SC_COVER.indd 1 7/12/12 7:06 PM Contents

Reimagining Radio 01 Corporate Information 26 Statement Pursuant to Section 212 92 of the Companies Act, 1956 Internet Radio Stations 02 Notice 27 Auditors’ Report on Consolidated 93 Mirchi on Social Media 03 Directors’ Report 33 Financial Statements

Mirchi Mobile 07 Report on Corporate Governance 37 Consolidated Balance Sheet 94

Mirchi Music Awards 08 Management Discussion & Analysis 50 Consolidated Statement of Profit & Loss 95

International Operations 15 Auditors’ Report 59 Consolidated Cash Flow Statement 96

Perfect Ten 16 Balance Sheet 62 Notes forming part of the Consolidated 98 Financial Statements Awards & Recognition 17 Statement of Profit & Loss 63 Alternate Brand Solutions (India) Limited 124 ED’s Message 19 Cash Flow Statement 64 [Subsidiary Company]

Financial Highlights 22 Notes forming part of the Financial 66 Statements Board of Directors 23 Reimagining Radio 1

“No power on earth can stop an idea whose time has come” - Prime Minister Manmohan Singh in his 1991 budget speech paraphrasing Victor Hugo

Nearly half of all Railway tickets – 3.65 lacs everyday Revolutions like the Arab spring are facilitated by opportunity rather than a threat. are bought on the internet. Facebook. Videos go viral on YouTube and are seen With 27% of our listeners already online (and growing In 2011, the Income Tax Department received 164 lac IT quite literally by millions beyond their narrow by the day) and over 80% of listeners listening to radio returns on the internet. geographic confines – “Kolaveri Di” was seen by an on mobile phones, Radio Mirchi is well poised to audience from Kashmir to Kanyakumari (and beyond Marriages are no longer made only in heaven. They are capitalize on the opportunity in the digital space. At India) well before the movie was released. increasingly made on the internet. Radio Mirchi hence, we are Reimagining radio (going The Media and Entertainment Industry of which Radio beyond the constraints imposed by conventional We can buy almost anything on the internet today – Mirchi is a part cannot but be affected by the digital terrestrial broadcasting) by developing multimedia books, groceries, tickets for movies, concerts, IPL, revolution because the consumer is effectively saying: content and internet radio stations thereby further consumer durables, even diapers! “If you are not online you are not on my mind”. strengthening the brand for the future. Quite clearly the internet and the mobile phone are The digital revolution can either be a threat to an FM changing our behavior of how we shop, how we enjoy, broadcaster like Mirchi or a huge opportunity. Global how we read, how we share. experiences suggest that FM listening remains strong Twitter, Facebook and YouTube have disrupted even after the digital consumption grows manifold; traditional methods of consuming, learning and online listening only adds to the listenership of a FM commenting. News breaks fastest on Twitter. station. Mirchi sees the online medium as an Facebook.com/mirchi983fm Internet Radio Stations 2

You want to listen to the classics of Kishore and Rafi specific content to people with similar tastes. There can Purani Jeans - A Hindi Retro Melodies Station but the radio station is playing only current hits? quite literally be one station for every individual taste – you like melodious music then log on to Meethi Mirchi, You are in the mood to listen to soothing, soft and you want to listen to old classics during your lunch melodious music but the radio station is playing break, log on to Purani Jeans and if you want to groove dhinchak numbers? Scan above to to dance numbers, log on to Club Mirchi. listen to Purani Jeans* So what do you do? Reach for CDs or your MP3 player? Mirchi is developing a slew of online radio stations that But putting together a playlist is too much of an effort – cater to niche and specialized tastes. Up and running do I play all Rafi songs followed by Kishore or vice- Club Mirchi – Playing Hindi English Club Mixes on our website are three: versa or do I mix and match.

And then you wish: If only there is a way in which I could Meethi Mirchi – A Modern Bollywood listen to songs without so much effort. If only radio was Melodies Channel available “off the shelf” and on demand. Scan above to listen to Club Mirchi* Enter online radio stations from Radio Mirchi. The internet allows us to smash apart the constraints imposed by terrestrial FM broadcasting. As opposed Scan above to to Broadcasting – which is one station for all listeners – listen to You can listen to all these at www.radiomirchi.com Meethi Mirchi* it allows Narrowcasting – which is a way to target very

*To scan this QR code, download the QR code scanner from Nokia Ovi store, Android Market, Apple App Store or BlackBerry App World Mirchi on Social Media 3

Listeners want to be connected to their brand. They are (#songsthatmakemyday). It was a simple contest in Soon, the contest was the most popular topic of looking for more than just passively listening to radio. which people had to tweet about their favorite A R discussion on Twitter nationally. In fact, the biggest Social Media – Twitter and Facebook are a rage. Mirchi Rahman song. The best tweets would win tickets to the testimony to its popularity was the fact that some of is leveraging the full power of social media to connect maestro's concert in Mumbai. the biggest brands in Bollywood started using our with its audience. This is best illustrated by a few The contest spread like wildfire with thousands of hashtag in their own tweets. Dharma Productions, examples: people posting their favorite Rahman song. RJs helped Sony Music, PVR Cinemas, Mouthshut.com were some Trending on Twitter popularize the trend even more. Every tweet was of the big names that started tweeting about #songsthatmakemyday. In less than 12 hours, we Radio Mirchi ran a contest on Twitter replied to from the official Radio Mirchi IDs. acquired more twitter followers than most brands would get in a full month. We reached out to our fans on Twitter and the fans helped establish the fact that Tweet Reach Report for #SongsThatMakeMyDay Radio Mirchi is one of the most influential communities of music lovers online. reach activity exposure

34,374 impressions 50 tweets 39 contributors 10 minutes 4 replies 11,732 7 retweets 19,147 7,027 accounts reached 386 2 1 tweet 2-4 tweets 5-7 tweets 8+ tweets Follow us on Twitter 10.31am 10.32am 10.33am 10.34am 10.35am 10.36am 10.37am 10.38am 10.39am 10.40am Each bar shows how many accounts received how many tweets 39 tweets

Snapshot of just 10 minutes from the duration of activity Twitter.com/mirchi983fm Mirchi on Social Media 4 Stars creating online buzz

Another contest was the movie Kahaani Mirchi Ki Leela: The Most Downloaded Programme most downloaded content on iTunes in India with over Radio Mirchi added a new dimension to the thriller's on Radio itunes 23,000 downloads! promotion with a unique contest on Facebook called Mirchi Ki Leela was a funny Radio Mirchi take on the Scan for Sheher ki Khoyi Kahaani (”The lost stories of a city”). ever-popular Ram Leela routine done during Mirchi Podcast* Fans were asked to share an image from their city with Dusshera. We produced and aired 25 capsules of two or log on to an interesting story behind it. Hundreds sent in their minute each. A simultaneous podcast of the capsules http://itunes.apple.com/in/podcast/ radio-mirchi/id465576149 stories enthusiastically. was done on Radio iTunes page and it became the

Vidya Balan - Kahaani Imran & Katrina - Mere Brother Ki Dulhan SRK & Priyanka - Don 2

*To scan this QR code, download the QR code scanner from Nokia Ovi store, Android Market, Apple App Store or BlackBerry App World Mirchi on Social Media 5 Stars creating online buzz

Ranbir Kapoor - Rockstar Hrithik Roshan, Farhan Akhtar, Abhay Deol - Zindagi Na Milegi Dobara Mirchi on Social Media 6 Stars creating online buzz

Akshay Kumar - Desi Boyzz Abhishek Bachchan - Players Amitabh Bachchan - Buddah Hoga Terra Baap Mirchi Mobile 7 The 59830 Experience

You can take a Tamilian out of Chennai but you cannot Just dial 59830 on your mobile phone and you can take Tamil out of a Chennaite. The Idli – Sambar- Filter listen to Radio Mirchi stations in almost all Indian Coffee routine will never be replaced by Aloo languages. Mirchi Mobile also has a special Bhojpuri Parantha-Paneer-Chai. Rajni Sir will never ever be station available for those who love this popular replaced. Period. And the same can be said about language. millions of other people migrating within the country. Mirchi Mobile is carried by all the leading mobile But, how can one listen to the latest Rajni Sir song in operators thus allowing anyone anywhere in the Delhi? What is the latest gossip about Tamil film country to listen to content from any Mirchi station of industry? What happened in Chennai today – did it his or her choice. rain? How is the latest movie doing? Suddenly homesickness strikes and you yearn to know and listen to your favorite RJ from your hometown. Or you wish you could tune in to Radio Mirchi Hyderabad station in Warangal and listen to the hottest Telugu film star talk about his upcoming movie. But how?

Bhojpuri Launch - Ravi Kishan Mirchi Music Awards 8

The Mirchi Music Awards recognize excellence in music and have quickly become the biggest and most respected music awards in the country. (They have also been extended to the four South Indian languages as well as to Bangla music). This time, the music awards saw a massive integration with the online medium.

Javed Akhtar

Now in its fourth year, the jury for the Hindi music awards was headed by Javed Akhtar and included Ramesh Sippy, Sooraj R. Barjatya, Ashutosh Gowariker, Prasoon Joshi, Sameer, Shankar Mahadevan, Anu Malik, Aadesh Shrivastava, Lalit Pandit, Kailash Kher, Louiz Banks, Kavita Krishnamurti Subramaniam, Alka

The Awards Night Yagnik, Sadhana Sargam, Suresh Wadkar, Talat Aziz and Ila Arun. A tribute to the legends by Sonu Niigaam Mirchi Music Awards 9 A star studded night

music director Raju Singh brought There were contests with the winner getting an all together an ensemble that included expenses paid trip to the event that further added to Shankar-Ehsaan-Loy, Sajid-Wajid, the buzz. We recruited volunteers from the fans at the Lalit Pandit, Ram Sampath, Salim- event as official twitter reporters for the Awards. Over Sulaiman and Lesle Lewis. Sonu 25 celebrities too started tweeting reaching out to over Niigaam offered a tribute to the 5.4 million people worldwide. legends of Hindi music who passed away during the year. The highlight was the way in which it was promoted across media platforms – TV, Radio, Print, Outdoors, and Online. The TV telecast was seen by nearly 4 crore viewers across India. Most impressive was the online Saif with his first passion integration of the awards. Fans could The awards ceremony saw a night of high energy tune into the awards on Facebook, Twitter, YouTube performances by the biggest names in the Indian and our website, www.radiomirchi.com. For the first music industry - Saif Ali Khan with Parikrama, Mika, time, online audience could vote for the Listeners Shreya Ghoshal, Bappi Lahiri, Neha Bhasin the Viva girl, Choice Awards and the response was in thousands. Rekha & Khayyam saab Mirchi Music Awards 10 A star studded night

The numbers speak for themselves Over 35 million impressions across all social media. Over 38,000 direct conversations on Facebook. Over 83,000 views on YouTube of the behind the scenes footage. Over 3,700 direct tweets on Twitter. The Result: A colossal hit online!

The hosts - Shaan & Usha Uthup

Follow us on Scan to follow us on Youtube* The Dirty Duet - Shreya Ghoshal with Bappi Lahiri or log on to Youtube.com/mirchi983fm Kolaveri Dhanush

*To scan this QR code, download the QR code scanner from Nokia Ovi store, Android Market, Apple App Store or BlackBerry App World Mirchi Music Awards 11 A star studded night

L to R - Rajiv Kapoor, Madhur Bhandarkar, Ameen Sayani, L to R - Aadesh Shrivastava, Babla Mehta, Anu Malik & Pallavi & Bhairavi Jaikishan Anandji Bhai

Adnan Sami, Dia Mirza & Sunidhi Chauhan The Rockstars Irshad & Mohit Rakhi the item girl Mirchi Music Awards 12 A star studded night

Hrishita Bhatt Kiran Joneja & Ramesh Sippy Anjana Sukhani Mirchi Music Awards 13 A star studded night

L to R - Sajid, Wajid, Lesle Lewis, Loy, Shankar, Khayyam Saab, Ehsaan, Sulaiman Merchant, Lalit Pandit, Salim Merchant & Ram Sampath Mirchi Music Awards 14 South & Bangla

Ajoy Chakrabarty with daughter Kaushiki L to R - Srikanto with Moonmoon, Srijit & Abir

Dhanush & Usha Uthup Rana Daggubati & Prakash Raj RJ Mir & Dev International Operations 15 UAE launch

Mirchi in the UAE – The desert just got hotter! Radio Mirchi can now be heard all over the UAE with transmitters in Dubai, Abu Dhabi and Al Ain. We tied up with the Abu Dhabi Media Company (ADMC) – a leading media organization in the Middle East – to bring the Mirchi experience to Indians living in the Emirates. The vivacious Rani Mukherji launched the stations on 1st February, 2012. The biggest stars, the most popular music composers, lyricists and singers are all on Radio Mirchi UAE now.

L to R - Abdul Rahman Awadh, Radio Network Director, ADMC, Malcolm Wall, Former CEO, ADMC, Rani Mukherji, RJ Shardul, Prashant Panday, ED & CEO, ENIL & Sandeep Sud, Head of station, Asian Radio, ADMC Perfect Ten 16

“Itni toh koi apne baap ki bhi nahi sunta” On 4th October 2011, Radio Mirchi entered double way! A host of celebrations were lined digits – We celebrated our 10th birthday! On this day, up along with a Mirchi-style tribute to ten years ago, our first station had gone on air in Indore its listeners epitomized by the slogan “Itni toh koi apne baap ki bhi nahi sunta”.

Akshaye Khanna, during the launch of Radio Mirchi Indore in 2001

with Rahman’s Maa Tujhe Salaam being the first song played out. From those humble beginnings in Indore to 32 stations across India, playing hundreds of chartbusters every day, and serving more than 40 million listeners regularly, we have indeed come a long Awards & Recognition 17

Radio Mirchi wins hearts. The Awards And the awards follow just like every year. A few of the simply follow. awards won: According the Indian Readership Survey Q4 2011, with At the Indian Radio Forum, Mirchi swept the awards, nearly 4 crore listeners– over 60% higher than the next bagging the most number of trophies- player - Radio Mirchi continues to be the No.1 radio 12 in all: station in the country. And in the Top 8 cities, Mirchi’s • 4 awards in the Programming Category for the Best listenership is nearly 80% higher than the next radio Radio Programme (Bengali, Gujarati, Kannada and station. Marathi). In addition to the weekly research that is conducted by • 3 awards of the Best Radio Promo – In-House RAM (Radio Audience Measurement) in the four Awards (Telugu, Bengali and Marathi). metros of Delhi, Mumbai, Kolkata and Bengaluru, it • Best Interactive Campaign for Faadu Fillum - An also recently concluded the 2nd sweep of research in audio film created with responses from listeners. nine other big markets of Ahmedabad, Indore, Nagpur, • Best Creative Campaign for Radio Films by Pune, Lucknow, Kanpur, Jaipur, Hyderabad and Mirchi Productions. Chennai. As per reports, Mirchi is the no.1 private FM • Best Use of Radio in an Ad Campaign for ‘Top India station in 8 out of these 9 cities, a true demonstration Cricketer’s Quiz’ before the ICC World Cup. of leadership! • Radio Station Imaging Innovation award for its 9th Listeners tune in for a unique blend of entertainment - Birthday Campaign. talented RJs, creativity, innovation are some of the • Best Use of Radio in an Activation Campaign award hallmarks of our programming that help us win the for Ponds “Let’s Pink” Campaign. hearts of our listeners. Awards & Recognition 18

• Best Radio Programme (Hindi) for a non-metro station-‘Janmashtami Special’ in Bhopal. • Bezawada Basha, from Radio Mirchi, Vijayawada won the Best RJ of the Year (Telugu). Mumbai’s morning show RJ, Jeeturaaj won the RJ of the Year at the 18th Lions Gold Awards. In the Golden Mikes Awards, Radio Mirchi won: • One Silver in the Best On-Ground Promotion by a Single Station for Self (Sponsored by a Client) category for Kotak Mahindra Asset Management Company. • Three Bronzes in the categories of Best Single Commercial – Media and Entertainment; Best On-Air Promotion by a Network of Radio Stations for Self (Sponsored by a Client) and Best Campaign. Last but not the least Mirchi received Best Radio Station of the Year Award for the third year in a row by the Federation of Indian Chambers of Commerce and Industry (FICCI). ED’s Message 19

Scoring its maiden century… FY12 was a challenging year for the media industry also. The media industry is known to be an early sensor Though FY12 was a challenging year for all media of the economic health of the country. Large companies, your Company crossed a very coveted advertisers use media companies to communicate milestone. It scored its maiden century in operating their new products and services. As the second bout of profits (EBITDA)! economic slowdown – the first one was in FY09-10 – hit FY12 was a challenging year for the country. India's the country in FY12, clients scurried to cut expenses. GDP growth is expected to slip significantly in FY12. Since advertising forms a large chunk of costs and Starting with 7.7% in the 1st quarter, it plunged to a low since a temporary deferment of ad spends does not of 6.1% in the 3rd quarter. GDP growth measures the cause much harm to a company's revenues, clients "top-line" growth of companies and that slowed down typically start their cost cuts with advertising. Media considerably. But what slipped dramatically was the companies thus face the heat first; which is why they operating margin of companies. The operating are early sensors of the overall economic mood in margins of the top 100 non-banking companies listed the country. on the BSE fell by nearly 250 basis points. Overall, a In addition to this general economic weakness, your sense of uncertainty has set into the corporate world. Company also faced a delay in Phase-3 auctions. Your Given the political scenario, it is unlikely that big ticket Company has been ready for this very exciting growth reforms will be initiated anytime soon. All this sends opportunity for some time now. But as the auctions got Prashant Panday out one loud message – be cautious at least in the next delayed, your Company had to look at innovations in Executive Director and CEO one year. 20

its current business to grow revenues and profits. Your Company has taken big steps to strengthen It is this background that makes your Company's its presence in the digital space – both on the internet maiden EBITDA century so significant. At a time when and on the mobile platforms. Today, your Company most broadcasters suffered losses or drops in profits, has three radio stations streaming over the internet. your Company's EBITDA increased by 17.3%. Your You may check these out on www.radiomirchi.com. Company's revenue market share amongst private FM These streams reach out to new audiences worldwide broadcasters also remained strong at 33-35%. Even in as well as in cities in India where Mirchi is not listenership, your Company retained its strong present over the FM medium. We will significantly launch Radio Mirchi in the UAE. Your Company has leadership position in both the IRS (Indian Readership increase our presence on the internet with many more given ADMC the license to use its brand. It also helps Survey) and RAM (Radio Audience Measurement) in internet radio stations lined up for launch. Your ADMC with the best practices in programming, brand most markets. Not surprising then that FICCI Company's mobile business – called Mirchi Mobile – building and revenue generation. The initial reports recognized your Company as the most successful radio remained strong in FY12. During the year, we launched coming from the UAE are encouraging. Next time you company this year also….for the 3rd time in a row. Your a special Bhojpuri radio station on the mobile platform. travel to the UAE, make sure you tune into Company's extremely creative programming and Your Company plans to increase its mobile Radio Mirchi! marketing teams were recognized with the maximum offerings also. Fy13 promises to be a year of action. Though the number of awards at this year's ERA (Excellence in Another exciting development took place in FY12. economic environment is expected to remain weak, Radio Advertising) awards at the India Radio Forum Radio Mirchi took its first step in going global by the auction of Phase-3 licenses is expected by the end (IRF). All in all, it was a successful year in a tough launching in the UAE. Your Company has entered into a of the financial year. This should give a big boost to the economic environment! tie-up with the Abu Dhabi Media Company (ADMC) to 21

radio industry. Further, TRAI – the telecom regulator copyright owners with those of the users of these to protect and grow our leadership. On behalf of my that also regulates the broadcasting sector – made a copyrights like your Company. Statutory Licensing will team, I would like to thank you for your constant landmark recommendation that the separation help radio grow as it will make available a lot of new support to us as listeners, friends, guides and of between two adjoining FM channels should be halved music currently unavailable to broadcasters. course….investors! from 800 kHz to 400 kHz. This recommendation, if Your Company has always supported and appreciated accepted, by the Ministry of Information and the good work of artists. As always, this year's Mirchi Prashant Panday Broadcasting (MIB), would double the number of FM Music Awards (MMA) did just that. In its 4th year, the Executive Director and CEO channels available in the major markets from 9 to 18 MMA for the Hindi film music was bigger, more and even more in the future. With more channels glamorous and attracted even more participation from available, broadcasters would be able to offer more the music fraternity. Further, in recognition of the varied programming, bringing in new listeners. This renewed vigor of the Bangla music industry, we would then increase the share of radio in the overall launched the 1st Bangla MMA in Kolkata this year. advertising pie from 4-4.5% today to as much as 7-9%. Along with the four Southern languages, we now have Your Company is optimistic about Phase-3 and is ready the MMA in six languages – Hindi, Tamil, Telugu, to take part in the auctions. Malayalam, Kannada and Bangla. FY13 has also begun on a good note with the passage Before I end, my management team and I would like to of the Copyright Amendments Act. The Amendment is reassure you that we are single mindedly focused on a progressive legislation that brings in Statutory taking your Company to newer heights. We are the Licensing, a provision that balances the rights of leaders in the radio industry and we will do everything Financial Highlights 22

( ` in lakhs) TOTAL REVENUE (` in lakhs) PARTICULARS 2011-12 2010-11 2009-10 Results of Operations 2009-10 23,373 Total Revenue 31,294.75 28,468.48 23,373.11 Earnings before Interest, Taxes, Depreciation and 2010-11 28,468 Amortisation (EBITDA) & Exceptional items 11,221.06 9,568.77 6,247.78 Depreciation 3,246.25 3,359.60 3,697.75 2011-12 31,295 Finance Costs 0.14 111.83 722.55 Profit/(Loss) before Tax 7,974.67 6,097.34 1,827.48 EBITDA (` in lakhs) Exceptional Item - 1,268.48 - Net Profit / (Loss) 5,650.95 5,220.89 1,786.69 2009-10 6,248 Financial Position Equity Share Capital 4,767.04 4,767.04 4,767.04 2010-11 9,569 Reserves and Surplus 39,253.93 33,602.98 28,382.08 Networth 44,020.97 38,370.02 33,149.12 2011-12 11,221 Fixed assets 14,982.51 18,007.20 21,181.78 Investments 18,503.19 9,310.03 4,002.50 Net Current / Non Current Assets 10,535.28 11,052.79 7,964.84 NET PROFIT / (LOSS) (` in lakhs) Stock Information No. of Shares 47,670,415 47,670,415 47,670,415 2009-10 1,787 Earnings per share (Basic & Diluted) (in `) 11.85 10.95 3.75

2010-11 5,221

2011-12 5,651 Board of Directors 23

Mr. Vineet Jain, Mr. N. Kumar, Mr. Ravindra Kulkarni, Chairman & Non-Executive Director Independent Non- Executive Director Independent Non- Executive Director

A trustee and board member of several organizations, Mr. N. Kumar, an Engineering Graduate in Electronics and Mr. Ravindra Kulkarni holds a Masters degree in Law from Mr. Vineet Jain - Chairman & Non Executive Director (ENIL) Communication, is the Vice-Chairman of The Sanmar University of Mumbai. Having been in the legal arena for holds a Bachelor's degree (B. Sc.) in International Business Group, a well known industrial conglomerate with global nearly four decades, Mr. Kulkarni has vast experience as a Administration in Marketing from Switzerland. presence in niche businesses of Chemicals (including legal practitioner, particularly on matters relating to Speciality Chemicals), Engineering Technologies (Products foreign collaborations, joint ventures, mergers and As the Managing Director of Bennett, Coleman & Co. Ltd., and Steel Castings) and Shipping. He is the Honorary acquisitions, capital markets, public offerings for listing of Mr. Jain is acknowledged as a thought leader in Consul General of Greece in Chennai. securities in India as well as in international markets, transforming the Times Group from a publishing house to a infrastructure projects, etc. diversified media conglomerate. He has made a significant Mr. Kumar is an active spokesperson of industry and trade difference to the landscape of the new age media in India. and is a Past President of Confederation of Indian Industry He is a senior partner of M/s. Khaitan & Co., one of India's His leadership in the domain of Internet, Radio and Out of (CII), a leading industrial body. He participates in the leading law firms and heads their Mumbai office. He is on Home has added a new impetus to the categories. functioning of various other prominent apex bodies. the Boards of several listed companies as an independent Mr. Kumar is also on the Boards of several public limited director. He is also a member of the Advisory Committee He is on the managing committees of philanthropic companies and carries with him a vast experience in the and also a faculty member of the Post Graduate Diploma organizations viz. The Times Foundation, The Times of sphere of Technology, Management and Finance. Course in Securities Law at the Government Law India Relief Fund and the S.P. Jain Foundation. College, Mumbai. Mr. Jain is also a member of the Board of Directors of The Press Trust of India Ltd. Board of Directors 24

He is currently an Executive Director of Blackstone India and before that he was a Member of the Board of The Times of India Group where he spent 5 years to help build organizational capability, culture and competitiveness. His 45 years of corporate experience in a gamut of functions that ranged from Manufacturing and Planning to Corporate Development and General Management have Mr. Richard Saldanha, given him learning and insights which have proved to be Mr. Ravindra Dhariwal, Independent Non-Executive Director Non- Executive Director invaluable for restructuring and reorganizing companies as Mr. Richard Saldanha, a graduate Mechanical Engineer, well as for managing partnerships and strategic alliances in Mr. Ravindra Dhariwal is the Executive Director and CEO, served Hindustan Lever & Unilever plc with distinction for an international arena. He has been a Board Member since Bennett, Coleman & Co. Limited. Prior to this, Mr. Dhariwal the mid 80's on several Boards nationally and 30 years. He spent almost 10 years in Latin America. He was was the Vice President, Franchise, SE Asia, PepsiCo internationally. Technical Director of Unilever Venezuela, Vice-President - International. Supply Chain for Unilever Andina, (Venezuela, Colombia, Mr. Saldanha has been associated with various chambers During his illustrious career, he has held various positions Ecuador) rising to be Chairman and CEO of Unilever Peru of commerce and industry bodies, both in India and at companies like Hindustan Lever Limited, Rexona Prop. and a Member of the Unilever Latin America Board. globally, in various capacities. He was also the Founder Limited - Sydney, Pepsi Foods Industries and PepsiCo As Managing Director of Haldia Petrochemicals Ltd., a $ 1.5 President of Bal Raksha Bharat, India and a Former International. He holds a B. Tech degree from IIT Kanpur bn enterprise, Mr. Saldanha brought to the Company, President of Delhi Management Association. and a post graduate diploma in management from IIM, experience and expertise gained in Unilever Companies Calcutta. worldwide as well as in India. He defined his Role at Haldia as `a role that provides clear vision and strategic direction, that builds culture, business ethic, structure and processes to deliver outstanding business performance and Good Corporate Governance'. Board of Directors 25

and growth equity firm in the USA. bringing in the radio revolution in India. Over the last 10 Mr. Parigi was honored with the Life Time Achievement years, he has played a significant role in making Mirchi the Award by the World Brand Congress in 2009. He serves on #1 radio brand in the Country in terms of listenership (IRS the Boards of several companies including Bennett, Q4, 2011: 39.51 million). as well as total income (` 313 Coleman & Company Limited (Times of India Group), crores in FY12). In 2008, Mirchi was rated the #1 media Times Global Broadcasting Company Limited (Times Now), brand – ahead of The Times of India and Star Plus – in the Accel Frontline Limited, Absolute Radio, UK. IMRB- Pitch survey. Mirchi also received most successful Mr. A. P. Parigi, radio company of the year award for the third year in a row Non- Executive Director from FICCI. He leads a team of about 750 professionals in the Company. An alumnus of the Delhi School of Economics and Faculty Mr. Panday has total experience of 22 years in industries of Management Studies, of the University of Delhi, ranging from Advertising, Banking, FMCG & Media. Prior to Mr. Parigi has for the past 2 decades held senior positions joining the Company, he has worked with Citibank, Pepsi, in various industries. Prior to joining the Times Group, he HUL, Mudra and Modi Revlon. His areas of strength include was the CEO of BPL Mobile, Mumbai. After he stepped Marketing & Sales, Analytics & Strategy and People down as the Managing Director- ENIL, he joined Eros management. Mr. Panday is the Chairman of the FICCI International Media Ltd. as the Managing Director & Group Radio committee, Sr. VP in the Association of Radio CEO- India operations- from October 2009 till February Mr. Prashant Panday, Operators of India (AROI), a member of the MRUC 2010. Executive Director & CEO Governing Board, and a member of the CII Entertainment In April 2009, he was awarded The William F Glaser'53, Forty seven years of age, Mr. Prashant Panday is an Committee. He also served as a member of the Ministry of `Rensselaer's Entrepreneur of the Year', in Troy, Albany, Engineering graduate in Electronics & Communications, I&B’s committee on fighting piracy. He is a speaker at USA. June 2010- Member, The Oxford University, Said and has done his PGDM from IIM Bangalore (1990). various industry forums. Business School, Business Advisory Council. In July, he was elected to the Advisory Council of Fordham Graduate Mr. Panday is the Executive Director and Chief Executive Business School, New York. In May 2011, he was appointed Officer of the Company. He has been associated with the Advisor - N.E.A.; India. N.E.A. is a leading venture capital Company since August 2000 and has played a key role in Corporate Information 26

BOARD OF DIRECTORS COMPANY SECRETARY REGISTRAR & SHARE TRANSFER AGENTS (R & TA)

(As on May 25, 2012) Mehul Shah, VP- Compliance & Company Secretary Karvy Computershare Private Limited, Mr. Vineet Jain, Chairman Unit: - Entertainment Network (India) Limited, Mr. N. Kumar AUDITORS Plot No. 17 to 24, Vittal Rao Nagar, Madhapur, Mr. Ravindra Kulkarni M/s. Price Waterhouse & Co., Hyderabad - 500 081. Mr. Richard Saldanha Chartered Accountants Phone: 040 44655000, Fax: 040 23420814. Mr. A. P. Parigi Mr. Ravindra Dhariwal LEGAL ADVISORS REGISTERED OFFICE

Mr. Prashant Panday, ED & CEO Mrs. Pratibha M. Singh, Advocate 4th Floor, A-Wing, Advocates Halai & Co., Advocates Matulya Centre, Senapati Bapat Marg, MANAGEMENT TEAM Lower Parel (West), Mumbai - 400 013.

Prashant Panday, ED & CEO BANKERS CORPORATE OFFICE N. Subramanian, Group CFO HDFC Bank Limited Trade Gardens, Ground Floor, Hitesh Sharma, Chief Operating Officer Kamala Mills Compound, Senapati Bapat Marg, Tapas Sen, Chief Programming Officer Lower Parel (West), Mumbai - 400 013. Sujata Bhatt, CMO & Head of HR Ph: 022- 67536983. Sameer Sainani, Chief Revenue Officer

Mahesh Shetty, Chief Strategy Officer

Anand Parameswaran, Executive VP & Regional Director- South Region

Vanditta Malhotra Hegde, VP & Legal Head

ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Notice 27

NOTICE is hereby given that the THIRTEENTH Annual General modification(s), the following Resolution as a Special the Company as may be applicable or such other maximum Meeting of the Members of ENTERTAINMENT NETWORK (INDIA) Resolution:- sectoral cap/ statutory limit as applicable or as may be prescribed from time to time; LIMITED will be held at Y. B. Chavan Auditorium, Gen. Jagannath “RESOLVED THAT pursuant to the applicable provisions of Bhosale Marg, Next to Sachivalaya Gymkhana, Near Mantralaya, the Foreign Exchange Management Act, 1999 (FEMA), Foreign RESOLVED FURTHER THAT the Board be and is hereby Nariman Point, Mumbai - 400021, on Tuesday, August 14, 2012, at Exchange Management (Transfer or issue of Security by a severally authorized to do all such acts, deeds, matters and 3.00 p.m. to transact the following business: Person Resident outside India) Regulations, 2000, Policy on things; and execute all applications, documents, writings, etc. Foreign Direct Investment, the Companies Act, 1956 and all other as may be necessary, proper or expedient for the purpose Ordinary Business: applicable rules, regulations, notifications, circulars, guidelines, of giving effect to this Resolution and for matters connected 1. To receive, consider and adopt the Audited Balance Sheet of policies, laws, etc. (including any statutory modifications or re- therewith or incidental thereto; the Company as at March 31, 2012, the Profit and Loss Account enactment thereof for the time being in force) and subject to all RESOLVED LASTLY THAT the Board be and is hereby severally (the Statement of Profit and Loss) and Cash Flow Statement requisite approvals, permissions, sanctions, etc. and subject to authorized to delegate all or any of its powers which can be so for the financial year ended on that date and the Reports of the such conditions as may be prescribed by any of the concerned delegated by law to any director or officer or person(s) to give Board of Directors and Auditors thereon. authorities while granting such approvals, permissions, effect to this Resolution.” 2. To appoint a Director in place of Mr. Vineet Jain who retires by sanctions, etc. which may be agreed to by the Board of Directors 6. To consider and, if thought fit, to pass with or without rotation and being eligible, offers himself for re-appointment. of the Company and/or a duly authorized Committees thereof, modification(s), the following Resolution as a Special for the time being exercising the powers conferred by the Board 3. To appoint a Director in place of Mr. Ravindra Kulkarni who retires Resolution:- of Directors (hereinafter referred to as ‘the Board’), the consent by rotation and being eligible, offers himself for re-appointment. of the Company be and is hereby accorded for investments by “RESOLVED THAT pursuant to the provisions of Section 31 4. To appoint Messrs Price Waterhouse & Co., Chartered registered Foreign Institutional Investors including their sub- and other applicable provisions, if any, of the Companies Act, Accountants - Firm Registration Number 007567S, as Auditors accounts (hereinafter referred to as ‘FIIs’), Qualified Foreign 1956 (including any statutory modification(s) or re-enactment to hold office from the conclusion of the Thirteenth Annual Investors (hereinafter referred to as ‘QFIs’), any other permitted thereof, for the time being in force), read with Circular no. 28/ General Meeting until the conclusion of the Fourteenth Annual foreign investors in the equity shares or debentures convertible 2011 dated May 20, 2011, issued by the Ministry of Corporate General Meeting and to authorize the Board of Directors to fix into shares of the Company, by purchase or acquisition under Affairs and Sections 4, 13, 81 and other applicable provisions, if their remuneration as agreed to between the Board of Directors the Portfolio Investment Scheme or under any other approved, any, of the Information Technology Act, 2000, the existing Article and the Auditors, in addition to reimbursement of service tax authorized scheme or mode or manner under FEMA/ relevant 206 of the Articles of Association of the Company be and is and all out of pocket expenses incurred in connection with the policies/ rules/ regulations/ notifications/ circulars, etc., subject hereby deleted and in its place, the following new Article 206 be audit of accounts of the Company. to the condition that the total holding of all FIIs, QFIs, any other inserted and read as under: permitted foreign investors put together shall not exceed 26% 206. The Directors may meet together as a Board for the dispatch Special Business: (twenty six percent) of the paid up equity capital or paid up of business from time to time and shall so meet at least 5. To consider and, if thought fit, to pass with or without value of the respective series of the convertible debentures of once in every three months and at least four such meetings ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Notice 28

shall be held in every year. The Directors may adjourn and it by post to him to his registered address or (if he has no or any of the powers hereof conferred by this resolution to any otherwise regulate their meetings, as they think fit. The registered address in India) to the address, if any, in India director or to any committee or to any person(s) to give effect Directors or members of any Committee may participate in supplied by him to the Company for serving documents or to this Resolution.” notices on him or through electronic mail/ electronic mode, meetings of the Board or respective Committees through Notes: video-conference facility or any other permissible electronic if and to the extent permitted by the relevant authorities in (a) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE mode, if and to the extent permitted by the relevant the manner prescribed from time to time. GENERAL MEETING IS ENTITLED TO APPOINT A PROXY, authorities in the manner prescribed from time to time. 249. Where a document or notice is sent by post, service of WHO NEED NOT BE A MEMBER, TO ATTEND AND VOTE ON RESOLVED FURTHER THAT the Board of Directors of the the document or notice shall be deemed to be effected BEHALF OF HIMSELF/HERSELF. The instrument appointing Company be and is hereby authorized to execute and file the by properly addressing, preparing and posting a letter the Proxy should be deposited at the Registered Office of relevant documents, forms, etc. with the Registrar of Companies, containing the document or notice, provided that where the Company not less than 48 (forty eight) hours before the Maharashtra, Mumbai and other regulatory bodies and to do all a Member has intimated to the Company in advance that commencement of the Meeting. such acts, deeds, matters and things, including to delegate all documents or notices should be sent to him under a (b) The Register of Members and Share Transfer Books of the or any of the powers hereof conferred by this resolution to any certificate of posting or by registered post with or without Company will remain closed from Tuesday, August 7, 2012 to director or to any committee or to any person(s) to give effect acknowledgment due and has deposited with the Company Tuesday, August 14, 2012, both days inclusive. to this Resolution.” a sum sufficient to defray the expenses of doing so, service of the document or notice shall be deemed to be effected if (c) The relevant Explanatory Statement pursuant to Section 173 of 7. To consider and, if thought fit, to pass with or without it is sent in the manner intimated by the member and such the Companies Act, 1956 (‘the Act’), setting out material facts modification(s), the following Resolution as a Special service shall be deemed to have been effected in the case relating to the business at Item nos. 5, 6 and 7 of the Notice as Resolution:- of a notice of a meeting, at the expiration of forty eight hours set out above is annexed hereto. Pursuant to the Clause 49 of “RESOLVED THAT pursuant to the provisions of Sections 31, (48) after the letter containing the document or notice is the Listing Agreement, relevant details of the Directors seeking 53 and other applicable provisions, if any, of the Companies Act, posted and in any other case, at the time at which the letter re-appointment at Item nos. 2 and 3 of the Notice are annexed 1956 (including any statutory modification(s) or re-enactment would be delivered in the ordinary course of post and in hereto. thereof, for the time being in force), read with Circular no. 17/ case of service through electronic mail/ electronic mode (d) In terms of Section 205C of the Act, the application money 2011 dated April 21, 2011 and Circular no. 18/ 2011 dated (if and to the extent permitted by the relevant authorities received by the Company for allotment of any Securities and April 29, 2011, issued by the Ministry of Corporate Affairs and in the manner prescribed from time to time), at the time due for refund, which remain unpaid or unclaimed for a period Sections 4, 13, 81 and other applicable provisions, if any, of the when electronic mail/ electronic communication is sent to a of 7 (seven) years from the date they become due for payment Information Technology Act, 2000, the existing Articles 248 and Member. shall be credited to the Investor Education and Protection Fund 249 of the Articles of Association of the Company be and are RESOLVED FURTHER THAT the Board of Directors of the (‘IEPF’). hereby deleted and in their places, the following new Articles Company be and is hereby authorized to execute and file the (e) Particulars of the employees as required under the provisions 248 and 249 be inserted and read as under: relevant documents, forms, etc. with the Registrar of Companies, of Section 217(2A) of the Act, read with the Companies 248. A document or notice may be served or given by the Maharashtra, Mumbai and other regulatory bodies and to do all (Particulars of Employees) Rules, 1975, as amended, are given Company on any Member either personally or by sending such acts, deeds, matters and things, including to delegate all in the annexure and form part of the Directors’ report. In terms ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Notice 29

of Section 219(1)(b)(iv) of the Act, the Report and Accounts are Company may at any time nominate, in the prescribed manner, send various notices/ documents including Annual Reports being sent to the Members excluding the aforesaid annexure. a person to whom his/her shares in the Company shall vest, in to its members through electronic mode to their e-mail Any Member interested in obtaining a copy of the said annexure the event of his/her death. Nomination forms can be obtained addresses. To support this initiative in full measure, Members may write to the Company Secretary at the registered office of from the R & TA. who have not registered their e-mail addresses, so far, are the Company. (h) Members/ Proxies should bring the Attendance Slip sent herein, requested to register their e-mail addresses with the Depository (f) The Ministry of Corporate Affairs (‘MCA’) has taken a ‘Green duly filled in, for attending the Meeting. through their concerned Depository Participants, in respect Initiative in the Corporate Governance’ by allowing paperless of electronic holdings. Members, who hold shares in physical (i) Members are requested to bring their copy of the Annual Report compliances by companies. The Company shall use the e-mail form, are requested to kindly register their e-mail addresses to the Meeting. addresses of the Members obtained from the Depositories / with the Company’s Registrar & Share Transfer Agents- Karvy Depository Participants/ available with the Company’s Registrar (j) Members desiring any information pertaining to the accounts Computershare Private Limited (‘R & TA’) at the aforesaid & Share Transfer Agents- Karvy Computershare Private Limited are requested to write to the Company Secretary at an early address stated in para (f). The Company shall use the e-mail (‘R & TA’) to send all future Members’ communications like date so as to enable the Management to reply at the Annual addresses of the Members obtained from the Depositories / notices, the Company’s Annual Reports, etc. through electronic General Meeting. Depository Participants/ available with the ‘R & TA’ to send all mode. In case the Members have not furnished their e-mail (k) Annual Report containing inter alia the Notice convening the future Members’ communications like notices, the Company’s addresses, they are requested to furnish the same to their Thirteenth Annual General Meeting, Audited Balance Sheet of Annual Reports, documents etc. through electronic mode. Depository Participants. Members are requested to notify the Company as at March 31, 2012, the Profit and Loss Account This will ensure instant and definite receipt of the Members’ immediately of any change of address, e-mail address, bank (the Statement of Profit and Loss) and Cash flow statement for communication by them. account details: the financial year ended on that date and the Reports of the By Order of the Board of Directors For Entertainment Network (India) Limited (i) to their Depository Participants (DPs) in respect of their Board of Directors and Auditors thereon, Report on Corporate shareholdings in electronic (demat) form and Governance, Management Discussion & Analysis, etc. are available on the Company’s web site at: www.enil.co.in. Copies Mehul Shah (ii) to the Company’s Registrar & Share Transfer Agents- of the aforesaid documents are available for inspection at the VP – Compliance Karvy Computershare Private Limited (‘R & TA’), Unit:- & Company Secretary Registered Office of the Company during office hours. Entertainment Network (India) Limited, Plot No. 17 to 24, Mumbai, May 25, 2012.

