Balaji Telefilms

The Directors take pleasure in presenting the Fourteenth Annual Report
 together with the audited statement of accounts of the Company for the
 year ended 31st March, 2008.
 
 Financial Results                                    (Rupees in lacs)
 Particulars                                          2007-08    2006-07
 
 Income from operations                             32,896.85  31,746.68
 Total expenditure                                  20,506.48  19,788.75
 Operating profit                                   12,390.37  11,957.93
 Interest                                                0.00       0.42
 Depreciation                                        1,270.06   1,124.75
 Operating profit after interest and depreciation   11,120.31  10,832.76
 Other income                                        1,728.08     941.06
 Profit before tax                                  12,848.39  11,773.82
 Provision for taxation                              4,055.08   3,831.00
 Net profit after tax                                8,793.31   7,942.82
 Balance brought forward from previous year         10,965.09   6,389.65
 (Short)/excess provision for tax 
 in respect of earlier years                           (54.80)     29.38 
 
 Appropriations
 Disposable profits                                 19,703.60  14,361.85
 Proposed dividend                                   2,282.37          -
 Interim dividend                                           -   2,282.37
 Corporate dividend tax                                387.89     320.10
 Transfer to general reserve                           879.33     794.29
 Balance carried to Balance Sheet                   16,154.01  10,965.09
 
 Results of Operations
 
 The Company continues to perform on a sustained basis with satisfactory
 results for the year 2007-08.
 
 For the year ended 31st March 2008, the Company earned total revenue of
 Rs. 34,624.93 lacs, an increase of 5.93% over the previous year’s Rs.
 32,687.74 lacs. As per the consolidated accounts, the total revenues
 have grown by 20% from Rs. 32,965.62 lacs to Rs. 39,591.40 lacs in the
 year under review.
 
 The net profit of the Company for the year increased from Rs. 7,942.82
 lacs to Rs. 8,793.31 lacs in the year under review, a growth of 10.70%.
 As per the consolidated accounts, the net profit for the year was Rs.
 9,614.32 lacs as compared to Rs. 7,925.07 lacs in the previous year, a
 growth of 21. 31%.
 
 A detailed discussion on the business performance is presented in the
 Management Discussion and Analysis section of the Annual Report.
 
 In April 2007, the Company had announced joint venture with the Star
 Group for launching regional language channels. Due to certain
 unforeseen operational issues, this initiative is still on hold and
 under review.
 
 Appropriations
 
 Dividend
 
 The Directors are pleased to recommend a final dividend of Rs. 3.50 per
 share (175 per cent on a par value of Rs. 2 per share) for the approval
 of the members. The final dividend, if declared as above, would involve
 an outflow of Rs. 2,282.37 lacs towards the dividend (previous year Rs.
 2,282.37 lacs) and Rs. 387.89 lacs towards dividend tax (previous year
 Rs. 320.10 lacs), resulting in a total outflow of Rs. 2,670.26 lacs as
 against Rs.  2,602.47 lacs in the previous year.  Dividend (including
 dividend tax) as percentage of profit after tax is 30.37%, as compared
 to 32.77% in the previous year.
 
 Transfer to Reserves
 
 We propose to transfer Rs. 879.33 lacs to the general reserve out of
 the amount available for appropriations. An amount of Rs. 16,154.01
 lacs is proposed to be retained in the profit and loss account.
 
 Subsidiaries
 
 We have two wholly owned subsidiaries: Balaji Motion Pictures Limited
 (BMPL) and Balaji Telefilms FZE (BTF).
 
 BMPL was established in March 2007 to handle the film related business
 of the Company. BMPL successfully released three movies during the
 year. BMPL’s four new film projects i.e. Sarkar Raj, EMI, C Kkompany
 and
 
 Mission Istanbul have been tentatively scheduled for release in the
 first two quarters of this year. BMPL achieved turnover of Rs. 3,653.22
 lacs and profit after tax of Rs. 549.11 lacs in its first full year of
 operations.
 
 BTF was incorporated in Sharjah Airport International Free Zone in
 September 2006, to provide content to the leading channels of the
 region. BTF launched its first serial ‘Khwaish’ in June 2007 on ARY and
 Sony channel successfully. Due to certain operational issues, the
 production of the programme was later shifted to India. The production
 of the serial was discontinued in April 2008 and the Company is now
 exploring other alternatives in these markets.
 
