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Directors Report of Zee Media Corporation Ltd.

Mar 31, 2013

To the members

The directors take pleasure in presenting the 14th Annual Report of your Company together with Audited statement of Accounts for the year ended 31 march, 2013.

fInanCIaL performanCe

the financial performance of standalone operations of your Company during the Financial Year 2012-13 is summarized in the following table:

(Rs. million) particulars for the year ended 31 march, 31 march, 2013 2012

total revenue 2,919.20 2,878.34

total expenses 2,612.86 2,538.81

Profit before exceptional items and tax 306.34 339.53

exceptional items 45.96 (166.74)

Profit before tax 352.30 172.79

Provision for tax expenses 109.31 110.79

Profit after tax 242.99 62.00

DIVIDEND

with a view to conserve the resources for future business requirements and expansion plans, your directors are of view that the current year''s profit be ploughed back into the operations and hence no dividend is recommended for the year under review.

operatIonS & StrateGY

during the year, the sluggish economy which had relatively lower GdP growth and high inflation along with supply side constraints continued to affect the overall industry. in particular, spends to news genre were affected and the advertisement revenue growth for the Hindi and Regional News genres was in the region of only 2% (source: estimates basis Adex secondages). News channels also faced significant loss of revenues from the government, which contributes to about 10% of advertisement revenues and degrowing by almost 60% as compared to last year as there was a rate stand-off for better part of the financial year.

Your company also took a significant step of reducing the inventory of the flagship channel, Zee News in order to improve the viewer experience, increase the yield of the channel as well as preparation for the upcoming curbs for advertisement inventory. events and special properties continued to be the cornerstone of your Company''s advertisement revenue growth strategy and your Company had executed several initiatives like Ananya samman, my City - my Voice, emerging Business Forum, Hunt For India''s Smart Investor, etc. and has conducted over 100 events across india.

Your Company has made further inroads into the Hindi heartland, after Zee News Uttar Pradesh Uttarakhand, through the launch of our second offering, Zee madhya Pradesh Chhattisgarh and slating to launch regional channels in Rajasthan and Bihar- Jharkhand. in order to provide richer as well as real time news content to the viewers, your Company has begun the process of integrating the content from diligent media Corporation Limited (dmCL), an essel Group Company engaged in printing and publication of daily news paper ''DNA (Daily News & Analysis)'', as well as in Digital through india.com owned by india webPortal Pvt. Ltd., another essel Group Company. such a synergy is expected to provide additional depth to our coverage and analysis in addition to addressing the needs of the youth better. Considering the business synergies in print and electronic media, your Board has approved in-principle combination of News Publication Business of dmCL with News Broadcasting business of the Company.

Your Company''s Subscription revenues increased on the basis of higher demand for the channels even as overall digitization was delayed in Phase 1 and has been patchy in Phase 2. Our Network and individual channels have been steaming ahead in marketing and viewership initiatives. Your company continues to be the largest News Network in the country and yet again registered the highest relative share of 27.5% for the premium target audience, Cs 25 m ABC, among the major news networks in the top 6 metros (source: tAm, FY 2012-13, Cs 25 , seC ABC, 8 metros).

Zee news had the second highest reach of 3.1 million among the Hindi News channels in 8 metros among premium audience (source: tAm, FY 2012-13, Cs 25 ABC, 8 metros).

Zee Business, India''s first 24-hour Hindi business channel, has been consistently outperforming its major competitors and has been no. 2 in reach at 20 million it also dominated the last quarter of the fiscal by being the leader in 6 of 13 weeks in the fourth quarter (source: tAm, FY 2012-13 and Q4, tG: Cs 25 m AB, Hsm).

24 Ghanta, our Bengali news offering, was also no. 1 in 23 weeks round the year with average of 29% market share (source: tAm, FY 2012-13, tG: Cs 15 , wB) and no. 1 in reaching audiences in west Bengal among all Bengali news channels and reached over 5.6 million audiences even though dAs Phase i implementation in Kolkata met many roadblocks.

Zee 24 taas continued to be No. 2 in reach across maharashtra with its incisive news coverage leading to a high reach of 9.9 million viewers (source: tAm, FY 2012-13, Cs 15 , mah).

Zee news Up/Uttarakhand was the leader for over 19 weeks in the year and had an average of 32% channel share (source: tAm, FY 2012-13, Cs 15 , UP).

