TIDMPKP
RNS Number : 9777L
Photon Kathaas Productions Ltd
09 August 2011
Photon Kathaas Productions
Interim results
Chennai, 9 August 2011. Photon Kathaas Productions Ltd. (AIM:
PKP, "Photon Kathaas", "the Company") the South Indian film company
has published its results for the six months ended 30 June
2011.
Highlights
-- Two productions completed: Nadunisi Naaygal" and "Veppam"
-- Shooting of the Hindi remake of Vinnai Thandi Varuvaaya,
directed by Gautham Vasudev Menon with music by A.R.Rahman
completed
o Co-production with Fox Star Studios, a Twentieth Century Fox
and Satellite Television Asia Region (STAR) JV
o Expected to be released in the second half of 2011
-- Since the period end contract agreed with R.S.Infotainment
and Sai Sarvanthi Movies to co-produce a Tamil/Telugu bilingual
film with an estimated budget of $5m
-- Revenue $1.4m
-- Gross profit $0.57m
-- Profit before tax $38,071
Michael Rosenberg comments:
"In our first full trading year, the results at this stage
reflect the early stage nature of the business. With revenues
generated from two productions we have already reported a maiden
profit.
"We are confident that in the second half, we will see a notable
increase in revenues and profitability. In addition to productions
underway or recently completed, we have a good pipeline of new
projects under discussion for development in the next financial
year."
Enquiries
Photon Kathaas
Michael Rosenberg + 44 (0)20 7938 4026
Venkat Somasundaram, Chief Executive +65 6224 4991
Reshma Ghatala, Head of Marketing +91 44 2820 2988
Seymour Pierce Limited (Nomad & broker) 020 7107 8000
Nandita Sahgal/Tom Sheldon (Corporate
Finance)
Laetitia MacManus (Corporate Broking)
Rivington Street Corporate Finance
(Broker) 020 7562 3373
Jon Levinson
Dru Edmonstone
College Hill 020 7457 2020
Adrian Duffield/Jon Davies
About Photon Kathaas Productions
Photon Kathaas Productions is the first film company
specifically created to make and distribute films of different
genres to a primarily South Indian audience, speaking the languages
of Telugu, Tamil, Kannada and Malayalam.
PKP benefits from a special creative relationship with its chief
creative officer, Gautham Vasudev Menon. Gautham is one of the
leading directors and producers in South Indian cinema. He has been
involved in nine films to date, not only as a director but also as
a screenplay writer, an executive producer and a producer. His
earlier films include: Minnale (2000), Rehna He Tera Dile Mein
(2001), Kaaka Kaaka (2003), Gharshana (2004), Vettaiyadu Vellaiyadi
(2006), Pachaikili Muthucharam (2007), Vaaranam Aayiram (2008)
Vinnaithaandi Varuvaayaa (2010), Ye Maaya Chesave (2010) and
Nadunissi Naaygal (2011).
A. R. Rahman is PKP's creative adviser. He is an Indian film
composer, record producer, musician and singer and is credited for
totally overhauling the style in which music is made in India. A.
R. Rahman has won two Academy Awards (Slumdog Millionaire), 25
Filmfare Awards, four Indian National Film Awards, a Bafta Award,
two Golden Globes and two Grammy Awards.
Operational review
During the first half of the year the management focused on
ensuring that the business developed as planned. With the initial
capital raised in November 2010, the Company has produced two films
with gross profit margins in excess of 35% achieved.
The shooting of the Hindi remake of Vinnai Thandi Varuvaaya,
directed by Gautham Vasudev Menon with music by A.R.Rahman has been
completed. The movie is a co-production with Fox Star Studios, a
joint venture between Twentieth Century Fox and Satellite
Television Asia Region (STAR), and is expected to be released in
the second half of 2011.
In July, PKP finalised three further production agreements:
-- The theatrical rights for the small budget Tamil movie,
"Thanga Meengal", have been sold before release. Photon Kathaas is
the sole producer of the film, which is due for release during the
second half of 2011.
