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Notes to Accounts of Network 18 Media & Investments Ltd.

Mar 31, 2016

1. Obligation on long term, non-cancellable operating leases

The Company has taken various office premises under operating lease agreements. The lease term of these leases ranges between 1 to 5 years and they are renewable by mutual consent. There are no sub leases or restrictions imposed by lease arrangements. There are certain lease agreements with escalation clauses during the initial lease term. Lease payments during the period recognized in the Statement of Profit and Loss amount to Rs, 773.83 lakhs (previous year Rs, 699.33 lakhs).

The Company has issued letters of financial support to certain subsidiary companies - TV18 Home Shopping Network Limited, Web18 Software Services Limited and Info media Press Limited.

Claims against the Company not acknowledged as debts

Demand for stamp duty on transfer of property - Rs, 3,463.96 lakhs (previous year Rs, 86.77 lakhs).

Contingent payments under agreements for sale of subsidiaries - Rs, 169.93 lakhs (previous year Rs, 169.93 lakhs).

Other litigations

Victor Fernandes and others (‘plaintiffs’) had filed a derivative action suit before the Bombay High Court against Raghav Bahl, TV18 and other TV18 group entities alleging that all business opportunities undertaken by the Network18 Group should be routed through e-Eighteen.com Limited. The plaintiffs have valued their claim in the suit at Rs, 3,11,406.00 lakhs. The suit is currently pending. Victor Fernandes has also filed an appeal before the Hon''ble Supreme Court against an order of Securities Appellate Tribunal regarding grant of listing approval by NSE for the rights issue.

Based on the legal advice by the legal counsel, management is of the view that the above claim made by the plaintiffs is unlikely to succeed and has accordingly made no provisions for the same in the financial statements.

a. The Company’s Employee Stock Option Plans (ESOPs) framed in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘SEBI Guidelines'') which have been approved by the Board of Directors and the Shareholders are listed below. Schemes listed at serial (i) to (iv) were established as mirror schemes of the then existing ESOP schemes in Television Eighteen India Limited, in terms of the Scheme of Arrangement.

i) The Network18 Employees Stock Option Plan 2004 (ESOP 2004)

ii) The Network18 Senior Employees Stock Option Plan 2004 (Senior ESOP 2004)

iii) The Network18 Long Term Retention Employees Stock Option Plan 2005 (Long Term Retention ESOP 2005)

iv) The Network18 Employees Stock Option Plan 2007 (ESOP 2007)

The Company has adopted the intrinsic value method as promoted by the SEBI (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India for measuring the cost of the options granted.

There are no transactions of loans and advances to subsidiaries, associate firms/ companies in which directors are interested other than as disclosed above. The above loans and advances have been given for business purposes/ corporate general purposes.

The aforesaid loanee company has not made any investment in the shares of the Company.

2. Barter transactions

The Company enters into barter transactions, which are recorded at the fair value of consideration receivable or payable. The statement of profit and loss for the year 31 March 2016 reflects revenue from barter transactions of'' nil (previous year Rs, 43.80 lakhs) and expenditure of Rs, nil (previous year Rs, 43.80 lakhs) being the fair value of barter transactions provided and received.

3. The Company has foreign currency receivables aggregating to Rs, 516.30 lakhs (previous year Rs, 523.82 lakhs) which are outstanding for more than nine months and foreign currency payables aggregating to Rs, 24.67 lakhs (previous year Rs, 33.05 lakhs) which are outstanding for more than six months. The Company is in the process of dealing with the statutory implications of these delays and the management is of the view that the same would not have a material impact on these financial statements.

The Company has unabsorbed depreciation and brought forward losses under the Income-tax Act, 1961. In the absence of virtual certainty of having sufficient taxable income against which deferred tax assets can be realised, no deferred tax assets has been recognized in the balance sheet.

4. Details of loans given, investments made and guarantees given covered u/s 186(4) of the Act.

Loans and corporate guarantees given and Investments made, are given under respective heads.

5. As per Accounting Standard (AS) 17 on “Segment Reporting”, segment information has been provided under the Notes to Consolidated Financial Statements.

6. Previous year figures have been regrouped, wherever necessary, to confirm to current year presentation


Mar 31, 2015

1. Contingent liabilities and other commitments Rs. In lakhs

Particulars As at 31 March As at 31 March 2015 2014

Capital commitments 185.41 250.71

Corporate guarantees given in connection with borrowings of subsidiaries

TV18 Broadcast Limited (Formerly ibn18 Broadcast Limited) 986.00 2,322.00

TV18 Home Shopping Network Limited 7,833.06 3,524.31

Total 8,819.06 5,846.31

The Company has issued letters of financial support to certain subsidiary companies – TV18 Home Shopping Network Limited, Moneycontrol.com India Limited, Web18 Software services Limited and Infomedia Press Limited.

Claims against the company not acknowledged as debts

Demand for stamp duty on transfer of property Rs. 86.77 lakhs (previous year Rs. 86.77 lakhs) Contingent payments under agreements for sale of subsidiaries- Rs. 169.93 Lakhs (previous year Rs. 169.93 lakhs)

Other litigations

Victor Fernandes and others ('plaintiffs') had filed a derivative action suit before the Bombay High Court against Raghav Bahl, TV18 and other TV18 group entities alleging that all business opportunities undertaken by the Network18 Group should be routed through e-Eighteen.com Limited. The plaintiffs have valued their claim in the suit at Rs. 311,406.00 lakhs. The suit is currently pending. Victor Fernandes has also filed an appeal before the Supreme court against an order of Securities Appellate Tribunal regarding grant of listing approval by NSE for the rights issue.

2. Employee Stock Option Plans

a. The Company's Employee Stock Option Plans (ESOPs) framed in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ('SEBI Guidelines') which have been approved by the Board of Directors and the Shareholders are listed below. Schemes listed at serial (i) to (iv) were established as mirror schemes of the then existing ESOP schemes in Television Eighteen India Limited, in terms of the Scheme of Arrangement.

i) The Network18 Employees Stock Option Plan 2004 (ESOP 2004)

ii) The Network18 Senior Employees Stock Option Plan 2004 (Senior ESOP 2004)

iii) The Network18 Employees Stock Option Plan 2005 (ESOP 2005)

iv) The Network18 Long Term Retention Employees Stock Option Plan 2005 (Long Term Retention ESOP 2005)

v) The Network18 Employees Stock Option Plan C 2007 (ESOP C 2007)

vi) The Network18 Employees Stock Option Plan 2007 (ESOP 2007)

3. Due to Micro, Small and Medium enterprises

The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro, small and medium enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at year ended 31 March 2015 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

4. Barter transactions

The Company enters into barter transactions, which are recorded at the fair value of consideration receivable or payable. The statement of profit and loss for the year 31 March 2015 reflects revenue from barter transactions of Rs. 43.80 lakhs (for the year ended 31 March 2014 Rs. 167.82 lakhs) and expenditure of Rs. 43.80 lakhs (for the year ended 31 March 2014 Rs. 167.82 lakhs) being the fair value of barter transactions provided and received

5. The Company has foreign currency receivables aggregating to Rs. 523.82 lakhs (previous year Rs.546.90 lakhs which are outstanding for more than nine months and foreign currency payables aggregating to Rs.33.05 lakhs (previous year Rs. 20.48 lakhs) which are outstanding for more than six months. The Company is in the process of dealing with the statutory implications of these delays. As the aforementioned is currently not ascertainable, the same shall be provided at the earliest practicable.

