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Notes to Accounts of Zee Entertainment Enterprises Ltd.

Mar 31, 2015

1. Corporate Information

Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is incorporated in the State of Maharashtra, India and is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The Company is mainly in the following businesses:

(a) Broadcasting of Satellite Television Channels;

(b) Space Selling agent for other satellite television channels;

(c) Sale of Media Content i.e. programs / flm rights / feeds / music rights

(Rs. Millions)

2015 2014

2 Contingent Liabilities a) Corporate Guarantees

- For subsidiaries, loans outstanding Rs./Millions Nil (Nil) 11,049 12,366

- For other related parties, loans outstanding Rs./Millions 791 (1,265)^ 791 1,396

b) Disputed Indirect Taxes 511 463

c) Disputed Direct Taxes * 4,873 2,355

d) Claims against the Company not acknowledged as debts # 626 624

e) Legal cases against the Company @ Not ascertainable Not ascertai -nable

^ Includes commitment for meeting shortfall funding towards revolving debt service reserve account (DSRA) obligation against financial facilities availed by the borrowers.

* Income tax demands mainly include appeals fled by the Company before various appellate authorities (including Dispute Resolution panel) against the disallowance of expenses / claims, non-deduction / short deduction of tax at source, transfer pricing adjustments etc. The management is of the opinion that its tax cases will be decided in its favour and hence no provision is considered necessary at this stage.

# The amount represents the best possible estimate arrived at on the basis of available information. The Company has engaged reputed advocates to protect its interests and has been advised that it has strong legal positions against such disputes.

@ The Company has received legal notices of claims / lawsuits fled against it relating to infringement of copyrights, defamation suits etc. in relation to the programs produced / other matters. In the opinion of the management, no material liability is likely to arise on account of such claims / law suits.

3 The Company has prefered a legal case against The Board of Control for Cricket in India (BCCI) for prematured termination of Media Rights contract for telecast of cricket matches between India and other countries in neutral territories outside India. The Hon''ble Arbitration Tribunal in November 2012 has passed an Arbitral award of Rs./Millions 1,236 (plus interest) in favour of the Company. BCCI has fled a petition before the High Court of Judicature at Madras challenging the Tribunal Award. Accordingly, pending fnal outcome and receipt of the award amount, effect has not been given in these financial statements.

4 Capital and Other Commitments

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs./Millions 394 (155).

(b) Other commitments as regards media content and others are Rs./Millions 8,410 (3,016). (c ) Uncalled liability on investments committed Rs./Millions 380 (380).

(d) The Company has committed to provide continued financial support to various subsidiaries - Amount not ascertainable.

(b) Commission payable to Non-Executive Directors of Rs./Millions 12 (10) based on Profits for the year ended 31 March 2015 is included in Legal and Professional charges under Note 23 "Other expenses".

5 The Company has been deploying its surplus funds by way of inter corporate deposits, debt instruments etc. and the parties are regular in the payment of interest and hence considered good.

6 Operational cost and other expenses are net off recoveries Rs./Millions 391 (404).

7 Micro, Small and Medium Enterprises

The Company has no dues to Micro, Small and Medium enterprises as at 31 March, 2015, on the basis of information provided by the parties and available on record. Further, there is no interest paid / payable to micro and small enterprises during the year.

8 Employee benefits

As per Accounting Standard 15 "Employee benefits", the disclosures are as under:

A Defned Benefit Plans

The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee Benefit entitlement and measures each unit separately to build up the fnal obligation. The obligation for leave benefits (non funded) is also recognised using the projected unit credit method.

B Defned contribution plan:

"Contribution to provident and other funds" is recognised as an expense in Note 21 "Employee benefits expense" of the Statement of Profit and Loss.

9 Related Party Transactions

(i) List of Parties where control exists Subsidiary Companies (a) Wholly owned (Direct and indirect subsidiaries)

Asia Multimedia Distribution Inc.; Asia Today Limited; Asia TV Limited; ATL Media FZ-LLC; Eevee Multimedia Inc.; Essel Vision Productions Limited; Expand Fast Holdings (Singapore) Pte. Limited; OOO Zee CIS LLC; OOO Zee CIS Holding LLC; Taj Television (India) Private Limited; Taj TV Limited; Zee Multimedia (Maurice) Limited; Zee Multimedia Worldwide (Mauritius) Limited; Zee Sports Limited; Zee Technologies (Guangzhou) Limited; Zee Entertainment Middle East FZ-LLC (earlier kown as Zee Teleflms Middle East FZ-LLC); Zee TV South Africa (Proprietary) Limited; Zee TV USA Inc.

(b) Others - Direct

Zee Turner Limited (extent of holding 74%); India Webportal Private Limited (extent of holding 51%)

(ii) Associates

Aplab Limited (extent of holding 26.42%); Idea Shop Web and Media Private Limited (Held through India Webportal Private Limited) (extent of holding 38.61%); Asia Today Thailand Limited (Held through Asia Today Limited) (extent of holding 25%)

(iii) Joint Venture (held through Zee Turner Limited)

Media Pro Enterprise India Private Limited (extent of holding 50%)

(iv) Other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year.

Agrani Wireless Services Limited; Bombay Mobile Softwares Private Limited; Broadcast Audience Research Council; Cyquator Media Services Private Limited; Digital Subscriber Management and Consultancy Services Private Limited; Diligent Media Corporation Limited; Dish Infra Services Private Limited; Dish TV India Limited; Essel Business Excellence Services Limited; Essel Propack Limited; Essel Corporate Resources Private Limited; Essel Finance Business Loans Limited; Essel Finance Management LLP; Essel Shyam Communication Private Limited; Essel Solar Energy Private Limited; Himgiri Zee University; Indian Cablenet Company Limited; Intrex India Private Limited; ITZ Cash Card Limited; Pan India Network Infravest Private Limited; Pan India Network Limited; Pri Media Services Private Limited; Real Media FZ-LLC; Siti Cable Network Limited; Smart Wireless Private Limited; Tapasvi Mercantile Private Limited; Veria International Limited; Zee Akash News Private Limited; Zee Learn Limited; Zee Media Corporation Limited.

Directors / Key Management Personnel

Dr. Subhash Chandra (Non Executive Director), Mr. Punit Goenka (Managing Director & CEO), Mr. Subodh Kumar (Executive Vice Chairman).

Disclosure in respect of material related parties which account for 10% or more of transactions during the year:

a. Fixed assets purchased during the year, Taj TV Limited Rs./Millions 34 (Nil); Digital Subscriber Management and Consultancy Services Private Limited Rs./ Millions 13 (Nil); Dish TV India Limited Rs./Millions 3 (8); Siti Cable Network Limited Rs./Millions Nil (1); Zee Learn Limited Rs./Millions 11 (Nil). Fixed assets sold during the year, Ta j Television (India) Private Limited Rs./Millions 0 (Nil); Zee Media Corporation Limited Rs./ Millions 2 (Nil).

b. Non-current investments - Subsidiaries, additions during the year include India Webportal Private Limited Rs./Millions

Nil (49); Essel Vision Productions Limited Rs./Millions Nil (20). Provision for diminution in value of investments Zee Sports Limited Rs./Millions 1 (1); Aplab Limited Rs./Millions 20 (20).

c. Loans, advances and deposits given to Asia Today Limited Rs./Millions 614 (2,261); Broadcast Audience Research Council Rs./Millions 50 (Nil); Cyquator Media Services Private Limited Rs./ Millions 2 (19); Digital Subscriber Management and Consultancy Services Private Limited Rs./Millions 340 (Nil).

d. Loans, advances and deposits repayment received from Essel Vision Productions Limited Rs./Millions Nil (42); Cyquator Media Services Private Limited Rs./Millions Nil (21); Essel Corporate Resources Private Limited Rs./ Millions Nil (22); Zee Media Corporation Limited Rs./Millions Nil (10).

e. Loans, advances and deposits balances outstanding at year end include Asia Today Limited Rs./ Millions 6,171 (5,383); Broadcast Audience Research Council Rs./Millions 45 (Nil); Cyquator Media Services Private Limited Rs./Millions 30 (28); Digital Subscriber Management and Consultancy Services Private Limited Rs./ Millions 340 (Nil).

f. Other receivable balances include Asia Today Limited Rs./Millions 171 (435); Taj Television (India) Private Limited Rs./Millions 61 (84); Taj TV Limited Rs./ Millions 51 (50); Zee Sports Limited Rs./ Millions 33 (33); Zee Turner Limited Rs./ Millions 8 (428); Media Pro Enterprise India Private Limited Rs./Millions 0 (Nil); Dish Infra Services Private Limited Rs./Millions 3 (Nil); Essel Finance Management LLP Rs./Millions 4 (Nil); ITZ Cash Card Limited Rs./Millions 2 (0); Zee Media Corporation Limited Rs./Millions 8 (Nil).

g. Purchase of Media content includes - Asia Today Limited Rs./Millions 307 (Nil); Essel Vision Productions Limited Rs./ Millions 1,312 (1,381); Taj TV Limited Rs./ Millions Nil (2,420); Zee Learn Limited Rs./Millions 49 (133).

