Postal Ballot Notice - INVESTORS

Pursuant to section 192A of the Companies Act, 1956 read with the Companies
(Passing of Resolution by Postal Ballot) Rules, 2001


NOTICE is hereby given that approval of the shareholders of Balaji Telefilms Limited (the “Company”) is sought in respect of the following special business, proposed to be passed by postal ballot:

Item 1

Revision in Remuneration of Managing Director & CEO of the Company

To consider and if thought fit, to pass with or without modifications, the following resolution as an ORDINARY RESOLUTION :

“RESOLVED THAT, in accordance with the provisions of Sections 198, 269, 309, 310, 311 and other applicable provisions, if any, of the Companies Act, 1956 (“the Act”), and in partial modification of the Resolution No. 9 passed at the Annual General Meeting of the Company held on August 27, 2004 and Resolution No. 2 passed at the Extraordinary General Meeting of the Company held on February 25, 2005, the consent of the members be and is hereby granted for the revision in the remuneration of Ms. Shobha Kapoor, Managing Director & CEO of the Company with effect from April 1, 2006 for remaining tenure up to November 10, 2009 as set out in the draft supplemental agreement to be entered into between the Company and Ms. Shobha Kapoor and initialled by the Chairman for the purpose of the identification, which said Agreement is hereby specifically sanctioned with liberty to the Board of Directors to alter, vary, and modify the terms and conditions of the said appointment and/or Agreement, in such manner as may be agreed to between the Board of Directors and Ms. Shobha Kapoor within and in accordance with the limits prescribed in the Schedule XIII to the Act.

“RESOLVED FURTHER THAT notwithstanding anything contained herein above, where during the term of employment of the above Managing Director & CEO, in the event of loss inadequacy of profit in any financial year, unless otherwise approved by the Central Government, the remuneration payable to the above Managing Director & CEO including salary, perquisites and any other allowances shall be governed and be subject to the ceiling provided under the provisions of Section II of Part II of Schedule XIII to the Act or such other limits as may be prescribed by the Government from time to time as minimum remuneration .

“AND RESOLVED FURTHER THAT Mr. Jeetendra Kapoor, Chairman and Ms. Alpa Shah, Company Secretary of the Company be and are hereby authorised to take all necessary or desirable steps for the aforesaid purpose and matters incidental thereto.

 

Item 2

Revision in Remuneration of Creative Director of the Company

To consider and if thought fit, to pass with or without modifications, the following resolution as an ORDINARY RESOLUTION:

“RESOLVED THAT, in accordance with the provisions of Sections 198, 269, 309, 310 and other applicable provisions, if any, of the Companies Act, 1956 (“the Act”), and in partial modification of the Resolution No. 10 passed at the Annual General Meeting of the Company held on August 27, 2004 and the Resolution No. 3 passed at the Extraordinary General Meeting of the Company held on February 25, 2005, the consent of the members be and is hereby granted for the revision in the remuneration of Ms Ekta Kapoor, Creative Director of the Company with effect from April 1, 2006 for remaining tenure upto November 10, 2009 as set out in the draft supplemental agreement to be entered into between the Company and Ms. Ekta Kapoor and initialed by the Chairman for the purpose of the identification, which said Agreement is hereby specifically sanctioned with liberty to the Board of Directors to alter, vary, and modify the terms and conditions of the said appointment and/or Agreement, in such manner as may be agreed to between the Board of Directors and Ms. Ekta Kapoor within and in accordance with the limits prescribed in the Schedule XIII to the Act.

“RESOLVED FURTHER THAT notwithstanding anything contained herein above, where, during the term of employment of the above Creative Director, in the event of loss inadequacy of profit in any financial year, unless otherwise approved by the Central Government, the remuneration payable to the above Creative Director including salary, perquisites and any other allowances shall be governed and be subject to the ceiling provided under the provisions of Section II of Part II of Schedule XIII to the Act or such other limits as may be prescribed by the Government from time to time as minimum remuneration.
“AND RESOLVED FURTHER THAT Mr. Jeetendra Kapoor, Chairman Ms. Alpa Shah, Company Secretary of the Company be and are hereby authorised to take all necessary or desirable steps for the aforesaid purpose and matters incidental thereto.”

