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A PROJECT REPORT ON FINANCE OF Fame India Ltd

By Laxmikant H Bodhare

Roll No: UBI/MBA/I/AP10/10132 Batch: AP2010 MBA in Finance – United Business Institute (2010-2011)

Objective: Analyze the financial reports of fame India ltd, understand and interpret their findings and suggest possible means for sustainable results

The study or the report not only talks all about FAME INDIA LIMITED as a primarily movie screening company, its starting point to its existence till date or its last 7 years financial findings / analysis which is the real topic of this project report, but also gives an overall view on the back ground of Indian film Indian industry in general to relate and establish connection to its history and over all entertainment industry.

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Introduction to study with financial preview Finance is one of the most primary requisites of a business and the modern management obviously depends largely on the efficient management of the finance. Financial statements are prepared primarily for decision making. They play a dominant role in setting the frame work of managerial decisions. The finance manager has to adhere to the five R‟s with regard to money. This right quantity of money for liquidity consideration of right quality. Whether owned or borrowed funds. at the right time to preserve solvency from the right sources and at the right cost of capital. The term financial analysis is also known as „analysis and interpretation of financial statements‟ refers to the process of determining financial strength and weakness of the firm by establishing strategic relationship between the items of the Balance Sheet, Profit and Loss account and other operative data. The purpose of financial analysis is to diagnose the information contained in financial statements so as to judge the profitability and financial soundness of the firm. The Size of the Indian cinema Industry and its Growth Opportunities As per earlier published data the size of Indian film industry was INR 56.5bn, projected to have reached INR153bn by 2010 with 18 percent compound annual growth rate according to FICCI - PricewaterhouseCoopers estimates in 2006. Overall, Indian film industry was estimated to be worth USD1.8bn in 2006. Based on a detailed top-down analysis that took into account the share of private consumption as a proportion of GDP, the wallet share for media and entertainment(M&E) expenditures, and film budgets within the M & E space it was estimated that the Indian film industry will be worth between USD4.4 and 5.1bn (between INR176bn and IND204bn) by 2011 The industry has been getting increasingly more corporatized. Several film productions, distribution and exhibition companies have been listed on stock markets and they have issued shares to public. Many theatres across the country have been turned into

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multiplexes and initiatives to set up more digital cinema halls are already underway. This will not only improve the quality of prints and thereby make viewing a more pleasurable experience but also reduce the piracy of prints (FICCI PricewaterhouseCoopers 2006). Piracy is nowadays a big issue. On the part of the government a lack of educated officers enforcing anti-piracy laws remains the key issue, which is why the piracy has been spreading uncontrollably This problem coupled with lengthy legal and arbitration processes is seen as a deterrent to the fight against piracy. In addition to this the current Copyrights Act is also outdated in the terms of technology improvements and above all, it does not address the needs of the electronic media where the rates of piracy are among the highest today. The Optical Disc Law draft designed to address the need for regulating piracy at the manufacturing stage is still waiting for the ministry approval (FICCI PricewaterhouseCoopers 2006). In comparison to some developed markets where the home market represents more than 40% of overall movie revenues, the home market share in India is relatively small (8%), however, this share is expected to grow to 14% by 2010. The key drivers that will enable this are the increasing number of affordable DVD players and lower prices of original DVDs in order to combat the challenges of piracy The Indian entertainment and media industry today has a lot of support – be it regulations that allow foreign investment, the impetus from the economy, digital lifestyle and consumers‟ spending habits, and also many opportunities the advancements in technology have to offer. All the industry has to do is to cash in on its growth potential and opportunities. The government needs to play a more active role in sorting out policy-related impediments for growth. The industry needs to remove all roadblocks, such as piracy in a concerted manner and at the same time produce high-quality world class end products. The entertainment and media industry has all that it takes to become the star of Indian economy (FICCI - PricewaterhouseCoopers 2006). There are two key trends that will fundamentally change the landscape of the Indian film industry over the next couple of years, namely digitization and a change in consumer

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preferences. Digitization will result in consolidation and emergence of large scale exhibition networks and, in addition to this, in the balance of power between producersdistributors and exhibitors. Changing customer preferences will result in growing global acceptance of Indian films and in the emergence of new media The History Of Indian Cinema Cinema is one of the most vibrant cultural products and a major industry which is as old as Hollywood . It produces around a quarter of the world's films; its 13,000 cinema halls have a daily audience of around 15 million and many of these films are hugely popular overseas. Has not one, but several filmic styles which can be distinguished in terms of film-making (methods of production and distribution), the film text (technical and stylistic features, language) and by the film's reception (by the audience and by critics). These styles cover "art" cinema, made in several Indian languages, including English and "commercial" cinemas, also made in several languages. The commercial cinema of Bombay (Mumbai), made in the national language, Hindi has established itself as the national cinema, and although its reference may be national, it shares the key features of melodrama, the use of song and dance, and the operation of a star system with cinema across Bollywood. The Beginning: Cinema came to on July 7, 1896 with a screening of the Lumiere Brothers' Cinematograph films in Bombay . Yet the first entirely Indian-made film, Raja Harischandra, (produced and directed by DG Phalke) was released in 1913. Phalke was inspired to make a film about Indian mythology after seeing a film about the life of Christ. His style of film drew on emerging modern "Indian" art forms, chromolithography and photography, religious processions and performances, folk and urban theatre, and foreign cinema. This new hybrid created by Phalke became the norm immediately in three of Indian cinema's popular genres: the mythological, the devotional (films about the lives of saints) and the historical. Other genres, grouped loosely as "social films", set in contemporary , were also established during the silent period.

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The Talkies: The coming of sound with the first Indian talkie, Alam Ara (1931), soon divided the cinema audiences. Bombay became the centre of the Hindi-Urdu film, using a form of spoken language, which was understood at varying levels over much of north . Hindi was later to become the (contested) national language of , like Urdu was to . This HindiUrdu film evolved a style which would be seen as national, while the other cinemas began to be regarded as local or regional. A studio system thrived in Bombay until the late 1940s with the emergence of the independent producer, who saw the star as the critical box-office factor, and began to chase the big stars for their movies. The stars in turn hiked their prices to unheard of levels, eating up most of the producers' budgets, a trend which has continued to the present Indian film industry. The Golden Era: Following independence in 1947, the 1950s and 60s are regarded as the "Golden Age" of Indian cinema in terms of films, stars, music and lyrics. Genre was loosely defined, the most popular being "socials", films which addressed the social problems of citizens in the newly developing state. This era saw the emergence of director/producers such as Raj Kapoor (Shree 420 /The Fraud 1955), Guru Dutt (Pyaasa/Thirst 1957), Mehboob Khan (Mother India 1957), BR Chopra (Naya Daur /A New Age 1957) and Bimal Roy (Madhumati1958). Meanwhile, Satyajit Ray, who made his first film, Pather Panchali /Song of the road, in 1955 with help from the West Bengal government, established himself as one of the world's great film makers and was given international recognition when he was awarded an Oscar for lifetime achievement (1992).

