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Directors Report of Saregama India Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Sixty-Eighth Annual Report of Saregama India Limited along with the audited accounts for the year ended 31st March, 2015.

Financial Results

The performance of your Company for the year ended 31 st March, 2015 is summarized below:

(Rs. in Lacs) Year ended Year ended 31st March, 31st March 2015 2014

Total income 18894 17369

Profit/(Loss) from operations 1797 2611

Exceptional item 261 886

Provision for Contingencies Nil Nil

Profit before tax 1536 1726

Provision for Taxation

Deferred Tax Charged / (Credit) (33) (118)

Current tax Nil 635

Net profit (after tax and exceptional items) 1569 1209

Proposed Dividend (including tax thereon) 315 305

Transfer to general reserve Nil 60

Reserves (excluding revaluation reserves) 13880 12724

Your Board is pleased to report a profit ofRs. 1568.51 Lakhs in the year 2014-15.

Dividend

Your Board is pleased to recommend a dividend ofRs. 1.50/- per equity share of Rs. 10/- each for the year ended 31st March, 2015.

Operations Music Audio Business

Your Company has been able to complete the journey from an old-music label into digital business conglomerate. In April last year your Company entered into partnership with international digital distribution company Believe Digital for digital distribution of the entire music catalogue across different languages and genres in international markets especially with the Indian diaspora. This was followed by the launching of online music store / library starting from Gauhar Jan to the soundtrack of the latest film ''Heropanti1 consisting of more than a lakh unique songs in 14 languages streamed for free and downloadable at a price after streaming through Facebook, Twitter, Google Plus and Email, adding a social element to the service. It has four main divisions - Hindi, Regional, Devotional and Languages in 35 sub-categories with an interesting option called ''Experience 360'' which provides users with information regarding the song, artists, video and artist biography.

Your Company is concentrating on improving/building content monetization infrastructure, viz., Platform relationships with Telcos, D2h/Cable operators, iTunes, OTT providers, TV channels and Radio stations; Direct-to-customer retail business, e.g. digital: website, apps; & physical: kiosks at high traffic outlets; Youtube business both advertising revenues and claims; International markets monetization; Ad Sales from reinterpretation projects, new South TV programs, advertising agencies.

Music Publishing Business

Your Company''s decision to negotiate directly with all major Television broadcast networks at decent valuations has been a significant development in the current year. The Bollywood industry continues to synchronize your Company''s catalogue to create new content while retaining the nostalgic value of the retro music.

TV Software

Your National Television business has launched its first Prime Time Daily "Begusarai" on the recently launched GE Channel &TV from Zee Network. Your Company additionally continues to function as a full-fledged Production House on Channels as Life OK crime series titled "Savdhan India", on National Network of Doordarshan family drama titled ''''Jab Jab BaharAayee" and chat show on women empowerment and upliftment "Stree Shakti". Your Company continues to be a leading producer of TV content in all four South Indian languages. It includes hit serials titled ''Athipookal'', ''My Dear Bootham'', ''Velan'', ''Soolam'', ''RajaRajeshwari''etc.

Publication Business

Your Company publishes the weekly current affairs magazine "OPEN"through its subsidiary Open Media Networks Pvt. Ltd. Aimed at the intelligent Indian reader it has been well received by advertisers and readers at large. The subsidiary is adding to its existing business line the promising business vertical of organizing events for live panel discussions on trending topics in politics, society, sports, world affairs, etc.

Corporate Governance

Your Company has adopted a Code of Conduct (the Code) for its Directors and Senior Management personnel, who have affirmed compliance with the Code.

The adoption of the Code stems from the fiduciary responsibility that the Directors and the Senior Management have towards the stakeholders of the Company. Your Directors and Senior Management act as trustees in the interest of all stakeholders of the Company by balancing conflicting interest, if any, between stakeholders for optimal benefits.

Your Board of Directors is committed to good governance practices based on principles of integrity, fairness, transparency and accountability for creating long-term sustainable shareholder value.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

A certificate of chartered accountant regarding compliance of the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to this Report.

Directors'' Responsibility Statement

Your Directors states that:

- In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and

prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; .

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

- That your Directors have prepared the Annual Accounts on a going concern basis;

- The Directors have laid down internal financial controls to be followed by the Company and that such internal controls are adequate and are operating effectively; and

- The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. ''

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The disclosures are set out in Note 3 9 to the financial statement.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. Your Company is committed to identifying and supporting programmes aimed at:

- Provision of access to basic healthcare services / facilities, safe drinking water & sanitation and conducting health awareness camps;

- Empowerment of the disadvantaged sections of society through promoting inclusive education for all, as well as through livelihood generation and skill development;

- Supporting environmental and ecological balance through energy conservation, adoption of initiatives resulting into Greenhouse Gas Emissions reduction and transformation into a low carbon business practices;

- Undertaking livelihood generation / promotion and women empowerment projects;

- Any other programme that falls under the Company''s CSR Policy and is aimed at the empowerment of disadvantaged sections of the society; and

- U ndertaking / supporting sports activities and programmes of act & culture in various forms.

Vigil Mechanism

The Vigil Mechanism of your Company, which also incorporates a whistle blower policy in terms of the Listing Agreement. Protected disclosures can be made by a whistle blower through e-mail, or a letter to the Chairman of the Audit Committee.

Employee Benefit Scheme

The Members of the Company, at its Annual General Meeting held on 26th July, 2013, approved the implementation of Saregama Employees Stock Option Scheme - 2013. Your Company is desirous to extend the said benefits also to employees (including directors whether whole time directors or not) of the subsidiary companies.

Your Company has further formulated the Saregama Stock Appreciation Rights Scheme - 2014 for benefit of its employees as per applicable regulations of Securities and Exchange Board of India as amended from time to time.

