march against mediocrity - WELCOME TO ENIL · A milestone in Mirchi's March against Mediocrity is the IRS 2009, R1 findings. The results clearly demonstrate, with no iota of ambiguity,

Entertainment Network (India) Limited

Annual Report 2008-09

marchagainstmediocrity

In this Annual Report we have disclosedforward-looking information to enableinvestors to comprehend our prospectsand take informed investment decisions.This report and other statements - writtenand oral - that we periodically makecontain forward-looking statements thatset out anticipated results based on themanagement's plans and assumptions.We have tried wherever possible toidentify such statements by using words

such as 'anticipate', 'estimate', 'expects','projects', 'intends', 'plans', 'believes' andwords of similar substance in connectionwith any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realized,although we believe we have been prudentin our assumptions. The achievement ofresults is subject to risks, uncertainties andeven inaccurate assumptions. Should

known or unknown risks or uncertaintiesmaterialise, or should underlyingassumptions prove inaccurate, actualresults could vary materially from thoseanticipated, estimated or projected.Readers should bear this in mind. Weundertake no obligation to publicly updateany forward-looking statements, whetheras a result of new information, future eventsor otherwise.

Disclaimer

1

c o n t e n t s

28 Corporate Information

29 Notice

31 Directors' Report

38 Report on Corporate Governance

54 Management Discussion & Analysis

65 Auditors' Report

69 Profit and Loss Account

70 Cash Flow Statement

71 Schedules to Financial Statements

90 Statement Pursuant to Section 212 of the Companies Act, 1956

91 Auditors' Report on Consolidated Financial Statements

92 Consolidated Balance Sheet

93 Consolidated Profit and Loss Account

94 Consolidated Cash Flow Statement

95 Schedules to Consolidated Financial Statements

02 March against Mediocrity

20 The ENIL DNA

22 Financial Snapshot

16 A few words from A. P. Parigi, Managing Director

24 Year at a Glance

26 Board of Directors

68 Balance Sheet

2

Every organisation, once

in its lifetime, needs to

create magic.

3

As a brand, Mirchi excelled in 2008-09. Its listenership was at an all time high - 40million people. Its lead over its nearest competitor was more than double. Its marketshare in revenue terms remained in excess of 40% of the private FM industry. As theeconomic downturn hit the advertising industry, its market share increased further!Competition was still around, but far more muted.

Mirchi has always set standards. In 2009, this paradigm shift was based on a newmantra: The March against Mediocrity.

The March against Mediocrity is a continuing process. It aims to keep raising thebar periodically. With just one objective. Creating value for its shareholders.Shareholders who have reposed their faith in the Company and brand ever since thestart of its journey in the year 2000. That distinguished group of shareholders whocontinue to repose their faith - inspite of the meltdown.

The March against Mediocrity has just begun. Join us to see how it plays out overthe years.

4

The March against Mediocrity started with the Mirchi Kaan Awards - in its 5th year

since launch - took upon itself the task of giving a boost to creativity and putting a halt

to mediocrity in radio advertising. The jury, as one would guess, was very selective -

in fact severely harsh - in evaluating the creative quotient of radio ads. This approach,

in a way, re-set standards to avoid possible gaps in creativity. The jury lead managed

the March against Mediocrity.

The March against Mediocrity as a concept was given shape and body by our partners

McCann who have navigated our brand since the year 2000. Yes, the communication

program, collaterals and supplementary inputs were outstanding. A great idea paves

the path to greatness.

When we look back at the quality of radio advertising creatives, there is no doubt that

there has been a tremendous improvement over the last 5 years. In no small measure,

the Kaan Awards were responsible for inculcating this kind of culture. The proof shines

bright and strong. Today, radio has carved out its own space in communication terms.

The 5th Mirchi KaanAwards is whatstarted it all !

The 5th Mirchi KaanAwards is whatstarted it all !

5

No more Sholay spoofs. No more TV copies. No more read-out advertising. Today, radio

has become an integral part of most creative campaigns; they spell originality.

The Kaan Awards also struck the right chord. Vir Das demonstrated the unique richness

of the audio medium while entertaining audiences. His show has now become an

industry standard. With his irreverent style, he had the entire audience - comprising the

biggest names in the advertising industry - in splits!

The March against Mediocrity was led by the jury. With the biggies of the advertising

industry like Prasoon Joshi, Balki, Piyush Pandey, Mohammad Khan, "Pops" Sridhar,

"Chax" KS Chakravarthy, Bobby Pawar, Ravi Deshpande, Priti Nair, "Aggy" Agnello Dias,

Josy Paul, Ashish Khazanchi, Ramanuj Shastry, Suguna Swami, Sunil Thoppil, Ramesh

Ramanathan, Deepa Krishnan, Senthil Kumar, Gullu Sen….and not to forget, those talent

leaders who belong to the advertising fraternity and have made a mark in the wider

entertainment field - like Pradeep Sarkar, Shantanu Moitra, Rajat Dholakia, Ram

Sampath, Rekha Nigam and Prahlad Kakkar. You will agree, it is next to impossible to

have a jury with this distinguished background.

6

For a media brand likeMirchi, the ultimatetest of popularity isits listenership.

For a media brand likeMirchi, the ultimatetest of popularity isits listenership.

7

While Mirchi has always dominated radio listenership in the country, a

challenge cropped up in the 3rd quarter of 2006-07 with the advent of

new competitors entering the market. The spread of radio increased

from a mere 22 stations operating in 12 towns to more than 250 in about

80 towns. Mirchi's own network grew from 7 stations to 32. The

challenge for Mirchi was to replicate its culture - if one were to pick a

single rationale for its continued dominance, it would be its culture.

The launch of the new stations was completed in February 2008. In

2009, the senior management team was preoccupied with training the

teams, fine-tuning the product, setting higher goals, and raising

performance levels.

A milestone in Mirchi's March against Mediocrity is the IRS 2009, R1

findings. The results clearly demonstrate, with no iota of ambiguity, that

Mirchi continues to be the #1 brand in the country. It has achieved clear

leadership in Delhi, Mumbai, Kolkata, Ahmedabad, Pune, Hyderabad

and other big markets. With more than 40 million listeners, we are more

than double the next private FM Radio player. Mirchi's competition, in

a way, is Mirchi's own track record.

During the year, we wona plethora of awards. A recognition of thestrength of the brandand the creative talentof our teams.

During the year, we wona plethora of awards. A recognition of thestrength of the brandand the creative talentof our teams.

8

In December 2008, Mirchi scaled another peak when its website was voted the most

popular TV and Radio site in India. The survey was conducted by Metrix Labs and

AC Nielsen. The survey had 1.5 million participants. We join the hall of fame - with

sites like ndtv.com, aajtak.com and google.com among others! The success of

the website reflects the overall popularity of Mirchi, the brand. Please do visit

http://www.websiteoftheyear.co.in/winners.php

And then of course the annual IRF awards. In 2008, the Mirchi team won as many as 4

awards for various categories in the programming domain.

Mirchi was voted the No. 1 media brand, ahead of iconic brands like The Times of India

and Star Plus. This unique honour was bestowed on Mirchi by the Pitch-IMRB group's

survey of the top service brands of the country. This endorses the vote of trust that the

brand has built amongst its listeners.

9

10

Mirchi believes CSR programmes have to benefit the beneficiaries far more than

the brand. Mirchi's CSR initiatives are designed to further enhance the self-

esteem of the beneficiaries. Attempt to improve their quality of life. Mirchi was

privileged recently to launch a programme for the visually impaired.

The CSR initiative was lead managed by one of the talent leaders of the company.

The efforts were directed in designing and promoting "audio books" - this initiative

has already reached hundreds of schools across the country. What is unique

about this initiative is the involvement of various organisations and individuals

who devoted their time and their voice to the movement. As momentum gathered,

we expanded the footprint of this programme.

In terms of specifics, we made

the first "audio film" - an audio

rendition of the film "Hari Puttar"

- a kids film. The film was played

out to a gathering of 1200

children at the Siri Fort

For the first time in

2008–09, Mirchi Starteda major initiative, buton a low key.

For the first time in

2008–09, Mirchi Starteda major initiative, buton a low key.

11

auditorium in New Delhi. Subsequently, the audio film has travelled across the

country. We are now exploring ways and means to build a dialogue with movie

producers and distributors to join us in sustaining such initiatives.

It is our endeavour to deliver a sustained programme rather than devote time to

sharing our achievements. The strong and silent often win. A case in point is the

Pegasus Awards where Mirchi was the recipient of a silver award - that too, in

its very first year of participation. Mirchi is now in the company of like minded

established business houses who have been known for their dedication to social

work over the decades.

Yes, this recognition has got the creative minds in the organisation even more

excited to achieve greater heights.

12

During the year,we organised theFirst ever MirchiMusic Awards.

During the year,we organised theFirst ever MirchiMusic Awards.

13

It sounds rather strange that the talented music fraternity who has entertained audiences forseveral decades did not have any form of recognition. It is strange because it is wellacknowledged today that the heart and soul of the film industry is its music. The Mirchi MusicAwards can take credit for making that dream a reality.

Why Mirchi? The answer is: Our relationship in the last 10 years has gained tremendous width anddepth within the music fraternity. We have always stood by them. We have always been protectiveof this community. We were more than willing to join the war against piracy. We do have ourdifferences. For instance, on royalty issues. However, it has never translated into our reneging onour financial commitment to the fraternity. We believe in relationships and this manifested itselfin several ways at the Mirchi Music Awards ceremony.

There was a time not so long ago when our tag line spelt out our commitment. ‘Aapka ApnaBollywood Radio Station’ was a tagline that even today evokes a strong sense of associationwith the music and film fraternity. The music fraternity on their part has supported us by breakingthe very latest of their music on our channels.

Now comes the grand design of the awards. While the parentage of the idea was that of Mirchi,the design was created and crafted by the music fraternity itself. The jury led by Chairman, JavedAkhtar, would make any recipient proud - the other members comprised the best in the industry:Prasoon Joshi, Anu Malik, Shankar Mahadevan, Louiz Banks, Lalit Pandit, Kavita Krishnamurthy,Sadhana Sargam, Sonu Niigaam, Kailash Kher, Suresh Wadkar, Rakeysh Omprakash Mehra,Ramesh Sippy and Kunal Kohli. The jury set tough standards. They were sensitive to the fact thatthey could be winners themselves. This made them welcome Ernst & Young as process auditors- to ensure that the best global practices were adopted.

The Mirchi Music Awards were telecast on Star Plus. The show attracted nearly 11.5 millionviewers in its first broadcast - an average TRP of 1.6. It reinforced the belief that music eveningsand music awards will always entertain larger groups of audiences as compared to movie showsand movie awards.

In the end, what transpired was truly a dream. When did one ever witness a galaxy of talentcongregate the same evening at the same venue at the same time? Almost the entire musicindustry attended the function.

One man who hasworked tirelesslytowards buildingthe stature andprospects of theradio industry is

A. P. Parigi – theManaging Directorof ENIL.

One man who hasworked tirelesslytowards buildingthe stature andprospects of theradio industry is

A. P. Parigi – theManaging Directorof ENIL.

14

From the time he joined ENIL - more than 9 years ago - till now,

Mr. Parigi (the title "Mr" is used exclusively for him in the

organisation where everyone else is strictly on first name terms!)

has worked at resolving the fundamental issues facing the radio

industry. First it was the government's licensing structure which

got resolved when Phase II was announced. Then there were

similar issues like music royalty which translated into a healthy

tripartite dialogue between the government, the music industry and

the radio industry. This initiative holds promise. What may go

unnoticed is the very revival of an almost dead medium like FM

Radio in India. When he took over the leadership of the industry,

neither Parigi nor Radio Mirchi ever imagined that the face of

entertainment industry in India would change so dramatically. FM

Radio today is a free to air medium and influences the bio-clock of

15

millions of listeners across the country.

Mr. Parigi is presently Chairman of the FICCI Radio Forum.

Mr. Parigi's approach to problem solving has always been through

teams. He hired the best. Inspired them. Led through years of

adversity. Raised finances when none were available…he was

always at the forefront to battle any issue confronting the industry

and ENIL.

In 2009, The Severino Center for Technological Entrepreneurship at

the Lally School of Management & Technology, Rensselaer

Polytechnic Institute honoured Mr. Parigi as the "William F. Glaser

'53 2009 Rensselaer Entrepreneur of the Year." Mr Parigi is the first

Indian to receive this global recognition from the Center.

16

A few words from

A. P. Parigi,

Managing director

A few words from

A. P. Parigi,

Managing director

17

Dear Shareholders,

We are going through tough times. The global economy is still reeling

under the impact of a major slow down. The scenario in India is no

different. A fall in demand has led to reduced sales and has impacted

the topline of many businesses. Most companies were forced to

adopt drastic measures through cost cutting initiatives to protect

profitability.

While advertising budgets are considered critical in the long term for

Brands; many believe they are dispensable in the short term,

consequently revenue models of businesses based on advertising

spends are the first to get curtailed and the last to recover when

economies revive. The reduction in advertising budgets impacted all

media - Print, TV , Outdoors and Radio.

For the year ended March 31, 2009, your company grew revenues

marginally to Rs. 228 crores on a standalone basis (radio). The

EBITDA for the period was Rs. 50.7 crores - a de-growth of 7% over

last year. The EBITDA margin has dropped from 24% last year to 22%

this year. While our top line and profits have suffered, we have been

able to maintain a high revenue share of 41% of the private radio

market in these testing times.

While the slowdown has caused anxiety for media companies,

I believe that the long term growth trajectory of the media sector

remains unaffected in India. The fundamentals of the Indian economy

remain strong. India has a young population, an economy driven by

domestic consumption, a low advertising to GDP ratio and great

geographical expanse; a lot of which is still media dark. Hence the

opportunities for the media industry in India are immense. Your

company is uniquely placed to take full advantage of these

opportunities. Radio still reaches less than 90 towns and cities in the

country. As and when Phase III FM broadcast policy is announced

and implemented this number will rise to nearly 350 towns. Radio is

a vibrant and energetic medium and appeals to the youth making it

lucrative for advertisers. Radio's share in the total advertising spends

in the country is still small compared to other "highly evolved radio"

markets. Inspite of a temporary setback, your trust and confidence

in us, I believe, will encourage us to continue to create value in these

challenging times.

This year your company has worked closely with AROI (Association

of Radio Operators for India) to impress upon the Regulator and the

Government the need to improve the framework governing the FM

industry. We have worked with the Ministry of I&B as well as with

TRAI to expedite development of a new framework. New initiatives

are likely to be announced in the Phase III policy: broadcasters may

be allowed to operate multiple stations in a city, offer news and

current affairs through Prasar Bharati, there would be possibility of

tradability of licenses, and total networking between stations in

different cities. We believe that these initiatives would spur a new

phase of growth for the Private FM industry.

The downturn has provided us an opportunity to reinvent ourselves.

We have taken steps to ensure that we further improve our

efficiency. Our processes are more robust and are now backed by

SAP - technology. Rightsizing of the organisation has been done to

improve productivity. We have also focused on reducing non core

SPEED BREAKER ON THE HIGHWAY

18

expenses. These steps have helped us reduce the impact of the

downturn on our bottom line.

Radio Mirchi continues to be the station of choice amongst FM

listeners. Among other factors it is our innovation and quality

standards that have enabled us to retain our leadership status. The

recently declared IRS 2009, R1 results have placed Mirchi as the

largest, most heard private radio station in the country. With over 40

million listeners, Radio Mirchi is almost twice the size of the nearest

competitor.

Our success in sustaining listenership has been the strength of the

Brand. I am pleased to share with you that Radio Mirchi was

recognized as the No. 1 Media Brand in the country - ahead of such

iconic brands like The Times of India (the parent of Radio Mirchi) and

Star Plus. The survey was conducted by Pitch magazine and IMRB.

Further, the radiomirchi.com website has been voted the most

popular TV and Radio site in India. The survey was conducted by

Metrix Labs and AC Nielsen and had 1.5 million participants. Mirchi

joins the hall of fame with sites like ndtv.com, aajtak.com and

google.com among others.

We are focussed on making ENIL a torch-bearer of revenue and

profit leadership. While we are committed to generating greater

wealth for our shareholders, we are equally focussed on ensuring

high standards of corporate governance and undertaking CSR

programmes.

During the year, our CSR programmes made tangible strides in a very

short span of time. One of our initiatives - 'Audio Films for the Blind'

- won the CSR award in the Silver Category of the Reader's Digest,

Pegasus CSR Awards 08-09 out of 40 shortlisted participants.

Times OOHThere have been several developments in the OOH media space. I

have tried to capture some of the key developments. As you are

aware with the entry of organised players like Times OOH, this

category is gradually attaining visibility and acceptability among the

advertising fraternity. New technologies have been introduced by

your company both at Delhi and Mumbai airports. New standards of

excellence have been established by way of special lighting

technologies in the display medium in street furniture.

Times Innovative Media Limited achieved a 11% growth on a

year-on-year basis. But for the drastic fall in outdoor media spends,

your Company would have achieved a far higher growth rate.

However in the context of costs and profitability your company

undertook measures to reduce costs and simultaneously build

medium to long term viability of the business. For e.g. we exited

certain loss making media properties as we believed that the break

even would be much longer than we had anticipated. We further

implemented a complete cost structure rationalization program. The

silver lining however is the substantial benefits that have accrued to

the category and the industry over the last 12 months. For instance,

RADIO MIRCHI CONTINUES TO BETHE STATION OF CHOICE AMONGSTFM LISTENERS. AMONG OTHERFACTORS IT IS OUR INNOVATIONAND QUALITY STANDARDS THATHAVE ENABLED US TO RETAIN OURLEADERSHIP STATUS.

19

the average tenure of a media property leased out by any licensor

has drastically improved and today it could be anywhere between 7

to 10 to 15 years as compared to tenures which were earlier 2, 3 and

5 years. Further the bids for acquiring media properties are far more

rational and realistic bringing a greater sense of partnership between

the licensor and licensee; with focus on profitability of contracts.

A strong characteristic of this industry relates to it being both an

infrastructure and a media business. The projects have a far longer

gestation period than other advertising mediums. Your company,

today, is well past its infancy but continues to be in the investment

phase. I would like to share with you that your company received an

award for Brand Leadership by Asia Brand Congress in September

2008. You will be equally pleased to learn that the major

infrastructure project bottlenecks at both the airports have been

resolved. Today, both the Mumbai and Delhi airports are well poised

to attract the interest of major domestic and global brand managers.

360o - EVENT MANAGEMENTDuring the year, your Company has restructured the event business

to pursue the path of focusing on value-added events and

profitability. We have therefore developed the IPR owned business,

or in other words developed events whose brands we own and

whose business we can build in the years to come. Also, we are now

restricting our domain to the higher end client businesses. This

affords us the luxury to work with much smaller teams and

overheads. I am delighted to report that in the year 2008-09 we

launched three more properties in the events business - Ford Super

Models, Teen Diva and the Spell Bee Contest. So, with three new

properties, today we have a bouquet of six IPR properties. There is a

strong possibility that in under 5 years we could have a bouquet of 20

Event Brands. We believe, this augurs well for the Event

Management business.

I am confident that India's growth trajectory will revert to the 9% plus

levels in the next few years. India is poised for decades of fast

growth. A look at today's developed countries shows that they have

all experienced continued high growth rates in the past. Japan had

an average GDP growth rate of 10% in the 60's. China has been

experiencing a greater than 10% growth for over 10 years. South

Korea grew at an average of 8.7% from 1960 to 1989. Singapore's

average growth rate has been 8% between 1960 - 1999.

It would not be wishful thinking if we expect India to maintain and

achieve higher growth rates similar to Japan, China, South Korea

and Singapore. It is this belief that tells us that the recent slowdown

is just a speed breaker on the highway.

I wish to place on record our appreciation of your continued support

and encouragement. I also wish to thank the advertising fraternity,

our listeners, regulatory bodies, our team members and other

stakeholders for their belief and commitment to ENIL.

A. P. Parigi

IT WOULD NOT BE WISHFULTHINKING IF WE EXPECT INDIA TOMAINTAIN AND ACHIEVE HIGHERGROWTH RATES SIMILAR TO JAPAN,CHINA, SOUTH KOREA ANDSINGAPORE. IT IS THIS BELIEF THATTELLS US THAT THE RECENTSLOWDOWN IS JUST A SPEEDBREAKER ON THE HIGHWAY.

the enil dna

Entertainment Network (India) Limited (ENIL)

is one of India's leading Entertainment and

Media companies. Founded in 1999, it is a

subsidiary of Times Infotainment Media

Limited (TIML), the holding company

promoted by Bennett, Coleman & Co. Ltd.

(BCCL) - the flagship company of The Times

of India Group.

ENIL operates in the entertainment and

media space through broadcasting of FM

radio, participating in the Out-of-Home media

and Experiential Marketing.

ENIL has two subsidiaries - Times Innovative

Media Limited and Alternate Brand Solutions

(India) Limited.

OPERATIONS

ENIL carries its FM radio broadcasting across the country under the

brand name 'Radio Mirchi'. In existence since 2001, today it operates 32

stations across 14 states in 10 different languages.

Times Out-of-Home Media operations are carried under our subsidiary

Times Innovative Media Limited. It has established its footprint across

major cities, which include Delhi, Mumbai, Kolkata, Bangalore,

Hyderabad, Chandigarh and Jaipur.

The Experiential Marketing and below the line solutions (BTL) is carried

under the brand 3600. This business is carried by our wholly owned

subsidiary, Alternate Brand Solutions (India) Limited (ABSL). It manages

large format events as well as own event brands.

the enil dna

20

VISION

To be a leading city-centric media

company by delivering unique

audiences through media vehicles like

FM radio, experiential marketing and

Out-of-Home media.

CULTURAL VALUES

• Fun and Responsibility

• Informed Risk Taking

• Constructive Confrontation

• Non-Hierarchy driven Organisation

INDIAN EXCELLENCE IN RADIOAWARDS 2008

1. RJ of the Year (Bengali) – Mir & Arnabi

2. Best Radio Promo – In House (Hindi) –

Raksha Bandhan 2007

3. Best Radio Promo – In House (Bengali)

– Anti Cricket Prompting Promo

4. Best Radio Promo – In House (Kannada)

– Pori Tapori Jingle

21

22

Consolidated

(Rs. in Lacs)

Financial SnapshotFinancial Snapshot

PARTICULARS 2008-09 2007-08 2006-07

Results of Operations

Total Income 42,928.22 41684.34 23,646.71

Earnings before Interest, Taxes,

Depreciation and Amortisation (EBITDA) (613.28) 3,548.60 4,483.88

Depreciation 5,255.70 3,628.14 1,874.73

Interest 1,444.03 1,739.79 180.27

Profit/(Loss) before Tax (7,313.01) (1,819.33) 2,428.88

Net Profit/(Loss) (6028.63) (1,708.92) 2,514.14

Financial Position

Equity Share Capital (including share application money) 4,767.04 4,765.60 4,766.02

Reserves and Surplus 33,281.44 39,303.79 24,392.17

Networth 39,669.40 44,069.39 29,158.19

Minority Interest 1,987.13 3,247.27 -

Investments - 300.00 252.29

Gross Block 43,915.52 39,029.57 28,810.16

Net Block (including Capital work-in-progress / Advances) 31,822.78 31,821.67 30,250.74

Net Current Assets 22,097.68 33,908.95 9,768.50

Stock Information

No. of shares 47,670,415 47,656,060 47,584,575

Earnings per share (Basic) (In Rs.) (12.65) (3.59) 5.29

Earnings per share (Diluted) (In Rs.) (12.65) (3.59) 5.28

23

total income

(Rs. in Lacs)

23,646.71

41,684.3442,928.22

EBITDA MARGIN (%)

19%

9%

-1%

ROCE (%)7%

-8%

PAT MARGIN (%)

11%

-4%

-14%

2006-07 2007-08 2008-09

2006-07 2007-08 2008-09 2006-07 2007-08 2008-09

2006-07 2007-08 2008-09

0%

24

25

26

Mr. Vineet Jain, Chairman

A trustee and board member of several organisations, Mr. Vineet Jain - Non Executive Director (ENIL) holds a

Bachelor's degree (B.Sc) in International Business Administration in Marketing from Switzerland.

As the Managing Director of Bennett, Coleman & Co. Ltd., Mr. Jain is acknowledged as a thought leader in

transforming the Times Group from a publishing house to a diversified media conglomerate. He has made a

significant difference to the landscape of new age media in India. His leadership in the domain of the Internet,

Radio and Out of Home has added a new impetus to the categories.

He is on the managing committee of philanthropic organisations viz. The Times Foundation, The Times of India Relief Fund and the S. P. Jain

Foundation.

Mr. Jain is also a board member of The Press Trust of India Ltd.

Mr. N. Kumar, Director

Mr. N. Kumar, a Graduate Engineer in Electronics and Communication, is the Vice-Chairman of The Sanmar

Group, a well known Industrial Group in India that has interests in Chemicals, Engineering and Shipping. He is

the Honorary Consul General of Greece in Chennai and the Honorary Business Representative of the

International Enterprise Singapore.

Mr. Kumar is an active spokesperson of industry and trade and was the President of the Confederation of Indian

Industry (CII), a leading industrial body. He also participates in various other apex bodies. He is also on the

Board of several public limited companies. Mr. Kumar carries with him vast experience in the sphere of Technology, Management and Finance.

Mr. Ravindra Dhariwal, Director

Mr. Ravindra Dhariwal is the Executive Director and CEO, Bennett, Coleman & Co. Ltd. Prior to this Mr. Dhariwal

was the Vice President, Franchise, SE Asia, PepsiCo International.

During his illustrious career he has held various positions at companies like Hindustan Lever Limited, Rexona

Prop. Limited, Sydney, Pepsi Foods Industries and PepsiCo International. He holds a B. Tech degree from IIT

Kanpur and a post graduate diploma in management from IIM, Calcutta.

Board of directorsBoard of directors

27

Mr. Deepak M. Satwalekar, Director

Mr. Deepak M. Satwalekar was, until November 2008, the Managing Director and Chief Executive Officer (MD

& CEO) of HDFC Standard Life Insurance Company Ltd. Earlier, Mr. Satwalekar was the Managing Director of

HDFC, the country's largest mortgage lender.

Mr. Satwalekar received a B.Tech. in Mechanical Engineering from IIT, Bombay and an M.B.A. from the

American University. Mr. Satwalekar has been a consultant to the World Bank, the Asian Development Bank,

and other bilateral and multilateral agencies and has worked in several countries.

Besides being a recipient of the "Distinguished Alumnus Award" from IIT, Bombay, he is on the Advisory Council of the IIT, Bombay. He has

been a member of/chaired several industry, Reserve Bank of India and government expert groups.

Mr. Ravindra Kulkarni, Director

Mr. Ravindra Kulkarni holds a Masters degree in Law from University of Mumbai. Having been in the legal arena

for nearly four decades, Mr. Kulkarni has vast experience as a legal practitioner particularly on matters relating

to foreign collaborations, joint ventures, mergers and acquisitions, capital markets, public offerings for listing

of securities in India as well as in international markets, infrastructure projects etc.

He is a national partner of M/s. Khaitan & Co., one of India's leading law firms and heads their Mumbai office.

He is on the Board of several listed companies as an independent director. He is also a member of the Advisory

Committee and a faculty member of the Post Graduate Diploma Course in Securities Law at the Government Law College, Mumbai.

Mr. A. P. Parigi, Managing Director

An alumnus of the Delhi School of Economics and Faculty of Management Studies, of the University of Delhi,

he has, for the past 2 decades, held senior positions in various industries. Prior to joining the Times Group, he

was the CEO of BPL Mobile, Mumbai.

A firm believer in team work, he invests significant time with his people on the ground creating and executing

winning strategies. He was awarded the 2007 IMM (Institute of Marketing & Management) Award for

Excellence as Top CEO-2007 at the 34th World Marketing Congress. In April 2009, he was awarded The William

F. Glaser'53, 'Rensselaer's Entrepreneur of the Year', in Troy, Albany , USA.

Apart from being a guest speaker at various forums, Mr. Parigi has been actively serving on several committees of associations like Federation

of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industry (CII). In the past, he has been an active member

of the Cellular Operators Association of India (COAI), besides chairing several seminars at global forums like The World GSM Congress 2000.

Mr.Parigi serves on the Boards of several companies including Absolute Radio-UK, Times Global Broadcasting Company Ltd, Times Internet

Ltd. and Worldwide Media Private Ltd.

CORPORATE INFORMATION

BOARD OF DIRECTORS (As on May 19, 2009)

Mr. Vineet Jain, Chairman

Mr. N. Kumar

Mr. Deepak M. Satwalekar

Mr. Ravindra Kulkarni

Mr. Ravindra Dhariwal


MANAGEMENT TEAM


Mr. Prashant Panday, Chief Executive Officer

Mr. N. Subramanian, Group CFO

Mr. Nandan Srinath, Chief Operating Officer

Mr. Tapas Sen, Chief Programming Officer

COMPANY SECRETARY

Mr. Mehul Shah

AUDITORS

M/s. Price Waterhouse & Co.,

Chartered Accountants

LEGAL ADVISORS

Mulla & Mulla & Craigie Blunt & Caroe, Advocates & Solicitors

Mrs. Pratibha M. Singh, Advocate

Mr. Krishnendu Datta, K. Datta & Associates, Advocates

Halai & Co., Advocates

BANKERS

HDFC Bank Limited

REGISTRAR & SHARE TRANSFER AGENTS (R & TA)

Karvy Computershare Private Limited,

Unit: - Entertainment Network (India) Limited,

Plot No. 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081.

Phone : 040 23420815 to 828, Fax : 040 23420814.

REGISTERED OFFICE:

4th Floor, A-Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel

(West), Mumbai - 400 013.

CORPORATE OFFICE:

Trade Gardens, Ground Floor, Kamala Mills Compound,

Senapati Bapat Marg, Lower Parel (West), Mumbai - 400 013.

ENTERTAINMENT NETWORK (INDIA) LIMITED

28

29

ANNUAL REPORT 2008-2009

NOTICENOTICE is hereby given that the TENTH Annual General Meeting of the Members of ENTERTAINMENT NETWORK (INDIA) LIMITED will be held at Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s University (‘Patkar Hall’), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai – 400 020, on Friday, September 4, 2009, at 3.00 p.m. to transact the following business:

Ordinary Business:1. To receive, consider and adopt the Audited Balance Sheet of the Company as at March 31, 2009 and the Profi t and Loss Account and

Cash Flow Statement for the fi nancial year ended on that date and the Reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Ravindra Dhariwal who retires by rotation and being eligible, offers himself for re-appointment.

3. To appoint a Director in place of Mr. Vineet Jain who retires by rotation and being eligible, offers himself for re-appointment.