The 1970s Hero: The 1970s saw the rise of 's greatest superstar, Amitabh Bachchan (Sholay/Embers 1975), whose roles as the "angry young man" or "industrial hero" (Kishore Valicha), touched a particular nerve during this troubled era. It also saw the swansong of the Muslim social and the historical film, in one of the most exquisite and popular films: Pakeezah/The Pure One, 1971, which has become a cult classic. It was during this

Cinema halls played mostly to male. who introduced the music director AR Rehman to the world. who dominated the 1990s: Madhuri Dixit. Smita Patil. who made films in the more technologically advanced South Indian studios. with roles taken by a new generation of younger stars. Om Puri and Naseerudin Shah. experiments with disco dancing and raperevenge movies. was the biggest box-office hit in Indian cinema history with the slogan "The greatest institution is the human family". the family audience was coaxed back into the cinemas by a policy of video-holdback and the refurbishment of the cinema halls. featuring some of India's most admired actors. The increasing availability of the audiocassette during this decade led to a revival in film music and the return to popularity of the teen romance. director and mentor saw the biggest hits from these years: Dilwale Dulhania Le Jayenge and Kuch Kuch Hota Hai . .6 decade that state sponsorship allowed Indian "art" or "parallel" cinema to flower briefly. it was clear that the only films which could compete with Hollywood at home and abroad were the super plush romance movies originally created by Yash Chopra. This was led by Sooraj Barjatya. Shabana Azmi. who's Hum aapke hain kaun. Salman Khan and Shahrukh Khan. so it is not surprising that this decade is largely remembered as an age of the action movie. working-class audiences. A new wave of film makers... one of the top directors in 1970s. began to release dubbed versions of their films which were major critical and commercial successes in the north. with films ranging from the avant-garde cinema of Mani Kaul to a realistic style best made by Shyam Benegal.!/What am I to you? (1994). Despite the arrival of satellite and cable television. whose sophisticated compositions made film music appeal to a new generation. it was pirated videocassettes which were seen to pose the greatest threat to the cinema. The Cinemas Re-hall: Although colour television was introduced in the 1980s. At the forefront of these was Mani Ratnam (Bombay 1993/4). whose influence as producer. Aamir Khan. By the end of the 1990s though. Juhi Chawla.

have reportedly lost heavily by financing films. the domestic film-making industry. India's movie industry per se remains highly informal. However. Superior movies. Though risks are high on a per-movie basis. the risk spreads out across a number of films. is yet to acquire the character of professionalism on a large scale. Telegu. Canara Bank and Indian Bank. personality-oriented and family-dominated. However. Though India‟s overall entertainment industry is taking on professional colours (with the rise of TV production companies). It is a great sector for foreign investment by corporatized entertainment companies. Tamil. it was not even recognized as an industry.7 India has the world's biggest movie industry in terms of the number of movies produced (around 800 movies annually). however. the technology of film-making in India is perhaps the best among all developing countries though the films themselves remain mostly repetitive in storyline and content. mostly in the Hindi language. Today. in thematic and creative terms. despite its prolificacy. Surprisingly. are made in many developing countries with less sophisticated technologies. the prospects of bank financing and risk insurance are becoming brighter. Indian entertaining industry today India has the world's biggest movie industry in terms of the number of movies produced (around 800 movies annually. albeit at a slow rate (as explained further down this report). Bengali and Malayalam are the languages in which most of the non-Hindi films are made). Until the late 1990s. the financing of films in India often remains shrouded in mystery. Even though many famous people from the movie industry have risen to positions of political . the oft-murky world of film industry‟s finances has not tainted the film industry‟s perception in the general public eye or in the government‟s attitude. Two banks. banks and other financial institutions continue to avoid the industry due to the enormous risks involved in the business. Even though it has since been recognized as an industry. As a result.

none of them have cared to reveal – or have been under pressure to reveal – the truth about the industry's finances. Film production thus became a risky business and the relationship with usurious moneylenders strengthened over the years. is suspected to have changed since the 1960s when the studio system collapsed and 'freelance' performers emerged. including seats in federal and state parliaments. New Theatres and Prabhat Studios). they began to operate as freelancers commanding fees in proportion to the box office performance of their recent films. the producers had no further liability. centered on distributors. – non-conventional but corporate resources. Star System: The financing pattern.8 and social responsibility. If this minimum guarantee was fulfilled. – promissory note system (locally called 'hundi' system): this is the most widely prevalent source. Profit or loss would be the destiny of the distributors. distributors would pay 50 per cent of the film-making cost leaving it to the producer to get the rest from other sources. Rather. This gave rise to the 'star system' in which actors and actresses ceased to have long-term contractual obligations towards any studio or film production firm (such as the now defunct Bombay Talkies. The rot or financial amorality of India's film industry seems to have set in since the 1960s. and – underworld money: about 5 per cent of the movies are suspected to be financed by these sources. film producers would get loans from film distributors against a minimum guarantee: this meant that the distributors had to ensure that the film was screened in cinemas for a fixed minimum period. . In the changed system. This increased costs of film production since the more successful actors and actresses hogged major proportions of the producers' budget. Until the 1960s. The 'other' sources are: – conventional moneylenders (who lend at an interest rate of 36-40 per cent annually).

the risk spreads out across a number of movies. such as Mukta Arts. The Film Federation of India is actively seeking to make film financing a viable proposition for banks. The granting of industry status to the film industry will eventually allow overboard financing of films. A big budget Hindi movie can cost in excess of US$30 million. the overall entertainment industry in India is taking on professional colours and this will change the culture of the film industry too. Foreign entertainment companies.9 As at the start of 2001. Despite high risks on a per-movie basis. a reasonable budget film in Hindi could cost US$1. have made public share issues. The film industry is currently losing unestimated volumes of revenue due to competition from local cable operators who illegally beam newly released movies into the drawing rooms of their subscribers. Stricter enforcement of copyright law will help the film industry in its fight with cable operators. can do good business if they invest in Hindi and other Indian language films. The 'bigness' of the budget is attributable mainly to the high fees paid to 'stars'. celebrated music directors. A low budget Hindi film can be made for even as low as Rs. As mentioned above. though this will result in production of fewer films than at present. high-end technologies and expensive travel costs to shoot in exotic locations worldwide. however. Some film production companies.75 million. It is likely that films would also be insured to offset possible losses for banks. with steady revenue streams. Future This is not intended to be a scare story. thus keeping out of the world of murky financing. 15 million. .

In early 70‟s Mr. Chhaila Babu. Holi aayee re. and exported various films like Prem Nagar. Balakrishna Shroff (sons of Mr. Night in London. Basant Bahar. Post Box 999. Guide. Chalti Ka Naam Gaadi. Evening in Paris. In 1997. Do Raaste. with the main objective of financing Bollywood films. By mid 90‟s Shringar Films had achieved success in the distribution business with the launch of films like Qayamat se Qayamat Tak. Bandit Queen etc. Shravan Shroff‟s leadership Shringar Films ventured into the exhibition business with programming of theaters as the company‟s forte. Kafila. Raja Hindustani. Gobindram N. and began acquiring film distribution rights and distributed them to theaters through M/s Chhabra Film Exchange. distributed during this period. Introduction The genesis of the business started of in the early 50‟s when Mr. Howrah Bridge. Success of such films made Shroff brothers to launch Shringar Films in 1975. Bombay. Dilli ka thug. Some of their best known films financed are Dusham. Sazaa were films that Maya & Co. By the mid 60‟s the firm formed Maya & Co. Julie. Mera Gaon Mera Desh.10 About Fame India Ltd – Positioning Integrated film exhibition and Distribution Company operating a chain of multiplexes that offers a world class viewing experience to the consumer. Rangeela. Aradhana. The success of the films at the box office prompted the Shroff brothers to venture into the distribution trade. under Mr. Kinara to various overseas countries. Jhumroo. Gobindram Naoomal Shroff and Mr. Vasudev Naoomal Shroff formed a partnership firm by the name of Issardas Naoomal. . Dharma etc. Shyam Shroff and Mr. Shroff launched a partnership firm Shyamlal Balkrishna & Co.

