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Notes to Accounts of Sun TV Network Ltd.

Mar 31, 2016

1 Litigations & Claims

Note 1 :

a) Matters wherein management has concluded the Company''s liability to be probable and have accordingly provided for in the books. Refer Note 37.

b) Matters wherein management has concluded the Company''s liability to be possible and have accordingly disclosed under Note (2) Contingent Liability

c) Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceeding and claims, in different stages of process, in relation to civil and criminal matters.

* The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

The Company has received demand of income tax disallowing certain expenditure claimed in Assessment Year 2013-14. The Company has made an appeal against the said demand and based on the legal advise obtained by it, the management believes that the Company''s claim is likely to be accepted by the appellate authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the company has received a formal show cause notice containing a provisional demand of Rs. 63.13 crores. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 61.08 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

***The Company received show cause notices from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices / orders received with various authorities. The Company based on the judicial pronouncements and other arguments believes its position is likely to be accepted by the authorities.

2 Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on non - cancellable operating lease. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out certain parts of its owned corporate office building to its related parties. These non cancellable leases have remaining terms of between 1 and 10 years. As per para 46 of Accounting Standard 19 Leases issued by the Institute of Chartered Accountants of India, the Gross block value of such leased property determined based on the area occupied aggregates to Rs. 19.25 crores (Previous Year - 19.92 crores) and the accumulated depreciation and net book value of the same was amounted to Rs. 6.42 crores (Previous Year - 5.80 crores) and Rs. 12.83 crores (Previous Year - 14.12 crores) respectively.

3 Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

4 Related party transactions

Names of related parties

1. Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited Kal Airways Private Limited

Kal Cables Private Limited Kal Publications Private Limited

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Udaya FM Private Limited Sun Foundation

Sun Distribution Services Private Limited Murasoli Maran Family Trust

Sun Business Solutions Private Limited Kal Media Services Private Limited

SpiceJet Limited (Upto February 23, 2015)

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

4. Associates of South Asia FM Limited

AV Digital Networks (Hyderabad) Private Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

5. Key Management personnel

Mr. Kalanithi Maran – Executive Chairman

Mr. K Vijaykumar – Managing Director and Chief Executive Officer

Mrs. Kavery Kalanithi – Executive Director

Mr. V C Unnikrishnan – Chief financial Officer

Mr. R. Ravi – Company Secretary

6. Relatives of Key Management personnel

Mrs. Mallika Maran

5 Segment information

The Company considers business segments as its primary segment. The Company''s operations predominantly relate to Media and Entertainment and, accordingly, this is the only primary reportable segment.

6 Investment in Subsidiaries operating in Radio business

Under the relevant frameworks of the Ministry of Information and Broadcasting of the Government of India (''MIB''), the Company, its subsidiaries and its investees involved in FM Radio operations had submitted applications to migrate existing FM Radio licenses (including six of which expired on March 31, 2015 and others expiring on various dates in FY 2016-17 and thereafter) from Phase II to the Phase III licensing regime as well as applications for participating in the e-auction process for new FM Radio frequencies in the Phase III licensing regime. The Company has direct / indirect investments in FM Radio operations aggregating Rs 620.20 crores, the recoverability of which is dependent upon maintaining profitable operations.

Two investees of the Company were permitted to participate in e-auction process based on a favourable order of the Delhi High Court. The Union of India''s appeal there against has been dismissed by the Hon''ble Supreme Court, thereby setting aside the Government''s rejection of the applications citing security reasons; Subsequent to the balance sheet date, (a) two investees have been granted licences in respect of 3 stations, for which the Grant of Permission Agreement (''GOPA'') has been signed; (b) the MIB has offered migration of existing licenses owned by the Company''s investees to the Phase III licensing regime subject to payment of the requisite fees and compliance with other terms and conditions, which the management is confident of complying with.

With respect to the Company and its subsidiaries, (a) An interim order of the Madras High Court had permitted these Companies to participate in the e-auctions in Phase III. (b) With reference to migration from Phase II to Phase III stated above, the relevant companies have been permitted to continue existing operations by way of interim orders by the Madras High court. While the matter continue to be sub-judice at the Madras High Court, having regard to the recent judgment of the Supreme Court as well post-year end events, in relation to investees of the Company, management is confident of receiving the required approvals against the applications by the Company and its subsidiaries, to enable continued profitable operations of these FM Radio stations and the recoverability of the Company''s investments, direct and indirect, in its radio operations.

