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Notes to Accounts of Zee Learn Ltd.

Mar 31, 2015

A) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value ofRs. 1 each. Each holder of equity shares is entitled to one vote per share, however the holders of global depository receipts (GDR's) do not have voting rights in respect of the equity shares represented by the GDRs till the shares are held by custodian. The Company declares and pays dividend in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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 preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b) The Company has not issued any bonus shares or bought back equity shares during the five years preceding 31 March, 2015. Details of aggregate number of shares issued for consideration other than cash during the five years preceding 31 March, 2015 is as under:

c) Employees Stock Option Scheme (ESOP):

The Company has instituted an Employee Stock Option Plan (ZLL ESOP 2010) as approved by the Board of Directors and Shareholders in 2010 for issuance of stock options convertible into equivalent number of equity shares not exceeding the aggregate of 5% of the issued and paid up capital of the Company i.e upto 6,136,930 equity shares of Rs. 1 each to the employees of the Company as well as that of its subsidiary 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 ended 31 March, 2015, the Company issued 1,961,750 stock options. 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 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 669,453 (141,625) options, equivalent number of equity shares were issued and alloted during the year ended 31 March, 2015.

The options were granted to the employees/independent directors at an exercise price, being the latest market price as per the SEBI (ESOS) Guidelines 1999. In view of this, 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 the accounting value of options as perthe SEBI guidelines.

a) Debentures are secured by first charge on free hold land, all fixed and current assets including fixed deposits, escrow account, reserve account, assignment of all benefits under agreement for Operation of school and further DSRA Undertaking by Zee Entertainment Enterprises Limited. The debentures carries interest @ 12% p.a and are redeemable at par in four equal installments of 25% each beginning at the end of 2nd year from the date of allotment, viz 6 January, 2010. The debenutures have been fully repaid during the year.

b) Term Loan from Axis Bank Limited Rs./lakhs 3,500.00 (Previous year Rs./lakhs 4,500.00) is secured by first pari passu charge on all the fixed and current assets (present and future) of the Company and also reserve account and DSRA Undertaking by Zee Entertainment Enterprises Limited. The loan carries interest over lenders base rate plus 2.25% and is repayable in 8 half yearly installments begining from 30 June, 2013. However, the loan has been fully repaid in April 2015.

c) Term Loan from Yes Bank Limited Rs./lakhs 5,096.00 (Previous year Rs./lakhs 5,200.00) is secured by first pari passu charge on all the movable assets (including current assets, loans and advances) of the Company and lien over debt service reserve account. The loan is further secured by way of securities and corporate guarantee provided by related parties. The loan carries interestover lenders base rate plus 1.1% and is repayable in 12 half yearly installments begining from 30 June, 2014.

Current liabilities (Rs lakhs) 2015 2014

Trade payables 1,318.85 871.63

1,318.85 871.63

Other current liabilities

Current maturities of debentures and term loan (Refer Note 5 (a)) 3,916.00 2,354.00

Interest accrued and due 88.15 -

Interest accrued but not due - 100.11

Unearned Revenue 1,699.26 1,752.83

Cheques overdrawn - 27.44

Deposits from customers 2.00 2.00

Advance received from customers 1,273.37 1,234.70

Creditors for capital expenditure - 42.57

Statutory dues payable 123.08 128.97

Creditors for expenses 1,323.70 1,520.13

8,425.56 7,162.75

Total 9,744.41 8,034.38

a) Non disposal undertaking for 51% shares held by the Company for loan taken by subsidiary Company viz Digital Ventures Private Limited

b) As per the revised terms of redemption, the preference shares are redeemable on 31 March 2017 (Previous year 31 March 2015) at a premium of X10,005 /- (Previous year X 9,725 /-) per share.

c) 0.01 %, Compulsorily Convertible Debentures (CCD) of X100 each fully paid up are compulsorily convertible into equity shares at a conversion rate to be decided based on fair value of equity shares any time from the date of allotment but not later than 10 years from the date of allotment.

