages and Goods purchased for Sale

Revenue from sale of food and beverages and goods purchased for sale is recognised upon passage of title to customers, which coincides with their delivery.

Revenue from Bowling

Revenue from income from bowling is recognized as and when the games are played by patrons.

Income from Shoe Rental

Revenue from rental of shoes is recognised as and when shoes are given on rent.

Income from Theatrical Distribution

The revenue from theatrical distribution is recognized once the movie is released, based on “Daily collection Report” submitted by the Exhibitor.

Income from Film Distributio

Revenue from assignment of domestic theatrical exhibition rights of films is accounted for as per the terms of the assignment on the theatrical exhibition of the films or on the date of agreement to assign the rights, whichever is later.

Income from Production of Films

Revenues from film co –produced/co owned are accounted for based on the terms of the agreement.

Income from sale of all other rights other than film distribution

Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is recognized on the date when the rights are made available to the assignee for exploitation.

Advertisement Revenue

Advertisement revenue is recognised as and when advertisement is displayed at the cinema halls and bowling zones.

Royalty Income (to the extent of Pouring Fee, from customers) and Management Fee Revenue

Revenue is recognised on an accrual basis in accordance with the terms of the relevant agreements.

Convenience Fee

Convenience fee is recognized as and when the ticket is sold on the website of the Company.

Interest Income

Interest revenue is recognised on a time proportion basis, taking into account the amount outstanding and the rates applicable.

Dividend Income

Revenue is recognized where the shareholder’s right to receive payment is established by the balance sheet date.

(l) Foreign currency Translations

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. 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 and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise.

(m) Retirement and other employee benefits

i. Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.

ii. Gratuity is a defined benefit obligation. The parent company has created an approved gratuity fund for the future payment of gratuity to the employees. The PVR Group accounts for the gratuity liability, based upon the actuarial valuation performed in accordance with the Projected Unit Credit method carried out at the year end, by an independent actuary. Gratuity liability of an employee, who leaves the PVR Group before the close of the year and which is remaining unpaid, is provided on actual computation basis.

iii. Short term compensated absences are provided for on based on estimates. Long term compensated balances are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. Leave encashment liability of an employee, who leaves the PVR Group before the close of the year and which is remaining unpaid, is provided for on actual computation basis.

iv. Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(n) Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In case where the Concerned Company has unabsorbed depreciation or carry forward tax losses, entire deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. Unrecognised deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Minimum Alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(o) Segment Reporting Polices

Identification of segments The PVR Group’s operating businesses are organized and managed separately according to the nature of products and services provided,

with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the PVR Group operate.

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

112 113

Reve

nue

Mov

ie e

xhib

ition

M

ovie

pro

duct

ion

& D

istrib

utio

n Bo

wlin

g Al

leys

El

imin

atio

n To

tal

Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r

ende

d en

ded

ende

d en

ded

ende

d en

ded

ende

d en

ded

ende

d en

ded

Busin

ess S

egm

ent

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Inco

me

from

Ope

ratio

ns

2,9

02,7

00,2

22

2,36

0,76

7,11

6 72

1,15

5,81

3 35

9,38

2,19

8 5,

914,

451

- (1

08,6

73,2

99)

(60,

811,

201)

3,

521,

097,

187

2,65

9,33

8,11

3O

ther

Inco

me*

32

,766

,782

26

,817

,146

-

- -

- -

- 32

,766

,782

26

,817

,146

Tota

l Rev

enue

2,

935,

467,

004

2,38

7,58

4,26

2 72

1,15

5,81

3 35

9,38

2,19

8 5,

914,

451

- (1

08,6

73,2

99)

(60,

811,

201)

3,

553,

863,

969

2,68

6,15

5,25

9

Resu

ltsSe

gmen

t Res

ults

240,

056,

700

326,

566,

240

(81,

815,

068)

19

,083

,475

(5

,875

,627

) -

- -

152,

366,

005

345,

649,

715

Amor

tisat

ion

of G

oodw

ill

64

7,46

0 64

7,46

0In

tere

st Ex

pens

e

12

5,47

1,61

2 51

,438

,936

Divi

dend

Inco

me

and

Prof

it/(L

oss)

on sa

le of

curr

ent

inve

stmen

ts

73

,689

,449

23

,173

,422

Inte

rest

Inco

me

9,58

9,60

4 13

,650

,006

Prov

ision

for I

ncom

e Ta

x (in

cludi

ng W

ealth

Tax

, Fr

inge

Ben

efit

Tax,

an

d D

efer

red

Tax)

26

,181

,695

11

4,13

8,80

6

Net

Pro

fit

83

,344

,291

21

6,24

7,94

1

* To

tal O

ther

Inco

me

as p

er P

rofit

and

Loss

Acc

ount

is R

s. 11

6,04

5,83

5 (P

revio

us y

ear R

s. 63

,640

,574

) whi

ch in

clude

s Rs.

83,

279,

053,

(Pre

vious

yea

r Rs.

36,8

23,4

28) p

erta

inin

g to

Cor

pora

te O

ffice.

Oth

er In

form

atiio

nSe

gmen

t Ass

ets

3,72

7,81

9,18

0 3,

553,

562,

494

350,

080,

517

192,

784,

329

149,

557,

793

- (4

6,81

2,07

7)

(3,5

18,1

50)

4,18

0,64

5,41

3 3,

742,

828,

673

Una

lloca

ted

Asse

ts

1,

425,

121,

642

338,

158,

723

Tota

l Ass

ets

5,60

5,76

7,05

6 4,

080,

987,

396

Segm

ent L

iabilit

ies

590,

102,

714

464,

066,

482

41,8

98,3

18

50,1

11,1

60

46,9

10,0

46

- (4

6,81

2,07

7)

(3,5

18,1

50)

632,

099,

001

510,

659,

492

Una

lloca

ted

Liabi

lities

1,

678,

963,

459

1,46

0,67

8,45

2

Tota

l Liab

ilities

2,

311,

062,

460

1,97

1,33

7,94

4

Cap

ital E

xpen

ditu

re

460,

926,

242

789,

594,

701

152,

095,

051

144,

858,

102

136,

773,

282

- -

- 74

9,79

4,57

5 93

4,45

2,80

3D

epre

ciatio

n/Am

ortis

atio

n 20

9,43

0,01

3 15

0,98

9,69

9 14

2,59

6,31

0 18

,895

,550

71

8,78

0 -

- -

352,

745,

103

169,

885,

249

Goo

dwill

Dep

recia

tion

647,

460

647,

460

- -

- -

- -

647,

460

647,

460

Tota

l Dep

recia

tion

210,

077,

473

151,

637,

159

142,

596,

310

18,8

95,5

50

718,

780

- -

- 35

3,39

2,56

3 17

0,53

2,70

9Pr

ovisi

on fo

r Dou

btfu

l Deb

ts an

d ad

vanc

es

1,14

5,14

6 1,

273,

309

2,15

8,39

0 -

- -

- -

3,30

3,53

6 1,

273,

309

Rs.

Inter segment Transfers The PVR Group generally accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market

prices.

Unallocated items The unallocated items include general corporate income and expense items which are not allocated to any business segment.

(p) Provisions

A provision is recognised when the PVR Group has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best management estimate required to settle the obligation at each Balance Sheet date. These are reviewed at each Balance Sheet date and are adjusted to reflect the current best management estimates.

(q) Earning Per share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting dividend on preference shares and attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(r) Cash and Cash equivalents

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

(s) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Parent Company measures compensation cost relating to employee stock options using the fair value method. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

(t) Miscellaneous Expenditure (to the extent not written off)

Costs incurred on incorporation of a subsidiary company are amortized over a period of five (5) years, from the year of commencement of commercial operations.

5. Segment Information

Business Segments The PVR Group has organized its operations into three primary segments, Exhibition of Films, Distribution of Films, Income from Bowling

alleys, these have been identified taking into account the nature of activities carried out. The PVR Group’s operations predominantly relate to exhibition of films.

Costs directly attributable to either segment are accounted for in the respective segment.

The following table presents the revenue and profit information of the business segments for the year ended March 31, 2009 and March 31, 2008 and certain asset and liability information regarding business segments as at March 31, 2009 and March 31, 2008.