Zeenews.com continued to be the fastest growing website in the indian news web space second year in a row. the website received 70.2 million unique visitors and 310.1 million page views. Unique visitors for increased by 176.1% and page views by 86.6%. the referral traffic also increased by 191.2%(Source – Google Analytics). the regional news websites too have shown a significant growth in visitors and page views.

Under the tough operating advertisement environment as well as loss of government advertisement revenues due to rate standoff, the overall revenues of your company were at Rs. 3,246.3 million in 2012-13 as compared to Rs. 3,227.7 million in 2011-12. the eBitdA was Rs. 583.4 million in 2012-13 as compared to Rs. 689.0 million in 2011-12.

ChanGe of name of the CompanY

As a part of future business strategy of your Company, with a view to meeting changing viewer preferences, your Company has commenced the process of changing the content architecture of all its television channels, whereby, in addition to News, the channels of your Company shall cover entire gamut of life of present and potential viewers. in line with this strategy, to reflect this wider gamut of media contents, in which your Company proposes to transcend, a proposal for change of name of the Company to Zee media Corporation Limited has been sent to the members seeking their approval to the said proposal by passing a special Resolution by Postal Ballot Process.

pUBLIC DepoSItS

during the year under review, your Company has not accepted or renewed any deposits within the meaning of section 58A of the Companies Act, 1956 and rules made there under.

Corporate SoCIaL reSponSIBILItY

As a socially conscious media organization, your Company has imbibed Corporate social Responsibility (CsR) as a key part of its growth philosophy. with an objective to positively transform our society, your Company executes several on air and on ground campaigns.

One such programme is Zee Helpline which takes up the cause of common man and helps them resolve their problems that may arise out of apathy of the administration or red tape. the Company also seeks to turn the spotlight on security forces as well as unsung heroes who are silently working to protect our borders and uplift the society through our flagship CsR initiative, Ananya samman.

Your Company also understands the importance of conserving

our environment. Our green campaign, ''My Earth My Duty'', is an attempt by your Company to highlight the environment cause in the country. As one of the largest climate awareness campaigns in the country, this initiative won accolades from the United Nations for planting thousands of trees in a single day. It has been Zee News'' endeavour since 2010 to sensitize and encourage people to take concrete actions towards mitigating the effects of climate change and environmental degradation and the Company has set a record of planting over 1.4 crore trees across india, reached out to 2.5 lakh villages and 100 cities and also encouraged over 50 million youth to act.

Your Company has made it a point to make the people aware about their democratic right to vote. The nation''s largest voter awareness initiative, ''Apka Vote Aapki Taqat'', truly created an impact in the states where elections took place and was one of the factors leading to increased voter turnout. this splendid thought and initiative had the support of the election Commission of india and the channel. Zee News was the first ever news channel to win the National Award from the election Commission to increase electoral participation and strengthening indian democracy. it has also been recognized by Limca Book of Records.

Apart from these, your Company, as part of the essel Group of Companies, has at a unified and centralized level, put in place a CsR policy. during the year under review, essel Group continued to support the cause of ekal Vidyalaya Foundation, an NGO that works to bring about basic literacy and health awareness amongst the tribal and rural population of india and Global Vipassana Foundation which helps propagate Vipassana, the non-sectarian rational process of self-purification with the aim of bringing about peace both within the individual and the society in general.

empLoYeeS StoCK optIon SCheme

till date of this report your Company had not granted any Stock Options either to its employees or Directors under ''ZNL ESOP Scheme 2009'' approved by the Members at the 10th Annual General meeting held on 18 August, 2009. in view of this, particulars as required under Clause 12 (disclosure in the Directors'' Report) of Securities and Exchange Board of India (employee stock Option scheme and employee stock Purchase scheme) Guidelines, 1999, are Nil and Company has not obtained any certificate from the statutory Auditors confirming implementation of the employees stock Option scheme in accordance with seBi guidelines and the resolution passed by the shareholders.

Corporate GoVernanCe

in addition to strictly complying with Clause 49 of the Listing Agreement, your Company is committed to adherence of

the highest standards of Corporate Governance. in line with your Company''s commitment to excel in implementing best Corporate Governances practices, your Board had earlier approved and implemented a Corporate Governance manual which serves as guide to every business activity / decision making in the Company. Report on Corporate Governance as stipulated under the Listing Agreement(s) with the stock exchanges as also a management discussion and Analysis Report forms part of the Annual Report.

