11
Future. Ready.Entertainment Network (India) Limited
Annual Report 2010-11
2
We are no morejust 98.3 FM
We are also
www.radiomirchi.com
www.facebook.com/mirchi983fm
www.youtube.com/mirchi983fm
www.twitter.com/mirchi983fm
Mirchi Mobile 59830
http://www.ENIL/Annual Report 2010-11
We fully realize that evolution in media habits of consumers and their increasing
adoption of online space will be the game changer for media companies in the near
future and we are busy preparing for such a digital world. The digital journey that
Radio Mirchi has started is with an objective of becoming known as a ‘community
centric’ company rather than just as an FM broadcaster. The efforts in the Online space
and on the mobile are designed to reach out to our consumers on platforms and
places where they naturally congregate - if they are on social media, we are now
actively engaging with them in that space ; if they are spending more of their time
on-line, we are strengthening our website activities to engage with them. If they want
content “on demand”, we are repurposing our content that way; If our consumers
are spending more time on consuming entertainment on their mobile handsets, then
we are making our content reach them on their mobile phones.
While we have barely begun our journey, we are scaling up fairly rapidly; we now
reach 5% of all our listeners online through our online initiatives, and plan to triple our
reach within the next one year. We already reach more listeners on the Mirchi Mobile
platform with our offerings than through many of terrestrial radio stations. We are
creating content like Mirchi Bhojpuri that can only be consumed on the mobile. There
are many more such innovations in the pipeline which we will roll out soon.
Our digital strategy is driven by ideas and emanates from a philosophy – one good
idea is better than a thousand strategies. We are learning as we go along, and we are
maturing really fast as a digitally savvy company.
http://www.ENIL/Annual Report 2010-11
Getting Future Ready
2
Contents
http://www.ENIL/Annual Report 2010-11
04
Digital Initiatives
08
Music Initiatives
13
Phase III
14
Awards &Recognition
16
ED’s Message
18
Company Snapshot
19
Financial Highlights
20
Board of Directors
25
Notice
31
Directors’ Report
36
Report on Corporate
Governance
53
ManagementDiscussion &
Analysis
3
Contents
http://www.ENIL/Annual Report 2010-11
63
Auditors’ Report
66
Balance Sheet
67
Profit & LossAccount
68
Cash FlowStatement
69
Schedules
90
Statement pursuantto Section 212 ofCompanies Act
91
Auditors’ Report onConsolidated
Financial Statement
92
ConsolidatedBalance Sheet
93
ConsolidatedProfit & Loss
Account
94
ConsolidatedCash FlowStatement
95
Schedules ofConsolidated
Financial Statement
4
Digital Initiatives
Mirchi goes
virtual with
Bollywood
The virtual world is constantly
evolving and Radio Mirchi
realises the importance of
keeping up. Today’s youth is
aptly called the Twitter and
Facebook generation and
Radio Mirchi believes it is
important to reach out and
connect with them where it
matters the most. Since our
listeners love movies and
movie songs, we have always
brought those to our listeners.
Now we are bringing our
audience one step closer with
a far more engaging presence
online.
This year, before the release of
two major independent movies
– ‘Dhobhi Ghaat’ and ‘Isi Life
Mein’ our audience connected
with the movies through us on
Facebook.
'Dhobhi Ghat' celebrated the
visual landscape of Mumbai.
Similarly our campaign pushed
participants to capture the
spirit of their city. It was a
competition where fans had to
upload an inspiring picture
from their city onto the Radio
Mirchi page. Consequently
lucky winners got to meet
Aamir Khan. This campaign
was hugely successful with a
Facebook reach of
http://www.ENIL/Annual Report 2010-11
DIGITAL &
BOLLYWOOD
5
Digital Initiatives
approximately 2,00,000 and
interaction of around 3000
wall posts. Similarly with ‘Isi
Life Mein’ we gave listeners the
unique opportunity to turn
their lyrics into a song. The
most interesting lyrics were
sung by the film’s composers,
Meet Brothers at the Mirchi
studio. We even converted the
song into videos and uploaded
those on our customized
YouTube channel. The
response – we received close to
100 entries in less than 2 days.
The innovative quotient of
Mirchi took another high with
the movie No One Killed
Jessica. The listeners were able
to connect with Bollywood
stars Vidya Balan and Rani
Mukherjee through video on
Facebook.
The listeners posted questions
on the Radio Mirchi Facebook
page and received instant
replies from the stars in video
format.
Mirchi Facebook users got a
chance to win exclusive
autographed Radio Mirchi
merchandise from the stars of
Yamla Pagla Deewana.
This virtual presence provided
us with exceptional results and
a greater audience connect.
Our digital initiatives have
created a template for us to
take forward the presence of
Radio Mirchi on the digital
space. By investing in people,
and by being ahead of the
curve in terms of technology
adoption, we are ensuring that
Radio Mirchi is indeed Future
Ready.
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DIGITAL &
BOLLYWOOD
6
Mirchi reinvents
the humble
radio
It’s true when they say Music
crosses all boundaries and brings
people together. At Radio
Mirchi, we are committed to two
things, our listeners and the
music gurus. In our efforts to
bring the best to our audience
we have used technology to stay
a step ahead.
Partnering with Spice Digital, we
introduced a path breaking
technology that allows mobile
users to tune into their favourite
local Mirchi station from
anywhere in India. This means
that a person sitting in Mumbai
can listen to Radio Mirchi Patna
on his or her mobile phone by
simply dialling a local number.
‘Mirchi Mobile’ is a unique
proposition that addresses the
need of our listeners to stay
connected to their hometowns,
providing entertainment in the
language of their choice along
with constant updates on their
city happenings. Not limited by
any handset, it allows Airtel,
Reliance and BSNL users to
follow their favourite local
station from anywhere in India.
The Mirchi Mobile service has
generated a very encouraging
following already. Many in the
mobile VAS industry say that this
has been one of the most
successful VAS applications
launched in the recent past.
The innovation has received loud
praise recently at the 6th India
Radio Forum where it was
awarded with the top award on
‘Excellence in new media
initiative’. The industry
recognised the inventive fibre of
Radio Mirchi and its abilities to
adopt new technologies to make
the brand reach out to its
listeners through various means.
This invention has created a
brand new category in the
mobile Value Added Services
space and shown yet again to
the world why we are Number 1
in the business. It is a testimony
to our approach and the zeal
with which we pursue excellence
– being Future Ready.
Digital Initiatives
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MIRCHIMOBILE
7
‘Sud’ lights
up Facebook
Our enthusiasm to leverage new
media and the Internet led us to
create an ‘audio book’ on a
Mirchi page on the most popular
social networking site globally,
Facebook. We used one of our
On-Air properties, ‘Sud’, an
immensely popular character
who has been entertaining
listeners on Radio Mirchi with his
hilarious jokes from his book
‘Hansi Ke Phuware’ delivered in
his own unique style. But for the
first time he could do this on
Facebook.
For six hours Sud entertained
people in a first-of-its-kind digital
marketing initiative launched by
Radio Mirchi. The session was
unique because rather than
giving just regular ‘written status
updates’, Sud was responding to
his fans and their questions
through ‘audio updates’. Radio
Mirchi thus adapted Sud to
Facebook by creating audio
updates, bringing to the fore
Sud’s key features, his voice and
his earthy wit.
The response we got was
overwhelming; each update by
Sud was followed by over
20,000 people. Sud’s listeners
and followers had a lot of
questions for him; each of which
he answered in his own
inimitable way. People shared
their jokes with Sud, and one
lucky fan even had his joke
selected and read out by Sud as
an audio update. Sud also
composed and sang a farewell
song on Facebook for his fans.
The posts indicated everyone was
having a lot of fun.
There were even requests for
copies of ‘Hansi Ke Phuware’,
the book of jokes that Sud reads
from, which does not exist
except on-air on Radio Mirchi
and on our website
www.radiomirchi.com. The
activity got a strong and positive
response and gave our fans a
new platform to connect with
the brand.
Digital Initiatives
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AUDIO BOOKON
8
Music Initiatives
If it’s fresh,
it's Mirchi
Radio Mirchi which has always
stood for fresh ideas, reached
another milestone by introducing
‘Mirchi Music Premiere’ A step
that brought in the concept of
‘on-air launches’ and unveiled
the music of many hit movies.
Among the popular films that
premiered their music this year
was Prakash Jha’s much awaited
multi starrer ‘Raajneeti’ that was
launched on ‘Hi Mumbai!’
Unveiling the songs, were none
other than the film’s charismatic
lead pair, Ranbir Kapoor and
Katrina Kaif along with director
Prakash Jha and music composer
Pritam and Aadesh Shrivastava.
The vibrant team entertained the
listeners by reminiscing about
the movie and sharing
interesting trivia and memories
from the shoot.
Suneil Shetty also went on
‘Sunset Samosa’ for the Mirchi
Music Premiere of his movie ‘Red
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MIRCHI MUSIC
PREMIERE
9
Music Initiatives
Alert: The War Within’. The cast
of ‘Turning 30!!!’ too, went live
on the show to launch their
soundtrack. Gul Panag and
Purab Kohli, accompanied by
debutante director Alankrita
Shrivastava were present in the
studio. Another star studded
affair that Mirchi hosted was the
Music Premier of the movie
‘Patiala House’. The gorgeous
lead pair of Akshay Kumar and
Anushka Sharma along with
director Nikhil Advani and music
composer trio – Shankar, Ehsaan
and Loy chatted with Mirchi RJs
and listeners while unveiling the
music on air. Apart from these,
many other movies like ‘Teen
Thay Bhai’, ‘Kites’, ‘Tera Kya
Hoga Johnny’ etc. also had their
Music Premiers on
Mirchi.
It is innovations like
Mirchi Music
Premiere that have
distinguished Radio
Mirchi from the
rest. Premier, a
word that till date
was associated with
movies has been
successfully
transferred to radio and to
music; all by leveraging the
innovative spirit of the team at
Mirchi. Mirchi has constantly
endeavoured to introduce novel
concepts for its listeners and this
fresh and creative perspective is
what has established the station
at the very top. Music is thus a
core requirement for us to
remain Future Ready.
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MIRCHI MUSIC
PREMIERE
10
Music Initiatives
“Inform, Engageand Converse”,
the mantrabehind this
year’s MirchiMusic Awards
One of Radio Mirchi’s most
awaited events is the Mirchi
Music Awards (MMA). It is a
unique function that is
dedicated to commemorate the
outstanding artists of the Indian
music industry. These awards
reinforce Radio Mirchi’s passion
and devotion to music. A key
facet of this event is the
‘Listeners’ Choice Awards’
which allows Radio Mirchi
listeners to vote for their
favorite album and song of the
year. This year Radio Mirchi
decided to come up with a
social media campaign that
would promote the awards on
the Internet.
The core idea of the campaign
was ‘Inform, Engage and
Converse about MMA’. We
wanted to build a sense of
http://www.ENIL/Annual Report 2010-11
MIRCHI MUSICAWARDS
11
Music Initiatives
anticipation about the final
result, create buzz online
about prospective winners
and get people talking about
the winners. Rarely before
had social media been used
in such a massive way for an
on-ground event in India.
The process began a month
earlier with special videos
seeded online. Ranging from
jury commentaries to public
opinions, these were used as
platforms to generate
conversation around MMA
across all
online
music
forums.
On
we
launched a
special
application
though
which our fans could vote for
their favorite artist and become
part of the awards in their own
way. This was accompanied with
regular updates and a video
sharing contest to support the
campaign and engage fans. On
the final day live tweeting from
the event on Twitter along with
videos being shared on YouTube
kept our audience informed.
Having our presence in all the
popular online channels not only
gave our event huge exposure
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MIRCHI MUSICAWARDS
12
Music Initiatives
but also provided our fans with
a comprehensive and holistic
experience.
The success of our campaign
could be measured in the
response that was generated.
We received 4,00,000
impressions through our
Facebook videos and connected
to approximately 3,00,000 fans
by way of our application. With
a Twitter reach of around
1,25,000 and 42,000 YouTube
views in less than two weeks,
MMA succeeded in being the
talk of the town. Radio Mirchi
proved once again that it is
Future Ready.
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MIRCHI MUSICAWARDS
13
http://www.ENIL/Annual Report 2010-11
While the digital platform
remains the one to watch out
for in the future, the present
FM platform that Mirchi is the
leader in, offers ever growing
growth prospects. FM radio
makes Radio Mirchi what it is
today and brings in almost all
the revenues and profits for the
company.
The soon-to-be-announced
third phase of radio licensing is
likely to make radio reach its
full potential in India a reality.
This phase will engender the
growth of private radio from
the current 86 towns to 313
towns with upto 839 radio
stations operating across the
country.
It will also permit news in a
limited manner and
importantly, permit
broadcasters to operate
multiple frequencies in each
major city – thus allowing for
more variety in radio formats to
be offered by broadcasters.
There are many other attractive
features of the policy – more of
that is discussed in the
Management Discussion pages
in this report.
Radio Mirchi has been ready
for Phase III for long. It has
already assembled a special
team headed by the Chief
Strategy Officer of the
company and is closely
examining the opportunities
that Phase III can bring and is
already running some highly
specialized econometric models
to estimate market sizes. Our
vision and our objective is to
remain India’s most loved,
most profitable and biggest-in-
revenues radio entity. Our
Phase III strategy will make sure
that we remain Future Ready.
Phase III Opportunities
14
Awards & Recognition
Sailing through
the awards
Radio Mirchi has always
believed in delivering fresh and
new content to the audience.
Our initiatives have not only
been popular but have also
garnered respect and
acknowledgement from the
industry. ‘Mirchi Mobile’ our
pioneering innovation was a
big success both from a brand
and commercial stand point
and was also awarded the
‘Best new media initiative
award’ at the India Radio
Forum Awards 2011. By
constantly being ahead of the
game, Radio Mirchi has made
a mark in the radio space.
FICCI awarded Radio Mirchi at
the FICCI Frames Excellence
Awards 2011. The awards
celebrated excellence across 4
major areas namely, music,
radio, television and cinema;
Mirchi was awarded the Most
Successful Radio Channel of
the Year. At the IRF awards
too, we received numerous
awards for our various shows
and RJs.
If this isn’t testimony enough
of the innovative spirit of
Mirchi, the IRS and RAM data
will put all doubts to rest.
According to the recently
released Indian Readership
Survey (IRS) Q4 2010, the
station enjoys a listenership of
over 41.2 million listeners (last
week recall). Topping the
charts in 8 key cities, our
listenership is almost twice the
size of the next brand. The fact
that our listenership is almost
equal to the Average Issue
Readership (AIR) of the top 3
newspapers in India proves
that Radio Mirchi has not only
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15
Awards & Recognition
understood the pulse of the
listener but also got the
dynamics of the private FM
industry right. Our dominance
showcases our enviable
repertoire of talents, our
excellence at pioneering exciting
programmes and our
commitment to be tech savvy
whilst keeping music at the core.
When it comes to listenership
numbers and the listener’s vote
of confidence, Mirchi is truly
Future Ready!
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16
ED’s Message
It’s been ten years since the first
private FM radio station came
up in India. Radio Mirchi’s first
station is also almost ten years
old with Indore set to achieve
that lucky milestone in October
2011. When I look back at the
last ten years, I feel blessed to
have had the chance to be part
of this amazing revolution that
has swept the country since its
launch.
Ten years back, radio was in the
throes of a slow death. In a
world dominated by hundreds
of TV channels and thousands of
newspaper titles and editions, it
appeared that radio had no
chance. And then came what is
called the 1st phase of radio
reforms in the year 2000. Radio
Mirchi was born in this phase
with the first station at Indore
coming up in Oct 2001. By May
2003, there were 7 Radio Mirchi
stations operating in the four
big metros – Mumbai, Delhi,
Kolkata and Chennai – as well as
in the three other most
important cities of the West –
Ahmedabad, Pune and Indore.
Those were trying days –with
the license fee charged by the
government at an unbearably
high level. As a result, all
broadcasters bled. Indeed, the
revolution that had made a
tentative start in 2001, appeared
to be fizzling out. Then in the
year 2005, the Government of
India made a bold move
launching what is called the
2nd phase of reforms. The
license fee regime changed and
became a combination of One
Time Entry Fee (OTEF) and a
much smaller annual license fee
of 4% of Gross Revenues. As
part of this phase, 338
frequencies were auctioned by
the government in nearly 90+
towns. As a proof of the
success of this policy, today
there are 246 operating radio
stations in 86 odd towns across
the country. Thankfully, the
revolution didn’t die; in fact, it
became stronger. What had
been called a dead business just
a decade back had been revived
by the collective efforts of the
Government and all the
broadcasters who worked
tirelessly in bringing this
exciting medium back into the
lives of the people of India.
Today, as we end the year
FY11, those beginning years
look very far away. Today, radio
has become a mainstream
media vertical – rubbing
shoulders with TV, Print,
Outdoors and the Internet.
Radio is part of almost all
national advertising plans and is
gaining traction amongst its
core segment – the local
advertisers. The share of radio
A decade of private FM......places your Company at the top!
PRAShAnt PAnDAyExecutive Director and CEO, ENIL
http://www.ENIL/Annual Report 2010-11
17
ED’s Message
in the advertising spends of the
country has also risen from
under 1% ten years back to
nearly 4.5-5% today. There are
more than 163 million radio
listeners in the 86 odd towns
that it is present in. Now, with
the 3rd phase of reforms about
to be announced by the
government, radio will penetrate
further with a presence upto
313 towns. Every single town
with a population of more than
1 lac people will boast of its own
private FM stations. The number
of listeners is bound to surge. I
feel confident to say now that
this modest medium has indeed
come of age!
Your Company delivered good
results in FY11. Revenues
increased by 21% over a year
ago to Rs 280 crores. EBITDA
margins surged 53% to reach Rs
91 crores. The PAT numbers
grew handsomely to Rs 52 crores
– a jump of 192% over the
previous year and the highest
ever. We sometimes forget that
the economic slowdown
continued well into the first few
months of FY11....and yet your
company was able to deliver
such solid results. This is
testimony to the strength of
both, the brand Mirchi, and the
team that manages your
Company. I am particularly
proud of the latter.....because it
is the latter that has built the
former.
Going forward, your Company is
well placed to capture the
opportunities offered by the 3rd
phase of radio reforms. From our
interactions with the
Government, it appears that this
policy would be announced in
the first quarter next year. Your
Company has planned for this
since long. As part of this
planning, your Company sold its
entire stake in Times Innovative
Media Ltd. (engaged in out of
home business) in December
2010, bringing in the cash that
would be needed in Phase III.
The sustained profitability of
your Company has made sure
that we have a cash pile of Rs
109 crores on March 31, 2011.
Your Company is debt free and
can leverage if required for
auctions in the 3rd phase. I must
add that while we will
participate strongly in the 3rd
phase, we will remain cautious
not to overbid in the auction
process. We believe that radio
should be built on strong cost
management and there is no
point in building the largest
network if that network cannot
be profitable. Your Company will
always keep profitability in its
cross hairs even as it expands
rapidly.
With the economic slowdown
now coming to an end, your
Company is well placed to build
on its successes of the past. That
is a commitment that I and my
entire management team would
like to give to you, the owners of
this Company. Here’s to another
glorious year ahead!
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18
Company Snapshot
Meet EnIL(Company Snapshot)
Entertainment Network (India)
Limited is a leader in India’s
private FM radio industry and
subsidiary of Times Infotainment
Media Limited, the holding
company promoted by Bennett,
Coleman & Company Limited
(BCCL), the flagship of The Times
of India Group.
ENIL was incorporated in 1999
and is listed on the Bombay
Stock Exchange of India Limited
and the National Stock Exchange
of India Limited.
Its market capitalisation was Rs
1200 cr as on 31 March 2011.
Radio Mirchi operates FM radio
stations in 32 cities – Mumbai,
Delhi, Kolkata, Chennai, Indore,
Ahmedabad, Pune, Hyderabad,
Bangalore, Jaipur, Patna,
Jalandhar, Panaji (Goa),
Vadodara, Bhopal, Kanpur,
Rajkot, Nashik, Varanasi,
Aurangabad, Lucknow, Surat,
Kolhapur, Madurai, Nagpur,
Vishakhapatnam, Coimbatore,
Mangalore, Vijayawada, Raipur,
Thiruvananthapuram and
Jabalpur.
Radio Mirchi enjoys a
listenership of 41.2 million (as
per IRS Q4, 2010, last week
recall) and was voted the
number one media brand in the
IMRB–Pitch survey 2008 and was
awarded the most successful
radio channel of the year award
at the FICCI Frames 2010 &
2011.
1. Radio broadcasting
Operations under the brand
'Radio Mirchi'.
No. 1 Radio brand in the FM
space.
Network across 15 states with
32 stations.
41.2 million listeners across all
its stations.
2. Experiential marketing
Operations under the
subsidiary Alternate Brand
Solutions (India) Limited (ABSL).
Operating under the brand
360o.
Manages its own event brands
like Spell Bee, Gadget Awards,
Design Warz and Teen Diva.
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t
19
Financial highlights (Consolidated)
(Rs. In Lakhs)
PARtICULARS 2010-11 2009-10 2008-09
Results of Operations
Total Income 46,512.47 42,353.81 43,048.44
Earnings before Interest, Taxes, Depreciation and 10,319.26 4,519.70 (613.28)
Amortisation (EBITDA) & Exceptional Item
Depreciation 4,225.58 5,256.00 5,255.70
Interest 224.56 1211.79 1444.03
Profit/(Loss) before Tax 5,869.12 (1,948.09) (7,313.01)
Exceptional Item (1,776.48) - -
Net Profit / (Loss) 1,717.45 (1,532.14) (6,028.63)
Financial Position
Equity Share Capital 4,767.04 4,767.04 4,767.04
Reserves and Surplus 33,466.74 31,749.29 33,281.44
Networth 38,233.78 36,516.33 38,048.48
Minority Interest - 1,341.29 1,987.13
Investments 8,734.04 165.00 –
Gross Block 36,832.13 45,005.59 43,915.52
Net Block (including Capital Work-in-Progress) 18,144.48 27,172.52 31,822.78
Net Current Assets 12,240.61 15,573.18 22,097.68
Stock Information
No. of shares 47,670,415 47,670.415 47,670.415
Earnings per share (Basic) (In Rs.) 3.60 (3.21) (12.65)
Earnings per share (Diluted) (In Rs.) 3.60 (3.21) (12.65)
total Income
2010-11
2009-10
2008-09
46,512.47
42,353.81
43,048.44
EBItDA
2010-11
2009-10
2008-09
10,319.26
4,519.70
(613.28)
net Profit / (Loss)
2010-11
2009-10
2008-09
1,717.45
(1,532.14)
(6,028.63)
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20
Board of Directors
A trustee and board member of several
organizations, Mr. Vineet Jain – Chairman & Non
Executive Director (ENIL) holds a Bachelor’s degree
(B.Sc.) in International Business Administration in
Marketing from Switzerland.
As the Managing Director of Bennett, Coleman &
Co. Ltd., Mr. Jain is acknowledged as a thought
leader in transforming The Times Group from a
publishing house to a diversified media
conglomerate. He has made a significant
difference to the landscape of the new age media
in India. His leadership in the domain of Internet,
Radio and Out of Home has added a new impetus
to the categories.
He is on the managing committees of
philanthropic organizations viz. The Times
Foundation, The Times of India Relief Fund and
the S.P. Jain Foundation.
Mr. Jain is also the Chairman of The Press Trust of
India Ltd.
Mr. Vineet Jain,Chairman &
Non-Executive Director
Mr. n. Kumar, Independent
Non-Executive Director
Mr. Ravindra Dhariwal, Non-Executive Director
Mr. N. Kumar, an Engineering Graduate in
Electronics and Communication, is the Vice-
Chairman of The Sanmar Group, a well known
industrial group in India that has interests in
Chemicals, Engineering and Shipping. He is the
Honorary Consul General of Greece in Chennai.
Mr. Kumar is an active spokesperson of industry
and trade and was the President of Confederation
of Indian Industry (CII), a leading industrial body.
He also participates in various other apex bodies.
He is also on the Board of several public limited
companies. Mr. Kumar carries with him vast
experience in the sphere of Technology,
Management and Finance.
Mr. Ravindra Dhariwal is the Executive Director and
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21
Board of Directors
Mr. RavindraKulkarni, Independent
Non-Executive Director
Mr. A. P. Parigi, Non-Executive Director
CEO, Bennett, Coleman & Co. Ltd. Prior to this
Mr. Dhariwal was the Vice President, Franchise, SE
Asia, PepsiCo International.
During his illustrious career, he has held various
positions at companies like Hindustan Lever
Limited, Rexona Prop. Limited - Sydney, Pepsi Foods
Industries and PepsiCo International. He holds a B.
Tech degree from IIT Kanpur and a post graduate
diploma in management from IIM, Calcutta.
Mr. Ravindra Kulkarni holds a Masters degree in
Law from University of Mumbai. Having been in
the legal arena for nearly four decades, Mr.
Kulkarni has vast experience as a legal practitioner
particularly on matters relating to foreign
collaborations, joint ventures, mergers and
acquisitions, capital markets, public offerings for
listing of securities in India as well as in
international markets, infrastructure projects, etc.
He is a national partner of M/s. Khaitan & Co., one
of India’s leading law firms and heads their
Mumbai office. He is on the Boards of several listed
companies as an independent director. He is also a
member of the Advisory Committee and also a
faculty member of the Post Graduate Diploma
An alumnus of the Delhi School of Economics and
Faculty of Management Studies, of the University of
Delhi, Mr. A. P. Parigi has for the past 2 decades held
senior positions in various industries. Prior to joining
The Times Group, he was the CEO of BPL Mobile,
Mumbai. After he stepped down as the Managing
Director- ENIL, he joined Eros International Media Ltd. as
the Managing Director & Group CEO- India operations-
from October 2009 till February 2010.
In April 2009, he was awarded The William F Glaser’53,
‘Rensselaer’s Entrepreneur of the Year’, in Troy, Albany,
USA. In June 2010 he became Member, The Oxford
University, Said Business School, Business Advisory
Council. In July, he was elected to the Advisory Board
Fordham Graduate Business School, New-York. In
August 2010, he was appointed as Senior Advisor and
Consultant to Accel Ltd., Chennai. In May 2011 he was
appointed Advisor – N.E.A. India. N.E.A. is a leading
venture capital and growth equity firm in the USA.
Mr. Parigi was honored with the Life Time Achievement
Award by the World Brand Congress in 2009. He serves
on the Boards of several companies including Bennett,
Coleman & Company Ltd., Times Global Broadcasting
Company Ltd., Absolute Radio, UK etc.
Course in Securities Law at the Government Law
College, Mumbai.
http://www.ENIL/Annual Report 2010-11
22
Board of Directors
Mr. Richard Saldanha, a graduate Mechanical
Engineer, served Hindustan Lever & Unilever plc
with distinction for 30 years. He spent almost 10
years in Latin America. He was Technical Director of
Unilever Venezuela, Vice-President – Supply Chain
for Unilever Andina, (Venezuela, Colombia,
Ecuador) rising to be Chairman and CEO of
Unilever Peru and a Member of the Unilever Latin
America Board.
As Managing Director of Haldia Petrochemicals Ltd,
a 1.5 BN $ enterprise, Mr. Saldanha brought to the
Company, experience and expertise gained in
Unilever Companies worldwide as well as in India.
He defined his Role at Haldia as “ a role that
provides clear vision and strategic direction, that
builds culture, business ethic, structure and
processes to deliver outstanding business
performance and Good Corporate Governance”.
He is currently an Executive Director of Blackstone
India and before that he was a Member of the
Board of The Times of India Group where he spent
5 years to help build organizational capability,
culture and competitiveness.
His 45 years of corporate experience in a gamut of
functions that ranged from Manufacturing and
Planning to Corporate Development and General
Management have given him learning and insights
which have proved to be invaluable for
restructuring and reorganizing companies as well
as for managing partnerships and strategic
alliances in an international arena. He has been a
Board Member since the mid 80’s on several
Boards nationally and internationally.
Mr. Saldanha has been associated with various
chambers of commerce and industry bodies, both
in India and globally, in various capacities. He was
also the Founder President of Save the Children,
India and a Former President of Delhi Management
Association.
Mr. Richard SaldanhaIndependent
Non-Executive Director
http://www.ENIL/Annual Report 2010-11
23
Board of Directors
Forty five years of age, Mr. Prashant Panday is an
Engineering graduate in Electronics &
Communications, and has done his PGDM from IIM
Bangalore (1990).
Mr. Panday is the Executive Director and Chief
Executive Officer of the Company. He has been
associated with the Company since August 2000
and has played a key role in bringing in the radio
revolution in India. Over the last 10 years, he has
played a significant role in making Mirchi the #1
radio brand in the Country in terms of listenership
as well as revenues. In 2008, Mirchi was rated the
#1 media brand – ahead of The Times of India and
Star Plus – in the IMRB- Pitch survey. He leads a
team of about 800 professionals in the Company.
Mr. Panday has total experience of 21 years in
industries ranging from Advertising, Banking, FMCG
& Media. Prior to joining the Company, he has
worked with Citibank, Pepsi, HUL, Mudra and
Modi Revlon. His areas of strength include
Marketing & Sales, Analytics & Strategy and People
management. Mr. Panday is the Chairman of the
FICCI Radio committee, the Sr VP in the Association
of Radio Operators of India (AROI), a member of
the MRUC Governing Board, and a member of the
FICCI Entertainment Committee. He also served as a
member of the Ministry of I&B’s committee on
fighting Piracy. He is a speaker at various industry
forums.
