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Notes to Accounts of Zee Media Corporation Ltd.

Mar 31, 2016

Note:

a. Effective 1 April 2015, the Company has changed its method of accounting in respect of expenses incurred on development of new television channels till the time it is ready for commercial launch as Intangible assets, as permitted under AS 26, instead of charging it to Statement of Profit and Loss. Accordingly, Rs, 18.67 million of development expenditure has been capitalized during the period. Had the Company continued to use the earlier method of accounting, the profit after tax for the current period would have been lower by Rs, 12.21 million.

b. With effect from 1 April, 2014, the Company has revised the useful life of some of its fixed assets to comply with the useful life as prescribed by Schedule II to the Companies Act, 2013. The carrying amount of the asset as on the date, (i.e., 1 April, 2014) has to be depreciated over the remaining prescribed useful life of the asset. Consequently, the depreciation charge of Rs, 54.78 million representing the written down value of fixed assets whose lives have expired as at 1 April, 2014 and deferred tax thereon of Rs, 18.62 million have been adjusted in surplus in the Statement of Profit and Loss. Previous year depreciation on tangible and intangible assets includes this depreciation of Rs, 54.78 million and Rs, 0 million (Rs, 2,662) respectively.

Note:

a) Each debenture is compulsorily convertible on or before seven years from the date of allotment at the option of the debenture holder at the fair value of the equity shares at the time of conversion.

b) Each debenture is compulsorily convertible on or before five years from the date of allotment at the option of the debenture holder at the fair value of the equity shares at the time of conversion.

c) Each debenture is compulsorily convertible on or before five years from the date of allotment at the option of the debenture holder at a conversion ratio of one equity share of Rs, 10 each for every Compulsorily Convertible Debenture of Rs, 10.

1. Operating Lease

The Company has taken office premises, residential premises 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 Lesser and the Lessee. The initial tenure of the lease period is generally for 11 to 120 months.

# Income tax demands mainly include appeals filed by the Company before various appellate authorities against the disallowance of expenses / claims. 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 Company has received legal notices of claims / law suits filed against it relating to infringement of copy rights, defamation suits etc. in relation to programs telecasted / other matters. In the opinion of the management, no material liability is likely to arise on account of such claims / law suits.

* Remuneration excludes leave encashment and gratuity provided on the basis of actuarial valuation on an overall Company basis.

Mr. Alok Agrawal who was appointed as Whole-time director of the Company w.e.f. 30 July, 2013 for a period of three years had resigned w.e.f. close of business on 12 May, 2014.

Mr. Ashish Kripal Pandit who was appointed as Executive director and CEO of the Company w.e.f. 01 June, 2015 has resigned w.e.f. close of business on 12, October 2015.

(b) Commission payable to Non executive directors of Rs, 1.42 million (Rs, 0.77 million) based on profits for the year is included in Miscellaneous expenses'' (Refer Note 24).

(c) Sitting fees paid to Non executive directors of Rs, 1.10 million (Rs, 1.18 million) is included in ''Miscellaneaous expenses'' (Refer Note 24).

2. As per the requirement of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted by the Company. The Company is required to spend Rs, 3.15 million (Rs, 4.94 million) on the activities specified in the Schedule VII of the Companies Act, 2013 which has been fully paid during the year and included in Note 24.

3. Pursuant to the Letter of Offer dated 16 March, 2015 for Rights Issue of equity shares, the Company has allotted 108,643,732 Rights Equity Shares of Rs, 1 each, fully paid up, on 18 April, 2015, at a price of Rs, 18 per share (including premium of Rs, 17 per share). The said Rights Issue was fully subscribed for an amount aggregating to Rs, 1,955.59 million, resulting in increase in Paid-up Share Capital of the Company to Rs, 470.79 million, comprising of 470,789,505 Equity Shares of Rs, 1 each. Out of the said proceeds,Rs, 1,480.61 million have been utilized for the stated purposes and the balance amount of Rs, 474.98 million, pending utilization have been temporarily deployed in fixed deposits and current accounts with banks as per details given below:

The Rights Issue expenses of Rs, 30.66 million are adjusted against Securities Premium in accordance with Section 52 of the Companies Act, 2013.

4. Micro, Small and Medium Enterprises

The Company has no dues to Micro, Small and Medium Enterprises during the year ended 31 March, 2016 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.

5. Employee Benefits

As per the Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits are given below:

(A) Defined Benefit Plan

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.