Certificate from the statutory Auditors of the Company, m/s mGB & Co, Chartered Accountants, confirming compliance with the provisions of Corporate Governance as stipulated in Clause 49, is annexed to the said Corporate Governance Report.

DIreCtorS

Your Board had appointed mr. surjit Banga, as an Additional director in the capacity of independent director of Company with effect from 23 January, 2013. Pursuant to the provisions of section 260 of the Companies Act, 1956, mr. surjit Banga holds office till the conclusion of the ensuing Annual General meeting of the Company. the Company has received notice under section 257 of the Companies Act, 1956 along with requisite deposit, proposing appointment of mr. surjit Banga as a director of the Company. Resolution, seeking your approval for appointment of mr. surjit Banga as director, who will be liable to retire by rotation, has been incorporated in the Notice of the forthcoming Annual General meeting. during the year under review, mr. Naresh Kumar Bajaj and mr. K U Rao, independent directors resigned due to their other pre-occupations, with effect from 28 January, 2013 and 22 march, 2013 respectively. Your Board places on record its deep appreciation for the contributions made by mr. Naresh Kumar Bajaj and mr. K U Rao during their tenure as independent directors of the Company.

mr. subhash Chandra, Non-executive director, retires by rotation at the ensuing Annual General meeting and being eligible has offered himself for re-appointment. Your Board recommends his re-appointment.

SUBSIDIarY CompanY

Your Company continues to hold 60% equity stake in its subsidiary, Zee Akaash News Private Limited. Additionally during the year under review, with a view to house the Broadcasting Business of telugu News Channel, your Company has formed a wholly owned subsidiary in the name of 24 Ghantalu News Limited.

statement pursuant to section 212 of the Companies Act, 1956 in connection with Zee Akaash News Private Limited & 24 Ghantalu News Limited is attached herewith and forms part of this report.

In accordance with Accounting Standard AS 21 – Consolidated Financial Statements read with Accounting Standard AS 23 – Accounting for investments in Associates, and Accounting Standard AS 27 – Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial statements are provided in and forms part of this Annual Report.

As the members are aware, the ministry of Corporate Affairs has granted general exemption to companies from complying with section 212 (8) of the Companies Act, 1956, provided that such companies publish the audited consolidated financial statements in the Annual Report. Your Board has decided to avail the said general exemption, and accordingly, the annual financial statements of Zee Akaash News Private Limited & 24 Ghantalu News Limited for the financial year ended 31 march, 2013 are not being attached with this Annual Report. Requisite financial highlights of the said subsidiaries forms part of this Report. the audited Annual Accounts and related information of these subsidiaries will be made available, upon request or for inspection at the registered office, by any shareholder of the Company.

aUDItorS

statutory Auditors, m/s mGB & Co, Chartered Accountants, having Firm Registration No. 101169w, hold office until the conclusion of the ensuing Annual General meeting and are eligible for re-appointment.

The Company has received communication from the statutory Auditors confirming that (i) their re-appointment, if made, would be within the limits prescribed under section 224(1B) of the Companies Act, 1956; (ii) they are not disqualified for re- appointment within the meaning of section 226 of the said Act; and (iii) they have been provided a valid certificate from the Peer Review Board of the institute of Chartered Accountants of india.

In compliance with Cost Accounting Records (telecommunication industry) Rules, 2011, m/s. Chandra wadhwa & Co., Cost Accountants, New delhi, holding Firm membership No. 0239 were appointed as Cost Auditor of the Company for Financial Year 2012-13.

ConSerVatIon of enerGY, teChnoLoGY aBSorptIon anD foreIGn eXChanGe earnInGS anD oUtGo

Your Company is into the business of Broadcasting of News & Current Affairs Channels in Hindi and various regional languages. since this does not involve any manufacturing activity, most of the information required to be provided under section 217(1) (e) of the Companies Act, 1956 read with the Companies (disclosure of Particulars in the Report of the Board of directors) Rules, 1988, is not applicable.

However the information as applicable is given hereunder:

Conservation of Energy:

Your Company, being a service provider, requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.

Technology Absorption:

in its endeavor to deliver the best to its viewers and business partners, your Company has been constantly active in harnessing and tapping the latest and best technology in the industry.

