Over the past few decades, very rarely has the movie production business experienced such a tumultuous rise & fall as in the past two years. , Last year saw soaring costs largely due to the entry of large corporates. Today, the movie business is showing heavy losses and according to the 2009 FICCI Media report, is expected to grow at only 1% over the next year. This is due to - general economic meltdown, heavy prices paid by producers to talent and low margins owing to the same.

The industry has realized its mistake, undergone a reality check and a correction. Mukta Arts Ltd, inspite of strong fundamentals and consistent performance, has also been affected by these economic conditions. In addition, the strike lasting from March – May 2009 has affected the business, margins & profitability of our films. As soon as the strike ended, we released ‘Paying Guests’, a film of the comedy genre, directed by Paritosh Painter.

In last three years financial years of 2006-07, 2007-08 & 2008-09, Mukta Arts has been able to pay-out dividend in the range of 20% to 40%. At present, we have four movies ready for release and three new projects in the pipeline to be launched later this year including movies to be directed by Abbas-Mastan, Subhash Ghai and newcomer, Vishnu Shyamaprasad. Mukta Arts is proud to have nine active film distribution offices across India while controlling most of North India in the distribution business.

Looking into the shift of the business dynamics, we took a prudent business decision to withdraw exhibition services to multiplexes where our investments were in excess of our profits last year, We continue to run this business, albeit at 40% of the volume as it was last year.

Today, Mukta Arts firmly moves forward in expansion mode and takes on new challenges. We have unique growth plans unfolding with a model of setting up training centers in various parts of our country and the world in the field of film, Television, Animation and ancillary media arts.

Whistling Woods International was launched in 2006 with 80 students. Today, it hosts over 350 students with over 15% of them being of foreign descent. Further, WWI has been receiving consistent support over the past 3 years from leading Indian & global award-winning media academics and professionals by way of master-classes & guest lectures. Whistling Woods is regularly introducing new courses every year. This year, WWI introduced a Diploma in Television & Broadcast studies and India’s first ever MBA in Media & Entertainment (in association with Manipal University).

I would like to share some good news with you in this regard. Mukta Arts has signed a deal this June with the Government of Valencia to set up Whistling Woods International in Alicante, Spain. This campus will primarily target European, Asian & Indian students. Further, we are in the midst of negotiations with the Government of Andhra Pradesh to acquire 20 acres of land in Hyderabad to set up an integrated education, production & exhibition hub.

Taking this forward, our target is to set up Whistling Woods campuses in three states in India other than Maharashtra and in three countries other than Spain by 2012.

This is our road-map to build Mukta Arts into a multi-vertical media conglomerate with whom global media giants would be glad to associate.

I am very thankful to all our shareholders, investors and well-wishers for their support to us in our endeavours. I assure you that the time that Mukta Arts will make you proud is not too far away.

SUBHASH GHAI
24 July 2009