annual report 2010-11 - moneycontrol.com01 incorporated in 1993, era e-zone (india) ltd. represents...

ANNUAL REPORT 2010-11

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01 Introduction

02 Chairman’s Letter

06 Corporate Information

07 Notice

13 Directors’ Report

16 Management Discussion and Analysis

20 Corporate Governance Report

34 Auditors’ Report

38 Financials

52 Consolidated Auditors’ Report

53 Consolidated Financials

66 Statement Pursuant to Section 212

CONTENTS

01

Incorporated in 1993, Era E-Zone (India) Ltd. represents the entertainment and hospitality arm of Era Group. Era E-Zone has been conceptualised with the single-minded objective of addressing the entertainment and recreation needs comprising cinemas, food courts, hotels & resorts and facility management with a differentiated approach that stands out for distinctive leisure.

Era E-Zone is among the few Indian companies to pioneer the delivery of a complete entertainment solution (multiplexes and food courts) in the fast maturing and evolving cities & towns.

Introduction

02

Withandoperational across Meerut, Ajmer andJaipur, we have redefined thecinematic experience in the smaller cities.

“

Chairman's Letter

03

The Media and Entertainment (M&E) industry is one of the fastest growing sectors in India. Poised to grow at a compounded rate of 14% to touch USD 28 billion by 2015, the sector registered a growth of 11% in 2010, garnering USD 14.54 billion in revenue.

Increasing investments by the private sector, foreign media and entertainment majors have enhanced India's entertainment infrastructure. Producing more than 1,000 films annually, India is the largest producer of films in the world. The Indian film industry is projected to touch `136.5 billion in 2015 from `87.5 billion in 2010, growing at a CAGR of 9.3% over the next five years.

Let me take you through some highlights in the business space that your Company operates in.

MULTIPLEX BOOM

Not too long ago, watching a movie in India mostly meant standing in long lines for tickets to spend three hours in a stuffy hall with bug-infested seats, a creaky sound system and a

screen sewn up to hide holes. Today, scores of multiplexes have mushroomed in cities across the country, bringing with them online or phone booking of tickets, perfumed auditoria, plush bucket seats and state-of-the-art audio and projection systems. As in metros, in smaller towns too it is the retail boom that's mostly driving the multiplex story. Mall developers all over the country are wooing multiplexes to occupy their top floors as anchor tenants who would ensure footfalls. The arrival of the mall syndrome has accelerated the growth of cineplexes as multiplexes are the anchor tenants in most of these malls.

India's multiplex bandwagon has gone beyond the metros to redefine entertainment in B and C class towns. We, at Era Cinemas follow the same strategy. With 3 cinemas and 7 screens operational across Meerut, Ajmer and Jaipur, we have redefined the cinematic experience in the smaller cities.

Going ahead, a report by KPMG and FICCI states that this industry which currently has approximately 1000 multiplex screens is likely to double its screen count over the next 5 years. This multiplex growth is expected to be the key driving force for the growth of Indian film industry.

Dear Shareholders,

FOOD COURTS

Food courts today are a tool to increase the time people spend at the mall and drive business to other stores in the mall. The fact that good food at malls results in better profits is a given fact. Introducing different cuisines apart from the traditional ones will mean an added cost but the return will be far better. Mall developers were earlier selling space to stores but now lease it out, run the food courts and promote them. All these drive visitors to stores and increase mall revenues. The secret to increased footfalls lies in the taste buds of the customers.

Following the trend your Company's food court - Era Food Zone is operational at the Era Mall, Meerut with a seating capacity of 200 people. Your Company undertakes several marketing initiatives to promote the same.

04

this direction, we have already incorporated the necessary amendments in the objects of the Company. With exciting growth potential waiting to be unlocked, we are confident that our combination of innovative strategy and fundamental approach will help us deliver exceptional value. Lastly, on a parting note I would like to thank all my colleagues for their valued contributions during the past year, our Board of Directors for their continued guidance and our stakeholders for their continued patronage.

H.S. Bharana Chairman

FUTURE PROSPECTS

Changing lifestyles, retail boom and increasing consumerism have been the key growth drivers for the entertainment industry. As per PWC’s latest report titled India Entertainment & Media Outlook 2011, the Indian Entertainment and Media (E&M) industry is slated to continue its double-digit growth trajectory in 2011. Entertainment activities are expected to be major areas of growth in the coming future.

To capitalize on these booming opportunities your Company continues to focus on the development and operation of:

lMultiplexes and Cineplexesl Food Court

Additionally, to propel growth your Company is also exploring other synergistic opportunities in Real Estate. And as a step in

05

Corporate Information

06

H S BharanaChairman S D SharmaDirector S D KapoorDirector A K MehtaDirector

Ajay Kumar MishraDirector

Amit BharanaDirector Kapil KumarCompany Secretary

AuditorsP C Bindal & Co.Chartered Accountants

Main BankerYes Bank48, Navya Marg, Chanakya Puri, New Delhi

Registrar & Share Transfer AgentBeetal Financial & Computer Services Pvt. Ltd.,99, Madangir, Behind Local Shopping Centre,Near Dada Harsukhdas Mandir,New Delhi – 110062

Registered & Corporate Office153, Ground Floor, Okhla Industrial Area,Phase III, New Delhi – 110020

Investor HelpE-mail: [email protected]

7Era E-Zone (India) Limited

NOTICE

NOTICE IS HEREBY GIVEN THAT THE NINETEENTH ANNUAL GENERAL MEETING OF THE MEMBERS OF ERA E-THZONE (INDIA) LIMITED WILL BE HELD ON MONDAY, THE 19 DAY OF SEPTEMBER, 2011 AT 5.00 P.M. AT

EXECUTIVE CLUB, 439, VILLAGE SHAHOORPUR, P.O. FATEHPUR BERI, NEW DELHI-110074 TO TRANSACT THE FOLLOWING BUSINESS:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet of the Company as at March, 2011 and the Profit and Loss Account and Cash Flow Statement for the year ended on that date together with reports of the Auditors’ and Directors’ thereon.

2. To appoint a Director in place of Mr. Amit Bharana, who retires by rotation and being eligible, offers himself for reappointment.

3. To appoint a Director in place of Mr. S.D. Kapoor, who retires by rotation and being eligible, offers himself for reappointment.

4. To appoint Auditors and to fix their remuneration.

SPECIAL BUSINESS

5. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of section 198, 269, 309 and 310 read with schedule XIII of the Companies Act, 1956 and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) and pursuant to Articles of Association of the company, consent of the Shareholders be and is hereby accorded for increase in the remuneration of Mr. Amit Bharana, Managing Director of the Company upto Rs. 3,00,000/-per month (including all benefits and perquisites) with effect from January 1, 2011 to 31st May, 2011.”

6. To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of section 198, 269, 387 read with schedule XIII of the Companies Act, 1956 and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) and pursuant to Articles of Association of the company, consent of the Shareholders be and is hereby accorded for the appointment of Mr. Gaurav Chopra as the Manager of the Company on a monthly remuneration of upto Rs. 85,000/- per month w.e.f. 01st Day of June, 2011 for the period of three years i.e. till 31st May, 2014.”

By Order of the Board of Directorsfor Era E-Zone (India) Limited.

Place : New Delhi (Kapil Kumar)thDate : 13 August, 2011 Company Secretary

31st

8 Annual Report 2010-11

Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF/ HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. A PROXY FORM DULY COMPLETED AND SIGNED SHOULD REACH AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE THE SCHEDULED TIME OF THE MEETING. A BLANK PROXY FORM IS ATTACHED HEREWITH.

2. Explanatory statement pursuant to section 173(2) of the Companies Act, 1956 setting out all material facts in respect of special business of the notice is attached.

3. Members requiring information about the accounts to be explained at the meeting are requested to send their queries at least ten days prior to the meeting at the Registered Office of the Company.

th4. The Register of Members and Share Transfer Books of the Company will remain closed from 14 September,

th2011 to 19 September, 2011 (both days inclusive).

5. Members/proxy-holders are requested to produce at the entrance the attached admission slip duly completed and signed for admission to the meeting hall.

6. Members attending the meeting are requested to bring their copy of Annual Report.

7. Corporate members are requested to send a duly certified copy of Board Resolution authorizing their representatives to attend and vote at the Annual General Meeting.

8. The members are requested to notify the change in their address, if any, at the earliest.

9. Members are requested to register their email address through their Depository participants where they are holding their Demat Accounts for sending the future communication by email. Members holding the shares in physical form may register their email at company’s Registered Office or company’s id - [email protected]

10. The members holding shares in the physical form are requested to intimate to the Registrar and Transfer Agents, M/s. BEETAL Financial & Computer Services Pvt. Limited, Beetal House, 3rd Floor, 99, Madangir, Behind Local Shopping Centre, Near Dada Harsukhdas Mandir, New Delhi-110062 about the change of address, if any, at the earliest, quoting their registered folio number.

11. Members who hold shares in dematerialized form are requested to bring their Client ID and DP ID numbers for easy identification of attendance at the meeting.

12. All documents as are mentioned in Notice containing draft resolution or in explanatory statement attached to the notice are open for inspection during the business hours up to the date of this Annual General Meeting.

13. Information regarding Directors to be appointed/re-appointed at this Annual General Meeting pursuant to clause 49 of the Listing Agreement are as under:


Name of Directors

Particulars Mr. Amit Bharana Mr. S.D. Kapoor

Date of Birth 17.10.1981 01.08.1946

Date of appointment 29.09.2008 01.12.2007

Expertise inspecific areas

Mr. Amit Bharana has worked with various service industries.

Mr. S D Kapoor is having more than 28 years of experience in various fields. He also served as a Chairman of MMTC Ltd and Neelachal Ispat Nigam Limited

Qualifications MBA from Central Queensland University, Australia, BBA (Hons.) from Thames Valley University and also holds Diploma in Import and Exports Management from Foreign Trade Development Centre, New Delhi.

MBA from University of Leeds, UK and B.Sc from (Met. Engineering)

Directorship inother Companies

• Bareilly Highways Project Limited• Trifalagur Square Infrastructure Private

Limited• Bhisham Infrastructure Private Limited• Pawan Doot Estate Private Limited• Jamvant Estates Private Limited.• Sameeksha Estate Private Limited.• Sachet Infrastructure Private Limited.• Angad Infrastructure Private Limited.• Manogayan Estates Private Limited.• Impulse Probuild Private Limited.• Identity Buildtech Private Limited.• Voice Realtech Private Limited.• Deva Buildtech Private Limited.• Era Infra Engineering Ltd• Voice Builders Private Limited• Hi Point Investment & Finance Private

Limited.• XEMA Infrastructure Private Limited

• Era Infra Engineering Limited• IL&FS Infrastructure

Development Corporation Limited• Visa Comtrade Limited• Visa Steel Limited• Hindustan Dorr-Oliver Limited• Visa Bao Limited

Other CommitteeMemberships/Chairmanships

AUDIT COMMITTEE:Member1. Bareilly Highways Project Limited

AUDIT COMMITTEE:Chairman 1. Hindustan Dorr-Oliver Limited2. Visa Steel Limited3. Visa Comtrade LimitedMemberIL&FS Infrastructure Development Corporation LimitedSHAREHOLDERS GRIEVANCE COMMITTEEMember1. Visa Steel Limited

Shareholdings in the company as on 31.03.2011

11800 Nil


EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.

Item no. 5

Mr. Amit Bharana was holding the position of Managing Director in the Company and had been contributing immensely towards the accomplishment of the goals and working of the Company.

Mr. Amit Bharana is an MBA from Central Queensland University, Australia and also holds BBA (Hons.) from Thames Valley University located in the United Kingdom. He also holds a Diploma in Import and Exports from Foreign Trade Development Centre, New Delhi.

Taking into account his experience, qualifications and his sincere efforts towards the attainment of goals and objectives of the Company and on the recommendation of Remuneration Committee and subject to approval of Shareholders, the Board of Directors has increased his remuneration w.e.f. January 1, 2011 for the rest of his term.

Altered monthly Remuneration Paid to Mr. Amit Bharana is as follows.

Basic Salary : Rs. 1,13,872/-Housing Rent Allowance : Rs. 68,323 (i.e. 60% of Basic Salary)Conveyance Allowance : Rs. 28,468 (i.e. 25% of Basic Salary)Special Allowance : Rs. 39,855 (i.e. 35% of Basic Salary)LTA : Rs. 9486 (i.e. 8.33% of Basic Salary)M. Allowance : Rs. 9486 (i.e. 8.33% of Basic Salary)Adv. Pay : Rs. 22775 (i.e. 20% of Basic Salary)Gratuity : Rs. 5477 (i.e. 4.81% of basic salary)

stHowever he has resigned from the position of Managing Director w.e.f. 31 May, 2011 and continued to be a director of the Company.

Board of Directors recommends passing of the resolution as special resolution.

None of the Directors except Mr. Amit Bharana is concerned or interested in the above resolution.

STATEMENT CONTAINING INFORMATION PURSUANT TO CLAUSE (iv) OF PART II, SECTION II, 1(B) OF SCHEDULE XIII OF THE COMPANIES ACT 1956.

I. GENERAL INFORMATION:

(1) Nature of Industry

Currently Company is operating into Food Courts and Cineplex Business.

(2) Date or expected date of commencement of commercial production.

Company is in the business of Cineplex since financial year 2006-07.

(3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus N.A.


(4) Financial performance based on given indicators ( in lakhs)

Particulars Year ended 31st March, 2011 Year ended 31st March, 2010Total Income 862.37 813.14Profit before Depreciation & tax (233.11) (232.49)Depreciation 72.94 82.59Profit/Loss before tax (306.05) (315.08)Tax Expenses:Current Tax - -Earlier Year Tax - -Deferred Tax - (97.44)Deferred Tax Assets Reversed 130.85 -Profit /Loss after Tax (436.91) (217.64)Surplus/(deficit ) carried to Balance sheet 459.19 896.10

(5) Export performance and net foreign exchange collaborationsN.A

(6) Foreign Investments and Collaborators, if anyN.A

II. INFORMATION ABOUT THE APPOINTEE:

(1) Background Details

Mr. Amit Bharana is an MBA from Central Queensland University, Australia and BBA (Hons.) from Thames Valley University located in the United Kingdom. He also holds a Diploma in Import and Exports from Foreign Trade Development Centre, New Delhi.