4. To appoint Messrs Price Waterhouse & Co., Chartered Accountants, as Auditors to hold offi ce from the conclusion of Tenth Annual General Meeting until the conclusion of the Eleventh Annual General Meeting and to authorize the Board of Directors to fi x their remuneration as agreed to between the Board of Directors and the Auditors, in addition to reimbursement of service tax and all out of pocket expenses incurred in connection with the audit of accounts of the Company.

Notes:(a) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE GENERAL MEETING IS ENTITLED TO APPOINT A PROXY, WHO NEED NOT BE A

MEMBER, TO ATTEND AND VOTE ON BEHALF OF HIMSELF/HERSELF. The instruments appointing the Proxy should be deposited at the Registered Offi ce of the Company not less than 48 (forty eight) hours before the commencement of the Meeting.

(b) The Register of Members and Share Transfer Books of the Company will remain closed from Friday, August 28, 2009, to Friday, September 4, 2009, both days inclusive.

(c) In terms of Section 205C of the Companies Act, 1956, the application money received by the Company for allotment of any Securities and due for refund, which remain unpaid or unclaimed for a period of 7 (seven) years from the date they become due for payment shall be credited to the Investor Education and Protection Fund (‘IEPF’).

(d) Particulars of the employees as required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are given in the annexure and forms part of the Directors’ Report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the Members excluding the aforesaid annexure. Any Member interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Offi ce of the Company.

(e) Members are requested to notify immediately any change of address:

(i) to their Depository Participants (DPs) in respect of their shareholdings in electronic (d’mat) form and

(ii) to the Company’s Registrars & Share Transfer Agents (‘R & TA’) , Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad-500 081, Phone: 040-23420815 to 828, Fax : 040-23420814, in respect of their shareholdings in physical form, if any, quoting their folio numbers.

(f) In terms of Section 109A of the Companies Act, 1956, every holder of shares in a Company may at any time nominate in the prescribed manner a person to whom his/her shares in the Company shall vest, in the event of his/her death. Nomination forms can be obtained from the R & TA.

(g) Members/ Proxies should bring the Attendance Slip sent herein duly fi lled in for attending the Meeting.

(h) Members are requested to bring their copy of the Annual Report to the Meeting.

(i) Members desiring any information pertaining to the accounts are requested to write to Asst. Vice President — Compliance & Company Secretary at an early date so as to enable the Management to reply at the Annual General Meeting.

By Order of the Board of DirectorsFor Entertainment Network (India) Limited

Mehul ShahAsst. Vice President – Compliance

Mumbai, May 19, 2009. & Company Secretary

Registered Offi ce:4th Floor, A-Wing, Matulya Centre,Senapati Bapat Marg, Lower Parel (West), Mumbai-400 013.

30


ANNEXURE TO ITEMS 2 AND 3 OF THE NOTICEDetails of Directors seeking re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement).

Name of the Director Mr. Ravindra Dhariwal Mr. Vineet Jain

Date of Birth September 11, 1952 February 12, 1966

Nationality Indian Indian

Date of Appointment on the Board December 31, 2002 January 19, 2007

Qualifi cations B.Tech (Chemical Engineering) from the Indian Institute of Technology, Kanpur and also holds a Post Graduate Diploma in Management (Marketing and Finance) from the Indian Institute of Management, Calcutta

B.Sc. degree in International Business Administration in Marketing from Switzerland

Shareholding in the Company Nil Nil

List of Directorships held in other Companies Bennett, Coleman & Company Limited, Times Yoga Limited, Bennett Advisory Services Limited, Times Infotainment Media Limited, Vardhaman Publishers Limited, The Sandesh Limited, Banhem Financial & Investment Consultants Limited, Times Global Broadcasting Company Limited, Vijayanand Printers Limited, Times Journal India Private Limited, Times Internet Limited and Zoom Entertainment Network Limited.

Bennett, Coleman & Company Limited (Managing Director), Bharat Nidhi Limited, The Press Trust of India Limited, Times Global Broadcasting Company Limited, Times Infotainment Media Limited, Times Internet Limited, Optimal Media Solutions Limited, Worldwide Media Private Limited, Zoom Entertainment Network Limited, a2zShopping Limited, Times Mobile Limited, Times Websol Limited and Times Journal India Private Limited.

Committee membership 1. Entertainment Network (India) Limited: [Chairman of Shareholders’/ Investors’ Grievance Committee, Member of Audit Committee, Member of Remuneration/ Compensation Committee].

2. Bennett, Coleman & Company Limited: [Member of Audit Committee, Member of Investment & Loan Committee].

3. Times Infotainment Media Limited: [Member of Audit Committee, Member of Compensation Committee].

1. Bennett, Coleman & Company Limited: [Chairman of Investment and Loans Committee, Member of Share Transfer Committee].

2. The Press Trust of India Limited: [Member of Committee of Board].

Brief resume of all the Directors of the Company has also been furnished separately in the Annual Report.

31


DIRECTORS’ REPORTDear Members,

Your Directors have pleasure in presenting this Tenth Annual Report together with the Audited Accounts of the Company for the fi nancial year ended March 31, 2009.

1. Financial Highlights

Amount in Rupees

2008-2009 2007-2008

Income 2,301,738,144 2,293,905,755

Profi t before Tax 19,602,137 163,256,366

Less: Provision for Taxation

Current Tax — 16,100,000

Minimum Alternate Tax Credit Entitlement — (16,100,000)

Deferred Tax (29,720,970) (20,676,748)

Fringe Benefi t Tax 20,200,000 22,000,000

Profi t after Tax 29,123,107 161,933,114

Profi t / (Loss) brought Forward 745,199,757 583,266,643

Equity 476,704,150 476,560,600

Transfer to General Reserve Nil Nil

Surplus carried to Balance Sheet 774,322,864 745,199,757

2. Financial Performance The Company has retained its position as market leader in Private FM Radio Broadcasting industry. Total income of the Company

increased from Rs. 2,293,905,755/- in the year 2007-2008 to Rs. 2,301,738,144/- in the fi nancial year under review. Profi t after tax was lower at Rs. 29,123,107/-.

3. Operations During the fi nancial year under review, the Company was faced with a new challenge - slowdown in the advertising markets as a

result of the overall economic slow-down in the country. The slow-down became apparent only in October 2008, when the usually busy season of Diwali saw a somewhat muted level of advertising activity. The slow-down in November - December 2008 was followed by a de-growth in the January-March 2009 quarter. Since your Company is a large media player, its results have also been signifi cantly hurt by this slow-down.

The management of the Company has taken steps to protect Earnings before interest, tax, depreciation and amortization (EBITDA) margins – even as the revenues started registering a negative growth from November - 2008 onwards. The Company has taken several steps to cut costs including rightsizing the organization (down about 200 people from its peak level of nearly 980 people), cancellation of incentives for the year under review, reducing the operating hours of twenty smaller stations from 24 hours to 18 hours, replacing travel with video conferences and conference calls wherever possible and, in general, curtailing expenditure wherever possible. As a result of these initiatives, the Company has managed to cut its operating costs signifi cantly – the full benefi ts of which are expected in the Financial Year 2009-2010.

While it cut costs in many areas, it did not dilute its focus on brand building. During the year under review, the Company launched the fi rst edition of the Mirchi Music Awards in March 2009. The awards were telecast on Star Plus – the show commanded a viewership of nearly 11.5 million people and a TRP of nearly 1.6. This is a very encouraging response. The Awards were judged by a high powered jury comprising Javed Akhtar (Chairman), Prasoon Joshi, Shankar Mahadevan, Anu Malik, Louiz Banks, Sonu Nigam, Kavita Krishnamurthy, Suresh Wadkar, Sadhana Sargam, Kailash Kher, Ramesh Sippy, Rakeysh Omprakash Mehra and Kunal Kohli.

32


It is such brand building measures that have won the brand “Radio Mirchi” several accolades during the year. The most prestigious award won by Mirchi during the year was the “#1 media brand in India” in the Pitch-IMRB survey of service brands, ahead of well established iconic brands like The Times of India and Star Plus. Its website – launched during the year – was voted the most popular TV and Radio site in the country. The survey was conducted by Metrix Labs and AC Nielsen. The survey had 1.5 million participants. Mirchi joins the hall of fame – along with sites like ndtv.com, aajtak.com, google.com and others. Our newly launched CSR division has also won accolades. Mirchi was ranked 8th (got a silver) in the Pegasus CSR (A Readers Digest initiative) awards out of 40 participants. In addition, the creative teams continued to produce superior quality work and was recognized by RAPA as well as IRF (Indian Radio Forum) during the year.

As a result of the solid brand pull, the Company has been able to hold on to its #1 position. It commands a market share (in revenues) of more than 40% and is more than double the size of the nearest competitor.

4. Dividend In order to conserve the resources to augment future growth, your Directors do not recommend any dividend for the fi nancial year

2008 - 2009.

5. Fixed Deposits The Company has not accepted any fi xed deposits and, as such, no amount of principal or interest was outstanding as on the date of the

Balance Sheet.

6. Directors During the fi nancial year under review, Ms. Rama Bijapurkar resigned from the offi ce of directorship with effect from December 22,

2008. The Board wishes to place on record its appreciation of valuable services rendered by her during her tenure as Director.

Mr. A. P. Parigi was re-appointed as the Managing Director of the Company, not liable to retire by rotation, for a period of two (2) years commencing from August 1, 2009 till July 31, 2011, at a maximum remuneration of Rs. 21,00,404/- (Rupees twenty one lacs four hundred and four only) per month plus applicable perquisites, allowances etc. by the Members of the Company through Postal Ballot voting process on Wednesday, March 25, 2009. The re-appointment is subject to the approval of the Government of India, Ministry of Corporate Affairs, if and to the extent applicable.

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association of the Company, Mr. Ravindra Dhariwal and Mr. Vineet Jain retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Brief resume of the Directors proposed to be re-appointed, nature of their expertise in specifi c functional areas, names of the companies in which they hold directorships and the membership/chairmanships of Committees of the Board and their shareholding in the Company, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges, are set out in the Annexure to the Notice forming part of the Annual Report.

7. Audit Committee The Audit Committee of the Company presently comprises of Mr. N. Kumar (Chairman), Mr. Ravindra Kulkarni and Mr. Ravindra Dhariwal.

The Internal Auditors of the Company report directly to the Audit Committee. Brief description of the terms of reference of the Audit Committee has been furnished in the Report on Corporate Governance.

8. Auditors Messrs Price Waterhouse & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of Tenth Annual

General Meeting and have confi rmed their eligibility and willingness to accept offi ce, if appointed.

Members are requested to appoint Messrs Price Waterhouse & Co., Chartered Accountants, as the Statutory Auditors of the Company for the period commencing from the conclusion of the Tenth Annual General Meeting until the conclusion of the Eleventh Annual General Meeting and to fi x their remuneration.

9. Buy-Back of Shares During the fi nancial year under review, the Company has not offered to buy-back any of its outstanding shares.

33


10. Conservation of Energy The operations of the Company are not energy intensive. A continuing effort is being made by the Company and its employees in

reducing the wastage of scarce energy resources.

11. Foreign Exchange Earnings & Outgo Statement pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of

Board of Directors) Rules, 1988:

(i) Activities relating to export, initiatives to increase exports, developments of new export markets for products and services and export plan:

The Company is poised to maintain its leadership position in the markets it operates in. The Company is actively looking at new business opportunities and is exploring new export avenues in various verticals based on economic consideration.

(ii) Total foreign exchange used and earned:

Amount in Rupees (in lacs)

2008-2009 2007-2008

Foreign exchange earnings 5.81 6.76

Foreign exchange outgo 85.49 98.56

12. Technological Absorption, Adaptation and Innovation The Company has not absorbed any new technology during the fi nancial year under review. However, Statement pursuant to Section

217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is hereunder:

a) Efforts made towards technology absorption, adaptation and innovation None

b) Benefi ts derived as a result of the above efforts N.A.

c) Information regarding imported technology N.A.

13. Research & Development

a) Specifi c areas in which Research and Development is carried out by the Company None

b) Benefi ts derived as a result of the above research and development N.A.

c) Future plan of action N.A.

d) Expenditure on Research and Development N.A.

14. Particulars of Employees Particulars of the employees as required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies

(Particulars of Employees) Rules, 1975, as amended, are given in the annexure appended hereto and forms part of this report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report and Accounts are being sent to all the Members excluding the aforesaid annexure. Any Member interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Offi ce of the Company.

15. Share Capital & Listing of Securities The equity shares of the Company are listed and admitted to dealings on the Bombay Stock Exchange Limited (BSE) and the National

Stock Exchange of India Limited (NSE) effective from February 15, 2006. Annual Listing Fee has been paid to each exchange.

34


1,06,750 (One lac six thousand seven hundred fi fty) fully paid up equity shares of the face value of Rs. 10/- each have been issued and allotted till the date of this report at a price of Rs. 90/- (Rupees Ninety only) per equity share including securities premium of Rs. 80/- (Rupees Eighty only) per equity share, for cash, out of the un-issued share capital of the Company upon exercise of the Options by the Option Grantees on the terms and conditions as stipulated in Entertainment Network (India) Limited Employee Stock Option Scheme (‘ENIL ESOS-2005’) read with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, and pursuant to Sections 81 (1A) and other applicable provisions of the Companies Act, 1956. After the aforesaid issue and allotment, the issued, subscribed and paid up equity share capital of the Company increased and stood at 4,76,70,415 (Four crores seventy six lacs seventy thousand four hundred and fi fteen) equity shares of the face value of Rs. 10/- (Rupees ten only) each.

16. Employees Stock Option Scheme Entertainment Network (India) Limited Employee Stock Option Scheme (hereinafter referred to as ‘ENIL ESOS-2005’) was implemented

for the benefi t of the employees of the Company, its holding company and its subsidiary (including Directors) in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

Disclosure pursuant to the Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is hereunder:

Details of the ENIL ESOS - 2005:a) Options granted : 109,360

b) The pricing formula : at an exercise price of Rs. 90/- each

c) Options vested as on the date of this report : 106,750 (net of lapse of 2,610 options)

d) Options exercised as on the date of this report : 106,750

e) The total number of equity shares arising as a result of exercise of option

: Option grantees have exercised their options and consequently 106,750 (total options granted 109,360 less no. of options lapsed 2,610) equity shares have been issued and allotted to them.

f) Options lapsed : 2,610

g) Variation of terms of options : None

h) Money realized by exercise of options : Rs. 96,07,500/- (106,750 options exercised @ Rs. 90/- per option)

i) Total number of options in force : Nil (total options granted 109,360 less no. of options lapsed 2,610 less no. of options exercised 106,750)

j) Employee wise details of options granted to : as detailed hereof

(i)

Name of the Option Grantee Number of Options

Value (in Rs.)

Vesting Schedule

Mr. Prashant Panday 8,700 783,000 April 1, 2007.

Mr. Kaushik Ghosh 7,250 652,500 5,945 Options on November 15, 2006 and 1,305 Options on April 1, 2007.

Mr. Tapas Sen 2,610 234,900 April 1, 2007.

Mr. Harvinderjit Singh Bhatia 2,610 234,900 April 1, 2007.

Mr. Farid Kureshi 9,310 837,900 2,350 Options on November 15, 2006 and 6,960 on April 1, 2007.

Col. (Retd.) N. Thiagarajan 870 78,300 April 1, 2007.

Mr. S. Prasad 1,740 156,600 April 1, 2007.

Mr. Sameer Soni 4,350 391,500 April 1, 2007.

Mr. Nandan Srinath 4,350 391,500 April 1, 2007.

35


Name of the Option Grantee Number of Options

Value (in Rs.)

Vesting Schedule

Mr. Alok Purohit 11,600 1,044,000 8,120 Options on November 15, 2006 and 3,480 Options on April 1, 2007.

Mr. Sharath Chandra 7,250 652,500 2,900 Options on November 15, 2006 and 4,350 Options on July 1, 2007.

Mr. Romen Sood 7,250 652,500 2,900 Options on November 15, 2006 and 4,350 Options on July 1, 2007.

Mr. Gautam Shahane 11,600 1,044,000 8,120 Options on November 15, 2006 and 3,480 Options on July 1, 2007.

Mr. Anil Fernandes 2,175 195,750 870 Options on November 15, 2006 and 1,305 Options on July 1, 2007.

Mr. Hitesh Sharma 8,120 730,800 2,320 Options on November 15, 2006, 2,320 Options on July 1, 2007 and 3,480 Options on July 1, 2008.

Mr. Munish Purii 14,500 1,305,000 5,800 Options on April 1, 2007 and 8,700 Options on April 1, 2008.

Mr. Ganesh Iyer 5,075 456,750 1,450 Options on November 15, 2006, 1,450 Options on July 1, 2007 and 2,175 Options on July 1, 2008.

(ii) Senior managerial personnel:

All the above option grantees are/were senior managerial personnel of the Company, its holding company or subsidiary.

(iii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year:

The list of employees receiving a grant in one year of option amounting to 5% or more of option granted during that year is as below:

Sr. No. Name of the Employee No. of options granted

1. Mr. Prashant Panday 8,700

2. Mr. Kaushik Ghosh 7,250

3. Mr. Farid Kureshi 9,310

4. Mr. Alok Purohit 11,600

5. Mr. Sharath Chandra 7,250

6. Mr. Romen Sood 7,250

7. Mr. Gautam Shahane 11,600

8. Mr. Hitesh Sharma 8,120

9. Mr. Munish Purii 14,500

iv) Identifi ed employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant:

None of the employees were granted option, during any one year, equal to or exceeding 1% of the issued capital under ENIL ESOS-2005.

k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’:

Kindly refer to the point no. 18 of the Schedule 18 to the fi nancial accounts.

36


l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profi ts and on EPS of the company shall also be disclosed:

The Company has calculated the employee compensation cost using the fair value of the stock options. Kindly refer to the point no. 19 of the Schedule 18 to the fi nancial accounts.

m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock:

The options are exercisable at Rs. 90/- per equity share including a premium of Rs. 80/- per equity share.

Tranches of Stock Options Fair Value of the Options No. of OptionsTranche – I Rs. 95.25 34,975Tranche – II Rs. 98.40 42,775Tranche – III Rs. 100.36 17,255Tranche – IV Rs. 105.67 8,700

Tranche – V Rs. 107.30 5,655Weighted average Rs. 98.74

n) A description of the method and signifi cant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

The Company has used Black-Scholes theory of valuation for arriving at an indicative valuation of the stock option.

The factors affecting the value of an option were: • the underlying value of the asset; • the exercise price; • the expected life; • the time to expiration; • the expected volatility of the underlying asset; • the risk-free interest rate; and • dividend expected during the life of the option (if any).

17. Management Discussion and Analysis Report Management Discussion and Analysis Report for the fi nancial year under review as stipulated in Clause 49 of the Listing Agreement

entered into with the Stock Exchanges is set out in a separate section forming part of the Annual Report.

18. Corporate Governance The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate

steps to ensure that all mandatory provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreements entered into with the Stock Exchanges, are complied with. A separate report on Corporate Governance is enclosed as a part of the Annual Report along with a certifi cate from the Practicing Company Secretary confi rming compliance with the conditions of Corporate Governance.

19. Directors’ Responsibility Statement Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from

the Operating Management, hereby confi rm that: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material

departures; (ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied the suggested accounting

policies consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2009 and of the profi t of the Company for that period;

(iii) they have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, to the best of their knowledge and ability;

(iv) they have prepared the annual accounts on a going concern basis.

37


20. Subsidiary Companies Alternate Brand Solutions (India) Limited (formerly known as Alternate Brand Solutions Limited) is engaged in the business of event

management/ experiential marketing under the brand and style ‘360°’.

Times Innovative Media Limited is engaged in the business of Out-of-Home (‘OOH’) media under the brand and style ‘Times OOH’.

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Balance Sheet, Profi t and Loss Account and other documents of its subsidiary companies. The Company applied to the Ministry of Corporate Affairs, Government of India, for seeking an exemption from such attachments of its subsidiaries, since the Company presents the audited consolidated fi nancial statements in the Annual Report. Pursuant to the approval from the Government of India, Ministry of Corporate Affairs vide their letter No. 47/45/2009-CL-III dated January 27, 2009, the Balance Sheet, Profi t and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Relevant fi nancial information of the subsidiary companies is disclosed in the Annual Report. The Company shall make available the Annual Accounts and the related information of its subsidiaries to any Member of the Company who may be interested in obtaining the same. These documents will also be available for inspection during business hours at the Registered Offi ce of the Company. The Consolidated Financial Statements presented by the Company include fi nancial results of its subsidiary companies.

21. Consolidated Financial Statements In accordance with the Accounting Standard 21 on Consolidated Financial Statements issued by Central Government, the audited

Consolidated Financial Statements are annexed forming part of the Annual Report.

22. Acknowledgements Your Directors take this opportunity to convey their appreciation to all the Members, listeners, advertisers, media agencies, dealers,

suppliers, bankers, regulatory and government authorities and all other business associates for their continued support and confi dence in the management of the Company. Your Directors place on record their appreciation of the consistent contribution made by employees at all levels through their hard work, dedication, solidarity, cooperation and acknowledge that their support has enabled the Company to achieve new heights of success.

For and on behalf of the Board of Directors

Vineet Jain A. P. ParigiChairman Managing Director

Mumbai, May 19, 2009

Registered Offi ce:4th Floor, ‘A’ Wing, Matulya Centre,Senapati Bapat Marg, Lower Parel (West),Mumbai – 400 013.

AUDITORS’ CERTIFICATE ON EMPLOYEE STOCK OPTION SCHEME

We have examined the books of account and other records maintained by Entertainment Network (India) Limited (the Company) for the year ended 31st March, 2009 and on the basis of such examination and according to the information, explanations and representations given to us, we confi rm that Entertainment Network (India) Limited Employee Stock Option Scheme (ENIL - ESOS 2005) has been implemented in accordance with the “Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999” to the extent applicable and in accordance with the Resolution passed in the Extra Ordinary General Meeting of the Company held on 5th November, 2005.

Partha GhoshPartner

Membership No.F- 55913

For and on behalf ofPrice Waterhouse & Co.

Mumbai, May 19, 2009 Chartered Accountants

38


REPORT ON CORPORATE GOVERNANCECorporate governance is a systemic process by which organization is directed, administered, managed and controlled. It is a process to manage the business affairs of the company towards enhancing business prosperity and accountability with the objective of realizing long term shareholder value, while taking into account the interests of the other stakeholders. In this dynamic environment, shareholders across the globe evince keen interest in the performance of the companies and thus good corporate governance is of paramount importance for companies seeking to distinguish themselves in the global footprint.

The equity shares of the Company are listed and admitted to dealings on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). Pursuant the provisions of the Clause 49 of the Listing Agreement, a report on Corporate Governance for the fi nancial year ended March 31, 2009, is furnished below:

1. Company’s Philosophy on Code of Governance The Company recognizes that good governance practices originate from the philosophy and mindset of the organization. The Company

reiterates its commitment to adhere to the highest standards of Corporate Governance which is founded upon a rich legacy of integrity, fairness, transparency, equity and accountability. We believe that good Corporate Governance practices should be enshrined in all the operations and functioning of the Company and thus pivotal to enhance and retain stakeholders’ trust. The Company’s philosophy on Corporate Governance envisages attainment of highest level of integrity, fairness, transparency, equity and accountability in all facets of its functioning and in its interactions with shareholders, employees, government, regulatory bodies, listeners and the community at large. The Company recognizes that good Corporate Governance is a continuing exercise and is committed to follow and pursue the highest standard of governance in the overall interest of the stakeholders. The Company recognizes good corporate governance practices as a key driver to sustainable growth and long term value creation and thus encourages timely and accurate dissemination of information to all their stakeholders.

In compliances with the regulatory requirements and effective implementation of corporate governance practices, the Company has adopted the following codes of governance in accordance with the applicable regulations of Securities and Exchange Board of India:-

• Code of Conduct for Prevention of Insider Trading; for regulating the dealings of the Directors and Employees of the Company possessing or likely to possess price sensitive information, in the securities of the Company;

• Code of Corporate Disclosure Practices; for ensuring timely and adequate disclosure of price sensitive information;

• Code of Ethics and Business Principles for Directors and Employees under the SEBI (Prohibition of Insider Trading) Regulation.

These codes and their effective implementation re-affi rm the commitment of the Company towards putting in place the highest standard of corporate governance in every sphere of its operations. The Company’s philosophy of Corporate Governance not only consistent with the statutory requirements but also underlines our commitment to operate in the best interest of the stakeholders.

The Company has a strong Enterprise Risk Management framework which is administered by the team of Senior Management. This team periodically reviews the risk events that could affect the Company and initiates appropriate mitigation procedures. This team also reviews the progress made with respect to the mitigation plans and the effectiveness of the same in addressing the relevant risk. The Company has laid down procedures to inform the Board Members about the risk assessment and minimization procedures and these procedures are periodically reviewed.

2. Board of Directors i) Composition of the Board of Directors and other directorships and committee membership of the Directors:

The Company believes that an active, well-informed and independent Board of Directors is vital to achieve the apex standard of corporate governance. The Board of Directors of the Company comprises of an optimal combination of executive, non-executive and independent directors so to preserve and maintain the independence of the Board. The Board of Directors comprises of eminent persons with professional experience in varied fi elds and presently comprises of six directors, two of them are non-executive directors and three are independent directors. Brief profi le of all the Directors of the Company has been furnished separately in the Annual Report. The composition of the Board of Directors is in accordance with the requirements of the Clause 49 of the Listing Agreement.

39


The composition of the Board of Directors, attendance at Board Meetings (BM) held during the fi nancial year under review and at the last Annual General Meeting (AGM):

Name of Director Category Financial Year 2008 – 2009 Attendance at

Board Meeting Last AGM

Mr. Vineet Jain Non Executive Chairman 3 Yes

Mr. Deepak M. Satwalekar Independent Non Executive 4 Yes

Mr. N. Kumar Independent Non Executive 4 No

Ms. Rama Bijapurkar* Independent Non Executive 2 Yes

Mr. Ravindra Dhariwal Non Executive 3 Yes

Mr. Ravindra Kulkarni Independent Non Executive 4 Yes

Mr. A. P. Parigi Executive – Managing Director 4 Yes

* Ceased to be a Director of the Company effective from December 22, 2008.

Number of directorships, memberships, and chairmanships of the Directors of the Company in other public limited companies as on the date of this report is as follows:

Name of Director Category As on date of this report

No. of other Directorships #

Other Committee positions #

Member Chairman

Mr. Vineet Jain Non Executive Chairman 11 1 0

Mr. Deepak M. Satwalekar Independent Non Executive 5 1 2

Mr. N. Kumar Independent Non Executive 6 1 4

Mr. Ravindra Dhariwal Non Executive 11 2 0

Mr. Ravindra Kulkarni Independent Non Executive 7 4 2

Mr. A. P. Parigi Executive – Managing Director 14 4 0

# For the purpose of considering the number of other directorships and committee positions, all public limited companies, whether listed or not, have been included and all other companies including private limited companies, foreign companies and companies under Section 25 of the Companies Act, 1956, have been excluded and Committees other than Audit Committee and Shareholders’/Investors’ Grievance Committee have been excluded.

None of the Directors are related with each other (inter-se) within the meaning of Clause 49 IV (G) (ia) of the Listing Agreement.

None of the above referred Non-executive Directors have any material pecuniary relationship or transaction with the Company, which would affect the independence or judgment of the Board of Directors.

The Company has not entered into any materially signifi cant transactions with its Promoters, Directors or their relatives or with the Management etc, that may have potential confl ict with the interest of the Company at large.

ii) Board Meetings and Annual General Meeting held:

Four Board Meetings were held during the fi nancial year under review, the dates of which were;

May 14, 2008 July 29, 2008 October 31, 2008 January 27, 2009

The Ninth Annual General Meeting was held on August 25, 2008.

iii) Declaration by the Managing Director and Chief Executive Offi cer under Clause 49(I)(D) of the Listing Agreement regarding adherence to the Code of Conduct is forming part of the Report on Corporate Governance.

iv) The Chief Executive Offi cer (CEO), Chief Financial Offi cer (CFO) certifi cate as stipulated under Clause 49 (V) of the Listing Agreement was placed before the Board of Directors.

v) In the preparation of the Annual accounts, the applicable accounting standards have duly been followed and there are no material departures.

40


3. Audit Committee i) Brief description of terms of reference:

The Company recognizes that the Audit Committee is indispensable for ensuring accountability amongst the Board, Management and the Auditors, who are responsible for sound and transparent fi nancial reporting. The Audit Committee is responsible for overseeing the processes related to the fi nancial reporting and information dissemination. It assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements. The primary objective of the Audit Committee of the Company is to monitor and effectively supervise the fi nancial reporting process of the Company with a view to ensure accurate, timely and proper disclosures and transparency and integrity of fi nancial reporting.

The role and terms of reference of the Audit Committee inter alia include review of internal audit reports, review of fi nancial statements, both quarterly and annual, before submission to the Board, review of Management Discussion and Analysis of fi nancial condition and results of operations and review of performance of statutory and internal auditors and adequacy of internal control systems and other matters in conformity with the requirements of the Listing Agreement entered into with the Stock Exchanges and applicable provisions of the Companies Act, 1956.

ii) Composition of the Audit Committee:

The Audit Committee of the Company is constituted in conformity with the provisions of Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956.

The Audit Committee comprises of the following Directors:

Mr. N. Kumar – Chairman (Independent Non-Executive Director)

Mr. Ravindra Kulkarni (Independent Non-Executive Director)

Mr. Ravindra Dhariwal (Non-Executive Director)

All the Members of the Audit Committee are fi nancially literate and have relevant accounting and fi nancial management expertise as required under Clause 49 of Listing Agreement. The Company Secretary acts as the Secretary to the Audit Committee.

iii) Meetings and attendance during the year:

During the fi nancial year under review, the Audit Committee met four times, i.e. on May 14, 2008; July 29, 2008; October 31, 2008 and January 27, 2009. Details of attendance of each member are as follows:

Name Number of Audit Committee Meeting attendedMr. N. Kumar 4Mr. Ravindra Kulkarni 4Mr. Ravindra Dhariwal 3

4. Subsidiary Companies The Company has two subsidiary companies, viz. Times Innovative Media Limited and Alternate Brand Solutions (India) Limited (formerly

known as Alternate Brand Solutions Limited). The Audit Committee of the Company reviews inter alia the fi nancial statements of its subsidiary companies etc. as stipulated under Clause 49 of the Listing Agreement. The minutes of the Board Meetings of unlisted subsidiary companies have been placed at the Board meetings of the Company and other relevant provisions of the said Clause of the Listing Agreement are duly complied with, to the extent applicable.