In the third quarter of the current year, the Company has also made additional investments of Rs 157.80 crores in South Asia FM Limited ("SAFM"), a subsidiary, against a rights issue by SAFM towards funding new licences and the migration plan as per Phase III licensing regime.

7 Provisional Attachment order from Enforcement Directorate

During the quarter ended June 30, 2015, the Company and one of its subsidiaries, South Asia FM Limited ("SAFM"), received an order from the Enforcement Directorate, Ministry of Finance, Government of India, ("Enforcement Directorate") provisionally attaching certain Freehold Land and Buildings of the Company aggregating Rs. 266 crores, and fixed deposits with banks and mutual fund investments of SAFM aggregating Rs. 21.34 crores, under the Prevention of Money Laundering Act, 2002 ("PMLA") in connection with an investigation not involving the Company. With reference to the Provisional Attachment Order ("PAO") under PMLA, the Company has filed a Special Leave Petition ("SLP") challenging the said Order before the Hon''ble Supreme Court of India which has stayed the adjudication proceedings under the PMLA and accordingly the entities continue to be in full possession of these assets. Based on legal advise, management is confident that the said PAO is not legally tenable and is confident of a favourable outcome in due course and, accordingly, is of the view that no accounting adjustments are considered necessary in these financial statements in this regard.

8 Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2015

1. Corporate Information

Sun TV Network Limited ('Sun TV' or 'the Company') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange ('BSE') and the National Stock Exchange ('NSE') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company's flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company's film production / distribution division 'Sun Pictures' undertakes production / distribution of movies in the Tamil language. The Company also has the license to operate an Indian Premier League ('IPL') franchise "Sun Risers Hyderabad".

2. Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2015, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 11.25 /- share (March 31,2014: Rs. 9.50 /- share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Export Obligations

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to six to eight times the duty saved to be fulfilled within a period of six to eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 42.28 crores (March 31,2014 Rs. 64.19 crores )

4. Royalty Payable to Ministry of Information and Broadcasting ('MIB')

The Group has obtained licenses to permit them to carry FM operations in Chennai, Coimbatore and Tirunelveli. The Group is required to pay royalty of 4% of gross revenue earned from these FM Operations during the financial year or 2.5 % of One Time Entry Fees paid, whichever is higher to Ministry of Information and Broadcasting, as required by terms of requirements of the Grant of Permission Agreement between Sun TV Network Limited ("the Permission Holder") and Ministry of Information and Broadcasting ('MIB') dated September 4, 2006 ("GOPA").

5. Franchise rights commitments

As per the terms of the franchise agreement entered into by the Company with the BCCI, the Company has a commitment to pay BCCI, Rs. 85.05 crores per annum for the 2014 season to 2017 season. From the 2018 IPL season, the Company is required to pay license fees at 20% on the Franchise Income earned during the relevant year from the operation of the IPL franchise to BCCI. In the current year the Company has paid an amount aggregating to Rs. 25.52 crores as franchise license fee for the 2015 IPL season.

6. Litigations & Claims

a) Matters wherein management has concluded the Company's liability to be probable and have accordingly provided for in the books. Refer Note 38.

b) Matters wherein management has concluded the Company's liability to be probable and have accordingly disclosed under Note (2) Contingent Liability

c) Matters wherein management is confident of succeeding in these litigations and have concluded the liability to the Company to be remote. This is based on the relevant facts of judicial precedents and as advised by legal counsel which involves various legal proceeding and claims, in different stages of process, in relation to civil and criminal matters.

7. Contingent liability

Particulars March 31, 2015 March 31, 2014

Income Tax* 331.14 276.86

Customs Duty** @ 63.63 63.63

Service tax *** 28.26 -

423.03 340.49

* The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company's appeal in respect of various years has been allowed by both the first and the second appellate authorities in the previous years. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

The Company has received demand of income tax disallowing certain expenditure claimed in Assessment Year 2012-13. The Company has made an appeal against the said demand and based on the legal advise obtained by it, the management believes that the Company's claim is likely to be accepted by the appellate authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 0.50 crores on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company's claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed the Company has received a formal show cause notice containing a provisional demand of Rs. 63.13 crores in the previous year. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 61.08 crores under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

***The Company received show cause notices from the Service tax department seeking service tax on certain services and disallowances of input credit availed on certain services. The Company has filed appeals for all such show cause notices / orders received with various authorities. The Company based on the judicial pronouncements and other arguments believes its position is likely to be accepted by the authorities.

