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Notes to Accounts of BAG Films & Media Ltd.

Mar 31, 2015

Note-1

Corporate Information

The Company was incorporated on January 22, 1993. Its is one of the largest television content houses in India under the brand name " Studio 24 ".

2. As per Accounting Standard (AS)-17 issued by the Institute of Chartered Accountants of India, segment information has been provided in the Notes to Consolidated Financial Statements.

3. Provisions, Contingent Liabilities and Contingent Assets

Provisions

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The provisions are measured on an undiscounted basis.

Contingencies

Provision in respect of loss contingencies relating to claims, litigation, assessment, fines, penalties, etc. are recognised when it is probable that a liability has been incurred, and the amount can be estimated reliably.

Contingent Liabilities and Commitments

A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

4. Export Obligation

The Company has obtained license under the Export Promotion Credit Guarantee Scheme (EPCG Scheme) for importing capital goods at a concessional rate of custom duty against submission of undertaking to custom department. Under the terms of the EPCG Scheme, the company is required to export goods or services of at least Rs. 23,15,54,713/-, (Previous Year Rs. Rs. 36,43,94,715/-) within eight years from issue of EPCG Licenses.

5. The Company is engaged in business of Media and Entertainment . Such services are not capable of being expressed in any generic unit and hence, it is not possible to give the quantitative details required under paragraphs 5(viii)(c) of general instructions for preparation of the statement of profit and loss as per Schedule III to the Companies Act, 2013.

6. Supplementary statutory information required to be given pursuant to Clause 32 of the listing agreement, in respect of the loans given Interest free Loans and Advances in the nature of Loan given to wholly owned foreign subsidiary :

7. Pursuant to Section 205C and other applicable provisions of Companies Act, 1956 (the corresponding provision in the Companies Act, 2013 have not been notified, and hence the earlier law is still applicable in respect of these provisions), Dividends that are unpaid/unclaimed for a period of seven years are required to be transferred to the Investor Education and Protection Fund administered by the Central Government and once unpaid / unclaimed dividend/application money for allotment of any securities and due for refund, is transferred to IEPF, no claim shall lie in respect thereof against the Company. To ensure maximum disbursement of unpaid/unclaimed dividend, the Company sends reminders to the concerned investors, before transfer of dividend to IEPF.

During the Year , the Company has transferred Rs. 77,879.80 (Previous Year Rs. 172,126.40) to Investor Education and Protection Fund. Unclaimed dividend of Rs 132,212.70 ( Previous Year 210,091) represent dividends not claimed for the financial year 2007-08.

8. Effective from April 1, 2014, the Company has revised useful lives of tangible fixed assets based on an independent evaluation. Accordingly , the carrying value of fixed assets as on that date, net of residual value , has been depreciated over the revised remaining useful lives. Further, an amount of Rs. 138.12 lakh representing the carrying value of assets, whose remaining useful life is Nil as at April1 2014 , has been charged to retained earning pursuant to provisions of Companies Act, 2013.

9. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 and hence disclosures Section 22 of The Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 regarding:

(a) Amount due and outstanding to suppliers as at end of accounting year;

(b) Interest paid during the year;

(c) Interest payable at the end of the accounting year; and

(d) Interest accrued and unpaid at the end of the accounting year have not been given.

10. Schedule III of the Companies Act, 2013 has become effective from April1, 2014 for the preparation of financial statements. Previous year's figures have been regrouped/reclassified to be comparable with currents year's classification/disclosures.


Mar 31, 2014

1. Contingent Liabilities and Commitments

(Amount in Rs.) As at March As at March 31, 2014 31, 2013

Contingent liabilities

a) Claims against the Company Nil Nil not acknowledged as debt

b) Guarantees

- to Bank 6,06,000 6,06,000

(Guarantee given to bank amounting to Rs. 6,06,000 (Previous year Rs. 6,06,000) secured by fxed deposit.)

- on behalf of subsidiaries companies

News24 Broadcast India 27,00,000 27,00,000 Limited

(Guarantee given to The President, New Custom House EPCG Cell, New Delhi amounting to Rs. 27,00,000 (Previous year Rs. 27,00,000).

E24 Glamour Limited 9,80,00,000 9,80,00,000

(Corporate Guarantee given amounting to Rs. 9,80,00,000 to Dena Bank, M-36, Cannaught C ircus, New Delhi-110001 (Previous year Rs. 9,80,00,000).

Skyline Radio Network limited 9,90,13,000 9,90,13,000 (formerly known as Dhamaal24 Radio Network limited)

(Corporate Guarantee given amounting to Rs. 9,85,00,000 to Dena Bank, M-36, Cannaught Circus, New Delhi-110001 (Previous year Rs. 9,85,00,000) and Guarantee given to Ministry of Information and Broadcasting, New Delhi amounting to Rs. 5,13,000 (Previous year Rs. 5,13,000).