5. Remuneration / Compensation Committee i) Brief description of terms of reference:

The Remuneration/ Compensation Committee has been constituted to review and recommend the remuneration payable to the executive directors and senior management of the Company based on their performance and defi ned assessment criteria.

Brief terms of reference of the Remuneration/ Compensation Committee include:

• Determining the Company’s policy on specifi c remuneration packages for Company’s Managing/Joint Managing/ Deputy Managing/ Whole time/ Executive Directors, including pension rights and any compensation payment;

41


• Determining and / or recommending to the Board of Directors, the remuneration packages of the Company’s Managing/ Joint Managing/ Deputy Managing/ Whole time/ Executive Directors, including all elements of the remuneration package (i.e. salary, benefi ts, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefi ts, details of fi xed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);

• Reviewing and determining the remuneration packages of the Company’s top executives/ key management personnel who are one level below the Managing/ Joint Managing/ Executive Directors, including all elements of their remuneration package (i.e. salary, benefi ts, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefi ts, details of fi xed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.).

• Implementing, supervising and administering the present and future Employee Stock Option Scheme(s);

• any other matter duly specifi ed under the applicable provisions of the Companies Act, 1956, read with Clause 49 of the Listing Agreement.

ii) Composition, name of members and Chairperson:

The Remuneration / Compensation Committee of the Company is constituted in conformity with the Clause 49 of the Listing Agreement read with Schedule XIII and other applicable provisions of the Companies Act, 1956.

The Remuneration / Compensation Committee comprises of the following Directors:–

Mr. Deepak M. Satwalekar – Chairman (Independent Non-Executive Director)

Mr. N. Kumar (Independent Non-Executive Director)

Mr. Ravindra Kulkarni (Independent Non-Executive Director)

Mr. Ravindra Dhariwal (Non-Executive Director)

iii) Meetings and attendance during the year:

During the fi nancial year under review, the Remuneration / Compensation Committee met four times, i.e. on May 14, 2008; July 29, 2008; October 31, 2008 and January 27, 2009. Details of the attendance of each member are as follows:

Name Number of Remuneration / Compensation Committee Meeting attended

Mr. Deepak M. Satwalekar 4

Mr. N. Kumar 4

Mr. Ravindra Kulkarni 4

Mr. Ravindra Dhariwal 3

iv) Remuneration policy:

The remuneration policy of the Company is based upon well defi ned criteria such as success and performance of its managerial persons and the Company, industry benchmarks, the profi le of the incumbent, the responsibilities shouldered etc. Through its remuneration policy, the Company endeavors to attract, retain, develop and motivate its high skilled and dedicated workforce.

The Non-Executive Directors did not draw any remuneration (other than sitting fees) from the Company during the fi nancial year under review.

v) Details of remuneration:

a) Details of remuneration paid to the Managing Director during the year 2008 – 2009 is given below:(Amount in Rupees)

Name Salary Benefi ts * Performance Bonus # Total

Mr. A. P. Parigi 1,01,28,516 58,12,144 50,00,000 2,09,40,660

* Also includes Company’s contribution to Provident and Superannuation Funds. # Shown on the basis of year of payment and includes incentive payment.

42


Notes:

• Appointment, terms, conditions and payment of remuneration to the Managing Director is governed by the resolution(s) passed by the Remuneration/ Compensation Committee, Board of Directors and Members of the Company and approval from the Government of India, Ministry of Corporate Affairs, where necessary. The remuneration structure comprises salary, incentive allowance, perquisites and allowance, contribution to provident fund, superannuation etc.

• The said re-appointment is terminable on six months’ notice from either side or payment in lieu of notice period.

• No option was granted to any Director of the Company under any scheme for grant of stock options.

• Mr. A. P. Parigi, Managing Director is holding 2,33,742 equity shares of the Company as on the date of this Report.

• Mr. A. P. Parigi was re-appointed, on continuation basis without any interruption/ break in service, as the Managing Director of the Company, not liable to retire by rotation, for a period of two (2) years commencing from August 1, 2009 till July 31, 2011, at a maximum remuneration of Rs. 21,00,404/- (Rupees Twenty one lacs four hundred and four only) per month plus applicable perquisites, allowances etc. by the Members of the Company through Postal Ballot voting process on Wednesday, March 25, 2009 and the said re-appointment is subject to be approved by the Government of India, Ministry of Corporate Affairs, if and to the extent applicable.

b) Details of sitting fees paid to the Non-Executive Directors for the fi nancial year 2008 – 2009:

Name of the Non-Executive Director Sitting Fees (in Rupees)

Mr. Vineet Jain 45,000/-

Ms. Rama Bijapurkar* 30,000/-

Mr. N. Kumar 1,80,000/-

Mr. Deepak M. Satwalekar 1,20,000/-

Mr. Ravindra Kulkarni 1,80,000/-

Mr. Ravindra Dhariwal 1,35,000/-

* Ceased to be a Director of the Company effective from December 22, 2008.

c) Criteria for making payments to Non-Executive Directors:

Each Non-Executive Director of the Company was paid sitting fees of Rs. 15,000/- (Rupees Fifteen thousand only) per meeting during the fi nancial year under review, subject to deduction of applicable taxes, levies etc., if any, for attending;

• Meeting of the Board of Directors;

• Meeting of the Audit Committee; and

• Meeting of the Remuneration/ Compensation Committee.

d) Number of shares and convertible instruments held by non-executive directors as on the date of this Report, are as below:

Sr. No. Name of the Director No. of equity shares held

1. Mr. Vineet Jain Nil

2. Mr. N. Kumar 5,580

3. Mr. Deepak M. Satwalekar 5,580

4. Mr. Ravindra Kulkarni Nil

5. Mr. Ravindra Dhariwal Nil

43


6. Shareholders’ / Investors’ Grievance Committee i) Constitution and terms of reference of the Committee:

The Company has always valued its investors’ and stakeholders’ relationships. In order to ensure the proper and speedy redressal of shareholders’/ investors’ complaints, the Shareholders’/ Investors’ Grievances Committee was constituted. The constitution and terms of reference of the Shareholders’/ Investors’ Grievance Committee is in conformity with the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. The Shareholders’/ Investors’ Grievances Committee is empowered to looks into redressal of shareholders’ and investors’ complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends and other miscellaneous complaints. The Committee also ensures implementation and compliance of the Company’s Code of Conduct for Prevention of Insider Trading in conformity with SEBI (Prohibition of Insider Trading) Regulations, 1992.

The Shareholders’/ Investors’ Grievances Committee is headed by a Non-Executive Director, and comprises of the following directors:

• Mr. Ravindra Dhariwal - Chairman

• Mr. A. P. Parigi - Member

ii) Name and designation of Compliance Offi cer:

Mr. Mehul Shah, Asst. Vice President - Compliance & Company Secretary is the Compliance Offi cer of the Company.

iii) Shareholders’ complaints:

Number of shareholders’ complaints / queries etc. received during the fi nancial year 63 *Number of complaints / queries etc. not resolved to the satisfaction of shareholders as on March 31, 2009. (Same has been resolved in compliance with the applicable provisions of the relevant rules/ regulations and acts for the time being in force).

Nil

No. of pending complaints/ queries etc. Nil

* Aforesaid numbers include general/ other queries aggregating to 4 cases.

iv) Meetings and attendance during the year:

During the fi nancial year under review, the Shareholders’/ Investors’ Grievances Committee met four times, i.e. on May 8, 2008; July 29, 2008; October 31, 2008; and January 27, 2009. All the Members of the said Committee attended all the Committee meetings.

v) Disclosure(s) pertaining to unclaimed shares:

Disclosure pursuant to the Clause 5A of the listing agreement in relation to unclaimed shares, based on the disclosure furnished by Karvy Computershare Private Limited, the Registrar and Transfer Agents (R&TA) of the Company, for the fi nancial year ended March 31, 2009, is as below;

Clause of Listing Agreement

Particular Remark

Clause 5A(g)(i) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year i.e. on April 1, 2008;

Number of Shareholders - 106 and Number of Outstanding shares - 4554 equity shares.

Clause 5A(g)(ii) Number of shareholders who approached issuer for transfer of shares from suspense account during the year 2008-2009;

57 shareholders.

Clause 5A(g)(iii) Number of shareholders to whom shares were transferred from suspense account during the year 2008-2009;

57 shareholders.

Clause 5A(g)(iv) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year i.e. on March 31, 2009;

49 Shareholders with outstanding equity shares of 2074.

Clause 5A(g)(v) Voting rights on these shares. Voting rights on the equity shares lying in the suspense account shall remain frozen till the rightful owners of such equity shares claims those equity shares.

44


7. General Body Meetings i) Annual General Meetings:

Location, date and time of the Annual General Meeting (AGM) held during the preceding three years and the Special Resolutions passed thereat are as follows:

Year Location Date and Time Special Resolution(s) passed2007 – 2008 (Ninth AGM)

Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s University (Patkar Hall), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai – 400 020.

August 25, 200812.00 noon

No special resolution was passed. •

2006 – 2007 (Eighth AGM)

Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s University (‘Patkar Hall’), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai – 400 020.

September 3, 200711.00 a.m.

To approve the revision in the terms of • remuneration payable to Mr. A. P. Parigi, Managing Director of the Company effective from August 1, 2006.

2005 – 2006 (Seventh AGM)

Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s University (‘Patkar Hall’), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai – 400 020.

July 27, 20064.00 p.m.

To keep the Register of Members, the Index • of Members, the Register and Index of Debenture holders, copies of Annual Return, and other statutory records and reports at the corporate offi ce of the Company pursuant to Section 163 of the Companies Act, 1956.

To enable payment of commission to non • executive directors of the Company pursuant to Section 309 of the Companies Act, 1956.

ii) Special Resolution passed through Postal Ballot:

During the fi nancial year under review, in pursuance of Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001, a Special Resolution was passed on Wednesday, March 25, 2009, by the Members of the Company through Postal Ballot voting process, for re-appointment of Mr. A. P. Parigi, on continuation basis without any interruption/ break in service, as the Managing Director of the Company, not liable to retire by rotation, for a period of two (2) years commencing from August 1, 2009 till July 31, 2011. Whilst the said resolution was not mandatorily required to be passed through Postal Ballot process, the Company, in order to facilitate wider participation in the approval process by the Members residing at different locations, conducted a Postal Ballot voting process for obtaining approval of the Members of the Company.

iii) Person who conducted the postal ballot exercise:

Mr. Hemanshu L. Kapadia, Practicing Company Secretary, was appointed as the Scrutinizer by the Board of Directors at their meeting held on January 27, 2009, for receiving and scrutinizing the Ballot Papers received from the Members and for conducting Postal Ballot process in a fair and transparent manner. Mr. Kapadia carried out the scrutiny of all the Ballot Papers received from the Members upto the close of the working hours on Wednesday, March 18, 2009 and accordingly submitted his report to the Chairman on Wednesday, March 25, 2009.

iv) Procedure followed:

The Company has duly complied with the requirements of Postal Ballot and followed the following procedure as stipulated under the provisions of Section 192A and other applicable provisions of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001:-

a. The Postal Ballot Notice along with accompanying documents were sent to all the Members of the Company whose name appeared on the Register of Members/ list of benefi ciaries as on the date of dispatch of aforesaid Notice, being Monday, February 16, 2009.

b. Notice was given in the newspapers pursuant to Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001, regarding completion of dispatch of the aforesaid Notice.

c. A calendar of events along with Board Resolution was submitted to the Registrar of Companies, Ministry of Corporate Affairs, Maharashtra, Mumbai.

45


d. The Members were requested to send the duly completed Postal Ballot Form with the assent (for) or dissent (against), in the attached pre-paid self addressed envelope, so as to reach the Scrutinizer not later than the close of the working hours on Wednesday, March 18, 2009.

e. The Scrutinizer carried out the scrutiny of all the Ballot Papers received from the Members upto the close of the working hours on Wednesday, March 18, 2009 and thereafter submitted his report to the Chairman on Wednesday, March 25, 2009.

f. The Chairman declared the results of the Postal Ballot on Wednesday, March 25, 2009.

v) Details of voting pattern:

Summary of voting statistics is as below:

Particulars Number of postal ballot forms

Number of shares

% of votes

Total postal ballot forms receiveda) 454 38,829,193 100.00

Less: Invalid postal ballot forms (as per the register)b) 96 7,519 0.02

Net valid postal ballot forms (as per the register)c) 358 38,821,674 99.98

Postal ballot forms with the assent (for) for the Special Resolutiond) 252 38,725,336 99.73

Postal ballot forms with the dissent (against) for the Special Resolutione) 106 96,338 0.25

Accordingly, the Chairman, on Wednesday, March 25, 2009, declared the Special Resolution as set out in the Notice dated January 27, 2009, read with the Explanatory Statement thereto, as duly passed by way of Postal Ballot voting process with requisite majority.

vi) Whether any special resolution is proposed to be conducted through postal ballot: No.

8. Other Disclosure i) Disclosures on materially signifi cant related party transactions that may have potential confl ict with the interests of the Company

at large:

During the fi nancial year under review, there were no materially signifi cant related party transactions with the Promoters, Directors, etc, that may have potential confl ict with the interests of the Company at large.

ii) Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years:

There has been no instance of non-compliance by the Company on any matter related to capital markets, during the last three years and hence no penalties, strictures have been imposed on the Company by Stock Exchanges or SEBI or any other statutory authority.

iii) Whistle Blower policy and affi rmation that no personnel has been denied access to the audit committee:

The Board of Directors affi rms and confi rms that no personnel have been denied access to the Audit Committee. However, a formal Whistle Blower policy is not in place.

iv) Details of compliance with mandatory requirements and adoption of the non mandatory requirements of this clause:

The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. The status of the compliance with the non-mandatory requirements of this clause has been detailed hereof.

9. Means of Communication i) Quarterly/ Half yearly/ Annual results:

Quarterly/ Half yearly/ Annual results are regularly submitted to the Stock Exchanges where the securities of the Company are listed pursuant to the provisions of Listing Agreement and are published in the newspapers. The Company has also displayed the results as specifi ed under Clause 41 of the Listing Agreement on the Company’s website i.e. www.enil.co.in.

ii) Newspapers wherein results are normally published:

Financial Express (English); and Maharashtra Times (Marathi, the regional language).

46


iii) Any Website, where displayed:

www.enil.co.in.

iv) Whether Website also displays offi cial news releases:

Yes, at the Company’s website i.e. www.enil.co.in.

v) Whether presentations made to institutional investors or to the analysts:

Yes. The presentations made to institutional investors/analysts are also posted on the Company’s website i.e. www.enil.co.in.

10. General Shareholder Information

i) Annual General Meeting (AGM) :

Date, Day and time : Friday, September 4, 2009, at 3.00 p.m.

Venue : Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s University (‘Patkar Hall’), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai – 400 020.

ii) Financial year : April 1, 2008, to March 31, 2009.

iii) Date of Book closure : Friday, August 28, 2009, to Friday, September 4, 2009 (both days inclusive) for taking record of the Members of the Company for the purpose of AGM.

iv) Dividend Payment Date : Not Applicable

v) Listing on Stock Exchange : The Company’s shares are listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).

The Company has paid the annual listing fees for the year 2009-2010, as applicable, to BSE and NSE.

vi) Stock code :

BSE Scrip Code 532700NSE Trading Symbol ENILISIN Number for NSDL & CDSL INE265F01028

vii) Market Price Data : High, Low during each month in last fi nancial year*

The performance of the equity shares of the Company on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE) depicting the liquidity of the Company’s equity shares for the fi nancial year ended March 31, 2009, on the said exchanges, is given hereunder:-

Stock Market data – BSE

Month Open (Rs.) High (Rs.) Low (Rs.) Close (Rs.) No. of Shares Turnover (Rs.)

April 2008 378.90 428.00 352.00 414.00 64,324 2,57,96,603

May 2008 420.00 460.00 376.00 397.00 1,08,447 4,57,44,069

June 2008 410.90 442.00 356.05 362.10 30,484 1,19,55,143

July 2008 360.00 378.00 291.05 297.45 1,35,647 4,34,85,220

August 2008 308.25 324.85 283.25 293.20 1,49,612 4,50,52,426

September 2008 287.00 315.00 220.05 242.65 1,44,301 4,12,85,967

October 2008 250.30 250.30 115.20 152.50 34,890 67,44,125

November 2008 149.50 165.00 93.00 107.05 2,83,081 3,66,01,574

December 2008 109.00 174.40 103.00 154.05 6,58,809 9,84,31,143

January 2009 154.00 200.00 132.05 135.55 4,74,996 8,05,65,076

February 2009 144.00 146.00 107.50 112.35 6,24,485 7,62,19,345

March 2009 109.60 127.50 103.10 113.35 1,64,822 1,92,05,644

47


Stock Market data – NSE

Month Open (Rs.) High (Rs.) Low (Rs.) Close (Rs.) No. of Shares Turnover (Rs.)April 2008 365.00 427.00 342.35 416.55 1,02,191 4,08,05,576May 2008 417.25 457.00 376.00 401.10 2,02,468 8,56,26,346June 2008 412.70 439.60 345.45 367.00 78,572 3,10,83,944July 2008 357.40 380.00 281.05 298.45 1,64,952 5,18,74,778August 2008 290.00 327.00 281.05 294.40 4,48,000 13,35,04,235September 2008 290.25 312.00 221.00 244.35 4,43,571 12,36,46,796October 2008 248.00 248.00 112.60 150.40 4,49,105 8,03,66,809November 2008 152.00 167.00 95.05 109.50 7,84,646 11,14,17,031December 2008 108.00 174.00 103.00 152.65 12,33,062 17,95,76,562January 2009 154.00 199.00 132.00 134.60 9,28,705 15,88,91,872February 2009 140.00 145.00 107.00 112.65 9,51,772 11,76,75,386March 2009 103.95 128.65 95.95 112.95 3,36,107 3,92,64,066

* (Source: This information is compiled from the data available from the website of BSE and NSE)

viii) Stock Performance:

ix) Registrar and Transfer Agents (R & TA) :

Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad – 500 081, Phone: 040 – 23420818, Fax: 040 – 23420814.

x) Share Transfer System :

Pursuant to the provisions of the Listing Agreement entered into with the Stock Exchanges, the Board of Directors of the Company, in order to expedite the process, has delegated the power of approving transfer, transmission etc, of the securities of the Company to the R & TA. Securities lodged for transfer, transmission etc. are normally processed within the stipulated time as specifi ed in the Listing Agreement and other applicable provisions of Companies Act, 1956. The Company has duly obtained certifi cates on half yearly basis from a Company Secretary in Practice, certifying due compliances with the formalities of share transfer as required under Clause 47 (c) of the Listing Agreement entered into with Stock Exchanges and submitted a copy of the certifi cate to the Stock Exchanges where the securities of the Company are listed.

48


xi Distribution of shareholding as on March 31, 2009:

Category (Amount) No. of Cases/ Members % of Cases Total Shares % of Amount1 – 5000 20,138 97.39 % 1,048,272 2.20 %5001 – 10000 239 1.16 % 187,403 0.39 %10001 - 20000 125 0.60 % 188,388 0.40 %20001 - 30000 58 0.28 % 146,436 0.31 %30001 - 40000 17 0.08 % 57,437 0.12 %40001 - 50000 21 0.10 % 99,732 0.21 %50001 - 100000 26 0.13 % 198,092 0.42 %100001 & Above 53 0.26 % 45,744,655 95.96 %Total 20,677 100 % 47,670,415 100 %

Shareholding pattern of the Company (as on March 31, 2009):

Statement showing Shareholding Pattern as on March 31, 2009Name of the Company: Entertainment Network (India) LimitedScrip Code: BSE Scrip Code: 532700/ Symbol: ENIL

As on March 31, 2009Category code

Category of shareholder Number of shares

holders

Total Number of

shares

Total share holding as a percentage

of total number of shares

(A) Shareholding of Promoter and Promoter Group

(1) Indian *

(a) Individuals/ Hindu Undivided Family – – –(b) Central Government/ State Government(s) – – –(c) Bodies Corporate

(including 7 others, holding 203 shares jointly with the Promoter)9 33,918,400 71.15

(d) Financial Institutions/ Banks – – –(e) Any Other (specify) – – –

Sub-Total (A)(1) 9 33,918,400 71.15

(2) Foreign

(a) Individuals (Non-Resident Individuals/ Foreign Individuals) – – –(b) Bodies Corporate – – –(c) Institutions – – –(d) Any Other (specify) – – –

Sub-Total (A)(1) 0 0 0

Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) 9 33,918,400 71.15

(B) Public shareholding

(1) Institutions

(a) Mutual Funds/ UTI 6 625,471 1.31(b) Financial Institutions/ Banks 1 500 0.00(c) Central Government/ State Government(s) – – –(d) Venture Capital Funds – – –(e) Insurance Companies – – –(f) Foreign Institutional Investors 16 8,367,891 17.55(g) Foreign Venture Capital Investors – – –(h) Any Other (specify) – – –

Sub-Total (B)(1) 23 8,993,862 18.87

49


Category code

Category of shareholder Number of shares

holders

Total Number of

shares

Total share holding as a percentage

of total number of shares

(2) Non-institutions

(a) Bodies Corporate 400 1,780,745 3.74(b) Individuals -

i. Individual shareholders holding nominal share capital up to Rs. 1 lakh. 20,068 1,640,143 3.44ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh.

20 1,299,364 2.73

(c) Any Other (specify)Non Resident Indians 124 22,969 0.05Trust 6 2,030 0.00Clearing Members 27 12,902 0.03Sub-Total (B)(2) 20,645 4,758,153 9.98

Total Public Shareholding (B)= (B)(1)+(B)(2) 20,668 13,752,015 28.85

TOTAL (A)+(B) 20,677 47,670,415 100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

0 0 0.00

GRAND TOTAL (A)+(B)+(C) 20,677 47,670,415 100.00

* The Indian Promoter Group comprises of Times Infotainment Media Limited (TIML) (including 7 others, holding 203 equity shares jointly with TIML) and Bennett, Coleman and Company Limited.

As on the date of this report, none of the Promoter and Promoter Group of the Company has pledged any shares of the Company.

xii) Dematerialization of shares and liquidity:

99.99 % of the paid up equity share capital of the Company has been dematerialized up to March 31, 2009. Trading in equity shares of the Company is permitted only in dematerialized form as per the notifi cation issued by SEBI. The trading / liquidity details are given in clause (vii) hereinbefore.

xiii) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity :

In accordance with the provisions of Section 81 and other applicable provisions of the Companies Act, 1956, read with the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, and the Scheme titled ‘Entertainment Network (India) Limited Employee Stock Option Scheme’ (‘ENIL ESOS-2005’), 109,360 (One hundred nine thousand and three hundred sixty) Options (each Option being convertible into one equity share of the face value of Rs. 10/- each of the Company) were granted, at an exercise price of Rs. 90/- each including a securities premium of Rs. 80/- each.

Out of the total 109,360 options, 106,750 options have been exercised and 2,610 options have been lapsed as on the date of this Report. After the issue and allotment of 106,750 options, the issued, subscribed and paid up equity share capital of the Company has increased and stood at 4,76,70,415 (Four crores seventy six lacs seventy thousand four hundred and fi fteen) equity shares of the face value of Rs. 10/- (Rupees ten only) each.

xiv) Location of Studios:

1. Ahmedabad The Times of India Press Premises, Vejalpur, Ahmedabad – 380 051.2. Aurangabad F 8, 9, 10, 5th Floor, Aurangabad Business Centre, Adalat Road, Opposite Session Court,

Aurangabad – 431 005.3. Bangalore (Bengaluru) 39/2, 3rd Floor, Sagar Building, Banerghatta Road, Bangalore – 560 029.4. Bhopal 2nd Floor, C. P. Square, 2, Malviya Nagar, Opposite Old Vidhansabha, Bhopal – 462 003.5. Chennai 6th & 7th Floor, Fathima Akhtar Court, New No. 453, Anna Salai, Teynampet, Chennai – 600 018.6. Coimbatore 8th Floor, Classic Towers, 1547 Trichy Road, Coimbatore – 641 018.7. Delhi 3rd Floor, Okhla Industrial Estate, Phase 3, New Delhi – 110 020.

50


8. Hyderabad 1st Floor, Queen’s Plaza, Sardar Patel Road, Opposite Begumpet Police Station, Begumpet, Secunderabad – 500 003.

9. Indore 9th Floor, Industry House, 15 AB Road, Indore – 452 001.10. Jabalpur 2nd Floor, Shukla Bhawan, 1415, Wright Town, Jabalpur – 482 002.11. Jaipur Prestige Tower, 6th Floor E - 1 Amrapali Road, Vaishali Nagar, Jaipur – 302 021.12. Jalandhar 5th Floor, Shakti Tower, Adjoining Swani Motors, GT Road, Near BMC Chowk, Jalandhar City – 144 001.13. Kanpur 10th Floor, Plot 1, 2, 3 Shiv Som Towers, Canal Range Corner, The Mall, Kanpur – 208 004.14. Kolhapur Gemstone, Part B, 1st Floor, Rao Bahadur Rajirao Vichare Complex, 517/2 E Ward, New Shahupuri,

Kolhapur – 416 001.15. Kolkata Shantiniketan Building, 13th Floor, 8, Camac Street, Kolkata – 700 017.16. Lucknow 6th Floor, Plot TV 57/V Shalimar Tower, Vibhuti Khand, Gomtinagar, Lucknow – 226 010.17. Madurai 2nd Floor, Nataraja Complex, Opposite New District Court, 128 Melur Road, KK Nagar,

Madurai – 625 020.18. Mumbai 4th Floor, ‘A’ Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013.19. Mangalore 5th and 6th Floor, Maximus Commercial Complex, LHH Road, Opposite KMC, Mangalore – 575 001.20. Nagpur Offi ce 1, 2nd Floor, Narang Towers, 27 Palam Road, Civil Lines, Nagpur – 440 001.21. Nasik (Nashik) 3rd Floor, United Legend, Plot 1, Serial 733/1/2, Off Village Nashik, Link Road, Opposite Parijat

Nagar Bus Stop, Nashik – 422 00522. Panaji 1st Floor, Vivenda De Hassan Building, D. B. Marg, Miramar PTS 16, Miramar, Panjim, Goa – 403 001.23. Patna Times of India Building, Fraser Road, Patna – 800 001.24. Pune 3rd Floor, Krishna Keval Commercial Complex, Above ICICI Bank, Kondhwa Khurd, Pune – 411 048.25. Raipur 1st Floor, Chawla Towers, Telibandha Ward No. 28, Near Bottle House, Shankar Nagar,

Raipur – 492 007.26. Rajkot Property No. 23, 24/P, Radhika House, Near Kinnari Flats, Opposite Princess School, Kalawad

Road, Rajkot – 360 007.27. Surat 601, International Trade Center, 2/1932/2-A, Majuragate Crossing, Ring Road, Surat – 395 002.28. Thiruvananthapuram 3rd Floor, Andoor Buildings, General Hospital Road, Vanchiyoor P.O., Thiruvananthapuram – 695 035.29. Vadodara Property No. 1001/1002, 10th Floor, Gunjan Tower, Off. Alembic - Gorwa Road, Vadodara – 390 023.30. Varanasi 2nd fl oor, Unit 201-A & 204, RH Tower, The Mall, Cantt, Varanasi – 221 002.31. Vijaywada 5th Floor, ‘Matha Towers’, Bishop’s House, Door No 59 A 1-7, Ring Road, Vijayawada – 520 008, A. P.32. Vishakapatnam

(Vishakhapatnam)3rd Floor, Varun Towers, Siripuram, Vishakhapatnam – 500 003.

xv) Address for correspondence : Investor Correspondence a. For share transfer / dematerialization of shares / other queries relating to the securities: Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar,

Madhapur, Hyderabad - 500 081, Phone: 040 – 23420818, Fax: 040 – 23420814.

b. For queries on Annual Report or investors’ assistance:

Mr. Mehul Shah, Asst. Vice President - Compliance & Company Secretary, Trade Gardens, Ground Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013. [email protected]

Investors can register their complaints/ grievances on the Company’s designated e-mail Id: [email protected] The aforesaid e-mail id and other relevant details have been displayed on the website of the Company i.e. www.enil.co.in

NON MANDATORY REQUIREMENTS: The Company has duly abided with all the mandatory requirements and has complied with the following non-mandatory requirements

of Clause 49 of the Listing Agreement:

1. The Board: The Company does not defray any expenses of the Chairman’s Offi ce. Independent Directors do not have a tenure exceeding, in

the aggregate, a period of nine years, on the Board of the Company. The Company ensures that each person being appointed as an Independent Director of the Company has the requisite qualifi cations, experience and expertise enabling them to effectively contribute towards the growth of the Company and aids the Company to achieve new heights of success in the Media and Entertainment Industry.

51


2. Remuneration Committee: As stated earlier, the Company has constituted Remuneration/ Compensation Committee to review and recommend the remuneration

of the Managing Director based on his/her performance and defi ned assessment criteria. Details regarding composition and scope of the Remuneration/ Compensation Committee are given in the earlier part of this Report.

3. Shareholder Rights:

The Company’s quarterly and half-yearly results are furnished to the Stock Exchanges and are also published in the newspapers and on the website of the Company and therefore results were not separately sent to the Members. Quarterly/ Half yearly/ Annual results of the Company are also displayed on the website of the Company i.e. www.enil.co.in.

4. Audit qualifi cations:

There are no audit qualifi cations in the Audit Report for the fi nancial year under review.

5. Training of Board Members:

No training is provided to the Board Members as on date of this Report.

6. Mechanism for evaluating non-executive Board Members:

No mechanism for evaluation of the performance of Non-executive Directors is in place as on date of this Report.

7. Whistle Blower Policy:

The Company has adopted the Code of Ethics & Business Principles for Directors and Employees. However, as of the date of this Report, the Company has not adopted any formal Whistle Blower Policy.


Vineet Jain A. P. ParigiChairman Managing Director



52


DECLARATION BY THE CEO UNDER CLAUSE 49(I)(D) OF THE LISTING AGREEMENT REGARDING ADHERENCE TO THE CODE OF CONDUCT –

We, A. P. Parigi, Managing Director and Prashant Panday, Chief Executive Offi cer of Entertainment Network (India) Limited, hereby affi rm and declare, to the best of our knowledge and belief, and on behalf of the Board of Directors of the Company and senior management personnel, that:

• the Board of Directors has laid down a code of conduct for all Board members and Senior Management of the Company [‘the Code of Conduct’];

• The Code of Conduct has been posted on the website of the Company;

• All the Directors and Senior Management personnel have affi rmed their compliance and adherence with the provisions of the Code of Conduct for the fi nancial year ended March 31, 2009.