poorly maintained theaters to high quality multiscreen set-ups. The Shringar brand over the last several decades has stood for ethical and fair practices and transparent dealings. Balkrishna Shroff. West Bengal. by capitalizing on the vast untapped potential of the Indian multiplex business. Their foray into Film Exhibition was led by Mr. They realized that good content. they realized that the exhibition business in India will soon move away from the traditional standalone. which are aimed at providing quality viewing experience to movie viewing audience. operates 97 Screens and 27. who are amongst the most respected names in the Indian Film Industry. Gujarat. Haryana. Shyam Shroff and Mr. Currently. Shravan Shroff. Sazaa etc .191 seats across 12 cities in India in sates of Maharashtra. Formed Maya & Co and released movies like Dilli ka Thug. This is the core strength on which all their businesses are built. Thier Film Distribution business continued to be spearheaded by Mr. After studying market dynamics and national movie trends and comparing them with the developed markets. They therefore decided to expand their operations into the film exhibition business. Year wise stages of evolution (Milestones) for the FAME Group 1950's 1960's Started off as Movie Financer‟s Started acquiring and releasing films. Jharkhand and Karnataka.11 The Promoters have been instrumental in bringing the highest quality of entertainment to Indian movie audience with over 29 years of experience in distribution. Their distribution and exhibition businesses are carried out through two entities namely Shringar Films Limited (SFL) and FAME INDIA LTD (formerly Shringar Cinemas Limited (SCL) respectively. high service standards and modern cinema halls will bring in the required competitive edge over other formats and thus increase footfalls in theaters.

Mumbai. and released them in untapped markets with a focused marketing strategy. 2006 Launched Fame Jai Ganesh Pune. Also established a reputation of niche products. Fame Raj Empire Surat. Fame Nakshatra Dadar. Thakur Fame kandivali & Fame Tapadia Aurangabad . 2001 Investment by India Value Fund Trustee Company Private Ltd to fund expansion 2002 2004 2005 Launched Fame Adlabs Multiplex at Versova Mumbai. Distributed movies for leading actors like Amitabh Bachchan. Shah Rukh Khan etc 1995 Ventured into Exhibition business by signing contracts for program management for theaters such as Gemini. Maratha Mandir (Matinee) 1997 Signed contract for program management of Cinemax theater at Goregaon. Upto 1990's Established itself as a leading distributor Pre-dominantly Theystern India centric Released an average of 10-12 movies per annum. under the lease model Upto 2000 Provided management of programming services for many theaters in Mumbai on a contract basis. Launched Fame Raghuleela Kandivali and Fame Hiland Park Kolkata. Launched Fame Malad. Fame Nasik.12 1975 Shyam Shroff and Balakrishna Shroff launched „Shringar Films‟ and focused on release of earlier released films.

13 2007 Launched City Pulse Anand. Thakur Fame Dahisar & Thakur Fame Movie Kandivali 2008 Launched Fame Lido Bengaluru and Fame South City Kolkata. Kalyan.co. Fame Raghuleela Vashi. Andheri West. 2010 Launched Fame Vihar Vadodara and many more expected in the near future. Big Pictures Hospitality Services Pvt Ltd 4.fame. Fame Metro Junction Mall. 400053 India. Group of companies 1. Fame Neelyog Ghatkopar. Mumbai. Fame Motion Pictures Ltd 3. Fame Seven Seas Vadodara. Fame Shri Ram Dhanbad. Ltd Address: Fame Adlabs 2nd Floor Andheri Link Road Oshiwara. Whitefield Bengaluru. Fame Forum Value Mall. Fame Shalimar Bharuch. Fax: 91 22 6640 3655 www. 2009 Launched Fame Panchkula.in 835 Employees Last Reported Date: 05/26/11 Founded in 1999 . Fame Shankar Nag Chitramandira. Fame India Ltd 2.Phone: 91 22 5640 3636. Swanston Multiplex cinemas Pvt. Fame Fun N Shop Pune.

by leveraging on their strong Film Distribution experience. To provide exceptional consumer experience. In 2001 in order to encourage investment in the sector. Combined with the availability of high quality retail space in India. where each recliner stretches to 150 degrees. They have introduced the „Gold Class‟ screens which feature natural leather recliners. They saw an opportunity in providing an outstanding movie viewing experience to the Indian audience. which can be ordered and delivered on ones seat!. They were formed with the core objective of providing cinema goers a unique movie viewing experience. super size screens. they felt this was a viable opportunity for a successful business. Apart from popcorn and soda. Evolution: They were incorporated in 1999 and commenced operations in the same year. They benchmark themselves with global multiplexes. reoriented their business model to increase their focus on the nascent Film Exhibition business.14 Fame India Ltd. the avid movie going habits of Indians and the paucity of good quality theaters in the country. They raised fresh equity capital from GW Capital (one of the leading venture capital funds. They also offer specialty food. which made investments in this sector more attractive. Background In the late 1990s. . Sensing this opportunity. state of the art projection and sound systems. therefore. and strive to enhance their service offering in line with the emerging trends globally. They. the Maharashtra government announced significant tax benefits for multiplex operators. they decided to invest further capital into the Multiplex business. and now know as India Value Fund) and commenced operations.

operates 97 Screens and 27. Haryana. Jharkhand and Karnataka.15 Currently. West Bengal. No of screens No of seats Properties under Fame India Limited Mumbai Pune Nashik Aurangabad Kolkata Anand Bengaluru Dhanbad Bharuch Panchkula Baroda Properties under Joint Venture Mumbai 5 1282 32 6 3 3 10 3 10 4 3 3 4 8951 2024 1318 1012 2405 624 2386 996 890 652 1116 Properties under management model Kolkata Surat Baroda Total 2 6 3 97 701 1840 994 27. Gujarat.191 .191 seats across 12 cities in India in sates of Maharashtra.

They have a professional team with many years of experience in evaluating various locations in terms of catchment area. This is the core strength on which all their businesses are built. Capital-Efficient Project Design And Execution: Their projects are planned and conceived in a manner that each property is profitable on a standalone basis. They use their internal skills to assess the location and . expenditure patterns and demographic trends. Proven Project Management Skills: They have an in-house professional team for project implementation supported by project management consultants. competing alternatives. Ability To Identify Locations: One of the biggest factors for the success of any multiplex is the location. They believe that their skill in identifying locations is one of their key strengths.16 They expect to roll out at least 9 screens further in the near future : No of screens No of seats Properties under Fame India Limited Chandigarh Chennai Total 4 5 9 1005 1308 2313 STRENGTHS Market Reputation: The FAME brand has been identified with professionalism and transparency in business practices. This model of implementing projects has enabled them to complete properties within budgets and time.

by providing services such as. This distribution experience is particularly useful for the exhibition business in the following way:  Ability to identify under serviced areas and/or untapped locations. tele-bookings. Marketing strength: The brand „Fame‟ has been established in the consumers mind due to marketing through newspaper ads.e.17 demographics and decide on capital expenditure accordingly. contests. Long-standing experience in Film Distribution: Apart from the experience in areas of exhibition i. direct mailers. it also ensures an efficient use of capital. DJ in the lobby over the weekend etc. Selection of content: Due to their experience in content selection and programming for many theaters and a deep understanding of different film genres (developed in their distribution business). This helps us in selecting locations. internet mailers. they have experience of over 25 years in film distribution. Purple Ribbon (their social initiative) and the use of promotions like paid previews. They manage these properties pursuant to agreements entered into with the respective owners of the properties. programming. Customer Orientation: „Fame‟ has built a clear focus on customer orientation.  Relationship with producers/distributors in getting access to content. internet bookings. movies merchandise. home delivery of tickets. theater management and running multiplexes. Apart from standalone profitability of each site. radio spots. IVR and kiosk bookings. The properties on which they operate are not owned by them. Premieres of films are also used as an important marketing tool. . They are well-placed to exploit each film available in the market. where unmet demand for a movie theater exists.

