Industry Awareness

8/2/2019 Industry Awareness

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Industry awareness & exposure-IV

Tutorial work on the industry visit

By; Falak Sheth

Roll no-12

SYBBA(ITM) SEM IV

Academic year 2011-2012

Date of submission

6-03-2012

Submitted to:-

SARDAR PATEL UNIVERSITY

VALLABH VIDYANAGAR

FACULTY IN CHARGE PRINCIPAL


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ACKNOWLEDGEMENT

I Falak Sheth , a student of SYBBA(ITM) SEMCOM college. Industrial training

was the most interesting and joyful experience for me. I am greatful to Mr.Renil

Thomas for giving us this chance for industrial visit.

I also would like to thank my principal for providing me this opportunity to visit

the company.

I also thank all those who have contributed directly or indirectly and made my

training a success and helped me to present this report. Such training or visit will

be very useful and important in subsequent year of BBA-ITM


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Preface

Practical training is a step to bridge up the gap between the theoretical studies of

management and its practical application under this training. We had to visit the

industry work and collect information from the company.

It gave me a great pleasure to prepare the report of INOX PVT LTD. The syllabus

of SYBBA(ITM),includes one industry visit and we have to acquire analytical

study of industrial improvement.

I am glad to present my report of this visit to my knowledge.


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Sr. No. INDEX Page No.1. INTRODUCTION 22. MAJOR PRODUCTS OF COMPANY 33. DISTRIBUTION NETWORK 5


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INTRODUCTION

Inox Leisure Limited is the diversification venture of the Inox Group into entertainment and is a

subsidiary of Gujarat Flurochemicals Ltd. Inox Leisures mission is to be the leader in the cinema

exhibition industry, in every aspect right from the quality and choice of cinema to the varied

services offered and eventually the highest market share.

Inox has traversed its own path by bringing in a professional and service oriented approach to

the cinema exhibition sector. With strong financial backing, impeccable track record and strongcorporate ethos, Inox has established a strong presence in the cinema exhibition industry in the

short span of a little over six years since the opening of its first multiplex. Inox has a pan-India

presence and currently operates 24 multiplexes and 84 screens in 18 cities. Winner of the I CICI

Entertainment Retailer of the Year Award 2005, TAAL Multiplexer 2006 and Emerging Super

brand of the year 2006 2007 Award, Inox Leisure Ltd. will continue its expansion into

4. RESEARCH & DEVELOPMENT 75. ANNUAL PRODUCTION & SALES 96. MAJOR CUSTOMERS 117. BUSINESS IN OVERSEAS MARKET 198. MARKET SHARE IN INTERNATIONAL ECONOMY 209. MERGER & AQUAZITIONS 21


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cities like Hyderabad, Jodhpur, Ahmadabad, Bhopal, Mangalore, Coimbatore, Kanpur, Hubli,

Vishakhapatnam, Bhuvaneshwar, Kolkata, Bangalore, Kharagpur and Pune.

Its merger with Calcutta Cine Pvt. Ltd. (89 Cinemas), gives Inox access to an additional 9

multiplexes in West Bengal and Assam. All existing Inox complexes have state of the art

facilities in terms of modern projection and acoustic systems, interiors of international

standards, stadium style high back seating with cup holder arm-rests, high levels of hygiene,

varied theatre food, a selection of Hindi, English and regional movies, computerized ticketing

and most importantly high service standards upheld by a young and vibrant team

MAJOR PRODUCTS OF THE COMPANY


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The key products for a multiplex business are:

Geographic positioning (location)

Quality of assets

Better Occupancy:

Greater number of shows:

Better exploitation of a Film:

Better Cost Management:

Operating efficiencies

Regulation

Film exhibition is key interface between the Film Audience and the Movie content. World over,

the box office collections (i.e. ticket sales by Movie Exhibitors) continue to be the prime

barometer for the commercial success or failure of a movie. Exhibition centers in India range

from the open air to air-conditioned cinema halls and multiplexes.

There are only around 12,900 active screens spread over the country.

So there is not much in the products of the company, the quality as the above mentioned

products are very much important as this is a industry where regular care is required.


