Network 18 Media & Investments

The Directors have pleasure in presenting the 13th Annual Report and
 Audited Accounts of Network 18 Media & Investments Limited (Formally
 known as Network 18 Fincap Limited) (hereinafter referred to as
 Company or Network 18) for the Financial Year ended March 31,2008.
 
 Financial Results
 
 The key financial figures on standalone basis of your Company for the
 year ended March 31, 2008 are as follows:   
 
                                                      (Rs. in million)
                                         Year ended        Year ended
                                      March 31,2008     March 31,2007
 
 Profit/ (Loss) before interest
 and depreciation                            704.20           (26.29)
 Interest                                    258.18            32.93
 Depreciation                                  1.80             1.04
 Net operating profit before tax             444.20           (60.27)
 Provision for taxes/deffered taxes            1.49             0.25
 Extraordinary item                             NIL              NIL
 Net profit/ (loss) after tax                442.71           (60.52)
 
 The summarized financial figures on consolidated basis of your Company
 for the year ended March 31, 2008 are as follows:
 
                                            Year ended       Year ended
                                        March 31, 2008    March 31,2007
 
 Profit/ (Loss) before interest
 and depreciation                             1,636.58           480.44
 Interest                                       951.90           359.03
 Depreciation                                   405.10           240.61
 Net operating profit before tax                279.57          (119.20)
 Provision for taxes/deferred taxes             236.60            18.36
 Extraordinary item                                NIL              NIL
 Net profit/ (loss) after tax                    16.91          (149.72)
 
 Year under Review
 
 During the year under review, the Company has achieved a turnover of
 Rs.1,434.25 million and EBDIT is Rs. 704.20 million.  Audited
 Consolidated Financial Statements for the year ended March 31, 2008
 also form a part of this Annual Report.
 
 Dividend
 
 The Directors have declared a maiden interim dividend of Rs. 1.25/- per
 equity share of Rs.5/- each for the Financial Year 2007-2008. The same
 was distributed to the shareholders whose name appeared in the Register
 of Members as on February 16,2008 (the record date for the purpose).
 Your Directors confirm that already paid dividend of 25% shall be taken
 as final dividend for the year under review.
 
 Transfer to Reserves
 
 We propose to transfer a sum of Rs. 4.5 million to General Reserves and
 retain Rs. 53.54 million in Profit & Loss Account.
 
 Deposits
 
 The Company has not accepted any deposits from public during the year
 under review.
 
 Changes in Share Capital
 
 The Company has issued 6,18,860 shares of Rs. 5 each to the employees
 on exercise of stock options. Consequently, the share capital of the
 Company has increased from Rs. 25,43,16,975/- to Rs.  25,74,11,275/-
 
 Employee Stock Option and Purchase Plan
 
 Your Company believes in rewarding its employees, who are behind the
 continued growth of the Company in every sphere of its activities, for
 the hard work, dedication and unstinted support. The Company has
 implemented various ESOP Plans in order to extend the benefits of the
 phenomenal growth that the Company has witnessed in the recent past to
 maximum number of employees In accordance with the Scheme of
 Arrangement between the Company, Television Eighteen India Limited
 (hereinafter referred to as TV18), and SGA News Limited approved by
 the Honble High Court of Delhi on July 20,2006, the Compensation
 Committee of TV18 had decided that the employees of the TV18 will be
 granted options in Network 18 on the same terms as shares were allotted
 to the shareholders of TV18 in Network 18.
 
 Pursuant to the above, your Company had launched various ESOP Plans
 with your approval on the same terms and conditions as contemplated
 under the corresponding TV18 ESOP Plans.  The Company was managing a
 large number of Networkl 8 ESOP Plans which were successfully
 implemented. However, with a view to consolidate the existing ESOP
 Plans under a single plan, the Board took an approval of the
 shareholders for cancellation of un-granted options under the various
 ESOP Plans of the Company and consolidated the un-granted options under
 a fresh ESOP Plan for the employees.  The cancellation of the
 un-granted options has not in any manner affected the options already
 granted by the Company to its eligible employees under old Schemes and
 such options shall remain in full force in accordance with the
 respective ESOP Plans.  Accordingly, the employees of the Company are
 presently benefited from Networkl 8 Employees Stock Option Plan, 2007
 (ESOP 2007) and Employee Stock Purchase Plan 2008 (ESPP 2008) besides
 the benefit drawn from the options granted but not vested under the old
 Schemes.
 