Notes to the Consolidated Accounts

114 115

Reve

nue

Mov

ie e

xhib

ition

M

ovie

pro

duct

ion

& D

istrib

utio

n Bo

wlin

g Al

leys

El

imin

atio

n To

tal

Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r Fo

r the

yea

r

ende

d en

ded

ende

d en

ded

ende

d en

ded

ende

d en

ded

ende

d en

ded

Busin

ess S

egm

ent

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

008

Inco

me

from

Ope

ratio

ns

2,9

02,7

00,2

22

2,36

0,76

7,11

6 72

1,15

5,81

3 35

9,38

2,19

8 5,

914,

451

- (1

08,6

73,2

99)

(60,

811,

201)

3,

521,

097,

187

2,65

9,33

8,11

3O

ther

Inco

me*

32

,766

,782

26

,817

,146

-

- -

- -

- 32

,766

,782

26

,817

,146

Tota

l Rev

enue

2,

935,

467,

004

2,38

7,58

4,26

2 72

1,15

5,81

3 35

9,38

2,19

8 5,

914,

451

- (1

08,6

73,2

99)

(60,

811,

201)

3,

553,

863,

969

2,68

6,15

5,25

9

Resu

ltsSe

gmen

t Res

ults

240,

056,

700

326,

566,

240

(81,

815,

068)

19

,083

,475

(5

,875

,627

) -

- -

152,

366,

005

345,

649,

715

Amor

tisat

ion

of G

oodw

ill

64

7,46

0 64

7,46

0In

tere

st Ex

pens

e

12

5,47

1,61

2 51

,438

,936

Divi

dend

Inco

me

and

Prof

it/(L

oss)

on sa

le of

curr

ent

inve

stmen

ts

73

,689

,449

23

,173

,422

Inte

rest

Inco

me

9,58

9,60

4 13

,650

,006

Prov

ision

for I

ncom

e Ta

x (in

cludi

ng W

ealth

Tax

, Fr

inge

Ben

efit

Tax,

an

d D

efer

red

Tax)

26

,181

,695

11

4,13

8,80

6

Net

Pro

fit

83

,344

,291

21

6,24

7,94

1

* To

tal O

ther

Inco

me

as p

er P

rofit

and

Loss

Acc

ount

is R

s. 11

6,04

5,83

5 (P

revio

us y

ear R

s. 63

,640

,574

) whi

ch in

clude

s Rs.

83,

279,

053,

(Pre

vious

yea

r Rs.

36,8

23,4

28) p

erta

inin

g to

Cor

pora

te O

ffice.

Oth

er In

form

atiio

nSe

gmen

t Ass

ets

3,72

7,81

9,18

0 3,

553,

562,

494

350,

080,

517

192,

784,

329

149,

557,

793

- (4

6,81

2,07

7)

(3,5

18,1

50)

4,18

0,64

5,41

3 3,

742,

828,

673

Una

lloca

ted

Asse

ts

1,

425,

121,

642

338,

158,

723

Tota

l Ass

ets

5,60

5,76

7,05

6 4,

080,

987,

396

Segm

ent L

iabilit

ies

590,

102,

714

464,

066,

482

41,8

98,3

18

50,1

11,1

60

46,9

10,0

46

- (4

6,81

2,07

7)

(3,5

18,1

50)

632,

099,

001

510,

659,

492

Una

lloca

ted

Liabi

lities

1,

678,

963,

459

1,46

0,67

8,45

2

Tota

l Liab

ilities

2,

311,

062,

460

1,97

1,33

7,94

4

Cap

ital E

xpen

ditu

re

460,

926,

242

789,

594,

701

152,

095,

051

144,

858,

102

136,

773,

282

- -

- 74

9,79

4,57

5 93

4,45

2,80

3D

epre

ciatio

n/Am

ortis

atio

n 20

9,43

0,01

3 15

0,98

9,69

9 14

2,59

6,31

0 18

,895

,550

71

8,78

0 -

- -

352,

745,

103

169,

885,

249

Goo

dwill

Dep

recia

tion

647,

460

647,

460

- -

- -

- -

647,

460

647,

460

Tota

l Dep

recia

tion

210,

077,

473

151,

637,

159

142,

596,

310

18,8

95,5

50

718,

780

- -

- 35

3,39

2,56

3 17

0,53

2,70

9Pr

ovisi

on fo

r Dou

btfu

l Deb

ts an

d ad

vanc

es

1,14

5,14

6 1,

273,

309

2,15

8,39

0 -

- -

- -

3,30

3,53

6 1,

273,

309

Rs.

Inter segment Transfers The PVR Group generally accounts for inter-segment sales and transfers as if the sales or transfers were to third parties at current market

prices.

Unallocated items The unallocated items include general corporate income and expense items which are not allocated to any business segment.

(p) Provisions

A provision is recognised when the PVR Group has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best management estimate required to settle the obligation at each Balance Sheet date. These are reviewed at each Balance Sheet date and are adjusted to reflect the current best management estimates.

(q) Earning Per share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting dividend on preference shares and attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(r) Cash and Cash equivalents

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

(s) Employee Stock Compensation Cost

Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Parent Company measures compensation cost relating to employee stock options using the fair value method. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis.

(t) Miscellaneous Expenditure (to the extent not written off)

Costs incurred on incorporation of a subsidiary company are amortized over a period of five (5) years, from the year of commencement of commercial operations.

5. Segment Information

Business Segments The PVR Group has organized its operations into three primary segments, Exhibition of Films, Distribution of Films, Income from Bowling

alleys, these have been identified taking into account the nature of activities carried out. The PVR Group’s operations predominantly relate to exhibition of films.

Costs directly attributable to either segment are accounted for in the respective segment.

The following table presents the revenue and profit information of the business segments for the year ended March 31, 2009 and March 31, 2008 and certain asset and liability information regarding business segments as at March 31, 2009 and March 31, 2008.

Notes to the Consolidated Accounts

114 115

6. R

elat

ed P

arty

Dis

clos

ure:

En

terp

rises

hav

ing

cont

rol

Kay

Man

agem

ent

Rela

tives

of k

ay

Ente

rpris

es o

wne

d or

G

rand

Tot

al

or s

igni

fican

t inf

luen

ce

Pers

onne

l M

anag

emen

t Per

sonn

el

signi

fican

tly in

fluen

ced

ov

er th

e Pa

rent

Com

pany

by

key

man

agem

ent

pers

onne

l or

thei

r

re

lativ

es

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

Tran

sact

ions

dur

ing

the

year

Com

pens

atio

n re

ceiv

ed to

war

dsco

mm

issio

n on

film

s

K Se

ra S

era

Prod

uctio

n Li

mite

d

-

-

-

-

-

-

-

451

,250

-

4

51,2

50

Rent

exp

ense

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

1

7,07

0,52

0

14,

009,

295

-

-

-

-

-

-

1

7,07

0,52

0

14,

009,

295

Leisu

re W

orld

Priv

ate

Lim

ited

-

-

-

-

-

-

1

7,84

1,61

9

14,

852,

000

1

7,84

1,61

9

14,

852,

000

Rem

uner

atio

n pa

id

Aj

ay B

ijli

-

-

14,

479,

200

9

,907

,200

-

-

-

-

1

4,47

9,20

0

9,9

07,2

00

Sanj

eev

Kum

ar

-

-

7,3

53,0

00

5,2

63,2

00

-

-

-

-

7,3

53,0

00

5,2

63,2

00

Inte

rim D

ivid

end

Paid

for

2005

-06

Bijli

Inve

stm

ents

Priv

ate

Lim

ited

-

4

,920

,068

-

-

-

-

-

-

-

4

,920

,068

Pr

iya

Exhi

bito

rs P

rivat

e Li

mite

d

-

4,3

30,0

00

-

-

-

-

-

-

-

4,3

30,0

00

Ajay

Bijli

-

-

-

1

00

-

-

-

-

-

100

Sa

njee

v Ku

mar

-

-

-

1

00

-

-

-

-

-

100

Sa

ndhu

ro R

ani

-

-

-

-

-

100

-

-

-

1

00

Sele

na B

ijli

-

-

-

-

-

100

-

-

-

1

00

Inte

rim D

ivid

end

Paid

for

2006

-07

Bijli

Inve

stm

ents

Priv

ate

Lim

ited

-

4

,920

,768

-

-

-

-

-

-

-

4

,920

,768

Pr

iya

Exhi

bito

rs P

rivat

e Li

mite

d

-

4,3

30,0

00

-

-

-

-

-

-

-

4,3

30,0

00

Ajay

Bijli

-

-

-

1

8,17

2

-

-

-

-

-

18,

172

Div

iden

d Pa

id o

n P

refe

renc

e Sh

ares

Ajay

Bijli

-

-

5

,321

,000

-

-

-

-

-

5

,321

,000

-

Adv

ance

Rec

eive

d ag

ains

t W

arra

nts

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

2

5,82

0,40

0

-

-

-

-

-

-

-

25,

820,

400

-

Rede

mpt

ion

of P

refe

renc

e Sh

are

Cap

ital

Aj

ay B

ijli

-

-

53,

210,

000

-

-

-

-

-

5

3,21

0,00

0

-

Loan

Rep

aid

Asho

k Ku

mar

Rui

a

-

-

-

1,3

65,0

00

-

-

-

-

-

1,3

65,0

00

Vika

s O

bero

i -

-

1

,504

,559

-

-

-

-

-

1

,504

,559

-

Th

e Ph

oeni

x M

ills L

imite

d

-

-

-

-

-

-

-

1,0

10,4

43

-

1,0

10,4

43

Loan

Rec

over

ed

PV

R Fa

ctor

y D

istrib

utio

n N

etw

ork

-

-

-

-

-

-

-

1

,033

,426

-

1

,033

,426

K

Sera

Ser

a Pr

oduc

tion

Lim

ited

-

-

-

-

-

-

-

1

,000

,000

-

1

,000

,000

Geographical segments The following is the distribution of the PVR Group Consolidated revenue by geographical markets, regardless of where the expenses against the same have been incurred.

