tv18 broadcast limited

Transcription

C M Y K
Letter of Offer
August 31, 2012
For our Equity Shareholders only
TV18 BROADCAST LIMITED
We were incorporated in India on June 6, 2005 as "Global Broadcast News Private Limited" as a private limited company under the Companies Act, 1956, as amended
("Companies Act"). Subsequently we were converted into a public limited company under Section 44 of the Companies Act with effect from December 12, 2005.
Subsequently, we changed our name to "ibn18 Broadcast Limited" on April 2, 2008 pursuant to a fresh certificate of incorporation consequent to change of name. We
then changed our name to the present name "TV18 Broadcast Limited" on June 17, 2011 pursuant to a fresh certificate of incorporation consequent to change of name
pursuant to the Scheme of Arrangement (as defined subsequently in this Letter of Offer) approved by the High Court of Delhi.
Registered Office: 503, 504 & 507, 5th Floor, Mercantile House, 15 Kasturba Gandhi Marg, New Delhi - 110 001
Corporate Office: Express Trade Tower, Plot No. 15-16, Sector 16A, Noida - 201 301, Uttar Pradesh; Tel: +91 120 434 1818; Fax: +91 120 432 4110
Contact Person: Hitesh Kumar Jain, Company Secretary & Compliance Officer
E-mail: [email protected]; Website: www.network18online.com
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF TV18 BROADCAST LIMITED
(THE "COMPANY" OR THE "ISSUER") ONLY
ISSUE OF 1,349,577,882 EQUITY SHARES WITH A FACE VALUE OF ` 2 EACH ("EQUITY SHARES") FOR CASH AT A
PREMIUM OF ` 18 PER EQUITY SHARE FOR AN AMOUNT OF ` 26,991.56 MILLION ON A RIGHTS BASIS TO THE
EXISTING EQUITY SHAREHOLDERS OF THE COMPANY IN THE RATIO OF 41 EQUITY SHARE(S) FOR EVERY 11
FULLY PAID-UP EQUITY SHARE(S) HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT
IS ON SEPTEMBER 17, 2012 ("THE ISSUE"). THE ISSUE PRICE IS 10 TIMES THE FACE VALUE OF THE EQUITY
SHARES. FOR FURTHER DETAILS, PLEASE REFER TO THE CHAPTER "TERMS OF THE ISSUE" ON PAGE 314.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in the Issue unless
they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an
investment decision in the Issue. For taking an investment decision, Investors must rely on their own examination of the Company and
the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by the Securities
and Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised
to refer to the section "Risk Factors" on page XIV before making an investment in this Issue.
THE COMPANY’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information
with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer
is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein
are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information
or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares are listed on the BSE Limited ("BSE") and the National Stock Exchange of India Limited ("NSE") (BSE
and NSE together, the "Stock Exchanges"). We have received "in-principle" approvals from BSE and NSE for listing the Equity
Shares to be Allotted in the Issue vide their letters dated July 13, 2012 and July 26, 2012, respectively. For the purposes of the
Issue, the Designated Stock Exchange is the NSE.
LEAD MANAGERS TO THE ISSUE
REGISTRAR TO THE ISSUE
ICICI Securities Limited
RBS Equities (India) Limited
Link Intime India Private Limited
ICICI Centre, H. T. Parekh Marg
Churchgate, Mumbai 400 020, India
Tel: +91 22 2288 2460
Fax: +91 22 2282 6580
E-mail: [email protected]
Investor Grievance E-mail:
[email protected]
Website: www.icicisecurities.com
Contact Person: Payal Kulkarni
SEBI Registration No.: INM000011179
83/84, Sakhar Bhavan, 230, Nariman Point
Mumbai 400 021, India
Tel: +91 22 6632 5535
Fax: +91 22 6632 5541
[email protected]
Website: www.rbs.in
Contact Person: Bharti Jani
C-13, Pannalal Silk Mills Compound, LBS Marg
Bhandup (West), Mumbai - 400 078, India
Tel: +91 22 2596 7878; Fax: +91 22 2596 0329
Toll Free No: 1-800-220-878
Email: [email protected]
Investor Greivance E-mail:
[email protected]
Website: www.linkintime.co.in
Contact Person: Pravin Kasare
SEBI Registration No: INR000004058
ISSUE PROGRAMME
ISSUE OPENS ON
LAST DATE FOR REQUEST FOR SPLIT
APPLICATION FORMS
ISSUE CLOSES ON
SEPTEMBER 25, 2012
OCTOBER 3, 2012
OCTOBER 15, 2012
C M Y K
TV18 Broadcast Limited
TABLE OF CONTENTS
SECTION I – GENERAL..................................................................................................................................... I
DEFINITIONS AND ABBREVIATIONS ........................................................................................................... I
NOTICE TO OVERSEAS SHAREHOLDERS................................................................................................VIII
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND
CURRENCY OF PRESENTATION ................................................................................................................. XI
FORWARD LOOKING STATEMENTS ........................................................................................................XIII
SECTION II - RISK FACTORS ...................................................................................................................... XIV
SECTION III – INTRODUCTION ..................................................................................................................... 1
SUMMARY OF THE ISSUE............................................................................................................................. 1
SUMMARY FINANCIAL INFORMATION ...................................................................................................... 2
GENERAL INFORMATION .......................................................................................................................... 13
CAPITAL STRUCTURE ................................................................................................................................ 18
OBJECTS OF THE ISSUE ............................................................................................................................. 28
SECTION IV - STATEMENT OF TAX BENEFITS ....................................................................................... 37
SECTION V – ABOUT US ................................................................................................................................. 46
INDUSTRY OVERVIEW ................................................................................................................................ 46
BUSINESS ..................................................................................................................................................... 52
MATERIAL AGREEMENTS PERTAINING TO ETV ACQUISITION ............................................................ 62
OUR MANAGEMENT ................................................................................................................................... 68
SECTION VI – FINANCIAL INFORMATION .............................................................................................. 74
FINANCIAL STATEMENTS .......................................................................................................................... 74
FINANCIAL STATEMENTS FOR ERSTWHILE TELEVISION EIGHTEEN ............................................... 167
SUMMARY FINANCIAL INFORMATION OF EQUATOR ......................................................................... 233
SUMMARY FINANCIAL INFORMATION OF PANORAMA, PRISM AND EENADU ................................ 241
ACCOUNTING RATIOS AND CAPITALISATION STATEMENT ............................................................... 265
STOCK MARKET DATA FOR EQUITY SHARES ....................................................................................... 267
MATERIAL DEVELOPMENTS ................................................................................................................... 269
FINANCIAL INDEBTEDNESS .................................................................................................................... 279
SECTION VII – LEGAL AND OTHER INFORMATION ........................................................................... 286
OUTSTANDING LITIGATIONS .................................................................................................................. 286
GOVERNMENT APPROVALS .................................................................................................................... 297
OTHER REGULATORY AND STATUTORY DISCLOSURES ..................................................................... 299
SECTION VIII – OFFERING INFORMATION ........................................................................................... 314
TERMS OF THE ISSUE ............................................................................................................................... 314
SECTION IX – STATUTORY AND OTHER INFORMATION .................................................................. 343
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .......................................................... 343
DECLARATION .......................................................................................................................................... 345
SECTION I – GENERAL
DEFINITIONS AND ABBREVIATIONS
In this Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded below
shall have the same meaning as stated in this section. References to statutes, rules, regulations, guidelines and
policies will be deemed to include all amendments and modifications notified thereto.
In this Letter of Offer, unless otherwise indicated or the context otherwise requires, all references to “TV18
Broadcast Limited”, “TV18”, the/ our “Company”, “Issuer”, “we”, “our” and “us” are to TV18 Broadcast
Limited and references to “you” are to the prospective investors in the Equity Shares.
Conventional and General Terms/ Abbreviations
Term
Act/ Companies Act
AGM
AS
BSE
CAGR
CCI
CDSL
CFO
Cinematograph Rules
CNBC-AP
CNN
Depositories Act
Depository
Depository Participant/ DP
DIN
DP ID
EBITDA
EGM
ESOP
EPS
FDI
FEMA
FII
Financial Year/ Fiscal/ FY
FIPB
FVCI
GAAP
GoI
HUF
ICAI
IT Act
Indian GAAP
JV
LIBOR
LIC
MICR
MIB
Description
The Companies Act, 1956
Annual General Meeting
Accounting Standards issued by the Institute of Chartered Accountants of India
BSE Limited
Compounded Annual Growth Rate
The Competition Commission of India
Central Depository Services (India) Limited
Chief Financial Officer
Cinematograph Film Rules, 1948
Business News (Asia) Private
Cable News Network LP, LLLP
The Depositories Act, 1996
A depository registered with SEBI under the SEBI (Depositories and Participant)
Regulations, 1996
A depository participant as defined under the Depositories Act
Director Identification Number
Depository Participant Identity
Earnings before Interest, Tax, Depreciation and Amortisation
Extra-Ordinary General Meeting
Employee Stock Option Plan
Earnings per Share
Foreign Direct Investment
The Foreign Exchange Management Act, 1999, including the regulations framed
thereunder
Foreign Institutional Investor as defined under the Securities and Exchange
Board of India (Foreign Institutional Investors) Regulations, 1995, registered with
SEBI under applicable laws in India
Period of 12 months ended March 31 of that particular year
Foreign Investment Promotion Board, Ministry of Finance, GoI
Foreign Venture Capital Investors as defined under the Securities and Exchange
Board of India (Foreign Venture Capital Investors) Regulations, 2000 registered
with SEBI under applicable laws in India
Generally Accepted Accounting Principles
Government of India
Hindu Undivided Family
Institute of Chartered Accountants of India
The Income Tax Act, 1961
Generally accepted accounting principles followed in India
Joint Venture
London Interbank Offered Rate
Life Insurance Corporation of India
Magnetic Ink Character Recognition
Ministry of Information and Broadcasting, Government of India
i
Term
MoU
Mutual Fund
NCT
NECS
NEFT
NR
NRI
NRE Account
NRO Account
NSDL
NSE
OCB
OFCD(s)
p.a
PAN
PAC
PBT
PLR
RBI
Registrar of Companies/
RoC
Regulation S
Rupees/ INR/ `/ Rs.
RTGS
SCRA
SCRR
SEBI
SEBI ESOP Guidelines
SEBI ICDR Regulations
Securities Act
Takeover Regulations
Trademark Act
US/ USA
WCDL
Description
Memorandum of Understanding
A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations,
1996
National Capital Territory
National Electronic Clearing Services
National Electronic Funds Transfer
Non-Resident
Non-Resident Indian
Non-Resident External Account
Non-Resident Ordinary Account
National Securities Depository Limited
The National Stock Exchange of India Limited
Overseas Corporate Body
Optionally Fully Convertible Debenture(s)
Per annum
Permanent Account Number under the IT Act
Persons Acting in Concert
Profit Before Tax
Prime Lending Rate
Reserve Bank of India
Registrar of Companies, National Capital Territory of Delhi and Haryana, New
Delhi
Regulation S under the Securities Act
Indian Rupees
Real Time Gross Settlement
Securities Contracts (Regulation) Act, 1956
Securities Contracts (Regulation) Rules, 1957
Securities and Exchange Board of India
Securities and Exchange Board of India (Employee Stock Option Scheme And
Employee Stock Purchase Scheme) Guidelines, 1999
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009
U.S. Securities Act of 1933
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
Trademark Act, 1999
United States of America
Working Capital Demand Loan
Issue Related Terms
Term
Abridged Letter of Offer
Allotment
Allottees
Application Supported by
Blocked Amount/ ASBA
ASBA Account
ASBA Investor
Description
The abridged letter of offer to be sent to the Equity Shareholders with respect to
the Issue in accordance with the SEBI ICDR Regulations
Unless the context otherwise requires, the allotment of Equity Shares pursuant to
the Issue
Persons to whom our Equity Shares will be issued pursuant to the Issue
The application (whether physical or electronic) used by an ASBA Investor to
make an application authorizing the SCSB to block the amount payable on
application in the ASBA Account
Account maintained with a SCSB and specified in the CAF or plain paper
application, as the case may be, for blocking the amount mentioned in the CAF, or
the plain paper application, as the case may be
Equity Shareholders proposing to subscribe to the Issue through ASBA process
and:
a. Who are holding our Equity Shares in dematerialized form as on the Record
Date and have applied for their Rights Entitlements and/ or additional Equity
ii
Term
Bankers to the Issue
Composite Application
Form/ CAF
Consolidated Certificate
Controlling Branches of
the SCSBs
Designated Stock
Exchange
Designated Branches
Draft Letter of Offer
Equity Shares/ Shares
Equity Shareholders/
Shareholders
Investor(s)
Issue/ Rights Issue/ Rights
Issue of TV18
Issue Closing Date
Issue Opening Date
Issue Price
Issue Proceeds
Issue Size
Lead Managers
Letter of Offer
Listing Agreement(s)
Monitoring Agency
Net Proceeds
Qualified Foreign
Investors/ QFI
Description
Shares in dematerialized form;
b. Who have not renounced their Rights Entitlements in full or in part;
c. Who are not Renouncees; and
d. Who are applying through blocking of funds in a bank account maintained
with SCSBs.
All QIBs, Non-Institutional Investors and other Investors whose application value
exceeds ` 200,000 complying with the above conditions must participate in this
Issue through the ASBA process only
Kotak Mahindra Bank Limited, Punjab National Bank and ICICI Bank Limited
The form used by an Investor to make an application for the Allotment of Equity
Shares in the Issue
In case of holding of Equity Shares in physical form, the certificate that we would
issue for the Equity Shares Allotted to one folio
Such branches of the SCSBs which coordinate with the Lead Managers, the
Registrar to the Issue and the Stock Exchanges, a list of which is available on
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1345612849756.html
The National Stock Exchange of India Limited
Such branches of the SCSBs which shall collect application forms used by ASBA
Investors
and
a
list
of
which
is
available
on
www.sebi.gov.in/cms/sebi_data/attachdocs/1329905803160.html
The draft letter of offer dated March 1, 2012 filed with SEBI for its observations
which did not contain complete particulars of the Issue
Our equity shares of face value of ` 2 each
Holders of Equity Shares of our Company
Our Equity Shareholders(s) on the Record Date, applying in this Issue, and the
Renouncees
Issue of 1,349,577,882 Equity Shares with a face value of ` 2 each for cash at a
premium of ` 18 per Equity Share for an amount of ` 26,991.56 million on a rights
basis to the existing Equity Shareholders in the ratio of 41 Equity Shares for every
11 fully paid-up Equity Shares held by them on the Record Date (i.e. September 17,
2012). The Issue price is 10 times the face value of the Equity Shares
October 15, 2012
September 25, 2012
` 20 as determined by our Board in compliance with regulation 10 (4) (b) (ii) of
the Takeover Regulations
The proceeds of the Issue that are available to us
The issue of 1,349,577,882 Equity Shares for an amount of ` 26,991.56 million
ICICI Securities Limited and RBS Equities (India) Limited
Letter of offer filed with the Stock Exchanges after incorporating the observations
received from the SEBI on the Draft Letter of Offer
The listing agreements entered into between us and the Stock Exchanges
IFCI Limited
The Issue Proceeds less the Issue related expenses. For further details, please refer
to the chapter “Objects of the Issue” on page 28
Qualified Foreign Investors means a person
(i) Resident in a country that is a member of Financial Action Task Force
(“FATF”) or a member of a group which is a member of FATF; and
(ii) Resident in a country that is a signatory to International Organization of
Securities Commission’ Multilateral Memorandum of Understanding or a
signatory of a bilateral MoU with SEBI:
Provided that the person is not resident in a country listed in the public statements
iii
Term
Description
issued by FATF from time to time on-(i) jurisdictions having a strategic AntiMoney Laundering/ Combating the Financing of Terrorism deficiencies to which
counter measures apply,
(ii) jurisdictions that have not made sufficient progress in addressing the
deficiencies or have not committed to an action plan developed with the FATF to
address the deficiencies:
Provided further such person is not resident in India:
QIBs or Qualified
Institutional Buyers
Record Date
Registrar to the Issue/
Registrar and Transfer
Agent/ RTA
Renouncee(s)
Retail Individual Investors
Rights Entitlement
SAF(s)
SCSB(s)
Share Certificate
Stock Exchange(s)
Provided further that such person is not registered with SEBI as FII or sub-account
or FVCI.
Public financial institutions as specified in Section 4A of the Companies Act,
scheduled commercial banks, mutual fund registered with SEBI, FIIs and subaccount registered with SEBI, other than a sub-account which is a foreign
corporate or foreign individual, multilateral and bilateral development financial
institution, venture capital fund registered with SEBI, FVCI, state industrial
development corporation, insurance company registered with IRDA, provident
fund with minimum corpus of ` 250 million, pension fund with minimum corpus
of ` 250 million, National Investment Fund set up by the Government of India and
insurance funds set up and managed by the army, navy or air force of the Union of
India and insurance funds set up and managed by the Department of Posts, India
September 17, 2012
Any person(s) who has/ have acquired Rights Entitlements from Equity
Shareholders
Individual Investors who have applied for Equity Shares for an amount not more
than ` 200,000 (including HUFs applying through their Karta)
The number of Equity Shares that an Equity Shareholder is entitled to in
proportion to the number of Equity Shares held by such Equity Shareholder on the
Record Date
Split Application Form(s)
Self Certified Syndicate Bank(s), registered with SEBI, which acts as a banker to
the Issue and which offers the facility of ASBA. A list of all SCSBs is available on
the website of SEBI at
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1345612849756.html
The certificate in respect of the Equity Shares allotted to a folio
BSE and NSE, where our Equity Shares are presently listed
Company Related Terms
Term
AETN18
Altitude
Anu
Anu Acquisition
Anu Option Securities
Description
AETN18 Media Private Limited, our subsidiary, in which we hold 51% equity
interest and the rest 49% equity interest is held by A&E Television Networks LLC
Altitude Mercantile Private Limited, a company incorporated under the laws of
India, having its registered office at 3rd floor, Maker Chambers IV, 222, Nariman
Point, Mumbai – 400 021, Maharashtra, India
Anu Trading Private Limited, a company incorporated under the laws of India,
having its registered office at 582, MG Road, Indore – 452 003, Madhya Pradesh,
India
Acquisition by us or any of our affiliates, of the Anu Option Securities in terms of
the Option Agreement in turn representing 3,107 equity shares of ` 10 each and
1,251,660 OFCDs of ` 100 each representing approximately 50% Equity
Securities of Prism;
10,000 equity shares of ` 10 each and 31,750,000 CCDs of ` 200 each of Anu
iv
Term
Arimas
Articles/ Articles of
Association
Auditors
Board of Directors/ Board
CCD(s)
Content License
Agreement
Corporate Office
Devaki
Eenadu
Eenadu SHA
Eenadu Acquisition
Eenadu Option Securities
Equator
Equator Securities
Equity Securities
ESOP 2007
ETV Acquisition
ETV Channels
ETV Companies
ETV News Channels
ETV Non-Telugu
Channels
ETV Scheme of
Arrangement
Description
Arimas Trading Private Limited, a company incorporated under the laws of India,
having its registered office at 4th Floor, Court House, Lokmanya Tilak Marg,
Dhobi Talao, Mumbai 400002, Maharashtra, India.
Our articles of association, as amended
Our statutory auditors, Deloitte Haskins & Sells
Our board of directors or any duly constituted committees thereof
Zero coupon compulsorily convertible debenture(s)
Content License and Services Agreement dated February 27, 2012 between
Network18, TV18 and Infotel
Our corporate office at Express Trade Tower, Plot No. 15-16, Sector 16A, Noida –
201 301, Uttar Pradesh, India
Devaki Commercials Private Limited, a company incorporated under the laws of
India, having its registered office at 84-A, Mittal Court, 8th Floor, 224, Nariman
Eenadu Television Private Limited, a company incorporated under the laws of
India, having its registered office at 1-10-76, Fairfields, Begumpet, Hyderabad –
500 016, Andhra Pradesh, India which owns ETV Telugu Channels
Shareholders’ Agreement dated February 25, 2012 between Eenadu, Equator, Anu
and Ushodaya Promoters
Acquisition by us or any of our affiliates of the Eenadu Option Securities.
4,350 equity shares of ` 10 each and 608,984 OFCDs of ` 100 each of Eenadu
Equator Trading Enterprises Private Limited, a company incorporated under the
laws of India and having its registered office at 3rd floor, Maker Chambers IV, 222,
Nariman Point, Mumbai – 400 021, Maharashtra, India
2,000,000,000 equity shares of ` 1 each of Equator and 125,700,000 CCDs of `
100 each of Equator held by Arimas which together represents 100% of the Equity
Securities of Equator.
Equity Securities means equity shares and other securities convertible into, or
exercisable or exchangeable for, equity shares on a fully diluted basis
Employees Stock Option Plan 2007 as approved by our shareholders on September
7, 2007 along with amendments thereto
In accordance with the SPA, the proposed acquisition by TV18 of 100% of Equity
Securities of Equator. Equator currently holds the following investments:
a. 2,750 equity shares of ` 10 each and 2,494,688 OFCDs of ` 100 each
representing approximately 100% Equity Securities of Panorama which owns
ETV News Channels;
b. 3,929 equity shares of ` 10 each and 1,251,660 OFCDs of ` 100 each
representing approximately 50% Equity Securities of Prism which owns ETV
Non-Telugu Channels; and
c. 5,500 equity shares of ` 10 each and 608,869 OFCDs of ` 100 each
representing 24.50% Equity Securities of Eenadu which owns ETV Telugu
Channels.
ETV News Channels, ETV Non-Telugu Channels and ETV Telugu Channels
Panorama, Prism and Eenadu, collectively
Television channels owned by Panorama namely ETV Uttar Pradesh, ETV
Madhya Pradesh, ETV Rajasthan, ETV Bihar and ETV Urdu
Television channels owned by Prism namely ETV Kannada, ETV Bangla, ETV
Marathi, ETV Gujarati and ETV Oriya
Scheme of arrangement under sections 391 to 394 and other applicable provisions
of the Companies Act between UEPL, Panorama, Prism and Eenadu, sanctioned
by the High Court of Andhra Pradesh at Hyderabad on December 15, 2010,
whereby the television broadcast businesses (ETV Channels) of UEPL were
demerged into Panorama, Prism and Eenadu with April 1, 2010 being the
appointed date. Certified copy of the order of the High Court of Andhra Pradesh
order was also filed with the Registrar of Companies, Andhra Pradesh on February
28, 2011.
v
Term
ETV Telugu Channels
Group Companies
IMT
IndiaCast
Infomedia Press
Infotel
Joint Ventures/ JVs
Kavindra
Memorandum/ MoA/
Memorandum of
Association
N18/ Network18
Network18 Group
Non Compete Agreement
Option Agreement
Panorama
Panorama SHA
Prism
Prism SHA
Promoter and Promoter
Group
Public Deposits
Registered Office
RIL
RIIHL
Rights Issue of Network18
Scheme of Arrangement
Description
Television channels owned by Eenadu namely ETV Telugu and ETV2
Includes those companies, firms and ventures that are promoted by our Promoter,
irrespective of whether these entities are covered under Section 370(1) (B) of the
Companies Act.
Independent Media Trust, a trust represented by its Trustee, Digital Content Private
Limited, having its registered office at Empire Complex, 1 st Floor, 414, Senapati
Bapat Marg, Lower Parel, Mumbai 400 013, Maharashtra, India
IndiaCast Media Distribution Private Limited
Infomedia Press Limited (earlier known as ‘Infomedia 18 Limited’ prior to the
Scheme of Demerger)
Infotel Broadband Services Limited, a subsidiary of RIL, incorporated under the
laws of India, having its registered office at 3rd Floor, Maker Chamber IV,
Nariman Point, Mumbai – 400 021, Maharashtra, India
Our joint ventures, namely Viacom18 Media Private Limited and IBN Lokmat
News Private Limited
Kavindra Commercials Private Limited, a company incorporated under the laws of
India, having its registered office at 84-A, Mittal Court, 8th Floor, 224, Nariman
Our memorandum of association, as amended
Network18 Media & Investments Limited
Network18, TV18 and each of their respective subsidiaries and affiliates
Non Compete Agreement dated February 25, 2012 between UEPL, Ushodaya
Promoters and ETV Companies
Option Agreement dated February 27, 2012, as amended vide addendum 1 dated
August 16, 2012 between Devaki, Anu, Arimas and us
Panorama Television Private Limited , a company incorporated under the laws of
India, having its registered office at 1-10-76, Fairfield, Begumpet, Hyderabad,
Andhra Pradesh, India which owns ETV News Channels
Shareholders’ Agreement dated February 25, 2012 between Panorama, Equator,
Anu and Ushodaya Promoters
Prism TV Private Limited, a company incorporated under the laws of India, having
its registered office at 1-10-76, Fairfield, Begumpet, Hyderabad, Andhra Pradesh,
India which owns ETV Non-Telugu Channels
Shareholders’ Agreement dated February 25, 2012 between Prism, Equator, Anu
and Ushodaya Promoters
Promoter and Promoter Group shall mean the entities forming part of our promoter
group in accordance with the SEBI ICDR Regulations and which are disclosed by
us to the Stock Exchanges from time to time
Public Deposits invited under section 58A of the Companies Act
Our registered office at 503, 504 & 507, 5 th floor, Mercantile House, 15 Kasturba
Gandhi Marg, New Delhi – 110 001, India
Reliance Industries Limited, a company incorporated under the laws of India,
having its registered office at Maker Chambers - IV, Nariman Point, Mumbai 400
021, Maharashtra, India
Reliance Industrial Investments and Holdings Limited, a company incorporated
under the laws of India, having its registered office at Maker Chambers IV, Nariman Point, Mumbai 400 021, Maharashtra, India
Rights issue of Network18 as approved by the board of directors of Network18 on
January 3, 2012
Scheme of arrangement between Television Eighteen India Limited, Web18
Software Services Limited, IBN18 Media and Software Limited, iNews.com
Limited, Television Eighteen Commoditiescontrol.com Limited, RVT Investments
Private Limited, Network18 India Holdings Private Limited, Care Websites
Private Limited, Network18 Media & Investments Limited and TV18 Broadcast
Limited, which was approved by the High Court of Delhi on April 26, 2011 and
vi
Term
SPA/ Securities Purchase
Agreement
Subscribing Companies
Subsidiaries
Sun18
Television Eighteen
Trademark License
Agreement
Turner
Ushodaya/ UEPL
Ushodaya Promoters
Viacom18
Viacom Agreement
ZOCD(s)
ZOCD Investment
Agreement
Description
came into effect on June 10, 2011 with April 1, 2010 being the appointed date
Securities Purchase Agreement dated February 27, 2012 as amended by the
addendum 1 dated August 16, 2012 between Network18, TV18, Equator and
Arimas
RB Mediasoft Private Limited;
RRB Mediasoft Private Limited;
RB Media Holdings Private Limited;
Adventure Marketing Private Limited;
Watermark Infratech Private Limited and
Colorful Media Private Limited.
Our subsidiaries, namely, RVT Media Private Limited (“RVT Media”), ibn18
(Mauritius) Limited and AETN18
Sun 18 Media Services South Private Limited
Erstwhile Television Eighteen India Limited
Trademark Licensing Agreement dated February 25, 2012 between UEPL,
Ushodaya Promoters, Eenadu, Prism and Panorama
Turner Broadcasting System Asia Pacific, Inc.
Ushodaya Enterprises Private Limited, a company incorporated under the laws of
India and having its registered office at Eenadu Complex, Somajiguda, Hyderabad
– 500 082, Andhra Pradesh, India
Promoters of UEPL
Viacom18 Media Private Limited, our 50-50 joint venture with Viacom Inc.
Shareholders’ agreement dated May 22, 2007, as amended, entered into between
Viacom Inc. and Network18 for its investment into Viacom18
Zero Coupon Optionally Convertible Debenture(s)
Investment Agreement dated February 27, 2012 between Subscribing Companies,
Mr. Raghav Bahl and Ms. Ritu Kapur on one part and IMT on the other part.
Technical/ Industry Related Terms
Term
DTH
DVD
Downlinking Guidelines
FICCI
HITS
IPTV
MMDS
MSO
TRAI
TV
Uplinking Guidelines
Description
Direct to Home Broadcasting
Digital Versatile Disc
Policy Guidelines for downlinking of TV channels dated December 5, 2011 issued
by the Ministry of Information and Broadcasting
Federation of Indian Chambers of Commerce and Industry
Headend in the sky
Internet Protocol Television
Multichannel Multipoint Distribution Service
Multi System Operator
Telecom Regulatory Authority of India
Television
Policy Guidelines for uplinking of TV Channels from India dated December 5,
2011 issued MIB in supersession of all the earlier guidelines including the
guidelines prescribed by MIB, December 2, 2005
The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms
under the Companies Act, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the
rules and regulations made thereunder.
Notwithstanding the foregoing, terms defined in the chapters “Statement of Tax Benefits”, “Financial
Statements” and “Outstanding Litigations” on pages 37, 74 and 286, respectively, shall have the meanings given
to such terms in these respective chapters.
vii
NOTICE TO OVERSEAS SHAREHOLDERS
The distribution of this Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain
jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into
whose possession this Letter of Offer or CAF may come are required to inform themselves about and observe
such restrictions. We are making this Issue of Equity Shares on a rights basis to the Equity Shareholders and
will dispatch the Letter of Offer/ Abridged Letter of Offer and CAFs to such shareholders who have provided an
Indian address.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for
that purpose, except that the Draft Letter of Offer had been filed with SEBI for observations. Accordingly, the
rights or Equity Shares may not be offered or sold, directly or indirectly, and this Letter of Offer may not be
distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction.
Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to
make such an offer and, under those circumstances, this Letter of Offer must be treated as sent for information
only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer
should not, in connection with the issue of the rights or Equity Shares, distribute or send the same in or into the
United States or any other jurisdiction where to do so would or might contravene local securities laws or
regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or nominee,
they must not seek to subscribe to the rights or Equity Shares referred to in this Letter of Offer.
Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any
implication that there has been no change in our affairs from the date hereof or that the information contained
herein is correct as at any time subsequent to this date.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented Prospectus Directive
2003/71/EC (and amendments thereto, including Prospectus Directive 2010/73/EU) (each, a “Relevant Member
State”), with effect from and including the date on which the Prospectus Directive is implemented in that
Relevant Member State (the “Relevant Implementation Date”), an offer to the public of any rights or Equity
Shares in this Offering may not be made in that Relevant Member State except that, with effect from and
including the Relevant Implementation Date, an offer to the public in that Relevant Member State of any Rights
Entitlements or Equity Shares may be made at any time under the following exemptions under the Prospectus
Directive:
a.
b.
c.
at any time to any legal entity which is a “qualified investor” as defined in the Prospectus Directive;
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus
Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the
relevant Lead Managers nominated by the Issuer for any such Offer; or
in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Rights Entitlements or Equity Shares shall result in a requirement for the
publication by us or any Lead Manager of a prospectus pursuant to Article 3 of the Prospectus Directive or of a
supplement to a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this section, the expression an “offer to the public” in relation to any Rights Entitlements or
Equity Shares in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and any Rights Entitlements or Equity Shares to be offered so as
to enable an investor to decide to purchase any Rights Entitlements or Equity Shares, as the same may be varied
in that Member State by any measure implementing the Prospectus Directive in that Member State and the
expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010
PD Amending Directive), and includes any relevant implementing measure in the Relevant Member State and
the expression 2010 PD Amending Directive means Directive 2010/73/EU.
Each purchaser of Rights Entitlements or Equity Shares described in this Abridged Letter of Offer/Letter of
Offer located within a Relevant Member State will be deemed to have represented, acknowledged and agreed
that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive.
viii
In the case of any Rights Entitlements or Equity Shares in this Offering being offered to a financial intermediary
as that term is used in Article 3(2) of the Prospectus Directive, the Lead Managers will use their reasonable
endeavours, by the inclusion of appropriate language in the Supplement, to procure that such financial
intermediary will be deemed to have represented, acknowledged and agreed that the Rights Entitlements or
Equity Shares acquired by it in the Offering have not been acquired on a non-discretionary basis on behalf of,
nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise
to an offer of any Rights Entitlements or Equity Shares in this Offering to the public other than their offer or
resale in a Relevant Member State to qualified investors as so defined who are not financial intermediaries or in
circumstances in which the prior consent of the Lead Managers has been obtained to each such proposed offer
or resale.
United Kingdom
Each Lead Manager:
a.
has complied and will comply with all applicable provisions of FSMA with respect to anything done by
it in relation to the Rights Entitlements or Equity Shares in, from or otherwise involving the United
Kingdom; and
b.
this Abridged Letter of Offer/Letter of Offer is for distribution only to persons who (i) have
professional experience in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial
Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies,
unincorporated associations etc”) of the Financial Promotion Order, (iii) are outside the United
Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with
the issue or sale of any securities may otherwise lawfully be communicated or caused to be
communicated (all such persons together being referred to as “relevant persons”). This Abridged Letter
of Offer/Letter of Offer is directed only at relevant persons and must not be acted on or relied on by
persons who are not relevant persons. Any investment or investment activity to which this document
relates is available only to relevant persons and will be engaged in only with relevant persons.
NO OFFER IN THE UNITED STATES
The Rights Entitlement and the Equity Shares offered in this Issue have not been and will not be registered
under the United States Securities Act of 1933 (“Securities Act”), or any U.S. state securities laws and may not
be offered, sold, resold or otherwise transferred within the United States of America or the territories or
possessions thereof (the “United States” or “U.S.”), or to, or for the account or benefit of U.S. Persons (as
defined in Regulation S of the Securities Act (“Regulation S”)), except in a transaction exempt from the
registration requirements of the Securities Act. The offering to which this Letter of Offer relates is not, and
under no circumstances is to be construed as, an offering of any Equity Shares or rights for sale in the United
States or as a solicitation therein of an offer to buy any of the said Equity Shares offered in this Issue or Rights
Entitlement. Accordingly, this Letter of Offer or the Abridged Letter of Offer and the CAF should not be
forwarded to or transmitted in or into the United States at any time.
Neither we nor any person acting on behalf of us will accept subscriptions or renunciation from any person, or
the agent of any person, who appears to be, or who we or any person acting on behalf of us has reason to believe
is, either a “U.S. Person” (as defined in Regulation S) or otherwise in the United States when the buy order is
made. Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from
the United States or any other jurisdiction where it would be illegal to make an offer, and all persons subscribing
for the Equity Shares in this Issue and wishing to hold such Equity Shares in registered form must provide an
address for registration of the Equity Shares in India. We are making the Issue on a rights basis to Eligible
Equity Shareholders and the Letter of Offer and CAF will be dispatched only to Equity Shareholders who have
an Indian address. Any person who acquires rights and the Equity Shares offered in this Issue will be deemed to
have declared, represented, warranted and agreed, (i) that it is not and that at the time of subscribing for such
Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made, (ii) it is
not a “U.S. Person” (as defined in Regulation S) and does not have a registered address (and is not otherwise
located) in the United States, and (iii) it is authorised to acquire the rights and the Rights Issue Equity Shares in
compliance with all applicable laws and regulations.
ix
We reserve the right to treat any CAF as invalid which: (i) does not include the certification set out in the CAF
to the effect that the subscriber is not a “U.S. Person” (as defined in Regulation S) and does not have a
registered address (and is not otherwise located) in the United States and is authorized to acquire the Equity
Shares offered in the Issue or Rights Entitlement in compliance with all applicable laws and regulations; (ii)
appears to us or our agents to have been executed in or dispatched from the United States; (iii) appears to us or
our agents to have been executed by a U.S. Person (as defined in Regulation S); (iv) where a registered Indian
address is not provided; or (v) where we believe that CAF is incomplete or acceptance of such CAF may
infringe applicable legal or regulatory requirements; and we shall not be bound to allot or issue any Equity
Shares or Rights Entitlement in respect of any such CAF.
x
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND
CURRENCY OF PRESENTATION
Certain Conventions
References in this Letter of Offer to “India” are to the Republic of India and the “Government” or the “Central
Government” is to the Government of India. All references to the “US”, or the “U.S.A.” or the “United States”
are to the United States of America and all references to “UK” or the “U.K.” are to the United Kingdom.
Financial Data
Unless stated otherwise, financial data in this Letter of Offer with respect to our Company is derived from our
audited consolidated financial statements. Our Fiscal Year commences on April 1 for a year and ends on March
31 of the next year. In this Letter of Offer, our audited financial statements for Fiscal 2012 have been included.
For details of such financial statements, please refer to the chapter “Financial Statements” on page 74.
We have also included the limited reviewed financial results for the quarter ended June 30, 2012 as disclosed to
the Stock Exchanges in accordance with the requirements under the Listing Agreements. For details of such
financial statements, please refer to the chapter “Material Developments” on page 269.
In accordance with Clause 5(VII), Part E, Schedule VIII of SEBI ICDR Regulations, the report of M/s. A.K.
Sabat & Co., Chartered Accountants on the summary financial information of Equator for Fiscal 2009, Fiscal
2010, Fiscal 2011 and Fiscal 2012, prepared in accordance with the Indian GAAP, has been included in this
Letter of Offer. For details, please refer to the chapter “Summary Financial Statements of Equator” on page 233.
We have also included the report of the statutory auditors of Panorama, Prism and Eenadu, M/s. A.K. Sabat &
Co., Chartered Accountants, on the summary financial information of Panorama, Prism and Eenadu for Fiscals
2008, 2009 and 2010, based on carve-out financial information of the television broadcasting business division
(comprising of ETV News Channels, ETV Non-Telugu Channels and ETV Telugu Channels, respectively) of
UEPL for the respective years, prepared in accordance with the Indian GAAP and Guidance Note on Audit
Reports and Certificates for Special Purpose issued by the ICAI, and the summary financial information for
Fiscal 2011 and Fiscal 2012 prepared in accordance with Indian GAAP in this Letter of Offer. Please refer to the
chapter “Summary Financial Statements of Eenadu, Prism and Panorama” on page 241.
Additionally, we have included the audited standalone financial statements of erstwhile Television Eighteen for
Fiscal 2011 prior to the merger of Television Eighteen with us. These audited standalone financials of
Television Eighteen includes the results of operations of the business news undertakings, i.e. CNBC-TV18 and
CNBC Awaaz, now operated by us, pursuant to the Scheme of Arrangement. Please refer to the chapter
“Financial Statements for erstwhile Television Eighteen” on page 167.
We prepare our financial statements in accordance with the Indian GAAP, which differ in certain respects from
generally accepted accounting principles in other countries. Indian GAAP differs in certain significant respects
from IFRS. We publish our financial statements in Indian Rupees. Any reliance by persons not familiar with
Indian accounting practices on the financial disclosures presented in this Letter of Offer should accordingly be
limited. We have not attempted to explain those differences or quantify their impact on the financial data
included herein, and we urge you to consult your own advisors regarding such differences and their impact on
our financial data.
In this Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are
due to rounding off, and unless otherwise specified, all financial numbers in parenthesis represent negative
figures. Numerical values have been rounded off to two decimal places.
Market and Industry Data
Unless stated otherwise, market, industry and demographic data used in this Letter of Offer has been obtained
from market research, publicly available information, industry publications and government sources. Industry
publications generally state that the information that they contain has been obtained from sources believed to be
reliable but that the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys,
industry forecasts and market research, while believed to be reliable, have not been independently verified and
xi
neither we nor the Lead Managers makes any representation as to the accuracy of that information. Accordingly,
Investors should not place undue reliance on this information.
Currency and Units of Presentation
All references in this Letter of Offer to “Rupees”, “`”, “Indian Rupees” and “INR” are to Indian Rupees, the
official currency of India. All references to “U.S. $”, “U.S. Dollar”, “USD” or “$” are to United States Dollars,
the official currency of the United States of America.
Please Note:
One million is equal to 1,000,000/ 10 lacs;
One billion is equal to 1,000 million/ 100 crores; and
One crore is equal to 10 million/ 100 lacs.
Exchange Rates
Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent
of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the
conversion into U.S. Dollars of any cash dividends paid in Rupees on the Equity Shares.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Rupee and the U.S. Dollar (in Rupees per U.S. Dollar) based on the reference rates released by the RBI. No
representation is made that the Rupee amounts actually represent such amounts in U.S. Dollars or could have
been or could be converted into U.S. Dollars at the rates indicated, at any other rates or at all.
Year ended March 31
2012
2011
2010
Month ended
August, 2012
July, 2012
June, 2012
May, 2012
April, 2012
March, 2012
Period End
(in `)
51.16
44.65
45.14
Average*
(in `)
47.95
45.27
47.42
High*
(in `)
54.24
45.95
50.53
Low*
(in `)
43.95
44.65
44.94
Period End
(in `)
55.72
55.81
56.31
56.42
52.52
51.16
Average*
(in `)
55.56
55.49
56.03
54.47
51.80
50.32
High*
(in `)
56.08
56.38
57.22
56.42
52.79
51.31
Low*
(in `)
55.15
54.55
55.15
52.86
50.56
49.15
Source: RBI website at www.rbi.org.in
*Note: High, low and average are based on the RBI reference rate
RBI reference rates as of August 31, 2012 - INR/ 1 USD: ` 55.72
xii
FORWARD LOOKING STATEMENTS
Certain statements in this Letter of Offer are not historical facts but are “forward-looking” in nature. Forward
looking statements appear throughout this Letter of Offer, including, without limitation, under the chapters
“Risk Factors”, “Industry” and “Business”. Forward-looking statements include statements concerning our
plans, objectives, goals, strategies, future events, future revenues or financial performance, capital expenditures,
financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, our
business strategy and the trends we anticipate in the industry and the political and legal environment, and
geographical locations, in which we operate, and other information that is not historical information.
Words such as “aims”, “anticipate”, “believe”, “could”, “continue”, “estimate”, “expect”, “future”, “goal”,
“intend”, “is likely to”, “may”, “plan”, “predict”, “project”, “seek”, “should”, “targets”, “would” and similar
expressions, or variations of such expressions, are intended to identify forward-looking statements but are not
the exclusive means of identifying such statements.
By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific,
and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be
achieved.
These risks, uncertainties and other factors include, among other things, those listed under “Risk Factors”, as
well as those included elsewhere in this Letter of Offer. Prospective investors should be aware that a number of
important factors could cause actual results to differ materially from the plans, objectives, expectations,
estimates and intentions expressed in such forward-looking statements. These factors include, but are not
limited, to:

Decline in revenues from advertisements;
Competition in the broadcasting industry;
Termination of joint venture agreements;
Technological failures and inability to keep pace with developments in technology;
Ability to retain journalistic and production talent;
Financial instability in Indian financial markets;
Political and social instability in countries we operate our business;
Fluctuations in the exchange rate between the Rupee and foreign currencies;
Significant competition in markets could have a material adverse effect on our business, financial
condition and results of operations;
Regional hostilities, terrorist attacks or social unrest in India; and
Adverse political, social and economic developments in India.
For a further discussion of factors that could cause our actual results to differ, please refer to the chapters “Risk
Factors” and “Business” on pages xiv and 52, respectively. By their nature, certain market risk disclosures are
only estimates and could be materially different from what actually occurs in the future. As a result, actual
future gains or losses could materially differ from those that have been estimated. Neither we nor the Lead
Managers make any representation, warranty or prediction that the results anticipated by such forward-looking
statements will be achieved, and such forward-looking statements represent, in each case, only one of many
possible scenarios and should not be viewed as the most likely or standard scenario. Neither we nor the Lead
Managers nor any of their respective affiliates or advisors have any obligation to update or otherwise revise any
statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying
events, even if the underlying assumptions do not come to fruition. In accordance with SEBI/ Stock Exchanges
requirements, we and Lead Managers will ensure that Investors in India are informed of material developments
until the time of the grant of listing and trading permissions by the Stock Exchanges.
xiii
SECTION II - RISK FACTORS
An investment in equity and equity related securities involves a high degree of risk and investors should not
invest any funds in this Issue unless they can afford to take the risk of losing all or a part of their investment.
You should carefully consider all of the information in this Letter of Offer, including the risks and uncertainties
described below, before making an investment. In making an investment decision, prospective investor must rely
on their own examination of us and terms of the Issue, including the merits and risk involved. If any of the
following risks actually occur, our business, financial condition, results of operations and prospects could
suffer, the trading price of our Equity Shares could decline and you may lose all or part of your investment. The
risk and uncertainties described below are not the only risks that we currently face. Additional risk and
uncertainties not presently known to us or that we currently believe to be immaterial may also have an adverse
effect on results of operations and financial condition. You should also pay particular attention to the fact that
we are governed in India by a legal and regulatory environment which in some material respects may be
different from that which prevails in other countries.
This Letter of Offer also contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including the considerations described below and elsewhere in this Letter of Offer. The financial and
other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk
factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence
the same has not been disclosed in such risk factors.
Internal Risk Factors
1.
There are certain legal proceedings involving us and our Joint Ventures that, if determined against us,
could have a material adverse impact on our financial condition and results of operations.
There are outstanding material legal proceedings involving us and our Joint Ventures, which may adversely
affect our business and operations. These legal proceedings are pending at different levels of adjudication
before various courts and tribunals. Should any new developments arise, such as a change in law or rulings
against us by courts or tribunals, we may need to make provisions in our financial statements, which could
adversely impact our reported financial condition and results of operations. Furthermore, if significant claims
are determined against us and we are required to pay all or a portion of the disputed amounts, there could be a
material adverse effect on our business and profitability.
A classification of the material legal proceedings instituted against and by us, our joint ventures and the
monetary amount involved, wherever quantifiable, in these cases is mentioned in brief below.
Litigation against our Company
Sr.
No.
1.
2.
3.
4.
Nature of the litigation
Criminal
Civil
Complaints to SEBI
Tax
Total
Number of outstanding
litigations
11
7
1
4
23
Aggregate amount ascertainable
(`
`) in million
50.00
46,298.10
Not ascertainable
213.81
46,561.91
litigations
Aggregate amount ascertainable
(`
`) in million
0.07
2,464.48
2,464.55
Litigation by our Company
Sr.
No.
1.
2.
Nature of the litigation
Criminal
Civil
1
2
3
Total
xiv
Litigation against our Joint Ventures
Name of the joint
venture
Viacom 18
Nature of the
litigation
Criminal
Civil
Tax
litigations
4
3
6
13
Aggregate amount
ascertainable (`
`) in million
Not Ascertainable
236.63
244.83
481.46
Name of the joint
Nature of the
venture
litigation
IBN Lokmat
Criminal
Total
litigations
1
1
Aggregate amount
ascertainable (``) in million
Not ascertainable
Not ascertainable
litigations
4
4
Aggregate amount
ascertainable (`
`) in million
14.12
14.12
Total
Litigation by Joint Ventures
Name of the joint
Nature of the
venture
litigation
Viacom 18
Criminal
Total
Name of the joint
Nature of the
Aggregate amount
venture
litigation
litigations
ascertainable (``) in million
IBN Lokmat
Criminal
2
Not ascertainable
Total
2
Not ascertainable
Note: The amounts indicated in the column above are approximate amounts.
We cannot provide any assurance that these matters will be decided in our favour. Further, there is no
assurance that similar proceedings will not be initiated against us, our Subsidiaries and our Joint Ventures
in the future. For further details of the cases mentioned above, please refer to the chapter “Outstanding
Litigations” on page 286.
2.
We are involved in a legal proceeding instituted by the minority shareholders of e-Eighteen.com Limited
(“EEL”). Any adverse development in this case may require us to transfer all our businesses, activities
and ventures along with all assets and intellectual property developed and built after September 12, 2000
to EEL and prevent us from undertaking any expansion or development activity. Any adverse
development in these cases could have an adverse effect on us.
Mr. Raghav Bahl, promoter of Network18 and one of our Directors, and certain group companies are
involved as defendants in a derivative action instituted by Victor Fernandes, Sangeeta Fernandes, Priti
Khanderia and Manoj Khanderia, the minority shareholders of e-Eighteen.com Limited (“EEL”), on August
25, 2006 before the Bombay High Court. The plaintiffs have alleged that Mr. Raghav Bahl and TV18 have
promoted and developed various businesses through various companies which should have under the
subscription cum shareholders agreement dated September 12, 2000, rightfully been undertaken by EEL or
its wholly owned subsidiaries. The plaintiffs have alleged that by not doing so Mr. Raghav Bahl and we
have caused monetary loss to EEL as well as to the plaintiffs. For the purposes of court fee and jurisdiction,
the plaintiffs have valued their suit at ` 30,141.2 million and ` 999.4 million respectively and have inter
alia prayed that Mr. Raghav Bahl, us and others be ordered to transfer to EEL all their businesses, activities
and ventures along with all assets and intellectual property. The plaintiffs on September 18, 2006 had filed
a notice of motion (no. 3232 of 2006) seeking ad interim relief. The notice of motion was dismissed on
August 8, 2008 against which the Plaintiff has filed an appeal before the division bench of the High Court.
The appeal was dismissed by the High Court on September 21, 2011. The suit filed by the plaintiffs is
currently pending. For further details please refer to the chapter “Outstanding Litigations” on page 286.
Any adverse development in this case may require us to transfer all our businesses, activities and ventures
alongwith all assets and intellectual property developed after September 12, 2000 to EEL.
xv
3.
A decline in advertising revenue could cause our revenue and operating results to decline significantly.
We primarily generate revenue through the sale of advertisements through our television channels. Our
ability to generate and maintain significant advertising revenue will depend on a number of factors, many
of which are beyond our control, including, but not limited to:

overall economic and industry conditions;
public policy and government regulation;
market trends;
budgeting and buying patterns of our advertisers; and
viewership of our channels.
Our advertisers generally make commitments to purchase advertising time only a short period in advance.
Additionally, they may terminate contracts before completion, choose not to renew contracts at short notice
or fail to make payments on time or at all. We are also limited by a fixed amount of available advertising
time and space constraints, and our rates are affected by the prices charged by our competitors, the ratings
of other channels and the usage statistics of other digital properties. Thus, our ability to leverage any
increase in viewership and user ratings to charge higher rates may be limited. A decline in the economic
prospects of advertisers or the economy in general could also alter current or prospective advertisers’
spending priorities. Advertising expenditures may also be affected by competition for the leisure time of
audiences. Television advertisers may be less willing to purchase advertising from us if ratings for our
programs decline, we are unable to retain the rights to or continue to deliver popular programming,
audience fragmentation increases due to the proliferation of new media formats, including cable networks,
internet and video on demand or ownership of portable digital devices and new recording technologies
which allow consumers to time shift programming, make and store digital copies and skip or fast-forward
through advertisements, increases. Any reduction in advertising expenditures by our advertisers could have
an adverse effect on our revenues and results of operations.
4.
Our indebtedness and the conditions and restrictions imposed on us by our financing agreements, or the
interest rate fluctuations to which we are exposed, could adversely affect our ability to conduct our
business.
As of July 31, 2012 we had standalone outstanding indebtedness of ` 10,256.39 million. We may incur
additional indebtedness in the future. Our indebtedness could have several important consequences,
including but not limited to the following:

a portion of our cash flow may be used toward repayment of our existing debt, which would reduce the
availability of cash to fund working capital needs, capital expenditures, acquisitions and other general
corporate requirements;
our ability to obtain additional financing in the future at reasonable terms may be restricted;
fluctuations in market interest rates may affect the cost of our borrowings, as some of our loans are at
variable interest rates; and
we may be more vulnerable to economic downturns, may be limited in our ability to withstand
competitive pressures and may have reduced flexibility in responding to changing business, regulatory
and economic conditions.
While we believe that our relationships with our lenders are good, compliance with the various terms of
our loans is subject to interpretation and, as a result, it is possible that a lender could assert that we have
not complied with all the terms under our financing documents. Our loan agreements contain requirements
to maintain certain security margins, financial ratios and restrictive covenants, such as requiring lender
consent for, among other things, issuance of new Equity Shares, making any material changes to our
constitutional documents, incurring further indebtedness, creating further encumbrances on, or disposing
of, our assets, undertaking guarantee obligations, acquiring another company, entering into joint ventures,
declaring dividends and incurring capital expenditures beyond certain limits. Any failure to service our
indebtedness, comply with any requirement to obtain a consent or perform any condition or covenant could
lead to a termination of one or more of our credit facilities, acceleration of amounts due under such
facilities and cross-defaults under certain of our other financing agreements, any of which may adversely
affect our ability to conduct our business and have a material adverse effect on our financial condition and
xvi
results of operations.
Further, an increase in prevailing interest rates would increase borrowing costs with respect to existing
floating rate obligations or new loans, which may adversely affect results of operations.
Under the terms of some of our financing documents, we are required to obtain consents from our lenders
to undertake the Issue. Various remedies available to lenders as a consequence, include, among others,
termination of our credit facilities, acceleration of all amounts due under such facilities and trigger cross
default provisions under certain of our other financing agreements, or lead to an enforcement of any
security provided. Any acceleration of amounts due under such facilities may trigger cross default
provisions under other financing agreements and may materially and adversely affect our business,
financial condition, results of operations and prospects.
5.
We shall use the proceeds of this Issue to finance the ETV Acquisition. The management of Network18
and TV18 have relied on the valuation report of Ernst & Young for approving the ETV Acquisition at a
price of ` 19,250 million and Ernst & Young have relied upon the information provided by the
management of TV18 and ETV Companies without independently verifying the same.
One of the objects of this Issue is to finance the ETV Acquisition. In connection with the ETV Acquisition,
we and Network18 have entered into the SPA with Equator and Arimas, pursuant to which, Arimas shall
sell and transfer, the Equator Securities to us, for an aggregate consideration of ` 19,250 million, as
adjusted for the net debt (“Net Debt”). The value of investment of Equator in Eenadu, Prism and Panorama
is ` 19,250 million less Net Debt, based on the valuation of the ETV Companies by Ernst & Young. The
management of Network18 and TV18 have relied on the valuation report of Ernst & Young for approving
the ETV Acquisition at a price of ` 19,250 million less Net Debt. The management of TV18 informed Ernst
& Young of the synergy benefits of the combined entity after the ETV Acquisition in subscription revenues,
advertisement revenues and savings in carriage/placement charges paid. Ernst & Young have discussed the
aforesaid synergies with the management of ETV and their view was in line with the assumptions
considered for the aforesaid synergies. In this connection, Ernst & Young have stated that they do not have
the technical knowledge/expertise to validate the assumptions relating to the synergy benefits. Ernst &
Young have also stated that their valuation analysis is based solely on various financial information
provided by the management of TV18 and ETV Companies without verifying the original documents.
The valuation of ETV Companies, which have undergone significant restructuring in past five years is
based on financial information derived from the unaudited balance sheet of ETV companies, as on
September 30, 2011 (being the last available balance sheet as on the date of completion of the valuation)
and on the projections of the business provided to it by the managements of TV18 and ETV Companies.
Accordingly, there can be no assurance that the valuation by Ernst & Young represents an accurate
valuation of the ETV Companies and we cannot provide any assurance that our investment in the ETV
Companies will be beneficial to the Company and /or our Equity Shareholders and provide returns on a
continuous basis.
6.
We have recorded losses in the past and may continue to incur losses in the future.
We recorded operating profit of ` 308.60 million and ` 172.10 million in Fiscal 2012 and quarter ended
June 30, 2012, respectively, and recorded operating loss of ` 186.85 million in Fiscal 2011 as per our
audited standalone financial statements and operating profit of ` 102.49 million for quarter ended June 30,
2011 as per limited reviewed financial statements, respectively. Although we recorded operating profits as
per audited standalone financial statements for Fiscal 2012 and limited reviewed financial statements for
quarter ended June 30, 2012, we cannot guarantee that we will be profitable in the future.
We also expect to incur future expenses as we develop and expand our business, which will make it harder
for us to maintain future profitability. We may incur losses in the future for a number of reasons, including
the other risks described in this Letter of Offer, and we may encounter unforeseen expenses, difficulties,
complications, delays and other unknown events. If we incur losses in the future, our financial condition
and the market price of our Equity Shares could suffer.
xvii
7.
During the Fiscal 2012 we have implemented the Scheme of Arrangement for reorganization of our
business. Therefore, our historical financial statements will not provide a meaningful basis for
evaluating our results of operations and financial condition.
Following the Scheme of Arrangement, the business news undertaking of Television Eighteen has been
merged with us and the entire broadcast business of Network18 Group (except the television brands
Homeshop18 and Toppers, which continue with Network18) is held and operated by us, w.e.f. April 1,
2010, the Appointed Date under the Scheme of Arrangement, and other businesses, including the internet
business, are held and operated by Network18. For further details, please refer to the chapter “Business”
on page 52. The Scheme of Arrangement has come into effect from June 10, 2011 with the appointed date
being April 1, 2010. Accordingly, the financial statements for the Fiscal 2011 do not give effect to the
Scheme of Arrangement. Consequently, historical financial statements for the Fiscal 2011 are not
comparable with Fiscal 2012 and would not provide a meaningful basis for evaluation of our current
financial position. Therefore, you will need to make your own assessment of our consolidated results of
operations and financial condition.
8.
If the Scheme of Arrangement were to prescribe a different accounting treatment (i.e. debiting the profit
and loss instead of writing it off from the securities premium) we could have incurred a loss of ` 485.20
million instead of profit of ` 92.42 million as shown in our standalone financial statements for Fiscal
2012.
The Scheme of Arrangement became effective on June 10, 2011 upon filing a copy of the order of the High
Court of Delhi with the Registrar of Companies, NCT of Delhi and Haryana, with the appointed date being
April 1, 2010. The Scheme of Arrangement, as approved by the High Court of Delhi at New Delhi vide its
order dated April 26, 2011, prescribed the accounting treatment in respect of the assets and liabilities taken
over pursuant to the scheme. As per the accounting treatment as prescribed by the Scheme of Arrangement
the impact of fair valuation of assets and liabilities in the Scheme of Arrangement amounting to ` 577.62
million has been debited to the securities premium account and consequently our standalone financial
statements for the Fiscal 2012 show a profit of ` 92.42 million. If the Scheme of Arrangement were to
prescribe a different accounting treatment (i.e. debiting the profit and loss instead of writing it off from the
securities premium) which required us to debit impact of fair valuation of assets and liabilities in the
Scheme of Arrangement amounting to ` 577.62 million to profit and loss account we could have incurred a
loss of ` 485.20 million instead of profit of ` 92.42 million as shown in our standalone financial statements
for Fiscal 2012.
9.
We operate our business news channel ‘CNBC-TV18’ as per the terms of a program and trademark
license agreement and other arrangements with CNBC-AP. Termination or amendment of these
agreements may adversely affect our business.
On August 13, 2003, Television Eighteen (since dissolved as per the Scheme of Arrangement) entered into
a program and trademark license agreement with CNBC-AP, for the use of CNBC’s name and logo for the
production and broadcast of the news channel “CNBC-TV18” until March 31, 2018. Pursuant to the
Scheme of Arrangement, we have acquired the news channel “CNBC-TV18”. This agreement with CNBCAP gives us a non-exclusive right to distribute, retransmit and exhibit, whether directly or through third
party distributors, CNBC programming content within India. The agreement can be terminated upon the
happening of certain events, including withdrawal of the uplinking approval by the MIB, or a breach of
any material obligation that is not remedied within 45 days of notice of such default given by the nondefaulting party. We cannot assure you that this agreement will not be terminated or unfavorably amended.
We have entered into a separate written agreement with CNBC-AP which applies these terms for the
broadcast of the news channel “CNBC Awaaz” as well.
We believe that “CNBC-TV18” and “CNBC Awaaz” derive significant benefit from the use of, and
association with, the CNBC’s brand and content. If we are unable to retain the same brand identity, we
may have to incur additional expenses for building new brand names for our business news channels. If
CNBC were to choose a different partner in the future, the value of our business news channels currently
associated with CNBC may be diluted. In addition, we would need prior consent from CNBC-AP to use
the CNBC name and logo for any of our proposed regional channels. All of these factors may materially
and adversely affect our business, operations and financial results.
xviii
10. The proposed Issue size is much larger than our net worth and current equity capital and consequently
non subscription by the existing Equity Shareholders would result in significant dilution of their
holdings.
Our net worth as of March 31, 2012 is ` 7,662.85 million on a standalone basis. The proposed Issue is for
an amount of ` 26,991.56 million on a rights basis to our existing Equity Shareholders in the ratio of 41
Equity Share(s) for every 11 fully paid up Equity Share(s) held by the existing Equity Shareholders on the
record date i.e. on September 17, 2012. Considering the Issue price is ` 20 per Equity Share, the size of
Issue will be 1,349,577,882 Equity Shares. The post rights equity capital will be 1,711,659,753 Equity
Shares (4.73 times the current equity capital). Further, Network18, Mr. Raghav Bahl, RRB Investments
Private Limited, Ms. Ritu Kapur, Ms. Vandana Malik, Ms. Subhash Bahl, Mr. Pramod Kapur, Ms. Manju
Kapur and the Subscribing Companies, part of our Promoter and Promoter Group, have confirmed vide
their letters dated February 29, 2012 that they intend to subscribe to the full extent of their Rights
Entitlement in the Issue, in compliance with regulation 10(4) of the Takeover Regulations. The
Subscribing Companies have, pursuant to their letter dated February 29, 2012, undertaken to subscribe to
(i) their entitlement, (ii) additional Equity Shares and (iii) any unsubscribed Equity Shares as disclosed in
the chapter “Capital Structure” on page 18. Hence any shareholding of the Equity Shareholder, not
subscribing to its entitlement, will be diluted by 78.85% after completion of the Rights Issue.
11. We derive benefits from CNN’s brand and extensive global news network pursuant to contractual
arrangements. Termination or amendment of these agreements may adversely affect our business.
On October 27, 2005, we entered into a brand license agreement with CNN, which gives us the limited,
exclusive non-transferable right to use the name and logo of CNN in India. Under this agreement, CNN
may add or remove elements from its licensed material as it deems necessary. Further, we executed a news
service agreement with Turner, which gives us a limited, exclusive license to receive and re-broadcast
CNN programming content in India. Each of these agreements are valid until December 17, 2015 and will
automatically be renewed for a period of 10 years on substantially the same terms, unless either party
notifies its intention not to renew at least 180 days prior to the expiration of the then-current term. The
agreement may also be immediately terminated by either party in certain circumstances.
We cannot assure you that these agreements will not be terminated or unfavorably amended by CNN or
Turner. If we are unable to retain the CNN brand identity, we may have to incur additional expenses to
rebrand our English general news channel, CNN IBN, which may decrease our market share and adversely
affect our results of operations.
12. Technological failures and our inability to keep pace with developments in technology could adversely
affect our business.
We rely on sophisticated production and broadcast equipment, communications equipment and other
information technology to conduct our business. Although we have backup equipment in some cases, if we
were to experience significant damage to certain equipment or other technological breakdowns to
equipment or systems, it could disrupt our ability to produce or broadcast our programming, our internal
decision-making or other critical aspects of our business. Further, the broadcasting of CNBC-TV18, CNBC
Awaaz, CNBC TV18 Prime HD, CNN IBN, IBN 7, IBN Lokmat and Viacom18’s channels is uplinked to a
single satellite (Intelsat 10). If this satellite was to cease to be available to us for any reason, we would
have to secure access to an alternative satellite, and we cannot assure you that such access would be
available on equally favourable terms or at all or the time frame within which such access would be
available. We also cannot assure that the MIB will approve uplinking and downlinking from our preferred
satellites. Though we maintain insurance for our assets and loss of profits, any equipment or technological
failure or damage due to technological failures and natural disasters such as earthquakes and floods that
results in a disruption of our services could lead to loss of revenues.
Further, our business is subject to rapid changes in technology, evolving industry standards and norms,
new product and service introductions and evolving website presentations and features. Our results of
operations and financial condition depend on our ability to develop and introduce new products and online
services. The technology currently employed by us may become obsolete. The process of adapting to new
developments in technology is complex and requires us to accurately predict and respond to customers’
changing and diverse needs and emerging technological trends. The success of implementation of new
xix
technology for our business will depend on several factors, including proper identification of market
demands and the competitiveness of our products. In addition, we may need to incur significant
expenditure to achieve this goal and to enable us to be positioned to benefit from market and industry
changes. The cost of implementing new technology could be significant and could adversely affect our
business, financial condition and results of operations. In addition, our ability to respond to technological
changes may depend upon our ability to obtain additional financing, which we may not be able to obtain
on commercially favourable terms or at all. Our failure to respond successfully to any of these challenges
will significantly harm our results of operations and financial condition.
13. We are party to a shareholders’ agreement relating to Viacom18 which could, under certain
circumstances, lead to a reduction in our ownership of Viacom18 and dilute the value of our Equity
Shares.
Network18 had entered into a shareholders’ agreement dated May 22, 2007, as amended, with Viacom Inc.
for its investment in Viacom18 (“Viacom Agreement”). Pursuant to an option agreement dated November
7, 2007, the shareholding of Network18 in Viacom18 was entirely transferred to us. Viacom Inc., has the
right, after July 21, 2014, to purchase such number of Viacom18 shares from us at fair market value, or
appoint directors so as to establish management control or take any other action, such that Viacom Inc. can
consolidate Viacom18’s financial results under US GAAP. In the event Viacom Inc. exercises its call
option, we have a put option allowing us to cause Viacom Inc. to purchase our entire shareholding in
Viacom18. Upon such exercise of Viacom Inc’s call option, we would have a less than 50% interest in
Viacom18 and a reduced presence on the Viacom18 board of directors. Each of these consequences could
have a material adverse effect on our business, results of operations and financial condition.
In addition to our put option that is triggered by Viacom Inc’s exercise of its call option, we also hold a
partial put option that allows us to sell one-fifth of our Viacom18 shares at fair market value to Viacom
Inc. each year for five successive years beginning on July 1, 2012. If we exercise our partial put option in a
particular year, we are not obligated to exercise it in subsequent years. However, our partial put option is
cumulative and therefore if we choose not to exercise our partial put option in any particular year, the
unexercised partial put option shares may be exercised in subsequent years. In the event we exercise any
portion of our partial put option, Viacom Inc may choose to purchase such shares, nominate another party
to purchase such shares or choose not to purchase such shares. In the event Viacom Inc chooses not to
purchase such shares, we may trigger an initial public offering of Viacom18 through the issuance of new
shares and/or existing shares, except the issuance of new shares may not reduce Viacom Inc’s shareholding
by more than five percent of the share capital immediately prior to the initial public offering. If, following
an initial public offering of Viacom18, we hold less than 20% of Viacom18’s share capital, we will lose
governance rights to jointly control Viacom18. As our percentage ownership in Viacom18 decreases, our
minority protection rights will continue to weaken. If we choose to exercise any portion of our partial put
option or if we trigger an initial public offering of Viacom18, we may lose control over Viacom18, our
financial statements may be affected and holders of our Equity Share will experience a decline in their
proportionate stake of Viacom18.
14. If relationships with our joint venture partners or strategic relationships with third parties deteriorate or
discontinue, our business, results of operations and financial condition could suffer.
Viacom18 operates and broadcasts six entertainment channels. The Viacom Agreement sets out the rights
and obligations concerning the participation of the parties in Viacom18 and the management thereof,
including additional funding obligations.
Under the terms of our shareholder agreement with Lokmat Media Limited (“Lokmat”), IBN Lokmat
News Private Limited was incorporated to launch a 24-hour Marathi news channel called IBN Lokmat. IBN
Lokmat was first broadcast on April 6, 2008. Lokmat’s expertise and understanding of Marathi journalistic
culture assists IBN Lokmat News Private Limited in developing its style and TV programs to appeal to
Marathi viewers. The business and operations of IBN Lokmat are governed by the shareholder agreement
which provides for detailed rights and obligations to us and Lokmat.
In June, 2012, we announced a strategic joint venture with Viacom18 to create a multi-platform ‘Content
Asset Monetization’ entity, which shall drive domestic, and international channel distribution across all
platforms, including Cable, DTH, IPTV, HITS and MMDS, placement services and content syndication for
xx
the channels currently operated by us and the ETV Channels in all states of India (excluding states of
Tamil Nadu and Pondicherry where Sun18 shall have these rights until March 31, 2013).
In October 2010, we entered into a joint venture with A&E Television Networks LLC to launch television
channels in the factual entertainment genre. During the calendar year 2011, we have launched the channel,
History TV18.
We cannot assure you that we can maintain relationships with our current joint venture partners. If our
relationships with our joint venture partners deteriorate or are terminated, our business, results of
operations and financial condition may be materially and adversely affected.
We may establish joint ventures and build strategic relationships with other third parties in the future.
However, we cannot assure you that we will be able to successfully establish joint ventures or strategic
relationships with third parties that will prove to be beneficial for our business. Our inability in this regard
could have a material adverse effect on our revenue growth and prospects. In addition, strategic
relationships or joint ventures with third parties could subject us to a number of risks, including:

our inability to integrate new operations, products, personnel, services or technologies; unforeseen or
hidden liabilities;
potential disagreements with our strategic relationship partners;
our inability to generate sufficient revenues to offset the costs and expenses of strategic acquisitions
or other strategic relationships; and
potential loss of, or harm to, employees or customer relationships.
Any of these events could impair our ability to manage our business, which in turn could have a material
adverse effect on our financial condition and results of operations. Such risks could also result in our
failure to derive the intended benefits of the strategic acquisitions or strategic relationships and we may be
unable to recover our investment in such initiatives.
15. Our success in the film business is dependent upon audience acceptance of our content, which is
difficult to predict. If our films are not accepted by the audience, our results of operation and financial
condition could suffer.
The film business is inherently risky because the revenues derived from the production and distribution of
a film and the licensing of a film’s intellectual property rights depend primarily upon the film’s acceptance
by the public, which is difficult to predict. The commercial success of a film also depends upon the quality
and acceptance of other films released into the marketplace at or near the same time, the availability of
alternative forms of entertainment and leisure time activities, general economic conditions and other
tangible and intangible factors, all of which are difficult to predict.
Through Viacom18 Motion Pictures, through which we undertake our film business, we are exposed to the
uncertainties inherent in the film industry, including:
perceived political, social, cultural and religious sensitivities in India, which can lead to reduced
acceptability of films by audiences, censorship, low box office earnings and bans on the presentation of
films in certain areas of India;
significant lag time between the incurrence of costs and the realization of revenue during the
production and distribution of a full-length feature film;
a limited pool of popular and creative talent, which may lead to significant competition and increased
costs to secure the services of certain actors, directors and producers;
the relatively unorganized structure of the Indian film industry exposes us to substantial financial risks
relating to the production, completion and release of films; and
box office receipts from our films are not guaranteed and poor performance could have an adverse
impact on our results of operations.
The occurrence of any of all of the above factors may adversely affect our business and operations.
xxi
16. If we do not manage our new business ventures successfully, we may not be able to execute our growth
strategy. We may also lose our investment in such new ventures which will adversely affect our financial
results.
As part of our growth strategy, we anticipate launching new television channels, many of which could be
in new segments or genres, such as radio channels. Each new business venture will involve substantial
development costs and resources as well as the attention of our management. Moreover, we cannot assure
you that we will have accurately estimated the relevant demand in India for the content and services
offered by such new channels or that we will be able to attain and retain the skills and resources necessary
to effectively manage such new channels. In order to manage our new business ventures successfully, we
must continuously improve our operational and financial systems, expand our network and system
infrastructure, retain and hire qualified personnel, enhance the effectiveness of our financial controls and
procedures and provide attractive and reliable products to consumers. If these new business segments fail
to achieve our desired growth or generate sufficient revenue, our business, financial condition and results
of operations may be materially and adversely affected.
17. Our Promoters’ subscription in the proposed Issue is dependent on the outcome of the rights issue of
Network18 Media & Investments Limited.
One of the objects of the Rights Issue of Network18 is to invest in us through this Issue. Accordingly, our
Promoters’ subscription in the proposed Issue is dependent on the outcome of its rights issue and there is
no alternate arrangement to finance the subscription of Network18’s entitlement in this Issue. If the Rights
Issue of Network18 is not successfully completed, we may not be able to proceed with the Issue or the
ETV Acquisition.
18. The completion of the proposed ETV Acquisition is subject to various uncertainties and conditions and
we cannot provide any assurance that the ETV Acquisition shall be successfully completed.
One of the objects of the Rights Issue of Network18 is to invest in us. We shall use the proceeds of this
Issue to finance the ETV Acquisition. In connection with the ETV Acquisition, we and Network18 have
entered into the SPA with Arimas and Equator. The completion of the ETV Acquisition is uncertain since
it is contingent upon the fulfilment of certain conditions precedent contemplated in the SPA, including:
i.
ii.
iii.
iv.
v.
all necessary filings and approvals, if any, from relevant Government authorities having been
obtained;
completion of Rights Issue of Network18 and this Issue;
the ETV Acquisition to be funded by the Rights Issue of Network18 and this Issue only;
the Subscribing Companies having utilized the proceeds from the issue of ZOCDs in applying to (a)
their respective entitlements (b) additional Equity Shares if any; and (c) the unsubscribed portion if
any in the Rights Issue of Network18 and Rights Issue of TV18; and
IMT subscribing to ZOCDs of the Subscribing Companies.
In terms of the ZOCD Investment Agreement, IMT has agreed to subscribe to such number of ZOCDs to
be issued by the Subscribing Companies, as will enable the Subscribing Companies to further subscribe to
the equity shares offered as a part of Rights Issue of Network18 and this Issue. Accordingly, unless the
Rights Issue of Network18 and this Issue are completed, there can be no assurance that we will complete
the ETV Acquisition as planned, on schedule, or at all. Our inability to successfully complete the ETV
Acquisition could impact our growth plans.
19. If we are successful in completing the ETV Acquisition, we will be subject to a number of risks.
If the ETV Acquisition is completed, we will be subject to a number of additional risks that could
adversely affect our business, financial condition and results of operations, which may in turn affect the
value of the Equity Shares. These risks include the following:
It is a substantial investment and we may be unable to successfully integrate the ETV Channels
acquired pursuant to the completion of the ETV Acquisition with our existing facilities or achieve the
synergies and other benefits we expect from the ETV Acquisition. We may be unsuccessful in
integrating the assets and operations of the ETV Channels acquired pursuant to the ETV Acquisition
with our own in an effective and efficient manner, which may result in our failure to achieve the
xxii
anticipated benefits of the investment and harm our business. The difficulties of combining the two
businesses potentially will include, among other things:
(i) the necessity of addressing possible differences in corporate cultures and management
philosophies;
(ii) the integration of certain operations following the transaction will require the dedication of
significant management resources, which may temporarily distract management’s attention from
the day-to-day business of our Company;
(iii) any inability in managing a much larger business; and
(iv) any inability of our management to cause best practices to be applied to Panorama, Prism and
Eenadu.
Any difficulties encountered in combining operations could result in higher integration costs and lower
savings than expected.
We may be unsuccessful in retaining the senior management team and other key employees of the
companies acquired pursuant to the ETV Acquisition. The success of our investment will depend in
part upon our ability to retain the senior management team and other key employees of the companies
acquired pursuant to the ETV Acquisition. Competition for qualified personnel can be very intense. In
addition, senior management and key employees may depart because of issues relating to the
uncertainty or difficulty associated with the integration of the assets and operations acquired pursuant
to the completion of the ETV Acquisition or a desire not to remain with us. Accordingly, there can be
no assurance that we will be able to retain senior management and key employees to the extent
necessary to successfully integrate the operations of Panorama, Prism and Eenadu with ours and
consequently our business and expansion plans might be affected.
We may be subject to unforeseen contingent risks or other liabilities relating to the investment that may
become apparent in the future. There may be a risk that the information relied on by us with respect to
the ETV Acquisition is incomplete or inaccurate and consequently, we may be subject to unforeseen
liabilities and obligations relating to the ETV Acquisition. This may affect our business, financial
condition, results of operations and the implementation of our business strategy.
We may require additional capital to fund the expansion, development, operation and maintenance of
the ETV Channels, pursuant to the completion of the ETV Acquisition. In the event we are unable to
source such funds in time, on commercially viable terms from external sources or at all, our business
growth shall be adversely affected.
The ETV Channels may not be able to sustain its viewership base and growth. In the event the
viewership of the ETV Channels declines, the revenues from advertisements shall correspondingly
decline. Consequently, our business and expansion plans may be adversely affected.
Pursuant to the ETV Acquisition, we would not control more than 75% of the voting power of Prism
and Eenadu which may affect our ability to control the content of the ETV Channels operated by these
companies or affect our ability to influence shareholders’ decisions. Consequent to the ETV
Acquisition, we would not control more than 75% of the voting power of Prism and Eenadu and
consequently, we may not be able to successfully influence the content of the ETV Channels operated
by these companies and also may not be able to successfully implement business strategies in these
companies which we believe would be in our best interest. This may have an adverse effect on our
business and results of operations.
We may not be able to continue to use ETV trademark and ETV brand names. Pursuant to the
Trademark License Agreement, Eenadu has granted an irrevocable, exclusive and royalty free license
on a worldwide basis to use the ETV trademarks and ETV brand names in relation to the ETV News
Channels and ETV Non-Telugu Channels to Panorama and Prism, respectively upto February 28, 2015.
Further, joint use of the marks is permissible, but in the event of such joint use, of the trademarks with
the trademarks of 3rd parties, our license shall expire within six months from the date of
commencement of such joint use of marks. We cannot assure you that we will be able to successfully
rebrand in the event our trademark license is terminated and /or we are otherwise unable to extend the
terms of Trademark License Agreement.
xxiii
We have very limited experience in regional broadcasting market. We are currently not present in the
regional broadcasting market except for 50% stake in IBN Lokmat. We may not able to sustain or
improve the performance of ETV Channels due to the complexities involved in the regional
broadcasting market.
We cannot be certain that ETV Companies will be able to obtain all such approvals and registrations, in
a timely manner, or at all based on the due diligence conducted by our Company, we understand that
certain approvals in relation to the ETV Channels have expired. In addition, applicable approvals and
registrations may be dependent on the fulfilment of certain conditions and subject to review and
renewal from time to time, as well as the risk of revocation or modification and may in certain cases
require operational changes, which may involve significant costs or delays. Failure to obtain, maintain
or renew such approvals and registrations, or a violation of the conditions of any approval or of other
legal or regulatory requirements may result in substantial fines, sanctions, permit revocations,
injunction, which may adversely affect our business, prospects, results of operation and financial
condition.

UEPL has been involved in certain legal proceedings, which, pursuant to the ETV Scheme of
Arrangement, has been transferred to the ETV Companies which may adversely affect the business and
operations of the ETV Companies. Furthermore, if significant claims are determined against the ETV
Companies and are required to pay all or a portion of the disputed amounts, there could be a material
adverse effect on their business and profitability.
For details of ETV Acquisition, please refer to the chapters “Objects of the Issue” and “Material
Agreements Pertaining to ETV acquisition” on page 28 and 62, respectively.
20. The statutory auditors of UEPL had qualified their reports on financial statements for the Fiscals 2008,
2009 and 2010.
The statutory auditors of UEPL had qualified their reports on financial statements for the Fiscals 2008,
2009 and 2010. Brief details of the area of qualifications are set forth below.
Fiscal 2008
As more fully discussed in note 5 on schedule 24 to the financial statements the Company has, during
the year paid an amount of ` 670 crore as aggregate consideration for the purchase of certain
intangibles. The Company intends to amortize the same over a period of five years. In the absence of a
quantification of the future economic benefits that would accrue to the Company, from the use of such
intangible assets, we are unable to comment on the carrying value of the assets.
Fiscal 2009
No provision has been made for the diminution in the value of investments of ` 3.71 crores in the
wholly owned subsidiary and for the recoverability of advances to that subsidiary to ` 5.41 crores
although the net worth of the subsidiary has eroded substantially. Management is of the view that the
diminution is not other than temporary and that the amounts are fully recoverable. We are unable to
comment on the carrying value of the investment or the recovery of the advances.
As more fully disclosed in note 5 on schedule 24 to the financial statements, fixed assets include an
aggregate amount of ` 1,445 crores of intangible assets comprising ` 775 crores for the of film and
television programming content and ` 670 crores of other intangibles. At present, the film and
television programming content is amortised over a period of 10 years and the other intangible assets
are amortized over a period of 5 years. As the film and television programming content has not been
tested for impairment and the quantification of the future economic benefit to be derived from the use
of the other intangible is not determinable, we are unable to comment on the carrying value of such
intangible assets.
As at March 31, 2009 the Company had certain overdue debtors aggregating to ` 7.40 crores.
Management is of the opinion that these are fully recoverable and accordingly no adjustments have
xxiv
been made to the accompanying financial statements in respect of the same. In the absence of sufficient
evidence to demonstrate recoverability we are unable to comment on the recoverability of the same.
Fiscal 2010
No provision has been made for the diminution in the value of investments of ` 370.93 lakhs in a
wholly owned subsidiary and for the recoverability of advances including deposits to that subsidiary to
that subsidiary of ` 523.55 lakhs although the net worth of the subsidiary has eroded substantially.
Management is of the view that the diminution is not other than temporary and that the amounts are
fully recoverable. We are unable to comment on the carrying value of the investment or the recovery of
the advances. Our report on the financial statements for the year ended March 31, 2009 was also
modified in respect of the same matter.
As more fully discussed in note 5 on schedule 24 to the financial statements, gross block of intangible
assets include an aggregate amount of ` 144,500 lakhs, comprising of ` 77,500 lakhs for the purchase
of film and television programming content and ` 67,000 lakhs of other intangibles. At present, the film
and television programming content is amortized over a period of 10 years and the other intangible
assets are amortised over a period of 5 years. As the film and television programming content has not
been tested for impairment and the quantification of the future economic benefit to be derived from the
use of the other intangible is not determinable, we are unable to comment on the carrying value of such
intangible assets (net) of ` 80,727.08 lakhs. Our report on the financial statements for the year ended
March 31, 2009 was also modified in respect of the same matter.
As at March 31, 2010 the Company had certain overdue debtors aggregating to ` 1,182.49 lakhs net
Reserve for doubtful debts amounting to ` 10 lakhs shown under Reserves & Surplus. Management is
of the opinion that these are fully recoverable and accordingly no adjustments have been made to the
accompanying financial statements in respect of these debtors. In the absence of sufficient evidence to
demonstrate recoverability we are unable to comment on the recoverability of these debtors and
consequential effect on the financial statements. Our report on the financial statements for the year
ended March 31, 2009 was also modified in respect of the same matter.
The financial information of Eenadu, Prism and Panorama may be materially different from what is
disclosed in this Letter of Offer, if the impact of the above qualifications of the statutory auditors of UEPL
is given effect to.
21. Certain regulatory procedures/ actions have not been completed with respect to ETV Scheme of
Arrangement.
Pursuant to the ETV Scheme of Arrangement, the television division of UEPL was demerged into
Panorama, Prism and Eenadu. Panorama, Prism and Eenadu have filed necessary applications and
undertakings required under the Uplinking Guidelines with the MIB for transfer of the licenses of ETV
News Channels, ETV Non-Telugu Channels and ETV Telugu Channels, respectively from UEPL. An
application has also been made to MIB for transfer of teleport license from UEPL to Eenadu.
As of the date of this Letter of Offer MIB has not granted the approval for transfer, as they have contended
that Panorama, Prism and Eenadu do not meet the conditions laid down in paragraph 11 of the Uplinking
Guidelines issued on December 5, 2011 in terms of net worth. UEPL is currently in discussion with MIB to
clarify the net worth calculation as determined by MIB. As of date of this Letter of Offer, the transfer of
such licenses is pending. We cannot provide any assurance that such transfer of licenses from governmental
authorities would be obtained in timely manner, or at all. Any delay or non-receipt of necessary transfers
may make us unable to operate the ETV channels and have a material adverse effect on our business,
prospects, results of operations, expansion plans and financial condition.
22. The objects of the Issue include the utilization of the Issue Proceeds to repay one term loan facility from
ICICI Bank Limited, an associate of ICICI Securities Limited, one of the Lead Managers to this Issue.
The objects of this Issue include the utilization of the Issue Proceeds to repay our existing loans including
one term loan facility from ICICI Bank Limited, an associate of ICICI Securities Limited, one of the Lead
Managers to the Issue. We have entered into a term loan facility with ICICI Bank Limited for ` 3,000
xxv
million. This loan is for capital expenditure and repayment of fixed deposits. As on July 31, 2012, the
amount outstanding under this facility is ` 3,000 million. Since the proceeds of the Issue are being partly
used towards repayment of this loan, the amount towards such repayment to ICICI Bank Limited will not
be available for use in our business. For details of these loans, please see the chapter “Objects of the
Issue” on page 28 and “Financial Indebtedness” on page 279.
23. Conversion of the ZOCDs issued by the Subscribing Companies may result in change of control in our
Company. Such change in control may significantly influence our business, policies, and operations.
The Subscribing Companies each have a paid-up and issued share capital of ` 0.1 million comprising
10,000 equity shares of ` 10 each. The Subscribing Companies are currently controlled by Mr. Raghav
Bahl, who holds 9,500 equity shares in each. As per the ZOCD Investment Agreement, the Subscribing
Companies will issue such number of ZOCDs to IMT to enable them to subscribe to (i) their entitlement,
(ii) additional Equity Shares and (iii) unsubscribed Equity Shares in the Issue with the proceeds of the
ZOCDs. Each ZOCD of ` 100 each is convertible into 10 equity shares of the respective Subscribing
Company. These ZOCDs are also freely transferable. The holder of the ZOCDs has the option to convert all
or any of the ZOCDs into 10 equity shares (adjustable for the adjustment events provided in the ZOCD
Investment Agreement) for each ZOCD held, of the relevant Subscribing Company at any time within a
period of 10 years from the date of subscription of the ZOCDs by IMT. Further, the holder of the ZOCDs
has the option to require all or any of the Subscribing Companies to redeem some or all of the ZOCDs at
par at anytime within a period of 10 years from the date of subscription of the ZOCDs. The ZOCDs which
have neither been converted into equity shares nor redeemed shall be automatically redeemed at par upon
the expiry of 10 years from the date of subscription of the ZOCDs.
Since the capital base of the Subscribing Companies is relatively small, the issue and conversion of more
than 1,000 ZOCDs in each of the Subscribing Companies by IMT or, if transferred, the subsequent holders
of ZOCDs could result in change in control of the Subscribing Companies in favour of the holders of
ZOCDs.
As of the date of this Letter of Offer, the Subscribing Companies hold 36.90% of the paid-up equity share
capital of Network18. Hence, the Subscribing Companies will be entitled to subscribe to approximately
36.90% of the Rights Issue of Network18 and will hold a minimum of approximately 36.90% of the postIssue paid up equity share capital of Network18 after the Rights Issue of Network18. Moreover, the
Subscribing Companies have vide letter dated February 29, 2012, also undertaken to subscribe to the
unsubscribed portion of the Rights Issue of Network18 and this Issue. Therefore, by subscribing to their
entitlement and unsubscribed portion, if any, in the Rights Issue of Network18, the Subscribing Companies
will hold more than 36.90% of the post-issue paid up equity share capital of Network18. By way of an
example, subscribing to even 36.90% of the Rights Issue of Network18 would lead to a fund requirement of
` 9,963 million which would mean that a minimum of 99,630,000 ZOCDs would be collectively issued by
the Subscribing Companies to IMT. Therefore, if the ZOCD holder opts for conversion of such number of
ZOCDs, which results in the ZOCD holder holding more than 51% of the Subscribing Companies, it will
result in a change of control of the Subscribing Companies. Such change of control of the Subscribing
Companies may in turn result in a change of control of the Promoters of Network18, change of control in
Network18 and considering that the Network18 is already in control of us, the acquisition of control of the
Network18 by ZOCD holder as explained above may consequently result in change of control of our
Company also in favor of ZOCD holder, which may significantly influence our business, policies, and
operations.
24. The exercise of option by TV18 in terms of the Option Agreement for Anu Acquisition and Eenadu
Acquisition may require additional funding of approximately ` 14,450.1 million. Our inability to raise/
provide financing for the Anu Acquisition and Eenadu Acquisition may adversely affect our growth and
business operations.
Pursuant to the Option Agreement, we and our affiliates have an option of the Anu Acquisition, subject to
completion of the ETV Acquisition in terms of the SPA on or before March 31, 2013, for an aggregate
consideration of ` 9,300.1 million as adjusted for the net debt of Prism (“Prism Net Debt”). For further
details please refer chapter “Material Agreements Pertaining to ETV Acquisition” on page 62.
Completion of the Anu Acquisition will entitle us to indirectly acquire additional approximately 50%
Equity Securities of Prism.
xxvi
Pursuant to the Option Agreement, TV18 and its affiliates have an option of the Eenadu Acquisition,
subject to completion of ETV Acquisition in terms of the SPA on or before March 31, 2013, for an
aggregate consideration of ` 5,150 million as adjusted for the net debt of Eenadu (“Eenadu Net Debt”). For
further details see “Material Agreements Pertaining to ETV Acquisition” on page 62. Completion of
Eenadu Acquisition will entitle us to indirectly acquire additional approximately 24.50% Equity Securities
of Eenadu. We need to raise additional funds for completing the Anu Acquisition and Eenadu Acquisition.
We cannot assure you that we would be able to raise such additional funds within the stipulated timeframe
or at all.
If we are not able to exercise the option on or before March 31, 2013, we may not be able to acquire such
additional Equity Securities, which may in turn impact our ability to control, manage and operate the
affairs of Prism and Eenadu.
25. The statutory auditors of each of Panorama, Prism, and Eenadu had qualified their reports on financial
statements for the Fiscal 2011 and 2012.
The statutory auditors of Panorama, Prism, and Eenadu had qualified their examination reports on financial
statements for the Fiscal 2011 and 2012. Brief details of the area of qualifications are set forth below.
Eenadu
Fiscal 2011
1.
“Para 4: As more fully discussed in Note 6 on Schedule 20 to the financial statements, gross block of
intangible Assets comprise Rs 50,161 Lakhs for the purchase of film and programming content and Rs
43,142 Lakhs of other intangibles. At present, the film and programming content is amortized over a
period of 10 years and other intangible assets are amortized over a period of 5 years. The film and
programming content and other intangibles have not been tested for impairment and the
quantification of the future economic benefit to be derived from their use has also not been
determined and accordingly we are unable to comment on the aggregated carrying value of such
intangibles of Rs 38,516 Lakhs as at March 31, 2011.
2.
Para 5: As at March 31, 2011 the Company had certain overdue debtors aggregating to Rs. 406.03
Lakhs. Management is of the opinion that these are fully recoverable and accordingly no adjustments
have been made to the accompanying financial statements in respect of these debtors. In the absence
of sufficient evidence to demonstrate recoverability we are unable to comment on the recoverability of
these debtors.”
Fiscal 2012
1.
“Para 4: As more fully discussed in Additional Notes 29.4 to the financial statements, gross block of
quantification of the future economic benefit to be derived from their use has also not been determined
and accordingly we are unable to comment on the aggregated carrying value of such intangibles of
Rs24,872 Lakhs as at March 31, 2012.
2.
have been made to the accompanying financial statements in respect of these debtors. In the absence of
sufficient evidence to demonstrate recoverability we are unable to comment on the recoverability of
these debtors.”
Prism
Fiscal 2011
xxvii
1.
programming content and other intangibles have not been tested for impairment and the quantification
of the future economic benefit to be derived from their use has also not been determined and
accordingly we are unable to comment on the aggregated carrying value of such intangibles of Rs
20,144 Lakhs as at March 31, 2011.
2.
Para 5: As at March 31, 2011 the Company had certain overdue debtors aggregating to Rs. 1,180.17
these debtors.”
Fiscal 2012
1.
“Para 4 : As more fully discussed in Additional Notes 28.4 to the financial statements, gross block of
Rs12,966 Lakhs as at March 31, 2012.
2.
these debtors.”
Panorama
Fiscal 2011
1.
intangible Assets comprise Rs.119,000 thousands for the purchase of film and programming content
and Rs.103,680 thousands of other intangibles. At present, the film and programming content is
amortized over a period of 10 years and other intangible assets are amortized over a period of 5 years.
The film and programming content and other intangibles have not been tested for impairment and the
Rs.91,640 thousands as at March 31, 2011.
2.
Para 5; As at March 31, 2011 the Company had certain overdue debtors aggregating to Rs.36,616.37
thousands. Management is of the opinion that these are fully recoverable and accordingly no
adjustments have been made to the accompanying financial statements in respect of these debtors. In
the absence of sufficient evidence to demonstrate recoverability we are unable to comment on the
recoverability of these debtors.”
Fiscal 2012
1.
“Para 4: As more fully discussed in Additional Notes 29.4to the financial statements, gross block of
intangible Assets comprise Rs. 1190 Lakhs for the purchase of film and programming content and Rs.
1037 Lakhs of other intangibles. At present, the film and programming content is amortized over a
xxviii
programming content and other intangibles have not been tested for impairment and the quantification
of the future economic benefit to be derived from their use has also not been determined and
accordingly we are unable to comment on the aggregated carrying value of such intangibles of Rs.590
Lakhs as at March 31, 2012.
2.
these debtors.”
Such qualifications may make the financial statements of each of these companies less reliable than they
would be, had these companies previously addressed the concerns raised by the statutory auditors in a
satisfactory manner.
26. Substantial portion of the Equity Shares held by our Promoter and Promoter Group, are pledged in
favour of our lender and lenders of our Promoter and Promoter Group, who may exercise their rights
under the respective pledge agreements in events of defaults.
As on August 17, 2012, 145,163,368 Equity Shares comprising 40.09% of our pre-Issue equity share
capital, held by Network18, Network18 Group Senior Professional Welfare Trust, Ibn18 Trust, and Mr.
Raghav Bahl, our Promoter and Promoter Group entities are subject to pledge, as security towards loans
availed by us and some of our Promoter and Promoter Group entities from various lenders. In the event of
non-compliance with the terms of such lending agreements entered into by us and some of our Promoter
and Promoter Group entities with these lenders, they may invoke the pledge, which may result in dilution of
the holding of our Promoter and Promoter Group’s stake in us. Moreover, if the lenders sell the pledged
Equity Shares in the market or if there is a perception that any such sales may occur, it may adversely affect
the trading price of our Equity Shares. For further details please refer to the chapter “Capital Structure” on
page 18.
27. Our business involves risks of liability for television content and related risks, which could result in
significant costs.
We rely on editors, reporters and freelance journalists (known as stringers) as well as news wires and
agencies for news and other content with respect to our news channels. While we have established systems
and protocols to help ensure that articles and news reports are duly vetted by editors before they are
broadcast, posted or published, any failure in those systems and protocols may lead to the broadcasting,
posting or publishing of defamatory content or result in inaccurate reporting thereby exposing us and our
employees to litigation for libel or defamation charges. The courts may determine our news reports to be
based upon incorrect or insufficient data. Any adverse order in such litigation may affect our reputation
and correspondingly this may affect our results of operation.
In addition, popular reality shows broadcast by Viacom18’s channels involve, as part of the production
process, auditions for the general public. For popular reality shows, this could involve the gathering of
large crowds of people which exposes us to various safety and security risks, which could result in us
incurring significant costs. For example, in October 2008, the New Delhi auditions for the reality show
‘MTV Roadies’ had to be cancelled due to vandalism and unruly behavior by the gathered crowd.
Furthermore, certain shows broadcast on our news and entertainment channels may negatively impact
viewer perception regarding our channels. For instance, in July 2009, members of Parliament in the Lok
Sabha raised objections to Colors’ popular serial ‘Balika Vadhu’ alleging that the show glorifies child
marriage. Any negative publicity regarding our channels could result in reduced viewership which would
have a material adverse affect our business, financial condition and results of operations. We may also be
subject to censure and other penalties by the Ministry of Information and Broadcasting for broadcasting
content that may be perceived as objectionable/ inappropriate by the authorities or members of Indian civil
society. Even if such content is allowed to be aired, the authorities may impose restrictions on its
dissemination, including issuing directions to move such shows from the prime time slot, which may
adversely affect our business, financial condition and results of operations.
xxix
28. We have experienced negative cash flows in the recent past.
We have experienced negative cash flows in the recent past, the details of which, on a standalone basis, are
as follows:
Particulars
Net cash from/ (used in) operating activities
Net cash from/ (used in) investing activities
Net cash from/ (used in) financing activities
Net increase/(decrease) in cash And cash equivalents
Fiscal 2012
(``)
2,421,380,909
(2,217,455,684)
(576,258,764)
(372,333,539)
Fiscal 2011
(``)
(330,217,004)
(2,697,044,300)
1,596,807,107
(1,430,454,197)
The details of negative cash flows, on consolidated basis, are as follows:
Particulars
Net cash from/ (used in) investing activities
Net increase/(decrease) in cash and cash equivalents
Fiscal 2012
(``)
(667,186,207)
(168,654,784)
(619,272,895)
(1,455,113,886)
Fiscal 2011
(``)
(1,850,234,030)
(2,464,699,798)
3,679,636,635
(635,297,193)
Any negative cash flows in the future could adversely affect our results of operations and financial
condition. For further details, please refer to the chapter “Financial Statements” on page 74.
29. Subscription revenues for our channels are affected by the under-reporting of analog cable television
subscribers and our future revenue growth, to that extent, is dependent on the digitization of the Indian
cable television market, which we cannot directly control.
Currently, we primarily deliver our television channels through an analog delivery mechanism consisting
of multi-system operators and local cable operators that provide the “last mile” cable link to the homes of
our subscribers, and through direct-to-home and internet protocol television service providers. The analog
cable television market in India has historically been characterized by the under-reporting of subscribers by
local cable operators. Except for channels distributed in mandatory digital cable Conditional Access
System areas by direct-to-home service providers or by cable operators using digital set-top boxes,
subscription revenue for cable television pay channels is determined by negotiations with local cable
operators. As a result, under-reporting of subscribers by local cable operators affects the subscription
revenue from our channels. There is no assurance that this situation will change in the future and we may
continue to be subjected to the under-reporting of subscribers by local cable operators, which would
continue to adversely affect our revenues. Further, any dispute with multi-system operators or local cable
operators that distribute our channels or inability to negotiate favorable terms with them through IndiaCast,
or any other such arrangement could have an adverse effect on our market share, which may adversely
affect our results of operations.
We believe that the digitization of the Indian television industry will help to reduce the under-reporting of
subscribers by local cable operators and will enable us to further increase our subscription revenue. While
the shift from analog cable services to digital cable services is mandatory in limited areas, there can be no
assurance that the Indian digital cable television industry, including direct-to-home operators, will be able
to successfully convert analog cable subscribers to digital cable. Additionally, television viewers in India
are accustomed to receiving terrestrial broadcast television channels for free and analog cable transmission
at a relatively low monthly price and may not be willing to pay higher prices for digital television services.
If a significant proportion of analog cable subscribers do not convert to digital cable, our subscription
revenues may not increase in line with our estimates, which may limit our future revenue growth.
30. Infotel shall have preferential right over the content provided by Network 18 Group on first right basis.
We have entered into a Content License Agreement with Infotel, a subsidiary of Reliance Industries
Limited along with Network 18 for transmission of content through its 4G Broadband network. We have
agreed to provide Infotel preferential access to the content provided by us on a first right basis through any
network providing 2G, 3G and 4G access. The Content License Agreement does not preclude us from
xxx
licensing the content or providing the services to any third parties, including any network operator.
Further Infotel does not have such rights on an exclusive basis. However, such preferential right over our
content on first right basis may hinder our ability to enter into exclusive arrangements with a third party
network operator on more favourable terms including our ability to charge a premium for preferential
access to our content and thereby lose out any favourable business opportunities, which may have an
adverse impact on marketability / profitability of our content distribution through any network providing
2G, 3G and 4G access.
31. Our balance sheet includes large amounts of guarantees issued by us and public deposits. Our cash
flows may be insufficient to service our debt obligations and further, our high debt/ equity ratio may
impair our ability to obtain additional financing, ability to refinance our existing indebtedness on terms
favourable to us or at all and may subject us to the risk of fluctuating interest rates.
As of March 31, 2012, we had issued guarantees for a sum of ` 299.90 million and raised public deposits
amounting to ` 2,740.62 million. As of March 31, 2012 no inter-corporate deposits were outstanding. For
details relating to the public deposits, please refer to the chapter “Financial Indebtedness” on page 279.
As of March 31, 2012, our total debt on a standalone basis is ` 7,093.37 million while our total debt on a
consolidated basis is ` 9,666.50 million. One of the objects of our Issue is repayment of our long term and
short term debt for an aggregate of ` 4,216 million. For details please refer to the chapter “Objects of the
Issue” on page 28.
As of March 31, 2012, our long term debt/equity ratio is 0.43 on a consolidated basis and long term debt/
equity ratio is 0.25 on standalone basis. As of March 31, 2012, our total debt/equity ratio is 1.41 on a
consolidated basis and total debt/equity ratio is 0.91 on standalone basis.
Our debt/ equity ratio may impair our ability to obtain additional financing, ability to refinance our existing
indebtedness on terms favourable to us or at all and subject us to a number of risks associated with debt
financing, including the risk that cash flow from operations would be insufficient to meet required
payments of principal and interest; and to the extent that we maintain floating rate indebtedness,
fluctuating, interest rates may expose us to higher interest burden.
32. We face significant competition in the Indian broadcasting industry. Any failure to compete effectively
may have a material adverse effect on our business and operations.
We operate in highly competitive industries, and we expect that competition will continue to increase with
the entry of new companies in these various industries. In addition, many of our competitors have access to
considerable financial and technical resources with which they compete aggressively, including by funding
future growth and expansion and investing in acquisitions and content programming.
Our news channels, CNBC-TV18, CNBC Awaaz, CNBC TV18 Prime HD, CNN IBN, IBN7, and IBN
Lokmat, primarily competes with, amongst other channels, NDTV Profit, ET Now, Bloomberg UTV, Zee
Business, Times Now, NDTV 24X7, Aaj Tak, Star News, NDTV India, India TV, Zee News, Star Majha and
Zee 24 Taas. Colors and History TV18 primarily competes with, amongst other channels, Star Plus, Zee
TV, Sony Entertainment Television, Discovery, and Nat Geo. Our film business primarily competes with,
amongst other channels, UTV Motion Pictures, Eros and Reliance Big Pictures.
Our competitors may expend financial and other resources to improve their market share to compete more
aggressively. Our inability to compete adequately may have a material adverse effect on our business
prospects, financial condition and results of operations.
33. Majority of our investments are in our Subsidiaries and Joint Ventures that may involve a substantial
degree of risk. Most of our Subsidiaries and Joint Ventures have accumulated losses.
As of March 31, 2012, on a standalone basis, we have made an investment of approximately ` 11,130.54
million in our subsidiaries, joint ventures and group companies which amounts to almost 66.71% of our
standalone total assets, and is substantially larger than the investments of ` 61.49 million we have made
on a consolidated basis. The investments are in the form of equity shares and preference shares of our
subsidiaries and joint ventures. We have also invested in debentures of one of our subsidiaries. As at the
xxxi
year ended March 31, 2012, we had investments aggregating to ` 519.50 million in IBN Lokmat, `
346.56 million in RVT Media, ` 1,700.05 million in ibn18 (Mauritius) Limited and ` 8,564.43 million in
Viacom18, respectively. As at the year ended March 31, 2012, both Viacom18 and RVT Media had
accumulated losses and their net worth has been partially eroded. As at the year ended March 31, 2012,
the net worth of IBN Lokmat has been substantially eroded. While provisions have been made for
investment of ` 658.94 millions in ibn18 (Mauritius) Limited whose net worth had completely eroded as
on March 31, 2011, the investments in IBN Lokmat, RVT Media and Viacom18 have not been tested
against impairment since then.
Further, all our subsidiaries are loss making and/ or have accumulated losses and are in similar lines of
business. If the business and operation of our subsidiaries and joint ventures, in which we have major
investments, deteriorate further, the value of our investments may be adversely affected and we cannot
assure you that we would be able to recover all or any of these investments. Also, some of these
investments have not been tested against impairment. We cannot assure you that these Subsidiaries and
Joint Ventures will not incur losses or have negative net worth in future. In the event Subsidiaries and
Joint Ventures continue to be loss making and have negative net worth, it may result in significant losses
to our investments and thereby adversely affect our business and financial conditions.
34. Increases in programming costs or the inability to obtain popular programming could adversely affect
our operations, business or financial results.
Television programming costs represent a major component of our expenses, primarily due to the
increasing cost of obtaining desirable programming, particularly movie rights and reality programming.
Our television programming costs as a percentage of television revenues have increased in recent years and
will continue to increase in the coming years and increases in television programming costs may outpace
growth in television revenues. Furthermore, providers of desirable content may be unwilling to enter into
distribution arrangements on acceptable terms with us and owners of non-broadcast television
programming content may enter into exclusive distribution arrangements with our competitors. A failure to
carry programming that is attractive to our subscribers could adversely impact our viewership and result in
a decrease in our subscription and advertising revenues.
35. The channel ‘Colors’ does not produce any of its content and depends on others for its programming,
and programming costs are increasing.
We operate the television channel ‘Colors’ through our joint venture depends on third party suppliers for
its content. ‘Colors’ ability to compete successfully will depend on Viacom18’s ability to continue to
obtain desirable programming at competitive prices. Viacom18’s programming agreements generally have
terms that contain various renewal and cancellation provisions. Viacom18 may not be able to renew these
agreements on favourable terms, or at all. If a program has a high viewership and Viacom18 is unable to
renew the agreement to broadcast it, it could lead to a loss of viewership and a decrease in advertising
revenue.
36. The popularity and recognition of our brands and content is difficult to predict and any decrease in this
popularity of our brands and content could lead to fluctuations or a decline in our revenues.
Our success depends upon the popularity and recognition of our brands and our ability to deliver original
and compelling content and services that attract and retain viewers. Our ability to successfully develop and
produce popular content and services is subject to numerous uncertainties, including our ability to:

