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Directors Report of BAG Films & Media Ltd.

Mar 31, 2015

To,

The Members,

B.A.G. Films and Media Limited

The Directors have pleasure in presenting the 22nd Annual Report on the business and operations of the Company together with Audited Financial Statements for the financial year ended on March 31, 2015.

FINANCIAL RESULTS

The Company's financial performance, for the year under review alongwith previous figures are given hereunder:

(Rupees in Lakhs)

Particulars 2014-15 2013-14

Total Income 3,237.73 5,881.45

Profit before Depreciation & 1,452.76 1,973.77 Financial Charges

Financial Charges 1,419.59 1,684.29

Cash Profit 33.59 289.48

Depreciation 1,548.71 1,157.34

Profit before Tax (1,515.11) (867.86)

Provision for Tax (261.68) (8.35)

Profit after Tax (1253.43) (859.50)

Proposed Dividend Nil Nil

RESULTS OF OPERATIONS/ STATE OF COMPANY'S AFFAIRS

During the year under review, the total income from operations of the company was Rs. 3237.73 lacs against Rs. 5881.45 lacs during the previous financial year. The Company recorded a net loss of Rs. 1253.43 lacs against net loss of Rs. 859.50 lacs during the previous financial years.

Television Software:

Your Company plans to create and deliver popular, high quality programming for catering to not only domestic but also to the demands of international viewership and expects to earn high returns for the stakeholders. Your Company also leveraged content creations and made optimum use of internal resources and its infrastructure. Your company gave significant impetus to international business regarding healthy growth in export.

Media Education

Your Company has earned royalities for its Media education brand ISOMES (International School of Media & Entertainment Studies). ISOMES is offering full time graduate courses in Broadcast Journalism under the aegis of B.A.G. Films Media Education Society Broadcasting

News24, a 24 hours National Hindi free to air Hindi news channel operating through its subsidiary News24 Broadcast India Limited, has consistently maintained healthy market share in Hindi News Genre News24 and is available throughout India on cable and DTH platforms.

News 24, Hindi news channel is also available throughout West Asia and the MENA Region on DU network.

E24 a 24 hours Bollywood Entertainment channel of your Company operating through its subsidiary E24 Glamour Limited, pitched as Bollywood's channel managed to attract audience of all age groups and succeeded in creating a new genre in television entertainment.

E24, now available throughout west asia and the MENA region on DU network has gained popularity in International market too.

Darshan24: Darshan24 is the new age devotional channel which has been designed for all age groups. The Channel endeavors to bring the masses close to the roots of our Indian culture and its diverse religion in order to teach and preach the new generation our long age tradition and customs.

It is the source of all wisdom, the home of all knowledge, focusing on the elevation and awakening of the soul, the enhancement of the power within us. Channel is dedicated to the Indian Philosophy, Religion, Spiritual solidarity, Culture and dissemination of the vast and timeless knowledge of the great "Sanatana Dharma" to the people of the world.

Radio

Your Company has 10 FM Radio stations operating in the brand name 'Dhamaal24' at 106.4 FM under its subsidiary Skyline Radio Network Limited (formerly known as Dhamaal24 Radio Network Limited) in the cities of Hissar, Karnal, Patiala, Shimla, Muzaffarpur, Ranchi, Jabalpur, Jalgaon, Dhule and Ahmednagar.

106.4 FM Radio Dhamaal24 –Har Khushi hai Jahan is a hybrid FM Channel bringing to the listeners life in all manifestations. Dhamaal24 is a channel with a slice of life and approach to the infotainment & entertainment programming.

CHANGE IN NATURE OF BUSINESS IF ANY

There was no change in the nature of Business of the Company during the financial year ended March 31, 2015.

DIVIDEND

The Directors express their inability to declare any dividend for the financial year ended March 31, 2015 on account of losses incurred during the year under review. The Company has not made any transfer to General Reserve.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

Pursuant to the erstwhile provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on or before the prescribed due dates, to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 25.06.2014 (date of last Annual General Meeting) on the Company's website www. bagflms.com and also on the Ministry of Corporate Afairs' website.

In terms of Section 125 of the Companies Act, 2013, unclaimed or unpaid dividend relating to the financial year 2007-08 is due for remittance on or before 23.10.2015 to the Investor Education and Protection Fund. Details of transfer of funds to IEPF during the FY 2014-15 are given herein below:-

Particulars Amount (in Rs.)

Opening Balance (01-04-2014) 210,091

Less: Transfer of Unclaimed Dividend to 77,880 IEPF

Closing Balance (31-03-2015) 132,212

DIRECTORS

There are 4 Directors on the Board of your Company, comprising of 2 Independent Directors, 1 Non-Executive Director and a Chairperson cum Managing Director (CMD).

Women Director

Your Company is in compliance with the provisions of section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, which prescribe the requirement of at least one Women Director on the Board of the Company. The Board of the Company, besides Ms. Anurradha Prasad, as the Chairperson cum Managing Director has 2(two) women Independent Directors, viz. Dr. Anuradha Mishra and Ms. Urmila Gupta.

Independent Directors

In terms of Clause 49 of the Listing Agreement, entered into with the Stock Exchanges and Section 149(6) of the Companies Act, 2013 and based on the confirmation/ disclosures received from the Directors. The Board comprises following Non- Executive Independent Directors:

1. Dr. Anuradha Mishra

2. Ms. Urmila Gupta

Declaration by Independent Directors

The Independent directors have submitted their declaration of Independence, as required under to section 149 (7) of the Companies Act, 2013, confirming that they meet the criteria of independence as provided in sub section (6).

Appointments/ Resignations from the Board of Directors

Ms. Urmila Gupta was appointed as Independent Director by the Members at the last Annual General Meeting of the Company held on 25 June 2014 for a term of 5(five) years.