 Directors
 
 Mr. Jeetendra Kapoor and Mr. Dhruv Kaji retire by rotation at the
 ensuing Annual General Meeting. Both of them, being eligible, offer
 themselves for re-appointment.
 
 Ms Ella Wong was appointed as Alternate Director to Mr. John Lau on
 22nd May 2008.
 
 The brief resume/details relating to the Directors who are to be
 re-appointed are furnished alongwith the notice convening the Annual
 General Meeting.
 
 Your directors recommend their re-appointment at the ensuing Annual
 General Meeting.
 
 Auditors
 
 M/s. Deloitte Haskins and Sells, Chartered Accountants, Mumbai and M/s.
 Snehal & Associates, Chartered Accountants, Mumbai, the Joint Auditors
 of the Company retire at the ensuing Annual General Meeting and being
 eligible, offer themselves for re-appointment.  They have also
 confirmed their eligibility and willingness for re-appointment if made
 the Joint Auditors of the Company and confirmed that, if appointed as
 auditors for the year 2008-09, their appointment will be within the
 limits prescribed under Section 224(1B) of the Companies Act, 1956.
 
 Particulars of Employees
 
 Particulars of employees, as required under the provisions of Section
 217(2A) of the Companies Act, 1956, read with the Companies
 (Particulars of Employees) Rules, 1975, are set out as under:
 
 
 Sr. Name                 Age        Designation    
 No                      (Year)       
 
 1 Ashish Gharde*         36       National Head -
                                   Human Resource
 2 Ekta Kapoor            33       Creative Director
 3 R. Karthik             39       Chief Executive
   Officer
 4 Sandeep Jain           37       Chief Financial
   Officer
 5 Shobha Kapoor          59       Managing Director
 6 Umesh Ray              44       President Operation
 
 
 
 Gross             Qualification          Experience  
 remuneration
 
 497,693          B.Com, Masters         12 years
                  in Personnel
                  Management
 
 42,272,000       N.A.                   14 years
 
 4,132,226        M.Sc, MBA              15 years
 
 3,537,167        C.A., C.S.             13 years
 
 41,648,000       N.A.                   14 years
 
 2,706,914        B.Com, LLB,            16 years
                  B. Ed.
 
 
 Date of        Previous employment
 jioning
 
 12/2/2008      Music Broadcast India
                Private Limited - HR Head
 
 10/11/1994     -
 
 1/3/2000       Nimbus Communications Ltd
                Sr. Marketing Executive
 
 3/5/2006       SET Discovery Pvt. Ltd.
                Senior Manager
 
 10/11/1994     -
 
 1/3/2000       Independent Consultant
 
 Note:
 
 1.  The gross remuneration shown above comprises of salary, commission,
 allowances, the Company’s contribution to provident fund, insurance,
 gratuity under LIC scheme in terms of actual expenditure incurred by
 the Company and monetary value of the perquisites as per income tax
 rules.
 
 2.  The nature of employment in all cases is contractual. Services of
 Ms. Shobha Kapoor and Ms. Ekta Kapoor are terminable by twelve month’s
 notice for each. Services of all other employees mentioned above are
 terminable by either party, by giving three month’s notice.
 
 3.  None of the above employees mentioned above are related to any
 Directors of the Company, except for Ms. Shobha Kapoor and Ms. Ekta
 Kapoor, who are related to each other.
 
 4.  Ms Shobha Kapoor holds 9,935,000 shares constituting 15.24% and Ms.
 Ekta Kapoor holds 9,727,000 shares constituting 14.92% of shares in the
 Company.
 
 5.  * Indicates earnings for part of the year.
 
 Consolidated Financial Statements
 
 In compliance with the Accounting Standard 21 on Consolidated Financial
 Statements, this Annual Report also includes Consolidated Financial
 Statements for the financial year 2007-08.
 