Mr. Prashant Panday,Executive Director & CEO
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24
BOARD OF DIRECtORS (As on May 23, 2011)
Mr. Vineet Jain, Chairman
Mr. n. Kumar
Mr. Ravindra Kulkarni
Mr. Ravindra Dhariwal
Mr. Richard Saldanha
Mr. A. P. Parigi
Mr. Prashant Panday, Executive Director & CEO
MAnAGEMEnt tEAMMr. Prashant Panday, Executive Director & CEO
Mr. n. Subramanian, Group CFO
Mr. hitesh Sharma, Chief Operating Officer
Mr. Sameer Sainani, Chief Revenue Officer
Mr. tapas Sen, Chief Programming Officer
Ms. Sujata Bhatt, Chief Marketing Officer
and Head of HR
Mr. Mahesh Shetty, Chief Strategy Officer
Mr. Anand Parameswaran, Executive VP &
Regional Director- South Region
COMPANY SECRETARYMr. Mehul Shah
AUDItORSM/s. Price Waterhouse & Co.,
Chartered Accountants
LEGAL ADVISORSMrs. Pratibha M. Singh, Advocate
Mr. Krishnendu Datta,
K. Datta & Associates, Advocates & Solicitor
Halai & Co., Advocates
King & Partridge, Advocates, Notaries &
Solicitors
BAnKERSHDFC Bank Limited
REGIStRAR & ShARE tRAnSFERAGEntS (R & tA)Karvy Computershare Private Limited,
Unit: - Entertainment Network (India) Limited,
Plot No. 17 to 24, Vittal Rao Nagar,
Madhapur, Hyderabad - 500 081.
Ph : 040 44655000, Fax : 040 23420814.
REGIStERED OFFICE:4th Floor, A-Wing, Matulya Centre, Senapati
Bapat Marg, Lower Parel (West),
Mumbai - 400 013.
CORPORAtE OFFICE:Trade Gardens, Ground Floor, Kamala Mills
Compound, Senapati Bapat Marg,
Lower Parel (West), Mumbai - 400 013.
Ph: 022- 67536983.
CORPORAtE InFORMAtIOn
http://www.ENIL/Annual Report 2010-11
25ANNUAL REPORT 2010-11
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NOTICE is hereby given that the TWELFTH Annual General Meeting of the Members of ENTERTAINMENT NETWORK (INDIA) LIMITED will be
held at Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Near Mantralaya, Nariman Point, Mumbai-
400021, on Tuesday, August 30, 2011, at 3.00 p.m. to transact the following business:
Ordinary Business:1. To receive, consider and adopt the Audited Balance Sheet of the Company as at March 31, 2011, the Profit and Loss Account and Cash flow
statement for the financial year ended on that date and the Reports of the Board of Directors and Auditors thereon.
2. To appoint a Director in place of Mr. Narayanan Kumar (Mr. N. Kumar) who retires by rotation and being eligible, offers himself for
re-appointment.
3. To appoint a Director in place of Mr. Ravindra Dhariwal who retires by rotation and being eligible, offers himself for re-appointment.
4. To appoint Messrs Price Waterhouse & Co., Chartered Accountants - Firm Registration Number 007567S, as Auditors to hold office from
the conclusion of the Twelfth Annual General Meeting until the conclusion of the Thirteenth Annual General Meeting and to authorize the
Board of Directors to fix their remuneration as agreed to between the Board of Directors and the Auditors, in addition to reimbursement
of service tax and all out of pocket expenses incurred in connection with the audit of accounts of the Company.
Special Business:5. To consider and if thought fit, to pass with or without modification(s), the following Resolution as an Ordinary Resolution:-
“RESOLVED THAT Mr. Richard Saldanha, who was appointed by the Board of Directors as an Additional Director (Independent
Non-Executive Director) with effect from November 23, 2010 and who holds office upto the date of this Annual General Meeting of the
Company pursuant to the provisions of Section 260 of the Companies Act, 1956 (‘the Act’) and in respect of whom the Company has
received a notice in writing from a member under Section 257 of the Act, proposing Mr. Saldanha as a director of the Company, be and
is hereby appointed as a director of the Company liable to retire by rotation.”
6. To consider and if thought fit, to pass with or without modification(s), the following Resolution as a Special Resolution:-
“RESOLVED THAT pursuant to the provisions of Sections 198, 309 and other applicable provisions, if any, of the Companies Act, 1956 (‘the
Act’) or any statutory modification(s) or re-enactment thereof, the Articles of Association of the Company and subject to all applicable
approval(s) as may be required, the consent of the Company be and is hereby accorded to the Board of Directors for the payment of
commission for a period of 5 (five) years commencing from April 1, 2011; so long as the Company has a Managing or Whole-time Director,
Notice
26 ENTERTAINMENT NETWORK (INDIA) LIMITED
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such sum by way of commission not exceeding in the aggregate 1% (one percent) per annum of the net profits of the Company computed
in the manner laid down in Section 198 of the Act for each of the five financial years of the Company commencing from April 1, 2011, be paid
to and distributed amongst such Directors of the Company (resident in India) but excluding the Managing Director(s) and/or Whole-time
Director(s) as may be determined by the Board of Directors, the amount, proportion and manner of such payment and distribution shall
be as the Board may, from time to time, decide and failing such determination as to distribution - shall be divided equally amongst them;
RESOLVED FURTHER THAT if at any time during the aforesaid period of five financial years commencing from April 1, 2011, the Company
does not have any Managing or Whole-time Director, such sum by way of commission not exceeding in the aggregate 3% (three percent)
per annum of the net profits of the Company computed in the manner laid down in Section 198 of the Act be paid to and distributed
amongst such Directors of the Company (resident in India), as may be determined by the Board of Directors, for the then residual unexpired
part of the aforesaid period of five years; the amount, proportion and manner of such payment and distribution shall be as the Board of
Directors may, from time to time, decide and failing such determination as to distribution- shall be divided equally amongst them.”
Notes:(a) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE GENERAL MEETING IS ENTITLED TO APPOINT A PROXY, WHO NEED NOT BE A MEMBER, TO
ATTEND AND VOTE ON BEHALF OF HIMSELF/HERSELF. The instruments appointing the Proxy should be deposited at the Registered Office of
the Company not less than 48 (forty eight) hours before the commencement of the Meeting.
(b) The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday, August 23, 2011 to Tuesday, August
30, 2011, both days inclusive.
(c) The relevant Explanatory Statement pursuant to Section 173 of the Companies Act, 1956 (‘the Act’), setting out material facts relating to the
business at Item nos. 5 and 6 of the Notice as set out above are annexed hereto.
(d) In terms of Section 205C of the Act, the application money received by the Company for allotment of any Securities and due for refund,
which remain unpaid or unclaimed for a period of 7 (seven) years from the date they become due for payment shall be credited to the
Investor Education and Protection Fund (‘IEPF’).
(e) Particulars of the employees as required under the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of
Employees) Rules, 1975, as amended, are given in the annexure and forms part of the Directors’ report. In terms of Section 219(1)(b)(iv) of
the Act, the Report and Accounts are being sent to the Members excluding the aforesaid annexure. Any Member interested in obtaining
a copy of the said annexure may write to the Company Secretary at the registered office of the Company.
(f) The Ministry of Corporate Affairs (‘MCA’) has taken a ‘Green Initiative in the Corporate Governance’ by allowing paperless compliances
by companies. The Company shall use the e-mail addresses of the Members obtained from the Depositories / Depository Participants/
available with the Company’s Registrar & Share Transfer Agents- Karvy Computershare Private Limited (‘R & TA’) to send all future Members’
communications like notices, the Company’s Annual Report etc. through electronic mode. In case the Members have not furnished their
e-mail addresses, they are requested to furnish the same to their Depository Participants. Members are requested to notify immediately
of any change of address, e-mail address, bank account details:
(i) to their Depository Participants (DPs) in respect of their shareholdings in electronic (demat) form and
(ii) to the Company’s Registrar & Share Transfer Agents- Karvy Computershare Private Limited (‘R & TA’) , Unit:- Entertainment Network
(India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500081, Phone : 040 – 44655000, Fax : 040 – 23420814,
in respect of their shareholdings in physical form, if any, quoting their folio numbers.
(g) In terms of Section 109A of the Act, every holder of shares in a Company may at any time nominate, in the prescribed manner, a person
to whom his/her shares in the Company shall vest, in the event of his/her death. Nomination forms can be obtained from the R & TA.
(h) Members/ Proxies should bring the Attendance Slip sent herein duly filled in for attending the Meeting.
(i) Members are requested to bring their copy of the Annual Report to the Meeting.
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27ANNUAL REPORT 2010-11
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(j) Members desiring any information pertaining to the accounts are requested to write to the Company Secretary at an early date so as to
enable the Management to reply at the Annual General Meeting.
Important Communication to Members:
The Ministry of Corporate Affairs has taken a ‘Green Initiative in the Corporate Governance’ by allowing paperless compliances by the
companies. In accordance with the circulars issued by the Ministry of Corporate Affairs, companies can now serve, send various notices/
documents including Annual Report to its members through electronic mode to their e- mail addresses. To support this Corporate Social
Responsibility initiative in full measure, Members who have not registered their e-mail addresses, so far, are requested to register
their e-mail addresses with the Depository through their concerned Depository Participants, in respect of electronic holdings. Members
who hold shares in physical form are requested to kindly register their e-mail addresses to the Company’s Registrar & Share Transfer
Agents- Karvy Computershare Private Limited (‘R & TA’) at the aforesaid address stated at para (f). The Company shall use the e-mail
addresses of the Members obtained from the Depositories / Depository Participants/ available with the ‘R & TA’ to send all future
Members’ communications like notices, the Company’s Annual Report, documents etc. through electronic mode. This will ensure instant
and definite receipt of the Members’ communication by them.
By Order of the Board of DirectorsFor Entertainment Network (India) Limited
Mehul ShahVP – Compliance
& Company Secretary
Mumbai, May 23, 2011.
Registered Office:
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg,
Lower Parel (West), Mumbai - 400 013.
Notice
28 ENTERTAINMENT NETWORK (INDIA) LIMITED
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EXPLANATORY STATEMENTExplanatory Statement as required under Section 173 of the Companies Act, 1956
The following Explanatory Statement sets out all material facts relating to the business mentioned under Item Nos. 5 and 6 of the accompanying
Notice dated May 23, 2011.
1. Item no. 5:- The Board of Directors appointed Mr. Richard Saldanha as an Additional Director (Independent Non-Executive Director) with
effect from November 23, 2010 pursuant to the provisions of Section 260 of the Companies Act, 1956, read with the Articles of Association
of the Company. Accordingly Mr. Saldanha holds office upto the date of this Annual General Meeting and being eligible, offers himself
for re-appointment. Pursuant to the provisions of Section 257 of the Companies Act, 1956, a notice in writing has been received from a
member proposing Mr. Saldanha as a director of the Company liable to retire by rotation, along with requisite deposit.
2. Mr. Saldanha, a graduate Mechanical Engineer, served Hindustan Lever & Unilever plc. with distinction for 30 years. He was Technical
Director of Unilever Venezuela, Vice-President – Supply Chain for Unilever Andina, (Venezuela, Colombia, Ecuador) rising to be Chairman
and CEO of Unilever Peru and a Member of the Unilever Latin America Board. As Managing Director of Haldia Petrochemicals Ltd, a 1.5
BN $ enterprise, Mr. Saldanha brought to the Company, experience and expertise gained in Unilever Companies worldwide as well as
in India.
3. He is currently an Executive Director of Blackstone India and before that, he was a Member of the Boards of The Times of India Group
where he spent 5 years to help build organizational capability, culture and competitiveness.
4. Mr. Saldanha also has wide international experience gained as Founder Member of the National Board for Advertising Self Regulation
(Peru); Founder Member of the National Board for e-Commerce (Peru); President of the International School in Valencia, Venezuela;
Member of the Dutch–Peru Chamber of Commerce; Member of the UK–Peru Chamber of Commerce.
5. On return to India, Mr. Saldanha was Chairman, Eastern Region of the Indo-Italian Chamber of Commerce & Industry; Vice-President,
Eastern India Council of the Indo-American Chamber of Commerce; Member of the Confederation of Indian Industry – Eastern Region;
Member of the Indian Chamber of Commerce, Member of the Bengal Chamber of Commerce & Industry and Member of the National
Advisory Board for Chemtech World Expo. He was Founder President of Save the Children, India and a Former President of Delhi
Management Association.
6. His 45 years of corporate experience in a gamut of functions that ranged from Manufacturing and Planning to Corporate Development
and General Management have given him learning and insights which have proved to be invaluable for restructuring and reorganizing
companies as well as for managing partnerships and strategic alliances in an international arena.
7. Mr. Richard Saldanha does not hold any equity share in the Company as on date of this Notice. Mr. Saldanha may be considered to be
concerned or interested in Item no. 5 of the Notice.
8. The Board of Directors commends the Ordinary Resolution at Item no. 5 of the Notice for approval by the Members.
9. Item No. 6 : The Company operates in a competitive environment which is expected to further intensify. The Directors are required to
take complex business decisions in small time windows and therefore compelled to commit their time and energies for the Company’s
business. Today, the Board of Directors is required to ensure compliance with stringent Accounting Standards and high level of Corporate
Governance. It is therefore proposed to pay to the Directors of the Company, excepting the Managing Director and/ or Whole-time
Director, commission which shall not exceed the limits set out herebelow.
10. The first part of the Special Resolution at Item No. 6 covers a situation where there is a Managing or Whole-time Director(s). In such an
event, pursuant to the provisions of Section 309 and other applicable provisions, if any, of the Companies Act, 1956 (‘the Act’), it is proposed
to pay to the Directors of the Company (resident in India), but excluding Managing and/or Whole-time Director(s), such remuneration by
way of commission related to the net profit of the Company as may be decided by the Board of Directors not exceeding in the aggregate
one percent per annum of the net profits of the Company for a period of five financial years commencing from April 1, 2011.
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29ANNUAL REPORT 2010-11
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11. The second part of the said Special Resolution seeks to cover a situation whereby, for some reason, the Company, during the aforesaid
period of five financial years commencing from April 1, 2011, does not have a Managing or Whole-time Director(s). In such an event
pursuant to the provisions of Section 309 and other applicable provisions, if any, of the Act, it is proposed to pay to the Directors of the
Company (resident in India) such remuneration by way of commission related to the net profit of the Company as may be decided by the
Board of Directors for the then residual unexpired part of the said period of five years, but not exceeding in the aggregate three percent
of the net profits of the Company.
12. Net profit of the Company shall be computed in the manner referred to in Section 198 and other applicable provisions of the Act.
13. In either case, the amount, proportion, manner and distribution of commission amongst the Directors would be determined by the
Board of Directors and failing such determination as to distribution, commission to be distributed amongst them equally. The proposed
commission shall be over and above the sitting fees payable to the Directors.
14. The Special Resolution is necessary having regard to the provisions of Section 309(4) of the Act. The Board of Directors, therefore,
commends the Special Resolution at Item no. 6 of the accompanying Notice for approval by the Members.
15. All Directors of the Company other than Mr. Prashant Panday, the Executive Director of the Company, may be considered to be concerned
or interested in the said special resolution, since it relates to remuneration/ commission which may become payable to them.
By Order of the Board of DirectorsFor Entertainment Network (India) Limited
Mehul ShahVP – Compliance
& Company Secretary
Mumbai, May 23, 2011.
Registered Office:
4th Floor, A-Wing, Matulya Centre,
Senapati Bapat Marg,
Lower Parel (West), Mumbai - 400 013.
Notice
30 ENTERTAINMENT NETWORK (INDIA) LIMITED
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ANNEXURE TO ITEMS 2, 3 AND 5 OF THE NOTICE.
Details of Directors seeking appointment/ re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of
the Listing Agreement).
Name of the Director Mr. N. Kumar Mr. Ravindra Dhariwal Mr. Richard Saldanha
Date of Birth January 28, 1950 September 11, 1952 February 3, 1944
Nationality Indian Indian Indian
Date of Appointment on the Board
November 5, 2005 December 31, 2002 November 23, 2010
Qualifications Engineering Graduate in Electronics and Communication from the College of Engineering, Anna University
B.Tech (Chemical Engineering) from the Indian Institute of Technology, Kanpur and also holds a Post Graduate Diploma in Management (Marketing and Finance) from the Indian Institute of Management, Calcutta
Graduate Mechanical Engineer from College of Engineering- Pune
Shareholding in the Company 5,580 equity shares of Rs. 10/- each
Nil Nil
List of Directorships held in other Companies
Bharti Airtel Limited, Bharti Infratel Limited, Times Innovative Media Limited, MRF Limited, Take Solutions Limited, Cochin Shipyard Limited, eG Innovations Private Limited, eG Innovations Pte Limited, Madhura Kumar Properties Private Limited, N. Kumar Investment Holdings Private Limited, Cubbon Road Properties Private Limited, Nani Palkhivala Arbitration Centre (Sect. 25 Company)
Bennett, Coleman & Company Limited, Banhem Estate & IT Parks Limited, Media Network & Distribution (India) Limited, The Sandesh Limited, Times Global Broadcasting Co. Limited, Times Innovative Media Limited, Times Internet Limited, Times VPL Limited, Vardhaman Publishers Limited, Zoom Movies (TV) Limited, Zoom Entertainment Network Limited, Times Infotainment Media Limited, Aqua Agri Private Limited
CMS Computers Limited, Gateway Rail Freight Limited, Gokaldas Exports Limited, Blackstone Advisors India Private Limited, MTAR Technologies Private Limited, Nuziveedu Seeds Limited
Committee membership 1. Entertainment Network (India) Limited: [Chairman of Audit Committee, Member of Remuneration/ Compensation Committee]
2. Bharti Airtel Limited: [Chairman of Audit Committee]
3. Bharti Infratel Limited: [Chairman of Audit Committee]
4. Take Solutions Limited: [Chairman of Shareholders’/ Investors’ Grievance Committee]
5. Times Innovative Media Limited: [Member of Audit Committee]
6. Cochin Shipyard Limited: [Chairman of Audit Committee]
1. Entertainment Network (India) Limited: [Chairman of Shareholders’/ Investors’ Grievance Committee, Member of Audit Committee, Member of Remuneration/ Compensation Committee]
2. Bennett, Coleman & Co. Limited: [Member of Audit Committee]
3. Times Infotainment Media Limited: [Member of Audit Committee, Member of Compensation Committee]
4. Times Innovative Media Limited: [Member of Audit Committee]
1. Entertainment Network (India) Limited: [Member of Audit Committee, Member of Remuneration/ Compensation Committee]
2. MTAR Technologies Private Limited: [Member of Audit Committee, Member HR & Remuneration Committee]
Brief resume of all the Directors of the Company has also been furnished separately in the Annual Report.
Notice
31ANNUAL REPORT 2010-11
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Directors’ Report
Dear Members,
Your Directors have pleasure in presenting this Twelfth Annual Report together with the Audited Accounts of the Company for the financial year
ended March 31, 2011.
1. Financial HighlightsAmount in Rupees
Financial year 2010 – 2011
Financial year 2009 – 2010
Income 2,835,665,618 2,311,850,421
Profit before Tax & Exceptional item 609,734,330 182,748,146
Profit on sale of Subsidiary 126,848,239 —
Tax Expenses 214,493,272 4,079,063
Profit after Tax 522,089,297 178,669,083
Profit brought Forward 952,991,947 774,322,864
Equity 476,704,150 476,704,150
Transfer to General Reserve — —
Surplus carried to Balance Sheet 1,475,081,244 952,991,947
2. Financial PerformanceYour Company retained its position as the market leader in Private FM Radio Broadcasting Industry. Total income of the Company
increased from Rs. 2,311,850,421 during the previous year to Rs. 2,835,665,618 during the year under review. Profit after tax was higher at
Rs. 522,089,297. The performance is discussed in detail in the Management Discussion and Analysis Report which forms part of the
Annual Report.
3. OperationsThis year saw the world economy coming back on track. The IMF reported that world economy grew at 5% in 2010 and is likely to grow at
4.5% in 2011 and 2012. The world advertising market also came back on the growth path with Zenith Optimedia reporting that the world
ad market grew by 5.5% in 2010. The momentum is expected to continue and the growth is expected to be 4.2%, 5.8% and 5.5% in 2011,
32 ENTERTAINMENT NETWORK (INDIA) LIMITED
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2012 and 2013 respectively. The Indian economy, which was not adversely affected by the global downturn has also recovered and is
expected to have grown 8% this year according to RBI estimates. The Indian advertising Industry which is directly dependent on the overall
economy also had an impressive growth of nearly 17% this year. It is further expected to grow at 13% till 2015.
The overall recovery has had a positive impact on your Company’s revenue performance. The Company’s total income grew by nearly
23% during the year under review.
Your Company continued to keep a keen eye on costs and increasing the overall productivity of the Company. We are committed to
maintaining a lean and smart operation. There is also a great deal of focus in keeping the culture of the Company vibrant and meritocratic
so that talent is retained in the Company.
Phase III of radio expansion has been pending for quite a while now and is expected finally to be announced in the next few months.
Your Company is gearing up to face the challenges and tap the opportunities that Phase III would throw at us. With the sale of the
Company’s entire equity stake in Times Innovative Media Limited (erstwhile subsidiary of the Company- engaged in the ‘Out Of Home
Media business’), your Company has ensured that it is not burdened by the capital requirements of ‘Out Of Home Media business’ and is
able to garner resources and funds for the expansion plans of the radio business in Phase III.
Your Company has benefited from some other important developments of this year. The Hon’ble Copyright Board passed an order this
year which would cap the overall royalty payout by Radio broadcasters to music providers at 2% of the revenues of the broadcaster. This
will have a positive impact on your Company’s profitability. Many music providers have challenged this order and the final verdicts on all
these appeals are expected in due course of time. The Interim appeals were challenged in the Hon’ble Supreme Court and the Hon’ble
Supreme Court has refused to stay the said Copyright Board’s order. We are confident that the orders of the Hon’ble Copyright Board
would continue to be upheld as it has been arrived at after an elaborate and exhaustive hearings.
Your Company has continued its focus on strengthening its brand this year as well. Radio Mirchi continued to be the leader in 3 (Mumbai,
Delhi and Kolkata) - out of the 4 RAM markets. While its lead has been challenged on some occasions, we are confident that we would
attain a consistent leadership position in these markets. We continue to be a very close second in Bangalore and actually got to the
leadership position on a few occasions.
Your Company once again achieved the leadership position in the only PAN India measurement of Radio through the IRS (Indian Readership
Survey). The survey recorded Radio Mirchi’s listenership at 41.2 mn, which is significantly higher than the next radio brand.
Your Company is very aware of the challenges and benefits that the increasing proliferation of digitization is introducing. We have made
good progress on both the mobile and web platforms. Your Company had launched a mobile VAS product – Mirchi Mobile earlier this
year, which has seen reasonable success. We are committed to making the brand a significant entity in the digital space as well and are
working on creating processes which help create synergy between our on-air content and digital content.
Your Company hosted the 3rd edition of the Mirchi Music awards this year. This tribute to the music fraternity –the artists, composers,
lyricists - grew even bigger this year with the introduction of new categories of awards and an increased support from the fraternity itself.
We will continue to making this award more successful and bigger in scale in the coming years.
Your Company was awarded with many honors this year. The most prestigious of them was being declared the most successful radio
channel of the year by FICCI. We have been conferred this award two years in a row and are the only radio company to have received
this award till date. The morning show of Delhi was awarded a Silver at the New York Festival awards this year in the category of Best
Human Story. Radio Mirchi was also awarded the Power Brand of India in the Entertainment category by Planman consulting. We were
the only radio station to have been bestowed with this honor. Some of the other media brands which were honored were Times of India,
NDTV and Star Plus.
Your Company is excited about the opportunities that the future holds. An economy that is growing, a sense of optimism amongst the
advertisers, Phase III of FM radio expansion, a good year behind us – all of this gives us confidence that we will be able to meet your
expectations in the next year. We are, as always, committed to creating value for the business, the industry and above all you.
4. DividendIn order to conserve the resources to augment future growth, your Directors do not recommend any dividend for the financial year
2010 - 2011.
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5. Fixed DepositsThe Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the date of
the Balance Sheet.
6. DirectorsMr. Richard Saldanha was appointed as an Additional Director (Independent Non-Executive Director), with effect from November 23,
2010 pursuant to the provisions of Section 260 of the Companies Act, 1956. Accordingly, Mr. Saldanha holds office up to the date of the
forthcoming Annual General Meeting and being eligible, offers himself for appointment. Pursuant to the provisions of Section 257 of the
Companies Act, 1956, a notice in writing has been received from a Member proposing Mr. Saldanha as a Director of the Company.
Mr. Deepak M. Satwalekar (Independent Non-Executive Director) resigned from the Board of Directors of the Company effective from
March 30, 2011. The Board of Directors wishes to place on record their appreciation for the valuable services rendered by Mr. Satwalekar
during his tenure.
In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association of the Company, Mr. N. Kumar and
Mr. Ravindra Dhariwal retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
Brief resume of the Directors proposed to be appointed, nature of their expertise in specific functional areas, names of the companies in
which they hold directorships and the memberships / chairmanships of Committees of the Board and their shareholding in the Company,
as stipulated under the Clause 49 of the Listing Agreement entered into with the Stock Exchanges, are set out in the Annexure to the Notice
forming part of the Annual Report.
7. Audit CommitteeThe Audit Committee of the Company presently comprises Mr. N. Kumar (Chairman), Mr. Ravindra Dhariwal, Mr. Ravindra Kulkarni and Mr.
Richard Saldanha. The Internal Auditors of the Company report directly to the Audit Committee. Brief description of the terms of reference
of the Audit Committee has been furnished in the Report on Corporate Governance.
8. AuditorsMessrs Price Waterhouse & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the Twelfth
Annual General Meeting and have confirmed their eligibility and willingness to accept office, if appointed.
Members are requested to appoint Messrs Price Waterhouse & Co., Chartered Accountants, as the Statutory Auditors of the Company for
the period commencing from the conclusion of the Twelfth Annual General Meeting until the conclusion of the Thirteenth Annual General
Meeting and to fix their remuneration.
9. Buy-Back of SharesDuring the financial year under review, the Company has not offered to buy-back any of its outstanding shares.
10. Conservation of Energy The operations of the Company are not energy intensive. Nevertheless, continuous efforts are being made by the Company and its
employees to reduce the wastage of scarce energy resources.
11. Foreign Exchange Earnings & OutgoStatement pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988:
(i) Activities relating to export, initiatives to increase exports, developments of new export markets for products and services and export
plan:
The Company is actively exploring profitable business opportunities in the export market.
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(ii) Total foreign exchange earned and used:
Amount in Rupees
Financial Year
2010 - 2011
Financial Year
2009 – 2010
Foreign exchange earnings — —
Foreign exchange outgo 7,454,160 2,263,137
12. Technological Absorption, Adaptation and Innovation Statement pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, is hereunder:
a) Efforts made towards technology absorption, adaptation and innovation N.A.
b) Benefits derived as a result of the above efforts N.A.
c) Information regarding imported technology N.A.
13. Research & Development
a) Specific areas in which Research and Development is carried out by the Company N.A.
b) Benefits derived as a result of the above research and development N.A.
c) Future plan of action N.A.
d) Expenditure on Research and Development N.A.
14. Particulars of EmployeesParticulars of the employees as required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are given in the annexure appended hereto and forms part of this report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report and Accounts are being sent to all the Members excluding the aforesaid annexure. Any Member interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.
15. Share Capital & Listing of SecuritiesThe equity shares of the Company are listed and admitted to dealings on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) effective from February 15, 2006. Annual Listing Fee has been paid to each exchange.
16. Management Discussion and Analysis ReportManagement Discussion and Analysis Report for the financial year under review as stipulated in Clause 49 of the Listing Agreement entered into with the Stock Exchanges is set out in a separate section forming part of the Annual Report.
17. Corporate GovernanceThe Company is adhering to good Corporate Governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreements entered into with the Stock Exchanges. A separate report on Corporate Governance is enclosed as a part of the Annual Report along with the Certificate from a practicing company secretary confirming compliance with the conditions of Corporate Governance. Observations of the practicing Company Secretary in the aforesaid Certificate has been adequately dealt with in the report on Corporate Governance, which forms part of the Annual Report.
18. Directors’ Responsibility StatementPursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, hereby confirm that:(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material
departures;
(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied the suggested accounting policies consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended on March 31, 2011 and of the profit of the Company for that period;
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(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of
the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,
to the best of their knowledge and ability;
(iv) they have prepared the annual accounts on a going concern basis.
19. Subsidiary CompaniesAlternate Brand Solutions (India) Limited is engaged in the business of event management/ experiential marketing under the brand and
style ‘360°’.
On December 29, 2010, the Company sold its entire equity stake of 83.44 % in Times Innovative Media Limited [‘TIM’] to Bennett, Coleman
& Company Limited [‘BCCL’]. BCCL is the parent company of the Company (‘ENIL’). Consequent to the sale, TIM ceased to be a subsidiary
of the Company with effect from December 30, 2010.
Based on the outstanding debt in the Balance Sheet of TIM as on the date of the consummation of the transaction, the enterprise value for
the sale amounted to Rs. 130.4 crores. Pursuant to the sale, ENIL received a cash consideration of Rs. 45 crores for its equity investment of
Rs. 32 crores in TIM. Further, it also received full repayment for the loans advanced to TIM and amounting to Rs. 58 crores as on the date
of the consummation of transaction. The resultant cash inflows helped ENIL retire its entire debt and build sizeable cash reserves for the
upcoming Phase III expansion. The sale also relieved ENIL from the burden of meeting the sizeable funding requirements of TIM. BCCL also
assumed all the obligations and liabilities under the guarantees provided by ENIL on account of TIM.