Mr. Prem Behl, Independent Director of the Company resigned from the Board with effect from November 5, 2014. The Board places on record its appreciation for the outstanding contribution made by Mr. Behl during his tenure as the Director of the Company.

Appointments/ Resignations of the Key Managerial Personnel

Ms. Anurradha Prasad, Chairperson cum Managing Director, Mr. Ajay Jain, Chief Financial Officer and Mr. Rajeev Parashar, Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013. Ms. Anurradha Prasad, Chairperson cum Managing Director and Mr. Rajeev Parashar, Secretary have been holding the respective position of the Company before the commencement of the Companies Act, 2013.

The Board of Directors of the Company at their meeting held on February 12, 2015 re-appointed Ms. Anurradha Prasad as Chairperson cum Managing Director, subject to the approval of Shareholders for further period of 5(five) years with effect from April 1, 2015.

The Board of Directors of the Company at their meeting held on May 29, 2015 appointed Mr. Ajay Jain as Chief Financial Officer of the Company.

Directors Retiring by Rotation

In accordance with the provisions of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Sudhir Shukla retires by rotation and is eligible for re-appointment.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committees and Stakeholders Relationship Committee .

Familiarization programmes for Board Members

The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarize with the Company's procedures and practices.

Periodic presentations are made at the Board and Committee Meetings thereof, on business and performance updates of the Company along with business strategy. Detailed presentations on the Company's business were made before the Board members as a part of familiarisation programme for effective policy and decisions making.

Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year 4 (four) Board Meetings and 4 (four) Audit Committee Meetings were convened and held, the details whereof are provided in the Corporate Governance Report of this Annual Report.

The intervening gap between the Meetings was within the time limit prescribed under the Companies Act, 2013 read with the Listing Agreements with the Stock Exchanges.

Composition of Committees of the Board of Directors

The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas/activities which concern the Company and need a closer review. The Board Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by members of the Board. The terms of reference of Board Committees are determined by the Board from time to time.

At present there are following five Committees of the Board:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Risk Management Committee

4. ESOP Compensation Committee

5. Nomination and Remuneration Committee

In addition, the Board is also empowered to constitute specific committees, from time to time, depending on the business exigencies, and simultaneously dissolves such Committees, that are no longer required. The terms of reference of the Committees are reviewed and modified by the Board from time to time. Meetings of each Committee are convened by the respective Committee Chairman. The Company Secretary prepares the agenda and explanatory notes, in consultation with the respective Committee Chairman and circulates the same in advance to all the members. Every member is free to suggest inclusion of item(s) on the agenda. Minutes of the Committee meetings are approved by the respective Committee and thereafter placed before the Board. The detail of Committees are provided in Corporate Governance Report of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, it is hereby confirmed that:- a) in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts for the financial year ended March 31, 2015 of the Company on a 'going concern' basis.

e) that proper internal financial controls are in place and that the financial controls are adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were and that such system were adequate and operating effectively.

INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JV

There are four subsidiary companies out of which one is Wholly Owned Foreign Subsidiary. During the year, BAG Infotech Private Limited and BAG Live Entertainment Limited ceased to be associates.

The Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies, are not being attached with the Balance Sheet of the Company. Salient features of Financial Statements of Subsidiaries in the prescribed format, form part of this Financial Statements. However, the financial statements of the subsidiary companies are available on the website of the company. The Company will provide on demand a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Policy for determining material subsidiaries may be accessed under Investor section on the Company's website www.bagflms.com.

Consolidated Financial Statements

The Consolidated Financial Statements of subsidiary Companies in terms of Section 129(3) of the Companies Act, 2013 read with Rule 6 of the Companies (Accounts) Rules, 2014 are prepared in accordance with the Companies relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT- 9 is annexed herewith as Annexure I.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Your Company is not engaged in any manufacturing or processing activity, as such particulars required to be given in terms of Section 134 (3) (m) of the Companies Act, 2013 read alongwith Companies (Accounts) Rules, 2014, regarding conservation of energy and technology absorption are not applicable.

During the year, your Company has incurred expenditure in foreign currency to the extent of Rs. 5,380,347/- as against Rs. 2,303,219 in the previous financial year 2013-2014 and earned Rs.1,328,53,055 (previous year Rs. 739,18,820).

SIGNIFICANT AND MATERIAL ORDERS

There were no significant or material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls with reference to financial statements, being examined by the management and internal auditors with the size, scale and complexity of its operation. To maintain its objectivity and independence, the Internal Financial Audit functions reports to the Chairman of the Audit Committee of the Board. During the year, no reportable material weaknesses in the design or operation were observed.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RISK MANAGEMENT POLICY

In accordance with the requirements of the Companies Act, 2013 and Listing Agreement towards Company has adopted Risk Management Policy, approved by Board and established a risk management framework to identify, mitigate and control the risk and threat. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments .Risk management forms an integral part of the Company's Mid-Term Planning cycle. The key business risks identified by the Company and its mitigation plans are as under:

Project Risks:

The Media and Entertainment Industry is capital intensive in nature. According to a report on M & E Industry Indian market is poised to grow at a CAGR of 13.9 per cent, to grow from INR1026 billion in 2014 to reach INR1964 billion by 2019, a growth rate that is almost double that of the global media and entertainment industry. In the execution of large projects which are highly capital intensive in nature, there could be exposure to time and cost overruns. To mitigate these risks, the project management team and the project accounting and governance framework has been further strengthened.

Competition Risks:

The Media and Entertainment Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience and its created capacities to increase market share, enhance brand equity / visibility and enlarge product portfolio and service offerings. It would also leverage on its Infrastructure, Commercial and Institutional Sales team to offer value to customers. The Company tapping international market to beat local competition.