Operating leases (As a lessor)

The Company has leased out certain parts of its office buildings to its related parties. These non cancellable leases have remaining terms of between 1 and 10 years. As per para 46 of Accounting Standard 19 Leases issued by the Institute of Chartered Accountants of India, the gross block value of such leased property determined based on the area occupied aggregates to Rs.19.92 crores and the accumulated depreciation and net book value of the same was amounted to Rs.5.80 crores and Rs.14.12 crores respectively.

8. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

9. Related party transactions

Names of related parties

1. Individual owning an interest in voting power of the Company that gives them control

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited SpiceJet Limited (Upto February 23, 2015)

Kal Cables Private Limited Kal Publications Private Limited

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Udaya FM Private Limited Sun Foundation

Sun Distribution Services Private Murasoli Maran Family Trust Limited

Sun Business Solutions Private Kal Media Services Private Limited Limited Kal Airways Private Limited

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

4. Associates

AV Digital Networks (Hyderabad) Private Limited Asia Radio Broadcast Private Limited Digital Radio (Kolkata) Broadcasting Limited Metro Digital Networks (Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran - Executive Chairman

Mrs. Kavery Kalanithi - Executive Director

Mr. K Vijaykumar - Managing Director and Chief Executive Officer

6. Relatives of Key Management personnel

Mrs. Mallika Maran

10. Provisional Attachment order from Enforcement Directorate

Subsequent to March 31 2015, the Company and one of its subsidiaries, South Asia FM Limited ("SAFM"), have received an order from the Enforcement Directorate, Ministry of Finance, Government of India, provisionally attaching Freehold Land and Buildings of the Company aggregating Rs.266.76 crores and fixed deposits with banks and mutual fund investments aggregating Rs. 21.34 crores of SAFM, under the Prevention of Money Laundering Act, 2002 in connection with an investigation not involving the Company / SAFM. Based on the legal opinion received, the Management is confident that the said Provisional Attachment Order by the Enforcement Directorate is not tenable against the Company and / or SAFM. The Company has filed a Writ Petition challenging the said Order and the matter is pending before the Hon'ble High Court of Madras and management is confident of a favourable outcome in due course. Accordingly, the management is of the view that no accounting adjustments are considered necessary in these financial statements in this regard. Furthermore, the Company / the Group continue to be in full possession of the assets sought to be attached and continue to use the same in the normal course of its business.

11. Investment in Subsidiaries operating in Radio business

The Ministry of Information and Broadcasting of the Government of India ('MIB') has, during the year, invited applications for the e-Auction of Private FM Radio Phase - III. The Company, its subsidiaries and its investees have filed applications to migrate their existing FM Radio licenses (including three of which expired on 31 March 2015 and others expiring on various dates in FY 2016-17 and thereafter) from Phase II to the Phase III licensing regime ("FM License Migration Applications"), which are currently being processed by the MIB and their communication is awaited. Management is confident of receiving the approvals for the Company's FM License Migration Applications, which is essential for the continued operations of these FM Radio stations and the recoverability of the Company's investments, direct and indirect, in its radio operations / investees. Accordingly, no impairment to asset values and / or diminution other than temporary in the value of the related assets/investments, have been considered necessary in this regard.

12. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year's classification.

As per our report of even date.


Mar 31, 2014

1. Corporate Information

Sun TV Network Limited (''Sun TV'' or ''the Company'') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange (''BSE'') and the National Stock Exchange (''NSE'') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company''s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company''s film production / distribution division ''Sun Pictures'' undertakes production / distribution of movies in the Tamil language. The Company also has the license to operate an Indian Premier League (''IPL'') franchise "Sun Risers Hyderabad".

