| NOTICE | DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT | MANAGEMENT DISCUSSION AND ANALYSIS DIRECTORS’ REPORT TO THE MEMBERS Your Directors are pleased to present the Thirty First Annual Report with the Audited Statement of Accounts of the Company for the year ended March 31, 2013. RESPONSIBILITY STATEMENT In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956, in relation to the Annual Financial Statements for the Financial Year 2012-2013, your Directors confirm the following: a) The Financial Statements comprising of the Balance Sheet as at March 31, 2013 and the Statement of Profit & Loss for the year ended on that date have been prepared in the revised format of Schedule VI of Companies Act, 1956 on a going concern and on the accrual basis and in the preparation of these Financial Statements, applicable accounting standards have been followed and there are no material departures; b) Accounting policies selected were applied consistently and the judgements and estimates related to the financial statements have been made on a prudent and reasonable basis, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date; and c) Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. 40 ANNUAL REPORT 2012-13 CORPORATE OVERVIEW OPERATIONAL OVERVIEW BOARD & MANAGEMENT REPORTS FINANCIAL STATEMENTS FINANCIAL RESULTS The outflow on The Financial Performance of your Company for the year ended March 31, 2013 is summarised below: account of Dividend, (` millions) and the tax on Particulars Year ended Year ended such dividend 31.03.2013 31.03.2012 Revenue from Operations 25,659 22,040 distribution, based Other Income 1,189 1,289 on current paidup Total Income 26,848 23,329 Total Expenses 17,329 15,991 capital of the Profit before Tax 9,519 7,338 Company would Provision for Taxation (net) 3,112 2,441 Profit after Tax 6,407 4,897 aggregate to ` 2,245 Add: Balance brought forward 13,328 11,602 million, resulting in Add: Proposed Dividend (including tax) on Equity 8 - Shares bought back and cancelled a payout of 35% Amount available for appropriations 19,743 16,499 of the profits of Appropriations: Dividend 1,919 1,438 the Company on a Tax on Dividend 326 233 standalone basis. General Reserve 1,500 1,500 Balance carried forward 15,998 13,328 EQUITY DIVIDEND Your Directors recommend payment of Dividend of ` 2.00 per equity share of ` 1/- each and such Dividend shall be payable subject to approval of the Members of the Company on the outstanding equity capital as at the book closure date. The outflow on account of dividend, and the tax on such dividend distribution, based on current paid-up capital of the Company would aggregate to ` 2,245 millions, resulting in a payout of 35% of the profits of the Company on a stand-alone basis. BUSINESS OVERVIEW The year marked the completion of 20 years of Brand Zee. In a year which was marked by considerable slowdown in the Indian economy, reflecting focus on superior performance during the year, your Company has recorded industry leading advertising revenue growth of 24% as against overall television advertisement spends which recorded single digit growth. The television media industry continued to grow on the back of better monetisation of subscription revenues. Financial Year 2013 was a defining year in many ways, the biggest transformation being the implementation of Digital Addressable System (DAS) in 42 largest cities of India in two phases. With exciting consumer offers being provided by DTH operators on premium channel subscriptions, Average Revenue Per User (ARPUs) on DTH is growing and your Company believes that a similar effort by digital cable operators will ensure more ZEE ENTERTAINMENT ENTERPRISES LIMITED 41 | NOTICE | DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT | MANAGEMENT DISCUSSION AND ANALYSIS DIRECTORS’ REPORT robust growth of the industry for all stakeholders. and Gossip Girl. During the year, your Company enhanced its product portfolios both in Armed with telecast rights from 5 (five) cricket boards covering cricket domestic as well as international markets, with the launch of: matches of almost all test playing countries, your Company’s sports channels continue to enthrall viewers across the country. Some of the other Zee Bangla Cinema : A 24-hour Bangla movie channel. With over major acquisitions during the year include US Open Tennis Championships, 400 exclusive titles under its belt, Zee Bangla Cinema offers a mixed Brazilian Football League and WTA Premier Event Rights. bag of commercial blockbuster and alternative cinema. Your Company continued its focus on expansion in International markets Zee Q : India’s first edutainment channel, aimed at children in the age by signing several deals and launching several channels during the year group of 4 to 14 years to address the educational need gaps through that enhanced the penetration of ZEE network channels in