Zee Annual Report 2001-2002
Big ideas in entertainment
We started with the small screen.
With big resources behind it.
There’s technology worth millions, thousands of
manyears of experience, a future-proof vision
and a unique viewer insight. As India’s largest
and only fully integrated media and
entertainment company, Zee has proven its
ability as well as its ambition.
It is this spirit that keeps over 225 million
viewers across the globe informed and
entertained. Zee is all set to consolidate this
success on the small screen and target the
media world. With
big ideas.
2001-2002
Report
Annual
ZEE TELEFILMS
LIMITED
contents
Value Statement
Chairman’s Statement
Zee Value Chain
Product Offerings
2
3
6
8
Directors’ Report
Statement pursuant to Section 212
Corporate Governance Report
Shareholders’ Information
20
26
28
33
Programming Highlights
Film Production & Distribution
Consolidation - Acquisitions
Zee Network - Global reach
10
13
14
16
Management Discussion and Analysis
Auditors’ Report
Financials
Cash Flow Statement
38
47
50
71
Our Offices
Board of Directors
17
18
Last Five Years’ Financial Highlights
Performance Ratio and Analysis
Consolidated Financial Statements
73
74
75
value statement
To maintain the Company’s pioneering
status as a multimedia content and
access provider, driven by
viewer response and shareholder confidence.
We will continue to aim for greater
growth in creativity and productivity
by adding value to existing properties,
both for our viewers and advertisers.
Convergence through flow of
group synergies shall make innovation
an inevitable part of the Zee brand.
2
In the year gone by, your company experienced competitive
and challenging times in the domestic markets. However, being
India’s only fully integrated media company provides us a
unique combination of business opportunities. The company
took many new initiatives to overcome economic slack and
difficult competitive environment and recorded turnover growth
of more than 11% while stringent cost control measures
resulted in net profit growth of more than 11.5% on a
consolidated basis.
As I noted earlier, the domestic advertising market did not
post an encouraging trend in the financial year 2002.
Despite the acknowledged strength of our sales and
marketing team, the advertising revenues registered a drop
of approximately 4.5% as compared to the previous year.
Advertising revenues nevertheless contributed around 57%
to the total revenues.
This contraction was counterbalanced however by a strong
growth in pay revenues. We believe that pay revenues, as one
of the revenue streams of your company, would be the future
area of growth. With an objective to strengthen and broadbase the revenue stream, your company decided to turn its
Dear Shareholder,
In the financial year 2002, world politics and economics went
through difficult times. The year witnessed a steep fall in
flagship channels, Zee TV and Zee News, pay from June 2001.
As a result pay revenues from domestic market increased by
more than 230% in FY2002. Total subscription revenues
increased by a very encouraging 50% during the year.
marketing and advertising spends and global advertising
Filmed entertainment has been a large growth segment in
market reportedly declined by 5% after a decade of solid
Indian entertainment industry. In financial year 2002 your
year-on-year growth. Various sectors including TMT witnessed
company, in its new initiative of producing and distributing big
a recession, especially in the post September-11 period.
budget movies, released ‘Gadar – Ek Prem Katha’, which
Through the series of events too well known to document
proved to be a scintillating success recording highest
here, the Indian market was also seriously affected. Even
collections in the history of Indian cinema.
3
2001-2002
the world media & advertising markets.
Report
your company was not immune to this pervasive downturn in
Annual
chairman’s statement
The Zee-Turner alliance makes us the
largest pay offering network in the
country reaching over 35 million
households with some of the strongest
television brands such as Zee TV, Zee
Cinema, Zee News, HBO, Cartoon
Network and CNN in a single
bouquet.
Zee Cinema, Zee News, HBO, Cartoon Network and CNN in
a single bouquet.
During the year, we decided to consolidate a few operations
and cut down some investments. Subsequent to a global
reality-check on convergence, the investment plan in HFC
network across several cities was curtailed to 3 cities. Cost
reduction through restructuring and selective staff reductions
has been implemented across the network. Operating and
expansion plans in the Portal and Education businesses were
reduced considerably in view of the slow development of
The weak international economic climate in 2001 gives added
significance to our approximate 20% growth in international
revenues. During the financial year 2002, more than 16% of
our revenues came from markets other than Asia. Taking a
long-term view of the potential of new international businesses,
we have increased our investments abroad and will continue
putting the right people and infrastructure in place. The new
markets added include Canada, Middle East, Bangladesh,
Pakistan and Hong Kong. We shall continue to grow the Zee
brand around the world and drive further growth through newer
subscribers and markets.
opportunity there.
This restructuring has been matched by a series of strategic
acquisitions and tie-ups aimed to equip Zee to compete in the
future. Your company recently acquired a 51% stake in ETC
Networks Limited and a 64% stake in Padmalaya Enterprises
Pvt. Ltd., which holds a 49.9% stake in Padmalaya Telefilms
Ltd. ETC is the industry leader in Music and Punjabi television
segments while Padmalaya has acknowledged expertise in
production and distribution of movies, animation and television
content in the South Indian languages. These acquisitions
would strengthen your company’s position in Music, Punjabi
During the year our receivables position worsened due to
& South Indian channel segments and create a firm foothold
the tough business environment surrounding media
in film production, animation and distribution. We are pleased
companies. Efforts are on to bring down the receivables to
with the performance of both these companies and do believe
normal levels and to this end we are making progress despite
that we shall derive tremendous value once the integration
the trying times.
process is completed.
In order to cross-leverage strength of content on the pay
Despite the tough environmental conditions, there were a few
revenue front, your company entered into a joint venture with
macro developments that I would like to mention specifically,
Turner International (India) Ltd, an AOL Time Warner company,
which are path breaking and will change the structure of the
to market and distribute pay offerings from both the networks
industry. The permission by the Government to uplink channels
together. This alliance makes us the
largest pay offering
locally was one such move. It will result in increasing the
network in the country reaching over 35 million households
advertising base for the entire industry. We have immediately
with some of the strongest television brands such as Zee TV,
taken initiatives to develop new customer segments in the
4
experience will strengthen the existing Board. Mr. Rajeev
Chandrashekhar and Mr. Vipin Malik stepped down from the
Board. We thank both of them for their valuable contributions.
Earlier during the year, we had announced our intention to
induct a strategic partner, but the continuing turmoil witnessed
market that would now be enabled to add television advertising
to their marketing armoury.
by global media players in their respective home markets
affected our plans. We continue to watch the situation and
shall keep our strategic options under constant evaluation.
Secondly, with the objective to address leakage of pay
revenues from the Indian cable system, I&B ministry has
proposed introduction of Conditional Access System (CAS)
as a priority for the year 2002. This move will enable
consumers to pay for what they actually watch and should
largely address the problem of under-declaration from various
levels of cable distribution system in the country. Your company
will benefit from CAS both as a broadcaster and as a Multi
In the current market environment it is important not to lose
sight of issues, which in the long term will deliver real,
sustainable shareholder value. Our strategy is to build highly
valuable businesses with leading positions in entertainment
media across the value chain. We stay committed to
maintaining a diligent focus on the company’s core business
in the present challenging environment.
System Operator (MSO). Zee is fully equipped to make
We never forget we are in business to create value and
required investments in technology to effectively install the
opportunity for you, fellow shareholders. I am always
prerequisites of the system.
encouraged by your interest in Zee’s progress, the faith you
Talent and the quality of people is the key differentiator in our
business and we aim to raise our standards even further in
have reposed in the future of the Company and thank you for
your most valuable support.
this area, with new appointments and strategic resourcing.
Inducting best of the talent from within and outside of the
Subhash Chandra
industry remains the company’s focus. This has been a year
of challenges and change for our employees. I thank all
colleagues for their continued dedication and hard work.
During the year we continued to tone up our operations and
this was also reflected in the changes in the Board of Directors.
Mr. Sandeep Goyal was inducted on the Board following his
appointment as CEO of Broadcasting business.
2001-2002
working with them and I am confident that their expertise and
Report
N.C. Jain to the Board in July 2002. We look forward to
This
consolidation saw the appointment of Mr. B.K. Syngal and Mr.
5
Annual
The ETC & Padmalaya acquisitions
would strengthen your company’s
position in Music, Punjabi & South
Indian channel segments and create
a firm foothold in film production,
animation and distribution.
India’s only fully integrated
media company
SERVICES
DISTRIBUTION
CONTENT PRODUCTION
CONTENT AGGREGATION
6
2001-2002
Annual
Report
Zee enjoys strong presence across
most of the entertainment value chain
VALUE PROPOSITION
• Largest producer
of Hindi language
TV programming
• Gadar The biggest
blockbuster movie
of 2002
Services
TV Networks
Broadcasting
zeenext.com
Events
Education services
• Presence across
all genres of
programming :
Hindi general
entertainment
English general
entertainment
6 Regional channels
News
Cinema
Music
• Leading share
in most TV
channel genres
• Reach of over
225 million
viewers globally
• International
subscriber base
of more than
500,000
• More than 300
Ground Learning
Centres
Distribution
Cable distribution
Direct to Operator
(DTO)
CHANNEL
Television
Film
Music
Education
Content
Aggregation
• Siticable – India’s
largest MSO reaching 6.5 million
households in
43 cities
• 8,000 km network
of two-way cable
• JV with Turner
for a 16 channel
bouquet
L E A D E R S H I P
Content
Production
7
product offerings
ZEE TV
India’s pioneering Hindi General Entertainment Channel, Zee TV
showcases superhit offerings in every genre - fiction, celebrity shows,
comedy shows, game shows, etc.
ZEE Cinema
India’s number one Hindi movie channel, Zee Cinema boasts the largest
library of over 3,000 Hindi movies in the Indian Satellite TV industry.
ZEE News
Zee News - the Hindi news channel - has won the highest
popularity in the Hindi heartland of India.
Alpha Channels
With a finger on the pulse of real India, the Alpha Channels dominate four
markets currently - Bangla, Marathi, Gujarati and Punjabi.
These channels consolidate Zee’s leadership in the regional market.
Efforts are on to strengthen Zee’s position in Tamil & Kannada segments.
ZEE MGM
Zee MGM has acquired an enviable library from MGM. It is getting
slotted as the best English movie channel for family veiwing.
8
2001-2002
Report
ZEE English
Currently having the best English language programming in India,
Zee English is gaining popularity with the urban and young
audiences.
Annual
ZEE Music
This ever young channel is slated for a complete make over by the
end of the financial year.
etc Punjabi and etc Music
etc Punjabi and etc Music got added to the Zee Network bouquet
during the current year. With Zee Music and etc Music, ZTL enjoys a
lion’s share of the music TV market. Similarly, Alpha Punjabi and
etc Punjabi offer a clear dominance to ZTL in the Punjabi market.
Siticable
During the year, ‘the new look and feel’ Siti channel
comprising of city specific programming, news & current
affairs, general entertainment & films was launched.
9
highlights ...
Balaji
Telefilms’ new
offering
‘Kammal’ is
creating its
magic of a
‘good story
well told’.
India’s first celebrity show, ‘ Jeena Isi Ka Naam Hai’
has been received with great excitement and is steadily
climbing up the charts.
Zee has restrengthed the local
Alpha channels with greater
coverage of local news and events
‘Simply Shekhar’ has won the hearts of the
audience as the biggest humour show on TV with
the inimitable Shekhar Suman.
The latest season of
‘Friends’ on Zee
English being aired
currently, is the hot
favourite with the
youth of today.
10
2001-2002
‘Kohi Apna Sa’-
The online lottery draw of ‘Sikkim Superlotto’
is one of the biggest attractions on Zee TV.
‘Kittie Party’ , a series written by Shobha
De is a big hit with the female audiences.
‘Lipstick’ The inside story
of Bollywood!
Exposing the faces
behind the make-up,
the gossip behind
the glamour.
A sizzling story
that leaves viewers
gasping for more!
11
Annual
Report
Balaji Telefilms
delivers yet another
unexpected story, a
family drama
turned thriller, that
has kept audiences
enthralled for over a
year now and is
still going strong!
C
... highlights
‘Dial M for Music’ on Zee Music
‘Ek Akasher Niche’ on Alpha Bangla
Zee MGM
‘Avantika’ on Alpha Marathi
SitiCable
Zee News - Sabse Pehle
12
Annual
Report
2001-2002
Film Production
Ek Prem Katha
... the biggest blockbuster of 2001-02 recording
highest collections in the history of Indian cinema.
Film Distribution
Bawandar
Zee has Indian
theatrical
distribution rights of
this film which is
based on the real life
victimisation of an
activist. Winner of 7
international
awards.
Tere Liye
Zee has global
theatrical and
electronic medium
distribution rights
of Tere Liye. This
refreshing musical
film was a debut for
its director, music
director and all the
young stars.
13
consolidation
This has been the year of consolidation
at Zee. Having acquired controlling stake
in ETC Networks Ltd. and a significant
stake in Padmalaya Telefilms Limited,
Zee is commited to grow in these segments.
C
ET orks
tw ed
Ne mit
Li
a
lay s
a
dm m
Pa elefil ed,
T mit
Li
14
2001-2002
Acquisition of controlling stake in ETC
Networks
Zee has acquired controlling stake in ETC Networks Limited - one of
India’s leading television broadcasters with two very popular channels :
Report
* etc – India’s number 1 music channel.
* etc Punjabi – India’s number 1 Punjabi language channel.
This acquisition has brought with it many strengths for Zee :
Annual
* ETC has exclusive worldwide rights to telecast Gurbani live from the
Golden Temple, Amritsar for eleven years.
* Undisputed leadership in the Music and Punjabi segments - Combined
market share of 46% in Music and 58% in the Punjabi segment.
* Opportunities to leverage Gurbani rights for driving subscriber base in
international markets.
* Co-branded channel etc-Alpha Punjabi has been launched in UK.
Plans are on to launch it in other international markets.
Acquisition of stake in Padmalaya
Telefilms
Zee has acquired significant stake in Padmalaya Telefilms Limited
- one of India’s leading entertainment software houses with a
significant presence in :
* Television software production
* Production and distribution of Hindi & regional feature films
* Large animation studio
This acquisition of Padmalaya Telefilms enhances the Zee
core competence with its strengths like :
* State- of- the- art 2D and 3D animation studios spread over
20,000 sq. ft. - with some of the best creative talent in animation.
* More than 280 animators working in the Hyderabad based
animation studio.
* A strong software library of over 300 movie rights.
* A strong software library with over 1,500 hours of
television software.
15
CARIBBEAN
73,500 subscribers
USA
1,37,000 subscribers
Map - Not to scale
representing Zee operations worldwide
Subscriber numbers are as on March 31, 2002.
16
CANADA
35,000 subscribers
UK
1,35,000 subscribers
AFRICA
37,500 subscribers
ASIA
India & rest of Asia and the Middle East
Target market : >50,000,000 hh
Access to 225 mn viewers globally
Broadcast over 80 countries
Strong demand for Asian programming
global reach
our offices
National
Registered Office
Corporate Office
Delhi
Noida
Continental Building
135, Dr. Annie Besant Road,
Worli, Mumbai 400 018.
Tel : 91 22 4965609
Chintamani Plaza,
Chakala, Off. Andheri Kurla
Road, Andheri (E),
Mumbai 400 099.
Tel : 91 22 6971234
J-27, South Extn.
Part-1, New Delhi 110 049.
Tel : 91 11 4610834
FC 19, Sector 1/6-A
Noida 201 301 U.P.
Delhi 110 049.
Tel : 91 118 543810
Siticable Network
Econnect India Limited
Zee Turner Pvt. Ltd.
B-10, Essel House,
Industrial Area,
Lawrence Road,
New Delhi 110 035.
No. 39, United Mansions,
3rd Floor, M.G. Road,
Bangalore 560 001.
Tel : 91 22 5580077
Fax : 91 22 5580099
Zee Interactive
Learning System
Chintamani Plaza, 4th Floor,
Chakala, Off. Andheri Kurla
Road, Andheri (E),
Mumbai 400 099.
Tel : 91 22 8352363
5th Floor, Raddison Plaza,
N H-8, New Delhi 110 037.
International
Zee at USA
Zee at UK
Zee at Africa
1615, W Abram St.
Ste 200 C-E,
Arlington, TX 76013,
Tel : (817) 2742933
Fax : (817) 274 4845
7, Belvue Business Centre,
Belvue Road, Northolt,
Middlesex UB5 5QQ,
London, United Kingdom,
Tel : (44) 181 839 4000
272 Oak Avenue,
Ground Floor,
Atrium Terraces,
Randburg,
Tel : (27) 11 781 3352
Zee at Hongkong
Zee at Singapore
Zee at UAE
Mr. Deepak Jain
Asia Today Ltd.,
1201, Asia Standard Tower,
59-65, Queen’s Road,
Central Hong-Kong.
Tel : 85228689060
Mr. Vijay Parab
Expand Fast Holding Ltd.
500, Rifle Range Road,
01-09 Bukit Timah Satellite
Earth Station,
Singapore 588 397.
Ware House S 19-5
P.O. Box 8009, SAIF Zone,
Sharjah, U.A.E.
Tel : 971-6-572522
17
board of directors
Mr. Subhash Chandra
Chairman
senior management
Mr. Laxmi Narain Goel
Mr. Sandeep Goyal
Director
CEO – Broadcasting
Mr. Ashok Kurien
Mr. D.P. Naganand
Director
CEO – Access
Mr. B.K. Syngal
Mr. Amit Goenka
Director
CEO – Education
Mr. N.C. Jain
Mr. Rajiv Garg
Director
CFO
Mr. D.P. Naganand
Mr. Jawahar Goel
Whole Time Director
Head – SitiCable
Mr. Sandeep Goyal
Whole Time Director
Mr. Laxmi Narain Goel
Head – Zee News
Mr. Vikas Gupta
Ms. Apurva Purohit
Company Secretary & Sr. VP (Fin)
Head – Zee TV
M/s. MGB & Company
Auditors
Mr. Prashant Sanwal
Head – Regional Channels
Registered Office
Mr. Sunil Khanna
135, Continental Building, Dr. A.B. Road,
Worli, Mumbai - 400 018.
Head – Distribution
Corporate Office
Mr. Hitesh Vakil
Chintamani Plaza, Andheri-Kurla Road,
Andheri (E), Mumbai - 400 099.
Director – Finance
Mr. Indru Balchandani
Bankers
ICICI Bank Limited
BNP Paribas
Standard Chartered Bank
HDFC Bank Limited
Visit us at www.zeetelevision.com
18
Director – HR
Mr. Partha Sinha
Director – Marketing
2001-2002
Report
Annual
Zee Telefilms
Limited
Annual Report
2001-02
Directors’ Report
to the Members of ZEE TELEFILMS LIMITED
Your directors take pleasure in presenting the 20th Annual
The new programming line-up was well received and the
Report of the Company for the year ended 31st March 2002.
overall trend remained positive.
FINANCIAL RESULTS
The overall programming cost of the network has been
(Rs. ‘crores’)
Particulars
contained through good planning, particularly by shifting from
weekly formats to daily shows. The lowering of acquisition
cost for movie rights has also helped bring down the costs.
Year ended
Year ended
31.03.2002
31.03.2001
406.5
384.7
were introduced and its coverage is getting increasing
Other Income
76.7
51.1
appreciation. The incisive news coverage during the budget,
Total Income
483.2
435.8
and breaking news on Gujarat violence drew wide
Total Expenses
348.8
273.5
appreciation.
Profit before Tax
Sales & Services
Zee News was refurbished with a new look. New virtual sets
134.4
162.3
The investments in Regional channels is an important
Provision for Taxation
37.1
23.8
strategic building block. Regional language channels will be
Profit after Tax for the year
97.3
138.5
a significant growth area of the future targeting a new, yet
3.2
0.3
complementary market segment that is currently not being
14.2
56.9
Add : Balance brought forward
321.7
295.5
Amount available for appropriations
401.6
376.8
22.7
22.7
—
2.3
The entertainment industry in India is showing good potential,
30.0
30.0
which will provide exciting opportunities for future growth.
348.9
321.8
Less : Prior Period Adjustments (Net)
Less : Provision for Taxation
earlier years
addressed by other major broadcasters.
Appropriations :
Dividend
Tax on Dividend
General Reserve
Balance carried forward
The Company produced its first big budget movie “Gadar –
Ek Prem Katha”, which became the top grosser of the year
2001. It was one of the few films along with “Lagaan” to
have done well during the year.
The regional and niche markets are clearly growing at a fast
pace and have the potential to become significant part of
During the year under review, Total Income of the Company
the business in the next 5 years. The Company is well poised
(on standalone basis) was Rs. 483.2 crores as compared to
to take a leading share in both the Pay and Advertising
Rs. 435.8 crores for the previous year, registering an increase
revenue segments.
of 10.90%. During the year EBITDA has increased by 6.40%
to Rs. 199.7 crores.
DIVIDEND
Domestic Pay Revenues
During the year, Zee formed a JV company “Zee Turner
Private Limited” to market and distribute the pay channel
With satisfactory growth in profit during the year, your
bouquet consisting of 14 channels of Zee and 3 channels of
Directors are pleased to recommend payment of dividend
Turner in the Indian sub-continent, thereby creating a
@ 55% for the year 2001-2002 resulting in payment of
formidable combination of highly popular channels. Zee has
Rs. 22.7 crores.
74% stake in the JV. The formation of this JV is likely to
BUSINESS OVERVIEW – THE YEAR IN RETROSPECT
Content
The year saw marked shifts in viewing patterns as compared
result in significant gains in business both for Zee and Turner
in the form of larger subscriber base and higher revenues
per subscriber apart from reduced costs and increased
efficiencies.
to last year and once again there is a marked preference for
The domestic pay revenue market in relation to actual
soaps and family drama. Zee launched many new
subscriber numbers constitutes a very small percentage of
programmes on prime time on its flagship channel - Zee TV.
revenues for the content providers. Your Network’s initiatives
20
market with Direct to Operator (DTO) distribution have met
programmes, news and current affairs, general entertainment
with success.
and films. The channel has introduced the new Siti brand
International Business
along with associated graphics and a more contemporary
channel ID. The new look channel has also been launched
The Company’s international business continues to grow
in other strategic markets like Hyderabad, Bangalore,
bringing “home away from home” for millions of South Asians.
Ahmedabad and areas of UttarPradesh and Punjab.
During the year, Zee Network UK has increased its viewership
and has thereby strengthened its position as the lead South
Asian Network in UK and Europe. Post digitization the
business has now become EBITDA positive and is on the
road to contributing higher profits during the year.
The industry has been going through rapid change and the
coming year should see both regulation and technology
determining growth. The Cable Regulation Bill is expected
to be re-presented in both houses of Parliament and should
provide the road map for the future of this industry. The Bill
The US market has shown a robust growth. It has a subscriber
envisages Conditional Access System (CAS) at the service
base of around 130,000 as at March 31, 2002. Zee broadcasts
level and also the requirement of a common head end to
two channels in the US market, Zee TV and Zee Gold.
transmit a combined set of broadcasters signals.
The Company recently started a separate beam of Zee TV
for Middle East and Pakistan markets. This gives us a better
opportunity to leverage advertising and pay revenues in these
markets.
The efforts initiated by Siticable as an MSO to streamline
Pay revenues are showing positive results. The company is
ideally poised as the largest Multi System Operator, to make
the best use of the opportunities that lie ahead.
Access
During the year, the Company consolidated its operations
Education
by linking its various control rooms through HFC. Master
Despite the persistent negative sentiment in IT, US slowdown,
Control Rooms (MCR) have been established at Hyderabad
September 11 terrorist attack, and the overall recessionory
and Bangalore linking the control rooms through optic fibre,
trend in the economy, the Company’s education business
thereby ensuring improvement in the quality of signal delivery
through its subsidiary, Zee Interactive Learning Systems
to customers.
(ZILS), attained sales turnover of Rs 27.75 crores. During
As part of its business model to broad-base revenues, internet
the year this division has ventured out in software exports,
and other broadband services was identified as a growth
content development and customization and has entered
area. Zee Interactive Multimedia Limited (ZIML) a wholly
into a Content Customization Contract worth US$ 0.3 million
owned subsidiary was already executing a project to provide
with a UK based company and signed few MOUs with one
internet services through Broadband to the end consumer.
of the largest e- learning company overseas. In continuation
Considering the synergies of operations, ZIML was
of its drive for University allied training business, an MOU is
amalgamated with Siticable w.e.f 1st April 2001. The Access
signed with Allahabad Agriculture University.
Group also undertook a major cost-cutting initiative without
in any way hampering growth of the business. Last mile
acquisition activity has also been stepped up.
In order to address the changing face of IT, the business
operations were restructured with more focus on University
alliances. ‘Zed Point’ model, has been relaunched in a
In Delhi, three control rooms have been linked through OFC.
new format. The non-performing/loss making operations
The Company has been able to position its brand for efficient,
were discontinued/downsized, restructuring exercise was
reliable and quality service provider for Internet Over Cable
carried out during June - August 2002 and the over heads
services in Bangalore and Mysore.
were brought down substantially by right sizing the
The new look and feel Siti Channel was re-launched on 15th
employee strength, rationalizing the office set up all across
August 2001 at Delhi. This is a centrally capsuled seventeen
the country.
21
2001-2002
hour Delhi specific channel, comprising of city specific
Report
towards creating a bouquet of channels in the domestic
Annual
ZEE TELEFILMS LIMITED
STRATEGIC INITIATIVES :
Corporate Restructuring :
of two television channels with a leading presence in Music
and Punjabi language segment. Your Company acquired
48,78,547 equity shares of Rs. 10 each at a price of Rs.