For and on behalf of the Board of Directors and Senior Management Personnel

A. P. Parigi Prashant PandayManaging Director Chief Executive Offi cer


53


CERTIFICATE

To the Members of ENTERTAINMENT NETWORK (INDIA) LIMITED

We have examined the compliance of conditions of Corporate Governance by ENTERTAINMENT NETWORK (INDIA) LIMITED (“the

Company”), for the fi nancial year ended March 31, 2009, as stipulated in Clause 49 of the Listing Agreement entered into with the Bombay

Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of

procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance

as stipulated in the said Clause 49. It is neither an audit nor an expression of opinion on the fi nancial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors

and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of

the abovementioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the effi ciency or effectiveness

with which the management has conducted the affairs of the Company.

For Hemanshu Kapadia & AssociatesCompany Secretaries

Hemanshu KapadiaProprietor

C.P. No. 2285Mumbai, May 19, 2009

54


MANAGEMENT DISCUSSION & ANALYSISStatements in this Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be ‘forward-looking statements’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the markets in which the Company conducts business and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on these forward looking statements that speak only as of their dates.

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

Economic slowdown - Advertising impacted signifi cantly worldwide

The world economy continues to struggle. Worldwide many fi nancial powerhouses have either shut shop or have been taken over by their Governments. The industrial output of almost all countries has shown a major decline. The Daily Telegraph reported a decline in industrial output, from January 2008 to January 2009: Japan -31%, Korea -26%, Russia -16%, Brazil -15%, Italy -14%, Germany -12%.

The unemployment rate in the US in March 2009 was 8.5%, the highest since the Great Depression. The International Labour Organisation predicted that atleast 20 million jobs would be lost by the end of 2009 due to the global fi nancial and economic turmoil. This, possibly, for the fi rst time will result in worldwide unemployment level crossing the 200 million mark.

Unemployment coupled with the liquidity crunch/credit crises has signifi cantly reduced demand for goods and services worldwide. This drop in demand has lead to reduced sales and has impacted the topline of many companies. Most companies were forced to adopt drastic measures through cost cutting initiatives to protect profi tability. While advertising budgets are considered critical in the long term for brands; many believe they are dispensable in the short term. Consequently, revenue models of companies based on advertising dollars are the fi rst to get hurt.

In the US, declining advertising revenue and mounting debt has lead the US media into a deep fi nancial crisis. In 2008, the publisher of the two most popular dailies, The Los Angeles Times and The Chicago Tribune, fi led for bankruptcy. The New York Times sold its headquarters in mid-town Manhattan for $225 million on account of declining print advertisement revenue.

Group M, the world’s largest media agency, in its report has stated that in 2008 the global advertising market grew by 3%. In 2009 the market is expected to degrow by 4.4%. Group M’s forecasts follow predictions by Carat, owned by Aegis, that global ad spend would fall 5.8% in 2009.

Carat predicted that the US would fall 9.8%, Western Europe by 6.6% and the so-called “emerging” European countries would be hit worse. Spain, Russia and the UK are estimated to decline by 16.5%, 8.6% and 11% respectively.

The Indian scenario - a speed breaker on the highway

The Indian economy and the advertising market have also been hit by the worldwide economic slowdown. The Indian economy which was expected to grow at nearly 10% at the beginning of FY 2008-09 is now expected to clock-in a lower growth rate of 6.6% (Source: RBI report). The RBI survey also predicts a 5.7% growth rate in FY 2009-10. The IMF’s growth estimates for 2009 is 5.4%. These growth rates are far lower compared to the growth rate of 7% - 9% during the preceding fi ve years. The Ad industry is a leveraged play on GDP and the high GDP growth rates achieved in the past have been responsible for the meteoric rise of the advertising industry.

FY 2009-10, by all accounts, is expected to be a challenging one for the entire media sector. Not only is industry growth slowing down but there are increasing complexities which have emerged as a result of greater fragmentation of audiences across media and distribution platforms. Further, advertisers/brand managers now demand far greater accountability of marketing investment.

While the environment is tough, the Indian advertising industry is still expected to grow, albeit at a slower pace. Group M predicts that India’s ad spending in 2009 will grow by 4.7%. The Indian advertising industry will again outshine its peers around the world.

While there is an obvious slowdown, we believe the M&E industry in this country will be back on the fast-growth track soon. In fact, the FICCI-KPMG report for 2009 (released post the slow-down) states that the Indian M&E industry would grow at a CAGR of 12.5% for the next 4 years. This seems possible as in 2008, a year which was considered quite tough for the industry, the M&E industry grew by 12.3% (Source: FICCI-KPMG report 2009).

55


Sr. No. Medium Revenue ‘08 Revenue ‘09 projected

Growth 08-09 CAGR-09-13 Revenue 2013

1 TV 240.5 262.7 9% 14.5% 472.02 Print 172.6 183.9 7% 9.0% 266.03 Filmed Entertainment 109.3 109.2 0% 9.1% 168.64 Radio 8.4 9.2 10% 14.2% 16.35 Animation 17.4 20 15% 17.8% 39.46 Gaming 6.5 9.4 45% 33.3% 27.47 OOH 16.1 17.7 10% 12.8% 29.38 Music 7.3 7.5 2% 9.5% 10.79 Internet 6.3 8.4 33% 27.9% 21.4

Total Advertising 221.7 238.3 7% 13.5% 396.8Total Industry 584.4 628.0 7% 12.5% 1,051.1

(KPMG report)Figures in Rupees billion

The reason for this continuing higher growth is based on strong fundamentals that are favourable to the sector:

1) The economy is still growing at a positive rate, albeit slower. There is no recession in India – only a slowdown and that too a temporary one.

2) The demographics of the country are most favourable for consumption – the average Indian consumer is very young; nearly 70% of the Indian population is below the age of 35 years.

3) The media penetration in the country is still low e.g. there are still 359 million people in the country who can read, write and understand one local/regional language but do not read any publication. Similarly for a free to air medium like radio (which is affordable), each member of the population is a prospective listener.

4) The ad to GDP ratio in the country still continues to be very low at around 0.57%. This is much lower than economies like the US where it is upwards of 1.2% and developing economies such as Hong Kong and Thailand which recorded 1.47% and 1.1% respectively. The global average is also higher at 0.9%. (Zenith Optimedia – October 2008 report). Thus there is ample room for expansion.

5) The Indian growth story is being fuelled by the burgeoning domestic consumption. More than 60% of India’s GDP is contributed by domestic consumption. Our GDP growth and thus the advertising market growth to some extent are insulated from the global meltdown.

While this year has been tough for a number of industries like Banking and Finance, Real Estate and Auto, many industries have demonstrated growth though relatively lower when compared to previous years. The IT/BPO sector has slowed down but is estimated to have grown by 16-17% this fi scal (Source: NASSCOM). The FMCG market which is a key driver for advertising revenues has also seen a growth of 16% (Source: FICCI – CRISIL report). According to a survey of 225 services companies, done by the CII in mid February in 2009, a growth rate of 33% was expected in FY 2008-09. This growth inspite of the global challenges this year augurs well for the coming fi scal. We are hopeful that strong domestic demand along with favourable government policies would lead to a much stronger performance across industries. Better and higher growth rates in these sectors will result in greater advertising and marketing spends.

B. FM RADIO INDUSTRY: 2008-2009

Government’s views on Phase III recommendations submitted by TRAI.

There was good news for the private FM radio industry as the Ministry of I&B responded to TRAI’s recommendations. It is believed that this will pave the way for a robust Phase III policy.

Some key recommendations made by the TRAI and the Government’s response are outlined below:

1) District level licenses:

a. TRAI recommendation: All licenses in the future would be given on a district level basis. All existing city level broadcasters would be incentivised to spread their operations across the district.

b. Government’s view: For technical and logistic reasons; the Government claims, it is not in position to accept the recommendation.

56


2) Networking:

a. TRAI recommendation: Full-scale networking to be permitted. This would improve viability of the radio operators in smaller towns as it will reduce operating costs and investments in capex.

b. Government’s view: This would be allowed. However, atleast 20% of the content of any station has to be local.

3) Automatic extension of the license beyond 10 years:

a. TRAI recommendation: The FM license period should be automatically extended by 10 years for all broadcasters who agree to extend their networks into the districts. The entry fee for the extension was prescribed as equivalent to the highest OTEF in a city that was paid at the beginning of the license period.

b. Government’s view: Prefer a bidding process (fairly complex) which would give the fi rst right of refusal to the existing frequency holder in a city.

While details of the fi nancial commitment to be made are awaited, it is good that existing operators will be given the fi rst right of refusal.

4) Multiple frequencies:

a. TRAI recommendation: Ownership of multiple frequencies should be allowed subject to a minimum of three privatebroadcasters in a district. The cap on number of frequencies any one broadcaster can own at district level would be 50% of all available frequencies in the district.

b. Government’s view: This would be allowed as long as there exists three different channels in a city and no player has more than 40% of the total frequencies in that city.

We believe that this is a progressive recommendation and will help achieve several growth objectives. The main advantage is that it would result in greater diversity of programming – currently the biggest challenge for the Industry is lack of content differentiation. A second frequency can be operated from the same premises as the main frequency with minimal increase in capex. Further, the operating costs are much lower as it encourages shared infrastructure and services. The listener too, will have a wider choice. Equally, the frequency owner has a far better potential to attain and sustain higher profi tability.

The TRAI took a view that with a plethora of media vehicles available across the country, there was no fear of monopolies getting formed on account of ownerships of multiple frequencies by a single operator. In the past, this was the Government’s concern in disallowing ownership of multiple frequencies.

5) Tradability of licenses:

a. TRAI recommendation: Change of ownership to be permitted after 3 years of operationalisation in lieu of the present norm of 5 years.

b. Government’s view: This has been accepted.

6) News & Current Affairs:

a. TRAI recommendation: The private broadcasters be permitted news and current affairs but limited the sourcing of news to a few authorised bodies – viz AIR, DD, certain wire services and authorised TV channels.

b. Government’s view: This is acceptable as long as the news originates from AIR or is an audio version of the news on DD.

The Government’s view does not take into account the ground realities. The Association of Radio Operators for India (AROI) will continue to work with the Government on the subject to resolve this anomaly vis-à-vis a powerful medium like television news broadcast.

7) FDI:

a. TRAI recommendation: FDI in general entertainment radio stations be permitted upto 49% and in radio stations undertaking news broadcast to 26%.

b. Government’s view: This has been accepted.

8) Ceiling of 15% on the overall channels allocated to a radio station:

a. TRAI recommendation: This cap should be removed.

b. Government’s view: It is important to maintain this cap to ensure that smaller players’ interests are protected.

We believe that some of the views of the Government do not address the needs of the FM radio industry. AROI is pursuing the demands of the Industry which are based on the market needs and ground realities. Nevertheless, Phase III promises to expand the coverage of FM radio to an additional 200 towns and will mitigate several constraints that the Industry faces today. We appreciate the pragmatic policy proposed by TRAI and eagerly look forward to early implementation.

57


Radio industry has slowed down but maintains share in advertising pie

With the Phase II expansion, the radio industry was expected to improve revenues and become more relevant to the advertising budgets of clients. While private FM radio now spreads brand messages across the country, the overall revenue realisation, with the addition of new frequencies, has risen from about 3% a few years back to about 4% of total advertising revenue. Radio’s share would have been far better, but for the slowdown. While the impact on advertising revenues from retail segment has been less severe, national advertising was severely affected. This resulted in lower capacity utilisation in the newer markets. Consequently, the overall share of radio recorded only a marginal improvement.

As per the FICCI-KPMG report in 2008, the size of the industry was approximately Rs. 8.4 billion inclusive of AIR revenues. This translates into a growth of 13.5% over last year’s revenues. With the implementation of the Phase III policies proposed by TRAI (multiple frequencies, news and current affairs, tradability of licenses etc.) we believe that this share will, increase rapidly increase and may eventually attain the global average of 7%-8%.

The report also forecasts that radio will grow at a CAGR of 14.2% till 2013 making it a Rs. 16.3 billion market. In our view, this is a conservative growth forecast. However, even at this growth rate, radio will outpace the growth rates forecasted for print, fi lms, music and outdoor advertising.

Our Company has a dominant share of the market. Thus, inspite of a number of new entrants in the private FM space, we have been able to maintain our leadership position. At the end of FY 2008-09, Mirchi’s share of the private FM radio market was estimated at 41%. While this is a drop from 47% market share recorded in FY 2007-08, it is still signifi cant. In the immediate future, it is unlikely that we will lose further market share.

RAM listenership study expanded

The RAM (Radio Audience Measurement) study was launched by TAM India Limited in the cities of Delhi, Mumbai and Beangaluru in October 2007. It was then expanded to include Kolkata. It is expected to extend to Hyderabad and Chennai by FY 2009-10. From its very inception, the RAM study has received mixed response to the methodology and its fi ndings. While many broadcasters do support RAM and appreciate their fi ndings, we do not fully subscribe to the structure and the methodology adopted by RAM.

There are some signifi cant limitations to the RAM methodology. To start with, the sample size is extremely small. This in turn infl uences the research fi ndings and compounds the basic fl aw inherent in the methodology itself. Our reservations on RAM should be viewed in the context of methodologies like the Diary method as well as our recommendations to the research bodies and the industry to adopt new technologies like peoplemeters. We also belong to a school of thought that advocates larger sample sizes for complex ethnic markets like India.

What the radio industry here needs is electronic measurement of radio listenership. In the past, there has been no electronic technology available for measurement. However, some progress has been made in the recent past and new research technology is being tested by MRUC and other bodies. In India, some initial tests using electronic meters are likely to happen in the next year. Electronic measurement is undoubtedly more expensive, but it is far more accurate and reliable. It measures listenership in its dynamic form. We hope that the radio industry will support our point of view in introducing new technology/measurement.

It is therefore no surprise that the media planners and buyers use RAM fi ndings in a very selective manner. Most often they tend to use the fi ndings to bargain for better price points. However, media planners are unable to exploit the methodology and its fi ndings as they do with Television Audience Measurement (TAM) tools.

Consolidation of AROI (Association of Radio Operators for India)

For a fast growing industry operating in a highly regulated environment, it is critical that there is a single trade body that protects its interests vis-à-vis other verticals within the M&E space. Such an association also enables the Government to hold a robust dialogue with the radio industry. AROI has been trying to achieve this objective. This year all the private FM radio operators were able to achieve a consensus on several issues confronting the industry. This consensus was effectively communicated to the Government/Ministry of I&B. While certain issues have been resolved, the AROI, and Entertainment Network (India) Limited (‘ENIL’ / ‘the Company’), in its individual capacity, are aggressively engaged with the Government to resolve the issues listed below:

1) License Fees payable on Gross Revenue instead of Net Revenue – Since Net Revenue is what a radio station actually earns; the license fees should be a percentage of Net Revenue and not as a percentage of Gross Revenue which is the current position. Many other sectors enjoy concessions by way of calculation of the revenue share on the basis of AGR – Adjusted Gross Revenue and NOT the Gross Revenue. In the case of telecommunication companies, certain income streams such as – Dividend income, Interest income, Capital gains, Foreign exchange fl uctuations, Reversal of provisions, Handset sales, Bad debts, Waivers and Discounts etc. are not considered while computing the revenue share. A TDSAT ruling on the same issue also clearly states that “basic principle is that license fees should be payable on realised revenue”. We have therefore requested the Government that the Radio Industry should not be discriminated against and the stipulated revenue share should be calculated on an AGR basis.

58


2. No minimum commitment by the Government of their advertising spends to private FM radio – Atleast 25% of Government spend on advertising should be allocated to private FM radio as provided in the original consultation paper. Private FM was allowed with the objective of complementing the state carrier and helping the Government meet the objectives of educating and entertaining the masses. The reach of radio, combined with the fact that it is free to air; and with negligible receiver costs, makes it an unrivalled broadcasting medium. It is one of the best mediums for the Government to reach out to the masses. The Government endorses this view considering the spends made by it on the state run radio broadcaster. The Government spending on AIR is in excess of Rs. 150 crores annually – almost around 20% of the total private FM radio revenue. AROI is requesting the Government that if the private FM channels are shouldering the responsibility of reaching out to the masses and helping spread education and knowledge, they should also be allowed to get a larger share of the advertising spends of the Government – majority of which is aimed at public welfare/education and knowledge dissemination.

3. Non Inclusion of the Private FM Radio Industry in the priority lending sector of all Indian Banks – The Private FM Radio Industry should be included in the priority sector lending of all banks as this would enable it to raise funds at lower cost. In the current economic environment, we are witnessing a huge slowdown in our only source of revenue which is advertising as well as delays in receivables leading to cash fl ow problems. Lower interest rates and moratoriums on the current loan repayments to banks for a period of atleast 2 years, will go a long way in assuaging these problems.

Our Industry has a long gestation period and requires funds for both capital and operating expenditure. Inclusion of FM radio as part of the priority sector will enable it to meet its fund requirement.

Compulsory licensing for broadcasters upheld by Hon’ble Supreme Court

As leaders of the radio industry, we have been in the forefront against the monopolistic and unfair practices of Music Societies and large Music Companies.

The issue of Compulsory Licensing and the quantum of royalties has been disputed since 2001 by the Radio Industry and the Music Societies. The disputes fi nally went to the Hon’ble Supreme Court in July 2004 where a verdict was reached after almost 4 long years- in May 2008.

The Hon’ble Division Bench of the Supreme Court has, vide its land mark judgment dated May 16, 2008, ruled that:

1) Compulsory License can be issued to a broadcaster – in both situations - when the music work has been totally withheld from all broadcasters – or when it has been voluntarily licensed to one or more broadcasters.

2) Compulsory License can be issued to any number of broadcasters. Any broadcaster who feels that the copyright owner is not offering reasonable terms can seek compulsory license from the Copyright Board.

3) The royalty quantum matter should be heard again by the Copyright Board.

Being aggrieved by the verdict dated May 16, 2008, the Phonographic Performance Limited (PPL) and Super Cassettes Industries Limited had sought Review of the land mark judgment from the Hon’ble Supreme Court. However, in December, 2008, the Hon’ble Supreme Court dismissed the Review Petition fi led by PPL. Similarly the Hon’ble Supreme Court dismissed the Review Petition fi led by SCIL in February 2009.

The Learned Judges, whilst dismissing the Review Petitions, asserted that “No ground has been made out to review our order”.

The dismissal of the Review Petitions has strengthened the stand of ENIL and the Radio Industry even further leaving very little room for the Music Industry to decide as to whom they will License their repertoire to and to whom the repertoire will be denied.

Had the Review Petitions been admitted, it would have put the Music Industry in a stronger position to arm twist the users of Music. They would have continued to take advantage of their monopolistic position and thereby leaving Radio Companies and other users of Music (Television, Internet etc) no choice but to adhere to all their whims and fancies or not use their Copyright at all. Having won this matter, users of Music are in a far more benefi cial position than they were before the verdict was pronounced i.e. the now famous landmark judgment of May 16, 2008.

The Copyright Board has commenced the proceeding for determination of reasonable royalty rates payable by the Radio Industry to the Music Industry. The fi rst round of hearings began on 28th July 2009 and went unto 31st July 2009. The next date for the said hearing is scheduled on 24th August 2009.

In the meanwhile, it is yet another victory for ENIL and thus benefi ting the entire Radio Industry on the important subject on the grant of Compulsory License in India.

It is also learnt that the parent Ministry of the Radio Industry i.e. The Hon’ble Ministry of Information & Broadcasting is also trying its best to work out a solution to the Music Industry and Radio Industry issue of royalties along with the Hon’ble Human Resource Development Ministry to arrive at the solution to the royalty matter at the earliest.

AROI has also been trying to negotiate with the music bodies but till now has had limited success.

59


Political advertising

This year saw a progressive decision made by the Government with respect to allowing political advertising on private FM stations. The radio broadcasters had been pursuing this demand for political advertising for quite some time now, especially since the same was allowed on almost all other mass mediums except private radio stations. With this in place, many radio broadcasters including Radio Mirchi have benefi ted from the ad spends of various regional and national parties. This to some extent has reduced the negative impact of the slowdown in the last quarter of the year. We are hopeful that this is a fi rst step towards many such forward looking decisions by the Government. We hope that private FM would also start getting a considerable share of other Government spends throughout the year in the near future.

C. FUTURE OUTLOOK, OPPORTUNITIES & THREATS TO RADIO INDUSTRY Phase III expansion

The Industry is waiting for the Phase III policy to be announced. While the Government’s stance is known on various issues, the policy announcement will pave the way for the third round of expansion which is expected to increase the number of total frequencies to 700 in nearly 300 cities/towns. The third phase will likely allow broadcasters to own multiple frequencies which will help increase their revenue and profi tability by offering more programming options to listeners. Some radio stations would also take advantage of the permission to air news and current affairs. This along with new regulation for transfer of licenses (likely to be reduced to 3 years from the present 5 years) will help grow both the top line as well as the profi tability of the Industry.

The Industry has also expressed concerns about factors which could hinder the success of Phase III. For instance, if the royalty issue is not resolved and the radio stations are forced to pay royalty irrespective of the size/population of a particular city; then Phase III would become an unattractive and unviable to any investor. The views of the Industry have been acknowledged by the Ministry/Government and the Ministry of Information & Broadcasting is committed to working closely with the Ministry of HRD to ensure that the interests of the broadcasters are protected.

Consolidation of the Industry

Radio is a cost intensive business. With Phase III coming in, the dynamics will change. Existing FM radio markets will have additional frequencies that will come up for auction. Thus it will provide an opportunity to FM operators to consolidate and improve the profi tability of the business. Also, new players/players who are not present in the metro markets will get an opportunity to enter the market.

Tradability of licenses is likely to be allowed now after 3 years instead of the present 5 years. Many players in the industry are bleeding. High OTEF, high license fees and royalty costs have lead several players to seriously evaluate continuance of their operation. Such players could be potential candidates for acquisitions subject to enabling regulations. Consolidation is universally acknowledged as a means to sustain choice of programming to listeners as well as an enabler for innovation and adoptions of new technologies. Further, such consolidation, it seems may happen earlier than anticipated. In such an event, we believe that large players will be pre-eminently positioned to garner higher radio advertising revenues.

This presents both an opportunity and a threat to ENIL. The Management is conscious of the impact of such regulatory changes. The Management periodically reviews and ensures that the Company is in a state of preparedness to respond to such changes.

Strategic sales tie–ups

Consequent to the auction process and fi nal implementation of the private FM radio networks, certain patterns have evolved in the market place, i.e. geographic and programming. Prima-facie it may appear as a disadvantage to smaller networks vis-à-vis networks with a fairly large geographical presence. Strategic sales tie-ups in this context make eminent sense. A case in point is Radio Mirchi’s tie-up with Radio Mantra of the Dainik Jagran Group: this agreement has resulted in an encouraging fl ow of incremental revenues to both the brands/networks. In this model, Radio Mirchi is able to add value to Radio Mantra through better access to national clients and agencies. ENIL is now committed to exploring such strategic sales tie-ups in the market. Further, with a view to sustain such relationships, Radio Mirchi is acutely sensitive to the need to add value to its partners on a sustainable basis. The modality to achieve these objectives is to undertake periodic review of the scheme of arrangement.

D. RISKS, CONCERNS AND CHALLENGES FACING COMPANY 1. Macroeconomic risk

The revenue model of the radio industry is based on garnering advertising revenues. There is a direct correlation between the radio industry and the market economy. As we saw in FY 2008-09, this poses a certain risk to businesses dependent totally on the advertising industry.

60


The overall economic situation has to improve for the radio industry to gain momentum. Phase III regulations alone will not address our needs unless demand for radio advertising increases – which is directly co-related to domestic consumption and thus the market economy. While in FY 2008-09, the growth in GDP was around 6.6%, any further slowdown will hamper the fi nancial health of the M&E industry.

2. Impact of an adverse ruling on music royalties

After the ruling of the Hon’ble Apex court, the matter of resolution of the rates issue between the radio broadcasters and music bodies now lies with the Copyright Board. In the unlikely scenario of the Copyright Board ruling in favour of higher royalty rates, the profi tability of the radio industry would be affected. Radio broadcasters already operate under a high cost structure. Even the amortisation of the OTEF over the period of the license places tremendous pressure on the profi tability of the radio companies. In the case of many broadcasters, the amortisation of OTEF is estimated to be anywhere between 25% and 100% of revenues. In contrast to the radio industry, TV broadcasters or publishing houses do not suffer from such infi rmities. For instance, TV companies operate on far leaner organisation structures – since most revenue comes from national clients, a relatively smaller sales team is required. Since radio channels are local by nature, the number of people employed to build a national network is very high. Hence in addition to the amortisation of OTEF, one of the critical cost components is the ever increasing wage bill. All this is to be seen as part of the content production costs. In this context further increase in music royalties will impact the radio industry even more adversely. It is our belief that the music royalty rates would be rationalised by the Copyright Board – helping reduce the overall burden on the company.

3. Cross media ownership

ENIL is part of the diversifi ed “The Times of India” Group which owns many media businesses. These businesses are spread across Print, TV, Radio, Outdoors and the Internet. During this year, the Government, through TRAI, invited views of various stakeholders of the M&E industry to suggest whether there should be any cross media restrictions in ownership in the media space. We do not agree with the proposed cross media restrictions in view of:

1) Fragmented consumer behaviour – With more than 1,500 dialects across the country, there is no single media entity which can cater to the information/entertainment needs of the entire nation. A small unit of geography like a state would also have multiple dialects and varying media consumption patterns. Mobile telephony in India has reached 30% in a very short period of time. Internet penetration is at 5% but is growing exponentially. DTH service providers are able to provide 150-175 channels through a single pipe. Mobile television would allow viewing television on the mobile phone. The Indian consumer is getting more and also getting better information and entertainment from multiple sources. In this environment, which is also constantly evolving, it is almost impossible for a single medium/source of information/entertainment to dominate or mould the opinion of the masses.

2) Fragmented industry – The Indian media industry is growing fast. Not only are numerous Indian companies making forays in the media space, several foreign players are also setting up joint ventures and establishing a footprint here. The industry across all its segments – Print, TV, Outdoors – is growing in numbers. The result is that audiences for every medium are split and spread across other mediums and various brands in each medium. Thus no single entity can dominate the space. The following facts are also relevant:

a. The total number of TV channels in India is around 600 and another 100 are expected to be added by end 2009.

b. The number of TV channels in the GEC space has grown two fold in the last 2 years.

c. Number of registered newspapers in India is 62,483. There are more than 24,000 registered newspapers and periodicals in Hindi and almost 9,000 in English. The number of registered newspapers and periodicals in Uttar Pradesh alone is around 9,000.

d. As per IRS 2008, R2, the largest newspaper in India is the Dainik Jagran with a readership of 16.2 million. The largest English newspaper – The Times of India has a readership of 6.7 million. Considering the number of literate people in India, these are very small numbers.

3) India is different – We believe that while it is important to look at examples of regulation across the world to learn from the best practices prevalent, it is important to relate and thus customise the same to the media landscape of India. The pace of acceptance of newer media technologies in India is rapid and is constantly evolving. While there has been a huge amount of action on the broadcasting front in the last couple of years, the next couple of years will witness several new broadcasting mediums getting introduced and adopted. This pace of change and evolution (which is faster than what has been observed in other countries) requires specifi c regulation to address market realities; and not merely a mechanical adoption of regulatory norms prevalent in other countries.

61


4) The world is moving towards de-regulation – Cross media ownership restrictions were enacted in various countries at a time when the media industry in these countries was less fragmented i.e. at a nascent stage. The USA is a good example. The US has seen many relaxations in cross media ownership rules over the years. E.g. The original (1970) radio/TV cross-ownership rule prohibited common ownership of a radio and TV station in the same market. The current rule allows common ownership of atleast one television and one radio station in a market. In larger markets, a single entity may own additional radio stations depending on the number of other independently owned media outlets in the market. The Australian cross media ownership restrictions are almost three decades old. A change in these laws is being evaluated since 2002. Norway has no cross media ownership restrictions. Denmark and Sweden have no restrictions on media ownership beyond the normal competition law.

4. Operational and Financial Risks

The Risk Management Framework, established by the Company and monitored by the Board of the Directors, has been the back-bone of managing operational and fi nancial risks that the Company may face. Several risks have been identifi ed and risk mitigation plans are in place. Process owners review the risks periodically and bring to the attention of the Board any risk that may need their attention.

5. Talent Rightsizing

One of the biggest costs in running a radio operation is the people cost. In an economic down-turn, rightsizing the organisation is therefore critical to maintain profi tability. The process of rightsizing is a continuous one. The radio industry is bound to witness several changes in the next couple of years. The competitive environment, the economic environment, regulatory changes like : full networking, increase in royalty costs, creation of sales alliances, buy-outs, etc. will have a bearing on the number of people that we employ.

To prepare and face the current slowdown, the Company has already initiated the process of rightsizing. This is with the aim of maintaining profi tability, increasing productivity and most importantly, protecting shareholder value.

The organisation also believes in attracting the best talent from within and outside the industry. The HR practices are designed to retain the best talent through transparent and meritocratic evaluation processes.

The philosophy of the organisation is that of transparency with emphasis on internal communication.

6. Risks posed on account of business operations of subsidiaries

ENIL’s core business - Radio – accounts for over 50% of its consolidated revenues, i.e., Radio, Out-of-Home (OOH) and Event Management.

The OOH industry and the event management business have been severely impacted by the economic slowdown. The OOH business is very capital intensive and has a long return on investment cycle. Huge investments have already been made in the OOH space to acquire properties. With the advertising market slowing down, the return on investments made in the OOH space is experiencing intense pressure. Moreover, the revenue models of this industry are yet to stabilise particularly in the fast growing new segments such as multiplexes, malls, SEZs, etc. Equally critical is the need for audience measurement/research data that is required to sustain the trust and credibility of the OOH media. ENIL’s investments in the OOH space have been made keeping long term returns in mind.

The Event Management business has been gaining from the tremendous growth in the spends on the BTL (Below-the-Line) space with advertisers wanting more touch-points for their brands in addition to the ATL (Above-the-line – TV, Print, Radio, OOH) spends that they do. This is fuelling the growth of 360°. With a strong position in large format events, 360° is in a good position to launch its own branded events. This year 360° created branded events whose Intellectual Property Rights resides with 360° for e.g. Gadget Awards, Spelling Bee, etc.

E. SEGMENT-WISE PERFORMANCE

Management discussion and analysis of the Company’s operations and fi nancial consolidation and segment-wise performance together with discussion on fi nancial performance with respect to operational performance should be read in conjunction with the fi nancial statements and the related footnotes. Experiential marketing business (under Alternate Brand Solutions (India) Limited) and Out-of-Home media business (under Times Innovative Media Limited) business are discussed separately.

