Sun TV Network

The Directors are pleased to present the Twenty Third Annual Report and
 Audited Financial Accounts of the Company for the financial year ended
 31st March 2008.
 
 FINANCIAL RESULTS
 
 The financial highlights for the financial year ended 31st March 2008
 are given below:
 
                                                     (Rs.in Millions)
 Particulars                                  For the year ended
                                    31st March, 2008    31st March, 2007
 
 Total Income                                 9259.9          7,264.0
 Total Expenditure 
 (Excluding Interest)                         3522.1          3,144.1
 Profit before interest and tax               5737.8          4,119.9
 Interest & Financial Charges                   55.6             30.9
 Profit Before Taxation                       5682.2          4,089.0
 Provision for Taxation                       2012.4          1,400.8
 Profit after tax                             3669.8          2,688.2
 Accumulated Profit, beginning of the year    4901.6          2,348.7
 Transfer in terms of the amalgamation
 From Gemini TV Private Limited (GTPL)         -              396.2
 From Udaya TV Private Limited (UTPL)          -              434.3
 Interim Dividend                                -             (206.7)
 Tax on Interim dividend                         -              (29.0)
 Proposed dividend                            (985.2)          (394.1)
 Tax on Proposed dividend                     (167.4)           (67.0)
 Transfer to General Reserve                  (367.0)          (269.0)
 Profit Carried forward                       7051.8           4901.6
 Earnings Per Share (Face value Rs.5/-)          9.31             6.85
 
 The total Income for the year ended 31st March 2008 registered a
 significant growth of 27 % at Rs.9,259.9 million as against Rs.7,264.0
 million during the previous year ended 31st March 2007. The year on
 year growth in Profit before taxes was even higher at 39 % at Rs.5682.2
 million as against Rs.4,089.0 million in the previous year. In tune
 with the improved profits, after providing for a higher provision
 towards income tax, deferred tax and fringe benefits tax of Rs.2,012.4
 million for the year ended 31st March 2008, the Profit after tax was
 higher by 37 % at Rs.3,669.8 million as against Rs.2,688.2 million in
 the previous year. The sustained growth and consistent higher margins
 are reflective of the Companys continued dominance in broadcasting
 business in the Southern states.
 
 DIVIDEND
 
 The Board of Directors recommends a dividend of 50%, i.e., Rs.2.50 per
 equity share of face value of Rs.5/- on the enhanced Share capital of
 Rs. 1970.4 million post merger and issue of 1:1 bonus shares during the
 financial year under review. The outflow (excl. taxes) is Rs. 985.20
 million as against a total of Rs.600.8 million paid for the previous
 financial year ended 31st March 2007. The Register of Members of the
 Company will remain closed from 14th August 2008 to 27th August 2008
 (both days inclusive) to facilitate payment of the dividend as approved
 at the Annual General Meeting.
 
 SHARE CAPITAL AND RESERVES
 
 During the financial year under review the Share Capital of the Company
 has increased from Rs.688.9 million to Rs.1,970.4 million consequent to
 allotment of 2,96,32,000 equity shares (Face value Rs. 10/-) to the
 Shareholders of Gemini TV (P) Ltd and Udaya TV (P) Ltd in April 07 on
 the amalgamation and issue of 19,70,42,310 equity shares (Face value
 Rs.5/-) as bonus shares in ratio of 1:1 by capitalization of reserves
 in Aug07. The face value of the Equity share was subdivided from
 Rs.10/- to Rs 5/- in Aug 07. The Reserves and Surplus of the Company
 as on 31st March 2008 stood at Rs.12,736.3 million as against
 Rs.11,204.3 million as on 31st March 2007.
 
 BUSINESS OVERVIEW
 
 Your Company continues to be the market leader in the four languages it
 operates its satellite broadcasting channels, viz. Tamil, Telugu,
 Kannada and Malayalam. On April 29th 2007 your Company launched the
 first ever regional language channel for the kids CHUTTI in Tamil
 language which was a runaway hit and continues to hold the kids glued
 to the screen. Chutti channel even out beat the other mainstream
 channels and has been steadily gaining ground.
 
 The financial year 2007 - 08 also saw your Companys Subsidiaries
 launching 20 FM radio stations across the country taking the total
 stations on air as on 31st March 2008 to 23 radio stations. In the
 subsequent period till the date of this Report it has added another 14
 FM radio stations taking the total stations launched by the
 subsidiaries to 37 stations. In addition, your Company has three
 operative FM Radio stations at Chennai, Tirunelveli and Coimbatore
 under the brand 93.5 SURYAN FM which takes the total number of Radio
 Stations on air under the SUN TV Network to 40 FM radio Stations all
 using 93.5 frequency.
 
 The financial year also saw one more new revenue stream being
 operational for the Company thro the airing of your Channels in the
 Direct-to-Home (DTH) platforms of DISH TV; Tata Sky and SUN Direct TV.
 
 DIRECTORSRESPONSIBILITY STATEMENT
 
 As required by Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm that:
 
 a) in the preparation of the annual accounts, the applicable Accounting
 Standards have been followed along with proper explanation relating to
 material departures.
 
 b) the Directors 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 of
 the Company for that period.
 
 c) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 d) the Directors have prepared the annual accounts on a going concern
 basis.
 
 DIRECTORS
 
 In accordance with the provisions of Articles of Association of the
 Company, Mr. S. Sridharan and Mr. M. K. Harinarayanan, independent
 directors of the Company retire at the ensuing Annual General Meeting
 and are being eligible offer themselves for reappointment. Your Board
 recommends their reappointment as Directors of your Company.
 