Foreign Exchange Earnings and Outgo:

Particulars of foreign exchange earnings and outgo during the year are given in Note No. 39 to 41 of Note to the Financials statements of the Company

partICULarS of empLoYeeS

the information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 as amended are set out in an annexure to this Report. However, in terms of section 219(1)(b)(iv) of the Act, these details are not being sent as part of this Report and any shareholder interested in obtaining copy of the same may write to the Company secretary.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of section 217(2AA) of the Companies Act, 1956, and based on representations received from the operating management, the directors hereby confirm that:

(i) in the preparation of the Financial statements for the year ended 31 march, 2013, the applicable Accounting standards have been followed and there are no materia departures;

(ii) they have selected such accounting policies in consultation with the statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the financial year ended 31 march, 2013;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. they confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) they have prepared the Annual Financial statements on a going concern basis.

aCKnoWLeDGementS

Your Board takes this opportunity to place on record its appreciation for the dedication and commitment of employees shown at all levels which have contributed to the success of your Company. Your directors also express their gratitude for the valuable support and co-operation extended by various Governmental authorities, including ministry of information and Broadcasting, department of telecommunication and other stakeholders including bankers, financial institutions, viewers, vendors and service providers.

For and on behalf of the Board

punit Goenka Surjit Banga

managing director director

Place: mumbai date : 23 may, 2013


Mar 31, 2012

The Directors take pleasure in presenting the 13th Annual Report of your Company together with Audited statement of Accounts for the year ended march 31, 2012.

FINANCIAL PERFORMANCE

the financial performance of standalone operations of your Company during the Financial Year 2011-12 is summarized in the following table:

(Rs.in millions)

Particulars For the year ended

March 31, March 31, 2012 2011

total revenues 2,878.34 2,538.97

total expenses 2,538.80 2,383.20

Profit before tax and exceptional 339.54 155.77

items

Exceptional items (166.74) -

Profit before tax 172.80 155.77

Provision for taxation 110.80 57.97

Profit after tax 62.00 97.80

Balance brought forward 1,223.22 1,125.42

Balance carried to balance sheet 1,285.22 1,223.22

dividend

with a view to conserve the resources for future business requirements and expansion plans, your Directors are of view that the current year's profit be ploughed back into the operations and hence no dividend is recommended for the year under review.

operations & strategy

while there was general euphoria of growth in the media industry at the beginning of 2011-12, it began to die down as the year progressed. eventually, the second half was a sluggish period wherein the advertisement spends by the corporate tapered significantly in addition to the margins taking a hit for the media industry in general. However, your Company like the previous slowdown period, not only swam strongly against the tide, but also emerged as one of the most successful television news operators in the country.

several Network leveraged properties led to healthy advertisement revenues as well as marketing impact for the company. Ananya samman, your Company's Endeavour to honor the real heroes of our country has been executed across the length and breadth of the nation. the brand has been extended to honor doctors through swasth Bharat samman, industrialists through udyami samman in utter Pradesh and Andhra Pradesh and Farmers through Agri Awards. Over 100 odd revenue generating events were conducted to connect with viewers and enhance brand imagery.

the Network through its focus on rational and serious news ensured that it had the highest time spent Per Viewer in the 8 metros for the year in the core news viewers segment (source: Tam, Cs 25 M ABC, FY 2011-12,8 metros).

the flagship channel, Zee News, stuck to its content strategy of concentrating on concerns related to the common man through non-frivolous news. it was No. 2 in terms of time spent Per Viewer in 8 metros (source: Tam, Cs 15 , FY 2011-12, 8 metros).

Zee Business powered on with emphasis on stock market hours and presenting actionable information to the retail investors and sMEs. it was No. 2 in terms of reach in key business viewers segment (source: Tam, Cs 25 M ABC, FY 2011-12, HsM).

Your Company's Bengali news offering, 24 Ghanta recovered its leadership during the second half of the year, bouncing back after it had lost the top spot post state elections and change of government (source: Tam, Cs 25 M AB, Oct 2011 to Mar 2012, wB).

The Marathi news channel, Zee 24 Taas, remained extremely popular in Mumbai and was No. 2 channel reaching about 3.5 Million viewers (source: TAM, Cs 15 , FY 2011-12, Mumbai).

Amongst the newly launched channels, Zee News uttarakhand & uttar Pradesh continued its leadership in the Hindi heartland (source: TAM, Cs 15 , FY 2011-12, uP).

Zee 24 Gantalu and Zee Punjabi executed various events like spoorthi (woman Entrepreneur Awards) and Anhad samman (Ananya samman) respectively to honour the key contributors to the social and economical progress of these states.

