According to sources, the company plans to invest $10 million in a phased manner based on the needs of the subsidiary. The Indian subsidiary will be known as SPE Films India Pvt Ltd and will be started with a capital base of $2.5 million. Sony Pictures is a wholly-owned subsidiary of Sony Corporation of Japan.

SPE Films also plans to enter into financing of local films. Sony believes that there is a need to streamline distribution channels in the country as the industry in its present form is highly fragmented and needs international expertise, sources said. It will also enable Sony to bring in state-of-the-art production technology. This will be the fifth Sony Corporation venture in the country. Sony is currently operating in India through Sony India, Sony Music India,Sony Entertainment Television India and Columbia TriStar Films of India Ltd. Sony India manufactures color televisions and electronic products, while Sony Music is a full service record company.

Sony Entertainment produces local audio visual programming while Columbia TriStar is into foreign film distribution.

Sony is also planning to increase its presence in existing businesses which include the assembly of new 21-inch televisions for the global market, further development of the music business and increased investment in production of television software.

Sony believes that there is an urgent need to corporatise the structure of the Indian film industry and streamline issues of production, marketing, distribution and financing along internationally tested standards.

According to sources, SPE Films has projected a turnover of Rs 24 crore with a profit after tax of Rs 6.91 crore during the first year of operation. Turnover is projected to go up to Rs 54.98 crore by the fifth year while the net profithas been put at Rs 15.48 crore.