Vittal Rao Nagar, Madhapur, Hyderabad - 500081, Phone: Important Communication to Members: Registered Office: 040 – 44655000, Fax : 040 – 23420814, in respect of their The Ministry of Corporate Affairs has taken a ‘Green Initiative in 4th Floor, A-Wing, Matulya Centre, shareholdings in physical form, if any, quoting their folio the Corporate Governance’ by allowing paperless compliances Senapati Bapat Marg, numbers. by the companies. In accordance with the circulars issued by Lower Parel (West), (g) In terms of Section 109A of the Act, every holder of shares in the the Ministry of Corporate Affairs, companies can now serve, Mumbai - 400 013. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Notice 30

EXPLANATORY STATEMENT

Explanatory Statement as required under Section 173 of the Companies Act, 1956

The following Explanatory Statement sets out all material facts 4. It is proposed to enhance the FII, QFI and other permitted approved, authorized scheme or mode or manner under FEMA/ relating to the business mentioned under Item Nos. 5, 6 and 7 of the foreign investment limit to 26% of the paid up equity capital relevant policies/ rules/ regulations/ notifications/ circulars, etc. or paid up value of the respective series of the convertible accompanying Notice dated May 25, 2012. 7. The Board of Directors accordingly recommends the Special debentures of the Company as may be applicable or such other 1. Item No. 5:- The registered Foreign Institutional Investors Resolution set out at Item No. 5 of the accompanying Notice for maximum sectoral cap/ statutory limit as applicable or as may including their sub-accounts (‘FIIs’), Qualified Foreign Investors approval of the Members. be prescribed from time to time: (‘QFIs’) and other permitted foreign investors have assumed 8. None of the Directors of the Company is, in any way, concerned a) To increase the headroom for FIIs, QFIs and other permitted a crucial role in the Indian capital market. It is proposed to or interested in the said Special Resolution. facilitate greater FIIs and other permitted foreign investment in foreign investors and potentially expand the market for the 9. Item Nos. 6 and 7:- The Ministry of Corporate Affairs (MCA) the Company to broadbase the Company’s shareholding and Company’s shares in the public markets; has taken a ‘Green Initiative in the Corporate Governance’ also provide depth and liquidity to the Company’s shares. b) To provide financial flexibility to the Company and enable by allowing paperless compliances by the companies after optimal financial structuring of any expansion financing 2. In terms of the provisions of Portfolio Investment Scheme considering the provisions of Sections 4, 13, 81 and other that may be required consequent to Phase III; under the Foreign Exchange Management (Transfer or issue applicable provisions, if any, of the Information Technology Act, of Security by a Person Resident outside India) Regulations, c) To reduce the procedural bottlenecks for FIIs, QFIs 2000 for legal validity of compliances under the Companies Act, 2000, as amended from time to time, FIIs may invest in the paid and other permitted foreign investors to increase their 1956 through electronic mode and has issued various circulars up equity capital or paid up value of each series of convertible shareholding in the Company. including Circular no. 17/ 2011 dated April 21, 2011 and Circular no. 18/ 2011 dated April 29, 2011 stating that service of notice/ debentures up to the sectoral cap / statutory limit as applicable 5. The Board of Directors of the Company, at its meeting held on documents, etc. including Annual Reports can be effected to the Indian companies, subject to the approval of the Board of January 30, 2012, inter alia, proposed, subject to approval of the through electronic mode; and Circular no. 28/ 2011 dated May Directors and approval of the Members of the Company by way Members by way of a special resolution, to enhance the said FII, 20, 2011 regarding participation by the Directors in meetings of of a special resolution. QFI and other permitted foreign investment limit to 26 % (twenty Board/ Committees of Directors through electronic mode. 3. Until October 1, 2011, the maximum permissible foreign six percent) of the paid up equity capital or paid up value of the investment (FDI, NRI & PIO investments and portfolio respective series of the convertible debentures of the Company, 10. MCA has further clarified that a Company would have complied investment) in Terrestrial Broadcasting FM (FM Radio) was as may be applicable, or such other maximum sectoral cap/ with the provisions of Sections 53, 219 and other applicable 20%. While announcing the Phase III policy, the Ministry of statutory limit as applicable or as may be prescribed from time provisions of the Companies Act, 1956, if the service of the Information & Broadcasting [‘MIB’] approved the increase in the to time. notice/ documents has been made through electronic mode. foreign investment from 20% to 26%. The higher limit of 26% has 6. The Special Resolution set out at Item No. 5 of the accompanying 11. MCA has also clarified that Directors of the Company may also been notified in the Consolidated FDI Policy effective from Notice will enable the FIIs, QFIs and other permitted foreign participate in a meeting of Board/ Committees of Directors October 1, 2011 read with the Press Release dated September investors to acquire shares of the Company within the revised under the provisions of the Companies Act, 1956 through 30, 2011. ceiling under the Portfolio Investment Scheme or under any other electronic mode. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Notice 31

12. The Company is keen to support the initiative taken by MCA of service. 16. None of the Directors are interested in the said Special Resolutions, except to the extent of their shareholding. and proposes to send notices, documents, etc. to the Members 14. The Board of Directors, at its meeting held on May 25, 2012, through electronic mode. The Company proposes to amend the proposed to replace the Articles 206, 248 and 249 of the Articles By Order of the Board of Directors Articles of Association of the Company to enable the service of of Association of the Company as stated at the respective For Entertainment Network (India) Limited the documents through electronic mode and participation in a resolutions set out at Item Nos. 6 and 7. meeting of Board/ Committees through electronic mode. Mehul Shah 15. Pursuant to Section 31 and other applicable provisions of VP– Compliance 13. Article 206 of the Articles of Association of the Company deals the Companies Act, 1956, any alteration in the Articles of Mumbai, May 25, 2012. & Company Secretary inter alia with the meetings of the Directors. Articles 248 and Association of the Company requires approval of the Members Registered Office: 249 of the Articles of Association of the Company provide inter by way of passing a special resolution. The Board of Directors 4th Floor, A-Wing, Matulya Centre, alia that a document/ notice will be served upon any member recommends the aforesaid Special Resolutions set out at Item Senapati Bapat Marg, either personally or through post and about its effective time Nos. 6 and 7 for approval of the Members. Lower Parel (West), Mumbai - 400 013. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Notice 32

ANNEXURE TO ITEM NOS. 2 AND 3 OF THE NOTICE. Details of Directors seeking appointment/ re-appointment at the forthcoming Annual General Meeting (pursuant to the Clause 49 of the Listing Agreement).

Name of the Director Mr. Vineet Jain Mr. Ravindra Kulkarni Date of Birth February 12, 1966 May 23, 1945 Nationality Indian Indian Date of Appointment on the Board January 19, 2007 January 19, 2007 Qualifications B. Sc. degree in International Business Administration in Masters degree in Law from University of Mumbai, also holds a Bachelors degree in Science from University Marketing from Switzerland of Mumbai. Shareholding in the Company Nil Nil List of Directorships held in other Bennett, Coleman & Company Limited; (Managing Director), Mahindra & Mahindra Limited; Tech Mahindra Limited, Elantas Beck India Limited; Alternate Brand Solutions Companies Bharat Nidhi Limited; The Press Trust of India Limited; Times (India) Limited; Styrolution ABS (India) Limited; Chowgule Steamships Limited; Shamrao Vithal Co-op Bank Global Broadcasting Company Limited; Times Infotainment Limited; Khaitan Consultants Limited; Lavgan Dockyard Private Limited. Media Limited; Times Internet Limited; Zoom Entertainment Network Limited; a2z Shopping Limited; Times Mobile Limited; Times Websol Limited; Worldwide Media Private Limited. Committee membership 1. Bennett, Coleman & Company Limited: [Chairman of 1. Elantas Beck India Limited: [Chairman of Audit Committee, Chairman of Shareholders’/ Investors’ Investment and Loans Committee, Member of Share Grievance Committee]. Transfer Committee]. 2. Mahindra & Mahindra Limited: [Member of Audit Committee, Member of Shareholders’/ Investors’ 2. The Press Trust of India Limited: [Member of Committee of Grievance Committee, Member of Governance- Remuneration & Nomination Committee]. Board]. 3. Entertainment Network (India) Limited: [Member of Audit Committee, Member of Remuneration/ Compensation Committee]. 4. Styrolution ABS (India) Limited: [Member of Audit Committee, Member of Remuneration Committee]. 5. Tech Mahindra Limited: [Chairman of Remuneration Committee].

Brief resume of all the Directors of the Company has also been furnished separately in the Annual Report. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Directors’ Report 33

Dear Members, increased its investment in brand building so as to keep the listenership lead intact. Your Company has maintained its Your Directors have pleasure in presenting this Thirteenth Annual Report together with the Audited Accounts of the Company [‘ENIL’] for the financial year ended March 31, 2012. leadership in listenership this year as well. ENIL remained the number one brand in each of the quarterly IRS reports of the 1. Financial Highlights year. It also showed strong results in research conducted by Amount in ` RAM (Radio Audience Measurement). Financial Year Financial Year You will be happy to know that your Company was recognized 2011-2012 2010-2011 by FICCI, for the third continuous year, as the most successful Income 3,129,475,246 2,846,848,316 radio company of the year. The strength of the Radio Mirchi Profit before Tax & Exceptional item 797,466,918 609,734,330 brand and the prowess of its programming and marketing teams Profit on sale of Long Term Investment — 126,848,239 were also recognized at the Excellence in Radio Advertising Tax expense 232,371,797 214,493,272 (ERA) awards function at this year’s India Radio Forum (IRF), where ENIL received the maximum number of awards. Your Profit after Tax 565,095,121 522,089,297 Company also received several other awards during the year, in Profit brought Forward 1,475,081,244 952,991,947 recognition of its strong performance. Equity 476,704,150 476,704,150 During the year, your Company entered the UAE through a Transfer to General Reserve — — tie-up with the Abu Dhabi Media Company (ADMC). Radio Surplus carried to Balance Sheet 2,040,176,365 1,475,081,244 Mirchi can now be heard in Dubai, Al Ain, Abu Dhabi and the other emirates in the UAE. The initial reports from the UAE are 2. Financial Performance very encouraging. As always, we are committed to providing the Your Company retained its position as the market leader in happening soon has lead to advertisers curtailing or deferring best entertainment to our listeners, wherever they are present. Private FM Radio Broadcasting Industry. Total income of the ad spends. This has impacted your Company as well. ENIL’s Your Company made progress on the Digital side of the Company increased from ` 2,846,848,316 during the previous total income grew by a modest 9.9% this year to ` 312.9 crs. business also. As you know, the internet is fast expanding its year to ` 3,129,475,246 during the year under review. Profit after Your Company’s EBITDA grew by 17.3% and crossed the presence in India with more than 120 million Indians using it tax was higher at ` 565,095,121. The performance is discussed ` 112.2 crs. milestone for the first time. Your Company’s net for emails, social networking, e-commerce, entertainment, etc. in detail in the Management Discussion and Analysis Report profit stood at ` 56.5 crs., a growth of 43.0% (without exceptional This number is expected to grow to more than 300 million in which forms part of the Annual Report. items). In these trying times, your Company has maintained its the next 2-3 years. Keeping this in mind, your Company has revenue market share amongst private broadcasters at 33-35%. 3. Operations made Digital very much a part of its overall programming and The year has been a challenging one for the media industry. The challenging conditions motivated your Company to focus business strategy. Your Company launched two internet radio The slowdown in the economy with the GDP growth at 6.1% in on developing more innovative sales propositions and go-to stations – Purani Jeans and Meethi Mirchi. You may access the 3rd quarter of FY12 and the uncertainty about any recovery market solutions for the advertisers. Your Company significantly them on www.radiomirchi.com. Your Company also expanded ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Directors’ Report 34

the Mirchi Mobile service by adding a Bhojpuri radio feed such, no amount of principal or interest was outstanding as on Company for the period commencing from the conclusion of created especially for the mobile platform. the date of the Balance Sheet. the Thirteenth Annual General Meeting until the conclusion of the Fourteenth Annual General Meeting and to fix their Your Company continued its support to and appreciation of the 6. Directors remuneration. highly creative music fraternity this year also. This year, we had In accordance with the provisions of the Companies Act, 1956, 9. Cost Auditor an even bigger Hindi Mirchi Music Awards (MMA) function. In read with the Articles of Association of the Company, Mr. Vineet th its 4 year, the awards saw even higher participation from the Jain and Mr. Ravindra Kulkarni retire by rotation at the ensuing The Company is required to comply with the relevant provisions music fraternity. We feel proud that through these awards, your Annual General Meeting and being eligible, offer themselves for of the Cost Accounting Records (Telecommunication Industry) Company is giving the artists the true respect they deserve. re-appointment. Rules 2011, notified on December 7, 2011. Effective date of We extended this reverence to the music fraternity in the four Brief resume of the Directors proposed to be re-appointed, implementation of the aforesaid Rules is April 1, 2012. The southern states two years back. This year, we launched the first nature of their expertise in specific functional areas, names Company is in the process of appointing the Cost Auditor as edition of the Bangla Mirchi Music Awards. of the companies in which they hold directorships and the per the General Circular No. 15/ 2011 dated April 11, 2011 Your Company is confident about the future. This confidence memberships / chairmanships of Committees of the Board issued by the Ministry of Corporate Affairs, Cost Audit Branch, comes from recognizing the challenges that lie ahead, identifying and their shareholding in the Company, as stipulated under read with the Companies (Cost Audit Report) Rules, 2011 for the continuous changes in listener tastes and remaining Clause 49 of the Listing Agreement entered into with the Stock cost audit of the cost records. The cost audit requirements of sensitive to advertisers’ needs. This confidence comes from Exchanges, are set out in the Annexure to the Notice forming the cost records of the Company will be applicable from the financial year 2012-2013 onwards. constantly directing our efforts and resources towards creating part of the Annual Report. a stronger, digitally robust and continuously innovating brand. 7. Audit Committee 10. Buy-Back of Shares During the financial year under review, the Company has not After getting unexpectedly delayed in FY12, we are hopeful that The Audit Committee of the Company presently comprises offered to buy-back any of its outstanding shares. the Phase 3 policy will move ahead in FY13 with the auctioning Mr. N. Kumar (Chairman), Mr. Ravindra Dhariwal, Mr. Ravindra process expected to begin in FY13. Phase 3 is an exciting Kulkarni and Mr. Richard Saldanha. The Internal Auditors 11. Conservation of Energy and Technology Absorption opportunity for your Company to grow. The management has of the Company report directly to the Audit Committee. Brief The Company is in the business of FM Radio Broadcasting. prepared detailed plans for participation in the auctions and description of the terms of reference of the Audit Committee has Hence, most of the information required to be provided under the Directors of your Company are guiding management in the been furnished in the Report on Corporate Governance. Section 217(1)(e) of the Companies Act, 1956, read with the making of these plans. 8. Auditors Companies (Disclosure of Particulars in the Report of Board of 4. Dividend Directors) Rules, 1988, is not applicable. Messrs Price Waterhouse & Co., Chartered Accountants, the However the information, as applicable, is given hereunder: In order to conserve the resources for future growth, your Statutory Auditors of the Company retire at the conclusion of (i) Conservation of Energy: Directors do not recommend any dividend for the financial year the Thirteenth Annual General Meeting and have confirmed their The operations of the Company are not energy intensive. 2011-2012. eligibility and willingness to accept office, if appointed. Nevertheless, continuous efforts are being made by the 5. Fixed Deposits Members are requested to appoint Messrs Price Waterhouse Company and its employees to reduce the wastage of The Company has not accepted any fixed deposits and, as & Co., Chartered Accountants, as the Statutory Auditors of the scarce energy resources. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Directors’ Report 35

(ii) Technology Absorption: 13. Particulars of Employees Practicing Company Secretary in the aforesaid Certificate Whenever there is requirement, the Company evaluates Particulars of the employees as required under the provisions has been adequately dealt with in the report on Corporate the best technology available globally for improving the of Section 217(2A) of the Companies Act, 1956, read with Governance, which forms part of the Annual Report. productivity and quality of its operations. the Companies (Particulars of Employees) Rules, 1975, as 17. Directors’ Responsibility Statement The Company is currently implementing Customer amended, are given in the annexure appended hereto and Pursuant to the provisions of Section 217 (2AA) of the Companies Relationship Management (CRM) by leveraging the forms part of this report. In terms of Section 219(1)(b)(iv) of the Act, 1956, the Directors, based on the representations received existing SAP landscape to improve process control and Companies Act, 1956, the Annual Report and Accounts are from the Operating Management, hereby confirm that: sales efficiency. This will not only help the current 32 radio being sent to all the Members excluding the aforesaid annexure. (i) in the preparation of the annual accounts, the applicable stations, but will also aid the future expansion. Any Member interested in obtaining a copy of the said annexure accounting standards have been followed and that there may write to the Company Secretary at the Registered Office of are no material departures; (iii) Research & Development: the Company. (ii) they have, in the selection of the accounting policies, The Company is scaling up its digital and mobile presence consulted the Statutory Auditors and have applied the in a significant way. The Company already streams 2 music 14. Share Capital & Listing of Securities suggested accounting policies consistently and made feeds through Gaana.com platform. In mobile space, the The equity shares of the Company are listed and admitted to judgments and estimates that are reasonable and prudent Company offers 15 radio feeds on a dial-in IVR platform dealings on BSE Limited (BSE) and National Stock Exchange so as to give a true and fair view of the state of affairs of the which is available across telecom networks. of India Limited (NSE) effective from February 15, 2006. Annual Company for the financial year ended on March 31, 2012 Listing Fee has been paid to each exchange. 12. Foreign Exchange Earnings & Outgo and of the profit of the Company for that period; 15. Management Discussion and Analysis Report Statement pursuant to Section 217(1)(e) of the Companies Act, (iii) they have taken proper and sufficient care for the Management Discussion and Analysis Report for the financial 1956, read with the Companies (Disclosure of Particulars in the maintenance of adequate accounting records in year under review as stipulated in Clause 49 of the Listing Report of Board of Directors) Rules, 1988: accordance with the provisions of the Companies Act, Agreement entered into with the Stock Exchanges is set out in a (i) Activities relating to export, initiatives to increase exports, 1956, for safeguarding the assets of the Company and for separate section forming part of the Annual Report. developments of new export markets for products and preventing and detecting fraud and other irregularities, to services and export plan: 16. Corporate Governance the best of their knowledge and ability; The Company is adhering to good corporate governance The Company is actively exploring profitable business (iv) they have prepared the annual accounts on a going opportunities in the overseas market. practices in every sphere of its operations. The Company has concern basis. (ii) Total foreign exchange earned and used: taken adequate steps to comply with the applicable provisions Amount in ` of Corporate Governance as stipulated in Clause 49 of the 18. Subsidiary Company Listing Agreement entered into with the Stock Exchanges. A Financial Year Financial Year Alternate Brand Solutions (India) Limited (ABSL) is engaged in 2011-2012 2010-2011 separate report on Corporate Governance is enclosed as a the business of events. ABSL classifies events into two types– part of the Annual Report along with the Certificate from the Managed Events in which ABSL manages its clients’ events Foreign exchange earnings 13,164,105 — Practicing Company Secretary confirming compliance with on their behalf and IPR (Intellectual Property Rights) events in Foreign exchange outgo 8,122,585 7,454,160 the conditions of Corporate Governance. Observation of the which ABSL builds its own event brands. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Directors’ Report 36

During the year, ABSL decided not to carry out Managed Events Company are not attached to the Balance Sheet of the Company. dealers, suppliers, bankers, regulatory and government on account of poor margins and excessive competition from authorities and all other business associates for their continued Relevant financial information of the Subsidiary Company is the unorganized sector. Consequently, the results of this year support and confidence in the management of the Company. disclosed in the Annual Report. The Company shall make are not comparable with those of the previous years. The total Your Directors are pleased to place on record their appreciation available the Annual Accounts and the related detailed of the consistent contribution made by employees at all levels income recorded by ABSL during FY12 was ` 11.2 crs. with information of its subsidiary to any Member of the Company an EBITDA loss of ` 0.3 crs. ABSL ensured that its receivables or its subsidiary who may be interested in obtaining the same through their hard work, dedication, solidarity and cooperation position was handled satisfactorily. at any point of time. These documents will also be available for and acknowledge that their efforts have enabled the Company to achieve new heights of success. As per Section 212 of the Companies Act, 1956, the Company inspection during business hours at the Registered Office. The is required to attach the Balance Sheet, the Profit and Loss Consolidated Financial Statements presented by the Company Account (Statement of Profit and Loss) and other documents include financial results of its subsidiary companies. For and on behalf of the Board of Directors of its subsidiary companies to the Balance Sheet of the 19. Consolidated Financial Statements Vineet Jain Company. Vide General Circular No. 2/ 2011 dated February 8, Mumbai, May 25, 2012 Chairman 2011 issued by the Government of India (Ministry of Corporate In accordance with the Accounting Standard 21 on Consolidated Financial Statements, the audited Consolidated Financial Affairs), general exemption has been granted to companies Registered Office: Statements are annexed and form part of the Annual Report. from attaching financial statements of subsidiaries, subject to 4th Floor, ‘A’ Wing, Matulya Centre, fulfillment of conditions stated in the said circular. Accordingly, 20. Acknowledgements Senapati Bapat Marg, the Balance Sheet, the Profit and Loss Account (Statement Your Directors take this opportunity to convey their appreciation Lower Parel (West), of Profit and Loss) and other documents of the Subsidiary to all the members, listeners, advertisers, media agencies, Mumbai – 400 013. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 37 Report on Corporate Governance

Corporate Governance refers to the systems and policies that In compliance with the regulatory requirements and effective 2. Board of Directors influence a corporation’s administration. The core principles of implementation of Corporate Governance practices, the (i) Composition of the Board of Directors and other Corporate Governance practices are fairness, transparency, Company has adopted the following codes of governance in directorships and committee memberships of the accountability and responsibility. Effective Corporate Governance accordance with the applicable regulations of Securities and Directors: emphasizes efficiency, accountability and adaptability to the Exchange Board of India:- changing environment. Corporate Governance is a process to The Company believes that an active, well-informed and ƒƒ Code of Conduct for Prevention of Insider Trading: for manage the business affairs of the company towards enhancing independent Board of Directors is vital to achieve the apex regulating the dealings of the Directors and Employees business prosperity and accountability with the objective of realizing standard of Corporate Governance. The Board of Directors of the Company possessing or likely to possess price long term shareholder value, while taking into account the interests of the Company comprises an optimal combination of sensitive information, pertaining to the securities of the of the other stakeholders. executive, non-executive and independent directors so as Company; to preserve and maintain the independence of the Board. The equity shares of the Company are listed and admitted to ƒƒ Code of Corporate Disclosure Practices: for ensuring timely The Board of Directors comprises seven directors, each dealings on BSE Limited (BSE) and National Stock Exchange of India and adequate disclosure of price sensitive information; being eminent persons with professional experience in Limited (NSE). Pursuant to the provisions of Clause 49 of the Listing varied fields. Brief profile of all the Directors of the Company Agreement, a report on Corporate Governance for the financial year ƒƒ Code of Ethics and Business Principles for Directors and has been furnished separately in the Annual Report. ended March 31, 2012 is furnished below: Employees under the SEBI (Prohibition of Insider Trading) Regulation. The Certificate dated May 25, 2012, issued by the Practicing 1. Company’s Philosophy on Code of Governance These codes and their effective implementation re-affirm Company Secretary on the compliance of conditions Your Company’s philosophy on Corporate Governance the commitment of the Company towards putting in place of Corporate Governance by the Company during the envisages attainment of highest level of integrity, fairness, the highest standards of Corporate Governance in every financial year under review contains an observation. The transparency, equity and accountability in all facets of its sphere of its operations. The Company’s philosophy of observation relates to the period from March 30, 2011 functioning and in its interactions with shareholders, employees, Corporate Governance is not only consistent with the statutory onwards, during which compliances under Clauses government, regulatory bodies, listeners and the community requirements but also underlines our commitment to operate in 49 I (A)(ii) and 49 I (C)(iv) relating to the composition of the at large. Your Company has been upholding fair and ethical the best interest of the stakeholders. Board of Directors of the Company could not be observed. business and corporate practices and transparency in its The Company wishes to place on record that Mr. Deepak The Company has a strong Enterprise Risk Management dealings. Satwalekar (Independent Non- Executive Director) resigned framework which is administered by the Senior Management. from the Board of Directors effective from March 30, 2011. The Company reiterates its commitment to adhere to the This team periodically reviews the risk events that could affect the Post his resignation, the Board of Directors consisted of highest standards of Corporate Governance which is founded Company and initiates appropriate mitigation procedures and three independent directors, three non- executive directors upon a rich legacy of integrity, fairness, transparency, equity and also reviews the progress made with respect to the mitigation and one executive director with effect from the date of accountability. The Company recognizes that good Corporate plans and the effectiveness of the same in addressing the resignation of independent director i.e. March 30, 2011. Governance is a continuing exercise and is committed to follow relevant risk. The Company has laid down procedures to inform Clause 49 I (C) (iv) of the Listing Agreement stipulates that and pursue the highest standard of governance in the overall Board members about the risk assessment and minimization an independent director who resigns from the Board of the interest of the stakeholders. procedures and these procedures are periodically reviewed. Company shall be replaced by a new independent director ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 38

within a period not exceeding 180 days from the day of such resignation. None of the Directors are related with each other (inter-se) The Company has already identified two independent directors. The Company has applied to the Ministry of Information & within the meaning of Clause 49 IV (G) (ia) of the Listing Broadcasting and same is under consideration. The appointment of the independent directors is subject to approval/ permission/ Agreement. no objection from the Ministry of Information & Broadcasting, Government of India and shall be effective only from the date of such None of the above referred Non- Executive Directors have permission. With the approval/ consent/ no objection from the Ministry of Information & Broadcasting, the composition of the Board any material pecuniary relationship or transaction with of Directors will be in compliance with the requirements under Clause 49 of the Listing Agreement. the Company, which would affect the independence or Composition of the Board of Directors, attendance at Board Meetings (BM) held during the financial year under review and at the last judgment of the Board of Directors. Annual General Meeting (AGM) is as follows: The Company has also not entered into any materially Name of the Directors Category Financial Year 2011 – 2012 Attendance at significant transactions with its Promoters, Directors or Board Meeting Last AGM their relatives or with the Management, etc. that may have Mr. Vineet Jain Non- Executive Chairman 5 Yes potential conflict with the interest of the Company at large. Mr. N. Kumar Independent Non- Executive 5 Yes Mr. Ravindra Dhariwal Non- Executive 6 Yes (ii) Board Meetings and Annual General Meeting held: Mr. Ravindra Kulkarni Independent Non- Executive 4 Yes Six Board Meetings were held during the financial year Mr. A. P. Parigi Non- Executive 6 Yes under review, the dates of which were: May 23, 2011; July Mr. Richard Saldanha Independent Non- Executive 6 Yes 21, 2011; November 1, 2011; January 30, 2012; March 14, Mr. Prashant Panday Whole-time Director 6 Yes 2012 and March 15, 2012. Number of directorships, memberships and chairmanships of the Directors of the Company in other public limited companies as The Twelfth Annual General Meeting was held on August on the date of this report is as follows: 30, 2011. Name of the Directors Category As on date of this report No. of other Other Committee positions # (iii) Declaration by the Whole-time Director & Chief Executive Directorships # Member Chairman Officer under Clause 49(I)(D) of the Listing Agreement Mr. Vineet Jain Non- Executive Chairman 10 0 0 regarding adherence to the Code of Conduct is forming Mr. N. Kumar Independent Non- Executive 5 1 4 part of the Report on Corporate Governance. Mr. Ravindra Dhariwal Non- Executive 12 3 0 (iv) A certificate from the Whole-time Director & Chief Executive Mr. Ravindra Kulkarni Independent Non- Executive 7 3 2 Mr. A. P. Parigi Non- Executive 9 4 0 Officer and Chief Financial Officer, as stipulated under Mr. Richard Saldanha Independent Non- Executive 3 1 0 Clause 49 (V) of the Listing Agreement was placed before Mr. Prashant Panday Whole-time Director 0 0 0 the Board of Directors. # For the purpose of considering the number of other directorships and committee positions, all public limited companies, (v) In preparation of the Annual accounts, the applicable whether listed or not, have been included and all other companies including private limited companies, foreign companies and accounting standards have duly been followed and there companies under Section 25 of the Companies Act, 1956, have been excluded and Committees other than Audit Committee are no material departures. and Shareholders’/Investors’ Grievance Committee have been excluded. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 39

3. Audit Committee The Audit Committee comprises of the following Directors and other relevant provisions of the said Clause of the Listing (i) Brief description of terms of reference: as on date of the Report: Agreement are duly complied with, to the extent applicable. The Company recognizes that the Audit Committee Mr. N. Kumar-Chairman (Independent Non- Executive 5. Remuneration/ Compensation Committee is indispensable for ensuring accountability amongst Director) (i) Brief description of terms of reference: the Board, the Management and the Auditors, who are Mr. Ravindra Kulkarni (Independent Non- Executive Director) The Remuneration/ Compensation Committee has been responsible for sound and transparent financial reporting. Mr. Ravindra Dhariwal (Non- Executive Director) constituted to review and recommend the remuneration Mr. Richard Saldanha (Independent Non- Executive Director) The Audit Committee is responsible for overseeing the payable to the executive directors and senior management processes related to the financial reporting and information All the Members of the Audit Committee are financially of the Company based on their performance and defined dissemination. It assists the Board in its responsibility for literate and have relevant accounting and financial assessment criteria. overseeing the quality and integrity of the accounting, management expertise as required under Clause 49 of the Brief terms of reference of the Remuneration/ auditing and reporting practices of the Company and its Listing Agreement. The Company Secretary acts as the Compensation Committee include: compliance with the legal and regulatory requirements. The Secretary to the Audit Committee. primary objective of the Audit Committee of the Company ƒƒ Determining the Company’s policy on specific (iii) Meetings and attendance during the year: is to monitor and effectively supervise the financial remuneration packages for the Company’s Managing/ During the financial year under review, the Audit Committee Joint Managing/ Deputy Managing/ Whole- time/ reporting process of the Company with a view to ensure met five times, i.e. on May 23, 2011; July 21, 2011; Executive Directors, including pension rights and any accurate, timely and proper disclosures and transparency November 1, 2011; January 30, 2012 and March 14, 2012. compensation payment; and integrity of financial reporting. Details of attendance of each member are as follows: ƒƒ Determining and/ or recommending to the Board The role and terms of reference of the Audit Committee Name Number of Audit Committee of Directors, the remuneration packages of the inter alia include review of internal audit reports, review Meetings attended Company’s Managing/ Joint Managing/ Deputy of financial statements, both quarterly and annual, Mr. N. Kumar 4 Managing/ Whole- time/ Executive Directors, including before submission to the Board, review of Management Mr. Ravindra Kulkarni 3 all elements of the remuneration package (i.e. Discussion and Analysis of financial condition and results Mr. Ravindra Dhariwal 5 salary, benefits, bonuses, perquisites, commission, of operations and review of performance of statutory and Mr. Richard Saldanha 5 incentives, stock options, pension, retirement internal auditors and adequacy of internal control systems 4. Subsidiary Company benefits, details of fixed component and performance and other matters in conformity with the requirements of the As on date of this Report, the Company has one wholly owned linked incentives along with the performance criteria, Listing Agreement entered into with the Stock Exchanges subsidiary company, viz. Alternate Brand Solutions (India) service contracts, notice period, severance fees, and applicable provisions of the Companies Act, 1956. Limited. The Audit Committee of the Company reviews inter etc.); (ii) Composition of the Audit Committee: alia the financial statements of its subsidiary company etc. ƒƒ Reviewing and determining the remuneration The Audit Committee of the Company is constituted in as stipulated under Clause 49 of the Listing Agreement. The packages of the Company’s top executives/ key conformity with the provisions of Clause 49 of the Listing minutes of the Board Meetings of unlisted subsidiary company management personnel who are one level below Agreement and Section 292A of the Companies Act, 1956. have been placed at the Board meetings of the Company the Managing/ Joint Managing/ Executive Directors, ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 40

including all elements of their remuneration the attendance of each member are as follows: Notes: package (i.e. salary, benefits, bonuses, perquisites, Name of the Directors Number of Remuneration/ ƒƒ Mr. Prashant Panday is holding the office of Whole- commission, incentives, stock options, pension, Compensation Committee time Director designated as ‘Executive Director & Chief retirement benefits, details of fixed component Meetings attended Executive Officer’ of the Company with effect from July 1, and performance linked incentives along with the Mr. N. Kumar 3 Mr. Ravindra Kulkarni 3 2010. performance criteria, service contracts, notice period, Mr. Ravindra Dhariwal 4 ƒƒ Appointment, terms, conditions and payment of severance fees, etc.); Mr. Richard Saldanha 4 remuneration to the Whole-time Director is governed by the ƒƒ Implementing, supervising and administering (iv) Remuneration policy: resolution(s) passed by the Remuneration/ Compensation the present and future Employee Stock Option The remuneration policy of the Company is based upon Committee, Board of Directors and Members of the Scheme(s); well defined criteria such as success and performance of its Company and approval from the Government of India, ƒƒ Any other matter duly specified under the applicable managerial persons and the Company, industry benchmarks, Ministry of Corporate Affairs, if and to the extent necessary. provisions of the Companies Act, 1956, read with the profile of the incumbent, the responsibilities shouldered, The remuneration structure comprises salary, incentive Clause 49 of the Listing Agreement. etc. Through its remuneration policy, the Company endeavors allowance, perquisites, allowance, contribution to to attract, retain, develop and motivate its high skilled and provident fund and superannuation, etc. (ii) Composition, name of members and Chairperson: dedicated workforce. ƒƒ The aforesaid appointment may be terminated by either The Remuneration/ Compensation Committee of the Company The Non-Executive Directors did not draw any remuneration party by giving to other party not less than three months’ is constituted in conformity with Clause 49 of the Listing (other than sitting fees) from the Company during the financial prior notice in writing of such termination or payment in Agreement read with Schedule XIII and other applicable year under review. lieu of notice. provisions of the Companies Act, 1956. (v) Details of remuneration: ƒƒ Mr. Prashant Panday is holding 26900 equity shares of the The Remuneration/ Compensation Committee comprises the (a) Details of remuneration paid to the Whole-time Director Company as on the date of this Report. following Directors as on date of the Report: during the year 2011-2012 are given below: Mr. N. Kumar (Independent Non- Executive Director) ƒƒ No option was granted to any Director of the Company Name (Amount in `) under any scheme for grant of stock options during the Mr. Ravindra Kulkarni (Independent Non- Executive Director) Mr. Prashant Panday, Whole- time Director financial year under review. Mr. Ravindra Dhariwal (Non- Executive Director) Salary 20,102,555 Mr. Richard Saldanha (Independent Non- Executive Director) Benefits* 536,340 Perquisites 15,000 (iii) Meetings and attendance during the year: Total 20,653,895 During the financial year under review, the Remuneration / Compensation Committee met four times, i.e. on May 23, 2011; * Also includes Company’s contribution to Provident and July 21, 2011; January 30, 2012 and March 15, 2012. Details of Superannuation Funds. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 41