retrofits and some standalone properties. . which provide them a regularly updated MIS. This helps in closure of books every month and preparation of MIS reports within 5 days of the month end.18  Relationship with theater-owners enables us to have access to locations for retrofits properties. This is important for content selection. kiosks. which covers all aspects of managing and operating cinemas. Integrated Technology Backbone: They have laid a lot of emphasis on a technology and systems. They use different software. The product line is scalable so as to be suitable to exhibitors who run from one cinema to hundreds of cinemas.  Understanding of different film genres and their box-office potential.  Vista Vista is ERP software made by a developer in New Zealand and used internationally. This assists them in their day to day operations.  Boss The Back Office Software System (BOSS) is a specialized Accounting System for the hospitality Industry / Service Oriented Companies. This software is integrated completely with Vista. GROWTH STRATEGY Their growth strategy is to increase number of patrons is through a „pull‟ – innovative programming and „push‟ – block booking and build a pan India presence is a cost effective manner. Apart from Box Office and F & B sales. and furthering “Fame” as an experiential multiplex brand through a mix of multiplexes. the Vista suite is used for web ticketing. employee scheduling etc. thus enabling accounting to remain online on a daily basis.

with the objective of bringing in the highest quality of entertainment to Indian movie audience. Chhota Chetan. Chalte Chalte and many more. they have established themselves as a leading film distribution company.a strategy which has redefined conventional distribution practices. a partnership firm of the Promoters. the distributor is the key stake holder. Distribution and Exhibition are the three key segments. of which. They carry out distribution business through their subsidiary. Movie Khuda Ke Liye Mulla Leading Star Cast Shaan. Chandni Bar. . they have distributed a number of successful movies such as Qayamat Se Qayamat Tak. Biju Menon. Their Past Track Record They have distributed the following movies in the past 3-4 years period: . Hyderabad Blues. Some of the foreign films distributed by us are Life is Beautiful and Baran (the Iranian film). Fame Motion Pictures Limited. are some of the appreciated films distributed by Shringar Films. Iman Ali Dileep. Meera Nandan. Chachi 420. Lagaan. Leela.19 Fame Motion Pictures Ltd (Formerly Shringar Films Limited) Background In the value chain of film making. Fawad Khan. Fame Motion Pictures Limited was founded in 1999 and it took over the business of Shringar Films which was founded in 1975. Bandit Queen. In the past. one of the leading film distributors in India. Jo Jeeta Wohi Sikander. Baazigar. Hence in a span of 29 years. Rangeela. Raja Hindustani. They have also been pioneers in creating national success out of niche movies . Production. The success of their distribution business can be attributed to its sound business strategy and transparency in business dealings.

Russell CroThey. Max von Sydow Transformers Shia LaBeouf. Nick Nolte Iron Man Robert Downey Jr. Megan Fox. Kiran Janjani Return of Hanuman Shrek 3 Animation Mike Myers. David Strathairn American Gangsters Denzel Washington. Ahsaas Channa. Jeff Bridges Rush HThier 3 Chris Tucker..20 Spiderwick Chronicles Freddie Highmore. Vidya Balan Ekklavya Amitabh Bachchan. Jackie Chan. Arshad Warsi. Eddie Murphy. ChiTheytel Ejiofor Lage Raho Munna Bhai Sanjay Dutt. Josh Duhamel The BThierne Ultimatum Matt Damon. Sarah Bolger. Julia Stiles. Cameron Diaz . Sanjay Dutt My Friend Ganesha Arun Bakshi. Saif Ali Khan. Terrence Howard.

both satellite and terrestrial.Kishore Kumar.Kishore Kumar.Vyjayantimala Ashok Kumar. Home video rights in India and abroad.Jugal Hindi Hindi All Bimal Roy Films Ramayan For Satellite Television Animated Hindi Hindi . A small mix of these movies is listed below: Name of the Film Asha(B/W) Bandi(B/W) Star Cast Kishore Kumar. Waheeda Rehman Nasiruddin Shah. They also have various distribution and exploitation rights for several movies which include a combination of television rights. their rights are perpetual as they own the entire negatives of these films.Meena Kumari Kamal Hassan.Beena Rai Language Hindi Hindi Chalti Ka Naam Gaadi(B/W) Yahudi Sanam Teri Kasam Halo Ashok Kumar.Madhubala Dilip Kumar.21 Titles in Their Past Library In addition to the above movies distributed by them.Shabana Azmi. For most of these movies.Reena Roy (Children movie directed by Santosh Sivan) Hindi Hindi Hindi Hindi Solvaa Saal Masoom Dev Anand. Cable TV rights.

they believe that maximum value will be created for entities who “own the customer” (through Exhibition) or “own the content” (through Rights Ownership). (BPHSPL) BPHSPL is a wholly owned subsidiary of Fame India Ltd (formerly Shrinar Cinemas Ltd) is into the business of food courts under the brand name “VIA 1 Street”. Big Picture Hospitality Services Pvt. Ltd. Aamir Malik Nagesh Kukunoor Punjabi English Growth Strategy Going forward they propose to strengthen their position in distribution by:  Continue acquiring quality film product rights at reasonable prices for theatrical distribution  Follow the portfolio approach to mitigate the risk of possible product failure at the box office. Their Exhibition business is the vehicle for the “own the customer” strategy. A food court and multiplex on the same floor of a mall offers the consumer a good mix of food and retail. This coupled with an anchor tenant status gives us better negotiating power with the developer. . Similarly they propose to make the distribution business a vehicle for its “own the content” strategy. In future.22 Khamosh Pani Hyderabad Blues Kirron Kher.

2002. College and has a post-graduate diploma in marketing management from Institute of Marketing and Management. It commenced operation on April 5. Mr. and heads its strategy and finance functions. Kishore Biyani: He holds a bachelors degree in commerce from H. Ltd. Mr. . New Delhi and an industrialist with over 30 years of experience. This multiplex is part of CitiMall Andheri. 2001 by FAME INDIA LTD (formerly Shringar Cinemas Limited) and the Vassanji Mamania Group. graduated in Commerce and Law. Board of Directors Mr. R. Pavan Kumar Jain. He is the Director & Head (Corporate Finance) of the Group. Fame Adlabs is one of the first multiplexes to start in Mumbai.23 They expect to launch two food courts in the near future one in Chandigarh and another in Baroda Swanston Multiplex Cinemas Pvt. and thereafter took up Chartered Accountancy and Cost Accountancy as professional qualifications. . The company manages operations of the multiplex „Fame Adlabs‟ located at Versova Andheri. Deepak Asher. Mr. (JV) Introduction Swanston Multiplex Cinemas Pvt Limited (JV) was incorporated on October 11. Jain is a chemical engineer from IIT. SMCPL is a 50:50 joint venture between Fame India Ltd (formerly Shringar Cinemas Pvt Ltd) and Adlabs Films Ltd.

11 continued to be a challenging year for the industry with poor box office performance of few big budget movies like „Kites‟. He also holds a degree in Hamburgerology from the Hamburger University. OUTLOOK The content pipeline for immediate future suggests that „sequels‟ are here to stay. USA INDUSTRY STRUCTURE & DEVELOPMENTS MEDIA & ENTERTAINMENT Though performance of the media and entertainment industry has not been very encouraging of late. „Udaan‟ etc. However. Further. primarily led by buoyant macroeconomic Indicators. Overall performance of filmed entertainment segment in 2010 was rather poor.24 Mr. registering a degrowth of 7% with a total industry size of Rs.3 billion as compared to Rs. Mr. „Tere Bin Laden‟. 83.3 trillion at a CAGR of 14% by 2015. continued emphasis on digitisation in both exhibition and production (3D and special effects etc.). „Tees Maar Khan‟ etc. be it Hollywood or Bollywood. „Band Baaja Baarat‟. according to FICCI KPMG report of 2011. Jatia holds a degree in Business Administration from the University of Southern California. FILMED ENTERTAINMENT The year 2010 . The dominance of domestic box office contribution is expected to remain almost at 2/3rd level. Company .3 billion in 2009. it is expected to reach a size of ~Rs 1. some niche content such as „Love Sex Aur Dhoka‟. Amit Jatia. was warmly welcomed by audiences. Oak Brook (Illinois. Los Angeles. 89. coupled with growth in multiplex screens is expected to boost the Industry size to reach Rs 132 bn by 2015. „Guzaarish‟.