- on behalf of Other

ARVR Education Society 25,00,00,000 25,00,00,000 (Formerly Known as B.A.G. Education Society).

Corporate Guarantees given in favour of Yes bank by creating charge on land situated at Plot No. HS- 20, Sector-B-7, Greater Noida amounting to Rs. 25,00,00,000 (Previous year Rs. 25,00,00,000)

c) Other money for which the Nil Nil Company is contingently liable

2. Export Obligation

The Company has obtained license under the Export Promotion Credit Guarantee Scheme (EPCG Scheme) for importing capital goods at a concessional rate of custom duty against submission of undertaking to custom department. Under the terms of the EPCG Scheme, the company is required to export goods or services of at least Rs. 36,43,94,715/- (Previous Year Rs. 43,52,16,860/-) within eight years from issue of EPCG Licenses.

3. Employee Benefits as per Accounting Standard 15 (revised) ''Employees Benefits'', the disclosures of employee benefits are given below:

a) Defend Contribution Plans :

Contribution to Defined Contribution Plan recognized as expense for the year is as under:

Employer''s Contribution to Provident Fund : Rs. 1,87,428 (Previous Year Rs. 1,80,806)

Employer''s Contribution to ESI : Rs. 34,466 (Previous Year Rs. 39,617)

Defend Benefit Plans:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee bereft entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

4. Previous year figures are regrouped, rearranged or recast wherever necessary to make them comparable with the current year figures.


Mar 31, 2013

NOTE-1

Corporate Information

The Company is running its production house under the brand name of "Studio-24". Programmes like, Sapno ke bhawar me, Baba Aisa Var Dhundoo and Madhubala amongst others cover a gamut of genres in producing of television programmes. The Company continues its focus on commissioned programmes and bagged contracts from prestigious channels. The Company also plans to focus on sponsored programmes.

2. Disclosure under Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 regarding Preferential Issue of Shares:

3. The fi nancial disclosures as per Accounting Standard -27 issued by Institute of Chartered Accountants of India for the 50:50 Joint venture Sieun & B.A.G. Animation Private Limited of B.A.G. Films & Media Limited with Sieun Design Co. Limited of South Korea is given below.

4. During the year B.A.G. Films & Media Limited has given loans and advances to its following subsidiaries:

i. News24 Broadcast India Limited: Rs. Nil (Maximum Amount outstanding during the year Rs. Nil) (Previous year Rs. 1,377,908,776).

ii. E24 Glamour Limited : Rs. Nil (Maximum Amount outstanding during the year Rs. Nil) (Previous year Rs. 269,403,815).

iii. Dhamaal24 Radio Network Limited : Rs. Nil (Maximum Amount outstanding during the year Rs. Nil) (Previous year Rs. 345,058,317).

iv. BAG Network Limited (Foreign subsidiary): Rs. 1,15,454 (Maximum Amount outstanding during the year Rs. 1,15,454) (Previous year Rs. Nil). The company BAG Network Limited became subsidiary of B.A.G. Films & Media Limited by virtue of control of the composition of the board of director in the company. The Company has not yet subscribed to the shares in wholly owned subsidiary i.e BAG Network Limited and there is nil transaction in this subsidiary.

v. BAG Animation Private Limited: Rs. 1,54,714 (Maximum Amount outstanding during the year Rs. 1,54,714) (Previous year Rs. Nil).

5. As per Accounting Standard (AS)-17 issued by the Institute of Chartered Accountants of India, segment information has been provided in the Notes to Consolidated Financial Statements.

6. Earlier year adjustment (net) of Rs. 9,78,250 (Previous Year Rs. 19,73,544) in Reserves and Surplus Account

7. Employee Stock Option Scheme

The Company instituted the Employee Stock option scheme – ("the BAG ESOP Scheme") to grant equity to the eligible employees of the company and its subsidiaries. "the BAG ESOP Scheme" has been approved by the Shareholders in their Extra-Ordinary General Meeting held on February 13, 2007, for grant of 10,000,000 options representing one share for each option. The equity shares covered under the scheme shall vest over a period of fi ve years. Pursuant to the scheme, the ESOP compensation committee on July 30, 2008 granted 1,150,000 options to employees of the B.A.G. Films & Media Limited and its subsidiaries.

Accordingly the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs. 49,18,928 as an expense during the year. Further, the Liability Outstanding as at March 31, 2013 in respect of Employees Stock Options Outstanding is Rs. 96,77,250. The balance deferred compensation expense Rs. 16,39,643 will be amortized over the remaining vesting period of Options.