2 Current investments

Current investments (valued at lower of cost and fair value, unless stated otherwise)

3. Capital and other commitments

b) Export Obligations

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to six times the duty saved to be fulfilled within a period of six to eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 641.9 million (March 31, 2013 Rs. 1,135.3 million)

c) Royalty Payable to Ministry of Information and Broadcasting (''MIB'')

The Company has obtained licenses to permit them to carry FM operations in Chennai, Coimbatore and Tirunelveli. The Company is required to pay royalty of 4% on the Gross revenues earned during the financial year from these FM operations, as required by terms of requirements of the Grant of Permission Agreement between Sun TV Network Limited ("the Permission Holder") and Ministry of Information and Broadcasting (''MIB'') dated September 4, 2006 ("GOPA").

d) Franchise rights commitments

As per the terms of the franchise agreement entered into by the Company with the BCCI, the Company has a commitment to pay BCCI, Rs. 850.5 million per annum for the 2014 season to 2017 season. From the 2018 IPL season, the Company is required to pay license fees at 20% on the Franchise Income earned during the relevant year from the operation of the IPL franchise to BCCI. In the current year the Company has paid an amount aggregating to Rs. 255.2 million as franchise license fee for the 2014 IPL season.

4. Contingent liabilities

Particulars March 31, 2014 March 31, 2013

Income Tax* 2,768.6 2,039.8

Customs Duty**@ 636.3 615.8

Total 3,404.9 2,655.6

*The Company received demands of income tax disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by both the first and the second appellate authorities in the current year. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

The Company has received demand of income tax disallowing certain expenditure claimed in Assessment Year 2008- 09. The Company has made an appeal against the said demand and based on the legal advise obtained by it, the management believes that the Company''s claim is likely to be accepted by the appellate authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 5.0 million on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ Further to enquiries by the customs authorities on customs duty exemptions availed by the Company in the previous year, the Company has received a formal show cause notice containing a provisional demand of Rs. 631.3 million. Then the Company has filed its responses to this notice and has also deposited a sum of Rs. 610.8 million under protest pending final resolution of the matter. The Management has been advised by senior counsels that appropriate legal remedies are available to the Company in this matter and is accordingly confident of recovering the duty paid.

The Company is involved in certain legal proceedings and claims in relation to civil and criminal matters. These legal proceedings are currently pending adjudication before various courts and tribunals. Based on a review of the relevant facts and judicial precedents and as advised of its legal counsels, management is confident of succeeding in these litigations and consequently no provision has been made in the financial statements.

5. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on non - cancellable operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out its office buildings. These non cancellable leases have remaining terms of between 1 and 3 years.

6. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period over which the obligation is to be settled. The 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. The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

7. Related party transactions

Names of related parties

1. Controlling Party Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Publications Private Limited Sun Foundation

SpiceJet Limited Murasoli Maran Family Trust

Udaya FM Private Limited D.K. Enterprises Private Limited

Sun Direct TV Private Limited Kungumam Nithiyagam Private Limited

Sun Distribution Services Private Limited Kal Comm Private Limited

Kal Investments (Madras) Private Limited Kal Media Services Private Limited

Kal Airways Private Limited Kal Cables Private Limited

Kal Holdings Private Limited Sun Business Solutions Private Limited

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

4. Associates

AV Digital Networks (Hyderabad) Private Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran – Executive Chairman

Mrs. Kavery Kalanithi – Executive Director

Mr. K Vijaykumar – Managing Director and Chief Executive Officer

6. Relatives of Key Management personnel

Mrs. Mallika Maran

8. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

1. Corporate Information

Sun TV Network Limited (''Sun TV'' or ''the Company'') was incorporated on December 18, 1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange (''BSE'') and the National Stock Exchange (''NSE'') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company''s flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company''s film production / distribution division ''Sun Pictures'' undertakes production / distribution of movies in the Tamil language. During the current year, the Company has acquired license to operate an Indian Premier League (''IPL'') franchise in the city of Hyderabad from the Board of Control for Cricket in India (''BCCI'').

2. Contingent liabilities

March 31, 2013 March 31, 2012

Income Tax* 2,039.8 1,488.6

Customs Duty**@ 615.8 5.0

Total 2,655.6 1,493.6

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company''s appeal in respect of various years has been allowed by the appellate authority in the current year. Accordingly, management believes that based on the favourable judgment as well as relying on judicial pronouncements and other arguments, its position is likely to be accepted by the revenue authorities.

** The Company has received demand for differential customs duty aggregating to Rs. 5.0 million on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company''s claim is likely to be accepted by the authorities.

@ In response to enquiries by the Customs Authorities on certain customs duty exemptions availed by the Company in the previous years, the Company has deposited a sum of Rs. 610.8 million under protest in the current year, pending final resolution of the matter. The Management is advised by Senior Counsels that appropriate legal remedies are available and accordingly is confident of recovering the same.

