JefPower Template

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SHREE ASHTAVINAYAK
CINE VISION LTD.
Management Presentation
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Table of Contents
Investment Highlights -
2 Company Overview
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4 Industry Overview
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Investment Highlights
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Investment Highlights

• Indian Film Industry expected to grow at CAGR of
  20 for the next 3 years to US3.8 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 FY08 and FY09

Source PWC The Indian entertainment and media
industry, the growth story unfolds, 2007
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Company Overview
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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 FY08 and
  FY09
• 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
• 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

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Value Chain
Production
Distribution

• Average operating margin of 25
• Segment is the key source of revenues
• Corporate structure helps in procuring
  institutional funding and insurance facility

• Good relation with production houses ensures
  continuous availability of quality films
• Distributing films from other banners, provides
  critical market knowledge besides revenues

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

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Management Team
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Popular Stars Signed By The Company
Some directors working with the company

• Hera Pheri
• Garam Masala
• Hungama

Priyadarshan

• Dhoom 2
• Dhoom

Sanjay Gadhvi
Salman Khan
Ajay Devgan
Sanjay Dutt

• Maine Pyar Kyun Kiya?
• Mujhse Shaadi Karogi
• Coolie No. 1
• Haseena Maan Jaayegi
• Biwi No. 1
• Hero No. 1

David Dhawan
Aneez Bazmee

• No entry
• Pyar To Hona Hi Tha
• Deewangee

Akshay Kumar
Govinda
Bipasha Basu

• Golmaal
• Zameen

Rohit Shetty

• Aitraaz
• Baazigar
• Humraaz
• Khiladi
• Soldier

Abbas - Mastan
Sushmita Sen
Lara Dutta
Kareena Kapoor
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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
Movies With Mass Appeal
Active Risk Diversification
Production
Distribution
Production
Distribution
Production
Distribution
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De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Distribution
Production
Distribution
Production
Distribution

• Star cast- Bankabality 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

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De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Distribution
Production
Distribution

• The recipe of entertainment
• Script
• Screenplay
• Stars
• Salability

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De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Distribution
Production


Bankable stars/directors
Cluster bombing
Multiple stream of revenues
Focus on cost

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De-Risked Model
De-Risked Model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Revenue Pie (Production segment)
Production
Distribution
Mumbai Territory Box Office 25-35

• Pre-sells all the territories (except Mumbai) and
  other rights of the movie before the release
• Recovers all costs related to movie
• Revenues generated from Mumbai territory go
  directly to the bottom-line
• Company recovers all the money invested in the
  project even before the movie is released

Box Officefrom otherterritories25-35
Profits
Cost of ProductionRecovered through pre-sale
In-CinemaAds 2.5
VideoRights 8
MusicRights 7
Satellite/Cable Rights18
OverseasTheatricalRights 5
Source Company business model
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De-Risked Model
De-risked model
5 Parameter Test
Movies With Mass Appeal
Active Risk Diversification
Production
Distribution

• 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
• Discounted higher if bought at an earlier stage
• The exposure of movie would be maximum in the
  first week for revenue maximization

Focus on cost
cluster bombing
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Industry Overview
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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
• By 2010, the entertainment industry is expected
  to reach USD 18.6 billion
• Indian Film industry is valued at USD 1.8 billion
  which is expected to double by 2010
• Contributes 20 share of the entertainment
  industry
• Largest film industry in the world in terms of
  number of movies produced
• Country has about has 12,000, single screen
  theaters
• 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

Indian Film Industry
Source PWC The Indian entertainment and media
industry, the growth story unfolds, 2007
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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 mhoorat
  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

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Some Projects in Pipeline
Detailed Capex Spend Production Pipeline
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Track Record of Strong Consistent Growth
Total Income (USD million)
FY2007 Revenue Composition
200507 CAGR 91
Net Income Margin
FY2006 Revenue Composition
Source Companys Business Model, Annual Report
January 2007 IPO Prospectus
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Selected Financial Data
For 6 months ending 30 September
Fiscal Year ending 31 March
(US. mm)(2)
(US mm) (1)
(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
EBITDA Margin
2.1
74.1
82.6
82.2
83.1
EBIT
0.1
3.1
5.5
2.1
2.7
37.7
EBIT Margin
2.0
20.2
22.7
19.7
Net Income
0.1
1.9
3.5
1.3
1.7
Net Margin
1.0
12.0
15.0
12.6
23.9

• Rs.40 US 1.00
• Rs 44 US 1.00

Source Companys Annual Report January 2007
IPO Prospectus
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Capitalisation
Actual (as at 30 September 2007)
Proforma (as at 30 September 2007)
(Rs. m)
(US m) (1)
(Rs. m)
(US m) (1)
Total Cash
201.8
5.0
1,352.0
33.8
Secured Loans
72.2
1.8
72.2
1.8
Unsecured Loans
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1,200.0
30.0
Total Debt
72.2
1.8
1,272.2
31.8
Total Shareholders' Funds
989.3
24.7
989.3
24.7
Total Capitalization
1,061.5
26.5
2,261.5
56.5

• Rs.40 US1.00
• Proforma for 30mm FCCB minus 4 offering costs

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Thank You