international an engaging mix of home produced and acquired contents. territories and these include : Zee Alwan: An Arabic GEC channel. It is a unique channel aimed at Agreement with Yupp TV IPTV platform in Europe Arab family audiences, showcasing a diverse choice of Arabic serials and popular Indian TV serials dubbed in Arabic. Contract with Russia’s 3rd largest GSM operator Megafon for Mobile TV and with regional analog cable operator Barshinform in Russia Your Company’s flagship channel Zee TV improved its viewership share significantly during the year with the launch of several successful shows, Zing was launched on Rogers, while Zee Salaam and Zee Tamil were including Dance India Dance - L’il Masters, Fear Files, Qubool Hai, launched on Bell Fibe in Canada Sapne Suhane Ladakpan Ke and India’s Best Dramebaaz. Pavitra Rishta Seven ZEE channels were launched on the Indian Pack with TOT continued its successful run and reaching a landmark of 1,000 episodes. (IPTV) in Thailand. DID L’il Masters got the highest rating in any non-fiction launch across all Hindi GECs. Zee Cinema continues to lead the Hindi Movie genre and In Africas, Zee TV became the first ethnic channel to be monitored by TAM strengthened its movie library. During the year, some of the Bollywood’s in South Africa and was positioned within the Top 50 channels out of the biggest blockbusters including Agneepath, English Vinglish, Joker and 120 rated channel-list. In Europe, the first locally produced British Asian Agent Vinod were premiered on Zee Cinema. drama series ‘Cloud 9’ was launched on Zing channel and ZEE TV HD continues to stand out as the first South Asian channel launched in HD Regional entertainment channels of your Company continued their strong format in the US. growth in respective markets. Zee Marathi improved its viewership share and became consistent No. 2 player in Marathi GECs. World television One of our key initiatives in the digital space, India.com which runs the premier of the movie Kaksparsh was hugely successful and had a 4th largest Indian Portal with 7.18 mm monthly unique visitors, owns TVR rating of 6.5 and a reach of 16.4 which was highest for a movie and operates leading websites in key audience categories which include in Maharashtra Market. Zee Bangla had market leadership in non-fiction bollywoodlife.com, cricketcountry.com, health.india.com, oncars.in, travel. genre with 78% market share - driven by shows like Dance Bangla Dance india.com, and bgr.in. India.com runs the largest original production Junior 2012, Sa Re Ga Ma Pa 2012 and Mirakkel Akkel Challenger 7 and content channels on YouTube and has launched 6 Original Programming continues to be a strong player in the Bangla GEC space and had the Channels and uploaded 7,200 hours, 31,000 Videos in 2012. Our second position of No 1 Bangla channel in Digital CS 4+ market at the year end. digital initiative, DittoTV OTT platform launched last year has picked up significant traction in FY2013 and the platform is now present in over 250 Zee Telugu was the No.1 GEC channel in the weekday Primetime fiction countries and offering over 56 channels and boasts of over 1.5 mm users. band between 1800-2030hrs on the back of slot leaders like Pasupu Kumkuma and Muddu Bidda, and had bagged 4 State Nandi Awards SUBSIDIARIES during the year including a Golden Nandi for Pasupu Kumkuma. Zee As at March 31, 2013, the Company has 18 subsidiaries in India and Kannada has consistently been at No.3 spot in the viewership ranking Overseas. During the year under review, APAC Media Ventures Limited, in its genre with its top performing shows during the year Kaas Ge Toss, Hongkong - a wholly owned subsidiary of Asia Today Limited, Mauritius Mummy No. 1, Radha Kalyana and Parvati Parameshwara. Zee Tamil and a step down subsidiary of the Company filed an application in February during the year maintained its No.4 position among Tamil GECs with its 2013 for dissolution with Companies Registry, Hongkong since the most successful talk show ‘Solvathellam Unmai’ and has improved its business operations in the region is currently being managed by another viewership share in weekday primetime band and is a No. 3 player in that wholly owned subsidiary of Asia Today Limited viz. Zee Technologies band. (Ghuangzhou) Limited. Zee Cafe has emerged as a leading player in the English Entertainment During the year under review, ITM Digital Private Limited a wholly genre and has acquired some of the best entertainment shows in English owned Indian Subsidiary of the Company was renamed as Essel Vision genre including The Big Bang Theory, Vampire Diaries, Miss Universe 2012 Productions Limited, which is engaged in the business of production of 42 ANNUAL REPORT 2012-13 CORPORATE OVERVIEW OPERATIONAL OVERVIEW BOARD & MANAGEMENT REPORTS FINANCIAL STATEMENTS television /film contents, mainly catering to Zee Network channels.