Rights Issue

Your Company offered 5,338,628 Equity shares of face value ofRs. 10/- each for cash at a premium ofRs. 35/- per share on Rights basis to the existing Members of the Company in the ratio of 4 Equity shares for every 7 Equity shares held on the Record Date (14th March, 2005) aggregating Rs. 2,402 lakhs. Out of the total issue, 5,332,025 and 1,113 and 200 Equity shares were allotted in the year 2005-06,2006-07 and 2009-10 respectively and the balance 5,290 Equity shares were kept in abeyance due to pending litigation and identification of beneficiaries of the clearing members by NSDL and CDSL. .

Fixed Deposits

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Rules made thereunder. Particulars of Employees In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(1) to 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees drawing remuneration in excess of the limits set out in the Rules are provided in the Annual Report. However, as per first proviso to Section 136( 1) of the said Act the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any Member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. None of the employees as set out in the said Annexure is related to any Director of the Company.

Directors and Key Managerial Personnel

In terms of Article 102 of the Articles of Association and pursuant to the relevant provisions of the Companies Act, 2013 Mrs. S Goenka and Mr. G B Aayeer retires by rotation and, being eligible, offers themselves for re-appointment at the ensuing Annual General Meeting. The particulars regarding the Directors proposed to be re-appointed at the ensuing Annual General Meeting, as required under Clause 49 of the Listing Agreement of the Stock Exchanges, has been given in the Notes annexed to the Notice convening the meeting. .

Mr. Harshavardhan Neotia resigned as a Director of the Company with effect from 18th November, 2014. The Board places on record its deep appreciation for the services rendered by Mr. Harshavardhan Neotia during his tenure as Director of the Company.

Your Company has devised programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters. Also a Policy of performance evaluation was followed for Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive and executive directors.

Auditors

M/s Price Waterhouse, the Statutory Auditors ofthe Company, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

M/s. Shome & Banerjee, Cost Accountants, has been appointed by the Board for conducting the audit of cost records of your Company for the financial year ended 31 st March, 2015.

M/s MR & Associates, Practicing Company Secretaries, has been appointed by the Board to conduct Secretarial Audit for the financial year ended 31 st March, 2015.

Subsidiary Companies

In accordance with the Companies Act, 2013 the audited accounts and other particulars of Saregama Pic., RPG Global Music Limited, Kolkata Metro Networks Limited and Open Media Network Private Limited shall be available for inspection at the registered office of the Company. Your Company has invested an amount of Rs. 17 Crores in Kolkata Metro Networks Limited, a wholly owned subsidiary, to generate revenue through live music, artiste management, representation, event management etc. Your Company has increased its holding to the extent of 75.18% in Open Media Network Private Limited with full management control.

Consolidated Financial Statements

The Consolidated Financial Statements as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges have been prepared by the Company in accordance with the requirements of Accounting Standard 21 "Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India. The audited Consolidated Financial Statements together with Auditors'' Report thereon form part of the Annual Report.

Conservation of Energy and Technology Absorption A. Conservation of energy:

(a) Energy conservation measures taken: .

During the year external experts conducted an energy audit and the recommendations have been implemented.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

No additional investments for reduction in energy consumption have been made or are proposed to be made presently.

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods:

The Company has achieved marginal savings during 2014-2015 due to the measures at (a) above.

B. Technology absorption:

(d) Efforts made in technology absorption as per Form Bunder:

FORM B

* (See Rule 2)

Form for disclosure of particulars with respect to absorption.

Research and Development (R & D) .

1. Specific areas in which R&D carried out by the Company No Research & Development activities have been carried out by

- the Company during the year.

2. Benefits derived as a result of the above R&D -

3. Future plan of action -

4. Expenditure on R & D : Nil

(a) Capital -

(b) Recurring -

(c) Total -

(d) Total R&D expenditure as a percentage of total turnover -

Technology absorption, adaptation and innovation:

1. Efforts, in brief, made towards technology absorption, adaptation and innovation. .

The technology for manufacturing audio cassettes was imported nearly 10 years earlier and has been absorbed fully. The product line of audio cassettes however is becoming outdated with advent of new formats of consumption.

2. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. ''

None.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

Not Applicable.

(a) Technology imported. -

(b) Year of import. -

(c) Has technology been fully absorbed? -

(d) If not fully absorbed, areas where this has not taken

place, reason therefore and future plans of action. -

Acknowledgement

Your Directors express their sincere thanks to all stakeholders including the employees, artistes, composers, musicians, film producers and shareholders for their continued support and cooperation.

By Order of the Board G. B. Aayeer Kolkata, Director 29th May, 2015 DIN - 00087760


Mar 31, 2014

Dear Members,

The Directors are pleased to present the Sixty-Seventh Annual Report of Saregama India Limited along with the audited accounts for the year ended 31st March 2014.

Financial Results

The performance of your Company for the year ended 31 st March, 2014 is summarized below:

(Rs. in Lacs)

Year ended Year ended 31st March, 2014 31st March, 2013

Total income 17369 18446

Profit from operations 2611 1402

Exceptional item 886 327

Provision for Contingencies Nil Nil

Profit before tax 1726 1075 Provision for Taxation

Deferred Tax Charged / (Credit) (118) (483)

Current tax 635 470

Net profit (after tax and exceptional items) 1209 1088

Proposed Dividend (including tax thereon) 305 305

Transfer to general reserve 60 54

Reserves (excluding revaluation reserves) 12724 11821

Your Board is pleased to report a profit ofRs. 1208.77 Lakhs in the year 2013-14.

Dividend

Your Board is pleased to recommend a dividend of Rs. 1.50/- per equity share ofRs. 10/- each for the year ended 31 st March 2014.

Operations

Music Audio Business

Your company has developed state-of-the-art digital VAS business model that has added feathers to its existing rich music catalogue apart from building a formidable presence in conventional VAS Vectors like WAP and IVR besides the CRBT business. Your company also developed a very robust direct international presence in the Mobile VAS ecosystem with direct presence in over 50 countries covering over 100 telecom operators. In addition to Mobile VAS, the last year in particular has witnessed hectic activity in the Web digital business domain. Youtube has emerged as a powerhouse for monetizing music. Web based music services like SAAVN and GAANA has a growing customer base for streaming services. The coming year is expected to witness entry of almost all major Global Streaming Brands in India like Spotify, Google Play, Guvera and RDIO to name a few. The I- Tunes with its download model has also started shop in India. On the International Web business front, your company signed a 3-year deal with the global aggregator. This partnership is expected to make company''s content available to millions of Indians globally via multiple web based music services.

