Zee Entertainment Enterprises

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) Advertisement canvassing agent for other television channels;
 
 c) Sale of programs including films and program feeds mainly to its
 subsidiaries for broadcasting on their satellite television channels
 all over the world;
 
 d) Production and Distribution of Films.
 
 
 1.  Prior Year Comparatives
 
 Previous years figures are regrouped, rearranged, or recast wherever
 necessary to confirm to this year’s classification. Figures in brackets
 pertain to previous year.
 
 2.  a) Program/film rights for broadcasting are intangible assets as
 defined in AS–26 but considered and shown under current assets as are
 used for broadcasting in the ordinary course of business.
 
 b) In Schedule 13, Operational Cost includes Cost of Program/ Film
 rights amortized/ impaired, sold etc. The Company has impaired program/
 film rights of Rs./Thousand Nil (8,400) during the year.
 
 
 3.  Immovable Property
 
 a) The Collector of Hyderabad, Andhra Pradesh, had resumed possession
 of the freehold land (included under Schedule 6 - “Investments”)
 admeasuring 17,639.64 sq. meters, bought from Padmalaya Telefilms
 Limited (PTL), registered in the name of the Company and having book
 value of Rs./Thousand 573,456. The action of the Collector has been set
 aside by the appellate authorities and the possession of the land is
 restored to the Company during the year.
 
 b) In terms of final settlement agreement entered with PTL during the
 year, the company has given up its claim on the second piece of land
 admeasuring 2700 sq. meters having book value of Rs./Thousand 25,806,
 accordingly value of investments has been written off and liability
 provided is written back as an exceptional item.
 
 4.  Disclosures:
 
 a) The Company has been deploying its surplus funds as short-term
 demand loans/inter corporate deposits mainly to related parties. The
 parties are regular in repayment of principal and interest, hence are
 considered good.
 
 c) Advances include Rs./Thousand 29,249 (126,167) due from
 subsidiaries.
 
 d) Balances with Non Scheduled Bank as at March 31, 2009 with Standard
 Chartered Bank (Mauritius) is Rs./Thousand 352 (1,374). Maximum Balance
 during the year is Rs./Thousand 1,374 (3,485).
 
 h) Employee Stock Option Plan (ESOP)
 
 Zee Network Employees Welfare Trust holds 5,000 (5,000) Equity Shares
 of Re. 1/- each of the Company.
 
 i) Micro, Small and Medium Enterprises:
 
 The Company has no dues to Micro and Small enterprises during the year
 ended March 31, 2009, on the basis of information provided by the
 parties and available on record.
 
 j) Capital work in progress includes Capital Advances Rs./Thousand
 183,250 (142,427).
 
 k) Estimated amount of contracts remaining to be executed on capital
 account, not provided for (net of advances) is Rs./Thousand 266,181
 (312,662).
 
 l) Sundry Creditors for expenses and other liabilities under Current
 Liabilities include cheques overdrawn Rs./Thousand 11,844 (82,847).
 
 m) Dividend Rs./Thousand 1,315 (1,174) unclaimed for the period of more
 than seven years is transferred to Investor’s Education and Protection
 Fund.
 
 n) During the year, expenses of Rs./Thousand 63,160 (76,980), shared by
 other related party, are netted off in relevant heads of expenses in
 Profit and Loss account.
 
 5.  Employee Benefits
 
 Notes:
 
 (a) Amounts recognized as an expense and included in the Schedule 14
 “Personnel Cost” are gratuity Rs./Thousand 9,823 (7,278) and leave
 encashment Rs./Thousand 22,137 (16,964).
 
 (b) The estimates of future salary increases considered in the
 actuarial valuation take account of inflation, seniority, promotion and
 other relevant factors, such as supply and demand in the employment
 market.
 
 B) Defined contribution plan:
 
 “Contribution to Provident and other funds” is recognized as an expense
 in Schedule 14 “Personnel Cost” of the Profit and Loss Account
 
 7 Contingent Liabilities not provided for
 
 (Rs./ Thousand)
 
 Particulars                                    2009     2008
 
 a) Corporate Guarantees
 
 - For Subsidaries to the extent of loans 
 availed/outstanding                       1,565,100    1,204,500  
 Rs./Thousand 1,001,338 (519,340)
 
 - For other related parties, loans o
 utstanding Rs./Thousand                   4,526,760    5,362,700 
 3,949,415 (4,654,185)
 
 b) Bank guarantees outstanding                1,810        3,028
 
 c) Claims against the company not 
 acknowledged as debts                        132,743     348,334
 
 d) Disputed Direct Taxes                     133,517      46,585
 
 e) Letters of credit (net of liability 
 provided)                                       -          7,969
 
 f) Legal cases against the Company     Unascertainable Unascertainable
 
 6.  Taxation
 
 a) The Company’s claims for certain deductions under Chapter VIA of the
 Income Tax Act, 1961 for Assessment years 1993-1994 to 1999-2000 is
 allowed by second appellate authority and effect of those appeal orders
 resulted in excess provision for tax of Rs./ Thousand 573,794 which is
 accounted for during the year. Interest of Rs./Thousand 204,053
 received on these refunds was however credited to the Profit and Loss
 account in previous financial year.
 