(2) Past remuneration

He was drawing a remuneration of Rs. 250,000 (Rupees Two Lakh and Fifty Thousand) per month.

(3) Recognition or Awards

NIL

(4) Job Profile and Suitability

Mr. Amit Bharana being a management graduate from Central Queensland University was looking after all the day to day managerial and operational activities of the Company.

(5) Remuneration Proposed

As explained above in the explanatory statement.

(6) Comparative remuneration profile with respect to industry.

The Proposed remuneration is in line with the remuneration in the industry.

(7) Pecuniary relationship directly or indirectly with the company or relationship with the managerial personnel, if any.

Mr. Amit Bharana belongs to the Promoter Group of the Company.


III. OTHER INFORMATION:

(1) Reasons of loss or inadequate profits: The Company was not able to achieve the break even point as Company could not explore new line of activity last year.

(2) Steps taken or proposed to be taken for improvement: The Company is exploring other opportunities by entering into new line of activity i.e. Real estate and similar activities and a step in this regard is already taken by amending the object clause of the company and it is expected that it will increase its income and profitability in near future.

(3) Expected increase in productivity and profits in measurable terms: Not Applicable.

IV. DISCLOSURES:

Details of Remuneration package- The requisite information has been given under the section of corporate governance attached to the Annual Report.

Item no. 6

Consequent to the resignation of Mr. Amit Bharana from the position of Managing Director, Company was required to appoint a Managing Director/Whole Time Director/ Manager of the Company, Therefore, on the recommendation of Remuneration Committee and Subject to approval of Shareholders, the Board of Directors

thin its meeting held on 30 May, 2011 has appointed Mr. Gaurav Chopra as a Manager of the Company under the provisions of the Companies, Act 1956 w.e.f. 01st Day of June, 2011 for a period of three years i.e. till 31st May, 2014. Mr. Gaurav Chopra is associated with the company for last 4 years and handling the work and responsibilities as an Operational- Head of the company.

Board of Directors recommends passing of the resolution as an ordinary resolution.

None of the Directors is concerned or interested in the above resolution.

The above information may be treated as compliance under section 302 of the Companies Act, 1956.

By Order of the Board of Directors

for Era E-Zone (India) Limited

Place : New Delhi (Kapil Kumar)thDate : 13 August , 2011 Company Secretary


Director’s Report

Dear Members,

of Era E-Zone (India) Limited

thYour Directors have pleasure in presenting their 19 Annual Report along with the Audited Accounts for the year stended 31 March, 2011.

FINANCIAL RESULTS

The financial results for the year under review are summarized below for your consideration:

( In Lakhs)

PARTICULARS Year ended Year ended31st March, 2011 31st March, 2010

Total Income 862.37 813.14

Profit before Depreciation & Tax (233.11) (232.49)

Depreciation 72.94 82.59

Profit/Loss before tax (306.05) (315.08)

Tax Expenses:

Current Tax - -

Earlier Year Tax - -

Deferred Tax - (97.44)

Deferred Tax Assets Reversed 130.85 -

Profit /Loss after Tax (436.91) (217.64)

Surplus/(deficit ) carried to Balance sheet 459.19 896.10

REVIEW OF OPERATIONS

For the financial year ended 31st March, 2011, the total income of the company was Rs. 862.37 Lacs as compared to an income of Rs. 813.14 Lacs for the year ended 31st March, 2010.

The Company incurred a net loss of Rs. 436.91 Lacs for the year ended 31st March, 2011 as compared to a net loss of Rs. 217.64 Lacs for the year ended 31st March 2010.

No material changes have occurred since the date of the Balance sheet and this report, which has any adverse effect on the working of the company.

FUTURE PROSPECTS

Presently your Company is carrying on the business of Cinemas/Multiplexes. It is now proposed to enter into new line of activity i.e. Real estate and similar activities. Your board is of the opinion that being the need of the hour there is a huge potential available in this segment and since Company is having experience in proposed line of activities, it can conveniently do well in this line.

A step in this regard is already taken by amending the object clause of the company.


PUBLIC DEPOSITS

Your Company does not accept public deposits under section 58A of the Companies Act 1956. There are no unclaimed or unpaid deposits as at 31st March, 2011.

DIVIDEND

In View of the losses incurred during the year, Directors express their inability to recommend dividend.

DIRECTORS

Mr. Amit Bharana and Mr. S.D. Kapoor, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

AUDIT COMMITTEE

Pursuant to the provisions of Section 292A of the Companies Act, 1956, and clause 49 of the listing agreement the Board of Directors of the Company have a Committee of Board of Directors known as Audit Committee, which consists of Mr. S. D. Sharma, as its Chairman and Mr. A. K. Mehta and Mr. S.D. Kapoor, as its members. Audit Committee has all powers and authorities as provided under the aforesaid provisions of the act and listing agreement.

ISSUE OF WARRANTS ON PREFERENTIAL BASIS

The Company has issued 180,00,000 warrants to be convertible in equal number of Shares within a period of 18 months from the date of issue of such warrants on preferential basis to Non Promoter Corporates.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of section 217 (2AA) of the Companies Act, 1956. Your directors state and confirm that:

i. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. Accounting policies selected were applied consistently, reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Company as at the end of March 31, 2011 and of the loss of the Company for the year ended on that date;

Iii. Proper and sufficient care has been taken 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 frauds and other irregularities;

Iv. The annual accounts of the Company have been prepared on a going concern basis.

AUDITORS

M/s. P.C. Bindal & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. A certificate has been obtained from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956.

AUDITORS REPORT

There are no adverse qualifications in the report which need to be explained here.

PARTICULARS OF EMPLOYEES U/S 217(2A) OF THE COMPANIES ACT, 1956

There is no employee in the Company whose particulars are required to be furnished u/s 217(2A) of the Companies Act, 1956 and rules made there under.


PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding the conservation of energy and technology absorption are not given as the Company has not undertaken any manufacturing activity. Still it endeavors to save the energy wherever possible at all levels of operation.

Further, your Company does not use any foreign technology which needs to be absorbed.

The foreign exchange earning/outgo during the year are as under: ( in )

Current Year Previous Year

Foreign Exchange Earning Nil Nil

Foreign Exchange Outgo Nil Nil

SUBSIDIARY COMPANY

Silverline Cinemas Private Limited is the only Wholly Owned Subsidiary of the Company. Copies of the Balance Sheet, Profit & Loss Account and Reports of the Auditors and Directors of the Subsidiary Company have not been attached as per the consent granted by the Board of Directors of the Company in terms of general exemption granted by the Ministry of Corporate Affairs, Government of India under section 212(8) of the

thCompanies Act, 1956 vide general circular no. 2/2011 dated 8 February, 2011.However as per the terms of general exemption, a statement containing brief financial details of the subsidiary company for the year ended

st31 March, 2011 is included in the Annual Report. As required under the Listing agreement with the Stock Exchange, the Company has prepared the Consolidated Financial Statements of the Company and its subsidiary as per the Accounting Standard (AS) 21, Consolidated Financial Statements which form part of the Annual Report and Accounts.

The Annual Accounts of the subsidiary company and the related detailed information shall be made available to shareholders of the Company seeking such information. The Annual Accounts of the subsidiary company are also kept for inspection by any shareholders at the registered office of your company.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS

A Company hold fiduciary relationship with its stakeholders and community, where the Board of Directors of the Company acts as trustee to all the stakeholders of the Company to enhance the stakeholders value and protect their interest. Your Company is committed to benchmark itself with global standards in all areas including appropriate standards for Good Corporate Governance. Towards this end, an effective corporate governance System has been put in place in the Company, which also ensures that the provisions of Clause 49 of the Listing Agreement are duly complied with. A report on Corporate Governance along with Certificate on its compliance from Mr. R.S. Bhatia, Company Secretary in Practice is enclosed with this Annual Report.

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, and Shareholders during the year. Your directors also wish to take on record their deep sense of appreciation for the committed services of the employees at all levels, which has made our Company successful in the business.

For and on behalf of the Board of Directors

Place: New Delhi H.S. Bharana thDated: 13 August, 2011 Chairman


MANAGEMENT DISCUSSCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian Entertainment Industry is on the threshold of emerging as a large market globally. Future growth of

the Industry is expected to be led by rising spends on entertainment by a growing Indian middle class,

regulatory initiative, increased corporate investment and the Industry’s dynamic initiatives to make strategic

structural corrections to grow.

The Entertainment Industry in India has the potential to be the next “sunrise” Industry and is undergoing

significant changes. Increasingly, the Indian Entertainment Industry is being influenced by international trends

and developments. The Industry is steadily moving towards corporatization and globalised markets. Domestic

majors are finding better earnings potential in the huge overseas markets. At the same time, corporatization is

finally starting to emerge in this highly unorganized Industry. This is likely to instill a greater discipline in the

functioning of the Industry and lead to greater consolidation in the future. The domestic consumer will opt for

more sophisticated technology in the near future. Consequently, domestic majors will have to redefine their

product offerings.

The Indian Media & Entertainment (M&E) Industry has evolved significantly over the last decade and the pace of

this evolution is only expected to increase going forward. With mobile phones becoming ubiquitous, rising

mobile and internet penetration and increased use of search engines and social networking platforms,

consumer patterns have witnessed a marked change in India.

The Media and Entertainment Sector comes under the purview of the Ministry of Information and Broadcasting

which is responsible for formulation and administration of laws relating to Media and Entertainment. The sector

also has to adhere to the provisions laid down under the Copyright Act,1957, Cinema Exhibitions Rules and

Entertainment Tax Regulations etc., The film industry is monitored by the Indian Motion Picture Producers’

Association (IMPPA), Film Television Producers’ Guild of India, The Association of Motion Pictures and Television

Programme Producers (AMPTPP) and The Film Writers Association (FWA).

GROWTH IN ENTERTAINMENT SECTOR

Indian Media & Entertainment (M&E) Industry registered a growth of 11 % over 2009 and touched INR 652

billion in 2010 says a FICCI-KPMG report. Backed by positive Industry sentiment and growing media

consumption, the Industry is estimated to achieve a growth rate of 13 % in 2011. Overall, the Industry is

expected to register a CAGR of 14% to touch INR 1275 billion by 2015. The report was released at the inaugural

session of FICCI FRAMES 2011 on March 23, 2011. The key factors that are driving the growth of the media and

entertainment Industry in India are the favorable demographics, growing literacy, increasing affluence,

development of technology, government support and the growing interest in the Indian way of life. The

following table shows the steady growth and future potential of the sector:

Year Size of the Indian Media and Entertainment

Industry (in Billion)

2007 516

2008 579

2009 587

2010 652

2011 (Projected) 738





Source: KPMG Media and Entertainment Report 2015

The Indian film Industry is the largest in the world in terms of number of movies produced. The Industry is quite

old with the first commercially successful film produced in the year 1913. The Indian film industry produces

more than 1,000 films every year in various languages. There are numbers of production houses in the country

which are in the business of film production. The film Industry provides employment to lakhs of people.

MULTIPLEXES

The story of Single-Screen Theatre has reached its sad end in India. Multi-Screen Theaters have opened new

vistas for the entertainment Industry. After the entry of corporate titans, the scenario of entertainment services

has become more professional than ever. These theaters have changed the entire movie-going experience.

Multiplex is a medium that offers a person composite entertainment comprising of a one stop destination to

shop, entertain and dine and watch a variety of movies under a common roof. Multiplex are one of the means

of lifestyle that offer to viewers the choice of watching a movie in a five star or three star environment.

Presently there are approximately 13000 screens in India with equal number of space available for the same

amount of theatres to be opened. Multiplexes currently constitute 4-5 % of the total number of screens in India;

the Industry has a long way to go. This is just the beginning of Multiplex Revolution.

Multiplexes in India are given benefits for their development as they form a major part of the entertainment

Industry. Benefits such as overall tax concession, reduction in entertainment tax and so on are provided by the

Govt.

FOOD COURTS

A quiet revolution is brewing in India’s Food Industry. Food courts are a vital element in any entertainment

complex. To make recreational outing complete, fast food chains, food courts, food point etc have become a

regular features now days.

To an outsider, Indian food is one of the most distinct cuisines on earth. Yet anyone living in India knows what a

misnomer the phrase is. It’s like using “European food” to describe both Italian and French cuisines, because

India is a land of over a dozen definitive cultures and cuisines.



Food courts might have been the first enablers of adventurous eating in India, but an even bigger evangelist is

on the scene: modern grocery stores. Slick new shops provide a wide range of food from all over the country

and beyond, neatly stacked in big clean aisles. As many stores streamline their supply chains, they can offer

food that’s often in better condition and sometimes even cheaper than open-air markets, making it hard for

shoppers to resist, especially given the convenience of having everything in one, air-conditioned shop.

This is an indication of their having a tremendous scope in future.

FUTURE OUTLOOK

Changing lifestyles, a retail boom and increasing consumerism have brought about substantial change in the

marketing style and pattern in upcoming cities. As per PwC’s latest report titled India Entertainment & Media

Outlook 2011, the Indian Entertainment and Media (E&M) industry is slated to continue its double-digit growth

trajectory in 2011. Entertainment activities are expected to be major area of growth in the coming future. Your

Company focused on the development and operation of

• Multiplexes and Cineplexes

• Food Courts

Now the Company is also exploring other opportunities in related to Real Estate and similar activities. A step in

this regard by amending the objects of the Company is already taken by the Management of the Company.

OPERATIONAL PERFORMANCE

For the Financial Year ended on 31st March, 2011, the Total Income of the Company from

Entertainment/Cineplex was Rs.832.25 Lac as compared to an Income of Rs. 796.04 Lac for the year ended on

31st March, 2010.