 A Certificate from the Statutory Auditor of the Company for
 implementation of the ESOP 2007 and ESPP 2008 in accordance with
 the SEBI Guidelines and the resolution passed by the members of the
 Company, will be made available for inspection by the members at the
 ensuing Annual General Meeting of the Company
 
 Rights Issue
 
 Your Company came out with a Rights Issue of 1,02,96,451 Partly
 Convertible Cumulative Preference Shares (PCCPS) of Rs. 200/- each with
 a detachable warrant during the year under review. The Company thanks
 its investors for the overwhelming response shown by them for the
 Rights Issue of the Company.
 
 The Rights Issue was open from March 29,2008 to April 28,2008. The
 allotment of the PCCPS was made on May 15, 2008.
 
 The PCCPS allotted under the Rights Issue consists of two parts:
 
 Part A- Convertible portion: The convertible portion is compulsorily
 and automatically convertible into one Equity Share on the PCCPS
 becoming fully paid-up and an amount of Rs. 50 (Rs. 5 towards face
 value and Rs. 45 towards share premium) out of the Issue Price of Rs.
 200/- will be appropriated towards issuance of each such Equity Share.
 
 Part B- Non-convertible portion: After the part conversion of the PCCPS
 into Equity Share, the PCCPS having face value of Rs.  150/- shall be
 redeemed at the end of five years from the Allotment Date viz May 15,
 2008 at the balance amount of Rs. 150/-.
 
 The PCCPS holders shall be issued one Detachable Warrant for every
 PCCPS held by them on PCCPS becoming fully paid - up. Each Detachable
 warrant is convertible into one equity share at a date to be decided by
 the Company and on payment of the exercise price for the conversion of
 the Detachable Warrant.  Your Company has sent notices to the PCCPS
 holders for depositing the call money of Rs 100/- per PCCPS . Presently
 the partly paid PCCPS has been suspended and the new allotment of
 PCCPS, Equity Shares and Detachable Warrants is expected to be made in
 the first week of September, 2008
 
 Change of Name
 
 The name of your Company was changed from Network 18 Fincap Limited to
 Networkl 8 Media & Investments Limited with effect from December
 1,2007.
 
 Change of Registered Office
 
 There is no change in the registered office of the company during the
 year under review.
 
 Change in the Objects Clause of Memorandum of Association of the
 Company.
 
 During the year under review your Company floated a new Entertainment
 Events division, christened E 18. E 18 conceptualise and stage large
 format events such as Busines Conferences, Conclaves, Seminars,
 concerts by International Artists, Bollywood shows/ Award nights in
 India & around the region. New clauses (5A to 5F) after clause (5) were
 added under the Main Object clause of the Memorandum of Association of
 the Compmay to enable initiation and carrying on of the the aforesaid
 business of events management.
 
 Further, with a view to participate in and tap the growth opportunities
 in the non-cricketing space of the sports events in the country your
 Company launched a full fledged division within the Company under the
 name and style of Sport18 to initiate and carry on interalia the
 broadcasting, management, sponsorship etc of sports events in non-
 cricketing space.
 
 Accordingly, the Main Objects Clause of the Memorandum of Association
 of the Company were amended again vide postal ballot dated June 6, 2008
 by inserting new activities which were to be undertaken by SportW
 
 Transfer of Studio 18
 
 During the year under review the Network18 Group announced a strategic
 alliance with Viacom Inc. to create a 50 : 50 Joint Venture in India
 viz. Viacom 18. As part of the strategic alliance, your Company has
 entered into a Business Transfer Agreement to transfer its business
 undertaking of film production, distribution, marketing, acquisition of
 worldwide distribution rights, carried on by and under the name of
 Studio 18 together with its Business Contracts, Employees, Books and
 Records, Business Agents, Business Properties, Stock and work in
 progress, Current Liabilities and Provisions, Current Assets, Business
 Goodwill and Business Intellectual Property Rights to Viacom 18.
 
 Management Discussion and Analysis Report
 
 In terms of requirement of clause 49 of the Listing Agreement with the
 Stock Exchange(s) Management Discussion and Analusis Report disclosing
 the operations of the Company in detail is provided sepately as a part
 of Directors Report.
 
 Corporate Governance
 
 Corporate Governance is about commitment to values and about ethical
 business conduct. It stems from the culture and mindset of a
 management; hence measures of Corporate Governance should be more by
 self-discipline than by legislation and regulation.  Your Company
 strives for excellence with the objective of enhancing shareholders
 value and protecting the interest of shareholders. At Networkl 8 we
 ensure the practice of the Principles of Good Corporate Governance.
 Decisions are based on a set of principles influenced by the values,
 context and culture of the organization. All functions of the Company
 are discharged in a professionally sound, competent and transparent
 manner.
 
 The detailed Corporate Governance Report of the Company in pursuance of
 Clause 49 of the Listing Agreement forms part of the Annual Report of
 the Company.
 
