BACKGROUND
Zee entertainment enterprises Limited (ZeeL or the Company) is
incorporated in the state of Maharashtra, India. The Company has been
mainly in the following businesses during the year:
a) Broadcasting of satellite Television Channels uplinked from India;
b) space selling agent for other television channels;
c) sale of Television programs, movies and rights including movies and
program feeds;
d) production and distribution of Movies.
1. Prior Year Comparatives
previous years figures are regrouped, rearranged, or recast wherever
considered necessary to conform to this years classification. Current
years figures are not comparable with that of previous year due to the
amalgamation/ scheme of arrangement in the current and previous year.
Figures in brackets pertain to previous year.
2. a) programs , Movie rights and sports rights and movie rights are
intangible assets as defined in as – 26 but these are acquired and used
for its broadcasting business hence considered and included in
Operational cost and Current assets -Inventories.
b) In schedule 13, Operational Cost under acquisition of programs,
movies and rights includes commissioned ,acquisition of programs, Movie
rights and sports rights and amortized / impaired, sold etc. The
Company has impaired program,Movie rights and sports rights Rs. /Thousand
nil (69,881) during the year.
3. Restructuring
A) Amalgamation of ZES Holdings Limited (ZES) and Zee Multimedia
Worldwide Limited (ZMWL) with the Company.
i) The scheme of amalgamation of Zes and ZMWL both foreign companies
with the Company u/s 391 to 394 of the Companies act 1956 is approved
by the honble high Court of Mumbai on June 10, 2011 and upon filing
the said order with the registrar of Companies, Maharashtra on June 20,
2011 and at the respective judiciaries of Zes and ZMWL, the said scheme
of amalgamation became effective on and from that date.
ii) The scheme has been given effect in these financial statements and
in pursuant to the said scheme:
a) The said approved scheme of amalgamation has been given effect in
these financial statements as per the pooling of interest method as
prescribed by accounting standard 14 accounting of amalgamation.
accordingly, all the assets and liabilities of Transferor Companies
i.e. Zes and ZMWL are vested and transferred to the company at
respective book values on appointed date i.e. February 1, 2011.
b) no shares of the Company shall be issued in consideration of the
equity shares and preference shares of the Transferor Companies as the
entire stated equity share capital has been held by the Company and the
entire stated preference share capital is held interse by ZMWL,
amalgamating Company.
B) Amalgamation of ZES Mauritius Limited (ZES Mauritius) and ZES
Entertainment Studios Limited (ZES Ent) with ZES Holdings Limited (ZES)
their 100% holding company.
Zes Mauritius Limited (Zes Mauritius) and Zes entertainment studios
Limited (Zes ent) both Mauritius registered companies amalgamated with
their Mauritius registered holding company Zes on March 18, 2011 and
March 31, 2011 respectively as per the confirmation of registrar of
Companies, republic of Mauritius, and the financials of these
subsidiaries consolidated with Zes for the period February 1, 2011 to
March 31, 2011 and accounted for in these financial statements, as
transactions between the appointed date and effective date.
accordingly, the difference of Rs./Thousand 107 between assets and
liabilities transferred is adjusted to General reserve.
C) Scheme of Amalgamation and Arrangement between erstwhile ETC
Networks Limited, Zee Learn Limited and the Company
a) The Composite scheme of amalgamation and arrangement ( the
Composite scheme) between erstwhile eTC networks Limited (eTC), Zee
Learn Limited (ZLL) and the Company was approved by the honble high
Court of Mumbai and upon filing of the certified copy of the said order
with the registrar of Companies, Mumbai, the said Composite scheme
became effective on august 30, 2010. pursuant to the Composite scheme,
eTC had merged with the Company on March 31, 2010 and upon such merger,
the education business undertaking stand demerged from the Company and
vested in ZLL at book value on april 1, 2010 and has been given effect
in these financial statements.
4. Bonus Shares
at the annual General Meeting held on October 29, 2010, the
shareholders approved the issue of Bonus shares in the proportion of
one new equity share of Rs.1/- each for every equity share of Rs.1/- each
held. accordingly, a sum of Rs./Thousand 489,038 has been capitalized by
utilization of Capital redemption reserve and securities premium ,and
transferred to share Capital account on allotment of fully paid bonus
shares to the holders of the equity shares on the record date november
12, 2010.
5. Secured Loans
a) Debentures
nil (500) secured redeemable non-Convertible debentures of Rs. 1,000,000
each fully paid up (issued by erstwhile eTC) and vested with the
Company upon merger of eTC with Company are redeemable at par in 4
equal installments with the earliest redemption being on January 6,
2012 and last being on January 6 ,2015. secured by way of first charge
on freehold land, all fixed assets and current assets including certain
fixed deposits, and first charge on escrow account for receivables of
the erstwhile eTC. The debentures are to be further secured by
assignment of all the benefits under the agreement for operations of
the school.