6. Continuing and discontinuing operations

Pursuant to the business transfer agreement dated 27 February 2013 the Yellow Pages and AskMe business undertakings, forming part of the 'Publishing' segment of the Company, have been disposed off to GetitInfoservices Private Limited. The following statement shows the revenue and expenses of continuing and discontinuing operations:

7. The Company is in the process of addressing the matters specified in Circular No. CIR/CFD/DIL/E/2013 dated 17 January, 2013 read together with Circular No. CIR/CFD/DIL/7/2013 dated May 13, 2013 and Circular No. CIR/CFD/POLICYCELL/14/ 2013 dated November 29, 2013 issued by the Securities and Exchange Board of India in respect of certain shares held by Network18 Group Senior Professional Welfare Trust.

8. As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

9. Previous year figures have been regrouped, wherever necessary, to confirm to current year presentation.


Mar 31, 2014

1. Description of the rights, preferences and restrictions attached to each class of shares

Equity shares : The Company has only one class of equity shares having a face value of Rs. 5 per share. All the existing equity shares rank pari passu in all respects including but not limited to entitlement for dividend, bonus issue and rights issue. These equity shares are listed on the National Stock Exchange of India and the Bombay Stock Exchange Limited.

Preference shares : The preference shareholders were, subject to profitability and at the discretion of the Board of Directors, entitled to a cumulative annual dividend @ 5%. These preference shares carried preferential right in respect of dividends and also carried preferential right in regard to repayment of capital in case of winding up.

2. Shares reserved for issue under options and other commitments

As on 31 March 2014, 708,841 (1,182,712) Employees Stock Options were outstanding under the Employee Stock Option Plans of the Company. Each option would entitle the holder thereof to subscribe to one Equity Share of Rs. 5 each in the Company

3. Share forfeited

In the financial year 2009-10, 12,072 Partly Convertible Cumulative Redeemable Preference shares on which call money was unpaid were forfeited.

Note:

During the year 31 March 2013 based on accounting prescribed in the Infomedia scheme referred to in Note 1.2, the Company has fair valued its investment in Infomedia Press Limited (formerly Infomedia18 Limited) and debited Rs. 265,434,977 the resultant impact to the Securities Premium Account, which otherwise as per Accounting Standards would have been debited to the Statement of Profit and Loss. If the said amount would have been debited to the Statement of Profit and Loss instead of debiting the Securities premium account, the loss before tax for the year ended 31 March 2013 would have increased from Rs. 299,090,054 to Rs 564,525,031 representing a 89% increase and the balance in Securities Premium Account would have increased from Rs. 33,291,908,045 to Rs. 33,557,343,022 representing a 1% increase.

4. Contingent liabilities and other commitments

As at As at 31 March 2014 31 March 2013 (Rs.) (Rs.)

(i) Capital commitments 25,071,188 21,676,619

(ii) The Company has issued letters of financial support to certain subsidiary companies - E-18 Limited, Web18 Software Services Limited,Moneycontrol Dot com India Limited, TV Home shopping Network Limited and Infomedia Press Limited.

(iii) Corporate guarantees given in connection with borrowings of subsidiaries

TV18 Broadcast Limited (Formerly ibn18 Broadcast Limited) 232,200,000 457,992,716

TV18 Home Shopping Network Limited 352,431,343 500,000,000

B K Holdings Limited, Mauritius - 1,087,800,000

584,631,343 2,045,792,716

(iv) Claims against company not acknowledged as debts: -Demand for stamp duty on transfer of property Rs 8,677,617

(v) Contingent payments under agreements for sale of subsidiaries- Rs. 16,993,598 (previous year Rs. 16,993,598).

vi) Income tax demand in relation to acquisition of subsidiaries Rs 13,212,381 (previous year Rs 13,212,381)

Other litigations:

Mr. Victor Fernandes and others ("plaintiffs") had, on 25 August 2006, filed a suit as derivative action on behalf of e-Eighteen.com Limited before the High Court of Bombay against Mr. Raghav Bahl, Television Eighteen India Limited (TV18, now merged with the Company) and other TV18 group entities. The plaintiffs are minority shareholders of e-Eighteen.com Limited and have alleged that Mr. Raghav Bahl, TV18, ICICI Global Opportunities Fund and e-Eighteen. com Limited had entered into a subscription cum shareholders agreement dated 12 September 2000 under which Mr. Raghav Bahl and TV18 had, inter alia, undertaken that any opportunity offered to them shall only be pursued or taken up through e-Eighteen.com Limited or its wholly owned subsidiaries. The plaintiffs have alleged that Mr. Raghav Bahl and TV18 have promoted and developed various businesses through various entities which should have, under the aforesaid agreement, rightfully been undertaken by e-Eighteen.com Limited or its wholly owned subsidiaries. The plaintiffs have alleged that by not doing so Mr. Raghav Bahl and TV18 have caused monetary loss to e-Eighteen.com Limited as well as to the plaintiffs. The plaintiffs have valued their claim in the suit at Rs. 31,140,600,000 and have, inter alia, prayed that Mr. Raghav Bahl, TV18 and other TV18 group entities be ordered to transfer to e-Eighteen.com Limited all their businesses, activities and ventures along with all assets and intellectual property.

The plaintiffs had filed a notice of motion on 18 September 2006 seeking an interim relief. A reply had been filed with the Bombay High Court on 14 November 2006. The said notice of motion was dismissed on 8 August 2008 against which the plaintiffs have filed an appeal before the division bench of the Bombay High Court. The said appeal was dismissed by the High Court on 21 September 2011.

Mr. Victor Fernandes has also filed an appeal before the Hon''ble Supreme court against the order of Hon''ble Securities Appellate Tribunal. The appeal relates to the grant of listing approval by NSE for the rights issue.

Based on the legal advice by the legal counsel, management is of the view that the above claim made by the plaintiffs is unlikely to succeed and has accordingly made no provisions for the same in the financial statements.

5. Employee Stock Option Plans

a. The Company''s Employee Stock Option Plans (ESOPs) framed in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI Guidelines") which have been approved by the Board of Directors and the Shareholders are listed below. Schemes listed at serial (i) to (vii) were established as mirror schemes of the then existing ESOP schemes in Television Eighteen India Limited, in terms of the Scheme of Arrangement.

i) The Network18 Employees Stock Option Plan 2002 (ESOP 2002)

ii) The Network18 Employees Stock Option Plan 2004 (ESOP 2004)

iii) The Network18 Senior Employees Stock Option Plan 2004 (Senior ESOP 2004)

iv) The Network18 Employees Stock Option Plan 2005 (ESOP 2005)

v) The Network18 Long Term Retention Employees Stock Option Plan 2005 (Long Term Retention ESOP 2005)

vi) The Network18 Employees Stock Option Plan C 2007 (ESOP C 2007)

vii) The Network18 Employees Stock Option Plan 2007 (ESOP 2007)

6. Due to Micro and Small Enterprises

The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2014 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

7. Barter transactions

The Company enters into barter transactions, which are recorded at the fair value of consideration receivable or payable. The statement of profit and loss for the year 31 March 2014 reflects revenue from barter transactions of Rs 16,781,698 (for the year ended 31 March 2013 Rs 73,968,497) and expenditure of Rs 16,781,698 (for the year ended 31 March 2013 Rs 79,441,768) being the fair value of barter transactions provided and received

8. The Company has foreign currency receivables aggregating to Rs. 54,689,694 (previous year Rs. 54,766,913 which are outstanding for more than nine months and foreign currency payables aggregating to Rs.2,047,652 (previous year Rs. 1,910,268) which are outstanding for more than six months. The Company is in the process of dealing with the statutory implications of these delays. As the aforementioned in currently not ascertainable the same shall be provided at the earliest practicable.