Occupational Health and Safety Risks:

Safety of employees is of utmost importance to the Company. To reinforce the safety culture in the Company, it has identified Occupational Health & Safety as one of its focus areas.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposit under section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014

CORPORATE SOCIAL RESPONSIBILITY POLICY

The Company believes in voluntary commitment Corporate Social Responsibility initiatives, through the said provisions are not applicable. However, once the said provisions are applicable, the Company shall report the same in the coming years and shall submit the relevant report on such applicability.

NOMINATION & REMUNERATION POLICY

The Company has constituted a Remuneration Committee of Directors in compliance with provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement as amended from time to time. During the year under review, the nomenclature of Remuneration Committee was changed to "Nomination and Remuneration Committee" as required under the provisions of Section 178 of the Companies Act, 2013 and revised Clause 49 of the listing agreement (effective October 1, 2014), related to Corporate Governance, entered into with the Stock Exchanges.

The Remuneration policy of the Company is a comprehensive policy which is competitive, in consonance with the industry practices. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of performance against set objectives.

The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure II and forms part of this Report.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. In accordance with the requirements of Listing Agreement, the Company has also adopted the Policy on Related Party Transaction and the same has been uploaded on the website of the company.

The particulars of every contract and arrangement entered into by the Company with related parties referred to in sub- section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto are disclosed in Form No. AOC -2 in Annexure III and form part of this Report.

The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

VIGIL MECHANISM

The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior and to meet the objective, it has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the company's code of conduct or ethics policy to the Audit Committee. There is no restriction for reporting any such occurrence and all the employees have uninterrupted access for reporting their concern in confidence to the Audit Committee.

The details of the Whistle Blower Policy are posted on the website of the Company at www.bagflms.com .

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

M/s. Joy Mukherjee & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Certificate from the Auditors have been received to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

Qualification in Auditors reports

All observations made in the Independent Auditors' Report are self explanatory and suitably addressed in the Notes forming part of the Financial Statements and do not call for any further comments. The Company is in the regime of unqualified financial statements.

The Internal Auditor directly reports to the Audit Committee.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Balika Sharma & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure IV to this Report.

LISTING

The equity shares of the Company are listed with National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and *Delhi Stock Exchange Limited (DSE). There are no arrears on account of payment of listing fee to the Stock Exchanges.

*SEBI vide its Order No. WTM/PS/45/MRD/DSA/NOV/2014 dated 18.11.2014, has withdrawn recognition granted to DSE.

CORPORATE GOVERNANCE

The Report on Corporate Governance together with the Certificate from Statutory Auditors of the Company regarding the Compliance of conditions of Corporate Governance by the Company as stipulated in Clause 49 of the Listing Agreement is annexed and forms part of the Board Report.

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements.

The Certificates from CMD/CFO inter-alia confirming the correctness of the financial statements, compliance with Company's Code of Conduct, adequacy of Internal Control measures and reporting of the matters to the Audit Committee in terms of Clause 49 of the Listing Agreement is attached in Corporate Governance Report and forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement is provided separately and forms part of this Annual Report.

CODE OF CONDUCT

The Company has in place a comprehensive Code of Conduct (the Code) modified from time to time as prescribed under the Listing Agreement, applicable to Directors, Independent Directors and Senior Management Personnel. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company. A copy of the Code has been put on the Company's website www.bagflms.com. The Code has been circulated to Directors and Senior Management Personnel, and its compliance is affirmed by them annually.

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company in compliance with the SEBI Insider Trading Regulation. The Securities and Exchange Board of India ("SEBI") vide Notification No. LAD-NRO/GN/2014-15 dated 15th January, 2015 has introduced new regulation to put in place a framework for prohibition of insider trading in securities and to strengthen the legal framework viz. SEBI (Prohibition of Insider Trading) Regulations, 2015.

In compliance with the SEBI Regulations, the existing Code of Conduct which was formulated under erstwhile regulation has been replaced with the new Code of Conduct, viz. "Code of conduct for trading by insiders" pursuant to Regulation 9 of the SEBI Regulation. Besides, the Company has also formulated code of fair disclosure of Unpublished Price Sensitive Information in addition therewith pursuant to Regulation 8 of the SEBI Regulations. These codes are applicable to Directors/officers/ connected person/designated employee of the Company and their immediate relatives. Both these codes have been made effective retrospectively from 15th day of May 2015.

PREFRENTIAL ALLOTMENT

Convertible Warrants

Your company issued and allotted 80,000,000 warrants, to eligible allottees under promoter/non- promoter group company on Preferential Basis with an option to get allotted one equity share per warrant before expiry of eighteen months from the date of allotment, pursuant to section 42 and 62 of the Companies Act, 2013 as per the approval accorded by the Members of the Company at the 21st Annual General Meeting held on June 25, 2014. In the first tranche 8,500,000 warrants of Rs. 2/- each at a price of Rs. 3.40/- per share ("conversion price" including a premium of Rs. 1.40/- per share) were converted into equal number of equity shares of Rs. 2/- each during the FY 2014-15 and listing and trading permission for these shares have been duly obtained from the respective Stock Exchanges

The paid up Equity Share Capital as on March 31, 2015 was Rs. 357,436,180/- (including calls in arrear of Rs. 170,341/-).

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled there to, excluding the information on employees' particulars which is available for inspection by the Members at the registered office of the Company during business hours on working days of the company up to the date of the ensuing Annual General Meeting. Any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in this regard.

The ratio of the remuneration of each Director to the median employee's remuneration and other details in term of subsection (12) of section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as part of this report at Annexure V.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thanks Central and State Government Departments, organizations and agencies for the continued help and co-operation extended by them.