These debentures and related liabilities are transferred to Zee Learn
Limited as at april 1, 2010 as per the Composite scheme of arrangement
(refer note 3 above)
b) Term Loan from Bank
secured by way of first charge on all the fixed assets and current
assets of erstwhile digital Media Convergence Limited subsidiary of
erstwhile eTC networks Limited.
c) Working Capital Loan from Bank
secured by way of first charge on all the fixed assets and current
assets of erstwhile company digital Media Convergence Limited,
subsidiary of erstwhile eTC networks Limited.
d) Vehicle Loans
secured by hypothecation of vehicles.
6. Disclosures:
a) The Company has been deploying its surplus funds as short-term
demand loans / inter corporate deposits, the borrowers are regular in
repayment of principal and interest, hence are considered good.
b) sales includes Rs./Thousand 700,000(nil) as consideration for
pre-matured termination of sporting events rights.
c) prior period expenses represents program Cost of Rs./Thousand nil
(10,392).
d) deposits includes Rs./Thousand nil (65,745) due from company in which
director is interested.
e) Capital work in progress includes Capital advances Rs. / Thousand
390,742 (1,086,506). enforceable agreements are yet to be executed for
advances of Rs./Thousand 354,000 (239,370) for purchase of properties.
f) estimated amount of contracts remaining to be executed on capital
account, not provided for (net of advances) is Rs./ Thousand 91,099
(247,489).
g) sundry Creditors for expenses and other liabilities under Current
Liabilities include cheques overdrawn Rs./Thousand 163,482 (128,038)
h) dividend Rs. /Thousand 937 (1,213) unclaimed for the period more than
seven years is transferred to Investors education and protection Fund
during the year.
i) exceptional item of Rs./Thousand 196,797 (nil) represents profit on
sale of long term investments (net)
j) erstwhile eTC networks Limited (eTC - since merged) had taken over
running business of entertainment Television network private Limited
during the year 1999-2000 along with the benefits of contracts,
agreement and approvals for broadcasting of Television Channels. some
of the agreements and approvals under which business is carried on are
yet to be transferred / obtained in the name of erstwhile eTC Company.
iii) Commission payable to non-executive Independent directors of
Rs./Thousand 12,750 (10,800) based on profits for the year ended March
31, 2011.
iv) Foreign subsidiary has paid remuneration (salaries and allowances)
of Rs. /Thousand 3,559 (3,803) to a non- executive director. however, no
remuneration is paid to him by the Company.
n) Foreign Exchange Difference
i) Foreign exchange loss (net) of Rs./Thousand 18,777 (29,548) including
on forward contracts and cross currency swap on settlement or
realignment of foreign exchange has been adjusted in respective heads
in the profit and Loss account.
o) Employee Stock Option Plan (ESOP 2009)
The Company has instituted an employee stock Option plan (esOp 2009) as
approved by the Board of directors and shareholders of the Company in
2009 for issuance of stock options convertible in equity shares not
exceeding in the aggregate 5% of the issued and paid up capital of the
Company as on March 31, 2009 i.e. up to 21,700,355 equity shares of re
1 each to the employees of the Company as well as that of its
subsidiaries and also to non- executive directors including Independent
directors of the Company at the market price determined as per the seBI
(esOs) Guidelines, 1999. The said scheme is administered by the
remuneration Committee of the Board. during the pervious year, the
Company had granted 4,340,000 (excluding 4,340,000 bonus shares) stock
options to eligible employees and directors at an exercise price of Rs.
239.80 (Rs. 119.90 ex bonus) per share. The options granted under the
scheme shall vest not less than one year and not more than five years
from the date of grant of options. The options granted would vest in
the ratio of 50:35:15 at the expiry of one, two and three years from
the date of grant and once vested, these would be exercisable at any
time within a period of four years and the equity shares arising on
exercise of options shall not be subject to any lock in.
The options were granted to the employees at an exercise price, being
the latest market price as per the seBI (esOs) Guideline 1999. In view
of this, there being no intrinsic value on the date of the grant (being
the excess of market price of share under the scheme over the exercise
price of the option), the Company is not required to account the
accounting value of options as per the seBI guidelines.
p) Micro, Small and Medium Enterprises:
The Company has no dues to Micro, small and Medium enterprises during
the year ended March 31, 2011, on the basis of information provided by
the parties and available on record.
q) On reconciliation, the shares of essel propack Limited held in
investments-Quoted-non Trade are rectified during the year.