3. Dues to Micro and Small Enterprises

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro and Small Enterprises during the current and previous year.

4. Un-hedged foreign currency balances

The Company does not use any derivative instruments to hedge its foreign currency exposure. The details of foreign currency balances which are not hedged as at the balance sheet date are as below:

5. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out its office buildings. These non cancellable leases have remaining terms of between 1 and 3 years.

6. Employees'' benefit plan - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period over which the obligation is to be settled.The 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.The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

7. Related party disclosures (to the extent not disclosed elsewhere in these financial statements)

1. Controlling Party

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Publications Private Limited Sun Foundation

Spicejet Limited Murasoli Maran Family Trust

Udaya FM Private Limited S & S Textiles

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Kungumam Publications Private Limited Kungumam Nithyagam Private Limited

Sun Distribution Services Private Limited Kal Comm Private Limited

(Formerly Sun 18 Media Services South Private Limited) Kal Media Services Private Limited

Kal Investments (Madras) Private Limited Kal Cables Private Limited

Kal Airways Private Limited Sun Business Solutions Private Limited

Kal Holdings Private Limited

3. Subsidiary Companies

South Asia FM Limited Kal Radio Limited

Sun TV Network Europe Limited (upto May 07, 2012)

4. Associates

AV Digital Networks (Hyderabad) Private Limited Asia Radio Broadcast Private Limited Digital Radio (Kolkata) Broadcasting Limited Metro Digital Networks (Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran - Executive Chairman Mrs. Kavery Kalanithi - Executive Director

Mr. K Vijaykumar - Managing Director and Chief Executive Officer

6. Relatives of Key Management personnel

Mrs. Mallika Maran

8. Franchise License Fee

On October 25, 2012 the Company acquired the right to operate a franchise in the Indian Premier League (''IPL'') for a consideration of Rs. 850.5 million, payable annually for a period of 5 years as per the terms of the franchise agreement entered into by the Company with the Board of Control for Cricket in India (''BCCI''). The annual franchise fee payable to the BCCI as above would be recognized as an expense on an accrual basis in accordance with terms of the Company''s agreement with the BCCI.

9. Prior year comparatives

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2012

1. Corporate Information

Sun TV Network Limited ('Sun TV' or 'the Company') was incorporated on December 18,1985 as Sumangali Publications Private Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange ('BSE') and the National Stock Exchange ('NSE') in India.The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom,Europe, Middle East.United States.Australia, South Africa and Canada. The Company's flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company's film production / distribution division 'Sun Pictures' undertakes production / distribution of movies in the Tamil language.

2. Share capital

a. Rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 9.50/share (March 31,2011: Rs. 8.75/share).

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Capital and other commitments

a) Export Obligations

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs.2,251.2 million (March 31, 2011 Rs.2,028.8 million).

b) License Fee to Ministry of Information and Broadcasting ('MIB')

The Company has obtained licenses to carry on FM radio operations in Chennai, Coimbatore and Tirunelveli. The Company is required to pay license fee at 4% on the Gross revenues earned during the financial year from these FM operations or 10% of the Reserve OTEF ('One Time Entry Fee') for the respective city, whichever is higher as required by terms of requirements of the Grant of Permission Agreement between Sun TV Network Limited ("the Permission Holder") and Ministry of Information and Broadcasting ('MIB') dated September 2006 ("GOPA").

4. Contingent liabilities

March 31, 2012 March 31, 2011

Income Tax* 1,488.6 719.4

Customs Duty** 5.0 5.0

Total 1,493.6 724.4

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Company's claim is likely to be accepted by Appellate authorities. Further, management believes that any disallowance of such expenses would result in deductible timing differences.

** The Company has received demand for differential customs duty on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such Appellate proceedings, management believes that the Company's claim is likely to be accepted by the authorities.

5. Dues to Micro and Small Enterprises

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro and Small Enterprises during the current and previous year.

6. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

Operating leases (As a lessor)

The Company has leased out its office buildings. These non cancellable leases have remaining terms of between 1 and 3 years.