50. Pursuant to the Scheme of arrangement between Infomedia Press Limited and the Company, approved by the High Court of Delhi on 22 May 2012 (refer note 1.2), all properties and assets, rights and licenses, registrations (including Registrar of Newspapers of India) of the demerged undertaking stand transferred to the Company. Pending approval from Registrar of Newspapers of India for transfer of titles in its name, all the purchases of paper are being made by Infomedia Press Limited on behalf of the Company.

9. The Company is in the process of addressing the matters specified in Circular No. CIR/CFD/DIL/E/2013 dated January 17, 2013 read together with Circular No. CIR/CFD/DIL/7/2013 dated May 13, 2013 and Circular No. CIR/CFD/ POLICYCELL/14/2013 dated November 29, 2013 issued by the Securities and Exchange Board of India in respect of certain shares held by Network18 Group Senior Professional Welfare Trust.

10. Previous year figures have been regrouped, wherever necessary, to confirm to current year presentation.


Mar 31, 2013

1 Background and Scheme of arrangement

1.1 Background

Network18 Media & Investments Limited ("the Company") was incorporated as SGA Finance and Management Services Private Limited in 1996. The name was changed to Network 18 Fincap Private Limited in April 2006. The Company was converted into a public company on 20 October 2006. The name was further changed to its current name on 1 December 2007.

1.2 Scheme of arrangement

(i) The Board of Directors of the Company, on 7 July 2010 approved a Scheme of Arrangement ("the Scheme") with an overall objective of simplifying the corporate structure of the Company and its subsidiaries, associates and joint ventures (together referred to as the "Network18 Group"). The Scheme was approved by Hon''ble High Court of Delhi and made effective on 10 June 2011 with an appointed date of 1 April 2010. As a consequence of the Scheme, "Business News Operations" comprising of ''CNBC TV18'' and ''CNBC Awaaz'' channels and teleport business of Television Eighteen India Limited ("TV18"), a subsidiary of the Company, has been transferred to another subsidiary - ibn18 Broadcast Limited (now known as TV18 Broadcast Limited). The remaining TV18 (post demerger of "Business News Operations" of TV18) along with its investments stands merged with the Company. Further, in consideration of the merger of the residual TV18 with the Company, on 23 June 2011, the Company had issued 23,695,044 equity shares to the shareholders of TV18 (in the ratio of 13 equity shares of Rs. 5 for every 100 equity shares in TV18 of Rs. 5).In addition, in accordance with the Scheme, ''the Web Undertakings'' of Web18 Software Services Limited and Television Eighteen Commoditiescontrol.com Limited, Care Websites Private Limited, RVT Investments Private Limited and Network18 India Holdings Private Limited have been merged into the Company. The remaining TV18, RVT Investments Private Limited and Network 18 India Holdings Private Limited primarily held investments in other companies. The ''web undertaking'' of Web18 Software Service Limited operates certain websites. Television Eighteen Commodities control.com Limited and Care Websites Private Limited did not carry out any significant business operations.

(ii) The Board of Directors of the Company, on 7 July 2010, announced and approved another Scheme of Arrangement (''the Infomedia Scheme'') between Infomedia Press Limited (formerly Infomedia 18 Limited ("Infomedia 18")) and the Company and their respective shareholders and creditors. As per the Infomedia Scheme, the Business Directories business, the New Media business and the Publishing business of Infomedia18 have demerged into the Company while the Printing Press business of Infomedia 18 continued to remain with Infomedia18. The Infomedia Scheme was approved by the Hon''ble High Court of Delhi on 22 May 2012 and made effective on 1 June 2012 with an appointed date of 1 April 2010.

Further, in consideration of the demerger of the Business Directories business, the New Media business and the Publishing business of Infomedia18 into the Company, on 19 June 2012, the Company had issued 3,679,356 equity shares to the shareholders of Infomedia18 (in the ratio of 14 equity shares of Rs. 5 for every 100 equity shares in Infomedia 18 of Rs. 10), The demerged undertaking of Infomedia 18 was engaged in publication of Yellow Pages (Business Directories), special interest magazines and operating certain websites.

The above referred schemes of arrangement have been accounted for under the pooling of interests method as modified for the provisions of respective schemes of arrangement. The financial impact of these is as follows:

Note: The Company also issued 11,586,782 equity shares to Network 18 Media Trust in respect of shares held by the Company in Television Eighteen India Limited (refer note 14)

2. Basis of preparation

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the generally accepted accounting principles (GAAP) in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 to the extent applicable and in accordance with the provisions of the Companies Act, 1956, ("the Act") as adopted consistently by the Company.

3. Related party disclosures

a. List of related parties

i. Direct subsidiaries

- Television Eighteen Mauritius Limited

- Capital18 Fincap Private Limited

- Television Eighteen Media and Investments Limited

- Network 18 Holdings Limited, Mauritius (domicile changed from Cayman Islands to Mauritius with effect from 19 April 2012 vide certificate of registration dated 7 August 2012)

- Digital 18 Media Limited

- RRB Investments Private Limited

- Newswire18 Limited (upto 27 December 2012)

- Setpro18 Distribution Limited

- TV18 Broadcast Limited

- Infomedia Press Limited

- Television Eighteen India Limited (upto 10 June 2011)

- Network18 India Holdings Private Limited (upto 10 June 2011)

ii. Subsidiary companies of subsidiaries

- BK Holdings Limited, Mauritius

- Namono Investments Limited, Cyprus

- TV 18 UK Limited

- Capital 18 Limited, Mauritius

- Webchutney Studio Private Limited

- RRK Finhold Private Limited

- RVT Finhold Private Limited

- Greycells 18 Media Limited

- Colosceum Media Private Limited

- Stargaze Entertainment Private Limited

- Web 18 Holdings Limited, Cyprus (de-registered from Cayman Islands and get registered in Cypus w.e.f 25 April 2013)

- E-18 Limited, Cyprus

- Web 18 Software Services Limited

- e - Eighteen.com Limited

- Moneycontrol Dot Com India Limited

- ibn18 (Mauritius) Limited

- AETN18 Media Private Limited

- RVT Media Private Limited

- TV18 HSN Holdings Limited, Cyprus

- TV18 Home Shopping Network Limited

- Blue Slate Media Private Limited

- IndiaCast Media Distribution Private Limited (formerly Sun18 Media Services North Private Limited)

- IC Media Distribution Services Private Limited

- Capital18 Acquisition Corporation, Cayman Islands (upto 28 September 2012)

- Juxt Consult Research and Consulting Private Limited (upto 31 October 2012)

- Big Tree Entertainment Private Limited

- IndiaCast UK Limited

- IndiaCast US Limited

- RVT Investments Private Limited (upto 10 June 2011)

- Television Eighteen Commoditiescontrol.com Limited (upto 10 June 2011)

iii. Associates and joint ventures of the subsidiaries

- Viacom18 Media Private Limited

- IBN Lokmat News Private Limited

- Ubona Technologies Private Limited

- Reed Infomedia India Private Limited

- 24 X 7 Learning Private Limited

- Viacom 18 US Inc.