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DISTRIBUTION NETWORK

The Film Industry value chain can be broadly categorized into three segments: film production,

film distribution and film exhibition. These can be further largely classified as under:

Inox Leisure Limited (Inox) was incorporated in 1999. It is a subsidiary of Gujarat Fluoro

chemicals Ltd (GFL). Inox is in the business of setting up, operating and managing a chain of

multiplexes across the country. The company currently operates 38 multiplexes and 144

screens in 25 cities, and has a capacity of 33,656 seats. Inox was chosen, post a nationwide

tender, to design, construct and operate the prestigious multiplex in Goa that hosts the

International Film Festival of India. All Inox cinemas have latest facilities in terms of projection

and acoustic systems and interiors of international standard.

The film exhibition sector can be divided into two segments, namely single and double screen

cinemas, and multiplex cinemas (a cinema theatre with more than two screens). Most of the

13,000 odd cinema screens spread across the country are single screen cinemas owned by

individual entrepreneurs and operating in an unorganized environment. However, this is

changing with the explosion of multiplex cinemas over the last 4-5 years. Multiplex cinemas are

characterized by limited seating capacity per screen, good ambience, quality viewing with high-

@ Shooting

@ Editing

@ Dubbing

@ Audio Recording

@ Finishing

@ Sale of theatrical

Rights

@ Music Rights

@ Telecast rights

@ Sublicensed / resold

theatrical rights.

@ Screening of Films

Film Production Film Distribution Film Exhibition


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end sound systems, comfortable seating, superior service and good quality food and beverages.

Multiplexes have succeeded in attracting family audiences back to the theatres. As of

December 2009, there were around 900 multiplex cinemas in India. Content remains the most

critical factor in determining the amount of audience coming to the theatres. However, players

in the exhibition space can control their risks by structuring their contracts with distributorskeeping in mind the risk-reward ratio.

Our marketing department is responsible for extending, formulating and maintaining the

position of our brand. In addition, the marketing department is the interface for patrons. It

organizes promotions, events, campaigns and contests to attract patrons to the multiplexes. It

is also responsible for our branding alliances, and meeting our advertising revenue targets.

Sr

No.

City Location Screens Seats

1. Pune Plot No. D, Bund Garden Road, Near Hotel

Central Park, Pune

4 1316

2. Vadodara Race Course, Gopal Baug, Ellora Park, Vadodara 4 1318

3. Kolkata Forum, 10 / 3, Elgin Road, Kolkata 4 1015

4. Kolkata City Centre, DC Block 1, Sector 1, Kolkata 4 1144

5. Goa Old GMC Heritage Precinct, D. B. Road, Campal,

Panaji, Goa

4 1272

6. Mumbai CR2, 2 Floor, Opp. Bajaj Bhavan, Nariman Point,

Mumbai

5 1323

7. Bangalore 4 Floor, Garuda Mall, Magrath Road, Bangalore 5 1103

8. Jaipur Amrapali Circle, Vaishali Nagar, Jaipur 2 787

9. Indore Sapna Sangeeta Mall, Sapna Sangeeta Road,

Sneha Nagar, Indore.

3 1103

10. Darjeeling Rink Mall, 19, Laden La Road, Darjeeling (West

Bengal

3 811

11. Kota Plot No. Sp 11, Indra Vihar, Kota 3 1117

12. Nagpur Poonam Mall, Vardhaman Nagar, Nagpur 3 1068

13. Chennai 3rd Floor, Chennai City Center, 10/11, R.K. Salai,

Near Kalyani Hospital, Mylapore, Chennai.

4 909

14. Jaipur City Plaza, Nirman Marg, Jhotwara Road, Bani

Park, Jaipur Rajashtan

3 965

15. Bharuch Shree Rang Palace, Zadeshwar Road, Bharuch,

Gujarat.

3 1028

16. Durgapur Dream Plex, BSIDL Building, Durgapur. 3 933

17. Jaipur 4th Floor, Crystal Palm, Sahkar Circle Scheme, 3 846


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Sardar Patel Marg, Jaipur.

18. Lucknow 4th Floor, Riverside Mall, Vipin Khand, Gomti

Nagar, Lucknow.

4 1030

19. Raipur 3rd Floor, City Mall 36, G. E. Road, NH-6, Raipur. 4 1280

20. Mumbai 2nd Floor, Milan Mall, Near Milan Subway,

Santacruz (W), Mumbai.