25 recently launched multiplex under management model. is now witnessing a gradual language de-risking on the back of increased success of Hollywood films and improvement in quality and flow of regional films. multiplexes have opportunities of cashing in on the same. Language de-risking The industry which was once heavily dependent on Hindi movies. OPPORTUNITIES Growth in disposable income and gradual increase in younger population Positive economic conditions resulting in higher disposable income especially in the hands of younger age group is expected to lead to higher spends on leisure & entertainment. Movies being an popular and affordable entertainment option. The fit-outs are underway for couple of multiplexes which are expected to commence operations shortly. . entertainment tax is expected to be standardized across the nation. Rationalisation of tax structure With the Goods and Services Tax rollout reaching advanced stage. This is likely to result in enhanced margins on account of lower entertainment tax rates and ability to claim input tax credits. thereby scaling to 97 operational screens as of date. Urbanisation in Tier 2 cities The ever growing urbanisation & modernisation of Tier 2 cities bring in opportunities for deeper multiplex penetration in the under-screened market.

 To analyze and interpret the trends as revealed by critical ratios of the company in particular. Influence of „movie-ratings‟ on the patrons The „movie-ratings‟ released in print mediums / websites / radio / television channels etc. Lower patron turnout due to alternative entertainment Considerable dip is seen in the interest levels of moviegoers with cricket-fever during the summer season. the internet piracy is becoming more challenging. IMPROTANCE OF THE STUDY  By “FINANCIAL PERFORMANCE ANALYSIS OF FAME INDIA LTD” we would be able to get a fair picture of the financial position of FAME INDIA LTD. seem to be having an influence on patron‟s decision making of watching a particular movie. movie releases are also limited during this time. liabilities structure of the company during the period of study. .  To analyze the profitability and solvency position of the company with the existing tools of financial analysis.26 THREATS Piracy Apart from piracy in conventional formats such as DVDs/CDs. Further.  To analyze the financial stability and overall performance of Fame India Ltd in general.  To study the changes in the assets. SPECIFIC OBJECTIVES OF THE STUDY  To study the financial position of the Fame India Limited.

RESEARCH DESIGN: Descriptive research is used in this study because it will ensure the minimization of bias and maximization of reliability of data collected. The researcher had to use fact and information already available through financial statements of earlier years and analyze these to make critical evaluation of the available material. RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. . So. it may be understood as a science of studying how research is done scientifically.  Protecting the property of the business. the type of data to be collected and the procedure to be used for this purpose were decided.  The study of financial performance can be only a means to know about the financial condition of the company and cannot show a through picture of the activities of the company. the study has been confined for a period of 7 years (2005-20011).  Ratio itself will not completely show the company‟s good or bad financial position. LIMITATIONS OF THE STUDY  The analysis and interpretation are based on secondary data contained in the published annual reports of FAME INDIA LTD for the study period. From the study.  Due to the limited time available. Hence by making the type of the research conducted to be both Descriptive and Analytical in nature. the research methodology not only talks about the research methods but also considers the logic behind the method used in the context of the research study.27  By showing the financial performance to various lenders and creditors it is possible to get credit in easy terms if good financial condition is maintained in the company with assets outweighing the liabilities.

fm-kp. 2.in/InvestorInformation.html METHODS OF DATA ANALYSIS: The data collected were edited.in/annual. . Common Size Statement.pdf http://www.html http://www.in/FameIndia.28 DATA COLLECTION: The required data for the study are basically secondary in nature and the data are collected from the audited reports of the company from their web site. classified and tabulated for analysis. For the purpose of simplified understanding the data – particularly the currency amount in Indian rupees as shown in company‟s web site under financial reports or annual reports was shown in corers (CR) and rounded off.in/financial.si/zalozba/ISSN/1854-4231/3_115-123.indiancinemas.com/News28/The+History+Of+Indian+Cinema.fame. Comparative statement.fame.fame.co. The analytical tools used in this study are: ANALYTICAL TOOLS APPLIED: The study employs the following analytical tools: 1.co.co. Source of information http://www.fame.html?newsid=40&linkid=28 http://www.html http://www.co.html http://www. SOURCES OF DATA: The sources of data are from the annual reports of the company from the year 2005 2006 to 2010-2011.

Comparative income statement of Fame India Ltd for the year 2005 to 2011 D – Comparative balance sheet of Fame India Ltd for the year 2005 to 2011 E – Common size statement in percentage of balance sheet of Fame India Ltd for the year 2005 to 2011 F – Trend percentage of Fame India Ltd for the year 2005 to 2011 G – Revenue chart of Fame India Ltd for the year 2005 to 2011 H – Net profitability chart of Fame India Ltd for the year 2005 to 2011 I – Current ratio of Fame India Ltd for the year 2005 to 2011 J – Current ratio chart of Fame India Ltd for the year 2005 to 2011 K – Quick ratio of Fame India Ltd for the year 2005 to 2011 L – Quick ration chart of Fame India Ltd for the year 2005 to 2011 M – Return of investment of Fame India Ltd for the year 2005 to 2011 N – Chart showing return of investment of Fame India Ltd for the year 2005 to 2011 . comparison. Trend Percentage. The study features following statements. 4. chats and ratios A – Classification of balance sheet of Fame India Ltd for the year 2005 to 2011 B . Ratio Analysis. trends.29 3.Classification of income statement of Fame India Ltd for the year 2005 to 2011 C .

It purposes is to convey an understanding of some financial aspects of a business firm. or may reveal a series of activities over a given period of time. ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENT: The financial statements are indicators of the two significant factors: 1. refers to such a treatment of the information contained in the Income Statement and Balance Sheet so as to afford full diagnosis of the profitability and financial soundness of the business.30 ANALYSIS AND INTERPRETATION Financial statement is an organized collection of data according to logical and consistent accounting procedures. These three balance sheet segments give investors an idea as to what the company owns and owes. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders' Equity . It may show a position at a moment of time as in the case of a balance sheet. Financial soundness Analysis and interpretation of financial statement therefore. Thus the term “Financial Statement “generally refers to two basic statements: (i) the Income Statement and (ii) the Balance sheet. Profitability and 2. liabilities and shareholders' equity at a specific point in time. as in the case of an Income Statement. as well as the amount invested by the shareholders. Balance Sheet: A financial statement that summarizes a company's assets.