8. Contingent Liabilities not provided for
(Rs./Thousand)
Particulars 2011 2010
a) Corporate Guarantees
- For subsidiaries to the extent of loans
availed/ outstanding Rs./Thousand 2,439,180 5,008,850
966,638 (nil)
- For other related parties, loans
outstanding Rs. /Thousand 3,010,615 4,114,302 4,077,030
(3,733,360)
b) Bank guarantees outstanding 58,420 75
c) Claims against the company not
acknowledged as debts 751,319 640,278
d) disputed direct Taxes 1,749,091 131,504
e) disputed Indirect Tax 474,538 474,538
f) Letters of credit (net of liability
provided) 13,418 40,817
g) Legal cases against the company Unascertainable Unascertainable
11. Related Party transactions
(i) List of Parties where control exists Subsidiary Companies
a) Wholly Owned
apac Media Ventures Limited; asia Business Broadcasting (Mauritius)
Limited(amalgamated as on March 31, 2011); asia Today Limited; asia TV
Limited; expand Fast holding (singapore) pte. Limited; Ta j Television
India private Limited; OOO Zee CIs LLC; OOO Zee CIs Capital holding
LLC; Zee Multimedia (Maurice) Limited; Zee Multimedia Worldwide
Limited; Mauritius; Zee Multimedia Worldwide Limited (BVI) (amalgamated
w.e.f February 1, 2011); Zee sports americas Limited (Wound up during
the year); Zee sports International Limited; Zee sports Limited; Zee
Technologies (Guangzhou) Limited; Zee Telefilms Middle east FZLLC; Zee
TV south africa (proprietary) Limited; Zee TV Usa Inc.; Zes holdings
Limited (amalgamated w.e.f. February 1, 2011); Zee entertainment
studios BVI (amalgamted w.e.f. March 31, 2011) ; Zes Mauritius Limited
(amagamated w.e.f. March 18,2011); Zes International Limited
(dissolved w.e.f.June 29, 2010); Zee Motion pictures private Limited
(divested w.e.f. January 31, 2011).
b) Others- direct
Zee Turner Limited; ITM digital private Limited (w.e.f. september 10,
2010), India Webportal private Limited (w.e.f. december 11, 2010)
c) Other - Indirect
Taj TV Limited, Mauritius
(ii) Associates
aplab Limited (extent of holding 26.42 %)
(iii) Other Related parties with whom transactions have taken place
during the year and balance outstanding as on the last day of the year.
Asian sky shop Limited, agrani Convergence Limited; Churu Trading
Company private Limited; Continental drug Company private Limited;
Cyquator Media services private Limited; dakshin Media Gaming solutions
private Limited; dish TV India Limited; diligent Media Corporation
Limited ; essel propack Limited; e-City entertainment (India) private
Limited; e-City retail private Limited; e- City property Management
services private Limited; e-Cool Gaming solution private Limited; essel
Corporate resources private Limited; essel sports private Limited;
essel Infraprojects Limited; essel International Limited; essel shyam
Communication private Limited; Fun Multiplex private Limited;
Integrated subscribers Management Limited; ITX Trade exchange Limited;
Jay properties private Limited; Jayneer Capital private Limited; new
Media Broadcasting private Limited; pan India network Infravest private
Limited; pan India paryatan private Limited ;prajatma Trading Company
private Limited; premier Finance and Trading Company Limited; procall
private Limited; rama associates Limited; real Media FZLLC, siti energy
Limited ;smart Wireless private Limited; TaLeeM research Foundation;
Wire and Wireless (India) Limited; Zee Learn Limited; Zee news Limited;
Directors / Key Management Personnel
Mr. subhash Chandra, Mr. punit Goenka, Mr. ashok Kurien.
DISCLOSURE IN RESPECT OF MATERIAL RELATED PARTIES WHICH ACCOUNT FOR 10%
OR MORE OF THE TRANSACTIONS DURING THE YEAR:
a) Loans, advances and deposits given include to Churu Trading Company
private Limited Rs./Thousand nil (2,040,000); prajatma Trading Company
private Limited Rs./Thousand nil (21,50,000);premier Finance and Trading
Company Limited Rs./Thousand nil (2,271,000); Taj Television India
private Limited Rs./Thousand 138,846 (nil); Zee news Limited Rs./Thousand
21,346 (nil); Wire and Wireless (India) Limited Rs./Thousand 14,123
(nil).
b) Loans, advances and deposits repayment received Churu Trading
Company private Limited Rs./Thousand nil (2,040,000); prajatma Trading
Company private Limited Rs./Thousand nil (2,150,000); dish TV India
Limited Rs./ Thousand nil (24,30,000); Wire and Wireless (India) Limited
Rs./Thousand 112,736 (2,450,000); premier Finance and Trading Company
Limited Rs./Thousand nil (2,271,000); TaLeeM research Foundation
Rs./Thousand 199,182 (nil); Zee Turner Limited Rs./Thousand 820,128 (nil);
Jay properties private Limited Rs./Thousand 65,745 (nil).