-- The Company finalised a contract with R.S.Infotainment and
Sai Sarvanthi Movies to co-produce a Tamil/Telugu bilingual film
with an estimated budget of $5m. The film will be directed by
Gautham Vasudev Menon and will commence shooting from August 2011
for release in 2012.
-- Photon Kathaas has finalised a contract with a leading
production house to produce a large budget Tamil film, directed by
Gautham Vasudev Menon featuring a leading film star of the South
Indian film industry. Further details of this production will be
announced later in the year.
The film is expected to commence shooting during the first
quarter of 2012 and made at an estimated budget of $10m. The movie
will be funded by the production house with Photon Kathaas managing
the production and receiving a production fee. The Company will
receive 20% of the profits.
Financial review
Revenues of $1,410,679 were generated from the exploitation of
rights in two films. As this is the first full year of trading
since the IPO in November 2010, there are no meaningful comparisons
to be made with the previous year.
A gross margin of $573,388 of approximately 41% was
achieved.
By keeping a very tight control on costs, Photon Kathaas
reported profits before tax of $38,071. Earnings per share are
0.154 cents.
Net assets were $1,093,328.
Cash as at 30 June 2011 was $161,366 but trade receivables as at
that date were $945,328. During July a good proportion of those
receivables were collected. There was a net current asset surplus
over current liabilities of approximately $1.04m as at the
accounting date. Inventory, which is the value of work in progress
of 3 movies, amounted to US$ 1,346,454 (VTV - Hindi (US$
1,026,372), Thanga meengal (US$ 264,030) and bilingual (US$
56,052))
Current trading and outlook
The second half of the current financial year is expected to see
notable increases in revenues and profits from the release of the
ongoing productions, including a sole small budget production and
the co-production with Fox Star Studios.
The profile of PKP as a listed company with a proven high
quality management and creative team has already begun to attract
many potential new projects. On the back of the recently signed
agreements and other new projects currently under discussion,
Photon Kathaas has a strong production pipeline which should ensure
continued good progress during the second half of 2011 and a good
start to 2012 in line with the Board's expectations.
Venkat Somasundaram
Chief Executive
Consolidated statement of financial position
As at 30 June 2011
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
Notes 2011 2010 2010
US $ US $ US $
ASSETS
Non-current assets
Property, plant and
equipment 3,535 - 2,608
Intangible assets 10,827 13,229 11,655
Other non-current assets 37,894 2,550 22,897
------------ ------------ -------------
Total non-current assets 52,256 15,779 37,160
------------ ------------ -------------
Current assets
Trade receivables 945,238 10,936 38,512
Other current assets 136,678 25,194 16,350
Inventories 1,346,454 10,439 473,948
Cash and cash equivalents 161,336 30,737 1,116,254
------------ ------------ -------------
Total current assets 2,589,706 77,306 1,645,064
Total Assets 2,641,962 93,085 1,682,224
============ ============ =============
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 2 1,402,016 10,989 1,345,306
Retained earnings (273,700) (124,001) (306,657)
Foreign exchange reserve (45,763) (530) (39,419)
Other reserves 10,775 - 2,632
Total Shareholders'
equity 1,093,328 (113,542) 1,001,862
------------ ------------ -------------
LIABILITIES
Non-current liabilities
Deferred tax liability 3 5,340 - 226
------------ ------------ -------------
5,340 - 226
Current liabilities
Trade and other payables 1,543,294 206,627 680,136
------------ ------------ -------------
1,543,294 206,627 680,136
Total Liabilities 1,548,634 206,627 680,362
Total Equity and
Liabilities 2,641,962 93,085 1,682,224
============ ============ =============
Consolidated statement of comprehensive income
For the six month period ended 30 June 2011
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Notes 2011 2010 2010
US $ US $ US $
CONTINUING OPERATIONS
Revenue 1,410,679 100,000 200,176
Cost of sales (837,291) (95,000) (166,670)
Gross profit 573,388 5,000 33,506
Distribution costs (148,656) - -
Administrative expenses (386,661) (127,020) (337,956)