In a strategic move, to delayer the Company’s structure and
31.52 per share from the promoters of ETC. The Company
make it transparent, the Board of Directors of your Company
has subscribed to a preferential issue of 22,20,812 equity
has approved a corporate restructuring exercise pertaining
shares at Rs. 31.52 per share. As per applicable SEBI
to 11 subsidiary companies of ZTL. In the past two years,
regulations the Company made an open offer to acquire upto
because of the organic and inorganic growth made by the
20% of the equity shares against which 1900 shares were
Company, the corporate structure had become complex.
tendered and acquired by the Company. With these
Some entities had since become irrelevant moreover,
acquisitions the Company holds a 51% stake in ETC Networks
resulting in tax losses, higher administrative cost and legal
Limited which has become a subsidiary of the Company.
complexities. The restructuring exercise has been undertaken
with a view to make the corporate structure economical,
simple and efficient from the point of view of Taxation,
Accounting and Legal Compliances.
This acquisition would result in your Company becoming
undisputed market leader in the Music and Punjabi segments.
It would gain access to ETC’s library of film rights, generate
additional pay revenues by adding both channels into the
Accordingly, petitions have been filed in Hon’ble Bombay
Zee Turner bouquet and also leverage the ETC music
High Court for amalgamation of Programme Asia Trading
channel through Zee Records, all of which would constitute
Company Limited, ElZee Television Limited, Dakshin Media
significant added advantages to your Company.
Limited and Kaveri Entertainment Limited. Restructuring of
6 foreign subsidiary companies is also being implemented.
Acquisition of controlling stake in Padmalaya Telefilms
Permission of the Reserve Bank of India has been sought
Limited (PTL) – With a view to getting a foothold in the
to restructure these entities. Earlier, during the year, Zee
southern markets and to strengthen our position in film
Interactive Multimedia Limited – a company set up to provide
production business, your Company has acquired a
broadband and conditional access services, has merged with
controlling stake in Padmalaya Telefilms Limited - a
Siticable Network Limited, its holding company.
Company engaged in production and distribution of feature
Uplinking of Television Channels from India – Your
company, during the year under review, has obtained
permission from Ministry of Information and Broadcasting to
uplink Zee News, Zee Music and 8 regional language
channels and has already commenced uplinking of Zee News,
Alpha Gujarati, Alpha Bangla, Alpha Punjabi and Alpha
Marathi from India. The Uplinking of television channels from
films (in Telugu and Hindi languages) and television serials.
PTL also has a large animation software division and ZeePTL combine will create India’s largest pool of nearly 400
talented animators with a capacity of making upto 70
minutes of 2-D and 3-D animation per month. PTL is
currently doing a 200 episode animation series on “Jataka
Tales” in association with Film Club of USA (producers of
India would help the company in expanding its advertiser
the renowned animation masterpiece “Jungle Book”) and
base. Smaller business houses having niche products but
has a Letter of Intent (LoI) from Puttaparthi Sai Baba
no export earnings will also be able to advertise their products
Institute for creation of approximately 600 minutes of
on the bouquet of Zee channels now. The Company has
animation targeted at their worldwide following. PTL has
already established state of the art facilities for play out of
also been doing job contracts for overseas clients.
television channels at Noida, Delhi.
The Company and original promoters of PTL have constituted
Acquisition of Controlling stake in ETC Networks Limited
a special purpose vehicle company, Padmalaya Enterprises
– In another strategic move aimed at significant consolidation
Private Limited (PEPL), to effectively manage and control
of market position in niche segments, your Company has
PTL. PEPL acquired 62 lac equity shares of PTL, constituting
acquired a controlling stake in ETC Networks Limited - a
49.60% of its paid up capital. Your Company has a 63.3%
Company engaged in production, marketing and distribution
equity stake in PEPL.
22
the Company has signed a joint venture agreement with
for that period;
Turner India Private Limited, a subsidiary of AOL Time Warner
Inc, USA. A company in the name and style of Zee Turner
Limited has been formed. Your Company is holding 74%
(iii) proper and sufficient care has been taken for the
maintenance of adequate accounting records in
equity and Turner India holds the balance. The main objective
accordance with the provisions of the Act for
of Zee Turner is to distribute television channels broadcast
safeguarding the assets of the company and for
by your Company, and third party channels. It has
preventing and detecting fraud and other irregularities;
commenced commercial operations w.e.f. 1st February, 2002
and would enable your Company to expand the reach of its
bouquet of channels. Zee and Turner would exploit crosspromotional opportunities across their respective channels
(iv) the annual accounts have been prepared on a going
concern basis.
DIRECTORS :
and effectively address distribution outside the territory of
Zee’s international services.
In accordance with the provisions of the Companies Act,
1956, and the Articles of Association of the Company,
INTERNAL CONTROL SYSTEMS
Mr. Laxmi Narain Goel and Mr. Ashok Kurien are to retire by
Your Company maintains adequate internal control systems,
rotation at the ensuing Annual General Meeting. Mr. Laxmi
which provide, among other things, reasonable assurance of
Narain Goel and Mr. Ashok Kurien being eligible, offers
recording its operations in all material respects and guard
themselves for re-appointment.
against any misuse or loss of company assets. The Company
has an internal audit team with professionally qualified financial
personnel, which conduct periodic audits of all businesses to
maintain a proper system of checks and control.
Your Board has co-opted, Mr. Nemi Chand Jain and
Mr. Brijendra Kumar Syngal as additional Directors on the Board
of the Company w.e.f. 18th July, 2002. In terms of the listing
agreement they are Independent Non Executive Directors.
AUDITORS
Mr.Vasant Parekh, Director of your Company, has resigned
M/s. MGB & Co., Chartered Accountants are to retire at the
on 31st July, 2001 due to personal reasons. The Board has
conclusion of the forthcoming Annual General Meeting and,
placed on record its deep appreciation of the valuable
being eligible, offer themselves for re-appointment as auditors
of the company. Comments in the Auditors’ Report have
contribution made by Mr. Parekh during his tenure as Director
of the Company.
been explained vide Note Nos. 6 and 8 of Schedule 17 of
Notes to Accounts forming part of the Annual Accounts.
DIRECTORS’ RESPONSIBILITY STATEMENT:
Mr. Rajeev Chandrasekhar and Mr. Vipin Malik, Non
Executive Directors on the Board of the Company, have
tendered their resignation from the Board due to pre –
Pursuant to provisions of Section 217 (2AA) of the Companies
occupation with effect from 18th July, 2002 and 18th March
Act, 1956 the Directors confirm that ;
2002, respectively. The Board has placed on record its deep
(i)
in preparation of the annual accounts, the applicable
accounting standards have been followed alongwith
(ii)
appreciation for the valuable contributions made by
Mr. Rajeev Chandrasekhar and Mr. Vipin Malik during their
proper explanation relating to material departures;
tenure as directors of the Company.
appropriate accounting policies have been selected and
Mr. R.K. Singh, Whole Time Director of the Company, has
have been applied consistently while judgments and
resigned from the Board of your Company w.e.f. 15th April,
estimates have been made that are reasonable and
2002 due to personal reasons. The Board placed on record
prudent so as to give a true and fair view of the state
its deep appreciation for the valuable contribution made by
of affairs of the Company at the end of the financial
Mr. R.K. Singh during his tenure as Whole Time Director of
23
2001-2002
year 2001-2002 and of the profit or loss of the Company
Report
Joint Venture with Turner – During the period under review
Annual
ZEE TELEFILMS LIMITED
the Company. Mr. Vijay Jindal ceased to be Director of your
Company w.e.f. 18th July, 2002.
Accounts forming part of the Annual Accounts.
The Company is not engaged in manufacturing activity; as
Brief resume of the Directors to be appointed or re-appointed
such particulars relating to conservation of energy and
is given in the explanatory statement attached to the notice
technology absorption are not applicable. However in the
convening 20th Annual General Meeting of the Company.
editing facilities, studios, offices etc. adequate measures are
REPORT ON CORPORATE GOVERNANCE
being taken to conserve energy as far as possible.
The Company is in full compliance of mandatory
HUMAN RESOURCE
recommendations contained in Code of Corporate
Governance, as per the listing agreement. A report on
compliance with the Code is annexed herewith alongwith
auditors’ report thereon. The Company intends to implement
the non-mandatory recommendations also, as prescribed in
the Code in due course.
Your Directors would like to place on record their deep
appreciation of all employees for rendering quality services
to every constituent of the Company be it viewers,
shareholders, creditors, producers, or regulatory agencies.
The unstinting efforts of the employees have enabled ZEE
to remain in forefront of media and entertainment business,
PUBLIC DEPOSITS
The Company has not accepted any fresh fixed deposits or
renewed any fixed deposits from the public. The Company
has honoured all of its commitments to depositors during
the period under review.
making its offerings best in the genre, cherished by South
Asian community spread across the globe.
As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of
Employees) Rules 1975, as amended, the names and other
SUBSIDIARY COMPANIES
particulars of the employees are set out in the Annexure
Statement pursuant to Section 212 of the Companies Act,
included in this report.
1956, is annexed herewith.
ACKNOWLEDGEMENTS
Your Company has made an application to the Department
of Company Affairs (DCA), Ministry of Finance and
Your Directors take this opportunity to express their gratitude
Company Affairs with a request to exempt the Company
to the producers, vendors, investors, banks and financial
from attaching the Balance Sheet, Profit and Loss Account,
institutions for their continued support. Thanks are also due
Reports of Directors’ and Auditors’ thereon of subsidiary
to the Ministry of Information & Broadcasting, Department of
companies to your Company, on the ground that the
Telecommunication and Videsh Sanchar Nigam Limited for
consolidated accounts attached with the Annual Report of
their continued support and guidance.
the Company is giving true and fair view of the financial
state of affair of subsidiary companies. While the approval
from the DCA is awaited, as an abundant caution the
Balance Sheet, Profit and Loss Account and Reports of
Directors’ and Auditors’ thereon are attached in a separate
booklet, forming part of this report.
PARTICULARS REGARDING CONSERVATION OF
ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
For and on behalf of the Board
EXCHANGE EARNINGS & OUTGO
The particulars regarding foreign exchange earning and outgo
Place: Mumbai
are given in Schedule 17B point 12(e) to the Notes to the
Date: 24th September, 2002
24
SUBHASH CHANDRA
Chairman
INFORMATION AS PER SECTION 217(2A)(B)(II) READ WITH COMPANIES (PARTICULARS OF EMPLOYEES) RULES,
1975 AND FORMING PART OF THE DIRECTORS’ REPORT FOR THE YEAR ENDED 31st MARCH, 2002.
Sr. Name
No.
Age Designation
1
Mr. Amitabh Kumar
48 Director – Corporate
2
Mr. Anthony D’Silva
52 President – International
Business
3
Mr. B.R. Jaju
51 President – IPR
4
Mr. D.P. Naganand
53 CEO – Access
5
Mr. Gajendra Singh
35 Programme Director
6
Mr. Hitesh Vakil
7.
Ms. Madhvi Mutatkar
Remuneration
(Rs.)
2,279,440 +
Qualification
Experience Date of
Last Employment
(Years) commencement of
Employment
Annual
I.
B.E.
26
29.06.2001
VSNL
543,381 +
B.Sc., PGDBM
28
20.12.1999
Modi Entertainment
1,139,201 +
B.Com., FCA.,
FCS., LLB.
26
30.06.1999
Blow Plast Ltd.
B.Tech (Hons),
MBA, AMPISMP
31
01.03.2002
Econnect India Ltd.
3,229,176
Degree in Editing,
FTII
12
23.07.1992
Freelance Editor
41 Director – Finance
2,460,300
B.Com., ACA
19
01.04.1996
Tips & Toes Cosmetics (I) Ltd.
47 President – Zee TV
2,680,210
B.A., Diploma in
Mass Communications
23
01.07.1999
Doordarshan
B.Tech., PGDM
14
21.12.2000
India Info. Com
16,383,969
M.Sc., MBA
31
11.10.1999
ESPN Software India Ltd.
690,810 +
8.
Mr. Partha Sinha
38 Director – Marketing
9.
Mr. R.K. Singh
51 C.E.O.
10.
Mr. Rajesh Jain
39 President – Corporate
Finance & Strategy
4,577,145
B.Com., C.A.
15
15.05.2000
KEC International Ltd.
11.
Mr. Sainath Iyer
47 President – Market Research
1,798,040 +
B.Sc.
24
01.09.1995
Lintas (I) Ltd.
12.
Mr. Sandeep Goyal
39 Group Broadcasting CEO
B.A. (Hons), MBA
18
16.05.2001
Rediffusion - DY&R Ltd.
13.
Mr. Satish Menon
45 President – Zee News & Sports 2,485,495 +
B.A.
21
08.07.1999
Mid-Day Publications Ltd.
14.
Mr. Sikander Bhasin
46 President – Broadcast
operations, Production & IT
B.Com. (Hons),
26
Diploma in Broadcasting and Journalism
01.06.1996
Doordarshan
B.A., MBA
17.09.1994
15.
Ms. Uma Ganesh
Notes : 1.
43 CEO – ZILS
3,083,855
13,745,725 +
2,841,048
2,174,575 +
22
2001-2002
ADDITIONAL INFORMATION GIVEN AS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN
THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988.
Report
ZEE TELEFILMS LIMITED
Aptech Ltd.
Appointment is contractual and terminable by notice on either side.
2.
None of the employees is related to any of the Directors.
3.
Remuneration includes Salary, Allowances, Company’s Contribution to Provident Fund, Superannuation, Medical
Benefits, Leave Travel Allowance, Accommodation & Other Perquisites and benefits valued on the basis of
provisions of Income Tax Act,1961 excluding ESOP perquisites.
+
Indicates remuneration is for part of the year.
25
26
PATCO
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
6. Zee Interactive Learning
Systems Limited (ZILS)
7. Dakshin Media Limited
8. Kaveri Entertainment
Limited
9. Econnect India Limited
10. Zee Multimedia Worldwide
Limited, BVI (ZMWL, BVI)
11. Winterheath Company
Limited (WCL)
12. Asia Today Limited (ATL)
13. Expand Fast Holdings
Limited, BVI (EFHL, BVI)
14. Expand Fast Holdings
(Singapore) Pte. Limited
31/03/2002
31/03/2002
4. El Zee Television Limited
31/03/2002
3. Programme Asia Trading
Company Limited (PATCO)
5. Zee Turner Private Limited
ZTL
31/03/2002
2. Siti Cable Broadband
South Private Limited
EFHL, BVI
ZMWL, BVI
WCL
ZMWL,
BVI & ZTL
ZTL
ZTL
ZTL
ZTL
ZTL
ZTL
SITI
ZTL
31/03/2002
1. Siti Cable Network
Limited (SITI)
(3)
(2)
(1)
Holding
Company
The Financial
Year of the
Subsidiary
Company
ended on
Name of the Subsidiary
Company
relating to Subsidiary Companies
100%
100%
100%
100%
100%
100%
100%
100%
100%
74%
100%
100%
100%
100%
(4)
Extent of
Holding
Company’s
Interest
S$1
US $ 1
US $ 1
US $ 1
US $ 1
Rs. 10/-
Rs. 10/-
Rs. 10/-
Rs. 10/-
Rs. 10/-
Rs. 10/-
Rs. 10/-
Rs. 10/-
Rs. 10/-
(5)
100,000
2
5,500,000
1,002
34
21,000,070
50,000
12,000,070
73,587
7,400
2,000
347,100
10,000
100,091,108
(6)
Face
Number of Equity
value of
Shares held by the
Equity
holding Company
Shares
and/or its
(Per Share)
subsidiaries
S$ 167
US$ 1,549
US$ 14,153
US$ 4,889
(7)
—
—
—
—
—
—
—
—
—
—
S$ 306
US$ (16,217)
US$ 33,189
US$ 7,816
(8)
(Amt. in ’000)
(Amt. in ’000)
US$ 9,264
US$ 9,713
Rs. (61,266)
Rs. (32,710)
Rs. (51,338)
Rs. (194,386)
Rs. 973
Rs. (1,258)
Rs. (206)
Rs. (122)
Rs. (26,646)
(9)
—
—
—
US$ 14,381
US$ (4,823)
Rs. (102,691)
—
Rs. (25,204)
Rs. (78,787)
—
Rs. 50,432
Rs. (26,092)
—
Rs. 33,475
(10)
(Amt. in ’000)
For the financial For the previous
year ended on financial years
March 31, 2002 of the subsidiary
since it became
a subsidiary
For the previous
financial years
of the subsidiary
since it became
a subsidiary
For the financial
year ended on
March 31, 2002
(Amt. in ’000)
Net aggregate amount of profits/
(losses) of the subsidiary so far as
it concerns the members of the
holding company and is not dealt
with in accounts of holding company
Net aggregate amount of profits/
(losses) of the subsidiary so far as
it concerns the members of the
holding company and is dealt with
in accounts of holding company
Statement Pursuant to Section 212 of the Companies Act, 1956
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
31/03/2002
15. Zee Telefilms
(International) Limited
16. Asia T.V. Limited, UK
17. Zee T.V. USA, Inc.
18. Asia T.V. (USA) Limited
19. Asia T.V. (Africa) Limited
20. Zee TV South Africa
(Proprietary) Limited
21. Asia TV (Netherlands)
Limited, BVI
22. Software Supplies
International Limited
31/03/2002
ZMWL,BVI
Asia TV
(Africa) Ltd.
ZMWL,
Mauritius
Asia TV
(Africa) Ltd.
ZMWL,
Mauritius
Mauritius
ZMWL,
ZMWL,
Mauritius
ZMWL, BVI
ZMWL,
Mauritius
(3)
Holding
Company
100%
100%
100%
100%
100%
100%
100%
100%
100%
(4)
Extent of
Holding
Company’s
Interest
US $ 1
US $ 1
NLG 1000
Rand 1
US $ 1
US $ 1
US $ .01
US $ 1
GBP 1
(5)
Mumbai
24th September, 2002
US$ 2,106
GBP 81
GBP 8
RAND (12,290)
GBP 24
US$ (8)
US$ 433
AED 4,938
GBP 854
(7)
27
Director – Finance
Company Secretary
Hitesh Vakil
Vikas Gupta
Annual
Whole Time Director
Director
Director
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
US$ (5,250)
GBP 130
GBP 138
RAND (9,970)
GBP 307
US$ (14)
US$ 1,176
AED 17,116
GBP (3,761)
(8)
(Amt. in ’000)
(Amt. in ’000)
(9)
Report
(10)
2001-2002
—
—
—
—
—
—
—
—
—
(Amt. in ’000)
For the financial For the previous
year ended on financial years
March 31, 2002 of the subsidiary
since it became
a subsidiary
For the previous
financial years
of the subsidiary
since it became
a subsidiary
For the financial
year ended on
March 31, 2002
(Amt. in ’000)
Net aggregate amount of profits/
(losses) of the subsidiary so far as
it concerns the members of the
holding company and is not dealt
with in accounts of holding company
Net aggregate amount of profits/
(losses) of the subsidiary so far as
it concerns the members of the
holding company and is dealt with
in accounts of holding company
For and on behalf of the Board
26,520,004
2
40
1
10,000
2
2
2
16,438,900
(6)
Face
Number of Equity
value of
Shares held by the
Equity
holding Company
Shares
and/or its
(Per Share)
subsidiaries
Note : Hokushan Trading Company has been hived off as on 31/03/02. Hence not included above.
23. Zee Multimedia Worldwide
(Mauritius) Limited
(ZMWL, Mauritius)
(2)
(1)
31/03/2002
The Financial
Year of the
Subsidiary
Company
ended on
Name of the Subsidiary
Company
ZEE TELEFILMS LIMITED
Corporate Governance
This Report on Corporate Governance forms part of the Directors’ Report. This section, besides being in compliance with
the mandatory requirements of the listing agreement, gives an insight into the processes of the Company.
1.
2.
Company’s Philosophy on Code of Governance
•
To adopt internal and external measures to increase the level of transparency and accountability
•
To demonstrate to stakeholders that the Company is following proper governance practices.
•
To respect the laws of the land and rights of all stakeholders and in turn to earn respect from all stakeholders.
•
To lead the Company towards high growth path in terms of profits and revenues.
Board of Director
a)
Composition & Category of Directors
Name of Directors
Category
Mr. Subhash Chandra
Attendance
No. of
No. of
at the
Directorship
memberships
of Board sub-
Board
of other
Meetings
Companies
8
11
Nil
-Do-
5 ©
10
Nil
Promoter –
Committees
Non Executive
Mr. Laxmi Narain Goel
Mr. Ashok Kurien
-Do-
10
3
2
Non Executive
1
0
0
Non Executive –
4 ©
8
1
Mr. Vasant Parekh@
Mr. Rajeev Chandrasekhar*
Independent
Mr. Vipin Malik$
-Do-
8 ©
11
14
Mr. Vijay Jindal**
-Do-
Nil
1
Nil
Mr. Nemi Chand Jain^
-Do-
Nil
Nil
1
Mr. B.K.Syngal^
-Do-
Nil
10
1
Mr. R.K. Singh #
Whole Time –
6
4
1
Independent
Mr. D. P. Naganand
Whole Time
9 ©
3
Nil
Mr. Sandeep Goyal
Whole Time –
8
2
2
Independent
@
Resigned w.e.f. 31st July, 2001
*
Resigned w.e.f. 18th July, 2002
$
Resigned w.e.f. 18th March, 2002
#
Resigned w.e.f. 15th April, 2002
^
Appointed w.e.f. 18th July, 2002
**
Ceased to be Director w.e.f. 18th July, 2002
©
M/S Rajeev Chandrasekhar, Vipin Malik, Laxmi Narain Goel, D.P. Naganand and Sandeep Goyal attended 3,
1, 4, 2 and 1 meetings, respectively, through teleconference.
Brief profile of the Directors to be appointed or re-appointed at the Annual General Meeting is given in the
explanatory statement attached to the Notice convening the 20th Annual General Meeting of the Company.
b)
Board Meetings
During the year under review, 11 meetings of the Board were held on 03-04-2001, 30-04-2001, 31-05-2001,
31-07-2001, 22-10-2001, 13-12-2001, 16-01-2002, 01-02-2002, 19-02-2002, 22-02-2002 and 12-03-2002.
28
However, due care is taken that minimum quorum is present in person at the meeting.
The Board has considered Mr. Sandeep Goyal, Whole Time Director- Content and Broadcasting as Independent
Director.
The Company Secretary in consultation with Whole time Directors drafts the agenda of the Board Meetings. Agenda
2001-2002
Normally Directors are required to attend Board/Committee Meetings in person. However, in certain cases, where
directors are not in a position to attend the meetings in person, they are allowed to participate through teleconferencing.
Report
ZEE TELEFILMS LIMITED
Board members have complete and unfettered access to any information within the Company. Heads of Departments
are normally invited at the Board Meetings to provide necessary insights into the working of the Company and for
discussing corporate strategies.
3.
Board Committees:
a)
Audit Committee
The Board has constituted Audit Committee with majority of Directors being non-executive Directors. The Chairman
of the Committee is an Independent Director. The audit committee has reviewed the annual financial results, half
yearly results, internal audit reports and internal working systems of the Company. During the year under review,
Audit Committee met for 5 times viz.
Sr. No.
Date of the Meeting
Attendance
No. of Independent
Directors
No. of NonIndependent Directors
1.
2.
3.
4.
30-05-2001
18-09-2001
13-12-2001
28-12-2001
2
2
2
2
1
0
1
1
5.
28-02-2002
2
1
Composition of Audit Committee and Category of its Members during the year under review.
Name of Directors
Category
Appointment on
Resigned from
Audit Committee
Audit Committee
Mr. Ashok Kurien
Promoter – Non Executive
29th March, 2001
_
Mr.
Mr.
Mr.
Mr.
Non Executive
Non Executive - Independent
-Do-Do-
29th March, 2001
30th April, 2001
30th April, 2001
18th July, 2002
30th April, 2001
18th July, 2002
18th March, 2002
_
-DoWhole Time – Independent
-Do-
18th July, 2002
29th March, 2001
31st May, 2002
_
22nd October, 2001
Vasant Parekh
Rajeev Chandrasekhar
Vipin Malik
Nemi Chand Jain
Mr. B.K.Syngal
Mr. R.K. Singh
Mr. Sandeep Goyal
Statutory Auditors, Internal Auditors and Chief Financial Officer of the Company have attended all meetings of the
Committee. The Company Secretary was the Secretary of the Audit Committee.
b)
Share Transfer and Investor Grievance Committee
Main function of the Share Transfer and Investor Grievance Committee is to supervise and ensure efficient transfer
of shares and proper and timely attendance of investors’ complaints.
29
Annual
papers alongwith relevant details are circulated to all Directors, well in advance of the date of the Board Meeting.
The Committee comprises of Mr. Ashok Kurien, Non Executive Director and Mr. Sandeep Goyal, Whole Time
Director. The Company Secretary is a permanent invitee to the Committee.
Committee meets, generally, every week to review working issues and approve the transfers/ duplicate share issue,
if any. During the year under review committee met 30 times. Share transfers are being processed and approved
in 7 days time from the date of receipt of complete and valid request.
Details of number of requests/complaints received and resolved are as under :
Nature of Correspondence
Received
Replied/
Resolved
Pending
434
22
18
492
674
5
18
168
434
22
18
492
674
5
18
168
—
—
—
—
—
—
—
—
1831
1831
—
No. of Requests for Change of Address & Bank Mandate
Letters received from SEBI/ NSDL/ Stock Exchanges
Requests for Stop Transfer
Non Receipt of Share Certificate/Credit for Demat of Shares/ Dividend
Request for issue of Duplicate Share Certificate and Dividend Warrants
Legal Cases/ Cases before Consumer Forum
Investors Request for Information
Miscellaneous Letters
TOTAL
*
4.