SEGMENT – WISE PERFORMANCE

Presently, your Company operates only in one Segment; the requirement of disclosure of segment wise

performance is not applicable to the Company as required under Clause 41 of the Listing Agreement.

OPPORTUNITIES

LOW MEDIA PENETRATION IN LOWER SOCIO-ECONOMIC CLASSES (SEC)

Media penetration varies across socio-economic classes. Though media penetration is poor in lower socio-

economic classes, the absolute numbers are much higher for these classes. Hence, efforts to increase the

penetration even slightly in these lower socio-economic classes are likely to deliver much higher results, simply

due to the higher base.

LIBERALIZING FOREIGN INVESTMENT REGIME

Today, India has probably one of the most liberal investment regimes amongst the emerging economies with a

conducive Foreign Direct Investment (FDI) environment. The Media & Entertainment (M&E) industry has

significantly benefited from this liberal regime and most segments of the E&M industry today allow foreign

investment

TECHNOLOGY IMPROVEMENTS AND CORPORATIZATION

The advancements in Technology are helping the Indian film Industry in all the spheres – film production, film

exhibition and marketing. The Industry is increasingly getting more corporatized. More theatres across the


country are getting upgraded to multiplexes and initiatives to set up more digital cinema halls in the country are

already underway. This will not only improve the quality of prints and thereby make film viewing a more

pleasurable experience, but also reduce piracy of prints and even though 3-D to 5-D movies are still at its

inception, its increasing popularity is leaving a huge area that can be tapped.

6D CINEMA IN INDIA

The 6D films not only offer 3D images but take the viewing pleasure to an entirely new dimension by exposing

the audience to the environmental elements; such as rain, wind and smell, similar to what the onscreen

characters experience.

A British-based Company recently launched “6D Cinema” in Bucharest, Romania. They say theirs is the world’s

first 6D Cinema. The chairs in the theater also revolve on cue to provide the viewer an extraordinary experience

unlike anything they have seen before. It is only a matter of time before 6D cinema is seen the world over.

The new 6D technology is expected to take off in a better manner than 3D technology did when it made its

entry. The regular 3D films in the near future. But it is left to be seen whether the swirling chairs, the smells and

other aspects that are part of 6D cinema have the desired effect and become popular with the audiences.

Your Company enjoys a presence in this segment. With so many opportunities to leverage the future looks

attractive.

THREATS1. Multiplex profitability depends only on entertainment tax exemptions that are available for certain duration.2. The Indian box office is fairly seasonal in nature, with bigger releases and higher box office sales occurring

during festival and holiday periods.3. Moreover, occupancies may be affected adversely by major sports events, such as the Indian Premier League

cricket tournament.4. Piracy Violation of intellectual properly rights pose a major threat to the Media and Entertainment

companies.5. Lack of quality content has emerged as a major concern because of the ‘Quick-buck’ route being followed in

the industry.6. With technological innovations taking place so rapidly, the media sector is facing considerable about success

in the market place.

ADEQUACY OF INTERNAL CONTROL SYSTEM AND RISK MANAGEMENT

Era E-Zone (India) Limited is a system driven organization dedicated to its customers in a seamless and

transparent manner. The Company has effective internal control procedures commensurate with its size and

nature of business to ensure that all its assets are safeguarded against losses, unauthorized use and that its

transactions are recorded appropriately and reported correctly

The introduction of comprehensive Risk Management system and internal control mechanism has been set

under the requirement of Clause 49 as a condition for listing on Stock Exchange. The entire financial and

business cycle has been mapped to improve the systems and controls. A complete system is in place to identify

the critical risks, root cause of risks and the mitigating plans to avoid any functional business mishaps.

HUMAN RESOURCES

The Company’s most valuable asset and strength, is the human resource built up over the period of time. The

Company is continuously facilitating their assessment procedure to progress rapidly as an organization. The

Company’s employee relations have always been harmonious during the period under review. The employee

relations were cordial throughout the year. At present there are 72 employees on the rolls of the Company.

There have been no labour/worker strikes, during the financial year under review.


CORPORATE GOVERNANCE REPORT

1. CORPORATE GOVERNANCE PHILOSOPHY

Corporate governance involves a set of relationships between a Company’s Management, its Board, its

Shareholders and other Stakeholders and also provides the structure through which the objectives of the

Company are set and the means of attaining those objectives and monitoring performance are determined in a

manner that would ensure the utilization of available resources to meet the aspirations of all its Stakeholders.

We firmly believe that good governance is critical to sustaining corporate development, increasing productivity

and competitiveness. The governance process should ensure that the available resources are utilized in a manner

that meets the aspirations of all its stakeholders. Your Company’s essential charter is shaped by the objectives of

transparency, professionalism and accountability. The Company continuously endeavors to improve on these

aspects on an ongoing basis.

It is always ensured that the Board of the Company is fully apprised of the affairs of the Company which is

aimed at assisting them in the efficient conduct of Company’s business so as to meet Company’s obligation to

the stakeholders. The Company reaffirms its commitment to adhere to Corporate Governance in its relentless

pursuit to attain highest standards of corporate values and ethics.

Your Company is continuously striving to go beyond adherence to regulatory framework. Our corporate

structure, business and disclosure practices have been aligned to our Corporate Governance Philosophy. We

accord highest priority to the protection of the interests of all our Shareholders, particularly the minority

Shareholders.

The report on matters relating to Corporate Governance in accordance with the provisions of Listing Agreement

is as follows:

2. BOARD OF DIRECTORS AND BOARD PROCEDURE

A) BOARD COMPOSITION:

The Board of Directors has an optimum combination of Executive and Non-Executive Directors with half of the

Board with Independent Directors and more than half of the Board with Non Executive Directors which is in

conformity with Clause-49 of the Listing Agreement. The details of the Board of Directors as on the date of this

report is as follows:

S.No. Name of the Director Status Date of appointment Date of cessation

1. Mr. H.S. Bharana Non Executive Chairman 20.03.2006 N.A.

2. Mr. A.K. Mehta Independent & Non-Executive 20.03.2006 N.A.

3. Mr. S. D. Kapoor Independent & Non-Executive 01.12.2007 N.A.

4. Mr. Surya Dutta Sharma Independent & Non-Executive 18.04.2008 N.A.

5. Mr. Ajay Kumar Mishra Non Executive Director 18.04.2008 N.A.

6. Mr. Amit Bharana Non Executive Director 29.09.2008 N.A.


The Independent Directors do not have any material pecuniary relationship (apart from receiving sitting fees for

attending the Board Meetings) or transactions with the Company, its promoters and its subsidiary which may

affect the independence or judgment of directors.

B) BOARD PROCEDURES

It has always been the Company’s policy and practices that apart from matters requiring Board’s approval by

statute, all other major decisions are also taken in the Board Meeting.

C) DETAILS OF BOARD MEETINGS:

During the year under review the Board of Directors met five times as follows:-

31/05/2010 ; 28/06/2010 ; 31/07/2010 ; 13/11/2010 ; 14/02/2011

The Details of attendance of each director at Board Meeting and last AGM held during the year and details of

other Directorship, Committees Membership and Committee Chairmanship are as follows:

Mr. H. S. Bharana 5 Yes 14 1 4

Mr. A. K. Mehta 5 No 2 1 -

Mr. S. D. Kapoor 3 No 6 3 2

Mr. S. D. Sharma 5 Yes 2 1 1

Mr. A. K. Mishra 2 No 13 1 4

Mr. Amit Bharana 5 Yes 17 - 1

Name of the Director

No. of Board

Meetings

attended

Last AGM

attended

Other Directorship/ Committee Membership/

Chairmanship*

Directorship**Committee

Membership

Committee

Chairmanship

*Only Audit Committee and Shareholder’s Grievance Committee are considered for the purpose of Committee positions as per Listing Agreement.

** Other Directorship do not include alternate Directorship, Directorship of Private Companies (not being a subsidiary of a Public Company), Section 25 companies and of companies incorporated outside India.

The Directors of your Company have confirmed that their memberships on Committees are within the prescribed limits under the Listing Agreement.

The Board Meetings are normally held at the Registered and Corporate Office of the Company situated at Okhla Phase-III, New Delhi. The Board meets at least once in a quarter to consider among other matters, the quarterly Un-Audited Financial Results of the Company.

3. AUDIT COMMITTEE

In terms of Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement, our Board has constituted an Audit Committee, the constitution of which is as follows:

i) Mr. S.D Sharma Chairman

ii) Mr. S.D. Kapoor Member

iii) Mr. A.K. Mehta Member

All the members of the Committee are independent and having sufficient knowledge and experience of Finance and Accounts. The Chairman of the Audit Committee attended the last Annual General Meeting of the Company.

The Company Secretary acts as the Secretary and convener of the Committee meetings.

During the year the Audit Committee meeting were held four times on the following dates

31/05/2010 ; 31/07/2010 ; 13/11/2010 ; 14/02/2011

These Meetings were attended by the members as given below:

Name of Members No of Meetings during Tenure No. of Meetings Attended

Mr. S.D Sharma 4 4

Mr. S.D. Kapoor 4 3

Mr. A.K. Mehta 4 4

TERMS OF REFERENCE TO THE COMMITTEE:

The terms of reference stipulated by the Board to the Audit Committee are, interalia, as contained in Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956 as follows:

1. Oversight of Company’s Financial Reporting process and the disclosures of its financial information to ensure that the Financial Statement is correct, sufficient and desirable.

2. Recommending to the Board, the appointment, re appointment and if required, the replacement or removal of the Statutory Auditors and the fixation of audit fees.

3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors.

4. Reviewing with the Management, the Annual Financial Statements before submission to the Board for approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of sub Section (2AA) of Section 217 of the Companies Act, 1956.

b. Changes if any in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgment by management.

d. Significant adjustments made in the financial statements arising out of audit findings.

e. Compliance with listing and other legal requirements relating to financial statements.

f. Disclosure of any related party transactions.

g. Qualifications in the draft audit report.

5. Reviewing with the management, the quarterly financial statements before submission to the board for approval.

6. Reviewing with the management, performance of statutory and internal auditors, adequacy of the internal control systems.



7. Reviewing the adequacy of internal audit functions, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

8. Discussion with internal auditors any significant findings and follow up thereon.

9. Reviewing the findings of an internal investigation by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

10. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain an area of concern.

11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in the case of non payment of declared dividends) and creditors.

12. To Review the functioning of the Whistle Blower Mechanism, in case the same is existing.

13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

REVIEW OF THE INFORMATION BY THE AUDIT COMMITTEE:

The Audit Committee shall mandatorily review the following information:

1. Management Discussion and Analysis of financial condition and results of operations;

2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;

3. Management letters / letters of internal control weaknesses issued by the statutory auditors;

4. Internal audit reports relating to internal control weaknesses; and

5. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.

The audit committee mandatorily reviews the terms and reference and informations as laid down before it in terms of listing agreement.

4) REMUNERATION COMMITTEE

The Remuneration Committee of the Board of Directors consists of following Members:-

Mr. A.K. Mehta Chairman

Mr. S.D. Sharma Member

Mr. S.D. Kapoor Member

During the Financial year one Meeting of the Committee was held on 14th February, 2011

All the Members of the Committee were present in the Meeting.

REMUNERATION POLICY

Subject to the approval of the Board of Directors and subsequent approval by the shareholders at the General Body Meetings and such authorities as the case may be, remuneration of the Managing/ Whole Time Director is fixed by the remuneration committee. The remuneration is fixed considering various factors such as


qualifications, experience, expertise, prevailing remuneration in competitive industries, financial position of the Company etc. The remuneration structure comprises basic salary, perquisites and allowances, contribution to provident fund and other funds in accordance with various related provisions of the Companies Act, 1956.

REMUNERATION TO DIRECTORS:

(I) EXECUTIVE DIRECTOR:

Details of remuneration paid to Executive Director for the Financial Year 2010-11 is given below:

Name : Mr. Amit Bharana

Basic Salary : 12,11,694/-

Perquisites and other Allowances : 18,98,240/-

Total : 31,09,934/-

(ii) None of the Non -Executive Directors are drawing any kind of remuneration apart from the sitting fees for attending the Board Meetings of the Company.

5) SHAREHOLDERS’/ INVESTORS GRIEVANCE COMMITTEE

The Shareholders’/ Investors Grievance Committee was constituted to specifically look into the redressal of Investors’ complaints like transfer of shares, non-receipt of Annual Report and non-receipt of declared dividend etc.

The said committee consists of Mr. A.K. Mehta as its Chairman, Mr. S.D. Sharma and Mr. S.D. Kapoor as its members. Sufficient authority and responsibility has been delegated to Company’s Transfer Agents, Beetal Financial & Computer Services (P) Ltd, Beetal House, 3rd floor,99, Madangir, Behind Local Shopping Centre, Near Dada Harsukhdas Mandir, New Delhi 110062.

During the financial year there were no complaints received by the Company’s RTA or by the Company and no complaint is pending as on 31st March 2011.

Our Registrar & Share Transfer Agent M/s Beetal Financial & Computer Services (P) Ltd. has been personally handling the cases of share transfer and other related matters very swiftly and efficiently under the supervision of the Company Secretary of the Company.

Any of the shareholders may contact the RTA or the Company Secretary of Company at the registered office of the Company or email at the email id- [email protected] .

ROLES AND RESPONSIBILITIES OF THE SHAREHOLDER’S/ INVESTORS GRIEVANCE COMMITTEE

The Committee shall have the following role and responsibilities:

• Redressal of shareholders and investor complaints e.g. transfer of shares, non- receipt of Annual Report, non receipt of declared dividend etc.;

• Formulation of procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from shareholders from time to time;

• Issue of duplicate share certificates in place of original which may be lost/ torn/ mutilated;

• Approve and effect transmission of shares arising as a result of death of sole/ any of the joint shareholders.”


Compliance Officer: Mr. Kapil Kumar, Company Secretary has been designated as Compliance Officer and he takes care of compliances as required under Listing Agreement.