Disclosure of gratuity in terms of AS 15 is as under:

(i) Expenses recognized during the year

Note:

(a) Amount recognised as an expense and included in Note 21 ''Employee benefit expense'' are gratuity '' 26.14 million ('' 35.93 million) and leave encashment Rs, 23.40 million (Rs, 33.80 million).

(b) The estimates of rate of escalation in salary considered in the actuarial valuation takes into account of 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 21 ''Employee benefits expense'' above.

6. Disclosures as required by Regulation 34(3) of the Listing Agreement

(a) Loans and advances given to subsidiary / associate:

(b) None of the loaners have made investments in the shares of the Company.

7. Related Party Transactions

(i) List of Parties where control exists:

Direct Subsidiary:

- Zee Akaash News Private Limited (extent of holding 60%),

- Mediavest India Private Limited (extent of holding 100%)

- Pri - Media Services Private Limited (extent of holding 100%)

- Maurya TV Private Limited (extent of holding 100% w.e.f. 12 December, 2014)

Indirect Subsidiary:

- Diligent Media Corporation Limited (Mediavest India Private Limited holds 99.99%)

(89,095,342 equity shares held out of a total of 89,095,542 equity shares)

Associate:

- Maurya TV Private Limited (extent of holding 37.87% up to 11 December, 2014)

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

24 Ghantalu News Limited, ATL Media Limited (formerly known as Asia Today Limited), Cyquator Media Services Private Limited, Dish TV India Limited, Digital Subscriber Management and Consultancy Services Private Limited, Essel Business Excellence Services Private Limited, Essel Corporate Resources Private Limited, Essel Shyam Communication Limited, Essel Vision Production Limited, Essel Finance VKC Forex Limited, Jay Properties Private Limited, India Webportal Private Limited, Media Pro Enterprise India Private Limited, Pan India Network Limited, Siti Cable Network Limited, Smart Wireless Private Limited, Taj Television (India) Private Limited, Zee Entertainment Enterprises Limited, Zee Foundation, Zee Learn Limited, Zee Sports Limited, Zee Turner Limited, Zee Digital Convergence Limited.

Key Management Personnel Directors

Dr. Subhash Chandra (Non-Executive Chairman), Shri Alok Agrawal (up to 12 May, 2014), Shri Ashish Kripal Pandit (w.e.f. 01 June, 2015 up to 12 October, 2015)

* Includes interest Rs, 29.68 million.

Note: All the loans are short term in nature given for general business purpose, and carry interest ranging from 12.50% to 13.50% per annum.

(b) Investments made

There are no investments by the Company other than those stated under Note 11 in the Financial Statements.

(c) Guarantees given

The Company has provided guarantees aggregating to Rs, 2,500.00 million for redeemable non convertible debentures issued (previous year Rs, 2,540.00 million for loans raised) by its wholly owned subsidiary viz. Pri-Media Services Private Limited and Rs, 200.00 million (previous year Nil) for loans raised by its indirect subsidiary viz. Diligent Media Corporation Limited.

(d) Securities given

There are no securities given during the year.

8. (a) Consumption of Raw stock (included in operational cost)

9. Segment Reporting

The Company is engaged in the business of "Production and Broadcasting of Television software" which in the context of AS 17 "Segment Reporting" is considered as the only reportable business segment. The geographical segment is not relevant as exports are insignificant.

10. The Management is of the opinion that its international and domestic transactions are at arm length as per the independent accountants report for the year ended 31 March, 2015. 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.

11. Scheme of Amalgamation

The Scheme of Amalgamation (the ''Scheme'') under Section 391 to 394 and other applicable provisions of the Companies Act, 1956 for the amalgamation of Essel Publishers Private Limited ("EPPL") with the Company was approved by the Hon''ble High Court of Judicature at Mumbai vide Order passed on 2 May, 2014, with Appointed Date being 1 April, 2014. The Scheme has been made effective on 27 May, 2014 and hence given effect in the financial statements for the year ended 31 March 2015. Pursuant to the Scheme, the entire business and whole of the undertaking of EPPL, including all assets and liabilities of EPPL as detailed below, vested in the Company as a going concern and recorded at their respective fair values under the "Purchase Method" as per Accounting Standard 14.

Pursuant to the Scheme:

(i) The Company has issued and allotted 122,381,817 fully paid up Equity Shares of '' 1 each to the shareholders of EPPL in the ratio of 2 fully paid up Equity Shares Rs, 1 each of the Company for every 11 Equity Shares Rs, 1 each held in EPPL.

(ii) Rs, 1,671.62 million, i.e. excess of assets over liabilities transferred to the Company and cancellation of inter company balances and obligations, has been transferred to the Capital Reserve.