Legal cases are pertaining to title of shares in which the Company has been made a party. These cases are
not material in nature. The resolution of such cases is dependent upon final court judgement.
Remuneration Policy and Details of Remuneration Paid
The remuneration of the Directors is decided by the Board of Directors as per the remuneration policy of the Company
within the ceiling approved by shareholders.
Details of the remuneration paid to Whole Time Directors during the year ended 31st March 2002 is:
Remuneration (Rs.)
Name
Position
Mr. R.K. Singh
Mr. D.P. Naganand *
Mr. Sandeep Goyal
Whole Time Director
Whole Time Director
Whole Time Director
Salary &
Allowances
Perquisites
Employer
Contribution
to Provident
Fund
16,712,209
6,953,867
16,304,435
471,603
720,120
621,785
836,640
738,000
378,581
No remuneration was paid to the non-executive Directors.
*
5.
Mr. D.P. Naganand was being paid salary, allowances and perquisites from Siticable Network Limited and Zee
Interactive Multimedia Limited, wholly owned subsidiaries of the Company. With effect from 1st March, 2002, the
salary and perquisites are being paid to him from the Company.
General Body Meetings
The 20th Annual General Meeting of the Company, for the year 2002, would be held on Friday the 25th day of October,
2002 at 4 P.M. at Patkar Hall, SNDT Women’s University, Nathibai Damodar Thackersey Marg, New Marine Lines,
Mumbai – 400 020.
30
Details of last three Annual General Meetings and other General Meetings held during last 2 years are as follows:
Day, Date and Time of the Meeting
Venue
EGM
19th AGM
18th AGM
EGM
EGM
EGM
AGM
Thursday, 30th May 2002, 4.00 p.m.
Friday, 29th September 2001, 12.00 noon
Tuesday, 26th September 2000, 4.00 p.m.
Thursday, 11th May 2000, 4.00 p.m.
Monday, 10th April 2000, 4.00 p.m.
Monday, 25th October 1999, 4 p.m.
Monday, 27th September 1999, 4 p.m.
Nehru
Nehru
Nehru
Nehru
Nehru
Nehru
Nehru
Centre,
Centre,
Centre,
Centre,
Centre,
Centre,
Centre,
Worli,
Worli,
Worli,
Worli,
Worli,
Worli,
Worli,
Mumbai-18
Mumbai-18
Mumbai-18
Mumbai-18
Mumbai-18
Mumbai-18
Mumbai-18
Annual
Meeting
During these meetings all resolutions including special resolutions were passed unanimously.
6.
Disclosures
There were no material transactions between the Company and its Directors or management or their relatives that have
any potential conflict with interests of the Company at large.
There were no cases of non-compliance with SEBI or Stock Exchange regulations, nor any cases of penalties, strictures
imposed by SEBI or Exchanges during the last three years.
The Department of Company Affairs has conducted inspection of books of account of the Company under Section 209A
of the Companies Act, 1956. The inspection has since been completed and certain discrepancies in compliance of
provision of Sections 209, 211, 212, 217 and 307 of the Companies Act, 1956 have been reported by the Department.
The Company has filed compounding applications, under Section 621A of the Companies Act, 1956, seeking compounding
of non compliance of these provisions. The Department has filed prosecutions with regard to the same issues against
the Company and Directors in the Court of Metropolitan Magistrate, Mumbai. All these non-compliances are compoundable
under the provisions of Section 621A of the Companies Act, 1956. There are no material financial implications of these
non compliance issues. The Company has taken necessary steps to ensure that such instances of non-compliance do
not occur again.
The Annual General Meeting of the Company has been convened on 25th October, 2002. The Company has sought
permission from Central Government to hold its 20th Annual General Meeting on or before 27th December, 2002. The
permission has been granted vide letter No.28767/TA/III dated 6th September, 2002. The extension of time for holding
AGM was necessitated because of the pending petition before the Hon’ble Bombay High Court, for amalgamation of
Kaveri Entertainment Limited, Programme Asia Trading Company Limited, El Zee Television Limited and Dakshin Media
Limited, wholly owned subsidiaries of the Company, with the Company.
7.
Means of Communication
The Company has always promptly reported all material information including declaration of quarterly financial results,
press releases, etc. to all Stock Exchanges where the securities of the Company are listed. Such information is also
displayed immediately on the Company’s web site, www.zeetelevision.com. The financial results, quarterly, half yearly
and annual results and other statutory information were communicated to the shareholders by way of advertisement in
a national daily and in a vernacular language newspaper as per requirements of the Stock Exchange.
8.
2001-2002
The Company has also convened 4 Extra Ordinary General Meetings on 25th October, 2002 at 2 PM, 2.30 PM, 3 PM
and 3.30 PM at the venue mentioned above, pursuant to the orders of Hon’ble Bombay High Court, to seek approval
of members of the Company to amalgamate Programme Asia Trading Company Limited, Kaveri Entertainment Limited,
Dakshin Media Limited and Elzee Television Limited.
Report
ZEE TELEFILMS LIMITED
General Shareholder Information
The required information is provided in Shareholders’ Diary Section.
31
Certificate of Compliance
from Auditor as stipulated under clause 49 of the Listing Agreement of the Stock Exchanges of India
To,
The Members of
Zee Telefilms Limited
We have examined the compliance of conditions of Corporate Governance by Zee Telefilms Limited, for the year ended on
31.03.2002, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited
to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we report as under:
The Composition of the Audit Committee during the period 1st April, 2001 to 30th April, 2001 and from 18th March, 2002
to 31st March, 2002, was not as per the terms of listing agreement and the Remuneration Committee was constituted only
on 12th March, 2002 which has not held any meeting during the year. In view of the above, we report that Corporate
Governance needs to be strengthened.
Subject to the above, we certify that the Company has complied with the conditions of Corporate Governance as stipulated
in the abovementioned Listing Agreement.
We state that generally no investor grievance are pending for a period exceeding one month against the Company as per
the records maintained by the Company.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
Mohan Bhandari
Partner
Mumbai
24th September, 2002
32
For MGB & Co
Chartered Accountants
Date, Time and Venue of
Extra Ordinary General Meetings (4)
Shareholders’ Meetings
Day & Date: Friday, the 25th day of October, 2002.
Time :
2, 2.30, 3, 3.30 p.m.
Venue :
Patkar Hall, SNDT Women’s University, Nathibai Damodar
Thackersey Road, New Marine Lines, Mumbai-400 020
Annual General Meeting
Day & Date : Friday, the 25th day of October, 2002.
Time :
4 p.m.
Venue :
Patkar Hall, SNDT Women’s University, Nathibai Damodar
Thackersey Road, New Marine Lines, Mumbai-400 020
2.
Date of Book Closure
24th October, 2002 to 25th October, 2002 (Both days inclusive)
3.
Listing on Stock Exchanges
The Stock Exchange, Mumbai (BSE)
The National Stock Exchange of India Limited (NSE)
The Delhi Stock Exchange Association Limited (DSE)
The Calcutta Stock Exchange Association Limited (CSE)
The Ahmedabad Stock Exchange – Ahmedabad (ASE)
4.
Listing Fees
Paid for all the above stock exchanges as per the listing agreement.
5.
ISIN No.
INE256A01028
6.
BSE Stock Code
505537
NSE Stock Code
ZEETELE EQ
Reuters Code :
ZEE.BO (Bombay Stock Exchange)
7.
ZEE.NS (National Stock Exchange)
Bloomberg Code :
8.
Registered Office
Z IN
(Bombay Stock Exchange)
NZ IN
(National Stock Exchange)
135, Continental Building, Dr. Annie Besant Road,
Worli, Mumbai-400 018, India
Tel : +91-22-4965609/11, Fax : +91-22-4964334
Website : www.zeetelevision.com
9.
Share Transfer Office
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel: +91-22-6971234
Fax: +91-22-6936531
E.Mail: vinodd@zeenetwork.com
33
2001-2002
1.
Report
Shareholders’ Information
Annual
ZEE TELEFILMS LIMITED
10. Share Transfer Agent
(For electronic transfers)
Sharepro Services,
Satam Estate, 3rd Floor,
Above Bank of Baroda Building,
Cardinal Gracious Road,
Chakala, Andheri (E),
MUMBAI - 400 099
Tel. : +91-22-8215168, 8329828
Fax No. +91-22-8375646
11. Compliance Officer
Mr. Vikas Gupta,
Company Secretary & Sr. V.P. (Fin),
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel : +91-22-6971234, Fax : +91-22-6936531
12. Financial Queries
Mr. Atul Das,
Sr. Vice President – Corporate Finance & Strategy,
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel : +91-22-6971234, Fax : +91-22-6936531
E.Mail: dasa@zeenetwork.com
13. Investor Relation Officer
Mr. Riddhish Purohit,
Dy. Company Secretary
Chintamani Plaza, 6th Floor,
Andheri Kurla Road,
Andheri (East), Mumbai-400 099, India
Tel : +91-22-6971234, Fax : +91-22-6936531
E.Mail : purohitr@zeenetwork.com
14. Dividend
The Board of Directors has recommended payment of dividend @ 55% on the paid up capital of the Company.
Dividend, if approved by members at Annual General Meeting, will be paid to all those shareholders whose name would
appear in the register of members as on 25th October, 2002 and in the list of beneficial owners registered with NSDL
and CDSL, as on 24th October, 2002, subject to deduction of tax at source at the applicable rates.
In view of the circular of the Securities & Exchange Board of India dated October 15, 2001, the dividend, shall be paid
through ECS wherever the ECS facility is available. Shareholders are therefore requested to provide proper bank
account numbers and bank address details to your Depositories where Demat Account has been opened or where
shares are held in physical form, provide your bank account details to the Company. In the absence of availability of
ECS facility the Company will send the dividend thru warrants.
15. Change of Address
Members holding equity share in physical form are requested to notify the change of address/dividend mandate, if any,
to the Company’s Share Department, at the address mentioned above.
34
16. Share Transfer System
Shares sent for physical transfer or dematerialisation requests are generally registered and returned within a period of
15 days from the date of receipt of completed and validly executed documents.
The share transfer committee generally meets every week, preferably on every Monday, to approve the transfers and
dematerialisation requests. During the year ending 31st March 2002 the Share Transfer Committee met for 30 times.
17. Simultaneous Dematerialisation of Shares Sent for Transfer
The Company provides facility of simultaneous transfer and dematerialisation of equity shares as per the procedure
prescribed by NSDL and CDSL.
The Company, upon receipt of request of share certificates either for transfer or for splitting, processes the same. If the
documents are found in order, the Company instead of sending the certificates sends intimation to the shareholder,
confirming the transfer or split of shares. The confirmation letter has to be presented by the investor to his/her DP within
15 days from the date of confirmation letter.
Thereafter, the shares are credited to the investors account in the usual demat process. In case the letter is not
presented within 15 days the Company proceeds to issue the share certificates and the confirmation letter becomes
invalid.
18. Dematerialisation of Equity Shares
Trading in equity shares of the Company became mandatory in dematerialised form w.e.f. 5th April, 1999. To facilitate
trading in demat form, in India, there are two depositories i.e. National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL). The Company has entered into agreement with both these depositories.
Shareholders can open account with any of the Depository Participant registered with any of these depositories.
As of date (approx.) 90% of the equity shares of the Company are in the dematerialised form.
19. Splitting of Shares
Shareholders vide their resolution dated 25th October, 1999 had approved splitting of face value of equity shares of the
Company from Rs. 10 each to Re. 1 each. The resolution became effective from the start of no-delivery period i.e. w.e.f.
6th December, 1999. From this day onward trading in equity shares of Re. 1 each commenced and the equity shares
of Rs. 10 each ceased to trade on the exchanges.
For the shareholders, holding shares in physical form, the Company had sent them intimation to exchange the old
certificates of face value of Rs. 10 each with new certificate of face value of Re. 1 each. For the shareholders holding
shares in demat form, the depositories automatically gave the effect of splitting of face value of shares by way of a
corporate action dated 23rd December, 1999.
35
2001-2002
if any, to their respective DP.
Report
Members holding equity share in dematerialised form are requested to notify the change of address/dividend mandate,
Annual
ZEE TELEFILMS LIMITED
Shareholders who could not earlier, exchange their old certificates of face value of Rs. 10 each with the new certificates
and who are desirous of exchanging the same, shall follow the following procedure:
1.
Write a letter to the Company mentioning:
•
Your intention to split the share certificates;
•
Whether the new share certificates are required in jumbo lot or in market lot.
2.
Attach old certificates with the letter.
3.
Send the same (preferably through registered post) to the Share Transfer Department of the Company at the
address given above.
20. Shareholders’ Correspondence
The Company has attended to all the investors’ grievances/ queries/ information requests except for the cases where
we are constrained because of some pending legal proceeding or court/statutory orders.
We endeavour to reply all letters received from the shareholders within a period of 5 working days.
All correspondence may please be addressed to the Share Transfer Department at the address given above. In case
any shareholder is not satisfied with the response or do not get any response within reasonable period, they shall
approach the Investor Relation Officer or the Compliance Officer at the address given above.
21. Stock Market Data Relating to Shares Listed in India
a.
The company’s share is part of the ‘A’ group of securities at BSE and is part of the 30 share Sensitive Index
(Sensex). On NSE it is part of CNX Nifty Index.
b.
Monthly high and low quotations as well as the volume of shares traded at Mumbai and National Stock Exchanges
for 2001-2002 are:
BSE
Month
36
NSE
High
Low
Volume of
High
Low
Volume of
(Rs.)
(Rs.)
Share
Traded
(Rs.)
(Rs.)
Shares Traded
April 2001
100.55
77.50
73,261,662
144.50
71.05
92,057,755
May 2001
June 2001
July 2001
August 2001
136.25
126.90
124.90
122.25
94.80
97.95
68.00
80.10
108,513,515
79,899,000
72,925,956
130,619,419
149.75
136.90
130.00
122.50
88.00
98.55
68.25
80.10
147,508,886
111,611,000
86,633,705
216,488,000
September 2001
October 2001
November 2001
December 2001
121.65
98.90
144.90
156.00
78.00
70.75
95.20
95.25
100,445,629
84,705,988
96,693,283
134,610,838
139.85
99.00
144.90
154.90
77.90
69.65
95.50
95.15
151,938,000
120,881,000
145,804,000
209,316,306
January 2002
February 2002
March 2002
138.40
165.50
182.35
104.30
123.00
138.40
117,124,535
91,532,127
102,725,722
138.40
164.90
182.50
104.50
123.05
138.10
171,133,332
160,353,369
217,736,235
22. Distribution of shareholding as on March 31, 2002 :
No. of Shares
Number
% of Holders
Number
% of Shares
188894
99.56
24525452
5.95
5001 – 10000
10001 – 20000
20001 – 30000
30001 – 40000
376
166
66
26
0.20
0.09
0.03
0.01
2785689
2354304
1628648
930290
0.68
0.57
0.39
0.23
40001 – 50000
50001 – 100000
100001 and Above
27
44
127
0.01
0.02
0.07
1271227
3331777
375677625
0.31
0.81
91.07
189726
100.00
412505012
100.00
Total
23. Categories of shareholders as on March 31, 2002 :
Category
March 31, 2002
March 31, 2001
% of shareholding
No. of shares held
% of shareholding
No. of Shares held
Promoters
52.78
217,738,175
59.61
245,904,000
Individuals
Domestic companies
FIs, Mutual Funds and Banks
FIIs, OCBs & NRI
6.51
6.14
7.11
27.46
26,853,092
25,327,413
29,346,462
113,239,870
8.86
6.19
6.77
18.57
36,552,409*
25,518,367
27,921,068
76,609,168
100
412,505,012
100
412,505,012
Total
37
Report
Upto – 5000
Share Holders
Annual
No. of Equity Shares
2001-2002
ZEE TELEFILMS LIMITED
Management Discussion and Analysis
Investors are cautioned that this discussion contains forward
development, creation of television programs; production and
looking statements that involve risks and uncertainties
distribution of films and music publishing. The company also
including, but not limited to, risks inherent in the Company’s
acquires films for distribution across multiple platforms. Zee
growth strategy, acquisition plans, dependence on certain
provides TV programming to 7 national and 6 regional
businesses, dependence on availability of qualified and
language channels.
trained manpower and other factors. The following
discussion and analysis should be read in conjunction with
the Company’s financial statements included herein and
the notes thereto.
The company in June 2001 financed, produced &
distributed Hindi feature film, “Gadar – Ek Prem Katha”,
which became the top grosser of the year 2001. Zee also
distributed two feature films “Tere Liye” and “Bawandar”
OVERVIEW
in financial year 2002.
Zee Telefilms Limited is India’s first and largest vertically
Broadcasting – Domestic Operations
integrated media & entertainment company with its operations
spread across more than 10 countries worldwide including,
•
Zee Network broadcasts 13 channels in the Indian
subcontinent and several channels worldwide and
India, the US, UK, Europe, Africa, Caribbean, Canada,
reaches more than 225 million households across 80
Australia, Middle East and a few South Asian countries.
countries.
The Company was formed in 1982. It had its IPO in 1993
and is currently listed at the Ahmedabad, Kolkata, Delhi,
•
information through national, regional and English
Mumbai and National Stock Exchanges in India. From fiscal
language segments.
1995 through fiscal 2002, total revenues increased from
Rs. 75.3 crores to Rs. 1,155.5 crores. This includes both
It is spread across all genres of entertainment and
•
With an objective to make “Alpha” as a brand name for
organic and inorganic growth. Zee employs around 1,800
all regional channels of the network, Zee is planning to
people.
re-launch its South Indian channels “Bharathi” and
“Kaveri” as “Alpha Tamil” and “Alpha Kannada”
The operations of Zee can be classified into three main
respectively. Also, the company is planning to launch
areas of businesses :
two new regional language channels for Telugu & Urdu
•
Content and Broadcasting, which includes production
speaking audience.
and aggregation of TV software, film production,
acquisition and distribution, music publishing and
•
Recently the Government of India has opened the
broadcasting sector for private players and through an
syndication.
amendment in broadcast bill it has allowed private
•
Access, which consists of MSO operations, distribution
players to uplink channels from India. Zee has been
of satellite channels and Internet over cable.
•
granted permission to uplink 10 channels from India
Education business, which consists of distance learning
through a teleport of Essel Shyam Communications
programs and ground learning centers.
Limited.
Content
Broadcasting – International Operations
Content business comprises of various entertainment and
•
information software related activities including ideation,
38
Zee has broadcasting operations in USA, Canada, the
Caribbean, UK, Europe, Africa, Middle East and other
4-channel package, Zee TV, Zee Cinema, Zee Music
a learning network and delivers a variety of education
and Alpha ETC Punjabi. It has around 125,000
content and solutions for a range of careers and
subscribers both on cable and DTH.
vocations. ZILS delivers learning solutions to various
The US operations were started in 1998 and Zee has
two channels Zee TV and Zee Gold with a combined
subscriber base of around 135,000.
segments of society through various mediums namely
ground learning centres, multimedia, internet and VSATbased interactive platforms. ZILS today has about 280
learning centers across the country.
•
Zee’s African operations have been steady with the
subscriber base of around 35,000 with one channel,
Zee TV. The DTH operator Multichoice distributes Zee
FINANCIAL CONDITION
1.
Share Capital
TV within its South East Asian bouquet.
•
ZTL - The authorized share capital of the company is
Zee broadcasts Zee TV and Alpha Punjabi in Canada.
Rs. 75 crores divided into 50 crores equity shares of
The company recently started a separate beam of Zee
Rs. 1 each and 25 lacs cumulative redeemable
TV for Middle East and Pakistan markets. It gives an
preference shares of Rs. 100 each.
opportunity to leverage better advertising and pay
revenues in these markets.
At present, the paid-up Equity share capital of the
company is Rs. 41.25 crores, consisting of 41.25 crores
Access
Equity shares of Re. 1 each. During the year, there has
Access business of Zee operates across multiple
been no increase in the number of equity shares.
services such as cable distribution of C&S channels
through franchisees/local cable operators, Internet over
2.
Cable (IOC) and distribution of Zee Network pay
Reserves and Surplus
During the year there has been no addition to the share
channels to the operators. Presently, Siticable, a
premium account.
subsidiary company, is an MSO, which reaches more
than 6.5 million homes in India.
•
3.
Secured Loans
It operates two cable channels namely, Siti Cinema,
ZTL - The secured loans have gone up from Rs. 113.9
which is a Hindi Movie channel and Siti Channel, which
crores to Rs. 244.1 crores. This was primarily due a
is a local channel.
Term Loan taken from an Indian financial institution.
•
First ISP to start broadband Internet over Cable.
•
Zee Turner, a joint venture between Zee and Turner
This term loan was taken with a view to convert
unsecured short-term loans into a long-term loan and
International India Ltd., distributes 16-channel bouquet
across the sub-continent. Presently, the JV has more
pay off loans at the subsidiary level. The working capital
finance from banks has increased from Rs. 26.0 crores
to Rs. 57.3 crores.
than 4.0 million paid subscribers all across the country.
Consolidated - Secured loans amounted to Rs. 582.1
Education
crores, which include term loans of Rs. 512.3 crores
Zee Education was formed as a division of Zee in 1994
from financial institutions and banks. The working capital
to focus on IT education. Zee Interactive Learning
finance from banks amounts to Rs. 61.8 crores.
39
2001-2002
Systems Limited (“ZILS”) was formed in 1999 to create
Report
•
parts of South Asia. In UK and Europe Zee offers a
Annual
ZEE TELEFILMS LIMITED
4.
Unsecured Loans
6.
ZTL - The unsecured loans have gone down from
Investments
ZTL – Zee has total investment of Rs. 3,536.9 crores
Rs. 209.7 crores to Rs. 154.3 crores as a result of
including investments in subsidiaries, and stocks of other
the above restructuring of the loan portfolio. The
quoted and unquoted companies. Out of these
company took a loan of Rs. 79.73 crores from its
investments a consideration to the extent of Rs. 2,698.3
subsidiary, Siticable, which has been paid back in
crores is discharged by way of issue of Company’s
the fiscal 2002.
equity shares under share swap.
Consolidated - Unsecured loans as of March 31, 2002,
Consolidated – After netting out inter-company
stood at Rs. 266.9 crores, which include Rs. 109.5
investments, Zee has investments worth Rs. 12.5 crores
crores received from related party in an overseas
representing investments into various companies such
subsidiary of the company. These funds were borrowed
as Karma Networks, Master Ads, Aplab Ltd., Dakshin
to meet working capital mismatch of the company during
Communications, etc.
the earlier years.
5.
Fixed Assets
ZTL – The increase in the net fixed assets of the
company was Rs. 32.7 crores from Rs. 82.6 to
Rs. 115.3 crores. This increase is largely attributed to
7.
Net Current Assets
ZTL – The Net Current Assets have increased from
Rs. 708.6 crores to Rs. 787.3 crores primarily due to
an increase in the trade receivables.
the purchase of decoder boxes for DTO operations of
the company and construction of the uplink centre, which
Inventory has increased by Rs. 16.7 crores largely on
were part of CWIP in the previous year. Capital work in
account of acquisition of movies and programming software
progress amounted to Rs. 10.3 crores.
for Zee TV and other regional language channels.
Consolidated – The Company has net fixed assets of
Rs. 3,391.3 crores. A major component of the asset is
intangibles amounting to Rs. 3,172.6 crores arising from
the goodwill created due to the acquisition of ZMWL,
Siticable, ATL and Patco. Rs. 74 crores is utilised in
Siticable operations, of which around Rs. 27 crores are
in cable assets and the balance in head-end equipments
and on the line. Rs. 115 crores is in ZTL. Capital work
in progress amounted to Rs. 148.5 crores, the majority
Sundry debtors have increased from Rs. 171.0 crores
to Rs. 274.3 crores. High debtor position of the company
is largely due to outstanding receivables from the
subsidiaries on account of programme purchases and
commission receivables, which is on account of general
delay in realization of advertising sales of subsidiary
companies. The debtor outstanding days stands at 247
days and 162 days as on March 31, 2002 and 2001
respectively.
of which is in Siticable operations amounting to
Rs. 138.2 crores. The CWIP in Siticable relates to the
Cash and Bank balance has reduced to Rs. 126.9 crores
HFC project, IOC project and dial-up assets.
as on March 31, 2002 from Rs. 225.4 crores at the end
Commissioning of the HFC project in Bangalore has
of the previous year. This is due to acquisition of movies,
started on a modular basis and approximately Rs. 50
programs and advance given for acquisition of stake
crores would be capitalised.
Padmalaya Telefilms Limited during the year.
40
which include advances to Buddha Films for Rs. 171.6
crores largely comprising of current liabilities of
crores and advances of Rs. 58 crores relating to
Rs. 267.2 crores, including sundry creditors of Rs. 236.9
acquisition of Padmalaya Telefilms Limited.
crores. High receivable cycle has translated in stretched
payment schedules. Provisions as of March 31, 2002
Current Liabilities and Provisions have increased to
amounts to Rs. 86.2 crores, which mainly comprises of
Rs. 246.2 crores from Rs. 229.3 crores. In the fiscal
provision for tax (net of advances), proposed dividend
2002, trade advances and deposits received during the
and future retirement benefits.
year have increased to Rs. 63.5 crores from Rs. 11.2
crores. Provisions during the year include Provision for
8.
Tax (net of advances) for Rs. 22.7 crores.