ENIL – Radio Mirchi:

Revenues grow marginally under trying circumstances

As has been pointed out earlier, this year has been a challenging year for the advertising industry. In a market which slowed down signifi cantly and got further fragmented, the company has been able to marginally increase its revenue. For the year ended March 31st, 2009, the Company grew in revenue by 1% to Rs. 228 crores. The EBITDA for the period was Rs. 50.7 crores – de-growth of 7% over last year. The EBITDA margin has dropped from 24% last year to 22% this year.

62


Much of the de-growth in margins happened because we operated our full network of 32 stations in FY 2008-09 compared to a much smaller number in FY 2007-08. Consequently the costs of operations went up signifi cantly. However, because of focused paring down of costs in the second half of the year, we managed to keep overall costs under check. We hope to start growing EBITDA margin again in FY 2009-10 by continuing with these cost cutting measures.

We are hopeful that the market conditions will improve by the third quarter of FY 2009-10. We are also pursuing measures to revive our inventory pricing and yield in FY 2009-10.

Increasing the lead in listenership

ENIL is a leader in listenership in most of its markets. The recently declared Indian Readership Survey Results (IRS R1, 2009) has placed Radio Mirchi as the largest radio network in the country. With over 40 millions listeners, Radio Mirchi is almost twice the size of its next competitor. With its huge reach, Radio Mirchi is uniquely placed to deliver value to its clients – low cost per thousand (CPT) delivery of the advertising message.

Even as per research (RAM) conducted by TAM India, Radio Mirchi is the overall number one radio brand on a cumulative reach basis, in the four markets of Delhi, Mumbai, Bengaluru and Kolkata.

Even in markets where our competition has entered over the last one year, we held on to our leadership position during FY 2008-09.

Recognition for Brand Mirchi

Amongst the most satisfying developments during the year was the recognition for brand Mirchi as being the No. 1 media brand in the country – ahead of such iconic brands like The Times of India (parent of Radio Mirchi) and Star Plus. The survey was conducted by Pitch magazine and IMRB. This is truly a big honour for Mirchi – a very young brand to have overtaken established brands.

Further, the radiomirchi.com website has been voted the most popular TV and Radio site in India. The survey was conducted by Metrix Labs and AC Nielsen. The survey had 1.5 million participants. Mirchi joins the hall of fame – along with sites like ndtv.com, aajtak.com and google.com, etc. amongst others. The success of the website refl ects the overall popularity of the Mirchi brand.

During the year, our CSR (Corporate Social Responsibility) programme made great strides. One of our initiatives – ‘Audio Films for the Blind’ – won CSR award in the Silver Category of the Reader’s Digest, Pegasus CSR Awards 2008-09 out of 40 shortlisted participants. This is the fi rst time that Mirchi has participated in such awards. It is indeed heartening to note that our CSR initiatives has been acknowledged as “most innovative” by the jury. Working mostly in the subterranean zone and relying purely on innovation and passion, our CSR team has managed to earn this recognition for Mirchi for the work done on the “Hari Puttar Audio fi lm” as well as the “audio books” program.

As in the past, Mirchi won several awards at the IRF India Radio Forum this year. Amongst the many awards, the Award for Best Jockey of the Year has been won by a Mirchi team member. Other awards won include awards for creative jingles in Hindi, Bengali and Kannada.

Our leadership status – acknowledged by way of several awards, demonstrates the creative talent of our programming and marketing team.

Mirchi market shares remain strong

Our strong listenership position gives us high revenue market share. While aggressive pricing by competition has lead to an erosion in our pricing, Mirchi still commands the strongest pricing in the market by a large margin. While we would have lost out on some volumes initially at the beginning of the slowdown, we have now almost successfully stabilised volumes as well as pricing.

In spite of competitive pressures and poor market conditions, we have maintained a 41% revenue share in the market.

SAP stabilised

The growth of the Company in geographical spread necessitated implementation of standard processes and procedures. In order to achieve this, the Company had taken the ERP route for its key business processes and implemented the fi rst phase of SAP during the last fi nancial year. We have been able to reap the benefi ts this year by way of improvement in process effi ciencies and better control over business and fi nancial risk. This year also saw the roll out of the subsequent phases – addition of the employee service module which would help employees deal with HR processes more effi ciently on a day-to-day basis. We are committed to increase the scope of SAP to other areas of our business.

New businesses

While advertising is the only revenue generator for Mirchi, we are well aware and responsive to opportunities which could help us garner incremental revenue around our core business. Radio content monetisation is a fi eld that we have successfully entered and have generated incremental revenues this year, in the form of revenue shares from telcos. We will pursue such opportunities in the future as they have a positive impact on profi tability.

63


Mirchi Music Awards

This year also saw the launch of the fi rst Mirchi Music Awards. The Mirchi Music Awards are the fi rst and only awards dedicated to music in India. This initiative and the response it generated from the music fraternity has once again established Radio Mirchi as the radio station of choice, the channel with deep relationships with the music and Bollywood community in this country. The awards drew a lot of appreciation from the music fraternity and will now be part of the annual calendar. The awards were telecast on a major TV channel and garnered eight times more viewership than a similar award function organised by a competing radio brand.

F. SUBSIDIARY COMPANIES

Alternate Brand Solutions (India) Limited:

Last year, the Event Management business 360° was carved out from Times Innovative Media Limited (TIM) and housed into a new company viz. Alternate Brand Solutions (India) Ltd (ABSL). The primary reason for the same was that the OOH business needed a distinct focus, funding and a management team to achieve our corporate growth plan. The Event Management business, on the other hand, totally transformed from being one of purely undertaking client events to creating Event Brands of its own IPR.

Another promising space we are focusing on is Promotions. Clients want their customers to have a feel of the product. They are increasing their spends on BTL activities, specifi cally on promotions.

We believe that while the full potential of this business is yet to be tapped, we have made strides in the right direction. Our focus on generating new IPR owned media properties has resulted in the creation of event brands like the Ford Super Model, Gadget Awards and Spelling Bee.

We have also been able to successfully complete the 2nd edition of the Teen Diva contest and 3rd edition of the Smart Living Awards.

ABSL generated revenues of Rs. 57 crores this year, a 5% de-growth over last year.

We intend to continue making investments to create more Intellectual Properties this year. Creation and ownership of event brands will not only offer better margins and sustainability of revenues in the long term but also differentiate us from the other event management companies.

Times Innovative Media Limited (TIM):

TIM witnessed 11% growth in revenues in FY 2008-09, that too in a market faced with a liquidity crisis, slowing GDP growth and truncated advertising spends.

Post the infl ux of equity by Goldman Sachs and Lehman Brothers, the year began with a series of acquisitions to fuel TIM’s strategy of growth and increasing the foot-print in India. TIM also focused on fi lling key positions to head business verticals such as acquisitions, projects and airports. However, by Q3 2009 the effect of the global turmoil started to press hard on the Indian Advertising Industry and it became increasingly diffi cult to monetize properties at the acquired rates. This forced a change in TIM’s strategy from aggressive growth to driving down costs, property profi tability and re-alignment, streamlining of processes and structural re-organisation.

In the fi nancial year under review, the Out-Of-Home advertising industry (OOH) registered a marginal growth of 3.6% to Rs 1,448 crores and its share in the overall ad-pie stands at 6.4% (Group M Report). While the slump in the advertising industry continues, TIM has remained committed to category building and exploiting the opportunities of inorganic growth through Exclusive Marketing Rights (EMRs). TIM’s market share increased by 1.5% to 11.2% in FY 2008-09.

64


TIM focused on new customers and increased its client base in both segments of the business – 108 new customers were added in the airport vertical and 199 in the traditional product verticals. In the year under consideration, TIM received the Brand Leadership Award by Asia Brand Congress.

The year 2008-09 can be viewed in two distinct phases, each of which has impacted the DNA of TIM.

I. Aggressive Growth

i. Charter of a 20 city expansion plan with an aim to increase the market share and be the advertiser of choice.

ii. Build on new acquisitions of Bus-Rapid-Transport Corridor in Delhi, Jaipur Unipoles, Chandigarh BQS, Hyderabad and Bengaluru. These also helped TIM strengthen its foothold in Street Furniture, the fastest growing segment of the out-of-home business in India.

II Measured Growth (Resource Optimisation)

The second half of the year saw a severe crisis of confi dence in the market leading to declining demand – this resulted in lower pricing, higher credit requirement and in-turn suppressed occupancy even at key and premium properties. TIM had, therefore, to adopt following measures to counter slowdown:

i. Stringent cost correction measures on all fronts leading to pruning down the costs. TIM has divested some of its non-profi table properties like NDMC Pole Kiosks, BRT Corridor in Delhi, Unipoles in Jaipur, Chandigarh BQS and billboards in Kolkata. The effect of these cost reductions will be evident in FY 2009-10.

ii. Development of new revenue verticals and a “go-to-market” model focused towards trading. This initiative has started to contribute to revenue and the bottom-line.

iii. Inorganic growth through 6 Exclusive Marketing Rights Transit assets in Delhi, Gantries (overhead displays) & LED screens in Bengaluru, and Billboards, Gantries, Foot Over bridges in Hyderabad.

TIM’s total income rose to Rs. 149.41 crores in FY 2008-09. TIM, however, posted a net loss due to the lower ad spends, cancellation of long term advertising contracts, new investments and certain one off costs.

GENERAL

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a system of internal controls to ensure that all its assets are properly safeguarded and not exposed to risks arising out of unauthorised use or disposal. The Internal Control System is supplemented by a programme of internal audit to ensure that the assets are properly accounted for and the business operations are conducted in adherence to laid down policies and procedures.

The Company has an Audit Committee of the Board of Directors which meets regularly to review, inter alia, risk management policies, adequacies of internal controls and the audit fi ndings on the various segments of the business.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

Specifi c need based training and development programmes for all levels of employees were imparted in order to optimise the contribution of the employees to the Company’s business and operations. Occupational health, safety and environmental management are given utmost importance. Material development in human resources/industrial relations front has been dealt with in the Directors’ Report, under the head ‘Operations’, which should be treated as forming part of this Management Discussion and Analysis. As on March 31st, 2009, the employee strength (on permanent roll) of the Company was 785.


Vineet Jain A. P. Parigi Chairman Managing Director



65


AUDITORS’ REPORTTO THE MEMBERS OF ENTERTAINMENT NETWORK (INDIA) LIMITED1. We have audited the attached Balance Sheet of Entertainment Network (India) Limited, as at March 31, 2009, and the related Profi t and

Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These fi nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the ‘Order’), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order, to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profi t and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profi t and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 2009 and taken on record by the Board of Directors, none of the directors is disqualifi ed as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said fi nancial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009;

(ii) in the case of the Profi t and Loss Account, of the profi t for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date.

Partha Ghosh Partner Membership No. F-55913 For and on behalf of Price Waterhouse & Co. Chartered Accountants

Place: MumbaiDated: May 19, 2009

66


ANNEXURE TO AUDITORS’ REPORT(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Entertainment Network (India) Limited on the financial statements for the year ended March 31, 2009)

1. a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fi xed assets.

b) The fi xed assets of the Company are physically verifi ed by the Management according to a phased programme designed to cover all the items once in a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, the fi xed assets has been physically verifi ed by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

c) In our opinion and according to the information and explanations given to us, a substantial part of fi xed assets has not been disposed of by the Company during the year.

2. a) The Company has not granted any loans, secured or unsecured, to companies, fi rms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of paragraph 4 of the Order are not applicable to the Company for the current year.

b) The Company has not taken any loans, secured or unsecured, from companies, fi rms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable to the Company for the current year.

3. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fi xed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

4. According to the information and explanations given to us, there are no contracts or arrangements referred to in Section 301 of the Act that need to be entered in the register maintained under that section. As there are no contracts or arrangements referred to in Section 301 of the Act, clause (v) (b) of paragraph 4 of the Order is not applicable to the Company for the current year.

5. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under.

6. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

7. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

8. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, income-tax, wealth tax, service tax, customs duty, cess and other material statutory dues as applicable with the appropriate authorities in India. As informed to us, investor education and protection fund, employees’ state insurance, sales tax and excise duty are not applicable to the Company for the current year.

b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, wealth tax, service tax, customs duty and cess as at March 31, 2009, which have not been deposited on account of any dispute.

9. The company has no accumulated losses as at March 31, 2009 and it has not incurred any cash losses in the fi nancial year ended on that date or in the immediately preceding fi nancial year.

10. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any banks as at the balance sheet date.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to chit fund/ nidhi/ mutual benefi t fund/ societies are not applicable to the Company.

13. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

67


ANNEXURE TO AUDITORS’ REPORT(Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Entertainment Network (India) Limited on the financial statements for the year ended March 31, 2009)

14. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or fi nancial institutions during the year.

15. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

16. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short-term basis, which have been used for long-term investment.

17. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

18. The Company has not issued any debentures during the year.

19. The Company has not raised any money by public issues during the year.

20. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

21. The Clause (ii) of paragraph 4 regarding inventory of the Order, is not applicable in the case of the Company for the year, since in our opinion there are no matters which arise to be reported in the aforesaid order.



68


BALANCE SHEET AS AT MARCH 31, 2009

Schedule Rupees

As at March 31, 2009

Rupees


Rupees

SOURCES OF FUNDS

Shareholders’ Funds

Capital 1 476,704,150 476,560,600

Reserves and Surplus 2 2,659,539,285 2,629,210,794

Loan Funds

Secured Loans 3 200,000,000 1,152,500,000

Unsecured Loans 4 900,666,180 780,000,000

TOTAL 4,236,909,615 5,038,271,394

APPLICATION OF FUNDS

Fixed Assets 5

Gross Block 3,664,490,224 3,616,246,108

Less: Depreciation/Amortisation 1,175,694,244 779,963,203

Net Block 2,488,795,980 2,836,282,905

Capital Work-in-Progress including Capital Advances 20,500,000 45,523,863

2,509,295,980 2,881,806,768

Investments 6 390,250,000 420,250,000

Deferred Tax Assets (net) 7 74,106,934 44,385,964

Current Assets, Loans and Advances

Sundry Debtors 8 585,673,035 680,524,300

Cash and Bank Balances 9 116,519,921 120,889,847

Loans and Advances 10 852,421,331 1,352,068,557

1,554,614,287 2,153,482,704

Less: Current Liabilities and Provisions 11

Current Liabilities 262,170,255 436,427,449

Provisions 29,187,331 25,226,593

291,357,586 461,654,042

Net Current Assets 1,263,256,701 1,691,828,662

TOTAL 4,236,909,615 5,038,271,394

Notes to the Financial Statements 18

The Schedules referred to herein form an integral part of the Balance Sheet

This is the Balance Sheet referred to in our report of even date.

Partha Ghosh Partner Membership No. F-55913For and on behalf of Price Waterhouse & CoChartered Accountants

Mumbai Dated : May 19, 2009


Vineet JainChairman

A. P. ParigiManaging Director

N. SubramanianGroup CFO

Mehul ShahAsst. Vice President – Compliance & Company Secretary


69



Vineet JainChairman





PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009

Schedule 2008-2009

Rupees 2007-2008

Rupees

Income

Sales 12 2,282,798,977 2,252,163,574

Other Income 13 18,939,167 41,742,181

2,301,738,144 2,293,905,755

Expenditure

Production Expenses 14 211,491,645 149,045,619

Licence Fees 15 122,714,444 119,930,539

Employee Costs 16 538,975,405 487,523,724

Administration and Other Expenses 17 910,462,084 972,802,443

Interest – net (Refer Notes 1(x) and 12 on Schedule 18) 97,543,169 80,235,148

Depreciation 400,949,260 321,111,916

2,282,136,007 2,130,649,389

Profi t Before Taxation 19,602,137 163,256,366

Provision for Taxation (Refer Note 1(xi) on Schedule 18)

– Current Tax — 16,100,000

– Minimum Alternate Tax Credit Entitlement — (16,100,000)

– Deferred Tax (29,720,970) (20,676,748)

– Fringe Benefi t Tax 20,200,000 22,000,000

Profi t After Taxation 29,123,107 161,933,114

Profi t and Loss Account Balance Brought Forward 745,199,757 583,266,643

Profi t and Loss balance carried forward to the Balance Sheet 774,322,864 745,199,757

Earnings Per Share (Refer Note 18 on Schedule 18)

– Basic 0.61 3.40

– Diluted 0.61 3.40

Notes to the Financial Statements 18

The Schedules referred to herein form an integral part of the Profi t and Loss Account

This is the Profi t and Loss Account referred to in our report of even date.



70


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009

2008-2009 Rupees

2007-2008 Rupees

A) CASH FLOW FROM OPERATING ACTIVITIES :Profi t Before Taxation 19,602,137 163,256,366 Adjustments for : Depreciation and Amortisation 400,949,260 321,111,916 Interest Expense 97,543,169 80,235,148 Provision for Employee Stock Option Scheme expenses 35,067 377,961 Profi t on sale of Investments (10,871,614) (19,686,917)Loss on sale of Fixed Assets 137,809 — Write off of Fixed Assets — 36,031 Provision for bad and doubtful debts withdrawn (11,238,461) (11,745,564)Provision for bad and doubtful debts 32,339,514 13,685,431 Provision for Retirement Benefi ts 4,960,738 7,086,540 Operating Profi t Before Working Capital Changes 533,457,619 554,356,912Adjustments for changes in working capital : Decrease / (Increase) in Sundry Debtors 73,750,212 (202,024,506)Decrease / (Increase) in Other Receivables 727,052,233 (995,341,278)(Decrease) / Increase in Trade and Other Payables (174,257,194) 164,113,193 Cash generated from / (used in) operations 1,160,002,870 (478,895,679)Taxes paid (net) (60,816,088) (58,829,740)Net Cash from / (used in) Operating Activities (A) 1,099,186,782 (537,725,419)

B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Fixed Assets (29,795,321) (341,987,960)Proceeds from Sale of Fixed Assets 1,219,040 50,938 Purchase of shares in Subsidiary Company — (350,250,000)Loan given to Subsidiary Company (620,000,000) — Loan repayment by Subsidiary Company 432,233,000 461,470,731 Purchase of Investments (1,345,500,000) (2,640,091,798)Proceeds from Sale of Investments 1,386,371,612 2,655,007,564 Net Cash used in Investing Activities (B) (175,471,669) (215,800,525)

C) CASH FLOW FROM FINANCING ACTIVITIES :Proceeds from Long Term Borrowings: – Payments (149,333,820) — Proceeds from Short Term Borrowings: – Receipts 3,393,875,297 864,488,233 – Payments (4,076,375,297) — Proceeds from Exercise of Employee Stock Options Scheme 1,291,950 5,677,650 Interest (net) (97,543,169) (80,235,148)Net Cash Flow (used in) / from Financing Activities (C) (928,085,039) 789,930,735 Net (Decrease) / Increase in Cash and Cash Equivalents (A+B+C) (4,369,926) 36,404,791 Cash and Cash Equivalents as at the beginning of the year 120,889,847 84,485,056 Cash and Cash Equivalents as at the end of the year 116,519,921 120,889,847

(4,369,926) 36,404,791

NOTES ON CASH FLOW STATEMENT : 1. Cash and cash equivalents at the end of the year as per Balance Sheet 116,519,921 120,889,847

116,519,921 120,889,847

2. The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India except in case of interest paid which has been considered on the basis of actual movement of cash with necessary adjustments in corresponding assets and liabilities.

3. Previous year's fi gures have been regrouped and rearranged wherever necessary. 4. Cash and Cash Equivalents includes Rupees 74,525,375 (Previous Year : Rupees 75,722,073) which are not available for use by the Company (Refer Schedule 9 in the

Financial Statements).

This is the Cash Flow Statement referred to in our report of even date.




Vineet JainChairman





71


SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009

As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

SCHEDULE 1: CAPITAL

Authorised Capital

120,000,000 (Previous Year : 120,000,000) Equity shares of Rupees 10 each 1,200,000,000 1,200,000,000

Issued and Subscribed

47,670,415 (Previous Year : 47,656,060) Equity shares of Rupees 10 each fully paid-up 476,704,150 476,560,600

476,704,150 476,560,600

Notes:

1. Of the above, 30,526,560 Equity Shares of Rupees 10 each are held by Times Infotainment Media Limited, the Holding Company and its nominees.

2. Of the above, 3,391,840 Equity Shares of Rupees 10 each are held by Bennett, Coleman & Company Limited, the Ultimate Holding Company.

3. During the year, the Company has issued 5,655 and 8,700 Equity Shares of face value of Rupees 10 each at a premium of Rupees 187.30 and Rupees 185.67 per share respectively pursuant to the exercise of Employee Stock Options granted to the employees. (Refer Note 19 on Schedule 18)

4. For Employee Stock Option Scheme, 2005 (Refer Note 19 on Schedule 18).

SCHEDULE 2: RESERVES AND SURPLUS

Securities Premium Account

As per last Balance Sheet 1,882,541,911 1,869,799,472

Add: Receipts on exercise of employee stock options 2,674,510 12,742,439

1,885,216,421 1,882,541,911

Profi t and Loss Account Balance 774,322,864 745,199,757

Employees Stock Options Outstanding

(Refer Note 19 on Schedule 18)

As per last Balance Sheet 1,469,126 7,619,014

Add: Fair value of options amortised during the year 56,984 873,751

1,526,110 8,492,765

Less: Fair value of options exercised during the year (1,526,110) (7,023,639)

— 1,469,126

2,659,539,285 2,629,210,794

72



As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

SCHEDULE 3: SECURED LOANS

Working Capital Loan from Standard Chartered Bank (Refer Note 1 below) — 702,500,000 [Repayable within one year Rupees Nil (Previous Year : Rupees 702,500,000)]

Term Loan from HSBC Limited (Refer Note 2 below) — 450,000,000 [Repayable within one year Rupees Nil (Previous Year : Rupees 450,000,000)]

Working Capital Demand Loan from Kotak Mahindra Bank Limited (Refer Note 3 below) 200,000,000 — [Repayable within one year Rupees 200,000,000 (Previous Year : Rupees Nil)]

Notes:

1. A pari passu charge by way of hypothecation on book debts and tangible fi xed assets (moveable) of the Company, both present and future in favour of the Bank.

2. A pari passu charge by way of hypothecation over all the current stocks, receivables and plant and machinery both present and future in favour of the Bank.

3. A fi rst pari passu charge on current assets and moveable fi xed assets in favour of the Bank.

200,000,000 1,152,500,000

SCHEDULE 4: UNSECURED LOANS

From Holding Company — Bennett, Coleman & Company Limited 600,666,180 750,000,000

Other Loans and Advances:

From Bank 300,000,000 30,000,000 [Repayable within one year Rupees 300,000,000 (Previous Year : Rupees 30,000,000)]

900,666,180 780,000,000

73



SCHEDULE 5: FIXED ASSETS (Refer Note 1 (iv), (v), (vi), (x) and (xii) on Schedule 18) Rupees

GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

PARTICULARS As at April 1,

2008

Additions during the

year

Deletions / Adjustments

during the year

As at March 31,

2009

As at April 1,

2008

For the year On Deletions /

Adjustments

As at March 31,

2009

As at March 31,

2009

As at March 31,

2008

Tangible Asset

Land — Leasehold 2,036,147 — — 2,036,147 — — — — 2,036,147 2,036,147

Building 7,578,551 — — 7,578,551 2,079,301 274,962 — 2,354,263 5,224,288 5,499,250

Leasehold Improvements 269,338,912 8,281,819 — 277,620,731 57,555,580 39,265,408 — 96,820,988 180,799,743 211,783,332

Offi ce Equipment 974,213,157 32,130,869 1,275,901 1,005,068,125 233,242,928 101,556,827 774,334 334,025,421 671,042,704 740,970,229

Computers 145,932,048 7,255,907 — 153,187,955 70,623,072 31,731,368 — 102,354,440 50,833,515 75,308,976

Furniture and Fixtures 29,696,977 1,519,919 — 31,216,896 20,430,500 2,905,082 — 23,335,582 7,881,314 9,266,477

Motor Vehicles 14,083,247 — 5,299,167 8,784,080 9,165,759 1,131,482 4,443,885 5,853,356 2,930,724 4,917,488

Intangible Asset

(Refer Note 13 on

Schedule 18)

Computer Software (SAP) 11,276,702 5,630,670 — 16,907,372 458,713 7,875,095 — 8,333,808 8,573,564 10,817,989

Migration Fees 815,234,695 — — 815,234,695 244,570,410 81,523,470 — 326,093,880 489,140,815 570,664,285

One Time Entry Fees (Refer Notes 1 and 2 below)

1,346,855,672 — — 1,346,855,672 141,836,940 134,685,566 — 276,522,506 1,070,333,166 1,205,018,732

GRAND TOTAL 3,616,246,108 54,819,184 6,575,068 3,664,490,224 779,963,203 400,949,260 5,218,219 1,175,694,244 2,488,795,980 2,836,282,905

Previous Year 2,753,321,554 863,287,560 363,006 3,616,246,108 459,127,324 321,111,916 276,037 779,963,203

Capital Work-in-Progress [Including Capital Advance of Rupees 20,500,000 (Previous Year : Rupees 42,326,848)] 20,500,000 45,523,863

2,509,295,980 2,881,806,768

Notes:1) Includes borrowing cost Rupees Nil (Previous Year : Rupees 5,987,944).2) One Time Entry Fees is amortised from the date of operationalisation of the respective station.


Rupees


Rupees

SCHEDULE 6: INVESTMENTS (Refer Note 1(viii) on Schedule 18) Non-Trade, Long Term (Unquoted), at cost Investment in Subsidiary Companies : (Refer Note 21 on Schedule 18)32,000,000 (Previous Year : 32,000,000) fully paid Equity Shares of Times Innovative Media Limited of Rupees 10 each. 320,000,000 320,000,000 1,600,000 (Previous Year : 1,600,000) fully paid Equity Shares of Alternate Brand Solutions Limited of Rupees 10 each. 70,250,000 70,250,000Non-Trade, Current (Unquoted – mutual funds) NIL (Previous Year : 25,829) Units of DSP Merrill Lynch Mutual Fund Liquidity Fund – Institutional – Growth — 30,000,000

390,250,000 420,250,000

Note :Aggregate amount of unquoted investment in Mutual Fund Units Rupees Nil (Previous Year : Rupees 30,000,000).

74



As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

SCHEDULE 7: DEFERRED TAX(Refer Note 1(xi) on Schedule 18)Deferred tax assets and liabilities are attributable to the following items:Assets:Provision for Doubtful Debts 11,823,926 4,651,678 Provision for Doubtful Advances 2,124,375 2,124,375 Provision for Leave Encashment 3,783,940 3,001,784 Provision for Gratuity 5,725,902 4,821,904 Expenses disallowed u/s 43B 1,233,883 586,291 Amortisation of Preliminary Expenses 10,764,035 21,528,070 Unabsorbed Depreciation / Business Losses 255,926,815 188,165,686

291,382,876 224,879,788 Liability: Depreciation 217,275,942 180,493,824

217,275,942 180,493,824 74,106,934 44,385,964

SCHEDULE 8: SUNDRY DEBTORS(Unsecured) (Refer Note 4 on Schedule 18)Debts Outstanding for a period exceeding six monthsConsidered Good 59,747,019 38,085,986 Considered Doubtful 34,245,238 13,685,431

93,992,257 51,771,417 Other DebtsConsidered Good 525,926,016 642,438,314 Considered Doubtful 541,246 — 526,467,262 642,438,314 620,459,519 694,209,731 Less: Provision for Doubtful Debts 34,786,484 13,685,431

585,673,035 680,524,300

SCHEDULE 9: CASH AND BANK BALANCESCheques in hand — 21,393,485 Balance with Scheduled Bank on:Current Accounts 41,994,546 23,774,289 Short-Term Deposit Accounts 74,525,375 75,722,073 [Deposit aggregating Rupees 74,525,375 and Rupees Nil (Previous Year : Rupees 75,702,073 and Rupees 20,000) are lying under lien with Banks and Sales Tax Department, Rajasthan respectively]

116,519,921 120,889,847

75



As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

SCHEDULE 10: LOANS AND ADVANCES(Unsecured and Considered Good)Advances Recoverable in Cash or in Kind or for Value to be ReceivedConsidered Good (Refer Note 1 below) 353,460,694 1,064,004,731Considered Doubtful — —

353,460,694 1,064,004,731DepositsConsidered Good 129,863,462 129,893,241Considered Doubtful 6,250,000 6,250,000

136,113,462 136,143,241Less: Provision for Doubtful Deposits 6,250,000 6,250,000

129,863,462 129,893,241Advance to TIML Employees’ Stock Option Trust — 29,174,600Advance payment of tax / tax deducted at source [Net of Provision forTaxation Rupees 74,389,961 (Previous Year : Rupees 74,315,000)] 87,598,435 47,982,347Minimum Alternate Tax Credit Entitlement 46,600,000 46,600,000 Due from Subsidiary Companies (Refer Note 2 below) 47,131,740 34,413,638 Loan to the Subsidiary Company (Refer Note 3 below) 187,767,000 —

852,421,331 1,352,068,557Notes: 1. Due from Bennett, Coleman & Company Limited, the Ultimate Holding Company 232,610,534 128,986,022 Maximum balance outstanding 335,995,922 161,134,038 Due from Times Infotainment Media Limited, the Holding Company 2,307,125 427,621 Maximum balance outstanding 2,999,518 2,168,3782. Due from Times Innovative Media Limited, the Subsidiary Company 22,330,981 18,039,580 Maximum balance outstanding 33,717,955 73,352,386 Due from Alternate Brand Solutions Limited, the Subsidiary Company 24,800,759 16,374,058 Maximum balance outstanding 77,890,415 16,374,0583. Maximum Loan outstanding from the Subsidiary Company Times Innovative Media Limited 570,000,000 461,470,731

SCHEDULE 11: CURRENT LIABILITIES AND PROVISIONSCURRENT LIABILITIESSundry Creditors (Refer Note 5 on Schedule 18)a) Micro and Small Enterprises 100,514 — b) Others 178,721,363 353,794,457 Other Liabilities 83,318,378 80,290,418 Interest accrued but not due on loan — 2,308,074 Security Deposits 30,000 34,500

262,170,255 436,427,449PROVISIONS Gratuity (Refer Notes 1(ix) and 14 on Schedule 18) 16,845,843 14,186,242 Leave Encashment (Refer Notes 1(ix) and 14 on Schedule 18) 11,132,510 8,831,373 Fringe benefi t tax [Net of payments of Rupees 59,191,022(Previous Year : Rupees 37,911,002)] 1,208,978 2,208,978

29,187,331 25,226,593

76


SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009

2008-2009 Rupees

2007-2008 Rupees

SCHEDULE 12: SALES

Sales (Refer Note 1(iii) on Schedule 18) 2,282,798,977 2,252,163,574

2,282,798,977 2,252,163,574

SCHEDULE 13: OTHER INCOME

Management Fee — 18,000,000

Profi t on Sale of Investments 10,871,614 19,686,917

Marketing and Sales Commission 6,553,665 2,980,253

Miscellaneous Income 1,513,888 1,075,011

18,939,167 41,742,181

SCHEDULE 14: PRODUCTION EXPENSES

Royalty 177,747,650 125,333,794

Other Production Expenses 33,743,995 23,711,825

211,491,645 149,045,619

SCHEDULE 15: LICENSE FEES

License Fees (Refer Note 1(xiv) on Schedule 18) 122,714,444 119,930,539

122,714,444 119,930,539

SCHEDULE 16: EMPLOYEE COSTS

Salaries, Wages and Allowances 472,714,175 428,530,303

Contributions to Provident and Other Funds (Refer Note 1(ix) on Schedule 18) 24,564,215 20,668,884

Welfare Expenses 41,661,948 37,946,576

Employees Stock Options Expense (Refer Note 19 on Schedule 18) 35,067 377,961

538,975,405 487,523,724

77



2008-2009 Rupees

2007-2008 Rupees

SCHEDULE 17: ADMINISTRATION AND OTHER EXPENSES

Rent (Net) 147,097,871 114,860,974

Rates and Taxes 3,598,849 3,422,864

Electricity 90,562,927 65,493,334

Marketing 282,625,919 468,452,519

Travelling and Conveyance 103,711,435 100,416,797

Insurance 2,815,590 3,938,353

Communication 20,110,606 17,422,017

Repairs and Maintenance on:

– Buildings 1,114,248 318,050

– Plant and Machinery 11,739,268 8,422,438

– Others 20,254,854 17,230,438

Bank Charges 2,613,915 4,854,535

Training 6,196,126 9,936,387

Legal and Professional Fees 87,331,505 52,018,720

Recruitment 7,235,203 11,014,405

Software Expenses (Refer Note 1(v) on Schedule 18) 23,669,335 16,045,570

Business Promotion 2,328,792 3,142,921

Security 14,040,749 12,259,058

Auditors’ Remuneration (Refer Note 10 on Schedule 18) 2,582,982 2,655,877

Provision for Doubtful Debts 32,339,514 13,685,431

Less: Provision for doubtful debts written back (11,238,461) (11,745,564)

Bad Debts written off 18,325,785 17,371,308

Miscelleneous Expenses 41,405,072 41,586,011

910,462,084 972,802,443

78


SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2009 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009

SCHEDULE 18

NOTES TO THE FINANCIAL STATEMENTS

Nature of Operations

The Company was incorporated on June 24, 1999. The Company operates FM radio broadcasting stations through the brand ‘Radio Mirchi’ in 32 Indian cities. The Company’s revenue is generated mainly from the sale of air time for advertising.