Your Company witnessed a sharp drop in the revenues from the device manufacturers like Nokia, which had a severe knock on effect on revenues to Music Companies. However, D2C APP business holds a lot of promise in the coming years and as such your Company has been in the process of developing some state of the art game changing App products.

Your Company''s corporate segment of physical sales continues to post business. During the year under review, your Company acquired new Hindi and regional film soundtracks including in Hindi - ''Issaq'' and a driver track of Heropanti'', etc. The demand for use of old film hits in new films continued this year also.

Music Publishing Business

Your Company''s deci sion to negotiate directly with all major Television broadcast networks at decent valuations has been a significant development in the current year. The Bollywood industry continues to synchronize your company''s catalogue to create new content while retaining the nostalgic value of the retro music.

TV Software

Your National Television business is successfully producing programs in national Hindi language in mainstream channels like ''Savdhan India'' in Star TV''s Life OK Channel. The show won the Indian Television Academy Award (ITA) under the Best Thriller Category with tough competition from long running popular shows like ''CID'' and ''Crime Patrol''. The Division is currently under pre-production stage for two new shows a daily on the Zee Network and a weekly one-hour show on Star Plus channel and also has two shows green lighted and approved on a new upcoming channel "EPIC TV" and will be on air as soon the channel is launched. The foray into regional channel BIG Magic continues with the production of the program ''Police Files''. Your Company continues to be a leading producer of TV content in all four South Indian languages. It includes hit serials titled ''AthipookaV, ''MyDearBootham'', ''Velan'', ''Soolam'', ''RajaRajeshwari''etc.

Publication Busin ess

Your Company publishes the weekly current affairs magazine "OPEN" through its subsidiary Open Media Network Pvt. Ltd. Aimed at the intelligent Indian reader it has been well received by advertisers and readers at large. The subsidiary is adding to its existing business line , the promising the business vertical of organizing events for live panel discussions on trending topics in politics, society, sports, world affairs, etc. This new business vertical requires some amount of funding which your Board has duly considered and approved.

Corporate Governance

Your Company has adopted a Code of Conduct (the Code) for its Directors and Senior Management personnel, who have affirmed compliance with the Code.

The adoption of the Code stems from the fiduciary responsibility that the Directors and the Senior Management have towards the stakeholders of the Company. Your Directors and Senior Management act as trustees in the interest of all stakeholders of the Company by balancing conflicting interest, if any, between stakeholders for optimal benefit.

Your Board of Directors is committed to good governance practices based on principles of integrity, fairness, transparency and accountability for creating long-term sustainable shareholder value.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

A certificate of chartered accountants regarding compliance of the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to this Report.

Directors'' Responsibility Statement

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors states:

- That, in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

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

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

- That your Directors have prepared the Annual Accounts on a going concern basis.

Employee Stock Option Plan

The Members of the Company, at its Annual General Meeting held on 26th July, 2013, approved the implementation of Saregama Employees Stock Option Scheme - 2013 for eligible employees of the Company and its subsidiaries. The necessary disclosures prescribed under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in the Annexure to this Report.

Issue of Equity shares on preferential basis

In accordance with SEBI Guidelines / Regulations as amended upto date and necessary approvals of the members, 27,27,000 Equity shares of Rs.10/- each and at a premium of Rs.92.47 each were allotted to promoters and others on preferential basis on 11th September, 2009.

Rights Issue

Your Company offered 5,338,628 Equity shares of face value of- 10/- each for cash at a premium ofRs. 35/- per share on Rights basis to the existing Members of The Company in the ratio of 4 Equity shares for every 7 Equity shares held on the Record Date (14th March, 2005) aggregating Rs. 2402 Lacs. Out of the total issue, 5,332,025 and 1,113 and 200 Equity shares were allotted in the year 2005-06,2006-07 and 2009-10 respectively and the balance 5,290 Equity shares were kept in abeyance due to pending litigation and identification of beneficiaries of the clearing members by NSDL and CDSL.

Fixed Deposits

Your Company has not accepted any deposits within the meaning of Section 58Aof the Companies Act, 1956 and the Rules made thereunder.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219( 1 )(b)(iv) of the said Act read with the revised Clause 32 of the Listing Agreement as notified by Securities and Exchange Board of India, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. None of the employees as set out in the said Annexure is related to any Director of The Company.

Directors

In terms of Article 102 of the Articles of Association Mr. Sanjiv Goenka retires by rotation and, being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

The particulars regarding the Directors proposed to be re-appointed at the ensuing Annual General Meeting, as required under Clause 49 of the Listing Agreement of the Stock Exchanges, has been given in the Notes annexed to the Notice convening the meeting.

The Board places on record its deep appreciation for the services rendered by Mr. Suryanarayana Murthy Mantha and Mr. Pradip Kumar Khaitan during their tenures as Managing Director and Director, respectively, of the Company.

Auditors

M/s Price Waterhouse, the Auditors of The Company, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re- appointment.

Subsidiary Companies

In compliance with the requirements of Section 212(8)(v) of the Companies Act, 1956 the audited accounts and other particulars of Saregama Pic, RPG Global Music Limited, Kolkata Metro Networks Limited and Open Media Network Private Limited shall be available for inspection at the . registered office of the company. Your Company has infused required funds in its subsidiary Open Media Network Pvt. Ltd., for the new business vertical of events for live panel discussions. The subsidiary has also converted its existing loan into equity resulting in your Company holding 58.63% in the subsidiary with full management control.

Consolidated Financial Statements

The Consolidated Financial Statements as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges have been prepared by The Company in accordance with the requirements of Accounting Standard 21 "Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India. The audited Consolidated Financial Statements together with Auditors'' Report thereon form part of the Annual Report.