Miscellaneous Expenditure
ZTL – During the year, the company has accounted for
Consolidated – Net current assets of the company as
Rs. 20.6 crores as deferred revenue expenditure which
at year-end stands at Rs. 1,245.6 crores. Inventory of
mainly consists of loan prepayment charges, upfront
the company includes programme software, films, music
fees, DTO expenses and other deferred revenue
cassettes and CDs and amounted to Rs. 260.1 crores.
expenditure having enduring future benefit and
amortised over a period of 3 to 5 years.
Sundry debtors at Rs. 628.9 crores accounts for more
than 39% of total current assets, which amounts to 213
Consolidated – The miscellaneous expenditures
days of total sales & services. The acumulated
amounting to Rs. 42.6 crores includes Rs. 41.5 crores
provisions for doubtful debts is amounting to Rs. 65.8
as deferred revenue expenditure which is based on
crores. The receivables position of the company is high
managements estimate of its enduring future benefit
largely due to higher outstanding advertising sales
and is amortised over a period of 3 to 5 years.
receivables. The primary reason was that company had
entered into several deals in the beginning of financial
RESULTS OF OPERATIONS
year 2002, which were based on guaranteed ratings.
1.
Revenues
These deals took longer time to get fully consumed and
the advertisers were negotiating to pay the outstanding
ZTL - During the year, total revenues of the company
amount only after all the guarantees were reconciled
increased by 10.9% to Rs. 483.2 crores from Rs. 435.7
and consumed. The reconciliation of accounts delayed
crores. The company witnessed a change in revenue
the process of collection. However, now with all the
profile towards the end of fiscal 2002, as it started
major accounts being reconciled, the company is
broadcasting/uplinking the Alpha branded channels from
expecting to realize the outstanding amounts and bring
India. Revenues include a marginal increase in sales to
back debtors ageing to the normal levels.
Rs. 319.3 crores and an increase of 7.5% in the service
revenues including advertising commission.
Cash and Bank balance has been Rs. 188.6 crores as on
March 31, 2002. Loans and Advances accounts for 32.6%
Sales of the company also include revenues from theatrical
of total current assets translating to Rs. 521.4 crores. Out
distribution of films, “Gadar-Ek Prem Katha”, “Tere Liye”
of this Buddha Films accounts for Rs. 171.6 crores.
and “Bawandar” and music publishing business of the
The balance was deployed in treasury operations.
company. Other income, including interest income on various
41
2001-2002
Current liabilities and Provisions amounts to Rs. 353.4
Report
Loans and Advances increased to Rs. 497.1 crores
Annual
ZEE TELEFILMS LIMITED
treasury operations increased by more than 50% to
Other Revenues account for 8.6% of the total revenues,
Rs. 76.7 crores. Sales of ZTL also include a non-recurring
which include revenues from theatrical distribution of
sale component arising from the sales of lottery terminals
films, “Gadar-Ek Prem Katha”, “Tere Liye” and
to Playwin Infravest, amounting to Rs. 20.1 crores.
“Bawandar”, music publishing, education business, nonrecurring sales of lottery terminals and equipment lease
Consolidated - Total Revenues of the company during
rental charges. Education business was affected due to
the year were Rs. 1,155.5 crores. Consolidated revenue
downturn in IT education business.
streams (Sales and Services) of Zee Telefilms Limited
Other Income amounting to Rs. 79.2 crores includes
comprise of advertising; subscriptions and others.
interest and other income from funds invested in various
Advertising revenues are generated mostly from
broadcasting operations worldwide. During the financial
treasury operations.
2.
Expenditure
year ended March 31, 2002, advertising revenues
accounted for 57.2% of revenues to Rs. 660.5 crores.
ZTL - Total expenses increased by 14.3% to Rs. 283.6
Bulk of the advertising revenues were generated from
crores from Rs. 248.1 crores. These expenses include
the Asia pacific region.
programming, transmission and other direct costs.
Subscription Revenues are generated both from domestic
and international operations. Zee Network channels are
distributed across 80 countries through DTH and cable
platforms. In domestic and other South-east Asian
markets, the Pay channel bouquet is distributed and
marketed by Zee Turner Ltd., which is joint venture
Cost of goods sold, primarily costs of programming, music
publishing and acquisition/ production of films, has
dropped by 5.1% to Rs. 170.9 crores from
Rs. 180.1 crores last year. The costs of goods also include
a non-recurring cost of lottery terminals worth Rs. 19.7
crores purchased on behalf of Playwin Infravest.
between Zee and Turner International Ltd., an AOL Time
During the year, personnel expenses have increased
Warner company. Siticable, the largest MSO in India and
by 29.9% to Rs. 32.6 crores from Rs. 25.1 crores in the
a subsidiary of Zee, earns subscription revenues from
previous year, mainly due to the increase in
its franchisees and local cable operators.
compensation and benefits to employees.
For the year ended March 31 2002, the company
recorded subscription revenues of Rs. 316.9 crores.
The company’s pay-strategy in the domestic market,
over a period of last two years has shown remarkable
Selling, General & Administrative Expenses consist
primarily of expenses relating to travel, marketing,
telecommunications, management, administration and
rentals.
progress resulting in high growth in subscription
Consolidated – Total expenses of the company
revenues. Zee has been successful in deeper
amounted to Rs. 772.0 crores, which includes
penetration in the US markets, which has resulted in
programming, transmission, SMS & subscription and
greater capitalization of the potential. In UK, Zee has
other direct and indirect costs. The company had
consolidated its position in the market after turning
undertaken effective cost control measures to maintain
digital. Hence, subscription revenues in UK and other
margins. Zee also witnessed savings in the transmission
European markets have also shown promising trends
costs because of migration from analog to digital
in the current fiscal.
platform.
42
Finance expense increased from Rs. 21.1 crores to
programming and other raw materials amounting to
Rs. 58.5 crores.
Rs. 205.7 crores, transmission cost of Rs. 68.6 crores
Consolidated - On the consolidated basis,
and subscription fees and SMS costs mainly from
depreciation provided during fiscal 2002 was Rs. 21.5
international markets amounting to Rs. 104.7 crores.
crores and finance expenses of the company amount
The Company during the year has incurred personnel
loss of Rs. 3.2 crores, interest expense of Rs. 62.8
Selling, General & Administrative Expenses: During
crores and Rs. 14.8 crores towards discounting and
the financial year, the company incurred Rs. 250.7
financing activities.
crores as other operating expenses. These expenses
3.
5.
Profit before Tax
total non-cash write-off/amortisation amounting to
ZTL - The profit before tax during fiscal 2002 was
Rs. 40.4 crores.
Rs. 134.4 crores, which registered a drop of 17% as
Earnings before Interest, Tax, Depreciation and
compared to fiscal 2001 due to higher interest burden
Amortisation (EBITDA)
as mentioned above.
ZTL - During the financial year 2002, Operating profits
Consolidated - Consolidated, income before tax during
have registered a growth of 6.4% to Rs. 199.7 crores
fiscal 2002 was Rs. 281.1 crores. The company
as compared to Rs. 187.7 crores in the previous year.
achieved PBT margins of 24.3% for the fiscal under
Operating margins, in the fiscal 2002 decreased to
discussion.
41.3% as compared to 43.1% in the fiscal 2001. The
primary reason was shifting of uplinking of regional
4.
6.
Provision for Tax
channels to India, which has resulted in the losses of
ZTL – The provision for income tax was Rs. 37.1 crores
regional channels now being booked under ZTL.
in fiscal 2002 as compared to Rs. 23.8 crores in fiscal
Consolidated – During the financial year 2002,
2001. The increase is largely attributed to the provision
consolidated operating profits of the company were Rs.
of Rs. 5.6 crores as deferred tax. During the year, effective
383.4 crores. The company achieved operating margins
tax rate on the current year provision increased to 27.6%
of 33.2% in the fiscal 2002. This was largely due to
as compared to 14.7% in fiscal 2001. The company
effective cost control at operating levels and decrease
incurred higher tax provision due to reduction in
in transmission expenses.
percentage of benefit available for deduction u/s 80HHF.
Depreciation and Interest
Consolidated – On a consolidated basis, the company
ZTL - Depreciation provided during fiscal 2002 was
has provided for Rs. 88.8 crores as tax in fiscal 2002.
Rs. 6.7 crores, an increase of 55.8% over the
Also, the net deferred tax benefit on account of timing
depreciation of Rs. 4.3 crores for fiscal 2001. The
difference is Rs. 2.3 crores. Company’s effective tax
company witnessed a high growth in the finance cost
rate after all provisions is 30.8%. Current tax is
for the fiscal 2002 mainly due to increase of Rs. 130.1
calculated on the results of individual companies in
crores in term loans to Rs. 244 crores. Total loans have
accordance with local accounting practices and tax
gone up from Rs. 323.6 crores to Rs. 398.4 crores.
regulations.
43
Annual
to Rs. 80.8 crores, which include foreign exchange
expenses amounting to Rs. 77.8 crores.
are 32.5% of the total expenses. This also includes
2001-2002
Operting costs mainly constitutes the cost of
Report
ZEE TELEFILMS LIMITED
7.
operations makes it very difficult for the company to
Net Income
hedge cross currency exchange rate fluctuations.
ZTL - During fiscal 2002, before prior period adjustments,
net income of the company was Rs. 97.3 crores, which
3.
Equity Risk
shows a drop by 29.8% as compared to the previous
The Company is exposed to market risk as it relates to
fiscal. As a percentage of total revenue, net income
changes in market value of its investments. The
was 20.1% during the year, lower than 31.8% achieved
Company invests in equity instruments of various public
during last year.
and private companies for operational and strategic
After adjustments for prior period items and provision
business purposes, many of which are media and
for tax for earlier years for Rs. 3.2 crores and Rs. 14.3
technology companies. These securities are subject to
crores respectively, net income of the company was
significant fluctuations in fair market value due to
Rs. 79.8 crores.
volatility of the stock market and the industries in which
the companies operate.
Consolidated - During the fiscal 2002, consolidated
net profit after tax of the company for fiscal 2002 was
4.
Rs. 194.6 crores. Net-profit margin achieved by the
Zee has experienced significant income growth in recent
company is 16.8%.
periods. The Company’s operating income in fiscal 2002
has grown by 29.8% over fiscal 2001. Future growth at
After adjustments for prior period items and provision
Zee will place significant demands on its management
for tax for earlier years for Rs. 2.2 crores and Rs. 14.5
and other resources. Continued growth increases the
crores respectively, consolidated net income after tax
challenges involved in recruiting and retaining skilled
and prior period adjustments was Rs. 177.9 crores.
personnel. The Company’s ability to manage growth
Outlook : Issues and Risks
1.
Management of growth
effectively would have a material effect on the quality of
its business prospects, and its results and financial
Interest Rate Risk
condition.
Zee has entered into variable-rate debt during previous
years in its subsidiaries. Any increase or decrease in the
5.
Competition
level of interest rates would, respectively increase or
At present, the broadcasting industry targeting Indian
decrease the company’s annual interest expense. Also,
footprint is dependent on advertising revenue as its
the company through its various subsidiaries entered into
primary source of revenue. The advertising revenue
fixed rate debt during previous years. Therefore, any
accruing to a channel in turn depends on the popularity
rate increase or decrease would accordingly affect the
of the channel among the viewers. The company has to
fair value of the outstanding debt amount.
create programmes as per the viewers’ tastes to
preserve and increase viewership and prevent potential
2.
Foreign Currency Risk
migration to other channels. Competition includes
Zee deals in various currencies across several countries
international firms as well as national, regional and local
at various stages of operations. Any fluctuation in
firms. Many of the company’s competitors have
currency rates could affect the company adversely in
significantly greater financial resources, and the
cross currency remittances and receivables. Due to their
company must ensure cost effective operations to
nature and unanticipated cash flow at various levels of
compete successfully with them.
44
b)
on first sale and 10% expensed on its subsequent sale.
The businesses of the company come under the purview
of the information and broadcasting ministry of the
Programs having re-exploitable value are expensed 90%
c)
Government of India. In one of its move, the Government
In case of the film produced / acquired by the company,
cost of each right is expensed fully on first sale.
is proposing Conditional Access System for the Indian
Cable households. This proposal could have a significant
d)
impact on the company’s operations depending on the
Other Programs, Film Rights and where limited telecast
rights are sold are valued at unamortized cost.
exact nature of proposals and the guidelines for
implementation.
7.
Technology
Content – Broadcasting: Television programs / films, acquired
or produced and used as a broadcaster for telecasting on its
owned Television channels:
We live in a dynamic technological environment and
Zee’s business is highly technology intensive, including
a)
transponders on satellites, various uplinking and
Cost of Programs like News, Current Affairs, Chat shows,
Events etc. are fully expensed on first telecast.
broadcasting equipments, edit suites, digital decoders
and conditional access systems. Going forward the
b)
The cost of the program rights including unamortized
company would continue to rely on various technological
cost of Content from Trade used for broadcasting are
advancements in order that its operations maintain their
amortized on straight line basis from its first telecast,
competitive edge.
taking its estimated economic useful life of 36 months
or license period whichever is shorter.
CRITICAL ACCOUNTING POLICIES
Revenue recognition
c)
The cost of telecast rights of film is amortized on straightline basis taking its estimated economic useful life of
We derive our revenues primarily from two sources (1)
60 months or license period whichever is shorter, from
Advertising revenues (2) Subscription revenues. Advertising
its first telecast.
revenue is recognized (gross of agency commission) when the
related advertisement or commercial appears before the public
i.e. on telecast. Subscription revenue is recognized on a time
basis on the provision of television broadcasting to subscribers.
Content - Audio Rights / Recorded Cassettes, Compact Discs
etc. Copyrights of Audio titles acquired and recorded
cassettes, Compact Discs produced for sale:
Programming cost
a)
Film based rights: 50% of cost expensed on audio
The programming cost is mainly of four kinds (1)
release and balance after six months of Film release or
entertainment related television programming (2) news and
when cost is recouped, whichever is earlier.
event based television programming and (3) films with
multiple rights (4) films with limited telecast rights
b)
cost is recouped, whichever is earlier.
produced by the company for sale :
a)
Cost of Programs like News, Current Affairs, Chat shows,
Events etc. are fully expensed on first sale.
Non-Film based rights: 50% of cost expensed on audio
release and balance after six months of release or when
Content – Trade: Television programs / films etc. acquired or
c)
2001-2002
Regulatory issues impacting the industry
Recorded Audio Cassettes, Compact Discs: Cost means
cost of production excluding cost of Audio Rights.
45
Annual
6.
Report
ZEE TELEFILMS LIMITED
PRINCIPLES OF CONSOLIDATION AND APPLICATION OF
EQUITY METHOD OF ACCOUNTING
Foreign Currency Translation and Exchange Rates :
Assets and liability accounts of foreign subsidiaries are
translated into Indian Rupees at year-end rates and all
Basis of consolidation
income and expenses are translated at yearly average rate
The consolidation of the financial statements of the parent
company and its subsidiaries is done on line-by-line basis
by adding together like items of assets, liabilities, income
except for inventories, which are converted at opening/closing
rates as the case may be. Off Balance Sheet items are
translated into Indian Rupees at year-end rates.
and expenses. All significant intra-group balances and intragroup transactions and unrealized profits are eliminated on
Accounting for income taxes
consolidation.
Current income tax :
Minority interest in subsidiaries represents minority
shareholder’s proportionate share of the net assets and the
Current income tax is calculated on the results of individual
companies in accordance with local accounting practices
net income of Zee’s majority owned subsidiaries.
and tax regulations.
Accounting estimates
As part of the process of preparing our consolidated financial
The preparation of the financial statements in accordance
statements we are required to estimate our income taxes in
with the Generally Accepted Accounting Principles requires
each of the jurisdiction in which we operate. We are subject
that the management makes estimates and assumptions
to tax assessment in each of the jurisdictions. A tax
that affect the reported amounts of assets and liabilities,
assessment can involve complex issues, which can be
disclosure of contingent liabilities as at the date of the
resolved over extended period of time.
financial statements and the reported amount of revenue
and expenses of the year. Examples of such estimates
Deferred taxes :
include estimate of provision for diminution in the value of
Deferred tax assets and liabilities are recognized using the
Investments, provision for doubtful debts, useful life of
asset and liability approach for the expected future tax
fixed assets etc. Actual results could differ from those
consequences of temporary differences between the carrying
estimates.
amounts and the tax bases of assets and liabilities. Unutilized
Foreign Currency
tax losses will only be utilized where there is a likelihood of
them being able to be offset against tax in the future. For
Foreign Currency Transactions :
the calculation of deferred tax, the local tax rates likely to be
The functional currency of each entity in the group is its
in force are used for the respective individual company where
respective local currency. Transactions
deferred tax accounting is adopted.
in
foreign
currencies are recorded in functional currency at the rate of
exchange prevailing at the date of the transaction. Monetary
Others
assets and liabilities in foreign currencies are translated into
All other significant accounting policies such as revenue
functional currency at the rates of exchange prevailing at
recognition, inventories, fixed assets, depreciation, leases
the Balance Sheet date and gain or loss is recognized in the
and retirement benefits etc. are given in detail in the notes
Profit and Loss Account.
to accounts of consolidated financial statement.
46
1.
We have audited the attached Balance Sheet of Zee
Telefilms Limited as at 31st March, 2002 and also the
Profit and Loss Account of the Company for the year
ended on that date annexed thereto. These financial
statements are the responsibility of the company’s
management. Our responsibility is to express our opinion
b)
so far as appears from our examination of those
books;
c)
We conducted our audit in accordance with accounting
standards generally accepted in India. These standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant estimates
d)
As required by Manufacturing and Other Companies
(Auditors’ Report) Order, 1988 issued by the Company
Law Board in terms of Section 227(4A) of the
e)
On the basis of written representations received
from the directors and taken on record by the
Board, we report that none of the directors are
disqualified as on 31st March 2002 for being
appointed as a director in terms of clause (g) of
sub section (1) of the Section 274 of the
Companies Act, 1956.
f)
Companies Act, 1956, and on the basis of such checks
as we considered appropriate, and according to the
information and explanations given to us during the
course of audit, we annex hereto a statement on the
In our opinion and to the best of our information
and according to the explanations given to us,
the said accounts read together with significant
accounting policies and notes to accounts as per
Schedule 17, gives the information required by
the Companies Act, 1956, in the manner so
required, give a true and fair view in conformity
matters specified in paragraphs 4 and 5 of the said
order.
4.
In our opinion, the Balance Sheet and Profit and
Loss Account complies with the accounting
standards referred to in Section 211(3C) of the
Companies Act, 1956 to the extent applicable to
the Company;
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.
The Balance Sheet and Profit and Loss Account
dealt with by this report are in agreement with
the books of account;
on these financial statements based on our audit.
2.
In our opinion, proper books of account as
required by law have been kept by the company,
with the accounting principles generally accepted
in India;
We draw reference to Note 2 of Schedule 17 regarding
effect of amalgamation w.e.f. 1st April, 2001 on reserves
and profits of the company pending approval of scheme
of amalgamation of four of its subsidiary companies;
i)
In the case of the Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2002; and
and
Note 6(f) of Schedule 17 regarding loan of
ii)
Rs./Thousands 1,715,681 (1,023,605) due from Buddha
Films Limited, considered recoverable on the basis of
additional guarantee given by promoter of the Company
and representation from the management, the loan is
considered good and recoverable.
5.
Further to our comments in the annexure referred to in
paragraph (3) above:
a)
We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit;
In the case of the Profit and Loss Account,
of the Profit for the year ended on that date.
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Mumbai
24th September, 2002
47
2001-2002
to the Members of ZEE TELEFILMS LIMITED
Report
Auditors’ Report
Annual
ZEE TELEFILMS LIMITED
Annexture to Auditors’ Report
Annexure referred to in paragraph (3) of Auditors’ Report to the members of Zee Telefilms Limited on the
Accounts for the year ended 31st March, 2002.
1.
The Company has maintained the proper records
Companies Act, 1956. In our opinion, the rate of interest
showing full particulars including quantitative details and
and other terms and conditions of the said loan are
situation of its fixed assets. The fixed assets of the
prima facie not prejudicial to the interests of the company.
company have been physically verified by the
In terms of sub-section (6) of Section 370 of the
management during the year and as explained to us, no
Companies Act, 1956, the provisions of the section
material discrepancies were noticed on such verification.
are not applicable to the company effective from
The assets (electronic devices) given on operating lease
31st October, 1998.
to subscribers of pay television channels are verified
with reference to certificate of the distribution agent.
9.
The Company has granted loans to parties including
employees who are repaying the principal as stipulated
2.
None of the fixed assets have been revalued during
or rescheduled and are regular in the payment of interest
the year.
3.
wherever applicable except a loan of Rs./Thousands
As explained to us, stock of raw stocks (tapes,
1,715,681 including interest (net of partial repayment
cassettes etc.), films / programs (copyright verified with
and interest received during the year), have been
reference to title documents / agreements) at all
rescheduled and interest free loans of Rs./Thousands
locations have been physically verified by the
526,023 (98,324) to its subsidiary companies for which
management during the year except stocks lying with
there are no stipulations as to repayments.
third parties in respect of which confirmations have
been obtained in most cases. In our opinion, the
10.
In our opinion, there are adequate internal control
procedures commensurate with the size of the company
frequency of such verification is reasonable.
and nature of its business for the purchase of goods,
4.
5.
In our opinion, the procedure of physical verification of
television programs, films/program rights, plant and
stocks followed by the management is reasonable and
machinery, equipment, other assets and for the sale of
adequate in relation to the size of the company and
goods, programs, films/program rights, advertisements,
nature of its business.
subscription etc.
Discrepancies noticed on physical verification of stocks
11.
as compared to books records are not significant and
the transactions of sale of goods made in pursuance
have been properly dealt with in the books of account.
6.
7.
maintained under Section 301 of the Companies Act,
and in accordance with the normally accepted
1956 and aggregating during the year to Rs./Thousand
accounting principles and is on the same basis as in
50 or more in value in respect of each party are
the preceding year.
explained to have been done at reasonable prices.
The Company had not taken loan from any firm,
However,
company or party listed in the register maintained under
reasonableness of price charged could not be
Section 301 of the Companies Act, 1956. In terms of
ascertained. There are no transactions of purchase of
sub-section (6) of Section 370 of the Companies Act,
goods and materials and sale of services.
to the company effective from 31st October, 1998.
48
of the contract or arrangements entered in the register
In our opinion, the valuation of stocks is fair and proper
1956, the provisions of the section are not applicable
8.
According to information and explanations given to us,
12.
in
the
absence
of
comparisons,
As explained to us, the company has a regular system
of determining unserviceable or damaged goods and
The Company has granted loans to companies listed in
adequate provision have been made in the accounts
the register maintained under Section 301 of the
for the loss arising on items so determined.
14.
Account, other than those payable under contractual
deposits from the public.
obligation or in accordance with generally accepted
not generate any realizable scrap or by-product.
15.
business practices.
As explained to us, the activities of the company do
20.
the meaning of clause (O) of sub-section (1) of Section
In our opinion, the Company has adequate internal
3 of the Sick Industrial Companies (Special Provisions)
audit system commensurate with the size of the
Act, 1985.
company and nature of its business.
16.
We are informed that the central government has not
21.
channels, production services etc. and are such that it
under Section 209 (1) (d) of the Companies Act, 1956
does not involve receipts, issues and consumption of
in respect of company’s products.
materials and stores, and hence the question of
According to the records of the company the
allocating material and man-hours to relative job does
Contribution to Provident Fund and Employees’ State
not arise.
Insurance dues have been regularly deposited with the
appropriate authorities.
18.
The Company‘s service activities mainly include
broadcasting services, space selling on television
prescribed the maintenance of cost accounting records
17.
The Company is not a sick industrial company within
According to the information and explanations given to
22.
In respect of trading activities of the company damaged
goods have been determined and adequate provision
has been made in the accounts.
us, there are no undisputed amounts payable in respect
of Income Tax, Sales Tax, Wealth Tax, Customs Duty
19.
and Excise Duty which have remained outstanding as
Mohan Bhandari
at 31st March, 2002 for a period of more than six
Partner
months from the date they became payable.
For MGB & Co
According to the information and explanations given
Chartered Accountants
to us, no personal expenses of directors and
Mumbai
employees have been charged to Profit and Loss
24th September, 2002
49
2001-2002
During the year the company has not accepted any
Report
13.
