this didn’t happen by accident · limited will be held at sir sitaram & lady shantabai patkar...

We run the most popular FM radio station,

are the largest organised player inthe Indian Out-of-Home industry

and offer the most innovativeexperiential marketing solutions in

the country.

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ENTERTAINMENT NETWORK (INDIA) LIMITED

22

BOARD OF DIRECTORS (As on May 16, 2007)BOARD OF DIRECTORS (As on May 16, 2007)BOARD OF DIRECTORS (As on May 16, 2007)BOARD OF DIRECTORS (As on May 16, 2007)BOARD OF DIRECTORS (As on May 16, 2007)

Mr. Vineet Jain, Chairman

Ms. Rama Bijapurkar

Mr. N. Kumar

Mr. Deepak M. Satwalekar

Mr. Ravindra Kulkarni

Mr. Ravindra Dhariwal

Mr. A. P. Parigi, Managing Director & Chief Executive Officer

COMPANY SECRETARYCOMPANY SECRETARYCOMPANY SECRETARYCOMPANY SECRETARYCOMPANY SECRETARY

Mr. Anil Fernandes

MANAGEMENT TEAMMANAGEMENT TEAMMANAGEMENT TEAMMANAGEMENT TEAMMANAGEMENT TEAM

Mr. A. P. Parigi, Managing Director & Chief Executive Officer

Mr. Prashant Panday, Deputy Chief Executive Officer

Mr. N. Subramanian, Chief Financial Officer

Mr. Rajesh Kurup, Sr. Vice President � People Innovation

Mr. Anil Fernandes, Sr. Vice President � Legal & Company Secretary

AUDITORSAUDITORSAUDITORSAUDITORSAUDITORS

Price Waterhouse & Co.,Chartered Accountants

ADVOCATES & SOLICITORSADVOCATES & SOLICITORSADVOCATES & SOLICITORSADVOCATES & SOLICITORSADVOCATES & SOLICITORS

Mulla & Mulla & Craigie Blunt & Caroe

BANKERSBANKERSBANKERSBANKERSBANKERS

HDFC Bank Ltd.

REGISTRAR & SHARE TRANSFER AGENTS (�R & TA�)REGISTRAR & SHARE TRANSFER AGENTS (�R & TA�)REGISTRAR & SHARE TRANSFER AGENTS (�R & TA�)REGISTRAR & SHARE TRANSFER AGENTS (�R & TA�)REGISTRAR & SHARE TRANSFER AGENTS (�R & TA�)

Karvy Computershare Private Limited,Unit:- Entertainment Network (India) Limited,Karvy House, 46, Avenue 4, Street No. 1,Banjara Hills, Hyderabad - 500 034.Tel: + 91 40 23312454, Fax: + 91 40 23311968

REGISTERED OFFICE:REGISTERED OFFICE:REGISTERED OFFICE:REGISTERED OFFICE:REGISTERED OFFICE:4th Floor, A-Wing, Matulya Centre, Senapati Bapat Marg, Lower Parel (West), Mumbai - 400 013.

CORPORATE OFFICE:CORPORATE OFFICE:CORPORATE OFFICE:CORPORATE OFFICE:CORPORATE OFFICE:Trade Gardens, Ground Floor, Kamala Mills Compound, Senapati Bapat Marg,

Lower Parel (West), Mumbai � 400 013.


ANNUAL REPORT 2006-2007

23

NOTICE

NOTICE is hereby given that the EIGHTH Annual General Meeting of the Members of ENTERTAINMENT NETWORK (INDIA)LIMITED will be held at Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T. Womens University (�Patkar Hall�),1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai - 400 020, on Monday, September 3, 2007, at 11.00 a.m.to transact the following business:

ORDINARY BUSINESS:ORDINARY BUSINESS:ORDINARY BUSINESS:ORDINARY BUSINESS:ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Balance Sheet of the Company as at March 31, 2007 and the Profit and LossAccount for the year ended on that date and the Reports of the Board of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Ravindra Dhariwal who retires by rotation and being eligible, offers himself forre-appointment.

3. To appoint Messrs Price Waterhouse & Co., Chartered Accountants, as Auditors to hold office from the conclusion of thisAnnual General Meeting until the conclusion of the next Annual General Meeting and to authorize the Board of Directorsto fix their remuneration as agreed to between the Board of Directors and the Auditors, in addition to reimbursement ofservice tax and all out of pocket expenses incurred in connection with the audit of accounts of the Company.

SPECIAL BUSINESS:SPECIAL BUSINESS:SPECIAL BUSINESS:SPECIAL BUSINESS:SPECIAL BUSINESS:

4. To consider and if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution:-

�RESOLVED THAT �RESOLVED THAT �RESOLVED THAT �RESOLVED THAT �RESOLVED THAT Mr. Vineet Jain, who was appointed as an Additional Director with effect from January 19, 2007 at themeeting of the Board of Directors of the Company held on January 19, 2007, pursuant to the provisions of Section 260 ofthe Companies Act, 1956 and who holds office upto the date of the forthcoming Annual General Meeting and beingeligible, offers himself for appointment and in respect of whom the Company has received a notice in writing under Section257 of the Companies Act, 1956, from a Member proposing Mr. Vineet Jain as a Director of the Company, be and is herebyappointed as a Director of the Company who will be liable to retire by rotation.�

5. To consider and if thought fit, to pass with or without modification, the following Resolution as an Ordinary Resolution:-

�RESOLVED THAT �RESOLVED THAT �RESOLVED THAT �RESOLVED THAT �RESOLVED THAT Mr. Ravindra Kulkarni, who was appointed as an Additional Director with effect from January 19, 2007 atthe meeting of the Board of Directors of the Company held on January 19, 2007, pursuant to the provisions of Section 260of the Companies Act, 1956 and who holds office upto the date of the forthcoming Annual General Meeting and beingeligible, offers himself for appointment and in respect of whom the Company has received a notice in writing under Section257 of the Companies Act, 1956, from a Member proposing Mr. Ravindra Kulkarni as a Director of the Company, be and ishereby appointed as a Director of the Company who will be liable to retire by rotation.�

6. To consider and if thought fit, to pass with or without modifications, the following Resolution as a Special Resolution:-

�RESOLVED THAT�RESOLVED THAT�RESOLVED THAT�RESOLVED THAT�RESOLVED THAT in partial modification of the earlier resolution passed by the Members of the Company at their meetingheld on August 26, 2005 and of the terms and conditions of appointment of Mr. A. P. Parigi as Managing Director of theCompany as set out in the aforesaid resolution, and in accordance with the provisions of Sections 198, 269, 302, 309, 310,311, 316 and other applicable provisions, if any, of the Companies Act, 1956 (�the Act�) read with Schedule XIII of the Act,and subject to the approval, consents, permissions, sanctions etc. of the Central Government and all other concernedstatutory and other authorities, if and to the extent applicable and required, the Company hereby approves; with effectfrom August 1, 2006;

a. the removal of the specific amount/ limit /ceiling against individual component of the managerial remuneration,including salary, perquisites, allowances etc. as stipulated in the aforesaid resolution passed by the Members of theCompany for payment of remuneration by way of salary, allowances, commission on profits and/or bonus and perquisitesand other benefits and amenities; and

b. revision in the remuneration by way of salary, perquisites and allowances payable to Mr. A. P. Parigi (including theremuneration to be paid in the event of loss or inadequacy of profits in any financial year during the tenure of hisappointment) for the remainder of his tenure as set out in the Explanatory Statement annexed to the Notice conveningthis meeting;


24

RESOLVED FURTHER THATRESOLVED FURTHER THATRESOLVED FURTHER THATRESOLVED FURTHER THATRESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as the �Board� which shall includea duly authorized Committee thereof for the time being exercising the powers conferred upon it by the Board), be and ishereby authorized to take all such steps as may be necessary, proper, expedient or desirable to give effect to this resolutionor to make modification as may be deemed to be in the best interest of the Company, with liberty to the Board to alter andvary the terms and conditions of the said appointment in such manner as may be agreed to between the Board andMr. Parigi and to do all such acts, deeds, matters and things for giving effect to this resolution.�

NOTES:NOTES:NOTES:NOTES:NOTES:

(a) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE GENERAL MEETING IS ENTITLED TO APPOINT A PROXY, WHO NEED NOTBE A MEMBER, TO ATTEND AND VOTE ON BEHALF OF HIMSELF/HERSELF. The instruments appointing the Proxy should bedeposited at the Registered Office of the Company not less than 48 (forty eight) hours before the commencement of theMeeting.

(b) The Register of Members and Share Transfer Books of the Company will remain closed from Monday, August 27, 2007, toMonday, September 3, 2007, both days inclusive.

(c) The relevant Explanatory Statement pursuant to Section 173 of the Companies Act, 1956, setting out material facts relatingto the business at Item nos. 4 to 6 of the Notice as set out above are annexed hereto.

(d) In terms of Section 205C of the Companies Act, 1956, the application money received by the Company for allotment of anySecurities and due for refund, which remain unpaid or unclaimed for a period of 7 (seven) years from the date they becomedue for payment shall be credited to the Investor Education and Protection Fund (�IEPF�).

(e) Members are requested to notify immediately any change of address:

(i) to their Depository Participants (DPs) in respect of their shareholdings in electronic (d�mat) form and

(ii) to the Company�s Registrars & Share Transfer Agents (�R & TA�) , Karvy Computershare Private Limited, Unit:-Entertainment Network (India) Limited, Karvy House, 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad - 500 034.Tel: + 91 40 23312454, Fax: + 91 40 23311968, in respect of their shareholdings in physical form, if any, quoting theirfolio numbers.

(f) In terms of Section 109A of the Companies Act, 1956, every holder of shares/ debentures in a Company may at any timenominate in the prescribed manner a person to whom his/her shares/debentures in the Company shall vest, in the event ofhis/her death. Nomination forms can be obtained from the R & TA.

(g) Members/ Proxies should bring the Attendance Slip sent herein duly filled in for attending the Meeting.

(h) Members are requested to bring their copy of the Annual Report to the Meeting.

(i) Members desiring any information pertaining to the accounts are requested to write to Sr. Vice President- Legal & CompanySecretary at an early date so as to enable the Management to reply at the AGM.

By Order of the Board of DirectorsBy Order of the Board of DirectorsBy Order of the Board of DirectorsBy Order of the Board of DirectorsBy Order of the Board of DirectorsFor Entertainment Network (India) LimitedFor Entertainment Network (India) LimitedFor Entertainment Network (India) LimitedFor Entertainment Network (India) LimitedFor Entertainment Network (India) Limited

Anil FernandesAnil FernandesAnil FernandesAnil FernandesAnil Fernandes

Sr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretaryMumbai, July 31, 2007.Registered Office:Registered Office:Registered Office:Registered Office:Registered Office:4th Floor, A-Wing,Matulya Centre,Senapati Bapat Marg,Lower Parel (West),Mumbai - 400 013.


25

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

The following Explanatory Statement sets out all material facts relating to the business mentioned under Item Nos. 4 to 6 of theaccompanying Notice dated July 31, 2007.

2.2.2.2.2. Item nos. 4 and 5:- Item nos. 4 and 5:- Item nos. 4 and 5:- Item nos. 4 and 5:- Item nos. 4 and 5:- Mr. Vineet Jain was appointed by the Board of Directors as an Additional Director with effect fromJanuary 19, 2007 pursuant to the provisions of Section 260 of the Companies Act, 1956 and was also elected as theChairman of the Board of Directors. Accordingly Mr. Vineet Jain holds office upto the date of the forthcoming AnnualGeneral Meeting and being eligible offers himself for appointment. Pursuant to the provisions of Section 257 of theCompanies Act, 1956, a notice in writing has been received from a Member proposing Mr. Vineet Jain as Director of theCompany, liable to retire by rotation.

3. Mr. Vineet Jain, Non-Executive Director, is a recognized marketing scholar and holds B. Sc. degree in international businessadministration in marketing from Switzerland. He is the Managing Director of Bennett, Coleman & Co. Ltd. Mr. Jain hastransformed the Times Group from being India�s leading publishing house to India�s largest diversified and multi-facetedmedia conglomerate. During his illustrious career, Mr. Jain has achieved new heights of success in various spheres such asinternet, entertainment, music, retailing, radio, television etc. and thus contributed greatly towards enhancing the valueand image of the Times of India Group. He is trustee/member of managing committee of various philanthropic organizationsviz. The Times Foundation, The Times of India Relief Fund, S. P. Jain Foundation etc.

4. Mr. Ravindra Kulkarni was appointed by the Board of Directors as an Additional Director with effect from January 19, 2007pursuant to the provisions of Section 260 of the Companies Act, 1956. Accordingly, Mr. Kulkarni holds office upto the dateof the forthcoming Annual General Meeting and being eligible offers himself for appointment. Pursuant to the provisions ofSection 257 of the Companies Act, 1956, a notice in writing has been received from a Member proposing Mr. Kulkarni asDirector of the Company, liable to retire by rotation.

5. Mr. Ravindra Kulkarni, Non-Executive and Independent Director, holds a Masters degree in Law from Bombay University. Healso holds a Bachelors degree in Science from Bombay University. He is National Partner of M/s. Khaitan & Co., one of theleading firms of Advocates and Solicitors in India and heads the firm�s Mumbai office. He has been in the legal professionfor more than three decades and has vast experience as a legal practitioner particularly on matters relating to corporatelaw, foreign collaborations, joint ventures, mergers and acquisitions, capital markets, public offerings for listing of securitiesin India as well as in international markets, infrastructure projects etc. He is a member of the Advisory Committee and alsoa faculty member of the Post Graduate Diploma Course in Securities Law at the Government Law College, Mumbai.

6. The Board of Directors commends the Ordinary Resolutions at Item nos. 4 and 5 of the Notice for approval by the Members.

7. Mr. Vineet Jain and Mr. Ravindra Kulkarni may be considered to be concerned or interested in Item nos. 4 and 5 of theNotice respectively.

8. Item no. 6:- Item no. 6:- Item no. 6:- Item no. 6:- Item no. 6:- Mr. A. P. Parigi, Managing Director was re-appointed as the Managing Director of the Company for a furtherperiod of four (4) years commencing from August 1, 2005 to July 31, 2009, by a resolution passed by the CompensationCommittee and Board of Directors of the Company (hereinafter referred to as the �Board� which shall include a dulyauthorized Committee thereof for the time being exercising the powers conferred upon it by the Board), on June 24, 2005pursuant to the provisions of Sections 198, 269, 302, 309, 310, 311, 316, Schedule XIII and other applicable provisions, ifany, of the Companies Act, 1956 (�the Act�). The aforesaid re-appointment was approved by the Members of the Companyat their meeting held on August 26, 2005.

9. Due to loss/ inadequacy of profit of the Company upto the financial year ended March 31, 2005, permission was sought bythe Company from the Government of India, Ministry of Company Affairs, for payment of remuneration to Mr. A. P. Parigi.Vide the approval letter dated February 1, 2006, Government of India, Ministry of Company Affairs approved the appointmentof Mr. A. P. Parigi for a period from August 1, 2005 to July 31, 2009 at a remuneration of Rs. 1,45,81,600/- (Rupees onecrore forty five lacs eighty one thousand and six hundred only) per annum subject to the other conditions as stated in thesaid approval.

10. Mr. Parigi is also the Managing Director of Times Infotainment Media Limited, the holding company and he was/is drawingno remuneration therefrom.

11. Under the leadership of Mr. Parigi, the Company has made great strides in the radio business and continues to grow at acommendable pace. In view of the same, the Remuneration / Compensation Committee and the Board of Directors of theCompany, at their meetings held on January 19, 2007, vide their respective resolutions, approved the revision in the

EXPLANATORY STATEMENTS


26

managerial remuneration payable to Mr. A. P. Parigi, Managing Director, followed by further revision vide the resolutionspassed by the Remuneration / Compensation Committee and the Board of Directors of the Company, at their meetings heldon July 31, 2007, as per the applicable provisions of the Companies Act, 1956. The proposed remuneration payable to theManaging Director would be more than the sum approved by the Government of India, Ministry of Company Affairs videtheir said approval letter dated February 1, 2006. The proposed remuneration would be payable with retrospective effectfrom August 1, 2006, but shall be paid only after approval has been obtained from the Members of the Company and theCentral Government and other concerned authorities, if and to the extent required.

12. In order to give flexibility to the Remuneration/ Compensation Committee and the Board of Directors to decide upon theremuneration including perquisites and allowances to be granted to the Managing Director from time to time, within theoverall ceilings prescribed under the Act, the Remuneration/ Compensation Committee and the Board of Directors have, bypassing resolutions unanimously, at their meetings held on July 31, 2007, approved revision in the terms of remunerationincluding perquisites and allowances of Mr. A. P. Parigi for the period given below, subject to the approval of the Membersof the Company and the Central Government, if and to the extent required;

a. Effective period: From August 1, 2006 to July 31, 2009

b. The revised terms of remuneration will be determined by the Board from time to time subject to the following limits:-

i.i.i.i.i. Remuneration:Remuneration:Remuneration:Remuneration:Remuneration:

� Basic pay per month: Rs. 2,55,000/- per month in the scale of Rs. 2,55,000/- � Rs. 15,000/- � Rs. 3,45,000/-;as will be determined by the Board from time to time;

� Special pay per month: upto a maximum of 250% of the basic pay; as will be determined by the Board fromtime to time;

� Conveyance per month: upto a maximum of 20% of the basic pay; as will be determined by the Board fromtime to time;

� Annual Performance Bonus: upto a maximum of 350% of the annual basic pay; as will be determined by theBoard from time to time;

ii.ii.ii.ii.ii. Perquisites and allowances:Perquisites and allowances:Perquisites and allowances:Perquisites and allowances:Perquisites and allowances:

� Housing: The expenduture to be borne by the Company on hiring the furnished accommodation;

� Company car: The Company will provide two cars for official and personal use and/ or monetized value asdetermined by the Board;

Commission calculated with reference to the net profits in a particular financial year will be determined by theBoard of Directors based on performance of the Company.

iii.iii.iii.iii.iii. Minimum Remuneration:Minimum Remuneration:Minimum Remuneration:Minimum Remuneration:Minimum Remuneration:

Notwithstanding anything to the contrary herein contained where in any financial year during the currency of thetenure of Mr. A. P. Parigi, the Company has no profits or its profits are inadequate, the Company will payremuneration by way of salary, benefits, perquisites and allowances as specified above as minimum remunerationsubject to compliance with the applicable provisions of Sections 198, 309 and all other applicable provisions, ifany, of the Act read with Schedule XIII of the Act as amended from time to time, subject to the approval of theCentral Government, if and to the extent necessary.

All the other terms and conditions of appointment of Mr. A. P. Parigi would remain unchanged.

13. The Special Resolution at Item 6 of the Notice seeks to give the requisite flexibility to the Board to determine theremuneration payable to Mr. A. P. Parigi within the overall ceiling prescribed under the Act by removing the specificamount/ limit/ ceiling against individual component of the managerial remuneration, including salary, perquisites, allowances,etc. as stipulated in the aforesaid resolution passed by the Members of the Company. This will allow a certain amount offlexibility to the Remuneration/ Compensation Committee and the Board to recognize merit and reward outstandingperformance.

14. The aforesaid resolutions regarding appointment/re-appointment of Mr. A. P. Parigi and managerial remuneration payableto him are available for inspection for the Members at the Registered Office of the Company during business hours on anyworking day (except Saturdays, Sundays and Public Holidays).

15. The Special Resolution at Item 6 of the Notice is necessary having regard to the provisions of Sections 198, 269, 302, 309,310, 311, 316, Schedule XIII and other applicable provisions of the Companies Act, 1956. The Company has not made anydefault in repayment of any of its undisputed debts (including public deposits) or debentures or interest payable thereon fora continuous period of thirty days in the preceding financial year before the date of appointment of such managerial


27

person. The Board of Directors, therefore, commends the Special Resolution at Item No. 6 of the accompanying Notice forapproval by the Members. This may be treated as an abstract under Section 302 of the Act of the revision in the terms ofremuneration of Mr. Parigi.

16. Mr. A. P. Parigi may be considered to be concerned or interested in Item no. 6 of the Notice.

Additional information Additional information Additional information Additional information Additional information relevant to the aforesaid managerial remuneration to Mr. A. P. Parigi, in terms of Schedule XIII tothe Companies Act, 1956:

1.1.1.1.1. General Information:General Information:General Information:General Information:General Information:

1.1.1.1.1.1.1.1.1.1. Nature of industryNature of industryNature of industryNature of industryNature of industry

Radio broadcast commenced in India in the early 1920�s. It is one of the oldest and the most accessible segmentsof the entertainment industry. The history of radio broadcasting in India dates back to 1923 when the first radioprogramme was broadcasted by the Radio Club of Bombay.

All India Radio (�AIR�) established and operated by the Ministry of Information and Broadcasting (�MIB�), was theonly player till the FM radio privatization process was initiated in the year 1999. The phenomenal reach of radioin India, more than any other medium of entertainment or information, makes it hard to ignore.

The Company has a national footprint and operates its FM Radio Stations under its brand name �Radio Mirchi�.®

1.2.1.2.1.2.1.2.1.2. Date of commencement of commercial productionDate of commencement of commercial productionDate of commencement of commercial productionDate of commencement of commercial productionDate of commencement of commercial production

The Company was incorporated on June 24, 1999. The Company has launched its Private FM radio stations underthe name and style �Radio Mirchi� at various places in India on the below mentioned dates:-

##### PlacePlacePlacePlacePlace Date of LaunchDate of LaunchDate of LaunchDate of LaunchDate of Launch

1 Indore October 4, 20012 Ahmedabad December 20, 20013 Mumbai April 23, 20024 Pune May 1, 20025 Delhi April 29, 20036 Kolkata May 3, 20037 Chennai May 5, 20038 Bangalore April 17, 20069 Jaipur April 17, 200610 Hyderabad April 19, 200611 Patna April 2, 200712 Jalandhar April 14, 200713 Panaji (Goa) May 22, 200714 Bhopal May 26, 200715 Vadodara June 5, 200716 Rajkot June 13, 200717 Kanpur June 16, 200718 Nasik July 6, 200719 Varanasi July 14, 200720 Aurangabad July 24, 2007

The Company has bid successfully for licenses to operate 25 radio stations under the FM Radio BroadcastingPhase II through private agencies (Phase II), out of which it has already launched thirteen radio stations includedin the above table.

1.3.1.3.1.3.1.3.1.3. In case of new companies, expected date of commencement of activities as per project approved by financialIn case of new companies, expected date of commencement of activities as per project approved by financialIn case of new companies, expected date of commencement of activities as per project approved by financialIn case of new companies, expected date of commencement of activities as per project approved by financialIn case of new companies, expected date of commencement of activities as per project approved by financialinstitutions appearing in the prospectusinstitutions appearing in the prospectusinstitutions appearing in the prospectusinstitutions appearing in the prospectusinstitutions appearing in the prospectus

Not Applicable


28

1.4.1.4.1.4.1.4.1.4. Financial performance based on given indicatorsFinancial performance based on given indicatorsFinancial performance based on given indicatorsFinancial performance based on given indicatorsFinancial performance based on given indicators

As per published audited financial results for the year ended March 31, 2007;

ParticularsParticularsParticularsParticularsParticulars (Rupees in Crores)(Rupees in Crores)(Rupees in Crores)(Rupees in Crores)(Rupees in Crores)

Turnover & Other Income 170.53

Net Profit as per Profit & Loss Account 29.08

Profit as computed under Section 309(5) read with Section 198 29.49

Net Worth 293.73

1.5.1.5.1.5.1.5.1.5. Export performance and net foreign exchange collaborationsExport performance and net foreign exchange collaborationsExport performance and net foreign exchange collaborationsExport performance and net foreign exchange collaborationsExport performance and net foreign exchange collaborations

2006-20072006-20072006-20072006-20072006-2007 2005-20062005-20062005-20062005-20062005-2006Rupees Rupees

Airtime Sales - 3,221,043Consultancy Services 685,098 -Total 685,098 3,221,043

1.6.1.6.1.6.1.6.1.6. Foreign investments or collaborations, if anyForeign investments or collaborations, if anyForeign investments or collaborations, if anyForeign investments or collaborations, if anyForeign investments or collaborations, if any

No Foreign Direct Investment (FDI) has been made in the Company. The only foreign investments that have beenmade in the Company are through the Initial Public Offer and subsequently the Stock Exchanges.

2.2.2.2.2. Information about the appointee:Information about the appointee:Information about the appointee:Information about the appointee:Information about the appointee:

2.1.2.1.2.1.2.1.2.1. Back ground details, recognition or award, job profile and his suitability:Back ground details, recognition or award, job profile and his suitability:Back ground details, recognition or award, job profile and his suitability:Back ground details, recognition or award, job profile and his suitability:Back ground details, recognition or award, job profile and his suitability:

Mr. A. P. Parigi, Managing Director, has had a commendable role to play in the success and growth achieved bythe Company in such a short span of time. For the under mentioned reasons it is deemed expedient to revise theremuneration payable to Mr. A. P. Parigi, Managing Director:-

� Mr. A. P. Parigi has excellent academic and professional qualifications. He holds a Masters degree in businessadministration from the Faculty of Management Studies, University of Delhi and he also holds a Bachelorsdegree in Economics and a Masters degree in Sociology from the Delhi School of Economics.

� His academic brilliance is combined with rich experience of about three decades in various industries,including construction, trading, exports, financial services and telecom.

� Mr. Parigi was the CEO of BPL Mobile Communications and BPL Broadband Limited, Mumbai. At BPL Mobile,he was credited with leading a team that created, from scratch, one of the most recognized mobile telecombrands in India, a feat that he has replicated with brand �Radio Mirchi�.

� Mr. Parigi was the Chairperson at the World GSM Congress 2000, Cannes, France. He is a co-founder andwas a member of the Executive Council, COAI. He has held the Chair of various sub-committees of CII,including industrial policy, finance and taxation. He is a past member of the National Committee onTelecommunications, CII.

� Mr. Parigi is a member of the CII National Media Committee and holds the Chair for the RadioSub-Committee, all this is clear evidence of the stature and the respect that he commands in the industry/business.

� Private radio broadcast is a business which is relatively new and the knowledge domain and expertiseacquired by Mr. Parigi is of immense value to the Company.

� Being a relatively new industry it is difficult to attract and retain talent vis-à-vis more lucrative and highprofile industries.

� It is pertinent to note that Mr. A. P. Parigi is also the Managing Director of Times Infotainment MediaLimited [the Holding Company of Entertainment Network (India) Limited] and that he does not draw anyremuneration from the aforesaid Holding Company.


29

� The proposed remuneration is in line with current job market norms and will not in any way impact theprofitability of the Company. Also, other than Mr. A. P. Parigi none of the other Directors draw anyremuneration from the Company other than sitting fees.

2.2.2.2.2.2.2.2.2.2. Past remuneration:Past remuneration:Past remuneration:Past remuneration:Past remuneration:(Rs. in lacs)

For the financial year 2004-05 101.85



� Due to loss/ inadequacy of profit of the Company, the Company had sought permission from the Governmentof India, Ministry of Company Affairs for payment of remuneration to Mr. A. P. Parigi in excess of the limitsprescribed under Schedule XIII of the Companies Act, 1956. Pursuant to the provisions of Section 198 of theCompanies Act, the Government of India, Ministry of Company Affairs vide their approval letter datedFebruary 1, 2006, approved the appointment of Mr. A. P. Parigi as Managing Director of the Company for aperiod from August 1, 2005 to July 31, 2009, at a remuneration of Rs. 1,45,81,600/- (Rupees one crore fortyfive lacs eighty one thousand and six hundred only) per annum.

2.3.2.3.2.3.2.3.2.3. Remuneration proposed:Remuneration proposed:Remuneration proposed:Remuneration proposed:Remuneration proposed:

� The details of the proposed remuneration have been furnished herein before.

2.4.2.4.2.4.2.4.2.4. Comparative remuneration profile with respect to industry, size of the company, profile of the position andComparative remuneration profile with respect to industry, size of the company, profile of the position andComparative remuneration profile with respect to industry, size of the company, profile of the position andComparative remuneration profile with respect to industry, size of the company, profile of the position andComparative remuneration profile with respect to industry, size of the company, profile of the position andperson:person:person:person:person:

Taking into consideration the size of the Company, the profile of the incumbent, the responsibilities shoulderedby him and the industry benchmarks, the remuneration proposed to be paid is commensurate with the remunerationpackages paid to similar senior level incumbents in other companies.

2.5.2.5.2.5.2.5.2.5. Pecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, ifPecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, ifPecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, ifPecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, ifPecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, ifany:any:any:any:any:

Mr. A. P. Parigi has no pecuniary relationship directly or indirectly with the Company, or with any managerialpersonnel, other than his office of the Managing Director & CEO of the Company and its holding company, TimesInfotainment Media Limited, and his directorships in Times Innovative Media Limited (Company�s subsidiary),Bennett, Coleman & Company Limited and other group companies. Mr. A. P. Parigi is holding 2,46,500 equityshares in the Company as on July 31, 2007. Mr. Parigi draws managerial remuneration only from the Company.

For the reasons stated above, it is therefore necessary to enhance the remuneration paid to Mr. A. P. Parigi,which considering all other factors is similarl to the industry norms, considering the knowledge domain, skill setsand expertise he brings to the Company.

3.3.3.3.3. Other information:Other information:Other information:Other information:Other information:

3.1.3.1.3.1.3.1.3.1. Reasons for Loss or inadequate profits:Reasons for Loss or inadequate profits:Reasons for Loss or inadequate profits:Reasons for Loss or inadequate profits:Reasons for Loss or inadequate profits:

The outcome of the privatization process under Phase- I was not very encouraging. The broad reasons for theinadequate profits are enumerated herein below:-

� Highly regulated processHighly regulated processHighly regulated processHighly regulated processHighly regulated process with restrictions on use of content, national license, networking, branding, technicalspecifications etc.

� License period -License period -License period -License period -License period - The license period of 10 years is perceived as too short for the industry to break even andearn adequate returns on the resources expended.

� Restriction on Multiple License � Restriction on Multiple License � Restriction on Multiple License � Restriction on Multiple License � Restriction on Multiple License � Unlike television which offers a bouquet of channels, in private radiobroadcast only one station per bidder, per city, was permitted.....

� Inventory Management � Inventory Management � Inventory Management � Inventory Management � Inventory Management � Commercial air time is a perishable commodity a fact well recognized; with a viewto utilize the inventory in terms of air time available other private radio broadcasters have been offeringadvertisers spots on radio at abysmally low rates.


30

3.2.3.2.3.2.3.2.3.2. Steps taken or proposed to be taken for improvement:Steps taken or proposed to be taken for improvement:Steps taken or proposed to be taken for improvement:Steps taken or proposed to be taken for improvement:Steps taken or proposed to be taken for improvement:

� The Company�s strategy:The Company�s strategy:The Company�s strategy:The Company�s strategy:The Company�s strategy:

� Vision: Vision: Vision: Vision: Vision: The Company�s vision is to be a leading city-centric-media company by delivering uniqueaudiences through media vehicles like FM radio, event management and out-of-home media.

� Leverage the Company�s footprint to capture additional income: Leverage the Company�s footprint to capture additional income: Leverage the Company�s footprint to capture additional income: Leverage the Company�s footprint to capture additional income: Leverage the Company�s footprint to capture additional income: The Company intends to leverage itsfootprint of twenty operational stations and twelve to be operational in due course to enhance theCompany�s audience base and income.

� Continuously invest in brand building and programming innovation: Continuously invest in brand building and programming innovation: Continuously invest in brand building and programming innovation: Continuously invest in brand building and programming innovation: Continuously invest in brand building and programming innovation: The Company intends to maintainand enhance the leadership position of the Company�s radio stations through continuous innovation,focused marketing, intensive brand building and exploiting the interactive nature of FM radio. TheCompany plans to engage current and potential listeners through �on-air� as well as �off-air� activities.

� Exploit additional revenue streamsExploit additional revenue streamsExploit additional revenue streamsExploit additional revenue streamsExploit additional revenue streams: In addition to income from airtime sales on the Company�s FMradio channels, the Company intends to focus on creating or expanding additional revenue streams. TheCompany has already launched �Mirchi Activation� events which are promoted through the Company�sradio channels and enable the Company to enhance its airtime sales as well as attract new advertisers.The Company has entered into an agreement with Hewlett-Packard India Sales Private Limited (�HP�) tolaunch visual radio services for the first time in India. Visual radio, images and texts are synchronizedwith the radio broadcast to bring information and interactivity directly to a mobile phone. As part ofthis agreement the Company has an exclusivity period which will give the Company the first moveradvantage. Visual radio services also provide an additional advertising opportunity to the Company�sclients.

� Programming formats:Programming formats:Programming formats:Programming formats:Programming formats: The Company has a track record of developing creative and innovative contentor programming formats, which has helped expand and retain the Company�s audience and advertisers.The Company has access to the film industry and is able to develop unique programmes and showsaround them.

� Locations of FM radio stations: Locations of FM radio stations: Locations of FM radio stations: Locations of FM radio stations: Locations of FM radio stations: The Company�s FM radio stations are located in diverse regions in Indiaand the Company has been successful in attracting local listeners in each of these markets. TheCompany�s superior understanding of audience preferences enables the Company to provide contentthat is customized to their taste, language and culture.

� The Company�s PromotersThe Company�s PromotersThe Company�s PromotersThe Company�s PromotersThe Company�s Promoters: One of the Company�s promoter, Bennett, Coleman & Company Limited(�BCCL�), is the flagship company of the Times Group, which has a heritage of over 150 years and is oneof India�s leading media groups.

· Business of the Company�s wholly owned subsidiary:Business of the Company�s wholly owned subsidiary:Business of the Company�s wholly owned subsidiary:Business of the Company�s wholly owned subsidiary:Business of the Company�s wholly owned subsidiary:

� The Company, through its wholly owned subsidiary, is also in the business of event management andout-of-home media through the brands 360o- Experiential Marketing and Times Out-of-home Media,respectively. These two businesses were earlier conducted by the Company�s Promoter, Times InfotainmentMedia Limited (�Times Infotainment�), and have been recently acquired by the Company�s Subsidiary,Times Innovative Media Limited (�TIM�). The Company believes that the Company�s FM radio broadcasting,event management and out-of-home media businesses together comprise a strong bouquet of city-centric media solutions for advertisers targeting these cities.

3.3.3.3.3.3.3.3.3.3. Expected increase in production and profits in measurable terms:Expected increase in production and profits in measurable terms:Expected increase in production and profits in measurable terms:Expected increase in production and profits in measurable terms:Expected increase in production and profits in measurable terms:

� Policy on Expansion of FM Radio Broadcasting Services Through Private Agencies (Phase � II) (the �Phase IIPolicy on Expansion of FM Radio Broadcasting Services Through Private Agencies (Phase � II) (the �Phase IIPolicy on Expansion of FM Radio Broadcasting Services Through Private Agencies (Phase � II) (the �Phase IIPolicy on Expansion of FM Radio Broadcasting Services Through Private Agencies (Phase � II) (the �Phase IIPolicy on Expansion of FM Radio Broadcasting Services Through Private Agencies (Phase � II) (the �Phase IIPolicy�) issued by Ministry of Information and Broadcasting, Government of India on July 13, 2005: Policy�) issued by Ministry of Information and Broadcasting, Government of India on July 13, 2005: Policy�) issued by Ministry of Information and Broadcasting, Government of India on July 13, 2005: Policy�) issued by Ministry of Information and Broadcasting, Government of India on July 13, 2005: Policy�) issued by Ministry of Information and Broadcasting, Government of India on July 13, 2005: Ministryof Information and Broadcasting issued the Phase II Policy on July 13, 2005. The objectives of Phase II Policyinclude attracting private agencies to supplement and complement the efforts of AIR by operationalisingradio stations that provide programs with local content and relevance, improve the quality of reception andencouraging participation by local talent and generating employment. Consequently, the licensee is requiredto pay annual license fees based on a revenue sharing formula under the Phase II Policy, and not as a fixedlicense fee obligation under the Phase I Policy.


