big ideas in entertainment -...
TRANSCRIPT
Big ideas in entertainment
Zee Annual Report 2001-2002
We started with the small screen.
With big resources behind it.
There’s technology worth millions, thousands of
manyears of experience, a future-proof vision
and a unique viewer insight. As India’s largest
and only fully integrated media and
entertainment company, Zee has proven its
ability as well as its ambition.
It is this spirit that keeps over 225 million
viewers across the globe informed and
entertained. Zee is all set to consolidate this
success on the small screen and target the
media world. With big ideas.
ZEE TELEFILMSLIMITED
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contentsValue Statement 2
Chairman’s Statement 3
Zee Value Chain 6
Product Offerings 8
Programming Highlights 10
Film Production & Distribution 13
Consolidation - Acquisitions 14
Zee Network - Global reach 16
Our Offices 17
Board of Directors 18
Directors’ Report 20
Statement pursuant to Section 212 26
Corporate Governance Report 28
Shareholders’ Information 33
Management Discussion and Analysis 38
Auditors’ Report 47
Financials 50
Cash Flow Statement 71
Last Five Years’ Financial Highlights 73
Performance Ratio and Analysis 74
Consolidated Financial Statements 75
value statement
To maintain the Company’s pioneering
status as a multimedia content and
access provider, driven by
viewer response and shareholder confidence.
We will continue to aim for greater
growth in creativity and productivity
by adding value to existing properties,
both for our viewers and advertisers.
Convergence through flow of
group synergies shall make innovation
an inevitable part of the Zee brand.
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chairman’s statement
Dear Shareholder,
In the financial year 2002, world politics and economics went
through difficult times. The year witnessed a steep fall in
marketing and advertising spends and global advertising
market reportedly declined by 5% after a decade of solid
year-on-year growth. Various sectors including TMT witnessed
a recession, especially in the post September-11 period.
Through the series of events too well known to document
here, the Indian market was also seriously affected. Even
your company was not immune to this pervasive downturn in
the world media & advertising markets.
In the year gone by, your company experienced competitive
and challenging times in the domestic markets. However, being
India’s only fully integrated media company provides us a
unique combination of business opportunities. The company
took many new initiatives to overcome economic slack and
difficult competitive environment and recorded turnover growth
of more than 11% while stringent cost control measures
resulted in net profit growth of more than 11.5% on a
consolidated basis.
As I noted earlier, the domestic advertising market did not
post an encouraging trend in the financial year 2002.
Despite the acknowledged strength of our sales and
marketing team, the advertising revenues registered a drop
of approximately 4.5% as compared to the previous year.
Advertising revenues nevertheless contributed around 57%
to the total revenues.
This contraction was counterbalanced however by a strong
growth in pay revenues. We believe that pay revenues, as one
of the revenue streams of your company, would be the future
area of growth. With an objective to strengthen and broad-
base the revenue stream, your company decided to turn its
flagship channels, Zee TV and Zee News, pay from June 2001.
As a result pay revenues from domestic market increased by
more than 230% in FY2002. Total subscription revenues
increased by a very encouraging 50% during the year.
Filmed entertainment has been a large growth segment in
Indian entertainment industry. In financial year 2002 your
company, in its new initiative of producing and distributing big
budget movies, released ‘Gadar – Ek Prem Katha’, which
proved to be a scintillating success recording highest
collections in the history of Indian cinema.
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The weak international economic climate in 2001 gives added
significance to our approximate 20% growth in international
revenues. During the financial year 2002, more than 16% of
our revenues came from markets other than Asia. Taking a
long-term view of the potential of new international businesses,
we have increased our investments abroad and will continue
putting the right people and infrastructure in place. The new
markets added include Canada, Middle East, Bangladesh,
Pakistan and Hong Kong. We shall continue to grow the Zee
brand around the world and drive further growth through newer
subscribers and markets.
During the year our receivables position worsened due to
the tough business environment surrounding media
companies. Efforts are on to bring down the receivables to
normal levels and to this end we are making progress despite
the trying times.
In order to cross-leverage strength of content on the pay
revenue front, your company entered into a joint venture with
Turner International (India) Ltd, an AOL Time Warner company,
to market and distribute pay offerings from both the networks
together. This alliance makes us the largest pay offering
network in the country reaching over 35 million households
with some of the strongest television brands such as Zee TV,
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Zee Cinema, Zee News, HBO, Cartoon Network and CNN in
a single bouquet.
During the year, we decided to consolidate a few operations
and cut down some investments. Subsequent to a global
reality-check on convergence, the investment plan in HFC
network across several cities was curtailed to 3 cities. Cost
reduction through restructuring and selective staff reductions
has been implemented across the network. Operating and
expansion plans in the Portal and Education businesses were
reduced considerably in view of the slow development of
opportunity there.
This restructuring has been matched by a series of strategic
acquisitions and tie-ups aimed to equip Zee to compete in the
future. Your company recently acquired a 51% stake in ETC
Networks Limited and a 64% stake in Padmalaya Enterprises
Pvt. Ltd., which holds a 49.9% stake in Padmalaya Telefilms
Ltd. ETC is the industry leader in Music and Punjabi television
segments while Padmalaya has acknowledged expertise in
production and distribution of movies, animation and television
content in the South Indian languages. These acquisitions
would strengthen your company’s position in Music, Punjabi
& South Indian channel segments and create a firm foothold
in film production, animation and distribution. We are pleased
with the performance of both these companies and do believe
that we shall derive tremendous value once the integration
process is completed.
Despite the tough environmental conditions, there were a few
macro developments that I would like to mention specifically,
which are path breaking and will change the structure of the
industry. The permission by the Government to uplink channels
locally was one such move. It will result in increasing the
advertising base for the entire industry. We have immediately
taken initiatives to develop new customer segments in the
The Zee-Turner alliance makes us thelargest pay offering network in thecountry reaching over 35 millionhouseholds with some of the strongesttelevision brands such as Zee TV, ZeeCinema, Zee News, HBO, CartoonNetwork and CNN in a singlebouquet.
market that would now be enabled to add television advertising
to their marketing armoury.
Secondly, with the objective to address leakage of pay
revenues from the Indian cable system, I&B ministry has
proposed introduction of Conditional Access System (CAS)
as a priority for the year 2002. This move will enable
consumers to pay for what they actually watch and should
largely address the problem of under-declaration from various
levels of cable distribution system in the country. Your company
will benefit from CAS both as a broadcaster and as a Multi
System Operator (MSO). Zee is fully equipped to make
required investments in technology to effectively install the
prerequisites of the system.
Talent and the quality of people is the key differentiator in our
business and we aim to raise our standards even further in
this area, with new appointments and strategic resourcing.
Inducting best of the talent from within and outside of the
industry remains the company’s focus. This has been a year
of challenges and change for our employees. I thank all
colleagues for their continued dedication and hard work.
During the year we continued to tone up our operations and
this was also reflected in the changes in the Board of Directors.
Mr. Sandeep Goyal was inducted on the Board following his
appointment as CEO of Broadcasting business. This
consolidation saw the appointment of Mr. B.K. Syngal and Mr.
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N.C. Jain to the Board in July 2002. We look forward to
working with them and I am confident that their expertise and
experience will strengthen the existing Board. Mr. Rajeev
Chandrashekhar and Mr. Vipin Malik stepped down from the
Board. We thank both of them for their valuable contributions.
Earlier during the year, we had announced our intention to
induct a strategic partner, but the continuing turmoil witnessed
by global media players in their respective home markets
affected our plans. We continue to watch the situation and
shall keep our strategic options under constant evaluation.
In the current market environment it is important not to lose
sight of issues, which in the long term will deliver real,
sustainable shareholder value. Our strategy is to build highly
valuable businesses with leading positions in entertainment
media across the value chain. We stay committed to
maintaining a diligent focus on the company’s core business
in the present challenging environment.
We never forget we are in business to create value and
opportunity for you, fellow shareholders. I am always
encouraged by your interest in Zee’s progress, the faith you
have reposed in the future of the Company and thank you for
your most valuable support.
Subhash Chandra
The ETC & Padmalaya acquisitionswould strengthen your company’sposition in Music, Punjabi & SouthIndian channel segments and createa firm foothold in film production,animation and distribution.
India’s only fully integratedmedia company
CONTENT AGGREGATION
SERVICES
DISTRIBUTION
CONTENT PRODUCTION
6
Zee enjoys strong presence acrossmost of the entertainment value chain
• Presence across
all genres of
programming :
• Reach of over
225 million
viewers globally
• International
subscriber base
of more than
500,000
• More than 300
Ground Learning
Centres
TV Networks
zeenext.comBroadcasting
EventsEducation serv-
ices
• Siticable – India’s
largest MSO -
reaching 6.5 million
households in
43 cities
• 8,000 km network
of two-way cable
• JV with Turner
for a 16 channel
bouquet
Cable distribution
Direct to Operator(DTO)
• Largest producer
of Hindi language
TV programming
• Gadar -
The biggest
blockbuster movie
of 2002
Television
Film
Music
Education
ContentAggregation Services Distribution
ContentProduction
LE
AD
ER
SH
IP
CH
AN
NE
L
V A L U E P R O P O S I T I O N
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• Leading share
in most TV
channel genres
Hindi generalentertainment
English generalentertainment
6 Regional channels
News
Cinema
Music
ZEE MGMZee MGM has acquired an enviable library from MGM. It is gettingslotted as the best English movie channel for family veiwing.
Alpha ChannelsWith a finger on the pulse of real India, the Alpha Channels dominate fourmarkets currently - Bangla, Marathi, Gujarati and Punjabi.These channels consolidate Zee’s leadership in the regional market.Efforts are on to strengthen Zee’s position in Tamil & Kannada segments.
product offerings
ZEE CinemaIndia’s number one Hindi movie channel, Zee Cinema boasts the largestlibrary of over 3,000 Hindi movies in the Indian Satellite TV industry.
ZEE TVIndia’s pioneering Hindi General Entertainment Channel, Zee TVshowcases superhit offerings in every genre - fiction, celebrity shows,comedy shows, game shows, etc.
ZEE NewsZee News - the Hindi news channel - has won the highestpopularity in the Hindi heartland of India.
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ZEE EnglishCurrently having the best English language programming in India,Zee English is gaining popularity with the urban and youngaudiences.
etc Punjabi and etc Musicetc Punjabi and etc Music got added to the Zee Network bouquetduring the current year. With Zee Music and etc Music, ZTL enjoys alion’s share of the music TV market. Similarly, Alpha Punjabi andetc Punjabi offer a clear dominance to ZTL in the Punjabi market.
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ZEE MusicThis ever young channel is slated for a complete make over by theend of the financial year.
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SiticableDuring the year, ‘the new look and feel’ Siti channelcomprising of city specific programming, news & currentaffairs, general entertainment & films was launched.
highlights ...
Zee has restrengthed the localAlpha channels with greater
coverage of local news and events
India’s first celebrity show, ‘ Jeena Isi Ka Naam Hai’has been received with great excitement and is steadily
climbing up the charts.
‘Simply Shekhar’ has won the hearts of theaudience as the biggest humour show on TV with
the inimitable Shekhar Suman.
BalajiTelefilms’ new
offering‘Kammal’ is
creating itsmagic of a‘good story
well told’.
The latest season of‘Friends’ on Zee
English being airedcurrently, is the hot
favourite with theyouth of today.
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‘Kohi Apna Sa’-Balaji Telefilmsdelivers yet anotherunexpected story, afamily dramaturned thriller, thathas kept audiencesenthralled for over ayear now and isstill going strong!C
‘Kittie Party’ , a series written by ShobhaDe is a big hit with the female audiences.
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The online lottery draw of ‘Sikkim Superlotto’is one of the biggest attractions on Zee TV.
‘Lipstick’ -The inside storyof Bollywood!Exposing the facesbehind the make-up,the gossip behindthe glamour.A sizzling storythat leaves viewersgasping for more!
‘Dial M for Music’ on Zee Music
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‘Ek Akasher Niche’ on Alpha Bangla
SitiCable
Zee News - Sabse Pehle
... highlights
Zee MGM
‘Avantika’ on Alpha Marathi
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Ek Prem Katha
Film Production
Tere LiyeZee has globaltheatrical andelectronic mediumdistribution rightsof Tere Liye. Thisrefreshing musicalfilm was a debut forits director, musicdirector and all theyoung stars.
BawandarZee has Indian
theatricaldistribution rights of
this film which isbased on the real lifevictimisation of an
activist. Winner of 7international
awards.
Film Distribution
... the biggest blockbuster of 2001-02 recordinghighest collections in the history of Indian cinema.
This has been the year of consolidationat Zee. Having acquired controlling stakein ETC Networks Ltd. and a significantstake in Padmalaya Telefilms Limited,Zee is commited to grow in these segments.
Padmalaya
Telefilm
s
Limited
,
ETC
Network
s
Limited
consolidation
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Acquisition of stake in PadmalayaTelefilms
Zee has acquired significant stake in Padmalaya Telefilms Limited- one of India’s leading entertainment software houses with asignificant presence in :
* Television software production
* Production and distribution of Hindi & regional feature films
* Large animation studio
This acquisition of Padmalaya Telefilms enhances the Zeecore competence with its strengths like :
* State- of- the- art 2D and 3D animation studios spread over 20,000 sq. ft. - with some of the best creative talent in animation.
* More than 280 animators working in the Hyderabad based animation studio.
* A strong software library of over 300 movie rights.
* A strong software library with over 1,500 hours of television software.
Zee has acquired controlling stake in ETC Networks Limited - one ofIndia’s leading television broadcasters with two very popular channels :
* etc – India’s number 1 music channel.
* etc Punjabi – India’s number 1 Punjabi language channel.
This acquisition has brought with it many strengths for Zee :
* ETC has exclusive worldwide rights to telecast Gurbani live from the Golden Temple, Amritsar for eleven years.
* Undisputed leadership in the Music and Punjabi segments - Combined market share of 46% in Music and 58% in the Punjabi segment.
* Opportunities to leverage Gurbani rights for driving subscriber base in international markets.
* Co-branded channel etc-Alpha Punjabi has been launched in UK. Plans are on to launch it in other international markets.
Acquisition of controlling stake in ETCNetworks
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our offices
National
Registered Office
Continental Building135, Dr. Annie Besant Road,Worli, Mumbai 400 018.Tel : 91 22 4965609
Corporate Office
Chintamani Plaza,Chakala, Off. Andheri KurlaRoad, Andheri (E),Mumbai 400 099.Tel : 91 22 6971234
Delhi
J-27, South Extn.Part-1, New Delhi 110 049.Tel : 91 11 4610834
Noida
FC 19, Sector 1/6-ANoida 201 301 U.P.Delhi 110 049.Tel : 91 118 543810
Siticable Network
B-10, Essel House,Industrial Area,Lawrence Road,New Delhi 110 035.
Econnect India Limited
No. 39, United Mansions,3rd Floor, M.G. Road,Bangalore 560 001.Tel : 91 22 5580077Fax : 91 22 5580099
Zee InteractiveLearning System
Chintamani Plaza, 4th Floor,Chakala, Off. Andheri KurlaRoad, Andheri (E),Mumbai 400 099.Tel : 91 22 8352363
Zee Turner Pvt. Ltd.
5th Floor, Raddison Plaza,N H-8, New Delhi 110 037.
International
Zee at USA
1615, W Abram St.Ste 200 C-E,Arlington, TX 76013,Tel : (817) 2742933Fax : (817) 274 4845
Zee at UK
7, Belvue Business Centre,Belvue Road, Northolt,Middlesex UB5 5QQ,London, United Kingdom,Tel : (44) 181 839 4000
Zee at Africa
272 Oak Avenue,Ground Floor,Atrium Terraces,Randburg,Tel : (27) 11 781 3352
Zee at Hongkong
Mr. Deepak JainAsia Today Ltd.,1201, Asia Standard Tower,59-65, Queen’s Road,Central Hong-Kong.Tel : 85228689060
Zee at Singapore
Mr. Vijay ParabExpand Fast Holding Ltd.500, Rifle Range Road,01-09 Bukit Timah SatelliteEarth Station,Singapore 588 397.
Zee at UAE
Ware House S 19-5P.O. Box 8009, SAIF Zone,Sharjah, U.A.E.Tel : 971-6-572522
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board of directors
Mr. Subhash ChandraChairman
Mr. Laxmi Narain GoelDirector
Mr. Ashok KurienDirector
Mr. B.K. SyngalDirector
Mr. N.C. JainDirector
Mr. D.P. NaganandWhole Time Director
Mr. Sandeep GoyalWhole Time Director
senior management
Mr. Sandeep GoyalCEO – Broadcasting
Mr. D.P. NaganandCEO – Access
Mr. Amit GoenkaCEO – Education
Mr. Rajiv GargCFO
Mr. Jawahar GoelHead – SitiCable
Mr. Laxmi Narain GoelHead – Zee News
Ms. Apurva PurohitHead – Zee TV
Mr. Prashant SanwalHead – Regional Channels
Mr. Sunil KhannaHead – Distribution
Mr. Hitesh VakilDirector – Finance
Mr. Indru BalchandaniDirector – HR
Mr. Partha SinhaDirector – Marketing
Registered Office135, Continental Building, Dr. A.B. Road,
Worli, Mumbai - 400 018.
Corporate OfficeChintamani Plaza, Andheri-Kurla Road,
Andheri (E), Mumbai - 400 099.
Bankers
ICICI Bank LimitedBNP Paribas
Standard Chartered BankHDFC Bank Limited
Visit us at www.zeetelevision.com
Mr. Vikas GuptaCompany Secretary & Sr. VP (Fin)
M/s. MGB & CompanyAuditors
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Zee TelefilmsLimited
Annual Report2001-02
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Directors’ Report
Your directors take pleasure in presenting the 20th Annual
Report of the Company for the year ended 31st March 2002.
FINANCIAL RESULTS
(Rs. ‘crores’)
Particulars Year ended Year ended
31.03.2002 31.03.2001
Sales & Services 406.5 384.7
Other Income 76.7 51.1
Total Income 483.2 435.8
Total Expenses 348.8 273.5
Profit before Tax 134.4 162.3
Provision for Taxation 37.1 23.8
Profit after Tax for the year 97.3 138.5
Less : Prior Period Adjustments (Net) 3.2 0.3
Less : Provision for Taxation
earlier years 14.2 56.9
Add : Balance brought forward 321.7 295.5
Amount available for appropriations 401.6 376.8
Appropriations :
Dividend 22.7 22.7
Tax on Dividend — 2.3
General Reserve 30.0 30.0
Balance carried forward 348.9 321.8
During the year under review, Total Income of the Company
(on standalone basis) was Rs. 483.2 crores as compared to
Rs. 435.8 crores for the previous year, registering an increase
of 10.90%. During the year EBITDA has increased by 6.40%
to Rs. 199.7 crores.
DIVIDEND
With satisfactory growth in profit during the year, your
Directors are pleased to recommend payment of dividend
@ 55% for the year 2001-2002 resulting in payment of
Rs. 22.7 crores.
BUSINESS OVERVIEW – THE YEAR IN RETROSPECT
Content
The year saw marked shifts in viewing patterns as compared
to last year and once again there is a marked preference for
soaps and family drama. Zee launched many new
programmes on prime time on its flagship channel - Zee TV.
The new programming line-up was well received and the
overall trend remained positive.
The overall programming cost of the network has been
contained through good planning, particularly by shifting from
weekly formats to daily shows. The lowering of acquisition
cost for movie rights has also helped bring down the costs.
Zee News was refurbished with a new look. New virtual sets
were introduced and its coverage is getting increasing
appreciation. The incisive news coverage during the budget,
and breaking news on Gujarat violence drew wide
appreciation.
The investments in Regional channels is an important
strategic building block. Regional language channels will be
a significant growth area of the future targeting a new, yet
complementary market segment that is currently not being
addressed by other major broadcasters.
The Company produced its first big budget movie “Gadar –
Ek Prem Katha”, which became the top grosser of the year
2001. It was one of the few films along with “Lagaan” to
have done well during the year.
The entertainment industry in India is showing good potential,
which will provide exciting opportunities for future growth.
The regional and niche markets are clearly growing at a fast
pace and have the potential to become significant part of
the business in the next 5 years. The Company is well poised
to take a leading share in both the Pay and Advertising
revenue segments.
Domestic Pay Revenues
During the year, Zee formed a JV company “Zee Turner
Private Limited” to market and distribute the pay channel
bouquet consisting of 14 channels of Zee and 3 channels of
Turner in the Indian sub-continent, thereby creating a
formidable combination of highly popular channels. Zee has
74% stake in the JV. The formation of this JV is likely to
result in significant gains in business both for Zee and Turner
in the form of larger subscriber base and higher revenues
per subscriber apart from reduced costs and increased
efficiencies.
The domestic pay revenue market in relation to actual
subscriber numbers constitutes a very small percentage of
revenues for the content providers. Your Network’s initiatives
to the Members of ZEE TELEFILMS LIMITED
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02ZEE TELEFILMS LIMITED
towards creating a bouquet of channels in the domestic
market with Direct to Operator (DTO) distribution have met
with success.
International Business
The Company’s international business continues to grow
bringing “home away from home” for millions of South Asians.
During the year, Zee Network UK has increased its viewership
and has thereby strengthened its position as the lead South
Asian Network in UK and Europe. Post digitization the
business has now become EBITDA positive and is on the
road to contributing higher profits during the year.
The US market has shown a robust growth. It has a subscriber
base of around 130,000 as at March 31, 2002. Zee broadcasts
two channels in the US market, Zee TV and Zee Gold.
The Company recently started a separate beam of Zee TV
for Middle East and Pakistan markets. This gives us a better
opportunity to leverage advertising and pay revenues in these
markets.
Access
During the year, the Company consolidated its operations
by linking its various control rooms through HFC. Master
Control Rooms (MCR) have been established at Hyderabad
and Bangalore linking the control rooms through optic fibre,
thereby ensuring improvement in the quality of signal delivery
to customers.
As part of its business model to broad-base revenues, internet
and other broadband services was identified as a growth
area. Zee Interactive Multimedia Limited (ZIML) a wholly
owned subsidiary was already executing a project to provide
internet services through Broadband to the end consumer.
Considering the synergies of operations, ZIML was
amalgamated with Siticable w.e.f 1st April 2001. The Access
Group also undertook a major cost-cutting initiative without
in any way hampering growth of the business. Last mile
acquisition activity has also been stepped up.
In Delhi, three control rooms have been linked through OFC.
The Company has been able to position its brand for efficient,
reliable and quality service provider for Internet Over Cable
services in Bangalore and Mysore.
The new look and feel Siti Channel was re-launched on 15th
August 2001 at Delhi. This is a centrally capsuled seventeen
hour Delhi specific channel, comprising of city specific
programmes, news and current affairs, general entertainment
and films. The channel has introduced the new Siti brand
along with associated graphics and a more contemporary
channel ID. The new look channel has also been launched
in other strategic markets like Hyderabad, Bangalore,
Ahmedabad and areas of UttarPradesh and Punjab.
The industry has been going through rapid change and the
coming year should see both regulation and technology
determining growth. The Cable Regulation Bill is expected
to be re-presented in both houses of Parliament and should
provide the road map for the future of this industry. The Bill
envisages Conditional Access System (CAS) at the service
level and also the requirement of a common head end to
transmit a combined set of broadcasters signals.
The efforts initiated by Siticable as an MSO to streamline
Pay revenues are showing positive results. The company is
ideally poised as the largest Multi System Operator, to make
the best use of the opportunities that lie ahead.
Education
Despite the persistent negative sentiment in IT, US slowdown,
September 11 terrorist attack, and the overall recessionory
trend in the economy, the Company’s education business
through its subsidiary, Zee Interactive Learning Systems
(ZILS), attained sales turnover of Rs 27.75 crores. During
the year this division has ventured out in software exports,
content development and customization and has entered
into a Content Customization Contract worth US$ 0.3 million
with a UK based company and signed few MOUs with one
of the largest e- learning company overseas. In continuation
of its drive for University allied training business, an MOU is
signed with Allahabad Agriculture University.
In order to address the changing face of IT, the business
operations were restructured with more focus on University
alliances. ‘Zed Point’ model, has been relaunched in a
new format. The non-performing/loss making operations
were discontinued/downsized, restructuring exercise was
carried out during June - August 2002 and the over heads
were brought down substantially by right sizing the
employee strength, rationalizing the office set up all across
the country.