Annual
ZEE TELEFILMS LIMITED
Balance Sheet
as at March 31,
(Rs. ’000)
Schedule
2002
2001
412,438
40,139,676
412,438
39,683,664
40,552,114
40,096,102
171,352
—
2,440,779
1,543,450
1,139,239
2,097,260
3,984,229
3,236,499
44,707,696
43,332,601
1,352,412
199,112
949,439
122,938
1,153,300
103,007
826,501
275,190
1,256,307
1,101,691
35,368,806
35,138,722
1,352,207
2,742,745
1,269,522
4,970,748
1,184,970
1,710,064
2,254,327
4,228,996
10,335,222
9,378,357
1,974,023
488,075
1,928,544
364,123
2,462,099
2,292,667
7,873,123
7,085,690
209,459
6,498
44,707,696
43,332,601
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Reserves and Surplus
1
2
Deferred Tax Balances [Refer Note 4(d)]
Loan Funds
Secured Loans
Unsecured Loans
3
4
TOTAL
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less : Depreciation up-to-date
5
Net Block
Capital Work-in-progress
Investments
6
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
7
Less :
Current Liabilities and Provisions
Current Liabilities
Provisions
8
9
Net Current Assets
Miscellaneous Expenditure
(to the extent not written off or adjusted)
10
TOTAL
Significant Accounting Policies and Notes to Accounts
17
As per our attached report of even date
For and on behalf of the Board
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
Mumbai
24th September, 2002
50
(Rs. ’000)
Schedule
2002
2001
4,064,914
767,234
3,846,619
510,582
4,832,148
4,357,201
21,454
1,919,869
325,990
568,229
—
1,805,024
251,077
424,425
2,835,542
2,480,526
1,996,606
585,175
67,383
1,876,675
211,413
42,696
1,344,048
1,622,566
Less – Provision for Taxation
[Includes Rs./Thousand 250 (250) for Wealth tax]
– Current
– Deferred
315,250
56,180
237,700
—
Profit After Tax for the year
Less – Prior Period Adjustments (Net)
Less – Provision for Taxation earlier years [Refer Note 4 (a)]
972,618
32,204
142,500
1,384,866
3,074
569,538
Net Profit After Tax
Add – Excess provision - Dividend (earlier year)
Add – Balance brought forward
797,914
149
3,217,865
812,254
—
2,955,631
Amount Available For Appropriation
4,015,928
3,767,885
226,878
—
300,000
226,878
23,142
300,000
3,489,050
3,217,865
4,015,928
3,767,885
1.93
1.97
INCOME
Sales and Services
Other Income
11
12
TOTAL
EXPENDITURE
Transmission Cost
Cost of Goods
Personnel Cost
Administrative and Other Expenses
13
14
15
TOTAL
Operating Profit
Financial Expenses
Depreciation
16
Profit Before Tax
Appropriations
Proposed Dividend
Tax on Dividend
General Reserve
Balance carried to Balance Sheet
Basic and Diluted Earnings Per Share (In Rupees)
(On distributable profits on shares outstanding) (Face Value Re.1)
Significant Accounting Policies and Notes to Accounts
17
As per our attached report of even date
For and on behalf of the Board
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
Mumbai
24th September, 2002
51
2001-2002
for the year ending March 31,
Report
Profit and Loss Account
Annual
ZEE TELEFILMS LIMITED
Schedules to the Balance Sheet
as at March 31,
(Rs. ’000)
2002
2001
500,000
500,000
250,000
250,000
750,000
750,000
412,505
67
412,505
67
412,438
412,438
70,000
70,000
8,322,736
—
4,426,632
3,896,104
8,322,736
8,322,736
26,773,063
26,773,063
35,095,799
35,095,799
1,300,000
115,173
300,000
1,000,000
—
300,000
1,484,827
1,300,000
3,489,050
3,217,865
40,139,676
39,683,664
Schedule 1
Share Capital
Authorised
500,000,000 Equity Shares of Re.1/- each
2,500,000 Cumulative Redeemable Preference
Shares of Rs.100/- each
Issued, Subscribed and Paid up
412,505,012 Equity Shares of Re.1/- each fully paid up
Less: Calls in arrears (others)
(Out of the above 210,316,212 Equity Shares of Re.1/-each
fully paid up were allotted for consideration other than cash
against acquisition of Investments)
TOTAL
Schedule 2
Reserves and Surplus
Capital Redemption Reserve
As per last Balance Sheet
Share Premium
On equity shares issued for cash
As per last Balance Sheet
Add : Received during the year
On equity shares issued for consideration other than cash
General Reserve
As per last Balance Sheet
Less : Adjustment for opening deferred tax liabilities [Refer note 4(d)]
Add : Appropriated during the year
Profit and Loss Account
TOTAL
52
2001
572,795
260,017
—
603,797
1,859,299
—
2,499
—
—
273,269
6,186
2,156
2,440,779
1,139,239
Nil (25) 13.50% Unsecured Redeemable Non Convertible
Debentures of Rs.100/- each fully paid up Privately Placed
—
250,000
Nil (25) 12.50% Unsecured Redeemable Non Convertible
Debentures of Rs.100/- each fully paid up Privately Placed
—
250,000
1,300,000
350,000
—
200,000
797,260
450,000
43,450
—
1,543,450
2,097,260
Schedule 3
Secured Loans
Working Capital Finance From Banks
Secured by hypothecation of stocks (other than Programme and Films
Rights), book debts (other than advertisement commission receivables),
first charge on immovable properties at Noida, and second charge on
immovable properties at Marol, Mumbai all ranking pari passu with other
financing banks and second charge on advertisement commission
receivables.Charge for Rs./Thousand 80,000 is under creation.
Term Loans From Bank
Secured by first charge on advertising commission and Direct to Operator
subscription receivables, first pari passu charge on fixed assets of the
Company except immovable assets at Noida, exclusive first charge on all
present and future programming library (including films, movies, current
affairs, new programmes) owned by the Company, and negative lien with
physical custody of Preference and Equity shares of Siti Cable Network
Limited. [Due within one year Rs./Thousand Nil (183,333)]
Secured by first pari passu charge on advertisement commission receivable
and first mortgage and charge on all immovable and movable properties
both at present and future except fixed assets located at Noida and an
exclusive charge on the programme liabrary of the Company both present
and future programmes and films. The loan granted to a subsidiary is also
secured by way of pari passu charge on Advertisement Commission
receivable. [Due within one year Rs./Thousand 327,580 (Nil)]
Interest accrued and due
Foreign Currency Short Term Loan From Bank
Secured by pari passu charge with Term Loan from Bank on programme
library, the charge under Section 125 of the Companies Act, 1956 is not
registered.
Hire Purchase/Lease Finance
Secured against the hypothecation of vehicles. Those acquired under
Hire Purchase Finance, the charge under Section 125 of the the
Companies Act, 1956, is not registered.
TOTAL
Schedule 4
Unsecured Loans
Short Term Loan
–
From Banks
Intercorporate Deposits
–
From Subsidiary
–
From Others
Interest accrued and due
TOTAL
53
2001-2002
2002
Report
(Rs. ’000)
Annual
ZEE TELEFILMS LIMITED
Schedule 5
Fixed Assets (at cost)
(Rs. ’000)
Gross Block
Description
As at
1/4/01 Additions
Depreciation
Net Block
Deductions
As at
31/3/02
Up to
31/3/01
For the
year
Deductions
Up to
As at
As at
31/3/02 31/3/2002 31/3/2001
Land (Leasehold)
Buildings
Plant and Machinery
Equipments
Furniture and Fixtures
Vehicles
Leasehold Improvements
6,893
128,332
629,224
127,740
36,849
20,401
—
—
5,007
413,156
21,572
15,987
8,402
6,070
—
—
62,639
1,208
3
3,371
—
6,893
133,339
979,741
148,104
52,833
25,432
6,070
320
8,817
54,840
37,993
15,463
5,505
—
70
2,118
58,180
14,942
3,051
2,263
1,154
—
—
4,041
236
—
1,327
—
390
10,935
108,979
52,699
18,514
6,441
1,154
6,503
122,404
870,762
95,405
34,319
18,991
4,916
6,573
119,515
574,384
89,747
21,386
14,896
—
TOTAL
949,439
470,194
67,221 1,352,412
122,938
81,778
5,604
199,112 1,153,300
826,501
Previous Year
453,323
500,810
81,409
43,316
1,787
122,938
4,694
949,439
826,501
Note : (Amount in Rs./Thousand)
1.
2.
3.
4.
5.
Building includes Rs. 114, the value of share in a co-operative society.
Depreciation for the year includes Rs. 54 (620) transferred to pre-operative expenses.
Depreciation for the year includes Rs. 14,341 (Nil) transferred to deferred revenue expenditure.
Plant and Machinery includes Equipments (electronic devices) given on operating lease amounting to Rs. 445,294
(311,732), which are not insured.
Fixed Assets include assets taken on finance lease Rs. 9,582 and depreciation for the year Rs. 736.
(Rs. ’000)
2002
2001
1,500
1,500
500
500
10
—
200
200
Schedule 6
Investments – Long Term (at Cost)
Quoted – Non-Trade
360,000 Equity Shares of Rs. 10/- each of Essel Propack Limited
Unquoted – Trade
50,000 Equity shares of Rs. 10/- each of Karma Network Limited
Unquoted – Non-Trade
1,000 (Nil) Equity Shares of Rs. 10/- each of Ecool Gaming
Solutions Private Limited
200 Floating Rate Interest Bonds of State Bank of India of Rs.1,000/- each
In Subsidiaries – Wholly Owned
34 Ordinary Shares of USD 1/- each of Zee Multimedia Worldwide Limited, BVI *
20,527,092
20,527,092
501 Ordinary Shares of USD 1/- each of Winterheath Company Limited, BVI
(50% held through 100% subsidiary ZMWL) *
9,507,573
9,507,573
100,091,108 Equity Shares of Siti Cable Network Limited of Rs. 10/- each * #
3,179,967
3,179,967
215,650
215,650
347,100 Equity Shares of Programme Asia Trading Company Limited of Rs.10/- each*
1,605,002
1,605,002
21,000,070 (10,000,070) Equity Shares of Rs.10/-each of Econnect (India) Limited
210,001
100,001
73,587 Equity Shares of Rs.10/-each of Zee Interactive Learning Systems Limited
736
736
120,001
500
1
500
21,500,000 14% Redeemable Non-Cumulative Preference
Shares of Siti Cable Network Limited of Rs.10/- each #
12,000,070 (70) Equity Shares of Rs.10/- each of Dakshin Media Limited
50,000 Equity Shares of Rs. 10/- each of Kaveri Entertainment Limited
54
In Subsidiaries - Others
7,400 ( Nil) Equity Shares of Rs.10/- each of Zee Turner
Private Limited (extent of holding 74%)
All above shares and securities are fully paid up
TOTAL
Note : *
#
2001
74
—
35,368,806
35,138,722
1,500
99,756
35,367,306
1,500
79,614
35,137,222
6,956
122,797
1,222,454
7,659
215,728
961,583
1,352,207
1,184,970
1,247,131
1,514,203
78,972
1,633,306
2,761,334
1,712,278
18,589
2,214
2,742,745
1,710,064
1,860
917,580
12,745
337,337
3,159
1,193,975
557,193
500,000
1,269,522
2,254,327
3,623,577
3,251,374
1,127,476
24,534
783,592
11,761
1,102,942
771,831
Out of these investments the consideration to the extent of
Rs./Thousand 26,983,379 is discharged by way of issue of
Company’s Equity Shares under Share Swap.
51% of these shares have been pledged against loan granted to
Siti Cable Network Limited, a wholly owned subsidiary company
Aggregate Value of all Quoted Investments
Market Value of all Quoted Investments
Aggregate Value of all Unquoted Investments
Schedule 7
Current Assets, Loans and Advances
A.
Current Assets
Inventories (as taken,valued and certified by the Management)
(valued at lower of cost or estimated net realisable value)
Raw Stocks - Tapes, cassettes
Under Production - Television Programmes/Films etc.
Stock in Trade - Television Programmes/Films etc.
Sundry Debtors (Refer Note 6(e))
(Unsecured and Considered Good unless otherwise stated)
More than 6 months [Considered Doubtful Rs./Thousand 18,589 (2,214 )]
Others
Less : Provision For Doubtful Debts
[include Rs./Thousand 2,627,685 (1,414,295) due from Subsidiaries]
Cash and Bank Balances (Refer Note 6(c))
Cash in hand
Balances with Scheduled Banks in Current Accounts
Balances with Scheduled Banks in Deposit Accounts
Cheques in hand / transit
B.
Loans and Advances (Refer Note 6(f))
(Unsecured and considered good)
Loans
Advances (Recoverable in cash or in kind or for value to be received)
Other Advances
Less : Provision for Doubtful Advances
Deposits
TOTAL
244,229
205,791
4,970,748
4,228,996
10,335,222
9,378,357
55
2001-2002
2002
Report
(Rs. ’000)
Annual
ZEE TELEFILMS LIMITED
(Rs. ’000)
2002
2001
354,546
390,450
635,436
564,507
7,812
21,272
363,173
971,240
112,418
453,677
5,118
22,918
1,974,023
1,928,544
227,111
34,087
226,878
89,910
24,193
250,020
488,075
364,123
3,421
206,038
6,498
—
209,459
6,498
Schedule 8
Current Liabilities* (Refer note 6(l))
Sundry Creditors
For Goods
For Expenses and Other liabilities
Trade Advances/Deposits received
Due to Broadcasters/Principals (Pending Remittance)
Unclaimed Dividend
Interest accrued but not due
[*include Rs./Thousand 1,048,295 (453,677) due to subsidiaries]
TOTAL
Schedule 9
Provisions
Provision For - Tax (Net of advances)
Retirement Benefits
Proposed Dividend (including tax)
TOTAL
Schedule 10
Miscellaneous Expenditure
(to the extent not written off or adjusted)
Share Issue Expenses
Deferred Revenue Expenditure
TOTAL
56
(Rs. ’000)
2002
2001
3,193,384
56,650
814,880
3,088,738
—
757,881
4,064,914
3,846,619
Schedule 11
Sales and Services
Sales
Broadcasting Revenue
Service Revenue
TOTAL
Schedule 12
12
Other Income
Dividend (Gross-Non Trade)
Interest (Gross) [T.D.S. Rs./Thousand 153,844 (110,574)]
Miscellaneous Income
TOTAL
1,968
746,366
18,900
1,230
490,018
19,334
767,234
510,582
7,659
215,728
961,583
4,814
78,693
645,851
1,184,970
729,358
46,695
1,605,633
189,292
35,151
47,810
1,713,431
485,321
10,798
1,876,771
2,257,360
6,956
122,797
1,222,454
7,659
215,728
961,583
1,352,207
1,184,970
1,709,534
1,801,748
210,335
3,276
1,919,869
1,805,024
Schedule 13
Cost of Goods
Programming Cost
Opening Stock
Raw Stocks
- Tapes, Cassettes
Under Production - Television Programmes/Films etc.
Stock in Trade
- Television Programmes/Films etc.
Add : Production / Acquisition Cost
Raw Stocks
- Tapes, Cassettes
Productions
- Television Programmes/Films etc.
Purchases
- Television Programmes/Films etc.
- Audio Cassettes
Less : Closing Stock
Raw Stocks
- Tapes, Cassettes
Under Production - Television Programmes/Films etc.
Stock in Trade
- Television Programmes/Films etc.
Purchases - Others
TOTAL
57
2001-2002
for the year ending March 31,
Report
Schedules to the Profit and Loss Account
Annual
ZEE TELEFILMS LIMITED
(Rs. ’000)
2002
2001
286,105
18,150
21,735
219,266
13,748
18,063
325,990
251,077
43,475
7,215
2,725
758
1,149
18,242
3,455
24,173
49,952
21,037
47,810
14,031
34,041
31,647
49,743
110,666
29,148
—
10,348
1,021
—
3,078
64,515
23,691
8,828
1,953
1,851
1,002
14,632
3,158
18,254
54,512
27,760
44,132
14,330
41,898
32,119
31,902
82,943
12,475
1,100
2,698
634
1,475
3,078
—
568,229
424,425
16,185
—
380,841
45,060
8,627
1,120
137,876
5,140
143,089
58,650
585,175
211,413
Schedule 14
Personnel Cost
Salaries, Allowances and Bonus
Contribution to Provident and other funds
Staff Welfare Expenses
TOTAL
Schedule 15
Administrative and Other Expenses
Rent
Lease Rentals
Rates and Taxes
Repairs and Maintenance - Building
- Plant and Machinery
- Others
Insurance
Electricity/Water Charges
Communication Expenses
Printing and Stationery
Miscellaneous Expenses
Vehicle Expenses
Travelling and Conveyance Expenses [including Directors Rs./Thousand 6,035 (2,103)]
Legal, Professional and Consultancy Charges
Business Promotion Expenses
Advertisement and Publicity Expenses
Provision for Doubtful Debts and Advances
Bad Debts and Advances Written Off
Commission/Discount
Loss on Sale of Fixed Assets
Loss on Sale of Investments
Share Issue Expenses Written Off
Deferred Revenue Expenses Written Off
TOTAL
Schedule 16
Financial Expenses
Interest on –
–
–
–
Debentures
Fixed Deposits
Fixed Loan
Others
Discounting and Financing Expenses
TOTAL
58
Zee Telefilms Limited (“ZTL” / “the Company”) was incorporated in the state of Maharashtra, India. The Company has been
mainly in the following businesses during the year:
a)
Sale of programs, including films, to its subsidiaries for broadcasting on satellite television channels (for beaming to
Asia including India, USA, Europe, South Africa, Canada etc) and to other parties;
b)
Booking of Advertisement on television channels and collection of advertisement revenue;
c)
Audio titles acquisition and distribution through its brand “Zee Records”;
d)
Film Production (film “Gadar” had been released for public viewing during the year and animation cum live film
“Bhagmati”, is under production) and distribution of films;
e)
Direct to Operator (DTO) project for Uplinking and distribution of four satellite television channels from India under the
brand “Alpha” as pay television channels commenced telecast on 24th February, 2002;
Use of Estimates
The preparation of the financial statements in accordance with the Generally Accepted Accounting Principles requires that
the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of the financial statements and the reported amount of revenue and expenses of the year.
Examples of such estimates include estimate of provision for diminution in the value of Investments, provision for doubtful
debts, useful life of fixed assets etc. Actual results could differ from those estimates.
A. Significant Accounting Policies
1.
2.
3.
Accounting Convention
a)
The financial statements have been prepared under Historical Cost Convention on going concern basis and in
accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.
b)
The Company generally follows mercantile system of accounting and recognizes income and expenditure on
accrual basis except those with significant uncertainties.
Fixed Assets
(a)
Fixed assets are stated at cost less depreciation. Cost includes capital cost, freight, installation cost, duties and
taxes, finance charges and other incidental expenses incurred during the construction / installation stage attributable
to bringing the asset to working condition for its intended use.
(b)
All capital costs and incidental expenditure relating to pre operational period up to setting up of business are
shown as capital work in progress.
(c)
Assets acquired under Finance Lease are capitalized and the corresponding lease liability is recorded at an
amount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in connection
with the specific leasing activities directly attributable to activities performed by the company are included as part
of the amount recognized as an asset under the lease.
Borrowing Costs
Borrowing cost attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost
of such assets. All other borrowing costs are charged to revenue.
4.
5.
Depreciation
a)
Depreciation on fixed assets (including on fixed assets acquired under finance lease) is provided on Straight Line
Method at the rate specified in Schedule XIV to the Companies Act, 1956.
b)
Leasehold Land and Leasehold Improvements are amortized over the period of Lease.
Investments
Investments, including expenses on acquisition, are classified as long term and stated at cost. Provision for diminution
in value of long-term investment is made, if the diminution is other than temporary.
59
2001-2002
Background
Report
Schedule 17: Significant Accounting Policies and Notes to Accounts
Annual
ZEE TELEFILMS LIMITED
6.
7.
8.
Transaction in Foreign Currencies
a)
The transactions in foreign currency are accounted at the equivalent rupee value on the date of the transaction.
b)
Foreign currency assets and liabilities not covered by forward contracts at the year-end are realigned at the
prevailing exchange rate and difference on realignment and realization is adjusted in the respective revenue or
capital head. Premium in respect of forward contract is accounted over the period of the contract.
c)
Non-Monetary foreign currency items are carried at cost and accordingly the Investments in shares of foreign
subsidiaries are expressed in Indian currency at the rate of exchange prevailing at the time when the original
investments were made.
Revenue Recognition
a)
Sales are recognized on despatch of goods to customers.
b)
Broadcasting services - Advertisement revenue is recognized (gross of agency commission) when the related
advertisement or commercial appears before the public i.e. on telecast and Subscription revenue is recognized
on a time basis on the provision of television broadcasting to subscribers.
c)
Service revenues are recognized when the service is completed and Advertisement Commission is recognized
when the related advertisement or commercial appears before the public i.e. on telecast.
d)
Lease rentals are recognized as revenue as per the terms of the lease agreements.
e)
Course Fees is recognized over the period of instructions.
f)
Television Programs production and acquisition costs are net of recoveries.
Inventories
The policy of valuation of Inventories is restated and elaborated for better understanding and broader application with
the commencement of new business of broadcasting services. However there is no change in policy or method of
valuation of inventories in comparison to the policies followed in the preceding year.
Inventories of Raw Stock (Tapes and Cassettes etc.), Television Program /Films etc. under Production, Stock in Trade
(Television Programs, Films and Rights, Audio Cassettes, Electronic Devices, etc.) are valued at lower of cost or
estimated net realizable value as detailed hereunder:
Cost
Cost is taken on First In First Out (FIFO) or Specific Identification basis. In case of Films/Television Programs with
multiple rights cost is allocated to each right as per management estimate.
Net Realizable Value
Costs are amortized / expensed as under and net realizable value is estimated by management at unamortized cost.
Content - Trade
Television programs / films etc. acquired or produced by the company for sale.
a)
Cost of Programs like News, Current Affairs, Chat shows, Events etc are fully expensed on its first sale.
b)
Programs having re-exploitable value are expensed 90% on first sale and 10% expensed on its subsequent sale;
c)
In case of the film produced / acquired by the company, cost of each right is expensed fully on first sale.
d)
Other Programs, Film Rights and where limited telecast rights are sold are valued at unamortized cost.
Content - Broadcasting
Television programs / films, acquired or produced and used as a broadcaster for telecasting on its owned Television
channels:
60
i)
Cost of Programs like News, Current Affairs, Chat shows, Events etc. are fully expensed on first telecast.
ii)
The cost of the program rights including unamortized cost of Content from Trade used for broadcasting are
amortized on straight line basis from its first telecast, over 36 months or license period whichever is shorter.
iii)
The cost of telecast rights of film is amortized on straight-line basis over 60 months or license period whichever
is shorter, from its first telecast.
b)
9.
Copyrights of Audio titles acquired and recorded cassettes, compact discs produced for sale;
i)
Film based rights: 50% of cost expensed on audio release and balance after six months of film release or
when cost is recouped, whichever is earlier.
ii)
Non-Film based rights: 50% of cost expensed on audio release and balance after six months of release or
when cost is recouped, whichever is earlier.
Recorded Audio Cassettes, Compact Discs: Cost means cost of production excluding cost of Audio Rights.
Annual
a)
Retirement Benefits
a)
Contribution to provident fund and other recognized funds are charged to Profit and Loss Account.
b)
Leave Encashment is provided in terms of contractual obligations as per the company’s rules.
c)
Gratuity liability is provided on the basis of actuarial valuation.
10. Taxes on Income
Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is
recognized, subject to consideration of prudence in respect of deferred tax assets, on timing difference, being the
difference between taxable income and accounting income that originate in one period and are capable of reversal in
one or more subsequent periods.
11. Operating Leases
Lease of assets under which the lessee effectively retains all the risk and rewards of ownership are charged as
operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance
with the respective lease agreements.
12. Miscellaneous Expenditure
a)
Share issue expenses are amortized over period of 10 years.
b)
Premium on prepayment and upfront charges are deferred and amortized over the period of loan.
c)
Deferred revenue expenses other than (a) and (b) above deferred are amortized over 36-60 months.
13. Earnings Per Share
Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding
during the year. Diluted earnings per share is computed and disclosed using the weighted average number of common
and dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.
B. Notes to Accounts
1.
Prior Year Comparatives
Previous year’s figures are regrouped, rearranged, or recast wherever necessary to conform to this year’s classification.
Figures in brackets pertain to previous year.
2.
2001-2002
Content - Audio Rights / Recorded Cassettes, Compact Discs, etc.
Report
ZEE TELEFILMS LIMITED
Restructuring
The Company has initiated a process of restructuring of its subsidiaries (Indian and Foreign), and in pursuance thereof
four of its wholly owned Indian subsidiaries; Kaveri Entertainment Limited, Dakshin Media Limited, Programme Asia
Trading Company Limited, El-Zee Television Limited, have filed the petitions with the High Court, Mumbai, for amalgamation
with effect from 1st April, 2001 with the Company and for adjustment of excess cost of Investments to the company
over net asset value of the amalgamating Company against the reserves of the Company. Accordingly, accounting of
amalgamation scheme, if approved, will affect the reserves and profits of the Company to the extent of such adjustment
and losses of the amalgamating companies for the year 2001-2002. However effect is reflected in the consolidated
financial statements of the Company.
The Company has applied to Reserve Bank of India for restructuring of its foreign subsidiaries and approval thereof
is awaited. Restructuring of these companies will not have significant effect on its financials. Hokushan Trading Limited,
Hong Kong, a subsidiary, has become defunct and divested.
61
3.
4.
Investments
a)
During the year the company has entered into a Memorandum of Understanding (“MOU”) with the promoters of
ETC Networks Limited for acquiring management control and majority shareholding including acquisition of 5,660,795
equity shares of Rs. 10 each fully paid up for Rs./ Thousands 178,428 (the company has paid an advance of Rs./
Thousands 53,520 against the said transaction) and also for allotment on a preferential basis of 2,220,812 equity
shares of Rs. 10 each fully paid up for an aggregate consideration of Rs./ Thousands 70,000.
b)
The company has entered into a Memorandum of Understanding (“MOU”) with Padmalaya Telefilms Limited
(“PTL”), promoters of PTL and the shareholders of Padmalaya Enterprises Private Limited (“PEPL”) for acquiring
management control and majority shareholding in PTL through PEPL (a special purpose vehicle in which company
will hold 64.60% equity shares). PEPL would acquire 2,250,000 equity shares of Rs. 10 each fully paid up for
Rs./Thousands 319,950 and would also be allotted on a preferential basis, 2,000,000 equity shares of Rs. 10 each
fully paid up for Rs./Thousands 284,400. The Company has paid an advance of Rs./Thousands 580,000 against
the said transaction.
c)
These transactions are completed after the close of the year in compliance with the main terms of such contracts
and other regulatory provisions including open offer as per Securities and Exchange Board of India (SEBI)
takeover code.