As per Section 212 of the Companies Act, 1956, the Company is required to attach the Balance Sheet, Profit and Loss Account and other
documents of its subsidiary companies to the Balance Sheet of the Company. Pursuant to the approval from the Government of India,
Ministry of Corporate Affairs vide their letter No. 47/51/2011-CL-III dated February 1, 2011, the Balance Sheet, Profit and Loss Account and
other documents of the Subsidiary Company are not attached to the Balance Sheet of the Company. Further it may also be noted that vide
General Circular No. 2/ 2011 dated February 8, 2011 issued by the Government of India (Ministry of Corporate Affairs), general exemption
has been granted to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the said
circular.
Relevant financial information of the Subsidiary Company is disclosed in the Annual Report. The Company shall make available the Annual
Accounts and the related detailed information of its subsidiary to any Member of the Company or its subsidiary who may be interested
in obtaining the same at any point of time. These documents will also be available for inspection during business hours at the Registered
Office. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.
20. Consolidated Financial StatementsIn accordance with the Accounting Standard 21 on Consolidated Financial Statements, the audited Consolidated Financial Statements are
annexed and form part of the Annual Report.
21. AcknowledgementsYour Directors take this opportunity to convey their appreciation to all the members, listeners, advertisers, media agencies, dealers,
suppliers, bankers, regulatory and government authorities and all other business associates for their continued support and confidence in
the management of the Company. Your Directors are pleased to place on record their appreciation of the consistent contribution made by
employees at all levels through their hard work, dedication, solidarity and cooperation and acknowledge that their efforts have enabled
the Company to achieve new heights of success.
For and on behalf of the Board of Directors
Vineet JainMumbai, May 23, 2011 Chairman
Registered Office:4th Floor, ‘A’ Wing, Matulya Centre,Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013.
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Corporate Governance refers to the systems and policies that influence a corporation’s administration. The core principles of Corporate
Governance practices are fairness, transparency, accountability and responsibility. Effective Corporate Governance emphasizes efficiency,
accountability and adaptability to the changing climate. Corporate Governance is a process to manage the business affairs of the company
towards enhancing business prosperity and accountability with the objective of realizing long term shareholder value, while taking into account
the interests of the other stakeholders.
The equity shares of the Company are listed and admitted to dealings on Bombay Stock Exchange Limited (BSE) and National Stock Exchange
of India Limited (NSE). Pursuant to the provisions of the Clause 49 of the Listing Agreement, a report on Corporate Governance for the financial
year ended March 31, 2011 is furnished below:
1. Company’s Philosophy on Code of GovernanceYour Company’s philosophy on Corporate Governance envisages attainment of highest level of integrity, fairness, transparency, equity and
accountability in all facets of its functioning and in its interactions with shareholders, employees, government, regulatory bodies, listeners
and the community at large. Your Company has been upholding fair and ethical business and corporate practices and transparency in
its dealings.
The Company reiterates its commitment to adhere to the highest standards of Corporate Governance which is founded upon a rich legacy
of integrity, fairness, transparency, equity and accountability. The Company recognizes that good Corporate Governance is a continuing
exercise and is committed to follow and pursue the highest standard of governance in the overall interest of the stakeholders.
In compliances with the regulatory requirements and effective implementation of Corporate Governance practices, the Company has
adopted the following codes of governance in accordance with the applicable regulations of Securities and Exchange Board of India:-
�� Code of Conduct for Prevention of Insider Trading; for regulating the dealings of the Directors and Employees of the Company
possessing or likely to possess price sensitive information, in the securities of the Company;
�� Code of Corporate Disclosure Practices; for ensuring timely and adequate disclosure of price sensitive information;
�� Code of Ethics and Business Principles for Directors and Employees under the SEBI (Prohibition of Insider Trading) Regulation.
These codes and their effective implementation re-affirm the commitment of the Company towards putting in place the highest standard
of Corporate Governance in every sphere of its operations. The Company’s philosophy of Corporate Governance is not only consistent with
the statutory requirements but also underlines our commitment to operate in the best interest of the stakeholders.
The Company has a strong Enterprise Risk Management framework which is administered by the Senior Management. This team
periodically reviews the risk events that could affect the Company and initiates appropriate mitigation procedures and also reviews the
progress made with respect to the mitigation plans and the effectiveness of the same in addressing the relevant risk. The Company has
laid down procedures to inform Board members about the risk assessment and minimization procedures and these procedures are
periodically reviewed.
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2. Board of Directors
(i) Composition of the Board of Directors and other directorships and committee membership of the Directors:
The Company believes that an active, well-informed and independent Board of Directors is vital to achieve the apex standard of
Corporate Governance. The Board of Directors of the Company comprises an optimal combination of executive, non-executive
and independent directors so to preserve and maintain the independence of the Board. The Board of Directors comprises eminent
persons with professional experience in varied fields and presently comprises seven directors. Brief profile of all the Directors of the
Company has been furnished separately in the Annual Report.
The Certificate dated May 23, 2011, issued by the practicing Company Secretary on the compliance of conditions of Corporate
Governance by the Company during the financial year under review contains two observations. The first observation relates to the
period from July 1, 2010 to November 22, 2010 comprising of 145 days. The second observation relates to the period from March
30, 2011 to March 31, 2011 i.e. 1 day. During the two time periods cited above, compliances under Clause 49 I (A)(ii) relating to the
composition of the Board of Directors of the Company could not be observed.
The Company wishes to place on record that during the first instance, the Company completed all the formalities required to
induct independent director to the Board. However, the induction of the independent director required approval/ permission/ no
objection from the Ministry of Information & Broadcasting, Government of India. The No Objection from the Ministry of Information &
Broadcasting was received only on November 23, 2010. Consequently, the appointment of independent director became effective
only from November 23, 2010,
In the second instance, Mr. Deepak Satwalekar (independent non- executive director) resigned from the Board of Directors effective
from March 30, 2011. Consequent to his resignation, the number of members on the Board of the Company reduced to seven
directors - three independent non- executive directors, three non- executive directors and one executive director. Clause 49 I (C) (iv)
of the Listing Agreement stipulates that an independent director who resigns from the Board of the Company shall be replaced by
a new independent director within a period not exceeding 180 days from the day of such resignation. The stipulated period of 180
days expires on September 26, 2011.
The Company is in the process of identifying a suitable independent director. However, the appointment of the independent director
shall be subject to approval/ permission/ no objection from the Ministry of Information & Broadcasting, Government of India and
shall be effective only from the date of such permission.
The composition of the Board of Directors, attendance at Board Meetings (BM) held during the financial year under review and at the
last Annual General Meeting (AGM):
Name of Director Category Financial Year 2010 – 2011
Attendance at
Board Meeting Last AGM
Mr. Vineet Jain Non-Executive Chairman 4 Yes
Mr. Deepak Satwalekar * Independent Non-Executive 4 Yes
Mr. N. Kumar Independent Non-Executive 3 Yes
Mr. Ravindra Dhariwal Non-Executive 5 Yes
Mr. Ravindra Kulkarni Independent Non-Executive 3 Yes
Mr. A. P. Parigi Non-Executive 5 Yes
Mr. Richard Saldanha ** Independent Non-Executive 0 N.A.
Mr. Prashant Panday *** Whole-time Director 4 Yes
* Mr. Deepak Satwalekar resigned from the Board of Directors of the Company effective from March 30, 2011.
** Mr. Richard Saldanha was appointed as an Additional Director with effect from November 23, 2010.
*** Mr. Prashant Panday was appointed as the Whole-time Director designated as ‘Executive Director & Chief Executive Officer’ of
the Company with effect from July 1, 2010.
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Number of directorships, memberships and chairmanships of the Directors of the Company in other public limited companies as on
the date of this report is as follows:
Name of Director Category As on date of this report
No. of other
Directorships#
Other Committee positions#
Member Chairman
Mr. Vineet Jain Non-Executive Chairman 10 0 0
Mr. N. Kumar Independent Non-Executive 6 1 4
Mr. Ravindra Dhariwal Non-Executive 12 3 0
Mr. Ravindra Kulkarni Independent Non-Executive 5 3 2
Mr. A. P. Parigi Non-Executive 8 3 0
Mr. Richard Saldanha Independent Non-Executive 3 0 0
Mr. Prashant Panday Whole-time Director 0 0 0
# For the purpose of considering the number of other directorships and committee positions, all public limited companies, whether
listed or not, have been included and all other companies including private limited companies, foreign companies and companies
under Section 25 of the Companies Act, 1956, have been excluded and Committees other than Audit Committee and Shareholders’/
Investors’ Grievance Committee have been excluded.
None of the Directors are related with each other (inter-se) within the meaning of Clause 49 IV (G) (ia) of the Listing Agreement.
None of the above referred Non-executive Directors have any material pecuniary relationship or transaction with the Company,
which would affect the independence or judgment of the Board of Directors.
The Company has also not entered into any materially significant transactions with its Promoters, Directors or their relatives or with
the Management etc. that may have potential conflict with the interest of the Company at large.
(ii) Board Meetings and Annual General Meeting held:
Five Board Meetings were held during the financial year under review, the dates of which were; May 19, 2010, July 8, 2010, August
6, 2010, November 3, 2010 and February 3, 2011.
The Eleventh Annual General Meeting was held on September 7, 2010.
(iii) Declaration by the Whole-time Director & Chief Executive Officer under Clause 49(I)(D) of the Listing Agreement regarding adherence
to the Code of Conduct is forming part of the Report on Corporate Governance.
(iv) A certificate from the Whole-time Director & Chief Executive Officer and Chief Financial Officer, as stipulated under Clause 49 (V) of
the Listing Agreement was placed before the Board of Directors.
(v) In the preparation of the Annual accounts, the applicable accounting standards have duly been followed and there are no material
departures.
3. Audit Committee(i) Brief description of terms of reference:
The Company recognizes that the Audit Committee is indispensable for ensuring accountability amongst the Board, Management and
the Auditors, who are responsible for sound and transparent financial reporting. The Audit Committee is responsible for overseeing
the processes related to the financial reporting and information dissemination. It assists the Board in its responsibility for overseeing
the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and
regulatory requirements. The primary objective of the Audit Committee of the Company is to monitor and effectively supervise the
financial reporting process of the Company with a view to ensure accurate, timely and proper disclosures and transparency and
integrity of financial reporting.
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The role and terms of reference of the Audit Committee inter alia include review of internal audit reports, review of financial
statements, both quarterly and annual, before submission to the Board, review of Management Discussion and Analysis of financial
condition and results of operations and review of performance of statutory and internal auditors and adequacy of internal control
systems and other matters in conformity with the requirements of the Listing Agreement entered into with the Stock Exchanges and
applicable provisions of the Companies Act, 1956.
(ii) Composition of the Audit Committee:
The Audit Committee of the Company is constituted in conformity with the provisions of Clause 49 of the Listing Agreement and
Section 292A of the Companies Act, 1956.
The Audit Committee comprises the following Directors as on date of the Report:
Mr. N. Kumar – Chairman (Independent Non-Executive Director)
Mr. Ravindra Kulkarni (Independent Non-Executive Director)
Mr. Ravindra Dhariwal (Non-Executive Director)
Mr. Richard Saldanha (Independent Non-Executive Director)
All the Members of the Audit Committee are financially literate and have relevant accounting and financial management expertise
as required under Clause 49 of Listing Agreement. The Company Secretary acts as the Secretary to the Audit Committee.
(iii) Meetings and attendance during the year:
During the financial year under review, the Audit Committee met four times, i.e. on May 19, 2010; August 6, 2010; November 3, 2010
and February 3, 2011. Details of attendance of each member are as follows:
Name Number of Audit Committee Meeting attended
Mr. N. Kumar 3
Mr. Ravindra Kulkarni 3
Mr. Ravindra Dhariwal 4
Mr. Deepak Satwalekar * 2
Mr. Richard Saldanha ** 0
* Mr. Deepak Satwalekar was inducted as a member to the Audit Committee with effect from November 2, 2010. He resigned from
the Board and Committees effective from March 30, 2011.
** Mr. Richard Saldanha was inducted as a member to the Audit Committee with effect from February 3, 2011.
4. Subsidiary CompaniesAs on date of this Report, the Company has one subsidiary company, viz. Alternate Brand Solutions (India) Limited. The Audit Committee
of the Company reviews inter alia the financial statements of its subsidiary company etc. as stipulated under Clause 49 of the Listing
Agreement. The minutes of the Board Meetings of unlisted subsidiary company have been placed at the Board meetings of the Company
and other relevant provisions of the said Clause of the Listing Agreement are duly complied with, to the extent applicable.
Times Innovative Media Limited was subsidiary company till December 29, 2010.
5. Remuneration / Compensation Committee(i) Brief description of terms of reference:
The Remuneration/ Compensation Committee has been constituted to review and recommend the remuneration payable to the
executive directors and senior management of the Company based on their performance and defined assessment criteria.
Brief terms of reference of the Remuneration/ Compensation Committee include:
�� Determining the Company’s policy on specific remuneration packages for the Company’s Managing/ Joint Managing/ Deputy
Managing/ Whole time/ Executive Directors, including pension rights and any compensation payment;
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�� Determining and / or recommending to the Board of Directors, the remuneration packages of the Company’s Managing/ Joint
Managing/ Deputy Managing/ Whole time/ Executive Directors, including all elements of the remuneration package (i.e. salary,
benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed component
and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);
�� Reviewing and determining the remuneration packages of the Company’s top executives/ key management personnel who
are one level below the Managing/ Joint Managing/ Executive Directors, including all elements of their remuneration package
(i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed
component and performance linked incentives along with the performance criteria, service contracts, notice period, severance
fees etc.);
�� Implementing, supervising and administering the present and future Employee Stock Option Scheme(s);
�� Any other matter duly specified under the applicable provisions of the Companies Act, 1956, read with Clause 49 of the Listing
Agreement.
(ii) Composition, name of members and Chairperson:
The Remuneration / Compensation Committee of the Company is constituted in conformity with the Clause 49 of the Listing
Agreement read with Schedule XIII and other applicable provisions of the Companies Act, 1956.
The Remuneration / Compensation Committee comprises the following Directors as on date of the Report:–
Mr. N. Kumar (Independent Non-Executive Director)
Mr. Ravindra Kulkarni (Independent Non-Executive Director)
Mr. Ravindra Dhariwal (Non-Executive Director)
Mr. Richard Saldanha (Independent Non-Executive Director)
(iii) Meetings and attendance during the year:
During the financial year under review, the Remuneration / Compensation Committee met four times, i.e. on May 19, 2010; August 6,
2010; November 3, 2010 and February 3, 2011. Details of the attendance of each member are as follows:
Name Number of Remuneration /
Compensation Committee Meeting attended
Mr. Deepak Satwalekar * 3
Mr. N. Kumar 3
Mr. Ravindra Kulkarni 3
Mr. Ravindra Dhariwal 4
Mr. Richard Saldanha ** 0
* Mr. Deepak Satwalekar resigned from the Board and Committees effective from March 30, 2011.
** Mr. Richard Saldanha was inducted as a member to the Remuneration / Compensation Committee with effect from February 3,
2011.
(iv) Remuneration policy:
The remuneration policy of the Company is based upon well defined criteria such as success and performance of its managerial
persons and the Company, industry benchmarks, the profile of the incumbent, the responsibilities shouldered etc. Through its
remuneration policy, the Company endeavors to attract, retain, develop and motivate its high skilled and dedicated workforce.
The Non-Executive Directors did not draw any remuneration (other than sitting fees) from the Company during the financial year
under review.
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(v) Details of remuneration:
(a) Details of remuneration paid to the Whole-time Director during the year 2010 – 2011 is given below:
(Amount in Rupees)
Name Salary Benefits * Perquisites Total
Mr. Prashant Panday, Whole-time
Director (with effect from July 1, 2010).
13,313,491 346,005 25,502 13,684,998
* Also includes Company’s contribution to Provident and Superannuation Funds.
Notes:
�� Mr. Prashant Panday is holding the office of Whole-time Director designated as ‘Executive Director & Chief Executive Officer’
of the Company with effect from July 1, 2010.
�� Appointment, terms, conditions and payment of remuneration to the Whole-time Director is governed by the resolution(s)
passed by the Remuneration/ Compensation Committee, Board of Directors and Members of the Company and approval
from the Government of India, Ministry of Corporate Affairs, if and to the extent necessary. The remuneration structure
comprises salary, incentive allowance, perquisites, allowance, contribution to provident fund and superannuation etc.
�� The aforesaid appointment may be terminated by either party by giving to other party not less than three months’ prior
notice in writing of such termination or payment in lieu of notice.
�� No option was granted to any Director of the Company under any scheme for grant of stock options.
�� Mr. Prashant Panday is holding 26900 equity shares of the Company as on the date of this Report.
(b) Details of sitting fees paid to the Non-Executive Directors for the financial year 2010 – 2011:
Name of the Non - Executive Director Sitting Fees (In Rupees)
Mr. Vineet Jain 75000
Mr. N. Kumar 165000
Mr. Deepak Satwalekar * 175000
Mr. Ravindra Kulkarni 165000
Mr. Ravindra Dhariwal 240000
Mr. A. P. Parigi 90000
Mr. Richard Saldanha ** 0
* Mr. Deepak Satwalekar resigned from the Board and Committees effective from March 30, 2011.
** Mr. Richard Saldanha was inducted as a member to the Remuneration / Compensation Committee with effect from
February 3, 2011.
(c) Criteria for making payments to non-executive directors:
Upto August 5, 2010, Non-Executive Directors of the Company were paid sitting fees of Rs.15,000/- (Rupees fifteen thousand
only) per meeting during the financial year under review, subject to deduction of applicable taxes, levies etc., if any, for attending;
�� Meeting of the Board of Directors;
�� Meeting of the Audit Committee; and
�� Meeting of the Remuneration/ Compensation Committee.
Effective from start of the business hours on August 6, 2010, aforesaid sitting fees was revised to Rs. 20,000/- (Rupees twenty
thousand only).
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(d) Number of shares and convertible instruments held by non-executive directors as on the date of this Report, are as below:
Sr. No. Name of the Director No. of equity shares held
1. Mr. Vineet Jain Nil
2. Mr. N. Kumar 5,580
3. Mr. Ravindra Kulkarni Nil
4. Mr. Ravindra Dhariwal Nil
5. Mr. A. P. Parigi 158,742
6. Mr. Richard Saldanha Nil
6. Shareholders’ / Investors’ Grievance Committee
(i) Constitution and terms of reference of the Committee:
The Company has always valued its investors’ and stakeholders’ relationships. In order to ensure the proper and speedy redressal
of shareholders’/ investors’ complaints, the Shareholders’/ Investors’ Grievances Committee was constituted. The constitution and
terms of reference of the Shareholders’/ Investors’ Grievance Committee is in conformity with the provisions of Clause 49 of the Listing
Agreement entered into with the Stock Exchanges. The Shareholders’/ Investors’ Grievances Committee is empowered to look into
redressal of shareholders’ and investors’ complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared
dividends and other miscellaneous complaints. The Committee also ensures implementation and compliance of the Company’s
Code of Conduct for Prohibition of Insider Trading in conformity with SEBI (Prohibition of Insider Trading) Regulations, 1992.
The Shareholders’/ Investors’ Grievances Committee is headed by a Non-Executive Director and comprises the following Directors:
Mr. Ravindra Dhariwal - Chairman
Mr. A. P. Parigi - Member
(ii) Name and designation of Compliance Officer:
Mr. Mehul Shah, Vice President - Compliance & Company Secretary is the Compliance Officer of the Company.
(iii) Shareholders’ complaints:
Number of shareholders’ complaints / queries etc. received during the financial year 6
Number of complaints / queries etc. not resolved to the satisfaction of shareholders as on March 31, 2011.
(Same has been resolved in consonance with the applicable provisions of the relevant rules/ regulations and
acts for the time being in force).
0
No. of pending complaints/ queries etc. 0
(iv) Meetings and attendance during the year:
During the financial year under review, the Shareholders’/ Investors’ Grievances Committee met four times, i.e. on May 19, 2010;
August 6, 2010; November 3, 2010 and February 3, 2011. All the Members of the said Committee attended all the Committee meetings.
(v) Disclosure(s) pertaining to unclaimed shares:
Disclosure pursuant to the Clause 5A of the listing agreement in relation to unclaimed shares, based on the disclosure furnished by
Karvy Computershare Private Limited, the Registrar and Transfer Agents (R&TA) of the Company, for the financial year ended March
31, 2011, is as below;
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Clause of Listing Agreement Particular Remark
Clause 5A(g)(i) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year i.e. on April 1, 2010;
Number of Shareholders – 46 andNumber of Outstanding shares – 1906 equity shares.
Clause 5A(g)(ii) Number of shareholders who approached issuer for transfer of shares from suspense account during the year 2010-2011;
3 shareholders approached for transfer of 120 shares.
Clause 5A(g)(iii) Number of shareholders to whom shares were transferred from suspense account during the year 2010-2011;
120 shares were transferred to 3 shareholders.
Clause 5A(g)(iv) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year;
43 Shareholders with outstanding equity shares of 1786.
Clause 5A(g)(v) Voting rights on these shares. Voting rights on the equity shares lying in the suspense account shall remain frozen till the rightful owner of such equity shares claims those equity shares.
7. General Body Meetings(i) Annual General Meetings:
Location, date and time of the Annual General Meeting (AGM) held during the preceding three years and the Special Resolutions
passed thereat are as follows:
Year Location Date and Time Special Resolution(s) passed
2009 – 2010
(Eleventh AGM)
Y. B. Chavan Auditorium, Gen. Jagannath
Bhosale Marg, Next to Sachivalaya
Gymkhana, Near Mantralaya, Nariman
Point, Mumbai – 400021.
September 7, 2010
3.00 p.m.
To approve the appointment and terms
of appointment including remuneration
payable to Mr. Prashant Panday, Whole-
time Director of the Company with effect
from July 1, 2010.
2008 – 2009
(Tenth AGM)
Sir Sitaram & Lady Shantabai Patkar
Convocation Hall of S.N.D.T. Women’s
University (Patkar Hall), 1, Nathibai
Thackersey Road, New Marine Lines,
Queens Road, Mumbai – 400 020.
September 4, 2009
3.00 p.m.
No special resolution passed.
2007 – 2008
(Ninth AGM)
Sir Sitaram & Lady Shantabai Patkar
Convocation Hall of S.N.D.T. Women’s
University (Patkar Hall), 1, Nathibai
Thackersey Road, New Marine Lines,
Queens Road, Mumbai – 400 020.
August 25, 2008
12.00 noon
No special resolution passed.
(ii) Special Resolution passed through Postal Ballot:
During the financial year under review, no resolution was passed through postal ballot.
(iii) Person who conducted the postal ballot exercise:
Not applicable.
(iv) Whether any special resolution is proposed to be conducted through postal ballot: No.
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(v) Procedure for postal ballot:The Company will comply with the requirements of postal ballot as and when such matter arises requiring approval of the Members by such process as per Section 192A and other applicable provisions of the Companies Act, 1956, read with the Companies (Passing of Resolution by Postal Ballot) Rules, 2001.
8. Other Disclosure
(i) Disclosures on materially significant related party transactions that may have potential conflict with the interests of the Company at large:
During the financial year under review, there were no materially significant related party transactions with the Promoters, Directors, etc. that may have potential conflict with the interests of the Company at large.
(ii) Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years:There has been no instance of non-compliance by the Company on any matter related to capital markets, during the last three years and hence no penalties, strictures have been imposed on the Company by Stock Exchanges or SEBI or any other statutory authority.
(iii) Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:The Board of Directors affirms and confirms that no personnel have been denied access to the Audit Committee. Bennett, Coleman & Company Limited (‘BCCL’)- the Ultimate Holding Company has introduced a policy of ‘Whistle Blower’ to reinforce the ‘Code of Conduct’ across BCCL & other group companies. Its applicability has been extended to the Company.
(iv) Details of compliance with mandatory requirements and adoption of the non mandatory requirements of this clause:The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, read with the observations of the practicing Company Secretary in their Certificate, dated May 23, 2011, relating to compliance with the aforesaid Clause 49 and response of the Company thereto under Para 2 (Board of Directors) of the Report on Corporate Governance. The status of the compliance with the non-mandatory requirements of this clause has been detailed hereof.
9. Means of Communication
(i) Quarterly/ Half yearly/ Annual results:Quarterly/ Half yearly/ Annual results are regularly submitted to the Stock Exchanges where the securities of the Company are listed pursuant to the provisions of Listing Agreement and are published in the newspapers. The Company has also displayed the results as specified under Clause 41 of the Listing Agreement on the Company’s website i.e. www.enil.co.in
(ii) Newspapers wherein results are normally published:Financial Express (English); and Maharashtra Times (Marathi, the regional language).
(iii) Any Website, where displayed :www.enil.co.in
(iv) Whether Website also displays official news releases: The Company has maintained a functional website [www.enil.co.in] containing basic information about the Company e.g. details of its business, financial information, shareholding pattern, compliance with corporate governance, contact information of the designated officials of the company who are responsible for assisting and handling investor grievances etc.
(v) Whether presentations made to institutional investors or to the analysts: Yes. The presentations made to institutional investors/analysts are also posted on the Company’s website i.e. www.enil.co.in
10. General Shareholder Information
(i) Annual General Meeting (AGM) :Day, Date and time : Tuesday, August 30, 2011, at 3.00 p.m.
Venue : Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Near Mantralaya, Nariman Point, Mumbai- 400021.
(ii) Financial year : April 1, 2010 to March 31, 2011.
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45ANNUAL REPORT 2010-11
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(iii) Date of Book closure : Tuesday, August 23, 2011 to Tuesday, August 30, 2011 (both days inclusive) for taking record of the Members of the Company for the purpose of AGM.
(iv) Dividend Payment Date : Not Applicable
(v) Listing on Stock Exchange : The Company’s shares are listed on the Bombay Stock Exchange Limited (BSE), Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 and the National Stock Exchange of India Limited (NSE), Exchange Plaza, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra- (East),
Mumbai – 400 051.
The Company has paid the annual listing fees for the year 2011 - 2012, as applicable, to BSE
and NSE.(vi) Stock code :
BSE Scrip Code 532700
NSE Trading Symbol ENIL
ISIN Number for NSDL & CDSL INE265F01028
(vii) Market Price Data : High, Low during each month in last financial year*
The performance of the equity shares of the Company on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange
of India Limited (NSE) depicting the liquidity of the Company’s equity shares for the financial year ended March 31, 2011, on the said
exchanges, is given hereunder:-
Stock Market data – BSE
Month Open Price (Rs.)
High Price (Rs.)
Low Price (Rs.)
Close Price (Rs.)
No. of Shares
Total Turnover (Rs. In Lakhs)
April 2010 207.50 216.70 195.00 202.10 415,948 864.42May 2010 203.00 218.20 179.10 210.25 1,741,992 3,553.10June 2010 210.00 273.00 200.00 252.25 3,370,261 8,218.23July 2010 250.00 261.95 192.95 206.80 5,716,176 11,966.86August 2010 208.00 275.55 202.15 236.95 4,528,212 11,165.78September 2010 238.70 262.15 231.55 232.95 1,065,144 2,637.65October 2010 236.10 246.80 220.50 223.60 325,583 765.62November 2010 222.25 242.00 208.00 224.05 319,608 729.12December 2010 224.00 248.70 202.00 232.70 366,433 837.85January 2011 233.00 239.00 200.00 219.40 185,964 399.28February 2011 216.00 243.90 195.20 211.30 949,701 2,064.25March 2011 213.00 258.50 208.00 251.65 181,925 431.79
Stock Market data – NSE
Month Open Price (Rs.)
High Price (Rs.)
Low Price (Rs.)
Close Price (Rs.)
No. of Shares
Total Turnover (Rs. In Lakhs)
April 2010 206.50 218.70 194.00 202.15 770,388 1,599.72
May 2010 200.00 218.80 179.10 209.50 3,103,524 6,373.82
June 2010 206.00 272.60 206.00 252.50 5,863,852 14,353.11
July 2010 248.00 262.50 190.15 206.85 11,841,466 24,642.86
August 2010 206.00 275.80 202.45 237.00 9,038,749 22,551.26
September 2010 238.00 261.75 232.00 235.00 2,196,293 5,432.65
October 2010 233.00 246.45 220.00 222.60 595,062 1,396.20
November 2010 224.00 241.70 206.20 225.35 1,136,729 2,579.93
December 2010 225.75 247.40 204.00 234.60 918,713 2,101.56
January 2011 235.00 238.90 201.70 218.15 609,123 1,316.55
February 2011 217.00 243.75 197.00 212.10 1,251,282 2,763.17
March 2011 212.10 264.70 208.10 252.65 575,211 1,382.98
* (Source: This information is compiled from the data available from the website of BSE and NSE)
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46 ENTERTAINMENT NETWORK (INDIA) LIMITED
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(viii) Stock Performance:
Share Price Performance (2010 - 2011)
BSE
Sens
ex a
nd S
&P
CN
X N
IFTY
Ente
rtai
nmen
t Net
wor
k (In
dia)
Lim
ited
[EN
IL]25000
20000
15000
10000
5000
0
300
250
200
150
100
50
0
Apr
-10
May
-10
June
-10
July
-10
Aug
-10
Sep-
10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
BSE Sensex S&P CNX NIFTY ENIL
(ix) Registrar and Transfer Agents (R & TA) :
Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, Madhapur,
Hyderabad – 500 081, Phone: 040 - 44655000, Fax: 040 – 23420814.