anticipate and successfully respond to rapidly changing consumer tastes and preferences, as well as
cater to varied audiences, including in terms of age groups, geography, cultural preferences and
backgrounds;
fund or source new content development efficiently;
attract and retain qualified anchors, correspondents, editors, producers, writers, and technical
personnel; and
successfully expand our content offerings into new platforms and delivery mechanisms.
Brand recognition is also critical to the success of our businesses. We have conducted, and will continue to
conduct, various marketing and brand promotion activities aimed at establishing, maintaining and
protecting our recognized brand names. We cannot assure you, however, that our activities will be
xxxii
effective in attracting and growing user and client bases for our businesses or that such efforts will be costeffective. If we fail to build and maintain our brand names, such as CNBC-TV18 and CNN IBN, or if we
incur excessive expenses in our efforts to do so, we may not be able to conduct our existing or new
businesses in a cost-effective manner and our business, financial condition and results of operations may
be materially and adversely affected.
37. We have applied for, but have not yet received, trademark registrations for some of our brand names.
Furthermore, misappropriation of our intellectual property rights could harm our competitive position.
We have submitted various trademark applications before the Registrar of Trade Mark under several
classes of the Trademark Act, 1999. We have 277 pending applications, which includes trademarks, under
several classes of the Trade Marks Act, 1999 and applications for change of ownership of trademarks,
which were originally filed/ registered in the name of erstwhile Television Eighteen and Jagran TV Private
Limited.
The registration of any trademark is a time-consuming process, and there can be no assurance that any such
registration will be granted. Our applications may not be allowed or our competitors may challenge the
validity or scope of our intellectual property. Changes to intellectual property law could also adversely
affect the intellectual property protection available to our programming, website and published content,
thereby reducing the value of such content. In particular, LCOs may occasionally try to use our television
signals as their own broadcasts and we may be required to take legal action to prevent such
misappropriation. There can be no assurance that infringement claims will not be asserted against us.
Further, since our trademarks are not registered we cannot prohibit other persons from using the same,
which may materially and adversely affect our goodwill and business. Further, until such time that we
receive registration for our trademarks, we can only seek relief against “passing off”. We cannot give any
assurance that third parties will not infringe upon our trademark, trade names, logos or brand names, or
that we will be able to adequately protect against any such infringement, and thereby cause damage to our
business prospects, reputation or goodwill.
38. Our businesses are heavily regulated and changes in regulations or failure to obtain required regulatory
approvals, licenses, registrations or permits to develop and operate our business or are unable to renew
them in a timely manner, or comply with applicable legislations, could materially and adversely affect
our business and our ability to operate.
We are subject to various regulatory requirements, which may restrict our ability to do business. The MIB
has issued the consolidated Guidelines for Uplinking from India, or the Uplinking Guidelines, requiring
companies to obtain licenses to uplink news channels from India, which gives the Government of India
broad discretion to influence the conduct of our businesses. The Government of India has the right to
modify, at any time, the terms and conditions of our licenses and take over our news channels or terminate
or suspend our licenses in the interests of national security or in the event of a national emergency, war or
similar situation. Further, in November 2005, the MIB formulated the Policy Guidelines for Downlinking
of Television Channels, or the Downlinking Guidelines, which were amended by the notification dated
December 5, 2011, for all channels downlinked, received or transmitted and re-transmitted in India for
public viewing. No person or entity is permitted to downlink a channel which has not been registered with
the MIB. The government may also impose certain penalties on us for failing to comply with these
regulations, including the suspension, revocation or termination of a license. Under the terms of our license
agreements with the MIB for setting up our teleports, the MIB may terminate such a license with 30 days’
notice in case of any breach by us of the terms of such licenses. Further, in case of such termination, we
cannot, directly or indirectly, apply for such license in the future. Our business could suffer if there are
adverse changes to the regulatory environment.
Pursuant to the Indian Cinematograph Act, 1952, Indian films must be certified by the Central Board for
Film Certification, which must consider factors such as the interest of sovereignty, integrity and security of
India, friendly relations with foreign states, public order and morality. There can be no assurance that we
will be able to obtain any of our desired certifications for each of our films in the future and we may have
to modify the title, content, characters, storylines, themes or concepts of a given film in order to obtain
such certifications or a desired certification that will facilitate distribution and exploitation of the film.
Further, the Cinematograph Rules, require a license to be obtained prior to storing any film, unless
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specifically exempted. In addition, we may require licenses or permits in relation to film shooting. Any
such modification could reduce the appeal of any affected film to our target audience and reduce our
revenues from that film, which could have a material adverse effect on our business, prospects, financial
condition and results of operations.
Further, certain Indian laws regulate the dissemination and publication of various categories of
information, and prescribe consequences for non-compliance including in relation to the advertisements
aired on our television channels.
We have obtained a number of required approvals for our operations. However, certain approvals in
relation to intellectual property right our logo “IBN7” is currently pending. Further, IBN Lokmat News
Private Limited has not applied for any trademark registrations. Viacom18 has not obtained certain
trademark registrations and have applied for trademark registrations for logo or names of their channels
and shows which are pending, among others.
The failure to maintain necessary licenses, approvals and permits and the introduction of new laws or
regulations pertaining to licensing requirements, access requirements, programming transmission,
uplinking and downlinking requirements, spectrum specifications, content restrictions and consumer
protection might further restrict our ability to operate and increase our reporting requirements, which may
adversely affect our results of operations.
39. We are dependent on production and broadcast equipment, communications equipment, satellites for
our broadcasting business. Technological failures could adversely affect our business.
We rely on sophisticated production and broadcast equipment, communications equipment and other
information technology to conduct our news and entertainment broadcasting business. We also use online
and automatic backup equipment to ensure continuous broadcasting of our television channels.
Although we have backup equipment to protect us in case our primary broadcasting systems fail, if we
were to experience significant damage to our primary and backup equipment or other technological
breakdowns to equipment or systems, it could disrupt our ability to produce or broadcast our programming.
Further, we uplink our broadcast mainly to one satellite, Intelsat 10. If this satellite ceases to be available
to us for any reason (including signal blockage by any third party), we would have to secure access to an
alternative satellite, and we cannot assure you that such access would be available on equally favorable
terms or at all or the time frame within which such access would be available. Further, if we move to an
alternative satellite, each cable or direct-to-home operator that receives our signal for distribution will need
to make arrangements for downlinking from this alternative satellite. Though we do maintain insurance,
inadequacy of such insurance for our assets and loss of profits, any equipment or technological failure or
damage that results in a disruption of our programs could have a material adverse effect on our business,
financial condition and results of operations.
40. Our statutory auditors had made certain qualifications / observations in their report on our financial
statements for the Fiscal 2012.
We have made an investment of ` 519.50 million in IBN Lokmat as on March 31, 2012. As at March 31,
2012, IBN Lokmat has significant accumulated losses and its net worth has been substantially eroded.
Further, we have not made any provision towards diminution in the value of the total investment in IBN
Lokmat. Further, we had also invited public deposits under section 58A of the Companies Act.
Accordingly, our statutory auditors had made the following qualification / observation in our financial
statements for the Fiscal 2012 on page 74, respectively.
“Attention is invited to Note 27(b) of the financial statements regarding the carrying value of certain
long term investments aggregating to ` 519.50 million. Management is of the view that, having regard
to the long term strategic involvement, no provision is considered necessary for ‘other than temporary
diminution’ in the value of these investments. In the absence of supporting documentation in respect of
the appropriateness of the carrying value of such long term investments, in accordance with
requirements of Accounting Standard 13(AS-13) Accounting for Investments, we are unable to
comment whether the diminution in the value of these long term investments is ‘other than
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temporary’.”
In our opinion and according to the information and explanations given to us, the Company has
complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public, except for updating details of depositors in the Register of Deposits
in respect of public deposits aggregating to ` 14.51 million (required to be maintained in terms of
Section 58A of the Companies Act, 1956) pending receipt of application forms. According to the
information and explanations given to us, no order has been passed by the Company Law Board or the
National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
Such qualifications / observations may make our financial statements less reliable than they would be
had the concerns raised by our statutory auditors been previously addressed in a satisfactory manner.
41. Grants of stock options under our employee stock option plans will result in a charge to our profit and
loss account and our results of operations will be negatively affected to that extent.
We have an employee stock option plan, ESOP 2007, under which eligible employees and Directors/
directors of our holding company/ Subsidiaries can participate. As on June 30, 2012 and August 22, 2012,
7,231,849 options have been granted, against which 3,806,796 options (including 2,052,340 options vested
but not yet exercised) are outstanding. Our Remuneration/ Compensation committee shall, in accordance
with the SEBI ESOP Guidelines, formulate the procedure, terms and conditions for making a fair and
reasonable adjustment to the number and price of options. Under Indian GAAP, the grant of stock options
will result in a charge to our profit and loss account based on the difference between the fair value of
shares determined at the date of grant and the exercise price which may adversely affect our results of
operations.
42. Acquisitions and investments could result in operating difficulties, dilution and other harmful
consequences that may adversely impact our business and results of operations.
We intend to evaluate potential acquisitions of companies that operate in the media and entertainment
industry, whose resources, capabilities and strategic plans are complementary to our business operations.
These transactions could be material to our financial condition and results of operations. We also expect to
continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions.
The process of integrating an acquired company, business or technology has created, and will continue to
create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

diversion of management time and focus from operating our business to acquisition integration
challenges;
implementation or remediation of controls, procedures, and policies at the acquired company;
integration of the acquired company’s accounting, human resources and other administrative
systems, and coordination of product, engineering, sales and marketing functions;
transition of operations, users and customers onto our existing platforms;
cultural challenges associated with integrating employees from the acquired company into our
organization, and retention of employees from the businesses we acquire;
liability for activities of the acquired company before the acquisition, including patent and trademark
infringement claims, violations of laws, commercial disputes, tax liabilities and other known and
unknown liabilities;
litigation or other claims in connection with the acquired company, including claims from terminated
employees, customers, former stockholders or other third parties;
failure to successfully further develop any acquired technology; and
failure to obtain required approvals from governmental authorities on a timely basis, if it all, which
could, among other things, delay or prevent us from completing a transaction, or otherwise restrict
our ability to realize the expected financial or strategic goals of an acquisition.
Our failure to address these risks or other problems encountered in connection with our past or future
acquisitions and investments could cause us to incur unanticipated liabilities and harm our business and
results of operations. The anticipated benefit of many of our acquisitions may not materialize or we may
acquire a business that is unsuitable for our current operations. Further, if we acquire a start-up company,
we may endure an extended period of losses before such a company achieves profitability.
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Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt,
contingent liabilities, amortization expenses or write-offs of goodwill, any of which could harm our
financial condition.
43. The seasonal nature of advertisement trends and the occurrence of non-annual events may cause our
income from operations to fluctuate significantly each quarter.
Advertisement trends are seasonal in nature based on overall economic conditions and buying patterns. For
instance, our advertising sales are generally higher in the second half of our Fiscal Year because of the
higher level of advertising during the holiday season and during announcements of the Union budget in
India. Our advertising sales are also affected by independent or recurring non-annual events, such as the
ICC Cricket World Cup and Indian Parliamentary elections. These factors may cause our income from
operations to vary substantially by quarter, which will result in significant fluctuations in our quarterly
results.
44. We do not own our registered office or other premises from which we operate.
We do not own the premises on which our Registered Office and other offices, including our production
and uplinking facilities in Noida. We operate from leased premises. The lease for our Registered Office
(which has been taken on lease by Network18 and we have been permitted to share the premises by
Network18. A no-objection certificate has been taken from the lessor of the premises dated May 11, 2011
for joint use) and the lease for our production and uplinking facility in Noida and our uplinking facility in
Mumbai expire on March 19, 2013 and May 4, 2013, respectively. If any of the owners of these premises
do not renew the agreements under which we occupy the premises or renew such agreements on terms and
conditions unfavourable to us, we may suffer a disruption in our operations. Please refer to the chapter
“Business” on page 52.
45. Our business and results of operations could be adversely affected by global economic conditions.
Consumer spending on discretionary items and general entertainment generally decline during recessionary
periods and other periods in which disposable income is adversely affected. As a substantial portion of
media and entertainment expenditure is discretionary, the industry tends to experience weak or reduced
demand during economic downturns.
In the second half of calendar year 2011, there was a rapid deterioration of global economic conditions,
including economic conditions in India, which impacted our business. The recovery of the global economic
condition remains uncertain and there is no assurance of recovery of the media and entertainment industry.
Recently, the global economy has faced volatility in the financial markets, concerns about the Standard &
Poor’s downgrade of the United States’ credit rating, the European debt crisis and fears of a new recession
in Europe and US, which together could negatively impact our business. The global macroeconomic
downturn and economic uncertainty may negatively impact both corporate and consumer spending patterns
and demand for our television channels and programs, digital and mobile properties, publications and other
services and products.
As a media and entertainment company, a significant portion of our revenue is affected by the rates we can
charge advertisers and the size of our subscription base. During periods of poor economic conditions,
companies tend to reduce their advertising spending, thereby reducing our advertising-based revenue. A
slowdown in economic conditions may also result in a decrease in subscriptions to our television channels,
which will adversely affect our subscription revenue. It is difficult to predict the effects of the current
global economic uncertainty, but if economic conditions worsen globally or in India, our growth plans,
business, financial condition and results of operations could be adversely impacted.
46. Our ability to pay dividends in the future will depend upon our future earnings, financial condition,
cash flows, working capital requirements, capital expenditures and restrictive covenants in our
financing arrangements.
Our future ability to pay dividends will depend on the earnings, financial condition and our capital
requirements and compliance with our financing arrangements. Dividends distributed by us will attract
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dividend distribution tax at rates applicable from time to time. We cannot assure you that we will generate
sufficient income to cover our operating expenses and pay dividends to our shareholders, or at all. Our
ability to pay dividends could also be restricted under certain financing arrangements that we have entered
into or may enter into in the future. In addition, dividends that we have paid in the past may not be
reflective of the dividends that we may pay in a future period. We may be unable to pay dividends in the
near or medium term, and our future dividend policy will depend on our capital requirements, financing
arrangements, results of operations and financial condition.
47. Our success depends substantially on our senior management and other skilled personnel, and we may
be adversely affected if we lose their services and fail to find equally skilled replacements.
Our success depends largely on the efforts, expertise and abilities of our senior management, as well as
other skilled personnel, including creative and programming personnel. Our senior management, some of
whom have been with us since our inception, are especially important to our business because of their
experience and knowledge of the media industry both in India and internationally. In particular, our
success depends upon the continued efforts of Mr. Raghav Bahl, our Promoter Director and the managing
director of Network18, who has over 24 years of experience in the media and entertainment industries.
Further, our employment agreements with these key personnel do not obligate them to work for us for any
specified period, and do not contain non-compete or non-solicitation clauses in the event of termination of
employment. If one or more of our key personnel are unwilling or unable to continue in their present
positions, we may not be able to replace them with persons of comparable skill and expertise promptly or
at all, which could have a material adverse effect on our business, operations and financial results. We do
not maintain key-man insurance for any of our key personnel.
The labor market for skilled employees is extremely competitive, and the process of hiring employees with
the necessary skills is time consuming and requires the diversion of significant resources. We may not be
able to retain existing personnel or identify, hire and successfully integrate additional qualified personnel
in the future. The loss of the services of key personnel or the inability to attract additional or replacement
qualified personnel, could impair the growth of our business.
48. Increases in carriage and placement costs could adversely affect our operations, business and financial
results.
Historically, television networks in India have paid substantial carriage fees to obtain the right to air a
channel on a distribution network and additional placement fees paid based on the channel’s band
frequency placement, to multi-system operators and local cable operators to ensure proper distribution of
their channels. With limited bandwidth available to cable operators, these fees have sharply increased over
the years. The number of new channels is growing and therefore carriage and placement fees may continue
to increase. If carriage and placement fees continue to increase, this could adversely affect our operations,
business and financial results.
Further, digitisation of cable television in India is being delayed as a result of which substantial reliance is
places on multi-system operators and local cable operators for proper distribution of our channels. Any
further delay in implementation of digitisation of cable television in India, would result in high outflow of
carriage and placement fee and continue to affect our operations, business and financial results
49. We face competition for talent, which may increase our compensation costs.
We expect that our marketing and human resources costs may increase on account of competition for
talent. Our success depends in part on our ability to attract and retain popular artists and journalists who
have strong viewership ratings and devoted fan followings. However, due to intense competition for
artistic talent among television channels, the compensation paid to such artists has increased in recent
years, with no assurance that such compensation will translate into higher ratings or revenues in a
sustainable manner or at all. Further, our competitors may expend greater financial and other resources to
attract talent and improve their market share. Our inability to adequately compete may have a material
adverse effect on our business prospects, financial condition and results of operations.
50. If our employees unionize we may be subject to industrial unrest, slowdowns and increased wage costs.
xxxvii
None of our employees belong to a company specific trade union. While we believe our relationship with
our employees is generally good, we cannot guarantee that we will not experience any strike, work
stoppage or other such industrial action in the future. Any employee or labour related event could disrupt
our operations, possibly for a significant period of time, result in increased wages and other costs and
otherwise have a material adverse effect on our business, results of operations or financial condition.
51. We have entered into related party transactions aggregating to ` 14,359.90 million for Fiscal 2012, and
expect to continue to enter into such related party transactions.
We have entered into transactions with related parties that include our principal shareholders and entities
affiliated with our principal shareholders for an amount aggregating to `14,359.90 million for the Fiscal
2012. While we believe that all such transactions have been conducted on an arm’s length basis, there can
be no assurance that we could not have achieved more favourable terms had such transactions been entered
into with un-related parties. Furthermore, it is likely that we may enter into related party transactions in the
future. There can be no assurance that such transactions, individually or in the aggregate, will not have an
adverse effect on our financial condition and results of operations. Please refer to “Related party
transactions during the year ending March 31, 2012” under chapter “Financial Statements” on page 74 for
additional information on our related party transactions.
52. We engage in foreign currency transactions, which expose us to fluctuations in foreign exchange rates.
Any depreciation to Rupee against foreign currencies may have an adverse effect on our results of
operations.
From time to time we sell advertising time to foreign advertisers, the payment terms to which are
denominated in US dollars. To the extent the Rupee appreciates against the US dollars, we will receive less
Rupees when we convert the US dollar payments to Rupees.
Our minimum royalty payable to CNN is calculated in US dollars and payable in US dollars. Royalty
liabilities are calculated quarterly. If the royalty payable is the minimum payable, the amount payable in
US dollars is converted on our statement of assets and liabilities into Rupees at the prevailing exchange
rate. We are exposed to the risk of the Rupee depreciating against the US dollar between the balance sheet
date and the date of payment. In addition, there is one time fixed royalty payable to CNN after three years
from date of the agreement, which became payable beginning in 2009. We have recorded the amounts due
for the fixed payments as at each balance sheet date based on the prevailing exchange rate. To the extent
that the Rupee depreciates/ appreciates against the US dollar compared with the prevailing exchange rate at
each balance sheet date, we will need to restate the liability to reflect the change. To the extent that the
Rupee depreciates/ appreciates against the US dollar compared with the prevailing exchange rate at each
balance sheet date, we will need to restate the liability to reflect the change.
53. Our financial statements could be materially affected if actual results differ significantly from our
management’s estimates and judgments.
The preparation of our financial statements requires us to make estimates and judgments that affect the
reported amounts of our assets, liabilities, revenues and expenses, and related disclosure of our contingent
assets and liabilities. We continually evaluate these estimates and judgment based on our own historical
experience, knowledge and assessment of current business and other conditions, our expectations regarding
the future based on available information, and reasonable assumptions, which together form our basis for
making judgments about matters that, are not readily apparent from other sources. If actual results differ
significantly from our management’s estimates and judgments, there could be a material effect on our
financial statements and we may be required to make adjustments in future financial statements.
External Risk Factors
54. Political instability or changes in the Government could adversely affect economic conditions in India
and consequently, our business.
The Government has traditionally exercised and continues to exercise a significant influence over many
aspects of the economy. Since 1991, successive governments have pursued policies of economic and
financial sector liberalisation and deregulation and encouraged infrastructure projects. The new
xxxviii
Government, which came to power in May 2009, is headed by the Indian National Congress and is a
coalition of several political parties. Although the previous Governments had announced policies and taken
initiatives that supported the economic liberalisation programme pursued by previous governments, the
policies of the subsequent Governments may change the pace of economic liberalisation.
Changes in exchange rates and controls, interest rates, Government policies, taxation, social and ethnic
instability and other political and economic developments in and affecting India may have an adverse effect
on our results of operations.
India has a mixed economy with a large public sector and an extensively regulated private sector. The role
of the Government of India and that of the state governments in the Indian economy and their effect on
producers, consumers, service providers and regulators has remained significant over the years. Both state
and central governments have, in the past, among other things, imposed controls on the prices of a broad
range of goods and services, restricted the ability of businesses to expand existing capacity and reduce the
number of their employees and determined the allocation to businesses of raw materials and foreign
exchange. Since 1991, successive Governments have pursued policies of economic liberalisation, including
significantly relaxing restrictions in the private sector. Nevertheless, the role of the Government of India
and state governments in the Indian economy as producers, consumers and regulators has remained
significant. The current coalition-led Government came into power in May 2009. There can be no
assurance that the Government’s past liberalisation policies or political stability will continue in the future.
Elimination or substantial change of such policies or the introduction of policies that negatively affect the
television and broadcasting industry could have an adverse effect on our business. Any significant change
in India’s economic liberalisation and deregulation policies could disrupt business and economic conditions
in India generally and our business in particular.
55. Any downgrading of India’s sovereign debt rating or a decline in India’s foreign exchange reserves may
adversely affect our ability to raise additional debt financing.
Any adverse revisions by international rating agencies to the credit ratings of the Indian national
government’s sovereign domestic and international debt may adversely affect our ability to raise additional
financing by resulting in a change in the interest rates and other commercial terms at which we may obtain
additional financing. This could have a material adverse effect on our capital expenditure plans, business
and financial performance. A downgrading of the Indian national government’s debt rating may occur, for
example, upon a change of government tax or fiscal policy outside our control.
56. Currency exchange rate fluctuations may affect the value of the Equity Shares.
The exchange rate between the Indian Rupee and other foreign currencies, including the U.S. Dollar, the
British Pound, the Euro, the Hong Kong Dollar, the Singapore Dollar and the Japanese Yen, has changed
substantially in recent years and may fluctuate substantially in the future. Fluctuations in the exchange rate
between the foreign currencies with which an investor may have purchased Indian Rupees may affect the
value of the investment in our Equity Shares. Specifically, if there is a change in relative value of the Indian
Rupee to a foreign currency, each of the following values will also be affected:

the foreign currency equivalent of the Indian Rupee trading price of our Equity Shares in India;

the foreign currency equivalent of the proceeds that you would receive upon the sale in India of any of
our Equity Shares; and

the foreign currency equivalent of cash dividends, if any, on our Equity Shares, which will be paid only
in Indian Rupees.
57. Terrorist attacks, communal disturbances, civil unrest and other acts of violence or war involving India
and other countries may adversely affect the financial markets and our business.
Terrorist attacks and other acts of violence or war may adversely affect the Indian financial markets, on
which our Equity Shares are listed and traded, and may also adversely affect the worldwide financial
markets. These acts may also result in a loss of business confidence, and adversely affect our business. In
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addition, any deterioration in relations between India and its neighbouring countries might result in investor
concern about stability in the region, which may adversely affect the price of our Equity Shares.
India has also witnessed civil unrest, including communal disturbances, in recent years and future civil
unrest, as well as other adverse social, economic and political events in India, may have a negative impact
on our business and results of operations. Such incidents may also create a greater perception that
investment in Indian companies involves a higher degree of risk and may have an adverse impact on our
business and the price of our Equity Shares.
58. Future issues or sales of our Equity Shares may significantly affect the trading price of our Equity
Shares and dilute your shareholding.
A future issue of Equity Shares by us or the disposal of Equity Shares by any of our significant
shareholders, or the perception that such issues or sales will occur, may significantly affect the trading price
of our Equity Shares. In addition, we have adopted certain ESOPs for our employees, pursuant to which we
have allocated options to certain of our employees for our Equity Shares. You will experience dilution upon
the issue and allotment of additional Equity Shares upon the conversion of these instruments. There are no
restrictions on our ability to issue further Equity Shares, including any securities to the Promoter and
Promoter Group, other than (i) the agreements to be entered into by certain of our shareholders to not offer,
pledge, sell, contract to sell, purchase any option or contract to sell, grant or sell any option, right, contract
or warrant to purchase, lend, make any short sale or otherwise transfer or dispose of any Equity Shares for a
certain period of time as a result of this Issue, or (ii) any regulatory consent that may be required under
applicable law, and there can be no assurance that we will not issue further Equity Shares in the future. The
issue or sale of a large number of our Equity Shares by us or any of our significant shareholders, or the
perception that such issues or sales may occur, could adversely affect the market price of our Equity
Shares.
Any future equity issuances by us, including a primary offering, may lead to the dilution of investors’
shareholdings in us. Any future equity issuances by us, or sales of our Equity Shares by our Promoter and
Promoter Group or other major shareholders, may adversely affect the trading price of our Equity Shares,
which may lead to other adverse consequences for us, including difficulty in raising debt. In addition, any
perception by investors that such issuances or sales might occur may also affect the trading price of our
Equity Shares.
59. Restrictions on foreign investment in the sector in which we operate, limits our ability to raise capital
outside of India.
Foreign investment in the Indian broadcasting industry, especially the business and general news genres in
which we operate, is subject to significant government regulation. For instance, the largest Indian
shareholder is required to hold 51% of our total paid up equity share capital in accordance with the
Uplinking Guidelines, and the Consolidated FDI Policy of the Government of India.
Further, pursuant to the Consolidated FDI Policy of the Government of India, foreign investment in
companies operating news and current affairs channels is permitted up to only 26% with prior approval
from the Foreign Investment Promotion Board of the Government of India.
These regulations limit our ability to seek and obtain additional equity investments from foreign investors,
which may adversely affect our ability to raise capital, ascertain the value of our listed equity shares and
expand our business.
60. An active market for our Equity Shares may not be sustained, which may cause the price of our Equity
Shares to fall.
While our Equity Shares are traded on the Stock Exchanges, there can be no assurance regarding the
continuity of the existing active or liquid market for our Equity Shares, the ability of investors to sell their
Equity Shares or the prices at which investors may be able to sell their Equity Shares. In addition, more
recently the Indian markets have been subject to disruptions that have caused volatility in the prices of
securities similar to our Equity Shares. There can be no assurance that the market for the Equity Shares
offered hereunder will not be subject to similar disruption. Any disruption in these markets may have an
xl
adverse effect on the market price of our Equity Shares.
61. We conduct business activities with countries that are subject to sanctions administered or enforced by
the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”). Our business activities
with these countries (“OFAC Countries”) may subject us to business and reputational harm and
adversely affect our ability to raise money in international capital markets.
One of our joint ventures, Viacom18, licenses the distribution of the programming channel “Colors” to a
third party, which can make the channel “Colors” available in a number of countries, including Iran, Syria,
and Sudan, which are OFAC Countries. One of our affiliates has licensed the distribution of theatrical
releases to a party in Iran as well as parties in India for distribution in Iran. The OFAC sanctions apply to
certain transactions from the United States or activities by a U.S. Person. For purposes of interpreting the
sanctions, a “U.S. Person” means any US citizen, any US permanent resident alien, any entity organized
under the laws of the United States, or any person in the United States. We are not a U.S. Person for
purposes of the OFAC sanctions, and are not subject to the sanctions with respect to our activities outside
of the United States. In addition, we believe that transactions relating to the provision of television
programming and theatrical releases to OFAC Countries are exempt transactions under the OFAC
sanctions. Nevertheless, we cannot assure you that OFAC would agree with our belief. If the OFAC
sanctions were to expand further either in severity or in terms of the range of countries applying them, it
could have an adverse impact on our ability to conduct business in or with any of these countries. In
addition, as a result of our business activities with OFAC Countries, we may be subject to negative media
or investor attention, which may distract management, consume internal resources and affect certain
international investors’ perceptions about us. Also, due to our business activities in OFAC countries, there
may be reluctance on the part of some entities to conduct business with us. Also due to our business
activities in OFAC countries there may be reluctance on the part of some entities to conduct business with
us. In addition, if we were to increase our business in or with any OFAC Country, particularly relative to
our total business, this could have a negative impact on our ability to raise money in international capital
markets and on the international marketability of our securities and may affect our business.
PROMINENT NOTES
1.
Issue of 1,349,577,882 Equity Shares at a premium of ` 18 per Equity Share for an amount of ` 26,991.56
million on a rights basis to the existing Equity Shareholders in the ratio of 41 Equity Share(s) for every 11
fully paid-up Equity Share(s) held by the existing Equity Shareholders on the Record Date. The Issue price
is 10 times the face value of the Equity Shares.
2.
As on March 31, 2012, our net worth on a consolidated basis was ` 6,744.51 million (excluding revaluation
reserves), and on standalone basis was ` 7,662.85 million (excluding revaluation reserves) as described in
the section “Financial Information” on page 74.
3.
For details of our transactions with the related parties during the preceding financial year, i.e., Fiscal 2012,
the nature of transactions and the cumulative value of transactions, please refer to the chapter “Financial
Statements” on page 74.
4.
There has been no financing arrangement whereby the Promoter Group, the Directors and their relatives
have financed the purchase by any other person of our securities other than in the normal course of business
of the financing entity during the period of six months immediately preceding the date of filing of the Draft
Letter of Offer with SEBI.
xli
SECTION III – INTRODUCTION
SUMMARY OF THE ISSUE
The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in
its entirety by, more detailed information in the chapter “Terms of the Issue” on page 314.
Equity Shares offered in this Issue
Rights Entitlement
1,349,577,882 Equity Shares
41 Equity Share(s) for every 11 fully paid-up Equity
Share(s) held on the Record Date.
September 17, 2012
Record Date
Face Value per Equity Share
`2
` 20
362,081,871 Equity Shares
1,711,659,753 Equity Shares
Issue Price per Equity Share
Equity Shares outstanding prior to the Issue
Equity Shares outstanding after the Issue (assuming
full subscription and Allotment of the Rights
Entitlement)
Terms of the Issue
For more information, please refer to the chapter “Terms
of the Issue” on page 314.
Use of Issue Proceeds
For further information, please refer to the chapter
“Objects of the Issue” on page 28.
Terms of Payment
Due Date
On the Issue application (i.e. alongwith the CAF)
Amount
` 20, which constitutes 100% of the Issue Price payable
Note on Outstanding Instruments
Employee Stock Options
As on June 30, 2012 and August 22, 2012, 7,231,849 options have been granted under ESOP 2007, against
which 3,806,796 options (including 2,052,340 options vested but not yet exercised) are outstanding. Our
Remuneration/ Compensation committee shall, in accordance with the SEBI ESOP Guidelines, formulate the
procedure, terms and conditions for making a fair and reasonable adjustment to the number and price of options.
Our Remuneration/ Compensation committee shall, in accordance with the SEBI ESOP Guidelines, formulate
the procedure, terms and conditions for making a fair and reasonable adjustment to the number and price of
options.
1
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial information derived from our audited consolidated and
audited standalone financial statements as on and for Fiscal 2012 prepared in accordance with Indian GAAP and
the Companies Act and the limited reviewed financial results for the quarter ended June 30, 2012, prepared in
accordance with Indian GAAP.
Pursuant to the Scheme of Arrangement, the business news undertaking of Television Eighteen has been merged
with us. Consequently, comparison of the financial statements for Fiscal 2012 and limited reviewed financial
results for the quarter ended June 30, 2012 with the corresponding period in the previous years would not
provide a meaningful basis for evaluation.
Our summary financial information presented below, is in Rupees/ Rupees Million and should be read in
conjunction with the financial statements and the notes (including the significant accounting principles) thereto
included in the chapter “Financial Statements” on page 74.
2
STANDALONE BALANCE SHEET AS AT MARCH 31, 2012
As at
31.03.2012
(Rupees)
EQUITY AND LIABILITIES
1. Shareholders’ funds
(a) Share capital
(b) Reserves and surplus
2.
3.
Non-current liabilities
(a) Long-term borrowings
(b) Other long-term liabilities
(c) Long-term provisions
Current liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
Total
ASSETS
1. Non - current assets
(a) Fixed assets
(i)
Tangible assets
(ii)
Intangible assets
(iii) Capital work-in-progress
(b)
(c)
(d)
2.
Non-current investments
Long-term loans and advances
Other non-current assets
Current assets
(a) Inventories
(b) Trade receivables
(c) Cash and cash equivalents
(d) Short-term loans and advances
(e) Other current assets
Total
3
As at
31.03.2011
(Rupees)
724,188,260
7,049,936,019
7,774,124,279
475,629,098
6,418,980,734
6,894,609,832
1,931,390,594
42,938,936
120,215,586
2,094,545,116
570,736,106
15,952,942
62,517,925
649,206,973
4,483,979,517
1,149,747,203
1,178,471,288
3,991,450
6,816,189,458
16,684,858,853
1,866,723,379
355,811,342
701,852,993
2,771,437
2,927,159,151
10,470,975,956
1,237,322,343
37,682,005
2,784,699
1,277,789,047
10,508,086,057
406,520,975
167,731,286
12,360,127,365
651,293,564
13,104,939
3,188,550
667,587,053
7,184,924,111
147,818,755
826,937,737
8,827,267,656
380,464
2,537,212,346
312,197,687
1,301,450,321
173,490,670
4,324,731,488
16,684,858,853
509,602
963,167,574
452,536,408
200,527,696
26,967,020
1,643,708,300
10,470,975,956
STANDALONE STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2012
Notes
Reference
1.
2.
3.
4.
5.
6.
7.
8.
Year ended
31.03.2012
Year ended
31.03.2011
(Rupees)
6,206,997,147
666,527,306
(Rupees)
2,526,484,260
95,139,418
Total Revenue
Expenses:
(a)
Employee benefits expenses
6,873,524,453
2,621,623,678
1,541,043,748
805,327,884
(b)
(c)
(d)
853,963,366
244,597,989
4,112,751,786
400,785,886
116,854,570
1,791,152,482
Total Expenses
Profit / (Loss) before tax (3 -4)
Tax expense
Less: Income tax adjustments of prior years (net)
6,752,356,889
121,167,564
3,114,120,822
(492,497,144)
28,742,605
-
Profit / (Loss) for the year (5 -6)
Earnings/ (loss) per equity share (See note 28)
(Face value of Rupees 2 each)
(a) Basic
(b) Diluted
92,424,959
(492,497,144)
0.19
0.19
(2.20)
(2.20)
Revenue from operations
Other income
Finance costs
Depreciation and amortization expenses
Other expenses
4
STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2012
Year ended
31.03.2012
(Rupees)
A.
B.
C.
CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for :
- Depreciation
- Loss on fixed assets sold / scrapped / written off
- Employee stock compensation expenses
- Finance Cost
- Net gain on foreign currency transaction and translation
- Net profit on sale of long term investments in others
- Net profit on sale of current investments
- Liabilities / provisions no longer required written back
- Interest income
- Dividend on long term investments
- Income from ibn18 trust on sale of shares
- Bad debts and Provision for doubtful trade and other
receivable, loans and advances (net)
Operating profit before working capital changes
Changes in working capital:
Adjustments for (increase) / decrease in operating assets:
Inventories
Trade receivables
Short-term loans and advances
Other current assets
Adjustments for increase / (decrease) in operating liabilities:
Trade payables
Other current liabilities
Other long-term liabilities
Long-term provisions
Short-term provisions
Increase / (Decrease) in current and non-current liabilities
Cash generated from/ (used in) operations
Tax paid
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of fixed assets
Sale of assets/claim received
Investments purchased
- in subsidary / affiliates (including share application money)
Investments sold
- in subsidary / affiliates
- in mutual funds and others (net)
Interest received
Dividend on long term investments
Income from ibn18 trust on sale of shares
Net cash used in investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Finance cost paid
Rights issue and merger / demerger expenses
Share application money refunded
Proceeds from issue of equity shares (net)
5
Year ended
31.03.2011
(Rupees)
121,167,564
(492,497,144)
244,597,989
32,169,212
4,949,921
853,963,366
(10,622,000)
(267,191,164)
(12,083,395)
(42,721,698)
(144,148,375)
(125,100)
(189,100,000)
225,588,240
116,854,570
627,069
4,527,283
400,785,886
(16,518,159)
(67,071,743)
(10,349,866)
22,100,000
816,444,560
(41,542,104)
4,001,471
(119,994,897)
2,138,162,205
(114,949,111)
(18,672,376)
(7,093,549)
300,543
(231,496,426)
827,106
24,133,231
(8,424,969)
216,559,300
(400,256,161)
7,213,894
1,220,013
2,522,635,349
(101,254,440)
2,421,380,909
(124,403,511)
(24,619,446)
2,771,437
16,150,467
(386,303,672)
56,086,668
(330,217,004)
(199,484,127)
9,834,183
(36,286,137)
3,874,578
(2,623,224,972)
(2,746,132,600)
269,040,000
12,083,395
125,070,737
125,100
189,100,000
(2,217,455,684)
(2,697,044,300)
(794,786,027)
(111,276,733)
18,224,727
(346,001,112)
(23,458,247)
(52,553,515)
3,495,902,288
16,518,159
64,981,700
-
Increase / (Decrease) in long-term borrowings
Increase / (Decrease) in short-term borrowings
Increase / (Decrease) in current maturities of long-term debt
Net increase/ (decrease) in cash and cash equivalents
Cash and cash equivalents as at the beginning of the year
Cash and cash equivalents acquired on merger
Cash and cash equivalents as at the end of the year
Year ended
31.03.2012
(Rupees)
848,524,868
(206,861,032)
(330,084,567)
(576,258,764)
(372,333,539)
452,536,408
231,994,818
312,197,687
Year ended
31.03.2011
(Rupees)
435,358,686
(1,973,107,074)
60,666,081
1,596,807,107
(1,430,454,197)
1,882,990,605
452,536,408
Notes:
1.
The above Cash flow statement has been prepared under the indirect method set out in AS-3 prescribed
in Companies (Accounting Standards) Rules, 2006.
2.
Figures in brackets indicate cash outflow.
3.
Previous year figures have been regrouped and recast wherever necessary to conform to the current
year classification.
6
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2012
1.
Shareholders’ funds
(a) Share capital
(c) 0.01% Convertible Redeemable Cumulative Preference
shares of Rs.10 each fully paid up issued by Viacom18
Media Private Limited to Viacom18 Inc. (50% share)
2.
3.
4.
Minority interest
Current liabilities
(b) Trade payables
Total
ASSETS
1.
Non - current assets
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iv) Intangible assets under development
(b)
(c)
(d)
(e)
(f)
(g)
2.
Goodwill on Consolidation
Deferred tax assets (net)
Non-current inventories
Current assets
(a) Current Investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short-term loans and advances
(f) Other current assets
Total
7
As at
31.03.2012
(Rupees)
As at
31.03.2011
(Rupees)
724,188,260
6,131,602,200
-
475,629,098
6,188,680,635
219,677,500
6,855,790,460
79,887,160
6,883,987,233
-
2,942,265,594
43,065,226
123,895,915
3,109,226,735
1,614,861,106
16,063,405
65,971,747
1,696,896,258
6,012,984,894
3,302,829,698
1,486,174,046
14,706,166
10,816,694,804
20,861,599,159
3,376,963,938
2,118,636,511
1,029,839,151
9,682,365
6,535,121,965
15,116,005,456
1,516,857,299
120,910,900
23,650,409
7,183,020
1,668,601,628
4,467,166,496
61,485,810
32,260,702
670,347,472
1,964,789,565
1,254,041,147
10,118,692,820
791,200,175
24,282,125
3,730,139
819,212,439
4,005,406,402
28,348,836
60,000,000
216,166,285
3,109,156,209
480,737,737
8,719,027,908
978,129,606
5,193,367,778
819,499,452
3,496,213,224
255,696,279
10,742,906,339
20,861,599,159
30,257,643
347,127,646
2,968,238,758
2,042,618,520
979,655,853
29,079,128
6,396,977,548
15,116,005,456
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2012
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Other income
Total Revenue
Expenses:
(a) Employee benefits expenses
(b) Finance costs
(c) Depreciation and amortization expenses
(d) Other expenses
Total Expenses
Profit / (Loss) before tax and exceptional items (3-4)
Exceptional items
Impairment of Film Rights (see note 42)
Recovery from indemnity (see note 42)
Profit / (Loss) before tax (5-6)
Tax expenses:
- Current tax
- Deferred tax
- Income tax adjustments of prior years (net)
Profit / (Loss) for the year before minority (7-8)
Less: Share of loss transferred to minority interest
Profit / (Loss) for the year (9-10)
Earnings per equity share (See note 32)
(Face value of Rs. 2 each)
(a) Basic
(b) Diluted
8
Year ended
31.03.2012
(Rupees)
14,098,640,324
857,976,550
14,956,616,874
Year ended
31.03.2011
(Rupees)
8,092,016,157
135,245,770
8,227,261,927
2,278,687,783
1,197,143,801
335,294,522
12,442,932,880
16,254,058,986
(1,297,442,112)
1,211,119,653
509,085,147
175,963,575
6,461,831,168
8,357,999,543
(130,737,616)
(693,009,861)
1,086,309,861
(904,142,112)
(130,737,616)
1,549,970
27,739,298
28,742,605
(962,173,985)
(224,379,339)
(737,794,646)
102,492,022
(59,183,148)
(174,046,490)
(174,046,490)
(1.53)
(1.53)
(0.78)
(0.78)
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2012
Year ended
31.03.2012
(Rupees)
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for :
- Depreciation
- Finance Cost
- Dividend income
- Net profit on sale of long term investments
- Interest income
Inventories
Non-current Inventories
Trade receivables
Long term receivables
Adjustments for increase / (decrease) in operating
liabilities:
Trade payables
Increase / (Decrease) in current and non-current liabilities
Tax paid
B. CASH FLOW FROM INVESTING ACTIVITIES
-in subsidiary/affiliates (including share application -money)
Investments sold
- in subsidiary/affiliates
Interest received
Dividend received
C. CASH FLOW FROM FINANCING ACTIVITIES
Finance cost paid
9
Year ended
31.03.2011
(Rupees)
(904,142,112)
(130,737,616)
335,294,522
33,199,995
4,949,921
1,197,143,801
(2,719,812)
(178,836)
(290,952,745)
(12,083,395)
(118,604,328)
(237,353,096)
(189,100,000)
428,212,654
175,963,575
2,150,349
4,527,283
509,085,147
(294,829)
(1,042,485)
(16,518,159)
(13,145,470)
(73,554,715)
113,882,800
243,666,569
570,315,880
(627,129,627)
1,144,366,644
(981,605,747)
(1,086,309,861)
1,219,005,077
(307,286,582)
(18,672,376)
(7,093,549)
23,650,873
(1,780,520,866)
(931,949,610)
343,467,772
18,519,709
(8,424,969)
606,816,626
(403,969,204)
15,827
7,440,401
3,375,568
(207,380,234)
(459,805,973)
(667,186,207)
86,659,362
71,256,286
110,463
3,375,568
17,134,538
(1,586,404,994)
(263,829,036)
(1,850,234,030)
(485,689,217)
10,564,962
(60,335,288)
4,969,223
(332,372,360)
(2,486,297,774)
269,040,000
42,341,038
138,181,957
178,836
189,100,000
(168,654,784)
6,279,936
69,641,620
1,042,485
(2,464,699,798)
(1,137,581,476)
(454,419,090)
Proceeds from issue of share capital to minority
Increase / (Decrease) in current maturities of long- term debt
Cash and cash equivalents acquired on merger / acquisition
Cash and cash equivalents as at the end of the year (see
note 22)
Year ended
31.03.2012
(Rupees)
(111,276,733)
18,224,728
304,266,499
815,274,868
(167,900,214)
(340,280,567)
(619,272,895)
(1,455,113,886)
2,042,618,520
231,994,818
819,499,452
Year ended
31.03.2011
(Rupees)
(23,458,247)
(52,553,515)
3,495,902,288
1,412,058,978
328,113,796
(1,026,007,575)
3,679,636,635
(635,297,193)
2,416,467,507
261,448,206
2,042,618,520
Notes:
1. The above Cash flow statement has been prepared under the indirect method set out in AS-3 prescribed in
Companies (Accounting Standards) Rules, 2006.
2. Figures in brackets indicate cash outflow.
3. Previous year figures have been regrouped and recast wherever necessary to conform to the current year classification.
10
213.37
291.29
(77.92)
5. Profit / (loss) before finance costs, taxes and exceptional
items (3+4)
6. Finance costs
7. Profit / (loss) after finance costs but before Exceptional
Items (5-6)
-
41.27
4. Other income
8. (a) Exceptional income - Recovery from indemnity
(b) Exceptional expense - Impairment of Film rights
172.10
380.22
332.97
1.14
59.19
423.53
1,197.05
2. Expenses
(a) Programming costs
(b) Employee benefits expenses
(c) Marketing, distribution and promotional expenses
(d) Employee stock compensation expense
(e) Depreciation and amortisation expenses
(f) Other expenditure
Total Expenses
3. Profit / (loss) from operations before other income, finance
costs, taxes and exceptional items (1-2)
1,298.17
70.98
1,369.15
11
-
(67.62)
249.10
181.48
90.88
90.60
384.82
695.63
1.25
62.37
686.30
1,830.37
1,896.89
24.08
1,920.97
-
248.47
210.44
458.91
356.42
102.49
319.75
373.15
2.23
59.23
400.19
1,154.55
1,233.46
23.58
1,257.04
-
121.17
853.96
975.13
666.53
308.60
1,536.10
2,117.96
4.95
244.60
1,994.79
5,898.40
6,035.99
171.01
6,207.00
Standalone
Quarter
Quarter
Quarter
Year ended
ended
ended
ended
31.03.2012
30.06.2012
31.03.2012
30.06.2011
(Audited)
(Unaudited) (Unaudited) (Unaudited)
(All amounts in Rs. Million)
-
(240.06)
385.70
145.64
91.11
54.53
1,137.31
548.22
1,002.30
1.14
96.04
629.38
3,414.39
3,397.94
70.98
3,468.92
393.30
-
(783.24)
348.60
(434.64)
183.50
(618.14)
2,398.20
573.87
1,618.04
1.25
94.46
987.13
5,672.98
5,030.74
24.08
5,054.82
-
230.89
283.48
514.37
366.27
148.10
721.80
444.17
719.40
2.23
73.74
528.49
2,489.83
2,614.35
23.58
2,637.93
1,086.31
693.01
(1,297.44)
1,197.14
(100.30)
857.98
(958.28)
5,070.10
2,273.74
4,599.72
4.95
335.29
2,773.12
15,056.92
13,927.63
171.01
14,098.64
Consolidated
Quarter
Quarter
Quarter
Year ended
ended
ended
ended
31.03.2012
30.06.2012
31.03.2012
30.06.2011
(Audited)
LIMITED REVIEWED FINANCIAL RESULTS FOR THE QUARTER ENDED JUNE 30, 2012
1. Income from operations
(a) Income from operations
(b) Other operating income
Total Income from operations (net)
Particulars
16. Earnings/ (loss) per share (EPS) (in Rs.)
(a) EPS before extraordinary items (not annualised)
- Basic
- Diluted
(b) EPS after extraordinary items (not annualised)
- Basic
- Diluted
15. Reserves excluding revaluation reserves
14. Paid-up Equity Share Capital
(Face value Rs. 2/-)
(0.17)
(0.17)
(0.22)
(0.22)
12
(0.17)
(0.17)
-
724.16
0.00
(82.63)
(82.63)
15.01
(67.62)
(0.22)
(0.22)
-
724.16
0.00
(77.92)
12. Minority Interest
13. Net profit / (loss) after tax and minority interest (11-12)
(77.92)
-
(77.92)
0.65
0.65
0.65
0.65
-
724.15
0.00
234.74
234.74
13.73
248.47
0.19
0.19
0.19
0.19
7,049.94
724.16
0.00
92.42
92.42
28.75
121.17
Standalone
Quarter
Quarter
Quarter
Year ended
ended
ended
ended
31.03.2012
30.06.2012
31.03.2012
30.06.2011
(Audited)
11. Net profit / (loss) after tax (9-10)
10. Tax expenses
9. Profit / (loss) from Ordinary activities before tax (7+8a8b)
Particulars
(0.65)
(0.65)
(0.65)
(0.65)
-
724.16
(50.69)
0.00
(234.60)
(285.29)
45.23
(240.06)
(0.69)
(0.69)
(0.69)
(0.69)
-
724.16
(80.06)
0.00
(334.06)
(414.12)
24.18
(389.94)
0.58
0.58
0.58
0.58
-
724.15
0.00
211.21
211.21
19.68
230.89
(1.53)
(1.53)
(1.53)
(1.53)
6,131.60
724.16
(224.38)
0.00
(737.79)
(962.17)
58.03
(904.14)
Consolidated
Quarter
Quarter
Quarter
Year ended
ended
ended
ended
31.03.2012
30.06.2012
31.03.2012
30.06.2011
(Audited)
GENERAL INFORMATION
Our Registered Office
503, 504 & 507, 5th Floor
Mercantile House
15 Kasturba Gandhi Marg
New Delhi – 110 001, India
Website: www.network18online.com
Our Corporate Office
Express Trade Tower
Plot No. 15-16
Sector 16A
Noida – 201 301
Uttar Pradesh, India
Registration No: 55-137214
Corporate Identification Number: L74300DL2005PLC137214
Address of the Registrar of Companies
Registrar of Companies, National Capital Territory of Delhi and Haryana
4th floor, IFCI Tower
61, Nehru Place
New Delhi – 110 019
India
Company Secretary and Compliance Officer
Hitesh Kumar Jain
Express Trade Tower
Plot Nos. 15 and 16, Sector 16 A
Noida – 201 301
Tel: +91 120 434 1818
Fax: +91 120 432 4110
Investors may contact the Registrar to the Issue or the Company Secretary and Compliance Officer for any preIssue/ post-Issue related matter. All grievances relating to the ASBA process may be addressed to the Registrar
to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of
Equity Shares applied for, Amount blocked, ASBA Account number and the Designated Branch of the SCSB
where the CAF was submitted by the ASBA Investors.
13
Lead Managers to the Issue
ICICI Securities Limited
RBS Equities (India) Limited
ICICI Centre
H. T. Parekh Marg
Churchgate, Mumbai – 400 020
Maharashtra, India
83/ 84, Sakhar Bhavan, 230
Nariman Point
Mumbai – 400 021
Maharashtra, India
Tel: +91 22 2288 2460
Fax: +91 22 2282 6580
[email protected]
Website: www.icicisecurities.com
Contact Person: Ms. Payal Kulkarni
Tel: +91 22 6632 5535
Fax: +91 22 6632 5541
[email protected]
Website: www.rbs.in
Contact Person: Ms. Bharti Jani
Bankers to the Issue
Kotak Mahindra Bank Limited
Punjab National Bank
5th Floor, Dani Corporate Park 158
CST Road, Santacruz (E)
Capital Market Service Branch,
PNB House, 2nd Floor,
Sir P.M Road, Fort,
Tel: + 91 22 6759 5336
Fax: + 91 22 6759 5374
Website: www.kotak.com
Contact Person: Amit Kumar
SEBI Regn No.: INBI00000927
Tel : +91 22 2262 1122
Fax: +91 22 2262 1124
Email:[email protected]
Website: www.pnbindia.in
Contact Person: Mr K.K.Khurana
SEBI Regn. No.: INBI00000084
ICICI Bank Limited
Capital Market Division,
Rajabahadur Mansion, 30
Mumbai Samachar Marg,
Fort, Mumbai 400 001, India
Tel: + 91 22 6631 0322
Fax: + 91 22 6631 0350/ 2261 1138
Website: www.icicibank.com
Contact Person: Anil Gadoo
SEBI Regn No.: INBI00000004
Domestic Legal Counsel to the Company
Khaitan & Co
One Indiabulls Centre
Tower 1, 13th Floor
841 Senapati Bapat Marg
Elphinstone Road
Mumbai – 400 013
Maharashtra, India
14
Tel: +91 22 6636 5000
Fax: +91 22 6636 5050
Domestic Legal Counsel to the Lead Managers
Amarchand & Mangaldas & Suresh A. Shroff & Co.
Amarchand Towers
216 Okhla Industrial Estate
Phase – III
Tel: +91 11 2692 0500/ 4159 0700
Fax: +91 11 2692 4900
International Legal Counsel to the Lead Managers
Latham & Watkins LLP
9 Raffles Place
#42-02 Republic Plaza
Singapore – 048619
Tel.: + 65 6536 1161
Fax: + 65 6536 1171
Auditors
Deloitte Haskins & Sells
Chartered Accountants
7th Floor, Building 10 Tower B
DLF Cyber City Complex, DLF City Phase II
Gurgaon – 122 002
Haryana, India
Tel: +91 124 679 2000
Fax: +91 124 679 2012
Firm Registration No.: 015125N
Contact Person: Jitendra Agarwal
Membership No.: 87104
Registrar to the Issue
C-13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai – 400 078
Maharashtra, India.
Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
Toll Free No: 1-800-220-878
Investor Greivance E-mail: [email protected]
15
Self Certified Syndicate Banks
The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on SEBI
website http://www.sebi.gov.in/cms/sebi_data/attachdocs/1345612849756.html.
Credit rating
As the Issue is a rights issue of Equity Shares, no credit rating is required.
Statement of responsibility of the Lead Managers
The inter-se allocation of responsibilities of Lead Managers is as follows:
Sr.
No.
1
2
3
4
5
6
7
8
9
Activity
Responsibility
Coordinator
Capital structuring with the relative components and
formalities such as composition of debt and equity, type of
instruments of the Issue in conformity with the ICDR
Regulations, undertaking liaison with SEBI and the Stock
Exchanges (including obtaining in-principle listing
approval), as may be required under the prevailing
framework of regulations/ rules/ guidelines issued by the
SEBI and the Stock Exchanges.
Assisting our Company and its legal advisors in drafting the
draft and final Letter of Offer;
conduct due diligence as may be required on our Company
and assist in compliance with regulatory requirements of the
SEBI and the Stock Exchanges. The Lead Managers shall
ensure compliance with the ICDR Regulations, other
stipulated requirements, completion of prescribed formalities
with the Stock Exchanges and the SEBI and securing all
necessary regulatory approvals for the issue.
Drafting and design of Abridged Offer Document and CAF.
Lead Managers
ICICI Securities
Limited
Lead Managers
ICICI Securities
Limited
Lead Managers
Drafting and design of statutory and non-statutory
advertisement/ publicity material including newspaper
advertisements and brochure
Selection of agencies connected with the issue – finalizing
printers, advertisement agency, and monitoring agency
Selection of agencies connected with the issue – finalizing
banker to the issue (selecting collection centers) and
Registrar
Institutional marketing strategy which will cover, inter alia:
Finalising the list and division of investors for one to
one meetings;
Finalising road show schedule and investor meeting
schedules; and
Preparation of Investor Presentation and FAQ’s.
Retail/ Non-Institutional marketing strategy which will cover
inter-alia, preparation of publicity budget, arrangement for
selection of (i) ad-media, (ii) centres of holding conferences
of brokers, investors etc., (iii) distribution of publicity and
Issue materials including application form and Letter of
Offer.
Follow-up with the Bankers to the Issue to get quick
Lead Managers
ICICI Securities
Limited
ICICI Securities
Limited
16
Lead Managers
Lead Managers
ICICI Securities
Limited
RBS Equities (India)
Limited
Lead Managers
RBS Equities (India)
Limited
Lead Managers
ICICI Securities
Limited
Lead Managers
ICICI Securities
Sr.
No.
10
11
Activity
Responsibility
estimates of collection and advising such Banks about
closure of the Issue, based on the correct figures.
Assisting in the listing of the Equity Shares issued pursuant
to the Issue on the Stock Exchanges.
The post-Issue activities will involve essential follow-up
steps, which include finalization of basis of allotment or
weeding out of multiple applications, listing of instruments
and dispatch of certificates and refunds, with the various
agencies connected with the work such as the Registrar to
the Issue, the Bankers to the Issue, and the bank handling
refund business. Whilst, many of the post issue activities will
be handled by other intermediaries, the designated Lead
Manager shall be responsible for ensuring that these agencies
fulfill their functions and enable them to discharge this
responsibility through suitable agreements with the Issuer
Company.
Coordinator
Limited
Lead Managers
Lead Managers
ICICI Securities
Limited
ICICI Securities
Limited
Debenture trustee
This being an issue of equity shares, a debenture trustee is not required.
Issue Schedule
Issue Opening Date:
Last date for receiving requests for SAFs:
Issue Closing Date:
September 25, 2012
October 3, 2012
October 15, 2012
Monitoring Agency
The Company has appointed IFCI Limited as the monitoring agency, to monitor the utilization of the Net
Proceeds in terms of Regulation 16 of the SEBI ICDR Regulations.
IFCI Limited
16th Floor, IFCI Tower
61, Nehru Place
Tel: +91 11 4173 2526/ + 91 99907 25984
Fax: + 91 11 2648 7421
Contact Person: Mr. Sachikanta Mishra
Website: www.ifciltd.com
Appraisal Reports
None of the purposes for which the Net Proceeds are proposed to be utilised have been financially appraised by
any bank or financial institution.
Principal Terms of Loans and Assets charged as security
For details of the principal terms of loans and assets charged as security, please refer to the chapter “Financial
Indebtedness” on page 279.
Underwriting
We have not entered into any underwriting arrangement with the Lead Managers in connection with the Issue.
17
CAPITAL STRUCTURE
Our capital structure and related information as on date of this Letter of Offer, prior to and after the Issue is set
forth below.
Particulars
A. Authorised share capital(1)
5,000,000,000 Equity Shares of ` 2 each
B. Issued Capital
362,130,907 Equity Shares of ` 2 each fully paid-up
C. Paid-up and subscribed capital(2)(3)
362,081,871 Equity Shares of ` 2 each fully paid-up
D. Shares Forfeited account
E. Present Issue in terms of this Letter of Offer*
1,349,577,882 Equity Shares at an Issue Price of ` 20 per Equity
Share (premium of ` 18 per Equity Share)
F. Issued capital after the Issue (assuming full subscription for
and allotment of the Rights Entitlement)
1,711,708,789 Equity Shares of ` 2 each fully paid-up
G. Subscribed and paid up capital after the Issue (assuming full
subscription for and allotment of the Rights Entitlement)
1,711,659,753 Equity Shares of ` 2 each fully paid-up
Aggregate
Nominal Value
(in `)
Aggregate Value
at Issue Price
(in `)
10,000,000,000
724,261,814
724,163,742
24,518
2,699,155,764
26,991,557,640
3,423,417,578
34,234,175,780
3,423,319,506
34,233,195,060
*The Issue has been authorized by the Board of Directors under sections 81(1), 81(1A) and other applicable provisions of the
Companies Act pursuant to a resolution dated January 3, 2012 and the shareholders vide resolution passed by postal ballot
dated February 24, 2012.
1. Pursuant to the Equity Shareholders resolution passed by postal ballot on July 3, 2012 our authorized share capital has
been increased from ` 2,920 million consisting of 1,460,000,000 Equity Shares to ` 10,000 million consisting of
5,000,000,000 Equity Shares.
2. As on June 30, 2012 and August 22, 2012, 7,231,849 options have been granted under ESOP 2007, against which
3,806,796 options (including 2,052,340 options vested but not yet exercised) are outstanding. Our Remuneration/
Compensation committee shall, in accordance with the SEBI ESOP Guidelines, formulate the procedure, terms and
conditions for making a fair and reasonable adjustment to the number and price of options.
3. Pursuant to the last and final notice dated November 28, 2011, unpaid call money was received for 1,872 Equity Shares
and the committee approved the conversion. Thus the paid-up Equity Share Capital was increased to ` 724,188,260 and
the cumulative Equity Share premium increased to ` 7,942,602,448. The Board of Directors has approved forfeiture of
49,036 Equity Shares for non-payment of calls in arrears. Consequently the Subscribed and paid-up capital as on the date
of this Letter of Offer is 362,081,871 Equity Shares. The amounts received on these Equity Shares have been transferred
to the Shares Forfeited Account. The outstanding Cumulative Equity Share Premium is inclusive of an amount received on
such Equity Shares.
Notes to the Capital Structure
1.
Subscription to the Issue by the Promoters and Promoters Group
Network18, RRB Investments Private Limited, Mr. Raghav Bahl, Ms. Ritu Kapur, Ms. Vandana Malik, Ms.
Subhash Bahl, Mr. Pramod Kapur, Ms. Manju Kapur, and the Subscribing Companies, part of our Promoter
and Promoter Group, have confirmed vide their letters dated February 29, 2012 that they intend to subscribe
to the full extent of their Rights Entitlement in the Issue, in compliance with regulation 10 (4) of Takeover
Regulations.
The Subscribing Companies have further confirmed vide their letters dated February 29, 2012 that, they
intend to subscribe for (i) additional Equity Shares and (ii) Equity Shares, if any, which remain
unsubscribed. Such subscription to additional Equity Shares and the unsubscribed portion, if any, to be
made by the Subscribing Companies, shall be in accordance with regulation 10 (4) of Takeover
18
Regulations. Further, such subscription shall not result in breach of minimum public shareholding
requirement as stipulated in the Listing Agreements.
2.
Cate
gory
Code
(I)
(A)
(1)
(a)
(b)
(c)
(d)
(e)
Our shareholding pattern as on August 17, 2012 is as follows:
Category of
Shareholder
(II)
PROMOTER AND PROMOTER GROUP
Indian
Individual /HUF
5
165,960
Central
0
0
Government/State
Government(s)
Bodies Corporate
10
185,563,048
Financial
0
0
Institutions / Banks
Others (Trusts)
3
30,644,554
Sub-Total A(1)#:
(2)
(a)
(b)
(c)
(d)
(e)
(B)
(1)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
B(2)
(a)
(b)
No of
Total Number No of Shares
Total shareholding as a
Share
of Shares*
Held In
% of total no of shares
#
Holders
Dematerialized
As a
As a
Form
percentage percentage
of (a+b)
of (a+b+c)
(III)
(IV)
(V)
(VI)
(VII)
FOREIGN
Individuals
(NRIs/Foreign
Individuals)
Bodies Corporate
Institutions
Qualified Foreign
Investor
Others
Sub-Total A(2) :
Total
Shareholding of
Promoter and
Promoter Group
A= A(1)+A(2)
Shares pledge or
otherwise encumbered
Number of
As a
shares
percentag
e
(VIII)
(IX)=(VIII
)/(IV)*100
165,960
0
0.05
0.00
0.05
0.00
136,000
0
81.95
0.00
185,563,048
0
51.25
0.00
51.25
0.00
115,002,362
0
61.97
0.00
30,644,554
8.46
8.46
30,025,006
97.98
18
216,373,562
216,373,562
59.76
59.76
145,163,368
67.09
0
0
0
0.00
0.00
0
0.00
0
0
0
0
0
0
0
0
0
0.00
0.00
0.00
0.00
0.00
0.00
0
0
0
0.00
0.00
0.00
0
0
18
0
0
216,373,562
0
0
216,373,562
0.00
0.00
59.76
0.00
0.00
59.76
0
0
145,163,368
0.00
0.00
67.09
NA
NA
NA
NA
NA
NA
PUBLIC SHAREHOLDING
Institutions
Mutual Funds /UTI
7
Financial
6
Institutions /Banks
Central Government /
0
State Government(s)
Venture Capital
0
Funds
Insurance
0
Companies
Foreign Institutional
28
Investors
Foreign Venture
0
Capital Investors
Qualified Foreign
0
Investor
Others
0
Sub-Total B(1) :
41
NON-INSTITUTIONS
Bodies Corporate
1271
Individuals
25,650,304
249,277
25,650,304
249,277
7.08
0.07
7.08
0.07
0
0
0.00
0.00
0
0
0.00
0.00
0
0
0.00
0.00
26,716,790
26,716,790
7.38
7.38
0
0
0.00
0.00
0
0
0.00
0.00
0
52,616,371
0
52,616,371
0.00
14.53
0.00
14.53
29,638,084
29,633,939
8.19
8.19
19
Cate
gory
Code
(I)
(c)
(d)
(C)
(1)
(2)
Category of
Shareholder
(II)
No of
Total Number No of Shares
Total shareholding as a
Share
of Shares*
Held In
% of total no of shares
Holders#
Dematerialized
As a
As a
Form
percentage percentage
of (a+b)
of (a+b+c)
(III)
(IV)
(V)
(VI)
(VII)
(i) Individuals
holding nominal
share capital upto
Rs.1 lakh
(ii) Individuals
holding nominal
share capital in
excess of Rs.1 lakh
Others
Foreign Bodies
Directors and their
Relatives
Foreign Nationals
Non Resident
Indians
Overseas Corporate
Bodies
Clearing Members
Trusts
Hindu Undivided
Families
Qualified Foreign
Investor
57192
21,381,609
21,134,229
5.91
5.91
82
38,866,351
38,797,371
10.73
10.73
0
2
0
581,945
0
581,945
0.00
0.16
0.00
0.16
1
346
650
827,293
650
826,533
0.00
0.23
0.00
0.23
2
1948
1,948
0.00
0.00
102
17
1,647
524,878
10,382
1,258,798
524,878
10,382
1,258,798
0.14
0.00
0.35
0.14
0.00
0.35
0
0
0
0.00
0.00
Sub-Total B(2) :
60,662
93,091,938
92,770,673
25.71
25.71
Total Public
Shareholding B =
(B)(1) + B(2)
60,703
145,708,309
145,387,044
40.24
40.24
Total (A+B) :
60,721
362,081,871
361,760,606
100.00
100.00
0
0
0
0
0
0
0
0
0
0
Shares held by
custodians, against
which Depository
Receipts have been
issued
Promoter and
Promoter Group
Public
Shares pledge or
otherwise encumbered
Number of
As a
shares
percentag
e
(VIII)
(IX)=(VIII
)/(IV)*100
NA
NA
0
NA
NA
0.00
0.00
0
0
0.00
0.00
0
0
GRAND TOTAL
60,721
362,081,871
361,760,606
100.00
100.00 145,163,368
40.09
(A+B+C) : *
* Pursuant to the last and final notice dated November 28, 2011, unpaid call money was received for 1,872 Equity Shares
and the committee approved the conversion. Thus the paid-up Equity Share Capital was increased to ` 724,188,260 and the
cumulative Equity Share premium increased to ` 7,942,602,448. The Board of Directors have approved forfeiture of 49,036
Equity Shares for non-payment of calls in arrears. Consequently the Subscribed and paid-up capital as on the date of this
Letter of Offer is 362,081,871 Equity Shares.
#
The above data is as per the record (no. of folios / DP accounts) provided by the depositories. The total number of
Promoter and Promoter Group entities of our Company are 64, out of which, as of August 17, 2012, 15 Promoter and
Promoter Group entities hold 216,373,562 Equity Shares through 18 folios.
20
The list of Equity Shareholders belonging to the category “Promoter and Promoter Group” as on August 17, 2012
is detailed in the table below:
Sr.
No.
Name of the
shareholder
Details of Shares
held
Number of As a %
shares held of grand
total
(A)+(B)
+(C)
(i)
(ii)
(iii)
1 Network18
112,689,258
Media &
Investments
Limited##
2 Network18
65,988,712
Media &
Investments
Limited##
3 Network18
6,848,678
Media &
Investments
Limited##
4 RRB Investments
34,600
Private Limited
5 Network18
28,725,006
Group Senior
Professional
Welfare Trust$
6 TV18 Employees
619,548
Welfare Trust
7 IBN18 Trust
1,300,000
8 Raghav Bahl
136,000
9 Vandana Malik##
13,529
10 Vandana Malik##
4,573
11 Ritu Kapur
11,274
12 Subhash Bahl
584
13 Adventure
200
Marketing
Private Limited
14 Watermark
200
Infratech Private
Limited
15 Colorful Media
200
Private Limited
16 RB Media
200
Holdings Private
Limited
17 RB Mediasoft
500
Private Limited
18 RRB Mediasoft
500
Private Limited
19 Manju Kapur*
0.00
20 Pramod Kapur*
0.00
21 Digital Content
0.00
Private Limited*
22 Global Broadcast
0.00
Employees
Welfare Trust*
23 Network18
0.00
Details of convertible
Total Shares
securities
(including
underlying
As a % As a % No of
As a % Number of As a %
shares
VI = of grand warrants
total convertible
total
V/III*1 total
held
number securities number of assuming full
00
(A)+(B)
of
held
convertible conversion of
+ (C) of
warrants
securities warrants and
subof the
of the same convertible
securities) as a
clause
same
class
% of diluted
(I) (a )
class
share capital
Encumbered shares#
No.
(iv)
(v)
31.12 108,153,684
Details of warrants
(vi)
95.98
(vii)
29.87
(viii)
0
(ix)
0.00
(x)
0
(xi)
0.00
(xii)
31.12
18.22
0
0.00
0.00
0
0.00
0
0.00
18.22
1.89
6,848,678 100.00
1.89
0
0.00
0
0.00
1.89
0.01
0
0.00
0.00
0
0.00
0
0.00
0.01
7.93 28,725,006 100.00
7.93
0
0.00
0
0.00
7.93
0.17
0
0.00
0.00
0
0.00
0
0.00
0.17
0.36
0.04
0.00
0.00
0.00
0.00
0.00
1,300,000 100.00
136,000 100.00
0
0.00
0
0.00
0
0.00
0
0.00
0
0.00
0.36
0.04
0.00
0.00
0.00
0.00
0.00
0
0
0
0
0
0
0
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0
0
0
0
0
0
0
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.36
0.04
0.00
0.00
0.00
0.00
0.00
0.00
0
0.00
0.00
0
0.00
0
0.00
0.00
0.00
0
0.00
0.00
0
0.00
0
0.00
0.00
0.00
0
0.00
0.00
0
0.00
0
0.00
0.00
0.00
0
0.00
0.00
0
0.00
0
0.00
0.00
0.00
0
0.00
0.00
0
0.00
0
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
21
Sr.
No.
(i)
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Name of the
shareholder
(ii)
Employees
Welfare Trust*
Newswire18
Limited*
TV18 Home
Shopping
Network
Limited*
Television
Eighteen Media
& Investments
Limited*
BK Holdings
Limited,
Mauritius*
Television
Eighteen
Mauritius
Limited*
TV18 HSN
Holdings
Limited, Cyprus*
Namono
Investments
Limited, Cyprus*
RVT Holdings
Private Limited*
SETPRO18
Distribution
Limited*
Big Tree
Entertainment
Private Limited*
Digital18 Media
Limited*
e-eighteen.com
Limited*
Moneycontrol
Dot Com India
Limited*
B K Media
Private Limited*
Keyman
Financial
Services Private
Limited*
Network18
Publications
Limited*
RB Investments
Private Limited*
RB Software
Details of Shares
held
Number of As a %
total
(A)+(B)
+(C)
Total Shares
securities
(including
underlying
As a % As a % No of
shares
total convertible
total
V/III*1 total
held
00
(A)+(B)
of
held
+ (C) of
warrants
subof the
securities) as a
clause
same
class
% of diluted
(I) (a )
class
share capital
Encumbered shares#
No.
Details of warrants
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
22
Sr.
No.
(i)
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Name of the
shareholder
(ii)
Private Limited*
RRK Holdings
Private Limited*
RVT Softech
Private Limited*
Capital18 Fincap
Private Limited*
VT Softech
Private Limited*
RRK Finhold
Private Limited*
RRK Media
Private Limited*
RVT Finhold
Private Limited*
VT Media
Private Limited*
BRR Securities
Private Limited*
BK Media
Mauritius Private
Limited*
E-18 Limited,
Cyprus*
WEB18 Holdings
Limited, Cayman
Islands*
Web18 Securities
Private Limited*
Colosceum
Media Private
Limited*
Stargaze
Entertainment
Pvt Limited*
Greycells18
Media Limited*
Capital 18
Limited,
Mauritius*
Capital18
Acquisition
Corp*
Network18
Holidngs
Limited, Cayman
Islands*
TV18 UK
Limited*
RB Holdings
Private Limited*
Infomedia Press
Details of Shares
held
Number of As a %
total
(A)+(B)
+(C)
Total Shares
securities
(including
underlying
As a % As a % No of
shares
total convertible
total
V/III*1 total
held
00
(A)+(B)
of
held
+ (C) of
warrants
subof the
securities) as a
clause
same
class
% of diluted
(I) (a )
class
share capital
Encumbered shares#
No.
Details of warrants
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
23
Sr.
No.
(i)
64
65
66
67
Name of the
shareholder
Details of Shares
held
Number of As a %
total
(A)+(B)
+(C)
Total Shares
securities
(including
underlying
As a % As a % No of
shares
total convertible
total
V/III*1 total
held
00
(A)+(B)
of
held
+ (C) of
warrants
subof the
securities) as a
clause
same
class
% of diluted
(I) (a )
class
share capital
Encumbered shares#
No.
Details of warrants
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
Limited*
WEB18 Software
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Services
Limited*
Mst. Vidur Bahl*
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Ms. Tara Bahl*
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Sandeep Kapur*
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
TOTAL
216,373,562
59.76 145,163,368 67.09
40.09
0.00
0.00
0.00
0.00
#
The term “encumbrance” has the same meaning as assigned to it in regulation 28(3) of the Takeover Regulations
##
Shares held through multiple folios
* As on August 17, 2012 these entities do not hold any share in the Company however they form part of Promoter and Promoter
Group of the Company.
$
Network 18 Group Senior Professional Welfare Trust was settled by erstwhile Television Eighteen India Limited pursuant
to trust deed dated February 19, 2009. Pursuant to the Scheme of Arrangement, Television Eighteen India Limited was
merged into Network18. Network 18 Group Senior Professional Welfare Trust, carries out activities for the general welfare
of the Beneficiaries and the purposes for which the Trust Fund may be applied.
The beneficiaries are:
1. Eligible Employees: Eligible employee means an employee who fulfils the conditions prescribed in and qualifies to
receive benefits under the Network18 Group Employee Welfare Plan 2008, and/or who has been specified in writing to
the Trustees by the Board of the Company or any specified Committee of the Board entitled to administer the Network
18 Group Employee Welfare Plan 2008.
2. Any person employed / retained / hired or contracted to work by Company or its holding and subsidiary companies
and confirmed as eligible employees.
3. Family members of Eligible Employees.
The trustees of the Network 18 Group Senior Professional Welfare Trust are Mr. Raghav Bahl, Mr. Sanjay Ray Chaudhuri,
Mr. R D S Bawa and Mr. Anil Srivastava. The settler of the trust is entitled to appoint new trustees.
As of the date of this Letter of Offer, none of the promoter / promoter group entities or the Directors of the Issuer have been
granted any beneficial interest in the Network18 Group Senior Professional Welfare Trust under the Network18 Group
Employee Welfare Plan or otherwise.
(xii)
0.00
0.00
0.00
0.00
59.76
The list of Equity Shareholders, other than the Equity Shareholders belonging to the category “Promoters and
Promoter Group”, holding more than 1% of our paid-up capital as on August 17, 2012 is detailed in the table
below:
Sr.
No.
Name of the shareholder
Number of
shares held
Shares as a
Details of Warrants
percentage of
securities
total number of Number As a % total Number of % w.r.t total
shares {i.e.,
of
number of convertible number of
Grand Total warrants warrants of securities convertible
(A)+(B)+(C)
held
the same
held
securities of
indicated in
class
the same
Statement at
class
para (I)(a)
above}
1
Franklin Templeton Mutual
Fund A/C (Various Demat
Account)
24,545,971
6.78
0
0.00
0
0.00
6.78
2
Franklin Templeton
Investment Funds
13,260,314
3.66
0
0.00
0
0.00
3.66
24
Total shares
(including
underlying
shares
assuming full
conversion of
warrants and
convertible
securities) as
a % of
diluted share
capital
Sr.
No.
Name of the shareholder
Number of
shares held
Shares as a
Details of Warrants
percentage of
securities
total number of Number As a % total Number of % w.r.t total
shares {i.e.,
of
number of convertible number of
Grand Total warrants warrants of securities convertible
(A)+(B)+(C)
held
the same
held
securities of
indicated in
class
the same
Statement at
class
para (I)(a)
above}
Total shares
(including
underlying
shares
assuming full
conversion of
warrants and
convertible
securities) as
a % of
diluted share
capital
3
Reliance Capital Limited
9,500,000
2.62
0
0.00
0
0.00
2.62
4
Sameer Manchanda
8,515,747
2.35
0
0.00
0
0.00
2.35
5
Haresh Chawla
5,806,542
1.60
0
0.00
0
0.00
1.60
6
Rajdeep Sardesai
5,420,562
1.50
0
0.00
0
0.00
1.50
7
Oppenheimer Developing
Markets Fund
5,378,930
1.49
0
0.00
0
0.00
1.49
72,428,066
20.00
0
0.00
0
0.00
20.00
Total
Shareholding of securities (including shares, warrants, convertible securities) of persons (together with PAC)
belonging to the category “Public” and holding more than 5% of the total number of shares of the company:
Sr.
No.
Name(s) of the
shareholder(s)
and the Persons
Acting in
Concert (PAC)
with them
1
Franklin
Templeton
Mutual Fund A/C
(Various Demat
Account)
Total
Number of
shares
Shares as % Details of Warrants
Total shares
of Total No.
securities
(including underlying
of Shares i.e. Number As a % total Number of
shares assuming full
% w.r.t total
grand total
conversion of
of
number of convertible
number of
(A) +(B) + warrants warrants of securities
warrants and
convertible
(C) indicated
held
the same
held
securities of the convertible securities)
statement at
as a % of diluted
class
same class
para (1) (a)
share capital
above
24,545,971
6.78
0
0.00
0
0.00
6.78
24,545,971
6.78
0
0.00
0
0.00
6.78
Statement showing details of locked-in shares - Nil
Statement showing details of Depository Receipts - Nil
Statement showing holding of Depository Receipts (DRs), where Underlying Shares held by ‘Promoter and
Promoter Group’ are in Excess of 1% of the Total No. of Shares - Nil
3.
Except as disclosed below, there have been no acquisition of Equity Shares by the Promoters and the
members of the Promoter Group within the last one year preceding the date of this Letter of Offer:
Name of the Promoter and Promoter
Group
Network18 Media & Investments
Limited
Date of
transaction
Type of transaction
June 10, 2011
Acquisition under Scheme of
Arrangement
Allotment under the Scheme of
Arrangement
Allotment under Scheme of Arrangement
June 23, 2011
Network18 Group Senior Professional
Welfare Trust
June 23, 2011
25
Number of
Equity
Shares
58,958,843
57,139,687
10,482,212
Name of the Promoter and Promoter
Group
Date of
transaction
Type of transaction
Mr. Raghav Bahl
July, 2011 to
October, 2011
June 23, 2011
Ms. Ritu Kapur
June 23, 2011
TV18 Employees Welfare Trust
June 23, 2011
Ms. Vandana Malik
June 10, 2011
Ms. Subhash Bahl
June 23, 2011
Mr. Pramod Kapur
June 23, 2011
Ms. Manju Kapur
June 23, 2011
Network18
February 15, 2012
Acquisition from open market
(54 transactions)
Arrangement
Arrangement
Arrangement
Arrangement
Arrangement
Arrangement
Arrangement
Acquisition - Inter-se transfer between
Promoter and Promoter Group
February 15, 2012
February 15, 2012
February 15, 2012
RB Mediasoft Private Limited
February 15, 2012
RRB Mediasoft Private Limited
February 15, 2012
RB Media Holdings Private Limited
February 15, 2012
Watermark Infratech Private Limited
February 15, 2012
Adventure Marketing Private Limited
February 15, 2012
Colorful Media Private Limited
February 15, 2012
Ms. Ritu Kapur
June 22, 2012
June 22, 2012
Number of
Equity
Shares
4,789,440
1,866,295
54,285
619,548
18,102
84,584
6,140
3,774
1,730,375
84,000
52,000
2,669,199
500
500
200
200
200
200
6,140
4,649
4.
As on August 17, 2012, there are no outstanding convertibles into Equity Shares other than the options
granted under ESOP 2007.
5.
As on June 30, 2012 and August 22, 2012, 7,231,849 options have been granted under ESOP 2007, against
which 3,806,796 options (including 2,052,340 options vested but not yet exercised) are outstanding. Our
Remuneration/ Compensation committee shall, in accordance with the SEBI ESOP Guidelines, formulate
the procedure, terms and conditions for making a fair and reasonable adjustment to the number and price
of options.
6.
The present Issue being a rights issue, as per regulation 34(c) of the SEBI ICDR Regulations, the
requirements of promoters’ contribution and lock-in are not applicable.
7.
If we do not receive the minimum subscription of 90% of the Issue, or if the Subscribing Companies fail to
subscribe for unsubscribed portion in the Issue after the Issue Closing Date, or the subscription level falls
below 90%, after the Issue Closing Date on the account of cheques being returned unpaid or withdrawal of
applications, we shall refund the entire subscription amount received within 15 days from the Issue Closing
Date. If there is delay in the refund of the subscription amount by more than eight days after we become
liable to pay the subscription amount (i.e. 15 days after the Issue Closing Date), we will pay interest for the
delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act.
26
8.
Except for the allotments to be made under ESOP 2007, mentioned above, there will be no further issue of
capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner
during the period commencing from submission of this Letter of Offer with the Stock Exchanges until the
Equity Shares to be issued pursuant to the Issue have been listed.
9.
The ex-rights price of the Equity Shares as per Regulation 10(4) (b) of the Takeover Regulations is ` 20.60.
27
OBJECTS OF THE ISSUE
The objects of the Issue are:
1.
2.
3.
ETV Acquisition;
Repayment/ prepayment, in full or in part, of certain loans availed by our Company; and
General corporate purposes.
The main objects and objects incidental or ancillary to the main objects set out in our Memorandum of
Association enable us to undertake our existing activities and the activities for which funds are being raised by
us through the Issue.
The fund requirements and deployment described below are based on internal management estimates and have
not been appraised by any bank, financial institution or any other external agency. These are based on current
circumstances of our business.
We may have to revise our fund requirements and deployment as a result of changes in commercial and other
external factors, which may not be within the control of our management. This may entail rescheduling, revising
or cancelling the fund requirements and increasing or decreasing the fund requirements for a particular purpose
from its fund requirements mentioned below, at the discretion of our management. Accordingly, the Net
Proceeds would be used to meet all or any of the uses of the funds described herein.
In case of variations in the actual utilization of funds earmarked for the purposes set forth below, increased fund
requirements for a particular purpose may be financed by surplus funds including Issue Expenses, if any,
available in respect of the other purposes for which funds are being raised in this Issue.
If surplus funds are unavailable, the required financing will be met through our internal accruals, additional
equity and/ or debt arrangements. In the event that estimated utilization out of the Net Proceeds in a Fiscal is not
completely met, the same shall be utilized in the subsequent Fiscal(s). Our management, in accordance with the
competitive and dynamic nature of our business, the media and broadcasting industry and the policies of the
Board, will have the flexibility to revise its business plan from time to time and in utilizing the sum earmarked
for general corporate purposes and any surplus amounts from the Net Proceeds.
Requirement of Funds and means of finance
The details of the Net Proceeds are set forth in the following table:
Sr. No.
1.
Gross proceeds of the Issue
2.
Issue expenses
3.
Net Proceeds of the Issue
Description
(In ` million)
Amount
26,991.56
741.56
26,250.00
The total funds required for the objects of the Issue as stated below are ` 26,250 million, and these funds are
proposed to be entirely raised from the Net Proceeds of this Issue.
Utilisation of Net Proceeds
The following table details the objects of the Issue and the amount proposed to be financed from the Net
Proceeds of the Issue:
(in ` million)
Sr.
Objects of the Issue
Amount proposed to be
No.
financed from Net
Proceeds of the Issue
1. ETV Acquisition
19,250
2. Repayment/ pre-payment, in full or in part, of certain loans availed by us and
4,216
repayment of Public Deposits
3. General corporate purposes
2,784
Total
26,250
28
Schedule of Utilization of Net Proceeds
The details of utilisation of Net Proceeds of the Issue will be in accordance with the table set forth below:
(in ` million)
Sr.
Particulars
Amount to be utilised
No.
Fiscal 2013
1.
ETV Acquisition
19,250
2.
Repayment/ pre-payment, in full or in part, of certain loans availed by us and
4,216
repayment of Public Deposits
3.
General corporate purposes
2,784
Total
26,250
Details of the objects of the Issue
The stated objects of the Issue are proposed to be financed entirely out of the proceeds of this Issue.
Accordingly, we confirm that there is no requirement for us to make firm arrangements of finance through
verifiable means towards 75% of the stated means of finance, excluding the amount to be raised through the
Issue. The Net Proceeds, after deduction of all Issue expenses, are estimated to be approximately ` 26,250. The
details in relation to Objects of the Issue are set forth below.
1.
ETV Acquisition
We propose to undertake the ETV Acquisition which will be entirely funded from the Net Proceeds of the Issue.
In connection with ETV Acquisition, we and Network18 have entered into a SPA with Equator and Arimas.
Arimas is the legal and beneficial owner of 2,000,000,000 equity shares of ` 1 each and 125,700,000 CCDs of `
100 each of Equator, which together represents 100% of the Equity Securities of Equator (collectively, the
“Equator Securities”). Pursuant to the terms of the SPA, Arimas shall sell and transfer, the Equator Securities to
TV18, for an aggregate consideration of ` 19,250 million, as adjusted for the net debt (“Net Debt”). Net Debt as
per SPA is defined as the aggregate of all monies borrowed from banks by Panorama, Prism and Eenadu, less
the aggregate of all cash and bank balances of Panorama, Prism and Eenadu as of one day prior to the date of
acquisition of Equator Securities. For further details relating to the ETV Acquisition, please refer to the chapter
“Material Agreements Pertaining to ETV Acquisition” on page 62.
Pursuant to the ETV Acquisition, Equator will become our Subsidiary and we will hold and control the
following investments:
a. 2,750 equity shares of ` 10 each and 2,494,688 OFCDs of ` 100 each, together representing approximately
100% Equity Securities of Panorama which owns ETV News Channels;
b. 3,929 equity shares of ` 10 each and 1,251,660 OFCDs of ` 100 each, together representing approximately
50% Equity Securities of Prism which owns ETV Non Telugu Channels;
c. 5,500 equity shares of ` 10 each and 608,869 OFCDs of ` 100 each, together representing 24.50% Equity
Securities of Eenadu which owns ETV Telugu Channels.
Terms of the OFCDs of Panorama, Prism and Eenadu
Date of Allotment
Rate of interest
Nature of security created
Conversion terms
Terms of repayment, if the
OFCDs are not converted
Other terms
February 10, 2012
0%
None
Each of the OFCDs shall be convertible into 10 equity shares of ` 10 each of
Panorama, Prism and Eenadu, respectively, at the election of the OFCD holder
at any point of time before the expiry of 7 years from the date of allotment.
Outstanding OFCDs, if any, shall be redeemed by Panorama, Prism and Eenadu,
respectively, upon the expiry of 7 years of the date of allotment of the OFCDs.
The OFCDs are transferable in accordance with the terms and conditions of
Panorama SHA, Prism SHA and Eenadu SHA, respectively.
Brief overview of the ETV Channels that we propose to acquire, as stated above, are as follows:
29
ETV News Channels
1. ETV Uttar Pradesh is a 24-hour Hindi language news and general affairs channel targeted for audience in
Uttar Pradesh, Uttarakhand and other Hindi speaking audiences.
2. ETV Madhya Pradesh is a 24-hour Hindi language news and general affairs channel targeted for audience in
Madhya Pradesh, Chhattisgarh and other Hindi speaking audiences.
3. ETV Rajasthan is a 24-hour Hindi language news and general affairs channel targeted for audience in
Rajasthan and other Hindi speaking audiences.
4. ETV Bihar is a 24-hour Hindi language news and general affairs channel targeted for audience in BiharJharkhand and other Hindi speaking audiences.
5. ETV Urdu is the ETV Network’s only 24-hour national news channel and has a nationwide network. ETV
Urdu caters to a large section of Urdu speaking audience.
ETV Non–Telugu Channels
6. ETV Kannada is a 24-hour news and general entertainment channel in Kannada targeted for audience in
Karnataka and Kannada speaking audiences.
7. ETV Bangla is a 24-hour news and general entertainment channel in Bengali targeted for audience in West
Bengal and Bengali speaking audiences.
8. ETV Marathi is a 24-hour news and general entertainment channel in Marathi targeted for audience in
Maharashtra and Marathi speaking audiences.
9. ETV Gujarati is a 24-hour news and general entertainment channel in Gujarati targeted for audience in
Gujarat and Gujarati speaking audiences.
10. ETV Oriya is a 24-hour news and general entertainment channel in Oriya targeted for the Oriya speaking
audiences.
ETV Telugu Channels
11. ETV Telugu is a 24-hour news and general entertainment channel in Telugu targeted for audience in Andhra
Pradesh and Telugu speaking audiences.
12. ETV2 is a 24-hour Telugu news channel in Telugu targeted for audience in Andhra Pradesh and Telugu
speaking audiences.
In addition to the above channels, Panorama has also applied to MIB for transfer from UEPL the permission to
launch five regional language news channels i.e. ETV News Bangla, ETV News Marathi, ETV News Kannada,
ETV News Haryana-Himachal Pradesh and ETV News Gujarati. Further, Eenadu has also applied to MIB for
transfer from UEPL the permission to launch two additional Telugu channels, i.e. ETV 3 and ETV Cinema.
Nature of benefits expected to accrue as a consequence of the ETV Acquisition
We currently operate English and Hindi national news channels, one regional news channel (in Marathi through
our joint venture with Lokmat Media Limited), and English and Hindi general entertainment channels through
Viacom18 and one factual entertainment channel through AETN18. As a result of the proposed ETV
Acquisition, we shall be able to expand our broadcast operations to regional stand alone news channels and
regional general entertainment channels. We will be acquiring and operating regional news channels in Hindi,
and general entertainment channels (which also have news programmes in Gujarati, Marathi, Kannada, Bengali,
Oriya and Urdu). We shall also be acquiring a 24.50% strategic interest in the ETV Telugu Channels. As a
result, we expect to expand our viewership base and attract a more diverse viewer base across our media
properties which we believe would improve our profitability.
30
We believe that we shall be able to aid the growth of ETV Channels with our strategic inputs, improved
content/programming strategies and operational synergies.
The valuation of the ETV Companies owned and broadcast by Eenadu, Prism and Panorama has been done by
Ernst & Young. The value of investment of Equator in Eenadu, Prism and Panorama is approximately ` 19,250
million based on the valuation of the ETV Companies by Ernst & Young, the summary whereof is given below:
(` in million)
Company
Eenadu
Prism
Panorama
Total
Valuation as per Ernst &
Young
20,768
18,812
4,676
% holding of Equator
Value of Equator’s holding
24.50%
49.98%
99.96%
5,088.2
9,402.2
4,674.1
19,164.5
For details regarding procedure followed for the valuation, basis of valuation, attribution of value to various
components, assumptions used in valuation exercise and limitations of the valuation exercise, please refer to the
copy of the valuation report issued by Ernst & Young, which has been included in the list of Material Contracts
and Documents for Inspection as provided on page 343.
Assurance of dividend from the investment in the Equity Securities of Equator
No dividends are assured to us pursuant to the ETV Acquisition.
Capital Structure of Equator
Equator is 100% subsidiary of Arimas. Arimas holds 2,000,000,000 equity shares of ` 1 each of Equator and
125,700,000 CCDs of ` 100 each of Equator.
Terms of the CCDs of Equator
Rate of interest
Terms of repayment, if the
debentures are not converted
Other terms
0%
None
Not repayable. CCDs are compulsorily convertible.
The CCDs shall be convertible into equity shares of Equator at the election of
the CCDs holder at any point of time beginning from March 30, 2009 up to
March 30, 2018. Each CCD is convertible into 100 equity shares of ` 1 each of
Equator.
Statements of assets and liabilities and profit and loss:
Equator was incorporated on January 7, 2008. As a result, financial results of Equator for Financial Years prior
to Fiscal 2009 are not available. For summary financial information for Equator for Fiscal 2009, Fiscal 2010,
Fiscal 2011 and Fiscal 2012, please refer to the chapter “Summary Financial Information of Equator” on page
241.
For summary financial information of Panorama, Prism and Eenadu, please refer to the chapter “Summary
Financial Information of Panorama, Prism and Eenadu” on page 241.
2.
Repayment/ pre-payment, in full or part, of certain loans availed by us
We propose to utilize an amount of ` 4,216 million out of the Net Proceeds of the Issue for the repayment/ prepayment, in full or in part of all or any of the outstanding loans stated below and/or further borrowings or
refinance undertaken for some or all of the loans stated below.
31
Secured Loans
Name of the
Lender* and nature, date of the
loan agreement & Purpose of
Loan
Amount
Sanctioned and availed
Working capital loan
aggregating to ` 160 million
comprising of:
Sanction Letter dated January 13,
(i) overdraft facility of ` 32
2012 and agreement dated March 1,
million;
2012
(ii) working capital demand
loan of ` 128 million;
Purpose: To meet the working
(As per terms and conditions
capital requirements.
of separate agreement
executed by the Company.)
Working capital Cash credit
Yes Bank Limited
facilities aggregating to ` 420
Loan Agreement dated November 9, million
2010, subsequently amended by
letters dated August 02, 2011 and
Working Capital Demand
March 31, 2012
Loan (sublimit of CC)
Syndicate Bank
Facility 1 – General News
Undertaking
Yes Bank Limited
Loan Agreement dated June 27,
2009, subsequently amended by
letters dated June 27, 2009, August
02, 2011 and March 31, 2012
Facility – Business News
Undertaking
Amount
Outstanding
Balance as on
July 31, 2012
(in ` million)
132.84
303.38
300.94
Working Capital Demand
loan of ` 500 million
(sublimit of CC limit)
(1) Buyers’ credit (Fresh
Sanction)
Loan Agreement dated March 5,
2010 and subsequently amended by Amount: ` 150 million only.
letters dated July 23, 2010 and
March 31, 2012
(1) (a) Letter of credit
(Usance)
Purpose: For import of equipment/ ( sub limit of buyers’ credit
capital expenditure requirement.
facility above)
( Fresh Sanction)
32
PLR+
0.75%
Not
Applicable
Bank
Base
Rate
+2.5%
Not Applicable
Yes bank
– bank
base rate
+ 2.5%
pa
Not Applicable
To be
decided
by the
lender at
the time
of each
disburse
ment
capital requirements
Yes Bank Limited
Prepayment
Clause
(if any)
To be
decided
by the
lender at
the time
of each
disburse
ment
Foreign Letter or Credit of
upto ` 100 million (sublimit
of Facility 1)
Cash Credit facility of ` 500
million.
Rate of
Interest
(% per
annum)
-
Buyers
credit
and LC
facilities
not
availed
Not Applicable
Name of the
Loan
Amount
Amount
Outstanding
Balance as on
July 31, 2012
(in ` million)
Rate of
Interest
(% per
annum)
Prepayment
Clause
(if any)
Amount: ` 150 million only.
(1) (b) Term Loan –II (Non–
revolving) (Sub Limit of
buyers’ credit facility above)
(Fresh Sanction)
33.33
Yes Bank
PLR –
4.5%,
3.17
13.50
Amount – ` 33.33 million
only.
Small Industries Development
Bank of India
Term loan aggregating to `
63.7 million
NA
Letter of Intent
dated February 7, 2007
Loan Agreement dated November
17, 2009
Purpose: For equipment purchase
Oriental Bank of Commerce
Facility for:
Sanction letter dated January 28,
2010
(i) cash credit (book debt) of
` 150.00 million;
(ii) bank guarantee of `
27.50 million; and
(iii) Term loan of ` 298.40
million.
127.49
Cash credit facility of ` 300
million
205.04
ING Vysya Bank Limited
15
Not Applicable
5.75
Sanction Letter June 7, 2012
Base
Rate +
2%1
NA
Agreement dated August 9, 2012
WCDL: ` 300 million (Sublimit of Cash Credit)
2% Prepayment Penalty
for WCDL
Letter of Credit: ` 60 million
(Sub-limit of Cash Credit)
Not Applicable
Kotak Mahindra Bank Limited
Cash credit facility of ` 100
million
Loan Agreement dated January 29,
2008
Further amended vide letter dated
August 11, 2011 and letter dated
September 27, 2011 whereby this
loan was transferred from
Television Eighteen to us
WCDL: ` 100 million (Sublimit of Cash Credit)
Letter of Credit: ` 70 million
Bank Guarantee: ` 70 million
(Sub-limit of Letter of Credit)
33
64.46
14.20
Not Applicable
Name of the
Loan
Amount
Amount
Outstanding
Balance as on
July 31, 2012
(in ` million)
Rate of
Interest
(% per
annum)
Prepayment
Clause
(if any)
Not
applicabl
e
Not applicable
13.50%
We shall have no right
to
prepay
the
outstanding principal
sum of the loan in full
or in part before the due
dates
except
after
obtaining
prior
approval in writing
from
LIC
.The
acceptance
of
premature repayment
shall be entirely at the
sole discretion of LIC
and it shall be subject
to such terms and
conditions including the
payment of premium, if
any
as
may
be
stipulated by LIC in
this behalf.
Mandatory prepayment
Any equity, preference
share or similar such
issuance by us or
Network18 will be used
to mandatorily prepay
all the outstanding
tranches under the
facility.
Any proceeds from sale
made
by
us
of
underlying shares will
be used to mandatorily
prepay
all
the
outstanding
tranches
under the facility.
Purchase/ import of studio
equipments such as camera, lighting
equipments, camcorders and other
business related equipments etc. To
also include import of equipments
like Transponders etc. for uplinking purposes
Issuance of guarantees
Kotak Mahindra Bank
` 240 million
Nil
Master facility agreement dated
March 1, 2012
Purpose:
Bank guarantee facility
Life Insurance Corporation of
India
Term loan of ` 800 million
432.60
Sanction Letter dated October 4,
2008.
Loan Agreement dated October 29,
2008
Purpose: General corporate
purpose.
ICICI Bank Limited
Term loan ` 3,000 million
Corporate Rupee loan facility
agreement dated June 25, 2012
Purpose: Capital expenditure and
repayment of fixed deposits
34
3,000
Bank
Rate
+2.5%
to be
reset on
April 1,
2012
Name of the
Loan
Amount
Yes Bank Limited
Term loan of `1,000 million
Term loan agreement dated March
1, 2012
Financial standby letter of
credit of ` 1,000 million
Amount
Outstanding
Balance as on
July 31, 2012
(in ` million)
1,000
Rate of
Interest
(% per
annum)
13%
Prepayment
Clause
(if any)
Voluntary prepayment
We may prepay any of
the
tranches
outstanding under the
facility in whole, by
providing written notice
to the lender 7 business
days in advance.
Not applicable
Purpose:
Long term working capital
requirements
Total
Sr.
no.
1.
2.
5,609.00
Particlulars
Status
Public Deposit
Commercial Papers
` 2,811.30 million as on July 31, 2012.
We have Commerical Papers amounting to ` 1,750 Million as on July 31, 2012.
* As certified by M/s. Mohan L. Jain & Co., Chartered Accountants vide their certificate dated August 22, 2012. Further,
M/s. Mohan L. Jain & Co., the Chartered Accountants have confirmed we have utilised the above said loan amounts for the
purposes for which the loans were availed.
The selection of loans proposed to be repaid and/or pre-paid from our loan facilities provided above shall be
based on various factors including, (i) any conditions attached to the loans restricting our ability to repay or prepay the loans, (ii) receipt of consents for pre-payment or waiver from any conditions attached to such prepayment from our respective lenders, (iii) terms and conditions of such consents and waivers, (iv) levy of any
pre-payment penalties and the quantum thereof, (v) provisions of any law, rules, regulations governing such
borrowings, and (vi) other commercial considerations including, among others, the interest rate on the loan
facility, the amount of the loan outstanding and the remaining tenor of the loan. We may undertake further
borrowings or refinance some or all of the above loans. The Net Proceeds of this Issue for the above stated
object may also be utilised for pre-payment/ repayment of any such further borrowings and refinance.
3.
General Corporate Purposes
We intend to deploy the balance Net Proceeds of ` 2,784 million for general corporate purposes as may be
approved by the Board of Directors or any duly authorised committee thereof, including:

Funding short term working capital requirements;
Investments in subsidiaries, joint ventures and associates;
Repayment of short term debt, if any; and
Meeting exigencies.
Issue related expenses
The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses,
advertisement expenses, and registrar and depository fees. The estimated Issue related expenses are as follows:
35
Particulars
Fees payable to intermediaries including Lead
Managers and Registrar to the Issue
Fees payable to Monitoring Agency
Others (printing and distribution, stationery, postage,
professional, advisory expenses, auditors fees, SEBI
fees, commission, brokerage, marketing expenses,
listing fees, depository fees, out of pocket
reimbursements, etc.)
Total estimated Issue expenses
Amount
(` in million)
30.66
As percentage
of total expenses
4.13
As a percentage
of Issue size
0.11
2.86
708.04
0.39
95.48
0.01
2.62
741.56
100.00
2.75
Interim use of proceeds
Our Board of Directors, in accordance with the policies formulated by them from time to time, will have
flexibility in deploying the Net Proceeds. Pending utilization of the Issue Proceeds for the purposes described
above, we intend to temporarily invest the funds in interest/ dividend bearing liquid instruments including
investments in mutual funds and other financial products, such as principal protected funds, derivative linked
debt instruments, other fixed and variable return instruments, listed debt instruments, rated debentures or
deposits with banks/ other entities etc. as per our existing investment policy or any other policy that may be
approved by our Board of Directors or any committee thereof, from time to time. Such investments would be in
accordance with the investment policies approved by our Board of Directors or any committee thereof
authorised by our Board of Directors, from time to time.
Bridge Financing Facilities
We have not raised any bridge loans from any bank or financial institution as on the date of this Letter of Offer,
which are proposed to be repaid from the Issue Proceeds.
Monitoring of Utilisation of Funds
We have appointed IFCI Limited as the monitoring agency to monitor the utilization of the Net Proceeds. We
shall disclose the utilization of the Net Proceeds under a separate head along with details, if any in relation to all
such Net Proceeds that have not been utilised thereby also indicating investments, if any, of such unutilized Net
Proceeds in our financial statements for the relevant Fiscals commencing from Fiscal 2013.
Pursuant to clause 49 of the Listing Agreement, we shall, on a quarterly basis, disclose to the Audit Committee
the uses and applications of the Net Proceeds. On an annual basis, we shall prepare a statement of funds utilised
for purposes other than those stated in this Letter of Offer and place it before the Audit Committee. Such
disclosure shall be made only until such time that all the Net Proceeds have been utilised in full. The statement
shall be certified by the Statutory Auditors. Furthermore, in accordance with clause 43A of the Listing
Agreements, we shall furnish to the Stock Exchanges on a quarterly basis, a statement including material
deviations if any, in the utilisation Issue Proceeds. This information will also be published in newspapers
simultaneously with the interim or annual financial results, after placing the same before the Audit Committee.
The key industry regulations for the proposed objects of the Issue are not different from our existing business.
No part of the Issue Proceeds will be paid by us to the Promoter and Promoter Group, the Directors, our key
management personnel, associates or companies promoted by the Promoters, except in the usual course of
business.
36
SECTION IV - STATEMENT OF TAX BENEFITS
To
The Board of Directors
Registered Office:
503, 504 & 507, 5th Floor,
‘Mercantile House’, 15,
Kasturba Gandhi Marg,
New Delhi- 110001
Corporate Office:
Express Trade Tower,
Plot No. 15-16,
Sector 16A
Noida- 201301 (Uttar Pradesh.)
Dear Sirs,
Subject: Statement of Possible Tax Benefits available to the Company and its Shareholders
We hereby certify that the enclosed annexure states the possible tax benefits available to TV18 Broadcast
Limited (“the Company”) and to the shareholders of the Company under the provisions of the Income-tax Act,
1961 and Wealth Tax Act, 1957, presently in force in India. Several of these benefits are dependent on the
Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability
of the Company or its shareholders to derive tax benefits is dependent upon fulfilling such conditions, which is
based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill.
The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide
general information to the investors and is neither designed nor intended to be a substitute for professional tax
advice. A shareholder is advised to consult his/ her/ their own tax consultant with respect to the tax implications
arising out of their participation in the proposed Rights Issue of equity shares of the Company particularly in
view of ever changing tax laws in India.
We do not express any opinion or provide any assurance as to whether:

The Company or its shareholders will continue to obtain these benefits in future; or
The conditions prescribed for availing the benefits have been / would be met.
The contents of this annexure are based on information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the Company and
the provisions of the Income- Tax Act, 1961 and Wealth Tax Act, 1957. The same shall be subject to notes to
this annexure.
No assurance is given that the revenue authorities/ Courts will concur with the views expressed herein. Our
views are based on existing provisions of the law and its interpretation, which are subject to change from time
to time. We do not assume any responsibility to update the views consequent to such changes. We shall not be
liable to the Company for any claims, liabilities or expenses relating to this assignment except to the extent of
the fees relating to this assignment, as finally judicially determined to have resulted primarily from bad faith or
intentional misconduct. We are not liable to any person other than the Company in respect of this statement.
This report is intended solely for your information and for the inclusion in the Offer Document in connection
with the proposed right issue of the Company and is not to be used, referred to or distributed for any other
purpose without our prior written consent.
37
For Mohan L Jain & Co.
CA. Amit Kumar Goyal
Partner
Membership No. 509499
Place: New Delhi
Date: 17 August 2012
38
Taxation
The information provided below sets out the possible tax benefits available to the shareholders and the
Company in a summary manner only and is not a complete analysis or listing of all potential tax consequences
of purchase, ownership and disposal of equity shares, under the current taxation laws presently in force in
India. It is not exhaustive or comprehensive and is not intended to be a substitute for professional advice.
YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE INDIAN TAX
IMPLICATIONS AND CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF EQUITY
SHARES IN YOUR PARTICULAR SITUATION.
The following is based on the provisions of the Income-tax Act, 1961 (IT Act or the Act) as of the date hereof.
The IT Act is amended by the Finance Act every fiscal year.
BENEFITS AVAILABLE TO THE COMPANY- UNDER THE IT ACT
1. Special Tax benefits available to the Company
No special tax benefit is available to the Company.
2. General tax benefits available to the Company under the IT Act
A) Business Income:
A.i. Depreciation
The Company is entitled to claim depreciation on specified tangible (being Buildings, Plant & Machinery,
Computer and Vehicles) and intangible assets (being Knowhow, Copyrights, Patents, Trademarks, Licenses,
Franchises or any other business or commercial rights of similar nature acquired on or after 1st April, 1998)
owned by it and used for the purpose of its business under section 32 of the Act.
In case of any new plant and machinery (other than ships and aircraft) that will be acquired and installed by the
Company engaged in the business of manufacture or production of any article or thing, the Company will be
entitled to a further sum equal to twenty per cent of the actual cost of such machinery or plant subject to
conditions specified in section 32 of the Act.
Unabsorbed depreciation if any, for an Assessment Year (AY) can be carried forward and set off against any
source of business income in subsequent AYs as per section 32 (2) subject to the provisions of sub-section (2) of
section 72 and sub-section (3) of section 73 of the Act.
A.ii. Preliminary Expenditure:
As per Section 35D, the Company is eligible for deduction in respect of specified preliminary expenditure
incurred by the Company in connection with extension of its industrial undertaking or in connection with setting
up a new industrial unit for an amount equal to 1/5th of such expenses over 5 successive AYs subject to
conditions and limits specified in that section.
A.iii Expenditure incurred on voluntary retirement scheme:
As per Section 35DDA, the Company is eligible for deduction in respect of payments made to its employees in
connection with his voluntary retirement for an amount equal to 1/5th of such expenses over 5 successive AYs
subject to conditions specified in that section.
A.iv Expenditure on Scientific Research:
As per Section 35, the Company is eligible for –

Deduction in respect of any expenditure (not being in the nature of capital expenditure) on scientific
39
research related to the business subject to conditions specified in that section.

As per section 35(2AA) a deduction of 175% shall be allowed as a deduction of the sum paid by the
Company, to a National Laboratory [or a University or an Indian Institute of Technology or a specified
person as specified in this section] with a specific direction that the sum shall be used for scientific
research undertaken under a programme approved in this behalf by the specified authority subject to
conditions specified in that section.
A.v. Carry forward of business loss
Business losses if any, for any AY can be carried forward and set off against business profits for eight
subsequent AYs.
A.vi. MAT Credit:
As per section 115JAA(1A), the Company is eligible to claim credit for Minimum Alternate Tax (“MAT”) paid
under sub-section (1) of section 115JB for any AY commencing on or after April 1, 2006 against normal income
tax payable in subsequent AYs. MAT credit shall be allowed under sub-section (1A) shall be the difference of
the tax paid for any assessment year under sub-section (1) of section 115JB and the amount of tax payable by
the assessee on his total income computed in accordance with the other provisions of this Act.
The amount of tax credit determined shall be carried forward and set off up to 10 (Ten) AYs immediately
succeeding the assessment year in which tax credit becomes allowable.
All the deductions mentioned above, will result in a reduction in tax liability of the Company.
B) Capital Gains :
B.i. Capital asset means property of any kind held by an assessee whether or not connected with his business or
profession but does not include any stock-in-trade, consumables stores or raw materials held for the purpose of
his business or profession and personal effects i.e. movable property held for personal use.
Capital assets may be categorised into short term capital assets and long term capital assets based on the period
of holding.
Shares in a company, listed securities or units of UTI or units of mutual fund specified under section 10 (23D)
or zero coupon bond will be considered as long term capital assets if they are held for a period exceeding twelve
months. In case of all other assets if the period of holding exceeds thirty six months they are termed as long term
capital assets.
B.ii.a. Long term Capital Gain (LTCG)
LTCG means capital gain arising from the transfer of a long term capital asset.
B.ii.b. Short Term Capital Gain (STCG)
STCG means gain arising out of transfer of capital asset being share held in a company or any other security
listed in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutual fund
specified under clause (23D) of section 10, held by an assessee for 12 months or less.
In respect of any other capital asset, STCG means capital gain arising from the transfer of capital asset, held by
an assessee for 36 months or less.
B.iii. LTCG arising on transfer of equity share in a Company or units of an equity oriented fund (as defined)
which has been set up under a scheme of a Mutual Fund specified under Section 10 (23D), on a recognized
stock exchange on or after October 1, 2004 are exempt from tax under Section 10(38) of the Act provided the
transaction is chargeable to securities transaction tax (“STT”) and subject to conditions specified in that section.
However, the income by way of long term capital gain of a Company exempted under section 10 (38) shall be
taken into account in computing book profit and income tax payable under section 115JB @ 18.5% plus
applicable Surcharge and Education Cess (“SC+EC”)on tax.
40
B.iv. As per second proviso to section 48, LTCG arising on transfer of capital assets, other than bonds and
debentures excluding capital indexed bonds issued by Government, is to be computed by deducting the indexed
cost of acquisition and indexed cost of improvement from the full value of consideration.
B.v.a. As per section 112, LTCG is taxed @20% plus applicable SC +EC.
B.v.b. However as per proviso to section 112(1), if such tax payable on transfer of listed securities/ units /Zero
coupon bonds exceeds 10% of the LTCG, without availing benefit of indexation, the excess tax will be ignored.
B.vi. As per section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented mutual
fund (as defined) under Section 10(23D), on a recognized stock exchange are subject to tax at the rate of 15%
(plus applicable SC + EC), provided the transaction is chargeable to STT.
B.vii. As per section 71 read with section 74, Short-term capital loss arising during a year is allowed to be setoff against short-term as well as long-term capital gains of the said year. Balance loss, if any, should be carried
forward and set-off against short-term as well as long-term capital gains for subsequent 8 assessment years.
B.viii. As per section 71 read with section 74, Long-term capital loss arising during a year is allowed to be setoff only against long-term capital gains. Balance loss, if any, should be carried forward and set-off against
subsequent year’s long-term capital gains for subsequent 8 assessment years.
B.ix. Under section 54EC of the Act, capital gains arising on the transfer of a long-term capital asset will be
exempt from capital gains tax if such capital gains are invested within a period of 6 months after the date of such
transfer in specified bonds issued by the following and subject to the conditions specified therein –

National Highways Authority of India constituted under section 3 of National Highways Authority of
India Act, 1988.
Rural Electrification Corporation Limited, a Company formed and registered under The Companies
Act, 1956
If only a part of the capital gains is so reinvested, the exemption shall be proportionately reduced. However,
after 1st April, 2007, to avail the benefit of section 54EC, the investment made in specified long term bonds
should not exceed Rupees Fifty Lacs.
If the new bonds are transferred or converted into money within three years from the date of their acquisition,
the amount so exempted shall be taxable in the year of transfer.
C) Income from Other Sources
C.1 Dividend Income:
Dividend (both interim and final) income, if any, received by the Company on its investment in shares of
another domestic company shall be exempt from tax under Section 10(34) read with Section 115-O of the Act.
Income received in respect of units of a mutual fund specified under Section 10(23D) of the Act shall be exempt
from tax under Section 10(35) of the Act, subject to certain conditions as per the section 10(23D) of the Act.
C.2 Tax Benefits available from Income of Trust registered as Association of Persons
Where the assessee is a member of an association of persons or body of individuals (other than a company or a
co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any
law corresponding to that Act in force in any part of India), income-tax shall not be payable by the assessee in
respect of his share in the income of the association or body computed in the manner provided in section 67A.
Where the association or body is chargeable to tax on its total income at the maximum marginal rate or any
higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be
included in his total income.
Where no income-tax is chargeable on the total income of the association or body, the share of a member
41
computed as aforesaid shall be chargeable to tax as part of his total income and nothing contained in this section
shall apply to the case.
The tax benefit pertaining to company outlined above (para 2) are general and all the benefits may not be
availed by/available to the Company.
3. Special Tax benefits available to the members of the Company
No special Tax benefits are available to the members of the Company.
4. General Tax benefits available to the Members of the Company
4.1 Resident Members
4.1.i Dividend income:
Dividend (both interim and final) income, if any, received by the resident shareholder from a domestic
Company is exempt under Section 10(34) read with Section 115O of the Act.
4.1.ii Capital gains:

Benefits outlined in Paragraph 2(B) above are also applicable to resident shareholders. In addition to
the same, the following benefits are also available to resident shareholders.