31

� The management of the Company under the able leadership of Mr. A. P. Parigi, Managing Director and ChiefExecutive Officer, is evaluating various options available to it to improve profitability.

� Financial statistics for last five financial year:Financial statistics for last five financial year:Financial statistics for last five financial year:Financial statistics for last five financial year:Financial statistics for last five financial year:(Amount in Rupees)

2006-2007 2005-2006 2004-2005 2003-2004 2002-2003

Income 1,705,251,157 1,187,630,791 762,254,173 569,494,061 209,886,173

EBITDA 477,527,048 381,399,162 (122,858,261) (231,791,593) (365,260,608)

Net Profit 290,789,381 294,692,308 (179,261,576) (293,288,622) (402,158,635)

� Business specific growth driversBusiness specific growth driversBusiness specific growth driversBusiness specific growth driversBusiness specific growth drivers

� Low Cost of Advertisement Production: Low Cost of Advertisement Production: Low Cost of Advertisement Production: Low Cost of Advertisement Production: Low Cost of Advertisement Production: Compared to television commercials, radio commercials are veryeconomical to make. Because of this, advertisers can make multiple creatives to suit different cities,different day-parts and different brand objectives.

� Network Expansion:Network Expansion:Network Expansion:Network Expansion:Network Expansion: After implementation of Phase II Policy of FM radio privatization, private sector FMradio is likely to be available in many more cities and will enable advertisers to reach out to a largerconsumer base, using radio as a medium. This could result in radio getting a larger share of theadvertising spends.

� Availability of Listenership Data: Availability of Listenership Data: Availability of Listenership Data: Availability of Listenership Data: Availability of Listenership Data: As radio expands, the availability of organized research providingsegmented data on audience listenership is likely to increase advertisers� comfort with the medium.

� Rationalization of License Fees: Rationalization of License Fees: Rationalization of License Fees: Rationalization of License Fees: Rationalization of License Fees: The shift from a fixed license fee to the revenue share model in PhaseII Policy of private FM broadcasting is expected to result in more viable radio business models and thusdrive growth for the FM radio broadcasting industry.

� Local Advertising: Local Advertising: Local Advertising: Local Advertising: Local Advertising: Globally, the local retail segment constitutes a large part of radio�s advertisingincome. Ideally, a localized medium like radio can be effectively used for local-level promotions andregion-specific advertising campaigns, apart from being bundled as part of cross-media promotionstrategies.

� Currently, the Company is performing well. However, in the event of unforeseen circumstances and conditionsbeyond the control of the Company, the profitability of the Company may be affected. Barring unforeseencircumstances, it is expected that the Company will perform well in future.

� The details of the remuneration etc. of other directors are included in the report on Corporate Governanceforming part of the Annual Report of the Company.

. By Order of the Board of DirectorsBy Order of the Board of DirectorsBy Order of the Board of DirectorsBy Order of the Board of DirectorsBy Order of the Board of DirectorsFor Entertainment Network (India) LimitedFor Entertainment Network (India) LimitedFor Entertainment Network (India) LimitedFor Entertainment Network (India) LimitedFor Entertainment Network (India) Limited

Anil FernandesAnil FernandesAnil FernandesAnil FernandesAnil Fernandes

Sr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretarySr. Vice President- Legal & Company SecretaryMumbai, July 31, 2007.Registered Office:Registered Office:Registered Office:Registered Office:Registered Office:4th Floor, A-Wing,Matulya Centre,Senapati Bapat Marg,Lower Parel (West),Mumbai - 400 013.


32

ANNEXURE TO ITEMS 2, 4 ANNEXURE TO ITEMS 2, 4 ANNEXURE TO ITEMS 2, 4 ANNEXURE TO ITEMS 2, 4 ANNEXURE TO ITEMS 2, 4 ANDANDANDANDAND 5 OF THE NOTICE 5 OF THE NOTICE 5 OF THE NOTICE 5 OF THE NOTICE 5 OF THE NOTICE

Details of Directors seeking appointment / re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement).Details of Directors seeking appointment / re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement).Details of Directors seeking appointment / re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement).Details of Directors seeking appointment / re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement).Details of Directors seeking appointment / re-appointment at the forthcoming Annual General Meeting (in pursuance of Clause 49 of the Listing Agreement).

Name of the DirectorName of the DirectorName of the DirectorName of the DirectorName of the Director Mr. Ravindra DhariwalMr. Ravindra DhariwalMr. Ravindra DhariwalMr. Ravindra DhariwalMr. Ravindra Dhariwal Mr. Vineet JainMr. Vineet JainMr. Vineet JainMr. Vineet JainMr. Vineet Jain Mr. Ravindra KulkarniMr. Ravindra KulkarniMr. Ravindra KulkarniMr. Ravindra KulkarniMr. Ravindra Kulkarni

Date of Birth September 11, 1952 February 12, 1966 May 23, 1945

Nationality Indian Indian Indian

Date of Appointment on the Board December 31, 2002 January 19, 2007 January 19, 2007

Qualifications B.Tech (Chemical Engineering) B. Sc. degree in International Masters degree in Lawfrom the Indian Institute Business Administration in from University of Mumbai,of Technology, Kanpur and also Marketing from Switzerland also holds a Bachelorsholds a Post Graduate Diploma degree in Science fromin Management (Marketing University of Mumbai.and Finance) from the IndianInstitute of Management, Calcutta

Shareholding in the Company Nil Nil Nil

List of Directorships held Bennett, Coleman & Company Ltd., Bennett, Coleman & Co. Ltd. Mahindra & Mahindra Limited,in other Companies Times Infotainment Media Limited, (Managing Director), Mahindra & Mahindra

Vardhaman Publishers Limited, HDFC Bank Limited, Contech Limited,Banhem Financial & Investment Bharat Nidhi Limited, Beck India Limited,Consultants Limited, Times Centre The Press Trust of India Limited, Caprihans India Limited,for Media Studies, Times Global Times Global Broadcasting Shamrao Vithal Co-Broadcasting Company Limited, Company Limited, operative Bank Limited,Vijayanand Printers Limited, Times Times Infotainment Media Limited, Associated Polymers Limited,Journal India Private Limited, and Times Internet Limited, Optimal Media and Revertex-KA LatexM/s Bennett Advisory Services Limited. Solutions Limited, Worldwide Media (India) Private Limited.

Private Limited, Zoom EntertainmentNetwork Private Limited and TimesJournal India Private Limited

Committee membership 1. Entertainment Network 1. Bennett, Coleman & Co. Ltd.: 1. Beck India Limited:(India) Limited: [Chairman of [Chairman of Investment and [Chairman of AuditShareholders�/ Investors� Loans Committee, Member Committee, Member ofGrievance Committee, Member of Share Transfer Committee]. Shareholders�/ Investors�of Audit Committee, Member of Grievance Committee]Remuneration/ Compensation 2. The Press Trust of India Limited:Committee]. [Member of Committee of Board]. 2. Mahindra & Mahindra

Limited: [Member of Audit2. Bennett, Coleman & Co. Ltd.: Committee, Member of

[Member of Audit Committee] Shareholders� /Investors�Grievance Committee,

3. Times Infotainment Media Limited: Member of Loans and[Member of Audit Committee, Investment Committee].Member of Remuneration/Compensation Committee]. 3. Caprihans India Limited:

[Chairman of Audit Committee,Member of Shareholders�/Investors� GrievanceCommittee, Member ofRemuneration Committee].

4. Entertainment Network(India) Limited: [Member ofAudit Committee, Memberof Remuneration/Compensation Committee].


33

DIRECTORS� REPORT

Dear Members,

Your Directors have pleasure in presenting this Eighth Annual Report together with the Audited Accounts for the financial yearended March 31, 2007.

1.1.1.1.1. FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

Amount in RupeesAmount in RupeesAmount in RupeesAmount in RupeesAmount in Rupees

2006-20072006-20072006-20072006-20072006-2007 2005-2006

Income . . . . . . . . . . . . 1,705,251,1571,705,251,1571,705,251,1571,705,251,1571,705,251,157 1,187,630,791

Profit before Tax . . . . . . . . . . . . 277,837,426277,837,426277,837,426277,837,426277,837,426 232,129,116

Add: Exceptional Item. . . . . . . . . . . . �� 98,111,109

Less: Provision for TaxationCurrent Tax . . . . . . . . . . . . 30,500,00030,500,00030,500,00030,500,00030,500,000 28,007,917

Minimum Alternate Tax Credit Entitlement . . . . . . (30,500,000)(30,500,000)(30,500,000)(30,500,000)(30,500,000) �

Deferred Tax . . . . . . . . . . . . (23,709,216)(23,709,216)(23,709,216)(23,709,216)(23,709,216) �

Fringe Benefit Tax . . . . . . . . . . 10,700,00010,700,00010,700,00010,700,00010,700,000 7,500,000

Wealth Tax . . . . . . . . . . . . 57,26157,26157,26157,26157,261 40,000

Profit after Tax . . . . . . . . . . . . 290,789,381290,789,381290,789,381290,789,381290,789,381 294,692,308

Profit/(Loss) brought Forward . . . . . . . . 292,477,262292,477,262292,477,262292,477,262292,477,262 (1,019,767,046)

Equity . . . . . . . . . . . . 475,845,750475,845,750475,845,750475,845,750475,845,750 475,636,650

Transfer to General Reserve . . . . . . . . NILNILNILNILNIL NIL

Surplus carried to Balance Sheet . . . . . . . . 583,266,643583,266,643583,266,643583,266,643583,266,643 292,477,262

2.2.2.2.2. FINANCIAL PERFORMANCEFINANCIAL PERFORMANCEFINANCIAL PERFORMANCEFINANCIAL PERFORMANCEFINANCIAL PERFORMANCE

The year under review has been fulfilling for the Company. Total income has increased by about 43.59% from Rs. 1,187,630,791/-in the previous year to Rs. 1,705,251,157/- in the year under review, coupled with a profit after tax of Rs. 290,789,381/- asagainst profit of Rs. 294,692,308/- in the previous year.

3.3.3.3.3. OPERATIONSOPERATIONSOPERATIONSOPERATIONSOPERATIONS

During the year, the Company continued to maintain its leadership position in the markets in which it operates. TheCompany which has a national foot print and the largest number of nationwide listeners amongst private FM radiobroadcasters has further expanded its foot prints. The Company has bid successfully for licenses under Phase II of theExpansion of FM Radio Broadcasting services through Private Agencies (Phase II Policy) to operate radio stations in the citiesof Bangalore, Hyderabad, Patna, Jalandhar, Jaipur, Aurangabad, Bhopal, Coimbatore, Jabalpur, Kanpur, Kolhapur, Lucknow,Madurai, Mangalore, Nagpur, Nasik, Panaji, Raipur, Rajkot, Surat, Thriuvananthapuram, Vadodara, Varanasi, Vijaywada andVishakhpatnam. Out of the above, the Company successfully rolled out radio stations at Bangalore, Hyderabad, Jaipur, Patnaand Jullandhar upto May 16, 2007. The Company, continues to work towards developing radio as a category. The Company�soperations and financial consolidation and segment-wise performance together with discussion on financial performancewith respect to operational performance should be read in conjunction with the financial statements and the relatedfootnotes.

4.4.4.4.4. DIVIDENDDIVIDENDDIVIDENDDIVIDENDDIVIDEND

Directors do not recommend any dividend for the financial year 2006-2007 in order to conserve funds for the expansionplans under the Phase II.

5.5.5.5.5. FIXED DEPOSITSFIXED DEPOSITSFIXED DEPOSITSFIXED DEPOSITSFIXED DEPOSITS

The Company has not accepted any fixed deposits and hence, no amount of principal or interest was outstanding on thedate of the Balance Sheet.


34

6.6.6.6.6. DIRECTORSDIRECTORSDIRECTORSDIRECTORSDIRECTORS

During the year under review Mr. Vineet Jain and Mr. Ravindra Kulkarni were appointed as Additional Directors by theBoard of Directors on January 19, 2007, and they cease to hold office at the start of the ensuing Annual General Meeting.Notices have been received by the Company from the Members under Section 257 of the Companies Act, 1956 proposingthe appointment of Mr. Vineet Jain and Mr. Ravindra Kulkarni as Directors.

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association, Mr. Ravindra Dhariwalretires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

7.7.7.7.7. AUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEE

The Audit Committee of the Company was re-constituted and presently comprises of Mr. N. Kumar (Chairman), Mr.Ravindra Kulkarni and Mr. Ravindra Dhariwal. The Internal Auditors of the Company report directly to the Audit Committee.

8.8.8.8.8. AUDITORSAUDITORSAUDITORSAUDITORSAUDITORS

M/s. Price Waterhouse & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing AnnualGeneral Meeting. Members are requested to re-appoint M/s. Price Waterhouse & Co., Statutory Auditors for the currentfinancial year and fix their remuneration.

9.9.9.9.9. BUY- BACK OF SHARESBUY- BACK OF SHARESBUY- BACK OF SHARESBUY- BACK OF SHARESBUY- BACK OF SHARES

During the year under review the Company has not offered to buy-back any of its outstanding shares.

10.10.10.10.10. CONSERVATION OF ENERGYCONSERVATION OF ENERGYCONSERVATION OF ENERGYCONSERVATION OF ENERGYCONSERVATION OF ENERGY

The operations of the Company are not energy-intensive. The Company is conscious about its responsibility towards a safeand clean environment and continues to adhere to all regulatory requirements and guidelines. A conscious effort is beingmade by the Company and its employees in reducing the wastage of scarce energy resources.

11.11.11.11.11. FOREIGN EXCHANGE EARNINGS & OUTGOFOREIGN EXCHANGE EARNINGS & OUTGOFOREIGN EXCHANGE EARNINGS & OUTGOFOREIGN EXCHANGE EARNINGS & OUTGOFOREIGN EXCHANGE EARNINGS & OUTGO

Statement pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars inthe Report of Board of Directors) Rules, 1988:

Amount in Rupees (lacs)

2006-20072006-20072006-20072006-20072006-2007 2005-2006

Foreign exchange earnings . . . . . . . . 6.856.856.856.856.85 32.21

Foreign exchange outgo . . . . . . . . 72.2372.2372.2372.2372.23 17.96

12.12.12.12.12. TECHNOLOGICAL ABSORPTIONTECHNOLOGICAL ABSORPTIONTECHNOLOGICAL ABSORPTIONTECHNOLOGICAL ABSORPTIONTECHNOLOGICAL ABSORPTION

The Company has not absorbed any new technology during the year.

13.13.13.13.13. RESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENT

(a) Specific areas in which Research and Development is carried out by the Company None

(b) Benefits derived as a result of the above research and development N.A.

(c) Future plan of action N.A.

(d) Expenditure on Research and Development N.A.

14.14.14.14.14. PARTICULARS OF EMPLOYEESPARTICULARS OF EMPLOYEESPARTICULARS OF EMPLOYEESPARTICULARS OF EMPLOYEESPARTICULARS OF EMPLOYEES

Relations with the employees remained cordial in general throughout the year. The Company enjoys one of the lowestattrition rates in the private FM radio broadcasting industry. Particulars of the employees as required under the provisionsof Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 are set outin Annexure �A� forming part of this Report.

15.15.15.15.15. SHARE CAPITAL & LISTING OF SECURITIESSHARE CAPITAL & LISTING OF SECURITIESSHARE CAPITAL & LISTING OF SECURITIESSHARE CAPITAL & LISTING OF SECURITIESSHARE CAPITAL & LISTING OF SECURITIES

The equity shares of the Company are listed and admitted to dealings on Bombay Stock Exchange Limited (BSE) andNational Stock Exchange of India Limited (NSE) effective from February 15, 2006. Annual Listing Fee has been paid to eachof the exchanges.


35

20,910 and 35,960 fully paid up equity shares of the face value of Rs. 10/- each were issued and allotted on January 19,2007 and May 16, 2007 respectively, at a price of Rs. 90/- (Rupees ninety only) per share including securities premium ofRs. 80/- (Rupees eighty only) per share, for cash out of the un-issued share capital of the Company upon exercise of theOptions by the Option Grantees on terms and conditions as stipulated in Entertainment Network (India) Limited EmployeeStock Option Scheme (�ENIL- ESOS- 2005�) read with the Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, (�SEBI Guidelines�) and pursuant to Sections75 (1), 81 (1A), and other applicable provisions of the Companies Act, 1956. After the aforesaid issue and allotment, theissued, subscribed and paid share capital of the Company consequently has increased and stood at 47,620,535 equity sharesof the face value of Rs. 10/ -each.

16.16.16.16.16. EMPLOYEE STOCK OPTION SCHEMEEMPLOYEE STOCK OPTION SCHEMEEMPLOYEE STOCK OPTION SCHEMEEMPLOYEE STOCK OPTION SCHEMEEMPLOYEE STOCK OPTION SCHEMEAs stated in the last Annual Report for the year 2005- 2006, �Entertainment Network (India) Limited - Employee Stock OptionScheme� (hereinafter referred to as �ENIL ESOS-2005�) was implemented for the benefit of the present employees of theCompany, its holding company and its subsidiary (including Directors) in accordance with the SEBI Guidelines.Disclosure pursuant to clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme), Guidelines, 1999Details of the ENIL- ESOS- 2005:Details of the ENIL- ESOS- 2005:Details of the ENIL- ESOS- 2005:Details of the ENIL- ESOS- 2005:Details of the ENIL- ESOS- 2005:(a) Options granted: 109,360(b) The pricing formula: at an exercise price of Rs. 90/- each(c) Options vested as on the date of this report: 75,140 (net of lapse of 2,610 options)(d) Options exercised as on the date of this report: 56,870(e) The total number of equity shares arising as a result of exercise of option: maximum number of equity shares that can

arise, if all options are vested and exercised are 106,750 (total options granted 109,360 less no. of options lapsed2,610).

(f) Options lapsed: 2,610(g) Variation of terms of options: None(h) Money realized by exercise of options: Rs. 51,18,300/- (56,870 options exercised @ Rs. 90/- per options exercised)(i) Total number of options in force: 49,880 (total options granted 109,360 less no. of options lapsed 2,610 less no. of

options exercised 56,870)(j) Employee wise details of options granted to: [as detailed hereof]

(i)

Name of the Option GranteeName of the Option GranteeName of the Option GranteeName of the Option GranteeName of the Option Grantee Number ofNumber ofNumber ofNumber ofNumber of ValueValueValueValueValue Vesting ScheduleVesting ScheduleVesting ScheduleVesting ScheduleVesting ScheduleOptionsOptionsOptionsOptionsOptions

Mr. Prashant Panday 8,700 783,000 April 1, 2007.

Mr. Kaushik Ghosh 7,250 652,500 5,945 Options on November 15, 2006 and1,305 Options on April 1, 2007.

Mr. Tapas Sen 2,610 234,900 April 1, 2007.

Mr. Harvinderjit Singh Bhatia 2,610 234,900 April 1, 2007.

Mr. Farid Kureshi 9,310 837,900 2,350 Options on November 15, 2006 and6,960 on April 1, 2007.

Col. N. Thiagarajan 870 78,300 April 1, 2007.

Mr. S. Prasad 1,740 156,600 April 1, 2007.

Mr. Sameer Soni 4,350 391,500 April 1, 2007.

Mr. Nandan Srinath 4,350 391,500 April 1, 2007.

Mr. Alok Purohit 11,600 1,044,000 8,120 Options on November 15, 2006 and3,480 Options on April 1, 2007.


36

Mr. Sharath Chandra 7,250 652,500 2,900 Options on November 15, 2006 and4,350 Options on July 1, 2007.

Mr. Romen Sood 7,250 652,500 2,900 Options on November 15, 2006 and4,350 Options on July 1, 2007.

Mr. Gautam Shahane 11,600 1,044,000 8,120 Options on November 15, 2006 and3,480 Options on July 1, 2007.

Mr. Anil Fernandes 2,175 195,750 870 Options on November 15, 2006 and1,305 Options on July 1, 2007.

Mr. Hitesh Sharma 8,120 730,800 2,320 Options on November 15, 2006,2,320 Options on July 1, 2007 and3,480 Options on July 1, 2008.

Mr. Munish Purii 14,500 1,305,000 5,800 Options on April 1, 2007 and8,700 Options on April 1, 2008.

Mr. Ganesh Iyer 5,075 456,750 1,450 Options on November 15, 2006,1,450 Options on July 1, 2007 and2,175 Options on July 1, 2008.

(ii) Senior managerial personnel: All the above option grantees are senior managerial personnel of the Company, itsholding company or subsidiary.

(iii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option grantedduring that year. The list of employees receiving a grant in one year of option amounting to 5% or more of optiongranted during that year is as below;

Sr. No.Sr. No.Sr. No.Sr. No.Sr. No. Name of the EmployeeName of the EmployeeName of the EmployeeName of the EmployeeName of the Employee No. of options grantedNo. of options grantedNo. of options grantedNo. of options grantedNo. of options granted

1 Mr. Prashant Panday 8,700

2 Mr. Kaushik Ghosh 7,250

3 Mr. Farid Kureshi 9,310

4 Mr. Alok Purohit 11,600

5 Mr. Sharath Chandra 7,250

6 Mr. Romen Sood 7,250

7 Mr. Gautam Shahane 11,600

8 Mr. Hitesh Sharma 8,120

9 Mr. Munish Purii 14,500

(iv) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital(excluding outstanding warrants and conversions) of the company at the time of grant;None of the employees were granted option, during any one year, equal to or exceeding 1% of the issued capitalunder ENIL ESOS-2005.

(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance withAccounting Standard (AS) 20 �Earnings Per Share�:Kindly refer to the point no. 22 of the Schedule 18 to the financial accounts.

(l) Where the Company has calculated the employee compensation cost using the intrinsic value of the stock options, thedifference between the employee compensation cost so computed and the employee compensation cost that shall havebeen recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profitsand on EPS of the company shall also be disclosed.

Name of the Option Grantee Number of Value Vesting ScheduleOptions


37

The Company has calculated the employee compensation cost using the fair value of the stock options. Kindly refer tothe point no. 5 of the Schedule 18 to the financial accounts.

(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for optionswhose exercise price either equals or exceeds or is less than the market price of the stock.

The options are exercisable at Rs. 90/- per equity share including a premium of Rs. 80/- per share.

Tranches of Stock OptionsTranches of Stock OptionsTranches of Stock OptionsTranches of Stock OptionsTranches of Stock Options Fair Valuation of the OptionsFair Valuation of the OptionsFair Valuation of the OptionsFair Valuation of the OptionsFair Valuation of the Options No. of OptionsNo. of OptionsNo. of OptionsNo. of OptionsNo. of Options

Tranche � I Rs.95.25 34,975

Tranche � II Rs.98.40 42,775

Tranche � III Rs.100.36 17,255

Tranche � IV Rs.105.67 8,700

Tranche � V Rs.107.30 5,655

TotalTotalTotalTotalTotal 1,09,3601,09,3601,09,3601,09,3601,09,360

(n) A description of the method and significant assumptions used during the year to estimate the fair values of options,including the following weighted-average information:

The Company has used Black-Scholes theory of valuation for arriving at an indicative valuation of the stock option.

The factors affecting the value of an option were:

� the underlying value of the asset;

� the exercise price;

� the expected life

� the time to expiration;

� the expected volatility of the underlying asset;

� the risk-free interest rate; and

� dividend expected during the life of the option (if any).

17.17.17.17.17. CORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCE

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance, in terms of Clause49 to the Listing Agreements with the Stock Exchanges, are complied with.

A separate report on Corporate Governance is enclosed as a part of the Annual Report along with a certificate from thePracticing Company Secretary certifying compliance of the conditions of Corporate Governance, which is annexed to theDirectors� Report.

18.18.18.18.18. DIRECTORS� RESPONSIBILITY STATEMENTDIRECTORS� RESPONSIBILITY STATEMENTDIRECTORS� RESPONSIBILITY STATEMENTDIRECTORS� RESPONSIBILITY STATEMENTDIRECTORS� RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors, based on therepresentations received from the Operating Management, hereby confirms that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there areno material departures;

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has applied the suggestedaccounting policies consistently and made judgments and estimates that are reasonable and prudent, so as to give atrue and fair view of the state of affairs of the Company as at March 31, 2007 and of the profit of the Company forthat period;

iii. It has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities, to the best of its knowledge and ability. There are however, inherent limitations, which should berecognized while relying on any system of internal control and records;

iv. It has prepared the annual accounts on a going concern basis.


38

19.19.19.19.19. SUBSIDIARY COMPANIESSUBSIDIARY COMPANIESSUBSIDIARY COMPANIESSUBSIDIARY COMPANIESSUBSIDIARY COMPANIES

Times Innovative Media Limited, the wholly owned subsidiary of the Company, is engaged in the out-of-home media andevent management business.

Pursuant to fresh certificate of incorporation issued by the Registrar of Companies, Maharashtra, the name of TimesInnovative Media Private Limited stands changed to Times Innovative Media Limited, effective from March 15, 2007,consequent upon its conversion to public limited company, in accordance with the provisions of the Companies Act, 1956.

As required under Section 212 of the Companies Act, 1956, the financial statements of subsidiary company are annexed tothis report.

20.20.20.20.20. CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTS

As required by Accounting Standard 21 on �Consolidated Financial Statements�, issued by the Institute of CharteredAccountants of India, the audited Consolidated Financial Statements are annexed to this report.

21.21.21.21.21. ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:

Your Directors take this opportunity to thank the Company�s Members, listeners, advertisers, media agencies, bankers,regulatory and governmental authorities for their continued support. Your Directors place on record their appreciation ofthe contribution made by employees at all levels through their hard work, dedication and acknowledge that their supporthas enabled the Company to achieve consistent growth.

For and on behalf of the Board of Directors,

Vineet JainVineet JainVineet JainVineet JainVineet Jain A. P. ParigiA. P. ParigiA. P. ParigiA. P. ParigiA. P. ParigiChairman Managing Director & CEO

Mumbai, May 16, 2007

Registered Office:Registered Office:Registered Office:Registered Office:Registered Office:Matulya Centre, 4th Floor, A � Wing,Senapati Bapat Marg, Lower Parel (West),Mumbai - 400 013.

AUDITORS� CERTIFICATEAUDITORS� CERTIFICATEAUDITORS� CERTIFICATEAUDITORS� CERTIFICATEAUDITORS� CERTIFICATE ON EMPLOYEE STOCK OPTION SCHEMEON EMPLOYEE STOCK OPTION SCHEMEON EMPLOYEE STOCK OPTION SCHEMEON EMPLOYEE STOCK OPTION SCHEMEON EMPLOYEE STOCK OPTION SCHEME

We have examined the books of account and other records maintained by Entertainment Network (India) Limited (the Company)for the year ended March 31, 2007 and on the basis of such examination and according to the information, explanations andrepresentations given to us, we confirm that Entertainment Network (India) Limited Employee Stock Option Scheme ( ENIL-ESOS - 2005) has been implemented in accordance with the �Securities and Exchange Board of India (Employee Stock OptionScheme and Employee Stock Purchase Scheme) Guidelines, 1999� to the extent applicable and in accordance with the Resolutionpassed in the Extra Ordinary General Meeting of the Company held on 5th November, 2005.

Partha GhoshPartner

Membership No. 55913

For and on behalf ofPrice Waterhouse & Co.Chartered Accountants

Mumbai, dated May 16, 2007


39

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40

REPORT ON CORPORATE GOVERNANCE

Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed,administered, managed or controlled. In this dynamic economic environment, shareholders across the globe evince keen interestin the performance of the Companies and thus good corporate governance is of paramount importance for companies seeking todistinguish themselves from the others.

The equity shares of the Company are listed and admitted to dealings on the Bombay Stock Exchange Limited (BSE) and theNational Stock Exchange of India Limited (NSE) since February 15, 2006. Pursuant the provisions of the Clause 49 of the ListingAgreement and the best practices followed internationally; a report on Corporate Governance for the financial year endedMarch 31, 2007, is given below:

1.1.1.1.1. COMPANY�S PHILOSOPHY ON CODE OF GOVERNANCECOMPANY�S PHILOSOPHY ON CODE OF GOVERNANCECOMPANY�S PHILOSOPHY ON CODE OF GOVERNANCECOMPANY�S PHILOSOPHY ON CODE OF GOVERNANCECOMPANY�S PHILOSOPHY ON CODE OF GOVERNANCE

The Company�s philosophy on Corporate Governance is founded upon a rich legacy of integrity, fairness, transparency,equity and accountability. We believe that good Corporate Governance practices should be enshrined in all the operationsand functioning of the Company and thus pivotal to enhance and retain investors� trust. The Company is committed toadhering to good corporate governance practices and thus recognises it as a key driver to sustainable growth and long termvalue creation. The Company�s philosophy on Corporate Governance envisages attainment of highest level of integrity,fairness, transparency, equity and accountability in all facets of its functioning and in its interactions with shareholders,employees, government, regulatory bodies, listeners and the community at large. Our disclosures always seek to attain bestcorporate governance practices. The Company continuously strives towards putting in place the best practices in everysphere of its operations.

In compliance with the regulatory requirements and in order to ensure the implementation of the best internationalpractices of corporate governance, the Company has adopted the following codes of governance in accordance with theapplicable regulations of Securities and Exchange Board of India:-

� Code of Conduct for Prevention of Insider Trading; for regulating the dealings of the Directors and Employees of theCompany possessing or likely to possess price sensitive information, in the Securities of the Company;

� Code of Corporate Disclosure Practices; for ensuring timely and adequate disclosure of price sensitive information;

� Code of Ethics and Business Principles for Directors and Employees under the SEBI (Prohibition of Insider Trading)Regulation.

The Company�s philosophy of Corporate Governance incorporates highest level of transparency and disclosures, sound boardpractices, interactive decision making process and thus is not only consistent with the statutory requirement but alsounderline our commitment to operate in the best interest of the stakeholders.

2.2.2.2.2. BOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORS

(i)(i)(i)(i)(i) Composition of the Board of Directors and other directorships and committee membership of the Directors:Composition of the Board of Directors and other directorships and committee membership of the Directors:Composition of the Board of Directors and other directorships and committee membership of the Directors:Composition of the Board of Directors and other directorships and committee membership of the Directors:Composition of the Board of Directors and other directorships and committee membership of the Directors:

The Company believes that an active, well-informed and independent Board is vital to achieve the apex standard ofcorporate governance and thus it always endeavours to have an optimal mix of executive, non-executive and independentdirectors to preserve and maintain the independence of the Board. The Board of Directors has elected a Non-ExecutiveChairman. The Board of Directors comprises of eminent persons with professional experience in varied fields andcomprises a majority of Non-Executive Directors. The composition of the Board of Directors is in accordance with therequirements of the Clause 49 of the Listing Agreement, Companies Act, 1956, and the Articles of Association of theCompany.


41

The composition of the Board of Directors, attendance at Board Meetings (BM) held during the financial year2006-2007 and at the last Annual General Meeting (AGM), number of directorships, memberships/chairmanships inpublic companies are as below:

Name of the Director Category Financial Year2006-07 As on date of this reportAttendance at

BM Last AGM No. of Other Committeeother positions #Director-ships # Member Chairman

Mr. Vineet Jain* Non-Executive Chairman N.A. N.A. 8 1 Nil

Mr. Deepak M.Satwalekar Independent Non-Executive 4 Yes 5 1 2

Mr. N. Kumar Independent Non-Executive 4 Yes 8 1 1

Ms. Rama Bijapurkar Independent Non-Executive 4 Yes 6 2 1

Mr. Ravindra Dhariwal Non-Executive 3 Yes 6 2 Nil

Mr. Ravindra Kulkarni* Independent Non-Executive N.A. N.A. 5 4 2

Mr. A. P. Parigi Executive- Managing Director & 4 Yes 7 3 NilChief Executive Officer

* appointed as Additional Director with effect from January 19, 2007.

# For the purpose of considering the number of other directorships and committee positions, all public limitedcompanies, whether listed or not, have been included and all other companies including private limited companies,foreign companies and companies under Section 25 of the Companies Act, 1956 have been excluded and Committeesother than Audit Committee, Shareholders�/Investors� Grievance Committee have been excluded.

(ii)(ii)(ii)(ii)(ii) Board Meetings and AGM held:Board Meetings and AGM held:Board Meetings and AGM held:Board Meetings and AGM held:Board Meetings and AGM held:

Four Meetings were held during the financial year under review, the dates of which were;

April 20, 2006 October 31, 2006

July 27, 2006 January 19, 2007

The Seventh Annual General Meeting (�AGM�) was held on July 27, 2006.

3.3.3.3.3. AUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEEAUDIT COMMITTEE

(i)(i)(i)(i)(i) Brief description of terms of reference:Brief description of terms of reference:Brief description of terms of reference:Brief description of terms of reference:Brief description of terms of reference:

The Company recognizes that the Audit Committee is indispensable for ensuring accountability amongst the Board,Management and the Auditors, who are responsible for sound and transparent financial reporting. The primary objectiveof the Audit Committee of the Company is to monitor and effectively supervise the financial reporting process of theCompany with a view to ensure accurate, timely and proper disclosures and integrity of financial reporting.

The role and terms of reference of the Audit Committee inter- alia include review of internal audit reports, review offinancial statements, both quarterly and annual, before submission to the Board, review of Management Discussionand Analysis of financial condition and results of operations and review of performance of statutory and internalauditors and adequacy of internal control systems and other matters in conformity with the requirements of the ListingAgreement entered into with the Stock Exchanges and the provisions of the Companies Act, 1956 and the amendmentsthereto.

(ii)(ii)(ii)(ii)(ii) Composition of the Audit Committee:Composition of the Audit Committee:Composition of the Audit Committee:Composition of the Audit Committee:Composition of the Audit Committee:

The Audit Committee of the Company is constituted in compliance with the provisions of Clause 49 of the ListingAgreement read with Section 292A of the Companies Act, 1956. Mr. Ravindra Kulkarni was appointed as a member of


42

the Audit Committee on January 19, 2007 and Ms. Rama Bijapurkar stepped down from the Audit Committee on thesame date.

The Audit Committee comprises of the following Non-Executive Directors, two-thirds of whom are IndependentDirectors:

Mr. N. Kumar � Chairman (Independent Non-Executive Director)

Mr. Ravindra Kulkarni (Independent Non-Executive Director)

Mr. Ravindra Dhariwal (Non-Executive Director)

(iii)(iii)(iii)(iii)(iii) Meetings and attendance during the year:Meetings and attendance during the year:Meetings and attendance during the year:Meetings and attendance during the year:Meetings and attendance during the year:

During the financial year under review, the Audit Committee met four times, i.e. on April 20, 2006; July 27, 2006;October 31, 2006 and January 19, 2007. Details of attendance of each member are as follows:

NameNameNameNameName Number of Audit CommitteeNumber of Audit CommitteeNumber of Audit CommitteeNumber of Audit CommitteeNumber of Audit Committeemeetings attendedmeetings attendedmeetings attendedmeetings attendedmeetings attended

Mr. N. Kumar 4

Ms. Rama Bijapurkar * 4

Mr. Ravindra Kulkarni ** N.A.

Mr. Ravindra Dhariwal 3

* Ceased to be a member from January 19, 2007.** Appointed as a member with effect from January 19, 2007.