1. Signifi cant Accounting Policies

i. Basis of Accounting

These fi nancial statements are prepared under the historical cost convention and comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notifi ed under section 211(3C) of the Companies Act, 1956 (“The Act”) and the relevant provisions of the Act.

ii. Use of Estimates

The preparation of fi nancial statements in accordance with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of fi nancial statements and the reported amount of expenses of the year. Actual results could differ from these estimates. Any revision to such accounting estimates is recognised in the accounting period in which such revision takes place.

iii. Revenue Recognition

Revenue from radio broadcasting is recognised on an accrual basis on the airing of client’s commercials net of service tax.

iv. Fixed assets and Depreciation

a. Tangible assets

Tangible fi xed assets are stated at cost less accumulated depreciation.

Depreciation on tangible fi xed assets is provided on written down value method at the rates and in the manner specifi ed in Schedule XIV to the Act. The cost of leasehold improvements are amortised over the primary period of lease of the property. Leasehold land is not amortised. Tangible assets individually costing less than Rupees 5,000 are depreciated @ 100% in the year of purchase.

b. Intangible assets

Migration fees paid by the Company for existing licenses upon migration to Phase II of the Licensing policy and One Time Entry Fees paid by the Company for acquiring new licenses, has been capitalised as an asset.

The migration fee capitalised is being amortised, with effect from April 1, 2005, equally over a period of ten years, being the period of the license. One Time Entry Fees is amortised over a period of ten years, being the period of license, from the date of operationalisation of the station.

Expenditure on acquired Computer Software (SAP) are recognised as “Intangible Asset“ and amortised over a period of twenty fi ve months.

v. Software

Software obtained initially together with hardware is capitalised along with the cost of hardware and depreciated in the same manner as the hardware. All subsequent purchases of software are treated as revenue expenditure and charged in the year of purchase.

vi. Preoperative Expenditure

Expenditure incurred by the Company from the date of acquisition of license for a new station upto the date of operationalisation of the station not directly attributable to fi xed assets are charged to the Profi t and Loss account in the year in which such expenditure is incurred.

vii. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fl uctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the Balance Sheet Date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the Profi t and Loss account.

79


viii. Investments

Long term investments are stated at cost. Provision is made for permanent diminution in value, if any.

Current investments are stated at lower of cost and market value / repurchase price.

ix. Retirement Benefi ts

a. Short Term Employee Benefi ts :

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment which is expected to be encashed / utilised within twelve months after the balance sheet date is considered to be of short term nature. The same is provided, based on an actuarial valuation carried out by an independent actuary as at the year end.

b. Long Term Employee Benefi ts :

Defi ned Contribution Plans:

The Company has Defi ned Contribution plans for post employment benefi ts namely Provident Fund. Under the Provident Fund plan, the Company contributes to a Government administered Provident Fund on behalf of its employees and has no further obligation beyond making its contribution.

The Company contributes to State Plan namely Employee's Pension Scheme, 1995 and has no further obligation beyond making its contribution.

The Company's contributions to the above funds are charged to revenue every year.

Defi ned Benefi t Plans:

The Company has a Defi ned Benefi t plan namely Gratuity and Leave Encashment for all its employees. Long term Leave Encashment includes provision for leave which is expected to be encashed / utilised after twelve months from the Balance Sheet date.

Liability for Defi ned Benefi t plan is provided on the basis of valuations, as at the Balance Sheet Date, carried out by an independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the Projected Unit Credit Method.

c. Termination benefi ts are recognised as an expense as and when incurred.

d. Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Profi t and Loss Account as income or expense.

x. Borrowing Cost

Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalised as part of cost of the asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

xi. Taxation

Provision for income tax has been made at the current tax rates based on assessable income or on the basis of Section 115JB of the Income Tax Act, 1961.

Provision for Fringe Benefi t Tax has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realised.


SCHEDULE 18

NOTES TO THE FINANCIAL STATEMENTS (Contd.)

80


xii. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profi t and Loss Account.

xiii. Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outfl ow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to its present date value and are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refl ect the current best estimates.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfl ow of resources. Where there is a possible obligation or a present obligation that the likelihood of outfl ow of resources is remote, no provision or disclosure is made.

xiv. License Fees

As per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 license fees are charged to revenue at the rate of 4% of gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city, whichever is higher. Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes and without deduction of any discount given to the advertiser and any commission paid to advertising agencies. Barter advertising contracts shall also be included in the gross revenue on the basis of relevant billing rates. ROTEF means 25% of highest valid bid in the city.

2. Contingent Liabilities

a) Guarantees issued by banks on behalf of the Company Rupees 6,000,000 (Previous Year : Rupees 6,000,000).

b) Counter Guarantee issued by the Company to HDFC Bank on behalf of Times Innovative Media Limited (a subsidiary company)Rupees 200,000,000 (Previous Year : Rupees 200,000,000).

3. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account Rupees 87,809 (Previous Year : Rupees 19,568,610) net of advances of Rupees 20,500,000 (Previous Year : Rupees 42,326,848).

4. Sundry Debtors

Sundry Debtors include following balances of companies under the same management:

Balance as at

Name of the party March 31, 2009Rupees

March 31, 2008Rupees

Bennett, Coleman & Company Limited (BCCL) 56,155,269 74,534,776

Times Infotainment Media Limited (TIML) — 1,591,936

Alternate Brand Solutions Limited (ABSL) 4,475,989 —

Times Internet Limited (TIL) 11,617,822 5,641,940

Worldwide Media Private Limited (WWM) — 2,413,431

Times Business Solutions Limited (TBSL) 1,137,886 1,412,392

Zoom Entertainment Network Limited (ZENL) 2,307,831 —


SCHEDULE 18


81


5. Sundry Creditors

i. Disclosure has been made as per the defi nition given in the Micro, Small and Medium Enterprises Development Act, 2006. The Company received information from some of the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to the amounts as at year end together with interest payable as required under the Act have been given below:

Particulars March 31, 2009Rupees

March 31, 2008Rupees

i) Payment due as at the year end on account of:— Principal 100,514 —— Interest — —

ii) Total Interest paid on all delayed payment during the year — —iii) Interest due on principal amounts paid beyond the due date during the year but

without the interest amount — —iv) Interest accrued but not due — —v) Total Interest due but not paid — —

The information in 5 (i) above and that regarding micro and small enterprises given in Schedule 11 “Current Liabilities” has been determined to the extent such parties have been identifi ed on the basis of information available with the Company.

ii. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

6. Managerial Remuneration

2008-2009Rupees

2007-2008Rupees

Salaries and Bonus 15,128,516 15,881,850Contribution to Provident and Other Funds* 367,200 367,200Perquisites 5,444,944 5,144,252TOTAL 20,940,660 21,393,302

* Provision for / contributions to employee retirement / post retirements, which are based on actuarial valuations done on an overall company basis, are excluded above.

Approval for the appointment and payment of the above remuneration to Mr. A. P. Parigi, Managing Director has been received from the Central Government of India, Ministry of Corporate Affairs vide their letter No. 12/928/2007-CL.VII dated December 6, 2007.

Note: The computation of profi t under Section 309(5) of the Companies Act, 1956 is not applicable as no commission is payable to the Managing Director.

7. CIF Value of Imports

2008-2009Rupees

2007-2008Rupees

Capital goods 781,621 18,067,980TOTAL 781,621 18,067,980

8. Expenditure in Foreign Currency

2008-2009Rupees

2007-2008Rupees

Travel 6,913,441 6,194,940Training — 645,539Legal and Consultancy 1,094,698 3,012,809Others 541,383 3,253TOTAL 8,549,522 9,856,541


SCHEDULE 18


82


9. Earnings in Foreign Currency2008-2009 2007-2008

Rupees RupeesConsultancy Services 581,292 676,572TOTAL 581,292 676,572

10. Auditors’ Remuneration2008-2009 2007-2008

Rupees RupeesAudit Fees 2,500,000 2,500,000Other Services 60,000 127,160Out of pocket expenses 22,982 28,717TOTAL 2,582,982 2,655,877

11. Additional information pursuant to the provision of paragraph 3 of Part II of Schedule VI to the Act:(i) Current year (2008-2009)

Purchase SaleNos. Value Nos. Value

(Rupees) (Rupees)Units of HDFC Mutual Fund – Cash Management Fund – Savings Plan – Growth of Rupees 10 each 26,979,566 462,500,000 26,979,566 464,896,460Units of ICICI Prudential Mutual Fund – Liquid Super Institutional – Growth of Rupees 10 each 36,374,038 443,000,000 36,374,038 445,516,016Units of LIC Mutual Fund – Liquid Fund – Growth Plan of Rupees 10 each 10,866,022 160,000,000 10,866,022 162,630,091Units of DSP Merrill Lynch Mutual Fund – Liquidity Fund – Institutional – Growth of Rupees 10 each 136,509 160,000,000 162,338 191,636,489Units of IDFC Mutual Fund – G 65 Liquidity Manager – Growth of Rupees 10 each 103,555 120,000,000 103,555 121,692,556TOTAL 1,345,500,000 1,386,371,612

(ii) Previous year (2007-2008)

Purchase SaleNos. Value Nos. Value

(Rupees) (Rupees)Units of HDFC Mutual Fund – Cash Management Fund – Savings Plan – Growth of Rupees 10 each 26,977,879 450,000,000 26,984,200 455,070,414Units of HDFC Mutual Fund – Floating Rate Income Fund – Short Term Plan – Growth of Rupees 10 each 31,387,040 420,091,798 31,387,040 421,735,829Units of HDFC Mutual Fund – Liquid Fund Premium Plan – Growth of Rupees 10 each 26,478,323 420,000,000 26,478,323 420,091,798Units of ICICI Prudential Mutual Fund – Liquid Super Institutional – Growth of Rupees 10 each 56,594,578 660,000,000 58,872,794 693,715,253Units of LIC Mutual Fund – Liquid Fund – Growth Plan of Rupees 10 each 17,916,862 260,000,000 17,916,862 263,770,244Units of DSP Merrill Lynch Mutual Fund – Liquidity Fund – Institutional – Growth of Rupees 10 each 199,009 230,000,000 173,304 200,376,754Units of Standard Chartered Mutual Fund – G 65 Liquidity Manager – Growth of Rupees 10 each 175,110 200,000,000 175,110 200,247,272TOTAL 2,640,091,798 2,655,007,564


SCHEDULE 18


83


12. Interest

2008-2009 2007-2008 Rupees Rupees

Interest Expense :On Loan 143,887,991 173,525,112Others 122,933 262,989

144,010,924 173,788,101Interest Income : On Deposits with banks [Tax deducted at source Rupees 383,964 (Previous Year : Rupees 1,191,553)] 6,704,014 5,986,806On Loans [Tax deducted at source Rupees 3,447,332 (Previous Year : Rupees 4,305,305)] 39,763,741 87,566,147

47,467,755 93,552,953Interest Expense - net 97,543,169 80,235,148

13. One Time Entry Fee (OTEF) and Migration Fee

As per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company had been given the option to migrate all its existing license from Phase I regime to Phase II regime on payment of migration fees. Migration fees for each station shall be equal to the average of all successful bids received for that city. The Company had exercised the option and has migrated its licenses for all the seven cities to Phase II regime by payment of migration fees aggregating Rupees 815,234,696.

Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. The payment made by the Company to acquire these frequencies (One Time Entry Fees) is Rupees 1,301,000,000.

Based on the opinion obtained from an independent fi rm of Chartered Accountant, both Migration Fees and One Time Entry Fees has been capitalised as Intangible Asset.

14. The Company has classifi ed the various employee benefi ts provided to employees as under:-

I) Defi ned Contribution Plans

a) Provident Fund

b) State Defi ned Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profi t and Loss Account -

2008-2009Rupees

2007-2008Rupees

- Employers’ Contribution to Provident Fund* 14,056,171 11,549,105- Employers’ Contribution to Employee’s Pension Scheme 1995* 5,495,245 4,270,627* Included in Contributions to Provident and Other Funds (Refer Schedule 16)

II) Defi ned Benefi t Plans

In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid defi ned benefi t plan of gratuity based on the following assumptions:-

As atMarch 31, 2009

As atMarch 31, 2008

Discount Rate (per annum) 8.00% 8.00%

Rate of increase in Compensation levels 6.50% 6.50%

Rate of Return on Plan Assets 8.00% 8.00%

Expected Average remaining working lives of employees (years) 29.12 29.49


SCHEDULE 18


84


A) Changes in the Present Value of Obligation

As atMarch 31, 2009

Rupees

As atMarch 31, 2008

RupeesPresent Value of Obligation at the beginning of the year 14,186,242 10,083,997Interest Cost 1,134,899 806,720Past Service Cost — —Current Service Cost 5,094,598 3,814,155Curtailment Cost / (Credit) — —Settlement Cost / (Credit) — —Benefi ts Paid (1,823,972) (752,929)Acturial (gain) / loss on obligations (1,772,887) 234,299Effect of transfer in / transfer out 26,963 —Present value of Obligation as at the year end 16,845,843 14,186,242

B) Changes in the Fair value of Plan Assets

As at As atMarch 31, 2009 March 31, 2008

Rupees RupeesFair value of Plan Assets at the beginning of the year — —Expected Return on Plan Assets — —Acturial (gains) / loss on Plan Assets — —Contributions 1,823,972 752,929Benefi ts Paid (1,823,972) (752,929)Fair value of Plan Assets at the year end — —

C) Reconciliation of Present Value of Defi ned Benefi t Obligation and the Fair value of Assets


Rupees RupeesPresent Value of funded obligation as at the year end — —Fair Value of Plan Assets as at the end of the year — —Funded Status — —Present Value of unfunded Obligation as at the year end 16,845,843 14,186,242Unrecognised Actuarial (gains) / losses — —Unfunded Net Asset / (Liability) recognised in Balance Sheet** (16,845,843) (14,186,242)** Included in Provisions (Refer Schedule 11)

D) Amount recognised in the Balance Sheet


Rupees RupeesPresent Value of Defi ned Benefi t Obligation at the end of the year 16,845,843 14,186,242Fair Value of Plan Assets as at the end of the year — —Liability / (Net Asset) recognised in the Balance Sheet*** 16,845,843 14,186,242*** Included in Provisions (Refer Schedule 11)


SCHEDULE 18


85


E) Expenses recognised in the Profi t and Loss Account

2008-09Rupees

2007-08Rupees

Current Service Cost 5,094,598 3,814,155Past Service Cost — —Interest Cost 1,134,899 806,720Expected Return on Plan Assets — —Curtailment Cost / (Credit) — —Settlement Cost / (Credit) — —Effects of transfer in 326,871 —Effects of transfer out (299,908) —Net actuarial (gain) / loss recognised in the year (1,772,887) 234,299Total Expenses recognised in the Profi t and Loss Account**** 4,483,573 4,855,174**** Included in Salaries, Wages and Allowances (Refer Schedule 16)

F) Expected employer’s contribution for the next year Rupees 5,420,826 (Previous Year : Rupees 5,000,000).

III) The liability for leave encashment and compensated absenses as at the year end is Rupees 11,132,510 (Previous Year : Rupees 8,831,373).

15. Segment Information In accordance with Accounting Standard – 17, “Segmental Reporting” issued by the Institute of Chartered Accountants of India, the

Company’s business segment is radio broadcasting business and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liability, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as refl ected in the Financial Statements as of and for the year ended March 31, 2009. The Company caters to the needs of the domestic market and hence there are no reportable geographical segments.

16. Related Party Disclosuresa. Parties where control exists Related Party

Bennett, Coleman & Company Limited (BCCL) – Ultimate Holding CompanyTimes Infotainment Media Limited (TIML) – Holding CompanyTimes Innovative Media Limited (TIM) – Subsidiary CompanyAlternate Brand Solutions Limited (ABSL) – Subsidiary Company

b. Fellow Subsidiary CompaniesVardhaman Publishers Limited (VPL)Times Internet Limited (TIL)Times Global Broadcasting Company Limited (TGBCL)Times Business Solutions Limited (TBSL)Zoom Entertainment Networks Limited (ZENL)Optimal Media Solutions Limited (OMSL)Vijayanand Printers Limited (VAPL)Mirchi Movies (India) Limited (MML)

c. Joint VentureWorldwide Media Private Limited (WWM)

d. Key Managerial PersonnelChairman Mr. Vineet JainManaging Director Mr. A. P. ParigiNon – Executive DirectorsMr. Ravindra DhariwalMr. N. KumarMr. Deepak M. Satwalekar Ms. Rama Bijapurkar (Upto 22.12.2008)Mr. Ravindra Kulkarni


SCHEDULE 18


86


SCHE

DULE

S AN

NEXE

D TO

AND

FOR

MIN

G PA

RT O

F TH

E BA

LANC

E SH

EET

AS A

T M

ARCH

31,

200

9 AN

D PR

OFIT

AND

LOS

S AC

COUN

T FO

R TH

E YE

AR

ENDE

D M

ARCH

31,

200

9SC

HED

ULE

18

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATEM

ENTS

(Con

td.)

e. T

rans

actio

n w

ith R

elat

ed P

artie

s

R

upee

s

Part

icul

ars

2008

-200

9 20

07-2

008

Par

ties w

here

con

trol e

xist

s Fe

llow

Sub

sidi

ary C

ompa

nies

J

oint

Ve

ntur

e P

artie

s whe

re c

ontro

l exis

ts

Fello

w S

ubsid

iary

Com

pani

es

Joi

nt

Vent

ure

BCC

L T

IML

TIM

A

BSL

MM

L T

IL

TGB

CL

TBS

L Z

ENL

OM

SL

VAP

L V

PL

WW

M

BCC

L T

IML

TIM

A

BSL

MM

L T

IL

TGB

CL

TBS

L Z

ENL

OM

SL

VAP

L V

PL

WW

M

Tran

sact

ions

with

Re

late

d Pa

rtie

s :

Airti

me

Sale

s56

,384,5

10

- -

4,14

3,761

-

17,45

2,529

-

1,16

2,865

2,

053,9

61

- 63

3,404

-

- 53

,419,5

25

- 63

,000

348,3

81

- 5,

991,9

38

- -

- -

- -

1,14

9,687

Even

t Exp

ense

s -

- -

65,20

4,031

-

- -

- -

- -

- -

- -

37,12

6,600

12

,028,0

81

- -

- -

- -

- -

-

Recr

uitm

ent E

xpen

ses

- -

- -

- -

- 15

2,648

-

- -

- -

- -

- -

- -

- -

- -

- -

-

Empl

oyee

s St

ock

Optio

n Ex

pens

e -

- -

- 21

,917

- -

- -

- -

- -

- 41

3,395

1,

338

- 81

,058

- -

- -

- -

- -

Offi c

e Re

nt27

,033,5

17

- 6,

853,0

46

- -

- -

- -

- -

123,7

50

- 21

,912,7

59

- -

- -

- -

- -

- -

115,8

30

-

Prin

t Adv

ertis

men

t Ex

pens

es2,7

81,85

1 -

- -

- -

- -

- 36

4,752

27

4,200

-

- 21

,407,0

35

- -

- -

- -

- -

6,20

2,232

-

- -

Outd

oor A

dver

tisem

ent

Expe

nses

- -

2,12

8,332

-

- -

- -

- -

- -

- -

- 4,

815,9

01

- -

- -

- -

- -

- -

Com

mis

sion

on

Priv

ate

Trea

ty S

ales

12,39

3,995

-

- -

- -

- -

- -

- -

- 13

,927,9

47

- -

- -

- -

- -

- -

- -

Inte

rnet

Adv

ertis

emen

t Ex

pens

es -

- -

- -

8,60

5,206

-

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

TV A

dver

tisem

ent

Expe

nses

- -

- -

- -

- -

- -

- -

- -

- -

- -

- 35

7,000

-

- -

- -

-

Trav

el C

ost

- -

- -

- 13

,015,9

17

- -

- -

- -

- -

- -

- -

5,76

7,854

-

- -

- -

- -

Inte

rest

Inco

me

- -

25,85

2,537

-

- -

- -

- -

- -

- -

- 87

,336,9

38

- -

- -

- -

- -

- -

Inte

rest

Exp

ense

59,55

4,237

-

- -

- -

- -

- -

- -

- 62

,671,2

33

- -

- -

- -

- -

- -

- -

Reco

very

of E

xpen

ses

2,63

6,206

5,62

9,117

14

,088,5

89

14,53

5,601

1,3

36,78

4 72

0,354

83

1,675

72

1,874

34

,473

- -

- -

948,3

80

698,3

52

38,37

2,932

6,

783,5

83

26,17

7 -

- -

- -

- -

-

Reim

burs

emen

t of

Expe

nses

7,64

4,059

-

2,77

3,188

-

160,0

85

9,45

8,406

-

- -

- -

- -

2,28

8,277

62

9,337

-

- -

1,96

8,394

-

- -

- -

- -

Man

agem

ent F

ees

- -

- -

- -

- -

- -

- -

- -

- -

18,00

0,000

-

- -

- -

- -

- -

Fixe

d As

set P

urch

ase

- SAP

- -

- -

- -

- -

- -

- -

- 5,

873,8

66

- -

- -

- -

- -

- -

- -

Loan

rep

aid

149,3

33,82

0 -

432,2

33,00

0 -

- -

- -

- -

- -

- -

- 1,6

25,47

0,731

-

- -

- -

- -

- -

-

Loan

Giv

en

- -

620,0

00,00

0 -

- -

- -

- -

- -

- -

- 1,1

64,00

0,000

-

- -

- -

- -

- -

-

Inve

stm

ent i

n Su

bsid

iary

- -

- -

- -

- -

- -

- -

- -

- 28

0,000

,000

- -

- -

- -

- -

- -

Bal

ance

s w

ith R

elat

ed

Part

ies

:

Outs

tand

ing

Loan

Pa

yabl

es60

0,666

,180

- -

- -

- -

- -

- -

- -

750,0

00,00

0 -

- -

- -

- -

- -

- -

-

Inve

stm

ent i

n Su

bsid

iary

- -

320,0

00,00

0 70

,250,0

00

- -

- -

- -

- -

- -

- 32

0,000

,000

70,25

0,000

-

- -

- -

- -

- -

Outs

tand

ing

Rece

ivab

les

56,15

5,269

-

- 4,

475,9

89

- 11

,617,8

22

- 1,

137,8

86

2,30

7,831

-

- -

- 74

,534,7

76

1,59

1,936

-

- -

5,64

1,940

-

1,41

2,392

-

- -

- 2,

413,4

31

Adva

nce

Rece

ivab

les

232,6

10,53

4 2,3

07,12

5 22

,330,9

81

24,80

0,759

53

3,502

-

914,6

02

581,7

79

38,73

4 -

- -

- 12

8,986

,022

427,6

21

18,03

9,580

16

,374,0

58

551,5

19

1,70

4,334

-

- -

- -

- -

Outs

tand

ing

Loan

Re

ceiv

able

s -

- 18

7,767

,000

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Depo

sit

10,00

0,000

-

- -

- -

- -

- -

- -

- 10

,000,0

00

- -

- -

- -

-

Outs

tand

ing

Paya

bles

- -

- -

- 13

,708,4

66

- -

- -

- 23

9,580

-

- -

- -

- -

26,93

8 -

- -

- -

1,71

1,048

Coun

ter G

uara

ntee

s gi

ven

- -

200,0

00,00

0 -

- -

- -

- -

- -

- -

- 20

0,000

,000

- -

- -

- -

- -

- -

87


f. Details relating to Persons referred to in 16 (d) above

Name of the Person 2008-2009 2007-2008Rupees Rupees

Mr. A. P. Parigi 20,940,660 21,393,302

17. Disclosure for Operating Leases

Disclosure in respect of cancelable agreements for residential premises and cars taken on lease:a) Lease payments recognised in the Profi t and Loss Account Rupees 137,328,503 (Previous Year : Rupees 114,407,389).b) All the agreements provide for early termination by either party by giving prior notice in writing.

18. Earnings Per Share (Basic and Diluted)

The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of shares outstanding during the year. The number of shares used in computing Diluted EPS comprises of weighted average shares considered for deriving Basic EPS and also the weighted average number of equity share which would be issued for no consideration on exercise of options under the Employee Stock Option Scheme, 2005. The number of shares is adjusted for reduction of share capital.

2008-2009 2007-2008Profi t computation for both Basic and Diluted Earnings Per Share of Rupees 10 eachNet Profi t as per the Profi t and Loss Account available for Equity shareholders (in Rupees) 29,123,107 161,933,114Weighted average number of Equity shares for Earnings per share computation For Basic Earnings Per Share 47,663,959 47,638,884Add: Weighted average outstanding employee stock options deemed to be issued for no

consideration — 11,586Number of shares for Diluted Earnings Per Share 47,663,959 47,650,470Earnings per Share (Rupees)Basic 0.61 3.40Diluted 0.61 3.40

19. Employee Stock Option Scheme (ESOS)

Pursuant to the resolution passed by the Board of directors and members of the Company at the meeting of Board of Directors and Extra Ordinary General Meeting of the Members of the Company respectively, held on November 5, 2005, the Company had introduced an Employee Stock Option Scheme (“the scheme”) for its existing and future permanent employees and directors and existing and future permanent employees and directors of its Subsidiary Company and Holding Company.

The scheme provides that the total number of options granted there under will be 109,360. Pursuant to a resolution passed by the Remuneration / Compensation Committee at its meeting held on November 5, 2005, all 109,360 options that are exercisable for Equity Shares have been granted at an exercise price of Rupees 90.

In accordance with the Guidance Note on “Accounting for Employee Share-based Payments” issued by the ‘The Institute of Chartered Accountants of India’ and Employee Stock Option and Stock Purchase Guidelines, 1999 issued by the Securities and Exchange Board of India, fair value of these options, on the grant date, is amortised over the vesting period.

Particulars 2008-2009 2007-2008Options outstanding at the beginning of the year 14,355 85,840Add:Options granted during the year — —

14,355 85,840Less:Options forfeited during the year — —Options exercised during the year 14,355 71,485Options expired during the year — —Options outstanding at the end of the year — 14,355Exercise price for options outstanding at the end of the year (Rupees) — 90Fair value of options amortised during the year (Rupees) 56,984 873,751


SCHEDULE 18


88


Fair value of the options granted during the previous year, based on the report received from an independent fi rm of Chartered Accountants, as per Black Scholes method of valuation, was as follows:

Vesting Date Number of Options Fair value of the optionNovember 15, 2006 34,975 95.25April 1, 2007 42,775 98.40July 1, 2007 17,255 100.36April 1, 2008 8,700 105.67July 1, 2008 5,655 107.30Weighted average 98.74

Further, amortisation of fair value of the options granted to the employees of Times Innovative Media Limited, the Subsidiary Company, Times Infotainment Media Limited, the Holding Company and Mirchi Movies (India) Limited, subsidiary of Holding Company aggregating Rupees Nil (Previous Year : Rupees 1,338), Rupees Nil (Previous Year : Rupees 413,395) and Rupees 21,917 (Previous Year : Rupees 81,058) respectively have been charged to the respective companies.

20. As required by the Clause 32 of the listing agreement, the following disclosure is made: (Rupees)

Balance as on March

31, 2009

Maximum amount outstanding during the

year ended March 31, 2009

Balance as on March

31, 2008

Maximum amount outstanding during the

year ended March 31, 2008

i. Loans and advances in the nature of loans to subsidiary. 187,767,000 570,000,000 - 461,470,731

ii. Loans and advances in the nature of loans to associates. - - - -

iii. Loans and advances in the nature of loans where there is no repayment schedule, or interest below rate specifi ed as per Section 372A of the Companies Act, 1956. - - - -

iv. Loans and advances in the nature of loans to fi rms/companies in which directors are interested. - - - -

v. Investments by the Loanee in the shares of the Company as on 31st March, 2009. - - - -

21. Investment in subsidiary

In the previous year, the Company had made investments in its wholly owned subsidiary, Alternate Brand Solutions Limited (ABSL), which was incorporated on October 31, 2007 and additional investment aggregating Rupees 280,000,000 in its subsidiary company, Times Innovative Media Limited (TIM).

22. Information pursuant to other provisions of Part II of Schedule VI to The Act, is either nil or not applicable to the Company for the year.