During the financial year ended 31st March, 2011 Shareholders’/Investors’ Grievance Committee

Meetings were held on 31st May, 2010, 31st July, 2010, 13th November, 2010 and 14th February, 2011.

6. GENERAL BODY MEETING

Details of last Three Annual General Meetings (AGM’s)/Extra Ordinary General Meetings (EGM) are given as under:

FINANCIAL YEAR AGM DATE LOCATION TIME

2009-10 06/08/2010 Executive Club, 439 , village Shahoorpur, 5.00 P.M.

P.O. Fatehpur Beri, New Delhi-110074

2008-09 08/08/2009 Executive Club, 439 , village Shahoorpur, 5.00 P.M.

P.O. Fatehpur Beri, New Delhi-110074

2007-08 29/09/2008 NCUI Auditorium 3, Siri Institutional Area, 4.00 P.M.

August Kranti Marg, New Delhi-110016

*SPECIAL RESOLUTIONS PASSED AT PREVIOUS THREE AGMS & EGMS

1) AGM held on 29th September, 2008 : To Issue of ADRs/GDRs/FCCBs or any other instrument u/s 81(1A) of the Companies Act, 1956.

2) AGM held on 8th August, 2009 : No Special Resolution was passed.

3) AGM held on 6th August, 2010 : To increase the Salary of Mr. Amit Bharana, Managing Director

*All Special Resolutions were passed through vote by show of hands.

Postal Ballot:

During the Financial Year, there was no resolution passed through postal ballot u/s 192A of the Companies Act, 1956.

7. DISCLOSURE

a. No transaction of material nature has been entered into by the company with its promoters, Directors or Management or Relatives etc. that may have conflict with the interest of the Company

b. Related Party Transactions

The details of the Related Party Transactions are given in Note No. B(9) of the Schedule “O” of Balance Sheet i.e. under the head Notes to Accounts in the Balance Sheet as at 31.03.2011

c. Disclosure of Accounting Treatment

The Company is following the prescribed Accounting Standards of the trade which provides a true and fair view of the business of the Company and there is no deviation

d. During the year, ended 31st March 2011 the Company has not made any allotment of shares.


e. Compliance by the Company

The Company has complied with the requirements of the Stock Exchanges, SEBI and other Statutory Authorities on all matters related to capital markets during the last three years. No penalties or strictures have been imposed on the Company by the Stock Exchanges, SEBI or other Statutory Authorities relating to the above.

f. Number of Shares Held by Non Executive Directors

None of the Non Executive Directors hold any shares of the Company except Mr. Amit Bharana who is holding 11800 shares of the Company.

g. Management Discussion and Analysis

A Management Discussion and Analysis are given else where in this Annual Report.

h. Risk Management

The Company has laid down procedures to inform Board Members about the risk assessment and minimization procedures. The Company has framed the risk assessment and minimization procedure which is periodically reviewed by the Board.

8. SUBSIDIARY COMPANIES

Presently Silverline Cinemas Private Limited is the only wholly owned subsidiary Company of the Company. The Company did not had a material non-listed Indian Subsidiary during 2010-11.

9. CODE OF CONDUCT

The Board of Directors of the Company had laid down a Code of Conduct for all Board Members and Senior Management of the Company. This code is derived from the principles of good corporate governance, good corporate citizenship and high personal ethical standards and is applicable to all Directors and Senior Management personnel of the Company. All Directors and Senior Management Personnel of the Company have affirmed compliance with the Era E-Zone’s Code of Conduct for the financial year ended on 31/03/2011 as required under Clause-49 of the Listing Agreement.

The Board of Directors and Senior Managers affirm with the code on annual basis as at the end of each financial year (April to March).

10. CEO/CFO CERTIFICATION

A Certificate from Managing Director / Manager appointed in terms of the Companies Act, 1956 on the financial statements of the Company was placed before the Board.

11. The company has complied with all the mandatory requirement and has adopted non mandatory requirement as per details given below

COMPLIANCE WITH NON MANDATORY REQUIREMENT

(I ) REMUNERATION COMMITTEE

The Board has set up a remuneration Committee details of which are furnished at serial no. 4 of this report.

(ii) WHISTLE BLOWER POLICY.

The Company at present does not have whistle blower policy. However, the management ensures that the employees of the company have sufficient access to the audit committee as and when they desire.

12. MEANS OF COMMUNICATION

I) The quarterly results of the Company are published in leading and widely circulated English/Hindi national as per the requirements of the Listing Agreement with the Stock Exchange. The results are also faxed to the Stock Exchange where the Company is listed. The results are also published in the prescribed performa within 48 hours of the conclusion of the meeting of the Board in which they are considered and approved.

II) The quarterly Financial Results during the financial year 2010-11 were published as detailed below:

Quarters Date of Board Meeting Date of Press Release News papers

April-June, 2010

July-September,2010 13th November, 2010 15th November,2010 Jansatta and Financial Express

October-December,2010 14th February, 2011 15th February, 2011 Jansatta and Financial Express

January-March 2011* 30th May, 2011 31st May, 2011 Jansatta and Financial Express

* Audited financial results were published for the year ending on 31st March, 2011.

13) GENERAL SHAREHOLDER INFORMATION

I) ANNUAL GENERAL MEETING

The 19th Annual General Meeting is scheduled as under: Day : MondayDate : 19th September, 2011 Time : 5:00 P.M. Venue: Executive Club, 439, Village Shahoorpur, P.O. Fatehpur Beri, New Delhi-110074

II) Financial Calendar; April 2011 to March 2012.

Results for the quarter ending June 30, 2011 By 14th of August 2011

Results for the quarter ending Sept. 30, 2011 By 14th of November 2011

Results for the quarter ending December 31, 2011 By 14th of February 2012

Results for the quarter ending March 31, 2012 By 15th of May /end of May 2012

Annual General Meeting for the year ending March 2012 By end of September 2012

III) BOOK CLOSURE PERIOD

14th September, 2011 to 19th September, 2011 (both days inclusive).

IV) DIVIDEND

The Company has not declared any dividend

V) LISTING

Your Company is presently listed at Bombay Stock Exchange Limited. Listing Fee for the year 2011-12 has been paid to the Bombay Stock Exchange Limited.

VI) STOCK CODE

Stock Code for the Equity Shares of the company at Bombay Stock Exchange is 531615.

31st July, 2010 2nd August, 2010 Jansatta and Financial Express



VII) MARKET PRICE

The table mentioned herein below gives the monthly high and low closing price quotations traded at BSE for the fiscal year 2010-2011 taken from BSE website.

DATE HIGH ( ) LOW ( )

April, 2010 32.20 29.00

May, 2010 34.95 27.35

June, 2010 35.80 24.80

July, 2010 29.55 22.25

August, 2010 30.00 23.70

September, 2010 30.20 25.80

October, 2010 32.70 28.35

November, 2010 33.80 28.00

December, 2010 29.50 27.90

January, 2011 27.80 27.00

February, 2011 25.75 18.60

March, 2011 20.80 17.15

VIII) COMMON AGENCY FOR SHARE TRANSFERS AND ELECTRONIC CONNECTIVITY

Beetal Financial & Computer Services (P) Ltd.,

Beetal House, 3rd floor, 99, Madangir, (Behind Local Shopping Centre),

Near Dada Harsukhdas Mandir, New Delhi 110062.

Tel.:011 29961281- 82

Fax: 011 29961284

E Mail ID: [email protected], [email protected]

IX) SHARE TRANSFER SYSTEM

Transfer of equity shares is handled by Beetal Financial & Computer Services Private Limited. The Transferee is required to furnish transfer deed duly completed in all respects together with Share Certificate to Beetal Financial & Computer Services Private Limited at the above address in order to enable Beetal Financial & Computer Services Private Limited to process the transfer.

X) SHAREHOLDING PATTERN AND DISTRIBUTION SCHEDULE:

The Shareholding Pattern of the Company as at 31st March, 2011:

S. No. Category No. of shares held % age to thetotal shares held

A) Promoters holding Indian Promoters

1. Individual/HUF 2336025 21.08

2. Bodies Corporate 3666000 33.09

Foreign Promoters NIL NIL

(A) Sub Total(1+2) 6002025 54.17

(B) Non Promoters Holding

a) Institutional Investors

Banks, Financial Institutions, Insurance companies,

b) Central /State Govt. / institutions

c) Non Governmental Institutions

d) FIIs

Sub Total (3) -

Others: Private corporate Bodies 1735997 15.67

Indian Public 3257497 29.39

NRI/OCBs 26238 0.24

Clearing Members 3 0.00

HUF 58240 0.53

Sub Total (4) 5077975 45.83

(B) Sub total (3 + 4) 5077975 45.83

Grand Total (A+B) 11080000 100.00



PICTORIAL PRESENTATION IN THE FORM OF A PIE CHART FOR THE SHAREHOLDING PATTERN

XI) THE DISTRIBUTION SCHEDULE AS ON 31ST MARCH, 2011 IS AS UNDER:

Shareholding of. Number of % to Total No. of Shares Amount in Rs. % to Total nominal value of Rs shareholders

Up To 5000 10,185 92.02 19,64,768 1,96,47,680.00 17.7326

5001 To 10000 399 3.60 3,12,720 31,27,200.00 2.8224

10001 To 20000 381 3.44 4,95,319 49,53,190.00 4.4704

20001 To 30000 25 0.23 65,044 6,50440.00 0.5870

30001 To 40000 6 0.05 21,944 2,19,440.00 0.1981

40001 To 50000 8 0.07 37,247 3,72,470.00 0.3362

50001 To 100000 18 0.16 1,39,359 13,93,590.00 1.2578

100001 and above 46 0.42 80,43,599 8,04,35,990.00 72.5957

TOTAL 11,068 100.00 1,10,80,000 11,08,00,000.00 100.0000

Indian Promoters

Private corporate Bodies

Indian Public

NRI/OCBs

Clearing Members

HUF

XII) DEMATERIALIZATION OF SHARES

The Equity Shares of our Company are eligible for Dematerialization. The Company has signed agreements with both the depositories namely NSDL and CDSL. The ISIN allotted to Company’s Equity Shares is 1NE040E01010. Whenever any person deals in the equity shares of the Company, he/ she is required to quote the said ISIN on the debit/ credit instructions. Shareholders are advised to get in touch with any depository participant for dematerialization of their scrips.

As on 31st March, 2011, the no. of shares held in dematerialized form and in physical form are given as under:

Name of Depository Number of Shares % of total Issued Capital

National Securities Depositors Limited 7463046 67.36%

Central Depositors Services (India) Limited 428241 3.86%

Physical 3188713 28.78%

Total 11080000 100%

XIII) PLANT LOCATION

The Company as on date does not have manufacturing activity. Hence does not have plant.

XIV) OUT STANDING WARRANTS, FCCBS AND GDR/ADR

Company issued 1,80,00,000 convertible warrants, which at the option of the warrant holder will be convertible into equal number of nominal value of Rs. 10/- per share at a premium of Rs. 15/- with in a period of 18 months from the date of allotment i.e. 3rd August, 2011

XV) ADDRESS OF CORRESPONDENCE

Registered Office:

Era E -Zone (India) Ltd. 153, Okhla industrial Estate, Phase III. New Delhi 110020. Tel.: 0ll-40637000 Fax: 011-40637070

DISCLOSURES BY THE MANAGEMENT

During the year 2010-11, there have been no transactions of material nature entered into by the Company with the Management or their relatives that may have potential conflict with interest of the Company.

For and on behalf of the Board of Directors

Place: New Delhi H.S. Bharana

Dated: 13th August, 2011 Chairman



CHIEF EXECUTIVE OFFICER (CEO) / CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

We, Gaurav Chopra, Manager and Pushkar Vats, Finance Head of Era E-Zone (India) Ltd., to the best of our knowledge and belief hereby certify that:-

a) We have reviewed financial statements and the cash flow statement for the year and that 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.

b) There are, to the best of my knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d) We have disclosed based on my most recent evaluation, wherever applicable, to the company’s auditors and the audit committee of the company’s board of directors (and persons performing the equivalent functions)

i. Significant change in internal controls during the year covered by this report;

ii. all significant changes in accounting policies during the year, if any that the same have been disclosed in the notes to the financial Statements.

iii. instances of significant fraud of which we are aware, that involves management or other employees who have a significant role in the company’s internal controls system over financial reports.

Place : New Delhi Pushkar Vats Gaurav Chopra

Dated: 13th August, 2011 Finance Head Manager


COMPLIANCE

The Certificate dated 13.08.2011 obtained from Mr. R.S. Bhatia, Company Secretary in Practice forms part of this Annual Report

CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To the members of ERA E- ZONE (INDIA) LIMITED.

I have examined the compliance of conditions of Corporate Governance by Era E-Zone (India) Limited, for the styear ended on 31 March 2011, as stipulated in Clause 49 of the Listing agreement of the said Company with

Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Management. My examination was limited to procedures and impediments thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In my opinion and to the best of my information and according to the explanations given to me, I certify that the company has complied with the Corporate Governance as stipulated in the above mentioned Listing Agreement.

I 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.

R.S. Bhatia.

Place: New Delhi Company Secretary in Practice

Dated: 13th August, 2011 C.P. No. 2514


AUDITORS’ REPORTThe Members, Era E-Zone (India) LimitedNew Delhi. REPORT ON THE ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2011 IN COMPLIANCE WITH SECTION 227(2) OF THE COMPANIES ACT, 1956.