7. Employee benefit plans-Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period over which the obligation is to be settled. The 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. The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

8. Related party disclosures (to the extent not disclosed elsewhere in these financial statements)

1. Controlling Party

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Publications Private Limited

Spicejet Limited

Udaya FM Private Limited

Sun Direct TV Private Limited

Kungumam Publications Private Limited

Sun 18 Media Services South Private Limited

Kal Comm Private Limited

Kal Airways Private Limited

Kal Holdings Private Limited

Sun Foundation

Murasoli Maran Family Trust

S & S Textiles

D.K. Enterprises Private Limited

Kungumam Nithyagam Private Limited

Kal Investments (Madras) Private Limited

Kal Media Services Private Limited

Kal Cables Private Limited

Sun Business Solutions Private Limited

3. Subsidiary Companies

South Asia FM Limited _

Kal Radio Limited_

Sun TV Network Europe Limited _

4. Associates

AV Digital Networks(Hyderabad)Private Limited Asia Radio Broadcast Private Limited Digital Radio(Kolkata) Broadcasting Limited Metro Digital Networks(Hyderabad) Private Limited Optimum Media Services Private Limited Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited Pioneer Radio Training Services Private Limited Digital Radio (Delhi) Broadcasting Limited South Asia Multimedia Private Limited

5 Key Management personnel

Mr. Kalanithi Maran - Executive Chairman (Chairman and Managing Director till April 19, 2012)

Mrs. Kavery Kalanithi - Executive Director (Joint Managing Director till April 19, 2012)

Mr. K Vijaykumar - Managing Director and Chief Executive Officer (Chief Operating Officer till April 19, 2012)

6. Relatives of Key Management personnel

Mrs. Mallika Maran

9. Prior year comparatives

Till the previous year, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. The current year's financial statements have been prepared and presented in accordance with the requirements of the revised Schedule VI, as notified under the Companies Act, 1956 and applicable to the Company. The Company has also reclassified previous year figures in accordance with these requirements.


Mar 31, 2011

1.1 Background

Sun TV Network Limited ('Sun TV or 'the Company') was incorporated on December 18,1985 as Sumangali Publications Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange ('BSE') and the National Stock Exchange ('NSE') in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Company's flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Company's film production / distribution division 'Sun Pictures' undertakes production / distribution of movies in the Tamil language.

During current year, the Company released a blockbuster movie simultaneously in three languages titled 'Enthiran' in Tamil and 'Robot' in Telugu and Hindi'. The Company earned revenues of Rs.179 crores, including Rs. 8 crores expected towards satellite rights which has not been included in the revenues in current year. The Company has spent Rs.132 crores on the production of this blockbuster.

22.3 Quantitative information as per the Act

Due to the nature of its business, the requirements relating to the quantitative details of sales and the information under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company except to the extent disclosed in these financial statements.

1.2 Contingent Liabilities not provided for

31.03.2011 31.03.2010

Income Tax* 719.4 587.7

Customs Duty** 5.0 5.0

724.4 592.7

* The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Company's claim is likely to be accepted by appellate authorities.

** The Company has received demand for differential customs duty on account of incorrect classification of certain assets imported during FY 2007-08. The Company has gone on appeal against the said demand, and based on its arguments at such appellate proceedings, management believes that the Company's claim is likely to be accepted by the authorities.

1.3 Dues to Micro, Small and Medium Enterprises

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the current and previous year.

1.4 Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

22.15 Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The Company does not currently have any estimates of the contribution to be paid to the plan during the next year. Accordingly, the same has not been disclosed.

The overall expected rate of return on assets is determined based on market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The 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.

1.5 Related party disclosures (to the extent not disclosed elsewhere in these financial statements)

1. Controlling Party

Mr. Kalanithi Maran

2. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited

Kal Cables Private Limited

Kal Investments (Madras) Private Limited

Network Cable Solutions Private Limited

Sun Direct TV Private Limited

Sun Academy Private Limited

Kungumam Publications Private Limited

Udaya FM Private Limited

Sun 18 Media Services South Private Limited

Kal Airways Private Limited

Kal Holdings Private Limited

Kungumam Nithyagam Private Limited

Kal Publications Private Limited

D.M.S Entertainment Private Limited

HFO Entertainment Private Limited

D.K. Enterprises Private Limited

Sun Foundation

Murasoli Maran Family Trust

Kal Media Services Private Limited

Spicejet Limited

Sun Business Solutions Private Limited

3. Subsidiary Companies

South Asia FM Limited

Kal Radio Limited

Sun TV Network Europe Limited

4. Associates

AV Digital Networks (Hyderabad) Private Limited

Asia.Radio Broadcast Private Limted

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited

Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

5. Key Management personnel

Mr. Kalanithi Maran - Chairman and Managing Director

Mrs. Kavery Kalanithi - Joint Managing Director

6. Relatives of Key Management personnel

Mrs. Mallika Maran

1.6 Export Obligation

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 2,028.8 million (March 31,2010 Rs. 243.9 million).