Your Directors also gratefully acknowledge all stakeholders of the Company viz. viewers, producers, vendors, members, stock exchanges, Auditors, depositories, consultants, dealers, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board of Directors

B.A.G. Films and Media Limited

Anurradha Prasad

Chairperson cum Managing Director

(DIN: 00010716)

Date: May 29, 2015

Place: Noida


Mar 31, 2013

To , The Members of B.A.G. Films & Media Limited

The Directors are pleased to present their 20th Annual Report on the business and operations of the Company together with the Audited Accounts for the fi nancial year ended March 31, 2013.

FINANCIAL RESULTS

(Rupees in Lakhs) Particulars 2012-13 2011-12

Total Income 4,538.65 5,081.40

Profi t before Depreciation & 1,411.41 1,925.77

Financial Charges Financial Charges 941.65 741.68

Cash Profit 469.76 1,198.44

Depreciation 1453.00 1,120.72

Profi t before Tax (983.24) 63.37

Provision for Tax (97.35) 61.71

Profi t after Tax (885.89) 1.66

Proposed Dividend Nil Nil

PERFORMANCE REVIEW

The year under review had marginal fall in revenues. The total revenue of your company has been Rs. 4,538.65 lacs compared to Rs. 5,081.40 lacs in the previous fi nancial year. The cash profi t has shown an decrease from Rs. 1,198.44 lakhs to Rs. 469.76 lakhs due to increase in fi nancial charges compared to previous year.

Television Software:

Your Company developed and strengthened its client base and produced shows for prominent channels viz. Colors, Imagine TV, Life OK and Star. This development required investment in Capital expenditure, which resulted in higher fi nancial cost and higher depriciation leading to negative profi t after tax. The management is confi dent that this investment would result into improved revenues and better profi ts in the next fi nancial year. Your Company also leveraged content creations and made optimum use of internal resources and its infrastructure.

The Company in association with ''Nautanki Films Private Limited'' made a landmark show such as ''Madhubala- ek- ishq-ek-junoon" (Madhubala) for channel Colors and ''Sapno ke Bhawar mein'' on Life OK channel. The Madhubala had won the "Favorite New TV Drama Award" at the People''s Choice Award 2012 Show on Colors. It also bagged the Best Fiction Show at the Apsara Guild Awards. During the year the Madhubala has completed its 200 episodes. The show received excellent reviews and has been liked across the audience for its unique concept.

Your Company plans to create and deliver popular, high- quality programming for catering to not only domestic but also to the demands of international viewership and expects to earn high returns for their stakeholders.

B.A.G. Network''s production house ''Studio 24'' holds the unique distinction of producing programs of all genres for a range of channels and audience. Programs like Baba Aisa Var Dhundoo and Madhubala amongst others cover a gamut of genres in producing of television programs. Studio-24 produced programs "Sapno ke bhawar me" for television entertainment channels Star TV. Studio-24 has set all new standards in producing television programs. The Company continued its focus on commissioned programs and bagged contracts from prestigious channels.

Media Education

Your Company has been providing media education through its media school iSOMES (International School of Media & Entertainment Studies). iSOMES is offering full time graduate courses in Broadcast Journalism. ISOMES has its affi liation with Mahatma Gandhi University, Shilong and offers full time Graduate & Masters courses in Broadcast Journalism.

ISOMES ITA - iSOMES has spread its wings and its franchiee in Lucknow has witnessed healthy growth. In Mumbai the two leading schools of Media and Performing Arts of India namely iSOMES and Indian Television Academy have joined hands to provide a platform to empower students who are keen to carve a niche in Acting, Singing, Dancing and Grooming. The other courses offered by the school comprises:- - Post Graduate full time Diploma in Broadcast Journalism

- Post Graduate full time Diploma in TV Production & Direction

- Certifi cate in Post Production & Video Editing

- Certifi cate in Camera & Lighting

- Certifi cate in Radio Production & Jockeying

- Certifi cate in Creative Writing & Scripting

- Certifi cate in Anchoring & Reporting

Broadcasting

News24, a 24 hours National Hindi free to air news channel operating through its subsidiary News24 Broadcast India Limited has been very well received by the audiences. It has consistently maintained approx 10% market share in Hindi News genre and is available throughout India on cable and DTH platforms.

Programs like Aaj Ka Reporter, Kaand, Aamne Saamne, Sabse Bada Sawal, Ek Shakhsiyat ki 50 Ansuni Kahania and Khabrein 30 Second Mein amongst others cover a gamut of genres in news reporting and have been received exceptionally well with the audiences across the nation.

Aaj Ka Reporter is one of the most liked program on News 24. Ek Shakhsiyat ki 50 Ansuni Kahania has also been awarded the most Best-Presented Popular News Show by the News Television Awards 2012.

E24: a 24 hours Bollywood Entertainment channel of your Company operating through its subsidiary E24 Glamour Limited has also been growing at a rapid pace and has garnered healthy channel shares. Pitched as Bollywood''s fi rst news channel ''E24'' managed to attract audiences of various age groups and succeeded in creating a new genre in television entertainment and remains bollywood ka No.1 channel.

The channel has not only successfully been able to entertain its audience but has also been educating the youth by sending important messages and uplifting the lifestyle upto the global standard at same time not forgetting its culture and traditions.

During the year E24 launched a slew of new shows while continuing with its fl agship shows like Bollywood Reporter and U Me & TV, thus strengthening its programming line- up further. There was 20 Ka Dum, featuring 20 of the most signifi cant stories from Bollywood.

Darshan24: Darshan24 is the new age devotional channel which has been designed for all age groups. The Channel endeavors to bring the masses close to roots of our Indian culture and its diverse religion in order to teach & preach the new generation our long age tradition & customs.