- Roptonal Limited, Cyprus

- Viacom 18 Media (UK) Limited

- The Indian Film Company Limited, Guernsey

- The Indian Film Company (Cyprus) Limited

- Wespro Digital Private Limited

- IFC Distribution Private Limited

iv. Key Management Personnel

- Raghav Bahl (Also exercises control by virtue of having a substantial interest in the voting power of the Company)

v. Relatives of Key Management Personnel (with whom transactions have been undertaken during the year)

- Vandana Malik

vi. Entities over which persons listed above are able to exercise significant influence/control

(with whom transactions have been undertaken during the period/balance at the end of the year)

- Network 18 Publications Limited

- VT Softech Private Limited

- Adventure Marketing Private Limited

- Watermark Infratech Private Limited

- Colorful Media Private limited

- RB Media Holdings Private Limited

- RB Holdings Private Limited

- Web18 Securities Private Limited

- BK Media Mauritius Private Limited

- Network18 Group Senior Professional Welfare Trust

- Network18 Employees Welfare Trust

- B K Media Private Limited

Estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Defined contribution plan

The Company has contributed Rs. 40,204,741 (previous year Rs. 38,654,877) to Contribution to provident fund and employees'' state insurance.

Other long term employee benefits

The Company, along with its subsidiary company, TV18 Broadcast Limited, has jointly established an Employee Welfare Plan dated 2 February 2009 for the benefit of their existing and future employees and to administer the same, a Trust named Network18 Group Senior Professional Welfare Trust has been constituted under the Indian Trusts Act, 1881 vide Trust Deed dated 19 February 2009.

The Employee Welfare Plan provides that any accretion to the corpus of the Trust (like dividends, profit on sale of investments, interest income, etc.) will be utilized for the benefit of beneficiaries upon occurrence of certain specific events. It further provides that the amount of benefit to be provided out of such accretion will be at the discretion of the trustees.

During the year ended 31 March 2013 and 31 March 2012, there were no net accretions to the corpus of the aforementioned Trust and accordingly no liability or plan assets have been provided/recognized in these financial statements.

4. Obligation on long term, non-cancellable operating leases

The Company has taken various office premises under operating lease agreements. The lease term of these leases ranges between 1 to 5 years and they are renewable by mutual consent. There are no sub leases or restrictions imposed by lease arrangements. There are certain lease agreements with escalation clauses during the initial lease term. Lease payments during the period recognized in the statement of profit and loss amount to - Rs 195,336,226 (Rs. 194,415,789)

5. Managerial remuneration paid, up to 31 March 2013, by the Company amounting to Rs. 26,388,400 (31 March 2012- Rs 20,100,400) is in excess of the limits prescribed under the Companies Act, 1956 ("the Act"). The Company is in the process of obtaining the necessary approvals as per the Act.

6. Employee Stock Option Plans

a. The Company''s Employee Stock Option Plans (ESOPs) framed in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI Guidelines") which have been approved by the Board of Directors and the Shareholders are listed below. Schemes listed at serial (i) to (vii) were established as mirror schemes of the then existing ESOP schemes in Television Eighteen India Limited, in terms of the Scheme of Arrangement.

i) The Network 18 Employees Stock Option Plan 2002 (ESOP 2002)

ii) The Network 18 Employees Stock Option Plan 2004 (ESOP 2004)

iii) The Network 18 Senior Employees Stock Option Plan 2004 (Senior ESOP 2004)

iv) The Network 18 Employees Stock Option Plan 2005 (ESOP 2005)

v) The Network 18 Long Term Retention Employees Stock Option Plan 2005 (Long Term Retention ESOP 2005)

vi) The Network 18 Employees Stock Option Plan C 2007 (ESOP C 2007)

vii) The Network 18 Employees Stock Option Plan 2007 (ESOP 2007)

7. Due to Micro and Small Enterprises

The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2013 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

8. Barter transactions

The Company enters into barter transactions, which are recorded at the fair value of consideration receivable or payable. The statement of profit and loss for the year 31 March 2013 reflects revenue from barter transactions of Rs 73,968,497 (for the year ended 31 March 2012 Rs 78,930,412) and expenditure of Rs 79,441,768 (for the year ended 31 March 2012 Rs 78,294,251) being the fair value of barter transactions provided and received.

9. Pursuant to the business transfer agreement dated 27 February 2013 the Yellow Pages and AskMe business undertakings, forming part of the ''Publishing'' segment of the Company, have been disposed off to Getit Infoservices Private Limited. As at 31 March 2013, the carrying amount of such assets and liabilities of discontinuing operations which were not disposed off was Rs 7,597,686 (previous year Rs 138,190,345) and Rs 96,959,325 (previous year Rs 366,643,490) respectively. The following statement shows the revenue and expenses of continuing and discontinuing operations:

10. The Board of Directors, at their meeting held on 3 January 2012 decided to raise Rs. 27,000,000,000 by issuing shares on rights basis for, inter alia (a) Investment in subsidiary, TV18 Broadcast Limited (b) Repayment/prepayment of certain loans, redemption of Secured Optionally Fully Convertible Debentures, redemption of Preference shares and repayment of public deposits and (c) General corporate purposes. Pursuant to the approval by the Securities and Exchange Board of India (SEBI) for the Rights Issue, the Issue was opened on 18 September 2012 and closed on 04 October 2012. The Issue was fully subscribed. The Company has allotted 899,873,930 equity shares on 12 October 2012 at a price of Rs. 30 per share (face value of Rs. 5 and securities premium of Rs. 25) and the new shares started trading from 16 October 2012 in the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The status for the utilisation of total proceeds of Rs. 26,996,217,900 from the Rights Issue of the Company is set out below:

11. The Company is in the process of addressing the matters specified in circular no. CIR/CFD/DIL/3/2013 dated 17 January 2013 issued by the Securities and Exchange Board of India (''SEBI'') in respect of certain shares held by Network18 Group Senior Professional Welfare Trust.

12. Previous year figures have been regrouped, wherever necessary, to confirm to current year presentation.


Mar 31, 2012

1.1 Background

Network18 Media & Investments Limited ("the Company") was incorporated as SGA Finance and Management Services Private Limited in 1996. The name was changed to Network 18 Fincap Private Limited in April 2006.

The Company was converted into a public company on 20 October 2006. The name was further changed to its current name on 1 December 2007.

1.2 Scheme of arrangement

(i) The Board of Directors of the Company, on 7 July 2010 approved a Scheme of Arrangement ("the Scheme") with an overall objective of simplifying the corporate structure of the Company and its subsidiaries, associates and joint ventures (together referred to as the "Network18 Group"). The Scheme has been approved by Honble High Court of Delhi and made effective on 10 June 2011 with an appointed date of 1 April 2010. As a consequence of the Scheme, "Business News Operations" comprising of CNBC TV18 and CNBC Awaaz channels and teleport business of Television Eighteen India Limited ("TV18"), a subsidiary of the Company, has been transferred to another subsidiary - ibn18 Broadcast Limited (now known as TV18 Broadcast Limited). The remaining TV18 (post demerger of "Business News Operations" of TV18) along with its investments stands merged with the Company. Further, in consideration of the merger of the residual TV18 with the Company, on 23 June 2011, the Company had issued 23,695,044 equity shares to the shareholders of TV18 (in the ratio of 13 equity shares of Rs. 5 for every 100 equity shares in TV18 of Rs. 5). This represents 17% of the total issued shares of the Company. In addition, in accordance with the Scheme, the Web Undertakings of Web18 Software Services Limited and Television Eighteen Commoditiescontrol.com Limited, Care Websites Private Limited, RVT Investments Private Limited and Network18 India Holdings Private Limited have been merged into the Company. The remaining TV18, RVT Investments Private Limited and Network 18 India Holdings Private Limited primarily held investments in other companies. The web undertaking of Web18 Software Service Limited operates certain websites. Television Eighteen Commodities control.com Limited and Care Websites Private Limited do not carry out any significant business operations.