The movement in the options granted to employees during the year ended March, 31 2013 under the "the BAG ESOP Scheme" is as below:

9. Contingent Liabilities and Commitments

(Amount in Rs.) As at March As at March 31, 2013 31, 2012

Contingent liabilities

a) Claims against the Company Nil Nil not acknowledged as debt

b) Guarantees

- to Bank 6,06,000 6,06,000

- on behalf of subsidiaries companies

10. Loans & Advances

Interest free loans or advances given to subsidiary Companies are shown under the head Loans & Advances where there is no repayment schedule and are re-payable on demand. The loans have been given to fund the fi nancial obligations for attaining the objective of media expansion plans of the Company.

11. Export Obligation

The Company has obtained license under the Export Promotion Credit Guarantee Scheme (EPCG Scheme) for importing capital goods at a concessional rate of custom duty against submission of undertaking to custom department. Under the terms of the EPCG Scheme, the company is required to export goods or services of at least Rs. 43,52,16,860 (Previous Year Rs. Rs. 43,52,16,860) within eight years from issue of EPCG Licenses.

12. Employee Benefi ts as per Accounting Standard 15 (revised) ''Employees Benefi ts'', the disclosures of employee benefi ts are given below:

a) Defi ned Contribution Plans :

Contribution to Defi ned Contribution Plan recognized as expense for the year is as under:

Employer''s Contribution to Provident Fund : Rs. 1,80,806 (Previous Year Rs. 1,87,905)

Employer''s Contribution to ESI : Rs.39,617 (Previous Year Rs. 67,704)

Defi ned Benefi t Plans:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefi t entitlement and measures each unit separately to build up the fi nal obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

13. Previous year fi gures are regrouped, rearranged or recast wherever necessary to make them comparable with the current year fi gures.


Mar 31, 2012

A. Term loan from banks:

Term Loan of Rs. 25 Crores taken from Punjab National Bank, Sector-63, Noida Branch secured by pari passu charge on Land and building of B.A.G Films & Media Limited situated at FC-23, Sector-16-A, Film City, Noida and repayble in 24 Quarters of equal instalment starting from July 01, 2012. Term Loan of Rs. 19.95 Crores taken from Punjab National Bank, Sector-63, Noida Branch secured by pari passu charge on Land and building of B.A.G Films & Media Limited situated at FC-23, Sector-16-A, Film City, Noida. and repayble in 12 Quarters of equal instalment starting from October 01, 2011.

B. Vehicle Loans from banks:

Vechicle Loan taken from ICICI Bank, HDFC Bank and Bank of India secured by vehicle financed by bank and repayble as per repayment schedule issued by the Bank.

C. Security Deposit:

Security deposit received against letting out of building premises for office use and repayment as per agreed terms of the contract.

Disclouser in relation to default in repayment of loans and interest in respect of the following:

A. Term loans from banks:

No default has been made in repayment of Principal and interest on term loan during the financial year ending 31 March 2012

B. Vehicle Loans from banks:

No default has been made in repayment of Principal and interset on vehicle loan during the financial year ending 31 March 2012

1. Guarantee given to bank amounting to Rs. 606,000 (Previous year Rs. 606,000) secured by fixed deposit.

2. Guarantee given on behalf of subsidiary company, News24 Broadcast India Limited (Formerly known as B.A.G. Newsline Network Limited) amounting to Rs. 2,700,000 (Previous year Rs. 2,700,000).

3. Guarantee given on behalf of subsidiary company, Dhamaal24 Radio Network Limited (Formerly known as B.A.G. Infotainment Limited) amounting to Rs. 513,000 (Previous year Rs. 513,000).

Corporate Information

The Company is running its production house under the brand name of "Studio-24". Programmes like Lootery Dulhan, Wanted, Sapno ke bhawar me, Baba Aisa Var Dhundoo and Madhubala amongst others cover a gamut of genres in producing of television programmes. The Company continue its focus on commissioned programmes and bagged contracts from prestigious channels. The Company also produced documentary films for various State Authorities and private organizations including Ministry of External Affairs. The Company also plans to focus on sponsored programmes.

1. Disclosure under Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 regarding Preferential Issue of Shares:

During the year under review your company has received balance 75% money against 5,000,000 Lacs share warrants issued at Rs. 17.70 per share warrant amounting to Rs. 66,375,000 and 25% upfront money towards 17,500,000 share warrant issued at Rs. 7.50 per share warrant amounting to Rs 32,812,500 as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

2. The financial disclosures as per Accounting Standard - 27 issued by Institute of Chartered Accountants of India for the 50:50 joint venture Sieun & B.A.G. Animation Private Limited of B.A.G. Films & Media Limited with Sieun Design Co. Limited of South Korea is given below.