c) Loans, advances and deposits balances outstanding at year end
include Zee sports Limited Rs./Thousand 29,249 (29,249); Zee Turner
Limited Rs./Thousand 927,492 (1,747,620); Taj Tv Limited (Mauritius)
Rs./Thousand 177,366 (nil); Wire and Wireless (India) Limited Rs./Thousand
nil (98,613); Jay properties private Limited Rs./Thousand nil (65,744);
TaLeeM research Foundation Rs./Thousand nil (199,182); Zee news Limited
Rs./Thousand 21,346 (nil); Cyquator Media services private Limited
Rs./Thousand 35,985 (nil)
d) Capital advances outstanding at the year end include TaLeeM research
Foundation Rs./Thousand nil (750,000).
e) sundry Creditors balances include Broadcasters/ principals
remittances pending to asia Today Limited Rs./Thousand 818,048 (759,327);
amounts due for purchase of programs, Goods and services to asia Today
Limited Rs./Thousand 67,796 (11,654); Ta j Television India private
Limited Rs./Thousand 109,051 (8,232); Wire and Wireless (India) Limited
Rs./Thousand 56,670 (67,177); essel sports private Limited Rs./Thousand
13,624 (13,624); Zee news Limited Rs./ Thousand nil (520,271), real Media
FZLLC Rs./Thousand 15,588 (nil).
f) sales, services and recoveries (net) include to asia Today Limited
Rs./Thousand 1,242,509 (886,916); Zee news Limited Rs./Thousand 28,280
(57,680);subscription income from dish TV India Limited Rs./Thousand
360,000 (240,000) advertisement Income from dish TV India Limited
Rs./Thousand 67,570 (96,409); Commission received from asia Today Limited
Rs./Thousand 114,504 (73,662);
g) sundry debtors balances include asia Today Limited Rs./Thousand
758,971 (665,345); dish TV India Limited Rs./ Thousand 137,207 (95,257);
ITX Trade exchange Limited Rs./Thousand nil (29,854).
h) Other income includes dividend received from aplab Limited
Rs./Thousand nil (1,321); essel propack Limited Rs./ Thousand 729 (546);
Interest received includes Churu Trading Company private Limited
Rs./Thousand nil (219,469); prajatma Trading Company private Limited
Rs./Thousand nil (210,647); dish TV India Limited Rs./Thousand nil
(71,901); premier Finance & Trading Company private Limited. Rs./Thousand
nil (186,326); Wire and Wireless (India) Limited Rs./Thousand 12,826
(127,098); Miscellaneous income includes rent income received from Zee
Turner Limited Rs./Thousand 10,627 (10,627); diligent Media Corporation
Limited Rs./Thousand 2,203 (2,203); dish TV India Limited Rs./Thousand
25,132 (25,132); Zee news Limited Rs./Thousand 21,785 (20,441); Wire and
Wireless (India) Limited Rs./ Thousand 4,209 (4,209); Balances written
back of asia Today Limited Rs./Thousand nil (12,624), Zee Turner Limited
Rs./Thousand 195 (nil), agrani Convergence Limited Rs./Thousand 2,446 (nil)
i) purchase of programs, Goods and services from asia Today Limited
Rs./Thousand 54,718 (67,661); Taj TV Limited –Mauritius Rs./Thousand
2,088,858 (30,861); essel Corporate resources private Limited
Rs./Thousand 173,764 (176,292); essel sports private Limited Rs./Thousand
nil (12,807); Wire and Wireless (India) Limited Rs./Thousand 183,456
(160,372).; dish Tv Limited Rs./Thousand 46,239 (nil) Commission paid to
Zee Turner Limited Rs./Thousand 260,568 (140,620); Ta j Television India
private Limited Rs./Thousand 109,893 (nil).
j) Corporate guarantees include in respect asia Today Limited
Rs./Thousand nil (5,008,850); Ta j TV Limited, Mauritius Rs./Thousand
2,439,180 (nil) dish TV India Limited Rs./Thousand 3,898,802 (3,223,530);
Wire and Wireless (India) Limited Rs./Thousand 188,000 (541,000).
Note:
Details of remuneration to directors are disclosed in note 6 (l).
14. additional Information required to be given pursuant to part II of
schedule VI to the Companies act 1956 is as follows:
The Company is mainly in the business of producing television programs
and is not subject to any license hence licensed capacity is not given.
Further the nature of business of the company is such that quantitative
information of purchase, sale and stocks are not applicable.
16. Segmental Reporting
The Financial statements of the Company contain both the consolidated
financial statements as well as the separate financial statements of
the parent company. hence, the company has presented the segmental
information on the basis of the consolidated financial statements as
permitted by accounting standard – 17. |