Your Company now has comprehensive and more options for the new age news consumer. Zeenews.com - the mother site in English - was the fastest growing news website in India as per Comscore Direct and Google Analytics. Regional websites for Zee 24 Taas and 24 Ghanta were also launched during the year in addition to the inauguration of the Hindi website.

While the viewership performance has been impressive, the financials are encouraging too, as your Company follows strategy of leveraging Network strength to efficiently keep costs under check. The EBiTDA grew from Rs265.4 Million to Rs402.5 Million, a significant growth of 52% year on year.

Overall, your Company has been growing on a year on year basis since demerger of the Regional General Entertainment Channels (R-GECs). As has been said before, the growth has come despite difficult market conditions and is significant considering the performance of the other Television News Networks.

Public deposits

During the year under review, your Company has not accepted or renewed any deposits within the meaning of section 58A of the Companies Act, 1956 and rules made there under.

Corporate social responsibility

Corporate Social Responsibility (CSR) is a key part of your Company's business. Apart from it being a responsible member of the Fourth Estate, your Company also executes several initiatives throughout the year which benefit the society in general. in addition, there is significant amount of content which is devoted to helping the viewers through the programme Zee Helpline, wherein the Network ensures that the rights of the common man are protected and his queries are resolved by the administration.

Our flagship CSR initiative Ananya Samman truly turned national when it was executed in all our Network channels. it is a unique nationwide initiative to identify and honour unsung heroes, who silently contribute to our society. Another environmental campaign 'My Earth My Duty' was appreciated by none other than the United Nations. My Earth My Duty is one of the largest climate awareness campaigns wherein we planted trees across India. The nation's largest voter awareness initiative 'Apka Vote Apki Taqat' truly created an impact in the states where elections took place and was one of the factors leading to increased voter turnout.

Apart from these, your Company, as part of the Essel Group of Companies, has at a unified and centralized level, put in place a CSR policy. During the year under review, Essel Group continued to support cause of Ekal Vidyalaya Foundation, an NGO that works to bring about basic literacy and health awareness amongst the tribal and rural population of India; Global Vipassana Foundation which helps propagate Vipassana, the non-sectarian rational process of self-purification with the aim of bringing about peace both within the individual and the society in general; Global Foundation for Civilization Harmony, a body which aims to create a peaceful and harmonious society; and National Foundation of Communal Harmony, an autonomous organization set up by Ministry of Home Affairs.

employees stock option scheme

Till date of this report your Company has not granted any Stock Option either to its employees or Directors under 'ZNL ESOP Scheme 2009' approved by the Members at the 10th Annual General Meeting held on August 18, 2009. in view of this, particulars as required under Clause 12 (Disclosure in the Directors' Report) of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are Nil and Company has not obtained any certificate from the Statutory Auditors confirming implementation of the Employees Stock Option Scheme in accordance with SEBi guidelines and the resolution passed by the shareholders.

corporate governance

in addition to strictly complying with Clause 49 of the Listing Agreement, your Company is committed to adherence of the highest standards of Corporate Governance. in line with your Company's commitment to excel in implementing best Corporate Governances practices, your Board had earlier approved and implemented a Corporate Governance Manual which serves as guide to every business activity / decision making in the Company. Report on Corporate Governance as stipulated under the Listing Agreement(s) with the Stock Exchanges as also a Management Discussion and Analysis Report forms part of the Annual Report.

Certificate from the Statutory Auditors of the Company, M/s MGB & Co., Chartered Accountants, confirming compliance with the provisions of Corporate Governance as stipulated in Clause 49, is annexed to the said Corporate Governance Report.

directors

Mr. Vinod Bakshi, Director, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. Your Board has recommended his re- appointment.

SUBSIDIARY company

Your Company continues to hold 60% equity stake in its Subsidiary, Zee Akaash News Private Limited. Statement pursuant to Section 212 of the Companies Act, 1956 in connection with Zee Akaash News Pvt. Ltd., is attached herewith and forms part of this report.

in accordance with Accounting Standard AS 21 - Consolidated Financial Statements read with Accounting Standard AS 23 - Accounting for investments in Associates, and Accounting Standard AS 27 - Financial Reporting of interests in Joint Ventures, the audited Consolidated Financial Statements are provided in and forms part of this Annual Report.