1 420

21. Kolkata 89C, Moulana Abul Kalam Azad Sarani, Kolkata. 4 1022

22. Vijayawada Urvashi Theatre Complex, Andhra Ratna Road,

Gandhi Nagar, Vijayawada

3 1087

23. Faridabad 3rd Floor,Crown Interiorz Mall,Sec-35, Delhi

Mathura Road, Faridabad.

4 1108

24. Nagpur Tulli

Mall

Jaswant Tuli Mall, Kamptee Road, Indora Chowk,

Nagpur.

4 1214

Total 24 84 25219

The department consists of a Vice President at the Corporate Office who is assisted by the

marketing manager of each Operating Unit and a central team comprising of brand manager,

promotion manager and manager for alliances. A head of public relation (PR) handling

corporate communications and PR of all Operating Units is also part of the team. Each of the

marketing managers in the Operating Units is assisted by a marketing executive and in some

Operating Units also a PR executive.

We get associated with known PR agencies to assist us in PR for launch of our various

properties. It helps us in getting good media milage during the time of the launch.

The departments goal is to present our brand as the finest in the exhibition industry. Our

slogan Live theMovie demonstrates that we are dedicated to provide a holistic entertainment

experience to our patrons.

Other medium to attract audiences to the multiplex are direct mailers, newspaper

advertisements, internet, outdoors, radio and alliances with brands In addition the following

marketing tools are used to create awareness amongst the patrons:

Loyalty Clubs:

We identify premium and frequent customers through our feedback forms and data generated

from contest forms. This database has more than 25000 members across India. We plan to start

a loyalty program to reward our customers with certain privileges like invitations to premiers,

special events etc.

Promotions:


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The presence of tenants within the mall, with good brand value, enables us to conduct joint

promotions with the other tenants and increase footfalls. We also do movie promotions with

specific big moviesHollywood and Bollywood, where we offer to the patrons various gifts like

movie merchandise, invites to premier and tickets to the movies. This is promoted in-house and

through the various FM radio channels.

We also house various festivals in different cities like Pune International Film Festival,

International Film Festival of India in Goa and Asian Film Festival in Mumbai.

We have major alliances with Airtel, Hutch, and other such brands. We also do promotions

with various other brands including Kaya Skin Clinic, LeOreal, Cadbury, Kingfisher Airlines,

Mercedes Benz, Maruti, Hyundai, ITC, Asian Paints, Coca-Cola and Taj Hotels.

The purpose of celebrity visits is to make the movie experience memorable as the patrons

interact with their favorite stars thereby attracting crowd and increase box office collections.

We have had Aamir Khan, John Abraham, Anil Kapoor, Esha Deol, Hema Malini, Pooja Bhatt,

Vikram Bhatt, Vivek Oberoi, Kim Sharma, Jimmy Shergill and several other stars, visited our

multiplexes. We also get cricketers/ famous sports personalities and other well known

personalities visiting our multiplexes.

RESEARCH & DEVELOPMENT

The Indian Media and Entertainment (M&E) industry is poised to enter a golden era. One of the

largest markets in the world, the industry is seeing strong growth. According to a joint report by

industry body the Federation of Indian Chambers of Commerce and Industry (FICCI) and audit

firm PricewaterhouseCoopers, in 2007, the M&E industry recorded a growth of 17% over the

previous year, higher than the forecasted growth of 15%. The industry reached an estimated

size of Rs. 513 billion in 2007, up from Rs. 438 billion in 2006. In the last four years 2004-2007,

the industry recorded a cumulative growth of 19% on an overall basis.

Filmed entertainment recorded a steady growth of 14% over the previous year. In the last four

years (2004-2007), the film industry recorded a cumulative growth of 17% on an overall basis.

The eighth PricewaterhouseCoopers (PwC) Global Entertainment and Media Outlook have

ranked India as the fastest growing market in the world for spends in entertainment and media

in the next five years. India will be one of the key drivers in pushing the global entertainment

and media industry to US$ 2 trillion by 2011. With a Compound Annual Growth Rate (CAGR) of

18.5 per cent, the Indian M&E industry is the fastest growing in the Asia-Pacific, says the study.


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The Indian film industry, with over 3 billion admissions per annum, is the largest in the world, in

terms of number of films produced per year. The Indian film industry is projected to grow by

13% over the next five years, reaching to Rs. 176 billion in 2012 from the present Rs. 96 billion

in 2007, nearly double its present size.