 Further, during the year, the Company has received income tax refund of
 Rs./Thousand 524,934 relating to Assessment year 2006-2007, pending
 final tax assessment, interest income of Rs./Thousand 47,904 and excess
 tax provision are not accounted, and refund received is adjusted
 against provision for tax.
 
 7.  Leases:
 
 (a) The Company leases office, residential facilities and plant and
 machinery (including equipments) etc. under cancellable/non-cancellable
 agreements that are renewable on a periodic basis at the option of both
 the lessee and the lessor. The initial tenure of the lease generally is
 for 11 months to 60 months.
 
 (b) In respect of assets given under operating lease.
 
 (i) The Company has given part of building under cancelable operating
 lease agreement. The initial term of the lease is for 36 months.
 
 (ii) The rental revenue for the year is Rs./Thousand 64,119 (19,458).
 
 8.  Related Party Transactions
 
 (i) List of Parties where control exists
 
 Subsidiary Companies
 
 a) Wholly Owned
 
 Apac Media Ventures Limited; Asia Business Broadcasting Mauritius
 Limited; Asia Today Limited; Asia TV Limited; Expand Fast Holding
 (Singapore) Pte. Limited; Zee CIS Holding LLC; Pan Asia Infrastructure
 Limited (ceased w.e.f. January 19, 2009); Zee Multimedia (Maurice)
 Limited; Zee Multimedia Worldwide Limited, Mauritius; Zee Multimedia
 Worldwide Limited (BVI); Zee Sports Americas Limited; 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 Holding Limited*; Zee
 Entertainment Studios BVI*; ZES Mauritius Limited*; ZES International
 Limited*; Zee Motion Pictures Private Limited*.  * incorporated during
 the year.
 
 b) Others - Direct
 
 ETC Networks Limited; Taj Television India Private Limited; Zee Turner
 Limited.
 
 c) Other - Indirect
 
 Taj Television Limited, Mauritius
 
 (ii) Associates
 
 Aplab Limited (extent of holding 26.42%)
 
 Broadcast South Asia Limited (extent of holding 48.44%) (Ceased to be
 w.e.f. May 8, 2008)
 
 (iii) Other Related parties with whom transactions have taken place
 during the year and balance outstanding as on the last day of the year.
 
 25 FPS Media Private Limited; Asian Sky Shop Limited; Asian Satellite
 Broadcasting Private Limited; Briggs Trading Company Private Limited;
 Buddha Films Limited; Churu Trading Company Private Limited; Credensys
 Software Technologies Limited; Digital Media Convergence 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-Cool Gaming Solution Private Limited; Essel Agro Limited; Essel
 Corporate Services Private Limited; Essel Sports Private Limited; Essel
 Infraprojects Limited; Essel International Limited; Essel Shyam
 Communication Private Limited; Essel Shyam Technologies Limited;
 Integrated Subscribers Management Limited; Ganjam Trading Company
 Private Limited; Intrex Trade Exchange Limited; Jay Properties Private
 Limited; Jayneer Capital Private Limited; New Media Broadcasting
 Private Limited; Pan India Network Infravest Private Limited; Pan India
 Network Private Limited; Prajatma Trading Company Private Limited;
 Premier Finance and Trading Co.  Limited; Rama Associates Limited; Real
 Media FZLLC, Taleem Research Foundation; Wire and Wireless (India)
 Limited; Zee News Limited.
 
 Directors/Key Management Personnel
 
 Mr. Punit Goenka
 
 Disclosure in respect of material other Related Parties which account
 for 10% or more of the transactions during the year:
 
 a) Fixed asset purchased include from Aplab Limited Rs./Thousand Nil
 (497).
 
 b) Loans, Advances and Deposits given include to Zee Sports Limited
 Rs./Thousand Nil (20,115); Briggs Trading Co. Private Limited
 Rs./Thousand Nil (1,410,000); Churu Trading Co. Private Limited
 Rs./Thousand 3,770,500 (2,186,000); Ganjam Trading Co. Private Limited
 Rs./Thousand Nil (1,492,522); Prajatma Trading Co. Private Limited
 Rs./Thousand 2,170,000 (1,605,000); Dish TV India Limited Rs./Thousand
 2,430,000 (3,177,000); Wire and Wireless (India) Limited Rs./Thousand
 1,550,000 (1,070,000); Premier Finance and Trading Co. Limited
 Rs./Thousand 1,605,000 (Nil).
 
 c) Loans, Advances and Deposits repayment received includes Briggs
 Trading Co. Private Limited Rs./Thousand Nil (1,410,000); Churu Trading
 Co. Private Limited Rs./Thousand 3,770,500 (2,186,000); Ganjam Trading
 Co. Private Limited Rs./Thousand Nil (1,492,522); Prajatma Trading Co.
 Private Limited Rs./Thousand 2,170,000 (1,605,000); Dish TV India
 Limited Rs./Thousand Nil (2,900,000); Wire and Wireless India Limited
 Rs./Thousand 70,000 (Nil); Premier Finance and Trading Co. Limited
 Rs./Thousand 1,605,000 (Nil).
 