3. During the year B.A.G. Films & Media Limited has given loans and advances to its following subsidiaries:

i. News24 Broadcast India Limited (Formerly known as B.A.G. Newsline Network Limited): Rs. 1,377,908,776 (Maximum Amount outstanding during the year Rs. 1,379,099,470) (Previous year Rs. 1,157,115,126).

ii. E24 Glamour Limited (Formerly known as B.A.G. Glamour Limited): Rs. 269,403,815 (Maximum Amount outstanding during the year Rs. 374,950,288) (Previous year Rs. 436,614,013).

iii. Dhamaal24 Radio Network Limited (Formerly known as B.A.G. Infotainment Limited): Rs. 345,058,317 (Maximum Amount outstanding during the year Rs. 648,229,531) (Previous year Rs. 402,032,065).

4. As per Accounting Standard (AS)-17 issued by the Institute of Chartered Accountants of India, segment information has been provided in the Notes to Consolidated Financial Statements.

5. Earlier year adjustment (net) of Rs. 1,973,544 (Previous Year Rs. 1,860,726) in Reserves and Surplus Account

6. Employee Stock Option Scheme

The Company instituted the Employee Stock option scheme - ("the BAG ESOP Scheme") to grant equity to the eligible employees of the company and its subsidiaries, "the BAG ESOP Scheme" has been approved by the Shareholders in their Extra-Ordinary General Meeting held on February 13, 2007, for grant of 10,000,000 options representing one share for each option. The equity shares covered under the scheme shall vest over a period of five years. Pursuant to the scheme, the ESOP compensation committee on July 30, 2008 granted 1,150,000 options to employees of the B.A.G. Films & Media Limited and its subsidiaries.

Accordingly the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs. 5,983,305 as an expense during the year. Further, the Liability Outstanding as at March 31, 2012 in respect of Employees Stock Options Outstanding is Rs. 9,677,250. The balance deferred compensation expense Rs. 6,558,571 will be amortized over the remaining vesting period of Options.

a) Guarantee given to bank amounting to Rs. 6,06,000 (Previous year Rs. 6,06,000) secure by fixed deposit.

b) Guarantee given on behalf of subsidiaries:

i) Guarantee given on behalf of subsidiary company, News24 Broadcast India Limited (Formerly known as B.A.G. Newsline Network Limited) amounting to Rs. 2,700,000 (Previous year Rs. 2,700,000).

ii) Guarantee given on behalf of subsidiary company, Dhamaal24 Radio Network Limited (Formerly known as B.A.G. Infotainment Limited) amounting to Rs. 513,000 (Previous year Rs. 513,000).

iii) Guarantee given on behalf of subsidiary company, News24 Broadcast India Limited (Formerly known as B.A.G. Newsline Network Limited) amounting to Rs. 50,000,000 (Previous year Rs. 50,000,000)

- by pledging 514,286 shares held by B.A.G. Films & Media Limited in the News24 Broadcast India Limited (Formerly known as B.A.G. Newsline Network Limited).

iv) Guarantee given on behalf of subsidiary company, E24 Glamour Limited (Formerly known as B.A.G. Glamour Limited) amounting to Rs. 4,00,00,000 (Previous year Rs. 4,00.00,000) by pledging 411,430 shares held by B.A.G. Films & Media Limited in the E24 Glamour Limited (Formerly known as B.A.G. Glamour Limited).

c) Corporate Guarantees given in favour of bank by creating charge on land situated at Plot No. HS-20, Sector-B-7, Greater Noida amounting to Rs.25.00.00.000 (Previous year Rs. 18,00,00,000) on behalf of ARVR Education Society(Formerly Known as B.A.G. Education Society).

d) During the year Canara bank took over the Cash credit facility, limit of Rs. 12,00,00,000 from State bank of India. The facility was sanctioned by the bank on the basis of 1 st charge on Land and Building of B.A.G Films & Media limited situated at FC-23, Sector-16-A, Film City, Noida.

e) During the year B.A.G Films & Media limited availed facility of Rs. 19,95.28,900 (Previous Year Rs.25.00.00.000 from Punjab National Bank) from Punjab. National Bank Limited in the form of term loan. The sanction given by bank on the basis of pari passu charge on Land and

building of B.A.G Films & Media Ltd. situated at FC-23, Sector-16-A, Film City, Noida.

7. Loans & Advances

Loans or advances given to subsidiary Companies are shown under the head Loans & Advances where there is no repayment schedule and are re-payable on demand, Interest has been charged from the subsidiaries against loans given. The loans have been given in the best interest of the Company to fund the financial obligations for attaining the objective of media expansion plans of the Company.