(b) Details of sitting fees paid to the Non- Executive (Prohibition of Insider Trading) Regulations, 1992. Sr. Name of the Directors No. of equity shares Directors for the financial year 2011- 2012: No. held The Shareholders’/ Investors’ Grievances Committee is 1. Mr. Vineet Jain Nil headed by a Non- Executive Director and comprises of the Name of the Non- Executive Directors Sitting Fees (In `) 2. Mr. N. Kumar 5580 following Directors: Mr. Ravindra Dhariwal - Chairman Mr. Vineet Jain 100,000 3. Mr. Ravindra Kulkarni Nil Mr. A. P. Parigi - Member Mr. N. Kumar 240,000 4. Mr. Ravindra Dhariwal Nil (ii) Name and designation of Compliance Officer: Mr. Ravindra Kulkarni 200,000 5. Mr. A. P. Parigi 8542 Mr. Mehul Shah, Vice President - Compliance & Company Mr. Ravindra Dhariwal 300,000 6. Mr. Richard Saldanha Nil Secretary is the Compliance Officer of the Company. Mr. A. P. Parigi 120,000 6. Shareholders’/ Investors’ Grievance Committee (iii) Shareholders’ complaints: Mr. Richard Saldanha 300,000 (i) Constitution and terms of reference of the Committee: Number of shareholders’ complaints/ queries, 5 The Company has always valued its investors’ and (c) Criteria for making payments to Non- Executive etc. received during the financial year 2011- stakeholders’ relationships. In order to ensure the Directors: 2012 proper and speedy redressal of shareholders’/ investors’ Non- Executive Directors of the Company are paid sitting Number of complaints/ queries, etc. not 0 complaints, the Shareholders’/ Investors’ Grievances fees of ` 20,000/- (Rupees twenty thousand only) per resolved to the satisfaction of shareholders as Committee was constituted. The constitution and terms meeting during the financial year under review, subject on March 31, 2012. (Same has been resolved of reference of the Shareholders’/ Investors’ Grievance to deduction of applicable taxes, levies, etc., if any, for in consonance with the applicable provisions Committee is in conformity with the provisions of Clause attending; of the relevant rules/ regulations and acts for 49 of the Listing Agreement entered into with the Stock the time being in force). ƒƒ Meeting of the Board of Directors; Exchanges. The Shareholders’/ Investors’ Grievances No. of pending complaints/ queries, etc. 0 ƒƒ Meeting of the Audit Committee; and Committee is empowered to look into redressal of shareholders’ and investors’ complaints like transfer (iv) Meetings and attendance during the year: ƒƒ Meeting of the Remuneration/ Compensation of shares, non-receipt of balance sheet, non-receipt of During the financial year under review, the Shareholders’/ Committee. declared dividends and other miscellaneous complaints. Investors’ Grievances Committee met four times, i.e. (d) Number of shares and convertible instruments of the The Committee also ensures implementation and on May 23, 2011; July 21, 2011; November 1, 2011 and Company held by Non- Executive Directors as on the compliance of the Company’s Code of Conduct for January 30, 2012. All the Members of the said Committee date of this Report, are as follows: Prohibition of Insider Trading in conformity with SEBI attended all the Committee meetings. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 42

(v) Disclosure(s) pertaining to unclaimed shares: Disclosure pursuant to the Clause 5A of the Listing Agreement in relation to unclaimed shares, based on the disclosure furnished by Karvy Computershare Private Limited, the Registrar and Transfer Agents (R&TA) of the Company, for the financial year ended March 31, 2012, is as below:

Clauses of Particulars Remarks the Listing Agreement Clause 5A(g)(i) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of Number of Shareholders – 42 and the year i.e. on April 1, 2011; Number of Outstanding shares –1786 equity shares. Clause 5A(g)(ii) Number of shareholders who approached issuer for transfer of shares from suspense account during the year 2011- 1 shareholder approached for transfer of 40 shares. 2012; Clause 5A(g)(iii) Number of shareholders to whom shares were transferred from suspense account during the year 2011-2012; 40 shares were transferred to 1 shareholder. Clause 5A(g)(iv) Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year; 41 Shareholders with outstanding equity shares of 1746. Clause 5A(g)(v) Voting rights on these shares. Voting rights on the equity shares lying in the suspense account shall remain frozen till the rightful owner of such equity shares claims those equity shares.

7. General Body Meetings (i) Annual General Meetings: Location, date and time of the Annual General Meeting (AGM) held during the preceding three years and the Special Resolutions passed thereat are as follows:

Year Location Date and Time Special Resolution(s) passed 2010 – 2011 Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to August 30, 2011 To enable payment of commission to non executive directors of the (Twelfth AGM) Sachivalaya Gymkhana, Near Mantralaya, 3.00 p.m. Company pursuant to section 309 of the Companies Act, 1956 Nariman Point, Mumbai – 400021. 2009 – 2010 Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to September 7, 2010 To approve the appointment and terms of appointment including (Eleventh AGM) Sachivalaya Gymkhana, Near Mantralaya, 3.00 p.m. remuneration payable to Mr. Prashant Panday, Whole-time Director Nariman Point, Mumbai – 400021. of the Company with effect from July 1, 2010. 2008 – 2009 Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Women’s September 4, 2009 No special resolution passed. (Tenth AGM) University (Patkar Hall), 1, Nathibai Thackersey Road, New Marine Lines, 3.00 p.m. Queens Road, Mumbai – 400 020. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 43

(ii) Special Resolution passed through Postal Ballot: been imposed on the Company by Stock Exchanges or Listing Agreement and are published in the newspapers. During the financial year under review, no resolution was SEBI or any other statutory authority. The Company has also displayed the results, as specified passed through postal ballot. under Clause 41 of the Listing Agreement, on the (iii) Whistle Blower policy and affirmation that no personnel (iii) Person who conducted the postal ballot exercise: Company’s website i.e. www.enil.co.in has been denied access to the Audit Committee: Not applicable. (ii) Newspapers wherein results are normally published: The Board of Directors affirms and confirms that no Financial Express (English) and Maharashtra Times (iv) Whether any special resolution is proposed to be personnel has been denied access to the Audit Committee. (Marathi, the regional language). conducted through postal ballot: No. Bennett, Coleman & Company Limited (‘BCCL’)- the (v) Procedure for postal ballot: Ultimate Holding Company has introduced a policy of (iii) Any Website, where displayed: The Company will comply with the requirements of postal ‘Whistle Blower’ to reinforce the ‘Code of Conduct’ across www.enil.co.in ballot as and when such matter arises requiring approval BCCL and its group companies. Its applicability has been (iv) Whether Website also displays official news releases: of the Members by such process as per Section 192A and extended to the Company. other applicable provisions of the Companies Act, 1956, The Company has maintained a functional website (iv) Details of compliance with mandatory requirements read with the Companies (Passing of Resolution by Postal [www.enil.co.in] containing basic information about the and adoption of the non mandatory requirements of Ballot) Rules, 2001. company e.g. details of its business, financial information, this clause: shareholding pattern, compliance with corporate 8. Other Disclosures The Company has complied with all the mandatory governance, contact information of the designated (i) Disclosures on materially significant related party requirements of Clause 49 of the Listing Agreement officials of the company who are responsible for assisting transactions that may have potential conflict with the entered into with the Stock Exchanges, read with the and handling investor grievances, etc. interests of the Company at large: observation of the Practicing Company Secretary in his (v) Presentations made to institutional investors or to the During the financial year under review, there were no certificate, dated May 25, 2012, relating to compliance with analysts: materially significant related party transactions with the the aforesaid Clause 49 and response of the Company The presentations made to institutional investors/ analyst Promoters, Directors, etc. that may have potential conflict thereto under Para 2 (Board of Directors) of the Report are posted on the Company’s website i.e. www.enil.co.in with the interests of the Company at large. on Corporate Governance. The status of compliance with (ii) Details of non-compliance by the Company, penalties, the non-mandatory requirements of this clause has been 10. General Shareholder Information strictures imposed on the Company by Stock detailed hereof. (i) Annual General Meeting (AGM): Exchange or SEBI or any statutory authority, on any Day, Date, time : Tuesday, August 14, 2012 at 3.00 p.m. 9. Means of Communication matter related to capital markets, during the last three Venue : Y. B. Chavan Auditorium, years: (i) Quarterly/ Half yearly/ Annual results: Gen. Jagannath Bhosale Marg, There has been no instance of non-compliance by the Quarterly/ Half yearly/ Annual results are regularly Next to Sachivalaya Gymkhana, Company on any matter related to capital markets during submitted to the Stock Exchanges where the securities of Near Mantralaya, Nariman Point, the last three years and hence no penalties, strictures have the Company are listed pursuant to the provisions of the Mumbai - 400021. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 44

Stock Market data – BSE

(ii) Financial year: April 1, 2011 to March 31, 2012. Month Open Price High Price Low Price Close Price No. of Shares Total Turnover (` In lacs) April-11 251.70 267.00 238.00 242.05 199155 495.77 (iii) Date of Book closure: Tuesday, August 7, 2012 to Tuesday, August 14, 2012, (both days inclusive) for taking May-11 241.00 255.20 227.85 242.95 63587 154.03 record of the Members of the Company for the purpose of June-11 244.00 285.70 236.00 257.50 916038 2415.77 AGM. July-11 258.10 295.90 253.80 262.75 1493183 4106.31 August-11 264.00 267.80 229.05 260.90 203809 514.34 (iv) Dividend Payment Date: Not Applicable September-11 261.80 295.00 246.70 261.05 290033 778.38 (v) Listing on Stock Exchange: The Company’s shares October-11 267.00 272.50 242.10 256.05 185823 475.02 are listed on the BSE Limited (BSE), Phiroze Jeejeebhoy November-11 255.00 267.00 211.30 247.65 107579 265.37 Towers, Dalal Street, Mumbai - 400 001 and the National December-11 251.00 257.00 208.00 220.90 48396 112.73 Stock Exchange of India Limited (NSE), Exchange Plaza, January-12 220.05 232.00 194.00 229.95 354876 743.66 Plot No. C/1, G Block, Bandra Kurla Complex, Bandra- February-12 228.00 244.80 215.10 236.50 107914 247.22 (East), Mumbai – 400 051. The Company has paid the March-12 236.00 236.00 194.30 217.50 137485 292.70 annual listing fees for the year 2012 - 2013, as applicable, Stock Market data – NSE to BSE and NSE. Month Open (`) High (`) Low (`) Close (`) No. of Shares Total Turnover (` In lacs) (vi) Stock code : April-11 246.20 268.25 239.00 241.25 298765 753.38 BSE Scrip Code 532700 May-11 241.10 255.85 226.10 242.75 349633 847.69 NSE Trading Symbol ENIL June-11 243.50 285.00 236.25 257.35 2357461 6193.71 ISIN Number for NSDL & CDSL INE265F01028 July-11 256.20 295.80 253.40 264.05 4479570 12295.88 August-11 264.10 268.00 230.10 262.90 805235 2030.61

(vii) Market Price Data: High, Low during each month in last September-11 255.15 298.35 245.10 260.35 1256753 3359.31 financial year* October-11 262.00 272.30 241.10 255.55 594419 1516.41 November-11 254.00 267.90 213.00 249.30 421465 1040.85 The performance of the equity shares of the Company on December-11 250.00 258.30 208.30 220.70 207954 476.67 the BSE Limited (BSE) and the National Stock Exchange of January-12 222.00 234.00 194.00 230.95 1367268 2865.88 India Limited (NSE) depicting the liquidity of the Company’s February-12 226.10 248.00 215.10 238.10 582011 1327.29 equity shares for the financial year ended March 31, 2012, on the said exchanges, is as follows: March-12 235.00 237.00 195.10 219.70 543979 1161.27 * (Source: This information is compiled from the data available on the website of BSE and NSE) ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 45

(viii) Stock Performance: Company, in order to expedite the process, has delegated the where the securities of the Company are listed. power of approving transfer, transmission, etc. of the securities Share Price Performance (2011-2012) (xi) Dematerialization of shares and liquidity: of the Company to the R & TA. Securities lodged for transfer, 25000 300 99.99 % of the paid up equity share capital of the Company are transmission, etc. are normally processed within the stipulated 20000 250 in dematerialized form as on March 31, 2012. Trading in equity time as specified in the Listing Agreement and other applicable 200 shares of the Company is permitted only in dematerialized form 15000 provisions of the Companies Act, 1956. The Company has duly 150 as per the notification issued by SEBI. The trading / liquidity 10000 obtained certificates on half yearly basis from the Practicing details are given in clause (vii) hereinbefore. 100 Company Secretary, certifying due compliance with the 5000 (xii) Outstanding GDRs / ADRs / Warrants or any Convertible 50 formalities of share transfer as required under Clause 47 (c)

BSE Sensex and S&P CNX NIFTY Instruments, conversion date and likely impact on Equity: 0 0 of the Listing Agreement entered into with Stock Exchanges Nil. and submitted a copy of the certificate to the Stock Exchanges Entertainment Network (India) Limited [ENIL] Jul-11 Apr-11 Oct-11 Jan-12 Jun-11 Mar-12 Feb-12 Sep-11 Nov-11 Aug-11 Dec-11 May-11

BSE Sensex S&P CNX NIFTY ENIL (xiii) Distribution of shareholding as on March 31, 2012: Category No. of Members % of Members Total Shares % of Shares 1 - 5000 16245 97.15 894272 1.88 (ix) Registrar and Transfer Agents (R & TA): 5001 - 10000 220 1.32 177234 0.37 Karvy Computershare Private Limited, Unit:- Entertainment 10001 - 20000 105 0.63 158403 0.33 Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, 20001 - 30000 41 0.25 106831 0.22 Madhapur, Hyderabad-500 081, Phone: 040-44655000, Fax: 30001 - 40000 14 0.08 51169 0.11 040-23420814. 40001 - 50000 20 0.12 96022 0.20 (x) Share Transfer System: 50001 - 100000 25 0.15 177923 0.37 Pursuant to the provisions of the Listing Agreement entered 100001 & Above 51 0.31 46008561 96.52 into with the Stock Exchanges, the Board of Directors of the Total 16721 100.00 47670415 100.00

As on March 31, 2012 and as on the date of this report, none of the Promoters and Promoters’ Group of the Company have pledged any shares of the Company. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 46

Shareholding pattern of the Company (as on March 31, 2012):

Category Category of shareholder Number of shareholders Total Number of shares Total shareholding as a code percentage of total number of shares (A) Shareholding of Promoter and Promoter Group (1) Indian * (a) Bodies Corporate 2 33918400 71.15 Sub-Total (A)(1) 2 33918400 71.15 (2) Foreign Sub-Total (A)(2) 0 0 0 Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) 2 33918400 71.15 (B) Public shareholding (1) Institutions (a) Mutual Funds/ UTI 9 257840 0.54 (b) Financial Institutions/ Banks 2 1170 0.00 (c) Foreign Institutional Investors 21 7483700 15.70 Sub-Total (B)(1) 32 7742710 16.24 (2) Non-institutions (a) Bodies Corporate 331 3371347 7.07 (b) Individuals - i. Individual shareholders holding nominal share capital up to ` 1 lakh. 16147 1429944 3.00 ii. Individual shareholders holding nominal share capital in excess of ` 1 lakh. 18 1163618 2.44 (c) Other Non Resident Indians 133 26943 0.06 Trust 3 42 0.00 Clearing Members 55 17411 0.04 Sub-Total (B)(2) 16687 6009305 12.61 Total Public Shareholding (B)= (B)(1)+(B)(2) 16719 13752015 28.85 TOTAL (A)+(B) 16721 47670415 100.00 (C) Shares held by Custodians and against which Depository Receipts have been issued 0 0 0.00 GRAND TOTAL (A)+(B)+(C) 16721 47670415 100.00

*The Indian Promoter Group comprises of Times Infotainment Media Limited (TIML) and Bennett, Coleman and Company Limited. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 47

(xiv) Location of Studios:

1. Ahmedabad The Times of India Press Premises, Vejalpur, Ahmedabad – 380 051. 2. Aurangabad F 8, 9, 10, 5th Floor, Aurangabad Business Centre, Adalat Road, Opposite Session Court, Aurangabad – 431 005. 3. Bengaluru 39/2, 3rd Floor, Sagar Building, Banerghatta Road, Bengaluru – 560 029. 4. Bhopal 2nd Floor, C. P. Square, 2, Malviya Nagar, Opposite Old Vidhansabha, Bhopal – 462 003. 5. Chennai 6th & 7th Floor, Fathima Akhtar Court, No. 453, Anna Salai, Teynampet, Chennai – 600 018. 6. Coimbatore 8th Floor, Classic Towers, 1547 Trichy Road, Coimbatore – 641 018. 7. Delhi Plot No. 6, 3rd Floor, Sector 16A, Film City, Noida, Uttar Pradesh- 201 301. 8. Hyderabad 1st Floor, Queen’s Plaza, Sardar Patel Road, Opposite Begumpet Police Station, Begumpet, Secunderabad – 500 003. 9. Indore 9th Floor, Industry House, 15 AB Road, Indore – 452 001. 10. Jabalpur 2nd Floor, Shukla Bhawan, 1415, Wright Town, Jabalpur – 482 002. 11. Jaipur Prestige Tower, 6th Floor E – 1, Amrapali Road, Vaishali Nagar, Jaipur – 302 021. 12. Jalandhar 6th Floor, Shakti Tower, Adjoining Swani Motors, GT Road, Near BMC Chowk, Jalandhar City – 144 001. 13. Kanpur 14/ 113, Kan Chambers, 6th Floor, Civil Lines, Kanpur – 208 001. 14. Kolhapur Gemstone, Part B, 1st Floor, Rao Bahadur Rajirao Vichare Complex, 517/2 E Ward, New Shahupuri, Kolhapur – 416 001. 15. Kolkatta Shantiniketan Building, 13th Floor, 8, Camac Street, Kolkata – 700 017. 16. Lucknow 6th Floor, Plot TV 57/V Shalimar Tower, Vibhuti Khand, Gomtinagar, Lucknow – 226 010. 17. Madurai 2nd Floor, Nataraja Complex, Opposite New District Court, 128 Melur Road, KK Nagar, Madurai – 625 020. 18. Mumbai 4th Floor, ‘A’ Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013. 19. Mangalore 5th and 6th Floor, Maximus Commercial Complex, LHH Road, Opposite KMC, Mangalore – 575 001. 20. Nagpur # 1, 2nd Floor, Narang Towers, 27 Palam Road, Civil Lines, Nagpur – 440 001. 21. Nashik 3rd Floor, United Legend, Plot 1, Serial 733/1/2, Off Village Nashik, Link Road, Opposite Parijat Nagar Bus Stop, Nashik – 422 005 22. Panajim 1st Floor, Vivenda De Hassan Building, D. B. Marg, Miramar PTS 16, Miramar, Panjim, Goa – 403 001. 23. Patna Times of India Building, Fraser Road, Patna – 800 001. 24. Pune 3rd Floor, Krishna Keval Commercial Complex, Above ICICI Bank, Kondhwa Khurd, Pune – 411 048. 25. Raipur 1st Floor, Chawla Towers, Telibandha Ward No. 28, Near Bottle House, Shankar Nagar, Raipur – 492 007. 26. Rajkot Property No. 23,24/P, Radhika House, Near Kinnari Flats, Opposite Princess School, Kalawad Road, Rajkot – 360 007. 27. Surat 601, International Trade Center, 2/1932/2-A, Majuragate Crossing, Ring Road, Surat – 395 002. 28. Thiruvananthapuram 3rd Floor, Andoor Buildings, General Hospital Road, Vanchiyoor P.O., Thiruvananthapuram – 695 035. 29. Vadodara Property No. 1001/1002, 10th Floor, Gunjan Tower, Off. Alembic - Gorwa Road, Vadodara – 390 023. 30. Varanasi 2nd floor, Unit 201-A & 204, RH Tower, The Mall, Cantt, Varanasi – 221 002. 31. Vijaywada 4th Floor, ‘Matha Towers’, Bishop’s House, Door No. 59 A 1-7, Vijayawada – 520 010. 32. Vishakhpatnam 5th Floor, Varun Towers, Kasturba Marg, Siripuram, Vishakhapatnam – 530 003. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 48

(xv) Address for correspondence: in the aggregate, a period of nine years, on the Board of the 6. Mechanism for evaluating non-executive Board Members: Investor Correspondence Company. The Company ensures that all the persons being No formal mechanism for evaluation of the performance of Non- appointed as Independent Directors of the Company have the executive Directors is in place as on date of this Report. (a) For share transfer / dematerialisation of shares / other requisite qualifications and experience which would be of use to queries relating to the securities: 7. Whistle Blower Policy: the Company and which, in the opinion of the Company, would The Company has adopted the Code of Ethics & Business Karvy Computershare Private Limited, Unit:- Entertainment enable them to contribute effectively to the company in their Principles for Directors and Employees. Bennett, Coleman & Network (India) Limited, Plot No. 17 to 24, Vittal Rao Nagar, capacity as Independent Directors. Company Limited (‘BCCL’)- the Ultimate Holding Company Madhapur, Hyderabad - 500 081, Phone: 040 – 44655000, 2. Remuneration Committee: has introduced a policy of ‘Whistle Blower’ to reinforce the Fax: 040 – 23420814. As stated earlier, the Company has constituted Remuneration/ ‘Code of Conduct’ across BCCL and its group companies. Its (b) For queries on Annual Report or investors’ assistance: Compensation Committee to review and recommend the applicability has been extended to the Company. Mr. Mehul Shah, remuneration of the Managing/ Executive Director based on his/her performance and defined assessment criteria. Details Vice President - Compliance & Company Secretary, For and on behalf of the Board of Directors Trade Gardens, Ground Floor, Kamala Mills regarding composition and scope of the Remuneration/ Compensation Committee are given in the earlier part of this Compound, Senapati Bapat Marg, Lower Parel (West), Vineet Jain Report. Mumbai – 400 013. Ph: 022 – 67536983. Mumbai, May 25, 2012 Chairman [email protected] 3. Shareholder Rights: Investors can register their complaints/ grievances on the The Company’s quarterly and half-yearly results are furnished to Registered Office: Company’s designated e-mail id: the Stock Exchanges and are also published in the newspapers 4th Floor, ‘A’ Wing, [email protected] and on the website of the Company and therefore results were Matulya Centre, not separately sent to the Members. Quarterly/ Half yearly/ Senapati Bapat Marg, The aforesaid e-mail id and other relevant details Annual results of the Company are also displayed on the Lower Parel (West), have been displayed on the website of the Company website of the Company i.e. www.enil.co.in Mumbai – 400 013. i.e. www.enil.co.in 4. Audit qualifications: Non- Mandatory Requirements There are no audit qualifications in the Audit Report for the The Company has complied with the following non-mandatory financial year under review. requirements of Clause 49 of the Listing Agreement: 1. The Board: 5. Training of Board Members: The Company does not defray any expenses of the Chairman’s No training is provided to the Board Members as on date of Office. Independent Directors do not have a tenure exceeding, this Report. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Report on Corporate Governance 49

DECLARATION BY THE CEO UNDER CLAUSE 49(I)(D) OF THE LISTING AGREEMENT REGARDING ADHERENCE TO THE CODE OF CONDUCT

To the best of our knowledge and belief, this is to affirm and declare, on behalf of the Board of Directors with the provisions of the Code of Conduct for the financial year ended March 31, 2012. of the Company and senior management personnel, that: For and on behalf of the Board of Directors and ƒƒ The Board of Directors has laid down a code of conduct for all Board members and Senior Senior Management Personnel Management of the Company [‘the Code of Conduct’];

ƒƒ The Code of conduct has been posted on the website of the Company; Prashant Panday Mumbai, May 25, 2012 Executive Director & Chief Executive Officer ƒƒ All the Directors and Senior Management personnel have affirmed their compliance and adherence

CERTIFICATE

To the Members of ENTERTAINMENT NETWORK (INDIA) LIMITED

We have examined the compliance of conditions of Corporate Governance by ENTERTAINMENT period, compliances under the Clauses 49 I (A)(ii) and 49 I (C)(iv) relating to the composition of the Board NETWORK (INDIA) LIMITED (“the Company”), for the financial year ended March 31, 2012, as stipulated of Directors of the Company could not be observed. in Clause 49 of the Listing Agreement entered into with the BSE Limited (BSE) and the National Stock We further state that such compliance is neither an assurance as to the future viability of the Company nor Exchange of India Limited (NSE). of the efficiency or effectiveness with which the management has conducted the affairs of the Company. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company For Hemanshu Kapadia & Associates for ensuring the compliance with the conditions of Corporate Governance as stipulated in the said Clause Company Secretaries 49. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the management, we certify that the Company has complied Hemanshu Kapadia with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Proprietor Agreement subject to one observation during the period from March 30, 2011 onwards. During the said Mumbai, May 25, 2012 C.P. No. 2285 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 50

Statements in this Management Discussion and Analysis describing medium term. With large output gaps in advanced economies, a tumble. The advertising industry is like an early sensor of the Company’s objectives, projections, estimates, expectations or they must also calibrate policies with a view to supporting still- economic growth. A looming economic slowdown is quickly predictions may be ‘forward looking statements’ within the meaning weak growth over the near term”. picked up by the advertising industry, since the first impact of applicable securities laws and regulations. Actual results could The world economy is expected to remain fragile and to see of belt tightening undertaken by companies in response to a differ materially from those expressed or implied. Important factors a further slowdown in growth in CY12 to 3.5%. It is however slowdown is immediately felt on the advertising budgets. that could make a difference to the Company’s operations include expected to gain some momentum in CY13 with a growth rate According to ZenithOptimedia Adspend Forecast Update Dec cyclical demand and pricing in the Company’s principal markets, of 4.1%. 2011, the Global Ad spends were up by just 3.5% in CY11, in changes in Government regulations, tax regimes, economic The advanced economies grew at just 1.6% in CY11 and line with the overall weak economic sentiment during the year. developments within India and the countries in which the Company are expected to grow at 1.4% and 2.0% in CY12 and CY13 While the agency pegs expected CY12 growth slightly higher at conducts business and other incidental factors. The Company respectively. The emerging economies are however likely to 4.7%, it remains a tentative estimate at best considering that the undertakes no obligation to publicly update or revise any forward shape up better with a growth of 6.2% in CY11 and estimated economic activity is expected to slow down further. What may looking statements, whether as a result of new information, future growth of 5.7% and 6.0% in CY12 and CY13 respectively. explain the agency’s optimism about CY12 growth are perhaps events, or otherwise. Readers are cautioned not to place undue the Quadrennial events (Summer Olympics, US elections and reliance on these forward looking statements that speak only as of Indian economy – short term slowdown but long term European Football Championship) during the year. their dates. optimism In his budget speech this year, the Honorable Finance Minister Total global ad spends, forecast at $458.4 billion for CY11, A. Media Industry Structure and Developments stated that the economy’s growth rate for FY12 was expected are expected to grow cumulatively by about 16.7% to roughly World economy continues to struggle to be 6.9%, a slowdown from the 8.4% in the preceding 2 years. $534.4 billion in CY14. According to the world economic outlook report by the IMF This slowdown is attributable mainly to deceleration in industrial The agency’s forecast is more positive for developing countries. released in April 2012, the world economy has grown at just growth. While the government believes that the growth rates will improve to 7.6% in FY13, there are others who believe the According to the report, the top ten developing markets will 3.9% this year compared to 5.3% in CY10. The overall state of growth could fall below even the FY12 number. deliver half the growth in global adspend between CY11 and the world economy was very well captured in the title for this CY14. Overall, the developing markets are expected to increase year’s report ‘Growth Resuming, Dangers Remain’. While GDP growth slowed down significantly in FY12, the Indian their share of the global ad market from 32.3% to 35.9% in the economy continued to be one of the fastest growing major The report said “Improved activity in the United States during next three years. economies. While the current state of the economy is a worry, the second half of 2011 and better policies in the euro area in there is optimism about the recovery and about growth getting response to its deepening economic crisis have reduced the The Indian Media & Entertainment Industry is set for growth back on track in the long run. threat of a sharp global slowdown. Accordingly, weak recovery The entertainment segments of the M&E space are expected will likely resume in the major advanced economies, and activity Global Advertising to pick up steam to grow faster than the core media segments in the next four is expected to remain relatively solid in most emerging and The Advertising industry depends on the overall economic years. The growth is expected to be led by Gaming, Animation developing economies. However, the recent improvements are sentiment for growth. A fast growing country sees an even faster and VFX while music and films are expected to trail behind. The very fragile. Policymakers need to continue to implement the growing advertising industry. However, when the economy overall M&E industry is expected to grow at a CAGR of 14.9% till fundamental changes required to achieve healthy growth over the slows down, the advertising industry is the first sector to take CY16 reaching a size of ` 1457 Bn by CY16. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 51

The forecast for the media & entertainment industry is as follows: Radio growth to outpace other traditional media

INR Bn 2010 2011 2012 (P) 2013 (P) 2014 (P) 2015 (P) 2016 (P) CAGR As per the FICCI KPMG M&E report CY12, Radio is expected to be (2011-16) the fastest growing traditional media segment in the next four years. Television 297.0 329.0 380.0 435.0 514.0 618.0 735.0 17% It is expected to outpace all other traditional media segments. With a Print 192.9 208.8 226.0 246.8 270.0 294.9 323.4 9% CAGR of 20.7% till CY16, it is expected to outpace TV, Print and OOH, Film 83.3 92.9 100.0 109.7 121.1 134.5 150.3 10% which will grow at CAGR of 14.7%, 11.5% and 10% respectively. Radio 10.0 11.5 13.0 16.0 20.0 24.0 29.5 21% Radio is expected to grow from the current ` 11.5 Bn to ` 29.5 Bn Music 8.6 9.0 10.0 11.3 13.1 15.4 18.2 15% by CY16. Out of Home 16.5 17.8 19.5 21.5 23.6 26.0 29.0 10% In line with the overall weak sentiment in CY12, Radio is also expected Animation and VFX 23.6 31.0 36.3 43.0 51.1 61.0 69.0 17% to grow at a modest 13% in CY12 becoming ` 13 Bn in size. From Gaming 10.0 13.0 18.0 23.0 29.0 37.0 46.0 29% there on, it is expected to grow faster and reach a size of ` 16.0 Digital Advertising 10.0 15.4 19.9 25.8 33.5 43.7 57.0 30% bn, 20.0 bn, 24.0 bn and 29.5 bn in CY13, CY14, CY15 and CY16 Total (rounded off) 652.0 728.0 823.0 932.0 1076.0 1254.0 1457.0 14.9% respectively. (Source: FICCI KPMG M & E report 2011) B. Radio Industry – Future Outlook, Opportunities and Indian Advertising Industry – Temporary weakness….but long term robust growth Threats According to the FICCI KPMG M&E report 2012, the advertising industry grew by nearly 13.1% in CY11. This is slower than the 16.7% growth 1) Phase 3 policy that was recorded last year. While CY12 is expected to witness only a modest growth of around 12.3%, the longer term forecast for the Indian The long awaited announcement of the Phase 3 policy for Advertising market remains optimistic and higher. private FM Radio was finally made in July 2011. This has paved The advertising industry is expected to grow at a CAGR of 14.3% to become ` 586 Bn by CY16. the way for a significant increase in the reach of private FM across the country. With 839 new frequencies to be added to Advertising Revenue estimates the present 245, the number of cities/towns where private FM INR Bn 2010 2011 2012 (P) 2013 (P) 2014 (P) 2015 (P) 2016 (P) CAGR becomes available would reach 313 – more than 3.5 times of (2011-16) the present 86. Television 103.0 116.0 130.0 148.0 170.0 197.0 230.0 14.7% Salient features of the policy: Print 126.0 139.4 154.1 172.4 192.9 215.0 240.6 11.5% The salient features of the Phase 3 policy and their likely impact Radio 10.0 11.5 13.0 16.0 20.0 24.0 29.5 20.7% on the radio industry and ENIL are as follows: Out of Home 16.5 17.8 19.5 21.5 23.6 26.0 29.0 10.0% a) Multiple frequencies: Digital Advertising 10.0 15.4 19.9 25.8 33.5 43.7 57.0 29.9% Apart from geographical growth (from 86 to 313 towns), Total (rounded off) 266.0 300.0 337.0 384.0 440.0 506.0 586.0 14.3% the other major part of Phase 3 policy is the removal of (Source: FICCI KPMG M & E report 2012) restriction on ownership of more than one channel in ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 52

one city. Broadcasters will now be allowed to own up to for better ROIs in the long run. With a longer period like the previous policy, networking was only permitted 40% of the available frequencies in a town, rounded off this, the business will have greater ability to absorb initial between C and D category towns. to the nearest integer. For eg. if the city of Mumbai has 9 losses also. Impact on the Industry: private FM frequencies, a single broadcaster could own c) Tradability of licenses: This policy will make smaller stations viable and will help in and operate as many as 4 channels. With this initiative, the the spread of FM across the country – even in the very small Change of ownership has been permitted after 3 years of artificial restriction on ownerships (that doesn’t exist in any towns with population as low as 1 lac. Further, it will allow operationalization of a license instead of 5 years at present. other media segment) has finally been removed. richer content from the bigger towns to reach the smaller This policy will help the FM industry become like any other Impact on the Industry: towns which were hamstrung by budget constraints to industry where acquiring and demerging business units produce it locally. The policy will also help create cost With more channels available to a single broadcaster, a are part of a routine business strategy. synergies (talent, marketing, broadcasting premises and number of different programming formats will become Impact on the Industry: administrative) and reduce overall costs of operations, available. This will increase programming diversity and This policy will help the FM industry consolidate. At thus improving profitability of radio stations. will help attract new listeners to the broadcaster and to the present there are too many broadcasters, many of them FM medium overall. Further, broadcasters will be able to e) News & Current Affairs allowed: uninterested in running their stations after the losses they offer a better reach and more distinct target segments to Radio broadcasters will now be permitted to broadcast have suffered since the launch. But these broadcasters advertisers and enhance their advertising revenues. news and current affairs but the sourcing of such content are not allowed to sell their stakes in their companies for b) License Period: would be limited only to All India Radio (AIR). five years after going on air. With the license period only Impact on the Industry: The license period for the new licenses to be issued 10 years, there is little value left after the lock-in period. under Phase 3 has been increased from the present ten With the license period becoming 15 years and with the While the sourcing part of the policy is very restrictive, years to fifteen. This is a realization by the government lock-in reduced to 3 years, many such players would now radio broadcasters are hopeful that this policy would be that the radio business is a difficult one to operate and be able to exit the business and limit their losses. At the amended in due course of time. In the current form, it is broadcasters need to put in a lot of investment and hence same time large radio networks such as ENIL, which run not likely to have any significant impact on listenership need a longer timeframe to recover their initial losses and their operations more efficiently, would get an opportunity or revenues since the content would likely be the same generate healthy returns on equity. to acquire new frequencies directly from present owners across broadcasters. Also private broadcasters may have Impact on the Industry: rather than waiting to acquire them from the Government. to pay for access to these news feeds, which would make d) Networking: it an unviable option for many radio broadcasters. Very positive, since broadcasters will now be able to invest Weaknesses of the policy: in brand building and experiment with new listenership- Radio broadcasters have now been allowed to network building measures. This change will also have a major without restrictions. This means that smaller stations While there are many positives in the Phase 3 policy, there are impact on the valuation of broadcasting companies. While could take their content from larger stations without certain measures which could be detrimental to the industry: the one time fees paid to get the licenses may become having to invest substantially in creating new and unviable i. Simultaneous ascending e-auction methodology: higher due to the longer duration of licenses, it will allow infrastructure and incurring huge operating costs. Under The government has decided that the allocation of ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 53