The opening of the film industry to foreign investment coupled with the granting of industry

status to this segment has had a favorable impact, leading to many global production units

entering the country.

Simultaneously, advancements in technology along with a rise in consumer income and change

in consumption patterns has led a massive shift in all spheres of the film industry -- production,

exhibition, distribution and marketing.

One perceptible change has been the rapid growth of multiplexes, which meets consumer

demand for quality entertainment and has also helped boost production of niche films targeted

at niche audiences. The nation's multiplex industry is all set for an unprecedented boom

buoyed by positive regulatory changes and booming consumerism.

The Indian Media and Entertainment (M&E) industry is poised to enter a golden era. One of the

largest markets in the world, the industry is seeing strong growth. According to a joint report by

industry body the Federation of Indian Chambers of Commerce and Industry (FICCI) and audit

firm PricewaterhouseCoopers, in 2007, the M&E industry recorded a growth of 17% over the

previous year, higher than the forecasted growth of 15%. The industry reached an estimated

size of Rs. 513 billion in 2007, up from Rs. 438 billion in 2006. In the last four years 2004-2007,

the industry recorded a cumulative growth of 19% on an overall basis. Filmed entertainmentrecorded a steady growth of 14% over the previous year. In the last four years (2004-2007), the

film industry recorded a cumulative growth of 17% on an overall basis.

The eighth PricewaterhouseCoopers (PwC) Global Entertainment and Media Outlook have

ranked India as the fastest growing market in the world for spends in entertainment and media

in the next five years. India will be one of the key drivers in pushing the global entertainment

and media industry to US$ 2 trillion by 2011. With a Compound Annual Growth Rate (CAGR) of

18.5 per cent, the Indian M&E industry is the fastest growing in the Asia-Pacific, says the study.

The Indian film industry, with over 3 billion admissions per annum, is the largest in the world, in

terms of number of films produced per year. The Indian film industry is projected to grow by

13% over the next five years, reaching to Rs. 176 billion in 2012 from the present Rs. 96 billion

in 2007, nearly double its present size.

The opening of the film industry to foreign investment coupled with the granting of industry

status to this segment has had a favorable impact, leading to many global production units

entering the country. Simultaneously, advancements in technology along with a rise in


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consumer income and change in consumption patterns has led a massive shift in all spheres of

the film industry -- production, exhibition, distribution and marketing.

One perceptible change has been the rapid growth of multiplexes, which meets consumer

demand for quality entertainment and has also helped boost production of niche films targeted

at niche audiences. The nation's multiplex industry is all set for an unprecedented boom

buoyed by positive regulatory changes and booming consumerism.

With films being the most popular form of mass entertainment in India, the film industry has

witnessed robust double-digit growth over the past decade with domestic box office collections

(accounting for ~75% of total film industry revenues) growing at a CAGR of 16% over FY2005-

FY2008. It is believed that favorable demographics and lack of affordable alternatives will help

the sector sustain high growth.

The sector's growth is directly related to the changing demographic profile of the country. India

has witnessed over 8% GDP growth for the past 3 years. Further, growing urbanization and a

rising working population (leading to a steady uptrend in per capita disposable income)

combined with the youth population (


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The film exhibition industry is in the initial stages of conversion from film-based to digital

projection technology. Virtually all film entertainment content today can be exhibited digitally.

Digital projection results in a premium visual experience for patrons as there is no degradation

of image over the life of a film. Digital content also gives the theatre operator greater flexibility

in programming content. For example, theatre operators are able to better address capacityutilization and meet the demand in their theatres by making real-time decisions on the number

and size of auditoriums to program with particular content. Moreover, digital technology

provides theatres with the opportunity for additional revenues through digital output and

alternative content offerings. The recent experience with the digital initiative has been positive

with increased attendance and rising average ticket prices.

Importance of film exhibition industry to content providers:

We believe that the box office success of a motion picture is often the key determinant in

establishing its value in the other parts of value chain, such as DVD, cable television,merchandising and other ancillary markets. As a result, we believe motion picture studios will

continue to work in tandem with film exhibitors to improve the revenue extraction from the

limited theatrical window - first week collections account for increasingly higher proportion of

total collections.