8. Export Obligation

The Company has obtained license under the Export Promotion Credit Guarantee Scheme (EPCG Scheme) for importing capital goods at a concessional rate of custom duty against submission of undertaking to custom department. Under the terms of the EPCG Scheme, the company is required to export goods or services of at least Rs. 43,52,16L,860 (Previous Year Rs. 43,52,16,860) within eight years from issue of EPCG Licenses.

9. Employee Benefits as per Accounting Standard 15 (revised) 'Employees Benefits', the disclosures of employee benefits are given below:

a) Defined Contribution Plans :

Contribution to Defined Contribution Plan recognized as expense for the year is as under:

Employer's Contribution to Provident Fund : Rs. 1,87,905 (Previous Year Rs. 210,938)

Employer's Contribution to ESI : Rs. 67,704 (Previous Year Rs.86,216)

Defined Benefit Plans:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

The estimated rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market The ahovo information is certified by the actuary.

10. Additional information required to be given pursuant to Part II of Schedule VI of the Companies Act, 1956 is as follows:-

i. The aggregate managerial remuneration under section 198 read with section 309 of the Companies Act. 1956 to the directors:

iii. The Company is in the business of media and entertainment, which is not subject to any license; hence licensed capacity is not given.

11. There is no amount outstanding to be credited to Investor Education and Protection Fund.

Note: The above information regarding the small scale undertakings and Micro, Small and Medium Enterprise has been determined to the extent such parties have been identified on the basis of the information available with the Company.

2. The Company has not made any provision for cess payable u/s 441A of the Companies Act, 1956. The said provision shall be made as and when the requisite notification is issued by the Central Government in this regard.

3. Earnings Per Share (EPS) is Computed in Accordance with Accounting Standard-20:-

12. Previous year figures are regrouped, rearranged or recast wherever necessary to make them comparable with the current year figures.


Mar 31, 2011

1. The Company has valued its investment in equity shares of Mukta Arts Limited at cost. The current market price of the said shares is Rs. 171,500 (Previous year Rs. 172,500). This being a long-term investment, the Company considers this fall in value as temporary.

2. Disclosure under Chapter XIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 regarding Preferential Issue of Shares:

During the year under review company has converted 7,860,000 warrants at a price of Rs. 17.30 each including a premium of Rs. 15.30 per warrant into equity shares. These equity shares allotted by above conversion have been listed for trading on the stock exchanges.

During the year under review your company has issued 5,000,000 warrants at a price of Rs 17.70 each including premium of Rs 15.70 per warrant 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 September 4, 2010 to 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. The Company received 25% application money against the same as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 mentioned above amounting to Rs. 22,125,000.

3. During the year under review the Company has discharged its liability towards the guarantee given to IDBI for its subsidiary B.A.G. Infotainment Limited for buying back the investment into equity of the amount of Rs 20,000,000/- at the discounted yield of 13.50% per annum by making a payment of Rs 3,37,59,534/-. The stake of the company into its subsidiary B.A.G Infotainment Limited increases by 20,00,000 equity shares to 1,22,00,000 equity shares.

4. During the year B.A.G. Films & Media Limited has given loans and advances to its following subsidiaries:

i) B.A.G. Newsline Network Limited: Rs. 1,140,229,590 (Maximum Amount outstanding during the year Rs. 1,157,115,126) (Previous year Rs. 560,871,911).

ii) B.A.G. Glamour Limited: Rs. 370,050,287 n(Maximum Amount outstanding during the year Rs. 436,614,013) (Previous year Rs. 230,583,520).

(iii) B.A.G. Infotainment Limited: Rs. 370,050,287 (Maximum Amount outstanding during the year Rs. 402,032,065) (Previous year Rs. 170,196,904).

6. The unsecured loan of Rs. 35,773,974 given to its subsidiary company B.A.G Infotainment Limited along with interest as at March 31, 2011 has been converted into share application account for proposed investment in equity share of B.A.G. Infotainment limited.

7. As per Accounting Standard (AS)-17 issued by the Institute of Chartered Accountants of India, segment information has been provided in the Notes to Consolidated Financial Statements.

8. Earlier year adjustment (net) of Rs. 1,860,726 (Previous Year Rs. 2,672,974) in Reserves and Surplus Account includes:-

i) Rs. 2,012,376 on account of short provisioning of Fringe Benefit Tax and unclaimed dividend.

ii) Rs.151, 650 on account of excess provisioning of Income Tax.