March 31, 2009 March 31, 2008

Domestic Market 3,521,097,187 2,655,042,575Overseas Markets - 4,295,538

Total 3,521,097,187 2,659,338,113

The following table shows the carrying amount of debtors by geograhical marketDomestic Market 192,786,826 212,486,838Overseas Markets - -

Total 192,786,826 212,486,838

The Group has common fixed assets for providing services/selling goods to domestic as well as overseas markets. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished for geographical segments.

Notes to the Consolidated Accounts

116 117

6. R

elat

ed P

arty

Dis

clos

ure:

En

terp

rises

hav

ing

cont

rol

Kay

Man

agem

ent

Rela

tives

of k

ay

Ente

rpris

es o

wne

d or

G

rand

Tot

al

or s

igni

fican

t inf

luen

ce

Pers

onne

l M

anag

emen

t Per

sonn

el

signi

fican

tly in

fluen

ced

ov

er th

e Pa

rent

Com

pany

by

key

man

agem

ent

pers

onne

l or

thei

r

re

lativ

es

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

Tran

sact

ions

dur

ing

the

year

Com

pens

atio

n re

ceiv

ed to

war

dsco

mm

issio

n on

film

s

K Se

ra S

era

Prod

uctio

n Li

mite

d

-

-

-

-

-

-

-

451

,250

-

4

51,2

50

Rent

exp

ense

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

1

7,07

0,52

0

14,

009,

295

-

-

-

-

-

-

1

7,07

0,52

0

14,

009,

295

Leisu

re W

orld

Priv

ate

Lim

ited

-

-

-

-

-

-

1

7,84

1,61

9

14,

852,

000

1

7,84

1,61

9

14,

852,

000

Rem

uner

atio

n pa

id

Aj

ay B

ijli

-

-

14,

479,

200

9

,907

,200

-

-

-

-

1

4,47

9,20

0

9,9

07,2

00

Sanj

eev

Kum

ar

-

-

7,3

53,0

00

5,2

63,2

00

-

-

-

-

7,3

53,0

00

5,2

63,2

00

Inte

rim D

ivid

end

Paid

for

2005

-06

Bijli

Inve

stm

ents

Priv

ate

Lim

ited

-

4

,920

,068

-

-

-

-

-

-

-

4

,920

,068

Pr

iya

Exhi

bito

rs P

rivat

e Li

mite

d

-

4,3

30,0

00

-

-

-

-

-

-

-

4,3

30,0

00

Ajay

Bijli

-

-

-

1

00

-

-

-

-

-

100

Sa

njee

v Ku

mar

-

-

-

1

00

-

-

-

-

-

100

Sa

ndhu

ro R

ani

-

-

-

-

-

100

-

-

-

1

00

Sele

na B

ijli

-

-

-

-

-

100

-

-

-

1

00

Inte

rim D

ivid

end

Paid

for

2006

-07

Bijli

Inve

stm

ents

Priv

ate

Lim

ited

-

4

,920

,768

-

-

-

-

-

-

-

4

,920

,768

Pr

iya

Exhi

bito

rs P

rivat

e Li

mite

d

-

4,3

30,0

00

-

-

-

-

-

-

-

4,3

30,0

00

Ajay

Bijli

-

-

-

1

8,17

2

-

-

-

-

-

18,

172

Div

iden

d Pa

id o

n P

refe

renc

e Sh

ares

Ajay

Bijli

-

-

5

,321

,000

-

-

-

-

-

5

,321

,000

-

Adv

ance

Rec

eive

d ag

ains

t W

arra

nts

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

2

5,82

0,40

0

-

-

-

-

-

-

-

25,

820,

400

-

Rede

mpt

ion

of P

refe

renc

e Sh

are

Cap

ital

Aj

ay B

ijli

-

-

53,

210,

000

-

-

-

-

-

5

3,21

0,00

0

-

Loan

Rep

aid

Asho

k Ku

mar

Rui

a

-

-

-

1,3

65,0

00

-

-

-

-

-

1,3

65,0

00

Vika

s O

bero

i -

-

1

,504

,559

-

-

-

-

-

1

,504

,559

-

Th

e Ph

oeni

x M

ills L

imite

d

-

-

-

-

-

-

-

1,0

10,4

43

-

1,0

10,4

43

Loan

Rec

over

ed

PV

R Fa

ctor

y D

istrib

utio

n N

etw

ork

-

-

-

-

-

-

-

1

,033

,426

-

1

,033

,426

K

Sera

Ser

a Pr

oduc

tion

Lim

ited

-

-

-

-

-

-

-

1

,000

,000

-

1

,000

,000

Geographical segments The following is the distribution of the PVR Group Consolidated revenue by geographical markets, regardless of where the expenses against the same have been incurred.

March 31, 2009 March 31, 2008

Domestic Market 3,521,097,187 2,655,042,575Overseas Markets - 4,295,538

Total 3,521,097,187 2,659,338,113

The following table shows the carrying amount of debtors by geograhical marketDomestic Market 192,786,826 212,486,838Overseas Markets - -

Total 192,786,826 212,486,838

The Group has common fixed assets for providing services/selling goods to domestic as well as overseas markets. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished for geographical segments.

Notes to the Consolidated Accounts

116 117

Key Management Personnel Ajay Bijli, Sanjeev Kumar, Ashok Kumar Ruia, Atul Ruia and Vikas Oberoi (upto August 23, 2008)

Relatives of Key Management Personnel Sandhuro Rani and Selena Bijli

Enterprises having significant influence Bijli Investments Private Limited over the Parent Company Priya Exhibitors Private Limited

Enterprises owned or significantly influenced The Amritsar Transport Company Private Limitedby key management personnel or their ATC Carriers Private Limitedrelatives Leisure World Private Limited

The Phoenix Mills Limited Oberoi Malls Private Limited (upto August 23, 2008)NOTES:

a) * The Parent Company has availed loans from banks, a body corporate and Small Industries Development Bank of India (SIDBI) aggregating to Rs. 706,746,872 (Previous year Rs. 609,837,346) which are further secured by personal guarantee of two directors of the Parent Company. Term Loan from Punjab National Bank is further secured by second charge on all the movable and immovable assets namely current and movable fixed assets of PVR Phoenix, Mumbai of a subsidiary company. Loan from SIDBI is further secured by first charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi.

b) The above particulars exclude expenses reimbursed to/by related parties.

c) No amount has been provided as doubtful debt or advance/written off or written back in the year in respect of debts due from/to above related parties, except as disclosed above.

7. Security Deposits (paid) include Rs. 15,812,089 recoverable from three parties, with whom the Parent Company had entered into Memorandum of Understanding for taking multiplex/office space on rent. The Parent Company is in discussions with the parties for the recovery of the aforesaid amount and is hopeful of recovering the same. Hence, no provision against the same has been considered necessary.

8. Since the warrant holder of 1,200,000 warrants of the Parent Company has not exercised its option of subscribing to equity shares of the Parent Company within the stipulated period (i.e. by March 17, 2009) the Parent Company has forfeited the entire amount of upfront payment (i.e. Rs. 25,820,400) received against warrants and has transferred the same to Capital Reserve.

9. A sum of Rs. 44,204,329 is appearing as balance with excise authorities (shown in the Schedule of Loans and Advances) at year end of the Parent Company, the accounts of which are subject to reconciliation. Necessary adjustments, if any, which in the opinion of the management will not be material, will be made as and when the accounts are finally reconciled.

10. The subsidiary companies, PVR Pictures Limited, CR Retail Malls (India) Private Limited, Sunrise Infotainment Private Limited and PVR bluO Entertainment Limited has accounted for deferred tax assets (net) amounting to Rs. 27,483,622, Rs. 6,091,544, Rs. 13,459,991 and Rs. 1,514,767 respectively till March 31, 2009. The subsidiary companies are confident that subsequent realization of the deferred tax asset created is virtually certain in the near future based on future projections and existing business model.

11. a) During the year, a subsidiary company has made an allotment of 14,333,334 fully paid equity shares of Rs. 10.00 each at a premium of Rs. 73.72 per share on a private placement basis amounting to Rs. 1,200,000,000.

b) In accordance with the provisions of Section 78 of the Companies Act, 1956, the subsidiary company has applied amounts available in the securities premium account to offset expenses relating to issue of shares amounting to Rs. 26,887,308 (including Rs. 10,754,293 netted off from minority interest in Securities Premium of a subsidiary).