(ii) The Board of Directors of the Company, on 7 July 2010, announced and approved another Scheme of Arrangement (the Info media Scheme) between Info media 18 Limited ("Info media 18") and the Company and their respective shareholders and creditors. As per the Info media Scheme, the Business Directories business, the New Media business and the Publishing business of Infomedia18 shall be demerged into the Company while the Printing Press business of Info media 18 will continue to remain with Infomedia18. The Info media Scheme has been approved by the Honble High Court of Delhi on 22 May 2012 and made effective on 1 June 2012 with an appointed date of 1 April 2010.

Further, in consideration of the demerger of the Business Directories business, the New Media business and the Publishing business of Infomedia18 into the Company, on 19 June 2012, the Company had issued 3,679,356 equity shares to the shareholders of Infomedia18 (in the ratio of 14 equity shares of Rs. 5 for every 100 equity shares in Info media 18 of Rs. 10), This represents 2.5% of the total issued shares of the Company. The demerged undertaking of Info media 18 is engaged in publication of Yellow Pages (Business Directories), special interest magazines and operating certain websites.

The above referred schemes of arrangement have been accounted for under the pooling of interests method as modified for the provisions of respective schemes of arrangement. The financial impact of these is as follows:

Note: The Company also issued 11,586,782 equity shares to Network 18 Media Trust in respect of shares held by the Company in Television Eighteen India Limited (refer note 14)

2. Basis of Preparation

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with the generally accepted accounting principles (GAAP) in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 to the extent applicable and in accordance with the provisions of the Companies Act, 1956, ("the Act") as adopted consistently by the Company.

During the year ended 31 March 2012, the revised Schedule VI notified under the Act has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

Note:

Based on accounting prescribed in the Scheme referred to in Note 1.2, the Company has fair valued its assets and liabilities and debited Rs. 6,334,691,091 the difference between such fair values and the corresponding book values to the Securities Premium Account, which otherwise as per Accounting Standards would have been debited to the statement of Profit and Loss in the relevant previous years. If the said amount would have been debited to the Statement of Profit and Loss instead of debiting the Securities Premium Account, the loss for the year ended 31 March 2012 would have substantially increased from Rs. 1,919,305,397 to Rs 8,253,996,488 representing a 330% increase and the balance in Securities Premium Account would have substantially increased from Rs. 11,529,409,772 to Rs. 17,864,100,863 representing a 35% increase.

A. During the year ended 31 March 2011, Roptonal Limited, Cyprus ("Roptonal") a subsidiary of the Companys jointly controlled entity, Viacom18 Media Private Limited made a public offer for purchase of entire issued capital of The Indian Film Company Limited, Guernsey (TIFC). The Company and its subsidiary, Network18 Holdings Limited, Cayman Islands ("Network18 Holdings"), in their capacity as shareholders in TIFC accepted the public offer. Further, pursuant to an agreement between Roptonal and Network 18 Holdings, Network 18 Holdings has agreed to indemnify Roptonal against the amount, if any, by which the net cash generated by TIFC from its existing film library in respect of the period from the date on which the aforementioned public offer becomes unconditional up to 21 July 2014 is less than the net asset value of the film library as per the TIFCs therein mentioned accounts for the year ended 31 March 2010.

Network 18 Holdings has also agreed to indemnify Roptonal against certain Indian tax liabilities that may potentially arise in TIFC or Roptonal in respect of certain withholding tax recoveries stated in TIFCs financial statements and other taxes relating to the sale of Network 18 Holding shares in TIFC. The aforementioned agreement further provided that if Network18 Holdings does not undertake the indemnity obligations agreed in the agreement, the indemnity shall be provided by the Company.

During the year ended 31 March 2012, the Company carried out a fair valuation exercise of the aforementioned film library and accordingly provided an amount of Rs. 2,374,984,629 towards the said indemnity obligation. In accordance with the Companys agreement with Network18 Holdings, any foreign exchange fluctuations arising at the time of settlement of the aforementioned indemnity liability shall be borne by Network18 Holdings.

Note: During the year ended 31 March 2012, the Company has expensed off all accrued costs incurred up to 31 March 2011 in respect of business directories not completed and dispatched up to that date.

3. Related party disclosures a. List of related parties

i. Direct subsidiaries by virtue of majority shareholding

- Television Eighteen India Limited (up to 10 June 2011)

- Television Eighteen Mauritius Limited

- Capital18 Fincap Private Limited (formerly known as VT Holdings Private Limited)

- Television Eighteen Media and Investments Limited

- Network18 Holdings Limited, Cayman Islands

- Digital 18 Media Limited

- RRB Investments Private Limited

- NewsWire18 Limited

- Setpro18 Distribution Limited

- Network18 India Holdings Private Limited, (up to 10 June 2011)

ii. Direct subsidiaries by virtue of control of composition of the board of directors

- TV18 Broadcast Limited

- Info media Press Limited (formerly known as Info media 18 Limited)

iii. Subsidiary companies of subsidiaries

- BK Holdings Limited, Mauritius

- Namono Investments Limited, Cyprus

- TV 18 UK Limited

- Capital 18 Limited, Mauritius

- Capital 18 Acquisition Corporation, Cayman Islands

- Web chutney Studio Private Limited

- RRK Finhold Private Limited

- RVT Finhold Private Limited

- Greycells 18 Media Limited

- Colosceum Media Private Limited

- Stargaze Entertainment Private Limited

- Web 18 Holdings Limited, Cayman Islands

- E-18 Limited, Cyprus

- Web 18 Software Services Limited

- Big Tree Entertainment Private Limited

- e - Eighteen.com Limited

- Money control Dot Com India Limited

- ibn18 (Mauritius) Limited

- AETN18 Media Private Limited

- RVT Media Private Limited

- TV18 HSN Holdings Limited, Cyprus

- TV18 Home Shopping Network Limited

- Blue Slate Media Private Limited

- Juxt Consult Research and Consulting Private Limited

- RVT Investments Private Limited (up to 10 June 2011)

- Television Eighteen Commoditiescontrol.com Limited (up to 10 June 2011)

iv. Associates and joint ventures of the subsidiaries

- Viacom18 Media Private Limited.

- IBN Lokmat News Private Limited.