It is the source of all wisdom, the home of all knowledge, focusing on the elevation and awakening of the soul, the enhancement of the power within us. This channel is dedicated to the Indian Philosophy, Religion, Spiritual solidarity, Culture and dissemination of the vast and timeless knowledge of the great "Sanatana Dharma" to the people of the world.

The programmes on this channel range from Hindu bhajans, kirtans, aartis , aradhanas and spiritual discourses by prominent, respected saints to Good healthy living - programs on yoga, general well being, special educational programming highlighting ayurveda along with documentaries on places of worship, temples, cities, on the various festivals of India.

During the year the channel produced its programs such as Aradhana, Mandir Darshan, Kaal Chakra, Dharma Special, Margdarshak, Sundarkand. Kaal Chakra, Sanjeevani and Aradhana is a popular show which manage to attract audience of various age groups.

Radio

Your Company has 10 FM Radio stations operated with the brand name ''Dhamaal24'' at 106.4 FM under its subsidiary

Dhamaal24 Radio Network Limited (formerly known as B.A.G. Infotainment Limited) in the cities of Hissar, Karnal, Patiala, Shimla, Muzaffarpur, Ranchi, Jabalpur, Jalgaon, Dhule and Ahmednagar.

106.4 FM Radio Dhamaal24 – Har Khushi hai Jahan is a hybrid FM Channel bringing to the listeners life in all manifestations. Dhamaal24 is a channel with a slice of life and approach to the infotainment & entertainment programming. Riding on the vast reservoir of talent and human resource, Dhamaal24''s programming ideology is based on extensive research, demographic understanding and strategic planning in synchronization with sales requirements. All out efforts are made to establish Dhamaal24 a brand with great recall value. Various programming are purposely aligned for maximum listenership. Our content entices are our regional listeners.

Your Company has also revamped and changed the look of its radio station ''Dhamaal24'' with revitalized, novel and popular shows like MorningPur, Gossip Mohalla, Sumiran, Dharma Yaatra, Jhumri Talaiya, Aamne-Saamne, Har Khushi Hai Jahan, Taka Tak Morning, Chughliyan, Velle Hum Velle Tum, Bolymal, Bumper Bachake , Back to Back, Reel Ki Real Life and Star Track are aired on Dhamaal24 keeping the regional fl avor in each of its programmes offered to its listeners.

DIVIDEND

The Directors express their inability to declare any dividend for the fi nancial year ended March 31, 2013 on account of losses during the year under review. The Company has not made any transfer to General Reserve.

Pursuant to the provisions of section 205A(5) of the Companies Act, 1956, dividend for the fi nancial year 2005- 06 which remains unpaid or unclaimed for a period of 7 years, shall be transferred by the Company to the Investors'' Education and Protection Fund (IEPF).

DIRECTORS

During the year, Mr. Rajiv Shankar, Non-Executive Director resigned from the Board of the Company with effect from November 09, 2012. Ms. Ragini Kumar, Non-Executive Independent Director and Mr. Sudhir Shukla, were appointed as Non-Executive Director on the Board of the Company with effect from May 30, 2012 and February 13, 2013 respectively.

In terms of Article 89 of Articles of Associations of the Company and pursuant to section 256 of the Companies Act, 1956, Mr. Prem Behl, liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment in terms of the provisions of the Articles of Association of the Company. The above re-appointment forms part of the Notice of the 20th Annual General Meeting and the relevant resolution are recommended for your approval.

Mr. Sudhir Shukla was appointed as Additional Director of the Company on February 13, 2013 to hold offi ce up to the conclusion of the ensuing Annual General Meeting. The Company has received notice along with requisite fee under Section 257 of the Companies Act, 1956 from Member proposing the appointment of Mr. Sudhir Shukla as Non- Executive Director of the Company. The Board recommends his appointment as Director, liable to retire by rotation.

Brief profi le of the Directors who are to be appointed/re- appointed, nature of their expertise in specifi c functional areas, names of companies in which they hold the membership of the Board of Directors or committee thereof, chairmanship of the Board, their shareholding etc. as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are furnished in the notice of the ensuing Annual General Meeting and in the section on Corporate Governance in the Annual Report elsewhere.

Your Directors recommended their appointment/re- appointment at the ensuing Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed chapter on "Management Discussion and Analysis Report" pursuant to clause 49 of the Listing Agreement is given separately in the other part of the Annual Report.

CORPORATE GOVERNANCE

The Company believes that the essence of Corporate Governance lies in the phrase "Your Company". It is "Your" Company because it belongs to you- ''the Shareholders''. The Chairperson and Directors are "Your" fi duciaries and trustees. Their objective is to take the business forward in such a way that it maximizes "Your" long term value. Your Company is committed to benchmark itself with global standards in all areas including highest standards of Good Corporate Governance. Besides adhering to the prescribed Corporate Governance practices as per clause 49 of the Listing Agreement, the company also endeavors to share information with its stakeholders openly and transparently on matters which have a bearing on its economic and reputational interest.

A certifi cate from Statutory Auditors of the Company regarding the compliance of the conditions of Corporate Governance by the Company as stipulated under Clause 49 of the Listing Agreement is also attached to this Report.

Certifi cate from CFO/VP Finance inter alia confi rming the correctness of the fi nancial statements, compliance with Company''s Code of Conduct, adequacy of the Internal Control measures and reporting of matters to the Audit Committee in terms of clause 49 of the Listing Agreement with the Stock Exchanges, is attached in Corporate Governance Report and forms part of this Report.

CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The

Code of Conduct has been posted on the Company''s website.