(iii) The authorised share capital of the Company is increased by Rs, 700 million to Rs, 1,700 million divided into 1700,000,000 Equity Shares of Rs, 1 each.

* Basic and diluted EPS of previous year is adjusted for equity shares issued pursuant to the Rights Issue.

12. Previous year comparatives

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


Mar 31, 2013

1. Corporate Information

Zee News Limited ("ZNL" or "the Company") is incorporated in the State of Maharashtra, India. The Company is mainly in the business of broadcasting of news, current affairs programs uplinked from india and sale of television programs including program feeds.

2. Operating Lease

The Company has taken office premises, residential premises 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 period is generally for 11 to 108 months.

3. Contingent Liabilities not provided for

Rs. million

2013 2012

Custom Duty pending export obligations 18.18 18.18

disputed direct taxes 9.31 3.82

Legal cases against the Company

* Not Not

Ascertainable Ascertainable

* The Company has received legal notices of claims / law suits filed against it relating to infringement of copy rights, defamation suits etc. in relation to programs telecasted / 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

estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) is Rs. 53.21 million (Rs. 85.86 million).

5. Managerial remuneration

Commission payable to Non executive Directors of Rs. 1.60 million (Rs. 1.00 million) based on profits for the year ended 31 March 2013 is included in ''Miscellaneous expenses'' under Note 23 "Other expenses".

6. The Company has given advances/deposits of Rs. 640.90 million to various companies for the purpose of content and marketing. However, due to various reasons, the contract could not be executed and accordingly the advances/deposits have been received back.

7. The Company is in the process of reconciling Integrated Receiver Decoder (IRD) boxes included under Plant and Machinery and Capital work in progress - Fixed Assets. The Management is of the view that the financial impact on reconciliation, if any, would not be material.

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 the Accounting Standard 15 "employee Benefits", the disclosure of employee benefits as defined in the Accounting standard are given below:

(A) defined Benefit plan

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 seperately to build up the final obligation. The obligation for leave benefits (non funded) is also recognised using the projected unit credit method.

10. related party transactions

(i) List of parties where control exists: Holding Company: 25 FPS Media Private Limited (Holding 53.34% w.e.f. 1 March, 2012) ultimate Holding Company:

- 25 FPS Media Private Limited held by essel Corporate Resources Private Limited

- essel Corporate Resources Private Limited held by Prime Publishing Private Limited

- Prime Publishing Private Limited held by Spirit Textiles Private Limited (w.e.f. 1 October 2012) subsidiary Company:

Zee Akaash News Private Limited (extent of holding 60%), 24 Ghantalu News Limited (extent of holding 100%)

Fellow subsidiary:

Bioscope Cinemas Private Limited, Direct Media Distribution Ventures Private Limited, Mediavest India Private Limited, Pri - Media Services Private Limited, Diligent Media Corporation 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:

Asia Today Limited, Cyquator Media Services Private Limited, Dish TV India Limited, Digital Ventures Private Limited, e-City

Bioscope entertainment Private Limited, essel International Limited, essel Shyam Communication Limited, India Webportal Private Limited, Media Pro enterprise India Private Limited, Pan India Network Limited, Procall Private Limited, Rama Associates Limited, Siti Cable Network Limited (previously known as Wire and Wireless (India) Limited), Smart Wireless Private Limited, Taj TV Limited, Taj Television (India) Private Limited, Veena Investments Private Limited, Zee entertainment enterprises Limited, Zee Foundation, Zee Learn Limited, Zee Sports Limited, Zee Telefilms Middle east FZ LLC, Zee Turner Limited.

directors / Key Management personnel

Shri Subhash Chandra (Non-executive Director), Shri Punit Goenka (Managing Director)

11. Segment Reporting

The Company is engaged in the business of "Production and Broadcasting of Television software" which in the context of AS 17 "Segment Reporting" is considered as the only reportable business segment. The geographical segment is not relevant as exports are insignificant.

12. 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, 2013. 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.

13. Considering the business synergies, the Board of Directors of the Company, in their meeting held on 23 May 2013, has in- principle approved combination of ''News Publication Business'' of Diligent Media Corporation Limited - a Promoter Group company engaged in printing and publication of english daily ''DNA'' and the ''News Broadcasting Business'' of the Company and constituted a Committee to engage / appoint independent professionals to advice on the appropriate structure / manner of combination and its valuation, cost-benefit analysis, procedural and others aspects for consideration by the Audit Committee and the Board in due course.