 Particulars Under Section 212 of the Companies Act, 1956
 
 As per Section 212 of the Companies Act, 1956, we are required to
 attach certain documents of our subsidiaries. We have attached the
 directors’ report, auditors’ report, balance sheet and profit and loss
 account of Balaji Motion Pictures Limited, the wholly owned Indian
 subsidiary of the Company and the statement under section 212 of the
 holding company’s interest in the subsidiaries. We had applied to the
 Central Government for exemption from attaching the accounts of the
 Balaji Telefilms FZE, wholly owned overseas subsidiary of the Company
 (since received).  Accordingly, the Annual Report does not contain the
 financial statements of this subsidiary. We will make available the
 audited annual accounts and related information of this subsidiary,
 wherever applicable, upon request by any of our investors. These
 documents will also be available for inspection during business hours
 at our registered office. The Company also presents the audited
 consolidated financial statements in the Annual Report. We believe that
 the consolidated accounts present a full and fair picture of the state
 of affairs and financial condition, and are accepted globally.
 
 Auditors Report
 
 The observations of Auditors in their report read with the relevant
 notes to accounts in Schedule 16 are self-explanatory and do not
 require further explanation.
 
 Conservation of Energy
 
 Energy conservation measures taken by the Company
 
 Our operations are not energy intensive.  However, significant measures
 are taken to reduce energy consumption by using energy- efficient
 computers and by purchasing energy- efficient equipment. We purchase
 PCs, laptops, air conditioners etc. that meet environmental standards,
 wherever possible and replace the old equipment with more
 energy-efficient equipment. Currently, we use CFL fixtures to reduce
 the power consumption in the illumination system.
 
 Additional investments and proposals, if any, being implemented for
 reduction of consumption of energy
 
 We constantly evaluate new technologies and invest into this to make
 our infrastructure more energy efficient.
 
 Impact of the measures and consequent impact on the cost of production
 of goods
 
 As energy costs comprise a very small part of our total expenses, the
 financial impact of these measures is not material.
 
 Total energy consumption
 
 Since the Company does not form part of the list of industries
 specified in the schedule, the same is not applicable to the Company.
 
 Technology Absorption
 
 The Company’s research and development initiatives mainly consists of
 ideation of new subjects for our serials which are used in the creation
 of new storyline and tracks. The expenses incurred on such initatives
 are not practically quantifiable.
 
 The Company is an integrated player in the entertainment industry and
 our business is such that there is limited scope for new technology
 absorption, adaptation and innovation. However, the Company use the
 latest technology, wherever possible for better production values as a
 regular process.
 
 Foreign Exchange Earnings and Outgo
 
 The foreign exchange earnings is Rs. 25,623.73 lacs and the outgo is
 Rs. 412.27 lacs, including Rs. 177.46 lacs towards capital goods, as
 given in Point 15 in Schedule 16 (statement of significant accounting
 policies and notes forming part of accounts) of the financial
 statement.
 
 Fixed Deposits
 
 The Company has not accepted any fixed deposits and as such, no amount
 of principal or interest was outstanding as on the balance sheet date.
 
 Corporate Governance
 
 A separate section on corporate governance and a certificate from
 Auditors of the Company regarding compliance of the conditions of
 corporate governance as stipulated under clause 49 of the listing
 agreements with the stock exchanges forms part of this Annual Report.
 
 Certificate of CEO / CFO, inter alia , confirming the correctness of
 the financial statements, adequacy of the internal measures and
 reporting of matters to the audit committee in terms of the clause 49
 of the listing agreements with stock exchanges, is also attached as a
 part of this Annual Report.
 
 Directors Responsibility Statement
 
 Pursuant to the requirement under Section 217 (2AA) of the Companies
 Act, 1956 and based on the representation received from the operating
 management, the Directors hereby confirm:
 
 * That in the preparation of the annual accounts, the applicable
 accounting standards have been followed and no material departures have
 been made from the same;
 
 * That they have selected such accounting policies and applied them
 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 at the end of the financial year and of the profit or loss
 of the Company for that period;
 
 * That they have taken proper and sufficient care for the maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 That they have prepared the annual accounts on a going concern basis.
 
 Acknowledgements
 
 Your Directors takes this opportunity to express their sincere
 appreciation for the excellent support and co-operation extended by the
 shareholders, bankers and other business associates. Your Directors
 further wish to place on record their appreciation of the exemplary
 contribution made by the employees at all levels, who, through their
 competence, hard work, solidarity, cooperation and support enabled the
 Company to achieve consistent growth.
 
                                  On behalf of the Board of Directors,
                                                Jeetendra Kapoor
                                                       Chairman
 22nd May 2008
 Mumbai