ANNUAL PRODUCTION AND SALES

INOX Leisure Limited is the diversification venture of the INOX group into entertainment and is

a wholly owned subsidiary of Gujarat Flurochemicals Ltd. The other companies in the INOX

Group are INOX Leasing and Finance Limited, INOX Air Products, and Gujarat Flurochemicals

Ltd. The combined turnover of the INOX Group is approximately Rs.750 crores.

In Phase 1 INOX has invested close to 5 crores to bring in titles like Garam Masala, Rang De

Basanti, Family, Jaaneman, Apharan and Kyonki, EK Khiladi, Ek Hasina and Shikar. In Phase 2 the

company will look at content from International markets (English & award winning foreign

language movies).

All INOX complexes offer an option of 3-5 auditoriums, state of the art facilities in terms of

modern projection and acoustic systems, THX certified or compliant auditoriums, stadium style


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high back seating with cup holder arm-rests, internationally designed interiors, high levels of

hygiene, varied theatre food, selection of Hindi, English and regional movies, computerized

ticketing and most importantly high service standards upheld by a young and vibrant team.

Initial investment of Rs. 175 crores is spread across nine properties slated to launch

between 2002 - 2004. INOX is already successfully running its multiplexes at Pune(Bund Garden Road), Vadodara (Racecourse Circuit Road), Kolkata (FORUM, Elgin

Road and at City Centre- Salt Lake City), Mumbai (CR2, Nariman Point) and Goa

(Panjim). With a further investment of Rs. 150 crores, INOX will continue its expansion

into Chennai, Hyderabad, Bangalore and Noida, thus establishing a national presence.

Inox Leisure Ltd operates in the Motion picture theaters, ex drive-in sector. INOX Leisure

Limited is an India-based company. The Company operates in four segments: multiplexes/ film

exhibition, film distribution, film production and power. Multiplexes include operating and

managing Multiplex Entertainment Centers Film distribution business includes distribution of

movies. Film production business includes production of movies. Power business includes

generation of wind power. It is a holding company of Gujarat Fluorochemicals Limited. As of

March 31, 2010, the Company has 34 multiplexes, 129 screens in 23 cities across India. 3D

screens have been installed in a number of properties, including Mumbai, Bangalore, Pune,

Kolkata and Hyderabad. In January 2011, the Company acquired a majority stake in Fame India

Limited, bringing its stake in Fame at 50.27% interest as on January 7, 2011.

INOX Leisure's mission is to be the leader in the cinema industry, in every aspect right from the

quality and choice of cinema to the varied services offered and eventually the highest market

share. Post its success in exhibition, INOX made its foray into distribution in September 2005.

Total revenue from theatrical exhibition segment during the financial year ended 31 March

2008 amounted to Rs. 20,483 Lacs. The profit from this Segment was Rs. 3156 Lacs for the

financial year ended 31 March 2008. The increase in total revenue from this segment is

attributed to commencement of operations of new properties across the country. As on date,

the Company has 24 multiplexes, 84 screens in 18 cities across India.

Total revenue from Distribution during the financial year ended 31 March 2008 amounted to

Rs. 617 Lacs. However, the Company suffered a loss to the tune of Rs. 32 Lacs for the financial

year ended 31 March 2008. INOX forayed into distribution a little over 2 years ago by leveragingits exhibition strength in West Bengal & Rajasthan. INOX has distributed some big ticket

blockbuster movies like Rang De Basanti, Heyy Babyy, Om Shanti Om, Namastey London,

Cheeni Kum, Partner, Race, U Me aur Hum in the recent past. With 'Hastey Hastey Follow Your

Heart', the Company marked its foray into the International Distribution business.


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The Company has set up wind mills in the State of Gujarat primarily for the purpose of

generating electricity for its captive consumption. The Total Revenue & Profit from this

segment was Rs. 28 Lacs and Rs. 15 Lacs respectively, for the financial year ended st31 March

2008.

Film content refers to the production of feature films. Producers finance their films either

through internal accruals, bank finance, private financiers or the equity route. The business

model and profitability of a company in this sector are acutely susceptible to changes in

audience tastes and preferences. In the last 4-5 years, the economics of film production has

improved considerably, with new revenue sources such as home video rights, cable and

satellite television rights, and in-cinema advertising increasing. Nevertheless, profitability of

film content remains inextricably linked to theatrical revenues, which, in turn, are dependent

on highly fickle and unpredictable audience tastes and preferences. On the positive side, the

advent of multiplexes as the preferred movie-viewing alternative, especially in big cities, has

not only brought greater transparency in revenues, but also provided an exhibition outlet for

niche movies. Further, with digital technology being increasingly used for film exhibition, film

producers are able to reach out to much larger audiences, thus boosting revenues.