14. previous year comparatives

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


Mar 31, 2012

1. Background

Zee News Limited ("ZNL or "the Company) is incorporated in the State of Maharashtra, India. its shares are listed on two Stock Exchanges in India. The Company has been mainly in the business of broadcasting of news, current affairs and regional entertainment satellite television channels uplinked from India.

2.1 the rights attached to equity shares:

a) the Company has only one class of shares i.e. equity shares having face value of Rs1 per share. Each holder of the share has one voting right per share.

b) in the event of liquidation of the Company, the holder of the share will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. the distribution of assets will be in proportion to the number of shares held by the shareholder.

3.1 Secured term loan of Rs500,000,000 was taken from bank in the financial year 2010-11 and is secured by way of first hypothecation charge on entire movable fixed assets of the Company, except vehicles, both present and future. The loan is repayable in 10 installments payable quarterly, commencing April 2011. The loan presently carries interest rate of 13.50% per annum payable monthly.

4.1 Secured working capital facility of Rs500,000,000, repayable on demand, is secured by way of first hypothecation charge on entire current assets as well as movable fixed assets of the Company, both present and future. The facility includes working capital demand loan of Rs400,000,000 which presently carries interest rate of 11.50% per annum, payable monthly and cash credit limit of Rs100,000,000 which presently carries interest rate of 14.75% per annum, payable monthly.

5.1 includes Rs5,033,730 (Previous Year Rs310,532) payable to subsidiary, Rs2,409,126 (Previous Year Rs Nil) payable to Holding Company and Rs45,343,237 (Previous Year Rs186,277,703) payable to Other Related Parties.

6.1 there is no amount due and outstanding to be credited to investors education and Protection Fund as at march 31, 2012.

7.1 Programs/Film Rights are intangible assets as defined in As - 26 but these are acquired and used for its broadcasting business hence considered and included in Operational Cost and Current Assets - inventories.

7.2 the Company has impaired Programs of Rs4,121,912 (Previous Year Rs606,565).

8. Leases:

in respect of assets taken on operating lease :

The Company's significant leasing arrangements are in respect of operating leases taken for office premises, residential premises and plant and machinery (including equipments). These leases are cancelable/non-cancelable, that are renewable on a periodic basis at the option of both the less or and the lessee. The initial tenure of the lease period is generally for 11 to 108 months.

9. Contingent Liabilities not provided for:

(Amount in Rs.)

2012 2011

Claims against the Company not acknowledged as debts - 2,130,000

Custom Duty on Pending Export Obligations 18,183,059 18,183,059

Disputed Direct Taxes 3,818,080 3,818,080

Legal cases against the Company Unascertained Unascertained

The Company has received legal notices of claims / law suits filed against it relating to alleged infringement of copy rights and defamation in relation to programs telecasted by it. in the opinion of the Management no material liability is likely to arise.

10. Capital and other Commitments:

Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) is Rs85,863,021 (Rs32,657,810).

11. Managerial Remuneration:

Commission provided during the year for Non Executive Directors Rs1,000,000 (Rs1,350,000) is included in Miscellaneous Expenses under Note No. 23 "Other Expenses.

12. Foreign exchange Difference:

a) the foreign exchange loss (net) Rs2,139,216 (previous year gain Rs536,417) on settlement or realignment of foreign exchange transactions has been adjusted under the head "Gain/Loss on Foreign exchange difference in the statement of Profit and Loss.

b) Foreign currency exposures that are not hedged by derivative instruments as at March 31,

c) Derivative contracts (Forward Contracts for hedging purposes) entered into by the Company and outstanding at March 31, 2012 is RsNil (Previous Year RsNil).

13. Micro, small and Medium enterprises:

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

14. Retirement Benefits:

(A) Defined Benefit plan:

the present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. the defined benefit obligations are not funded.

Note:

a) Amount recognized as an expense and included in Note No. 21 "Employee Benefit Expenses" are Gratuity Rs15,417,121 (Previous year Rs.12,728,030) and Leave Encashment Rs8,423,422 (Previous Year Rs.10,936,123).

b) the estimates of future salary increases considered in the actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(B) defined Contribution plan:

"Contribution to Provident Fund and Other Funds is recognized as an expense in Note No. 21 "Employee Benefit Expenses.