1. We have audited the attached balance sheet of Era E-Zone India Limited as at 31st March, 2011 and the profit & loss account and also 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) issued by 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 purpose of our audit;

ii) In our opinion, proper books of account as required by the law have been kept by the company, so far as appears from our examination of those books ;

iii) The balance sheet, profit & 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 & loss account and cash flow statement dealt with this report comply with the accounting standards referred in section 211(3C) of the Companies Act, 1956 ;

stv) On the basis of the written representations received from the directors as on 31 March, 2011 and taken on strecord by the Board of Directors, we report that none of the directors is disqualified as on 31 March, 2011 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 read together with the notes to accounts in Schedule “O” give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

sta) In the case of Balance Sheet, of the state of affairs of the company as at 31 March, 2011 ;

b) In the case of Profit & Loss Account, of the Loss of the company for year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For P.C. BINDAL & CO.Chartered Accountants

FRN : 003824N

PLACE : New Delhi [CA. K. C. Gupta]thDATED : 30 May, 2011 Partner

M. No. : 088638


ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS STOF ERA E-ZONE (INDIA) LIMITED FOR THE YEAR ENDED ON 31 MARCH, 2011

i) a) The company has maintained proper records showing full particulars including quantitative details and

situation of fixed assets.

b) The fixed assets of the company have been physically verified during the year by the management and

no material discrepancies between the book records and the physical inventory have been noticed.

c) During the year, the company has not disposed off substantial part of fixed assets.

ii) a) As explained to us, the inventory has been physically verified during the year by the management. In our

opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of

physical verification of inventories followed by the management are reasonable and adequate in relation

to the size of the company and the nature of its business.

c) In our opinion and according to the information and explanations given to us and on the basis of our

examination of the records of inventory, the company is maintaining proper records of inventory and no

discrepancies has been noticed on verification between the physical stocks and the books records.

iii) a) According to the information and explanations given to us, the company has granted interest free

unsecured loans to one wholly owned subsidiary company. The maximum amount involved during the

year was Rs.69.76 lacs and the year end balance of loans granted to such party was Rs. 69.76 lacs.

b) In our opinion, terms and conditions of the above said loan which has been given to subsidiary

company which is not required to be covered in the register maintained under section 301 of the

Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

c) In our opinion and according to the information and explanations given to us, the company is receiving

the principal amount as stipulated or as re-stipulated.

d) According to the information and explanations given to us, there is no overdue amount of loans

granted to companies, firms or other parties listed in the register maintained under Section 301 of the

Companies Act, 1956.

e) According to the information and explanations given to us, the company has not taken any loan,

secured or unsecured, from companies, firms or other parties covered in the register maintained under

section 301 of the Companies Act, 1956. In view of the above, clause 4(iii) (e) to (g) of the Order are not

applicable in respect of the Company. iv) In our opinion and according to the information and explanation given to us, there are adequate

internal control systems commensurate with the size of the company and the nature of its business with

regard to purchases of inventory and sales of goods. During the course of our audit, we have not

observed any major weakness in internal controls.


v) a) According to the information and explanations given to us, we are of the opinion that the particulars of

contracts or arrangements referred to in section 301 of the companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in

pursuance of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have

been made at prices which are reasonable having regard to prevailing market prices at the relevant

time.

vi) In our opinion and according to the information and explanations given to us, the company has not

accepted any deposits from public to which provisions of sections 58A and 58AA of the Companies Act,

1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. No order has been passed by the

Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any

other Tribunal.

vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its

business. The directors are themselves implementing the system.

viii) Clause 4(viii) of Companies (Auditors’ Report) Order, 2003 (as amended) regarding maintenance of cost

records under section 209 (1) (d) of the Companies Act, 1956 is not applicable to the company.

ix) a) According to the information and explanations given to us and according to the books and records

produced before us, the company is regular in depositing with appropriate authorities undisputed

statutory dues including provident fund, investor education and protection fund, employees’ state

insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other

material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect

of provident fund, investor education and protection fund, employees’ state insurance income tax, sales

tax, wealth tax, service tax, customs duty, excise duty and cess and other material statutory dues stapplicable to it were in arrears, as at 31 March, 2011 for a period of more than six months from the

date they become payable.

c) According to the information and explanations given to us, there are no dues of sales tax, income tax,

customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of

any dispute.

x) The company does not have any accumulated losses as at the end of the year. During the year under

review, the company has incurred cash losses and also cash losses in the immediately preceding financial

year.

xi) In our opinion and according to the information and explanations given to us, the company has not

defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii) According to the information and explanations given 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

provision of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not

applicable to the company. xiv) In our opinion and according to the information and explanations given to us , the company is not

dealing in or trading in shares, securities, debentures and other investments, Accordingly, the provisions

of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the

company.

xv) According to the information and explanations given to us, the company has not given any guarantee

for loans taken by others from banks and financial institutions.

xvi) According to the information and explanations given to us, the company has not availed any term loan

during the year under audit.

xvii) According to the information and explanations given to us and on an overall examination of the balance

sheet and cash flow statement of the company, we report that no funds raised on short-term basis have

been used for long-term investment.

xviii) According to the information and explanations given to us, the company has not made

preferential allotment of shares to parties and companies covered in the register maintained under

section 301 of the Act.

xix) According to the information and explanations given to us, the company had not issued any debentures

during the year.

xx) According to the information and explanations given to us, the company had not raised any money by

public issue during the year.

xxi) According to the information and explanations given to us, no fraud on or by the company has been

noticed or reported during the course of our audit.


FRN : 003824N


M. No. : 088638

PARTICULARS SCHEDULE AS AT AS AT 31.03.2011 31.3.2010

I SOURCES OF FUNDS

1. SHARE HOLDERS’ FUNDS

Share Capital “A” 110,800,000 110,800,000

Reserve & Surplus “B” 302,071,332 345,762,130

412,871,332 456,562,130

2. LOAN FUNDS

Secured Loans “C” 44,444,445 66,701,223

44,444,445 66,701,223

TOTAL (1+2) 457,315,777 523,263,353

II APPLICATION OF FUNDS

1. FIXED ASSETS “D”

Gross Block 85,223,305 85,657,555

Less : Accumulated Depreciation 19,091,750 11,935,277

Net Block 66,131,555 73,722,278

Capital Work in Progress 346,042,662 343,827,669

412,174,217 417,549,947

2. INVESTMENTS “E” 9,785,474 9,785,473

3. CURRENT ASSETS, LOANS & ADVANCES “F”

Inventories 866,566 9,751,656

Cash & Bank Balances including FDRs 10,238,094 9,456,316

Loans & Advances 44,866,978 81,736,658

55,971,639 100,944,630

LESS : CURRENT LIABILITIES & PROVISIONS “G”

Current Liabilities 20,270,073 17,845,397

Provisions 345,480 256,510

Net Current Assets 35,356,085 82,842,723

4 DEFERRED TAX ASSETS (NET) - 13,085,211

TOTAL (1+2+3+4) 457,315,777 523,263,353

Significant Accounting Policies and Notes to Accounts “O”


ERA E-ZONE (INDIA) LIMITEDBALANCE SHEET AS AT 31th March, 2011

The schedule referred to above form an integral part of Balance SheetAs per report of even date attached

For P.C. Bindal & Co. For and on behalf of the BoardChartered Accountants FRN: 003824N

(CA. K.C. Gupta) (H.S.Bharana) (Amit Bharana) (Kapil Kumar) Partner Chairman Managing Director Company SecretaryM. No. 088638

Place: New Delhi Dated: 30th May, 2011

(Amount in )

ERA E-ZONE (INDIA) LIMITED PROFIT & LOSS ACCOUNT FOR THE Period ENDED 31th March, 2011

PARTICULARS SCHEDULE AS AT AS AT 2010-11 2009-10

I. INCOME

Income from operations “H” 83,225,742 79,604,142

Other Income “I” 3,010,850 1,709,593

TOTAL (1) 86,236,592 81,313,735

II. EXPENDITURE

Purchases “J” 9,249,938 8,454,413

Cost of Running Expenses “K” 33,563,644 32,033,788

(Increase)/ Decrease in stock 8,885,090 282,836

Personnel Costs “L” 11,066,220 11,077,847

Administrative & Selling Expenses “M” 41,152,402 44,846,729

Financial Expenses “N” 5,630,482 7,867,649

Depreciation “D” 7,294,404 8,259,169

TOTAL (2) 116,842,180 112,822,432

Profit Before Tax (1-2) (30,605,588) (31,508,697)

Less: Tax Expenses

- Current Tax - -

- Earlier Year Tax - -

- Deferred Tax - (9,744,303)

- Deferred Tax Assets Reversed 13,085,211 -

Profit After Tax (43,690,799) (21,764,394)

Balance of Profit and Loss account brought forward 89,609,632 111,374,028

Surplus carried over to Balance Sheet 45,918,832 89,609,634

Earning Per Share

(Rs. Per Equity share of Rs. 10/- each)

- Basic (3.94) (1.96)

- Diluted (3.94) (1.96)

The schedule referred to above form an integral part of profit & loss account. As per report of even date attached





Significant Accounting Policies and Notes to Accounts “O”

(Amount in )


ERA E-ZONE (INDIA) LIMITEDCASH FLOW STATEMENT FOR THE YEAR ENDED 31ST March, 2011

PARTICULARS AS AT AS AT

31.03.2011 31.3.2010

Cash Flow from Operating Activities

Net Profit before taxation (30,605,588) (31,508,697)

Adjustments forAdd :Depreciation 7,294,404 8,259,169

Interest Expenses 5,489,921 7,867,649

Loss on Sale of Assets (Net) - 1,525,236

Deduct : Dividend Income (2,555) (5,193)

Interest Income (133,789) (4,376)

Profit on Sale of Assets (30,805) -

Operating Profit Before working capital change (17,988,412) (13,866,211)

(Increase) / Decrease In Inventory 8,885,090 282,836

(Increase) / Decrease In Sundary Debtors - 10,868,990

(Increase) / Decrease In Loans & Advances 36,869,681 54,918,549

Increase / ( Decrease ) In Sundary Creditors 4,281,964 (11,105,144)

Increase / ( Decrease ) in other Current Liablities (1,768,318) (1,029,453)

Cash generated from Operation 30,280,004 40,069,567

Income tax paid - -

Net Cash Flow from Operating Activities (A) 30,280,004 40,069,567

Cash Flow Investing Activities

Fixed Assets (72,876) (4,327,085)

Capital Work in Progress (2,214,993) (3,245,344)

Purchase of Investments - (4,799,999)

Proceeds from sale of assets 400,000 6,463,053

Dividend Income 2,555 5,193

Interest Income 133,789 4,376

Net Cash Flow Investing Activities ( B) (1,751,525) (5,899,806)

Cash Flow Financing Activities

Share Capital ( Including Premium) - -

Share Warrants - -

Unsecured Loan - -

Secured Loan (22,256,778) (22,367,710)

Interest Paid (5,489,921) (7,867,649)

Net Cash Flow Financing Activities (C ) (27,746,699) (30,235,360)

Net Increase / (Decrease) in Cash & cash equivalents ( A + B + C ) 781,779 3,934,402

Cash & Cash Equivalents at beginning of the year 9,456,316 5,521,914

Cash & Cash equivalents at end of the year (Refer schedule F(c ) 10,238,094 9,456,316

of the financial statement)

Note: The above Cash Flow Statement has been prepared under the “indirect method” as stated in Accounting Standered-3




(Amount in )

ERA E-ZONE (INDIA) LIMITEDSCHEDULE FORMING PART OF BALANCE SHEET


31.03.2011 31.3.2010

SCHEDULE “A”

SHARE CAPITAL

AUTHORISED

3,00,00,000 Equity Shares of Rs. 10/- each 300,000,000 300,000,000

ISSUED, SUBSCRIBED & PAID UP

11,080,000 (P.Y. 11,080,000) Equity Shares of Rs. 10/- each 110,800,000 110,800,000

fully paid up issued for cash

110,800,000 110,800,000

SCHEDULE “B”

RESERVES & SURPLUS

a) Securities Premium Account :

Balance B/F 255,012,500 255,012,500

Add: Addition During The Year - -

255,012,500 255,012,500

b) Special Reserve 1,140,000 1,140,000

c) Profit & Loss Account 45,918,832 89,609,630

TOTAL 302,071,332 345,762,130

SCHEDULE “C”

SECURED LOANS

Term Loan 44,444,445 66,666,667

Vehicle Loan - 34,556

- -

TOTAL 44,444,445 66,701,223

Note :

Term Loan from Yes Bank Ltd is secured against exclusive charge on whole of

the movable assets relating to 9 screens & 3 food court and current assets of

the Company, both present and future pertaining to units at various locations.