As per Section 54F of the Act, LTCG arising to individual and HUF from transfer of shares
(transferred other than through stock exchange) will be exempt from tax, if net consideration from such
transfer is within a period of one year before, or two years after the date of transfer, in purchase of a
new residential house, or for construction of residential house within three years from the date of
transfer and subject to conditions and to the extent specified therein.
4.1.iii Clubbing of Income:
Any income of minor children clubbed with the total income of the parent under section 64(1A) of the Act, will
be exempt from tax to the extent of Rs. 1500/- per minor child under section 10(32) of the Act.
4.1.iv Expense on STT
Any amount paid as security transaction tax will be treated as business expense, if trading of shares is treated as
business transactions.
4.2 Tax Benefits available to Non-Resident Members
4.2.i Dividend income:
Dividend (both interim and final) income, if any, received by the non-resident shareholders from a domestic
company shall be exempt under section 10(34) read with Section 115-O of the Act.
4.2.ii Capital gains:
Benefits outlined in Paragraph 2(B) above are also available to a non-resident shareholder except that as per first
proviso to Section 48 of the Act, capital gains arising on transfer of capital assets being shares of an Indian
Company need to be computed by converting the cost of acquisition, expenditure in connection with such
transfer and full value of the consideration received or accruing as a result of the transfer into the same foreign
currency in which the shares were originally purchased. The resultant gains thereafter need to be reconverted
into Indian currency. The conversion needs to be at the prescribed rates prevailing on dates stipulated. Further,
the benefit of indexation as provided in second proviso to section 48 is not available to non-resident
shareholders.
As per section 10(38) of the Act, long term capital gains arising to the shareholder from the transfer of a long
42
term capital asset being an equity share in the company, where such transaction is chargeable to securities
transaction tax would not be liable to tax in the hands of the shareholder.
Benefit u/s 54EC and 54F as outlined in paragraph (B.ix) and (4.1.ii) respectively are also available to Nonresident member.
4.2.iii Expense on STT:
Benefits outlined in Paragraph 4.1.iv above are also applicable to the non-resident shareholder.
4.2.iv Tax Treaty Benefits:
As per Section 90 of the Act, the shareholder can claim relief in respect of double taxation, if any, as per the
provision of the applicable Double Tax Avoidance Agreements.
4.2.v Special provisions in respect of income / LTCG from specified foreign exchange assets available to
Non resident Indians under Chapter XII-A
4.2.v.a. Non-Resident Indian (NRI) means a citizen of India or a person of Indian Origin who is not a resident.
A person is deemed to be of Indian Origin if he or she, or either of his parents or any of his grand-parents, were
born in undivided India.
4.2.v.b. Specified foreign exchange assets include shares of an Indian Company acquired/purchased/subscribed
by NRI in convertible foreign exchange.
4.2.v.c . As per section 115E, income [other than dividend which is exempt under section 10(34)] from
investments and LTCG from assets (other than specified foreign exchange assets) shall be taxable @ 20% (plus
applicable SC + EC). No deduction in respect of any expenditure allowance from such income will be allowed
and no deductions under chapter VI-A will be allowed from such income.
4.2.v.d. As per section 115E, LTCG arising from transfer of specified foreign exchange assets shall be taxable
@ 10% (plus applicable SC + EC).
4.2.v.e. As per section 115F, LTCG arising from transfer of foreign exchange assets shall be exempt in the
proportion of the net consideration from such transfer being invested in specified assets or savings certificates
within six months from date of such transfer, subject to further conditions specified under section 115F.
4.2.v.f. As per section 115G, if the income of a NRI taxable in India consist only of income/ LTCG from such
shares and tax has been properly deducted at source in respect of such income in accordance with the Act, it is
not necessary for the NRI to file return of income under section 139.
4.2.v.g.As per section 115H of the Act, when a non-resident Indian become assessable as a resident in India,
he/she is entitled to furnish a declaration in writing to the Assessing Officer along with the return of income to
the effect that the provisions of Chapter XII-A shall continue to apply to him in relation to such investment
income derived from the specified assets for that year and subsequent assessment years until such assets are
transferred or otherwise converted into money.
4.2.v.h As per section 115I of the Act, a non-resident Indian may elect not to be governed by the provisions of
Chapter XII-A for any assessment year by furnishing the return of income for that year under Section 139 of the
Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and,
accordingly, his total income for that assessment year will be computed in accordance with the other provisions
of the Act.
4.2.vi. Any income of minor children clubbed with the total income of the parent under section 64(1A) of the IT
Act, will be exempt from tax to the extent of Rs. 1,500 per minor child under section 10(32) of the IT Act.
43
4.3 Tax Benefits available to Foreign Institutional Investors (FIIs)
4.3.1 Dividend income:
Dividend (both interim and final) income, if any, received by the shareholder from the domestic company shall
be exempt under Section 10(34) with Section 115O of the Act.
4.3.2 Capital Gains:
Under Section 115AD, income (other than income by way of dividends referred in Section 115-O) received in
respect of securities (other than units referred to in Section 115AB) shall be taxable at the rate of 20% (plus
applicable SC & EC). No deduction in respect of any expenditure /allowance shall be allowed from such
income.
Under Section 115AD, capital gains arising from transfer of securities (other than units referred to in Section
115AB), shall be taxable as follows:
As per section 111A, STCG arising on transfer of securities where such transactions is chargeable to STT, shall
be taxable at the rate of 15% (plus applicable SC + EC). STCG arising on transfer of securities where such
transaction is not chargeable to STT, shall be taxable at the rate of 30% (plus applicable SC + EC)
LTCG arising on transfer of securities where such transaction is not chargeable to STT, shall be taxable at the
rate of 10% (plus applicable SC + EC). The benefits, as mentioned under 1st and 2nd proviso to section 48
would not be allowed while computing the capital gains.
4.3.3. Exemption of capital gains from Income tax
4.3.3.i. LTCG arising on transfer of securities where such transaction is chargeable to STT is exempt from tax
under Section 10(38) of the Act.
4.3.3 ii. Benefit of exemption under Section 54EC shall be available as outlined in Paragraph 2(B)(ix) above.
4.3.4 Expenses on STT
Benefit as outlined in Paragraph 4.1.iv above are also available to FIIs.
4.3.5 Tax Treaty Benefits
As per Section 90 of the Act, a shareholder can claim relief in respect of double taxation, if any, as per the
provisions of the applicable double tax avoidance agreements.
4.4 Tax Benefits available to Mutual Funds
As per the provisions of Section 10(23D) of the Act, any income of mutual funds registered under the Securities
and Exchange Board of India Act, 1992 or Regulations made there under, the mutual funds set up by public
sector banks or public financial institutions and mutual funds authorized by the Reserve Bank of India, would be
exempt from income tax, subject to the prescribed conditions.
4.5 Tax Benefits available to Venture Capital Companies/Funds
Under Section 10(23FB) of the IT Act, any income of Venture Capital Companies/Funds (set up to raise funds
for investment in venture capital undertaking notified in this behalf) registered with the Securities and Exchange
Board of India would be exempt from income tax, subject to conditions specified therein. ‘Venture capital
undertaking’ means a domestic company whose shares are not listed in a recognized stock exchange in India and
which is engaged in following:

business of- nanotechnology;
- information technology relating to hardware and software development;
44
-

seed research and development;
bio-technology;
research and development of new chemical entities in the pharmaceutical sector;
production of bio-fuels;
building and operating composite hotel-cum-convention centre with seating capacity of more
than three thousand; or
- developing or operating and maintaining or developing, operating and maintaining any
infrastructure facility as defined in the Explanation to clause (i) of Section 80IA(4) of the IT
Act; or
dairy or poultry industry.
As per Section 115U of the IT Act, any income derived by a person from his investment in venture capital
companies/ funds would be taxable in the hands of the person making an investment in the same manner as if it
were the income received by such person had the investments been made directly in the venture capital
undertaking.
5. Wealth Tax Act, 1957
Shares in a company held by a shareholder are not treated as an asset within the meaning of Section 2(ea) of
Wealth Tax Act, 1957; hence, wealth tax is not leviable on shares held in a company.
6. The Gift Tax Act, 1957
Gift of shares of the Company made on or after October 1, 1998 are not liable to Gift tax. However, a new
clause (vii) has been inserted in section 56(2) of IT Act to tax gift in kind (gift of shares etc.) received by and
individual or a HUF with effect from 1st October 2009.
7. Security Transaction Tax (STT)
STT in respect of any taxable securities transaction shall be collected from the seller or the buyer, on the value
of such transaction, by every recognized stock exchange or the prescribed person in case of any Mutual Fund, at
the rate specified in section 98 of the Act
8. Notes:
All the above benefits are as per the current tax laws and will be available only to the sole/first named
holder in case the shares are held by joint holders. Some or all of the tax consequences may be
modified or amended by future amendments to the tax laws.

In respect of non-residents, the tax rates and the consequent taxation mentioned above will be further
subject to any benefits available under the relevant DTAA, if any, between India and the country in
which the non-resident has fiscal domicile.

In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax
advisor with respect to specific tax consequences of his/her participation in the issue.

The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary
manner only and is not a complete analysis or listing of all potential tax consequences of the purchase,
ownership and disposal of shares.
For Mohan L Jain & Co.
CA. Amit Kumar Goyal
Partner
17 August 2012
45
SECTION V – ABOUT US
INDUSTRY OVERVIEW
The information in this chapter is derived from market research reports, analyst reports and other publicly
available sources, including the 2012 FICCI-KPMG Indian Media and Entertainment Industry Report (“2012
FICCI KPMG Report”). We have taken reasonable care in the extraction, compilation and reproduction of
information and data presented in this chapter and elsewhere in this Letter of Offer. Neither we, nor the Lead
Managers, or any of their respective affiliates or advisors has independently verified the information presented
in this section from their sources. Such information may not be consistent with other information from other
sources and no representation is given as to its accuracy.
The Indian Media and Entertainment Industry
Growing Indian Media and Entertainment Industry. The Indian media and entertainment industry has been
aided by India’s economic liberalization and growth. According to the 2012 FICCI-KPMG Report, Indian media
and entertainment industry revenues were ` 728 billion in 2011 compared to ` 652 billion in 2010,
demonstrating a growth rate of 12%. Backed by strong consumption in Tier 2 and 3 cities, continued growth of
regional media and fast increasing new media businesses, the industry is estimated to achieve a growth of 13 %
in 2012 to reach ` 823 billion. Going forward, the Indian media and entertainment sector is projected to grow at
a healthy compounded annual growth rate of 14.9 % to reach INR 1,457 billion by 2016 according to the 2012
FICCI-KPMG Report.
The following table illustrates Indian media and entertainment industry growth by segment from 2007 to 2016:
(` in billion)
Overall
2007 2008
2009 2010
2011 Growth 2012(1) 2013(1) 2014(1) 2015(1)
Industry
in 2011
Size
over
(`` billion)
2010
Television(2)
211
241
257
297 329.0
10.8% 380.0 435.0 514.0 618.0
Print
160
172 175.2 192.9 208.8
8.3% 226.0 246.8 270.0 294.9
Film(2)
92.7 104.4
89.3
83.3
92.9
11.5% 100.0 109.7 121.1 134.5
Radio
7.4
8.4
8.3
10
11.5
15.0%
13.0
16.0
20.0
24.0
Music
7.4
7.4
7.8
8.6
9.0
4.7%
10.0
11.3
13.1
15.4
Out of
14
16.1
13.7
16.5
17.8
7.6%
19.5
21.5
23.6
26.0
Home
Animation
14
17.5
20.1
23.6
31.0
31.2%
36.3
43.0
51.1
61.0
and VFX
Gaming
4
7
8
10
13.0
30.0%
18.0
23.0
29.0
37.0
Digital
4
6
8
10
15.4
54.0%
19.9
25.8
33.5
43.7
Advertising
Total
514
580
587
652
728
11.7%
823
932
1076
1254
Source: 2012 FICCI-KPMG Report
(1)Projected
(2)Emphasis added to segments in which we currently operate in.
2016(1)
735.0
323.4
150.3
29.5
18.2
29.0
CAGR
%
(201116) (1)
17%
9%
10%
21%
15%
10%
69.0
17%
46.0
57.0
29%
30%
1457
14.9%
Increasing Media Penetration. Television is the largest medium for media delivery in India in terms of
revenue, representing around 45% of the total media industry. The television industry continues to have
headroom for further growth as television penetration in India is still at approximately 60% of total households.
According to the 2012 FICCI-KPMG Report, India was estimated to have around 146 million television
households in 2011, which implies a television penetration of approximately 60%. In 2016, television
penetration is estimated to rise to approximately 70 %, which still offers potential for penetration-led growth
(post 2016) as income levels rise, based on television penetration levels in other mature as well as emerging
economies. Average television viewing time in India continues to be low vis-a-vis developed economies. Thus,
there is potential for growth not only in terms of penetration / reach, but also in terms of viewing time.
According to the 2012 FICCI-KPMG Report, seminal change is being brought about by the proliferation of
screens – making media consumption more personal than ever. Smart phones, tablets, PCs, gaming devices - all
form the foundation of a new wave in media usage. This is gradually impacting the way content is being created
and distributed. Multiple media including television, films, news, radio, music etc are being impacted with this
change.
46
The Indian Television Industry
Third Largest Television Market. India is the world’s third largest television market (following China and the
United States), according to the 2012 FICCI-KPMG Report. The number of households with televisions in India
grew to reach 146 million in 2011 compared to 138 million in 2010, according to the 2012 FICCI-KPMG
Report. According to the 2012 FICCI-KPMG Report, Cable and Satellite (C&S) penetration of television
households is close to 80%, with DTH driving a significant part of the growth in the last 12 months. With the
impending digitisation of all analog cable subscribers imminent, penetration level of digital households is
expected to increase significantly, going forward. The industry is expected to grow at a compounded annual
growth rate of 17% from 2011 to 2016, according to the 2012 FICCI-KPMG Report.
Increasing Television Advertising Revenues. While there has been a significant increase in advertisement
inventory, advertisement rates have generally remained flat or declined in 2011, with advertisers cutting
advertisement budgets due to the global and domestic economic slowdown. However, with a large number of
untapped advertisers who are currently using only the print platform, there is potential for further growth for
television. According to the 2012 FICCI-KPMG Report, television advertising revenue recorded a growth of
13% from the revenue generated in 2010, which is lower than 15% projected earlier. Television advertising
revenues are projected to grow at a compounded annual growth rate of 15% from 2011 to 2016 according to the
2012 FICCI-KPMG Report.
Growing Subscription Revenues. Subscription revenue for broadcasters is estimated to grow at a CAGR of 30%
from 2011 to 16, driven by higher declaration as a result of digitization, as well as increased bargaining power
of broadcasters through aggregation of distribution as per the 2012 FICCI-KPMG Report. According to the
2012 FICCI-KPMG Report, for mature broadcasters, a significant share of subscription revenues is expected to
flow to the bottom line. While broadcasters re-align their revenue model, decreasing dependence on
advertisement revenues, sustaining strong subscription revenues may require broadcasters to reengineer their
offering and deliver high quality content to the consumer, according to the 2012 FICCI-KPMG Report. The
proposed digitization also provides an opportunity for the number of channels go up and the niche channels to
increase their offering, according to the 2012 FICCI-KPMG Report.
The following graph shows the projected growth of Indian advertising and subscription revenues from 2011 to
2016:
Broadcasting Industry
` billion
% of Total Revenue
Relatively Low Viewership. According to the 2012 FICCI-KPMG Report, the number of cable and satellite
households increased by 11 million during 2011 to reach 119 million. Penetration of cable and satellite homes
increased from 78% of total television households in 2010 to 81% in 2011. However, as per the 2012 FICCIKPMG Report, the average television viewing time in India continues to be low vis-a-vis developed economies.
According to the 2012 FICCI-KPMG Report, in 2016, television penetration is estimated to rise to
approximately 70 %, which still offers potential for penetration-led growth (post 2016) as income levels rise,
based on television penetration levels in other mature as well as emerging economies. Thus, there is potential for
47
growth not only in terms of penetration / reach, but also in terms of viewing time as per the 2012 FICCI-KPMG
Report.
The following graph shows the television penetration in select countries (2011):
Flat Average Revenue per User. According to 2012 FICCI-KPMG Report, ARPUs in India appear to be
depressed largely due to the prevalence of analog cable, and competition due to fragmentation of the industry.
During implementation of digitization, ARPUs may continue to be under pressure, as MSOs and DTH operators
target the same subscriber base. However, digitization will also create the opportunity to introduce new and
niche channels. This may drive demand for specific content according to 2012 FICCI-KPMG Report.
Accordingly, ARPUs are expected to grow at a faster pace as digitization progresses across the various phases,
according to the same report.
Current Structure of Indian Television Industry
The following chart illustrates the current structure of the Indian television industry:
Broadcaster
(TV Channel)
Broadcaster
(TV Channel)
Broadcaster
(TV Channel)
Broadcaster
(TV Channel)
M ulti System
Operator (M SO)
DTH Operator
Independent
Cable Operator
Local Cable
Operator
Primary
analogue
Primary
digital
Secondary
digital
Local Cable
Operator (LCO)
Secondary
analogue subs
Undeclared
analogue subs
Local Cable
Operator (LCO)
Primary
analogue subs
Secondary
analogue subs
Undeclared
analogue subs
Primary
digital
Decrypted signal
Encrypted signal
Digitization of Indian Television Industry
As per the 2012 FICCI-KPMG Report, the cable television industry in India is poised for one of its most
significant developments in the last decade – a transformation to the Digital Addressable System (DAS) for
television distribution. Cable operators in a DAS regime would be legally bound to transmit only digital signals.
Subscribed channels can be received at the customer’s premises only through a set-top-box equipped with a
conditional access card, and a subscriber management system (SMS). In a nut-shell, each user in the network
48
would be uniquely identifiable to the service provider.
Digital television is expected to provide the consumer access to a higher number of television channels,
customized tariffs, availability of broadband and other value-added-services, and enhanced user experience
through better viewing quality and consumer service according to the 2012 FICCI-KPMG Report.
As per the 2012 FICCI-KPMG Report, an August 2010 report by TRAI recommending complete digitization of
the cable sector revived the digitization efforts. With the parliament clearing the bill to amend the Cable
Television Networks (Regulation) Act in December 2011, the stage has now been set for a significant transition
to the digital addressable system, to be implemented across India in four phases. However, this is currently in
ordinance form, and the Cable television Act will need to be amended to allow for a smooth roll out of
digitization. Some of the changes relate to new licensing requirements of a MSO, revenue share arrangements,
etc according to the 2012 FICCI-KPMG Report. TRAI also expects the likely completion of the National
Broadband Plan by 2013 to provide the necessary impetus to digitization due to nation-wide availability of fibre
optic network according to the 2012 FICCI-KPMG Report.
The following graph shows the projected number of analog and digital television subscribers in India from 2011
to 2016:
Analog and Digital Television Subscribers
Number of Subscribers (millions)
Digitization will benefit broadcasters, distributors and viewers. Digitization allows broadcasters and distributors
to accurately determine viewership numbers, reducing the under-reporting of subscribers by local cable
operators. As this trend continues, an increasing proportion of subscription revenues will shift from local-cable
operators to broadcasters and multi-system operators. Digitization offers viewers better quality picture and
sound, significantly more channels and value-added services, such as electronic program guides, video-ondemand and pay-per-view.
The DTH segment continued to expand in India, reaching a gross subscriber base of around 44 million at the
end of 2011. On a net basis, this is estimated to translate into a subscriber base of 37 million. This represents a
31% penetration of DTH within the C&S subscriber base, compared to 26% in 2010 according to the 2012
FICCI-KPMG Report. As per the said Report, the market appears to be large enough to accommodate both
digital cable as well as DTH service providers.
The power equation is expected to shift towards MSOs over the next three years
As per the 2012 FICCI-KPMG Report, in the absence of digital addressability, the industry estimates that a local
cable operator declares only 15% to 20% of his actual subscriber base to the MSOs. Subscriber declaration
levels are expected to increase to 100 % post digitization. However, revenue share between various stakeholders
may continue to be negotiation driven. The revenue share is expected to evolve as digitization progresses.
Broadcasters and MSOs are expected to see a significant increase in their bargaining power over local cable
operators.
49
With digital addressability and eventual control of the subscriber, the television distribution industry is expected
to see a significant shift in power away from the local cable operators towards the MSO. Post complete
digitization, the MSO would own and control the infrastructure and generate the bill using the subscriber
management system. The local cable operator is expected to take up the role of a collection and servicing agent
of the MSO according to the 2012 FICCI-KPMG Report.
Genres
Hindi GECs led among the genres with a 27.4% share of viewership, but witnessed a decrease from the 2010
figure of 29.6%. Nevertheless, this genre is expected to continue its dominant position going forward. South
channels followed with a viewership share of 23.7%. Hindi movies followed by, with a genre share of 11.9 %
while the Kids genre stayed flat at 6.3% as per the 2012 FICCI-KPMG Report.
The following graph shows the viewership share by genres in the year 2011:
Multi-screen television content consumption
Indian consumers are beginning to consume television content on non-television devices like smart-phones,
tablets, and personal computers. India is reported to have a subscriber base of one million active users of mobile
television, while six million active subscribers have access to 3G services as per the 2012 FICCI-KPMG Report.
According to 2012 FICCI-KPMG Report, while mobile television is yet to pick up in India on a large scale,
broadcasters and telecom service providers have already launched television-on-the-go services in larger mobile
markets. In 2011, MTNL launched mobile television services for its 2G and 3G subscribers in Mumbai and
Delhi.
Digitization will also open up avenues for broadcasters to launch subscription driven, specialty channels in
India. On the lines of international markets, niche channels dedicated to cooking, gardening, gaming,
automobiles, health or education may find flavor in India. Addressability also provides an opportunity for
broadcasters to insert localized content and advertising, translating into premium advertisement rates.
The Indian Film Industry
The Indian film industry was estimated to be ` 93 billion in 2011 indicating a growth of 11.5 % vis-à-vis 2010
according to the 2012 FICCI-KPMG Report. Quality content combined with the revival of Hindi films with
mass connect improved the occupancy rates which in-turn increased domestic box-office collections. According
to the 2012 FICCI-KPMG Report, competitive bidding by broadcasters for large budget films resulted in 26%
growth of Cable and satellite rights. Albeit on a small base, ancillary revenues such as licensing and
merchandising, in-cinema advertising and pay per view also displayed strong growth in 2011. The Home video
50
segment was the only exception to the growth trend with most filmmakers ceasing to consider this as a major
line-item in their revenue estimations according to the 2010 FICCI-KPMG Report.
According to the 2012 FICCI-KPMG Report, India continues to be a severely under-screened market resulting
in competitive jostling by films to garner domestic theatrical revenues – roughly 10 films struggle for screenspace every Friday. In addition, an unfavorable tax regime and lack of quality shooting space have hampered the
industry’s growth to its full potential.
Overall Film Industry Size
` Billion
51
BUSINESS
This section should be read in conjunction with, and is qualified in its entirety by, the more detailed information
about us and our financial statements, including the notes thereto, the “Risk Factors” and “Financial
Statements” on pages XIV and 74 respectively.
Overview
We are part of the Network18 Group, operating one of India’s popular television broadcasting network. We
operate five news channels CNBC-TV18, CNBC Awaaz, CNN IBN, IBN-7 and IBN-Lokmat (a Marathi regional
news channel in partnership with the Lokmat group). We have recently launched CNBC-TV18 in high definition
i.e. CNBC-TV18 Prime HD. We also operate general entertainment channels – Colors, Colors HD, MTV India
VH1, Nick, Sonic and Comedy Central (through Viacom 18, a joint venture with Viacom Inc.) and HistoryTV18
(through AETN18, our subsidiary, in which we hold 51% interest and the remaining 49% interest is held by
A&E Television Networks LLC). We also operate filmed entertainment business through Viacom18 Motion
Pictures, division of Viacom18. Our news and entertainment segments are engaged in the programming,
production and broadcasting of news and general entertainment and the acquisition, production, syndication,
marketing and distribution of films.
In June 2012, we announced a strategic joint venture with Viacom18 to create a multi-platform ‘Content Asset
Monetization’ entity called “IndiaCast”, which shall drive domestic, and international channel distribution
across all platforms, including Cable, DTH, IPTV, HITS and MMDS, placement services and content
syndication for the channels currently operated by us and the ETV Channels, post completion of ETV
Acquisition. As on the date of this Letter of Offer, IndiaCast is our wholly owned subsidiary.
We have entered into a Content License Agreement with the Infotel, a subsidiary of RIL for transmission of our
content through its 4G Broadband network. Infotel shall have preferential access to the content provided by
Network18 Group on first right basis.
We generate revenue primarily through the sale of advertisements and sponsorships and subscription to our
television channels. We aggregate our channels and distribute them through IndiaCast all over India, except in
Tamilnadu and Pondicherry, where Sun18 shall have distribution rights until March 31, 2013.
TV18
50%
51%
50%
AETN18 Media
Private Limited
Viacom18 Media Private
Limited
IBN Lokmat News
Private Limited
100%
100%
Proposed
Recent developments
IndiaCast Media
Distribution Private
Limited
The Indian Film
Company Limited,
Cyprus
We have in June, 2012, announced a strategic joint venture with Viacom18 to create a multi-platform ‘Content
Asset Monetization’ entity to be called “IndiaCast”, which either by itself or through its subsidiary, shall drive
domestic, and international channel distribution across all platforms, including Cable, DTH, IPTV, HITS and
MMDS, placement services and content syndication for the channels currently operated by us and the ETV
Channels, post completion of ETV Acquisition in all states of India and abroad. As on the date of this Letter of
Offer, IndiaCast distributes channels operated by TV18 and Viacom18 across all platforms in India and abroad,
52
excluding states of Tamil Nadu and Pondicherry where Sun18 shall have these rights until March 31, 2013. In
addition to the aforementioned channels, IndiaCast distributes the Sun Network Channels and Disney Channels
in the Hindi speaking markets in India which includes all states in India except Tamil Nadu, Andhra Pradesh,
Karnataka, Pondicherry, Kerala, Lakshadweep and Andaman and Nicobar Islands upto March 31, 2013.
Scheme of Arrangement
In the Fiscal 2012 we completed a reorganisation of our group structure to consolidate and simplify our various
operations pursuant to the Scheme of Arrangement.
Our Board, the board of directors of all the companies party to the Scheme of Arrangement have in their
meetings held on July 7, 2010 considered and approved the Scheme of Arrangement between us, Television
Eighteen, Network18, Web18 Software Services Limited, ibn18 Media & Software Limited, iNews.com
Limited, Care Websites Private Limited, Television Eighteen Commoditiescontrol.com Limited, RVT
Investments Private Limited and Network18 India Holdings Private Limited under sections 391 to 394 read with
section 78, 100 to 103 of the Companies Act, 1956. Subsequently, the Scheme of Arrangement was approved by
our shareholders through meetings convened by the High Court of Delhi on December 21, 2010.
The High Court of Delhi at New Delhi vide its order dated April 26, 2011, approved the Scheme of
Arrangement. A copy of the order was filed with the Office of Registrar of Companies, NCT of Delhi &
Haryana on June 10, 2011 and accordingly the Scheme of Arrangement has come into effect from June 10, 2011
(“Effective Date”) with the appointed date being April 1, 2010.
The Scheme of Arrangement was inter-alia aimed to result in synergy of business, achievement of economies of
scale and management efficiency, reduction in administrative cost, optimization of resources, improvement in
profitability and stronger Balance Sheet of the merged entity, etc.
The Scheme of Arrangement involved the following significant transactions:
i. Demerger of ‘news business undertaking’ of Television Eighteen into us;
ii. Demerger of ‘web undertaking’ of Web18 Software Services Limited into Network18;
iii. Merger of demerged Television Eighteen, Television Eighteen Commoditiescontrol.com Limited, Care
Websites Private Limited, RVT Investments Private Limited and Network18 India Holdings Private
Limited into Network18; and
iv. Merger of iNews.com Limited and ibn18 Media & Software Limited into us.
Following the Scheme of Arrangement, the television broadcasting business is held and operated by us. The
other businesses, including the digital commerce and internet business, are held and operated by Network18. As
part of the Scheme of Arrangement, Television Eighteen transferred its News Broadcasting Undertaking i.e.
CNBC-TV18 and CNBC Awaaz to us and merged its other existing businesses viz. its digital commerce and
allied businesses segments including interests in Infomedia18 to Network18. Pursuant to the Scheme of
Arrangement, Television Eighteen, ibn18 Media & Software Limited, iNews.com Limited, Television Eighteen
Commoditiescontrol.com Limited, RVT Investments Private Limited, Network18 India Holdings Private
Limited and Care Websites Private Limited, were dissolved without the process of winding-up.
As part of the Scheme of Arrangement, shareholders of Television Eighteen received 17 fully paid up Equity
Shares of TV18 for every 25 fully paid up equity shares of ` 5 each of Television Eighteen held, as
consideration for the transfer of news broadcasting business segment. Shareholders of Television Eighteen also
received 13 fully paid up equity shares of Network18 for every 100 fully paid up equity shares of ` 5 each of
Television Eighteen held, as consideration for the transfer of Television Eighteen’s other businesses into
Network18.
The Scheme of Arrangement which has been duly approved by the Hon’ble High Court of Delhi pursuant to
their order dated April 26, 2011 prescribes certain accounting treatments which are at variance with the
Accounting Standards issued by ICAI.
However, the Scheme of Arrangement has attained legal enforceability and is required to be adhered to in its
entirety, including compliance with the various accounting treatments prescribed therein, even though they may
not be in compliance with other Accounting Standards issued by ICAI.
53
We have received legal opinions from Justice V N Khare, Former Chief Justice of India dated May 27, 2012,
July 22, 2012 and August 23, 2012, an Auditor’s opinion dated August 22, 2012 and due diligence opinion of
Lead Managers addressed to SEBI dated August 27, 2012 issued in connection with this matter.
The Scheme of Arrangement has come into effect from June 10, 2011 with the appointed date being April 1,
2010. Accordingly, the financial statements for the Fiscal 2011 do not give effect to the Scheme of
Arrangement. Consequently, historical financial statements for the Fiscal 2011 and Fiscal 2012 are not
comparable. For further details please refer to “Risk Factors” and the chapter titled “Financial Statements” on
pages XIV and 74, respectively.
Further, considering the fact that our Audited Financials of Fiscal 2011 do not include the results of operations
of news business undertakings of CNBC TV18 and CNBC Awaaz, we have additionally included the audited
standalone financial statements of Television Eighteen for Fiscal 2011 in this Letter of Offer on page 167 to
disclose the historical performance of the News Business Undertaking.
Proposed ETV Acquisition
We propose to invest part of the Net Proceeds towards ETV Acquisition, for an aggregate consideration of `
19,250 million, as adjusted for Net Debt, as on the date of the acquisition, in terms of SPA dated February 27,
2012. Pursuant to the ETV Acquisition, Equator will become our subsidiary and we will hold and control the
following investments:
100% Equity Securities in Panorama which owns the ETV News Channels;
b. 3,929 equity shares of ` 10 each and 1,251,660 OFCDs of ` 100 each, together representing 50% Equity
Securities in Prism which owns ETV Non-Telugu Channels; and
Securities in Eenadu which owns ETV Telugu Channels.
The Ushodaya Promoters and Anu hold the balance Equity Securities in ETV Companies. Further, pursuant to
the Option Agreement, TV18 and its affiliates have an option of the Anu Acquisition, subject to completion of
ETV Acquisition in terms of the SPA.
For details relating to channels operated by the Panorama, Prism and Eenadu, please refer to chapter “Objects of
the Issue” and “Material Agreements Pertaining to the ETV Acquisition” on pages 28 and 62, respectively.
We currently operate 6 news channels, seven general entertainment channels through Viacom18 and one factual
entertainment channel through AETN18. As a result of the proposed ETV Acquisition, we shall be able to
expand our broadcast operations to regional stand alone news channels and regional general entertainment
channels. We will be acquiring and operating regional news channels in Hindi, and entertainment channels
(which have news programmes also in Gujarati, Marathi, Kannada, Bengali and Oriya and Urdu). As a result,
we expect to expand our viewership base and attract a more diverse viewer base across our media properties
which we believe would improve our profitability. For details please refer to the chapter “Objects of the Issue”
and “Material Agreements Pertaining to the ETV Acquisition” on pages 28 and 62, respectively.
We believe that we shall be able to aid the growth of these channels with our strategic inputs, improved
content/programming strategies and operational synergies.
ETV Scheme of Arrangement
Prior to April 1, 2010, UEPL was carrying on the following business:
a. Publication of Newspapers;
b. Food business; and
c. Television Broadcasting division comprised of 12 television channels grouped under the following heads:
i. “ ETV Telugu Channels ”, namely, ETV Telugu and ETV 2 ,
ii. “ETV Non Telugu Channels”, namely, ETV Kannada, ETV Bangla, ETV Marathi, ETV Gujarati and
ETV Oriya and
54
iii. “ETV News Channels”, namely, ETV Rajasthan, ETV Uttar Pradesh, ETV Madhya Pradesh, ETV
Bihar, and ETV Urdu.
Pursuant to ETV Scheme of Arrangement, with effect from April 1, 2010 the Television Broadcasting
business of UEPL comprising of ETV News Channels, ETV Non Telugu Channels and ETV Telugu
Channels were demerged into Panorama, Prism and Eenadu, respectively. The ETV Scheme of
Arrangement was approved by Hon’ble High Court of Andhra Pradesh on December 15, 2010 under
sections 391 to 394 of the Companies Act, 1956. For further details pertaining to the ETV Scheme of
Arrangement, including the shareholding pattern of Prism, Panorama and Eenadu please refer to the chapter
“Material Agreements pertaining to ETV Acquisition” on page 62.
Additionally, we have also included (i) the carve out financials of the television broadcasting business
division (comprising of ETV channels) of UEPL for Fiscals 2008, 2009 and 2010 in accordance with Indian
GAAP and Guidance Note on Audit Reports and Certificates for Special Purpose issued by ICAI and audited
financials of Eenadu, Prism and Panorama for Fiscal 2011 and Fiscal 2012 to disclose the historical financial
performance of the ETV channels in which we are acquiring interest; and (ii) the audited financial statements
of Equator for Fiscals 2009, 2010, 2011 and 2012 to disclose the historical financial performance of the
corporate entity, Equator being directly acquired by us. The Summary Financial statements of Equator are
included on page 233. The Summary Financial Information of Eenadu, Prism and Panorama, are included on
page 241.
Network18 Group
Network18 Group, has interests in television, internet, filmed entertainment, digital commerce, magazines,
mobile content and allied businesses. The Network18 Group operates its digital commerce and publishing assets
through Network18, including moneycontrol.com, HomeShop18, bookmyshow.com, Forbes India, Infomedia
Press, Newswire18, Sport18 and E18. Network18 also has investments in Yatra and other Capital18 portfolio
companies.
Network18 Group Structure
Network18 Media &
Investments Limited
47.64
66%
Infomedia
Press
Limited
Setpro18
Distributio
n Limited
51.24%
TV18
Broadcast
Limted
100%
Digital18 Media
Limited
1.73%
DEN
Networks
Limited
12.39%
77.50%
Yatra Online,
Inc, Cayman
Islands
NewsWire18
Limited
50%
IBN Lokmat News
Private Limited
52.90%
51%
50%
AETN18
Media Private
Limited
Viacom18 Media
Private Limited
Proposed
100%
TV18 Home Shopping
Network Limited
IndiaCast Media
Distribution
Private Limited
91.95%
E-Eighteen.com
Limited
95.50%
100%
Colosceum Media
Private Limited
The Indian Film
Company
Limited, Cyprus
55
60%
100%
Capital18
Fincap Private
Limited
89%
Stargaze
Entertainment
Private Limited
Big Tree*
Entertainment
Private Limited
50%
Ubona
Technologies
Private Limited
57.72%
Greycells18
Media
Limited
*Pursuant to share subscription and share purchase agreements dated August 22, 2012, entities affiliated with
Accel Partners have agreed to invest ` 1,000 million in BigTree Entertainment Private Limited ("BigTree").
Upon the closing of the transaction, Network18’s stake in BigTree will be reduced to 40%.
Our Strengths
We believe that we have the following competitive strengths:
One of India’s popular media and entertainment companies
We are one of India’s popular media and entertainment companies, with an integrated cross-media portfolio that
attracts a wide spectrum of economic sections and demographic groups in India. We have a well known news
network in India, operating six news television channels: CNBC-TV18, CNBC-TV18 Prime HD, CNN IBN, IBN
7, CNBC Awaaz and IBN-Lokmat. We also operate seven general entertainment channels: Colors, Colors HD,
MTV India, Vh1, Nick, Sonic, Comedy Central and one factual entertainment channel: History TV18. All of our
television channels are aggregated to cable, DTH, IPTV, HITS and MMDS operators in India (except in Tamil
Nadu and Pondicherry upto March 31, 2012) as well as abroad through IndiaCast.
We believe that our platform permits us to leverage our existing media properties through cross-media
marketing of our brands and exercise increased bargaining power with our advertisers and other business
partners. We believe that our cross-media platform and brand presence have established us as an important
media network for advertisers, and agencies acting on their behalf, to reach their target audiences. For example,
we believe our English and Hindi language television news channels, including those affiliated with CNBC and
CNN, enable us to target Indian business people and affluent Indians, which are attractive audiences for
advertisers in India.
Portfolio of popular brands
We have well established brands in the Indian television industry. We believe our brands allow us to crosspromote our other brands through our television channels, digital and mobile properties and publications,
attracting an increased number of users and greater advertising and subscription revenues. Further, based on our
reputation and popular brands, if we choose to enter any other complementary media segments or genres, we
believe we will be able to grow our advertiser and viewership bases more quickly than many of our competitors.
We have invested in, and continue to promote, our brands through a focus on quality content and the use of
various promotional and marketing tools.
Experienced management team
Our management team comprises industry executives with a significant number of years of experience in the
Indian media and entertainment industry across various functions. For example, our Director and promoter of
our holding company, Mr. Raghav Bahl, has been named “Media Person of the Year” by the All India
Management Association in 2011 and “Entrepreneur of The Year for Business Transformation” by Ernst &
Young in 2007.
Our management’s expertise with and knowledge of the Indian media and entertainment industry allow us to
create products and platforms in response to audience preferences and industry drivers and trends. For example,
during the past few years, our management has successfully built and launched HomeShop18, a home shopping
service, and Colors, a popular Hindi general entertainment channel.
If we choose to enter a new media segment, or develop a business in one of our existing segments, we believe
our management and experienced editorial staff will be well-positioned to successfully implement our strategic
plans.
Ability to collaborate strategically with global and local media companies
We have an established track record of entering into successful strategic alliances with both Indian and global
media companies. We have forged alliances with several global media players including Viacom Inc. and A&E
Television Networks LLC in entertainment and CNN, CNBC and Lokmat in news. We have also entered into an
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arrangement with the Infotel, subsidiary of RIL along with Network18 for transmission of content through its
4G Broadband network.
We believe that we derive sizeable benefits from the association with our partners and that our partners
recognise the value we bring to these ventures which is demonstrated by their willingness to collaborate with us
for extended periods. We believe that our alliances with partners provide us with greater market visibility,
significant synergy upsides through sharing of strengths, reputational benefits and will assist us in continuing to
build our businesses, both in India and internationally.
OUR BUSINESS
We are a media and entertainment company based in India, with operations in two segments, namely television
broadcasting (news, entertainment channels) and production and distribution of movies.
TELEVISION BROADCASTING
The chart below shows our television broadcasting segments and key media assets:
TV18
News Operations
Entertainment
Colors*
Colors HD*
Nick*
Sonic*
MTV India*
VH1*
Comedy Central*
History TV18$
CNN IBN
IBN 7
CNBC-TV18
CNBC-TV18 Prime HD
CNBC Awaaz
IBN Lokmat#
#
through IBN Lokmat News Private Limited; * through Viacom18; $ through AETN18
NEWS CHANNELS
Our news channels are CNBC-TV18, CNBC-TV18 Prime HD, CNBC Awaaz, CNN IBN, IBN7 and IBN Lokmat
(operated by IBN Lokmat News Private Limited, a joint venture launched with Lokmat Media Limited). Our
long term brand licensing arrangements with CNBC and CNN have helped us strengthen our brand recall with
Indian audiences. We believe that our branding, local programming, award-winning journalists and national
news gathering infrastructure have established us as one of India’s respected and credible news networks. Our
guiding editorial philosophy is to provide coverage of both Indian and global news with a balanced perspective,
in-depth analysis of critical issues and investigative reports in compelling presentation formats.
Our news channels are:
CNBC-TV18: CNBC-TV18 is a pay channel targeted at English speaking consumers, investors, business people
and other professionals and provides 24-hour coverage of corporate news, financial markets, industry news and
expert perspectives on investing and management. CNBC-TV18 also airs programs that focus on the economic,
governmental and cultural drivers that shape business in India. We operate this channel through an agreement
with CNBC that gives us non-exclusive rights to distribute, re-transmit and exhibit, whether directly or through
third party distributors, CNBC content within India.
CNBC-TV18 is integrated across digital platforms and also provides news headlines, live streaming video feeds
and financial market information via moneycontrol.com and mobile applications. CNBC-TV18 hosts a number
of industry benchmark awards, such as the “India Business Leader Awards”, “Emerging India Awards”, “CFO
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Awards” to recognize excellence in business leadership.
Some of the popular programs on CNBC-TV18 include ‘Bazaar Morning Call’, our daily market opening show,
and ‘India Business Hour’, which is a recap the day’s business news. We also broadcast targeted special interest
programs, such as ‘Young Turks’, a show on young entrepreneurs and achievers, ‘Storyboard’, an advertising
and marketing program, ‘Indianomics’, a weekly program on India’s place in the global economy, ‘The Firm’, a
weekly show on corporate law, ‘Overdrive’, an automobile program, and ‘Tech Toyz’, a weekly program
showcasing new consumer gadgets and technology.
We also operate CNBC-TV18 in high definition, namely CNBC-TV18 Prime HD. This channel offers live
access to global markets through the day alongwith financial data and new alerts through a two window screen
architecture, that offers high definition video and data content to viewers simultaneously.
CNBC Awaaz: CNBC Awaaz is a pay channel aimed at Hindi speaking consumers, retail investors and business
people and provides 24-hour coverage of subjects such as stock markets, mutual funds and commodities. It also
offers a variety of personal finance programs covering topics such as financial literacy, shopping trends, service
and product launches and personal taxation. Among CNBC Awaaz’s popular programs are ‘Stock 20-20’, a pre
markets opening show, ‘Aaj Ka Karobaar’ a daily evening program and leading feature shows like ‘Tech Guru’,
‘Property Guru’.
CNN IBN: CNN IBN was launched in December 2005 as a 24-hour English news channel in India and has since
become one of the popular English language news and current affairs channels in India. It is a pay channel that
provides 24-hour coverage of national and international news relating to politics, business and financial affairs,
sports and entertainment. CNN IBN, we believe, is regarded for its editorial integrity, high production standards
and unbiased, issue based coverage of news and current affairs.
The majority of our news programming is researched, produced and edited by our local editorial teams and inhouse studios. In addition, pursuant to our news service agreement, we share production and broadcasting with
Turner and have acquired an exclusive, limited right to re-broadcast excerpts, live breaking news reports and
feature programs of CNN in India, Bangladesh, Nepal and Sri Lanka. We have a separate brand license
agreement that gives us the exclusive, limited, non-transferable right to use and reproduce the “CNN” name and
principal logo in India. Both agreements expire in December 2015, but will be automatically renewed for a
period of 10 years on substantially the same terms, provided that either party may terminate the agreement upon
certain default events.
Among CNN IBN’s popular programs are India at 9, Face the Nation and Good Evening India, our daily
primetime news programs. CNN IBN also pioneered the concept of inclusive journalism in India with its
program, Citizen Journalist and airs various news-driven specials from time to time. CNN IBN is also integrated
with the digital media businesses of Network18. Audiences can watch live streaming video feeds, access our
live news updates and connect and interact with our news editors through our website www.ibnlive.in.com, our
mobile applications and various communities.
IBN7: IBN7, launched in March 2005, is a 24-hour Hindi language news television channel. IBN-7 is emerging
as a popular Hindi news channels in the country. IBN-7 is a pay channel and provides 24-hour coverage of
national and international news relating to politics, business and financial affairs, sports and entertainment. IBN7 also provides its news broadcasts; streaming video feeds, downloadable stock tickers and breaking news alerts
for cellular phones via its website, www.ibnkhabar.com.
IBN Lokmat: IBN Lokmat, a joint venture launched with Lokmat Media Limited, is an Marathi language news
and current affairs television channels. IBN Lokmat is a pay channel and provides 24-hour coverage of national
and international news relating to politics, business and financial affairs, sports and entertainment.
ENTERTAINMENT CHANNELS
We operate a network of seven general entertainment television channels i.e. Colors, Colors HD, MTV India,
Vh1, Sonic, Nick and Comedy Central (through Viacom18, a 50-50 joint venture between MTV Asia, a whollyowned subsidiary of Viacom Inc.) and one factual entertainment channel, History TV18 (through AETN18
Media Private Limited, a 51 – 49% joint venture with A&E Television Networks LLC). Viacom18 was also
named one of the best place to work in the media and entertainment industry by the Great Place to Work
Institute in 2012.
58
Our general entertainment and factual entertainment channels are:
Colors: Colors is Viacom18’s flagship brand in the entertainment space in India and is a 24-hour Hindi
entertainment channels in terms of viewership. A combination of ‘emotions’ and ‘variety’, Colors offers an
entire spectrum of emotions to its viewers. From Fiction shows to format shows to reality shows to blockbuster
movies - the basket contains all ‘Jasbaat Ke Rang’. We believe, Colors is dedicated to promoting ‘Cohesive
viewing’, through programmes like ‘Balika Vadhu- Kacchi Umar Ke Pakke Rishtey’, ‘Uttaran’, ‘Na Aana Is
Des Laado’, ‘Parichay- Nayee Zindagi Kay Sapno Ka’, ‘Hawan’, ‘Veer Shivaji’, ‘Sasural Simar Ka’, ‘Na Bole
Tum Na Maine Kuch Kaha’, ‘Bigg Boss Season 5’ amongst others. Colors is also available as a high definition
service, Colors HD, which is available on key digital platforms that support high definition broadcast. We are in
the process of launching “Rishtey” a new free to air channel in United Kingdom.
MTV India: MTV India is primarily aimed at young adults aged 15 to 34, with a collection of music
programming, talk shows, fashion and style shows, Bollywood-style humor shows and adventure shows. MTV
India’s popular television programs include the reality shows ‘MTV Roadies’ and ‘Splitsvilla’. The brand also
has a strong presence in India, and has a consumer products division in India.
Vh1: Vh1 runs English music and lifestyle shows and it runs multiple reality shows such as ‘Saturday Night
Live’, ‘Big Brother’, ‘Jersey Shore’, ‘Yo Momma’ and ‘Punk’d’.
Sonic: Sonic provides a complete multi-platform brand experience from animation and live action shows to
movies. Sonic broadcasts some of the popular shows like ‘Shaktimaan’, ‘Supastrikas’, ‘Kung Fu Panda-The
Legend of Awesomeness’, ‘Mighty Morphin Power Rangers’ and the ‘Jackie Chan’ series amongst others.
Nick: Nick telecasts popular like ‘SpongeBob SquarePants’, ‘Ninja Hattori’, ‘Perman’, ‘Mighty Cat Masked
Niyandar’, ‘Oggy and the Cockroaches’ and ‘Chibi Maruko Chan’ amongst many others.
Comedy Central: We have recently forayed into the 24 Hour English comedy space through Viacom18, by the
launch of Comedy Central on January 23, 2012.
HistoryTV18: We have recently launched History TV18 in October 2011 though our Subsidiary, AETN18.
History TV18 is a factual entertainment channel and broadcasts award-winning original non-fiction series and
event specials that connect history with viewers in an informative, immersive and entertaining manner across
multiple platforms.
FILM BUSINESS:
Under the brand name Viacom18 Motion Pictures, we are involved in the acquisition, production, syndication,
marketing and distribution of full length feature films within India and the distribution of Indian films in several
international markets. Viacom18 also acquired The Indian Film Company in October 2010 and now owns a
library of Hindi film titles, including hits such as Jab We Met and Singh is Kinng. In recent times, Viacom18
Motion Pictures has released popular films like ‘Shaitan’, ‘Gangs of Wasseypur’ (2 parts), ‘Kahaani’, etc. We
have also entered into an alliance with Paramount Pictures International that gives Viacom18 Motion Pictures
the rights to distribute all Paramount releases in the Indian subcontinent.
AGGREGATION
We have in June, 2012, announced a strategic joint venture with Viacom18 to create a multi-platform ‘Content
Asset Monetization’ entity to be called “IndiaCast”, which shall drive domestic, and international channel
distribution across all platforms, including Cable, DTH, IPTV, HITS and MMDS, placement services and
content syndication for the channels currently operated by us and the ETV Channels, post completion of ETV
Acquisition in all states of India and abroad. As on the date of this Letter of Offer, IndiaCast is our wholly
owned subsidiary and distributes channels s operated by TV18 and Viacom18 across all platforms in India and
abroad, excluding states of Tamil Nadu and Pondicherry where Sun18 shall have these rights until March 31,
2013. In addition to the aforementioned channels, IndiaCast also distributes the Sun Network Channels and
Disney Channels in the Hindi Speaking Markets in India which includes all states in India except Tamil Nadu,
Andhra Pradesh, Karnataka, Pondicherry, Kerala, Lakshadweep and Andaman and Nicobar Islands until March
31, 2013.
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We currently also distribute our entertainment channels internationally. Colors and MTV India are now available
in 45 and 11 countries, respectively, in key markets such the United Kingdom, the United States, the Middle
East, South East Asia, Australia and New Zealand. Nick is available in India, Nepal, Sri Lanka, Pakistan and
Maldives. Vh1 is available in Nepal and Sri Lanka.
Viacom18 licenses the distribution of Colors to a third party, which can make Colors available in a number of
countries. These countries include Iran, Syria, and Sudan, each of which are subject to sanctions administered or
enforced by the U.S. Department of Treasury‘s Office of Foreign Assets Control. One of our affiliates has
licensed the distribution of theatrical releases to a party in Iran as well as parties in India for distribution in Iran.
Please also refer to the “Risk Factor - We conduct business activities with countries that are subject to sanctions
administered or enforced by the U.S. Department of Treasury‘s Office of Foreign Assets Control (“OFAC”).
Our business activities with these countries (‘OFAC Countries”) may subject us to reputational harm and
adversely affect our ability to raise money in international capital markets.” on page xli.
TRANSMISSION/CONTENT LICENSING
We have also entered into a Content License Agreement with Infotel, subsidiary of Reliance Industries Limited
along with Network18 for transmission of content through its 4G Broadband network. Infotel shall have
preferential access to the content provided by us on first right basis through any network providing 2G, 3G and
4G access.
OTHER INFORMATION
Single Unit Agreement: MIB requirement for broadcasting channels
At least 51% of the total equity share capital of TV18 is required to be held by the largest Indian shareholder,
including a combination of persons/ entities as prescribed under the Uplinking Guidelines. For the purposes of
the Uplinking Guidelines, the following promoter and promoter group entities namely RB Investments Private
Limited, RB Holdings Private Limited, Network18 Group Senior Professional Welfare Trust, Raghav Bahl
(through himself and his relatives, Ritu Kapur, Vandana Malik and Subhash Bahl), TV18 Employees Welfare
Trust, Network18 Employees Welfare Trust, together holding 49.54% of total equity share capital of Network18
and IMT (not a part of promoter and promoter group as defined under SEBI ICDR Regulations) holding 1.90%
of the total equity share capital of Network18 (all parties holding in the aggregate 51.44% of the total equity
share capital of Network18) have accordingly entered into a legally binding agreement on November 23, 2011
(“Single Unit Agreement”) to act together as a single unit and through Network18 have the right to appoint the
majority of board of directors and managing the matters of TV18.
The Company has by a letter dated February 20, 2012, informed MIB about this Single Unit Agreement.
Intellectual Property
We entered into a program and trademark license agreement with CNBC-AP, dated August 13, 2003, which
enables us to use the name and logo of CNBC and the channel content for production and broadcast services for
CNBC-TV18 until March 31, 2018. Pursuant to this agreement, CNBC-AP has granted us a non-exclusive right
to distribute, retransmit and exhibit, whether directly or through third party distributors, CNBC channel content
within India.
We entered into a brand license agreement with CNN, which is valid until December 2015, pursuant to which
we acquired the exclusive, limited and non-transferable right to use the name and logo of CNN in connection
with our CNN IBN news channel and ibnlive.in.com.
We have registered trademarks in India for several television programs broadcast on our news channels,
including Business Now and Business Tonight on CNBC-TV18 and Citizen Journalist on IBN 7. We have also
applied for trademark registrations in India for various other news programs, including Devil’s Advocate, Face
the Nation and Business this Week.
We entered into a trademark and program license agreement with Viacom Inc., through which MTV Asia
60
provides us with access to the names and logos MTV, Vh1, Nick, Sonic and Comedy Central. We have also
entered into a trademark and program license agreement with A&E Television Networks LLC for access to
names and logos for History TV18.
Further, Viacom18 has applied for trademark registrations in India, including for Colors and several television
programs broadcast on MTV, Colors and Nick, which are currently pending. Further, Viacom18 has applied for
international trademarks for its channel Colors in various countries.
As on July 31, 2012, we have 141 trademarks registered in our name and 277 applications, including
applications for registration of trademarks and applications for change of name, are currently pending.
Employees
As of July 31, 2012, the numbers of people employed by us were 1,921 and the numbers of people employed by
IBN Lokmat News Private Limited, AETN18 and Viacom18 were 158, 50 and 502, respectively. There has not
been any material claim of unfair practices, with respect to the employees at any of our facilities or our Joint
Ventures facilities until date.
Insurance
Network18 maintains directors and officers insurance which covers us and our subsidiaries. We maintain several
insurance policies to cover our respective assets against fire, natural calamities including business interruption,
earthquakes and floods, burglary and special contingencies, depending upon the nature of the asset. We believe
that the policies we maintain would reasonably be adequate to cover all normal risks associated with the
operation of our business.
Properties
The premise on which our Registered Office operates has been taken on lease by one of our Promoters,
Network18. Network18 has permitted us to share the premise of the Registered Office, and has obtained a noobjection certificate from the lessor of the premises dated May 11, 2011 for joint use. The lease agreement for
Registered Office entered into by Network18 is valid up to March 19, 2013.
We have signed a lease agreement with ETT Limited for our corporate office located at Express Trade Towers,
Sector 16A, Noida – 201 301, Uttar Pradesh, India. The lease agreement is valid until January 9, 2015.
We have acquired 1,713.20 square meters freehold non-agricultural land including undivided portion of internal
approach road in District Mehsana and Sub-District of Kadi, Gujarat from I-Ven Interactive Limited by a sale
deed dated August 12, 2009 for a consideration of ` 0.46 million.
We have also acquired 1,428.40 square meters Private Plot No. 5 alongwith 1/18 th undivided impartible joint
ownership right, share and interest in the internal approach road land which is approximately 264.35 square
meters, located in Survey no. 724 of Mouje Irana of Kadi Taluka, District – Mehsana, Registered with SubRegistrar of Kalol under serial no. 2763, Gujarat from Television Eighteen by a deed of conveyance dated April
25, 2011 for a consideration of ` 2.43 million.
61
MATERIAL AGREEMENTS PERTAINING TO ETV ACQUISITION
ETV Scheme of Arrangement
Prior to April 1, 2010, the ETV Channels, the ETV News Channels, the ETV Non-Telugu Channels and the
ETV Telugu Channels formed a part of the television broadcasting division of UEPL. With effect from April 1,
2010, the ETV News Channels, ETV Non-Telugu Channels and ETV Telugu Channels were demerged into
Panorama, Prism and Eenadu, respectively, pursuant to the ETV Scheme of Arrangement, under section 391 to
394 of the Companies Act, sanctioned by the Andhra Pradesh High Court on December 15, 2010. Panorama,
Prism and Eenadu have filed necessary applications and undertakings required under the Uplinking Guidelines
with the MIB, for transfer of the licenses of ETV News Channels, ETV Non-Telugu Channels and ETV Telugu
Channels to Panorama, Prism and Eenadu, respectively from UEPL. An application has also been made to MIB
for transfer of teleport license from UEPL to Eenadu. As of date of this Letter of Offer, transfer of such
permissions / licenses from UEPL to Panorama, Prism and Eenadu are pending.
The shareholding pattern of Prism, Panorama and Eenadu as of July 31, 2012 is as below:
Shareholders
Equity shares
Panorama Prism
OFCDs*
Eenadu Panorama
Ushodaya Promoters
7,803
11,104
15,506
Anu
2,175
3,107
-
Equator
2,750
3,929
Arimas
-
-
12,728
18,140
Total
Shareholders
-
Eenadu Panorama
- 1,267,035
- 1,251,660
Prism
7,803
11,104 12,685,856
-
5,500 2,494,688 1,251,660
608,869 2,49,49,630 1,25,20,529
6,094,190
4,350
608,984
6,094,190
-
-
-
Eenadu
2,175 1,25,19,707
-
-
25,356 2,494,688 2,503,320 2,484,888 24,959,608 25,051,340 24,874,236
Equity shares as a percentage of
total equity shares
Panorama
Prism
Equity Securities**
on fully diluted basis
Prism
OFCDs* as a percentage of
total OFCDs
Eenadu Panorama
Prism
Equity Securities**
on fully diluted basis
Eenadu Panorama
Prism
Eenadu
Ushodaya Promoters
61.31%
61.21%
61.15%
0.00%
0.00%
50.99%
0.03%
0.04%
Anu
17.09%
17.13%
-
0.00%
50.00%
-
0.01%
49.98%
-
Equator
21.61%
21.66%
21.69%
100.00%
50.00%
24.50%
99.96%
49.98%
24.50%
-
-
17.16%
-
-
24.51%
-
-
24.50%
100.00% 100.00%
100.00%
Arimas
Total
100.00% 100.00% 100.00%
100.00% 100.00% 100.00%
51.00%
*The board of directors of Eenadu, Prism and Panorama, respectively, allotted OFCDs pursuant to a rights issue on
February 10, 2012. Each OFCD is convertible into 10 equity shares of ` 10 each of Panorama, Prism and Eenadu,
respectively.
**Assuming full conversion of OFCDs.
Material Agreements:
1. ZOCD Investment Agreement
In terms of the ZOCD Investment Agreement, IMT shall subscribe to such number of ZOCDs of face value `
100 each to be issued by the Subscribing Companies, to enable the Subscribing Companies to (i) subscribe to
their respective rights entitlements in the Rights Issue of Network18 and Rights Issue of TV18; (ii) subscribe for
additional equity shares applied by them, if any, in the Rights Issue of Network18 and Rights Issue of TV18;
and (iii) subscribe to the unsubscribed portion, if any, in the Rights Issue of Network18 and Rights Issue of
TV18.
Subscribing Companies are owned and controlled by Mr. Raghav Bahl and Ms. Ritu Kapur. The shareholding of
Mr. Raghav Bahl and Ms. Ritu Kapur in the Subscribing Companies are as follows:
62
Shareholders
Raghav Bahl
Ritu Kapur
Total
Equity shares
RB Mediasoft RRB Mediasoft
RB Media
Adventure
Private
Private Limited
Holdings
Marketing
Limited
Private Limited Private Limited
9500
500
10000
9500
500
10000
9500
500
10000
Watermark
Colorful
Infratech
Media Private
Private Limited
Limited
9500
500
10000
9500
500
10000
9500
500
10000
The following table sets out the shareholding of the Subscribing Companies in Network18 and TV18 as on
August 17, 2012:
Name of subscribing entity
Shareholding in
Network18
12,679,195 (8.65%)
RRB Mediasoft Private Limited
RB Mediasoft Private Limited
RB Media Holdings Private Limited
Watermark Infratech Private Limited
Colorful Media Private Limited.
Adventure Marketing Private Limited
Total
Shareholding in
TV18
500 (0.00%)
8,283,180 (5.65%)
8,278,722 (5.65%)
8,278,680 (5.65%)
8,278,680 (5.65%)
8,278,680 (5.65%)
500 (0.00%)
200 (0.00%)
200 (0.00%)
200 (0.00%)
200 (0.00%)
54,077,137 (36.90%)
1,800 (0.00%)
The obligation of IMT to subscribe to the ZOCDs is subject to fulfillment of certain conditions, including the
following:
i.
all filings required under the Competition Act having been undertaken and the CCI having approved the
subscription by IMT to the ZOCDs or the statutory period for deemed approval of the CCI having expired;
ii.
there having been no objection by any governmental authority to the Rights Issue of Network18 or the
Rights Issue of TV18; and
iii. all the conditions precedent, (other than completion of the Rights Issue of Network18 or the Rights Issue of
TV18) having been completed, in accordance with the terms of the SPA.
The ZOCD Investment Agreement requires the Subscribing Companies to apply the proceeds of the ZOCDs
only towards the subscription to their respective rights entitlements, apply for additional equity shares and for
subscribing to the unsubscribed portion, if any, in the Rights Issue of Network18 and Rights Issue of TV18. The
ZOCDs and the equity shares arising upon conversion of ZOCDs are freely transferable. The holder of the
ZOCDs has the option to convert all or any of the ZOCDs into 10 equity shares (adjustable for the adjustment
events provided in the ZOCD Investment Agreement) for every ZOCD held, of the relevant Subscribing
Company at any time within a period of 10 years from the date of subscription of the ZOCDs. Further, the
holder of the ZOCDs has the option to require all or any of the Subscribing Companies to redeem some or all of
the ZOCDs at par at any time within a period of 10 years from the date of subscription of the ZOCDs. The
ZOCDs that have neither been converted into equity shares of the Subscribing Companies nor have been
redeemed as per the terms of the ZOCD Investment Agreement shall be automatically redeemed at par upon the
expiry of 10 years from the date of subscription to the ZOCDs.
Further, in the event the ZOCD holder receives a bonafide offer and proposes to transfer more than 50% of the
ZOCDs or equity shares subscribed upon conversion of more than 50% of the ZOCDs or other securities, if any,
held by it in the Subscribing Companies, whether in a single transaction or in a series of transactions, to a third
party transferee (other than to its affiliate, beneficiary or affiliate of beneficiary), then the ZOCD holder is
required to deliver a notice to Mr. Raghav Bahl and Ms. Ritu Kapur offering to purchase all the Equity
Securities (excluding Equity Securities held by Subscribing Companies and Equity Securities held by
Network18 in TV18) held by Mr. Raghav Bahl and Ms. Ritu Kapur and their affiliates in Network18 and TV18,
63
on same terms and conditions offered by third party transferee for purchase of ZOCDs.
The sole beneficiary of IMT is RIL and the trustee of IMT is Digital Content Private Limited which is owned
jointly by Mr. Raghav Bahl and Ms. Ritu Kapur.
The Competition Commission of India (“CCI”) vide its order dated May 28, 2012 (“Order”) has approved the
proposed combination involving the Issuer, Network18 and IMT.
2. Securities Purchase Agreement (“SPA”)
TV18 and Network18 had executed the SPA with Equator, Altitude and Kavindra. Altitude and Kavindra are
effectively wholly owned by RIIHL, which is a subsidiary of RIL. Altitude was the legal and beneficial owner
of 2,000,000,000 equity shares of ` 1 each of Equator and Kavindra was the legal and beneficial owner of
125,700,000 CCDs of ` 100 each of Equator, which together represented 100% of the Equity Securities of
Equator. Pursuant to and in accordance with provisions of the SPA, Altitude and Kavindra have transferred
2,000,000,000 equity shares of ` 1 each and 125,700,000 CCDs of ` 100 each of Equator, respectively, to
Arimas. Arimas is effectively wholly owned by RIIHL, which is subsidiary of RIL.
Pursuant to the terms of the SPA, Arimas shall sell and transfer the Equator Securities to TV18, for an aggregate
consideration of ` 19,250 million, as adjusted for the net debt of Equator (“Net Debt”). Net Debt is defined as
the aggregate of all monies borrowed from banks by Panorama, Prism and Eenadu, less the aggregate of all cash
and bank balances, marketable securities, liquid investments and any other form of deployment of surplus cash
of Panorama, Prism and Eenadu as of one day prior to the date of completion i.e. three business days from the
date of satisfaction of all of the conditions precedents as laid down in the SPA. Consequently, Equator will
become our wholly owned subsidiary and we will hold and control the following investments:
100% Equity Securities of Panorama which owns ETV News Channels;
b. 3,929 equity shares of ` 10 each and 1,251,660 OFCDs of ` 100 each, together representing approximately
50% Equity Securities of Prism which owns ETV Non-Telugu Channels; and
Securities of Eenadu which owns ETV Telugu Channels.
Terms of the OFCDs of Panorama, Prism and Eenadu
Date of Allotment
Rate of interest
Conversion terms
Terms of repayment, if the OFCDs are
not converted
Other terms
February 10, 2012
0%
None
Each of the OFCDs shall be convertible into 10 equity shares of ` 10
each of Panorama, Prism and Eenadu, respectively, at the election of
the OFCD holder at any point of time before the expiry of 7 years
from the date of allotment.
Outstanding OFCDs, if any, shall be redeemed by Panorama, Prism
and Eenadu, respectively, upon the expiry of 7 years of the date of
allotment of the OFCDs.
The OFCDs are transferable in accordance with the terms and
conditions of Panorama SHA, Prism SHA and Eenadu SHA,
respectively.
The SPA shall become effective upon the fulfillment of certain conditions precedent which includes the
following:
i. all necessary filings and approvals, if any, from Government authorities having been obtained;
ii. Subscribing Companies under the ZOCD Investment Agreement having utilized the proceeds from the
issue of their ZOCDs for (a) their respective rights entitlements in the Rights Issue of Network18 and
Rights Issue of TV18; (b) additional equity shares applied by them, if any, in the Rights Issue of
64
Network18 and Rights Issue of TV18; and (c) the unsubscribed portion, if any, in the Rights Issue of
Network18 and Rights Issue of TV18; and
iii. the Rights Issue of Network18 and Rights Issue of TV18 having been completed.
The ETV Acquisition does not require CCI approval as it falls within the exceptions provided under Notification
Number S.O. 482(E) dated March 4, 2011 issued by the Central Government under powers prescribed under
clause (a) of Section 54 of the Competition Act, 2002 (12 of 2003).
3. Option Agreement
TV18 has executed the Option Agreement with Devaki and Anu. Devaki is effectively wholly owned by RIIHL,
which is a subsidiary of RIL.
At the time of execution of the Option Agreement, Devaki was the legal and beneficial owner of 10,000 equity
shares of ` 10 each and 57,500,000 CCDs of Anu of ` 200 each which together represented 100% of the Equity
Securities of Anu.
On March 31, 2012, Anu transferred 4,350 equity shares of ` 10 each and 608,984 OFCDs of Eenadu of ` 100
each (“Eenadu Option Securities”) to Arimas. Devaki is currently holding 10,000 equity shares of ` 10 each and
31,750,000 CCDs of Anu of ` 200 each (“Anu Option Securities”). TV18, Devaki, Anu and Arimas have
entered into an addendum 1 dated August 16, 2012 to Option Agreement to reflect the current holding of Arimas
and Devaki of Eenadu Option Securities and Anu Option Securites, respectively. Arimas is effectively wholly
owned by RIIHL.
In terms of the Option Agreement, TV18 and its affiliates, can exercise the option to purchase all, but not less
than all of Anu Option Securities for an aggregate consideration of ` 9.300.1 million as adjusted for the net debt
of Prism (“Prism Net Debt”) and / or Eenadu Option Securities for an aggregate consideration of ` 5,150 million
as adjusted for the net debt of Eenadu (“Eenadu Net Debt”), on spot delivery basis, from Devaki and/ or Arimas
as the case may be on or before March 31, 2013.
Prism Net Debt is defined as aggregate of all monies borrowed from banks by Prism, less the aggregate of all
cash and bank balances of Prism as on the call option exercise date.
Eenadu Net Debt is defined as aggregate of all monies borrowed from banks by Eenadu, less the aggregate of all
cash and bank balances of Eenadu as on the call option exercise date.
Further, Devaki has agreed not to transfer any of the Anu Option Securities and has also agreed to ensure that
Anu does not transfer any of the Equity Securities held by it in Prism, until March 31, 2013. Arimas has also
agreed not to transfer any of the Eenadu Option Securities held by it in Eenadu until March 31, 2013 However,
Devaki and Arimas may transfer Anu Option Securities to any other company that is 100% effectively owned by
RIIHL, either directly or through a merger or reorganisation, subject to such transferee executing a deed of
adherence to the Option Agreement.
4. Eenadu SHA
The Eenadu SHA regulates the rights and obligations inter se of the parties thereto, in the management of
Eenadu.
As on the date of the Eenadu SHA, 24.50% Equity Securities of Eenadu are held by Equator. Further, 24.50%
Equity Securities of Eenadu were held by Anu and 51% Equity Securities of Eenadu are held by the Ushodaya
Promoters. Pursuant to and in accordance with provisions of the Eenadu SHA, Anu transferred 4,350 equity
shares of ` 10 each and 608,984 OFCDs of ` 100 each of Eenadu to Arimas.
Any party can transfer all and not less than all of the Equity Securities held by it in Eenadu. In terms of the
Eenadu SHA, any transfer of all, and not less than all of the Equity Securities of Eenadu held by the Ushodaya
Promoters is subject to a right of first refusal in favour of Equator and Arimas (collectively). Similarly, any
transfer of all, and not less than all of the Equity Securities of Eenadu held by Equator and Arimas (collectively)
is subject to a right of first refusal in favour of Ushodaya Promoters (collectively).
65
In the event Arimas proposes to transfer all and not less than all of the Equity Securities held by it in Eenadu but
Equator does not wish to transfer any Equity Securities held by it in Eenadu, then the transfer of all, and not less
than all of the Equity Securities of Eenadu held by Arimas is subject to a right of first refusal of Equator.
Similarly, in the event Equator proposes to transfer all and not less than all of the Equity Securities held by it in
Eenadu but Arimas does not wish to transfer any Equity Securities held by it in Eenadu, then any transfer of all,
and not less than all of the Equity Securities of Eenadu by Equator is subject to a right of first refusal of Arimas.
In case Equator or Arimas, as the case may be, does not exercise its right to purchase the Equity Securities of
Eenadu held by the other, then such refusing party shall have the obligation to transfer, all Equity Securities held
by it in Eenadu, collectively with the transfer by offering party, of all Equity Securities held by it in Eenadu, to
the proposed third party transferee (subject to right of first refusal in favour of the Ushodaya Promoters as
described above).
Equator and Arimas (collectively) and the Ushodaya Promoters have a tag along right which entitles them to sell
all Equity Securities of Eenadu respectively held by them in the event the other parties sell their Equity
Securities of Eenadu to a third party. However, such tag along right is exercisable only in the event such third
party transferee has indicated its willingness to purchase 100% of the Equity Securities of Eenadu. In case of
absence of such indication, the sale of Equity Securities of Eenadu to such third party would be subject to a right
of first refusal by Ushodaya Promoters (collectively) or Equator and Arimas (collectively), as the case may be.
Equator and Arimas also have a right to appoint their nominees to the board of Eenadu in proportion to their
shareholding on a fully diluted basis in Eenadu. The Eenadu SHA also lays down certain reserved matters in
respect of which no decision can be taken by Eenadu without an affirmative vote of Equator and Arimas on one
hand and the Ushodaya Promoters on the other hand.
5. Prism SHA
The Prism SHA regulates the rights and obligations inter se the parties thereto, in the management of Prism.
Any party can transfer all and not less than all of the Equity Securities held by it in Prism. The transfer of all and
not less than all of the Equity Securities of Prism held by Anu is subject to a right of first refusal of Equator and
conversely, the transfer of all and not less than all of the Equity Securities of Prism held by Equator is subject to
a right of first refusal of Anu. Further in terms of the Prism SHA, upon the conversion of the OFCDs held by
Equator into the equity shares of Prism, the Ushodaya Promoters shall sell 5,963 and 5,141 equity shares of
Prism in equal proportion to Anu and Equator, respectively at par value.
Equator and Anu have a right to appoint their nominees to the board of Prism in proportion to their shareholding
on a fully diluted basis. Nomination entitlement of Equator shall be one director more than the number of
directors appointed by Anu. Thus, Equator has power to appoint majority of the directors on the board of
directors of Prism and control the management and affairs of Prism.
6. Panorama SHA
In terms of the Panorama SHA, upon the conversion of the OFCDs held by Equator into equity shares of
Panorama, the Ushodaya Promoters and Anu have agreed to sell the entire equity shares held by them in
Panorama to Equator at par value.
7. Non-Compete Agreement
In terms of the Non-Compete Agreement, UEPL, the Ushodaya Promoters and Eenadu shall not, until February
28, 2015, directly or indirectly engage, participate in or carry out, or assist any other person in any business,
undertaking, operation or activity of any kind relating to Prism and Panorama’s undertakings, businesses,
activities and operations incidental or ancillary to channels operated by Prism and Panorama in India.
8. Trademark License Agreement
Pursuant to the terms of the Trademark License Agreement, Eenadu has granted to Prism and Panorama an
irrevocable, exclusive and royalty free license on a worldwide basis, to use the ETV trademarks and the ETV
brand-name in relation to the ETV News Channels and ETV Non-Telugu Channels, respectively, for a term
66
ending on February 28, 2015. However, the agreement terminates within 6 months in case of any joint use of the
ETV trademarks with the trademarks of any third party or within 225 days in case of the change in control of
Prism and Panorama, whichever is earlier. Prism and Panorama shall be entitled to grant a sub-license for the
use of the ETV trademarks to those affiliates that carry out the business of Prism and Panorama. The terms of
the license may be extended provided that the amount of royalties to be paid by Prism and Panorama for such
extended period is mutually agreed. Such extension shall not be available in case of joint use of ETV trademarks
and ETV brand name with any third party or change in control of Prism and Panorama. Prism and Panorama are
entitled to terminate this agreement prior to the expiry of the initial term.
67
OUR MANAGEMENT
As per the Articles of Association, we shall not have less than three or more than 12 Directors on our Board. We
currently have five Directors on our Board.
The following table sets forth certain details regarding the Board of Directors as on the date of this Letter of
Offer.
Name, Address, Occupation,
Term, DIN and Designation
Manoj Mohanka
Nationality
Age
(years)
Indian
49
Address: 9, Lovelock Place, 4th
Floor, Flat No. 4C
Kolkata – 700 019, India
Other directorships
Indian Companies
1.
2.
3.
4.
5.
6.
7.
Occupation: Businessman
3D Technopack Limited;
India Carbon Limited;
Network18 Media & Investments Limited;
Infomedia Press Limited;
Titagarh Wagons Limited;
Artevea Digital India Private Limited; and
Indian Terrain Fashions Limited.
Term: Liable to retire by rotation
Foreign Companies
1.
DIN: 00128593
Television Eighteen Mauritius Limited.
Designation: Non-Executive
Chairman, Independent Director
Raghav Bahl
Indian
51
Indian Companies
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Address: E-36, Sector 30, Noida,
Uttar Pradesh – 201 301, India
Occupation: Media Professional
DIN: 00015280
Director
68
BK Media Private Limited;
digital18 Media Limited;
greycells18 Media Limited;
Infomedia Press Limited;
Keyman Financial Services Private Limited;
BRR Securities Private Limited;
Network18 Media & Investments Limited;
Network18 Publications Limited;
NewsWire18 Limited;
RB Holdings Private Limited;
RB Investments Private Limited;
RB Software Private Limited;
RRB Investments Private Limited;
RRK Finhold Private Limited;
RRK Holdings Private Limited;
RRK Media Private Limited;
RVT Finhold Private Limited;
RVT Softech Private Limited;
Stargaze Entertainment Private Limited;
TV18 Home Shopping Network Limited;
Viacom18 Media Private Limited;
Capital18 Fincap Private Limited;
VT Media Private Limited;
VT Softech Private Limited;
Web18 Software Services Limited;
AETN18 Media Private Limited;
RB Media Holdings Private Limited;
Watermark Infratech Private Limited;
Colorful Media Private Limited;
Nationality
Age
(years)
Other directorships
30.
31.
32.
33.
Adventure Marketing Private Limited;
Digital Content Private Limited;
RB Mediasoft Private Limited, and
RRB Mediasoft Private Limited.
Foreign Companies
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
BK Capital Limited, Mauritius;
BK Holdings Limited, Mauritius;
BK Media Mauritius Private Limited;
BK Ventures Limited, Mauritius;
Capital18 Acquisition Corp., Cayman Islands*;
Capital 18 Limited, Mauritius;
E-18 Limited, Cyprus;
Film Investment Managers (Mauritius) Limited;
Network18 Holdings Limited, Mauriutius;
Television Eighteen Mauritius Limited;
Television Eighteen Media & Investments
Limited; Mauritius
12. TV18 HSN Holdings Limited, Cyprus; and
13. Web18 Holdings Limited, Cayman Islands.
Sanjay Ray Chaudhuri
Indian
46
Indian Companies
1.
2.
3.
Address: LGG-110, The
Leburnum, Sector 28, Block A,
Sushant Lok, Gurgaon – 122 002,
Haryana, India
digital18 Media Limited;
greycells18 Media Limited;
India International Film Advisors Private
Limited;
4. Money Control Dot Com India Limited;
5. Network18 Media & Investments Limited;
6. NewsWire18 Limited;
7. RVT Media Private Limited;
8. Setpro18 Distribution Limited;
9. Web18 Software Services Limited.
10. WS Media Ventures Private Limited; and
11. AETN18 Media Private Limited.
Occupation: Media Professional
DIN: 00015365
Director
Hari S. Bhartia
Indian
55
Address: 2, Amrita Shergill Marg,
Indian Companies
1.
2.
3.
4.
5.
6.
7.
8.
Jubilant Life Sciences Limited;
Jubilant Biosys Limited;
Geoenpro Petroleum Limited;
Vam Holdings Limited;
Jubilant FoodWorks Limited;
Shriram Pistons & Rings Limited;
Jubilant Industries Limited;
Export Credit Guarantee Corporation of India
Limited.
9. Network18 Media & Investments Limited;
10. Jubilant Enpro Private Limited;
11. Jubilant Securities Private Limited;
12. American Orient Capital Partners India Private
Limited;
Occupation: Industrialist
DIN: 00010499
Designation: Non-Executive,
69
Nationality
Age
(years)
Independent Director
Other directorships
13.
14.
15.
16.
17.
18.
Jaytee Private Limited;
Nikita Resources Private Limited;
BT Telecom India Private Limited;
Jubilant Stock Holding Private Limited;
Jubilant Retail Consolidated Private Limited;
Vanthys Pharmaceutical Development Private
Limited; and
19. Jubilant Bhartia Foundation.
Foreign Companies
1. Jubilant Energy NV, Netherlands
2. Jubilant Energy (Holdings) BV, Netherlands
3. Jubilant Energy Limited, Canada
Shahzaad Siraj Dalal
Indian
53
Address: Emirates Crown
Apartment # 4102, Al Sufouh Road
Dubai Marina, P O Box 191588
Dubai, UAE
Indian Companies
1.
2.
3.
4.
5.
6.
7.
Occupation: Service
8.
9.
10.
11.
12.
13.
14.
DIN: 00011375
Designation: Non-Executive,
Independent Director
15.
IL&FS Investment Managers Limited;
SARA Fund Trustee Company Private Limited;
IL&FS Financial Services Limited;
Shoppers Stop Limited;
Datamatics Global Services Limited;
ABG Shipyard Limited;
IL&FS Milestone Realty Advisors Private
Limited;
DEN Networks Limited;
Ramky Enviro Engineers Limited;
Orbit Corporation Limited;
QVC Realty Co. Private Limited;
Sterling Holiday Resorts (India) Limited;
IG3 Infra Limited;
IL&FS Asian Infrastructure Managers Limited
(alternate director); and
Corporate Business Academy Private Limited
Foreign Companies
1. AIG Indian Equity Sectoral Fund LLC,
Mauritius;
2. IL&FS Investment Advisors LLC, Mauritius;
3. IL&FS India Realty Fund LLC, Mauritius;
4. IL&FS India Realty Fund II LLC, Mauritius;
5. IL&FS Singapore Asset Management Co Pte Ltd,
Singapore;
6. India Project Development Fund – II LLC,
Mauritius;
7. UOB IL&FS India Opportunities Fund Limited,
Mauritius;
8. UOB IL&FS Management Limited, Mauritius;
9. Green Grid Group Pte. Limited, Singapore;
10. Tara India Fund III LLC, Mauritius;
11. Tara India Holdings A Ltd, Mauritius;
12. Tara India Holdings B Ltd, Mauritius;
13. IIRF Holdings I Limited, Mauritius;
14. IIRF Holdings II Limited, Mauritius;
15. IIRF Holdings III Limited, Mauritius;
16. IIRF Holdings IV Limited, Mauritius;
70
Nationality
Age
(years)
Other directorships
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
IIRF Holdings V Limited, Mauritius;
IIRF Holdings VI Limited, Mauritius;
IIRF Holdings VII Limited, Mauritius;
IIRF Holdings VIII Limited, Mauritius;
IIRF Holdings IX Limited, Mauritius;
IIRF Holdings X Limited, Mauritius;
IIRF Holdings XI Limited, Mauritius;
IIRF Holdings XII Limited, Mauritius;
IIRF Holdings XIII Limited, Mauritius;
IIRF Holdings XIV Limited, Mauritius;
IIRF Holdings XV Limited, Mauritius;
IIRF Holdings XVI Limited, Mauritius;
IIRF Holdings XVII Limited, Mauritius;
IIRF India Realty I Limited, Mauritius;
IIRF India Realty II Limited, Mauritius;
IIRF India Realty III Limited, Mauritius;
IIRF India Realty IV Limited, Mauritius;
IIRF India Realty V Limited, Mauritius ;
IIRF India Realty VI Limited, Mauritius;
IIRF India Realty VII Limited, Mauritius;
IIRF India Realty VIII Limited, Mauritius;
IIRF India Realty IX Limited, Mauritius;
IIRF India Realty X Limited, Mauritius ;
IIRF India Realty XI Limited, Mauritius;
IIRF India Realty XII Limited, Mauritius;
IIRF India Realty XIII Limited, Mauritius;
IIRF India Realty XIV Limited, Mauritius;
IIRF India Realty XV Limited, Mauritius;
IIRF India Realty XVI Limited, Mauritius;
IIRF India Realty XVII Limited, Mauritius;
IIRF India Realty XVIII Limited, Mauritius;
IIRF India Realty XIX Limited, Mauritius;
IIRF India Realty XX Limited, Mauritius;
IIRF India Realty XXI Limited, Mauritius;
IIRF India Realty XXII Limited, Mauritius;
IIRF India Realty XXIII Limited, Mauritius;
IIRF India Realty XXIV Limited, Mauritius;
IIRF India Realty XXV Limited, Mauritius;
IIRF India Realty XXVI Limited, Mauritius;
IIRF India Realty XXVII Limited, Mauritius;
IIRF India Realty XXVIII Limited, Mauritius;
Sunshine Holdings (Mauritius) Limited,
Mauritius;
IL&FS Milestone Fund III LLC;
IL&FS Milestone Capital Management LLC;
K2 Property Limited;
Jubilant Energy NV;
Yatra Capital Limited; and
Saffron India Real Estate Fund I.
*On July 19, 2012, the Registrar of Companies, Cayman Islands on the application of Capital18 Acquisition
Corp. has issued a strike off certificate, for striking off with effect from September 28, 2012.
Further, except as stated below, none of our Directors were directors on board of listed companies that have
been delisted from the Stock Exchanges.
71
Sr. Name of the Name of the Listed On
No.
Director
companie(s) (BSE/
NSE)
1.
2.
3.
4.
Manoj
Mohanka
Raghav Bahl
Sanjay Ray
Chaudhuri
Hari
Shankar
Bhartia
Term of
Director
(in what
capacities)
Date of
Whether
Delisting on Compulsory/
(BSE/NSE) Voluntary
Reason for
Delisting
Whether
Relisted
(Y/N)
(Date of
Relisting)
chairman
Television
Eighteen
India
Limited
BSE
and
NSE
managing
director
whole time
director
independent
director
June 21,
2011 on
BSE and
NSE
Voluntary
Merger into
Network18
pursuant to
Scheme of
Arrangment
No
None of our Directors hold any current and past directorship(s) during the preceeding five years in listed
companies whose shares have been or were suspended from being traded on BSE or NSE.
Relationship between Directors
None of our directors are related to each other.
Brief biography of our Directors
Mr. Manoj Mohanka is our non-executive independent Chairman. He has a B.Com (Hons) from St. Xavier’s
College, Calcutta University and a Master's degree with a major in strategic marketing from the Michael
Smurfit Graduate School of Business, National University of Ireland. In addition, he is a Chevening scholar
from the London School of Economics. Mr. Mohanka specializes in areas such as finance, accounts, audit,
control, managerial and marketing. He has over 22 years of experience in business management and has held
various positions in industry forums including President, Calcutta Chamber of Commerce, Co-Chairman,
Economic Affairs Committee of FICCI (Eastern Region), Committee Member, Indo-Italian Chamber of
Commerce, Board of Governors, Eastern Institute of Management, Chairman, Young Presidents Organisation,
Kolkata. He has been a guest lecturer at the Indian Institute of Technology, Kharagpur.
Mr. Raghav Bahl is our founder and Non Executive Director. He has a bachelor’s degree in economics from St.
Stephen’s College, University of Delhi and has a master’s degree in business administration from the University
of Delhi. He began his career as a management consultant with A. F. Ferguson & Company. He founded TV18
(now Network18 Group) in 1993 and has been instrumental in establishing partnerships with media
conglomerates such as CNBC-AP, CNN, Viacom Inc., Forbes and Sun Network. Under his guidance we now
operate news channels namely CNN IBN, CNBC-TV18 and CNBC Awaaz. He won the Sanskriti Award for
Journalism in 1994.He was also honoured as the Global Leader of Tomorrow by the World Economic Forum
(WEF). He was also selected by Ernst & Young as the Entrepreneur of The Year (2007) for Business
Transformation. Mr. Bahl has been conferred with the degree of Doctor of Philosophy (D.Phil), Honoris Causa
by Amity University, Uttar Pradesh (2011). He has over 24 years experience in television and journalism.
Mr. Sanjay Ray Chaudhuri is our Non Executive Director. He holds a Bachelor’s degree in English Literature
from St. Stephens College, Delhi University and a Masters degree in Mass Communications from the Mass
Communications Research Centre, Jamia Millia Islamia University. He started his career as an independent
documentary film-maker for Doordarshan and went on to direct and host ‘The India Show’ on Star Plus. He has
over 17 years of experience in journalism, media and allied fields and has received the Onida Pinnacle Award
for excellence in Television in 1995. Mr. Chaudhuri has directed music videos, corporate films, add films, chat
shows, game shows and TV serials for leading TV channels in India. He is currently working on his debut
feature film.
Mr. Hari Shankar Bhartia, our non-executive independent director, is a chemical engineering graduate from
Indian Institute of Technology (“IIT”), Delhi and was conferred the Distinguished alumni Award in 2000. Mr.
Bhartia is the co-chairman of the Jubilant Group. Mr. Bhartia has over 22 years of experience in the
pharmaceuticals, food, oil and gas, aerospace and information technology sectors. He has also served in various
capacities with the IITs. He was Chairman of the Board of Governors with IIT Kanpur.
72
Mr. Bhartia is a past President of Confederation of Indian Industry and is currently Chairman, Board of
Governors of the Indian Institute of Management, Raipur. He has also been a member of several Indian
Government Committees on educational, science and technology programs.
Mr. Shahzaad Siraj Dalal our non-executive independent director. He is a management graduate from the
Northeast Louisiana University, USA. Mr. Shahzaad Dalal is the Chairman and Chief Executive Officer of
IL&FS Investment Advisors LLC which is a fully owned subsidiary of IL&FS Investment Managers Limited
(“IIML”). The private equity funds managed by IIML have a wide canvas across sectors in infrastructure such
as telecom, transport, power and oil and gas as well as emerging areas in real estate, technology, retail, life
sciences and consumer services. Mr. Dalal is on the boards of various companies to guide their growth plans and
other strategic developments. Overall, Mr. Dalal is instrumental towards the crafting of exits through a range of
diverse methods, including IPO’s and strategic sales. Prior to joining IIML, Mr. Dalal served as the Chief
Executive Officer of the Asset Management Business of IL&FS. Within the IL&FS Group he has undertaken
various responsibilities including overall planning and raising of resources for IL&FS, its group companies and
other IL&FS sponsored infrastructure projects. Mr. Dalal has also headed the initiative for large value structured
finance/transactions in leasing, project finance and privatizations.
We have not entered into any service contracts with our Directors for providing benefits upon termination of
employment. We have not paid our Directors, any payment or reimbursement of expenses other than the normal
remuneration and reimbursement, dividend and sitting fees as applicable in each case.
As of the date of this Letter of Offer, there are no arrangements or understanding with major shareholders,
customers, suppliers or others, pursuant to which we appointed any of our Directors.
Manager
Pursuant to Section 269/ 386 of the Companies Act, Mr. Saikumar Ganapathy Balasubramanian has been
appointed as the ‘ Manager’ for a period of three years effective from October 26, 2010 without remuneration.
73
SECTION VI – FINANCIAL INFORMATION
FINANCIAL STATEMENTS
AUDITORS’ REPORT
TO THE MEMBERS OF
(Formerly ibn18 BROADCAST LIMITED)
1.
We have audited the attached Balance Sheet of TV18 Broadcast Limited (formerly ibn18 Broadcast
Limited), (‘the Company’) as at 31 March, 2012, the Statement of Profit and Loss and the Cash Flow
Statement of the Company for the year ended on that date, both annexed thereto. 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 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 the 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 issued by the Central Government of India in
terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4.
Attention is invited to Note 27(b) of the financial statements regarding the carrying value of certain long
term investments aggregating to Rs. 519.50 million. Management is of the view that, having regard to the
long term strategic involvement, no provision is considered necessary for ‘other than temporary
diminution’ in the value of these investments. In the absence of supporting documentation in respect of the
appropriateness of the carrying value of such long term investments, in accordance with requirements of
Accounting Standard 13 (AS-13) Accounting for Investments, we are unable to comment whether the
diminution in the value of these long term investments is ‘other than temporary’.
5.
Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
a.
subject to our comments in paragraph 4 above, 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this
report are in agreement with the books of account;
d.
subject to our comments in paragraph 4 above, in our opinion, the Balance Sheet, the Statement of
Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting
Standards referred to in Section 211(3C) of the Companies Act, 1956;
e.
in our opinion and to the best of our information and according to the explanations given to us, the said
accounts, together with the notes thereon, give the information required by the Companies Act, 1956,
in the manner so required and subject to our comments in paragraph 4 above, the effect of which could
not be determined, 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 31 March, 2012;
74
ii.
in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on
that date; and
iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on
that date.
6.
On the basis of written representations received from the Directors as on 31 March, 2012 and taken on
record by the Board of Directors, we report that none of the Directors is disqualified as on 31 March, 2012
from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS
(Firm Registration No. 015125N)
JITENDRA AGARWAL
Partner
(Membership No. 87104)
NOIDA, 4 August, 2012
75
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
i.
Having regard to the nature of the Company’s business, clauses xii, xiii, xiv and xviii of Companies
(Auditor’s Report) Order, 2003 are not applicable.
ii.
In respect of its fixed assets:
iii.
iv.
a.
The Company has maintained proper records showing full particulars, including quantitative details
and situation of the fixed assets.
b.
The fixed assets were physically verified during the year by the management in accordance with
regular programe of verification which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and explanation given to us, no
material discrepancies were noticed on such verification.
c.
The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of
the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern
status of the Company.
In respect of its inventory:
a.
As explained to us, the inventories were physically verified during the year by the Management at
reasonable intervals.
b.
In our opinion and according to the information and explanations given to us, the procedures of
physical verification of inventories followed by the Management were reasonable and adequate in
relation to the size of the Company and the nature of its business.
c.
In our opinion and according to the information and explanations given to us, the Company has
maintained proper records of its inventories and no material discrepancies were noticed on physical
verification.
a.
The Company has not granted any loans, secured or unsecured, to companies, firms or other parties
listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the
provisions of sub clauses (a), (b), (c) & (d) of clause (iii) of the order are not applicable to the
Company.
b.
The Company has taken an unsecured loan from one party during the year listed in the register
maintained under Section 301 of the Companies Act, 1956. The outstanding balance of such loans at
the year end was Rs. Nil and the maximum amount involved during the year was Rs. 1,049 million.
c.
The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not
prejudicial to the interest of the Company.
d.
The payment of principal amounts and interest in respect of such loan is regular/as per stipulations.
v.
In our opinion, and according to the information and explanations given to us, having regard to the
explanation that some of the fixed assets purchased, goods sold and services rendered are of a special
nature and suitable alternative sources are not readily available for obtaining comparable quotations, there
is an adequate internal control system commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any major weakness in such internal control system.
vi.
In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of
the Companies Act, 1956, to the best of our knowledge and belief and according to the information and
explanations given to us:
a.
the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in
the Register maintained under the said Section have been so entered.
76
b.
having regard to the explanation that some of the services rendered are of a specialised nature for
which alternate sources of supply are not available to enable comparison of prices, transactions
made in pursuance of contracts entered in the Register maintained under section 301 of the
Companies Act, 1956 are made at prices which are reasonable having regard to the prevailing
market prices at the relevant time.
vii.
In our opinion and according to the information and explanations given to us, the Company has complied
with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from
the public, except for updating details of depositors in the Register of Deposits in respect of public
deposits aggregating to Rs. 14.51 million (required to be maintained in terms of Section 58A of the
Companies Act, 1956) pending receipt of application forms. According to the information and
explanations given to us, no order has been passed by the Company Law Board or the National Company
Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
viii.
In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants
appointed by the Management have been commensurate with the size of the Company and nature of its
business.
ix.
We have broadly reviewed the books of account maintained by the company pursuant to the companies
(Cost Accounting Records) Rules, 2011 prescribed by the central Government under section 209 (1) (d)
of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records
have been maintained. We have, however, not made a detailed examination of the records with a view to
determine whether they are accurate or complete.
x.
According to the information and explanations given to us in respect of statutory dues:
a.
The Company has generally been regular in depositing undisputed dues including Provident Fund,
Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, Customs Duty and
Cess with the appropriate authorities. We are informed that the Company’s operations did not give
rise to any Investor Education and Protection Fund and Excise Duty.
b.
There are no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service tax, Customs Duty and Cess as at 31 March, 2012 for a
period of more than six months from the date they became payable.
c.
Details of dues of Income Tax that have not been deposited on account of disputes are as follows:
Statute
Nature of Dues
Forum where the
dispute is pending
Period to
which the
amount
relates
Amount
Involved
(Rupees in
million)
Income
Act, 1961
Tax
Income tax, interest
and penalty
Income Tax Appellate
Tribunal
2001-02
2.47
Income
Act, 1961
Tax
and penalty
Commissioner of
Income Tax (Appeals)
2001-02
2.12
Income
Act, 1961
Tax
and penalty
Commissioner of
2002-03
26.65
Income
Act, 1961
Tax
and penalty
Commissioner of
2003-04
125.67
There are no dues in respect of Wealth Tax, Sales Tax, Customs Duty, Service Tax and Cess which
have not been deposited on account of any dispute.
77
xi.
The accumulated losses of the Company at the end of the financial year are less than fifty percent of its
net worth. The Company has not incurred cash losses in the current financial year but had incurred cash
losses in the immediately preceding financial year.
xii.
In our opinion and according to the information and explanations given to us, the Company has not
defaulted in the repayment of dues to banks and financial institutions. According to the information and
explanations given to us, the Company did not have any outstanding debentures during the year.
xiii.
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 and financial institutions are
not prima facie prejudicial to the interests of the Company.
xiv.
In our opinion and according to the information and explanations given to us, the term loans have been
applied for the purpose for which they were obtained.
xv.
In our opinion and according to the information and explanations given to us, and on an overall
examination of the Balance Sheet, we report that the Company has used funds raised on short term basis,
to the extent of Rs. 1,811.81 million for long term investment.
xvi.
According to the information and explanations given to us, the Company had not issued any debentures
during the period covered by our audit report.
xvii. The Management has disclosed the end use of money raised by rights issues and we have verified the
same.
xviii. To the best of our knowledge and according to the information and explanations given to us, no fraud by
the Company and no fraud on the Company has been noticed or reported during the year.
JITENDRA AGARWAL
Partner
78
(FORMERLY IBN18 BROADCAST LIMITED)
BALANCE SHEET AS AT 31 MARCH, 2012
Notes
Reference
1. Shareholders’ funds
(a) Share capital
2.
3.
Current liabilities
(b) Trade payables
Total
ASSETS
1. Non - current assets
(a) Fixed assets
(i)
Tangible assets
(ii)
Intangible assets
(b)
(c)
(d)
2.
As at
31.03.2012
(Rupees)
As at
31.03.2011
(Rupees)
3
4
724,188,260
7,049,936,019
7,774,124,279
475,629,098
6,418,980,734
6,894,609,832
5
6
7
1,931,390,594
42,938,936
120,215,586
2,094,545,116
570,736,106
15,952,942
62,517,925
649,206,973
8
9
10
11
4,483,979,517
1,149,747,203
1,178,471,288
3,991,450
6,816,189,458
16,684,858,853
1,866,723,379
355,811,342
701,852,993
2,771,437
2,927,159,151
10,470,975,956
1,237,322,343
37,682,005
2,784,699
1,277,789,047
10,508,086,057
406,520,975
167,731,286
12,360,127,365
651,293,564
13,104,939
3,188,550
667,587,053
7,184,924,111
147,818,755
826,937,737
8,827,267,656
380,464
2,537,212,346
312,197,687
1,301,450,321
173,490,670
4,324,731,488
16,684,858,853
509,602
963,167,574
452,536,408
200,527,696
26,967,020
1,643,708,300
10,470,975,956
12
13
14
15
Current assets
(a) Inventories
(b) Trade receivables
(c) Cash and cash equivalents
(d) Short-term loans and advances
(e) Other current assets
16
17
18
19
20
Total
See accompanying notes forming part of the financial statements in terms of our report attached
For and on behalf of the Board of Directors
JITENDRA AGARWAL
Partner
Noida
4 August, 2012
RAGHAV BAHL
Director
GURDEEP SINGH PURI
General Manager – Finance
Noida
4 August, 2012
79
SANJAY RAY CHAUDHURI
Director
HITESH KUMAR JAIN
AGM Corporate Affairs and
Company Secretary
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2012
Notes
Reference
1.
2.
3.
4.
Other income
Total Revenue
Expenses:
(a)
(b)
Finance costs
(c)
Depreciation and amortization
expenses
(d)
Other expenses
Total Expenses
5.
Profit / (Loss) before tax (3 -4)
6.
Tax expense
Less: Income tax adjustments of prior
years (net)
7.
Profit / (Loss) for the year (5 -6)
8.
Earnings/ (loss) per equity share (See
note 28)
(Face value of Rupees 2 each)
(a)
Basic
(b)
Diluted
See accompanying notes forming part of the financial statements
In terms of our report attached
Year ended
31.03.2012
(Rupees)
6,206,997,147
666,527,306
6,873,524,453
Year ended
31.03.2011
(Rupees)
2,526,484,260
95,139,418
2,621,623,678
23
24
12
1,541,043,748
853,963,366
244,597,989
805,327,884
400,785,886
116,854,570
25
4,112,751,786
6,752,356,889
121,167,564
1,791,152,482
3,114,120,822
(492,497,144)
28,742,605
-
92,424,959
(492,497,144)
0.19
0.19
(2.20)
(2.20)
21
22
JITENDRA AGARWAL
Partner
Noida
4 August, 2012
RAGHAV BAHL
Director
GURDEEP SINGH PURI
Noida
4 August, 2012
80
Director
HITESH KUMAR JAIN
Company Secretary
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012
Year ended
31.03.2012
(Rupees)
A.
B.
CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for :
- Depreciation
- Finance Cost
- Net gain on foreign currency transaction and
translation
- Net profit on sale of long term investments in others
- Liabilities / provisions no longer required written
back
- Interest income
- Dividend on long term investments
Adjustments for (increase) / decrease in operating
assets:
Inventories
Trade receivables
liabilities:
Trade payables
Increase / (Decrease) in current and non-current
liabilities
Tax paid
CASH FLOW FROM INVESTING ACTIVITIES
- in subsidary / affiliates (including share application
money)
Investments sold
- in subsidary / affiliates
Interest received
81
Year ended
31.03.2011
(Rupees)
121,167,564
(492,497,144)
244,597,989
32,169,212
4,949,921
853,963,366
(10,622,000)
116,854,570
627,069
4,527,283
400,785,886
-
(267,191,164)
(12,083,395)
(42,721,698)
(16,518,159)
(67,071,743)
(10,349,866)
(144,148,375)
(125,100)
(189,100,000)
225,588,240
22,100,000
816,444,560
(41,542,104)
4,001,471
(119,994,897)
2,138,162,205
(114,949,111)
(18,672,376)
(7,093,549)
300,543
(231,496,426)
827,106
24,133,231
(8,424,969)
216,559,300
(400,256,161)
7,213,894
1,220,013
-
(124,403,511)
(24,619,446)
2,771,437
16,150,467
2,522,635,349
(101,254,440)
2,421,380,909
(386,303,672)
56,086,668
(330,217,004)
(199,484,127)
9,834,183
(36,286,137)
3,874,578
(2,623,224,972)
(2,746,132,600)
269,040,000
12,083,395
125,070,737
16,518,159
64,981,700
C.
CASH FLOW FROM FINANCING ACTIVITIES
Finance cost paid
Increase / (Decrease) in current maturities of long-term
debt
Cash and cash equivalents as at the beginning of the
year
Cash and cash equivalents acquired on merger
Year ended
31.03.2012
(Rupees)
125,100
189,100,000
(2,217,455,684)
Year ended
31.03.2011
(Rupees)
(2,697,044,300)
(794,786,027)
(111,276,733)
18,224,727
848,524,868
(206,861,032)
(330,084,567)
(346,001,112)
(23,458,247)
(52,553,515)
3,495,902,288
435,358,686
(1,973,107,074)
60,666,081
(576,258,764)
(372,333,539)
452,536,408
1,596,807,107
(1,430,454,197)
1,882,990,605
231,994,818
312,197,687
452,536,408
Notes:
4.
The above Cash flow statement has been prepared under the indirect method set out in AS-3 prescribed
in Companies (Accounting Standards) Rules, 2006.
5.
Figures in brackets indicate cash outflow.
6.
Previous year figures have been regrouped and recast wherever necessary to conform to the current
year classification.
JITENDRA AGARWAL
Partner
Noida
4 August, 2012
RAGHAV BAHL
Director
GURDEEP SINGH PURI
Noida
4 August, 2012
82
Director
HITESH KUMAR JAIN
Company Secretary
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
1.
Background and Scheme of Arrangement
1.1
Background
TV18 Broadcast Limited (“The Company” or “TV18”) (formerly known as ibn18 Broadcast Limited
(“ibn18”)) was incorporated on 6 June, 2005 as Global Broadcast News Private Limited. The Company
was converted into a public limited Company and a revised Certificate of Incorporation was issued to
give effect to this change with effect from 12 December, 2005. The commercial operations of the
Company commenced on 17 December, 2005. Later, the name of the Company was changed to ibn18
Broadcast Limited and a revised Certificate of Incorporation was issued to give effect to this change on
02 April, 2008. In the current year, the name of the Company has been changed from ibn18 Broadcast
Limited to TV18 Broadcast Limited. A fresh certificate of incorporation has been issued to the
Company to give effect to this change on 17 June, 2011. The Company is in the business of
broadcasting; telecasting, relaying and transmitting general news programmes and operates the news
channels “CNN IBN” (consequent to a licensing and content sharing agreement with Turner
Broadcasting System Asia Pacific, Inc.).
After merger of ibn7 undertaking of ibn18 Media & Software Limited (formerly Jagran TV Private
Limited) during the financial year 2008-09, ibn18 has been broadcasting, telecasting, relaying and
transmitting hindi general news programmes and operates the news channel “IBN7”.
Network 18 Media & Investments Limited is the holding company by virtue of management control
over the Company’s operations and is also holding 51.24% of Shares of the Company as at 31 March,
2012.
1.2
Scheme of Arrangement (Scheme)
The Board of Directors of the Company in its meeting held on 7 July, 2010 considered and approved a
Scheme of Arrangement (“the Scheme”) between the Company, Network18 Media & Investments
Limited (‘Network 18’), erstwhile Television Eighteen India Limited (‘TEIL’) and other group
companies, under sections 391 to 394 read with section 78, 100 to 103 of the Companies Act, 1956. As
per the Scheme, TEIL’s news business inter-alia consisting of business news channels viz. CNBC
TV18 and CNBC Awaaz were demerged and consolidated with the Company. On the same date, ibn18
Media & Software Limited (ibn18 Media) a subsidiary of the Company and iNews.com Limited
(iNews) a subsidiary of TEIL were merged into the Company. Since these were the wholly owned
subsidiary company of the TV18 and TEIL respectively, no consideration was paid to their
shareholders. As per the Scheme, the shareholders of TEIL had been given 68 shares of TV18 in lieu of
100 shares held in TEIL.
The shareholders of the Company approved the Scheme on 21 December, 2010. The Scheme was heard
and approved by the Hon'ble Delhi High Court on 26 April, 2011. The certified copy of the order of the
Hon'ble Delhi High Court approving the scheme was filed with the Registrar of Companies, N.C.T. of
Delhi & Haryana on 10 June, 2011. On this date the Scheme became effective from the Appointed Date
of 1 April, 2010.
Subsequent to the merger of the news business of erstwhile TEIL, TV18 is now also broadcasting,
telecasting, relaying and transmitting english and hindi business news programmes namely CNBC
TV18 and CNBC Awaaz.
The financial impact of the Scheme of Arrangement referred to above on the financial statements is as
follows:
a.
Transfer of news business of TEIL
i. As per the Scheme, TEIL’s news business inter-alia consisting of business news channels viz.
83
CNBC TV18 and CNBC Awaaz was demerged from TEIL and merged with TV18. The details
of the assets and liabilities of TEIL being transferred to TV18 at its book value as at the
appointed date is mentioned below:
Particulars
Amount
(Rupees)
1.
2.
3.
4.
Fixed assets (Net)
Investments
Deferred tax assets
Current assets, loans and advances:
-Inventories
- Sundry Debtors (including Unbilled revenue)
- Cash and Bank Balances
- Loan and advances
5. Less: Current liabilities and provisions:
- Current Liabilities
- Provisions
6. Net current assets (4-5)
7. Total assets (1+2+3+6)
8. Total liabilities
-Secured Loan
-Unsecured Loan
-Employee stock options outstanding
9. Net value of assets transferred on demerger (7-8)
10. Share capital issued pursuant to the Scheme
11. Balance credited to securities premium (9-10)
3,520,911
1,369,893,548
1,993,898,895
1,289,030,162
1,348,866,789
40,905,874
1,873,854,177
1,700,000,000
148,222,103
Amount
(Rupees)
718,444,278
557,384,905
74,559,830
4,656,343,516
1,389,772,663
3,266,570,853
4,616,959,866
3,722,076,280
894,883,586
247,886,606
646,996,980
ii. As per the scheme, during the intervening period (i.e. 1 April, 2010 to 31 March, 2011), TEIL
shall be deemed to have been carrying on all business and activities relating to news business
on behalf of the Company and all profits accruing to the transferor Company, or losses arising
or incurred by them relating to the news business shall be treated as the profits or losses of the
Company and accordingly credit balance of statement of profit and loss of Rs. 349,484,839 of
TEIL news business for the period 1 April, 2010 to 31 March, 2011 was adjusted from the
opening balance of the statement of profit and loss.
b.
Merger of IBN18 Media & Software Limited and i-News.com Limited
As per the Scheme, i-News.com Limited, a subsidiary of TEIL and IBN18 Media & Software Limited, a
subsidiary of the Company has merged into the Company. The details of the assets and liabilities of
these companies being transferred to the Company at its book value as at the appointed date is
mentioned below:
Particulars
1.
2.
3.
4.
5.
Fixed assets (Net)
- Inventories
- Loan and advances
Less: Current liabilities and provisions:
- Provisions
Net current assets (2-3)
Other assets – Miscellaneous expenditure
84
IBN 18 Media &
Software Limited
(Rupees)
393,992
i-News.com
Limited
(Rupees)
33,421,691
192,564
115,842
308,406
58,662
117,967
176,629
42,686
42,686
265,720
-
92,468
92,468
84,161
35,926,067
Particulars
6.
7.
Total assets (1+4+5)
Total liabilities
Unsecured Loan
Deficit in Statement of Profit and loss
Net value of assets transferred pursuant to
Scheme of Arrangement (6-7-8)
Investments in these wholly owned subsidiary
Balance debited to securities premium (9-10)
8.
9.
10.
11.
i-News.com
Limited
(Rupees)
69,431,919
659,712
5,819,963
3,611,956
60,000,000
1,000,000
(340,288)
60,000,000
-
c.
The Company has fair valued its assets and assets acquired as on the appointed date from TEIL and
iNews under the Scheme (such assets comprise investments, deferred tax asset, miscellaneous
expenditure, debtors and loans and advances) and have in accordance with the Scheme, debited Rs.
577,621,696 to the Securities Premium Reserve being the differential between the book value and the
fair value.
d.
Pursuant to the Scheme the deficit in the statement of profit and loss of the Company to the extent of Rs.
791,095,787 has been adjusted from the Capital Reserve and Securities Premium Reserve as follows:
i.
ii.
2.
IBN 18 Media &
Software Limited
(Rupees)
659,712
(Rupees)
168,720,000
622,375,787
791,095,787
Capital Reserve
Securities Premium Reserve
Total
Significant Accounting Policies
a.
Basis of accounting and preparation of financial statements
The financial statements are prepared under the historical cost convention on the accrual basis of
accounting and in accordance with the Generally Accepted Accounting Principles (GAAP) in India
and comply with the Accounting Standards prescribed by the Companies (Accounting Standards)
Rules, 2006 to the extent applicable and in accordance with the provisions of the Companies Act,
1956 as adopted consistently by the Company.
The figures for the year ended 31 March, 2012 for the Company includes the income, expenses,
assets and liabilities after considering the impact of the Scheme whereas the corresponding figures
for the previous year comprised the income, expenses, assets and liabilities for the Company prior
to the Scheme. Hence the figures for the current year are not strictly comparable with the
corresponding previous year.
a. Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements and reported
amounts of income and expenses during the year. Examples of such estimates include provision for doubtful
debts, future obligations under employee retirement benefit plans, income taxes and useful life of tangible
and intangible assets. Contingencies are recorded when it is probable that a liability will be incurred, and the
amount can be reasonably estimated. Actual results could differ from such estimates and the difference
between the actual results and the estimates are recognised in the periods in which the results are known/
materialise.
b. Inventories
Inventories consist of blank betacam tapes and are stated at cost on First in First out (FIFO) basis. Stocks of
other tapes are written off at the time of purchase.
85
c. Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in
value.
d. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax
is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future
cash receipts or payments. The cash flows from operating, investing and financing activities of the Company
are segregated based on the available information.
e. Depreciation and amortisation
Depreciation on all assets other than leasehold improvements, computer software and plant and machinery distribution equipments are charged on straight line basis over the estimated useful lives, using rates
(including double/ triple shift depreciation rates wherever applicable) prescribed by Schedule XIV of the
Companies Act, 1956.
Cost of leasehold improvements is being amortised over the remaining period of lease (including renewal
options) of the premises. Computer software and plant and machinery - distribution equipments are being
depreciated over a period of 5 years and 8 years respectively. These rates are higher than those prescribed in
Schedule XIV of the Companies Act, 1956.
News archives are depreciated on straight line basis at the rate of 4.75% per annum. Useful life of news
archives is estimated to be more than 10 years as the contents of the same are continuously used in day to
day programming and hence the economic benefits from the same arise for a period longer than 10 years.
Depreciation on additions is charged proportionately from the date of acquisition/ installation. Assets costing
Rs. 5,000 or less individually have been fully depreciated in the year of purchase.
f. Revenue Recognition
i.
Revenue from operations includes:
¾ Advertisement revenue comprising:
Revenue from sale of advertising time, which is recognised on the accrual basis when
advertisements are telecast in accordance with contractual obligations.
Revenue from sponsorship contracts, which is recognised proportionately over the term of the
sponsorship.
¾ Subscription revenue which is recognised on accrual basis in accordance with the terms of the contract
with the distribution and collection agency, for the services rendered.
¾ Facility and equipment rental which is accounted for on the accrual basis for the period of use of
equipment by the customers.
¾ Program revenue which is accounted for on dispatch of programs to customers in accordance with
contractual commitments.
¾ Revenue from sale of television content is recognised on transmission of audio-video content to the
customer and their acceptance.
¾ Revenue from media related professional and consultancy services is recognised in accordance with
86
contracts on rendering of services.
ii. Other income includes
¾ Dividends on investments are accounted for when the right to receive dividend is established.
¾ Interest income is recognized on time proportionate basis, taking into account the amount outstanding
and the rate applicable.
g. Tangible Fixed Assets
Fixed assets are stated at their original cost of acquisition/installation less depreciation. All direct expenses
attributable to acquisition/installation of assets are capitalised.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and other capital work-in-progress are
carried at cost, comprising direct cost, related incidental expenses and attributable interest.
h. Intangible assets
Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of
an intangible asset comprises its purchase price, including any import duties and other taxes (other than those
subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making
the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an
intangible asset after its purchase / completion is recognised as an expense when incurred unless it is
probable that such expenditure will enable the asset to generate future economic benefits in excess of its
originally assessed standards of performance and such expenditure can be measured and attributed to the
asset reliably, in which case such expenditure is added to the cost of the asset.
i. Foreign Currency Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.
Exchange differences on foreign exchange transactions settled during the year are recognised in the
statement of profit and loss.
Monetary items denominated in foreign currency and outstanding at the balance sheet date are translated at
the exchange rate prevailing at the date of balance sheet, the resultant exchange differences are recognised in
the statement of profit and loss.
j. Investments
Long term investments are stated at cost less provision for other than temporary diminution in carrying value
of each investment. Current investments are carried at lower of cost or fair value.
k. Employee Benefits
i.
The Company’s Employee’s Provident Fund scheme is a defined contribution plan. The Company’s
contribution to the employees' provident fund is charged to the statement of profit and loss during the
period in which the employee renders the related service.
ii.
Short term employee benefits (Medical, Leave travel allowance, etc.) expected to be paid in exchange
for the services rendered are recognised on undiscounted basis.
iii.
The Company provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering
eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a
lump sum payment to vested employees at retirement, death, incapacitation or termination of
employment, of an amount based on the respective employee’s salary and the tenure of employment.
87
The Company also makes contributions to funds administered and managed by the insurance
companies for the amount notified by the said insurance companies.
The present value of the obligation under such defined benefit plan is determined based on actuarial
valuation using the projected unit credit method, which recognises each period of service as giving rise
to additional unit of employee benefit entitlement and measures each unit separately to build up the
final obligation. The obligation is measured at the present value of the estimated future cash flows. The
discount rate used for determining the present value of the obligation is based on the market yields on
government securities as at the balance sheet date. Actuarial gains/losses are recognised immediately in
the statement of profit and loss.
The liability with respect to the Gratuity Plan is determined based on actuarial valuation done by an
independent actuary at the year end and any differential between the fund amount as per the insurer and
the actuarial valuation is charged to the statement of profit and loss.
iv.
Benefits comprising long term compensated absences constitute other long term employee benefits.
The liability for compensated absences is provided on the basis of an actuarial valuation done by an
independent actuary at the year end. Actuarial gains and losses are recognised immediately in the
l. Segment Information
i. Business Segments
Based on similarity of activities, risks and reward structure, organisation structure and internal reporting
systems, the Company operates only in the media business segment which mainly comprises media and
related operations.
ii. Geographic Segments
Secondary segmental reporting is performed on the basis of the geographical location of customers i.e.
within India and overseas.
m. Leases
i. Operating Lease
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased asset are classified as operating leases. Operating lease charges are recognised as an expense in the
statement of profit and loss on a straight-line basis over the lease term.
ii. Finance Lease
Leases under which the Company assumes substantially all the risks and rewards of ownership are
classified as finance leases. The lower of fair value of asset and present value of minimum lease rentals is
capitalised as fixed assets with corresponding amount shown as lease liability. The principal component
in the lease rentals is adjusted against the lease liability and the interest component is charged to
n. Earnings Per Share
The Company reports basic and diluted earnings per equity share in accordance with AS-20, Accounting
Standard on Earnings Per Share. Basic earnings per equity share is computed by dividing net profit after tax
by the weighted average number of equity shares outstanding at the year end. Diluted earnings per equity
share is computed using the weighted average number of equity shares and dilutive potential equity shares
outstanding at the year end and except where the results would be anti-dilutive.
o. Taxes on income
Income tax comprises current tax and deferred tax. Current tax are determined in accordance with the
88
provisions of Income Tax Act, 1961. Advance taxes and provisions for current taxes are presented in the
balance sheet after off setting advance taxes paid and income tax provisions.
Deferred tax charge or credit is recognised on timing differences being the difference between taxable
income and accounting income that originate in one year and are capable of reversal, subject to consideration
of prudence, in one or more subsequent years. Deferred tax assets and liabilities are measured using the tax
rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised unless there is
a virtual certainty that there will be sufficient future taxable income available to realise such assets.
Minimum alternate tax (MAT) paid in accordance with Income Tax Act, 1961, which gives rise to future
economic benefit in the form of adjustment from income tax liability, is recognised when it is reasonably
certain that the Company will be able to set off the same and adjust it from the current tax charge for that
year.
p. Impairment of assets
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment.
If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is
recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount
is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case
of revalued assets.
q. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as a result of past events and it is
probable that an outflow of resources will be required to settle the obligation in respect of which a reliable
estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value
and are determined based on the best estimate 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. Contingent
liabilities are disclosed in the Notes.
r. Employee Stock Based Payments
Stock options granted to the employees under the stock options schemes are accounted at intrinsic value as
per the accounting treatment prescribed in the guidance note on Employee share based payments issued by
the Institute of Chartered Accountants of India. Accordingly, the excess of market price, determined as per
the guidance note, of underlying equity shares (market value), over the exercise price of the options is
recognised as deferred stock compensation expense and is charged to statement of profit and loss on a
straight line basis over the vesting period of the options. The amortised portion of the cost is shown under
shareholders’ funds. The value of the option forfeited during the year is credited to General Reserve.
s. Barter Transactions
Barter transactions are recognised at the fair value of consideration receivable or payable. When the fair
value of the transactions cannot be measured reliably, the revenue/expense is measured at the fair value of
the goods/services provided/received adjusted by the amount of cash or cash equivalent transferred.
t. Share issues expenses
Share issue expenses are adjusted on the date of issue of shares against the Securities Premium Reserve as
permissible under Section 78(2) of the Companies Act, 1956, to the extent balance is available for utilisation
in the Securities Premium Reserve.
u. Service tax input credit
Service tax input credit is accounted for in the books in the period in which the underlying service received is
89
accounted and when there is no uncertainty in availing / utilising the credits.
3.
Share capital
Particulars
As at
31.03.2012
Number of
Amount
Shares
(Rupees)
a. Authorised
Equity shares of Rupees 2 each
b. Issued, Subscribed and fully paid up
(i) Issued
(ii) Subscribed and fully paid up
(iii) Subscribed but not fully paid up
(iv) Shares forfeited
Total
Refer Notes (i) to (vi) below:
As at
31.03.2011
Number of
Amount
Shares
(Rupees)
380,000,000
760,000,000
275,000,000
550,000,000
362,130,907
362,081,871
49,036
362,130,907
724,261,814
724,163,742
24,518
724,188,260
237,867,300
237,796,965
70,335
237,867,300
475,734,600
475,593,930
35,168
475,629,098
Notes:
(i)
The Company has only one class of equity shares having a par value of Rupees 2 per share. Each
holder of equity shares is entitled to one vote per share held.
(ii)
Details of shares held by holding company and their subsidiaries
Particulars
Network18 Media &
Investments Limited, the
Holding Company
Subsidiaries of the holding
company
(iii)
As at
31.03.2011
Number of
Amount
Shares
(Rupees)
64,892,544
129,785,088
34,600
69,200
55,525,443
111,050,886
185,561,248
371,122,496
120,417,987
240,835,974
Details of shares held by each shareholder holding more than 5% shares :
Particulars
Limited.
RVT Investments Private Limited
Network18 Group Senior
Professional Welfare Trust
(iv)
As at
31.03.2012
Number of
Amount
Shares
(Rupees)
185,526,648
371,053,296
As at
31.03.2012
Number of
% Holding
Shares held
185,526,648
51.24%
28,725,006
7.93%
As at
31.03.2011
Number of
% Holding
Shares held
64,892,544
27.28%
49,990,843
13,453,354
21.02%
5.66%
Aggregate number of shares issued for consideration other than cash during the period of 5
years immediately preceding the Balance Sheet date
Particulars
Shares alloted to shareholders of erstwhile Television
Eighteen India Limited pursuant to Scheme of Arrangement
in the current year between the Company, Television
Eighteen India Limited (TEIL), Network18 Media &
Investments Ltd. (Network18) and other Network18 Group
90
As at
31.03.2012
Number of Shares
held
123,943,303
As at
31.03.2011
Number of Shares
held
-
Particulars
(v)
As at
31.03.2012
Number of Shares
held
companies (See note 1.2)
Shares alloted to Gupta family and ibn18 Trust pursuant to
scheme of amalgamation between the Company, Jagran TV
Private Limited and BK Fincap Private Limited in financial
year 2008-09
Shares alloted to Network18 Media & Investment Limited
pursuant to scheme of amalgamation between the Company
with SRH Broadcast News Holdings Limited in financial
year 2006-07
Shares reserved for issue under options under ESOP
scheme 2007 (See note 33)
(v)
As at
31.03.2011
Number of Shares
held
16,306,155
16,306,155
102,040,815
102,040,815
3,999,979
2,450,717
Reconciliation of the number of shares and amount outstanding at the beginning and at the
end of the reporting year:
Particulars
Opening
Balance
Shares
issued
during the
year
Employee Conversion
Shares
Shares
stock
into fully issued under forfeited
options
paid up
the scheme
plan
of
arrangement
[Refer to
note
1.2(a)(i)]
(i) Issued
Year ended 31 March, 2012
- Number of shares
237,867,300
320,304
- Amount (Rupees)
475,734,600
640,608
- Number of shares
181,651,478 54,495,443 1,720,379
- Amount (Rupees)
363,302,956 108,990,886 3,440,758
- Number of shares
237,796,965
320,304
21,299
- Amount (Rupees)
475,593,930
640,608
42,598
- Number of shares
181,651,478
- 1,720,379
54,425,108
- Amount (Rupees)
363,302,956
- 3,440,758 108,850,216
(iii) Subscribed and not fully paid up*
- Number of shares
70,335
(21,299)
- Amount (Rupees)
35,168
31,949**
(42,598)
- Number of shares
- 54,495,443
- (54,425,108)
- Amount (Rupees)
- 27,247,722
- (27,212,554)
Closing
Balance
123,943,303
247,886,606
- 362,130,907
- 724,261,814
-
- 237,867,300
- 475,734,600
123,943,303
247,886,606
- 362,081,871
- 724,163,742
237,796,965
475,593,930
-
- (49,036)
- (24,518)
-
-
70,335
35,168
* `0.50 paid up out of the face value of ` 2 per share
** Amount received on 21, 299 shares at ` 1.50 each pursuant to conversion of partly paid-up shares into fully
paid up shares
As at
31.03.2012
(Rupees)
4
a.
Reserves and Surplus
Capital reserve
Opening balance
Less: Amount transferred from statement of profit and loss (see
91
168,720,000
168,720,000
As at
31.03.2011
(Rupees)
168,720,000
-
As at
31.03.2012
(Rupees)
As at
31.03.2011
(Rupees)
para e below) as per the scheme of arrangement [See also note 1.2
(d)]
b.
c.
Securities premium reserve
Opening balance
Add:
-Amounts received pursuant to issue of equity shares under rights
issue
-Amounts received pursuant to issue of equity shares under ESOPs
-Amounts transferred from Share options outstanding account on
exercise of share options
-Amount credited on transfer of news business of TEIL as per the
Scheme of Arrangement [See note 1.2 (a)]
Less:
-Amount debited on merger of the IBN18 Media & Software
Limited as per the Scheme of Arrangement [See note 1.2 (b)]
-Rights issue expenses / expenses for Scheme of Arrangement
-Amount transferred from miscellaneous expenditure [See note 20
(b)]
- Amount incurred and adjusted during the year
-Difference of book value and fair value of assets adjusted
pursuant to Scheme of arrangement [See note 1.2 (c)]
-Amount transferred from statement of profit and loss (see para e
below) as per the scheme of Arrangement [See also note 1.2 (d)]
Share options outstanding account
Opening balance
Add: Amount transferred from TEIL pursuant to Scheme of
arrangement (See note 1.2)
Less: Adjusted on account of forfeiture / lapse of options
Amount transferred to General Reserve on expiry of
options
Transferred to Securities Premium Reserve on exercise of
share options
Deferred employee compensation
Opening balance
Add: Amount transferred from TEIL pursuant to Scheme of
arrangement (See note 1.2)
Less: Adjusted on account of forfeiture / lapse of options
Less: Amount charged to Statement of Profit and Loss
d.
e.
General Reserve
Opening balance carried forward
Add: Amount transferred from TEIL under Scheme of
Arrangement pertaining to ESOPs
Add: Amount transferred from ESOPs reserve on account on
expiry of options
Surplus/(deficit) in the statement of profit and loss
Opening Balance
Add/(less):
-Profit/(loss) for the year
-Profit/(loss) for the year ended 31 March, 2011 of the
92
-
168,720,000
8,501,569,857
3,487,938,873
1,299,239
4,982,042,600
19,164,542
18,423,309
91,180,087
31,149,375
646,996,980
-
340,288
-
23,458,247
89,312,882
15,724,260
577,621,696
1,428,196
-
622,375,787
-
7,947,933,649
8,501,569,857
23,842,987
62,606,670
56,991,187
-
1,181,645
5,793,297
1,998,825
-
18,423,309
31,149,375
61,051,406
23,842,987
1,557,520
20,843,580
8,083,628
-
1,181,645
4,949,921
16,269,534
44,781,872
1,998,825
4,527,283
1,557,520
22,285,467
9,998,341
88,575,033
9,998,341
-
5,793,297
-
104,366,671
9,998,341
(2,283,592,931)
(1,791,095,787)
92,424,959
(492,497,144)
As at
31.03.2012
(Rupees)
undertakings merged with the Company pursuant to scheme of
arrangement
-Profit from TEIL's news business [See note 1.2 (a)(ii)]
-I-News.com Limited
-IBN18 Media & Software Limited
-Amount adjusted through transfer to Capital Reserve (see para a
above) and Securities Premium Reserve (see para b above) as per
the Scheme of Arrangement [See also note 1.2 (d)]
5
a.
349,484,839
3,575,387
(134,214)
791,095,787
-
(1,047,146,173)
7,049,936,019
(2,283,592,931)
6,418,980,734
666,666,664
365,800,000
57,628,495
7,414,000
1,032,466,664
65,042,495
8,546,076
2,794,191
8,452,854
1,190,855
881,925,000
501,708,565
1,931,390,594
Security details for term loans covered under Note 5 (a)(i) and Note 10 (a) is as follows:
I. Term loans under Long term borrowings
1,032,466,664
II. Term loans under Other current liabilities
531,365,734
1,563,832,398
i. This term loan from bank carries interest @ 13.75% to 15%
23,685,065
p.a. and is repayable in 72 equal monthly installment of
Rupees 4,144,450. The term loan is secured by first charge
over entire fixed assets of channel IBN7 amounting to
Rupees 320,400,000 as on 31 March 2009, and unconditional
and irrevocable corporate guarantee of Network18 Media &
Investments Limited (Holding Company).
ii. This term loan from others carries interest @ 13.50% p.a.
7,414,000
and is repayable in 60 equal monthly installment of Rupees
1,062,000 in advance of every month. The term loan is
secured by first charge on all movable assets including plant
and machinery and equipment acquired / to be acquired out
of the proceeds of the term loan of channel IBN7 and
unconditional and irrevocable corporate guarantee of
iii. This term loan from bank carries interest @ 13.75% to
33,333,333
15.50% p.a. and is repayable in 3 equal half yearly
installment of Rupees 33,333,333. The term loan is secured
by subservient charge on all movable fixed assets (all present
and future) of CNN-IBN and IBN 7 channels of the
Company and unconditional and irrevocable corporate
guarantee of Network18 Media & Investment Limited, to
remain valid during currency of credit facility.
iv. This term loan from bank carries interest @ 13.75% to
-
570,736,106
Total
Long - term borrowings
i. Term loans (secured)
-from banks
-from others
(See note (b) below for security and terms of repayment)
ii.
iii.
iv.
b.
As at
31.03.2011
(Rupees)
Vehicle loans (secured)
-from others
(Vehicle loans are secured by hypothecation of vehicles and
payable in equal monthly installments)
Long term maturities of finance lease obligations (secured)
-from others (See note 39)
(Secured by hypothecation of assets purchased under finance
lease agreement and payable in equal monthly installments)
Public Deposits (unsecured)
(Deposits are repayable at the time of maturity)
93
-
65,042,495
489,977,403
555,019,898
74,028,565
20,158,000
420,833,333
40,000,000
As at
31.03.2012
(Rupees)
v.
vi.
6
7
8
a.
14.25% p.a. and is repayable in 16 equal quarterly
installment of Rupees 20,000,000. First charge on the
movable assets of CNN-IBN and IBN 7 channels of the
Company, subject to the charges on current assets created/to
be created in favour of the Company’s bankers for securing
borrowings for working capital requirements and
unconditional and irrevocable personal guarantee of a
Director and Letter of comfort from Television Eighteen
India Limited (TEIL) whereby TEIL undertakes to take all
necessary steps to ensure that the Company fulfills all
necessary obligations under the agreement including
arrangement of funds for payment to the bank in accordance
with the terms and conditions of the loan agreement.
This term loan from others carries interest @ 13.50% to
14.50% p.a. and is repayable in 15 equal quarterly
installment of Rupees 33,400,000. This is secured by first
pari passu charge on movable fixed assets of the existing
CNBC news channels and is collaterally secured by pledge
of shares by the promoters/ group entities, personal guarantee
of the Director of the Company and corporate guarantee of
This term loan from bank carries interest @ 13.00% p.a. and
is repayable in 18 equal monthly installment of Rupees
55,555,556 after the moratorium period of 6 months. The
term loan is secured by subservient charge on all current
assets and movable fixed assets (present and future) and is
secured by personal guarantee of the Directors of the
Company and corporate guarantee of Network18 Media &
Investments Limited.
Interest accrued but not due on public deposits
Long term provisions
Provision for employee benefits:
i.
Provision for compensated absences
ii.
Provision for gratuity [See note no. 32(II)(d)]
Short-term borrowings
i.
Cash credit (including working capital demand loan)
- from bank (secured)
(See note (a) below for security and terms of repayment)
ii.
Commercial papers (unsecured)
- from banks
- from others
(Payable on maturity)
iii. Public deposits (unsecured)
iv. Others (unsecured)
As at
31.03.2011
(Rupees)
499,400,000
-
1,000,000,000
-
1,563,832,398
555,019,898
42,938,936
15,952,942
37,294,204
82,921,382
120,215,586
22,123,561
40,394,364
62,517,925
1,013,373,681
674,719,378
750,000,000
1,000,000,000
-
1,720,605,836
1,086,604,000
105,400,001
4,483,979,517
1,866,723,379
Security details for cash credit facilities including working capital demand loans is as follows:
i.
The cash credit including working capital demand loans is
400,844,778
547,357,300
repayable on demand and carries interest @ 10.25% p.a. to
17.50% p.a. and is secured against first pari passu charge on
all the current assets of CNN IBN and IBN7 channels of the
Company and additionally secured by unconditional and
94
As at
31.03.2012
(Rupees)
ii.
iii.
9
10
a.
b.
c.
d.
e.
f.
11
irrevocable corporate guarantee of Network18 Media &
Investments
Limited.
Further out of the total secured amount, Rupees
155,014,479 is additionally secured by second charge on
movable fixed assets of CNN IBN and IBN7 channels of the
Company.
The cash credit is repayable on demand and carries interest
@ 13.75% to 15% p.a. and is secured against hypothecation
of book debts
repayable on demand and carries interest @ 10.50% to 18%
p.a. and is secured against first pari passu charge on all
current assets of the CNBC channels of the Company with
other working capital lenders.
As at
31.03.2011
(Rupees)
125,320,388
127,362,078
487,208,515
-
1,013,373,681
674,719,378
Trade Payables
Trade Payables
1,149,747,203
355,811,342
According to the records available with the Company, there were no dues payable to entities that are classified as
Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 during the
year.This has been relied upon by the auditors. Hence disclosures, if any, relating to amounts unpaid as at the year
end together with the interest paid / payable as required under the said Act have not been given.
Other Current Liabilities
Current maturities of long-term debt Term loans
from banks
390,351,734
477,233,403
from others
141,014,000
12,744,000
(See note 5 (b) - for the details of security and guarantee of Long
term borrowings)
531,365,734
489,977,403
Vehicle loans (secured by hypothecation of Vehicles)
6,286,018
1,562,078
117,890,000
Current maturities of finance lease obligations
2,263,687
653,853
(See note no. 39) (Secured against assets obtained under finance
lease arrangements)
91,240,179
55,053,123
Income received in advance (Unearned revenue)
74,952,064
14,311,218
Unpaid matured deposits and interest payable thereon
21,847,530
Other payables
Statutory remittances (Contributions to PF, ESIC,
141,072,804
117,478,374
Withholding Taxes, VAT, Service Tax, etc.)
Payables on purchase of fixed assets
22,284,272
4,253,919
Advance from customers
169,269,000
18,563,025
1,178,471,288
701,852,993
Short - term provisions
2,242,736
930,662
Provision for gratuity [See note 32(II)(d)]
1,748,714
1,840,775
3,991,450
2,771,437
95
(a)Tangible Assets
Freehold
Land
Leasehold
improvements
Plant and
Equipment
- on finance
lease
- owned
Electrical
installation
Computers
- on finance
lease
- owned
Furniture and
Fixtures
Vehicles
Office
equipment
Total
Previous
year
(b) Intangible Assets
News
archives
Computers
software
Total
Previous year
Grand Total
Previous
year
Particulars
-
102,962,120
-
1,275,236,548
25,888,062
-
124,176,418
24,762,021
38,549,265
18,422,139
1,609,996,573
-
20,498,422
149,122,914
169,621,336
1,779,617,909
-
212,395,147
1,453,839
798,316,938
12,903,571
385,875
72,000,984
18,544,607
21,182,713
19,669,217
1,157,342,955
1,134,095,254
-
122,686,160
122,686,160
121,388,279
1,280,029,115
1,255,483,533
Transferred
in pursuant to
the Scheme
490,064
Opening
balance as at
01.04.2011
12 Fixed Assets
19,393,717
1,297,881
242,708,051
31,071,872
19,393,717
-
223,314,334
29,773,991
16,347,635
2,616,167
50,785,176
7,565,861
298,244
102,719,326
2,444,055
10,300,693
27,380,477
2,856,700
Gross Block
Additions
2,118,749
122,183,409
6,526,290
2,118,749
-
120,064,660
6,526,290
9,070,361
3,976,067
16,057,229
7,269,074
77,796,910
1,824,214
3,854,605
216,200
Deletions/
adjustments
96
309,582,464
122,686,160
3,180,171,666
1,280,029,115
289,084,042
20,498,422
2,870,589,202
1,157,342,955
67,009,252
36,731,456
230,905,349
43,603,415
684,119
2,098,475,902
39,411,474
11,754,532
338,883,139
3,130,564
Closing
balance as at
31.03.2012
109,581,221
95,563,927
615,630,612
500,800,685
109,581,221
-
506,049,391
405,236,758
7,441,458
15,278,496
61,772,714
9,052,360
15,595
281,143,872
5,058,467
25,625
126,260,804
-
Opening
balance as
at
01.04.2011
147,020,261
1,125,118,732
-
133,797,357
13,222,904
978,098,471
-
15,163,885
11,241,563
82,776,113
14,290,798
44,076
763,985,124
10,697,569
-
79,899,343
-
17,417,613
14,017,294
244,597,989
116,854,570
16,441,270
976,343
227,180,376
102,837,276
5,976,376
1,964,581
25,752,682
2,697,785
99,676
136,369,511
2,791,409
535,709
50,992,647
-
2,118,636
80,180,015
2,024,643
2,118,636
-
78,061,379
2,024,643
5,385,434
3,297,869
15,816,868
6,937,984
-
41,806,957
1,303,683
-
3,512,584
-
Accumulated Depreciation
Transferred Depreciation
On
in pursuant
for the year
Deletions
to the
Scheme
271,900,459
109,581,221
1,905,167,318
615,630,612
257,701,212
14,199,247
1,633,266,859
506,049,391
23,196,285
25,186,771
154,484,641
19,102,959
159,347
1,139,691,550
17,243,762
561,334
253,640,210
-
Closing
balance as at
31.03.2012
37,682,005
13,104,939
1,275,004,348
664,398,503
31,382,830
6,299,175
1,237,322,343
651,293,564
43,812,967
11,544,685
76,420,708
24,500,456
524,772
958,784,352
22,167,712
11,193,198
85,242,929
3,130,564
13,104,939
664,398,503
-
13,104,939
-
651,293,564
-
13,741,255
4,390,721
10,228,270
9,492,247
370,280
517,173,066
7,845,104
1,428,214
86,134,343
490,064
(Amount in Rupees)
Net Block
As at
As at
31.03.2012
31.03.2011
As at
31.03.2012
(Rupees)
13 Non Current Investments
Trade Investments (at cost)
- in equity shares of
a. Subsidiaries company (Unquoted)
i. 96,615 (Previous year 10,000) equity shares of Rs. 10
each fully paid up, in RVT Media Private Limited, a
wholly owned subsidiary
ii. 100 (Previous year 100) equity share of USD 1 each
fully paid up, in ibn18 (Mauritius) Limited, a wholly
owned subsidiary
iii. Nil (Previous year 67,294,750) equity shares of IBN18
Media & Software Limited of Rs. 2 each fully paid up
[See note 1.2(b)]
b. Joint ventures (Unquoted)
i. 8,625,000 (Previous year 8,625,000) equity shares of
IBN Lokmat News Private Limited of Rs. 10 each fully
paid up
ii. 47,768,791 (Previous year 42,217,217) equity share of
Viacom18 Media Private Limited of Rs. 10 each fully
paid up
c. Others Companies
- Quoted
i. 275,000 (Previous year Nil) equity shares of Refex
Refrigerants Limited of Rs. 10 each fully paid up
ii. 500,000 (Previous year Nil) equity shares of Provogue
India Limited of Re. 1 each fully paid up
iii. 500,000 (Previous year Nil) equity shares of Prozone
Capital Shopping Centres Limited of Rs. 2 each fully
paid up
iv. 474,308 (Previous year Nil) equity shares of KSL &
Industries Limited of Rs. 4 each fully paid up
- Unquoted
v. Nil (Previous year 12,163,717) Class A Ordinary
shares of Web18 Holdings Limited of USD 0.00374
each fully paid up
- in preference shares of
d. Joint venture (Unquoted)
i. 220,000 (Previous year 220,000) 0.10% Non
Cumulative Redeemable Preference Shares of Series "I"
of IBN Lokmat News Private Limited of Rs. 100 each
fully paid up
ii. 250,000 (Previous year 250,000) 0.10% Non
Cumulative Redeemable Preference Shares of Series
"II" of IBN Lokmat News Private Limited of Rs. 100
each fully paid up
iii. 1,696,250 (Previous year 1,287,500) 0.10% Non
Cumulative Redeemable Preference Shares of Series
"III" of IBN Lokmat News Private Limited of Rs. 100
each fully paid up
- in equity warrants of
e. Joint venture (Unquoted)
Nil (Previous year 3,000,000) share warrants of Series "C"
of Viacom18 Media Private Limited of Re. 1 each fully paid
up [See Note 27 (a)]
- in debentures of
97
As at
31.03.2011
(Rupees)
346,560,000
100,000
5,081
5,081
-
1,000,000
86,250,000
86,250,000
8,564,425,247
6,741,225,275
8,566,250
-
13,529,310
-
5,520,690
-
8,869,560
-
-
1,848,836
44,000,000
44,000,000
50,000,000
50,000,000
339,250,000
257,500,000
-
3,000,000
As at
31.03.2012
(Rupees)
f. Subsidiary Company (Unquoted)
36,249,900 (Previous year 13,249,900) debenture in ibn18
(Mauritius) Limited of USD 1 each fully paid up
Less: Provision for diminution in value of ibn18 (Mauritius)
Limited
Aggregate amount of quoted investments
Market value of quoted investments
Aggregate amount of unquoted investments (Net of provision)
Aggregate provision for the diminution in value of investments
14 Long - Term Loans And Advances
a. Capital advances (Unsecured, considered good)
b. Security deposits
Unsecured, considered good
Doubtful
Less: Provision for doubtful deposits
c. Loans and advances to employees*
Doubtful
Less: Provision for doubtful advances
d. Advance income tax [net of provision for tax Rupees
410,972,847 (Previous year Rupees 53,493,195) Unsecured,
considered good] [See note 26 (v)]
e. Advance to vendors
Unsecured, considered doubtful
* includes loans recoverable from Key
Personnel (KMP) (See note 34)
15 Other Non - Current Assets
(Unsecured, considered good)
a. Others - Application money paid (See note 34)
-for shares
b. Fixed deposits with banks*
16
a.
17
a.
b.
Management
As at
31.03.2011
(Rupees)
1,700,047,846
658,932,846
(658,937,927)
(658,937,927)
10,508,086,057
36,485,810
36,106,381
10,471,600,247
658,937,927
7,184,924,111
7,184,924,111
658,937,927
3,905,392
2,120,715
133,222,202
2,122,360
135,344,562
2,122,360
133,222,202
59,037,644
59,037,644
59,037,644
57,010,104
60,689,307
117,699,411
60,689,307
57,010,104
212,383,277
6,608,957
6,608,957
6,608,957
80,051,439
1,617,194
1,617,194
1,617,194
406,520,975
50,000,000
147,818,755
-
666,300,000
167,731,286
160,637,737
167,731,286
826,937,737
* Fixed deposits is under lien with banks against Bank Guarantees to the Custom authorities to meet export
obligation and is restricted from being exchanged or used to settle a liability for more than 12 months from
the balance sheet date. [also See note 26 (ii)]
Inventories [See note 2(b)]
(At lower of cost and net realizable value)
Tapes and compact discs
380,464
509,602
Trade receivables (Unsecured)
Trade receivables outstanding for a period exceeding six months
from the date they were due for payment
considered good
628,957,037
61,573,118
considered doubtful
234,155,506
30,514,095
Less: Provision for doubtful trade receivables
234,155,506
30,514,095
628,957,037
61,573,118
Other trade receivables
1,908,255,309
901,594,456
98
18 Cash and cash equivalents
a. Cash on hand
b. Balances with banks
i.
in current accounts
ii.
in deposit accounts (refer notes below)
Of the above, the balances that meet the definition of Cash and
cash equivalents as per AS 3 Cash Flow Statements is
Notes:
(i) Deposit account includes funds earmarked as follows:
- Balance with banks held as per Rule 3A of
Companies (Acceptance of deposits) Rules, 1975
- Balances held as margin money against borrowings
- Unutilised money of rights issue
(ii) Includes account which have an original maturity of more
than 12 months.
19 Short - term loans and advances
a. Loans and advances
- to related parties (See note 34)
- Subsidiaries
- fellow subsidiaries
- joint ventures
- entities under significant influence
- to employees
- to others
b.
c.
d.
e.
f.
Security deposits
Service tax credit receivable
Advance income tax
Prepaid expenses
Others
-Advance to vendors
20 Other Current Assets
a. Unbilled revenue
b. Unamortised expenses
-Opening Balance
-Less: Rights issue and Scheme related expenses adjusted by
transfer to Securities Premium Reserve (See note 4(b))
-Add: Amount incurred for rights issue during the year
c. Others
Interest accrued but not due on deposits
Others (insurance claims etc.)
21 Revenue From Operations
a. Revenue from operations
i. Advertisement and subscription income
ii. Sale of content
99
As at
31.03.2012
(Rupees)
2,537,212,346
As at
31.03.2011
(Rupees)
963,167,574
1,584,905
555,830
139,431,455
171,181,327
312,197,687
312,197,687
146,246,485
305,734,093
452,536,408
452,536,408
3,029,400
162,990,600
100,000,000
46,457,536
65,987
132,092,000
32,612
3,410,694
190,498,409
52,351,653
541,819,631
69,786,443
857,866,830
33,054,032
132,872,598
163,532,261
81,971,153
10,901,131
45,344,675
30,760,002
11,416,960
473,906
98,896,674
12,142,891
64,407,597
16,071,405
32,153,447
1,301,450,321
9,009,129
200,527,696
19,500,000
-
23,458,247
23,458,247
89,312,882
89,312,882
111,276,733
111,276,733
23,458,247
23,458,247
42,670,980
42,957
42,713,937
173,490,670
2,638,192
870,581
3,508,773
26,967,020
5,889,819,238
6,398,188
2,464,343,445
42,676,283
iii. Other media income and equipment rentals
b. Other operating income
i. Income from equity deals
22 Other income
a. Interest
- Inter company balances
- Fixed deposits
- Others
b. Net profit on sale of long term investments in others
c. Net profit on sale of current investments
d. Liabilities / provisions no longer required written back
e. Net gain on foreign currency transaction and translation
f. Income from ibn18 trust on sale of shares
g. Dividend on Non-current investments-from others
h. Miscellaneous income
23
a.
b.
c.
d.
e.
Employee Benefits Expenses
Salaries and wages
Contribution to provident fund
Expense on employee stock option scheme (see note 33)
Staff welfare expenses
Gratuity expenses (see note 32)
24 Finance Cost
a. Interest expense on:
- Term loans
- Cash credit
- Public deposits
- Inter corporate deposits and others
b. Other borrowing cost
25 Other expenses
Studio and equipment hire charges
Telecast and uplinking fees
Tapes consumed
Content and franchise expenses (including royalty)
Media professional fees
Other production expenses
Rent including lease rentals (see note 39)
Electricity expenses
Insurance
Travelling and conveyance
Vehicle running and maintenance
Communication expenses
Distribution, advertising and business promotion
Repairs and maintenance
- Plant and machinery
- Others
Legal and professional expenses (See note below)
Rates and taxes
Office upkeep and maintenance
Directors sitting fees
Loss on fixed assets sold / scrapped / written off
100
As at
31.03.2012
(Rupees)
139,774,310
As at
31.03.2011
(Rupees)
19,464,532
171,005,411
6,206,997,147
2,526,484,260
86,907,239
37,289,540
19,951,596
267,191,164
12,083,395
42,721,698
10,622,000
189,100,000
125,100
535,574
666,527,306
53,130,194
13,941,549
16,518,159
10,349,866
1,199,650
95,139,418
1,333,234,959
70,560,254
4,949,921
114,399,319
17,899,295
1,541,043,748
687,238,287
36,675,939
4,527,283
59,090,331
17,796,044
805,327,884
325,594,534
139,177,034
222,734,777
45,909,956
120,547,065
853,963,366
147,261,694
46,167,909
88,837,886
49,616,792
68,901,605
400,785,886
30,863,416
102,493,611
14,688,921
318,853,103
277,191,701
35,026,737
155,306,465
60,397,069
11,180,260
316,109,599
79,248,815
59,986,808
2,117,963,040
61,585,731
57,622,500
4,736,295
104,772,601
109,493,230
20,246,554
64,049,572
31,510,531
4,652,663
119,979,164
74,332,101
32,967,771
955,991,074
88,098,053
21,636,454
53,813,139
1,780,445
80,386,205
320,000
32,169,212
43,109,002
6,189,582
24,107,983
43,773
33,685,326
315,000
627,069
As at
31.03.2012
(Rupees)
Net loss on foreign currency transactions and translations
Bad debts and Provision for doubtful trade and other receivable,
loans and advances (net)
Miscellaneous expenses
Note:
a. Statutory audit fees (including quarterly limited reviews)
b. For other services
c. Reimbursement of expenses
26.
225,588,240
As at
31.03.2011
(Rupees)
469,006
22,100,000
29,650,493
4,112,751,786
18,565,954
1,791,152,482
7,250,000
2,245,000
252,287
9,747,287
5,500,000
4,700,000
10,200,000
Capital commitment, litigations and contingent liabilities
i. Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 33,119,442
(Previous year Rs. 2,900,000).
ii. The Company has purchased capital equipment under the ‘Export Promotion Capital Goods Scheme’. As per
the terms of the licenses granted under the scheme, the Company has undertaken to achieve an export
commitment of Rs. 873,663,241 (Previous year Rs. 740,639,339) over a period of 8 years commencing from
10 August, 2005. The difference between the previous year and the current year amount pertains to the
obligation transferred from iNews.com Limited (subsidiary of TEIL) pursuant to the Scheme over a period of
8 years commencing from 21 October, 2004. In the event the Company is unable to execute its export
obligations, the Company shall be liable to pay customs duty of Rs. 109,207,905 (Previous year Rs.
92,579,917) and interest on the same at the rate of 15 per cent compounded annually. The banks have given a
guarantee amounting to Rs. 115,272,170 (Previous year Rs. 115,272,170) on behalf of the Company to the
customs authorities for the same. The Company is hopeful of meeting the required export obligation.
iii. Guarantees given by banks on behalf of the Company outstanding for the year ended Rs. 6,193,125
(Previous year Rs. 25,000,000).
iv. The Company has given corporate guarantees of Rs. 249,000,000 (Previous year Rs. 249,000,000) towards
credit facility given by banks to IBN Lokmat News Private Limited. As at the year end Rs. 101,743,668 was
outstanding in respect of such loans.
v. Claims against the Company not acknowledged as debts include demands raised by Income Tax authorities
aggregating to Rs. 239,330,980. Amounts deposited by the Company against these claims – Rs. 82,406,374
which are included in Advance Income Tax in Note 14. No provision has been made in the accounts for
these demands as the Company expects a favorable decision in appeal. This liability is related to TEIL
operations transferred to the Company pursuant to the Scheme.
vi. The Company has extended corporate guarantee of Rs. 50,900,000 in favour of ICICI Home Finance
Company Limited in consideration of loan facility extended by ICICI Home Finance Company Limited to
the employees of the Company. As at the year end, Rs. 47,441,177 was outstanding in respect of such loan.
This liability is related to TEIL operations transferred to the Company pursuant to the Scheme.
vii. Mr. Victor Fernandes and other (“plaintiffs”) had on 25 August, 2006 filed a suit as derivative action on
behalf of e-Eighteen.com Limited before the High Court of Bombay against Mr. Raghav Bahl, erstwhile
Television Eighteen India Limited (TEIL), the Company and other TEIL Group entities. The plaintiffs are
minority shareholders of e-Eighteen.com Limited and have alleged that Mr. Raghav Bahl, TEIL, ICICI
Global Opportunities Fund and e-Eighteen.com Limited had entered into a subscription cum shareholders
agreement dated 12 September, 2000 under which Mr. Raghav Bahl and TEIL had inter alia undertaken that
any opportunity offered to them shall only be pursued or taken up through e-Eighteen.com Limited or its
wholly owned subsidiaries. The plaintiffs have alleged that Mr. Raghav Bahl and TEIL have promoted and
developed various businesses through various entities which should have under the aforesaid agreement
rightfully been undertaken by e-Eighteen.com Limited or its wholly owned subsidiaries.
101
The plaintiffs have alleged that by not doing so Mr. Raghav Bahl and TEIL have caused monetary loss to eEighteen.com Limited as well as to the plaintiffs. The plaintiffs have valued their claim in the suit at Rs.
31,140,600,000 and have inter alia prayed that Mr. Raghav Bahl, TEIL and other TEIL Group entities be
ordered to transfer to e-Eighteen.com Limited all their businesses, activities and ventures along with all
assets and intellectual property. The plaintiffs had filed a notice of motion on 18 September, 2006 seeking an
interim relief. A reply had been filed with the Bombay High Court on 14 November, 2006. The said notice of
motion was dismissed on 8 August, 2008 against which the plaintiffs have filed an appeal before the division
bench of the Bombay High Court. The said notice of motion for interim relief was dismissed by the High
Court on September 21, 2011.
Based on the legal advice by the legal counsel, management is of the view that the above claim made by the
plaintiffs is unlikely to succeed and has accordingly made no provisions in the financial statements.
viii. The Company has received legal notices of claims / lawsuits filed against it relating to infringement of
copyrights, objectionable contents and defamation suits in relation to the programmes produced by it, the
aggregate claim being Rs. 3,123,653,000 (Previous year Rs. 3,124,110,000). In the opinion of the
management, no material liability is likely to arise on account of such claims/law suits and thus no provision
has been made against these in the financial statements.
ix. Damages/ claims of Rs. 2,600,000,000 have been filed against the Company by the former channel
distributor of the Company. A counter claim has been filed for damages of Rs. 2,540,000,000 along with a
claim for recovery of dues of Rs. 214,000,000 against the distributor. The matter is pending before the
Hon’ble High court of Delhi. No provision has been made in the accounts for these demands as the Company
expects a favorable decision.
27.
Investments
a) Investments in Viacom18 Media Private Limited (Viacom18)
The Company had in earlier years subscribed to 12 million ‘Investor Warrants’ of USD 3.33 per warrant
aggregating to USD 39,960,000 in Viacom18 as follows:
i.
Series “A”
4,500,000 warrants
ii.
Series “B”
4,500,000 warrants
iii.
Series “C”
3,000,000 warrants
and had paid Rupee 1 each for these warrants aggregating to Rs. 12 million.
Each warrant was convertible into one fully paid up equity share of Viacom18 on exercise of options and
on payment of the balance of the stipulated warrant consideration price. The option was exercisable during
a period of 12, 24 and 36 months from the date of allotment of warrants of “A”, “B”, and “C” series
respectively. During the year, warrants allotted under Series “C” has been cancelled and shares were
allotted against share application money paid which was equal in numbers as were allocated to joint
venture partner in Viacom18.
The Company’s total investment in the capital of Viacom18 is Rs. 8,564,425,247.
As at 31 March 2012, Viacom18 has accumulated losses and its net worth has been partially eroded.
b) Investments in IBN Lokmat News Private Limited (IBN Lokmat)
The Company has investments of Rs. 519,500,000 (comprising equity and preference shares) in IBN
Lokmat. As at 31 March, 2012 IBN Lokmat has significant accumulated losses and its net worth has been
substantially eroded.
c) Investment in RVT Media Private Limited (RVT Media)
The Company has an investment of Rs. 346,560,000 in equity shares of RVT Media. RVT Media’s
consolidated financial statements have accumulated losses and its net worth has been partially eroded.
102
d) Investment in ibn18 Mauritius Limited
The Company has investments of Rs. 5,081 in equity shares and Rs. 1,700,047,846 in debentures of ibn18
(Mauritius) Limited as at 31 March, 2012.
ibn18 (Mauritius) Limited has significant accumulated losses of Rs. 444,087,314 and its net-worth has been
completely eroded as at 31 March, 2012.
As at 31 March, 2012, ibn18 (Mauritius) Limited is having net assets (net of liabilities other than debentures)
of Rs. 1,255,136,360 against which debentures outstanding is Rs. 1,699,223,675 resulting into short fall of
Rs. 444,087,314 as at the year end.
During the year ended 31 March, 2012, ibn18 (Mauritius) Limited has made a profit of Rs. 74,291,696
mainly from interest on loan given to related parties and has accumulated foreign exchange reserve of Rs.
140,205,454.
Accordingly, the company had made a provision of Rs. 658,937,927 towards diminution in the value of total
investment.
In view of the above facts and having regard to the long term investment and strategic involvement with the
Company, no further provision is considered necessary for diminution in the value of the investments in
these Companies.
28.
Earnings Per Equity Shares
Basic earnings per equity share have been computed by dividing net profit after tax by the weighted average
number of equity shares outstanding at the year end. Diluted earnings per equity share have been computed
using the weighted average number of equity shares and dilutive potential equity shares outstanding during the
year. The details are:
Particulars
Unit
Year ended
31.03.2012
Year ended
31.03.2011
Rs.
92,424,959
(492,497,144)
Numbers
481,847,253
224,032,396
Earnings Per Equity Shares:
a.
Net profit/(loss) after tax
b.
Weighted average number of equity shares
used in computing basis earnings per share
(Nominal Value is Rs. 2/- per share)
c.
d.
Basic Earnings per Share
Rs.
0.19
Weighted average of the number of shares
Numbers
2,899,982
issued under Options
e. Adjustment for number of shares that would
Numbers
(2,284,375)
have been issued at the fair value
f. Weighted average of number of equity shares
Numbers
482,462,860
used in computing diluted earnings per share
g. Diluted Earnings per Share*
Rs
0.19
* Since the effect of the dilution is anti- dilutive, diluted EPS is same as basic EPS.
29.
(2.20)
1,627,977
(1,302,418)
224,357,955
(2.20)
Segment Reporting
The Company is engaged in the business of production and telecast of news and current affairs programmes
primarily in India. As the Company operates in a single business and geographical segment, the reporting
requirements for primary and secondary segment disclosures prescribed by paragraphs 39 to 51 of Accounting
Standard 17 - Segment Reporting, have not been provided in these financial statements.
103
30.
Additional Information required to be given pursuant to Schedule VI of the Companies Act, 1956
Particulars
a.
Year ended
31.03.2012
Expenditure in foreign currency
i. Content and franchise expenses (including
royalty)
ii. Other production expenses
iii. Travelling and conveyance
b.
c.
d.
31.
CIF value of imports
i. Capital goods
ii. Tapes Purchased
Tapes consumed
i. Domestic
ii. Imported
Earnings in foreign currency
Income from operations
Year ended
31.03.2011
295,974,910
83,005,427
89,067,512
26,496,845
9,331,802
394,374,224
6,034,897
115,537,169
92,874,851
2,071,943
94,946,794
3,689,737
1,232,208
4,921,945
10,923,824
3,765,097
14,688,921
3,564,298
1,171,997
4,736,295
108,886,348
557,938
Deferred tax
In view of absence of virtually certainty of realisation of deferred tax asset (DTA) on unabsorbed tax losses,
deferred tax assets have been recognised only to the extent of deferred tax liability (DTL). The major
components of DTA/DTL as recognised in the financial statements are as follows:(Amounts in Rupees)
Opening balance
(Charged)/
Closing balance
as at
Credited to the
as at
01.04.2011
Statement of Profit
31.03.2012
and Loss during the
year
Deferred Tax Liabilities (DTL)
Tax impact of between book balance and
75,620,129
21,788,172
53,831,958
tax balance of fixed assets
(33,479,494)
(42,140,635)
(75,620,129)
Total A
75,620,129
21,788,172
53,831,958
(33,479,494)
(42,140,635)
(75,620,129)
Deferred Tax Assets (DTA)
Brought forward business losses and
75,620,129
21,788,172
53,831,958
Unabsorbed depreciation carried forward
(33,479,494)
(42,140,635)
(75,620,129)
to be adjusted in future years
Total B
75,620,129
21,788,172
53,831,958
(33,479,494)
(42,140,635)
(75,620,129)
Net DTA/(DTL)A-B
32.
Employee Benefits:
I. Defined contribution plans
The Company has recognised Rs. 70,560,254 (Previous Year Rs. 36,675,939) for provident fund
contributions in the Statement of Profit and Loss.
II. Defined Benefit Plans
(a) Gratuity
The gratuity liability arises on retirement, withdrawal, resignation or death of an employee. The aforesaid
104
liability is calculated on the basis of fifteen days salary (i.e. last drawn salary plus dearness allowance) for
each completed year of service subject to completion of five years of service.
The following table set out the funded / unfunded status of the retirement benefits plans and the amount
recognised in the financial statements:
Particulars
a.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
b.
i.
ii.
iii.
iv.
v.
vi.
vii.
c.
i.
ii.
iii.
d.
i.
ii.
iii.
e.
i.
ii.
iii.
iv.
v.
vi.
f.
i.
ii.
iii.
iv.
v.
vi.
31.03.2012
(Rupees)
Change in defined benefit obligation
Present value of obligation at the beginning of the year
(pertaining to liability received under Scheme, from
TV18)
Current Service Cost
Interest Expenses
Past service cost
Actuarial (Gain) / Loss
Benefits Paid
Present value of obligations at the end of the year
Fair value of Plan Assets
Fair value of plan assets at the beginning of the year
TV18)
Expected return on scheme assets
Employer’s contribution
Benefits Paid
Actuarial Gain / (Loss)
Fair value of plan assets at the end of the year
Return on Plan Assets
Expected return on plan assets
Actual return on plan assets
Amount recognised in the Balance Sheet
Present value of defined benefit obligations
Net liability/(asset) recognised in the balance sheet
- Non current liability
- Current liability
Expenses recognised in statement of profit and Loss
Current service costs
Interest expense
Expected return on investment
Net actuarial (gain)/loss recognized during the year
Past service
Expenditure recognised in statement of Profit and Loss
Principal Actuarial assumptions
for Gratuity and compensated absences
Rate for discounting liabilities
Expected salary increase rate
Expected rate of return
Mortality table used
Retirement age
Withdrawal rates
- Upto 30 years
42,235,139
44,534,494
27,526,280
-
14,902,358
7,375,419
(3,336,784)
(8,959,936)
96,750,690
8,503,838
2,202,102
1,807,309
5,282,795
(3,087,185)
42,235,139
13,012,342
-
1,106,049
2,500,000
(4,473,446)
(64,351)
12,080,594
-
1,106,049
(64,351)
10,41,698
-
96,750,690
12,080,594
84,670,096
82,921,382
17,48,714
42,235,139
42,235,139
40,394,364
1,840,775
14,902,358
7,375,419
(1,106,049)
(3,272,433)
17,899,295
31.03.2012
8,503,838
2,202,102
5,282,795
1,807,309
17,796,044
31.03.2011
8.00% p.a.
6.00% p.a.
8.50% p.a.
LIC (1994-96)
duly modified
60 Years
3%
105
31.03.2011
(Rupees)
8.00% p.a.
6.00% p.a.
LIC (1994-96)
duly modified
60 Years
3%
Particulars
31.03.2012
(Rupees)
2%
1%
- Upto 44 years
- Above 44 years
31.03.2011
(Rupees)
2%
1%
Notes:
1. The discount rate is based on the prevailing market yield of Indian Government Securities as at the
balance sheet date for the estimated term of obligations.
2. The expected return is based on the expectation of the average long term rate of return on investments
of the fund during the estimated term of the obligations.
3. The estimates of future salary increases considered takes into account the inflation, seniority,
promotion and other relevant factors.
4. Plan assets mainly comprise funds managed by the insurer i.e. ING Vysya Life Insurance Company
Limited and Life insurance Corporation of India.
Year ended
The present value of
the Gratuity benefits
(Rupees)
96,750,689
42,235,139
27,526,280
25,992,612
9,002,744
31.03.2012
31.03.2011
31.03.2010
31.03.2009
31.03.2008
The experience adjustments
arising on the Gratuity
benefits
(Rupees)
(3,336,784)
5,282,795
(7,042,350)
7,744,498
(109,656)
The Company’s best estimate of contributions expected to be paid during the next 12 months beginning
after the balance sheet date is Rs. 21,957,417 (previous year Rs. 16,428,944).
33.
GBN Employees Stock Option Plan 2007 (“ESOP 2007”)
a. The Company had established an Employee Stock Option Plan (ESOP 2007) in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 which have been approved by the Board of Directors and the shareholders. A
Remuneration/ Compensation Committee comprising independent, non-executive members of the Board of
Directors administers the ESOPs. All options under the ESOPs are exercisable for equity shares. The
Company had declared stock split of 1 equity share of face value of Rs. 10 each in 5 equity share of Rs. 2
each through postal ballot dated 19 December 2007, the results of which were declared on 25 January, 2008.
The Company plans to grant upto 12,500,000 options to eligible employees and directors of the Company
and its subsidiaries and holding company of the Company. The Company has increased maximum number of
options that can be granted under GBN ESOP 2007 from 8,500,000 to 12,500,000 options at Annual General
Meeting held on 09 September, 2011.
b. Options which have been granted under ESOP 2007 shall vest with the grantee over the vesting period from
the date of grant. The exercise period of the options is a period of two years after the vesting of the options.
Each option is exercisable for one equity share of Rs. 10 each (for one equity share of Rs. 2 each after split)
fully paid up on payment of exercise price (as determined by the Remuneration/Compensation Committee)
of share determined with respect to the date of grant.
c. During the year the Remuneration/Compensation Committee of the Board of Directors has granted
2,211,207 options of the Company under GBN Employee Stock Option Plan 2007 to those employees of
TEIL who have become employees of the Company pursuant to the Scheme of Arrangement, under a single
plan existing in the Company.
The vesting period, vesting terms and exercise period for these options are kept as same as in the original
scheme and are as follows:
106
Particulars
Options granted
Vesting date
Vesting requirements
Exercise Period
Particulars
Options granted
Vesting date
Exercise Period
Employee Stock Option
Plan 2004
49,028
Option to vest after one
year from the date of
grant within such period
not exceeding ten years
as may be determined by
the
Remuneration/
Compensation
Committee.
Three years of service
from the date of grant of
option
During two years after
vesting date.
Senior Employee Stock
Option
Plan 2004
303,790
grant within such period
not exceeding ten years
as may be determined by
the
Remuneration/
Compensation
Committee.
Two to four years of
service from the date of
grant of option
During a period of
two/three years from the
vesting date.
Long Term Retention
Plan 2005
476,000
After four year from the
date of grant of options.
Four years of service
option.
vesting date.
Stock Option Plan
2005
Stock Option Plan
2007
Stock Option Plan 2007
(New)
10,472
grant
within
such
period not exceeding
ten years as may be
determined
by the
Remuneration/
Compensation
Committee.
Three years of service
from the date of grant
of option.
36,737
Option to vest after
one year from the date
of grant within such
period not exceeding
ten years as may be
determined by the
Remuneration/
Compensation
Committee.
One to four years of
service from the date
of grant of option.
1,335,180
After a minimum period of
one year from the date of
grant. The vesting shall
happen in one or more
tranches as may be decided
by the Remuneration/
Compensation Committee.
During one year after
vesting date.
During four years after
vesting date.
The Company has granted 7,231,849 options upto 31 March, 2012.
107
Option to vest over such
period, in such manner and
subject to conditions as
may be decided by the
Remuneration/
Compensation Committee
provided the employee
continues in service.
Exercise
period
will
commence
from
the
vesting date and extend
upto the expiry period of
the option as may be
decided
by
the
Remuneration/
d. The movement in the scheme is set out as under:
Particulars
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
Outstanding at the beginning of
year*
Granted during the year*
Granted during the year pursuant
to scheme of arrangement
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Number of equity shares of Rs. 2
each fully paid up to be issued on
exercise of option
Weighted average share price at
the date of exercise
Weighted average remaining
contractual life (years)
ESOP 2007
Year ended 31.03.12
Options
Weighted
Average
Price
(Numbers)
(Rupees)
2,450,717
68.91
ESOP 2007
Year ended 31.03.11
Options
Weighted
Average
Price
(Rupees)
(Numbers)
3,192,242
55.00
2,211,207
61.72
1,100,000
-
86.00
-
320,304
64,217
277,424
3,999,979
2,178,656
3,999,979
55.00
55.00
27.48
25.40
27.19
NA
1,720,379
121,146
2,450,717
957,769
2,450,717
55.00
55.00
68.91
55.00
NA
320,304
90.06
1,720,379
92.50
2.24
NA
2.81
NA
* Remuneration/Compensation committee (“Committee”) of the Company vide resolution dated 4 November,
2011 has re-priced its existing 3,849,374 options at market price of Rs. 45.40 on the date of re-pricing.
Subsequently taking into consideration further decline in the share prices of the Company, the Committee
vide its resolution dated 30 December, 2011 has again re-priced its 3,731,765 options at market price of Rs.
27.70 on the date of re-pricing, for the benefit of the employees covered under the ESOPs scheme.
e. The Finance Act 2009 has abolished Fringe Benefit Tax (FBT) on Employees' Stock Option Plan, hence
there is no charge in these financial statements.
f. Pro forma Accounting for Stock Option Grants
The Company applies the intrinsic value-based method of accounting for determining compensation cost for
its stock-based compensation plan. Had the compensation cost been determined using the fair value
approach, the Company’s net income and basic and diluted earnings per share as reported would have
reduced to the pro forma amounts as indicated:
Particulars
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Net Profit/ (Loss) as reported (a)
Add: Stock based employee compensation expense
debited to Statement of Profit and Loss
Less: Stock based employee compensation expense
based on fair value
Difference between (2) and (3)
Adjusted pro forma Profit/(Loss)
Basic earnings per share as reported
Pro forma basic earnings per share
Diluted earnings per share as reported
Pro forma diluted earnings per share
108
Year ended
31.03.2012
(Rupees)
92,424,959
4,949,921
Year ended
31.03.2011
(Rupees)
(492,497,144)
4,527,283
21,350,732
17,370,431
(16,400,811)
76,024,148
16,400,811
0.19
0.16
0.19
0.16
(12,843,148)
(505,340,292)
(12,843,148)
(2.20)
(2.26)
(2.20)
(2.26)
g. The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the
Black-Scholes model with the following significant assumptions
Particulars
Risk free interest rates (in %)
Expected life (in years)
Volatility (in %)
Dividend yield (in %)
Year ended 31.03.2012
7.85%
2.80 years
33.43%
0%
7.96%
3.01 years
39.36%
0%
The volatility of the options is based on the historical volatility of the share price since the Company's equity
shares are publicly traded, which may be shorter than the term of the options.
34.
Related Party Disclosures
Disclosures as required by the Accounting Standard (AS) 18 – “Related Party Disclosures” are as below:
a.
Related parties and their relationships
Name of Entity
1
2
3
Nature of Relationship
25
26
27
28
29
Network18
RVT Media Private Limited
RVT Media
AETN 18 Media Private Limited
AETN18
w.e.f 21 September, 2010
ibn18 Media and Software Limited (ibn18 Media)
Ibn18 Media
(upto 10 June, 2011 (also refer note 1.2)
Viacom18 Media Private Limited
Viacom18
IBN Lokmat News Private Limited
IBN Lokmat
Ibn18 (Mauritius) Limited
Ibn18 Mauritius
Web18 Software Services Limited
Web18
Infomedia18 Limited
Infomedia
digital18 Media Limited
Digital18
Bigtree Entertainment Private Limited
Bigtree
e-Eighteen.com Limited
E-18
NewsWire18 Limited
Newswire
Setpro18 Distribution Limited
Setpro18
Television Eighteen India Limited
TEIL
upto 10 June, 2011 (also refer note 1.2)
E-18 Limited, Cyprus
E-18, Cyprus
Television Eighteen Mauritius Limited, Mauritius
TEML
TV18 UK Limited
TV18 UK
TV18 Home Shopping Network Limited
TV18 HSN
Network 18 India Holdings Private Limited (Upto 10
N-18 Holding
June, 2011 )
RVT Investments Private Limited (Upto 10 June,
RVT
2011 )
Web 18 Holdings Limited, Cayman Islands
Web18 Holding
BK Holdings Limited, Mauritius
BKH
Television Eighteen Commodities control.com
TECCL
Limited (Upto 10 June, 2011 )
Care Websites Private Limited (Upto 10 June, 2011 )
Care
Moneycontrol Dot Com India Limited
MCD
Greycells18 Media Limited w.e.f 1 April, 2011
Greycells18
Colosceum Media Private Limited w.e.f 1 April, 2011
Colosceum
Raghav Bahl
RB
30
Sameer Manchanda (SM) upto 22 October, 2010
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
109
SM
Holding company
Subsidiary company
Subsidiary company
Subsidiary company
Joint venture
Joint venture
Subsidiary company
Fellow Subsidiary company
Key Management Personnel
(KMP)
Name of Entity
31
Rajdeep Sardesai
RS
32
33
Sagarika Ghose
SGA News Limited (upto 18 August, 2010)
34
Network18 Publications Limited
35
Network18 Group Senior Professional Welfare Trust
36
24X7 Learning Private Limited
37
IBN 18 Trust
SG
SGA News
Network18 Pub
Network18
GSP
24X7
IBN18
(KMP)
(KMP)
Relative of KMP (RS)
Entity under significant
influence of KMP
influence of KMP
influence of KMP
influence of KMP
influence of KMP
Note: Related parties have been identified by the Management of the company.
b.
Details of related parties transactions during the year and balances outstanding as at the year end:
Transactions
Holding
Company
Network18
49,188,725
(519,288)
TEIL
Web 18
Ibn18 Media
AETN18
Bigtree
Digital18
E-18
Greycell18
IBN Lokmat
Infomedia
Network18 Pub
Setpro18
TV18 HSN
Viacom18
Total
49,188,725
(519,288)
Interest Received
Network18
Web 18
RVT media
AETN18
E-18
Infomedia
NW18 GSP
Setpro18
TV18 HSN
Total
3,435,528
3,435,528
Subsidiary
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
Entity under
significant
influence
(1,582,000)
58,239,421
58,239,421
(1,582,000)
(3,630,972)
(13,534,644)
92,736
(92,736)
967,016
(519,276)
2,083,100
10,852,591
8,710,925
785,616
(785,616)
17,013,186
40,505,170
(18,563,244)
-
17,100,000
95,925,176
113,025,176
-
9,241,000
9,241,000
-
(1,301,916)
161,627
161,627
(692,601)
4,798
1,209,034
5,556
3,180,349
4,399,737
-
-
78,910,347
78,910,347
110
Transactions
Holding
Company
Subsidiary
(1,301,916)
IBN Trust
Gain on foreign currency transaction and
translation
TEML
Interest Paid
Network18
41,108,723
(2,612,421)
TEIL
RVT
N-18 Holding
Total
41,108,723
(2,612,421)
Expenditure for Services received
Network18
52,785,023
(8,160,731)
Digital18
E-18
Ibn18 Media
(1,866,000)
Infomedia
Greycells18
Newswire
Setpro18
SM
RS
TEIL
TV18 UK
Viacom18
SG
AETN18
604,500
Network18 Pub
Total
52,785,023
604,500
(8,160,731)
(1,866,000)
Reimbursement of expenses
received
Network18
108,922,802
(10,682,393)
AETN18
49,619,116
(7,476,657)
Bigtree
Digital18
E-18
Greycell18
IBN Lokmat
Infomedia
-
Fellow
Subsidiary
(692,601)
-
Entity under
significant
influence
-
-
-
-
26,936,314
-
-
-
(1,062,395)
(16,519,589)
(6,787,398)
(24,369,382)
-
-
-
2,110,006
2,082,858
27,186,310
5,427,302
1,167,423,715
(414,182,974)
(66,479,973)
4,620,105
(2,171,417)
1,208,850,296
(482,834,364)
(10,287,097)
18,028,500
(14,424,000)
2,233,614
(1,724,358)
20,262,114
(26,435,455)
4,949,298
4,949,298
-
(460,000)
4,502,430
4,502,430
(460,000)
267,319
(213,054)
29,538,697
(1,431,536)
57,381,537
3,172,098
11,674,313
-
46,185,688
(33,862,502)
-
-
111
Key
Managerial
Personnel
Joint
venture
189,100,000
Transactions
Holding
Company
Newswire
Setpro18
TEIL
TV18 HSN
Viacom18
Web18
Colosceum
Total
108,922,802
(10,682,393)
Reimbursement of expenses paid
Network18
146,003,221
(85,385,795)
E-18
IBN Lokmat
Infomedia
Setpro18
Viacom18
TEIL
Web18
AETN18
TV18 HSN
Digital18
Total
146,003,221
(85,385,795)
Assets Received
Network18
2,429,400
TV18 HSN
TEIL
Ibn18 Media
Total
2,429,400
Loan received during the year
Network18
3,049,000,000
(420,000,000)
N-18 Holding
RVT
Total
3,049,000,000
(420,000,000)
Loan given
Subsidiary
Fellow
Subsidiary
(60,000)
49,619,116
(7,536,657)
(7,153)
122,924
22,394,041
(19,621,263)
(49,721,803)
9,353,897
(107,300)
(3,353,780)
29,326
133,934,152
(74,455,889)
-
46,726,871
(196,080)
92,912,559
(34,058,582)
Entity under
significant
influence
-
7,035,411
7,035,411
-
987,504
(248)
1,630,948
(6,734,200)
347,158,918
(324,076,422)
(94,399,488)
(2,041)
213,260
(949,600)
(240,000)
349,990,630
(426,401,999)
-
964,353
(3,812,855)
14,720,474
(10,313,910)
15,684,827
(14,126,765)
-
-
(2,089,120)
(150,000)
-
-
-
-
(2,239,120)
-
-
-
-
(495,000,000)
(450,000,000)
(945,000,000)
-
-
-
112
Key
Managerial
Personnel
Joint
venture
Transactions
RVT Media
Holding
Company
Subsidiary
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
-
(30,000,000)
(102,431)
-
-
50,000,000
-
-
-
(30,102,431)
-
50,000,000
-
-
3,049,000,000
(870,000,000)
-
-
(1,924,718,781)
(495,000,000)
-
-
3,049,000,000
(870,000,000)
-
(2,419,718,781)
-
Investments in the Equity Shares
Viacom18
-
-
-
-
346,460,000
346,460,000
-
RS
AETN18
NW18 GSP
Total
Loan Repaid
RVT
Network18
N-18 Holding
NW18 GSP
Total
RVT
Total
-
Investments in the Debentures
Ibn18 Mauritius
- 1,041,115,000
Total
- 1,041,115,000
Investments in Preference Shares
IBN Lokmat
Total
Sale of Investment
TEML
269,040,000
Total
269,040,000
Guarantees taken
Network18
(500,000,000)
Total
(500,000,000)
Loan and Advance receivable (Outstanding against cost allocation expenses
reimbursement)
AETN18
3,410,694
(9,729,407)
Bigtree
(407,140)
Digital18
30,615,382
(951,429)
E-18
67,081,496
(10,214)
Greycell18
18,889,629
IBN Lokmat
-
113
Entity under
significant
influence
307,500,000
(2,262,600,00
0)
307,500,000
(2,262,600,00
0)
- 1,530,100,000
- (1,034,500,00
0)
- 1,530,100,000
- (1,034,500,00
0)
- 1,823,199,972
- (2,182,332,60
0)
- 1,823,199,972
- (2,182,332,60
0)
-
-
-
-
-
81,750,000
(44,000,000)
81,750,000
(44,000,000)
-
-
-
-
-
-
-
-
22,421,015
-
-
Transactions
-
-
17,563,827
(20,962,768)
56,174,168
-
-
(10,250,954)
-
Entity under
significant
influence
13,893,557
527,926,074
-
-
(1,171,724)
3,410,694
(10,901,131)
12,412
(22,171,290)
(841,834)
161,495
190,498,409
(45,344,675)
50,000,000
50,000,000
-
29,930,638
(20,509,048)
52,351,654
(30,760,002)
541,819,631
-
52,792,846
52,792,846
26,463,084
26,463,084
760,892
44,993,423
24,708,902
136,090,844
196,674,970
7,797,021
411,026,052
-
52,912,608
52,912,608
25,461,214
25,461,214
-
61,259
(61,259)
537,174
98,284,626
(12,318,191)
1,040,578
(813,295)
50,802,861
(399,394)
(163,465)
(7,848,481)
150,726,499
(21,604,085)
-
-
-
RVT Media
(26,100,000)
Total
(26,100,000)
Corporate Guarantee given to as outstanding
Ibn Lokmat
-
-
- (640,200,000)
- (640,200,000)
-
-
-
-
Infomedia
Network18 Pub
NW18 GSP
TV18 HSN
Viacom18
RVT Media
Web18
Newswire
RS
Colosceum
Total
Debtors
Network18
AETN18
Bigtree
Digital18
Greycell18
Infomedia
Network18 Pub
TEML
TV18 HSN
Viacom18
Total
Creditors
Network18
Holding
Company
Subsidiary
(13,448,912)
E18, Cyprus
Newswire
Setpro18
TV18 UK
TEML
TV18 HSN
TEIL
Total
(13,448,912)
Application Money paid pending allotment
Fellow
Subsidiary
Viacom18
114
Key
Managerial
Personnel
Joint
venture
249,000,000
Transactions
Holding
Company
Subsidiary
Corporate Guarantee Taken from as outstanding
Network18
1,669,600,000
(1,669,600,000)
Total
1,669,600,000
(1,669,600,000)
Total
c.
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
-
-
Entity under
significant
influence
- (249,000,000)
- (249,000,000)
- (249,000,000)
-
-
-
-
-
-
Rights issue
The Company had allotted 54,495,443 partly paid shares on rights basis to its equity shareholders during the
year ended 31 March, 2011. Out of this 54,446,407 shares were converted into fully paid up shares till 31
March, 2012 upon receipt of full and final call money and balance 49,036 shares have been forfeited in the
Board Meeting dated 19 January, 2012 for non-payment of full and final call money amounting to Rs.
3,064,750. The status of utilization of rights issue proceeds is set out below:
(Amount in Rupees)
Objects of the issue
Proposed utilization
Actual utilization
Repay certain loans
2,150,000,000
2,150,000,000
Investment in Viacom18
1,500,000,000
1,500,000,000
Investment in IBN Lokmat Private Limited
250,000,000
209,250,000
995,324,000
995,320,000
Rights issue expenses*
200,000,000
191,227,714
Total
5,095,324,000
5,045,801,714
* Surplus available after actual expenses incurred (including provisions) on rights issue have been utilized
towards investment in Viacom18.
# The balance unutilised amount Rs. 46,457,536 are temporarily parked with the banks in deposit accounts.
d.
Barter Transactions
During the year ended 31 March,2012, the Company had entered into barter transactions, which were recorded
at the fair value of consideration receivable or payable. The statement of profit and loss for the year 31 March,
2012 reflect revenue from barter transactions of Rs. 103,313,556 (Previous year Rs. 102,321,794) and
expenditure of Rs. 108,868,690 (Previous year Rs. 93,925,912) being the fair value of barter transactions
provided and received.
e.
Transfer Pricing
The Company has established a comprehensive system of maintenance of information and documents as
required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law
requires existence of such information and documentation to be contemporaneous in nature, the Company is in
the process of updating the documentation for the international transactions entered into with the associated
enterprises during the financial year and expects such records to be in existence latest by 30 November, 2012 as
required under law. The management is of the opinion that its international transactions are at arm’s length so
that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of
tax expense and that of provision for taxation.
f.
Foreign exchange exposure
The Company does not use foreign currency forward contracts to hedge its risks associated with foreign
currency fluctuations relating to certain firm commitments and forecasted transactions.
115
The Company’s foreign currency exposure not hedged by a derivative instrument or otherwise as at year end is
as follows:
Particulars
Currency
Amount
Foreign Currency
Rupees
Payable
GBP
12,721
1,040,578
(11,307)
(813,295)
USD
55,73,597
285,145,195
(789,148)
(35,235,830)
Receivable
GBP
16,545
1,353,368
(-)
(-)
USD
5,734,246
293,343,961
(-)
(-)
Figures in bracket are for previous year.
g.
Details of leasing arrangements