9. Employee Stock Option Scheme

The Company instituted the Employee Stock option scheme - ("the BAG ESOP Scheme") to grant equity to the eligible employees of the company and its subsidiaries. "the BAG ESOP Scheme" has been approved by the Shareholders in their Extra-Ordinary General Meeting held on February 13, 2007, for grant of 10,000,000 options representing one share for each option. The equity shares covered under the scheme shall vest over a period of five years. Pursuant to the scheme, the ESOP compensation committee on July 30, 2008 granted 1,150,000 options to employees of the B.A.G. Films & Media Limited and its subsidiaries.

Accordingly the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs.2,707,500 as an expense during the year. Further, the Liability Outstanding as at March 31, 2011 in respect of Employees Stock Options Outstanding is Rs.8,664,000. The balance deferred compensation expense Rs. 6,091,876 will be amortized over the remaining vesting period of Options.

11. Commitments & Contingent Liabilities

a) Guarantee given to bank amounting to Rs. 6,06,000 (Previous year Rs. 6,06,000) secure by fixed deposit.

b) Guarantee given on behalf of subsidiaries:

i) Guarantee given on behalf of subsidiary company, B.A.G. Newsline Network Limited amounting to Rs. 27,00,000 (Previous year Rs. 27,00,000).

ii) Guarantee given on behalf of subsidiary company, B.A.G. Infotainment Limited amounting to Rs. 5,13,000 (Previous year Rs. 5,13,000).

iii) Guarantee given on behalf of subsidiary company, B.A.G. Newsline Network Limited amounting to Rs. 5,00,00,000 (Previous year Rs. 5,00,00,000) by pledging 514,286 shares held by B.A.G. Films & Media Limited in the B.A.G. Newsline Network Limited.

iv) Guarantee given on behalf of subsidiary company, B.A.G. Glamour Limited amounting to Rs. 4,00,00,000 (Previous year Rs. 4,00,00,000) by pledging 411,430 shares held by B.A.G. Films & Media Limited in the B.A.G. Glamour Limited.

c) Corporate Guarantees given in favour of bank by creating charge on land situated at Plot No. HS- 20, Sector-B-7, Greater Noida amounting to Rs. 180,000,000 (Previous year Rs. 132,500,000) on behalf of B.A.G. Education Society.

d) During the year B.A.G Films & Media Limited. availed facility of Rs.25,00,00,000 (Previous Year Rs. 19,00,00,000 from State Bank of India) from Punjab National Bank Limited in the form of term loan. The sanction given by bank on the basis of proposed pari passu charge on Land and building of B.A.G Films & Media Limited situated at FC- 23, Sector-16-A, Film City, Noida.

12. Loans & Advances

Loans or advances given to subsidiary Companies are shown under the head Loans & Advances where there is no repayment schedule and are re-payable on demand. Interest has been charged from the subsidiaries against loans given. The loans have been given in the best interest of the Company to fund the financial obligations for attaining the objective of media expansion plans of the Company.

13. Export Obligation

The Company has obtained license under the Export Promotion Credit Guarantee Scheme (EPCG Scheme) for importing capital goods at a concessional rate of custom duty against submission of undertaking to custom department. Under the terms of the EPCG Scheme, the company is required to export goods or services of at least Rs. 43,52,16,860 (Previous Year Rs. Rs. 43,52,16,860) within eight years from issue of EPCG Licenses.

14. Operating Lease

The Company has given broadcasting equipments under operating leases. These lease agreements are normally renewable on expiry. The rental income on operating leases is credited to profit and losses account

15. Employee Benefits as per Accounting Standard 15 (revised) 'Employees Benefits', the disclosures of employee benefits are given below:

a) Defined Contribution Plans :

Contribution to Defined Contribution Plan recognized as expense for the year is as under:

Employer's Contribution to Provident Fund : Rs. 210,938 (Previous Year Rs. 236,893)

Employer's Contribution to ESI : Rs. 86,216 (Previous Year Rs. 24,472)

Defined Benefit Plans:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

16. Additional information required to be given pursuant to Part II of Schedule VI of the Companies Act, 1956 is as follows: -

iii) The Company is in the business of media and entertainment, which is not subject to any license; hence licensed capacity is not given.

iv) Activity in Foreign Currency

vi) Information pursuant to other provisions of Part -II of Schedule -VI to The Act, is either nil or not applicable to the Company for the year.