4.4.4.4.4. REMUNERATION / COMPENSATION COMMITTEEREMUNERATION / COMPENSATION COMMITTEEREMUNERATION / COMPENSATION COMMITTEEREMUNERATION / COMPENSATION COMMITTEEREMUNERATION / COMPENSATION COMMITTEE

(i)(i)(i)(i)(i) Brief description of terms of reference:Brief description of terms of reference:Brief description of terms of reference:Brief description of terms of reference:Brief description of terms of reference:

The Remuneration/ Compensation Committee has been constituted to review and recommend the remuneration payableto the executive directors and senior management of the Company based on their performance and defined assessmentcriteria.

Brief terms of reference of the Remuneration/ Compensation Committee include:

� Determining the Company�s policy on specific remuneration packages for the Company�s Managing/Joint Managing/Deputy Managing/ Whole time/ Executive Directors, including pension rights and any compensation, payment;

� Determining and / or recommending to the Board of Directors, the remuneration packages of the Company�sManaging/Joint Managing/ Deputy Managing/Whole time / Executive Directors, including all elements of theremuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension,retirement benefits, details of fixed component and performance linked incentives along with the performancecriteria, service contracts, notice period, severance fees etc.);

� Reviewing and determining the remuneration packages of the Company�s top executives/ key management personnelwho are one level below the Managing/Joint Managing / Deputy Managing/Whole time/ Executive Directors,including all elements of their remuneration package (i.e. salary, benefits, bonuses, perquisites, commission,incentives, stock options, pension, retirement benefits, details of fixed component and performance linked incentivesalong with the performance criteria, service contracts, notice period, severance fees etc.).

� Implementing, supervising and administering the present and future Employee Stock Option Scheme(s);

� any other matter specified under the applicable provisions of the Companies Act, 1956, read with the Clause 49 ofthe Listing Agreement.

(ii)(ii)(ii)(ii)(ii) Composition, name of members and Chairperson:Composition, name of members and Chairperson:Composition, name of members and Chairperson:Composition, name of members and Chairperson:Composition, name of members and Chairperson:

The Remuneration/ Compensation Committee of the Company is constituted pursuant to applicable provisions of theCompanies Act, 1956, read with the Clause 49 of the Listing Agreement. The Remuneration/ Compensation Committeecomprises of the following non executive directors and the Chairman of the committee is an independent director.


43

The Remuneration / Compensation Committee comprises of the following Directors:�

Mr. Deepak M. Satwalekar - Chairman (Independent Non-Executive Director)

Mr. N. Kumar (Independent Non-Executive Director)

Mr. Ravindra Kulkarni (Independent Non-Executive Director)

Mr. Ravindra Dhariwal (Non-Executive Director)

(iii)(iii)(iii)(iii)(iii) Attendance during the year:Attendance during the year:Attendance during the year:Attendance during the year:Attendance during the year:During the financial year under review, the Remuneration / Compensation Committee met two times, i.e. on April 20,and January 19, 2007. Details of attendance of each member are as follows:

NameNameNameNameName Number of Remuneration / CompensationNumber of Remuneration / CompensationNumber of Remuneration / CompensationNumber of Remuneration / CompensationNumber of Remuneration / CompensationCommittee Meeting attendedCommittee Meeting attendedCommittee Meeting attendedCommittee Meeting attendedCommittee Meeting attended

Mr. Deepak M. Satwalekar 2

Mr. N. Kumar 2

Mr. Ravindra Dhariwal 2

Mr. Ravindra Kulkarni* N.A.

* Appointed as a member with effect from May 16, 2007.(iv)(iv)(iv)(iv)(iv) Remuneration policy:Remuneration policy:Remuneration policy:Remuneration policy:Remuneration policy:

The remuneration policy of the Company is based upon well defined criteria such as success and performance of itsmanagerial persons and the Company. Through its remuneration policy, the Company endeavors to attract, retain,develop and motivate its highly skilled and dedicated workforce.Payment of remuneration to the Managing Director is governed by the resolution passed by the Remuneration/Compensation Committee, Board of Directors and Members of the Company and subject to the subsequent approvalfrom the Government of India, Ministry of Corporate Affairs, where necessary. The remuneration structure comprisessalary, incentive allowance, perquisites and allowance, contribution to provident fund and superannuation. The Non-Executive Directors did not draw any remuneration or fees for attending any meetings from the Company during thefinancial year under report.

(v)(v)(v)(v)(v) Details of remuneration:Details of remuneration:Details of remuneration:Details of remuneration:Details of remuneration:(a)(a)(a)(a)(a) Details of remuneration paid to the Managing Director during the year 2006-2007 is given below:Details of remuneration paid to the Managing Director during the year 2006-2007 is given below:Details of remuneration paid to the Managing Director during the year 2006-2007 is given below:Details of remuneration paid to the Managing Director during the year 2006-2007 is given below:Details of remuneration paid to the Managing Director during the year 2006-2007 is given below:

(In Rupees)

NameNameNameNameName SalarySalarySalarySalarySalary Benefits *Benefits *Benefits *Benefits *Benefits * Performance Bonus #Performance Bonus #Performance Bonus #Performance Bonus #Performance Bonus # TotalTotalTotalTotalTotal

Mr. A. P. Parigi 76,06,266 39,88,710 25,00,000 1,40,94,976

* Also includes Company�s contribution to Provident and Superannuation Funds.

# Shown on the basis of year of payment and includes incentive payment.

Notes:

� The appointment and remuneration of Mr. A. P. Parigi, Managing Director was effected by way of passingresolution by the Remuneration/ Compensation Committee and the Board of Directors of the Company, onJune 24, 2005, followed by the resolution passed by the Members of the Company, on August 26, 2005, as perapplicable provisions of the Companies Act, 1956.

� The said appointment is terminable on six months� notice from either side or payment in lieu of notice period.

� Due to loss/ inadequacy of profit of the Company, the Company had sought permission from the Governmentof India, Ministry of Company Affairs for payment of remuneration to Mr. A. P. Parigi in excess of the limitsprescribed under Schedule XIII of the Companies Act, 1956. Pursuant to the provisions of Section 198(4) ofthe Companies Act, the Government of India, Ministry of Company Affairs vide their approval letter datedFebruary 1, 2006, approved the appointment of Mr. A. P. Parigi as Managing Director of the Company for aperiod from August 1, 2005 to July 31, 2009, at a remuneration of Rs. 1,45,81,600/- (Rupees one crore fortyfive lacs eighty one thousand and six hundred only) per annum.


44

� Presently the Company has a scheme for grant of stock options Entertainment Network (India) LimitedEmployee Stock Option Scheme ( ENIL- ESOS - 2005) and no option was granted to any director of theCompany.

� Mr. A. P. Parigi, Managing Director is holding 2,81,500 equity shares of the Company as on May 16, 2007.

(b)(b)(b)(b)(b) Criteria for making payments to non-executive directors:Criteria for making payments to non-executive directors:Criteria for making payments to non-executive directors:Criteria for making payments to non-executive directors:Criteria for making payments to non-executive directors:

Non-Executive Directors were not paid any sitting fees, commission or remuneration during the financial year2006-07. At the meeting of the Board of Directors held on January 19, 2007, consent of the Board of Directorswas accorded to the fees payable to the Directors of the Company (other than whole-time/ Managing Director)(hereinafter referred to as �the Sitting Fees�) of a sum of Rs. 10,000/- (Rupees ten thousand only) per director,subject to deduction of applicable taxes, levies etc., if any, per meeting for attending;

� Meeting of the Board of Directors,

� Meeting of the Audit Committee and

� Meeting of the Remuneration/ Compensation Committee.

(c)(c)(c)(c)(c) Number of shares and convertible instruments held by non-executive directors as on May 16, 2007 is as below:

Sl. No.Sl. No.Sl. No.Sl. No.Sl. No. Name of the DirectorName of the DirectorName of the DirectorName of the DirectorName of the Director No. of equity shares heldNo. of equity shares heldNo. of equity shares heldNo. of equity shares heldNo. of equity shares held

1. Mr. Vineet Jain NIL

2. Ms. Rama Bijapurkar NIL

3. Mr. N. Kumar 5,580

4. Mr. Deepak M. Satwalekar 5,580

5. Mr. Ravindra Kulkarni NIL

6. Mr. Ravindra Dhariwal NIL

5.5.5.5.5. SHAREHOLDERS� / INVESTORS� GRIEVANCE COMMITTEESHAREHOLDERS� / INVESTORS� GRIEVANCE COMMITTEESHAREHOLDERS� / INVESTORS� GRIEVANCE COMMITTEESHAREHOLDERS� / INVESTORS� GRIEVANCE COMMITTEESHAREHOLDERS� / INVESTORS� GRIEVANCE COMMITTEE

(i)(i)(i)(i)(i) Constitution of the Committee:Constitution of the Committee:Constitution of the Committee:Constitution of the Committee:Constitution of the Committee:

The Company has always valued its investors and stakeholders relationships. In order to ensure the proper and speedyredressal of shareholders�/ investors� complaints, the Shareholders�/ Investors� Grievances Committee was re-constituted.

The Shareholders�/ Investors� Grievances Committee is headed by a non-executive director, and comprises of thefollowing directors:

Mr. Ravindra Dhariwal - Chairman

Mr. A. P. Parigi

(ii)(ii)(ii)(ii)(ii) Name and designation of Compliance Officer:Name and designation of Compliance Officer:Name and designation of Compliance Officer:Name and designation of Compliance Officer:Name and designation of Compliance Officer:

Mr. Anil Fernandes, Sr. Vice President - Legal & Company Secretary is the Compliance Officer.

(iii)(iii)(iii)(iii)(iii) Shareholders� complaints:Shareholders� complaints:Shareholders� complaints:Shareholders� complaints:Shareholders� complaints:

Number of shareholders� complaints received during the financial year 643

Number of complaints not resolved to the satisfaction of shareholders as on March 31, 2007 Nil

No. of pending complaints Nil


45

(iv)(iv)(iv)(iv)(iv) Terms of reference of the Committee:Terms of reference of the Committee:Terms of reference of the Committee:Terms of reference of the Committee:Terms of reference of the Committee:

The constitution and terms of reference of the Shareholders�/ Investors� Grievance Committee is in accordance with therequirements prescribed under Clause 49 of the Listing Agreement entered into with the Stock Exchanges.

6.6.6.6.6. GENERAL BODY MEETINGSGENERAL BODY MEETINGSGENERAL BODY MEETINGSGENERAL BODY MEETINGSGENERAL BODY MEETINGS

(i)(i)(i)(i)(i) Location and time, where last 3 years� General Meetings were held:Location and time, where last 3 years� General Meetings were held:Location and time, where last 3 years� General Meetings were held:Location and time, where last 3 years� General Meetings were held:Location and time, where last 3 years� General Meetings were held:

The details of the Annual General Meeting held during the last three years are as follows:

DateDateDateDateDate LocationLocationLocationLocationLocation TimeTimeTimeTimeTime

July 27, 2006 (Seventh AGM) Patkar Hall, Nathibai Thackersey Road, 4.00 p.m.New Marine Lines, Mumbai � 400 020.

August 26, 2005 (Sixth AGM) Ground Floor, Trade Gardens, 10.00 a.m.Kamala Mills Compound,Lower Parel (West),Mumbai � 400 013.

September 27, 2004 (Fifth AGM) 4th Floor, Matulya Centre, A Wing, 4.00 p.m.Lower Parel (West), Mumbai � 400 013.

(ii)(ii)(ii)(ii)(ii) Whether any special resolutions passed in the previous 3 AGMs: Whether any special resolutions passed in the previous 3 AGMs: Whether any special resolutions passed in the previous 3 AGMs: Whether any special resolutions passed in the previous 3 AGMs: Whether any special resolutions passed in the previous 3 AGMs: Yes

Special Resolutions passed in the previous three Annual General Meetings are as follows:

Annual General Meetings held on July 27, 2006Annual General Meetings held on July 27, 2006Annual General Meetings held on July 27, 2006Annual General Meetings held on July 27, 2006Annual General Meetings held on July 27, 2006

� To keep the Register of Members, the Index of Members, the Register and Index of Debenture holders, copies ofAnnual Return, and other statutory records and reports at the corporate office of the Company pursuant to section163 of the Companies Act, 1956.

� To enable payment of commission to non executive directors of the Company pursuant to section 309 of theCompanies Act, 1956.

Annual General Meeting held on August 26, 2005Annual General Meeting held on August 26, 2005Annual General Meeting held on August 26, 2005Annual General Meeting held on August 26, 2005Annual General Meeting held on August 26, 2005

� To re-appoint Mr. A. P. Parigi as the Managing Director for a further period of four years commencing from August1, 2005 under Sections 198, 269, 309, 310 and Schedule XIII of the Companies Act, 1956;

� To obtain consent of the Company to make investment of the surplus funds of the Company in various financialinstruments under Section 372A of the Companies Act, 1956.

Annual General Meeting held on September 27, 2004Annual General Meeting held on September 27, 2004Annual General Meeting held on September 27, 2004Annual General Meeting held on September 27, 2004Annual General Meeting held on September 27, 2004

� No special resolution was passed by the Members during the aforesaid AGM.

(iii)(iii)(iii)(iii)(iii) Whether any special resolution passed last year through postal ballotWhether any special resolution passed last year through postal ballotWhether any special resolution passed last year through postal ballotWhether any special resolution passed last year through postal ballotWhether any special resolution passed last year through postal ballot: No.

(iv)(iv)(iv)(iv)(iv) Person who conducted the postal ballot exercisePerson who conducted the postal ballot exercisePerson who conducted the postal ballot exercisePerson who conducted the postal ballot exercisePerson who conducted the postal ballot exercise: N.A.

(v)(v)(v)(v)(v) Whether any special resolution is proposed to be conducted through postal ballotWhether any special resolution is proposed to be conducted through postal ballotWhether any special resolution is proposed to be conducted through postal ballotWhether any special resolution is proposed to be conducted through postal ballotWhether any special resolution is proposed to be conducted through postal ballot: No.

(vi)(vi)(vi)(vi)(vi) Procedure for postal ballotProcedure for postal ballotProcedure for postal ballotProcedure for postal ballotProcedure for postal ballot.

The Company will comply with the requirements of postal ballot as and when such matter arises requiring approval ofthe Members by such process as per Section 192A and other applicable provisions of the Companies Act, 1956, readwith the Companies (Passing of Resolution by Postal Ballot) Rules, 2001.

7.7.7.7.7. OTHER DISCLOSURESOTHER DISCLOSURESOTHER DISCLOSURESOTHER DISCLOSURESOTHER DISCLOSURES

(i)(i)(i)(i)(i) Disclosures on materially significant related party transactions that may have potential conflict with the interests ofDisclosures on materially significant related party transactions that may have potential conflict with the interests ofDisclosures on materially significant related party transactions that may have potential conflict with the interests ofDisclosures on materially significant related party transactions that may have potential conflict with the interests ofDisclosures on materially significant related party transactions that may have potential conflict with the interests ofCompany at large:Company at large:Company at large:Company at large:Company at large:

During the year under review, there were no materially significant related party transactions with the Promoters,Directors etc. that may have potential conflict with the interests of Company at large.


46

(ii)(ii)(ii)(ii)(ii) Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBIDetails of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBIDetails of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBIDetails of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBIDetails of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBIor any statutory authority, on any matter related to capital markets, during the last three years:or any statutory authority, on any matter related to capital markets, during the last three years:or any statutory authority, on any matter related to capital markets, during the last three years:or any statutory authority, on any matter related to capital markets, during the last three years:or any statutory authority, on any matter related to capital markets, during the last three years:

There has been no non-compliance of any legal requirements nor have there been any strictures imposed on theCompany by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during thelast three years.

(iii)(iii)(iii)(iii)(iii) Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee:

The Board of Director affirm and confirm that no personnel has been denied access to the Audit Committee. However,a formal Whistle Blower policy is not in place.

(iv)(iv)(iv)(iv)(iv) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause:Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause:Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause:Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause:Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause:

The Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement with the StockExchanges. Compliance/ non- compliance of the non-mandatory requirements of this clause has been detailed hereof.

8.8.8.8.8. MEANS OF COMMUNICATIONMEANS OF COMMUNICATIONMEANS OF COMMUNICATIONMEANS OF COMMUNICATIONMEANS OF COMMUNICATION

(i)(i)(i)(i)(i) Quarterly/ Half yearly/ Annual results are regularly submitted to the Stock Exchanges where the securities of theCompany are listed pursuant to the provisions of Listing Agreement and are published in the newspapers. The Companyalso displayed the financial results as specified under Clause 41 of the Listing Agreement on the Electronic DataInformation Filing and Retrieval (EDIFAR) of SEBI (http://sebiedifar.nic.in) as well as on the Company�s web sitewww.enil.co.in.

(ii)(ii)(ii)(ii)(ii) Newspaper wherein results are normally published:

Financial Express (English) and Maharashtra Times (Marathi, the regional language).

(iii)(iii)(iii)(iii)(iii) Any Website, where displayed :

www.enil.co.inwww.enil.co.inwww.enil.co.inwww.enil.co.inwww.enil.co.in and as per the Listing Agreement, the quarterly results are also displayed on EDIFAR website launchedby SEBI. The url of the website is http://sebiedifar.nic.in.

(iv)(iv)(iv)(iv)(iv) Whether Website also displays official news releases:

Yes, at the Company�s website i.e. www.enil.co.inwww.enil.co.inwww.enil.co.inwww.enil.co.inwww.enil.co.in

(v)(v)(v)(v)(v) Whether presentations made to institutional investors or to the analysts : Yes

9.9.9.9.9. GENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATION

(i)(i)(i)(i)(i) Annual General Meeting (AGM) :Annual General Meeting (AGM) :Annual General Meeting (AGM) :Annual General Meeting (AGM) :Annual General Meeting (AGM) :

Will be intimated in due course.

(ii)(ii)(ii)(ii)(ii) Financial year: Financial year: Financial year: Financial year: Financial year: April 1, 2006 to March 31, 2007.

(iii)(iii)(iii)(iii)(iii) Date of book closure:Date of book closure:Date of book closure:Date of book closure:Date of book closure: Will be intimated in due course

(iv)(iv)(iv)(iv)(iv) Dividend Payment Date: Dividend Payment Date: Dividend Payment Date: Dividend Payment Date: Dividend Payment Date: Not Applicable

(v)(v)(v)(v)(v) Listing on Stock Exchange: Listing on Stock Exchange: Listing on Stock Exchange: Listing on Stock Exchange: Listing on Stock Exchange: The Company�s shares are listed on the Bombay Stock Exchange Limited (BSE) and theNational Stock Exchange of India Limited (NSE).

The Company has paid the annual listing fees for the financial year 2007-08, as applicable, to BSE and NSE.

(vi)(vi)(vi)(vi)(vi) Stock code :Stock code :Stock code :Stock code :Stock code :

BSE Scrip Code 532700

NSE Trading Symbol ENIL

ISIN Number for NSDL & CDSL INE265F01028


47

(vii)(vii)(vii)(vii)(vii) Market Price Data : High, Low during each month in last financial year*Market Price Data : High, Low during each month in last financial year*Market Price Data : High, Low during each month in last financial year*Market Price Data : High, Low during each month in last financial year*Market Price Data : High, Low during each month in last financial year*

The performance of the equity shares of the Company on the Bombay Stock Exchange Limited (BSE) and the NationalStock Exchange of India Limited (NSE) depicting the liquidity of the Company�s equity shares for the year ended March31, 2007 on the said exchanges, is given hereunder:-

Stock market data � (BSE)Stock market data � (BSE)Stock market data � (BSE)Stock market data � (BSE)Stock market data � (BSE)

MonthMonthMonthMonthMonth OpenOpenOpenOpenOpen HighHighHighHighHigh LowLowLowLowLow CloseCloseCloseCloseClose No. ofNo. ofNo. ofNo. ofNo. of Net T/ONet T/ONet T/ONet T/ONet T/O(Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) SharesSharesSharesSharesShares (Rs.)(Rs.)(Rs.)(Rs.)(Rs.)

April 2006 221.00 276.90 199.00 265.15 2718862 690,701,019

May 2006 262.00 284.80 200.10 216.65 750466 190,673,294

June 2006 225.50 226.00 161.00 191.75 233995 44,092,949

July 2006 194.90 204.95 175.00 194.60 105997 20,104,905

August 2006 192.00 252.90 183.00 239.95 559861 132,147,819

September 2006 238.10 263.75 220.00 244.70 411429 101,700,583

October 2006 245.10 256.00 215.10 240.60 161128 38,803,821

November 2006 240.25 263.40 212.80 237.60 718634 173,611,660

December 2006 244.00 277.05 217.10 263.70 975041 246,514,721

January 2007 265.95 332.00 255.00 277.25 1116183 323,680,095

February 2007 277.50 354.90 277.50 310.45 1377673 444,998,260

March 2007 310.00 354.00 250.00 331.40 326140 104,530,805

Stock market data � (NSE)Stock market data � (NSE)Stock market data � (NSE)Stock market data � (NSE)Stock market data � (NSE)

MonthMonthMonthMonthMonth OpenOpenOpenOpenOpen HighHighHighHighHigh LowLowLowLowLow CloseCloseCloseCloseClose No. ofNo. ofNo. ofNo. ofNo. of Net T/ONet T/ONet T/ONet T/ONet T/O(Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) (Rs.)(Rs.)(Rs.)(Rs.)(Rs.) SharesSharesSharesSharesShares (Rs.)(Rs.)(Rs.)(Rs.)(Rs.)

April 2006 221.50 277.05 197.00 265.05 4059775 1,026,630,280

May 2006 260.10 283.80 202.00 217.30 1253222 320,648,725

June 2006 220.50 225.00 160.15 191.85 498324 94,938,714

July 2006 192.00 220.00 178.05 196.05 203200 38,699,423

August 2006 195.00 253.00 184.30 239.95 878062 204,984,711

September 2006 241.00 263.95 216.00 245.00 623684 153,842,667

October 2006 248.00 254.40 219.50 242.10 250513 60,446,328

November 2006 240.50 263.90 211.00 238.60 1246158 303,195,875

December 2006 240.00 280.00 216.00 263.15 1860767 465,255,974

January 2007 257.55 325.00 235.00 277.40 1468125 426,046,220

February 2007 271.05 354.90 267.25 309.35 2184279 707,188,802

March 2007 280.00 360.00 280.00 330.60 560020 179,369,844

* Data based on BSE and NSE website.


48

(viii)(viii)(viii)(viii)(viii) Stock Performance:Stock Performance:Stock Performance:Stock Performance:Stock Performance:

(ix)(ix)(ix)(ix)(ix) Registrar and Transfer AgentsRegistrar and Transfer AgentsRegistrar and Transfer AgentsRegistrar and Transfer AgentsRegistrar and Transfer Agents (R & TA) :(R & TA) :(R & TA) :(R & TA) :(R & TA) :

Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Karvy House, 46, Avenue 4,Street No. 1, Banjara Hills, Hyderabad - 500 034. Tel: + 91 40 23312454, Fax: + 91 40 23311968

(x)(x)(x)(x)(x) Share Transfer System :Share Transfer System :Share Transfer System :Share Transfer System :Share Transfer System :

Pursuant to the provisions of the Listing Agreement entered into with the Stock Exchanges, the Board of Directors ofthe Company has delegated the power of share transfer to the R & TA. Securities lodged for transfer are normallyprocessed within the stipulated time as specified in the Listing Agreement and other applicable provisions ofCompanies Act, 1956.

(xi)(xi)(xi)(xi)(xi) Distribution of shareholding as on 31st March, 2007:Distribution of shareholding as on 31st March, 2007:Distribution of shareholding as on 31st March, 2007:Distribution of shareholding as on 31st March, 2007:Distribution of shareholding as on 31st March, 2007:

Category No. of Cases/ % Total Shares % of Shares Members

1-5000 24342 97.48 1190838 2.50

5001-10000 265 1.06 210150 0.44

10001-20000 154 0.62 231443 0.49

20001-30000 66 0.26 164417 0.35

30001-40000 28 0.11 99525 0.21

40001-50000 23 0.09 105928 0.22

50001-100000 44 0.18 311420 0.65

100001 & Above 49 0.20 45270854 95.14

TotalTotalTotalTotalTotal 2497124971249712497124971 100100100100100 4758457547584575475845754758457547584575 100100100100100

0

2000

4000

6000

8000

10000

12000

14000

16000

S & P CNX NIFTYBSE Sensex

Mar'07

Feb'0

7Jan

'07

Dec'06

Nov'06

Oct'06

Sep'0

6Aug

'06Ju

l'06

Jun'0

6

May'06

Apr'06

0

50

100

150

200

250

300

350

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49

Shareholding pattern of the Company (as on March 31, 2007):Shareholding pattern of the Company (as on March 31, 2007):Shareholding pattern of the Company (as on March 31, 2007):Shareholding pattern of the Company (as on March 31, 2007):Shareholding pattern of the Company (as on March 31, 2007):

(1) (a) Statement showing Shareholding Pattern as on March, 31, 2007.(1) (a) Statement showing Shareholding Pattern as on March, 31, 2007.(1) (a) Statement showing Shareholding Pattern as on March, 31, 2007.(1) (a) Statement showing Shareholding Pattern as on March, 31, 2007.(1) (a) Statement showing Shareholding Pattern as on March, 31, 2007.

Name of the Company: Entertainment Network (India) LimitedName of the Company: Entertainment Network (India) LimitedName of the Company: Entertainment Network (India) LimitedName of the Company: Entertainment Network (India) LimitedName of the Company: Entertainment Network (India) Limited

Scrip Code: BSE Scrip Code: 532700/ Symbol: ENILScrip Code: BSE Scrip Code: 532700/ Symbol: ENILScrip Code: BSE Scrip Code: 532700/ Symbol: ENILScrip Code: BSE Scrip Code: 532700/ Symbol: ENILScrip Code: BSE Scrip Code: 532700/ Symbol: ENIL As onAs onAs onAs onAs onMarch 31, 2007March 31, 2007March 31, 2007March 31, 2007March 31, 2007

CategoryCategoryCategoryCategoryCategory Category of shareholdersCategory of shareholdersCategory of shareholdersCategory of shareholdersCategory of shareholders Number ofNumber ofNumber ofNumber ofNumber of Total NumberTotal NumberTotal NumberTotal NumberTotal Number Number ofNumber ofNumber ofNumber ofNumber of Total share-Total share-Total share-Total share-Total share-codecodecodecodecode shareholdersshareholdersshareholdersshareholdersshareholders of shares of shares of shares of shares of shares shares held inshares held inshares held inshares held inshares held in holding as aholding as aholding as aholding as aholding as a

dematerializeddematerializeddematerializeddematerializeddematerialized percentagepercentagepercentagepercentagepercentageformformformformform of total of total of total of total of total

number ofnumber ofnumber ofnumber ofnumber ofsharessharessharessharesshares

(A)(A)(A)(A)(A) Shareholding of Promoter andShareholding of Promoter andShareholding of Promoter andShareholding of Promoter andShareholding of Promoter andPromoter GroupPromoter GroupPromoter GroupPromoter GroupPromoter Group

(1)(1)(1)(1)(1) IndianIndianIndianIndianIndian(a) Individuals/ Hindu

Undivided Family(b) Central Government/

State Government(s)(c) Bodies Corporate (including 7

others, holding 203 sharesjointly with the Promoter) 9 33,918,400 33,918,197 71.2871.2871.2871.2871.28

(d) Financial Institutions/ Banks(e) Any Other (specify)

Sub-Total (A)(1)Sub-Total (A)(1)Sub-Total (A)(1)Sub-Total (A)(1)Sub-Total (A)(1) 99999 33,918,40033,918,40033,918,40033,918,40033,918,400 33,918,19733,918,19733,918,19733,918,19733,918,197 71.2871.2871.2871.2871.28(2)(2)(2)(2)(2) ForeignForeignForeignForeignForeign(a) Individuals (Non-Resident

Individuals/ Foreign Individuals)(b) Bodies Corporate(c) Institutions(d) Any Other (specify)

Sub-Total (A)(2)Sub-Total (A)(2)Sub-Total (A)(2)Sub-Total (A)(2)Sub-Total (A)(2) 0 0 0 0Total Shareholding ofTotal Shareholding ofTotal Shareholding ofTotal Shareholding ofTotal Shareholding ofPromoter and PromoterPromoter and PromoterPromoter and PromoterPromoter and PromoterPromoter and PromoterGroup (A)= (A)(1)+(A)(2)Group (A)= (A)(1)+(A)(2)Group (A)= (A)(1)+(A)(2)Group (A)= (A)(1)+(A)(2)Group (A)= (A)(1)+(A)(2) 99999 33,918,40033,918,40033,918,40033,918,40033,918,400 33,918,19733,918,19733,918,19733,918,19733,918,197 71.2871.2871.2871.2871.28

(B)(B)(B)(B)(B) Public shareholdingPublic shareholdingPublic shareholdingPublic shareholdingPublic shareholding(1)(1)(1)(1)(1) InstitutionsInstitutionsInstitutionsInstitutionsInstitutions(a) Mutual Funds/ UTI 7 412,227 412,227 0.870.870.870.870.87(b) Financial Institutions/ Banks 0.000.000.000.000.00(c) Central Government/

State Government(s)(d) Venture Capital Funds(e) Insurance Companies(f) Foreign Institutional Investors 16 9,429,085 9,429,085 19.8219.8219.8219.8219.82(g) Foreign Venture Capital Investors(h) Any Other (specify)

Sub-Total (B)(1)Sub-Total (B)(1)Sub-Total (B)(1)Sub-Total (B)(1)Sub-Total (B)(1) 2323232323 9,841,3129,841,3129,841,3129,841,3129,841,312 9,841,3129,841,3129,841,3129,841,3129,841,312 20.6820.6820.6820.6820.68


50

CategoryCategoryCategoryCategoryCategory Category of shareholdersCategory of shareholdersCategory of shareholdersCategory of shareholdersCategory of shareholders Number ofNumber ofNumber ofNumber ofNumber of Total NumberTotal NumberTotal NumberTotal NumberTotal Number Number ofNumber ofNumber ofNumber ofNumber of Total share-Total share-Total share-Total share-Total share-codecodecodecodecode shareholdersshareholdersshareholdersshareholdersshareholders of shares of shares of shares of shares of shares shares held inshares held inshares held inshares held inshares held in holding as aholding as aholding as aholding as aholding as a

dematerializeddematerializeddematerializeddematerializeddematerialized percentagepercentagepercentagepercentagepercentageformformformformform of total of total of total of total of total

number ofnumber ofnumber ofnumber ofnumber ofsharessharessharessharesshares

(2)(2)(2)(2)(2) Non-institutionsNon-institutionsNon-institutionsNon-institutionsNon-institutions

(a) Bodies Corporate 353 1,023,095 1,023,095 2.152.152.152.152.15

(b) Individuals -

i. Individual shareholdersholding nominal share capitalup to Rs. 1 lakh. 24,374 2,032,203 2,024,701 4.274.274.274.274.27

ii. Individual shareholders holdingnominal share capital in excessof Rs. 1 lakh. 17 710,283 710,283 1.491.491.491.491.49

(c) Any Other (specify)

Non Resident Indians 144 24,720 24,720 0.050.050.050.050.05

Trust 6 234 234 0.000.000.000.000.00

Clearing Members 45 34,328 34,328 0.070.070.070.070.07

Sub-Total (B)(2)Sub-Total (B)(2)Sub-Total (B)(2)Sub-Total (B)(2)Sub-Total (B)(2) 24,93924,93924,93924,93924,939 3,824,8633,824,8633,824,8633,824,8633,824,863 3,817,3613,817,3613,817,3613,817,3613,817,361 8.048.048.048.048.04

Total Public ShareholdingTotal Public ShareholdingTotal Public ShareholdingTotal Public ShareholdingTotal Public Shareholding(B)= (B)(1)+(B)(2)(B)= (B)(1)+(B)(2)(B)= (B)(1)+(B)(2)(B)= (B)(1)+(B)(2)(B)= (B)(1)+(B)(2) 24,96224,96224,96224,96224,962 13,666,17513,666,17513,666,17513,666,17513,666,175 13,658,67313,658,67313,658,67313,658,67313,658,673 28.7228.7228.7228.7228.72

TOTAL (A)+(B)TOTAL (A)+(B)TOTAL (A)+(B)TOTAL (A)+(B)TOTAL (A)+(B) 24,97124,97124,97124,97124,971 47,584,57547,584,57547,584,57547,584,57547,584,575 47,576,87047,576,87047,576,87047,576,87047,576,870 100.00100.00100.00100.00100.00

(C)(C)(C)(C)(C) Shares held by Custodians andShares held by Custodians andShares held by Custodians andShares held by Custodians andShares held by Custodians andagainst which Depositoryagainst which Depositoryagainst which Depositoryagainst which Depositoryagainst which DepositoryReceipts have been issuedReceipts have been issuedReceipts have been issuedReceipts have been issuedReceipts have been issued 0 0 0 0.000.000.000.000.00

GRAND TOTAL (A)+(B)+(C)GRAND TOTAL (A)+(B)+(C)GRAND TOTAL (A)+(B)+(C)GRAND TOTAL (A)+(B)+(C)GRAND TOTAL (A)+(B)+(C) 24,97124,97124,97124,97124,971 47,584,57547,584,57547,584,57547,584,57547,584,575 47,576,87047,576,87047,576,87047,576,87047,576,870 100.00100.00100.00100.00100.00

The Indian Promoter Group comprises of Times Infotainment Media Limited (TIML) (including 7 others, holding 203 sharesjointly with TIML) and Bennett, Coleman and Company Limited.

(xii)(xii)(xii)(xii)(xii) Dematerialization of shares and liquidity:Dematerialization of shares and liquidity:Dematerialization of shares and liquidity:Dematerialization of shares and liquidity:Dematerialization of shares and liquidity:

99.....98 % of the outstanding Equity Shares have been dematerialized up to March 31, 2007. Trading in Equity Sharesof the Company is permitted only in dematerialized form as per the notification issued by SEBI. The trading /liquidity details are given in clause (vii) here before.

(xiii)(xiii)(xiii)(xiii)(xiii) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity:Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity:Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity:Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity:Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on Equity:

In accordance with the provisions of Sections 81 and other applicable provisions of the Companies Act, 1956, andthe provisions contained in the Securities and Exchange Board of India (Employees Stock Option Scheme andEmployees Stock Purchase Scheme) Guidelines, 1999, and the Scheme titled �Entertainment Network (India) LimitedEmployee Stock Option Scheme (�ENIL ESOS-2005�), 109,360 (One hundred nine thousand three hundred sixty)Options (each Option being convertible into one equity share of the face value of Rs. 10/- each of the Company)were granted, at an exercise price of Rs.90/- each (including a security premium of Rs. 80/- each).

Out of the total 109,360 options, 56,870 option have been exercised, 2,610 options have lapsed and 49,880 optionsare outstanding as on the date of this Report.


51

(xiv)(xiv)(xiv)(xiv)(xiv) Location of Studios:Location of Studios:Location of Studios:Location of Studios:Location of Studios:

� Ahmedabad: The Times of India Press Premises, Vejalpur, Ahmedabad - 380051.

� Bangalore: #39/2, 3rd floor, Sagar Building, Banerghatta Road, Bangalore - 560 029.

� Chennai: Fatima Akthar Court, 6th & 7th floor, New No. 453, Anna Salai, Teynampet, Chennai- 600018.

� Delhi: 3rd floor, Okhla Industrial Estate, Phase 3, New Delhi � 110 020.

� Hyderabad: 1st floor, Queen�s Plazza, Sardar Patel Road, Opp. Begumpet Police Station, Begumpet,Secunderabad - 500 003.

� Indore: 9th floor, Industry House, 15 AB Road, Indore- 452 001.