 Listing of Shares
 
 Your Companys securities are listed at:
 
 a) Bombay Stock Exchange Limited, 1st Floor, Phiroze Jeejeebhoy Towers,
 Dalai Street, Mumbai - 400 001; and
 
 b) National Stock Exchange of India Limited, Exchange Plaza, 5th
 Floor, Bandra -Kurla Complex, Bandra (E), Mumbai - 400 051.
 
 Directors
 
 We are saddened to inform you that Sh. P. N. Bahl a senior member of
 the Board of the Company passed away on May 15, 2008. The Board at its
 meeting held on July 31,2008 has appointed Ms. Subhash Bahl as a
 Director to fill the casual vacancy caused by the demise of Sh. P. N.
 Bahl. Ms. Subhash Bahl shall hold office for the remaining tenure of
 Late Sh. P. N. Bahl.
 
 Ms. Vandana Malik, Director retires by rotation at the ensuing Annual
 General Meeting and being eligible, offer herself for re-appointment.
 
 Subsidiaries
 
 The Company has obtained exemption from the Government of India,
 Ministry of Corporate Affairs from attaching the audited financial
 accounts, auditors report and directors report of its subsidiary
 companies with the Annual Report of the Company pursuant to Section 212
 of the Companies Act. The Company will make available these documents/
 details upon request by any investor of the Company.  Pursuant to
 AS-21, issued by the Institute of Chartered Accountants of India,
 Consolidated Financial Statements presented by the Company includes the
 financial information of its subsidiaries. The following information
 for each Subsidiary is also being disclosed in Annexure  of the
 Directors Report: (a) Capital (b) Reserves (c) Total assets (d) Total
 liabilities (e) Details of investment (except in case of investment in
 subsidiaries) (f) Turnover (g) Profit before taxation (h) Profit after
 taxation (i) Propsed dividend.
 
 Group as defined under Monopolies and Restrictive Trade Practices
 Act, 1969
 
 Pursuant to intimation from Promoter(s) the names of Corporate entities
 comprising the group as defined in the Monopolies and Restrictive
 Trade Practices Act, 1969, have been disclosed in the Annual Report of
 the Company for the purpose of the SEBI (Substantial Acquisition of
 Shares and Takeovers) Regulations, 1997.
 
 Directors Responsibility Statement
 
 Pursuant to the provision of Section 217 (2AA) of the Companies Act,
 1956 as amended, your Directors confirm:
 
 i) that in the preparation of the annual accounts for the financial
 year ended March 31, 2008, the applicable Accounting Standards have
 been followed;
 
 ii) that the Directors have selected such accounting policies and
 applied them consistently and made judgements 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
 profit or loss of the Company for the year under review;
 
 iii) that the Directors have taken proper and sufficient care for
 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 irregularities;
 
 iv) that the Directors have prepared the accounts for the financial
 year ended March 31, 2008 on a going concern basis.
 
 Auditors
 
 The Auditors of the Company M/s G S Ahuja & Associates, Chartered
 Accountants, hold office till the conclusion of the ensuing Annual
 General Meeting and are eligible for re-appointment. They have
 confirmed that their re-appointment as Auditors of the Company would be
 in accordance with the limits specified under Section 224 (1B) of the
 Companies Act, 1956.
 
 Particulars of Employees
 
 In terms of the Provisions of Section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules,1975, as
 amended, the name and other particulars of the employees are required
 to be set out in the Annexure to the Directors Report. However, as per
 the provisons of Section 219(1) (b) (iv) of the said Act, the Annual
 Report excluding the aforesaid information is being sent to all the
 Members of the Company and others entitled to receive the annual report
 of the Company. Members who are interested in obtaining such
 particulars may write to the Company at its Corporate Office.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange and
 Earnings and Outgo
 
 The particulars regarding foreign exchange earnings and expenditure
 appear in Schedule No. 13 in the Notes to the Accounts. Since the
 Company does not own any manufacturing facility, the other particulars
 in the Companies (Disclosures of particulars in the report of the Board
 of Directors) Rules, 1988, are not applicable.
 
 Acknowledgement
 
 Your Directors thank the investors, shareholders, business associates
 and the bankers and lenders viz. IL & FS Limited, YES Bank, HDFC Bank,
 Punjab National Bank, DSP Merrill Lynch, Birla Global, L & T Limited
 and Kotak Mahindra Prime Limited for the continued support in your
 Companys growth. Your Directors place on record their deep
 appreciation of the high motivation and dedication of employees at all
 levels in contributing to the improved performance of your Company
 during the year.
 
 
                                         For and on behalf of the Board
 
 Place: Noida
 Date: July 31,2008                                            Chairman