As the Members are aware, the Ministry of Corporate Affairs has provided general exemption to companies from complying with Section 212 (8) of the Companies Act, 1956, provided such companies publish the audited consolidated financial statements in the Annual Report. Your Board has decided to avail the said general exemption and accordingly, the Annual Accounts of Zee Akaash News Private Limited for the financial year ended March 31, 2012 are not being attached with this Annual Report. Requisite financial highlights of the said subsidiary is annexed to this Report. The audited Annual Accounts and related information of the subsidiary will be made available, upon request or for inspection at the registered office, by any shareholder of the Company.

Auditors

statutory Auditors, M/s MGB & Co., Chartered Accountants, having Firm Registration No. 101169W, hold office until the conclusion of the ensuing Annual General meeting and are eligible for re-appointment.

the Company has received communication from the statutory Auditors confirming that (i) their re-appointment, if made, would be within the limits prescribed under section 224(1 B) of the Companies Act, 1956; (ii) that they are not disqualified for re- appointment within the meaning of section 226 of the said Act; and (iii) they have been provided a valid certificate from the Peer Review Board of the institute of Chartered Accountants of India.

Conservation of energy technology absorption and foreign exchange earnings and outgo

Your Company is into the business of Broadcasting of News & Current Affairs Channels in Hindi and various regional languages. since this does not involve any manufacturing activity, most of the information required to be provided under section 217(1) (e) of the Companies Act, 1956 read with the Companies (disclosure of Particulars in the Report of the Board of directors) Rules, 1988, is not applicable.

However the information as applicable is given hereunder: Conservation of Energy:

Your Company, being a service provider, requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.

Technology Absorption:

in its endeavor to deliver the best to its viewers and business partners, your Company has been constantly active in harnessing and tapping the latest and best technology in the industry.

Foreign Exchange Earnings and Outgo:

Particulars of foreign exchange earnings and outgo during the year are given in Note No. 37 to 39 of Note to the Financials statements of the Company

Particulars of employees

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are set out in an annexure to this Report. However, in terms of section 219(1)(b)(iv) of the Act, these details are not being sent as part of this Report and any shareholder interested in obtaining copy of the same may write to the Company secretary.

Directors' responsibility statement

Pursuant to the requirement of section 217(2AA) of the Companies Act, 1956, and based on representations received from the operating management, the Directors hereby confirm that:

(i) in the preparation of the Financial statements for the year ended march 31, 2012, the applicable Accounting standards have been followed and there are no material departures;

(ii) they have selected such accounting policies in consultation with the statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the financial year ended march 31, 2012;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956. they confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) they have prepared the Annual Financial statements on a going concern basis.

Acknowledgements

Your Board takes this opportunity to place on record its appreciation for the dedication and commitment of employees shown at all levels which have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation extended by various Governmental authorities, including ministry of information and Broadcasting, Department of telecommunication and other stakeholders including bankers, financial institutions, viewers, vendors and service providers.

For and on behalf of the Board

Punit Goenka Naresh Kumar Bajaj

managing Director Director

Place: Noida

Date : may 16, 2012


Mar 31, 2011

The Directors take pleasure in presenting the 12th Annual Report of the Company together with Audited Statement of Accounts of the Company for the year ended March 31, 2011.

FINANCIAL PERFORMANCE

(Rs in Millions) Particulars For the year ended

March 31, March 31, 2011 2010

Gross Income 2,442.22 5,093.17

Total Expenses 2,278.01 4,410.86

Profit before Tax 164.21 682.31

Provision for Taxation 66.41 242.65

Profit after Tax 97.80 439.66

Balance Brought Forward 1,125.42 685.76

Balance Carried to Balance Sheet 1,223.22 1,125.42

DIVIDEND

With a view to conserve the resources for future business requirements and expansion plans, your Directors are of view that the current years profit be ploughed back into the operations and hence no dividend is recommended for the year under review.

OPERATIONS & STRATEGY

It has been an optimistically buoyant year for Zee News Limited, with the network capitalizing on past gains and consolidating its position as the largest and No.l News Network of the country.

Your Company not only met, but also surpassed, critical benchmarks that it had set for itself for the FY 2011.

Zee News, the flagship channel, remained committed to its duty as the fourth estate and kept its focus on serious news while providing a 360 degree view of all major current affair events. This positioning that was adopted three years back is now getting established in the minds of the viewers, including amongst those who occupy space in the portals of political power.