Profit / (loss) before
tax 38,071 (122,020) (304,450)
Income tax expense 3 (5,114) - (226)
------------ ------------ -------------
Profit / (loss) for the
period attributable to
the owners of the parent 32,957 (122,020) (304,676)
Other comprehensive income
Foreign exchange
translation differences (6,344) (530) (39,419)
Total comprehensive profit
/ (loss) for the period
attributable to the
owners of the parent 26,613 (122,550) (344,095)
============ ============ =============
Earnings / (loss) per
share
(a) Basic 4 0.002 (0.030) (0.031)
(b) Diluted 4 0.002 (0.030) (0.031)
============ ============ =============
Consolidated statement of cashflows
For the six month period ended 30 June 2011
(Unaudited) (Audited)
Six months (Unaudited) Year
ended Six months ended
30 June ended 31 December
Notes 2011 30 June 2010 2010
US $ US $ US $
Net cash (used) /
generated in operating
activities 5 (1,022,856) 33,507 (200,159)
------------ -------------- -------------
Cash flow from investing
activities
Purchase of intangible
assets - (13,229) (13,310)
Purchase of property,
plant and equipment (1,649) - (2,683)
------------ -------------- -------------
Net cash used in
investing activities (1,649) (13,229) (15,993)
Cash flow from financing
activities
Proceeds from issue of
capital 56,710 10,889 2,414,509
Share issue expenses - - (1,069,303)
Net proceeds from
financing activities 56,710 10,889 1,345,206
Net change in cash and
cash equivalents (967,795) 31,167 1,129,054
Cash and cash
equivalents at the
beginning of the
period 1,116,254 100 100
Effect of foreign
exchange rate changes 12,877 (530) (12,900)
------------ -------------- -------------
Cash and cash
equivalents at the end
of the period 161,336 30,737 1,116,254
============ ============== =============
Notes to the consolidated financial statements
For the six month period ended 30 June 2011
1. Profile and basis of preparation
Photon Kathaas Productions Limited ("PKP" or "the Company") is a
Singapore registered company. The Company's registered office is
situated at 31 Cantonment Road, Singapore 089747.
The principal activities of the Company and its subsidiaries
(the "Group") are those relating to the business of production and
co-production of films primarily targeted at the South Indian
audience of varying genre, language and budget.
The interim financial information for the period ended 30 June
2011 and comparative numbers have been prepared using accounting
policies as are applied in the Company's annual financial
statements and in accordance with International Financial Reporting
Standards (IFRS).
The consolidated interim financial statements have been prepared
on the historical cost basis and going concern basis of accounting
which assumes adequate financial resources are available to the
Group for the period of twelve months from the date of issue of
these interim financial statements. The Directors have prepared
forecasts and projections which show that the Group will be able to
operate within the existing cash available and generated through
the future release of movies.
The financial information set out herein is based on the
transactions of the Group, which consists of the Company and its
subsidiaries: Photon Kathaas International Productions Limited,
Singapore and Photon Kathaas Production Private Limited, India. The
transactions and balances between the entities have been eliminated
in the preparation of the consolidated interim financial
statement.
The consolidated interim financial statements of the Group for
the six months to 30 June 2011 and comparative numbers, unless
indicated, are unaudited and do not comprise Group's statutory
accounts within the provision of the Singapore Companies Act,
Chapter 50.
The numbers pertaining to 31 December 2010 were audited and the
accounts approved by the shareholders on June 27, 2011.
2. Share capital
PKP which is incorporated in Singapore is not required to have
authorised share capital under the national jurisdiction. There is
also no concept of a par value for the shares. For all matters
submitted to vote in the shareholders meeting, every holder of the
equity shares, as reflected in the records of the company on the
date of the shareholders meeting has one vote in respect of each
share held. All shares are equally eligible to receive dividends
and the repayment of capital in the event of liquidation of
companies.