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SCHEDULE “E” INVESTMENTS ( Long Term ) Book Value Market Value

A) QUOTED SHARES ( Non Trade) NO. OF SHARES (Amount in Rs) (Amount in Rs) (Amount in Rs)

1 Castrol India Ltd 30 4,577 13,253 4,577

2 Choksi Tube Company Ltd. 200 8,029 1,306 8,029

3 Indo Bosch Gems and Jwellery Ltd. 100 3,885 100 3,885

4 Indo French BioTech Enterprises Ltd. 1000 47,500 600 47,500

5 ITC LTD 750 102,470 136,088 102,470

6 JSL Stainless Ltd. 220 26,729 17,402 26,729

7 Jindal Steel & Power Ltd. 2400 17,819 167,664 17,819

8 Nagarjuna Fertilizers & Chemicals Ltd 100 3,434 2,820 3,434

9 Nahar Sugar & Allied Industries Ltd. 400 25,710 25,710 25,710

10 NEPC India Ltd. 520 60,300 2,132 60,300

11 NEPC Tea Garden Ltd. 6 114 8 114

12 Paam Pahrmaceuticals (Delhi) Limited 500 37,490 1,575 37,490

13 Pasupati Spinning and Weaving Mills Ltd. 200 24,900 1,300 24,900

14 Ready Food Ltd. 1800 47,558 4,860 47,558

15 Rohini Strips Ltd. 400 11,188 140 11,188

16 Saraswati Industrial Syndicate Ltd. 100 36,381 85,500 36,381

17 Skyline NEPC Ltd. 600 30,580 456 30,580

18 Surlux Diagnostic Ltd. 1000 34,700 1,400 34,700

19 Vikas Hybride Ltd. 200 14,090 14,090 14,090

20 Western Paques (I) Ltd. 100 24,745 220 24,745

21 Whirpool of India Ltd. 125 30,025 30,719 30,025

Total (A) 592,224 507,343 592,224

B) UNQUOTED

1 DEBENTURES (Non Trade)

Paam Pharmaceuticals (Delhi) Limited 100 7,000 7,000

Total (B) 7,000 7,000

2 SUBSIDIARIES (Trade)

a) Silverline Cinemas Private limited 500,000 4,386,250 4,386,250

Total (C) 4,386,250 4,386,250

b) Samdarya & Era Pictures Private limited

SHARES - UNQUOTED 50,000 50,000

SHARE APPLICATION MONEY PAID 4,750,000 4,750,000

4,800,000 4,800,000

TOTAL (A+B+C) 9,785,474 9,785,474

The aggregate book value and market value of quoted investments and book value of unquoted investment are as follow:

Quoted Investment

- Aggregate book value Rs. 5.92 lacs

- Aggregate market value Rs. 5.07 lacs

Aggregate book value of unquoted investments Rs. 91.93 lacs



31.03.2011 31.3.2010


(Amount in )


31.03.2011 31.3.2010

SCHEDULE “F”

CURRENT ASSETS, LOANS & ADVANCES

A) CURRENT ASSETS

a) INVENTORIES

Shares - 9,215,568

Food & Beverage 866,566 536,088

Total (a) 866,566 9,751,656

b) SUNDRY DEBTORS

Total (b) - -

c) CASH AND BANK BALANCES including FDRs

i) Cash in Hand 85,519 149,013

ii) Fixed Deposit Receipts 6,050,000 50,000

iii) Bank Balances with Scheduled Bank in 4,102,575 9,257,303

current accounts

Total (c) 10,238,094 9,456,316

Total (A) (a+b+c) 11,104,660 19,207,972

B) LOANS AND ADVANCES

(Unsecured, considered good)

a) Advances recoverable in cash or in kind

or for value to be received 16,706,753 22,856,038

b) Loans - Subsidiary 6,976,069 6,678,693

c) Advances for purchase of Real Estate Projects 21,171,013 52,171,013

d) Prepaid Taxes 13,143 30,913

Total (B) 44,866,978 81,736,659

Total (A+B) 55,971,639 100,944,631

SCHEDULE “G”

CURRENT LIABILITIES & PROVISIONS

a) CURRENT LIABILITIES

Sundry Creditors

- Outstanding with MSME - -

- Others 16,562,707 12,280,743

Others Current Liabilities 3,707,366 5,564,654

Total (a) 20,270,073 17,845,397

b) PROVISIONS

Provision for Tax (net of Prepaid Taxes) - -

Provision for Retirement Benefits 345,480 256,510

Total (b) 345,480 256,510

Total (a+b) 20,615,553 18,101,907



(Amount in )

ERA E-ZONE (INDIA) LIMITED SCHEDULE FORMING PART OF PROFIT & LOSS ACCOUNT


2010-2011 2009-2010

SCHEDULE “H”

INCOME FROM OPERATIONS

Ticket Collection 57,500,349 59,155,892

Sales Candy / Canteen Sales. 21,548,593 20,448,250

Sales -Others 4,176,800 -

83,225,742 79,604,142

SCHEDULE “I”

OTHER INCOME

Interest Income (TDS of Rs.12,918) 133,789 4,376

Dividend Received (From Long Term Investments) 2,555 5,193

Profit on Sale on Fixed Assets 30,805 -

Misc. Income 2,843,701 1,700,024

3,010,850 1,709,593

SCHEDULE “J”

PURCHASES

Purchases - Food & Beverages 9,249,938 8,454,413

9,249,938 8,454,413

SCHEDULE “K”

COST OF RUNNING EXPENSES

Entertainment Tax 6,091,176 6,332,569

VAT/Sale Tax 2,762,180 2,354,578

Film Hire Charges 19,243,172 19,984,050

Electricity & Water Expenses 4,219,521 2,526,704

Cineplex Expenses - Other 1,247,595 835,887

33,563,644 32,033,788

SCHEDULE “L”

PERSONNEL COSTS

Salaries, Wages & Bonus 7,504,623 8,725,435

Director’s Remuneration 3,109,934 1,841,323

Contribution to Provident & Other Funds 400,377 457,130

Staff Welfare Expenses 51,285 53,959

11,066,220 11,077,847


(Amount in )


ERA E-ZONE (INDIA) LIMITED SCHEDULE FORMING PART OF PROFIT & LOSS ACCOUNT


2010-2011 2009-2010

SCHEDULE “M” ADMINISTRATIVE & SELLING EXPENSES

Printing & Stationery 1,010,702 386,481

Auditors’ Remuneration 358,475 330,900

Legal & Professional 751,998 1,565,528

Travelling & Conveyance 140,951 111,252

Advertisement 386,552 422,279

Rates & Taxes 106,060 94,840

Watch & Ward 1,138,586 1,250,173

Meeting Expenses 58,177 43,480

Insurance 297,363 390,471

Loss on Sale of Fixed Assets - 1,525,236

Rent 8,366,850 5,969,000

Projector Rental Charges 814,597 106,500

Film Exbhition Conducting Expenses 7,920,000 8,708,573

House Keeping Exp 1,482,842 1,069,767

Postage, Telegram & Telephone 446,569 500,963

Repair & Maintenance 9,763,906 6,484,514

Other Expenses 8,108,774 15,886,772

41,152,402 44,846,729

SCHEDULE “N”

FINANCIAL EXPENSES

Bank Charges 166,370 219,251

Interest on Term Loan 5,322,678 7,633,647

Interest on Vehicle Loan 873 14,752

Interest Paid - Others 140,561 -

5,630,482 7,867,649

(Amount in )


ERA E-ZONE (INDIA) LIMITEDSCHEDULES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011

SCHEDULE “O”

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with applicable accounting standards issued by the Institute of Chartered Accountants of India and the relevant presentational requirements of the Companies Act, 1956. A summary of important accounting policies applied are set out below;

1. BASIS OF ACCOUNTING

Financial statements are prepared under historical cost convention and on the basis of a going concern.

2. REVENUE RECOGNITION

i) Revenue comprises of income from entertainment inclusive of Cineplex operation and other Income.

ii) Dividend income is considered on receipt basis.

iii) Revenue from sale of goods is recognized when all significant risks and rewards of ownership of goods are transferred to the buyer.

3. FIXED ASSETS

Fixed assets are recorded at cost of acquisition. They are stated at historical cost less accumulated depreciation.

4. DEPRECIATION

Depreciation has been provided as per straight line method at the rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on addition / disposal during the year has been provided on prorata basis.

5. IMPAIRMENT

Fixed Assets are tested for impairment if there is any indication of their possible impairment. An impairment loss is recognized where the carrying amount of a fixed asset (or cash generating unit) exceeds its recoverable amount, i.e. higher of value in use and net selling price. Impairment loss recognized in one year can get reversed fully or partly in a subsequent year.

6. INVENTORIES

i) Inventories are valued at cost or last quoted market prices, whichever is lower.

ii) Value of inventories of items that are not ordinarily interchangeable or are meant for specific projects is assigned by specific identification of their individual cost and net realizable value.

iii) Inventories are valued at cost or Net Realizable Value whichever is lower on FIFO basis

7. INVESTMENTS

Investments are classified into long-term investments and current investments. Long-term investments are stated at cost. Provision for diminution in the value of a long-term investment is made if such diminution is other than temporary. Current investments are carried at the lower of cost and fair value and provisions are made to recognize the decline in the carrying value.

8. EMPLOYEE BENEFITS

I) Contribution to Provident Fund is accounted for on accrual basis. The company continues to make Contribution to Provident Fund plan administered by the government of India.

ii) Gratuity and leave encashment are charged to profit & loss account through provision for accruing liabilities based on assumptions that such benefits are payable to eligible employees at the end of accounting year.

9. FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rates prevailing at the dates of the respective transactions.


10. INCOME TAX

Income taxes are computed using the tax effect accounting method where taxes are accrued in the same period, as the related revenue and expenses to which they relate. The differences that exist between profit offered for income tax and the profit before tax as per financial statements are identified and deferred tax assets or deferred tax liabilities are recorded for timing differences, namely, differences that originate in one accounting period and are capable of reversal in future. Deferred tax assets and liabilities are measured using tax rates and tax laws enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only if there is reasonable certainty that they will be realized. Should the company have unabsorbed depreciation or carried forward losses under taxation laws, a much stricter test, viz, virtual certainty of realisation, is to be applied for recognition of any deferred tax assets. Deferred tax assets are reviewed for the continuing appropriateness of their recognition as assets at each balance sheet date and written down or written-up to reflect the amount that is reasonably /virtually certain (as the case may be) of realization.

11. Borrowing Cost

Borrowing costs are attributable to the acquisition of qualifying assets are capitalized as part of cost of such assets till such time assets become ready for their intended use. All other borrowing costs are charged to Profit & Loss Account.

B. NOTES TO ACCOUNTS

1. Maximum amount due at any time during the year from Concern /Companies, in which directors and / or their relatives are interested,


(Rupees in Lacs ) (Rupees in Lacs)

Era Landmarks Limited 8.61 397.34

Era Buildwell (India) Limited - 34.11

Era Infra Engineering Limited - 0.74

2. Contingent Liabilities not provided for Rs. Nil (Previous Year Rs.NIL).

3. Managerial remuneration paid / payable to the directors:


(In Rupees) (In Rupees)

i) Remuneration 12, 11,694 7, 36,225

ii) Allowances 18, 98,240 11, 05,098

31, 09,934 18, 41,323

4. Amount Paid / Payable to Auditors:


(In Rupees) (In Rupees)

a) Audit Fee 1, 93,025 1,65,450

b) Taxation Matters 55,150 55,150

c) Tax Audit Fee 55,150 55,150

d) Others 55,150 55,150

3, 58,475 3, 30,900

5. In the opinion of board of directors all the current assets, loans & advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and that all the known liabilities relating to the year have been provided for.

6. Provisions for diminution in the value of long term investments has not been made as in the opinion of the board, such diminution is temporary.

7. There are no payments due to Micro, Small & Medium Enterprise.

8. Disclosure required by clause 32 of the listing agreement.


9. Related Party Disclosures:

A) Wholly Owned Subsidiaries:

Silverline Cinemas Private Limited

B) Names of other related parties with whom transactions have taken place during the year:

I. Associates:

Era Infra Engineering Limited

Era Landmarks Limited

ii. Individual owing significant shareholding and occupying key management position and his relatives.

Mr. H.S. Bharana – Chairman

Mr. Amit Bharana – Managing Director

Related Party Transactions and Balances:

A. Particulars of loan and advances in the nature of loans

1. To Subsidiary - Silverline Cinemas Pvt. Ltd 69.76 69.76 66.79 99.04

2. To Associate - - - -

3. To Firms/Companies in which directors - - - -are interested

4. (a) Where there is no repayment scheduled or - - - -repayment schedule is beyond seven years

- Silverline Cinemas Pvt. Ltd. 69.76 69.76 66.79 99.04

(b) No interest is stipulated or it is below bank rate

- Silverline Cinemas Pvt. Ltd. 69.76 69.76 66.79 99.04

B. Investment in the shares of the company or anyof its subsidiaries by any of the loanees as stated above - - - -

( In lacs)

Particulars

Year Ended 31.03.2011 Year Ended 31.03.2010

Yearend

balance

Yearend

balance

MaximumAmount

outstandingduring the year

MaximumAmount

outstandingduring the year

Particulars

SubsidiaryJoint Ventures &

Associates

Individual Owing significant

shareholding

Other KeyManagement

PersonnelTotal

Current (Rs. InLacs)





Previous (Rs. In Lacs)





Purchase of Assets - 21.56 - - - - - - - 21.56

Loan Given 2.97 - - - - - - - 2.97 -

Repayment of loan received - 32.25 - - - - - - - 32.25

Repayment of Loan Paid - - 8.61 - - - - - 8.61 -

Reimbursement of Exps. Paid - - 42.88 - - - - - 42.88 -

Salary paid - - - - 31.10 18.41 0.55 0.55 31.65 18.96

Duefrom (as at year-end) 69.76 66.79 - 8.61 - - - - 69.76 75.40

Due to (as at year-end) - - 20.97 - - - - - 20.97 -


10. SEGMENT REPORTING

During the year Company was operating in only one activity called Entertainment Business (Cinema & Foodcourt). So, Segment reporting based on the guiding principles giving in the accounting standard (AS-17) on segment reporting issued by the Institute of Chartered Accountants of India, discontinued.

11. Break up of deferred tax assets and deferred tax liabilities;Deffered Tax Assets March 31,2011* March 31,2010

(a) Retirement Benefits 0.00 0.79

(b) Capital Expenditure 0.00 0.58

(c) Carried forward losses 0.00 151.38

Deffered Tax Liabilities

(a) Deifference in deperication for accounting and tax purposes 0.00 21.90

Net Deferred Tax Assets 0.00 130.85

(* As a matter of prudence the company has reversed the brought forward deferred tax asset and further no such asset created)

12. EARNING PER SHARE

CALCULATION OF EARNING PER SHARE- BASIC & DILUTED

Year Ended Year Endedst31 March 2011 31 March 2010

Earnings (Rs) Basic Diluted Basic Diluted

Net profit attributable to equity shareholders (43,690,799) (43,690,799) (21,764,394) (21,764,394)

Shares

Weighted average number of equity shares 11,080,000 11,080,000 11,080,000 11,080,000

outstanding during the year


resulting from dilutive instruments

Weighted average number of equity shares for 11,080,000 11,080,000 11,080,000 11,080,000

calculation of earnings per share

Earnings per share of face value of Rs. 10/- (3.94) (3.94) (1.96) (1.96)

13. Expenditure /Income in Foreign Currency - NIL

14. Previous Year Figures have been regrouped/ rearranged wherever necessary to make figures comparable.

15. All figures have been stated in rupees and rounded off to the nearest rupee except as stated otherwise.

16. Schedule “A” to “O” are integral part of Balance Sheet and Profit and Loss Account.

For and on Behalf of the Board

As per our report of even date attachedFor P.C. BINDAL & CO. (H.S. Bharana) Amit Bharana)Chartered Accountants Chairman Managing DirectorFRN: 003824N

(CA. K. C. Gupta) Partner (Kapil Kumar) M. No. 088638 Company Secretary Place: New Delhi

thDated: 30 May, 2011

st

( in thousand)

Balance Sheet abstract and Company’s general business profile as required under part IV of the Schedule VI of the companies Act, 1956

I. Registration DetailsRegistration No. 051603State Code 55Balance Sheet date 31.03.2011

II. Capital raised during the yearPublic Issue NILRights Issue NILBonus issue NILPrivate placement NIL

III. Position of mobilisation and deployment of fundsTotal Liabilities 457,316Total Assets 457,316Source of Fund :Paid up Capital 110,800Share Application Money -Convertible Warrants -Reserve and Surplus 302,071Secured loans 44,444Unsecured loans -Deferred Tax Liability -TOTAL 457,316Application of Funds:Net Fixed assets 412,174Investment 9,785Net Current assets 35,356Deferred Tax Assets -Accumulated Losses -TOTAL 457,316

IV. Performance of the CompanyTurnover 86,237Total Expenditure 116,842Profit before tax (30,606)Profit after tax (43,691)Earning per share of Rs. 10/- each - Basic (3.94) - Diluted (3.94)

V Dividend RateGeneric name of the principal products of the company ITC Code No.( ITC Code)Product description Entertainment/Cineplex





AUDITORS’ REPORT

The Members, Era E-Zone (India) LimitedNew Delhi.