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STRATEGIC INITIATIVES :
Corporate Restructuring :
In a strategic move, to delayer the Company’s structure and
make it transparent, the Board of Directors of your Company
has approved a corporate restructuring exercise pertaining
to 11 subsidiary companies of ZTL. In the past two years,
because of the organic and inorganic growth made by the
Company, the corporate structure had become complex.
Some entities had since become irrelevant moreover,
resulting in tax losses, higher administrative cost and legal
complexities. The restructuring exercise has been undertaken
with a view to make the corporate structure economical,
simple and efficient from the point of view of Taxation,
Accounting and Legal Compliances.
Accordingly, petitions have been filed in Hon’ble Bombay
High Court for amalgamation of Programme Asia Trading
Company Limited, ElZee Television Limited, Dakshin Media
Limited and Kaveri Entertainment Limited. Restructuring of
6 foreign subsidiary companies is also being implemented.
Permission of the Reserve Bank of India has been sought
to restructure these entities. Earlier, during the year, Zee
Interactive Multimedia Limited – a company set up to provide
broadband and conditional access services, has merged with
Siticable Network Limited, its holding company.
Uplinking of Television Channels from India – Your
company, during the year under review, has obtained
permission from Ministry of Information and Broadcasting to
uplink Zee News, Zee Music and 8 regional language
channels and has already commenced uplinking of Zee News,
Alpha Gujarati, Alpha Bangla, Alpha Punjabi and Alpha
Marathi from India. The Uplinking of television channels from
India would help the company in expanding its advertiser
base. Smaller business houses having niche products but
no export earnings will also be able to advertise their products
on the bouquet of Zee channels now. The Company has
already established state of the art facilities for play out of
television channels at Noida, Delhi.
Acquisition of Controlling stake in ETC Networks Limited
– In another strategic move aimed at significant consolidation
of market position in niche segments, your Company has
acquired a controlling stake in ETC Networks Limited - a
Company engaged in production, marketing and distribution
of two television channels with a leading presence in Music
and Punjabi language segment. Your Company acquired
48,78,547 equity shares of Rs. 10 each at a price of Rs.
31.52 per share from the promoters of ETC. The Company
has subscribed to a preferential issue of 22,20,812 equity
shares at Rs. 31.52 per share. As per applicable SEBI
regulations the Company made an open offer to acquire upto
20% of the equity shares against which 1900 shares were
tendered and acquired by the Company. With these
acquisitions the Company holds a 51% stake in ETC Networks
Limited which has become a subsidiary of the Company.
This acquisition would result in your Company becoming
undisputed market leader in the Music and Punjabi segments.
It would gain access to ETC’s library of film rights, generate
additional pay revenues by adding both channels into the
Zee Turner bouquet and also leverage the ETC music
channel through Zee Records, all of which would constitute
significant added advantages to your Company.
Acquisition of controlling stake in Padmalaya Telefilms
Limited (PTL) – With a view to getting a foothold in the
southern markets and to strengthen our position in film
production business, your Company has acquired a
controlling stake in Padmalaya Telefilms Limited - a
Company engaged in production and distribution of feature
films (in Telugu and Hindi languages) and television serials.
PTL also has a large animation software division and Zee-
PTL combine will create India’s largest pool of nearly 400
talented animators with a capacity of making upto 70
minutes of 2-D and 3-D animation per month. PTL is
currently doing a 200 episode animation series on “Jataka
Tales” in association with Film Club of USA (producers of
the renowned animation masterpiece “Jungle Book”) and
has a Letter of Intent (LoI) from Puttaparthi Sai Baba
Institute for creation of approximately 600 minutes of
animation targeted at their worldwide following. PTL has
also been doing job contracts for overseas clients.
The Company and original promoters of PTL have constituted
a special purpose vehicle company, Padmalaya Enterprises
Private Limited (PEPL), to effectively manage and control
PTL. PEPL acquired 62 lac equity shares of PTL, constituting
49.60% of its paid up capital. Your Company has a 63.3%
equity stake in PEPL.
23
An
nu
al
Re
po
rt
2
00
1-
20
02ZEE TELEFILMS LIMITED
Joint Venture with Turner – During the period under review
the Company has signed a joint venture agreement with
Turner India Private Limited, a subsidiary of AOL Time Warner
Inc, USA. A company in the name and style of Zee Turner
Limited has been formed. Your Company is holding 74%
equity and Turner India holds the balance. The main objective
of Zee Turner is to distribute television channels broadcast
by your Company, and third party channels. It has
commenced commercial operations w.e.f. 1st February, 2002
and would enable your Company to expand the reach of its
bouquet of channels. Zee and Turner would exploit cross-
promotional opportunities across their respective channels
and effectively address distribution outside the territory of
Zee’s international services.
INTERNAL CONTROL SYSTEMS
Your Company maintains adequate internal control systems,
which provide, among other things, reasonable assurance of
recording its operations in all material respects and guard
against any misuse or loss of company assets. The Company
has an internal audit team with professionally qualified financial
personnel, which conduct periodic audits of all businesses to
maintain a proper system of checks and control.
AUDITORS
M/s. MGB & Co., Chartered Accountants are to retire at the
conclusion of the forthcoming Annual General Meeting and,
being eligible, offer themselves for re-appointment as auditors
of the company. Comments in the Auditors’ Report have
been explained vide Note Nos. 6 and 8 of Schedule 17 of
Notes to Accounts forming part of the Annual Accounts.
DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to provisions of Section 217 (2AA) of the Companies
Act, 1956 the Directors confirm that ;
(i) in preparation of the annual accounts, the applicable
accounting standards have been followed alongwith
proper explanation relating to material departures;
(ii) appropriate accounting policies have been selected and
have been applied consistently while judgments and
estimates have been made that are reasonable and
prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial
year 2001-2002 and of the profit or loss of the Company
for that period;
(iii) proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Act for
safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going
concern basis.
DIRECTORS :
In accordance with the provisions of the Companies Act,
1956, and the Articles of Association of the Company,
Mr. Laxmi Narain Goel and Mr. Ashok Kurien are to retire by
rotation at the ensuing Annual General Meeting. Mr. Laxmi
Narain Goel and Mr. Ashok Kurien being eligible, offers
themselves for re-appointment.
Your Board has co-opted, Mr. Nemi Chand Jain and
Mr. Brijendra Kumar Syngal as additional Directors on the Board
of the Company w.e.f. 18th July, 2002. In terms of the listing
agreement they are Independent Non Executive Directors.
Mr.Vasant Parekh, Director of your Company, has resigned
on 31st July, 2001 due to personal reasons. The Board has
placed on record its deep appreciation of the valuable
contribution made by Mr. Parekh during his tenure as Director
of the Company.
Mr. Rajeev Chandrasekhar and Mr. Vipin Malik, Non
Executive Directors on the Board of the Company, have
tendered their resignation from the Board due to pre –
occupation with effect from 18th July, 2002 and 18th March
2002, respectively. The Board has placed on record its deep
appreciation for the valuable contributions made by
Mr. Rajeev Chandrasekhar and Mr. Vipin Malik during their
tenure as directors of the Company.
Mr. R.K. Singh, Whole Time Director of the Company, has
resigned from the Board of your Company w.e.f. 15th April,
2002 due to personal reasons. The Board placed on record
its deep appreciation for the valuable contribution made by
Mr. R.K. Singh during his tenure as Whole Time Director of
24
the Company. Mr. Vijay Jindal ceased to be Director of your
Company w.e.f. 18th July, 2002.
Brief resume of the Directors to be appointed or re-appointed
is given in the explanatory statement attached to the notice
convening 20th Annual General Meeting of the Company.
REPORT ON CORPORATE GOVERNANCE
The Company is in full compliance of mandatory
recommendations contained in Code of Corporate
Governance, as per the listing agreement. A report on
compliance with the Code is annexed herewith alongwith
auditors’ report thereon. The Company intends to implement
the non-mandatory recommendations also, as prescribed in
the Code in due course.
PUBLIC DEPOSITS
The Company has not accepted any fresh fixed deposits or
renewed any fixed deposits from the public. The Company
has honoured all of its commitments to depositors during
the period under review.
SUBSIDIARY COMPANIES
Statement pursuant to Section 212 of the Companies Act,
1956, is annexed herewith.
Your Company has made an application to the Department
of Company Affairs (DCA), Ministry of Finance and
Company Affairs with a request to exempt the Company
from attaching the Balance Sheet, Profit and Loss Account,
Reports of Directors’ and Auditors’ thereon of subsidiary
companies to your Company, on the ground that the
consolidated accounts attached with the Annual Report of
the Company is giving true and fair view of the financial
state of affair of subsidiary companies. While the approval
from the DCA is awaited, as an abundant caution the
Balance Sheet, Profit and Loss Account and Reports of
Directors’ and Auditors’ thereon are attached in a separate
booklet, forming part of this report.
PARTICULARS REGARDING CONSERVATION OF
ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS & OUTGO
The particulars regarding foreign exchange earning and outgo
are given in Schedule 17B point 12(e) to the Notes to the
Accounts forming part of the Annual Accounts.
The Company is not engaged in manufacturing activity; as
such particulars relating to conservation of energy and
technology absorption are not applicable. However in the
editing facilities, studios, offices etc. adequate measures are
being taken to conserve energy as far as possible.
HUMAN RESOURCE
Your Directors would like to place on record their deep
appreciation of all employees for rendering quality services
to every constituent of the Company be it viewers,
shareholders, creditors, producers, or regulatory agencies.
The unstinting efforts of the employees have enabled ZEE
to remain in forefront of media and entertainment business,
making its offerings best in the genre, cherished by South
Asian community spread across the globe.
As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of
Employees) Rules 1975, as amended, the names and other
particulars of the employees are set out in the Annexure
included in this report.
ACKNOWLEDGEMENTS
Your Directors take this opportunity to express their gratitude
to the producers, vendors, investors, banks and financial
institutions for their continued support. Thanks are also due
to the Ministry of Information & Broadcasting, Department of
Telecommunication and Videsh Sanchar Nigam Limited for
their continued support and guidance.
For and on behalf of the Board
Place: Mumbai SUBHASH CHANDRA
Date: 24th September, 2002 Chairman
25
An
nu
al
Re
po
rt
2
00
1-
20
02ZEE TELEFILMS LIMITED
ADDITIONAL INFORMATION GIVEN AS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS INTHE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988.
I. INFORMATION AS PER SECTION 217(2A)(B)(II) READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) RULES,1975 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31st MARCH, 2002.
Sr. Name Age Designation Remuneration Qualification Experience Date of Last EmploymentNo. (Rs.) (Years) commence-
ment ofEmployment
1 Mr. Amitabh Kumar 48 Director – Corporate 2,279,440 + B.E. 26 29.06.2001 VSNL
2 Mr. Anthony D’Silva 52 President – International 543,381 + B.Sc., PGDBM 28 20.12.1999 Modi EntertainmentBusiness
3 Mr. B.R. Jaju 51 President – IPR 1,139,201 + B.Com., FCA., 26 30.06.1999 Blow Plast Ltd.FCS., LLB.
4 Mr. D.P. Naganand 53 CEO – Access 690,810 + B.Tech (Hons), 31 01.03.2002 Econnect India Ltd.MBA, AMPISMP
5 Mr. Gajendra Singh 35 Programme Director 3,229,176 Degree in Editing, 12 23.07.1992 Freelance EditorFTII
6 Mr. Hitesh Vakil 41 Director – Finance 2,460,300 B.Com., ACA 19 01.04.1996 Tips & Toes Cosmetics (I) Ltd.
7. Ms. Madhvi Mutatkar 47 President – Zee TV 2,680,210 B.A., Diploma in 23 01.07.1999 DoordarshanMass Communi-cations
8. Mr. Partha Sinha 38 Director – Marketing 3,083,855 B.Tech., PGDM 14 21.12.2000 India Info. Com
9. Mr. R.K. Singh 51 C.E.O. 16,383,969 M.Sc., MBA 31 11.10.1999 ESPN Software India Ltd.
10. Mr. Rajesh Jain 39 President – Corporate 4,577,145 B.Com., C.A. 15 15.05.2000 KEC International Ltd.Finance & Strategy
11. Mr. Sainath Iyer 47 President – Market Research 1,798,040 + B.Sc. 24 01.09.1995 Lintas (I) Ltd.
12. Mr. Sandeep Goyal 39 Group Broadcasting CEO 13,745,725 + B.A. (Hons), MBA 18 16.05.2001 Rediffusion - DY&R Ltd.
13. Mr. Satish Menon 45 President – Zee News & Sports 2,485,495 + B.A. 21 08.07.1999 Mid-Day Publications Ltd.
14. Mr. Sikander Bhasin 46 President – Broadcast 2,841,048 B.Com. (Hons), 26 01.06.1996 Doordarshanoperations, Production & IT Diploma in Broad-
casting and Journalism
15. Ms. Uma Ganesh 43 CEO – ZILS 2,174,575 + B.A., MBA 22 17.09.1994 Aptech Ltd.
Notes : 1. Appointment is contractual and terminable by notice on either side.
2. None of the employees is related to any of the Directors.
3. Remuneration includes Salary, Allowances, Company’s Contribution to Provident Fund, Superannuation, MedicalBenefits, Leave Travel Allowance, Accommodation & Other Perquisites and benefits valued on the basis ofprovisions of Income Tax Act,1961 excluding ESOP perquisites.
+ Indicates remuneration is for part of the year.
26
Nam
e of
the
Sub
sidi
ary
The
Fina
ncial
Hol
ding
Exte
nt o
fFa
ceN
umbe
r of
Equ
ityN
et a
ggre
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am
ount
of
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Net
agg
rega
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f pr
ofits
/C
ompa
nyYe
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f th
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ares
hel
d by
the
(loss
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of t
he s
ubsi
diar
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far
as
(loss
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of t
he s
ubsi
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far
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Subs
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Equi
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ldin
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conc
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the
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of
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it co
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not
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on(P
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hare
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acc
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hol
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com
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with
in a
ccou
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of h
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ompa
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For
the
finan
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For
the
prev
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For
the
finan
cial
For
the
prev
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year
end
ed o
nfin
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ears
year
end
ed o
nfin
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Mar
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002
of t
he s
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sub
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sinc
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beca
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sinc
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beca
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a su
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a su
bsid
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(Am
t. in
’000
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in ’0
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(Am
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(4)
(5)
(6)
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(10)
rela
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o S
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Sta
tem
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to S
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f th
e C
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s A
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195
6
1.Si
ti Ca
ble
Netw
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Lim
ited
(SIT
I)31
/03/
2002
ZTL
100%
Rs. 1
0/-
100,
091,
108
—Rs
. (26
,646
)Rs
. 33,
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2.Si
ti Ca
ble
Broa
dban
dSo
uth
Priva
te L
imite
d31
/03/
2002
SITI
100%
Rs. 1
0/-
10,0
00—
Rs. (
122)
—
3.Pr
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e As
ia T
radi
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mpa
ny L
imite
d (P
ATCO
)31
/03/
2002
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—Rs
. (20
6)Rs
. (26
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4.El
Zee
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on L
imite
d31
/03/
2002
PATC
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—Rs
. (1,
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5.Ze
e Tu
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6.Ze
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7.Da
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. (51
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8.Ka
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/03/
2002
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Rs. 1
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50,0
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—
9.Ec
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. (61
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)Rs
. (10
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10.
Zee
Mul
timed
ia W
orld
wide
Lim
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BVI
(ZM
WL,
BVI
)31
/03/
2002
ZTL
100%
US $
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—US
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11.
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02BV
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13.
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—
27
An
nu
al
Re
po
rt
2
00
1-
20
02ZEE TELEFILMS LIMITED
Nam
e of
the
Sub
sidi
ary
The
Fina
ncial
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ding
Exte
nt o
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Zee
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(Inte
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mite
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2002
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VI10
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D 4,
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AED
17,1
16—
16.
Asia
T.V
. Lim
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31/0
3/20
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100%
GBP
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GBP
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—M
aurit
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17.
Zee
T.V.
USA
, Inc
.31
/03/
2002
ZMW
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0%US
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12
US$
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1,17
6—
Mau
ritiu
s
18.
Asia
T.V
. (US
A) L
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d31
/03/
2002
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2US
$ (8
)US
$ (1
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Mau
ritiu
s
19.
Asia
T.V
. (Af
rica)
Lim
ited
31/0
3/20
02ZM
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US $
110
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GBP
24
GBP
307
—M
aurit
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20.
Zee
TV S
outh
Afri
ca31
/03/
2002
Asia
TV
100%
Rand
11
RAND
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BP 8
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Supp
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31/0
3/20
02ZM
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US $
12
GBP
81
GBP
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—In
tern
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23.
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Note
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Hen
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clude
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Corporate Governance
This Report on Corporate Governance forms part of the Directors’ Report. This section, besides being in compliance with
the mandatory requirements of the listing agreement, gives an insight into the processes of the Company.
1. Company’s Philosophy on Code of Governance
• To adopt internal and external measures to increase the level of transparency and accountability
• To demonstrate to stakeholders that the Company is following proper governance practices.
• To respect the laws of the land and rights of all stakeholders and in turn to earn respect from all stakeholders.
• To lead the Company towards high growth path in terms of profits and revenues.
2. Board of Director
a) Composition & Category of Directors
Name of Directors Category Attendance No. of No. of
at the Directorship memberships
Board of other of Board sub-
Meetings Companies Committees
Mr. Subhash Chandra Promoter – 8 11 Nil
Non Executive
Mr. Laxmi Narain Goel -Do- 5 © 10 Nil
Mr. Ashok Kurien -Do- 10 3 2
Mr. Vasant Parekh@ Non Executive 1 0 0
Mr. Rajeev Chandrasekhar* Non Executive – 4 © 8 1
Independent
Mr. Vipin Malik$ -Do- 8 © 11 14
Mr. Vijay Jindal** -Do- Nil 1 Nil
Mr. Nemi Chand Jain^ -Do- Nil Nil 1
Mr. B.K.Syngal^ -Do- Nil 10 1
Mr. R.K. Singh # Whole Time – 6 4 1
Independent
Mr. D. P. Naganand Whole Time 9 © 3 Nil
Mr. Sandeep Goyal Whole Time – 8 2 2
Independent
@ Resigned w.e.f. 31st July, 2001 * Resigned w.e.f. 18th July, 2002
$ Resigned w.e.f. 18th March, 2002 # Resigned w.e.f. 15th April, 2002
^ Appointed w.e.f. 18th July, 2002 ** Ceased to be Director w.e.f. 18th July, 2002
© M/S Rajeev Chandrasekhar, Vipin Malik, Laxmi Narain Goel, D.P. Naganand and Sandeep Goyal attended 3,
1, 4, 2 and 1 meetings, respectively, through teleconference.
Brief profile of the Directors to be appointed or re-appointed at the Annual General Meeting is given in the
explanatory statement attached to the Notice convening the 20th Annual General Meeting of the Company.
b) Board Meetings
During the year under review, 11 meetings of the Board were held on 03-04-2001, 30-04-2001, 31-05-2001,
31-07-2001, 22-10-2001, 13-12-2001, 16-01-2002, 01-02-2002, 19-02-2002, 22-02-2002 and 12-03-2002.
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Normally Directors are required to attend Board/Committee Meetings in person. However, in certain cases, where
directors are not in a position to attend the meetings in person, they are allowed to participate through teleconferencing.
However, due care is taken that minimum quorum is present in person at the meeting.
The Board has considered Mr. Sandeep Goyal, Whole Time Director- Content and Broadcasting as Independent
Director.
The Company Secretary in consultation with Whole time Directors drafts the agenda of the Board Meetings. Agenda
papers alongwith relevant details are circulated to all Directors, well in advance of the date of the Board Meeting.
Board members have complete and unfettered access to any information within the Company. Heads of Departments
are normally invited at the Board Meetings to provide necessary insights into the working of the Company and for
discussing corporate strategies.
3. Board Committees:
a) Audit Committee
The Board has constituted Audit Committee with majority of Directors being non-executive Directors. The Chairman
of the Committee is an Independent Director. The audit committee has reviewed the annual financial results, half
yearly results, internal audit reports and internal working systems of the Company. During the year under review,
Audit Committee met for 5 times viz.
Sr. No. Date of the Meeting Attendance
No. of Independent No. of Non-
Directors Independent Directors
1. 30-05-2001 2 1
2. 18-09-2001 2 0
3. 13-12-2001 2 1
4. 28-12-2001 2 1
5. 28-02-2002 2 1
Composition of Audit Committee and Category of its Members during the year under review.
Name of Directors Category Appointment on Resigned from
Audit Committee Audit Committee
Mr. Ashok Kurien Promoter – Non Executive 29th March, 2001 _
Mr. Vasant Parekh Non Executive 29th March, 2001 30th April, 2001
Mr. Rajeev Chandrasekhar Non Executive - Independent 30th April, 2001 18th July, 2002
Mr. Vipin Malik -Do- 30th April, 2001 18th March, 2002
Mr. Nemi Chand Jain -Do- 18th July, 2002 _
Mr. B.K.Syngal -Do- 18th July, 2002 _
Mr. R.K. Singh Whole Time – Independent 29th March, 2001 22nd October, 2001
Mr. Sandeep Goyal -Do- 31st May, 2002
Statutory Auditors, Internal Auditors and Chief Financial Officer of the Company have attended all meetings of the
Committee. The Company Secretary was the Secretary of the Audit Committee.
b) Share Transfer and Investor Grievance Committee
Main function of the Share Transfer and Investor Grievance Committee is to supervise and ensure efficient transfer
of shares and proper and timely attendance of investors’ complaints.
30
The Committee comprises of Mr. Ashok Kurien, Non Executive Director and Mr. Sandeep Goyal, Whole Time
Director. The Company Secretary is a permanent invitee to the Committee.
Committee meets, generally, every week to review working issues and approve the transfers/ duplicate share issue,
if any. During the year under review committee met 30 times. Share transfers are being processed and approved
in 7 days time from the date of receipt of complete and valid request.
Details of number of requests/complaints received and resolved are as under :
Nature of Correspondence Received Replied/ Pending
Resolved
No. of Requests for Change of Address & Bank Mandate 434 434 —
Letters received from SEBI/ NSDL/ Stock Exchanges 22 22 —
Requests for Stop Transfer 18 18 —
Non Receipt of Share Certificate/Credit for Demat of Shares/ Dividend 492 492 —
Request for issue of Duplicate Share Certificate and Dividend Warrants 674 674 —
Legal Cases/ Cases before Consumer Forum 5 5 —
Investors Request for Information 18 18 —
Miscellaneous Letters 168 168 —
TOTAL 1831 1831 —
* Legal cases are pertaining to title of shares in which the Company has been made a party. These cases are
not material in nature. The resolution of such cases is dependent upon final court judgement.
4. Remuneration Policy and Details of Remuneration Paid
The remuneration of the Directors is decided by the Board of Directors as per the remuneration policy of the Company
within the ceiling approved by shareholders.
Details of the remuneration paid to Whole Time Directors during the year ended 31st March 2002 is:
Remuneration (Rs.)
Name Position Salary & Perquisites Employer
Allowances Contribution
to Provident
Fund
Mr. R.K. Singh Whole Time Director 16,712,209 471,603 836,640
Mr. D.P. Naganand * Whole Time Director 6,953,867 720,120 738,000
Mr. Sandeep Goyal Whole Time Director 16,304,435 621,785 378,581
No remuneration was paid to the non-executive Directors.
* Mr. D.P. Naganand was being paid salary, allowances and perquisites from Siticable Network Limited and Zee
Interactive Multimedia Limited, wholly owned subsidiaries of the Company. With effect from 1st March, 2002, the
salary and perquisites are being paid to him from the Company.
5. General Body Meetings
The 20th Annual General Meeting of the Company, for the year 2002, would be held on Friday the 25th day of October,
2002 at 4 P.M. at Patkar Hall, SNDT Women’s University, Nathibai Damodar Thackersey Marg, New Marine Lines,
Mumbai – 400 020.
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The Company has also convened 4 Extra Ordinary General Meetings on 25th October, 2002 at 2 PM, 2.30 PM, 3 PMand 3.30 PM at the venue mentioned above, pursuant to the orders of Hon’ble Bombay High Court, to seek approvalof members of the Company to amalgamate Programme Asia Trading Company Limited, Kaveri Entertainment Limited,Dakshin Media Limited and Elzee Television Limited.