Item 3

Appointment of Raksha Entertainment Pvt. Ltd. to the office or place of profit under the Company

To consider and if thought fit, to pass with or without modifications, the following resolution as a SPECIAL RESOLUTION:

“RESOLVED THAT pursuant to Section 314(1B) and other applicable provisions, if any, of the Companies Act, 1956, and subject to the approval of the Central Government, the consent of the Company be and is hereby accorded to the appointment of Raksha Entertainment Pvt. Ltd., a Company in which Mr. Ramesh Sippy, a relative of the Directors of the Company Ms Shobha Kapoor, Mr. Jeetendra Kapoor, Ms. Ekta Kapoor and Mr. Tusshar Kapoor, is a Director, for holding an office or place of profit under the Company as a Consultant for a period of 3 years with effect from the date of approval by the Central Government on the following terms and conditions:

From the date of approval by the Central Government till the completion of tenure of three years :

- Rs. 2,50,000/- (Rupees Two Lacs Fifty Thousand only ) per month plus applicable taxes and reimbursement of actual out of pocket expenses.”

“AND FURTHER RESOLVED THAT Ms Shobha Kapoor, Managing Director, Mr. Jeetendra Kapoor, Chairman, Mr. Sandeep Jain, Chief Financial Officer and Ms. Alpa Shah, Company Secretary be and are hereby authorised severally to take all steps, actions, deeds and to sign such forms, papers etc as may be required and to accept such modification(s) as may be directed by the Central Government and acceptable to Raksha Entertainment Pvt. Ltd.’’

 

Item 4

Revision in commission payable to the non-executive Directors of the Company

To consider and if thought fit, to pass with or without modifications, the following resolution as a SPECIAL RESOLUTION:

“RESOLVED THAT in supersession of earlier Resolutions passed at the Annual General Meeting and Extraordinary General Meeting of the Company held on August 21, 2003 and February 25, 2005 respectively and pursuant to Section 309 and all other applicable provisions, if any, of the Companies Act, 1956 (“the Act”) and subject to such permissions, sanctions if any as may be required, the approval of
members be and is hereby accorded for the payment of commission for each financial year to the Director(s) of the Company who is / are neither in the whole-time employment nor managing director(s), in accordance with and upto the limits laid down under the provisions of Section 309(4) of the Act, computed in the manner specified hereunder, for the period of 5 years from the financial year commencing April 1, 2006

Mr. Jeetendra Kapoor
(Non-executive Director)

0.80% of the Net Profits of the Company computed in the manner laid under Sections 198, 349 and 350 of the Act.

Other Non-Executive Director(s)

0.20% of the Net Profits of the Company computed in the manner laid under Sections 198, 349 and 350 of the Act, subject to limit of Rs. 3 lacs per Director


“AND RESOLVED FURTHER THAT
for the purpose of giving effect to this resolution, the Board of Directors be and are hereby authorised to take all actions and do all such deeds matters and things as may be in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in this regard.”

Registered Office:

C-13, Balaji House, Dalia Industrial Estate,
Opp. Laxmi Industries, New Link Road,
Andheri (West), Mumbai – 400 053.
Mumbai, September 18, 2006

By order of the Board of Directors
Alpa Shah
Company Secretary


NOTES:

1. The explanatory statement pursuant to section 173(2) and 192(A) of the Companies Act, 1956, in respect of the business set out above is annexed hereto.

2. Pursuant to the provisions of section 192A of the Companies Act, 1956 read with the Companies (Passing of Resolution by Postal Ballot) Rules, 2001 the assent or dissent of the shareholders in respect of the resolutions under Postal Ballot Notice dated September 18, 2006 shall be determined through Postal Ballot.

