SHREE ASHTAVINAYAK CINE VISION LTD. Management Presentation Table of Contents Investment Highlights - Company Overview - Industry Overview - Investment Highlights SHREE ASHTAVINAYAK CINE VISION LTD. Investment Highlights Indian Film Industry expected to.
Download ReportTranscript SHREE ASHTAVINAYAK CINE VISION LTD. Management Presentation Table of Contents Investment Highlights - Company Overview - Industry Overview - Investment Highlights SHREE ASHTAVINAYAK CINE VISION LTD. Investment Highlights Indian Film Industry expected to.
Slide 1
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 2
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 3
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 4
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 5
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 6
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 7
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 8
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 9
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 10
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 11
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 12
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 13
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 14
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 15
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 16
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 17
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 18
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 19
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 20
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 21
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 22
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 23
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 2
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 3
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 4
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 5
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 6
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 7
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 8
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 9
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 10
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 11
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 12
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 13
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 14
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 15
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 16
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 17
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 18
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 19
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 20
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 21
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 22
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.
Slide 23
SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
Table of Contents
Investment Highlights
-
2
Company Overview
-
4
Industry Overview
-
15
1
Investment Highlights
SHREE ASHTAVINAYAK
CINE VISION LTD.
2
Investment Highlights
Indian Film Industry expected to grow at CAGR of 20% for the next 3 years to US$3.8
billion in 2010*
Change in demographic profile of India
Increased spending on entertainment
Multiplexes expected to grow from 328 screens in 2005 to 1,000+ by 2008*
Company is one of the prominent film distributors in Mumbai
Integrated presence across the value chain gives the Company a de-risked operating
model
Strong track record in the production and distribution business – proven execution
skills and understanding of the market
Strong pipeline of releases in FY’08 and FY’09
*Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
3
Company Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
4
SACVL Corporate Overview
Incorporated in Mumbai on 23rd October 2001
Film Production
Film production is considered as the key source of revenues
Built capabilities for cost effective film production
Produced hit movies such as, Jab We Met, Bhagam Bhag, “Golmaal-Fun Unlimited” , “Maine Pyaar Kyun Kiya”
10 movies intended to be produced in FY’08 and FY’09
Film Distribution
Distributed 31 movies over past three years
Distribution extends chain of integration & strengthens margins
Creates presence and increases visibility in the market
Prominent distributor in the Mumbai territory, recently entered the Delhi territory
Successfully distributed blockbusters such as OM Shanti OM, Phir Hera Pheri, Partner, Heyy Babyy, Dus
Film Exhibition
Completed the integration of the business model by entering into exhibition of films thus covering the entire value chain
Leased approximately 35 theaters in Mumbai and currently enjoys monopoly in Goa
De-risked business model – SACVL pre-sells distribution rights for all territories except Mumbai prior to release
Recovers costs through pre-sale of rights such as, distribution, music, video, overseas etc
Revenues generated from the Mumbai territory go directly to the bottom-line
5
Value Chain
Production
Average operating margin of 25%