23. Previous year’s fi gures have been regrouped where necessary.

24. Refer Annexure for additional information pursuant to Part IV of Schedule VI to the Act.

Signatures to Schedules “1” to “18” forming part of the fi nancial statements.


SCHEDULE 18





Vineet JainChairman





89


ANNEXURE(Refer Schedule 18 - Note 24)

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI Registration Details

Registration No. 1 1 - 1 2 0 5 1 6

Balance Sheet Date 3 1 0 3 2 0 0 9 State Code 1 1Date Month Year

II Capital Raised During the Year (Amount in Rs. Thousands)Public Issue Rights Issue

N I L N I LBonus Issue Private Placement

N I L N I L

III Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)Total Liabilities Total Assets

4 5 2 8 2 6 7 4 5 2 8 2 6 7

Sources of FundsPaid up Capital Reserves and Surplus

4 7 6 7 0 4 2 6 5 9 5 3 9Secured Loans Unsecured Loans2 0 0 0 0 0 9 0 0 6 6 6

Application of FundsNet Fixed Assets Investments

2 5 0 9 2 9 6 3 9 0 2 5 0Net Current Assets Miscellaneous Expenditure

1 2 6 3 2 5 6 N I LAccumulated Losses Deferred Tax Assets

N I L 7 4 1 0 7

IV Performance of Company (Amount in Rs. Thousands)Turnover Total Expenditure

2 3 0 1 7 3 8 2 2 8 2 1 3 6+ - Profi t / Loss Before Tax + - Profi t / Loss After Tax

1 9 6 0 2 2 9 1 2 3(Please tick appropriate + for Positive, - for Negative)

+ - Earning Per Share in Rs. Dividend Rate %0 . 6 1 N I L

V Generic Names of Three Principal Products / Services of Company(As per monetary terms)Item Code No. (ITC Code) N O T A P P L I C A B L E

Product Description N O T A P P L I C A B L E

The Company is a service provider and does not deal in any products


Vineet JainChairman





90


STAT

EMEN

T PU

RSUA

NT T

O SE

CTIO

N 21

2 OF

THE

COM

PANI

ES A

CT, 1

956

Subs

idia

ryTi

mes

Inno

vativ

e M

edia

Li

mite

d (T

IM)

Alte

rnat

e B

rand

So

lutio

ns L

imite

d (A

BSL

)Fi

nanc

ial Y

ear e

nded

Mar

ch 3

1, 2

009

Mar

ch 3

1, 2

009

Hold

ing

Com

pany

’s in

tere

st83

.44%

100%

Num

ber o

f Sha

res

held

by

the

Hold

ing

Com

pany

32,

000,

000

1,6

00,0

00

Net

agg

rega

te p

rofi t

s / (

loss

es) o

f the

sub

sidi

ary

for

the

curr

ent y

ear

so fa

r as

it c

once

rns

the

mem

bers

of t

he h

oldi

ng

com

pany a.

deal

t with

or p

rovi

ded

for i

n th

e ac

coun

ts o

f the

hol

ding

com

pany

(Rs.

) -

- b.

no

t dea

lt w

ith o

r pro

vide

d fo

r in

the

acco

unts

of t

he h

oldi

ng c

ompa

ny (R

s.)

(634

,360

,914

) 5

04,4

15

Net

agg

rega

te p

rofi t

s / (

loss

es) f

or p

revi

ous

fi nan

cial

yea

rs o

f the

sub

sidi

ary

so fa

r as

it c

once

rns

the

mem

bers

of t

he

hold

ing

com

pany

a.

deal

t with

or p

rovi

ded

for i

n th

e ac

coun

ts o

f the

hol

ding

com

pany

(Rs.

) -

- b.

no

t dea

lt w

ith o

r pro

vide

d fo

r in

the

acco

unts

of t

he h

oldi

ng c

ompa

ny (R

s.)

289

,100

,947

2

,917

,892

(Am

ount

in R

upee

s)Su

bsid

iary

Issu

ed a

nd

subs

crib

ed

shar

e ca

pita

l

Rese

rves

Tota

l Ass

ets

Tota

l Li

abili

tes

Inve

stm

ents

Turn

over

Profi

t /

(Los

s) b

efor

e ta

xatio

n

Prov

isio

n fo

r ta

xatio

nPr

ofi t

/ (Lo

ss)

afte

r tax

atio

nPr

opos

ed

Div

iden

d

Tim

es

Inno

vativ

e M

edia

Lim

ited

(TIM

) 3

83,4

92,0

80

1,9

23,6

50,7

61

3,4

09,4

63,4

66

3,40

9,46

3,46

6 -

1,4

94,1

50,6

60

(632

,024

,594

) (2

,336

,320

) (6

34,3

60,9

14)

- Al

tern

ate

Bran

d So

lutio

ns

Lim

ited

(ABS

L) 1

6,00

0,00

0 5

7,52

6,31

7 3

05,5

34,0

97

305

,534

,097

-

570

,324

,885

4

,686

,789

(4

,182

,374

) 5

04,4

15

-

For a

nd o

n be

half

of th

e Bo

ard

of D

irect

ors

Vine

et J

ain

Chai

rman

A. P

. Par

igi

Man

agin

g Di

rect

or

N. S

ubra

man

ian

Grou

p CF

OM

ehul

Sha

hAs

st. V

ice

Pres

iden

t – C

ompl

ianc

e &

Co

mpa

ny S

ecre

tary

Mum

bai

Date

d : M

ay 1

9, 2

009

91

ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)

AUDITORS’ REPORTTo the Board of Directors of Entertainment Network (India) Limited on the Consolidated Financial Statements of Entertainment Network (India) Limited and its Subsidiary Companies

1. We have audited the attached Consolidated Balance Sheet of Entertainment Network (India) Limited (‘the Company’) and its subsidiaries (together referred to as the Group), as at March 31, 2009, and also the Consolidated Profi t and Loss Account and Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These consolidated fi nancial statements are the responsibility of the Company’s management and have been prepared by the management on the basis of separate fi nancial statements and other fi nancial information regarding components. Our responsibility is to express an opinion on these consolidated fi nancial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are prepared, in all material respects, in accordance with an identifi ed fi nancial reporting framework and are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We report that the consolidated fi nancial statements have been prepared by the Entertainment Network (India) Limited’s management in accordance with the requirements of Accounting Standard 21, Consolidated Financial Statements issued by the Institute of Chartered Accountants of India.

4. Based on our audit and on consideration of the audit reports on separate fi nancial statement of Entertainment Network (India) Limited and its subsidiaries, in our opinion and to the best our information and according to the explanation given to us, the attached consolidated fi nancial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of Entertainment Network (India) Limited Group as at March 31, 2009;

(b) in the case of the Consolidated Profi t and Loss Account, of the loss of Entertainment Network (India) Limited Group for the year ended on that date; and

(c) in the case of the Consolidated Cash Flow Statement, of the consolidated cash fl ow of Entertainment Network (India) Limited Group for the year ended on that date.



92


BALANCE SHEET AS AT MARCH 31, 2009

Schedule

Rupees


Rupees


Rupees

SOURCES OF FUNDS

Shareholders' Funds

Capital 1 476,704,150 476,560,600

Reserves and Surplus 2 3,490,235,923 3,930,378,691

Minority Interest 198,713,438 324,727,072

Loan Funds

Secured Loans 3 580,136,629 1,152,500,000

Unsecured Loans 4 900,666,180 780,000,000

TOTAL 5,646,456,320 6,664,166,363

APPLICATION OF FUNDS

Fixed Assets 5

Gross Block 4,391,552,372 3,902,957,027

Less : Depreciation 1,345,790,526 830,660,793

Net Block 3,045,761,846 3,072,296,234

Capital work-in-progress / Advances 136,516,579 109,870,772

3,182,278,425 3,182,167,006

Investments 6 — 30,000,000

Deferred Tax Asset 7 92,317,693 61,104,098

Current Assets, Loans and Advances

Sundry Debtors 8 1,345,965,315 1,335,204,734

Cash and Bank Balances 9 162,144,971 146,983,714

Loans and Advances 10 1,695,476,095 2,818,899,751

3,203,586,381 4,301,088,199

Less : Current Liabilities and Provisions 11

Current Liabilities 957,100,669 878,857,063

Provisions 36,717,669 31,335,877

993,818,338 910,192,940

Net Current Assets 2,209,768,043 3,390,895,259

Profi t and Loss Account Debit Balance 162,092,159 —

TOTAL 5,646,456,320 6,664,166,363

Notes to the Consolidated Financial Statements 18

The Schedules referred to herein form an integral part of the Balance Sheet

This is the Balance Sheet referred to in our report of even date.




Vineet JainChairman





93


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009

Schedule 2008-2009

Rupees 2007-2008

Rupees

Income

Sales 12 4,262,353,207 4,134,740,657

Other Income 13 30,468,779 33,693,981

4,292,821,986 4,168,434,638

Expenditure

Production Expenses 14 648,099,672 636,581,731

Licence Fees 15 1,689,327,140 1,364,982,373

Employee Costs 16 772,160,731 666,895,620

Administration and Other Expenses 17 1,244,561,488 1,145,114,631

Interest (Net) (Refer Notes 1(xi) and 5 on Schedule 18) 144,403,030 173,979,328

Depreciation 525,570,531 362,813,874

5,024,122,592 4,350,367,557

Loss Before Taxation (731,300,606) (181,932,919)

Provision for Taxation (Refer Note 1(xii) on Schedule 18)

– Current Tax 500,000 17,300,000

– Minimum Alternate Tax Credit Entitlement — (16,100,000)

– Deferred Tax (31,213,595) (34,425,788)

– Fringe Benefi t Tax 28,175,000 27,600,000

Loss After Taxation and Before Minority Interest (728,762,011) (176,307,131)

Minority Interest (125,899,050) (5,415,625)

Net Loss (602,862,961) (170,891,506)

Profi t and Loss Account Balance Brought Forward 440,770,802 559,713,072

Add : Loss transferred to Minority Interest — 51,949,236

Profi t and Loss balance carried forward to the Balance Sheet (162,092,159) 440,770,802

Earnings Per Share (Refer Note 11 on Schedule 18)

– Basic (12.65) (3.59)

– Diluted (12.65) (3.59)

Notes to the Consolidated Financial Statements 18

The Schedules referred to herein form an integral part of the Profi t and Loss Account

This is the Profi t and Loss Account referred to in our report of even date.




Vineet JainChairman





94


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2009

2008-2009 Rupees

2007-2008 Rupees

A) CASH FLOW FROM OPERATING ACTIVITIES : Loss Before Taxation (731,300,606) (181,932,919) Adjustments for : Depreciation and Amortisation 525,570,531 362,813,874 Loss on fi xed assets sold / written off 526,730 — Interest Expense 144,403,030 173,979,328 Provision for Employee Stock Option Scheme expenses 35,067 379,299 Profi t on sale of Investments (15,942,841) (28,979,967) Provision for doubtful advances 1,500,000 — Provision for bad and doubtful debts 127,232,350 51,300,972 Provision for doubtful debts written back (38,587,323) (15,354,222) Provision for Retirement Benefi ts 6,694,991 9,980,613 Operating Profi t before working capital changes 20,131,929 372,186,978 Adjustments for changes in working capital : Increase in Sundry Debtors (99,405,608) (643,432,569) Decrease / (Increase) in other receivables 1,210,272,227 (2,005,754,172) Increase in Trade and other payables 89,878,931 313,739,473 Cash generated from / (used in) operations 1,220,877,479 (1,963,260,290) Taxes paid (net) (117,832,348) (119,194,046) Net Cash from / (used in) Operating Activities (A) 1,103,045,131 (2,082,454,336)B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Fixed Assets (527,592,721) (519,906,568) Sale of Fixed assets 1,384,041 — Purchase of Investments (1,970,500,000) (3,467,891,798) Sale of Investments 2,016,442,841 3,492,100,614 Net Cash used in Investing Activities (B) (480,265,839) (495,697,752)C) CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Long Term Borrowings : – Payments (149,333,820) — Proceeds from Borrowings : – Receipts 4,428,775,297 794,488,233 – Payments (4,731,275,297) — Interest Paid (144,748,906) (173,979,328)

Proceeds from Issue of Shares [(Net of share issue expenses and preliminary expense Rupees 691,934 (Previous Year : Rupees 14,397,827)] (691,934) 1,985,602,693

Proceeds from Exercise of Employee Stock Options 1,291,950 5,677,650 Net Cash Flow (used in) / from Financing Activities (C) (595,982,710) 2,611,789,248 Net Increase in Cash and Cash Equivalents (A+B+C) 26,796,582 33,637,160 Cash and Cash Equivalents as at the beginning of the year 101,606,755 67,969,595 Cash and Cash Equivalents as at the end of the year 128,403,337 101,606,755 26,796,582 33,637,160 NOTES ON CASH FLOW STATEMENT :1. Cash and cash equivalents at the end of the year as per Balance Sheet 162,144,971 146,983,714 Less: Book overdraft as per Schedule 11 (33,741,634) (45,376,959)

128,403,337 101,606,755

2. The above statement has been prepared following the "Indirect Method" as set out in Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India except in case of interest paid which has been considered on the basis of actual movement of cash with necessary adjustments in corresponding assets and liabilities.

3. Previous Year’s fi gures have been regrouped and rearranged wherever necessary.4. Cash and Cash Equivalents includes Rupees 106,255,581 (Previous Year : Rupees 95,632,873) which are not available for use by the Company (Refer Schedule 9 in

the Financial Statements).

This is the Cash Flow Statement referred to in our report of even date.




Vineet JainChairman





95




Rupees


Rupees

SCHEDULE 1: CAPITAL

Authorised Capital

120,000,000 (Previous Year : 120,000,000) Equity Shares of Rupees 10 each 1,200,000,000 1,200,000,000

Issued and Subscribed

47,670,415 (Previous Year : 47,656,060) Equity Shares of Rupees 10 each fully paid-up 476,704,150 476,560,600

476,704,150 476,560,600

Notes:

1. Of the above, 30,526,560 Equity Shares of Rupees 10 each are held by Times Infotainment Media Limited, the Holding Company and its nominees.

2. Of the above, 3,391,840 Equity Shares of Rupees 10 each are held by Bennett, Coleman & Company Limited, the Ultimate Holding Company.

3. During the year, the Company has issued 5,655 and 8,700 Equity Shares of face value of Rupees 10 each at a premium of Rupees 187.30 and Rupees 185.67 per share respectively pursuant to the exercise of Employee Stock Options granted to the employees. (Refer Note 12 on Schedule 18)

4. For Employee Stock Option Scheme, 2005 (Refer Note 12 on Schedule 18).

SCHEDULE 2: RESERVES AND SURPLUS

Capital Reserve 2,086,092 2,086,092

Securities Premium Account

As per last Balance Sheet 3,486,052,671 1,869,799,472

Add: Premium on shares issued — 1,617,908,587

3,486,052,671 3,487,708,059

Add: Receipts on exercise of employee stock options 2,674,510 12,742,439

3,488,727,181 3,500,450,498

Less: Preliminary Expenses — 75,740

Less: Share Issue Expenses 577,350 14,322,087

3,488,149,831 3,486,052,671

Profi t and Loss Account — 440,770,802

Employees Stock Options Outstanding

(Refer Note 12 on Schedule 18)

As per last Balance Sheet 1,469,126 7,619,014

Add: Fair Value of Options amortised during the year 56,984 873,751

1,526,110 8,492,765

Less: Fair Value of Options exercised during the year (1,526,110) (7,023,639)

— 1,469,126

3,490,235,923 3,930,378,691

96




Rupees


Rupees

SCHEDULE 3: SECURED LOANS

Working Capital Loan from Standard Chartered Bank (Refer Note 1 below) — 702,500,000

Term Loan from HSBC Limited (Refer Note 2 below) — 450,000,000 [Repayable within one year Rupees Nil (Previous Year : Rupees 450,000,000)]

Working Capital Demand Loan from Kotak Mahindra Bank Limited (Refer Note 3 below) 200,000,000 — [Repayable within one year Rupees 200,000,000 (Previous Year : Rupees Nil)]

Working Capital Loan from HSBC Limited (Refer Note 4 below) 380,000,000 — [Repayable within one year Rupees 380,000,000 (Previous Year : Rupees Nil)]

Interest Accrued and due on Loan 136,629 —

Notes:

1. A pari passu charge by way of hypothecation on book debts and tangible fi xed assets (moveable) of the Company, both present and future in favour of the Bank.

2. A pari passu charge by way of hypothecation over all the current stocks, receivables and plant and machinery both present and future in favour of the Bank.

3. A fi rst pari passu charge on current assets and moveable fi xed assets in favour of the Bank.

4. Secured against creation of charge on fi rst and exclusive charge over present and future plant and machinery, stock of raw material, stock-in-process, stores, semi-fi nished and fi nished goods and tools, book-debts, outstanding, monies receivable, claims due to, contract, engagements, securities, bills which are not due and owing or which may at any time hereafter during the continuance of this security become due or owing on loan taken from HSBC Bank Limited.

580,136,629 1,152,500,000

SCHEDULE 4: UNSECURED LOANS

From Bennett, Coleman & Company Limited 600,666,180 750,000,000

Other Loans and Advances :

From Bank 300,000,000 30,000,000 [Repayable within one year Rupees 300,000,000 (Previous Year : Rupees 30,000,000)]

900,666,180 780,000,000

97



SCHEDULE 5

FIXED ASSETS (Refer Note 1(v), (vi), (vii), (xi) and (xiii) on Schedule 18) (Rupees)

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS As at April 1, 2008

Additions during

the year

Deletions/Adjustments

during the year

As at March 31,

2009

As at April 1, 2008

For the year Deletions/Adjustments

during the year

As at March 31,

2009

As at March 31,

2009

As at March 31,

2008

Tangible Asset

Land - Leasehold 2,036,147 — — 2,036,147 — — — — 2,036,147 2,036,147

Building 7,578,551 — — 7,578,551 2,079,301 274,962 — 2,354,263 5,224,288 5,499,250

Leasehold Improvements 279,805,818 9,032,731 502,003 288,336,546 58,365,610 40,573,324 502,003 98,436,931 189,899,615 221,440,208

Plant and Machinery 262,875,728 426,944,866 425,596 689,394,998 44,068,180 116,581,014 17,554 160,631,640 528,763,358 218,807,548

Offi ce Equipment 977,834,400 40,752,978 1,747,184 1,016,840,194 233,868,593 103,829,584 1,245,617 336,452,560 680,387,634 743,965,807

Computers 153,406,083 16,625,002 3,254,152 166,776,933 74,663,572 35,913,600 3,254,152 107,323,020 59,453,913 78,742,511

Furniture and Fixtures 31,561,652 1,960,667 777,995 32,744,324 21,385,883 3,149,374 777,995 23,757,262 8,987,062 10,175,769

Motor Vehicles 14,491,579 — 5,644,639 8,846,940 9,363,591 1,164,542 4,643,477 5,884,656 2,962,284 5,127,988

Intangible Asset

(Refer Note 1(v) on Schedule 18)

Computer Software (SAP) 11,276,702 5,630,670 — 16,907,372 458,713 7,875,095 — 8,333,808 8,573,564 10,817,989

Migration Fees 815,234,695 — — 815,234,695 244,570,410 81,523,470 — 326,093,880 489,140,815 570,664,285

One Time Entry Fees (Refer Notes 1 and 2 below)

1,346,855,672 — — 1,346,855,672 141,836,940 134,685,566 — 276,522,506 1,070,333,166 1,205,018,732

GRAND TOTAL 3,902,957,027 500,946,914 12,351,569 4,391,552,372 830,660,793 525,570,531 10,440,798 1,345,790,526 3,045,761,846 3,072,296,234

Previous Year 2,881,015,949 1,022,304,084 363,006 3,902,957,027 468,122,956 362,813,874 276,037 830,660,793

Capital Work-in-Progress [Including Capital Advance of Rupees 105,719,071 (Previous Year : Rupees 73,816,102)] 136,516,579 109,870,772

3,182,278,425 3,182,167,006

Notes: 1) Includes borrowing cost Rupees Nil (Previous Year : Rupees 5,987,944) 2) One Time Entry Fees is amortised from the date of operationalisation of the respective station.


Rupees


Rupees

SCHEDULE 6: INVESTMENTS (Refer Note 1(ix) on Schedule 18)

Non-Trade, Current (Unquoted – mutual funds)

Nil (Previous Year : 25,829) Units of DSP Merrill Lynch Mutual Fund Liquidity Fund — Institutional – Growth — 30,000,000

— 30,000,000

Note: Aggregate amount of unquoted investment in Mutual Fund Units Rupees Nil (Previous Year : Rupees 30,000,000).

98




Rupees


Rupees

SCHEDULE 7: DEFERRED TAX(Refer Notes 1(xii) on Schedule 18)Deferred tax assets and liabilities are attributable to the following items:Assets:Provision for Doubtful Debts 18,082,459 18,161,725 Provision for Doubtful Advances 2,124,375 2,124,375 Provision for Leave Encashment 4,783,418 3,848,918 Provision for Gratuity 7,256,541 5,915,421 Expenses Allowable u/s 43B 1,357,005 774,824 Amortisation of Preliminary Expenses 10,796,289 21,571,166 Unabsorbed Depreciation / Business Losses 255,926,815 188,165,686

300,326,902 240,562,115 Liability: Depreciation 208,009,209 179,458,017

208,009,209 179,458,017 92,317,693 61,104,098

SCHEDULE 8: SUNDRY DEBTORS(Unsecured)Debts Outstanding for a Period Exceeding Six MonthsConsidered Good 198,413,867 59,465,298 Considered Doubtful 147,930,134 53,432,553

346,344,001 112,897,851 Other DebtsConsidered Good 1,147,551,448 1,275,739,436 Considered Doubtful 6,169,087 12,021,641 1,153,720,535 1,287,761,077

1,500,064,536 1,400,658,928 Less: Provision For Doubtful Debts 154,099,221 65,454,194

1,345,965,315 1,335,204,734

SCHEDULE 9: CASH AND BANK BALANCESCheques in hand — 21,423,003 Balance with Scheduled Bank on:Current Accounts 55,889,390 29,927,838 Short-term Deposit Accounts (Refer Notes below) 106,255,581 95,632,873

162,144,971 146,983,714

Notes: 1. Deposit aggregating Rupees 74,525,375 (Previous Year : Rupees 75,702,073), Rupees Nil (Previous Year : Rupees 20,000) are lying under

lien with Banks and Sales Tax Department, Rajasthan respectively.2. Deposit aggregating Rupees 5,512,406 (Previous Year : Rupees 4,785,000) are lying under lien with The Commissioner, Greater Hyderabad

Corporation.3. Deposit aggregating Rupees 14,839,200 (Previous Year : Rupees 14,839,200) is lying under lien with Delhi Integrated Multi Modal Transit

Systems Limited.4. Deposit aggregating Rupees 286,600 (Previous Year : Rupees 286,600) is lying under lien with Defence Estate Offi cers, Pune Circle.5. Deposit aggregating Rupees 1,092,000 (Previous Year : Rupees Nil) is lying under lien with Commission, Municipal Corporation,

Chandigarh.6. Deposit aggregating Rupees 10,000,000 (Previous Year : Rupees Nil) is lying under lien with Bank.

99




Rupees


Rupees

SCHEDULE 10: LOANS AND ADVANCES(Unsecured and Considered Good)Advances Recoverable in Cash or in Kind or for Value to be ReceivedConsidered Good (Refer Notes below) 688,784,590 1,869,617,752 Considered Doubtful 1,500,000 —

690,284,590 1,869,617,752 DepositsConsidered Good 749,166,404 750,426,448 Considered Doubtful 6,250,000 6,250,000

755,416,404 756,676,448 Less: Provision for Doubtful Loans & Advances 7,750,000 6,250,000

747,666,404 750,426,448 Advance to TIML Employees' Stock Option Trust — 29,174,600Advance payment of tax [Net of Provision for Taxation Rupees 85,289,961 (Previous Year : Rupees 84,715,000)] 210,925,101 123,080,951Minimum Alternate Tax Credit Entitlement 46,600,000 46,600,000

1,695,476,095 2,818,899,751Notes : Due from Bennett, Coleman & Company Limited, the Ultimate Holding Company 232,610,534 128,986,022 Maximum balance outstanding 335,995,922 161,134,038 Due from Times Infotainment Media Limited, the Holding Company 2,307,125 58,782,552 Maximum balance outstanding 2,999,518 60,523,310

SCHEDULE 11: CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES

Sundry Creditorsa) Micro and Small Enterprises 402,647 — b) Others 738,521,812 655,013,652 Book Overdraft 33,741,634 45,376,959 Other Liabilities 184,404,576 176,123,878 Interest accrued but not due on loan — 2,308,074 Deposits 30,000 34,500

957,100,669 878,857,063

PROVISIONS

Gratuity (Refer Notes 1(x) and 7 on Schedule 18) 21,349,067 17,403,415Leave Encashment (Refer Notes 1(x) and 7 on Schedule 18) 14,073,015 11,323,676Fringe Benefi ts Tax [Net of payments of Rupees 79,039,417 (Previous Year : Rupees 38,691,196)] 1,295,587 2,608,786

36,717,669 31,335,877

100



2008-2009Rupees

2007-2008Rupees

SCHEDULE 12: SALES (Refer Note 1(iv) on Schedule 18)

Airtime Sales 2,278,655,216 2,251,752,193

Event Income 501,559,499 550,892,971

Out of Home Media Income 1,482,138,492 1,332,095,493

4,262,353,207 4,134,740,657

SCHEDULE 13: OTHER INCOME

Profi t on Sale of Investments 15,942,841 28,979,967

Bad Debts Recovered — 250,000

Marketing and Sales Commission 6,553,665 2,980,253

Other Provisions written back 3,095,402 —

Miscellaneous Income 4,876,871 1,483,761

30,468,779 33,693,981

SCHEDULE 14: PRODUCTION EXPENSES

Royalty 177,747,650 125,333,794

Other Production Expenses 33,676,694 123,460,620

Event Expenses 349,163,429 328,526,171

Out of Home Media Expenses 87,511,899 59,261,146

648,099,672 636,581,731

SCHEDULE 15: LICENCE FEES

Licence Fees (Refer Note 1(xv) on Schedule 18) 1,689,327,140 1,364,982,373

1,689,327,140 1,364,982,373

SCHEDULE 16: EMPLOYEE COSTS

Salaries, Wages and Allowances 684,570,010 594,970,827

Contributions to Provident and Other Funds (Refer Note 1(x) on Schedule 18) 36,132,565 27,419,127

Welfare Expenses 51,423,089 44,126,367

Employees Stock Options Expense (Refer Note 12 on Schedule 18) 35,067 379,299

772,160,731 666,895,620

101



2008-2009Rupees

2007-2008Rupees

SCHEDULE 17: ADMINISTRATION AND OTHER EXPENSES

Rent (Net) 187,800,067 133,418,584

Rates and Taxes 6,070,342 10,327,356

Electricity 132,255,224 102,912,923

Marketing 221,772,209 426,953,366

Travelling and Conveyance 211,980,274 134,874,492

Insurance 3,981,304 4,776,778

Communication 26,942,995 22,448,071

Repairs and Maintenance on:

– Buildings 1,150,755 318,750

– Plant and Machinery 14,963,965 12,721,414

– Others 27,255,294 20,610,037

Bank Charges 6,774,282 9,069,678

Training 7,361,820 12,182,469

Legal and Professional Fees 129,076,032 84,292,409

Recruitment 18,640,121 26,951,174

Software Expenses (Refer Note 1(vi) on Schedule 18) 26,842,067 16,095,810

Business Promotion 3,474,957 4,510,136

Security 16,245,829 12,951,316

Auditors' Remuneration 3,649,292 3,938,148

Provision for Doubtful Debts 127,232,350 51,662,832

Less: Provision for Doubtful Debts Withdrawn (38,587,323) (15,354,222)

Bad Debts Written Off 54,770,566 18,175,867

Provision for Doubtful Advances 1,500,000 —

Doubtful Advances Written Off — 414,650

Miscellaneous Expenses 53,409,066 50,862,593

1,244,561,488 1,145,114,631

102



SCHEDULE 18

NOTES TO THE FINANCIAL STATEMENTS

1. Signifi cant Accounting Policies

i. Basis of Accounting

The Consolidated Financial Statements of Entertainment Network (India) Limited (“the Company”) and its subsidiary companies, Times Innovative Media Limited and Alternate Brand Solutions Limited (collectively referred to as ‘the Group’) are prepared under the historical cost convention and comply in all material aspects with all the applicable accounting principles in India and the Accounting Standard 21 on Consolidation of Financial Statements, issued by the Institute of Chartered Accountants of India to the extent possible in the same format as that adopted by the Company for its separate fi nancial statements.

ii. Use of Estimates

The preparation of fi nancial statements in accordance with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of fi nancial statements and the reported amount of expenses of the year. Actual results could differ from these estimates. Any revision to such accounting estimates is recognised in the accounting period in which such revision takes place.

iii. Principles of Consolidation

1. The consolidated fi nancial statements have been prepared on the following basis:

– The fi nancial statements of the Company and its Subsidiary Companies have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses.

– Intra-group balances and intra-group transactions and resulting profi ts are eliminated in full.

– The consolidated fi nancial statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Company’s separate fi nancial statements.

2. The subsidiaries considered in the consolidated fi nancial statements are:

Name of the Company Country of Incorporation % voting power as at March 31, 2009

Alternate Brand Solutions Limited (ABSL) India 100

Times Innovative Media Limited (TIM) India 83.44

iv. Revenue Recognition

Revenue from radio broadcasting is recognised on an accrual basis on the airing of client’s commercials net of service tax. Revenue from events involving short periods are recognised according to the completed performance method. Revenue from

services provided over a longer term is recognised when the result of the transactions can be determined with reliability and on the percentage completed basis. Down payments invoiced before these dates are recorded under prepaid income / customer advances.

Revenue from Management of Outdoors is recognised on the display of advertisements net of service tax.

v. Fixed assets and Depreciation

a. Tangible assets

Tangible fi xed assets are stated at cost less accumulated depreciation.

Depreciation on tangible fi xed assets (except for Plant and Machinery) is provided on written down value method at the rates and in the manner specifi ed in Schedule XIV to the Act. The cost of leasehold improvements is amortised over the primary period of lease of the property. Leasehold land is not amortised. Tangible assets individually costing less than Rupees 5,000 are depreciated @ 100% in the year of purchase.

Plant and machinery is depreciated over the useful life of the asset, being the period of the contract, on uniform basis.

b. Intangible assets

Migration fees paid by the Company for existing licenses upon migration to Phase II of the Licensing policy and One Time Entry Fees paid by the Company for acquiring new licenses, has been capitalised as an asset.