12.1 During the year ended March 31, 2006, the Parent Company had successfully completed its public issue. This comprised of 5,700,000 equity shares of Rs. 10 each at a premium of Rs. 215 per share. Alongwith this public issue, there was also a sale of 2,000,000 equity shares by a shareholder of the Parent Company i.e. Western India Trustee and Executor Company Limited (India Advantage Fund-I).

12.2 Utilization of IPO funds:

As per Prospectus Amount in Rs.

Objects Total Estimated Amount to be spent till Project Cost March 31, 2009

Setting up of New Cinemas 1,380,000,000 1,106,175,259

Equity Investment/ Unsecured Loan in CR Retail, a wholly owned subsidiary 300,000,000 406,425,000for setting up a Multiplex (Refer note iii below)

Equity Investment/ Unsecured Loan in PVR Pictures Ltd, a wholly 270,000,000 200,000,000owned subsidiary for Film Distribution/Production Business

Equity Investment/ Unsecured Loan in Sunrise Infotainment Private Ltd, a wholly - 248,425,000owned subsidiary for Setting up a multiplex (Refer note iii and iv below)

General Corporate Expenses (Refer note i below) 62,000,000 71,833,661

Issue Expenses (Refer note i below) 120,000,000 110,166,339

Total 2,132,000,000 2,143,025,259

Amount limited to the extent of purpose stated upto December 15, 2008 2,132,000,000 2,132,000,000

Gua

rant

ees

Take

n (P

erso

nal G

uara

ntee

s)

Aj

ay B

ijli

-

-

-

*

-

-

-

-

-

*

Sanj

eev

Kum

ar

-

-

-

*

-

-

-

-

-

*

Ass

ets

Mor

tgag

ed

Aj

ay B

ijli

-

-

-

*

-

-

-

-

-

*

Sanj

eev

Kum

ar

-

-

-

*

-

-

-

-

-

*

Bala

nce

outs

tand

ing

at th

e en

d of

the

year

Trad

e Pa

yabl

e

Pr

iya

Exhi

bito

rs P

rivat

e Li

mite

d

1,3

92,6

23

1,1

00,0

81

-

-

-

-

-

-

1,3

92,6

23

1,1

00,0

81

Ajay

Bijli

-

-

-

2

39,9

00

-

-

-

-

-

239

,900

Sa

njee

v Ku

mar

-

-

-

1

29,5

00

-

-

-

-

-

129

,500

Uns

ecur

ed L

oan

The

Phoe

nix

Mills

Lim

ited

-

-

-

-

-

-

3

0,00

0

30,

000

3

0,00

0

30,

000

Secu

rity

depo

sits

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

2

,500

,000

2

,500

,000

-

-

-

-

-

-

2

,500

,000

2

,500

,000

Le

isure

Wor

ld P

rivat

e Li

mite

d

-

-

-

-

-

-

2,4

00,0

00

2,4

00,0

00

2,4

00,0

00

2,4

00,0

00

Obe

roi M

all P

rivat

e Li

mite

d

-

-

-

-

-

-

52,

009,

052

-

5

2,00

9,05

2

-

Adv

ance

rec

eive

d ag

ains

t w

arra

nts

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

2

5,82

0,40

0

-

-

-

-

-

-

-

25,

820,

400

-

Gua

rant

ees

Take

n (P

erso

nal G

uara

ntee

s)

A

jay B

ijli

-

-

*

-

-

-

-

-

*

*

San

jeev

Kum

ar

-

-

*

-

-

-

-

-

*

*

Ass

ets

Mor

tgag

ed

A

jay B

ijli

-

-

*

-

-

-

-

-

*

*

Sanj

eev

Kum

ar

-

-

*

-

-

-

-

-

*

*

6. R

elat

ed P

arty

Dis

clos

ure:

(C

ontd

.)

En

terp

rises

hav

ing

cont

rol

Kay

Man

agem

ent

Rela

tives

of k

ay

Ente

rpris

es o

wne

d or

G

rand

Tot

al

or s

igni

fican

t inf

luen

ce

Pers

onne

l M

anag

emen

t Per

sonn

el

signi

fican

tly in

fluen

ced

ov

er th

e Pa

rent

Com

pany

by

key

man

agem

ent

pers

onne

l or

thei

r

re

lativ

es

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

***

Notes to the Consolidated Accounts

118 119

Key Management Personnel Ajay Bijli, Sanjeev Kumar, Ashok Kumar Ruia, Atul Ruia and Vikas Oberoi (upto August 23, 2008)

Relatives of Key Management Personnel Sandhuro Rani and Selena Bijli

Enterprises having significant influence Bijli Investments Private Limited over the Parent Company Priya Exhibitors Private Limited

Enterprises owned or significantly influenced The Amritsar Transport Company Private Limitedby key management personnel or their ATC Carriers Private Limitedrelatives Leisure World Private Limited

The Phoenix Mills Limited Oberoi Malls Private Limited (upto August 23, 2008)NOTES:

a) * The Parent Company has availed loans from banks, a body corporate and Small Industries Development Bank of India (SIDBI) aggregating to Rs. 706,746,872 (Previous year Rs. 609,837,346) which are further secured by personal guarantee of two directors of the Parent Company. Term Loan from Punjab National Bank is further secured by second charge on all the movable and immovable assets namely current and movable fixed assets of PVR Phoenix, Mumbai of a subsidiary company. Loan from SIDBI is further secured by first charge on personal properties of a director at Vasant Vihar and Jhandewalan, New Delhi.

b) The above particulars exclude expenses reimbursed to/by related parties.

c) No amount has been provided as doubtful debt or advance/written off or written back in the year in respect of debts due from/to above related parties, except as disclosed above.

7. Security Deposits (paid) include Rs. 15,812,089 recoverable from three parties, with whom the Parent Company had entered into Memorandum of Understanding for taking multiplex/office space on rent. The Parent Company is in discussions with the parties for the recovery of the aforesaid amount and is hopeful of recovering the same. Hence, no provision against the same has been considered necessary.

8. Since the warrant holder of 1,200,000 warrants of the Parent Company has not exercised its option of subscribing to equity shares of the Parent Company within the stipulated period (i.e. by March 17, 2009) the Parent Company has forfeited the entire amount of upfront payment (i.e. Rs. 25,820,400) received against warrants and has transferred the same to Capital Reserve.

9. A sum of Rs. 44,204,329 is appearing as balance with excise authorities (shown in the Schedule of Loans and Advances) at year end of the Parent Company, the accounts of which are subject to reconciliation. Necessary adjustments, if any, which in the opinion of the management will not be material, will be made as and when the accounts are finally reconciled.

10. The subsidiary companies, PVR Pictures Limited, CR Retail Malls (India) Private Limited, Sunrise Infotainment Private Limited and PVR bluO Entertainment Limited has accounted for deferred tax assets (net) amounting to Rs. 27,483,622, Rs. 6,091,544, Rs. 13,459,991 and Rs. 1,514,767 respectively till March 31, 2009. The subsidiary companies are confident that subsequent realization of the deferred tax asset created is virtually certain in the near future based on future projections and existing business model.

11. a) During the year, a subsidiary company has made an allotment of 14,333,334 fully paid equity shares of Rs. 10.00 each at a premium of Rs. 73.72 per share on a private placement basis amounting to Rs. 1,200,000,000.

b) In accordance with the provisions of Section 78 of the Companies Act, 1956, the subsidiary company has applied amounts available in the securities premium account to offset expenses relating to issue of shares amounting to Rs. 26,887,308 (including Rs. 10,754,293 netted off from minority interest in Securities Premium of a subsidiary).

12.1 During the year ended March 31, 2006, the Parent Company had successfully completed its public issue. This comprised of 5,700,000 equity shares of Rs. 10 each at a premium of Rs. 215 per share. Alongwith this public issue, there was also a sale of 2,000,000 equity shares by a shareholder of the Parent Company i.e. Western India Trustee and Executor Company Limited (India Advantage Fund-I).

12.2 Utilization of IPO funds:

As per Prospectus Amount in Rs.