6 120 19.1 Cr. 38 Cr. where as the loan funds were highest at Rs.6 82.8 54.7 40.2 79 0.5 24.6 0 0 212. figures also show that shareholder funds and loan funds has grown from year to year.1 154.3 93.7 114. 37.1 85.4 0 263.3 106.2 0 263. Fixed asset in 2011 stands at Rs. investment jumped from Rs. 145.7 26.3 212.7 0 194.4 51.5 Cr in the year 2005 to Rs.9 0 267 68.2 115.2 0 243.9 42 0 9.1 1. 5.5 82.2. 107.5 35 2.9 32.2 Cr in the year 2010.7 Interpretation: 1.9 Cr 4.7 21.2011 ( Rs. 82. fixed assets of the company has grown from year to year.Expenditure P&L a/c Total Assets LIABILITIES Shareholder‟s Funds Loan Funds Current Liabilities & Provisions Deferred Liabilities TOTAL LIABILITIES 2005 2006 2007 2010 2011 38 2.8 61.9 Cr in the year 2006 and after which it stayed more or less constant till year 2011 3.4 83. 2.4 8 0 115.4 4.8 60. 26.7 24. total assets of the company in 2005 were Rs.4 45. 93.3 128.9 26.5 37.3 0 0 243.in Crores) Rs in 2008 2009 PARTICULARS ASSETS Fixed Assets Investment Current Assets Mis.4 16.9 78. current assets were highest in the year 2007 at Rs.9 107. 131. .5 62.8 77.9 0.1 73.7 Cr compare to its previous year 2005 which was Rs.9 0 0 194.5 Cr which stands to Rs.6 Cr.6 20.4 161. 243.9 131.3 91 0 0 267 145.7 Cr in the year 2011. Maximum shareholder funds were in the year 2008 at Rs.2 61.31 Table no 1 Classification of Balance Sheet of Fame India Limited from 2005-2006 to 2010 . except in the year 2006 it was Rs.7 22.

24) 1.42 90.99 .36 116.5 31.0) 0.89 6.31 17.32 6.2) (4.10 EBIT (3. In the year 2010 the company had highest current liability at Rs.71 3.67 1.64 7. Also referred to as a profit and loss statement. capital (in the form of depreciation) and cost of goods etc. It draws information from the various financial models such as revenue.31 17.07) 14.89 6.83 12.35 6.9 Cr Income statement A document generated monthly and/or annually that reports the earnings of a company by stating all relevant income and all expenses that have been incurred to generate that income.11 0.3) (1.35 Provision for taxation (0.9 Cr In the year 2005.88) 9.62 16.21 5.44 Less : Interest 1.23 EBIDT (1.43 150.05 17. the income statement illustrates just how much company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result.98 17. there after it was growing.88 (6.64 4.58 18.7) 2.42 1.07) (0. 61.00 4.21 0.10 11.50 14.2011 ( Rs.40 23.73 62. By combining these elements. 16.54 Less : Depreciation 1. which is either a profit or a loss.3) (4. Table no 2 Classification of Income Statement of Fame India Limited from 2005-2006 to 2010 .79 (1. expenses. It's a scorecard on the financial performance of your business that reflects when sales are made and expenses are incurred. The income statement is a simple and straightforward report on a business' cashgenerating ability.in Crores) Rs in Particulars Year 2005 Year 2006 Year 2007 Year 2008 Year 2009 Year 2010 Year 2011 Total Revenue 10.24) 1.62 24.08 Profit before Tax (PBT) (5.78) 10.55 3.5 3. 8 Cr from previous year which was Rs.69 0.9 3.63) Profit after Tax (PAT) NET Profit (5. current liability decreased in the year 2006 to Rs.81 (6.73 161.

56 14.30 (25.5 Cr to Rs.84) .18) (319.54) 28.23 6.48 (301.14 0. -3. Comparative statements Format for balance sheet and income statement (profit and loss account) in which each item shows figures for the current as well as the preceding accounting period(s) for comparison.12 2.07 (84.86) (10. and Rs.33) (7.12) 29.46 5.16) 15. 1. .72 1.74) 0.31 90.55) 3.22 (11.86 34. 12. 1.41 168.72 614.50 6.99 Cr respectively.45 0. 161.12 6.418.92 0. interest and tax‟s was in negative in the year 2005 at – Rs. 10.77 26.92 2.05) (159. the company had net losses in the year 2005.77 0. – 1.32 2. 3.3 Cr and Rs.50 (15.33 Interpretation 1.09 2.92) (5.91 1.27 0.75 3.3 Cr.80) 7.69) (131.19 22.56 (8.61) (393. 2009 and 2010 at Rs.60) 91.42 19.36 (66.67) 10.49 (1.72 1.13 (88.in Crores) Rs in 2009-2010 2010-2011 Absolute % of Absolute % of Change Change Change Change Change Change Change Change Sales EBIDT Less: Depreciation EBIT Less: Interest Charges PBT Less : Tax PAT (Net Profit) 21. Earnings before depreciation. Earnings before interest and tax was in negative for first 2 year at Rs.65) (121.52) 1.24 Cr respectively 5.61) (4.00) 5.88 (874.99 (247.60 (0.00) (432. 4.42 Cr. – 6.75) 40.07 (6.42) 27.85) 135.85) 1.38 202. the company made net profits only the year 2007.89 (13.83 Cr.00 (94. 2008.83 0.94 4.77 46.22 1.30) (7.7 Cr.63) 8.4.80 (0.07 Cr in the year 2005 and 2006 respectively.89) (8.52 (11. 2.16 (0.71 96.12 (0.46 (67.88 Cr. 9.46 1.88 Cr and 1.96 39.24) 30. Rs. In the year 2005 it was at Rs.69 15.061.23 Cr in the year 2011 which is great achievement.59 44.70 26.37 26.2011 PARTICULARS 2005-2006 Absolute 2006-2007 % of Change Absolute 2007-2008 % of Change Absolute 2008-2009 % of Change Absolute % of Change ( Rs.68 40.26 4. the total revenue of the company has been constantly increasing from year to year at a very rapid pace.41) (2. Table no 3 Comparative Income Statement of Fame India Limited from 2005-2006 to 2010 .60) 35.90) (100. 2006 and 2010 at Rs – 5.71 15.27 0.80) 534.05) 62.

4.77Cr and the same change in year 2010 compare to 2009 was 40% at absolute of Rs. 40Cr.34 COMPARATIVE INCOME STATEMENT: 1. the interests percentage change in year 2006 compare to 2005 was 91% at absolute of Rs. the depreciation was in control.1.248% and after which it was positively highest at 614% comparing the 2007 with 2006.71 Cr with 300% and in the year 2010 it shows net loss of percentage 432% compared to year 2009 with absolute value of Rs. 2. interest and tax in terms of its percentage compare to year 2006 to 2005 was in negatively highest at . Most businesses use comparative balance sheets to help increase profits and functionality of a company. A balance sheet is a detailed account of everything lost and gained financially during a certain time. with respect the year 2005. The percentage change was lowest in the year 2011 at almost 7% compared to 2010 even when this (2011) year the sales was highest. Only in the year 2009 and 2011 the value was change was Rs 5. containing both physical and abstract data. And it was the only highest percentage change which has seen in year to year comparison. A comparative balance sheet is useful because a business can instantly compare profits and losses between different time periods. 5. 5. 14.12 Cr. . in terms of absolute value change from year to year. There after percentage in comparison has seen going down even if the sales was constantly increasing.52 CR and Rs.36 Cr respectively. the highest net gain change percentage was the year 2007 compare to year 2006 with absolute value of Rs. Comparative balance sheet A comparative balance sheet is designed to show financial differences between several accounting periods. 2006 had almost 200% increases in sales. – 8. 3. surprisingly the earning before depreciation.