The major contributor to our total revenues is ticket sales and the SPH, which are dependent on

the number of patrons.

The break-up for the various revenue streams for the half year ended September 30, 2005 and

year on year is as under:


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Half year

ended

September 30,

2005

Year ended

March 31,

2005

Year ended

March 31, 2004

Ticket Revenues 372.68 438.5 211.04

Food & Beverages

Revenues

88.12 104.68 54.55

Advertising

Income

18.32 25.16 8.80

Management Fees0 12.25 0.60

Parking Charges 3.68 6.24 5.29

Conducting Fees 19.73 27.95 19.47

Total 502.53 614.82 299.75

Advertisement income is the income from the money paid by the producers to show their film

in the the INOX multiplex

Their rapid expansion has helped us achieve a total income which has grown from Rs. 163million in FY 2003 to Rs 310 million in FY 2004 to Rs. 626 million in FY 2005. For the half year

ended September 30, 2005 our total income was Rs. 508 million.

Their net profit for the same period has grown from a small beginning of Rs. 0.51 million in FY

2003 to Rs. 34.95 million in FY 2004 to Rs. 72.24 million in FY 2005. For the half year ended

September 30, 2005 our total income was Rs. 97.32 million.

While consolidating our position in the exhibition business they have also made an entry in the

film distribution business. They intend to examine the nuances of the distribution business,

including possible synergies with their exhibition business, to see if there is a scope for valueenhancement through distribution.


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MAJOR CUSTOMERS

Demographic

trends

Effects

Enablers

Outcome

Source: Lifestyle Consumption by Edelweiss Securities Private Limited 2005

Consumerisatio

n of Urban India.

Rising %age of

young population

Increase in Incomelevels

Changing spending

patterns

Increase in

number of

working UrbansIncreasing

spending power

Rising aspiration

levels

Consumption of lifestyle


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In the last 5-7 years we have witnessed a significant growth in organized retail in India.

Favorable demographics, rising consumer incomes, real estate developments especially with

emergence of new shopping malls, availability of better sourcing options both from within India

and overseas, and changing lifestyles that bring the Indian consumer closer to the consumers in

more developed markets are driving the growth of organized retailing.

A. INCREASED CONSUMPTION LEVELS OF INDIAN CONSUMERS

The great Indian Middle Class:

There has been a healthy growth in the number of households in the lowest-income bracket

has witnessed a sharp fall the number is estimated to have fallen by 13.5% between 2001 and

2006. Households with an annual income of over INR 500,000 will almost double during the

same period as shown in the table below.


Affluent

Upper Middle

Middle

Lower

Income

2001-02 2005-06 2009-10

41 31 25

39.8 37.6 47.9

10.8 13.8 17.5

3.4 5.6 9.0


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Increasing household incomes has led to a substantial change in the profile of the Indian

consumer. In the table provided below the profile of the Climbers, Consuming and Very Rich

consumers class is biased towards self-indulgent consumption patterns. It is projected that by

2007, these segments would be over 170 million households as compared to 124 million in

2000 and would constitute about 86% of the population against 69% in 2000.

The traditional large, joint-family set up in India, is slowly giving way to a nuclear family set up.

This is more pronounced in urban India. This has resulted in a larger number of households,

pushing up demand for consumer goods. These have a direct impact on the overall

consumption patterns and fuels further growth of organized retail.

Strong economic growth after liberalization and increasing globalization has resulted in higher

household incomes, and these continue to rise with the Indian economy growing at a brisk

pace. The young urban is not satisfied by purely spending on basic products and services. They

want to indulge by spending more on lifestyle products which would satisfy their social needs,esteem needs and self-actualization needs.

Leisure needs are currently manifesting themselves in the desire for a shopping experience,

watching movies in multiplexes, eating out, travel, etc.

The emerging lifestyle categories are reflected below:


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Aspiration Products Convenience & Comforts

Wellness

Leisure

Willingness to pay

Keeping the above in mind, certain categories will grow exponentially because of changing

consumption behavior as well as availability (e.g. multiplexes, low-cost air travel). Certaincategories will grow above the average growth rate, as the income levels rise and people

migrate to better-quality or higher inspirational products and services, such as branded apparel.