1. We have audited the attached Consolidated Balance Sheet of Era E-Zone (India) Limited ('the Company') and its subsidiaries (collectively referred as 'Era E-Zone Group') as at March 31, 2011 and 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 Company's management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on theses financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standard 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 amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for your opinion.

3. We report that the consolidated financial statements have been prepared by the Company's management in accordance with the requirements of the Accounting Standards (AS) 21, Consolidated Financial Statements and Accounting Standard (AS) 27, Financial Reporting of interests in Joint Ventures issued by the Institute of Chartered Accountants of India.

4. Based on our audit on financial statement 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 with the accounting principles generally accepted in India.

(I) In the case of the Consolidated Balance Sheet, of the state of affairs of the ERA E-Zone Group as at March 31, 2011;

(ii) In the case of Consolidated Profit and Loss Account, of the loss for the year ended on that date and

(iii) In the case of Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.


FRN : 003824N


M. No. : 088638


PARTICULARS SCHEDULE AS AT AS AT 31.03.2011 31.3.2010

I SOURCES OF FUNDS

1. SHARE HOLDERS’ FUNDS

Share Capital “A” 110,800,000 110,800,000

Reserve & Surplus “B” 294,244,226 340,833,873

405,044,226 451,633,873

2. LOAN FUNDS

Secured Loans “C” 44,444,445 66,701,223

44,444,445 66,701,223

TOTAL (1+2) 449,488,671 518,335,096

II APPLICATION OF FUNDS

1. FIXED ASSETS “D”

Gross Block 85,223,305 89,737,229

Less : Accumulated Depreciation 19,091,750 13,567,147

Net Block 66,131,555 76,170,082

Capital Work in Progress 346,042,662 341,379,605

412,174,217 417,549,687

2. INVESTMENTS “E” 5,399,224 5,399,224

3. CURRENT ASSETS, LOANS & ADVANCES “F”

Inventories 866,566 9,751,656

Cash & Bank Balances including FDRs 10,396,218 9,573,215

Loans & Advances 41,254,696 78,803,097

52,517,480 98,127,968

LESS : CURRENT LIABILITIES & PROVISIONS “G”

Current Liabilities 20,301,509 17,998,014

Provisions 345,480 256,510

Net Current Assets 31,870,491 79,873,444

4. MISCELLANEOUS EXPENDITURE “H” 44,739 55,922

5. DEFERRED TAX ASSETS (NET) - 15,456,819

TOTAL (1+2+3+4+5) 449,488,671 518,335,096

Significant Accounting Policies and Notes to Accounts “P”

ERA E-ZONE (INDIA) LIMITED CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2011

The schedule referred to above form an integral part of Consolidated Balance SheetAs per report of even date attached





(Amount in )

ERA E-ZONE (INDIA) LIMITED PROFIT & LOSS ACCOUNT FOR THE Period ENDED 31th March, 2011

PARTICULARS SCHEDULE AS AT AS AT 2010-11 2009-10

I. INCOME

Income from operations “I” 83,225,742 79,604,142

Other Income “J” 3,010,850 1,709,593

TOTAL (1) 86,236,592 81,313,735

II EXPENDITURE

Purchases “K” 9,249,938 8,454,413

(Increase)/ Decrease in stock 8,885,090 282,836

Cost of Running Expenses “L” 33,567,749 32,033,788

Personnel Expenses “M” 11,066,220 11,077,847

Administrative & Selling Expenses “N” 41,648,024 43,851,221

Loss on Sale of Fixed Assets - 1,525,236

Financial Expenses “O” 5,658,255 7,867,649

Depreciation “D” 7,294,404 9,114,671

TOTAL (2) 117,369,680 114,207,662

Profit Before Tax (1-2) (31,133,089) (32,893,927)

Less: Tax Expenses

- Current Tax - -

- Earlier Year Tax - -

- Deferred Tax - (10,746,297)

- Deferred Tax Assets Reversed 15,456,819 -

Profit After Tax (46,589,908) (22,147,630)

Less: Loss on sale of subsidiaries

Balance of Profit and Loss account brought forward 84,681,373 106,829,003

Surplus carried over to Balance Sheet 38,091,465 84,681,373

Earning Per Share

(Rs. Per Equity share of Rs. 10/- each)

- Basic (4.20) (2.00)

- Diluted (4.20) (2.00)

The schedule referred to above form an integral part of consolidated profit & loss account. As per report of even date attached




Significant Accounting Policies and Notes to Accounts “P”


(Amount in )

ERA E-ZONE (INDIA) LIMITEDCONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011


31.03.2011 31.3.2010

Cash Flow from Operating Activities

Net Profit before taxation & extraordiniary (31,133,089) (32,893,927)

Adjustments for

Add

Depreciation 7,294,404 9,114,671

Provision written Back 11,183 11,183

Interest Expenses 5,658,255 7,867,649

Loss on sale of assets (Net) - 1,525,236

Deduct : Dividend Income (2,555) (5,193)

Interest Income (133,789) (4,376)

Fixed Assets Written Off - 478,004

Profit on Sale of assets (30,805) - Operating Profit Before working capital change (18,336,395) (13,906,753)

(Increase) / Decrease In Inventory 8,885,090 282,836

(Increase) / Decrease In Sundary Debtors - 10,868,990

(Increase) / Decrease In Loans & Advances 37,548,401 52,728,863

Increase / ( Decrease ) In Sundary Creditors 4,281,964 (11,105,145)

Increase / ( Decrease ) in other Current Liablities (1,889,499) (931,986)

Cash generated from Operation 30,489,561 37,936,806

Income tax paid - -

Net Cash Flow from Operating Activities (A) 30,489,561 37,936,808

Cash Flow Investing Activities

Purchase of Fixed Assets (72,876) (4,327,085)

Capital Work in Progress (2,214,993) (3,245,344)

Proceeds from sale of Investments - (4,800,000)

Net Proceed fron sale of assets 400,000 8,618,887

Dividend Income 2,555 5,193


Net Cash Flow Investing Activities ( B) (1,751,526) (3,743,973)

Cash Flow Financing Activities

Increase in Share Capital ( Including Premium) - -

Issue of Convertible Warrants - - Unsecured Loan - - Secured Loan (22,256,779) (22,367,710)

Interest Paid (5,658,255) (7,867,649)

Net Cash Flow Financing Activities ( C ) (27,915,034) (30,235,359)

Net Increase / (Decrease) in Cash & cash equivalents ( A + B + C ) 823,002 3,957,476

Cash & Cash Equivalents at beginning of the period 9,573,215 5,615,740

Cash & Cash equivalents at end of the year (Refer schedule F(c ) 10,396,218 9,573,215

of the financial statement)

Note: The above Cash Flow Statement has been prepared under the “indirect method” as stated in Accounting Standard - 3





(Amount in )

ERA E-ZONE (INDIA) LIMITED SCHEDULE FORMING PART OF CONSOLIDATED BALANCE SHEET


31.03.2011 31.3.2010

SCHEDULE “A”

SHARE CAPITAL

AUTHORISED

3,00,00,000 Equity Shares of Rs. 10/- each 300,000,000 300,000,000

ISSUED, SUBSCRIBED & PAID UP

110,80,000 (P.Y. 1,10,80,000) Equity Shares of Rs. 10/- each 110,800,000 110,800,000

fully paid up issued for cash

110,800,000 110,800,000

SCHEDULE “B”

RESERVES & SURPLUS

a) Securities Premium Account

Balance B/F 255,012,500 255,012,500

Addition During The Year

255,012,500 255,012,500

b) Special Reserve 1,140,000 1,140,000

c) Profit & Loss Account 38,091,726 84,681,373

TOTAL 294,244,226 340,833,873

SCHEDULE “C”

SECURED LOANS

Term Loan 44,444,445 66,666,667

Vehicle Loan - 34,556

TOTAL 44,444,445 66,701,223

Note :

Term Loan from Yes Bank Ltd is secured against exclusive charge on whole of

the movable assets relating to 9 screens & 3 food court and current assets of

the Company, both present and future pertaining to units at various locations.


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ERA E-ZONE (INDIA) LIMITED SCHEDULE FORMING PART OF CONSOLIDATED BALANCE SHEET


31.03.2011 31.3.2010

SCHEDULE “E” INVESTMENTS ( Long Term ) Book Value Market Value

A) QUOTED SHARES ( Non Trade) NO. OF SHARES (Amount in Rs) (Amount in Rs) (Amount in Rs)

1 Castrol India Ltd 30 4,577 13,253 4,577

2 Choksi Tube Company Ltd. 200 8,029 1,306 8,029

3 Indo Bosch Gems and Jwellery Ltd. 100 3,885 100 3,885

4 Indo French BioTech Enterprises Ltd. 1000 47,500 600 47,500

5 ITC LTD 750 102,470 136,088 102,470

6 Jindal Stainless Steel Ltd. 220 26,729 17,402 26,729

7 Jindal Steel & Power Ltd. 2400 17,819 167,664 17,819

8 Nagarjuna Fertilizers & Chemicals Ltd 100 3,434 2,820 3,434

9 Nahar Sugar & Allied Industries Ltd. 400 25,710 25,710 25,710

10 NEPC India Ltd. 520 60,300 2,132 60,300

11 NEPC Tea Garden Ltd. 6 114 8 114

12 Paam Pahrmaceuticals (Delhi) Limited 500 37,490 1,575 37,490

13 Pasupati Spinning and Weaving Mills Ltd. 200 24,900 1,300 24,900

14 Ready Food Ltd. 1800 47,558 4,860 47,558

15 Rohini Strips Ltd. 400 11,188 140 11,188

16 Saraswati Industrial Syndicate Ltd. 100 36,381 85,500 36,381

17 Skyline NEPC Ltd. 600 30,580 456 30,580

18 Surlux Diagnostic Ltd. 1000 34,700 1,400 34,700

19 Vikas Hybride Ltd. 200 14,090 14,090 14,090

20 Western Paques (I) Ltd. 100 24,745 220 24,745

21 Whirpool of India Ltd. 125 30,025 30,719 30,025

Total (A) 592,224 507,343 592,224

B) UNQUOTED

1 DEBENTURES (Non Trade)

Paam Pharmaceuticals (Delhi) Limited 100 7,000 7,000

Total (B) 7,000 7,000

2 Samdarya & Era Pictures Private limited

Shares - Unquoted 50,000 50,000

Share Application Money Paid 4,750,000 4,750,000

Total (C) 4,800,000 4,800,000

Total ( A+B+C) 5,399,224 5,399,224

The aggregate book value and market value of quoted investments and book value of unquoted investment are as follow:Quoted Investment

- Aggregate book value Rs. 5.92 Lacs

- Aggregate market value Rs. 5.07 Lacs

Aggregate book value of unquoted investments Rs. 48.07 Lacs


(Amount in )


31.03.2011 31.3.2010

SCHEDULE “F”

CURRENT ASSETS, LOANS & ADVANCES

a) INVENTORIES Shares - 9,215,568 Food & Beverages 866,566 536,088

Total (a) 866,566 9,751,656

b) SUNDRY DEBTORS

Total (b) - -

c) CASH AND BANK BALANCES including FDRs i) Cash in Hand 117,864 183,568 ii) Fixed Deposit Receipts 6,050,000 50,000 iii) Bank Balances with Scheduled Bank in 4,228,354 9,339,647

current accounts

Total (c) 10,396,218 9,573,215

Total (A) (a+b+c) 11,262,784 19,324,871

B) LOANS AND ADVANCES (Unsecured, considered good)

a) Advances recoverable in cash or in kind or for value to be received 16,706,753 23,237,384

b) Security Deposit 3,363,787 3,363,787 c) Prepaid Taxes 13,143 30,913d) Advances for purchase of Real Estate 21,171,013 52,171,013

Total (B) 41,254,696 78,803,097

Total (A+B) 52,517,480 98,127,968

SCHEDULE “G”

CURRENT LIABILITIES & PROVISIONS

a) CURRENT LIABILITIES Sundry Creditors

- Outstanding with MSME - - - Others 16,562,707 12,280,743 Others Current Liabilities 3,738,802 5,717,270

Total (a) 20,301,509 17,998,013

b) PROVISIONS Provision for Tax (Net of prepaid/Advance taxes) - -Provision for Fringe Benefit Tax (net of advance tax paid) - -Provision for Retirement Benefits 345,480 256,510

Total (b) 345,480 256,510

Total (a+b) 20,646,989 18,254,523

SCHEDULE “H”

MISCELLANEOUS EXPENDITURE

(to the extent not written off or adjusted)