h. Purchase of Services includes Production expenses - Zee Entertainment Middle East FZ- LLC Rs./Millions 2 (Nil); Essel Shyam Communication Private Limited Rs./ Millions 1 (8); Pan India Network Infravest Private Limited Rs./Millions 1 (6); Zee Learn Limited Rs./Millions 2 (51); Zee Media Corporation Limited Rs./ Millions Nil (3). Telecast cost - Dish TV India Limited Rs./Millions 115 (105); Essel Shyam Communication Private Limited Rs./Millions 10 (10). Rent expenses - Digital Subscriber Management and Consultancy Services Private Limited Rs./Millions 37 (Nil); Essel Corporate Resources Private Limited Rs./Millions 155 (151). Communication charges - Digital Subscriber Management and Consultancy Services Private Limited Rs./Millions 4 (Nil); Pan India Network Infravest Private Limited Rs./Millions 2 (3). Electricity and water charges - Siti Cable Network Limited Rs./Millions 2 (3). Legal and Professional charges - Essel Corporate Resources Private Limited Rs./Millions 139 (139). Hire and Service charges - Digital Subscriber Management and Consultancy Services Private Limited Rs./Millions 4 (Nil). Advertisement and Publicity expenses - India Webportal Private

Limited Rs./Millions 2 (3); Taj TV Limited Rs./Millions 2 (Nil); Cyquator Media Services Private Limited Rs./Millions Nil (16); Diligent Media Corporation Limited Rs./Millions 17 (2); Dish TV India Limited Rs./Millions 51 (67); Siti Cable Network Limited Rs./Millions 165 (35); Zee Media Corporation Limited Rs./ Millions 32 (15). Marketing, Distribution and Promotion expenses - Essel Vision Productions Limited Rs./Millions 22 (Nil); Dish TV India Limited Rs./Millions 22 (Nil); Indian Cablenet Company Limited Rs./ Millions 128 (69); Siti Cable Network Limited Rs./Millions 145 (128). Repairs & Maintenance Aplab Limited Rs./Millions 0 (0); Dish TV India Limited Rs./Millions 2 (Nil).

i. Corporate Social Responsibility expenses - Himgiri Zee University Rs./ Millions 90 (Nil).

j. Commission expenses - Taj Television (India) Private Limited Rs./Millions 5 (95); Commision paid reversal - Zee Turner Limited Rs./Millions Nil (2); Zee Learn Limited Rs./Millions Nil (0).

k. Bad debts written off - Taj Television (India) Private Limited Rs./Millions 29 (Nil); Zee Sports Limited Rs./Millions 1 (1).

l. Trade and other payables balances - Asia Today Limited Rs./Millions 120 (91); Essel Vision Productions Limited Rs./ Millions 22 (18); Aplab Limited Rs./Millions Nil (0); Dish TV India Limited Rs./Millions 119 (81); Indian Cablenet Company Limited Rs./Millions 19 (Nil); Real Media FZ-LLC Rs./Millions 15 (15); Siti Cable Network Limited Rs./Millions 22 (8); Zee Learn Limited Rs./Millions 0 (51). Due to Principals - Pending Remittances to Asia Today Limited Rs./Millions 432 (416).

m. Revenue from operations include Advertisement income - Essel Vision Productions Limited Rs./Millions 4 (Nil); Diligent Media Corporation Limited Rs./ Millions 1 (1); Dish TV India Limited Rs./ Millions 8 (17); Zee Media Corporation Limited Rs./Millions Nil (7). Subscription income - Taj Television (India) Private Limited Rs./Millions 7,891 (890); Media Pro Enterprise India Private Limited Rs./ Millions 1,472 (7,687); Dish TV India Limited Rs./Millions 1 (90). Commission

- Space selling - Asia Today Limited Rs./ Millions 124 (109). Transmission Income

- Asia Today Limited Rs./Million 253 (152); Zee Media Corporation Limited Rs./ Millions 36 (23). Sales - Media content to Asia Today Limited Rs./Millions 1,348 (1,412); Zee Entertainment Middle East FZ-LLC Rs./Millions 156 (138).

n. Other income includes Interest income - Asia Today Limited Rs./Millions 349 (198). Dividend income - Essel Propack Limited Rs./Millions 2 (1). Rent/Miscellaneous income includes - Taj Television (India) Private Limited Rs./Millions 9 (5); Taj TV Limited Rs./Millions 32 (37); Media Pro Enterprise India Private Limited Rs./Millions 1 (5); Dish TV India Limited Rs./Millions 28 (28); Siti Cable Network Limited Rs./Millions 13 (8); Zee Media Corporation Limited Rs./ Millions 51 (34). Balances written back includes - Asia Today Limited Rs./Millions 1 (Nil); Essel Vision Productions Limited Rs./ Millions 5 (Nil); Intrex India Private Limited

Rs./Millions 0 (Nil); Pan India Network Limited Rs./Millions 0 (Nil).

o. Reimbursement/recoveries - Asia Today Limited Rs./Millions 257 (250); Media Pro Enterprise India Private Limited Rs./ Millions 1 (4); Dish TV India Limited Rs./ Millions 55 (64); Siti Cable Network Limited Rs./Millions 12 (14); Zee Media Corporation Limited Rs./Millions 52 (59).

p. Trade Receivables balances, Asia Today Limited Rs./Millions 483 (1,217); Ta j Television (India) Private Limited Rs./Millions 2,071 (351); Media Pro Enterprise India Private Limited Rs./Millions 788 (1,847); Veria International Limited Rs./Millions 0 (Nil), Zee Media Corporation Limited Rs./Millions Nil (49).

q. Interest accrued on Loans includes Asia Today Limited Rs./Millions 91 (49).

r. Advances and deposits received balance include Asia TV Limited Rs./ Millions 1 (4).

s. Advances and deposits received during the year from Asia TV Limited Rs./Millions 31 (21); Zee Multimedia (Maurice) Limited Rs./Millions Nil (8).

t. Advances and deposits refunded during the year includes Asia TV Limited Rs./Millions 28 (25); Zee Multimedia (Maurice) Limited Rs./Millions Nil (7).

u. Short-term borrowings repaid of Tapasvi Mercantile Private Limited Rs./Millions 1,001 (Nil).

v. Corporate guarantees on behalf of Taj TV Limited Rs./Millions 11,049 (12,366); Broadcast Audience Research Council Rs./Millions 170 (170); Dish TV India Limited Rs./Millions Nil (417); Siti Cable Network Limited Rs./Millions 610 (791); Zee Learn Limited Rs./Millions 11 (18).

Note

Details of Remuneration to directors are disclosed in Note 29.

Non-Current investments as at 31 March 2015 are disclosed in Note 9.

"0" (zero) denotes amounts less than a million.

42 The Management is of the opinion that its international and domestic transactions are at arm''s length as per the independent accountants report for the year ended 31 March 2014. The Management continues to believe that its international transactions and the specified domestic transactions during the current financial year are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision of taxation.

43 Acquisition of Media Business Undertaking of Diligent Media Corporation Limited

a) Scheme of Arrangement ("the Scheme") under Sections 391 to 394 read with Section 78 and Sections 100 to 104 and other applicable provisions of the Companies Act 1956 / Companies Act 2013, between Diligent Media Corporation Limited ("DMCL" or "the Demerged Company") and the Company ("the Resulting Company") and their respective shareholders and creditors, was sanctioned by the Hon''ble High Court of Judicature at Mumbai on 12 September 2014 and the said Order was fled with the Registrar of Companies on 26 September 2014. Pursuant to the Scheme, the Media Business Undertaking of DMCL is demerged and vested with the Company on appointed date i.e. 31 March 2014 on going concern basis.

b) The Scheme has been given effect in the financial statements for the year ended 31 March 2015 and pursuant to the Scheme: i. The assets and liabilities of Media Business Undertaking of DMCL are transferred to and recorded in the books of account of the Company at their respective book values and the difference (Surplus) is credited to the General Reserve as under:

ii. 22,273,886 6% Non-Cumulative Redeemable Preference Shares of Rs. 1 each have been allotted to the equity shareholders of DMCL in the ratio of One fully paid preference shares of Rs. 1 each of the Company for every Four equity shares of Rs. 10 each held in DMCL.

10 Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a CSR Committee has been formed by the Company. The Company is required to spend Rs./Millions 193 of which Rs./Millions 168 has been spent on activities specified in Schedule VII of the Companies Act, 2013. The entire amount has been paid during the year.

11 Segment Information

The Company has presented Segment information on the basis of the consolidated financial statements as permitted by Accounting Standard – 17.

12 Prior Year Comparatives

Previous years figures have been regrouped, rearranged or recasted wherever necessary to conform to this year''s classification. Figures in brackets pertain to previous year.


Mar 31, 2014

1. (Rs. millions) 2014 2013 CONTINGENT LIABILITIES ~

a) Corporate Guarantees

- For subsidiaries, loans outstanding Rs./millions 1,401 (1,648) 12,366 7,986

- For other related parties, loans outstanding Rs./millions 1,095 (797) 1,226 928

b) Disputed Indirect Taxes 463 463

c) Disputed Direct Taxes * 2,355 2,637

d) Claims against the Company not acknowledged as debts # 624 773

e) Legal cases against the Company @ Not ascertai- nable Not ascertainable

* Income tax demands mainly include appeals filed by the Company before various appellate authorities (including Dispute Resolution panel) against the disallowance of expenses / claims, non-deduction / short deduction of tax at source, transfer pricing adjustments etc. The management is of the opinion that its tax cases will be decided in its favour and hence no provision is considered necessary at this stage.