17. There is no amount outstanding to be credited to Investor Education and Protection Fund.

18. Related Parties Disclosures as per Accounting Standard (AS-18) are as follows: 1. List of Related Parties

Name Relationship

Ms.Anurradha Prasad Chairperson cum Managing Director

Mr.Rajiv Shukla Relative of Chairperson cum Managing Director

Mr.Rajeev Shankar Relative of Chairperson cum Managing Director

B.A.G. Infotainment Limited Subsidiary

B.A.G. Newsline Network Limited Subsidiary

B.A.G. Glamour Limited Subsidiary

B.A.G Animation Private Limited Subsidiary

Sieun and B.A.G. Animation Private Limited Joint Venture

B.A.G. Business Ventures Limited Associates

Approach Films & Television Enterprises over which KMP Limited are able to exercise significant influence

ARVR Communications Private Limited Promoter Company

19. a). There are no dues to small scale industrial undertakings (SSI) outstanding for more than 30 days.

b). Amount overdue as on March 31, 2011 to Micro, Small and Medium Enterprise on account of principle account, together with interest aggregates to Rs. Nil. (Previous year Rs.Nil).

Note: The above information regarding the small scale undertakings and Micro, Small and Medium Enterprise has been determined to the extent such parties have been identified on the basis of the information available with the Company.

20. The Company has not made any provision for cess payable u/s 441A of the Companies Act, 1956. The said provision shall be made as and when the requisite notification is issued by the Central Government in this regard.

21. Previous year figures are regrouped, rearranged or recast wherever necessary to make them comparable with the current year figures.


Mar 31, 2010

1. Pursuant to the resolution passed by the Members of the Company at the Extraordinary General Meeting dated December 11, 2009 Company increased the Authorized Share Capital from Rs. 300,000,000 to Rs. 400,000,000.

2. The Company has valued its investment in equity shares of Mukta Arts Limited at cost. The current market price of the said shares is Rs. 290,750 (Previous year Rs. 172,500). This being a long-term investment, the Company considers this fall in value as temporary.

3. Disclosure under Chapter XIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 regarding Preferential Issue of Shares:

a) During the year under review your Company had issued and allotted 15,000,000 convertible warrants at a price of Rs. 17.30 each including a premium of Rs. 15.30 per warrant 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. The Company received 25% upfront money against the same as per the SEBI (Issue of Capital and Disclosure

Requirements) Regulations, 2009 mentioned above amounting to Rs. 64,875,000.

Out of total 15,000,000 Convertible warrants, 7,140,000 warrants have been converted into equity shares during the financial year 2009-10 dated November 28, 2009. The equity shares issued by above conversion have been listed for trading on the Stock Exchanges

b) The Company Issued 3,700,000 GDR at a price of USD 4.71 each convertible into 37,000,000 Equity Shares of Rs. 2 each aggregating to USD 17,427,000. One GDR represents 10 fully paid equity shares and number of outstanding GDR as on March 31, 2010 was 3,700,000.

4. Loans and Advances to others include :- During the year B.A.G. Films & Media Limited has given loans and advances to its following subsidiaries:

a) B.A.G. Infotainment Limited: Rs.170,198,537 (Maximum Amount outstanding during the year Rs. 170,198,537) (Previous year Rs. 137,196,904).

b) B.A.G. Newsline Network Limited: Rs. 560,871,911 (Maximum Amount outstanding during the year Rs. 560,871,911) (Previous year Rs. 273,499,586).

c) B.A.G. Glamour Limited: Rs. 230,583,520 (Maximum Amount outstanding during the year Rs. 230,583,520) (Previous year Rs. 113,152,793).

5. As per Accounting Standard (AS)-17 issued by the Institute of Chartered Accountants of India, segment information has been provided in the Notes to Consolidated Financial Statements.

6. Earlier year adjustment (net) of Rs. 2,672,974 (Previous Year Rs. 5,961,230) in Reserves and Surplus Account includes:- a) Rs. 2,604,720 on account of excess provisioning of Income Tax & Wealth Tax.

b) Rs. 68,254 on account of prior period adjustment for unclaimed Dividend.

7. Commitments & Contingent Liabilities

a) Guarantee given to bank amounting to Rs. 606,000 (Previous year Rs. 68,576,000) secure by fixed deposit.

b) Guarantee given on behalf of subsidiaries:

i) Guarantee given on behalf of subsidiary Company, B.A.G. Newsline Network Limited amounting to Rs. 2,700,000 (Previous year Rs. 2,700,000).

ii) Guarantee given on behalf of subsidiary Company, B.A.G. Infotainment Limited amounting to Rs. 513,000 (Previous year Rs. 513,000).

iii) Guarantee given on behalf of subsidiary Company, B.A.G. Newsline Network Limited amounting to Rs. 50,000,000 (Previous year Rs. 50,000,000) by pledging 514,286 shares held by B.A.G. Films & Media Limited in the B.A.G. Newsline Network Limited.

iv) Guarantee given on behalf of subsidiary Company, B.A.G. Glamour Limited amounting to Rs. 40,000,000 (Previous year Rs. 40,000,000) by pledging 411,430 shares held by B.A.G. Films & Media Limited in the B.A.G. Glamour Limited.

