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Saregama to transfer TV software line to arm
BS Bureau in Kolkata | June 26, 2003 12:10 IST
Saregama India Ltd, the entertainment company of the RPG Enterprises, has decided to transfer its television software business to Saregama Films Ltd, a wholly owned subsidiary.
The Saregama India board on Wednesday approved the transfer of business to Saregama Films, which will issue and allot equity shares of Rs 10 each to the parent company. The board has also extended the accounting year till the end of June.
Saregama Films Ltd will come into effect from June 30, 2003. It would guide Saregama India to make a fresh entry into the film business from which it pulled out four years ago.
A press statement issued by the company say the rational for transferring the TV software business lies in the fact that it requires different funding.
The opportunities in the software and film business is also different from other activities of the parent company.
Experts find the Saregama move of creating new subsidiary is not in line with the general corporate practice of folding up subsidiaries now.
However, they do not rule out the possibility of the new subsidiary being spun off into a company in the long run.
The company dipped further into the red in the financial year ended March 31, 2003 with incurring a net loss of Rs 38.90 crore (Rs 0.389 billion) as against the previous period's Rs 25.76 crore (Rs 0.258 billion).
Sales, during the period, came down from Rs 104.49 crore (Rs 1.04 billion) to Rs 79.39 crore (Rs 0.794 billion). The earning per share of the company stands at a negative of Rs 41.64.
In the last quarter of the financial year, the company incurred a net loss of Rs 6.99 crore (Rs 0.069 billion) over a net sale of Rs 14.91 crore (Rs 0.149 billion).