FM licenses would be done through the simultaneous is growing rapidly, it is necessary for FM industry also to add accepted, this recommendation of TRAI will help grow the radio ascending e-auction process which was followed for 3G frequencies. However, the FM band is limited. ENIL has been business at a faster clip over the next 5-7 years and take the and BWA auctions. While this may have been appropriate seeking a modern policy on FM spectrum allocation to bring it share of radio in the overall advertising pie to 7-9% from the for the telecom industry, this e-auction methodology on par with global standards. One of the ways to ensure better present 4 to 4.5%. is fundamentally flawed for radio. One of the features utilization of spectrum is to halve the separation between two 3) Policy uncertainty on renewal of Phase 2 licenses of the proposed e-auctions is that all licenses in a city adjacent FM channels from the current 800 KHz to 400 KHz. are auctioned for the exact same price. In media and While the government’s intention to renew Phase 2 licenses Halving channel separation would help double the number particularly in radio, where diversity of content is a key upon their expiry has been expressed by the Minister of I&B of channels available in a city. At present, the metros of India policy necessity, the auction methodology may actually while announcing the Phase 3 policy, the industry is still awaiting have only nine private FM channels. If the channel separation lead to sameness of content and elimination of diversity. clarity with regard to the process to be followed and the price was reduced to 400 KHz, there could be as many as eighteen to be paid by broadcasters upon renewal. This has led to some ii. High Reserve price: private FM channels made available. Thus at present, as many degree of confusion and wariness in the minds of broadcasters The bigger issue in the Phase 3 policy is the way the as nine channels are lying unutilized; a fact the country cannot who need to plan their resources for this eventuality. The Reserve price (the price at which the bidding starts) is to afford. Had these nine channels been made available, there Government has indicated that it will announce the renewal be set; would have been far more programming variety available. Most policy after Phase 3 auctions are completed and before the big cities worldwide, where FM radio has developed, have as ƒƒ In cities where a private broadcaster already exists renewals become due. many as 25-45 FM channels. For example, there are more than today (as part of Phase 2), the highest bid received 25 channels in Colombo and Singapore. There is no reason why 4) Rulings on music royalty – an update on ongoing cases in Phase 2 would become the base price for Phase 3. India should remain a laggard; that too when the Government with music providers ƒƒ In cities where no private broadcaster exists today stands to gain financially and otherwise by efficient utilization of Recent court rulings in matters related to music royalties have and which are being taken up for bidding for the first FM spectrum. brought relief to radio broadcasters. These rulings have brought time under phase 3, the Reserve OTEF shall be the the royalty regime in India in line with global practices, thus Reduction in the channel spacing will be beneficial to the people highest bid received during Phase 2 in a city of the rationalizing the royalties required to be paid by broadcasters of the country. They will be able to get more programming variety. same category in the same region. to music societies. This augurs well for the growth of the FM Broadcasters will be able to offer a rich variety of programming radio business as well as for the viability of FM broadcasters. Setting the base price for bidding in this manner options to cater to the tastes of their listeners. This will attract An update on the matters is provided below: would lead to many cities either not being bid for at new listeners to the medium which will help grow the appeal of all or result in high bid values which will make them the medium to advertisers. Sound Recording matters: unviable. ENIL’s position has been supported by TRAI, which in its In a landmark judgment dated August 25, 2010, the Hon’ble 2) TRAI recommends reducing channel separation to 400 KHz response to the Government has recommended halving Copyright Board fixed the music royalty payout from radio ENIL has been impressing upon the government the need to channel separation to 400 KHz. The matter is now with the broadcasters to all music providers (like Music labels/ Collection release additional FM frequencies for the medium to grow. In Ministry of Information & Broadcasting (‘Ministry of I&B’) and societies, etc.) at 2% of the net advertising revenues earned by a competitive media environment, where every other medium we are hopeful that it will accept TRAI’s recommendations. If each broadcaster, to be distributed on a pro rata basis amongst ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 54

music providers. This order has been challenged by PPL in the is broadcast from ENIL’s radio stations. It has therefore been produce during their lifetime. The amended law benefits every Hon’ble Madras High Court. However the Hon’ble Madras High held that the IPRS is not entitled to any royalty from ENIL when a creative person in India, be it a composer, lyricist, etc., who was Court and subsequently the Hon’ble Supreme Court have both sound recording is broadcast from its radio stations. hitherto been deprived of his/her due. refused to stay the order. The matter will now be heard in the Similar views have been expressed by the Bombay, Delhi and The amendments are a step in the right direction. They shall Hon’ble Madras High Court in due course of time. Kerala High Courts in separate judgments. ENIL has taken positively expand the symbiotic relationship between Radio and Similarly, South India Music Companies Association (SIMCA) steps to file proceedings for recovery /refund of monies paid to Music Composers/Lyricists/Artists. also challenged the aforesaid ruling of the Hon’ble Copyright IPRS based on the Award and Court rulings. ENIL has also been petitioning the Ministry of Human Resource Board before the Hon’ble Madras High Court inter-alia on the IPRS has challenged the Award passed by the Arbitrator before Development as well as the Ministry of I&B and Ministry of Law & ground that its members were not parties to the said Copyright the Hon’ble Bombay High Court. The matter will come up for Justice that there is an imperative need for the Copyright Board Board proceedings and hence the order of the Hon’ble hearing in due course of time. to function as a full time Tribunal/Body so that quick closures Copyright Board should be stayed. The Hon’ble Madras High 5) Copyright Amendment Bill of matters pertaining to Radio Industry vis-à-vis Music industry Court dismissed the application for stay of the Copyright Board can take place. This matter is likely to be addressed shortly by Order. The Hon’ble Supreme Court also refused to stay the The Copyright Amendment Bill 2012 has been passed by both the Government. Copyright Board order. Houses of Parliament - first by the Rajya Sabha on May 17, 2012

Super Cassettes Industries Limited (T-Series) also challenged and then by the Lok Sabha on May 22, 2012. 6) Digital Media the Copyright Board order before the Hon’ble Delhi High Court This Copyright Bill brings about many changes in the Copyright The growth of the digital media may be seen as a major on the ground that it was not a party to the proceedings in Act, 1957. But most importantly, it protects both the creators opportunity or a threat by FM broadcasters. Either way, its which the judgment was passed. The Hon’ble Delhi High Court and users of music. In doing so, it brings about a harmonious presence needs to be acknowledged and factored into the passed an order on September 15, 2010 granting a stay on balance between the two. business strategy. the Copyright Board order with respect to only T-Series. Being The amendment provides for the availability of music to any According to the FICCI KPMG M&E report 2012, Digital aggrieved by the aforesaid order, ENIL filed an Appeal before broadcasting organization (both radio and television) through the Division Bench of the Hon’ble Delhi High Court. After hearing advertising grew by almost 54% in CY11. It is likely to continue the mechanism of Statutory Licensing on the payment of royalty the parties the Hon’ble Delhi High Court was pleased to pass to grow at a CAGR of 30% till CY16 becoming a ` 57 Bn industry to be determined by the Copyright Board. To broadcast music, an order dated May 11, 2011 that it would be up to the Hon’ble by then. While digital media in India is still evolving, it is slowly the broadcaster has to give the stipulated notice to the music Copyright Board to decide the matter on merits. becoming a competitor to traditional media. It is therefore owner. The objective of Statutory License is to ensure that music important for all mediums to have a digital strategy, which can Performing Rights matters: content becomes available to every broadcaster desirous of the be leveraged to not only aggregate more listeners/viewers but same without any discrimination and on reasonable royalties to In arbitration proceedings held between ENIL and Indian also to monetize them. Radio as an industry also faces this threat be fixed by the Copyright Board. Performing Rights Society Ltd. (IPRS), the Arbitrator passed from digital media. However, there are many opportunities that an Award in December 2011 where it was held that there was At the same time, the amendments make the rights of the radio broadcasters can exploit in the digital space which can no exploitation of the works (literary / musical) in which the creators to receive royalties inalienable. This will give creators a help them be part of the digital story rather than compete with it. IPRS’s members own the copyright, when a sound recording share of royalties generated in perpetuity for the work that they ENIL is increasing its orientation towards digital and would have ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 55

a significant brand and monetization play in the digital space that we deliver to other parts of the world where we can reach music from the four southern states in 2010, has now been in the years to come. Some initiatives that we have taken in the out to people who appreciate Bollywood / Indian entertainment. extended to the rich music from Bengal as well. digital space are elucidated in the next section. Taking our brand to other geographies is a key constituent of Radio Mirchi celebrated its first Mirchi Music Awards Bangla this our future strategy. C. FY12 – A tough year, but there were several bright spots year. Like the other editions, the Bangla awards celebrated and 3) 4th edition of the Mirchi Music Awards – Bigger and Better honored both artistic and technical excellence of professionals 1) FY12, a year of modest growth in music in the Bangla industry. We celebrated music yet again with the 4th edition of the Mirchi The radio business achieved modest growth this year. The total Music Awards (Hindi film music). The winners as always were The jury for the awards was chaired by renowned filmmaker income of the Company has grown by 9.9%. The slowdown decided by an august jury comprising notable personalities Rituparno Ghosh. Other eminent jury members were Shantanu from the growth rate of 21.8% achieved last year is primarily from the Indian film & music industry – Javed Akhtar (Chairman), Moitra, Srikanto Acharya, Indrani Sen, Bickram Ghosh, due to an overall slowdown in the economy. As stated earlier Ramesh Sippy, Ashutosh Gowarikar, Sooraj R. Barjatya, Lopamudra Mitra, Debajyott Mishra, Srijato, Soymitra Roy, Surajit in this report, the Indian economy is expected to grow at just Prasoon Joshi, Sameer, Shankar Mahadevan, Anu Malik, Chatterjee, Anindya Chaterjee and Chandril Bhattacharya. 6.9% in FY12, a slow down from the 8.4% in the preceding two Aadesh Shrivastava, Lalit Pandit, Kailash Kher, Louiz Banks, years. The overall negative sentiment created on account of It is worth mentioning that this first edition of the awards also Kavita Krishnamurti Subramaniam, Alka Yagnik, Sadhana th high inflation and the resultant high interest rates, have curbed coincided with the 150 birth anniversary celebrations of the Sargam, Suresh Wadkar, Talat Aziz and Ila Arun. advertising spends to some extent. The general expectation is legendary Rabindranath Tagore. As a mark of respect for that the advertising sentiment will remain weak in FY13 as well; The Mirchi Music Awards felicitate winners in various categories- Tagore, artistes who excelled in Rabindra Sangeet were also but the long term forecast is for the growth rates to rebound. Best song of the year, Best Album of the Year, Best Male Vocalist, honored. Best Female Vocalist, Best Music Director, Best Lyricist, Best 2) Brand Mirchi launches in the UAE Background score, Best Item Number, Best Indi-pop song, 5) Radio Mirchi continues to lead in the Indian Readership This year Radio Mirchi made inroads into regions beyond India Most downloaded song of the year, Lifetime Achievement Survey (IRS) – the ONLY PAN India Radio listenership with a tie-up with Abu Dhabi Media Company (ADMC), one Award, Jury Award for outstanding contribution to Hindi Film measurement survey of the largest media conglomerates in the UAE. Radio Mirchi music and many more. The Indian Readership survey (IRS) conducted by Media can now be heard across the UAE with transmitters located in There is also a special award decided exclusively by Mirchi Research Users Council (MRUC), the only survey which Dubai, Abu Dhabi and Al Ain. Mirchi is the first Indian Bollywood Listeners. It is the Mirchi Listener’s Choice Awards for Best measures radio listenership across the country has placed radio brand which caters to the needs of the Indian community. Song of the Year and Best Album of the Year. Radio Mirchi as the clear leader in listenership yet again. It is also the first Indian brand which can be heard all over the According to IRS, Radio Mirchi has a weekly listenership of UAE. The brand was launched in Feb 2012 and has created a Mirchi music awards were awarded the Best On Ground/ almost 40 million. This research is evidence of the strength of lot of positive buzz already. This is encouraging and underlines Activation initiative at the Excellence in Radio Awards (ERA) the programming and marketing teams of Mirchi. Mirchi has the strength of the Mirchi brand. ceremony at the Indian Radio Forum (IRF) this year. been consistently the leader, by far, across all quarterly survey The launch of the brand in the Middle East was done by Rani 4) Launch of Mirchi Music Awards Bangla results of IRS in 2011. Mukherjee with the usual Mirchi pomp and gaiety. Our “Salaam” to music which started in 2009 with the Mirchi Radio Mirchi is also the clear leader in North, East, West and We intend to take the Mirchi brand and the entertainment value Music Awards for Hindi film music and later extended to the Central India – and is placed number two in the South. Further, ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 56

Mirchi enjoys a significant lead in the cumulative listenership create more value for listeners. Awards (ERA) at the India Radio Forum (IRF) this year – across the Top 8 metros. It is also the undisputed leader in the The continuing success of this product once again underlines the most won by any radio broadcaster. Mirchi won four Hindi speaking markets. the strength of the Mirchi brand and its ability to attract awards in the Programming Category for Best Radio audiences irrespective of the platform it is available on. Program (Bengali, Gujarati, Kannada and Marathi). In the 6) Mirchi – More Digital than ever Promotion and Marketing Category Radio Mirchi got three 8) Awards and recognitions Radio Mirchi is now actively tapping into the thriving online awards in Telugu, Bengali and Marathi. Additionally, Mirchi community of its fans through its website and social media. This year witnessed ENIL getting several awards. was also awarded the Radio Station Imaging Innovation for Almost 25% of Radio Mirchi FM listeners also use the internet. • Most successful Radio Channel of the year at FICCI its 9th Birthday campaign, Best Interactive Campaign, Best To engage with them, it is critical for us to increase our online Frames 2012…the third time in a row! Creative Campaign for Radio films by Mirchi productions, footprint. Our website (www.radiomirchi.com) showcases the Radio Mirchi was awarded the Most Successful Radio and Best Use of Radio in an Ad Campaign for “Top Indian best of Radio Mirchi content from across the stations and its Channel of the Year at the FICCI Frames Excellence awards cricketers” quiz. The station also won the Best use of usage has consistently grown over the last 2 years to reach 2012 again this year. Like the two years before, Mirchi was Radio in Activation Campaign award for Ponds “Let’s Pink” more than a million page-views a month now. We have half a the only radio station to receive this award. campaign. The award for Best Radio Program (Hindi) for million fans engaging with us across social media. This year we non-metro station also went to Mirchi for its ‘Janmashtami • Lions award for Radio Mirchi and RJ Jeeturaaj did the biggest digital integration of any media property in India Special’ campaign in Bhopal. Bezawada Basha won the Mumbai’s favorite RJ, Jeeturaaj, the vivacious and around Mirchi Music Awards, which resulted in over 35 million Best RJ of the Year (Telugu). energetic host of ‘Hi Mumbai’ was honored as the ‘RJ of online impressions, and over 50,000 active conversations the Year’ award at the 18th Lions Gold Awards. • Accolades at the Golden Mikes awards around the event. We have launched two online radio stations Radio Mirchi bagged the Silver award in the On-Ground on the Gaana.com platform, and we are seeing encouraging ‘Hi Mumbai’, the popular morning show has gained a huge Promotion category at this year’s Golden Mikes awards. early listening trends of these channels. As an organization we following with RJ Jeeturaaj’s unique and feisty style of anchoring coupled with his extensive knowledge of films, It also won three Bronzes in the categories of Best are making a conscious choice to be a lot more digitally savvy. music and Mumbai the city. Single Commercial - Media & Entertainment, Best On-Air 7) Mirchi Mobile – The Mobile Initiative from Mirchi, now Radio Mirchi also received the award for the favorite radio Promotion by a Network of Radio Stations for Self and Best across all major telecom operators station of the year. Campaign. Mirchi Mobile, a mobile VAS service launched by Mirchi last year, The 18th Lions Gold Awards is an endeavor by the Lions 9) Celebrating 10 years of Radio Entertainment Club International to felicitate talented achievers from gives mobile subscribers anywhere in the country access to This year marked the 10th anniversary of our first Radio station in different walks of life. The occasion saw the presence listen to Radio Mirchi of different cities. This year, we expanded Indore. Radio Mirchi was launched on October 4, 2001 and has its coverage and is now available across all the leading telecom of noted celebrities like actors Rani Mukherjee and R ever since been committed to entertaining audiences across operators in the country. Madhavan, directors Milan Luthria and Rohit Shetty and the entire nation. From the first celebrity, Akshay Khanna, who ace music stars Sonu Nigam and Bappi Lahiri. This has allowed the Mirchi brand to reach out to an even larger launched the station at Indore and from the first song that we set of individuals. The product has been fairly successful till now • Mirchi sweeps the IRF awards played – “Ma Tujhe Salaam” by AR Rahman, Radio Mirchi has and we plan to continue investing in its growth so that it can Mirchi won twelve awards at the Excellence in Radio hosted many celebrities and played numerous songs across ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 57

our 32 stations over the past ten years. D. Risks, Concerns and Challenges Facing the Company E. Segment- Wise Financial Performance

In the last 10 years, Mirchi has emerged as the largest and most 1) Macroeconomic risk Management Discussion and Analysis of the Company’s successful radio brand in the country. Over these years, with our While no business can be insulated from this risk, it has operations and financial consolidation and segment-wise positioning of being a “sunshine channel”, we have strived to become more prominent and relevant over the last few years performance together with discussion on financial performance bring happiness into the lives of our audiences and to spread with the world economy showing signs of weakness twice with respect to operational performance should be read in cheer and positivity. We will continue doing the same in the next conjunction with the financial statements and the related over. As a business entity which is dependent on advertising decade as well. footnotes. revenues, we are always exposed to the overall state of the 10) Mirchi Cares continued its endeavors this year economy. ENIL – Radio Mirchi Mirchi Cares, the CSR initiative of Radio Mirchi, used the Mirchi This year has been a modest year for ENIL from a revenue as airwaves extensively to spread the message of inclusion of the 2) Operational and Financial Risks well as profitability standpoint. The total income grew by 9.9% Visually Impaired in the mainstream of society. Audio books The Risk Management Framework established by your and stood at ` 312.9 crs. The 4th quarter saw a 13.7% growth in were recorded for them under the “Lend Your Voice” Campaign Company, and monitored by the Board of ENIL, has been the revenues vis-à-vis the previous year. The EBITDA also grew by where corporates like Bank of America joined the effort with back-bone of managing the operational and the financial risks 17.3 % and stood at ` 112.2 crs. Profit after Tax (PAT) before volunteers reading books for us. ‘Let there Be Light’ was a that the Company faces. Several risks have been identified and exceptional items grew by 43.0% to ` 56.5 crs. The Earnings commendable effort where the Mirchi Rajkot station helped to risk mitigation plans are in place. Process owners review the Per Share (EPS) stood at ` 11.85 in FY12. The Book Value per facilitate ‘Sight’ to two visually impaired people - a man in his risks periodically and bring to the attention of the Board any risk Share of the Company stood at ` 92.34 at the end of the year early 50s who had lost sight in an accident and a 15 year old that may need its intervention. under review. girl who was blind by birth. This was done through on-air and While this year has not been a high revenue growth year, we on-ground activities in their support. 3) Retaining Talent hope that with the recovery of the economy in the coming years, Mirchi Cares Ahmedabad team’s innovative idea of ‘Mirchi People make organizations. This is especially true in the media we will also see growth getting back on track. Mobile Parab’ reached out to 1.5 lac people in the city during business. With an ever changing economy and increasing Subsidiary Company the peak of summer. More than 30,000 liters of water was served competition, from not only other radio channels but other Alternate Brand Solutions (India) Limited (ABSL) to the thirsty. ‘Parab’ has been a rich tradition of Ahmedabad media as well, a key driver for consistent growth is building and which is almost non-existent today. maintaining a good team. We are very aware of this and have ABSL is engaged in the business of events. ABSL classifies events into two types – Managed Events in which ABSL Also noteworthy were the initiatives of the Jaipur and Mumbai put necessary processes and measures in place to ensure that manages its clients’ events on their behalf and IPR (Intellectual teams. The Jaipur Mirchi team collected more than 15,000 we retain good talent, create a reward system which is solely Property Rights) events in which ABSL builds its own event books under ‘‘Book Deke Dekho’ campaign from Mirchi based on merit and is transparent. We also continue to live by brands. Listeners. These were donated to the needy children of the city the Mirchi culture of Fun with Responsibility. With this culture and the villages on the outskirts of the city. Radio Mirchi Mumbai, and the promise of becoming part of a vibrant young workplace, During the year, ABSL decided not to carry out Managed Events through ‘Santa Cause’ reached out to 300 Cancer patients at we hope to attract the best talent from within and outside the on account of poor margins and excessive competition from Tata Memorial gifting them with toys donated by Mirchi listeners. media industry. the unorganized sector. Consequently, the results of this year ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Management Discussion & Analysis 58

are not comparable with those of the previous years. The total has a well defined risk management programme for identifying and industrial relations front has been dealt with in the Directors’ Report, income recorded by ABSL during FY12 was ` 11.2 crs. with mitigating risks across all the functions which is reviewed by the under the head ‘Operations’, which should be treated as forming part an EBITDA loss of ` 0.3 crs. ABSL ensured that its receivables Board of Directors of the Company periodically. of this Management Discussion and Analysis. As on March 31, 2012, position was handled satisfactorily. the employee strength (on permanent roll) of the Company was 752. The Company has an Audit Committee of the Board of Directors which meets regularly to review inter alia risk management policies, GENERAL For and on behalf of the Board of Directors adequacies of internal controls, the audit findings on the various Internal Control Systems and their Adequacy segments of the business, the financial information and other issues Vineet Jain The Company has a system of internal controls to ensure that all its related to the Company’s operations. assets are properly safeguarded and not exposed to risks arising Chairman Material Development in Human Resources/ Industrial Relations out of unauthorized use or disposal. The Internal Control system front, including Number of People Employed is supplemented by programs of internal audit to ensure that the Mumbai, May 25, 2012 assets are properly accounted for and the business operations are Specific need based training and development programs for all levels Registered Office: conducted in adherence to laid down policies and procedures. The of employees were imparted in order to optimize the contribution 4th Floor, ‘A’ Wing, Matulya Center, internal control system also focuses on processes to ensure integrity of the employees to the Company’s business and operations. Senapati Bapat Marg, of the Company’s financial accounting and reporting processes and Occupational health safety and environmental management are Lower Parel (W), compliance with the Company’s legal obligations. The Company given utmost importance. Material development in human resources/ Mumbai – 400 013. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Auditors’ Report 59

Auditors’ Report to the Members of Entertainment Network (India) Limited

1. We have audited the attached Balance Sheet of Entertainment the Company as we considered appropriate and according to (f) In our opinion and to the best of our information and Network (India) Limited (the “Company”) as at March 31, 2012 the information and explanations given to us, we give in the according to the explanations given to us, the said and the related Statement of Profit and Loss and Cash Flow Annexure a statement on the matters specified in paragraphs financial statements together with the notes thereon Statement for the year ended on that date annexed thereto, 4 and 5 of the Order. and attached thereto give, in the prescribed manner, the which we have signed under reference to this report. These 4. Further to our comments in the Annexure referred to in information required by the Act, and give a true and fair financial statements are the responsibility of the Company’s paragraph 3 above, we report that: view in conformity with the accounting principles generally Management. Our responsibility is to express an opinion on accepted in India: (a) We have obtained all the information and explanations these financial statements based on our audit. which, to the best of our knowledge and belief, were (i) in the case of the Balance Sheet, of the state of affairs 2. We conducted our audit in accordance with the auditing necessary for the purposes of our audit; of the company as at March 31, 2012; standards generally accepted in India. Those Standards (b) In our opinion, proper books of account as required by law (ii) in the case of the Statement of Profit and Loss, of the require that we plan and perform the audit to obtain reasonable have been kept by the Company so far as appears from profit for the year ended on that date; and assurance about whether the financial statements are free of our examination of those books; material misstatement. An audit includes examining, on a test (c) The Balance Sheet, Statement of Profit and Loss and Cash (iii) in the case of the Cash Flow Statement, of the cash basis, evidence supporting the amounts and disclosures in Flow Statement dealt with by this report are in agreement flows for the year ended on that date. the financial statements. An audit also includes assessing the with the books of account; accounting principles used and significant estimates made (d) In our opinion, the Balance Sheet, Statement of Profit and by Management, as well as evaluating the overall financial Loss and Cash Flow Statement dealt with by this report For Price Waterhouse & Co. statement presentation. We believe that our audit provides a comply with the accounting standards referred to in sub- reasonable basis for our opinion. Firm Registration Number: 007567S section (3C) of Section 211 of the Act; Chartered Accountants 3. As required by the Companies (Auditor’s Report) Order, (e) On the basis of written representations received from the 2003, as amended by the Companies (Auditor’s Report) directors, as on March 31, 2012 and taken on record by (Amendment) Order, 2004 (together the “Order”), issued by the Board of Directors, none of the directors is disqualified the Central Government of India in terms of sub-section (4A) as on March 31, 2012 from being appointed as a director Partha Ghosh of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) in terms of clause (g) of sub-section (1) of Section 274 of Mumbai Partner and on the basis of such checks of the books and records of the Act; May 25, 2012 Membership Number F-55913 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Auditors’ Report 60

Annexure to Auditors’ Report Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Entertainment Network (India) Limited on the financial statements as of and for the year ended March 31, 2012

1. (a) The Company is maintaining proper records showing full the information and explanations given to us, we have neither our opinion, the Company is regular in depositing the particulars, including quantitative details and situation, of come across, nor have been informed of, any continuing failure undisputed statutory dues, including provident fund, fixed assets. to correct major weaknesses in the aforesaid internal control investor education and protection fund, employees’ state system. insurance, income tax, sales tax, wealth tax, service tax, (b) The fixed assets are physically verified by the Management customs duty, excise duty and other material statutory according to a phased programme designed to cover all 4. (a) In our opinion, and according to the information and dues, as applicable, with the appropriate authorities. the items over a period of three years which, in our opinion, explanations given to us, the particulars of contracts or is reasonable having regard to the size of the Company arrangements referred to in Section 301 of the Act have (b) According to the information and explanations given to us and the nature of its assets. Pursuant to the programme, been entered in the register required to be maintained and the records of the Company examined by us, there a portion of the fixed assets has been physically verified under that section. are no dues of income-tax, sales-tax, wealth-tax, service- by the Management during the year and no material tax, customs duty, and excise duty which have not been (b) In our opinion, and according to the information and discrepancies between the book records and the physical deposited on account of any dispute. explanations given to us, the transactions made in inventory have been noticed. pursuance of such contracts or arrangements and 9. The Company has no accumulated losses. (c) In our opinion, and according to the information and exceeding the value of Rupees Five Lakhs in respect of 10. According to the records of the Company examined by us and explanations given to us, a substantial part of fixed assets any party during the year have been made at prices which the information and explanation given to us, the Company has has not been disposed of by the Company during the year. are reasonable having regard to the prevailing market not defaulted in repayment of dues to any financial institution or 2. (a) The Company has not granted any loans, secured or prices at the relevant time. bank as at the balance sheet date. unsecured, to companies, firms or other parties covered in 5. The Company has not accepted any deposits from the public the register maintained under Section 301 of the Act. 11. The Company has not granted any loans and advances on the within the meaning of Sections 58A and 58AA of the Act and the basis of security by way of pledge of shares, debentures and (b) The Company has not taken any loans, secured or rules framed there under. other securities. unsecured, from companies, firms or other parties covered 6. In our opinion, the Company has an internal audit system in the register maintained under Section 301 of the Act. 12. The provisions of any special statute applicable to chit fund/ commensurate with its size and the nature of its business. nidhi/ mutual benefit fund/ societies are not applicable to the 3. In our opinion, and according to the information and Company. 7. The Central Government of India has not prescribed the explanations given to us, there is an adequate internal control maintenance of cost records under clause (d) of sub-section (1) 13. In our opinion, the Company is not a dealer or trader in shares, system commensurate with the size of the Company and the of Section 209 of the Act for any of the products of the Company. securities, debentures and other investments. nature of its business for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination 8. (a) According to the information and explanations given to 14. In our opinion, and according to the information and of the books and records of the Company, and according to us and the records of the Company examined by us, in explanations given to us, the Company has not given any ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Auditors’ Report 61

Annexure to Auditors’ Report Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Entertainment Network (India) Limited on the financial statements as of and for the year ended March 31, 2012

guarantee for loans taken by others from banks or financial and does not have any debentures outstanding as at the year (Auditor’s Report) Order 2003, as amended by the Companies institutions during the year. end. (Auditor’s Report) (Amendment) Order, 2004, is not applicable

15. The Company has not obtained any term loans. 19. The Company has not raised any money by public issues in the case of the Company for the year, since in our opinion there is no matter which arises to be reported in the aforesaid 16. On the basis of an overall examination of the balance sheet of during the year. Order. the Company, in our opinion, and according to the information 20. During the course of our examination of the books and records and explanations given to us, there are no funds raised of the Company, carried out in accordance with the generally For Price Waterhouse & Co. on a short-term basis which have been used for long-term accepted auditing practices in India, and according to the Firm Registration Number: 007567S investment. information and explanations given to us, we have neither come Chartered Accountants 17. The Company has not made any preferential allotment of shares across any instance of fraud on or by the Company, noticed or to parties and companies covered in the register maintained reported during the year, nor have we been informed of any Partha Ghosh under Section 301 of the Act during the year. such case by the Management. Mumbai Partner 18. The Company has not issued any debentures during the year; 21. The other clauses (ii) of paragraph 4 of the Companies May 25, 2012 Membership Number F-55913 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Balance Sheet 62 as at March 31, 2012

Notes Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` EQUITY AND LIABILITIES Shareholders' funds Share capital 2 476,704,150 476,704,150 Reserves and surplus 3 3,925,392,786 3,360,297,665 Non - current liabilities Deferred tax liabilities (Net) 4 97,905,815 88,534,018 Long-term provisions 5 38,222,592 29,089,089 Current liabilities Trade payables 6 420,069,143 236,412,592 Other current liabilities 7 102,057,405 267,614,798 Short-term provisions 8 89,511,457 115,130,182 TOTAL 5,149,863,348 4,573,782,494 ASSETS Non-current assets Fixed assets 9 Intangible assets 910,846,873 1,127,055,909 Tangible assets 586,491,327 673,112,140 Capital work-in-progress 912,365 552,186 Non-current investments 10 80,250,000 75,250,000 Long-term loans and advances 11 128,724,833 211,807,785 Other non-current assets 12 73,656,344 77,571,427 Current assets Current investments 10 1,770,068,599 855,752,684 Trade receivables 13 922,402,912 1,038,005,783 Cash and bank balances 14 443,253,201 156,074,257 Short-term loans and advances 15 220,085,480 357,296,283 Other current assets 16 13,171,414 1,304,040 TOTAL 5,149,863,348 4,573,782,494 Notes forming part of the Financial Statements 1-37 This is the Balance Sheet referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 STATEMENT OF PROFIT AND LOSS 63 FOR THE YEAR ENDED MARCH 31, 2012

Notes 2011-2012 2010-2011 ` ` Revenue from operations 17 3,014,253,542 2,799,596,309 Other Income 18 115,221,704 47,252,007 Total Revenue 3,129,475,246 2,846,848,316 Expenses: Production expenses 19 146,332,497 160,947,411 License fees 20 152,015,260 140,231,911 Employee benefits expense 21 628,605,195 564,437,874 Depreciation and amortisation expense 9 324,625,139 335,960,456 Other expenses 22 1,080,415,800 1,024,353,636 Finance costs 23 14,437 11,182,698 Total expenses 2,332,008,328 2,237,113,986 Profit Before Taxation and Exceptional Item 797,466,918 609,734,330 Profit on Sale of Long Term Investment (Refer Note 33) — 126,848,239 Profit before Taxation 797,466,918 736,582,569 Tax expense: (Refer Note (1)(x)) Current tax 223,000,000 167,500,000 Deferred tax 9,371,797 157,590,674 Minimum alternate tax credit entitlement — (110,597,402) Profit for the year 565,095,121 522,089,297 Earnings per equity share [nominal value per share: ` 10 (2010-11: ` 10) (Refer Note (1)(ix)) 32 –– Basic 11.85 10.95 –– Diluted 11.85 10.95 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1-37 This is the Statement of Profit and Loss referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 CASH FLOW STATEMENT 64 FOR THE YEAR ENDED MARCH 31, 2012

2011-2012 2010-2011 ` ` A) CASH FLOW FROM OPERATING ACTIVITIES : Profit Before Taxation 797,466,918 736,582,569 Adjustments for : Depreciation and Amortisation 324,625,139 335,960,456 Interest Income (28,962,499) (32,948,765) Interest Expense 14,437 11,182,698 Provision no longer required written back — (26,315,493) Profit on Sale of Short Term Investments (Net) (9,548,362) (13,442,632) Profit on Sale of Long Term Investments — (126,848,239) Dividend on Investments (76,638,018) (732,781) Loss / (Profit) on sale of Tangible Assets 623,264 (102,266) Fixed Assets written off 2,229,817 245,309 Provision for Doubtful Debts (Net) (130,781,678) 101,276,940 Bad debts written off 64,845,895 73,605,423 Provision for Retirement Benefits 7,762,039 4,570,426 Operating Profit Before Working Capital Changes 951,636,952 1,063,033,645 Adjustments for changes in working capital : Decrease / (Increase) in Trade Receivables 181,538,654 (530,865,221) Decrease / (Increase) in Long term loans and advances (11,750,953) 13,243,602 Decrease / (Increase) in Other non current assets 4,813,691 1,144,554 Decrease in Short term loans and advances 63,734,478 1,171,913 Increase in Trade payables 183,656,551 74,428,658 (Decrease) / Increase in Other current liabilities (165,557,393) 3,452,075 (Decrease) / Increase in Short term provisions (24,247,261) 49,881,390 Cash generated from operations 1,183,824,719 675,490,616 Taxes paid (net) (54,689,770) (161,385,482) Net Cash generated from Operating Activities (A) 1,129,134,949 514,105,134 B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Tangible Assets (26,956,696) (18,690,950) Movement in Capital Work-in-Progress (360,179) (552,186) Proceeds from Sale of Tangible Assets 2,308,325 307,752 Loan given to Subsidiary Company — (601,500,000) ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 CASH FLOW STATEMENT 65 FOR THE YEAR ENDED MARCH 31, 2012

2011-2012 2010-2011 ` ` Loan repayment by Subsidiary Company — 796,500,000 Interest received 15,903,117 36,387,566 Dividend on Investments received 76,931,417 439,381 Purchase of Long term Investments (5,000,000) (5,000,000) Proceeds from Sale of Long Term Investments — 446,848,239 Purchase of Current Investments (5,288,277,233) (2,552,513,881) Proceeds from Sale of Current Investments 4,383,509,681 1,720,203,829 Net Cash used in Investing Activities (B) (841,941,568) (177,570,250) C) CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Long Term Borrowings : –– Payments — (34,310,694) Proceeds from Short Term Borrowings : –– Receipts — 250,000,000 –– Payments — (550,000,000) Interest paid (14,437) (11,182,698) Net Cash Flow used in Financing Activities (C) (14,437) (345,493,392) Net Increase / (Decrease) in Cash and Cash Equivalents (A)+(B)+(C) 287,178,944 (8,958,508) Cash and Cash Equivalents as at the beginning of the year 156,074,257 165,032,765 Cash and Cash Equivalents as at the end of the year 443,253,201 156,074,257 287,178,944 (8,958,508) NOTES ON CASH FLOW STATEMENT : 1. Cash and cash equivalents at the end of the year as per Balance Sheet. 443,253,201 156,074,257 (Refer Note 14 in the Financial Statements) 443,253,201 156,074,257 2. The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. 3. Previous Year’s figures have been regrouped and rearranged wherever necessary. 4. Cash flows in brackets indicate cash outgo. This is the Cash Flow Statement referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 66

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Nature of Operations such accounting estimates is recognised prospectively in a. Tangible assets the accounting period in which such revision takes place. Tangible fixed assets are stated at cost less The Company was incorporated on June 24, 1999. The Company accumulated depreciation and impairment losses, if operates FM radio broadcasting stations in 32 Indian cities under the iii. Revenue Recognition any. brand name ‘Radio Mirchi’. The Company’s principal revenue stream a. Revenue from radio broadcasting is recognised on an Depreciation on tangible fixed assets is provided on is advertising. Advertising revenues are generated through the sale accrual basis on the airing of client’s commercials. written down value method at the rates and in the of air time in the Company’s FM radio broadcasting stations. The revenue that is recognised is net of service tax. manner specified in Schedule XIV to the Act. The cost 1. Significant Accounting Policies b. Dividend income on mutual fund units is accounted for of leasehold improvements are amortised over the i. Basis of Accounting when the right to receive the payment is established primary period of lease of the property. Leasehold land The financial statements comply in all material aspects by the balance sheet date. is not amortised since the term of lease is perpetual in with all the applicable accounting principles in India, the c. Interest income is recognized on time proportionate nature. Tangible assets individually costing less than applicable accounting standards notified under Section basis taking into account the amount outstanding ` 5,000 are depreciated fully in the year of purchase. 211(3C) of the Companies Act, 1956 (“The Act”) and the and the rate applicable. b. Intangible assets (other than Software) relevant provisions of the Act. The financial statements Migration fees paid by the Company for existing d. Profit on sale of units of mutual funds is recognized are prepared under the historical cost convention on licenses upon migration to Phase II of the Licensing at the time of redemption and is determined as the an accrual basis. The accounting policies have been policy and One Time Entry Fees paid by the Company difference between the redemption price and the consistently applied by the Company and are consistent for acquiring new licenses have been capitalised as carrying value. with those followed in the previous year. an asset.