Some of the bigger categories that show high growth rates are multiplexes, organized retailing,

restaurants, specialty electronics, branded jewellery and air travel.


Over the years, consumer awareness about expected quality and price of products/services has

increased. Consumers are more vocal about the quality of the products/services that they

expect from the market. This awareness has made the consumer seek more reliable sources forpurchases and hence the logical shift to purchases from the organized retail chains Changes in

consumer lifestyle with the steep increase in value of time, change in the Indian family

structure from large joint families to nuclear families, and an increasing level of quality

awareness has made the case for organized retailing stronger

@ Accessories /

special jewelery,electronics @

Branded appearal

@ Mobile Phones

@ Instant news

channel

@ Airlines

@ Ent-shopping experience

@ Media software

@ Media Multiplex@ Lifestyle drugs

@ Water

@ Fitness centres


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Lifestyle Category FY05E FY10E CAGR

Leisure

Media-Software 76704 184680 19%

Multiplexes 6136 34020 41%

Amusement parks, casinos, gaming 3196 9196 24%

Travel and tourism (hotels) 14360 39258 22%

Shopping experience 253123 975566 31%Alcoholic beverages 115056 255150 17%

Restaurants 115056 437400 31%

Wellness

Health food and drink 25312 60750 19%

Fitness centers 19176 48600 20%

Skin care products/clinics 30682 87480 23%

Relaxation (spas, etc.) 959 4860 38%

Lifestyle drugs Ne ne -Water (bottled) 7670 72900 57%

Aspiration Products

Accessories/jeweler 10050 58160 42%

Branded apparel 175780 396900 18%

Specialty electronics 59833 272625 35%

Convenience & Comfort

Instant news channels 6328 14580 18%

Mobile handsets, value added services 137840 291600 16%

Ready to eat 11723 15458 6%

Air travel 16112 77862 37%

Internet commerce Ne ne -

Enabling Sectors


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Health insurance Ne ne -

Investment advisory services Ne ne -

Consumer finance Ne ne -

Total (excluding double counting) 827711 2593902 26%

BUSINESS IN OVERSEAS MARKET

Inox Global Services Limited was incorporated on August 29, 2000 as a public limited company

and obtained its certificate of commencement of business on October 3, 2000. Its registered

office is situated at 612-618, Narain Manzil, 6th Floor, 23, Barakhamba Road, New Delhi-

110001. It is engaged in the business of IT and IT-enabled services.

IGSLs equity shares are not listed on any stock exchange. The Board of Directors of IGSL as on

September 30, 2005 comprises of Mr. Vivek Jain, Mr. Pavan Jain and Mr. Arun Jain.

Shareholding pattern of IGSL as on September 30, 2005:

Sr. No. Name No. of Shares Percentage

(%)

1. Gujarat Fluor chemicals

Limited

2,474,930 49.5

2. Inox Leasing & Finance

Limited

2,015,000 40.3

3. Others 510,070 10.2

Total 500000 100



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MARKET SHARE IN INDUSTRY & ECONOMY

Inoxs first multiplexes were set up in Pune and Vadodara in 2002. As of FY10, the company has

144 screens, spread over 25 locations. The company has a presence at prime locations in major

cities, such as Mumbai, Bangalore, Hyderabad, Chennai and in the National Capital Region

(NCR).

New multiplex openings by Inox are: Belgaum, Karnataka, in June 2010, CMR Mall in

Visakhapatnam in April 2010, Korum Mall in Thane in March 2010, at Maharani Pet,Visakhapatnam in March 2010, a fourth multiplex at Bangalore in November 2010, at Raja Park

in Jaipur in August 2010, at Siliguri in West Bengal in December 2009 and at GVK One Mall,

Banjara Hills, Hyderabad in May 2009. Inox is also looking at expansion in cities such as Jodhpur,

Ahmedabad, Bhopal, Mangalore, Coimbatore, Hubli, and Bhubaneswar in FY11.


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Competitive Position

Inox Leisure Ltd.

Mar-2010

Cinemax India

Ltd.

Mar-10

PVR Ltd.

Mar-10

Reliance

Mediaworks Ltd.