Details of last three Annual General Meetings and other General Meetings held during last 2 years are as follows:
Meeting Day, Date and Time of the Meeting Venue
EGM Thursday, 30th May 2002, 4.00 p.m. Nehru Centre, Worli, Mumbai-1819th AGM Friday, 29th September 2001, 12.00 noon Nehru Centre, Worli, Mumbai-1818th AGM Tuesday, 26th September 2000, 4.00 p.m. Nehru Centre, Worli, Mumbai-18EGM Thursday, 11th May 2000, 4.00 p.m. Nehru Centre, Worli, Mumbai-18EGM Monday, 10th April 2000, 4.00 p.m. Nehru Centre, Worli, Mumbai-18EGM Monday, 25th October 1999, 4 p.m. Nehru Centre, Worli, Mumbai-18AGM Monday, 27th September 1999, 4 p.m. Nehru Centre, Worli, Mumbai-18
During these meetings all resolutions including special resolutions were passed unanimously.
6. Disclosures
There were no material transactions between the Company and its Directors or management or their relatives that haveany potential conflict with interests of the Company at large.
There were no cases of non-compliance with SEBI or Stock Exchange regulations, nor any cases of penalties, stricturesimposed by SEBI or Exchanges during the last three years.
The Department of Company Affairs has conducted inspection of books of account of the Company under Section 209Aof the Companies Act, 1956. The inspection has since been completed and certain discrepancies in compliance ofprovision of Sections 209, 211, 212, 217 and 307 of the Companies Act, 1956 have been reported by the Department.The Company has filed compounding applications, under Section 621A of the Companies Act, 1956, seeking compoundingof non compliance of these provisions. The Department has filed prosecutions with regard to the same issues againstthe Company and Directors in the Court of Metropolitan Magistrate, Mumbai. All these non-compliances are compoundableunder the provisions of Section 621A of the Companies Act, 1956. There are no material financial implications of thesenon compliance issues. The Company has taken necessary steps to ensure that such instances of non-compliance donot occur again.
The Annual General Meeting of the Company has been convened on 25th October, 2002. The Company has soughtpermission from Central Government to hold its 20th Annual General Meeting on or before 27th December, 2002. Thepermission has been granted vide letter No.28767/TA/III dated 6th September, 2002. The extension of time for holdingAGM was necessitated because of the pending petition before the Hon’ble Bombay High Court, for amalgamation ofKaveri Entertainment Limited, Programme Asia Trading Company Limited, El Zee Television Limited and Dakshin MediaLimited, wholly owned subsidiaries of the Company, with the Company.
7. Means of Communication
The Company has always promptly reported all material information including declaration of quarterly financial results,press releases, etc. to all Stock Exchanges where the securities of the Company are listed. Such information is alsodisplayed immediately on the Company’s web site, www.zeetelevision.com. The financial results, quarterly, half yearlyand annual results and other statutory information were communicated to the shareholders by way of advertisement ina national daily and in a vernacular language newspaper as per requirements of the Stock Exchange.
8. General Shareholder Information
The required information is provided in Shareholders’ Diary Section.
32
To,
The Members of
Zee Telefilms Limited
We have examined the compliance of conditions of Corporate Governance by Zee Telefilms Limited, for the year ended on
31.03.2002, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited
to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we report as under:
The Composition of the Audit Committee during the period 1st April, 2001 to 30th April, 2001 and from 18th March, 2002
to 31st March, 2002, was not as per the terms of listing agreement and the Remuneration Committee was constituted only
on 12th March, 2002 which has not held any meeting during the year. In view of the above, we report that Corporate
Governance needs to be strengthened.
Subject to the above, we certify that the Company has complied with the conditions of Corporate Governance as stipulated
in the abovementioned Listing Agreement.
We state that generally no investor grievance are pending for a period exceeding one month against the Company as per
the records maintained by the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Certificate of Compliancefrom Auditor as stipulated under clause 49 of the Listing Agreement of the Stock Exchanges of India
Mumbai
24th September, 2002
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1. Date, Time and Venue of Extra Ordinary General Meetings (4)
Shareholders’ Meetings Day & Date: Friday, the 25th day of October, 2002.
Time : 2, 2.30, 3, 3.30 p.m.
Venue : Patkar Hall, SNDT Women’s University, Nathibai Damodar
Thackersey Road, New Marine Lines, Mumbai-400 020
Annual General Meeting
Day & Date : Friday, the 25th day of October, 2002.
Time : 4 p.m.
Venue : Patkar Hall, SNDT Women’s University, Nathibai Damodar
Thackersey Road, New Marine Lines, Mumbai-400 020
2. Date of Book Closure 24th October, 2002 to 25th October, 2002 (Both days inclusive)
3. Listing on Stock Exchanges The Stock Exchange, Mumbai (BSE)
The National Stock Exchange of India Limited (NSE)
The Delhi Stock Exchange Association Limited (DSE)
The Calcutta Stock Exchange Association Limited (CSE)
The Ahmedabad Stock Exchange – Ahmedabad (ASE)
4. Listing Fees Paid for all the above stock exchanges as per the listing agreement.
5. ISIN No. INE256A01028
6. BSE Stock Code 505537
NSE Stock Code ZEETELE EQ
7. Reuters Code : ZEE.BO (Bombay Stock Exchange)
ZEE.NS (National Stock Exchange)
Bloomberg Code : Z IN (Bombay Stock Exchange)
NZ IN (National Stock Exchange)
8. Registered Office 135, Continental Building, Dr. Annie Besant Road,
Worli, Mumbai-400 018, India
Tel : +91-22-4965609/11, Fax : +91-22-4964334
Website : www.zeetelevision.com
9. Share Transfer Office Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel: +91-22-6971234
Fax: +91-22-6936531
E.Mail: [email protected]
Shareholders’ Information
34
10. Share Transfer Agent Sharepro Services,
(For electronic transfers) Satam Estate, 3rd Floor,
Above Bank of Baroda Building,
Cardinal Gracious Road,
Chakala, Andheri (E),
MUMBAI - 400 099
Tel. : +91-22-8215168, 8329828
Fax No. +91-22-8375646
11. Compliance Officer Mr. Vikas Gupta,
Company Secretary & Sr. V.P. (Fin),
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel : +91-22-6971234, Fax : +91-22-6936531
12. Financial Queries Mr. Atul Das,
Sr. Vice President – Corporate Finance & Strategy,
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel : +91-22-6971234, Fax : +91-22-6936531
E.Mail: [email protected]
13. Investor Relation Officer Mr. Riddhish Purohit,
Dy. Company Secretary
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel : +91-22-6971234, Fax : +91-22-6936531
E.Mail : [email protected]
14. Dividend
The Board of Directors has recommended payment of dividend @ 55% on the paid up capital of the Company.
Dividend, if approved by members at Annual General Meeting, will be paid to all those shareholders whose name would
appear in the register of members as on 25th October, 2002 and in the list of beneficial owners registered with NSDL
and CDSL, as on 24th October, 2002, subject to deduction of tax at source at the applicable rates.
In view of the circular of the Securities & Exchange Board of India dated October 15, 2001, the dividend, shall be paid
through ECS wherever the ECS facility is available. Shareholders are therefore requested to provide proper bank
account numbers and bank address details to your Depositories where Demat Account has been opened or where
shares are held in physical form, provide your bank account details to the Company. In the absence of availability of
ECS facility the Company will send the dividend thru warrants.
15. Change of Address
Members holding equity share in physical form are requested to notify the change of address/dividend mandate, if any,
to the Company’s Share Department, at the address mentioned above.
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Members holding equity share in dematerialised form are requested to notify the change of address/dividend mandate,
if any, to their respective DP.
16. Share Transfer System
Shares sent for physical transfer or dematerialisation requests are generally registered and returned within a period of
15 days from the date of receipt of completed and validly executed documents.
The share transfer committee generally meets every week, preferably on every Monday, to approve the transfers and
dematerialisation requests. During the year ending 31st March 2002 the Share Transfer Committee met for 30 times.
17. Simultaneous Dematerialisation of Shares Sent for Transfer
The Company provides facility of simultaneous transfer and dematerialisation of equity shares as per the procedure
prescribed by NSDL and CDSL.
The Company, upon receipt of request of share certificates either for transfer or for splitting, processes the same. If the
documents are found in order, the Company instead of sending the certificates sends intimation to the shareholder,
confirming the transfer or split of shares. The confirmation letter has to be presented by the investor to his/her DP within
15 days from the date of confirmation letter.
Thereafter, the shares are credited to the investors account in the usual demat process. In case the letter is not
presented within 15 days the Company proceeds to issue the share certificates and the confirmation letter becomes
invalid.
18. Dematerialisation of Equity Shares
Trading in equity shares of the Company became mandatory in dematerialised form w.e.f. 5th April, 1999. To facilitate
trading in demat form, in India, there are two depositories i.e. National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL). The Company has entered into agreement with both these depositories.
Shareholders can open account with any of the Depository Participant registered with any of these depositories.
As of date (approx.) 90% of the equity shares of the Company are in the dematerialised form.
19. Splitting of Shares
Shareholders vide their resolution dated 25th October, 1999 had approved splitting of face value of equity shares of the
Company from Rs. 10 each to Re. 1 each. The resolution became effective from the start of no-delivery period i.e. w.e.f.
6th December, 1999. From this day onward trading in equity shares of Re. 1 each commenced and the equity shares
of Rs. 10 each ceased to trade on the exchanges.
For the shareholders, holding shares in physical form, the Company had sent them intimation to exchange the old
certificates of face value of Rs. 10 each with new certificate of face value of Re. 1 each. For the shareholders holding
shares in demat form, the depositories automatically gave the effect of splitting of face value of shares by way of a
corporate action dated 23rd December, 1999.
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Shareholders who could not earlier, exchange their old certificates of face value of Rs. 10 each with the new certificates
and who are desirous of exchanging the same, shall follow the following procedure:
1. Write a letter to the Company mentioning:
• Your intention to split the share certificates;
• Whether the new share certificates are required in jumbo lot or in market lot.
2. Attach old certificates with the letter.
3. Send the same (preferably through registered post) to the Share Transfer Department of the Company at the
address given above.
20. Shareholders’ Correspondence
The Company has attended to all the investors’ grievances/ queries/ information requests except for the cases where
we are constrained because of some pending legal proceeding or court/statutory orders.
We endeavour to reply all letters received from the shareholders within a period of 5 working days.
All correspondence may please be addressed to the Share Transfer Department at the address given above. In case
any shareholder is not satisfied with the response or do not get any response within reasonable period, they shall
approach the Investor Relation Officer or the Compliance Officer at the address given above.
21. Stock Market Data Relating to Shares Listed in India
a. The company’s share is part of the ‘A’ group of securities at BSE and is part of the 30 share Sensitive Index
(Sensex). On NSE it is part of CNX Nifty Index.
b. Monthly high and low quotations as well as the volume of shares traded at Mumbai and National Stock Exchanges
for 2001-2002 are:
BSE NSE
Month High Low Volume of High Low Volume of
(Rs.) (Rs.) Share (Rs.) (Rs.) Shares Traded
Traded
April 2001 100.55 77.50 73,261,662 144.50 71.05 92,057,755
May 2001 136.25 94.80 108,513,515 149.75 88.00 147,508,886
June 2001 126.90 97.95 79,899,000 136.90 98.55 111,611,000
July 2001 124.90 68.00 72,925,956 130.00 68.25 86,633,705
August 2001 122.25 80.10 130,619,419 122.50 80.10 216,488,000
September 2001 121.65 78.00 100,445,629 139.85 77.90 151,938,000
October 2001 98.90 70.75 84,705,988 99.00 69.65 120,881,000
November 2001 144.90 95.20 96,693,283 144.90 95.50 145,804,000
December 2001 156.00 95.25 134,610,838 154.90 95.15 209,316,306
January 2002 138.40 104.30 117,124,535 138.40 104.50 171,133,332
February 2002 165.50 123.00 91,532,127 164.90 123.05 160,353,369
March 2002 182.35 138.40 102,725,722 182.50 138.10 217,736,235
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22. Distribution of shareholding as on March 31, 2002 :
No. of Equity Shares Share Holders No. of Shares
Number % of Holders Number % of Shares
Upto – 5000 188894 99.56 24525452 5.95
5001 – 10000 376 0.20 2785689 0.68
10001 – 20000 166 0.09 2354304 0.57
20001 – 30000 66 0.03 1628648 0.39
30001 – 40000 26 0.01 930290 0.23
40001 – 50000 27 0.01 1271227 0.31
50001 – 100000 44 0.02 3331777 0.81
100001 and Above 127 0.07 375677625 91.07
Total 189726 100.00 412505012 100.00
23. Categories of shareholders as on March 31, 2002 :
Category March 31, 2002 March 31, 2001
% of shareholding No. of shares held % of shareholding No. of Shares held
Promoters 52.78 217,738,175 59.61 245,904,000
Individuals 6.51 26,853,092 8.86 36,552,409*
Domestic companies 6.14 25,327,413 6.19 25,518,367
FIs, Mutual Funds and Banks 7.11 29,346,462 6.77 27,921,068
FIIs, OCBs & NRI 27.46 113,239,870 18.57 76,609,168
Total 100 412,505,012 100 412,505,012
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Management Discussion and Analysis
Investors are cautioned that this discussion contains forward
looking statements that involve risks and uncertainties
including, but not limited to, risks inherent in the Company’s
growth strategy, acquisition plans, dependence on certain
businesses, dependence on availability of qualified and
trained manpower and other factors. The following
discussion and analysis should be read in conjunction with
the Company’s financial statements included herein and
the notes thereto.
OVERVIEW
Zee Telefilms Limited is India’s first and largest vertically
integrated media & entertainment company with its operations
spread across more than 10 countries worldwide including,
India, the US, UK, Europe, Africa, Caribbean, Canada,
Australia, Middle East and a few South Asian countries.
The Company was formed in 1982. It had its IPO in 1993
and is currently listed at the Ahmedabad, Kolkata, Delhi,
Mumbai and National Stock Exchanges in India. From fiscal
1995 through fiscal 2002, total revenues increased from
Rs. 75.3 crores to Rs. 1,155.5 crores. This includes both
organic and inorganic growth. Zee employs around 1,800
people.
The operations of Zee can be classified into three main
areas of businesses :
• Content and Broadcasting, which includes production
and aggregation of TV software, film production,
acquisition and distribution, music publishing and
syndication.
• Access, which consists of MSO operations, distribution
of satellite channels and Internet over cable.
• Education business, which consists of distance learning
programs and ground learning centers.
Content
Content business comprises of various entertainment and
information software related activities including ideation,
development, creation of television programs; production and
distribution of films and music publishing. The company also
acquires films for distribution across multiple platforms. Zee
provides TV programming to 7 national and 6 regional
language channels.
The company in June 2001 financed, produced &
distributed Hindi feature film, “Gadar – Ek Prem Katha”,
which became the top grosser of the year 2001. Zee also
distributed two feature films “Tere Liye” and “Bawandar”
in financial year 2002.
Broadcasting – Domestic Operations
• Zee Network broadcasts 13 channels in the Indian
subcontinent and several channels worldwide and
reaches more than 225 million households across 80
countries.
• It is spread across all genres of entertainment and
information through national, regional and English
language segments.
• With an objective to make “Alpha” as a brand name for
all regional channels of the network, Zee is planning to
re-launch its South Indian channels “Bharathi” and
“Kaveri” as “Alpha Tamil” and “Alpha Kannada”
respectively. Also, the company is planning to launch
two new regional language channels for Telugu & Urdu
speaking audience.
• Recently the Government of India has opened the
broadcasting sector for private players and through an
amendment in broadcast bill it has allowed private
players to uplink channels from India. Zee has been
granted permission to uplink 10 channels from India
through a teleport of Essel Shyam Communications
Limited.
Broadcasting – International Operations
• Zee has broadcasting operations in USA, Canada, the
Caribbean, UK, Europe, Africa, Middle East and other
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parts of South Asia. In UK and Europe Zee offers a
4-channel package, Zee TV, Zee Cinema, Zee Music
and Alpha ETC Punjabi. It has around 125,000
subscribers both on cable and DTH.
• The US operations were started in 1998 and Zee has
two channels Zee TV and Zee Gold with a combined
subscriber base of around 135,000.
• Zee’s African operations have been steady with the
subscriber base of around 35,000 with one channel,
Zee TV. The DTH operator Multichoice distributes Zee
TV within its South East Asian bouquet.
• Zee broadcasts Zee TV and Alpha Punjabi in Canada.
The company recently started a separate beam of Zee
TV for Middle East and Pakistan markets. It gives an
opportunity to leverage better advertising and pay
revenues in these markets.
Access
Access business of Zee operates across multiple
services such as cable distribution of C&S channels
through franchisees/local cable operators, Internet over
Cable (IOC) and distribution of Zee Network pay
channels to the operators. Presently, Sit icable, a
subsidiary company, is an MSO, which reaches more
than 6.5 million homes in India.
• It operates two cable channels namely, Siti Cinema,
which is a Hindi Movie channel and Siti Channel, which
is a local channel.
• First ISP to start broadband Internet over Cable.
• Zee Turner, a joint venture between Zee and Turner
International India Ltd., distributes 16-channel bouquet
across the sub-continent. Presently, the JV has more
than 4.0 million paid subscribers all across the country.
Education
Zee Education was formed as a division of Zee in 1994
to focus on IT education. Zee Interactive Learning
Systems Limited (“ZILS”) was formed in 1999 to create
a learning network and delivers a variety of education
content and solutions for a range of careers and
vocations. ZILS delivers learning solutions to various
segments of society through various mediums namely
ground learning centres, multimedia, internet and VSAT-
based interactive platforms. ZILS today has about 280
learning centers across the country.
FINANCIAL CONDITION
1. Share Capital
ZTL - The authorized share capital of the company is
Rs. 75 crores divided into 50 crores equity shares of
Rs. 1 each and 25 lacs cumulative redeemable
preference shares of Rs. 100 each.
At present, the paid-up Equity share capital of the
company is Rs. 41.25 crores, consisting of 41.25 crores
Equity shares of Re. 1 each. During the year, there has
been no increase in the number of equity shares.
2. Reserves and Surplus
During the year there has been no addition to the share
premium account.
3. Secured Loans
ZTL - The secured loans have gone up from Rs. 113.9
crores to Rs. 244.1 crores. This was primarily due a
Term Loan taken from an Indian financial institution.
This term loan was taken with a view to convert
unsecured short-term loans into a long-term loan and
pay off loans at the subsidiary level. The working capital
finance from banks has increased from Rs. 26.0 crores
to Rs. 57.3 crores.
Consolidated - Secured loans amounted to Rs. 582.1
crores, which include term loans of Rs. 512.3 crores
from financial institutions and banks. The working capital
finance from banks amounts to Rs. 61.8 crores.
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4. Unsecured Loans
ZTL - The unsecured loans have gone down from
Rs. 209.7 crores to Rs. 154.3 crores as a result of
the above restructuring of the loan portfolio. The
company took a loan of Rs. 79.73 crores from its
subsidiary, Siticable, which has been paid back in
the fiscal 2002.
Consolidated - Unsecured loans as of March 31, 2002,
stood at Rs. 266.9 crores, which include Rs. 109.5
crores received from related party in an overseas
subsidiary of the company. These funds were borrowed
to meet working capital mismatch of the company during
the earlier years.
5. Fixed Assets
ZTL – The increase in the net fixed assets of the
company was Rs. 32.7 crores from Rs. 82.6 to
Rs. 115.3 crores. This increase is largely attributed to
the purchase of decoder boxes for DTO operations of
the company and construction of the uplink centre, which
were part of CWIP in the previous year. Capital work in
progress amounted to Rs. 10.3 crores.
Consolidated – The Company has net fixed assets of
Rs. 3,391.3 crores. A major component of the asset is
intangibles amounting to Rs. 3,172.6 crores arising from
the goodwill created due to the acquisition of ZMWL,
Siticable, ATL and Patco. Rs. 74 crores is utilised in
Siticable operations, of which around Rs. 27 crores are
in cable assets and the balance in head-end equipments
and on the line. Rs. 115 crores is in ZTL. Capital work
in progress amounted to Rs. 148.5 crores, the majority
of which is in Siticable operations amounting to
Rs. 138.2 crores. The CWIP in Siticable relates to the
HFC project, IOC project and dial-up assets.
Commissioning of the HFC project in Bangalore has
started on a modular basis and approximately Rs. 50
crores would be capitalised.
6. Investments
ZTL – Zee has total investment of Rs. 3,536.9 crores
including investments in subsidiaries, and stocks of other
quoted and unquoted companies. Out of these
investments a consideration to the extent of Rs. 2,698.3
crores is discharged by way of issue of Company’s
equity shares under share swap.
Consolidated – After netting out inter-company
investments, Zee has investments worth Rs. 12.5 crores
representing investments into various companies such
as Karma Networks, Master Ads, Aplab Ltd., Dakshin
Communications, etc.
7. Net Current Assets
ZTL – The Net Current Assets have increased from
Rs. 708.6 crores to Rs. 787.3 crores primarily due to
an increase in the trade receivables.
Inventory has increased by Rs. 16.7 crores largely on
account of acquisition of movies and programming software
for Zee TV and other regional language channels.
Sundry debtors have increased from Rs. 171.0 crores
to Rs. 274.3 crores. High debtor position of the company
is largely due to outstanding receivables from the
subsidiaries on account of programme purchases and
commission receivables, which is on account of general
delay in realization of advertising sales of subsidiary
companies. The debtor outstanding days stands at 247
days and 162 days as on March 31, 2002 and 2001
respectively.
Cash and Bank balance has reduced to Rs. 126.9 crores
as on March 31, 2002 from Rs. 225.4 crores at the end
of the previous year. This is due to acquisition of movies,
programs and advance given for acquisition of stake
Padmalaya Telefilms Limited during the year.
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Loans and Advances increased to Rs. 497.1 crores
which include advances to Buddha Films for Rs. 171.6
crores and advances of Rs. 58 crores relating to
acquisition of Padmalaya Telefilms Limited.
Current Liabilities and Provisions have increased to
Rs. 246.2 crores from Rs. 229.3 crores. In the fiscal
2002, trade advances and deposits received during the
year have increased to Rs. 63.5 crores from Rs. 11.2
crores. Provisions during the year include Provision for
Tax (net of advances) for Rs. 22.7 crores.
Consolidated – Net current assets of the company as
at year-end stands at Rs. 1,245.6 crores. Inventory of
the company includes programme software, films, music
cassettes and CDs and amounted to Rs. 260.1 crores.
Sundry debtors at Rs. 628.9 crores accounts for more
than 39% of total current assets, which amounts to 213
days of total sales & services. The acumulated
provisions for doubtful debts is amounting to Rs. 65.8
crores. The receivables position of the company is high
largely due to higher outstanding advertising sales
receivables. The primary reason was that company had
entered into several deals in the beginning of financial
year 2002, which were based on guaranteed ratings.
These deals took longer time to get fully consumed and
the advertisers were negotiating to pay the outstanding
amount only after all the guarantees were reconciled
and consumed. The reconciliation of accounts delayed
the process of collection. However, now with all the
major accounts being reconciled, the company is
expecting to realize the outstanding amounts and bring
back debtors ageing to the normal levels.
Cash and Bank balance has been Rs. 188.6 crores as on
March 31, 2002. Loans and Advances accounts for 32.6%
of total current assets translating to Rs. 521.4 crores. Out
of this Buddha Films accounts for Rs. 171.6 crores.
The balance was deployed in treasury operations.
Current liabilities and Provisions amounts to Rs. 353.4
crores largely comprising of current liabilities of
Rs. 267.2 crores, including sundry creditors of Rs. 236.9
crores. High receivable cycle has translated in stretched
payment schedules. Provisions as of March 31, 2002
amounts to Rs. 86.2 crores, which mainly comprises of
provision for tax (net of advances), proposed dividend
and future retirement benefits.
8. Miscellaneous Expenditure
ZTL – During the year, the company has accounted for
Rs. 20.6 crores as deferred revenue expenditure which
mainly consists of loan prepayment charges, upfront
fees, DTO expenses and other deferred revenue
expenditure having enduring future benefit and
amortised over a period of 3 to 5 years.
Consolidated – The miscellaneous expenditures
amounting to Rs. 42.6 crores includes Rs. 41.5 crores
as deferred revenue expenditure which is based on
managements estimate of its enduring future benefit
and is amortised over a period of 3 to 5 years.