Issued, paid up and allotted share capital:
Issued, allotted and fully paid Number of shares US $
Subscribers shares 10,000 100
Allotment of shares on 26 April
2010 1,088,900 10,889
------------------------------------- ----------------- ----------
As at 30 June 2010 1,098,900 10,989
Allotment of shares on 17 September
2010 401,800 4,018
Allotment of shares on 17 September
2010 139,409 1,394
1,640,109 16,401
------------------------------------- ----------------- ----------
Split ratio of 10:1 on 17 September
2010 16,401,090 16,401
Allotment of shares on 4 November
2010 4,894,301 2,398,208
------------------------------------- ----------------- ----------
As at 31 December 2010 21,295,391 2,414,609
Allotment of shares on 17 February
2011 68,071 33,354
Allotment of shares on 16 June
2011 47,665 23,356
------------------------------------- ----------------- ----------
As at 30 June 2011 21,411,127 2,471,319
===================================== ================= ==========
3. Income tax
The income tax expense comprises:
a. Current tax
b. Deferred tax
The current tax expense for the period is nil on account of the
carry forward of losses from the previous year.
The income tax expense for the period relates entirely to
movements in the deferred tax liability.
The deferred tax liability is on account of:
Six months Six months Year ended
ended ended 30 31 December
30 June 2011 June 2010 2010
US$ US$ US$
Liability
Difference between tax
and book written down
value of tangible assets (5,340) - (226)
Deferred Tax Liability (5,340) - (226)
============== =========== =============
The deferred tax asset not recognised is approximately US$
27,000 relating to the Singapore entities and US$ 2,000 relating to
the Indian entity. The Singapore entities have an indefinite period
of carry forward benefit of the losses and the India entity has a
carry forward benefit of eight years.
Income tax is based on the tax rates applicable on Statement of
Comprehensive Income in various jurisdictions in which the Group
operates.
4. Earnings per share
(a) Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the period.
Six months Six months
ended ended 30 Year ended 31
30 June 2011 June 2010 December 2010
US$ US$ US$
Profit / (Loss) attributable
to equity holders
of the company 32,957 (122,020) (304,676)
-------------- ----------- ---------------
Weighted average number
of ordinary shares
in issue 21,349,736 4,070,575 9,907,674
============== =========== ===============
(b) Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company's
average share price for the period ended 30 June 2011 was lower
than the exercise price of stock options in issue during the
period. As a result, the stock options are not considered to be
dilutive.
Six months Six months
ended ended 30 Year ended 31
30 June 2011 June 2010 December 2010
US$ US$ US$
Profit / (Loss) attributable
to equity holders of
the company 32,957 (122,020) (304,676)
-------------- ----------- ---------------
Weighted average number
of ordinary shares in
issue 21,349,736 4,070,575 9,907,674
============== =========== ===============
5. Cash generated from / (used in) operations
Six months Six months Year ended
ended ended 30 31 December
30 June 2011 June 2010 2010
US $ US $ US $
-------------- ----------- -------------
Operating profit / (loss)
before tax 38,071 (122,020) (304,450)
-------------- ----------- -------------
Foreign exchange gain - - (20,673)
Depreciation of property,
plant and equipment 722 - 75
Amortisation of intangible
assets 828 - 1,655
Share based payment expense 8,143 - 2,632
Increase in receivables (904,112) (10,936) (39,870)
Increase in inventory (891,028) (10,439) (501,160)
Increase in trade and
other payables 859,845 204,646 702,450
Increase in other current
assets (120,328) (25,194) (16,350)
Increase in other non-current
assets (14,997) (2,550) (24,468)
Cash (used in) / generated
from operations (1,022,856) 33,507 (200,159)
============== =========== =============
6. Segment information
Management has determined the operating segments based on the
reports reviewed by the board of directors that is charged with the
strategic decision-making process for the Group.