Segment is the key source of
revenues
Corporate structure helps in
procuring institutional funding and
insurance facility
Distribution
Good relation with production
houses ensures continuous
availability of quality films
Distributing films from other
banners, provides critical market
knowledge besides revenues
Exhibition
Forayed into exhibition to gain
control of the retail end
Provides deeper understanding of
the audience preferences, aiding
future productions
Helps diversify revenue streams
Combined Leverage
Positions the Company higher on the learning curve
Increased knowledge of the market
Presence gives it a competitive advantage over other production houses
Stronger bargaining power with the producers and exhibitors
Strong and continuous presence in the market
6
Management Team
Mr. Dhilin Mehta
Chairman & Managing
Director
Mr. H. K. Mehta
Joint Managing Director
An M.B.A with a finance
specialization, he is the
promoter of Shree
Ashtavinayak
Dhilin began his career
with small budget films
like Fun2ssh and
Agnipankh
Presently he is working
with renowned actors and
technicians on the
forthcoming ventures of
the Company
A Commerce Graduate,
he is in-charge of the
Finance & Administration
activities of the Company
He co-ordinates with the
department of Shree
Ashtavinayak for its
funding requirements
Responsible for putting
the Company’s financial
resources into the best
investment avenues to
generate better returns
Mr. Dhaval Jatania
Director – Business
Development
A Management Graduate
(MBA), specialized in
Marketing
Looks after Business
Development and is
involved with production
and distribution divisions
of the Company
Responsible for drawing
up the strategic roadmap
of the production
department, being the
interface between the
Company and the
directors, actors, scriptwriters and others
Mr. Hiren Gandhi
Director – Production
Mr. Rupen Amlani
Director – Distribution
and Marketing
A Computer Engineer,
specialized in Networking
A Management Graduate
specialized in Marketing
Looks after the
Production Division and
particularly focuses on
the budgeting aspect
Involved in the acquisition
of distribution rights for
films produced by other
production houses
Responsible for the
finalization of the scripts,
directors, cast and
locations
Has been involved in all
three in-house
productions of the
Company
Decides the media
strategy using the various
channels for publicity for
successful commercial
exploitation of the movies
7
Popular Stars Signed By The Company
Some directors working with the company
Hera Pheri
Garam Masala
Hungama
Dhoom 2
Dhoom
Maine Pyar Kyun Kiya?
Mujhse Shaadi Karogi
Coolie No. 1
Haseena Maan Jaayegi
Biwi No. 1
Hero No. 1
No entry
Pyar To Hona Hi Tha
Deewangee
Rohit Shetty
Golmaal
Zameen
Abbas - Mastan
Aitraaz
Baazigar
Humraaz
Khiladi
Soldier
Priyadarshan
Salman Khan
Ajay Devgan
Sanjay Dutt
Sanjay Gadhvi
David Dhawan
Aneez Bazmee
Akshay Kumar
Sushmita Sen
Bipasha Basu
Lara Dutta
Govinda
Kareena Kapoor
8
Business Model
Focus: High entertainment value
and mainstream Hindi films
Target audience:- All segments
Repertoire: - Family entertainers,
thrillers, comedy and romantic
films
Movies With Mass Appeal
De-risked model
5 Parameter Test
Production
Distribution
Movies With Mass
Appeal
Production
Distribution
Active Risk
Diversification
Production
Distribution
9
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
Star cast:- Bankability and market value of the star
Banner/Producer:- Adequate financial resources to complete the movie on time
Script/Director:- Strength of the script and track record of the director
Music director: - Track record of the music director
Marketing capability of the producer
10
De-Risked Model
De-Risked Model
5 Parameter Test
Production
Distribution
Movies With Mass Appeal
Production
Distribution
Active Risk Diversification
Production
Distribution
The recipe of entertainment:
Script
Screenplay
Stars
Salability
11
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Multiple
stream of
revenues
+
Focus
on cost
+
Bankable
stars/directors
+
Distribution
Cluster
bombing
12
De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)*
Cost of Production
Recovered through pre-sale
Production
Mumbai
Territory
Box Office
25-35%
Box Office
from other
territories
25-35%
Profits
Pre-sells all the territories (except
Mumbai) and other rights of the
movie before the release
Recovers all costs related to movie
In-Cinema
Ads 2.5%
Video
Rights 8%
Music
Rights 7%
Distribution
Overseas
Theatrical
Rights 5%
Satellite/
Cable Rights
18%
Revenues generated from Mumbai
territory go directly to the bottomline
Company recovers all the money
invested in the project even before
the movie is released
*Source: Company business model
13
De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Reverse calculation of revenues
No of screens that movie can be screened on X
Percentage occupancy X
Per ticket cost X
First 3 days revenues = Total revenues
Total revenues /1.2 = price of movie rights
Focus
on cost
+
Distribution
cluster
bombing
Discounted higher if bought at an earlier stage
The exposure of movie would be maximum in the
first week for revenue maximization
14
Industry Overview
SHREE ASHTAVINAYAK
CINE VISION LTD.