It follows that the emphasis on unadulterated news helped the channel to earn loyal viewers and credibility in the crowded Hindi news market. Zee News was No.l in the Top 8 Metros in terms of Time Spent per viewer in 25+AB Male category, and No. 1 in Top 6 Metros in terms of Time Spent per viewer in the 15+ age category. (Source: TAM)

Zee Business, continued its supremacy in the stock market band, which is prime time for any business channel. Besides, the channel undertook several pioneering initiatives like the Aspire Campaign and conducted a Distance Learning B-school survey, arguably the first of its kind ever undertaken by a media company.

Your Companys Bengali offering, 24 Ghanta, was once again the undisputed leader in Financial Year 2010-11 in West Bengal, as well as in Kolkata, in terms of Viewership, Reach and Time Spent. (Source: TAM)

Both the newly launched channels, Zee News UP/UK and Zee 24 Gantalu made huge inroads in their respective Hindi and Telugu genres in all parameters including Relative Share, Reach and Time Spent per viewer. (Source: TAM)

Meanwhile, Zee 24 Taas finally came on the advertisers radar in the Marathi market and is beginning to show traction.

In line with the rationalization process of maintaining news hygiene and hiving off entertainment, the operations of Zee Tamil was discontinued on and from March 31, 2011.

In terms of profitability, Zee News Limited is proud to stand apart as a Company which is showing healthy numbers in terms of top line and bottom line. Consistent growth is what makes the Company unique, as the market mostly comprises players that are not performing so well as businesses.

Your Companys operating revenue stood at Rs 2,431.01 millions, its EBIDTA was Rs 265.22 millions with PAT at Rs 97.80 millions. The robust figures are an outcome of growth in revenue of Rs 2,359.59 millions accruing from both advertisements and subscription. The all round performance was contributed by all channels in the bouquet.

Overall, it can be said with considerable satisfaction that your Companys strategy to go with an innovative and solution driven approach worked as it helped to get on board retail clients in the regional markets. Increased operational efficiencies ensured that middle line was kept in check while revenues grew. Moreover, the policy of expanding and protecting existing margins provided your Company an edge over competition and helped it ride the growth curve.

In the beginning of the year, your Board has set an objective of consolidating the news operations and the performance has been in line with the set goal, which gives confidence to fuel judicious expansion in the future while keeping the focus firmly on current deliverables.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted or renewed any deposits within the meaning of Section 58A of the Companies Act, 1 956 and rules made thereunder.

CORPORATE SOCIAL RESPONSIBILITY

Social responsibility is an integral part of the way of doing business in your Company. Your Company is conscious about its responsibilities towards the society and the editorial policies of the channels are developed keeping this in mind. Your Company continuously engages itself in various activities addressing social issues.

Ananya Samman is one of the unique nationwide initiative to identify and honour unsung heroes, who silently contribute to our society. While Apka Vote Apki Taqat campaign that was aimed at inspiring the whole nation to exercise their voting rights was a resounding success this year, as was the initiative My Earth My Duty designed at raising the alarm against global warming and encouraging people to come forward and contribute towards making the planet greener.

In addition to these CSR initiatives, your Company continues its ongoing contributions to the noble cause of NGOs like Ekal Vidyalaya Foundation, Global Vipasana Foundation and Global Foundation for Civilizational Harmony and National Foundation of Communal Harmony (an autonomous organization set up by Ministry of Home Affairs).

GROUP

Pursuant to intimation received from the Promoters, the names of Promoters and entities comprising the group for the purpose of Clause 3(1 )(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, are disclosed in the Annual Report.

EMPLOYEES STOCK OPTION SCHEME

During the year under review, your Company had not granted any Stock Option either to its employees or Directors under ZNL ESOP 2009 Scheme approved by the Members at the 10th Annual General Meeting held on August 1 8, 2009. In view of this, particulars as required under Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are Nil.

CORPORATE GOVERNANCE

In addition to strictly complying with Clause 49 of the Listing Agreement, your Company is committed to adhere to the highest standards of Corporate Governance. In line with your Companys commitment to excel in implementing best Corporate Governances practices, your Board had earlier approved and implemented a Corporate Governance Manual which serves as guide to every business activity/decision making in the Company. Report on Corporate Governance as stipulated under the Listing Agreement(s) with the Stock Exchanges as also a Management Discussion and Analysis Report forms part of the Annual Report.

Certificate from the Statutory Auditors of the Company, M/s MGB & Co., Chartered Accountants, confirming compliances with the provisions of Corporate Governance as stipulated in Clause 49, is annexed to the said Corporate Governance Report.