2 Operating Leases:

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 generally is for 11 months to 60 months.

3 a) Current Tax

In the absence of taxable income during the year, as per the provisions of Income Tax Act 1961, provision for current tax is not required.

b) Deferred tax

In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" (AS 22) issued by ICAI, deferred tax assets and liabilities should be recognized for all timing differences in accordance with the said standard. However, considering the present financial position and requirement of the accounting standard regarding certainty / virtual certainty, deferred tax asset for the year is not accounted for. However, the same will be reassessed at a subsequent balance sheet date and will be accounted for in the year of certainty/ virtual certainty in accordance with the aforesaid accounting standard.

Notes:

(a) Amounts recognized as an expense and included in the Note 20: "Employee benefits expense" are Gratuity Rs./lakhs 8.61 (Previous year Rs./lakhs 27.79) and Leave benefits Rs./lakhs 23.99 (Previous year Rs./lakhs 29.49)

(b) The estimates of rate of escalation in salary considered in actuarial valuation take into account the 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 recognized as an expense in Note 20 "Employee benefits expense" of the Statement of Profit and Loss.

4 Related Party Transactions

(i) List of Parties where control exists Subsidiary Company-Wholly owned Digital Ventures Private Limited

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

Asian Satellite Broadcast Private Limited, Cyquator Media Services Private Limited, Direct Media Distribution Ventures Private Limited, Diligent Media Corporation Limited, Digital Satellite Holdings Private Limited, Essel Corporate Resources Private Limited, Essel Vision Productions Limited, Himgiri Zee University, Pan India Network Infravest Private Limited, Pri-Media Services Private Limited, TALEEM Research Foundation, Zee Entertainment Enterprises Limited, Zee Media Corporation Limited. ,

# Intercorporate deposit given of Rs./lakhs 10,148.76 was converted into debenture application money w.e.f 1 April 2014. (ii) Loanee have not made investments in the shares of the Company.

(b) Information under Section 186(4) of the Companies Act, 2013

(i) Loans given

Intercorporate deposit given to wholly owned Subsidiary Company viz Digital Ventures Private Limited of Rs./lakhs 10,148.76 was converted into debenture application money w.e.f 1 April 2014.

(ii) Investments made

There are no investments made during the year except those mentioned in Note 10 and Note 13

* does not include Interest amount, as interest rate has not been adjudicated by court.

(ii) The Company had entered into warehousing arrangement for its inventories of educational goods and equipments with a service provider. During the year, there was a dispute with the service provider and Company has issued termination letter giving three months notice as per terms of the contract. However, the service provider stopped rendering the services during the notice period and refused to give the inventory of the Company. On approaching the court, the Company obtained the custody of the inventory and filed a claim for damages of Rs./lakhs 600.00/- with interest against the service provider, which is under arbitration.

5 Capital and other commitments/undertakings

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs./lakhs 13.62 (Previous yearRs./lakhs 27.88)

(b) Non-disposal undertaking for 51% shares held by the Company in Digital Ventures Private Limited for loan taken by subsidiary Company.

Notes

1) Intercorporate deposits given to subsidiary of Rs./lakhs 10,148.76 is converted into compulsorily convertible debentures, being a non-cash item, hence not considered in the above cash flow statement.

2) Previous year's figures have been regrouped, recast wherever necessary.


Mar 31, 2014

1. a) Current Tax

In view of losses incurred during the year, no provision for current tax is required to be made as per Income Tax Act 1961.

b) Deferred tax balances are as under:-

In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" (AS 22) issued by ICAI, deferred tax assets and liabilities should be recognized for all timing differences in accordance with the said standard. However, considering the present financial position and requirement of the accounting standard regarding certainty / virtual certainty, deferred tax asset (net) for the year is not accounted for. However, the same will be reassessed at a subsequent balance sheet date and will be accounted for in the year of certainty / virtual certainty in accordance with the aforesaid accounting standard.