Mar-10

Revenue (Rs mn) 2,147.7 1,936.1 3,362.6 7,972.1

EBITDA margins

(%)

17.0 28.6 9.9 30.4

PAT (Rs mn) 260.6 169.7 1.4 -1,485.2

PAT margin (%) 12.1 8.8 - -18.6

Gearing (x) 0.6 0.6 0.6 n.m

EPS (Rs/share) 4.2 - 0.1 -

PE (x) 11.3 n.m 2,128.1 n.m

P/BV (x) 1.0 0.9 1.0 2.4

RoCE (%) 8.2 5.5 4.0 n.m

RoE (%) 8.8 10.8 - n.m

EV/EBITDA (x) 11.6 3.8 14.0 10.5


MERGER & ACQUISITIONS

(a) Amalgamation of Calcutta Cine Private Limited Pursuant to the Scheme of Amalgamation

('Scheme') of Calcutta Cine Private Limited (CCPL) with Inox Leisure Limited, as approved by the

High Courts of Gujarat and Calcutta, all assets, liabilities and reserves of erstwhile CCPL aretransferred to and vested in the Company w.e.f. the appointed date viz. 1st April 2006. The

erstwhile CCPL was engaged in the business of operating and managing multiplexes. The

Scheme has become effective on 18th July 2007 and accordingly been given effect in the

accounts during the current financial year. The amalgamation has been accounted for under

'Pooling of Interest' method as prescribed by the Accounting Standard (AS-14) Accounting for

Amalgamations. Accordingly, the assets, liabilities and reserves of erstwhile CCPL, as at 1 April


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2006 have been recorded at their book values. Pursuant to the Scheme, the shareholders of the

erstwhile CCPL are entitled to 33 (thirty-three) fully paid equity shares of Rs. 10 each of the

Company for every 1 (one) fully paid equity share of Rs. 1,000 each held in the erstwhile CCPL.

The Scheme also provides for adjustment in swap ratio on occurrence of Dilutive Event. During

the year, the Company has issued 1,667,800 fully paid equity shares of Rs. 10 each to theshareholders of the erstwhile CCPL (including 12,800 equity shares consequent to dilution

event viz. declaration of dividend by the Company for the financial year 2006-2007).

Further, as per the Scheme, 227,748 fully paid equity shares of Rs. 10 each of the Company

(including 1,748 fully paid equity shares consequent to dilution event) are to be issued to the

shareholders of the erstwhile CCPL. Pending allotment of these equity shares, amount of Rs.

22.77 lacs has been shown as 'Share Capital Suspense' in Schedule 1A in the Balance Sheet.

The difference of Rs. 380.44 lacs between the face value of equity shares issued to the

shareholders of the erstwhile CCPL and the net book value of assets and liabilities of erstwhileCCPL is credited to Amalgamation Reserve. The net profit of erstwhile CCPL for the period from

1st April 2006 to 31st March 2007 is shown separately in the Profit and Loss Account and the

extract of the same is as under:

(b) Amalgamation of Prime Skyline Developers Private Limited The Scheme of Amalgamation of

Prime Skyline Developers Private Limited (PSDPL) with the Company, as approved by the High

Court of Judicature at Bombay vide its order dated 7th March, 2008, has became effective on

21st March, 2008. The erstwhile PSDPL had not commenced business activities. All assets &

liabilities of erstwhile PSDPL are transferred to and vested in the Company with effect from the

"appointed date" i.e. 1st May, 2007 and have been recorded at their respective fair values, on

the basis of valuation by approved value, under the purchase method of accounting for

amalgamation as prescribed by the Accounting Standard (AS-14) Accounting for

Amalgamations.

PSDPL was a wholly owned subsidiary of the Company and hence, no shares were allotted to

the shareholders of PSDPL. The difference of Rs. 7.46 lacs between the book value of shares of

PSDPL held by the Company and the net value of assets and liabilities of erstwhile PSDPL taken

over is credited to Amalgamation Reserve.

Acquisition of Fame India Inox has completed acquisition of Fame India Ltd and now holds

~50.27% stake in the company. Inox had acquired 43.09% stake from Fame India promoters in

February 2010, and acquired a further 7.18% stake via open market operations, making Inox

the majority shareholder. Fame India has 25 operational multiplexes with 95 screens. With this,

Inox has 63 operational properties, with 239 screens.

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