By Order of the Board Kolkata, Sanjiv Goenka 12th June, 2014 Chairman


Mar 31, 2013

The Directors are pleased to present the Sixty-Sixth Annual Report of Saregama India Limited along with the audited accounts for the year ended 31 st March 2013.

Financial Results

The performance of your Company for the year ended 31 st March, 2013 is summarized below:

(Rs. in Lacs)

Year ended Year ended 31st March, 2013 31st March, 2012

Total income 18446 15577

Profit/(Loss) from operations 1402 745

Extraordinary item 327 Nil

Provision for Contingencies Nil Nil

Profit/(Loss) before tax 1075 745

Provision for Taxation

Deferred Tax Charged / (Credit) (483) 409

Current tax 470 475

Net profit/(Loss) (after tax and extraordinary items) 1088 (139)

Proposed Dividend (including tax thereon) 305 Nil

Transfer to general reserve 54 Nil

Reserves (excluding revaluation reserves) 11821 11038

Your Board is pleased to report a profit ofRs. 1087.98 Lacs in the year 2012-13.

Dividend

Your Directors are pleased to recommend a dividend ofRs.1.50 per equity share ofRs. 10/- each for the year ended 31 st March, 2013.

Operations Music Audio Business

The Company has developed its own state of art digital infrastructure and have brought on board the specialized digital business team. In place of monetisation of Company''s rich catalogue by licensing route using network of the aggregators, the Company has adopted the strategy to directly approach the customers by way of tie up with B2B partners like telcos and through specialized product offerings. The proliferation of mobile and Internet platforms has offered many profitable opportunities to draw revenues from traditional digital products like CRBT and new avenues like WAP. With the advent of 3G & 4G services, the demand for new media with full song mobile applications, downloads, celebrity chat and audio cinema is on the increase. Your Company is aggressively acquiring new video contents, creating short films and converting the music catalogue to video to retain its market share. It has tied-up with leading Internet operators and also increasing its presence on popular platforms like ''You Tube''.

Your Company continued the policy of economizing its physical audio business. The corporate segment of physical sales continue to post appreciable business. During the year under review, the Company acquired new Hindi and regional film soundtracks including in Hindi - ''Himmatwala'', ''Love- in-Bombay'', ''Lay Gaya Saddam'', ''Its Rocking - Dard - E- Disco'', etc. The demand for use of old film hits in new films continued this year also.

Your Company has been able to penetrate more into hitherto untapped markets of the Indian sub-continent and Middle East along with traditional markets of United Kingdom, United States and other parts of Europe and South East Asia through its international subsidiaries. The Concerts of top end artistes at UK and US across several cities were well taken by the music lovers.

Music Publishing Business

The music publishing business is enjoying an organic growth for long-tail catalogue owners like your Company. The growth has been primarily in the areas of film synchronization, TV & Radio advertisement synchronization and events. Having a deep catalogue with the most number of songs by the legends of Indian music, both film and non-film, across genres and languages, various TV reality shows, soaps and advertisements are inspired to use your Company''s underlying rights in its repository. The Bollywood industry continues to synchronize your Company''s catalogue to create new content while retaining the nostalgic value of the retro music. This had led to a substantial increase in music publishing revenue for your Company.

TVSoftware

National TV business has been successfully producing programs in national Hindi language in mainstream channels like ''Savdhan India'' in Star TV''s Life OK Channel and also in regional channels like BIG Magic Channel titled ''Police Files'' and ''Pyar Ya Dehshat''. The Company remains strong in TV software business of regional languages. The Company continues to be a leading producer of TV content in all four South Indian languages. It includes hit serials titled ''Athipookal'', ''My Dear Bootham'', ''Velan'', ''Soolam'', ''Raja Rajeshwari'' etc. As for the content in Bengali language, the serials titled TSfadir Dik Hara'', ''Antoral'' and ''Kolir Gopal Bhar'' were received well during the year on leading Bangla Channel.

Home Video

Your Company distributed Home Video products of renowned international studios like BBC Worldwide Limited, Discovery, Entertainment Rights, Focus Features, Millennium Interactive, Power Sports, Kimmel Entertainment and other independent studios. The Company supplemented organized retail business by foraying into the sale of Home Video titles under "Direct to Consumer" model.

Publication Business

Your Company publishes the weekly current affairs magazine "OPEN" under wholly owned subsidiary Open Media Networks Pvt. Ltd. Aimed at the intelligent Indian reader, it has been well received by advertisers and readers at large. Although it has enlarged its readership base in its fifth year of operations, the magazine is yet to achieve break even to become an established market leader.

Corporate Governance

Your Company has adopted a Code of Conduct (the Code) for its Directors and Senior Management personnel, who have affirmed compliance with the Code.

The adoption of the Code stems from the fiduciary responsibility which the Directors and the Senior Management have towards the stakeholders of the Company. Your Directors and Senior Management act as trustees in the interest of all stakeholders of the Company by balancing conflicting interest, if any, between stakeholders for optimal benefit.

Your Board of Directors is committed to good governance practices based on principles of integrity, fairness, transparency and accountability for creating long-term sustainable shareholder value.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

A certificate of the auditors regarding compliance of the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to this Report.

Information Technology

Your Company is in the process of consolidating the benefits of implementation of ERP from SAP equipped module handling Intellectual Property Rights Management. This initiative would not only efficiently utilize the Company''s vast content but also build capabilities for the future and help to keep its operations contemporary.

Forward-looking Statements

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "will" and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Directors'' Responsibility Statement

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors states:

- That, in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

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

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

- That your Directors have prepared the Annual Accounts on a going concern basis.

Employee Stock Option Plan

The Members of the Company, at its Annual General Meeting to be held on 26th July, 2013, is to approve the introduction of the Employee Stock Option Scheme for eligible employees of the Company and its subsidiaries. The necessary disclosures prescribed under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in the Annexure to this Report.