RESULTS OF OPERATIONS
1. Revenues
ZTL - During the year, total revenues of the company
increased by 10.9% to Rs. 483.2 crores from Rs. 435.7
crores. The company witnessed a change in revenue
profile towards the end of fiscal 2002, as it started
broadcasting/uplinking the Alpha branded channels from
India. Revenues include a marginal increase in sales to
Rs. 319.3 crores and an increase of 7.5% in the service
revenues including advertising commission.
Sales of the company also include revenues from theatrical
distribution of films, “Gadar-Ek Prem Katha”, “Tere Liye”
and “Bawandar” and music publishing business of the
company. Other income, including interest income on various
42
treasury operations increased by more than 50% to
Rs. 76.7 crores. Sales of ZTL also include a non-recurring
sale component arising from the sales of lottery terminals
to Playwin Infravest, amounting to Rs. 20.1 crores.
Consolidated - Total Revenues of the company during
the year were Rs. 1,155.5 crores. Consolidated revenue
streams (Sales and Services) of Zee Telefilms Limited
comprise of advertising; subscriptions and others.
Advertising revenues are generated mostly from
broadcasting operations worldwide. During the financial
year ended March 31, 2002, advertising revenues
accounted for 57.2% of revenues to Rs. 660.5 crores.
Bulk of the advertising revenues were generated from
the Asia pacific region.
Subscription Revenues are generated both from domestic
and international operations. Zee Network channels are
distributed across 80 countries through DTH and cable
platforms. In domestic and other South-east Asian
markets, the Pay channel bouquet is distributed and
marketed by Zee Turner Ltd., which is joint venture
between Zee and Turner International Ltd., an AOL Time
Warner company. Siticable, the largest MSO in India and
a subsidiary of Zee, earns subscription revenues from
its franchisees and local cable operators.
For the year ended March 31 2002, the company
recorded subscription revenues of Rs. 316.9 crores.
The company’s pay-strategy in the domestic market,
over a period of last two years has shown remarkable
progress resulting in high growth in subscription
revenues. Zee has been successful in deeper
penetration in the US markets, which has resulted in
greater capitalization of the potential. In UK, Zee has
consolidated its position in the market after turning
digital. Hence, subscription revenues in UK and other
European markets have also shown promising trends
in the current fiscal.
Other Revenues account for 8.6% of the total revenues,
which include revenues from theatrical distribution of
films, “Gadar-Ek Prem Katha”, “Tere Liye” and
“Bawandar”, music publishing, education business, non-
recurring sales of lottery terminals and equipment lease
rental charges. Education business was affected due to
downturn in IT education business.
Other Income amounting to Rs. 79.2 crores includes
interest and other income from funds invested in various
treasury operations.
2. Expenditure
ZTL - Total expenses increased by 14.3% to Rs. 283.6
crores from Rs. 248.1 crores. These expenses include
programming, transmission and other direct costs.
Cost of goods sold, primarily costs of programming, music
publishing and acquisition/ production of films, has
dropped by 5.1% to Rs. 170.9 crores from
Rs. 180.1 crores last year. The costs of goods also include
a non-recurring cost of lottery terminals worth Rs. 19.7
crores purchased on behalf of Playwin Infravest.
During the year, personnel expenses have increased
by 29.9% to Rs. 32.6 crores from Rs. 25.1 crores in the
previous year, mainly due to the increase in
compensation and benefits to employees.
Selling, General & Administrative Expenses consist
primarily of expenses relating to travel, marketing,
telecommunications, management, administration and
rentals.
Consolidated – Total expenses of the company
amounted to Rs. 772.0 crores, which includes
programming, transmission, SMS & subscription and
other direct and indirect costs. The company had
undertaken effective cost control measures to maintain
margins. Zee also witnessed savings in the transmission
costs because of migration from analog to digital
platform.
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Operting costs mainly constitutes the cost of
programming and other raw materials amounting to
Rs. 205.7 crores, transmission cost of Rs. 68.6 crores
and subscription fees and SMS costs mainly from
international markets amounting to Rs. 104.7 crores.
The Company during the year has incurred personnel
expenses amounting to Rs. 77.8 crores.
Selling, General & Administrative Expenses: During
the financial year, the company incurred Rs. 250.7
crores as other operating expenses. These expenses
are 32.5% of the total expenses. This also includes
total non-cash write-off/amortisation amounting to
Rs. 40.4 crores.
3. Earnings before Interest, Tax, Depreciation and
Amortisation (EBITDA)
ZTL - During the financial year 2002, Operating profits
have registered a growth of 6.4% to Rs. 199.7 crores
as compared to Rs. 187.7 crores in the previous year.
Operating margins, in the fiscal 2002 decreased to
41.3% as compared to 43.1% in the fiscal 2001. The
primary reason was shifting of uplinking of regional
channels to India, which has resulted in the losses of
regional channels now being booked under ZTL.
Consolidated – During the financial year 2002,
consolidated operating profits of the company were Rs.
383.4 crores. The company achieved operating margins
of 33.2% in the fiscal 2002. This was largely due to
effective cost control at operating levels and decrease
in transmission expenses.
4. Depreciation and Interest
ZTL - Depreciation provided during fiscal 2002 was
Rs. 6.7 crores, an increase of 55.8% over the
depreciation of Rs. 4.3 crores for fiscal 2001. The
company witnessed a high growth in the finance cost
for the fiscal 2002 mainly due to increase of Rs. 130.1
crores in term loans to Rs. 244 crores. Total loans have
gone up from Rs. 323.6 crores to Rs. 398.4 crores.
Finance expense increased from Rs. 21.1 crores to
Rs. 58.5 crores.
Consol idated - On the consol idated basis,
depreciation provided during fiscal 2002 was Rs. 21.5
crores and finance expenses of the company amount
to Rs. 80.8 crores, which include foreign exchange
loss of Rs. 3.2 crores, interest expense of Rs. 62.8
crores and Rs. 14.8 crores towards discounting and
financing activities.
5. Profit before Tax
ZTL - The profit before tax during fiscal 2002 was
Rs. 134.4 crores, which registered a drop of 17% as
compared to fiscal 2001 due to higher interest burden
as mentioned above.
Consolidated - Consolidated, income before tax during
fiscal 2002 was Rs. 281.1 crores. The company
achieved PBT margins of 24.3% for the fiscal under
discussion.
6. Provision for Tax
ZTL – The provision for income tax was Rs. 37.1 crores
in fiscal 2002 as compared to Rs. 23.8 crores in fiscal
2001. The increase is largely attributed to the provision
of Rs. 5.6 crores as deferred tax. During the year, effective
tax rate on the current year provision increased to 27.6%
as compared to 14.7% in fiscal 2001. The company
incurred higher tax provision due to reduction in
percentage of benefit available for deduction u/s 80HHF.
Consolidated – On a consolidated basis, the company
has provided for Rs. 88.8 crores as tax in fiscal 2002.
Also, the net deferred tax benefit on account of timing
difference is Rs. 2.3 crores. Company’s effective tax
rate after all provisions is 30.8%. Current tax is
calculated on the results of individual companies in
accordance with local accounting practices and tax
regulations.
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7. Net Income
ZTL - During fiscal 2002, before prior period adjustments,
net income of the company was Rs. 97.3 crores, which
shows a drop by 29.8% as compared to the previous
fiscal. As a percentage of total revenue, net income
was 20.1% during the year, lower than 31.8% achieved
during last year.
After adjustments for prior period items and provision
for tax for earlier years for Rs. 3.2 crores and Rs. 14.3
crores respectively, net income of the company was
Rs. 79.8 crores.
Consolidated - During the fiscal 2002, consolidated
net profit after tax of the company for fiscal 2002 was
Rs. 194.6 crores. Net-profit margin achieved by the
company is 16.8%.
After adjustments for prior period items and provision
for tax for earlier years for Rs. 2.2 crores and Rs. 14.5
crores respectively, consolidated net income after tax
and prior period adjustments was Rs. 177.9 crores.
Outlook : Issues and Risks
1. Interest Rate Risk
Zee has entered into variable-rate debt during previous
years in its subsidiaries. Any increase or decrease in the
level of interest rates would, respectively increase or
decrease the company’s annual interest expense. Also,
the company through its various subsidiaries entered into
fixed rate debt during previous years. Therefore, any
rate increase or decrease would accordingly affect the
fair value of the outstanding debt amount.
2. Foreign Currency Risk
Zee deals in various currencies across several countries
at various stages of operations. Any fluctuation in
currency rates could affect the company adversely in
cross currency remittances and receivables. Due to their
nature and unanticipated cash flow at various levels of
operations makes it very difficult for the company to
hedge cross currency exchange rate fluctuations.
3. Equity Risk
The Company is exposed to market risk as it relates to
changes in market value of its investments. The
Company invests in equity instruments of various public
and private companies for operational and strategic
business purposes, many of which are media and
technology companies. These securities are subject to
significant fluctuations in fair market value due to
volatility of the stock market and the industries in which
the companies operate.
4. Management of growth
Zee has experienced significant income growth in recent
periods. The Company’s operating income in fiscal 2002
has grown by 29.8% over fiscal 2001. Future growth at
Zee will place significant demands on its management
and other resources. Continued growth increases the
challenges involved in recruiting and retaining skilled
personnel. The Company’s ability to manage growth
effectively would have a material effect on the quality of
its business prospects, and its results and financial
condition.
5. Competition
At present, the broadcasting industry targeting Indian
footprint is dependent on advertising revenue as its
primary source of revenue. The advertising revenue
accruing to a channel in turn depends on the popularity
of the channel among the viewers. The company has to
create programmes as per the viewers’ tastes to
preserve and increase viewership and prevent potential
migration to other channels. Competition includes
international firms as well as national, regional and local
firms. Many of the company’s competitors have
significantly greater financial resources, and the
company must ensure cost effective operations to
compete successfully with them.
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6. Regulatory issues impacting the industry
The businesses of the company come under the purview
of the information and broadcasting ministry of the
Government of India. In one of its move, the Government
is proposing Conditional Access System for the Indian
Cable households. This proposal could have a significant
impact on the company’s operations depending on the
exact nature of proposals and the guidelines for
implementation.
7. Technology
We live in a dynamic technological environment and
Zee’s business is highly technology intensive, including
transponders on satellites, various uplinking and
broadcasting equipments, edit suites, digital decoders
and conditional access systems. Going forward the
company would continue to rely on various technological
advancements in order that its operations maintain their
competitive edge.
CRITICAL ACCOUNTING POLICIES
Revenue recognition
We derive our revenues primarily from two sources (1)
Advertising revenues (2) Subscription revenues. Advertising
revenue is recognized (gross of agency commission) when the
related advertisement or commercial appears before the public
i.e. on telecast. Subscription revenue is recognized on a time
basis on the provision of television broadcasting to subscribers.
Programming cost
The programming cost is mainly of four kinds (1)
entertainment related television programming (2) news and
event based television programming and (3) films with
multiple rights (4) films with limited telecast rights
Content – Trade: Television programs / films etc. acquired or
produced by the company for sale :
a) Cost of Programs like News, Current Affairs, Chat shows,
Events etc. are fully expensed on first sale.
b) Programs having re-exploitable value are expensed 90%
on first sale and 10% expensed on its subsequent sale.
c) In case of the film produced / acquired by the company,
cost of each right is expensed fully on first sale.
d) Other Programs, Film Rights and where limited telecast
rights are sold are valued at unamortized cost.
Content – Broadcasting: Television programs / films, acquired
or produced and used as a broadcaster for telecasting on its
owned Television channels:
a) Cost of Programs like News, Current Affairs, Chat shows,
Events etc. are fully expensed on first telecast.
b) The cost of the program rights including unamortized
cost of Content from Trade used for broadcasting are
amortized on straight line basis from its first telecast,
taking its estimated economic useful life of 36 months
or license period whichever is shorter.
c) The cost of telecast rights of film is amortized on straight-
line basis taking its estimated economic useful life of
60 months or license period whichever is shorter, from
its first telecast.
Content - Audio Rights / Recorded Cassettes, Compact Discs
etc. Copyrights of Audio titles acquired and recorded
cassettes, Compact Discs produced for sale:
a) Film based rights: 50% of cost expensed on audio
release and balance after six months of Film release or
when cost is recouped, whichever is earlier.
b) Non-Film based rights: 50% of cost expensed on audio
release and balance after six months of release or when
cost is recouped, whichever is earlier.
c) Recorded Audio Cassettes, Compact Discs: Cost means
cost of production excluding cost of Audio Rights.
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PRINCIPLES OF CONSOLIDATION AND APPLICATION OF
EQUITY METHOD OF ACCOUNTING
Basis of consolidation
The consolidation of the financial statements of the parent
company and its subsidiaries is done on line-by-line basis
by adding together like items of assets, liabilities, income
and expenses. All significant intra-group balances and intra-
group transactions and unrealized profits are eliminated on
consolidation.
Minority interest in subsidiaries represents minority
shareholder’s proportionate share of the net assets and the
net income of Zee’s majority owned subsidiaries.
Accounting estimates
The preparation of the financial statements in accordance
with the Generally Accepted Accounting Principles requires
that the management makes estimates and assumptions
that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities as at the date of the
financial statements and the reported amount of revenue
and expenses of the year. Examples of such estimates
include estimate of provision for diminution in the value of
Investments, provision for doubtful debts, useful life of
fixed assets etc. Actual results could differ from those
estimates.
Foreign Currency
Foreign Currency Transactions :
The functional currency of each entity in the group is its
respective local currency. Transactions in foreign
currencies are recorded in functional currency at the rate of
exchange prevailing at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated into
functional currency at the rates of exchange prevailing at
the Balance Sheet date and gain or loss is recognized in the
Profit and Loss Account.
Foreign Currency Translation and Exchange Rates :
Assets and liability accounts of foreign subsidiaries are
translated into Indian Rupees at year-end rates and all
income and expenses are translated at yearly average rate
except for inventories, which are converted at opening/closing
rates as the case may be. Off Balance Sheet items are
translated into Indian Rupees at year-end rates.
Accounting for income taxes
Current income tax :
Current income tax is calculated on the results of individual
companies in accordance with local accounting practices
and tax regulations.
As part of the process of preparing our consolidated financial
statements we are required to estimate our income taxes in
each of the jurisdiction in which we operate. We are subject
to tax assessment in each of the jurisdictions. A tax
assessment can involve complex issues, which can be
resolved over extended period of time.
Deferred taxes :
Deferred tax assets and liabilities are recognized using the
asset and liability approach for the expected future tax
consequences of temporary differences between the carrying
amounts and the tax bases of assets and liabilities. Unutilized
tax losses will only be utilized where there is a likelihood of
them being able to be offset against tax in the future. For
the calculation of deferred tax, the local tax rates likely to be
in force are used for the respective individual company where
deferred tax accounting is adopted.
Others
All other significant accounting policies such as revenue
recognition, inventories, fixed assets, depreciation, leases
and retirement benefits etc. are given in detail in the notes
to accounts of consolidated financial statement.
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1. We have audited the attached Balance Sheet of Zee
Telefilms Limited as at 31st March, 2002 and also the
Profit and Loss Account of the Company for the year
ended on that date annexed thereto. These financial
statements are the responsibility of the company’s
management. Our responsibility is to express our opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with accounting
standards generally accepted in India. These standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
3. As required by Manufacturing and Other Companies
(Auditors’ Report) Order, 1988 issued by the Company
Law Board in terms of Section 227(4A) of the
Companies Act, 1956, and on the basis of such checks
as we considered appropriate, and according to the
information and explanations given to us during the
course of audit, we annex hereto a statement on the
matters specified in paragraphs 4 and 5 of the said
order.
4. We draw reference to Note 2 of Schedule 17 regarding
effect of amalgamation w.e.f. 1st April, 2001 on reserves
and profits of the company pending approval of scheme
of amalgamation of four of its subsidiary companies;
and
Note 6(f) of Schedule 17 regarding loan of
Rs./Thousands 1,715,681 (1,023,605) due from Buddha
Films Limited, considered recoverable on the basis of
additional guarantee given by promoter of the Company
and representation from the management, the loan is
considered good and recoverable.
5. Further to our comments in the annexure referred to in
paragraph (3) above:
a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit;
b) In our opinion, proper books of account as
required by law have been kept by the company,
so far as appears from our examination of those
books;
c) The Balance Sheet and Profit and Loss Account
dealt with by this report are in agreement with
the books of account;
d) In our opinion, the Balance Sheet and Profit and
Loss Account complies with the accounting
standards referred to in Section 211(3C) of the
Companies Act, 1956 to the extent applicable to
the Company;
e) On the basis of written representations received
from the directors and taken on record by the
Board, we report that none of the directors are
disqualified as on 31st March 2002 for being
appointed as a director in terms of clause (g) of
sub section (1) of the Section 274 of the
Companies Act, 1956.
f) In our opinion and to the best of our information
and according to the explanations given to us,
the said accounts read together with significant
accounting policies and notes to accounts as per
Schedule 17, gives the information required by
the Companies Act, 1956, in the manner so
required, give a true and fair view in conformity
with the accounting principles generally accepted
in India;
i) In the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2002; and
ii) In the case of the Profit and Loss Account,
of the Profit for the year ended on that date.
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Mumbai
24th September, 2002
to the Members of ZEE TELEFILMS LIMITED
Auditors’ Report
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1. The Company has maintained the proper records
showing full particulars including quantitative details and
situation of its fixed assets. The fixed assets of the
company have been physically verified by the
management during the year and as explained to us, no
material discrepancies were noticed on such verification.
The assets (electronic devices) given on operating lease
to subscribers of pay television channels are verified
with reference to certificate of the distribution agent.
2. None of the fixed assets have been revalued during
the year.
3. As explained to us, stock of raw stocks (tapes,
cassettes etc.), films / programs (copyright verified with
reference to title documents / agreements) at all
locations have been physically verified by the
management during the year except stocks lying with
third parties in respect of which confirmations have
been obtained in most cases. In our opinion, the
frequency of such verification is reasonable.
4. In our opinion, the procedure of physical verification of
stocks followed by the management is reasonable and
adequate in relation to the size of the company and
nature of its business.
5. Discrepancies noticed on physical verification of stocks
as compared to books records are not significant and
have been properly dealt with in the books of account.
6. In our opinion, the valuation of stocks is fair and proper
and in accordance with the normally accepted
accounting principles and is on the same basis as in
the preceding year.
7. The Company had not taken loan from any firm,
company or party listed in the register maintained under
Section 301 of the Companies Act, 1956. In terms of
sub-section (6) of Section 370 of the Companies Act,
1956, the provisions of the section are not applicable
to the company effective from 31st October, 1998.
8. The Company has granted loans to companies listed in
the register maintained under Section 301 of the
Annexure referred to in paragraph (3) of Auditors’ Report to the members of Zee Telefilms Limited on theAccounts for the year ended 31st March, 2002.
Companies Act, 1956. In our opinion, the rate of interest
and other terms and conditions of the said loan are
prima facie not prejudicial to the interests of the company.
In terms of sub-section (6) of Section 370 of the
Companies Act, 1956, the provisions of the section
are not applicable to the company effective from
31st October, 1998.
9. The Company has granted loans to parties including
employees who are repaying the principal as stipulated
or rescheduled and are regular in the payment of interest
wherever applicable except a loan of Rs./Thousands
1,715,681 including interest (net of partial repayment
and interest received during the year), have been
rescheduled and interest free loans of Rs./Thousands
526,023 (98,324) to its subsidiary companies for which
there are no stipulations as to repayments.
10. In our opinion, there are adequate internal control
procedures commensurate with the size of the company
and nature of its business for the purchase of goods,
television programs, films/program rights, plant and
machinery, equipment, other assets and for the sale of
goods, programs, films/program rights, advertisements,
subscription etc.
11. According to information and explanations given to us,
the transactions of sale of goods made in pursuance
of the contract or arrangements entered in the register
maintained under Section 301 of the Companies Act,
1956 and aggregating during the year to Rs./Thousand
50 or more in value in respect of each party are
explained to have been done at reasonable prices.
However, in the absence of comparisons,
reasonableness of price charged could not be
ascertained. There are no transactions of purchase of
goods and materials and sale of services.
12. As explained to us, the company has a regular system
of determining unserviceable or damaged goods and
adequate provision have been made in the accounts
for the loss arising on items so determined.
Annexture to Auditors’ Report
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02ZEE TELEFILMS LIMITED
13. During the year the company has not accepted any
deposits from the public.
14. As explained to us, the activities of the company do
not generate any realizable scrap or by-product.
15. In our opinion, the Company has adequate internal
audit system commensurate with the size of the
company and nature of its business.
16. We are informed that the central government has not
prescribed the maintenance of cost accounting records
under Section 209 (1) (d) of the Companies Act, 1956
in respect of company’s products.
17. According to the records of the company the
Contribution to Provident Fund and Employees’ State
Insurance dues have been regularly deposited with the
appropriate authorities.
18. According to the information and explanations given to
us, there are no undisputed amounts payable in respect
of Income Tax, Sales Tax, Wealth Tax, Customs Duty
and Excise Duty which have remained outstanding as
at 31st March, 2002 for a period of more than six
months from the date they became payable.
19. According to the information and explanations given
to us, no personal expenses of directors and
employees have been charged to Profit and Loss
Account, other than those payable under contractual
obligation or in accordance with generally accepted
business practices.
20. The Company is not a sick industrial company within
the meaning of clause (O) of sub-section (1) of Section
3 of the Sick Industrial Companies (Special Provisions)
Act, 1985.
21. The Company‘s service activities mainly include
broadcasting services, space selling on television
channels, production services etc. and are such that it
does not involve receipts, issues and consumption of
materials and stores, and hence the question of
allocating material and man-hours to relative job does
not arise.
22. In respect of trading activities of the company damaged
goods have been determined and adequate provision
has been made in the accounts.
