The Company is one of the largest Exhibition theatre chains in India and having business of exhibition of films. "Cinemax" brand is one of the most recognisable film exhibition brands and stands for superlative and innovative entertainment for families and social cohorts. The exhibition chain is a combination of high-end multiplexes and provides customer satisfaction through process enhancements and constant innovation in the services and facilities such as high comfort recliner seating arrangements in 'The Red Lounge', massage chairs, etc.

The Company is also engaged in gaming business which is currently operational under two brand names "Giggles- The Gaming Zone" and "VERSUS". The ambience has been exclusively designed with interiors and colors that enhance the overall gaming experience.

1. Basis of preparation of financial statements

The financial statements which have been prepared under the historical cost convention on the accrual basis of accounting, are in accordance with the applicable requirements of the Companies Act, 1956 (the 'Act') and comply in all material aspects with the Accounting Standards prescribed by the Central Government, in accordance with the Companies (Accounting Standards) Rules, 2006, to the extent applicable.

2. Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent liabilities. The estimates and assumptions used in accompanying financial statements are based upon managements' evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods.

3. Disclosures pursuant to Accounting Standard 15 (AS -15) "Employee Benefits"

i. The Company has a defined benefit gratuity plan. Every employee gets a gratuity on leaving the Company after the completion of five years, at fifteen days of last drawn salary for each completed year of service.

The following table set out the status of the gratuity plan as required under Accounting Standard (AS) - 15 - Employee benefits and the reconciliation of opening and closing balances of the present value of the defined benefit obligation.

4. Segment reporting:

Primary segment information:

As the Companys' business activity falls within a single primary business segment i.e., Film exhibition, the disclosure requirements of AS-17 "Segment Reporting", to the extent it relates to disclosure of primary segment information is not applicable.

Secondary segment information:

The entire operations of the Company are within India and therefore the secondary segment reporting based on geographical location of its customers is also not applicable to the Company.

5. Earnings/(Losses) per share (EPS):

The basic earnings/ (losses) per equity share is computed by dividing the net profit/(loss) attributable to the equity shareholders for the year/period by the weighted average number of equity shares outstanding during the reporting year. The number of shares used in computing diluted earnings/(losses) per share comprises the weighted average number of shares considered for deriving basic earnings/(losses) per share and also the weighted average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti dilutive. The earnings/ (losses) per share is calculated as under:

6. Bank Borrowings:

A. Term Loans, Working Capital Loans and Non Fund Based Credit Facilities taken from Axis Bank are secured against:

i. Charge on the movable fixed assets and current assets of the Company.

ii. Debt Service Reserve Account (DSRA) equivalent to one month interest repayment to be maintained under lien with Axis Bank.

iii. Goods procured under Letter of Credit.

iv. Undertaking from Cinemax India Limited that its subsidiary will route their entire receivables through designated account with Axis Bank.

B. Vehicle Loans taken from various banks are secured against the vehicles taken on hire purchase and the personal guarantees of the erstwhile directors.

7. Contingent liability includes claim against the Company not acknowledged as debt Rs. 293.43 lacs.

8. Capital Commitments:

Estimated value of contracts remaining to be executed on capital account and not provided for, net of advances, aggregated to Rs. 169.84 lacs (Previous year Nil).

8. CIF value of import in respect of capital goods purchased during the period aggregated to Rs. 28.57 lacs (Previous year Nil).

9. Exceptional items includes the followings :

10. Based on the available information with the management, the Company does not owe any sum to a micro, small or medium enterprise as defined in Micro, Small and Medium Enterprises Development Act, 2006.

11. The Honorable High Court of Judicature at Bombay vide its order dated 9 March 2012 has sanctioned the Scheme of Demerger i.e. Composite Scheme of Arrangement between the Cineline India Limited (Formerly known as Cinemax Properties Limited) and Cinemax India Limited (Cinemax Exhibition India Limited) and their respective Shareholders and Creditors under Sections 391 to 394 read with Sections 78, 100 to 103 of the Companies Act, 1956. 1 April 2012 and 20 April 2012 are the appointed date and effective date, respectively of the scheme. Accordingly, the Honorable High Court has inter alia sanctioned the following:

a) Demerger of Exhibition of Films business:

The Scheme envisages the demerger of Theatre Exhibition business of Cineline India Limited (Formerly known as Cinemax Properties Limited) into separate entity i.e. Cinemax India Limited (Formerly known as Cinemax Exhibition India Limited) on a going concern basis in the manner provided for in the scheme.

b) Issue and Allotment of Shares of Cinemax India Limited (CIL) in the ratio of 1:1.

Each individual shareholder of Cineline India Limited (Formerly known as Cinemax Properties Limited) (CPL) {including their respective heirs, executors, administrators or other legal representatives or the successors - in - title} whose name shall appear in the Register of Members of CPL as on the Demerger Record Date i.e. 18 May 2012 shall be issued and allotted shares of CIL in the following manner:

"1 (One) fully paid Equity Share of Rs. 5 (Rupees Five) each of CIL shall be issued and allotted for every 1 (One) fully paid Equity Share of Rs. 10 (Rupees Ten) each held in CPL."

c) Reduction of the existing Equity Share Capital of CIL.

Subsequent to allotment as prescribed in Note 39 (b) above, the existing 100,000 equity shares of Rs. 5 (Rupees Five) each of the Company will be cancelled. This reduction would not involve either a diminution of liability in respect of unpaid share capital or payment of paid-up share capital or the provisions of Section 101 of the Companies Act, 1956.

d) Name change of the Company:

Pursuant to Scheme of arrangement name of "Cinemax Exhibition India Limited" changed to "Cinemax India Limited" with effect from 22 June 2012.

12. On 29 November 2012, the erstwhile promoters (Kanakia Group) had entered into a definitive sale agreement with PVR Limited (through Cine Hospitality Private Limited, its wholly owned subsidiary) for the sale of their entire stake of 69.27% in Cinemax India Limited.

13. On 8 January 2013, PVR Limited through its wholly owned subsidiary, Cine Hospitality Private Limited (the "Acquirer") have purchased controlling stake in the paid up equity share capital of the Company from the erstwhile promoters, pursuant to a block deal executed on the floor of the stock exchange.

14. Further, PVR Limited through its wholly owned subsidiary, Cine Hospitality Private Limited (the "Acquirer") has acquired the stake of 23.92 % through open offer to public having tendering period closure as on 15 February 2013, resulting total stake into 93.19 % in Cinemax India Limited.

15. The Current Assets, Loans and Advances are stated at the value, which in the opinion of the management, are realisable in the ordinary course of the business. Current liabilities and provisions are stated at the value payable in the ordinary course of the business.

16. Balances of Trade Receivables, Trade Payables, Advances from Customers and Advances to Suppliers/Vendors are subject to confirmation/reconciliation and subsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material.

17. Previous period comparatives:

Figures for the previous period have been regrouped wherever considered necessary to confirm with the current year's presentation.

The Theatre Exhibition Business of Cineline India Limited (Formerly known as Cinemax Properties Limited) has been demerged with effect from 1 April 2012 to a separate entity viz. Cinemax Exhibition India Limited (presently known as Cinemax India Limited) in the manner provided for in the scheme sanctioned by the Honorable High Court of Judicature at Bombay vide its order dated 9 March 2012. Hence the figures for the previous period cannot be effectively compared with the figures for the year ended 31 March 2013.