Objects Total Estimated Amount to be spent till Project Cost March 31, 2009

Setting up of New Cinemas 1,380,000,000 1,106,175,259

Equity Investment/ Unsecured Loan in CR Retail, a wholly owned subsidiary 300,000,000 406,425,000for setting up a Multiplex (Refer note iii below)

Equity Investment/ Unsecured Loan in PVR Pictures Ltd, a wholly 270,000,000 200,000,000owned subsidiary for Film Distribution/Production Business

Equity Investment/ Unsecured Loan in Sunrise Infotainment Private Ltd, a wholly - 248,425,000owned subsidiary for Setting up a multiplex (Refer note iii and iv below)

General Corporate Expenses (Refer note i below) 62,000,000 71,833,661

Issue Expenses (Refer note i below) 120,000,000 110,166,339

Total 2,132,000,000 2,143,025,259

Amount limited to the extent of purpose stated upto December 15, 2008 2,132,000,000 2,132,000,000

Gua

rant

ees

Take

n (P

erso

nal G

uara

ntee

s)

Aj

ay B

ijli

-

-

-

*

-

-

-

-

-

*

Sanj

eev

Kum

ar

-

-

-

*

-

-

-

-

-

*

Ass

ets

Mor

tgag

ed

Aj

ay B

ijli

-

-

-

*

-

-

-

-

-

*

Sanj

eev

Kum

ar

-

-

-

*

-

-

-

-

-

*

Bala

nce

outs

tand

ing

at th

e en

d of

the

year

Trad

e Pa

yabl

e

Pr

iya

Exhi

bito

rs P

rivat

e Li

mite

d

1,3

92,6

23

1,1

00,0

81

-

-

-

-

-

-

1,3

92,6

23

1,1

00,0

81

Ajay

Bijli

-

-

-

2

39,9

00

-

-

-

-

-

239

,900

Sa

njee

v Ku

mar

-

-

-

1

29,5

00

-

-

-

-

-

129

,500

Uns

ecur

ed L

oan

The

Phoe

nix

Mills

Lim

ited

-

-

-

-

-

-

3

0,00

0

30,

000

3

0,00

0

30,

000

Secu

rity

depo

sits

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

2

,500

,000

2

,500

,000

-

-

-

-

-

-

2

,500

,000

2

,500

,000

Le

isure

Wor

ld P

rivat

e Li

mite

d

-

-

-

-

-

-

2,4

00,0

00

2,4

00,0

00

2,4

00,0

00

2,4

00,0

00

Obe

roi M

all P

rivat

e Li

mite

d

-

-

-

-

-

-

52,

009,

052

-

5

2,00

9,05

2

-

Adv

ance

rec

eive

d ag

ains

t w

arra

nts

Priy

a Ex

hibi

tors

Priv

ate

Lim

ited

2

5,82

0,40

0

-

-

-

-

-

-

-

25,

820,

400

-

Gua

rant

ees

Take

n (P

erso

nal G

uara

ntee

s)

A

jay B

ijli

-

-

*

-

-

-

-

-

*

*

San

jeev

Kum

ar

-

-

*

-

-

-

-

-

*

*

Ass

ets

Mor

tgag

ed

A

jay B

ijli

-

-

*

-

-

-

-

-

*

*

Sanj

eev

Kum

ar

-

-

*

-

-

-

-

-

*

*

6. R

elat

ed P

arty

Dis

clos

ure:

(C

ontd

.)

En

terp

rises

hav

ing

cont

rol

Kay

Man

agem

ent

Rela

tives

of k

ay

Ente

rpris

es o

wne

d or

G

rand

Tot

al

or s

igni

fican

t inf

luen

ce

Pers

onne

l M

anag

emen

t Per

sonn

el

signi

fican

tly in

fluen

ced

ov

er th

e Pa

rent

Com

pany

by

key

man

agem

ent

pers

onne

l or

thei

r

re

lativ

es

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

31st

Mar

, 09

31st

Mar

, 08

***

Notes to the Consolidated Accounts

118 119

NOTES:

i) The Board of Directors of the Parent Company have approved the inter-se re-allocation of unspent monies amounting to Rs. 9,833,661 from issue expenses to general corporate expenses.

ii) *** includes Rs. 1,282,500,000 raised through public issue of equity shares.iii) The Board of Directors of the Parent Company, in accordance with the rights given in the prospectus has in its meeting held on

November 18, 2008 ratified the funding of the projects with respect to Sunrise Infotainment Private Limited and CR Retail Malls (India) Private Limited, wholly owned subsidiaries of the Parent Company as per the details given above, out of the IPO proceeds.

13. Pursuant to the clarification by Central Board of Excise and Customs (CBEC) vide Circular No. File No. 137/72/2008-CX.4 dated November 21, 2008, that the accumulated CENVAT/Service Tax Credit upto March 31, 2008 can be utilized by the Parent Company for payment of output service tax without any restriction of time limit. The Parent Company has recognised such CENVAT/Service Tax credit amounting to Rs. 26,846,361 by crediting to the accounts of rent expenses by Rs. 20,692,168 and income from revenue sharing by Rs. 6,154,193.

14. The Parent Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective state governments. In the assessment orders for the Assessment Year 2006-07, the Parent Company’s contention that the amount of entertainment tax is a capital receipt, has been accepted during the year. Accordingly, treating the amount of entertainment tax exemption amounts as a capital receipt in respect of multiplexes in those states covered by the above orders, the Parent Company has re-computed its current income tax liability and deferred tax liability for the years ended March 31, 2006, 2007 and 2008. Provision for tax for the current year’s income tax and deferred tax has also been made on the same basis. As a result of above change, the current income tax charge is lower by Rs. 123,504,839 (including reversal of current income tax provision for earlier years aggregating to Rs. 80,558,256) and deferred tax charge is higher by Rs. 123,504,839 (including deferred tax charge for earlier years aggregating to Rs. 80,558,256).

15. The asset of Rs. 9,300,000 (Previous year Rs. Nil) recognised by the Parent Company as ‘MAT Credit Entitlement Account’ under ‘Loans and Advances’ represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management of the Parent Company, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Parent Company to utilize MAT credit assets.

16. During the year, the Parent Company had invested Equity Capital in PVR bluO Entertainment Limited on July 2, 2008. The aforesaid investment made by the Parent Company has the effect of increase in assets and liabilities and decrease in profit after tax by Rs. 158,484,189, Rs. 47,111,353 and Rs. 3,627,163 respectively in the consolidated financial statements.

17. Derivative Instruments and Unhedged Foreign Currency Exposure: Particulars of Unhedged Foreign Currency Exposure as at the Consolidated Balance Sheet date:

Amount in Respective currency

Particulars Currency March 31, 2009 March 31, 2008

Sundry Creditors Thai Bhat 8,800,497 Nil

USD 30,252 2,250

Income received in advance USD Nil 31,491

Capital Advances USD Nil 954,394

EURO Nil 11,730

Cash in Hand Bangkok Bhat 3,100 10,650

USD 9,532 Nil

Thai Bhat 3201 Nil

Hongkong Dollar 130 130

Sterling Pound 50 50

Singapore Dollar 100 100

18. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Particulars March 31, 2009 March 31, 2008 (Rs.) (Rs.) The principal amount and the interest due thereon remaining unpaid

to any supplier as at the end of each accounting year - Principal amount - - - Interest amount - -

The amount of interest paid by the buyer in terms of Section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year - -

The amount of interest due and payable for the period of delayin making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006. - -

The amount of interest accrued and remaining unpaid at the end of each accounting year; and - -

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006. - -

19. Gratuity plan: The PVR Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity

on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme for the Parent Company is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded/unfunded status and amounts recognized in the balance sheet for the gratuity plan.

Profit and Loss Account

Net employee benefit expense (recognized in Employee Cost)

Gratuity Gratuity Gratuity Gratuity

Funded Non Funded

2008-09 2007-08 2008-09 2007-08

Current service cost 3,722,017 1,898,733 571,632 809,760

Interest cost on benefit obligation 800,245 691,088 69,187 48,911

Expected return on plan assets (610,088) (380,249) - -

Add: Actual amount of gratuity payable to pending full and final settlements - 1,869,231 - -

Less: Transferred to pre-operative expenses - - (107,517) (207,242)

Net actuarial (gain)/loss recognized in the year 1,359,901 693,779 434,719 95,630

Net benefit expense 5,272,075 4,772,582 968,021 747,059

Actual return on plan asset (732,222) (828,777) - -

Balance sheet Details of Provision for gratuity are as follows:

Gratuity Gratuity Gratuity

Funded

2008-09 2007-08 2006-07

Defined benefit obligation 16,531,926 12,907,090 8,917,260

Fair value of plan assets (11,259,851) (8,134,508) (5,069,993)

Plan asset/(liability) (5,272,075) (4,772,582) (3,847,267)

Gratuity Gratuity Gratuity

Unfunded

2008-09 2007-08 2006-07

Defined benefit obligation 2,029,839 954,301 -

Fair value of plan assets - - -

Plan asset/(liability) (2,029,839) (954,301) -

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

120 121

NOTES:

i) The Board of Directors of the Parent Company have approved the inter-se re-allocation of unspent monies amounting to Rs. 9,833,661 from issue expenses to general corporate expenses.

ii) *** includes Rs. 1,282,500,000 raised through public issue of equity shares.iii) The Board of Directors of the Parent Company, in accordance with the rights given in the prospectus has in its meeting held on

November 18, 2008 ratified the funding of the projects with respect to Sunrise Infotainment Private Limited and CR Retail Malls (India) Private Limited, wholly owned subsidiaries of the Parent Company as per the details given above, out of the IPO proceeds.