Obligation towards operating leases (As lessee)
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased asset are classified as operating leases. Operating lease charges are recognised as an expense in the
statement of profit and loss. The Company has taken various residential/ commercial premises under
cancelable/non-cancelable operating leases. The cancelable lease agreements are normally renewed on
expiry. Operating lease charges amounting to Rs. 155,306,465 (Previous year Rs. 64,049,572) has been
debited to the statement of profit and loss during the year. The details of future minimum lease payments
under non-cancellable leases are as under:
Particulars
Not later than one year
Later than one year but not later than five years
More than five years

As at 31.03.2012
159,457,059
293,546,783
2,031,018
As at 31.3.2011
83,392,776
97,999,811
1,196,414
Obligation towards Finance leases (As lessee)
The company has entered into finance lease arrangements for certain equipments which provide the
company an option to purchase the assets at the end of the lease period. Finance Lease payment amounting
to Rs. 824,973 (Previous year Rs. 163,447) has been paid during the year. The total minimum lease
payments and its present value and discounted at the interest rate implicit in the lease are:
a. Minimum lease payments
Not later than 1 year
Later than 1 year but not later than 5 years
As at
31.03.2012
3,869,805
11,618,473
15,488,278
As at
31.03.2011
848,987
1,190,855
1,375,248
As at
31.03.2012
2,263,687
8,452,854
10,716,541
As at
31.03.2011
653,853
1,190,855
1,844,708
As at
31.03.2012
15,488,278
4,771,737
10,716,541
As at
31.03.2011
2,224,235
379,527
1,844,708
b. Present value of minimum lease payments
c. Reconciliation:
Total Minimum Lease Payments as above
Less: Future Finance charges
Net Present Value
116
h.
The Board of Directors in its meeting held on 3 January, 2012 have considered and approved the issue of
equity shares on rights basis for an amount aggregating upto Rs. 2,700 crores for acquisition of ETV
channels, repayment of certain loans and general corporate purposes. The Company has filed Draft Letter
of Offer dated 1st March 2012 with SEBI and necessary approval from SEBI is awaited.
i.
Interest in Joint Ventures
The Company has interests in the following jointly controlled entities:
(Amount in Rupees)
IBN Lokmat News Private
Limited (audited)
Limited (audited)
(India)
(India)
Amount of interest based on account of 31.03.2012
50%
50%
(50%)
(50%)
119,747,457
8,962,100,752
(143,738,351)
(8,459,397,881)
100,258,698
4,794,084,615
(123,868,777)
(4,544,920,334)
88,151,666
9,020,315,708
(78,244,914)
(5,529,461,282)
170,282,481
9,556,660,188
(176,651,753)
(5,060,674,633)
139,640,059
(-)
(394,110,000)
3,184,569
(-)
(265,000)
Name of companies
and
country of incorporation
% of shareholding
Assets
Liabilities
Income
Expenditure
Contingent liabilities
Capital commitments
Figures in bracket are for previous year
j.
The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial
statements. This has significantly impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond
with the current year's classification / disclosure.
For and on behalf of the Board
RAGHAV BAHL
Director
Director
GURDEEP SINGH PURI
General Manager - Finance
HITESH KUMAR JAIN
Company Secretary
Noida
4 August, 2012
117
AUDITORS’ REPORT
(Consolidated)
TO THE BOARD OF DIRECTORS
1.
We have audited the attached Consolidated Balance Sheet of TV18 Broadcast Limited (formerly ibn18
Broadcast Limited), (“the Company”), its subsidiaries and jointly controlled entities (the Company, its
subsidiaries and jointly controlled entities constitute “the Group”) as at 31 March, 2012, the Consolidated
Statement of Profit and Loss and the Consolidated Cash Flow Statement of the Group for the year ended on
that date, both annexed thereto. The Consolidated Financial Statements include the jointly controlled
entities accounted in accordance with Accounting Standard 27 (Financial Reporting of Interests in Joint
Ventures) as notified under the Companies (Accounting Standards) Rules, 2006. These financial statements
are the responsibility of the Company’s Management and have been prepared on the basis of separate
financial statements and other information regarding components. Our responsibility is to express an
opinion on these Consolidated Financial Statements based on our audit.
2.
We conducted our audit in accordance with 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 misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and the 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 certain subsidiaries and joint ventures, whose financial
statements reflect total assets of Rs. 10,340.17 million, as at 31 March, 2012, total revenues of Rs. 9,195.95
million and net cash outflows amounting to Rs. 1,161.64 million for the year ended on that date as
considered in the Consolidated Financial Statements. These financial statements have been audited by other
auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts
included in respect of these subsidiaries and joint ventures is based solely on the reports of the other
auditors.
4.
We report that the Consolidated Financial Statements have been prepared by the Company in accordance
with the requirements of Accounting Standard 21 (Consolidated Financial Statements) and Accounting
Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies
(Accounting Standards) Rules, 2006.
5.
Based on our audit and on consideration of the separate audit reports on the individual financial statements
of the Company, its aforesaid subsidiaries and joint ventures, and to the best of our information and
according to the explanations given to us, in our opinion, the Consolidated Financial Statements give a true
and fair view in conformity with the accounting principles generally accepted in India:
i.
in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31 March, 2012;
ii.
in the case of the Consolidated Statement of Profit and Loss, of the loss of the Group for the year ended
on that date; and
iii. in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended
on that date.
JITENDRA AGARWAL
Partner
118
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2012
Notes
Reference
1.
Shareholders’ funds
(a) Share capital
(c) 0.01% Convertible Redeemable Cumulative
Preference shares of Rs.10 each fully paid up issued
by Viacom18 Media Private Limited to Viacom18
Inc. (50% share)
2.
3.
4.
As at
31.03.2011
(Rupees)
724,188,260
6,131,602,200
-
475,629,098
6,188,680,635
219,677,500
6,855,790,460
79,887,160
6,883,987,233
-
Minority interest
7
8
9
2,942,265,594
43,065,226
123,895,915
3,109,226,735
1,614,861,106
16,063,405
65,971,747
1,696,896,258
Current liabilities
(b) Trade payables
10
11
12
13
6,012,984,894
3,302,829,698
1,486,174,046
14,706,166
10,816,694,804
20,861,599,159
3,376,963,938
2,118,636,511
1,029,839,151
9,682,365
6,535,121,965
15,116,005,456
1,516,857,299
120,910,900
23,650,409
7,183,020
1,668,601,628
4,467,166,496
61,485,810
32,260,702
670,347,472
1,964,789,565
1,254,041,147
10,118,692,820
791,200,175
24,282,125
3,730,139
819,212,439
4,005,406,402
28,348,836
60,000,000
216,166,285
3,109,156,209
480,737,737
8,719,027,908
978,129,606
5,193,367,778
819,499,452
3,496,213,224
255,696,279
10,742,906,339
20,861,599,159
30,257,643
347,127,646
2,968,238,758
2,042,618,520
979,655,853
29,079,128
6,396,977,548
15,116,005,456
Total
ASSETS
1.
(a) Fixed assets
(i) Tangible assets
(ii) Intangible assets
(iv) Intangible assets under development
(b)
(c)
(d)
(e)
(f)
(g)
2.
5
6
As at
31.03.2012
(Rupees)
14
Goodwill on Consolidation
Deferred tax assets (net)
Non-current inventories
15
16
17
18
Current assets
(a) Current Investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short-term loans and advances
(f) Other current assets
19
20
21
22
23
24
Total
119
JITENDRA AGARWAL
Partner
Noida
4 August, 2012
RAGHAV BAHL
Director
GURDEEP SINGH PURI
Noida
4 August, 2012
120
Director
HITESH KUMAR JAIN
Company Secretary
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2012
Notes
Reference
25
Other income
26
Total Revenue
Expenses:
(a) Employee benefits expenses
27
(b) Finance costs
28
(c) Depreciation and amortization
14
expenses
(d) Other expenses
29
Total Expenses
5. Profit / (Loss) before tax and exceptional
items (3-4)
6. Exceptional items
Impairment of Film Rights (see note 42)
Recovery from indemnity (see note 42)
7. Profit / (Loss) before tax (5-6)
8. Tax expenses:
- Current tax
- Deferred tax
- Income tax adjustments of prior years (net)
9. Profit / (Loss) for the year before minority
(7-8)
10. Less: Share of loss transferred to minority
interest
11. Profit / (Loss) for the year (9-10)
12. Earnings per equity share (See note 32)
(Face value of Rs. 2 each)
(a) Basic
(b) Diluted
1.
2.
3.
4.
Year ended
31.03.2012
(Rupees)
14,098,640,324
857,976,550
14,956,616,874
Year ended
31.03.2011
(Rupees)
8,092,016,157
135,245,770
8,227,261,927
2,278,687,783
1,197,143,801
335,294,522
1,211,119,653
509,085,147
175,963,575
12,442,932,880
16,254,058,986
(1,297,442,112)
6,461,831,168
8,357,999,543
(130,737,616)
(693,009,861)
1,086,309,861
(904,142,112)
(130,737,616)
1,549,970
27,739,298
28,742,605
(962,173,985)
102,492,022
(59,183,148)
(174,046,490)
(224,379,339)
-
(737,794,646)
(174,046,490)
(1.53)
(1.53)
(0.78)
(0.78)
JITENDRA AGARWAL
Partner
Noida
4 August, 2012
RAGHAV BAHL
Director
GURDEEP SINGH PURI
Noida
4 August, 2012
121
Director
HITESH KUMAR JAIN
Company Secretary
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2012
Year ended
31.03.2012
(Rupees)
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for :
- Depreciation
- Finance Cost
- Dividend income
- Net profit on sale of long term investments
- Interest income
Inventories
Trade receivables
Long term receivables
liabilities:
Trade payables
Tax paid
B. CASH FLOW FROM INVESTING ACTIVITIES
-in subsidiary/affiliates (including share application -money)
Investments sold
- in subsidiary/affiliates
Interest received
Dividend received
C. CASH FLOW FROM FINANCING ACTIVITIES
122
Year ended
31.03.2011
(Rupees)
(904,142,112)
(130,737,616)
335,294,522
33,199,995
4,949,921
1,197,143,801
(2,719,812)
(178,836)
(290,952,745)
(12,083,395)
(118,604,328)
(237,353,096)
(189,100,000)
428,212,654
175,963,575
2,150,349
4,527,283
509,085,147
(294,829)
(1,042,485)
(16,518,159)
(13,145,470)
(73,554,715)
113,882,800
243,666,569
570,315,880
(627,129,627)
1,144,366,644
(981,605,747)
(1,086,309,861)
1,219,005,077
(307,286,582)
(18,672,376)
(7,093,549)
23,650,873
(1,780,520,866)
(931,949,610)
343,467,772
18,519,709
(8,424,969)
606,816,626
(403,969,204)
15,827
7,440,401
3,375,568
(207,380,234)
(459,805,973)
(667,186,207)
86,659,362
71,256,286
110,463
3,375,568
17,134,538
(1,586,404,994)
(263,829,036)
(1,850,234,030)
(485,689,217)
10,564,962
(60,335,288)
4,969,223
(332,372,360)
(2,486,297,774)
269,040,000
42,341,038
138,181,957
178,836
189,100,000
(168,654,784)
6,279,936
69,641,620
1,042,485
(2,464,699,798)
Year ended
31.03.2012
(Rupees)
(1,137,581,476)
(111,276,733)
18,224,728
304,266,499
815,274,868
(167,900,214)
(340,280,567)
Year ended
31.03.2011
(Rupees)
(454,419,090)
(23,458,247)
(52,553,515)
3,495,902,288
1,412,058,978
328,113,796
(1,026,007,575)
Finance cost paid
Proceeds from issue of share capital to minority
Increase / (Decrease) in current maturities of longterm
debt
(619,272,895)
3,679,636,635
(1,455,113,886)
(635,297,193)
2,042,618,520
2,416,467,507
Cash and cash equivalents acquired on merger / acquisition
231,994,818
261,448,206
Cash and cash equivalents as at the end of the year (see
819,499,452
2,042,618,520
note 22)
Notes:
1. The above Cash flow statement has been prepared under the indirect method set out in AS-3 prescribed in
Companies (Accounting Standards) Rules, 2006.
2. Figures in brackets indicate cash outflow.
3. Previous year figures have been regrouped and recast wherever necessary to conform to the current year
classification.
JITENDRA AGARWAL
Partner
Noida
4 August, 2012
RAGHAV BAHL
Director
GURDEEP SINGH PURI
Noida
4 August, 2012
123
Director
HITESH KUMAR JAIN
Company Secretary
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
1.
2.
TV18 Broadcast Limited ( the “Company”), its subsidiaries and joint ventures (collectively referred to as
the “Group”) operates in the general news and entertainment space with leading general news channels and
general entertainment channels. These financial statements comprise a consolidation of the accounts of
TV18 Broadcast Limited, the Company, its subsidiaries and Joint ventures as listed below:
Company
Relation
Country of
Incorporation
Percentage (%) of holding by
the company as at
31.03.2012
31.03.2011
Ibn18 Media & Software
Limited (see note 3(b))
Ibn18 Mauritius Limited
IBN Lokmat News Private
Limited
Limited (“Viacom 18”)
Subsidiary
Subsidiary
India
India
100.00
-
100.00
100.00
Subsidiary
Joint Venture
Mauritius
India
100.00
50.00
100.00
50.00
Joint Venture
India
50.00
50.00
Background
i. In relation to TV18 Broadcast Limited. (“The Company” or “TV18”)
TV18 Broadcast Limited (“TV18”) (formerly known as ibn18 Broadcast Limited (“ibn18”)) was
incorporated on 6 June, 2005 as Global Broadcast News Private Limited. The Company was
converted into a public limited Company and a revised Certificate of Incorporation was issued to
give effect to this change with effect from 12 December, 2005. The commercial operations of the
Company commenced on 17 December, 2005. Later, the name of the Company was changed to
ibn18 Broadcast Limited and a revised Certificate of Incorporation was issued to give effect to this
change on 02 April, 2008. In the current year, the name of the Company has been changed from
ibn18 Broadcast Limited to TV18 Broadcast Limited. A fresh certificate of incorporation has been
issued to the Company to give effect to this change on 17 June, 2011. The Company is in the
business of broadcasting, telecasting, relaying and transmitting general news programmes and
operates the news channels “CNN IBN” (consequent to a licensing and content sharing agreement
with Turner Broadcasting System Asia Pacific, Inc.).
After merger of ibn7 undertaking of ibn18 Media & Software Limited (formerly Jagran TV Private
limited) during the financial year 2008-09, the Company has been broadcasting, telecasting, relaying
and transmitting Hindi general news programmes and operates the news channel “IBN7”.
ii. In relation to RVT Media Private Limited
RVT Media Private Limited (RVT Media), a 100% subsidiary of TV18 (including its 51% subsidiary
AETN18 Media Private Limited), is engaged in the business of broadcasting, telecasting,
transmitting or distributing in any manner, any audio, video or other programmes or software.
AETN18 Media Private Limited has been formed to launch HISTORY™, BIO™, Crime &
Investigation Network™ and other popular AETN entertainment channels in the Indian market and
launched the History channel in India with effect from 9 October, 2011.
iii. In relation to ibn18 (Mauritius) Limited
ibn18 (Mauritius) Limited (ibn18 Mauritius) is a 100% subsidiary of TV18 and is engaged in the
principal activity of investment holding, trading and providing consultancy services in telecom and
other fields.
iv. In relation to IBN Lokmat News Private Limited
124
IBN Lokmat News Private Limited (IBN Lokmat), a 50:50 joint venture with Lokmat Media Limited
(previously Lokmat Newspapers Private Limited), is in the business of broadcasting, telecasting,
relaying and transmitting general news programmes in regional language and operates the news channel
“IBN Lokmat”.
v. In relation to Viacom18 Media Private Limited
Viacom18 Media Private Limited (Viacom18), a 50:50 joint venture with Viacom Inc., operates six TV
channels (“Colors”, “MTV”, “Nickelodeon”, “Sonic”, “VH1” and “Comedy Central”)and engaged in
the business of broadcasting, distributing, producing audio visual programmes ,marketing and selling
commercial advertising on its channels and generates revenue from licensing and merchandising of
products, brand solutions and marketing partnerships.Till March 31, 2009 Viacom18 was consolidated as
an Associate with 33.71% holding. With effect from 01 April, 2009, Viacom18 was consolidated as a
joint venture with 33.71% holding till 14th July 2010 and thereafter at 50% holding. During the year, the
Viacom18 has consolidated its 100% subsidiaries namely Viacom 18 Media US Inc., Viacom 18 Media
(UK) Limited, Roptonal Limited , The Indian Film Company (Cyprus) Limited, IFC Distribution Private
Limited and The Indian Film Company Limited,Guernsey.
3.
Scheme of Arrangement (Scheme) for TV18
Scheme of Arrangement (“the Scheme”) between the Company, Network18 Media & Investments Limited
(‘Network 18’), erstwhile Television Eighteen India Limited (‘TEIL’) and other group companies, under
sections 391 to 394 read with section 78, 100 to 103 of the Companies Act, 1956. As per the Scheme,
TEIL’s news business inter-alia consisting of business news channels viz. CNBC TV18 and CNBC Awaaz
were demerged and consolidated with the Company. On the same date, ibn18 Media & Software Limited
(ibn18 Media) a subsidiary of the Company and iNews.com Limited (iNews) a subsidiary of TEIL were
merged into the Company. Since these were the wholly owned subsidiary company of the TV18 and TEIL
respectively, no consideration was paid to their shareholders. As per the Scheme, the shareholders of TEIL
had been given 68 shares of TV18 in lieu of 100 shares held in TEIL.
The shareholders of the Company approved the Scheme on 21 December, 2010. The Scheme was heard
and approved by the Hon'ble Delhi High Court on 26 April, 2011. The certified copy of the order of the
Hon'ble Delhi High Court approving the scheme was filed with the Registrar of Companies, N.C.T. of
Delhi & Haryana on 10 June, 2011. On this date the Scheme became effective from the Appointed Date of
1 April, 2010.
Subsequent to the merger of the news business of erstwhile TEIL, TV18 is now also broadcasting,
telecasting, relaying and transmitting english and hindi business news programmes namely CNBC TV18
and CNBC Awaaz.
The financial impact of the Scheme of Arrangement referred to above on the financial statements of the
Company / Group is as follows:
a.
Transfer of news business of TEIL
i.
Sr.
No.
1.
2.
3.
4.
As per the Scheme, TEIL’s news business inter-alia consisting of business news channels viz.
CNBC TV18 and CNBC Awaaz was demerged from TEIL and merged with TV18. The details of
the assets and liabilities of TEIL being transferred to TV18 at its book value as at the appointed
date is mentioned below:
Particulars
Amount
(Rupees)
Fixed assets (Net)
Investments
Deferred tax assets
- Inventories
125
3,520,911
Amount
(Rupees)
718,444,278
557,384,905
74,559,830
Sr.
No.
5.
6.
7.
8.
9.
10.
11.
ii.
Particulars
- Sundry Debtors (including Unbilled revenue)
- Loan and advances
- Provisions
Total assets (1+2+3+6)
Total liabilities
Secured Loan
Unsecured Loan
Employee stock options outstanding
Net value of assets transferred on demerger
(7-8)
Share capital issued pursuant to the Scheme
Balance credited to securities premium (9-10)
Amount
(Rupees)
1,369,893,548
1,993,898,895
1,289,030,162
1,348,866,789
40,905,874
1,873,854,177
1,700,000,000
148,222,103
Amount
(Rupees)
4,656,343,516
1,389,772,663
3,266,570,853
4,616,959,866
3,722,076,280
894,883,586
247,886,606
646,996,980
As per the scheme, during the intervening period (i.e. 1 April, 2010 to 31 March, 2011), TEIL
shall be deemed to have been carrying on all business and activities relating to news business on
behalf of the Company and all profits accruing to the transferor Company, or losses arising or
incurred by them relating to the news business shall be treated as the profits or losses of the
Company and accordingly credit balance of the statement of profit and loss of Rs. 349,484,839 of
TEIL news business for the period 1 April, 2010 to 31 March, 2011 was adjusted from the
opening balance of the statement profit and loss.
b. Merger of IBN 18 Media & Software Limited and i-News.com Limited
As per the Scheme, i-News.com Limited, a subsidiary of TEIL and IBN18 Media & Software Limited,
a subsidiary of the Company has merged into the Company. The details of the assets and liabilities of
these companies being transferred to the Company at its book value as at the appointed date is
mentioned below:
Sr
.
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10
.
Particulars
Fixed assets (Net)
- Inventories
- Loan and advances
- Provisions
Other assets – Miscellaneous
expenditure
Total assets (1+4+5)
Total liabilities
Unsecured Loan
Profit and loss account
Net value of assets transferred pursuant
to Scheme of Arrangement (6-7-8)
Investments in these wholly owned
subsidiary
126
IBN 18 Media &
Software Limited
(Rupees)
393,992
i-News.com Limited
192,564
115,842
308,406
58,662
117,967
176,629
42,686
42,686
265,720
-
92,468
92,468
84,161
35,926,067
659,712
69,431,919
659,712
5,819,963
3,611,956
60,000,000
1,000,000
60,000,000
(Rupees)
33,421,691
Sr
.
No
11
.
Particulars
Balance debited to securities premium
(9-10)
i-News.com Limited
(Rupees)
-
c.
The Company has fair valued its assets and assets acquired as on the appointed date from
TEIL and iNews under the Scheme (such assets comprise investments, deferred tax asset,
miscellaneous expenditure, debtors and loans and advances) and have in accordance with the
Scheme, debited Rs. 577,621,696 to the Securities Premium Reserve being the differential
between the book value and the fair value.
d.
Pursuant to the Scheme the debit balance in the statement of profit and loss of the Company to
the extent of Rs. 791,095,787 has been adjusted from the Capital Reserve and Security
Premium Reserve account as follows:
(Rupees)
Capital Reserve
168,720,000
Security Premium Reserve
622,375,787
Total
791,095,787
i.
ii.
4.
IBN 18 Media &
Software Limited
(Rupees)
(340,288)
a.
Basis of accounting and preparation of financial statements
The consolidated financial statements are prepared under the historical cost convention on the
accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles
(GAAP) in India and comply with the Accounting Standards prescribed by the Companies
(Accounting Standards) Rules, 2006 to the extent applicable and in accordance with the provisions
of the Companies Act, 1956 as adopted consistently by the Group to the extent practicable.
The figures for the year ended 31 March, 2012 for the Group includes the income, expenses, assets
and liabilities after considering the impact of the Scheme of the TV18 whereas the corresponding
figures for the previous year comprised the income, expenses, assets and liabilities for the Group
prior to the Scheme. Hence the figures for the current year are not strictly comparable with the
corresponding previous year.
b.
Basis of consolidation
The financial statements of the subsidiaries and joint ventures used in the consolidation are drawn
up to the same reporting dates as of the Company.
The Consolidated Financial Statements have been prepared on the following basis:
i.
The financial statements of the Company, its subsidiaries and joint ventures have been
combined on a line-by-line basis by adding together like items of assets, liabilities, income and
expenses. Inter-Company balances and transactions and unrealised profits or losses have been
fully eliminated.
ii.
The excess of cost to the Group of its investments in subsidiary companies over its share of the
equity of the subsidiary companies at the dates on which the investments in the subsidiary
companies are made, is recognised as ‘Goodwill (on
Consolidation)’ being an asset in the consolidated financial statements. Alternatively, where the
share of equity in the subsidiary companies as on the date of investment is in excess of cost of
investment of the Group, it is recognised as
‘Capital Reserve (on Consolidation)’ and shown under the head ‘Reserves and Surplus’, in the
consolidated financial statements.
iii. Interest in jointly controlled entities is reported using proportionate consolidation.
127
iv. Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity
attributable to the minority shareholders at the dates on which investments are made by the
Company in the subsidiary companies and further movements in their share in the equity,
subsequent to the dates of investments.
c.
Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting
principles requires the management of the Group to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure relating to contingent liabilities as at the date
of the financial statements and reported amounts of income and expenses during the year. Examples
of such estimates include provision for doubtful debts, employee benefits, Provision for income
taxes and useful life of depreciable tangible and intangible assets and provisions for impairment.
Contingencies are recorded when it is probable that a liability will be incurred, and the amount can
be reasonably estimated. Actual results could differ from such estimates and the difference between
the actual results and the estimates are recognised in the periods in which the results are known/
materialise.
d.
Inventories
Inventories of the Company consist of blank betacam videotapes and are stated at cost on First in
First out (FIFO) basis. Stocks of other tapes are written off at the time of purchase.
Viacom18 evaluates the realizable value and / or revenue potential of inventory based on the type of
programming assets.
The program costs are expensed over the license period or as determined in this policy as mentioned
hereunder, whichever is earlier:
i. Cost of shows are amortised at 90% in the first year of telecast and balance is amortised evenly
in the subsequent financial year. However, short format shows are expensed in the year of
production and telecast.
ii. Acquired rights of shows are amortised evenly over the license period
iii. In-house produced animated shows/movies are amortised evenly over four years and live action
shows are amortised equally over the period of two years.
iv. In case of events where the rights are for more than one year, 60% of the cost are amortised in
the year of telecast and the balance is amortised equally in the subsequent years. In case the right
is for a single year, the entire amount is expensed in the year of telecast.
v. Cost of cable and satellite movie rights acquired are amortised on the exploitation of such rights
based on the management estimates of future revenue potential.
vi. In case of film production and distribution, the Viacom18 amortises film cost using the
individual-film-forecast method. Under this method, such costs are amortised for each film in
the ratio that current period revenue for such films bears to management’s estimate of remaining
unrecognised ultimate revenue as at the beginning of the current fiscal year. Management
regularly reviews and revises, where necessary, its total estimates on a film-by-film basis, which
may result in a change in the rate of amortisation and/or a write down of the inventory to
recoverable amount
vii. The Viacom18 evaluates the realizable value and /or revenue potential of inventory on an
ongoing basis and appropriate write down is made in cases where accelerated write down is
warranted.
e.
Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term
128
balances (with an original maturity of three months or less from the date of acquisition), highly
liquid investments that are readily convertible into known amounts of cash and which are subject
to insignificant risk of changes in value.
f.
Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for
the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from operating, investing and financing activities of the Group
are segregated based on the available information.
g.
Depreciation and amortisation
(i) Depreciation for entities other than Viacom18 is provided for as follow:
Depreciation on all assets other than leasehold improvements, computer software and plant and
machinery - distribution equipments are charged on straight line basis over the estimated useful
lives, using rates (including double/ triple shift depreciation rates wherever applicable)
prescribed by Schedule XIV of the Companies Act, 1956.
Cost of leasehold improvements is being amortised over the remaining period of lease
(including renewal options) of the premises. Computer software and plant and machinery distribution equipments are being depreciated over a period of 5 years and 8 years respectively.
These rates are higher than those prescribed in Schedule XIV of the Companies Act, 1956.
News archives are depreciated on straight line basis at the rate of 4.75% per annum. Useful life
of news archives is estimated to be more than 10 years as the contents of the same are
continuously used in day to day programming and hence the economic benefits from the same
arise for a period longer than 10 years.
Programming assets are amortised over the license period of the programs and Website
development costs are capitalised and amortised over their estimated useful life of two years.
Depreciation on additions is charged proportionately from the date of acquisition/ installation.
Assets costing Rs. 5,000 or less individually have been fully depreciated in the year of
purchase.
(ii) Depreciation for Viacom18 is provided on a pro-rata basis on the straight-line method over the
estimated useful lives of the assets or the rates prescribed under Schedule XIV of the
Companies Act, 1956, whichever is higher, as follows
Asset
Rates
Furniture and Fixtures
20.00%
Plant and Machinery (includes Studio Equipment and Audio Video Equipment)
20.00%
Equipments and Computer system:
-Computer Hardware
33.33%
-Office Equipments
20.00%
-Smart phones
100.00%
Integrated Receiver Decoder
20.00%
Computer Software and Leasehold Improvements
33.33%*
Electronic Programming Guide Slot
33.33%
(* 3 years or lease period whichever is less)
Fixed Assets individually costing Rs. 5,000 or less are depreciated fully in the year of acquisition
h.
Revenue Recognition
i. Revenue from operations includes:
¾ Advertising revenue comprising
129
Revenue from sponsorship contracts, which is recognised proportionately over the term of
the sponsorship.
¾ Subscription revenue which is recognised on accrual basis in accordance with the terms of the
contract with the distribution and collection agency, for the services rendered.
¾ Facility and equipment rental which is accounted for on the accrual basis for the period of use
of equipment by the customers.
¾ Program revenue which is accounted for on dispatch of programs to customers in accordance
with contractual commitments.
¾ Licensing and merchandising revenue comprising
Revenue from Licensing and merchandising are recognised as per the terms of the
arrangement
Revenue from licensing of content is recognised in accordance with the licensing agreement
or on physical delivery of content, whichever is later.
¾ Revenues from theatrical distribution of movies are recognised in accordance with the
licensing agreement as the films are screened and is stated at the minimum guarantee due and
where applicable, the Group’s share of box office receipts in excess of the minimum
guarantee. Revenue from sale of rights such as satellite, broadcasting, or music rights is
recognised in accordance with the licensing arrangements when the Group has no remaining
obligations to perform and all other conditions for sale have been met.
¾ Revenue from sale of television content is recognised on transmission of audio-video content
to the customer and their acceptance.
¾ Revenue from media related professional and consultancy services is recognised in
accordance with contracts on rendering of services.
ii. Other income includes
¾ Dividends on investments are accounted for when the right to receive dividend is established.
¾ Interest income is recognized on time proportionate basis, taking into account the
outstanding and the rate applicable.
i.
amount
Tangible Fixed Assets
Fixed assets are stated at their original cost of acquisition/installation less depreciation. All direct
expenses attributable to acquisition/installation of assets are capitalised.
Capital work-in-progress:
Projects under which assets are not ready for their intended use and other capital work-in-progress
are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
j.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any.
The cost of an intangible asset comprises its purchase price, including any import duties and other
taxes (other than those subsequently recoverable from the taxing authorities), and any directly
attributable expenditure on making the asset ready for its intended use and net of any trade
discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion
is recognised as an expense when incurred unless it is probable that such expenditure will enable the
asset to generate future economic benefits in excess of its originally assessed standards of
130
performance and such expenditure can be measured and attributed to the asset reliably, in which
case such expenditure is added to the cost of the asset.
k.
Foreign Currency Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the
transaction. Exchange differences on foreign exchange transactions settled during the year are
recognised in the statement of profit and loss.
Monetary items denominated in foreign currency and outstanding at the balance sheet date are
translated at the exchange rate prevailing at the date of balance sheet, the resultant exchange
differences are recognised in the statement of profit and loss.
In respect of foreign integral operations, monetary assets and liabilities are translated at the
exchange rate prevailing at the date of the balance sheet. Non-monetary items are translated at the
historical rate, The items in the statement of profit and loss are translated at the average rate during
the year. The differences arising out of the translation are recognised in the statement of profit and
loss.
In respect of foreign non integral operations, asset and liabilities are translated at the exchange rate
prevailing at the date of the balance sheet. The items in the statement of profit and loss are
translated at the average exchange rate during the year. The differences arising out of the translation
are transferred to the foreign currency translation reserve.
l.
Investments
Long term investments are stated at cost less other than temporary diminution in the value of such
investments. Current investments are carried at lower of cost or fair value.
m.
Employee Benefits
i.
The Group’s Employee’s Provident Fund scheme is a defined contribution plan. The Group’s
contribution to the Employees' Provident Fund is charged to the statement of profit and loss
during the period in which the employee renders the related service.
ii.
Short term employee benefits (Medical, Leave travel allowance, etc.) expected to be paid in
exchange for the services rendered are recognised on undiscounted basis.
iii. The Group provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”)
covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the
Gratuity Plan provides a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective employee’s
salary and the tenure of employment.
The group also makes contributions to funds administered and managed by the insurance companies
for the amount notified by the said insurance companies.
The present value of the obligation under such defined benefit plan is determined based on actuarial
valuation using the projected unit credit method, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measures each unit separately to build up
the final obligation. The obligation is measured at the present value of the estimated future cash
flows. The discount rate used for determining the present value of the obligation is based on the
market yields on government securities as at the balance sheet date. Actuarial gains/losses are
recognised immediately in the statement of profit and loss.
The liability with respect to the Gratuity Plan is determined based on actuarial valuation done by an
independent actuary at the year end and any differential between the fund amount as per the insurer
and the actuarial valuation is charged to in the statement of profit and loss.
131
iv. Benefits comprising long term compensated absences constitute other long term employee
benefits. The liability for compensated absences is provided on the basis
of an actuarial valuation done by an independent actuary at the year end except for Viacom18 wherein liability is
nil as at year end since there is no leave encashment to be carried forward. Actuarial gains and losses are
recognised immediately in the statement of profit and loss.
n.
Segment Information
i. Business Segments
Based on similarity of activities, risks and reward structure, organisation structure and internal
reporting systems, the Group operates in the media business segment mainly comprising media
and related operations.
ii. Geographic Segments
Secondary segmental reporting is performed on the basis of the geographical location of
customers i.e. within India and overseas.
o.
Leases
i.
Operating Lease
Leases where the lessor effectively retains substantially all the risks and benefits of ownership
of the leased asset are classified as operating leases. Operating lease charges are recognised as
an expense in the statement of profit and loss on a straight-line basis over the lease term.
ii.
Finance Lease
Leases under which the Company assumes substantially all the risks and rewards of ownership
are classified as finance leases. The lower of fair value of asset and present value of minimum
lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability.
The principal component in the lease rentals is adjusted against the lease liability and the
interest component is charged to the statement of profit and loss.
p.
Earnings Per Share
The Group reports basic and diluted earnings per equity share in accordance with AS-20,
Accounting Standard on Earnings Per Share. Basic earnings per equity share is computed by
dividing net profit after tax by the weighted average number of equity shares outstanding at the year
end. Diluted earnings per equity share is computed using the weighted average number of equity
shares and dilutive potential equity shares outstanding at the year end and except where the results
would be anti-dilutive
q.
Taxes on income
Income tax comprises current tax and deferred tax Current tax is determined in accordance with the
provisions of Income Tax Act, 1961. Advance taxes and provisions for current taxes are presented
in the balance sheet after off setting advance taxes paid and income tax provisions.
Deferred tax charge or credit is recognised on timing differences being the difference between
taxable income and accounting income that originate in one period and are capable of reversal,
subject to consideration of prudence, in one or more subsequent periods. Deferred tax assets and
liabilities are measured using the tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised
unless there is a virtual certainty that there will be sufficient future taxable income available to
realise such assets.
132
Minimum alternate tax (MAT) paid in accordance with Income Tax Act, 1961, which gives rise to
future economic benefit in the form of adjustment from income tax liability, is recognised when it is
reasonably certain that the Company will be able to set off the same and adjust it from the current
tax charge for that year.
Tax provisions for overseas subsidiaries/ joint ventures is determined in accordance with the tax
laws of their respective country of incorporation.
r.
Impairment of assets
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for
impairment by the management of the Group. If any indication of impairment exists, the
recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount
of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in use is arrived at by discounting the future cash flows to
their present value based on an appropriate discount factor. When there is indication that an
impairment loss recognised for an asset in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets
s.
Provisions and Contingencies
A provision is recognised when the Company has a present obligation as a result of past events and
it is probable that an outflow of resources will be required to settle the obligation in respect of
which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted
to their present value and are determined based on the best estimate 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. Contingent liabilities are disclosed in the Notes.
t.
Employee Share Based Payments (ESOS)
Stock options granted to the employees under the stock options schemes are accounted at intrinsic
value as per the accounting treatment prescribed in the guidance note on Employee share based
payments issued by the Institute of Chartered Accountants of India. Accordingly, the excess of
market price, determined as per the guidance note, of underlying equity shares (market value), over
the exercise price of the options is recognised as deferred stock compensation expense and is
charged to statement of profit and loss on a straight line basis over the vesting period of the options.
The amortised portion of the cost is shown under shareholders’ funds. The value of the option
forfeited during the year is credited to General Reserve.
u.
Barter Transactions
Barter transactions are recognised at the fair value of consideration receivable or payable. When the
fair value of the transactions cannot be measured reliably, the revenue/expense is measured at the
fair value of the goods/services provided/received adjusted by the amount of cash or cash equivalent
transferred.
v.
Share issues expenses
Share issue expenses are adjusted on the date of issue of shares against the Securities Premium
Reserve as permissible under Section 78(2) of the Companies Act, 1956, to the extent balance is
available for utilisation in the Securities Premium Reserve.
133
5
Share capital
Sr. No.
Particulars
As at
31 March, 2012
Number of
Amount
Shares
(Rupees)
As at
31 March, 2011
Number of
Amount
Shares
(Rupees)
a.
Authorised
Equity shares of Rs. 2 each
380,000,000
760,000,000
275,000,000
550,000,000
b. Issued, Subscribed and fully paid up
(i) Issued
362,130,907
724,261,814
237,867,300
475,734,600
362,081,871
724,163,742
237,796,965
475,593,930
(iii) Subscribed but not fully paid up
70,335
35,168
(iv) Shares forfeited
49,036
24,518
Total
362,130,907
724,188,260
237,867,300
475,629,098
Refer Notes (i) to (vi) below:
Notes
The Company has only one class of equity shares having a par value of Rs. 2 per share. Each holder of
(i)
equity shares is entitled to one vote per share held.
(ii)
Details of shares held by holding company and their subsidiaries
Particulars
As at
As at
31 March, 2012
31 March, 2011
Number of
Amount
Number of
Amount
Shares
(Rupees)
Shares
(Rupees)
185,526,648
371,053,296
64,892,544
129,785,088
Limited, the Holding Company
Subsidiaries of the holding company
34,600
69,200
55,525,443
111,050,886
185,561,248
371,122,496
120,417,987
240,835,974
(iii)
Details of shares held by each shareholder holding more than 5% shares :
Particulars
As at
As at
31 March, 2012
31 March, 2011
Number of % Holding Number
% Holding
Shares held
of Shares
held
185,526,648
51.24% 64,892,544
27.28%
- 49,990,843
21.02%
Network18 Group Senior Professional Welfare Trust
28,725,006
7.93% 13,453,354
5.66%
(iv) Aggregate number of shares issued for consideration other than cash during the period of 5 years
immediately preceeding the Balance Sheet date
Particulars
As at
As at
31 March, 2012
31 March, 2011
Number of Shares held Number of Shares held
Shares alloted to shareholders of erstwhile Television
123,943,303
Eighteen India Limited pursuant to Scheme of Arrangement
in the current year between the Company, Television
Eighteen India Limited (TEIL), Network18 Media &
Investments Limited. (Network18) and other Network18
Group companies (See note 3)
Shares alloted to Gupta family and ibn18 Trust pursuant to
16,306,155
16,306,155
scheme of amalgamation between the Company, Jagran TV
Private Limited and BK Fincap Private Limited in financial
year 2008-09
Shares allotted to shareholders of SRH Broadcast News
102,040,815
102,040,815
134
Particulars
As at
31 March, 2012
Holdings Limited pursuant to scheme of amalgamation
between the Company with SRH Broadcast News Holdings
Limited in financial year 2006-07
(v) Shares reserved for issue under `options under
ESOP scheme 2007 (See note 36)
3,999,979
As at
31 March, 2011
2,450,717
(vi) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of
the reporting year:
Shares issued during the year
Particulars
Opening
Balance
Rights issue Employe Conversion
Shares
Shares
e stock into fully
issued
forfeite
options
paid up
under the
d
plan
scheme of
arrangemen
t [refer to
note 3(a)(i)]
Closing
Balance
(i) Issued
Year ended 31 March,
2012
- Number of shares
237,867,300
- 320,304
- 123,943,303
- 362,130,907
- Amount (Rupees)
475,734,600
- 640,608
- 247,886,606
- 724,261,814
2011
- Number of shares
181,651,478 54,495,443 1,720,379
- 237,867,300
- Amount (Rupees)
363,302,956 108,990,886 3,440,758
- 475,734,600
- Number of shares
237,796,965
- 320,304
21,299 123,943,303
- 362,081,871
- Amount (Rupees)
475,593,930
- 640,608
42,598 247,886,606
- 724,163,742
2011
- Number of shares
181,651,478
- 1,720,379 54,425,108
- 237,796,965
- Amount (Rupees)
363,302,956
- 3,440,758 108,850,216
- 475,593,930
(iii)Subscribed and not
fully paid up *
2012
- Number of shares
70,335
(21,299)
- (49,036)
- Amount (Rupees)
35,168
31,949**
(42,598)
- (24,518)
2011
- Number of shares
54,495,443
- (54,425,108
70,335
- Amount (Rupees)
27,247,722
- (27,212,554
35,168
* Re 0.50 paid up out of the face value of Rs. 2 per share
** Amount received on 21,299 shares @ Rs. 1.50 each pursuant to conversion of partly paid up shares into fully
paid shares
135
As at
31.03.2012
(Rupees)
6
a.
b.
c.
Reserves and Surplus
Capital reserve
Opening balance
Less: Amount transferred from statement of profit and loss (see
para f below) as per the scheme of arrangement [See also note 3 (d)]
Securities premium reserve
Opening balance
Add:
- Amounts received pursuant to issue of equity shares under rights
issue
- Amounts received pursuant to issue of equity shares under
ESOPs
- Amounts transferred from Share options outstanding account on
exercise of share options
- Amount credited on transfer of news business of TEIL as per the
Scheme of Arrangement [See note 3 (a)]
Less:
- Amount debited on merger of the IBN18 Media & Software
Limited as per the Scheme of Arrangement [See note 3 (b)]
- Rights issue expenses / expenses for Scheme of Arrangement
- Amount transferred from miscellaneous expenditure
[See note 24 (b)]
- Amount incurred and adjusted during the year
- Difference of book value and fair value of assets adjusted
pursuant to Scheme of arrangement [See note 3 (c)]
- Amount transferred from statement of profit and loss (see para f
below) as per the scheme of Arrangement [See also note 3 (d)]
Total
Share options outstanding account
Opening balance
Add:
Amount transferred from TEIL pursuant to Scheme of
arrangement (See note 3)
Less: -Adjusted on account of forfeiture / lapse of options
-Amount transferred to General Reserve on expiry of
options
-Transferred to Securities Premium Reserve on exercise on
share options
Deferred employee compensation
Opening balance
Add:
Amount transferred from TEIL pursuant to Scheme of
arrangement
(See note 3)
Less:
Adjusted on account of forfeiture / lapse of options
Less:
Amount charged to Statement of Profit and Loss
d.
General Reserve
Add: Amount transferred from TEIL under Scheme of Arrangement
136
As at
31.03.2011
(Rupees)
168,720,000
168,720,000
168,720,000
-
-
168,720,000
8,501,569,857
3,487,938,873
1,299,239
4,982,042,600
19,164,542
91,180,087
18,423,309
31,149,375
646,996,980
-
340,288
-
23,458,247
89,312,882
15,724,260
577,621,696
1,428,196
-
622,375,787
-
7,947,933,649
8,501,569,857
23,842,987
62,606,670
56,991,187
-
1,181,645
5,793,297
1,998,825
-
18,423,309
31,149,375
61,051,406
23,842,987
1,557,520
20,843,580
8,083,628
-
1,181,645
4,949,921
16,269,534
44,781,872
1,998,825
4,527,283
1,557,520
22,285,467
9,998,341
88,575,033
9,998,341
-
As at
31.03.2012
(Rupees)
pertaining to ESOPs
Add: Amount transferred from ESOPs reserve on account on expiry
of options
e.
f.
Foreign Currency Translation Reserve
Add: Additions during the year (net)
Surplus/(deficit) in the statement of profit and loss
Opening Balance
Add/(less):
Opening losses of subsidiaries
Profit / (loss) brought forward from statement of profit and
loss
Profit/(loss) for the year ended 31 March, 2011 of the
undertakings merged with the Company pursuant to scheme
of arrangement
- Profit from TEIL's news business [See note 3 (a)(ii)]
- I-News.com Limited
- IBN18 Media & Software Limited (net)
Loss tranferred to AETN18 on stake dilution
Amount adjusted through transfer to Capital Reserve (see
para a above) and Securities Premium Reserve (see para b
above) as per the Scheme of Arrangement [See also note 3
(d)]
Total
7
a.
i.
ii.
iii
.
iv.
b.
Term loans (secured)
- from banks
- from others
(See note (b) below for security and terms of repayment)
Vehicle loans (secured)
- from others
(Vehicle loans are secured by hypothecation of vehicles and
payable in equal monthly installments)
Long term maturities of finance lease obligations (secured)
- from others (see note 41)
(Secured by hypothecation of fixed assets purchased under
finance lease arrangements and is payable in equal monthly
installments)
As at
31.03.2011
(Rupees)
5,793,297
-
104,366,671
9,998,341
1,020,968
137,827,822
138,848,790
1,020,968
1,020,968
(2,514,913,998)
(2,338,336,904)
(737,794,646)
(2,530,604)
(174,046,490)
349,484,839
3,575,387
177,882
4,045,967
791,095,787
-
(2,104,328,782)
6,131,602,200
(2,514,913,998)
6,188,680,635
1,677,541,664
365,800,000
1,101,753,495
7,414,000
2,043,341,664
1,109,167,495
8,546,076
2,794,191
8,452,854
1,190,855
881,925,000
501,708,565
2,942,265,594
1,614,861,106
Security details for term loans covered under Note 7 (a)(i) and Note 12 (a) is as follows:
I. Term loans under Long term borrowings
2,043,341,664
1,109,167,495
Term loans under Other current liabilities
564,615,734
513,227,403
II.
2,607,957,398
1,622,394,898
i. This term loan from bank carries interest @ 13.75% to 15%
23,685,065
74,028,565
p.a. and is repayable in 72 equal monthly installments of Rs.
4,144,450. The term loan is secured by first charge over entire
fixed assets of channel IBN7 amounting to Rs. 320,400,000 as
137
As at
31.03.2012
(Rupees)
on 31 March 2009, and unconditional and irrevocable corporate
guarantee of Network18 Media & Investments Limited
(Holding Company of TV18).
ii. This term loan from others carries interest @ 13.50% p.a. and
is repayable in 60 equal monthly installments of Rs. 1,062,000
in advance of every month. The term loan is secured by first
charge on all movable assets including plant and machinery and
equipment acquired / to be acquired out of the proceeds of the
term loan of channel IBN7 of the Company and unconditional
and irrevocable corporate guarantee of Network18 Media &
Investments Limited.
iii. This term loan from bank carries interest @ 13.75% to 15.50%
p.a. and is repayable in 3 equal half yearly installments of Rs.
33,333,333. The term loan is secured by subservient charge on
all movable fixed assets (all present & future) of CNN-IBN and
IBN 7 channels of the Company and unconditional and
Investment Limited, to remain valid during currency of credit
facility.
iv. This term loan from bank carries interest @ 13.75% to 14.25%
p.a. and is repayable in 16 equal quarterly installments of Rs.
20,000,000. First charge on the movable assets of CNN-IBN
and IBN 7 channels of the Company, subject to the charges on
current assets created/to be created in favour of the Company’s
bankers for securing borrowings for working capital
requirements and unconditional and irrevocable personal
guarantee of a Director of the Company and Letter of comfort
from Television Eighteen India Limited (TEIL) whereby TEIL
undertakes to take all necessary steps to ensure that the
Company fulfils all necessary obligations under the agreement
including arrangement of funds for payment to the bank in
accordance with the terms and conditions of the loan agreement
v. This term loan from others carries interest @ 13.50% to
14.50% p.a. and is repayable in 24 equal quarterly installments
of Rs. 33,400,000. This is secured by first pari passu charge on
movable fixed assets of the existing CNBC news channels of
the Company and is collaterally secured by pledge of shares by
the promoters/ group entities, personal guarantee of the
Director of the Company and corporate guarantee of
Network18 Media & investments Limited
vi. This term loan from bank carries interest @ 13.00% p.a. and is
repayable in 18 equal monthly installments of Rs. 55,555,556
after the moratorium period of 6 months. The term loan is
secured by subservient charge on all current assets and movable
fixed assets (all present & future) of the Company and is
secured by personal guarantee of the Director of the Company
and corporate guarantee of Network18 Media & investments
Limited
vii This term loan from bank carries interest @ base rate plus 3.5%
.
and is repayable in equal 21 quarterly stepped up installments
after 2 years from the date of first disbursement (30 March,
2011). The term loan is secured by first pari passu charge over
fixed assets and current assets of Viacom18
viii. This term loan from bank carries interest @ 13.75% to 15.75%
p.a. and repayable in 60 equal monthly installments of Rs.
3,875,000. The term loan is secured by first charge over entire
138
As at
31.03.2011
(Rupees)
7,414,000
20,158,000
33,333,333
420,833,333
-
40,000,000
499,400,000
-
1,000,000,000
-
1,000,000,000
1,000,000,000
44,125,000
67,375,000
As at
31.03.2012
(Rupees)
As at
31.03.2011
(Rupees)
2,607,957,398
1,622,394,898
42,938,936
126,290
43,065,226
15,952,942
110,463
16,063,405
38,684,828
85,211,087
123,895,915
24,141,424
41,830,323
65,971,747
fixed assets amounting to Rs 135,665,000 (50% share) as on 31
March 2012 of IBN Lokmat, and unconditional and irrevocable
corporate guarantee of the Company and Lokmat Media
Limited
8
a.
b.
Trade payables
9
Long term provisions
i.
ii.
Provision for gratuity [See note 35(II)(d)]
10
a.
i.
Cash credit (including working capital demand loan)
from bank (secured)
2,540,757,648
1,935,822,425
(See note (a) below for security and terms of repayment)
ii.
Commercial papers (unsecured)
from banks
750,000,000
from others
1,000,000,000
(Payable on maturity)
iii.
Public deposits (unsecured)
1,720,605,836
1,086,604,000
iv.
Loan from banks (unsecured) (repayable on demand)
1,621,410
249,137,512
v.
Others (unsecured)
105,400,001
6,012,984,894
3,376,963,938
Total
Security details for cash credit facilities including working capital demand loans is as follows:
i.
400,844,778
547,357,300
repayable on demand and carries interest @ 10.25% p.a. to
17.50% p.a. and is secured against first pari passu charge on
all the current assets of CNN IBN and IBN7 channels of the
Company and additionally secured by unconditional and
Investments
Limited.
Further out of the total secured amount, Rs. 155,014,479 is
additionally secured by second charge on movable fixed
assets of CNN IBN and IBN7 channels of the Company.
ii.
The cash credit is repayable on demand and carries interest @
125,320,388
127,362,078
13.75% to 15% p.a. and is secured against hypothecation of
book debts of the Company.
iii.
487,208,515
repayable on demand and carries interest @ 10.50% to 18%
p.a. and is secured against first pari passu charge on all
current assets of the CNBC channels of the Company with
other working capital lenders.
iv.
1,520,637,134
1,255,289,182
repayable on demand and is secured by a first pari passu
charge over fixed assets and current assets of the Viacom18
and fixed deposit of Rs. 67,935,000 (50% share) are provided
as collateral security.
v.
The cash credit is secured by first pari passu charge on all the
6,746,833
current assets of the IBN Lokmat and additionally secured by
5,813,865
unconditional and irrevocable corporate guarantee of the
Company and Lokmat Media Limited.
139
11
12
a.
Trade Payables
Trade Payables
Other Current Liabilities
Current maturities of long-term debt
Term loans
from bank
From others
(See note 7 (b) - Long term borrowings for the details of security and
guarantee)
-
b.
c.
d.
e.
f.
13
a.
b.
Vehicle loans (secured by hypothecation of Vehicles)
Current maturities of finance lease obligations (See note 41)
(Secured against fixed assets obtained under finance lease
arrangements)
Interest accrued but not due on borrowings
Income received in advance (Unearned revenue)
Unpaid matured deposits and interest payable thereon
Other payables
Statutory remittances (contributions to PF, ESIC, Withholding
Taxes, VAT, Service Tax, etc.)
Payables on purchase of fixed assets
Advance from customers
Book overdraft
Provisions for employee benefits
Provision for gratuity [See note no. 35(II)(d)]
Other provisions
- Provision for current tax
140
As at
31.03.2012
(Rupees)
2,540,757,648
As at
31.03.2011
(Rupees)
1,935,822,425
3,302,829,698
2,118,636,511
423,601,734
141,014,000
500,483,403
12,744,000
564,615,734
6,286,018
117,890,000
513,227,403
1,562,078
2,263,687
653,853
92,541,865
171,389,019
21,847,530
55,969,820
78,960,533
-
179,335,768
298,859,751
73,475,546
207,646,646
48,882,233
1,486,174,046
6,517,909
74,087,804
1,029,839,151
2,270,986
10,786,947
13,057,933
930,662
8,751,703
9,682,365
1,648,233
1,648,233
14,706,166
9,682,365
490,064
21,598,280
20,490,415
Vehicles
Office equipment
Previous year
-
- 10,300,693
-
216,200
-
-
7,386,622
3,130,564
-
11,754,532
25,625
-
480,543,957 177,069,867
-
-
-
79,899,343
-
535,709
-
66,224,085
-
-
-
7,003,017
-
561,334
-
316,190,278
490,064
As at
31.03.2011
11,193,198
-
1,428,214
-
164,353,679 100,266,928
3,130,564
As at
31.03.2012
298,244
-
2,444,055
-
-
1,824,214
18,422,139
2,616,167
38,549,265 16,347,635
4,064,545
9,070,361
24,231,421 20,761,535 10,603,570
124,098,418 102,344,057 25,242,580
-
-
25,888,062
15,595
-
6,351,787
7,579,688
37,464,176 15,504,675
67,424,819
61,237,755 13,443,154
345,682,029 110,641,025
684,119
45,302,417
11,241,563
15,163,885
14,062,294
82,741,607
44,076
-
10,697,569
-
-
1,303,683
2,015,768
6,015,855
4,221,199
3,323,284
5,385,434
9,622,001
40,236,342 24,549,028
99,676
-
3,228,517
25,438,722
23,373,994
22,104,646
209,069,946
159,347
-
18,974,190
12,025,454
44,050,825
39,133,109
136,612,083
524,772
-
26,328,227
4,985,740
14,018,592
13,405,215
33,841,109
370,280
-
12,442,727
552,800
10,424
-
13,222,904
-
-
-
-
162,709,513 114,166,872
-
442,372,173 138,427,388 146,975,261
552,800
87,803,933
976,343
24,269,568
40,905,664
119,727
15,691,311
24,118,283
-
9,052
4,847,040
-
-
4,847,040
138,427,388
321,461,273
119,727
15,691,311
291,450,988
14,199,247
742,876,617
24,282,125
120,910,900
433,073
72,112,622
42,066,030
6,299,175
46,521,905
24,282,125
-
-
24,282,125
-
791,200,175 892,200,367
141
189,644 59,726,797 12,572,605 1,696,786,305 710,720,197
73,266 175,963,575
5,453,033
881,304,005
815,482,300
1,649,442,469
2,031,160
4,847,163
-
-
20,498,422
333,517,018 138,427,388 133,752,357
5,443,981
Previous year
-
169,576,336 114,933,487
-
- 87,803,933
4,847,163
73,266 151,694,007
1,696,786,305 1,778,964,309 547,191,791 158,359,463 3,864,582,942 881,304,005 1,124,810,722 335,294,522 114,594,506 2,226,814,743 1,637,768,199 815,482,300
160,688,777
-
149,077,914 26,576,754
20,498,422
189,644 57,695,637 12,562,181 1,534,076,792 596,553,325
Grand Total
Previous year
-
Website Cost
162,709,513
-
Programming Cost
Total
162,709,513
-
1,488,753,692
Computers software
News archives
2,856,700
Gross Block Opening Transferred Depreciation
On
Closing
as at
balance as in pursuant for the year Disposals balance as at
31.03.2012
at
to the
31.03.2012
01.04.2011
Scheme
Net Block
(Amount in Rupees)
1,534,076,792 1,609,387,973 432,258,304 153,512,300 3,422,210,769 742,876,617 977,835,461 294,388,858 109,747,466 1,905,353,470 1,516,857,299 791,200,175
26,848,369
385,875
-
18,794,514
144,482,134
(b) Intangible Assets
102,962,120 107,631,664
Deletions
Accumulated Depreciation
1,022,196,507 1,275,236,548 166,657,554 95,104,208 2,368,986,401 412,245,201 763,985,124 171,811,707 58,561,019 1,289,481,013 1,079,505,388 609,951,306
1,453,839
-
277,336,795
Furniture and Fixtures
Total
Gross Block
Gross block Transferred Additions
as at
in pursuant
01.04.2011
to the
Scheme
- others
- on finance lease
Computers
Electrical installation
- others
- on finance lease
Plant and Equipment
Leasehold improvements
(a) Tangible Assets
Freehold Land
Sr Particulars
No
14 Fixed Assets
As at
31.03.2012
(Rupees)
15
16
Non Current Investments
Trade Investments (at cost)
in equity shares of
a.
Others Companies
Quoted
i.
275,000 (Previous year Nil) equity shares of Refex
Refrigerants Limited of Rs. 10 each fully paid up
ii.
500,000 (Previous year Nil) equity shares of Provogue India
Limited of Re. 1 each fully paid up
iii.
500,000 (Previous year Nil) equity shares of Prozone Capital
Shopping Centres Limited of Rs. 2 each fully paid up
iv.
474,308 (Previous year Nil) equity shares of KSL &
Industries Limited of Rs. 4 each fully paid up
Unquoted
v.
Nil (Previous year 12,163,717) Class A Ordinary shares of
Web18 Holdings Limited of USD 0.00374 each fully paid up
in preference shares of
b. Joint venture (Unquoted)
250,000 (Previous year 250,000) 0.10% Non Cumulative Redeemable
Preference Shares of Series "II" of IBN Lokmat News Private Limited
of Rs. 100 each fully paid up
In equity warrants of
Nil (Previous year 1,500,000) share warrants of Series "C" of Viacom18
Media Private Limited of Re. 1 each fully paid up (See Note 31)
Aggregate amount of unquoted investments
Long - Term Loans and Advances
a.
Capital advances (Unsecured, considered good)
b.
Security deposits
Doubtful
Less: Provision for doubtful deposits
c.
Loans and advances to employees*
Doubtful
d.
e.
Advance income tax (net of provision for tax) (Unsecured,
considered good)
Advance to vendors
Doubtful
*
includes loans recoverable from Key Management Personnel (KMP)
of TV18 (see note 37)
142
As at
31.03.2011
(Rupees)
8,566,250
-
13,529,310
-
5,520,690
-
8,869,560
-
-
1,848,836
25,000,000
25,000,000
-
1,500,000
61,485,810
36,485,810
36,106,381
25,000,000
28,348,836
28,348,836
7,575,768
2,649,595
221,450,135
2,122,360
223,572,495
2,122,360
221,450,135
103,731,293
103,731,293
103,731,293
57,010,104
60,689,307
117,699,411
60,689,307
57,010,104
212,383,277
6,608,957
6,608,957
6,608,957
80,051,439
171,928,188
47,867,195
219,795,383
47,867,195
171,928,188
46,250,001
46,250,001
23,125,000
23,125,001
670,347,472
50,000,000
216,166,285
-
As at
31.03.2012
(Rupees)
17
a.
b.
Programming and Film Rights
Projects in progress
18
Other Non - Current Assets
Long-term Receivables - Others (See note 42)
Fixed deposits with banks*
Others - Application money paid (See also note 37)
For shares
a.
b.
c.
As at
31.03.2011
(Rupees)
997,988,803
966,800,762
1,964,789,565
2,420,765,046
688,391,163
3,109,156,209
1,086,309,861
167,731,286
160,637,737
320,100,000
1,254,041,147
480,737,737
* Fixed deposits is under lien with banks against Bank Guarantees to the Custom authorities to meet export obligation and
is restricted from being exchanged or used to settle a liability for more than 12 months from the balance sheet date. [also
See note 30 (ii)]
19
Current Investments
(Quoted- Short Term, Non Trade)
Investment in Mutual Funds (at cost, fully paid)
Fidelity Cash Fund (Institutional) - Daily Dividend
10,243,703
(Nil units; Previous year: 2,048,229 units)
Fidelity Ultra Short Term Debt Fund Super Institutional - Daily
20,013,940
Dividend Option (Nil units; Previous year: 3,998,430 units)
30,257,643
30,257,643
30,257,643
20
Inventories [See note 4(d)]
(At lower of cost and net realisable value)
a.
Tapes and compact discs
406,919
698,035
b.
Programming and Film Rights
931,795,165
276,081,611
c.
Projects in progress
45,927,522
70,348,000
978,129,606
347,127,646
21
Trade receivables (Unsecured)
a.
Trade receivables outstanding for a period exceeding six months from due
date of payment
considered good
681,334,970
543,412,146
considered doubtful
306,380,052
212,072,524
306,380,052
212,072,524
681,334,970
543,412,146
b.
Other trade receivables
considered good
4,512,032,808
2,424,826,612
considered doubtful
52,686,919
9,566,232
52,686,919
9,566,232
4,512,032,808
2,424,826,612
5,193,367,778
2,968,238,758
22
Cash and cash equivalents
a.
Cash on hand
1,974,350
785,062
b.
Balances with banks
i.
in current accounts
305,463,301
1,402,289,867
ii.
in deposit accounts (refer notes below)
362,429,432
370,556,923
iii.
Cheques in hand
149,632,369
268,986,668
819,499,452
2,042,618,520
Of the above, the balances that meet the definition of Cash and cash
equivalents as per AS 3 Cash Flow Statements is
Notes:
(i)
Deposit account includes funds earmarked as follows:
143
819,499,452
2,042,618,520
22
23
a.
b.
c.
d.
e.
f.
24
a.
b.
24
c.
25
a.
b.
26
a.
b.
c.
d.
- Balance with banks held as per Rule 3A of
Companies (Acceptance of deposits) Rules, 1975
- Balances held as margin money against borrowings
- Unutilised money of rights issue
Cash and cash equivalents (Continued)
(ii)
Includes account which have an original maturity of more than 12
months.
Short - term loans and advances
Loans and advances
to related parties (See note 37)
- to entities under significant influence
to employees
others
Security deposits
Service tax credit recoverable
Advance income tax (net of provision)
Prepaid expenses
Others
- Advance to vendors
Other Current Assets (Unsecured, considered good)
Unbilled revenue
Unamortised expenses
Rights issue and merger demerger expenses
- Opening Balance
- Less: Rights issue and Scheme related expenses
adjusted by transferring to Securities Premium Reserve
[See note 6(b)]
- Add: Amount incurred for rights issue during the year
Other Current Assets (continued) (Unsecured, considered good)
Others
Interest accrued but not due on deposits
Others (insurance claims etc.)
Revenue From Operations
i.
Advertisement, subscription and program syndication
ii.
Sale of content and film distribution and syndication
iii.
Other media income and equipment rentals
Other operating income
i.
Income from equity deals
Other Income
Interest
- Inter company balances
- Fixed deposits
- Others
Net profit on sale of long term investments
Net profit on sale of current investments
Liabilities / provisions no longer required written back
144
As at
31.03.2012
(Rupees)
3,029,400
As at
31.03.2011
(Rupees)
162,990,600
167,935,000
46,457,536
52,870,000
132,092,000
65,987
32,612
1,843,085,866
70,849,505
247,406,456
2,161,341,827
36,154,879
195,865,306
860,903,556
209,178,977
60,724,676
12,265,020
329,640,063
402,629,759
13,370,543
83,412,548
338,721,499
131,934,859
32,768,679
3,496,213,224
9,586,645
979,655,853
19,500,000
-
23,458,247
23,458,247
89,312,882
89,312,882
111,276,733
111,276,733
23,458,247
23,458,247
124,876,589
42,957
124,919,546
255,696,279
4,750,300
870,581
5,620,881
29,079,128
11,630,431,145
2,103,573,000
193,630,768
7,774,021,640
266,522,157
51,472,360
171,005,411
14,098,640,324
8,092,016,157
162,462,734
54,866,361
20,024,001
290,952,745
12,083,395
118,604,328
58,013,653
15,488,832
52,230
16,518,159
13,145,470
e.
f.
g.
h.
i.
Net gain on foreign currency transaction and translation
Dividend on non-current investments
Dividend on current investments
Miscellaneous income
27
a.
b.
c.
d.
e.
Employee Benefits Expenses
Salaries and wages
Contribution to provident funds
Expense on employee stock option scheme (see note 36)
Gratuity (see note 35)
28
a.
Finance Cost
Interest expense on:
Term loans
Cash credit
Public deposits
Inter corporate deposits and other interests
Other borrowing cost
b.
29
29
Other expenses
Programming Costs
Tapes consumed
Content and franchise expenses (including royalty)
Rent including lease rentals (see note 41)
Insurance
- Plant & machinery
- Others
Legal and professional expenses (See note below)
Rates and taxes
Office upkeep and maintenance
Other expenses (Continued)
Loss on fixed assets sold / scrapped / written off
Bad debts and Provision for doubtful trade and other receivable, loans and
advances (net)
Note:
a.
b.
c.
As at
31.03.2012
(Rupees)
2,719,812
189,100,000
125,100
53,736
6,984,338
857,976,550
As at
31.03.2011
(Rupees)
292,166
1,042,485
30,692,775
135,245,770
1,999,434,041
89,700,378
4,949,921
158,620,844
25,982,599
2,278,687,783
1,052,804,652
51,330,361
4,527,283
78,734,865
23,722,492
1,211,119,653
474,941,322
319,616,353
222,734,777
45,912,327
133,939,022
1,197,143,801
159,276,895
112,878,763
88,837,886
49,616,792
98,474,811
509,085,147
5,070,095,354
37,940,049
136,168,065
14,972,370
403,230,587
295,625,633
36,247,813
234,092,246
76,620,002
24,177,838
399,393,135
88,313,264
73,566,149
4,599,720,389
2,889,410,154
67,064,153
172,982,746
4,965,450
167,280,919
114,083,862
20,970,456
118,096,912
46,231,428
11,861,391
174,808,026
79,845,553
43,263,057
2,179,385,493
96,764,912
40,411,468
207,425,250
13,702,958
83,597,141
48,960,125
19,393,081
115,550,994
2,487,893
36,638,903
320,000
33,199,995
428,212,654
315,000
2,150,349
113,882,800
49,135,608
32,202,423
12,442,932,880
6,461,831,168
Payments to the auditors of the Company comprises (excluding service tax input credit)
Statutory audit fees (including quarterly limited reviews)
7,250,000
5,500,000
For other services
2,245,000
4,700,000
Reimbursement of expenses
252,287
9,747,287
10,200,000
145
30.
Capital commitment, litigations and contingent liabilities
i.
Estimated amount of contracts of the Group remaining to be executed on capital account (net of
advances) Rs. 37,280,201 (Previous year Rs. 3,165,000).
ii.
The Company has purchased capital equipment under the ‘Export Promotion Capital Goods Scheme’. As per the
terms of the licenses granted under the scheme, the Company has undertaken to achieve an export commitment
of Rs. 87,3663,241 (Previous year Rs. 740,639,339) over a period of 8 years commencing from 10 August, 2005.
The difference between the previous year and the current year amount pertains to the obligation transferred from
iNews.com Limited (subsidiary of TEIL) pursuant to the Scheme over a period of 8 years commencing from 21
October, 2004. In the event the Company is unable to execute its export obligations, the Company shall be liable
to pay customs duty of Rs. 109,207,905 (Previous year Rs. 92,579,917) and interest on the same at the rate of 15
per cent compounded annually. The banks have given a guarantee amounting to Rs. 115,272,170 (Previous year
Rs. 115,272,170) on behalf of the Company to the custom authorities for the same. The Company is hopeful of
meeting the required export obligation.
iii.
Guarantees given by banks on behalf of the Company outstanding for the year ended 31 March, 2012 Rs.
6,193,125 (Previous year Rs. 25,000,000).
iv.
The Company has given corporate guarantees of Rs. 249,000,000 (Previous year Rs. 249,000,000) towards
credit facility given by banks to IBN Lokmat News Private Limited. As at the year end Rs. 101,743,668 was
outstanding in respect of such loans.
v.
Claims against the Company not acknowledged as debts include demands raised by Income Tax authorities
aggregating to Rs. 239,330,980. Amounts deposited by the Company against these claims – Rs. 82,406,373
which are included in Advance Income Tax in note 16. No provision has been made in the accounts for these
demands as the Company expects a favorable decision in appeal. This liability is related to TEIL operations
transferred to the Company pursuant to the Scheme.
vi.
The Company has extended corporate guarantee of Rs. 50,900,000 in favour of ICICI Home Finance Company
Limited in consideration of loan facility extended by ICICI Home Finance Company Limited to the employees
of the Company. As at the year end, Rs. 47,441,177 was outstanding in respect of such loan. This liability is
related to TEIL operations transferred to the Company pursuant to the Scheme.
vii.
Mr. Victor Fernandes and other (“plaintiffs”) had on 25 August, 2006 filed a suit as derivative action on behalf
of e-Eighteen.com Limited before the High Court of Bombay against Mr. Raghav Bahl, erstwhile Television
Eighteen India Limited (TEIL), the Company and other TV18 group entities. The plaintiffs are minority
shareholders of e-Eighteen.com Limited and have alleged that Mr. Raghav Bahl, TEIL, ICICI Global
Opportunities Fund and e-Eighteen.com Limited had entered into a subscription cum shareholders agreement
dated 12 September, 2000 under which Mr. Raghav Bahl and TEIL had inter alia undertaken that any
opportunity offered to them shall only be pursued or taken up through e-Eighteen.com Limited or its wholly
owned subsidiaries. The plaintiffs have alleged that Mr. Raghav Bahl and TEIL have promoted and developed
various businesses through various entities which should have under the aforesaid agreement rightfully been
undertaken by e-Eighteen.com Limited or its wholly owned subsidiaries.
The plaintiffs have alleged that by not doing so Mr. Raghav Bahl and TEIL have caused monetary loss to eEighteen.com Limited as well as to the plaintiffs. The plaintiffs have valued their claim in the suit at Rs.
31,140,600,000 and have inter alia prayed that Mr. Raghav Bahl, TEIL and other TEIL group entities be ordered
to transfer to e-Eighteen.com Limited all their businesses, activities and ventures along with all assets and
intellectual property. The plaintiffs had filed a notice of motion on 18 September, 2006 seeking an interim relief.
A reply had been filed with the Bombay High Court on 14 November, 2006. The said notice of motion was
dismissed on 8 August, 2008 against which the plaintiffs have filed an appeal before the division bench of the
Bombay High Court. The said notice of motion for interim relief was dismissed by the High Court on September
21, 2011.
Based on the legal advice by the legal counsel, management is of the view that the above claim made by the
plaintiffs is unlikely to succeed and has accordingly made no provisions in the financial statements.
viii. The Company has received legal notices of claims / lawsuits filed against it relating to
infringement of
copyrights, objectionable contents and defamation suits in relation to the programmes produced by it, the
146
aggregate claim being Rs. 3,123,653,000 (Previous year Rs. 3,124,110,000). In the opinion of the management,
no material liability is likely to arise on account of such claims/law suits and thus no provision has been made
against these in the financial statements.
ix.
Damages/ claims of Rs. 2,600,000,000 have been filed against the Company by the former channel distributor of
the Company. A counter claim has been filed for damages of Rs. 2,540,000,000 along with a claim for recovery
of dues of Rs. 214,000,000 against the distributor. The matter is pending before the Hon’ble High court of Delhi.
No provision has been made in the accounts for these demands as the Company expects a favorable decision.
x.
Viacom18 has following contingent liabilities:
Particulars
Claims against the
Viacom18 not
acknowledge as debts
Taxation matters in
respect of which
appeals are pending
Guarantee given by
the Company
31.
Total
Group’s share
32,942,042
16,471,021
Total
Group’s share
47,590,000
23,745,000
244,838,077
122,419,039
740,630,000
370,315,000
1,500,000
750,000
-
-
Investments
Investments in Viacom18 Media Private Limited (Viacom18)
The Company had in earlier years subscribed to 12 million ‘Investor Warrants’ of USD 3.33
approximately) per warrant aggregating to USD 39,960,000 in Viacom18 as follows:
i. Series “A”
4,500,000 warrants
ii. Series “B”
4,500,000 warrants
iii. Series “C”
3,000,000 warrants
(Rs. 148.83
and had paid Rupee. 1 each for these warrants aggregating to Rs. 12 million.
Each warrant was convertible into one fully paid up equity share of Viacom18 on exercise of options and on payment
of the balance of the stipulated warrant consideration price. The option was exercisable during a period of 12, 24 and
36 months from the date of allotment of warrants of “A”, “B”, and “C” series respectively. During the year, warrants
allotted under Series “C” has been cancelled and shares were allotted against share application money paid which
was equal in numbers as were allocated to joint venture partner in Viacom18.
The Company’s total investment in the capital of Viacom18 is Rs. 8,564,425,247.
As at 31 March 2012, Viacom18 has accumulated losses and its net worth has been partially eroded.
32.
Earnings per share
Basic earnings per equity share have been computed by dividing net profit / (loss) after tax by the weighted average
number of equity shares outstanding for the year ended 31 March, 2012.
Diluted earnings per equity share have been computed using the weighted average number of equity shares and
dilutive potential equity shares outstanding during the year. The details are:
Particulars
Units
a.
b.
Weighted average of number of equity shares
Rs.
Numbers
147
Year ended
31.03.2012
(737,794,646)
481,847,253
Year ended
31.03.2011
(174,046,490)
224,032,396
Particulars
Units
used in computing basic earnings per share
(Nominal value is Rs 2/- per share)
c.
Basic earnings / (loss) per share (a/b)*
d.
Weighted average of the number of shares
issued under Options
e.
Adjustment for number of shares that would
have been issued at the fair value
f.
Year ended
31.03.2012
Year ended
31.03.2011
Rs.
Numbers
(1.53)
2,899,982
(0.78)
1,627,977
Numbers
(2,284,375)
(1,302,418)
Weighted average of number of equity shares
used in computing diluted earnings per share
(b+d+e)
Numbers
482,462,860
224,357,955
Diluted earnings / (loss) per share (a/f)*
Rs.
(1.53)
(0.78)
*Since the effect of dilution is anti-dilutive the diluted EPS is same as basic EPS.
33.
Deferred tax
The Group has carried out its tax computation in accordance with the mandatory standard on accounting, AS 22 –
‘Accounting for Taxes on Income’ referred in Companies (Accounting Standards) Rules, 2006. In view of absence of
virtually certainity of realisation of deferred tax asset (DTA) on unabsorbed tax losses, deferred tax asset have been
recognised only to the extent of deferred tax liability (DTL) by the Company. The major components of DTA/DTL of
Viacom18 as recognised in the Consolidated Financial statements are as follows:(Amount in Rupees)
Particulars
As at
As at
31.03.2012
31.03.2011
Deferred Tax Asset
16,701,910
16,701,910
Tangible and Intangible Assets
37,230,995
37,230,995
Provision for Doubtful Debts
2,242,798
2,242,798
Provision for Retirement Benefits
12,112,064
12,112,064
Expenses disallowed under section 40(a) allowable in later years
Total
68,287,767
68,287,767
Deferred Tax Liability
36,027,065
8,287,667
Inventory Amortisation
Total
36,027,065
8,287,667
Net Deferred Tax Asset
32,260,702
60,000,000
34.
Segmental reporting
Segment Identification, Reportable Segments and definition of each reportable segment:
i.
Primary/Secondary Segment Reporting Format:
a)
The risk/return profile of the Group’s business is determined predominantly by the nature of its products
and services. Accordingly, the business segments constitute the primary segments for disclosure of
segment information.
b) In respect of secondary segment information, the Group has identified its geographical segments as (i)
domestic and (ii) overseas. The secondary segment information has been disclosed accordingly.
ii.
Segment Identification:
Business segments have been identified on the basis of the nature of the products/services, the risk/return
profile of individual businesses, the organizational structure and the internal reporting system of the Group.
iii.
Reportable Segments:
Reportable segments have been identified as per the criteria prescribed in Accounting Standard-17 -‘Segment
148
Reporting’ as specified in the Companies (Accounting Standards) Rules, 2006. The Group is engaged in the
business of television media and production and distribution of films primarily in India. These business
segments are separately distinguishable and the risks and returns are different from each other and therefore as
per Accounting Standard 17 – Segment Reporting are to be treated as reportable segments. However, the
secondary segment as per Para 27 of the said Accounting Standard, the Film production and distribution
business does not fall within the criteria set out therein for reporting segments and therefore secondary
segment information has not been given in the financial statements.
iv.
Segment Composition:
a) Broadcasting and Content comprise of television content and airtime sales;
b) Film production and Distribution business;
v.
Revenue and expenses have been accounted on the basis of their relationship to the operating activities of the
segment. Incomes and expenditures which are related to the Group as a whole and are not allocable to
segments on a reasonable basis have been allocated under “Unallocable Income and Expenditure”. Assets and
Liabilities, which relate to the Group as a whole, and are not allocable to segments on a reasonable basis, have
been included under “Unallocable Assets and Liabilities.”
vi.
Inter-segment Transfers - The Group accounts for intersegment sales and transfers at cost.
Particulars
Revenue
Income
from
operations
Segment Results
(PBT)
Add: Unallocated
income
Add:
Interest
Income
Less:
Interest
Expense
Profit/(loss)
before Tax
Tax expense
Profit/(loss)
after tax and
before minority
interest
Segment Assets
Unallocated
Assets
Total Assets
Segment
Liabilities
Unallocated
Liabilities
Total Liabilities
Capital
Expenditure
Depreciation and
Amortisation
Non-Cash
Expenditure other
than depreciation
Broadcasting
and Content
Film
Production
and
Distribution
Broadcasting
Film
and Content
Production
and
Distribution
Total
Total
13,226,831,608
1,958,118,577
15,184,950,185
7,994,214,645
97,801,512
8,092,016,157
(535,873,954)
(29,100,907)
(564,974,861)
283,370,960
(40,269,198)
243,101,762
16,601,704,310
3,737,067,414
13,458,322,914
467,598,625
620,623,454
61,691,055
237,353,096
73,554,715
1,197,143,801
509,085,147
(904,142,112)
(130,737,616)
58,031,873
(962,173,985)
43,308,874
(174,046,490)
20,338,771,724
411,550,702
20,750,322,426
13,925,921,539
11,873,641,460
1,928,143,427
7,833,593,698
5,157,579
13,801,784,887
1,290,762,322
15,092,547,209
7,838,751,277
-
393,266,946
13,925,921,539
547,191,791
8,232,018,223
59,726,797
335,294,522
175,963,575
461,412,649
116,033,149
149
35.
Employee Benefits
I.
Defined contribution plans
The Group has recognised Rs. 89,700,378 (Previous Year Rs. 51,330,361) for provident fund contributions in the
Statement of Profit and Loss.
II. Defined Benefit Plans
(b)
Gratuity
The gratuity liability arises on retirement, withdrawal, resignation or death of an employee. The aforesaid
liability is calculated on the basis of fifteen days salary (i.e. last drawn salary plus dearness allowance) for
each completed year of service subject to completion of five years of service.
The following table set out the funded / unfunded status of the retirement benefits plans and the amount
recognised in the financial statements:
Sr.
No.
a.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
b.
i.
ii.
iii.
iv.
v.
vi.
vii.
c.
i.
ii.
iii.
d.
i.
ii.
iii.
e.
i.
ii.
iii.
iv.
v.
vi.
Particulars
31.03.2012
(Rupees)
Change in defined benefit obligation
TV18)
Current Service Cost
Interest Expenses
Past service cost
Actuarial (Gain) / Loss
Benefits Paid
Present value of obligations at the end of the year
TV18)
Expected return on scheme assets
Employer’s contribution
Benefits Paid
Fair value of plan assets at the end of the year
Return on Plan Assets
Amount recognised in the Balance Sheet
Present value of defined benefit obligations
Net liability/(asset) recognised in the balance sheet
- Non current liability
- Current liability
Expenses recognised in statement of profit and Loss
Current service costs
Interest expense
Expected return on investment
Net actuarial (gain)/loss recognized during the year
Past service
Expenditure recognised in the Statement of Profit and
150
31.03.2011
(Rupees)
56,458,353
44,534,494
36,163,360
-
20,256,994
8,521,028
(942,903)
(9,395,395)
119,432,571
11,611,619
2,893,069
1,807,309
7,906,479
(3,923,482)
56,458,354
5,876,328
13,012,342
4,618,965
-
1,605,537
7,602,253
(4,908,905)
246,982
23,434,537
369,517
1,597,676
(836,297)
126,467
5,876,328
1,605,537
246,982
1,852,519
369,517
126,467
495,984
119,432,571
23,434,537
95,998,034
85,211,087
10,786,947
56,458,354
5,876,328
50,582,026
41,830,323
8,751,703
20,256,994
8,521,028
(1,605,537)
(1,189,885)
25,982,599
11,611,619
2,893,069
(369,517)
7,780,012
1,807,309
23,722,492
Sr.
No.
Particulars
31.03.2012
(Rupees)
Loss
Principal Actuarial assumptions
Rate for discounting liabilities
Expected salary increase rate
Mortality table used
f.
i.
ii.
iii.
iv.
v.
vi.
Retirement age
Withdrawal rates
-Upto 30 years
-Upto 44 years
-Above 44 years
31.03.2011
(Rupees)
8.00% p.a.
6.00% p.a.
8.50% p.a.
LIC (1994-96)
duly modified
60 Years
8.00% p.a.
6.00% p.a.
8.50% p.a.
LIC (1994-96)
duly modified
60 Years
3%
2%
1%
3%
2%
1%
Notes:
1.
The discount rate is based on the prevailing market yield of Indian Government Securities as at the balance sheet
date for the estimated term of obligations.
2.
The expected return is based on the expectation of the average long term rate of return on investments of the fund
during the estimated term of the obligations.
3.
The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other
relevant factors.
4.
Plan assets of TV18 mainly comprise funds managed by the insurer i.e. ING Vysya Life Insurance Group Limited
and Life insurance Corporation of India.
Year ended
Present value of the
Gratuity benefits
(Rupees)
119,432,571
56,458,354
36,163,360
31.03.2012
31.03.2011
31.03.2010
Experience adjustments
arising on the Gratuity
benefits
(Rupees)
(942,903)
7,906,479
(7,472,867)
The Group’s best estimate of contributions expected to be paid during the next 12 months beginning after the
balance sheet date is Rs. 26,531,694 (previous year Rs. 21,878,455).
36.
(i) GBN Employees Stock Option Plan 2007 (“ESOP 2007”)
a.
The Company had established an Employee Stock Option Plan (ESOP 2007) in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 which have been approved by the Board of Directors and the shareholders. A
Remuneration/ Compensation Committee comprising independent, non executive members of the Board of
Directors administers the ESOPs. All options under the ESOPs are exercisable for equity shares. The
Company had declared stock split of 1 equity share of face value of Rs. 10 each in 5 equity share of Rs. 2
each through postal ballot dated 19 December 2007, the results of which were declared on 25 January,
2008. The Company plans to grant upto 12,500,000 options to eligible employees and directors of the
Company and its subsidiaries and holding company of the Company. The Company has increased
maximum number of options that can be granted under GBN ESOP 2007 from 8,500,000 to 12,500,000
options at Annual General Meeting held on 9 September, 2011.
b.
Options which have been granted under ESOP 2007 shall vest with the grantee over the vesting period
from the date of grant. The exercise period of the options is a period of two years after the vesting of the
options. Each option is exercisable for one equity share of Rs. 10 each (for one equity share of Rs 2 each
after split) fully paid up on payment of exercise price (as determined by the Remuneration/ Compensation
Committee) of share determined with respect to the date of grant.
151
c.
During the year the Remuneration/Compensation Committee of the Board of Directors has granted
2,211,207 options of the Company under GBN Employee Stock Option Plan 2007 to those employees of
TEIL who have become employees of the Company pursuant to the Scheme of Arrangement, under a
single plan existing in the Company.
The vesting period, vesting terms and exercise period for these options are kept as same as in the original scheme
and are as follows:
Particulars
Plan 2004
49,028
Senior Employee Stock
Option
Plan 2004
303,790
Long Term Retention
Plan 2005
476,000
Vesting date
Option to vest after one year
from the date of grant within
such period not exceeding ten
years as may be determined
by
the
Remuneration/
years as may be determined by
the
Remuneration/
After four year from the
date of grant of options.
Three years of service from
the date of grant of option
Two to four years of service
option
Four years of service
option.
Exercise Period
During two
vesting date.
During a period of two/three
years from the vesting date.
vesting date.
Options granted
Particulars
years
after
Options granted
Vesting date
10,472
years as may be determined
by
the
Remuneration/
Three years of service from
the date of grant of option.
36,737
year from the date of grant
within such period not
exceeding ten years as
may be determined by the
Remuneration/
service from the date of
grant of option.
Exercise Period
During one year after vesting
date.
During four years after
vesting date.
The Company has granted 7,231,849 options upto 31 March, 2012.
152
(New)
1,335,180
After a minimum period of
one year from the date of
grant. The vesting shall
happen in one or more
tranches as may be decided
by
the
Remuneration/
Option to vest over such
period, in such manner and
subject to conditions as may
be
decided
by
the
Remuneration/
Compensation
Committee
provided
the
employee
Exercise
period
will
commence from the vesting
date and extend upto the
expiry period of the option as
may be decided by the
Remuneration/
d. The movement in the scheme is set out as under:
Sr.
No
.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
Particulars
ESOP 2007
Year ended 31.03.12
Options
Weighted
Average
Price
Outstanding at the beginning of year*
Granted during the year*
Granted during the year pursuant to scheme of
arrangement
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Number of equity shares of Rs. 2 each fully paid up to
be issued on exercise of option
Weighted average share price at the date of exercise
Weighted average remaining contractual life (years)
ESOP 2007
Year ended 31.03.11
Options
Weighte
d
Average
Price
(Numbers) (Rupees)
3,192,242
55.00
1,100,000
86.00
-
(Numbers)
2,450,717
2,211,207
(Rupees)
68.91
61.72
320,304
64,217
277,424
3,999,979
2,178,656
3,999,979
55.00
55.00
27.48
25.40
27.19
NA
1,720,379
121,146
2,450,717
957,769
2,450,717
55.00
55.00
68.91
55.00
NA
320,304
2.24
90.06
NA
1,720,379
2.81
92.50
NA
* Remuneration/Compensation committee (“Committee”) of the Company vide resolution dated 4 November, 2011
has re-priced its existing 3,849,374 options at market price of Rs. 45.40 on the date of re-pricing . Subsequently
taking into consideration further decline in the share prices of the Company, the Commiittee vide its resolution
dated 30 December, 2011 has again re-priced its 3,731,765 options at market price of Rs. 27.70 on the date of repricing, for the benefit of the employees covered under the ESOPs scheme.
e. The Finance Act 2009 has abolished Fringe Benefit Tax (FBT) on Employees' Stock Option Plan, hence there is no
charge in these financial statements.
f. Pro forma Accounting for Stock Option Grants
The Company applies the intrinsic value-based method of accounting for determining compensation cost for its stockbased compensation plan. Had the compensation cost been
determined using the fair value approach, the Company’s net income and basic and diluted earnings per share as
reported would have reduced to the pro forma amounts as indicated:
Sr.
No
Particulars
1.
2.
Net Profit/ (Loss) as reported (a)
debited to Statement of Profit and Loss
based on fair value
Adjusted pro forma Profit/(Loss)
Pro forma basic earnings per share
Pro forma diluted earnings per share
3.
4.
5.
6.
7.
8.
9.
10.
Year ended
31.03.2012
(Rupees)
(737,794,646)
4,949,921
Year ended
31.03.2011
(Rupees)
(174,046,490)
4,527,283
21,350,732
17,370,431
(16,400,811)
(754,195,457)
(16,400,811)
(1.53)
(1.56)
(1.53)
(1.56)
(12,843,148)
(186,889,638)
(12,843,148)
(0.78)
(0.83)
(0.78)
(0.83)
g. The fair value of the options, calculated by an external valuer, was estimated on the date of grant using the BlackScholes model with the following significant assumptions
153
Particulars
Volatility (in %)
7.85%
2.80 years
33.43%
0%
7.96%
3.01 years
39.36%
0%
The volatility of the options is based on the historical volatility of the share price since the Company's equity shares
are publicly traded, which may be shorter than the term of the options.
(ii) ESOP 2008 Plan of Viacom 18
Pursuant to the resolution passed by the Board of Directors on 23 September, 2008, Viacom18 had introduced
Employee Stock Option Plan 2008 (“the Plan”) for employees of Viacom18, as may be decided by the Benefits
Committee/Board. The Plan provided that the total number of options granted there under will be 3,700,000. Each
option, on exercise, was convertible into one equity share of the Viacom18 having face value of Rs. 10. The options
had been granted at an exercise price which was equivalent to the prevailing Fair Market Value as on the date of the
grant. Accordingly, the Viacom18 has not recognised any expense on account of grant of stock options. However,
during the year the Plan was cancelled/annulled and the outstanding options as on 1 April, 2011 stood cancelled as
approved by the Benefits Committee.
The details of the activity under the Scheme during the year are as follows:
Particulars
Option Outstanding at the beginning of the year
Options Granted during the year
Options Exercised during the year
Options Lapsed during the year
Options Annulled during the year
Options Outstanding at the year end
37.
31.03.2012
2,186,445
777,785
1,408,660
-
31.03.2011
2,303,717
117,272
2,186,445
Related Party Disclosures
Disclosures as required by the Accounting Standard (AS) 18 – “Related Party Disclosures” are as below:
a. Related parties and their relationships
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Name of Entity
AETN 18 Media Private Limited
w.e.f 21 September, 2010
ibn18 Media and Software Limited (ibn18
Media) (upto 10 June, 2011 (also refer note 3.2)
Ibn18 (Mauritius) Limited
Infomedia Press Limited
Digital18 Media Limited
Bigtree Entertainment Private Limited
E-Eighteen.com Limited
NewsWire18 Limited
Television Eighteen India Limited
upto 10 June, 2011 (also see note 3.1)
E-18 Limited, Cyprus
Television Eighteen Mauritius Limited,
154
Network18
RVT Media
AETN18
Holding company
Subsidiary company
Subsidiary company
Ibn18 Media
Subsidiary company
Viacom18
IBN Lokmat
Ibn18 Mauritius
Web18
Infomedia
Digital18
Bigtree
E-18
Newswire
Setpro18
TEIL
Subsidiary company
Joint venture
Joint venture
E-18, Cyprus
TEML
Sr.
No.
Name of Entity
Mauritius
TV18 UK Limited
TV18 Home Shopping Network Limited
Network 18 India Holdings Private Limited
(Upto 10 June, 2011 )
21
RVT Investments Private Limited (upto 10 June,
2011)
22
Web 18 Holdings Limited, Cayman Islands
23
BK Holdings Limited, Mauritius
24 Television Eighteen Commoditiescontrol.com
Limited (upto 10 June, 2011)
25 Care Websites Private Limited (upto 10 June,
2011)
26 Moneycontrol Dot Com India Limited
27 Greycells18 Media Limited w.e.f. 1 April, 2011
28 Colosceum Media Private Limited
29 Webchutney Studio Private Limited w.e.f 1 April,
2011
30 Television Eighteen Media & Investment Limited,
Mauritius
31 Raghav Bahl
18
19
20
TV18 UK
TV18 HSN
N-18 Holding
RVT
Web18 Holding
BKH
TECCL
Care
MCD
Greycells18
Colosceum
Webchutney
TEMIL
RB
(KMP)
(KMP)
(KMP)
Relative of KMP (RS)
Entity under significant influence
of KMP
of KMP
of KMP
of KMP
of KMP
of KMP
32
Sameer Manchanda (SM) (upto 22 October, 2010)
SM
33
Rajdeep Sardesai
RS
34
33
Sagarika Ghose
SGA News Limited (upto 18 August, 2010)
35
36
Greycells18 Media Limited w.e.f. 1 April, 2011
Greycells18
Network18 Pub
37
Network18 GSP
38
Network18 Group Senior Professional Welfare
Trust
24X7 Learning Private Limited
39
IBN 18 Trust
IBN18
40
Wespro Digital Private Limited w.e.f 1 April,
2011
Wespro
SG
SGA News
24X7
Note: Related parties have been identified by the Management of the Company.
155
b. Details of balances and transactions during the year with related parties
Sr
No
Transactions
Holding
Company
Income from operations and other
Income
Network18
51,032,503
(519,288)
Bigtree
Digital18
E-Eighteen
Greycell18
Infomedia
Setpro18
TV18 Homeshop
Network18 Pub
TEML
Web 18
TEIL
IBN Lokmat
Viacom18
Total
51,032,503
(519,288)
Interest
Received
Network18
3,435,528
E-Eighteen
Infomedia
Setpro18
TV18 Homeshop
TEMIL
BKH
N-18 Holding
Web 18
N18 - GSP
Total
3,435,528
Interest Paid
Network18
41,108,723
(2,612,421)
N-18 Holding
TEIL
RVT Investment
Total
41,108,723
Fellow
Subsidiary
Key
Managerial
Personnel
Amount in Rupees
Entity under
significant
influence
Joint
venture
92,736
(92,736)
1,361,666
(519,276)
2,083,100
12,933,630
13,580,805
(45,929)
785,616
(785,616)
25,825,641
(27,813,575)
26,936,314
83,599,509
(29,257,132)
(13,245,901)
(5,549,287)
(18,795,188)
8,550,000
47,962,588
56,512,588
-
9,241,000
9,241,000
-
4,798
1,209,034
5,556
3,180,349
66,982,446
7,597,339
1,137,272
(692,601)
80,116,795
(692,601)
-
-
7,891,0347
7,891,0347
-
(6,787,398)
(1,062,395)
(16,519,589)
-
-
-
-
156
Sr
No
Transactions
Holding
Company
(2,612,421)
Expenditure for Services received
Network18
62,080,743
(12,685,770)
Digital18
Infomedia
Newswire18
Setpro18
TV18 UK
E-eighteen
Network18 Pub
Colosceum
Web Chutney (*)
Wespro
TEIL
Greycell18
SM
RS
SG
TV18 Homeshop
Web18
Viacom18
Total
62,080,743
(12,685,770)
Reimbursement of expenses received
Network18
108,949,330
(10,682,393)
Bigtree
Digital18
E-Eighteen
Greycell18
Infomedia
Newswire18
Setpro18
TV18 Homeshop
-
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
Entity under
significant
influence
(24,369,382)
-
-
-
2,647,506
(300,000)
31,462,024
(880,000)
5,427,302
1,407,629,703
(415,432,974)
4,620,105
(2,171,417)
2,989,476
(149,989)
54,093,301
568,000
(129,252,127)
(2,595,900)
(3,685,937)
1,509,437,417
(554,468,344)
(10,287,097)
18,028,500
(14,424,000)
2,233,614
(1,724,358)
20,262,114
(26,435,455)
2,474,649
2,474,649
-
4,502,430
(258,931)
299,250
(460,000)
4,801,680
(718,931)
267,319
(213,054)
29,538,697
(1,431,536)
57,487,645
(94,960)
3,172,098
11,674,313
(33,677)
122,924
24,401,760
(19,634,404)
9,365,919
(107,300)
-
-
-
157
Sr
No
Transactions
Colosceum
TEIL
Holding
Company
Web18
IBN Lokmat
Viacom18
Total
108,949,330
(10,682,393)
Reimbursement of expenses paid
Network18
156,869,188
(86,292,729)
E-Eighteen
Infomedia
Setpro18
TV18 Homeshop
Digital18
TEIL
Web18
IBN Lokmat
Viacom18
Total
156,869,188
(86,292,729)
Assets
purchased
Network18
2,429,400
Colosceum
TV18 Homeshop
TEIL
Total
2,429,400
Loan Received During the year
Network18
3,049,000,000
(420,000,000)
N-18 Holding
RVT Investment
Total
3,049,000,000
(420,000,000)
Loan Given
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
Entity under
significant
influence
29,326
(52,532,330)
(3,353,780)
136,060,000
(77,401,041)
-
23,092,844
(16,931,251)
23,363,436
(98,040)
46,456,280
(17,029,291)
-
987,504
(248)
1,630,948
(6,734,200)
386,454,601
(368,612,736)
213,260
(949,600)
934,080
(240,000)
(100,822,148)
(83,273)
390,220,393
(477,442,205)
-
482,177
(1,906,428)
7,360,237
(5,156,955)
7,842,414
(7,063,383)
-
1,286,500
(2,089,120)
(150,000)
1,286,500
(2,239,120)
-
-
-
(495,000,000)
(450,000,000)
(945,000,000)
-
-
-
158
Sr
No
Transactions
NW18 GSP
RS
Total
Loan Repaid
Network18
N-18 Holding
RVT Investment
N18 GSP
Total
Holding
Company
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
-
-
50,000,000
50,000,000
-
-
Entity under
significant
influence
307,500,000
(2,262,600,000)
307,500,000
(2,262,600,000)
3,049,000,000
(870,000,000)
3,049,000,000
(870,000,000)
(495,000,000)
(1,924,718,781)
(2,419,718,781)
-
-
1,530,100,000
(1,034,500,000)
1,530,100,000
(1,034,500,000)
Sale of
Investment
TEML
269,040,000
Total
269,040,000
Balance at the
year end
Loan and Advance receivable (Outstanding against cost allocation expenses
reimbursement)
Network18
(5,074,206)
Digital18
33,090,218
(3,426,265)
E-Eighteen
67,081,496
(10,214)
Greycell18
19,537,155
Infomedia
19,999,977
(23,177,166)
Network18
Pub
NW18 GSP
TV18
67,255,834
Homeshop
(5,137,348)
Colosceum
161,495
Web Chutney
40,164
Web-18
(22,197,476)
Bigtree
(407,140)
Newswire
(841,834)
Setpro18
(5,939)
IBN Lokmat
11,210,508
(5,125,477)
Viacom18
14,965,319
- (10,254,524)
159
-
14,219,467
(325,910)
527,926,074
-
Sr
No
Transactions
Holding
Company
Fellow
Subsidiary
Key
Managerial
Personnel
Joint
venture
Total
207,166,337
26,175,827
(5,074,206)
(55,203,382)
- (15,380,001)
Loan and Advance receivable (Loans given outstanding including interest accrued)
TEMIL
997,224,891
B.K.Holding
161,558,983
N-18 Holding
6,325,371
Total
1,165,109,245
Debtors
Network18
58,735,364
Bigtree
760,892
Digital18
45,420,018
E-Eighteen
221,777
Greycell18
26,310,856
Infomedia
140,183,631
Network18 Pub
TEML
196,674,970
TV18
7,797,021
Homeshop
Web18
12,412
Viacom18
26,456,304
Total
58,735,364
417,381,577
26,456,304
Creditors
Network18
25,461,214
25,461,214
61,259
(61,259)
537,174
153,490,328
(18,967,287)
1,040,578
(813,295)
50,802,861
(399,394)
3,253,600
53,401
-
-
-
(230,126)
10,299,460
1,424,080
(4,985,050)
E-Eighteen
(162,129)
TEIL
(37,130,014)
Total
22,137,443
220,962,742
(28,852,032)
(62,748,553)
Share Application Money paid pending allotment
Viacom18
-
-
-
-
E18 Ltd.
Newswire18
Setpro18
TV18 UK
TEML
Infomedia
TV18
Homeshop
22,137,443
(28,852,032)
-
Entity under
significant
influence
542,145,541
(325,910)
Colosceum
Digital18
Web18
-
-
-
-
-
(320,100,000)
Total
-
-
160
-
-
Sr
No
Transactions
Holding
Company
Fellow
Subsidiary
Corporate Guarantee given to as outstanding
Ibn Lokmat
Total
Corporate Guarantee Taken from as outstanding
Network18
(1,669,600,000)
TEIL
(320,000,000)
Total
(1,669,600,000)
(320,000,000)
Investments at year end
Web18 Holding
(1,848,836)
Viacom18
IBN Lokmat
Total
(1,848,836)
Security
Deposit
Network18
(3,391,250)
Total
(3,391,250)
Figures in italics pertains to the
pervious year
Key
Managerial
Personnel
Joint
venture
Entity under
significant
influence
-
320,100,000
-
-
124,500,000
(124,500,000)
124,500,000
(124,500,000)
-
-
-
-
-
(1,500,000)
25,000,000
(25,000,000)
25,000,000
(26,500,000)
-
-
-
-
Notes :
*Inwebchutney, out of total expenditure of Rs. 568,000, expenses of Rs. 400,000 was capitalised by AETN during the quarter
38.
Rights issue
The Company had allotted 54,495,443 partly paid shares on rights basis to its equity shareholders during the year
ended 31 March, 2011. Out of this 54,446,407 shares were converted into fully paid up shares till 31 March, 2012
upon receipt of full and final call money and balance 49,036 shares have been forfeited in the Board Meeting dated
19 January, 2012 for non payment of full and final call money amounting to Rs. 3,064,750. The status of utilization
of rights issue proceeds is set out below:
(Amount in Rupees)
Proposed
Actual utilization
utilization
Repay certain loans
2,150,000,000
2,150,000,000
Investment in Viacom18
1,500,000,000
1,500,000,000
Investment in IBN Lokmat Private Limited
250,000,000
209,250,000
995,324,000
995,320,000
Rights issue expenses*
200,000,000
191,227,714
Total
5,095,324,000
5,045,801,714
* Surplus available after actual expenses incurred (including provisions) on rights issue have
investment in Viacom18.
161
been utilized towards
# The balance unutilised amount Rs. 46,457,536 are temporarily parked with the banks in deposit accounts.
39.
Barter Transactions
During the year ended 31 March 2012, the Group had entered into barter transactions, which were recorded at the
fair value of consideration receivable or payable. The Income from operations for the year ended 31 March, 2012
has been net off to reflect revenue from barter transactions of Rs. 109,927,679 (previous year Rs. 102,32 1,794) and
expenditure of Rs. 116,194,774 (previous year Rs. 93,925,912) being the fair value of barter transactions provided
and received.
40.
Foreign currency exposure
The Group does not use foreign currency forward contracts to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted transactions. The Group’s foreign currency
exposure not hedged by a derivative instrument or otherwise as at year end is as follows:
Foreign Currency
Trade Receivables
Foreign Currency
Rupee Equivalent
Amount as on 31.03.2012
24,353
1,245,899
(5,000)
(160,000)
1,225
63,688
(-)
(-)
216,650
17,721,958
(75,000)
(5,430,000)
41,214
1,699,645
(-)
(-)
6,985,851
357,352,650
(765,000)
(3,405,000)
2,413
129,912
(-)
(-)
38,721
2,646,159
(1,500)
(110,000)
21,787
1,782,205
(16,307)
(1,288,295)
1,327
54,743
(60,000)
(2,060,000)
6,602,624
337,790,257
(1,249,148)
(56,135,830)
AUD
CAD
GBP
SGD
USD
Trade Payables
AUD
EURO
GBP
SGD
USD
Loans and Advances
AED
5,000
(-)
13,654
(-)
131
(-)
141
(-)
381,000
(225,000)
EURO
GBP
SGD
USD
70,572
(-)
933,080
(-)
10,703
(-)
5,794
(-)
19,491,969
(10,235,000)
Figures in bracket are for previous year.
41.
Obligation on long term, non-cancellable operating leases
i)
Obligation towards operating leases (As lessee)
Leases where the lessor effectively retains substantially all the risks and benefits of
ownership of the leased asset are classified as operating leases. Operating lease charges are recognised as an
expense in the statement of profit and loss. The Group has taken various residential/ commercial premises under
162
cancellable /non-cancellable operating leases. The cancellable lease agreements are normally renewed on expiry.
Rent amounting to Rs 234,092,246 (Previous year Rs. 118,096,912) has been debited to the consolidated
statement of profit and loss during the year. The details of future minimum lease payments under leases are as
under:
Particulars
As at
31.03.2012
265,014,301
682,633,639
507,838,908
ii)
As at
31.03.2011
121,117,596
137,341,119
1,196,414
Obligation towards Finance leases (As lessee)
The company has entered into finance lease arrangements for certain equipments which provide the company an
option to purchase the assets at the end of the lease period. Finance Lease payment amounting to Rs. 824,973
(Previous year Rs. 163,447) has been paid during the year. The total minimum lease payments and its present value
and discounted at the interest rate implicit in the lease are:
d.
Minimum lease payments
As at
31.03.2012
3,869,805
11,618,473
15,488,278
e.
Present value of minimum lease payments
As at
31.03.2012
2,263,687
8,452,854
10,716,541
f.
As at
31.03.2011
848,987
1,190,855
1,375,248
As at
31.03.2011
653,853
1,190,855
1,844,708
Reconciliation:
As at
31.03.2012
15,488,278
4,771,737
10,716,541
Total Minimum Lease Payments as above
Less: Future Finance charges
Net Present Value
As at
31.03.2011
2,224,235
379,527
1,844,708
42.
During the year, the Viacom18 Media Private Limited has charged onetime cost towards impairment of film rights
amounting to Rs. 693,009,861 (50% share) to reflect the realisable value of the film library held by its subsidiary
company, The Indian Film Company (Cyprus) Limited (TIFC). Network18 Holdings Limited, Cayman Islands
(Network18) (subsidiary of Network 18 Media & Investments Limited) has fully indemnified TIFC against any
diminution in the value of film rights existing as on the date of valuation and accordingly the Viacom18 has
recognised Rs. 1,086,309,861 (50% share) as Indemnity Income. This has been done vide letter agreements dated
September 30, 2010 and May 28, 2011 executed in favor of Roptonal Limited, holding company of TIFC, and
assignment of receivable to TIFC vide letter dated September 30, 2011. The amounts receivable under the above
letter agreements are receivable from Network18 within 30 days from 21 July, 2014. The one time impairment
charge and the other income receivable from Network18 pursuant to the abovementioned letters are disclosed as
Exceptional Items.
43.
Interest in Joint Ventures
The Company’s interest, as a venturer, in jointly controlled entity as at March 31, 2012 is:
163
Name of the entity
Country of
Incorporation
India
India
% Voting
power held
50%
50%
The following amounts represent the Company’s share of the assets and liabilities and revenue and expenses of the
joint ventures and are included in the consolidated balance sheet and consolidated statement of profit and loss:
(a)
IBN Lokmat
Particulars
1
2
3
4
5
6
7
8
Assets
Fixed assets
Long - term loans and advances
Current assets
Inventories
Trade receivables
Liabilities
Non - current liabilities
Long - term provisions
Current liabilities
Short - term borrowings
Trade payables
Revenue
Other income
Expenses:
Finance costs
Operating and other expenses
Profit / (Loss) before tax
Profit / (Loss) for the year
As at
31.03.2012
(Rupees)
As at
31.03.2011
(Rupees)
58,643,064
83,500
76,444,499
287,363
26,455
28,330,013
12,728,727
1,785,735
18,149,963
33,769
28,716,087
14,942,828
2,828,856
20,484,950
20,875,000
2,315,565
44,125,000
2,571,187
6,746,834
28,239,420
42,081,881
Year ended
31.03.2012
5,813,865
22,025,216
49,333,508
Year ended
31.03.2012
87,712,231
439,435
77,956,885
288,030
45,046,902
10,562,316
18,986,415
95,686,850
(82,130,816)
(82,130,816)
41,235,625
12,145,017
18,498,513
104,772,598
(98,406,839)
(98,406,839)
(b) Viacom18
Particulars
1
As at
31.03.2012
(Rupees)
Assets
Fixed assets
Long - term loans and advances
Other non- current assets
Deferred Tax Assets (Net)
681,534,184
261,487,735
1,086,309,861
32,260,702
164
As at
31.03.2011
(Rupees)
537,511,046
68,060,166
60,000,000
Particulars
2
3
4
5
6
7
8
9
44.
Current assets
Current Investments
Inventories
Trade receivables
Liabilities
Non - current liabilities
Long - term provisions
Current liabilities
Short - term borrowings
Trade payables
As at
31.03.2012
(Rupees)
1,964,789,564
As at
31.03.2011
(Rupees)
3,109,156,209
977,722,687
2,628,552,579
282,364,323
1,046,029,771
1,049,346
30,257,643
346,429,611
1,976,360,100
1,549,448,668
781,374,588
799,850
990,000,000
126,290
1,522,258,543
1,935,415,609
336,116,220
10,167,954
Year ended
31.03.2012
Revenue
Other income
Expenses:
Finance costs
Operating and other expenses
Profit / (Loss) before Exceptional Items and
Tax
Impairment of Film Rights
Recovery from indemnity
Profit / (Loss) before tax
Profit / (Loss) for the year
7,918,648,848
15,356,999
1,000,000,000
110,463
1,504,426,693
1,633,653,361
399,052,183
7,677,634
Year ended
31.03.2012
641,610,162
332,556,564
41,427,993
7,848,055,609
(929,644,480)
5,491,994,901
37,466,381
358,822,279
96,154,242
40,562,090
4,565,136,023
468,786,649
(693,009,861)
1,086,309,861
(536,344,480)
(564,083,778)
468,786,649
425,477,774
Disclosure of information in respect of the subsidiaries pursuant to Section 212 (8) of the Companies Act, 1956 and
General Circular No: 2/2011 of the Ministry of Corporate Affairs:
Name of Subsidiary
Reporting Currency
Exchange Rate
Capital *
Reserves**
Total Assets
Total Liabilities
Investments (except in case of
investments in subsidiaries)
Turnover (including other income)
Profit/(Loss) before taxation
Provision for taxation (including
deferred tax)
RVT Media
AETN18
(Amount in Rupees)
ibn18 Mauritius
INR
1
966,150
345,433,792
346,444,371
44,429
-
INR
1
473,582,708
(310,547,688)
366,433,528
203,398,508
-
USD
51.16
5,075
(444,092,390)
1,257,494,949
1,701,582,264
-
6,943
(34,833)
-
96,702,771
(506,395,873)
-
76,539,772
75,841,666
1,549,970
165
Name of Subsidiary
RVT Media
AETN18
Profit/(Loss) after taxation
(34,833)
Proposed Dividend
Country
India
* Including Share Application Money pending allotment
ibn18 Mauritius
(506,395,873)
India
74,291,696
Mauritius
** Debit balance in statement of profit and loss to the extent not written off have been reduced from the reserves
and surplus
45.
The Board of Directors of the Company in the meeting of the Company held on 3 January, 2012 have considered
and approved the issue of equity shares on rights basis for an amount aggregating upto Rs. 2,700 crores for
acquisiton of ETV channels, repayment of certain loans and general corporate purposes. The Company has filed
Draft Letter of Offer dated 1 March 2012 with SEBI and necessary approval from SEBI is awaited.
46.
The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This
has significantly impacted the disclosure and presentation made in the financial statements. Figures pertaining to the
Company, subsidiary and joint venture have been reclassified wherever necessary to bring them in line with the
Group financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to
correspond with the current year's classification / disclosure.
RAGHAV BAHL
Director
Director
GURDEEP SINGH PURI
HITESH KUMAR JAIN
General Manager - Finance
Noida
4 August, 2012
AGM Corporate Affairs and Company Secretary
166
FINANCIAL STATEMENTS FOR ERSTWHILE TELEVISION EIGHTEEN
(Standalone Financials for Financial Year ended March 31, 2011)
AUDITORS’ REPORT
TO THE MEMBERS OF
TELEVISION EIGHTEEN INDIA LIMITED
1.
We have audited the attached Balance Sheet of TELEVISION EIGHTEEN INDIA LIMITED ;(“the Company”) as
at 31 March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on
that date, both annexed thereto. 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the
disclosures in the financial statements. An audit also includes assessing the accounting principles used and the
significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
3.
Attention is invited to note 7 of Schedule 15 forming part of the financial statements regarding the Scheme of
Arrangement (“the Scheme”) which has been sanctioned by the Hon’ble High Court of Delhi on 26 April, 2011. As
explained in note 7, as per the Scheme sanctioned by the Hon’ble High Court of Delhi, the effective date shall be when
the certified copies of the High Court Orders are filed with the jurisdictional Registrar of Companies, which is still
pending. No effect of the proposed restructuring has been given in these financial statements. Upon the Scheme
becoming effective, the results of operations, assets and liabilities relating to the television business of the Company
would stand transferred to ibn18 Broadcast Limited and the residual business of the Company will be merged with
4.
As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of
Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
5.
Attention is invited to Note 9 of Schedule 15 forming part of the financial statements which sets out the reasons for no
provision being made for ‘other than temporary diminution’, if any, in the value of long term investments aggregating
to Rs. 76,740 lakhs. In the absence of supporting documentation in respect of the appropriateness of the carrying
value of such long term investments, in accordance with the requirements of Accounting Standard 13 (AS-13)
Accounting for investments, we are unable to comment on this matter.
6.
Further to our comments in the paragraph 3 and Annexure referred to in 4 above, we report as follows:
a.
subject to our comments in paragraph 5 above, 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 it appears
from our examination of those books;
c.
the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in
agreement with the books of account;
d.
subject to our comments in paragraph 5 above, in our opinion, the Balance Sheet, the Profit and Loss Account
and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred
to in Section 211(3C) of the Companies Act, 1956;
e.
in our opinion and to the best of our information and according to the explanations given to us, the said accounts
give the information required by the Companies Act, 1956 in the manner so required and subject to our comments
in paragraph 5 above, the effect of which could not be determined, 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 31 March, 2011;
167
ii.
in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
7.
On the basis of the written representations received from the Directors as on 31 March, 2011 taken on record by the
Board of Directors, none of the Directors is disqualified as on 31 March, 2011 from being appointed as a director in
terms of Section 274(1) (g) of the Companies Act, 1956.
(Registration No. 015125N)
ALKA CHADHA
Partner
NOIDA, 30 May, 2011
168
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 4 of our report of even date)
i.
Having regard to the nature of the Company’s business/activities/result, clauses xii, xiii, xiv and xviii of CARO are
not applicable.
ii.
In respect of its fixed assets:
iii.
iv.
a.
The Company has maintained proper records showing full particulars, including quantitative details other than
for situation of some of its fixed assets.
b.
According to the information and explanations given to us, the Company has a regular programme of physical
verification of its fixed assets by which fixed assets are verified by the Management in a phased manner over a
period of three years. In accordance with this programme, certain fixed assets were verified during the year and
no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the Company and the nature of its assets.
c.
Having regard to Note 7 of Schedule 15 to the financial statements regarding the Scheme of Arrangement, the
fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets
of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.
In respect of its inventory:
a.
As explained to us, the inventories were physically verified during the year by the Management at reasonable
intervals.
b.
In our opinion and according to the information and explanations given to us, the procedures of physical
verification of inventories followed by the Management were reasonable and adequate in relation to the size of
the Company and the nature of its business.
c.
In our opinion and according to the information and explanations given to us, the Company has maintained
proper records of its inventories and no material discrepancies were noticed on physical verification.
In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in
the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to
us:
a.
The Company has granted loans aggregating Rs. 2,464.16 lakhs to 6 parties during the year. At the year-end,
the outstanding balances of such loan aggregated Rs. 449.79 lakhs (from 5 parties) and the maximum amount
involved during the year was Rs. 1,711.01 lakhs (from 6 parties).
b.
The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial
to the interests of the Company.
c.
As per the information and explanations given to us, the loans referred to in paragraph iv a above, being
receivable on demand, together with interest, repayments made during the year are as mutually agreed.
d.
According to the information and explanations given to us, the other terms and conditions of the loans given by
the Company are prima facie not prejudicial to the interest of the Company and there are no overdue amounts in
respect of above loans including interest thereon.
e.
In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered
in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and
explanations given to us:
i. The Company has taken loans aggregating Rs. 3,800 lakhs from 1 party during the year. At the year-end, the
outstanding balance of such loans aggregated Rs. Nil from 1 party and the maximum amount involved
during the year was Rs. 3,000 lakhs (from 1 party).
ii. The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not
prejudicial to the interests of the Company.
169
iii. As per the information and explanations given to us, the loans referred to in paragraph iv(e) above, being
payable on demand, together with interest, repayments made during the year are as mutually agreed.
v.
In our opinion, and according to the information and explanations given to us, having regard to the explanations that
some of the fixed assets purchased, goods sold and services rendered are of a special nature and suitable alternative
sources are not readily available for obtaining comparable quotations, there is an adequate internal control system
commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and
fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major
weakness in such internal control system.
vi.
In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the
Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations
given to us:
a.
the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register
maintained under the said Section have been so entered.
b.
the transactions made in pursuance of contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of any party during
the year having regard to the explanation that some of the services rendered/purchased are of a specialised
nature for which there are no alternate sources of supply to enable comparison of prices, these have been made
at prices which are reasonable to prevailing market prices as at the relevant time.
vii.
In our opinion and according to the information and explanations given to us, the Company has complied with the
provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public, except for
updating details of depositors in respect of public deposits aggregating to Rs. 74 lakhs in the Register of Deposits
(required to be maintained in terms of Section 58 A of the Companies Act, 1956) pending receipt of application
forms. According to the information and explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.
viii.
The Company’s internal audit is carried out by a firm of Chartered Accountants appointed by the management. The
coverage of the internal audit will need to be extended to make it commensurate with the size of the Company and
the nature of its business.
ix.
According to the information and explanations given to us, the Central Government has not prescribed the
maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the Company.
x.
According to the information and explanations given to us in respect of statutory dues:
a.
The Company has generally been regular in depositing undisputed dues including Provident Fund, Investor
Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax,
Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. We are
informed that the Company’s operations did not give rise to any Excise Duty.
b.
There are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund,
Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, Customs Duty, Cess and other
material statutory dues in arrears as at 31 March, 2011 for a period of more than six months from the date they
became payable. We are informed that the Company’s operations did not give rise to any Excise Duty.
c.
Details of dues of Income Tax that have not been deposited on account of disputes are as follows:
Statute
Nature of Dues
Income Tax Act, 1961
Transfer Pricing
Income Tax Act, 1961
Transfer Pricing
Forum where the
dispute is pending
Income Tax Appellate
Tribunal
Commissioner of
Period to which
the amount
relates
2001-02
2002-03
Amount
Involved
(Rs.)
2,474,434
51,614
There are no dues in respect of Wealth Tax, Sales Tax, Customs Duty, Service Tax and Cess which have not
been deposited on account of any dispute. We are informed that the Company’s operations did not give rise to
any Excise Duty.
170
xi.
The Company does not have any accumulated losses as at the year end and the Company has not incurred cash
losses in the financial year and in the immediately preceding financial year.
xii.
In our opinion and according to the information and explanations given to us, the Company has not defaulted in the
repayment of dues to banks and financial institutions. According to the information and explanations given to us, the
Company did not have any outstanding debentures during the year.
xiii.
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 and financial institutions are not prima facie
prejudicial to the interests of the Company.
xiv.
According to the information and explanations given to us, other than for term loans aggregating to Rs. 1,207.44
lakhs at the year end, which as stated in Note 5 of Schedule 15 to the financial statements are yet to be utilised for
the purpose for which these were obtained, in our opinion, other term loans have been applied for the purpose(s) for
which they were obtained.
xv.
In our opinion and according to the information and explanations given to us and on an overall examination of the
Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term
investment.
xvi.
According to the information and explanations given to us, the Company had not issued any debentures during the
period covered by our audit report.
xvii. The Management has disclosed the end use of money raised by rights issues and we have verified the same.
xviii. To the best of our knowledge and according to the information and explanations given to us, no fraud by the
Company and no fraud on the Company has been noticed or reported during the year.
(Registration No. 015125N)
ALKA CHADHA
Partner
NOIDA, 30 May, 2011
171
BALANCE SHEET AS AT 31 MARCH, 2011
Schedule
Reference
SOURCES OF FUNDS (see note 7)
1. SHAREHOLDERS' FUNDS
a.
Share capital
b.
Share application money pending allotment
b.
Employee stock options outstanding
c.
Reserves and surplus
2. LOAN FUNDS
a.
Secured loans
b.
Unsecured loans
1
2
3
4
5
APPLICATION OF FUNDS (see note 7)
3. FIXED ASSETS
a.
Gross block
b.
Less: Depreciation
c.
Net block
d.
Capital work in progress
4.
5.
6.
7.
8.
As at
31.03.2011
(In Rs.)
As at
31.03.2010
909,855,248
3,609,879
41,763,170
9,563,380,435
900,846,371
148,222,103
8,910,511,463
2,045,340,279
4,112,076,452
16,676,025,463
2,373,854,177
5,720,949,795
18,054,383,909
1,717,940,456
1,092,877,229
625,063,227
3,495,108
628,558,335
9,787,870,456
25,207,482
1,668,495,333
938,984,190
729,511,143
1,561,590
731,072,733
12,198,933,494
74,559,830
3,717,669
1,661,082,597
538,519,648
5,508,096,688
7,711,416,602
3,520,911
1,329,431,035
40,462,513
2,254,369,153
2,906,772,839
6,534,556,451
1,422,572,399
54,455,013
1,477,027,412
6,234,389,190
16,676,025,463
1,443,832,725
40,905,874
1,484,738,599
5,049,817,852
18,054,383,909
6
INVESTMENTS
DEFERRED TAX ASSETS (see note 11)
CURRENT ASSETS, LOANS AND ADVANCES
a.
Inventories
b.
Sundry debtors
c.
Unbilled revenues
d.
Cash and bank balances
e.
Loans and advances
7
LESS: CURRENT LIABILITIES AND PROVISIONS
a.
Current liabilities
b.
Provisions
9
8
NET CURRENT ASSETS
Notes forming part of the accounts
15
*The above schedules form an integral part of the Balance Sheet
ALKA CHADHA
Partner
Noida
30 May, 2011
Raghav Bahl
Managing Director
R.D.S. Bawa
Noida
30 May, 2011
172
Whole Time Director
Anil Srivastava
Senior VP - Corporate Affairs
& Company Secretary
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2011
Year ended
31.03.2011
(In Rs.)
Year ended
31.03.2010
10
11
3,025,347,176
825,813,961
3,851,161,137
2,769,071,995
630,866,547
3,399,938,542
12
13
14
1,605,677,535
598,921,471
840,109,859
158,708,982
3,203,417,847
647,743,290
647,743,290
1,835,618,864
575,093,604
1,091,769,568
171,880,641
3,674,362,677
(274,424,135)
231,260
(274,192,875)
145,828,426
49,352,348
145,778
195,326,552
452,416,738
74,453,697
526,870,435
50,415,151
147,374
50,562,525
(324,755,400)
399,209,097
74,453,697
2.47
2.46
(2.45)
(2.45)
Schedule
Reference*
1.
2.
3.
4.
INCOME
a.
Income from operations
b.
Other income
EXPENDITURE
a.
Production, administrative and other costs
b.
Personnel expenses
c.
Interest and other financial charges
d.
Depreciation
Profit/(Loss) before tax and prior period adjustments
Prior period adjustments (net) (see note 17)
Profit/(Loss) before taxation (see note 7)
Provision for taxes
a.
Current income tax
b.
Deferred tax (see note 11)
c.
Wealth tax
5.
6.
Profit/(Loss) for the year (see note 7)
Profit and loss account balance brought forward
Balance carried to Reserves and Surplus
Earnings per equity share (see note 13)
(Face value of Rs. 5 per share)
Basic
Diluted
Notes forming part of the accounts
15
*The above schedules form an integral part of the Profit and Loss Account
ALKA CHADHA
Partner
Noida
30 May, 2011
Raghav Bahl
Managing Director
R.D.S. Bawa
Noida
30 May, 2011
173
Whole Time Director
Anil Srivastava
& Company Secretary
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2011
A. CASH FLOW FROM OPERATING ACTIVITIES (see note 7)
Year ended
31.03.2011
647,743,290
Year ended
31.03.2010
(274,192,875)
Depreciation
Loss/(profit) on sale/disposal of assets
Provision for diminution in value of long term investments
Employee stock compensation expenses
Interest and other financial charges
Bad debts written off/ provision for doubtful debts
158,708,982
(6,681,986)
12,946,994
840,109,859
16,000,000
171,880,641
1,658,531
10,250,000
23,904,325
1,091,769,568
57,500,000
Advance written off/ Provision for doubtful advances
Unrealised Loss on exchange rate fluctuation (net of gain)
Profit on sale of current investments
Excess provisions/ liabilities written back
5,371,895
4,475,607
(100,000)
(66,128,689)
(44,215,591)
26,499,082
23,649,554
(55,218)
(387,154)
(30,872,686)
(822,705)
(222,000,000)
(486,687,695)
859,542,666
(217,400,000)
(379,320,574)
(231,260)
503,829,229
(1,739,907,852)
(74,272,914)
(256,574,551)
(127,445,133)
(954,638,100)
(52,250,936)
-
119,809,545
(152,239,607)
231,260
(1,006,889,036)
(32,198,802)
(70,716,861)
21,204,263
(28,678,352)
1,349,402
30,000,000
345,600,000
-
8,163,101,723
8,627,014,180
Profit/(loss) before tax
Adjustments for:
Share in surplus of trust
Interest income
Prior period adjustments (net)
Adjustments for:
Decrease/(Increase) in current assets
Increase/(Decrease) in current liabilities
Cash generated from/(used in) operations
Tax on operational income (net of refund)
Prior period adjustments(net)
Net cash from/(used in) operating activities
B. CASH FLOW FROM INVESTING ACTIVITIES (see note 7)
Purchase of fixed assets (including capital advances)
Sale of long term investments
- in other companies
- in venture capital trust (units redeemed)
Sale of current investments
- in mutual funds
Purchase of long term investments:
- in subsidiaries (equity and preference shares)
- in venture capital trust
Purchase of current investments:
- in mutual funds
Application money paid for debentures
(510,000)
-
(743,898,113)
(239,350,000)
(6,061,000,000)
(90,800,000)
(10,356,240,798)
Loan to subsidiaries
Interest received
(1,155,575,417)
457,755,298
(49,354,547)
391,735,042
174
A. CASH FLOW FROM OPERATING ACTIVITIES (see note 7)
Dividend received on long term investments
Share in surplus of trust
Net cash from/(used in) investing activities
C. CASH FLOW FROM FINANCING ACTIVITIES (see note 7)
Interest paid
Year ended
31.03.2011
100,000
222,000,000
Year ended
31.03.2010
387,154
217,400,000
1,861,159,006
(2,179,636,032)
(725,002,372)
(1,124,904,208)
Share issue expenses for proposed rights issue
Proceeds from issue of equity shares / share application money (net)
Proceeds / (Payment) of loans
Net cash from/(used in) financing activities
92,270,138
(1,937,387,241)
(122,305,065)
4,954,268,724
(608,233,734)
(2,570,119,475)
3,098,825,717
Net increase/(decrease) in cash and cash equivalents
(1,715,849,505)
2,254,369,153
886,990,883
1,367,378,270
538,519,648
2,254,369,153
251,557,626
277,774,761
Note:
Cash and cash equivalents as at 31 March, 2011 include restricted cash
ALKA CHADHA
Partner
Noida
30 May, 2011
Raghav Bahl
Managing Director
R.D.S. Bawa
Noida
30 May, 2011
175
Whole Time Director
Anil Srivastava
& Company Secretary
SCHEDULES FORMING PART OF THE ACCOUNTS
SCHEDULE 1
As at
31.03.2011
(Rs.)
SHARE CAPITAL
(See note 4)
AUTHORISED:
410,000,000 (Previous year 410,000,000) equity shares of Rs. 5
each
2,050,000,000
As at
31.03.2010
(Rs.)
2,050,000,000
2,050,000,000
2,050,000,000
ISSUED, SUBSCRIBED AND PAID UP:
911,962,070
906,866,150
each fully paid up*
Less: Calls in arrears
2,106,822
6,019,779
Total paid up share capital
909,855,248
900,846,371
Of the above:
a. 23,113,829 (Previous year 23,113,829) equity shares of Rs. 5 each have been alloted as fully paid up without payments
being received in cash
b. 62,022,906 (Previous year 62,022,906) equity shares of Rs. 5 each have been alloted as fully paid up as bonus shares by
capitalizing securities premium
* 84,028,954 (Previous year 84,028,954) equity shares of Rs. 5 each are held by Network18 Media & Investments Limited,
the holding company and 5,100,000 (Previous year 5,100,000) equity shares held by network18 India Holdings Private
Limited, a wholly owned subsidiary of holding company
SCHEDULE 2
As at
31.03.2011
(Rs.)
EMPLOYEE STOCK OPTIONS OUTSTANDING
a. Employee stock options outstanding
b. Less: Deferred employee compensation
c. Net balance
62,606,670
20,843,500
41,763,170
SCHEDULE 3
As at
31.03.2011
(Rs.)
RESERVES AND SURPLUS
1. Securities premium
a. Opening balance
b. Add: Amounts received pursuant to issue of equity shares
c. Less: Utilisation for right issue expenses
d. Closing balance
185,420,982
37,198,879
148,222,103
As at
31.03.2010
(Rs.)
8,694,089,790
3,992,677,843
4,752,493,148
162,958,402
8,582,212,589
2. General reserve
a. Opening balance
b. Add: Transfer from ESOP outstanding account
c. Closing balance
58,825,177
88,575,033
147,400,210
58,825,177
58,825,177
3. Capital reserve
195,020,000
195,020,000
526,870,435
9,563,380,435
74,453,697
8,910,511,463
4. Profit and loss account
176
8,582,212,589
111,877,201
As at
31.03.2010
(Rs.)
SCHEDULE 4
As at
31.03.2011
(Rs.)
SECURED LOANS
a.
Loans from banks (see note 5)
i. Cash credit
ii. Term loans *
iii. Working capital demand loan
iv. Other loans
b. Term loans from others * (see note 5)
280,310,295
632,292,672
493,806,875
5,930,437
633,000,000
2,045,340,279
498,984,000
* Term loans repayable within one year
SCHEDULE 5
As at
31.03.2011
(Rs.)
UNSECURED LOANS
a.
Public deposits (see note 1i. below)
b.
Other loans (see note 1ii. below)
i.
from banks
ii.
from others
c.
Commercial paper (see note 1iii. and 2 below)
i.
from others
Notes:
1. Repayable within one year
i.
Public deposits
ii.
Other loans
- from banks
- from others
iii.
Commercial paper
- from others
2. Maximum amount of commercial paper raised during the year
177
As at
31.03.2010
(Rs.)
782,929
1,089,050,282
497,797,525
9,603,412
776,620,029
2,373,854,177
608,475,000
As at
31.03.2010
(Rs.)
2,062,076,452
1,770,733,557
50,000,000
2,250,216,238
-
2,000,000,000
4,112,076,452
1,700,000,000
5,720,949,795
1,264,652,000
772,224,870
50,000,000
2,250,000,000
-
2,000,000,000
2,000,000,000
1,700,000,000
2,000,000,000
As at
01.04.2010
20,498,422
139,496,848 3,800,942
1,668,495,333 68,783,343
1,649,760,248 29,527,941
1,561,590 1,933,518
1,670,056,923 70,716,861
1,652,171,427 29,527,941
Intangible
News archives
Computer software
Total
Previous year
Capital work in progress
Grand total
Previous year
As at
31.03.2011
As at
01.04.2010
178
19,338,220 1,721,435,564 938,984,190 158,708,982
11,642,445 1,670,056,923 774,888,472 171,880,641
20,498,422 12,249,229
973,684
- 143,297,790 118,087,798 10,097,779
19,338,220 1,717,940,456 938,984,190 158,708,982
10,792,856 1,668,495,333 774,888,472 171,880,641
3,495,108
-
216,200
79,899,345 23,048,557
842,343,227 545,856,229
14,062,294 10,169,127
15,163,873 23,385,392
4,815,943 1,092,877,229 628,558,335
7,784,923 938,984,190 731,072,733
731,072,733
877,282,955
8,249,193
21,409,050
729,511,143
874,871,776
1,561,590
216,200
38,656,196
12,412,255
609,714,475
11,038,436
27,815,338
(all amount in Rupees)
NETBLOCK
As at
As at
As at
31.03.2011 31.03.2011
31.03.2010
13,222,913
7,275,509
- 128,185,577 15,112,213
4,815,943 1,092,877,229 625,063,227
7,784,923 938,984,190 729,511,143
3,495,108
1,141,743
3,674,200
-
DEPRICIATION
For the
Sale/
year adjustments
216,200
102,947,902 64,291,706 15,607,639
1,050,957
90,786
1,388,199,456 715,146,837 127,196,390
24,231,421 13,029,568
1,032,726
5,875,008
38,549,265 15,128,095
3,709,978
13,463,212
GROSS BLOCK
Additions
Sales/
during adjustments
the year
Tangible
Freehold land
216,200
Leasehold improvements
102,947,902
Building
13,463,212
Plant & machinery
1,324,861,312 63,338,144
Furniture & fixtures
24,068,004
163,417
Vehicles
42,943,433 1,480,840
Particulars
FIXED ASSETS
SCHEDULE 6
SCHEDULE 7
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
INVESTMENTS
[Other than trade, (see note 6 and 9)]
A.
B.
Quoted - Long term in equity shares - at cost (see note 8 and 9)
a. of subsidiary companies
23,913,061 (Previous year 23,913,061) equity shares of
Rs.10 each fully
paid up in Infomedia 18 Limited (formerly Infomedia India
Limited)
b.
of other companies
474,308 (Previous year 592,885) equity shares Rs. 4 each
fully paid up in KSL and Industries Limited
275,000 (Previous year 275,000) equity shares of Rs. 10
each fully paid up in Refex Refrigerants Limited
500,000 (Previous year 500,000) equity shares of Rs. 2 each
fully paid up in Provouge (India) Limited
Aggregate of quoted - long term investments in equity
shares
Quoted - Current investments in units of mutual funds - at
lower of cost or fair value
Nil (Previous year 7,166,121 ) units of Rs. 10 each in Birla
Sun Life Mutual Fund
Nil (Previous year 3,386,717) units of Rs. 10 each in Deutche
Mutual Fund
Nil (Previous year 129,336) units of Rs. 1,000 each in DSP
BlackRock Liquidity Fund
Nil (Previous year 16,127,556 ) units of Rs. 10 each in
Fidelity Mutual Fund
Nil (Previous year 2,090,881) units of Rs. 10 each in HDFC
Mutual Fund
Nil (Previous year 9,625,239) units of Rs. 10 each in IDFC
Mutual Fund
Nil (Previous year 8,814,641) units of Rs. 10 each in JM
Financial Mutual Fund
Nil (Previous year 14,126,337) units of Rs. 10 each in Kotak
Mutual Fund
273,500 (Previous year Nil) units of Rs. 100 each in ICICI
Prudential Mutual Fund
Nil (Previous year 11,986,479) units of Rs. 10 each in
Religare Mutual Fund
Nil (Previous year 7,961,609) units of Rs. 10 each in
Reliance Mutual Fund
Nil (Previous year 10,388,243) units of Rs. 10 each in SBI
Mutual Fund
Nil (Previous year 55,935 ) units of Rs. 1,000 each in Tata
Mutual Fund
Nil (Previous year 126,551) units of Rs. 1,000 each in Taurus
Mutual Fund
179
2,461,895,030
2,461,895,030
119,999,905
149,999,905
55,000,000
55,000,000
110,000,000
110,000,000
2,746,894,935
2,776,894,935
-
104,694,395
-
48,959,397
-
170,000,000
-
190,074,531
-
40,168,969
-
107,051,007
-
126,000,000
-
259,541,604
50,000,000
-
-
150,000,000
-
110,153,637
-
150,000,000
-
94,829,498
-
134,500,000
SCHEDULE 7
C.
a
As at
31.03.2011
(Rs.)
Nil (Previous year 265,048) units of Rs. 1,000 each in UTI
Mutual Fund
Aggregate of quoted - current investment in units of mutual
funds
Includes unutilised money of:
-
As at
31.03.2010
(Rs.)
400,000,000
50,000,000
2,085,973,038
- Rights issue
28,193,849
2,085,973,038
160,631,581
160,631,581
60,000,000
59,490,000
133,543,900
133,543,900
100,000
100,000
3,996,790
3,996,790
62,895,000
62,895,000
60,000,000
60,000,000
60,000,000
60,000,000
541,167,271
540,657,271
533,070,000
533,070,000
2,010,338,250
2,010,338,250
2,543,408,250
2,543,408,250
2,375,600,000
2,721,200,000
1,530,800,000
1,530,800,000
1,530,800,000
1,530,800,000
Unquoted - Long term in equity shares - at cost
of subsidiary companies
12,295,000 (Previous year 12,295,000) equity shares of USD
1 each fully paid up in Television Eighteen Mauritius Limited
30,000,000 (Previous year 5,949,000 of Rs. 10 each) equity
shares of Rs. 2 each fully paid up in iNews.com Limited
(Previous year Rs.10) each fully paid up in Newswire18
Limited (formerly News Wire 18 India Private Limited)
20,000 (Previous year 10,000 of Rs. 10 each) equity shares of
Rs. 5 each fully paid up in RVT Investments Private Limited
100,001 (Previous year 100,001) equity shares of USD 1 each
fully paid up in Television Eighteen Media and Investment
Limited
b
of other companies
fully paid up in Delhi Stock Exchange Association Limited
fully paid up in Jagran 18 Publications Limited
Less: Provision for diminution in value of investment
3,192 (Previous year 3,192) equity shares of Rs. 10 each fully
paid up in Skorydove Systems Private Limited
fully paid up in Ensemble Infrastructure India Limited
Aggregate of unquoted - long term investments in equity shares
D.
Unquoted - Long term in preference shares - at cost
of subsidiary companies
613,500 (Previous year 613,500) preference shares of Rs. 10
each fully paid up in RVT Investments Private Limited
49,118,691 (Previous year 49,118,691) preference shares of
USD 1 fully paid up in Television Eighteen Media and
Investment Limited
Aggregate of unquoted - long term investment in preference
shares
E.
Unquoted - Long term in units of venture capital trust - at cost
23,756 (Previous year 27,212) units of Rs. 100,000 each in
Media Venture Capital Trust - II
F.
Unquoted - Long term in debentures - at cost
1,530,800 (Previous year 1,530,800) 0.01% optionally
redeemable fully convertible debentures of Rs. 1,000 each fully
paid up in RVT Investments Private Limited
180
10,250,000
(10,250,000)
SCHEDULE 7
As at
31.03.2011
(Rs.)
9,787,870,456
6,990,975,521
2,796,894,935
529,223,749
Aggregate of unquoted investments
Aggregate of quoted investments
Market value of quoted investments (also see note 9)
181
As at
31.03.2010
(Rs.)
12,198,933,494
7,336,065,521
4,862,867,973
2,843,618,792
SCHEDULE 8
As at
31.03.2011
(Rs.)
CURRENT ASSETS, LOANS & ADVANCES
a. Inventories
Tapes
b.
As at
31.03.2010
(Rs.)
3,717,669
3,520,911
Sundry debtors (Unsecured)
Debts outstanding for more than 6 months
- considered good
- considered doubtful
Other debts - considered good
657,830,913
73,852,570
1,003,251,684
466,770,036
98,337,013
862,660,999
Less: Provision for doubtful debtors
1,734,935,167
73,852,570
1,427,768,048
98,337,013
1,661,082,597
1,329,431,035
* Includes due from companies under the same management within the meaning of erstwhile sub section
(1B) of section370 of the Companies Act, 1956:
ibn18 Broadcast Limited (formerly Global Broadcast News
11,461,866
Limited)
6,881,062
6,943,958
6,881,062
18,405,824
Maximum amount outstanding during the year from companies under
the same management within the meaning of erstwhile sub section1B)
of Section 370 of the Companies Act, 1956:
45,345,963
85,857,381
Limited)
12,152,854
38,540,749
c.
d.
Unbilled revenues
Cash on hand
Cheques in hand
Balance with scheduled banks:
-
40,462,513
722,985
15,379,132
625,363
11,229,476
- in current accounts*
296,619,245
1,986,268,064
- in deposit accounts**
225,798,286
256,246,250
538,519,648
2,254,369,153
25,759,340
23,106,227
194,549,215
142,566,799
31,249,071
112,101,735
90,800,000
2,723,381,033
30,479,813
2,309,533,777
1,567,805,616
25,057,563
849,031,740
*
a.
**
a.
b.
e.
Includes:
Balance in unclaimed dividend account, unclaimed interest
account and due to debenture holders.
Includes:
Amount held as per Rule 3A of Companies (Acceptance of
deposits) Rules, 1975
Under lien with banks
Loans and advances
i. Application money paid for debentures
ii. Amounts due from subsidiaries
iii. Advance to vendors *
iv. Advances recoverable in cash or in kind or for value to be
182
SCHEDULE 8
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
received**
v.
vi.
vii.
Security and other deposits
Interest accrued on deposits
Income tax paid [net of provision Rs. 393,996,069 (Previous
year Rs.248,167,643)]
*
Refunded subsequent to the year end
*
**
Includes capital advances
Includes due from companies under the same management
within the meaning of erstwhile Sub Section (1B) of section
370 of
the Companies Act, 1956:
Limited)
Setpro 18 Distribution Limited
Maximum amount outstanding during the year from companies under
the same management within the meaning of erstwhile sub
section(1B) of section 370 of the Companies Act, 1956:
Limited)
SCHEDULE 9
97,570,112
29,008,443
227,323,510
94,086,938
3,146,940
367,644,042
5,508,096,688
-
2,906,772,839
-
23,079,292
6,669,241
4,639,757
14,979,525
27,186,108
52,064
19,671,346
27,186,108
57,200,166
72,038,934
194,450,411
190,482,923
1,424,294
-
As at
31.03.2011
(Rs.)
CURRENT LIABILITIES AND PROVISIONS
a.
Current liabilities
i.
Sundry creditors
- micro and small enterprises (see note 26)
- others
ii.
Due to subsidiary companies
iii Advance from customers
iv
Investor Education and Protection Fund
- unclaimed dividend
- unclaimed debenture redemption money
- unclaimed interest and matured public deposits
v.
Other liabilities*
vi
Interest accrued but not due
577,303,166
73,547,497
01,303,519
771,498,369
63,152,093
447,875,453
1,010,155
575,513
43,908,493
202,975,168
121,948,888
1,422,572,399
1,013,241
602,961
88,883,915
63,965,292
6,841,401
1,443,832,725
3,827,152
3,827,152
144,094
133,985
*
b.
includes amounts refundable of Rs. Nil (Previous year Rs.
4,465,819) pertaining to Rights issue
Provisions
i.
Fringe benefit tax [net of advance tax Rs. 39,031,036
(Previous year Rs.43,164,036)]
ii.
Wealth tax [net of advance tax of Rs. 1,655,367 ( Previous
year
As at
31.03.2010
(Rs.)
183
SCHEDULE 9
iii.
As at
31.03.2011
(Rs.)
Rs. 1,519,698)]
Employees benefits (see note 12)
SCHEDULE 10
INCOME FROM OPERATIONS
a.
Income from media operations
b.
Equipment rentals and other receipts
SCHEDULE 11
OTHER INCOME
a.
Interest on
- loans to subsidiaries [including tax deducted at source Rs.
23,962,635
- fixed deposits [including tax deducted at source Rs. 1,239,716
- others [including tax deducted at source Rs. 18,313,739
(Previous year Rs. 2,222,243)]
b.
c.
d.
f.
Profit on sale / disposal of assets
f.
Share in surplus of trust (see note 22)
g.
Excess provision/ liabilities written back
h.
Miscellaneous income
SCHEDULE 12
PRODUCTION, ADMINISTRATIVE AND OTHER COSTS
a.
b.
c.
Tapes consumed
d.
Airtime purchased
e.
Content and franchise expenses
f.
g.
Consumables and spares
h.
i.
Rent
j.
k.
Insurance
l.
m.
n.
o.
p.
Membership and subscription
184
As at
31.03.2010
(Rs.)
50,483,767
54,455,013
1,477,027,412
36,944,737
40,905,874
1,484,738,599
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
2,832,922,025
192,425,151
3,025,347,176
2,583,033,825
186,038,170
2,769,071,995
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
249,115,508
310,050,117
12,710,468
38,620,821
224,861,719
30,649,636
100,000
66,128,689
6,681,986
222,000,000
44,215,591
825,813,961
55,218
387,154
30,872,686
217,400,000
822,705
2,008,210
630,866,547
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
27,839,447
29,574,762
3,552,181
21,363,175
198,989,452
113,842,782
1,923,088
4,952,621
72,715,315
22,645,178
3,928,007
114,165,879
28,553,538
28,422,432
758,869,608
1,098,723
41,372,012
27,620,543
4,393,254
11,623,282
206,089,225
122,637,890
1,932,269
3,931,335
76,775,394
22,403,533
3,335,906
110,716,886
34,225,517
55,614,584
789,048,651
1,368,906
SCHEDULE 12
q.
r.
s.
t.
u.
v.
w.
x.
y.
- plant & machinery
- others
Legal and professional expenses
Loss on sale / disposal of assets
Loss on exchange rate fluctuation (net of gain)
Bad debts written off / provision for doubtful debts
Advances written off/ Provision for doubtful advances
Provision for diminution in value of investments
SCHEDULE 13
PERSONNEL EXPENSES
a.
Salaries and bonus*
b.
Contribution to provident fund and other funds
c.
d.
Employee stock compensation expenses
*
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
52,756,559
23,783,478
49,470,827
235,000
6,573,349
16,000,000
5,371,895
19,050,239
1,605,677,535
40,323,749
19,981,587
34,323,522
412,000
1,658,531
108,373,430
57,500,000
26,499,082
10,250,000
23,207,776
1,835,618,864
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
511,565,848
28,890,130
45,518,499
12,946,994
598,921,471
473,552,482
30,368,347
47,268,450
23,904,325
575,093,604
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
400,176,921
27,591,122
223,103,483
21,063,781
86,099,548
3,630,073
78,444,931
840,109,859
625,767,657
67,326,813
163,462,369
10,513,390
142,376,041
4,319,536
78,003,762
1,091,769,568
Includes employees benefits
SCHEDULE 14
INTEREST AND OTHER FINANCIAL CHARGES
a.
Interest on:
- term loans
- cash credit
- public deposits
- working capital demand loan
- commercial paper
- others
b.
Other financial charges
SCHEDULE 15
NOTES FORMING PART OF THE ACCOUNTS
1.
The financial statements are prepared under the historical cost convention on the accrual basis of
accounting and in accordance with the Generally Accepted Accounting Principles (GAAP) in India and
comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules,
2006 to the extent applicable and in accordance with the provisions of the Companies Act, 1956 as
adopted consistently by the Company.
The significant accounting policies adopted in the presentation of the financial statements are:
a.
Use of estimates
185
The preparation of financial statements in conformity with Generally Accepted Accounting
Principles (GAAP) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of
the financial statements and the reporting amounts of income and expenses during the year.
Examples of such estimates include provision for doubtful debts, future obligations under
employee retirement benefit plans, income taxes, and useful life of fixed and intangible assets.
Actual results could differ from these estimates. Any revision to accounting estimates is
recognised prospectively in the current and future periods.
b.
Revenue Recognition
i.
Income from media operations includes:
¾
ii.
Advertisement revenue comprising:

Revenue from sponsorship contracts, which is recognised proportionately over the
term of the sponsorship.
¾
Subscription revenue which is recognised on accrual basis in accordance with the terms of
the contract with the distribution and collection agency, for the services rendered.
¾
Program revenue which is accounted for on dispatch of programs to customers in
accordance with contractual commitments.
Revenue from media related professional and consultancy services is recognised in
accordance with contracts on rendering of services.
iii. Equipment rental is accounted for on the accrual basis for the period of use of equipment by
the customers.
iv. Dividend income on investments is accounted for when the right to receive dividend income is
established.
v.
c.
Interest income is recognised on time proportionate basis taking into account the amount
Fixed Assets
Fixed assets are stated at their original cost of acquisition/installation less depreciation. All direct
expenses attributable to acquisition/installation of assets are capitalised.
d.
Depreciation
Depreciation on all assets other than improvement to leasehold properties, computer software and
plant & machinery-distribution equipment is charged on straight line basis over the estimated
useful lives using rates (including double/ triple shift depreciation rates wherever applicable)
prescribed by Schedule XIV of the Companies Act, 1956.
Cost of improvements to leasehold premises is being amortised over the remaining period of lease
(including renewal options) of the premises. Computer software and Plant & machinerydistribution equipment are being depreciated over a period of 5 years and 8 years respectively.
These rates are higher than those prescribed in Schedule XIV of the Companies Act, 1956.
News archives are depreciated on straight line basis at the rate of 4.75% per annum. Useful life of
news archives is estimated to be more than 10 years as the contents of the same are continuously
used in day to day programming and hence the economic benefits from the same arise for a period
186
longer than 10 years.
Depreciation on additions is charged proportionately from the date of acquisition/ installation.
Assets costing Rs. 5,000 or less individually are fully depreciated in the year of purchase.
e.
Impairment of Assets
At each balance sheet date, the Company reviews the carrying amounts of its assets to determine
whether there is any indication that those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the assets is estimated in order to determine the extent of
impairment loss.
Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing value
in use, the estimated future cash flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount rate that reflects the current
market assessments of time value of money and the risks specific to the asset.
Reversal of impairment loss is recognised immediately as income in the profit and loss account.
f.
Investments
Long term investments are stated at cost less provision for other than temporary diminution in the
carrying value of each investment. Current investments are carried forward at lower of cost or fair
value.
g.
Inventory Valuation
Inventories comprise stocks of used and unused tapes, compact discs, work-in-progress and
completed pilot programmes and are stated at cost on first in first out basis. Stocks of tapes are
written off over their useful life which is estimated to be three years.
h.
Foreign Currency Transactions
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the
transaction. Exchange differences on foreign exchange transactions settled during the period are
recognised in the profit and loss account.
Monetary items denominated in foreign currency and outstanding at the balance sheet date are
translated at the exchange rate prevailing at the date of balance sheet, the resultant exchange
differences are recognised in the profit and loss account.
In case of forward exchange contracts, the premium or discount arising at the inception of such
contract, is amortised as income or expense over the life of contract as well as exchange difference
on such contracts i.e. difference between the exchange rate at the reporting/ settlement date and
the exchange rate on the date of inception/ last reporting date, is recognised as income/ expense
for the period. Any income or expenses on account of exchange difference either on settlement of
the contract or on translation of unmatured foreign currency contract at the rate prevailing on the
date of balance sheet is recognised in the profit and loss account.
i.
Employee Benefits
i.
The Company’s employees’ provident fund scheme is a defined contribution plan. The
Company’s contribution to the employees' provident fund is charged to the profit and loss
account during the period in which the employee renders the related service.
ii.
Short term employee benefits (medical, leave travel allowance etc.) expected to be paid in
exchange for the services rendered are recognised on undiscounted basis.
iii.
The Company provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”)
covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the
187
Gratuity Plan provides for a lump sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the respective
employee’s salary and the tenure of employment.
The Company makes contributions to funds administered and managed by the insurance
companies for the amount notified by the said insurance companies. The present value of the
obligation under such defined benefit plan is determined based on actuarial valuation using
the projected unit credit method, which recognises each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit separately to build up
the final obligation. The obligation is measured at the present value of the estimated future
cash flows. The discount rate used for determining the present value of the obligation is
based on the market yields on government securities as at the balance sheet date. Actuarial
gains/losses are recognised immediately in the profit and loss account.
The liability with respect to the Gratuity Plan is determined based on actuarial valuation done
by an independent actuary at the period end and any differential between the fund amount as
per the insurer and the actuarial valuation is charged to revenue.
iv.
j.
Benefits comprising long term compensated absences constitute other long term employee
benefits. The liability for compensated absences is provided on the basis of an actuarial
valuation done by an independent actuary at the period end. Actuarial gains and losses are
recognised immediately in the profit and loss account.
Income Tax
Income tax comprises current tax, deferred tax. Current tax is determined in accordance with the
provisions of Income Tax Act, 1961. Advance taxes and provisions for current taxes are presented
in the balance sheet after off - setting advance taxes paid and income tax provisions.
Deferred tax charge or credit is recognised on timing differences being the difference between
taxable income and accounting income that originate in one period and are capable of reversal,
subject to consideration of prudence, in one or more subsequent periods. Deferred tax assets and
liabilities are measured using the tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax assets on unabsorbed depreciation and carry forward of losses are not recognised
unless there is a virtual certainty that there will be sufficient future taxable income available to
realise such assets.
Minimum alternate tax (MAT) paid in accordance with Income Tax Act, 1961, which gives rise to
future economic benefit in the form of adjustment from income tax liability, is recognised when it
is reasonably certain that the Company will be able to set off the same and adjust it from the
current tax charge for that year.
k.
Earnings Per Share
The Company reports basic and diluted earnings per equity share in accordance with Accounting
Standard 20, Earnings Per Share. Basic earnings per equity share is computed by dividing net
profit after tax by the weighted average number of equity shares outstanding during the year.
Diluted earnings per equity share is computed using the weighted average number of equity shares
and dilutive potential equity shares outstanding during the year except where the result would be
anti-dilutive.
l.
Accounting for Employee Share Based Payments
Measurement and disclosure of the employee share based payment plans is done in accordance
with the Guidance Note on Accounting for Employee Share-based Payments, issued by the
Institute of Chartered Accountants of India (ICAI). The Company measures compensation cost
relating to employee stock options using the intrinsic value method. Compensation expense is
amortised on a straight line basis/graded basis over the vesting period of the stock option/award.
188
Modifications to stock option/award schemes are effected in line with the Guidance Note on
Accounting for Employee Share-based Payments, issued by ICAI.
m. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as a result of a past event,
when it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and reliable estimate can be made of the amount of the obligation. A
contingent liability is recognised where there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources.
n. Leases
i.
Operating Lease
of the leased asset are classified as operating leases. Operating lease charges are recognised as
an expense in the profit and loss account on a straight-line basis over the lease term.
ii.
Finance Lease
Leases under which the Company assumes substantially all the risks and rewards of ownership
are classified as finance leases. The lower of fair value of assets and present value of
minimum lease rentals is capitalised as fixed assets with the corresponding amount shown as
lease liability. The principal component in the lease rentals is adjusted against the lease
liability and the interest component is charged to the profit and loss account.
o.
Segment Information
i.
Business Segments
Based on similarity of activities, risks and reward structure, organisation structure and internal
reporting systems, the Company operates in the media business segment mainly comprising
media and related operations. This includes television, internet and print media including
publishing.
ii.
Geographic Segments
Secondary segmental reporting is performed on the basis of the geographical location of
customers i.e. within India and overseas.
p.
Barter Transactions
Barter transactions are recognised at the fair value of consideration receivable or payable. When
the fair value of the transactions cannot be measured reliably, the revenue/expense is measured at
the fair value of the goods/services provided/received adjusted by the amount of cash or cash
equivalent transferred.
q.
Derivative Instruments
As per the Institute of Chartered Accountants of India announcement on derivative accounting,
accounting for derivative contracts other than those covered under Accounting Standard 11 (AS11) – The Effects of Changes in Foreign Exchange Rates, are marked to market on a portfolio
basis and the net loss after considering the offsetting impact on the underlying hedged item is
charged to the profit and loss account. Net gains are ignored.
2.
Capital commitments, contingent liabilities and litigation
a.
Estimated amounts of contracts remaining to be executed on capital account (net of advances) Rs.
0.83 million (Previous year Rs. 2.34 million).
189
b.
Claims against the Company not acknowledged as debts include demands raised by Income Tax
authorities Rs. 84.93 million (Previous year Rs. 84.93 million). Amounts deposited by the
Company against these claims – Rs. 82.41 million (Previous year Rs. 82.41 million). No
provision has been made in the accounts for these demands as the Company expects a favorable
decision in appeal.
c.
Guarantees given by banks on behalf of the Company outstanding for the year ended Rs. 37.39
million (Previous year Rs. 37.77 million).
d.
The Company and its subsidiary iNews.com Limited have extended corporate guarantee
amounting to Rs. 50.90 million (Previous year Rs. 50.90 million), in favour of ICICI Home
Finance Company Limited in consideration of loan facility extended by ICICI Home Finance
Company Limited to the employees of the Company. As at the year end, Rs. 47.48 million
(Previous year Rs. 47.92 million) was outstanding in respect of such loan.
e.
The Company has given corporate guarantee of Rs. 320 million (Previous year Rs. 320 million)
towards fund based/non - fund based credit facility given by ICICI Bank Limited to ibn18
Broadcast Limited (formerly Global Broadcast News Limited). As at the year end, Rs. 40 million
(Previous year Rs. 120 million) was outstanding in respect of such loan.
f.
The Company had extended corporate guarantee of USD 25 million (Previous year USD 25
million i.e. approximately Rs. 1,128.50 million) to The Hongkong and Shanghai Banking
Corporation Limited for loans taken from Kingfisher Capital CLO Limited by Capital 18 Limited,
a company incorporated in Mauritius and a step down subsidiary of the Company. As at the year
end, the entire loan has been repaid by Capital 18 Limited and the corporate guarantee has been
discharged.
g.
The Company has extended corporate guarantees of USD 85 million i.e. approximately Rs.
3,795.25 million (Previous year Rs. 3,836.90 million) to ICICI Bank Canada for BK Holdings
Limited, a company incorporated in Mauritius and a step down subsidiary of the Company. As at
the year end, USD 40 million i.e. approximately Rs. 1,786 million (Previous year USD 80 million
i.e. approximately Rs. 3,611.20 million) was outstanding in respect of such loan.
h.
The Company had extended corporate guarantee of USD 40 million (Previous year USD 40
million i.e. approximately Rs. 1,805.60 million) to Viacom 18 Media Private Limited (Viacom)
(formerly MTV Networks India Private Limited) for and on behalf of BK Holdings Limited,
Mauritius in respect of investments to be made by BK Holdings Limited/ ibn18 Broadcast
Limited. During the year, the balance commitment of investments of 10 millions (Previous year
USD 10 million i.e. approximately Rs. 451.40 million) was met and the corporate guarantee
stands discharged at the year end.
i.
The Company has purchased fixed assets under the ‘Export Promotion Capital Goods Scheme’.
As per the terms of the license granted under the scheme, the Company had undertaken to achieve
an export commitment of Rs. 351.32 million (Previous year Rs. 398.34 million) over a period of 8
years, which expire over the period 7 August, 2013 to 13 November, 2014 and would be liable to
pay customs duty of Rs. 12.88 million (Previous year Rs. 23.51 million) and interest on the same
at the rate of 15 per cent compounded annually in the event of non fulfillment of the export
obligations. The Company had fulfilled its export obligations of Rs. 351.32 million and had made
an application to the Director General of Foreign Trade for issuance of the export obligation
discharge certificates (EODC). As at 31 March, 2011 the Company had received EODC
aggregating to Rs. 248.30 million.
j.
Mr. Victor Fernandes and other (“plaintiffs”) had on 25 August, 2006 filed a suit as derivative
action on behalf of e-Eighteen.com Limited before the High Court of Bombay against Mr.
Raghav Bahl, Television Eighteen India Limited (TV18) and other TV18 group entities. The
plaintiffs are minority shareholders of e-Eighteen.com Limited and have alleged that Mr. Raghav
Bahl, TV18, ICICI Global Opportunities Fund and e-Eighteen.com Limited had entered into a
subscription cum shareholders agreement dated 12 September, 2000 under which Mr. Raghav
Bahl and TV18 had inter alia undertaken that any opportunity offered to them shall only be
190
pursued or taken up through e-Eighteen.com Limited or its wholly owned subsidiaries. The
plaintiffs have alleged that Mr. Raghav Bahl and TV18 have promoted and developed various
businesses through various entities which should have under the aforesaid agreement rightfully
been undertaken by e-Eighteen.com Limited or its wholly owned subsidiaries. The plaintiffs have
alleged that by not doing so Mr. Raghav Bahl and TV18 have caused monetary loss to eEighteen.com Limited as well as to the plaintiffs. The plaintiffs have valued their claim in the suit
at Rs. 31,140.60 million and have inter alia prayed that Mr. Raghav Bahl, TV18 and other TV18
group entities be ordered to transfer to e-Eighteen.com Limited all their businesses, activities and
ventures along with all assets and intellectual property. The plaintiffs had filed a notice of motion
on 18 September, 2006 seeking an interim relief. A reply had been filed with the Bombay High
Court on 14 November, 2006. The said notice of motion was dismissed on 8 August, 2008 against
which the plaintiffs have filed an appeal before the division bench of the Bombay High Court.
The said appeal is pending for hearing and final disposal.
Based on the legal advice by the legal counsel, management is of the view that the above claim
made by the plaintiffs is unlikely to succeed and has accordingly made no provisions in the
financial statements.
k. Damages/ claims filed against the Company and other group entities amounting to Rs. 2,600
million, by the former channel distributor of the Company. A counter claim has been filed for
damages of Rs. 2,540 million along with a claim for recovery of dues of Rs. 214 million against
the distributor. The matter is pending before the Hon’ble High court of Delhi. No provision has
been made in the accounts for these demands as the Company expects a favorable decision.
l.
3.
The Company has received legal notices of claims, lawsuits and proceedings filed against it
which arise in the ordinary course of the business and relating to monetary loss and defamation
suits in relation to the news content broadcast by the Company and /or TV18 group entities {the
aggregate claim in respect of the latter being Rs. 3,100.00 million, (Previous year Rs. 3,100.00
million)}. In the opinion of the management, no material liability is likely to arise on account of
such claims/law suits in relation to its financial position, or results of operations.
Barter Transactions
During the year ended 31 March, 2011, the Company had entered into barter transactions, which were
recorded at the fair value of consideration receivable or payable. The profit and loss account for the
year ended 31 March, 2011 has been grossed up to reflect revenue from barter transactions of Rs. 58.40
million (Previous year Rs. 57.88 million) and expenditure of Rs. 61.25 million (Previous year Rs. 67.73
million) being the fair value of barter transactions provided and received.
4.
Change in Authorised Share Capital and Rights Issue
a.
Increase in the Authorised Share capital
The Company had given a postal ballot notice dated 13 May, 2009 to its shareholders pursuant
to Section 192A of the Companies Act, 1956 for reclassification of the authorised share capital
of the Company comprising 20,00,00,000 equity shares of Rs. 5 per share and 5,00,000
preference shares of Rs. 100 each aggregating to Rs. 1,050,000,000, to 210,000,000 equity
shares of Rs. 5 each aggregating to Rs. 1,050,000,000 and for increasing the authorised share
capital of the Company from Rs. 1,050,000,000 (comprising 210,000,000 equity shares of Rs. 5
each) to Rs. 2,050,000,000 (comprising 410,000,000 equity shares of Rs. 5 each). The result of
the postal ballot was announced on 22 June, 2009 whereby the aforesaid resolutions were duly
approved by the shareholders of the Company.
b.
Rights issue
During the previous year ended 31 March, 2010 the Company had made a rights issue of
60,007,121 equity shares of Rs. 5 each at a premium of Rs. 79 per share aggregating to Rs.
50,405.98 lakhs to the existing shareholders of the Company. The rights issue opened on 29
September, 2009 and closed on 14 October, 2009.
Pursuant to the approval dated 26 October, 2009 of the Right Issue Committee, the Company
191
had allotted 60,007,121 equity shares of Rs. 5 each at a premium of Rs. 79 per share. The
Company had called Rs. 21.00 per share on application, Rs. 29.40 per share on first call and Rs.
33.60 per share on the final call on the alloted shares.
During the year ended 31 March, 2011, of the 1,979,148 equity shares which were partly paid
upto the previous year 1,354,752 equity shares, have been converted into fully paid up equity
shares. Consequently, the paid up equity share capital of the Company has increased by Rs.
39.13 lakhs and Securities premium amount has increased by Rs. 618.25 lakhs. As on 31 March,
2011, there were 624,396 partly paid shares in respect of which calls were in arrears.
5.
6.
Secured Loans
a.
Cash credit and working capital demand loan of Rs. 774.12 million with banks are secured by
first charge on all current assets of the Company on pari passu basis with other working capital
lenders.
b.
Term loans from banks as on 31 March, 2011 amounted to Rs. 632.29 million:
i.
Out of the above, Rs. 382.29 million is secured by way of first charge on the fixed assets
financed out of the loan and is also supported by way of pledge of shares held by the
promoters/ group entities and personal guarantee of Mr. Raghav Bahl;
ii.
Out of the above, Rs. 250 million is secured by subservient charge on movable fixed assets
and is also supported by a letter of comfort provided by Mr. Raghav Bahl.
c.
Other loans from banks amounting to Rs. 5.93 million are secured by hypothecation of vehicles
financed by them.
d.
Term Loans from others as on 31 March, 2011 amounted to Rs. 633.00 million is secured by first
pari passu charge on movable fixed assets of the existing news channels and is collaterally
secured by pledge of shares by the promoters/ group entities, personal guarantee of the Managing
Director of the Company and corporate guarantee of Network18 Media & Investments Limited.
e.
Term loans include amounts aggregating to Rs. 1,207.44 lakhs which are pending utilization for
the purposes for which they were obtained on account of deferment of expansion plans and are
held in the current/ deposit accounts with banks. The Company had applied for modification of
the purpose for which a term loan of Rs. 6,000 lakhs (amount outstanding Rs. 3,822.93 lakhs as at
the yearend) was sanctioned, approval of which from the bank was pending as at the year end.
This loan was paid subsequent to the year end.
Investments
a. The details of purchases and sales of current investments made during the year are as follows:
Particulars
Purchase
Units
Rs.
33,598,983 503,000,000
10,348,610 150,000,000
508,199 685,000,000
Birla Sun Life Mutual Fund (Face Value Rs. 10)
Deutche Mutual fund (Face Value Rs. 10)
DSP BlackRock Liquidity Fund (Face Value Rs.
1,000)
Fidelity Mutual Fund (Face Value Rs. 10)
Franklin Templeton Mutual Fund (Face Value Rs.
1000)
HDFC Mutual Fund (Face Value Rs. 10)
HSBC Mutual Fund (Face Value Rs. 10)
IDFC Mutual Fund (Face Value Rs. 10)
JM Financial Mutual Fund (Face Value Rs. 10)
Kotak Mutual Fund (Face Value Rs. 10)
Religare Mutual Fund (Face Value Rs. 10)
Reliance Mutual Fund (Face Value Rs. 10)
192
Sale
Units
Rs.
40,765,104 612,156,272
13,735,327 201,488,754
637,535 859,268,811
159,424
220,000,000
16,127,556
159,424
195,004,725
222,626,547
13,647,324
44,209,207
21,695,608
15,712,806
24,170,430
50,081,793
263,000,000
635,000,000
250,000,000
230,000,000
310,000,000
700,000,000
15,738,205
44,209,207
31,320,847
24,527,447
14,126,337
36,156,909
58,043,402
305,613,809
637,392,508
360,338,916
359,351,889
263,724,905
465,554,744
815,627,868
Particulars
Purchase
Sale
Units
Rs.
Units
Rs.
SBI Mutual Fund (Face Value Rs. 10)
- 10,388,243 152,101,542
Tata Mutual Fund (Face Value Rs. 1,000)
391,575 670,000,000
447,510 769,998,445
Taurus Mutual Fund (Face Value Rs. 1,000)
246,369 250,000,000
372,920 389,558,566
UTI Mutual Fund (Face Value Rs. 1,000)
261,794 400,000,000
526,842 804,316,840
Principal Mutual Fund (Face Value Rs. 10)
20,178,617 290,000,000 20,178,617 291,580,895
ICICI Prudential Mutual Fund (Face Value Rs. 100)
3,579,735 505,000,000
3,306,235 457,395,687
b. The details of purchases and sales of other investments made during the year are as follows:
Particulars
Purchase
In Numbers
Amount (Rs.)
Equity shares
KSL and Industries Limited
iNews.com Limited
Units
Media Venture Capital Trust-II
7.
Sale/Redemption
In Numbers
Amount (Rs.)
51,000
510,000
118,577
-
30,000,000
-
-
-
3,456
345,600,000
Transfer of business operations
Scheme of Arrangement (“the Scheme”) between the Company, Network18 Media & Investments
Limited (‘Network18’), ibn18 Broadcast Limited (‘ibn18’) and other group companies, under sections
391 to 394 read with section 78, 100 to 103 of the Companies Act, 1956. As per the Scheme, the
Company’s television businesses inter-alia consisting of business news channels viz. CNBC-TV18 and
CNBC Awaaz will be demerged and consolidated with ibn18 Broadcast Limited (“ibn18”). On the same
date, the residual businesses of the Company with all its investments will be merged and consolidated
with Network18 Media and Investments Limited (“Network18”). As per the Scheme, the shareholders
of the Company will be given 68 shares of ibn18 and 13 shares of Network18 in lieu of 100 shares held
in the Company. The shareholders of the Company approved the Scheme on 21 December, 2010. The
Scheme has been sanctioned by the Hon’ble High Court of Delhi on 26 April, 2011. As per the Scheme
sanctioned by the Hon’ble High Court of Delhi, the appointed date for the proposed restructuring is 1
April, 2010 and the effective date shall be when the certified copies of the High Court Orders are filed
with the jurisdictional Registrar of Companies, which is still pending. Accordingly no effect of the
proposed restructuring has been given in these financial statements. Upon the Scheme becoming
effective, the results of operations, assets and liabilities relating to the television business shall be
transferred to ibn18 and the residual business will be merged with Network18. The Company will be
dissolved without the process of winding up in accordance with the provisions of the Scheme and the
provisions of the Companies Act, 1956.
8.
A. Investment in Infomedia 18 Limited
a.
The Company, I-Ven Interactive Limited (‘I-Ven’), Infomedia 18 Limited (Infomedia)
(formerly Infomedia India Limited) (‘Target Company’) and India Advantage Fund – II (‘IAF
II’), a trust constituted under the provisions of the Indian Trust Act, 1882, had entered into a
Share Purchase, Share Subscription and Warrant Subscription Agreement dated 11 December,
2007 (‘agreement’). As at the date of the agreement, the Target Company was a subsidiary of
I-Ven and is listed on the Bombay Stock Exchange Limited (‘BSE’) and the National Stock
Exchange of India Limited (‘NSE’). Further, as at the date of the agreement, I-Ven held
12,396,999 equity shares of the Target Company representing 62.73% of the outstanding
equity shares of the Target Company. As per the terms of the agreement, subject to statutory
and regulatory clearances:
i.
The Company agreed to purchase from IAF II such number of fully paid up equity shares
of I-Ven (‘sale shares’) which would transfer to the Company an economic interest of
40% of the issued and paid up equity shares of the Target Company. In addition, the
Company agreed to subscribe to and I-Ven agreed to issue and allot a stipulated number
of fully paid up equity shares (‘subscription shares’) of I-Ven. As at the year ended 31
193
March, 2008, the Company had not purchased/subscribed to the above mentioned shares
and had a commitment of Rs. 1,779 million as at the year ended 31 March, 2008, in
respect of the above. Pursuant to the agreement, the said consideration was to be placed in
an escrow account pending which the Company was to provide for interest, at the rate of
14 % per annum compounded monthly.
ii.
It was envisaged that the Company would make an offer (‘offer’) as per the Securities and
Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations
1997 to the shareholders of the Target Company for acquiring up to 20% of the voting
capital of the Target Company. In the event, the Company is not able to acquire an
economic interest of 53% of the issued and paid up equity shares of the Target Company
after the offer and purchase of sale shares, IAF II agreed to sell additional equity shares
(‘subsequent sale shares’) of I-Ven to the Company to ensure that the Company acquires
an economic interest of 53% in the issued and paid up equity capital of the Target
Company.
The offer closed on 28 April, 2008 and the Company acquired 720,931 equity shares
(face value Rs. 10 each) at an aggregate cost of Rs. 170.86 million representing 3.63% of
the voting capital of the Target Company pursuant to such offer.
iii. The Target Company agreed to issue 5,000,000 warrants (‘warrants’) to the Company, in
accordance with Securities and Exchange Board of India (Disclosure and Investor
Protection) Guidelines, 2000 – Guidelines for Preferential Issues. The warrant
consideration price was fixed at Rs. 237 per warrant. Each warrant was convertible into
one fully paid up equity share of Rs. 10 each of the Target Company on exercise of
options and on payment of the stipulated warrant exercise price. The option was
exercisable during a period of 18 months from the date of allotment of warrants that is 7
February, 2008. During the year ended 31 March, 2008, the Company had paid 10% of
the consideration price i.e. Rs. 23.70 per warrant aggregating to Rs. 118.50 million to the
Target Company and 5,000,000 warrants were allotted to the Company.
b.
Further on 21 August, 2008:
i.
IAF II agreed to transfer 5,451,900 shares of I-Ven held by it to the Company.
ii.
The Company agreed to subscribe to and pay for 2,775,566 shares of I-Ven, being the
subscription shares, at a fair value determined as Rs. 216.17 per share.
As at 31 March, 2009, the Company had purchased/subscribed to 8,227,466 shares i.e.
63.98% of the issued and paid up equity shares of I-Ven amounting to Rs. 1,778.55
million. Further the Company had taken control of the Board of Directors of Infomedia on
21 August, 2008.
The Company had also paid interest amounting to Rs. 98.66 million during the year ended
31 March, 2009 for acquisition of Infomedia.
c.
The Company had decided to not subscribe to the warrants at the aforementioned
consideration price subsequent to the year ended 31 March, 2009, in view of the market
conditions, and had accordingly written off its investment in 5,000,000 partly paid convertible
equity warrants amounting to Rs. 118.50 million as per the principles laid down under
Accounting Standard Contingencies and Events Occurring After Balance Sheet Date’ during
the year ended 31 March, 2009.
d.
A scheme of arrangement to merge I-Ven into Infomedia had been filed with the Hon’ble
High Court of Bombay on 18 February, 2009. The scheme became effective from 25 August,
2009 and I Ven Interactive Limited merged with Infomedia 18 Limited on the effective date.
The Company had been alloted 7,894,052 equity shares of Rs. 10 each of Infomedia 18
Limited in exchange of 8,227,466 equity shares of Rs. 10 each held in I-Ven Interactive
Limited. Consequently, the Company's direct holding in Infomedia 18 Limited increased to
43.32% of the equity share capital.
194
e.
Infomedia 18 Limited has made a rights issue of equity shares of Rs. 10 each at a premium of
Rs. 23.50 per share aggregating to Rs. 9,989.89 lakhs to the existing shareholders of
Infomedia 18 Limited. The rights issue opened on 29 December, 2009 and closed on 15
January, 2010. The Company subscribed to 15,298,078 equity shares at Rs. 33.50 per share
(face value of Rs 10 per share at a premium of Rs 23.50 per share) amounting to Rs. 5,124.86
lakhs in the right’s issue and its direct holding in Infomedia further increased to 48.11% as at
the year ended 31 March, 2010. The Company held 47.80 % stake in the equity share capital
of Infomedia as at the year ended 31 March, 2011.
f.
The Board of Directors of Infomedia 18, on July 7, 2010 announced and approved a Scheme
of Arrangement (‘the Scheme’) between Infomedia 18 Limited and Network18 Media &
Investments Limited (‘Network18”) and their respective shareholders and creditors. As per the
Scheme, the Business Directories business, the New Media business and the Publishing
business of the Company shall be demerged into Network18 Media & Investments Limited
while the Printing Press business will continue to remain with Infomedia 18. The Scheme has
been approved by the shareholders and creditors (secured and unsecured) of Infomedia 18 at
their meetings held on 23 February, 2011, convened pursuant to the directions of the Hon’ble
High Court of Delhi . Infomedia 18 has to file second motion application under Section 391394 of the Companies Act, 1956 with the Hon’ble High Court of Delhi for the approval of the
Scheme. The Appointed date for the proposed restructuring is 1 April, 2010 and the Scheme
shall be effective when the certified copies of the High Court Orders are filed with the
Registrar of Companies, which is still pending.
B. Investment in Media Venture Capital Trust-II (MVCT)
The shareholders of the Company vide postal ballot resolutions dated 12 September, 2006 and 16
July, 2007 permitted the Company to take an indirect equity exposure in a venture capital trust
structure post which the Company executed a trust deed to form the Media Venture Capital TrustII (‘MVCT’). The objective of the Trust is to make strategic investments in businesses including in
the media and entertainment industry through companies/special purpose vehicles (SPVs). The
Company also entered into a co-investment agreement with Mr. Raghav Bahl, the promoter, who
has guaranteed a minimum stipulated rate of return on the investment over a specified period. The
investment in MVCT as at 31 March, 2011 was Rs. 2,375.60 million (Previous year Rs. 2,721.20
million) as against the limit of Rs. 4,000 million approved by the shareholders. MVCT directly or
through companies/SPVs has invested in various companies which are at different stages of
startup/ operations.
9.
Long term Investments
The Company has certain long term investments aggregating to Rs. 76,740 lakhs including quoted
equity shares of Rs. 27,468.95 lakhs. The market value of the quoted equity shares as at 31 March,
2011 aggregates to Rs. 4,792.24 lakhs. Management is of the view that, having regard to the long term
strategic involvement and the proposed restructuring as per the Scheme of Arrangement (see note 7
above), no provision is considered necessary for ‘other than temporary diminution’ in the value of these
investments.
10.
Based on the Institute of Chartered Accountants of India’s announcement on 29 March, 2008 dealing
with the accounting for derivatives and keeping in view the application of “prudence” as enunciated in
AS-1, the Company has recognised losses of Rs. Nil (previous year Rs. 71.87 million) for the year
ended 31 March, 2011 on derivative transactions.
11.
Deferred tax
a.
Deferred tax assets and liabilities are being offset as they relate to taxes on income levied by the
same governing taxation laws.
b.
Break up of deferred tax assets/liabilities and reconciliation of current year’s deferred tax:
(Amounts in Rupees)
195
Opening
balance
(Charged)/
Credited to
P&L during the
year
Closing
balance
(65,020,469)
(89,717,116)
25,007,595
24,696,647
(40,012,874)
(65,020,469)
(65,020,469)
(89,717,116)
25,007,595
24,696,647
(40,012,874)
(65,020,469)
106,912,743
177,612,355
(65,653,853)
(70,699,612)
41,258,890
106,912,743
32,667,556
37,079,742
(8,706,090)
(44,12,186)
23,961,466
32,667,556
Total B
139,580,299
214,692,097
(74,359,943)
(75,111,798)
65,220,356
139,580,299
Net DTA/(DTL)A+B
74,559,830
124,974,981
(49,352,348)
(50,415,151)
25,207,482
74,559,830
Deferred Tax Liabilities (DTL)
Tax impact of difference between carrying amount of
fixed assets in the financial statements and the income
tax return
Total A
Deferred Tax Assets (DTA)
Tax impact of expenses charged in the financial
statements but allowable as deductions in future years
as per provisions of Section 40, 43B etc. of the Income
Tax Act, 1961.
Provision for doubtful debts
Note: Previous year figures are in italics.
12.
Employee Benefits
a.
Description of the Gratuity Plan
The gratuity liability arises on retirement, withdrawal, resignation or death of an employee. The
aforesaid liability is calculated on the basis of fifteen days salary (i.e. last drawn salary plus
dearness allowance) for each completed year of service subject to completion of five years of
service.
b.
Defined Benefit Plans/Compensated absences
The present value of defined benefit obligations/compensated absences and the related current
service cost are measured using the projected unit credit method with actuarial valuation being
carried at each balance sheet date. The details are set out as under:
Particulars
Change in benefit obligations:
Present value of obligation at the
beginning of the year
Past service Cost
Current service cost
Interest cost
Actuarial (gain)/loss
Benefits paid
Present value of obligation at the year
end
Change in plan assets:
Fair value of plan assets at the beginning
31.03.2011
Gratuity Compensated
Benefits
Absences
(Amounts in Rupees)
31.03.2010
Benefits
Absences
32,629,958
17,691,526
37,702,960
37,222,927
9,448,154
6,598,044
2,610,397
(4,953,407)
(1,798,652)
44,534,494
3,835,546
1,415,322
(1,397,187)
(2,583,592)
18,961,615
5,843,237
3,016,237
(10,894,451)
(3,038,025)
32,629,958
4,280,262
2,977,834
(5,133,884)
(21,655,613)
17,691,526
13,376,747
-
12,123,970
-
196
Particulars
31.03.2011
Benefits
Absences
of the year
Employer’s contributions
Benefits paid
Actuarial gain/ (loss)
Fair value of plan assets at the yearend*
*compensated absences not funded
Net liability:
Present value of obligation at the year
end
Fair value of plan assets at the year end
Net liability
Particulars
31.03.2010
Benefits
Absences
1,137,023
650,000
(1,781,690)
(369,738)
13,012,342
-
1,030,537
1,229,874
(1,881,559)
873,925
13,376,747
-
44,534,494
18,961,615
32,629,958
17,691,526
13,012,342
31,522,152
18,961,615
13,376,747
19,253,211
17,691,526
Gratuity
Compensated
Benefits
Absences
(Rs.)
(Rs.)
Gratuity
Compensated
Benefits
Absences
(Rs.)
(Rs.)
Expenses recognised in the profit and loss account:
Past Service cost
Interest cost
Net actuarial (gain)/loss
Net cost
Particulars
6,598,044
9,448,154
2,610,397
(4,583,669)
(1,137,023)
12,935,903
3,835,546
1,415,322
(1,397,187)
3,853,681
31.03.2011
Gratuity
Compensated
Benefits
Absences
5,843,237
3,016,237
(11,768,376)
(1,030,537)
(3,939,439)
4,280,262
2,977,834
(5,133,884)
2,124,212
31.03.2010
Gratuity
Compensated
Benefits
Absences
Actuarial assumptions used:
Discount rate
Expected salary escalation rate
Mortality table
Retirement age
Withdrawal rates
8%
6%
8.5%
LIC(1994-96)
Duly modified
60 Yrs
Age
Upto 30 years
Upto 44 years
Above 44 years
8%
6%
LIC(1994-96)
Duly modified
60 Yrs
Percentage
3
2
1
8%
6%
8.5%
LIC(1994-96)
duly modified
60 Yrs
Age
Upto 30 years
Upto 44 years
Above 44 years
8%
6%
LIC(1994-96)
duly modified
60 Yrs
Percentage
3
2
1
Notes:
1.
The discount rate is based on the prevailing market yield of Indian Government Securities as at the
balance sheet date for the estimated term of obligations.
2.
The expected return is based on the expectation of the average long term rate of return on investments
of the fund during the estimated term of the obligations.
5.
The estimates of future salary increases considered takes into account the inflation, seniority,
197
promotion and other relevant factors.
6.
Plan assets mainly comprise funds managed by the insurer i.e. ING Vysya Life Insurance Company
Limited. 20% of the plan assets are invested in the Liquid Fund while 80% are invested in the Secure
Fund. The portfolio composition of these funds is as follows:
Corporate debt
Mutual fund / cash
Government securities
Corporate bonds
Equity
Money market
Total
13.
Liquid fund
%
31.03.11
97.92%
2.08%
100%
Secure fund
%
31.03.11
24.33%
52.38%
14.34%
8.95%
100%
Liquid fund
%
31.03.10
99.98%
0.02%
100%
Secure fund
%
31.03.10
13.40%
62.99%
16.56%
7.05%
100%
Earnings Per Share
Basic earnings/ (loss) per equity share has been computed by dividing net profit/ (loss) after tax by the
weighted average number of equity shares outstanding during the year. Diluted earnings/ (loss) per
equity share has been computed using the weighted average number of equity shares and dilutive
potential equity shares outstanding during the year. The reconciliation between basic and diluted
earnings per equity share is as follows:
a.
b.
c.
d.
e.
f.
Particulars
Units
Weighted average number of equity shares used in
computing basic earnings per share
Basic earnings/(loss) per share (a/b)
Weighted average of the number of shares under options
Rs.
No. of
shares
Rs.
No. of
shares
No. of
shares
No. of
shares
Adjustment for weighted average number of shares that
would have been issued at fair value
Weighted average number of equity shares used in
computing diluted earnings per share (b+d+e)
Year ended
31.03.2011
452,416,738
183,035,655
Year ended
31.03.2010
(324,755,400)
132,399,190
2.47
-
(2.45)
-
679,475
1,213,690
183,175,130
133,612,880
(see note
below)
2.45
(see note
below)
- (see note
below)
g.
Diluted earnings per share
Rs.
2.46
h.
Effect of potential equity shares (c-g)
Rs.
0.01
Note:
Potential equity shares have not been considered for the purpose of computing diluted earnings per share as the
result is anti- dilutive.
14.
Employee Stock Option and Stock Purchase Plan
a.
Television Eighteen India Limited Employee Stock Option Plans
The Company has established several employee stock option plans (ESOPs) in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 which have been approved by the Board of Directors and the
shareholders. The details are as given below:
¾
Television Eighteen India Limited Stock Option Plan 2002 (ESOP 2002)
198
¾
Television Eighteen India Limited Employees Stock Option Plan 2003 (ESOP 2003)
¾
Television Eighteen India Limited Employee Stock Option Plan 2004 (ESOP 2004)
¾
Television Eighteen India Limited Senior Employee Stock Option Plan 2004 (Senior ESOP
2004)
¾
Television Eighteen India Limited Long Term Retention Employee Stock Option Plan 2005
(Long Term Retention ESOP 2005)
¾
Television Eighteen India Limited Employee Stock Option Plan 2005 (ESOP 2005)
¾
Television Eighteen India Limited Strategic Employees Stock Option Plan 2005 (Strategic
Acquisition ESOP 2005)
¾
¾
Television Eighteen India Limited Employees Stock Option Plan A 2007 (ESOP (A) 2007)
¾
Television Eighteen India Limited Employees Stock Option Plan B 2007 (ESOP (B) 2007)
¾
A compensation committee comprising independent members of the Board of Directors
administers the ESOPs. All options under the ESOPs are exercisable for equity shares. The
Company had declared a bonus issue of 1:1 in the AGM of the Company on 7 September, 2007
with record date of 18 October, 2007. Prior to the bonus issue, each option was exercisable for one
Rs. 5 fully paid up equity share of the Company on payment of the exercise price. Subsequent to
the bonus issue each option is exercisable for two Rs. 5 fully paid up equity shares of the Company
on payment of the exercise price.
The Company had given a postal ballot notice dated 19 December, 2008 to its shareholders
pursuant to Section 192A of the Companies Act, 1956 for the approval of modifications relating to
exercise price and vesting of options under the ESOP (A) 2007, ESOP 2005, ESOP 2004 and
Senior ESOP 2004 plans. Further the number of options authorised to be granted under the ESOP
2007 were proposed to be increased from 2,542,438 to 10,000,000 options. The result of the postal
ballot was announced on 2 February, 2009 whereby the aforesaid modifications were duly
approved by the shareholders of the Company.
Consequent to the modifications that occurred after the vesting date of certain options the deferred
employee compensation amount increased by Rs. 35.41 million which is being amortised over the
additional vesting period. This incremental intrinsic value granted had been determined based on
the intrinsic value of the modified stock options and that of the original stock options both
estimated as on the date of the modifications.
The impact of the modifications as on the date of modification is summarised below:
Plans
ESOP 2004
Weighted average price of options outstanding
Weighted average remaining contractual life
Senior ESOP 2004
ESOP 2005
199
As per original
plan
As per modified
plan
51.94
1.38
27.58
3.55
55.23
2.24
49.24
3.62
Plans
b.
As per original
plan
214.31
1.89
As per modified
plan
20.00
2.85
ESOP (A) 2007
221.31
2.51
5.00
3.85
Senior Employee Stock Awards (Stock Appreciation Right) Plan 2005
During 2005-2006 the Company had established the Stock Appreciation Right Plan 2005 (Senior
Employee Stock Award Plan) (‘SAR’) for compensation to the employees whereby the
Company in its extraordinary general meeting held on 25 July, 2005 had approved a grant of
upto 300,000 awards to eligible employees. During the earlier years, the Company had granted
299,995 awards representing 140,998 options which had vested as on 31 March, 2007. Pursuant
to the scheme, the employees have a right to receive such numbers of fully paid up equity shares
of Rs. 5 of the Company whose market value matches with the amount of increase due to
appreciation in share price during the date of grant and date of exercise of the awards. Upto 31
March, 2008, of the 140,998 options the Company issued 91,650 shares to employees on the
exercising of the options. During the year ended 31 March, 2009 the Company had issued
36,808 shares under this scheme, and the balance 12,540 options had lapsed during the previous
years.
The salient terms of ESOPs schemes/ revised ESOPs schemes and SAR of the Company are set out
hereunder:
Particulars
Year in which
scheme was
established
Number of options
authorised to be
granted
Exercise price* (See
note 1)
Vesting date*
(See note 1)
ESOP 2002
2002-03
ESOP 2003
2003-04
ESOP 2004
2004-05
Senior ESOP 2004
2004-05
700,000
700,000
700,000
700,000
700,000
700,000
840,000
840,000
Rs. 5 per option.
95% of market
value on grant
date.
The exercise price
is to be decided by
the compensation
committee, and is
not to be less than
the par value of the
shares of the
Company and not
more than the price
prescribed under
Chapter XIII of
SEBI (Disclosure
and Investor
Protection)
Guidelines, 2000.
The relevant date
will be the date of
grant
After one year
from the date of
grant of options.
After one year
from the date of
grant of options.
The exercise price
is to be decided by
the compensation
committee, such
that the exercise
price is not less
than the par value
of the shares of the
Company and not
more than the price
prescribed under
Chapter XIII of
SEBI (Disclosure
and Investor
Protection)
Guidelines, 2000.
The relevant date
will be the date of
grant.
one year from the
date of grant within
such period not
exceeding ten years
200
one year from the
such period not
exceeding ten years
Particulars
ESOP 2002
ESOP 2003
Vesting
requirements
One year’s service
from the date of
grant of option.
from the date of
grant of option.
Exercise period
During two years
after vesting date.
During one year
after vesting date.
ESOP 2004
as may be
determined by the
compensation
committee.
Three years of
service from the
date of grant of
option
During two years
after vesting date.
Un-granted options
cancelled during the year
*Note 1:
The details of exercise price and vesting period prior to modifications are given below:
Particulars
ESOP 2002
ESOP 2003
Exercise price
before
modification
N.A.
N.A.
Vesting date
before
modification
N.A.
N.A.
Particulars
Year in which
scheme was
established
Number of options
authorised to be
granted
Exercise price*
(See note 2)
ESOP 2004
Senior ESOP 2004
50% of options
granted at 90%
of market value
on grant date;
2. Remaining
50% of the
options granted
at a discount of
Rs. 125 on
market value on
grant date.
After three years of
service from the
date of grant of
options.
1. 50% of options
granted at 90%
of market value
on grant date;
2. Remaining 50%
of the options
granted at a
discount of Rs.
100 on market
value on grant
date.
1. One third of
options granted
will vest after
two years from
the date of grant
of option ;
2. Remaining two
third of options
granted will vest
after four years
from the date of
grant of options.
ESOP 2006
1,000,000
1,000,000
1.
Long Term
Retention ESOP
2005
2005-06
ESOP 2005
2005-06
Strategic
Acquisition ESOP
2005
2005-06
350,000
350,000
1,260,000
1,260,000
840,000
840,000
Market value on
grant date.
The exercise price
is to be decided by
the compensation
201
Senior ESOP 2004
as may be
determined by the
compensation
committee.
Two to four years
of service from the
date of grant of
option
During a period of
two/three years
from the vesting
date
-
Rs. 100 per option.
2006-07
Rs. 5 per option.
Particulars
Long Term
Retention ESOP
2005
Vesting date* (See
note 2)
After four years
from the date of
grant of options.
Vesting
requirements
Four years of
service from the
date of grant of
option.
During two years
after vesting date.
-
Exercise period
ESOP 2005
committee, such
that the exercise
price is not less
than the par value
Company and not
more than the price
prescribed under
Chapter XIII of
SEBI (Disclosure
and Investor
Protection)
Guidelines, 2000.
The relevant date
will be the date of
grant.
one year from the
such period not
exceeding ten
years as may be
determined by the
compensation
committee.
Three years of
service from the
date of grant of
option.
During one year
after vesting date.
-
Strategic
Acquisition ESOP
2005
ESOP 2006
After one year from
the date of grant of
options.
After two years
from the date of
grant of options.
from the date of
grant of option.
Two years of service
from the date of
grant of option.
During one year
after vesting date.
-
During one year
after vesting date.
-
Un-granted options
cancelled during
the year
*Note 2:
Particulars
Exercise price
before modification
Vesting date before
modification
Long Term
Retention ESOP
2005
N.A.
N.A.
ESOP 2005
90% of market
value on grant
date.
1. One third of
options granted
will vest after
one year from
the date of
grant of
options;
2. One third
options granted
will vest after
two years from
the date of
202
Strategic
Acquisition ESOP
2005
N.A.
ESOP 2006
N.A.
N.A.
N.A.
grant of
options; and
3. One third
options granted
will vest after
three years from
the date of grant
of options.
Particulars
Year in which
scheme was
established
Number of
options/awards
authorised to be
granted
Exercise price*
(see note 3)
Vesting date* (See
note 3)
ESOP (A) 2007
ESOP (B) 2007
ESOP 2007
SAR
2006-07
2006-07
2007-08
2005-06
1,000,000
1,000,000
1,000,000
1,000,000
10,000,000
10,000,000
300,000
300,000
The exercise price
is to be decided by
the compensation
committee, such
that the exercise
price is not less
than the par value
Company and not
more than the price
prescribed under
Chapter XIII of
SEBI (Disclosure
and Investor
Protection)
Guidelines, 2000.
The relevant date
will be the date of
grant.
one year from the
date of grant
within such period
not exceeding ten
years as may be
determined by the
compensation
committee.
Rs. 5 per option.
The exercise price
will be decided by
the compensation
committee such that
the exercise price is
not less than the par
value of the equity
shares of the
Company and not
more than the price
prescribed under
Chapter XIII of
SEBI (Disclosure
and Investor
Protection)
Guidelines, 2000.
Rs. 5
1.
After a minimum
period of one year
from the date of
grant. The vesting
shall happen in one
or more tranches as
may be decided by
the ESOP
Compensation
Committee.
Cliff vesting period
of three years
2.
3.
One sixth
options
granted will
vest after one
year from the
date of grant
of options;
One sixth
options
granted will
vest after two
years from the
date of grant
of options;
One sixth
options
granted will
vest after three
years from the
date of grant
of options;
203
Particulars
ESOP (A) 2007
ESOP (B) 2007
ESOP 2007
SAR
service from the
date of grant of SAR
-
4.
Vesting
requirements
One to four years
of service from the
date of grant of
option.
One sixth
options
granted will
vest after four
years from the
date of grant
of options;
5. One sixth
options
granted will
vest after five
years from the
date of grant
of options; and
6. One sixth
options
granted will
vest after six
years from the
date of grant
of options.
One to six years of
service from the
date of grant of
option.
Exercise period
During four years
after vesting date.
During four years
after vesting date.
Un-granted options
cancelled during
the year
Un-granted options
-
-
Option to vest over
such period, in such
manner and subject
to conditions as may
be decided by the
compensation
committee provided
the employee
Exercise period will
commence from the
vesting date and
extend upto the
expiry period of the
option as may be
decided by the
compensation
committee.
-
-
-
-
One year after
vesting date
-
*Note 3:
75% of market
N.A.
N.A.
Exercise price
before modification value on grant
date.
N.A.
N.A.
Vesting date before 1. One fourth
options granted
modification
will vest after
one year from
the date of
grant of
204
N.A.
N.A.
Particulars
ESOP (A) 2007
ESOP (B) 2007
ESOP 2007
SAR
options;
2. One fourth
options granted
will vest after
two years from
the date of
grant of
options;
3. One fourth
options granted
will vest after
three years
from the date of
grant of
options; and
4. One fourth
options granted
will vest after
four years from
the date of
grant of
options.
c.
Television Eighteen India Limited Employee Stock Purchase Plans (ESPP)
i. Television Eighteen India Limited Stock Purchase Plan 2003 (ESPP 2003)
During 2003-2004 the Company had established an Employee stock purchase plan (ESPP 2003)
for compensation to employees whereby the Company’s plan was to issue upto 700,000 shares to
eligible employees. The offer price per share was 95% of the market value of the shares as at the
date of the offer. The Company had issued 667,016 shares under ESPP 2003 upto 31 March, 2007.
During the year ended 31 March, 2008, pursuant to the approval of the shareholders it was decided
to cancel the issue of the remaining balance of the proposed 32,984 equity shares.
ii. Television Eighteen Employee Stock Purchase Plan 2007 (ESPP 2007)
During 2007-2008 the Company established an Employee stock purchase plan (ESPP 2007) for
compensation to employees whereby the Company’s plan was to issue upto 532,984 shares to
eligible employees. The offer price shall be decided by the compensation committee provided that
the offer price shall not be less than the par value of the equity shares of the Company and shall
not be more than the price prescribed under Chapter XIII of SEBI (Disclosure and Investor
Protection) Guidelines, 2000.
d.
Details of option numbers and weighted average exercise prices
The details of options and weighted average prices are as given below:
Particulars
a.
b.
outstanding at the beginning
of the year
granted during the year
ESOP 2002
Options
Weighted
Average
Price
(Numbers)
(Rs.)
53,690
2.50
53,690
2.50
-
205
ESOP 2004
Options
Weighted
Average
Price
(Numbers)
(Rs.)
347,900
32.56
562,800
27.58
-
Particulars
c.
exercised during the year
d.
forfeited during the year
e.
expired during the year
f.
outstanding at the end of
the year
exercisable at the end of
the year
number of equity shares
of Rs. 5 each fully paid up to be issued on
exercise of option
weighted average share
price at the date of exercise
weighted average remaining
g.
h.
i.
j.
Particulars
ESOP 2002
Options
Weighted
Average
Price
(Numbers)
(Rs.)
30,338
2.50
23,352
2.50
53,690
2.50
23,352
2.50
53,690
2.50
See note1
See note 1
Senior ESOP 2004
Options
(Numbers)
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
of year
outstanding at the end of the
year
exercisable at the end of the year
number of equity shares of Rs. 5 each
fully paid up to be
issued on exercise of option
weighted average share price at the
date of exercise
834,901
998,226
341,433
493,468
834,901
466,801
391,329
493,468
834,901
Weighted
Average
Price
(Rs.)
55.60
49.24
39.02
59.25
55.60
48.05
50.81
N.A.
N.A.
341,433
163,325
1.55
2.51
76.72
76.81
N.A.
N.A.
Particulars
ESOP 2005
Options
(Numbers)
a.
outstanding at the beginning of the year
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
267,396
492,864
206
Weighted
Average
Price
(Rs.)
20.00
20.00
ESOP 2004
Options
Weighted
Average
Price
(Numbers)
(Rs.)
178,500
25.57
206,500
20.00
36,400
47.34
8,400
20.00
133,000
347,900
133,000
113,400
37.10
32.26
37.10
57.61
133,000
347,900
178,500
206,500
1.35
2.36
N.A.
N.A.
75.96
76.81
N.A.
-
Long Term Retention
ESOP 2005
Options
Weighted
(Numbers)
Average
Price
(Rs.)
700,000
75.61
700,000
75.61
700,000
75.61
700,000
75.61
700,000
75.61
700,000
N.A.
700,000
N.A.
0.56
1.56
N.A.
N.A.
N.A.
N.A.
Strategic Acquisition
ESOP 2005
Options
Weighted
(Numbers)
Average
Price
(Rs.)
10,000
10,000
22.15
22.15
Particulars
ESOP 2005
Options
(Numbers)
b.
c.
Strategic Acquisition
ESOP 2005
Options
Weighted
(Numbers)
Average
Price
(Rs.)
Weighted
Average
Price
(Rs.)
-
-
-
-
188,801
201,667
20.00
20.00
-
-
d.
14,500
23,800
20.00
20.00
-
-
e.
-
-
-
-
f.
outstanding at the end of the year
64,095
267,397
20.00
20.00
10,000
10,000
22.15
22.15
g.
64,095
267,397
20.00
20.00
10,000
10,000
22.15
22.15
h.
fully paid up to be
64,095
267,397
N.A.
N.A.
10,000
10,000
N.A.
N.A.
i.
weighted average share price
at the date of exercise
188,801
201,667
75.45
76.81
-
N.A.
N.A.
j.
0.37
1.85
N.A.
N.A.
-
N.A.
N.A.
Particulars
a.
of the year
b.
ESOP 2006
Options
Weighted
(Numbers)
Average
Price
(Rs.)
ESOP (A) 2007
Options
Weighted
(Numbers)
Average
Price
(Rs.)
303,020
361,480
2.50
2.50
441,475
1,287,400
5.00
5.00
-
-
-
-
c.
-
-
290,450
780,375
5.00
5.00
d.
58,460
2.50
23,100
65,550
5.00
5.00
e.
(see note 2)
303,020
-
-
-
-
-
-
-
207
Particulars
ESOP 2006
Options
Weighted
(Numbers)
Average
Price
(Rs.)
2.50
303,020
2.50
ESOP (A) 2007
Options
Weighted
(Numbers)
Average
Price
(Rs.)
127,925
5.00
441,475
5.00
f.
outstanding at the end of the year
g.
303,020
N.A.
2.50
127,925
136,012
5.00
5.00
h.
fully paid up to be
303,020
N.A.
N.A.
127,925
441,475
N.A.
N.A.
i.
weighted average share price at the
date of exercise
-
N.A.
N.A.
290,450
780,375
77.56
76.81
-
N.A.
1.10
N.A.
j.
-
N.A.
2.85
N.A.
Particulars
a.
of the year
b.
c.
ESOP 2007
Options
Weighted
(Numbers)
Average
Price
(Rs.)
SAR
Options
(Numbers)
Weighted
Average
Price
(Rs.)
1,670,000
1,670,000
42.45
42.45
-
-
376,000
-
77.06
-
-
-
20,000
-
60.10
-
-
-
d.
62,500
-
-
-
-
e.
-
-
-
-
f.
outstanding at the end of the
year
1,963,500
1,670,000
48.33
42.45
-
-
g.
516,250
-
60.10
-
-
-
h.
fully paid up to be
1,963,500
1,670,000
N.A.
42.45
-
N.A.
i.
weighted average share price
20,000
78.85
-
-
208
Particulars
ESOP 2007
Options
Weighted
(Numbers)
Average
Price
(Rs.)
at the date of exercise
j.
SAR
Options
(Numbers)
Weighted
Average
Price
(Rs.)
-
N.A.
-
N.A.
3.61
5.63
N.A.
N.A.
-
-
There were no reportable details in respect of ESOP 2003, ESOP (B) 2007 and ESPP 2007.
Previous year figures are in italics.
Note:
1.
The equity shares pursuant to options granted under this scheme were allotted in the past and were
administered through the TV18 Employee Welfare Trust. Accordingly, there has been no further
allotment of equity shares pursuant to the exercise of these options.
During the current year 303,020 stock options exercisable during the year under the Television
Eighteen India Limited Employees Stock Option Plan 2006 (ESOP 2006), had lapsed on failure to
exercise the options within the exercise period. Accordingly, Rs. 885.75 lakhs has been transferred
to the General reserve.
2.
e.
Proforma Accounting for Stock Option Grants
The Company applies the intrinsic value-based method of accounting for determining
compensation cost for its stock-based compensation plans. Had the compensation cost been
determined using the fair value approach, the Company’s net profit and basic and diluted
earnings per share as reported would have reduced to the proforma amounts as indicated:
(Amounts in Rs. Million)
Particulars
Year ended
Year ended
31.03.2011
31.03.2010
Net Profit/(Loss) after tax as reported
452.42
(324.75)
12.95
23.90
debited to Profit and Loss account
40.39
77.73
based on fair value
Difference between (i) and (ii)
(27.44)
(53.83)
Adjusted proforma profit
424.98
(378.58)
Difference between (a) and (c)
27.44
53.83
2.47
(2.45)
Proforma basic earnings per share
2.32
(2.86)
2.46
(2.45)
Proforma diluted earnings per share
2.31
(2.86)
a.
i.
ii.
b.
c.
d.
e.
f.
g.
h.
i.
The fair value of the options, calculated by an external Valuer, was estimated on the date of grant using
the Black-Scholes model with the following significant assumptions:
Particulars
a.
b.
c.
Volatility (in %)
d.
Year ended
31.03.2011
6.57
209
Year ended
31.03.2010
5.51
2.30
4.23
54.69
71.80
0.42
2.99
The volatility of the options is based on the historical volatility of the share price since the
Company's equity shares are publicly traded and has been calculated on the basis of the share price
and trading volume data.
ii.
Details of weighted average exercise price and fair value of the stock options granted during the year at
price below market price:
Particulars
iii.
Year ended
31.03.2011
76,000
Year ended
31.03.2010
-
a.
Total options granted (in Nos)
b.
Weighted average exercise price (in Rs.)
70.00
-
c.
Weighted average fair value (in Rs.)
35.67
-
Details of weighted average exercise price and fair value of the stock options granted during the year at
market price:
Particulars
a.
Total options granted (in Nos)
b.
Weighted average exercise price (in
Rs.)
Weighted average fair value (in Rs.)
c.
Year ended
31.03.2011
300,000
Year ended
31.03.2010
-
78.85
-
27.43
-
15.
The Company had entered into a Shareholders’ Agreement with Newswire18 Limited (Newswire) and
three employees of Newswire pursuant to which the Company provided finance, by means of a loan of
Rs. 7,777,430 to the individual shareholders and a ‘Senior Stock Trust’, set up pursuant this agreement,
for subscribing to a fresh allotment of 777,743 shares of Newswire. Further, the Company has a
commitment to transfer 259,248 equity shares of Newswire to an ESOP trust to be established by
Newswire.
16.
Obligation on long term, non-cancellable operating leases
The Company has taken various residential/ commercial premises under cancellable/non cancellable
operating leases. The cancellable lease agreements are normally renewed on expiry. Rent amounting to
Rs. 72,715,315 (Previous year Rs. 76,775,394) has been debited to the profit and loss account during
the year. The future minimum lease payments under these operating leases are as follows:
(Amounts in Rupees)
As at
As at
31.03.2011
31.03.2010
76,243,968
114,316,662
Particulars
171,207,019
6,785,825
224,926,782
15,141,548
17. Prior period adjustments
The components of prior period adjustments are as follows:
Particulars
Year ended
31.03.2011
(Rs.)
Income from media operations (net)
Less: Airtime purchased
-
Year ended
31.03.2010
(Rs.)
8,562,176
6,138,720
Less: Traveling and conveyance
-
2,192,196
210
Total
18.
-
231,260
Additional information required to be given pursuant to Part II of Schedule VI to the Companies
Act, 1956
Particulars
a.
i.
ii.
Consumption of tapes
Imported
Indigenous
Total
Year ended
31.03.2011
(Rs.)
621,169
2,931,012
3,552,181
Particulars
b.
i.
ii.
iii.
Remuneration paid to Directors (See note below)
Salary
Contribution to provident and other funds
Other perquisites
Total
Note: Excludes provision for compensated absences
and gratuity since the provision is based on an
actuarial valuation for the Company as a whole.
Computation of net profits in accordance with Section
349 of the Companies Act, 1956:
i.
Net profit/(loss) before tax from ordinary activities
%
Year ended
31.03.2010
(Rs.)
%
17
83
100
724,083
3,669,171
4,393,254
16
84
100
Year ended
31.03.2011
(Rs.)
Year ended
31.03.2010
(Rs.)
4,400,000
288,000
4,688,000
4,344,658
288,000
4,632,658
647,743,290
(274,192,875)
4,688,000
235,000
16,000,000
158,708,982
827,375,272
4,632,658
412,000
57,500,000
171,880,641
1,658,531
(38,109,045)
158,708,982
171,880,641
6,681,986
66,128,689
40,484,443
555,371,172
30,872,686
84,903,139
325,765,511
27,768,559
4,800,000
4,688,000
4,632,658
Add:
ii.
iii.
iv.
v.
vi.
vii.
Whole-time Directors’ remuneration
Directors’ sitting fees
Provision for doubtful debts
Depreciation as per books of account
Long term investments written off
Loss on sale of fixed assets
Total
Less:
viii. Depreciation as envisaged under Section 350 of the
Companies Act, 1956*
ix.
Profit on sale / disposal of assets
x.
Profit on sale of long term investment
xi.
xii. Bad debts written off out of provision
xiii. Net profit/ (loss) for calculation on which
remuneration is payable.
Maximum permissible managerial remuneration
{Current year- 5% of Net profit (Previous year Rs.
400,000 per month)}
Managerial remuneration paid
*The Company depreciates fixed assets based on
estimated useful lives that are equal to or higher
than those implicit in Schedule XIV of the
Companies Act, 1956. Accordingly the rates of
depreciation used by the Company are higher than
the minimum rates prescribed by Schedule XIV.
c.
Auditors’ remuneration *
211
Particulars
Year ended
31.03.2011
(Rs.)
Year ended
31.03.2010
(Rs.)
a. Statutory audit fee
b. Quarterly limited reviews/interim
audits
ii. Certification matters
iii. Relating to Rights Issue**
iv. Other services
i. Reimbursement of expenses
3,100,000
3,000,000
2,800,000
2,520,000
860,000
1,500,000
204,759
250,000
4,500,000
2,800,000
86,512
Total
* Exclusive of service tax
** Represents fee relating to Rights Issue adjusted
against securities premium account
8,664,759
12,956,512
44,429,410
1,433,618
45,863,028
12,072,799
2,646,799
14,719,598
5,085,388
7,562,153
196,047,632
12,953,738
221,648,911
359,103
23,202,590
147,188,911
21,402,838
192,153,442
87,851,249
87,851,249
39,809,934
39,809,934
i. Audit fees:
19.
d.
i.
ii.
CIF Value of imports
Capital goods
Others
Total
e.
i.
ii.
iii.
Iv
Expenditure in foreign exchange
Travelling
Telecast and uplinking expenses
Content and franchise expenses
Other services
Total
f.
i.
Earnings in Foreign Exchange
Income from media operations
Total
Related party disclosures
a.
(1)
1.
2.
3.
4.
5.
6.
7.
8.
9.
List of related parties
Name
Network18 Media & Investments Limited (Network18)
(formerly Network18 Fincap Limited)
Television Eighteen Mauritius Limited, Mauritius (TEML)
iNews.com Limited (iNews)
Newswire18 Limited (Newswire) (formerly NewsWire18 Private
Limited- name changed w.e.f 27 February, 2009, formerly News Wire 18
India Private Limited)
RVT Investments Private Limited (RVT)
Television Eighteen Media and Investment Limited, Mauritius (TEMIL)
w.e.f 26 November, 2007
(formerly BK Events Limited)
I-Ven Interactive Limited (I-Ven) w.e.f. 21 August, 2008 upto 25
August, 2009
Web18 Holdings Limited, Cayman Islands (Web18 Holding) upto 31
March, 2010
Web18 Holdings Limited, Cayman Islands (Web18 Holding) w.e.f. 01
April, 2011
212
Relationship
Holding
(by virtue of control)
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary1
Subsidiary22
(1)
10.
Name
BK Holdings Limited, Mauritius (BKH) w.e.f 17 May, 2007
11.
Capital 18 Limited, Mauritius (Capital 18) w.e.f 6 June, 2007
12.
13.
14.
Namono Investments Limited (Namono) w.e.f 19 November, 2007
TV18 UK Limited (TV 18 UK)
E-18 Limited, Cyprus (E 18, Cyprus) (formerly Tadcaster Holdings
Limited)
Capital18 Acquisition Corp., Cayman Islands (C18 AC) w.e.f 28
November, 2007
Colosceum Media Private Limited (Colosceum) w.e.f 15 February, 2008
upto 27 August,2010
(formerly RVT Software Private Limited)
Stargaze Entertainment Private Limited (Stargaze) w.e.f 18 February,
2008 upto 27 August,2010
Webchutney Studio Private Limited (Webchutney) w.e.f. 10 December,
2007 upto 13 March,2009
Juxt Consult Research and Consulting Private Limited w.e.f. 10
December, 2007 upto 13 March, 2009
Goosefish Media Ventures Private Limited (Goosefish) w.e.f. 10
December, 2007 upto 13 March, 2009
Blue Slate Media Private Limited w.e.f. 10 December,2007 upto 13
March,2009
e-Eighteen.com Limited (E-18)
Television Eighteen Commoditiescontrol.com Limited (TECCL)
Web18 Software Services Limited (Web18)
Big Tree Entertainment Private Limited w.e.f 3 April, 2007
Care Websites Private Limited (Care) w.e.f 14 February, 2008
Moneycontrol Dot Com India Limited (MCD)
Keyword Publishing Services w.e.f. 21 August, 2008 upto 22 September,
2009
Keyword Typesetting Services Limited w.e.f. 21 August, 2008 upto 22
September, 2009
Glyph International Private Limited w.e.f. 21 August, 2008 upto 31 May,
2010 (formerly American Devices India Private Limited) (name changed
w.e.f.30 July, 2009) (See 33 below)
Infomedia 18 Limited (Infomedia 18) w.e.f 21 August, 2008
(Refer Note 8 of Schedule 15)
Cepha Imaging Private Limited w.e.f 21 August, 2008 upto 31 May,
2010
Glyph International Limited (formerly Glyph International Private
Limited) (name changed w.e.f. 11 September, 2009) upto 31 May, 2010
Glyph International UK Limited w.e.f.21 August, 2008 upto 31 May,
2010 (formerly Keyword Group Limited) (name changed w.e.f.27 April,
2009)
Glyph International US LLC w.e.f. 21 August, 2008 upto 31 May, 2010
(formerly Software Services LC) (name changed w.e.f. 31 December,
2009)
Digital18 Media Limited w.e.f. from 1 July, 2010 (Digital18) (formerly
Digital 18 Media Private Limited) (name changed w.e.f. 10 June, 2009)
RRB Investments Private Limited (RRB Investments) w.e.f. 1 December,
2010
ibn18 Broadcast Limited (IBN) (formerly Global Broadcast News
Limited) (name changed w.e.f. 2 April, 2008)
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
213
Relationship
Subsidiary1
See note 10
Subsidiary1
See note 10
Subsidiary1
Subsidiary1
Subsidiary2
Subsidiary3
Subsidiary3
Subsidiary3
Subsidiary3
Subsidiary3.1
Subsidiary3.1
Subsidiary3.2
Subsidiary4
Subsidiary4
Subsidiary4
Subsidiary4
Subsidiary4
Subsidiary5
Subsidiary12
Subsidiary12
Subsidiary11
Subsidiary
Subsidiary11
Subsidiary11
Subsidiary11
Subsidiary11
Subsidiary19
Subsidiary19
Fellow Subsidiary
(1)
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
Name
(See 55 Below)
Network18 Holdings Limited, Cayman Islands (NHL) (formerly TV18
Holdings Limited)
network18 India Holdings Private Limited (N-18 Holding) w.e.f 14
August, 2007
Setpro18 Distribution Limited (Setpro)
(formerly Setpro Holdings Private Limited)
RVT Media Private Limited (RVT Media) w.e.f 1 January, 2008
TV18 HSN Holdings Limited (TV18 HSN Holding)
(formerly 18 Holdings Cyprus Limited)
TV18 Home Shopping Network Limited (TV18 HSN) (formerly TV18
Home Shopping Network Private Limited) (name changed w.e.f 10 June,
2008 )
The Indian Film Company, Guernsey (TIFC) w.e.f. 7 September, 2009
upto 30 September, 2010
The Indian Film Company (Cyprus) Limited (TIFC, Cyprus) w.e.f. 7
September, 2009 upto 30 September, 2010
IFC Distribution Private Limited. w.e.f.7 September, 2009 upto 30
September, 2010
AETN18 Media Private Limited (AETN18) w.e.f. 21 September, 2010
ibn18 Media and Software Limited (ibn18 Media) (formerly Jagran TV
Private Limited)
ibn18 (Mauritius) Limited (ibn18 Mauritius) w.e.f. 01 April,2009
Jagran 18 Publications Limited (Jagran) w.e.f 10 March, 2008
JobStreet.Com India Private Limited (Jobstreet) upto 31 March, 2010
Viacom 18 Media Private Limited (Viacom) w.e.f 6 November 2007 upto
30 September, 2008
(formerly MTV Networks India Private Limited)
Reed Infomedia India Private Limited w.e.f 21 August, 2008
ibn18 Broadcast Limited (IBN) (formerly Global Broadcast News
Limited) w.e.f. 22 January, 2009 (name changed w.e.f. 2 April, 2008)
64.
Raghav Bahl (RB)
Also exercises control by virtue of having a substantial indirect interest in
the voting power of the Company
Sanjay Ray Chaudhuri (SRC)
Haresh Chawla (HC)
Subhash Bahl (SB)
Janhavi Chawla (JC)
Ritu Kapur (RK)
Vandana Malik (VM)
SGA News Limited (SGA-N) w.e.f. 15 January, 2006 upto 18 December,
2008
RRB Holdings Private Limited (RRB Holding) upto 18 August, 2010
65.
BK Media Private Limited (BKM)
66.
Network18 Publications Limited (N18 PPL) w.e.f. 11 July, 2007
(formerly network18 Publications Private Limited) (name changed w.e.f
11 December, 2008)
IBN Lokmat News Private Limited (IBN Lokmat) w.e.f 11 June, 2007
(formerly RVT Finhold Private Limited)
Greycells18 Media Limited (Greycells)
57.
58.
59.
60.
61.
62.
63.
67.
68.
214
Relationship
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary6
Fellow subsidiary7
Fellow subsidiary8
Fellow subsidiary18
Fellow subsidiary14
Fellow subsidiary15
Fellow subsidiary20
Fellow subsidiary21
Fellow subsidiary21
Joint venture (JV)
JV9
JV16
JV13
Associate17
Key Managerial Person
(KMP)
KMP
KMP
Relative of KMP (RB)
Relative of KMP (HC)
influence of KMP (RB)
(1)
69.
70.
71.
Name
(formerly, Greycells18 Media Private Limited) (name changed w.e.f. 8
April, 2009)
India International Film Advisors Private Limited (IIFA)
(formerly RB Fincap Private Limited)
VT Softech Private Limited (VT Softech) w.e.f 13 August, 2007
73.
Capital18 Media Advisors Private Limited (C 18 Media) w.e.f 30 July,
2007
Tangerine Digital Entertainment Private Limited (Tangerine) upto 3
September, 2010
VT Investments Private Limited (VT Investments) upto 18 August, 2010
74.
VT Holdings Private Limited (VT Holdings)
75.
Media Venture Capital Trust – II (MVCT)
76.
Digital18 Media Limited w.e.f. 16 April, 2007 till 30 June, 2010
(Digital18) (formerly Digital 18 Media Private Limited) (name changed
w.e.f. 10 June, 2009)
The Network18 Trust (N 18 Trust)
72.
77.
78.
79.
80.
Viacom 18 Media Private Limited (Viacom) (formerly MTV Networks
India Private Limited ) w.e.f. 1 October, 2008
RVT Holdings Private Limited (RVT Holdings)
81.
Colosceum Media Private Limited (Colosceum) w.e.f 28 August, 2010
(formerly RVT Software Private Limited)
Stargaze Entertainment Private Limited (Stargaze) w.e.f 28 August, 2010
82.
Network18 Senior Professional Trust (Network18 Trust)
83.
The Indian Film Company, Guernsey (TIFC) w.e.f. from 1 October, 2010
84.
The Indian Film Company (Cyprus) Limited (TIFC, Cyprus) w.e.f. from
1 October, 2010
IFC Distribution Private Limited. w.e.f. from 1 October, 2010
85.
Notes:
1.
Subsidiary of TEML
Subsidiary of Web18 Holding
3.
Subsidiary of Capital 18. Capital 18 is held for disposal by TEML.
3.1
Subsidiary of Webchutney
3.2
Subsidiary of Goosefish
4.
Subsidiary of E 18, Cyprus
5.
Subsidiary of E-18
6.
Subsidiary of Fellow subsidiary (IBN)
7.
Subsidiary of Fellow subsidiary (NHL)
8.
Subsidiary of Fellow subsidiary (TV18 HSN Holding)
9.
Joint Venture of step down subsidiary (E 18, Cyprus)
10.
Held for disposal by TEML
11.
Subsidiary of Infomedia 18 (formerly Infomedia India Limited)
12.
Subsidiary of Glyph International UK Limited
13.
Joint Venture of Infomedia 18 (formerly Infomedia India Limited)
2.
215
Relationship
influence of KMP (SRC)
influence of KMP (RB &
SRC)
14.
Subsidiary of fellow Subsidiary (TIFC)
Subsidiary of fellow Subsidiary (TIFC, Cyprus)
16.
Joint Venture of step down subsidiary (BKH). BKH is held for disposal by TEML
17.
Associate of RVT
18.
Subsidiary of Network18 and through its wholly own subsidary
19.
Subsidiary of RVT
20.
Subsidiary of RVT Media
21.
Subsidiary of Fellow subsidiary (IBN)
22.
Subsidiary of TEMIL
15.
b. Transactions/balances outstanding with related parties
Particulars
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
(i)Transactions during the year
Income from operations and other income
1. Network18
2. Web18
3. TV18 HSN
4. IBN
5. Viacom
6. N 18 Trust
7. RVT
8. Infomedia 18
9. Digital18
25,005,360
-
-
-
-
-
(27,215,504)
-
-
-
-
-
-
78,456,102
-
-
-
-
(116,042,482)
-
-
-
-
-
-
11,602,189
-
-
-
-
-
(21,621,044)
-
-
-
-
-
-
67,542,369
-
-
-
-
-
(77,764,195)
-
-
-
-
-
-
108,444,303
-
-
-
-
-
(97,081,045)
-
-
-
-
-
222,000,000
-
-
-
-
-
(217,400,000)
-
-
142,916,260
-
-
-
-
-
(105,592,172)
-
-
-
-
-
10,758,698
-
-
-
-
-
(143,538,718)
-
-
-
-
-
881,685
-
-
6,627
-
-
-
-
-
(41,632,015)
-
216
Particulars
Holding
Company
Amount
(Rs.)
0. E-18
1. Network18 Trust
2. Haresh Chawla
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
-
17,765,732
-
-
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
(24,334,641)
-
-
-
-
-
-
-
-
182,683,761
-
-
-
-
-
(3,992,786)
-
-
-
-
-
-
19,002,740
-
-
-
-
-
-
13,449,306
-
-
29,635,446
-
3. Others
-
(22,034,122)
(7,305)
(1,315,800)
(34,314,459)
-
Total
25,005,360
264,227,783
11,602,189
67,542,369
542,770,137
19,002,740
(27,215,504)
(411,542,135)
(21,628,349)
(79,079,995)
(394,420,305)
-
1,501,240
-
-
-
-
-
(133,271)
-
-
-
-
-
-
-
743,836
-
-
-
-
-
-
-
-
-
1,501,240
-
743,836
-
-
-
(133,271)
-
-
-
-
-
86,777,912
-
-
-
-
-
(30,574,152)
-
-
-
-
-
-
44,021,908
-
-
-
-
-
(54,406,253)
-
-
-
-
-
30,756,503
-
-
-
-
-
(26,365,703)
-
-
-
-
-
-
8,486,152
-
-
-
-
-
(12,360,327)
-
-
-
-
-
-
94,399,487
-
-
-
-
-
(158,403,726)
-
-
Interest Expense
1. Network18
2. N18-Holding
Total
Reimbursement of expenses (received)
1. Network18
2. Web18
3. Infomedia 18
4. TV18 HSN
5. IBN
217
Particulars
6. IBN Lokmat
7. Greycells
8. Digital18
9. Others
Total
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
-
-
12,376,197
-
-
-
-
-
(25,424,220)
-
-
-
-
-
2,900,409
-
-
-
-
-
(3,970,702)
-
-
23,997,927
-
-
7,559,009
-
-
-
-
-
(29,857,083)
-
-
2,969,932
419,285
-
274,489
-
-
(5,141,658)
(1,020,933)
-
(493,614)
-
86,777,912
101,746,270
8,905,437
94,399,487
23,110,104
-
(30,574,152)
(85,913,614)
(13,381,260)
(158,403,726)
(59,745,619)
-
94,594,166
-
-
-
-
-
(73,335,830)
-
-
-
-
-
-
9,616,435
-
-
-
-
-
(10,798,315)
-
-
-
-
-
-
-
-
-
-
-
(1,052,659)
-
-
-
-
-
-
1,706,698
-
-
-
-
-
(200,505)
-
-
-
-
-
-
49,296,808
-
-
-
-
-
(64,475,004)
-
-
-
-
-
-
619,204
-
-
-
-
-
(404,800)
-
-
-
-
-
7,301,250
-
-
-
-
-
(781,426)
-
-
-
-
-
-
-
-
-
-
-
(375,000)
-
-
-
-
-
-
-
Reimbursement of expenses (paid)
1. Network18
2. Web18
3. TECCL
4. TV18 HSN
5. IBN
6. IBN Lokmat
7. Viacom
8. Digital18
9. Setpro
218
Particulars
10. Infomedia 18
11. Colosceum
12. E-18
13. Others
Total
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
(333,000)
-
-
-
-
1,399,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,850
-
-
-
-
-
-
-
-
687,731
-
-
-
-
-
(7,783,013)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
94,594,166
11,703,666
1,706,698
49,296,808
7,980,304
-
(73,335,830)
(19,633,987)
(533,505)
(64,475,004)
(1,561,226)
-
Expenditure for
services received
1. Network18
2. E-18
3. Web18
4. TEML
5. TV 18 UK
6. Infomedia 18
7. Setpro
8. IBN
28,506,855
-
-
-
-
-
(31,866,014)
-
-
-
-
-
-
9,331,194
-
-
-
-
-
(12,583,179)
-
-
-
--
-
-
-
-
-
-
-
(1,127,974)
-
-
-
-
-
-
-
-
-
-
-
(5,691,300)
-
-
-
-
-
2,107,494
-
-
-
-
-
(7,540,004)
-
-
-
-
-
7,889,700
-
-
-
-
-
(10,195,877)
-
-
-
-
-
-
498,084,856
-
-
-
-
-
(517,413,346)
-
-
-
-
-
-
3,792,972
-
-
-
-
-
(4,450,667)
-
-
219
Particulars
9. Viacom
0. Ritu Kapur
1. Sanjay Ray
Chaudhuri
2. Haresh
Chawla
3. Janhavi
Chawla
4. Digital18
5. N18 PPL
6. Newswire
7. Others
Total
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
-
-
3,836,631
-
-
-
-
-
(1,546,585)
-
-
-
-
-
-
2,389,137
-
-
-
-
-
(2,016,583)
-
-
-
-
-
4,688,004
-
-
-
-
-
(4,632,658)
-
-
-
-
-
9,529,692
-
-
-
-
-
(4,199,634)
-
-
-
-
-
1,438,800
-
-
-
-
-
(1,438,800)
-
3,370,391
-
-
2,522,068
-
-
-
-
-
(7,500,692)
-
-
-
-
-
2,799,000
-
-
-
-
-
(3,654,000)
-
-
4,391,496
-
-
-
-
-
(5,529,477)
-
-
-
-
-
-
-
-
-
-
-
-
(207,355)
-
-
-
28,506,855
27,090,275
498,084,856
3,792,972
9,157,699
18,045,633
(31,866,014)
(42,667,811)
(517,620,701)
(4,450,667)
(12,701,277)
(12,287,675)
380,000,000
-
-
-
-
-
-
-
-
-
-
-
Loans received
during the year
1. Network18
220
Particulars
2. N-18 Holding
Total
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
-
-
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
337,500,000
-
-
-
-
-
-
-
-
-
380,000,000
-
337,500,000
-
-
-
-
-
-
-
-
-
380,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
287,500,000
-
-
-
-
-
-
-
-
-
380,000,000
-
287,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(59,161,561)
-
-
-
-
-
105,000,000
-
-
-
-
-
(180,000,000)
-
-
-
-
-
1,659,000,000
-
-
-
-
-
(2,284,700,000)
-
-
-
-
-
-
-
-
-
150,000,000
-
-
-
-
-
-
-
-
-
-
2,262,600,000
-
-
-
-
-
(471,500,000)
-
-
200,000
-
-
-
-
-
(109,079,708)
-
-
-
-
-
1,764,200,000
-
-
2,262,600,000
150,000,000
-
(2,632,941,269)
-
-
(471,500,000)
-
Loans given back
during the year
1. Network18
2. N-18 Holding
Total
Loans/ advances
given during the
year
1. Web18
2. Infomedia
18
3. RVT
4. Haresh
Chawla
5. Network18 Trust
6. Others
Total
221
Particulars
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
Loans/
advances received back/ settled during the year
1. N18 PPL
2. Infomedia 18
3. Network18
4. Web18
5. Jagran
7. RVT
8. Network18
Trust
9. Others
Total
-
-
-
-
-
-
-
-
-
-
(3,800,000)
-
-
285,000,000
-
-
-
-
-
(405,000,000)
-
-
-
-
-
-
-
-
-
-
(36,000,000)
-
-
-
-
-
-
70,000,000
-
-
-
-
-
(454,925,598)
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,784,208)
-
-
-
439,000,000
-
-
-
-
-
(1,923,100,000)
-
-
-
-
-
-
-
-
1,034,500,000
-
-
-
-
-
(20,000,000)
-
-
-
-
-
-
-
-
(23,968,750)
-
-
-
-
-
794,000,000
-
-
1,034,500,000
-
(36,000,000)
(2,806,994,348)
-
(2,784,208)
(23,800,000)
-
-
-
-
-
-
-
-
(2,291,034,383)
-
-
-
-
-
510,000
-
-
-
-
-
-
-
-
-
-
-
510,000
-
-
-
-
Investments made
in equity shares
during the year
1. Infomedia 18
2. iNews
Total
222
Particulars
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
-
Fellow
Subsidiaries#
Amount
(Rs.)
(2,291,034,383)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
-
-
Investments made in preference shares during the year
1. TEMIL
Total
-
-
-
-
-
-
-
(414,462,500)
-
-
-
-
-
-
-
-
-
-
-
(414,462,500)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(239,400,000)
-
-
-
-
-
-
-
-
-
-
-
(239,400,000)
-
-
-
-
-
345,600,000
-
-
-
-
-
-
-
-
-
-
-
345,600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,778,548,770)
-
-
-
-
-
(1,778,548,770)
-
-
-
-
Investments made
in units of MVCT
during the year
1. MVCT
Total
Sale/
redemption of unit
during the year
1. MVCT
Total
Equity shares extinguished
1. I-Ven
Total
Share/ debenture application money paid during the year
1. Infomedia 18
-
-
-
-
-
-
-
(512,485,613)
-
-
-
-
223
Particulars
Holding
Company
Amount
(Rs.)
2. TEMIL
3. Newswire
Total
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
-
-
-
-
-
(231,412,500)
-
-
-
-
-
90,800,000
-
-
-
-
-
-
-
-
-
-
-
90,800,000
-
-
-
-
-
(743,898,113)
-
-
-
-
-
-
Share application
money-refunded during the year
1. N-18 Holding
-
-
(2,263,000) -
-
-
Total
-
-
(2,263,000)
-
-
-
-
-
-
-
-
-
-
(1,530,800,000)
-
-
-
-
-
-
-
-
-
-
-
(1,530,800,000)
-
-
-
-
-
-
-
-
492,100,000
-
-
-
-
-
-
-
-
-
-
-
492,100,000
-
-
-
-
-
-
-
-
-
-
-
492,100,000
-
-
-
-
-
-
-
-
-
-
-
492,100,000
-
-
-
-
-
-
-
Debentures allotted during the year
1. RVT
Total
Application
money paid for units during the year
1. MVCT
Total
Application
money refunded/received back during the year
1. MVCT
Total
(ii) Balances at the year end
Debtors outstanding at the year end
224
Particulars
1. Network18
Holding
Company
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
6,881,062
-
-
-
-
-
(6,943,958)
-
-
-
-
-
-
171,648,503
-
-
-
-
-
(218,672,216)
-
-
-
-
-
5,799,433
-
-
-
-
-
(5,765,886)
-
-
-
-
-
145,053,488
-
-
-
-
-
(141,347,408)
-
-
-
-
-
-
918,799
-
-
-
-
-
(13,545,052)
-
-
-
-
-
-
-
53,179,045
-
-
-
-
-
(33,076,314)
-
2. TEML
3. E-18
4. Infomedia 18
5. TV18 HSN
6. Viacom
7. IBN Lokmat
8. Greycells
9. N18 PPL
10. IBN
11. Digital 18
12. Others
Total
Subsidiaries*
Amount
(Rs.)
-
-
-
-
3,310,302
-
-
-
-
-
(12,379,133)
-
-
-
-
-
25,567,128
-
-
-
-
-
(27,095,243)
-
-
-
-
-
18,880,127
-
-
-
-
-
(13,373,316)
-
-
-
-
-
-
-
-
-
(11,461,866)
-
-
-
-
43,785,272
-
-
-
-
-
-
-
-
(44,644,776)
-
-
11,682,465
-
-
-
-
-
(3,884,247)
-
-
-
-
6,881,062
377,969,161
918,799
-
100,936,602
-
(6,943,958)
(369,669,757)
(25,006,918)
-
(130,568,782)
-
Loans /advances at the year end
225
Particulars
1. Network18
2. Web18
3. Infomedia 18
4. TV18 HSN
5. IBN
6. RVT
7. Jagran
8. N18 PPL
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
Entities
under
significant
influence@
Amount
(Rs.)
Key
Management
/Relatives
of key
management
Amount
(Rs.)
4,639,757
-
-
-
-
-
-
-
-
-
-
-
-
656,115,618
-
-
-
-
-
(639,699,401)
-
-
-
-
-
10,887,209
-
-
-
-
-
(245,402,531)
-
-
-
-
-
-
2,010,824
-
-
-
-
-
(1,586,418)
-
-
-
-
-
-
14,979,525
-
-
-
-
-
(27,186,108)
-
-
-
1,711,440,041
-
-
-
-
-
(362,687,450)
-
-
-
-
-
-
-
7,662,907
-
-
-
-
-
(8,315,792)
-
-
-
-
-
-
13,437,532
-
-
-
-
-
(13,437,532)
-
-
52,054,430
-
-
-
-
-
-
-
(46,197,417)
-
-
-
-
-
6,713,378
-
-
-
-
-
(7,466,968)
-
-
24,000,968
-
-
-
-
-
-
-
-
(11,107,195)
-
-
-
-
-
5,208,679
-
-
-
-
-
-
-
-
-
-
1,847,608,892
-
-
-
-
-
(455,093,507)
-
-
-
-
-
-
169,002,740
9. RRB
Investments
0. IBN Lokmat
1. Digital 18
2. Greycells
3. Network18 Trust
4. Haresh Chawla
226
Particulars
Holding
Company
Amount
(Rs.)
Subsidiaries*
Amount
(Rs.)
Fellow
Subsidiaries#
Amount
(Rs.)
5. Others
Total
Associates
/Joint
Ventures
**
Amount
(Rs.)
-
Entities
under
significant
influence@
Amount
(Rs.)
-
-
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
-
268,882,767
52,064
-
272,366
-
-
(320,016,234)
(7,913)
-
(7,248,059)
-
4,639,757
2,723,381,033
2,062,888
22,642,432
1,873,240,847
169,002,740
-
(1,567,805,616)
(1,594,331)
(35,501,900)
(540,550,678)
-
-
-
50,162,738
-
-
-
-
-
-
-
-
-
-
-
50,162,738
-
-
-
-
-
-
-
-
-
-
50,345,235
-
-
-
-
-
(50,345,235)
-
-
-
-
-
-
3,381,470
-
-
-
-
-
(76,316,293)
-
-
-
-
-
-
-
-
-
-
-
-
-
(219,862)
-
Loans/ advances
repayable at the
year end/ Interest
accrued but not
due
1. N-18 Holding
Total
Creditors/
Advances outstanding at the year end
1. TEML
2. Setpro
3. Viacom
4. IBN
5. Network18
6. Web18
7. N18 PPL
-
-
-
7,131,044
-
-
-
-
-
(1,553,108)
-
-
14,126,363
-
-
-
-
-
(12,466,504)
-
-
-
-
-
-
17,327,893
-
-
-
-
-
(4,299,686)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,554,000)
-
227
Particulars
Holding
Company
Amount
(Rs.)
8. Others
Total
Subsidiaries*
Amount
(Rs.)
-
5,874,369
-
-
-
Key
Management
/Relatives
of key
management
Amount
(Rs.)
-
-
(8,507,172)
-
-
(18,200)
-
14,126,363
Fellow
Subsidiaries#
Amount
(Rs.)
Associates
/Joint
Ventures
**
Amount
(Rs.)
73,547,497
3,381,470
(63,152,093)
(76,316,293)
-
-
-
-
- (1,000,000,000)
- (1000,000,000)
(12,466,504)
Entities
under
significant
influence@
Amount
(Rs.)
7,131,044
-
-
(2,792,062)
-
-
-
-
-
-
-
-
-
-
(1,553,108)
Corporate guarantees (given by)
1. N-18 Holding
Total
-
Total corporate guarantees as at the yearend (given for/to)
1. IBN
2. Capital 18
3. BKH
4. Viacom
Total
-
-
-
320,000,000
-
-
-
-
-
(320,000,000)
-
-
-
-
-
-
-
-
-
(1,128,500,000)
-
-
-
-
-
3,795,250,000
-
-
-
-
-
(3,836,900,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,795,250,000
-
320,000,000
-
(4,965,400,000)
- (320,000,000)
(1,805,600,000)
-
(1,805,600,000)
-
Total corporate guarantees as at the yearend (given by)
1. Network18
2. N-18 Holding
Total
800,000,000
-
-
-
-
-
(3,800,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,000,000,000)
-
-
-
-
-
-
-
800,000,000
(3,800,000,000)
Notes:
1.
*
-
(2,000,000,000)
Figures in brackets indicate amounts pertaining to the previous year ended 31 March, 2010.
Includes step down subsidiaries
228
#
@
Includes subsidiary of fellow subsidiary
Includes entities over which key managerial personnel and their relatives exercise significant
influence.
**
Includes joint ventures of step down subsidiaries.
229
20. Disclosure required by Clause 32 of the Listing Agreement
Amount of loans and advances in nature of loans outstanding from subsidiaries, associates and companies
in which directors are interested as per section 299 of the Companies Act, 1956:
Sr.
No.
Limited
iNews.com Limited
Newswire18 Limited
Infomedia 18 Limited
Holding
Company
Subsidiary
Subsidiary
Subsidiary
4,639,757
Maximum amount
outstanding during
the year
(Rs.)
57,200,166
6,799,183
137,258,095
10,887,209
6,799,183
137,351,196
332,384,842
Subsidiary
73,006,175
73,012,593
6.
7.
8.
9.
10.
11.
Television Eighteen
Commoditiescontrol.com Limited
e-Eighteen.com Limited
Web18 Holdings Limited
ibn18 Broadcast Limited
RRB Investments Private Limited
1,834,517
656,115,618
6,830
14,979,525
52,054,430
13,437,532
68,197,872
686,812,180
6,830
72,038,934
52,054,431
14,445,980
12.
6,713,378
10,545,726
13.
14.
Digital18 Media Limited
Television Eighteen Mauritius
Limited
Greycells18 Media Limited
Subsidiary
Subsidiary
Subsidiary
Associate
Subsidiary
Entity in which
directors are
interested
Entity in which
directors are
interested
Subsidiary
Subsidiary
24,000,968
49,977,967
27,636,335
49,977,967
Subsidiary
Entity in which
directors are
interested
1,711,440,041
5,208,679
1,711,440,041
5,208,679
1.
2.
3.
4.
5.
15.
16.
Name of the Related Party
Relationship
Outstanding as at
31 March, 2011
(Rs.)
21.
As at year end the stake of RVT Investments Private Limited, a wholly owned subsidiary of Television
Eighteen India Limited, in the paid up capital of its associate ibn18 Broadcast Limited (IBN) (formerly
Global Broadcast News Limited, was 21.03% (previous year – 21.17%) of the paid up capital of the
ibn18 Broadcast Limited (IBN), a listed company.
22.
Pursuant to the Scheme of Arrangement between the Company, SGA News Limited and Network18
Fincap Private Limited (now known as 'Network18 Media & Investments Limited’) as approved by the
Hon’ble High Court of Delhi in 2006, shares of Network18 Media & Investments Limited (formerly
Network18 Fincap Private Limited) held by the promoter were transferred to the trust for the benefit of
the Company. Other income for the year ended 31 March, 2011 includes Rs. 220 million (previous year
Rs. 217.4 million) relating to distribution of surplus from the trust.
23.
Utilisation of Right Issue Proceeds
The Company had utilised the gross issue proceeds received during the year ended 31 March, 2011 on
issue of 60,007,121 equity shares of Rs. 5 each at a premium of Rs. 79 per share in the following
manner:
230
Particulars
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Rights Issue proceeds
Repayment of term loan
Investment in Infomedia rights issue
Investment in proposed ventures with Forbes Media LLC
Invest in acquisitions and other strategic initiatives in media
General corporate purpose
Rights issue expenses
Closing balance of unutilised proceeds as at the year end
Details of unutilised proceeds are given below:
-Investments in mutual funds
-Balance in current accounts
Year ended
31.03.2011
(Rs.)
5,008,791,849
3,000,000,000
450,000,000
240,000,000
350,000,000
690,598,000
250,000,000*
28,193,849
Year ended
31.03.2010
(Rs.)
4,943,931,408
750,000,000
450,000,000
350,000,000
162,958,402
3,230,973,006
28,193,849
2,085,973,038
1,144,999,968
28,193,849
3,230,973,006
*Includes Rs. 87,042,000 utilised for repayment of commercial paper as the right issue expenses aggregated to
Rs. 162,958,000
24.
Foreign Currency Exposure and Derivative Contract
The Company’s foreign currency exposure not hedged by a derivative instrument or otherwise as on 31
March, 2011 is as follows:
Currency
USD
GBP
25.
Payables
3,819,647
15,463
Rupee equivalent (Rs.)
170,547,246
1,112,268
Receivables
5,717,509
550
Rupee equivalent (Rs.)
255,286,777
39,561
Segmental reporting
The Company is engaged in the media business and operations include production and telecast of
business news and operations.
Secondary segmental reporting is performed on the basis of the geographical location of customers.
The Company provides services overseas primarily in Mauritius, United Kingdom, Singapore and
others.
Geographical revenues are segregated based on the location of the customer who is invoiced or in
relation to which the revenue is otherwise recognised.
(Amounts in Rupees)
Details
Within India
Overseas
Total
Mauritius
Others
Segment revenue
3,763,309,888
87,851,249
3,851,161,137
(3,360,128,608)*
(39,809,934)
(3,399,938,542)
Segment assets
17,872,519,056
171,648,503
83,677,835
18,127,845,394
(19,193,912,903)
(218,672,216)
(51,977,559)
(19,464,562,678)
Additions to fixed assets
70,716,861
(28,678,352)
* excludes prior period revenue of Rs. Nil million (previous year Rs. 8.56 million).
26.
70,716,861
(28,678,352)
Disclosures as per Micro, Medium and Small Enterprises Development Act, 2006 (MSMED)
Based on the information available with the Company, the balance due to micro and small enterprises
as defined under the MSMED Act, 2006 is Rs. Nil (Previous year Rs. Nil) and no interest has been paid
or is payable under the terms of the MSMED Act, 2006.
231
27.
Interest in Joint Venture
The Company’s interest in jointly controlled entities is:
Name
Jagran 18 Publication Limited
(Jagran)
Country of
Incorporation
India
Percentage of ownership
interest as at 31.03.2011
50%
Percentage of ownership
interest as at 31.03.2010
50%
The Company’s interest in this Joint Venture is reported as Unquoted Long Term Investment (Schedule
7) and stated at cost less provision for diminution other than temporary, if any, in the value of such
investment. The Company’s share of each of the assets, liabilities, income and expenses, etc. (each
without elimination of the effect of transactions between the Company and the Joint Venture) related to
its interest in this joint venture is:
Particulars
A.
C.
D.
28.
Assets
Fixed assets
Current Assets, Loans and Advances:
- Cash and bank balance
- Account receivable
- Loans and advances
Profit and loss account (Debit balance)
Current liabilities and provisions
Unsecured loans
Expenditure
Preoperative /Preliminary expenses written off
Other Matters
Capital commitments
As at
31.03.2011
(Rs.)
As at
31.03.2010
(Rs.)
Nil
329,668
294
1,229,669
10,214
17,292,653
54,317
8,228,513
294
900,000
10,214
17,286,928
51,817
8,225,288
5,725
1,461,955
Nil
Nil
Previous year’s figures have been regrouped /reclassified, wherever necessary to conform to the current
year’s presentation.
Raghav Bahl
Managing Director
R.D.S.Bawa
Noida
30 May, 2011
232
Whole Time Director
Anil Srivastava
Senior VP - Corporate Affairs &
Company Secretary
SUMMARY FINANCIAL INFORMATION OF EQUATOR
CHARTERED ACCOUNTANTS’ REPORT
TO THE BOARD OF DIRECTORS OF EQUATOR TRADING ENTERPRISES PRIVATE LIMITED
1.
This Chartered Accountants’ Report is issued pursuant to the requirements of Part E of Schedule VIII of the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009
(“SEBI Regulations”), as amended, issued by the Securities and Exchange Board of India (“SEBI”).
2.
We have examined the attached Summary Financial Information (“SFI”) of Equator Trading Enterprises
Private Limited (“Equator”), proposed to be incorporated in Offer Documents of TV18 Broadcast Limited
(“TV18”) and Network18 Media & Investments Limited (“Network18”) in connection with their proposed
Right Issues of equity shares.
3.
We understand that part of the proceeds of the proposed Right Issue of TV18 is to be utilized for acquiring
Equity Securities representing 100% of the fully diluted share capital of Equator and that the Equator owns
the Equity Securities representing the fully diluted share capital of almost 100% of Panorama Television
Private Limited, 50% of Prism TV Private Limited and 24.5% of Eenadu Television Private Limited.
4.
We have been informed that the Summary Financial Information of Equator is prepared by Equator’s
Management in accordance with Indian Generally Accepted Accounting Principles (“GAAP”) and we
confirm that this Chartered Accountants’ report is issued in compliance with the ‘Guidance Note on Audit
Reports and Certificates For Special Purpose’ issued by the Institute of Chartered Accountants of India
(“ICAI”).
5.
We have examined the Summary Financial Information taking into consideration the Terms of reference of
Equator, vide their letter dated 14-08-2012 appointing A.K. Sabat & Co., Chartered Accountants, to carry out
the assignment on such Summary Financial Information of Equator, proposed to be included in Offer
Documents being issued by TV18 and Network18 for their proposed Right Issue.
6.
The Attached Summary Financial Information read with ‘ Statement of Accounting Policies and Notes
Annexed to and forming Integral part of Summary Financial Information – Annexure 2 ’ approved by the
Board of Directors of Equator consists of the following:
a.
Statement of Assets and Liabilities as at 31st March, 2009, 2010, 2011 and 2012 of Equator - Annexure
1(a);
b.
Statement of Profit and Loss for the year ended 31st March, 2009, 2010, 2011 and 2012 of Equator Annexure 1(b); and
c.
Statement of Accounting Policies and Notes Annexed to and forming Integral part of Summary
Financial Information - Annexure 2.
7.
We have verified the Summary Financial Information relying on the statutorily audited financials of Equator
as at and for the years ended 31st March, 2009, 2010 and 2011 statutorily audited by Arun Arora & Co.,
Chartered Accountants and as at and for the year ended 31 st March 2012 statutorily audited by us, A.K. Sabat
& Co., Chartered Accountants.
8.
We have not conducted any audit of the accounts of Equator for the years ended 31 st March, 2009, 2010 and
2011. Accordingly, we do not express any opinion on the financial position or results of operations of
Equator for the above respective years.
9.
This Chartered Accountant’s Report should not in any way be construed neither as a restated or reissued or
re-dated Report of any of the previous Audit Reports issued by the Statutory Auditors and other Firm of
Chartered Accountants nor as to a new opinion on any of the Summary Financial Information referred to
herein.
233
10. This Chartered Accountant’s Report is intended solely for the information of Equator and for inclusion in
Offer Documents in connection with the proposed Right Issue of TV18 and Network18 and is not to be relied
upon or disclosed or used or referred to or distributed for any other purpose without our prior written
commitment.
Place : Hyderabad
Date : 22.08.2012
For A.K. Sabat & Co.
(Firm Registration No. 321012E)
(D. Vijaya Kumar)
Partner
Membership No. : 051961
234
Annexure 1 (a)
EQUATOR TRADING ENTERPRISES PRIVATE LIMITED
STATEMENT OF ASSETS AND LIABILITIES AS AT MARCH 31, 2009, 2010, 2011 and 2012
As at
31.03.2009
Shareholders' funds
Share capital
Non-Current Liabilities
Long-term borrowings
Current liabilities
TOTAL
As at
31.03.2010
As at
31.03.2011
(in Million Rs.)
As at
31.03.2012
2,000.00
(6.15)
1,993.85
2,000.00
(10.77)
1,989.23
2,000.00
(15.03)
1,984.97
2,000.00
(19.98)
1,980.02
12,570.00
12,570.00
12,570.00
13,006.50
0.02
0.02
0.04
14,563.89
0.02
0.06
0.08
14,559.31
0.02
0.11
0.13
14,555.10
0.93
0.04
0.97
14,987.49
14,542.73
14,542.73
14,542.73
14,978.25
3.52
17.64
21.16
14,563.89
3.35
13.23
16.58
14,559.31
3.53
8.84
12.37
14,555.10
4.80
4.44
9.24
14,987.49
ASSETS
Non-current assets
Non-Current investments
Current assets
TOTAL
Note:
1. This Statement of Assets and Liabilities are the Financial Information from the Statutorily audited
statements of Equator Trading Enterprises Private Limited.
2. This Statement of Assets and Liabilities read with ' Statement of Accounting Policies and Notes Annexed to
and forming part of Summary Financial Information - Annexure 2 ' form part of Summary Financial
Information referred in Chartered Accountants' Report issued in this regard.
As per our report of even date attached
For A.K.Sabat & Co.
For Equator Trading Enterprises Private Limited