# The amount represents the best possible estimate arrived at on the basis of available information. The Company has engaged reputed advocates to protect its interests and has been advised that it has strong legal positions against such disputes.

@ The Company has received legal notices of claims / lawsuits filed against it relating to infringement of copyrights, defamation suits etc in relation to the programs produced / other matters. In the opinion of the management, no material liability is likely to arise on account of such claims / law suits.

2. CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs./millions 155 (46).

(b) Other commitments as regards Television Content and others are Rs./millions 3,016 (2,954).

(c) Uncalled Liability on investments committed Rs./millions 380 (Nil).

(d) The Company has committed to provide continued financial support to various subsidiaries - Amount not ascertainable.

3. The Company has preferred a legal case against The Board of Control for Cricket in India (BCCI) for premature termination of Media Rights contract for telecast of cricket matches between India and other countries in neutral territories outside India. The Hon''ble Arbitration Tribunal in November 2012 has passed an Arbitral award of Rs./millions 1,236 (plus interest) in favour of the Company. BCCI has filed a petition before the High Court of Judicature at Madras challenging the Tribunal Award. Accordingly, pending final outcome and receipt of the award amount, effect has not been given in these financial statements.

4. The Company has been deploying its surplus funds by way of inter corporate deposits, debt instruments etc., which in the opinion of the management are considered good.

5. Operational cost and other expenses are net off recoveries Rs./millions 645 (447).

6. MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has no dues to Micro, Small and Medium enterprises as at 31 March, 2014, on the basis of information provided by the parties and available on record. Further, there is no interest paid / payable to micro and small enterprises during the year.

7. EMPLOYEE BENEFITS

As per Accounting Standard 15 "Employee Benefits", the disclosures are as under:

(a) Defined Benefit Plans

The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave benefits (non funded) is also recognised using the projected unit credit method.

(b) Defined contribution plan:

"Contribution to provident and other funds" is recognised as an expense in Note 20 "Employee benefits expense" of the Statement of Profit and Loss.

8. RELATED PARTY TRANSACTIONS

(i) List of Parties where control exists

Subsidiary Companies

(a) Wholly owned (Direct and indirect subsidiaries)

Asia Today Limited; Asia TV Limited; ATL Media FZ-LLC; Eevee Multimedia Inc.; Essel Vision Productions Limited; Expand Fast Holdings (Singapore) Pte. Limited; OOO Zee CIS LLC; 000 Zee CIS Holding LLC; Taj Television (India) Private Limited; Taj TV Limited; Zee Multimedia (Maurice) Limited; Zee Multimedia Worldwide (Mauritius) Limited; Zee Sports Limited; Zee Technologies (Guangzhou) Limited; Zee Telefilms Middle East FZ-LLC; Zee TV South Africa (Proprietary) Limited; Zee TV USA Inc.

(b) Others - Direct

Zee Turner Limited (extent of holding 74%); India Webportal Private Limited (extent of holding 51 %)

(ii) Associate

Aplab Limited (extent of holding 26.42%); Idea Web Shop and Media Private Limited (held through India Webportal Private Limited) (extent of holding 26%)

(iii) Joint Venture (held through Zee Turner Limited)

Media Pro Enterprise India Private Limited (extent of holding 50%)

(iv) Other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year.

Agrani Wireless Services Limited; Cyquator Media Services Private Limited; Diligent Media Corporation Limited; Dish TV India Limited; Essel Propack Limited; E-City Bioscope Entertainment Private Limited; Essel Corporate Resources Private Limited; Essel International Limited; Essel Shyam Communication Private Limited; Pan India Network Infra vest Private Limited; Pan India Network Limited; Real Media FZ-LLC; Siti Cable Network Limited; Smart Wireless Private Limited; Zee Akash News Private Limited; Zee Learn Limited; Zee Media Corporation Limited.

Directors / Key Management Personnel

Mr. Subhash Chandra (Non Executive Director), Mr. Punit Goenka (Managing Director & CEO), Mr. Subodh Kumar (Executive Vice Chairman).

Disclosure in Respect of Material Related Parties which account for 10% or more of transactions during the year:

a. Fixed Assets purchased during the year, Dish TV India Limited Rs./millions 8 (5); Siti Cable Network Limited Rs./millions 1 (Nil). Fixed Assets sold during the year, Zee Media Corporation Limited Rs./millions Nil (4).

b. Non-Current Investments - Subsidiaries, additions during the year include India Webportal Private Limited Rs./millions 49 (92); Essel vision Productions Limited XI millions 20 (Nil).

c. Loans, Advances and Deposits given to Asia Today Limited Rs./millions 2,261 (2,852); Essel Vision Productions Limited Rs./millions Nil (647); Cyquator Media Services Private Limited Rs./millions 19 (29); Zee Media Corporation Limited Rs./millions Nil (109).

d. Loans, Advances and Deposits repayment received from Asia Today Limited Rs./millions 121 (181); Essel Vision Productions Limited Rs./millions 42 (605); Zee Turner Limited Rs./millions 34 (553); Cyquator Media Services Private Limited Rs./millions 21 (26); Essel Corporate Resources Private Limited Rs./millions 22 (22); Zee Media Corporation Limited XI millions 10 (98).

e. Loans, Advances and Deposits balances outstanding at year end include Asia Today Limited Rs./millions 5,383 (2,852); Cyquator Media Services Private Limited Rs./millions 28 (30); Essel Corporate Resources Private Limited Rs./millions Nil (22); Zee Media Corporation Limited Rs./millions Nil (10).

f. Other receivable balances include Asia Today Limited Rs./millions 435 (401); Zee Turner Limited Rs./millions 428 (378).

g. Purchase of Television Content includes - Essel Vision Productions Limited Rs./millions 1,381 (402); Taj TV Limited Rs./millions 2,420 (Nil); Zee Learn Limited Rs./millions 133 (102).

h. Purchase of Services includes Production expenses - Zee Learn Limited Rs./millions 51 (53); Zee Media Corporation Limited Rs./millions 3 (Nil). Telecast cost - Dish TV India Limited Rs./millions 105 (102); Essel Shyam Communication Private Limited Rs./millions 10 (10). Rent expenses - Essel Corporate Resources Private Limited Rs./millions 151 (134). Communication charges - Pan India Network Infravest Private Limited Rs./millions 3 (2). Electricity and water charges - Siti Cable Network Limited Rs./millions 3 (1). Legal and Professional charges - Media Pro Enterprise India Private Limited Rs./millions Nil (1); Essel Corporate Resources Private Limited Rs./millions 139 (101); Cyquator Media Services Private Limited Rs./millions 0 (1); Siti Cable Network Limited Rs./millions 4 (Nil). Advertisement and Publicity expenses - Essel Vision Productions Limited Rs./millions Nil (0); India Webportal Private Limited Rs./millions 3 (0); Cyquator Media Services Private Limited Rs./millions 16 (21); Diligent Media Corporation Limited Rs./millions 2 (Nil); Dish TV India Limited Rs./millions 67 (36); Siti Cable Network Limited Rs./millions 35 (10). Marketing, Distribution and Promotion expenses - Essel Vision Productions Limited Rs./millions Nil (1); Siti Cable Network Limited Rs./millions 128(198).

i. Commission expenses - Taj Television (India) Private Limited Rs./millions 95 (58) Commission paid reversal - Zee Turner Limited Rs./millions 2 (4).

j. Provision for doubtful debts and advances - Zee Sports Limited Rs./millions 1 (Nil).

k. Trade Payables / Other Payables balances - Asia Today Limited Rs./millions 91 (82); Essel Vision Productions Limited Rs./millions 18 (Nil); Aplab Limited Rs./millions 0 (Nil); Dish TV India Limited Rs./millions 81 (13); Real Media FZ-LLC Rs./millions 15 (12); Zee Learn Limited Rs./millions 51 (77). Due to Principals - Pending Remittances to Asia Today Limited Rs./millions 416 (509).