13. Pursuant to the clarification by Central Board of Excise and Customs (CBEC) vide Circular No. File No. 137/72/2008-CX.4 dated November 21, 2008, that the accumulated CENVAT/Service Tax Credit upto March 31, 2008 can be utilized by the Parent Company for payment of output service tax without any restriction of time limit. The Parent Company has recognised such CENVAT/Service Tax credit amounting to Rs. 26,846,361 by crediting to the accounts of rent expenses by Rs. 20,692,168 and income from revenue sharing by Rs. 6,154,193.

14. The Parent Company is entitled to exemption from payment of entertainment tax in respect of some of its multiplexes, in accordance with the scheme of the respective state governments. In the assessment orders for the Assessment Year 2006-07, the Parent Company’s contention that the amount of entertainment tax is a capital receipt, has been accepted during the year. Accordingly, treating the amount of entertainment tax exemption amounts as a capital receipt in respect of multiplexes in those states covered by the above orders, the Parent Company has re-computed its current income tax liability and deferred tax liability for the years ended March 31, 2006, 2007 and 2008. Provision for tax for the current year’s income tax and deferred tax has also been made on the same basis. As a result of above change, the current income tax charge is lower by Rs. 123,504,839 (including reversal of current income tax provision for earlier years aggregating to Rs. 80,558,256) and deferred tax charge is higher by Rs. 123,504,839 (including deferred tax charge for earlier years aggregating to Rs. 80,558,256).

15. The asset of Rs. 9,300,000 (Previous year Rs. Nil) recognised by the Parent Company as ‘MAT Credit Entitlement Account’ under ‘Loans and Advances’ represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management of the Parent Company, based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Parent Company to utilize MAT credit assets.

16. During the year, the Parent Company had invested Equity Capital in PVR bluO Entertainment Limited on July 2, 2008. The aforesaid investment made by the Parent Company has the effect of increase in assets and liabilities and decrease in profit after tax by Rs. 158,484,189, Rs. 47,111,353 and Rs. 3,627,163 respectively in the consolidated financial statements.

17. Derivative Instruments and Unhedged Foreign Currency Exposure: Particulars of Unhedged Foreign Currency Exposure as at the Consolidated Balance Sheet date:

Amount in Respective currency

Particulars Currency March 31, 2009 March 31, 2008

Sundry Creditors Thai Bhat 8,800,497 Nil

USD 30,252 2,250

Income received in advance USD Nil 31,491

Capital Advances USD Nil 954,394

EURO Nil 11,730

Cash in Hand Bangkok Bhat 3,100 10,650

USD 9,532 Nil

Thai Bhat 3201 Nil

Hongkong Dollar 130 130

Sterling Pound 50 50

Singapore Dollar 100 100

18. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Particulars March 31, 2009 March 31, 2008 (Rs.) (Rs.) The principal amount and the interest due thereon remaining unpaid

to any supplier as at the end of each accounting year - Principal amount - - - Interest amount - -

The amount of interest paid by the buyer in terms of Section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year - -

The amount of interest due and payable for the period of delayin making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006. - -

The amount of interest accrued and remaining unpaid at the end of each accounting year; and - -

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006. - -

19. Gratuity plan: The PVR Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity

on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme for the Parent Company is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded/unfunded status and amounts recognized in the balance sheet for the gratuity plan.

Profit and Loss Account

Net employee benefit expense (recognized in Employee Cost)

Gratuity Gratuity Gratuity Gratuity

Funded Non Funded

2008-09 2007-08 2008-09 2007-08

Current service cost 3,722,017 1,898,733 571,632 809,760

Interest cost on benefit obligation 800,245 691,088 69,187 48,911

Expected return on plan assets (610,088) (380,249) - -

Add: Actual amount of gratuity payable to pending full and final settlements - 1,869,231 - -

Less: Transferred to pre-operative expenses - - (107,517) (207,242)

Net actuarial (gain)/loss recognized in the year 1,359,901 693,779 434,719 95,630

Net benefit expense 5,272,075 4,772,582 968,021 747,059

Actual return on plan asset (732,222) (828,777) - -

Balance sheet Details of Provision for gratuity are as follows:

Gratuity Gratuity Gratuity

Funded

2008-09 2007-08 2006-07

Defined benefit obligation 16,531,926 12,907,090 8,917,260

Fair value of plan assets (11,259,851) (8,134,508) (5,069,993)

Plan asset/(liability) (5,272,075) (4,772,582) (3,847,267)

Gratuity Gratuity Gratuity

Unfunded

2008-09 2007-08 2006-07

Defined benefit obligation 2,029,839 954,301 -

Fair value of plan assets - - -

Plan asset/(liability) (2,029,839) (954,301) -

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

120 121

Change in the present value of the defined benefit obligation are as follows:

Gratuity Gratuity Gratuity Gratuity

Funded Non Funded

2008-09 2007-08 2008-09 2007-08

Opening defined benefit obligation 12,907,090 8,917,260 954,301 -

Interest cost 800,245 691,088 69,187 48,911

Current service cost 3,722,017 1,898,733 571,632 809,760

Benefits paid (2,379,461) (1,611,529) - -

Actuarial losses on obligation 1,482,035 1,142,307 434,719 95,630

Add: Actual amount of gratuity payable to pending full and final settlements - 1,869,231 - -

Closing defined benefit obligation 16,531,926 12,907,090 2,029,839 954,301

Changes in the fair value of plan assets are as follows:

Gratuity Gratuity

2008-09 2007-08

Opening fair value of plan assets 8,134,508 5,069,993

Expected return 610,088 380,249

Contributions by employer 4,772,582 3,847,267

Benefits paid (2,379,461) (1,611,529)

Actuarial gain/(losses) 122,134 448,528

Closing fair value of plan assets 11,259,851 8,134,508

The Parent Company expects to contribute Rs. 5,272,075 to gratuity fund in the year 2009-2010.

The major categories of plan assets as a percentage of the fair value of total plan assets of the Parent Company are as follows:

Gratuity Gratuity

2008-09 2007-08

% %

Investments with insurer 97.14 92.79

Bank balances with the insurer 2.86 7.21

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The principal assumptions used in determining gratuity obligations for the PVR Group’s plans are shown below:

Gratuity Gratuity

2008-09 2007-08

% %

Discount rate 7.25 7.75

Expected rate of return on plan assets 7.50 7.50

Increase in compensation cost 5.00 5.50

Employee turnover

upto 30 years 25 25

above 30 years but upto 44 years 15 15

above 44 years 10 10

a) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

b) Information relating to experience adjustment in the actual valuation of gratuity as required by Para 120 (n)(ii) of the Accounting Standard 15 (Revised) on Employee Benefits is not available with the PVR Group.

c) The current year being only the third year of adoption of AS-15 (Revised) by the PVR Group, disclosure as required by Para 120(n) of Ac-counting Standard 15 (Revised) have been furnished only for the previous two years and not for the two years prior to that.

Defined Contribution Plan: 2008-09 2007-08

Contribution to Provident Fund:

- Charged to Profit and Loss Account 19,378,606 13,837,852

- Charged to Pre-operative expenses 1,160,887 1,078,300

20. Employee Stock Option Plans:

The Parent Company has provided stock option scheme to its employees on fair value method. The fair value has been determined based on the market price of the equity share listed on the stock exchange i.e. Rs. 88. During the year ended March 31, 2009, the following scheme is in operation:

PVR ESOS 2008

Date of grant January 30, 2009

Date of Shareholder’s approval January 5, 2009

Date of Board Approval January 30, 2009

Number of options granted 500,000

Method of Settlement (Cash/Equity) Cash

Vesting Period Not less than one year and not more than ten years from the date of grant of options

Exercise Period Within a period of two years from the date of vesting

Vesting Conditions Subject to continued employment with the Company. Further, Compensation Committee may also specify certain performance parameters subject to which options would vest.

The details of activity under PVR ESOS 2008 have been summarized below:

Year ended March 31, 2009

Number of options

Outstanding at the beginning of the year -

Granted during the year 500,000

Forfeited during the year -

Exercised during the year -

Expired during the year -

Outstanding at the end of the year 500,000

Exercisable at the end of the year -

Weighted average fair value of options granted on the date of grant 37.10

The options have not yet been vested by the Parent Company, as a result the average remaining contractual life of the options is not determinable as on March 31, 2009. As mentioned above, the options have been granted on market price of Rs. 88 and options have not been vested upto March 31, 2009. As a result, there is no expense to be recorded in the financial statements.