12 (100.47) 0.79) 976. even if the financial stability of the company is sound showing sufficient assets.05) - 37.70 5.20) 63.51 - (7. And again in the year 2010 compare to year 2009 the absolute change in fixed asset gone down with Rs – 7 Cr and in year 2011 compare to year 2010 the absolute change gone down to Rs.53) 49.70) (100.82 8.00 (0.in Crores) Rs in 2009-2010 2010-2011 Absolute % of Absolute % of Change Change Change Change Change Change Change Change ASSETS Fixed Assets Investment Current Assets Mis.66) (100.70) 0.30Cr but the nest subsequent years there has been growth in terms of absolute change of Rs. 42.70 - (12.00 (2.19 (13. It is difficult to predictive consistency in its future results due to highs and lows in percentage change and absolute amount change from year to year comparison in its comparative balance sheet statement.00 (29.03 (27. current liability change was also high in the year 2009 compare to year 2008 at absolute value of Rs.50) 15.51 (28.00 23.20 - 51.50) 164.00) 100.00) - (5. .90) (0.80 (4.40 7.00) (7.38 (52.63 12.35 Table no 4 Comparative Balance Sheet of Fame India Limited from 2005-2006 to 2010 .35) (15.50 (34.00) (0. Rs.80) 42.40) 4.28) (5.04) (12. and 2009 to 2008 respectively.70) - (7.80 Cr.33) (9.00 (8.50Cr 3.2011 PARTICULARS 2005-2006 Absolute 2006-2007 % of Change Absolute 2007-2008 % of Change Absolute 2008-2009 % of Change Absolute % of Change ( Rs.32 146. the loan fund change was highest in the year 2007 compare to year 2006 at absolute value of Rs 74. – 9.00) 65.88) (2.90) 12.13 (7.26 (17.30) - 73.10) (4.30 (1.40) 2.50 - (11. there was negative change in fixed asset of the company in the 2006 compare to year 2005 in absolute amount it was Rs – 0.43 (1.75) - INTERPRETATION: COMPARATIVE BALANCE SHEET 1.Expenditure P&L a/c LIABILITIES Shareholder‟s Funds Loan Funds Current Liabilities & Provisions Deferred Liabilities (0.10 Cr 2.30 70.40 0.48 60.00 (100.90 (100. 45 Cr and Rs.80 10.20) 2.50) 152.90 (9.60 (0.20) - (4.80 (2.40 2.50 19.10) 12.60 Cr and in the year 2009 compare to 2008 at absolute value of Rs. 54Cr respectively comparing the year 2007 to 2006.00) 45.00 20.40 1.30) (10.80) 74.30 Cr. Over all.00) (9.42) 62.18 (16.40) 20. 23.50) (2.43) 156.60 11.25 - 38. 19.94 - (9. 2008 to 2007.30) 24.05) (0.15) - 54.

the structure of the common size statement uses a common base figure. Unlike balance sheets and other financial statements.36 Common size statement of balance sheet The common-size statement is a financial document that is often utilized as a quick and easy reference for the finances of business.2011 ( Rs. the company also good amount of current assets at an average of 38% from overall total assets for last 7 years .in Crores) Rs in PARTICULARS 2005 2006 2007 2008 2009 2010 ASSETS Fixed Assets 46 33 32 50 61 58 Investment 3 23 13 13 8 8 Current Assets 42 36 56 37 30 34 Mis.Expenditure 3 0 0 0 0 0 P&L a/c 6 8 0 0 0 0 Total Assets LIABILITIES Shareholder‟s Funds Loan Funds Current Liabilities & Provisions Deferred Liabilities TOTAL LIABILITIES 100 100 100 100 100 100 2011 60 9 32 0 0 100 30 49 20 1 100 54 39 7 0 100 28 62 10 0 100 44 40 15 1 100 32 49 20 0 100 28 49 23 28 47 25 0 100 100 INTERPRETATION: COMMON-SIZE BALANCE SHEET 1. Instead. mostly the percentage of fixed assets has been more compare to total asset except in the year 2006 and 2007 2. the common-size statement does not reflect exact figures for each line item. Table no 5 Common Size (in %) of Balance Sheet of Fame India Limited from 2005-2006 to 2010 . and assigns a percentage of that figure to each line item or category reflected on the document.

439 (19) 407 260 366 161 328 324 1. On an average only 35% of owners fund has seen for last 7 years. Trend percentage statement Trend percentage states several years' financial data in terms of a base year. with all other years stated in some percentage of this base.37 3. The method of calculating trend percentages involves the calculating of percentages relationship that each item bears to the same item in the base years.540 (226) 383 221 356 94 290 295 INTERPRETATION: Trend percentage is immensely helpful in making a comparative study of the financial statement for several years.2011 Base Year 2005-2006 2006 2007 2008 2009 303 32 99 120 47 188 128 140 596 (427) 162 308 117 487 267 236 863 (523) 281 225 190 257 273 257 1. The method of trend percentage is a useful analytical device for the management since by substitutes percentages for large amounts. The base year equals 100%.112 (173) 426 226 304 152 337 319 2010 Figure in % 2011 1. Table no 6 Particulars SALES PBIT FIXED ASSETS CURRENT ASSETS CURRENT LIABILITIES WORKING CAPITAL CAPITAL EMPLOYED TOTAL ASSETS 2005 100 100 100 100 100 100 100 100 Trend Percentage of Fame India Limited from 2005-2006 to 2010 . the outsider‟s fund has been more then owners fund except for the year 2006 when it was 54%. the brevity and readability are achieved .

1 . considering 2005 as base year the sale‟s has been growing tremendously at an great rate in terms of percentage 2. fix asset shown dip in year 2006 and then it picked up pace from 2007 till 2011 4. similarly current liability dipped in the 2006 and then gone up from 2007 till 2011 5.38 1. unfortunately the earnings before interest and taxes was in negative percentage from year 2007 till 2011 compared with base year of 2005 3. total assets has also seen growing from year 2005 till 2011 Year Wise (2005 – 2011) Sales Figures CHART SHOWING SALES Chart No. working capital was great compared to 2005 in the year 2006 till 2010 but it dipped in the year 2011 to only 94% 6. gross capital employed was also growing from year 2005 till 2011 7.

The only year it made good profits was the year 2007 and 2008. even as the sales figures were growing at great pace the net profitability of the fame India ltd was in negative for 3 years and was very marginal for 2 year i. The year 2008 was best in terms of net profitability.2 CHART SHOWING NET PROFIT Interpretation As seen above. .39 Year wise (2005-2011) Profit Figures: Chart No. for 2009 and 2011.e.

a gross profit margin for a company of 25% is meaningless by itself. For example. its operations and attractiveness as an investment. In context. In isolation. Financial ratio analysis groups the ratios into categories that tell us about the different facets of a company's financial state of affairs. A ratio gains utility by comparison to other data and standards. The historical trends of these ratios can be used to make inferences about a company's financial condition. expressed in percentage terms. The level and historical trends of these ratios can be used to make inferences about a company's financial condition. a financial ratio can give a financial analyst an excellent picture of a company's situation and the trends that are developing. however.40 RATIO ANALYSIS: Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. If we know that this company's competitors have profit margins of 10%. the "gross margin" is the gross profit from operations divided by the total sales or revenues of a company. Some of the categories of ratios are described below: . this would also be a favorable sign that management is implementing effective business policies and strategies. its operations and its investment attractiveness. for example has been increasing steadily for the last few years. a financial ratio is a useless piece of information. we know that it is more profitable than its industry peers which are quite favorable. CLASSIFICATION OF RATIOS: Financial ratio analysis involves the calculation and comparison of ratios which are derived from the information given in the company's financial statements. Taking our example. Financial ratios are calculated from one or more pieces of information from a company's financial statements. If we also know that the historical trend is upwards.

If the current assets of a company are more than twice the current liabilities. LIQUIDITY RATIOS: Liquidity Ratios are ratios that come off the Balance Sheet and hence measure the liquidity of the company as on a particular day i. If current liabilities exceed current assets. Net working capital ratio 1. 1. . CURRENT RATIO: An indication of a company's ability to meet short-term debt obligations. Current ratio is equal to current assets divided by current liabilities.e. the more liquid the company is. the day that the Balance Sheet was prepared. These ratios are important in measuring the ability of a company to meet both its short term and long term obligations. Current Ratio 2. the higher the ratio. Liquid Ratio 3.41 Ratios give a picture of a company's short term financial situation or solvency Turnover Ratios show how efficient a company's operations and how well it is using its assets. then the company may have problems meeting its short-term obligations. then that company is generally considered to have good short-term financial strength. Profitability Ratios : show the quantum of debt in a company's capital structure.