Board Members and Senior Management personnel have affi rmed compliance with the Code and a separate declaration to this effect is annexed to the Corporate Governance Report.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

During the year the Company has allotted 5,000,000 equity shares by conversion of 5,000,000 equity warrants on April 05, 2012 to M/s ARVR Communications Private Limited. These shares were allotted and admitted for trading in NSE, BSE and DSE.

The shares of your company continue to be listed on National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and Delhi Stock Exchange Limited (DSE).

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposit under Section 58A and Section 58AA of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, the Directors of the Company hereby state and confi rm- 1. That in preparation of the accounts for the fi nancial year ended March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the Directors have selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fi nancial year and of profi t and loss of the Company for that year;

3. That the Directors have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the accounts for the fi nancial year ended March 31, 2013 have been prepared on a "going concern" basis.

SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, we are required to attach the Balance Sheet, Statement of Profi t and Loss and other documents of our subsidiaries. The Ministry of Corporate Affairs, Government of India (MCA) vide its Circular No. 2/2011 dated 08.02.2013, has approved an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated fi nancial statements in the Annual Report. Accordingly, the Annual Report 2012-13 contains such fi nancial statements of subsidiaries. A statement pursuant to section 212 of the Companies Act, 1956 for summery fi nancial performance of Subsidiary Companies is attached to this report. The audited fi nancial statement and related information of our subsidiaries will be made available on our website, www.bagfi lms.com. The documents will also available for inspection during business hours at our registered offi ce.

The Company is presenting consolidated accounts of its subsidiary companies prepared in accordance with Indian Generally Accepted Accounting Practices (GAAP) and the same are attached herewith.

There has been no change in the nature of business of the company and any of its subsidiary companies during the year.

PREFERENTIAL ALLOTMENT

Convertible Equity Warrants

Your company had issued 5,000,000 convertible equity warrants pursuant to section 81(1A) of the Companies Act, 1956 as per the approval accorded by the Members of the Company at the 17th Annual General Meeting dated September 4, 2010 to M/s ARVR Communications Private Limited, a promoter group company on preferential basis with an option to get allotted one equity share per warrant before expiry of eighteen months from the date of allotment. The Company has allotted these 5,000,000 equity shares by conversion of 5,000,000 equity warrants on April 05, 2012 to M/s ARVR Communications Private Limited.

Employee Stock Option Scheme (ESOPS)

Pursuant to the Special Resolution passed by the Members at an Extra-Ordinary General Meeting held on February 13, 2007 and in principle approval from the Stock Exchanges, your Company has implemented an Employees Stock Option Scheme ("the BAG ESOP Scheme") to reward the employees of the Company and its subsidiaries for their performance and association with the Company and also to motivate them to contribute to the growth and profi tability of the Company, whereby the Company planned to grant up to 10,000,000 options to eligible employees. In the fi nancial year 2008-09 company granted 1,150,000 options to the eligible employees. Each option was exercisable for one equity share at a price of Rs. 13/- each fully paid up on payment to the Company on completion of vesting period as per the above scheme.(Price revised to Rs. 3/- per share under the approval of the members of the Company at Annual General Meeting dated September 04, 2010). Out of 1,150,000 options, 405,000 options are converted till date.

The applicable disclosures as stipulated under the SEBI (Employees Stock Options Scheme and Employees Purchase

Scheme) Guidelines, 1999 as at March 31, 2013 are annexed herewith as Annexure I and forms part of this report.

STATUTORY AUDITORS

M/s Joy Mukherjee & Associates, Chartered Accountants, Statutory Auditors of the Company, bearing Firm Registration No. 006792C, retire at the ensuing Annual General Meeting, and being eligible, offer themselves for re- appointment. The Company has received a certifi cate from them to the effect that their re-appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualifi ed for such re-appointment within the meaning of section 226 of the Companies Act, 1956.

AUDITORS'' REPORT

All observations made in the Independent Auditors'' Report and notes to the accounts are self explanatory and do not call for any further comments under section 217 of the Companies Act, 1956.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 1,80,801.40 to Investor Education Protection Fund, in compliance with the provisions of section 205C of the Companies Act, 1956. The said amount represents dividend for the year 2004-05 which remained unclaimed by the shareholders of the Company for a period exceeding 7 years from its due date of payment.

HUMAN RESOURCES

Your Directors would like to place on record their deep appreciation of all employees for rendering quality services and to every constituent of the Company be its viewers, producers, regulatory agencies, creditors or shareholders. The unstinting efforts of the employees have enabled your company to remain in the forefront of media and entertainment business.

PARTICULARS OF EMPLOYEES

Information as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended from time to time, forms part of this Report. However, as per the provision of section 219(1) (b) (iv) of the Companies Act, 1956 the Report and Accounts are being sent to all the members excluding the statement containing the particulars of employees to be provided under section 217(2A) of the Companies Act, 1956. Any member interested in obtaining such particulars may inspect the same at the Registered Offi ce or Corporate Offi ce of the Company or write to the Company Secretary for a copy.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

Your Company is not engaged in any manufacturing or processing activity, as such particulars required to be given in terms of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of energy and technology absorption are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, your Company has incurred expenditure in foreign currency to the extent of Rs. 28,36,348 as against Rs. 26,77,925 in the previous fi nancial year 2011-2011.2

Foreign Exchange earnings during the year and in the previous fi nancial year 2011-2012 were NIL.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their deep gratitude to the viewers, producers, vendors, investors and

banks for their continued support during the year. Your Directors also wish to place on record their appreciation for the dedicated services rendered by the employees of the Company at all levels, who, through their competence, hard work, solidarity, cooperation and support, have enabled the company to achieve consistent growth.

Your Directors recognize and appreciate the efforts and hard work of all employees of the Company and their continued contribution to its progress.