L. Revenue from Operations include Advertisement Income - Diligent Media Corporation Limited Rs./millions 1 (2); Dish TV India Limited Rs./millions 17 (15); Zee Media Corporation Limited Rs./millions 7 (Nil). Subscription income - Taj Television (India) Private Limited Rs./millions 890 (959); Media Pro Enterprise India Private Limited Rs./millions 7,687 (6,645); Dish TV India Limited Rs./millions 90 (180). Commission - Space Selling - Asia Today Limited Rs./millions 109 (118). Transmission Income - Asia Today Limited Rs./Million 152 (130); Zee Media Corporation Limited Rs./millions 23 (26). Sales- Television Content to Asia Today Limited Rs./millions 1,412 (1,074).

m. Other income includes Interest Income - Asia Today Limited Rs./millions 198 (39). Dividend Income - Essel Propack Limited Rs./millions 1 (1). Rent / Miscellaneous Income includes - Taj Television (India) Private Limited Rs./millions 5 (5); Taj TV Limited Rs./millions 37 (23); Media Pro Enterprise India Private Limited Rs./millions 5 (5); Dish TV India Limited Rs./millions 28 (28); Siti Cable Network Limited Rs./millions 8 (8); Zee Media Corporation Limited Rs./millions 34 (25).

n. Reimbursement / Recoveries - Asia Today Limited Rs./millions 405 (324); Zee Turner Limited Rs./millions 85 (7); Media Pro Enterprise India Private Limited Rs./millions 4 (3); Dish TV India Limited Rs./millions 64 (48); Siti Cable Network Limited Rs./millions 14 (14); Zee Media Corporation Limited Rs./millions 59 (39).

o. Trade Receivables balances, Asia Today Limited Rs./millions 1,217 (1,014); Taj Television (India) Private Limited Rs./millions 436 (508); Media Pro Enterprise India Private Limited Rs./millions 1,847 (2,146); Zee Media Corporation Limited Rs./millions 48 (Nil).

p. Interest accrued on Loans includes Asia Today Limited Rs./millions 49 (39).

q. Advances and Deposits received balance include Asia TV Limited Rs./millions 4 (Nil); Zee Multimedia (Maurice) Limited Rs./millions Nil (1).

r. Advances and deposits received during the year from Asia TV Limited Rs./millions 21 (Nil); Zee Multimedia (Maurice) Limited Rs./millions 8 (18).

s. Advances and deposits refunded during the year includes Asia TV Limited Rs./millions 25 (Nil); Zee Multimedia (Maurice) Limited Rs./millions 7 (17).

t. Corporate guarantees on behalf of Taj TV Limited Rs./millions 12,366 (7,986); Dish TV India Limited Rs./millions 417 (437); Essel International Limited Rs./millions Nil (95); Siti Cable Network Limited Rs./millions 791 (374).

Note:

Details of Remuneration to directors are disclosed in Note 28.

Non-Current Investments as at 31 March, 2014 are disclosed in Note 9.

"0" (zero) denotes amounts less than a million.

9. The Management is of the opinion that its international and domestic transactions are at arm''s length as per the independent accountants report for the year ended 31 March, 2013. The Management continues to believe that its international transactions and the specified domestic transactions during the current financial year are at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision of taxation.

10. In the meeting held on 17 December, 2013, the Board of Directors have approved a Scheme of Arrangement for acquisition of Media Business Undertaking of Diligent Media Corporation Limited (DMCL) by way of a demerger from DMCL and vesting with the Company, w.e.f. 31 March, 2014. Pending receipts of various regulatory / statutory approvals including approval of High Court and Members of the Company, effect has not been given in these financial statements.

11. SEGMENT INFORMATION

The Company has presented Segment information on the basis of the consolidated financial statements as permitted by Accounting Standard-17.

12. PRIOR YEAR COMPARATIVES

Previous years figures have been regrouped, rearranged or re casted wherever necessary to conform to this year''s classification. Figures in brackets pertain to previous year.


Mar 31, 2013

1 CORPORATE INFORMATION

Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is incorporated in the State of Maharashtra, India. The Company is mainly in the following businesses:

(a) Broadcasting of Satellite Television Channels;

(b) Space Selling agent for other satellite television channels;

(c) Sale of Television Content i.e. programs / film rights / feeds;

(d) Production and distribution of films.

2 LEASES

A. Operating Leases:

(a) The Company has taken office, residential facilities and plant and machinery (including equipments) etc. under cancellable / non-cancellable lease agreements that are renewable on a periodic basis at the option of both the Lessor and the Lessee. The initial tenure of the lease is generally from 11 months to 108 months.

3 CONTINGENT LIABILITIES

(Rs. millions)

2013 2012

a) Corporate Guarantees

- For subsidiaries, loans / commitments outstanding Rs./millions 1,648 (1,647) 7,986 2,946

- For other related parties, loans / commitments outstanding Rs./millions 797 (721) 928 1,727

b) Disputed Indirect Taxes 463 463

c) Disputed Direct Taxes * 2,637 2,719

d) Claims against the Company not acknowledged as debts # 776 657

e) Legal cases against the Company @ Not ascertainable Not ascertainable

* Income tax demands mainly include appeals filed by the Company before various appellate authorities (including Dispute Resolution panel) against the disallowance of expenses / claims, non-deduction / short deduction of tax at source, transfer pricing adjustments etc. The management is of the opinion that its tax cases will be decided in its favour and hence no provision is considered necessary at this stage.

# The amount represents the best possible estimate arrived at on the basis of available information. The Company has engaged reputed advocates to protect its interests and has been advised that it has strong legal positions against such disputes.

@ The Company has received legal notices of claims / lawsuits filed against it relating to infringement of copyrights, defamation suits etc in relation to the programs produced / other matters. In the opinion of the management, no material liability is likely to arise on account of such claims / law suits.

4 CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs./millions 46 (298).

(b) Other commitments as regards Television Content and others are Rs./millions 2,954 (3,278).

(c) The Company has committed to provide continued financial support to various subsidiaries - Amount not ascertainable.

5 The Company has prefered a legal case against The Board of Control for Cricket in India (BCCI) for prematured termination of Media Rights contract for telecast of cricket matches between India and other countries in neutral territories outside India. The Hon''ble Arbitration Tribunal in November 2012 has passed an Arbitral award of Rs./millions 1,236 (plus interest) in favour of the Company. BCCI has filed a petition before the High Court of Judicature at Madras challenging the Tribunal Award. Accordingly, pending final outcome and receipt of the award amount, effect has not been given in these financial statements.

6 The Company has been deploying its surplus funds as loans / inter corporate deposits etc. The borrowers are regular in repayment of principal and interest, hence are considered good.

7 Operational cost and other expenses are net off recoveries Rs./millions 440 (236).

8 MICRO, SMALL AND MEDIUM ENTERPRISES

The Company has no dues to Micro, Small and Medium enterprises during the year ended 31 March, 2013, on the basis of information provided by the parties and available on record.

9 EMPLOYEE BENEFITS

As per Accounting Standard 15 "Employee Benefits", the disclosures are as under:

A Defined Benefit Plans

The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave benefits (non funded) is also recognised using the projected unit credit method.

(a) Amounts recognised as an expense and included in the Note 20 "Employee benefits expense" are gratuity Rs./millions 35 (24) and leave encashment Rs./ millions 45 (28).

(b) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

B Defined contribution plan:

"Contribution to provident and other funds" is recognised as an expense in Note 20 "Employee benefits expense" of the Statement of Profit and Loss.

10 RELATED PARTY TRANSACTIONS

(i) List of Parties where control exists Subsidiary Companies

(a) Wholly owned (Direct and indirect subsidiaries)

Apac Media Ventures Limited; Asia Today Limited; Asia TV Limited; Expand Fast Holdings (Singapore) Pte. Limited; Essel Vision Productions Limited; OOO Zee CIS LLC; OOO Zee CIS Holding LLC; Taj TV Limited; Taj Television (India) Private Limited; Zee Multimedia (Maurice) Limited; Zee Multimedia Worldwide (Mauritius) Limited; Zee Sports Limited; Zee Technologies (Guangzhou) Limited; Zee Telefilms Middle East FZ-LLC; Zee TV South Africa (Proprietary) Limited; Zee TV USA Inc.

(b) Others - Direct

Zee Turner Limited (extent of holding 74%); India Webportal Private Limited (extent of holding 51%)

(ii) Associate

Aplab Limited (extent of holding 26.42%)

(iii) Joint Venture (held through Zee Turner Limited)

Media Pro Enterprise India Private Limited (extent of holding 50%)

(iv) Other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year. Agrani Wireless Services Limited; Cyquator Media Services Private Limited; Diligent Media Corporation Limited; Dakshin Media Gaming Solutions Private Limited; Dish TV India Limited; Essel Propack Limited; E-City Bioscope Entertainment Private Limited; Essel Corporate Resources Private Limited; Essel International Limited; Essel Shyam Communication Private Limited; Essel Walajahpet Poonamallee Toll Roads Private Limited; Pan India Network Limited; Pan India Network Infravest Private Limited; Real Media FZ-LLC; Siti Cable Network Limited; Smart Wireless Private Limited; Zee Learn Limited; Zee Akash News Private Limited; Zee News Limited.

Directors / Key Management Personnel

Mr. Subhash Chandra (Non Executive Director), Mr. Punit Goenka (Managing Director & CEO).

11 The international transactions with Associated Enterprises (AE''s) are at arm''s length price as per the independent accountants report for the year ended 31 March, 2012. Further, the Finance Bill, 2012 had sought to bring in certain class of domestic transactions in the ambit of the transfer pricing regulations with effect from 1 April, 2012. The Management is of the opinion that its international transactions with AE''s and the specified domestic transactions for the year are at arm''s length price and that the transfer pricing study will not have any impact on the amount of tax expense and provision of taxation in these financials.