Issue of Equity shares on preferential basis

In accordance with SEBI Guidelines / Regulations as amended upto date and necessary approvals of the members, 27,27,000 Equity shares ofRs. 10/- each and at a premium of Rs.92.47 each were allotted to promoters and others on preferential basis on 11th September, 2009.

Rights Issue

Your Company offered 5,338,628 Equity shares of face value of Rs.10/- each for cash at a premium of Rs.35/- per share on Rights basis to the existing Members of the Company in the ratio of 4 Equity shares for every 7 Equity shares held on the Record Date (14th March, 2005) aggregating Rs. 2402 Lacs. Out of the total issue, 5,332,025 and 1,113 and 200 Equity shares were allotted in the year 2005-06,2006-07 and 2009-10 respectively and the balance 5,290 Equity shares were kept in abeyance due to pending litigation and identification of beneficiaries of the clearing members by NSDLandCDSL.

Fixed Deposits

Your Company has not accepted any deposits within the meaning of Section 58 A of the Companies Act, 1956 and the Rules made thereunder. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act read with the revised Clause 32 of the Listing Agreement as notified by Securities and Exchange Board of India, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any Member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. None of the employees as set out in the said Annexure is related to any Director of the Company.

Directors

Your Directors with profound grief announces the sad demise of the founder Chairman of the Company Dr. R. P. Goenka and acknowledges his immense contribution to the growth of the Company.

In terms of Article 102 of the Articles of Association, Mr. S. Banerjee and Mr. P. K. Mohapatra retire by rotation and, being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

The particulars regarding the Directors proposed to be re-appointed at the ensuing Annual General Meeting, as required under Clause 49 of the Listing Agreement of the Stock Exchanges, has been given in the Notes annexed to the Notice convening the meeting.

The Board appointed Mr. Suryanarayana Murthy Mantha as Managing Director of the Company effective from 1st January, 2013. Further, in its meeting held on 27th May, 2013, the Board appointed both Mrs. Preeti Goenka and Mr. Bhaskar Raychaudhuri as Non-executive Directors of the Company.

Auditors

M/s Price Waterhouse, the Auditors of the Company, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re- appointment.

Subsidiary Companies

In compliance with the requirements of Section 212(8)(v) of the Companies Act, 1956 the audited accounts and other particulars of Saregama Pic., RPG Global Music Limited, Kolkata Metro Networks Limited and Open Media Network Private Limited shall be available for inspection at the registered office of the Company.

Consolidated Financial Statements

The Consolidated Financial Statements as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges have been prepared by the Company in accordance with the requirements of Accounting Standard 21 "Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India. The audited Consolidated F inancial Statements together with Auditors'' Report thereon form part of the Annual Report..

Conservation of Energy and Technology Absorption

A. Conservation of energy:

(a) Energy conservation measures taken;

During the year external experts conducted an energy audit and the recommendations have been implemented.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy;

No additional investments for reduction in energy consumption have been made or are proposed to be made presently.

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods;

The Company has achieved marginal savings during 2012-2013 due to the measures at (a) above.

B. Technology absorption:

(d) Efforts made in technology absorption as per Form B under:

FORM B (See Rule 2)

Form for disclosure of particulars with respect to absorption.

Research and Development (R & D)

1. Specific areas in which R & D carried out by the Company No Research & Development activities have been carried out by the Company during the year.

2. Benefits derived as a result of the above R & D _

3. Future plan of action _

4. Expenditure on R & D : Nil

(a) Capital _

(b) Recurring _

(c) Total _

(d) Total R & D expenditure as a percentage of total turnover - Technology absorption, adaptation and innovation:

1. Efforts, in brief, made towards technology absorption, adaptation and innovation.

The technology for manufacturing audio cassettes was imported nearly 10 years earlier and has been absorbed fully.

2 Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution

None.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

Not Applicable.

(a) Technology imported. _

(b) Year of import. _

(c) Has technology been fully absorbedRs. _

(d) If not fully absorbed, areas where this has not taken place, reason therefore and future plans of action. _

Foreign Exchange earnings and outgo

a) The International business of the Company is handled by its foreign subsidiaries viz. Saregama Pic. and RPG Global Music Limited Although in line with the laid down policy of the Company, the foreign operations are directly handled by such subsidiaries, the Company actively assists and guides these companies in its marketing efforts, content creation, appointment of foreign sub-publishers etc which leads to foreign exchange earnings for the Company.

b) Total foreign exchange used and earned:

(Rs. in Lacs)

Current Previous Year Year

Foreign Exchange used 46.70 118.12

Foreign Exchange earned 1700.57 590.64

Acknowledgement

Your Directors express their sincere thanks to all stakeholders including the employees, artistes, composers, musicians, film producers and shareholders for their continued support and cooperation.

By Order of the Board

Kolkata, Sanjiv Goenka

27th May, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present the Sixty-Fifth Annual Report of Saregama India Limited along with the audited accounts for the year ended 31st March, 2012.

Financial Results

The performance of your Company for the year ended 31 st March, 2012 is summarized below:

(Rs. in Lacs)

Year ended Year ended 31st March, 2012 31st March, 2011

Total income 15577 13777

Profit/(Loss) from operations 745 229

Extraordinary item Nil Nil

Provision for Contingencies Nil Nil

Profit/(Loss) before tax 745 229 Provision for Taxation

Deferred Tax Charged / (Credit) 409 (476)

Current Tax 475 70

Net profit/(Loss) (after tax and extraordinary items) (139) 635

Proposed Dividend (including tax thereon) Nil Nil

Transfer to general reserve - -

Reserves (excluding revaluation reserves) 11038 11178

While the profitability of the Company improved dramatically in the current year, the negative profit after tax of Rs. 139.37 Lacs in the year 2011-12 was due to certain deferred tax adjustment.