Income Tax
a)
The company had provided for taxation in earlier years considering the 100% deduction on Income from export
of television programs under Section 80 HHC of the Income tax Act, 1961. However, the tax authorities did not
allow the said claim and allowed an alternative claim under Section 80-O. On the basis of completed assessments
and appeals, the short provision of tax was provided in the previous year and balance of Rs./Thousands 142,500
(421,822), is provided during the year.
The Company has challenged the disallowance of deduction under Section 80 HHC and Income Tax department
has challenged the allowance of claim under Section 80-O, these cross appeals before higher authorities are
pending. The decision on these appeals in favour or against the company may result in reduction or increase of
tax liabilities of the Company. (Contingent Liabilities)
b)
Provision for taxation for the year is made allowing deductions considering compliance of prescribed conditions
under Section 80HHF for exports made by the Company including approval of delayed realization.
c)
The Company has accounted for the deferred tax assets/liabilities as at April 1 2001 by adjusting the
amounts from the opening general reserve in accordance with the transitional provision as laid down in Accounting
Standard – 22 “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.
d)
The components of deferred tax balances as at 31st March, 2002 are as under:
PARTICULARS
Rs./Thousands
Deferred Tax Assets
Provision for retirement benefits
Expenses allowable on payment basis
Provision for doubtful debts
Short term loss carried forward
7,059
19,858
6,832
453
Total
Deferred Tax Liabilities
Depreciation
Miscellaneous expenditure and other provisions
62
34,202
129,417
76,137
Total
205,554
Deferred Tax Liabilities (Net)
171,352
Additional information on assets taken on lease:
(a)
In respect of assets taken on finance lease prior to April 1, 2001: (assets not capitalized)
Rs./Thousands
Future lease rental obligation
(b)
(c)
17,499
In respect of assets taken on finance lease: (assets capitalized)
Reconciliation of minimum lease payments and its present value:
Minimum Lease Payments as at
Not Later than one year
Later than one year and not later than five years
Total
Less: Amount representing Interest
Present Value of Minimum Lease Payments
Less: Amount due not later than one year
Amount due later than one year and not later than five years
3,128
4,744
7,872
1,686
6,186
2,234
3,952
In respect of assets taken on operating lease during the year
The Company leases office, residential facilities and plant and machinery (including equipments) under cancelable
agreements that are renewable on a periodic basis at the option of both the lessee and the lesser. The initial
tenure of the lease generally is for 11 months to 36 months.
Lease rental charges for the year
Future lease rental obligation payable (under non cancellable leases)
Not later than one year
Later than one year but not later than five years
6.
69,699
30,000
55,000
Disclosures
a)
Share application money refundable is subject to reconciliation however it is lying in a separate bank account.
b)
Unsecured loans - Short-term Rs./ Thousands 1,000,000 (Nil), are secured by pledge of shares of companies
belonging to a related party.
c)
Cash and Bank balances include fixed deposits of Rs./Thousands 6,000 (6,000) pledged as security for credit
facilities granted to a related party.
d)
Current Liabilities include cheques overdrawn of Rs./Thousands 22,767 (713,159).
e)
Debtors includes Rs./Thousands 7,799(Nil) due from a Private Limited Company in which a director is interested
as director.
f)
Loans and Advances
(i)
(ii)
Advances include:
(a)
Rs./Thousands Nil (41,537) due from Private Limited Companies in which directors are interested as
directors/members.
(b)
Rs./Thousands Nil (101,361) as expenses / payments for proposed capital issue.
(c)
Rs./Thousands 160,985 (253,998) to subsidiary companies towards share application moneys.
Loans includes:
(a)
Rs./Thousands 27,747 (20,746) due from Zee Network Employees Welfare Trust for purchase of its
shares under Employee Stock Option Plan.
(b)
Rs./Thousands 540,267 (98,324) due from subsidiaries.
(c)
Rs./Thousands 16,087 due from whole time director (including interest Rs. /Thousands 1,087) (Maximum
balance outstanding at any time during the year Rs./Thousands 16,087).
63
2001-2002
Leases
Report
5.
Annual
ZEE TELEFILMS LIMITED
g)
(d)
Rs./Thousands 14,245 (Nil) due from Private Limited Company in which director is interested as director.
(e)
Rs./Thousands 1,715,681 (1,023,605) due from Buddha Films Limited, is considered good and
recoverable on the basis of additional guarantee given by a promoter of the Company.
Managerial Remuneration
i)
No commission is paid / payable to any director and hence the computation of profits under Section
198 / 349 of the Companies Act, 1956 has not been made.
ii)
Remuneration paid or provided in accordance with Section 198 of the Companies Act, 1956 to the
directors included in personnel cost and relevant expense heads.
(Rs./Thousands)
2002
2001
33,648
17,852
Provident fund contribution
1,227
1,315
Perquisites
1,157
8
—
—
—
3,128
312
8
Whole-time Directors
(By the Company)
Salary and Allowances
(Includes Rs./Thousands 2,451 pertaining to prior year)
Managing Director
(By the Company)
Salary and Allowances
Provident fund contribution
Perquisites
Remuneration paid to a director by subsidiary company under Sections 198 and 314 of the Companies
Act, 1956.
Whole-time Directors
(By subsidiary company)
Salary and Allowances
6,322
4,571
Provident fund contribution
726
491
Perquisites
656
778
Note: Salary and Allowances includes basic salary, house rent allowance, leave travel allowance, leave
encashment and performance bonus. Perquisites are valued as per Income Tax Rules.
h)
Auditors’ Remuneration included in Miscellaneous Expenses
Audit fees
Tax Audit fees
For other matters
i)
2,100
236
928
1,260
210
1,576
Foreign Exchange Gain
The net exchange gain of Rs./Thousands 80,734 (40,480) resulting from settlement and realignment of
foreign exchange transactions other than those relating to fixed assets has been credited to respective
heads of the Profit and Loss Account.
j)
Employee Stock Option Plan (ESOP)
The Company had established an Employee Stock Option Plan (ESOP) in 1998 in terms of which 7,468,800
equity shares of the face value of Re.1/- each were allotted in the year 1999-2000 at price of Rs.21.20 per
share. The status of ESOP is as under;
(Nos.)
ESOP allotted to Employees by the Company
ESOP allotted to Employees through the Zee
Network Employees Welfare Trust
Balance with Trust (Zee Network Employees Welfare Trust)
64
4,314,000
237,803
2,916,997
k)
Sharing of Expenses
The common expenses shared with related parties are deducted from personnel cost and administrative and other
expenses respectively.
l)
Small Scale Industry Undertaking
The total amount due to Small Scale Industry Undertaking as at 31st March, 2002 is Rs./Thousands 3,774 (Nil). The
names of the Small Scale Industry Undertaking to whom the Company owes any sum outstanding for more than 30
days as at 31st March, 2002 are: Swadhinta Printers; Print House India Private Limited; Expert Print Services; Tedco
Press Private Limited; A.P Sales Corporation; ACE Electronics; ACM Enterprises; Dinesh Enterprises; Japan Metallics;
Lifon Industries; M.R. Corporation; Meeta Manufacturing Company; Meeta Music & Printers; Rainbow Traders; Sagarika
Accoustronics Private Limited; Shruti Art Private Limited; Subhash Paper Box Industries.
m)
n)
Capital Work in Progress Includes
(i)
Pre-operative expenses of Rs. / Thousands Nil (33,119) [refer note 6(o)]
(ii)
Borrowing Costs Rs. / Thousands 1,134 (22,468) [refer note 6 (o)]
(iii)
Capital Advances Rs. / Thousands 49,639 (32,220)
Capitalization of Direct to Operator Project
The Company’s Direct to Operator (DTO) project for uplinking and distribution of Television Channels in India has
commenced commercial operations on 24th February, 2002.
As per Accounting Standard –16 on “ Borrowing Costs” and Guidance Note on Expenditure during Construction period
issued by the Institute of Chartered Accountants of India, the borrowing costs and other expenses incurred up to the
date of set-up Rs. / Thousands 56,953 as are capitalized as part of the cost of fixed assets and expenses of Rs. /
Thousands 36,283 from set up to commencement of operations are deferred. Borrowing costs incurred after the date
of set up are charged to revenue.
o)
Statement of Pre-operative Expenses (included in capital work in progress)
2002
(Rs./Thousands)
2001
Expenditure up to previous year
Salaries, Allowances and Bonus
Contribution to Provident and other funds
Staff Welfare Expenses
Repairs and Maintenance – Others
Insurance
Electricity/Water Charges
Communication Expenses
Printing and Stationery
Sundry Expenses
Conveyance and Travelling Expenses
Vehicle Expenses
Legal, Professional and Consultancy Charges
Financial Expenses
Depreciation
55,587
414
23
29
50
35
160
182
—
10
115
1
100
1,892
54
16,986
4,797
688
468
936
516
2,205
3,572
82
1,364
2,085
161
1,820
22,468
620
Total
58,652
58,768
Less :
Transfer to a subsidiary/Profit and Loss Account
Capitalized/Deferred during the year
565
56,953
(3,181)
—
1,134
55,587
Particulars
Total
65
2001-2002
Report
The ESOP was established prior to Securities and Exchange Board of India (SEBI) guidelines on stock options, which
came into effect from June 1999, and hence those guidelines are not applicable to the Company as per the clarification
from SEBI, Accordingly, compensation cost of stock option granted is not required to be charged.
Annual
ZEE TELEFILMS LIMITED
7.
8.
Deferred revenue expenditure includes
(a)
Expenses of Rs./Thousands 1,70,550 (Nil) incurred on preparations made for raising funds are deferred and
amortized over a period of three years.
(b)
Expenditure (other than Borrowing Costs) of Rs./Thousands 36,283 (Nil) are deferred to be amortized over a
period of 60 months from the date of commencement of commercial operations.
(c)
Premium on prepayment of loans and upfront charges of Rs./Thousands 57,264 (Nil) are deferred and to be
amortized over the period of the loan.
Subsidiary Companies
9.
a)
The company had started new ventures in the earlier years through its subsidiaries in India and abroad and
financed their operations by way of advance against shares and interest free loans to its Indian subsidiaries in
addition to share capital and also undertaken continuing financial support to its Indian subsidiaries in view of
losses and erosion of Networth. Losses are not recognised by the company, however effect of these have been
refected in consolidated financial statements of the Company.
b)
The company has committed and undertaken to buy the Program Inventory from its’ Indian and Foreign subsidiary
companies at book value of Rs./Thousands 361,612 (Nil) subject to the approval of Reserve Bank of India.
c)
Plant and Machinery costing Rs./Thousands 8,703 (Nil) is used by its 100% subsidiary company.
Capital Commitments
a)
b)
10.
2002
(Rs./Thousands)
2001
Estimated amount of contracts remaining to be executed
on capital account, not provided for (net of advances)
15,134
56,327
Committed Investments (net of advances) (Refer Note 3)
604,862
—
2,545,000
5,641,200
Nil
675,000
Contingent Liabilities not provided for
(a)
Corporate guarantees for loans granted to subsidiaries to
the extent of loans availed / outstanding Rs. 2,354,542 (3,212,972)
(b)
Corporate guarantees to the others
(c)
Bank/counter guarantees and outstanding
109,278
30,155
(d)
Claims against the Company not acknowledged as debts.
20,969
13,477
(e)
Letters of credit
35,131
5,559
(f)
Legal suits and claims filed against the Company.
Unascertainable
Unascertainable
11. Related Party Transactions
(i)
List of Parties where control exists
Subsidiary Companies
a)
Wholly Owned
Siticable Network Limited; Siticable Broadband Karnataka Private Limited; Programme Asia Trading Company
Limited; El Zee Television Limited; Dakshin Media Limited; Kaveri Entertainment Limited; Zee Interactive
Learning Systems Limited; Econnect India Limited; Asia Today Limited; Hokushan Trading Limited; Expand
Fast Holdings Limited; Expand Fast Holdings (Singapore) Pte. Limited; Zee Telefilms (International) Limited;
Asia TV Limited – UK; Zee TV USA Inc.; Asia TV (USA) Limited; Asia TV (Africa) Limited; Zee TV South
Africa (Proprietary) Limited; Software Suppliers International Limited; Zee Multimedia Worldwide Limited,
Mauritius; Zee Multimedia Worldwide Limited, BVI.
b)
Others
Zee Turner India Private Limited (extent of holding 74%)
66
Associate Companies
Karma Network Limited
Other Related Parties
Agrani Convergence Limited; Ambience Advertising Private Limited; ASC Enterprises Limited; Ashok Goel; Asian
Satellite Broadcasting Private Limited; Briggs Trading Company Private Limited; Buddha Films Limited; Churu
Trading Company Private Limited; Continental Drug Company Private Limited; Cutting Edge Holdings Private
Limited; Cyquator Technologies Limited; Essel Propack Limited; E-City Entertainment (India) Private Limited; ECity Retail Private Limited; E-Cool Gaming Solution Private Limited; Essel Shyam Communication Private Limited;
Essel International Limited; Ganjam Trading Company Private Limited; Intrex India Limited; Jawahar Goel; Mediavest
Private Limited; Metropolitan Leasing Limited; Prime Publishing Limited; Pan India Paryatan Limited; Playwin
Infravest Private Limited; Premier Finance and Trading Company Limited; Prajatma Trading Company Private
Limited; Pratham Media Entertainment Private Limited; Rama Associates Limited; Rankey Investment and Trading
Company Limited; RKJ Woods Plantation Private Limited; Taleem Research Foundation; Tashi De Lek Entertainment
Solution Private Limited; Ultra Entertainment Private Limited; UTN Worldwide Limited; Veena Investments Private
Limited; Widescreens Holdings Private Limited; Zee Link Pty Limited; Zee MGM Limited; Zee Sports Limited; Zee
Network Employees Welfare Trust.
Directors/Key Management Personnel
Mr. Subhash Chandra; Mr. Laxmi Narain Goel; Mr. Ashok Kurien; Mr. Sandeep Goyal; Mr. D. P. Naganand;
Mr. R. K. Singh.
(iii) Transactions with Related Parties
(Rs./Thousands)
Particulars
Sale, Services and Recoveries (Net)
Purchase of Programs, Goods and Services
Advertisement Income
Commission Received
Commission Paid
Interest Received
Interest Paid
Dividend Received
Purchase of Fixed Assets
Sale of Fixed Assets
Share Application Money Given
Investments
Loans, Advances and Deposits Given
Loans and Advances Repayment received
Borrowing Repaid
Deposit Received
Deposit Repaid
Balances as on March 31, 2002
Investments
Share Application Money
Debtors
Loans/Advances/Deposits given
Deposits Received
Broadcasters/Principals pending Remittances
Creditors
Guarantees
Corporate Guarantees given
Bank Guarantee given
Guarantees received
i)
ii)
Subsidiaries
Associates
Other Related
Parties
Key Management Personnel
2,663,186
8,824
—
762,681
1,195
290
44,952
—
—
—
666
230,074
733,282
350,769
797,260
747,824
226,968
—
—
—
—
—
—
—
—
—
—
—
—
—
—
134,009
37,499
13,745
26,409
532
731,937
—
1,968
3,319
32,417
—
10
5,291,937
5,514,814
—
—
—
—
1,087
—
—
—
—
—
—
15,000
—
—
—
—
—
—
—
35,366,596
160,985
2,627,685
621,021
484,450
563,845
—
500
—
—
4,001
—
—
—
1,510
—
25,876
1,970,509
—
663
7,345
—
—
—
16,087
—
—
—
2,360,542
2,250
—
—
—
—
—
—
—
—
—
1,715,681
During the year, shares have been pledged by a related party for loan granted to the company; the same
has not been considered in the above disclosure requirements.
Details of Remuneration to directors is disclosed in Note 6(g).
67
2001-2002
Other Related parties with whom transactions have taken place during the year and balance outstanding as on
the last day of the year.
Report
(ii)
Annual
ZEE TELEFILMS LIMITED
12.
Additional Information required to be given pursuant to Part II of Schedule VI to the Companies Act, 1956 is
as follows :
(a)
The company is in the business of producing television programs and is not subject to any license hence licensed
capacity is not given. Further the nature of business of the company is such that the installed capacity is not
quantifiable.
(b)
Quantitative Information
The details of opening stock, acquisitions, sales and closing stock is as under:
Particulars
(c)
(d)
Qty. (Nos.)
2002
(Rs./
Thousands)
Qty. (Nos.)
2001
(Rs. /
Thousands)
Opening Stock
Television Programs/ Films / Rights
Audio Cassettes/ Compact Discs
—
1,583,480
954,397
7,186
—
958,460
636,676
9,175
Total
1,583,480
961,583
958,460
645,851
Acquisitions
Television Programs/ Films / Audio Rights
Audio Cassettes / Compact Discs
Others – Electronic Devices
—
3,963,641
3,172
189,292
35,151
210,335
—
927,879
428
485,321
10,798
3,276
Total
3,966,813
434,778
928,307
499,395
Sales
Television Programs/ Films / Rights
Audio Cassettes / Compact Discs
Others – Electronic Devices
—
3,214,516
3,172
2,855,295
125,193
212,896
—
302,859
428
3,073,804
8,502
2,291
Broadcasting Revenue
Advertisement Income
Subscription
—
—
50,236
6,414
—
—
—
—
Service Revenue
Commission on Advertisement
Lease Rent
Others
—
—
—
789,490
24,457
933
—
—
—
724,033
14,675
23,314
Total
3,217,688
4,064,914
303,287
3,846,619
Closing Stock
Television Programs/ Films / Rights
Audio Cassettes / Compact Discs
—
2,332,605
1,206,938
15,516
—
1,583,480
954,397
7,186
Total
2,332,605
1,222,454
1,583,480
961,583
Consumption of Raw Stock
Raw Tapes
Others
61,922
—
47,344
54
76,786
—
44,893
72
Total
61,922
47,398
76,786
44,965
%
23.24
76.76
11,013
36,385
%
25.10
74.90
11,284
33,681
100.00
47,398
100.00
44,965
Value of Imported and Indigenous
Raw Stock Consumed
Imported
Indigenous
Total
68
Particulars
2002
(Rs./Thousands)
2001
2,658,955
2,989,967
Remittances in Foreign Currency
Dividend remitted
No. of Shareholders (Nos)
No. of Equity Shares held (Nos)
79,345
1,200
144,262,895
50,875
1,127
190,224,821
Expenditure in Foreign Currency
Travelling
Business Promotion
Membership and Subscription
Professional Fees
Others
5,666
4,126
852
1161
6,882
6,187
2,691
593
—
—
47,016
196,937
11,013
124,006
—
9,486
Earning in Foreign Exchange
FOB Value of Exports
CIF Value of Imports
Capital Equipment
Electronic Devices
Raw Stock
13.
Segmental Reporting
The Financial Statements of the company contain both the consolidated financial statements as well as the separate
financial statements of the parent company. Hence, the company has presented the segmental information on the basis
of the consolidated financial statements as permitted by Accounting Standard – 17.
14.
Other Information
a)
During the year there has been an inquiry by the Department of Company Affairs (DCA), under which certain
irregularities had been noticed. The Company had filed compounding applications, which are pending before the
DCA and DCA initiated prosecution on certain points. The proceedings are pending and liability is not ascertainable.
b)
In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if
realized in the ordinary course of business and provision for all the known liabilities has been made in the
accounts.
c)
Debit and Credit balances are subject to confirmation and reconciliation if any.
69
2001-2002
Other Information
Report
(e)
Annual
ZEE TELEFILMS LIMITED
Balance Sheet Abstract
and Company’s General Business Profile
I.
REGISTRATION DETAILS
Registration No. 2
8
7
6
Date
Balance Sheet Date
II.
3
State Code 1
7
Month
1
0
Year
3
2
0
0
N
I
L
N
I
L
N
I
L
Preferential Allotment
N
I
L
POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT RS./THOUSANDS)
Total Liabilities
Total Assets
4 4 7 0 7 6 9 6
4 4 7 0 7 6 9 6
SOURCES OF FUNDS
Paid-up Capital
4
1
2
Reserves and Surplus
4
3
I
L
Unsecured Loans
1 5 4
5
0
3
4
4
7
Net Current Assets
7
8
7
3
9
6
7
6
Secured Loans
2 4 4
0
7
7
9
Investments
3 5 3
8
8
0
6
8
Share Application Money
N
APPLICATION OF FUNDS
Net Fixed Assets
1 2 5 6 3 0
IV.
2
CAPITAL RAISED DURING THE YEAR (AMOUNT RS./THOUSANDS)
Public Issue
Rights Issue
Bonus Issue
III.
1
0
1
6
Miscellaneous Expenditure
3
1
2
3
PERFORMANCE OF COMPANY (AMOUNT RS./THOUSANDS)
Turnover*
Total Expenditure
3 4 8
4 8 3 2 1 4 8
6
4
9
8
8
1
0
0
(*Includes other income)
+
✓
–
Profit/(Loss) Before Tax
+
1
✓
3
4
4
0
4
8
Earnings Per Share (weighted) (Rs.)
1 . 9 3
V.
–
Profit/(Loss) After Tax
9
7
2
6
1
5
5
8
Dividend Rate (%)
GENERIC NAMES OF PRINCIPAL PRODUCTS OF THE COMPANY (AS PER MONETARY TERMS)
Item Code No. (ITC Code)
Product Description
R
8
5
2
4
9
0
0
E
C O R
D
E
D
1
V
I
D
E
O
C
A
S
S
E
T
T
E
S
For and on behalf of the Board
Mumbai
24th September, 2002
70
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
(Rs./Thousands)
A.
2002
2001
1,344,048
1,622,566
67,383
42,695
3,078
(32,204)
3,078
(3,074)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before taxation, and extraordinary items
Adjustments for :
Depreciation
Share issue expenses written off
Prior Period expenses
Deferred Revenue Expenditure written off
64,515
—
Provision for doubtful debts and advances
29,148
12,475
1,021
634
(Profit)/Loss on sale of fixed assets
(Profit)/Loss on sale of Investments
—
1,475
42,447
5,388
Interest expense
442,086
152,764
Dividend income
Interest income
(1,968)
(746,366)
(1,230)
(490,018)
Operating profit before working capital changes
1,213,188
1,346,753
Increase in trade and other receivables
(842,172)
(715,391)
Increase in inventories
(167,237)
(455,613)
Exchange adjustments (net)
Adjustments for :
Increase/(Decrease) in trade and other payables
8,377
856,132
212,156
1,031,881
Direct taxes paid - For current year
- For earlier years
(275,550)
(45,000)
(262,869)
(347,508)
Net Cash flow from Operating Activities
(108,394)
421,504
Cash Generated from Operations
B.
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
(297,958)
(561,765)
Purchase of Investments
(230,084)
(1,041,001)
Share Application money paid
(634,186)
(253,998)
Loans to subsidiaries
Loans repaid by subsidiaries
(599,417)
157,945
(103,037)
246,445
(7,361,669)
(9,541,084)
7,430,936
6,961,420
Loans to others
Loans repaid by others
Dividend received
Sale of Investments
Sale of fixed assets
Interest income
Net Cash flow from Investing Activities
1,968
1,230
—
229,001
51,750
2,273
748,900
484,756
(731,815)
(3,575,760)
71
2001-2002
for the year ending March 31,
Report
Cash Flow Statement
Annual
ZEE TELEFILMS LIMITED
(Rs./Thousands)
C.
2002
2001
Dividend paid (including dividend tax)
(247,176)
(196,024)
Interest paid
(397,784)
(136,800)
Proceeds from issuance of share capital including share premium
—
3,510,004
Calls in arrears received
—
2
Proceeds from short term borrowings
312,778
(254,277)
Proceeds from long term borrowings
Repayments of long term borrowings
3,452,324
(3,015,027)
2,138,143
(183,346)
CASH FLOW FROM FINANCING ACTIVITIES
Principal payment under finance leases
(2,346)
—
Increase in miscellaneous expenditure
(247,365)
—
Net Cash flow from Financing Activities
(144,596)
4,877,702
Net Cash Flow during the year (A+B+C)
(984,805)
1,723,446
Cash and Cash Equivalents at the beginning of the year
2,254,327
530,881
Cash and Cash Equivalents at the end of the year
1,269,522
2,254,327
Notes to the Cash Flow Statement for the year ended 31st March, 2002
1.
Previous year’s figures have been regrouped, recast wherever necessary.
For and on behalf of the Board
Mumbai
24th September, 2002
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
AUDITORS’ CERTIFICATE TO CASH FLOW
We have examined the above Cash Flow Statement of Zee Telefilms Limited for the year ended 31st March, 2002. The
Statement has been prepared by the Company in accordance with the requirements of listing agreement clause 32 with
Bombay Stock Exchange and is based on and is in agreement with the corresponding Profit and Loss Account and Balance
Sheet of the Company covered by our report dated 24th September, 2002 to the members of the Company.