12 The Board of Directors have approved a bonus to shareholders by way of issue of 6% Redeemable Preference Shares (RPS), in the ratio of 21 RPS of Rs. 1 each fully paid up for every equity share of Rs. 1 each held in the Company through a Court approved Scheme of Arrangement and subject to other statutory and regulatory approvals / exemptions. This being event after the date of balance sheet and is subject to regulatory and other approvals hence effect not given in these financials.

13 SEGMENT INFORMATION

The Company has presented Segment information on the basis of the consolidated financial statements as permitted by Accounting Standard - 17.

14 PRIOR YEAR COMPARATIVES

Previous years figures have been regrouped, rearranged or recasted wherever necessary to conform to this year''s classification. Figures in brackets pertain to previous year.


Mar 31, 2012

1. CORPORATE INFORMATION

Zee entertainment enterprises limited ("ZEEL" or "the company") is incorporated in the state of maharashtra, india. the company has been mainly in the following businesses during the year:

(a) Broadcasting of satellite television channels uplinked from india;

(b) space selling agent for other television channels;

(c) sale of television programs, films / movies and rights including films / movies and program feeds;

(d) production and distribution of films / movies.

Buyback of shares

Buy-back of the Company's Equity Shares through the open market route commenced on 27 July 2011 and concluded on 23 March 2012, wherein, the Company has bought back 19,372,853 Equity Shares of Rs 1 each. All these equity shares stands extinguished by execution of Debit Corporate Action(s) by the Company. Consequently the Paid-up Share Capital of the Company as at 31 March 2012 stands reduced to 958,770,077 Equity Shares of Rs 1 each.

Employees Stock option Scheme (ESoP):

The Company has instituted an Employee Stock Option Plan (ESOP 2009) as approved by the Board of Directors and Shareholders of the Company in 2009 for issuance of stock options convertible into equity shares not exceeding in the aggregate 5% of the issued and paid up capital of the Company as on 31 March 2009 i.e. up to 21,700,355 equity shares of Rs 1 each, to the employees of the Company as well as that of its subsidiaries and also to non-executive directors including independent Directors of the Company at the market price determined as per the Securities and Exchange Board of india (Employees Stock Options Scheme) Guidelines, 1999 (SEBi (ESOS) Guidelines). The said scheme is administered by the Remuneration Committee of the Board.

During the year ended 31 March 2011 and 31 March 2012, the Company did not grant any stock options. The options earlier granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. The options granted vests in the ratio of 50:35:15 at the expiry of one, two and three years from the date of grant and once vested, these would be exercisable at any time within a period of four years and the equity shares arising on exercise of options shall not be subject to any lock in. Upon exercise of 66,800 options, equivalent number of Equity Shares were issued and alloted during the financial year ended on 31 March 2012.

the options were granted to the employees / directors at an exercise price, being the latest market price as per the sEBI (Esos) Guidelines. in view of there being no intrinsic value on the date of the grant (being the excess of market price of share under the scheme over the exercise price of the option), the company is not required to account for the value of options as per the sEBi guidelines.

* includes cheques overdrawn Rs/millions 54 (163) and Rs/millions 214 (294) due to related parties.

# includes statutory dues, security deposits and advances from customers.

Dividend Rs/million 1 (1) unclaimed for a period of more than seven years is transferred to investor's Education and Protection Fund during the year and no amounts are due and outstanding to be credited to investor's Education and Protection Fund as at 31 March 2012.

2. LEASES

A. operating Leases:

(a) The Company has taken office, residential facilities and plant and machinery (including equipments) etc. under cancellable/ non-cancellable agreements that are renewable on a periodic basis at the option of both the Lessee and the Lessor. The initial tenure of the lease is generally from 11 months to 108 months.

(b) in respect of assets given under operating lease:

(i) The Company has given part of its buildings under cancellable operating lease agreement. The initial term of the lease is for 36 months.

(ii) the rental revenue for the year is Rs/millions 73 (69).

3. CoNTINGENT LIABILITIES

Rs millions

2012 2011

a) corporate Guarantees

- for subsidiaries, loans / commitments Rs/millions 1,647 (967) 2,946 2,439

- for other related parties, loans / commitments outstanding Rs/millions 721 (3,011) 1,727 4,114

b) Bank/counter guarantees outstanding 87 58

c) Letter of credit (Net of Liabilities Provided) 39 13

d) claims against the company not acknowledged as debts 657 751

e) Legal cases against the company Unascertainable Unas certainable

f) Disputed Direct taxes * 2,719 1,749

g) Disputed indirect taxes 463 475

* tax demands are raised on assessments on account of short deduction of tax at source, transfer pricing adjustment and certain disallowances which are disputed in Appeals before first Appellate Authorities and management is of the opinion that all these matters will be decided in its favour, hence no provisions are considered necessary at this stage.

4. CAPITAL AND oTHER CoMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs/millions 298 (91).

b) other commitments as regards programs, films/movie rights are Rs/millions 3,278 (2,659).

c) the company has commited to provide continued financial support to various subsidiaries - Amount Unascertainable.

Note: salary and Allowances includes basic salary, house rent allowance, leave travel allowance and performance bonus but excluding leave encashment and gratuity provided on the basis of actuarial valuation.

b) commission payable to Non-Executive independent Directors of Rs/millions 8 (13) based on profits for the year ended 31 march 2012.

c) foreign subsidiary has paid remuneration (salaries and allowances) of Rs/millions 4 (4) to a non-executive director.

5. the company has been deploying its surplus funds as short term demand loans / inter corporate deposits. the borrowers are regular in repayment of principal and interest, hence are considered good.

6. Exceptional items of Rs/millions Nil(197) represents profit on sale of Non-current investments (net).

7. Erstwhile ETc Networks Limited (ETc since merged) had taken over running business of Entertainment television Network Limited during the year 1999-2000 along with the benefits of contracts, agreements and approvals under which business is carried on and certain approvals are yet to be transferred / obtained in the name of erstwhile Etc or in the name of the company.

8. MICRo SMALL AND MEDIUM ENTERPRISES

the company has no dues to Micro, small and Medium enterprises during the year ended 31 March 2012, on the basis of information provided by the parties and available on record.

Notes:

(a) Amounts recognized as an expense and included in the Note 20 "Employee benefits expense" are gratuity Rs/ millions 24 (36) and leave encashment Rs/ millions 28 (33)

(b) The estimate of future salary increases considered in the actuarial valuation, taking into account the rate of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

B Defined contribution plan:

"Contribution to provident and other funds" is recognized as an expense in Note 20 of the Statement of Profit and Loss.

9. RELATED PARTY TRANSACTIoNS (i) List of Parties where control exists Subsidiary Companies

(a) Wholly owned

Apac media Ventures Limited; Asia today Limited; Asia Tv Limited; Expand fast Holdings (singapore) pte. Limited; ITM Digital private Limited; ooo Zee cis LLc; ooo Zee cis Holdings LLc; Taj Tv Limited; Taj television (india) private Limited; Zee multimedia (Maurice) Limited; Zee multimedia Worldwide (Mauritius) Limited; Zee sports Limited; Zee Technologies (Guangzhou) Limited; Zee Telefilms middle East FZ-LLc; Zee TV south Africa (proprietary) Limited; Zee TV UsA inc.; Zee sports international Limited (merged with Asia Today Limited during the year).

(b) others - Direct

Zee Turner Limited (extent of holding 74%); india Webportal private Limited (extent of holding 51%)

(ii) Associates

Aplab Limited (extent of holding 26.42%)

(iii) Joint Venture

media pro Enterprise india private Limited (extent of holding 50%)

(iv) other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year.

Agrani convergence Limited; Agrani Wireless services Limited; Asian sky shop Limited; cyquator media services private Limited; churu Trading company private Limited; Dakshin media Gaming solutions private Limited; Dish TV india Limited; Diligent media corporation Limited; Essel propack Limited; E-city Bioscope Entertainment private Limited, E-city Entertainment (india) private Limited*, E-city films ((india) private Limited*, E-city projects construction private Limited*, E-city property management services private Limited*, E-cool Gaming solutions private Limited, Essel corporate resources private Limited; Essel sports private Limited; Essel international Limited; Essel shyam communication private Limited; fun multiplex private Limited*; ITZ Trade Exchange Limited*, ITZ cash card Limited*, Jay properties private Limited; New media Broadcasting private Limited; pan india Network private Limited; pan india Network infravest private Limited; pan india paryatan private Limited*; procall private Limited; rama Associates Limited; real media FZ-LLc; siti Energy Limited*; smart Wireless private Limited; TALEEM research Foundation; Wire and Wireless (india) Limited; Zee Learn Limited; Zee Akash News private Limited; Zee News Limited.

* Not a related party during the current year.