2011 CURRENT YEAR 2005 2006 2007 2008 2009 2010 2011 ASSETS 35 42 107.) 1 instead of 2.e.5 1.3 CURRENT LIABILITIES 16. In the year 2011 it is 1.4 1.9 78.9 60. The ratio of 2 is considered as a safe margin of solvency due to the fact that if current assets are reduced to half (i. the current ratio fluctuates from year to year above the ideal ratio of 2 from year 2005 till 2008.1 51.1 5. then also the creditors will be able to get their payments in full.3 which should be worrisome .5 1.3 5.2 CURRENT RATIO 2. But reaches below Ideal ratio from the year 2009 till 2011 which is negative consideration.6 79 91 77.9 8 19.42 CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY Table No.5 2.7 Table showing Current ratio Current Ratio of Fame India Limited from 2005-2006 to 2010 . INTERPRETATION: Here.4 61.7 32.3 An ideal solvency ratio is 2.

LIQUID RATIO: Liquid ratio is also known as „quick‟ or „Acid test „ratio.3 CURRENT RATIO OF Fame India Ltd FOR THE PERIOD OF 2005-2011 Ideal current ration should be 2 and above 2. The ideal liquid ratio accepted „norm‟ for liquid ratio „1‟. Quick Ratio = Total Quick Assets/ Total Current Liabilities Quick Assets = Total Current Assets (minus) Inventory . Liquid assets refer to assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses are considered as quick assets.43 Chart No.

44 Table No.7 78. And this shows that the all the .7 2.3 3.3 76. the quick ratio is more conservative because it does not include inventories which can sometimes be difficult to liquidate.5 1. Although the quick ratio gives investors a better picture of a company‟s ability to meet current obligations the current ratio. the quick ratio is very helpful because it reveals a company‟s ability to pay off under the worst possible condition. Compared with the current ratio.3 Quick RATIO INTREPRETATION: Quick ratios are often explained as measures of a company‟s ability to pay their current debt liabilities without relying on the sale of inventory. If inventories do not sell and the company has to meet its current obligations.5 1.3 78.5 5. investors should be aware that the quick ratio does not apply to the handful of companies where inventory is almost immediately convertible into cash The liquid ratio denotes the concern had achieved more than the ideal ratio of 1:1 in the years 2005 till 2011.1 5.6 CURRENT LIABILITIES 11.8 Table showing Quick ratio Quick Ration of Fame India Limited from 2005 to 2011 Quick Ratio = Total Quick Assets/ Total Current Liabilities Quick Assets = Total Current Assets (minus) Inventory Table showing Quick ratio Liquid YEAR 2005 2006 2007 2008 2009 2010 2011 ASSETS 34.4 90.2 7.3 which is still well off. But in the year 2011 it is 1.5 50.6 61 59. For lenders.6 19 31.5 1.8 42 107.

Chart No.X 100 Capital employed . It indicates the percentage of return on the total capital employed in the business.45 current asset inventory vendors or supplier will be paid off since the companies quick ratio is favorable.4 LIQUID RATIO OF Fame India Ltd FOR THE PERIOD OF 2001-2007 Ideal quick ratio should be 1:1 RETURN ON INVESTMENT: It is also called as “Return on Capital Employed”. Operating profit RETURN ON INVESTMENT ------------------------------.

1 INTERPRETATION: Here the Return on Investment of the firm is moving in a row as -4. But the year 2007.0.3) 2006 (1. In Crores 2005 (3.2 0.4) 107 (1. 8.2.2.9 Table showing Return on Investment Table showing Return on Investment OPERATING PROFIT CAPTITAL EMPLOYED (Rs.2 3.0) 194 212 263 267 244 7.21 5. 0. 7. the return on investment is negative.2 8. In Crores) RETURN ON INVESTMENT (In %) YEAR (Rs. 2. because the profit before interest and tax is also in negative due to not sufficient sales value in the corresponding year. 2008 shows a good rate return and the 2009 and 2011 show marginal rate of return whereas year 2010 shows low rate of return. -1.44 76 (4.1 2. In 2005 and 2006.07) 2007 2008 2009 2010 2011 14.64 7.1. .46 The term „operating profit „ means „profit before interest and tax‟ and the term „ capital employed „ means fixed asset + investment + current assets Table No.2 and 3.1 during the period 2001 to 2007.05 17.4.69 0.

1. The comparative statement shows that the sales of the year 2011 are very high compared to the past. This chapter attempts to highlight the findings of the study.47 Chart No.5 RETURN ON INVESTMENT OF Fame India Ltd FOR THE PERIOD OF 2005-2011 FINDINGS This study is carried out with the objective of analyzing the financial performance of FAME INDIA LTD to examine and understand the role of finance in the growth of the company. .

The return on investment chart of the company fluctuates greatly. PAT all shows the initials 2 year negative and then next 3 year positive and again downwards trend during the period under review. 4. The ideal current ratio is 2 which the firm obtains till the year 2008. 6. The downward trend started in year 2008 – 09 may be due to depression and it only shows some sign of recovery from the year 2011 . Return on Investment fluctuates more highly and unstable due to the charges in the operating profit of the company. which enables the company to meet the emergency requirements. EBIT. 5. It made a unfavorable impact towards the company. Net Profit chart shows inconsistent trend. It was in negative for the year 2005 and 2006 and it became healthy in the year 2007 and 2008 and in year 2009 dipped to downwards. 3. PBT. It depicts that the company is not working with more efficiency and consistency. It depicts that the efficiency is not maintained in operating expenses.48 2. 8. 9. but after that in the year 2009. The ideal liquid ratio is 1 was never an issue. The interest and finance charges in the year 2011 are almost 26% up compared to year 2005. The sales. The non repayment of loan funds which increases the interest charges as an impact on reduce profits before tax and over all PAT even when sales from year to year is increasing . in 2010 it again gone down considerable only to recover by 3% in 2011. 2010 and 2011 it shows less than 2 with negative impact. 7. 10. The profit before interest and tax is in negative during the period of study excluding the year 2005 and 2006 because of not sufficient sales value in the corresponding year.

5. Fame lindia Ltd will have to timely . 4. The company may reduce the operating inefficiencies through effective utilization of all the resources. 2. The company may increase the revenue further if it attempts to move very rapidly and open up more screen quick as compared to its competitors.49 RECOMMENDATION AND SUGGESTIONS 1. 6. FAME INDIA LTD continues to play an important role in the entertainment industry of country. Without effective financial management a company cannot survive in this competitive world. films distribution and films making business for Fame lindia Ltd seems to be great in terms of their top line ( revenue) but there are constant huge associated cost to upgrade their facility for customer service experience and the same time to dominate the movie screening market. so that the interest on finance charges will be less. The company may increase the performance by reducing the borrowed capital. Optimum utilization of Working Capital can be planned so as to result in sound financial position. A Prudent financial Manager has to measure the working capital policy followed by the company. 3. CONCLUSION Finance is the life blood of every business. The company may strike a balance between the current assets and current liabilities to maintain the solvency position. There is every possibility that FAME INDIA LTD would establish for itself a permanent and unshakable position as a great film viewing entertainer in India provided it grows fast Finally – films screening. There is an urgent need to repay back loan funds to reduce interest charges and have strong check on expenses to improve the net profitability of FAME INDIA LTD.

Also . .50 increase their presence in exsisting metro‟s and well as in up coming B town cities.Management should timely check on their profits making trends since it will some where affect their share value on stock exchange.