Preliminary Expenses

Balance B/F 55,922 67,105

Less: Written off during the year 11,183 11,183

44,739 55,922

ERA E-ZONE (INDIA) LIMITEDSCHEDULE FORMING PART OF CONSOLIDATED BALANCE SHEET


(Amount in )

ERA E-ZONE (INDIA) LIMITED SCHEDULE FORMING PART OF CONSOLIDATED PROFIT & LOSS ACCOUNT


2010-2011 2009-2010

SCHEDULE “I”

INCOME FROM OPERATIONS

Ticket Collection 57,500,349 20,448,250

Sales Candy / Canteen Sales. 21,548,593 59,155,892

Sales -Others 4,176,800 -

83,225,742 79,604,142

SCHEDULE “J”

OTHER INCOME


Dividend Received (From Long Term Investment) 2,555 5,193

Profit on sale on Fixed Assets 30,805 -

Misc./Other Income 2,843,701 1,700,024

3,010,850 1,709,593

SCHEDULE “K”

PURCHASES

Purchases - Food & Beverage 9,249,938 8,454,413

9,249,938 8,454,413

SCHEDULE “L”

COST OF RUNNING EXPENSES

Film Hire Charges 19,243,172 19,984,050

Electricity & Water 4,219,521 2,526,704

Entertainment Tax 6,091,176 6,332,569

VAT 2,766,285 2,354,578

Cineplex Expenses - Other 1,247,595 835,887

33,567,749 32,033,788


(Amount in )

SCHEDULE “M”

PERSONNEL EXPENSES

Salaries, Wages and Bonus 7,504,623 8,725,435

Contribution to Provident & Others Fund 400,377 457,130

Director’s Remmuneration 3,109,934 1,841,323

Staff Welfare 51,285 53,959

11,066,220 11,077,847

SCHEDULE “N”

ADMINISTRATIVE & SELLING EXPENSES

Auditors Remuneration 386,050 358,475

Advertisement 386,552 422,279

Film Exhibition Conducting Expenses 7,920,000 8,708,573

Insurance Expenses 297,363 390,471

Legal & Professional 763,069 1,567,318

Travelling & Conveyance 140,951 111,252

Rates & Taxes 106,060 94,840

Rent 8,366,850 5,969,000

Meeting Expenses 58,177 43,480

Loss on sale of fixed assets - 1,525,236

Projector Rental Charges 814,597 106,812

House Keeping Exp 1,482,842 1,070,318

General Repair & Maintenance 9,763,906 6,484,514

Postage, Telegram & Telephone 446,569 500,963

Printing & Staionery Expenses 1,010,702 386,481

Watch & Ward Expenses 1,138,586 1,250,173

Other Expenses 8,554,567 16,375,089

Premilinery Expenses W/off 11,183 11,183

41,648,024 45,376,457

SCHEDULE “O”

FINANCIAL EXPENSES

Bank Charges 174,009 219,251

Interest on Term Loan 5,322,678 7,633,647

Interest on Vehicle Loan 873 14,752

Interest Paid - Others 160,696 -

5,658,255 7,867,649

ERA E-ZONE (INDIA) LIMITED SCHEDULE FORMING PART OF CONSOLIDATED PROFIT & LOSS ACCOUNT


2010-2011 2009-2010


(Amount in )

ERA E -ZONE (INDIA) LIMITED SCHEDULE "P"

SCHEDULES FORMING PART OF CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. PRINCIPLES OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements which relates to Era E-Zone (India) Limited, its various subsidiary companies have been prepared on the following basis:

1. The financial statements are prepared under historical cost convention on accrual basis of accounting and on a going concern basis.

2. The financial statements of the parent company and its subsidiaries have been combined on a line by line basis by adding together the book values of all items of assets, liabilities, incomes and expenses after eliminating all inter-company balances/transactions and resulting unrealized profit/loss.

3. Consolidated Financial Statements are prepared by applying accounting policies as follows by the Company and its subsidiaries; to the extent it is practicable. Significant differences in the accounting policies, if any, are appropriately disclosed by way of Notes to the Consolidated Financial Statements.

4. Interest in Subsidiary is as under:

Company Name % of voting power % of voting power

as on 31.03.2011 as on 31.03.2010

I) Silverline Cinemas Private Limited 100% 100%

B. SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PREPARATION

The financial statements have been prepared to comply to all material aspect with the Notified accounting standards by and the relevant provisions of the Companies Act, 1956. Except otherwise mention, the accounting policies have been consistently applied by the company and are consistent with those uses in the previous year.

2. REVENUE RECOGNITION

i) Revenue comprises of income from Trading activities, Real estate business, income from entertainment inclusive of cineplex operation and other Income.

ii) Revenue in respect of transfer of rights in land is recognized when significant risk & rewards has been transferred.

iii) Dividend income is considered on receipt basis.

iv) Revenue from sale of goods is recognized when all significant risks and rewards of ownership of goods are transferred to the buyer (usually at the point of dispatch to customers).

3. USE OF ESTIMATES

The preparation of financial statements requires the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include employee retirement benefit plan and Income Tax.

4. FIXED ASSETS Fixed assets are recorded at cost of acquisition and subsequent improvements thereto including taxes, duties, freight & other incidental expenses related to acquisition and installation. They are stated at historical cost less accumulated depreciation.

5. DEPRECIATION

Depreciation has been provided as per Written down Value Method as per the rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on addition / disposal during the year has been provided on prorata basis.


6. IMPAIRMENTFixed Assets are tested for impairment if there is any indication of their possible impairment. An impairment loss is recognized where the carrying amount of a fixed asset (or cash generating unit) exceeds its recoverable amount, i.e. higher of value in use and net selling price. Impairment loss recognized in one year can get reversed fully or partly in a subsequent year.

7. INVENTORIES

i) Inventories are valued at cost or last quoted market prices, whichever is lower.

ii) Stock of land for real estate projects is valued at lower of cost or net realizable value.

iii) Stocks of trading goods are valued at lower of cost or net realizable value.

iv) Value of inventories of items that are not ordinarily interchangeable or are meant for specific projects is assigned by specific identification of their individual cost and net realizable value.

v) Inventories are valued at cost or Net Realizable Value whichever is lower on FIFO basis.

8. INVESTMENTS

Investments are classified into long-term investments and current investments. Long-term investments are stated at cost. Provision for diminution in the value of a long-term investment is made if such diminution is other than temporary. Current investments are carried at the lower of cost and fair value and provisions are made to recognize the decline in the carrying value.

9. FOREIGN EXCHANGE TRANSACTION

Transactions in foreign currency are recorded at the exchange rates prevailing at the dates of the respective transactions.

10. EMPLOYEE BENEFITS

i) Contribution to Provident Fund is accounted for on accrual basis. The company continues to make Contribution to Provident Fund plan administered by the government of India.

ii) Gratuity and leave encashment are charged to profit & loss account through provisions for accruing liabilities based on assumption that such benefits are payable to eligible employees at the end of accounting year.

11. INCOME TAX

Income taxes are computed using the tax effect accounting method where taxes are accrued in the same period, as the related revenue and expenses to which they relate. The differences that exist between profit offered for income tax and the profit before tax as per financial statements are identified and deferred tax assets or deferred tax liabilities are recorded for timing differences, namely, differences that originate in one accounting period and are capable of reversal in future. Deferred tax assets and liabilities are measured using tax rates and tax laws enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only if there is reasonable certainty that they will be realized. Should the company have unabsorbed depreciation or carried forward losses under taxation laws, a much stricter test, viz, virtual certainty of realisation, is to be applied for recognition of any deferred tax assets. Deferred tax assets are reviewed for the continuing appropriateness of their recognition as assets at each balance sheet date and written down or written-up to reflect the amount that is reasonably /virtually certain (as the case may be) of realization.

12. BORROWING COST

Borrowing costs are attributable to the acquisition of qualifying assets are capitalized as part of cost of such assets till such time assets become ready for their intended use. All other borrowing costs are charged to Profit & Loss Account.

C. NOTES TO ACCOUNTS

1. Maximum amount due at any time during the year from Concern /Companies, in which directors and / or their relatives are interested:

2010-11 2009-10

Name ( in Lacs) ( in Lacs)

Era Landmarks Limited 8.61 397.34

Era Buildwell (India) Limited - 34.11

Era Infra Engineering Limited - 0.74

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) Nil.

3. Contingent Liabilities not provided for Rs. Nil (Previous Year Rs. Nil)


4. In the opinion of board of directors all the current assets, loans & advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and that all the known liabilities relating to the year have been provided for.

5. Provisions for diminution in the value of long term investments has not been made as in the opinion of the board, such diminution is temporary.

6. There are no payments due to Micro, Small & Medium Enterprise.

7. Related Party Disclosures:

A) Names of other related parties with whom transactions have taken place during the year.

i. Associates:

Era Infra Engineering Limited

Era Landmarks Limited

ii. Individual owing significant shareholding and occupying key management position and his relatives.

Mr. H.S. Bharana – Chairman

Mr. Amit Bharana – Managing Director

Related Party Transactions and Balances:

8. SEGMENT REPORTING

During the year Company was operating in only one activity called Entertainment Business (Cinema & Food court). So, Segment reporting based on the guiding principles giving in the accounting standard (AS-17) on segment reporting issued by the Institute of Chartered Accountants of India, discontinued.

9. Break up of deferred tax assets and deferred tax liabilities;

Deffered Tax Assets March 31,2011* March 31,2010

(a) Retirement Benefits 0.00 0.79

(b) Capital Expenditure 0.00 0.58

(c) Carried forward losses 0.00 171.25

Deffered Tax Liabilities

(a) Deifference in deperication for accounting and tax purposes 0.00 18.05

Net Deferred Tax Assets 0.00 154.57

(* As a matter of prudence the company has reversed the brought forward deferred tax asset and further no such asset created)

Particulars

Joint Ventures & Associates

Individual Owing significant

shareholding

Other KeyManagement

PersonnelTotal









Repayment of Loan Paid 8.61 - - - - - 8.61 -

Reimbursement of Exps. Paid 42.88 - - - - - 42.88 -

Salary paid - - 31.10 18.41 0.55 0.55 31.65 18.96

Due from (as at year-end) - 8.61 - - - - - 8.61

Due to (as at year-end) 20.97 - - - - - 20.97 -


10. EARNING PER SHARE

CALCULATION OF EARNING PER SHARE- BASIC & DILUTED

Year Ended Year Endedst st31 March 2011 31 March 2010

Earnings (Rs) Basic Diluted Basic Diluted

Net profit attributable to equity shareholders (46,589,908) (46,589,908) (22,147,630) (22,147,630)

Shares


outstanding during the year


resulting from dilutive instruments

Weighted average number of equity shares for 11,080,000 11,080,000 11,080,000 11,080,000

calculation of earnings per share

Earnings per share of face value of Rs. 10/- (4.20) (4.20) (2.00) (2.00)

11. Expenditure / Earnings in foreign currency - Nil

12. Figure pertaining to the subsidiaries company has been reclassified wherever necessary to bring them in line with Group's Financial Statements.

13. All figures have been stated in rupees and rounded off to the nearest rupee except as stated otherwise.

14. Schedule "A" to "P" are integral part of Balance Sheet and Profit and Loss Account.

For and on Behalf of the Board

As per our report of even date attached

For P.C. BINDAL & CO. (H.S. Bharana) Amit Bharana)

Chartered Accountants Chairman Managing Director

FRN: 003824N

(CA. K. C. Gupta)

Partner (Kapil Kumar)

M. No. 088638 Company Secretary

Place: New DelhithDated: 30 May, 2011


STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT,1956 RELATING TO SUBSIDIARIES COMPANIES FOR THE FINANCIAL YEAR 2010-11

( in Lacs)

Name of Company Silverline Cinemas Pvt. Ltd.

Capital 50

Extent of Interest held in subsidiaries(%) 100%

Reserves 12.50

Total Assets 132.26

Total Liabilities 132.26

Detail of Investments (except in the case of subsidiaries)

Turnover -

Profit before Taxation (5.27)

Provision for Taxation -

Deffered Tax Assets Reversed 23.72

Profit After Taxation (28.99)

Proposed Dividend



ERA E-ZONE (INDIA) LIMITED

ERA E-ZONE (INDIA) LIMITED

Registered Office : 153, Okhla Industrial Estate, Phase-III, New Delhi-110020

Registered Office : 153, Okhla Industrial Estate, Phase-III, New Delhi-110020

ATTENDANCE SLIP

PROXY FORM

L.F. No. : No. of Shares(s) held

DP ID : Client-ID

I/We hereby record my/our presence at the 19th Annual General Meeting of the Company at Executive Club, 439, Village Shahoorpur P.O., Fatehpuri Beri, New Delhi-110074 on Monday, 19th September, 2011 at 5.00 p.m.

Name of the Member[in block letters]

Signature of Member / Proxy*

Notes :1. You are requested to sign and hand this over at the entrance.

L.F. No. : No. of Shares(s) held

DP ID : Client-ID

I/We________________________________________________of_________________________________________being a member/

members of the above named Company hereby apoint__________________________________________________________of

___________________________________or falling him/her_________________________________________________________of

___________________________________as my/our proxy to vote for me/us on my/our behalf at the 19th Annual General

Meeting of the Company to be held on Monday, 19th September, 2011 at 5.00 p.m.

Signed this______________________________________day of_______________________2011

Signature______________________________________

Name of the Member[in block letters]

Signature of Member / Proxy*

Notes :1. This form should be signed across the stamp as per specimen signature registered with the Company.2. The Proxy must be deposited at the Registered Office of the Company not less than 48 hours before the time of

holding the meeting.3. A Proxy need not be a member of the Company.

TEAR HERE

Forward looking statement

In this annual report we have disclosed forward looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements, written and oral, that we periodically make contain forward looking statements that set out anticipated results based on the management's plan and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘project’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future information or otherwise.

BOOK POST

If undelivered please return to:

Era E-Zone (India) Ltd.153, Okhla Industrial Area, Phase - III, New Delhi - 110020.Tel: +91 11 4063 7000, Fax: +91 11 4063 7070 www.eragroup.co.in

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