� Jaipur: Prestige Tower, 6th floor, E-1 Amrapali Road, Vaishali Nagar, Jaipur- 302 021.

� Jalandhar: 6th floor, Shakti Tower, Adjoining Swani Motors, GT Road, Near BMC Chowk, Jalandhar - 144 001.

� Kolkata: Shantiniketan Building, 13th floor, 8, Camac Street, Kolkata � 700 017.

� Mumbai: 4th floor, Matulya Centre, A Wing, Senapati Bapat Marg, Lower Parel, Mumbai � 400 013.

� Patna: Times of India Building, Fraser Road, Patna � 800 001.

� Pune: 3rd floor, Krishna Keval Commercial Complex, Above ICICI Bank, Kondwa, Khurd, Pune - 411 048.

(xv)(xv)(xv)(xv)(xv) Address for correspondence :Address for correspondence :Address for correspondence :Address for correspondence :Address for correspondence :

Investor Correspondence

For share transfer/dematerialisation of shares / other queries relating to the securities:

Karvy Computershare Private Limited, Unit:- Entertainment Network (India) Limited, Karvy House, 46, Avenue 4,Street No. 1, Banjara Hills, Hyderabad - 500 034. Tel: + 91 40 23312454, Fax: + 91 40 23311968.

Any queries on Annual Report or investors� assistance

Mr. Anil Fernandes, Sr. Vice President- Legal & Company Secretary,

Trade Gardens, Ground Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (West), Mumbai � 400 013.

Email Id - [email protected]

Investors can register their complaints/ grievances on the Company�s designated e-mail ID:[email protected] . The said e-mail ID and other relevant details have been displayed on the Company�sweb site: www.enil.co.in .

NON MANDATORY REQUIREMENTS:NON MANDATORY REQUIREMENTS:NON MANDATORY REQUIREMENTS:NON MANDATORY REQUIREMENTS:NON MANDATORY REQUIREMENTS:

1.1.1.1.1. The Board:The Board:The Board:The Board:The Board:

The Company does not defray any secretarial expenses of the Chairman�s Office. Independent Directors do not have a tenureexceeding, in the aggregate, a period of nine years, on the Board of the Company.

2.2.2.2.2. Remuneration Committee:Remuneration Committee:Remuneration Committee:Remuneration Committee:Remuneration Committee:

As stated earlier, the Company has constituted the Remuneration/ Compensation Committee to review and recommend theremuneration of the Managing Director based on his/her performance and defined assessment criteria. Details regardingcomposition and scope of the Remuneration/ Compensation Committee are given here before.

3.3.3.3.3. Shareholder Rights:Shareholder Rights:Shareholder Rights:Shareholder Rights:Shareholder Rights:

The Company�s quarterly and half-yearly results are furnished to the Stock Exchanges and are also published in thenewspapers and on the website of the Company besides being available on the SEBI�s website i.e. http://sebiedifar.nic.in andtherefore results were not separately sent to the Members.


52

4.4.4.4.4. Audit qualifications:Audit qualifications:Audit qualifications:Audit qualifications:Audit qualifications:

There are no audit qualifications in the Audit Report for the period under consideration.

5.5.5.5.5. Training of Board Members:Training of Board Members:Training of Board Members:Training of Board Members:Training of Board Members:

No training is provided to the Board Members as on date of this Report.

6.6.6.6.6. Mechanism for evaluating non-executive Board Members:Mechanism for evaluating non-executive Board Members:Mechanism for evaluating non-executive Board Members:Mechanism for evaluating non-executive Board Members:Mechanism for evaluating non-executive Board Members:

No mechanism is in place as on date of this Report.

7.7.7.7.7. Whistle Blower Policy:Whistle Blower Policy:Whistle Blower Policy:Whistle Blower Policy:Whistle Blower Policy:

Company has adopted the Code of Ethics and Business Principles for Directors and Employees. However, as of the date ofthis Report, the Company has not adopted any Whistle Blower Policy.

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

I, A. P. Parigi, Managing Director of Entertainment Network (India) Limited, hereby affirm and declare, to the best of myknowledge and belief, and on behalf of the Board of Directors of the Company and senior management personnel, that:

� the Board of Directors has laid down a code of conduct for all Board members and senior management of the company [�theCode of Conduct�];

� The Code of Conduct has been posted on the website of the Company;

� The Code of Conduct has been complied with.

For and on behalf of the Board of Directors andFor and on behalf of the Board of Directors andFor and on behalf of the Board of Directors andFor and on behalf of the Board of Directors andFor and on behalf of the Board of Directors andsenior management personnelsenior management personnelsenior management personnelsenior management personnelsenior management personnel

A. P. ParigiA. P. ParigiA. P. ParigiA. P. ParigiA. P. ParigiManaging Director & CEOManaging Director & CEOManaging Director & CEOManaging Director & CEOManaging Director & CEO



53

CERTIFICATE

To the Members of ENTERTAINMENT NETWORK (INDIA) LIMITEDTo the Members of ENTERTAINMENT NETWORK (INDIA) LIMITEDTo the Members of ENTERTAINMENT NETWORK (INDIA) LIMITEDTo the Members of ENTERTAINMENT NETWORK (INDIA) LIMITEDTo the Members of ENTERTAINMENT NETWORK (INDIA) LIMITED

We have examined the compliance of conditions of Corporate Governance by ENTERTAINMENT NETWORK (INDIA) LIMITED ENTERTAINMENT NETWORK (INDIA) LIMITED ENTERTAINMENT NETWORK (INDIA) LIMITED ENTERTAINMENT NETWORK (INDIA) LIMITED ENTERTAINMENT NETWORK (INDIA) LIMITED (�theCompany�), for the year ended March 31, 2007, as stipulated in Clause 49 of the Listing Agreement of the Company with theBombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited toa review of procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditionsof Corporate Governance as stipulated in the said Clause 49. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representations madeby the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governanceas stipulated in Clause 49 of the abovementioned Listing Agreement.

We have to state that based on the report given by M/s. Karvy Computershare Private Limited, the Registrar and Share TransferAgents of the Company, there were no investor grievance pending for action to be taken by the Company for a period exceedingone month.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For Hemanshu Kapadia & AssociatesFor Hemanshu Kapadia & AssociatesFor Hemanshu Kapadia & AssociatesFor Hemanshu Kapadia & AssociatesFor Hemanshu Kapadia & AssociatesCompany Secretaries

Hemanshu KapadiaHemanshu KapadiaHemanshu KapadiaHemanshu KapadiaHemanshu KapadiaProprietor

C.P. No. 2285



54

MANAGEMENT DISCUSSION & ANALYSIS

Statements in this Management Discussion and Analysis describing the Company�s objectives, projections, estimates,expectations or predictions may be �forward-looking statements� within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expressed or implied. Important factors that could make adifference to the Company�s operations include cyclical demand and pricing in the Company�s principal markets, changes inGovernment regulations, tax regimes, economic developments within India and the countries in which the Company conductsbusiness and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward lookingstatements, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place unduereliance on these forward looking statements that speak only as of their dates.

A.A.A.A.A. INDUSTRY STRUCTURE AND DEVELOPMENTSINDUSTRY STRUCTURE AND DEVELOPMENTSINDUSTRY STRUCTURE AND DEVELOPMENTSINDUSTRY STRUCTURE AND DEVELOPMENTSINDUSTRY STRUCTURE AND DEVELOPMENTS

Trillion dollar economy fuelling advertising industry growthTrillion dollar economy fuelling advertising industry growthTrillion dollar economy fuelling advertising industry growthTrillion dollar economy fuelling advertising industry growthTrillion dollar economy fuelling advertising industry growth

India continued its economic march with GDP growths of 9.0% and 9.2% in 2005-06 and 2006-07, respectively. What is ofsignificance is that this growth is being fuelled by consumer spends and growth in advertising expenditure. Domain expertsopine that consumerism and urbanization trends have come to stay. Per capita income in 2005-06, in real terms increasedby 7.4 %. The savings rate is estimated at 32.4% and the investment rate at 33.8%. Aided by robust growth in the servicessector, trends indicate that the momentum of the economy as a whole will remain upbeat. This view factors in the possibleups and downs in growth of the agricultural sector1.

The Reserve Bank of India has put the country�s GDP at around Rs. 41,00,000 crore for the financial year 2006-07 ($ 1trillion). India has joined the elite club of 12 countries with a trillion dollar economy, thanks to the continuing rally of therupee against the US dollar.

India continued to be one of the most attractive destinations for Foreign Direct Investment (FDI). The FDI into India for2006-07 stood at USD 15.7 billion as against USD 5.54 billion in 2005-06, registering a high growth of 184%.

(Source: Website of the Department of Industrial Policy & Promotion, Ministry of Commerce and Industry, Government of India).

The Eleventh Five Year Plan (2007-08 to 2012-13) targets an aggressive average annual growth of 10% as against 8%achieved by the Tenth Five Year Plan. As per a Goldman Sachs report, if the current growth trend continues, the Indianeconomy is likely to become the world�s fifth largest economy in the years to come. According to various other reports, theshare of India in global trade is expected to rise significantly making India the third largest economy by 2035, after the USand China. Though the government has demonstrated a strong resolve in curbing inflation, it does remain a concern for theeconomy. The strong measures taken could temporarily affect the growth rate of the advertising industry. The long termforecast for growth of the advertising industry, however remains strong.

Growing Indian media and entertainment industryGrowing Indian media and entertainment industryGrowing Indian media and entertainment industryGrowing Indian media and entertainment industryGrowing Indian media and entertainment industry

Indian Entertainment and Media industry (E&M) continues to outperform the overall Indian economy and remains one ofthe fastest growing sectors of the economy. Over the previous year E&M grew at 20%. Estimated at Rs. 437 billion, theindustry is expected to grow at a compounded annual growth rate (CAGR) of 18% over the next 5 years2. Sustainedeconomic growth, rising income levels, consumerism coupled with policy initiatives on the regulatory front and technologyenabled convergence trends are encouraging investments including FDI, in the E&M arena. These are going to be the keydrivers for the E&M industry in the future.

Advertising industry grows fastAdvertising industry grows fastAdvertising industry grows fastAdvertising industry grows fastAdvertising industry grows fast

The latest �AdEx� data, from the industry standard body called TAM, shows that the Indian advertising industry recorded agrowth rate of 23% in 2006-07 over the previous year. This is the highest growth recorded by the industry in more than adecade. With this growth, the Indian advertising industry is now estimated to be about Rs 160 billion in size.

The low advertising to GDP ratio, currently at just 0.4% (compared to other developing countries like China at 0.6% andMalaysia at 0.9%) indicates that the advertising industry is likely to outgrow the GDP for several years to come. It isgenerally accepted that as a country�s GDP grows, the advertising industry becomes a substantial beneficiary of the growth(as consumer wealth increases; more brands come in). We expect India to be no different.

1 Economic Survey 2006-072 FICCI and PriceWaterhouseCoopers Report, 2007


55

B.B.B.B.B. RADIO INDUSTRY DEVELOPMENTS IN 2006-07RADIO INDUSTRY DEVELOPMENTS IN 2006-07RADIO INDUSTRY DEVELOPMENTS IN 2006-07RADIO INDUSTRY DEVELOPMENTS IN 2006-07RADIO INDUSTRY DEVELOPMENTS IN 2006-07

Phase II roll outs near completion:Phase II roll outs near completion:Phase II roll outs near completion:Phase II roll outs near completion:Phase II roll outs near completion:

The FM Radio Broadcasting Services through Private Agencies (�Phase II Policy�) was announced by the Government of Indiain 2005, wherein 338 channels spread over 91 cities, were made available to the private players by way of bidding. In 2006,under Phase II, 245 channels out of 338 channels were allocated to 37 different companies, covering 87 cities. Thesuccessful bidders included several large Indian companies having major interests in other media such as print, televisionetc.

The new channels allocated under Phase II Policy are all expected to be operational by December 2007. At the time ofpreparation of this report (in May 07), many of the new cities have already witnessed the launch of private FM radio.

With the completion of the roll out, the growth of the private sector FM radio is likely to attain greater momentum as themedium becomes more accessible to local advertisers.

Radio grows fastRadio grows fastRadio grows fastRadio grows fastRadio grows fast

Radio was the fastest growing segment within the advertising industry. The radio industry recorded a growth of nearly 58%in 2006. This took the share of radio up from 2.4% to 3.1% of the total advertising industry. This is further expected toincrease to 5.5% by 2011.

0

200000

400000

600000

800000

1000000

1200000

2011F2010F2009F2008F2007F2006E20052004

Rs. M

illio

n

311600364300

436500500800

588300

697150

1001700

850700

Estimated Size of Media and Entertainment Industry

E: Estimate. F: Forecast. Source: PriceWaterhouseCoopers Report, 2007

Source: PriceWaterhouseCoopers Report, 2007

0

5000

10000

15000

20000

2011F2010F2009F2008F2007F2006F20052004

Estimated Size of Radio Industry

Rs. M

illio

n CAGR 28%

22003200

50006500

8500

11000

14000

17000


56

Over the next 5 years, the FM radio sector is expected to grow at a CAGR of 28%. This rate of growth of the FM radio sectorwill outshine the growth rates of all other media segments. The radio industry, as per a PriceWaterhouseCoopers report islikely to grow by more than 3 times from its current size of Rs. 5 billion to nearly Rs. 17 billion in 2011.

If the present momentum of the regulatory reform process is maintained it is belived by many that the potential of the FMradio sector can be even higher. Should this happen, there is a possibility that India�s FM radio sector may achieve theglobal average of 8.4% of total advertising spend in the years to come.

New economy sectors contribute to radio�s growth:New economy sectors contribute to radio�s growth:New economy sectors contribute to radio�s growth:New economy sectors contribute to radio�s growth:New economy sectors contribute to radio�s growth:

Top 10 Categories of Radio Advertisers % share (in secondages): Jan- Nov 2006

TV Channel Promotions 11.8

Properties/Real Estate 6.2

Cellular Phone Service 5.5

Independent Retailers 3.8

Publications/books 3.1

Mutual Funds 2.7

Jewellery 2.3

Life Insurance 2.3

Biscuits 2.1Internet/SMS Service 1.5

Source: AdEx India, A Division of TAM Media Research

C.C.C.C.C. FUTURE OUTLOOK, OPPORTUNITIES & THREATS FOR RADIOFUTURE OUTLOOK, OPPORTUNITIES & THREATS FOR RADIOFUTURE OUTLOOK, OPPORTUNITIES & THREATS FOR RADIOFUTURE OUTLOOK, OPPORTUNITIES & THREATS FOR RADIOFUTURE OUTLOOK, OPPORTUNITIES & THREATS FOR RADIO

Phase II � balance frequencies auction to be announcedPhase II � balance frequencies auction to be announcedPhase II � balance frequencies auction to be announcedPhase II � balance frequencies auction to be announcedPhase II � balance frequencies auction to be announced

At the time of writing this report, in May 2007, there are reports in the media that the government is considering puttingto auction, those frequencies of Phase II which were not taken up by any broadcaster. This would be a significantdevelopment � and if all balance frequencies do get taken up, the geographical growth of private FM as envisaged in PhaseII would be soon completed. With this, the stage would be set for a further expansion through the Phase III program of thegovernment.

Phase III may follow soonPhase III may follow soonPhase III may follow soonPhase III may follow soonPhase III may follow soon

It is expected that after the completion of Phase II Policy, the Government will open up as many as 700 channels in thePhase III (as per some media reports). This phase will witness licenses being awarded in smaller towns. This would trulymake private FM into a well spread out industry in the country.

Availability of Listenership Data: RAM research launched:Availability of Listenership Data: RAM research launched:Availability of Listenership Data: RAM research launched:Availability of Listenership Data: RAM research launched:Availability of Listenership Data: RAM research launched:

The country�s leading TV viewership research company, TAM, has recently ventured into radio audience measurement aswell. The study called RAM (Radio Audience Measurement) will adopt the age old diary method of research. The study hasbeen currently launched in the cities of Delhi, Mumbai and Bangalore. The erstwhile study, Indian Listenership Track (�ILT�),based on DAR (Day After Recall) methodology undertaken by Media Research Users Council (�MRUC�) may also continue inDelhi, Mumbai and Kolkata. The ILT is commissioned by the MRUC, a joint body of advertisers and broadcasters.

Research may cover larger number of cities/ towns in the years to come. Availability of listenership reports/ data particularlyin the major markets is bound to support and attract larger spends from marketers. Marketers generally wait for adequateresearch data to emerge before committing large spends to any medium.

New policy on Satellite radio expected soonNew policy on Satellite radio expected soonNew policy on Satellite radio expected soonNew policy on Satellite radio expected soonNew policy on Satellite radio expected soon

The Government is likely to announce a policy framework for satellite radio soon. Hitherto, this segment of broadcastinghas existed without any regulatory framework.


57

A policy on satellite radio is required to ensure a level playing field for FM broadcasters. At present, many of the restrictionsthat apply to FM broadcasters and which affect their growth do not apply to satellite broadcasters. This satellite radiopolicy of the Government is likely to touch upon some of the following points:

1) At present multiple channel ownership by a FM broadcaster in the same city is not permitted; however, the currentsatellite broadcaster in India has nearly 45 channels on offer;

2) FM broadcasters are not allowed to broadcast news and current affairs. No such restrictions are put on the satellitebroadcaster;

3) FDI cap of 20% is applicable for the FM sector;

4) FM signals, for technologicaly reasons, are limited to a small range around the transmission site; the satellite broadcastsignals cover the entire country;

5) Satellite broadcasters have sought permission to be allowed terrestrial repeaters. This is being strongly opposed by theFM industry as it will make the satellite service almost comparable with FM service (in addition to having a nation-wide coverage);

6) Absence of annual license fees for the satellite radio broadcaster. FM radio broadcasters pay as much as 4% of theirgross annual revenues (plus service tax) to the government;

7) The Phase II Policy required payment of OTEF (One Time Entry Fee) by FM radio broadcasters; there was no such burdenon the satellite radio broadcaster.

The Company believes that the new policy will address the above issues. Further, the initial indications suggest that theGovernment is appreciative of the concerns raised by the FM radio industry.

New Broadcast Bill expected soonNew Broadcast Bill expected soonNew Broadcast Bill expected soonNew Broadcast Bill expected soonNew Broadcast Bill expected soon

The new Broadcast Bill is expected soon. This is a Bill that will cover all sectors of media including TV, print and radio.The Broadcast Bill will influence the growth of the media business. It is likely that certain anomalies of the FM radiobusiness will be removed. For instance, a key concern relates to FM radio sector receiving automatic permission forplayout of new music releases. This is the standard norm worldwide and if this Act were to allow this, it would removean important anomaly for the radio business.

The Broadcast Bill in its draft form covers subjects like �self regulation� of content and contains a proposal to set up adedicated regulator for the broadcasting sector � Broadcast Regulatory Authority of India (BRAI).

Music royalties continue to remain a threatMusic royalties continue to remain a threatMusic royalties continue to remain a threatMusic royalties continue to remain a threatMusic royalties continue to remain a threat

The issue relating to abnormally high music royalties demanded by the music companies is yet to be resolved. However,it is now possible for broadcasters to launch their services either by opting for a voluntary agreement with PhonographicPerformance Limited and The Indian Performance Right Society Limited (at high rates) or under the rates determined bythe courts of law.

D.D.D.D.D. RISKS, CONCERNS AND CHALLENGES FACING COMPANYRISKS, CONCERNS AND CHALLENGES FACING COMPANYRISKS, CONCERNS AND CHALLENGES FACING COMPANYRISKS, CONCERNS AND CHALLENGES FACING COMPANYRISKS, CONCERNS AND CHALLENGES FACING COMPANY

Certain areas of risks, concerns and challenges that the Company faces and efforts to mitigate these elements arehighlighted:

1.1.1.1.1. Macroeconomic risk:Macroeconomic risk:Macroeconomic risk:Macroeconomic risk:Macroeconomic risk:

The radio business is dependent on advertisements as its main source of revenue, since FM radio stations are �free toair� in India, and thus cannot charge any subscription revenues from listeners. Similarly, our Out-of-Home (�OOH�)Media business is also linked to advertising industry.

The advertisement-spend of the industry in turn is dependent on India�s GDP growth. A slowdown in economic growth,or a lower advertisement-spend by the industry could impact the revenues of both the radio and the OOH industry.

2.2.2.2.2. Emergence of digital technologies:Emergence of digital technologies:Emergence of digital technologies:Emergence of digital technologies:Emergence of digital technologies:

There is emerging a worldwide preference for digital broadcasting technologies like Satellite/Digital Audio Broadcast(DAB) using the FM band and Digital Radio Mondial (DRM) using the AM band. In some ways, this could present achallenge to FM radio broadcasters in the decades to come.


58

Digital broadcasting are permits more efficient spectrum utilization. This enables broadcast of multiple radio stationswithin a given spectrum space. The quality of digital broadcast is considered superior to analog transmission. Consumersbenefit because of wider choice.

It should be recognized at this point in time that the digital receivers are different and more expensive than analogreceivers. For instance users need to buy receivers that cost between £40 and £100 apiece (in the UK). At present, thepenetration of digital receivers is just about 10% in the UK, but this is expected to grow to around 25% in the next3-4 years as per OFCOM (Office of Communications - the British regulatory authority).

The abundance of digital technologies has resulted in a kind of non standardization across the world. A world standardin technology can accelerate the roll-out of digital radio across the world.

Satellite radio is a radio service that provides radio signals directly from satellites. It is better than terrestrial digitaltechnologies (DAB/DAB+/DRM) when large areas with homogeneous listening needs are to be covered. This is whysatellite radio is popular in the US. Satellite radio subscribers are also able to receive more than 100 radio channelsfeaturing high quality music, news, weather, sports, and talk radio. Currently, there is only one provider of Satelliteradio service in India, providing about 45 channels. Satellite radio is primarily subscription driven and the cost ofaccess equipment remains high at present. At present satellite radio in India is small; however in future, it could be athreat to FM radio.

In Western Europe, a few countries are looking at a total switch off of analog broadcasting (FM/AM) by 2020 or so.Only Norway has formally announced a cut off date. But with analog TV likely to be switched off in the next 5-7 years,radio�s turn could come in the next 10-15 years.

3.3.3.3.3. No Differentiation amongst FM Radio stations:No Differentiation amongst FM Radio stations:No Differentiation amongst FM Radio stations:No Differentiation amongst FM Radio stations:No Differentiation amongst FM Radio stations:

Presently, FM Radio companies are not allowed to own multiple frequencies in the same city, which is one importantreason for �near zero differentiation� amongst the FM radio stations. This means that companies do not have thefreedom to experiment with content and hence are forced to cater to the mass segment by playing �Hit Music�. Thisstalls the growth of private FM with many consumer segments (who prefer different music genres) not taking toprivate FM. This could potentially harm the interests of the company.

4.4.4.4.4. Ensuring Process Maturity in tandem with Business Growth:Ensuring Process Maturity in tandem with Business Growth:Ensuring Process Maturity in tandem with Business Growth:Ensuring Process Maturity in tandem with Business Growth:Ensuring Process Maturity in tandem with Business Growth:

The increase from 7 stations last year to 32 stations during the ensuing year necessitates a high degree of elevation inefficiencies and effectiveness in processes and procedures. This growth warrants putting in place better internalcontrols and processes to enhance effectiveness. In order to ensure better synchronization of process and informationtechnology for competitive edge, the Company has set up a Business Process Engineering Team. This team will primarilyensure better organizational orchestration through increased standardization of processes, automation of strategic �transactional activities and outsourcing non core, non strategic routine activities.

5.5.5.5.5. Operational and Financial Risks:Operational and Financial Risks:Operational and Financial Risks:Operational and Financial Risks:Operational and Financial Risks:

Any organization in the growth phase carries with it certain inherent operational and financial risks. The Company iskeen on identifying these operational and financial risks and put in place effective control procedures. The Companyhas appointed M/s. Ernst & Young to conduct a risk assessment study with the objective of addressing these concernareas through a proper mitigation plan. Based on this study, various internal checks and controls have been put inplace. As mandated under the listing agreement, the process of internal audit has been conducted to ensure maintenanceand follow-up on the internal control procedures. A CEO / CFO certification process on the internal audit has also beenimplemented.

6.6.6.6.6. Talent: Attraction & RetentionTalent: Attraction & RetentionTalent: Attraction & RetentionTalent: Attraction & RetentionTalent: Attraction & Retention

The Company is aware of challenges in terms of its ability to attract and retain top talent on an ongoing basis. TheCompany, being a pioneer in the private FM Radio space has the inherent ability to attract best professionals but isalso perceived as a target by new / later entrants. The values and culture that the Company has built for itself hashelped it in its efforts at attracting and retaining talent.


59

7.7.7.7.7. Diversification Risk / new business risk:Diversification Risk / new business risk:Diversification Risk / new business risk:Diversification Risk / new business risk:Diversification Risk / new business risk:

While the FM radio broadcasting business accounts for majority of our revenues (79% of the total revenue), while ourOut-of-Home media (Times OOH) and Live Entertainment (360o Experience) contribute to the balance. While we havewell established ourselves in the FM radio broadcasting space, the other two businesses are at an evolving stage andgrowth prospects and margins may be lower than expected.

The Out-of-Home Media industry in India is at a nascent stage. The industry is fragmented, with no major playerdominating the market. At the same time it is expected to grow at a strong rate as it is increasingly being recognisedas an effective medium for executing creative ideas. Times OOH is expected to benefit and make most of theopportunity, being one of the very few organized player in the industry. Its financial strength, media experience andbrand strength gives the Company a better chance to purchase or lease advertising properties.

Over the years, live entertainment business in India has grown into a Rs. 27 billion industry. The industry has justbegun to gather steam, as events increasingly become a part of large corporates and advertisers� marketing plans. 360o

Experience has already conducted key large format events and has important corporates as its clients. Given the mediabackground, past experience and growth potential in the industry, the business looks attractive.

E.E.E.E.E. SEGMENT-WISE PERFORMANCESEGMENT-WISE PERFORMANCESEGMENT-WISE PERFORMANCESEGMENT-WISE PERFORMANCESEGMENT-WISE PERFORMANCE

Management Discussions and analysis of the Company�s operations and financial consolidation and Segment-wise performancetogether with discussion on financial performance with respect to operational performance should be read in conjunctionwith the financial statements and the related footnotes. Experiential marketing business and Out-of-Home media businessesare part of subsidiary company Times Innovative Media Limited (�TIM�) and are discussed separately.

Strategic realignment of our businessesStrategic realignment of our businessesStrategic realignment of our businessesStrategic realignment of our businessesStrategic realignment of our businesses

Radio Mirchi:Radio Mirchi:Radio Mirchi:Radio Mirchi:Radio Mirchi:

The Company has bid successfully for licenses to operate 25 radio stations in the cities of Aurangabad, Bangalore, Bhopal,Coimbatore, Hyderabad, Jabalpur, Jaipur, Jalandhar, Kanpur, Kolhapur, Lucknow, Madurai, Mangalore, Nagpur, Nasik, Patna,Panaji, Raipur, Rajkot, Surat, Thriuvananthapuram, Vadodara, Varanasi, Vijaywada and Vishakhpatnam under the Phase IIPolicy.

Roll-outs continue at fast pace:Roll-outs continue at fast pace:Roll-outs continue at fast pace:Roll-outs continue at fast pace:Roll-outs continue at fast pace:

ENIL has kept pace with the roll-outs of stations in the country. By May 16, 2007, the Company�s network of radio stationshas grown to 12 radio stations. The following stations have been launched under Phase II Policy till the date of this report:

JaipurBangaloreHyderabadPatnaJalandhar

Maintaining the lead in listenershipMaintaining the lead in listenershipMaintaining the lead in listenershipMaintaining the lead in listenershipMaintaining the lead in listenership

The Company has successfully stood its ground in the face of competition. It is our view that a critical phase has come toan end as major competitors have been on-air for over 6 � 9 months. The main metros have witnessed fierce competitionin the last 6 months (from September �06 onwards). The Company has emerged strong in all the markets. In Delhi, Mumbaiand Kolkata, where the independent ILT (Indian Listenership Track � conducted by MRUC) is available � fieldwork donebetween Feb 15 � Apr 30 2007, Radio Mirchi is the top brand and leads the next player by a big margin (Delhi + Mumbai:53% over the nearest competitor; in Kolkata 74% over the nearest competitor). In the key market of Bangalore, we believeRadio Mirchi is the #1 brand, though Bangalore is a finely fragmented market. In Hyderabad and Jaipur, Radio Mirchi is theclear #1 brand with leads of over 25% of the next player. In Chennai, we continue to lead over our nearest competitors inthe car tracks. Contrary to perception our lead has improved after the arrival of new competitors.

The first flush of competitive activity is over. As a matter of tradition and corporate policy we constantly monitor marketand competitive behavior. We are dedicating resources and special attention to markets like Ahmedabad, Pune and Indorewhere the Company was hitherto the only private broadcaster and where new competitors are set to arrive soon.


60

Radio Mirchi retains market sharesRadio Mirchi retains market sharesRadio Mirchi retains market sharesRadio Mirchi retains market sharesRadio Mirchi retains market shares

With listenership leads intact, the revenue market shares have remained surprisingly strong. It is now our belief thatadvertisers prefer broadcasters with a substantially large footprint/ network. In keeping with the maxim that buyers preferthe best footprint and the network size, at this point Radio Mirchi is clearly the perferred radio brand.

Our share of the private FM market has remained at nearly 50% over 2006-07. While we do expect some reduction in themarket share going forward (with many geographies where Radio Mirchi will not be present), we do not expect it to dropsignificantly. A level of 40% or so can be expected going forward.

The corporate strategy to compete for specific frequencies based on market growth potential has paid significant dividends.The three new stations � Bangalore, Hyderabad and Jaipur launched in April 2006, have all broken even in the very firstyear. We are confident that our other new stations will remain financially robust. The first few months of operation in thesenew markets indicate that our share of revenues remain robust. In Jaipur for example, our market share is more than 60%.Our market share and financial robustness is significantly driven by the strong network/ footprint which the company has.

With clear leadership in the platinum markets of Delhi, Mumbai and Bangalore, the share of revenue that advertisers inthese markets offer Radio Mirchi is high � while the smaller broadcasters struggle to get a share of attention from nationaladvertisers. This is a core strength the Company will continue to build and gain from in the future.

Achieving targetsAchieving targetsAchieving targetsAchieving targetsAchieving targets

The results that the Company has achieved in the year ending March, 2007 are encouraging. The Company achieved anincome of Rs. 1,705 million and EBITDA of Rs. 478 million, a revenue growth of 44% over the previous year. Revenuemarket share has remained at a high of 51% of the Indian private FM radio market.

The year that passed has made the Company stronger. It has retained its pre-eminent position in the private FM radioindustry. The radio industry itself is maturing; today media plans routinely include radio spends. Many new clients havejoined the radio bandwagon during the year. Repeat advertising is high amongst national advertisers.

F.F.F.F.F. SUBSIDIARY COMPANYSUBSIDIARY COMPANYSUBSIDIARY COMPANYSUBSIDIARY COMPANYSUBSIDIARY COMPANY

Times Innovative Media LimitedTimes Innovative Media LimitedTimes Innovative Media LimitedTimes Innovative Media LimitedTimes Innovative Media Limited

Times Innovative Media Limited (�TIM�) continues to be the wholly owned subsidiary of the Company. Pursuant to theapplicable provisions of the Companies Act, 1956, the name of Times Innovative Media Private Limited was changed toTimes Innovative Media Limited by deleting the word �Private� and consequently the Registrar of Companies, Maharashtra,Mumbai has issued fresh certificate of incorporation to that effect on March 15, 2007.

Event management and Event management and Event management and Event management and Event management and 360360360360360ooooo Experience Experience Experience Experience Experience

Experiential marketing is increasingly finding importance as an integral tool in the marketing mix of clients. The increasedfocus on events and promotions is attributable to two distinct developments � high level of clutter in advertising resultingin limited consumer attention and secondly, the perceptible trend among consumers to delay brand selection / purchasedecision till the last moment.

The first development is forcing brand managers to seek and choose alternative mediums/ platforms to enhance theeffectiveness of their brand communication. Events deliver high level of effectiveness and efficiency, and are resultantlyfinding favor among brand owners. The second development is driving the growth of promotions at the point of purchase,particularly in organized retail outlets.

These drivers have contributed to the industry growing at over 18 % per annum (Source: Internal Estimates & ProprietaryResearch). 360o � Event Management Business achieved a turnover of Rs. 422 million, a growth of 26% year on year(FY 06 revenue � Rs. 336 million) at an EBIDTA of Rs. 7.5 million.

While �managed events� (events conceptualized and executed for and on behalf of brand owners) continued to be themainstay revenue grosser, TIM has successfully launched two �owned events� in the financial year 2007. The proportion of�owned events� revenue is slated to grow over the next few years.


61

Out of Home Media (�Times OOH�)Out of Home Media (�Times OOH�)Out of Home Media (�Times OOH�)Out of Home Media (�Times OOH�)Out of Home Media (�Times OOH�)

The OOH media space, according to the 2007 annual edition of the FICCI-PricewaterhouseCoopers report, stands atRs. 10,000 million and is expected to grow at CAGR of 17% to reach Rs. 21,500 million by 2011. The CAGR estimate hasalso been revised from 14% predicted in the previous year�s report.

Times OOH has extended its business further in this year. Times OOH has made a strong entry into the airport outdooradvertising domain by acquiring the advertising rights at Delhi International Airport and Mumbai International Airport. Thebidding process was keenly bid by several OOH media players including global players. Both these airports cater tocombined annual travelers of about 42 million which constitute around 51% of airport passenger traffic in India.

Times OOH has launched three LED screens in this year, taking the total to four. Two of these are outdoor LED screens andare located at strategic high visibility locations which are 1) on the Delhi-Noida-Delhi (DND) toll bridge in Delhi and2) the common domestic arrival terminal in Mumbai. The third LED screen has been installed inside the Jet departureterminal in Mumbai. In March 2006, Times OOH had launched its first LED screen on the fascia facing the busy Delhi-Gurgaon mall road.

Times OOH also acquired the sole advertising contracts rights for Patel Bridge in Mumbai from 1st July 2006. The PatelBridge is one of the most premium outdoor sites in the country. The Patel Bridge Panel caters to heavy vehicular trafficmoving to and from the central business district to south Mumbai and the suburbs.

The year also saw Times OOH starting operations on the DND toll bridge and consolidating the Delhi metro and the MumbaiBus Queue Shelter (�BQS�) businesses. Times OOH ended this fiscal year with another acquisition of eight billboards in thecity of Pune.

Times OOH had revenues of Rs. 318 Million in the fiscal year 2006-2007 and operating loss of Rs. 15 Million. The operatingmargin was (5)%.

GENERALGENERALGENERALGENERALGENERAL

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a system of internal controls to ensure that all its assets are properly safeguarded and not exposed torisks arising out of unauthorized use or disposal. The internal control system is supplemented by a programme of internalaudit to ensure that the assets are properly accounted for and the business operations are conducted in adherence to laiddown policies and procedures.

0

5000

10000

15000

20000

25000

2011F2010F2009F2008F2007F2006E20052004

Projected growth of Indian Out-of-home Advertising

Rs. M

illio

n

8500 900010000

12500

14500

16500

19000

21500

Source: FICCI-PriceWaterhouseCoopers Report, 2007


62

The Company has an Audit Committee of the Board of Directors which meets regularly to review, inter alia, risk managementpolicies, adequacies of internal controls and the audit findings on the various segments of the business.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLEEMPLOYED.