(a) Amounts recognized as an expense and included in the Note 20: "Employee benefits expense" are Gratuity Rs./lakhs 27.79 (Previous year Rs. /lakhs 19.75) and Leave benefits Rs. /lakhs 29.49 (Previous year Rs. /lakhs 47.70)

(b) The estimates of rate of escalation in salary considered in actuarial valuation take into account the 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 recognized as an expense in Note 20 "Employee benefits expense" of the Statement of Profit and Loss Statement.

2. Related Party Transactions

(i) List of Parties where control exists Subsidiary Company-Wholly owned

Digital Ventures Private Limited

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

Asian Satellite Broadcast Private Limited, Cyquator Media Services Private Limited, Dish TV India Limited, Essel Corporate Resources Private Limited, Essel Infraprojects Limited, Essel Vision Productions Limited, Himgiri Nabh Vishwavidhyalaya, Jay Properties Private Limited, Pan India Paryatan Private Limited, Pan India Network Infravest Private Limited, Premier Finance and Trading Company Limited, TALEEM Research Foundation, Zee Entertainment Enterprises Limited, Zee Media Corporation Limited, Diligent Media Corporation Limited

b) Loanee have not made investments in the shares of the company

3. Contingent Liabilities not provided for (Rs. lakhs)

2014 2013

a) Claims against the Company not acknowledged as debts 54.27 55.29

b) Disputed Direct Tax 16.51 16.51

c) Disputed Indirect Taxes* 304.07 257.80

d) Corporate guarantee for subsidiaries to the extent of loans availed/ outstanding Rs./lakhs 14,631.53 (Previous year Rs./lakhs 12,606.16) 14,631.53 12,606.16

* includes Rs./lakhs 46.27 show cause cum demand notice received subsequent to the balance sheet date.

4. Capital and other commitments/undertakings

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs./lakhs 27.88 (Previous year Rs./lakhs 2,534.70)

(b) Non disposal undertaking for 51% shares held by the Company in Digital Ventures Private Limited for loan taken by subsidiary Company.

5. CIF Value of Imports for capital equipment is Rs./lakhs NIL (Previous year Rs./lakhs 765.43)


Mar 31, 2013

1. Corporate Information

Zee Learn Limited ("the Company") was incorporated in State of Maharashtra on 4 January, 2010. The Company is one of the most diversifed premium education companies which delivers learning solutions and training through its multiple products viz. Kidzee, Mount Litera Zee Schools, Braincafe, Mount Litera World Preschool, Zee Institute of Media Arts (ZIMA), Zee Institute of Creative Arts (ZICA) and E - Learning Online Education and Testing. The Company is also engaged in production/acquisition of television content.

2. Scheme of Amalgamation of Essel Entertainment Media Limited (EEML) and the Company

The Scheme of Amalgamation of EEML with the Company u/s 391 to 394 of the Companies Act, 1956 is approved by the Hon''ble High Court of Bombay on 17 June, 2011. The said approved Scheme of Amalgamation has been given effect in the fnancial statements for the year ended 31 March, 2012 as per the "pooling of interest method" as prescribed by Accounting Standard 14 "Accounting for Amalgamations". Pursuant to the Scheme 1 (One) fully paid up equity share of Rs 1/- each of the Company is issued and allotted to the shareholders of EEML for every 5 (Five) equity shares of Rs 1/- each held by them in EEML i.e the Company has issued 140,000,000 shares. The difference between transferred assets and liabilities and expenses incurred on amalgamation of Rs 888,125,054 is adjusted against General Reserve as per the Scheme of Amalgamation sanctioned by the Honourable High Court.

3. Leases Operating Leases:

The Company has taken offce, residential facilities and plant and machinery (including equipments) etc. on lease 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 generally is for 11 months to 60 months.

# In respect of remuneration payable to the Whole-time Director in excess of the limits prescribed under section 198 read with Schedule XIII, the Company has applied for approval from the Central Government which is still pending. However the Ministry of Corporate Affairs (MCA) has communicated that the approval of the Central Government is no longer necessary incase of unlisted enterprises (the Company was unlisted at the time of fling) which are not subsidiaries of listed enterprises in view of amendment made in Schedule XIII of the Companies Act, 1956 vide Gazette of India Notifcation G.S.R 70 (E) dated 8 February, 2011.