Mumbai
24th September, 2002
72
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Consolidated
Stand-alone
2002
2002
2001
2000
1999
1998*
10,762
4,065
3,847
2,870
2,262
1,734
Total Expenses
7,720
2,835
2,481
1,829
1,411
1,144
Operating Profit
3,042
1,230
1,366
1,041
851
590
28%
30%
36%
36%
38%
34%
792
767
511
101
55
75
3,834
1,997
1,877
1,142
906
665
Interest
808
585
211
84
81
64
Depreciation
215
68
43
25
18
15
2,811
1,344
1,623
1,033
807
586
865
371
238
210
196
149
1,946
973
1,385
823
611
437
17%
20%
32%
28%
26%
24%
227
227
227
161
103
103
55%
55%
55%
55%
55%
55%
412
412
412
409
187
187
Share Application Money
—
—
—
390
—
—
Share Capital – Preference
—
—
—
—
—
30
39,435
40,140
39,684
35,225
1,731
1,235
63
171
—
—
—
—
3
—
—
—
—
—
8,491
3,984
3,237
1,530
561
426
Capital Employed
48,404
44,707
43,333
37,554
2,479
1,878
Fixed Assets
35,398
1,256
1,102
586
312
266
125
35,369
35,139
34,328
571
480
12,456
7,873
7,086
2,630
1,583
1,116
425
209
6
10
13
16
48,404
44,707
43,333
37,554
2,479
1,878
168
168
122
1,022
99
27
69,218
69,218
50,326
417,524
18,418
5,093
Revenue Account
Income from Operations
% to Income from Operations
Other Income
PBIDT
Profit Before Tax
Taxation
Profit After Tax for the Year
% to Total Income
Dividend
Dividend Rate
Capital Account
Share Capital – Equity
Reserves & Surplus
Deferred Tax Balances
Minority Interest
Loan Funds
Investments
Net Current Assets
Miscellaneous Expenditure
Capital Deployed
Closing market price per share of Re.1
Market Capitalisation
Note : * Figures for 1998 are unaudited net consolidated results (inclusive of the erstwhile ASSL). This is to allow
a meaningful comparison. Ratios for 1998 and 1999 have been adjusted for share split.
73
2001-2002
(Rs. in million)
Year Ending March 31
Report
Last Five Years Financial Highlights
Annual
ZEE TELEFILMS LIMITED
Performance Ratios – An Analysis
Year Ending March 31
Consolidated
Stand-alone
2002
2002
2001
2000*
1999
1998
Financial Performance
Export Sales/Income from Operations
(%)
—
64.7
77.7
71.1
67.1
60.7
Advertisement Income/Income from Operations
(%)
61.1
1.2
—
—
—
—
Subscription Income/Income from Operations
(%)
29.2
0.2
—
—
—
—
Operating Profit/Income from Operations
(%)
28.3
30.3
35.4
36.2
37.6
34.0
Other Income/Total Income
(%)
6.9
15.9
11.7
3.4
2.4
4.2
Programming Cost/Income from Operations
(%)
19.1
42.1
46.9
45.5
46.7
45.2
Personnel Cost/Income from Operations
(%)
7.2
8.0
6.5
5.4
4.7
5.3
Selling and Administration Expenses/
Income from Operations
(%)
23.3
14.0
11.1
12.9
11.0
15.5
Total Operating Cost/Income from Operations
(%)
71.7
69.7
64.6
63.8
62.4
66.0
Interest Cost/Income from Operations
(%)
7.5
14.4
5.5
2.9
3.6
3.7
Tax/Income from Operations
(%)
8.0
9.1
6.2
7.3
8.6
8.6
PAT/Total Income
(%)
16.8
20.1
31.7
27.7
26.4
24.2
Tax/PBT
(%)
30.8
27.6
14.7
20.4
24.2
25.4
Dividend Payout/PAT
(%)
11.7
23.3
16.4
19.6
16.8
23.5
Dividend Payout/Effective Networth +
(%)
1.8
1.9
2.0
2.2
5.4
7.3
Debt-Equity ratio (Total loans/Eff. Networth)
(%)
67.1
34.0
28.2
20.7
29.4
30.3
Current ratio (Current assets/Current liabilities)
(x)
4.5
4.2
4.1
3.1
3.0
2.1
Capital Output Ratio (Inc. from Ops./Eff.
Capital employed)
(x)
0.5
0.3
0.3
0.3
0.9
0.9
Fixed assets Turnover (Inc. from
Ops./Fixed assets) ~
Balance Sheet +
(x)
2.9
3.2
3.5
4.9
7.3
6.5
Cash & cash equivalents/Total
Eff. capital employed
(%)
8.9
8.0
15.3
5.9
7.2
26.3
RONW (PAT/Eff. Networth)
(%)
15.4
8.3
12.1
11.1
32.1
31.1
ROCE (PBIT/Eff. Capital employed)
(%)
17.1
12.2
12.5
12.5
35.8
34.6
Revenue per share
(Rs.)
28.0
11.7
10.6
10.2
12.4
9.7
Dividend per share
(Rs.)
0.55
0.55
0.55
0.55
0.55
0.55
Indebtedness per share
(Rs.)
20.6
9.7
7.9
5.2
3.0
2.3
Book value per share
(Rs.)
30.7
28.4
27.8
24.0
10.2
7.5
Earnings per share (after prior
period adjustments)
(Rs.)
4.3
(x)
38.9
Per Share Data #
Price/EPS Ratio (Share price as of March 31,)
Notes :
*
Excluding impact of one time sale of film library to ATL for Rs. 1890 millions and profit thereon of Rs.1851 millions.
+
The calculation of Effective Capital Employed and Effective Networth excludes the impact of increase in Share Premium
arising out of issue of shares for consideration other than cash (towards acquisition of ZMWL, PATCO, SITI and
Winterheath Company Limited under share SWAP deal of Rs. 26773 millions) and impact of profit on one time sale
of film library to ATL of Rs. 1851 millions.
~
Fixed Assets for the consolidated entity excludes Goodwill on consolidation of Rs. 31726 millions.
#
Annualised.
74
We have examined the attached Consolidate Balance Sheet
of Zee Telefilms Limited and its subsidiaries as at 31st March,
2002 and also the Consolidated Profit and Loss Account for
the year then ended.
These financials statements are the responsibility of the
management of Zee Telefilms Limited. Our responsibility is
to express an opinion on these financial statements based
on our audit. We conducted our audit in accordance with
generally accepted auditing standards in India. These
standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statement
are prepared, in all the material respect, in accordance with
and identified financial reporting framework and are free of
material misstatements. An audit includes examining on test
basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statements. We believe that our audit provide a reasonable
basis for our opinion.
1.
2.
We did not audit the financial statements of certain
subsidiaries whose financial statement shows total
assets of Rs./Thousands 22,227,746/- as at
31st March 2002 and total revenue of
Rs./Thousands 9,963,576/-for the year. These
financial statements have been audited by other
auditors whose report has been furnished to us
and our opinion, in so far it relates to the amounts
included in respect of those subsidiaries is based
solely on the report of the other auditors.
We report that the consolidated financial statements
have been prepared by the company in accordance
with the requirements of the accounting standard
(AS) 21, “Consolidated financial statements”, issued
by the Institute of Chartered Accountants of India
subject to:
(i)
Note no. 2 (c) regarding non adjustments for
inconsistencies in the accounting policies and
Note no. 2 (d) regarding amortization of
deferred revenue expenditures in the accounts
of one of the subsidiary, the impact thereof
on the profit is not quantifiable.
(ii)
The company could not prepare
consolidated cash flow statement as
consolidated financial statements for
previous year are not available, this being
first year of consolidation.
the
the
the
the
On the basis of information and explanations
given to us, and on consideration of the separate
audit report on individual audited financial
statements of Zee Telefilms Limited and its
subsidiaries and subject to (2) above, we are of
the opinion that:
a)
The Consolidated Balance Sheet gives true
and fair views of the consolidated state of
affairs of Zee Telefilms Limited and its
subsidiaries as at 31st March, 2002: and
b)
The Consolidated Profit and Loss Account
gives a true and fair view of the consolidated
result of operations of Zee Telefilms Limited
and its subsidiaries for the year then ended.
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountant
Mumbai
24th September, 2002
75
2001-2002
to the Board of Directors of Zee Telefilms Limited on the Consolidated Financial Statements of Zee Telefilms Limited and its Subsidiaries
Report
Auditors’ Report
Annual
ZEE TELEFILMS LIMITED
Consolidated Balance Sheet
as at March 31,
(Rs. ’000)
Schedule
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Share Capital
Reserves & Surplus
2002
1
2
412,438
39,435,313
39,847,751
234
SHARE APPLICATION MONEY
MINORITY INTEREST
3,019
DEFERRED TAX BALANCES
3
62,654
LOAN FUNDS
Secured Loans
Unsecured Loans
4
5
5,821,379
2,669,236
8,490,615
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross Block (at cost )
Less : Depreciation Up-to-date
48,404,273
6
34,676,087
(763,429)
Net Block
Capital Work-in-Progress
33,912,658
1,484,990
35,397,648
INVESTMENTS
7
CURRENT ASSETS, LOANS AND ADVANCES
Inventories
Sundry Debtors
Cash & Bank Balances
Loans & Advances
8
124,866
2,601,037
6,289,281
1,885,535
5,214,142
15,989,995
Less :
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Provisions
9
10
2,672,339
861,494
3,533,833
NET CURRENT ASSETS
MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
12,456,162
11
425,597
TOTAL
Significant Accounting Policies and Notes to Accounts
48,404,273
19
As per our attached report of even date
For and on behalf of the Board
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
Mumbai
24th September, 2002
76
(Rs. ’000)
Schedule
INCOME
Sales & Services
Other Income
2002
12
13
10,762,393
792,064
TOTAL
EXPENDITURE
Operating Cost
Personnel Cost
Administrative and Other Expenses
Selling and Distribution Expenses
11,554,457
14
15
16
17
4,435,575
777,717
1,065,425
1,441,663
TOTAL
OPERATING PROFIT
Financial Expenses
Depreciation
7,720,380
3,834,077
807,547
215,055
18
PROFIT BEFORE TAX
Less : Provision for Taxation [Includes Rs./Thousand 286 for Wealth tax]
Current
Deferred
2,811,475
PROFIT AFTER TAX FOR THE YEAR
Prior period adjustments
Provision for Taxation for earlier years
1,946,015
22,122
145,032
NET PROFIT AFTER TAX
Minority Interest in Profits
Add : Excess provision – Dividend (earlier year)
Balance brought forward
1,778,861
314
149
1,420,553
Amount Available for Appropriation
3,199,249
APPROPRIATIONS
Proposed Dividend
General Reserve
Balance carried to Balance Sheet
226,878
300,000
2,672,371
888,074
(22,614)
TOTAL
3,199,249
Basic and Diluted Earnings Per Share
(On distributable profits on shares outstanding) (Face Value Re.1)
Number of outstanding shares
Significant Accounting Policies and Notes to Accounts
4.31
412,505,012
19
As per our attached report of even date
For and on behalf of the Board
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
Mumbai
24th September, 2002
77
2001-2002
for the year ending March 31,
Report
Consolidated Profit and Loss Account
Annual
ZEE TELEFILMS LIMITED
Schedules to the Consolidated Balance Sheet
as at March 31,
(Rs. ’000)
2002
SCHEDULE 1
SHARE CAPITAL
AUTHORISED
50,00,00,000 Equity Shares of Re.1/- each
25,00,000 Cumulative Redeemable Preference Shares of Rs.100/- each
500,000
250,000
750,000
ISSUED, SUBSCRIBED AND PAID UP
41,25,05,012 Equity Shares of Re.1/- each fully paid up
Less : Calls in arrears (others)
TOTAL
SCHEDULE 2
RESERVES & SURPLUS
Capital Redemption Reserve
Share Premium
(i)
On shares issued for cash
(ii) On shares issued for consideration other than cash
412,505
(67)
412,438
70,000
8,322,736
26,773,063
35,095,799
General Reserve
Opening Balance
Less: Deferred Tax expense for earlier years
Appropriated during the year
1,300,000
(91,706)
300,000
1,508,294
Foreign Currency Translation Reserve
Profit & Loss Account
TOTAL
SCHEDULE 3
DEFERRED TAX BALANCES
Deferred Tax Assets
Deferred Tax Liabilities
TOTAL
SCHEDULE 4
SECURED LOANS
Working Capital Finance from Banks
Term Loan from Financial Institution/Banks
Hire Purchase & Lease Finance
Interest Accrued and Due
TOTAL
SCHEDULE 5
UNSECURED LOANS
Short Term Loans
–
From Banks
–
From Finance company
Loan from related party
Long term trade deposits
Interest Accrued and due
TOTAL
78
88,849
2,672,371
39,435,313
(294,682)
357,336
62,654
618,352
5,123,434
15,144
64,449
5,821,379
1,300,000
200,000
1,094,638
24,897
49,701
2,669,236
SCHEDULE 6
FIXED ASSETS (At cost)
(Rs. ’000)
As at
1.4.2001
a)
Intangibles
Goodwill
- On consolidiation(c)
Goodwill
- On acquistions
Software
Depreciation
Additions Deductions
Net Block
As at
31.3.2002
As at
1.4.2001
For the
year
Deductions
Upto
31.3.2002
As at
31.3.2002
— 31,726,400
—
—
—
—
31,726,400
—
31,726,400
4,798
33,138
21,529
15,570
—
3,377
26,327
45,331
2,439
8,195
2,633
10,044
—
981
5,072
17,258
21,255
28,073
—
6,893
180,492
1,829,025
248,862
68,307
42,212
—
—
20,085
498,048
58,246
19,880
20,949
—
—
5,332
78,715
16,268
4,365
10,290
—
6,893
195,245
2,248,358
290,840
83,822
52,871
—
320
17,195
392,938
86,976
28,579
13,609
—
71
7,860
167,694
34,374
6,520
5,017
—
—
1,936
6,480
3,875
1,392
6,371
—
391
23,119
554,152
117,475
33,707
12,255
—
6,502
172,126
1,694,206
173,365
50,115
40,616
Total
2,413,727 32,380,707
118,347 34,676,087
550,251
234,213
21,035
763,429
Notes :
Depreciation for the year includes :
(a) Rs. / Thousand 19,087 transferred to pre-operative expenses / deferred revenue expenses.
(b) Rs. / Thousand 71 pertaining to earlier years.
(c) Arising on consolidation of accounts of ZTL with its subsdiairies and subsidiary with sub-subsidiaries.
33,912,658
b)
Tangibles
Land (Leasehold)
Building
Plant and Machinery
Equipments
Furniture and fixtures
Vehicles
(Rs. ’000)
2002
SCHEDULE 7
INVESTMENTS
Long Term (at cost)
Quoted - Non-Trade
3,60,000 Equity Shares of Rs.10/- each of Essel Propack Limited
[(Market Value Rs./Thousand 99,756/-]
Quoted-Trade
13,21,200 Equity Shares of Rs.10/- each of Aplab Ltd.
[(Market Value Rs./Thousand 18,496/-]
Unquoted-Trade
50,000 Equity Shares of Rs. 10/- each of Karma Network Limited
480 Equity Shares of Rs.100/- each of Master Ads Private Limited
17,000 Equity Shares of Rs. 10/- each Dakshin Communication Private Limited
6,600 Equity Shares of Rs.10/- each of Centre Channel Private Limited
Unquoted – Non-Trade
1,000 Equity Shares of Rs. 10/- each of Ecool Gaming Solutions Private Limited
200 Floating Rate Interest Bonds of State Bank of India of Rs. 1,000/- each fully
National Savings Certificate
All above shares & securities are fully paid up
TOTAL
1,500
118,908
500
48
3,167
503
10
200
30
124,866
SCHEDULE 8
CURRENT ASSETS, LOANS & ADVANCES
A.
CURRENT ASSETS
(a) Inventories (as taken, valued and certified by the Management)
(valued at lower of cost or estimated net realisable value)
Raw Stocks - Tapes, cassettes etc
Stores and Spares
Under Production - TV Programmes/Films etc.
Stock-in-Trade - TV Programmes/Films etc.
6,891
112,446
136,007
2,345,693
2,601,037
79
Report
Gross Block
Annual
Description
2001-2002
ZEE TELEFILMS LIMITED
(Rs. ’000)
2002
SCHEDULE 8 (Contd.)
(b)
Sundry Debtors
(Unsecured and Considered Good unless otherwise stated)
Outstanding for more than 6 months
Other Debts
3,076,669
3,870,927
6,947,596
Less: Provision for Doubtful Debts
(658,315)
6,289,281
(c)
Cash & Bank Balances
Cash in hand
Cheques and drafts in hand/in transit
Balances with Banks in Current Accounts
Balances with Banks in Deposit Accounts
17,012
424,747
1,383,686
60,090
1,885,535
B.
LOANS & ADVANCES
(Unsecured and considered good)
Loans
Advances (Recoverable in cash or in kind or for value to be received)
Other Advances
Less : Provision for Doubtful Advances
Deposits
3,476,270
1,456,064
(59,560)
1,396,504
341,368
5,214,142
TOTAL
SCHEDULE 9
CURRENT LIABILITIES
Sundry Creditors For Goods
For Expense and Other liabilities
Trade Advances/Deposits received
Due to Broadcasters/Principals (Pending Remittance)
Unclaimed Dividend
Interest accrued but not due
TOTAL
SCHEDULE 10
PROVISIONS
For Dividend
For taxation (net of advances)
For retirement benefits
TOTAL
SCHEDULE 11
MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
Deffered Revenue Expenditure
Share Issue Expenses
Preliminary Expenses
TOTAL
80
15,989,995
883,512
1,485,085
207,089
60,277
7,812
28,564
2,672,339
226,878
576,974
57,642
861,494
414,855
9,657
1,085
425,597
(Rs. ’000)
2002
SCHEDULE 12
SALES & SERVICES
Services – Advertisement
– Subscription
– Commission on Advertisement
– Commission on Subscription
– Course Fees and Materials
– Transmission Services
– Others
Sales
– Products (programmes, films, electronic devices etc.)
TOTAL
6,577,876
3,138,955
26,809
30,158
274,539
62,421
50,467
601,168
10,762,393
SCHEDULE 13
OTHER INCOME
Dividend
Interest
Miscellaneous Income
TOTAL
1,968
753,054
37,042
792,064
SCHEDULE 14
OPERATING COST
PROGRAMMING COST
OPENING STOCK
Raw Stocks – Tapes, cassettes etc.
Under Production – TV Programmes/Films etc.
Stock in Trade – TV Programmes/Films etc.
8,373
232,520
1,913,240
2,154,133
ADD: PRODUCTION
Raw Stocks –
Productions –
Acquisitions –
–
/ ACQUISITION COST
Tapes, cassettes etc.
TV Programmes/Films etc.
Audio Tapes
TV Programmes/Films etc.
63,589
1,636,911
35,151
655,357
2,391,008
LESS: CLOSING STOCK
Raw Stocks – Tapes, cassettes etc.
Under Production – TV Programmes/Films etc.
Stock in Trade – TV Programmes/Films etc.
6,891
136,007
2,345,693
2,488,591
2,056,550
OTHERS
Purchases – Others
Subscriber Management Services Cost and Commission
Transmission Cost
Education Center Operating Expenses
Other Direct Operating Expenses
TOTAL
210,335
1,047,251
686,371
226,325
208,743
4,435,575
81
2001-2002
for year ending March 31,
Report
Schedules to the Consolidated Profit and Loss Account
Annual
ZEE TELEFILMS LIMITED
(Rs. ’000)
2002
SCHEDULE 15
PERSONNEL COST
Salaries, Allowances & Bonus
Contribution to PF & Other Funds
Staff Welfare Expenses
TOTAL
SCHEDULE 16
ADMINISTRATIVE AND OTHER EXPENSES
Rent
Lease Rentals
Rates and Taxes
Repairs & Maintenance – Building
Repairs & Maintenance – Plant & Machinery
Repairs & Maintenance – Others
Insurance
Electricity/Water Charges
Communication Expenses
Printing & Stationary
Sundry Expenses
Conveyance and Travelling Expenses
Vehicle Expenses
Legal, Professional & Consultancy Charges
Auditors’ Remuneration
Loss on Sale of Fixed Assets
Provision for doubtful debts & advances
Bad debts written off
Deferred Revenue Expenses written off
Fixed Assets shortage written off
TOTAL
SCHEDULE 17
SELLING AND DISTRIBUTION EXPENSES
Advertisement & Publicity Expenses
Discounts and Rebates
Commission on Sales
Business Promotion Expenses
TOTAL
SCHEDULE 18
FINANCIAL EXPENSES
Interest on – Debentures
– Fixed Loan
– Others
Discounting & Financing Expenses
Foreign Exchange Loss
TOTAL
82
688,336
47,920
41,461
777,717
81,863
14,578
11,838
1,232
7,791
32,778
15,450
33,625
107,440
31,359
82,280
95,875
21,116
101,333
23,208
3,469
211,191
38,383
146,498
4,118
1,065,425
238,996
39,724
1,008,115
154,828
1,441,663
30,729
594,505
2,653
147,979
31,681
807,547
1.
Background and description of Business :
Zee Telefilms Limited (“ZTL”) along with its subsidiaries (collectively known as the “Company” or “Zee”) is an integrated
media company engaged in content production and aggregation for distribution through satellite, cable and internet.
ZTL’s principal business comprises developing producing and procuring television programming and films content
and facilitation of advertisement booking from India. It has also started broadcasting Indian Regional language
programmes on satellite television channels uplinked from India. Revenue streams for the company comprise of
advertisement revenue, subscription fees, sale of content and commission income. Asia Today Ltd. (ATL), Expand
Fast Holding Ltd. (EFHL), Zee TV USA Inc., Asia TV (Africa) Ltd., Asia TV Ltd., UK are engaged in delivering content
to Indian and South Asian communities in USA, South Africa, India, South Asia and European countries. Revenue
stream for these companies consist of advertisement and subscription revenue. Zee Turner Private Limited is a joint
venture with Turner International (India) Limited, engaged in distribution of pay TV channels to Indian homes through
cable operators and delivers satellite and internet content on cable to Indian homes. Siticable is a cable network
company, networked cable operators in around 40 major cities through out India and distributing TV Channels and
other programs and internet on cable.
Zee Interactive Learning Systems Limited is engaged in distribution of software learning products, imparting services
in information technology education and IT consulting.
2.
Basis of Consolidation
(a)
The consolidated financial statements of ZTL and its majority owned domestic and foreign subsidiaries are
prepared under historical cost convention in accordance with generally accepted accounting principles applicable
in India and the Accounting Standard 21 on “Consolidation of financial statements” issued by the Institute of
Chartered Accountants of India, in the same manner as ZTL for its separate financial statements, to the extent
possible, by figures recasted, rearranged or regrouped wherever considered necessary.
The accompanying consolidated financial statements include the accounts of the parent company and the following
subsidiaries, which includes the companies under its direct or indirect control. The results of subsidiaries acquired
or disposed of during the financial year are included in or excluded from the consolidated income statement from
the date of their acquisition or disposal.
Name of the Subsidiaries
Country of Incorporation
Dakshin Media Limited
Econnect India Limited
El Zee Television Limited
Kaveri Entertainment Limited
Programme Asia Trading Company Limited
Siti Cable Broadband South Private Limited
Siti Cable Network Limited
Zee Interactive Learning Systems Limited
Zee Turner Private Limited
Cable Broadcasting Network (Partnership firm)
Expand Fast Holdings Limited
Winterheath Company Limited
Zee Multimedia Worldwide Limited
Zee Telefilms (International) Limited
Asia Today Limited
Asia TV (USA) Limited
Asia TV (Africa) Limited
Software Supplies International Limited
Zee Multimedia Worldwide (Mauritius) Limited
Expand Fast Holding (Singapore) Pte Limited
Asia TV Limited
Zee TV USA Inc.,
Ambience Marketing Inc., (*)
Zee TV South Africa (Proprietary) Limited
Asia TV (Netherlands) Limited
Hokushan Trading Company Limited (**)
India
India
India
India
India
India
India
India
India
India
British Virgin Islands
British Virgin Islands
British Virgin Islands
British Virgin Islands
Mauritius
Mauritius
Mauritius
Mauritius
Mauritius
Singapore
United Kingdom
United States of America
United States of America
South Africa
Netherlands
Hong Kong
(*)
(**)
Extent of holding %
100
100
100
100
100
100
100
100
74
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Being dissolved on 28th March 2002.
Being hived off as on 31st March 2002.
83
2001-2002
Schedule 19 - Notes to Consolidated Financial Statements
Report
Notes to Consolidated Financial Statements
Annual
ZEE TELEFILMS LIMITED
3.
(b)
The consolidation of the financial statements of the parent company and its subsidiaries is done on line-by-line
basis by adding together like items of assets, liabilities, income and expenses. All significant intra-group balances
and intra-group transactions and unrealized profits are eliminated on consolidation.
(c)
The parent company and its Indian subsidiaries maintains its records and prepares its financial statements under
the historical cost convention, in accordance with Generally Accepted Accounting Principles in India while the
foreign subsidiaries maintains its records and prepare their financial statements in conformity with Generally
Accepted Accounting Principles prevalent in their countries of domicile. For inconsistencies in accounting
policies no adjustments are made in these consolidated financial statements, however significant
inconsistencies are disclosed wherever applicable.
(d)
In the seperate audited financial statements of Econnect India Limited, the auditor has expressed their
inability to comment on the appropriateness of the amortization relating to deferred revenue expenditures
amounting to Rs./Thousands 43,297/- considering their present level of operations. This item is considered
in consolidated accounts without any adjustments.
(e)
Minority interest in subsidiaries represents minority shareholder’s proportionate share of the net assets and the
net income of Zee’s majority owned subsidiaries.
(f)
As this is the first year of adoption of Accounting Standard – AS 21 on “Consolidated financial statements”,
the comparable figure for the previous year and the movement in shares of minority interest have not
been presented. It is also not practical to present consolidated cash flow statement since the consolidated
figures of previous year were not compiled as the opening balances which are relevant for compilation
of this year’s cash flow are not available.