 CHANGE OF REGISTERED OFFICE OF THE COMPANY:
 
 Your Directors wish to inform you that the Registered Office of the
 Company has been shifted to 4, Norton Road, Mandaveli, Chennai 600 028
 with effect from 15th May 2008.
 
 CORPORATE GOVERNANCE
 
 A Report on Corporate Governance together with Auditors Certificate on
 compliance with the conditions of Corporate Governance as stipulated
 under Clause 49 of the Listing Agreement is provided elsewhere in the
 Annual Report.
 
 PARTICULARS OF EMPLOYEES
 
 Sun TV Network Limited had 1337 employees as of March 31, 2008
 (previous year 1316). In accordance with the provisions of Section
 217(2A) of the Companies Act 1956 and the rules framed there under, the
 required information is annexed and forms part of this Report. However,
 as per the provisions of Section 219(1) (b) (iv) of the Companies Act,
 1956, the Directors Report is being sent to all the Shareholders of the
 Company excluding the said annexure. Any shareholder interested in
 obtaining a copy of the said annexure may write to the Company
 Secretary at the Registered Office of the Company.
 
 AUDITORS
 
 M/s. S. R. Batliboi & Associates, Chartered Accountants, the Statutory
 Auditors of the Company retire at the conclusion of this Annual General
 Meeting of the Company. Your Board recommends their re-appointment as
 the Statutory Auditors of the Company.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Your Company has donated a sum of Rs. 19.6 millions to Sun Foundation,
 a Charitable trust to support the various social welfare activities
 carried out by the trust.
 
 SUBSIDIARY COMPANIES
 
 The Audited Financial Statements of the two subsidiaries namely Kal
 Radio Limited and South Asia FM Limited and also the Statement of the
 Holding Companys interest in the subsidiaries as specified in
 sub-section (3) of Section 212 of the Companies Act 1956 are annexed
 hereto and form part of this Annual Report.
 
 Kal Radio Limited owns 18 FM radio licenses in Southern India of which
 fourteen (14) stations were on air as on 31st March 2008 and the
 balance four (4) Stations went on air during the subsequent period upto
 the date of this Report, KAL Radio reported a total income of Rs.70.80
 million and posted a net loss of Rs.168.28 million for the year ended
 31st March 2008 as against a total income of Rs.6.06 million and a net
 loss of Rs.105.11 million respectively in the previous year.
 
 South Asia FM Limited owns 23 FM radio licenses all over India (except
 the Southern states of Tamilnadu, Karnataka, Andhra Pradesh and Kerala)
 of which nine (9) stations were on air as on 31st March 2008 and
 another ten (10) Stations went on air during the subsequent period upto
 the date of this Report. The remaining four stations are expected to go
 on air in due course.  South Asia FM reported a total income of
 Rs.73.18 million and posted a net loss of Rs.382.55 million for the
 year ended 31st March 2008 as against a total income of Rs.23.01
 million and a net loss of Rs. 142.04 million respectively in the
 previous year.
 
 In August 2007, Sun TV Network Limited, through its subsidiary South
 Asia FM Limited (SAFL) had entered into a strategic alliance with Red
 FM to further its FM Radio broadcasting business in the North, West and
 East Indian markets and in January 2008 SAFL has entered into an
 agreement with South Asia Multimedia Technologies Limited, Mauritius
 (SAMTL) for a 6.98 % stake in SAFL.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 As required by Accounting Standard-AS 21 on Consolidated Financial
 Statements issued by The Institute of Chartered Accountants of India,
 the Audited Consolidated Financial Statements of the Company are
 attached. The Audited Consolidated Financial Statements also account
 for the minority interest of your Companys subsidiary South Asia FM
 Limited pursuant to the strategic alliance with Red FM.
 
 CEO/CFO CERTIFICATION
 
 The Chairman and Managing Director and the Chief Financial Officer have
 submitted a certificate to the Board regarding the financial statements
 and other matters as required under clause 49(V) of the listing
 agreement.
 
 PUBLIC DEPOSITS
 
 Your Company has not accepted any Deposits from the public in terms of
 section 58A of the Companies Act, 1956duringthefinancialyearended 31st
 March 2008.
 
 INFORMATION AS REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT,
 1956 READ WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF
 BOARD OF DIRECTORS) RULE, 1988
 
 (A) CONSERVATION OF ENERGY
 
 The Company is engaged in Satellite Television Broadcasting operations
 and the information, as intended under Section 217(1)(e) does not
 arise.
 
 (B) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
 
 The Company uses state of art technology in broadcasting its
 programmes. The outdated technologies are constantly identified and
 updated with latest innovations.
 
 (C) FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Foreign Exchange Earnings : Rs. 385.3 Million
 
 (Previous year Rs. 344.2 Million)
 
 Foreign Exchange Outgo : Rs. 1428 Million
 
 (Previous year Rs. 89.5 Million)
 
 ACKNOWLEDGEMENT
 
 Your Directors take this opportunity to place on record their
 appreciation of the dedication and commitment of employees at all
 levels in maintaining the sustained growth of your Company and remain
 in the forefront of media and entertainment business. Your Directors
 thank and express their gratitude for the support and co-operation
 received from the Central and State Governments mainly the Ministry of
 Information and Broadcasting and the Department of Telecommunication
 and other stakeholders including viewers, producers, vendors, financial
 institutions, banks, investors, service providers as well as regulatory
 and governmental authorities.
 
                                            On behalf of the Board
 
 Place : Chennai                               Kalanithi Maran
 Date  : 30th June 2008                  Chairman & Managing Director