- Reed Infomedia India Private Limited

- Ubona Technologies Private Limited

- 24 X 7 Learning Private Limited

- Viacom 18 US Inc

- Roptonal Limited, Cyprus

- Viacom 18 Media (UK) Limited

- The Indian Film Company Limited, Guernsey

- The Indian Film Company (Cyprus) Limited

- IFC Distribution Private Limited

- Wespro Digital Private Limited

v. Key Management Personnel

- Raghav Bahl (Also exercises control by virtue of having a substantial interest in the voting power of the Company)

vi. Relatives of Key Management Personnel

- Ms .Subhash Bahl

- Ms. Ritu Kapur

- Ms. Vandana Malik

vii. Entities over which persons listed above are able to exercise significant influence/control (With whom transactions have been undertaken during the year)

- Network 18 Publications Limited

- VT Softech Private Limited

- Adventure Marketing Private Limited

- Watermark Infratech Private Limited

- Colorful Media Private limited

- RB Media Holdings Private Limited

- RB Holdings Private Limited

- Web18 Securities Private Limited

- BK Media Mauritius Private Limited

- Network18 Group Senior Professional Welfare Trust

- Network18 Employees Welfare Trust

- Indian International Film Advisors Private Limited

- Studio 18 UK Limited

- Studio 18 USA Limited

Defined contribution plan

The Company has contributed Rs. 36,495,422 (previous year Rs. 9,293,768) to Provident Fund.

Other long term employee benefits

The Company, along with its subsidiary company, TV18 Broadcast Limited, has jointly established an Employee Welfare Plan dated 2 February 2009 for the benefit of their existing and future employees and to administer the same, a Trust named Network18 Group Senior Professional Welfare Trust has been constituted under the Indian Trusts Act, 1881 vide Trust Deed dated 19 February 2009.

The Employee Welfare Plan provides that any accretion to the corpus of the Trust (like dividends, profit on sale of investments, interest income, etc.) will be utilized for the benefit of beneficiaries upon occurrence of certain specific events. It further provides that the amount of benefit to be provided out of such accretion will be at the discretion of the trustees.

During the year ended 31 March 2012 and 31 March 2011, there were no net accretions to the corpus of the aforementioned Trust and accordingly no liability or plan assets have been provided/recognized in these financial statements.

4 Obligation on long term, non-cancellable operating leases

The Company has taken various office premises under operating lease agreements. The lease term of these leases ranges between 11 months to 6 years and they are renewable by mutual consent. There are no sub leases or restrictions imposed by lease arrangements. There are no escalation clauses during the initial lease term. Lease payments during the period recognized in the statement of profit and loss amount to - Rs 194,415,789 (Rs. 22,003,782)

5. Contingent liabilities and other commitments

As at As at 31 March 2012 31 March 2011 (Rs.) (Rs.)

Capital commitments 125,551,672 122,600

The Company has issued letters of financial support to certain subsidiary companies - TV18 Home Shopping Network Limited, E-18 Limited (Cyprus) and Web18 Sof tware Services Limited.

Corporate guarantees given in connection with borrowings of subsidiaries

TV18 Broadcast Limited (Formerly Ibn18 Broadcast Limited) 3,419,600,000 1,670,000,000

TV 18 Home Shopping Network Limited - 20,000,000

Newswire 18 Limited - 220,000,000

Television Eighteen India Limited (now merged with the company) - 800,000,000

Info media Press Limited (formerly Infomedia18 Limited) - 850,000,000

B K Holdings Limited, Mauritius 2,174,300,000 1,786,000,000

5,593,900,000 5,346,000,000

Contingent payments under agreements for sale of subsidiaries- Rs. 16,993,598 (previous year Rs. 16,993,598).

Other litigations:

Mr. Victor Fernandez and other ("plaintiffs") had, on 25 August 2006, filed a suit as derivative action on behalf of e- Eighteen.com Limited before the High Court of Bombay against Mr. Raghav Bahl, Television Eighteen India Limited (TV18, now merged with the Company) and other TV18 group entities. The plaintiffs are minority shareholders of e-Eighteen.com Limited and have alleged that Mr. Raghav Bahl, TV18, ICICI Global Opportunities Fund and e- Eighteen.com Limited had entered into a subscription cum shareholders agreement dated 12 September 2000 under which Mr. Raghav Bahl and TV18 had, inter alia, undertaken that any opportunity offered to them shall only be pursued or taken up through e-Eighteen.com Limited or its wholly owned subsidiaries. The plaintiffs have alleged that Mr. Raghav Bahl and TV18 have promoted and developed various businesses through various entities which should have, under the aforesaid agreement, rightfully been undertaken by e-Eighteen.com Limited or its wholly owned subsidiaries. The plaintiffs have alleged that by not doing so Mr. Raghav Bahl and TV18 have caused monetary loss to e-Eighteen.com Limited as well as to the plaintiffs. The plaintiffs have valued their claim in the suit at Rs. 31,140.60 million and have, inter alia, prayed that Mr. Raghav Bahl, TV18 and other TV18 group entities be ordered to transfer to e-Eighteen.com Limited all their businesses, activities and ventures along with all assets and intellectual property.

The plaintiffs had filed a notice of motion on 18 September 2006 seeking an interim relief. A reply had been filed with the Bombay High Court on 14 November 2006. The said notice of motion was dismissed on 8 August 2008 against which the plaintiffs have filed an appeal before the division bench of the Bombay High Court. The said appeal was dismissed by the High Court on 21 September 2011.

Based on the legal advice by the legal counsel, management is of the view that the above claim made by the plaintiffs is unlikely to succeed and has accordingly made no provisions for the same in the financial statements.

6. Utilization of money raised through right issue

The Company had allotted 10,296,451 partly paid preference shares on rights basis to its equity shareholders during the year ended 31 March 2009. Out of this 10,284,379 partly paid preference shares were converted into fully paid up shares till 31 March 2012 upon receipt of full and final call money and balance 12,072 Partly paid preference shares have been forfeited in the Board Meeting dated 16 July 2009 for nonpayment of full and final call money amounting to Rs.1,207,200. The status of utilization of rights issue proceeds is set out below:

7. Managerial remuneration paid, up to 31 March 2012, by the Company amounting to Rs. 20,100,400 (31 March 2011- Rs 15,204,400) in excess of the limits prescribed under the Companies Act, 1956 ("the Act"). The Company is in the process of obtaining the necessary approvals as per the Act.

8. Employee Stock Option Plans

a. The Companys Employee Stock Option Plans (ESOPs) framed in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI Guidelines") which have been approved by the Board of Directors and the Shareholders are listed below. Schemes listed at serial (i) to (vii) were established as mirror schemes of the then existing ESOP schemes in Television Eighteen India Limited, in terms of the Scheme of Arrangement.

i) The Network 18 Employees Stock Option Plan 2002 (ESOP 2002)

ii) The Network 18 Employees Stock Option Plan 2004 (ESOP 2004)

iii) The Network 18 Senior Employees Stock Option Plan 2004 (Senior ESOP 2004)

iv) The Network 18 Employees Stock Option Plan 2005 (ESOP 2005).

v) The Network 18 Long Term Retention Employees Stock Option Plan 2005 (Long Term Retention ESOP 2005).

vi) The Network 18 Employees Stock Option Plan C 2007 ( ESOP C 2007)

vii) The Network 18 Employees Stock Option Plan 2007 ( ESOP 2007)

Note

During the year ended 31 March 2012, pursuant to the amalgamation of TV18 with the Company, 3,251,819 options issued by TV18 were converted into 422,736 options of the Company (in the ratio of 13 options of the Company for every 100 options of TV18).

The exercise price of these options was determined by the Remuneration Committee of the Company in their meeting held on 11 August 2011. The replacement of stock options of TV 18 with the stock options of the Company is a modification to the original grant. However, no incremental intrinsic value was determined as a result of such modification.

The Company has adopted the intrinsic value method as promoted by the SEBI Guidelines and the Guidance Note on Accounting for Employee Share Based Payment issued by the Institute of Chartered Accountants of India for measuring the cost of the options granted.