D. VIJAYA KUMAR
Partner
Place : Hyderabad
Date : 22-08-2012
Director
235
Annexure 1 (b)
EQUATOR TRADING ENTERPRISES PRIVATE LIMITED
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2009, 2010, 2011 and
2012
(in Million Rs.)
Period ended
Year ended
Year ended Year ended
31.03.2009
31.03.2010
31.03.2011
31.03.2012
Other Income
Interest income
0.12
0.24
0.24
0.33
Dividend income
0.17
Total Revenue
0.29
0.24
0.24
0.33
Expenses
Loss on sale of investments
1.96
Auditor's remuneration
0.02
0.02
0.02
0.91
Other expenses
0.02
0.36
0.01
0.04
Preliminary expenses written off
4.40
4.40
4.40
4.40
Total expenses
6.40
4.78
4.43
5.35
Profit/(Loss) before Tax
Tax expense
Tax for current year
Tax for previous year
Loss for the year
Earnings per Equity share
Basic
Diluted
(6.11)
(4.54)
(4.19)
(5.02)
0.04
0.07
(6.15)
(4.61)
0.07
(4.26)
(0.07)
(4.95)
(0.0030)
(0.0023)
(0.0023)
(0.0018)
(0.0021)
(0.0016)
(0.0025)
(0.0003)
Note:
1.
This Statement of Profit and Loss are the Financial Information from the Statutorily audited statements of
Equator Trading Enterprises Private Limited.
2.
This Statement of Profit and Loss read with ' Statement of Accounting Policies and Notes Annexed to and
forming part of Summary Financial Information - Annexure 2 ' form part of Summary Financial
As per our report of even date attached
For A.K.Sabat & Co.
For Equator Trading Enterprises Private Limited
D. VIJAYA KUMAR
Partner
Place : Hyderabad
Date : 22-08-2012
Director
236
Annexure 2
STATEMENT OF ACCOUNTING POLICIES AND NOTES ANNEXED TO AND FORMING
INTEGRAL PART OF SUMMARY FINANCIAL INFORMATION
(All amounts are in Million Indian Rupees except otherwise stated)
A.
NATURE OF OPERATIONS
1.
Equator Trading Enterprises Private Limited (“Equator”), a company registered under Indian
Companies Act,1956, holds the following investments :
a.
24.5% Equity Securities in Eenadu Television Private Limited (“Eenadu”), a company
registered under Indian Companies Act, 1956 ;
b.
50% Equity Securities in Prism TV Private Limited (“Prism”), a company registered under
Indian Companies Act, 1956 ; and
c.
Almost 100% Equity Securities in Panorama Television Private Limited (“Panorama”), a
company registered under Indian Companies Act, 1956.
“Equity Securities” means equity shares or other securities convertible into, or exercisable or
exchangeable for, equity shares.
2.
As of March 31, 2012, 100% equity shares of Equator are held by Altitude Mercantile Private
Limited (‘Altitude’), a company registered under Indian Companies Act, 1956 and 100%
Compulsorily Convertible Debentures (“CCDs”) of Equator are held by Arimas Trading Private
Limited (‘Arimas’), a company registered under Indian Companies Act, 1956. Subsequently i.e.
after March 31, 2012, 100% equity shares of Equator have been transferred and are held by
Arimas.
3.
Eenadu is presently engaged in the business of production of programs and broadcasting satellite
television in Telugu language under two Channels - ETV Telugu and ETV-2 and undertakes
distribution/transmission of its satellite channels to various cable operators and direct to home
(DTH) service providers. Prior to 1st April, 2010, Eenadu’s business was part of the Television
Broadcasting Business Division of Ushodaya Enterprises Private Limited (“Ushodaya”).
4.
Prism is presently engaged in the business of production of programs and broadcasting satellite
television in various regional languages under five Channels - ETV-Marathi, ETV-Bangla, ETVGujarati, ETV-Kannada and ETV-Oriya and undertakes distribution / transmission of its satellite
channels to various cable operators and direct to home (DTH) service providers. Prior to 1 st April,
2010, Prism’s business was part of the Television Broadcasting Business Division of Ushodaya.
5.
Panorama is presently engaged in the business of production of programs and broadcasting satellite
television in Hindi and Urdu languages under five Channels - ETV-Rajasthan, ETV-Bihar, ETVMP, ETV-UP and ETV-URDU and undertakes distribution / transmission of its satellite channels
to various cable operators and direct to home (DTH) service providers. Prior to 1st April, 2010,
Panorama’s business was part of the Television Broadcasting Business Division of Ushodaya.
237
B.
SIGNIFICANT ACCOUNTING POLICIES
1.
Basis of Preparation
i.
The Summary Financial Information of Equator as at and for the years ended 31 st March,
2009, 2010, 2011 and 2012 have been prepared by the Management of Equator by extracting
from the statutorily audited financials of Equator as at and for the years ended 31 st March,
2009, 2010 and 2011 audited by Arun Arora & Co., Chartered Accountants and as at and for
the year ended 31st March, 2012 audited by us, A K Sabat & Co., Chartered Accountants.
ii.
The Summary Financial Information of Equator has been prepared to comply in all material
aspects with the Accounting Standards issued by Institute of Chartered accountants of India,
Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies
Act, 1956, to the extent applicable. The Summary Financial Information has been prepared
under the historical cost convention on an accrual basis.
iii.
The Summary Financial Information has been prepared to comply in all material respects with
the requirements of Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (“SEBI Regulations”), as amended, issued by the Securities
and Exchange Board of India (“SEBI”).
iv.
The Summary Financial Information read with ‘Statement of Accounting Policies and Notes
Annexed to and forming Integral part of Summary Financial Information – Annexure 2’ has
been prepared in connection with proposed Right Issues of equity shares to be made by TV 18
and Network18 to present the Financial Information and results of operations of Equator.
2.
Use of estimates
The preparation of financial statements requires estimates and assumptions to be made that affect
the reported amount of assets and liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference between the actual
results and estimates are recognised in the period in which the results are known/ materialised.
3.
Borrowing costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are
capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other borrowing costs are charged to
Profit and Loss account.
4.
Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An
impairment loss is charged to the Profit and Loss Account in the year in which an asset is
identified as impaired. The impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
5.
Investments
Current investments are carried at lower of cost and quoted/fair value, computed category wise.
Long Term Investments are stated at cost. Provision for diminution in the value of long-term
investments is made only if such a decline is other than temporary.
238
6.
Revenue recognition
Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or
collection.
Dividend income is recognized when the right to receive dividend is established.
Interest on deployment of funds is recognised using the time-proportion method basis taking into
account the amount outstanding and rate applicable.
7.
Income tax
Provision for current tax is made after taking into consideration benefits admissible under the
provisions of the Income-tax Act, 1961. Deferred tax resulting from “timing difference” between
taxable and accounting income is accounted for using the tax rates and laws that are enacted or
substantively enacted as on the balance sheet date.
Deferred tax asset is recognised and carried forward only to the extent that there is a virtual
certainty that the asset will be realised in future.
8.
C.
Provisions and contingent liabilities
Provisions involving substantial degree of estimation in measurement are recognized when there is
a present obligation as a result of past events and it is probable that there will be an outflow of
resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent
Assets are neither recognized nor disclosed in the financial statements.
NOTES TO SUMMARY FINANCIAL INFORMATION
1.
Equator operates solely in one segment and hence no separate segment information provided.
2.
Related party Disclosure:
a)
Related party and their relationship
Altitude Mercantile Private Limited - Holding Company
b) Transactions – NIL
3.
Earnings per share
As at 31.03.2012
Net (Loss) for the
period attributable to
Equity shareholders
(Rupees)
Weighted average
outstanding during the
period (Nos.)
Add, weighted average
number of convertible
debentures
Weighted average
outstanding during the
period for diluted
earnings per share
Basic earnings per
share (Rupees)
Diluted earnings per
share (Rupees)
As at 31.03.2011
(4,945,542)
(4,266,345)
As at
31.03.2010
(4,615,006)
2,000,000,000
2,000,000,000
2,000,000,000
2,000,000,000
12,570,000,000
628,500,000
628,500,000
628,500,000
14,570,000,000
2,628,500,000
2,628,500,000
2,628,500,000
(0.0025)
(0.0021)
(0.0023)
(0.0030)
(0.0003)
(0.0016)
(0.0018)
(0.0023)
239
As at 31.03.2009
(6,150,681)
As at 31.03.2012
Nominal Value Per
Share (Re.)
As at 31.03.2011
1
As at
31.03.2010
1
As at 31.03.2009
1
For and on behalf of the Board of Directors of
As per our report of even date
Equator Trading Private Limited
A.K. Sabat & Co.
Director
(D.Vijaya Kumar)
Partner
Place: Hyderabad
Date: 22-08-2012
240
1
SUMMARY FINANCIAL INFORMATION OF PANORAMA, PRISM AND EENADU
CHARTERED ACCOUNTANTS’ REPORT
TO THE BOARD OF DIRECTORS OF EQUATOR TRADING ENTERPRISES PRIVATE LIMITED
1.
This Chartered Accountants’ Report is issued pursuant to the requirements of Part E of Schedule VIII of the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009
(“SEBI Regulations”), as amended, issued by the Securities and Exchange Board of India (“SEBI”).
2.
We have examined the attached Summary Financial Information (“SFI”), proposed to be incorporated in
Offer Documents of TV18 Broadcast Limited (“TV18”) and Network18 Media & Investments Limited
(‘Network18’) in connection with their proposed Right Issues of equity shares, as per Notes given below in
respect of :
a.
b.
c.
Eenadu Television Private Limited (“Eenadu”) - Note (i) ;
Prism TV Private Limited (“Prism”) - Note (ii) ; and
Panorama Television Private Limited (“Panorama”) - Note (iii)
Note:
3.
i.
television in Telugu language under Two Channels - ETV Telugu and ETV-2 and undertakes
distribution/transmission of its satellite channels to various cable operators and direct to
home(DTH) service providers. Prior to 1st April, 2010, Eenadu’s business was part of the Television
Broadcasting Business Division of Ushodaya Enterprises Private Limited (“Ushodaya”). Eenadu
entered into a Scheme of Arrangement (“Scheme”) with Ushodaya (Demerged Company) under
section 391 to 394 of the Companies Act, 1956, sanctioned and confirmed by the Andhra Pradesh
High Court, for the demerger of business relating to Telugu regional channels (“Telugu Regional
Undertaking”) which are transferred and vested with Eenadu, on a going concern basis, with effect
from 1st April, 2010 (Appointed Date as per the Scheme);
ii.
television in various regional languages under Five Channels - ETV-Marathi, ETV-Bangla, ETVGujarati, ETV-Kannada and ETV-Oriya and undertakes distribution/ transmission of its satellite
2010, Prism’s business was part of the Television Broadcasting Business Division of Ushodaya
Enterprises Private Limited (“Ushodaya”). Prism entered into a Scheme of Arrangement
(“Scheme”) with Ushodaya (Demerged Company) under section 391 to 394 of the Companies Act,
1956, sanctioned and confirmed by the Andhra Pradesh High Court, for the demerger of business
relating to Non-Telugu regional channels (“Non Telugu Regional Undertaking”) which are
transferred and vested with Prism, on a going concern basis, with effect from 1st April, 2010
(Appointed Date as per the Scheme) ; and
iii.
television in Hindi and Urdu languages under Five Channels - ETV-Rajasthan, ETV-Bihar, ETVMP, ETV-UP and ETV-URDU and undertakes distribution/ transmission of its satellite channels to
various cable operators and direct to home(DTH) service providers. Prior to 1 st April, 2010,
Panorama’s business was part of the Television Broadcasting Business Division of Ushodaya
Enterprises Private Limited (“Ushodaya”). Panorama entered into a Scheme of Arrangement
(“Scheme”) with Ushodaya (Demerged Company) under section 391 to 394 of the Companies Act,
1956, sanctioned and confirmed by the Andhra Pradesh High Court, for the demerger of business
relating to Hindi and Urdu channels (“Hindi and Urdu Undertaking”) which are transferred and
vested with Panorama, on a going concern basis, with effect from 1 st April, 2010 (Appointed Date
as per the Scheme).
We understand that part of the proceeds of the proposed Right Issue of TV18 is to be utilized for acquiring
Equity Securities representing 100% of the fully diluted share capital of Equator Trading Enterprises
Private Limited and that the Equator owns the Equity Securities representing the fully diluted share capital
241
of almost 100% of Panorama Television Private Limited, 50% of Prism TV Private Limited and 24.5% of
Eenadu Television Private Limited.
4.
We have been informed that the Summary Financial Information of Eenadu, Prism and Panorama is
prepared by their respective Managements in accordance with Indian Generally Accepted Accounting
Principles (“GAAP”) and we confirm that this Chartered Accountants’ Report is issued in compliance with
the “Guidance Note on Audit Reports and Certificates For Special Purpose” issued by the Institute of
Chartered Accountants of India (“ICAI”) and is on the following basis:
i.
ii.
Summary Financial Information for year ended 31 stMarch, 2011 and from the Statutorily Audited
accounts; and
Summary Financial Information for the year ended 31 st March, 2008, 2009 and 2010 are the
Financial Information of the Telugu Regional Undertaking, Non-Telugu Regional Undertaking
and Hindi and Urdu Undertaking of Ushodaya’s Television Broadcasting Business Division for
the respective years with the assistance of the Management of Ushodaya from the Statutorily
Audited books of accounts and Auditors’ Certified Segmented Accounting Statements “ETV
Telugu Channel, ETV Other Channels and ETV Pay Channels” of the Television Broadcasting
Business Division of Ushodaya.
5.
We have examined the Summary Financial Information taking into consideration the Terms of reference of
Equator, vide their letter dated 14-08-2012 appointing A.K. Sabat & Co., Chartered Accountants, to carry
out the assignment on such Summary Financial Information of Eenadu, Prism and Panorama, proposed to
be included in Offer Documents being issued by TV18 and Network18 for their proposed Right Issue.
6.
The Attached Summary Financial Information read with ‘Statement of Accounting Policies and Notes
Annexed to and forming Integral part of Summary Financial Information - Annexure 4’ approved by the
Board of Directors of Eenadu, Prism and Panorama consists of the following:
7.
i.
Statement of Assets and Liabilities as at 31st March, 2008, 2009, 2010, 2011 and 2012 of Eenadu
- Annexure 1(a) ;
ii.
Statement of Profit and Loss for the year ended 31 st March, 2008, 2009, 2010, 2011 and 2012 of
Eenadu - Annexure 1(b) ;
iii.
Statement of Assets and Liabilities as at 31st March, 2008, 2009, 2010, 2011 and 2012 of Prism Annexure 2(a) ;
iv.
Prism - Annexure 2(b) ;
v.
Statement of Assets and Liabilities as at 31st March, 2008, 2009, 2010, 2011 and 2012 of
Panorama - Annexure 3(a) ;
vi.
Panorama - Annexure 3(b) and
vii.
Statement of Accounting Policies and Notes Annexed to and Forming Integral Part of Summary
Financial Information - Annexure 4.
We have verified the Summary Financial Information as at and for the year ended 31 st March, 2012,
statutorily audited by us, A.K. Sabat & Co., Chartered Accountants and have relied on the following :
i.
Information pertaining to as at and for the year ended 31 st March, 2011 on the statutorily Audited
Financials of Eenadu, Prism and Panorama statutorily audited by S R Batliboi & Co., Chartered
Accountants; and
ii.
Information pertaining to the year ended 31st March, 2008, 2009 and 2010 on the Statutorily
Audited books of accounts and Auditors’ Certified Segmented Accounting Statements “ETV
242
Business Division of Ushodaya, and as at for the year ended 31 st March, 2008, 2009 and 2010
jointly Audited by S R Batliboi & Co., and Brahmayya & Co., Chartered Accountants.
8.
We have not conducted any audit of :
i.
the Accounts of Eenadu, Prism and Panorama for the year ended 31st March, 2011 ; and
ii.
the Accounts of the Television Broadcasting Business Division of Ushodaya for year ended 31 st
March, 2008, 2009 and 2010.
Accordingly, we do not express any opinion on the financial position or results of operations of
Eenadu, Prism, Panorama and the Television Broadcasting Business Division of Ushodaya for the
above respective years.
9.
We have not made any adjustments to the Summary Financial Information for the changes in the
Accounting Policies from those adopted and Statutory Auditors qualifications in the Auditors’ Report of
Ushodaya, Eenadu, Prism and Panorama for the year ended 31 st March, 2008, 2009, 2010 and 2011.
10. This Chartered Accountant’s Report is not in any way be construed neither as a restated or reissued or redated of any of the previous Audit Reports issued by the other Firm of Chartered Accountants, Statutory
Auditors nor as to a new opinion on any of the Summary Financial Information referred to herein.
11. This Chartered Accountant’s Report is intended solely for the information of Equator and for inclusion in
Offer Documents in connection with the proposed Right Issue of TV18 and Network18 and is not to be
relied upon or disclosed or used or referred to or distributed for any other purpose without our prior written
commitment.
Place : Hyderabad
Date : 22-08-2012
(Firm Registration No. 321012E)
(D. Vijaya Kumar)
Partner
Membership No. : 051961
243
Annexure 1 (a)
EENADU TELEVISION PRIVATE LIMITED
STATEMENT OF ASSETS AND LIABILITIES AS AT 31st MARCH, 2008, 2009, 2010, 2011 and 2012
(in Million Indian Rupees)
As at
As at
As at
As at
As at
31-03-2008 31-03-2009 31-03-2010 31-03-2011 31-03-2012
Shareholders' Funds
Share capital
0.25
0.25
4,170.54
3,866.48
Inter-division balance
9,556.47
8,270.19
4,780.45
Current liabilities
Trade payables
Total
ASSETS
Non-current assets
Fixed assets
- Tangible assets
- Intangible assets
- Capital work-in-progress
Current assets
Inventories
Trade receivables
Cash and Bank balances
Short-term loan and advances
Total
0.67
11.08
0.37
5.76
811.17
9.70
5.89
248.49
15.71
3.14
98.53
85.59
2.46
116.25
78.72
1.27
77.17
769.03
0.29
172.36
898.66
0.25
5,248.24
82.41
56.67
0.33
4,270.34
9,755.48
8,473.75
6,448.79
305.70
8,030.56
35.29
322.58
6,703.40
1.35
281.40
5,342.01
9.80
237.15
3,983.85
8.65
21.17
43.72
220.45
2,609.15
0.55
21.01
33.31
51.85
433.50
760.27
135.64
2.67
9,755.48
91.57
469.39
763.74
107.33
14.39
8,473.75
62.38
495.60
196.57
60.78
0.25
6,448.79
73.76
461.05
330.91
84.72
3.26
5,248.24
75.07
589.22
338.07
380.65
2.86
4,270.34
Note:
1. This Statement of Assets and Liabilities are the Financial Information related to i) 31st March, 2008, 2009
and 2010 carved out from the Statutorily Audited books of accounts and Auditors' Certified Segmented
Accounting Statements "ETV Telugu Channel, ETV Other Channels and ETV Pay Channels" of the
Television Broadcasting Business Division of Ushodaya Enterprises Private Limited and ii) 31st March,
2011 and 2012 from Statutorily Audited Statements of the Undertaking.
2.
This Statement of Assets and Liabilities related to 31st March, 2008, 2009 and 2010 do not contain Deficit
balance in the Statement of Profit and Loss under 'Reserves and Surplus' as the same is appropriated under
'Inter-division balance', Ushodaya Enterprises Private Limited - Demerged Company.
3.
This Statement of Assets and Liabilities read with 'Statement of Accounting Policies and Notes Annexed to
and forming Integral part of Summary Financial Information - Annexure 4' form part of Summary Financial
244
EENADU TELEVISION PRIVATE LIMITED
Annexure 1 (b)
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2008, 2009, 2010, 2011
and 2012
Year
Year
Year
Year
Year
ended
ended
ended
ended 31ended 3131-0331-0331-0303-2011
03-2012
2008
2009
2010
Sale of trading Products
10.64
1.96
1.91
2.90
2.56
Sale of services
1,388.00
1,456.14
1,480.37
1,756.28
2,071.63
Other operating revenues
0.43
0.43
0.11
0.39
6.14
Total revenue from operations
1,399.07
1,458.53
1,482.39
1,759.57
2,080.33
Other income
Total Revenue
42.18
1,441.25
59.25
1,517.78
31.57
1,513.96
15.16
1,774.73
14.69
2,095.02
Expenses
Production costs
Purchases of stock-In-trade (Traded
goods)
Change in inventory of stock-In-trade
Employee benefits expense
Finance costs
Depreciation and amortisation expense
Other expenses
433.69
492.29
517.81
587.18
641.70
3.36
5.78
117.61
2.71
1,436.63
98.18
17.79
(13.02)
130.59
169.95
1,440.40
96.52
17.27
127.06
234.90
1,435.92
122.12
1.48
0.38
116.07
141.54
1,437.48
114.91
1.46
(0.81)
139.62
59.44
1,434.39
123.27
Total Expenses
2,097.96
2,334.52
2,455.08
2,399.04
2,399.08
Loss before prior period items
(656.71)
(816.74)
(941.12)
(624.31)
(304.06)
Prior year expenses
Loss before tax
8.36
1.74
(665.07)
(816.74)
(942.86)
(624.31)
(304.06)
Loss for the period
(665.07)
Earnings per equity share of Rs. 10 each (in Rs.)
Basic
Diluted
(816.74)
(942.86)
(624.31)
(304.06)
(24,622.00)
(24,622.00)
(11,992.00)
(87.00)
Tax expense
Note:
1. This statement of Profit and Loss are the Financial Information related to (i) 31st March, 2008, 2009 and
2010 carved out from the Statutorily Audited books of accounts and Auditors' Certified Segmented
Television Broadcasting Business Division of Ushodaya Enterprises Private Limited and (ii) 31st March,
2.
This Statement of Profit and Loss read with 'Statement of Accounting Policies and Notes Annexed to and
forming Integral part of Summary Financial information - Annexure 4' form part of Summary Financial
245
Annexure 2 (a)
PRISM TV PRIVATE LIMITED
As at
As at
As at
As at
As at
31-03-2008 31-03-2009 31-03-2010 31-03-2011 31-03-2012
Shareholders' Funds
Share capital
0.18
0.18
2,765.30
2,580.10
5,175.41
4,443.95
3,011.37
1.67
0.92
519.82
250.33
15.09
8.60
20.51
13.63
1.28
Current liabilities
67.51
94.52
103.14
58.74
52.02
Trade payables
163.64
206.52
93.66
224.96
206.54
124.35
138.39
388.51
668.96
143.79
0.62
0.32
Total
5,547.67
4,892.90
4,137.01
3,732.39
3,234.56
ASSETS
Non-current assets
Fixed assets
- Tangible assets
242.32
273.73
243.26
217.84
186.34
- Intangible assets
4,323.12
3,612.33
2,894.48
2,161.60
1,439.37
1.69
2.08
0.53
27.74
28.83
95.65
65.10
Current assets
Inventories
61.32
68.43
31.92
86.05
96.54
Trade receivables
754.84
819.19
845.07
830.71
951.24
81.62
33.85
52.86
52.74
103.85
84.45
85.37
67.73
257.98
360.83
1.93
Total
5,547.67
4,892.90
4,137.01
3,732.39
3,234.56
Note :
1.
This Statement of Assets and Liabilities are the Financial Information related to i) 31st March, 2008, 2009
2.
3.
246
Annexure 2 (b)
PRISM TV PRIVATE LIMITED
and 2012
Year ended
Year ended
Year ended Year ended Year ended
31-03-2008
31-03-2009
31-03-2010
31-03-2011
31-03-2012
27.91
4.30
1.96
1.08
0.87
Sale of services
2,263.05
2,354.95
2,579.22
2,658.41
2,931.00
1.07
1.80
0.63
0.96
1.07
Total revenue from
operations
2,292.03
2,361.05
2,581.81
2,660.45
2,932.94
Other income
21.01
20.83
14.97
9.57
12.28
Total Revenue
2,313.04
2,381.88
2,596.78
2,670.02
2,945.22
Expenses
Production costs
1,103.20
1,314.28
1,314.57
1,568.18
1,713.64
Purchases of stock-Intrade (Traded goods)
6.48
28.00
Change in inventory of
stock-In-trade
11.15
(18.35)
24.21
1.23
0.34
Employee benefits
expense
232.72
244.08
250.32
252.33
255.63
Finance costs
5.54
92.86
125.28
91.51
40.04
Depreciation and
amortisation expense
823.89
848.91
811.46
810.81
815.86
Other expenses
197.23
211.48
253.97
291.60
304.89
Total Expenses
2,380.21
2,721.26
2,779.81
3,015.66
3,130.41
Loss before prior period
(67.17)
(339.38)
(183.03)
(345.64)
(185.19)
items
Prior year expenses
1.85
2.92
Loss before tax
(69.02)
(339.38)
(185.95)
(345.64)
(185.19)
Tax expense
Loss for the period
(69.02)
(339.38)
(185.95)
(345.64)
(185.19)
Earnings per equity share of Rs. 10 each (in Rs.)
Basic
(19,054)
(10,209)
Diluted
(19,054)
(53)
Note:
1.
This statement of Profit and Loss are the Financial Information related to (i) 31st March, 2008, 2009 and
2.
247
Annexure 3 (a)
PANORAMA TELEVISION PRIVATE LIMITED
As at
31-03-2008
Shareholders' Funds
Share capital
Current liabilities
Trade payables
Total
ASSETS
Non-current assets
Fixed assets
- Tangible assets
- Intangible assets
Current assets
Inventories
Trade receivables
Total
As at
31-03-2009
As at
31-03-2010
As at
As at
31-03-2011 31-03-2012
0.13
396.86
0.13
512.59
7.57
249.47
0.62
47.53
136.66
12.63
959.63
476.06
471.39
456.29
1.67
9.58
0.92
5.59
23.62
10.79
9.35
24.01
16.00
11.25
46.40
52.65
10.87
77.67
48.33
536.67
588.20
627.57
5.71
231.21
86.35
0.17
728.00
250.14
191.02
259.88
157.97
216.48
124.95
205.37
92.76
2.87
51.77
12.42
56.06
10.47
16.56
9.89
143.62
2.58
14.26
536.67
588.20
12.77
244.70
3.98
19.60
5.09
627.57
10.71
320.13
10.66
33.73
728.00
166.92
59.64
0.37
2.93
87.31
7.31
433.92
37.46
161.81
1.96
959.63
Note:
1. This Statement of Assets and Liabilities are the Financial Information related to i) 31st March, 2008, 2009
2.
3.
248
Annexure 3 (b)
PANORAMA TELEVISION PRIVATE LIMITED
and 2012
Year ended
Year ended
Year ended
Year ended
Year ended
31-03-2008
31-03-2009
31-03-2010
31-03-2011
31-03-2012
0.87
0.75
0.44
0.15
Sale of services
177.35
290.84
431.70
738.09
822.04
1.07
1.09
0.29
0.96
0.01
Total revenue from
178.42
292.80
432.74
739.50
822.20
operations
Other income
6.26
8.97
1.43
16.89
40.57
Total Revenue
184.68
301.77
434.17
756.39
862.77
Expenses
Production costs
314.92
331.42
324.22
348.70
393.27
Purchases of stock-In-trade
2.29
4.06
3.56
(Traded goods)
Change in inventory of
3.94
(0.24)
(0.97)
(2.42)
1.08
stock-In-trade
Employee benefits expense
112.19
110.27
123.60
134.27
139.05
Finance costs
5.23
9.51
9.12
5.22
3.78
Depreciation and
96.85
96.25
89.59
83.29
84.14
amortisation expense
Other expenses
116.63
135.42
113.16
128.65
125.72
Total Expenses
652.05
686.69
658.72
701.28
747.04
Loss before prior period
(467.37)
(384.92)
(224.55)
55.11
115.73
items
Prior year expenses
1.49
2.92
Loss before tax
(468.86)
(384.92)
(227.47)
55.11
115.73
Tax expense
Minimum alternative tax
11.03
23.35
Minimum alternative tax
(11.03)
(23.35)
entitlement
Loss for the period
(468.86)
(384.92)
Earnings per equity share of
Rs. 10 each (in Rs.)
Basic
Diluted
(227.47)
55.11
115.73
4,330
4,330
9093
33
Note:
1. This statement of Profit and Loss are the Financial Information related to (i) 31st March, 2008, 2009 and
2.
249
Annexure 4
STATEMENT OF ACCOUNTING POLICIES AND NOTES ANNEXED TO AND FORMING
INTEGRAL PART OF SUMMARY FINANCIAL INFORMATION
(All amounts are in Million Indian Rupees except otherwise stated)
A. NATURE OF OPERATIONS
1.
Equator Trading Enterprises Private Limited (“Equator”), a company registered under Indian
Companies Act,1956, holds the following investments :
a.
24.50% Equity Securities in Eenadu Television Private Limited (“Eenadu”), a company registered
under Indian Companies Act,1956 ;
b.
50% Equity Securities in Prism TV Private Limited (“Prism”), a company registered under Indian
Companies Act, 1956 ; and
c.
Almost 100% Equity Securities in Panorama Television Private Limited (“Panorama”), a company
registered under Indian Companies Act, 1956.
d.
“Equity Securities” means equity shares or other securities convertible into, or exercisable or
exchangeable for, equity shares.
2.
100% equity shares of Equator and 100% Compulsorily Convertible Debentures (“CCDs”) of Equator
is held by Arimas Trading Private Limited (“Arimas”), a company registered under Indian Companies
Act, 1956.
3.
television in Telugu language under two Channels - ETV Telugu and ETV-2 and undertakes
distribution/transmission of its satellite channels to various cable operators and direct to home (DTH)
service providers. Prior to 1st April, 2010, Eenadu’s business was part of the Television Broadcasting
Business Division of Ushodaya Enterprises Private Limited (“Ushodaya”).
4.
television in various regional languages under five Channels - ETV-Marathi, ETV-Bangla, ETVGujarati, ETV-Kannada and ETV-Oriya and undertakes distribution / transmission of its satellite
2010, Prism’s business was part of the Television Broadcasting Business Division of Ushodaya.
5.
television in Hindi and Urdu languages under five Channels - ETV-Rajasthan, ETV-Bihar, ETV-MP,
ETV-UP and ETV-URDU and undertakes distribution / transmission of its satellite channels to various
cable operators and direct to home (DTH) service providers. Prior to 1 st April, 2010, Panorama’s
business was part of the Television Broadcasting Business Division of Ushodaya.
B. SIGNIFICANT ACCOUNTING POLICIES
1.
Basis of Preparation
i.
The Summary Financial Information for the year ended 31 st March 2008, 2009 and 2010 of
Eenadu, Prism and Panorama are carve-out Financial Information of the Telugu Regional
Undertaking, Non Telugu Regional Undertaking and Hindi and Urdu Undertaking from the
Television Broadcasting Business Division of Ushodaya for the respective years. These have been
prepared by the Managements of Eenadu, Prism and Panorama with the assistance of the
Management of Ushodaya by carving out/extracting from the Statutorily Audited books of
accounts and Auditors’ Certified Segmented Accounting Statements “ETV Telugu Channel, ETV
Other Channels and ETV Pay Channels” of the Television Broadcasting Business Division of
Ushodaya for the respective years using the principle assumptions for identification of Assets and
250
Liabilities and allocation of revenue and costs to the Television Broadcasting Business Division
and other adjustments. The basis of preparation of major items of Assets and Liabilities and
Income and Expenses are given in the subsequent sections.
ii.
The Summary Financial Information of Eenadu, Prism and Panorama have been prepared to
comply in all material aspects with the Accounting Standards issued by Institute of Chartered
accountants of India, Companies Accounting Standards Rules, 2006 and the relevant provisions
of the Companies Act, 1956, to the extent applicable. The Summary Financial Information has
been prepared under the historical cost convention on an accrual basis.
iii.
The Summary Financial Information has been prepared to comply in all material respects with the
requirements of Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 (“SEBI Regulations”), as amended, issued by the Securities and
Exchange Board of India (“SEBI”).
iv.
The Summary Financial Information read with ‘Statement of Accounting Policies and Notes
Annexed to and Forming Integral part of Summary Financial Information – Annexure 4’ has been
prepared in connection with proposed Right Issues of equity shares to be made by TV18
Broadcasting Limited (“TV 18”) and Network18 Media & Investments Limited (“Network18”) to
present the Financial Information and results of operations of Eenadu, Prism and Panorama.
2.
Use of estimates
The preparation of Financial Statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities and disclosure of contingent liabilities at the date of the Financial
Statements and the results of operations during the reporting period. Although these estimates are
based on Management’s best knowledge of current events and actions, actual results could differ
from these estimates.
3.
Fixed Assets
i.
Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any.
Cost comprises the purchase price and any attributed cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating to acquisition of fixed assets which
take substantial period of time to get ready for its intended use are also included to the extent
they relate to the period till such assets are ready to be put to use.
ii.
In respect of fixed assets till 31st March, 2010, value of assets directly identifiable with the
Telugu Regional Undertaking, Non Telugu Regional Undertaking and Hindi and Urdu
Undertaking is included in the respective Undertaking. Common assets of the Television
Broadcasting Business Division of Ushodaya are allocated to each of the Undertakings as per
the usage of the value of directly identifiable fixed assets of the respective Undertaking.
251
4.
5.
Depreciation
i.
Depreciation is provided using the Written down value method at the rates prescribed under
schedule XIV of the Companies Act, 1956.
ii.
Assets costing five thousand rupees or less are fully depreciated in the year of purchase.
iii.
Depreciation on the following assets is provided on straight line Basis and is based on useful
life as estimated by Management. The useful lives determined are as follows;
a.
Improvements to premises taken on lease are depreciated over the period of lease,
which is up to ten years or useful life, whichever is lower.
b.
Buildings constructed on leasehold land are depreciated over the primary period of lease
which is up to 30 years or useful life, whichever is lower.
Intangible assets
i.
Computer softwares
Costs incurred towards purchase of computer software are depreciated using straight line
method based on management’s estimate of useful lives of such software, which is for a
period of 3 years.
ii.
iii.
6.
7.
Film Telecast Rights
a.
Rights acquired for the broadcast of feature films are stated at cost and are amortized over
the period of agreement/ telecast rights or up to ten years, whichever is earlier.
b.
Intangible assets acquired from Ushodaya, as per agreement from Ushakiron Movies
(UKM) and Ushakiron Television (UKTV) are amortised on a straight line basis over a
period of ten years from the date of acquisition.
Other Intangibles
a.
Other intangibles acquired from Ushodaya Enterprises Private Limited, as per agreement
with M/s UKTV and UKM, are amortised on a straight line basis over a period of five
years from the date of such agreement.
b.
In respect of intangible assets till 31st March, 2010, (i) value of computer software is
allocated based on the value of fixed assets of each Undertaking (ii) value of film telecast
rights is directly identifiable with each of the Undertaking and (iii) Other intangible assets
of Television Broadcasting Business Division are allocated to each of the Undertaking in
the proportion of the value of the film telecast rights.
Impairment
i.
The carrying amounts of assets are reviewed at each balance sheet date if there is any
indication of impairment based on internal/external factors. An impairment loss is recognized
wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the asset’s net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value at the weighted average
cost of capital.
ii.
After impairment, loss is provided on the revised carrying amount of the asset over its
remaining useful life.
Leases
252
i.
of the leased term are classified as operating leases. Operating lease payments are recognized
as an expense in the Profit and Loss account.
ii. Till 31st March, 2010, Lease rentals of corporate offices of Television Broadcasting Business
Division are allocated in equal proportion to each of the Telugu Regional Undertaking, Non
Telugu Regional Undertaking and Hindi and Urdu Undertaking. Other lease rentals are
directly identifiable to each of the Undertaking.
8.
Inventories
i.
Trading materials, stores and spares, consumables and media
Trading materials, stores and spares, consumables and media are stated at the lower of cost and net
realizable value. Cost is determined on first in first out (FIFO) basis.
ii.
9.
Serial and programs costs
a.
Serials and programs purchased, produced in-house which are yet to be telecasted are carried at
cost. Cost includes amount paid to the producers for serials and programs purchased. Cost of
programs produced in-house includes remuneration to artists, directors and technicians, location
expenses and other production costs. Episodes of Serials and programs not telecasted for more
than one year, provision is made.
b.
Serials and programs purchased are expensed off when the related program is telecasted. Costs of
serials and programs produced in-house are expensed off basing on number of episodes
telecasted during the period. Cost of news/current affairs/one-time events are fully expensed on
first telecast.
Sundry Debtors
Till 31st March, 2010, value of debtors relating to the advertisement income is directly identifiable
with each of the Undertakings. Other debtors of Television Broadcasting Business Division are
also identifiable specifically to specific channels.
10. Cash and Bank
Till 31st March, 2010, the Cash and Bank balances of Telugu Regional, Non Telugu Regional and
Hindi and Urdu Undertakings are maintained channel-wise in the respective Undertaking, except
Cash and Bank accounts relating to corporate office and few branches are taken in Telugu
Regional Undertaking.
11. Other current assets
Till 31st March, 2010, value of interest accrued of Television Broadcasting Business Division on
bank deposits is allocated to each of the Undertaking in proportion to the value of fixed deposit of
each undertaking. Value of other current assets of Television Broadcasting Business Division is
allocated to each of the Undertaking based on pertinence of assets to the respective Undertaking.
12. Loans and advances
Till 31st March, 2010, value of loans and advances of Television Broadcasting Business Division is
equally distributed to each of channels. Value of other Loans & advances of Television
Broadcasting Business Division is allocated to each of the undertaking based on pertinence of
assets to the respective Undertaking.
13. Current liabilities
253
Till 31st March, 2010, (i) value of creditors for purchasing content and certain expenses directly
related to each of the Undertaking is included in the respective Undertaking (ii) Common creditors
of Television Broadcasting Business Division for purchasing content is allocated based on the
proportion of content cost (iii) other common current liabilities of Television Broadcasting
Business Division are equally distributed to each of channels of the Undertaking, except those
which are not identifiable (not material) are taken in Telugu Regional Undertaking.
14. Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company/Undertaking and the revenue can be reliably measured. Specifically the following basis
is adopted:
i.
Advertisement income
Advertising income is recognized when the related commercial or programme is telecast on
the channels.
ii.
Televoting / SMS income
Televoting / SMS income is recognized as per the terms of the contract with the mobile
service provider and the production house.
iii.
Subscription income
Subscription income from pay channels represents subscription fees billed to cable operators,
direct to home (DTH) service providers towards pay-channels operated by the
Company/Undertaking, and are recognized in the period during which the service is provided.
Subscription fees are determined based on management’s best estimates of the number of
subscribers to which the service is supplied, at contractually agreed rates. Subscription income
from DTH customers is recognized in accordance with the terms of agreements entered into
with the service providers.
iv.
Deferred revenue
Billings in excess of revenue recognized are disclosed as “Deferred revenue” under current
liabilities.
v.
Interest income
Interest income is recognized on a time proportion basis taking into account the amount
vi.
Till 31st March, 2010, (i) value of sale of service is directly identifiable to the channel is
reported in the respective Undertaking (ii) Sale of product is based on the number of decoders
sold in each of the channels and (iii) value of other income of Television Broadcasting
Business Division are equally distributed to each of channels.
15. Telecasting and other expenses
Till 31st March, 2010, (i) value of programming cost directly identifiable to the channel is reported
in the respective Undertaking (ii) common programming cost of Television Broadcasting Business
Division are equally distributed to each of the channels in which such common program is telecast
(iii) news service charges of Television Broadcasting Business Division are allocated to each of
the Undertakings in the ratio 40:40:20 based on the head count of Telugu Regional, Non Telugu
Regional and Hindi and Urdu Undertaking and (iv) value of other expenses of Television
Broadcasting Business Division are equally distributed to each of channels.
16. Personnel expenses
254
Till 31st March, 2010, (i) cost of employees directly identified to each of the Undertaking is
reported in respective Undertaking and (ii) cost of common employees of Television Broadcasting
Business Division is allocated based on management estimates.
17. Administrative expenses
Till 31st March, 2010, value of administrative expenses of Television Broadcasting Business
Division is equally distributed to each of channels.
18. Finance charges
Till 31st March, 2010, (i) interest on term loans is allocated to each of the Undertaking based on
value of film telecast rights (ii) interest on working capital of Television Broadcasting Business
Division is equally distributed to each of the Undertaking and (iii) other finance charges of
Television Broadcasting Business Division is equally distributed to each of the channels.
19. Foreign currency translation
Foreign currency transactions
i.
Initial Recognition
Foreign currency transaction are recorded in the reporting currency, by applying to the foreign
currency amounts the exchange rate between the reporting currency and the foreign currency
at the date of the transaction.
ii.
Conversion
Foreign currency monetary items are reported using the closing rate.
iii.
Exchange Differences
Exchange difference arising on the settlement of monetary items or on reporting monetary
items of Undertaking at rates different from those at which they were initially recorded during
the year, or reported in previous financial statements, are recognized as income or as expenses
in the year in which they arise.
20. Retirement and other employee benefits
i.
Retirement benefits in the form of Provident Fund are a defined contribution scheme and the
contributions are charged to the Profit and Loss Account of the year when the contributions to
the respective funds are due. There are no other obligations other than the contribution
payable to the respective funds.
ii.
Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each financial year.
iii.
Short term compensated absences are provided for based on estimates. Long term
compensated absences are provided for based on actuarial valuation. The actuarial valuation is
done as per projected unit credit method.
iv.
Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
21. Taxes on Income
i.
Tax expense comprises of current and deferred tax. Current income tax is measured at the
amount expected to be paid to the tax authorities in accordance with the Indian Income Tax
Act. Deferred income taxes reflects the impact of current year timing differences between
255
taxable income and accounting income for the year and reversal of timing differences of
earlier years.
ii.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively
enacted at the balance sheet date. Deferred tax assets are recognized 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 realized. In situations where the Undertaking has
unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence that they can be realized
against future taxable profits.
iii.
At each balance sheet date the Undertaking re-assesses unrecognized deferred tax assets. It
recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain
or virtually certain, as the case maybe, that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
iv.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The
Undertaking writes-down the carrying amount of a deferred tax asset to the extent that it is no
longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be realized. Any such writedown is reversed to the extent that it becomes reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will be available.
22. Earnings per share
i.
Basic earnings per share are calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period.
ii.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of shares outstanding
during the period are adjusted for the effects of all dilutive potential equity shares.
23. Provisions
A Provision is recognized when an enterprise has a present obligation as a result of past event; it is
probable that an outflow of resources will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its present value and are
determined based on best estimate 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.
C. NOTES TO SUMMARY FINANCIAL INFORMATION
1.
Scheme of Arrangement of Television Broadcasting Business Division of Ushodaya with the
Undertakings
i.
The Undertakings had entered into a Scheme of Arrangement (“Scheme”) with Ushodaya
(Demerged Company) under Section 391 to 394 of the Companies Act, 1956 for the demerger of
business of the Undertakings Eenadu, Prism and Panorama (Demerged Undertakings) which are
be transferred and vested with the Undertakings, on a going concern basis, with effect from 1st
April, 2010 (which is the Appointed Date as per the Scheme). The Honorable High Court of
Andhra Pradesh has sanctioned and confirmed the Scheme and a certified copy of the High Court
order was also filed with The Registrar of Companies, Andhra Pradesh. The Scheme will become
effective after receipt of requisite approvals / permission from the Central Government / Ministry
of Information and Broadcasting (MIB) for transfer of broadcasting and other related licenses
from the Demerged Company, which are necessary for the conduct of broadcasting business by
the Demerged Undertakings. The Demerged Undertakings are awaiting receipt of such requisite
approvals.
256
ii.
The Assets and Liabilities pertaining to the Demerged Undertakings of the Demerged Company
which are vested in the Demerged Undertakings pursuant to the Scheme are recorded at the
respective book values thereof as appearing in the books of the Demerged Company, as at the
Appointed Date.
iii.
As per the Scheme, with effect from the Appointed Date and up to and including the Effective
date (i.e., date of receipt of approvals from the Central Government/MIB), The Demerged
Company, among others, shall carry on and be deemed to have carried on the business and
activities in relation to the demerged undertakings and shall hold and stand possessed of their
properties, rights, interests and assets relating to the demerged undertakings, for and on account
of and in trust for the respective Demerged Undertaking and shall account for the same to the
respective Demerged Undertaking. Accordingly, the common expenditure incurred up to 31 st
January 2012 (being the date up to which common books are maintained) is systematically
allocated / apportioned among the respective Demerged Undertakings.
iv.
The scheme of arrangement has been accounted for under the Purchase method as prescribed
under Accounting Standard 14 – “Accounting for Amalgamations” issued by the Institute of
Chartered accountants of India, Notified by Companies (Accounting Standard) Rules, 2006.
Accordingly, the Assets and Liabilities of the Television Broadcasting Business Division as at 1 st
April, 2010 have been taken over at their respective book values as specified in the Scheme.
v.
Share exchange ratio as per the Scheme is :
a. Eenadu : 1 (One) fully paid equity share of Rs.10 each of Eenadu for every 5 (Five)
equity shares of Rs.100 each held in the Ushodaya.
b. Prism: 1 (One) fully paid equity share of Rs.10 each of Prism for every 7 (Seven) equity
shares of Rs.100 each held in the Ushodaya.
c. Panorama: 1 (One) fully paid equity share of Rs.10 each of Panorama for every 10 (Ten)
equity shares of Rs.100 each held in the Ushodaya.
vi.
The shares allotted, Assets taken over and Liabilities taken over is summarized below:
Eenadu
7,449.22
2,654.12
4,795.10
0.25
4,794.85
Asset taken over
Less : Liabilities taken over
Net Assets
Shares allotted
Capital Reserve
2.
Panorama
1,063.48
721.62
341.87
0.13
341.74
Capital Commitments as at 31st March, 2012: Estimated amount of contracts remaining to be
executed on capital account and not provided for :
Eenadu
Acquisition of fixed assets
Acquisition of films
3.
Prism
5,248.00
2,136.89
3,111.11
0.18
3,110.93
Prism
1.54
13.24
Panorama
0.09
-
0.23
-
Contingent liabilities not provided for as at 31st March, 2012:
Eenadu
Outstanding bank guarantees(excluding
performance obligations)
Claims against the undertaking not acknowledged
as debts
Direct and indirect taxes
257
16.81
Prism
-
Panorama
-
1.65
1503.02
10.00
51.13
127.82
127.82
4.
Intangible Assets
i.
The Demerged Undertakings, as part of Scheme of Arrangement have taken over intangible
assets comprising film and programming content and production support and “not to compete”
arrangement with Ushodaya (Demerged Company). The carrying value of the said intangibles
assets taken over as on 1st April, 2010 is as per (1) & (2) under the table given below.
ii.
The above said intangibles were purchased by USHODAYA in the year 2006-07 from
Ushakiron Television (UKTV) and Ushakiron Movies (UKM) (HUF concerns), on a going
concern basis. The value of film and programming content is as per (3) under the table given
below. The Demerged Undertakings have recorded such assets in their books as intangible
assets and are continuing to amortize the same over a period of 10 years for its remaining
useful life. The carrying value of such intangible as at 31 st March, 2012 is as per (4) under the
table given below.
iii.
In addition to purchase of programming content, Ushodaya with a view to further securing its
business and expanding its operations in production of feature films and television
programming content, entered into a separate agreement with UKTV and UKM in the year
2007-08, to take over all the databases and related documentation, to provide itself with
production support as and when requested and also not to do competing business directly or
indirectly for a period of five years from the date of such agreement. The consideration paid
for the same is as per (5) under the table given below and was accounted by Ushodaya as other
intangibles. The Demerged Undertakings have recorded such assets in their books as other
intangible assets and are continuing to amortize the same over a period of 5 years for its
remaining useful life. The carrying value of such intangible as at 31st March, 2012 is as per (6)
under the table given below.
Eenadu
i. Carrying value taken over as on 01-04- 2010
(1) For Film and Programming content
(2) For Production support and “non-compete”
ii. Film and programming content
(3) Value
(4) carrying value as at March 31, 2012
iii. Databases and related Documentation
(5) Consideration recorded in books
(6) Carrying value as at March 31, 2012.Net Assets
5.
Prism
Panorama
3,490.40
1,725.70
1,819.50
912.90
82.80
41.47
5,016.10
2,487.15
2,614.90
1,296.56
119.00
59.00
4,314.20
-
2282.20
-
103.68
Employee benefits
The Demerged Undertakings have a funded defined benefit gratuity plan. In accordance with the
plan, every employee who has completed five years or more of service gets a gratuity on departure
at 15 days last drawn salary for each completed year of service. The scheme is funded with an
insurance company in the form of a qualifying insurance policy. The following tables summarize
the components of net benefit expense recognized in the Profit and Loss account and amounts
recognized in the Balance Sheet for the respective plans.
i. Profit and Loss account
Net employee benefit expense (recognized in Personnel expense) :
For the year ended 31st March, 2012
Interest Cost on benefit Obligation
Net Actuarial Loss recognized in the year
Net Employee benefit expenses
ii. Balance sheet
258
Eenadu
1.19
0.86
10.89
12.95
(0.40)
Prism
1.91
1.73
(7.32)
(3.68)
(0.50)
Panorama
1.32
1.17
(6.25)
(3.76)
(0.30)
Provision for gratuity:
As at 31st March, 2012
Defined benefit obligation
Fair value of plan assets
Plan Liability
[
iii.
Eenadu
23.26
(10.89)
12.37
Prism
13.82
(16.25)
(2.44)
Panorama
10.02
(12.29)
(2.28)
Changes in the present value of the defined benefit obligation :
Opening defined benefit obligation
Interest cost
Benefits paid
Actuarial loss on obligation
Closing defined benefit obligation
Eenadu
10.77
0.86
1.19
(0.46)
10.89
23.26
Prism
21.56
1.73
1.91
(4.05)
(7.32)
13.82
Panorama
14.56
1.17
1.32
(0.79)
(6.25)
10.02
iv. Changes in the fair value of plan assets :
Opening fair value of plan assets
Expected return
Contributions
T
Benefits paid
h
Closing fair
e value of plan assets
Eenadu
5.82
0.37
5.16
(0.46)
10.89
Prism
11.34
0.50
8.31
(3.90)
16.25
Panorama
7.91
0.31
4.86
(0.79)
12.29
v. principal assumptions used in determining gratuity obligations for the plans of Eenadu, Prism
and Panorama as at 31st March, 2012 are shown below :
Particulars
Discount rate
Increase in compensation cost
Attrition rate
Expected rate of return on plan
assets
Eenadu
8%
8%
10%
9%
Prism
8%
8%
20%
9%
Panorama
8%
8%
20%
9%
[
vi. The estimates of future salary increases, considered in actuarial valuation, take account of
inflation, seniority, promotion and other relevant factors, such as supply and demand in the
employment market.
6.
Related party transactions during the year ending 31 st March, 2012
(i) Names of related parties and description of relationship
a)
Common for Eenadu, Prism and Panorama Undertakings :
1.
Dolphin Hotels Limited
2.
Margadarsi Chit Fund Private Limited
3.
Ushakiron Movies Limited
4.
Manpower Selection and Management Services Private Limited
5.
Colorama Printers Private Limited
6.
Margadarsi Marketing Private Limited
7.
Suman Advertising Private Limited
8.
News Today Private Limited
9.
Various entities of RamojiRao HUF
10. Ushodaya Enterprises Private Limited
259
b)
Eenadu Undertaking: 1.Prism TV Pvt. Ltd. and 2.Panorama Television Pvt. Ltd.
c)
Prism Undertaking: 1.Eenadu Television Pvt. Ltd. and 2.Panorama Television Pvt. Ltd.
d)
Panorama Undertaking: 1.Prism TV Pvt.ltd. 2.Eenadu Television Pvt. Ltd.
e)
Key management personnel : 1.Ramoji Rao and 2.Ch.Kiron
(ii) Transactions with related parties for the year ending 31st March, 2012 :
a)
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
Enterprises over which shareholders,
key management personnel and their
relatives exercise control or significant
influence
Purchase of stationery
Payments made towards purchases
Boarding and lodging expenses
Expenses Reimbursement to
Expenses Reimbursement from
Payments made towards expenses
Income
Collection received towards Income
Margadarsi Marketing Private Limited
Gift Purchases
Services provided
Payments made towards purchases
Collections received towards services
rendered
Margadarsi Chit Fund Private Limited
Services provided
Payments made
Manpower Selection and Management
Services Pvt. Ltd.
Services received
Payments made towards services received
Acquisition of Film Rights
Services received
Services provided
Payments made
Adjustment
UshaKiron Enterprises
Various entities of Ramoji HUF
Services provided
Suman Advertising Pvt Ltd
Services received
Ushodaya Enterprises Private Limited
260
Eenadu
Panorama
Prism
0.34
0.32
0.68
0.70
0.69
0.71
2.32
0.95
0.03
1.08
1.78
5.74
0.77
0.58
6.87
-
1.36
0.01
3.25
0.99
0.47
1.67
0.05
11.41
0.05
1.00
0.14
2.06
0.58
-
1.17
0.06
0.16
0.16
0.15
0.15
15.75
29.71
20.66
0.77
4.91
59.63
0.71
17.70
0.46
36.83
4.26
0.59
38.86
-
61.12
1.37
2.45
2.21
62.14
0.06
-
2.07
8.30
0.01
5.63
2.26
15.07
0.01
14.51
-
20.71
1.79
17.24
0.31
0.35
-
-
a)
x)
b)
c)
d)
e)
influence
Expenses reimbursement to
Payments made
Eenadu Television Private Limited
Prism TV Private Limited
Panorama Television Private Limited
Ch. Kiron
Rent expense
Payments made towards rent
Relatives of Key Management Personnel
Ch. Suman
Rent expense
Payments made towards rent
Eenadu
Panorama
Prism
215.60
326.70
-
168.67
170.70
-
5.39
1.49
2.37
-
-
536.63
662.91
14.81
47.46
0.29
305.87
536.74
662.99
-
1.06
1.06
-
242.36
67.66
-
1.23
1.23
-
-
39.28
71.93
-
(iii) Closing Balances (debit)/ credit as at 31st March, 2012 :
a)
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
xii)
7.
influence
Margadarsi Chit Funds private limited
Maragadarsi Marketing Private Limited
Various Entities of Ramoji HUF
Suman Advertising Private Ltd
Ushodaya Enterprises Private Limited
Panorama Television Private Limited
Prism TV Private Limited
Eenadu Television Private Limited
Eenadu
0.05
0.51
(6.02)
0.11
5.69
0.79
0.06
3.10
(151.96)
(32.65)
1.53
Prism
0.04
0.88
(1.88)
(0.15)
3.71
(28.52)
6.26
32.65
0.78
Panorama
0.02
0.15
(0.22)
(0.05)
3.56
0.76
6.26
151.96
3.38
Deferred Tax
Eenadu, Prism and Panorama have recognized deferred tax assets on unabsorbed depreciation only
to the extent of deferred tax liability. Eenadu, Prism and Panorama expect to generate sufficient
taxable income in the coming years, which will enable them to utilize unabsorbed depreciation.
The deferred tax (net) as on 31st March, 2012 is Nil.
8.
Earnings per share
Earnings per share are computed based on the following ;
261
Net profit/(loss) considered for calculating
basic and diluted earnings per share (Rs.)
considered for basic earnings per share (No’s)
considered for diluted earnings per share
(No’s)
Face Value of each Equity Share (Rs.)
Basic (Rs.)
Diluted (Rs.)
9.
Eenadu
(304,059,530)
Prism
(185,192,283)
Panorama
115,733,668
25,356
18,140
12,728
3,487,905
3,506,373
3,489,211
10
(11,992)
(87)
10
(10,209)
(53)
10
9,093
33
Segment reporting
The Undertaking’s operations fall within a single business segment “Production of programs and
broadcasting satellite television” and single geographical segment and therefore segment
information as required under AS - 17 is not applicable.
10. Material Regroupings
i. Appropriate adjustments have been made in the Summary Financial Information of Assets and
Liabilities and Profit and Losses of Telugu Regional Undertaking, Non Telugu Regional
Undertaking and Hindi and Urdu Undertaking for the relevant years with the Statutorily
Audited books of account and Auditors’ Certified Segmented Accounting Statements “ETV
Business Division of Ushodaya, wherever required. All relevant common costs and revenue
have been allocated/apportioned suitably and corresponding items of income, expenses, assets
and liabilities pertaining to the year ended 31st March, 2007, 2008, 2009 and 2010 reclassified,
in order to bring them in line with the groupings as per the Audited financials of Eenadu, Prism
and Panorama for the year ended 31st March, 2011 and 2012 and as per the requirements of
Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements)
Regulations, 2009.
ii. Figures in the Summary Financial Information are rounded off to the million rupees in
decimals, unless otherwise stated.
iii. The Revised Schedule IV has become effective from April 1, 2011 for the preparation of
financial statements. This has significantly impacted the disclosure and presentation made in
the financial statements. Previous years figures have been regrouped/reclassified wherever
necessary to correspond with figures as at and for the year ended 31 st March 2012 classification
/disclosure.
262
D.
NOT ADJUSTED IN SUMMARY FINANCIAL INFORMATION - QUALIFICATIONS IN
AUDITOR’S REPORT
1.
Impact of the Statutory Auditor’s Qualifications in the Auditor’s Report of Ushodaya related to the
Television Broadcasting Business Division for the year ended 31 st March, 2007, 2008, 2009 and
2010 is not adjusted in the Summary Financial Position of Eenadu, Prism and Panorama for these
relevant years.
2.
Impact of the Statutory Auditor’s Qualifications in their Auditor’s Report for the year ended 31 st
March, 2011 and 2012 is not adjusted in the Summary Financial Position of Eenadu, Prism and
Panorama for such relevant year.
3.
Statutory Auditor’s Qualifications in the Auditor’s Report for the Year ended 31 st March, 2012 is
verbatim given below:
A. In respect of Eenadu Television Private Limited
1.
“Para 4 :As more fully discussed in Additional Notes 29.4 to the financial statements,
gross block of intangible Assets comprise Rs 50,161 Lakhs for the purchase of film and
programming content and Rs 43,142 Lakhs of other intangibles. At present, the film and
programming content is amortized over a period of 10 years and other intangible assets
are amortized over a period of 5 years. The film and programming content and other
intangibles have not been tested for impairment and the quantification of the future
economic benefit to be derived from their use has also not been determined and
accordingly we are unable to comment on the aggregated carrying value of such
intangibles of Rs 24,872 Lakhs as at March 31, 2012.
2.
Para 5 : As at March 31, 2012 the Company had certain overdue debtors aggregating to
Rs. 203.34 Lakhs. Management is of the opinion that these are fully recoverable and
accordingly no adjustments have been made to the accompanying financial statements in
respect of these debtors. In the absence of sufficient evidence to demonstrate
recoverability we are unable to comment on the recoverability of these debtors.”
B. In respect of Prism TV Private Limited
1.
“Para 4 : As more fully discussed in Additional Notes 28.4 to the financial statements,
gross block of intangible Assets comprise Rs 26,149 Lakhs for the purchase of film and
programming content and Rs 22,822 Lakhs of other intangibles. At present, the film and
intangibles of Rs12,966 Lakhs as at March 31, 2012.
2.
Para 5: As at March 31, 2012 the Company had certain overdue debtors aggregating to
C. In respect of Panorama Television Private Limited
1.
“Para 4: As more fully discussed in Additional Notes 29.4 to the financial statements,
gross block of intangible Assets comprise Rs. 1190 Lakhs for the purchase of film and
programming content and Rs. 1037 Lakhs of other intangibles. At present, the film and
263
intangibles of Rs.590 Lakhs as at March 31, 2012.
2.
Para 5: As at March 31, 2012 the Company had certain overdue debtors aggregating to
a) Eenadu Television Private Limited
As per our report of even date
Director
(D.Vijaya Kumar)
Partner
b) Prism TV Private Limited
Director
c) Panorama Television Private Limited
Director
Place: Hyderabad
Date: 22-08-2012
264
ACCOUNTING RATIOS AND CAPITALISATION STATEMENT
Accounting Ratios
The following tables present certain accounting and other ratios on standalone and consolidated basis derived
from the Audited Financial statements as at and for the Fiscal 2011 and Fiscal 2012 included in the chapter
“Financial Statements” on page 74.
Particulars
1
2
3
Standalone
March 31, 2011 March 31, 2012
EPS
Basic
Diluted
Net Worth = SHF+R&S-P&L
Dr bal-Misc Exp
Net Profit
Return on Networth
Net assets of the Company
No. of shares
Net Asset Value per share (`
`)
Consolidated
March 31,
March 31,
2011
2012
(2.20)
(2.20)
6,871,151,585
0.19
0.19
7,662,847,546
(0.78)
(0.78)
6,640,851,486
(1.53)
(1.53)
6,744,513,727
(492,497,144)
(7.17)%
6,871,151,585
237,814,549
28.89
92,424,959
1.21%
7,662,847,546
362,081,871
21.16
(174,046,490)
(2.62)%
6,640,851,486
237,814,549
27.92
(737,794,646)
(10.94)%
6,744,513,727
362,081,871
18.63
The ratios have been computed as below:
Earning Per
Share (Basic)
(`)
Net profit attributable to Equity Shareholders (excluding extraordinary items, if any) for the
year/ period
Number of Equity Shares outstanding at the end of the year/ period
Earning Per
Share
(Diluted) (`)
year/ period
Number of Diluted Equity Shares outstanding at the end of the year/ period
Return On Net
worth (%):
year/ period
Net Worth at the end of the year/ period (excluding revaluation reserves)
Net Asset Value
per Share (`)
Net Worth at the end of the year/ period (excluding revaluation reserves)
Number of Equity shares outstanding at the end of the year/ period
Capitalisation Statement (Standalone)
Particulars
(In `)
Adjusted for rights Issue
Pre issue as at
31 March 2012
Total Debt
Short term loans
Long term loans
Total Debt
5,161,980,956
1,931,390,594
7,093,371,550
5,161,980,956
1,931,390,594
7,093,371,550
Shareholders' Fund
Share capital
Reserves & surplus
Total Shareholders' fund
724,188,260
7,049,936,019
7,774,124,279
3,423,344,024
31,342,337,895
34,765,681,919
0.25
0.91
0.06
0.20
Long Term Debt/Equity
Total Debt/Equity
Notes:
265
1. Short term debt represents funds, which are due within twelve months from 31 March, 2012.
2. Long term debt represents debt other than short term debt, as defined above.
3. The above capitalisation statement has been prepared without considering the potential future exercise of
options under the Employee Stock Option Plans.
4. The Capitalisation Statement, adjusted for rights issue is prepared on the assumption that the proposed rights
issue of 1,349,577,882 Equity Shares @ ` 20 per share will be subscribed fully.
5. The Reserves has not been adjusted for any issue expenses for the proposed rights issue.
Capitalisation Statement (Consolidated)
Particulars
(In `)
Adjusted for rights Issue
Pre issue as at
31 March 2012
Total Debt
Short term loans
Long term loans
Total Debt
6,724,236,333
2,942,265,594
9,666,501,927
6,724,236,333
2,942,265,594
9,666,501,927
Shareholders' Fund
Share capital
Reserves & surplus
Total Shareholders' fund
724,188,260
6,131,602,200
6,855,790,460
3,423,344,024
30,424,004,076
33,847,348,100
0.43
1.41
0.09
0.29
Long Term Debt/Equity
Total Debt/Equity
Notes:
1. Short term debt represents funds, which are due within twelve months from 31 March, 2012.
2. Long term debt represents debt other than short term debt, as defined above.
3. The above capitalisation statement has been prepared without considering the potential future exercise of
options under the Employee Stock Option Plans.
4. The Capitalisation Statement, adjusted for rights issue is prepared on the assumption that the proposed rights
issue of 1,349,577,882 Equity Shares @ ` 20 per share will be subscribed fully.
5. The Reserves has not been adjusted for any issue expenses for the proposed rights issue.
266
STOCK MARKET DATA FOR EQUITY SHARES
The Equity Shares are currently listed on BSE and NSE w.e.f February 2, 2007 pursuant to an initial public
offering by us. Stock market data for our Equity Shares has been given separately for BSE and NSE. As our
Equity Shares are actively traded on both BSE and NSE, stock market data has been given separately for each of
these Stock Exchanges.
The high and low closing prices recorded on NSE and BSE for the preceding three Fiscals and the number
of Equity Shares traded on the days the high and low prices were recorded are stated below.
BSE
Year High (`
`) Date of High
ending
March
31
2012
No. of
Total
Low Date of Low
Shares Volume of
(`
`)
traded traded on
on date date of high
of high
(`
` in
million)
77,423
8.25 23.40 March 19,
2012
322,011
41.15 75.35 May 25, 2010
108.50 April 7,
2011
2011
126.55 Aug 24,
2010
2010
134.05 June 3, 2009 505,827
* Average of the daily closing prices.
(Source: www.bseindia.com)
67.24
74.15 April 2, 2009
No. of
Total
Average
Shares Volume of price for
traded on traded on the year
date of date of low
(`)*
low
(` in
million)
346,472
9.29
53.61
6,976
0.53
99.27
11,364
0.87
102.42
NSE
Year
ending
March
31
2012
2011
2010
High Date of High
(`)
108.50 April 7,
2011
127.10 Aug 24,
2010
134.00 June 3, 2009
No. of
Total
Low Date of Low
Shares
Volume of
(`)
traded on traded on
date of date of high
high
(` in
million)
236,870
25.29 23.00 March 19,
2012
266,309
33.15 75.35 May 25, 2010
809,955
107.28
74.30 April 2, 2009
No. of
Total
Averag
Shares
Volume of e price
traded on traded on for the
date of date of low year
low
(` in
(`)*
million)
5,713,063
134.20 53.66
12,333
0.936
97.43
28,902
2.145
102.5
4
(Source: www.nseindia.com)
#
Pursuant to the Scheme of Arrangement, our stock started trading under the current name with effect from July
19, 2011. Prior to July 19, 2011, our stock was traded under the names ibn18 Broadcast Limited and Global
Broadcast News Limited.
267
The high and low prices and volume of Equity Shares traded on the respective dates during the last six
months is as follows:
BSE
Month
Date of High
High
(``)
Volume
(No. of
Shares)
BSE
Date of Low
August, 2012
August 30, 2012 23.50 1,152,679 August 29, 2012
July, 2012
July 5, 2012
26.00
333,816 July 30, 2012
June, 2012
June 27, 2012
26.75 1,136,277 June 1, 2012
May, 2012
May 2, 2012
28.50
32,418 May 31, 2012
April, 2012
April 3, 2012
32.00
528,610 April 27, 2012
March, 2012
March 3, 2012
30.60
59,397 March 19, 2012
(Source: www.bseindia.com)
Low
(`)
20.15
19.10
17.50
17.90
26.10
23.40
Volume
(No. of
Shares)
63,456
91,879
66,734
103,355
22,313
346,472
Average Total No
Price for
of
the Month Trading
(`
`)*
Days
21.33
21
22.90
22
22.17
21
23.11
22
28.74
20
28.18
22
NSE
Month
August, 2012
July, 2012
June, 2012
May, 2012
April, 2012
March, 2012
Date of High
August 30, 2012
July 5, 2012
June 27, 2012
May 2, 2012
April 3, 2012
March 1, 2012
High
(`)
Volume
(No. of
Shares)
NSE
Date of Low
23.65 1,117,304 August 29, 2012
26.00
951,270 July 31, 2012
26.75 3,158,846 June 1, 2012
28.65
179,695 May 31, 2012
31.95 1,085,923 April 27, 2012
30.60
304,650 March 19, 2012
Low
(``)
Volume
(No. of
Shares)
20.10 209,926
18.20 573,204
17.15 391,110
17.25 579,434
26.30
78,327
23.00 5,713,063
Average Total No
Price for
of
the Month Trading
(`
`)*
Days
21.30
21
22.86
22
22.13
21
23.08
22
28.74
20
28.19
22
(Source: www.nseindia.com)
In the event the high, or low or closing price of the Equity Shares are the same on more than one day, the day on
which there has been higher volume of trading has been considered for the purposes of this section.
Week end prices of Equity Shares of the Company for the last four weeks on the BSE and NSE are as below:
Week Ended on
Aug 31, 2012
Aug 24, 2012
Aug 17, 2012
Aug 10, 2012
Closing Rate BSE (``)
21.50
21.70
21.80
20.95
Closing Rate NSE (``)
21.10
21.65
22.10
21.00
Highest and lowest price of the Equity Shares of the Company on BSE and NSE for the last four weeks:
Highest (``)
Date
Lowest (``)
Date
BSE
23.50
August 30, 2012
20.15
August 29, 2012
NSE
23.65
August 30, 2012
20.10
August 29, 2012
The market price of our Equity Shares on August 31, 2012 was ` 21.50 and ` 21.10 on the BSE and the NSE,
respectively.
268
MATERIAL DEVELOPMENTS
Working Results of the Company
In accordance with circular no. F.2/ 5/ SE/ 76 dated February 5, 1977 issued by the Ministry of Finance,
Government of India, as amended by Ministry of Finance, Government of India through its circular dated March
8, 1977 and in accordance with sub-item (B) of item X of Part E of the SEBI ICDR Regulations.
Our working results on standalone basis for the period from April 1, 2012 to June 30, 2012:
Financial Results for the period between
April 1, 2012 and June 30, 2012
Other income
Total Income
Profit before depreciation and taxes
Provision for Depreciation
Provision for Tax
Net Profit after Tax
` in million
1,298.17
70.98
1,369.15
(18.73)
59.19
(77.92)
Except as stated in this Letter of Offer, to our knowledge no circumstances have arisen since June 30, 2012
which materially and adversely affect or are likely to affect our operations performance, prospects or
profitability, or the value of our assets or our ability to pay material liabilities within the next 12 months.
269
AUDITORS’ REPORT
TO THE BOARD OF DIRECTORS OF
1.
We have reviewed the accompanying statement of Unaudited Financial Results of TV18 Broadcast
Limited (”the Company”) for the quarter ended 30 June, 2012 (“the Statement”). This Statement is the
responsibility of the Company’s Management and has been approved by the Board of Directors. Our
responsibility is to issue a report on the Statement based on our review.
2.
We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE)
2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”,
issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform
the review to obtain moderate assurance as to whether the Statement is free of material misstatements. A
review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial
data and thus provide less assurance than an audit. We have not performed an audit and accordingly, we do
not express an audit opinion.
3.
Attention is invited to Note 4 of the Statement regarding the carrying value of investment aggregating to
Rs.5,25.50 million in a joint venture. Management is of the view that, having regard to the long term
strategic involvement, no provision is considered necessary for ‘other than temporary diminution’ in the
value of these Investments. In the absence of supporting documentation in respect of the appropriateness of
the carrying value of such long term investments, in accordance with requirements of Accounting Standard
13 (AS-13) Accounting for Investments, we are unable to comment whether the diminution in the value of
these long term investments is ‘other than temporary’.
4.
Based on our review and subject to our comments in paragraph 3 above, nothing has come to our attention
that causes us to believe that the accompanying Statement prepared in accordance with the Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956 and other recognised accounting
practices and policies, has not disclosed the information required to be disclosed in terms of Clause 41 of
the Listing Agreements with stock exchanges, including the manner in which it is to be disclosed, or that it
contains any material misstatement.
5.
Further, we also report that we have traced the number of shares as well as the percentage of shareholdings
in respect of the aggregate amount of public shareholdings and the number of shares as well as the
percentage of shares pledged/encumbered in respect of the aggregate amount of promoter and promoter
group in terms of Clause 35 of the Listing Agreements from the details furnished by the Management and
the particulars relating to the undisputed investor complaints from the details furnished by the Registrars.
JITENDRA AGARWAL
Partner
270
AUDITORS’ REPORT
TO THE BOARD OF DIRECTORS OF
(consolidated)
1.
We have reviewed the accompanying statement of Unaudited Consolidated Financial Results (“the
Statement”) of TV18 Broadcast Limited (“the Company”), its subsidiaries and jointly controlled entities
(the Company, its subsidiaries and jointly controlled entities constitute “the Group”) for the quarter ended
30 June, 2012. This Statement is the responsibility of the Company’s Management and has been approved
by the Board of Directors. Our responsibility is to issue a report on the Statement based on our review.
2.
We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE)
2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”,
issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform
the review to obtain moderate assurance as to whether the Statement is free of material misstatements. A
review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial
data and thus provide less assurance than an audit. We have not performed an audit and accordingly, we do
not express an audit opinion.
3.
The Statement includes the results of the following entities:
i.
TV18 Broadcast Limited (formerly ibn18 Broadcast Limited)
ii.
Viacom18 Media Private Limited- Joint Venture
iii. IBN Lokmat News Private Limited- Joint Venture
iv. ibn18 (Mauritius) Limited- Subsidiary
v.
RVT Media Private Limited- Subsidiary
4.
The Statement reflects the Group’s share of revenues of Rs. 30.73 million and Profit after Tax of Rs. 29.74
million for the quarter ended 30 June, 2012 relating to subsidiaries whose results have been reviewed by
other auditors. The Statement also reflects the Group’s share of revenues of Rs. 2,047.03 million and ‘Loss
after Tax’ of Rs. 133.71 million for the quarter ended 30 June, 2012 relating to joint ventures whose results
have been reviewed by other auditors. Accordingly, our assurance on the Statement in so far as it relates to
the amounts included in respect of these subsidiaries and joint ventures is based solely on the reports of
such other auditors which have been furnished to us.
5.
Based on our review and read with our comments in paragraph 4 above, nothing has come to our attention
that causes us to believe that the accompanying Statement prepared in accordance with the Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956 and other recognised accounting
practices and policies, has not disclosed the information required to be disclosed in terms of Clause 41 of
the Listing Agreements with stock exchanges, including the manner in which it is to be disclosed, or that it
contains any material misstatement.
6.
Further, we also report that we have traced the number of shares as well as the percentage of shareholdings
in respect of the aggregate amount of public shareholdings and the number of shares as well as the
percentage of shares pledged/encumbered in respect of the aggregate amount of promoter and promoter
group in terms of Clause 35 of the Listing Agreements from the details furnished by the Management and
the particulars relating to the undisputed investor complaints from the details furnished by the Registrars.
271
JITENDRA AGARWAL
Partner
272
213.37
291.29
(77.92)
5. Profit / (loss) before finance costs, taxes and exceptional
items (3+4)
6. Finance costs
7. Profit / (loss) after finance costs but before Exceptional
Items (5-6)
-
41.27
4. Other income
8. (a) Exceptional income - Recovery from indemnity
(b) Exceptional expense - Impairment of Film rights
172.10
380.22
332.97
1.14
59.19
423.53
1,197.05
2. Expenses
(a) Programming costs
(b) Employee benefits expenses
(c) Marketing, distribution and promotional expenses
(d) Employee stock compensation expense
(e) Depreciation and amortisation expenses
(f) Other expenditure
Total Expenses
3. Profit / (loss) from operations before other income,
finance costs, taxes and exceptional items (1-2)
1,298.17
70.98
1,369.15
Quarter
ended
30.06.2012
(Unaudited)
273
-
(67.62)
249.10
181.48
90.88
90.60
384.82
695.63
1.25
62.37
686.30
1,830.37
1,896.89
24.08
1,920.97
-
248.47
210.44
458.91
356.42
102.49
319.75
373.15
2.23
59.23
400.19
1,154.55
1,233.46
23.58
1,257.04
Standalone
Quarter
Quarter
ended
ended
31.03.2012 30.06.2011
(Unaudited) (Unaudited)
-
121.17
853.96
975.13
666.53
308.60
1,536.10
2,117.96
4.95
244.60
1,994.79
5,898.40
6,035.99
171.01
6,207.00
Year ended
31.03.2012
(Audited)
-
(240.06)
385.70
145.64
91.11
54.53
1,137.31
548.22
1,002.30
1.14
96.04
629.38
3,414.39
3,397.94
70.98
3,468.92
Quarter
ended
30.06.2012
(Unaudited)
393.30
-
(783.24)
348.60
(434.64)
183.50
(618.14)
2,398.20
573.87
1,618.04
1.25
94.46
987.13
5,672.98
5,030.74
24.08
5,054.82
-
230.89
283.48
514.37
366.27
148.10
721.80
444.17
719.40
2.23
73.74
528.49
2,489.83
2,614.35
23.58
2,637.93
Consolidated
Quarter
Quarter
ended
ended
31.03.2012 30.06.2011
(Unaudited) (Unaudited)
1,086.31
693.01
(1,297.44)
1,197.14
(100.30)
857.98
(958.28)
5,070.10
2,273.74
4,599.72
4.95
335.29
2,773.12
15,056.92
13,927.63
171.01
14,098.64
Year ended
31.03.2012
(Audited)
(All amounts in Rs. Million)
Part I: Statement of Standalone and Consolidated Unaudited Results for the Quarter Ended 30.06.2012
1. Income from operations
(a) Income from operations
(b) Other operating income
Total Income from operations (net)
Particulars
16. Earnings/ (loss) per share (EPS) (in Rs.)
(a) EPS before extraordinary items (not annualised)
- Basic
- Diluted
(b) EPS after extraordinary items (not annualised)
- Basic
- Diluted
15. Reserves excluding revaluation reserves
14. Paid-up Equity Share Capital
(Face value Rs. 2/-)
13. Net profit / (loss) after tax and minority interest (11-12)
12. Minority Interest
11. Net profit / (loss) after tax (9-10)
(0.17)
(0.17)
(0.22)
(0.22)
274
(0.17)
(0.17)
-
724.16
0.00
(82.63)
(0.22)
(0.22)
-
724.16
0.00
(77.92)
15.01
(82.63)
0.65
0.65
0.65
0.65
-
724.15
0.00
234.74
13.73
234.74
0.19
0.19
0.19
0.19
7,049.94
724.16
0.00
92.42
(0.65)
(0.65)
(0.65)
(0.65)
-
724.16
(50.69)
0.00
(234.60)
45.23
0.00
(285.29)
(0.69)
(0.69)
(0.69)
(0.69)
-
724.16
(80.06)
0.00
(334.06)
24.18
(414.12)
0.58
0.58
0.58
0.58
-
724.15
0.00
211.21
19.68
0.00
211.21
28.75
0.00
92.42
(77.92)
10. Tax expenses
Year ended
31.03.2012
(Audited)
Consolidated
Quarter
Quarter
Quarter
ended
ended
ended
30.06.2012 31.03.2012 30.06.2011
121.17
(240.06)
(389.94)
230.89
Particulars
Standalone
Quarter
Quarter
Quarter
ended
ended
ended
30.06.2012 31.03.2012 30.06.2011
9. Profit / (loss) from Ordinary activities before tax (7+8a(77.92)
(67.62)
248.47
8b)
(1.53)
(1.53)
(1.53)
(1.53)
6,131.60
724.16
(224.38)
0.00
(737.79)
58.03
0
(962.17)
(904.14)
Year ended
31.03.2012
(Audited)
B. INVESTOR COMPLAINTS
Pending at the beginning of the quarter
Received during the quarter
Disposed of during the quarter
Remaining unresolved at the end of the quarter
Particulars
2. Promoters and promoter group Shareholding
a) Pledged/Encumbered
- Number of shares
- Percentage of shares (as a % of the total shareholding of
promoter and promoter group)
- Percentage of shares (as a % of the total share capital of
the
Company)
b) Non-encumbered
- Number of shares
- Percentage of shares (as a % of the total shareholding of
promoter and promoter group)
- Percentage of shares (as a % of the total share capital of
the
Company)
A. PARTICULARS OF SHAREHOLDING
1. Public shareholding
-Number of Shares
-Percentage of Shareholding
Particulars
40.09
40.09
19.67
Consolidated
Quarter
Quarter
Quarter
ended
ended
ended
30.06.2012 31.03.2012 30.06.2011
20.28
275
19.67
38.15
Nil
Nil
Nil
Nil
Quarter ended
30.06.2012
19.67
71,210,194
32.91
40.09
19.67
71,210,194
32.91
40.09
Year ended
31.03.2012
(Audited)
20.28
19.67
38.15
19.67
71,210,194
32.91
40.09
73,430,954 145,163,368
34.71
67.09
71,210,194 138,153,168
32.91
65.29
40.09
73,430,954 145,163,368 145,163,368 145,163,368
34.71
67.09
67.09
67.09
71,210,194 138,153,168
32.91
65.29
145,163,368
67.09
71,210,194
32.91
Year ended
31.03.2012
(Audited)
145,708,309 150,543,973 145,708,309 145,708,309 145,708,309 150,543,973 145,708,309
40.24
41.57
40.24
40.24
40.24
41.57
40.24
145,163,368
67.09
145,708,309
40.24
Standalone
Quarter
Quarter
Quarter
ended
ended
ended
30.06.2012
31.03.2012 30.06.2011
Part II: Selected Information for the Quarter Ended 30.06.2012
Notes:
1.
The name of the Company has been changed from IBN18 Broadcast Limited to TV18 Broadcast Limited
("the Company") w.e.f 17 June, 2011. A fresh certificate of incorporation has been issued to the Company
on 17th June, 2011 for change of name.
2.
The Statutory Auditors have carried out a limited review of standalone and consolidated unaudited
financials results of the Company for the quarter ended 30 June, 2012 in accordance with Clause 41 of the
Listing Agreement.
3.
The above financial results were reviewed by the Audit Committee and approved by the Board of Directors
of the Company at their respective meetings held on 04 August, 2012.
4.
The Company has made investments of Rs. 525.5 (including amount paid for share application money)
million in IBN Lokmat News Private Limited ("IBN Lokmat"). IBN Lokmat has incurred a loss of Rs. 18.3
million for the quarter ended 30 June, 2012 (as per accounts reviewed by its Auditors). The Company's
share of loss in IBN Lokmat is Rs. 9.2 million for the quarter ended 30 June, 2012. The net worth of IBN
Lokmat is substantially eroded. The auditors have qualified their limited review auditors report for the
quarter ended 30 June, 2012 for not providing for diminution of investment in IBN Lokmat. On above
qualification, the management of the Company is of the view that having regard to the long term investment
and strategic involvement, no provision for diminution of these investments has been considered necessary.
5.
The status of utilization of last rights issue proceeds of the Company is set out below:
Proposed
utilisation
2,150.00
1,500.00
250.00
995.32
200.00
5,095.32
Repay certain loans
Invest in Viacom18 Media Private Limited
Invest in IBN Lokmat News Private Limited
Rights issue expenses *
Total
Rs. in Million
Actual Utilisation
2,150.00
1,500.00
215.25
995.32
191.63
5,052.20
* Surplus available after actual expenses incurred (including provisions) on rights issue have been utilized towards investment in Viacom18
Media Private Limited
# The balance unutilised amount Rs. 40.06 Million are temporarily parked with the banks.
6.
During the previous year, the Scheme of Arrangement (''the Scheme'') between the Company, Television
Eighteen India Ltd (TV18), Network18 Media & Investment Ltd. (Network18) and other Network18 Group
companies was heard and approved by the Hon'ble Delhi High Court on 26 April, 2011. The certified copy
of the order of the Hon'ble Delhi High Court approving the scheme was filed with the Registrar of
Companies, N.C.T. of Delhi & Haryana on 10 June, 2011. On this date the Scheme became effective from
the Appointed Date of 1 April, 2010. Pursuant to the Scheme, the television business inter-alia consisting of
business news Channels Viz.- CNBC TV18 and CNBC Awaaz of TV18 alongwith iNews.com Ltd, a
subsidiary of TV18 and IBN18 Media & Software Ltd, a subsidiary of the Company has merged into the
Company.
7.
The Board of Directors in its meeting held on 3 January, 2012 have considered and approved the issue of its
equity shares on rights basis for an amount aggregating upto Rs 27,000 Million for acquisition of ETV
Channels, repayment of certain loans and general corporate purposes. The Company has filed Draft Letter
of Offer dated 1st March 2012 with SEBI and necessary approval from SEBI is awaited.
8.
The Company has carried out its tax computation in accordance with the mandatory Accounting Standard
(AS 22) – ‘Taxes on Income’ as per the Companies (Accounting Standards) Rules, 2006. Having regard to
the accumulated losses, the Company has not provided for net deferred tax asset at the period end.
276
Additional notes to consolidated results
9.
.
The consolidated results for the year include the results of the Company and the following entities
(constitutes as "the Group"):
a. Viacom18 Media Private Limited ("Viacom18") (including its 100% subsidiaries), which is a 50:50
Joint Venture between Company and Viacom Inc.
b. IBN Lokmat News Private Limited ("IBN Lokmat"), which is a 50:50 Joint Venture between the
Company and Lokmat Media Limited
c. ibn18 (Mauritius) Limited, a 100% subsidiary of the Company; and
d. RVT Media Private Limited ("RVT") (including its 51% subsidiary AETN18 Media Private Limited), a
100% subsidiary of the Company.
10. The Group reports media operations and film production and distribution as two business segments in its
Consolidated statement.
11. Previous year’s / period's amounts have been reclassified/ regrouped to conform to the current period's
presentation.
For TV18 Broadcast Limited
Place : Noida
Date : 4 August, 2012
Director
277
Consolidated Segment Wise Revenue, Results and Capital Employed for the Quarter ended 30 June, 2012
Particulars
Segment Revenue
(a) Media operations
(b) Film Production and Distribution
*
Total
(c) Other unallocable revenue
Total Revenue
Segment Results
Profit/(Loss) before interest and tax
for each segment
(b) Film Production & Distribution
Total
Less:
(i) Finance cost
(ii) Other unallocable expenditure
(net of unallocable income)
Total Profit Before Tax
Capital Employed
Segment Assets – Segment Liabilities
(b) Film Production & Distribution
Total
(c) Unallocable Assets less
Liabilities
Total Capital Employed
(All amount in Rs. Million)
Quarter
Year ended
ended
31.03.2012
30.06.2011
(Audited)
(Unaudited)
Quarter
ended
30.06.2012
(Unaudited)
Quarter
ended
31.03.2012
(Unaudited)
3,299.63
169.29
4,474.45
973.67
2,552.57
85.37
13,226.83
1,958.12
3,468.91
91.11
3,560.03
5,448.12
183.50
5,631.61
2,637.93
366.27
3,004.20
15,184.95
857.98
16,042.93
-
-
-
0
0
180.40
(125.88)
54.53
(409.97)
185.13
(224.84)
189.46
(41.36)
148.10
(535.87)
(29.10)
(564.98)
385.69
(91.11)
348.59
(183.50)
283.48
(366.27)
1,197.14
(857.98)
(240.06)
-
(389.94)
-
230.89
-
(904.14)
-
3,211.34
3,277.33
6,488.67
261.85
3,143.38
3,269.47
6,412.85
411.55
5,562.48
2,001.40
7,563.89
430.47
3,143.38
3,269.47
6,412.85
411.55
6,750.51
6,824.40
7,994.36
6,824.40
* Includes recovery from Indemnity of Rs. 393.3 Million and Rs. 1,086.31 Million for the quarter and the year ended 31 March 2012
respectively.
278
FINANCIAL INDEBTEDNESS
As on July 31, 2012, we have outstanding borrowings of ` 10,256.39 million, of which unsecured borrowing
amount to ` 4,561.30 million on a standalone basis.
Summary of significant outstanding secured and unsecured borrowing together with a brief description of
certain significant terms of such financing arrangements is as under:
Name of the
Amount
Amount
Lender* and nature, Sanctioned and Outstanding
date of the loan
availed
Balance as
agreement & Purpose
on July 31,
of Loan
2012
(in ` million)
Working capital
132.84
Syndicate Bank
loan aggregating
to ` 160 million
Sanction Letter dated
comprising of:
January 13, 2012 and
(iii) overdraft
agreement dated March
facility of `
1, 2012
32 million;
(iv) working
Purpose: To meet the
capital
working capital
demand loan
requirements.
of ` 128
million;
(As per terms
and conditions of
separate
agreement
executed by the
Company.)
Working capital
Cash credit
Loan Agreement dated facilities
November 9, 2010,
aggregating to `
subsequently amended 420 million
by letters dated August
02, 2011 and March 31, Working Capital
2012
Demand Loan
(sublimit of Cash
Credit)
Facility 1 – General
News Undertaking
Yes Bank Limited
303.38
1. First pari passu
charge on all the
current assets
along with Yes
Bank and OBC on
a pari passu basis.
300.94
Repayment
Date/ Schedule
Rate of
Prepayment
Interest (%
Clause
per
(if any)
annum)
Secured
overdraft repayable on
demand.
PLR+ 0.75%
Not
Applicable
(i) Cash credit –
Repayable on
demand.
Bank Base
Rate +2.5%
Not
Applicable
2. Additionally
secured by
unconditional and
irrevocable
corporate
guarantee of
Network18 Media
& Investments
Limited.
Collateral
Security: second
charge on all the
movable fixed
assets of our
Company.
1. First Pari Passu
charge on whole
current assets of
CNN IBN & IBN7
news channels of
our Company &
allied current
assets, both
present & future,
located in India.
2. Unconditional
and irrevocable
corporate
guarantee of
Network18
working capital
requirements.
Foreign Letter or
Credit of upto `
100 million
(sublimit of
Facility 1)
Cash Credit
Yes Bank Limited
facility of ` 500
Loan Agreement dated million.
June 27, 2009,
subsequently amended
by letters dated June
27, 2009, August 02,
Working capital
2011 and March 31,
demand loan of `
2012
500 million
(sublimit of Cash
Facility – Business
Credit limit)
Security
1. First pari passu
charge on whole
current assets of
CNBC-TV18 and
CNBC Awaaz
Sanction channels
& allied current
assets, both
present & future,
located in India.
279
(ii) Short term
loan - Each
advance shall be
repaid in full on
the last day of
the term for
which such
advance was
drawn down.
(i) Cash credit –
Repayable on
demand.
(ii) Short term
loan - Each
advance shall be
repaid in full on
the last day of
the term for
which such
To be
decided by
the lender at
the time of
each
disbursement
Yes bank –
bank base
rate + 2.5%
pa
To be
decided by
the lender at
the time of
each
disbursement
Not
Applicable
Name of the
Amount
Amount
date of the loan
availed
Balance as
agreement & Purpose
on July 31,
of Loan
2012
(in ` million)
News Undertaking
Security
Repayment
Date/ Schedule
Rate of
Prepayment
Interest (%
Clause
per
(if any)
annum)
advance was
drawn down.
working capital
requirements
(1) Buyers’
credit (Fresh
Loan Agreement dated Sanction)
March 5, 2010 and
subsequently amended Amount: ` 150
by letters dated July 23, million only.
2010 and March 31,
2012
(1) (a) Letter of
credit (Usance)
Purpose: For import of ( sub limit of
equipment/ capital
buyers’ credit
expenditure
facility above)
requirement.
( fresh sanction)
Yes Bank Limited
-
Amount: ` 150
million only.
(1) (b) Term
Loan –II (Non–
revolving) (Sub
Limit of buyers’
credit facility
above) (fresh
sanction)
Amount – `
33.33 million
only.
Term loan
Small Industries
Development Bank of aggregating to `
India
63.7 million
33.33
3.17
Letter of Intent
dated February 7, 2007
Loan Agreement dated
November 17, 2009
Purpose: For
equipment purchase
Oriental Bank of
Commerce
Sanction letter dated
January 28, 2010
working capital
Facility for:
(iv) cash credit
(book debt)
of ` 150.00
million;
(v) bank
guarantee
of ` 27.50
127.49
1. Subservient
charge on all
movable fixed
assets.
2. Exclusive
charge on the
current assets of
the Company.
3. Unconditional
and irrevocable
corporate
guarantee of
Network18 Media
& Investments
Limited, to remain
valid during
currency of credit
facilities.
1. First charge on
all movable assets
including plant
and machinery
and equipment
acquired/ to be
acquired out of the
proceeds of the
term loan of IBN
7.
2. Corporate
guarantee of
Network18 Media
& Investments
Limited
Buyers credit and Buyers
LC facilities not credit and
availed
LC facilities
not availed
Maximum tenor
24 months
Yes Bank
PLR – 4.5%,
3 equal half
yearly
installments after
a moratorium
period of 6
months from the
date of
disbursements
To be repaid in
60 monthly
installments,
comprising the
first 59 equal
monthly
installments of `
1.06 million each
and last
installment of `
1.04 million,
commencing
after three
months from date
of first
disbursement of
loan.
1. First charge
Term Loan – To 15
over entire fixed be repaid in 72
asset pool of IBN equal
7.
installments from
2. Corporate
the date of first
guarantee of 25% disbursement.
margin of the total
consideration/
Cash credit –
loan amount paid Repayable on
280
Not
Applicable
13.50
NA
Not
Applicable
Name of the
Amount
Amount
date of the loan
availed
Balance as
agreement & Purpose
on July 31,
of Loan
2012
(in ` million)
requirements.
million; and
(vi) Term loan
5.75
of ` 298.40
million.
ING Vysya Bank
Limited
Cash credit
facility of ` 300
million
205.04
Sanction Letter June 7,
2012
WCDL: ` 300
million (SubAgreement dated
limit of Cash
August 9, 2012
Credit)
working capital
requirements.
Letter of Credit:
` 60 million
(Sub-limit of
Cash Credit)
Kotak Mahindra
Bank Limited
Cash credit
facility of ` 100
million
Security
Repayment
Date/ Schedule
Rate of
Prepayment
Interest (%
Clause
per
(if any)
annum)
or disbursed, of
demand
Network18 Media
& Investments
Limited.
First charge on all Cash credit –
current assets of Repayable on
business news
demand
undertaking of
Television
Eighteen
Base Rate + NA
2%1
2%
Prepayment
Penalty for
WCDL
Not
Applicable
64.46
Loan Agreement dated
January 29, 2008
WCDL: ` 100
million (SubFurther amended vide limit of Cash
letter dated August 11, Credit)
2011 and letter dated
September 27, 2011
Letter of Credit:
whereby this loan was ` 70 million
transferred from
Television Eighteen to Bank Guarantee:
us
` 70 million
(Sub-limit of
Purpose: To meet the Letter of Credit)
working capital
requirements.
First pari passu
charge on all
current assets of
the Company,
both present and
future.
Cash credit –
Repayable on
demand
14.20
1. Subservient
charge on all
existing anf future
current assets
2. Personal
guarantee of Mr.
Raghav Bahl
Maximum 12
Not
months
applicable
(including claim
period)
Not
Applicable
Purchase/ import of
studio equipments such
as camera, lighting
equipments,
camcorders and other
business related
equipments etc. To also
include import of
equipments like
Transponders etc. for
up-linking purposes
Issuance of guarantees
Kotak Mahindra
Bank
Master facility
agreement dated
August 9, 2012
240
Nil
Purpose:
281
Not
applicable
Name of the
Amount
Amount
Security
date of the loan
availed
Balance as
agreement & Purpose
on July 31,
of Loan
2012
(in ` million)
Bank guarantee facility
432.60 1. Secured by first
Term loan of `
Life Insurance
pari passu
Corporation of India 800 million
charge on
Sanction Letter dated
movable
October 4, 2008.
properties of
the CNBCLoan Agreement dated
TV18 and
October 29, 2008
CNBC
AWAAZ TV
Purpose: General
Channels of the
corporate purpose.
borrower
including its
movable plant
& machinery,
machinery
spares, tools
and accessories
and other
movables both
present and
future (save
and except
book debts at
Mumbai in the
State of
Maharashtra
and various
other offices in
India).
2. Collaterally
secured by
pledge of
shares by the
promoter/
Group Entities.
3. Personal
guarantee of
the Managing
Director of
erstwhile
Television
Eighteen
4. Corporate
guarantee of
Network18
Media &
Investments
Limited
ICICI Bank Limited
Corporate Rupee loan
facility agreement
dated June 25, 2012
Purpose: Capital
expenditure and
repayment of fixed
deposits
Term loan `
3,000 million
3,000
1. Residual charge
over current assets
and movable fixed
assets
Repayment
Date/ Schedule
Repayable in 24 13.50%
equal quarterly
installments
commencing at
the end of the
15th month from
the date of first
disbursement of
loan.
36 equal monthly
instalments
commencing
after a
moratorium of 2
2. Pledge over
years. The first
underlying shares instalment shall
become due at
3. Irrevocable and the end of 25th
unconditional
month from first
282
Rate of
Prepayment
Interest (%
Clause
per
(if any)
annum)
Bank Rate
+2.5% to
be reset on
April 1,
2012
We shall
have no right
to prepay the
outstanding
principal sum
of the loan in
full or in part
before the
due dates
except after
obtaining
prior
approval in
writing from
LIC .The
acceptance of
premature
repayment
shall be
entirely at the
sole
discretion of
LIC and it
shall be
subject to
such terms
and
conditions
including the
payment of
premium, if
any as may
be stipulated
by LIC in this
behalf.
Mandatory
prepayment
Any equity,
preference
share
or
similar such
issuance by
us
or
Network18
will be used
Name of the
Amount
Amount
date of the loan
availed
Balance as
agreement & Purpose
on July 31,
of Loan
2012
(in ` million)
Yes Bank Limited
Term loan agreement
dated March 1, 2012
Purpose:
Long term working
capital requirements
Term loan of
`1,000 million
1,000
Financial
standby letter of
credit of ` 1,000
million
Total
Security
Repayment
Date/ Schedule
Rate of
Prepayment
Interest (%
Clause
per
(if any)
annum)
personal guarantee
from Mr Raghav
Bahl and
corporate
guarantee of
Network18.
drawdown date.
Tenor of the loan
is 5 years from
the first
drawdown date.
to
mandatorily
prepay all the
outstanding
tranches
under
the
facility.
Any proceeds
from
sale
made by us
of underlying
shares will be
used
to
mandatorily
prepay all the
outstanding
tranches
under
the
facility.
1. Subservient
charge on all the
current assets and
movable fixed
assets (present and
future)
2. Unconditional
and irrevocable
corporate
guarantee of
Network 18.
3. Unconditional
and irrevocable
personal guarantee
of Mr Raghav
Bahl.
18 equal monthly 13%
instalments after
a moratorium
period of 6
months from the
date of first
disbursement
Voluntary
prepayment
We
may
prepay any of
the tranches
outstanding
under
the
facility
in
whole,
by
providing
written notice
to the lender
7
business
days
in
advance.
Not
applicable
5,609.00
Restrictive Covenants
Many of our financing arrangments entail various restrictive conditions and covenants restricting certain
corporate actions, and we are required to take the prior approval of the lender before carrying out such activities.
For instance, we are required to obtain the prior written consent of the lenders in the following instances:
283