DIRECTORS

During the year under review, post his resignation as Managing Director in July 2010, Mr. Laxmi N. Goel resigned from the directorship of the Company, with effect from the close of September 30, 2010. Your Board places on record its deep appreciation for the contributions made by Mr. Laxmi N. Goel as one of the founder Directors of the Company.

Mr. K. U. Rao, Director, retires by rotation and being eligible has offered himself for re-appointment at the ensuing Annual General Meeting. Your Board recommends his re-appointment.

SUBSIDIARY COMPANY

Your Company continues to hold 60% equity stake in its Subsidiary, Zee Akaash News Private Limited. Statement pursuant to Section 212 of the Companies Act, 1956 in connection with Zee Akaash News Pvt. Ltd., is attached herewith and forms part of this report.

In accordance with Accounting Standard AS 21 - Consolidated Financial Statements read with Accounting Standard AS 23 - Accounting for Investments in Associates, and Accounting Standard AS 27 - Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in and forms part of this Annual Report.

In compliance with conditions laid down in Circular No. 51/12/2007-CL-lll dated February 8, 2011 issued by Ministry of Corporate Affairs, your Board has decided to avail the general exemption from applicability of provisions of Section 212 of the Companies Act, 1956, by not attaching Annual Report of the Subsidiary Company with the Annual Report of the Company for financial year ended March 31, 2011. Requisite financial highlights of the Subsidiary Company forms part of the Consolidated financial statement. The Annual Accounts of the Subsidiary Company and related detailed information will be available for inspection by any Member of the Company and/or Subsidiary Company, at any point in time at the registered office of the Company and the Subsidiary Company. The Company shall furnish copy of Annual Report of the Subsidiary to any Member of the Company on demand.

AUDITORS

Statutory Auditors, M/s MGB & Co., Chartered Accountants, having Firm Registration No. 101169W, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received communication from the Statutory Auditors confirming that their re-appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1 956 and that they are not disqualified for re- appointment within the meaning of Section 226 of the said Act.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is into the business of Broadcasting of News & Current Affairs Channels in Hindi and various regional languages. Since these activities do not involve any manufacturing activity, most of the Information required to be provided under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is not applicable.

However the information as applicable is given hereunder:

Conservation of Energy

Your Company, being a service provider, requires minimal energy consumption and every endeavor has been made to ensure optimal use of energy, avoid wastages and conserve energy as far as possible.

Technology Absorption

In its endeavor to deliver the best to its viewers and business partners, your Company has been constantly active in harnessing and tapping the latest and best technology in the industry.

Foreign Exchange Earnings and Outgo

Particulars of foreign exchange earnings and outgo during the year are given in Note No. 1 6.5 of Part B of Notes to Accounts in Schedule 1 6 of the Annual Report of the Company.

PARTICULARS OF EMPLOYEES

No employee, other than Mr. Barun Das, Chief Executive Officer of the Company draw remuneration in excess of limits prescribed under the Companies (Particulars of Employees) Rules, 1975, as amended. Requisite details of remuneration paid to Mr. Barun Das during the year, pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is as detailed herein:

Name, Designation & Age Barun Das, Chief Executive Officer, 41

Total Remuneration Rs 94,56,000

Qualification B.Tech., Electronics & Communication, PGDBM

Total Experience & Date of 19 Years, November 1, 2007 Joining

Previous Employment MCCS (JV between Star Group & ABP Ltd.)

Total remuneration includes salary, allowances, performance incentive, company contribution to provident fund, leave travel assistance, medical benefits and other perquisites and benefits valued as per the Income Tax Act, 1 961.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, and based on representations received from the operating management, the Directors hereby confirm that:

(i) in the preparation of the Annual Accounts for the year ended March 31, 2011, the applicable Accounting

Standards have been followed and there are no material departures;

(ii) they have selected such accounting policies in consultation with the Statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for the financial year ended March 31, 2011;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1 956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) they have prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to place on record its appreciation for the dedication and commitment of employees shown at all levels which have contributed to the success of your Company. Your Directors also express their gratitude for the valuable support and co-operation extended by various Governmental Authorities, including Ministry of Information and Broadcasting, Ministry of Communications and Information Technology - Department of Telecommunication and other stakeholders including Bankers, Financial Institutions, Viewers, Vendors and Service Providers.

For and on behalf of the Board

Punit Goenka Naresh Kumar Bajaj

Managing Director Director

Place: Mumbai Date : May 25, 2011

 
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