Had the Company used the fair value method in accordance with Black Scholes Model to determine employee stock compensation, its loss after tax and loss per share as reported would have changed to the amounts indicated below:

9. Due to Micro and Small Enterprises

The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

There are no transactions of loans and advances to subsidiaries, associate firms/ companies in which directors are interested other than as disclosed above.

There are no loans and advances in the nature of loans where there is no repayment schedule or repayment beyond seven years or no interest or interest below section 372A of the Companies Act 1956.

10. Barter transactions

During the year ended 31 March 2012, the Company had entered into barter transactions, which were recorded at the fair value of consideration receivable or payable. The statement of profit and loss for the year 31 March 2012 reflects revenue from barter transactions of Rs. 78,930,412 and expenditure of Rs.78,294,251 being the fair value of barter transactions provided and received.

11. The Board of Directors, at their meeting held on 3 January 2012 decided to raise Rs 27,000,000,000 by issuing shares on rights basis for, inter alia, (a) Investment in the Subsidiary, TV 18 Broadcast Limited (b) Repayment/ prepayment of certain loans, redemption of Secured Optionally Fully Convertible Debentures, redemption of Preference Shares and repayment of Public Deposits and (c) General Corporate Purposes. The Draft Letter of Offer for the aforesaid Rights Issue has been filed with Securities and Exchange Board of India ("SEBI") and the necessary approval is awaited. Further terms and conditions of the proposal of rights issue including the possible issue price and size, and other relevant details shall be decided by the Board, subject to necessary approval of SEBI and Stock Exchanges and other appropriate authorities, in consultation with, inter alia, the Lead Manager, Legal Advisor and Other Experts. The issue price shall not exceed Rs 60/- (Rupees Sixty Only) per equity share which will be fixed keeping in view the prevailing market conditions and in accordance with the applicable provisions of laws, rules, regulations and guidelines.


Mar 31, 2008

1. Background/Business

a. The company was incorporated as SGA Finance and Management Services Private Limited in 1996. The name was changed to Network 18 Fincap Private Limited in April 2006 . The company was converted into a Public Company on October 20, 2006. The name was further changed to Network18 Media & Investments Limited on December 1,2007.

b. The company is registered with the Reserve Bank of India as a Non Banking Finance Company and by virtue of its asset size, is classified as a Systemically Important Non Banking Financial Company

c. The company, as at March 31,2008 , (i) jointly with Network 18 India Holdings Private Limited holds 48.93 % of the issued capital of TV 18 and (ii) jointly with RVT Investments Private Ltd holds 56.50% of the issued capital of ibnl 8 Broadcast Limited (ibn18) (earlier known as Global Broadcast News Limited) .

The company also controls the composition of the Board of Directors of both TV 18 and ibn18.

d. The company entered into an agreement with Viacom 18 Media Private Limited (Viacom) (earlier known as MTV Networks Private Limited) for the transfer of its film business to Viacom The effective date of such transfer was November 6,2007. Amounts receivable from Viacom in this regard included (i) business consideration, and (ii) Net Current Assets at mutually agreed valuations.

e. During the year under review, the company was engaged in the business of Investments, Films (later transferred to Viacom 18 Media Private Limited - see (d) above) and Event Management.

2. Contingent Liabilities

a. Counter guarantees given in connection with borrowings of subsidiaries (Rs million)

Name of borrowing entity Current year Previous Year

ibn 18 Broadcast Limited 620 200 TV 18 Home Shopping Network Private Limited 250 - News Wire 18 India Private Limited 220 140 Television Eighteen India Limited 1750 1000 Capital 18 Limited, Mauritius (INR equivalent to USD 50 million) 2000 - BK Holdings Limited, Mauritius (INR equivalent to USD 60 million) 2400 -

b. In respect of market value of investments pledged in connection with loans availed by related parties Rs 17506.23 million (Rs 538.63 million)

c. The company has Guaranteed the investment of USD 40 Million in Viacom 18 Media Private Limited by BK Holdings Limited , Mauritius (Previous year Nil)

3. Equity Capital

During the year 618,860 Equity Shares of Rs 5/- each have been issued to the Network 18 Employees Welfare Trust pursuant to various Stock Option plans.

4. Secured Loans

a. The Debentures are secured against investments of the company in Mutual Funds . The entire amount is repayable within one year.

b. Facilities by way of Cash Credit and Term Loan are secured by exclusive charge over (i) current and movable assets (ii) Personal Guarantee of the Managing Director (iii) Escrow of all dividend flows from TV 18.

c. All loans are secured by the Pledge of Investments. One Loan is additionally secured by the pledge of mutual fund investments. Another loan of Rs 250 million is additionally secured by charge over current assets.

d. Vehicle loans are secured by the hypothecation of vehicles financed.

e. Amounts repayable within one year: 2,105.94 million ( Previous Year Rs 602.55 million)

5. Investments

a. 27,126,542 ( 4,177,896) Equity Shares in Television Eighteen India Limited are pledged in connection with loans to a Director and entities under significant influence . A part of these investments were re - pledged on October 27,2006 in pursuance of a resolution passed on October 12,2006 when the company was a Private Limited Company. As per opinion received by the company , the said pledge does not attract provisions of Section 295 since the loans were availed and securities originally pledged when the company was a private company.

The investments as on the balance sheet date are post 1:1 bonus

b. 50,785,500 (Nil) Equity Shares in ibnl 8 Broadcast Limited are pledged in connection with loans to an entity under significant influence

c. The Non Convertible part of Zero Coupon Partly Convertible Debentures in Television Eighteen India Limited are pledged in connection with loan to a Director.

d. The Indian Film Company (TIFC), was incorporated in Guernsey as a wholly owned subsidiary of the company in April 2007 and the company invested 10 million GBP as Equity in TIFC. Consequent to dilution upon listing of TIFC, on the Alternative Investment Market of the London Stock Exchange in June 2007 , its has ceased to be a subsidiary of the company. The equity shares of TIFC were quoted, as at March 31,2008 at less than the issue price . However in view of TIFCs profitability positive Net Worth and the long term strategic interest of the Company no provision for diminution in value of the investment is considered necessary in the accounts.

e. 38,61,812 (5,130,991) units of a mutual fund are pledged in connection with loans to a Director and a related party.

f. In absence of market quotes, the Non Convertible part of debentures in TV18 have been valued at book value.

g. Network 18 Holdings Limited , the companys wholly owned subsidiary in Cayman Islands has incurred losses but has a positive Net Worth as at March 31,2008 . However, in view of the companys long term strategic interest in the subsidiary , no provision for diminution in the value of the investment is considered necessary in the accounts.

h. Network 18 India Holdings Private Limited , the companys wholly owned subsidiary has incurred losses in the period ended March 31,2008. However, in view of the companys long term strategic interest in the subsidiary , no provision for dimunition in the value of the investment is considered necessary.

i. The .01% Redeemable Non Cumulative Non Convertible Preference Shares of Rs 10/- each , in Network 18 India Holdings Private Limited are redeemable at issue price at any time within 10 years from the date of allotment.

j. The 15% Cumulative Redeemable Convertible Preference Shares of Rs 10/- each in VT Holdings, having a tenor of 10 years, the Preference Shares are convertible into Equity Shares subject to other terms of issue .

The terms of issue of the Preference Shares also stipulate that in a situation where the Preference Shareholders are entitled to additional voting rights due to non payment of Dividend, the same rights have been voluntarily relinquished in favour of the Equity Shareholders of the issuer company.