Directors / Key Management Personnel

Ml subhash chandra, Mr. punit Goenka, Ml Ashok Kurien.

disclosure in respect of material related parties which account for 10% or more of the transactions

DURING THE YEAR:

a. Fixed Assets purchased during the year, Dish Tv india Limited Rs/millions 2 (Nil).

b. Loans, Advances and Deposits given to Taj television india Private Limited Rs/Milions 1,399 (139); Zee turner Limited Rs/millions 1,951 (Nil); Zee News Limited Rs/millions Nil (21); Wire and Wireless (india) Limited Rs/millions 0 (14); Essel corporate Resources Private Limited Rs/millions 45 (Nil).

c. Loans, Advances and Deposits repayment received from Zee turner Limited Rs/millions 2,177 (820); Taj television india Private Limited Rs/millions 1,126 (Nil); Wire and Wireless (india) Limited Rs/millions Nil (113); TALEEM Research Foundation Rs/Milions Nil (199); Jay Properties Private Limited Rs/millions Nil (66); Zee News Limited Rs/millions 21 (Nil), cyquator Media services Private Limited Rs/millions 36 (Nil); Pan india Network Private Limited Rs/millions 2 (Nil).

d. Loans, Advances and Deposits balances outstanding at year end include Zee sports Limited Rs/millions 31 (29); Zee Turner Limited Rs/millions 701 (928); Taj TV Limited Rs/millions 13 (2); Taj Television india Private Limited Rs/millions 450 (177); Zee News Limited Rs/millions Nil (21); cyquator Media services Private Limited Rs/millions Nil (36); Essel corporate Resources Private Limited Rs/millions 45 (Nil).

e. Purchase of Programs, Goods and services includes purchase of Programs - Taj TV Limited Rs/millions Nil (2,089); Zee News Limited Rs/millions 208 (Nil); Telecast cost - Asia Today Limited Rs/millions Nil (55); Dish TV india Limited Rs/millions 62 (42); Essel shyam communication Private Limited Rs/millions 10 (14). Advertisement and Publicity expenses - Taj Television india Limited Rs/ millions 20 (Nil); cyquator Media services Private Limited Rs/millions 12 (Nil); Diligent Media corporation Limited Rs/millions 3 (6); Dish TV india Limited Rs/millions 6 (3). Rent expenses - Essel corporate Resources Private Limited Rs/millions 134 (102). service charges - Essel corporate Resources Private Limited Rs/millions 84 (71). Business Promotion expenses - Wire and Wireless (india) Limited Rs/millions 172 (182).

f. commission - Zee Turner Limited Rs/millions 57 (261); Taj Television india Private Limited Rs/millions 36 (110); Provision for doubtful debts/advances - Zee sports Limited Rs/millions 31 (Nil). Provision for diminution in the value of investment - iTM Digital india Private Limited Rs/millions 10 (Nil).

g. Trade Payable balances, Principals pending Remittances to Asia Today Limited Rs/millions 713 (818); Purchase of Programs, Goods and services - Asia Today Limited Rs/millions 77 (68); Taj Television india Private Limited Rs/millions Nil (109); Wire and Wireless (india) Limited Rs/millions 8 (57); Essel sports Private Limited Rs/millions Nil (14); Real Media FZ-LLc Rs/millions 13 (16); Essel corporate Resources Private Limited Rs/millions 18 (Nil); Zee News Limited Rs/millions 78 (Nil).

h. Revenue from Operations (Net) include sales to Asia Today Limited Rs/millions 1,541 (986); Transmission fees - Asia Today Limited Rs/million 323 (256); Zee News Limited Rs/millions 25 (28); subscription income - Dish TV india Limited Rs/millions 400 (360), Media Pro Enterprise india Private Limited Rs/millions 3,500 (Nil). Advertisement income - Dish TV india Limited Rs/millions 58 (68); commission - Asia Today Limited Rs/millions 117 (115).

i. Trade Receivables balances, Asia Today Limited Rs/millions 1,812 (759); Dish TV india Limited Rs/millions 91 (137); Media Pro Enterprise india Private Limited Rs/millions 1,220 (Nil); cyquator Media services Private Limited Rs/millions 27 (Nil).

j. Other income includes Dividend received - Essel Propack Limited Rs/millions 1 (1); interest received includes Wire and Wireless (india) Limited Rs/millions Nil (13); Miscellaneous income includes rent income received - Zee Turner Limited Rs/millions 5 (11); Taj Television india Private Limited Rs/millions 3 (Nil); Media Pro Enterprise india Private Limited Rs/millions 3 (Nil); Diligent Media corporation Limited Rs/millions 2 (2); Dish TV india Limited Rs/millions 28 (25); Zee News Limited Rs/millions 25 (22); Wire and Wireless (india) Limited Rs/millions 4 (4). commission on corporate Guarantee - Taj Tv Limited Rs/millions 13 (Nil); Balances written back of Zee Turner Limited Rs/millions Nil (0), Agrani convergence Rs/millions Nil (2).

k. Corporate guarantees on behalf of Taj TV Limited Rs/millions 2,946 (2,439) Dish TV india Limited Rs/millions 1,469 (3,899); Wire and Wireless (india) Limited Rs/millions 229 (188).

Note

Details of Remuneration to directors are disclosed in Note 27.

"0" (Zero) denotes amounts less than a million.

10. SEGMENT INFoRMATIoN

The Financial Statements of the Company contain both the consolidated financial statements as well as the separate financial statements of the parent company. Hence, the Company has presented the segmental information on the basis of the consolidated financial statements as permitted by Accounting Standard - 17.

11. a) During the year, one of the Company's subsidiary Zee Turner Limited entered into 50:50 joint venture with Star Den Media Service Private Limited and formed company in the name of "Media Pro Enterprise india Private Limited (MPEiPL)" for distribution of channels distributed by Zee Turner Limited and Star Den Media Service Private Limited. MPEiPL has started operations w.e.f. 1 July 2011.

b) Zee Multimedia Worldwide Limited (ZMWL) and ZES Holdings Limited (ZES), both wholly owned foreign subsidiaries have merged with the Company w.e.f. 1 February, 2011, pursuant to the Scheme of Amalgamation approved by the Hon'ble High Court at Mumbai vide Order dated 10 June 2011. The effect to the Scheme has been given in the financial statements for the year ended 31 March 2011 and the difference between transferred assets and liabilities of Rs/ millions 2,076 is adjusted against General Reserve.

c) ZES Mauritius Limited (ZES Mauritius) and ZES Entertainment Studios Limited (ZES Ent) both wholly owned foreign subsidiaries of ZES Holdings Limited (ZES) have amalgamated with ZES on 18 March 2011 and 31 March 2011 respectively, as per the confirmation of Register of Companies, Republic of Mauritius. Hence, the transactions between the appointed date and the effective date are accounted in the financial statements of the company for the year ended 31 March 2011 and the difference of Rs 107,000 between assets and liabilities transferred is adjusted to General Reserve.

d) Pursuant to the Composite Scheme of Amalgamation and Arrangement ('the Scheme') between erstwhile ETC Networks Limited (ETC), Zee Learn Limited (ZLL) and the Company, ETC has merged with the Company on 31 March 2010. Subsequently, pursuant to the Scheme, the education business undertaking is demerged on 1 April 2010 at book value to ZLL and the difference between the book value of assets and liabilities transferred of Rs / millions 631 is adjusted against General Reserve and effect given in the financial statements for the year ended 31 March 2011.

12. prior year comparatives

Schedule Vi to the Companies Act, 1956 is revised effective from 1 April 2011 and has significantly impacted the disclosures and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classifications / disclosures.


Mar 31, 2010

BACKGROUND

Zee Entertainment Enterprises Limited ("ZEEL" or "the Company") is incorporated in the State of Maharashtra, India. The Company has been mainly in the following businesses during the year:

a) Broadcasting of Satellite Television Channels uplinked from India;

b) Advertisement canvassing agent for other television channels;

c) Sale of programs including movies and program feeds mainly to its subsidiaries for broadcasting on satellite television channels all over the world;

d) Production and Distribution of Movies.

1. Prior Year Comparatives

Previous years figures are regrouped, rearranged, or recast wherever necessary to confirm to this years classification. Current years figures are not comparable due to the restructuring [Refer Note 3].Figures in brackets pertain to previous year.

2. a) TV Program and movie rights are intangible assets as defined in AS - 26 but these are used for broadcasting

business hence considered and included in Inventories.

b) In Schedule 13, Operational Cost includes Production and Acquisition Cost of TV Program and movie rights and movies amortized / impaired, sold etc. The Company has impaired TV program and movie rights of Rs./Thousand 69,881 (Nil) during the year.

3. Restructuring

A) Acquisition of Regional General Entertainment Channel Business Undertaking of Zee News Limited:

a) The Scheme of Arrangement under Section 391 to 394 and other applicable provisions of the Companies Act, 1956 between Zee News Limited (ZNL) and the Company their respective shareholders and creditors was sanctioned by the Honble Bombay High Court at Mumbai on March 19, 2010 and the said order filed with the Registrar of Companies on March 29, 2010. Pursuant to the Scheme, the Regional General Entertainment Channel (RGEC) Business Undertaking of ZNL comprising of six television channels namely Zee Marathi, Zee Talkies, Zee Bangla, Zee Telugu , Zee Kannada, and Zee Cinemalu (broadcasting yet to be commenced), assets of Zee Gujrathi (a discontinued television channel) was demerged from ZNL,transferred and vested with the Company with effect from January 1, 2010.