All assets and liabilities have been classified as current iv. Fixed assets and Depreciation The migration fee capitalised is being amortised, with or non-current as per the criteria set out in the Revised Cost of fixed assets comprises purchase price, duties, effect from April 1, 2005, equally over a period of ten Schedule VI to the Act. levies and any directly attributable cost of bringing the years, being the period of the license. One Time Entry ii. Use of Estimates asset to its working condition and location for the intended Fees is amortised over a period of ten years, being the The preparation of financial statements in accordance use. period of license, from the date of operationalisation with the generally accepted accounting principles requires of the respective stations. Borrowing cost directly attributable to fixed assets which the Management to make estimates and assumptions c. Software take substantial period of time to get ready for its intended that affect the reported amounts of assets and liabilities i. Software obtained initially together with hardware use are capitalised to the extent they relate to the period till and disclosure of contingent liabilities as at the date of is capitalised along with the cost of hardware such assets are ready to be put to use. the financial statements and the reported amounts of and depreciated in the same manner as the revenues and expenses during the reporting period. Actual Cost of assets not ready for their intended use before such hardware. All subsequent purchases of software results could differ from these estimates. Any revision to date, are disclosed as Capital Work-in-Progress. licenses are treated as revenue expenditure and ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 67

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

charged in the year of purchase. a. Short Term Employee Benefits : term in nature.

ii. Expenditure on acquired Computer Software The employees of the Company are entitled to leave Liability for Defined Benefit Plan is provided on the (SAP) is recognised as “Intangible Asset” and encashment as per the leave policy of the Company. basis of valuations, as at the balance sheet date, amortised over a period of twenty five months. The liability in respect of leave encashment which carried out by an independent actuary. The actuarial Expenditure on other software where the is expected to be encashed / utilised within twelve valuation method used by the independent actuary economic benefit is expected to be more than a months after the balance sheet date is considered to for measuring the liability is the Projected Unit Credit year is amortised. be of short term nature. Method. Actuarial losses/gains are recognised in the b. Long Term Employee Benefits : statement of profit and loss in the year in which they v. Foreign Currency Transactions arise. Defined Contribution Plans: Foreign currency transactions are recorded at the exchange c. Termination benefits are recognised as an expense as rates prevailing on the date of the transaction. Gains and The Company has Defined Contribution Plans for and when incurred. losses arising out of subsequent fluctuations are accounted post employment benefits such as Provident Fund for on actual payment or realisation. Monetary items and Employee’s Pension Scheme, 1995. Under the viii. Operating Leases denominated in foreign currency as at the balance sheet Provident Fund Plan, the Company contributes to a Leases in which a significant portion of the risks and rewards date are converted at the exchange rates prevailing on that Government administered Provident Fund on behalf of ownership are retained by the lessor are classified as day. Exchange differences are recognised in the Profit and of its employees and has no further obligation beyond operating leases. Payments made under operating leases Loss Account. making its contribution. are charged to the Statement of Profit and Loss on a vi. Investments The Company contributes to a State Plan namely straight-line basis over the period of the lease. Employee’s Pension Scheme, 1995 and has no further Investments that are intended to be held for not more than ix. Earnings per share obligation beyond making its contribution. a year from the date of investment are classified as Current Basic earnings per share is calculated by dividing the investments. All other investments are termed as Long term The Company’s contributions to the above funds are net profit or loss for the period attributable to equity investments. charged to revenue every year. shareholders by the weighted average number of equity Current investments are carried at cost or fair value, Defined Benefit Plans: shares outstanding during the period. Earnings considered whichever is lower. Long term investments are stated at The Company has a Defined Benefit Plan namely in ascertaining the Company’s earnings per share is the net cost. However, provision for diminution in value is made to Gratuity and Leave Encashment for all its employees. profit for the period after deducting preference dividends recognise a decline other than temporary in the value of the The liabilities in respect of Leave Encashment which is and any attributable tax thereto for the period. The weighted long term investments. expected to be encashed / utilised after twelve months average number of equity shares outstanding during the vii. Retirement Benefits from the balance sheet date is considered to be long period and for all periods presented is adjusted for events, ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 68

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

such as bonus shares, other than the conversion of potential one or more subsequent periods. Deferred tax assets determined based on best estimates of the amount equity shares,that have changed the number of equity are recognised only to the extent that there is reasonable required to settle the obligation at the balance sheet shares outstanding, without a corresponding change in certainty that sufficient future taxable income will be date. These are reviewed at each balance sheet date and resources. For the purpose of calculating diluted earnings available against which such deferred tax assets can be adjusted to reflect the current best estimates. per share, the net profit or loss for the period attributable realised. A disclosure for a contingent liability is made when there to equity shareholders and the weighted average number xi. Impairment of Assets is a possible obligation or a present obligation that may, of shares outstanding during the period is adjusted for the but probably will not, require an outflow of resources effects of all dilutive potential equity shares. The Company assesses at each balance sheet date embodying economic benefit. Where there is a possible whether there is any indication that asset may be impaired. x. Income Taxes obligation or a present obligation that the likelihood of If any such indication exists, the Company estimates the outflow of resources is remote, no provision or disclosure Tax expense comprises of Current and Deferred tax. recoverable amount of the asset. If such recoverable is made. Current income tax and deferred tax are measured based amount of the asset or the recoverable amount of the on the amount expected to be paid to the tax authorities in cash generating unit to which the asset belongs is less xiii. License Fees accordance with the Income Tax Act, 1961. than its carrying amount, the carrying amount is reduced As per the Frequency Module (FM) broadcasting policy, to its recoverable amount. The reduction is treated as an Minimum Alternate Tax (MAT) paid in accordance with tax effective April 1, 2005 license fees are charged to revenue impairment loss and is recognised in the Profit and Loss laws which give rise to future economic benefits in the form at the rate of 4% of gross revenue for the period or 10% of Account. If at the balance sheet date, there is an indication of adjustment to future income tax liability is considered as Reserve One Time Entry Fee (ROTEF) for the concerned that a previously assessed impairment loss no longer an asset if there is convincing evidence that the company city, whichever is higher. Gross Revenue for this purpose exists, the recoverable amount is reassessed and the will pay normal tax in future. Accordingly, MAT is recognised shall mean revenue on the basis of billing rates inclusive asset is reflected at the recoverable amount. as an asset in the balance sheet when it is probable that of any taxes and without deduction of any discount given the future economic benefit associated with it will flow to xii. Provisions and Contingent Liabilities to the advertiser and any commission paid to advertising the Company and the asset can be measured reliably. The Company recognises a provision when there is a agencies. Barter advertising contracts shall also be Deferred tax is recognised, subject to the consideration present obligation as a result of a past event that probably included in the gross revenue on the basis of relevant of prudence, on timing differences, being the difference requires an outflow of resources and a reliable estimate billing rates. ROTEF means 25% of highest valid bid in the between taxable income and accounting income that can be made of the amount of the obligation. Provisions city. originate in one period and are capable of reversal in are not discounted to its present date value and are ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 69

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 2 : SHARE CAPITAL Authorised Capital 120,000,000 (Previous Year : 120,000,000) Equity shares of ` 10 each 1,200,000,000 1,200,000,000 Issued and Subscribed 47,670,415 (Previous Year : 47,670,415) Equity shares of ` 10 each fully paid-up 476,704,150 476,704,150 476,704,150 476,704,150 Notes: (a) Terms attached to equity shares The Company has only one class of equity shares. Each shareholder is eligible for one vote per share held. The par value per share is ` 10. (b) Shares held by Holding company and Ultimate holding company Shares (nos) Shares (nos) i) Equity Shares of ` 10 each held by Times Infotainment Media Limited, the Holding Company. 30,526,560 30,526,560 ii) Equity Shares of ` 10 each held by Bennett, Coleman & Company Limited, the Ultimate Holding Company. 3,391,840 3,391,840 (c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company Shares (nos) Shares (nos) (in %) (in %) i) Times Infotainment Media Limited, the Holding Company. 30,526,560 30,526,560 (64.04 %) (64.04 %) ii) Bennett, Coleman & Company Limited, the Ultimate Holding Company. 3,391,840 3,391,840 (7.12 %) (7.12 %) iii) SBI Life Insurance Company Limited. 2,715,269 2,088,503 (5.70%) (4.38%)

NOTE 3 : RESERVES AND SURPLUS Securities Premium Account 1,885,216,421 1,885,216,421 Surplus in Statement of Profit and Loss Balance as at the beginning of the year 1,475,081,244 952,991,947 Add: Profit for the year 565,095,121 522,089,297 Balance as at end of the year 2,040,176,365 1,475,081,244 3,925,392,786 3,360,297,665 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 70

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 4 : DEFERRED TAX LIABILITIES (NET) (Refer Note 1(x)) Deferred tax assets and liabilities are attributable to the following items: Assets: Provision for Doubtful Debts 51,543,257 96,212,881 Provision for Doubtful Advances — 2,076,094 Provision for compensated absences 4,598,442 4,111,916 Provision for gratuity 8,615,708 6,838,502 Others 496,478 416,368 65,253,885 109,655,761 Liability: Depreciation 163,159,700 198,189,779 163,159,700 198,189,779 (97,905,815) (88,534,018) Note: Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same governing taxation laws.

NOTE 5 : LONG-TERM PROVISIONS Provision for employee benefits (Refer Notes (1)(vii) and 28) Provision for gratuity 26,022,275 18,113,909 Provision for compensated absences 12,200,317 10,975,180 38,222,592 29,089,089

NOTE 6 : TRADE PAYABLES Sundry Creditors (Refer Note 26) 420,069,143 236,412,592 420,069,143 236,412,592 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 71

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 7 : OTHER CURRENT LIABILITIES Advance from Customers 25,990,951 34,395,081 Other Payables Statutory dues 28,550,748 71,567,165 Related parties (Refer Note below) 47,515,706 161,652,552 102,057,405 267,614,798 Note: Payable to Bennett, Coleman & Company Limited, the Ultimate Holding Company — 146,494,185

NOTE 8 : SHORT TERM PROVISIONS Provision for employee benefits Provision for gratuity (Refer Notes (1) (vii) and 28) 532,535 2,473,136 Provision for compensated absences (Refer Notes (1) (vii) and 28) 1,972,721 1,403,584 Provision for Bonus 87,006,201 111,253,462 89,511,457 115,130,182 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 72

NOTES FORMING PART OF THE FINANCIAL STATEMENTS NOTE 9 : FIXED ASSETS (Refer Notes 1 (iv) and (xi)) (`) PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK As at Additions Deletions As at As at For the year On Deletions As at As at As at April 1, 2011 March 31, 2012 April 1, 2011 March 31, 2012 March 31, 2012 March 31, 2011 Intangible Assets Computer Software (SAP) 16,907,372 — — 16,907,372 16,907,372 — — 16,907,372 — — Migration Fees 815,234,695 — — 815,234,695 489,140,820 81,523,470 — 570,664,290 244,570,405 326,093,875 One Time Entry Fees 1,346,855,672 — — 1,346,855,672 545,893,638 134,685,566 — 680,579,204 666,276,468 800,962,034 Total 2,178,997,739 — — 2,178,997,739 1,051,941,830 216,209,036 — 1,268,150,866 910,846,873 1,127,055,909 Previous year 2,178,997,739 — — 2,178,997,739 835,732,794 216,209,036 — 1,051,941,830 Tangible Assets Land - Leasehold 2,036,147 — — 2,036,147 — — — — 2,036,147 2,036,147 Building 7,578,551 — — 7,578,551 2,863,631 235,746 — 3,099,377 4,479,174 4,714,920 Leasehold Improvements 274,266,915 2,591,054 5,556,395 271,301,574 151,038,833 19,453,983 5,108,295 165,384,521 105,917,053 123,228,082 Office Equipment 1,008,554,420 16,488,080 11,302,835 1,013,739,665 501,323,086 74,808,493 7,295,928 568,835,651 444,904,014 507,231,334 Computers 161,750,245 7,029,085 14,592,782 154,186,548 136,039,403 11,444,327 13,938,440 133,545,290 20,641,258 25,710,842 Furniture and Fixtures 33,288,450 848,477 549,185 33,587,742 26,811,865 1,512,619 526,572 27,797,912 5,789,830 6,476,585 Motor Vehicles 9,013,809 — 408,666 8,605,143 5,299,579 960,935 379,222 5,881,292 2,723,851 3,714,230 Total 1,496,488,537 26,956,696 32,409,863 1,491,035,370 823,376,397 108,416,103 27,248,457 904,544,043 586,491,327 673,112,140 Previous Year 1,480,530,086 18,690,950 2,732,499 1,496,488,537 705,906,681 119,751,420 2,281,704 823,376,397 Capital work-in-progress 912,365 552,186

Note: As per the Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company was given the option to migrate all its existing licenses from Phase I regime to Phase II regime on payment of migration fees. Migration fees for each station was equal to the average of all successful bids received for that city. The Company had exercised the option and had migrated its licenses for all the seven cities to Phase II regime by payment of migration fees aggregating ` 815,234,695. Migration Fees have a remaining amortisation period of three years. Further, the Company had participated in the second round of bidding and was awarded frequency at 25 locations. The payment made by the Company to acquire these frequencies (One Time Entry Fees) was ` 1,301,000,000. The remaining amortisation period of OTEF ranges between three and six years. Based on the opinion obtained from an independent firm of Chartered Accountants, both Migration Fees and One Time Entry Fees have been capitalised as Intangible Assets. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 73

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 Nos of Shares ` Nos of Shares ` NOTE 10 : INVESTMENTS Non-current investments (Refer Note 1(vi)) Non-Trade, Long Term (Unquoted) at cost Investment in Subsidiary Company : Equity Shares of Alternate Brand Solutions (India) Limited of ` 10 each fully paid-up 1,600,000 70,250,000 1,600,000 70,250,000 Sub-total (A) 70,250,000 70,250,000

Nos. ` Nos. ` Non-Trade, Long Term (Unquoted) at cost Capital Gains Bonds: Non-convertible redeemable taxable bonds 1,000 10,000,000 500 5,000,000 (with benefits u/s 54EC of the Income Tax Act, 1961 for Long Term Capital Gains) Sub-total (B) 10,000,000 5,000,000 Non-Current Investments (A)+(B) 80,250,000 75,250,000 Current Investments (at the lower of cost or market value) Non-Trade, Current (Quoted - Mutual Funds) Axis Fixed Term Plan - Series 20 (3 Months) - Growth, of ` 10 each 4,501,495 45,014,950 — — Birla Sun Life Short Term FMP Series 29 Growth, of ` 10 each 1,750,010 17,500,100 — — Birla Sun Life Short Term FMP Series 30 Growth, of ` 10 each 2,500,000 25,000,000 — — DSP BlackRock FMP - 3M Series 32 - Dividend Payout, of ` 10 each — — 10,000,000 100,000,000 DSP BlackRock FMP - Series 29 - 3M - Growth, of ` 10 each 5,000,000 50,000,000 — — DSP BlackRock FMP - Series 33 - 3M- Growth, of ` 10 each 8,712,925 87,129,251 — — HDFC FMP 92D March 2012 (1) - Growth - Series XIX, of ` 10 each 10,000,000 100,000,000 — — ICICI Prudential Interval Fund – Interval Plan 1 – Quarterly Institutional Growth, of ` 10 each 6,156,490 69,999,994 — — ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 74

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 Nos. ` Nos. ` ICICI Prudential Interval Fund – Monthly Interval Plan - I Institutional Dividend, of ` 10 each — — 9,995,202 99,999,997 ICICI Prudential Interval Fund II – Interval Plan B – Quarterly Institutional Growth, of ` 10 each 7,331,302 83,257,503 — — ICICI Prudential Interval Fund II – Quarterly Interval Plan D – Institutional Growth, of ` 10 each 1,312,324 14,999,995 14,995,951 149,999,999 ICICI Prudential Interval Fund IV – Quarterly Interval Plan B – Institutional Dividend, of ` 10 each — — 7,000,000 70,000,000 IDFC Fixed Maturity Quarterly Series 63 - Dividend, of ` 10 each — — 9,000,000 90,000,000 IDFC Fixed Maturity Quarterly Series 68 - Growth, of ` 10 each 2,000,677 20,006,773 — — IDFC Fixed Maturity Quarterly Series 69 - Growth, of ` 10 each 2,250,000 22,500,000 — — Kotak Quarterly Interval Plan Series 1 - Dividend, of ` 10 each — — 10,000,000 100,000,000 Kotak Quarterly Interval Plan Series 2 - Growth, of ` 10 each 3,544,973 49,990,030 — — Kotak Quarterly Interval Plan Series 4 - Growth, of ` 10 each 5,794,162 80,000,000 — — Kotak Quarterly Interval Plan Series 9 - Growth, of ` 10 each 4,015,838 50,000,000 — — Reliance Quarterly Interval Fund - Series III - Institutional Growth Plan-Growth Option, of ` 10 each 690,105 10,009,215 — — UTI - Fixed Income Interval Fund - Quarterly Interval Plan IV - Series II - Institutional Growth, of ` 10 each 7,954,160 89,987,003 — — UTI - Fixed Income Interval Fund - Quarterly Interval Plan Series III - Institutional Growth, of ` 10 each 4,205,804 60,000,000 — — UTI - Fixed Income Interval Fund - Series II - Quarterly Interval Plan V - Institutional Growth, of ` 10 each 6,162,517 69,998,800 — — UTI - Fixed Maturity Plan - Quarterly Series (QFMP 02/12 - I) - Institutional Growth, of ` 10 each 1,000,000 10,000,000 — — UTI - Fixed Maturity Plan - Quarterly Series (QFMP 02/12 - II) - Institutional Growth, of ` 10 each 2,500,200 25,002,000 — — Sub-total (C) 980,395,614 609,999,996

Note:

The market price has been determined based on the NAV declared on the balance sheet date by the mutual fund houses. Aggregate market value of Quoted mutual fund units held by the Company is ` 991,388,438 (Previous Year : ` 611,766,636). ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 75

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 Nos. ` Nos. ` Current investments (at the lower of cost or market value) Non-Trade, Current (Unquoted - Mutual Funds) Axis Short Term Fund - Institutional Growth , of Rupees 10 each 4,369,199 50,578,282 — — DSP BlackRock Short Term Fund - Growth, of Rupees 10 each 2,991,108 54,367,579 — — DWS Short Maturity Fund - Premium Plus Growth, of Rupees 10 each 4,601,883 50,811,686 — — DWS Ultra Short Term Fund - Institutional Growth, of Rupees 10 each 4,598,349 58,257,402 — — HDFC Mutual Fund – Liquid Fund Premium Plus Plan – Growth, of Rupees 10 each — — 7,329,977 141,681,293 ICICI Prudential Blended Plan B Institutional Growth Option - II, of Rupees 10 each 4,039,067 46,717,065 — — ICICI Prudential Liquid Super Institutional Plan – Growth, of Rupees 100 each 346,958 55,000,000 76,278 11,035,935 IDFC Cash Fund - Super Institutional Plan C – Growth, of Rupees 10 each — — 7,911,448 93,035,460 IDFC Money Manager Fund - Investment Plan - Inst Plan B - Growth, of Rupees 10 each 3,020,418 50,000,000 — — IDFC - SSIF - Short Term - Plan B – Growth, of Rupees 10 each 4,245,991 51,887,278 — — IDFC - Ultra Short Term Fund – Growth, of Rupees 10 each 9,207,835 136,514,443 — — Kotak Bond (Short Term) - Growth, of Rupees 10 each 1,516,137 30,454,644 — — Reliance Floating Rate Fund - Short Term Plan - Growth Plan, of Rupees 10 each 3,001,771 50,596,659 — — Templeton India Low Duration Fund - Growth, of Rupees 10 each 8,965,957 103,477,902 — — Templeton India Short Term Income Fund - Growth, of Rupees 1000 each 23,953 51,010,045 — — Sub-total (D) 789,672,985 245,752,688 Current Investments (C)+(D) 1,770,068,599 855,752,684

Note:

The market price has been determined based on the NAV declared on the balance sheet date by the mutual fund houses. Aggregate market value of Unquoted mutual fund units held by the Company is ` 790,562,566 (Previous Year : ` 249,773,403). ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 76

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 11 : LONG TERM LOANS AND ADVANCES (Unsecured Considered good unless otherwise stated) Capital Advances 235,565 10,922,919 Deposits: Considered Good 115,036,783 92,199,481 Considered Doubtful — 6,250,000 115,036,783 98,449,481 Less: Provision for Doubtful Deposits — (6,250,000) 115,036,783 92,199,481 Other long term loans and advances Employee Loans 1,076,024 1,475,019 Minimum Alternate Tax Credit Entitlement (long term) — 79,099,579 Advance Tax and Tax deducted at Source [Net of Provision of ` 52,095,815 (Previous Year : ` 297,258,870)] 12,376,461 28,110,787 128,724,833 211,807,785

NOTE 12 : OTHER NON CURRENT ASSETS Non current bank balances (margin money deposits) 71,501,840 76,315,531 Interest accrued on deposits 2,154,504 1,255,896 73,656,344 77,571,427 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 77

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 13 : TRADE RECEIVABLES Unsecured, considered good Outstanding for a period exceeding 6 months from the date they are due for payment 68,216,044 139,811,114 Others 854,186,868 898,194,669 922,402,912 1,038,005,783 Unsecured, considered doubtful Outstanding for a period exceeding 6 months from the date they are due for payment 100,009,509 213,148,398 Others 58,853,973 76,496,762 158,863,482 289,645,160 1,081,266,394 1,327,650,943 Less: Provision for Doubtful Debts (158,863,482) (289,645,160) 922,402,912 1,038,005,783

NOTE 14 : CASH AND BANK BALANCES Cash and cash equivalents: Cheques on hand 22,495,207 — Balances with banks: Current Accounts 80,757,994 56,074,257 Other bank balances Deposits with original maturity for more than 3 months but less than 12 months 340,000,000 100,000,000 Balances with bank held as security against Guarantees issued by banks Margin money deposits 71,501,840 76,315,531 Less: Amount disclosed under non current assets (71,501,840) (76,315,531) 443,253,201 156,074,257 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 78

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 15 : SHORT-TERM LOANS AND ADVANCES (Unsecured Considered good unless otherwise stated) Loans and advances to related parties: Due from Subsidiary Company (Refer Note 1 below) — 13,387,990 Due from other related parties 1,921,280 3,527,187 Prepaid expenses 63,985,442 56,684,566 Advances recoverable in cash or in kind or for value to be received: Considered Good 36,994,533 58,020,193 Deposits: Considered Good 2,155,497 37,171,294 Advance Tax and Tax deducted at Source [Net of Provision of ` 341,754,261 (Previous Year : ` 243,163,055)] 6,626,638 53,007,230 Minimum Alternate Tax Credit Entitlement 108,402,090 135,497,823 220,085,480 357,296,283 Company under same management, unless otherwise stated (Net) 1. Due from Alternate Brand Solutions (India) Limited the Subsidiary Company — 13,387,990

NOTE 16 : OTHER CURRENT ASSETS (Unsecured Considered good unless otherwise stated) Interest accrued on deposits 13,171,414 1,010,640 Dividend receivable on Investments — 293,400 13,171,414 1,304,040 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 79

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` NOTE 17 : REVENUE FROM OPERATIONS Sale of Services (Refer Notes 1(iii)(a) and 34) 2,946,820,816 2,724,795,895 Digital Revenues,Service fee, Marketing & Sales Commission 58,443,029 31,870,419 Other operating income –– Provision no longer required written back — 26,315,493 –– Others 8,989,697 16,614,502 8,989,697 42,929,995 3,014,253,542 2,799,596,309

NOTE 18 : OTHER INCOME Interest Income (Refer Note 1 (iii)(c)) –– On Loan — 23,823,956 –– On Fixed Deposits 22,774,477 6,900,085 –– On Income-Tax Refund 5,338,649 170,834 –– On Others 849,373 2,053,890 Dividend Income ((Refer Note 1 (iii)(b)) 76,638,018 732,781 Profit on Sale of Short term Investments (Net) (Refer Note 1 (iii)(d)) 9,548,362 13,442,632 Miscellaneous Income 72,825 127,829 115,221,704 47,252,007

NOTE 19 : PRODUCTION EXPENSES Royalty (Refer Note 35) 110,231,650 129,066,593 Other Production Expenses 36,100,847 31,880,818 146,332,497 160,947,411 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 80

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` NOTE 20 : LICENSE FEES License Fees (Refer Note 1(xiii)) 152,015,260 140,231,911 152,015,260 140,231,911

NOTE 21 : EMPLOYEE BENEFITS EXPENSE Salaries, Wages and Bonus 566,675,963 513,312,145 Contributions to Provident and Other Funds (Refer Notes 1(vii) and 28) 20,795,546 17,417,630 Gratuity (Refer Notes 1(vii) and 28) 8,440,901 5,288,214 Staff Welfare expenses 32,692,785 28,419,885 628,605,195 564,437,874

NOTE 22 : OTHER EXPENSES Rent 161,295,708 138,278,306 Rates and Taxes 2,273,696 3,388,640 Power and Fuel 90,790,789 81,655,683 Marketing 559,069,805 342,467,696 Travelling and Conveyance 84,804,032 70,550,161 Insurance 3,446,751 2,293,262 Communication 15,341,909 13,396,444 Repairs and Maintenance on : –– Buildings 925,474 2,804,598 –– Plant and Machinery 21,107,289 20,162,526 –– Others 23,918,180 19,225,855 Legal and Professional Fees 91,221,445 78,842,476 Software Expenses (Refer Note 1(iv)(c)) 25,629,257 24,971,990 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 81

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` Payments to Auditors As Auditors: Audit Fee 2,500,000 2,500,000 Other Services 570,000 70,000 Reimbursement of expenses 130,488 73,248 3,200,488 2,643,248 Bad Debts written off 64,845,895 73,605,423 Provision for Doubtful Debts 120,828,913 145,449,770 Provision for Doubtful Debts withdrawn (251,610,591) (44,172,830) (130,781,678) 101,276,940 Doubtful deposits written off 6,250,000 — Provision for doubtful deposits written back (6,250,000) — — Loss on Sale of Tangible Assets 623,264 245,309 Tangible Assets written off 2,229,817 — Director's Sitting Fees 1,260,000 910,000 Net loss on foreign currency transaction and translation 206,153 1,203 Miscellaneous Expenses 59,007,526 47,633,876 1,080,415,800 1,024,353,636

NOTE 23 : FINANCE COSTS Interest Expense On Short term Loan — 11,182,698 On Others 14,437 — 14,437 11,182,698 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 82

NOTES FORMING PART OF THE FINANCIAL STATEMENTS 24. Provision for income tax was made on the basis of Section 115JB of the Income Tax Act, 1961 (Minimum Alternate Tax) in the previous year.

25. Commitments to the extent not provided for

Estimated amount of contracts remaining to be executed on capital account ` 1,523,654 (Previous Year : ` 933,966) net of advances of ` 234,565 (Previous Year: ` 10,922,919).

26. Sundry Creditors

i. Disclosure has been made as per the definition given in the Micro, Small and Medium Enterprises Development Act, 2006. The Company received information from some of the “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to the amounts as at year end together with interest payable as required under the Act have been given below:

Particulars March 31, 2012 March 31, 2011 ` `

i) Payment due as at the year end on account of: –– Principal 42,534 136,694 –– Interest — — ii) Total Interest paid on all delayed payment during the year — — iii) Interest due on principal amounts paid beyond the due date during the year but without the interest amount — — iv) Interest accrued but not due — — v) Total Interest due but not paid — —

The information in 26 (i) above and that regarding micro and small enterprises given in Note 6 “Trade Payables” has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

ii. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

27. a. Value of Imports calculated on CIF basis:

2011-2012 2010-2011 ` ` Capital goods 2,667,805 4,238,115 Total 2,667,805 4,238,115 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 83

NOTES FORMING PART OF THE FINANCIAL STATEMENTS b. Expenditure in Foreign Currency

2011-2012 2010-2011 ` ` Travel 1,297,868 466,962 Professional Fees 1,496,652 2,581,175 Others 2,660,260 167,908 Total 5,454,780 3,216,045

c. Income in Foreign Currency

2011-2012 2010-2011 ` ` Consultancy services 13,164,105 Nil Total 13,164,105 Nil

28. The Company has classified the various employee benefits provided to employees as under:-

I) Defined Contribution Plans a) Provident Fund b) State Defined Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profit and Loss Account -

2011-2012 2010-2011 ` ` –– Employers’ Contribution to Provident Fund* 15,470,242 12,555,624 –– Employers’ Contribution to Employee’s Pension Scheme 1995* 4,590,037 4,222,396 –– Employers’ Contribution to Employee State Insurance Scheme* 735,267 639,610 * Included in Contributions to Provident and Other Funds (Refer Note 21) ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 84

NOTES FORMING PART OF THE FINANCIAL STATEMENTS II) Defined Benefit Plans

In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid Defined Benefit Plan of gratuity based on the following assumptions:-

As at As at March 31, 2012 March 31, 2011 Discount Rate (per annum) 8.50% 8.50% Rate of increase in Compensation levels 6.50% 6.50% Attrition rate 1.00% 1.00%

A) Changes in the Present Value of Obligation

As at As at March 31, 2012 March 31, 2011 ` ` Present Value of Obligation at the beginning of the year 20,587,045 16,630,670 Interest Cost 1,749,898 1,330,454 Past Service Cost — — Current Service Cost 4,405,730 4,189,797 Curtailment Cost / (Credit) — — Settlement Cost / (Credit) — — Benefits Paid (2,473,136) (1,331,839) Actuarial (gain) / loss on obligations 2,746,173 (114,335) Effect of transfer in / (transfer out) (460,900) (117,702) Present value of Obligation as at the year end 26,554,810 20,587,045 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 85

NOTES FORMING PART OF THE FINANCIAL STATEMENTS B) Reconciliation of Present Value of Defined Benefit Obligation and the Fair value of Assets

As at As at March 31, 2012 March 31, 2011 ` ` Present Value of funded Obligation as at the year end — — Fair Value of Plan Assets as at the end of the year — — Funded Status — — Present Value of unfunded Obligation as at the year end 26,554,810 20,587,045 Unrecognised Actuarial (gains) / losses — — Unfunded (Liability) recognised in Balance Sheet (26,554,810) (20,587,045)

C) Amount recognised in the Balance Sheet

As at As at March 31, 2012 March 31, 2011 ` ` Present Value of Defined Benefit Obligation at the end of the year 26,554,810 20,587,045 Fair Value of Plan Assets as at the end of the year — — Liability recognised in the Balance Sheet 26,554,810 20,587,045 Recognised under: Long term provisions 26,022,275 18,113,909 Short term provisions 532,535 2,473,136 ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 86

NOTES FORMING PART OF THE FINANCIAL STATEMENTS D) Expenses recognised in the Profit and Loss Account

2011-2012 2010-2011 ` ` Current Service Cost 4,405,730 4,189,797 Past Service Cost — — Interest Cost 1,749,898 1,330,454 Expected Return on Plan Assets — — Curtailment Cost / (Credit) — — Settlement Cost / (Credit) — — Effects of transfer in / (transfer out) (460,900) (117,702) Net actuarial (gain) / loss recognised in the year 2,746,173 (114,335) Total Expenses recognised in the Profit and Loss Account 8,440,901 5,288,814

E) Experience Adjustment

2011-2012 2010-2011 ` ` Defined Benefit Obligation 26,554,810 20,587,045 Plan Assets — — Deficit / Surplus 26,554,810 20,587,045 Experience Adjustment on Plan Liabilities Loss / (Gain) 2,746,173 1,037,081

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 87

NOTES FORMING PART OF THE FINANCIAL STATEMENTS F) Amounts recognised in current year and previous four years

March 31, 2012 March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008 Defined Benefit Obligation 26,554,810 20,587,045 16,630,670 16,845,843 14,186,242 Surplus/ (Deficit) (26,554,810) (20,587,045) (16,630,670) (16,845,843) (14,186,242) Experience adjustment on plan liabilities (Gain) / Loss 2,746,173 1,037,081 (4,584,050) (1,772,887) 234,299

III) The liability for leave encashment and compensated absenses as at the year end is ` 14,173,038 (Previous Year: ` 12,378,764).

29. Segment Information

In accordance with Accounting Standard – 17, “Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company’s business segment is radio broadcasting business and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liabilities, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in the Financial Statements as of and for the year ended March 31, 2012. The Company caters to the needs of the domestic market and hence there are no reportable geographical segments.

30. Related Party Disclosures

i. Parties where control exists Bennett, Coleman & Company Limited (BCCL) – Ultimate Holding Company Times Infotainment Media Limited (TIML) – Holding Company

ii. Subsidiary Companies Alternate Brand Solutions (India) Limited (ABSL) – Subsidiary Company Times Innovative Media Limited (TIM) – Subsidiary Company up to December 29, 2010 TIM Delhi Airport Advertising Private Limited (TIMDAA) - A Subsidiary Company of TIM (ceased to be a subsidiary from December 29, 2010)

iii. Fellow Subsidiary Companies Mirchi Movies (India) Limited (MML) Times Internet Limited (TIL) Times Global Broadcasting Company Limited (TGBCL) Times Business Solutions Limited (TBSL) Optimal Media Solutions Limited (OMSL) ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 88

NOTES FORMING PART OF THE FINANCIAL STATEMENTS Times VPL Limited (TVL) [formerly Vijayanand Printers Limited (VAPL)] Vardhaman Publishers Limited (VPL) Artha Distribution Services Limited (ADSL)* Times Innovative Media Limited (TIM) – from December 30, 2010 TIM Delhi Airport Advertising Private Limited (TIMDAA) - from December 30, 2010

iv. Other Related Party where common control exists Aegon Religare Life Insurance Company (ARLIC) Worldwide Media Private Limited (WWM) Bennett Property Holding Company Limited (BPHCL)

v. Key Managerial Personnel

Chairman Mr. Vineet Jain

Executive Director & Chief Executive Officer Mr. Prashant Panday - Executive Director from July 1, 2010

Non-Executive Directors Mr. N. Kumar Mr. Deepak M. Satwalekar - up to March 30, 2011 Mr. Ravindra Kulkarni Mr. Ravindra Dhariwal Mr. A. P. Parigi Mr. Richard Saldanha - from November 23, 2010 * There are no transactions during the year. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 89

NOTES FORMING PART OF THE FINANCIAL STATEMENTS (vi) Transaction with Related Parties (`)

2011-2012 2010-2011

Other Holding Subsidiary Other Related Fellow Subsidiary Companies Holding Companies Subsidiary company Fellow Subsidiary Companies Related Companies company Party Party

TVL BCCL TIML ABSL MML TIM TIMDAA TIL TGBCL TBSL OMSL TVL (VAPL) VPL ADSL WWM BPHCL ARLIC BCCL TIML TIM ABSL TIMDAA MML TIM TIMDAA TIL TGBCL TBSL OMSL VPL ADSL ARLIC Particulars (VAPL)

Transactions with Related Parties :

Sales 95,948,367 — 177,054 — — — 7,712,137 3,129,700 3,976,740 — 1,410,698 — — 453,000 — 25,680,064 83,068,663 — — 3,020,721 — — — — 2,171,070 2,207,372 1,876,699 — 199,688 — — 297,400

Sale of Fixed Asset 364,500 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —

Purchase of Fixed Asset — — 361,194 — — — — — — — — — — — — — — — — 42,610 — — — — — — — — — — — —

Receiving of services 50,936,295 — 10,312,072 — 1,452,613 — 4,542,379 2,591,094 — 24,027,934 1,556,000 143,750 — — 8,594,316 — 38,767,709 — 2,109,976 72,452,053 — — 464,819 — 2,797,309 13,000 — 20,572,271 — 143,750 — —

Recovery of Expenses 226,936 — 3,485,034 253,194 7,475,608 226,471 — 384,207 — — — — — — — — 8,986,346 — 7,356,080 8,878,777 60,340 713,223 1,674,841 — — 337,403 — — — — — 9,066

Loan Taken — — — — — — — — — — — — — — — — — 35,000,000 — — — — — — — — — — — — — —

Interest received — — — — — — — — — — — — — — — — — — 23,612,793 211,163 — — — — — — — — — — — —

Interest paid — — — — — — — — — — — — — — — — 2,025,294 63,671 — — — — — — — — — — — — — —

Loan Given — — — — — — — — — — — — — — — — — — 585,000,000 16,500,000 — — — — — — — — — — — —

Loan repaid — — — — — — — — — — — — — — — — 34,310,693 35,000,000 — — — — — — — — — — — — — —

Loan repayments received — — — — — — — — — — — — — — — — — 780,000,000 16,500,000 — — — — — — — — — — — —

Sale of Investment — — — — — — — — — — — — — — — — 450,000,000 — — — — — — — — — — — — — — — in Subsidiary

Year end Balances with Related Parties:

Trade Receivables — — — — — — 4,907,684 2,445,376 488,438 — — — — 489,667 — 28,325,111 130,572,015 — — 3,265,221 — — — — 341,707 3,420,688 317,713 — — — 8,922,580 —

Non-trade Receivables (net) — — — 109,641 — 31,084 — 1,780,555 — — — — — — — — — — — 13,387,990 — 751,831 759,685 — — 2,015,669 — — — — — —

Deposit — — — — — — — — — — — — — — 10,000,000 — 10,000,000 — — — — — — — — — — — — — — —

Payables (net) — — — — — — 933,573 — — 13,433,992 — — — — 33,148,140 — 146,494,185 — — — — — — — — — — 15,158,368 — — — — ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 90

NOTES FORMING PART OF THE FINANCIAL STATEMENTS vii. Details relating to Persons referred to in 30 (v) above :

Name of the Person 2011-2012 2010-2011 ` `

Director’s Sitting Fees 1,260,000 910,000 Mr. Prashant Panday 20,653,895 18,246,662 Total 21,913,895 19,156,662

31. Disclosures for Operating Leases Disclosures in respect of cancellable agreements for cars, transmission towers, office and residential premises taken on lease: a) Lease payments recognised in the Profit and Loss Account ` 153,516,356 (Previous Year : ` 136,769,643). b) All the agreements provide for early termination by the Company by giving prior notice in writing. 32. Earnings Per Share (Basic and Diluted) The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of shares outstanding during the year. 2011-2012 2010-2011 Profit for the year (`) (A) 565,095,121 522,089,297 Weighted average number of Equity shares (B) 47,670,415 47,670,415 Earnings per share – basic and diluted (`) (A/B) 11.85 10.95 Nominal value of an equity share (`) 10.00 10.00 33. On December 29, 2010, the Company sold its entire stake in Times Innovative Media Limited (TIM) to Bennett, Coleman & Company Limited (BCCL). The profit from this sale amounting to ` 126,848,239 has been reflected as exceptional items in the financial statements in the previous year. 34. The Company has a Media Collaboration Arrangement with Bennett, Coleman & Company Limited (BCCL), the ultimate holding company. This arrangement seeks to expand the advertisement market and inter- alia helps the Company gain access to certain clients who may not otherwise advertise in FM radio. The revenues generated from this arrangement were ` 149,249,927(Previous Year: ` 167,865,293). Hitherto, in view of the uncertainties subsequent to the sale as to the timing and the quantum of the ultimate collection, the Company had based on the Accounting Standards created a provision for doubtful debts in respect of the sales made pursuant to this arrangement and remaining uncollected. The provision amounted to ` 111,829,272 in the previous year. During the current year, the Company revised the terms of settlement for the deals under the Media Collaboration Arrangement. The Company also finalised the terms of settlement for all outstanding deals done up to March 31, 2011. The revised terms and the settlement of the prior deals resulted in an aggregate net write back of ` 115,247,775. 35. The Honourable Copyright Board (“CRB”) vide its final order dated August 25, 2010 ruled that radio broadcasters will be liable to set apart 2% of the net advertising earnings of each of their FM radio stations for royalty payment to all the music providers in proportion to usage. Following a writ petition by the Super Cassettes Industries Limited (“SCIL”), the Honourable Delhi High Court granted stay on implementation of the aforesaid CRB order against SCIL. Accordingly, w.e.f. August 25, 2010 the Company has accounted the music royalty for sound recordings provided by all music providers other than the SCIL on a revenue share basis. In the interim, the music royalty for sound recording provided by SCIL is accounted based on the needle hour rate indicated in the CRB order dated November 19, 2002. ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 91

NOTES FORMING PART OF THE FINANCIAL STATEMENTS 36. As required by the Clause 32 of the listing agreement, the following disclosure is made: ` Balance as on Maximum amount Balance as on Maximum amount March 31, 2012 outstanding during March 31, 2011 outstanding during the year ended the year ended March 31, 2012 March 31, 2011 i. Loans and advances in the nature of loans to subsidiary. — — — 16,500,000 ii. Loans and advances in the nature of loans to associates. — — — — iii. Loans and advances in the nature of loans where there is no repayment schedule, or interest below rate — — — — specified as per Section 372A of the Companies Act, 1956. iv. Loans and advances in the nature of loans to firms / companies in which directors are interested. — — — — v. Investments by the Loanee in the shares of the Company as on 31st March, 2012. — — — —

37. The financial statements for the year ended March 31, 2011 was prepared as per the then applicable pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per the Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year’s classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

Signatures to Notes “1” to “37” forming part of the financial statements.