Specific need based training and development programmes for all levels of employees were imparted in order to optimizethe contribution of the employees to the Company�s business and operations. Occupational health safety and environmentalmanagement are given utmost importance. Material development in human resources/ industrial relations front has beendealt with in the Directors� Report, under the head �Operations� and �Industrial Relations�, which should be treated asforming part of this Management Discussion and Analysis. As on March 31, 2007, the employee strength (on permanentroll) of the Company was 679.

For and on behalf of the Board of Directors

Vineet JainVineet JainVineet JainVineet JainVineet Jain A. P. ParigiA. P. ParigiA. P. ParigiA. P. ParigiA. P. ParigiChairman Managing Director & CEO


Registered Office:Registered Office:Registered Office:Registered Office:Registered Office:Matulya Centre, 4th Floor, A � Wing,Senapati Bapat Marg, Lower Parel (West),Mumbai - 400 013.


63

AUDITORS� REPORTTO THE MEMBERS OF ENTERTAINMENT NETWORK (INDIA) LIMITED

1. We have audited the attached Balance Sheet of Entertainment Network (India) Limited (the Company), as atMarch 31, 2007, and the related Profit and Loss Account and Cash Flow Statement for the year ended on thatdate annexed thereto, which we have signed under reference to this report. These financial statements are theresponsibility of the Company’s Management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by the Management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report)(Amendment) Order 2004, (together the ‘Order’), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks ofthe books and records of the Company as we considered appropriate and according to the information andexplanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 ofthe said Order, to the extent applicable.

4. Further to our comments in Annexure referred to in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief, werenecessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far asappears from our examination of those books;

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are inagreement with the books of account;

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this reportcomply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e. On the basis of written representations received from the Directors, as on March 31, 2007, and taken onrecord by the Board of Directors, none of the Directors is disqualified as on March 31, 2007 from beingappointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

f. In our opinion, and to the best of our information and according to the explanations given to us, the saidfinancial statements together with the notes thereon and attached thereto, give in the prescribed manner theinformation required by the Act and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2007;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Partha GhoshPartnerMembership No. F-55913For and on behalf ofPrice Waterhouse & Co.Chartered Accountants

Place: MumbaiDate : May 16, 2007


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ANNEXURE TO THE AUDITORS� REPORTREFERRED TO IN PARAGRAPH 3 OF AUDITORS� REPORT OF EVEN DATE TO THE MEMBERS OF ENTERTAINMENTNETWORK (INDIA) LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2007

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details andsituation, of its fixed assets.

(b) The fixed assets of the Company are physically verified by the Management according to a phasedprogramme designed to cover all the items once in every three years, which in our opinion, is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to the programme,physical verification was carried out during the year. The Company is in the process of reconciling thephysical assets with the Fixed Assets Register. We are informed by the Management, that the differencesif any would not be material. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixedassets has not been disposed of by the Company during the year.

(ii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other partiescovered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) ofparagraph 4 of the Order are not applicable to the Company.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other partiescovered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) and (iii)(g) ofparagraph 4 of the Order are not applicable to the Company.

(iii) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business for the purchase offixed assets and for the sale of services. Further, on the basis of our examination of the books and records ofthe Company, carried out in accordance with the auditing standards generally accepted in India, and accordingto the information and explanations given to us, we have neither come across nor have been informed of anycontinuing failure to correct major weaknesses in the aforesaid internal control system.

(iv) According to the information and explanations given to us, there are no transactions made in pursuance ofcontracts or arrangements referred to in Section 301 of the Act during the year to be entered in the registerrequired to be maintained under that Section and exceeding the value of Rupees Five Lakhs in respect of anyparty during the year, which have been made at prices which are not reasonable having regard to theprevailing market prices at the relevant time.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 58A of the Actand the rules framed there under.

(vi) In our opinion, the Company has an internal audit system commensurate with its size and nature of itsbusiness.

(vii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

(viii) (a) According to the information and explanations given to us and the records of the Company examined byus, in our opinion, the Company is generally regular in depositing undisputed statutory dues includingprovident fund, investor education and protection fund, income tax, wealth tax, service tax, customs duty,cess and other material statutory dues as applicable with the appropriate authorities. As informed to us,employees’ state insurance, excise duty and sales tax are not applicable to the Company.

(b) According to the information and explanations given to us and the records of the Company examined byus, there are no dues of income-tax, wealth-tax, service tax, custom duty and cess which have not beendeposited on account of any dispute.

(ix) The Company has no accumulated losses as at March 31, 2007 and it has not incurred any cash losses duringthe financial year ended on that date or in the immediately preceding financial year.


65

(x) According to the records of the Company examined by us and the information and explanation given to us,the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holdersas at the balance sheet date.

(xi) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.

(xii) The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are notapplicable to the Company.

(xiii) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

(xiv) According to the information and explanations given to us, the terms and conditions of the guarantees givenby the Company for the loan taken by the subsidiary Company, Times Innovative Media Limited (formerlyknown as Times Innovative Media Private Limited) from the Banks and financial institutions during the year isnot prejudicial to the interest of the Company.

(xv) In our opinion, and according to the information and explanations given to us, on an overall basis, the termloans have been applied for the purposes for which they were obtained.

(xvi) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according tothe information and explanations given to us, there are no funds raised on a short-term basis which have beenused for long-term investment.

(xvii) The Company has not made any preferential allotment of shares to parties and companies covered in theregister maintained under Section 301 of the Act during the year.

(xviii) The Company has not issued any debentures during the year.

(xix) The Company has not raised any money by the public issues during the year. The Management has disclosedthe end use of the monies during the year, out of the public issue raised in the earlier year public issue (ReferNote 6 on Schedule 18) and the same has been verified by us.

(xx) During the course of our examination of the books and records of the Company, carried out in accordancewith the generally accepted auditing practices in India, and according to the information and explanationsgiven to us, we have neither come across any instance of material fraud on or by the Company, noticed orreported during the year, nor have we been informed of any such case by the management.

(xxi) The Clause (ii) of paragraph 4 of the Companies (Auditor’s Report) Order 2003, as amended by the Companies(Auditor’s Report) (Amendment) Order, 2004, are not applicable in the case of the Company, since in ouropinion there are no matters which arise to be reported in the aforesaid order.


Place: MumbaiDate: May 16, 2007

ANNEXURE TO THE AUDITORS� REPORTREFERRED TO IN PARAGRAPH 3 OF AUDITORS� REPORT OF EVEN DATE TO THE MEMBERS OF ENTERTAINMENTNETWORK (INDIA) LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2007


66

Schedule As at As atMarch 31, 2007 March 31, 2006

Rupees Rupees

SOURCES OF FUNDS

Shareholders’ Funds

Capital 1 475,845,750 475,636,650

Share Application Money 1A 756,000 -

Reserves and Surplus 2 2,460,685,129 2,161,773,093

Loan Funds

Secured Loans 3 318,011,766 -

Unsecured Loans 4 750,000,000 350,000,000

TOTAL 4,005,298,645 2,987,409,743

APPLICATION OF FUNDS

Fixed Assets 5

Gross Block 2,753,321,554 2,548,879,911

Less:Depreciation / Amortisation 459,127,324 279,719,851

Net Block 2,294,194,230 2,269,160,060

Capital work-in-progress including Capital Advances 567,736,843 98,472,251

2,861,931,073 2,367,632,311

Investments 6 65,228,849 342,481,214

Deferred Tax Assets (net) 7 23,709,216 -

Current Assets, Loans and Advances:

Sundry Debtors 8 480,077,801 352,688,071

Cash and Bank Balances 9 105,505,580 39,438,728

Loans and Advances 10 780,593,986 241,182,604

1,366,177,367 633,309,403

Less: Current Liabilities and Provisions 11

Current Liabilities 293,334,781 346,022,762

Provisions 18,413,079 9,990,423

311,747,860 356,013,185

Net Current Assets 1,054,429,507 277,296,218

TOTAL 4,005,298,645 2,987,409,743

Notes to the Financial Statements 18

The Schedules referred to herein form an integral part of the Balance Sheet

This is the Balance Sheet referredto in our report of even date.


MumbaiDated: May 16, 2007


Vineet Jain A. P. Parigi N. KumarChairman Managing Director Director

Deepak M. Satwalekar Rama Bijapurkar Ravindra KulkarniDirector Director Director

Ravindra Dhariwal N. Subramanian Anil FernandesDirector Chief Financial Officer Sr. Vice President -

Legal & Company Secretary

BALANCE SHEET AS AT MARCH 31, 2007


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Schedule 2006-2007 2005-2006Rupees Rupees

Income

Sales 12 1,672,035,447 1,174,144,543

Other Income 13 33,215,710 13,486,248

1,705,251,157 1,187,630,791

Expenditure

Production Expenses 14 71,186,847 44,977,016

License Fees 15 86,457,893 64,256,063

Employee Costs 16 358,812,516 241,180,486

Administration and Other Expenses 17 711,266,853 455,818,065

Interest (Refer Note 1(iv) on Schedule 18) 20,282,149 25,925,610

Depreciation (Refer Note 1(iii) on Schedule 18) 179,407,473 123,344,436

1,427,413,731 955,501,675

Profit Before Taxation and Exceptional Item 277,837,426 232,129,116

Add: Exceptional Item (Refer Note 8 on Schedule 18) - 98,111,109

Profit Before Taxation 277,837,426 330,240,225

Provision for Taxation

- Current Tax (Refer Note 1(vi) on Schedule 18) 30,500,000 28,007,917

- Minimum Alternate Tax Credit Entitlement (30,500,000) -

- Deferred Tax (23,709,216) -

- Fringe Benefits Tax 10,700,000 7,500,000

- Wealth Tax 57,261 40,000

Profit after Taxation 290,789,381 294,692,308

Profit and Loss Account Balance Brought Forward 292,477,262 (1,019,767,046)

Adjustment on account of reduction of Share Capital / SecuritiesPremium Account (Refer Note 4 on Schedule 18) - 1,017,552,000

Profit and Loss balance carried forward to the Balance Sheet 583,266,643 292,477,262

Earnings Per Share (Refer Note 22 on Schedule 18)

- Basic 6.11 8.22

- Diluted 6.11 8.21


The Schedules referred to herein form an integral part of the Profit and Loss Account

This is the Profit and Loss Accountreferred to in our report of even date.








PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007


68

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








CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2007

2006-2007 2005-2006Rupees Rupees

A) CASH FLOW FROM OPERATING ACTIVITIES :Profit Before Taxation 277,837,426 330,240,225Adjustments for :Depreciation 179,407,473 123,344,436Interest Expense 20,282,149 25,925,610Provision for Employee Stock Option Scheme expenses 4,775,557 2,438,609Interest on loan to Subsidiary Company (17,237,251) (205,151)Profit on sale of Investments (5,075,942) (6,829,331)Loss on sale of Fixed Assets - 24,749Provision for bad and doubtful debts withdrawn (2,444,483) -Provision for bad and doubtful debts 10,513,289 4,038,618Provision for doubtful debts written back - (5,058,024)Exceptional Item - (98,111,109)Provision for Retirement Benefits 5,940,652 543,318Operating Profit Before Working Capital Changes 473,998,870 376,351,950Adjustments for changes in working capital :Increase in Sundry Debtors (135,458,536) (143,393,900)Increase in Other receivable (67,921,232) (98,573,198)(Decrease) / Increase in Trade and Other payables (69,466,225) 34,437,727Cash generated from operations 201,152,877 168,822,579Taxes paid (net) (44,833,135) (38,578,679)Net Cash before exceptional item 156,319,742 130,243,900Exceptional Item - 98,111,109Net Cash from Operating Activities (A) 156,319,742 228,355,009

B) CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (204,441,644) (2,149,920,946)Proceeds from sale of Fixed Assets - 66,468Capital Work in Progress (469,264,592) (98,472,251)Purchase of shares in Subsidiary Company - (40,000,000)Loan given to Subsidiary Company (471,970,731) (36,000,000)Loan repayment by Subsidiary Company 46,500,000 -Interest on loan to Subsidiary Company 9,450,012 205,151Purchase of Investments (557,854,611) (848,353,840)Proceeds from Sale of Investments 840,182,915 615,673,077Net Cash used in Investing Activities (B) (807,398,651) (2,556,802,341)

C) CASH FLOW FROM FINANCING ACTIVITIES :Proceeds from fresh issue of Shares [net of issue expenses of Rupees Nil(Previous year: Rupees 158,341,205)] - 2,002,587,645Proceeds from Long Term Borrowings:- Receipts 718,011,766 350,000,000Proceeds from Short Term Borrowings:- Receipts - 1,770,000,000- Payments - (1,770,000,000)Proceeds from Exercise of Employee Stock Option Scheme 1,881,900 -Reciept of Share Application Money 756,000 -Interest Paid - (25,925,610)Net Cash Flow from / (used in) Financing Activities (C) 720,649,666 2,326,662,035Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) 69,570,757 (1,785,297)Cash and Cash Equivalents as at the beginning of the year 14,914,299 16,699,596Cash and Cash Equivalents as at the end of the year 84,485,056 14,914,299

69,570,757 (1,785,297)NOTES ON CASH FLOW STATEMENT :1 Cash and cash equivalents at the end of the year as per Balance Sheet 105,505,580 39,438,728

Less: Book overdraft as per Schedule (21,020,524) (24,524,429)84,485,056 14,914,299

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 Instituteof Chartered Accountants of India except in case of interest paid which has been considered on the basis of actual movement of cash with necessaryadjustments in corresponding assets and liabilities.

3 Previous year’s figures have been regrouped and rearranged wherever necessary.4 Cash and Cash Equivalents represent Cash and Bank Balances only.


69

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2007

As at As atMarch 31, 2007 March 31, 2006

Rupees Rupees

SCHEDULE 1 : CAPITALAuthorised Capital120,000,000 (Previous Year : 120,000,000) Equity shares of Rs. 10 each 1,200,000,000 1,200,000,000Issued and Subscribed47,584,575 (Previous Year : 47,563,665) Equity shares of Rs. 10 each fully paid-up 475,845,750 475,636,650

475,845,750 475,636,650

Notes:1. Of the above, 30,526,560 Equity Shares of Rupees 10 each are held by Times

Infotainment Media Limited, the holding Company and its nominees.2. Of the above, 3,391,840 Equity Shares of Rupees 10 each are held by Bennett,

Coleman & Co. Limited, the ultimate holding Company.3. During the year, the Company has issued 20,910 Equity Shares of face value of

Rupees 10 each at Rupees 185.25 per share pursuant to the exercise of EmployeeStock Options granted to the employees. (Refer Note 5 on Schedule 18)

4. During the previous year, the Company has adjusted accumulated losses aggregatingRupees 830,416,000 against Equity Share Capital. (Refer Note 4 on Schedule 18)

5. For Employee Stock Option Scheme 2005. (Refer Note 5 on Schedule 18)

SCHEDULE 1A : SHARE APPLICATION MONEYEquity Share Application Money 756,000 -Note:8,400 shares of Rupees 10 each offered to employees on November 15, 2006against which Rupees 756,000 received as application money on January 16,2007 and March 31, 2007

756,000 -

SCHEDULE 2 : RESERVES AND SURPLUSSecurities Premium AccountAs per last Balance Sheet 1,866,134,995 187,136,000Less: Capital Reduction (Refer Note 4 on Schedule 18) - (187,136,000)

1,866,134,995 -Add: Premium on issue of shares (Refer Note 4 and 5 on Schedule 18) - 2,024,476,200

1,866,134,995 2,024,476,200Add: Receipts on exercise of employee stock options 3,664,477 -

1,869,799,472 2,024,476,200Less: Share Issue Expenses (Refer Note 23 on Schedule 18) - (158,341,205)

1,869,799,472 1,866,134,995

Profit and Loss Account Balance 583,266,643 292,477,262

Employees Stock Options Outstanding(Refer Note 5 on Schedule 18)As per last Balance Sheet 3,160,836 -Less: Fair Value of Options exercised during the year (1,991,678) -

1,169,158 -Add: Fair Value of Options amortised during the year 6,449,856 3,160,836

7,619,014 3,160,8362,460,685,129 2,161,773,093


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SCHEDULE 5

FIXED ASSETS (Refer Note 1 (iii), (iv), (xi),(xv) and 17 on Schedule 18) (Rupees)GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

PARTICULARS As at Additions Deletions/ As at As at For the year On Deletions/ As at As at As atMarch 31, during Adjustments March 31, March 31, Adjustments March 31, March 31, March 31,

2006 the year during the year 2007 2006 2007 2007 2006

Tangible Asset

Land - Leasehold 2,036,147 - - 2,036,147 - - - - 2,036,147 2,036,147

Building 7,578,551 - - 7,578,551 1,485,200 310,482 - 1,795,682 5,782,869 6,093,351

Leashold Improvements 33,370,546 47,827,676 - 81,198,222 25,999,779 5,585,395 - 31,585,174 49,613,048 7,370,767

Office Equipment 299,777,090 108,764,397 - 408,541,487 121,188,766 33,822,829 - 155,011,595 253,529,892 178,588,324

Computers 44,557,867 22,902,027 - 67,459,894 30,313,340 11,770,079 - 42,083,419 25,376,475 14,244,527

Furniture and Fixtures 22,909,795 411,922 - 23,321,717 12,135,375 1,995,155 - 14,130,530 9,191,187 10,774,420

Motor Vehicles 11,130,349 637,400 - 11,767,749 7,073,921 1,146,184 - 8,220,105 3,547,644 4,056,428

Intangible Asset(Refer Note 9 onSchedule 18)

Migration Fees 815,234,695 - - 815,234,695 81,523,470 81,523,470 - 163,046,940 652,187,755 733,711,225

One Time Entry Fees 1,312,284,871 23,898,221 - 1,336,183,092 - 43,253,879 - 43,253,879 1,292,929,213 1,312,284,871(Refer Notes 1 and 2 below)

GRAND TOTAL 2,548,879,911 204,441,643 - 2,753,321,554 279,719,851 179,407,473 - 459,127,324 2,294,194,230 2,269,160,060

Previous Year 399,121,465 2,149,920,946 162,500 2,548,879,911 156,446,698 123,344,436 71,283 279,719,851

Capital Work-in-Progress [Includes Capital Advance of Rupees 247,097,409 (Previous Year Rupees 14,578,275)] - Refer Note 3 below 567,736,843 98,472,251

2,861,931,073 2,367,632,311

Notes:

1) Includes borrowing cost Rupees 23,893,221(Previous year Rupees 11,287,871)

2) One Time Entry Fees will be amortised from the date of operationalisation of the respective station.

3) Includes Pre-operative expenditure pending capitalisation Rupees 64,724,918 (Previous Year Rupees 8,837,863)



Rupees Rupees

SCHEDULE 3 : SECURED LOANS

Working Capital Loan from Standard Chartered Bank (Refer Note 1 below) 47,500,000 -

[Repayable within one year Rupees 47,500,000 (Previous Year Rupees Nil)]

Cash Credit from Kotak Mahindra Bank Limited (Refer Note 2 below) 270,511,766 -

Notes:

1) A pari passu charge by way of hypothecation on book debts and tangible fixedassets (moveable) of the company, both present and future in favour of the Bank.

2) A pari passu charge by way of hypothecation over all the current assets and allmoveable fixed assets both present and future in favour of the Bank.

318,011,766 -

SCHEDULE 4 : UNSECURED LOANS

From Bennett, Coleman & Co. Limited 750,000,000 350,000,000

750,000,000 350,000,000


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SCHEDULE 7 : DEFERRED TAX(Refer Note 7 on Schedule 18)

Deferred tax assets and liabilities are attributable to the following items:

Assets:

Provision for Doubtful Debts 4,115,313 -

Provision for Doubtful Advances 2,274,016 -

Provision for Leave Encashment 1,987,422 -

Provision for Gratuity 3,427,551 -

Expenses disallowed u/s 43B 39,488 -

Amortisation of Preliminary Expenses 32,292,105 -

Unabsorbed Depreciation / Business Losses 84,206,946 -

128,342,841 -

Liabilities:

Depreciation 104,633,625 -

104,633,625 -

23,709,216 -



Rupees Rupees

SCHEDULE 6 : INVESTMENTS(Refer Note 1(v) on Schedule 18)

Long Term (Unquoted), at cost

Investment in Subsidiary Company :4,000,000 (Previous Year : 4,000,000) fully paid Equity Shares of Times InnovativeMedia Limited (formerly known as Times Innovative Media Private Limited) ofRupees 10 each 40,000,000 40,000,000

Current (Unquoted)

Nil (Previous Year: 211,501) Units of HDFC Mutual Fund - Floating Rate Income Fund -Short Term Plan - Growth - 2,447,786

Nil (Previous Year: 7,307,168) Units of Standard Chartered Mutual Fund - G 65 LiquidityManager - Growth - 73,500,000

Nil (Previous Year: 849,254) Units of Prudential ICICI Mutual Fund - Liquid Plan - 14,334,271

Nil (Previous Year: 922,322) Units of Prudential ICICI Mutual Fund - Floating Rate Plan ‘D’ - 9,384,801

6,322 (Previous Year : 3,439,665) Units of HDFC Mutual Fund - Cash ManagementFund - Savings Plan - Growth 96,656 50,000,000

2,278,216 (Previous Year: 2,456,092) Units of Prudential ICICIMutual Fund - Liquid Super Institutional - Growth 25,000,000 25,046,980

124 (Previous Year: 125,442) Units of DSP Merrill LynchMutual Fund Liquidity Fund - Institutional - Growth 132,193 127,767,376

65,228,849 342,481,214

Note:

Aggregate amount of unquoted investment in Mutual Fund Units Rupees 25,228,849; Previous Year Rs. 302,481,214

Aggregate amount of Repurchase price in Mutual Fund Units Rupees 25,252,722; Previous Year Rs. 303,888,024


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Rupees Rupees

SCHEDULE 8 : SUNDRY DEBTORS(Unsecured) (Refer Note 10 on Schedule 18)Debts Outstanding for a period exceeding six monthsConsidered Good 16,267,367 7,837,218Considered Doubtful 11,848,833 3,972,011

28,116,200 11,809,229Other DebtsConsidered Good 463,810,434 344,850,853Considered Doubtful 258,591 66,607

464,069,025 356,726,689Less: Provision For Doubtful Debts 12,107,424 4,038,618

480,077,801 352,688,071

SCHEDULE 9 : CASH AND BANK BALANCESCheques in hand 29,883,283 14,205,863Balance with Scheduled Bank on:Current Accounts 2,279,242 18,675,181Short-Term Deposit Accounts 73,343,055 6,557,684[Deposit aggregating Rupees 73,323,055 and Rupees 20,000 (PreviousYear: Rupees 6,537,684 and Rupees 20,000) are lying under lien with Banksand Sales Tax Department, Rajasthan respectively]

105,505,580 39,438,728

SCHEDULE 10 : LOANS AND ADVANCES(Unsecured and Considered Good)Advances Recoverable in Cash or in Kind or for Value to be ReceivedConsidered Good 89,538,264 89,454,847Considered Doubtful 440,250 440,250

89,978,514 89,895,097DepositsConsidered Good 113,818,427 65,085,402Considered Doubtful 6,250,000 6,250,000

210,046,941 161,230,499Less: Provision For Doubtful Loans and Advances and deposits 6,690,250 6,690,250

203,356,691 154,540,249Advance to TIML Employees’ Stock Option Trust 29,174,600 29,174,600Advance payment of tax [Net of Provision for Taxation Rupees 58,000,000 27,525,633 21,467,755(Previous Year : Rupees 35,153,000)]Minimum Alternate Tax Credit Entitlement 30,500,000 -Due from Bennett, Coleman & Co. Limited, the Holding Company [Maximum balance 17,121,323 -outstanding during the year Rupees 25,527,042 (Previous Year : Rupees Nil)]Due from Times Infotainment Media Limited, the Holding Company 1,804,435 -[Maximum balance outstanding during the year Rupees 1,804,435 (Previous Year :Rupees 7,260,206)]Due from Times Innovative Media Private Limited, the SubsidiaryCompany [Maximum 9,640,573 -balance outstanding during the year Rupees 9,794,347 (Previous Year : Rupees Nil)]Loan to Times Innovative Media Private Limited, the Subsidiary Company [Maximum 461,470,731 36,000,000balance outstanding during the year Rupees 461,470,731 (Previous Year :Rupees 36,000,000)]

780,593,986 241,182,604


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Rupees Rupees

SCHEDULE 11 : CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES

Sundry Creditors (Refer Note 11 on Schedule 18) 256,701,217 313,541,307

Book Overdraft 21,020,524 24,524,429

Other Liabilities 15,323,540 7,952,526

Security Deposits 289,500 4,500

293,334,781 346,022,762

PROVISIONS

Gratuity (Refer Note 1(x) on Schedule 18) 10,083,997 6,242,717

Leave Encashment (Refer Note 1(x) on Schedule 18) 5,847,078 3,747,706

Fringe benefits tax (Provision in excess of payments of Rs. 15,717,996) 2,482,004 -

18,413,079 9,990,423

SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FORTHE YEAR ENDED MARCH 31, 2007

2006-2007 2005-2006Rupees Rupees

SCHEDULE 12 : SALES

Sales (Gross) 1,672,035,447 1,174,144,543(Refer Note 1(viii) on Schedule 18)

1,672,035,447 1,174,144,543

SCHEDULE 13 : OTHER INCOME

Profit on Sale of Investments 5,075,942 6,829,331

Interest on:

- Loans to Employees 154,357 88,097

- Income Tax Refund 507,884 659,962

- Fixed Deposit (Gross) 3,492,906 296,024[Tax deducted at source Rupees 717,794 (Previous Year: Rupees 80,734)]

- Others 17,237,251 205,151

Provisions for Doubtful Debts Withdrawn 800,531 1,764,871

Other Provisions Written Back - 727,385

Service / Other Charges - 1,068,055

Miscellaneous Income 5,946,839 1,847,372

33,215,710 13,486,248


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SCHEDULE 17 : ADMINISTRATION AND OTHER EXPENSES

Rent (Net) 77,881,505 51,028,396

Rates and Taxes 934,328 1,905,695

Electricity 31,502,402 21,205,015

Marketing 386,566,285 221,693,841

Travelling and Conveyance 55,920,939 45,285,020

Insurance 3,003,722 2,589,749

Communication 12,436,171 8,979,633

Repairs and Maintenance on:

- Buildings 1,354,634 1,007,463

- Plant and Machinery 9,075,347 8,511,812

- Others 9,785,565 9,875,273

Bank Charges 3,155,147 10,913,608

Training 6,772,310 3,935,147

Legal and Professional Fees 44,299,336 26,979,627

Recruitment 11,939,886 7,888,294

Software 8,930,872 6,130,607

Business Promotion 5,881,992 4,325,518

Security 6,004,137 3,319,741

Auditors’ Remuneration (Refer Note 16 on Schedule 18) 1,675,072 661,554

Loss on Sale of Fixed Assets - 24,749

Provision for Doubtful Debts 10,513,289 4,038,618

Less: Provision for doubtful debts written back (1,643,952) (3,293,153)

Bad Debts written off 7,382,733 7,680,690

Miscelleneous 17,895,133 11,131,168

711,266,853 455,818,065

SCHEDULE 14 : PRODUCTION EXPENSES

Royalty 53,454,529 37,530,454

Other Production Expenses 17,732,318 7,446,562

71,186,847 44,977,016

SCHEDULE 15 : LICENSE FEES

License Fees (Refer Note 1(ix) on Schedule 18) 86,457,893 64,256,063

86,457,893 64,256,063

SCHEDULE 16 : EMPLOYEE COSTS

Salaries, Wages and Allowances 308,235,519 210,035,799

Contributions to Provident and Other Funds (Refer Note 1(x) on Schedule 18) 16,650,243 9,475,166

Welfare Expenses 29,151,197 19,230,912

Employees Stock Options Expense (Refer Note 5 on Schedule 18) 4,775,557 2,438,609

358,812,516 241,180,486

2006-2007 2005-2006Rupees Rupees


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SCHEDULE 18NOTES TO THE FINANCIAL STATEMENTS

1. Significant Accounting Policies

i. Basis of Accounting

These financial statements have been prepared under historical cost convention on accrual basis and comply with theAccounting Standards referred to in Section 211 (3C) of The Companies Act, 1956, of India (The Act).

ii. Use of Estimates

The preparation of financial statements in accordance with the generally accepted accounting principles requires theManagement to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dateof financial statements and the reported amount of expenses of the year. Actual results could differ from these estimates.Any revision to such accounting estimates is recognized in the accounting period in which such revision takes place.

iii. Fixed assets and Depreciation

• Tangible assets

Tangible fixed assets are stated at cost less accumulated depreciation.

Depreciation on tangible fixed assets is provided on written down value method at the rates and in the mannerspecified in Schedule XIV to the Act. The cost of leasehold improvements are amortised over the primary period oflease of the property. Leasehold land is not amortised. Tangible assets individually costing less than Rs. 5,000 aredepreciated @ 100% in the year of purchase.

• Intangible assets

Migration fees paid by the Company for existing licenses upon migration to Phase II of the Licensing policy andOne Time Entry Fees paid by the Company for acquiring new licenses, has been capitalised as an asset.

The migration fee capitalised is being amortised, with effect from April 1, 2005, equally over a period of ten years,being the period of the license. One time entry fee will be amortised over a period of ten years, being the periodof license, from the date of operationalisation of the station.

iv. Borrowing Cost

Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalised as part of cost of theasset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

v. Investments

Long term investments are stated at cost. Provision is made for permanent diminution in value, if any.Current investments are stated at lower of cost and market value/ repurchase price.

vi. Current taxation

Provision for income tax has been made at the current tax rates based on assessable income or on the basis of Section115JB of the Income Tax Act, 1961 (Minimum Alternate Tax) whichever is higher.

vii. Deferred taxation

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differencebetween taxable income and accounting income that originate in one period and are capable of reversal in one ormore subsequent periods.

viii. Revenue Recognition

Revenue from radio broadcasting is recognised on an accrual basis on the airing of client’s commercials.

ix. License Fees

As per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 license fees are charged to revenueat the rate of 4% of gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for the concerned city,whichever is higher. Gross Revenue for this purpose shall mean revenue on the basis of billing rates inclusive of anytaxes and without deduction of any discount given to the advertiser and any commission paid to advertising agencies.Barter advertising contracts shall also be included in the gross revenue on the basis of relevant billing rates. ROTEFmeans 25% of highest valid bid in the city.

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2007AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007


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x. Retirement Benefits

Contributions are made to the Provident Fund Trust on actual liability basis.

Liabilities in respect of gratuity to employees and leave encashment benefits have been determined and accrued on thebasis of actuarial valuation.

xi. Software

Software obtained initially together with hardware is capitalised along with the cost of hardware and depreciated in thesame manner as the hardware. All subsequent purchases of software are treated as revenue expenditure and charged inthe year of purchase.

xii. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transactions. Foreigncurrency denominated assets and liabilities are translated into rupees at the exchange rates prevailing at the date of theBalance Sheet. All exchange differences are dealt with in the Profit and Loss Account, except those relating to theacquisition of fixed assets from a country outside India, which are adjusted to the cost of such assets.

xiii. Pre-operative Expenditure

Expenditure incurred by the Company from the date of acquisition of license for a new station upto the date ofoperationalisation of the station not directly attributable to fixed assets are charged to the Profit and Loss account in theyear in which such expenditure is incurred.

xiv. Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requiresan outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for acontingent liability is made when there is a possible obligation or a present obligation that may, but probably will not,require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood ofoutflow of resources is remote, no provision or disclosure is made.

xv. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If anysuch indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of theasset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount,the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and isrecognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessedimpairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverableamount.

2. Contingent Liabilities

a) Guarantees issued by banks on behalf of the Company Rupees 320,376,455. (Previous Year: Rupees 554,220,000)

b) Counter Guarantee issued by the Company to HDFC Bank on behalf of Times Innovative Media Limited (formerlyknown as Times Innovative Media Private Limited) (a wholly owned subsidiary) Rupees 150,000,000. (Previous Year:Rupees Nil)

c) Letter of Credit issued by Bank on behalf of the Company Rupees 5,961,242 (Previous Year: Rupees 5,213,087).

3. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account Rupees 145,572,480 [net of advances of Rupees48,902,937 (Previous Year: Rupees 80,921,909) (Previous year: Rupees 233,902,673)]

4. Reduction of Share Capital/ Securities Premium Account:

Pursuant to the resolutions passed at the Extra Ordinary General Meeting held on August 26, 2006, the approval of theHonourable High Court of Bombay, vide its order dated October 28, 2005 on petition no. 680 of 2005 under section 78,100 of The Act and based on the legal opinion obtained, the Company has set off an amount of Rupees 1,017,552,000standing debit to the Profit and Loss Account as at March 31, 2005 as follows:

Against Securities Premium Account Rupees 187,136,000

Against Share Capital Account Rupees 830,416,000

SCHEDULE 18NOTES TO THE FINANCIAL STATEMENTS (Contd.)



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5. Employee Stock Option Scheme (ESOS)

Pursuant to the resolution passed by the Board of directors and members of the Company at the meeting of Board ofDirectors and Extra Ordinary General Meeting of the Members of the Company respectively, held on November 5, 2005,the Company had introduced Employee Stock Option Scheme (“the scheme”) for its existing and future permanent employeesand directors and existing and future permanent employees and directors of its Subsidiary Company and Holding Company.

The scheme provides that the total number of options granted there under will be 109,360. Pursuant to a resolution passedby the Remuneration / Compensation Committee at its meeting held on November 5, 2005, all 109,360 options that areexercisable for Equity Shares have been granted at an exercise price of Rs.90.

In accordance with the Guidance Note on “Accounting for Employee Share-based Payments” issued by the ‘The Institute ofChartered Accountants of India’ and Employee Stock Option and Stock Purchase Guidelines, 1999 issued by the Securitiesand Exchange Board of India, fair value of these options, on the grant date, is amortised over the vesting period.

Particulars 2006-2007 2005-2006

Options outstanding at the beginning of the year 109,360 -

Add:

Options granted during the year - 109,360

109,360 109,360

Less:

Options forfeited during the year 2,610 -

Options exercised during the year 20,910 -

Options expired during the year - -

Options outstanding at the end of the year 85,840 109,360

Exercise price for options outstanding at the end of the year (Rupees) 90 90

Fair value of options amortised during the year (Rupees) 6,449,856 3,160,836

Fair value of the options granted during the previous year, based on the report received from an independent firm ofChartered Accountants, as per Black Scholes method of valuation, was as follows:

Vesting Date Number of Fair value ofOptions the option

November 15, 2006 34,975 95.25

April 1, 2007 42,775 98.40

July 1, 2007 17,255 100.36

April 1, 2008 8,700 105.67

July 1, 2008 5,655 107.30

Weighted average 98.74

Further, amortisation of fair value of the options granted to the employees of Times Innovative Media Limited (formerlyknown as Times Innovative Media Private Limited), the Subsidiary Company and Times Infotainment Media Limited, theHolding Company aggregating Rupees 624,923 (Previous year: Rupees 282,441) and Rupees 1,049,376 (Previous year:Rupees 439,786) respectively have been charged to the respective companies.



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6. In the previous year, the Company concluded its Initial Public Offering (IPO) through which 13,200,000 equity shares ofRupees 10 each (including Green Shoe Option of 1,200,000 shares) were issued by the Company at a premium of Rupees152 per share. The utilisation of IPO proceeds is as under:

Purpose Uses of Funds Actual funds usedas projected in the as at March 31,

prospectus 2007(Rupees) (Rupees)

1 OTEF and Migration Fee Payments under the Phase II Policy 1,450,000,000 1,770,000,000

2 Investment in the Subsidiary 100,000,000 55,207,126

3 General Corporate Purposes 258,000,000 18,071,216

4 IPO Expenses 136,000,000 100,721,658

1,944,000,000 1,944,000,000

7. Deferred Tax

In the current year, based on prudence and virtual certainty, the Company has recognised deferred tax asset to the extent ofRs. 23,709,216.