The board of directors considers the business to be made up of
only one segment, being revenues from films and film production and
therefore business segmental reporting is not considered
necessary.
In addition to this, the board also considers segmental
information from a geographic perspective. Geographically,
management considers the performance of the business by reviewing
its performance in India and Rest of the World ('RoW').
The segment information based on geography as of and for the
period ended 30 June 2011 is as follows:
India RoW Total
US$ US$ US$
Revenue 1,376,489 34,190 1,410,679
Direct expenses (815,397) (21,894) (837,291)
---------- ---------- ----------
Gross profit 561,092 12,296 573,388
Indirect expenses (357,318) (177,999) (535,317)
----------
Profit / (loss) before
tax 203,774 (165,703) 38,071
Income tax expense (5,114) - (5,114)
---------- ---------- ----------
Profit / (loss) for the
period 198,660 (165,703) 32,957
Other comprehensive expense (6,344) - (6,344)
---------- ---------- ----------
Total comprehensive profit
/ (loss) 192,316 (165,703) 26,613
========== ========== ==========
India ROW Total
US$ US$ US$
Cash and cash equivalents 73,996 87,340 161,336
Non-current assets 4,362 47,894 52,256
Current assets 2,323,684 104,686 2,428,370
---------- ---------- ------------
2,402,042 239,920 2,641,962
Trade and other payables (975,528) (567,766) (1,543,294)
Deferred tax liability (5,340) - (5,340)
---------- ---------- ------------
1,421,174 (327,846) 1,093,328
========== ========== ============
The segment information based on geography as of and for the
period ended 30 June 2010 is as follows:
India RoW Total
US$ US$ US$
Revenue - 100,000 100,000
Direct expenses - (95,000) (95,000)
--------- ---------- ----------
Gross profit - 5,000 5,000
Indirect expenses (19,565) (107,455) (127,020)
---------
Loss before tax (19,565) (102,465) (122,020)
Income tax expense - - -
--------- ---------- ----------
Loss for the period (19,565) (102,465) (122,020)
Other comprehensive expense (530) - (530)
--------- ---------- ----------
Total comprehensive loss (20,095) (102,455) (122,550)
========= ========== ==========
India RoW Total
US$ US$ US$
Cash and cash equivalents 678 30,059 30,737
Non-current assets 3,229 12,550 15,779
Current assets 29,320 17,249 46,569
--------- ---------- ----------
33,227 59,858 93,085
Trade and other payables (31,268) (175,359) (206,627)
Deferred tax liability - - -
--------- ---------- ----------
1,959 (115,501) (113,542)
========= ========== ==========
The segment information based on geography as of and for the
year ended 31 December 2010 is as follows:
India RoW Total
US$ US$ US$
Revenue 100,176 100,000 200,176
Direct expenses (71,670) (95,000) (166,670)
---------- ---------- ----------
Gross profit 28,506 5,000 33,506
Indirect expenses (235,455) (102,501) (337,956)
----------
Loss before tax (206,949 (97,501) (304,450)
Income tax expense (226) - (226)
---------- ---------- ----------
Loss for the period (207,175) (97,501) (304,676)
Other comprehensive income
expense (39,419) - (39,419)
---------- ---------- ----------
Total comprehensive loss (246,594) (97,501) (344,095)
========== ========== ==========
India RoW Total
US$ US$ US$
Cash and cash equivalents 314,366 801,888 1,116,254
Non-current assets 4,263 32,897 37,160
Current assets 510,576 18,234 528,810
--------- ---------- ----------
829,205 853,019 1,682,224
Trade and other payables (88,045) (592,091) (680,136)
Deferred tax liability (226) - (226)
--------- ---------- ----------
740,934 260,928 1,001,862
========= ========== ==========
This information is provided by RNS
The company news service from the London Stock Exchange
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