21. Leasesi) Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss Account and Pre-Operative Expenditure

(pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

a) The PVR Group has taken various cinemas, multiplexes, offices and godown premises under operating lease agreements. These are generally renewable at the option of the PVR Group. The management of the PVR Group based on valuation done by independent valuation experts, has allocated rent into two parts i.e. rent paid for use of land and building separately. The impact of straight lining of lease rent as required by the Accounting Standard 19 on Leases, for use of building does not have material impact on profit for the current year. As a result of this computation, a sum of Rs. 15,608,885 provided till last year by the Parent Company has been reversed to rent expense during the year.

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

122 123

Change in the present value of the defined benefit obligation are as follows:

Gratuity Gratuity Gratuity Gratuity

Funded Non Funded

2008-09 2007-08 2008-09 2007-08

Opening defined benefit obligation 12,907,090 8,917,260 954,301 -

Interest cost 800,245 691,088 69,187 48,911

Current service cost 3,722,017 1,898,733 571,632 809,760

Benefits paid (2,379,461) (1,611,529) - -

Actuarial losses on obligation 1,482,035 1,142,307 434,719 95,630

Add: Actual amount of gratuity payable to pending full and final settlements - 1,869,231 - -

Closing defined benefit obligation 16,531,926 12,907,090 2,029,839 954,301

Changes in the fair value of plan assets are as follows:

Gratuity Gratuity

2008-09 2007-08

Opening fair value of plan assets 8,134,508 5,069,993

Expected return 610,088 380,249

Contributions by employer 4,772,582 3,847,267

Benefits paid (2,379,461) (1,611,529)

Actuarial gain/(losses) 122,134 448,528

Closing fair value of plan assets 11,259,851 8,134,508

The Parent Company expects to contribute Rs. 5,272,075 to gratuity fund in the year 2009-2010.

The major categories of plan assets as a percentage of the fair value of total plan assets of the Parent Company are as follows:

Gratuity Gratuity

2008-09 2007-08

% %

Investments with insurer 97.14 92.79

Bank balances with the insurer 2.86 7.21

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The principal assumptions used in determining gratuity obligations for the PVR Group’s plans are shown below:

Gratuity Gratuity

2008-09 2007-08

% %

Discount rate 7.25 7.75

Expected rate of return on plan assets 7.50 7.50

Increase in compensation cost 5.00 5.50

Employee turnover

upto 30 years 25 25

above 30 years but upto 44 years 15 15

above 44 years 10 10

a) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

b) Information relating to experience adjustment in the actual valuation of gratuity as required by Para 120 (n)(ii) of the Accounting Standard 15 (Revised) on Employee Benefits is not available with the PVR Group.

c) The current year being only the third year of adoption of AS-15 (Revised) by the PVR Group, disclosure as required by Para 120(n) of Ac-counting Standard 15 (Revised) have been furnished only for the previous two years and not for the two years prior to that.

Defined Contribution Plan: 2008-09 2007-08

Contribution to Provident Fund:

- Charged to Profit and Loss Account 19,378,606 13,837,852

- Charged to Pre-operative expenses 1,160,887 1,078,300

20. Employee Stock Option Plans:

The Parent Company has provided stock option scheme to its employees on fair value method. The fair value has been determined based on the market price of the equity share listed on the stock exchange i.e. Rs. 88. During the year ended March 31, 2009, the following scheme is in operation:

PVR ESOS 2008

Date of grant January 30, 2009

Date of Shareholder’s approval January 5, 2009

Date of Board Approval January 30, 2009

Number of options granted 500,000

Method of Settlement (Cash/Equity) Cash

Vesting Period Not less than one year and not more than ten years from the date of grant of options

Exercise Period Within a period of two years from the date of vesting

Vesting Conditions Subject to continued employment with the Company. Further, Compensation Committee may also specify certain performance parameters subject to which options would vest.

The details of activity under PVR ESOS 2008 have been summarized below:

Year ended March 31, 2009

Number of options

Outstanding at the beginning of the year -

Granted during the year 500,000

Forfeited during the year -

Exercised during the year -

Expired during the year -

Outstanding at the end of the year 500,000

Exercisable at the end of the year -

Weighted average fair value of options granted on the date of grant 37.10

The options have not yet been vested by the Parent Company, as a result the average remaining contractual life of the options is not determinable as on March 31, 2009. As mentioned above, the options have been granted on market price of Rs. 88 and options have not been vested upto March 31, 2009. As a result, there is no expense to be recorded in the financial statements.

21. Leasesi) Rental expenses in respect of operating leases are recognized as an expense in the Profit and Loss Account and Pre-Operative Expenditure

(pending allocation), as the case may be.

Operating Lease (for assets taken on lease)

a) The PVR Group has taken various cinemas, multiplexes, offices and godown premises under operating lease agreements. These are generally renewable at the option of the PVR Group. The management of the PVR Group based on valuation done by independent valuation experts, has allocated rent into two parts i.e. rent paid for use of land and building separately. The impact of straight lining of lease rent as required by the Accounting Standard 19 on Leases, for use of building does not have material impact on profit for the current year. As a result of this computation, a sum of Rs. 15,608,885 provided till last year by the Parent Company has been reversed to rent expense during the year.

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

122 123

Disclosure for properties under non cancellable leases, where the PVR Group is carrying commercial operations is as under:

For the year ended For the year ended March 31, 2009 March 31, 2008 (Amount in Rs.) (Amount in Rs.)

Lease payments for the year recognized in Profit and Loss Account 439,132,433 322,628,567

Lease payments for the year recognized in Preoperative Expenditure 12,148,518 5,889,892

Minimum Lease Payments :

Not Later than one year 361,649,612 214,290,645

Later than one year but not later than five years 1,206,296,394 643,584,668

Later than five years 505,738,232 218,254,847

ii) Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the Profit and Loss Account and netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

a) The PVR Group has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

For the year ended For the year ended March 31, 2009 March 31, 2008 (Amount in Rs.) (Amount in Rs.)

Lease rent receipts for the year recognized in Profit and Loss Account 69,225,141 36,552,288

Lease rent receipts for the year recognized in Preoperative Expenditure 3,320,141 -

Minimum Lease Rent Receipts :

Not Later than one year - 12,392,093

Later than one year but not later than five years - -

Later than five years - -

b) The PVR Group has given spaces of cinemas/food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The PVR Group has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

March 31, 2009 March 31, 2008 (Rs.) (Rs.)22. Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances). 68,834,789 729,035,151

23. Contingent Liabilities (not provided for) in respect of:

a) Labour cases pending* Amount not Amount not ascertainable ascertainable

b) Claims against the Parent Company not acknowledged as debts (including Rs. 3,596,441, Previous year Rs. 3,128,441paid under protest which is appearing in the Schedule of Loans and Advances)** 3,596,441 3,128,441

c) Claims against the subsidiary company not acknowledged as debts*** 175,000,000 Nil

d) Counter Guarantee given to a bank for the bank guarantee furnished to office of the Additional Collector, Mumbai Subarban district, (Entertainment Tax Authority) by a subsidiary company. 62,500,000 -

e) Show cause notices raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on invoices and excess utilisation of Cenvat credit (the Parent Company has paid an amount of Rs. 1,080,361 which is appearing in the Schedule of Loans and Advances).** 20,252,588 -

f) Appeal filed by the Parent Company with Commissioner of Income Tax (Appeals) against relief claimed in appeal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2006. The said amount has already been paid and is appearing in the Schedule of Loans and Advances** 3,672,879 -

g) The Honorable High Court of Delhi, vide judgment dated April 18, 2009 in the case of Home Solution Retail India Limited and others Vs Union of India, has held that renting of immovable property by itself is not a service and accordingly the levy of service tax on activity of renting immovable property is “ultra vires” the Finance Act, 1994. In view of this judgement, the service tax on renting of immovable property to the extent amount not paid to the landlords has not been provided during the year by the Parent Company and a subsidiary company.** 37,303,078 -

* In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case.

** Based on the discussions with the solicitors/meeting the terms and conditions by the PVR Group, the management believes that the PVR Group has a strong chance of success in the cases and hence no provision there-against is considered necessary.

*** A subsidiary company has filed arbitration proceedings for recoveries of an advance of Rs. 35,100,000 paid to a Movie Production Company (MPC) for production of movies due to non-fulfillment of the terms of the agreement. In addition the subsidiary company has filed a claim of Rs. 120,000,000 towards loss suffered due to breaches by MPC. During the course of proceedings, MPC has filed a counter claim of Rs. 175,000,000 for loss of business and reputation which is being contested by the subsidiary company before the arbitrator. The uncertainities and possible reimbursements are dependent on the legal process and therefore cannot be predicted accurately.