8. Exceptional Item

Exceptional item represents write back of provision for license fees aggregating Rupees 98,111,109, provided for Delhi,Chennai and Kolkata stations from August 2002 (time line for operationalisation of these stations) up to the date of actualoperationalisation of each station, which has been waived off by the Government of India in the Phase II Radio policyannounced on July 13, 2005.

9. One Time Entry Fee (OTEF) and Migration Fee

As per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company had been given theoption to migrate all its existing license from Phase I regime to Phase II regime on payment of migration fees. Migration feesfor each station shall be equal to the average of all successful bids received for that city. The Company had exercised theoption and has migrated its licenses for all the seven cities to Phase II regime by payment of migration fees aggregatingRupees 815,234,696.

Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. Thepayment made by the Company to acquire these frequencies (One Time Entry Fees) is Rupees 1,301,000,000.

Based on the opinion obtained from an independent firm of Chartered Accountant, both Migration Fees and One Time EntryFees has been capitalised as Intangible Asset.

10. Sundry Debtors

Sundry Debtors includes following balances:

Name of the party Balance as at

March 31, 2007 March 31, 2006

Bennett, Coleman & Company Limited (BCCL) 56,089,187 10,689,072

Times Infotainment Media Limited (TIML) 91,945 964,112

Times Innovative Media Limited (Formerly known asTimes Innovative Media Private Limited) (TIM) - 10,000

Times Internet Limited (TIL) 417,090 932,871

Times Global Broadcasting Co. Limited (TGBCL) - 2,504,239

Worldwide Media Limited (WWM) 1,122,153 -

SCHEDULE 18

NOTES TO THE FINANCIAL STATEMENTS (Contd.)



79

11. Sundry Creditors

i. Due to small scale industrial undertakings Rupees Nil. This information has been determined to the extent suchparties have been identified on the basis of information available with the Company. This has been relied upon by theauditors.

ii. The information pertaining to micro and small enterprises as required to be disclosed in accordance with Section 22of Micro, Small and Medium Enterprises Development Act, 2006 is not readily ascertainable and hence notdisclosed.

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

12. Managerial Remuneration

2006-2007 2005-2006

Rupees Rupees

Salaries and Bonus 10,106,266 9,366,679

Contribution to Provident and Other Funds* 367,200 352,800

Perquisites 3,621,510 2,597,183

Total 14,094,976 12,316,662

* excludes contribution to Gratuity fund.

Note: The computation of profit under Section 309(5) of the Companies Act, 1956 is not applicable as no commission ispayable to the Managing Director.

13. CIF Value of Imports

2006-2007 2005-2006

Rupees Rupees

Capital goods 89,177,360 1,238,160

Total 89,177,360 1,238,160

14. Expenditure in Foreign Currency

2006-2007 2005-2006

Rupees Rupees

Travel 943,315 -

Training 1,958,673 1,678,469

Consultancy 1,645,948 -

Marketing 2,535,926 -

Others 138,991 117,675

Total 7,222,853 1,796,144

15. Earnings in Foreign Currency

2006-2007 2005-2006

Rupees Rupees

Airtime Sales - 3,221,043

Consultancy Services 685,098 -

Total 685,098 3,221,043

SCHEDULE 18




80

16. Auditors’ Remuneration

2006-2007 2005-2006

Rupees Rupees

Audit Fees 1,400,000 650,000

Other Services 250,000 -

Out of pocket expenses 25,089 11,554

Total 1,675,089 661,554

17. Pre-operative Expenditure

Pre-operative expenditure includes following expenditure:

Particulars 2006-2007 2005-2006Rupees Rupees

Other Production expenses 176,869 999,177

License Fees 908,504 -

Rent (Net) 18,064,703 2,302,003

Rates and Taxes 3,053,297 1,096,331

Electricity 470,186 -

Survey 4,971,837 90,722

Travel & Conveyance 7,525,893 1,304,444

Insurance 237,801 -

Communication 653,730 19,112


- Buildings - 77,348

- Plant and Machinery 42,542 114,154

- Others 102,563 5,332

Bank Charges 932,145 20,157

Training 6,363,364 -

Legal and Professional fees 1,963,108 1,093,962

Recruitment 7,115,871 -

Software Charges - 381,904

Business Promotion 1,922 11,740

Security 253,956 17,337

Miscellaneous 2,167,589 219,358

Salaries, Wages, Commission & Allowances 8,838,598 1,013,721

Contribution to Provident and Other Funds 419,634 -

Welfare Expenses 460,806 71,061

TOTAL 64,724,918 8,837,863

SCHEDULE 18




81

SCHEDULE 18


18. Additional information pursuant to the provision of paragraph 3 of Part II of Schedule VI to the Act:(i) Current year (2006-2007)

Purchase SaleNos. Value Nos. Value

Rupees Rupees

Units of HDFC Mutual Fund – Cash Management 3,154,863 47,506,647 6,588,206 98,068,289Fund – Savings Plan – Growth of Rupees 10 each

Units of HDFC Mutual Fund – Floating Rate Income - - 211,501 2,506,647Fund – Short Term Plan – Growth of Rupees 10 each

Units of Prudential ICICI Mutual Fund – Liquid 11,628,175 125,000,000 11,806,051 125,809,892Super Institutional – Growth of Rupees 10 each

Units of Prudential ICICI Mutual Fund – Floating - - 1,771,576 24,111,157Rate Plan ‘D’ of Rupees 10 each

Units of DSP Merrill Lynch Mutual Fund – Liquidity 255,629 265,500,003 380,947 395,108,886Fund – Institutional – Growth of Rupees 10 each

Units of Standard Chartered Mutual Fund – 118,699 119,847,961 118,699 120,230,082G 69 Liquidity Manager – Plus – Growth ofRupees 10 each

Units of Standard Chartered Mutual Fund – - - 7,307,168 74,347,962G 65 Liquidity Manager – Growth ofRupees 10 each

Total 557,854,611 840,182,915

(ii) Previous year (2005-2006)

Purchase SaleNos. Value Nos. Value

Rupees Rupees

Units of HDFC Mutual Fund – Liquid Fund of 4,104,463 55,500,000 4,416,294 60,319,239Rupees 10 each

Units of Prudential ICICI Mutual Fund – Liquid Plan 2,279,687 38,000,000 1,762,412 29,500,000of Rupees 10 each

Units of Prudential ICICI Mutual Fund – Floating 14,128,686 149,000,000 16,256,243 172,853,840Rate Plan ‘C’ of Rupees 10 each

Units of Prudential ICICI Mutual Fund – Floating 10,943,604 109,853,840 10,021,281 101,500,000Rate Plan ‘D’ of Rupees 10 each

Units of Standard Chartered Mutual Fund – G 65 7,307,168 73,500,000 - -Liquidity Manager – Growth of Rupees 10 each

Units of HDFC Mutual Fund – Floating Rate Income 10,760,483 122,500,000 13,326,061 154,000,000Fund – Short Term of Rupees 10 each

Units of Prudential ICICI Mutual Fund – Liquid 4,902,970 50,000,000 2,446,878 25,000,000Super Institutional – Growth of Rupees 10 each

Units of HDFC Mutual Fund – Cash Management 3,439,665 50,000,000 - -Fund – Savings Plan - Growth of Rupees 10 each

Units of DSP Merrill Lynch Mutual Fund – 196,688 200,000,000 71,246 72,500,000Liquidity Fund – Institutional of Rupees 10 each

Total 848,353,840 615,673,079



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19. Related Party Disclosures:

a) Parties where control exists

Related PartyBennett, Coleman & Co. Limited (BCCL) – Ultimate Holding CompanyTimes Infotainment Media Limited (TIML) – Holding CompanyTimes Innovative Media Limited (formerly known as Times Innovative Media Private Limited) (TIM) – Wholly ownedSubsidiary Company

b) Fellow Subsidiary CompaniesVardhaman Publishers Limited (VPL)Times Internet Limited (TIL)Worldwide Media Limited (WWM)Times Global Broadcasting Company Limited ( TGBCL)

c) Key Managerial PersonnelChairmanMr. Vineet Jain (w.e.f. January 19, 2007)Managing Director & Chief Executive OfficerMr. A. P. ParigiNon –Executive DirectorsMr. Ravindra DhariwalMr. N. KumarMr. Deepak M. SatwalekarMs. Rama BijapurkarMr. Ravindra Kulkarni (w.e.f. January 19, 2007)

d) Transaction with Related PartiesRupees

2006-2007 2005-2006

Particulars Parties where control exists Fellow Subsidiary Companies Parties where control exists Fellow Subsidiary Companies

BCCL TIML TIM TIL WWM TGBCL VPL BCCL TIML TIM TIL WWM TGBCL VPL

Transactions withRelated PartiesRecovery of Expenses 527,367 1,207,146 13,821,860 - - - - 560,000 2,246,991 4,445,298 - - - -Print AdvertismentExpenses 47,621,623 - - - - - - 58,929,297 - - - - - -Event Expenses - - 59,922,756 - - - - 212,750 16,060,065 24,169,756 - - - -Outdoor AdvertisementExpenses - - 810,000 - - - - 1,768,079 2,177,857 - - - - -Internet / FilmAdvertisement Expenses - - - 12,470,586 - - - - 964,111 - 2,529,170 - - -Office Rent 23,858,595 - - - - - 118,800 17,045,900 - - - - - 118,800Interest earned on ICD - - 17,168,905 - - - - - - 205,151 - - - -Interest paid on ICD 48,302,740 - - - - - - 2,274,780 - - - - - -Interest Capitalized -CWIP 31,474,986 - - - - - - 4,493,439 - - - - - -Miscelleneous Expenses - - - - - - - 192,193 - - - - - -Web Hosting Charges - - - - - - - - - - - - - -Reimbursement ofExpenses 4,251,774 - 899,005 139,889 - - - 5,784,241 12,050 - - - - -ESOP - 1,049,376 624,923 - - - - - 439,786 282,441 - - - -Fixed Asset Purchase 118,069 - - - - - - - - - - - - -Radio AdvertisementRevenue 72,383,603 73,173 108,708 1,862,568 999,780 2,802,798 - 65,319,764 1,635,310 9,074 2,927,584 1,593,058 2,272,449 -Loan taken 400,000,000 - - - - - - 350,000,000 - - - - - -Loan Given - - 425,470,731 - - - - - - 36,000,000 - - - -Loan repaid - - - - - - - 300,000,000 - - - - - -Balances with RelatedPartiesInvestment in Subsidiary - - 40,000,000 - - - - - - 40,000,000 - - - -Advance Given 17,121,323 1,804,435 9,640,573 - - - - 3,920,000 484,815 4,616,532 - - - -Outstanding Payables 37,540,796 - 5,310,199 544,147 - - - 9,193,357 954,295 9,708,676 1,967,040 - - -Rental Deposit - - - - - - - 10,000,000 - - - - - -Loan Given - - 461,470,731 - - - - - - 36,000,000 - - - -Loan taken 750,000,000 - - - - - - 650,000,000 - - - - - -OutstandingReceivables 56,089,187 91,945 - 417,090 1,122,153 - - 10,689,072 964,112 10,000 932,871 - 2,504,239 -

SCHEDULE 18




83

SCHEDULE 18


e) Details relating to Persons referred to in 19 (c) above :

Name of the Person 2006-2007 2005-2006Rupees Rupees

Mr. A.P.Parigi 14,094,976 12,316,662

20. Segment Information

In accordance with Accounting Standard – 17, “Segmental Reporting” issued by the Institute of Chartered Accountants ofIndia, 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 liability, total costincurred to acquire segment assets and total amount of charge for depreciation during the year, is as reflected in theFinancial Statements as of and for the year ended 31st March, 2007. The Company caters to the needs of the domesticmarket and hence there are no reportable geographical segments.

21. Disclosure for Operating Leases

Disclosure in respect of cancellable agreements for cars taken on lease:

a) Lease payments recognised in the Profit and Loss Account Rupees 5,258,402 (Previous Year: Rupees 3,149,076).

b) All the agreements provide for early termination by either party by giving prior notice in writing.

22. Earnings Per Share (Basic and Diluted)

The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of sharesoutstanding during the period. The number of shares used in computing Diluted EPS comprises of weighted average sharesconsidered for deriving Basic EPS and also the weighted average number of equity share which would be issued for noconsideration on exercise of options under the Employee Stock Option Scheme 2005. The number of shares are adjusted forreduction of share capital.

2006-2007 2005-2006

Profit / (Loss) computation for both Basic and Diluted Earnings Per Share ofRupees 10 each.

Net profit / (loss) as per the Profit and Loss Account available for Equity shareholders(in Rupees) 290,789,381 294,692,308

Weighted average number of Equity shares for Earnings per share computation

For Basic Earnings Per Share 47,567,790 35,846,767

Add: Weighted average outstanding employee stock options deemed to be issuedfor no consideration 53,686 34,413

Number of shares for Diluted Earnings Per Share 47,621,475 35,881,180

Earnings / (Loss) per Share (Rupees)Basic 6.11 8.22

Diluted 6.11 8.22

23. In the previous year, the Company had incurred Rupees 158,341,205 towards share issue expenses on account of InitialPublic Offering of 12,000,000 Equity Shares. In accordance with Section 79A of the Act, the Company has adjusted theseexpenses against “Securities Premium Account”.

24. The Company has made investments in 4,000,000 unquoted equity shares of Rs. 10 each of Times Innovative Media Limited(formerly known as Times Innovative Media Private Limited) (TIM) amounting to Rs. 40,000,000 constituting 100% of thepaid up capital of TIM. As at March 31, 2007 the networth of TIM has been eroded by 59%. In view of the growth potential/prospects of TIM’s nature of business, considering the developments till date, the financial support extended to TIM byBennett Coleman & Co. Ltd. (the ultimate holding Company) and the Company’s investments in TIM being of a long termnature, provision for diminution of value of investments is not required.



84

25. As required by the Clause 32 of the listing agreement, the following disclosure is made:Rupees

Balance as Maximum Balance as Maximumon March amount on March amount31, 2007 outstanding 31, 2006 outstanding

during the during theyear ended year endedMarch 31, March 31,

2007 2006

i. Loans and advances in the nature ofloans to subsidiary. 461,470,731 461,470,731 36,000,000 36,000,000

ii. Loans and advances in the nature ofloans to associates - - - -

iii. Loans and advances in the nature ofloans where there is no repaymentschedule, or interest below ratespecified as per Section 372A of theCompanies Act, 1956. - - - -

iv. Loans and advances in the nature ofloans to firms/companies in whichdirectors are interested - - - -

v. Investments by the Loanee in the sharesof the Company as on 31st March, 2007 - - - -

26. Information pursuant to other provisions of Part II of Schedule VI to The Act, is either nil or not applicable to the Companyfor the period.

27. Previous year’s figures have been regrouped and rearranged, wherever necessary.

28. Refer Annexure for additional information pursuant to Part IV of Schedule VI to the Act.

Signatures to Schedules “1” to “18” forming part of the financial statements.

SCHEDULE 18











85

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details:

Registration No. 1 1 - 1 2 0 5 1 6

Balance Sheet 3 1 0 3 2 0 0 7 State Code 1 1Date Date Month Year

II. Capital Raised during the Year: (Amount in Rs. Thousands)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds: (Amount in Rs. Thousands)Total Liabilities Total Assets

4 0 0 5 2 9 9 4 0 0 5 2 9 9

Sources of Funds

Paid-up Capital Reserves & Surplus

4 7 5 8 4 5 2 4 6 0 6 8 5

Secured Loans Unsecured Loans

3 1 8 0 1 2 7 5 0 0 0 0

Application of FundsNet Fixed Assets Investments

2 8 6 1 9 3 1 6 5 2 2 9

Net Current Assets Misc. Expenditure

1 0 5 4 4 2 9 N I L

Accumulated Losses Deferred Tax Assets

N I L 2 3 7 0 9

IV. Performance of Company: (Amount in Rs. Thousands)Turnover Total Expenditure

1 7 0 5 2 5 1 1 4 2 7 4 1 4

+ - Profit Before Tax + - Profit After Tax

✓ 2 7 7 8 3 7 ✓ 2 9 0 7 8 9

+ - Earning per share in Rs. Dividend

✓ 6 . 1 1 N I L

V. Generic Names for Three principal Products/Service of the Company:(As per monetary terms)

Item Code No. (ITC Code) N O T A P P L I C A B L E

Product Description N O T A P P L I C A B L E

The Company is a service provider and does not deal in any products

ANNEXURE(Refer Schedule 18 - Note 28)


86




Deepak M. Satwalekar Rama Bijapurkar Ravindra DhariwalDirector Director Director

Ravindra Kulkarni N. Subramanian Anil FernandesDirector Chief Financial Officer Sr. Vice President -


Names of the subsidiary Financial Number of Extent of For the financial year of the Subsidiary For the previous financial yearscompany year equity holding since it became a subsidiary

ending of shares Profits/(losses) so far Profits/(losses) so far Profits/(losses) so far Profits/(losses) so farthe held as it concerns the as it concerns the as it concerns the as it concerns the

subsidiary members of the members of the members of the members of theholding company and holding company and holding company and holding company andnot dealt with in the not dealt with in the not dealt with in the not dealt with in theholding company’s holding company’s holding company’s holding company’saccounts. accounts. accounts. accounts.

Rs. Rs. Rs. Rs.Times Innovative MediaLimited (formerly knownas Times InnovativeMedia Private Limited) 31.03.2007 4,000,000 100% (39,375,426) — 15,821,854 —

shares ofRs.10 each

Note: The subsidiary company was incorporated on October 26, 2005. As previous financial year figures are for six months the current year figures are not comparable.

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

ENTERTAINMENT NETWORK (INDIA) LIMITED (CONSOLIDATED)

87

1. We have audited the attached Consolidated Balance Sheet of Entertainment Network (India) Limited (‘theCompany’) and its subsidiary (together referred to as the Group), as at March 31, 2007, and also the ConsolidatedProfit and Loss Account and Consolidated Cash Flow Statement for the year ended on that date annexed thereto.These consolidated financial statements are the responsibility of the Company’s management and have beenprepared by the management on the basis of separate financial statements and other financial informationregarding components. Our responsibility is to express an opinion on these consolidated financial statementsbased on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare prepared, in all material respects, in accordance with an identified financial reporting framework and arefree of material misstatements. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by the management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

3. We report that the consolidated financial statements have been prepared by the Entertainment Network (India)Limited’s management in accordance with the requirements of Accounting Standard 21 - Consolidated FinancialStatements issued by the Institute of Chartered Accountants of India.

4. Based on our audit and on consideration of audit reports on separate financial statements of EntertainmentNetwork (India) Limited and its subsidiary, in our opinion and to the best of our information and according to theexplanation given to us, the attached consolidated financial statements give a true and fair view in conformitywith the accounting principles generally accepted in India :

(a) in case of the consolidated Balance Sheet, of the state of affairs of Entertainment Network (India) LimitedGroup as at March 31, 2007 ;

(b) in case of the consolidated Profit and Loss Account, of the profit of Entertainment Network (India) LimitedGroup for the year ended on that date ; and

(c) in the case of the consolidated Cash Flow Statement, of the consolidated cash flows of EntertainmentNetwork (India) Limited Group for the year ended on that date.

Partha GhoshPartnerMembership No. F-55913For and on behalf ofPrice Waterhouse & Co.

Place: Mumbai Chartered AccountantsDate: May 16, 2007

AUDITORS� REPORTTO THE BOARD OF DIRECTORS OF ENTERTAINMENT NETWORK (INDIA) LIMITED ON THE CONSOLIDATEDFINANCIAL STATEMENTS OF ENTERTAINMENT NETWORK (INDIA) LIMITED AND ITS SUBSIDIARY COMPANY


88

This is the Balance Sheet referredto in our report of even date.










Rupees Rupees

SOURCES OF FUNDS


Capital 1 475,845,750 475,636,650

Share Application Money 1A 756,000 -

Reserves and Surplus 2 2,439,217,650 2,179,681,039

Loan Funds

Secured Loans 3 318,011,766 -

Unsecured Loans 4 820,000,000 350,000,000TOTAL 4,053,831,166 3,005,317,689


Fixed Assets 5

Gross Block 2,881,015,949 2,554,864,055

Less:Depreciation 468,122,956 280,650,446Net Block 2,412,892,993 2,274,213,609

Capital work-in-progress / Advances 612,181,319 128,472,2513,025,074,312 2,402,685,860

Investments 6 25,228,849 302,481,214

Deferred Tax Asset 7 26,678,310 2,094,608

Current Assets, Loans and Advances:

Sundry Debtors 8 727,718,915 466,817,931


Loans and Advances 10 722,052,868 314,347,6711,575,638,450 846,036,065



Provisions 21,151,052 12,413,557598,788,755 547,980,058

Net Current Assets 976,849,695 298,056,007TOTAL 4,053,831,166 3,005,317,689

Notes to the Consolidated Financial Statements 18

The Schedules referred to herein form an integral part of the Balance Sheet


89







This is the Profit and Loss Accountreferred to in our report of even date.



Schedule 2006-2007 2005-2006Rupees Rupees

Income

Sales 12 2,351,090,968 1,373,993,694

Other Income 13 24,902,000 15,774,2682,375,992,968 1,389,767,962

Expenditure

Production Expenses 14 391,490,100 180,614,125

License Fees 15 330,888,802 68,036,736

Employee Costs 16 447,107,470 274,840,325


Preliminary Expenses written off (Refer Note 1(xvii) on Schedule 18) - 25,000

Interest (Refer Note 1(v) on Schedule 18) 22,440,894 25,925,610

Depreciation (Refer Note 1(iv) on Schedule 18) 187,472,510 124,184,0332,133,105,453 1,131,781,118

Profit/(Loss) Before Taxation and Exceptional Item 242,887,515 257,986,844

Add: Exceptional Item (Refer Note 6 on Schedule 18) - 98,111,109Profit Before Taxation 242,887,515 356,097,953


- Current Tax (Refer Note 1(vii) on Schedule 18) 30,500,000 37,207,917

- Minimum Alternate Tax Credit Entitlement(Refer Note 1(vii) on Schedule 18) (30,500,000) -

- Deferred Tax (Refer Note 1(viii) on Schedule 18) (24,583,702) (224,126)

- Fringe Benefits Tax 16,000,000 8,560,000

- Wealth Tax 57,261 40,000Profit after Taxation 251,413,956 310,514,162

Profit and Loss Account Balance Brought Forward 308,299,116 (1,019,767,046)

Adjustment on account of reduction of Share Capital / SecuritiesPremium Account (Refer Note 4 on Schedule 18) - 1,017,552,000Profit and Loss balance carried forward to the Balance Sheet 559,713,072 308,299,116Earnings Per Share (Refer Note 11 on Schedule 18)

- Basic 5.29 8.66

- Diluted 5.28 8.65

Notes to the Consolidated Financial Statements 18

The Schedules referred to herein form an integral part of theProfit and Loss Account


90


2006-2007 2005-2006Rupees Rupees

A) CASH FLOW FROM OPERATING ACTIVITIES :Profit Before Taxation 242,887,515 356,097,953Adjustments for :Pre-incorporation profit transferred to Capital Reserve - 215,610Depreciation 187,472,510 124,275,031Interest Expense 22,440,894 25,925,610Provision for Employee Stock Option Scheme expenses 5,400,480 2,721,050Profit on sale of Investments (5,401,311) (6,829,331)Loss on sale of Fixed Assets - 24,749Provision for bad and doubtful debts 16,115,084 7,287,836Provision for doubtful debts written back (6,536,174) (6,538,921)Exceptional Item - (98,111,109)Provision for Retirement Benefits 6,332,921 543,318Operating Profit / (Loss) Before Working Capital Changes 468,711,919 405,611,796Adjustments for changes in working capital :(Increase) / Decrease in Sundry Debtors (280,567,264) (259,292,082)Provision from Doubtful Debts taken over from BCCL 10,087,370 -(Increase) / Decrease in Other receivable (346,961,373) (207,533,114)Increase / (Decrease) in Trade and Other payables 12,206,351 220,534,854Cash generated from operations (136,522,997) 159,321,454Taxes paid (net) (73,347,133) (46,759,165)Net Cash before exceptional item (209,870,130) 112,562,289Exceptional item - 98,111,109Net Cash from Operating Activities (A) (209,870,130) 210,673,398

B) CASH FLOW FROM INVESTING ACTIVITIES :Purchase of Fixed Assets (326,151,894) (2,185,905,090)Proceeds from sale of Fixed Assets - 66,468Capital Work in progress (483,709,068) (98,472,251)Purchase of Investments (630,354,611) (848,353,840)Proceeds from sale of Investments 913,008,284 615,673,077Net Cash used in Investing Activities (B) (527,207,289) (2,516,991,636)

C) CASH FLOW FROM FINANCING ACTIVITIES :Proceeds from fresh issue of Shares (net of issue expenses of Rs. 158,341,205) - 2,002,587,645Proceeds from Long Term Borrowings:- Receipts 485,000,000 350,000,000- Payments (15,000,000) -Proceeds from Short Term Borrowings:- Receipts 318,011,766 1,770,000,000- Payments - (1,770,000,000)Interest Paid (22,440,894) (26,130,761)Proceeds from Exercise of Employee Stock Options 1,881,900 -Reciept of Share Application Money 756,000 -Net Cash Flow from / (used in) Financing Activities (C) 768,208,772 2,326,456,884Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) 31,131,353 20,138,646Cash and Cash Equivalents as at the beginning of the year 36,838,242 16,699,596Cash and Cash Equivalents as at the end of the year 67,969,595 36,838,242

NOTES ON CASH FLOW STATEMENT :1 Cash and cash equivalents at the end of the year as per Balance Sheet 125,866,667 64,870,463

Less: Book overdraft as per Schedule 11 (57,897,072) (28,032,221)67,969,595 36,838,242

2 The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on Cash Flow Statements issued by theInstitute of Chartered Accountants of India except in case of interest paid which has been considered on the basis of actual movement of cash withnecessary adjustments in corresponding assets and liabilities.

3 Cash and Cash Equivalents represent Cash and Bank Balances only.4 Cash flows in bracket indicate cash outgo5 Previous Year’s figures have been regrouped and rearranged wherever necessaryThis is the Cash Flow Statementreferred to in our report of even date.









91


As at As at March 31, 2007 March 31, 2006

Rupees Rupees

SCHEDULE 1 : CAPITAL

Authorised Capital

120,000,000 Equity shares of Rs. 10 each 1,200,000,000 1,200,000,000Issued and Subscribed

47,584,575 (Previous Year : 47,563,665) Equity shares of Rs. 10 each fully paid-up 475,845,750 475,636,650Notes:1. Of the above, 30,526,560 Equity Shares of Rupees 10 each are held by Times

Infotainment Media Limited, the holding Company and its nominees.

2. Of the above, 3,391,840 Equity Shares of Rupees 10 each are held by Bennett,Coleman & Co. Limited, the ultimate holding Company.

3. During the year, the Company has issued 20,910 Equity Shares of face value ofRupees 10 each at Rupees 185.25 per share pursuant to the exercise of EmployeeStock Options granted to the employees. (Refer Note 5 on Schedule 18)

4. During the previous year, the Company has adjusted accumulated losses aggregatingRupees 830,416,000 against Equity Share Capital. (Refer Note 4 on Schedule 18)

5. For Employee Stock Option Scheme 2005. (Refer Note 5 on Schedule 18)

SCHEDULE 1A : SHARE APPLICATION MONEY

Equity Share Application Money 756,000 -

Note:

8,400 shares of Rupees 10 each offered to employees on November 15, 2006 againstwhich Rupees 756,000 received as application money on January 16, 2007 and March31, 2007

756,000 -

SCHEDULE 2 : RESERVES AND SURPLUSCapital Reserve 2,086,092 2,086,092Securities Premium AccountAs per last Balance Sheet 1,866,134,995 187,136,000Less: Capital Reduction (Refer Note 4 on Schedule 18) - (187,136,000)

1,866,134,995 -

Add: Premium on shares issued (Refer note 4 and 5 of Schedule 18) - 2,024,476,2001,866,134,995 2,024,476,200

Add: Receipts on exercise of employee stock options 3,664,477 -1,869,799,472 2,024,476,200

Less: Share Issue Expenses - (158,341,205)1,869,799,472 1,866,134,995

Profit and Loss Account 559,713,072 308,299,116

Employees Stock Options Outstanding(Refer Note 5 on Schedule 18)

As per last Balance Sheet 3,160,836 -Less: Fair Value of Options exercised during the year (1,991,678) -

1,169,158 -

Add: Fair Value of Options amortised during the year 6,449,856 3,160,8367,619,014 3,160,836

2,439,217,650 2,179,681,039


92

SCHEDULE 5

FIXED ASSETS (Refer Note 1 (iv), (v), (xii), (xvi) and 8 on Schedule 18) (Rupees)

GROSS BLOCK DEPRECIATION NET BLOCK

PARTICULARS As at Additions Deletions/ As at As at For the year On Deletions/ As at As at As atMarch 31, during the year Adjustments March 31, March 31, Adjustments March 31, March 31, March 31,

2006 during the year 2007 2006 2007 2007 2006

Tangible Asset

Land - Leasehold 2,036,147 - - 2,036,147 - - - - 2,036,147 2,036,147

Building 7,578,551 - - 7,578,551 1,485,200 310,482 - 1,795,682 5,782,869 6,093,351

Leashold Improvements 33,447,455 47,827,676 - 81,275,131 26,038,234 5,623,848 - 31,662,082 49,613,049 7,409,221

Plant and Machinery - 119,235,037 - 119,235,037 - 5,831,713 - 5,831,713 113,403,324 -

Office Equipment 300,769,977 109,227,010 - 409,996,987 121,277,611 34,008,050 - 155,285,661 254,711,326 179,492,366

Computers 48,288,540 24,845,273 - 73,133,813 30,928,287 13,569,588 - 44,497,875 28,635,938 17,360,253

Furniture and Fixtures 23,747,998 418,417 - 24,166,415 12,279,124 2,122,004 - 14,401,128 9,765,287 11,468,874

Motor Vehicles 11,475,821 700,260 - 12,176,081 7,118,520 1,229,476 - 8,347,996 3,828,085 4,357,301

Intangible Asset

Migration Fees (Refer Note 7 815,234,695 - - 815,234,695 81,523,470 81,523,470 - 163,046,940 652,187,755 733,711,225on Schedule 18)

One Time Entry Fees 1,312,284,871 23,898,221 - 1,336,183,092 - 43,253,879 - 43,253,879 1,292,929,213 1,312,284,871(Refer Notes 1 and 2 below)

GRAND TOTAL 2,554,864,055 326,151,894 - 2,881,015,949 280,650,446 187,472,510 - 468,122,956 2,412,892,993 2,274,213,609

Previous Year 399,121,465 2,155,905,090 162,500 2,554,864,055 156,446,698 124,275,031 71,283 280,650,446

Capital Work-in-Progress [Includes Capital Advance of Rs. 265,671,885 (Previous Year Rs. 44,578,275)] - Refer Note 3 below 612,181,319 128,472,251

3,025,074,312 2,402,685,860

Notes:

1) Includes borrowing cost Rupees 23,893,221(Previous year Rupees 11,287,871)

2) One Time Entry Fees will be amortised from the date of operationalisation of the respective station.

3) Includes Pre-operative expenditure pending capitalisation Rupees 64,724,918 (Previous Year Rupees 8,837,863)



Rupees Rupees

SCHEDULE 3 : SECURED LOANS

Working Capital Loan from Standard Chartered Bank (Refer Note 1 below) 47,500,000 -

[Repayable within one year Rupees 47,500,000 (Previous Year Rupees Nil)]

Cash Credit from Kotak Mahindra Bank Limited (Refer Note 2 below) 270,511,766 -

Notes:

1) A pari passu charge by way of hypothecation on book debts and tangible fixedassets (moveable) of the company, both present and future in favour of the Bank.

2) A pari passu charge by way of hypothecation over all the current assets and allmoveable fixed assets both present and future in favour of the Bank.