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Mumbai
24th September, 2002
50
(Rs. ’000)
Schedule 2002 2001
SOURCES OF FUNDS
Shareholders’ FundsShare Capital 1 412,438 412,438Reserves and Surplus 2 40,139,676 39,683,664
40,552,114 40,096,102
Deferred Tax Balances [Refer Note 4(d)] 171,352 —
Loan FundsSecured Loans 3 2,440,779 1,139,239Unsecured Loans 4 1,543,450 2,097,260
3,984,229 3,236,499
TOTAL 44,707,696 43,332,601
APPLICATION OF FUNDS
Fixed Assets 5Gross Block 1,352,412 949,439Less : Depreciation up-to-date 199,112 122,938
Net Block 1,153,300 826,501Capital Work-in-progress 103,007 275,190
1,256,307 1,101,691
Investments 6 35,368,806 35,138,722
Current Assets, Loans and Advances 7Inventories 1,352,207 1,184,970Sundry Debtors 2,742,745 1,710,064Cash and Bank Balances 1,269,522 2,254,327Loans and Advances 4,970,748 4,228,996
10,335,222 9,378,357Less :Current Liabilities and ProvisionsCurrent Liabilities 8 1,974,023 1,928,544Provisions 9 488,075 364,123
2,462,099 2,292,667
Net Current Assets 7,873,123 7,085,690
Miscellaneous Expenditure 10 209,459 6,498(to the extent not written off or adjusted)
TOTAL 44,707,696 43,332,601
Significant Accounting Policies and Notes to Accounts 17
as at March 31,
Balance Sheet
As per our attached report of even date For and on behalf of the Board
Mohan Bhandari Sandeep Goyal Whole Time DirectorPartner Ashok Kurien DirectorFor MGB & Co Nemi Chand Jain DirectorChartered Accountants
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
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(Rs. ’000)
Schedule 2002 2001
INCOME
Sales and Services 11 4,064,914 3,846,619Other Income 12 767,234 510,582
TOTAL 4,832,148 4,357,201
EXPENDITURE
Transmission Cost 21,454 —Cost of Goods 13 1,919,869 1,805,024Personnel Cost 14 325,990 251,077Administrative and Other Expenses 15 568,229 424,425
TOTAL 2,835,542 2,480,526
Operating Profit 1,996,606 1,876,675Financial Expenses 16 585,175 211,413Depreciation 67,383 42,696
Profit Before Tax 1,344,048 1,622,566
Less – Provision for Taxation[Includes Rs./Thousand 250 (250) for Wealth tax]
– Current 315,250 237,700– Deferred 56,180 —
Profit After Tax for the year 972,618 1,384,866Less – Prior Period Adjustments (Net) 32,204 3,074Less – Provision for Taxation earlier years [Refer Note 4 (a)] 142,500 569,538
Net Profit After Tax 797,914 812,254Add – Excess provision - Dividend (earlier year) 149 —Add – Balance brought forward 3,217,865 2,955,631
Amount Available For Appropriation 4,015,928 3,767,885
AppropriationsProposed Dividend 226,878 226,878Tax on Dividend — 23,142General Reserve 300,000 300,000
Balance carried to Balance Sheet 3,489,050 3,217,865
4,015,928 3,767,885
Basic and Diluted Earnings Per Share (In Rupees) 1.93 1.97(On distributable profits on shares outstanding) (Face Value Re.1)
Significant Accounting Policies and Notes to Accounts 17
for the year ending March 31,
Profit and Loss Account
As per our attached report of even date For and on behalf of the Board
Mohan Bhandari Sandeep Goyal Whole Time DirectorPartner Ashok Kurien DirectorFor MGB & Co Nemi Chand Jain DirectorChartered Accountants
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
52
(Rs. ’000)
2002 2001
Schedule 1
Share Capital
Authorised500,000,000 Equity Shares of Re.1/- each 500,000 500,0002,500,000 Cumulative Redeemable PreferenceShares of Rs.100/- each 250,000 250,000
750,000 750,000
Issued, Subscribed and Paid up412,505,012 Equity Shares of Re.1/- each fully paid up 412,505 412,505Less: Calls in arrears (others) 67 67(Out of the above 210,316,212 Equity Shares of Re.1/-eachfully paid up were allotted for consideration other than cashagainst acquisition of Investments)
TOTAL 412,438 412,438
Schedule 2
Reserves and Surplus
Capital Redemption ReserveAs per last Balance Sheet 70,000 70,000
Share PremiumOn equity shares issued for cashAs per last Balance Sheet 8,322,736 4,426,632Add : Received during the year — 3,896,104
8,322,736 8,322,736
On equity shares issued for consideration other than cash 26,773,063 26,773,063
35,095,799 35,095,799
General ReserveAs per last Balance Sheet 1,300,000 1,000,000Less : Adjustment for opening deferred tax liabilities [Refer note 4(d)] 115,173 —Add : Appropriated during the year 300,000 300,000
1,484,827 1,300,000
Profit and Loss Account 3,489,050 3,217,865
TOTAL 40,139,676 39,683,664
as at March 31,
Schedules to the Balance Sheet
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(Rs. ’000)
2002 2001
Schedule 3
Secured Loans
Working Capital Finance From BanksSecured by hypothecation of stocks (other than Programme and Films 572,795 260,017Rights), book debts (other than advertisement commission receivables),first charge on immovable properties at Noida, and second charge onimmovable properties at Marol, Mumbai all ranking pari passu with otherfinancing banks and second charge on advertisement commissionreceivables.Charge for Rs./Thousand 80,000 is under creation.
Term Loans From BankSecured by first charge on advertising commission and Direct to Operator — 603,797subscription receivables, first pari passu charge on fixed assets of theCompany except immovable assets at Noida, exclusive first charge on allpresent and future programming library (including films, movies, currentaffairs, new programmes) owned by the Company, and negative lien withphysical custody of Preference and Equity shares of Siti Cable NetworkLimited. [Due within one year Rs./Thousand Nil (183,333)]
Secured by first pari passu charge on advertisement commission receivable 1,859,299 —and first mortgage and charge on all immovable and movable propertiesboth at present and future except fixed assets located at Noida and anexclusive charge on the programme liabrary of the Company both presentand future programmes and films. The loan granted to a subsidiary is alsosecured by way of pari passu charge on Advertisement Commissionreceivable. [Due within one year Rs./Thousand 327,580 (Nil)]
Interest accrued and due 2,499 —
Foreign Currency Short Term Loan From BankSecured by pari passu charge with Term Loan from Bank on programme — 273,269library, the charge under Section 125 of the Companies Act, 1956 is notregistered.
Hire Purchase/Lease Finance 6,186 2,156Secured against the hypothecation of vehicles. Those acquired underHire Purchase Finance, the charge under Section 125 of the theCompanies Act, 1956, is not registered.
TOTAL 2,440,779 1,139,239
Schedule 4
Unsecured Loans
Nil (25) 13.50% Unsecured Redeemable Non Convertible — 250,000Debentures of Rs.100/- each fully paid up Privately Placed
Nil (25) 12.50% Unsecured Redeemable Non Convertible — 250,000Debentures of Rs.100/- each fully paid up Privately Placed
Short Term Loan– From Banks 1,300,000 350,000
Intercorporate Deposits– From Subsidiary — 797,260– From Others 200,000 450,000
Interest accrued and due 43,450 —
TOTAL 1,543,450 2,097,260
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Schedule 5
Fixed Assets (at cost) (Rs. ’000)
Gross Block Depreciation Net Block
Description As at Deduct- As at Up to For the Deduct- Up to As at As at1/4/01 Additions ions 31/3/02 31/3/01 year ions 31/3/02 31/3/2002 31/3/2001
Land (Leasehold) 6,893 — — 6,893 320 70 — 390 6,503 6,573Buildings 128,332 5,007 — 133,339 8,817 2,118 — 10,935 122,404 119,515Plant and Machinery 629,224 413,156 62,639 979,741 54,840 58,180 4,041 108,979 870,762 574,384Equipments 127,740 21,572 1,208 148,104 37,993 14,942 236 52,699 95,405 89,747Furniture and Fixtures 36,849 15,987 3 52,833 15,463 3,051 — 18,514 34,319 21,386Vehicles 20,401 8,402 3,371 25,432 5,505 2,263 1,327 6,441 18,991 14,896Leasehold Improvements — 6,070 — 6,070 — 1,154 — 1,154 4,916 —
TOTAL 949,439 470,194 67,221 1,352,412 122,938 81,778 5,604 199,112 1,153,300 826,501
Previous Year 453,323 500,810 4,694 949,439 81,409 43,316 1,787 122,938 826,501
Note : (Amount in Rs./Thousand)
1. Building includes Rs. 114, the value of share in a co-operative society.2. Depreciation for the year includes Rs. 54 (620) transferred to pre-operative expenses.3. Depreciation for the year includes Rs. 14,341 (Nil) transferred to deferred revenue expenditure.4. Plant and Machinery includes Equipments (electronic devices) given on operating lease amounting to Rs. 445,294
(311,732), which are not insured.
5. Fixed Assets include assets taken on finance lease Rs. 9,582 and depreciation for the year Rs. 736.
(Rs. ’000)
2002 2001Schedule 6
Investments – Long Term (at Cost)
Quoted – Non-Trade
360,000 Equity Shares of Rs. 10/- each of Essel Propack Limited 1,500 1,500
Unquoted – Trade
50,000 Equity shares of Rs. 10/- each of Karma Network Limited 500 500
Unquoted – Non-Trade
1,000 (Nil) Equity Shares of Rs. 10/- each of Ecool Gaming 10 —
Solutions Private Limited
200 Floating Rate Interest Bonds of State Bank of India of Rs.1,000/- each 200 200
In Subsidiaries – Wholly Owned
34 Ordinary Shares of USD 1/- each of Zee Multimedia Worldwide Limited, BVI * 20,527,092 20,527,092
501 Ordinary Shares of USD 1/- each of Winterheath Company Limited, BVI 9,507,573 9,507,573
(50% held through 100% subsidiary ZMWL) *
100,091,108 Equity Shares of Siti Cable Network Limited of Rs. 10/- each * # 3,179,967 3,179,967
21,500,000 14% Redeemable Non-Cumulative Preference
Shares of Siti Cable Network Limited of Rs.10/- each # 215,650 215,650
347,100 Equity Shares of Programme Asia Trading Company Limited of Rs.10/- each* 1,605,002 1,605,002
21,000,070 (10,000,070) Equity Shares of Rs.10/-each of Econnect (India) Limited 210,001 100,001
73,587 Equity Shares of Rs.10/-each of Zee Interactive Learning Systems Limited 736 736
12,000,070 (70) Equity Shares of Rs.10/- each of Dakshin Media Limited 120,001 1
50,000 Equity Shares of Rs. 10/- each of Kaveri Entertainment Limited 500 500
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(Rs. ’000)
2002 2001
In Subsidiaries - Others
7,400 ( Nil) Equity Shares of Rs.10/- each of Zee TurnerPrivate Limited (extent of holding 74%) 74 —All above shares and securities are fully paid up
TOTAL 35,368,806 35,138,722
Note : * Out of these investments the consideration to the extent ofRs./Thousand 26,983,379 is discharged by way of issue ofCompany’s Equity Shares under Share Swap.
# 51% of these shares have been pledged against loan granted toSiti Cable Network Limited, a wholly owned subsidiary company
Aggregate Value of all Quoted Investments 1,500 1,500Market Value of all Quoted Investments 99,756 79,614Aggregate Value of all Unquoted Investments 35,367,306 35,137,222
Schedule 7
Current Assets, Loans and Advances
A. Current AssetsInventories (as taken,valued and certified by the Management)(valued at lower of cost or estimated net realisable value)Raw Stocks - Tapes, cassettes 6,956 7,659Under Production - Television Programmes/Films etc. 122,797 215,728Stock in Trade - Television Programmes/Films etc. 1,222,454 961,583
1,352,207 1,184,970Sundry Debtors (Refer Note 6(e))(Unsecured and Considered Good unless otherwise stated)More than 6 months [Considered Doubtful Rs./Thousand 18,589 (2,214 )] 1,247,131 78,972Others 1,514,203 1,633,306
2,761,334 1,712,278
Less : Provision For Doubtful Debts 18,589 2,214
[include Rs./Thousand 2,627,685 (1,414,295) due from Subsidiaries] 2,742,745 1,710,064
Cash and Bank Balances (Refer Note 6(c))Cash in hand 1,860 3,159Balances with Scheduled Banks in Current Accounts 917,580 1,193,975Balances with Scheduled Banks in Deposit Accounts 12,745 557,193Cheques in hand / transit 337,337 500,000
1,269,522 2,254,327
B. Loans and Advances (Refer Note 6(f))(Unsecured and considered good)Loans 3,623,577 3,251,374Advances (Recoverable in cash or in kind or for value to be received)
Other Advances 1,127,476 783,592Less : Provision for Doubtful Advances 24,534 11,761
1,102,942 771,831
Deposits 244,229 205,791
4,970,748 4,228,996
TOTAL 10,335,222 9,378,357
56
(Rs. ’000)
2002 2001
Schedule 8
Current Liabilities* (Refer note 6(l))
Sundry Creditors For Goods 354,546 363,173For Expenses and Other liabilities 390,450 971,240
Trade Advances/Deposits received 635,436 112,418Due to Broadcasters/Principals (Pending Remittance) 564,507 453,677Unclaimed Dividend 7,812 5,118Interest accrued but not due 21,272 22,918[*include Rs./Thousand 1,048,295 (453,677) due to subsidiaries]
TOTAL 1,974,023 1,928,544
Schedule 9
Provisions
Provision For - Tax (Net of advances) 227,111 89,910Retirement Benefits 34,087 24,193
Proposed Dividend (including tax) 226,878 250,020
TOTAL 488,075 364,123
Schedule 10
Miscellaneous Expenditure(to the extent not written off or adjusted)
Share Issue Expenses 3,421 6,498Deferred Revenue Expenditure 206,038 —
TOTAL 209,459 6,498
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(Rs. ’000)
2002 2001
Schedule 11
Sales and Services
Sales 3,193,384 3,088,738Broadcasting Revenue 56,650 —Service Revenue 814,880 757,881
TOTAL 4,064,914 3,846,619
Schedule 12 12
Other Income
Dividend (Gross-Non Trade) 1,968 1,230Interest (Gross) [T.D.S. Rs./Thousand 153,844 (110,574)] 746,366 490,018Miscellaneous Income 18,900 19,334
TOTAL 767,234 510,582
Schedule 13
Cost of Goods
Programming Cost
Opening StockRaw Stocks - Tapes, Cassettes 7,659 4,814Under Production - Television Programmes/Films etc. 215,728 78,693Stock in Trade - Television Programmes/Films etc. 961,583 645,851
1,184,970 729,358
Add : Production / Acquisition CostRaw Stocks - Tapes, Cassettes 46,695 47,810Productions - Television Programmes/Films etc. 1,605,633 1,713,431Purchases - Television Programmes/Films etc. 189,292 485,321
- Audio Cassettes 35,151 10,798
1,876,771 2,257,360
Less : Closing StockRaw Stocks - Tapes, Cassettes 6,956 7,659Under Production - Television Programmes/Films etc. 122,797 215,728Stock in Trade - Television Programmes/Films etc. 1,222,454 961,583
1,352,207 1,184,970
1,709,534 1,801,748
Purchases - Others 210,335 3,276
TOTAL 1,919,869 1,805,024
for the year ending March 31,
Schedules to the Profit and Loss Account
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(Rs. ’000)
2002 2001
Schedule 14
Personnel Cost
Salaries, Allowances and Bonus 286,105 219,266Contribution to Provident and other funds 18,150 13,748Staff Welfare Expenses 21,735 18,063
TOTAL 325,990 251,077
Schedule 15
Administrative and Other Expenses
Rent 43,475 23,691Lease Rentals 7,215 8,828Rates and Taxes 2,725 1,953Repairs and Maintenance - Building 758 1,851
- Plant and Machinery 1,149 1,002- Others 18,242 14,632
Insurance 3,455 3,158Electricity/Water Charges 24,173 18,254Communication Expenses 49,952 54,512Printing and Stationery 21,037 27,760Miscellaneous Expenses 47,810 44,132Vehicle Expenses 14,031 14,330Travelling and Conveyance Expenses [including Directors Rs./Thousand 6,035 (2,103)] 34,041 41,898Legal, Professional and Consultancy Charges 31,647 32,119Business Promotion Expenses 49,743 31,902Advertisement and Publicity Expenses 110,666 82,943Provision for Doubtful Debts and Advances 29,148 12,475Bad Debts and Advances Written Off — 1,100Commission/Discount 10,348 2,698Loss on Sale of Fixed Assets 1,021 634Loss on Sale of Investments — 1,475Share Issue Expenses Written Off 3,078 3,078Deferred Revenue Expenses Written Off 64,515 —
TOTAL 568,229 424,425
Schedule 16
Financial Expenses
Interest on – Debentures 16,185 8,627– Fixed Deposits — 1,120– Fixed Loan 380,841 137,876– Others 45,060 5,140
Discounting and Financing Expenses 143,089 58,650
TOTAL 585,175 211,413
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Schedule 17: Significant Accounting Policies and Notes to Accounts
Background
Zee Telefilms Limited (“ZTL” / “the Company”) was incorporated in the state of Maharashtra, India. The Company has beenmainly in the following businesses during the year:
a) Sale of programs, including films, to its subsidiaries for broadcasting on satellite television channels (for beaming toAsia including India, USA, Europe, South Africa, Canada etc) and to other parties;
b) Booking of Advertisement on television channels and collection of advertisement revenue;
c) Audio titles acquisition and distribution through its brand “Zee Records”;
d) Film Production (film “Gadar” had been released for public viewing during the year and animation cum live film“Bhagmati”, is under production) and distribution of films;
e) Direct to Operator (DTO) project for Uplinking and distribution of four satellite television channels from India under thebrand “Alpha” as pay television channels commenced telecast on 24th February, 2002;
Use of Estimates
The preparation of the financial statements in accordance with the Generally Accepted Accounting Principles requires thatthe management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure ofcontingent liabilities as at the date of the financial statements and the reported amount of revenue and expenses of the year.Examples of such estimates include estimate of provision for diminution in the value of Investments, provision for doubtfuldebts, useful life of fixed assets etc. Actual results could differ from those estimates.
A. Significant Accounting Policies
1. Accounting Convention
a) The financial statements have been prepared under Historical Cost Convention on going concern basis and inaccordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.
b) The Company generally follows mercantile system of accounting and recognizes income and expenditure onaccrual basis except those with significant uncertainties.
2. Fixed Assets
(a) Fixed assets are stated at cost less depreciation. Cost includes capital cost, freight, installation cost, duties andtaxes, finance charges and other incidental expenses incurred during the construction / installation stage attributableto bringing the asset to working condition for its intended use.
(b) All capital costs and incidental expenditure relating to pre operational period up to setting up of business areshown as capital work in progress.
(c) Assets acquired under Finance Lease are capitalized and the corresponding lease liability is recorded at anamount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in connectionwith the specific leasing activities directly attributable to activities performed by the company are included as partof the amount recognized as an asset under the lease.
3. Borrowing Costs
Borrowing cost attributable to the acquisition or construction of qualifying assets are capitalized as a part of the costof such assets. All other borrowing costs are charged to revenue.
4. Depreciation
a) Depreciation on fixed assets (including on fixed assets acquired under finance lease) is provided on Straight LineMethod at the rate specified in Schedule XIV to the Companies Act, 1956.
b) Leasehold Land and Leasehold Improvements are amortized over the period of Lease.
5. Investments
Investments, including expenses on acquisition, are classified as long term and stated at cost. Provision for diminutionin value of long-term investment is made, if the diminution is other than temporary.
60
6. Transaction in Foreign Currencies
a) The transactions in foreign currency are accounted at the equivalent rupee value on the date of the transaction.
b) Foreign currency assets and liabilities not covered by forward contracts at the year-end are realigned at theprevailing exchange rate and difference on realignment and realization is adjusted in the respective revenue orcapital head. Premium in respect of forward contract is accounted over the period of the contract.
c) Non-Monetary foreign currency items are carried at cost and accordingly the Investments in shares of foreignsubsidiaries are expressed in Indian currency at the rate of exchange prevailing at the time when the originalinvestments were made.
7. Revenue Recognition
a) Sales are recognized on despatch of goods to customers.
b) Broadcasting services - Advertisement revenue is recognized (gross of agency commission) when the relatedadvertisement or commercial appears before the public i.e. on telecast and Subscription revenue is recognizedon a time basis on the provision of television broadcasting to subscribers.
c) Service revenues are recognized when the service is completed and Advertisement Commission is recognizedwhen the related advertisement or commercial appears before the public i.e. on telecast.
d) Lease rentals are recognized as revenue as per the terms of the lease agreements.
e) Course Fees is recognized over the period of instructions.
f) Television Programs production and acquisition costs are net of recoveries.
8. Inventories
The policy of valuation of Inventories is restated and elaborated for better understanding and broader application withthe commencement of new business of broadcasting services. However there is no change in policy or method ofvaluation of inventories in comparison to the policies followed in the preceding year.
Inventories of Raw Stock (Tapes and Cassettes etc.), Television Program /Films etc. under Production, Stock in Trade(Television Programs, Films and Rights, Audio Cassettes, Electronic Devices, etc.) are valued at lower of cost orestimated net realizable value as detailed hereunder:
Cost
Cost is taken on First In First Out (FIFO) or Specific Identification basis. In case of Films/Television Programs withmultiple rights cost is allocated to each right as per management estimate.
Net Realizable Value
Costs are amortized / expensed as under and net realizable value is estimated by management at unamortized cost.
Content - Trade
Television programs / films etc. acquired or produced by the company for sale.
a) Cost of Programs like News, Current Affairs, Chat shows, Events etc are fully expensed on its first sale.
b) Programs having re-exploitable value are expensed 90% on first sale and 10% expensed on its subsequent sale;
c) In case of the film produced / acquired by the company, cost of each right is expensed fully on first sale.
d) Other Programs, Film Rights and where limited telecast rights are sold are valued at unamortized cost.
Content - Broadcasting
Television programs / films, acquired or produced and used as a broadcaster for telecasting on its owned Televisionchannels:
i) Cost of Programs like News, Current Affairs, Chat shows, Events etc. are fully expensed on first telecast.
ii) The cost of the program rights including unamortized cost of Content from Trade used for broadcasting areamortized on straight line basis from its first telecast, over 36 months or license period whichever is shorter.
iii) The cost of telecast rights of film is amortized on straight-line basis over 60 months or license period whicheveris shorter, from its first telecast.
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Content - Audio Rights / Recorded Cassettes, Compact Discs, etc.
a) Copyrights of Audio titles acquired and recorded cassettes, compact discs produced for sale;
i) Film based rights: 50% of cost expensed on audio release and balance after six months of film release orwhen cost is recouped, whichever is earlier.
ii) Non-Film based rights: 50% of cost expensed on audio release and balance after six months of release orwhen cost is recouped, whichever is earlier.
b) Recorded Audio Cassettes, Compact Discs: Cost means cost of production excluding cost of Audio Rights.
9. Retirement Benefits
a) Contribution to provident fund and other recognized funds are charged to Profit and Loss Account.
b) Leave Encashment is provided in terms of contractual obligations as per the company’s rules.
c) Gratuity liability is provided on the basis of actuarial valuation.
10. Taxes on Income
Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax isrecognized, subject to consideration of prudence in respect of deferred tax assets, on timing difference, being thedifference between taxable income and accounting income that originate in one period and are capable of reversal inone or more subsequent periods.
11. Operating Leases
Lease of assets under which the lessee effectively retains all the risk and rewards of ownership are charged asoperating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordancewith the respective lease agreements.
12. Miscellaneous Expenditure
a) Share issue expenses are amortized over period of 10 years.
b) Premium on prepayment and upfront charges are deferred and amortized over the period of loan.
c) Deferred revenue expenses other than (a) and (b) above deferred are amortized over 36-60 months.
13. Earnings Per Share
Basic earnings per share is computed and disclosed using the weighted average number of common shares outstandingduring the year. Diluted earnings per share is computed and disclosed using the weighted average number of commonand dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.
B. Notes to Accounts
1. Prior Year Comparatives
Previous year’s figures are regrouped, rearranged, or recast wherever necessary to conform to this year’s classification.Figures in brackets pertain to previous year.
2. Restructuring
The Company has initiated a process of restructuring of its subsidiaries (Indian and Foreign), and in pursuance thereoffour of its wholly owned Indian subsidiaries; Kaveri Entertainment Limited, Dakshin Media Limited, Programme AsiaTrading Company Limited, El-Zee Television Limited, have filed the petitions with the High Court, Mumbai, for amalgamationwith effect from 1st April, 2001 with the Company and for adjustment of excess cost of Investments to the companyover net asset value of the amalgamating Company against the reserves of the Company. Accordingly, accounting ofamalgamation scheme, if approved, will affect the reserves and profits of the Company to the extent of such adjustmentand losses of the amalgamating companies for the year 2001-2002. However effect is reflected in the consolidatedfinancial statements of the Company.
The Company has applied to Reserve Bank of India for restructuring of its foreign subsidiaries and approval thereofis awaited. Restructuring of these companies will not have significant effect on its financials. Hokushan Trading Limited,Hong Kong, a subsidiary, has become defunct and divested.
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3. Investments
a) During the year the company has entered into a Memorandum of Understanding (“MOU”) with the promoters ofETC Networks Limited for acquiring management control and majority shareholding including acquisition of 5,660,795equity shares of Rs. 10 each fully paid up for Rs./ Thousands 178,428 (the company has paid an advance of Rs./Thousands 53,520 against the said transaction) and also for allotment on a preferential basis of 2,220,812 equityshares of Rs. 10 each fully paid up for an aggregate consideration of Rs./ Thousands 70,000.
b) The company has entered into a Memorandum of Understanding (“MOU”) with Padmalaya Telefilms Limited(“PTL”), promoters of PTL and the shareholders of Padmalaya Enterprises Private Limited (“PEPL”) for acquiringmanagement control and majority shareholding in PTL through PEPL (a special purpose vehicle in which companywill hold 64.60% equity shares). PEPL would acquire 2,250,000 equity shares of Rs. 10 each fully paid up forRs./Thousands 319,950 and would also be allotted on a preferential basis, 2,000,000 equity shares of Rs. 10 eachfully paid up for Rs./Thousands 284,400. The Company has paid an advance of Rs./Thousands 580,000 againstthe said transaction.
c) These transactions are completed after the close of the year in compliance with the main terms of such contractsand other regulatory provisions including open offer as per Securities and Exchange Board of India (SEBI)takeover code.
4. Income Tax
a) The company had provided for taxation in earlier years considering the 100% deduction on Income from exportof television programs under Section 80 HHC of the Income tax Act, 1961. However, the tax authorities did notallow the said claim and allowed an alternative claim under Section 80-O. On the basis of completed assessmentsand appeals, the short provision of tax was provided in the previous year and balance of Rs./Thousands 142,500(421,822), is provided during the year.