Operations

Music Audio Business

Looking at the bright future of digital music sales and to achieve this management has revamped the set-up by recruiting a specialized digital business team. The thrust has been to directly approach the customers, instead of the earlier practice of operating through aggregators, which has yielded better revenues. More and more content in mobile, radio and Internet platforms was pushed leading into growth in contributions generated from Caller Ring Back Tones, Ring-Tones and Radio. With the advent of 3G & 4G services the demand for new media with full song mobile applications, downloads, celebrity chat and audio cinema is on the increase. Your Company is acquiring new video contents, creating short films and converting the music catalogue to video to retain its market share. It has tied-up with leading internet operators like saavan.com etc. and also available on the ever so popular You Tube'.

While economizing with physical audio business, corporate segment sales have achieved appreciable business. In the current falling market, the product mix has been revised in favor of more and more high value multi CD options backed by innovative concepts. The company continued to release the Products under the traditionally high margin genres like Devotional and Classical music.

During the year under review, the Company acquired new Hindi and regional film soundtracks including Rowdy Rathore' and 'Chaar Din Ki Chandni' (both in Hindi), 'Ajintha', 'Golaberij' and 'Balgandharva' (all in Marathi), 'The Film Star' (Malyalam), 'Ee Rojulu' (Telugu), 'Perumaan - The Rajnikanth' (Tamil) and 'Bhooter Bhobishyot' (in Bengali). During the year, the company released several products under its new umbrella brands of "Temple Wellness", "Saregama's Icons Next", "The Bollywood Musical - Biggest Hits of Indian Cinema Re-interpreted", etc. The demand for use of old film hits in new films continued this year also.

The Company has been able to expand its business to international markets in Nepal, Sri Lanka. Maldives, UAE, etc. The Indian and sub-continental population of United Kingdom, United States, other paints of Europe and South East Asia has been tapped through the companies international subsidiaries. The Concerts of top end artistes at UK and US across several cities were well taken by the music lovers.

Films Business

Your Company released Hindi film 'Soundtrack' in October 2011, the official remake of the award winning worldwide cult film 'It's All Gone Pete Tong, which was directed by debutant Neerav Ghosh with star cast including Rajeev Khandelwal, Soha Ali Khan and Mrinalini Sharma. Although the film was highly rated by the critics, the box-office collections were below expectation.

TV Software

National TV business successfully produced its first program "Prayaschit Gunahon Ke Zakhm" for Sony TV (MSM Network). The company has pitched several shows based on crime, family drama etc. across Satellite Channels like Star Plus, Life OK, Colors, Zee, etc. A Bengali serial titled 'Apur Katha' was telecasted during the year on ETV Bangla. The Company continues to be a leading producer of TV content in all four South Indian languages, [t includes hit serials titled 'Athipookal', 'MyDearBootham', 'Velan', 'Soolarn', 'RajaRajeshwari'etc.

Home Video

Your Company distributes and markets Home Video products of renowned international studios like BBC Worldwide Limited, Discovery, Entertainment Rights, Focus Features, Millennium Interactive, Power Sports, Kimmel Entertainment and other independent studios. The titles are predominantly catering to English home video.

During the year under review, the Company supplemented organized retail business by foraying into the sale of Home Video titles under "Direct to Consumer" model.

Publication Business

Your Company publishes the weekly current affairs magazine "OPEN" under wholly owned subsidiary Open Media Networks Pvt. Ltd. Aimed at the intelligent Indian reader it has been well received by advertisers and readers at large. Although it has enlarged its readership base in its third year of operation the magazine continues to pass through its gestation period before being able to achieve break even and becoming an established market leader.

Corporate Governance

Your Company has adopted a Code of Conduct (the Code) for its Directors and Senior Management personnel, who have affirmed compliance with the Code.

The adoption of the Code stems from the fiduciary responsibility which the Directors and the Senior Management have towards the stakeholders of the Company. Your Directors and Senior Management act as trustees in the interest of all stakeholders of the Company by balancing conflicting interest, if any, between stakeholders for optimal benefit.

Your Board of Directors is committed to good governance practices based on principles of integrity, fairness, transparency and accountability for creating long-term sustainable shareholder value.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report.

A certificate of the auditors regarding compliance of the Corporate Governance requirements as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexed to this Report.

Management Discussion and Analysis (MD & A)

This Report includes MD & A as appropriate so that duplication and overlap between Directors' Report and a separate MD & A is avoided and the entire information is provided in a composite and comprehensive manner.

Industry Structure and Developments

The widespread use of mobile, radio and internet services has contributed to sharp rise in digital exploitation of music content. With the introduction of 4G data services in India, popularity and prominence of digital distribution of music with mobile and broadband is expected to grow manifolds changing the business models prevalent in music industry. Also Radio and television continues to be major platforms for consumption of music. However, in the past five years, revenue from sales in physical formats has continuously dropped from 81 percent share to 38 percent. Added to this, unabated piracy is eating away a substantial portion of the increased revenue generation. The newly enacted amendments to the Copyright Act makes it mandatory to share revenue with music composers and lyricists and licensing to radio and television at tariff rates fixed by copyright society. The changes will alter the dynamics of the Music Industry.

Opportunities and Threats

Opportunities

TV Software

India's television industry is on the fast growth track once again, after slowing down in 2009. The segment has seen a 15.56 per cent rise to Rs. 297 billion in 2010, accounting for 45.5 per cent of the overall media and entertainment pie, with strong growth engines from DTH and cable digitization to guide its pace in the future. The sector is poised for a 16 per cent CAGR through 2015 to touch Rs. 630 billion, according to a FICCI-KPMG forecast. India is the world's third largest TV market with almost 138 million TV households, next to China and USA. Cable and Satellite (C&S) penetration has reached close to 80 per cent, fuelled by rapid growth in the DTH sector. New technologies like High Definition (HD), STBs (Set Top Boxes) with inbuilt recorders and delivery platforms like mobiles are rapidly evolving, creating further opportunities for innovation and growth. The above development for television industry bodes well for TV software producers like Saregama.

Home Video

Your company's non-traditional revenue focus on Direct-To-Consumer market continues to show promising growth with zero stock return risks & assured volumes. This has led to rationalization of acquisition cost providing opportunities to the Home Video players to make Home video business profitable.