3. The Board of Directors has appointed Mr. Nilesh Shah, Practicing Company Secretary, as the Scrutinizer for conducting the postal ballot process.

4. Voting rights shall be reckoned on the paid up value of the shares registered in the name of the shareholders on the date of the dispatch of the notice.

5. Duly completed postal ballot form (Refer instructions to the postal ballot form) should be received by the Scrutinizer not later than the close of working hours on November 7, 2006. Postal ballot forms received after this date will be treated as if no reply from the shareholder has been received. Envelopes containing postal ballots, if deposited in person or sent by courier at the expense of the shareholder will also be accepted.

6. The self-addressed envelope attached to this notice bears the address to which duly completed postal ballot form is to be sent.

7. The Scrutinizer will submit his final report as soon as possible after the last date of receipt for postal ballot but not later than close of Business on November 14, 2006.

8. The Chairman or authorised Director shall announce the result of the postal ballot on Tuesday, November 14, 2006 at 3:30 p.m. at the Registered Office of the Company.

9. The date of declaration of the postal ballot result will be taken to be the date of passing of the resolutions proposed in this notice.

10. This postal ballot form should be completed and signed by the shareholder. In the case of joint holding, this form should be completed and signed (as per the specimen signature registered with the Company / Depository Participants) by the first named shareholder and in his absence, by the next named shareholder(s). Unsigned postal ballot forms will be rejected.}

11. Shareholders are requested not to send any other paper along with the postal ballot form in the enclosed self addressed postage prepaid envelop in as much as all such envelops will be sent to the Scrutinizer and any extraneous paper found in such envelop would be destroyed by the Scrutinizer.

12. Members are requested to fill the form in indelible ink and not by erasable mode.

13. The right of voting by postal ballot shall not be exercised by a proxy.

14. The Scrutinizer’s decision on the validity of a postal ballot form shall be final.


EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

Item 1 & 2

Revision in Managerial Remuneration of Managing Director and Creative Director of the Company The members of the Company had consented to the reappointment of Ms. Shobha Kapoor, Managing Director and Ms Ekta Kapoor, Creative Director at the Annual General Meeting of the Company held on August 27, 2004, which was further modified and approved by the members at an Extraordinary General Meeting of the Company held on February 25, 2005. To commensurate with the added responsibilities arising out increase in the business, it is proposed to revise the remuneration of Ms. Shobha Kapoor and Ms. Ekta Kapoor with effect from April 1, 2006 for the remaining tenure of the appointment by revising the following clauses of their agreement in the manner set out hereunder:


3. REMUNERATION

3.1 Salary

The Managing / Creative Director’s annual salary will be Rs. 45,00,000 (Rupees Forty Five Lacs Only) (excluding perquisites), with authority to the Board of Directors of the Company to give annual increments not exceeding 30% of the immediately previously drawn salary and payable in twelve (12) equal monthly installments. All payments received by the Managing / Creative Director pursuant to her appointment as Managing / Creative Director would be subject to applicable statutory deductions including tax deduction at source as applicable under the provisions of the Income Tax Act and the Rules made there under.

3.2 Perquisites

The Company shall in addition to the Salary provide the following perquisites to the Managing / Creative Director:

(a) Commission at the rate of 2.5% of the net profits realized by the Company and as computed in the manner laid down in Sections 198, 349 and 350 of the Companies Act, 1956

All other terms and conditions of appointment remains unchanged.

In the event of loss or inadequacy of profit in any financial year during the tenure of their appointment, the remuneration payable to them unless otherwise approved by Central Government shall be within the monetary ceiling prescribed under Schedule XIII to the Companies Act, 1956 as may be in force and/or revised from time to time.

The above may be treated as an abstract of the terms of supplementary agreements proposed to be individually entered into between the Company and Ms. Shobha Kapoor and Ms. Ekta Kapoor respectively pursuant to section 302 of the Companies Act, 1956. The drafts of proposed supplementary agreements refereed above are available at the Registered Office of the Company for inspection by members between 11:00 a.m. to 1:00 p.m. on any working days excluding Sundays and public holidays.