Note: Salary and Allowances includes basic salary, house rent allowance, leave travel allowance and performance bonus.

4. Employee Benefts

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

A. Defned Beneft Plans

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

Notes:

(a) Amounts recognised as an expense and included in the Note 20: "Employee benefts expense" are Gratuity Rs 1,974,802 (Rs3,493,908) and Leave beneftsRs4,769,782 (Rs 3,438,421)

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

B Defned contribution plan:

"Contribution to provident and other funds" is recognised as an expense in Note 20 ''''Employee Benefts Expense'''' of the Statement of Proft and Loss.

5. Related Party Transactions

(I) List of Parties where control exists Subsidiary Company-Wholly owned

Digital Ventures Private Limited

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

Asian Satellite Broadcast Private Limited, Cyquator Media Services Private Limited, Dish TV India Limited, Essel Infraprojects Limited, Essel Vision Productions Limited, E-City Project Constructions Private Limited, Essel Corporate Resources Private Limited, Himgiri Zee Universe (formerly known as Himgiri Nabh Vishwavidhyalaya), Jay Properties Private Limited, Pan India Paryatan Private Limited, Pan India Network Infravest Private Limited,


Mar 31, 2012

1 Background

Zee Learn Limited ( ACI-the Company ACI-) was incorporated in State of Maharashtra on 4 January, 2010. The Company is one of the most diversified premium education companies which delivers learning solutions and training through its multiple products viz. Kidzee, Mount Litera Zee Schools, Brain Cafe, Mount Litera World Preschool, Zee Institute of Media Arts (ZIMA), Zee Institute of Creative Arts (ZICA) and E - Learning Online Education and Testing.

(a) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs 1 each. Each holder of equity shares is entitled to one vote per share. The final dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Company so far has not declared any dividend.

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 preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Employees Stock Option Scheme (ESOP):

The Company has instituted an Employee Stock Option Plan (ZLL ESOP 2010) as approved by the Board of Directors and Shareholders of the Company in 2010 for issuance of stock options convertible into equivalent number of equity shares to the employees of the Company 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 ended 31 March 2012, the Company granted 1,609,700 stock options to eligible employees and also to non executive directors including independent directors. 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 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.

The options were granted to the employees at an exercise price, being the latest market price as per the SEBI (ESOS) Guidelines 1999. In view of this, 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 the accounting value of options as per the SEBI guidelines.

a) 12 ACU- Debentures are redeemable at par in four equal installments of 25 ACU- each beginning at the end of 2nd year from the date of allotment, viz 6 January, 2010. Secured by first charge on free hold land, all fixed and current assets including fixed deposits, escrow account, Reserve account, assignment of all benefits under agreement for Operation of school and further DSRA Undertaking by Zee Entertainment Enterprises Limited.

b) Term loan from Bank carries interest AEA-12.25 ACU- (base rate). The loan is repayable in 8 half yearly installments begining from 30 June, 2013. The loan is secured by first pari passu charge on all the fixed and current assets (present ACY- future) of the company and also reserve account and DSRA Undertaking by Zee Entertainment Enterprises Limited

2 a) Current Tax

In view of losses, no provision for current tax is made as per provisions of the Income-Tax Act, 1961.

b) Deferred tax balances are as under:-

In accordance with the Accounting Standard 22 on ACI-Accounting for Taxes on Income ACI- (AS 22) issued by ICAI, deferred tax assets and liabilities should be recognized for all timing differences in accordance with the said standard. However, considering the present financial position and requirement of the accounting standard regarding certainty / virtual certainty, deferred tax asset (net) of Rs. 102,044,800/- for the year is not provided. However, the same will be reassessed at a subsequent balance sheet date and will be accounted for in the year of certainty / virtual certainty in accordance with the aforesaid accounting standard.