The Company has challenged the disallowance of deduction under Section 80 HHC and Income Tax departmenthas challenged the allowance of claim under Section 80-O, these cross appeals before higher authorities arepending. The decision on these appeals in favour or against the company may result in reduction or increase oftax liabilities of the Company. (Contingent Liabilities)
b) Provision for taxation for the year is made allowing deductions considering compliance of prescribed conditionsunder Section 80HHF for exports made by the Company including approval of delayed realization.
c) The Company has accounted for the deferred tax assets/liabilities as at April 1 2001 by adjusting theamounts from the opening general reserve in accordance with the transitional provision as laid down in AccountingStandard – 22 “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.
d) The components of deferred tax balances as at 31st March, 2002 are as under:
PARTICULARS Rs./Thousands
Deferred Tax AssetsProvision for retirement benefits 7,059Expenses allowable on payment basis 19,858Provision for doubtful debts 6,832Short term loss carried forward 453
Total 34,202
Deferred Tax LiabilitiesDepreciation 129,417Miscellaneous expenditure and other provisions 76,137
Total 205,554
Deferred Tax Liabilities (Net) 171,352
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5. Leases
Additional information on assets taken on lease:
(a) In respect of assets taken on finance lease prior to April 1, 2001: (assets not capitalized)
Rs./Thousands
Future lease rental obligation 17,499
(b) In respect of assets taken on finance lease: (assets capitalized)
Reconciliation of minimum lease payments and its present value:
Minimum Lease Payments as at
Not Later than one year 3,128
Later than one year and not later than five years 4,744
Total 7,872
Less: Amount representing Interest 1,686
Present Value of Minimum Lease Payments 6,186
Less: Amount due not later than one year 2,234
Amount due later than one year and not later than five years 3,952
(c) In respect of assets taken on operating lease during the year
The Company leases office, residential facilities and plant and machinery (including equipments) under cancelableagreements that are renewable on a periodic basis at the option of both the lessee and the lesser. The initialtenure of the lease generally is for 11 months to 36 months.
Lease rental charges for the year 69,699
Future lease rental obligation payable (under non cancellable leases)
Not later than one year 30,000
Later than one year but not later than five years 55,000
6. Disclosures
a) Share application money refundable is subject to reconciliation however it is lying in a separate bank account.
b) Unsecured loans - Short-term Rs./ Thousands 1,000,000 (Nil), are secured by pledge of shares of companiesbelonging to a related party.
c) Cash and Bank balances include fixed deposits of Rs./Thousands 6,000 (6,000) pledged as security for creditfacilities granted to a related party.
d) Current Liabilities include cheques overdrawn of Rs./Thousands 22,767 (713,159).
e) Debtors includes Rs./Thousands 7,799(Nil) due from a Private Limited Company in which a director is interestedas director.
f) Loans and Advances
(i) Advances include:
(a) Rs./Thousands Nil (41,537) due from Private Limited Companies in which directors are interested asdirectors/members.
(b) Rs./Thousands Nil (101,361) as expenses / payments for proposed capital issue.
(c) Rs./Thousands 160,985 (253,998) to subsidiary companies towards share application moneys.
(ii) Loans includes:
(a) Rs./Thousands 27,747 (20,746) due from Zee Network Employees Welfare Trust for purchase of itsshares under Employee Stock Option Plan.
(b) Rs./Thousands 540,267 (98,324) due from subsidiaries.
(c) Rs./Thousands 16,087 due from whole time director (including interest Rs. /Thousands 1,087) (Maximumbalance outstanding at any time during the year Rs./Thousands 16,087).
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(d) Rs./Thousands 14,245 (Nil) due from Private Limited Company in which director is interested as director.
(e) Rs./Thousands 1,715,681 (1,023,605) due from Buddha Films Limited, is considered good andrecoverable on the basis of additional guarantee given by a promoter of the Company.
g) Managerial Remuneration
i) No commission is paid / payable to any director and hence the computation of profits under Section198 / 349 of the Companies Act, 1956 has not been made.
ii) Remuneration paid or provided in accordance with Section 198 of the Companies Act, 1956 to thedirectors included in personnel cost and relevant expense heads.
(Rs./Thousands)
2002 2001
Whole-time Directors(By the Company)Salary and Allowances 33,648 17,852(Includes Rs./Thousands 2,451 pertaining to prior year)
Provident fund contribution 1,227 1,315
Perquisites 1,157 8
Managing Director(By the Company)Salary and Allowances — 3,128Provident fund contribution — 312Perquisites — 8
Remuneration paid to a director by subsidiary company under Sections 198 and 314 of the CompaniesAct, 1956.
Whole-time Directors(By subsidiary company)
Salary and Allowances 6,322 4,571
Provident fund contribution 726 491
Perquisites 656 778
Note: Salary and Allowances includes basic salary, house rent allowance, leave travel allowance, leaveencashment and performance bonus. Perquisites are valued as per Income Tax Rules.
h) Auditors’ Remuneration included in Miscellaneous Expenses
Audit fees 2,100 1,260Tax Audit fees 236 210For other matters 928 1,576
i) Foreign Exchange Gain
The net exchange gain of Rs./Thousands 80,734 (40,480) resulting from settlement and realignment offoreign exchange transactions other than those relating to fixed assets has been credited to respectiveheads of the Profit and Loss Account.
j) Employee Stock Option Plan (ESOP)
The Company had established an Employee Stock Option Plan (ESOP) in 1998 in terms of which 7,468,800equity shares of the face value of Re.1/- each were allotted in the year 1999-2000 at price of Rs.21.20 pershare. The status of ESOP is as under;
(Nos.)
ESOP allotted to Employees by the Company 4,314,000ESOP allotted to Employees through the Zee 237,803Network Employees Welfare TrustBalance with Trust (Zee Network Employees Welfare Trust) 2,916,997
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The ESOP was established prior to Securities and Exchange Board of India (SEBI) guidelines on stock options, whichcame into effect from June 1999, and hence those guidelines are not applicable to the Company as per the clarificationfrom SEBI, Accordingly, compensation cost of stock option granted is not required to be charged.
k) Sharing of Expenses
The common expenses shared with related parties are deducted from personnel cost and administrative and otherexpenses respectively.
l) Small Scale Industry Undertaking
The total amount due to Small Scale Industry Undertaking as at 31st March, 2002 is Rs./Thousands 3,774 (Nil). Thenames of the Small Scale Industry Undertaking to whom the Company owes any sum outstanding for more than 30days as at 31st March, 2002 are: Swadhinta Printers; Print House India Private Limited; Expert Print Services; TedcoPress Private Limited; A.P Sales Corporation; ACE Electronics; ACM Enterprises; Dinesh Enterprises; Japan Metallics;Lifon Industries; M.R. Corporation; Meeta Manufacturing Company; Meeta Music & Printers; Rainbow Traders; SagarikaAccoustronics Private Limited; Shruti Art Private Limited; Subhash Paper Box Industries.
m) Capital Work in Progress Includes
(i) Pre-operative expenses of Rs. / Thousands Nil (33,119) [refer note 6(o)]
(ii) Borrowing Costs Rs. / Thousands 1,134 (22,468) [refer note 6 (o)]
(iii) Capital Advances Rs. / Thousands 49,639 (32,220)
n) Capitalization of Direct to Operator Project
The Company’s Direct to Operator (DTO) project for uplinking and distribution of Television Channels in India hascommenced commercial operations on 24th February, 2002.
As per Accounting Standard –16 on “ Borrowing Costs” and Guidance Note on Expenditure during Construction periodissued by the Institute of Chartered Accountants of India, the borrowing costs and other expenses incurred up to thedate of set-up Rs. / Thousands 56,953 as are capitalized as part of the cost of fixed assets and expenses of Rs. /Thousands 36,283 from set up to commencement of operations are deferred. Borrowing costs incurred after the dateof set up are charged to revenue.
o) Statement of Pre-operative Expenses (included in capital work in progress)
(Rs./Thousands)
Particulars 2002 2001
Expenditure up to previous year 55,587 16,986Salaries, Allowances and Bonus 414 4,797Contribution to Provident and other funds 23 688Staff Welfare Expenses 29 468Repairs and Maintenance – Others 50 936Insurance 35 516Electricity/Water Charges 160 2,205Communication Expenses 182 3,572Printing and Stationery — 82Sundry Expenses 10 1,364Conveyance and Travelling Expenses 115 2,085Vehicle Expenses 1 161Legal, Professional and Consultancy Charges 100 1,820Financial Expenses 1,892 22,468Depreciation 54 620
Total 58,652 58,768
Less :Transfer to a subsidiary/Profit and Loss Account 565 (3,181)Capitalized/Deferred during the year 56,953 —
Total 1,134 55,587
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7. Deferred revenue expenditure includes
(a) Expenses of Rs./Thousands 1,70,550 (Nil) incurred on preparations made for raising funds are deferred andamortized over a period of three years.
(b) Expenditure (other than Borrowing Costs) of Rs./Thousands 36,283 (Nil) are deferred to be amortized over aperiod of 60 months from the date of commencement of commercial operations.
(c) Premium on prepayment of loans and upfront charges of Rs./Thousands 57,264 (Nil) are deferred and to beamortized over the period of the loan.
8. Subsidiary Companies
a) The company had started new ventures in the earlier years through its subsidiaries in India and abroad andfinanced their operations by way of advance against shares and interest free loans to its Indian subsidiaries inaddition to share capital and also undertaken continuing financial support to its Indian subsidiaries in view oflosses and erosion of Networth. Losses are not recognised by the company, however effect of these have beenrefected in consolidated financial statements of the Company.
b) The company has committed and undertaken to buy the Program Inventory from its’ Indian and Foreign subsidiarycompanies at book value of Rs./Thousands 361,612 (Nil) subject to the approval of Reserve Bank of India.
c) Plant and Machinery costing Rs./Thousands 8,703 (Nil) is used by its 100% subsidiary company.
9. Capital Commitments (Rs./Thousands)2002 2001
a) Estimated amount of contracts remaining to be executedon capital account, not provided for (net of advances) 15,134 56,327
b) Committed Investments (net of advances) (Refer Note 3) 604,862 —
10. Contingent Liabilities not provided for
(a) Corporate guarantees for loans granted to subsidiaries tothe extent of loans availed / outstanding Rs. 2,354,542 (3,212,972) 2,545,000 5,641,200
(b) Corporate guarantees to the others Nil 675,000
(c) Bank/counter guarantees and outstanding 109,278 30,155
(d) Claims against the Company not acknowledged as debts. 20,969 13,477
(e) Letters of credit 35,131 5,559
(f) Legal suits and claims filed against the Company. Unascertainable Unascertainable
11. Related Party Transactions
(i) List of Parties where control exists
Subsidiary Companies
a) Wholly Owned
Siticable Network Limited; Siticable Broadband Karnataka Private Limited; Programme Asia Trading CompanyLimited; El Zee Television Limited; Dakshin Media Limited; Kaveri Entertainment Limited; Zee InteractiveLearning Systems Limited; Econnect India Limited; Asia Today Limited; Hokushan Trading Limited; ExpandFast Holdings Limited; Expand Fast Holdings (Singapore) Pte. Limited; Zee Telefilms (International) Limited;Asia TV Limited – UK; Zee TV USA Inc.; Asia TV (USA) Limited; Asia TV (Africa) Limited; Zee TV SouthAfrica (Proprietary) Limited; Software Suppliers International Limited; Zee Multimedia Worldwide Limited,Mauritius; Zee Multimedia Worldwide Limited, BVI.
b) Others
Zee Turner India Private Limited (extent of holding 74%)
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(ii) Other Related parties with whom transactions have taken place during the year and balance outstanding as onthe last day of the year.
Associate Companies
Karma Network Limited
Other Related Parties
Agrani Convergence Limited; Ambience Advertising Private Limited; ASC Enterprises Limited; Ashok Goel; AsianSatellite Broadcasting Private Limited; Briggs Trading Company Private Limited; Buddha Films Limited; ChuruTrading Company Private Limited; Continental Drug Company Private Limited; Cutting Edge Holdings PrivateLimited; Cyquator Technologies Limited; Essel Propack Limited; E-City Entertainment (India) Private Limited; E-City Retail Private Limited; E-Cool Gaming Solution Private Limited; Essel Shyam Communication Private Limited;Essel International Limited; Ganjam Trading Company Private Limited; Intrex India Limited; Jawahar Goel; MediavestPrivate Limited; Metropolitan Leasing Limited; Prime Publishing Limited; Pan India Paryatan Limited; PlaywinInfravest Private Limited; Premier Finance and Trading Company Limited; Prajatma Trading Company PrivateLimited; Pratham Media Entertainment Private Limited; Rama Associates Limited; Rankey Investment and TradingCompany Limited; RKJ Woods Plantation Private Limited; Taleem Research Foundation; Tashi De Lek EntertainmentSolution Private Limited; Ultra Entertainment Private Limited; UTN Worldwide Limited; Veena Investments PrivateLimited; Widescreens Holdings Private Limited; Zee Link Pty Limited; Zee MGM Limited; Zee Sports Limited; ZeeNetwork Employees Welfare Trust.
Directors/Key Management Personnel
Mr. Subhash Chandra; Mr. Laxmi Narain Goel; Mr. Ashok Kurien; Mr. Sandeep Goyal; Mr. D. P. Naganand;Mr. R. K. Singh.
(iii) Transactions with Related Parties
(Rs./Thousands)
Particulars Subsidiaries Associates Other Related Key Manag-Parties ement Perso-
nnel
Sale, Services and Recoveries (Net) 2,663,186 — 134,009 —Purchase of Programs, Goods and Services 8,824 — 37,499 —Advertisement Income — — 13,745 —Commission Received 762,681 — 26,409 —Commission Paid 1,195 — 532Interest Received 290 — 731,937 1,087Interest Paid 44,952 — — —Dividend Received — — 1,968 —Purchase of Fixed Assets — — 3,319 —Sale of Fixed Assets — — 32,417 —Share Application Money Given 666 — — —Investments 230,074 — 10 —Loans, Advances and Deposits Given 733,282 — 5,291,937 15,000Loans and Advances Repayment received 350,769 — 5,514,814 —Borrowing Repaid 797,260Deposit Received 747,824 — — —Deposit Repaid 226,968 — — —Balances as on March 31, 2002Investments 35,366,596 500 1,510 —Share Application Money 160,985 — — —Debtors 2,627,685 — 25,876 —Loans/Advances/Deposits given 621,021 4,001 1,970,509 16,087Deposits Received 484,450 — — —Broadcasters/Principals pending Remittances 563,845 — 663 —Creditors — — 7,345 —GuaranteesCorporate Guarantees given 2,360,542 — — —Bank Guarantee given 2,250 — — —Guarantees received — — — 1,715,681
i) During the year, shares have been pledged by a related party for loan granted to the company; the samehas not been considered in the above disclosure requirements.
ii) Details of Remuneration to directors is disclosed in Note 6(g).
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12. Additional Information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1956 isas follows :
(a) The company is in the business of producing television programs and is not subject to any license hence licensedcapacity is not given. Further the nature of business of the company is such that the installed capacity is notquantifiable.
(b) Quantitative Information
The details of opening stock, acquisitions, sales and closing stock is as under:
Particulars 2002 2001Qty. (Nos.) (Rs./ Qty. (Nos.) (Rs. /
Thousands) Thousands)
Opening StockTelevision Programs/ Films / Rights — 954,397 — 636,676Audio Cassettes/ Compact Discs 1,583,480 7,186 958,460 9,175
Total 1,583,480 961,583 958,460 645,851
AcquisitionsTelevision Programs/ Films / Audio Rights — 189,292 — 485,321Audio Cassettes / Compact Discs 3,963,641 35,151 927,879 10,798Others – Electronic Devices 3,172 210,335 428 3,276
Total 3,966,813 434,778 928,307 499,395
SalesTelevision Programs/ Films / Rights — 2,855,295 — 3,073,804Audio Cassettes / Compact Discs 3,214,516 125,193 302,859 8,502Others – Electronic Devices 3,172 212,896 428 2,291
Broadcasting RevenueAdvertisement Income — 50,236 — —Subscription — 6,414 — —
Service RevenueCommission on Advertisement — 789,490 — 724,033Lease Rent — 24,457 — 14,675Others — 933 — 23,314
Total 3,217,688 4,064,914 303,287 3,846,619
Closing StockTelevision Programs/ Films / Rights — 1,206,938 — 954,397Audio Cassettes / Compact Discs 2,332,605 15,516 1,583,480 7,186
Total 2,332,605 1,222,454 1,583,480 961,583
(c) Consumption of Raw StockRaw Tapes 61,922 47,344 76,786 44,893Others — 54 — 72
Total 61,922 47,398 76,786 44,965
(d) Value of Imported and IndigenousRaw Stock Consumed % %Imported 23.24 11,013 25.10 11,284Indigenous 76.76 36,385 74.90 33,681
Total 100.00 47,398 100.00 44,965
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(e) Other Information
Particulars (Rs./Thousands)2002 2001
Earning in Foreign ExchangeFOB Value of Exports 2,658,955 2,989,967
Remittances in Foreign CurrencyDividend remitted 79,345 50,875No. of Shareholders (Nos) 1,200 1,127No. of Equity Shares held (Nos) 144,262,895 190,224,821
Expenditure in Foreign CurrencyTravelling 5,666 6,187Business Promotion 4,126 2,691Membership and Subscription 852 593Professional Fees 1161 —Others 6,882 —
CIF Value of ImportsCapital Equipment 47,016 124,006Electronic Devices 196,937 —Raw Stock 11,013 9,486
13. Segmental Reporting
The Financial Statements of the company contain both the consolidated financial statements as well as the separatefinancial statements of the parent company. Hence, the company has presented the segmental information on the basisof the consolidated financial statements as permitted by Accounting Standard – 17.
14. Other Information
a) During the year there has been an inquiry by the Department of Company Affairs (DCA), under which certainirregularities had been noticed. The Company had filed compounding applications, which are pending before theDCA and DCA initiated prosecution on certain points. The proceedings are pending and liability is not ascertainable.
b) In the opinion of the Board, the current assets, loans and advances are approximately of the value stated ifrealized in the ordinary course of business and provision for all the known liabilities has been made in theaccounts.
c) Debit and Credit balances are subject to confirmation and reconciliation if any.
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I. REGISTRATION DETAILS
Registration No. State Code
Date Month YearBalance Sheet Date
II. CAPITAL RAISED DURING THE YEAR (AMOUNT RS./THOUSANDS)Public Issue Rights Issue
Bonus Issue Preferential Allotment
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT RS./THOUSANDS)Total Liabilities Total Assets
SOURCES OF FUNDSPaid-up Capital Reserves and Surplus
Share Application Money Secured Loans
Unsecured Loans
APPLICATION OF FUNDSNet Fixed Assets Investments
Net Current Assets Miscellaneous Expenditure
IV. PERFORMANCE OF COMPANY (AMOUNT RS./THOUSANDS)Turnover* Total Expenditure
(*Includes other income)
+ – Profit/(Loss) Before Tax + – Profit/(Loss) After Tax
Earnings Per Share (weighted) (Rs.) Dividend Rate (%)
V. GENERIC NAMES OF PRINCIPAL PRODUCTS OF THE COMPANY (AS PER MONETARY TERMS)
Item Code No. (ITC Code)
Product Description
3 1 0 3 2 0 0 2
2 8 7 6 7 1 1
N I L N I L
N I L N I L
4 4 7 0 7 6 9 6 4 4 7 0 7 6 9 6
4 1 2 4 3 8 4 0 1 3 9 6 7 6
N I L 2 4 4 0 7 7 9
1 2 5 6 3 0 7 3 5 3 6 8 8 0 6
7 8 7 3 1 2 3 6 4 9 8
1 5 4 3 4 5 0
4 8 3 2 1 4 8 3 4 8 8 1 0 0
1 3 4 4 0 4 8 9 7 2 6 1 8
5 51 . 9 3
� �
8 5 2 4 9 0 0 1
R E C O R D E D V I D E O C A S S E T T E S
For and on behalf of the Board
Sandeep Goyal Whole Time DirectorAshok Kurien DirectorNemi Chand Jain Director
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
Balance Sheet Abstractand Company’s General Business Profile
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(Rs./Thousands)
2002 2001
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before taxation, and extraordinary items 1,344,048 1,622,566
Adjustments for :
Depreciation 67,383 42,695
Share issue expenses written off 3,078 3,078
Prior Period expenses (32,204) (3,074)
Deferred Revenue Expenditure written off 64,515 —
Provision for doubtful debts and advances 29,148 12,475
(Profit)/Loss on sale of fixed assets 1,021 634
(Profit)/Loss on sale of Investments — 1,475
Exchange adjustments (net) 42,447 5,388
Interest expense 442,086 152,764
Dividend income (1,968) (1,230)
Interest income (746,366) (490,018)
Operating profit before working capital changes 1,213,188 1,346,753
Adjustments for :
Increase in trade and other receivables (842,172) (715,391)
Increase in inventories (167,237) (455,613)
Increase/(Decrease) in trade and other payables 8,377 856,132
Cash Generated from Operations 212,156 1,031,881
Direct taxes paid - For current year (275,550) (262,869)- For earlier years (45,000) (347,508)
Net Cash flow from Operating Activities (108,394) 421,504
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (297,958) (561,765)
Purchase of Investments (230,084) (1,041,001)
Share Application money paid (634,186) (253,998)
Loans to subsidiaries (599,417) (103,037)
Loans repaid by subsidiaries 157,945 246,445
Loans to others (7,361,669) (9,541,084)
Loans repaid by others 7,430,936 6,961,420
Dividend received 1,968 1,230
Sale of Investments — 229,001
Sale of fixed assets 51,750 2,273
Interest income 748,900 484,756
Net Cash flow from Investing Activities (731,815) (3,575,760)
for the year ending March 31,
Cash Flow Statement
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(Rs./Thousands)
2002 2001
C. CASH FLOW FROM FINANCING ACTIVITIES
Dividend paid (including dividend tax) (247,176) (196,024)
Interest paid (397,784) (136,800)
Proceeds from issuance of share capital including share premium — 3,510,004
Calls in arrears received — 2
Proceeds from short term borrowings 312,778 (254,277)
Proceeds from long term borrowings 3,452,324 2,138,143
Repayments of long term borrowings (3,015,027) (183,346)
Principal payment under finance leases (2,346) —
Increase in miscellaneous expenditure (247,365) —
Net Cash flow from Financing Activities (144,596) 4,877,702
Net Cash Flow during the year (A+B+C) (984,805) 1,723,446
Cash and Cash Equivalents at the beginning of the year 2,254,327 530,881
Cash and Cash Equivalents at the end of the year 1,269,522 2,254,327
Notes to the Cash Flow Statement for the year ended 31st March, 20021. Previous year’s figures have been regrouped, recast wherever necessary.
For and on behalf of the Board
Sandeep Goyal Whole Time DirectorAshok Kurien DirectorNemi Chand Jain Director
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
AUDITORS’ CERTIFICATE TO CASH FLOW
We have examined the above Cash Flow Statement of Zee Telefilms Limited for the year ended 31st March, 2002. TheStatement has been prepared by the Company in accordance with the requirements of listing agreement clause 32 withBombay Stock Exchange and is based on and is in agreement with the corresponding Profit and Loss Account and BalanceSheet of the Company covered by our report dated 24th September, 2002 to the members of the Company.