In the event no dividend is paid during the tenure of the Preference Shareholders , the Preference Shareholders shall have the option and the right to redeem the said Preference Shares at a value which shall be the investment amount alongwith the Redemption Premium calculated @ 15% per annum for the period during which the dividend remains unpaid.

k. The 8% Cumulative Redeemable Non Convertible Preference Shares of Rs 100 each in BK Media Pvt Ltd , an entity owned and controlled by the Managing Director of Network 18 Media and Investments Limited are (a) redeemable at the end of 5 years from the date of issue, unless otherwise agreed by the Company and the issuer company and (b) proposed to be secured either by a personal guarantee of the promoters or by way of a first charge on all assets created or acquired by the issuer company .

6. Share application money paid to Network 18 India Holdings Private Limited has been received back subsequent to the Balance Sheet date

7. Miscellaneous Expenditure includes expenses incurred towards Rights Issue of Partly Convertible Cumulative Preference Shares, subscription to which was open as at the Balance Sheet date.

8. Capitalisation of borrowing costs : Borrowing costs are net of Rs Nil (Rs 6,872,531) which have been capitalised as part of film projects in progress, as recommended by Accounting Standard 16 issued by the Institute of Chartered Accountants of India.

9. Scheme of Restructuring

The Scheme of Arrangement between Television Eighteen India Limited , Network 18 Fincap Limited ( now known as Network 18 Media and Investments Limited) (the company) and SGA News Limited was approved by the Honble High Court of Delhi on July 20,2006. Copies of the said order were filed with the Registrar of Companies, Delhi and Haryana on September 27,2006 and the Scheme was therefore effective from that date. As per the scheme :

a. the Media Investment Undertaking of Television Eighteen India Limited (TV18) comprising the business activity of undertaking and managing strategic/financial investments in media companies along with the related assets , liabilities .employees including invest- ment in group companies engaged in Television News Space, Preference Capital Investment in the company and other identified liquid assets (detailed in (c) below) , were transferred at book value to the company from the appointed date of October 1,2005.

b. in exchange for the said transfer, the company issued 12 Equity Shares of Rs 5/- each , to all Shareholders of TV 18 , for every 10 Equity shares of Rs 10/- each ,held by that Shareholder in TV 18 . Since the company already held Equity shares in that Company, pursuant to the above mentioned Demerger Scheme , no shares were issued by the company to itself.

c. The assets actually transferred to the company have differed , from that approved by the court, but the aggregate transfer was for the approved amount.

(Rs. million)

Particulars Actual transfer

Equity Shares in SGA News Limited 391.00 Equity Shares in SRH Broadcast News Holdings P Ltd 197.00 Preference Shares - Network 18 Fincap Ltd 201.50 Share Application Money - TV 18 Holdings Ltd ( Now Network18 Holdings Ltd), Cayman Islands 67.90 Cash and cash equivalents 664.32 Total 1521.72

d. As per the scheme , for the period between the appointed date and the effective date, TV 18 was deemed to have been carrying on all business and activities relating to the demerged undertaking on behalf of the company and all profits accruing to the Transferor Company ,or losses arising or incurred by them relating to the Demerged Undertaking were treated as the profits or losses of the company.

e. TV18 earned dividends on the aforesaid investments aggregating to Rs 26.33 million during the period between the appointed date and the effective date. Of the said 26.33 million , Rs 13.81 million pertained to the period starting from the appointed date and ending on March 31,2006 was adjusted as a credit balance in the Profit and Loss account of the company in the financial year ended March 31,2007. The remaining was shown as income of that period.

f. Transfer to a Trust of 10.56% of the fully diluted Equity Capital of the company, as required by the Scheme was given effect to on November 15,2006.

10. Stock Option Charge Out

Pursuant to the Scheme of Arrangement, all persons entitled to Shares under various ESOP / ESPS plans of Television Eighteen India Limited , were to be compensated for dilution in their grants by issue of Equity Shares in Network 18 Media and Investments Limited (then known as Network 18 Fincap Limited ). A sum of Rs 97,836,059 relating to such grants and pertaining to periods before the effective date of the scheme was adjusted directly in the opening balance of the Profit and Loss account during the financial year ended March 31,2007. Proportionate costs relating to periods after the effective date were charged to revenue .

11. Amount Due from Director or Officer

Amount due from Director / officer of the company Rs Nil (Nil). The maximum amount due from a Director / officer of the company during the period was Rs. Nil (Rs. 9,39,60,000).

12. In the opinion of the Board, current assets, loans and advances have a value not less than the amount at which they are stated.

13. The company has carried out its lax computation in accordance with the mandatory standard on accounting , AS 22 - Accounting tor taxes on income, referred to in Companies ( Accounitng Standards ) Rules ,2006 . In view of accumulated losses the company has not provided for deferred tax assets as there is no virtual certainty that there will be sufficient future taxable income available to realize such assets.

Fringe Benefit tax on exercise of stock options (s) has been paid by the company and subsequently recovered from grantees. Consequently , there is no impact on the profit and loss account.

14. Figures for the previous year have been regrouped and rearranged wherever necessary to conform to the current years presentation.

15. In respect of the disposal / write off of companys erstwhile investments in SGA Media Inc, USA, the company is yet to seek approval of the Reserve Bank of India.

16 . Disclosures as per Micro, Medium and Small Enterprises Development Act, 2006 (MSMED) Pursuant to amendments to Schedule VI to the Companies Act, 1956 vide Notification No. GSR 719 (E) dated 16 November, 2007, the amounts due to micro and small enterprises only are to be disclosed as against the earlier disclosure requirement of amounts due to small scale industrial undertakings

Based on the information available with the Company, the balance due to micro and small enterprises as defined under the MSMED Act, 2006 is Rs. Nil (Previous year Rs. Nil) and no interest has been paid or is payable under the terms of the MSMED Act, 2006. Further, during the previous year no amounts were payable to small scale undertakings which were outstanding for more than 30 days.As per the Micro, Small and Medium Enterprises Development Act, 2006 Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdues beyond the specified period irrespective of the terms agreed with the suppliers. The company has initiated the process of identification of such suppliers. In view of this, the liability of interest cannot be reliably estimated nor can the required disclosures be made. Accounting in this regard will be carried out after process is complete and reliable estimate can be made in this regard. However, management is of opinion that liability in any case will be insignificant in view of supplier profile of the Company 27. Contracts remaining to be executed on capital account: Rs 8.03 million ( net of advances) (Nil) 28 . Figures in (brackets) refer to the corresponding figures in the accounts for the year ended March 31,2007.

17. Compliance with Reserve Bank of India Guidelines

a. The company has filed an application before the Reserve Bank of India seeking modification of inter alia, prescribed norms for capital adequacy and concentration of investments, by the Non Banking Financial (Non Deposit Accepting or Holding) Companies Prudential Norms ( Reserve Bank) Directions, 2007, issued by the Reserve Bank of India and response of Reseve Bank of India is awaited.

b. The Companys current activities do not require any provisioning in accordance with the above guidelines.

18.a. The excess of Business Consideration of USD 450,000 received from Viacom 18 Media Private Limited (earlier MTV Networks Pvt Ltd) over book value of Fixed Assets transferred is recorded as a surplus on disposal of assets . The excess of book value of the net current assets transferred, over the estimated realisable value has been provided for. The amounts due from Viacom 18, on account of business transfer and other transactions are subject to confirmation.

 
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