B) Acquisition of the 9X Channel Business Undertaking of 9X Media Private Limited:

i. The Scheme of Arrangement (‘the scheme) under Section 391 to 394, read with sections 78, 100 to 104 of the Companies Act 1956 between 9X Media Private Limited ("Transferor Company") and the Company and their respective shareholders and creditors was sanctioned by the Honble High Court at Mumbai on September 9, 2010, and the said order filed with Registrar of Companies on September 22, 2010. Pursuant to the Scheme, the 9X Channel Business Undertaking (9X) of 9X Media Private Limited is demerged and vested with the Company on appointed date i.e. March 31, 2010 on a going concern basis at book values complying with the conditions and provisions of Section 2(19AA) of the Income Tax Act, 1961.

C) Amalgamation of ETC Networks Limited with the Company and Demerger of Education Business Undertaking from the Company:

i. The Composite Scheme of Amalgamation and Arrangement ("the composite scheme") between erstwhile ETC Networks Limited ("ETC") the Company Zee Learn Limited ("ZLL") and the Company and their respective shareholders and creditors was approved by the Honble High Court of Mumbai on July 16, 2010 and the said order filed with the Registrar of Companies on August 30, 2010. Pursuant to the Scheme the erstwhile ETC has merged and vested in the Company at fair values on the Appointed date i.e. March 31, 2010. And upon such merger, the Education Business Undertaking from the Company was demerged and vested with Zee Learn Limited on the Appointed Date April 1, 2010.

b) 4,413,488 Equity shares of Re. 1 each to be issued to the shareholders of ETC, as on the record date, in the ratio of ten equity shares of Re. 1 each of the Company for every eleven equity shares Rs. 10 each of ETC. Pending issue and allotment of shares, Rs./Thousand 4,413 has been credited to Share Suspense Account.

c) The authorized share capital of the Company stand increased by the amount of authorized share capital of the ETC of Rs. 649,200,000.

iii. Demerger of the Education Business Undertaking of the Company vested in to Zee Learn Limited as on April 1, 2010 pursuant to the Scheme:

a) The whole of the undertaking, assets, properties and liabilities of the Education Business undertaking demerged and vested in at book values with effect from appointed date i.e. April 1, 2010. Accordingly, this scheme has not been given effect to, in these financial statements.

4. Secured Loans

Debentures

500 Secured Redeemable Non-Convertible Debentures of Rs. 1,000,000 each fully paid up (issued by ETC Networks Limited merged with the Company on March 31, 2010) are redeemable at par in 4 equal installments with the earliest redemption being on January 6, 2012 and last being on January 6, 2015.

These Debentures are Secured by way of first charge on all fixed assets and current assets including certain fixed deposits, and first charge on escrow account for receivables of the erstwhile ETC. upon demeger of Education Division these debentures and related liabilities stand transferred to Zee Learn on and from April 1, 2010. The debentures are to be further secured by assignment of all the benefits under the agreement with a Charitable Trust for operations of school.

Term Loan from Bank

Secured by way of first charge on all the fixed assets and current assets of erstwhile Digital Media Convergence Limited subsidiary of ETC Network Limited. The loan has since been repaid.

Working Capital Loan from Bank

Secured by way of first charge on all the fixed assets and current assets of erstwhile Digital Media Convergence Limited. The loan has since been repaid.

Vehicle Loans

Secured by hypothecation of vehicles

5. Foreign Currency Convertible Bonds (FCCB)

a) The Company had issued 10,000 0.5% Foreign Currency Convertible Bonds (FCCB) of US$10,000 each aggregating to US$100 million, redeemable on April 29, 2009 at 116.24% of their principal amount. The bond holders had an option to convert these bonds into equity shares from and including 8 June, 2004 to and including April 22, 2009 at an initial conversion price of Rs. 197.235 per share, with a fixed rate of exchange on conversion of Rs. 43.88 (US$1). Consequent to the restructuring, the conversion price was reset to Rs. 153.459 per share in terms of the Offering Circular, effective April 18, 2008.

b) During the year 379 bonds are redeemed on due date i.e. April 29, 2009 and Premium of Rs./Thousand 3,706 payable on redemption has been provided and adjusted against Securities Premium as per Section 78 of the Companies Act, 1956.

6. Disclosures:

a) The Company has been deploying its surplus funds as short-term demand loans / inter corporate deposits, the borrowers are regular in repayment of principal and interest, hence are considered good.

c) Deposits includes Rs./Thousand 65,745 (65,745) due from Company in which director is interested.

f) The erstwhile ETC ("the Transferor Company") had taken over running business of Entertainment Television Network Private Limited during the year 1999-2000 along with the benefits of contracts, agreement and approvals for broadcasting of Television Channels. Some of the agreements and approvals are yet to be transferred / obtained in the name of erstwhile ETC.

h) Foreign Exchange Difference

i) The foreign exchange loss (net) including on forward contracts and cross currency swap of Rs./Thousand 29,548 (435,392) on settlement or realignment of foreign exchange has been adjusted in respective heads in the Profit and Loss account.

i) Employees Stock Option Scheme (ESOP 2009)

The Company has instituted an Employees Stock Option Plan (ESOP 2009) as approved by the Board of Directors and Shareholders of the Company in 2009 for issuance of stock options in convertible into equity shares not exceeding in the aggregate 5% of the issued and paid-up capital of the Company as on March 31, 2009 i.e. up to 21,700,355 equity shares of Re. 1 each to the employees of the Company as well as that of its subsidiaries and also to non-executive directors including Independent Directors of the Company at the market price determined as per the SEBI (ESOS) Guidelines,1999. The said scheme is administered by the Remuneration Committee of the Board.

During the year the Company has granted 4,340,000 stock options to eligible employees and directors at an exercise price of Rs. 239.80 per share. The options granted under the Scheme shall vest not less than one year and not more than five years from the date of grant of options. The options granted now would vest in the ratio of 50:35:15 at the expiry of one, two and three years from the date of grant and once vested, these would be exercisable at any time within a period of four years and the equity shares arising on exercise of options shall not be subject to any lock-in.

The options were granted to the employees at an exercise price, being the latest market price as per SEBI (ESOS) Guidelines, 1999. In view of this, there being no intrinsic value on the date of grant (being the excess of market price of share under the Scheme over the exercise price of the option), the Company is not required to account the accounting value of options as per SEBI Guidelines

j) Micro, Small and Medium Enterprises:

The Company has no dues to Micro, Small and Medium enterprises during the year ended March 31, 2010, on the basis of information provided by the parties and available on record.

k) Capital work in progress includes Capital Advances Rs./Thousand 1,086,506 (183,249). Enforceable agreements are yet to be executed for advances of Rs./Thousand 239,370 for purchase of properties.

l) Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) is Rs./Thousand 247,489 (266,181).

m) Sundry Creditors for expenses and other liabilities under Current Liabilities include

1. Cheques overdrawn Rs./Thousand 128,038 (11,844)

2. Rs./Thousand 494,061 payable to Zee News Limited on demerger of RGEC channels for liabilities paid on our behalf.

n) Dividend Rs./Thousand 1,213 (1,315) unclaimed for the period more than seven years is transferred to Investors Education and Protection Fund during the year.

o) During the year the Companys expenses of Rs./Thousand 166,797 (63,160) are shared by other related party, are netted off in relevant heads of expenses.

7. Contingent Liabilities not provided for

(Rs./Thousand)

Particulars 2010 2009

a) Corporate Guarantees

- For subsidiaries to the extent of loans availed/ outstanding Rs./Thousand 5,008,850 1,565,100 Nil (1,001,338)

- For other related parties, loans outstanding Rs./Thousand 3,733,360 4,077,030 4,526,760 (3,949,415)

b) Bank guarantees 75 1,810

c) Claims against the Company not acknowledged as debts 640,278 132,743

d) Disputed Direct Taxes 131,504 133,517

e) Disputed Indirect Tax 474,538 Nil

f) Letters of credit (net of liability provided) 40,817 Nil

g) Legal cases against the Company Unascertainable Unascertainable

8. ETC Networks Limited which got merged into the Company has entered into a tripartite agreement with a Charitable Trust / Society established under the Bombay Public Trust Act, 1950 and a Body Corporate to acquire exclusive rights for providing educational infrastructure, content, advisory and other related services to its school for a period of 30 years for Rs./Thousand 750,000 and sharing revenue. Rs./Thousand 750,000 paid for acquiring the rights and other preoperative cost of Rs./Thousand 24,600 is included in capital work in progress eventually to be capitalized with intangible asset on the date of commencement of operations by the school. This arrangement was meant for Education Business undertaking (EBU) and therefore , subsequent to the demerger of EBU , shall stand transferred to Zee Learn Limited.

9. Taxation

a) Provision for current tax for the year has been made as per provisions of Section 115JB of the Income-Tax Act, 1961 i.e. Minimum Alternate Tax (MAT) due to claim of set-off of brought forward losses of undertaking taken over by the Company complying with Section 2 (19AA) of Income tax act 1961 and recognized the MAT credit entitlement as an asset under the head "Loans and advances", in accordance with the Guidance Note on Accounting for Credit Available in respect of MAT issued by the ICAI.