For and on behalf of the Board of Directors

Anurradha Prasad

Place : Noida Chairperson cum

Date : May 30, 2013 Managing Director


Mar 31, 2010

The Directors are pleased to present their 17th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the financial year ended March 31, 2010.

FINANCIAL RESULTS

(Rupees in Lacs)

Particulars 2009-10 2008-09

Total Income 3996.79 6079.88

Profit before depreciation and financial charges 1194.82 1640.79

Financial charges 125.85 51.09

Cash Profit 1089.18 1642.19

Depreciation 1010.75 1296.70

Profit before Tax 58.22 292.99

Provision for Tax 53.99 142.34

Profit after Tax 4.23 150.64

Proposed Dividend (%) NIL NIL

PERFORMANCE REVIEW

During the year under review, your Company went through the transformation phase. Many of the most popular shows discontinued in the previous year and altogether new programming was introduced keeping in mind the changing tastes of the audience. This period saw the phasing out of old shows and creation of fresh shows based on newly ideated content, where development activity took primacy over marketing and sales. Owing to this and an urge to create new and innovative software, your Company saw a dip in revenues. During the financial year under review the total revenue of your Company has been Rs. 3996.79 Lacs compared to Rs. 6079.88 Lacs previous year. Cash profit has been Rs. 1089.18 Lacs as compared to Rs. 1642.19 Lacs previous year.

Television Software:

The content business holds the unique distinction of producing programmes across genre for a range of channels. Ganga-Agni Pariksha Jeevan ki is running successfully on Colors and gaining on TRPs. With prestigious contracts in hand, and a few more programmes lined up for launch, Studio24 seems poised for a very healthy financial year. A daily fiction show based on DevGanga story is scheduled to be released on Star Suvarna in Kannada. However we are confident of leading the recovery this year. While the medium to long-term outlook remains very strong, there is a sense of caution that has set into the industry in recent times owing to the global economic slowdown. However, empirical data suggests that television consumption increases during recessionary periods and the cable industry is often much lesser affected as compared to other cyclical categories. Our belief is that the challenges posed by these times would see the emergence of new business models and would lead media companies to change, innovate and re-examine their existing strategy.

iSOMES

Your Company has been providing media education through its media school iSOMES (International School of Media & Entertainment Studies) in collaboration with Missouri School, U.S.A. iSOMES also entered into a Memorandum of Understanding with FTII, Pune for exchange of curricula and faculty wherein the students of both the institutes have benefited immensely.

iSOMES is now affiliated to the Guru Jambeshwar University, Hissar and offers full time graduate courses in Broadcast Journalism. We are also planning to expand the media education by reaching out to other states of India through franchisee model. One such branch has recently been inaugurated in Lucknow. The revenues from iSOMES have shown healthy improvement during this financial year.

DIVIDEND

The Directors are of the view that resources of the Company need to be conserved for its future growth plans and hence do not recommend any dividend for the financial year ended March 31, 2010.

Broadcasting

News24, a 24 hours National Hindi free to air news channel which was launched by your Company through its subsidiary B.A.G. Newsline Network Limited has been very well received by the audiences. It has consistently maintained around 7% market share and is available throughout India on cable and DTH platforms.

The performance of the channel has improved greatly. The revenues increased by 55.49 % during the year under review and the losses were reduced substantially by 55.58 % year on year.

E24 a 24 hours Bollywood Entertainment channel of your Company launched through its subsidiary B.A.G. Glamour Limited has also been growing at a rapid pace and has garnered healthy channel shares. Pitched as Bollywoods first news channel, E24 managed to attract audiences of various age groups and succeeded in creating a new genre in television entertainment.

The revenue of the channel saw a significant increase of 184.37% and losses were reduced by 60.53% year on year.

Radio

Your Company has 10 FM Radio licenses by the name of DHAMAAL24 at 106.4 FM through its subsidiary B.A.G. Infotainment Limited in the cities of Hissar, Karnal, Patiala, Shimla, Muzaffarpur, Ranchi, Jabalpur, Jalgaon, Dhule and Ahmadnagar. All the stations have become operational during the period under review. The response of the listeners has been extremely encouraging and our programming has a distinct edge over its competitors. The revenue curve has seen an upward trend in comparison to previous years and we have been able to cut down on losses. The revenue saw an increase of 29.75% and losses were reduced by 20.59% year on year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and Articles of Association of the Company, Mr. Rajeev Shankar and Dr. Anuradha Mishra, liable to retire by rotation at the ensuing Annual General Meeting and they being eligible, have offered themselves for re-appointment. Your Board of Directors recommends their re-appointment.

Brief resume of the above Directors, nature of their expertise in specific functional areas and names of companies in which they hold the directorship and the membership/ chairmanship of committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are given in the section on Corporate Governance in the Annual Report elsewhere.

Mr. Nalin Satyakam Kohli on the Board of your Company resigned from the Directorship with effect from January 30, 2010. The Board places on record its sincere appreciation of the active involvement and support of Mr. Nalin Satyakam Kohli during his tenure.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed chapter on "Management Discussion and Analysis Report" pursuant to clause 49 of the Listing Agreement is given elsewhere in the Annual Report separately.

CORPORATE GOVERNANCE

Your Company believes that the essence of Corporate Governance lies in the phrase "Your Company". It is "Your" Company because it belongs to you- the Shareholders. The Chairperson and Directors are "Your" fiduciaries and trustees. Their objective is to take the business forward in such a way that it maximizes "Your" long term value. Your Company is committed to benchmark itself with global standards in all areas including appropriate standards for Good Corporate Governance. Towards this end, an effective Corporate Governance System has been put in place in the Company, which also ensures that the provisions of revised Clause 49 of the Listing Agreement are duly complied with. A report on Corporate Governance along with Auditors Certificate on its compliance is annexed hereto.

CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the Companys website.

Board Members and Senior Management personnel have affirmed compliance with the Code and a separate declaration to this effect is annexed to the Corporate Governance Report.

LISTING

The shares of your Company continue to be listed on National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and Delhi Stock Exchange Limited (DSE). Global Depository Receipts are listed on the Stock Exchange at Luxembourg. The Annual Listing fee for the Financial Year 2010-2011 has already been paid to all the above Stock Exchanges.

FIXED DEPOSITS

During the year under review, the Company has not accepted any deposit under Section 58A and Section 58AA of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975.

DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby state and confirm- 1. That in preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. That the Directors have selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of profit and loss of the Company for that year;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the accounts for the financial year ended March 31, 2010 have been prepared on a "going concern" basis.

SUBSIDIARY COMPANIES

As required under the provisions of Section 212 of the Companies Act, 1956, the audited accounts together with Directors Report and Auditors Report of its subsidiary companies, B.A.G. Infotainment Limited, B.A.G. Glamour Limited and B.A.G. Newsline Network Limited are appended and form part of the Annual Report. The statement pursuant to Section 212 of the Companies Act, 1956 is attached. The Company has one more subsidiary namely B.A.G. Animation Private Limited. The subsidiary is immaterial to the group by virtue of insignificant investment as a whole and nil turnover hence not included in the Consolidated Financial Statement as per the Accounting Standard-21.

As required by Accounting Standard-21 issued by the Institute of Chartered Accountants of India, the financial statements of the Company reflecting the Consolidation of the Accounts of its subsidiary companies to the extent of its equity holding are included in this Annual Report.

The Company is presenting consolidated accounts of its subsidiary companies prepared in accordance with Indian Generally Accepted Accounting Practices (GAAP) and the same are attached herewith. The accounts of the subsidiary companies have been separately audited as per Generally Accepted Accounting Principles/ Practices.

PREFRENTIAL ALLOTMENT

Convertible Equity Warrants

During the year under review your Company had issued and allotted 15,000,000 convertible warrants pursuant to Section 81(1A) of the Companies Act, 1956 as per the approval accorded by the Members of the Company at the Annual General Meeting dated August 26, 2009 to M/s ARVR Communications Private Limited (Formerly known as Anu Films and Communications Private Limited), a promoter group Company on Preferential basis with an option to get allotted one equity share per equity warrant before expiry of eighteen months from the date of allotment.

Under the first trench 7,140,000 warrants have been converted into equity shares in the financial year 2009-10 on November 28, 2009 at a price of Rs. 17.30 per shares including a premium of Rs. 15.30 per share and were listed for trading on all the Stock Exchanges where the shares of the Company are listed.

GLOBAL DEPOSITORY RECEIPT (GDR):

In order to augment long- term resources to strengthen financial position and to meet growth objectives, the Company had allotted 3,700,000 Global Depository Receipts (GDRs) at an offer price of US $ 4.71 per GDR and successfully listed on the Luxembourg Stock Exchange on February 15, 2010. The Company had raised US $ 17,427,000 through GDR issue. The Company issued 37,000,000 underlying Equity Shares of Re. 2/- each against the said GDRs in the ratio of 1:10 (for 1 GDR to 10 underlying Equity Shares) in favour of BNY Mellon the Custodian of GDRs.

EMPLOYEE STOCK OPTION SCHEME (ESOP)

Pursuant to the Special Resolution passed by the Members at the Extra-Ordinary General Meeting held on February 13, 2007 and in principle approval from the Stock Exchanges, your Company has implemented an Employees Stock Option Scheme ("the BAG ESOP Scheme") to reward the employees of the Company and its subsidiaries for their performance and association with the Company and also to motivate them to contribute to the growth and profitability of the Company, whereby the Company planned to grant upto 10,000,000 options to eligible employees. In the previous year Company had granted 1,150,000 options to the eligible employees. Each option is exercisable for one equity share at a price of Rs. 13/- each fully paid up on payment to the Company on completion of vesting period as per the above scheme. During the year under review out of 1,150,000 options 105,000 options were converted into equity shares.

The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2010 are annexed herewith as Annexure I and forms part of this report.

AUDITORS

M/s Joy Mukherjee & Associates, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment. The

Company has received a certificate from the auditors to the effect that their re-appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956.



AUDITORS REPORT

All observations made in the Auditors Report and notes to the accounts are self explanatory and do not call for any further comments under section 217 of the Companies Act, 1956.

HUMAN RESOURCE

Your Directors would like to place on record their deep appreciation of all employees for rendering quality services to every constituent of the Company be its viewers, producers, regulatory agencies, creditors or shareholders. The unstinting efforts of the employees have enabled your Company to remain in the forefront of media and entertainment business.

PERSONNEL

Particulars of the employees as required to be disclosed under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended form part of this report and are attached herewith as Annexure-II.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

Your Company is not engaged in any manufacturing or processing activity, as such particulars required to be given in terms of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, regarding conservation of energy and technology absorption are not applicable.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, your Company has incurred expenditure in foreign currency to the extent of Rs. 10,258,492 as against Rs. 6,869,839 in the previous financial year.

Foreign Exchange earnings during the year were Nil as against Rs. 27,298,833 in the previous financial year.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their deep gratitude to the viewers, producers, vendors, investors and banks for their continued support during the year. Your Directors also wish to place on record their appreciation for the dedicated services rendered by the employees of the Company at all levels, who, through their competence, hard work, solidarity, cooperation and support, have enabled the Company to achieve consistent growth. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors

Place: Noida Anurradha Prasad Date : May 29, 2010 Chairperson &

Managing Director

 
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