15. Related party Transactions:

i) List of parties where control exists:

Holding Company:

25 Fps Media private Limited (Holding 53.34% w.e.f. March 1, 2012) (A wholly owned subsidiary of Essel Corporate Resources Private Limited) essel Corporate resources private Limited (w.e.f. October 20, 2011 to February 28, 2012)

subsidiary Company:

Zee Akaash News Private Limited (extent of holding 60%)

ii) other related parties with whom transactions have taken place during the year and balance outstanding as on the last day of the year:

Asia today Limited, Agrani Convergence Limited, Cyquator Media services Private Limited, diligent Media Corporation Limited, dish Tv India Limited, E-City Bioscope Entertainment Private Limited, E-City Property Management and services Private Limited*, Essel international Limited, Essel shyam Communication Limited, Himgiri Navh Vishwavidyalaya, India Webportal Private Limited, interrex India Limited*, Media Pro Enterprise India Private Limited, Pan India Network Limited, Pan India Paryatan Private Limited*, Procall Private Limited, Rama Associates Limited, Real Media FZ LLC, RKJ Woods Plantations Private Limited*, smart Wireless Private Limited, taj Tv Limited, taj television (India) Private Limited, Wire and Wireless (India) Limited, Wire and Wireless Tisa satellite Limited, Veena investments Private Limited, Zee Entertainment Enterprises Limited, Zee Foundation, Zee Learn Limited, Zee sports Limited, Zee telefilms Middle East FZ LLC, Zee turner Limited.

* Not a related party during the current year

Key Management personnel

shri subhash Chandra, shri Punit Goenka

16. segment reporting:

the Company is engaged in the business of production and broadcasting of television software which in the context of AS 17 "Segment Reporting" is considered as the only reportable business segment. the geographical segment is not relevant as exports are insignificant.

17. Schedule Vi of the Companies Act, 1956 is revised effective from April 1, 2011 and the adoption of the revised Schedule Vi has significantly impacted the presentation and disclosures in the financial statements. Previous year's figures have been regrouped/ reclassified in accordance with current year's classifications/ disclosures. Further, current year's figures are not comparable with previous year's figures due to closure of operations of Tamil channel w.e.f. March 31, 2011.


Mar 31, 2011

Background

Zee News Limited ("ZNL" / "the Company") was incorporated in the State of Maharashtra, India. The Company has been mainly in the business of broadcasting of news, current affairs and regional entertainment satellite television channels uplinked from India. Operation of Zee Tamil channel has been discontinued on March 31, 2011.

1. Restructuring:

Pursuant to the Scheme of Arrangement under Section 391 to 394 and other applicable provisions of the Companies Act, 1 956 between Zee News Limited (ZNL) and Zee Entertainment Enterprises Limited (ZEEL) and their respective shareholders and creditors, sanctioned by the Honourable High Court at Mumbai on March 19, 201 0 and filed with the Registrar of Companies on March 29, 2010, the Regional General Entertainment Channel (RGEC) Business Undertaking of the Company, comprising of six television channels namely Zee Marathi, Zee Talkies, Zee Bangla, Zee Kannada, Zee Telugu and Zee Cinemalu, assets of Zee Gujrati, a discontinued television channel, has been transferred to and vested in ZEEL with effect from January 01, 201 0, on going concern basis. The Scheme has been given effect in the financial statements for the year ended March 31, 201 0. The excess of book value of the assets over the book value of liabilities transferred aggregating to Rs 1,247,833,726 was adjusted against Capital Reserve.

2. Secured Loans:

2.1 Short-term working capital loan of Rs Nil (Rs 1,1 80,546,808) from bank is secured by way of first hypothecation charge, on pari passu basis with other lenders, on the current assets as well as movable fixed assets of the Company, both present and future.

2.2 Long-term corporate loan of Rs 500,000,000 (Rs Nil) from bank is secured by way of first hypothecation charge on entire movable fixed assets of the Company, except vehicles, both present and future. Repayable within a yearRs 150,000,000.

2.3 Vehicle loans are secured against hypothecation of Vehicles [Due within one year Rs 9,109,81 6 (Rs 5,862,231)].

3. Programs/Film Rights etc. for broadcasting are intangible assets as defined in AS - 26 but considered and shown under current assets as are used for broadcasting in the ordinary course of business. The Company, for the current year, has recognized impairment loss of Rs 606,565 in respect to Programs/Film Rights and the loss is included in Operational Cost.

4. Investments:

tThe Company has long term investment of Rs 60,900,000 (Rs 60,900,000) in Akash Bangla Private Limited (ABPL). The Company has also advanced Share Application Money of Rs 105, 843,191 (Rs 70,593,191) to ABPL. As at Balance Sheet date, the networth of ABPL is eroded. The investment is strategic in nature considering Shareholding Agreement and having regard to the future business plan and projected profitability, the management perceives the erosion in the value of investment in ABPL as only temporary diminution in value. Hence, no provision for diminution in value is considered necessary in respect of Companys investment or of the Share Application Money to ABPL.