The Board of Directors accordingly recommends the resolutions set out at the item Nos. 1 and 2 of the accompanying Notice for the approval of the Members. Your approval is sought by voting by Postal Ballot in terms of the provisions of Section 192A of the Companies Act, 1956, read with the provisions of the Companies (Passing of Resolutions by Postal Ballot) Rules, 2001.

None of the Directors of the Company are concerned or interested in the resolutions except Mr. Jeetendra Kapoor, Ms. Shobha Kapoor, Ms. Ekta Kapoor and Mr. Tusshar Kapoor may be deemed to be concerned or interested in passing of the said resolutions.


Item 3

Appointment of Raksha Entertainment Pvt. Ltd. to the office or place of profit in the Company

The Company has plans to co-produce 4-5 films during the year with reputed directors of the film industry. The Company has plans to invest approx. Rs. 28 crores during the year into various co-production projects. The Company wishes to avail the services of Raksha Entertainment Pvt. Ltd., represented by its Director Mr. Ramesh Sippy, as consultant to the film division of the Company. Mr. Sippy
brings with him more than 35 years of rich experience in the industry. He is one of the leading distributors in India. His expertise and standing in the film industry will provide immense value in terms of negotiation with the directors and actors. His contacts will be very useful in the successful marketing of these films with distributors across the country.

The Selection committee has duly considered the above proposal & recommended to the Board. The Board of Directors accordingly recommends the resolutions set out at the item No. 3 of the accompanying Notice for the approval of the Members. Your approval is sought by voting by Postal Ballot in terms of the provisions of Section 192A of the Companies Act, 1956, read with the provisions of the Companies (Passing of Resolutions by Postal Ballot) Rules, 2001.

None of the Directors of the Company are concerned or interested in the resolutions except Mr. Jeetendra Kapoor, Ms. Shobha Kapoor, Ms. Ekta Kapoor and Mr. Tusshar Kapoor may be deemed to be concerned or interested in passing of the said resolutions.

 

Item 4

Revision in commission payable to the non-executive Directors of the Company

In view of the increase in number of non-executive Directors and their participation and attention to the business of the Company, which benefits by their mature advice, it is proposed to increase the commission payable to the independent non-executive Directors. In order to do so, it is pertinent to decrease the commission payable to Chairman & Non Executive Director, Mr. Jeetendra Kapoor, as total commission payable to all non-executive Directors cannot exceed 1% of the net profits of the Company. Hence it is proposed to seek members approval to revise the payment of commission for each financial year from 0.90% to 0.80% of the net profits of the Company calculated in the manner laid u/s 198, 349, 350 of the Companies Act, 1956 to Mr. Jeetendra Kapoor, Chairman of the Company, and from 0.1% to 0.2% of the net profits of the Company calculated in the manner laid u/s 198, 349, 350 of the Companies Act, 1956, subject to limit of Rs. 3 lacs per Director, to all other non-executive Directors of the Company, for a period of five years w.e.f. April 1, 2006.

The Board of Directors accordingly recommends the resolutions set out at the item No. 4 of the accompanying Notice for the approval of the Members. Your approval is sought by voting by Postal Ballot in terms of the provisions of Section 192A of the Companies Act, 1956, read with the provisions of the Companies (Passing of Resolutions by Postal Ballot) Rules, 2001.

The non-executive Directors Mr. Jeetendra Kapoor, Mr. Akshay Chudasama, Mr. Dhruv Kaji, Mr. Pradeep Sarda, Ms. Michelle Guthrie and Mr. John Lau respectively may be deemed to be concerned or interested in passing of the said resolution with respect to the commission payable to them respectively.

Registered Office:

C-13, Balaji House, Dalia Industrial Estate,
Opp. Laxmi Industries, New Link Road,
Andheri (West), Mumbai – 400 053.
Mumbai, September 18, 2006

By order of the Board of Directors
Alpa Shah
Company Secretary