For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 92

NOTES FORMING PART OF THE FINANCIAL STATEMENTS Statement pursuant to Section 212 of the Companies Act, 1956 (Amount in `) Alternate Brand Solutions (India) Limited (ABSL) Subsidiary Financial Year Ended March 31, 2012 Holding Company's interest 100% Number of Shares held by the Holding Company 1,600,000 Net aggregate profits / (losses) of the subsidiary for the current year so far as it concerns the members of the holding company a. dealt with or provided for in the accounts of the holding company (`) Nil b. not dealt with or provided for in the accounts of the holding company (`) (5,931,282) Net aggregate profits / (losses) for previous financial years of the subsidiary so far as it concerns the members of the holding company a. dealt with or provided for in the accounts of the holding company (`) Nil b. not dealt with or provided for in the accounts of the holding company (`) (855,206)

(Amount in `)

Subsidiary Issued and Reserves Total Assets Total Liabilities Investments Turnover Profit / (Loss) Provision for Profit / (Loss) Proposed subscribed before taxation taxation after taxation Dividend share capital

Alternate Brand Solutions (India) Limited (ABSL) 16,000,000 47,317,522 141,004,150 141,004,150 55,000,000 112,091,585 (5,931,282) Nil (5,931,282) Nil

For and on behalf of the Board of Directors

Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Chairman Director Director Group CFO N. Kumar A. P. Parigi Prashant Panday Mehul Shah Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 auditors’ report 93

Auditors’ Report on the Consolidated Financial Statements of Entertainment Network (India) Limited

The Board of Directors of Entertainment Network (India) Limited material misstatement. An audit includes examining, on a (a) in the case of the consolidated Balance Sheet, of the state test basis, evidence supporting the amounts and disclosures of affairs of the Group as at March 31, 2012; 1. We have audited the attached consolidated Balance Sheet of in the financial statements. An audit also includes assessing Entertainment Network (India) Limited (the “Company”) and (b) in the case of the consolidated Statement of Profit and the accounting principles used and significant estimates its subsidiary, hereinafter referred to as the “Group” (refer Loss, of the profit of the Group for the year ended on that made by management, as well as evaluating the overall Note 1 (i) to the attached consolidated financial statements) date: and financial statement presentation. We believe that our audit as at March 31, 2012, the related consolidated Statement of (c) in the case of the consolidated Cash Flow Statement, of provides a reasonable basis for our opinion. Profit and Loss and the consolidated Cash Flow Statement for the cash flows of the Group for the year ended on that the year ended on that date annexed thereto, which we have 3. We report that the consolidated financial statements date. signed under reference to this report. These consolidated have been prepared by the Company’s management in financial statements are the responsibility of the Company’s accordance with the requirements of Accounting Standard For Price Waterhouse & Co. management. Our responsibility is to express an opinion on (AS) 21 - Consolidated Financial Statements, notified under Firm Registration Number: 007567S these consolidated financial statements based on our audit. Section 211(3C) of the Companies Act, 1956. Chartered Accountants

2. We conducted our audit in accordance with the auditing 4. In our opinion and to the best of our information and according standards generally accepted in India. Those Standards to the explanations given to us, the attached consolidated Partha Ghosh require that we plan and perform the audit to obtain reasonable financial statements give a true and fair view in conformity Mumbai Partner assurance about whether the financial statements are free of with the accounting principles generally accepted in India: May 25, 2012 Membership Number F-55913 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 CONSOLIDATED Balance Sheet 94 as at March 31, 2012

Notes Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` EQUITY AND LIABILITIES Shareholders' funds Share capital 2 476,704,150 476,704,150 Reserves and surplus 3 3,907,708,381 3,346,673,972 Non - current liabilities Deferred tax liabilities (Net) 4 97,905,815 88,534,018 Long-term provisions 5 38,641,990 30,197,569 Current liabilities Trade payables 6 431,477,458 287,089,471 Other current liabilities 7 167,699,913 361,046,124 Short-term provisions 8 89,727,864 115,916,954 TOTAL 5,209,865,571 4,706,162,258 ASSETS Non - current assets Fixed assets 9 Intangible assets 910,846,873 1,127,055,909 Tangible assets 588,032,864 675,916,465 Capital work-in-progress 912,365 552,186 Non-current investments 10 10,000,000 5,000,000 Long-term loans and advances 11 135,866,936 216,179,035 Other non-current assets 12 73,656,344 77,571,427 Current assets Current investments 10 1,825,068,599 868,404,081 Trade receivables 13 930,374,010 1,131,635,975 Cash and bank balances 14 447,572,171 156,535,792 Short-term loans and advances 15 274,363,995 446,007,348 Other current assets 16 13,171,414 1,304,040 TOTAL 5,209,865,571 4,706,162,258 Notes forming part of the Consolidated Financial Statements 1-34 This is the Consolidated Balance Sheet referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 CONSOLIDATED STATEMENT OF PROFIT AND LOSS 95 FOR THE YEAR ENDED MARCH 31, 2012

Notes 2011-2012 2010-2011 ` ` Revenue from operations 17 3,110,454,244 4,635,464,862 Other income 18 120,670,302 28,763,108 Total Revenue 3,231,124,546 4,664,227,970 Expenses: Production expenses 19 229,569,676 516,504,907 License fees 20 152,015,260 1,076,208,404 Employee benefits expense 21 649,110,784 748,672,762 Depreciation and amortisation expense 9 325,392,191 422,557,804 Other expenses 22 1,081,615,991 1,277,934,624 Finance costs 23 14,437 35,437,106 Total expenses 2,437,718,339 4,077,315,607 Profit before Taxation and Exceptional Item 793,406,207 586,912,363 Loss on Sale of Long Term Investment (Refer Note 30) — (177,647,596) Profit before Taxation 793,406,207 409,264,767 Tax expense: (Refer Note (1)(xi)) Current tax 223,000,000 186,174,185 Deferred tax 9,371,797 158,840,605 Minimum alternate tax credit entitlement — (112,997,402) Profit after Taxation and before Minority Interest 561,034,410 177,247,379 Minority Interest — 5,502,733 Profit for the year 561,034,410 171,744,646 Earnings per equity share [nominal value per share: ` 10 (2010-11: ` 10) (Refer Note (1) (x)) 29 –– Basic 11.77 3.60 –– Diluted 11.77 3.60 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 1-34 This is the Consolidated Statement of Profit and Loss referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 CONSOLIDATED CASH FLOW STATEMENT 96 FOR THE YEAR ENDED MARCH 31, 2012

2011-2012 2010-2011 ` ` A) CASH FLOW FROM OPERATING ACTIVITIES : Profit Before Taxation 793,406,207 409,264,767 Adjustments for : Depreciation and Amortisation 325,392,191 422,557,804 Tangible Assets written off 2,229,817 20,530,310 Loss on Sale of Long Term Investment — 177,647,596 Interest Income (31,547,963) (12,981,294) Interest Expense 14,437 35,437,106 Provision no longer required written back (3,495,410) (44,316,555) Dividend on Investments received (76,638,018) (732,781) Loss / (Profit) on sale of Tangible Assets 657,364 (546,619) Profit on Sale of Short Term Investments (Net) (12,411,496) (14,098,387) Provision for Doubtful Advances — 40,167,029 Provision for Doubtful Deposits 446,513 426,497 Provision for Doubtful Debts (Net) (129,595,655) 160,462,162 Bad Debts written off / (realised) (Net) 54,451,895 104,813,532 Provision for Retirement Benefits 6,470,936 5,670,139 Operating Profit Before Working Capital Changes 929,380,818 1,304,301,306 Adjustments for changes in working capital : Decrease/(Increase) in Trade Receivables 276,405,725 (560,399,172) Increase in Long term loans and advances (11,750,953) (645,227,336) Decrease in Other non current assets 4,813,691 1,144,554 Decrease/(Increase) in Short term loans and advances 81,293,084 (66,954,585) Increase in Trade payables 147,883,397 154,682,364 (Decrease)/ Increase in Other current liabilities (193,346,211) 92,415,645 (Decrease)/ Increase in Short term provisions (24,215,605) 49,833,989 Cash generated from operations 1,210,463,946 329,796,765 Taxes paid (net) (41,033,192) (173,359,305) Net Cash generated from Operating Activities (A) 1,169,430,754 156,437,460 B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Tangible Assets (26,958,996) (285,219,573) Movement in Capital Work-in-Progress (360,179) (552,186) Proceeds from Sale of Tangible Assets 2,772,261 879,875 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 CONSOLIDATED CASH FLOW STATEMENT 97 FOR THE YEAR ENDED MARCH 31, 2012

2011-2012 2010-2011 ` ` Dividend on Investments received 76,931,417 439,381 Purchase of Current Investments (5,509,635,499) (2,989,020,360) Purchase of Long term Investments (5,000,000) (5,000,000) Proceeds from Sale of Current Investments 4,565,382,477 2,151,214,665 Proceeds from Sale of Long Term Investments — 446,848,239 Interest received 18,488,581 16,569,729 Net Cash used in Investing Activities (B) (878,379,938) (663,840,230) C) CASH FLOW FROM FINANCING ACTIVITIES : Proceeds from Long Term Borrowings : –– Payments — (34,310,693) Proceeds from Short Term Borrowings : –– Receipts — 1,580,296,856 –– Payments — (1,120,000,000) Interest paid (14,437) (35,490,764) Share Application money received from minority shareholders — 127,120,250 Net Cash Flow (used in)/generated from Financing Activities (C) (14,437) 517,615,649 Net Increase in Cash and Cash Equivalents (A+B+C) 291,036,379 10,212,879 Cash and Cash Equivalents as at the beginning of the year 156,535,792 203,729,434 Cash and Cash Equivalents transferred pursuant to Sale of Subsidiary — (57,406,521) Cash and Cash Equivalents as at the end of the year 447,572,171 156,535,792 291,036,379 10,212,879 NOTES ON CASH FLOW STATEMENT : 1. Cash and cash equivalents at the end of the year as per Balance Sheet. 447,572,171 156,535,792 (Refer Note 14 on statement of financial statements) 447,572,171 156,535,792 2. The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. 3. Previous Year’s figures have been regrouped and rearranged wherever necessary. 4. Cash flows in brackets indicate cash outgo. This is the Consolidated Cash Flow Statement referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 98

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 1. Significant Accounting Policies iii. Principles of Consolidation iv. Revenue Recognition 1. The consolidated financial statements have been i. Basis of Accounting a. Revenue from radio broadcasting is recognised on an prepared on the following basis: accrual basis on the airing of client’s commercials. The Consolidated Financial Statements of Entertainment –– The financial statements of the Company and its The revenue that is recognised is net of service tax. Network (India) Limited (“the Company”) and its subsidiary subsidiary companies have been combined on b. Revenue from short period events is recognised company, Alternate Brand Solutions (India) Limited, a line-by-line basis by adding together the book according to the completed performance method. (collectively referred to as ‘the Group’) are prepared under values of like items of assets, liabilities, revenues Revenue from services provided over a longer term the historical cost convention to comply in all material and expenses. aspects with all the applicable accounting principles in is recognised when the result of the transactions can –– Intra-group balances and intra-group transactions India and the Accounting Standard 21 on Consolidation of be determined with reliability and on the percentage and resulting profits are eliminated in full. . Financial Statements, issued by the Institute of Chartered completed basis. Down payments invoiced before –– The consolidated financial statements have been Accountants of India, to the extent possible in the same these dates are recorded under prepaid income / prepared using uniform accounting policies format as that adopted by the Company for its separate customer advances. for like transactions and other events in similar financial statements. c. Revenue from Outdoor advertising business is circumstances and are presented to the extent recognised on the display of advertisements net of All assets and liabilities have been classified as current possible in the same manner as the Company’s service tax. or non-current as per the criteria set out in the Revised separate financial statements. Schedule VI to the Act. d. Dividend income on mutual fund units is accounted for 2. The subsidiaries considered in the consolidated when the right to receive the payment is established financial statements are: ii. Use of Estimates by the balance sheet date. Name of the Company Country of % voting The preparation of financial statements in accordance with Incorporation power e. Interest income is recognized on time proportionate the generally accepted accounting principles requires the Alternate Brand Solutions India 100.00% basis taking into account the amount outstanding Management to make estimates and assumptions that (India) Limited (ABSL) as and the rate applicable. affect the reported amounts of assets and liabilities and on 31st March 2012 f. Profit on sale of units of mutual funds is recognized disclosure of contingent liabilities as at the date of the Times Innovative Media India 83.44% at the time of redemption and is determined as the financial statements and the reported amounts of revenues Limited (TIM)* difference between the redemption price and the and expenses during the year. Actual results could differ TIM Delhi Airport India 50.10% carrying value. from these estimates. Any revision to such accounting Advertising Private Limited estimates is recognised prospectively in the accounting (TIMDAA)* v. Fixed assets and Depreciation period in which such revision takes place. *Results consolidated till sale on December 29, 2010 Cost of fixed assets comprises purchase price, duties, (Refer Note 30). levies and any directly attributable cost of bringing the asset ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 99

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

to its working condition and location for the intended use. The migration fee capitalised is being amortised, with vii. Investments effect from April 1, 2005, equally over a period of ten Borrowing cost directly attributable to fixed assets which Investments that are intended to be held for not more than a years, being the period of the license. One Time Entry take substantial period of time to get ready for its intended year from the date of investments are classified as Current Fee will be amortised over a period of ten years, being use are capitalised to the extent they relate to the period till investments. All other investments are termed as Long term the period of license, from the date of operationalisation such assets are ready to be put to use. investments. of the respective stations. Cost of assets not ready for their intended use before such Current investments are carried at cost or fair value, date are disclosed as Capital Work-in-Progress. c. Software whichever is lower. Long term investments are stated at cost. However, provision for diminution in value is made to a. Tangible assets i. Software obtained initially together with hardware recognise a decline other than temporary in the value of the Tangible fixed assets are stated at cost less accumulated is capitalised along with the cost of hardware and long term investments. depreciation and impairment losses, if any. depreciated in the same manner as the hardware. All subsequent purchases of software licenses Depreciation on tangible fixed assets is provided on viii. Retirement Benefits are treated as revenue expenditure and charged written down value method at the rates and in the in the year of purchase. a. Short Term Employee Benefits : manner specified in Schedule XIV to the Act. The The employees of the Company are entitled to leave cost of leasehold improvements is amortized over the ii. Expenditure on acquired Computer Software encashment as per the leave policy of the Company. primary period of lease of the property. Leasehold land (SAP) is recognised as “Intangible Asset” and The liability in respect of leave encashment which is not amortised since the term of lease is perpetual in amortised over a period of twenty five months. is expected to be encashed / utilised within twelve nature. Tangible assets individually costing less than Expenditure on other software where the months after the balance sheet date is considered to ` 5,000 are depreciated fully in the year of purchase. economic benefit is expected to be more than a be of short term nature. year is amortised. Plant and machinery in the outdoor business is b. Long Term Employee Benefits : depreciated over the useful life of the asset, being the vi. Foreign Currency Transactions period of the respective underlying contract, on an Defined Contribution Plans: Foreign currency transactions are recorded at the exchange uniform basis. rates prevailing on the date of the transaction. Gains and The Company has Defined Contribution Plans for b. Intangible assets (other than Software) losses arising out of subsequent fluctuations are accounted post employment benefits such as Provident Fund Migration fees paid by the Company for existing for on actual payment or realisation. Monetary items and Employee’s Pension Scheme, 1995. Under the licenses upon migration to Phase II of the Licensing denominated in foreign currency as at the balance sheet Provident Fund Plan, the Company contributes to a policy and One Time Entry Fees paid by the Company date are converted at the exchange rates prevailing on that Government administered Provident Fund on behalf for acquiring new licenses have been capitalised as day. Exchange differences are recognised in the Profit and of its employees and has no further obligation beyond an asset. Loss Account. making its contribution. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 100

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

The Company contributes to a State Plan namely Loss on a straight-line basis over the period of the lease. an asset if there is convincing evidence that the Company Employee’s Pension Scheme, 1995 and has no will pay normal tax in future. Accordingly, MAT is recognised x. Earnings per share further obligation beyond making its contribution. Basic earnings per share is calculated by dividing the as an asset in the balance sheet when it is probable that The Company’s contributions to the above funds are net profit or loss for the period attributable to equity the future economic benefit associated with it will flow to charged to revenue every year. shareholders by the weighted average number of the Company and the asset can be measured reliably. equity shares outstanding during the period. Earnings Defined Benefit Plans: Deferred tax is recognised, subject to the consideration considered in ascertaining the Company’s earnings of prudence, on timing differences, being the difference The Company has a Defined Benefit Plan namely per share is the net profit for the period after deducting between taxable income and accounting income that Gratuity and Leave Encashment for all its employees. preference dividends and any attributable tax thereto for originate in one period and are capable of reversal in The liabilities in respect of Leave Encashment which the period. The weighted average number of equity shares one or more subsequent periods. Deferred tax assets is expected to be encashed / utilised after twelve outstanding during the period and for all periods presented are recognised only to the extent that there is reasonable months from the balance sheet date is considered to is adjusted for events, such as bonus shares, other than certainty that sufficient future taxable income will be be long term in nature. the conversion of potential equity shares, that have available against which such deferred tax assets can be Liability for Defined Benefit Plan is provided on the changed the number of equity shares outstanding, without realised. basis of valuations, as at the balance sheet date, a corresponding change in resources. For the purpose of xii. Impairment of Assets carried out by an independent actuary. The actuarial calculating diluted earnings per share, the net profit or loss valuation method used by the independent actuary for the period attributable to equity shareholders and the The Company assesses at each balance sheet date for measuring the liability is the Projected Unit Credit weighted average number of shares outstanding during whether there is any indication that asset may be impaired. Method. Actuarial losses/gains are recognised in the the period is adjusted for the effects of all dilutive potential If any such indication exists, the Company estimates the statement of profit and loss in the year in which they equity shares. recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the arise. xi. Income Taxes cash generating unit to which the asset belongs is less c. Termination benefits are recognised as an expense Tax expense comprises of Current and Deferred tax. than its carrying amount, the carrying amount is reduced as and when incurred. Current income tax is measured based on the amount to its recoverable amount. The reduction is treated as an expected to be paid to the tax authorities in accordance ix. Operating Leases impairment loss and is recognised in the Profit and Loss with the Income Tax Act, 1961. Leases in which a significant portion of the risks and Account. If at the balance sheet date there is an indication rewards of ownership are retained by the lessor are Minimum Alternate Tax (MAT) paid in accordance with tax that a previously assessed impairment loss no longer classified as operating leases. Payments made under laws which give rise to future economic benefits in the form exists, the recoverable amount is reassessed and the operating leases are charged to the Statement of Profit and of adjustment to future income tax liability is considered as asset is reflected at the recoverable amount. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 101

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

xiii. Provisions and Contingent Liabilities A disclosure for a contingent liability is made when there at the rate of 4% of gross revenue for the period or 10% of is a possible obligation or a present obligation that may, The Company recognises a provision when there is a Reserve One Time Entry Fee (ROTEF) for the concerned but probably will not, require an outflow of resources present obligation as a result of a past event that probably city, whichever is higher. Gross Revenue for this purpose embodying economic benefit. Where there is a possible requires an outflow of resources and a reliable estimate shall mean revenue on the basis of billing rates inclusive obligation or a present obligation that the likelihood of can be made of the amount of the obligation. Provisions of any taxes and without deduction of any discount given outflow of resources is remote, no provision or disclosure are not discounted to its present date value and are to the advertiser and any commission paid to advertising is made. determined based on best estimates of the amount agencies. Barter advertising contracts shall also be required to settle the obligation at the balance sheet xiv. License Fees included in the gross revenue on the basis of relevant date. These are reviewed at each balance sheet date and As per the Frequency Module (FM) broadcasting policy, billing rates. ROTEF means 25% of highest valid bid in the adjusted to reflect the current best estimates. effective April 1, 2005 license fees are charged to revenue city. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 102

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 2 : SHARE CAPITAL Authorised Capital 120,000,000 (Previous Year : 120,000,000) Equity shares of ` 10 each 1,200,000,000 1,200,000,000 Issued and Subscribed 47,670,415 (Previous Year : 47,670,415) Equity shares of ` 10 each fully paid-up 476,704,150 476,704,150 476,704,150 476,704,150 Notes: (a) Terms attached to equity shares The Company has only one class of equity shares. Each shareholder is eligible for one vote per share held. The par value per share is ` 10. (b) Shares held by Holding company and subsidiary of Holding company Shares (nos) Shares (nos) i) Equity Shares of ` 10 each held by Times Infotainment Media Limited, the Holding Company. 30,526,560 30,526,560 ii) Equity Shares of ` 10 each held by Bennett, Coleman & Company Limited, the Ultimate Holding Company. 3,391,840 3,391,840 (c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company Shares (nos) Shares (nos) (in %) (in %) i) Times Infotainment Media Limited, the Holding Company. 30,526,560 30,526,560 (64.04%) (64.04%) ii) Bennett, Coleman & Company Limited, the Ultimate Holding Company. 3,391,840 3,391,840 (7.12%) (7.12%) iii) SBI Life Insurance Company Limited. 2,715,269 2,088,503 (5.70%) (4.38%)

NOTE 3 : RESERVES AND SURPLUS Capital Reserve As per last balance sheet — 2,086,092 Less: Capital Reserve of subsidiary transferred pursuant to sale (Refer Note 30) — (2,086,092) — — ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 103

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` Securities Premium Account As per last balance sheet 1,885,070,431 3,488,149,831 Less: Securities Premium of subsidiary transferred pursuant to sale (Refer Note 30) — (1,603,079,400) 1,885,070,431 1,885,070,431 Surplus in Statement of Profit and Loss Balance as at the beginning of the year 1,461,603,541 (315,306,597) Add: Profit for the year 561,034,409 171,744,646 Transferred pursuant to sale of subsidiary — 1,605,165,492 Balance as at end of the year 2,022,637,950 1,461,603,541 3,907,708,381 3,346,673,972

NOTE 4 : DEFERRED TAX LIABILITIES (NET) (Refer Note 1(xi)) Deferred tax assets and liabilities are attributable to the following items: Assets: Provision for Doubtful Debts 51,543,257 96,212,881 Provision for Doubtful Advances — 2,076,094 Provision for compensated absences 4,598,442 4,111,916 Provision for gratuity 8,615,708 6,838,502 Others 496,478 416,368 65,253,885 109,655,761 Liability: Depreciation 163,159,700 198,189,779 163,159,700 198,189,779 (97,905,815) (88,534,018) Note: Deferred Tax Assets and Deferred Tax Liabilities have been offset as they relate to the same governing taxation laws. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 104

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 5 : Long-term provisions Provision for employee benefits (Refer Notes (1)(viii) and 25) Provision for gratuity 26,127,465 18,745,633 Provision for compensated absences 12,514,525 11,451,936 38,641,990 30,197,569

NOTE 6 : Trade payables Sundry Creditors 431,477,458 287,089,471 431,477,458 287,089,471

NOTE 7 : Other current liabilities Advance from Customers 26,861,646 46,435,819 Other Payables Statutory dues 28,985,709 71,627,494 Related parties (Refer Note below) 111,801,633 242,982,811 Employee benefits payable 50,925 — 167,699,913 361,046,124 Note: Payable to Bennett, Coleman & Company Limited, the Ultimate Holding Company — 146,494,185

NOTE 8 : Short-term provisions Provision for employee benefits Provision for gratuity (Refer Notes (1) (viii) and 25) 532,914 2,842,120 Provision for compensated absences (Refer Notes (1) (viii) and 25) 2,046,725 1,711,004 Provision for bonus 87,148,225 111,363,830 89,727,864 115,916,954 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 105

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 9 : FIXED ASSETS (Refer Notes 1(v) and (xii)) (`) PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK As at Additions Deletions Transfer on sale As at As at For the year On Transfer on sale As at As at As at April 1, 2011 of Subsidiary* March 31, 2012 April 1, 2011 Deletions of Subsidiary* March 31, 2012 March 31, 2012 March 31, 2011 Intangible Assets Computer Software (SAP) 16,907,372 — — — 16,907,372 16,907,372 — — — 16,907,372 — — Migration Fees 815,234,695 — — — 815,234,695 489,140,820 81,523,470 — — 570,664,290 244,570,405 326,093,875 One Time Entry Fees 1,346,855,672 — — — 1,346,855,672 545,893,638 134,685,566 — — 680,579,204 666,276,468 800,962,034 Total 2,178,997,739 — — — 2,178,997,739 1,051,941,830 216,209,036 — — 1,268,150,866 910,846,873 1,127,055,909 Previous Year 2,178,997,739 — — — 2,178,997,739 835,732,794 216,209,036 — — 1,051,941,830 — — Tangible Assets Land - Leasehold 2,036,147 — — — 2,036,147 — — — — — 2,036,147 2,036,147 Building 7,578,551 — — — 7,578,551 2,863,631 235,746 — — 3,099,377 4,479,174 4,714,920 Leasehold Improvements 274,266,915 2,591,054 5,556,395 — 271,301,574 151,038,833 19,453,983 5,108,295 — 165,384,521 105,917,053 123,228,082 Office Equipment 1,010,338,816 16,488,080 11,957,981 — 1,014,868,915 502,018,862 74,955,159 7,599,031 — 569,374,990 445,493,925 508,319,954 Computers 167,065,829 7,031,385 15,649,607 — 158,447,607 139,897,762 12,017,961 14,849,272 — 137,066,451 21,381,156 27,168,067 Furniture and Fixtures 33,915,285 848,477 549,185 — 34,214,577 27,180,220 1,559,371 526,572 — 28,213,019 6,001,558 6,735,065 Motor Vehicles 9,013,809 — 408,666 — 8,605,143 5,299,579 960,935 379,222 — 5,881,292 2,723,851 3,714,230 Total 1,504,215,352 26,958,996 34,121,834 — 1,497,052,514 828,298,887 109,183,155 28,462,392 — 909,019,650 588,032,864 675,916,465 Previous Year 2,321,561,360 285,219,573 197,091,904 905,473,677 1,504,215,352 986,398,949 206,348,768 176,228,338 188,220,492 828,298,887 Capital work-in-progress 912,365 552,186 (*Refer Note 30)

Note: As per the Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company was given the option to migrate all its existing licenses from Phase I regime to Phase II regime on payment of migration fees. Migration fees for each station was equal to the average of all successful bids received for that city. The Company had exercised the option and had migrated its licenses for all the seven cities to Phase II regime by payment of migration fees aggregating ` 815,234,695. Migration Fees has remaining amortisation period of three years. Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. The payment made by the Company to acquire these frequencies (One Time Entry Fees) was ` 1,301,000,000. The remaining amortisation period of OTEF ranges between three and six years. Based on the opinion obtained from an independent firm of Chartered Accountants, both Migration Fees and One Time Entry Fees have been capitalised as Intangible Assets. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 106

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 Nos. ` Nos. ` Note 10 : INVESTMENTS Non-current investments (Refer Note 1(vii)) Non-Trade, Long Term (Unquoted) at cost Capital Gains Bonds: Non-convertible redeemable taxable bonds 1,000 10,000,000 500 5,000,000 (with benefits u/s 54EC of the Income Tax Act, 1961 for Long Term Capital Gains) Non-Current Investments 10,000,000 5,000,000

Current Investments (at the lower of cost or market value) Non-Trade, Current (Quoted - Mutual Funds) Axis Fixed Term Plan - Series 20 (3 Months) - Growth, of ` 10 each 4,501,495 45,014,950 — — Birla Sun Life Short Term FMP Series 29 Growth, of ` 10 each 1,750,010 17,500,100 — — Birla Sun Life Short Term FMP Series 30 Growth, of ` 10 each 2,500,000 25,000,000 — — DSP BlackRock FMP - 3M Series 32 - Dividend Payout, of ` 10 each — — 10,000,000 100,000,000 DSP BlackRock FMP - Series 29 - 3M - Growth, of ` 10 each 5,000,000 50,000,000 — — DSP BlackRock FMP - Series 33 - 3M - Growth, of ` 10 each 8,712,925 87,129,251 — — HDFC FMP 92D March 2012 (1) - Growth - Series XIX, of ` 10 each 10,000,000 100,000,000 — — ICICI Prudential Interval Fund – Interval Plan 1 – Quarterly Institutional Growth, of ` 10 each 6,156,490 69,999,994 — — ICICI Prudential Interval Fund – Monthly Interval Plan - I Institutional Dividend, of ` 10 each — — 9,995,202 99,999,997 ICICI Prudential Interval Fund II – Interval Plan B – Quarterly Institutional Growth, of ` 10 each 7,331,302 83,257,503 — — ICICI Prudential Interval Fund II – Quarterly Interval Plan D – Institutional Growth, of ` 10 each 1,312,324 14,999,995 14,995,951 149,999,999 ICICI Prudential Interval Fund IV – Quarterly Interval Plan B – Institutional Dividend, of ` 10 each — — 7,000,000 70,000,000 IDFC Fixed Maturity Quarterly Series 63 - Dividend, of ` 10 each — — 9,000,000 90,000,000 IDFC Fixed Maturity Quarterly Series 68 - Growth, of ` 10 each 2,000,677 20,006,773 — — IDFC Fixed Maturity Quarterly Series 69 - Growth, of ` 10 each 2,250,000 22,500,000 — — Kotak Quarterly Interval Plan Series 1 - Dividend, of ` 10 each — — 10,000,000 100,000,000 Kotak Quarterly Interval Plan Series 2 - Growth, of ` 10 each 3,544,973 49,990,030 — — Kotak Quarterly Interval Plan Series 4 - Growth, of ` 10 each 5,794,162 80,000,000 — — ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 107

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 Nos. ` Nos. ` Kotak Quarterly Interval Plan Series 9 - Growth, of ` 10 each 4,015,838 50,000,000 — — Reliance Quarterly Interval Fund - Series III - Institutional Growth Plan-Growth Option, of ` 10 each 690,105 10,009,215 — — UTI - Fixed Income Interval Fund - Quarterly Interval Plan IV - Series II - Institutional Growth, of ` 10 each 7,954,160 89,987,003 — — UTI - Fixed Income Interval Fund - Quarterly Interval Plan Series III - Institutional Growth, of ` 10 each 4,205,804 60,000,000 — — UTI - Fixed Income Interval Fund - Series II - Quarterly Interval Plan V - Institutional Growth, of ` 10 each 6,162,517 69,998,800 — — UTI - Fixed Maturity Plan - Quarterly Series (QFMP 02/12 - I) - Institutional Growth, of ` 10 each 1,000,000 10,000,000 — — UTI - Fixed Maturity Plan - Quarterly Series (QFMP 02/12 - II) - Institutional Growth, of ` 10 each 2,500,200 25,002,000 — — Sub-total (A) 980,395,614 609,999,996

Note: The market price has been determined based on the NAV declared on the balance sheet date by the Mutual fund houses. Aggregate market value of Quoted mutual fund units held by the Company is ` 991,388,438 (Previous Year : ` 611,766,636) ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 108

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 Nos. ` Nos. ` Current investments (at the lower of cost or market value) Non-Trade, Current (Unquoted - Mutual Funds) Axis Short Term Fund - Institutional Growth, of ` 10 each 4,369,199 50,578,282 — — DSP BlackRock Short Term Fund - Growth, of ` 10 each 2,991,108 54,367,579 — — DWS Short Maturity Fund - Premium Plus Growth, of ` 10 each 4,601,883 50,811,686 — — DWS Ultra Short Term Fund - Institutional Growth, of ` 10 each 4,598,349 58,257,402 — — HDFC Mutual Fund – Liquid Fund Premium Plus Plan – Growth, of ` 10 each — — 7,329,977 141,681,293 ICICI Prudential Blended Plan B Institutional Growth Option - II, of ` 10 each 4,039,067 46,717,065 — — ICICI Prudential Liquid Super Institutional Plan – Growth, of ` 100 each 346,958 55,000,000 76,278 11,035,935 IDFC Cash Fund - Super Institutional Plan C – Growth, of ` 10 each — — 7,911,448 93,035,460 IDFC Money Manager Fund - Investment Plan - Inst Plan B - Growth, of ` 10 each 3,020,418 50,000,000 — — IDFC - SSIF - Short Term - Plan B – Growth, of ` 10 each 4,245,991 51,887,278 — — IDFC - Ultra Short Term Fund – Growth, of ` 10 each 9,207,835 136,514,443 — — Kotak Bond (Short Term) - Growth, of ` 10 each 1,516,137 30,454,644 — — Reliance Floating Rate Fund - Short Term Plan - Growth Plan, of ` 10 each 3,001,771 50,596,659 — — Reliance Liquid Fund - Treasury Plan - Institutional Option - Growth Option 2,107,441 55,000,000 — — – Growth Plan, of ` 10 each Reliance Mutual Fund – Cash Plan – Growth Plan, of ` 10 each — — 799,308 12,651,397 Templeton India Low Duration Fund - Growth, of ` 10 each 8,965,957 103,477,902 — — Templeton India Short Term Income Fund - Growth, of ` 1000 each 23,953 51,010,045 — — Sub-total (B) 844,672,985 258,404,085 Current Investments (A)+(B) 1,825,068,599 868,404,081 Note: The market price has been determined based on the closing NAV declared on the balance sheet date by the Mutual fund houses. Aggregate market value of Unquoted mutual fund units held by the Company is ` 845,611,037 (Previous Year : ` 262,478,247) ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 109

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 11 : Long-term loans and advances (Unsecured Considered good unless otherwise stated) Capital Advances 235,565 10,922,919 Deposits: Considered Good 115,094,383 92,703,594 Considered Doubtful 873,010 6,676,497 115,967,393 99,380,091 Less: Provision for Doubtful Deposits (873,010) (6,676,497) 115,094,383 92,703,594 Other long term loans and advances Employee loans 1,076,024 1,475,019 Minimum Alternate Tax Credit Entitlement (long term) 2,400,000 81,499,579 Advance Tax and Tax deducted at Source [Net of Provision of ` 58,870,815 (Previous Year : ` 298,358,870)] 17,060,964 29,577,924 135,866,936 216,179,035 Note 12 : Other non-current assets Non current bank balances (margin money deposits) 71,501,840 76,315,531 Interest accrued on deposits 2,154,504 1,255,896 73,656,344 77,571,427 NOTE 13 : Trade receivables Unsecured, considered good Outstanding for a period exceeding 6 months from the date they are due for payment 68,912,683 178,645,581 Others 861,461,327 952,990,394 930,374,010 1,131,635,975 Unsecured, considered doubtful Outstanding for a period exceeding 6 months from the date they are due for payment 108,648,977 220,601,843 Others 58,853,973 76,496,762 167,502,950 297,098,605 1,097,876,960 1,428,734,580 Less: Provision for Doubtful Debts (167,502,950) (297,098,605) 930,374,010 1,131,635,975 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 110

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 14 : Cash and bank balances Cash and cash equivalents: Cheques on hand 23,616,746 — Balances with banks: Current Accounts 83,955,425 56,535,792 Other bank balances Deposits with original maturity for more than 3 months but less than 12 months 340,000,000 100,000,000 Balances with bank held as security against Guarantees issued by banks Margin money deposits 71,501,840 76,315,531 Less: Amount disclosed under non current assets (71,501,840) (76,315,531) 447,572,171 156,535,792 NOTE 15 : Short-term loans and advances (Unsecured Considered good unless otherwise stated) Loans and advances to related parties: Due from other related parties 1,921,280 4,490,100 Prepaid expenses 64,053,131 77,148,902 Advances recoverable in cash or in kind or for value to be received: Considered Good 52,445,617 82,903,312 Deposits: Considered Good 2,155,497 37,326,294 Advance Tax and Tax deducted at Source [Net of Provision of ` 344,854,261 (Previous Year : ` 251,938,055)] 45,386,380 108,640,917 Minimum Alternate Tax Credit Entitlement 108,402,090 135,497,823 274,363,995 446,007,348 NOTE 16 : OTHER CURRENT ASSETS (Unsecured Considered good unless otherwise stated) Interest accrued on deposits 13,171,414 1,010,640 Dividend receivable on Investments — 293,400 13,171,414 1,304,040 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 111

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2011-2012 2010-2011 ` ` NOTE 17 : Revenue from Operations Airtime Sales (Refer Notes 1(iv)(a) and 31) 2,946,643,762 2,721,775,174 Event Income (Refer Note 1(iv)(b)) 91,260,572 336,562,040 Out of Home Media Income (Refer Note 1(iv)(c)) — 1,483,326,172 Digital Revenues, Service fee, Marketing and Sales Commission 58,443,029 31,870,419 Other operating income –– Provision no longer required written back 3,495,410 44,316,555 –– Others 10,611,471 17,614,502 14,106,881 61,931,057 3,110,454,244 4,635,464,862 NOTE 18 : Other Income Interest Income (Refer Note 1 (iv) (e)) –– On Loan — 29,779 –– On Fixed Deposits 22,774,477 7,011,735 –– On Income-Tax Refund 7,924,113 3,885,890 –– On Others 849,373 2,053,890 Dividend Income (Refer Note 1 (iv) (d)) 76,638,018 732,781 Profit on Sale of Short term Investments (Net) (Refer Note 1 (iv) (f)) 12,411,496 14,098,387 Miscellaneous Income 72,825 950,646 120,670,302 28,763,108 NOTE 19 : Production expenses Royalty (Refer Note 32) 110,231,650 129,066,593 Other Production Expenses 36,100,846 31,880,818 Event Expenses 83,237,180 274,573,482 Out of Home Media Expenses — 80,984,014 229,569,676 516,504,907 NOTE 20 : License fees License Fees (Refer Note 1(xiv)) 152,015,260 1,076,208,404 152,015,260 1,076,208,404 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 112

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` NOTE 21 : Employee benefits expense Salaries, Wages and Allowances 585,420,399 685,462,305 Contributions to Provident and Other Funds (Refer Notes 1(viii) and 25) 21,610,381 22,183,865 Gratuity (Refer Notes 1(viii) and 25) 7,914,746 6,658,048 Staff Welfare expenses 34,165,258 34,368,544 649,110,784 748,672,762 NOTE 22 : Other expenses Rent 164,669,841 157,299,447 Rates and Taxes 2,318,175 11,702,194 Power and Fuel 91,503,160 115,477,747 Marketing 548,804,575 271,240,910 Travelling and Conveyance 93,980,479 124,710,044 Insurance 3,471,557 3,831,450 Communication 15,341,909 16,027,199 Repairs and Maintenance on: –– Buildings 925,474 2,859,726 –– Plant and Machinery 21,276,111 21,108,716 –– Others 25,496,368 23,987,727 Legal and Professional Fees 93,711,202 106,575,021 Software Expenses (Refer Note 1(v)(c)) 25,629,257 26,756,271 Payment To Auditors As Auditors: Audit Fee 3,000,000 3,597,823 Other Services 570,000 70,000 Reimbursement of expenses 130,488 81,214 3,700,488 3,749,037 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 113

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` Provision for Doubtful Debts 125,876,355 204,634,991 Provision for Doubtful Debts withdrawn (255,472,010) (44,172,830) (129,595,655) 160,462,161 Doubtful deposits written off 6,250,000 Provision for doubtful deposits written back (6,250,000) — — Bad Debts written off (Net) 54,451,895 104,813,533 Provision for doubtful deposits 446,513 426,497 Loss on Sale of Tangible Assets 657,364 245,309 Directors' Sitting Fees 1,260,000 1,350,000 Tangible Assets written off 2,229,817 20,285,001 Provision for Doubtful Advances — 40,167,029 Net loss on foreign currency transaction and translation 206,153 1,203 Miscellaneous Expenses 61,131,308 64,858,402 1,081,615,991 1,277,934,624 NOTE 23 : Finance CostS Interest Expense On Short term Loan — 33,462,684 On Others 14,437 1,974,422 14,437 35,437,106

24. Commitments to the extent not provided for

Estimated amount of contracts remaining to be executed on capital account ` 1,523,654 (Previous Year: ` 933,966) net of advances of ` 234,565 (Previous Year: ` 10,922,919).