Mohan BhandariPartner
Mumbai For MGB & Co
24th September, 2002 Chartered Accountants
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Year Ending March 31 Consolidated Stand-alone
2002 2002 2001 2000 1999 1998*
Revenue Account
Income from Operations 10,762 4,065 3,847 2,870 2,262 1,734
Total Expenses 7,720 2,835 2,481 1,829 1,411 1,144
Operating Profit 3,042 1,230 1,366 1,041 851 590
% to Income from Operations 28% 30% 36% 36% 38% 34%
Other Income 792 767 511 101 55 75
PBIDT 3,834 1,997 1,877 1,142 906 665
Interest 808 585 211 84 81 64
Depreciation 215 68 43 25 18 15
Profit Before Tax 2,811 1,344 1,623 1,033 807 586
Taxation 865 371 238 210 196 149
Profit After Tax for the Year 1,946 973 1,385 823 611 437
% to Total Income 17% 20% 32% 28% 26% 24%
Dividend 227 227 227 161 103 103
Dividend Rate 55% 55% 55% 55% 55% 55%
Capital Account
Share Capital – Equity 412 412 412 409 187 187
Share Application Money — — — 390 — —
Share Capital – Preference — — — — — 30
Reserves & Surplus 39,435 40,140 39,684 35,225 1,731 1,235
Deferred Tax Balances 63 171 — — — —
Minority Interest 3 — — — — —
Loan Funds 8,491 3,984 3,237 1,530 561 426
Capital Employed 48,404 44,707 43,333 37,554 2,479 1,878
Fixed Assets 35,398 1,256 1,102 586 312 266
Investments 125 35,369 35,139 34,328 571 480
Net Current Assets 12,456 7,873 7,086 2,630 1,583 1,116
Miscellaneous Expenditure 425 209 6 10 13 16
Capital Deployed 48,404 44,707 43,333 37,554 2,479 1,878
Closing market price per share of Re.1 168 168 122 1,022 99 27
Market Capitalisation 69,218 69,218 50,326 417,524 18,418 5,093
Note : * Figures for 1998 are unaudited net consolidated results (inclusive of the erstwhile ASSL). This is to allowa meaningful comparison. Ratios for 1998 and 1999 have been adjusted for share split.
Last Five Years Financial Highlights
(Rs. in million)
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Year Ending March 31 Consolidated Stand-alone
2002 2002 2001 2000* 1999 1998
Financial Performance
Export Sales/Income from Operations (%) — 64.7 77.7 71.1 67.1 60.7
Advertisement Income/Income from Operations (%) 61.1 1.2 — — — —
Subscription Income/Income from Operations (%) 29.2 0.2 — — — —
Operating Profit/Income from Operations (%) 28.3 30.3 35.4 36.2 37.6 34.0
Other Income/Total Income (%) 6.9 15.9 11.7 3.4 2.4 4.2
Programming Cost/Income from Operations (%) 19.1 42.1 46.9 45.5 46.7 45.2
Personnel Cost/Income from Operations (%) 7.2 8.0 6.5 5.4 4.7 5.3
Selling and Administration Expenses/Income from Operations (%) 23.3 14.0 11.1 12.9 11.0 15.5
Total Operating Cost/Income from Operations (%) 71.7 69.7 64.6 63.8 62.4 66.0
Interest Cost/Income from Operations (%) 7.5 14.4 5.5 2.9 3.6 3.7
Tax/Income from Operations (%) 8.0 9.1 6.2 7.3 8.6 8.6
PAT/Total Income (%) 16.8 20.1 31.7 27.7 26.4 24.2
Tax/PBT (%) 30.8 27.6 14.7 20.4 24.2 25.4
Dividend Payout/PAT (%) 11.7 23.3 16.4 19.6 16.8 23.5
Dividend Payout/Effective Networth + (%) 1.8 1.9 2.0 2.2 5.4 7.3
Balance Sheet +
Debt-Equity ratio (Total loans/Eff. Networth) (%) 67.1 34.0 28.2 20.7 29.4 30.3
Current ratio (Current assets/Current liabilities) (x) 4.5 4.2 4.1 3.1 3.0 2.1
Capital Output Ratio (Inc. from Ops./Eff.Capital employed) (x) 0.5 0.3 0.3 0.3 0.9 0.9
Fixed assets Turnover (Inc. fromOps./Fixed assets) ~ (x) 2.9 3.2 3.5 4.9 7.3 6.5
Cash & cash equivalents/TotalEff. capital employed (%) 8.9 8.0 15.3 5.9 7.2 26.3
RONW (PAT/Eff. Networth) (%) 15.4 8.3 12.1 11.1 32.1 31.1
ROCE (PBIT/Eff. Capital employed) (%) 17.1 12.2 12.5 12.5 35.8 34.6
Per Share Data #
Revenue per share (Rs.) 28.0 11.7 10.6 10.2 12.4 9.7
Dividend per share (Rs.) 0.55 0.55 0.55 0.55 0.55 0.55
Indebtedness per share (Rs.) 20.6 9.7 7.9 5.2 3.0 2.3
Book value per share (Rs.) 30.7 28.4 27.8 24.0 10.2 7.5
Earnings per share (after priorperiod adjustments) (Rs.) 4.3
Price/EPS Ratio (Share price as of March 31,) (x) 38.9
Notes :* Excluding impact of one time sale of film library to ATL for Rs. 1890 millions and profit thereon of Rs.1851 millions.+ The calculation of Effective Capital Employed and Effective Networth excludes the impact of increase in Share Premium
arising out of issue of shares for consideration other than cash (towards acquisition of ZMWL, PATCO, SITI andWinterheath Company Limited under share SWAP deal of Rs. 26773 millions) and impact of profit on one time saleof film library to ATL of Rs. 1851 millions.
~ Fixed Assets for the consolidated entity excludes Goodwill on consolidation of Rs. 31726 millions.# Annualised.
Performance Ratios – An Analysis
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to the Board of Directors of Zee Telefilms Limited on the Consolidated Financial Statements of Zee Telefilms Limited and its Subsidiaries
Auditors’ Report
We have examined the attached Consolidate Balance Sheet
of Zee Telefilms Limited and its subsidiaries as at 31st March,
2002 and also the Consolidated Profit and Loss Account for
the year then ended.
These financials statements are the responsibility of the
management of Zee Telefilms Limited. Our responsibility is
to express an opinion on these financial statements based
on our audit. We conducted our audit in accordance with
generally accepted auditing standards in India. These
standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statement
are prepared, in all the material respect, in accordance with
and identified financial reporting framework and are free of
material misstatements. An audit includes examining on test
basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statements. We believe that our audit provide a reasonable
basis for our opinion.
1. We did not audit the financial statements of certain
subsidiaries whose financial statement shows total
assets of Rs./Thousands 22,227,746/- as at
31st March 2002 and total revenue of
Rs./Thousands 9,963,576/-for the year. These
financial statements have been audited by other
auditors whose report has been furnished to us
and our opinion, in so far it relates to the amounts
included in respect of those subsidiaries is based
solely on the report of the other auditors.
2. We report that the consolidated financial statements
have been prepared by the company in accordance
with the requirements of the accounting standard
(AS) 21, “Consolidated financial statements”, issued
by the Institute of Chartered Accountants of India
subject to:
(i) Note no. 2 (c) regarding non adjustments for
inconsistencies in the accounting policies and
Note no. 2 (d) regarding amortization of
deferred revenue expenditures in the accounts
of one of the subsidiary, the impact thereof
on the profit is not quantifiable.
(ii) The company could not prepare the
consolidated cash flow statement as the
consolidated financial statements for the
previous year are not available, this being the
first year of consolidation.
On the basis of information and explanations
given to us, and on consideration of the separate
audit report on individual audited financial
statements of Zee Telefilms Limited and its
subsidiaries and subject to (2) above, we are of
the opinion that:
a) The Consolidated Balance Sheet gives true
and fair views of the consolidated state of
affairs of Zee Telefilms Limited and its
subsidiaries as at 31st March, 2002: and
b) The Consolidated Profit and Loss Account
gives a true and fair view of the consolidated
result of operations of Zee Telefilms Limited
and its subsidiaries for the year then ended.
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountant
Mumbai
24th September, 2002
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(Rs. ’000)
Schedule 2002SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital 1 412,438Reserves & Surplus 2 39,435,313
39,847,751SHARE APPLICATION MONEY 234
MINORITY INTEREST 3,019
DEFERRED TAX BALANCES 3 62,654
LOAN FUNDSSecured Loans 4 5,821,379Unsecured Loans 5 2,669,236
8,490,615
TOTAL 48,404,273
APPLICATION OF FUNDSFIXED ASSETS 6Gross Block (at cost ) 34,676,087Less : Depreciation Up-to-date (763,429)
Net Block 33,912,658Capital Work-in-Progress 1,484,990
35,397,648
INVESTMENTS 7 124,866
CURRENT ASSETS, LOANS AND ADVANCES 8Inventories 2,601,037Sundry Debtors 6,289,281Cash & Bank Balances 1,885,535Loans & Advances 5,214,142
15,989,995Less :CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities 9 2,672,339Provisions 10 861,494
3,533,833
NET CURRENT ASSETS 12,456,162
MISCELLANEOUS EXPENDITURE 11 425,597(to the extent not written off or adjusted)
TOTAL 48,404,273
Significant Accounting Policies and Notes to Accounts 19
as at March 31,
Consolidated Balance Sheet
As per our attached report of even date For and on behalf of the Board
Mohan Bhandari Sandeep Goyal Whole Time DirectorPartner Ashok Kurien DirectorFor MGB & Co Nemi Chand Jain DirectorChartered Accountants
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
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(Rs. ’000)
Schedule 2002INCOME
Sales & Services 12 10,762,393
Other Income 13 792,064
TOTAL 11,554,457
EXPENDITURE
Operating Cost 14 4,435,575
Personnel Cost 15 777,717
Administrative and Other Expenses 16 1,065,425
Selling and Distribution Expenses 17 1,441,663
TOTAL 7,720,380
OPERATING PROFIT 3,834,077
Financial Expenses 18 807,547
Depreciation 215,055
PROFIT BEFORE TAX 2,811,475
Less : Provision for Taxation [Includes Rs./Thousand 286 for Wealth tax]
Current 888,074
Deferred (22,614)
PROFIT AFTER TAX FOR THE YEAR 1,946,015
Prior period adjustments 22,122
Provision for Taxation for earlier years 145,032
NET PROFIT AFTER TAX 1,778,861
Minority Interest in Profits 314
Add : Excess provision – Dividend (earlier year) 149
Balance brought forward 1,420,553
Amount Available for Appropriation 3,199,249
APPROPRIATIONS
Proposed Dividend 226,878
General Reserve 300,000
Balance carried to Balance Sheet 2,672,371
TOTAL 3,199,249
Basic and Diluted Earnings Per Share 4.31
(On distributable profits on shares outstanding) (Face Value Re.1)
Number of outstanding shares 412,505,012
Significant Accounting Policies and Notes to Accounts 19
for the year ending March 31,
Consolidated Profit and Loss Account
As per our attached report of even date For and on behalf of the Board
Mohan Bhandari Sandeep Goyal Whole Time DirectorPartner Ashok Kurien DirectorFor MGB & Co Nemi Chand Jain DirectorChartered Accountants
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
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as at March 31,
Schedules to the Consolidated Balance Sheet
(Rs. ’000)
2002SCHEDULE 1SHARE CAPITALAUTHORISED50,00,00,000 Equity Shares of Re.1/- each 500,00025,00,000 Cumulative Redeemable Preference Shares of Rs.100/- each 250,000
750,000
ISSUED, SUBSCRIBED AND PAID UP41,25,05,012 Equity Shares of Re.1/- each fully paid up 412,505Less : Calls in arrears (others) (67)
TOTAL 412,438
SCHEDULE 2RESERVES & SURPLUSCapital Redemption Reserve 70,000Share Premium(i) On shares issued for cash 8,322,736(ii) On shares issued for consideration other than cash 26,773,063
35,095,799
General ReserveOpening Balance 1,300,000Less: Deferred Tax expense for earlier years (91,706)Appropriated during the year 300,000
1,508,294
Foreign Currency Translation Reserve 88,849Profit & Loss Account 2,672,371
TOTAL 39,435,313
SCHEDULE 3DEFERRED TAX BALANCESDeferred Tax Assets (294,682)Deferred Tax Liabilities 357,336
TOTAL 62,654
SCHEDULE 4SECURED LOANSWorking Capital Finance from Banks 618,352Term Loan from Financial Institution/Banks 5,123,434Hire Purchase & Lease Finance 15,144Interest Accrued and Due 64,449
TOTAL 5,821,379
SCHEDULE 5UNSECURED LOANSShort Term Loans– From Banks 1,300,000– From Finance company 200,000Loan from related party 1,094,638Long term trade deposits 24,897Interest Accrued and due 49,701
TOTAL 2,669,236
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(Rs. ’000)2002
SCHEDULE 7INVESTMENTSLong Term (at cost)Quoted - Non-Trade3,60,000 Equity Shares of Rs.10/- each of Essel Propack Limited 1,500[(Market Value Rs./Thousand 99,756/-]Quoted-Trade13,21,200 Equity Shares of Rs.10/- each of Aplab Ltd. 118,908[(Market Value Rs./Thousand 18,496/-]Unquoted-Trade50,000 Equity Shares of Rs. 10/- each of Karma Network Limited 500480 Equity Shares of Rs.100/- each of Master Ads Private Limited 4817,000 Equity Shares of Rs. 10/- each Dakshin Communication Private Limited 3,1676,600 Equity Shares of Rs.10/- each of Centre Channel Private Limited 503Unquoted – Non-Trade1,000 Equity Shares of Rs. 10/- each of Ecool Gaming Solutions Private Limited 10200 Floating Rate Interest Bonds of State Bank of India of Rs. 1,000/- each fully 200National Savings Certificate 30All above shares & securities are fully paid up
TOTAL 124,866
SCHEDULE 8CURRENT ASSETS, LOANS & ADVANCES
A. CURRENT ASSETS(a) Inventories (as taken, valued and certified by the Management)
(valued at lower of cost or estimated net realisable value)Raw Stocks - Tapes, cassettes etc 6,891Stores and Spares 112,446Under Production - TV Programmes/Films etc. 136,007Stock-in-Trade - TV Programmes/Films etc. 2,345,693
2,601,037
SCHEDULE 6FIXED ASSETS (At cost) (Rs. ’000)
Description Gross Block Depreciation Net Block
As at Additions Deductions As at As at For the Deductions Upto As at1.4.2001 31.3.2002 1.4.2001 year 31.3.2002 31.3.2002
a) IntangiblesGoodwill- On consolidiation(c) — 31,726,400 — 31,726,400 — — — — 31,726,400Goodwill- On acquistions 4,798 21,529 — 26,327 2,439 2,633 — 5,072 21,255Software 33,138 15,570 3,377 45,331 8,195 10,044 981 17,258 28,073
b) Tangibles — — — — — — — — —Land (Leasehold) 6,893 — — 6,893 320 71 — 391 6,502Building 180,492 20,085 5,332 195,245 17,195 7,860 1,936 23,119 172,126Plant and Machinery 1,829,025 498,048 78,715 2,248,358 392,938 167,694 6,480 554,152 1,694,206Equipments 248,862 58,246 16,268 290,840 86,976 34,374 3,875 117,475 173,365Furniture and fixtures 68,307 19,880 4,365 83,822 28,579 6,520 1,392 33,707 50,115Vehicles 42,212 20,949 10,290 52,871 13,609 5,017 6,371 12,255 40,616
Total 2,413,727 32,380,707 118,347 34,676,087 550,251 234,213 21,035 763,429 33,912,658
Notes :Depreciation for the year includes :(a) Rs. / Thousand 19,087 transferred to pre-operative expenses / deferred revenue expenses.(b) Rs. / Thousand 71 pertaining to earlier years.(c) Arising on consolidation of accounts of ZTL with its subsdiairies and subsidiary with sub-subsidiaries.
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(Rs. ’000)
2002SCHEDULE 8 (Contd.)
(b) Sundry Debtors(Unsecured and Considered Good unless otherwise stated)Outstanding for more than 6 months 3,076,669Other Debts 3,870,927
6,947,596
Less: Provision for Doubtful Debts (658,315)
6,289,281
(c) Cash & Bank BalancesCash in hand 17,012Cheques and drafts in hand/in transit 424,747Balances with Banks in Current Accounts 1,383,686Balances with Banks in Deposit Accounts 60,090
1,885,535
B. LOANS & ADVANCES(Unsecured and considered good)Loans 3,476,270Advances (Recoverable in cash or in kind or for value to be received)Other Advances 1,456,064Less : Provision for Doubtful Advances (59,560)
1,396,504Deposits 341,368
5,214,142
TOTAL 15,989,995
SCHEDULE 9CURRENT LIABILITIESSundry Creditors For Goods 883,512
For Expense and Other liabilities 1,485,085Trade Advances/Deposits received 207,089Due to Broadcasters/Principals (Pending Remittance) 60,277Unclaimed Dividend 7,812Interest accrued but not due 28,564
TOTAL 2,672,339
SCHEDULE 10PROVISIONSFor Dividend 226,878For taxation (net of advances) 576,974For retirement benefits 57,642
TOTAL 861,494
SCHEDULE 11MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Deffered Revenue Expenditure 414,855Share Issue Expenses 9,657Preliminary Expenses 1,085
TOTAL 425,597
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(Rs. ’000)
2002SCHEDULE 12SALES & SERVICESServices – Advertisement 6,577,876
– Subscription 3,138,955– Commission on Advertisement 26,809– Commission on Subscription 30,158– Course Fees and Materials 274,539– Transmission Services 62,421– Others 50,467
Sales – Products (programmes, films, electronic devices etc.) 601,168
TOTAL 10,762,393
SCHEDULE 13OTHER INCOMEDividend 1,968Interest 753,054Miscellaneous Income 37,042
TOTAL 792,064
SCHEDULE 14OPERATING COSTPROGRAMMING COSTOPENING STOCK
Raw Stocks – Tapes, cassettes etc. 8,373Under Production – TV Programmes/Films etc. 232,520Stock in Trade – TV Programmes/Films etc. 1,913,240
2,154,133ADD: PRODUCTION / ACQUISITION COST
Raw Stocks – Tapes, cassettes etc. 63,589Productions – TV Programmes/Films etc. 1,636,911Acquisitions – Audio Tapes 35,151
– TV Programmes/Films etc. 655,357
2,391,008LESS: CLOSING STOCK
Raw Stocks – Tapes, cassettes etc. 6,891Under Production – TV Programmes/Films etc. 136,007Stock in Trade – TV Programmes/Films etc. 2,345,693
2,488,591
2,056,550OTHERSPurchases – Others 210,335Subscriber Management Services Cost and Commission 1,047,251Transmission Cost 686,371Education Center Operating Expenses 226,325Other Direct Operating Expenses 208,743
TOTAL 4,435,575
for year ending March 31,
Schedules to the Consolidated Profit and Loss Account
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(Rs. ’000)
2002SCHEDULE 15PERSONNEL COSTSalaries, Allowances & Bonus 688,336Contribution to PF & Other Funds 47,920Staff Welfare Expenses 41,461
TOTAL 777,717
SCHEDULE 16ADMINISTRATIVE AND OTHER EXPENSESRent 81,863Lease Rentals 14,578Rates and Taxes 11,838Repairs & Maintenance – Building 1,232Repairs & Maintenance – Plant & Machinery 7,791Repairs & Maintenance – Others 32,778Insurance 15,450Electricity/Water Charges 33,625Communication Expenses 107,440Printing & Stationary 31,359Sundry Expenses 82,280Conveyance and Travelling Expenses 95,875Vehicle Expenses 21,116Legal, Professional & Consultancy Charges 101,333Auditors’ Remuneration 23,208Loss on Sale of Fixed Assets 3,469Provision for doubtful debts & advances 211,191Bad debts written off 38,383Deferred Revenue Expenses written off 146,498Fixed Assets shortage written off 4,118
TOTAL 1,065,425
SCHEDULE 17SELLING AND DISTRIBUTION EXPENSESAdvertisement & Publicity Expenses 238,996Discounts and Rebates 39,724Commission on Sales 1,008,115Business Promotion Expenses 154,828
TOTAL 1,441,663
SCHEDULE 18FINANCIAL EXPENSESInterest on – Debentures 30,729
– Fixed Loan 594,505– Others 2,653
Discounting & Financing Expenses 147,979Foreign Exchange Loss 31,681
TOTAL 807,547
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Schedule 19 - Notes to Consolidated Financial Statements
1. Background and description of Business :
Zee Telefilms Limited (“ZTL”) along with its subsidiaries (collectively known as the “Company” or “Zee”) is an integratedmedia company engaged in content production and aggregation for distribution through satellite, cable and internet.
ZTL’s principal business comprises developing producing and procuring television programming and films contentand facilitation of advertisement booking from India. It has also started broadcasting Indian Regional languageprogrammes on satellite television channels uplinked from India. Revenue streams for the company comprise ofadvertisement revenue, subscription fees, sale of content and commission income. Asia Today Ltd. (ATL), ExpandFast Holding Ltd. (EFHL), Zee TV USA Inc., Asia TV (Africa) Ltd., Asia TV Ltd., UK are engaged in delivering contentto Indian and South Asian communities in USA, South Africa, India, South Asia and European countries. Revenuestream for these companies consist of advertisement and subscription revenue. Zee Turner Private Limited is a jointventure with Turner International (India) Limited, engaged in distribution of pay TV channels to Indian homes throughcable operators and delivers satellite and internet content on cable to Indian homes. Siticable is a cable networkcompany, networked cable operators in around 40 major cities through out India and distributing TV Channels andother programs and internet on cable.
Zee Interactive Learning Systems Limited is engaged in distribution of software learning products, imparting servicesin information technology education and IT consulting.
2. Basis of Consolidation
(a) The consolidated financial statements of ZTL and its majority owned domestic and foreign subsidiaries areprepared under historical cost convention in accordance with generally accepted accounting principles applicablein India and the Accounting Standard 21 on “Consolidation of financial statements” issued by the Institute ofChartered Accountants of India, in the same manner as ZTL for its separate financial statements, to the extentpossible, by figures recasted, rearranged or regrouped wherever considered necessary.
The accompanying consolidated financial statements include the accounts of the parent company and the followingsubsidiaries, which includes the companies under its direct or indirect control. The results of subsidiaries acquiredor disposed of during the financial year are included in or excluded from the consolidated income statement fromthe date of their acquisition or disposal.
Name of the Subsidiaries Country of Incorporation Extent of holding %
Dakshin Media Limited India 100Econnect India Limited India 100El Zee Television Limited India 100Kaveri Entertainment Limited India 100Programme Asia Trading Company Limited India 100Siti Cable Broadband South Private Limited India 100Siti Cable Network Limited India 100Zee Interactive Learning Systems Limited India 100Zee Turner Private Limited India 74Cable Broadcasting Network (Partnership firm) India 51Expand Fast Holdings Limited British Virgin Islands 100Winterheath Company Limited British Virgin Islands 100Zee Multimedia Worldwide Limited British Virgin Islands 100Zee Telefilms (International) Limited British Virgin Islands 100Asia Today Limited Mauritius 100Asia TV (USA) Limited Mauritius 100Asia TV (Africa) Limited Mauritius 100Software Supplies International Limited Mauritius 100Zee Multimedia Worldwide (Mauritius) Limited Mauritius 100Expand Fast Holding (Singapore) Pte Limited Singapore 100Asia TV Limited United Kingdom 100Zee TV USA Inc., United States of America 100Ambience Marketing Inc., (*) United States of America 100Zee TV South Africa (Proprietary) Limited South Africa 100Asia TV (Netherlands) Limited Netherlands 100Hokushan Trading Company Limited (**) Hong Kong 100
(*) Being dissolved on 28th March 2002.(**) Being hived off as on 31st March 2002.
Notes to Consolidated Financial Statements
84
(b) The consolidation of the financial statements of the parent company and its subsidiaries is done on line-by-linebasis by adding together like items of assets, liabilities, income and expenses. All significant intra-group balancesand intra-group transactions and unrealized profits are eliminated on consolidation.
(c) The parent company and its Indian subsidiaries maintains its records and prepares its financial statements underthe historical cost convention, in accordance with Generally Accepted Accounting Principles in India while theforeign subsidiaries maintains its records and prepare their financial statements in conformity with GenerallyAccepted Accounting Principles prevalent in their countries of domicile. For inconsistencies in accountingpolicies no adjustments are made in these consolidated financial statements, however significantinconsistencies are disclosed wherever applicable.
(d) In the seperate audited financial statements of Econnect India Limited, the auditor has expressed theirinability to comment on the appropriateness of the amortization relating to deferred revenue expendituresamounting to Rs./Thousands 43,297/- considering their present level of operations. This item is consideredin consolidated accounts without any adjustments.
(e) Minority interest in subsidiaries represents minority shareholder’s proportionate share of the net assets and thenet income of Zee’s majority owned subsidiaries.
(f) As this is the first year of adoption of Accounting Standard – AS 21 on “Consolidated financial statements”,the comparable figure for the previous year and the movement in shares of minority interest have notbeen presented. It is also not practical to present consolidated cash flow statement since the consolidatedfigures of previous year were not compiled as the opening balances which are relevant for compilationof this year’s cash flow are not available.