1.7 Prior year comparatives

Prior year figures have been regrouped wherever necessary to conform to the current year's classification.


Mar 31, 2010

1 Background

Sun TV Network Limited (Sun TV or the Company) was incorporated on December 18,1985 as Sumangali Publications Limited. The Company is engaged in producing and broadcasting satellite television and radio software programming in the regional languages of South India.

The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India. The Company currently operates television channels in four South Indian languages predominantly to viewers in India, and also to viewers in Sri Lanka, Singapore, Malaysia, United Kingdom, Europe, Middle East, United States, Australia, South Africa and Canada. The Companys flagship channel is Sun TV. The other major satellite channels of the Company are Surya TV, Gemini TV and Udaya TV. The Company is-also into the business of FM Radio broadcasting at Chennai, Coimbatore and Tirunelveli. The Companys film production/ distribution division Sun Pictures undertakes production / distribution of movies in the Tamil language.

2. Quantitative information as per the Act

Due to the nature of its business, the requirements relating to the quantitative details of sales and the information under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company except to the extent disclosed in these financial statements.

3. Contingent Liabilities not provided for

31.03.2010 31.03.2009

Income Tax 587.7 190.0

Customs Duty 5.0 --

592.7 190.0

The Company received demands of income tax in respect of earlier years, disallowing the manner of allowance claimed by the Company for certain expenses. The Company has gone on appeal against the said demands, and based on judicial pronouncements and other arguments, management believes that the Companys claim is likely to be accepted by appellate authorities.

4. Dues to Micro, Small and Medium Enterprises

Management has determined that there were no balances outstanding as at the beginning of the year and no transactions entered with Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, during the current year, based on the information available with the Company as at March 31,2010 and March 31,2009.

5. Leases

Operating leases (As a Lessee)

The Company has taken a KU band satellite transponder and office premises on operating lease. There are no escalation clauses in the lease agreements. Further, there are no restrictions imposed by the lease arrangements and there are no subleases.

6. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

1. Enterprises in which Key Management personnel or their relatives have significant influence

Kal Comm Private Limited Kungumam Nithyagam Private Limited

Kal Cables Private Limited Kal Publications Private Limited

Kal Investments (Madras) Private Limited D.M.S Entertainment Private Limited

Network Cable Solutions Private Limited HFO Entertainment Private Limited

Sun Direct TV Private Limited D.K. Enterprises Private Limited

Sun Academy Private Limited Sun Foundation

Kungumam Publications Private Limited Murasoli Maran Family Trust

Udaya FM Private Limited Kal Media Services Private Limited

2. Subsidiary Companies

South Asia FM Limited

Kal Radio Limited

Sun TV Network Europe Limited

3. Associates

AV Digital Networks (Hyderabad) Private Limited

Asia Radio Broadcast Private Limited

Digital Radio (Kolkata) Broadcasting Limited

Metro Digital Networks (Hyderabad) Private Limited

Optimum Media Services Private Limited

Digital Radio (Mumbai) Broadcasting Limited Deccan Digital Networks (Hyderabad) Private Limited

Pioneer Radio Training Services Private Limited

Digital Radio (Delhi) Broadcasting Limited

South Asia Multimedia Private Limited

4. Key Management personnel

Mr. Kalanithi Maran - Chairman and Managing Director Mrs. Kavery Kalanithi - Joint Managing Director

5. Relatives of Key Management personnel

Mrs. Mallika Maran

7. Export Obligation

The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rate of customs duty. Under the terms of the scheme, the Company has an export obligation equivalent to eight times the duty saved to be fulfilled within a period of eight years from date of import of the capital goods.

Accordingly, the Company currently has an export obligation aggregating to Rs. 243.9 million (March 31,2009 Rs. Nil).

8. Prior year comparatives

Prior year figures have been regrouped wherever necessary to conform to the current years classification.

 
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