318,011,766 -

SCHEDULE 4 : UNSECURED LOANS

From Bennett, Coleman & Co. Limited 750,000,000 350,000,000

From Times Infotainment Media Limited 70,000,000 -820,000,000 350,000,000


93



Rupees Rupees

SCHEDULE 6 : INVESTMENTS

(Refer Note 1(vi) on Schedule 18)

Current (Unquoted)

Nil (Previous Year: 211,501) Units of HDFC Mutual Fund - Floating Rate Income Fund -Short Term Plan - Growth - 2,447,786

Nil (Previous Year: 7,307,168) Units of Standard Chartered Mutual Fund - G 65 LiquidityLiquidity Manager - Growth - 73,500,000

Nil (Previous Year: 849,254) Units of Prudential ICICI Mutual Fund - Liquid Plan - 14,334,271

Nil (Previous Year: 922,322) Units of Prudential ICICI Mutual Fund - Floating RatePlan ‘D’ - 9,384,801

6,322 (Previous Year : 3,439,665) Units of HDFC Mutual Fund - Cash ManagementFund - Savings Plan - Growth 96,656 50,000,000

22,78,216 (Previous Year: 2,456,092) Units of Prudential ICICI Mutual Fund - LiquidSuper Institutional - Growth 25,000,000 25,046,980

124 (Previous Year: 125,442) Units of DSP Merrill Lynch Mutual Fund Liquidity Fund -Institutional - Growth 132,193 127,767,376

25,228,849 302,481,214

Note:

Aggregate amount of unquoted investment in Mutual Fund Units Rupees 25,228,849; Previous year Rupees 302,481,214

Aggregate amount of Repurchase price in Mutual Fund Units Rupees 25,252,722; Previous year Rupees 303,888,024

SCHEDULE 7 : DEFERRED TAX

Deferred tax assets and liabilities are attributable to the following items:

Assets:


Provision for Doubtful Advances 2,274,016 -

Provision for Leave Encashment 2,341,498 263,397

Provision for Gratuity 4,030,430 501,393

Expenses Allowable u/s 43B 39,488 -

Amortisation of Preliminary Expenses 32,297,204 6,732

Unabsorbed Depreciation / Business Losses 84,206,946 -135,219,162 2,527,924

Liabilities:

Depreciation 108,540,852 433,316108,540,852 433,316

26,678,310 2,094,608


94



Rupees Rupees

SCHEDULE 8 : SUNDRY DEBTORS(Unsecured)Debts Outstanding for a Period Exceeding Six MonthsConsidered Good 27,547,321 7,837,218Considered Doubtful 22,876,284 3,972,011

50,423,605 11,809,229Other DebtsConsidered Good 700,171,594 458,980,713Considered Doubtful 6,631,160 5,869,153Total 757,226,359 476,659,095Less: Provision For Doubtful Debts 29,507,444 9,841,164

727,718,915 466,817,931

SCHEDULE 9 : CASH AND BANK BALANCESCheques in hand 37,433,622 18,819,562Balance with Scheduled Bank on:Current Account 5,993,782 18,993,217Short-Term Deposit Account 82,439,263 27,057,684[Deposit aggregating Rupees 73,323,055 (previous year Rupees 6,537,684),Rupees 20,000 (Previous Year Rupees 20,000), Rupees 7,500,000 and Rupees 286,600are lying under lien with Banks , Sales Tax Department, Rajasthan, CMD Delhi TransportCorporation and Defence Estates Officers, Pune Circle respectively]

125,866,667 64,870,463SCHEDULE 10 : LOANS AND ADVANCES(Unsecured and Considered Good)Advances Recoverable in Cash or in Kind or for Value to be ReceivedConsidered Good 192,421,322 159,794,138Considered Doubtful 440,250 440,250

192,861,572 160,234,388DepositsConsidered Good 418,444,775 105,900,252Considered Doubtful 6,250,000 6,250,000

617,556,347 272,384,640Less: Provision For Doubtful Loans and Advances 6,690,250 6,690,250

610,866,097 265,694,390Advance to TIML Employees’ Stock Option Trust 29,174,600 29,174,600Advance payment of tax [Net of Provision for Taxation Rupees 67,200,000 48,582,690 19,388,241(Previous Year : Rupees 35,153,000)]Minimum Alternate Tax Credit Entitlement 30,500,000 -Due from Times Infotainment Media Limited, the Holding Company 2,654,122 -[Maximum balance outstanding during the year Rs. 18,654,122 (Previous Year :Rs. 33,444,673)]Due from Times Internet Limited - 90,440[(Maximum balance outstanding during the year Rs 1,828,652 (Previous Year Rs. 90,440)]Due from World Wide Media Limited 275,359 -[Maximum balance outstanding during the year Rs. 769,574 (Previous Year Rs. 769,574)]

722,052,868 314,347,671


95



Rupees Rupees


CURRENT LIABILITIES

Sundry Creditors 483,187,734 498,583,713

Book Overdraft 57,897,072 28,032,221

Other Liabilities 36,263,397 8,946,067

Deposits 289,500 4,500577,637,703 535,566,501

PROVISIONS

Gratuity (Refer Note 1(xi) on Schedule 18) 11,857,693 7,811,662

Leave Encashment (Refer Note 1(xi) on Schedule 18) 6,888,785 4,601,895

Fringe benefits tax (Provision in excess of payments of Rs. 22,155,428) 2,404,574 -

21,151,052 12,413,557

SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEARENDED MARCH 31, 2007

SCHEDULE 12 : SALES

Airtime Sales (Gross) 1,671,926,740 1,174,135,469(Refer Note 1(ix) on Schedule 18)

Event Income (Gross) 361,951,000 182,814,213(Refer Note 1(ix) on Schedule 18)

Out of Home Media Income 317,213,228 17,044,0122,351,090,968 1,373,993,694


Profit on Sale of Investments 5,401,311 6,829,331

Interest on:

- Loans to Employees 201,399 94,698

- Income Tax Refund 507,884 659,962

- Fixed Deposit (Gross) 3,636,537 454,421[Tax deducted at source Rs. 750,025 (Previous Year Rs. 109,782)]

- Others 68,346 -

Provisions for Doubtful Debts Withdrawn 858,222 3,100,344

Other Provisions written back 5,211,708 1,311,861

Insurance Claims - 688,653

Service/Other Charges - 1,068,055

Miscellaneous Income 9,016,593 1,566,943

24,902,000 15,774,268

2006-2007 2005-2006Rupees Rupees


96

SCHEDULE 16 : EMPLOYEE COSTS

Salaries, Wages and Allowances 389,851,891 240,487,656

Contributions to Provident and Other Funds 19,658,420 10,772,164(Refer Note 1(xi) on Schedule 18)

Welfare Expenses 32,196,679 20,859,455

Employees Stock Options Expense (Refer Note 5 on Schedule 18) 5,400,480 2,721,050447,107,470 274,840,325

SCHEDULE 17 : ADMINISTRATION AND OTHER EXPENSES

Rent (Net) 95,711,201 53,814,028Rates and Taxes 3,460,549 1,990,020Electricity 42,827,381 21,391,906Marketing 336,807,396 199,782,792

Travelling and Conveyance 75,166,398 51,582,582Insurance 3,571,320 2,658,779Communication 18,065,807 10,466,881Repairs and Maintenance on:

- Buildings 1,401,023 1,007,463- Plant and Machinery 9,961,295 8,608,988- Others 11,958,019 9,925,247Bank Charges 3,345,205 11,045,095

Training 6,905,407 4,289,451Legal and Professional Fees 58,412,598 31,133,312Recruitment 13,559,515 9,908,783Software 9,208,496 6,422,362

Business Promotion 6,646,059 4,700,656Security 6,485,608 3,434,993Auditors’ Remuneration 1,981,032 1,066,054Loss on Sale Of Fixed Assets - 24,749

Provision for Doubtful Debts 16,115,084 7,241,137Less: Provision for Doubtful Debts withdrawn (5,677,952) (3,293,153)Bad Debts written off 16,521,535 7,680,690

Miscelleneous (Net) 21,272,701 13,272,474753,705,677 458,155,289

SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEARENDED MARCH 31, 2007

2006-2007 2005-2006Rupees Rupees

SCHEDULE 14 : PRODUCTION EXPENSES

Royalty 53,454,529 37,530,454

Other Production Expenses 17,732,318 7,446,562

Event Expenses 301,310,132 134,525,617

Out of Home Media Expenses 18,993,121 1,111,492391,490,100 180,614,125

SCHEDULE 15 : LICENSE FEES

License Fees (Refer Note 1(x) on Schedule 18) 330,888,802 68,036,736330,888,802 68,036,736


97

SCHEDULE 18 Notes to the Financial Statements1. Significant Accounting Policies

i. Basis of AccountingThe Consolidated Financial Statements of Entertainment Network (India) Limited (‘the Company”) and its subsidiarycompany, Times Innovative Media Limited (formerly known as Times Innovative Media Private Limited) (collectivelyreferred to as “the Group”) are prepared under the historical cost convention in accordance with generally acceptedaccounting principles in India and the Accounting Standard 21 on Consolidation of Financial Statements, issued bythe Institute of Chartered Accountants of India to the extent possible in the same format as that adopted by theCompany for its separate financial statements.

ii. Use of EstimatesThe preparation of financial statements in accordance with the generally accepted accounting principles requires theManagement to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dateof financial statements and the reported amount of expenses of the year. Actual results could differ from theseestimates. Any revision to such accounting estimates is recognized in the accounting period in which such revisiontakes place.

iii. Principles of Consolidation1. The consolidated financial statements have been prepared on the following basis:

- The financial statements of the Company and its Subsidiary Company have been combined on a line-by-linebasis by adding together the book values of like items of assets, liabilities, income and expenses.

- Intra-group balances and intra-group transactions and resulting profits are eliminated in full.- The consolidated financial statements have been prepared using uniform accounting policies for like

transactions and other events in similar circumstances and are presented to the extent possible, in the samemanner as the Company’s separate financial statements.

2. The subsidiary considered in the consolidated financial statements is:

Name of the Company Country of % voting power as atIncorporation March 31, 2007

Times Innovative Media Limited (formerly known asTimes Innovative Media Private Limited) India 100

iv. Fixed assets and Depreciation• Tangible assets

Tangible fixed assets are stated at cost less accumulated depreciation.Depreciation on tangible fixed assets (except Plant and Machinery) is provided on written down value method atthe rates and in the manner specified in Schedule XIV to the Act. The cost of leasehold improvements areamortised over the primary period of lease of the property. Leasehold land is not amortised. Tangible assetsindividually costing less than Rs. 5,000 are depreciated @ 100% in the year of purchase.Plant and Machinery is depreciated over the useful life of the asset, being the period of the contract, on uniformbasis.

• Intangible assetsMigration fees paid by the Company for existing licenses upon migration to Phase II of the Licensing policy andOne Time Entry Fees paid by the Company for acquiring new licenses, has been capitalised as an asset.The migration fee capitalised is being amortised, with effect from April 1, 2005, equally over a period of tenyears, being the period of the license. One time entry fee will be amortised over a period of ten years, being theperiod of license, from the date of operationalisation of the station.

v. Borrowing CostBorrowing cost attributable to the acquisition or construction of a qualifying asset is capitalised as part of cost of theasset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

vi. InvestmentsLong term investments are stated at cost. Provision is made for permanent diminution in value, if any.Current investments are stated at lower of cost and market value/ repurchase price.

vii. Current taxationProvision for income tax has been made at the current tax rates based on assessable income or on the basis of Section115JB of the Income Tax Act, 1961 (Minimum Alternate Tax) whichever is higher.

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2007 ANDPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007


98

SCHEDULE 18 Notes to the Financial Statements (Contd.)

viii. Deferred taxationDeferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differencebetween taxable income and accounting income that originate in one period and are capable of reversal in one ormore subsequent periods.

ix. Revenue RecognitionRevenue from radio broadcasting is recognised on an accrual basis on the airing of client’s commercials.Revenue from event management, is recognised on the completion of the event and on the basis of related servicesperformed whereas revenue from Management of Outdoors is recognised on the display of advertisements.

x. License FeesAs per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 license fees are charged torevenue at the rate of 4% of gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) for theconcerned city, whichever is higher. Gross Revenue for this purpose shall mean revenue on the basis of billing ratesinclusive of any taxes and without deduction of any discount given to the advertiser and any commission paid toadvertising agencies. Barter advertising contracts shall also be included in the gross revenue on the basis of relevantbilling rates. ROTEF means 25% of highest valid bid in the city.

xi. Retirement BenefitsContributions are made to the Provident Fund Trust on actual liability basis.Liabilities in respect of gratuity to employees and leave encashment benefits have been determined and accrued onthe basis of actuarial valuation.

xii. SoftwareSoftware obtained initially together with hardware is capitalised along with the cost of hardware and depreciated inthe same manner as the hardware. All subsequent purchases of software are treated as revenue expenditure andcharged in the year of purchase.

xiii. Foreign Currency TransactionsForeign currency transactions are recorded at the exchange rates prevailing on the date of the transactions. Foreigncurrency denominated assets and liabilities are translated into rupees at the exchange rates prevailing at the date ofthe Balance Sheet. All exchange differences are dealt with in the Profit and Loss Account, except those relating to theacquisition of fixed assets from a country outside India, which are adjusted to the cost of such assets.

xiv. Pre-operative ExpenditureExpenditure incurred by the Company from the date of acquisition of license for a new station upto the date ofoperationalisation of the station not directly attributable to fixed assets are charged to the Profit and Loss account inthe year in which such expenditure is incurred.

xv. Provisions and Contingent LiabilitiesThe Company recognises a provision when there is a present obligation as a result of a past event that probablyrequires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure fora contingent liability is made when there is a possible obligation or a present obligation that may, but probably willnot, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood ofoutflow of resources is remote, no provision or disclosure is made.

xvi. Impairment of AssetsThe Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If anysuch indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of theasset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount,the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and isrecognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previouslyassessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at therecoverable amount.

xvii. Preliminary ExpenditurePreliminary expenses are charged to the Profit and Loss Account in the year of incurrence.

2. Contingent Liabilitiesa) Guarantees issued by banks on behalf of the Group Rupees 465,847,186. (Previous Year: Rupees 554,470,000)b) Counter Guarantee issued by the Group to HDFC Bank Rupees 150,000,000. (Previous Year: Rupees Nil)c) Letter of Credit issued by Bank on behalf of the Group Rupees 5,961,242 (Previous Year: Rupees 5,213,087).

3. Capital CommitmentsEstimated amount of contracts remaining to be executed on capital account Rupees 163,620,291 [net of advances of Rupees67,477,413 (Previous Year Rupees 110,921,909)] (Previous year Rupees 253,902,673)



99

4. Reduction of Share Capital/ Securities Premium Account

Pursuant to the resolutions passed at the Extra Ordinary General Meeting held on August 26, 2006, the approval of theHonourable High Court of Bombay, vide its order dated October 28, 2005 on petition no. 680 of 2005 under section 78,100 of The Act and based on the legal opinion obtained, the Company has set off an amount of Rupees 1,017,552,000standing debit to the Profit and Loss Account as at March 31, 2005 as follows:

Against Securities Premium Account Rupees 187,136,000

Against Share Capital Account Rupees 830,416,000

5. Employee Stock Option Scheme (ESOS)

Pursuant to the resolution passed by the Board of directors and members of the Company at the meeting of Board ofDirectors and Extra Ordinary General Meeting of the Members of the Company respectively, held on November 5, 2005,the Company had introduced Employee Stock Option Scheme (“the scheme”) for its existing and future permanent employeesand directors and existing and future permanent employees and directors of its Subsidiary Company and Holding Company.

The scheme provides that the total number of options granted there under will be 109,360. Pursuant to a resolution passedby the Remuneration / Compensation Committee at its meeting held on November 5, 2005, all 109,360 options that areexercisable for Equity Shares have been granted at an exercise price of Rs.90.

In accordance with the Guidance Note on Employee Share based payment plan issued by the ‘The Institute of CharteredAccountants of India’ and Employee Stock Option and Stock Purchase Guidelines, 1999 issued by the Securities andExchange Board of India, fair value of these options, on the grant date, is amortised over the vesting period.

Particulars 2006-2007 2005-2006

Options outstanding at the beginning of the year 109,360 -

Add:

Options granted during the year - 109,360109,360 109,360

Less:

Options forfeited during the year 2,610 -

Options exercised during the year 20,910 -

Options expired during the year - -Options outstanding at the end of the year 85,840 109,360

Exercise price for options outstanding at the end of the year (Rupees) 90 90

Fair value of options amortised during the year (Rupees) 6,449,856 3,160,836

Fair value of the options granted during the previous year, based on the report received from an independent firm ofChartered Accountants, as per Black Scholes method of valuation, was as follows:

Vesting Date Number of Options Fair value of the option

November 15, 2006 34,975 95.25

April 1, 2007 42,775 98.40

July 1, 2007 17,255 100.36

April 1, 2008 8,700 105.67

July 1, 2008 5,655 107.30

Weighted average 98.74

Further, amortisation of fair value of the options granted to the employees of Times Infotainment Media Limited, the HoldingCompany aggregating Rupees 1,049,376 (Previous year: Rupees 439,786) have been charged to the company.



100

SCHEDULE 18 Notes to the Financial Statements (Contd.)6. Exceptional Item

Exceptional item during the previous year represents write back of provision for license fees aggregating Rupees 98,111,109,provided for Delhi, Chennai and Kolkata stations from August 2002 (time line for operationalisation of these stations) up tothe date of actual operationalisation of each station, which has been waived off by the Government of India in the Phase IIRadio policy announced on July 13, 2005.

7. One Time Entry Fee (OTEF) and Migration FeeAs per the new Frequency Module (FM) broadcasting policy, effective April 1, 2005 the Company had been given theoption to migrate all its existing license from Phase I regime to Phase II regime on payment of migration fees. Migration feesfor each station shall be equal to the average of all successful bids received for that city. The Company had exercised theoption and has migrated its licenses for all the seven cities to Phase II regime by payment of migration fees aggregatingRupees 815,234,696.Further, the Company had participated in second round of bidding and was awarded frequency at 25 locations. Thepayment made by the Company to acquire these frequencies (One Time Entry Fees) is Rupees 1,301,000,000.Based on the opinion obtained from an independent firm of Chartered Accountant, both Migration Fees and One Time EntryFees has been capitalised as Intangible Asset.

8. Pre-operative ExpenditurePre-operative expenditure includes following expenditure:

Particulars 2006-2007 2005-2006Amount (Rupees) Amount (Rupees)

Other Production expenses 176,869 999,177

License Fees 908,504 -

Rent (Net) 18,064,703 2,302,003

Rates and Taxes 3,053,297 1,096,331

Electricity 470,186 -

Survey 4,971,837 90,722

Travel & Conveyance 7,525,893 1,304,444

Insurance 237,801 -

Communication 653,730 19,112


- Buildings - 77,348

- Plant and Machinery 42,542 114,154

- Others 102,563 5,332

Bank Charges 932,145 20,157

Training 6,363,364 -

Legal and Professional fees 1,963,108 1,093,962

Recruitment 7,115,871 -

Software Charges - 381,904

Business Promotion 1,922 11,740

Security 253,956 17,337

Miscellaneous 2,167,589 219,358

Salaries, Wages, Commission & Allowances 8,838,598 1,013,721

Contribution to Provident and Other Funds 419,634 -

Welfare Expenses 460,806 71,061TOTAL 64,724,918 8,837,863



101

SCHEDULE 18 Notes to the Financial Statements (Contd.)


a) Parties where control exists

Related Party

Bennett, Coleman & Co. Limited (BCCL) – Ultimate Holding Company

Times Infotainment Media Limited (TIML) – Holding Company

b) Fellow Subsidiary Companies

Vardhaman Publishers Limited (VPL)

Times Internet Limited (TIL)

Worldwide Media Limited (WWM)

Times Global Broadcasting Company Limited (TGBCL)

c) Key Managerial Personnel

Chairman

Mr. Vineet Jain (w.e.f. January 19, 2007)

Managing Director & Chief Executive Officer

Mr. A. P. Parigi

Non –Executive Directors

Mr. Ravindra Dhariwal

Mr. N. Kumar

Mr. Deepak M. Satwalekar

Ms. Rama Bijapurkar

Mr. Ravindra Kulkarni (w.e.f. January 19, 2007)



102


d) Transaction with Related PartiesRupees

2006-2007 2005-2006

Particulars Parties where Fellow Subsidiary Companies Parties where Fellow Subsidiary Companiescontrol exists control exists

BCCL TIML TIL WWM TGBCL VPL BCCL TIML TIL WWM TGBCL VPL

Transactions withRelated Parties

Recovery of Expenses 10,652,214 1,207,146 - 81,984 - - 9,517,519 2,246,991 - - - -

Print AdvertismentExpenses 50,685,628 - - - - - 58,929,297 - - - - -

Event ManagementIncome 22,527,136 - 4,875,000 16,400,000 - - 22,065,215 - 1,749 7,664,000 - -

Event Expenses - - - - - - 212,750 16,060,065 - - - -

Service Fee on OutdoorRevenue 19,209,080 - - - - - 11,548,351 - - - - -

Outdoor AdvertisementRevenue 1,323,626 - 13,333 450,000 - - 680,250 - - - - -

Outdoor AdvertisementExpenses - - - - - - 1,768,079 2,177,857 - - - -

Internet / FilmAdvertisement Expenses - - 17,959,122 - - - - 964,111 2,529,170 - - -

Office Rent 23,858,595 - - - - 118,800 17,045,900 - - - - 118,800

Interest on ICD 48,302,740 1,794,247 - - - - 2,274,780 - - - - -

Interest Capitalized - CWIP 31,474,986 - - - - - 4,493,439 - - - - -

Miscelleneous Expenses - - 2,732,276 - - - 192,193 - - - - -

Reimbursement ofExpenses 8,409,259 569,372 139,889 - - - 11,371,241 522,732 - - - -

ESOP - 1,049,376 - - - - - 439,786 - - - -

Fixed Asset Purchase 118,069 - - - - - - - - - - -

Radio AdvertisementRevenue 72,383,603 73,173 1,862,568 999,780 2,802,798 - 65,319,764 1,635,310 2,927,584 1,593,058 2,272,449 -

Business PurchaseConsideration 137,033,145 - - - - - - 44,662,144 - - - -

Bad Debts 19,361 - 1,927 - - - - - - - - -

Net Income and liability ofTIMPL transacted by TIML - - - - - - - 81,731,356 - - - -

Net Expenditure andAssets of TIMPL transactedby TIML - - - - - - 36,592,464 - - - -

Advance Rent 1,331,460 - - - - - - - - - -

Loan taken 400,000,000 85,000,000 - - - - 650,000,000 - - - - -

Loan repaid - 15,000,000 - - - - 300,000,000 - - - - -

Balances with RelatedParties

Advance Given - 2,654,122 - 275,359 - - 3,920,000 484,815 90,440 769,574 - -

Outstanding Payables 38,975,567 707,818 1,614,365 - - - 9,193,357 954,295 1,967,040 - - -

Rental Deposit - - - - - - 10,000,000 - - - - -

Loan 750,000,000 70,000,000 - - - - 350,000,000 - - - - -

Outstanding Receivables 56,829,012 93,680 473,210 20,232,953 - - 26,949,811 964,112 934,798 8,445,728 2,504,239 -

Due to Holding Company/Fellow Subsidiary 103,510,044 - - - - - 13,060,280 39,927,513 - - - -

e) Details relating to Persons referred to in 9 ( c ) above :

Name of the Person 2006-2007 2005-2006

Rupees Rupees

Mr. A.P.Parigi 14,094,976 12,316,662



103

SCHEDULE 18



(i) Information about Primary Business Segments (Rupees)

2006-2007 2005-2006

Radio Events Outdoors Unallocated Elimination Total Radio Events Outdoors Unallocated TotalBroadcasting Broadcasting

RevenueExternal 1,678,674,110 368,570,660 318,932,721 - - 2,366,177,491 1,179,543,152 185,142,386 17,044,012 - 1,381,729,550Inter - Segment 108,708 59,922,756 810,000 - (60,841,464) - - - - - -

Total Revenue 1,678,782,818 428,493,416 319,742,721 - (60,841,464) 2,366,177,491 1,179,543,152 185,142,386 17,044,012 - 1,381,729,550

ResultSegment Result 271,651,236 4,919,076 (21,057,380) - - 255,512,932 249,976,161 20,021,477 6,310,304 - 276,307,942

Unallocated Income, net ofunallocated expenditure - - - 5,401,311 - 5,401,311 - - - 6,395,431 6,395,431Interest Expense - - - (22,440,894) - (22,440,894) - - - (25,925,610) (25,925,610)Interest Income - - - 4,414,166 - 4,414,166 - - - 1,209,081 1,209,081

Operating Profit 271,651,236 4,919,076 (21,057,380) (12,625,417) - 242,887,515 249,976,161 20,021,477 6,310,304 (18,321,098) 257,986,844

Exceptional Item - - - - - - 98,111,109 - - - 98,111,109

Profit before Taxation 271,651,236 4,919,076 (21,057,380) (12,625,417) - 242,887,515 348,087,270 20,021,477 6,310,304 (18,321,098) 356,097,953

Provision for Taxation - - - (57,261) - (57,261) - - - (37,247,917) (37,247,917)Provision for Fringe Benefit Tax - - - (16,000,000) - (16,000,000) - - - (8,560,000) (8,560,000)Provision for Deferred Taxation - - - 24,583,702 - 24,583,702 - - - 224,126 224,126

Profit after Taxation 271,651,236 4,919,076 (21,057,380) (4,098,976) - 251,413,956 348,087,270 20,021,477 6,310,304 (63,904,889) 310,514,162

Other InformationSegment Assets 3,763,585,031 107,535,539 719,430,906 62,068,445 - 4,652,619,921 2,964,931,714 134,692,727 151,176,997 302,496,309 3,553,297,747Segment Liabilities 1,357,329,799 99,026,053 218,342,357 62,102,312 - 1,736,800,521 700,921,042 140,187,536 19,785,336 37,086,144 897,980,058Capital Expenditure 673,706,235 5,198,175 130,956,552 - - 809,860,962 2,248,393,197 5,984,144 30,000,000 - 2,284,377,341Depreciation / Amortisation 179,407,473 2,101,641 5,963,396 - - 187,472,510 123,344,436 836,889 2,708 - 124,184,033Non - Cash Expenses otherthan Depreciation 4,775,557 - 624,923 - - 5,400,480 2,438,609 - 282,441 - 2,721,050

(ii) Information about Secondary Business Segments(Rupees)

2006-2007 2005-2006

Particulars India Outside Total India Outside TotalIndia India

Revenue by GeographicalSegments - External 2,361,127,815 5,049,676 2,366,177,491 1,377,408,507 4,321,043 1,381,729,550

Carrying Amount ofSegment Assets 4,652,619,921 - 4,652,619,921 3,553,297,747 - 3,553,297,747

Additions to Fixed Assets 809,860,963 - 809,860,963 2,284,377,341 - 2,284,377,341

(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 and ‘‘Outdoors’, comprising ofactivities relating to advertising on bus queue shelters (Refer Note 12 below), Light Emitting Diode (LED), MetroStations and Flyovers. The segments have been identified and reported taking into account the nature of activitiesand 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 represent revenue directly attributable to the respectivesegment.Segment revenue tabulated below: (Rupees)

2006-2007 2005-2006

Particulars Total Total

Sales 2,351,090,968 1,373,993,694

Other Income (excluding interest income and surplus on sale of investments) 15,086,523 7,735,856

Total 2,366,177,491 1,381,729,550



104

SCHEDULE 18


11. Earnings Per Share (Basic and Diluted)

The number of shares used in computing Basic Earnings per share (EPS) is the weighted average number of sharesoutstanding during the period. The number of shares used in computing Diluted EPS comprises of weighted average sharesconsidered for deriving Basic EPS and also the weighted average number of equity share which would be issued for noconsideration on exercise of options under the Employee Stock Option Scheme 2005. The number of shares are adjusted forreduction of share capital.

2006-2007 2005-2006

Profit / (Loss) computation for both Basic and Diluted Earnings Per Share ofRupees 10 each

Net profit / (loss) as per the Profit and Loss Account available forEquity shareholders (in Rupees) 251,413,956 310,514,162

Weighted average number of Equity shares for Earnings per share computation

For Basic Earnings Per Share 47,567,790 35,846,767

Add: Weighted average outstanding employee stock options deemed to be issued forno consideration 53,686 34,413

Number of shares for Diluted Earnings Per Share 47,621,475 35,881,180

Earnings / (Loss) per Share (Rupees)

Basic 5.29 8.66

Diluted 5.28 8.25

12. Purchase of Bus Queue Shelter Advertisement Management BusinessThe subsidiary, vide Business Transfer Agreement dated May 16, 2007, has purchased the business of display of advertisementson BEST’s Bus Queue Shelters in Brihan Mumbai for the period 2005 – 2008 from Bennett, Coleman & Co. Limited (BCCL), forwhich the subsidiary was hitherto appointed by BCCL as sole marketing and selling agent, with effect from December 1, 2006for a total consideration of Rs. 137,033,145. The consideration has been allocated to various assets and liabilities as follows:

Particulars Amount (INR)

Fixed Assets 62,860

Sundry Debtors 95,419,954Provision for Doubtful Debts (10,087,370)Deposits 76,793,605Sundry Creditors (25,155,904)NET ASSETS TAKEN OVER 137,033,145

13. 1) Purchase of Event Management and Outdoor Media business

In the previous period, the subsidiary, vide Business Transfer Agreement dated November 4, 2005, had purchased the EventManagement and Outdoor Media business from Times Infotainment Media Limited with effect from October 1, 2005 for aconsideration of Rs. 5,763,421. The consideration had been allocated to various assets and liabilities as follows:


Net Fixed Assets 4,188,143

Sundry Debtors 103,697,037

Loans and Advances 14,806,552

Current Liabilities (115,306,821)

Provisions (1,621,490)

NET ASSETS TAKEN OVER 5,763,421



105

2) Purchase of Delhi Metro Rail Corporation Business (DMRC)

In the previous period, the subsidiary, vide Business Transfer Agreement dated February 06, 2006, had purchased theDelhi Metro Rail Corporation Business from Times Infotainment Media Limited with effect from February 06, 2006 fora consideration of Rs. 38,898,723. The consideration had been allocated to various assets and liabilities as follows:






14. Previous year’s figures have been regrouped and rearranged, wherever necessary.

Signatures to Schedules “1” to “18” forming part of the financial statements.

SCHEDULE 18










TIMES INNOVATIVE MEDIA LIMITED(FORMERLY TIMES INNOVATIVE MEDIA PRIVATE LIMITED)

106

DIRECTORS� REPORT

Dear Members,

Your Directors have pleasure in presenting this Second Annual Report together with the Audited Accounts for thefinancial year ended March 31, 2007.

1. FINANCIAL HIGHLIGHTS

Amount in Rupees2006-2007 Period from

26th October 2005to

31st March, 2006

Income . . . . . . . . . . . . . . . . . . . . . . 748,752,179 226,521,152

Profit/(Loss) before Tax . . . . . . . . . . . . . . . . (34,949,912) 25,857,728

Less: Provision for Taxation (net) . . . . . . . . . . . . 4,425,514 10,035,874

Profit/(Loss) after Tax . . . . . . . . . . . . . . . . . . (39,375,426) 15,821,854

Profit/(Loss) brought Forward . . . . . . . . . . . . . . 15,821,854 —

Equity . . . . . . . . . . . . . . . . . . . . . . 40,000,000 40,000,000

Transfer to General Reserve Surplus/(Loss) . . . . . . . . . . — —

Carried to Balance Sheet . . . . . . . . . . . . . . (23,553,572) 15,821,854

2. CONVERSION OF THE COMPANY TO PUBLIC LIMITED COMPANY

The Board of Directors, at their meeting held on October 31, 2006, had passed the requisite resolutions underthe provisions of the Companies Act, 1956, to inter alia convert the existing Private Limited Company into aPublic Limited Company. Same was approved by the Members of the Company at the Extra ordinary GeneralMeeting held on October 31, 2006.

As per the fresh certificate of incorporation, dated March 15, 2007, issued by the Registrar of Companies,Maharashtra, consequent upon change of name on conversion to public limited company, the name of theCompany stands changed from Times Innovative Media Private Limited to Times Innovative Media Limited.

3. FINANCIAL PERFORMANCE

The year under review has been challenging for the Company. Total income has increased to Rs. 748,752,179/-and the loss after tax stood at Rs. 39,375,426/- in the year under review.

4. OPERATIONS

During the year under review, the Company has successfully acquired rights to design, set up, develop andmaintain advertisements at Delhi International Airport and Chhatrapati Shivaji International Airport at Mumbai.The Company continues to aggressively pursue new opportunities in the field of OOH media.


107

DIRECTORS� REPORTDIRECTORS� REPORTDIRECTORS� REPORTDIRECTORS� REPORTDIRECTORS� REPORT (Contd.)5. DIVIDEND

Directors regret their inability to recommend any dividend for the period under report.

6. INSURANCE

All the properties of the Company have been adequately insured.

7. FIXED DEPOSITS

The Company has not accepted any fixed deposits and hence, no amount of principal or interest was outstandingon the date of the Balance Sheet.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association, Mr. A. P.Parigi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

9. AUDITORS

M/s. Price Waterhouse & Co., Chartered Accountants, the Statutory Auditors of the Company retire at theensuing Annual General Meeting. Members are requested to re-appoint M/s. Price Waterhouse & Co., StatutoryAuditors for the current financial year and fix their remuneration.

10. BUY- BACK OF SHARES

During the period under review the Company has not offered to buy-back any of its outstanding shares.

11. CONSERVATION OF ENERGY

The operations of the Company are not energy-intensive. The Company is conscious about its responsibilitytowards a safe and clean environment and continues to adhere to all regulatory requirements and guidelines.A constant effort is being made by the Company and its employees in reducing the usage of scarce energyresources.

12. FOREIGN EXCHANGE EARNINGS & OUTGO :

Statement pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988:

Amount in Rupees

2006-2007 Period from26th October 2005

to31st March, 2006

Total Income . . . . . . . . . . . . . . . . . . . . 748,752,179 226,521,152

Foreign exchange earnings . . . . . . . . . . . . . . 4,364,578 1,100,000

Foreign exchange outgo *(* Current years expenditure does not include expenditure on software) 5,272,231 1,031,312

13. TECHNOLOGICAL ABSORPTION

The Company has not absorbed any new technology during the period under review.

14. RESEARCH & DEVELOPMENT

(a) Specific areas in which Research and Development is carried out by the Company N.A.

(b) Benefits derived as a result of the above research and development N.A.

(c) Future plan of action N.A.

(d) Expenditure on Research and Development N.A.


108

DIRECTORS� REPORTDIRECTORS� REPORTDIRECTORS� REPORTDIRECTORS� REPORTDIRECTORS� REPORT (Contd.)15. PARTICULARS OF EMPLOYEES

Relations with the employees remained cordial throughout the period under review. Particulars of the employeesas required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies(Particulars of Employees) Rules, 1975, are set out in Annexure ‘A’ forming part of this Report.

16. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors, based onthe representations received from the Operating Management, hereby confirms that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and thatthere are no material departures;

ii. It has in the selection of the accounting policies, consulted the Statutory Auditors and has applied thesuggested accounting policies consistently and made judgments and estimates that are reasonable andprudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2007, andof the loss of the Company for that period;

iii. It has taken proper and sufficient care for the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities, to the best of its knowledge and ability. There are however, inherent limitations,which should be recognized while relying on any system of internal control and records;

iv. It has prepared the annual accounts on a going concern basis.

17. ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the Company’s Members, discerning clientele, bankers andgovernment for their continued support. Your Directors place on record their appreciation of the contributionmade by employees at all levels through their hard work, dedication and that their support has enabled theCompany to achieve this growth.


N. Kumar A. P. ParigiMumbai, May 16, 2007 Director DirectorRegistered Office:Matulya Centre, 4th Floor, A – Wing,Senapati Bapat Marg, Lower Parel (West),Mumbai- 400 013.

Annexure : AParticulars of the employees as required under the provisions of Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended March 31, 2007.

S.No. Name Age Designation Remuneration Qualifications Company Total Date of PreviousExperience Experience Commencement Employment

(In years) of Employment

1 Farid Kureshi 38 Chief Operating Officer 7,549,337 B.Com, MBA 4.5 16 15-Oct-01 India.com PortalServices Pvt. Ltd.

2 * Shamik Talukder 36 Vice President - Revenues 1,025,245 BA (HONS), 5 MT 12 1-Nov-06 Sony EntertainmentPGDMM - TSM Television India

* Where employed for part of the year1. All appointments are / were contractual. The other terms and conditions are as per the Company’s rules.2. Remuneration includes salary, allowances,monetary value of perquisites and perquisite value of accommodation & motor

car as per the Income Tax Act, 1961.3. None of the above employees is a relative of any Director of the Company.4. Gratuity is contributed for the Company as a whole and hence excluded here above.


N. Kumar A. P. ParigiMumbai, May 16, 2007 Director Director


109

AUDITORS� REPORTTO THE MEMBERS OF TIMES INNOVATIVE MEDIA LIMITED (FORMERLY TIMES INNOVATIVE MEDIA PRIVATE LIMITED)

1. We have audited the attached Balance Sheet of Times Innovative Media Limited (Formerly Times InnovativeMedia Private Limited) (the Company), as at March 31, 2007, and the related Profit and Loss Account and CashFlow Statement for the year ended on that date annexed thereto, which we have signed under reference to thisreport. These financial statements are the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by the Management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report)(Amendment) Order 2004 (together the ‘Order’), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on the basis of such checks ofthe books and records of the Company as we considered appropriate and according to the information andexplanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 ofthe said Order, to the extent applicable.

4. Further to our comments in Annexure referred to in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief, werenecessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far asappears from our examination of those books;

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are inagreement with the books of account;

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this reportcomply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e. On the basis of written representations received from the Directors, as on March 31, 2007, and taken onrecord by the Board of Directors, none of the Directors is disqualified as on March 31, 2007 from beingappointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

f. In our opinion and to the best of our information and according to the explanations given to us, the saidfinancial statements together with the notes thereon and attached thereto give in the prescribed manner theinformation required by the Act and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2007;

(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.




110

ANNEXURE TO THE AUDITORS� REPORTReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative Media LimitedLimitedLimitedLimitedLimited(formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) on the Financial Statements for the on the Financial Statements for the on the Financial Statements for the on the Financial Statements for the on the Financial Statements for the year endedyear endedyear endedyear endedyear endedMarch 31, 200March 31, 200March 31, 200March 31, 200March 31, 20077777

(i) (a) The Company is maintaining proper records showing full particulars including quantitative details andsituation of its fixed assets.

(b) The fixed assets of the Company are physically verified by the Management according to a phasedprogramme designed to cover all the items once in every three years, which in our opinion, is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to the programme, thefixed assets has been physically verified by the Management during the year. The Company is in theprocess of reconciling the physical assets with the Fixed Assets Register. We are informed by theManagement, that the differences if any would not be material. In our opinion, the frequency ofverification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixedassets has not been disposed of by the Company during the year.