 d) Loans, Advances and Deposits balances outstanding at year end
 include Zee Sports Limited Rs./Thousand 29,249 (31,704); Zee Turner
 Limited Rs./Thousand Nil (94,463); Dish TV India Limited Rs./Thousand
 2,430,000 (7,81,315); Wire and Wireless (India) Limited Rs./Thousand
 23,00,817 (820,817).
 
 e) Sundry Creditors balances include Pending Remittances to Principals
 pending to Asia Today Limited Rs./Thousand 869,628 (1,688,837); Amounts
 due for Purchase of Programs, Goods and Services to Asia Today Limited
 Rs./Thousand 12,448 (88,157); ETC Networks Limited Rs./Thousand 41,085
 (48,847); Dish TV India Limited Rs./Thousand Nil (98,929); Diligent
 Media Corporation Limited Rs./Thousand Nil (15,118); Wire and Wireless
 (India) Limited Rs./Thousand 92,984 (Nil); Essel Sports Private Limited
 Rs./Thousand 70,044 (Nil).
 
 f) Sales, Services and Recoveries (Net) include to Asia Today Limited
 Rs./Thousand 929,083 (785,724); Dish TV India Limited Rs./Thousand
 4,475 (9,957); Zee News Limited Rs./Thousand 245,694 (66,260); Real
 Media FZ LLC. Rs./Thousand 5,958 (9,461); Subscription Revenue from
 Asia Today Limited Rs./Thousand Nil (126,610); Advertisement Revenue
 from Asia Sky Shop Rs./Thousand 12,085 (Nil); Dish TV India Limited
 Rs./Thousand 83,427 (166,694); ETC Networks Limited Rs./Thousand 6,186
 (Nil); Commission - Space Selling from Asia Today Limited Rs./Thousand
 65,360 (29,144); Zee TV USA Inc. Rs./Thousand Nil (37,436); Zee News
 Limited Rs./ Thousand 268,367 (271,679).
 
 g) Other income include Dividend Income from ETC Networks Limited
 Rs./Thousand 12,224 (7,679); Aplab Limited Rs./Thousand 3,303 (3,303);
 Essel Propack Limited Rs./Thousand 2,186 (Nil); Interest income from
 Briggs Trading Co. Private Limited Rs./Thousand Nil (6,208); Churu
 Trading Co. Private Limited Rs./Thousand 258,147 (120,272); Ganjam
 Trading Co. Private Limited Rs./Thousand Nil (144,805); Prajatma
 Trading Co.  Private Limited Rs./Thousand 256,625 (136,071); Dish TV
 India Limited Rs./Thousand 68,917 (198,237); Premier Finance & Trading
 Co. Private Limited. Rs./Thousand 173,521 (Nil); Wire and Wireless
 (India) Limited Rs./Thousand 127,877 (Nil); Miscellaneous/Rent income
 from Zee Turner Limited Rs./Thousand 14,330 (148); Asia Today Limited
 Rs./Thousand 39,829 (Nil); ETC Networks Limited Rs./Thousand 2,083(
 Nil); Asian Sky Shop Limited Rs./Thousand Nil (316); Diligent Media
 Corporation Limited Rs./Thousand 2,081 (462); Pan India Network
 Infravest Private Limited Rs./Thousand Nil (669); Dish TV India Limited
 Rs./Thousand 25,132 (Nil); Zee News Limited Rs./Thousand 20,441 (Nil);
 Digital Media Convergence Limited Rs./Thousand Nil (1,349); Wire and
 Wireless (India) Limited Rs./Thousand 1,335 (Nil)
 
 h) Purchase of Programs, Goods and Services from Asia Today Limited
 Rs./Thousand 59,212 (46,175); Taj TV Limited – Mauritius Rs./Thousand
 3,529 (8,095); Dish TV India Limited Rs./Thousand 20,886 (13,660);
 Essel Corporate Services Private Limited Rs./Thousand 134,872 (44,315);
 Essel Sports Private Limited Rs./Thousand 262,603 (59,500); Wire and
 Wireless (India) Limited Rs./Thousand 250,321 (Nil).; Commission paid
 to Zee Turner Limited Rs./Thousand 145,992 (120,342); Balances written
 off 25 FPS Media Private Limited Rs./Thousand 13,665 (Nil).
 
 i) Corporate guarantees include in respect Asia Today Limited
 Rs./Thousand 1,565,100 (1,204,500); Dish TV India Limited Rs./Thousand
 3,305,760 (1,877,700); Wire and Wireless India Limited Rs./Thousand
 921,000 (2,835,000).
 
 Notes:
 
 i) Details of Remuneration to Whole-time Director is disclosed in Note
 5 (e).
 
 ii) Sharing of expenses has been disclosed in Note 5 (n).
 
 13.  Additional Information required to be given pursuant to Part II of
 Schedule VI to the Companies Act, 1956 is as follows:
 
 The Company is 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 the
 installed capacity is not quantifiable.
 
 9.  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.