to alter our capital structure in any manner, or undertake or permit any merger, de-merger, consolidation,
reorganisation, scheme of arrangement or compromise with our creditors or shareholders or effect any
scheme of amalgamation or reconstruction;
declare or pay dividend or authorise or make any distribution, payment, delivery of property or cash to our
shareholders;
create any further charge, lien or encumbrance on hypothecated assets or any part thereof;
undertake any new projects or diversification, modernisation or substantial expansion of the project or alter
the financing plan or the scope of the project whether by way of any reduction or increase to its size, layout,
specification or quality or otherwise;
whether voluntarily or involuntarily, sell, transfer, grant lease or otherwise dispose of or deal with (or agree
to do any of the foregoing at nay future time), all or any of its assets;

Public Deposits
We are currently having a Fixed Deposit Scheme pursuant to Section 58A of the Companies Act, 1956 and the
total outstanding amount under the Fixed Deposits Scheme of the Company as on July 31, 2012 is ` 2,811.30
million.
SCHEME (A) NON CUMULATIVE
Minimum amount
Rate of Interest*
(``)
(`` %p.a.)
10,000
9.00
10,000
11.50
10,000
11.50
10,000
11.50
Amount Raised#
(``)
6 months
715,000
1 year
697,896,000
2 years
112,182,000
3 years
457,961,000
1,268,754,000
*Interest to be paid in quarterly instalments on March 31, June 30, September 30, December 31 each year and is
calculated on 365 days basis.
#
Includes amount raised at variable rates of interest as mentioned in the respective advertisements
Period Months / Year(s)
Period Months /
Year(s)
1 year
2 years
3 years
SCHEME (B) CUMULATIVE
Rate of
Amount
Interest**
payable on
(% p.a.) #
maturity (`
`)
10,000
11.50
11,201.00
10,000
11.50
12,545.00
10,000
11.50
14,501.00
Minimum
amount (`
`)
Annual
Yield
%**
12.01
12.73
13.50
Amount Raised#
(``)
1,078,339,878
109,769,000
354,433,000
1,542,541,878
**Interest is compounded quarterly.
#
Includes amount raised at variable rates of interest as mentioned in the respective advertisements
Deposit highlights:

An additional interest of 0.50% per annum shall be given to employees of Network18 group, senior citizens
above the age of 60 years.
Nomination facility available
Payment of interest in Scheme-A (net of TDS) through post dated cheques in advance.
ICRA rating – “MA-” (pronounced as MA Minus) with stable outlook.
Purpose:
The public deposits have been raised for the purpose of working capital requirements, investments in
subsidiaries and joint ventures.
Sr.
no.
1.
Particlulars
Status
Finance Lease
We have entred into finance lease transactions with Kotak Mahindra Prime Limited
upto an amount of ` 10.00 million as on opening balance July 31, 2012.
284
Sr.
no.
2.
Particlulars
Status
Vehicle Loans
3.
Commercial
Papers
We have various car loans outstanding amounting to ` 12.72 million as on opening
balance July 31, 2012. These are secured by Hypothecation of various cars
purchased.
We have Commerical Papers amounting to ` 1,750 Million as on July 31, 2012.
Terms:
The terms of commercial papers are as follows:
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
Bank
DWS Short
Maturity Fund
DWS Cash
opportunity Fund
Sundaram Ultra
Short Term Fund
Sundaram Ultra
Short Term Fund
Sundaram Ultra
Short Term Fund
Indian Bank
BNP Paribas
Overnight Fund
Sundaram Ultra
Short Term Fund
Sundaram Ultra
Short Term Fund
BNP Paribas
overnight Fund
The Federal Bank
Total
Amount as on
December
31, 2011
(`` million)
250
Issue Date
Maturity
Rate of Credit Rating
Interest
(%) p.a.
September 7, 2011
March 7, 2012
10.65
50
September 7, 2011
March 7, 2012
10.65
150
March 24, 2011
March 23, 2012
11.88
100
March 25, 2011
March 23, 2012
11.88
200
March 25, 2011
March 23, 2012
11.89
250
December 9,2011
March 9, 2012
10.35
100
December 9,2011
March 6, 2012
10.35
150
December 14, 2011
March 1, 2012
10.35
150
December 14, 2011
March 14, 2012
10.35
200
December 30, 2011
March 28, 2012
10.30
150
December 30, 2011
March 29, 2012
10.30
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
‘ICRA
A1+(SO)’
1,750
Purpose:
The commercial papers have been raised for the purpose of working capital requirements, investments in
subsidiaries and joint ventures.
285
SECTION VII – LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATIONS
Except as described below, there are no outstanding litigations including, suits, criminal or civil prosecutions
and taxation related proceedings against us and our Subsidiaries that would have a material adverse effect on
our business. Further, there are no defaults, non-payment of statutory dues including, institutional / bank dues
and dues payable to holders of any debentures, bonds and fixed deposits that would have a material adverse
effect on our business other than unclaimed liabilities against us as of the date of this Letter of Offer.
Further, except as disclosed below, we and our Subsidiaries are not aware of any litigation involving moral
turpitude, material violations of statutory regulations and or proceedings relating to economic offences which
have arisen in the last ten years.
Further, except as disclosed below, we and our Subsidiaries are not subject to:
a.
Any outstanding litigations which does not impact our future revenues and any of the Subsidiaries, on a
several basis, which impacts more than one percent of our networth, for the last completed Fiscal.
b.
Any outstanding litigations which impacts the future revenues and any of the Subsidiaries, on a several
basis, which impacts more than one percent of our revenue, for the last completed Fiscal.
Further from time to time, we have been and continue to be involved in legal proceedings filed by and against
us, arising in the ordinary course of our business. These legal proceedings are both in the nature of civil and
criminal proceedings. We believe that the number of proceedings in which we are / were involved is not unusual
for a company of our size doing business in India.
I.
Litigation involving TV18
Litigation against TV18
Criminal cases
1.
The Delhi Commission for Protection of Child Rights (“Complainant”) filed criminal complaint (no.
207/J/2010) before the Chief Metropolitan Magistrate, Delhi (“Court”) alleging that the Editor-inChief/CEO of CNN-IBN (“Accused”) and had not responded to three notices dated September 19,
2008, October 29, 2008 and January 21, 2009 sent by the Commission to them in relation to violation
of child rights by a section of the media and had failed to appear before the Complainant despite
notices. The Complainant has prayed that in view of the Accused’s deliberate non-appearance and
failure to respond to statutory notices, the Accused had committed contempt of lawful authority of the
Complainant and, hence, ought to be prosecuted for the same. The Complianant prayed for initiating
proceedings under section 14(2) of the Commission for Protection of Child Rights Act, 2005. The
matter is currently pending.
2.
Dr. Ajai Agarwal filed criminal complaint (no. 3955/2008, presently 793 / 09) before the Court of the
Judicial Magistrate, Junior Division, Ghaziabad (“Court”) against Mr. Rajdeep Sardesai, Mr. Ashutosh,
Mr. Raghav Bahl, Mr. Arunodaya Mukherji, Mr. Sanjay Ray Chaudhuri, Mr. Haresh Chawla and Mr.
Sameer Manchanda (together, the “Accused”) alleging defamation under section 500 of the Indian
Penal Code, 1860 in respect of a story dated July 29, 2006 aired on IBN7 related to sting operation on
doctors involved in amputation of limbs of healthy people. The Court issued an order dated August 1,
2008 (“Impugned Order”) for issuing non-bailable warrants against the Accused. We approached the
Court of the Sessions Judge, Ghaziabad (“Sessions Court”) for quashing the non-bailable warrants and
the Sessions Court through its order dated January 28, 2011 quashed the Impugned Order and the asked
the Court to review the matter. The matter is currently pending before the Court which has issued
summons against all the respondents vide its order dated December 14, 2011. The Accused have filed
criminal miscellaneous application (no. 2830/2012) before the High Court of Judicature at Allahabad
(“High Court”) under section 482 of the Code of Criminal Procedure, 1973 praying the High Court to
quash the proceedings before the Court. The High Court has stayed proceedings in the Court vide its
order dated January 25, 2012. The matter is currently pending.
286
3.
Venus Remedies Limited (“Complainant”) filed criminal complaint (no. 30339/2011) (“Complaint”)
before the Court of the Chief Judicial Magistrate, Chandigarh (“Court”) against Mr. Raghav Bahl, Mr.
Senthil Chengalvarayan, Mr. Charles Assisi, Mr. Shishir Prasad, Mr. Indrajit Gupta (“Defendants”) and
others alleging defamation under section 499, 500, 501 and 120B of the Indian Penal Code, 1860 in
respect of a story dated June 05, 2009 featured on the Forbes India magazine containing defamatory
statements against the Complainant. The Court issued summons on the Defendants vide its order dated
February 17, 2011 (“Order”). The Defendants filed three criminal miscellaneous application (nos.
14016, 14996 and 20577 of 2011) before the High Court of Punjab and Haryana at Chandigarh (“High
Court”) under section 482 of the Code of Criminal Procedure, 1973 praying the High Court to quash
the Order and the proceedings initiated vide the Complaint. The High Court has stayed proceedings in
the Complaint against Mr. Raghav Bahl and Mr. Senthil Chengalvarayan vide its order dated May 09,
2011, against Mr. Charles Assisi and Mr. Shishir Prasad vide its order dated May 17, 2011 and against
Mr. Indrajit Gupta vide its order dated July 14, 2011. The Defendants have filed their respective replies
and the matter is currently pending.
4.
Devender Kumar Bansal (“Complainant”) filed criminal complaint (no. 1255/2006) (“Complaint”)
before the Court of the Judicial Magistrate First Class, Ambala (“Court”) against Sidhhartha Gautam
and Rajdeep Sardesai (“Accused”) and TV18 alleging defamation under section 500 of the Indian Penal
Code, 1860 in respect of a story dated that aired on CNN IBN news channel containing defamatory
statements against the Complainant. The Court issued non-bailable warrants against the Accused vide
its order dated August 17, 2007. Siddhartha Gautam and Rajdeep Sardesai filed two criminal
miscellaneous application (nos. 43190M/2007 and 45958/2007) respectively before the High Court of
Punjab and Haryana at Chandigarh (“High Court”) under section 482 of the Code of Criminal
Procedure, 1973 praying the High Court to quash the proceedings initiated vide the Complaint. The
High Court has stayed proceedings in the Complaint against the Accused vide its order dated August
21, 2007, and has also stayed execution of non-bailable warrants issued on a condition of their personal
appearance before the Court and to seek interim bail. The application for bail on behalf of the Accused
were filed and listed on September 19, 2007 in the Court and the Court granted bail to them on
furnishing surety of ` 20,000 each. The High Court has further directed the Court to grant the Accused
permanent exemption from appearance in respect of proceedings in the Complaint. The High Court
also disposed application number 43190M/2007 as infructuous upon the Court recalling the warrants.
The High Court has admitted application number 45958/2007 vide its order dated September 18, 2007.
The matter is currently pending.
5.
Maulana Mumtaz Ahmed Qureshi (“Complainant”) filed appeal (no. 798/2008) (“Appeal”) before the
High Court of Himachal Pradesh at Shimla (“High Court”) against TV18 and others alleging
defamation under section 500 of the Indian Penal Code, 1860 in respect of a story dated June 27, 2006
aired on IBN7 news channel allegedly containing defamatory statements regarding bribery involving
Haj Committees of various states who were allegedly taking bribe to allow people to go for the Haj
without following procedures. The Complainant had previously filed criminal complaint (no. 208-3 of
2007) before the Court of Judicial Magistrate First Class, Shimla (“Court”) and the same was dismissed
by the Court vide order dated May 9, 2008 (“Order”). On appeal, the High Court has remanded the
matter to the trial court with direction to review its order on merits, vide its order dated May 7, 2012.
6.
Rahmat Fatima Amanullah (“Complainant”) filed criminal complaint (no. 2101C/2011) before the
Court of the Chief Judicial Magistrate, Patna (“Court”) against TV18, Mr. Sukesh Ranjan, Political
Editor, IBN7, Mr. Ashutosh, Managing Editor, IBN7, Mr. Chandra Mohan Kumar, correspondent,
IBN7, Mr. Rajdeep Sardesai, our editor-in-chief and Mr. Raghav Bahl, alleging defamation under
section 500 of the Indian Penal Code, 1860 in respect of a story dated July 18, 2011 aired on IBN7
news channel allegedly containing defamatory statements against the Complainant. The Court passed a
summoning order dated September 9, 2011. We have filed a quashing petition (criminal miscellaneous
no. 45228 of 2011) before the High Court of Bihar at Patna (“High Court”) under section 482 of the
Code of Criminal Procedure, 1973 (“CrPC”) praying the High Court to quash the proceedings initiated
vide order dated September 9, 2011 against Mr. Raghav Bahl. Mr. Raghav Bahl, Mr. Rajdeep Sardesai
and Mr. Ashutosh have filed separate applications dated January 25, 2012 before the Court seeking
exemption from personally appearing in this matter under section 205 of the CrPC and the same has
been allowed vide order May 14, 2012. The matter is currently pending.
287
7.
Based on a representation made by Mr. Rajiv Trivedi, Indian Police Service, Inspector General of
Police, Hyderabad to the State of Andhra Pradesh, the Public Prosecutor for the State of Andhra
Pradesh had filed a complaint (no. 1 of 2008) (“Complaint”) against Mr. Rajdeep Sardesai and others
(“Accused”) before the Metropolitan Sessions Judge, Nampally, Hyderabad (“Trial Court”) under
sections 500 and 120-B of the Indian Penal Code, 1860 alleging criminal defamation of a serving
public servant. The Accused were summoned by the Trial Court vide order dated January 9, 2008
(“Trial Court Order”). It was alleged that in one of the stories of CNN-IBN, Rajiv Trivedi, a serving
police officer of the State of Andhra Pradesh, had been falsely alleged by the Accused as having aided
a team of police officers from Gujarat in carrying out the alleged fake encounter of one Sohrabuddin
Sheikh. The Accused filed four separate petitions (nos. 1590/2008, 1646/2008, 1638/2008 and
1874/2008) (“Petitions”) before the High Court of Andhra Pradesh at Hyderabad (“High Court”) for
quashing the Compliant and the proceedings before the Trial Court. The High Court , vide its order
dated March 24, 2008, stayed all proceedings before the Trial Court including the personal appearance
of the Accused. Subsequently, the High Court dismissed the Petitions before the High Court vide its
order dated April 29, 2011 (“High Court Order”). The Accused filed six special leave petitions (nos.
3985/2011, 3987/2011, 3988/2011, 5574/2011, 5576/2011 and 5610/2011) (“SLP(s)”) before the
Supreme Court of India (“Supreme Court”) praying the Supreme Court to grant them special leave to
appeal against the High Court Order. The Supreme Court granted stay on proceedings before the Trial
Court vide its order dated May 11, 2011 during pendency of the SLP numbers 3985/2011, 3987/2011
and 3988/2011 and vide its order dated August 8, 2011 during the pendency of SLP numbers
5574/2011, 5576/2011 and 5610/2011. The matter is currently pending.
8.
Mr. Ravi Prakash Sharma (“Complainant”) filed criminal complaint (no. 1791/2011) against the Mr.
Rajdeep Sardesai as chief editor/ chief operating officer/ principal head of IBN7, Mr. Kumar Ashish (a
news correspondent working for IBN7) and Cobra Post, a unit of IBN7 (together, the “Accused”) before
the Court of the Metropolitan Magistrate, Karkardooma Courts, Delhi (“Court”) alleging defamation
under section 499, 500, 503, 120B and 34 of the of the Indian Penal Code, 1860 in respect of stories
dated December 6, 2011 and December 7, 2011 aired on IBN7 related to a sting operation on the
Complainant. The Court issued summons on the person acting as chief editor/ chief operating officer/
principal head of IBN7 vide its order dated February 6, 2012 (“Order”). The matter is currently
pending.
9.
Mr. PK Shahi (“Complainant”) filed criminal complaint (no. 2009(c)/2011) against IBN7, Mr. Rajdeep
Sardesai, Mr. Ashutosh Kumar, Mr. Sukesh Ranjan and Mr. Chandra Mohan Kumar (together, the
“Accused”) before the Court of the Chief Judicial Magistrate, Patna (“Court”) alleging defamation
under section 499, 500, 501 and 120B of the of the Indian Penal Code, 1860 in respect of a story dated
July 18, 2011 aired on IBN7 related to a scam in the allotment of land. The Complainant has also
sought compensation of ` 50 million under section 357 of the CrPC. The matter is currently pending.
10. The Court Receiver, High Court, Bombay sent TV18 a show case notice (no. 20385/2008) directing
TV18 to furnish certain information as well as clarify certain information previously submitted by
TV18 in respect of a story covered by IBN7, one of TV18’s news channels.
11. Mr. Ajit Singh Tokas has filed criminal complaint (CC no. 7/12) before the Court of the Metropolitan
Magistrate, Dwarka (“Court”) against the Managing Director of TV18, Mr. Rajdeep Sardesai, Mr.
Raghav Bahl and Ms. Kshipra Jatana (together, the “Accused”) alleging defamation under sections
499, 500 and 34 of the Indian Penal Code, 1860 in respect of a story aired on CNN IBN and IBN7 on
December 6, 7 and 8 of 2011 in relation to a sting operation on MCD Councillors to expose corruption
in building practices. Mr. Rajeev Sardesai had moved a Criminal Miscellaneous Application before the
High Court of Delhi to interalia stay the proceedings and exempt Mr. Sardesai from personal
appearance. The High Court vide its order dated May 15, 2012 has granted the exemption to Mr.
Sardesai from personal appearance and has also allowed the Complainant to be impleaded as a party to
the criminal case. The matter is currently pending.
Civil Cases
1.
Victor Fernandes, Sangeeta Fernandes, Priti Khanderia and Manoj Khanderia, the minority
shareholders of e-Eighteen.com Limited (“EEL”) (together referred to as the “Plaintiffs”) have on
August 25, 2006 filed a suit (no. 2709 of 2006) as derivative action on behalf of EEL before the High
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Court of Judicature at Bombay (“High Court”) against Raghav Bahl, TV18, e-Eighteen.com Limited,
Network 18 Fincap Private Limited , Television Eighteen Commodities, SGA News Limited, SRH
Broadcast News Holdings Private Limited, Global Broadcast News Limited, Web 18 Software Services
Limited, TV18 Home Shopping Network Pvt Limited (together referred to as the “Defendants”). The
Plaintiffs are minority shareholders of EEL and have alleged that Mr. Raghav Bahl, TV18, ICICI
Global Opportunities Fund and EEL had entered into a subscription cum shareholders agreement dated
September 12, 2000 pursuant to which we and Mr. Raghav Bahl had inter alia undertaken that any
expansion, development or evolution of the activities of the EEL and the group companies or any
opportunity offered to TV18 shall only be pursued or taken up through EEL or its wholly owned
subsidiary. The Plaintiffs have alleged that we and Mr. Raghav Bahl have promoted and developed
various businesses through various companies which should have under the aforesaid agreement
rightfully been undertaken by EEL or its wholly owned subsidiaries. The Plaintiffs have alleged that by
not doing so we and Mr. Raghav Bahl have caused monetary loss to EEL as well as to the Plaintiffs.
For the purposes of court fee and jurisdiction, the Plaintiffs have valued their suit at ` 30,141.2 million
and ` 999.4 million respectively and have inter alia prayed that we, Mr. Raghav Bahl and others be
ordered to transfer to EEL all their businesses, activities and ventures along with all assets and
intellectual property. The Plaintiffs on September 18, 2006 had filed a notice of motion (no. 3232 of
2006) seeking ad interim relief. The notice of motion was dismissed on August 8, 2008 against which
the Plaintiff has filed an appeal before the division bench of the High Court. The appeal was dismissed
by the High Court on September 21, 2011. The suit filed by the Plaintiffs is currently pending.
2.
Prasar Bharati (“Plaintiff”) filed a civil suit bearing number 1721/2008 (“Civil Suit”) against several
parties including TV18 (“Defendants”) before the High Court at Delhi (“High Court”), seeking
permanent injunction, rendition of accounts and damages of ` 2.5 million on account of encroachment,
violation and infringement of the exclusive lawful broadcasting rights of the Plaintiff. The Plaintiff has
claimed that it had an exclusive television and radio rights for the territory of India in respect of the
Beijing Olympics Games, 2008, pre-Olympic events and cultural events under an agreement dated
April 27, 2007 with Asia Pacific Broadcasting Union and has alleged violation of that right by each of
the Defendants without the license, permission, notice, consent or approval of the Plaintiff. The
Plaintiff has further alleged that the Defendants have made undue gains and profits by selling
commercials and advertisement space and time, before, after and during the broadcast of such footages.
The Plaintiff filed an application bearing number 9928/2008 before the High Court seeking an adinterim injunction and the High Court vide order dated August 22, 2008 has restrained the Defendants
from telecasting the footage of Olympic events except insofar as the telecast was consistent with fair
dealing. Thereafter, the Plaintiff filed an application dated December 15, 2008 before the High Court
for allowing amendments to the plaint, inter alia, modifying the amount of damages to ` 57.50 million.
The matter is currently pending.
3.
Austral Coke & Projects Limited and others (“Plaintiffs”) filed a civil suit no. L2809/2008 dated
August 8, 2008 (“Suit”) against Gujarat NRE Coke Limited, TV18 and others (“Defendants”) before
the High Court of Judicature at Bombay (“High Court”) alleging that the Defendants had published
defamatory statements against the Plaintiffs resulting in a decrease in their market capitalization. The
Plaintiff has alleged that Gujarat NRE Coke Limited had made fraudulent statements in its prospectus
in relation to its initial public offering and has claimed ` 6,000 million as damages from Gujarat NRE
Coke Limited. Additionally, the Plaintiff has sought to restrain TV18 from
publishing/circulating/telecasting any defamatory articles against the Plaintiff and its group companies.
The High Court passed an interim order dated August 8, 2008 restraining TV18 from
publishing/circulating/telecasting any defamatory articles against the Plaintiff and its group companies.
TV18 has filed a written statement with the High Court and the matter is currently pending.
4.
Bahujan Samaj Party, through its state president, Mr. Vilas Garaud (“Petitioners”) has filed a civil suit
bearing number 2339/2006 against TV18 and others (“Defendants”) before the High Court of
Judicature at Bombay alleging broadcast of news aimed at defaming the Bahujan Samaj Party and its
leader Ms. Mayawati. The Petitioner has sought inter alia, damages of ` 2,000 million along with
costs. The Defendants have filed a written statement denying the claiMs. of the Petitioners. The matter
is currently pending.
5.
Mr. S. Hajara, Chairman and Managing Director, Shipping Corporation of India and Shipping
Corporation of India (“Plaintiffs”) has filed a civil suit bearing number 2289/2007 against TV18 and
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others (“Defendants”) before the High Court of Judicature at Bombay (“High Court”) alleging that
TV18’s channel, IBN7, aired a program conveying incorrect information about Mr. S. Hajara. The
Plaintiffs have sought damages amounting to ` 100 million to Mr. S. Hajara and ` 1,000 million to
Shipping Corporation of India along with interest, together with a permanent injunction restraining the
Defendants from telecasting/ re-telecasting of the program. TV18 filed a written statement before the
High Court denying the claims of the Plaintiffs. The matter is currently pending.
6.
Mr. R N Merani (“Petitioner”) filed public interest litigation (Writ Petition No 965 of 2012) under
Article 226 and 227 of the Constitution of India against the Union of India, the News Broadcasters
Association and TV18 (together referred to as the “Respondents”) before the High Court of Karnataka
at Bangalore. The cause of action arose on November 9, 2011, when CNN-IBN deliberately
misrepresented a previously recorded interview with Sri Sri Ravi Shankar, a spiritual leader and
founder of the “Art of Living” head, as being a live interview/debate. It was alleged that the news
channel gave a false impression to the viewers that Sri Sri Ravi Shankar was expressing his views on
the questions put to him in the interview, whereas his responses were edited responses to different
questions put to him earlier. Petitioner submitted that this incident was in clear violation of the Cable
Television Networks (Regulation) Act, 1995 and the rules framed there under.
The Petitioner in the present petition seeks for a direction by the Court to Union of India and News
Broadcasters Association to ensure impartiality and inaccuracy in television news by formulating a
constitutionally compliant enforceable code of standards and conduct to be followed by television news
channels, and in the interim, to entrust the Press Council of India to oversee television news
broadcasters through an interim complaints redress mechanism; and to direct News Broadcasters
Association to take appropriate action against CNN-IBN for its misrepresentation on the ‘Face the
Nation’ programme including revoking/suspending the license to operate. The matter is currently
pending.
7.
Ms. Rahmat Fatima Amanullah (“Plaintiff”) filed a suit (Money Suit No 72 of 2012) against TV18, Mr.
Raghav Bahl and Others (together referred to as the “Defendants”) before the Court of Sub- Judge I
dated August 17, 2012, Patna alleging that the Defendants on July 18, 2011, in their primetime show
captioned as “Sushaasan Ka Parda Faash” defamed the Plaintiff and her parents and then continued to
do so as the news story was re-aired. The Plaintiff sent a legal notice dated July 19, 2011 to the
Defendants and also filed a criminal complaint (no 2101C/2011) against the Defendants.
The Plaintiff has alleged that the comments and statements in the programme were defamatory and
caused incalculable mental agony, strain, harassment and humiliation besides bringing disrepute to the
Plaintiff and her family and all the allegations, imputations and statements made by the Defendants
directly affected Plaintiff in her personal as well as professional capacity.
In the present suit, the Plaintiff seeks damages of ` 1,000 million as compensation for the irreparable
loss, both in personal life as well as her professional life suffered by her and her parents. Summon for
settlement of issues were issued to appear on August 17, 2012. The matter is currently pending.
Tax cases
1.
Television Eighteen had filed its return of Income for assessment year 2008-2009 declaring total
income of `451.85 million. The return was selected for scrutiny and subsequently, notices under
section 143 (2) and section 142(1) of the Income Tax Act, 1961 (“Act”) making demand of ` 213.81
million were issued to Television Eighteen. In response to these notices, Television Eighteen made
various representations. However, the Deputy Commissioner of Income Tax Circle 16(1) (“DCIT”)
vide its assessment order dated December 28, 2011 (“Order”) passed under section 143 (3) of the Act,
determining the total income to be `833.00 million and revising the disallowed amount from `199.02
million as claimed by Television Eighteen to an amount of `124.12 million. Further, the DCIT
disallowed the claim of Television Eighteen amounting to `176.58 million as “employee stock
compensation expenses”. The DCIT also disallowed Television Eighteen’s claim of ` 0.04 million as
being prior period expenses which are not permissible in law. An amount of `80.40 million which had
been claimed by Television Eighteen as having been set off of business losses was also disallowed by
the DCIT. Consequently, the total income of Television Eighteen has been determined as `833.00
million instead of `451.85 million as filed by Television Eighteen on September 30, 2008. Pursuant to
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the Order, the Assistant Commissioner of Income Tax Circle 16(1) (“ACIT”) has issued notices dated
December 28, 2011, under section 274 read with section 271 of the Act and a notice of demand under
section 156 of the Act (“Demand Notice”), to Television Eighteen. Television Eighteen has filed an
appeal dated January 30, 2012 before the Commissioner of Income-Tax (Appeals) against the Demand
Notice. The matter is currently pending.
2.
Besides the aforementioned proceedings, there are three proceedings initiated by TV18 in respect of
refund of income tax pending before various authorities. The amount involved in these proceedings
cannot be ascertained.
Complaints to SEBI
1.
Mr. Victor Fernandes (“Complainant”) filed a complaint dated February 7, 2012 (“Complaint”) with
the Chairman of the Securities and Exchange Board of India (“SEBI”) alleging abuse of fiduciary
responsibility, breach of code of conduct and fraud on minority shareholders on the part of Mr. Raghav
Bahl (“Accused”) as our promoter, Network18, us and e-Eighteen.com Limited (“EEL”). The Accused,
vide the Complaint, has sought an investigation by SEBI into:
a.
the code of conduct documents filed by Network18 and TV18 with the National Stock
Exchange of India Limited and BSE Limited;
b.
the business objectives of and promoters’ covenants to EEL as given in a subscription-cumshareholders agreement dated September 12, 2000 (“SA200”);
c.
wrongful and willful breach of promoters’ covenants by the Accused;
d.
the list of opportunities availed by the Accused through entities other than EEL and EEL’s
wholly owned subsidiary;
e.
the plans of Network18 and TV18 to acquire economic stakes in various “ETV” channels by
availing funding from Independent Media Trust, an entity of Reliance Industries Limited
(“RIL”) as announced on January 3, 2012;
f.
EEL being deprived of its rightful opportunities, thereby causing loss to EEL, its parent
company and minority shareholders by the Accused;
g.
abuse of fiduciary responsibility to EEL by the Accused by diversion of opportunities to
himself;
h.
inadequacy of public disclosures relating to transactions of Network18 and TV18 with RIL;
and
i.
Non-compliance with SEBI guidelines for publicly listed companies, including non-compliance
with clause 49 of the listing agreement by failure to appoint one of its parent company’s
independent directors as an independent director on the board of EEL.
The Complainant has requested SEBI to initiate the following actions:
a.
Review and confirmation of the business objectives of EEL as given in SA200
b.
Investigation and confirmation that amendments in the business objectives and promoters’
covenants of EEL were never communicated to EEL’s shareholders
c.
Review of all acts of the Accused in respect of TV18 and EEL since September 12, 2000 and
all other entities owned/ controlled or connected with the Accused
d.
Review of the role played by Mr. Mohan Lal Jain (auditor of EEL) and Ms. Ritu Kapur in this
regard
e.
Taking of steps to prevent the Accused from engaging in opportunities identified in the
corporate announcement dated January 3, 2012 through any entity other than EEL
f.
Taking of steps/ actions to ensure that the Accused compensates the public shareholders of
TV18 for losses caused to him on his account
g.
Investigation of the transactions entered into between Reliance Industries Limited and the
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Accused and his companies
h.
To bar the Accused, Network18 and TV18 from accessing the capital markets until these issues
are resolved
i.
To not grant approval for the rights issues being contemplated by Network18 and TV18 until
these issues are resolved
j.
Review of the intent of the Accused and non-compliance with clause 49 of the listing
agreements
k.
To forward the Complaint to analyst/ investor associations and other such bodies as deemed fit
by SEBI to raise awareness of these problems
l.
To forward the Complaint to the Institute of Chartered Accountants of India to investigate the
role played by Mr. Mohan Lal Jain
m. Review of the conduct of our Company, TV18 and EEL’s board of directors and senior
management; and
n.
Review of averments made by the Accused and the senior management in the Accused’s
companies in certification documents over the years.
The Complainant has further sought an early response from SEBI with feedback on the actions that
SEBI has initiated and/ or plans to initiate against the Accused and related entities. The Complainant,
has vide letter dated February 24, 2012, addressed to Mr. Manoj Mohanka, forwarded a copy of the
Complaint filed with SEBI and requested Mr. Mohanka to review the Complaint and initiate/ take all
actions necessary to protect the interests of public shareholders. The matter is currently pending.
Litigation by TV18
Criminal cases
1.
TV18 filed criminal complaint (no. 461/2001) before the Court of the Metropolitan Magistrate, Delhi
against Zeal Infotainment Limited under section 138 read with section 141 of the Negotiable
Instruments Act, 1881 in respect of cheque bounce. The amount involved is ` 73,391. The matter is
currently pending.
Civil Cases
1.
TV18 filed writ petition bearing number 3480/2008 (“Writ Petition”) before the High Court of Delhi
challenging the order dated January 3, 2008 (“Order”) passed by MIB. MIB had issued a show cause
notice dated November 8, 2007 to TV18 alleging that IBN7, one of TV18’s channels had broadcast a
programme wherein Dr. Ajai Agarwal along with several other doctors were allegedly involved in
illegal amputation of limbs. Further, MIB vide the said Order directed IBN7 to run an apology scroll on
the channel, failing which there would be strict action including taking the channel off air. Aggrieved,
TV18 filed the Writ Petition. The matter is currently pending.
2.
STAR DEN Media Services Private Limited (“Petitioners”) filed petition (no. 248(c)/2010) (“Star’s
Petition”) before the Telecom Disputes Settlement and Appellate Tribunal, New Delhi (“Tribunal”)
against us under section 14A read with section 14A(ii) of the Telecom Regulatory Authority of India
Act, 1997 praying the Tribunal to declare a notice dated July 13, 2010 (“Termination Notice”) sent by
TV18 terminating a deal memo dated April 01, 2008 (“Deal Memo”) between the Petitioners and TV18
illegal, bad in law, null and void, declaring the Deal Memo as subsisting and binding on the Petitioners
and TV18, restraining TV18 from interfering with the distribution of TV18’s channels by the Petitioner
and for other necessary and ancilliary orders. TV18 filed its reply dated September 08, 2010 before the
Tribunal disputing the contentions made in Star’s Petition and contending that TV18 had the right to
terminate the Deal Memo since the Deal Memo was in the nature of an contract of agency. The
Tribunal rejected the Petitioners’ prayer for interim relief by way of specefic performance of the Deal
Memo vide its order dated July 29, 2010 (“Order 1”).
The Petititioners were granted exclusive rights to distribute certain television channels by way of the
Deal Memo. TV18 had sent the Petitioners the Termination Notice on the grounds that the Petitioners
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had replaced Disney channels with Fox International channels, had defaulted in payment of dues
amounting to ` 29.16 million, had failed to bifurcate TV18’s total revenue into channel-wise revenues
and had failed to execute a long form of agreement arising out of the Deal Memo. The Petitioners have
claimed that they have paid these outstanding dues in Star’s Petition.
TV18 also filed a petition (no. 222(c)/2010) (“TV18’s Petition”) before the Tribunal praying the
Tribunal to direct the Petitioners to provide all data, information, agreements and subscriber reports in
respect of TV18’s channels, to direct the Petitioners to make payment of further outstanding invoiced
dues amounting to ` 32.16 million, for a permanent injunction restraining the Petitioners from
representing TV18’s channels or from interfering in the distribution of TV18’s channels through other
sources and for other necessary and ancilliary orders. The Petitioners have claimed that they have paid
these outstanding dues in Star’s Petition. The Tribunal has passed an injunction restraining the
Petitioners from representing TV18’s channels vide its order dated July 29, 2010 (“Order 2”).
The Petitioners subsequently filed writ petition (nos. 5111/2010 and 5112/2010) (“Writ Petitions”)
before the High Court of Delhi at New Delhi (“High Court”) challenging Order 1 and Order 2
respectively. The High Court dismissed the Writ Petitions vide its order dated August 11, 2010. TV18
filed a rejoinder dated September 24, 2010 before the Tribunal amending TV18’s Petition and revising
TV18’s claim to ` 214.04 million and further to ` 2,464.48 million on May 16, 2011.
The Petitioners subsequently amended Star’s Petition in December, 2010 along with revised statement
reflecting the revenues towards TV18 Channels to be around `169.50 million (plus service tax) and
adding a claim of ` 2,595.4 million to the other reliefs already prayed for in Star’s Petition. The
Petitioners also filed an aplication before the Tribunal to amend Star’s Petition to implead TV18, which
was granted by the Tribunal vide its order dated October 14, 2011. TV18 further made a reference to
Media Pro Enterprise India Private Limited, a new entity formed by the Petitioners in TV18’s amended
reply to Star’s Petition dated November 24, 2011. This reference to Media Pro Enterprise India Private
Limited was allowed by the Tribunal vide its order dated January 4, 2012. The matter is currently
pending. The paties have expressed their intentions to settle the matter. The Tribunal has on August 16,
2012 granted further time for parties to report on settlement. The matter is currently pending.
Litigation involving Viacom18
II. Cases filed against Viacom18
Criminal litigation
1.
Ms. Cicilia Cardozo filed a first information report (no. 2345/2008) dated December 31, 2008 (“FIR”)
at the MHB Colony Police Station, Borivali against the chief executive officer of Viacom18 alleging
violation of section 2 of the Prevention of Insults to National Honour Act, 1971 in respect of alleged
derogatory inscriptions on the Indian national flag in a television programme aired on Vh1, a music
channel of Viacom18. Mr. Jimmy Hiramanek, channel producer, Viacom18 (“Applicant”) filed
anticipatory bail application (no. 142/2009) (“Application”) before the Sessions Court for Greater
Mumbai at Dindoshi, Goregaon, Mumbai (“Court”) in apprehension of arrest in proceedings conducted
through the FIR. The Court rejected the Application vide its order dated June 10, 2009. The Applicant
subsequently filed bail application (no. 1187/PS/2009) dated October 03, 2009 before the Metropolitan
Magistrate’s 17th Court at Borivali, Mumbai (“Metropolitan Court”), praying the Metropolitan Court to
grant him bail in lieu of a surety bond. The matter is currently pending.
2.
Ms. Jasbeerkaur Harmandeep Singh filed first information report (no. 162/08) dated June 16, 2008
(“FIR”) at the Bhoiwada Police Station, Mumbai (“Police”) alleging that the chief executive officer of
MTV (a music channel of Viacom18) and his colleagues had insulted the Sikh religion through an
advertisement aired on MTV, constituting offences under sections 295(a) read with section 34 of the
Indian Penal Code, 1870. Ashish Patil, the Vice President and General Manager of Content and
Creative of MTV (“Applicant”) filed an application for anticipatory bail (no. 150/2008) before the
Sessions Court for Greater Mumbai at Sewari, Mumbai (“Court”) in apprehension of arrest in
proceedings conducted through the FIR. The Court granted the Applicant ad-interim anticipatory bail
till June 30, 2008 vide its order dated June 20, 2008. The matter is currently pending.
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3.
Ms. Mumtaz, wife of Late Aziz Nazan (“Complainant”) filed complaint no. 866/SS of 2011 against
Viacom18 and Mr. Anuj Poddar, as Managing Director of MTV before the Court of the Additional
Chief Metropolitan Magistrate, Mazgaon, Mumbai (“Court”) on August 30, 2011 alleging defamation
under section 500 of the Indian Penal Code, 1860. It was alleged that Mr. Aziz Nazan was a singer and
in one of the programmes on a channel run by Viacom18, he was mentioned as a Pakistani singer
which has caused irreparable harm to the family of the Complainant. Viacom18 has filed criminal
application no. 1185/2011 before the High Court of Judicature at Bombay (“High Court”) for quashing
the petition. The High Court directed Viacom18 to file a revision petition before the Court vide its
order dated January 31, 2012. Viacom18 has thus filed the revision petition in February, 2012 before
the Sewri Sessions Court for quashing of the complaint. On 28 March 2012 the Sessions Judge passed
an interim order for the stay of lower court proceedings. The matter is currently pending.
4.
Mr. Ramdas Athawale (“Complainant”) filed a complaint dated August 20, 2008 with the Azad Maidan
police station against Colors channel and others (“Accused”) stating that he was invited by the Accused
to take part in a reality television show. It was alleged that the Accused did not allow the Complainant
to participate in the show as he was from a scheduled caste. The matter is pending investigation.
Civil litigation
1.
Board of Control for Cricket in India (“BCCI”) has initiated arbitration proceedings against Viacom18
with respect to disputes arising from a memorandum of understanding dated January 22, 2010, as
amended (“MoU”) executed between the two parties. BCCI had granted Viacom18 certain rights in
relating to creation of entertainment shows which would have a distinct association with IPL with
respect to the Indian Premier League. Due to breach of the terms, Viacom18 terminated the MoU on
June 2, 2010. BCCI has disputed Viacom18’s termination and claimed dues amounting to `
231,630,000 plus ` 5,000,000 with interest at 18% p.a. Viacom18 has rejected this claim and raised a
claim of ` 753,000,000 on BCCI. As per the terms of the MoU, BCCI and Viacom 18 have appointed
an arbitrator each and the two arbitrators have appointed a presiding arbitrator. BCCI has filed a
statement of claim on November 25, 2011. A detailed reply and counter claim has been filed by
Viacom18 and BCCI is required to file its rejoinder and reply to Viacom18’s counter claim by July 2,
2012. BCCI sought an extension of one month which has been allowed by the Arbitrators, after
considering that the parties are under discussions for settlement. The matter is currently pending.
2.
A suit (Suit (Lod.) No. 941 of 2012) was filed by Ms. Maya Krishnan, Proprietor of Clockwork Studio
(“Plaintiff”) on April 10, 2012 against Viacom18 and others (“Defendant”) in the Bombay High Court
for restraining the channel MTV from airing its show based on travel and music called “Sound
Trippin”. The Plaintiff claimed that this show is based on similar concept / format which was shared
by her with the Defendant No. 2, in August 2011. The show which was developed by the plaintiff was
titled “Sound Yatra” which comprised of 13 episodes and one song. The show developed by MTV
titled “Sound Trippin” comprises of 10 episode and 10 songs and is hosted by a music composer Ms.
Sneha Khanvilkar. The Defendants claimed that “Sound Trippin” is a totally different show and there
are many shows based on travel & music which were aired throughout the world including on the
channel “Star World” titled “Devwarists” and further there is no novelty in this type of show based on
music and travel, hence no copyright should be protected. The matter was fixed for hearing on April
13, 2012 for interim injunction and the same was rejected by the Hon’ble of High Court of Bombay.
MTV “Sound Trippin” went on air from April 14, 2012 and last episode aired on June 23, 2012. The
matter is pending hearing.
3.
A suit (CS (OS) 1161/2012) was filed by Manish Kumar proprietor of Soul and Alpana Borpatra,
Partner of Openmind (“Plaintiffs”) against Viacom18 and others (“Defendants”) on April 18, 2012 in
Delhi High Court claiming copyrights in a format of the show “Sound Trippin” aired on MTV channel.
The suit filed prays for a permanent injunction against the telecast of “Sound Trippin” and for claiming
damages for such usage. The matter listed for hearing before the Hon’ble High Court but no injunction
was granted against the defendants till May 25, 2012. On May 25, 2012 the Hon’ble Court passed an
order directing the Defendant No. 1 to submit the agreement signed with Defendant No. 2 for
production of the show, the revenue details and to suggest the name of technical person who can give
his expert opinion on both the shows. Last episode of “Sound Trippin” aired on June 23, 2012. The
matter is fixed for hearing on October 5, 2012.
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Tax litigation
1.
The Additional Commissioner of Income Tax-11(1) (“ACIT”) vide assessment order dated February
25, 2011 (“Order”) passed under section 143(3) read with section 144C of the Income Tax Act, 1961
(“Act”), determined the total income for the assessment year 2007-2008 as ` 241.73 million (before set
off of brought forward loss and unabsorbed depreciation). The ACIT has made a transfer pricing
adjustment of ` 67.34 million, taxed advance received of ` 3.65 million and disallowed Viacom18’s
claim of expenditure to the extent of ` 41.16 million and ` 0.68 on account of “advertisement and sales
promotion expenses” and “entertainment expenses” respectively. Pursuant to the Order, the ACIT
issued a notice of demand dated February 25, 2011 under section 156 of the Act demanding payment of
` 97.65 million. Viacom18 has, as on April 1, 2011, filed an appeal before the Commissioner of
Income Tax (Appeals)-15 against the Order. Penalty proceedings under section 274 read with section
271(1)(c) of the Act have also been initiated. The matter is currently pending.
2.
In addition to the above, four other tax related proceedings are pending against Viacom18 at various
stages of adjudication in respect of of income tax. The aggregate amount claimed through these
proceedings is approximately ` 113.34 million.
3.
One show cause notice has been issued to Viacom18 in respect of service tax. The aggregate amount
claimed through these show cause notices is approximately ` 33.84 million.
III. Cases filed by Viacom18
Criminal litigation
1.
Viacom18 has filed criminal complaint (no. 4430/SS/2005) before the Court of Metropolitan
Magistrates, 8th Court at Esplanade, Bombay (“Court”) against Mr. Paul Chakola, proprietor, Chakola
Ayurvedics (“Accused”) under section 138 read with section 141 of the Negotiable Instruments Act,
1881 in respect of dishonour of a cheque amounting to ` 1 million. The Court issued an arrest warrant
in respect of of the Accused dated May 08, 2009. Subsequently, Viacom18 made an application dated
October 18, 2010 to impound the Accused’s passport, which was rejected by the Court vide its order
dated January 18, 2011. The matter is currently pending.
2.
Viacom18, Endemol India Private Limited and five others (“Petitioners”) filed criminal writ petition
(no. 2170/2008) before the High Court of Judicature at Bombay (“High Court”) against the State of
Maharashtra and the Senior Inspector of Police, Andheri Police Station, Mumbai (“Respondents”)
under section 482 of the Code of Criminal Procedure, 1973 praying the High Court to quash criminal
proceedings instituted through first information report (no. 34/2008) dated October 12, 2008 and
criminal complaint dated October 04, 2008 (“Proceedings”) lodged at the Police Station, Lonavla,
Thane. The Proceedings had been initiated under sections 292 read with section 34 of the Indian Penal
Code, 1870 and the Indecent Representation of Women (Prohibition) Act, 1986 alleging the Petitioners
of propagating indecency and vulgarity through their television show. The Petitioners also filed
criminal miscellaneous application number 376/2008 before the High Court praying for interim The
High Court has restrained the Respondents from taking any coercive steps against the Petitioner vide its
order dated October 13, 2008. The matter is currently pending.
3.
Viacom18 filed complaint no. 107/S/2003 (new no. 485/S/2005) and 67/S/ 2003 (new no. 487/S/2005)
against Magnasound (India) Limited and others (“Accused”) before the Court of the Additional Chief
Metropolitan Magistrate, Girgaon, Mumbai on January 21, 2003 under section 138 read with section
141 of the Negotiable Instruments Act, 1881 stating that two cheques issued by the Accused in their
favour amounting to ` 80,00,000 and ` 30,00,000 had been dishonoured. The Accused filed discharge
applications before the Court of the Magistrate, Girgaon which were rejected vide order dated October
19, 2004. The revision application filed by the Accused in the Court of Sessions was also dismissed on
June 26, 2006. The matter is currently pending.
4.
Viacom18 filed complaint no. 6461/SS/2010 against Primus Retail Private Limited and others
(“Accused”) before the Court of the Metropolitan Magistrate, Dadar, Mumbai on October 19, 2010
under section 138 read with section 141 of the Negotiable Instruments Act, 1881 stating that two
cheques issued by the Accused in their favour amounting to ` 1,061,652 each had been dishonoured.
295
The Accused had issued 12 post dated cheques towards the settlement against the consideration payable
under an agreement executed between Viacom18 and the Accused. The Accused filed criminal writ
petition no. 494/2011 before the High Court of Judicature at Bombay (“High Court”) praying for stay
of the proceedings in the court of the Metropolitan Magistrate, Dadar, Mumbai which was dismissed
vide order dated August 3, 2011. The High Court restored the criminal writ petition on August 16, 2011
and granted ex parte stays of proceedings vide order dated December 2, 2011. The matter is currently
pending.
Litigation involving IBN Lokmat
IV. Cases filed against IBN Lokmat
1.
Mr. Mobin Ahmed Hanif (“Complainant”) filed criminal complaint (no. 8/SS/11) before the Court of
the Additional Chief Metropolitan Magistrate, 46 th Court, Mazgao, Mumbai (“Court”) against Mr.
Nikhil Wagle, editor of IBN Lokmat (“Accused”), IBN Lokmat News Private Limited, Lokmat
Newspaper Limited, and Hindustan Times alleging defamation under sections 499, 500, 501 and 502
read with section 34 of the Indian Penal Code, 1860 in respect of a story dated September 29, 2010
aired on IBN Lokmat news channel containing defamatory statements against the Complainant. The
Court passed an order dated January 24, 2011 issuing summons on the Accused. The Accused made an
application dated September 28, 2011 before the Court, seeking exemption from personally appearing
in hearings before the Court and the same has been granted by the Hon’ble Court. The matter is
currently pending.
V. Cases filed by IBN Lokmat
1.
Mr. Mangesh Joshi filed a first information report (no. 378/2009) (“FIR 1”) at the Park Site Police
Station (“Police Station”) under sections 141-149, 307, 323, 324, 326, 341, 354, 427 and 452 of the
Indian Penal Code, 1870 (“Act”) alleging that workers of a certain organisation had vandalised IBN
Lokmat’s office premises at Vikhroli on November 20, 2009. Mr. Ashwin Savekar (“Accused 1”), one
of the accused in the FIR, filed first information report (no. 05/2009) (“FIR 2”) at the Police Station
under sections 143, 144, 148, 149, 307, 326 and 34 of the Act alleging that he was attacked
(“Allegation”) by IBN Lokmat’s staff upon instruction of Mr. Nikhil Wagle (“Accused 2”). Accused 1
also filed criminal complaint (no. 5/2009) before the Court of the Metropolitan Magistrate, 34th Court,
Vikhroli (“Court”) in respect of the same Allegation. The Court, vide its order dated December 03,
2009, directed the Inspector at the Police Station to investigate this matter. Accused 2 subsequently
filed anticipatory bail application (no. 1281/2010) (“Application”) before the Sessions Court for
Greater Bombay at Bombay (“Sessions Court”) in apprehension of arrest in proceedings conducted
through FIR 2. The Sessions Court granted Accused 2 bail in anticipation of arrest vide its order dated
February 17, 2010 (“Order”). Accused 2 has further filed miscellaneous application (no. 91/2011)
(“Interim Application”) before the Sessions Court in the Application for interim protection of
anticipatory bail granted through the Order. The Sessions Court has allowed the Interim Application
vide its order dated August 10, 2011 and has confirmed the Order. The matters are currently pending.
2.
Ms. Alka Murund has filed a first information report (no. 22/2011) dated March 11, 2011 at the Murud
Police Station alleging that she had been assaulted and robbed by a mob while covering news for
channel IBN Lokmat.
296
GOVERNMENT APPROVALS
We have received the necessary consents, licenses, permissions and approvals from the Government of India
and various governmental agencies required for our present business and to undertake the Issue and no further
material approvals are required for carrying on our present activities. In addition, except as mentioned in this
chapter as on the date of this Letter of Offer, there are no pending regulatory and government approvals and no
pending material renewals of licenses or approvals in relation to the activities undertaken by us or in relation to
the Issue.
I.
Pending Approvals for our business:
Except as stated below under the heading “Pending Approvals and Registrations”, we have received the
necessary consents, licenses, permissions and approvals from the Government of India and various
governmental agencies required for our present business and no further material approvals are required
for carrying on our present activities.
II.
Pending Approvals and Registrations:
As on date of this Letter of Offer the following applications are pending with respect to our
business:
1.
2.
Application dated June 22, 2011 made to the Deputy Director (INSAT), Ministry of Information and
Broadcasting for transferring the following permissions from Television Eighteen to us:
a.
Permission dated October 28, 2009 to uplink CNBC-TV18 and CNBC – Awaaz.
b.
Permissions for operating teleports vide letters numbers 1404/ 5(i)/ 2001-TV(I) dated March 18,
2002, 1404/ 5(i)/ 2001-TV(I) dated March 19, 2004, 1404/ 5(i)/ 2001-TV(I) dated September 14,
2005, 1404/ 5(i)/ 2001-TV(I) dated November 29, 2004, 1404/ 5(i)/ 2001-TV(I) dated February 23,
2007, 1404/ 5(i)/ 2001-TV(I) dated November 16, 2007.
c.
Permissions for operating DSNG Vans/ SNG Terminals/ Ku Band/ C Band Flyway Terminals vide
letters dated 1404/ 5(i)/ 2001-TV(I) dated April 1, 2005, 1404/ 5(i)/ 2001-TV(I) dated July 27,
2005, 1404/ 5(i)/ 2001-TV(I) dated May 22, 2008, July 15, 2008, 1404/ 5(i)/ 2001-TV(I) dated
December 12, 2008, 1404/ 5(i)/ 2001-TV(I) dated September 3, 2009, 1404/ 5(i)/ 2001-TV(I)
dated December 6, 2010 and 1404/ 5(i)/ 2001-TV(I)/ 11 dated March 8, 2011.
Application dated July 4, 2011 filed with WPC, Ministry of Communications & Information
Technology for transferring the following permissions from Television Eighteen to us:
a.
b.
all existing WPC Permissions, DSNG and Teleport Operating Licenses; and
recording of change of name from ‘ibn18 Broadcast Limited’ to ‘TV18 Broadcast Limited’.
Grant of these permissions are subject to receipt of approval from MIB as mentioned in Clause (1)
above.
3.
Application dated July 1, 2011 filed with Network Operations Control Center, DOT for transferring the
following permissions from Television Eighteen to us:
a.
b.
all existing WPC Permissions, DSNG Vans/ SNG terminals/ Flyways and Teleport Operating
Licenses; and
recording of change of name from ‘ibn18 Broadcast Limited’ to ‘TV18 Broadcast Limited’’
Grant of these permissions is subject to receipt of approval from MIB as mentioned in Clause (1)
above.
4.
Pending Trademark Applications:
As of July 31, 2012, we have 277 pending applications, which includes trademarks, under several
297
classes of the Trade Marks Act, 1999 and applications for change of ownership of trademarks, which
were originally filed/ registered in the name of erstwhile Television Eighteen and Jagran TV Private
Limited.
5.
Execution of agreement with ANTRIX, Department of Space for Ku-Band satellite bandwidth for use
by DSNG Vans.
6.
Application to MIB dated July 3, 2012 for permission for remittance in foreign currency for services
fee to Intelsat Corporation, USA with respect to Colors HD, History TV18 channel, CNBC TV18 Prime
HD etc.
7.
Transfer of EPCG License no. 0530137259 dated October 21, 2004 issued in the name of erstwhile
iNews.com Limited and transferred to us pursuant to the Scheme of Arrangement vide application
dated June 15, 2011 to the Zonal Joint Director General of Foreign Trade, New Delhi.
8.
Application to Deputy Wireless Advisor, MCIT, dated June 27, 2012 for renewal of the DSNG Vans
Operating License No. SNG-61/1-29.
298
OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
The Issue of Equity Shares to the Eligible Equity Shareholders is being made in accordance with the resolution
passed by our Board of Directors under Sections 81(1), 81(1A) and other provision of the Companies Act, at the
meeting held on January 3, 2012 and Equity Shareholders’ approval vide resolution passed by postal ballot on
February 24, 2012.
The Board of Directors or Committee thereof (including the Capital Issues Committee) in their meeting held on
August 31, 2012 have determined the Issue Price as ` 20 per Equity Share and the Rights Entitlement as 41
Equity Share(s) for every 11 fully paid up Equity Share(s) held on the Record Date. The Issue Price has been
arrived at in consultation with the Lead Managers.
Prohibition by SEBI or RBI
Neither we, the Promoters, the Promoter Group entities, the Directors nor the persons in control of the corporate
Promoters or any other company to which the above persons are associated as promoters, directors or persons in
control, have been prohibited from accessing or operating in the capital markets, or restrained from buying,
selling or dealing in securities under any order or direction passed by the SEBI.
Except as stated below, none of the Directors of the Company are associated with the capital markets in any
manner.
Mr. Shahzaad Dalal
1.
South Asian Regional Apex Fund (“SARA Fund”) is a Venture Capital Fund registered with SEBI. Mr.
Dalal is a Director on the Board of Sara Fund Trustee Company Private Limited, the Trustees of the SARA
Fund and also the Vice Chairman of IL&FS Investment Managers Limited, the Managers of the SARA
Fund. The details of the SARA Fund are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
2.
Name of the Entity
(a)
Previously associated as
(b)
Currently associated as
Category of registration
Registration Number of companies which are/were
registered with SEBI
If registration has expired, reasons for non renewal
Details of any enquiry/investigation conducted by
SEBI at any time
Penalty imposed by SEBI (Penalty includes
deficiency/warning letter, adjudication proceedings,
suspension/cancellation/prohibition orders)
Outstanding fees payable by SEBI by these
persons/entities, if any
:
:
:
:
:
South Asian Regional Apex Fund
--Venture Capital Fund
IN/VC/99-00/017
:
:
N.A.
None
:
None
:
Nil
Tamil Nadu Infotech Fund is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice Chairman
of IL&FS Investment Managers Limited, the Managers of the Tamil Nadu Infotech Fund. The details of the
Tamil Nadu Infotech Fund are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
Name of the Entity
(a)
(b)
SEBI at any time
299
:
:
:
:
:
Tamil Nadu Infotech Fund
IN/VC/98-99/011
:
:
N.A.
None
viii.
ix.
3.
vi.
vii.
viii.
ix.
None
:
Nil
Name of the Entity
(a)
(b)
SEBI at any time
:
:
:
:
:
IL&FS Private Equity Trust
IN/VCF/04-05/050
:
:
N.A.
None
:
None
:
Nil
Urjankur Nidhi Trust is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice Chairman of
IL&FS Investment Managers Limited, the Managers of the Urjankur Nidhi Trust. The details of the
Urjankur Nidhi Trust are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
5.
:
IL&FS Private Equity Trust is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice
Chairman of IL&FS Investment Managers Limited, the Managers of IL&FS Private Equity Trust. The
details of the IL&FS Private Equity Trust are as under:
i.
ii.
iii.
iv.
v.
4.
Name of the Entity
(a)
(b)
SEBI at any time
:
:
:
:
:
Urjankur Nidhi Trust
IN/VCF/05-06/084
:
:
N.A.
None
:
None
:
Nil
Leverage India Fund is a scheme of IL&FS Private Equity Trust, which is a Venture Capital Fund
registered with SEBI. Mr. Dalal is the Vice Chairman of IL&FS Investment Managers Limited, the
Managers of IL&FS Private Equity Trust. The details of the same are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
Name of the Entity
:
(a)
(b)
SEBI at any time
:
:
:
:
Leverage India Fund – scheme of
IN/VCF/04-05/050
:
:
N.A.
None
300
viii.
ix.
6.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
None
:
Nil
Name of the Entity
:
(a)
(b)
SEBI at any time
:
:
:
:
Infrastructure Leasing & Financial
Services Realty Fund – scheme of
IN/VCF/04-05/050
:
:
N.A.
None
:
None
:
Nil
Tara India Fund III Trust is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice Chairman
of IL&FS Investment Managers Limited, the Managers of the Tara India Fund III Trust. The details of the
Tara India Fund III Trust are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
8.
:
Infrastructure Leasing & Financial Services Realty Fund is a scheme of IL&FS Private Equity Trust, which
is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice Chairman of IL&FS Investment
Managers Limited, the Managers of IL&FS Private Equity Trust. The details of the same are as under:
i.
7.
Name of the Entity
(a)
(b)
SEBI at any time
:
:
:
:
:
Tara India Fund III Trust
IN/VCF/07-08/111
:
:
N.A.
None
:
None
:
Nil
Tara India Fund III Domestic Trust is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice
Chairman of IL&FS Investment Managers Limited, the Managers of the Tara India Fund III Domestic
Trust. The details of the Tara India Fund III Domestic Trust are as under:
i. Name of the Entity
: Tara India Fund III Domestic Trust
ii. (a)
: -iii. (b)
: -iv. Category of registration
: Venture Capital Fund
v. Registration Number of companies which are/were
: IN/VCF/08-09/119
vi. If registration has expired, reasons for non renewal
: N.A.
vii. Details of any enquiry/investigation conducted by
: None
SEBI at any time
301
viii.
ix.
9.
:
None
:
Nil
IL&FS Investment Managers Limited is a Company registered with SEBI as Portfolio Manager. Mr. Dalal
is the Vice Chairman of IL&FS Investment Managers Limited. The details of IL&FS Investment Managers
Limited are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
Name of the Entity
:
(a)
(b)
SEBI at any time
:
:
:
:
IL&FS
Investment
Limited
--Portfolio Manager
INP000003237
:
:
N.A.
None
:
None
:
Nil
Managers
10. IL&FS Financial Services Limited is a Company registered with SEBI as Underwriter Mr. Dalal is a
Director on the Board of IL&FS Financial Services Limited. The details of IL&FS Financial Services
Limited are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
Name of the Entity
(a)
(b)
SEBI at any time
:
:
:
:
:
IL&FS Financial Services Limited
--Underwriter
INU000001298
:
:
N.A.
None
:
None
:
Nil
11. Tara India Fund IV Trust is a Venture Capital Fund registered with SEBI. Mr. Dalal is the Vice Chairman
of IL&FS Investment Managers Limited, the Managers of the Tara India Fund IV Trust. The details of the
Tara India Fund IV Trust are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
Name of the Entity
(a)
(b)
SEBI at any time
302
:
:
:
:
:
Tara India Fund IV Trust
IN/VCF/11-12/0207
:
:
N.A.
None
viii.
ix.
:
None
:
Nil
12. Milestone Real Estate Fund is a Venture Capital Fund registered with SEBI. Mr. Dalal is a Director of
IL&FS Milestone Realty Advisors Private Limited, the Managers of the Milestone Real Estate Fund. The
details of the Milestone Real Estate Fund are as under:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
Name of the Entity
(a)
(b)
SEBI at any time
:
:
:
:
:
Milestone Real Estate Fund
IN/VCF/05-06/068
:
:
N.A.
None
:
None
:
Nil
SEBI has not initiated action against any entities with which the Directors are associated.
Further neither us, the Promoters, the Promoter Group entities, the group companies nor the relatives of the
Promoters have been declared willful defaulters by the RBI or any other authority and no violations of securities
laws have been committed by them in the past and no proceedings in relation to such violations are currently
pending against them.
Except as stated in the chapter titled “Our Management” on page 68, none of our directors hold current or have
held directorships in the last five years in a listed company whose shares have been suspended from trading on
BSE or NSE or in a listed company that has been/ was delisted from any stock exchange.
Eligibility for the Issue
We are an existing company registered under the Companies Act and our Equity Shares are listed on BSE and
NSE. We are eligible to undertake the Issue in terms of Chapter IV of the SEBI ICDR Regulations.
We are eligible to make disclosures in this Letter of Offer as per clause 5 under Part E of Schedule VIII of the
SEBI ICDR Regulations as we are in compliance with the following:
a) we have been filing periodic reports, statements and information in compliance with the listing agreement
for the last three years immediately preceding the date of filing the Draft Letter of Offer with SEBI;
b) the reports, statements and information referred to in sub-clause (a) above are available on the website of
BSE and NSE which are recognised stock exchange with nationwide trading terminals;
c) we have an investor grievance-handling mechanism which includes meeting of the Shareholders’/
Investors’ Grievance Committee at frequent intervals, appropriate delegation of power by the Board of
Directors as regards share transfer to the Share Transfer Committee and clearly laid down systems and
procedures for timely and satisfactory redressal of investor grievances.
DISCLAIMER CLAUSE OF SEBI
AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI.
IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THE DRAFT LETTER OF
303
OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME
HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY
EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH
THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS
MADE OR OPINIONS EXPRESSED IN THIS LETTER OF OFFER. THE LEAD MANAGERS, ICICI
SECURITIES LIMITED AND RBS EQUITIES (INDIA) LIMITED, HAVE CERTIFIED THAT THE
DISCLOSURES MADE IN THIS LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN
CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO
FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT
IN THE PROPOSED ISSUE.
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF
ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE LEAD MANAGERS ARE
EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES
ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE
LEAD MANAGERS, ICICI SECURITIES LIMITED AND RBS EQUITIES (INDIA) LIMITED, HAVE
FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED MARCH 1, 2012 WHICH
READS AS FOLLOWS:
(1)
WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS, ETC. AND OTHER MATERIAL MORE PARTICULARLY REFERRED
TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE
DRAFT LETTER OF OFFER PERTAINING TO THE ISSUE;
(2)
ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY,
ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT
VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE,
PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER
PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:
(a)
(b)
(c)
THE DRAFT LETTER OF OFFER FILED WITH SEBI IS IN CONFORMITY WITH
THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE
REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ ISSUED BY SEBI,
THE GOVERNMENT OF INDIA AND ANY OTHER COMPETENT AUTHORITY IN
THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR
AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED
DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH
DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE
COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009
AND OTHER APPLICABLE LEGAL REQUIREMENTS.
(3)
WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN
THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT UNTIL DATE
SUCH REGISTRATION IS VALID.
(4)
WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS
TO FULFIL THEIR UNDERWRITING COMMITMENTS – NOT APPLICABLE
(5)
WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED
FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS’
CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED
TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT
BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD
304
STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS/ RED
HERRING PROSPECTUS WITH SEBI TILL THE DATE OF COMMENCEMENT OF LOCKIN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS/ RED HERRING
PROSPECTUS – NOT APPLICABLE
(6)
WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF
PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE
DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE
IN THE DRAFT RED HERRING PROSPECTUS / RED HERRING PROSPECTUS – NOT
APPLICABLE
(7)
WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C)
AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND
EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT
ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION
SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE
UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY
SUBMITTED TO SEBI. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN
MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN
ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE
RELEASED TO THE ISSUER ALONG WITH THE PROCEEDS Of THE PUBLIC ISSUE – NOT
APPLICABLE
(8)
WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE OBJECTS
LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR
OTHER CHARTER OF THE COMPANY AND THAT THE ACTIVITIES WHICH HAVE BEEN
CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS
MEMORANDUM OF ASSOCIATION.
(9)
WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE
BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF
THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE
SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK
EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER. WE FURTHER CONFIRM
THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND
THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. – NOTED FOR
COMPLIANCE, SUBJECT TO COMPLIANCE WITH REGULATION 56 OF THE SEBI ICDR
REGULATIONS
(10)
WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF
OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN
DEMAT OR PHYSICAL MODE.
(11)
WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO
DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE
INVESTOR TO MAKE A WELL INFORMED DECISION.
(12)
WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE
DRAFT LETTER OF OFFER:
305
(a)
(b)
AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE
SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE
COMPANY AND
AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY SEBI FROM TIME TO
TIME.
(13)
WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO
ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE
MAKING THE ISSUE.
(14)
WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS
BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS
BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS
STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE,ETC.
(15)
WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH
THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS
OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE
REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
(16)
WE ENCLOSE STATEMENT ON ‘PRICE INFORMATION OF PAST ISSUES HANDLED BY
MERCHANT BANKERS BELOW (WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)’,
AS PER FORMAT SPECIFIED BY SEBI THROUGH CIRCULAR. - NOT APPLICABLE
THE FILING OF THIS LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY
FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR
FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCE AS
MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER
RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGERS
ANY IRREGULARITIES OR LAPSES IN THIS LETTER OF OFFER.
Caution
Disclaimer clauses from the Company and the Lead Managers
We and the Lead Managers accept no responsibility for statements made otherwise than in this Letter of Offer or
in any advertisement or other material issued by us or by any other persons at our instance and anyone placing
reliance on any other source of information would be doing so at his own risk.
We and the Lead Managers shall make all information available to the Equity Shareholders and no selective or
additional information would be available for a section of the Equity Shareholders in any manner whatsoever
including at presentations, in research or sales reports etc. after filing of this Letter of Offer with SEBI.
No dealer, salesperson or other person is authorized to give any information or to represent anything not
contained in this Letter of Offer. You must not rely on any unauthorized information or representations. This
Letter of Offer is an offer to sell only the Equity Shares and rights to purchase the Equity Shares offered hereby,
but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this
Letter of Offer is current only as of its date.
Investors who invest in the Issue will be deemed to have represented to us and Lead Managers and their
respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable
laws, rules, regulations, guidelines and approvals to acquire Equity Shares, and are relying on independent
advice/ evaluation as to their ability and quantum of investment in the Issue.
306
Disclaimer with respect to jurisdiction
This Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and
regulations thereunder. Any disputes arising out of the Issue will be subject to the jurisdiction of the appropriate
court(s) in New Delhi, India only.
Designated Stock Exchange
The Designated Stock Exchange for the purpose of the Issue will be NSE.
Disclaimer Clause of BSE
As required, a copy of the Draft Letter of Offer has been submitted to BSE. The Disclaimer Clause as intimated
by BSE to us, post scrutiny of the Draft Letter of Offer, is as follows:
“BSE Limited ("the Exchange") has given vide its letter DCS/PREF/PR/IP-RT/278/2012-2013 dated July 13,
2012, permission to this Company to use the Exchange's name in this Letter of Offer as one of the stock
exchanges on which this Company's securities are proposed to be listed. The Exchange has scrutinized this letter
of offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this
Company. The Exchange does not in any manner:
i.
ii.
iii.
warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or
warrant that this Company's securities will be listed or will continue to be listed on the Exchange; or
take any responsibility for the financial or other soundness of this Company, its promoters, its
management or any scheme or project of this Company;
and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved
by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company
may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in
connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated
herein or for any other reason whatsoever.”
Disclaimer Clause of NSE
As required, a copy of the Draft Letter of Offer has been submitted to NSE. The Disclaimer Clause as intimated
by NSE to us, post scrutiny of the Draft Letter of Offer, is as follows:
“As required, a copy of this letter of offer has been submitted to National Stock Exchange of India Limited
(hereinafter to as NSE). NSE has given vide its letter Ref. No. NSE/LIST/176260-F dated July 26, 2012
permission to the Issuer to use the Exchange's name in this Letter of Offer as one of the stock exchanges on which
this Issuer's securities are proposed to be listed. The Exchange has scrutinised this Letter of Offer for its limited
internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly
understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the
Letter of Offer has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the
correctness or completeness of any of the contents of this letter of offer; nor does it warrant that this Issuer's
securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the
financial or other soundness of this Issuer, its promoters, its management or any scheme or project of this Issuer.
Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to
independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by
reason of any loss which may be suffered by such person consequent to or in connection with such subscription /
acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.”
Filing
The Draft Letter of Offer was filed with the Corporation Finance Department of the SEBI, located at SEBI
Bhavan, C-4-A, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051, India for its observations.
307
SEBI has vide its letter CFD/DIL/SK/PHV/OW/18639/2012 dated August 17, 2012 issued its final observations
and the final Letter of Offer has been filed with the Designated Stock Exchange as per the provisions of the
Companies Act.
Selling Restrictions
The distribution of this Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain
jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons
into whose possession this Letter of Offer may come are required to inform themselves about and observe such
restrictions. We are making this Issue of Equity Shares on a rights basis to our eligible Equity Shareholders and
will dispatch the Letter of Offer/ Abridged Letter of Offer and CAFs to the eligible Equity Shareholders who
have provided an Indian address.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for
that purpose, except that the Draft Letter of Offer was filed with SEBI for observations. Accordingly, the rights
or Equity Shares may not be offered or sold, directly or indirectly, and this Letter of Offer may not be
distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction.
Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to
make such an offer and, under those circumstances, this Letter of Offer must be treated as sent for information
only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer
should not, in connection with the issue of the rights or Equity Shares or rights, distribute or send the same in or
into the United States or any other jurisdiction where to do so would or might contravene local securities laws or
regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or nominee,
they must not seek to subscribe to the Equity Shares or the rights referred to in this Letter of Offer.
Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any
implication that there has been no change in the Company’s affairs from the date hereof or that the information
contained herein is correct as at any time subsequent to this date.
IMPORTANT INFORMATION
RESTRICTIONS
FOR
INVESTORS
–
ELIGIBILITY
AND
TRANSFER
As described more fully below, there are certain restrictions regarding the rights and Equity Shares that affect
potential investors. These restrictions are restrictions on the ownership of Equity Shares by such persons
following the offer.
The rights and the Equity Shares have not been and will not be registered under the Securities Act or any
other applicable law of the United States and, unless so registered, may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the
Securities Act) (“U.S. Persons”) except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable state securities laws.
The rights and the Equity Shares have not been and will not be registered, listed or otherwise qualified in
any jurisdiction outside India and may not be offered or sold, and bids may not be made by persons in
any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.
Until the expiry of 40 days after the commencement of the Issue, an offer or sale of rights or Equity Shares
within the United States by a dealer (whether or not it is participating in the Issue) may violate the registration
requirements of the Securities Act.
Eligible Investors
The rights or Equity Shares are being offered and sold only to persons who are outside the United States and are
not U.S. Persons, nor persons acquiring for the account or benefit of U.S. Persons, in offshore transactions in
reliance on Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers
and sales occur. All persons who acquire the rights or Equity Shares are deemed to have made the
representations set forth immediately below.
308
Equity Shares and Rights Offered and Sold in this Issue
Each purchaser acquiring the rights or Equity Shares, by its acceptance of this Letter of Offer and of the rights
or Equity Shares, will be deemed to have acknowledged, represented to and agreed with us and the Lead
Managers that it has received a copy of this Letter of Offer and such other information as it deems necessary to
make an informed investment decision and that:
(1)
the purchaser is authorized to consummate the purchase of the rights or Equity Shares in compliance with
all applicable laws and regulations;
(2)
the purchaser acknowledges that the rights and Equity Shares have not been and will not be registered
under the Securities Act or with any securities regulatory authority of any state of the United States and,
accordingly, may not be offered or sold within the United States or to, or for the account or benefit of,
U.S. Persons except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
(3)
the purchaser is purchasing the rights or Equity Shares in an offshore transaction meeting the
requirements of Rule 903 of Regulation S under the Securities Act;
(4)
the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the rights or
Equity Shares, is a non-U.S. Person and was located outside the United States at each time (i) the offer
was made to it and (ii) when the buy order for such rights or Equity Shares was originated, and continues
to be a non-U.S. Person and located outside the United States and has not purchased such rights or Equity
Shares for the account or benefit of any U.S. Person or any person in the United Sates or entered into any
arrangement for the transfer of such rights or Equity Shares or any economic interest therein to any U.S.
Person or any person in the United States;
(5)
the purchaser is not an affiliate of the Company or a person acting on behalf of an affiliate;
(6)
if, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such rights or Equity
Shares, or any economic interest therein, such rights or Equity Shares or any economic interest therein
may be offered, sold, pledged or otherwise transferred only (A) outside the United States in an offshore
transaction complying with Rule 903 or Rule 904 of Regulation S under the Securities Act and (B) in
accordance with all applicable laws, including the securities laws of the states of the United States. The
purchaser understands that the transfer restrictions will remain in effect until the Company determines, in
its sole discretion, to remove them, and confirms that the proposed transfer of the rights or Equity Shares
is not part of a plan or scheme to evade the registration requirements of the Securities Act;
(7)
the purchaser agrees that neither the purchaser, nor any of its affiliates, nor any person acting on behalf of
the purchaser or any of its affiliates, will make any “directed selling efforts” as defined in Regulation S
under the Securities Act in the United States with respect to the rights or the Equity Shares;
(8)
the purchaser understands that such rights or Equity Shares (to the extent they are in certificated form),
unless the Company determine otherwise in accordance with applicable law, will bear a legend
substantially to the following effect:
THE EQUITY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH
ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, AND IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
(9)
the purchaser agrees, upon a proposed transfer of the rights or the Equity Shares, to notify any purchaser
of such rights or Equity Shares or the executing broker, as applicable, of any transfer restrictions that are
applicable to the rights or Equity Shares being sold;
309
(10)
the Company will not recognize any offer, sale, pledge or other transfer of such rights or Equity Shares
made other than in compliance with the above-stated restrictions; and
(11)
the purchaser acknowledges that the Company, the Lead Managers, their respective affiliates and others
will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements
and agrees that, if any of such acknowledgements, representations and agreements deemed to have been
made by virtue of its purchase of such rights or Equity Shares are no longer accurate, it will promptly
notify the Company, and if it is acquiring any of such rights or Equity Shares as a fiduciary or agent for
one or more accounts, it represents that it has sole investment discretion with respect to each such account
and that it has full power to make the foregoing acknowledgements, representations and agreements on
behalf of such account.
Each person in a Member State of the EEA which has implemented the Prospectus Directive (each, a “Relevant
Member State) who receives any communication in respect of, or who acquires any rights or Equity Shares
under, the offers contemplated in this Letter of Offer will be deemed to have represented, warranted and agreed
to and with each Lead Manager and the Company that in the case of any rights or Equity Shares acquired by it
as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:
(i)
(ii)
the rights or Equity Shares acquired by it in the placement have not been acquired on behalf of, nor have
they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than
qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the
prior consent of the Lead Managers has been given to the offer or resale; or
where rights or Equity Shares have been acquired by it on behalf of persons in any Relevant Member
State other than qualified investors, the offer of those rights or Equity Shares to it is not treated under the
Prospectus Directive as having been made to such persons.
For the purposes of this provision, the expression an “offer of Equity Shares to the public” in relation to any of
the rights or Equity Shares in any Relevant Member States means the communication in any form and by any
means of sufficient information on the terms of the offer and the rights or Equity Shares to be offered so as to
enable an investor to decide to purchase or subscribe for the rights or Equity Shares, as the same may be varied
in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member
State.
Listing
The existing Equity Shares are listed on BSE and NSE. We have made applications to BSE and NSE for
obtaining in-principal approval in respect of the Equity Shares being offered in terms of the Letter of Offer. We
have received the in-principal approvals from BSE and NSE vide their letters dated July 13, 2012 and July 26,
2012, respectively. We will apply to BSE and NSE for obtaining final listing and trading approval for the Equity
Shares to be issued pursuant to this Issue. If the listing and trading approval for the Equity Shares to be issued
pursuant to this Issue is not granted by any of the Stock Exchanges, we shall forthwith repay, without interest,
all monies received from applicants in pursuance of the Letter of Offer.
We will issue and dispatch Allotment advice/ share certificates/ demat credit and/ or letters of regret along with
refund order or credit the Allotted Equity Shares to the respective beneficiary accounts, if any, within a period
of 15 days from the Issue Closing Date.
If such allotment is not made or money is not repaid within eight days from the day we become liable to repay
it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is
earlier) we and every Director of the Company who is an officer in default shall, on and from expiry of eight
days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the
Companies Act.
Consents
Consents in writing of the Directors, the Statutory Auditor, the auditors certifying the special tax benefits
available to us, the Lead Managers, the Legal Counsels, the Registrar to the Issue, the Monitoring Agency and
the Bankers to the Company and Bankers to the Issue to act in their respective capacities have been obtained and
such consents have not been withdrawn up to the date of this Letter of Offer.
310
Deloitte Haskins & Sells, our Auditors, have given their written consent for the inclusion of their report in the
form and content appearing in this Letter of Offer and such consent and report have not been withdrawn up to
the date of this Letter of Offer. Deloitte Haskins & Sells, auditors for the erstwhile Television Eighteen, have
given their written consent for the inclusion of their report on audited standalone financial statements of
erstwhile Television Eighteen for Fiscals 2011, prior to the merger of Television Eighteen with us, in the form
and content appearing in this Letter of Offer and such consent and report have not been withdrawn up to the date
of this Letter of Offer.
M/s A.K. Sabat & Co., Chartered Accountants, have given their written consent for the inclusion of their report
on summary financial information of Equator for Fiscals 2009, 2010, 2011 and 2012 and report on financial
statements of Prism, Panorama and Eenadu for Fiscals 2008, 2009, 2010, 2011 and 2012.
Issue Related Expenses
The Issue related expenses include, inter alia, Lead Managers’ fee, printing and distribution expenses,
advertisement and marketing expenses and Registrar, legal and depository fees and other expenses and are
estimated at ` 741.56 million (approximately 2.75 % of the total Issue size) and will be met out of the proceeds
of the Issue.
Particulars
Fees payable to intermediaries including Lead
Managers and Registrar to the Issue
Fees payable to Monitoring Agency
Others (printing and distribution, stationery, postage,
professional, advisory expenses, auditors fees, SEBI
fees, commission, brokerage, marketing expenses,
listing fees, depository fees, out of pocket
reimbursements, etc.)
Total estimated Issue expenses
Amount
(` in million)
30.66
As percentage
of total expenses
4.13
As a percentage
of Issue size
0.11
2.86
708.04
0.39
95.48
0.01
2.62
741.56
100.00
2.75
Investor Grievances and Redressal System
We have adequate arrangements for the redressal of investor complaints in compliance with the corporate
governance requirements under the Listing Agreements. Additionally, we have been registered with the SEBI
Complaints Redress System (SCORES) as required by the SEBI Circular no. CIR/ OIAE/ 2/ 2011 dated June 3,
2011. The share transfer and dematerialization for us is being handled by Link Intime India Private Limited,
Registrar and Share Transfer Agent, which is also the Registrar to the Issue. Letters are filed category wise after
being attended to. All investor grievances received by us have been handled by the Registrar and Share Transfer
agent in consultation with the compliance officer.
Our Board has constituted the Shareholders/ Investors’ Grievance Committee vide resolution dated September
29, 2006. This committee currently comprises Mr. Manoj Mohanka, Mr. Raghav Bahl and Mr. Sanjay Ray
Chaudhuri. Our Shareholders’/ Investors’ Grievance Committee oversees the reports received from the Registrar
and Share Transfer agent and facilitates the prompt and effective resolution of complaints from our shareholders
and investors. Its broad terms of reference include:

Redressal of Equity Shareholder and Investor complaints including, but not limited to non-receipt of Share
Certificates, transfer of Equity Shares and issue of duplicate Share Certificates, non-receipt of balance
sheet, non-receipt of declared dividends, etc.; and
Monitoring transfers, transmissions, dematerialization, rematerialisation, splitting and consolidation of
shares issued by the Company.
Time normally taken for disposal of various types of investor complaints: Not more than one month.
Status of outstanding investor complaints
As on July 31, 2012, there were no outstanding investor complaints.
311
Investor Grievances arising out of the Issue
The investor grievances arising out of the Issue will be handled by Link Intime India Private Limited, the
Registrar to the Issue. The Registrar will have a separate team of personnel handling post-Issue correspondences
only.
The agreement between us and the Registrar provides for retention of records with the Registrar for a period of
at least one year from the last date of dispatch of Allotment Advice/ share certificate/ demat credit/ refund order
to enable the Registrar to redress grievances of Investors.
All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA
Applicants giving full details such as folio no. / demat account no., name and address, contact telephone/ cell
numbers, email id of the first applicant, number of Equity Shares applied for, CAF serial number, amount paid
on application and the name of the bank/ SCSB and the branch where the CAF was deposited, alongwith a
photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be
furnished.
The Company is registered with the SEBI Complaints Redress System (“SCORES”) as required by the SEBI
Circular no. CIR/ OIAE/ 2/ 2011 dated June 3, 2011. Consequently, investor grievances are tracked online by
us.
The average time taken by the Registrar for attending to routine grievances will be within 30 days from the date
of receipt of complaints. In case of non-routine grievances where verification at other agencies is involved, it
would be the endeavour of the Registrar to attend to them as expeditiously as possible. We undertake to resolve
the Investor grievances in a time bound manner.
Registrar to the Issue
C-13, Pannalal Silk Mills Compound,
LBS Marg, Bhandup (West),
Mumbai – 400 078,
Maharashtra, India.
Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
Toll Free No: 1-800-220-878
Investor Greivance E-mail: [email protected]
Investors may contact the Compliance Officer in case of any pre-Issue/ post -Issue related problems such
as non-receipt of Allotment advice/ share certificates/ demat credit/ refund orders etc. The contact details
of the Compliance Officer are as follows:
Hitesh Kumar Jain
Company Secretary and Compliance Officer
Express Trade Towers
Plot No. 15-16, Sector 16A
Noida – 201 301
Tel: +91 120 434 1818
Fax: +91 120 432 4110
312
Minimum Subscription
If we do not receive the minimum subscription of 90% of the Issue, we shall refund the entire subscription
amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription
amount by more than eight days after we become liable to pay the subscription amount (i.e.15 days after the
Issue Closing Date), we and every Director of the Company who is an officer in default shall be jointly and
severally liable to pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section
73 of the Companies Act.
313
SECTION VIII – OFFERING INFORMATION
TERMS OF THE ISSUE
The Equity Shares proposed to be issued are subject to the terms and conditions contained in the Letter of Offer,
the Abridged Letter of Offer, including the CAF, the Memorandum of Association and Articles of Association,
the provisions of the Companies Act, the terms and conditions as may be incorporated in the FEMA, applicable
guidelines and regulations issued by SEBI and RBI, or other statutory authorities and bodies from time to time,
the Listing Agreements entered into by us, terms and conditions as stipulated in the allotment advice or security
certificate and rules as may be applicable and introduced from time to time. All rights/ obligations of Equity
Shareholders in relation to application and refunds pertaining to this Issue shall apply to the Renouncee(s) as
well.
Please note that, in terms of SEBI circular CIR/CFD/DIL/1/ 2011 dated April 29, 2011, QIB applicants, NonInstitutional Investors and other applicants whose application amount exceeds ` 200,000 can participate in the
Issue only through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or
(iii) investors whose application amount is more than ` 200,000, can participate in the Issue either through the
ASBA process or the non ASBA process. ASBA Investors should note that the ASBA process involves
application procedures that may be different from the procedure applicable to non ASBA process. ASBA
Investors should carefully read the provisions applicable to such applications before making their application
through the ASBA process. For details, please refer to “Procedure for Application through the Applications
Supported by Blocked Amount (“ASBA”) Process” on page 323.
Authority for the Issue
The Issue of Equity Shares to the Equity Shareholders of our Company as on the Record Date is being made in
accordance with the resolution passed by our Board of Directors under Section 81(1), 81(1A) and other
applicable provisions of the Companies Act, at its meeting held on January 3, 2012 and vide Equity
Shareholders resolution passed by postal ballot on February 24, 2012.
Basis for the Issue
The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose
names appear as beneficial owners as per the list to be furnished by the Depositories for the purpose of this
Rights Issue in respect of the Equity Shares held in the electronic form and on the Register of Members in
respect of the Equity Shares held in physical form at the close of business hours on the Record Date, fixed in
consultation with the Designated Stock Exchange.
Rights Entitlement
As your name appears as a beneficial owner in respect of the Equity Shares held in the electronic form or
appears in the register of members as an Equity Shareholder as on the Record Date, i.e., September 17, 2012,
you are entitled to the number of Equity Shares as set out in Part A of the CAFs.
The distribution of the Letter of Offer and the issue of the Equity Shares on a rights basis to persons in
certain jurisdictions outside India may be restricted by legal requirements prevailing in those
jurisdictions. We are making the issue of the Equity Shares on a rights basis to the Equity Shareholders
and the Letter of Offer, Abridged Letter of Offer and the CAFs will be dispatched only to those Equity
Shareholders who have a registered address in India or who have provided an Indian address. Any
person who acquires Rights Entitlements or the Equity Shares will be deemed to have declared,
warranted and agreed, by accepting the delivery of the Letter of Offer, that it is not and that at the time
of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States and in
other restricted jurisdictions.
PRINCIPAL TERMS OF THE EQUITY SHARES ISSUED UNDER THIS ISSUE
Face Value
Each Equity Share will have the face value of ` 2.
314
Issue Price
Each Equity Share shall be offered at an Issue Price of ` 20 for cash at a premium of ` 18 per Equity Share. The
Issue Price has been arrived at by us in consultation with the Lead Managers.
Rights Entitlement Ratio
The Equity Shares are being offered on a rights basis to the Equity Shareholders in the ratio of 41 Equity Shares
for every 11 Equity Shares held on the Record Date.
Terms of Payment
The full amount of ` 20 per Equity Share is payable on application.
Fractional Entitlements
The Equity Shares are being offered on a rights basis to the existing Equity Shareholders in the ratio of 41
Equity Shares for every 11 Equity Shares held as on the Record Date. For Equity Shares being offered on a
rights basis under this Issue, if the shareholding of any of the Equity Shareholders is less than 11 Equity Shares
or is not in a multiple of 11 Equity Shares, the fractional entitlement of such Equity Shareholders shall be
ignored for computation of the Rights Entitlement. However, Equity Shareholders whose fractional entitlements
are being ignored will be given preference in the allotment of one additional Equity Share each, if such Equity
Shareholders have applied for additional Equity Shares over and above their Rights Entitlement.
For example, if an Equity Shareholder holds 10 Equity Shares, he will be entitled to 37 Equity Shares on a rights
basis. He will also be given a preferential consideration for the Allotment of one additional Equity Share if he
has applied for the same.
Ranking
The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and
Articles of Association. The Equity Shares issued under this Issue shall rank pari passu, in all respects including
dividend, with our existing Equity Shares.
Mode of payment of dividend
In the event of declaration of dividend, we shall pay dividend to Equity Shareholders as per the provisions of the
Companies Act and the provisions of our Articles of Association.
Listing and trading of Equity Shares proposed to be issued
Our existing Equity Shares are currently listed and traded on BSE (Scrip Code: 532800 under the ISIN INE886H01027) and NSE (Symbol: TV18BRDCST under the ISIN - INE886H01027).
The listing and trading of the Equity Shares shall be based on the current regulatory framework applicable
thereto. Accordingly, any change in the regulatory regime would affect the schedule. Upon Allotment the Equity
Shares shall be traded on Stock Exchange in demat segment only.
We have made an application for “in-principle” approval for listing of the Equity Shares to BSE and NSE and
have received such approval from BSE and NSE pursuant to the letter numbers DCS/PREF/PR/IPRT/278/2012-2013 and NSE/LIST/176260-F, dated July 13, 2012 and July 26, 2012, respectively. We will
apply to BSE and NSE for final approval for the listing and trading of the Equity Shares. All steps for the
completion of the necessary formalities for listing and commencement of trading of the Equity Shares to be
allotted pursuant to the Issue shall be taken as soon as practicable from the Issue Closing Date. The fully paid up
Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on BSE and NSE
under the existing ISIN for fully paid up Equity Shares.
Rights of the Equity Shareholder
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Subject to applicable laws, the Equity Shareholders shall have the following rights:

Right to receive dividend, if declared;
Right to attend general meetings and exercise voting powers, unless prohibited by law;
Right to vote in person or by proxy;
Right to receive offers for rights shares and be allotted bonus shares, if announced;
Right to receive surplus on liquidation;
Right to free transferability of Equity Shares; and
Such other rights as may be available to a shareholder of a listed public company under the Companies
Act and Memorandum of Association and Articles of Association.
General Terms of the Issue
Market Lot
The market lot for the Equity Shares in dematerialised mode is one Equity Share. In case an Equity Shareholder
holds Equity Shares in physical form, we would issue to the allottees one certificate for the Equity Shares
allotted to each folio (“Consolidated Certificate”). In respect of Consolidated Certificates, we will upon receipt
of a request from the respective Equity Shareholders, split such Consolidated Certificates into smaller
denominations within one week’s time from the receipt of the request in respect thereof. We shall not charge a
fee for splitting any of the Consolidated Certificates.
Joint Holders
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the
same as joint tenants with the benefit of survivorship subject to the provisions contained in the Articles of
Association.
Nomination
In terms of Section 109A of the Companies Act, nomination facility is available in respect of the Equity Shares.
An Investor can nominate any person by filling the relevant details in the CAF in the space provided for this
purpose.
In case of Equity Shareholders who are individuals, a sole Equity Shareholder or the first named Equity
Shareholder, along with other joint Equity Shareholders, if any, may nominate any person(s) who, in the event
of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity
Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original
Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the
registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make
a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the
event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon
the sale of the Equity Shares by the person nominating. A transferee will be entitled to make a fresh nomination
in the manner prescribed. Fresh nominations can be made only in the prescribed form available on request at our
Registered Office or such other person at such addresses as may be notified by us. The Investor can make the
nomination by filling in the relevant portion of the CAF. In terms of Section 109B of the Companies Act, any
person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, shall upon
the production of such evidence as may be required by the Board, elect either:

to register himself or herself as the holder of the Equity Shares; or
to make such transfer of the Equity Shares, as the deceased holder could have made.
Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself
or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days,
the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the
Equity Shares, until the requirements of the notice have been complied with.
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Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already
registered the nomination with us, no further nomination needs to be made for Equity Shares that may be
allotted in this Issue under the same folio.
In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate
nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective
Depositary Participant (“DP”) of the investor would prevail. Any investor desirous of changing the
existing nomination is requested to inform their respective DP.
Notices
All notices to the Equity Shareholder(s) required to be given by us shall be published in one English national
daily with wide circulation, one Hindi national daily with wide circulation and/ or will be sent by ordinary post/
registered post/ speed post to the registered address of the Equity Shareholders in India or the Indian address
provided by the Equity Shareholders, from time to time.
Subscription by the Promoter and Promoter Group
Network18, RRB Investments Private Limited, Mr. Raghav Bahl, Ms. Ritu Kapur, Ms. Vandana Malik, Ms.
Subhash Bahl, Mr. Pramod Kapur, Ms. Manju Kapur, and the Subscribing Companies, part of our Promoter and
Promoter Group, have confirmed vide their letters dated February 29, 2012 that they intend to subscribe to the
full extent of their Rights Entitlement in the Issue, in compliance with regulation 10 (4) of Takeover
Regulations.
The Subscribing Companies have further confirmed vide their letters dated February 29, 2012 that, they intend
to subscribe for (i) additional Equity Shares and (ii) Equity Shares, if any, which remain unsubscribed. Such
subscription to additional Equity Shares and the unsubscribed portion, if any, to be made by the Subscribing
Companies, shall be in accordance with regulation 10 (4) of Takeover Regulations. Further, such subscription
shall not result in breach of minimum public shareholding requirement stipulated in the Listing Agreements.
For details, please refer to the chapter “Terms of the Issue - Basis of Allotment” on page 330.
Procedure for Application
The CAF for Equity Shares offered as a part of the Issue would be printed for all Equity Shareholders. In case
the original CAFs are not received by the Equity Shareholders or is misplaced by the Equity Shareholders, the
Equity Shareholders may request the Registrar to the Issue, for issue of a duplicate CAF, by furnishing the
registered folio number, DP ID Number, Client ID Number and their full name and address. In case the
signature of the Equity Shareholder(s) does not match with the specimen registered with us, the application is
liable to be rejected.
Please note that neither the Company nor the Registrar shall be responsible for delay in the receipt of the CAF/
duplicate CAF attributable to postal delays or if the CAF/ duplicate CAF are misplaced in the transit.
Please note that QIB applicants, Non-Institutional Investors and other applicants whose application
amount exceeds ` 200,000 can participate in the Issue only through the ASBA process. The Investors who
are not (i) QIBs, (ii) Non-Institutional Investors or (iii) investors whose application amount is more than `
200,000, can participate in the Issue either through the ASBA process or the non ASBA process.
Please also note that by virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI,
Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI
has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to
Overseas Corporate Bodies (OCBs) Regulations, 2003. Any Equity Shareholder being an OCB is required
to obtain prior approval from RBI for applying to this Issue.
The CAF consists of four parts:
Part A: Form for accepting the Equity Shares offered as a part of this Issue, in full or in part, and for applying
for additional Equity Shares;
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Part B: Form for renunciation of Equity Shares;
Part C: Form for application for renunciation of Equity Shares by Renouncee(s);
Part D: Form for request for split Application forms.
Option available to the Equity Shareholders
The CAFs will clearly indicate the number of Equity Shares that the Shareholder is entitled to.
If the Equity Shareholder applies for an investment in the Equity Shares offered as a part of this Issue, then he
can:

Apply for his Rights Entitlement of Equity Shares in full;
Apply for his Rights Entitlement of Equity Shares in part;
Apply for his Rights Entitlement of Equity Shares in part and renounce the other part of the Equity
Shares;
Apply for his Rights Entitlement in full and apply for additional Equity Shares;
Renounce his Rights Entitlement in full.
Acceptance of the Issue
You may accept the offer to participate and apply for the Equity Shares offered, either in full or in part, by
filling Part A of the CAFs and submit the same along with the application money payable to the collection
branches of the Bankers to the Issue as mentioned on the reverse of the CAFs before the close of the banking
hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors
in this regard. Investors at centres not covered by the branches of Bankers to the Issue can send their CAFs
together with the cheque drawn at par on a local bank at Mumbai/ demand draft payable at Mumbai to the
Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue
are liable to be rejected. For further details on the mode of payment, please refer to the headings “Mode of
Payment for Resident Equity Shareholders/ Investors” and “Mode of Payment for Non-Resident Equity
Shareholders/ Investors” on page 338.
Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above your Rights Entitlement, provided that
you are eligible to apply under applicable law and have applied for all the Equity Shares offered without
renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares
shall be considered and allotment shall be made at the sole discretion of the Board, subject to sectoral caps and
in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under “Terms of
the Issue - Basis of Allotment” on page 330.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for
additional Equity Shares in Part A of the CAF. The Renouncees applying for all the Equity Shares renounced in
their favour may also apply for additional Equity Shares.
Where the number of additional Equity Shares applied for exceeds the number available for Allotment, the
Allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
Renunciation
This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in
part in favour of any other person or persons. Your attention is drawn to the fact that we shall not Allot and/ or
register and Equity Shares in favour of more than three persons (including joint holders), partnership firm(s) or
their nominee(s), minors, HUF, any trust or society (unless the same is registered under the Societies
Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts
and is authorized under its constitution or bye-laws to hold equity shares, as the case may be). Additionally,
existing Equity Shareholders may not renounce in favour of persons or entities in the United States, or to, or for
the account or benefit of a “U.S. Person” (as defined in Regulation S), or who would otherwise be prohibited
from being offered or subscribing for Equity Shares or Rights Entitlement under applicable securities laws.
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Pursuant to letters dated May 25, 2012 and August 24, 2012, the RBI has allowed the renunciation of Rights
Entitlements by a (i) non resident Equity Shareholder to a resident investor, (ii) a non resident Equity
Shareholder to a non resident investor and (iii) a resident Equity Shareholder to a non resident investor, on the
floor of the Stock Exchanges. However, renunciation of Rights Entitlements by way of private arrangement by
(i) non resident Equity Shareholder to a resident investor, (ii) a non resident Equity Shareholder to a non
resident investor and (iii) a resident Equity Shareholder to a non resident investor, would require prior approval
of the RBI.
Renunciation by OCBs
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies
(“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the
Foreign Exchange Management (withdrawal of General Permission to Overseas Corporate Bodies (OCBs))
Regulations, 2003. Accordingly, the existing Equity Shareholders who do not wish to subscribe to the Equity
Shares being offered but wish to renounce the same in favour of Renouncee shall not renounce the same
(whether for consideration or otherwise) in favour of OCB(s).
The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that
OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to
undertake fresh investments as incorporated non-resident entities in terms of Regulation 5(1) of RBI
Notification No.20/ 2000-RB dated May 3, 2000 under FDI Scheme with the prior approval of Government if
the investment is through Government Route and with the prior approval of RBI if the investment is through
Automatic Route on case by case basis. Shareholders renouncing their rights in favour of OCBs may do so
provided such Renouncee obtains a prior approval from the RBI. On submission of such approval to us at our
Registered Office, the OCB shall receive the Abridged Letter of Offer and the CAF.
Part ‘A’ of the CAF must not be used by any person(s) other than those in whose favour this offer has been
made. If used, this will render the application invalid. Submission of the CAF to the Banker to the Issue at its
collecting branches specified on the reverse of the CAF with the form of renunciation (Part ‘B’ of the CAF) duly
filled in shall be conclusive evidence for us of the person(s) applying for Equity Shares in Part ‘C’ of the CAF to
receive Allotment of such Equity Shares. Part ‘A’ of the CAF must not be used by the Renouncee(s) as this will
render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour
of any other person.
Procedure for renunciation
To renounce all the Equity Shares offered to an Equity Shareholder in favour of one Renouncee
If you wish to renounce the offer indicated in Part ‘A’, in whole, please complete Part ‘B’ of the CAF. In case of
joint holding, all joint holders must sign Part ‘B’ of the CAF. The person in whose favour renunciation has been
made should complete and sign Part ‘C’ of the CAF. In case of joint Renouncees, all joint Renouncees must sign
Part ‘C’ of the CAF.
To renounce in part/ or renounce the whole to more than one person(s)
If you wish to either accept this offer in part and renounce the balance or renounce the entire offer under this
Issue in favour of two or more Renouncees, the CAF must be first split into requisite number of SAFs. Please
indicate your requirement of SAFs in the space provided for this purpose in Part ‘D’ of the CAF and return the
entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date
of receiving requests for SAFs. On receipt of the required number of SAFs from the Registrar, the procedure as
mentioned in paragraph above shall have to be followed.
In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not match with
the specimen registered with us/ Depositories, the application is liable to be rejected.
Renouncee(s)
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The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part ‘C’ of the CAF and
submit the entire CAF to the Bankers to the Issue or to any of the collection branches of the Bankers to the Issue
as mentioned in the reverse of the CAF on or before the Issue Closing Date along with the application money in
full. The Renouncee cannot further renounce.
Change and/ or introduction of additional holders
If you wish to apply for Equity Shares jointly with any other person(s), not more than three (including you), who
is/ are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for
renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount
to renunciation and the procedure, as stated above shall have to be followed.
However, this right of renunciation is subject to the express condition that the Board of Directors shall be
entitled in its absolute discretion to reject the request for Allotment from the Renouncee(s) without assigning
any reason thereof.
Instructions for Options
The summary of options available to the Equity Shareholder is presented below. You may exercise any of the
following options with regard to the Equity Shares offered, using the CAF:
Option Available
1. Accept whole or part of your Rights
Entitlement without renouncing the
balance.
2. Accept your Rights Entitlement in full
and apply for additional Equity Shares
3. Accept a part of your Rights Entitlement
and renounce the balance to one or more
Renouncee(s)
Action Required
Fill in and sign Part A (All joint holders must sign)
Fill in and sign Part A including Block III relating to the
acceptance of entitlement and Block IV relating to additional
Equity Shares (All joint holders must sign)
Fill in and sign Part D (all joint holders must sign) requesting
for SAFs. Send the CAF to the Registrar to the Issue so as to
reach them on or before the last date for receiving requests for
SAFs. Splitting will be permitted only once.
OR
Renounce your Rights Entitlement of
all the Equity Shares offered to you to
more than one Renouncee
On receipt of the SAF take action as indicated below.
For the Equity Shares you wish to accept, if any, fill in and
sign Part A.
For the Equity Shares you wish to renounce, fill in and sign
Part B indicating the number of Equity Shares renounced and
hand it over to the Renouncee. Each of the Renouncee should
fill in and sign Part C for the Equity Shares accepted by them.
4. Renounce your Rights Entitlement in full
to one person (Joint Renouncees are
considered as one).
5. Introduce a joint holder or change the
sequence of joint holders
In case of one Renouncee the aforesaid actions should be
taken with respect to CAF
Fill in and sign Part B (all joint holders must sign) indicating
the number of Equity Shares renounced and hand it over to the
Renouncee. The Renouncee must fill in and sign Part C (All
joint Renouncees must sign)
This will be treated as a renunciation. Fill in and sign Part B
and the Renouncee must fill in and sign Part C.
Please note that:

Part ‘A’ of the CAF must not be used by any person(s) other than the Equity Shareholder to whom the
Letter of Offer has been addressed. If used, this will render the application invalid.
Request for Split Application Forms/ SAF should be made for a minimum of one Equity Share or, in either
case, in multiples thereof, and one SAF for the balance Equity Shares, if any.
Request by the Equity Shareholder for the SAFs should reach the Registrar on or before October 3, 2012.
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Only the Equity Shareholder to whom the Letter of Offer has been addressed shall be entitled to renounce
and to apply for SAFs. Forms once split cannot be split further.
SAFs will be sent to the Equity Shareholder(s) by post at the applicant’s risk.
Equity Shareholders may not renounce in favour of persons or entities in the United States or to or for the
account or benefit of a “U.S. Person” (as defined in Regulation S), or who would otherwise be prohibited
from being offered or subscribing for Equity Shares or Rights Entitlement under applicable securities laws.
While applying for or renouncing their Rights Entitlement, joint Equity Shareholders must sign the CAF in
the same order as per specimen signatures recorded with us or the Depositories.
Non-resident Equity Shareholders: Application(s) received from Non-Resident/ NRIs, or persons of Indian
origin residing abroad for allotment of Equity Shares alloted as a part of this Issue shall, inter alia, be
subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund
of application money, allotment of equity shares, subsequent issue and allotment of equity shares, interest,
export of share certificates, etc. In case a Non-Resident or NRI Eligible Equity Shareholder has specific
approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with
the CAF.

Availability of duplicate CAF
In case the original CAF is not received, or is misplaced by the Equity Shares, the Registrar to the Issue will
issue a duplicate CAF on the request of the Equity Shareholder who should furnish the registered folio number/
DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that the
request for duplicate CAF should reach the Registrar to the Issue atleast 7 days prior to the Issue Closing Date.
Please note that those who are making the application in the duplicate form should not utilize the original CAF
for any purpose including renunciation, even if it is received/ found subsequently. If the Investor violates such
requirements, he/ she shall face the risk of rejection of both the applications.
Neither the Registrar nor the Lead Managers or our Company, shall be responsible for postal delays or loss of
duplicate CAFs in transit, if any.
Please also note that Equity Shareholder has an option to print the Duplicate CAF from the website of the
Registrar to the Issue (Web site: www.linkintime.co.in) by providing his/ her folio. no. /DP ID/ Client ID to
enable the Equity Shareholder to apply for the Issue.
Application on Plain Paper
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate
CAF may make an application to subscribe to the Issue on plain paper, along with cheque/ demand draft (after
deducting banking and postal charges) payable at Mumbai which should be drawn in favour of “TV18
Broadcast Limited – Rights Issue - R” in case of resident shareholders and non-resident shareholders applying
on non-repatriable basis and in favour of “TV18 Broadcast Limited – Rights Issue – NR” in case of nonresident shareholders applying on repatriable basis and send the same by registered post directly to the Registrar
to the Issue so as to reach Registrar to the Issue on or before the Issue Closing Date. The envelope should be
superscribed “TV18 Broadcast Limited – Rights Issue - R” in case of resident shareholders and Non-resident
shareholders applying on non-repatriable basis, and “TV18 Broadcast Limited – Rights Issue – NR” in case of
non-resident shareholders applying on repatriable basis.
The application on plain paper, duly signed by the applicant(s) including joint holders, in the same order as per
specimen recorded with us or the Depositories, must reach the office of the Registrar to the Issue before the
Issue Closing Date and should contain the following particulars:

Name of Issuer, being TV18 Broadcast Limited;
Name and address of the Equity Shareholder including joint holders;
Registered Folio Number/ DP and Client ID no.;
Number of Equity Shares held as on Record Date;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total amount paid at the rate of ` 20 per Equity Share;
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Particulars of cheque/ demand/ draft;
Savings/ Current Account Number and name and address of the bank where the Equity Shareholder will
be depositing the refund order. In case of Equity Shares allotted in demat form, the bank account details
will be obtained from the information available with the Depositories;
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, PAN number of the Investor and for each Investor in case of joint
names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue;
Share certificate numbers and distinctive numbers of Equity Shares, if held in physical form;
Allotment option preferred - physical or demat form, if held in physical form;
If the payment is made by a draft purchased from NRE/ FCNR/ NRO account, as the case may be, an
account debit certificate from the bank issuing the draft confirming that the draft has been issued by
debiting the NRE/ FCNR/ NRO account;
Signature of the Equity Shareholders to appear in the same sequence and order as they appear in the our
records; and
Additionally, all such applicants are deemed to have accepted the following:
“I/ We understand that neither the Rights Entitlement nor the Equity Shares have been, and will be,
registered under the United States Securities Act of 1933 (the “US Securities Act”) or any United States
state securities laws, and may not be offered, sold, resold or otherwise transferred within the United
States or to the territories or possessions thereof (the “United States”) or to, or for the account or benefit
of a “U.S. Person” as defined in Regulation S of the US Securities Act (“Regulation S”). I/ we
understand the Equity Shares referred to in this application are being offered in India but not in the
United States. I/ we understand the offering to which this application relates is not, and under no
circumstances is to be construed as, an offering of any Equity Shares or Rights Entitlement for sale in the
United States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights
Entitlement in the United States. Accordingly, I/ we understand this application should not be forwarded
to or transmitted in or to the United States at any time. I/ we understand that neither us, nor the
Registrar, the Lead Managers or any other person acting on behalf of us will accept subscriptions from
any person, or the agent of any person, who appears to be, or who we, the Registrar, the Lead Managers
or any other person acting on behalf of us have reason to believe is, a resident of the United States or a
“U.S. Person” (as defined in Regulation S) or is ineligible to participate in the Issue under the securities
laws of their jurisdiction.
I/ We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in
any jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person
to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in
compliance with any applicable laws or regulations. We satisfy, and each account for which we are
acting satisfies, all suitability standards for investors in investments of the type subscribed for herein
imposed by the jurisdiction of our residence.
I/ We understand and agree that the Rights Entitlement and Equity Shares may not be reoffered, resold,
pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or
otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements
of the US Securities Act.
I/ We (i) am/ are, and the person, if any, for whose account I/ we am/ are acquiring such Rights
Entitlement and/ or the Equity Shares is/ are, outside the United States, (ii) am/ are not a “U.S. Person”
as defined in Regulation S, and (iii) is/ are acquiring the Rights Entitlement and/ or the Equity Shares in
an offshore transaction meeting the requirements of Regulation S.
I/ We acknowledge that we, the Lead Managers, their affiliates and others will rely upon the truth and
accuracy of the foregoing representations and agreements.”
Please note that those who are making the application otherwise than on original CAF shall not be entitled to
renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is
received subsequently. If the Investor violates such requirements, he/ she shall face the risk of rejection of both
the applications. We shall refund such application amount to the Investor without any interest thereon.
Last date for Application
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The last date for submission of the duly filled in CAF is October 15, 2012. The Board of Directors may extend
the said date for such period as it may determine from time to time, subject to the Issue Period not exceeding 30
days.
If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on
or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board or
any authorised committee thereof, the invitation to offer contained in the Letter of Offer shall be deemed to have
been declined and the Board or any authorised committee thereof shall be at liberty to dispose of the Equity
Shares hereby offered, as provided under the chapter “Terms of the Issue – Basis of Allotment” on page 330.
PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED
AMOUNT (“ASBA”) PROCESS
This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the
ASBA Process. The Lead Managers and we are not liable for any amendments or modifications or
changes in applicable laws or regulations, which may occur after the date of the Letter of Offer. Investors
who are eligible to apply under the ASBA Process are advised to make their independent investigations
and to ensure that the CAF is correctly filled up.
The Lead Managers, we, our directors, affiliates, associates and their respective directors and officers and
the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors, omissions and
commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by SCSBs,
applications accepted but not uploaded by SCSBs or applications accepted and uploaded without
blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the
amount payable on application has been blocked in the relevant ASBA Account.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing
number CIR/CFD/DIL/1/ 2011 dated April 29, 2011, all applicants who are QIBs, Non-Institutional
Investors or other applicants whose application amount exceeds ` 200,000 can participate in the Issue
only through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or
(iii) investors whose application amount is more than ` 200,000, can participate in the Issue either
through the ASBA process or the non ASBA process.
The list of banks which have been notified by SEBI to act as SCSBs for the ASBA Process is provided on
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1345612849756.html. For details on Designated Branches of
SCSBs collecting the CAF, please refer the above mentioned SEBI link.
Equity Shareholders who are eligible to apply under the ASBA Process
The option of applying for Equity Shares through the ASBA Process is available only to the Equity
Shareholders on the Record Date.
To qualify as ASBA Applicants, eligible Equity Shareholders:

are required to hold Equity Shares in dematerialized form as on the Record Date and apply for (i) their
Rights Entitlement or (ii) their Rights Entitlement and Equity Shares in addition to their Rights
Entitlement in dematerialized form;
should not have renounced their Right Entitlement in full or in part;
should not have split the CAF;
should not be Renouncees;
should apply through blocking of funds in bank accounts maintained with SCSBs; and
are eligible under applicable securities laws to subscribe for the Rights Entitlement and the Equity Shares
in the Issue.
CAF
The Registrar will dispatch the CAF to all Equity Shareholders as per their Rights Entitlement on the Record
Date for the Issue. Those Equity Shareholders who must apply or who wish to apply through the ASBA will
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have to select for this ASBA mechanism in Part A of the CAF and provide necessary details.
Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the
ASBA Option in Part A of the CAF. Application in electronic mode will only be available with such SCSBs
who provide such facility. The Equity Shareholder shall submit the CAF to the Designated Branch of the SCSB
for authorising such SCSB to block an amount equivalent to the amount payable on the application in the ASBA
Account.
More than one ASBA Investor may apply using the same ASBA Account, provided that SCSBs will not accept
a total of more than five CAFs with respect to any single ASBA Account.
Acceptance of the Issue
You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the
respective CAFs sent by the Registrar, selecting the ASBA Mechanism in Part A of the CAF and submit the
same to the Designated Branch of the SCSB before the close of the banking hours on or before the Issue Closing
Date or such extended time as may be specified by the Board of Directors or any committee thereof in this
regard.
Mode of payment
The Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on
application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the
amount payable on application, in an ASBA Account.
After verifying that sufficient funds are available in the in an ASBA Account details of which are provided in
the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the
CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs
shall transfer such amount as per the Registrar’s instruction from the ASBA Account. This amount will be
transferred in terms of the SEBI ICDR Regulations, into the separate bank account maintained by us as per the
provisions of section 73(3) of the Companies Act. The balance amount remaining after the finalisation of the
Basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this regard by the
Registrar to the Issue and the Lead Managers to the respective SCSB.
The Equity Shareholders applying under the ASBA Process would be required to give instructions to the
respective SCSBs to block the entire amount payable on their application at the time of the submission of the
CAF.
The SCSB may reject the application at the time of acceptance of CAF if the ASBA Account with the SCSB
details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds
equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the
application by the SCSB, we would have a right to reject the application only on technical grounds.
Options available to the Equity Shareholders applying under the ASBA Process
The summary of options available to the Equity Shareholders is presented below. You may exercise any of the
following options with regard to the Equity Shares, using the respective CAFs received from Registrar:
Option Available
Action Required
1. Accept whole or part of your Rights Fill in and sign Part A of the CAF (All joint holders must sign)
Entitlement without renouncing the balance.
2. Accept your Rights Entitlement in full and Fill in and sign Part A of the CAF including Block III relating
apply for additional Equity Shares
to the acceptance of entitlement and Block IV relating to
additional Equity Shares (All joint holders must sign)
The Equity Shareholders applying under the ASBA Process will need to select the ASBA process option
in the CAF and provide required necessary details. However, in cases where this option is not selected,
but the CAF is tendered to the designated branch of the SCSBs with the relevant details required under
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the ASBA process option and the SCSBs block the requisite amount, then that CAF would be treated as if
the Equity Shareholder has selected to apply through the ASBA process option.
Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing
Investors or other applicants whose application amount exceeds ` 200,000 can participate in the Issue
only through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or
(iii) investors whose application amount is more than ` 200,000, can participate in the Issue either
through the ASBA process or the non ASBA process.
Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are
entitled to, provided that you are eligible to apply for Equity Shares under applicable law and you have applied
for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of
any other person(s). Applications for additional Equity Shares shall be considered and Allotment shall be made
at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner
prescribed under “Terms of the Issue - Basis of Allotment” on page 330.
If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for
additional Equity Shares in Part A of the CAF. The Renouncee applying for all the Equity Shares renounced in
their favour may also apply for additional Equity Shares.
Renunciation under the ASBA Process
Renouncees are not eligible to participate in this Issue through the ASBA Process.
Application on Plain Paper
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate
CAF and who is applying under the ASBA Process may make an application to subscribe to the Issue on plain
paper. The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such SCSB
to block an amount equivalent to the amount payable on the application in the said bank account maintained
with the same SCSB.
The envelope should be superscribed “TV18 Broadcast Limited – Rights Issue- R” or “TV18 Broadcast
Limited – Rights Issue- NR”, as the case may be. The application on plain paper, duly signed by the Investors
including joint holders, in the same order as per the specimen recorded with us or the Depositories, must reach
the Designated Branch of the SCSBs before the Issue Closing Date and should contain the following particulars:

Name of Issuer, being TV18 Broadcast Limited;
Name and address of the Equity Shareholder including joint holders;
Registered Folio Number/ DP and Client ID no.;
Number of Equity Shares held as on Record Date;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total amount to be blocked at the rate of ` 20 per Equity Share;
Details of the ASBA Account such as the account number, name, address and branch of the relevant SCSB;
In case of non-resident investors, details of the NRE/ FCNR/ NRO account such as the account number,
name, address and branch of the SCSB with which the account is maintained;
Except for applications on behalf of the Central or State Government, residents of Sikkim and the officials
appointed by the courts, PAN number of the Investor and for each Investor in case of joint names,
irrespective of the total value of the Equity Shares applied for pursuant to the Issue; and
Signature of the Equity Shareholders to appear in the same sequence and order as they appear in our
records.
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Additionally, all such applicants are deemed to have accepted the following:
“I/ We understand that neither the Rights Entitlement nor the Equity Shares have been, and will be,
registered under the United States Securities Act of 1933 (the “US Securities Act”) or any United States
state securities laws, and may not be offered, sold, resold or otherwise transferred within the United States
or to the territories or possessions thereof (the “United States” or to or for the account or benefit of a
“U.S. Person” as defined in Regulation S of the US Securities Act (“Regulation S”). I/ we understand the
Equity Shares referred to in this application are being offered in India but not in the United States. I/ we
understand the offering to which this application relates is not, and under no circumstances is to be
construed as, an offering of any Equity Shares or Rights Entitlement for sale in the United States, or as a
solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlement in the United
States. Accordingly, I/ we understand this application should not be forwarded to or transmitted in or to the
United States at any time. I/ we understand that none of we, the Registrar, the Lead Managers or any other
person acting on behalf of us will accept subscriptions from any person, or the agent of any person, who
appears to be, or who, we, the Registrar, the Lead Managers or any other person acting on behalf of we
have reason to believe is, a resident of the United States or a “U.S. Person” as defined in Regulation S, or
is ineligible to participate in the Issue under the securities laws of their jurisdiction.
I/ We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any
jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person to
whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in
compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting
satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by
the jurisdiction of our residence.
I/ We understand and agree that the Rights Entitlement and Equity Shares may not be reoffered, resold,
pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or
otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the US Securities Act.
I/ We (i) am/ are, and the person, if any, for whose account I/ we am/ are acquiring such Rights Entitlement
and/ or the Equity Shares is/ are, outside the United States, (ii) am/ are not a “U.S. Person” as defined in
(“Regulation S”), and (iii) is/ are acquiring the Rights Entitlement and/ or the Equity Shares in an offshore
transaction meeting the requirements of Regulation S.
I/ We acknowledge that we, the Lead Managers, their affiliates and others will rely upon the truth and
accuracy of the foregoing representations and agreements.”
Option to receive Equity Shares in Dematerialized Form
EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE
EQUITY SHARES UNDER THE ASBA PROCESS CAN BE ALLOTTED ONLY IN
DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE
EQUITY SHARES ARE HELD BY SUCH ASBA APPLICANT ON THE RECORD DATE.
General instructions for Equity Shareholders applying under the ASBA Process
(a) Please read the instructions printed on the CAF carefully.
(b) Application should be made on the printed CAF only and should be completed in all respects. The CAF
found incomplete with regard to any of the particulars required to be given therein, and/ or which are not
completed in conformity with the terms of the Letter of Offer, Abridged Letter of Offer are liable to be
rejected. The CAF must be filled in English.
(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose ASBA
Account/ bank account details are provided in the CAF and not to the Bankers to the Issue/ Collecting
Banks (assuming that such Collecting Bank is not a SCSB), to us or Registrar or Lead Managers to the
Issue.
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(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention
his/ her PAN number allotted under the IT Act, irrespective of the amount of the application. Except for
applications on behalf of the Central or State Government, the residents of Sikkim and the officials
appointed by the courts, CAFs without PAN will be considered incomplete and are liable to be rejected.
With effect from August 16, 2010, the demat accounts for Investors for which PAN details have not
been verified shall be “suspended for credit” and no allotment and credit of Equity Shares shall be
made into the accounts of such Investors.
(e) All payments will be made by blocking the amount in the ASBA Account. Cash payment or payment by
cheque/ demand draft/ pay order is not acceptable. In case payment is affected in contravention of this, the
application may be deemed invalid and the application money will be refunded and no interest will be paid
thereon.
(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to
the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested
by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders
must sign the CAF as per the specimen signature recorded with us and/ or Depositories.
(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per
the specimen signature(s) recorded with the depository/ us. In case of joint applicants, reference, if any, will
be made in the first applicant’s name and all communication will be addressed to the first applicant.
(h) All communication in connection with application for the Equity Shares, including any change in address of
the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of Allotment in
this Issue quoting the name of the first/ sole applicant Equity Shareholder, folio numbers and CAF number.
(i) Only the person or persons to whom the Equity Shares have been offered shall be eligible to participate
under the ASBA Process.
(j) Only persons outside restricted jurisdictions and who are eligible to subscribe for Rights Entitlement and
Equity Shares under applicable securities laws are eligible to participate.
(k) Only the Equity Shareholders holding shares in demat are eligible to participate through ASBA process.
(l) Equity shareholders who have renounced their entitlement in part/ full are not entitled to apply using ASBA
process.
(m) Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing
Investors and other applicants whose application amount exceeds ` 200,000 can participate in the Issue only
through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or (iii)
investors whose application amount is more than ` 200,000, can participate in the Issue either through the
ASBA process or the non ASBA process.
(n) In case of non – receipt of CAF, application can be made on plain paper mentioning all necessary details as
mentioned under the heading “Application on Plain Paper” on page 321.
Do’s:
(a)
Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.
(b) Ensure that the details about your Depository Participant and beneficiary account are correct and the
beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.
(c)
Ensure that the CAFs are submitted with the Designated Branch of the SCSBs and details of the correct
bank account have been provided in the CAF.
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(d) Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for} X
{Issue Price of Equity Shares, as the case may be}) available in the ASBA Account mentioned in the CAF
before submitting the CAF to the respective Designated Branch of the SCSB.
(e)
Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on
application mentioned in the CAF, in the ASBA Account, of which details are provided in the CAF and
have signed the same.
(f)
Ensure that you receive an acknowledgement from the Designated Branch of the SCSB for your
submission of the CAF in physical form.
(g) Except for CAFs submitted on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, each applicant should mention their PAN allotted under the I T Act.
(h) Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary
account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that
the beneficiary account is also held in same joint names and such names are in the same sequence in which
they appear in the CAF.
(i)
Ensure that the Demographic Details are updated, true and correct, in all respects.
(j)
Ensure that the account holder in whose bank account the funds are to be blocked has signed authorising
such funds to be blocked.
Don’ts:
(a) Do not apply if you are not eligible to participate in the Issue under the securities laws applicable to your
jurisdiction.
(b) Do not apply