10. Related Party transactions

(i) List of Parties where control exists Subsidiary Companies

a) Wholly Owned

Apac Media Ventures Limited; Asia Business Broadcasting Mauritius Limited; Asia Today Limited; Asia TV Limited; Expand Fast Holding (Singapore) Pte. Limited; Zee CIS Holding LLC ; Zee Multimedia (Maurice) Limited; Zee Multimedia Worldwide Limited, Mauritius; Zee Multimedia Worldwide Limited (BVI); Zee Sports Americas Limited; Zee Sports International Limited; Zee Sports Limited; Zee Technologies (Guangzhou) Limited; Zee Telefilms Middle East FZLLC; Zee TV South Africa (Proprietary) Limited; Zee TV USA Inc.; ZES Holding Limited; Zee Entertainment Studios BVI ; ZES Mauritius Limited; ZES International Limited; Zee Motion Pictures Private Limited.

b) Others - Direct

ETC Networks Limited (merged as on March 31, 2010)*; Taj Television India Private Limited; Zee Turner Limited.

*Cornershop Entertainment Company Private Limited, Cornershop Animation Company Private Limited, Digital Media Convergence Limited and Remed Services Private Limited (merged with erstwhile ETC Networks Limited w.e.f. January 1, 2010

c) Other - Indirect

Taj TV Limited, Mauritius

(ii) Associates

Aplab Limited (extent of holding 26.42 %)

(iii) Other Related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year.

Asian Sky Shop Limited, Agrani Convergence Limited; Churu Trading Company Private Limited; Continental Drug Company Private Limited; Cyquator Media Services Private Limited; Cornershop Entertainment Company Private Limited( up to December 31, 2009); Digital Media Convergence Limited ;(up to December 31, 2009); Dakshin Media Gaming Solutions Private Limited; Dish TV India Limited; Diligent Media Corporation Limited ; Essel Propack Limited; E-City Entertainment (India) Private Limited; E-City Retail Private Limited; E- City Property Management Services Private Limited; E-Cool Gaming Solution Private Limited; Essel Corporate Services Private Limited; Essel Sports Private Limited; Essel Infraprojects Limited; Essel Shyam Communication Private Limited; Fun Multiplex Private Limited; Integrated Subscribers Management Limited; ITX Trade Exchange Limited; Jay Properties Private Limited; Jayneer Capital Private Limited; Pan India Network Infravest Private Limited; Prajatma Trading Company Private Limited; Premier Finance and Trading Company Limited; Rama Associates Limited; Remed Services Private Limited (up to December 31, 2009);Real Media FZLLC, Smart Wireless Private Limited; TALEEM Research Foundation; Wire and Wireless (India) Limited; Zee News Limited;

Directors / Key Management Personnel

Mr. Subhash Chandra, Mr. Punit Goenka, Mr. Laxmi Narain Goel, Mr. Ashok Kurien.

Disclosure in Respect of Material Related Parties which account for 10% or more of the transactions during the year:

a) Loans, Advances and Deposits given include to Churu Trading Company Private Limited Rs./Thousand 2,040,000 (3,770,500); Prajatma Trading Company Private Limited Rs./Thousand 21,50,000 (2,170,000); Dish TV India Limited Rs./Thousand Nil (2,430,000); Wire and Wireless (India) Limited Rs./Thousand Nil (1,550,000); Premier Finance and Trading Company Limited Rs./Thousand 2,271,000 ( 1,605,000).

b) Loans, Advances and Deposits repayment received Churu Trading Company Private Limited Rs./Thousand 2,040,000 (3,770,500); Prajatma Trading Company Private Limited Rs./Thousand 2,150,000 (2,170,000); Dish TV India Limited Rs./Thousand 24,30,000 ( Nil);Wire and Wireless India Limited Rs./Thousand 2,450,000 (70,000); Premier Finance and Trading Company Limited Rs./Thousand 2,271,000 (1,605,000).

c) Loans, Advances and Deposits balances outstanding at year end include Zee Sports Limited Rs./Thousand 29,249 (29,249); Zee Turner Limited Rs./Thousand 1,747,620 ( Nil ); Dish TV India Limited Rs./Thousand Nil ( 2,430,000); Wire and Wireless India Limited Rs./Thousand 98,613 ( 2,300,817);Jay Properties Private Limited Rs./Thousand 65,744 (65,744);TALEEM Research Foundation Rs./Thousand 199,182 (Nil).

d) Capital Advances outstanding at the year end include Taleem Research Foundation Rs./Thousand 750,000 (Nil).

e) Sundry Creditors balances include Broadcasters/ Principals Remittances pending to Asia Today Limited Rs./Thousand 759,327 (869,628); Amounts due for Purchase of Programs, Goods and Services to Asia Today Limited Rs./Thousand 11,654 (12,448); Taj Television India Private Limited Rs./Thousand 8,232 (Nil); ETC Networks Limited Rs./Thousand Nil ( 41,085); Wire and Wireless (India) Limited Rs./Thousand 67,177 (92,984); Essel Sports Private Limited Rs./Thousand 13,624 ( 70,044); Zee News Limited Rs./Thousand 520,271(Nil).

f) Sales, Services and Recoveries (Net) include to Asia Today Limited Rs./Thousand 886,916 (929,083); Dish TV India Limited Rs./Thousand Nil ( 4,475); Zee News Limited Rs./Thousand 57,680 (245,694);Real Media FZ LLC. Rs./Thousand 2,649 (5,958); Subscription Revenue from Taj Television India Private Limited Rs./ Thousand 34,373(Nil); Dish TV India Limited Rs./Thousand 240,000 ( Nil) Advertisement Income from ETC Networks Limited Rs. 11,700 (Nil); Asian Sky Shop Rs./Thousand Nil (12,085); Dish TV India Limited Rs./ Thousand 96,409 ( 83,427); Cornershop Entertainment Company Private Limited Rs./Thousand 71,531 (6,186); Agency Commission received from Asia Today Limited Rs./Thousand 73,662 (65,360); Zee News Limited Rs./Thousand Nil (268,368).

g) Sundry Debtors balances include Asia Today Limited Rs./Thousand 665,345 (329,745); Zee TV USA Inc. Rs./Thousand Nil (62,976); Dish TV India Limited Rs./Thousand 95,257 (599,386); ITX Trade Exchange Limited Rs./Thousand 29,854 (Nil); Zee News Limited Rs./Thousand Nil (179,084).

h) Other income include Dividend received from ETC Networks Limited Rs./Thousand 12,224 ( 12,224); Aplab Limited Rs./Thousand 1,321 ( 3,303); Essel Propack Limited Rs./Thousand 546 (2,186); Interest received includes Churu Trading Company Private Limited Rs./Thousand 219,469 (258,147); Prajatma Trading Company Private Limited Rs./Thousand 210,647 (256,625); Dish TV India Limited Rs./Thousand 71,901 (68,917); Premier Finance & Trading Co Private Limited. Rs./Thousand 186,326 (173,521); Wire and Wireless India Limited Rs./Thousand 127,098 (127,877); ETC Networks Limited Rs./Thousand 9,671(Nil); Miscellaneous / Rent income from Zee Turner Limited Rs./Thousand 10,627 (14,330); Asia Today Limited Rs./Thousand Nil (39,829); ETC Networks Limited Rs./Thousand 2,647 (2,083); Diligent Media Corporation Limited Rs./Thousand 2,203 (2,081); Dish TV India Limited Rs./Thousand 25,132 (25,132); Zee News Limited Rs./Thousand 20,441 (20,441); Wire and Wireless (India) Limited Rs./Thousand 4,209 (1,335); Balances written back of Asia Today Limited Rs./Thousand 12,624 (Nil).

i) Purchase of Programs, Goods and Services from Asia Today Limited Rs./Thousand 67,661 (59,212); ETC Networks Limited Rs./Thousand 16,039 (Nil); Taj TV Limited -Mauritius Rs./Thousand 30,861 (3,529); Essel Corporate Services Private Limited Rs./Thousand 176,292 (134,872); Essel Sports Private Limited Rs./Thousand 12,807 (262,603); Wire and Wireless (India) Limited Rs./Thousand 160,372 (250,321).; Commission paid to Zee Turner Limited Rs./Thousand 140,620 (145,992); Balances written off 25 FPS Media Private Limited Rs./Thousand Nil (13,665); Cornershop Entertainment Company Private Limited Rs./Thousand 19,158 (Nil).

j) Corporate guarantees include in respect Asia Today Limited Rs./Thousand 50,08,850 (1,565,100); Dish TV India Limited Rs./Thousand 3,223,530 (3,305,760); Wire and Wireless India Limited Rs./Thousand 541,000 (921,000).

Notes

i. Details of Remuneration to directors are disclosed in Note 6 (e).

ii. Sharing of expenses has been disclosed in Note 6 (o).

11. Additional Information required to be given pursuant to Part II of Schedule VI to the Companies Act 1956 is as follows:

The Company is mainly in the business of producing television programs and is not subject to any license hence licensed capacity is not given. Further the nature of business of the Company is such that quantitative information of purchase, sale and stocks are not applicable.

12. Segmental Reporting

The Financial Statements of the Company contain both the consolidated financial statements as well as the separate fnancial statements of the parent Company. Hence, the Company has presented the segmental information on the basis of the consolidated financial statements as permitted by Accounting Standard - 17.

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