(x) Share Transfer System :
Pursuant to the provisions of the Listing Agreement entered into with the Stock Exchanges, the Board of Directors of the Company, in
order to expedite the process, has delegated the power of approving transfer, transmission etc. of the securities of the Company to
the R & TA. Securities lodged for transfer, transmission etc. are normally processed within the stipulated time as specified in the Listing
Agreement and other applicable provisions of Companies Act, 1956. The Company has duly obtained certificates on half yearly basis
from a Company Secretary in Practice, certifying due compliances with the formalities of share transfer as required under Clause 47
(c) of the Listing Agreement entered into with Stock Exchanges and submitted a copy of the certificate to the Stock Exchanges where
the securities of the Company are listed.
(xi) Distribution of shareholding as on March 31, 2011:
Category (Amount) No. of Members % of Members Total Shares % of Shares
1 - 5000 17,160 97.02 965,730 2.03
5001 - 10000 242 1.37 195,398 0.41
10001 - 20000 113 0.64 170,851 0.36
20001 - 30000 52 0.29 133,369 0.28
30001 - 40000 18 0.11 63,153 0.13
40001 - 50000 20 0.11 94,390 0.20
50001 - 100000 30 0.17 201,438 0.42
100001 & Above 52 0.29 45,846,086 96.17
Total 17,687 100.00 47,670,415 100.00
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Shareholding pattern of the Company (as on March 31, 2011):
Category code
Category of shareholder Number of shareholders
Total Number of
shares
Total shareholding as a percentage of total
number of shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian *
(a) Bodies Corporate (including 7 others, holding 203 shares jointly with the Promoter)
9 33,918,400 71.15
Sub-Total (A)(1) 9 33,918,400 71.15
(2) Foreign — — —
Sub-Total (A)(2) — — —
Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)
9 33,918,400 71.15
(B) Public shareholding
(1) Institutions
(a) Mutual Funds/ UTI 4 273,573 0.57
(b) Financial Institutions/ Banks 1 1,790 0.00
(c) Foreign Institutional Investors 25 7,662,641 16.07
Sub-Total (B)(1) 30 7,938,004 16.65
(2) Non-institutions
(a) Bodies Corporate 351 2,779,411 5.83
(b) Individuals -
i. Individual shareholders holding nominal share capital up to Rs. 1 lakh.
17,034 1,558,230 3.27
ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh.
19 1,422,997 2.99
(c) Other
Non Resident Indians 154 33,515 0.07
Trust 4 86 —
Clearing Members 86 19,772 0.04
Sub-Total (B)(2) 17,648 5,814,011 12.20
Total Public Shareholding (B)= (B)(1)+(B)(2) 17,678 13,752,015 28.85
TOTAL (A)+(B) 17,687 47,670,415 100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
— — —
GRAND TOTAL (A)+(B)+(C) 17,687 47,670,415 100.00
* The Indian Promoter Group comprises Times Infotainment Media Limited (TIML) (including 7 others, holding 203 equity shares jointly
with TIML) and Bennett, Coleman & Company Limited.
As on the date of this report, none of the Promoters and Promoters’ Group of the Companies have pledged any shares of the Company.
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(xii) Dematerialization of shares and liquidity:
99.99 % of the paid up equity share capital of the Company has been dematerialized up to March 31, 2011. Trading in equity shares
of the Company is permitted only in dematerialized form as per the notification issued by SEBI. The trading / liquidity details are given
in clause (vii) hereinbefore.
(xiii) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity :
Nil.
(xiv) Location of Studios:
1. Ahmedabad The Times of India Press Premises, Vejalpur, Ahmedabad – 380 051.
2. Aurangabad F 8, 9, 10, 5th Floor, Aurangabad Business Centre, Adalat Road, Opposite Session Court, Aurangabad – 431 005.
3. Bangalore 39/2, 3rd Floor, Sagar Building, Banerghatta Road, Bangalore – 560 029.
4. Bhopal 2nd Floor, C. P. Square, 2, Malviya Nagar, Opposite Old Vidhansabha, Bhopal – 462 003.
5. Chennai 6th & 7th Floor, Fathima Akhtar Court, New No. 453, Anna Salai, Teynampet, Chennai – 600 018.
6. Coimbatore 8th Floor, Classic Towers, 1547 Trichy Road, Coimbatore – 641 018.
7. Delhi Plot No. 6, 3rd Floor, Sector 16A, Film City, Noida, Uttar Pradesh- 201 301.
8. Hyderabad 1st Floor, Queen’s Plaza, Sardar Patel Road, Opposite Begumpet Police Station, Begumpet, Secunderabad – 500 003.
9. Indore 9th Floor, Industry House, 15 AB Road, Indore – 452 001.
10. Jabalpur 2nd Floor, Shukla Bhawan, 1415, Wright Town, Jabalpur – 482 002.
11. Jaipur Prestige Tower, 6th Floor E - 1 Amrapali Road, Vaishali Nagar, Jaipur – 302 021.
12. Jalandhar 6th Floor, Shakti Tower, Adjoining Swani Motors, GT Road, Near BMC Chowk, Jalandhar City – 144 001.
13. Kanpur 14/113, Kan Chambers, 6th Floor, Civil Lines, Kanpur – 208 001.
14. Kolhapur Gemstone, Part B, 1st Floor, Rao Bahadur Rajirao Vichare Complex, 517/2 E Ward, New Shahupuri, Kolhapur – 416 001.
15. Kolkatta Shantiniketan Building, 13th Floor, 8, Camac Street, Kolkata – 700 017.
16. Lucknow 6th Floor, Plot TV 57/V Shalimar Tower, Vibhuti Khand, Gomtinagar, Lucknow – 226 010.
17. Madurai 2nd Floor, Nataraja Complex, Opposite New District Court, 128 Melur Road, KK Nagar, Madurai – 625 020.
18. Mumbai 4th Floor, ‘A’ Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013.
19. Mangalore 5th and 6th Floor, Maximus Commercial Complex, LHH Road, Opposite KMC, Mangalore – 575 001.
20. Nagpur # 1, 2nd Floor, Narang Towers, 27 Palam Road, Civil Lines, Nagpur – 440 001.
21. Nashik 3rd Floor, United Legend, Plot 1, Serial 733/1/2, Off Village Nashik, Link Road, Opposite Parijat Nagar Bus Stop, Nashik – 422 005
22. Panaji 1st Floor, Vivenda De Hassan Building, D. B. Marg, Miramar PTS 16, Miramar, Panjim, Goa – 403 001.
23. Patna Times of India Building, Fraser Road, Patna – 800 001.
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24. Pune 3rd Floor, Krishna Keval Commercial Complex, Above ICICI Bank, Kondhwa Khurd, Pune – 411 048.
25. Raipur 1st Floor, Chawla Towers, Telibandha Ward No. 28, Near Bottle House, Shankar Nagar, Raipur – 492 007.
26. Rajkot Property No. 23,24/P, Radhika House, Near Kinnari Flats, Opposite Princess School, Kalawad Road, Rajkot – 360 007.
27. Surat 601, International Trade Center, 2/1932/2-A, Majuragate Crossing, Ring Road, Surat – 395 002.
28. Thiruvananthapuram 3rd Floor, Andoor Buildings, General Hospital Road, Vanchiyoor P.O., Thiruvananthapuram – 695 035.
29. Vadodara Property No. 1001/1002, 10th Floor, Gunjan Tower, Off. Alembic - Gorwa Road, Vadodara – 390 023.
30. Varanasi 2nd floor, Unit 201-A & 204, RH Tower, The Mall, Cantt, Varanasi – 221 002.
31. Vijaywada 5th Floor, ‘Matha Towers’, Bishop’s House, Door No 59 A 1-7, Ring Road, Vijayawada – 520 008.
32. Vishakhpatnam 5th Floor, Varun Towers, Kasturba Marg, Siripuram, Vishakhapatnam – 530 003.
(xv) Address for correspondence :
Investor Correspondence
a. For share transfer / dematerialisation of shares / other queries relating to the securities:
Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, Madhapur,
Hyderabad - 500 081, Phone: 040 – 44655000, Fax: 040 – 23420814.
b. For queries on Annual Report or investors’ assistance:
Mr. Mehul Shah,
Vice President - Compliance & Company Secretary,
Trade Gardens, Ground Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013.
Tel. : 022 – 67536983.
Investors can register their complaints/ grievances on the Company’s designated e-mail Id: [email protected]
The aforesaid e-mail id and other relevant details have been displayed on the website of the Company i.e. www.enil.co.in
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Non - Mandatory Requirements:
The Company has duly abided with all the mandatory requirements and has complied with the following non-mandatory requirements of
Clause 49 of the Listing Agreement:
1. The Board:
The Company does not defray any expenses of the Chairman’s Office. Independent Directors do not have a tenure exceeding, in the
aggregate, a period of nine years, on the Board of the Company. The Company ensures that all the persons being appointed as an
Independent Director of the Company has the requisite qualifications, experience and expertise enabling them to effectively contribute
towards the growth of the Company and aids the Company to achieve new heights of success in the Media and Entertainment Industry.
2. Remuneration Committee:
As stated earlier, the Company has constituted Remuneration/ Compensation Committee to review and recommend the remuneration
of the Managing / Executive Director based on his/her performance and defined assessment criteria. Details regarding composition and
scope of the Remuneration/ Compensation Committee are given in the earlier part of this Report.
3. Shareholder Rights:
The Company’s quarterly and half-yearly results are furnished to the Stock Exchanges and are also published in the newspapers and on
the website of the Company and therefore results were not separately sent to the Members. Quarterly/ Half yearly/ Annual results of the
Company are also displayed on the website of the Company i.e. www.enil.co.in
4. Audit qualifications:
There are no audit qualifications in the Audit Report for the financial year under review.
5. Training of Board Members:
No training is provided to the Board Members as on date of this Report.
6. Mechanism for evaluating non-executive Board Members:
No mechanism for evaluation of the performance of Non-executive Directors is in place as on date of this Report.
7. Whistle Blower Policy:
The Company has adopted the Code of Ethics & Business Principles for Directors and Employees. Bennett, Coleman & Company Limited
(‘BCCL’)- the Ultimate Holding Company has introduced a policy of ‘Whistle Blower’ to reinforce the ‘Code of Conduct’ across BCCL & other
group companies. Its applicability has been extended to the Company.
For and on behalf of the Board of Directors
Vineet JainChairman
Mumbai, May 23, 2011
Registered Office:
4th Floor, ‘A’ Wing, Matulya Centre,
Senapati Bapat Marg, Lower Parel (West),
Mumbai – 400 013.
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DECLARATION BY THE CEO UNDER CLAUSE 49(I)(D) OF THE LISTING AGREEMENT REGARDING ADHERENCE TO THE CODE OF CONDUCT :
This is to affirm and declare, to the best of our knowledge and belief and on behalf of the Board of Directors of the Company and senior
management personnel, that:
• the Board of Directors has laid down a code of conduct for all Board members and Senior Management of the Company [‘the Code of
Conduct’];
• The Code of conduct has been posted on the website of the Company;
• All the Directors and Senior Management personnel have affirmed their compliance and adherence with the provisions of the Code of
Conduct for the financial year ended March 31, 2011.
For and on behalf of the Board of Directors and
Senior Management Personnel
Prashant Panday
Executive Director & CEO
Mumbai, May 23, 2011
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CERTIFICATE
To the Members of ENTERTAINMENT NETWORK (INDIA) LIMITED
We have examined the compliance of conditions of Corporate Governance by ENTERTAINMENT NETWORK (INDIA) LIMITED (“the Company”),
for the financial year ended March 31, 2011, as stipulated in Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange
Limited (BSE) and the National Stock Exchange of India Limited (NSE).
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of
procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance
as stipulated in the said Clause 49. 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 and the representations made by the Directors
and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of
the above mentioned Listing Agreement subject to the two observations during the period from July 1, 2010 to November 22, 2010 comprising
of 145 days and period from March 30, 2011 to March 31, 2011 comprising of 1 day. During the said period, compliances under Clause 49 I (A)
(ii) relating to the composition of the Board of Directors of the Company could not be observed.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with
which the management has conducted the affairs of the Company.
For Hemanshu Kapadia & AssociatesCompany Secretaries
Hemanshu KapadiaProprietor
C.P. No. 2285Mumbai, May 23, 2011
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Statements in this Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or
predictions may be ‘forward-looking statements’ within the meaning of applicable securities laws and regulations. Actual results could differ
materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include cyclical
demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within
India and the countries in which the Company conducts business and other incidental factors. The Company undertakes no obligation to
publicly update or revise any forward looking statements, whether as a result of new information, future events, or otherwise. Readers are
cautioned not to place undue reliance on these forward looking statements that speak only as of their dates.
A. Media Industry Structure And Developments World economy back on track
According to the world economic outlook report by the IMF released in April 2011, the world economy has grown at 5% (3% for developed
economies and 7% for developing economies) in the year 2010. This growth is expected to continue in 2011 and 2012 as well. In each of
these two years, the world economy is expected to grow at 4.5%. The growth in developing nations like India is expected to be 6.5% and
the developed nations are expected to grow at 2.5% in each of these 2 years.
The fears of double dip depression have fortunately not materialized. The recovery which was initially fuelled by fiscal stimulus is slowly
becoming stronger and private demand is slowly coming back on track.
According to the January 2011 U.S. Gross Domestic Product (GDP) numbers, the US economy grew at an inflation-adjusted annual rate
of 3.2% in the fourth quarter as domestic consumption grew and exports ticked up. The economic committee of the American Bankers
Association has increased its GDP estimate for 2011. Specifically, the group said that the GDP should expand by 3.3%, up from its previous
estimate of 3% that it made in June 2010.
The report by IMF also states that in emerging market economies the crisis has left no lasting wounds. Their initial fiscal and financial
positions were typically stronger, and the adverse effects of the crisis were more muted. High underlying growth and low interest rates
are making fiscal adjustment much easier. Exports have largely recovered, and whatever shortfall in external demand they experienced
has typically been made up through increases in domestic demand.
Likewise, the Indian growth story continues to be strong. According to the RBI, India’s GDP grew at 8.6% in 2010-11 and is expected to grow
at 8% or more in 2011-12.
Global Advertising Industry also revives
According to the Zenith Optimedia Ad forecast report April 2011, the world ad market grew by 5.5% in 2010. The momentum is expected
to continue and the growth is expected to be 4.2%, 5.8% and 5.5% in 2011,’12 and ‘13 respectively. The growth story for the Asia Pac region
is even better with growth rates of 7.1%, 4.6% , 8.3% and 6.8% expected in 2010,’11,’12 and ‘13 respectively.
The radio market worldwide would also continue to grow in line with the overall ad industry growth rate and would continue to remain
around 7% of the total advertising markets by 2013.
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Indian Advertising Industry back on growth path
According to the FICCI KPMG M&E report 2011, the advertising industry grew by nearly 17% this year. Further, it is expected to grow at a
CAGR of 14% till 2015. The growth story is likely to be strong across media.
Unlike global trends, the print industry in India continues to remain strong and is expected to grow at a CAGR of 13% till 2015.
The TV industry with many new channels being added each year and growing regionalization, is expected to grow at 16% CAGR for the
same period.
Digital advertising would be fastest growing advertising media in the near future clocking a five years CAGR of 28%. This would make the
size of the industry INR 36 Bn by 2015.
INR Bn 2009 2010 2011( P) 2012 ( P) 2013 ( P) 2014 ( P) 2015 (P) CAGR
(2010-15)
Television 88 103 118 136 157 183 214 16%
Print 110 126 143 162 183 208 236 13%
Radio 8 10 12 15 18 21 25 20%
Out of Home 14 17 19 22 24 27 30 12%
Digital Advertising 8 10 13 18 22 28 36 28%
Total 228 266 305 353 404 467 541 14%
(Source: FICCI KPMG M & E report 2011)
Radio growth would outpace all traditional media
The FICCI reports places radio as the fastest growing advertising media amongst traditional media in terms of CAGR for the next 5 years.
Radio is expected to grow to be a INR 25 Bn industry by 2015, growing at 20% CAGR. This radio industry is expected to grow by 20% in the
CY 2011 and reach INR 12 bn in revenues. This growth would be more than TV and print which are expected to grow by 14.5 % and 13.5%
in 2010-11.
Indian Media & Entertainment Industry is back on track
The overall Indian Media Industry is also back on track registering a growth rate of 11% in CY 2010 compared to a mere 1.9% in CY 2009.
This growth was primarily driven by the resurgence of media spends by advertisers across various media platforms. The industry is
expected to maintain this momentum and grow at 13% in 2011. It is expected to have a CAGR of 14% and reach a size of INR 1275 bn by
2015. As described above, a large contribution to this growth would be made by the advertising industry. The contribution of advertising
revenue to the overall industry pie is also expected to increase from 38% in 2007 to 42% in 2015.
The medium - wise forecast for the media industry is as follows:
INR Bn 2009 2010 2011( P) 2012 ( P) 2013 ( P) 2014 ( P) 2015 (P) CAGR
(2010-15)
Television 257 297 341 389 455 533 630 16%
Print 175 193 211 231 254 280 310 10%
Film 89 83 91 98 109 120 132 10%
Radio 8 10 12 15 18 21 25 20%
Music 8 9 9 11 13 16 19 17%
Out of Home 14 17 19 22 24 27 30 12%
Animation and VFX 20 24 28 33 40 47 56 19%
Gaming 8 10 13 17 23 31 38 31%
Digital Advertising 8 10 13 18 22 28 36 28%
Total 587 652 738 834 957 1104 1275 14%
(Source: FICCI KPMG M & E report 2011)
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B. Radio Industry – Future 0utlook, Opportunities and Threats
Factors which will contribute to sustainable growth of Radio
1) Phase III of expansion:
The announcement of the Phase III regulations for the radio industry has been pending for quite a while now and we are hopeful that
the announcements may happen soon now. The 3rd Phase of radio reforms is expected to increase the number of FM towns/cities
from around 86 now to over 300. The number of frequencies would increase from 245 odd to over 800. This increase in the number
of channels and the resulting increase in the listener ship base would make the medium more significant for advertisers.
2) Advertiser focus on tier II and tier III towns:
There are many media vehicles reaching the large Tier I towns. Advertisers are reaching their audiences through various mediums –
mass and niche - as the economy grows, development goes beyond the bigger cities and consumers in class II and III cities become
as important as the consumers in the big cities. This will also lead to an increased focus on these towns/cities by advertisers. Media
which reaches consumers in these cities and towns therefore would increasingly become more and more significant in advertising
plans. With the next phase of expansion, Radio would reach almost 250 cities and towns – majority of the new additions being in
Tier II and Tier III. This will ensure a sustained growth in Radio advertising the next few years.
Also, radio for the very first time will compete with local print because it will have the reach and scale to attract a vast majority of
consumers and listeners, specially in the tier II and tier III cities.
3) Growth in mobile based consumption of radio.
With the proliferation of mobile hand sets having FM tuners, the consumption of FM radio is also on the increase. According to the
Radio Audience Measurement – RAM (Radio division of Television Audience Measurement Media Research Pvt Ltd.) baseline data
released a few months back there has been a significant increase in the consumption of FM on mobile phones. In the 4 cities that this
study was carried out amongst FM device owners, the percentage of radio listening on mobile phones in the cities of Mumbai , Delhi,
Bangalore and Kolkata was 94%, 88%, 84% and 72% respectively. The mobile penetration amongst the universe of FM listeners was
between 95% to 99% in these 4 cities. This trend is expected to continue making the mobile phone a key FM consumption device
going forward.
4) FM listenership grows rapidly
According to the same baseline study, there has been a significant increase in the overall penetration of FM. The following are the
percentage penetration numbers and the absolute listenership numbers of FM radio in 4 markets covered under this study. This
signifies a change in behavioral trends in media consumption with an increased propensity to consume radio.
Percentage Penetration:
2007 2011
Mumbai 51% 70%
Delhi (NCR) 59% 88%
Bangalore 71% 87%
Kolkata 63% 64%
In absolute terms the listener ship was as follows:
In Lacs
2007 2011
Mumbai 73.5 116.6
Delhi 67.2 163.2
Bangalore 36.5 52.7
Kolkata 78.5 87.4
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5) Niche channels may emerge getting in new listeners
With Phase III FM policy likely to allow multiple frequencies of a channel in the same city, niche channels might emerge. Currently,
every broadcaster is catering to the largest base of listeners and playing mostly similar contemporary film music. This could change if
a broadcaster has multiple frequencies in the same city - one which could continue catering to the same mass audience and others
which could cater to a new niche audience. This could also get the few non-listeners also converted to the medium. It would also
help advertisers to reach out to niche audiences.
6) New audiences on newer media of delivery
In India FM radio is being consumed through FM receivers only. There is however an increased focus by all radio companies to reach
out to existing and prospective listeners through new platforms like the Internet and the mobile phone. This trend is expected to
continue and the availability of radio brands on other platforms will increase the overall reach of the medium and also help increase
advertising revenues.
The Phase III Policy
As mentioned earlier also in this report, the announcement of the Phase III regulations for the radio industry has been pending for quite
a while now and we are hopeful that the announcements may happen soon now. While there are still some pending issues which need
to be addressed by the government, the industry overall is eager to participate in the next phase of growth.
Based on available information in the media, the probable changes in Phase III and their likely impact is as follows:
1) New geographies to be added:
As mentioned earlier in this report, after the complete roll out of Phase III cities, the total number of FM channels could increase to
over 800 from the current 245 odd. The number of cities covered by FM could also increase to over 300 from the present 86 odd.
Impact on the industry – Will lead to increase in overall listenership. Radio will reach new geographies and will compete with print
for regional budgets of national clients. Radio will also provide a new and exciting platform for small retail advertisers / shop fronts
in smaller markets.
2) Multiple frequencies:
Apart from geographical growth, the other interesting part of Phase III policy is expected to be the removal of restriction on ownership
of more than one channel in one city.
Impact on the Industry - This policy will help increase programming diversity – a broadcaster is likely to offer a different programming
format on its 2nd or 3rd channels. This would help convert some of the non listeners to the medium. This in turn will increase
advertising opportunities for broadcasters as advertisers.
3) Tradability of licenses:
Change of ownership may be permitted after 3 years of operationalization instead of 5 years as at present.
Impact on the Industry - This policy change will help consolidation in the industry which still has too many players – many making
losses. Some of them may want to look at options to sell. It is in the interest of the large networks also as it gives them an opportunity
for growth through acquisitions and not be dependent only on new frequency allocation from the government.
4) Networking: Networking may be permitted seamlessly across the network. At present, it is only permitted between C and D
category towns.
Impact on the Industry - The policy could help create cost synergies (talent, marketing, broadcasting premises and administrative)
for radio stations and reduce the overall costs, thus improving profitability of radio stations.
5) News & Current Affairs might be allowed:
Radio broadcasters may be permitted to broadcast news and current affairs but the source of these news would be limited to a few
authorized sources only –AIR, DD, certain wire services etc.
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Impact on the Industry - While this would be very restrictive in its scope, radio broadcasters are hopeful that this policy would be
amended with the passage of time. In the current avatar it is not likely to have any significant impact on the listenership or revenues
of the industry. Also private broadcasters may be charged for access to these news feeds, which would make this an unviable option
for most radio operators.
6) License period for new licenses likely to be 15 years instead of 10 years.
The government might allow the new licenses to be allocated for 15 years from the current 10 years. This will help radio broadcasters
to get better returns on their investments.
Impact on the Industry – This change will have a major impact on the valuation of the licenses and thus on the valuation of the radio
companies owning the licenses itself. While the one time fees paid to get the licenses may become higher due to the longer duration
of assured operability, it will allow for better ROIs in the long run. With a longer period like this, the business will have greater ability
to absorb losses also which might occur due to overall economic uncertainties.
Significant developments in the Industry
1) Music Royalty rates fixed at 2% of revenues to be shared all between all music providers:
In a landmark judgment, the Hon’ble Copyright Board fixed the music royalty pay out from radio broadcasters to all music providers
- labels/ collection societies cumulatively to be 2% of the total revenues earned by the radio stations. Subsequently, this ruling by the
Hon’ble Copyright Board has been challenged by various parties. PPL had filed an appeal in the Hon’ble Madras High Court against
the Hon’ble Copyright Board judgment. After the Hon’ble Madras High Court dismissed and rejected the appeal, PPL appealed to
the Hon’ble Supreme Court. The Hon’ble Supreme Court has refused to grant a Stay Order against the Hon’ble Copyright Board
Order and has now referred the main appeal back to the Hon’ble Madras High Court. The proceedings on the same are expected
to continue any time after June 2011.
South India Music Companies Association (SIMCA), which is an association of South Indian music owners, had also challenged the
order of the Hon’ble Copyright Board before the Hon’ble Madras High Court inter-alia on the ground that its members were not
parties to the Copyright Board proceedings and hence the impugned order of the Hon’ble Copyright Board should be stayed. The
Hon’ble Madras High Court dismissed the application for stay of the Copyright Board Order.
SIMCA, then filed a Special Leave Petition challenging the order of the Hon’ble Madras High Court dated December 22, 2010 on the
ground inter-alia that its members were not heard before the Copyright Board. On April 21, 2011, a Bench comprising Hon’ble Justices
Altamas Kabir and Cyriac Joseph vide an order have dismissed the special leave petitions of SIMCA. The Supreme Court refused
to stay the order of the Copyright Board and has observed that SIMCA would be at liberty to urge the grounds that it stands on a
different footing from PPL, before the Madras High Court.
Super Cassette Industries Limited, more popularly known as T-Series, challenged the Copyright Board order before the Hon’ble Delhi
High Court on the ground that it was not a party to the proceedings in which the judgment was passed. The Hon’ble Delhi High
Court passed an order whereby it directed that till the next date of hearing, the impugned order will not be relied upon by any of the
Respondents or any other party to insist on issuance of compulsory license vis-à-vis the copyrighted works of T Series. The hearing
on this matter is expected in August 2011.
Being aggrieved by the aforesaid orders, the Company (‘ENIL’) then filed an Appeal before the Division Bench of the Hon’ble Delhi
High Court. After hearing both sides the Hon’ble Delhi High Court was pleased to inter-alia pass an order that ENIL can rely on the
order of the Copyright Board. It is pertinent to point out that the Hon’ble Delhi High Court also directed that it would be up to the
Hon’ble Copyright Board to decide the matter on merits.
2) AROI - speaking on behalf of the Industry
The Association of Radio Operators continued its effort this year to impress upon the government the need to make changes /
amendments in certain policy matters to help the industry grow faster. The significant ones amongst these are as follows:
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• License period for the existing Phase-II licenses to be extended by another 5 years.
• Changes in the Copyright Act, 1956
• License period for the new frequencies to be made 15 years.
AROI organized Radio Congress 2011 – A forum which brought the radio broadcasters together and allowed them to share views
with key members from the government. It also allowed for healthy debates on various issues impacting the radio industry. Senior
people from the media industry and high ranking officials from the Ministry of I&B, including the Hon’ble Minister for I&B also
participated in the congress.
3) Copyright amendment bill to be introduced in the Parliament soon
It is expected that the Copyright Amendment Bill of India would be introduced in the forthcoming monsoon session of Indian
Parliament.
The bill is expected to make some important changes, some of which will benefit the radio industry in many ways. The Amendment is
likely to recognize and give more powers to artists/authors, who are friends of radio. While the radio industry is not directly impacted
by this, we believe that the radio industry can prosper only if our partners also prosper. We believe that the music artists/authors are
true partners of the industry and it should be our endeavor to work closely with them to create beneficial environment for both.
While not under the purview of the bill amendment, radio broadcasters have still made a request to the authorities to make the
Copyright Board, a full time board - this change is essential to ensure that matters are heard and justice is met in a timely and proper
manner.
C. FY11 – A Successful year
1) A profitable year
The radio business has been on an upswing thing year. We achieved our set revenue objectives for the year and have managed a
20% growth over the last year. There has been a significant growth in the profits of ENIL this year owing to a robust top line growth
coupled with prudent cost control and change in the royalty regime. With this momentum, we hope that we will be able to grow the
business considerably in the next fiscal year. We have put new organizational structures in place to ensure that we are equipped
to handle the challenges in the coming year and are well placed to tap into the opportunities which will come with the revival of a
positive economic environment and an encouraging advertising landscape.
2) Mirchi Music Awards 3rd edition – the biggest so far
We continued paying homage and our ‘salaam’ to the music fraternity this year too through the 3rd edition of the Mirchi Music
awards. This year saw the biggest avatar of the Mirchi Music Awards till date. The awards grew in scope this year with the addition
of 4 new categories making the total number of categories 22 compared to the 18 of last year and 13 in the first edition. The scale
of the event right from the sets to the guest list to the entertainment quotient was the biggest we have achieved till now. The keen
participation and enthusiasm of the MMA jury made of eminent lyricists, composers, singers and directors made these years awards
a memorable event. The jury members without whom the awards would not have been possible were the following - Javed Akhtar
– Chairperson of the jury , Aadesh Shrivastava, Alka Yagnik, Anu Malik, Kailash Kher, Kavita Krishnamurthy, Lalit Pandit, Louiz Banks,
Prasoon Joshi, Rakeysh Omprakash Mehra, Ramesh Sippy, Shankar Mahadevan, Subhash Ghai, Sadhana Sargam, and Suresh
Wadkar.
We have also initiated the South edition of the MMA last year and hope that we will be able to have a very successful MMA South
this year as well.