Publication Business

The content focus of "Open" magazine continues to be the intellectual higher income households. This generates interest in advertising in the magazine by FMCG companies for large promotional spends to create appeal for higher income category of customers and promote their Luxury brands.

Threats

Music Audio Business

In physical as well as digital music sales piracy continues to be most serious deterrent. The newly introduced 4G mobile and broadband services may well see significant rise in piracy. The newly enacted amendments to the Copyright Act has introduced statutory licensing to radio and television which is likely to adversely affect the dynamics of the Music Industry and create confusion leading to endless litigation.

TV Software

This year has seen the shut down of two TV Channels. Turner promoted Imagine TV overnight shut shop as they were not faring well in the space. This was a huge jolt for the all the Producers who had running shows on the channel which had to be shut down immediately with a day's notice.

Home Video

With the popularity of DTH, the Home Video as a format has progressively seen the drop in the volumes making the acquisitions of the rights against onetime payment or MGs a risky proposition.

Publication Business

The magazine market is overcrowded with presence of over 60 genres catered by thousands of the magazines. This on one hand reduces share of Magazines as part of overall print industry and on the other allows Advertisers to demand rock bottom ad rates; compromising the financial feasibility of the Magazine.

Product wise Performance

Your Company's evergreen musical treasures in Old Hindi Films (OHF), Classical and Regional music content continues to be favorites of music lovers.

Non-film music major albums released during the year were namely 'The Best of Gulzar' - a 5 CD compilation of memorable Gulzar songs, 'Tere Bayaan Ghalib' - letters and ghazals of Mirza Ghalib recited by Gulzar and music by Late Jagjit Singh, Kailash Kher's album 'Rangeele' and 'Aksar' with Gulzar's finest poems sung by magical ghazal duo of Bhupinder and Mitali Singh. Also, 'Samagra' a marathi compilation by Lata ji on her 82nd birthday, 'Back To My Future' by Suraj Jagan, 'Philo-Sufi' by Azaan Khan, 'OM' by Kavita Seth and 'The Eternal Winds' by Paras Nath are some of the other albums which were highly appreciated and acclaimed by the general public. In the Temple Wellness Division, first wellness film '5 Ancient Tibetan Rites' with Raageshwari Loomna and Lorraine More was followed by 'Prenatal Yoga with Lara Dutta'. Kailash Kher concerts in UK, including one at prestigious BBC Maida Vale Studios in London, USA and Netherland were a success. The main stream Hindi Film titled 'Soundtrack' released in October 2011 although was not a commercial success even though some of the rights of the film are still with the company expecting to offer revenues in time to come. Due to high quality of the content in Tamil, TV software created for Sun Bouquet of channels commanded better pricing

backed by good TRPs. The software created for ETV Bangla on commission basis created successful program for the channel; however could draw only reasonable pricing as the software creation was for fixed fee per episode on commissioning basis. The magazine "Open" has gradually increased its circulation and advertisement revenue yield and pricing better than the competition.

Outlook

Music Audio Business

The paradigm shift of Music industry from physical to digital forms of music with consumer preference for payment on digital music sampling will be the trend setter. Rolling out of 4G services by various telecom providers is expected to revolutionize the market dynamics and create a new set of revenue streams and content delivery platforms. The popularity of music concerts amongst younger generation with blend of classical and new age music can provide the much needed impetuous for the music industry. Social networking sites such as MY Space, Face book and Twitter are increasingly being used by the music companies to promote their music. Mobile manufacturers such as Nokia, Samsung, etc. are offering customers music bundled with purchase of selected mobile sets. There is a stiff competition between mobile set manufacturers to woo the customer where the music acts as a preferred gratification option. It has become very popular amongst mobile customers to subscribe for Caller Ring Back Tone (CRBT) and operators are offering various options of daily, monthly and quarterly change in CRBT preferences.

Consumer awareness backed with legal provisions to deal with music piracy provides rays of hope for this industry. The growth of music industry depends to a large extent on curbing piracy. Stringent legislations by the government can be the only option. Rules and guidelines for ensuring compliance by the ISPs is one option. The recent enactment of amendments in the Copyright Law has shaken the structure of music industry and more with different interpretations of the changes made. Departmental clarifications and judicial pronouncements can only clear the air of confusion, which will take some time.

TV Software

With the advent of 4G, TV Software will be more in demand. Going forward there will be multiple access points for viewers like Malls, Stations, Buses, Mobile, IPTV, DTH, etc and hence Content will always be in demand.

Publication Business

'Open' magazine has already created its own readership base in the industry. This is expected to augment revenue generation from advertisement and consolidate the readership base. Gradually the magazine is expected to improve its business and achieve break even.

Risk and Concerns

With piracy and tendency of music lovers to enjoy music free of cost the growth of digital music loses the pace of expected growth. The alternative business models based on advertisement revenues are still to mature. The newly enacted amendments to the Copyright Act has introduced statutory licensing to radio and television which will adversely affect the dynamics of the Music Industry and create confusion leading to endless litigation. In the television software business there is continuous trade off between the cost of content and its revenue potential. The fear of drop in TRPs is frequently forcing television channels to withdraw the content. This means non-recovery of fixed cost already incurred by television software producers in shooting the un-telecasted episodes. As for the publication business, the gestation period is long with gradual improvement in volumes and ad-revenue rates built up. Stiff competition from different medium of entertainment like television, music, films, games are available; some even free of cost are deterrents.

Internal Control System and Adequacy

The Internal Audit department of The Company conducts both financial and system audit for all key operations. Such reports are placed before the Audit Committee of Directors and recommendations, if any, are implemented. Your Company has also well documented standard operating procedures for all operational and functional areas. Further, the Board periodically reviews the policies and procedures for risk identification and mitigation.

Financial Performance with respect to Operational Performance

Strict budgetary control is maintained on all operational performance indicators, and review on working capital and cash flow is carried on for improving the operational efficiency.

Human Resources

Your Company's human resource management systems and processes aim to create a responsive, market-focused, customer-centric culture and enhance organizational vitality, so that each business is internationally competitive and equipped to seize emerging market opportunities.