5. Fixed Deposits includes Rs 4,350,000 (Rs 4,350,000) lodged with Tax Authorities.

6. Leases:

In respect of assets taken on operating lease:

The Companys significant leasing arrangements are in respect of operating leases taken for offices premises and equipments. These leases are cancellable/non-cancellable, that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the lease period is for 11 to 1 08 months.

11. Other Disclosures:

11.1 Previous years figures are regrouped, rearranged or recast wherever considered necessary to conform to this years classification. Current years figures are not comparable with previous years figures due to demerger of Regional General Entertainment Channels from the Appointed Date i.e. January 1, 2010 (Refer Note 1). Figures in bracket pertain to previous year.

1 1.2 Sundry Creditors for Expenses and Other Liabilities includes cheques overdrawn of Rs Nil (Rs 51,221,586) and amount payable to subsidiary Rs 310,532 (Rs Nil)

11.3 Capital Work-in-progress includes capital advance of Rs 2,230,291 (Rs 32,636,466).

1 1.4 Advances given includes:

a) Share Application Money Rs 67,232,334 (Rs 67,232,334) and advance recoverable Rs Nil (Rs 2,475,288) from the subsidiary.

b) Share Application Money paid Rs 105,843,191 (Rs 70,593,191) to others.

c) Interest recoverable Rs 873,641 (Rs 128,487,866).

1 1.5 Micro, Small and Medium Enterprises:

The Company has no dues to Micro, Small and Medium Enterprises during the year ended March 31, 2011, on the basis of information provided by the parties and available on record.

1 1.6 Foreign Exchange Difference:

a) The foreign exchange gain (net) Rs 536,417 (Rs 2,954,478) on settlement or realignment of foreign exchange transactions has been adjusted in respective heads of the Profit and Loss Account.

b) As at Balance Sheet date, the Company has foreign currency payable and receivable amounting to Rs 36,227,81 6 (Rs 7,740,922) and Rs 35,154,067 (Rs 29,453,407) respectively which are not hedged by a derivative instrument or otherwise.

c) Derivative Contracts (Forward Contracts for hedging puposes) entered into by the Company and outstanding at March 31, 2011 is Rs Nil (Nil).

1 1.7 Contingent Liabilities not provided for:-

Amount (Rs)

Particulars 2011 2010

Claims against the Company not acknowledged as debts 2,130,006 2,130,006

Custom Duty on Pending Export Obligations 18,183,059 18,183,059

Bank Guarantee Outstanding 7,528,394 -

Disputed Direct Taxes 3,818,080 3,585,088

Legal cases against the Company Unascertained Unascertained

The Company has received legal notices of claims/law suits filed against it relating to alleged infringement of copy rights and defamation in relation to programs telecasted by it. In the opinion of the Management no material liability is likely to arise.

12. Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) is Rs 32,657,810 (Rs 8,940,660).

13. Related Party Transactions:

(i) List of Parties where control exists: Subsidiary Company:

Zee Akaash News Private Limited (extent of holding 60%)

(ii) 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, Asia Today Limited, Asia TV Limited, Continental Drugs Company Private Limited, Cyquator Media Services Private Limited, Dakshin Communication Private Limited, Diligent Media Corporation Limited, Dish TV India Limited, E-City Bioscope Entertainment Private Limited, E-City Projects Construction Private Limited, E-City Entertainment Network Limited, E-City Property Management Services Private Limited, Essel Corporate Resources Private Limited, Essel Shyam Communication Limited, Himgiri Navh Vishwavidyalaya, Interactive Tradex India Private Limited, Intrex Trade Exchange Limited, Pan India Network Limited, Pan India Network Infravest Private Limited, Pan India Paryatan Private Limited, Prime Publishing Limited, Procall Private Limited, Rama Associates Limited, Real Media FZ LLC, RKJ Woods Plantations Private Limited, Smart Wireless Private Limited, Wire and Wireless (India) Limited, Wire and Wireless Tisai Satellite Limited, Veena Investments Private Limited, Zee Entertainment Enterprises Limited, Zee Learn Limited, Zee Telefilms Middle East FZ LLC, Zee Turner Limited, Zee Sports Limited.

Key Management Personnel

Shri Subhash Chandra, Shri Punit Goenka, Shri Laxmi Narain Goel (upto September 30, 2010), Shri Naresh Kumar Bajaj, Shri K.U. Rao, Shri Vinod Bakshi

15. Segment Reporting:

The Company is engaged in the business of production and broadcasting of television software which in the context of AS 17 "Segment Reporting" is considered as the only reportable business segment. The geographical segment is not relevant as exports are insignificant.