25. The Group has classified the various employee benefits provided to employees as under:-

I) Defined Contribution Plans a) Provident Fund b) State Defined Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 114

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS During the year, the Group has recognised the following amounts in the Profit and Loss Account:-

2011-2012 2010-2011 ` ` –– Employers’ Contribution to Provident Fund * 16,070,480 16,417,575 –– Employers’ Contribution to Employee’s Pension Scheme, 1995 * 4,804,634 5,126,680 –– Employers’ Contribution to Employee State Insurance Scheme * 735,267 639,610 * Included in Contributions to Provident and Other Funds (Refer Note 21)

II) Defined Benefit Plans In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid Defined Benefit Plan of gratuity based on the following assumptions:- As at As at March 31, 2012 March 31, 2011 Discount Rate (per annum) 8.50% - 8.65% 8.25% - 8.50% Rate of increase in Compensation levels 6.50% 6.50% Attrition rates 1.00% - 10.00% 1.00%

A) Changes in the Present Value of Obligation As at As at March 31, 2012 March 31, 2011 ` ` Present Value of Obligation at the beginning of the year 21,587,753 20,806,953 Interest Cost 1,823,898 1,601,142 Past Service Cost — — Current Service Cost 4,460,099 5,667,812 Curtailment Cost / (Credit) — — Settlement Cost / (Credit) — — Benefits Paid (2,842,120) (2,040,085) Actuarial (gain) / loss on obligations 2,403,589 (461,374) Effect of transfer in / (transfer out) (772,840) (3,986,695) Present Value of Obligations at the year end 26,660,379 21,587,753 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 115

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS B) Reconciliation of Present Value of Defined Benefit Obligation and the Fair value of Assets As at As at March 31, 2012 March 31, 2011 ` ` Present Value of funded Obligation as at the year end — — Fair Value of Plan Assets as at the end of the year — — Funded Status — — Present Value of unfunded Obligation as at the year end 26,660,379 21,587,753 Unrecognised Actuarial (gains) / losses — — Unfunded (Liability) recognised in Balance Sheet (26,660,379) (21,587,753) C) Amount recognised in the Balance Sheet As at As at March 31, 2012 March 31, 2011 ` ` Present Value of Defined Benefit Obligation at the end of the year 26,660,379 21,587,753 Fair Value of Plan Assets as at the end of the year — — Liability recognised in the Balance Sheet 26,660,379 21,587,753 Recognised under: Long term provisions 26,127,465 18,745,633 Short term provisions 532,914 2,842,120 Total 26,660,379 21,587,753 D) Expenses recognised in the Profit and Loss Account 2011-2012 2010-2011 ` ` Current Service Cost 4,460,099 5,667,812 Past Service Cost — — Interest Cost 1,823,898 1,601,142 Expected Return on Plan Assets — — Curtailment Cost / (Credit) — — Settlement Cost / (Credit) — — Effects of transfer in / (transfer out) (772,840) (149,532) Net actuarial (gain) / loss recognised in the year 2,403,589 (461,374) Total Expenses recognised in the Profit and Loss Account 7,914,746 6,658,048 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 116

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS E) Experience Adjustment 2011-2012 2010-2011 ` ` Defined Benefit Obligation 26,660,379 21,587,753 Plan Assets — — Deficit / Surplus 26,660,379 21,587,753 Experience Adjustment on Plan Liabilities (Gain) / Loss 2,099,476 1,209,719 Experience Adjustment on Plan Assets (Gain) / Loss — —

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

F) Amounts recognised in current year and previous four years

March 31, 2012 March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008 Defined Benefit Obligation 26,660,379 21,587,753 20,806,953 21,349,067 17,403,415 Surplus / (Deficit) (26,660,379) (21,587,753) (20,806,953) (21,349,067) (17,403,415) Experience adjustment on plan liabilities (Gain) / Loss 2,099,476 1,209,719 (5,962,038) (1,524,777) 402,864

III) The liability for leave encashment and compensated absences as at the year end is ` 14,561,250 (Previous Year: ` 13,162,940). ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 117

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 26. Segment Information (i) Information about Primary Business Segments: (`) 2011-2012 2010-2011 Radio Events Unallocated Inter Segment Total Radio Events Outdoors* Unallocated Inter Segment Total Brodcasting Eliminations Brodcasting Eliminations Revenue External 3,014,149,312 96,377,757 — — 3,110,527,069 2,796,703,417 337,805,654 1,501,906,437 — — 4,636,415,508 Inter-Segment 177,055 10,265,230 — (10,442,285) — 3,020,721 72,358,370 2,109,976 — (77,489,067) — Total Revenue 3,014,326,367 106,642,987 — (10,442,285) 3,110,527,069 2,799,724,138 410,164,024 1,504,016,413 — (77,489,067) 4,636,415,508 Result Segment Result 682,332,477 (9,509,310) — — 672,823,167 573,792,850 5,460,639 15,283,518 — — 594,537,007 Unallocated Income, net of unallocated — — 89,049,514 — 89,049,514 — — — 14,831,168 — 14,831,168 expenditure Interest Expense (Net) — — 31,533,526 — 31,533,526 — — — (22,455,812) — (22,455,812) Operating Profit 682,332,477 (9,509,310) 120,583,040 — 793,406,207 573,792,850 5,460,639 15,283,518 (7,624,644) — 586,912,363 Exceptional Item — — — — — — — — (177,647,596) — (177,647,596) Profit after Exceptional Item 682,332,477 (9,509,310) 120,583,040 — 793,406,207 573,792,850 5,460,639 15,283,518 (185,272,240) — 409,264,767 Taxation — — (232,371,797) (232,371,797) — — — (232,017,388) — (232,017,388) Profit after taxation 682,332,477 (9,509,310) (111,788,757) — 561,034,410 573,792,850 5,460,639 15,283,518 (417,289,628) — 177,247,379 Other Information Segment Assets 3,364,798,634 75,252,219 1,905,318,603 (70,250,000) 5,275,119,456 3,752,435,575 214,777,387 — 943,654,081 (95,049,024) 4,815,818,019 Segment Liabilities 813,020,297 77,686,628 — — 890,706,925 846,436,440 170,802,481 — — (24,799,024) 992,439,897 Capital Expenditure 27,316,875 2,300 — — 27,319,175 18,953,565 162,714 263,944,856 — — 283,061,135 Depreciation / Amortisation 324,625,139 2,637,622 — (1,870,570) 325,392,191 335,960,456 2,993,608 85,474,310 — (1,870,570) 422,557,804 (*Refer Note 30) ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 118

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS (ii) Information about Secondary Business Segments:

(`) Particulars 2011-2012 2010-2011 India Others Total India Others Total Revenue from external customers 3,097,362,964 13,164,105 3,110,527,069 4,624,812,473 11,603,035 4,636,415,508

Carrying amount of Segment Assets 5,270,985,205 4,134,251 5,275,119,456 4,815,818,019 — 4,815,818,019 Capital Expenditure 27,319,175 — 27,319,175 283,061,135 — 283,061,135

(iii) Notes: (i) The Group is organised into three main business segments ‘Radio Broadcasting’ comprising of activities relating to airtime sales, ‘Events’, comprising of activities relating to management of events, creating and marketing media properties and ‘Outdoors’, comprising of activities relating to advertising on Airports, Bus Queue Shelters, Light Emitting Diode (LED), Metro Stations and Flyovers. The segments have been identified and reported taking into account the nature of activities and services, the differing risks and returns, the organisation structure and the internal financial reporting systems. (ii) Segment revenue in each of the above business segments represents revenue directly attributable to the respective segments. (iii) The Segment revenue in the geographical segments considered for disclosure are as follows: (a) Revenue within India includes income from customers located within India and earnings in India. (b) Revenue outside India represents income from customers located outside India. (iv) Segment revenue, results, assets and liabilities include the respective amounts identifiable to each of the above segments and amounts allocated on a reasonable basis. 27. Related Party Disclosures: i. Parties where control exists Bennett, Coleman & Company Limited (BCCL) - Ultimate Holding Company Times Infotainment Media Limited (TIML) - Holding Company

ii. Fellow Subsidiary Companies Mirchi Movies (India) Limited (MML) Times Innovative Media Limited (TIM) – from December 30, 2010 TIM Delhi Airport Advertising Private Limited (TIMDAA) - from December 30, 2010 Times Internet Limited (TIL) Times Global Broadcasting Company Limited (TGBCL) Times Business Solutions Limited (TBSL) Zoom Entertainment Network Limited (ZENL) Optimal Media Solutions Limited (OMSL) ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 119

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Times VPL Limited (TVL) formerly Vijayanand Printers Limited (VAPL) Vardhaman Publishers Limited (VPL) Artha Distribution Services Limited (ADSL)* Banhem Estates & IT Parks Limited (BEIPL)*

iii. Other Related Party where common control exists Aegon Religare Life Insurance Company Limited (ARLIC) Worldwide Media Private Limited (WWM) Bennett Property Holding Company Limited (BPHCL)

iv. Key Managerial Personnel Chairman Mr. Vineet Jain

Managing Directors Mr. Sunder Hemrajani – TIM # Executive Director & Chief Executive Officer Mr. Prashant Panday - Executive Director from July 1, 2010 Non – Executive Directors Mr. Ravindra Dhariwal Mr. A. P. Parigi Mr. N. Kumar Mr. Deepak M. Satwalekar up to March 30, 2011 Mr. Ravindra Kulkarni Mr. Sivakumar Sundaram Mr. Jason M. Brown *# Mr. Bala Naidu *# Mr. Richard Saldanha from November 23, 2010 Mr. Sidharath Kapur*# Mr. N. Subramanian*# Mr. Romy Juneja*# Mr. Nithyanand Appakudal*# Mr. Gautam Shahane*#

* There are no transactions during the year. # Upto December 29, 2010 (Refer Note 30) ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 120

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS v. Transaction with Related Parties

(`)

2011-2012 2010-2011

Holding Other Related Other Related Fellow Subsidiary Companies Holding Companies Fellow Subsidiary Companies Companies Party Party

TVL TVL BCCL TIML MML TIM TIMDAA TIL TGBCL TBSL ZENL OMSL VPL BEIPL ADSL WWM BPHCL ARLIC BCCL TIML MML TIM TIL TGBCL TBSL ZENL OMSL VPL BEIPL ADSL WWM ARLIC Particulars (VAPL) (VAPL)

Transactions with Related Parties :

Sales 97,045,375 — — — — 7,712,137 3,129,700 3,976,740 — — 1,410,698 — — — 453,000 — 25,680,064 218,255,023 — — 298,918 2,171,070 7,534,272 1,876,699 1,044,354 — 199,688 — — — 10,750,000 297,400

Sale of Fixed Asset 364,500 — — 27,720 — — — — — — — — — — — — — 84,816 — — — — — — — — — — — — — —

Receiving of services 59,129,688 — — 1,691,512 — 5,605,098 6,641,094 — 3,617,248 28,802,140 1,556,000 143,750 — — — 8,594,316 — 50,393,121 — — 1,232,585 22,666,007 3,298,001 — 154,861 36,288,093 — 143,750 5,681,899 — — —

Recovery of Expenses 69,559,430 — 253,194 7,475,608 226,471 — 384,207 — — — — — — — — — — 10,349,661 44,120 713,223 1,674,841 — 337,403 — — — — — — — — 9,066

Finance received — — — — — — — — — — — — — — — — — 700,000,000 100,000,000 — — — — — — — — — — — — —

Commission on Private Treaty — — — — — — — — — — — — — — — — — 1,442,930 — — — — — — — — — — — — — — Sales

Interest paid — — — — — — — — — — — — — — — — — 2,599,541 2,259,192 — — — — — — — — — — — — —

Bad Debts — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 10,200,000 —

Loan repaid — — — — — — — — — — — — — — — — — 34,310,693 35,000,000 — — — — — — — — — — — — —

Sale of Investment in Subsidiary — — — — — — — — — — — — — — — — — 450,000,000 — — — — — — — — — — — — — —

Year end Balances with Related Parties :

Trade Receivables 3,774,500 — — — — 4,907,684 2,445,376 488,438 — — — — — — 739,667 — 28,325,111 188,614,430 — — 323,113 341,707 4,465,384 317,713 — — — — — 8,922,580 28,476,184 —

Non-trade Receivables (net) — — 109,641 — 31,084 — 1,780,555 — — — — — — — — — — — — 751,831 1,722,598 — 2,015,669 — — — — — — — — —

Deposit — — — — — — — — — — — — — — — 10,000,000 — 10,000,000 — — — — — — — — — — — — — —

Payables (net) 7,400,234 — — — — 11,148,625 97,285 — 205,400 59,801,949 — — — — — 33,148,140 — 160,481,178 — — — 12,989,035 97,285 — 9,442,194 59,973,120 — — — — — — ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 121

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS vi. Details relating to Persons referred to in 27 (iv) above:

Name of the Person 2011-2012 2010-2011 ` ` Mr. Sunder Hemrajani @ — 14,021,186 Mr. Prashant Panday 20,653,895 18,246,662 Directors’ Sitting fees 1,260,000 1,350,000 Total 21,913,895 33,617,848 (@ Refer Note 30)

28. Disclosures for Operating Leases i) Disclosures in respect of cancellable agreements for cars, transmission towers, office and residential premises taken on lease: a) Lease payments recognised in the Profit and Loss Account ` 153,516,356 (Previous Year: ` 145,027,265). b) All the agreements provide for early termination by the Company by giving prior notice in writing.

ii) Disclosure in respect of non – cancellable agreements for LED taken on lease : Lease payments recognised in the Profit and Loss Account (License Fees) ` Nil (Previous Year: ` 1,265,863) (Refer Note 30).

29. Earnings Per Share (Basic and Diluted)

The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of shares outstanding during the year.

2011-2012 2010-2011 Profit after tax and before Minority Interest (`) 561,034,410 177,247,379 Minority Interest (`) — 5,502,733 Profit attributable to Equity Shareholders of the Company (`) (A) 561,034,410 171,744,646 Weighted Average Number of Shares (Nos.) (B) 47,670,415 47,670,415 Earnings per share – Basic and Diluted (`) (A/B) 11.77 3.60 Face Value per share (`) 10.00 10.00 ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 122

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 30. On December 29, 2010 the Company sold its entire stake in Times Innovative Media Limited (TIM) to Bennett, Coleman and Company Limited (BCCL). The sale resulted in a loss of ` 177,647,596 in the consolidated financial statements and has been reflected as exceptional item therein in the previous year. Pursuant to the sale of the subsidiary following assets, liabilities and reserves were transferred:

Particulars ` Total Assets 2,491,683,334 Total Liabilities (1,743,334,628) Net Assets (A) 748,348,706 Minority interest pertaining to TIM (B) 123,852,871 Total assets of TIM pertaining to ENIL transferred (A)-(B) 624,495,835 Transfer of Reserves and Surplus Securities Premium (1,603,079,400) Capital Reserve (2,086,092) Profit and Loss Account Debit Balance 1,605,165,492

31. The Company has a Media Collaboration Arrangement with Bennett, Coleman & Company Limited (BCCL), the ultimate holding company. This arrangement seeks to expand the advertisement market and inter-alia helps the Company gain access to certain clients who may not otherwise advertise in FM radio. The revenues generated from this arrangement were ` 149,249,927 (Previous Year: ` 229,935,903).

Hitherto, in view of the uncertainties subsequent to the sale as to the timing and the quantum of the ultimate collection, the Company had based on the Accounting Standards created a provision for doubtful debts in respect of the sales made pursuant to this arrangement and remaining uncollected. The provision amounted to ` 157,317,270 in the previous year. The cumulative provision for doubtful debts relating to this arrangement amounting to ` 117,906,930 was transferred pursuant to the sale of the subsidiary.

During the current year, the Company revised the terms of settlement for the deals under the Media Collaboration Arrangement. The Company also finalised the terms of settlement for all outstanding deals done up to March 31, 2011. The revised terms and the settlement of the prior deals resulted in an aggregate net write back of ` 115,247,775.

32. The Honourable Copyright Board (“CRB”) vide its final order dated August 25, 2010 ruled that radio broadcasters will be liable to set apart 2% of the net advertising earnings of each of their FM radio stations for royalty payment to all the music providers in proportion to usage. Following a writ petition by the Super Cassettes Industries Ltd (“SCIL”), the Honourable Delhi High Court granted stay on the implementation of the aforesaid CRB order against SCIL. Accordingly, w.e.f. August 25, 2010 the Company has accounted the music royalty for sound recordings provided by all music providers other than the SCIL on a revenue share basis. In the interim, the music royalty for sound recording provided by SCIL is accounted based on the needle hour rate indicated in the CRB order dated November 19, 2002. ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Financials 123

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 33. The financial statements for the year ended March 31, 2011 was prepared as per the then applicable pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per the Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year’s classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

34. Previous year’s figures of statement of profit and loss are not comparable due to sale of the subsidiary.

Signatures to Schedules “1” to “34” forming part of the financial statements.

For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Vineet Jain Ravindra Dhariwal Richard Saldanha N. Subramanian Partha Ghosh Chairman Director Director Group CFO Partner N. Kumar A. P. Parigi Prashant Panday Mehul Shah Membership No. F-55913 Director Director Executive Director & CEO VP - Compliance & Mumbai Ravindra Kulkarni Company Secretary Dated : May 25, 2012 Director ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Directors’Financials Report 124

Dear Members, NOTES FORMING PARTslowdown, OF sponsors THE CONSOLIDATED were reluctant to commit largeFINANCIAL amounts STATEMENTSSixth Annual General Meeting and to fix their remuneration. Your Directors present herewith the Fifth Annual Report together with on big ticket IPR events. Consequently, the Company could 8. Buy- Back of Shares the Audited Accounts of the Company for the financial year ended consummate only a limited number of events. The lower volume During the financial year under review, the Company has not March 31, 2012. of business and the thinner margins from the events executed offered to buy-back any of its outstanding shares. 1. Financial Highlights resulted in a loss after tax of ` 5,931,282 in the financial year under review. The net worth of the Company stood at 9. Conservation of Energy Amount in ` ` 63,317,522 at the end of the financial year under review. The operations of the Company are not energy intensive. Financial year Financial year Nevertheless, continuous efforts are being made by the 4. Dividend 2011– 2012 2010 – 2011 Company and its employees to reduce the wastage of scarce In view of the losses incurred by the Company, your Directors do Income 112,091,585 410,843,342 energy resources. not recommend any dividend for the financial year 2011 - 2012. Profit / (Loss) before Tax (5,931,282) 4,058,224 10. Foreign Exchange Earnings & Outgo: 5. Fixed Deposits Less: Provision for Taxation (net) — — Statement pursuant to Section 217(1)(e) of the Companies Act, The Company has not accepted any fixed deposits and, as Profit / (Loss) after Tax (5,931,282) 4,058,224 1956 read with the Companies (Disclosure of Particulars in the such, no amount of principal or interest was outstanding as on Report of Board of Directors) Rules, 1988: Equity 16,000,000 16,000,000 the date of the Balance Sheet. (i) Activities relating to export, initiatives to increase exports, 2. Operations 6. Directors developments of new export markets for products and Your Company is engaged in the business of events. Your In accordance with the provisions of the Companies Act, services and export plan: Company classifies events into two types – Managed Events 1956, read with the Articles of Association of the Company, The Company’s focus is on the opportunities in the in which it manages its clients’ events on their behalf and IPR Mr. Sivakumar Sundaram (Mr. S. Sivakumar) retires by rotation domestic market. The contribution from exports is, (Intellectual Property Rights) events in which it builds its own at the ensuing Annual General Meeting. Mr. Sivakumar, being therefore, likely to be limited. event brands. eligible, offers himself for re-appointment. (ii) Total foreign exchange earned and used: During the year, the Company decided not to carry out Managed 7. Auditors Events on account of poor margins and excessive competition (Amount in `) Messrs Price Waterhouse & Co., Chartered Accountants, the from the unorganized sector. Consequently, the results of this Statutory Auditors of the Company retire at the conclusion of the Financial year Financial year year are not comparable with those of the previous years. Fifth Annual General Meeting and have confirmed their eligibility 2011 – 2012 2010 – 2011 The total income recorded by the Company during FY12 was and willingness to accept office, if appointed. Foreign exchange earnings — — ` 11.2 crs. with an EBITDA loss of ` 0.3 crs. Your Company Members are requested to appoint Messrs Price Waterhouse Foreign exchange outgo 983,610 7,680,940 ensured that its receivables position was handled satisfactorily. & Co., Chartered Accountants, as Statutory Auditors of the 3. Financial Performance Company for the period commencing from the conclusion of 11. Technology Absorption, Adaptation and Innovation FY2011-12 was a challenging year for the Company. Due to the the Fifth Annual General Meeting until the conclusion of the The Statement pursuant to Section 217(1)(e) of the Companies ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Directors’Financials Report 125

Act, 1956 read with the Companies (DisclosureNOTES of FORMINGParticulars PARTfrom the OF Operating THE Management, CONSOLIDATED hereby confirm FINANCIALthat: STATEMENTS'Compliance Certificate' for the financial year ended March 31, in the Report of Board of Directors) Rules, 1988 is hereunder: 2012, copy of which has been attached with this Report. (i) in the preparation of the annual accounts, the a) Efforts made towards technology absorption, N.A. applicable accounting standards have been followed 16. Acknowledgements adaptation and innovation and that there are no material departures; Your Directors take this opportunity to convey their appreciation b) Benefits derived as a result of the above efforts N.A. (ii) they have, in the selection of the accounting policies, to all the members, advertising and media agencies, dealers, suppliers, bankers, regulatory and governmental authorities c) Information regarding Imported Technology N.A. consulted the Statutory Auditors and have applied the suggested accounting policies consistently and and all other business associates for their continued support 12. Research & Development made judgments and estimates that are reasonable and confidence in the Company. Your Directors are pleased to place on record their appreciation of the contribution made by a) Specific areas in which Research and N.A. and prudent, so as to give a true and fair view of employees at all levels. Development is carried out by the Company the state of affairs of the Company for the financial year ended on March 31, 2012 and of the loss of the b) Benefits derived as a result of the above N.A. Company for that period; research and development For and on behalf of the Board of Directors c) Future plan of action N.A. (iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in d) Expenditure on Research and Development N.A. Ravindra Kulkarni A. P. Parigi accordance with the provisions of the Companies Director Director 13. Particulars of Employees Act, 1956, for safeguarding the assets of the Particulars of the employees as required under the provisions Company and for preventing and detecting fraud and of Section 217(2A) of the Companies Act, 1956, read with other irregularities, to the best of their knowledge and the Companies (Particulars of Employees) Rules, 1975, as ability; amended: Not applicable, since none of the employees are (iv) they have prepared the annual accounts on a going Mumbai, May 25, 2012 drawing remuneration exceeding the limit as stipulated in the concern basis. aforesaid provisions/ rules. 15. Compliance Certificate Registered Office: 14. Directors’ Responsibility Statement In accordance with the provisions of Section 383A of the 4th Floor, ‘A’ Wing, Matulya Centre, Pursuant to the provisions of Section 217 (2AA) of the Companies Companies Act, 1956, M/s. Hemanshu Kapadia & Associates, Senapati Bapat Marg, Lower Parel (West), Act, 1956, the Directors, based on the representations received Company Secretaries in whole time practice, have issued Mumbai – 400 013. ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 ComplianFinancialsce Certificate 126 [Rule 3]

CIN No. of the Company: U92190MH2007PLC175549NOTES FORMING4. PARTThe Board OF of THEDirectors CONSOLIDATED duly met four times at the Board FINANCIAL Meetings STATEMENTSCentral Government. Authorized Share Capital: ` 20,000,000/- held on May 23, 2011; July 21, 2011; November 1, 2011 and 12. The Board of Directors of Company has not issued any duplicate January 30, 2012. In respect of the aforesaid Board Meetings, To , share certificates during the financial year under review. The Members, proper notices were given and the proceedings were properly 13. During the financial year under review: Alternate Brand Solutions (India) Limited, recorded and signed in the Minutes Book maintained for the 4th Floor, ‘A’ Wing, Matulya Centre, Senapati Bapat Marg, purpose. During the financial year under review, Resolution by (i) there was no allotment/ transfer/ transmission of securities Lower Parel (West), Mumbai – 400 013. Circulation was passed on March 7, 2012. during the financial year under review. 5. The Company was not required to close its Register of Members (ii) the Company has not deposited any amount in a separate We have examined the registers, records, books and papers of during the financial year. bank account, as no dividend (including interim dividend) Alternate Brand Solutions (India) Limited (“the Company”) as 6. The Annual General Meeting for the financial year ended on was declared during the financial year under review. required to be maintained under the Companies Act, 1956, (“the Act”) March 31, 2011 was held on August 30, 2011 after giving due (iii) the Company was not required to post warrants to any and the rules made thereunder and also the provisions contained in notice to the Members of the Company and the resolutions Member of the Company, as no dividend (including interim the Memorandum and Articles of Association of the Company for the passed thereat were duly recorded in the Minutes Book dividend) was declared during the financial year under financial year ended at March 31, 2012. In our opinion and to the maintained for the purpose. review. best of our information and according to the examinations carried out by us and explanations furnished to us by the Company, its officers 7. No Extra ordinary General Meeting was held during the financial (iv) there are no unpaid dividend, application money due for and agents, we certify that in respect of the aforesaid financial year: year under review. refund, matured deposits, matured debentures and the interest accrued thereon which have remained unclaimed 1. The Company has kept and maintained all registers as stated in 8. The Company has not advanced any loans to its Directors or or unpaid. Therefore, no amount is required to be Annexure ‘A’ to this certificate, as per the provisions of the Act persons or firms or companies referred in the Section 295 of the transferred to Investor Education and Protection Fund. and the rules made thereunder and all entries therein have been Act during the financial year under review. duly recorded. 9. The Company has not entered into any contracts within the (v) the Company has complied with the requirements of Section 217 of the Act, to the extent applicable. 2. The Company has duly filed the forms and returns as stated in meaning of Section 297 of the Act during the financial year Annexure ‘B’ to this certificate, with the Ministry of Corporate under review. 14. The Board of Directors of the Company is duly constituted. There Affairs, Registrar of Companies, Maharashtra, Mumbai, under 10. The Company has made necessary entries in the register was no appointment of Additional Director, Alternate Director the Act and the rules made thereunder. No forms and returns maintained under Section 301 of the Act during the financial and Director to fill the casual vacancy during the financial year were filed with Central Government, Regional Director and year under review. under review. Company Law Board, as it was not required. 11. There were no appointments or contracts in respect of holding 15. The Company has not appointed any Managing Director/ 3. The Company, being a Public Limited Company, is not required an office or place of profit within the meaning of Section 314 Whole-time Director/ Manager during the financial year under to comply with the restrictions specified under Section 3(1) (iii) of the Act and accordingly, the Company was not required to review. of the Act. obtain any approvals from the Board of Directors, Members and 16. The Company has not appointed any sole-selling agents ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 ComplianceFinancials Certificate 127

pursuant to Section 294AA of the Act duringNOTES the financial FORMING year PARTand Section OF 58AATHE of CONSOLIDATEDthe Act read with Companies FINANCIAL (Acceptance STATEMENTSprosecution initiated for the alleged offence under the Act and under review. of Deposit) Rules, 1975, during the financial year under review. consequently no penalties/ fines were imposed during the financial year under review. 17. The Company was not required to obtain any approval of the 24. The Company has not made any borrowings during the financial Central Government, Company Law Board, Regional Director, year under review. 32. The Company has not received any money as security from its Registrar of Companies, Maharashtra, Mumbai and / or such employees during the financial year under review. 25. During the financial year under review, the Company has other authorities as may be prescribed under the various not made any loans and investments or given guarantees or 33. The Company has not constituted a separate provident provisions of the Act during the financial year under review. provided securities to other bodies corporate and consequently fund trust for its employees as contemplated under Section 18. The Directors have disclosed their interest in other firms / no entries are made in the Register kept for the purpose. 418 of the Act. However, the Company has deposited both companies to the Board of Directors pursuant to the provisions employees’ and employer’s contribution to Provident Fund with 26. The Company has not altered the provisions of the Memorandum of the Act and the rules made thereunder. the prescribed authorities in compliance with the Employees’ with respect to situation of the Company’s registered office from Provident Funds and Miscellaneous Provisions Act, 1952. 19. The Company has not issued any shares, debentures or other one State to another during the financial year under review. securities during the financial year under review. 27. The Company has not altered the provisions of the Memorandum For Hemanshu Kapadia & Associates 20. The Company has not bought back any of its equity shares with respect to the objects of the Company during the financial Company Secretaries during the financial year under review. year under review. 21. The Company has not issued any redeemable preference 28. The Company has not altered the provisions of the Memorandum Hemanshu Kapadia shares and/ or debentures during the financial year under with respect to the name of the Company during the financial Proprietor review, consequently there were no redemption of preference year under review. C.P. No. 2285 shares/ debentures during the financial year under review. 29. The Company has not altered the provisions of the Memorandum Place: Mumbai 22. There were no transactions necessitating the Company to keep with respect to share capital of the Company during the financial Dated: May 25, 2012 in abeyance the rights to dividend, rights shares and bonus year under review. shares pending registration of transfer of shares during the Registered Office: financial year under review. 30. The Company has not altered its Articles of Association during 4th Floor, ‘A’ Wing, Matulya Centre, the financial year under review. 23. The Company has not invited/accepted any deposits including Senapati Bapat Marg, Lower Parel (West), any unsecured loans falling within the purview of Section 58A 31. The Company has not received any show cause notice or Mumbai – 400 013. ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 ComplianceFinancials Certificate 128

ANNEXURENOTES FORMING A PART OF THE CONSOLIDATED FINANCIAL STATEMENTSAnnexure B Registers as maintained by the Company under the applicable provisions of the Act Forms and Returns as filed by the Company with the Registrar of Companies (Maharashtra), Statutory Registers during the financial year ended at March 31, 2012: 1. Register of Members under Section 150 2. Register of Directors, Managing Director, Manager and Secretary under Section 303 1. Form No. 66 has been filed on September 9, 2011 under Section 383A of the Act in respect of the 3. Register of Directors’ Shareholding under Section 307 Compliance Certificate; 4. Register of Application & Allotment under Section 75 5. Books of Minutes of Board & General Meetings under Section 193 2. Form No. 20B has been filed on October 10, 2011 under Section 159 of the Act in respect of the 6. Books of Accounts under Section 209 annual return. 7. Registers and Returns under Section 163 8. Register of Particulars of Contracts in which Directors are interested under Section 301 3. Form Nos. 23ACXBRL and 23ACAXBRL have been filed on November 28, 2011 under Section 220 of Other Registers the Act in respect of the annual fillings. 1. Register of Directors’ Attendance 2. Register of Shareholders’ Attendance For Hemanshu Kapadia & Associates 3. Register of Fixed Assets Company Secretaries Note : The Company has maintained the following registers. However, it was informed that there were no entries / transactions to be recorded therein: Hemanshu Kapadia 1. Register of Investments under Section 49 Place: Mumbai Proprietor 2. Register of Investments or Loans Made, Guarantee Given or Security Provided under Section 372A Dated: May 25, 2012 C.P. No. 2285 3. Register of Debenture holders under Section 152 4. Register of Deposits under Rule 7 of the Companies (Acceptance of Deposits) Rules, 1975 5. Register of Securities Bought Back under Section 77A 6. Register of Charges under Section 143 7. Foreign Registers of Members or Debenture holders under Section 157 8. Register of Renewed and Duplicate Certificates under Rule 7 of the Companies (Issue of Share Certificates) Rules, 1960 9. Register of Destruction of Records/Documents 10. Register of Proxies 11. Register of Transfer For Hemanshu Kapadia & Associates Company Secretaries

Hemanshu Kapadia Place: Mumbai Proprietor Dated: May 25, 2012 C.P. No. 2285 ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Auditors’Financials Report 129

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Auditors’ Report to the Members of Alternate Brand Solutions (India) Limited