Use of Estimates
In preparing the Consolidated Financial Statements, reasonable, prudent judgments and estimates have been made
that may affect the reported amounts of assets and liabilities, and contingent liabilities on the Balance Sheet date, as
well as income and expenses during the period under review. Assets and liabilities are recognized in the Balance Sheet
when it is probable that a future economic benefit will flow to the group or an outflow of resources embodying economic
benefits will result.
4.
Fixed Assets
(a)
(b)
5.
84
Intangible Assets
(i)
Intangible assets comprise mainly goodwill arising from consolidation, represents the excess of cost over its
investments in the subsidiary companies.
(ii)
Other intangible assets capitalized are software costs, portals, etc.
Tangible Fixed Assets
(i)
Tangible fixed assets are stated at historical cost less accumulated depreciation. Cost means cost of acquisition
/ installation and includes pre-operational expenses including borrowing cost.
(ii)
Capital work in progress is stated at amount spent/incurred on capital projects up to the date of Balance
Sheet.
(iii)
Assets acquired under Finance Lease are capitalized and the corresponding lease liability is recorded at an
amount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in
connection with the specific leasing activities directly attributable to activities performed by the company are
included as part of the amount recognized as an asset under the lease. Assets acquired under finance lease
prior to 1st April, 2001 by Indian companies are charged to Profit and Loss Account as permitted under
mandatory Accounting Standard AS-19 “Leases” issued by ICAI.
Depreciation
(a)
Depreciation is provided on tangible fixed assets other than land, including leased assets, at the rates adopted
in the accounts of respective subsidiaries on straight-line (except below (b)) basis from the time they are put to
use, so as to write off their costs over estimated useful lives of the assets. The aggregate gross block of
Rs./ Thousand 311,570 of foreign subsidiaries have charged depreciation at the rates other than those
prescribed under Schedule XIV to the Companies Act, 1956.
(b)
Net block of assets includes Rs./Thousand 981 depreciated at written down value method.
(c)
Leasehold land and improvements are amortized over the lease period.
(e)
Depreciation on other intangible assets are amortized over the economic useful life of the assets as estimated
by the management.
Inventories
Inventories of Raw Stock (Tapes and Cassettes etc.), Television Programs / Films under production, Stock in Trade
(Television Programs, Films and Rights, Audio Cassettes, Electronic Devices, Course Materials etc.) are valued at lower
of cost or estimated net realizable value.
Cost
Cost is taken on First in First Out (FIFO) or Specific Identification basis and in case of Films / Television Programs,
if with multiple rights, cost is allocated to each right as per management estimate.
Net Realizable Value
Costs are amortized / expensed as under and net realizable value is as estimated by management at unamortized cost.
Content - Trade
In case of Television programs / films etc. acquired or produced by the company for sale
(a)
Cost of programs like News, Current Affairs, Chat shows, Events etc. are fully expensed on its first sale;
(b)
Programs having re-exploitable value are expensed 90% on first sale and 10% expensed on its subsequent sale;
(c)
In case of the film produced / acquired by the company, cost of each right is expensed fully on first sale;
(d)
Other Programs, Film Rights and where limited telecast rights are sold are valued at unamortized cost.
Content – Broadcasting – Amortization
In case of Television programs / films, acquired or produced and used as a broadcaster for telecasting on its owned
television channels:
(a)
Cost of programs like News, Current Affairs, Chat shows, Events etc. are fully expensed on first telecast.
(b)
The cost of the program rights (including unamortized cost of content from trade) used for broadcasting are
amortized on straight line basis from its first telecast, estimated economic useful life of 36 months or license
period whichever is shorter. However, in case of certain subsidiaries the programs amounting to Rs./Thousand
236,418 are amortized over a shorter of license period or 36-60 months from the date of purchases.
(c)
The cost of telecast rights of film is amortized on straight-line basis taking its estimated economic useful life of
36-60 months or license period whichever is shorter, from its first telecast, while in case of certain subsidiaries
the films amounting to Rs./Thousand 552,861 are amortized over a shorter of license period or 36-60
months from the date of purchase.
(d)
One of the subsidiary has changed the inventory policy for rationalizing and realigning the accounting policy of
inventory with the parent company. The impact of change in policy resulted in profit for the year is higher
by Rs./Thousand 15,339/-.
Content - Audio Rights / Recorded Cassettes, Compact Discs etc.
(a)
(b)
7.
In the case of Copyrights of Audio Titles acquired and Recorded Cassettes, Compact Discs produced for sale;
(i)
Film based rights: 50% of cost expensed on audio release and balance after six months of film release or
when cost is recouped, whichever is earlier.
(ii)
Non-Film based rights: 50% of cost expensed on audio release and balance after six months of release or
when cost is recouped, whichever is earlier.
Recorded Audio Cassettes, Compact Discs: Cost means cost of production excluding cost of Audio Rights.
Revenue Recognition
(a)
Advertisement revenues gross of agency commission is recognized upon the telecast of advertisements.
(b)
Subscription revenues are recognized on a time basis on the provision of television broadcasting to subscribers.
Subscriptions paid in advance are recognized as deferred income in the Balance Sheet.
(c)
Sales are recognized on despatch of goods to customers.
85
2001-2002
No part of goodwill arising on consolidation is amortized whereas goodwill arising on acquisition is amortized over
a period of ten years and Rs./Thousand 2,633 amortized and charged to Profit and Loss Account during the year.
Report
6.
(d)
Annual
ZEE TELEFILMS LIMITED
8.
(d)
For services, revenues are recognized when the service is completed.
(e)
Television programs, production and acquisitions costs are net of recoveries.
(f)
Lease rentals are recognized as per the terms of lease agreements.
(g)
The education segment of the company is engaged in distribution of software learning products, imparting services
in information technology education and IT consulting services in association with several business partners. The
franchiser is under the obligation to pay the lump sum franchisee fees and royalty at fixed percentage of course
fees.
(i)
Course fees are recognized over the duration of course.
(ii)
The company recognizes the gross revenue of franchisee center as income and records franchisee share
as expenses over the duration of the course.
(iii)
The initial non-refundable franchisee fees are recognized on execution of the agreement.
(iv)
Course / content development cost for print delivery medium are expensed.
(v)
Revenue from software services is recognized when invoiced to the customer as per agreed terms.
Foreign Currency
(a)
Foreign Currency Transactions :
The functional currency of each entity in the group is its respective local currency. Transactions in foreign
currencies are recorded in functional currency at the rate of exchange prevailing at the date of the transaction.
Monetary assets and liabilities in foreign currencies are translated into functional currency at the rates of exchange
prevailing at the Balance Sheet date and gain or loss is recognized in the Profit and Loss Account.
(b)
Foreign Currency Translation and Exchange Rates :
Assets and liability accounts of foreign subsidiaries are translated into Indian Rupees at year-end rates and all
income and expenses are translated at yearly average rate except for inventories, which are converted at opening/
closing rates as the case may be. Off Balance Sheet items are translated into Indian Rupees at year-end rates.
Gains or losses resulting from such translation are reported as Foreign Currency Translation Reserves,
a separate component of shareholders’ funds (Reserves and Surplus).
(c)
For consolidation, the following exchange rates were used for conversion of currencies into Indian Rupee:
Currency
US Dollar
UK Pounds
South African Rands
UAE Dirhams
Singapore Dollar
9.
Balance Sheet
Year-end rates
Income Statement
Daily Average rate
48.89
69.72
4.31
13.31
26.51
47.82
68.66
4.96
13.02
26.33
Retirement Benefit Plans
Retirement benefit plans, pensions schemes and defined contribution plans, or funds are governed by the statutes of
the countries in which subsidiaries are located and contribution by the company to the fund or future liability on actuarial
valuation are charged to Profit and Loss Account.
Accrued liabilities for leave encashments is made by the parent and its subsidiaries wherever applicable based on
unavailed leave to the credit of employees in accordance with the service rules of the respective companies based on
the last salary drawn.
10.
86
Miscellaneous Expenditure
(a)
Capital issue expenses are deferred and amortized over a period of five to ten years. In case of foreign
subsidiaries such expenses are charged to Profit and Loss Account when incurred.
(b)
Other deferred revenue expenditures are amortized based on the management’s estimates of its enduring future
benefit generally over the period of 36 to 60 months.
(a)
(b)
(c)
Term Loan from Bank / Financial Institutions :
(i)
Rs./Thousand 1,859,299 is secured by first pari passu charges on ZTL’s advertisement commission receivable
and first mortgage and charge on all immovable and moveable properties both at present and future except
fixed assets located at Noida and an exclusive charge on program library of the company both present and
future programs and films of the parent company. The loans granted to subsidiary are also secured by way
of pari passu charge on advertisement commission receivables.
(ii)
Rs./Thousand 2,112,048 (USD 43,200,000) is secured by pledge of 100% of the share of Asia Today Limited
(held by Winterheath Company Limited - an indirect subsidiary) and an exclusive charge on all the assets
and bank account of that subsidiary.
(iii)
Rs/Thousand 58,103 (GBP 833,333) is secured by hypothecation of program and film rights of Asia TV
Limited UK. (an indirect subsidiary)
(iv)
Rs./Thousand 1,093,984 is secured against the first ranking mortgage and charges on all the movable and
immovable assets, assignment of the charges in respect of all licenses (present and future) of Siti Cable
Network Limited (SCNL), a subsidiary company except specific charge to banks for working capital facility
and financing of vehicles as stated in b (ii) and c below. Collaterally secured by pledge of 51% shares of
the SCNL held by ZTL and guaranteed by charge on assets (after amalgamation) of SCNL.
Working capital finance from banks :
(i)
Rs./Thousand 572,795 is secured by hypothecation of stock other than (a) (i) above and first charge on
immovable properties at Noida and second charge on immovable properties at Marol, Mumbai, all rank pari
passu with other financing banks and second charge on advertisement commission receivables.
(ii)
Rs./Thousand 45,557 is secured by way of first charge against hypothecation of capital equipments,
components stores, and book debts and collaterally secured by hypothecation of control room equipments
installed at various places in Delhi by SCNL and guaranteed by ZTL.
Hire purchase and lease finance :
Hire purchase and lease finance is secured by hypothecation of specific assets underlying the hire purchase /
lease.
12.
Cash and Bank Balances
Cash and bank balances include Rs./Thousand 6,000 in fixed deposits that has been pledged as security for credit
facilities granted to other company.
13.
14.
Debtors
(a)
Debtors are stated in the Balance Sheet at net realizable value. Net realizable value is the invoiced amount less
provision for bad and doubtful debtors. Provisions are made specifically against debtors where there is evidence
of a dispute or an inability to pay or irrecoverability.
(b)
Debtors includes Rs./Thousand 202,894 due from a trading partner as at Balance Sheet date. This account
receivable is outstanding for more than one year. No provison for doubtful debts has been made for this debtor
as the company and the trading partner have signed a Memorandum of Understanding subsequent to year end
to acquire the trading partner’s library of programming/film rights in settlement of amount due from trading partner.
Acquisitions
(a)
ZTL has entered into Memorandum of Understandings with the promoters of ETC Network Limited and Padmalaya
Telefilms Limited and other concerned parties for acquiring management control and majority stake in these
companies and paid aggregate advances of Rs./Thousand 633,520. Total commitment (net of advances) are
shown as capital commitment in note 20.
These transactions are completed after the close of the year in compliance with the main terms of such contracts
and other regulatory provisions.
87
2001-2002
Secured Loans
Report
11.
Annual
ZEE TELEFILMS LIMITED
(b)
One of the Indian subsidiary has acquired the business pertaining to Kannada channel “Kaveri” from Asianet
Media Limited for a consideration of Rs./Thousand 120,082. The net assets taken over are considered appropriately
in the accounts. The details are as under:
Rs./Thousand
15.
Purchase Consideration
Net Assets acquired
120,082
101,771
Goodwill on acquisitions
18,311
Restructuring
ZTL has initiated the process of restructuring of its subsidiaries (Indian and Foreign), and in pursuance thereof four of
its Indian subsidiaries; Kaveri Entertainment Limited, Dakshin Media Limited, Programme Asia Trading Company Limited,
El-Zee Television Limited, have filed the petitions with the High Court, Mumbai, for amalgamation with effect from
1st April 2001 with the company, and for adjustment of excess cost of Investments to the company over net asset value
of the amalgamating Company against the share premium and reserves of the Company.
ZTL has applied to Reserve Bank of India for restructuring of its foreign subsidiaries and approval thereof is awaited.
Restructuring of these companies will not have significant effect on its financials. One of the subsidiaries Hokushan
Trading Limited, HongKong has become defunct and has been divested.
16.
17.
Investments
(a)
Investments are classified as long term and stated at cost. Provision for diminution in value of long-term investment
is made if the diminution is other than temporary.
(b)
The fall in the market value of the quoted investments of Rs./Thousand 100,412 is not provided considering
the same as temporary.
Taxation
(a)
Current income tax is calculated on the results of individual companies in accordance with local accounting
practices and tax regulations.
(b)
Deferred tax assets and liabilities are recognized using the asset and liability approach for the expected future
tax consequences of temporary differences between the carrying amounts and the tax bases of assets and
liabilities. Unutilized tax losses will only be utilized where there is a likelihood of them being able to be offset
against tax in the future. For the calculation of deferred tax, the local tax rates likely to be in force are used for
the respective individual company where deferred tax accounting is adopted.
(c)
ZTL and its Indian subsidiaries have accounted for the deferred tax assets/liabilities of Rs./Thousand 91,706 as
at 1st April, 2001, by adjusting the amounts from the opening General Reserve in accordance with the transitional
provision, as laid down in Accounting Standard – 22 “Accounting for Taxes On Income” issued by ICAI.
(d)
The components of the deferred tax balances as on 31st March, 2002 are as under :
Rs./Thousand
(i)
(ii)
88
Deferred Tax Assets
Arising on account of timing difference in
Retirement Benefit
Provision for doubtful debts
Accruals allowable on payment basis
Unutilized tax losses
Other Provisions
Amount
Total
294,682
Deferred Tax Liabilities
Depreciation
Deferred Revenue Expenses
Other Provisions
275,001
81,157
1,178
Total
357,336
10,252
44,697
19,858
216,021
3,855
Leasing Liabilities
(a)
Finance Lease :
Long-term leases, which in economic terms constitute investments financed on a long-term basis (finance lease)
are recognized as assets and recorded under tangible fixed assets at their cash purchase value. The related
liabilities are included in secured loans.
Reconciliation of minimum lease payments and its present value:
2001-2002
18.
Report
ZEE TELEFILMS LIMITED
Minimum Lease Payments as at
Not Later than one year
Later than one year and not later than five years
Total
Less : Amount representing interest
Present value of Minimum Lease payment
Less : Amount due not later than one year
Amount due later than one year and not later than five years
(b)
5,181
5,515
10,696
2,014
8,682
4,033
4,649
Operating Leases :
Lease of assets under which the lesser effectively retains all the risk and rewards of ownership are classified as
operating leases. Lease payments under operating leases are recognized, as expenses are accrual basis in
accordance with the respective lease agreements.
The Company has taken on lease certain offices, residential premises and other facilities under cancelable
operating lease agreements that are renewable on a periodic basis at the option of both the lessor and the lessee.
The initial tenure of the lease generally is for 11 to 36 months.
Total expenses incurred and charged to Profit and Loss Account is Rs./Thousand 81,863.
The minimum rental payables under other operating leases that have initially or remaining non-cancelable lease
are as follows:
Year ending 31st March, 2002
19.
Rs./Thousand
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007 & above
198,765
164,357
147,860
21,592
13,980
Total
546,554
Contingent Liabilities
Rs./Thousand
(a)
(b)
(c)
(d)
(e)
Unexpired letter of credit
Guarantees and counter guarantees given by the company
Claims against the company not acknowledge as debts
Legal suits & claims filed against the company
Disputed direct taxes
132,911
5,968,117
146,009
Not Ascertainable
464,685
20.
Estimated amount of contracts remaining to be executed on capital account (Net of Advances) Rs./Thousand 18,314.
The committed investments (net of advances) amounting to Rs./Thousand 604,862.
21.
Commencement of Direct-to-Operator Project
ZTL’s Direct to Operator (DTO) project for uplinking and distribution of Television Channels in India has commenced
commercial operations on 24th February, 2002.
89
Annual
Rs./Thousand
As per Accounting Standard –16 on “Borrowing costs” and Guidance Note on Expenditure during construction period
issued by the Institute of Chartered Accountants of India, the borrowing costs and other expenses incurred up to the
date of set-up being Rs./Thousand 56,953 are capitalized as part of the cost of fixed assets and borrowing costs
incurred after the date of set up are charged to revenue and the expenses of Rs./Thousand 36,283 after set up are
deferred.
22.
Deployment of Funds
ZTL has been deploying its surplus fund as short-term demand loan from time to time and calling for repayment as and
when decides. The parties are regular in repayments of principle and interest and these loans are considered good.
23.
Related Party Disclosure
(a)
List of Parties where control exists :
The list of subsidiary companies is disclosed in Note no. 2 (a).
(b)
Other Related Parties with whom transactions have taken place during the year and balances outstanding
as on the last day of the year :
Associate Companies
Karma Network Limited (extent of holding 40%)
Aplab Limited (extent of holding 26.42%)
Centre Channel Private Limited (extent of holding 33%)
Dakshin Communication Private Limited (extent of holding 34%)
Other Related Parties
Agrani Convergence Limited; Ambience Advertising Private Limited; ASC Enterprises Limited; Mr. Ashok Goel;
Asian Satellite Broadcasting Private Limited; Briggs Trading Company Private Limited; Buddha Films Limited;
Churu Trading Company Private Limited; Continental Drug Company Private Limited; Cutting Edge Holdings
Private Limited; Cyquator Technologies Limited; Delgrada Limited; Essel Propack Limited; Essel Shyam
Communication Private Limited; E-City Entertainment (India) Private Limited; E-City Retail Private Limited; E-Cool
Gaming Solution Private Limited; Essel International Limited; Ganjam Trading Company Private Limited; Intrex
India Limited; Mr. Jawahar Goel; Mediavest Private Limited; Metropolitan Leasing Limited; Prime Publishing
Limited; Pan India Paryatan Limited; Playwin Infravest Private Limited; Premier Finance and Trading Company
Limited; Prajatma Trading Company Private Limited; Pratham Media Entertainment Private Limited; Rama Associates
Limited; Rankey Investment and Trading Company Limited; RKJ Woods Plantation Private Limited; Scarpetta
Investment Limited; Taleem Research Foundation; Tashi De Lek Entertainment Solution Private Limited; Turner
International India Limited; Ultra Entertainment Private Limited; UTN Worldwide Limited; Veena Investments Private
Limited; Wide Screen Holdings Private Limited; Zee Arabia LLC; Zee Australia, Zee Link Pty Limited; Zee MGM
Limited; Zee Sports Limited; Zee Network Employees Welfare Trust.
Directors / Key Management Personnel
Mr. Subhash Chandra; Mr. Laxmi Narain Goel; Mr. Ashok Kurien; Mr. Sandeep Goyal; Mr. D. P. Naganand;
Mr. R. K. Singh
Rs./Thousand
Particulars
Associates
Other Related
Parties
Key Management
Personnel
—
970
—
7,553
—
—
—
1,708
—
3,049
—
233,667
78,457
13,745
26,409
948
731,937
—
—
1,968
3,341
69,523
—
—
—
—
—
1,087
43,736
—
—
—
—
Transactions with Related Parties
Sale, Services and Other Recoveries (Net)
Purchase of Programs, Goods and Services
Advertisement Income
Commission Received
Commission Paid
Interest Received
Remuneration paid to Directors
Interest Paid
Dividend Received
Purchase of Fixed Assets
Sale of Fixed Assets
90
Investments
Loans, Advances, Deposit Given
Loans, Advances, Deposit repayment received
Deposit Received
Loans, Advances, Deposit repayment made
Balances as on 31st March, 2002
Investments
Debtors
Loans / Deposit / Advances given
Loans Taken
Creditors
Guarantees
Guarantees Received
Other Related
Parties
Key Management
Personnel
—
—
6,266
—
1,326
10
5,365,677
5,794,006
90,000
91,584
—
15,000
—
—
—
123,079
—
8,458
4,940
14
1,510
401,760
2,402,745
1,089,698
106,075
—
—
16,119
—
—
—
—
1,715,681
During the year, shares have been pledged by a related party for loan granted to the company, the same has not
been considered in the above disclosure requirements.
24.
Segmental Information
The company follows AS-17 “Segment Reporting” standard relating to the reporting of financial and descriptive information
about their operating segments in financial statements.
The company’s reportable operating segments have been determined in accordance with the company’s internal
management structure which is organized based on the operating business segments as described below.
Broadcasting and content, which principally consists of developing, producing and procuring television programming
and film content and delivering via satellites, thereby earning revenues by way of sale of content, advertising and
subscription revenues.
Access, which principally consists of distributing content through satellite, cable television systems and internet.
Education, which principally consists of distribution of software learning products, imparting services in information
technology education and IT consulting services in association with several business partners.
(a)
Business Segment
Rs. / Thousand
Revenue :
External Sales
Inter-segment Sales
Total Revenue
Result :
Segmental Result
Operating Profit before
interest and tax
Interest Expenses
Interest Income
Profit before tax
Current tax – Current year
Current tax – Previous year
Deferred tax
Prior Period Expenses
Profit After Tax
Minority Interest
Net Profit
Broadcasting &
content
Access
Education
Others
Elimination
Consolidated
Total
9,120,553
98,971
9,219,524
1,130,880
172,093
1,302,973
273,606
—
273,606
237,354
—
237,354
—
(271,064)
(271,064)
10,762,393
—
10,762,393
3,068,736
(115,701)
(174,843)
27,019
8,661
2,813,872
3,068,736
750,659
749,630
3,067,707
884,301
145,032
(9,702)
22,299
2,025,777
342
2,025,435
(115,701)
30,551
47,164
(99,088)
3,773
—
(12,912)
(1,740)
(89,209)
(28)
(88,181)
(174,843)
19,483
1,502
(192,824)
—
—
—
1,562
(194,386)
—
(194,386)
27,019
—
—
27,019
—
—
—
—
27,019
—
27,019
8,661
(45,242)
(45,242)
8,661
—
—
—
—
8,661
—
8,661
2,813,872
755,451
753,054
2,811,475
888,074
145,032
(22,614)
22,121
1,778,862
314
1,778,548
91
2001-2002
Associates
Report
Particulars
Annual
ZEE TELEFILMS LIMITED
(b)
Other Segment Information
Rs. / Thousand
Broadcasting &
content
Education
Others
Elimination
Consolidated
Total
Fixed Assets
(i)
Gross Block
Less: Depreciation
Net Block
(ii) Capital work in progress
30,069,168
(355,718)
29,713,450
103,007
4,507,951
(380,790)
4,127,161
1,381,331
98,968
(26,921)
72,047
652
—
—
—
—
—
—
—
—
34,676,087
(763,429)
33,912,658
1,484,990
Current Assets Loans and
Advances
(i)
Inventories
(ii) Sundry Debtors
(iii) Cash & Bank Balances
(iv) Loans & Advances
2,325,927
6,079,847
1,733,967
4,774,495
173,242
915,973
145,274
951,334
112,619
51,255
6,294
27,327
—
—
—
8,536
(10,751)
(757,794)
—
(547,550)
2,601,037
6,289,281
1,885,535
5,214,142
14,914,236
2,185,824
197,495
8,536
(1,316,095)
15,989,996
3,159,715
11,754,521
7,246,005
116,106
215,138
113,131
1,468,905
716,918
1,351,043
178,576
142,198
85,191
159,891
37,604
407,691
—
—
16,733
—
8,536
—
—
—
—
(1,254,678)
(61,417)
(514,123)
—
—
—
3,533,833
12,456,163
8,490,616
294,682
357,336
215,055
283,035
70,923
49,701
—
—
403,658
Total
Less: Current Liabilities &
Provisions
Net Current Assets
Loan Funds
Deferred Tax Assets
Deferred Tax Liabilities
Depreciation
Non Cash Expenses Other
than Depreciation
(c)
Access
Revenue by Geographical Market
The geographical segments considered for disclosure are India and Rest of World.
(a)
The revenues are attributable to countries based on location of customers.
Rs./Thousand
India
Rest of World
(b)
8,569,606
2,192,787
Segment assets and liabilities are disclosed based on the countries of incorporation of respective companies.
Rs./Thousand
India
Rest of World
25.
Net Assets
Intangibles
9,986,417
6,140,994
3,345,545
28,380,855
Earning Per Share
In accordance with Accounting Standard – 20 “Earnings Per Share” issued by the Institute of Chartered Accountants of
India, basic earnings per share is computed using the weighted average number of shares outstanding during the year.
As per our attached report of even date
For and on behalf of the Board
Mohan Bhandari
Partner
For MGB & Co
Chartered Accountants
Sandeep Goyal
Ashok Kurien
Nemi Chand Jain
Whole Time Director
Director
Director
Hitesh Vakil
Vikas Gupta
Director – Finance
Company Secretary
Mumbai
24th September, 2002
92
The place where the action is...
“Gadar
”
- th e b o
ard roo
m
“Sa Re Ga Ma Pa” - the meeting room
“Khana Khazana” - the lunch room
The wor
s’
Visitor
lounge
ons
k s ta ti
The pat
h
to creat
ivity
The work-out stations
ZEE TELEFILMS LIMITED
Registered Office
Continental building, 135,
Dr. Annie Besant Road,
Worli, Mumbai 400 018.
Visit us at www.zeetelevision.com