16. Additional Information:

Other Additional Information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1 956, are as under:

16.1 The Company is in the business of producing television programs and is not subject to any license hence there is no licensed capacity. Further the nature of business of the Company is such that the installed capacity is not quantifiable.

1 6.2 The details of opening stock, acquisitions/productions, sales and closing stock of programs and film rights are as under:

Notes:

1. Previous years figures are regrouped, rearranged or recast wherever considered necessary to conform to this years classification. Current years figures are not comparable with previous years figures due to demerger of Regional General Entertainment Channels from the Appointed Date i.e. January 1, 201 0 (Refer Note


Mar 31, 2010

1. Restructuring:

"The Scheme of Arrangement under Section 391 to 394 and other applicable provisions of the Companies Act, 1956 between Zee News Limited (ZNL) and Zee Entertainment Enterprises Limited (ZEEL) and their respective shareholders and creditors was sanctioned by the Honble Bombay High Court at Mumbai on March 19, 2010 and filed with the Registrar of Companies on March 29, 2010. Pursuant to the Scheme, the Regional General Entertainment Channel (RGEC) Business Undertaking of the Company, comprising of six television channels namely Zee Marathi, Zee Talkies, Zee Bangla, Zee Kannada, Zee Telugu and Zee Cinemalu (broadcasting yet to be commenced), assets of Zee Gujrati, a discontinued television channel, on a going concern basis has been transferred to and vested in ZEEL with effect from the appointed date i.e. January 1, 2010. The Scheme has been given effect to in these financial statements."

In consideration for the transfer and vesting of the RGEC Business Undertaking in ZEEL, the members of the Company holding fully paid-up equity shares in the Company, and whose names appear in the register of members of the Company, on the Record Date, are allotted 4 fully paid Equity Shares of Re. 1 each of ZEEL for every 19 fully paid Equity Shares of Re. 1 each held in ZNL.

In pursuance of the Scheme of Arrangement approved by the Honble Bombay High Court, Mumbai, the Board of Directors in the meeting held on March 25, 2010 has approved the transfer of assets and liabilities as under and approved adjustment of excess of the book value of the assets transferred over the book value of liabilities aggregating to Rs. 1,247,833,726 against Capital Reserve Account.

2. Secured Loans:

2.1 Short-term working capital loan of Rs. 1,180,546,808 (Rs. Nil) from bank is secured by way of first hypothecation charge, on pari passu basis with other lenders, on the current assets as well as movable fixed assets of the Company, both present and future.

2.2 Short-term working capital loan of Rs. Nil (Rs. 750,000,000) from others was secured by way of first hypothecation charge over the current assets (excluding a bank account on which the lender has first charge) of the Company ranking pari passu with other lenders.

2.3 Term Loans from Banks is secured by way of hypothecation charge on entire fixed assets (both movable and immovable) and current assets including program and media rights ranking pari passu with other term lenders. [Due within one year Rs. Nil (Rs. 150,000,000)]. The loan has been transferred to Zee Entertainment Enterprises Limited, pursuant to Scheme of Arrangement.

2.4 Vehicle loans are secured against hypothecation of Vehicles [Due within one year Rs. 5,862,231 (Rs. 8,023,546)].

3. Program/film rights etc. for broadcasting are intangible assets as defined in AS – 26 but considered and shown under current assets as are used for broadcasting in the ordinary course of business.

4. Fixed Deposits/Margin includes Rs. 4,380,000 (Rs. 4,380,000) lodged with Tax Authorities and Rs. Nil (Rs. 28,125,000) is under charge of Term Loan Lenders.

5. Leases:

In respect of assets taken on operating lease:

The Company’s significant leasing arrangements are in respect of operating leases taken for offices premises and equipments. These leases are cancellable/non-cancellable, that are renewable on a periodic basis at the option of both the lessor and the lessee. The initial tenure of the lease period is for 1 to 108 months.

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

6. Commission paid/payable to Non-Executive Directors Rs. 3,000,000 (Rs. 2,827,000) is included in Miscellaneous Expenses under Schedule 13 "Administrative and Other Expenses".

7. Other Disclosures:

7.1 Current years figures are not comparable with previous years figures due to demerger of Regional General Entertainment Channels from the appointed date i.e. January 1, 2010 (Refer Note 1). Previous years figures are regrouped/recasted wherever considered necessary. Figures in bracket pertain to previous year.