1. We have audited the attached Balance Sheet of Alternate Brand the Company as we considered appropriate and according to in terms of clause (g) of sub-section (1) of Section 274 of Solutions (India) Limited (the “Company”) as at March 31, 2012, the information and explanations given to us, we give in the the Act; and the related Statement of Profit and Loss and Cash Flow Annexure a statement on the matters specified in paragraphs (f) In our opinion and to the best of our information and Statement for the year ended on that date annexed thereto, 4 and 5 of the Order. according to the explanations given to us, the said which we have signed under reference to this report. These 4. Further to our comments in the Annexure referred to in financial statements together with the notes thereon financial statements are the responsibility of the Company’s paragraph 3 above, we report that: and attached thereto give, in the prescribed manner, the Management. Our responsibility is to express an opinion on information required by the Act, and give a true and fair these financial statements based on our audit. (a) We have obtained all the information and explanations view in conformity with the accounting principles generally which, to the best of our knowledge and belief, were 2. We conducted our audit in accordance with the auditing accepted in India: necessary for the purposes of our audit; standards generally accepted in India. Those Standards (i) in the case of the Balance Sheet, of the state of affairs require that we plan and perform the audit to obtain reasonable (b) In our opinion, proper books of account as required by law of the company as at March 31, 2012; assurance about whether the financial statements are free have been kept by the Company so far as appears from of material misstatement. An audit includes examining, on a our examination of those books; (ii) in the case of the Statement of Profit and Loss, of the test basis, evidence supporting the amounts and disclosures loss for the year ended on that date; and (c) The Balance Sheet, Statement of Profit and Loss and Cash in the financial statements. An audit also includes assessing Flow Statement dealt with by this report are in agreement the accounting principles used and significant estimates made (iii) in the case of the Cash Flow Statement, of the cash with the books of account; by Management, as well as evaluating the overall financial flows for the year ended on that date. statement presentation. We believe that our audit provides a (d) In our opinion, the Balance Sheet, Statement of Profit and For Price Waterhouse & Co. reasonable basis for our opinion. Loss and Cash Flow Statement dealt with by this report Registration Number: 007567S comply with the accounting standards referred to in sub- 3. As required by the Companies (Auditor’s Report) Order, Chartered Accountants section (3C) of Section 211 of the Act; 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (together the “Order”) issued by (e) On the basis of written representations received from the the Central Government of India in terms of sub-section (4A) directors, as on March 31, 2012 and taken on record by Partha Ghosh of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) the Board of Directors, none of the directors is disqualified Mumbai Partner and on the basis of such checks of the books and records of as on March 31, 2012 from being appointed as a director May 25, 2012 Membership Number F-55913 ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Auditors’Financials Report 130

Annexure to Auditors’ ReportNOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Alternate Brand Solutions (India) Limited on the financial statements as of and for the year ended March 31, 2012

1. (a) The Company is maintaining proper records showing full the information and explanations given to us, we have neither our opinion, the Company is regular in depositing the particulars, including quantitative details and situation, of come across, nor have been informed of, any continuing failure undisputed statutory dues, including provident fund, fixed assets. to correct major weaknesses in the aforesaid internal control income tax, wealth tax, service tax , custom duty and other system. material statutory dues as applicable with the appropriate (b) The fixed assets are physically verified by the Management authorities. As informed to us, investor education and according to a phased programme designed to cover all 4. (a) In our opinion, and according to the information and protection fund, employees’ state insurance, sales-tax the items over a period of three years which, in our opinion, explanations given to us, the particulars of contracts or is reasonable having regard to the size of the Company arrangements referred to in Section 301 of the Act have and excise duty are not applicable to the Company for the and the nature of its assets. Pursuant to the programme, been entered in the register required to be maintained current year. a portion of the fixed assets has been physically verified under that section. (b) According to the information and explanations given to us by the Management during the year and no material (b) In our opinion, and according to the information and and the records of the Company examined by us, there discrepancies between the book records and the physical explanations given to us, the transactions made in are no dues of income-tax, sales-tax, wealth-tax, service- inventory have been noticed. pursuance of such contracts or arrangements and tax, customs duty, and excise duty which have not been (c) In our opinion, and according to the information and exceeding the value of Rupees Five Lakhs in respect of deposited on account of any dispute. explanations given to us, a substantial part of fixed assets any party during the year have been made at prices which 9. As the Company is registered for a period less than five years, has not been disposed of by the Company during the year. are reasonable having regard to the prevailing market clause (x) of paragraph 4 of the Order is not applicable. 2. (a) The Company has not granted any loans, secured or prices at the relevant time. unsecured, to companies, firms or other parties covered in 10. According to the records of the Company examined by us and 5. The Company has not accepted any deposits from the public the register maintained under Section 301 of the Act. the information and explanation given to us, the Company has within the meaning of Sections 58A and 58AA of the Act and the not defaulted in repayment of dues to any financial institution or (b) The Company has not taken any loans, secured or rules framed there under. bank or debenture holders as at the balance sheet date. unsecured, from companies, firms or other parties covered 6. In our opinion, the Company has an internal audit system in the register maintained under Section 301 of the Act. 11. The Company has not granted any loans and advances on the commensurate with its size and the nature of its business. basis of security by way of pledge of shares, debentures and 3. In our opinion, and according to the information and 7. The Central Government of India has not prescribed the other securities. explanations given to us, there is an adequate internal control maintenance of cost records under clause (d) of sub-section (1) system commensurate with the size of the Company and the 12. The provisions of any special statute applicable to chit fund/ of Section 209 of the Act for any of the products of the Company. nature of its business for the purchase of fixed assets and for nidhi/ mutual benefit fund/ societies are not applicable to the the sale of services. Further, on the basis of our examination 8. (a) According to the information and explanations given to Company. of the books and records of the Company, and according to us and the records of the Company examined by us, in 13. In our opinion, the Company is not a dealer or trader in shares, ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Auditors’Financials Report 131

securities, debentures and other investments.NOTES FORMING PARTunder SectionOF THE 301 of CONSOLIDATED the Act during the year. FINANCIAL 21.STATEMENTS The other clause (ii) of paragraph 4 of the Companies (Auditor’s Report) Order 2003, as amended by the Companies (Auditor’s 14. In our opinion, and according to the information and 18. The Company has not issued any debentures during the year; Report) (Amendment) Order,2004, is not applicable in the case explanations given to us, the Company has not given any and does not have any debentures outstanding as at the year of the Company for the year, since in our opinion there is no guarantee for loans taken by others from banks or financial end. matter which arises to be reported in the aforesaid Order. institutions during the year. 19. The Company has not raised any money by public issues 15. The Company has not obtained any term loans. during the year. For Price Waterhouse & Co. 16. On the basis of an overall examination of the balance sheet of 20. During the course of our examination of the books and records Registration Number: 007567S the Company, in our opinion, and according to the information of the Company, carried out in accordance with the generally Chartered Accountants and explanations given to us, there are no funds raised accepted auditing practices in India, and according to the on a short-term basis which have been used for long-term information and explanations given to us, we have neither come investment. across any instance of fraud on or by the Company, noticed or Partha Ghosh 17. The Company has not made any preferential allotment of shares reported during the year, nor have we been informed of any Mumbai Partner to parties and companies covered in the register maintained such case by the Management. May 25, 2012 Membership Number F-55913 ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 Balance Sheet 132 asFinancials at March 31, 2012

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSNotes Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` EQUITY AND LIABILITIES Shareholders' funds Share capital 2 16,000,000 16,000,000 Reserves and surplus 3 47,317,522 53,248,804 Non - current liabilities Long-term provisions 4 419,398 1,108,480 Current liabilities Trade payables 5 11,408,315 50,676,879 Other current liabilities 6 65,642,508 118,230,350 Short-term provisions 7 216,407 786,772 TOTAL 141,004,150 240,051,285 ASSETS Non-current assets Fixed assets 8 Intangible assets 10,751,931 12,622,501 Tangible assets 1,541,537 2,804,325 Long-term loans and advances 9 7,142,104 4,371,251 Current assets Current investments 10 55,000,000 12,651,397 Trade receivables 11 7,971,098 105,041,226 Cash and bank balances 12 4,318,970 461,535 Short-term loans and advances 13 54,278,510 102,099,050 TOTAL 141,004,150 240,051,285 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1-26 This is the Balance Sheet referred to in our report of even date. For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Ravindra Kulkarni A. P. Parigi S. Sivakumar Partha Ghosh Director Director Director Partner Membership No. F-55913 Prashant Panday N. Subramanian Mumbai CEO Group CFO Dated : May 25, 2012 ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 STATEMENT OF PROFIT AND LOSS 133 FOR THE FinancialsYEAR ENDED MARCH 31, 2012

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSNotes 2011-2012 2010-2011 ` ` Revenue from operations 14 106,642,987 409,920,410 Other income 15 5,448,598 922,932 Total Revenue 112,091,585 410,843,342 Expenses: Production expenses 83,414,234 277,594,203 Employee benefits expense 16 20,505,589 52,441,000 Depreciation and amortisation expense 8 2,637,622 2,993,609 Other expenses 17 11,465,422 73,545,143 Finance costs 18 — 211,163 Total expenses 118,022,867 406,785,118 (Loss) / Profit before Taxation (5,931,282) 4,058,224 Tax expense ((Refer Note 1(ix)) Current Tax — 2,400,000 Minimum alternate tax credit entitlement — (2,400,000) (Loss) / Profit for the year (5,931,282) 4,058,224 Earnings per equity share [nominal value per share: ` 10 (2010-11: ` 10) (Refer Note 1(viii)) 24 –– Basic (3.71) 2.54 –– Diluted (3.71) 2.54 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1-26 This is the Statement of Profit and Loss referred to in our report of even date.

For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Ravindra Kulkarni A. P. Parigi S. Sivakumar Partha Ghosh Director Director Director Partner Membership No. F-55913 Prashant Panday N. Subramanian Mumbai CEO Group CFO Dated : May 25, 2012 ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 CASH FFinancialsLOW STATEMENT 134 FOR THE YEAR ENDED MARCH 31, 2012

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS2011-2012 2010-2011 ` ` A) CASH FLOW FROM OPERATING ACTIVITIES : (Loss) / Profit Before Taxation (5,931,282) 4,058,224 Adjustments for : Depreciation and Amortisation 2,637,622 2,993,609 Interest Income (2,585,464) (335,445) Interest Expense — 211,163 Profit on Sale of Short Term Investments (Net) (2,863,134) (343,873) Loss on sale of Tangible Assets 34,100 — Provision for Doubtful Debts (Net) 1,186,023 7,453,445 Provision no longer required written back (3,495,410) — Bad Debts written off / (realised) (Net) (10,394,000) 10,841,143 Provision for Doubtful deposits 446,513 426,497 Provision for Retirement Benefits (1,291,103) (325,770) Operating (Loss) / Profit Before Working Capital Changes (22,256,135) 24,978,993 Adjustments for changes in working capital : Decrease in Trade Receivables 106,278,105 14,223,102 Decrease in Long term loans and advances — 255,487 Decrease / (Increase) in Short term loans and advances 30,946,595 (15,772,482) Decrease in Trade payables (35,773,154) (36,151,070) Increase / (Decrease) in Short-term provisions 31,656 (47,401) (Decrease) / Increase in Other current liabilities (52,587,841) 31,381,624 Cash generated from operations 26,639,226 18,868,253 Taxes paid (net) 13,656,579 (14,598,233) Net Cash generated from Operating Activities (A) 40,295,805 4,270,020

B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Tangible Assets (2,300) (162,714) Proceeds from Sale of Tangible Assets 463,936 42,608 Purchase of Short Term Investments (221,358,266) (106,500,000) Interest received 2,585,464 335,445 Proceeds from Sale of Current Investments 181,872,796 100,692,475 Net Cash (used in) Investing Activities (B) (36,438,370) (5,592,186) ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 CASH FFinancialsLOW STATEMENT 135 FOR THE YEAR ENDED MARCH 31, 2012

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS 2011-2012 2010-2011 ` ` C) CASH FLOW FROM FINANCING ACTIVITIES : Loan taken from Entertainment Network (India) Limited — 16,500,000 Loan repaid to Entertainment Network (India) Limited — (16,500,000) Interest paid — (211,163) Net Cash (used in) Financing Activities (C) — (211,163) Net Increase / (Decrease) in Cash and Cash Equivalents (A)+(B)+(C) 3,857,435 (1,533,329) Cash and Cash Equivalents as at the beginning of the year 461,535 1,994,864 Cash and Cash Equivalents as at the end of the year 4,318,970 461,535 3,857,435 (1,533,329) NOTES ON CASH FLOW STATEMENT : 1. Cash and cash equivalents at the end of the year as per Balance Sheet. 4,318,970 461,535 (Refer Note 12 in the financial statements) 4,318,970 461,535 2. The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. 3. Previous Year’s figures have been regrouped and rearranged wherever necessary. 4. Cash flows in brackets indicate cash outgo.

This is the Cash Flow Statement referred to in our report of even date.

For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Ravindra Kulkarni A. P. Parigi S. Sivakumar Partha Ghosh Director Director Director Partner Membership No. F-55913 Prashant Panday N. Subramanian Mumbai CEO Group CFO Dated : May 25, 2012 ENTERTAINMENTALTERNATE BRAND NETWORK SOLUTIONS (INDIA) (INDIA) LIMITED LIMITED (CONSOLIDATED) ANNUAL REPORT 2011-12 FINFinancialsANCIALS 136

NOTES FORMINGNOTES FORMING PART OF PART THE CONSOLIDATEDOF THE FINANCIAL FINANCIAL STATEMENTS STATEMENTS Nature of Operations iii. Revenue Recognition Cost of assets not ready for their intended use before the balance sheet date are disclosed as Capital Work-in- The Company is engaged in providing Event Management services. a. Revenue from short period events is recognised Progress. The Company also creates and markets media properties. according to the completed performance method. Revenue from services provided over a longer term a. Tangible assets 1. Significant Accounting Policies is recognised when the result of the transactions can Tangible fixed assets are stated at cost less i. Basis of Accounting be determined with reliability and on the percentage accumulated depreciation and impairment losses, if The financial statements comply in all material aspects completed basis. Down payments invoiced before any. these dates are recorded under prepaid income / with all the applicable accounting principles in India, the Depreciation on tangible fixed assets is provided on customer advances. applicable accounting standards notified under Section written down value method at the rates and in the 211(3C) of the Companies Act, 1956 (“The Act”) and the b. Dividend income on mutual fund units is accounted for manner specified in Schedule XIV to the Act. The relevant provisions of the Act. The financial statements when the right to receive the payment is established cost of leasehold improvements are amortised over are prepared under the historical cost convention on by the balance sheet date. the primary period of lease of the property. Tangible an accrual basis. The accounting policies have been assets individually costing less than ` 5,000 are c. Interest income is recognized on time proportionate consistently applied by the Company and are consistent depreciated fully in the year of purchase. with those followed in the previous year. basis taking into account the amount outstanding and the rate applicable. b. Intangible assets (other than Software) All assets and liabilities have been classified as current Goodwill is amortised over a period of ten years. or non-current as per the criteria set out in the Revised d. Profit on sale of units of mutual funds is recognized Schedule VI to the Act. at the time of redemption and is determined as the c. Software difference between the redemption price and the Software obtained initially together with hardware ii. Use of Estimates carrying value. is capitalised along with the cost of hardware and The preparation of financial statements in accordance depreciated in the same manner as the hardware. iv. Fixed assets and Depreciation with the generally accepted accounting principles requires All subsequent purchases of software licenses are Cost of fixed assets comprises purchase price, duties, the Management to make estimates and assumptions treated as revenue expenditure and charged in the levies and any directly attributable cost of bringing the that affect the reported amounts of assets and liabilities year of purchase. Expenditure on other software asset to its working condition and location for the intended and disclosure of contingent liabilities as at the date of where the economic benefit is expected to be more use. the financial statements and the reported amounts of than a year is amortised. revenues and expenses during the reporting period. Actual Borrowing cost directly attributable to fixed assets which v. Foreign Currency Transactions results could differ from these estimates. Any revision to take substantial period of time to get ready for its intended such accounting estimates is recognised prospectively in use are capitalised to the extent they relate to the period till Foreign currency transactions are recorded at the the accounting period in which such revision takes place. such assets are ready to be put to use. exchange rates prevailing on the date of the transaction. ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 137

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Gains and losses arising out of subsequent fluctuations are post employment benefits such as Provident Fund viii. Earnings per share accounted for on actual payment or realisation. Monetary and Employee’s Pension Scheme, 1995. Under the Basic earnings per share is calculated by dividing the items denominated in foreign currency as at the balance Provident Fund Plan, the Company contributes to a net profit or loss for the period attributable to equity sheet date are converted at the exchange rates prevailing Government administered provident fund on behalf of shareholders by the weighted average number of on that day. Exchange differences are recognised in the its employees and has no further obligation beyond equity shares outstanding during the period. Earnings Profit and Loss Account. making its contribution. considered in ascertaining the Company’s earnings vi. Investments The Company contributes to a State Plan namely per share is the net profit for the period after deducting Investments that are intended to be held for not more Employee’s Pension Scheme, 1995 and has no preference dividends and any attributable tax thereto for than a year from the date of investments are classified as further obligation beyond making its contribution. the period. The weighted average number of equity shares outstanding during the period and for all periods presented Current investments. All other investments are termed as The Company’s contributions to the above funds are is adjusted for events, such as bonus shares, other Long term investments. charged to revenue every year. than the conversion of potential equity shares, that have Current investments are carried at cost or fair value, Defined Benefit Plans: changed the number of equity shares outstanding, without whichever is lower. Long term investments are stated at The Company has a Defined Benefit Plan namely a corresponding change in resources. For the purpose of cost. However, provision for diminution in value is made Gratuity and Leave Encashment for all its employees. calculating diluted earnings per share, the net profit or loss to recognise a decline other than temporary in the value of The liabilities in respect of Leave Encashment which for the period attributable to equity shareholders and the the long term investments. is expected to be encashed / utilised after twelve weighted average number of shares outstanding during vii. Retirement Benefits months from the balance sheet date is considered to the period is adjusted for the effects of all dilutive potential be long term in nature. equity shares. a. Short Term Employee Benefits : Liability for Defined Benefit Plan is provided on the ix. Income Taxes The employees of the Company are entitled to leave basis of valuations, as at the balance sheet date, encashment as per the leave policy of the Company. Tax expense comprises of Current and Deferred tax. carried out by an independent actuary. The actuarial The liability in respect of leave encashment which Current income tax is measured based on the amount valuation method used by independent actuary for is expected to be encashed / utilised within twelve expected to be paid to the tax authorities in accordance measuring the liability is the Projected Unit Credit months after the balance sheet date is considered to with the Income Tax Act, 1961. Method. Actuarial losses/gains are recognised in the be of short term nature. Minimum Alternate Tax (MAT) paid in accordance with tax statement of profit and loss in the year in which they laws which give rise to future economic benefits in the form b. Long Term Employee Benefits : arise. of adjustment to future income tax liability is considered as Defined Contribution Plans: c. Termination benefits are recognised as an expense an asset if there is convincing evidence that the Company The Company has Defined Contribution Plans for as and when incurred. will pay normal tax in future. Accordingly, MAT is recognised ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 138

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

as an asset in the balance sheet when it is probable that cash generating unit to which the asset belongs is less are not discounted to its present date value and are the future economic benefit associated with it will flow to than its carrying amount, the carrying amount is reduced determined based on best estimates of the amount the Company and the asset can be measured reliably. to its recoverable amount. The reduction is treated as an required to settle the obligation at the balance sheet impairment loss and is recognised in the Profit and Loss Deferred Tax resulting from timing differences between date. These are reviewed at each balance sheet date and Account. If at the balance sheet date there is an indication book and tax profits is accounted for under the liability adjusted to reflect the current best estimates. method, at the current rate of tax, to the extent that the that a previously assessed impairment loss no longer timing differences are expected to crystallize. exists, the recoverable amount is reassessed and the A disclosure for a contingent liability is made when there asset is reflected at the recoverable amount. x. Impairment of Assets is a possible obligation or a present obligation that may, xi. Provisions and Contingent Liabilities but probably will not, require an outflow of resources The Company assesses at each balance sheet date embodying economic benefit. Where there is a possible whether there is any indication that asset may be impaired. The Company recognises a provision when there is a If any such indication exists, the Company estimates the present obligation as a result of a past event that probably obligation or a present obligation that the likelihood of recoverable amount of the asset. If such recoverable requires an outflow of resources and a reliable estimate outflow of resources is remote, no provision or disclosure amount of the asset or the recoverable amount of the can be made of the amount of the obligation. Provisions is made. ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 139

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 2 : SHARE CAPITAL Authorised Capital 2,000,000 (Previous Year : 2,000,000) Equity Shares of ` 10 each 20,000,000 20,000,000 Issued and Subscribed 1,600,000 (Previous Year : 1,600,000) Equity Shares of ` 10 each fully paid-up 16,000,000 16,000,000 16,000,000 16,000,000 Notes: (a) Terms attached to equity shares The Company has only one class of equity shares. Each shareholder is eligible for one vote per share held. The par value per share is ` 10. (b) Shares held by Holding company Shares (nos) Shares (nos) Equity Shares of ` 10 each held by Entertainment Network (India) Limited, the Holding Company and its nominees. 1,600,000 1,600,000 (c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company Shares (nos) Shares (nos) (in %) (in %) Entertainment Network (India) Limited, the Holding Company and its nominees. 1,600,000 1,600,000 (100%) (100%)

NOTE 3 : RESERVES AND SURPLUS Securities Premium Account 54,104,010 54,104,010 Surplus in Statement of Profit and Loss Balance as at the beginning of the year (855,206) (4,913,430) Add: (Loss)/ Profit for the year (5,931,282) 4,058,224 Balance as at end of the year (6,786,488) (855,206) 47,317,522 53,248,804 ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 140

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 4 : LONG-TERM PROVISIONS Provision for employee benefits (Refer Notes 1(vii) and 21) Provision for gratuity 105,190 631,724 Provision for compensated absences 314,208 476,756 419,398 1,108,480

NOTE 5 : TRADE PAYABLES Sundry Creditors (Refer Note 19) 11,408,315 50,676,879 11,408,315 50,676,879

NOTE 6 : OTHER CURRENT LIABILITIES Advance from Customers 870,695 12,040,738 Other Payables Statutory dues 434,961 60,329 Related parties (Refer Note below) 64,285,927 106,129,283 Employee benefits payable 50,925 — 65,642,508 118,230,350 Note: Payable to Entertainment Network (India) Limited, the Holding Company — 24,799,024

NOTE 7 : SHORT TERM PROVISIONS Provision for employee benefits Provision for gratuity (Refer Notes 1(vii) and 21)) 379 368,984 Provision for compensated absences (Refer Notes 1(vii) and 21)) 74,004 307,420 Provision for Bonus 142,024 110,368 216,407 786,772 ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 141

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

NOTE 8 : FIXED ASSETS (Refer Notes 1 (iv) and (x))

(`)

PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

As at Additions Deletions As at As at For the year On Deletions As at As at As at April 1, 2011 March 31, 2012 April 1, 2011 March 31, 2012 March 31, 2012 March 31, 2011

Intangible Assets

Goodwill 18,704,225 — — 18,704,225 6,081,724 1,870,570 — 7,952,294 10,751,931 12,622,501

Total 18,704,225 — — 18,704,225 6,081,724 1,870,570 — 7,952,294 10,751,931 12,622,501

Previous year 18,704,225 — — 18,704,225 4,211,154 1,870,570 — 6,081,724

Tangible Assets

Office Equipment 1,784,396 — 655,146 1,129,250 695,776 146,666 303,103 539,339 589,911 1,088,620

Computers 5,315,584 2,300 1,056,825 4,261,059 3,858,359 573,634 910,832 3,521,161 739,898 1,457,225

Furniture and Fixtures 626,835 — — 626,835 368,355 46,752 — 415,107 211,728 258,480

Total 7,726,815 2,300 1,711,971 6,017,144 4,922,490 767,052 1,213,935 4,475,607 1,541,537 2,804,325

Previous Year 7,663,873 162,714 99,772 7,726,815 3,856,615 1,123,039 57,164 4,922,490 ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 142

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at March 31, 2012 Figures as at March 31, 2011 ` ` ` ` NOTE 9 : LONG TERM LOANS AND ADVANCES (Unsecured Considered good unless otherwise stated) Deposits: Considered Good 57,600 504,113 Considered Doubtful 873,010 426,497 930,610 930,610 Less: Provision for Doubtful Deposits (873,010) (426,497) 57,600 504,113 Other long term loans and advances Minimum Alternate Tax Credit Entitlement (long term) 2,400,000 2,400,000 Advance Tax and Tax Deducted at Source [Net of Provision of ` 6,775,000 (Previous Year : ` 1,100,000)] 4,684,504 1,467,138 7,142,104 4,371,251

Nos. ` Nos. ` NOTE 10 : INVESTMENTS Current Investments (at the lower of cost or market value) Non-Trade, Current (Unquoted - Mutual Funds) (Refer Note 1(vi)) Reliance Mutual Fund – Cash Plan – Growth Plan, of ` 10 each — — 799,308 12,651,397 Reliance Liquid Fund – Treasury Plan – Institutional Option - Growth Option - Growth Plan, of ` 10 each 2,107,441 55,000,000 — — 55,000,000 12,651,397 Note : The market price has been determined based on the NAV declared on the balance sheet date by the mutual fund houses. Aggregate market value of Unquoted mutual funds units held by the Company is ` 55,048,471 (Previous Year : ` 12,704,844) ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 143

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Figures as at Figures as at March 31, 2012 March 31, 2011 ` ` NOTE 11 : TRADE RECEIVABLES Unsecured, considered good Outstanding for a period exceeding 6 months from the date they are due for payment 696,639 39,406,077 Others 7,274,459 65,635,149 7,971,078 105,041,226 Unsecured, considered doubtful Outstanding for a period exceeding 6 months from the date they are due for payment 8,639,468 7,453,445 Others — — 8,639,468 7,453,445 16,610,546 112,494,671 Less: Provision for Doubtful Debts (8,639,468) (7,453,445) 7,971,078 105,041,226 NOTE 12 : CASH AND BANK BALANCES Cash and cash equivalents: Cheques on hand 1,121,539 — Balance with banks: Current Accounts 3,197,431 461,535 4,318,970 461,535 NOTE 13 : SHORT-TERM LOANS AND ADVANCES (Unsecured Considered good unless otherwise stated) Loans and advances to related parties: Due from other related parties (Refer Note below) — 962,913 Prepaid expenses 67,689 20,464,336 Advances recoverable in cash or in kind or for value to be received: Considered Good 15,451,080 24,883,115 Deposits: Considered Good — 155,000 Advance Tax and Tax Deducted at Source [Net of Provision of ` 3,100,000 (Previous Year : ` 8,775,000)] 38,759,741 55,633,686 54,278,510 102,099,050 Note: Due from Times Innovative Media Limited, fellow Subsidiary Company — 962,913 ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 144

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` NOTE 14 : REVENUE FROM OPERATIONS Sale of Services (Refer Note 1(iii) (a)) 101,525,802 408,920,410 Other operating income –– Provision no longer required written back 3,495,410 — –– Others 1,621,775 1,000,000 5,117,185 1,000,000 106,642,987 409,920,410

NOTE 15 : OTHER INCOME Interest Income (Refer Note 1(iii) (c)) –– On Loan — 29,779 –– On Income-Tax Refund 2,585,464 305,666 Profit on Sale of Short term Investments (Net) (Refer Note 1(iii) (d)) 2,863,134 343,873 Miscellaneous Income — 243,614 5,448,598 922,932

NOTE 16 : EMPLOYEE BENEFIT EXPENSE Salaries, Wages and Bonus 18,744,436 47,071,045 Contributions to Provident and Other Funds (Refer Notes 1(vii) and 21) 814,835 1,653,933 Gratuity (Refer Notes 1(vii) and 21) (526,155) 613,874 Staff welfare expenses 1,472,473 3,102,148 20,505,589 52,441,000 ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 145

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

2011-2012 2010-2011 ` ` NOTE 17 : OTHER EXPENSES Rent 3,374,133 6,997,770 Rates and Taxes 44,479 40,582 Power and Fuel 712,371 1,627,407 Insurance 24,806 26,797 Repairs and Maintenance on: –– Buildings — 55,128 –– Plant and Machinery 168,822 374,459 –– Others 1,578,188 2,131,703 Travelling and Conveyance 9,176,447 33,739,175 Legal and Professional Fees 2,489,757 2,149,994 Payment to Auditors As Auditors: –– Audit Fees 500,000 500,000 –– Reimbursement of expenses — 7,966 Software Expenses (Refer Note 1(iv)(c)) — 1,584,155 Provision for Doubtful Debts 5,047,442 7,453,444 Provision for Doubtful Debts withdrawn (3,861,419) — Bad Debts written off / (realised) (Net) (10,394,000) 10,841,144 Provision for Doubtful deposits 446,513 426,497 Miscellaneous Expenses 2,157,883 5,588,922 11,465,422 73,545,143

NOTE 18 : FINANCE COST Interest Expense On Short term Loan — 211,163 — 211,163 ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 146

NOTES FORMING PART OF THE FINANCIAL STATEMENTS 19. Sundry Creditors i) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues. This information, as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

ii) There are no amounts due and outstanding to be credited to Investor Education and Protection Fund. 20. Expenditure in Foreign Currency

2011-2012 2010-2011 ` `

Production Expenses 983,610 7,680,940 Total 983,610 7,689,940

21. The Company has classified the various employee benefits provided to employees as under:-

I) Defined Contribution Plans a) Provident Fund b) State Defined Contribution Plans - Employers’ Contribution to Employee’s Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profit and Loss Account -

2011-2012 2010-2011 ` ` - Employers’ Contribution to Provident Fund * 600,238 1,209,537 - Employers’ Contribution to Employee’s Pension Scheme, 1995 * 214,597 444,396 * Included in Contributions to Provident and Other Funds (Refer Note 16)

II) Defined Benefit Plans In accordance with Accounting Standard 15 (Revised 2005), actuarial valuation was done in respect of the aforesaid Defined Benefit Plan of gratuity based on the following assumptions:-

As at March 31, 2012 As at March 31, 2011 Discount Rate (per annum) 8.65% 8.50% Rate of increase in Compensation levels 6.50% 6.50% Attrition Rate 2.00% - 10.00% 1.00% ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 147

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

A) Changes in the Present Value of Obligation

As at March 31, 2012 As at March 31, 2011 ` ` Present Value of Obligation at the beginning of the year 1,000,708 1,095,080 Interest Cost 74,000 87,607 Past Service Cost — — Current Service Cost 54,369 414,568 Curtailment Cost / (Credit) — — Settlement Cost / (Credit) — — Benefits Paid (368,984) (708,246) Actuarial (gain) / loss on obligations (342,584) 143,530 Effect of transfer in / (transfer out) (311,940) (31,831) Present Value of Obligation as at the year end 105,569 1,000,708

B) Reconciliation of Present Value of Defined Benefit Obligation and the Fair value of Assets

As at March 31, 2012 As at March 31, 2011 ` ` Present Value of funded Obligation as at the year end — — Fair Value of Plan Assets as at the year end — — Funded Status — — Present Value of unfunded Obligation as at the Year end 105,569 1,000,708 Unrecognised Actuarial (gains) / losses — — Unfunded (Liability) recognised in Balance Sheet (105,569) (1,000,708) ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 148

NOTES FORMING PART OF THE FINANCIAL STATEMENTS C) Amount recognised in the Balance Sheet

As at March 31, 2012 As at March 31, 2011 ` ` Present Value of Defined Benefit Obligation at the end of the year 105,569 1,000,708 Fair Value of Plan Assets as at the end of the year — — Liability recognised in the Balance Sheet 105,569 1,000,708 Recognised under: Long term Provisions 105,190 631,724 Short term Provisions 379 368,984 D) Expenses recognised in the Profit and Loss Account 2011-2012 2010-2011 ` ` Current Service Cost 54,369 414,568 Past Service Cost — — Interest Cost 74,000 87,607 Expected Return on Plan Assets — — Curtailment Cost / (Credit) — — Settlement Cost / (Credit) — — Effects of transfer in / (transfer out) (311,940) (31,831) Net actuarial (gain) / loss recognised in the year (342,584) 143,530 Total Expenses recognised in the Profit and Loss Account (526,155) 613,874

E) Experience Adjustment 2011-2012 2010-2011 ` ` Defined Benefit Obligation 105,569 1,000,708 Plan Assets — — Deficit / (Surplus) 105,569 1,000,708 Experience Adjustment on Plan Liabilities (Gain) / Loss (646,697) 618,396 The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 149

NOTES FORMING PART OF THE FINANCIAL STATEMENTS F) Amounts recognised in current year and previous four years

(`) March 31, 2012 March 31, 2011 March 31, 2010 March 31, 2009 March 31, 2008 Gratuity Defined Benefit Obligation 105,569 1,000,708 1,095,080 1,988,758 1,453,830 Surplus / (Deficit) (105,569) (1,000,708) (1,095,080) (1,988,758) (1,453,830) Experience adjustment on Plan Liabilities (Gain) / Loss (646,697) 618,396 (1,175,688) (45,285) 193,151

III) The liability for leave encashment and compensated absenses as at the year end is ` 388,212 (Previous Year: ` 784,176).

22. Segment Information In accordance with Accounting Standard - 17, “Segment Reporting” issued by the Institute of Chartered Accountants of India, the Company’s business segment is event management business and it has no other primary reportable segments. Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liability, total cost incurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in the Financial Statements as of and for the year ended March 31, 2012. The Company caters to the needs of the domestic market and hence there are no reportable geographical segments.

23. Related Party Disclosures i. Parties where control exists Bennett, Coleman & Company Limited (BCCL) – Ultimate Holding Company Times Infotainment Media Limited (TIML) – Holding Company of Entertainment Network (India) Limited * Entertainment Network (India) Limited (ENIL) – Holding Company

ii. Fellow Subsidiary Companies Times Innovative Media Limited (TIM) Zoom Entertainment Network Limited (ZENL) Times Business Solutions Limited (TBSL)* Times Internet Limited (TIL) Mirchi Movies (India) Limited (MML)* Times Global Broadcasting Company Limited (TGBCL) Optimal Media Solutions Limited (OMSL) ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 150

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

iii. Other Related Party where common control exists Worldwide Media Private Limited (WWM) iv. Key Managerial Personnel Chief Executive Officer Mr. Prashant Panday * Non-Executive Directors Mr. A. P. Parigi * Mr. S. Sivakumar * Mr. Ravindra Kulkarni * * There are no transactions during the year. v. Transaction with Related Parties (`)

2011-2012 2010-2011

Holding Common Common Fellow Subsidiary Companies Holding Companies Fellow Subsidiary Companies Companies Control Exists Control Exists

Particulars BCCL ENIL TIM TIL ZENL OMSL TGBCL WWM BCCL ENIL TIML TIM TIL ZENL OMSL TGBCL WWM

Transaction with Related Parties:

Sales 1,097,008 10,265,230 — — — — — — 103,763,002 72,358,370 — 298,918 — — — 1,510,827 10,750,000

Sale of Fixed Assets — 361,194 27,720 — — — — — — 42,610 — — — — — — —

Receiving of services 8,193,393 3,662,088 238,899 1,062,719 3,617,248 4,774,206 4,050,000 — 11,625,412 11,899,498 — 767,766 19,868,698 154,861 15,715,822 3,285,001 —

Recovery of Expenses 69,332,494 46,842 — — — — — — 1,363,315 93,683 — — — — — — —

Interest paid — — — — — — — — — 211,163 — — — — — — —

Bad debts — — — — — — — — — — — — — — — 10,200,000

Loan taken — — — — — — — — — 16,500,000 — — — — — — —

Loan repaid — — — — — — — — — 16,500,000 — — — — — — —

Year end balances with Related Parties:

Trade Receivables 3,774,500 — — — — — — 250,000 58,042,415 8,145,813 — 323,113 — — — 1,044,696 28,476,184

Non-Trade Receivables — — — — — — — — — — — 962,913 — — — — —

Payables (Net) 7,400,234 — — 10,215,052 205,400 46,367,957 97,285 — 13,986,993 24,799,024 — — 12,989,035 9,442,194 44,814,752 97,285 — ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ANNUAL REPORT 2011-12 Financials 151

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

24. Earnings Per Share (Basic and Diluted) The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of shares outstanding during the year.

2011-2012 2010-2011 Profit / (Loss) for the year (`) (A) (5,931,282) 4,058,224 Weighted average number of equity shares (B) 1,600,000 1,600,000 Earnings per share – basic and diluted (`) (A/B) (3.71) 2.54 Nominal value of an equity share (`) 10.00 10.00

25. Provision for income tax in the previous year was made on the basis of Section 115JB of the Income Tax Act, 1961 (Minimum Alternate Tax). 26. The financial statements for the year ended March 31, 2011 was prepared as per the then applicable pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per the Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year’s classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

Signatures to notes “1” to “26” forming part of the financial statements.

For Price Waterhouse & Co. For and on behalf of the Board of Directors Firm Registration No. 007567S Chartered Accountants Ravindra Kulkarni A. P. Parigi S. Sivakumar Partha Ghosh Director Director Director Partner Membership No. F-55913 Prashant Panday N. Subramanian Mumbai CEO Group CFO Dated : May 25, 2012 Notes

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Entertainment Network (India) Limited Registered Office : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013. ATTENDANCE SLIP Thirteenth Annual General Meeting on Tuesday, August 14, 2012 at 3.00 p.m. at Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Near Mantralaya, Nariman Point, Mumbai – 400 021.

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.

DP Id* Client Id* Registered Folio No.

NAME AND ADDRESS OF THE MEMBER:......

No. of Share(s) held: :......

I hereby record my presence at the Thirteenth Annual General Meeting of the Company at Y. B. Chavan Auditorium, Gen. Jagannath Bhosale Marg, Next to Sachivalaya Gymkhana, Near Mantralaya, Nariman Point, Mumbai – 400 021, on Tuesday, August 14, 2012 at 3.00 p.m.

Signature of the Member / Proxy ......

* Applicable for Members holding shares in electronic form. TEAR HERE Entertainment Network (India) Limited Registered Office : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013. PROXY FORM

DP Id* Client Id* Registered Folio No.

I/We ...... of ...... being a Member(s) of ENTERTAINMENT NETWORK (INDIA) LIMITED hereby appoint ......

...... of ...... or failing him / her ...... of ...... as my / our proxy to vote for me / us and on my / our behalf at the Thirteenth Annual

General Meeting of the Company to be held on Tuesday, August 14, 2012 at 3.00 p.m. and at any adjournment thereof. Signed ...... 2012. Affix Re. 1/- Place: ...... Signature ______Revenue Stamp * Applicable for Members holding shares in electronic form.

Note: The Proxy, in order to be effective, should be duly completed, stamped, signed and must be deposited at the Registered Office of the Company not less than 48 hours prior to commencement of the Meeting. The Proxy need not be a Member of the Company. SC_COVER.indd 3 7/12/12 7:06 PM Printed at GP Offset Pvt. Ltd.

SC_COVER.indd 4 7/12/12 7:06 PM