3) Radio Mirchi continues to lead in the Indian Readership Survey ( IRS) – the ONLY PAN India Radio measurement survey
The Indian Readership Survey, the ONLY survey which measures radio listenership across the country has placed Radio Mirchi as the
clear leader in listenership. According to the week after recall data of IRS, Radio Mirchi has a listenership of almost 42 mn, which
makes it almost double the size of the next radio brand. This research is evidence of the strength of the programming and marketing
teams of Mirchi. Mirchi has been consistently the leader, by far, across all the survey results – Q1, Q2 , Q3 and Q4 of 2010.
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4) Success in RAM continues
The success in RAM (Radio Audience Measurement) continued this year. While there have been challenges in Mumbai and Delhi,
overall we have been able to maintain our lead this year in 3 (Mumbai, Delhi and Kolkata) out of the 4 markets covered by RAM. We
also are a very close number 2 in the Bangalore market, even attaining the number 1 spot a few times.
We would be investing even more in market research and brand building this year to ensure that we reach the number 1 spot in
Bangalore and are able to have a consistent number 1 position in the other 3 markets.
5) Focus of digital media to grow
Mirchi Mobile, the innovative launch from Mirchi last year saw an encouraging response from consumers this year. The service after
being launched on Airtel has subsequently been launched on Reliance communications and BSNL also. The success of this product
on the mobile platform demonstrates the strength of the Mirchi brand in the consumer mind space. We intend to expand this service
to other telecom operators also in the coming year. This innovation also demonstrates our commitment to digital platforms. We
would continue to invest in this space to have a significant play both from a brand as well as a revenue stand point.
The fast growth of digitization and its impact on traditional media cannot be ignored. According to the Zenith Optimedia Ad forecast
report April 2011, globally internet advertising would overtake print advertising by the year 2013. Internet advertising is expected to
grow at an average of 14.4% per annum from 2010 to 2013. In India too the story is similar. While the print advertising is not under
threat in India and is expected to grow at a 13% CAGR till 2015, digital advertising is expected to grow at 28% in the same period
making it the 3rd largest advertising platform after TV and Print. Traditional media companies therefore would need to have long
terms strategies to embrace the digital economy and create strategies to be a part of that growth.
ENIL is very focused on creating a significant brand and revenue presence in the digital space. Mirchi Mobile is a step in this
direction. We would be taking many more initiatives in the mobile space this year. Through this year we have also made an endeavor
to integrate our on air programming with the initiatives on the web. From celeb visits and interviews, on ground events to movie
premiers, on air jokes to interesting sound bytes from the jocks – all have had a presence on radiomirchi.com. The website is fast
gaining popularity and we are keen to make the radiomirchi.com a successful web extension of our brand.
6) Awards and recognitions
This year saw ENIL getting many awards and recognitions.
Most successful Radio Channel of the year at FICCI Frames 2011….yet again
Radio Mirchi was awarded the most successful Radio Channel of the year at the FICCI Frames Excellence awards 2011 ONCE AGAIN.
Like last year, Mirchi was the ONLY radio station to receive the award. The awards celebrated the excellence in the business of
entertainment.
New York festival award
Our morning show in Delhi won the New York Festival award – Silver award in the best human story category. We were amongst
only 2 Indian Radio stations which got this award. We believe that radio has a big role to play in tackling social issues and we are
committed to playing our part in this regard on a consistent basis.
Power brand of India
Radio Mirchi was awarded the Power Brand of India in the Entertainment category by Planman consulting. We were the only radio
station to have been bestowed with this honor. Some of the other media brands which were honored were The Times Of India, NDTV
and Star Plus.
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7) Corporate social responsibility
MIRCHI CARES, the CSR division of Radio Mirchi, continued to provide audio help and entertainment to the Visually Impaired People
by way of Audio films, Audio Newsreels, Music workshops, Story telling sessions and Talking books for the Blind this year too . Over
the last 2 years, we have been creating these audio books through the efforts of the Radio Mirchi jocks as well the Mirchi listener
Volunteers in various languages across our 32 stations.
Mirchi Cares, under the Lend Your Voice Campaign has recorded an additional 150 audio books this year taking the total number of
books recorded till date to 450.
Over the last one year, Mirchi Cares played out some of the Audio Descriptive movies across stations which were highly appreciated
by the Blind Schools and Institutes. These included Munnabhai MBBS, Hanuman, Taare Zameen Par, etc. Mirchi Cares under its
project, Mirchi Saat Suron ka Sargam, sponsored the music of 7 Visually Impaired children for a year. ‘Ek Kahani’, a story telling
session is a popular program held in Blind Schools with Children Book authors reading out their own stories.
8) Sale of the Out Of Home Media Subsidiary
As mentioned earlier in the Directors’ Report, on December 29, 2010, ENIL sold its entire equity stake of 83.44 % in Times Innovative
Media Limited [‘TIM’] to Bennett, Coleman & Company Limited [‘BCCL’].
Pursuant to the sale, ENIL received a cash consideration of Rs. 45 crores for its equity investment of Rs. 32 crores in TIM. Further, it
also received full repayment for the loans advanced to TIM and amounting to Rs. 58 crores as on the date of the consummation of
transaction. The resultant cash inflows helped ENIL retire its entire debt and build sizeable cash reserves for the upcoming Phase III
expansion. The sale also relieved ENIL from the burden of meeting the sizeable funding requirements of TIM.
D. Risks, Concerns And Challenges Facing Company
1) Macroeconomic risk
While the economic situation has improved significantly in the last one year, the nature of our business which is totally dependent on
advertising revenues has a risk stemming from the overall economic scenario. In a recent announcement the RBI reiterated the risks
which continue to impact our growth, namely, sovereign debt problems in the euro-zone, high commodity prices, especially of oil,
and accentuation of inflationary pressure in the emerging market economies. These risks continue to exist.
2) Operational and Financial Risks
The Risk Management Framework established by the Company, and monitored by the Board of ENIL, has been the back-bone for
managing the operational and the financial risks that the Company faces. Several risks have been identified and risk mitigation
plans are in place. Process owners review the risks periodically and bring to the attention of the Board any risk that may need their
attention.
3) Retaining Talent
An organization is as good as its people. With the economy improving and new business opportunities emerging, there would be an
increased need to focus on retaining good talent in the organization. We are very focused on the same and have created transparent
processes and practices coupled with meritocratic evaluation processes to achieve the same. We believe that the culture of ENIL itself
– Fun with responsibility is also a very important reason we attract and retain good talent. We remain committed to maintaining this
aspect of the working culture at ENIL.
ENIL continues to have a relatively low attrition at the senior level. We wish to maintain this in the coming years and engage
youngsters to be part of and grow in our unique culture.
E. Segment-Wise Financial Performance
Management discussion and analysis of the Company’s operations and financial consolidation and segment-wise performance together
with discussion on financial performance with respect to operational performance should be read in conjunction with the financial
statements and the related footnotes. The Experiential marketing business (under Alternate Brand Solutions (India) Limited) is discussed
separately.
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ENIL – Radio Mirchi
A profitable year
This year has been a good year for ENIL from a revenue as well as profitability standpoint. The overall business grew by 21.3% and
stood at Rs.280.0 crores. The EBITDA also grew by a 52.5% and stood at 91.0 crs. The last quarter saw a 34.2% growth in revenues and
almost 120% increase in EBITDA. We have also been able to effect a price increase in many of our key markets this year. We are hopeful
and confident that with a buoyant economy, increasing consumer spends, overall prevailing positive sentiment along with the business
momentum created by us would lead to a very successful year ahead.
F. Subsidiary Company
Alternate Brand Solutions (India) Limited (ABSL):
The growth in revenues was flat this year with revenues being Rs. 40.9 Cr compared to Rs. 41.5 Cr in FY 10. While the managed events
portfolio grew by over 11% with significant contribution by events space, IPR revenue dropped by 20%. Successful properties like the Smart
Living Awards, Gadget awards and HDFC Spell Bee were executed.
Right sizing of resources and reduction in administration cost helped yield better margins and close the year with a EBITDA of Rs.70 lacs
compared to a EBITDA loss of Rs.20 lacs in FY 10. Bangalore branch was closed on account of poor performance and with an aim to
consolidate operations.
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GENERAL
Internal Control Systems and their Adequacy:
The Company has a system of internal controls to ensure that all its assets are properly safeguarded and not exposed to risks arising out of
unauthorized use or disposal. The Internal Control system is supplemented by a programme of internal audit to ensure that the assets are
properly accounted for and the business operations are conducted in adherence to laid down policies and procedures.
The Company has an Audit Committee of the Board of Directors which meets regularly to review, inter alia, risk management policies,
adequacies of internal controls and the audit findings on the various segments of the business.
Material Development in Human Resources/ Industrial Relations front, Including Number of People Employed.
Specific need based training and development programmes for all levels of employees were imparted in order to optimize the contribution
of the employees to the Company’s business and operations. Occupational health safety and environmental management are given utmost
importance. Material development in human resources/ industrial relations front has been dealt with in the Directors’ Report, under the head
‘Operations’, which should be treated as forming part of this Management Discussion and Analysis. As on March 31, 2011, the employee
strength (on permanent roll) of the Company was 717.
For and on behalf of the Board of Directors
Vineet Jain Chairman
Mumbai May 23, 2011
Registered Office:
4th Floor, ‘A’ Wing, Matulya Center,
Senapati Bapat Marg, Lower Parel (W)
Mumbai – 400 013
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Auditor’s Report to the Members of Entertainment Network (India) Limited
1. We have audited the attached Balance Sheet of Entertainment Network (India) Limited, as at March 31, 2011 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those 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 the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the “Order”), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and 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 March 31, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
ForPriceWaterhouse&Co. Firm Registration Number: 007567S Chartered Accountants
Uday ShahMumbai PartnerMay 23, 2011 Membership Number F-46061
Auditors’ Report
ENTERTAINMENT NETWORK (INDIA) LIMITED
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Annexure to Auditors’ ReportReferred to in paragraph 3 of the Auditors’ Report of even date to the members of Entertainment Network (India) Limited on the financial
statements for the year ended March 31, 2011
1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over
a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.
Pursuant to the programme, all addition of the fixed assets during the year has been physically verified by the Management and no
material discrepancies between the book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been
disposed of by the Company during the year.
2. (a) The Company has granted unsecured loans, to two companies covered in the register maintained under Section 301 of the Act.
The maximum amount involved during the year and the year-end balance of such loans aggregates to Rs.6015 Lakhs and Rs. Nil
respectively.
(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loans, the parties are repaying the principal amounts as stipulated and are also regular in payment of
interest, where applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more than Rupees One Lakh.
(e) The Company has taken unsecured loans, from two companies covered in the register maintained under Section 301 of the Act.
The maximum amount involved during the year and the year-end balance of such loans aggregates to Rs. 693.10 Lakhs and Rs. Nil,
respectively.
(f) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, the Company is regular in repaying the principal amounts as stipulated and is also regular in
payment of interest, where applicable.
3. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we
have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control
system.
4. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred
to in Section 301 of the Act have been entered in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts
or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices
which are reasonable having regard to the prevailing market prices at the relevant time.
5. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
6. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.
7. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of
the Act for any of the products of the Company.
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8. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the
Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund,
income-tax, employees’ state insurance, wealth tax, service tax, customs duty, cess and other material statutory dues as applicable
with the appropriate authorities in India. As informed to us, excise duty is not applicable to the Company for the current year.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of
income-tax, wealth-tax, service-tax, customs duty and cess which have not been deposited on account of any dispute.
9. The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
10. According to the records of the Company examined by us and the information and explanation given to us, the Company has not
defaulted in repayment of dues to any bank as at the balance sheet date.
11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other
securities.
12. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.
13. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.
14. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks during the year, are not prejudicial to the interest of the Company.
15. The Company has not obtained any term loans.
16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.
17. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under
Section 301 of the Act during the year.
18. The Company has not issued any debentures during the year.
19. The Company has not raised any money by public issues during the year.
20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.
21. The other clauses (ii) of paragraph 4 of the Companies (Auditor’s Report) Order 2003, as amended by the Companies (Auditor’s Report)
(Amendment) Order, 2004, is not applicable in the case of the Company for the year, since in our opinion there is no matter which arises
to be reported in the aforesaid Order.
ForPriceWaterhouse&Co. Firm Registration Number: 007567S Chartered Accountants
Uday ShahMumbai PartnerMay 23, 2011 Membership Number F-46061
Annexure to Auditors’ ReportReferred to in paragraph 3 of the Auditors’ Report of even date to the members of Entertainment Network (India) Limited on the financial
statements for the year ended March 31, 2011
66 ENTERTAINMENT NETWORK (INDIA) LIMITED
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BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Schedule Rupees Rupees Rupees
SOURCES OF FUNDS
Shareholders’ FundsCapital 1 476,704,150 476,704,150 Reserves and Surplus 2 3,360,297,665 2,838,208,368
Loan FundsSecured Loans 3 — 100,000,000 Unsecured Loans 4 — 234,310,693
Deferred Tax Liabilities (Net) 7 88,534,018 —
TOTAL 3,925,535,833 3,649,223,211
APPLICATION OF FUNDS
Fixed Assets 5Gross Block 3,675,486,276 3,659,527,825 Less: Depreciation / Amortisation 1,875,318,227 1,541,639,475 Net Block 1,800,168,049 2,117,888,350 Capital Work-in-Progress 11,475,105 11,089,571 1,811,643,154 2,128,977,921
Investments 6 931,002,684 400,250,000
Deferred Tax Assets (Net) 7 — 69,056,656
Current Assets, Loans and Advances:Sundry Debtors 8 1,038,005,783 682,022,925 Cash and Bank Balances 9 232,389,788 242,492,848 Loans and Advances 10 560,741,084 656,333,518 1,831,136,655 1,580,849,291Less: Current Liabilities and Provisions 11Liabilities 615,280,851 501,515,274 Provisions 32,965,809 28,395,383 648,246,660 529,910,657Net Current Assets 1,182,889,995 1,050,938,634
TOTAL 3,925,535,833 3,649,223,211
Notes to the Financial Statements 19
The Schedules referred to herein form an integral part of the Balance Sheet.
This is the Balance Sheet referred to in our report of even date.
For Price Waterhouse & Co. For and on behalf of the Board of DirectorsFirm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra KulkarniChartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant PandayPartner Director Director Executive Director & CEOMembership No. F-46061 N. Subramanian Mehul Shah Group CFO VP - Compliance &Mumbai Company SecretaryDated : May 23, 2011
Financials
67ENTERTAINMENT NETWORK (INDIA) LIMITED
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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010 Schedule Rupees Rupees
Income
Sales 12 2,724,795,895 2,301,309,831
Other Income 13 89,103,656 10,540,590
Interest Income (Net) 18 21,766,067 —
2,835,665,618 2,311,850,421
Expenditure
Production Expenses 14 160,947,411 199,783,435
License Fees 15 140,231,911 119,024,378
Employee Costs 16 564,437,874 481,819,260
Administration and Other Expenses 17 1,024,353,636 911,906,196
Interest Expense (Net) 18 — 46,794,141
Depreciation 335,960,456 369,774,865
2,225,931,288 2,129,102,275
Profit Before Exceptional Items and Taxation 609,734,330 182,748,146Profit on Sale of Subsidiary (Refer Note 16 on Schedule 19) 126,848,239 —Profit before Taxation 736,582,569 182,748,146 Provision for Taxation (Refer Note 1(viii) and 18 on Schedule 19) – Current Tax 167,500,000 57,400,000 – Minimum Alternate Tax Credit Entitlement (110,597,402) (57,400,000)– Deferred Tax 157,590,674 5,050,278 – Fringe Benefit Tax — (971,215)
Profit after Taxation 522,089,297 178,669,083
Balance Brought Forward 952,991,947 774,322,864
Profit balance carried forward to the Balance Sheet 1,475,081,244 952,991,947
Earnings Per Share (Refer Note 15 on Schedule 19) – Basic 10.95 3.75 – Diluted 10.95 3.75 Notes to the Financial Statements 19
The Schedules referred to herein form and integral part of the Profit and Loss Account.
This is the Profit and Loss Account referred to in our report of even date.
For Price Waterhouse & Co. For and on behalf of the Board of DirectorsFirm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra KulkarniChartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant PandayPartner Director Director Executive Director & CEOMembership No. F-46061 N. Subramanian Mehul Shah Group CFO VP - Compliance &Mumbai Company SecretaryDated : May 23, 2011
Financials
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CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011 2010-2011 2009-2010 Rupees Rupees
A) CASH FLOW FROM OPERATING ACTIVITIES : Profit Before Taxation 736,582,569 182,748,146 Adjustments for : Depreciation and Amortisation 335,960,456 369,774,865 Interest Income (32,948,765) (25,460,823) Interest Expense 11,182,698 72,254,964 Provision no longer required written back (26,315,493) — Profit on Sale of Investments (13,442,632) (2,955,230) Profit on Sale of Subsidiary (Refer Note 16 on Schedule 19) (126,848,239) — Dividend on Investments (732,781) — (Profit)/Loss on sale of Fixed Assets (102,266) 437,737 Fixed Assets written off 245,309 5,583,405 Doubtful Advances written off — 13,628,470 Provision for Doubtful Debts (Net) 101,276,940 153,581,736 Bad debts written off 73,605,423 11,868,540 Provision for Retirement Benefits 4,570,426 417,030 Operating Profit Before Working Capital Changes 1,063,033,645 781,878,840 Adjustments for changes in working capital : (Increase) in Sundry Debtors (530,865,221) (261,800,167) Decrease in Other receivables 17,687,672 246,702,784 Increase in Trade and Other payables 127,762,116 239,345,019 Cash generated from operations 677,618,212 1,006,126,476 Taxes paid (net) (161,385,482) (57,248,203) Net Cash from Operating Activities (A) 516,232,730 948,878,273 B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Fixed Assets (18,690,950) (23,068,295) Movement in Capital Work-in-Progress (385,534) 9,410,429 Proceeds from Sale of Fixed Assets 307,752 18,179,918 Loan given to Subsidiary Company 601,500,000 (92,518,000) Loan repayment by Subsidiary Company 796,500,000 85,285,000 Interest received 32,948,765 25,460,823 Dividend on investments received 439,381 — Purchase of Investments (2,557,513,881) (1,123,013,812) Proceeds from Sale of Subsidiary 446,848,239 — Proceeds from Sale of Investments 1,720,203,829 1,115,969,042 Net Cash (used in) / from Investing Activities (B) (180,842,399) 15,705,105 C) CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Long Term Borrowings: – Payments (34,310,693) (566,355,487) Proceeds from Short Term Borrowings: – Receipts 250,000,000 1,180,000,000 – Payments (550,000,000) (1,380,000,000) Interest paid (11,182,698) (72,254,964) Net Cash Flow used in Financing Activities (C) (345,493,391) (838,610,451) Net (Decrease) / Increase in Cash and Cash Equivalents (A)+(B)+ (C) (10,103,060) 125,972,927 Cash and Cash Equivalents as at the beginning of the year 242,492,848 116,519,921 Cash and Cash Equivalents as at the end of the year 232,389,788 242,492,848 (10,103,060) 125,972,927 NOTES ON CASH FLOW STATEMENT :1. Cash and cash equivalents at the end of the year as per Balance Sheet 232,389,788 242,492,848 232,389,788 242,492,8482. The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on
Cash Flow Statements issued by the Institute of Chartered Accountants of India. 3. Previous Year’s figures have been regrouped and rearranged wherever necessary. 4. Cash and Cash Equivalents includes Rupees 76,315,531 (Previous Year : Rupees 77,460,084) which are not available
for use by the Company (Refer Schedule 9 in the Financial Statements). 5. Cash flows in brackets indicate cash outgo.
This is the Cash Flow Statement referred to in our report of even date.
For Price Waterhouse & Co. For and on behalf of the Board of Directors
Firm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra Kulkarni
Chartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant Panday
Partner Director Director Executive Director & CEOMembership No. F-46061
N. Subramanian Mehul Shah
Group CFO VP - Compliance &Mumbai Company Secretary
Dated : May 23, 2011
Financials
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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees
SCHEDULE 1 : CAPITAL
Authorised Capital120,000,000 (Previous Year : 120,000,000) Equity shares of Rupees 10 each 1,200,000,000 1,200,000,000
Issued and Subscribed47,670,415 (Previous Year : 47,670,415) Equity shares of Rupees 10 each fully paid-up 476,704,150 476,704,150
476,704,150 476,704,150Notes :1. Of the above, 30,526,560 Equity Shares of Rupees 10 each are held
by Times Infotainment Media Limited, the Holding Company and its nominees.
2. Of the above, 3,391,840 Equity Shares of Rupees 10 each are held by Bennett, Coleman & Company Limited, the Ultimate Holding Company.
SCHEDULE 2 : RESERVES AND SURPLUSSecurities Premium Account 1,885,216,421 1,885,216,421Profit and Loss Account Balance 1,475,081,244 952,991,947
3,360,297,665 2,838,208,368
SCHEDULE 3 : SECURED LOANSWorking Capital Demand Loan from HSBC Bank Limited (Refer Note below) [Repayable within one year Rupees Nil (Previous Year : Rupees 100,000,000)] — 100,000,000
Note : Previous Year’s loan was secured by first pari passu charge on current assets and moveable fixed assets. — 100,000,000
SCHEDULE 4 : UNSECURED LOANSFrom Ultimate Holding Company - Bennett, Coleman & Company Limited — 34,310,693From Bank — 200,000,000[Repayable within one year Rupees Nil (Previous Year : Rupees 200,000,000)] — 234,310,693
Financials
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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011SCHEDULE 5 :
FIXED ASSETS (Refer Notes 1 (iv) and (ix) on Schedule 19)
Rupees
PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK
As at April 1, 2010
Additions Deletions As at March 31, 2011
As at April 1, 2010
For the year On Deletions
As at March 31, 2011
As at March 31, 2011
As at March 31, 2010
Intangible Asset
Computer Software (SAP) 16,907,372 — — 16,907,372 16,907,372 — — 16,907,372 — —
Migration Fees # 815,234,695 — — 815,234,695 407,617,350 81,523,470 — 489,140,820 326,093,875 407,617,345
One Time Entry Fees # # (Refer Note 10 on Schedule 19)
1,346,855,672 — — 1,346,855,672 411,208,072 134,685,566 — 545,893,638 800,962,034 935,647,600
Tangible Assets
Land - Leasehold 2,036,147 — — 2,036,147 — — — — 2,036,147 2,036,147
Building 7,578,551 — — 7,578,551 2,615,477 248,154 — 2,863,631 4,714,920 4,963,074
Leasehold Improvements 274,200,271 66,644 — 274,266,915 130,198,938 20,839,895 — 151,038,833 123,228,082 144,001,333
Office Equipment 1,000,970,624 8,090,796 507,000 1,008,554,420 419,838,926 81,702,100 217,940 501,323,086 507,231,334 581,131,698
Computers 155,883,068 6,757,914 890,737 161,750,245 122,763,318 14,156,530 880,445 136,039,403 25,710,842 33,119,750
Furniture and Fixtures 31,437,659 1,921,549 70,758 33,288,450 24,862,081 1,990,178 40,394 26,811,865 6,476,585 6,575,578
Motor Vehicles 8,423,766 1,854,047 1,264,004 9,013,809 5,627,941 814,563 1,142,925 5,299,579 3,714,230 2,795,825
GRAND TOTAL 3,659,527,825 18,690,950 2,732,499 3,675,486,276 1,541,639,475 335,960,456 2,281,704 1,875,318,227 1,800,168,049 2,117,888,350
Previous Year 3,664,490,224 23,068,295 28,030,694 3,659,527,825 1,175,694,244 369,774,865 3,829,634 1,541,639,475
11,475,105 11,089,571 Capital Work-in-Progress [Includes Capital Advance of Rupees 10,922,919 (Previous Year : Rupees 10,800,000)]
1,811,643,154 2,128,977,921
As at March 31, 2011 As at March 31, 2010 Nos. of Shares Rupees Nos. of Shares Rupees
SCHEDULE 6 : INVESTMENTS (Refer Notes 1(vi) and 9 on Schedule 19)
Non-Trade, Long Term (Unquoted) at cost Investment in Subsidiary Companies :
Equity Shares of Times Innovative Media Limited of Rupees 10 each fully paid-up (Refer Note 16 on Schedule 19) — — 32,000,000 320,000,000
Equity Shares of Alternate Brand Solutions (India) Limited of Rupees 10 each fully paid-up 1,600,000 70,250,000 1,600,000 70,250,000
Sub-total (A) 70,250,000 390,250,000
Nos. of Units Rupees Nos. of Units Rupees
Non-Trade, Long Term (Unquoted) at cost
Capital Gains Bonds: Non-convertible redeemable taxable bonds 500 5,000,000 — —(with benefits u/s 54EC of the Income Tax Act, 1961 for Long Term Capital Gains)
Sub-total (B) 5,000,000 —
Financials
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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011
As at March 31, 2011 As at March 31, 2010 Nos. of Units Rupees Nos. of Units Rupees
Non-Trade, Current (Unquoted - Mutual Funds)
LIC Mutual Fund – Liquid Fund – Growth, of Rupees 10 each — — 593,011 10,000,000
ICICI Prudential Liquid Super Institutional Plan – Growth, of Rupees 100 each 76,278 11,035,935 — —
ICICI Prudential Interval Fund – Monthly Interval Plan – I Institutional Dividend, of Rupees 10 each 9,995,202 99,999,997 — —
ICICI Prudential Interval Fund II – Quarterly Interval Plan D – Institutional Dividend, of Rupees 10 each 14,995,951 149,999,999 — —
ICICI Prudential Interval Fund IV – Quarterly Interval Plan B – Institutional Dividend, of Rupees 10 each 7,000,000 70,000,000 — —
DSP BlackRock FMP – 3M Series 32 – Dividend Payout, of Rupees 10 each 10,000,000 100,000,000 — —
IDFC Cash Fund – Super Institutional Plan C – Growth, of Rupees 10 each 7,911,448 93,035,460 — —
IDFC Fixed Maturity Quarterly Series 63 – Dividend, of Rupees 10 each 9,000,000 90,000,000 — —
HDFC Mutual Fund – Liquid Fund Premium Plus Plan – Growth, of Rupees 10 each 7,329,977 141,681,293 — —
Kotak Quarterly Interval Plan Series 1 – Dividend, of Rupees 10 each 10,000,000 100,000,000 — —
Sub-total (C) 855,752,684 10,000,000
Total [(A)+ (B) + (C)] 931,002,684 400,250,000
Note: Aggregate amount of repurchase price in Mutual Fund Units Rupees 861,540,039 (Previous Year : Rupees 10,001,008).