24. The members of the Parent Company in the Annual General Meeting held on September 30, 2008, accorded their approval under Section 314 of the Companies Act, 1956, for the continuation of availment of professional services of Mr. R.K. Sinha (a director of the Parent Company and a subsidiary company) as an advisor (not in employment) to the Parent Company. The Parent Company has during the year paid Rs. 2,400,000 to him, which is appearing under Professional charges in the Schedule 22. The Parent Company has filed an application under Section 309(1)(b) of the Companies Act, 1956 before the Central Government for its opinion to confirm that Mr. R.K. Sinha is a professional director and possesses the requisite professional qualification. The opinion of the Central Government in the said matter is awaited.

25. Previous Year Comparatives

(a) The Parent Company and its subsidiaries has during the year, started commercial operations at Ambience Mall, Ambience Food Court, Chandigarh, Phoenix Mills Limited, Mumbai and Oberoi Malls, Mumbai. Hence, current year’s figures are not strictly comparable with those of previous year.

(b) PVR bluO Entertainment Limited (subsidiary of the Parent Company) has commenced its commercial operations w.e.f. March 12, 2009. Hence current year’s figures are not strictly comparable with those of previous year.

(c) Previous year’s figures have been regrouped where necessary to conform to current year’s classification.

Signatures to Schedule 1 to 26

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

124 125

Disclosure for properties under non cancellable leases, where the PVR Group is carrying commercial operations is as under:

For the year ended For the year ended March 31, 2009 March 31, 2008 (Amount in Rs.) (Amount in Rs.)

Lease payments for the year recognized in Profit and Loss Account 439,132,433 322,628,567

Lease payments for the year recognized in Preoperative Expenditure 12,148,518 5,889,892

Minimum Lease Payments :

Not Later than one year 361,649,612 214,290,645

Later than one year but not later than five years 1,206,296,394 643,584,668

Later than five years 505,738,232 218,254,847

ii) Rental income/Sub-Lease income in respect of operating leases are recognized as an income in the Profit and Loss Account and netted off from rent expense, as the case may be.

Operating Lease (for assets given on lease)

a) The PVR Group has given various spaces under operating lease agreements. These are generally cancellable on mutual consent and the lessee can vacate the rented property at any time. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

For the year ended For the year ended March 31, 2009 March 31, 2008 (Amount in Rs.) (Amount in Rs.)

Lease rent receipts for the year recognized in Profit and Loss Account 69,225,141 36,552,288

Lease rent receipts for the year recognized in Preoperative Expenditure 3,320,141 -

Minimum Lease Rent Receipts :

Not Later than one year - 12,392,093

Later than one year but not later than five years - -

Later than five years - -

b) The PVR Group has given spaces of cinemas/food courts under operating lease arrangements taken on lease or being operated under revenue sharing arrangements. The PVR Group has common fixed assets for operating multiplex/giving on rent. Hence separate figures for the fixed assets given on rent are not ascertainable.

March 31, 2009 March 31, 2008 (Rs.) (Rs.)22. Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances). 68,834,789 729,035,151

23. Contingent Liabilities (not provided for) in respect of:

a) Labour cases pending* Amount not Amount not ascertainable ascertainable

b) Claims against the Parent Company not acknowledged as debts (including Rs. 3,596,441, Previous year Rs. 3,128,441paid under protest which is appearing in the Schedule of Loans and Advances)** 3,596,441 3,128,441

c) Claims against the subsidiary company not acknowledged as debts*** 175,000,000 Nil

d) Counter Guarantee given to a bank for the bank guarantee furnished to office of the Additional Collector, Mumbai Subarban district, (Entertainment Tax Authority) by a subsidiary company. 62,500,000 -

e) Show cause notices raised by Service tax Commissionerate, New Delhi for non-levy of Service tax on invoices and excess utilisation of Cenvat credit (the Parent Company has paid an amount of Rs. 1,080,361 which is appearing in the Schedule of Loans and Advances).** 20,252,588 -

f) Appeal filed by the Parent Company with Commissioner of Income Tax (Appeals) against relief claimed in appeal with regard to certain expenses disallowed by the assessing officer in respect of financial year ended March 31, 2006. The said amount has already been paid and is appearing in the Schedule of Loans and Advances** 3,672,879 -

g) The Honorable High Court of Delhi, vide judgment dated April 18, 2009 in the case of Home Solution Retail India Limited and others Vs Union of India, has held that renting of immovable property by itself is not a service and accordingly the levy of service tax on activity of renting immovable property is “ultra vires” the Finance Act, 1994. In view of this judgement, the service tax on renting of immovable property to the extent amount not paid to the landlords has not been provided during the year by the Parent Company and a subsidiary company.** 37,303,078 -

* In view of the large number of cases pending at various forums/courts, it is not practicable to furnish the details of each case.

** Based on the discussions with the solicitors/meeting the terms and conditions by the PVR Group, the management believes that the PVR Group has a strong chance of success in the cases and hence no provision there-against is considered necessary.

*** A subsidiary company has filed arbitration proceedings for recoveries of an advance of Rs. 35,100,000 paid to a Movie Production Company (MPC) for production of movies due to non-fulfillment of the terms of the agreement. In addition the subsidiary company has filed a claim of Rs. 120,000,000 towards loss suffered due to breaches by MPC. During the course of proceedings, MPC has filed a counter claim of Rs. 175,000,000 for loss of business and reputation which is being contested by the subsidiary company before the arbitrator. The uncertainities and possible reimbursements are dependent on the legal process and therefore cannot be predicted accurately.

24. The members of the Parent Company in the Annual General Meeting held on September 30, 2008, accorded their approval under Section 314 of the Companies Act, 1956, for the continuation of availment of professional services of Mr. R.K. Sinha (a director of the Parent Company and a subsidiary company) as an advisor (not in employment) to the Parent Company. The Parent Company has during the year paid Rs. 2,400,000 to him, which is appearing under Professional charges in the Schedule 22. The Parent Company has filed an application under Section 309(1)(b) of the Companies Act, 1956 before the Central Government for its opinion to confirm that Mr. R.K. Sinha is a professional director and possesses the requisite professional qualification. The opinion of the Central Government in the said matter is awaited.

25. Previous Year Comparatives

(a) The Parent Company and its subsidiaries has during the year, started commercial operations at Ambience Mall, Ambience Food Court, Chandigarh, Phoenix Mills Limited, Mumbai and Oberoi Malls, Mumbai. Hence, current year’s figures are not strictly comparable with those of previous year.

(b) PVR bluO Entertainment Limited (subsidiary of the Parent Company) has commenced its commercial operations w.e.f. March 12, 2009. Hence current year’s figures are not strictly comparable with those of previous year.

(c) Previous year’s figures have been regrouped where necessary to conform to current year’s classification.

Signatures to Schedule 1 to 26

As per our report of even date

For S. R. Batliboi & Co. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Chartered Accountants

Ajay Bijli Sanjeev Kumar (Chairman cum Managing Director) (Joint Managing Director)

per Anil Gupta N. C. Gupta Nitin Sood Sanjay KhannaPartner (Company Secretary) (Chief Financial Officer) (Director) Membership No 87921

Place : GurgaonDate : May 29, 2009

Notes to the Consolidated AccountsNotes to the Consolidated Accounts

124 125

(Rs.)

Names of the Subsidiaries SI. PVR Pictures Limited C..R. Retail Malls (India) Pvt. Ltd Sunrise Infotainment Pvt Ltd. PVR bluO Entertainment Limited

No. 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08

1. Capital 358,333,340 215,000,000 2,00,000,000 200,000,000 100,000,000 100,000,000 115,000,000 - 2. Reserve & Surplus 1,039,973,495 8,611,046 - -530,565 - 2,936,870 -3,627,163 - 3. Total Assets 330,665,512 271,741,027 876,668,980 680,131,936 222,862,212 191,336,870 108,268,205 - ( Fixed Assets+ Current Assets)4. Total Liabilities 1,900,000 50,000,000 902,538,332 698,141,647 160,400,000 98,400,000 - - 5. Investments 1,042,057,701 - 7,000,000 17,479,147 - 10,000,000 3,104,632 - (except in Case of Investment in Subsidiary Company)”6. Turnover 781,970,335 369,416,054 43,473,366 1,502,293 146,275,945 1,324,379 6,774,606 - 7. Profit Before Tax -23,380,156 13,023,374 -17,921,576 1,474,203 -39,599,855 470,619 -5,041,930 - 8. Provision for Tax 24,963,253 5,427,401 5,995,859 275,000 13,322,662 -470,588 -1,414,767 - 9. Profit After Tax 1,583,097 7,595,973 -11,925,717 1,199,203 -26,277,193 31 -3,627,163 - 10. Proposed Dividend - - - - - - - -

Summarised Financial Statements of Subsidiaries for the fi nancial year ended 31.03.09

126

Designed by Nicholas Hoffland Design

Printed at Thomson Press, India

ANNUAL REPORT 2008-09