As on the date of this Report, your Company has 404 employees.

Information Technology

Your Company is in the process of consolidating the benefits of implementation of ERP from SAP equipped module handling Intellectual Property Rights Management. This initiative would not only efficiently utilize The Company's vast content but also build capabilities for the future and help to keep its operations contemporary.

Forward-looking Statements

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "will" and other similar expressions as they relate to The Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

Directors' Responsibility Statement

In terms of the provisions of Section 217(2 AA) of the Companies Act, 1956, your Directors states:

- That, in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

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

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

- That your Directors have prepared the Annual Accounts on a going concern basis.

Employee Stock Option Plan

The Members of the Company, at its Annual General Meeting held on 24th September, 2001, approved the introduction of the Employee Stock Option Scheme for eligible employees of the Company and its subsidiaries. Due to separation of the employees number of options has lapsed till 31 st March, 2011. The necessary disclosures prescribed under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in the Annexure to this Report.

Issue of equity shares on preferential basis

In accordance with SEBI Guidelines / Regulations as amended upto date and necessary approvals of the members, 27,27,000 Equity shares ofRs. 10/- each and at a premium ofRs.92.47 each were allotted to promoters and others on preferential basis on 11th September, 2009.

Rights Issue

Your Company offered 5,338,628 Equity shares of face value of Rs. 10/- each for cash at a premium of Rs.35/- per share on Rights basis to the existing Members of The Company in the ratio of 4 Equity shares for every 7 Equity shares held on the Record Date (14th March, 2005) aggregating Rs. 2402 Lacs. Out of the total issue, 5,332,025 and 1,113 and 200 Equity shares were allotted in the year 2005-06,2006-07 and 2009-10 respectively and the balance 5,290 Equity shares were kept in abeyance due to pending litigation and identification of beneficiaries of the clearing members by NSDL and CDSL.

Fixed Deposits

Your Company has not accepted any deposits within the meaning of Section 5 8 A of the Companies Act, 1956 and the Rules made there under. Particulars of Employees '

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act read with the revised Clause 32 of the Listing Agreement as notified by Securities and Exchange Board of India, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. None of the employees as set out in the said Annexure is related to any Director of the Company.

Directors

In terms of Article 102 of the Articles of Association, Dr. R. P. Goenka and Mr. H. Neotia retire by rotation and, being eligible, offer themselves for re- appointment at the ensuing Annual General Meeting.

The particulars regarding the Directors proposed to be re-appointed at the ensuing Annual General Meeting, as required under Clause 49 of the Listing Agreement of the Stock Exchanges, has been given in the Notes annexed to the Notice convening the meeting.

The Board appointed Mr. Pradip Kumar Khaitan as Non-executive Director of the Company effective from 27th December 2011. Further, in its meeting held on 9th April, 2011 the Board appointed Mr. G B Aayeer as 'Manager and Director' with immediate effect after accepting the resignation of Mr. Apurv Nagpal as Managing Director of the Company. Your Directors place on record their appreciation for the services rendered by Mr. Nagpal during his tenure as Managing Director of the Company.

Auditors

M/s Price Waterhouse, the Auditors of The Company, retire at the ensuing Annual General Meeting and, being eligible, offer themselves for re- appointment.

Subsidiary Companies

In compliance with the requirements of Section 212(8)(v) of the Companies Act, 1956 the audited accounts and other particulars of Saregama Pic., RPG Global Music Limited, Kolkata Metro Networks Limited and Open Media Network Private Limited shall be available for inspection at the registered office of the company.

Consolidated Financial Statements .

The Consolidated Financial Statements as stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges have been prepared by The Company in accordance with the requirements of Accounting Standard 21 "Consolidated Financial Statements" issued by The Institute of Chartered Accountants of India. The audited Consolidated Financial Statements together with Auditors' Report thereon form part of the Annual Report.

Conservation of Energy and Technology Absorption

A. Conservation of energy:

(a) Energy conservation measures taken;

During the year external experts conducted an energy audit and the recommendations have been implemented.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy;

No additional investments for reduction in energy consumption have been made or are proposed to be made presently.

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods;

The Company has achieved marginal savings during 2010-2011 due to the measures at (a) above.

B. Technology absorption:

(d) Efforts made in technology absorption as per Form Bunder:

FORM B (See Rule 2)

Form for disclosure of particulars with respect to absorption.

Research and Development (R & D)

1.Specific areas in which R & D carried out by the Company No Research & Development activities have been carried out by the Company during the year. 2.Benefits derived as a result of the above R & D -

3. Future plan of action -

4. Expenditure on R & D : Nil

(a) Capital -

(b) Recurring -

(c) Total -

(d) Total R & D expenditure as a percentage of total turnover -

Technology absorption, adaptation and innovation:

1. Efforts, in brief, made towards technology absorption, adaptation and innovation.

The technology for manufacturing audio cassettes was imported nearly 10 years earlier and has been absorbed fully.

2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution etc.

None.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

Not Applicable.

(a) Technology imported. -

(b) Year of import. -

(c) Has technology been fully absorbedRs. -

(d) If not fully absorbed, areas where this has not taken

place, reason therefore and future plans of action. -

Foreign Exchange earnings and outgo

a) The International business of The Company is handled by its foreign subsidiaries viz. Saregama Pic. and RPG Global Music Limited. Although, in line with the laid down policy of The Company, the foreign operations are directly handled by such subsidiaries, The Company actively assists and guides these companies in its marketing efforts, content creation, appointment of foreign sub-publishers etc. which leads to foreign exchange earnings for The Company.

b) Total foreign exchange used and earned:

(Rs. in Lacs)

Current Previous

Year Year

Foreign Exchange used 118.12 143.86

Foreign Exchange earned 590.64 740.38

Acknowledgement

Your Directors express their sincere thanks to all stakeholders including the employees, artistes, composers, musicians, film producers and shareholders for their continued support and cooperation.

By Order of the Board

Kolkata, r. p. Goenka

6th July, 2012 Chairman

 
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