15
India Entertainment Industry
Indian Entertainment Industry 2007
Media and entertainment industry is valued at USD 7.8 billion and is
expected to grow at 19%
2.0%
2.5%
0.3%
Television
Music
By 2010, the entertainment industry is expected to reach USD
18.6 billion
31.0%
42.0%
Films
Radio
Print Media
Indian Film industry is valued at USD 1.8 billion which is expected to
double by 2010
Live Entertainment
Contributes ~20% share of the entertainment industry
19.4%
Largest film industry in the world in terms of number of movies
produced
Multiplexes are expected to grow from 328 screens in 2005 to
over 1,000 screens by 2008
Digitization of movies and increase in the number of screens has
enhanced the movie going experience
Internet Advertising
2.0%
Indian Film Industry
5000
3,825
4000
USD million
Country has about has 12,000, single screen theaters
Outdoor Advertising
0.8%
3000
2000
1,413
1,700
1,975
2,425
2,825
3,300
1000
0
2004
2005E
2006F
2007F
2008F
2009F
2010F
Source: PWC “The Indian entertainment and media industry, the growth story unfolds”, 2007
16
India Entertainment Industry
Government initiatives have given a boost to the Film industry
Industry status granted in 2001
100% FDI allowed via automatic route
Industry Financing
Prior to receiving industry status
– Difficult to acquire finance
– Finances generally came from unorganized sector, which involved high costs
– Directors pre-sold the movie rights at ‘mahurat’ stage, at a huge discounts
Post receiving industry status
– Companies can go to public to raise money
– Eros International admitted to AIM in November 2006
– Banks have started financing movies
17
Some Projects in Pipeline
Detailed Capex Spend – Production Pipeline
Movie Title - Director
US $ Million
1
Untitled – Shivam Nair
3.0
2
Untitled – Rohit Shetty
5.8
3
Untitled – Anees Bazmi
6.8
5
Untitled – Anthony D'souza
4
Untitled – Priyadarshan
7.0
6
Untitled – David Dhawan
6.0
Total
10.0
$38.6
18
Track Record of Strong & Consistent Growth
Total Income (USD million)
30
24
25
US$
FY2007 Revenue Composition
20
Distribution
32%
Exhibition
0%
15
15
10
7
Production
68%
5
FY2005
FY2006
FY2007
Net Income Margin
FY2006 Revenue Composition
Exhibition
1%
20%
15.0%
12.0%
Distribution
46%
10%
Production
53%
1.0%
0%
FY2005
FY2006
FY2007
Source: Company’s Business Model, Annual Report & January 2007 IPO Prospectus
19
Selected Financial Data
For 6 months
ending 30 September
Fiscal Year ending
31 March
2005
(audited)
2006
2007
(audited) (audited)
(US$ mm)
(US$. mm)(2)
2007
(unaudited)
(US$ mm)
Total Income
6.6
15.3
24.4
10.7
7.9
EBITDA
0.2
11.3
20.2
8.8
5.9
2.1%
74.1%
82.6%
82.2%
0.1
3.1
5.5
2.1
2.7
EBIT Margin
2.0%
20.2%
22.7%
19.7%
37.7%
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0%
12.0%
15.0%
12.6%
EBITDA Margin
EBIT
(1)
(2)
2006
(unaudited)
(1)
83.1%
23.9%
Rs.40 = US $1.00
Rs 44 = US $1.00
Source: Company’s Annual Report & January 2007 IPO Prospectus
20
Capitalisation
Actual
(as at 30 September 2007)
Total Cash
Secured Loans
Unsecured Loans
Total Debt
Total Shareholders' Funds
Total Capitalization
(Rs. m)
(US$ m)
201.8
Proforma
(as at 30 September 2007)
(Rs. m)
(US$ m)
5.0
1,352.0
33.8
72.2
1.8
72.2
1.8
-
-
1,200.0
30.0
72.2
1.8
1,272.2
31.8
989.3
24.7
989.3
24.7
1,061.5
26.5
2,261.5
56.5
(1)
(1)
(1) Rs.40 = US$1.00
(2) Proforma for $30mm FCCB minus 4% offering costs
21
Thank You
SHREE ASHTAVINAYAK
CINE VISION LTD.