103


The migration fee capitalised is being amortised, with effect from April 1, 2005, equally over a period of ten years, being the period of the license. One time entry fee will be amortised over a period of ten years, being the period of license, from the date of operationalisation of the station.

Expenditure on acquired Computer Software (SAP) are recognised as ‘Intangible Asset’ and amortised over a period of twenty fi ve months.

vi. Software

Software obtained initially together with hardware is capitalised along with the cost of hardware and depreciated in the same manner as the hardware. All subsequent purchases of software are treated as revenue expenditure and charged in the year of purchase.

vii. Preoperative Expenditure

Expenditure incurred by the Company from the date of acquisition of license for a new station upto the date of operationalisation of the station not directly attributable to fi xed assets are charged to the Profi t and Loss account in the year in which such expenditure is incurred.

viii. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Gains and losses arising out of subsequent fl uctuations are accounted for on actual payment or realisation. Monetary items denominated in foreign currency as at the Balance Sheet date are converted at the exchange rates prevailing on that day. Exchange differences are recognised in the Profi t and Loss Account.

ix. Investments

Long term investments are stated at cost. Provision is made for permanent diminution in value, if any. Current investments are stated at lower of cost and market value / repurchase price.

x. Retirement Benefi ts

a) Short Term Employee Benefi ts: The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in

respect of leave encashment which is expected to be encashed / utilised within twelve months after the balance sheet date is considered to be of short term nature. The same is provided, based on an actuarial valuation carried out by an independent actuary as at the year end.

b) Long Term Employee Benefi ts:

Defi ned Contribution Plans: The Company has Defi ned Contribution plans for post employment benefi ts namely Provident Fund. Under the Provident Fund

Plan, the Company contributes to a Government administered Provident Fund on behalf of its employees and has no further obligation beyond making its contribution.

The Company contributes to State plan namely Employee’s Pension Scheme, 1995 and has no further obligation beyond making its contribution.

The Company’s contributions to the above funds are charged to revenue every year.

Defi ned Benefi t Plans: The Company has a Defi ned Benefi t plan namely Gratuity and Leave Encashment for all its employees. Long term Leave

Encashment includes provision for leave which is expected to be encashed / utilised after twelve months from the Balance Sheet date.

Liability for Defi ned Benefi t Plan is provided on the basis of valuations, as at the Balance Sheet Date, carried out by an independent actuary. The actuarial valuation method used by independent actuary for measuring the liability is the Projected Unit Credit Method.

c) Termination benefi ts are recognised as an expense as and when incurred.

d) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Profi t and Loss Account as income or expense.


SCHEDULE 18


104


xi. Borrowing Cost

Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalised as part of cost of the asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

xii. Taxation

Provision for Income Tax has been made at the current tax rates based on assessable income or on the basis of Section 115JB of the Income Tax Act, 1961.

Provision for Fringe Benefi t Tax has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffi cient future taxable income will be available against which such deferred tax assets can be realised.

xiii. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profi t and Loss Account.

xiv. Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outfl ow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to its present date value and are determined based on best estimates of the amount required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refl ect the current best estimates.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfl ow of resources. Where there is a possible obligation or a present obligation that the likelihood of outfl ow of resources is remote, no provision or disclosure is made.

xv. License Fees

As per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 license fees are charged to revenue at the rate of 4% of gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city, whichever is higher. Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of any taxes and without deduction of any discount given to the advertiser and any commission paid to advertising agencies. Barter advertising contracts shall also be included in the gross revenue on the basis of relevant billing rates. ROTEF means 25% of highest valid bid in the city.

xvi. Preliminary Expenditure

Preliminary expenses are charged to the Profi t and Loss Account in the year of incurrence.

2. Contingent Liabilities

a) Guarantees issued by banks on behalf of the Group Rupees 170,301,931 (Previous Year : Rupees 223,594,931). b) Counter Guarantee issued by the Group to HDFC Bank Rupees 200,000,000 (Previous Year : Rupees 200,000,000).

3. Capital Commitments :

Estimated amount of contracts remaining to be executed on capital account Rupees 149,940,939 (Previous Year : Rupees 142,733,669) net of advances of Rupees 105,719,071 (Previous Year : Rupees 73,816,102).


SCHEDULE 18


105


4. Managerial Remuneration

2008-2009Rupees

2007-2008Rupees

Salaries and Bonus 29,350,912 23,044,061Contribution to Provident and Other Funds* 872,640 562,356Perquisites 6,130,009 5,392,775Total 36,353,561 28,999,192

* Provision for / contributions to employee retirement / post retirements, which are based on actuarial valuations done on an overall company basis, are excluded above.

Approval for the appointment and payment of the above remuneration to Mr. A.P. Parigi, Managing Director and Mr. Sunder Hemrajani, Managing Director has been received from the Central Government of India, Ministry of Corporate affairs vide their letter No. 12/928/2007-CL.VII dated December 6, 2007 and 12/176/2008-CL.VII dated March 14, 2008 respectively.

Note: The computation of profi t under Section 309(5) of the Companies Act, 1956 is not applicable as no commission is payable to the Managing Director and there is no profi t in the current year.

5. Interest

2008-2009Rupees

2007-2008Rupees

Interest Expense : On Loan 166,625,039 177,283,405Others 901,654 3,362,989 167,526,693 180,646,394Interest Income : On Deposits with banks [Tax deducted at source Rupees 890,712 (Previous Year : Rupees 1,258,282)] 9,163,959 6,434,356On Loans [Tax deducted at source Rupees 3,136,271 (Previous Year : Rupees Nil)] 13,959,704 232,710

23,123,663 6,667,066Interest Expense – net 144,403,030 173,979,328

6. One Time Entry Fee (OTEF) and Migration Fee

As per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company had been given the option to migrate all its existing license from Phase I regime to Phase II regime on payment of migration fees. Migration fees for each station shall be equal to the average of all successful bids received for that city. The Company had exercised the option and has migrated its licenses for all the seven cities to Phase II regime by payment of migration fees aggregating Rupees 815,234,696.

Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. The payment made by the Company to acquire these frequencies (One Time Entry Fees) is Rupees 1,301,000,000.

Based on the opinion obtained from an independent fi rm of Chartered Accountant, both Migration Fees and One Time Entry Fees has been capitalised as Intangible Asset.

7. The Company has classifi ed the various employee benefi ts provided to employees as under:- I) Defi ned Contribution Plans

a) Provident Fund b) State Defi ned Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995.


SCHEDULE 18


106


During the year, the Company has recognised the following amounts in the Profi t and Loss Account –

2008-2009Rupees

2007-2008Rupees

— Employers’ Contribution to Provident Fund * 21,222,862 15,512,906

— Employers’ Contribution to Employee’s Pension Scheme, 1995 * 7,205,155 5,353,304

* Included in Contribution to Provident and Other Funds (Refer Schedule 16)

II) Defi ned Benefi t Plans

In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid defi ned benefi t plan of gratuity based on the following assumptions:-

As atMarch 31, 2009

As atMarch 31, 2008

Discount Rate (per annum) 8.00% 8.00%

Rate of increase in Compensation levels 6.50% 6.50%

Rate of Return on Plan Assets 8.00% 8.00%

Expected Average remaining working lives of employees (years) 29.12/26.59/29.39 29.49/26.46/29.62

A) Changes in the Present Value of Obligation

As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

Present Value of Obligation at the beginning of the year 17,403,415 11,857,693

Interest Cost 1,392,272 948,616

Past Service Cost — —

Current Service Cost 6,911,278 3,814,155

Curtailment Cost / (Credit) — —

Settlement Cost / (Credit) — —

Benefi ts Paid (3,126,956) (880,592)

Actuarial (gain) / loss on obligations (1,524,777) 1,663,543

Effect of transfer in / transfer out 293,835 —

Present Value of Obligations at the year end 21,349,067 17,403,415

B) Changes in the Fair Value of Plan Assets

As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

Fair value of Plan Assets at the beginning of the year — —

Expected Return on Plan Assets — —

Actuarial Gains and (Loss) on Plan Assets — —

Contributions 3,126,956 880,592

Benefi ts Paid (3,126,956) (880,592)

Fair Value of Plan Assets at year end — —


SCHEDULE 18


107


C) Reconciliation of Present Value of Defi ned Benefi t Obligation and the Fair Value of Assets

As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

Present Value of funded obligation as at the year end — —

Fair Value of Plan Assets as at the end of the year — —

Funded Status — —

Present Value of unfunded obligation as at the year end 21,349,067 17,403,415

Unrecognised Actuarial (gains) / losses — —

Unfunded Net Asset / (Liability) Recognised in Balance Sheet** (21,349,067) (17,403,415)

** Included in Provisions (Refer Schedule 11)

D) Amount recognised in the Balance Sheet

As atMarch 31, 2009

Rupees

As atMarch 31, 2008

Rupees

Present Value of Defi ned Benefi t Obligation at the end of the year 21,349,067 17,403,415

Fair Value of Plan Assets as at the end of the year — —

Liability / (Net Asset) recognised in the Balance Sheet*** 21,349,067 17,403,415

*** Included in Provisions (Refer Schedule 11)

E) Expenses recognised in the Profi t and Loss Account

2008-2009Rupees

2007-2008Rupees

Current Service Cost 6,911,278 3,814,155

Past Service Cost — —

Interest Cost 1,392,272 948,616

Expected Return on Plan Assets — —

Curtailment Cost / (Credit) — —

Settlement Cost / (Credit) — —

Effect of transfer in 735,589 —

Effect of transfer out (441,754) —

Net actuarial (gain) / loss recognised in the Year (1,524,778) 1,663,543

Total Expenses recognised in the Profi t and Loss Account **** 7,072,607 6,426,314

**** Included in Salaries, Wages and Allowances (Refer Schedule 16)

F) Expected employer’s contribution for the next year Rupees 7,656,826 (Previous Year : Rupees 7,190,000).

III) The liability for leave encashment and compensated absences as at the year end is Rupees 14,073,015 (Previous Year : 11,323,676).


SCHEDULE 18


108


8. Segment Information

(i) Information about Primary Business Segments:

(Rupees)

2008-2009 2007-2008

Radio Broadcasting

Events Outdoors Unallocated Inter Segment Eliminations

Total Radio Brodcasting

Events Outdoors Unallocated Inter Segment Eliminations

Total

Revenue

External 2,286,722,769 503,272,575 1,486,883,801 — — 4,276,879,145 2,255,807,457 551,146,721 1,332,500,493 — — 4,139,454,671

Inter-Segment 4,143,761 66,412,502 2,195,632 — (72,751,895) — 18,411,381 49,974,681 4,815,901 — (73,201,963) —

Total Revenue 2,290,866,530 569,685,077 1,489,079,433 — (72,751,895) 4,276,879,145 2,274,218,838 601,121,402 1,337,316,394 — (73,201,963) 4,139,454,671

Result

Segment Result 106,273,695 5,936,530 (715,050,642) — — (602,840,417) 223,804,599 (3,297,857) (257,444,050) — — (36,937,308)

Unallocated Income, net of unallocated expenditure — — — 15,942,841 — 15,942,841 — — — 28,983,717 — 28,983,717

Interest Expense (Net) — — — (144,403,030) — (144,403,030) — — — (173,979,328) — (173,979,328)

Operating Profi t / (Loss) 106,273,695 5,936,530 (715,050,642) (128,460,189) — (731,300,606) 223,804,599 (3,297,857) (257,444,050) (144,995,611) — (181,932,919)

Provision for Taxation — — — (500,000) — (500,000) — — — (1,200,000) — (1,200,000)

Provision for Fringe Benefi t Tax — — — (28,175,000) — (28,175,000) — — — (27,600,000) — (27,600,000)

Provision for Deferred Taxation — — — 31,213,595 — 31,213,595 — — — 34,425,788 — 34,425,788

Profi t / (Loss) after taxation 106,273,695 5,936,530 (715,050,642) (125,921,594) — (728,762,011) 223,804,599 (3,297,857) (257,444,050) (139,369,823) — (176,307,131)

Other Information

Segment Assets 4,138,017,201 305,534,096 2,302,637,675 — (268,006,473) 6,478,182,499 5,109,675,434 261,762,093 2,284,809,985 — (81,888,209) 7,574,359,303

Segment Liabilities 1,590,737,204 232,007,780 1,102,232,427 — (251,642,826) 2,673,334,585 2,394,154,041 188,740,190 648,179,926 — (63,654,145) 3,167,420,012

Capital Expenditure 29,795,321 3,802,548 493,994,852 — — 527,592,721 341,074,580 13,893,564 165,025,393 — — 519,993,537

Depreciation / Amortisation 400,949,260 4,946,195 121,545,499 — (1,870,423) 525,570,531 321,111,916 1,501,977 40,670,142 — (470,161) 362,813,874

Non-Cash Expenses other than Depreciation 35,067 — — — — 35,067 377,961 — 1,338 — — 379,299

(ii) Information about Secondary Business Segments:(Rupees)

2008-2009 2007-2008

Particulars India Others Total India Others Total

Revenue from external customers 4,270,441,078 6,438,067 4,276,879,145 4,085,133,532 54,321,139 4,139,454,671

Carrying amount of Segment Assets 6,478,182,499 — 6,478,182,499 7,574,359,303 — 7,574,359,303

Addition to Fixed Assets during the year 527,592,721 — 527,592,721 519,993,537 — 519,993,537

(iii) Notes:

(i) The Group is organised into three main business segments ‘Radio Broadcasting’ comprising of activities relating to airtime sales, ‘Events’, comprising of activities relating to management of events and ‘Outdoors’, comprising of activities relating to advertising on bus queue shelters, Light Emitting Diode (LED), Metro Stations and Flyovers. The segments have been identifi ed and reported taking into account the nature of activities and services, the differing risks and returns, the organisation structure and the internal fi nancial reporting systems.

(ii) Segment revenue in each of the above business segments represents revenue directly attributable to the respective segment.

(iii) Segment revenue tabulated below: (Rupees)

2008-2009 2007-2008

Particulars Total Total

Sales 4,262,353,207 4,134,740,657

Other Income (excluding interest income and surplus on sale of investments) 14,525,938 4,714,014

Total 4,276,879,145 4,139,454,671


SCHEDULE 18


109


(iv) The Segment revenue in the geographical segments considered for disclosure are as follows:

(a) Revenue within India includes income from customers located within India and earnings in India.

(b) Revenue outside India represents income from customers located outside India.

(v) Segment revenue, results, assets and liabilities include the respective amounts identifi able to each of the above segments and amounts allocated on a reasonable basis.

9. Related Party Disclosures:

a) Parties where control exists

Bennett, Coleman & Company Limited (BCCL) – Ultimate Holding Company Times Infotainment Media Limited (TIML) – Holding Company

b) Fellow Subsidiary Companies

Vardhaman Publishers Limited (VPL)

Times Internet Limited (TIL)

Times Global Broadcasting Company Limited (TGBCL)

Times Business Solutions Limited (TBSL)

Optimal Media Solutions Limited (OMSL)

Vijayanand Printers Limited (VAPL)

Mirchi Movies (India) Limited (MML)

Zoom Entertainment Network Limited (ZENL)

c) Joint Venture

Worldwide Media Private Limited (WWM)

d) Key Managerial Personnel

Chairman Mr. Vineet Jain

Managing Director Mr. A. P. Parigi – ENIL Mr. Sunder Hemrajani – TIM

Non – Executive Directors

Mr. Ravindra Dhariwal Mr. N. Kumar Mr. Deepak M. Satwalekar Ms. Rama Bijapurkar (Upto 22.12.2008) Mr. Ravindra Kulkarni Mr. Sivakumar Sundaram Mr. Jason M. Brown Mr. Glenn Howard Schiffman (Upto 25.10.2008) Mr. A. P. Parigi for TIM and ABSL Mr. N. Kumar (Upto May 15, 2008)


SCHEDULE 18


110


SCHE

DULE

S AN

NEXE

D TO

AND

FOR

MIN

G PA

RT O

F TH

E BA

LANC

E SH

EET

AS A

T M

ARCH

31,

200

9 AN

D PR

OFIT

AND

LOSS

ACC

OUNT

FOR

TH

E YE

AR E

NDED

MAR

CH 3

1, 2

009

SCH

EDU

LE 1

8

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATEM

ENTS

(Con

td.)

e.

Tr

ansa

ctio

n w

ith R

elat

ed P

artie

s

(Rup

ees)

Parti

cula

rs 2

008—

2009

2

007—

2008

Par

ties

whe

re c

ontr

ol

exis

ts

Fel

low

Sub

sidi

ary

Com

pani

es

Joi

nt

Vent

ure

Par

ties

whe

re c

ontro

l ex

ists

F

ello

w S

ubsi

diar

y Co

mpa

nies

J

oint

Ve

ntur

e

BCC

L T

IML

MM

L T

IL

TG

BCL

T

BSL

Z

ENL

OM

SL

VA

PL

VPL

W

WM

B

CCL

TIM

L M

ML

TIL

T

GBCL

T

BSL

ZEN

L O

MSL

V

APL

VPL

W

WM

Tran

sact

ions

with

Rel

ated

Par

ties

:

Airti

me

Sale

s 5

6,33

9,90

9 —

—

17

,452

,529

—

1,

207,

466

2,05

3,96

1 —

6

33,4

04

—

—

53,

419,

525

—

—

5,99

1,93

8 —

—

—

—

—

—

1

,149

,687

Even

t Man

agem

ent I

ncom

e 1

19,9

35,1

87

—

—

—

—

—

1,16

8,00

0 —

—

—

23

,007

,399

6

7,36

8,52

4 —

—

—

5

97,0

31

—

11,

500

—

—

—

23,6

52,7

60

Outd

oor A

dver

tism

ent R

even

ue 2

7,37

4,29

0 —

2

,326

,226

—

6

67,1

00

— 5

58,3

18

—

—

—

—

44,

251,

887

—

—

—

—

—

—

—

—

—

—

Recr

uitm

ent E

xpen

ses

—

—

—

—

—

355

,828

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Empl

oyee

s St

ock

Optio

n Ex

pens

e —

—

2

1,91

7 —

—

—

—

—

—

—

—

—

4

13,3

95

81,

058

—

—

—

—

—

—

—

—

Offi c

e Re

nt 3

3,92

9,51

0 —

—

—

—

—

—

—

—

1

23,7

50

—

21,

912,

759

—

—

—

—

—

—

—

—

115

,830

—

Prin

t Adv

ertis

men

t Exp

ense

s 1

5,05

4,26

1 —

—

—

—

—

—

3

64,7

52

274

,200

—

—

2

1,40

7,03

5 —

—

—

—

—

—

6,

202,

232

—

—

—

Outd

oor A

dver

tisem

ent E

xpen

ses

—

—

—

—

—

—

—

—

—

—

—

—

—

—

3,88

5,97

0 —

—

—

—

—

—

—

Com

mis

sion

on

Priv

ate

Trea

ty S

ales

12,

393,

995

—

—

—

—

—

—

—

—

—

—

15,

201,

204

—

—

—

—

—

—

—

—

—

—

Inte

rnet

Adv

ertis

emen

t Exp

ense

s —

—

—

8

,605

,206

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

TV A

dver

tisem

ent E

xpen

ses

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

357

,000

—

—

—

—

—

—

Trav

el C

ost

—

—

—

25,1

22,7

03

—

—

—

—

—

—

—

—

—

—

9,96

7,20

4 —

—

—

—

—

—

—

Inte

rest

Inco

me

—

—

—

—

—

—

—

—

—

—

—

—

3,7

58,2

92

—

—

—

—

—

—

—

—

—

Inte

rest

Exp

ense

59,

554,

237

160

,479

—

—

—

—

—

—

—

—

—

6

2,67

1,23

3 —

—

—

—

—

—

—

—

—

—

Reco

very

of E

xpen

ses

5,9

75,6

25

5,6

91,6

17

1,4

70,4

91

720

,354

1,

131,

675

735

,873

3

4,47

3 —

—

—

—

1

,692

,446

1

4,06

5 2

72,0

07

—

—

—

—

—

—

—

—

Reim

burs

emen

t of E

xpen

ses

27,

631,

507

655

,258

1

60,0

85

9,4

58,4

06

—

3,56

2,03

6 1,

423,

994

2,52

3,75

0 —

—

—

8

,943

,573

6

29,3

37

—

1,96

8,39

4 —

—

—

—

—

—

—

Fixe

d As

set P

urch

ase

– SA

P —

—

—

—

—

—

—

—

—

—

—

5

,873

,866

—

—

—

—

—

—

—

—

—

—

Bad

Debt

s W

ritte

n of

f —

—

—

—

—

—

—

—

—

—

—

—

6

84,2

87

—

—

—

—

—

—

—

—

—

Loan

rep

aid

149

,333

,820

75

,000

,000

—

—

—

—

—

—

—

—

—

—

124

,000

,000

—

—

—

—

—

—

—

—

—

Loan

Giv

en

—

75,0

00,0

00

—

—

—

—

—

—

—

—

—

—

54,

000,

000

—

—

— —

—

—

—

—

—

Assi

gnm

ent o

f Deb

ts —

—

—

—

—

—

—

—

—

—

—

—

5

7,84

5,67

1 —

—

—

—

—

—

—

—

—

Fina

nce

char

ges

on A

ssig

nmen

t of D

ebt

—

—

—

—

—

—

—

—

—

—

—

—

2,1

00,0

00

—

—

— —

—

—

—

—

—

Bal

ance

s w

ith R

elat

ed P

artie

s :

Outs

tand

ing

Loan

Pay

able

s 6

00,6

66,1

80

—

—

—

—

—

—

—

—

—

—

750,

000,

000

—

—

—

—

—

—

—

—

—

—

Outs

tand

ing

Rece

ivab

les

129

,105

,295

—

1

,154

,471

11

,918

,213

7

61,5

00

1,13

7,88

6 4,

005,

066

—

—

—

23,7

23,1

23

122,

855,

162

1,5

93,6

71

276

,215

6,

022,

858

24,

299

1,41

2,39

2 1

2,92

1 —

—

—

20

,202

,871

Adva

nce

Rece

ivab

les

232

,610

,535

2

,307

,124

5

33,5

02

—

914

,602

5

81,7

79

38,

734

—

—

—

—

128,

986,

022

427

,621

5

51,5

19

1,70

4,33

4 —

—

—

—

—

—

—

Depo

sit

10,

000,

000

200

,000

—

—

—

—

—

—

—

—

—

1

0,00

0,00

0 —

—

—

—

—

—

—

—

—

—

Outs

tand

ing

Paya

bles

14,

633,

533

12,

000

—

14,3

43,9

80 —

—

1,

186,

454

344

,759

—

2

39,5

80

—

1,2

56,5

66

—

—

229

,266

2

6,93

8 —

—

—

—

—

1

,711

,048

Due

to H

oldi

ng C

ompa

ny/F

ello

w S

ubsi

diar

y 4

9,87

5,30

6 3

3,80

6,64

1 —

—

—

—

—

—

—

—

—

4

4,61

4,12

3 —

—

—

—

—

—

—

—

—

—

Due

from

Hol

ding

Com

pany

/Fel

low

Sub

sidi

ary

28,

473,

628

—

—

739

,074

3

00,0

00

15,

730

—

—

—

—

—

—

58,

354,

932

—

—

—

—

—

—

—

—

275

,359

111


f. Details relating to Persons referred to in 9 (d) above:

Name of the Person 2008-2009Rupees

2007-2008Rupees

Mr. A. P. Parigi 20,940,660 21,393,302

Mr. Sunder Hemrajani 15,412,901 7,605,890

Total 36,353,561 28,999,192

10. Disclosure for Operating Leases i) Disclosure in respect of cancelable agreements for cars taken on lease: a) Lease payments recognised in the Profi t and Loss Account Rupees 138,528,503 (Previous Year : Rupees 115,607,389). b) All the agreements provide for early termination by either party by giving prior notice in writing. c) The agreements provide for advance payment of Rupees 7,000,000 to be adjusted over a period of 70 months towards quarterly

usage charges of higher if Rupees 300,000 or 20% of Revenue collected and earned in that quarter. ii) Disclosure in respect of non-cancelable agreements for LED taken on lease : a) Lease payments recognised in the Profi t and Loss Account Rupees 2,837,021 (Previous Year : Rupees Nil). b) Future minimum lease payments under the lease are as follows:

Particulars 2008-2009Rupees

2007-2008Rupees

Not later than one year 4,819,056 Nil

Later than one year and not later than fi ve years 17,428,919 Nil

Later than fi ve years Nil Nil

11. Earnings Per Share (Basic and Diluted)

The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of shares outstanding during the year. The number of shares used in computing Diluted EPS comprises of weighted average shares considered for deriving Basic EPS and also the weighted average number of equity share which would be issued for no consideration on exercise of options under the Employee Stock Option Scheme 2005. The number of shares is adjusted for reduction of share capital.

2008-2009 2007-2008

Loss computation for both Basic and Diluted Earnings Per Share of Rupees 10 each

Loss as per the Profi t and Loss Account available for Equity Shareholders (in Rupees) (602,862,961) (170,891,506)

Weighted average number of Equity Shares for Earnings per share computation

For Basic Earnings Per Share 47,663,959 47,638,884

Add: Weighted average outstanding employee stock options deemed to be issued for no consideration — 11,586

Number of shares for Diluted Earnings Per Share 47,663,959 47,650,470

(Loss) / Earnings per Share (Rupees)

Basic (12.65) (3.59)

Diluted (12.65) (3.59)


SCHEDULE 18


112


12. Employee Stock Option Scheme (ESOS)

Pursuant to the resolution passed by the Board of directors and members of the Company at the meeting of Board of Directors and Extra Ordinary General Meeting of the Members of the Company respectively, held on November 5, 2005, the Company had introduced Employee Stock Option Scheme (‘the scheme’) for its existing and future permanent employees and directors and existing and future permanent employees and directors of its Subsidiary Company and Holding Company.

The scheme provides that the total number of options granted there under will be 109,360. Pursuant to a resolution passed by the Remuneration / Compensation Committee at its meeting held on November 5, 2005, all 109,360 options that are exercisable for Equity Shares have been granted at an exercise price of Rupees 90.

In accordance with the Guidance Note on “Accounting for Employee Share-based Payments” issued by the ‘The Institute of Chartered Accountants of India’ and Employee Stock Option and Stock Purchase Guidelines, 1999 issued by the Securities and Exchange Board of India, fair value of these options, on the grant date, is amortised over the vesting period.

Particulars 2008-2009 2007-2008Options outstanding at the beginning of the year 14,355 85,840Add:Options granted during the year — —

14,355 85,840Less:Options forfeited during the year — —Options exercised during the year 14,355 71,485Options expired during the year — —Options outstanding at the end of the year — 14,355Exercise price for options outstanding at the end of the year (Rupees) — 90Fair value of options amortised during the year (Rupees) 56,984 873,751

Fair value of the options granted during the previous year, based on the report received from an independent fi rm of Chartered Accountants, as per Black Scholes method of valuation, was as follows:

Vesting Date Number of Options Fair value of the optionNovember 15, 2006 34,975 95.25April 1, 2007 42,775 98.40July 1, 2007 17,255 100.36April 1, 2008 8,700 105.67July 1, 2008 5,655 107.30Weighted average 98.74

Further, amortisation of fair value of the options granted to the employees of Times Infotainment Media Limited, the Holding Company and Mirchi Movies (India) Limited, subsidiary of Holding Company aggregating Rupees Nil (Previous Year : Rupees 413,395) and Rupees 21,917 (Previous Year : Rupees 81,058) respectively have been charged to the respective companies.

13. Previous year’s fi gures have been regrouped where necessary.Signatures to Schedules “1” to “18” forming part of the fi nancial statements.


SCHEDULE 18





Vineet JainChairman





ENTERTAINMENT NETWORK (INDIA) LIMITEDRegistered Offi ce : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013.

ATTENDANCE SLIP

Annual General Meeting on Friday, September, 4, 2009 at 3.00 p.m. at Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s University (‘Patkar Hall’), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai - 400 020.

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.

DP Id* Registered Folio No.

Client Id*

NAME AND ADDRESS OF THE MEMBER :

No. of Share(s) held :

I hereby record my presence at the Tenth Annual General Meeting of the Company at the Patkar Hall, 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai - 400 020, on Friday, September, 4, 2009 at 3.00 p.m.

Signature of the Member/Proxy ______________________________

* Applicable for investors holding shares in electronic form.

_____________________________________________________TEAR HERE ________________________________________________

ENTERTAINMENT NETWORK (INDIA) LIMITEDRegistered Offi ce : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West), Mumbai - 400 013.

PROXY FORM

DP Id* Registered Folio No.

Client Id*

I/We .................................................................................................................................... of ...............................................................................................

being a Member(s) ENTERTAINMENT NETWORK (INDIA) LIMITED hereby appoint ....................................................................................................

.................................................................... of ................................................................................................................................................ or failing him/her

.................................................................. of .......................................................................................................................................................... as my/our

proxy to vote for me/us and on my/our behalf at the Tenth Annual General Meeting of the Company to be held on Friday, September, 4, 2009

at 3.00 p.m. and at any adjournment thereof.

Signed ..................... 2009.

Place: .........................................

* Applicable for Members holding shares in electronic form.

Note: The Proxy in order to be effective, should be duly completed, stamped, signed and must be deposited at the Registered Offi ce of the Company not less than 48 hours before the time for holding the aforesaid Meeting. The Proxy need not be a Member of the Company.

Signature

Affi xRe. 1/-

Revenue

Stamp

Notes

Notes

Every organization, once in its lifetime, needs to create magic. ENIL entered such a phase during the

year. It had to set its own standards. Such standards are so refined that the focus is on

enabling/building a new paradigm in the entertainment sector. Factors like competition tend to become

far less relevant.

Every once in a while, a point comes in the life of a company, when it needs to set its own standards.

When a focus on competition becomes less relevant. ENIL entered a similar phase during the year.

As a brand, Mirchi excelled in FY09. Its listenership was at an all time high – 40 million people. Its

lead over its nearest competitor was more than double. Its market share in revenue terms remained in

excess of 40% of the private FM industry. As the economic downturn hit the advertising industry, its

market share increased further! Competition was still around, but far more muted.

Mirchi has always set standards. In 2009, this paradigm shift was based on a new mantra: The March

against Mediocrity.

The March….. is a continuing process. It aims to keep raising the bar periodically. Just with one

objective. Creating value for its shareholders. Shareholders who have reposed their faith in the

company and brand ever since the start of its journey in the year 2000. That distinguished group of

shareholders who continue to repose their faith – in spite of the meltdown.

The March has just begun. Join us to see how it plays out over the years.

A PR

ISM

Sol

utio

n (w

ww

.pris

m.n

et.in

)

Documents

march against mediocrity - WELCOME TO ENIL · A milestone in Mirchi's March against Mediocrity is the IRS 2009, R1 findings. The results clearly demonstrate, with no iota of ambiguity,