7.2 Sundry Creditors for Expenses and Other Liabilities includes cheques overdrawn of Rs. 51,221,586 (Rs. 115,570,032).

7.3 Capital work-in-progress includes capital advance of Rs. 32,636,466 (Rs.23,097,799).

7.4 Advances given includes:

a) Share application money Rs. 67,232,334 (Rs. 67,232,334) and Advance recoverable Rs. 2,475,288 (Rs. 650,511) recoverable from the subsidiary and also a private limited company in which Director of the Company is a Director.

b) Share Application Money paid Rs. 70,593,191 (Rs. 8,500,000) to others.

c) Interest recoverable Rs. 128,487,866 (Rs. 34,576,358).

7.5 Micro, Small and Medium Enterprises:

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

7.6 Foreign Exchange Difference:

a) The foreign exchange gain (net) Rs. 2,954,478 (Rs.11,325,047) on settlement or realignment of foreign exchange transactions has been adjusted in respective heads of the Profit and Loss Account.

b) As at Balance Sheet date, the Company has foreign currency payable and receivable amounting to Rs. 7,740,922 (Rs. 57,947,203) and Rs. 29,453,407 (Rs. 82,839,642) respectively which are not hedged by a derivative instrument or otherwise.

c) Derivative contracts (Forward Contracts for hedging puposes) entered into by the Company and outstanding at March 31, 2010 is Rs. Nil (Nil).

The Company has received legal notices of claims/law suits filed against it relating to alleged infringement of copy rights and defamation in relation to programs telecasted by it. In the opinion of the Management no material liability is likely to arise.

(A) Defined Benefit Plan:

The present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. The defined benefit obligations are not funded.

Notes:

(a) The above information is in respect of continuing business remained after demerger of Regional General Entertainment Channels. The total Gratuity and Leave Encashment costs for the year recognized as an expense and included in the Schedule 12 - "Personnel Cost" are Gratuity Rs. 8,554,447 (Rs. 9,676,193) and Leave Encashment Rs. 12,183,594 (Rs. 7,744,567). The Gratuity and Leave Encashment liaibility of discontinued business transferred to ZEEL was Rs. 6,164,878 and Rs. 6,343,294 respectively.

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

(B) Defined Contribution Plan:

“Contribution to Provident Fund and Other Funds” is recognised as an expense in Schedule 12 - "Personnel Cost" of the Profit and Loss Account.

8. Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) is Rs. 8,940,660 (Rs.45,545,849).

9. Related Party Transactions:

(i) List of Parties where control exists: Subsidiary Company:

Zee Aakash News Private Limited (extent of holding 60%)

(ii) 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, Asia Today Limited, Asia TV Limited, Asian Sky Shop Limited, Continental Drugs Company Private Limited, Cornershop Entertainment Company Private Limited, Cyquator Media Services Private Limited, Cyquator Technologies Limited, Dakshin Communication Limited, Diligent Media Convergence Limited, Diligent Media Corporation Limited, Dish TV India Limited, E-City Bioscope Entertainment Private Limited, E-City Projects Construction Private Limited, ETC Networks Limited, E-City Entertainment Network Limited, E-City Property Management Services Private Limited, Essel Corporate Resources Private Limited, Essel Shyam Communication Limited, Himgiri Navh Vishwavidyalaya, Interactive Tradex India Private Limited, Intrex Trade Exchange Limited, Pan India Network Limited, Pan India Network Infravest Private Limited, Pan India Paryatan Limited, Prime Publishing Limited, Playwin Infravest Private Limited, Procall Private Limited, Rama Associates Limited, Real Media FZ LLC, RKJ Woods Plantations Private Limited, Smart Wireless Private Limited, Suncity Projects Private Limited, United News of India, Wire and Wireless Tisai Limited, Veena Investment Private Limited, Wire and Wireless (India) Limited, Zee Entertainment Enterprises Limited, Zee Intractive Learning Systems Limited, Zee Telefilms Middle East FZ LLC, Zee Turner Limited, Zee Sports Limited.

10. Segment Reporting:

The Company is engaged in the business of production and broadcasting of television software which in the context of AS 17 "Segment Reporting" is considered as the only reportable business segment. The geographical segment is not relevant as exports are insignificant.

11. Additional Information:

Other Additional Information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1956, are as under:

11.1 The Company is in the business of producing television programs and is not subject to any license hence there is no licensed capacity. Further the nature of business of the Company is such that the installed capacity is not quantifiable.

11.2 The details of opening stock, acquisitions/productions, sales and closing stock of programs and film rights are as under:

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