c) Corporate Guarantees given to bank by creating charge on land situated at Plot No. HS-20, Sector-B-7, Greater Noida amounting to Rs. 132,500,000 (Previous year Rs. 132,500,000) on behalf of B.A.G. Films Education Society.

d) During the year B.A.G Films & Media Limited availed facility of Rs.190,000,000 (Previous Year Rs. NIL.) from State Bank of India in the form of cash credit and term loan. The sanction given by bank on the basis of creating charge on Land and Building of B.A.G Films & Media Limited situated at FC-23, Sector-16-A, Film City, Noida.

e) Liability in respect of bills discounted with banks is Rs. Nil (Previous Year Rs. 22,686,256).

Employee Stock Option Scheme

The Company instituted the Employee Stock option scheme - ("the BAG ESOP Scheme") to grant equity to the eligible employees of the Company and its subsidiaries. "the BAG ESOP Scheme" has been approved by the Shareholders in their Extra-Ordinary General Meeting held on February 13, 2007, for grant of 10,000,000 options representing one share for each option. The equity shares covered under the scheme shall vest over a period of five years. Pursuant to the scheme, the ESOP compensation committee on July 30, 2008 granted 1,150,000 options to employees of the B.A.G. Films & Media Limited and its subsidiaries.

Accordingly the Company under the intrinsic value method has recognized the excess of the market price over the exercise price of the option amounting to Rs.2,707,500 as an expense during the year. Further, the Liability Outstanding as at March 31, 2010 in respect of Employees Stock Options Outstanding is Rs.11,642,250. The balance deferred compensation expense Rs. 8,799,376 will be amortized over the remaining vesting period of Options.

8. Loans & Advances

Loans or advances given to subsidiary Companies are shown under the head Loans & Advances where there is no repayment schedule and are re-payable on demand. Interest has been charged from the subsidiaries against loans given. The loans have been given in the best interest of the Company to fund the financial obligations for attaining the objective of media expansion plans of the Company.

9 . Export Obligation

The Company has obtained license under the Export Promotion Credit Guarantee Scheme (EPCG Scheme) for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds. Under the terms of the EPCG Scheme, the Company is required to export goods or services of at least Rs. 435,216,860 (Previous Year Rs. 435,216,860) within eight years from issue of EPCG License.

10. Operating Lease

The Company has given broadcasting equipments under operating leases. These lease agreements are normally renewable on expiry. The rental income on operating leases is credited to profit and losses account

11. Employee Benefits

As per Accounting Standard 15 (revised) Employees Benefits, the disclosures of employee benefits are given below:

a) Defined Contribution Plans :

Contribution to Defined Contribution Plan recognized as expense for the year is as under:

Employers Contribution to Provident Fund : Rs. 236,893 (Previous Year Rs. 301,750)

Employers Contribution to ESI : Rs. 24,472/- (Previous Year Rs. 27,883)

Defined Benefit Plans:

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

12. There is no amount outstanding to be credited to Investor Education and Protection Fund.

13. Related Parties Disclosures as per Accounting Standard (AS-18) are as follows:

i) List of Related Parties:

Name Relationship

Ms. Anurradha Prasad Chairperson cum Managing Director

Mr. Rajiv Shukla Relative of Chairperson cum Managing Director

Mr. Rajeev Shankar Relative of Chairperson cum Managing Director

B.A.G. Infotainment Limited Subsidiary

B.A.G. Newsline Network Limited Subsidiary

B.A.G. Glamour Limited Subsidiary

B.A.G Animation Private Limited Subsidiary

Sieun and B.A.G. Animation Private Limited Joint Venture

B.A.G. Business Ventures Limited Associates

Approach Films & Television Limited Enterprises over which KMP are able to exercise significant influence

ARVR Communications Private Limited Promoter Company (Formerly known as Anu Films and Commun- ications Private Limited )

14. a). There are no dues to small scale industrial undertakings (SSI) outstanding for more than 30 days.

b). Amount overdue as on March 31, 2010 to Micro, Small and Medium Enterprise on account of principle account, together with interest aggregates to Rs. Nil. (Previous year Rs.Nil).

Note: The above information regarding the small scale undertakings and Micro, Small and Medium Enterprise has been determined to the extent such parties have been identified on the basis of the information available with the Company.

15. The Company has not made any provision for cess payable u/s 441A of the Companies Act, 1956. The said provision shall be made as and when the requisite notification is issued by the Central Government in this regard.

16. Previous year figures are regrouped, rearranged or recast wherever necessary to make them comparable with the current year figures.

 
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