3. Use of Estimates
In preparing the Consolidated Financial Statements, reasonable, prudent judgments and estimates have been madethat may affect the reported amounts of assets and liabilities, and contingent liabilities on the Balance Sheet date, aswell as income and expenses during the period under review. Assets and liabilities are recognized in the Balance Sheetwhen it is probable that a future economic benefit will flow to the group or an outflow of resources embodying economicbenefits will result.
4. Fixed Assets
(a) Intangible Assets
(i) Intangible assets comprise mainly goodwill arising from consolidation, represents the excess of cost over itsinvestments in the subsidiary companies.
(ii) Other intangible assets capitalized are software costs, portals, etc.
(b) Tangible Fixed Assets
(i) Tangible fixed assets are stated at historical cost less accumulated depreciation. Cost means cost of acquisition/ installation and includes pre-operational expenses including borrowing cost.
(ii) Capital work in progress is stated at amount spent/incurred on capital projects up to the date of BalanceSheet.
(iii) Assets acquired under Finance Lease are capitalized and the corresponding lease liability is recorded at anamount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred inconnection with the specific leasing activities directly attributable to activities performed by the company areincluded as part of the amount recognized as an asset under the lease. Assets acquired under finance leaseprior to 1st April, 2001 by Indian companies are charged to Profit and Loss Account as permitted undermandatory Accounting Standard AS-19 “Leases” issued by ICAI.
5. Depreciation
(a) Depreciation is provided on tangible fixed assets other than land, including leased assets, at the rates adoptedin the accounts of respective subsidiaries on straight-line (except below (b)) basis from the time they are put touse, so as to write off their costs over estimated useful lives of the assets. The aggregate gross block ofRs./ Thousand 311,570 of foreign subsidiaries have charged depreciation at the rates other than thoseprescribed under Schedule XIV to the Companies Act, 1956.
(b) Net block of assets includes Rs./Thousand 981 depreciated at written down value method.
(c) Leasehold land and improvements are amortized over the lease period.
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(d) No part of goodwill arising on consolidation is amortized whereas goodwill arising on acquisition is amortized overa period of ten years and Rs./Thousand 2,633 amortized and charged to Profit and Loss Account during the year.
(e) Depreciation on other intangible assets are amortized over the economic useful life of the assets as estimatedby the management.
6. Inventories
Inventories of Raw Stock (Tapes and Cassettes etc.), Television Programs / Films under production, Stock in Trade(Television Programs, Films and Rights, Audio Cassettes, Electronic Devices, Course Materials etc.) are valued at lowerof cost or estimated net realizable value.
Cost
Cost is taken on First in First Out (FIFO) or Specific Identification basis and in case of Films / Television Programs,if with multiple rights, cost is allocated to each right as per management estimate.
Net Realizable Value
Costs are amortized / expensed as under and net realizable value is as estimated by management at unamortized cost.
Content - Trade
In case of Television programs / films etc. acquired or produced by the company for sale
(a) Cost of programs like News, Current Affairs, Chat shows, Events etc. are fully expensed on its first sale;
(b) Programs having re-exploitable value are expensed 90% on first sale and 10% expensed on its subsequent sale;
(c) In case of the film produced / acquired by the company, cost of each right is expensed fully on first sale;
(d) Other Programs, Film Rights and where limited telecast rights are sold are valued at unamortized cost.
Content – Broadcasting – Amortization
In case of Television programs / films, acquired or produced and used as a broadcaster for telecasting on its ownedtelevision channels:
(a) Cost of programs like News, Current Affairs, Chat shows, Events etc. are fully expensed on first telecast.
(b) The cost of the program rights (including unamortized cost of content from trade) used for broadcasting areamortized on straight line basis from its first telecast, estimated economic useful life of 36 months or licenseperiod whichever is shorter. However, in case of certain subsidiaries the programs amounting to Rs./Thousand236,418 are amortized over a shorter of license period or 36-60 months from the date of purchases.
(c) The cost of telecast rights of film is amortized on straight-line basis taking its estimated economic useful life of36-60 months or license period whichever is shorter, from its first telecast, while in case of certain subsidiariesthe films amounting to Rs./Thousand 552,861 are amortized over a shorter of license period or 36-60months from the date of purchase.
(d) One of the subsidiary has changed the inventory policy for rationalizing and realigning the accounting policy ofinventory with the parent company. The impact of change in policy resulted in profit for the year is higherby Rs./Thousand 15,339/-.
Content - Audio Rights / Recorded Cassettes, Compact Discs etc.
(a) In the case of Copyrights of Audio Titles acquired and Recorded Cassettes, Compact Discs produced for sale;
(i) Film based rights: 50% of cost expensed on audio release and balance after six months of film release orwhen cost is recouped, whichever is earlier.
(ii) Non-Film based rights: 50% of cost expensed on audio release and balance after six months of release orwhen cost is recouped, whichever is earlier.
(b) Recorded Audio Cassettes, Compact Discs: Cost means cost of production excluding cost of Audio Rights.
7. Revenue Recognition
(a) Advertisement revenues gross of agency commission is recognized upon the telecast of advertisements.
(b) Subscription revenues are recognized on a time basis on the provision of television broadcasting to subscribers.Subscriptions paid in advance are recognized as deferred income in the Balance Sheet.
(c) Sales are recognized on despatch of goods to customers.
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(d) For services, revenues are recognized when the service is completed.
(e) Television programs, production and acquisitions costs are net of recoveries.
(f) Lease rentals are recognized as per the terms of lease agreements.
(g) The education segment of the company is engaged in distribution of software learning products, imparting servicesin information technology education and IT consulting services in association with several business partners. Thefranchiser is under the obligation to pay the lump sum franchisee fees and royalty at fixed percentage of coursefees.
(i) Course fees are recognized over the duration of course.
(ii) The company recognizes the gross revenue of franchisee center as income and records franchisee shareas expenses over the duration of the course.
(iii) The initial non-refundable franchisee fees are recognized on execution of the agreement.
(iv) Course / content development cost for print delivery medium are expensed.
(v) Revenue from software services is recognized when invoiced to the customer as per agreed terms.
8. Foreign Currency
(a) Foreign Currency Transactions :
The functional currency of each entity in the group is its respective local currency. Transactions in foreigncurrencies are recorded in functional currency at the rate of exchange prevailing at the date of the transaction.Monetary assets and liabilities in foreign currencies are translated into functional currency at the rates of exchangeprevailing at the Balance Sheet date and gain or loss is recognized in the Profit and Loss Account.
(b) Foreign Currency Translation and Exchange Rates :
Assets and liability accounts of foreign subsidiaries are translated into Indian Rupees at year-end rates and allincome and expenses are translated at yearly average rate except for inventories, which are converted at opening/closing rates as the case may be. Off Balance Sheet items are translated into Indian Rupees at year-end rates.
Gains or losses resulting from such translation are reported as Foreign Currency Translation Reserves,a separate component of shareholders’ funds (Reserves and Surplus).
(c) For consolidation, the following exchange rates were used for conversion of currencies into Indian Rupee:
Currency Balance Sheet Income StatementYear-end rates Daily Average rate
US Dollar 48.89 47.82UK Pounds 69.72 68.66South African Rands 4.31 4.96UAE Dirhams 13.31 13.02Singapore Dollar 26.51 26.33
9. Retirement Benefit Plans
Retirement benefit plans, pensions schemes and defined contribution plans, or funds are governed by the statutes ofthe countries in which subsidiaries are located and contribution by the company to the fund or future liability on actuarialvaluation are charged to Profit and Loss Account.
Accrued liabilities for leave encashments is made by the parent and its subsidiaries wherever applicable based onunavailed leave to the credit of employees in accordance with the service rules of the respective companies based onthe last salary drawn.
10. Miscellaneous Expenditure
(a) Capital issue expenses are deferred and amortized over a period of five to ten years. In case of foreignsubsidiaries such expenses are charged to Profit and Loss Account when incurred.
(b) Other deferred revenue expenditures are amortized based on the management’s estimates of its enduring futurebenefit generally over the period of 36 to 60 months.
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11. Secured Loans
(a) Term Loan from Bank / Financial Institutions :
(i) Rs./Thousand 1,859,299 is secured by first pari passu charges on ZTL’s advertisement commission receivableand first mortgage and charge on all immovable and moveable properties both at present and future exceptfixed assets located at Noida and an exclusive charge on program library of the company both present andfuture programs and films of the parent company. The loans granted to subsidiary are also secured by wayof pari passu charge on advertisement commission receivables.
(ii) Rs./Thousand 2,112,048 (USD 43,200,000) is secured by pledge of 100% of the share of Asia Today Limited(held by Winterheath Company Limited - an indirect subsidiary) and an exclusive charge on all the assetsand bank account of that subsidiary.
(iii) Rs/Thousand 58,103 (GBP 833,333) is secured by hypothecation of program and film rights of Asia TVLimited UK. (an indirect subsidiary)
(iv) Rs./Thousand 1,093,984 is secured against the first ranking mortgage and charges on all the movable andimmovable assets, assignment of the charges in respect of all licenses (present and future) of Siti CableNetwork Limited (SCNL), a subsidiary company except specific charge to banks for working capital facilityand financing of vehicles as stated in b (ii) and c below. Collaterally secured by pledge of 51% shares ofthe SCNL held by ZTL and guaranteed by charge on assets (after amalgamation) of SCNL.
(b) Working capital finance from banks :
(i) Rs./Thousand 572,795 is secured by hypothecation of stock other than (a) (i) above and first charge onimmovable properties at Noida and second charge on immovable properties at Marol, Mumbai, all rank paripassu with other financing banks and second charge on advertisement commission receivables.
(ii) Rs./Thousand 45,557 is secured by way of first charge against hypothecation of capital equipments,components stores, and book debts and collaterally secured by hypothecation of control room equipmentsinstalled at various places in Delhi by SCNL and guaranteed by ZTL.
(c) Hire purchase and lease finance :
Hire purchase and lease finance is secured by hypothecation of specific assets underlying the hire purchase /lease.
12. Cash and Bank Balances
Cash and bank balances include Rs./Thousand 6,000 in fixed deposits that has been pledged as security for creditfacilities granted to other company.
13. Debtors
(a) Debtors are stated in the Balance Sheet at net realizable value. Net realizable value is the invoiced amount lessprovision for bad and doubtful debtors. Provisions are made specifically against debtors where there is evidenceof a dispute or an inability to pay or irrecoverability.
(b) Debtors includes Rs./Thousand 202,894 due from a trading partner as at Balance Sheet date. This accountreceivable is outstanding for more than one year. No provison for doubtful debts has been made for this debtoras the company and the trading partner have signed a Memorandum of Understanding subsequent to year endto acquire the trading partner’s library of programming/film rights in settlement of amount due from trading partner.
14. Acquisitions
(a) ZTL has entered into Memorandum of Understandings with the promoters of ETC Network Limited and PadmalayaTelefilms Limited and other concerned parties for acquiring management control and majority stake in thesecompanies and paid aggregate advances of Rs./Thousand 633,520. Total commitment (net of advances) areshown as capital commitment in note 20.
These transactions are completed after the close of the year in compliance with the main terms of such contractsand other regulatory provisions.
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(b) One of the Indian subsidiary has acquired the business pertaining to Kannada channel “Kaveri” from AsianetMedia Limited for a consideration of Rs./Thousand 120,082. The net assets taken over are considered appropriatelyin the accounts. The details are as under:
Rs./Thousand
Purchase Consideration 120,082Net Assets acquired 101,771
Goodwill on acquisitions 18,311
15. Restructuring
ZTL has initiated the process of restructuring of its subsidiaries (Indian and Foreign), and in pursuance thereof four ofits Indian subsidiaries; Kaveri Entertainment Limited, Dakshin Media Limited, Programme Asia Trading Company Limited,El-Zee Television Limited, have filed the petitions with the High Court, Mumbai, for amalgamation with effect from1st April 2001 with the company, and for adjustment of excess cost of Investments to the company over net asset valueof the amalgamating Company against the share premium and reserves of the Company.
ZTL has applied to Reserve Bank of India for restructuring of its foreign subsidiaries and approval thereof is awaited.Restructuring of these companies will not have significant effect on its financials. One of the subsidiaries HokushanTrading Limited, HongKong has become defunct and has been divested.
16. Investments
(a) Investments are classified as long term and stated at cost. Provision for diminution in value of long-term investmentis made if the diminution is other than temporary.
(b) The fall in the market value of the quoted investments of Rs./Thousand 100,412 is not provided consideringthe same as temporary.
17. Taxation
(a) Current income tax is calculated on the results of individual companies in accordance with local accountingpractices and tax regulations.
(b) Deferred tax assets and liabilities are recognized using the asset and liability approach for the expected futuretax consequences of temporary differences between the carrying amounts and the tax bases of assets andliabilities. Unutilized tax losses will only be utilized where there is a likelihood of them being able to be offsetagainst tax in the future. For the calculation of deferred tax, the local tax rates likely to be in force are used forthe respective individual company where deferred tax accounting is adopted.
(c) ZTL and its Indian subsidiaries have accounted for the deferred tax assets/liabilities of Rs./Thousand 91,706 asat 1st April, 2001, by adjusting the amounts from the opening General Reserve in accordance with the transitionalprovision, as laid down in Accounting Standard – 22 “Accounting for Taxes On Income” issued by ICAI.
(d) The components of the deferred tax balances as on 31st March, 2002 are as under :
Rs./Thousand
(i) Deferred Tax Assets AmountArising on account of timing difference inRetirement Benefit 10,252Provision for doubtful debts 44,697Accruals allowable on payment basis 19,858Unutilized tax losses 216,021Other Provisions 3,855
Total 294,682
(ii) Deferred Tax LiabilitiesDepreciation 275,001Deferred Revenue Expenses 81,157Other Provisions 1,178
Total 357,336
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18. Leasing Liabilities
(a) Finance Lease :
Long-term leases, which in economic terms constitute investments financed on a long-term basis (finance lease)are recognized as assets and recorded under tangible fixed assets at their cash purchase value. The relatedliabilities are included in secured loans.
Reconciliation of minimum lease payments and its present value:
Rs./Thousand
Minimum Lease Payments as atNot Later than one year 5,181Later than one year and not later than five years 5,515
Total 10,696
Less : Amount representing interest 2,014Present value of Minimum Lease payment 8,682Less : Amount due not later than one year 4,033Amount due later than one year and not later than five years 4,649
(b) Operating Leases :
Lease of assets under which the lesser effectively retains all the risk and rewards of ownership are classified asoperating leases. Lease payments under operating leases are recognized, as expenses are accrual basis inaccordance with the respective lease agreements.
The Company has taken on lease certain offices, residential premises and other facilities under cancelableoperating 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 to 36 months.
Total expenses incurred and charged to Profit and Loss Account is Rs./Thousand 81,863.
The minimum rental payables under other operating leases that have initially or remaining non-cancelable leaseare as follows:
Year ending 31st March, 2002 Rs./Thousand
2002-2003 198,7652003-2004 164,3572004-2005 147,8602005-2006 21,5922006-2007 & above 13,980
Total 546,554
19. Contingent Liabilities
Rs./Thousand
(a) Unexpired letter of credit 132,911(b) Guarantees and counter guarantees given by the company 5,968,117(c) Claims against the company not acknowledge as debts 146,009(d) Legal suits & claims filed against the company Not Ascertainable(e) Disputed direct taxes 464,685
20. Estimated amount of contracts remaining to be executed on capital account (Net of Advances) Rs./Thousand 18,314.The committed investments (net of advances) amounting to Rs./Thousand 604,862.
21. Commencement of Direct-to-Operator Project
ZTL’s Direct to Operator (DTO) project for uplinking and distribution of Television Channels in India has commencedcommercial operations on 24th February, 2002.
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As per Accounting Standard –16 on “Borrowing costs” and Guidance Note on Expenditure during construction periodissued by the Institute of Chartered Accountants of India, the borrowing costs and other expenses incurred up to thedate of set-up being Rs./Thousand 56,953 are capitalized as part of the cost of fixed assets and borrowing costsincurred after the date of set up are charged to revenue and the expenses of Rs./Thousand 36,283 after set up aredeferred.
22. Deployment of Funds
ZTL has been deploying its surplus fund as short-term demand loan from time to time and calling for repayment as andwhen decides. The parties are regular in repayments of principle and interest and these loans are considered good.
23. Related Party Disclosure
(a) List of Parties where control exists :The list of subsidiary companies is disclosed in Note no. 2 (a).
(b) Other Related Parties with whom transactions have taken place during the year and balances outstandingas on the last day of the year :
Associate CompaniesKarma Network Limited (extent of holding 40%)Aplab Limited (extent of holding 26.42%)Centre Channel Private Limited (extent of holding 33%)Dakshin Communication Private Limited (extent of holding 34%)
Other Related Parties
Agrani Convergence Limited; Ambience Advertising Private Limited; ASC Enterprises Limited; Mr. Ashok Goel;Asian Satellite Broadcasting Private Limited; Briggs Trading Company Private Limited; Buddha Films Limited;Churu Trading Company Private Limited; Continental Drug Company Private Limited; Cutting Edge HoldingsPrivate Limited; Cyquator Technologies Limited; Delgrada Limited; Essel Propack Limited; Essel ShyamCommunication Private Limited; E-City Entertainment (India) Private Limited; E-City Retail Private Limited; E-CoolGaming Solution Private Limited; Essel International Limited; Ganjam Trading Company Private Limited; IntrexIndia Limited; Mr. Jawahar Goel; Mediavest Private Limited; Metropolitan Leasing Limited; Prime PublishingLimited; Pan India Paryatan Limited; Playwin Infravest Private Limited; Premier Finance and Trading CompanyLimited; Prajatma Trading Company Private Limited; Pratham Media Entertainment Private Limited; Rama AssociatesLimited; Rankey Investment and Trading Company Limited; RKJ Woods Plantation Private Limited; ScarpettaInvestment Limited; Taleem Research Foundation; Tashi De Lek Entertainment Solution Private Limited; TurnerInternational India Limited; Ultra Entertainment Private Limited; UTN Worldwide Limited; Veena Investments PrivateLimited; Wide Screen Holdings Private Limited; Zee Arabia LLC; Zee Australia, Zee Link Pty Limited; Zee MGMLimited; Zee Sports Limited; Zee Network Employees Welfare Trust.
Directors / Key Management Personnel
Mr. Subhash Chandra; Mr. Laxmi Narain Goel; Mr. Ashok Kurien; Mr. Sandeep Goyal; Mr. D. P. Naganand;Mr. R. K. Singh
Rs./Thousand
Particulars Associates Other Related Key ManagementParties Personnel
Transactions with Related Parties
Sale, Services and Other Recoveries (Net) — 233,667 —
Purchase of Programs, Goods and Services 970 78,457 —Advertisement Income — 13,745 —Commission Received 7,553 26,409 —Commission Paid — 948 —Interest Received — 731,937 1,087Remuneration paid to Directors — — 43,736Interest Paid 1,708 — —Dividend Received — 1,968 —Purchase of Fixed Assets 3,049 3,341 —Sale of Fixed Assets — 69,523 —
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Particulars Associates Other Related Key ManagementParties Personnel
Investments — 10 —Loans, Advances, Deposit Given — 5,365,677 15,000Loans, Advances, Deposit repayment received 6,266 5,794,006 —Deposit Received — 90,000 —Loans, Advances, Deposit repayment made 1,326 91,584 —Balances as on 31st March, 2002Investments 123,079 1,510 —Debtors — 401,760 —Loans / Deposit / Advances given 8,458 2,402,745 16,119Loans Taken 4,940 1,089,698 —Creditors 14 106,075 —GuaranteesGuarantees Received — — 1,715,681
During the year, shares have been pledged by a related party for loan granted to the company, the same has notbeen considered in the above disclosure requirements.
24. Segmental Information
The company follows AS-17 “Segment Reporting” standard relating to the reporting of financial and descriptive informationabout their operating segments in financial statements.
The company’s reportable operating segments have been determined in accordance with the company’s internalmanagement structure which is organized based on the operating business segments as described below.
Broadcasting and content, which principally consists of developing, producing and procuring television programmingand film content and delivering via satellites, thereby earning revenues by way of sale of content, advertising andsubscription revenues.
Access, which principally consists of distributing content through satellite, cable television systems and internet.
Education, which principally consists of distribution of software learning products, imparting services in informationtechnology education and IT consulting services in association with several business partners.
(a) Business Segment
Rs. / Thousand
Broadcasting & Consolidatedcontent Access Education Others Elimination Total
Revenue :External Sales 9,120,553 1,130,880 273,606 237,354 — 10,762,393Inter-segment Sales 98,971 172,093 — — (271,064) —Total Revenue 9,219,524 1,302,973 273,606 237,354 (271,064) 10,762,393Result :Segmental Result 3,068,736 (115,701) (174,843) 27,019 8,661 2,813,872Operating Profit beforeinterest and tax 3,068,736 (115,701) (174,843) 27,019 8,661 2,813,872Interest Expenses 750,659 30,551 19,483 — (45,242) 755,451Interest Income 749,630 47,164 1,502 — (45,242) 753,054Profit before tax 3,067,707 (99,088) (192,824) 27,019 8,661 2,811,475Current tax – Current year 884,301 3,773 — — — 888,074Current tax – Previous year 145,032 — — — — 145,032Deferred tax (9,702) (12,912) — — — (22,614)Prior Period Expenses 22,299 (1,740) 1,562 — — 22,121Profit After Tax 2,025,777 (89,209) (194,386) 27,019 8,661 1,778,862Minority Interest 342 (28) — — — 314Net Profit 2,025,435 (88,181) (194,386) 27,019 8,661 1,778,548
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(b) Other Segment Information
Rs. / Thousand
Broadcasting & Consolidatedcontent Access Education Others Elimination Total
Fixed Assets(i) Gross Block 30,069,168 4,507,951 98,968 — — 34,676,087
Less: Depreciation (355,718) (380,790) (26,921) — — (763,429)Net Block 29,713,450 4,127,161 72,047 — — 33,912,658
(ii) Capital work in progress 103,007 1,381,331 652 — — 1,484,990
Current Assets Loans andAdvances(i) Inventories 2,325,927 173,242 112,619 — (10,751) 2,601,037(ii) Sundry Debtors 6,079,847 915,973 51,255 — (757,794) 6,289,281(iii) Cash & Bank Balances 1,733,967 145,274 6,294 — — 1,885,535(iv) Loans & Advances 4,774,495 951,334 27,327 8,536 (547,550) 5,214,142
Total 14,914,236 2,185,824 197,495 8,536 (1,316,095) 15,989,996
Less: Current Liabilities &Provisions 3,159,715 1,468,905 159,891 — (1,254,678) 3,533,833Net Current Assets 11,754,521 716,918 37,604 8,536 (61,417) 12,456,163Loan Funds 7,246,005 1,351,043 407,691 — (514,123) 8,490,616Deferred Tax Assets 116,106 178,576 — — — 294,682Deferred Tax Liabilities 215,138 142,198 — — — 357,336Depreciation 113,131 85,191 16,733 — — 215,055Non Cash Expenses Otherthan Depreciation 283,035 70,923 49,701 — — 403,658
(c) Revenue by Geographical Market
The geographical segments considered for disclosure are India and Rest of World.
(a) The revenues are attributable to countries based on location of customers.
Rs./Thousand
India 8,569,606Rest of World 2,192,787
(b) Segment assets and liabilities are disclosed based on the countries of incorporation of respective companies.
Rs./Thousand
Net Assets Intangibles
India 9,986,417 3,345,545Rest of World 6,140,994 28,380,855
25. Earning Per Share
In accordance with Accounting Standard – 20 “Earnings Per Share” issued by the Institute of Chartered Accountants ofIndia, basic earnings per share is computed using the weighted average number of shares outstanding during the year.
As per our attached report of even date For and on behalf of the Board
Mohan Bhandari Sandeep Goyal Whole Time DirectorPartner Ashok Kurien DirectorFor MGB & Co Nemi Chand Jain DirectorChartered Accountants
Hitesh Vakil Director – FinanceMumbai Vikas Gupta Company Secretary24th September, 2002
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ZEE TELEFILMS LIMITED
Registered OfficeContinental building, 135,Dr. Annie Besant Road,Worli, Mumbai 400 018.Visit us at www.zeetelevision.com