3 Scheme of Amalgamation of Essel Entertainment Media Limited (EEML) and the Company

(i) The Scheme of Amalgamation of EEML with the Company u/s 391 to 394 of the Companies Act, 1956 is approved by the Hon'ble High Court of Bombay on 17 June, 2011 and upon filing the said order with the Registrar of Companies, with Maharashtra on 30 June, 2011, the said scheme became effective on and from that date

(ii) The scheme has been given effect in these financial statements and in pursuant to the said Scheme:

(a) The said approved Scheme of Amalgamation has been given effect in these financial statements as per the ACI-pooling of interest method ACI- as prescribed by Accounting Standard 14 ACI-Accounting for Amalgamations ACI-. Accordingly the assets and liabilities of the transferor company i.e. EEML is vested and transferred to the Company at book values on the appointed date i.e. close of 31 March, 2011

(b) (One) fully paid up equity share of Rs. 1/- each of the Company is issued and allotted to the shareholders of EEML for every 5 (Five) equity shares of Rs. 1/- each held by them in EEML i.e the Company has issued 140,000,000 shares

ACM-In respect of remuneration payable to the Whole-time Director in excess of the limits prescribed under section 198 read with Schedule XIII, the Company has applied for approval from the Central Government which is still pending.

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.

Notes:

(a) Amounts recognized as an expense and included in the Note 20: ACI-Employee benefits expense ACI- are Gratuity Rs. 3,493,908 (Rs. 805,870) and Leave benefits Rs. 3,438,421 (Rs. 319,498)

(b) The estimates 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:

ACI-Contribution to provident and other funds ACI- is recognized as an expense in Note 20 of the Statement of Profit and Loss Account

4 Related Party Transactions

(i) List of Parties where control exists Subsidiary Company-Wholly owned

Digital Ventures Private Limited

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

Cyquator Media Services Private Limited, Digital Ventures Private Limited, E-City Project Constructions Private Limited, Essel Infraprojects Limited, Himgiri Nabh Vishwavidhyalaya, Pan India Paryatan Private Limited, Pan India Network Infravest Private Limited, Packaging India Private Limited ADs- Premier Finance and Trading Co. Limited, TALEEM Research Foundation, Wire and Wireless India Limited, Zee Entertainment Enterprises Limited, Zee News Limited.

Directors / Key Management Personnel

Mr. Himanshu Mody, Mr. Sumeet Mehta

For Managerial Remuneration refer note 26.

ACo- The assets and liabilities have been transferred from Essel Entertainment Media Limited Pursuant to the Scheme of Amalgamation.

ACM- Subsidiary Company w.e.f. 1st April, 2011.

4. Contingent Liabilities

2012 2011

a) Claims against the Company not acknowledged as debts 6,986,213 5,440,373

b) Disputed Indirect Taxes 19,813,177 19,813,177

c) Corporate guarantee for subsidiaries to the extent of loans availed/ outstanding. 11,141,267 -

5 Capital and other commitments

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) is Rs. 272,394,687 (Rs. 250,860,920)

(b) Non disposal undertaking for 51 ACU- shares held by Company in Digital Ventures Private Limited for Loan taken by subsidiary Company

6 Deposits shown in Note 12 includes Rs. 240,000,000 (Rs. 290,000,000) being refundable security deposits paid by the Company against school operating rights under two arrangements.

7 CIF Value of Imports for capital equipment is Rs. 28,425,419 (Rs. 2,383,143)

8 Prior year Comparatives

(a) Schedule VI to the Companies Act, 1956 is revised and has become effective from 1 April, 2011. This has significantly impacted the disclosure 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

b) The financial statements for the previous period were from the date of incorporation i.e 4 January, 2010 to 31 March, 2011. However the operating results are from 1 April, 2010 to 31 March, 2011.

Note : 1) Previous year's figures have been regrouped, recast wherever necessary.

2) Scheme of Amalgamation is not considered in the above cash flow statement, being non cash transacation.

 
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