(ii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other partiescovered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) ofparagraph 4 of the Order are not applicable to the Company for the current year.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other partiescovered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) and (iii)(g) ofparagraph 4 of the Order are not applicable to the Company for the current year.

(iii) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business for the purchase offixed assets and for the sale of services. Further, on the basis of our examination of the books and records ofthe Company, carried out in accordance with the auditing standards generally accepted in India and accordingto the information and explanations given to us, we have neither come across nor have been informed of anycontinuing failure to correct major weaknesses in the aforesaid internal control system.

(iv) According to the information and explanations given to us, there are no transactions made in pursuance ofcontracts or arrangements referred to in Section 301 of the Act during the year to be entered in the registerrequired to be maintained under that Section and exceeding the value of Rupees Five Lakhs in respect of anyparty during the year, which have been made at prices which are not reasonable having regard to theprevailing market prices at the relevant time.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AAof the Act and the rules framed there under.

(vi) In our opinion, the Company has an internal audit system commensurate with its size and nature of itsbusiness.

(vii) The matter specified in clause (viii) of paragraph 4 of the Order regarding maintenance of cost records underclause (d) of sub-section (1) of section 209 of the Act is not applicable to the Company.

(viii) (a) According to the information and explanations given to us and the records of the Company examined byus, in our opinion, the Company is generally regular in depositing the undisputed statutory duesincluding provident fund, income tax, wealth tax, service tax, customs duty, cess and other materialstatutory dues as applicable with the appropriate authorities. As informed to us, investor education andprotection fund, employees’ state insurance, sales tax and excise duty are not applicable to the Companyfor the current year.

(b) According to the information and explanations given to us and the records of the Company examined byus, there are no dues of income-tax, wealth-tax, service tax, custom duty and cess which have not beendeposited on account of any dispute.

(ix) As the Company is registered for a period less than five years, clause (x) of paragraph 4 of the Order is notapplicable to the Company for the current year.


111

(x) According to the records of the Company examined by us and the information and explanation given to us,the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holdersas at the balance sheet date.

(xi) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.

(xii) The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are notapplicable to the Company.

(xiii) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

(xiv) In our opinion, and according to the information and explanations given to us, the Company has not givenany guarantee for loans taken by others from banks or financial institutions during the year.

(xv) In our opinion, and according to the information and explanations given to us, on an overall basis, the termloans have been applied for the purposes for which they were obtained.

(xvi) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according tothe information and explanations given to us, there are no funds raised on a short-term basis which have beenused for long-term investment.

(xvii) The Company has not made any preferential allotment of shares to parties and companies covered in theregister maintained under Section 301 of the Act during the year.

(xviii) The Company has not issued any debentures during the year.

(xix) The Company has not raised any money by public issues during the year or in any earlier period.

(xx) During the course of our examination of the books and records of the Company, carried out in accordancewith the generally accepted auditing practices in India, and according to the information and explanationsgiven to us, we have neither come across any instance of fraud on or by the Company, noticed or reportedduring the year, nor have we been informed of any such case by the management.

(xxi) The Clause (ii) of paragraph 4 of the Order, is not applicable in the case of the Company for the current year,since in our opinion there are no matters which arise to be reported in the aforesaid order.



ANNEXURE TO THE AUDITORS� REPORTReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative MediaReferred to in paragraph 3 of Auditors� Report of even date to the members of Times Innovative Media LimitedLimitedLimitedLimitedLimited(formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) (formerly Times Innovative Media Private Limited) on the Financial Statements for the on the Financial Statements for the on the Financial Statements for the on the Financial Statements for the on the Financial Statements for the year endedyear endedyear endedyear endedyear endedMarch 31, 200March 31, 200March 31, 200March 31, 200March 31, 20077777


112


This is the Balance Sheet referred to in our report of even date.For and on behalf of Board of Directors

N. Kumar A. P. ParigiPartha Ghosh Director DirectorPartnerMembership No. F- 55913 S. SivakumarFor and on behalf of DirectorPrice Waterhouse & Co.Chartered Accountants Mehul Shah N. Subramanian

Company Secretary Chief Financial OfficerMumbaiDated : May 16, 2007


Rupees RupeesSOURCES OF FUNDS


Capital 1 40,000,000 40,000,000

Reserves and Surplus 2 2,086,092 17,907,946

Loan funds

Unsecured Loan 3 531,470,731 36,000,000

TOTAL 573,556,823 93,907,946


Fixed Assets 4

Gross Block 127,694,395 5,984,144

Less:Depreciation 8,995,632 930,595

Net Block 118,698,763 5,053,549

Capital Work-in-progress / Advances 44,444,476 30,000,000

163,143,239 35,053,549

Deferred Tax Asset (Net) 5 2,969,094 2,094,608

Current Assets, Loans and Advances

Sundry Debtors 6 262,676,694 123,848,536


Loans and Advances 8 429,768,939 111,244,581

712,806,720 260,524,852



Provisions 2,815,403 4,502,648

328,915,802 203,765,063

Net Current Assets 383,890,918 56,759,789

Profit and Loss Account 23,553,572 -

TOTAL 573,556,823 93,907,946


Schedules referred to above form an integral part of the Balance Sheet


113


Schedule Year ended Period endedMarch 31, 2007 March 31, 2006

Rupees Rupees

Income

Sales 10 739,896,984 224,027,981

Other Income 11 8,855,195 2,493,171

748,752,179 226,521,152

Expenditure

Production Expenses 320,411,961 135,646,183

Licence Fees 244,430,909 3,780,673

Employee Costs 12 88,294,954 33,659,839


Interest 19,327,650 205,151

Depreciation 8,065,037 839,597

Preliminary Expenses written off [Refer Note 1(ix) on Schedule 14] - 25,000

783,702,091 200,663,424

(Loss) / Profit Before Taxation (34,949,912) 25,857,728


- Current Tax - (9,200,000)

- Deferred Tax 874,486 224,126

- Fringe Benefits Tax (5,300,000) (1,060,000)

(Loss) / Profit After Taxation (39,375,426) 15,821,854

Profit and Loss Account Balance Brought Forward 15,821,854 -

Profit and Loss Balance Carried Forward to the Balance Sheet (23,553,572) 15,821,854

Earnings Per Share -Basic and Diluted (9.84) 4.01(Refer Note 15 on Schedule 14)


The Schedules referred to herein form an integral part of the Profit and Loss Account

This is the Profit and Loss Account referred to in our report of even date.For and on behalf of Board of Directors




114


Year ended Period endedMarch 31, 2007 March 31, 2006

Rupees Rupees

A) CASH FLOW FROM OPERATING ACTIVITIES :Profit / (Loss) Before Taxes (34,949,912) 25,857,728Adjustments for :Pre-incorporation profit transferred to Capital Reserve - 215,610Depreciation 8,065,037 930,595Interest Paid 19,327,650 205,151Profit on sale of Investments (325,369) -Provision for Bad and Doubtful Debts 5,601,795 3,249,218Provision for Doubtful Debts Withdrawn (4,091,691) (1,480,897)Provision no longer required written back (5,211,708) -Provision for Employee Stock Option Expenses 624,923 282,441Operating (Loss) / Profit Before Working Capital Changes (10,959,275) 29,259,846Adjustments for changes in working capital :(Increase) in Sundry Debtors (150,425,632) (125,616,858)Provision for Doubtful Debts taken over from BCCL 10,087,370 -(Increase) in Other Receivables (297,389,872) (111,244,581)Increase in Trade and Other Payables 89,591,042 197,895,317Cash used in operations (359,096,367) (9,706,276)Taxes paid (net) (28,513,999) (8,180,486)Net Cash used in Operating Activities (A) (387,610,366) (17,886,762)

B) CASH FLOW FROM INVESTING ACTIVITIES :Purchase of Fixed Assets (136,154,727) (35,984,144)Purchase of Investments (72,500,000) -Sale of Investments 72,825,369 -Net Cash used in Investing Activities (B) (135,829,358) (35,984,144)

C) CASH FLOW FROM FINANCING ACTIVITIES :Issue of Share Capital - 40,000,000Proceeds from Short Term Borrowing:- Receipts 556,970,731 36,000,000- Payments (61,500,000) -Interest Paid (10,470,411) (205,151)Net Cash from Financing Activities (C) 485,000,320 75,794,849Net (Decrease) / Increase in Cash and Cash Equivalents (A+B+C) (38,439,404) 21,923,943Cash and Cash Equivalents as at the beginning of the period 21,923,943 -Cash and Cash Equivalents as at the end of the period (16,515,461) 21,923,943NOTES ON CASH FLOW STATEMENT :

1. Cash and cash equivalents at the end of the year as per Balance Sheet 20,361,087 25,431,735Less: Book overdraft as per Schedule 9 (36,876,548) (3,507,792)

(16,515,461) 21,923,943

2. The above statement has been prepared following the “Indirect Method” as set out in Accounting Standard 3 on Cash FlowStatements issued by the Institute of Chartered Accountants of India.

3. Cash and Cash Equivalents represent Cash and Bank Balances only.4. The figures of the current year are not comparable to those of the previous period as the figures of the previous period are

for period October 26, 2005 to March 31, 20065. Cash flows in bracket indicate cash outgo

This is the Cash Flow Statement referred to in our report of even date.For and on behalf of Board of Directors




115


March 31, 2007 March 31, 2006Rupees Rupees

SCHEDULE 1 : CAPITAL

Authorised

4,000,000 Equity Shares of Rs.10 each 40,000,000 40,000,000

Issued and Subscribed

4,000,000 Equity Shares of Rs.10 each fully paid-up 40,000,000 40,000,000

40,000,000 40,000,000

Notes:

4,000,000 (previous period 4,000,000) Equity Shares of Rs. 10 each are held by

Entertainment Network (India) Limited, the Holding Company and its nominees

SCHEDULE 2 : RESERVES AND SURPLUS

Capital Reserve 2,086,092 2,086,092

Profit and Loss Account Balance - 15,821,854

2,086,092 17,907,946

SCHEDULE 3 : LOAN FUNDS - UNSECURED

Loan from Entertainment Network (India) Limited, the holding company 461,470,731 36,000,000

Loan from Times Infotainment Media Limited, the ultimate holding company 70,000,000 -

531,470,731 36,000,000

SCHEDULE 4 : FIXED ASSETS(Refer Note 1 (iv) on Schedule 14)

GROSS BLOCK DEPRECIATION NET BOOK VALUE

PARTICULARS As at Additions As at As at For the year As at As at As atMarch 31, during the March 31, March 31, March 31, March 31, March 31,

2006 year 2007 2006 2007 2007 2006

Improvements to Leasehold 76,909 - 76,909 38,455 38,453 76,908 1 38,454

Plant and Machinery - 119,235,037 119,235,037 - 5,831,713 5,831,713 113,403,324 -

Office Equipments 992,887 462,613 1,455,500 88,845 185,221 274,066 1,181,434 904,042

Computers 3,730,673 1,943,246 5,673,919 614,947 1,799,509 2,414,456 3,259,463 3,115,726

Motor Vehicles 345,472 62,860 408,332 44,599 83,292 127,891 280,441 300,873

Furniture and Fixtures 838,203 6,495 844,698 143,749 126,849 270,598 574,100 694,454

Total 5,984,144 121,710,251 127,694,395 930,595 8,065,037 8,995,632 118,698,763 5,053,549

Previous Period - 5,984,144 5,984,144 - 930,595 930,595

Capital Work in Progress [includes Capital Advance Rs.18,574,476 (previous period Rs. 30,000,000)] 44,444,476 30,000,000

Grand Total 163,143,239 35,053,549


116



SCHEDULE 5 : DEFERRED TAX ASSETS(Refer Note 1(v) on Schedule 14)

Assets:

Provision for Leave Encashment 354,076 263,397

Provision for Gratuity 602,879 501,393


Preliminary Expenses 5,099 6,732

6,876,321 2,527,924

Liability:

Fixed Assets 3,907,227 433,316

2,969,094 2,094,608

SCHEDULE 6 : SUNDRY DEBTORS(Unsecured) (Refer Note 3 on Schedule 14)

Debts outstanding for a period exceeding six months

Considered Good 11,746,422 -

Considered Doubtful 11,027,451 -

22,773,873 -

Other Debts

Considered Good 250,930,272 123,848,536

Considered Doubtful 6,372,569 5,802,546

257,302,841 129,651,082

Total 280,076,714 129,651,082

Less: Provision for doubtful debts 17,400,020 5,802,546

262,676,694 123,848,536

SCHEDULE 7 : CASH AND BANK BALANCES

Cheques in hand 7,550,339 4,613,699

Balance with Scheduled Bank:

On Current Account 3,714,540 318,036

On Deposit Account 9,096,208 20,500,000[Deposits aggregating Rs. 7,500,000 and Rs. 286,600 are lying under Lienwith CMD, Delhi Transport Corporation and Defence Estates Officers, PuneCircle, respectively]

20,361,087 25,431,735


117



SCHEDULE 8 : LOANS AND ADVANCES(Unsecured and Considered Good)

Advances Recoverable in Cash or in Kind or for Value to be Received 102,883,058 69,569,717

Advance payment of Tax (net of provision) 21,134,487 -

Deposits 304,626,348 40,814,850

Due from Times Infotainment Media Limited , the Holding Company 849,687 -[Maximum Balance outstanding during year Rs. 16,849,687(previous period Rs.26,184,467)]

Due from Times Internet Limited - 90,440[Maximum balance outstanding during the year Rs. 1,828,652(previous period Rs. 90,440)]

Due from World Wide Media Limited 275,359 769,574[Maximum balance outstanding during the year Rs. 769,574(previous period Rs. 769,574)]

429,768,939 111,244,581


CURRENT LIABILITIES

Sundry Creditors (Refer Note 4 on Schedule 14) 268,283,994 194,761,082

Book Overdraft 36,876,548 3,507,792

Other Liabilities 20,939,857 993,541

326,100,399 199,262,415

PROVISIONS

Gratuity (Refer Note 1(vi) on Schedule 14) 1,773,696 1,568,945

Leave Encashment (Refer Note 1(vi) on Schedule 14) 1,041,707 854,189

Provision for Taxation (Net of Advance Payment of Tax) - 2,079,514

2,815,403 4,502,648


118


Year ended Period endedMarch 31, 2007 March 31, 2006

Rupees Rupees

SCHEDULE 10 : SALESEvent Income (Gross) 421,873,756 206,983,969(Refer Note 1(iii) on Schedule 14)Out of Home Media Income 318,023,228 17,044,012

739,896,984 224,027,981


Interest on:- Loans to Employees 47,042 6,601- Fixed Deposits (Gross) 143,631 158,397[Tax Deducted at source Rs. 32,231 (previous period Rs. 29,048)]

Insurance Claim - 354,500Surplus on Sale of Investments 325,369 -Provision for Doubtful Debts written back 57,691 1,335,473Other Provisions written back 5,211,708 584,476Miscellaneous Income 3,069,754 53,724

8,855,195 2,493,171

SCHEDULE 12 : EMPLOYEE COSTSSalaries, Wages and Allowances 81,616,372 30,451,857Contributions to Provident and Other Funds 3,008,177 1,296,998(Refer Note 1(vi) on Schedule 14)Welfare Expenses 3,045,482 1,628,543Employees Stock Options Expense (Refer Note 9 on Schedule 14) 624,923 282,441

88,294,954 33,659,839

SCHEDULE 13 : ADMINISTRATION AND OTHER EXPENSESRent 17,829,696 2,785,632Rates and Taxes 2,526,221 84,325Share Issue Expenses - 408,900Electricity 11,324,979 186,891Communication 5,629,636 1,487,248Insurance 567,598 69,030Repairs and Maintenance:- Buildings 46,389 -- Plant and Machinery 885,948 97,176- Others 2,172,454 49,974Advertising 10,973,867 2,258,707Traveling and Conveyance 19,245,459 6,297,562Legal and Professional Fees 14,113,262 4,153,685Auditors’ Remuneration (Refer Note 8 on Schedule 14) 305,960 404,500Software (Refer Note 1(vii) on Schedule 14) 277,624 291,755Provision for Doubtful Debts 5,601,795 3,202,519Less: Provision for Doubtful Debts withdrawn (4,034,000) -Bad Debts Written Off 9,138,802 -Miscellaneous Expenses 6,565,890 4,729,077

103,171,580 26,506,981


119

SCHEDULE 14

NOTES TO THE FINANCIAL STATEMENTS

Background

Times Innovative Media Limited (the Company) was incorporated in India on October 26, 2005. The principal activity of theCompany includes Event Management and Outdoor Media business.

1. Significant Accounting Policies

i. Basis of Accounting

These Financial Statements have been prepared under historical cost convention on accrual basis and comply with theAccounting Standards referred to in Section 211 (3C) of The Companies Act, 1956, of India (The Act).

ii. Use of Estimates

The preparation of financial statements in accordance with the generally accepted accounting principles requires theManagement to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the dateof financial statements and the reported amount of expenses of the year. Actual results could differ from these estimates.Any revision to such accounting estimates is recognized in the accounting period in which such revision takes place.

iii. Revenue Recognition

Revenue from Event Management, is recognised on the completion of the event and on the basis of related servicesperformed.

Revenue from Management of Outdoors is recognised on the display of advertisements.

iv. Fixed Assets and Depreciation

Fixed Assets are stated at cost less accumulated depreciation.

Depreciation on fixed assets (except for Plant and Machinery) is provided on written down value method at the ratesand in the manner specified in Schedule XIV to the Act. The cost of leasehold improvements is amortised over theprimary period of lease of the property. Fixed Assets individually costing less than Rs. 5,000 are depreciated fully in theyear of purchase.

Plant and machinery is depreciated over the useful life of the asset, being the period of the contract, on uniform basis.

v. Deferred Tax

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differencebetween taxable income and accounting income that originate in one period and are capable of reversal in one ormore subsequent periods.

vi. Retirement Benefits

Contributions are made to the Provident Fund Trust on actual liability basis.Liabilities in respect of gratuity to employees and leave encashment benefits have been determined and accrued on thebasis of actuarial valuation.

vii. Software

Software obtained initially together with hardware is capitalised along with the cost of hardware and depreciated in thesame manner as the hardware. All subsequent purchases of software are treated as revenue expenditure and charged tothe Profit and Loss Account in the year of purchase.

viii. Foreign Currency Transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transactions. Foreigncurrency denominated assets and liabilities are translated into rupees at the exchange rates prevailing at the date of theBalance Sheet. All exchange differences are dealt with in the Profit and Loss Account, except those relating to theacquisition of fixed assets from a country outside India, which are adjusted to the cost of such assets.

ix. Preliminary Expenditure

Preliminary expenses are charged to the Profit and Loss Account in the year of incurrence.

x. Provisions and Contingent Liabilities

The Company recognizes a provision when there is a present obligation as a result of a past event that probablyrequires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure fora contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not,require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood ofoutflow of resources is remote, no provision or disclosure is made.

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT MARCH 31,2007 AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007


120


SCHEDULE 14


xi. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If anysuch indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of theasset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount,the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and isrecognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that a previously assessedimpairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverableamount.

2. Contingent Liabilities

Guarantees issued by banks on behalf of the Company Rs. 145,470,731 (Previous Period Rs. 1,250,000)

3. Sundry Debtors

Sundry Debtors includes due from Bennett, Coleman & Co. Limited Rs. 739,825 (previous period Rs. 16,260,739), fromEntertainment Network (India) Ltd. Rs 15,035,582 (previous period Rs. 9,708,676), from World Wide Media Ltd. Rs.19,110,800 (previous period Rs. 8,445,728), from Times Infotainment Media Limited Rs. 1,735 (previous period Rs. Nil) andfrom Times Internet Limited Rs. 56,120 (previous period Rs. 1,927).

4. Sundry Creditors

i. Due to small scale industrial undertakings Rs. Nil. This information has been determined to the extent such parties havebeen identified on the basis of information available with the Company. This has been relied upon by the auditors.

ii. The information pertaining to Micro and Small Enterprises as required to be disclosed in accordance with Section 22 ofMicro, Small and Medium Enterprises Development Act, 2006 is not readily ascertainable and hence not disclosed.

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

5. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account Rs. 18,047,811 (Previous Period Rs. 20,000,000)[net of advances of Rs. 18,574,476 (Previous Period Rs. 30,000,000].

(Rupees)

6. Expenditure in Foreign Currency 2006-2007 2005-2006

Event Expenses 5,019,459 -

Travel 252,772 184,262

Others - 847,050

5,272,231 1,031,312

7. Earnings in Foreign Currency

Event Income 3,823,578 1,100,000

Out of Home Media Income 541,000 -

4,364,578 1,100,000

8. Auditors’ Remuneration

Audit Fees 300,000 250,000

Other Services - 150,000

Out of Pocket Expenses 5,960 4,500

305,960 404,5009. Employee Stock Option Scheme (ESOS)

The employee cost includes sum of Rs. 624,923 (previous period Rs. 282,441) due to Entertainment Network (India)Limited, the holding company towards fair value of the options granted to the employees of the Company.


121

10. Additional information pursuant to the provision of paragraph 3 of Part II of Schedule VI to the Act

Purchase Sale

Quantity Value (Rs.) Quantity Value (Rs.)

Units of Prudential ICICI Mutual Fund –Liquid Super Inst Growth of Rs. 10 each 6,741,296 72,500,000 6,741,296 72,825,369

Total 72,500,000 72,825,369


(i) Information about Primary Business Segments (Rupees)

April 1, 2006 to March 31, 2007 October 26, 2005 to March 31, 2006

Events Outdoors Unallocated Total Events Outdoors Unallocated Total

Revenue

External 428,493,416 319,742,721 - 748,236,137 209,312,142 17,044,012 - 226,356,154

Inter - Segment - - - - - - - -

Total Revenue 428,493,416 319,742,721 - 748,236,137 209,312,142 17,044,012 - 226,356,154

Result

Segment Result 4,919,076 (21,057,380) - (16,138,304) 20,021,477 6,310,304 - 26,331,781

Unallocated Income,net of unallocatedexpenditure - - 325,369 325,369 - - (433,900) (433,900)

Interest Expense - - (19,327,650) (19,327,650) - - (205,151) (205,151)

Interest Income - - 190,673 190,673 - - 164,998 164,998

Operating Profit 4,919,076 (21,057,380) (18,811,608) (34,949,912) 20,021,477 6,310,304 (474,053) 25,857,728

Provision for Taxation - - - - - - (9,200,000) (9,200,000)

Provision for FringeBenefit Tax - - (5,300,000) (5,300,000) - - (1,060,000) (1,060,000)

Provision for DeferredTaxation - - 874,486 874,486 - - 224,126 224,126

Profit after Taxation 4,919,076 (21,057,380) (23,237,122) (39,375,426) 20,021,477 6,310,304 (10,509,927) 15,821,854

Other Information

Segment Assets 121,661,977 720,340,050 36,917,026 878,919,053 144,401,403 151,176,998 2,094,608 297,673,009

Segment Liabilities 99,026,054 686,011,986 75,348,493 860,386,533 140,187,536 55,827,209 43,750,318 239,765,063

Capital Expenditure 5,198,175 130,956,552 - 136,154,727 5,984,144 30,000,000 - 35,984,144

Depreciation/Amortisation 2,101,641 5,963,396 - 8,065,037 836,889 2,708 - 839,597

Non - Cash Expensesother than Depreciation - 624,923 - 624,923 - 282,441 - 282,441

SCHEDULE 14




122

SCHEDULE 14


(ii) Information about Secondary Business Segments:

(Rupees)

2006-2007 October 26, 2005 to March 31, 2006

Particulars India Outside Total India Outside TotalIndia India

Revenue by GeographicalSegments - External 743,871,559 4,364,578 748,236,137 225,256,154 1,100,000 226,356,154

Carrying Amount ofSegment Assets 878,919,053 - 878,919,053 297,673,009 - 297,673,009

Additions to Fixed Assets 136,154,727 - 136,154,727 35,984,144 - 35,984,144

(iii) Notes:

(i) The Company is organised into two main business segments ‘Events’, comprising of activities relating to managementof events and ‘Outdoors’, comprising of activities relating to advertising on bus queue shelters (Refer Note 16below), Light Emitting Diode (LED), Metro Stations and Flyovers. The segments have been identified and reportedtaking into account the nature of activities and services, the differing risks and returns, the organisation structureand the internal financial reporting systems.

(ii) Segment revenue in each of the above business segments represent revenue directly attributable to the respectivesegment.

Segment revenue tabulated below: (Rupees)

2006-2007 26.10.2005 to31.03.2006

Particulars Total Total

Sales 739,896,984 224,027,981

Other Income (excluding interest income and surplus onsale of investments) 8,339,153 2,328,173

Total 748,236,137 226,356,154

(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 abovesegments and amounts allocated on a reasonable basis.


12.1 Parties where control exists

Related Party Relationship

Bennett, Coleman & Co. Limited (BCCL) Ultimate Holding Company

Times Infotainment Media Limited (TIML) Holding Company of Entertainment Network (India) Limited

Entertainment Network (India) Limited (ENIL) Holding Company



123

SCHEDULE 14

NOTES TO THE FINANCIAL STATEMENTS (Contd.)12.2 Other Related Parties

Fellow Subsidiary Companies

Mirchi Movies Limited (MML)

Times Internet Limited (TIL)

Worldwide Media Ltd. (WML)

12.3 Key Managerial Personnel

Mr. A.P. Parigi Director

Mr. Sivakumar Sundaram Director

Mr. N. Kumar Director

12.4 Transaction with Related PartiesRupees

2006-2007 2005-2006

Particulars Parties where control exists Fellow Subsidiary Parties where control exists Fellow Subsidiary

BCCL TIML ENIL TIL WWM BCCL TIML ENIL TIL WWM

Transactions with Related Parties

Event Management Income 22,527,136 - 59,922,756 4,875,000 16,400,000 22,065,215 - 24,169,756* 1,749 7,664,000

Service Fees on Outdoor Revenue 19,209,080 - - - - 11,548,351 - - - -

Outdoor Advertisment Revenue 1,323,626 - 810,000 13,333 450,000 680,250 - - - -

Interest on ICD - 1,794,247 17,168,905 - - - - 205,151 - -

Recovery of Expenses 10,124,847 - 899,005 - 81,984 8,957,519 - - - -

Reimbursement of Expenses 4,157,485 569,372 13,821,860 - - 5,587,000 510,682 4,455,298 - -

Advertisement Expense 3,064,005 - 108,708 5,488,536 - - - 9,074 - -

ESOP - - 624,923 - - - - 282,441 - -

Purchase of Tickets - - - 2,732,276 - - - - - -

Business Purchase Consideration 137,033,145 - - - - - 44,662,144 - - -

Bad Debts 19,361 - - 1,927 - - - - - -

Income and liability transactedby TIML on behalf of the Company - - - - - - 81,731,356* - - -

Expenditure and Assets transactedby TIML on behalf of the Company - - - - - - 36,592,464 - - -

Advance Rent 1,331,460 - - - - - - - - -

Loan taken - 85,000,000 471,970,731 - - - - 36,000,000 - -

Loan repaid - 15,000,000 46,500,000 - - - - - - -

Balances with Related Parties

Loan from Holding Company - 70,000,000 461,470,731 - - - - 36,000,000 - -

Outstanding Receivable 739,825 1,735 15,035,582 56,120 19,110,800 16,260,739 - 9,708,676 1,927 8,445,728

Outstanding Payable 1,434,771 707,818 19,246,232 1,070,218 - - - 10,000 - -

Due from Holding Company/Fellow Subsidiary - 849,687 - - 275,359 - - - 90,440 769,574

Due to Holding Company/Fellow Subsidiary 120,631,367 - 119,723 - - 13,060,280 39,927,513 4,574,660** - -

Share Capital - - - - - - - 40,000,000 - -

* Including amounts billed to ENIL Rs. 1,934,050 (excluding service tax Rs. 197,273)** Excluding TDS on Interest amounting to Rs 41,872



124


13. As at the year-end, the Company :–

a) has no loans and advances in the nature of loans to associates

b) has no loans and advances in the nature of loans, wherein there is no repayment schedule or repayment is beyondseven years and

c) has no loans and advances in the nature of loans to firms/companies in which directors are interested.

14. Disclosure for Operating Leases

Disclosure in respect of cancelable agreements for cars taken on lease:

a) Lease payments recognised in the Profit and Loss Account Rs. 729,806 (previous period Rs. 615,332)

b) All the agreements provide for early termination by either party by giving prior notice in writing.

Disclosure in respect of non – cancelable agreements for LED taken on lease

a) Lease payments recognized in the Profit and Loss Account Rs. 1,200,000 (previous period Rs. 500,000).

b) The Agreements provides for advance payment of Rs. 7,000,000 to be adjusted over a period of 70 months towardsquarterly usage charges of higher of Rs. 300,000 or 20% of Revenue collected and earned in that quarter.

c) Future minimum lease payments under the lease are as follows :

Particulars 2006-2007 2005-2006

Not later than one year Nil Nil

Later than one year and not later than five years Nil Nil

Later than five years Nil Nil

15. Earnings per Share

2006-2007 2005-2006

(Loss) / Profit for the period (Rupees) (A) (39,375,426) 15,821,854

Weighted average number of equity shares (B) 4,000,000 3,949,045

Earnings per share – basic and diluted (Rupees) (A/B) (9.84) 4.01

Nominal value of an equity share (Rupees) 10 10

16. Purchase of Bus Queue Shelter Advertisement Management Business

The Company, vide Business Transfer Agreement dated May 16, 2007, has purchased the business of display of advertisementson BEST’s Bus Queue Shelters in Brihan Mumbai for the period 2005 – 2008 from Bennett, Coleman & Co. Limited (BCCL),for which the Company was hitherto appointed by BCCL as sole marketing and selling agent, with effect from December 1,2006 for a total consideration of Rs. 137,033,145. The consideration has been allocated to various assets and liabilities asfollows:


Fixed Assets 62,860


Provision for Doubtful Debts (10,087,370)

Deposits 76,793,605

Sundry Creditors (25,155,904)


SCHEDULE 14



125

SCHEDULE 14


17. 1) Purchase of Event Management and Outdoor Media business

In the previous period, the Company, vide Business Transfer Agreement dated November 4, 2005, had purchased theEvent Management and Outdoor Media business from Times Infotainment Media Limited with effect from October 1,2005 for a consideration of Rs. 5,763,421. The consideration had been allocated to various assets and liabilities asfollows:


Net Fixed Assets 4,188,143




Provisions (1,621,490)


2) Purchase of Delhi Metro Rail Corporation Business (DMRC)

In the previous period, the Company, vide Business Transfer Agreement dated February 06, 2006, had purchased theDelhi Metro Rail Corporation Business from Times Infotainment Media Limited with effect from February 06, 2006 fora consideration of Rs. 38,898,723. The consideration had been allocated to various assets and liabilities as follows:






18. The financial statements have been prepared on a Going concern basis taking into account the Management’s assessment ofgrowth of business and profitability plans and the continuance of the financial support by Entertainment Network (India)Limited, the Holding Company.

19. The figures of the current year are not comparable to those of the previous period as the figures of the previous period arefor period October 26, 2005 to March 31, 2006.

20. Previous period figures have been regrouped wherever necessary.

21. Refer Annexure for Additional Information pursuant to Part IV of Schedule VI to The Act

Signatures to Schedules “1” to “14” forming part of the Financial Statements.

For and on behalf of Board of DirectorsN. Kumar A. P. Parigi

Partha Ghosh Director DirectorPartnerMembership No. F- 55913 S. SivakumarFor and on behalf of DirectorPrice Waterhouse & Co.Chartered Accountants Mehul Shah N. Subramanian




126

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details:

Registration No. 1 1 - 1 5 7 0 7 8

Balance Sheet 3 1 0 3 2 0 0 7 State Code 1 1Date Date Month Year

II. Capital Raised during the Year: (Amount in Rs. Thousands)

Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds: (Amount in Rs. Thousands)Total Liabilities Total Assets

8 6 0 3 8 7 8 7 8 9 1 9

Sources of Funds

Paid-up Capital Reserves & Surplus

4 0 0 0 0 2 0 8 6

Secured Loans Unsecured Loans

N I L 5 3 1 4 7 1

Application of FundsNet Fixed Assets Investments

1 6 3 1 4 3 N I L

Net Current Assets Misc. Expenditure

3 8 3 8 9 1 N I L

Accumulated Losses Deferred Tax Assets

2 3 5 5 4 2 9 6 9

IV. Performance of Company: (Amount in Rs. Thousands)Turnover Total Expenditure

7 4 8 7 5 2 7 8 3 7 0 2

+ - Profit Before Tax + - Profit After Tax

✓ 3 4 9 5 0 ✓ 3 9 3 7 5

+ - Earning per share in Rs. Dividend

✓ 9 . 8 4 N I L

V. Generic Names for Three principal Products/Service of the Company:(As per monetary terms)

Item Code No. (ITC Code) N O T A P P L I C A B L E

Product Description N O T A P P L I C A B L E

The Company is a service provider and does not deal in any products

ANNEXURE(Refer Schedule 14 - Note 21)

ENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDRegistered Office : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West) Mumbai - 400 013.

ATTENDANCE SLIPATTENDANCE SLIPATTENDANCE SLIPATTENDANCE SLIPATTENDANCE SLIP

Annual General Meeting on Monday, September 3, 2007 at 11.00 a.m. at Sir Sitaram & Lady Shantabai Patkar Convocation Hall of S.N.D.T.Womens University (�Patkar Hall�), 1, Nathibai Thackersey Road, New Marine Lines, Queens Road, Mumbai - 400 020.

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

DP Id*DP Id*DP Id*DP Id*DP Id* Registered Folio No.Registered Folio No.Registered Folio No.Registered Folio No.Registered Folio No.

Client Id*Client Id*Client Id*Client Id*Client Id*

NAME AND ADDRESS OF THE MEMBER :

No. of Share(s) held :

I hereby record my presence at the Eighth Annual General Meeting of the Company at the Patkar Hall, 1, Nathibai Thackersey Road,New Marine Lines, Queens Road, Mumbai - 400 020, on September 3, 2007.

Signature of the Member/Proxy ______________________________

* Applicable for investors holding shares in electronic form.

_______________________________________________ TEAR HERE ______________________________________________

ENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDENTERTAINMENT NETWORK (INDIA) LIMITEDRegistered Office : Matulya Centre, 4th Floor, A-Wing, Senapati Bapat Marg, Lower Parel (West), Mumbai - 400 013.

PROXY FORMPROXY FORMPROXY FORMPROXY FORMPROXY FORM

DP Id*DP Id*DP Id*DP Id*DP Id* Registered Folio No.Registered Folio No.Registered Folio No.Registered Folio No.Registered Folio No.

Client Id*Client Id*Client Id*Client Id*Client Id*

I/We .....................................................................................................................................of ...........................................................................................................................

being a Member(s) 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 Eighth Annual General Meeting Eighth Annual General Meeting Eighth Annual General Meeting Eighth Annual General Meeting Eighth Annual General Meeting of the Company to be held on Monday, September 3, 2007

at 11.00 a.m. and at any adjournment thereof.

Signed..................... 2007.

Place: .........................................

* Applicable for Members holding shares in electronic form.

Note:Note:Note:Note:Note: The Proxy in order to be effective, should be duly completed, stamped, signed and must be deposited at the Registered Office of theCompany not less than 48 hours before the time for holding the aforesaid Meeting. The Proxy need not be a member of the Company.

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Signature

AffixRe. 1/-

RevenueStamp

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E N T E R T A I N M E N T N E T W O R K ( I N D I A ) L T D .

this didn’t happen by accident · limited will be held at sir sitaram & lady shantabai patkar...

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