As at As at March 31, 2011 March 31, 2010 Rupees Rupees
SCHEDULE 7 : DEFERRED TAX(Refer Notes 1(viii) on Schedule 19)Deferred tax assets and liabilities are attributable to the following items:
Assets: Provision for Doubtful Debts 96,212,881 64,026,358 Provision for Doubtful Advances 2,076,094 2,124,375 Provision for Leave Encashment 4,111,916 3,998,826 Provision for Gratuity 6,838,502 5,652,765 Unabsorbed Depreciation / Business Losses — 208,972,432 Others 416,368 466,368 109,655,761 285,241,124 Liability:Depreciation 198,189,779 216,184,468 198,189,779 216,184,468
(88,534,018) 69,056,656
Financials
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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees Rupees
SCHEDULE 8 : SUNDRY DEBTORS(Unsecured)(Refer Notes 4 and 17 on Schedule 19)Debts Outstanding for a period exceeding six months
Considered Good 145,655,136 25,790,030 Considered Doubtful 217,497,166 126,442,379 363,152,302 152,232,409 Other DebtsConsidered Good 892,350,647 656,232,895 Considered Doubtful 72,147,994 61,925,841 964,498,641 718,158,736 1,327,650,943 870,391,145 Less: Provision for Doubtful Debts 289,645,160 188,368,220 1,038,005,783 682,022,925
SCHEDULE 9 : CASH AND BANK BALANCES Balance with Scheduled Bank on: Current Accounts 56,074,257 65,032,764 Short-Term Deposit Accounts 176,315,531 177,460,084 [Deposit aggregating Rupees 76,315,531 (Previous Year : Rupees 77,460,084) are lying under lien with Banks] 232,389,788 242,492,848
SCHEDULE 10 : LOANS AND ADVANCES (Unsecured and Considered Good) Advances Recoverable in Cash or in Kind or for Value to be Received Considered Good (Refer Note 2 below) 122,266,900 128,699,203Deposits Considered Good 129,370,775 122,501,450Considered Doubtful 6,250,000 6,250,000 135,620,775 128,751,450Less: Provision for Doubtful Deposits 6,250,000 6,250,000 129,370,775 122,501,450Advance Tax and Tax deducted at Source [Net of Provision of Rupees 297,258,870 (Previous Year : Rupees 160,236,485)] 81,118,017 87,232,535Minimum Alternate Tax Credit Entitlement 214,597,402 104,000,000Due from Subsidiary Company (Refer Note 1 below) 13,387,990 18,900,330Loan to the Subsidiary Company (Refer Note 3 below) — 195,000,000 560,741,084 656,333,518Notes: Company under same management, unless otherwise stated (Net) 1. Due from Alternate Brand Solutions (India) Limited the Subsidiary Company 13,387,990 18,223,359 Maximum balance outstanding 63,619,667 48,427,115 Due from Times Innovative Media Limited, the erstwhile Subsidiary — 676,971 Company (Refer Note 16 on Schedule 19) Maximum balance outstanding — 23,830,981
Financials
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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees Rupees
2. Due from Times Innovative Media Limited 759,685 — (Refer Note 16 on Schedule 19) Maximum balance outstanding 6,581,228 — Due from Mirchi Movies (India) Limited 751,831 385,679 Maximum balance outstanding 751,831 811,624 Due from Times Global Broadcasting Company Limited 2,015,669 1,675,985 Maximum balance outstanding 2,017,128 1,675,985
3. Maximum Loan outstanding from the Subsidiary Company Alternate Brand Solutions (India) Limited 16,500,000 — Times Innovative Media Limited — 195,000,000
SCHEDULE 11 : CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIES Sundry Creditors – Dues to Micro, Small and Medium Enterprises (Refer Note 5 on Schedule 19) 136,694 108,533– Others (Refer Note below) 509,181,911 391,215,111Advance from Customers 31,517,108 29,925,681Income received in advance 2,877,973 —Other Liabilities 71,567,165 80,265,949 615,280,851 501,515,274Note: Payable to Bennett, Coleman and Company Limited, the Ultimate Holding Company 146,494,185 147,396,331
PROVISIONS Gratuity (Refer Notes 1(vii) and 11 on Schedule 19) 20,587,045 16,630,670Leave Encashment (Refer Notes 1(vii) and 11 on Schedule 19) 12,378,764 11,764,713 32,965,809 28,395,383
Financials
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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010 Rupees Rupees
SCHEDULE 12 : SALES Sales (Refer Notes 1(iii) and 17 on Schedule 19) 2,724,795,895 2,301,309,831
2,724,795,895 2,301,309,831
SCHEDULE 13 : OTHER INCOME Profit on Sale of Investments 13,442,632 2,955,230 Digital Revenues, Marketing and Sales Commission 31,184,025 6,841,743 Provision no longer required written back 26,315,493 —Miscellaneous Income 18,161,506 743,617 89,103,656 10,540,590
SCHEDULE 14 : PRODUCTION EXPENSESRoyalty (Refer Note 19 on Schedule 19) 129,066,593 166,741,018 Other Production Expenses 31,880,818 33,042,417 160,947,411 199,783,435
SCHEDULE 15 : LICENSE FEESLicense Fees (Refer Note 1(xi) on Schedule 19) 140,231,911 119,024,378 140,231,911 119,024,378
SCHEDULE 16 : EMPLOYEE COSTSSalaries, Wages and Allowances (Net of Recovery) 513,312,145 435,913,943 Contributions to Provident and Other Funds 17,417,630 15,734,802 (Refer Notes 1(vii) and 11 on Schedule 19) Gratutity (Refer Notes 1(vii) and 11 on Schedule 19) 5,288,214 1,999,071 Welfare Expenses 28,419,885 28,171,444 564,437,874 481,819,260
Financials
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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010 Rupees Rupees
SCHEDULE 17 : ADMINISTRATION AND OTHER EXPENSESRent (Net of Recovery) 138,278,306 147,166,287 Rates and Taxes 3,388,640 3,337,547 Power and Fuel 81,655,683 82,598,720 Marketing 342,467,696 249,332,140 Travelling and Conveyance (Net of Recovery) 70,550,161 59,067,372 Insurance 2,293,262 2,419,247 Communication 13,396,444 14,363,665 Repairs and Maintenance on : – Buildings 2,804,598 585,069 – Plant and Machinery 20,162,526 20,807,534 – Others 19,225,855 18,584,202 Legal and Professional Fees 78,842,476 65,240,188 Software Expenses (Refer Note 1(iv)(c) on Schedule 19) 24,971,990 22,704,510 Auditors’ Remuneration (Refer Note 8 on Schedule 19) 2,643,248 2,618,983 Doubtful Advances written off — 13,628,470 Provision for Doubtful Debts (Net) 101,276,940 153,581,736 Bad Debts written off 73,605,423 11,868,540 Loss on Sale of Fixed Assets (Net) — 437,737 Fixed Assets written off 245,309 5,583,405 Director’s Sitting Fees 910,000 720,000 Miscellaneous Expenses 47,635,079 37,260,844 1,024,353,636 911,906,196
SCHEDULE 18 : INTEREST (INCOME) / EXPENSE (NET)
Interest Expense On Loan 11,182,698 71,845,377 On Others — 409,587 11,182,698 72,254,964
Less: Interest Income On Deposits with banks [Tax deducted at source Rupees 610,327 (Previous Year: Rupees 723,112)] 6,900,085 7,656,485 On Loans [Tax deducted at source Rupees 2,361,279 (Previous Year: Rupees 1,953,839)] 23,823,956 14,603,211 On Income Tax Refund 170,834 1,615,912 On Others 2,053,890 1,585,215 32,948,765 25,460,823
(21,766,067) 46,794,141
Financials
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SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS
Nature of Operations
The Company was incorporated on June 24, 1999. The Company operates FM radio broadcasting stations in 32 Indian cities under the brand
name ‘Radio Mirchi’. The Company’s principal revenue stream is advertising. Advertising revenues are generated through the sale of air time
in the Company’s FM radio broadcasting stations.
1. Significant Accounting Policies
i. Basis of Accounting
The financial statements comply in all material aspects with all the applicable accounting principles in India, the applicable accounting
standards notified under Section 211(3C) of the Companies Act, 1956 (“The Act”) and the relevant provisions of the Act. The financial
statements are prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently
applied by the Company.
ii. Use of Estimates
The preparation of financial statements in accordance with the generally accepted accounting principles requires the Management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities
as at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates. Any revision to such accounting estimates is recognised prospectively in the accounting
period in which such revision takes place.
iii. Revenue Recognition
Revenue from radio broadcasting is recognised on an accrual basis on the airing of client’s commercials. The revenue that is
recognised is net of service tax.
iv. Fixed assets and Depreciation
Cost of fixed assets comprises purchase price, duties, levies and any directly attributable cost of bringing the asset to its working
condition and location for the intended use.
Borrowing cost directly attributable to fixed assets which take substantial period of time to get ready for its intended use are
capitalised to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of fixed assets that are outstanding at each balance sheet date and cost of assets not ready
for their intended use before such date are disclosed as Capital Work-in-Progress.
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation and impairment losses, if any.
Depreciation on tangible fixed assets is provided on written down value method at the rates and in the manner specified in
Schedule XIV to the Act. The cost of leasehold improvements are amortised over the primary period of lease of the property.
Leasehold land is not amortised since the term of lease is perpetual in nature. Tangible assets individually costing less than
Rupees 5,000 are depreciated fully in the year of purchase.
b. Intangible assets (other than Software)
Migration fees paid by the Company for existing licenses upon migration to Phase II of the Licensing policy and One Time Entry
Fees paid by the Company for acquiring new licenses have been capitalised as an asset.
The migration fee capitalised is being amortised, with effect from April 1, 2005, equally over a period of ten years, being the
period of the license. One Time Entry Fees is amortised over a period of ten years, being the period of license, from the date of
operationalisation of the respective stations.
Financials
77ENTERTAINMENT NETWORK (INDIA) LIMITED
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c. Software
i. Software obtained initially together with hardware is capitalised along with the cost of hardware and depreciated in the
same manner as the hardware. All subsequent purchases of software licenses are treated as revenue expenditure and
charged in the year of purchase.
ii. Expenditure on acquired Computer Software (SAP) is recognised as “Intangible Asset“ and amortised over a period of
twenty five months. Expenditure on other software where the economic benefit is excepted to be more than a year is
amortised.
v. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency
as at the balance sheet date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the
Profit and Loss Account.
vi. InvestmentsInvestments that are intended to be held for not more than a year are classified as Current investments. All other investments are termed as Long term investments.
Current investments are stated at lower of cost and fair value. Long term investments are stated at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the long term investments.
vii. Retirement Benefits
a. Short Term Employee Benefits :
The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in
respect of leave encashment which is expected to be encashed / utilised within twelve months after the balance sheet date is
considered to be of short term nature.
b. Long Term Employee Benefits :
Defined Contribution Plans:
The Company has Defined Contribution plans for post employment benefits such as Provident Fund and Employee’s Pension
Scheme, 1995. Under the Provident Fund Plan, the Company contributes to a Government administered Provident Fund on
behalf of its employees and has no further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee’s Pension Scheme, 1995 and has no further obligation beyond
making its contribution.
The Company’s contributions to the above funds are charged to revenue every year.
Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity and Leave Encashment for all its employees. The liabilities in respect
of Leave Encashment which is expected to be encashed / utilised after twelve months from the balance sheet date is considered
to be long term in nature.
Liability for Defined Benefit Plan is provided on the basis of valuations, as at the balance sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary for measuring the liability is the Projected Unit Credit
Method.
c. Termination benefits are recognised as an expense as and when incurred.
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
78 ENTERTAINMENT NETWORK (INDIA) LIMITED
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viii. Income Taxes
Tax expense comprises of Current and Deferred tax. Current income tax and deferred tax are measured based on the amount
expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance with tax laws which give rise to future economic benefits in the form of adjustment
to future income tax liability is considered as an asset if there is convincing evidence that the company will pay normal tax in future.
Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with
it will flow to the company and the asset can be measured reliably.
Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable
income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
ix. Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to
its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the
balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
x. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow
of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to its present date
value and are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
xi. License Fees
As per the Frequency Module (FM) broadcasting policy, effective April 1, 2005 license fees are charged to revenue at the rate of 4% of
gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city, whichever is higher. Gross Revenue
for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes and without deduction of any discount given
to the advertiser and any commission paid to advertising agencies. Barter advertising contracts shall also be included in the gross
revenue on the basis of relevant billing rates. ROTEF means 25% of highest valid bid in the city.
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
79ENTERTAINMENT NETWORK (INDIA) LIMITED
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2. Contingent Liabilities
a. Guarantees issued by banks on behalf of the Company Rupees 15,254,202 (Previous Year : Rupees 6,000,000).
b. Corporate Guarantee issued by the Company to HDFC Bank on behalf of Times Innovative Media Limited (an erstwhile subsidiary
company) Rupees Nil (Previous Year : Rupees 200,000,000) and to HSBC Bank Rupees Nil (Previous Year : Rupees 500,000,000).
3. Capital Commitments
Estimated amount of contracts remaining to be executed on capital account Rupees 933,966 (Previous Year : Rupees 5,094,910) net of
advances of Rupees 10,922,919 (Previous Year : Rupees 10,800,000).
4. Sundry Debtors
Sundry Debtors include balances from the following companies under the same management:
Name of the party
Balance as at
March 31, 2011Rupees
March 31, 2010Rupees
Bennett, Coleman & Company Limited (BCCL) 130,572,015 40,938,607
Alternate Brand Solutions (India) Limited (ABSL) 3,265,221 7,721
Times Internet Limited (TIL) 341,707 1,288,208
Times Business Solutions Limited (TBSL) 317,713 657,491
Times Global Broadcasting Company Limited (TGBCL) 3,420,688 1,090,591
Artha Distribution Services Limited (ADSL) 8,922,580 8,922,580
Total 146,839,924 52,905,198
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
80 ENTERTAINMENT NETWORK (INDIA) LIMITED
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5. Sundry Creditors
i. Disclosure has been made as per the definition given in the Micro, Small and Medium Enterprises Development Act, 2006. The
Company received information from some of the “suppliers” regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures relating to the amounts as at year end together with interest payable as required
under the Act have been given below:
Particulars March 31, 2011
RupeesMarch 31, 2010
Rupees
i) Payment due as at the year end on account of: – Principal – Interest
136,694—
108,533—
ii) Total Interest paid on all delayed payment during the year — —
iii) Interest due on principal amounts paid beyond the due date during the year but without the interest amount
— —
iv) Interest accrued but not due — —
v) Total Interest due but not paid — —
The information in 5 (i) above and that regarding micro and small enterprises given in Schedule 11 “Current Liabilities” has been
determined to the extent such parties have been identified on the basis of information available with the Company. This has been
relied upon by the auditors.
ii. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.
6. Managerial Remuneration
a. Remuneration paid to the Managerial person:
2010-2011
Rupees2009-2010
Rupees
Salaries and Bonus 13,313,491 5,319,416
Contribution to Provident and Other Funds *346,005 1,507,638
Perquisites 25,502 2,744,120
Total 13,684,998@ 9,571,174#
* excludes contribution to gratuity and leave encashment which is based on actuarial valuations done at an overall company level.
@ The current year’s managerial remuneration is for the period beginning from July 1, 2010 and ending March 31, 2011 paid to the Executive Director & Chief Executive Officer of the Company.
# The Previous year’s managerial remuneration is for the six months period ended September 30, 2009 paid to the Managing Director of the Company.
Approval for the appointment and payment of the above remuneration in the previous year to Mr. A. P. Parigi, Managing Director has
been received from the Central Government of India, Ministry of Corporate Affairs vide their letter No. SRN/A/56429632/3/2009-CL.
VII dated October 26, 2009 and A70602552-CL-VII dated April 19, 2010.
b. Director’s Sitting Fees Rupees 910,000 (Previous Year : Rupees 720,000)
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
81ENTERTAINMENT NETWORK (INDIA) LIMITED
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c. Computation of Net Profit in accordance with Section 198 of the Companies Act , 1956 :
2010-2011
Rupees 2009-2010
Rupees
Profit before Taxation and Exceptional Items as per Profit and Loss Account 609,734,330 182,748,146
Add / (Deduct) :
Directors’ remuneration 13,684,998 9,571,174
Directors’ Sitting Fees 910,000 720,000
Provision for doubtful debts (net) 101,276,940 153,581,736
Loss on sale / disposal of fixed assets (net) 143,043 6,021,142
Profit on sale of investments (13,442,632) (2,955,230)
Net Profit 712,306,679 349,686,968
Maximum remuneration permissible under the Act at 5% 35,615,334 17,484,348
Remuneration paid to managerial person / Directors’ sitting fees 14,594,998 10,291,174
7 a. Value of Imports calculated on CIF basis:
2010-2011
Rupees
2009-2010
Rupees
Capital goods 4,238,115 933,005
Total 4,238,115 933,005
b. Expenditure in Foreign Currency
2010-2011
Rupees2009-2010
Rupees
Travel 466,962 303,013
Professional Fees 2,581,175 732,139
Others 167,908 294,980
Total 3,216,045 1,330,132
8. Auditors’ Remuneration
2010-2011
Rupees2009-2010
Rupees
As Auditors 2,500,000 2,500,000
Certification Fees 70,000 70,000
Reimbursement of out of pocket expenses 73,248 48,983
Total 2,643,248 2,618,983
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
82 ENTERTAINMENT NETWORK (INDIA) LIMITED
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9. Details of Current Investments bought and sold during the year
2010-2011
Units2009-2010
Units
HDFC Mutual Fund – Cash Management Fund – Savings Plan – Growth 8,251,427 6,388,631
HDFC Mutual Fund-Cash Management Fund-Treasury Advantage Plan-Wholesale-Growth 5,309,260 6,094,296
HDFC Mutual Fund – Liquid Fund Premium Plus Plan – Growth 5,096,372 —
ICICI Prudential Liquid Super Institutional Plan – Growth 5,478,165 3,099,668
IDFC Cash Fund - Super Institutional Plan C – Growth 13,478,668 —
DSP BlackRock Liquidity Fund - Institutional Plan – Growth 189,823 —
LIC Nomura Mutual Fund – Liquid Fund – Growth Plan 8,373,417 28,218,485
10. One Time Entry Fee (OTEF) and Migration Fee
As per the Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company was given the option to migrate all its existing
license from Phase I regime to Phase II regime on payment of migration fees. Migration fees for each station was equal to the average
of all successful bids received for that city. The Company had exercised the option and had migrated its licenses for all the seven cities
to Phase II regime by payment of migration fees aggregating Rupees 815,234,695. Migration Fees has remaining amortisation period of
four years.
Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. The payment made by
the Company to acquire these frequencies (One Time Entry Fees) was Rupees 1,301,000,000. The remaining amortisation period of OTEF
ranges between four and seven years.
Based on the opinion obtained from an independent firm of Chartered Accountants, both Migration Fees and One Time Entry Fees have
been capitalised as Intangible Asset.
11. The Company has classified the various employee benefits provided to employees as under :
I) Defined Contribution Plans
a. Provident Fund
b. State Defined Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995.
During the year, the Company has recognised the following amounts in the Profit and Loss Account :
2010-2011
Rupees2009-2010
Rupees
– Employers’ Contribution to Provident Fund* 12,555,624 11,421,584
– Employers’ Contribution to Employee’s Pension Scheme 1995* 4,222,396 4,313,218
– Employers’ Contribution to Employee State Insurance Scheme* 639,610 —
* Included in Contributions to Provident and Other Funds (Refer Schedule 16)
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
83ENTERTAINMENT NETWORK (INDIA) LIMITED
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II) Defined Benefit Plans
In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid Defined Benefit
Plan of gratuity based on the following assumptions:
As at
March 31, 2011As at
March 31, 2010
Discount Rate (per annum) 8.50% 8.00%
Rate of increase in Compensation levels 6.50% 6.50%
A) Changes in the Present Value of Obligation
As at
March 31, 2011
Rupees
As at
March 31, 2010
Rupees
Present Value of Obligation at the beginning of the year 16,630,670 16,845,843
Interest Cost 1,330,454 1,347,667
Past Service Cost — —
Current Service Cost 4,189,797 5,133,082
Curtailment Cost / (Credit) — —
Settlement Cost / (Credit) — —
Benefits Paid (1,331,839) (2,214,244)
Actuarial (gain) / loss on obligations (114,335) (4,584,050)
Effect of transfer in / transfer out (117,702) 102,372
Present Value of Obligation as at the year end 20,587,045 16,630,670
B) Reconciliation of Present Value of Defined Benefit Obligation and the Fair value of Assets
As at
March 31, 2011
Rupees
As at
March 31, 2010
Rupees
Present Value of funded obligation as at the year end — —
Fair Value of Plan Assets as at the end of the year — —
Funded Status — —
Present Value of unfunded Obligation as at the year end 20,587,045 16,630,670
Unrecognised Actuarial (gains) / losses — —
Unfunded (Liability) recognised in Balance Sheet (20,587,045) (16,630,670)
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
84 ENTERTAINMENT NETWORK (INDIA) LIMITED
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C) Amount recognised in the Balance Sheet
As at
March 31, 2011
Rupees
As at
March 31, 2010
Rupees
Present Value of Defined Benefit Obligation at the end of the year 20,587,045 16,630,670
Fair Value of Plan Assets as at the end of the year — —
Liability recognised in the Balance Sheet 20,587,045 16,630,670
D) Expenses recognised in the Profit and Loss Account
2010-2011
Rupees
2009-2010
Rupees
Current Service Cost 4,189,797 5,133,082
Past Service Cost — —
Interest Cost 1,330,454 1,347,667
Expected Return on Plan Assets — —
Curtailment Cost / (Credit) — —
Settlement Cost / (Credit) — —
Effects of transfer in 201,651 677,499
Effects of transfer out (319,353) (575,127)
Net actuarial (gain) / loss recognised in the year (114,335) (4,584,050)
Total Expenses recognised in the Profit and Loss Account 5,288,214 1,999,071
E) Experience Adjustment
2010-2011
Rupees
2009-2010
Rupees
Defined Benefit Obligation 20,587,045 16,630,670
Plan Assets — —
Deficit / Surplus 20,587,045 16,630,670
Experience Adjustment on Plan Liabilities Loss / (Gain) 1,037,081 (4,584,050)
Experience Adjustment on Plan Assets (Gain) / Loss — —
The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and
other relevant factors such as supply and demand in the employment market.
There is no other change in the accounting estimates due to applicability of AS-15 (Revised) as the parameters considered in the
financial year 2010-2011 are same as those considered in the financial year 2009-2010.
III) The liability for leave encashment and compensated absenses as at the year end is Rupees 12,378,764 (Previous Year : Rupees
11,764,713).
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
85ENTERTAINMENT NETWORK (INDIA) LIMITED
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12. Segment Information In accordance with Accounting Standard – 17, “Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company’s business segment is radio broadcasting business and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liabilities, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in the Financial Statements as of and for the year ended March 31, 2011. The Company caters to the needs of the domestic market and hence there are no reportable geographical segments.
13. Related Party Disclosures
a. Parties where control exists Bennett, Coleman & Company Limited (BCCL) – Ultimate Holding Company Times Infotainment Media Limited (TIML) – Holding Company
b. Subsidiary Companies
Alternate Brand Solutions (India) Limited (ABSL) – Subsidiary CompanyTimes Innovative Media Limited (TIM) – Subsidiary Company up to December 29, 2010TIM Delhi Airport Advertising Private Limited (TIMDAA) – A Subsidiary Company of TIM (ceased to be a subsidiary from December
29, 2010)
c. Fellow Subsidiary CompaniesMirchi Movies (India) Limited (MML)Times Internet Limited (TIL)Times Global Broadcasting Company Limited (TGBCL)Times Business Solutions Limited (TBSL)Optimal Media Solutions Limited (OMSL)Times VPL Limited (TVL) [formerly Vijayanand Printers Limited (VAPL)]Vardhaman Publishers Limited (VPL)Artha Distribution Services Limited (ADSL)*Times Innovative Media Limited (TIM) – from December 30, 2010 TIM Delhi Airport Advertising Private Limited (TIMDAA) – from December 30, 2010
d. Other Related Party
Aegon Religare Life Insurance Company (ARLIC)
e. Key Managerial PersonnelChairmanMr. Vineet JainManaging DirectorMr. A. P. Parigi – upto September 30, 2009
Executive Director & Chief Executive OfficerMr. Prashant Panday- Executive Director from July 1, 2010
Non-Executive DirectorsMr. N. KumarMr. Deepak M. Satwalekar - up to March 30, 2011Mr. Ravindra KulkarniMr. Ravindra DhariwalMr. A. P. Parigi - from October 01, 2009Mr. Richard Saldanha - from November 23, 2010
* There are no transactions during the year
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
86 ENTERTAINMENT NETWORK (INDIA) LIMITED
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–
Sale
of I
nves
tmen
t in
Subs
idia
ry45
0,00
0,00
0 –
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Year
end
Bal
ance
s with
Rela
ted
Parti
es :
Loan
Pay
able
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34,3
10,6
93
–
–
–
–
–
–
–
–
–
–
–
–
Trade
Rec
eiva
bles
130,
572,
015
–
–
3,2
65,2
21
–
–
–
–
341
,707
3,4
20,6
88
317
,713
–
–
–
8,
922,
580
– 4
0,93
8,60
7 –
–
7
,721
–
1,2
88,2
08
1,09
0,59
1 6
57,4
91
–
–
– 8
,922
,580
–
Non–
trade
Rec
eiva
bles
(Net
) –
–
–
13
,387
,990
–
7
51,8
31
759
,685
–
–
2,
015,
669
–
–
–
–
–
–
–
–
676,
971
18,2
23,3
59
385
,679
–
1,67
5,98
5 70
0,10
7 –
–
–
–
–
Loan
Rec
eiva
ble
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– –
195
,000
,000
–
–
–
–
–
–
–
–
–
–
Depo
sit 10
,000
,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10,0
00,0
00
–
–
–
–
–
–
–
–
–
–
–
–
Paya
bles
(Net
) 14
6,49
4,18
5 –
–
–
–
–
–
–
–
–
–
15,15
8,36
8 –
–
–
–
147
,396
,331
–
–
–
–
8
86,8
43
–
–
5,68
7,92
2 –
–
–
–
SCH
EDU
LES
FORM
ING
PA
RT O
F TH
E BA
LAN
CE S
HEE
T A
S AT
MA
RCH
31,
20
11 A
ND
PRO
FIT
AN
D
LOSS
ACC
OU
NT
FOR
THE
YEA
R EN
DED
MA
RCH
31,
20
11
SCH
EDU
LE 1
9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATEM
ENTS
(Con
td.)
13 f
. Tr
ansa
ctio
n w
ith R
elat
ed P
artie
sRu
pees
Financials
87ENTERTAINMENT NETWORK (INDIA) LIMITED
HOME
g. Details relating to Persons referred to in 13 (e) above
Name of the Person 2010-2011
Rupees2009-2010
Rupees
Mr. A. P. Parigi — 9,571,174
Director’s Sitting Fees 910,000 720,000
Mr. Prashant Panday 18,246,662 10,846,335Total 19,156,662 21,137,509
14. Disclosures for Operating Leases
Disclosures in respect of cancellable agreements for cars, transmission towers, office and residential premises taken on lease:
a. Lease payments recognised in the Profit and Loss Account Rupees 136,769,643 (Previous Year : Rupees 136,974,009).
b. All the agreements provide for early termination by the Company by giving prior notice in writing.
15. Earnings Per Share (Basic and Diluted)
The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of shares outstanding during
the year.
2010-2011 2009-2010
Profit for the year (Rupees) (A) 522,089,297 178,669,083
Weighted average number of Equity shares (B) 47,670,415 47,670,415
Earnings per share – Basic and Diluted (Rupees) (A/B) 10.95 3.75
Nominal value of an equity share (Rupees) 10 10
16. On December 29, 2010, the Company sold its entire stake in Times Innovative Media Limited (TIM) to Bennett, Coleman & Company Limited
(BCCL). The profit from this sale amounting to Rupees 126,848,239 has been reflected as exceptional items in the financial statements.
17. The Company has a Media Collaboration Arrangement with Bennett, Coleman & Company Limited (BCCL), the ultimate holding company.
This arrangement seeks to expand the advertisement market and inter-alia helps the Company to gain access to certain clients who may
not otherwise advertise in FM radio. The revenues generated from this arrangement were Rupees 167,865,293 (Previous Year : Rupees
144,153,607) in the current year. Subsequently, in view of the uncertainties as to timing and the quantum of the ultimate collection, the
Company has based on the principles of prudence, created a provision for doubtful debts to the extent of Rupees 111,829,272 (Previous
Year : Rupees 127,735,492) in respect of the sales made pursuant to this arrangement.
18. Provision for income tax has been made on the basis of Section 115JB of the Income Tax Act, 1961 (Minimum Alternate Tax).
19. The Honourable Copyright Board (“CRB”) vide its final order dated August 25, 2010 ruled that radio broadcasters will be liable to set
apart 2% of the net advertising earnings of each of their FM radio stations for royalty payment to all the music providers in proportion
to usage. Following a writ petition by the Super Cassettes Industries Limited (“SCIL”), the Honourable Delhi High Court granted stay on
implementation of the aforesaid CRB order against SCIL. Accordingly, w.e.f. August 25, 2010 the Company has accounted the music royalty
for sound recordings provided by all music providers other than the SCIL on a revenue share basis. In the interim, the music royalty for
sound recording provided by SCIL is accounted based on the needle hour rate indicated in the CRB order dated November 19, 2002.
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
88 ENTERTAINMENT NETWORK (INDIA) LIMITED
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20. As required by the Clause 32 of the listing agreement, the following disclosure is made:
Rupees
Balance as on
March 31, 2011
Maximum
amount
outstanding
during the year
ended March
31, 2011
Balance as on
March 31, 2010
Maximum
amount
outstanding
during the year
ended March
31, 2010
i. Loans and advances in the nature of loans to
subsidiary.
— 16,500,000 195,000,000 195,000,000
ii. Loans and advances in the nature of loans to
associates.
— — — —
iii. Loans and advances in the nature of loans where
there is no repayment schedule, or interest
below rate specified as per Section 372A of the
Companies Act, 1956.
— — — —
iv. Loans and advances in the nature of loans to
firms / companies in which directors are interested.
— — — —
v. Investments by the Loanee in the shares of the
Company as on 31st March, 2011.
— — — —
21. Recoveries deducted from expenses are on account of sharing of common expenses with subsidiaries and Group Companies.
22. Information pursuant to other provisions of Part II of Schedule VI to The Act, is either nil or not applicable to the Company for the year.
23. Previous year’s figures have been regrouped where necessary.
Signatures to Schedules “1” to “19” forming part of the financial statements.
For Price Waterhouse & Co. For and on behalf of the Board of DirectorsFirm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra KulkarniChartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant PandayPartner Director Director Executive Director & CEOMembership No. F-46061 N. Subramanian Mehul Shah Group CFO VP - Compliance &Mumbai Company SecretaryDated : May 23, 2011
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2011 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
89ENTERTAINMENT NETWORK (INDIA) LIMITED
HOME
Statement pursuant to part IV of the Companies Act, 1956BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I Registration Details Registration No. 11-120516 Balance Sheet Date 31 03 2011 State Code 11 Date Month YearII Capital Raised During the Year (Amount in Rs. Thousands) Public Issue Rights Issue
NIL NIL Bonus Issue Private Placement
NIL NILIII Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands) Total Liabilities Total Assets
4573782 4573782 Sources of Funds Paid up Capital Reserves and Surplus
476704 3360298 Secured Loans Unsecured Loans
NIL NIL Deferred Tax Liability
88534 Application of Funds Net Fixed Assets Investments
1811643 931003 Net Current Assets Miscellaneous Expenditure
1182890 NIL Accumulated Losses Deferred Tax Assets
NIL NILIV Performance of Company (Amount in Rs. Thousands) Turnover Total Expenditure
2835666 2225931 + – Profit / Loss Before Tax + – Profit / Loss After Tax
¡¡ 736583 ¡¡ 552089 (Please tick appropriate + for Positive, - for Negative) + – Earning Per Share in Rs. Dividend Rate %
¡¡ 10.95 NILV. Generic Names of Three Principal Products / Services of Company (As per monetary terms) Item Code No. (ITC Code) NOT APPLICABLE Product Description NOT APPLICABLE The Company is a service provider and does not deal in any products.
For and on behalf of the Board of Directors Vineet Jain Ravindra Dhariwal Ravindra Kulkarni Chairman Director Director
A. P. Parigi Richard Saldanha Prashant Panday Director Director Executive Director & CEO
N. Subramanian Mehul Shah Group CFO VP - Compliance & Mumbai Company Secretary Dated : May 23, 2011
Financials
90 ENTERTAINMENT NETWORK (INDIA) LIMITED
HOME
Sta
tem
ent
pur
sua
nt t
o Se
ctio
n 21
2 of
the
Com
pa
nies
Act
, 19
56(A
mou
nt in
Rup
ees)
Subs
idia
ry
Alte
rnat
e Br
and
Solu
tions
(Ind
ia)
Limite
d (A
BSL)
Times
Inno
vativ
e
Med
ia L
imite
d
(TIM
)*
TIM
Del
hi A
irpor
t
Adve
rtisi
ng P
rivat
e
Limite
d (T
IMDA
A)*
(Sub
sidi
ary
of T
IM)
Finan
cial
Yea
r end
edM
arch
31,
2011
Mar
ch 3
1, 20
11M
arch
31,
2011
Hol
ding
Com
pany
’s in
tere
st10
0%83
.44%
50.0
1%
Num
ber o
f Sha
res
held
by
the
Hol
ding
Com
pany
1,60
0,00
0 N
ilN
il
Net
agg
rega
te p
rofit
s/ (l
osse
s) o
f the
sub
sidia
ry fo
r the
cur
rent
yea
r so
far a
s it
conc
erns
the
mem
bers
of t
he h
oldi
ng c
ompa
ny
a.
deal
t with
or p
rovid
ed fo
r in
the
acco
unts
of t
he h
oldi
ng c
ompa
ny (R
s.)
Nil
Nil
Nil
b.
not d
ealt
with
or p
rovid
ed fo
r in
the
acco
unts
of t
he h
oldi
ng c
ompa
ny (R
s.)
4,05
8,22
4(6
5,13
1,301
)13
,194,
876
Net
agg
rega
te p
rofit
s /
(loss
es) f
or p
revio
us fi
nanc
ial y
ears
of t
he s
ubsi
diar
y so
far a
s it
conc
erns
the
mem
bers
of t
he h
oldi
ng c
ompa
ny
a.
deal
t with
or p
rovid
ed fo
r in
the
acco
unts
of t
he h
oldi
ng c
ompa
ny (R
s.)
Nil
Nil
Nil
b.
not d
ealt
with
or p
rovid
ed fo
r in
the
acco
unts
of t
he h
oldi
ng c
ompa
ny (R
s.)
(4,9
13,4
30)
(1,24
8,88
0,21
5)N
il
(Am
ount
in R
upee
s)
Subs
idia
ryIs
sued
and
subs
crib
ed
shar
e ca
pita
l
Rese
rves
Tota
l ass
ets
Tota
l Lia
bilit
esIn
vest
men
tsTu
rnov
erPr
ofit /
(Los
s)
befo
re ta
xatio
n
Prov
ision
for
taxa
tion
Profi
t / (L
oss)
afte
r tax
atio
n
Prop
osed
Div
iden
d
Alte
rnat
e Br
and
Solu
tions
(Indi
a) L
imite
d (A
BSL)
16,0
00,0
00
54,
104,
010
233
,376
,695
2
46,0
28,0
92
12,6
51,3
97
410
,632
,179
4,0
58,2
24
Nil
4,0
58,2
24
Nil
Times
Inno
vativ
e M
edia
Limite
d (T
IM)*
Nil
Nil
Nil
Nil
Nil
1,23
1,099
,304
(7
8,05
7,64
7)N
il (7
8,05
7,64
7)N
il
TIM
Del
hi A
irpor
t
Adve
rstin
g Pr
ivate
Lim
ited
(TIM
DAA)
* (Su
bsid
iary
of
TIM)
Nil
Nil
Nil
Nil
Nil
273
,228
,991
4
9,14
5,01
2 17
,524
,116
31,6
20,8
96
Nil
* Su
bsid
iary
upt
o 29
th D
ecem
ber 2
010
(Ref
er n
ote
16 o
n Sc
hedu
le 1
9)
Fo
r and
on
beha
lf of
the
Boar
d of
Dire
ctor
s
Vine
et J
ain
Ravi
ndra
Dha
riwal
Ra
vind
ra K
ulka
rni
C
hairm
an
Dire
ctor
D
irect
or
A
. P. P
arig
i Ri
char
d Sa
ldan
ha
Pras
hant
Pan
day
D
irect
or
Dire
ctor
Ex
ecut
ive
Dire
ctor
& C
EO
N. S
ubra
man
ian
Meh
ul S
hah
Gro
up C
FO
VP -
Com
plia
nce
&
Mum
bai
C
ompa
ny S
ecre
tary
D
ated
: M
ay 2
3, 2
011
Financials
91ANNUAL REPORT 2010-11
HOMEHOME
Auditors’ ReportAuditor’s Report on the Consolidated Financial Statements of Entertainment Network (India) Limited
The Board of Directors of Entertainment Network (India) Limited
1. We have audited the attached consolidated balance sheet of Entertainment Network (India) Limited (the “Company”) and its subsidiaries; hereinafter referred to as the “Group” (refer Note 1(iii) on Schedule 19 to the attached consolidated financial statements) as at March 31, 2011, the related consolidated Profit and Loss Account and the consolidated Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those 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. We did not audit the financial statements of 1 subsidiary included in the consolidated financial statements, which constitute total revenue of Rs. 2,732.3 Lakhs, net profit of Rs. 317.8 Lakhs and net cash flows amounting to Rs. 29.5 Lakhs for the period April 01, 2010 to December 29, 2010. This financial statements and other financial information have been audited by other auditors whose report has been furnished to us, and our opinion on the consolidated financial statements to the extent they have been derived from such financial statements is based solely on the report of such other auditor.
4. We report that the consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements notified under sub-section 3C of Section 211 of the Companies Act, 1956.
5. Based on our audit and on consideration of reports of other auditor on separate financial statements and on the other financial information of the component of the Group as referred to above, and to the best of our information and according to the explanations given to us, in our opinion, the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2011;
(b) in the case of the consolidated Profit and Loss Account, of the profit of the Group for the year ended on that date: and
(c) in the case of the consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.
For Price Waterhouse & Co. Firm Registration Number: 007567S Chartered Accountants
Uday ShahMumbai PartnerMay 23, 2011 Membership Number F-46061
ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
92 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Schedule Rupees Rupees Rupees
SOURCES OF FUNDSShareholders’ FundsCapital 1 476,704,150 476,704,150 Reserves and Surplus 2 3,346,673,972 3,490,235,923 Minority Interest — 134,128,971 Loan FundsSecured Loans 3 — 340,053,658 Unsecured Loans 4 — 234,310,693 Deferred Tax Liability (Net) 7 88,534,018 — 3,911,912,140 4,675,433,395 APPLICATION OF FUNDSFixed Assets 5Gross Block 3,683,213,091 4,500,559,099 Less : Depreciation / Amortisation 1,880,240,717 1,822,131,743 Net Block 1,802,972,374 2,678,427,356 Capital Work-in-Progress 11,475,105 38,824,496 1,814,447,479 2,717,251,852 Investments 6 873,404,081 16,500,000 Deferred Tax Assets (Net) 7 — 69,056,656 Current Assets, Loans and Advances Sundry Debtors 8 1,131,635,975 1,406,232,158 Cash and Bank Balances 9 232,851,323 281,189,518 Loans and Advances 10 658,945,000 992,431,092 2,023,432,298 2,679,852,768 Less: Current Liabilities and Provisions 11 Liabilities 764,621,025 1,086,083,458 Provisions 34,750,693 36,451,020 799,371,718 1,122,534,478 Net Current Assets 1,224,060,580 1,557,318,290 Profit and Loss Account Debit Balance — 315,306,597 TOTAL 3,911,912,140 4,675,433,395 Notes to the Consolidated Financial Statements 19 The Schedules referred to herein form an integral part of the Consolidated Balance Sheet.
This is the Consolidated Balance Sheet referred to in our report of even date.
For Price Waterhouse & Co. For and on behalf of the Board of DirectorsFirm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra KulkarniChartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant PandayPartner Director Director Executive Director & CEOMembership No. F-46061 N. Subramanian Mehul Shah Group CFO VP - Compliance &Mumbai Company SecretaryDated : May 23, 2011
Financials
93ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010 Schedule Rupees Rupees
Income
Sales 12 4,541,663,386 4,221,028,545 Other Income 13 109,583,290 14,352,075 4,651,246,676 4,235,380,620 Expenditure
Production Expenses 14 516,504,907 567,471,184 License Fees 15 1,076,208,404 1,314,955,616 Employee Costs 16 748,672,762 679,632,202 Administration and Other Expenses 17 1,277,934,624 1,221,351,879 Interest - net 18 22,455,812 121,179,038 Depreciation 422,557,804 525,599,783 4,064,334,313 4,430,189,702
Profit / (Loss) Before Exceptional Items and Taxation 586,912,363 (194,809,082)Loss on Sale of Subsidiary (Refer Note 11 on Schedule 19) (177,647,596) - Profit / (Loss) before Taxation 409,264,767 (194,809,082)Provision for Taxation (Refer Note 1(ix) on Schedule 19) – Current Tax 186,174,185 58,100,000 – Minimum Alternate Tax Credit Entitlement (112,997,402) (57,400,000)– Deferred Tax 158,840,605 23,261,038 – Fringe Benefit Tax — (971,215)Profit / (Loss) After Taxation And Before Minority Interest 177,247,379 (217,798,905)Minority Interest (Refer Note 11 on Schedule 19) 5,502,733 (64,584,467)Net Profit / (Loss) 171,744,646 (153,214,438)
Balance Brought Forward (315,306,597) (162,092,159)Transferred pursuant to sale of subsidiary (Refer Note 11 on Schedule 19) 1,605,165,492 —Profit / (Loss) balance carried forward to the Balance Sheet 1,461,603,541 (315,306,597)Earnings Per Share (Refer Note 10 on Schedule 19) – Basic 3.60 (3.21)– Diluted 3.60 (3.21)Notes to the Consolidated Financial Statements 19The Schedules referred to herein form and integral part of the Consolidated Profit and Loss Account.
This is the Consolidated Profit and Loss Account referred to in our report of even date.
For Price Waterhouse & Co. For and on behalf of the Board of DirectorsFirm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra KulkarniChartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant PandayPartner Director Director Executive Director & CEOMembership No. F-46061 N. Subramanian Mehul Shah Group CFO VP - Compliance &Mumbai Company SecretaryDated : May 23, 2011
Financials
94 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011. 2010-2011 2009-2010 Rupees Rupees
A) CASH FLOW FROM OPERATING ACTIVITIES : Profit / (Loss) Before Taxation 409,264,767 (194,809,082) Adjustments for : Depreciation and Amortisation 422,557,804 525,599,783 Fixed Assets written off 20,530,310 10,740,734 Loss on Sale of Subsidiary (Refer Note 11 on Schedule 19) 177,647,596 — Interest Income (12,981,294) (13,001,394) Interest Expense 35,437,106 134,180,432 Provision no longer required written back (44,316,555) — Doubtful Advances written off — 13,988,470 Doubtful Deposits written off — 2,264,590 Dividend on investments received (732,781) — Profit on Sale of Fixed Assets (Net) (546,619) (124,181) Profit on Sale of Investments (Net) (14,098,387) (3,533,054) Provision for Doubtful Advances 40,593,526 2,914,162 Provision for doubtful debts written back — (2,000,000) Provision for Doubtful Debts (Net) 160,462,162 224,034,476 Bad Debts written off (Net) 104,813,532 65,142,734 Provision for Retirement Benefits 5,670,139 1,028,938 Operating Profit Before Working Capital Changes 1,304,301,306 766,426,608 Adjustments for changes in working capital : (Increase) in Sundry Debtors (560,399,172) (373,911,581) (Increase) / Decrease in Other receivables (738,727,160) 692,371,553 Increase in Trade and Other payables 302,053,465 256,007,914 Cash generated from operations 307,228,439 1,340,894,494 Taxes paid (net) (173,359,305) (76,334,108) Net Cash from Operating Activities (A) 133,869,134 1,264,560,386 B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Fixed Assets (285,219,573) (193,639,332) Movement in Capital Work-in-Progress 24,460,022 97,692,083 Proceeds from Sale of Fixed Assets 879,875 24,757,486 Dividend on investments received 439,381 — Purchase of Investments (2,994,020,360) (1,499,513,812) Proceeds from Sale of Investments 2,151,214,665 1,486,546,866 Proceeds from Sale of Subsidiary 446,848,239 — Interest received 12,981,294 13,001,394 Net Cash used in Investing Activities (B) (642,416,457) (71,155,315)C) CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Long Term Borrowings: – Payments (34,310,693) (566,355,487) Proceeds from Short Term Borrowings: – Receipts 1,580,296,856 1,420,000,000 – Payments (1,120,000,000) (1,760,000,000) Interest paid (35,490,764) (134,263,403) Share Application money received from minority shareholders (Refer Note 11 on Schedule 19) 127,120,250 — Net Cash Flow from / (used in) Financing Activities (C) 517,615,649 (1,040,618,890) Net Increase in Cash and Cash Equivalents (A+B+C) 9,068,326 152,786,181
Cash and Cash Equivalents as at the beginning of the year 281,189,518 128,403,337 Cash and Cash Equivalents transferred pursuant to Sale of Subsidiary (57,406,521) — Cash and Cash Equivalents as at the end of the year 232,851,323 281,189,518 9,068,326 152,786,181 NOTES ON CASH FLOW STATEMENT :1. Cash and cash equivalents at the end of the year as per Balance Sheet. 232,851,323 281,189,518 232,851,323 281,189,518 2. The above statement has been prepared following the “Indirect Method” as set out in
Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. 3. Previous Year’s figures have been regrouped and rearranged wherever necessary. 4. Cash and Cash Equivalents includes Rupees 76,315,531 (Previous Year : Rupees 78,989,614) which are not available for use by the Company (Refer Schedule 9 in the Financial
Statements). 5. Cash flows in brackets indicate cash outgo.
This is the Consolidated Cash Flow Statement referred to in our report of even date.
For Price Waterhouse & Co. For and on behalf of the Board of Directors
Firm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra Kulkarni
Chartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant Panday
Partner Director Director Executive Director & CEOMembership No. F-46061
N. Subramanian Mehul Shah
Group CFO VP - Compliance &Mumbai Company Secretary
Dated : May 23, 2011
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees
SCHEDULE 1 : CAPITALAuthorised Capital
120,000,000 (Previous Year : 120,000,000) Equity shares of Rupees 10 each 1,200,000,000 1,200,000,000
Issued and Subscribed47,670,415 (Previous Year : 47,670,415) Equity shares of Rupees 10 each fully paid-up 476,704,150 476,704,150
476,704,150 476,704,150Notes:1. Of the above, 30,526,560 Equity Shares of Rupees 10 each are held
by Times Infotainment Media Limited, the Holding Company and its nominees.
2. Of the above, 3,391,840 Equity Shares of Rupees 10 each are held by Bennett, Coleman & Company Limited, the Ultimate Holding Company.
SCHEDULE 2 : RESERVES AND SURPLUS
Capital Reserve
As per last balance sheet 2,086,092 2,086,092
Less:
Capital Reserve of subsidiary transferred pursuant to sale
(Refer Note 11 on Schedule 19) (2,086,092) —
— 2,086,092
Securities Premium Account
As per last balance sheet 3,488,149,831 3,488,149,831
Less:
Securities Premium of subsidiary transferred pursuant to sale
(Refer Note 11 on Schedule 19) (1,603,079,400) —
1,885,070,431 3,488,149,831
Profit and Loss Account 1,461,603,541 —
3,346,673,972 3,490,235,923
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees
SCHEDULE 3 : SECURED LOANS
Working Capital Demand Loan from HSBC Bank Limited — 340,000,000
[Repayable within one year Rupees Nil (Previous Year : Rupees 340,000,000)] (Refer Note below)
Interest Accrued and due — 53,658
— 340,053,658 Note:Previous Year’s loan was Secured against creation of charge on first and exclusive charge over present and future plant and machinery, stock of raw material, stock-in-process, stores, semi-finished and finished goods and tools, book-debts, outstanding, monies receivable, claims due to, contract, engagements, securities, bills which are not due and owing or which may at any time hereafter during the continuance of this security become due or owing on loan taken from HSBC Bank Limited.
SCHEDULE 4 : UNSECURED LOANS
From Ultimate Holding Company - Bennett, Coleman & Company Limited — 34,310,693
From Bank — 200,000,000
[Repayable within one year Rupees Nil (Previous Year : Rupees 200,000,000)]
— 234,310,693
SCHEDULE 5 : FIXED ASSETS (Refer Notes 1(v) and (x) on Schedule 19) Rupees
PARTICULARS
GROSS BLOCK DEPRECIATION NET BLOCK
As at April 1, 2010
Additions Deletions Transfer on sale of
Subsidiary*
As at March 31,
2011
As at April 1, 2010
For the Year On Deletions
Transfer on sale of
Subsidiary*
As at March 31,
2011
As at March 31, 2011
As at March 31,
2010
Intangible Asset
Computer Software (SAP) 16,907,372 — — — 16,907,372 16,907,372 — — — 16,907,372 — —
Migration Fees # 815,234,695 — — — 815,234,695 407,617,350 81,523,470 — — 489,140,820 326,093,875 407,617,345
One Time Entry Fees # 1,346,855,672 — — — 1,346,855,672 411,208,072 134,685,566 — — 545,893,638 800,962,034 935,647,600
Tangible Asset
Land - Leasehold 2,036,147 — — — 2,036,147 — — — — — 2,036,147 2,036,147
Building 7,578,551 — — — 7,578,551 2,615,477 248,154 — — 2,863,631 4,714,920 4,963,074
Leasehold Improvements 274,626,751 66,644 — 426,480 274,266,915 130,272,054 20,894,582 — 127,803 151,038,833 123,228,082 144,354,697
Plant and Machinery 814,461,839 266,162,909 192,455,142 888,169,606 — 267,786,310 83,142,636 172,525,545 178,403,401 — — 546,675,529
Office Equipment 1,012,730,512 8,097,496 981,027 9,508,165 1,010,338,816 424,096,723 83,290,579 585,839 4,782,601 502,018,862 508,319,954 588,633,789
Computers 168,414,456 7,116,928 2,297,209 6,168,346 167,065,829 130,507,967 15,792,482 1,922,573 4,480,114 139,897,762 27,168,067 37,906,489
Furniture and Fixtures 33,226,478 1,921,549 94,522 1,138,220 33,915,285 25,453,007 2,161,243 51,456 382,574 27,180,220 6,735,065 7,773,471
Motor Vehicles 8,486,626 1,854,047 1,264,004 62,860 9,013,809 5,667,411 819,092 1,142,925 43,999 5,299,579 3,714,230 2,819,215
GRAND TOTAL 4,500,559,099 285,219,573 197,091,904 905,473,677 3,683,213,091 1,822,131,743 422,557,804 176,228,338 188,220,492 1,880,240,717 1,802,972,374 2,678,427,356
Previous Year 4,391,552,372 193,639,332 84,632,605 — 4,500,559,099 1,345,790,526 525,599,783 49,258,566 — 1,822,131,743
Capital Work-in-Progress [Including Capital Advance of Rupees 10,922,919 (Previous Year : Rupees 36,113,872)] 11,475,105 38,824,496
1,814,447,479 2,717,251,852
* (Refer Note 11 on Schedule 19) # (Refer Note 5 on Schedule 19)
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Nos. of Units Rupees Nos. of Units Rupees
SCHEDULE 6 : INVESTMENTS(Refer Notes 1(vii) on Schedule 19) Non-Trade, Long Term (Unquoted) at costCapital Gains Bonds :Non-convertible redeemable taxable bonds 500 5,000,000 — —(with benefits u/s 54EC of the Income Tax Act, 1961 for Long Term Capital Gains)
Sub-total (A) 5,000,000 —Non-Trade, Current (Unquoted - Mutual Funds)LIC Mutual Fund-Liquid Fund-Growth, of Rupees 10 each — — 978,468 16,500,000 ICICI Prudential Liquid Super Institutional Plan – Growth, of Rupees 100 each 76,278 11,035,935 — —ICICI Prudential Interval Fund – Monthly Interval Plan - I Institutional Dividend, of Rupees 10 each 9,995,202 99,999,997 — —ICICI Prudential Interval Fund II – Quarterly Interval Plan D-Institutional Dividend, of Rupees 10 each 14,995,951 149,999,999 — —ICICI Prudential Interval Fund IV – Quarterly Interval Plan B – Institutional Dividend, of Rupees 10 each 7,000,000 70,000,000 — —DSP BlackRock FMP - 3M Series 32 - Dividend Payout, of Rupees 10 each 10,000,000 100,000,000 — —IDFC Cash Fund - Super Institutional Plan C – Growth, of Rupees 10 each 7,911,448 93,035,460 — —IDFC Fixed Maturity Quarterly Series 63 - Dividend, of Rupees 10 each 9,000,000 90,000,000 — —HDFC Mutual Fund – Liquid Fund Premium Plus Plan – Growth, of Rupees 10 each 7,329,977 141,681,293 — —Kotak Quarterly Interval Plan Series 1 - Dividend, of Rupees 10 each 10,000,000 100,000,000 — —Reliance Mutual Fund – Cash Plan – Growth Plan, of Rupees 10 each 799,308 12,651,397 — — Sub-total (B) 868,404,081 16,500,000 Total [(A)+ (B)] 873,404,081 16,500,000
Note: Aggregate amount of repurchase price in Mutual Fund Units Rupees 874,244,883 (Previous Year : Rupees 16,501,663).
As at As at March 31, 2011 March 31, 2010 Rupees Rupees
SCHEDULE 7 : DEFERRED TAX(Refer Note 1(ix) on Schedule 19) Deferred tax assets and liabilities are attributable to the following items: Assets : Provision for Doubtful Debts 96,212,881 64,026,358 Provision for Doubtful Advances 2,076,094 2,124,375 Provision for Leave Encashment 4,111,916 3,998,826 Provision for Gratuity 6,838,502 5,652,765 Unabsorbed Depreciation / Business Losses - 208,972,432 Others 416,368 466,368 109,655,761 285,241,124 Liability: Depreciation 198,189,779 216,184,468 198,189,779 216,184,468
(88,534,018) 69,056,656
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees Rupees
SCHEDULE 8 : SUNDRY DEBTORS(Unsecured)
Debts Outstanding for a period exceeding six months
Considered Good 184,489,603 176,650,461
Considered Doubtful 224,950,611 267,608,603
409,440,214 444,259,064
Other Debts
Considered Good 947,146,372 1,229,581,697
Considered Doubtful 72,147,994 108,525,094
1,019,294,366 1,338,106,791
1,428,734,580 1,782,365,855
Less: Provision For Doubtful Debts (Refer Notes 11 and 12 on Schedule 19) 297,098,605 376,133,697
1,131,635,975 1,406,232,158
SCHEDULE 9 : CASH AND BANK BALANCES
Balance with Scheduled Bank on:
Current Accounts 56,535,792 102,199,904
Short-Term Deposit Accounts (Refer Note below) 176,315,531 178,989,614
232,851,323 281,189,518
Note:Deposits, aggregating Rupees 76,315,531 (Previous Year : Rupees 77,460,084) are lying under lien with Banks; aggregating Rupees Nil (Previous Year: Rupees 437,530) are lying under lien with The Commissioner, Greater Hyderabad Municipal Corporation; aggregating Rupees Nil (Previous Year: Rupees 1,092,000) are lying under lien with Commissioner, Municipal Corporation, Chandigarh.
SCHEDULE 10 : LOANS AND ADVANCES
(Unsecured and Considered Good)
Advances Recoverable in Cash or in Kind or for Value to be Received
Considered Good 173,698,869 354,254,287
Considered Doubtful — 4,414,162
173,698,869 358,668,449
Deposits
Considered Good 130,029,888 305,318,309
Considered Doubtful 6,676,497 6,250,000
136,706,385 311,568,309
Less: Provision For Doubtful Loans, Advances and Deposits 6,676,497 10,664,162
130,029,888 300,904,147
Advance Tax and Tax deducted at Source [Net of Provision 138,218,841 228,858,496
of Rupees 307,133,870 (Previous Year : Rupees 190,711,487)]
Minimum Alternate Tax Credit Entitlement 216,997,402 104,000,000
658,945,000 992,431,092
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011
As at As at March 31, 2011 March 31, 2010 Rupees Rupees
SCHEDULE 11 : CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIES
Sundry Creditors
- Dues to Micro, Small and Medium Enterprises 136,694 3,121,693
- Others (Refer Note below) 641,299,415 869,053,236
Advance from Customers 43,557,846 42,323,759
Income received in advance 2,877,973 —
Other Liabilities 76,749,097 171,584,770
764,621,025 1,086,083,458
Note:
Payable to Bennett, Coleman & Company Limited, 160,481,178 141,083,437
the Ultimate Holding Company
PROVISIONS
Gratuity (Refer Notes 1(viii) and 6 on Schedule 19) 21,587,753 20,806,953
Leave Encashment (Refer Notes 1(viii) and 6 on Schedule 19) 13,162,940 15,644,067
34,750,693 36,451,020
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010 Rupees Rupees
SCHEDULE 12 : SALES(Refer Notes 1(iv) and 12 on Schedule 19)
Airtime Sales 2,721,775,174 2,297,439,141
Event Income 336,562,040 362,842,058
Out of Home Media Income 1,483,326,172 1,560,747,346
4,541,663,386 4,221,028,545
SCHEDULE 13 : OTHER INCOME
Profit on Sale of Investments (Net) 14,098,387 3,533,054
Profit on Sale of Fixed Assets (Net) 546,619 124,181
Digital Revenues, Marketing and Sales Commission 31,184,025 6,841,743
Provision for doubtful debts written back — 2,000,000
Provision no longer required written back 44,316,555 454,289
Miscellaneous Income 19,437,704 1,398,808
109,583,290 14,352,075
SCHEDULE 14 : PRODUCTION EXPENSES
Royalty (Refer Note 13 on Schedule 19) 129,066,593 166,741,018
Other Production Expenses 31,880,818 33,042,416
Event Expenses 274,573,482 275,732,149
Out of Home Media Expenses 80,984,014 91,955,601
516,504,907 567,471,184
SCHEDULE 15 : LICENSE FEES
License Fees (Refer Note 1(xii) on Schedule 19) 1,076,208,404 1,314,955,616
1,076,208,404 1,314,955,616
SCHEDULE 16 : EMPLOYEE COSTS
Salaries, Wages and Allowances (Net of Recovery) 685,462,305 618,090,005
Contributions to Provident and Other Funds (Refer Notes 1(viii) and 6 on Schedule 19) 22,183,865 22,688,771
Gratutity (Refer Notes 1(viii) and 6 on Schedule 19) 6,658,048 3,375,836
Welfare Expenses 34,368,544 35,477,590
748,672,762 679,632,202
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
2010-2011 2009-2010 Rupees Rupees
SCHEDULE 17 : ADMINISTRATION AND OTHER EXPENSES
Rent (Net of Recovery) 157,299,447 190,351,870
Rates and Taxes 11,702,194 7,013,936
Power and Fuel 115,477,747 133,095,624
Marketing 271,240,910 201,149,722
Travelling and Conveyance (Net of Recovery) 124,710,044 112,083,459
Insurance 3,831,450 4,428,529
Communication 16,027,199 21,216,980
Repairs and Maintenance on:
– Buildings 2,859,726 585,069
– Plant and Machinery 21,108,716 23,291,334
– Others 23,987,727 25,635,842
Legal and Professional Fees 106,575,021 100,924,342
Software Expenses (Refer Note 1(v)(c) on Schedule 19) 26,756,271 23,274,795
Auditors’ Remuneration 3,749,037 3,688,381
Provision for Doubtful Debts (Net) 160,462,162 224,034,476
Provision for Doubtful Advances 40,593,526 2,914,162
Bad Debts written off (Net) 104,813,532 65,142,734
Doubtful Deposits written off — 2,264,590
Directors’ Sitting Fees 1,350,000 720,000
Doubtful Advances written off — 13,988,470
Fixed Assets written off 20,530,310 10,740,734
Miscellaneous Expenses 64,859,605 54,806,830
1,277,934,624 1,221,351,879
SCHEDULE 18 : INTEREST EXPENSES
Interest Expense
On Loan 33,462,684 112,967,504
On Others 1,974,422 21,212,928
35,437,106 134,180,432
Less: Interest Income
On Deposits with banks 7,011,735 7,949,982
On Loans 29,779 —
On Income-Tax Refund 3,885,890 3,193,856
On Others 2,053,890 1,857,556
12,981,294 13,001,394
22,455,812 121,179,038
Financials
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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS
1. Significant Accounting Policies
i. Basis of Accounting
The Consolidated Financial Statements of Entertainment Network (India) Limited (“the Company”) and its subsidiary companies,
Times Innovative Media Limited and Alternate Brand Solutions (India) Limited, (collectively referred to as ‘the Group’) are prepared
under the historical cost convention to comply in all material aspects with all the applicable accounting principles in India and the
Accounting Standard 21 on Consolidation of Financial Statements, issued by the Institute of Chartered Accountants of India, to the
extent possible in the same format as that adopted by the Company for its separate financial statements.
ii. Use of Estimates
The preparation of financial statements in accordance with the generally accepted accounting principles requires the Management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities
as at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could
differ from these estimates. Any revision to such accounting estimates is recognised prospectively in the accounting period in which
such revision takes place.
iii. Principles of Consolidation
1. The consolidated financial statements have been prepared on the following basis:
– The financial statements of the Company and its Subsidiary Companies have been combined on a line-by-line basis by
adding together the book values of like items of assets, liabilities, revenues and expenses.
– Intra-group balances and intra-group transactions and resulting profits are eliminated in full.
– The consolidated financial statements have been prepared using uniform accounting policies for like transactions and
other events in similar circumstances and are presented to the extent possible in the same manner as the Company’s
separate financial statements.
2. The subsidiaries considered in the consolidated financial statements are:
Name of the Company Country of Incorporation % voting power
Alternate Brand Solutions (India) Limited (ABSL) as on 31st March 2011 India 100
Times Innovative Media Limited (TIM)* India 83.44
TIM Delhi Airport Advertising Private Limited (TIMDAA)* India 50.01
* Results consolidated till sale on December 29, 2010. (Refer Note 11)
iv. Revenue Recognition
Revenue from radio broadcasting is recognised on an accrual basis on the airing of client’s commercials. The revenue that is
recognised is net of service tax.
Revenue from short period events is recognised according to the completed performance method. Revenue from services provided
over a longer term is recognised when the result of the transactions can be determined with reliability and on the percentage
completed basis. Down payments invoiced before these dates are recorded under prepaid income / customer advances.
Revenue from Outdoor advertising business is recognised on the display of advertisements net of service tax.
Financials
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v. Fixed assets and Depreciation
Cost of fixed assets comprises purchase price, duties, levies and any directly attributable cost of bringing the asset to its working
condition and location for the intended use.
Borrowing cost directly attributable to fixed assets which take substantial period of time to get ready for its intended use are
capitalised to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of fixed assets that are outstanding at each balance sheet date and cost of assets not ready
for their intended use before such date are disclosed as Capital Work-in-Progress.
a. Tangible assets
Tangible fixed assets are stated at cost less accumulated depreciation and impairment losses, if any.
Depreciation on tangible fixed assets is provided on written down value method at the rates and in the manner specified in
Schedule XIV to the Act. The cost of leasehold improvements is amortised over the primary period of lease of the property.
Lease hold land is not amortised since the term of lease is perpetual in nature. Tangible assets individually costing less than
Rupees 5,000 are depreciated fully in the year of purchase.
Plant and machinery in the outdoor business is depreciated over the useful life of the asset, being the period of the respective
underlying contract, on an uniform basis.
b. Intangible assets (other than Software)
Migration fees paid by the Company for existing licenses upon migration to Phase II of the Licensing policy and One Time Entry
Fees paid by the Company for acquiring new licenses have been capitalised as an asset.
The migration fee capitalised is being amortised, with effect from April 1, 2005, equally over a period of ten years, being the
period of the license. One Time Entry Fee will be amortised over a period of ten years, being the period of license, from the date
of operationalisation of the respective stations.
c. Software
i. Software obtained initially together with hardware is capitalised along with the cost of hardware and depreciated in the
same manner as the hardware. All subsequent purchases of software licenses are treated as revenue expenditure and
charged in the year of purchase.
ii. Expenditure on acquired Computer Software (SAP) is recognised as “Intangible Asset” and amortised over a period of
twenty five months. Expenditure on other software where the economic benefit is expected to be more than a year is
amortised.
vi. Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency
as at the balance sheet date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the
Profit and Loss Account.
vii. Investments
Investments that are intended to be held for not more than a year are classified as Current investments. All other investments are
termed as Long term investments.
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
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Current investments are stated at lower of cost and fair value. Long term investments are stated at cost. However, provision for
diminution in value is made to recognise a decline other than temporary in the value of the long term investments.
viii. Retirement Benefits
a. Short Term Employee Benefits :
The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in
respect of leave encashment which is expected to be encashed / utilised within twelve months after the balance sheet date is
considered to be of short term nature.
b. Long Term Employee Benefits :
Defined Contribution Plans:
The Company has Defined Contribution Plans for post employment benefits such as Provident Fund and Employee’s Pension
Scheme, 1995. Under the Provident Fund Plan, the Company contributes to a Government administered Provident Fund on
behalf of its employees and has no further obligation beyond making its contribution.
The Company contributes to a State Plan namely Employee’s Pension Scheme, 1995 and has no further obligation beyond
making its contribution.
The Company’s contributions to the above funds are charged to revenue every year.
Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity and Leave Encashment for all its employees. The liabilities in respect
of Leave Encashment which is expected to be encashed / utilised after twelve months from the balance sheet date is considered
to be long term in nature.
Liability for Defined Benefit Plan is provided on the basis of valuations, as at the balance sheet date, carried out by an independent
actuary. The actuarial valuation method used by the independent actuary for measuring the liability is the Projected Unit Credit
Method.
c. Termination benefits are recognised as an expense as and when incurred.
ix. Income Taxes
Tax expense comprises of Current and Deferred tax. Current income tax is measured based on the amount expected to be paid to
the tax authorities in accordance with the Income Tax Act, 1961.
Minimum Alternative Tax (MAT) paid in accordance with tax laws which give rise to future economic benefits in the form of adjustment
to future income tax liability is considered as an asset if there is convincing evidence that the company will pay normal tax in future.
Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with
it will flow to the company and the asset can be measured reliably.
Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable
income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
105ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
HOME
x. Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to
its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the
balance sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
xi. Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow
of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to its present date
value and are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
xii. License Fees
As per the Frequency Module (FM) broadcasting policy, effective April 1, 2005 license fees are charged to revenue at the rate of 4% of
gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city, whichever is higher. Gross Revenue
for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes and without deduction of any discount given
to the advertiser and any commission paid to advertising agencies. Barter advertising contracts shall also be included in the gross
revenue on the basis of relevant billing rates. ROTEF means 25% of highest valid bid in the city.
2. Contingent Liabilities
a. Guarantees issued by banks on behalf of the Group Rupees 15,254,202 (Previous Year : Rupees 7,092,000).
b. Corporate Guarantee issued by the Group to HDFC Bank Rupees Nil (Previous Year : Rupees 200,000,000) and to HSBC Bank Rupees
Nil (Previous Year : Rupees 500,000,000).
3. Capital Commitments
Estimated amount of contracts remaining to be executed on capital account Rupees 933,966 (Previous Year : Rupees 40,547,643) net of
advances of Rupees 10,922,919 (Previous Year : Rupees 36,113,872).
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
106 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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4. Managerial Remuneration
a. Remuneration paid to the Managerial Persons:
2010-2011
Rupees2009-2010
Rupees
Salaries and Bonus 26,954,119 16,982,612
Contribution to Provident and Other Funds *722,368 2,013,078
Perquisites 29,697 2,860,952
Total 27,706,184@ 21,856,642#
* excludes contribution to gratuity and leave encashment which is based on actuarial valuations done at an overall company level.
@ The current year’s managerial remuneration includes the remuneration paid to the Executive Director & Chief Executive Officer of
the Company from the date of his appointment (i.e. July 1, 2010) to March 31, 2011.
# The Previous year’s managerial remuneration includes remuneration paid to Mr. A.P.Parigi the Managing Director of the Company
for the six months period ended September 30, 2009.
Approvals for payment of the above remuneration to Mr. A. P. Parigi, Managing Director ENIL in the previous year and Mr. Sunder
Hemrajani, Managing Director TIM have been received from the Central Government of India, Ministry of Corporate Affairs vide letter
no. A70602552-CL-VII dated April 19, 2010 and 12/176/2008-CL.VII dated June 23, 2009, respectively.
b. Director’s Sitting Fees Rupees 1,350,000 (Previous Year : Rupees 720,000)
5. One Time Entry Fee (OTEF) and Migration Fee
As per the Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company was given the option to migrate all its existing
license from Phase I regime to Phase II regime on payment of migration fees. Migration fees for each station was equal to the average
of all successful bids received for that city. The Company had exercised the option and had migrated its licenses for all the seven cities
to Phase II regime by payment of migration fees aggregating Rupees 815,234,695. Migration Fees has remaining amortisation period of
four years.
Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. The payment made by
the Company to acquire these frequencies (One Time Entry Fees) was Rupees 1,301,000,000. The remaining amortisation period of OTEF
ranges between four and seven years.
Based on the opinion obtained from an independent firm of Chartered Accountants, both Migration Fees and One Time Entry Fees have
been capitalised as Intangible Asset.
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
107ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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6. The Group has classified the various employee benefits provided to employees as under:-
I) Defined Contribution Plans
a. Provident Fund
b. State Defined Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995.
During the year, the Group has recognised the following amounts in the Profit and Loss Account –
2010-2011
Rupees
2009-2010
Rupees
- Employers’ Contribution to Provident Fund * 16,417,575 17,068,332
- Employers’ Contribution to Employee’s Pension Scheme, 1995 * 5,126,680 5,620,439
- Employers’ Contribution to Employee State Insurance Scheme * 639,610 —
* Included in Contributions to Provident and Other Funds (Refer Schedule 16)
II) Defined Benefit Plans
In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid Defined Benefit
Plan of gratuity based on the following assumptions:-
As at
March 31, 2011
As at
March 31, 2010
Discount Rate (per annum) 8.25% - 8.50% 8.00%
Rate of increase in Compensation levels 6.50% 6.50%
A) Changes in the Present Value of Obligation
As at
March 31, 2011
Rupees
As at
March 31, 2010
Rupees
Present Value of Obligation at the beginning of the year 20,806,953 21,349,067
Interest Cost 1,601,142 1,707,925
Past Service Cost — —
Current Service Cost 5,667,812 7,629,949
Curtailment Cost / (Credit) — —
Settlement Cost / (Credit) — —
Benefits Paid (2,040,085) (3,917,950)
Actuarial (gain) / loss on obligations (461,374) (5,962,038)
Effect of transfer in / transfer out (3,986,695) —
Present Value of Obligations at the year end 21,587,753 20,806,953
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
108 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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B) Reconciliation of Present Value of Defined Benefit Obligation and the Fair value of Assets
As at
March 31, 2011
Rupees
As at
March 31, 2010
Rupees
Present Value of funded obligation as at the year end — —
Fair Value of Plan Assets as at the end of the year — —
Funded Status — —
Present Value of unfunded Obligation as at the year end 21,587,753 20,806,953
Unrecognised Actuarial (gains) / losses — —
Unfunded (Liability) recognised in Balance Sheet (21,587,753) (20,806,953)
C) Amount recognised in the Balance Sheet
As at
March 31, 2011
Rupees
As at
March 31, 2010
Rupees
Present Value of Defined Benefit Obligation at the end of the year 21,587,753 20,806,953
Fair Value of Plan Assets as at the end of the year — —
Liability recognised in the Balance Sheet 21,587,753 20,806,953
D) Expenses recognised in the Profit and Loss Account
2010-2011
Rupees2009-2010
Rupees
Current Service Cost 5,667,812 7,629,949
Past Service Cost — —
Interest Cost 1,601,142 1,707,925
Expected Return on Plan Assets — —
Curtailment Cost / (Credit) — —
Settlement Cost / (Credit) — —
Effects of transfer in 371,472 1,252,626
Effects of transfer out (521,004) (1,252,626)
Net actuarial (gain) / loss recognised in the year (461,374) (5,962,038)
Total Expenses recognised in the Profit and Loss Account 6,658,048 3,375,836
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
109ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
HOME
E) Experience Adjustment
2010-2011
Rupees2009-2010
Rupees
Defined Benefit Obligation 21,587,753 20,806,953
Plan Assets — —
Deficit / Surplus 21,587,753 20,806,953
Experience Adjustment on Plan Liabilities (Gain) / Loss 1,209,719 (5,962,038)
Experience Adjustment on Plan Assets (Gain) / Loss — —
The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and
other relevant factors such as supply and demand in the employment market.
There is no other change in the accounting estimates due to applicability of AS-15 (Revised) as the parameters considered in the
financial year 2010-2011 are same as those considered in the financial year 2009-2010.
III) The liability for leave encashment and compensated absences as at the year end is Rupees 13,162,940 (Previous Year : Rupees
15,644,067).
7. Segment Information
(i) Information about Primary Business Segments2010-2011 2009-2010
Radio Brodcasting
Events Outdoors Unallocated
Inter Segment
Eliminations
Total Radio Brodcasting
Events Outdoors Unallocated Inter Segment
Eliminations
Total
Revenue
External 2,797,436,198 337,805,654 1,501,906,437 — — 4,637,148,289 2,304,586,764 364,854,612 1,562,406,190 — — 4,231,847,566
Inter-Segment 3,020,721 72,358,370 2,109,976 — (77,489,067) — 3,870,690 52,346,634 385,000 — (56,602,324) —
Total Revenue 2,800,456,919 410,164,024 1,504,016,413 — (77,489,067) 4,637,148,289 2,308,457,454 417,201,246 1,562,791,190 — (56,602,324) 4,231,847,566
Result
Segment Result 574,525,631 5,460,639 15,283,518 — — 595,269,788 226,587,057 (6,487,388) (297,262,767) — — (77,163,098)
Unallocated Income, net of unallocated expenditure
— — — 14,098,387 — 14,098,387 — — — 3,533,054 — 3,533,054
Interest Expense (Net) — — — (22,455,812) — (22,455,812) — — — (121,179,038) — (121,179,038)
Operating Profit 574,525,631 5,460,639 15,283,518 (8,357,425) — 586,912,363 226,587,057 (6,487,388) (297,262,767) (117,645,984) — (194,809,082)
Exceptional Item — — — (177,647,596) — (177,647,596) — — — — — —
Profit after Exceptional Item 574,525,631 5,460,639 15,283,518 (186,005,021) — 409,264,767 226,587,057 (6,487,388) (297,262,767) (117,645,984) — (194,809,082)
Taxation — — — (232,017,388) — (232,017,388) — — — 22,989,823 — 22,989,823
Profit after taxation 574,525,631 5,460,639 15,283,518 (418,022,409) — 177,247,379 226,587,057 (6,487,388) (297,262,767) (140,635,807) — (217,798,905)
Other Information
Segment Assets 3,752,435,573 219,898,989 — 943,654,081 (95,049,024) 4,820,939,619 3,995,068,335 234,635,806 1,688,962,065 406,750,000 (626,570,462) 5,698,845,744
Segment Liabilities 846,436,439 175,924,082 — — (24,799,024) 997,561,497 1,080,405,812 175,945,223 878,559,652 — (221,827,390) 1,913,083,297
Capital Expenditure 19,076,484 162,714 238,630,984 — — 257,870,182 13,657,866 22,704 82,266,679 — — 95,947,249
Depreciation / Amortisation 335,960,456 2,993,608 85,474,310 — (1,870,570) 422,557,804 369,774,865 4,238,519 153,456,969 — (1,870,570) 525,599,783
Non-Cash Expenses other than Depreciation
— — — — — — — — — — — —
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
(Rupees)
Financials
110 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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(ii) Information about Secondary Business Segments
(Rupees)
2010-2011 2009-2010
Particulars India Others Total India Others Total
Revenue from external customers 4,625,545,254 11,603,035 4,637,148,289 4,182,593,200 49,254,366 4,231,847,566
Carrying amount of Segment
Assets
4,820,939,619 — 4,820,939,619 5,698,845,744 — 5,698,845,744
Capital Expenditure 257,870,182 — 257,870,182 95,947,249 — 95,947,249
(iii) Notes:
(i) The Group is organised into three main business segments ‘Radio Broadcasting’ comprising of activities relating to airtime sales,
‘Events’, comprising of activities relating to management of events, creating and marketing media properties and ‘Outdoors’,
comprising of activities relating to advertising on Airports, Bus Queue Shelters, Light Emitting Diode (LED), Metro Stations and
Flyovers. The segments have been identified and reported taking into account the nature of activities and services, the differing
risks and returns, the organisation structure and the internal financial reporting systems.
(ii) Segment revenue in each of the above business segments represents revenue directly attributable to the respective segments.
(iii) The Segment revenue in the geographical segments considered for disclosure are as follows:
(a) Revenue within India includes income from customers located within India and earnings in India.
(b) Revenue outside India represents income from customers located outside India.
(iv) Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the above segments and
amounts allocated on a reasonable basis.
8. Related Party Disclosures
a. Parties where control existsBennett, Coleman & Company Limited (BCCL) - Ultimate Holding Company
Times Infotainment Media Limited (TIML) - Holding Company
b. Fellow Subsidiary Companies
Mirchi Movies (India) Limited (MML)
Times Innovative Media Limited (TIM) – from December 30, 2010
TIM Delhi Airport Advertising Private Limited (TIMDAA) – from December 30, 2010
Times Internet Limited (TIL)
Times Global Broadcasting Company Limited (TGBCL)
Times Business Solutions Limited (TBSL)
Zoom Entertainment Network Limited (ZENL)
Optimal Media Solutions Limited (OMSL)
Times VPL Limited (TVL) formerly Vijayanand Printers Limited (VAPL)
Vardhaman Publishers Limited (VPL)
Banhem Estates & IT Parks Limited (BEIPL)
Artha Distribution Services Limited (ADSL)*
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
111ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
HOME
Schedules forming part of the Consolidated Balance Sheet as at March 31, 2011 and Consolidated Profit and Loss Account for the year ended March 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
c. Other Related Party where common control exists
Worldwide Media Private Limited (WWM)
Aegon Religare Life Insurance Company (ARLIC)
d. Key Managerial Personnel Chairman
Mr. Vineet Jain
Managing Directors
Mr. A. P. Parigi – ENIL upto September 30, 2009
Mr. Sunder Hemrajani – TIM #
Executive Director & Chief Executive Officer
Mr. Prashant Panday – Executive Director from July 1, 2010
Non – Executive Directors
Mr. Ravindra Dhariwal
Mr. A. P. Parigi – ENIL from October 01, 2009, TIM - Vice-Chairman#
Mr. N. Kumar – TIM Chairman#
Mr. Deepak M. Satwalekar upto March 30, 2011
Mr. Ravindra Kulkarni
Mr. Sivakumar Sundaram
Mr. Jason M. Brown*#
Mr. Vijay Karnani upto October 12, 2009*#
Mr. Bala Naidu from October 20, 2009*#
Mr. Richard Saldanha from November 23, 2010
Mr. Sidharath Kapur*#
Mr. N. Subramanian*#
Mr. Romy Juneja*#
Mr. Nithyanand Appakudal*#
Mr. Gautam Shahane*#
* There are no transactions during the year.# Upto December 29, 2010 (Refer Note 11)
Financials
112 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
HOME
Part
icul
ars
Hold
ing
Com
pani
es
201
0-20
11
Oth
er R
elat
ed
Party
200
9-20
10
Fello
w S
ubsid
iary
Com
pani
es
Hold
ing
Com
pani
esFe
llow
Sub
sidia
ry C
ompa
nies
Oth
er R
elat
ed
Party
BCCL
TIM
LM
ML
TIM
TIL
TGBC
LTB
SLZE
NLO
MSL
TVL
(VAP
L) V
PL
VEIP
L A
DSL
WW
M
ARLIC
BCCL
TIM
L M
ML
TIL
TGBC
L TB
SL
ZEN
L O
MSL
V
APL
VPL
B
EIPL
ADSL
W
WM
A
RLIC
Tran
sact
ions
with
Re
late
d Pa
rties
:
Sale
s 2
18,2
55,0
23
—
—
298
,918
2
,171,0
70
7,53
4,27
2 1,
876,
699
1,04
4,35
4 —
19
9,68
8 —
—
—
10,
750,
000
297
,400
183,
514,
702
—
—
1,977
,092
9,
968,
307
751
,817
—
—
453
,600
—
—
8,08
9,37
5 16
,000
,000
—
Purc
hase
of F
ixed
Asse
t —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
15
9,95
8 —
—
—
—
—
—
—
—
—
—
—
Sale
of F
ixed
Asse
t 8
4,81
6 —
—
—
—
—
—
—
—
—
—
—
—
—
—
3
05,5
09
—
—
—
165,
304
—
—
—
—
—
—
—
—
—
Rece
iving
of S
ervic
es 5
0,39
3,12
1 —
—
1,
232,
585
22,
666,
007
3,2
98,0
01
—
154,
861
36,
288,
093
—
143,
750
5,6
81,8
99
—
—
— 6
9,38
9,05
2 —
—
3,9
94,9
73
130,
000
81,4
14
9,69
9,60
0 3
4,87
9,15
8 16
,000
131,7
69 9
,662
,383
—
—
—
Reco
very
of E
xpen
ses
10,3
49,6
61
44,
120
713
,223
1,
674,
841
—
337
,403
—
—
—
—
—
—
—
—
9
,066
8
,093
,305
478
,391
7
09,5
14
—
699
,550
—
—
—
—
—
—
—
—
—
Finan
ce re
ceive
d 70
0,00
0,00
0 10
0,00
0,00
0 —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Com
miss
ion
on P
rivat
e Tre
aty S
ales
1,44
2,93
0 —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Inte
rest
paid
2,5
99,5
41
2,2
59,19
2 —
—
—
—
—
—
—
—
—
—
—
—
—
45,
336,
884
—
—
—
—
—
—
—
—
—
—
—
—
—
Bad
Debt
s —
—
—
—
—
—
—
—
—
—
—
—
—
10,2
00,0
00
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Finan
ce G
iven
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 5
66,3
55,4
87
—
—
—
—
—
—
—
—
—
—
—
—
—
Loan
rep
aid
34,
310,
693
35,
000,
000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Sale
of I
nves
tmen
t in
Subs
idia
ry45
0,00
0,00
0 —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Year
end
Bal
ance
s w
ith R
elat
ed P
artie
s :
Loan
Pay
able
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
34,3
10,6
93
—
—
—
—
—
—
—
—
—
—
—
—
—
Trade
Rec
eiva
bles
188,
614,
430
—
—
323
,113
341
,707
4,
465,
384
317
,713
—
—
—
—
—
8,
922,
580
28,
476,
184
— 10
5,48
4,88
0 —
1,0
84,2
46 1
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,208
9,
126,
045
657
,491
—
—
—
—
—
8,9
22,5
80
40
,337
,797
—
Non-
trade
Rec
eiva
bles
(N
et)
—
—
751
,831
1,
722,
598
—
2,0
15,6
69
—
—
—
—
—
—
—
—
—
—
—
455
,904
—
2,0
44,0
04 6
78,8
29
—
—
—
—
—
—
—
—
Depo
sit 10
,000
,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
10
,000
,000
—
—
—
—
—
—
—
—
—
—
—
—
—
Paya
bles
(Net
) 16
0,48
1,178
—
—
—
12
,989
,035
9
7,28
5 —
9,
442,
194
59,
973,
120
—
—
—
—
—
— 1
41,0
83,4
37
—
— 5
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Financials
113ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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f. Details relating to Persons referred to in 8 (d) above:
Name of the Person 2010-2011
Rupees
2009-2010
Rupees
Mr. A. P. Parigi Nil 9,571,174
Mr. Sunder Hemrajani 14,021,186 12,285,468
Mr. Prashant Panday 18,246,662 10,846,335
Directors’ Sitting Fees 1,350,000 720,000
Total 33,617,848 33,422,977
9. Disclosures for Operating Leases
i) Disclosures in respect of cancellable agreements for cars, transmission towers, office and residential premises taken on lease:
a) Lease payments recognised in the Profit and Loss Account Rupees 145,027,265
(Previous Year : Rupees 167,334,047).
b) All the agreements provide for early termination by the company by giving prior notice in writing.
ii) Disclosure in respect of non – cancellable agreements for LED taken on lease:
Lease payments recognised in the Profit and Loss Account (License Fees) Rupees
1,265,863 (Previous Year : Rupees 1,200,000).
10. Earnings Per Share (Basic and Diluted)
ThenumberofsharesusedincomputingBasicEarningspershare(EPS)istheweightedaveragenumberofsharesoutstandingduringtheyear.
2010-2011 2009-2010
Profit / (Loss) after tax and before Minority Interest (Rupees) 177,247,379 (217,798,905)
Minority Interest (Rupees) 5,502,733 (64,584,467)
Profit/ (Loss) attributable to Equity Shareholders of the Company (Rupees) 171,744,646 (153,214,438)
Weighted Average Number of Shares (Nos.) 47,670,415 47,670,415
Earnings per share – Basic and Diluted (Rupees) 3.60 (3.21)
Face Value per share (Rupees) 10 10
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
114 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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11. On December 29, 2010 the Company sold its entire stake in Times Innovative Media Limited (TIM) to Bennett, Coleman and Company
Limited (BCCL). The sale resulted in a loss of Rupees 177,647,596 in the consolidated financial statements and has been reflected as
exceptional item therein. Pursuant to the sale of the subsidiary following assets, liabilities and reserves were transferred:
Particulars Rupees Total Assets 2,491,683,334
Total Liabilities (1,743,334,628)
Net Assets (A) 748,348,706
Minority interest pertaining to TIM (B) 123,852,871
Total assets of TIM pertaining to ENIL transferred (A)-(B) 624,495,835
Transfer of Reserves and Surplus
Securities Premium (1,603,079,400)
Capital Reserve (2,086,092)
Profit and Loss Account Debit Balance 1,605,165,492
12. The Company has a Media Collaboration Arrangement with Bennett, Coleman & Company Limited (BCCL), the ultimate holding company.
This arrangement seeks to expand the advertisement market and inter-alia helps the Company to gain access to certain clients who may
not otherwise advertise in FM radio.
The revenues generated from this arrangement were Rupees 229,935,903 (Previous Year : Rupees 219,730,396) in the current year.
Subsequently, in view of the uncertainties as to timing and the quantum of the ultimate collection, the Company has based on the
principles of prudence, created a provision for doubtful debts to the extent of Rupees 157,317,270 (Previous Year : Rupees 200,154,424)
in respect of the sales made pursuant to this arrangement. The cumulative provision for doubtful debts relating to this arrangement
amounting to Rupees 117,906,930 was transferred pursuant to the sale of the subsidiary.
13. The Honourable Copyright Board (“CRB”) vide its final order dated August 25, 2010 ruled that radio broadcasters will be liable to set
apart 2% of the net advertising earnings of each of their FM radio stations for royalty payment to all the music providers in proportion to
usage. Following a writ petition by the Super Cassettes Industries Limited (“SCIL”), the Honourable Delhi High Court granted stay on the
implementation of the aforesaid CRB order against SCIL. Accordingly, w.e.f. August 25, 2010 the Company has accounted the music royalty
for sound recordings provided by all music providers other than the SCIL on a revenue share basis. In the interim, the music royalty for
sound recording provided by SCIL is accounted based on the needle hour rate indicated in the CRB order dated November 19, 2002.
14. Recoveries deducted from expenses are on account of sharing of common expenses with companies under the same management.
15. Previous year’s figures are not comparable due to sale of the subsidiary.
16. Previous year’s figures have been regrouped where necessary.
Signatures to Schedules “1” to “19” forming part of the financial statements.
For Price Waterhouse & Co. For and on behalf of the Board of DirectorsFirm Registration No. 007567S Vineet Jain Ravindra Dhariwal Ravindra KulkarniChartered Accountants Chairman Director Director
Uday Shah A. P. Parigi Richard Saldanha Prashant PandayPartner Director Director Executive Director & CEOMembership No. F-46061 N. Subramanian Mehul Shah Group CFO VP - Compliance &Mumbai Company SecretaryDated : May 23, 2011
SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2011 AND CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011
SCHEDULE 19
NOTES TO THE FINANCIAL STATEMENTS (Contd.)
Financials
115ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)
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Entertainment Network (India) LimitedRegistered Office : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013.
ATTENDANCE SLIP
Annual General Meeting on Tuesday, August 30, 2011 at 3.00 p.m. at Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to
Sachivalaya Gymkhana, Near Mantralaya, Nariman Point, Mumbai – 400 021.
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.
DP Id* Registered Folio No.
Client Id*
NAME AND ADDRESS OF THE MEMBER:
No. of Share(s) held:
I hereby record my presence at the Twelfth Annual General Meeting of the Company at Y. B. Chavan Auditorium, Gen. Jagannath Bhosale
Marg, Next to Sachivalaya Gymkhana, Near Mantralaya, Nariman Point, Mumbai – 400 021, on Tuesday, August 30, 2011 at 3.00 p.m.
Signature of the Member/Proxy ______________________________
* Applicable for Members holding shares in electronic form.
TEAR HERE
Entertainment Network (India) LimitedRegistered Office : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013.
PROXY FORM
DP Id* Registered Folio No.
Client Id*
I/We ...................................................................................................................... of ....................................................................................................
being a Member(s) ENTERTAINMENT NETWORK (INDIA) LIMITED hereby appoint .....................................................................................................
....................................................... of .............................................................................................................................................. or failing him/her
....................................................... of ............................................................................................................... ......................................... as my/our
proxy to vote for me/us and on my/our behalf at the Twelfth Annual General Meeting of the Company to be held on Tuesday, August 30, 2011
at 3.00 p.m. and at any adjournment thereof.
Signed ............................................. 2011. Signature _______________________________________
Place: ..............................................
* Applicable for Members holding shares in electronic form.
Note: The Proxy in order to be effective, should be duly completed, stamped, signed and must be deposited at the Registered Office of the
Company not less than 48 hours before the time for holding the aforesaid Meeting. The Proxy need not be a Member of the Company.
Affix
Re. 1/-
Revenue
Stamp
29
Caution regarding forward-looking statementsThis document contains statements about expected future events, financial and operating results of Entertainment Network
India Limited, which are forwardlooking. By their nature, forward-looking statements require the Company to make
assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions
and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on
forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ
materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer
and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the management’s discussion
and analysis of the Entertainment India Limited annual report, 2010-11.
http://www.ENIL/Annual Report 2010-11
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Download this Annual Report - http://www.enil.co.in/financials-annual-reports.php